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Archive for the ‘Law Enforcement’ Category

How Bad Antitrust Enforcers Kill People

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Matt Stoller comments in BIG on a NY Times story I blogged recently:

How A Merger Killed the Ventilator Market

The New York Times had an important story about the ventilator market a few days ago, with Nicholas Kulish, Sarah Kliff and Jessica Silver-Greenberg reporting why a government effort to stock up on the machines after the SARS epidemic failed.

In 2006, in attempt to learn from what might happen should a SARS-like disease hit here, civil servants in government decided to stockpile ventilators. They wanted both more ventilators and better ventilators than were on the market. So government officials found a small innovative corporation called Newport Medical, and contracted with the corporation to design a cheaper and better version.

Ventilators at the time typically went for about $10,000 each, and getting the price down to $3,000 would be tough. But Newport’s executives bet they would be able to make up for any losses by selling the ventilators around the world.

“It would be very prestigious to be recognized as a supplier to the federal government,” said Richard Crawford, who was Newport’s head of research and development at the time. “We thought the international market would be strong, and there is where Newport would have a good profit on the product.”

At first the project seemed on track. Newport built a working prototype, and the government was on track to order 40,000 ventilators to put into the national stockpile. Newport would then be able to sell additional units into the health care market, as well as abroad. But in 2012, Covidien, a large medical device manufacturer and distributor, bought up Newport Medical, canceled the Federal contract, and shut down Newport’s ventilator line of business.

The result, in 2020, is that we don’t have enough ventilators in a pandemic.

There are three failures of policy here. I’ll start with the simplest, which is that the merger should have been blocked.

Antitrust Failure

The merger by any standard was a clear-cut antitrust violation. There are two theories as to why Covidien sought to buy Newport. First, Covidien already had a ventilator product, and didn’t want to compete with a lower priced and better version. Covidien bought Newport to take its competitive product out. That’s called a ‘killer acquisition,’ meaning that the goal is to undermine a potentially innovative or lower prices product line.

The second is that roll-ups were part of a broader consolidation trend in the industry in general. “Manufacturers,” as the Times reported, “wanted to pitch themselves as one-stop shops for hospitals, which were getting bigger, and that meant offering a broader suite of products.”

Both theories are likely true. Covidien from 2008-2014 bought 17 other corporations. Covidien pitched itself not just as a device maker, but as a device distributor to hospitals. It even called itself a platform, saying in its press release bleating about the acquisition that the acquisition would strengthen its “ventilation platform” for patients around the world. In other words, Covidien was both trying to take out a potential competitor *and* strengthen its own bargaining posture against hospital purchasers, who were themselves getting bigger.

The merger should have and could have been blocked on many different grounds, the simplest being the killer acquisition theory. Yet the Federal Trade Commission, led by Jon Leibowitz, just waved the illegal merger through without even asking any questions. Now there are calls, by both FTC Commissioner Rebecca Kelly-Slaughter, and antitrust thinkers across the board, to reexamine this merger. In Congress, Antitrust Committee Chairman David Cicilline made this point on Twitter. . .

Continue reading. There’s much more, and it shows the degree to which the US is out of whack. Later in the column:

The roll-up of device makers that Covidien was pursuing was part of a longstanding consolidation in the medical industry that correlated to consolidation more broadly. Because our antitrust laws focus on low consumer prices, what has happened across the economy is the creation of ‘power buyers.’

Most people look at monopolies who made commodities, say, steel, and believe a monopoly manifests by how much that company can raise the price of what it sells. But monopolies can operate on the buying side too. Walmart is a buying monopoly, able to use its market power to push prices down against suppliers and workers. I mean if you sell a large chunk of your product to Walmart, they can tell you what price to take. The price to consumers may be low, but that’s because Walmart is using market power against the supplier and not the consumer. But because our antitrust enforcers don’t see anything but consumer prices, corporations like Walmart became far more powerful from the 1980s to the 2000s.

As Olivia Webb noted, there was a Walmart-ization of the medical industry as well, as hospitals combined purchasing power in cartels called Group Purchasing Organizations. GPOs buy supplies for hospitals, and they are supposed to get better prices. But they often don’t. In 1986 Congress exempted them from anti-kickback laws, so there are huge conflicts of interest in how they operate. GPOs are also big. In 1996, the Clinton administration basically said GPOs wouldn’t be subject to antitrust prosecution. Today, for context, just four GPOs account for 90% of generic pharmaceutical purchasing. GPOs also handle medical devices.

Throughout the 2000s and 2010s, one of the results of these choices, as well as the refusal to enforce merger law or antitrust, was the concentration in these corporations that sell things to hospitals, everything from syringes to software. During the HIV epidemic, a corporation called Retractable Syringes developed a safer syringe that doctors and nurses wanted to prevent accidental needlesticks, but GPOs prevented them from selling their product to hospitals. None of this went unnoticed. Congress held hearings, to no avail, on all sorts of innovative medical devices that couldn’t make it into hospitals. Retractable won a private antitrust lawsuit, but more recently it lost one on appeal. Without legal redress, much of the medical device industry consolidated. Covidien itself was bought by Medtronic a few years ago.

Written by LeisureGuy

1 April 2020 at 5:36 pm

Kushner Firm Built the Coronavirus Website Trump Promised

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Self-dealing is the norm with the Trump administration. Robinson Meyer writes in the Atlantic:

On March 13, President Donald Trump promised Americans they would soon be able to access a new website that would ask them about their symptoms and direct them to nearby coronavirus testing sites. He said Google was helping.

That wasn’t true. But in the following days, Oscar Health—a health-insurance company closely connected to Trump’s son-in-law, Jared Kushner—developed a government website with the features the president had described. A team of Oscar engineers, project managers, and executives spent about five days building a stand-alone website at the government’s request, an Oscar spokesperson told The Atlantic. The company even dispatched two employees from New York to meet in person with federal officials in Washington, D.C., the spokesperson said. Then the website was suddenly and mysteriously scrapped.

The site would not have helped many Americans even if it had launched. Today, more than two weeks after the president promised a national network of drive-through test sites, only a handful of such sites have opened, and fewer than 1 million Americans have been tested.

The full extent of Oscar’s work on the project has not been previously reported. The partnership between the administration and the firm suggests that Kushner may have mingled his family’s business interests with his political interests and his role in the administration’s coronavirus response. Kushner’s younger brother Joshua is a co-founder and major investor in Oscar, and Jared Kushner partially owned or controlled Oscar before he joined the White House. The company’s work on the coronavirus website could violate federal ethics laws, several experts said.

For the past several weeks, Kushner has led a “shadow task force” on the coronavirus, separate from Vice President Mike Pence’s official committee, according to The Washington Post. Kushner’s team, composed of federal officials allied with Kushner and outside corporate executives, has met in the headquarters of the Department of Health and Human Services. A senior official at that agency called Oscar to ask for its help on March 13, the day of Trump’s press conference, the Oscar spokesperson said.

Kushner’s group has focused on expanding and publicizing coronavirus testing, especially at drive-through locations. Oscar’s website would have asked users if they were experiencing symptoms of COVID-19, the illness caused by the virus, and surveyed them about other risk factors, including their age and preexisting conditions. It also would have listed a limited number of testing locations nationwide, including some of the drive-through sites that Trump promised. It was designed to look like a government-developed product, provided freely by the Department of Health and Human Services to the American public. Oscar posted the source code for the site to Github, where The Atlantic reviewed it.

The site resembled a version of a tool Oscar had already built for its customers in response to the crisis, but it was “adjusted to meet the specifications and requirements set by the federal government,” Jackie Kahn, the Oscar spokesperson, said in an emailed statement. That Oscar had already been working on a coronavirus-testing website when HHS called to ask for help was a coincidence that had nothing to do with Kushner, Kahn suggested. She declined to say whether Oscar had discussed that site with Joshua Kushner or any board members or investors before Trump’s March 13 press conference.

Oscar donated its work freely and never expected to be paid for the project, Kahn said. The company is “not, nor has ever been,” a contractor or subcontractor for the government, she said, which would make it harder for the government to pay Oscar for its work. The work was “all at the direction of HHS,” she said. “The website never saw the light of day,” she added in an interview today.

That may not matter from an ethics perspective. The ad hoc nature of Kushner’s task force has already collided with federal laws. Oscar’s involvement deepens Kushner’s ethics and conflict-of-interest problems.

“It’s not typical. It’s usually not allowed,” Jessica Tillipman, an assistant dean at the George Washington University School of Law and an expert on anti-corruption law, told me.

Oscar’s relationship with the Trump administration could breach federal law in two ways, Tillipman and other experts told me. First, companies are generally not supposed to work for the federal government for free, though some exceptions can be made in a national emergency. “The concern, when you have some free services, is that it makes the government beholden to the company,” Tillipman said.

More important, she said, any Kushner involvement may have violated the “impartiality rule,” which requires federal employees to refrain from making decisions when they even appear to involve a conflict of interest. The rule also prohibits federal employees from making a decision in which close relatives may have a financial stake. Such a situation would seem to apply to Kushner and Oscar. In 2013, Jared and Joshua were the “ultimate controlling persons in Oscar’s holding company,” according to a New York State report that Mother Jones dug up earlier this month. . .

Continue reading.

Written by LeisureGuy

31 March 2020 at 12:17 pm

The US puts imprisons a much higher proportion of its citizens than any other country. Here’s what their life is like.

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In September 2013, the incarceration rate of the United States of America was the highest in the world at 716 per 100,000 of the national population. While the United States represents about 4.4 percent of the world’s population, it houses around 22 percent of the world’s prisoners. – Wikipedia

Country Prison
population
Population
per 100,000
US 2,193,798 737
China 1,548,498 118
Russia 874,161 615
Brazil 371,482 193

Following is a list from Wikipedia of  the worst countries in the world based on the proportion of their citizens they imprison. The US is comfortably in the lead. The list is much longer — these are just the worst. Canada is #142, at 107/100K. Some others:

Japan #207 (39/100K)
Finland #195 (53/100K)
Norway #190 (60/100K)
Sweden & Netherlands (tie) #189 (61/100K)
Germany #171 (77/100K)
United Kingdom: Scotland #106 (149/100K)
United Kingdom: England & Wales #111 (140/100K)
Australia #98 (170/100K)

United States: We’re No. 1!! 655/100K

Written by LeisureGuy

13 March 2020 at 4:30 pm

Why the International Criminal Court will investigate possible U.S. war crimes — even if the Trump administration says it can’t

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Kelebogile Zvobgo writes in the Washington Post:

Judges in the Appeals Chamber of the International Criminal Court on Thursday authorized Chief Prosecutor Fatou Bensouda to open an investigation into alleged U.S. war crimes in Afghanistan. This is a big milestone in international criminal justice — for the first time in history, U.S. leaders, armed forces and intelligence personnel may face a trial in an international court for crimes perpetrated in the context of the nation’s wars abroad.

In April, the Pre-Trial Chamber rejected Bensouda’s first request for an investigation. On Thursday, Secretary of State Mike Pompeo condemned the Appeals Chamber’s overturning of the decision, calling the ICC “an unaccountable political institution masquerading as a legal body.”

What are the alleged abuses? How does the ICC have jurisdiction over the United States? What will ordinary U.S. citizens make of an ICC investigation? My research explains how U.S. citizens are more supportive of the ICC than the Trump administration’s rhetoric suggests.<

The ICC prosecutor examined evidence of U.S. torture and abuse

In 2006, the ICC’s Office of the Prosecutor (OTP) opened a preliminary examination into allegations of war crimes and crimes against humanity in the Afghan conflict since 2003 — the year Afghanistan became a member of the ICC.

The OTP examined allegations of abuses by both anti-government and pro-government forces, including the Taliban, the Afghan National Security Forces, the United States, armed forces and the CIA. The OTP says the information it gathered indicates, among other allegations, that U.S. interrogation techniques used in Afghanistan — involving “torture, cruel treatment, outrages upon personal dignity, and rape” — amount to war crimes.

Some ICC judges are worried about going after the U.S.

The United States is not a member of the ICC. However, the treaty that created the court, the Rome Statute, allows it to investigate citizens of nonmember states if the alleged crimes occurred on the territory of a member state. Once Afghanistan ratified the Rome Statute and joined the ICC in 2003, U.S. military and intelligence personnel in Afghanistan came under the court’s jurisdiction.

[The International Criminal Court was established 20 years ago. Here’s how.]

In November 2017 — after more than a decade of gathering evidence — the prosecutor requested authorization to open a full investigation, arguing there was “a reasonable basis to believe” U.S. military and intelligence personnel committed war crimes.

A year and a half later, in April 2019, the Pre-Trial Chamber unanimously rejected the request. The judges agreed the request was in the ICC’s jurisdiction and admissible before the ICC. However, they claimed the investigation would probably not be successful and, therefore, it would not serve the interests of justice to proceed.

The 2019 decision sparked controversy in the human rights community. Amnesty International and Human Rights Watch issued statements criticizing the court’s judges for capitulating to the Trump administration’s threats and, in the process, abandoning the victims of the alleged crimes.

The ICC will move ahead, despite the political risks

Bensouda swiftly appealed the decision. Her office coordinated a multifaceted response, drawing on submissions from victims’ legal representatives and amicus curiae briefs from human rights organizations.

[The U.S. revoked the visa for the ICC prosecutor. That bodes poorly for international criminal justice.]

On Thursday, the Appeals Chamber unanimously reversed the Pre-Trial Chamber’s decision, saying it had gone beyond its power by rejecting the prosecutor’s request. The Rome Statute requires only that the Pre-Trial Chamber determine whether “there is a reasonable basis to proceed with an investigation” and whether “the case appears to fall within the jurisdiction of the Court.”

Since these facts were not in dispute, there was no basis to reject the prosecutor’s request. Last week’s decision authorizes . . .

Continue reading.

Written by LeisureGuy

11 March 2020 at 4:14 pm

The US criminal-justice system: Flawed and dangerous to citizens

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Pamela Colloff and Katie Zavadski report in ProPublica:

Imagine being arrested for a crime you did not commit.

You are taken to jail, where you wait to stand trial.

You eventually get your day in court, but before you can present your case, prosecutors call a witness who has a damning story to tell.

It’s a fellow inmate from the jail who claims he heard you confess to committing the crime.

Each man featured here was wrongly convicted, in part, on the word of a jailhouse informant. Each served years, even decades in prison. And in each case, the information the snitch gave eventually proved false.

Nine of the men pictured here were condemned to what amounted to a life sentence. One man was sentenced to death.

Their cases afford a rare opportunity not only to see the human cost of jailhouse informant testimony that is false or concocted, but to see how widespread prosecutors’ reliance on these witnesses is. These exonerees hail from all across the country: from California to Kentucky, Illinois to Pennsylvania. They come from big cities and small towns. They are black, white and Latino. Their cases span four decades — dating back as far as 1982, and ending in an exoneration as recently as last year.

Despite these cases, and a spate of other wrongful convictions that have come to light in recent years, jailhouse informant testimony remains an entrenched part of criminal prosecutions around the country and one of the leading causes of wrongful convictions.

“Jailhouse informants comprise the most deceitful and deceptive group of witnesses known to frequent the courts,” concluded a high-profile 2001 judicial inquiry into the wrongful conviction of a Canadian man named Thomas Sophonow. “Usually their presence as witnesses signals the end of any hope of providing a fair trial.”

Their unreliability is rooted in a curious fact of the criminal justice system: The state is allowed to offer extraordinary benefits to people behind bars if they offer testimony that is favorable to the state’s case. These rewards may include reduced sentences, the dismissal of charges and even cash payments. Or the rewards may be far more modest. In one case featured below, a jailhouse snitch said he received just $25 and a pack of cigarettes for offering false information.

Because benefits are often conferred after a case goes to trial, prosecutors can assure jurors that no promises have been made. As ProPublica and The New York Times Magazine reported in December, Florida prosecutors repeatedly used a prolific jailhouse informant to help secure convictions, and even death sentences. Prosecutors told jurors they had not promised him anything in return, then gave him break after break after he testified, allowing him to be released from jail and to do more harm.

Rarely is anyone held to account when a jailhouse informant’s testimony later proves to be false. In Orange County, California, where an ongoing jailhouse snitch scandal has implicated top prosecutors and law ​enforcement officials — and tainted at least 140 cases, according to a pending lawsuit by the American Civil Liberties Union — no one has yet been prosecuted or disciplined for misconduct.

I spoke to the exonerees below about the experience of having their lives destroyed by a system that incentivizes jailhouse informants to lie. Many of these wrongfully convicted men lay the blame not on the informants themselves, but on the prosecutors and detectives who continue to rely on snitch testimony to make their cases, sending potentially innocent men and women to prison. . .

Continue reading for the exonerees’ experience.

Written by LeisureGuy

11 March 2020 at 12:54 pm

How Much Has the Government Spent at Trump’s Properties? It Won’t Say.

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Ilya Marritz reports in ProPublica:

This month, The Washington Post detailed lots of previously undisclosed government spending at the president’s properties. For example, the Secret Service has paid $650 per night to stay at Mar-a-Lago, despite Eric Trump’s statement that his father’s company would provide rooms “for free — meaning, like, cost for housekeeping.”

The Post’s figures — adding up to $471,000 — are far from complete because government agencies have resisted disclosing their spending at Trump properties.

“He’s paying our money to himself,” the Post’s David Fahrenthold said in our latest episode of “Trump, Inc.” “There must be so much more we haven’t seen.”

While the president has visited his properties on nearly a third of his days since he took office, the Secret Service has not listed its spending on Trump properties in a public database of federal spending. And some of what has been disclosed has been misleading. The Post discovered that the nearly dozen payments listed as “Trump National Golf Club” were actually made to Mar-a-Lago, which is not a golf club.

The White House did not respond to the Post’s questions about the payments. The Secret Service said it always “balances operational security with judicious allocation of resources.” It did not explain why it hadn’t disclosed the spending in the government’s public database. And the Trump Organization said it’s not currently charging the Secret Service $650 per room per night. [Do you believe anything the Trump Organization claims? – LG]

There are still plenty of questions. For one: . . .

Continue reading.

Written by LeisureGuy

11 March 2020 at 11:39 am

Utah: The surveillance state

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Jason Koebler and Emanuel Maiberg write in Vice Motherboard:

As the state of Utah funneled hundreds of thousands of taxpayer dollars to a private surveillance company building unproven technology to fight the opioid crisis, public health officials asked if the money could instead be used to buy a life saving drug that stops potentially fatal overdoses, Motherboard has learned.

The money, which Utah gave to a company called Banjo via the state’s Department of Health, in this instance totaled $250,000. Emails between the Utah Department of Health, the state’s Attorney General’s office, and the Drug Enforcement Agency obtained via public records request show that the Department of Health asked if some of the money allocated to Banjo via a program called DEA 360 could be used to buy naloxone (sometimes sold under the brand name Narcan), a medication used to counter the effects of an opioid overdose. The Department of Health said it was facing a funding shortage that would result in a gap in its naloxone supply and believed the money allocated to create an unproven AI would be better spent on the overdose-stopping drug.

“I wanted to follow up regarding the remaining funds for DEA 360 ($250,000),” Anna Fondario, who manages the Violence & Injury Prevention Program at the Utah Department of Health wrote in a March 2019 email to Brian S. Besser and Ciara Gregovich at the DEA and the Utah Attorney General chief of staff Ric Cantrell. “We previously discussed having the AG’s Office invoice us for BANJO related activities. Is this still the case?”

Fondario added: “If not, we’ve identified a need for an additional supply of naloxone kits to cover a potential two month gap before other funding is available for kits, Would you be interested in using some of this funding for naloxone?”

Later that same day, Besser forwarded Fondario’s email to Cantrell and Gregovich, saying: “I want these funds (the whole $250K) to go to Banjo … I thought this was already in progress?”

While these funds were not specifically earmarked for the purchase of naloxone, the news shows how governments spend vast amounts of money on private, for-profit companies developing unproven and untested policing technologies while failing to fund projects that pay for medication that can save the lives of people caught in the country’s opioid crisis.

In an interview, Fondario said that  . . .

Continue reading.

Written by LeisureGuy

10 March 2020 at 12:08 pm

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