Category Archives: Choke Point

Hello FBI, What about this $125 Billion?

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Where is the U.S. Department of Treasury? Where is the White House? (rhetorical)

By the hour scandals come out of the Federal government where the reaction is: ‘it is under investigation’ or we have created a task force to advise on how to correct the issue or it was due to a computer glitch.

Never do we hear that someone is going to prison for malfeasance or theft or obstruction.

So how about putting pressure on the White House to call in the FBI, build the case and then move to a criminal case? Sounds great huh? Maybe even House of Cards will do a whole series on the waste, fraud and corruption, after all it is revenue generating right? Oh…one more thing, whistleblowers have a very short life and career span in Washington DC, but there are laws where Federal employees must comply and report waste, fraud and abuse….well so it goes.

Well back to the $125 billion, while that was only LAST year.

In part: What GAO Found

A number of strategies, including implementing preventive controls and addressing GAO’s prior recommendations, can help agencies reduce improper payments, which have been a persistent, government-wide issue. The improper payment estimate, attributable to 124 programs across 22 agencies in fiscal year 2014, was $124.7 billion, up from $105.8 billion in fiscal year 2013. The almost $19 billion increase was primarily due to the Medicare, Medicaid, and Earned Income Tax Credit programs, which account for over 75 percent of the government-wide improper payment estimate. Federal spending in Medicare and Medicaid is expected to significantly increase, so it is critical that actions are taken to reduce improper payments in these programs. Moreover, for fiscal year 2014, federal entities reported estimated error rates for 10 risk-susceptible programs that exceeded 10 percent. Recent laws and guidance have focused attention on improper payments, but incomplete or understated estimates and noncompliance with criteria listed in federal law hinder the government’s ability to assess the full extent of improper payments and implement strategies to reduce them. For example, for fiscal year 2014, 2 federal agencies did not report improper payment estimates for 4 risk-susceptible programs, and 5 programs with improper payment estimates greater than $1 billion were noncompliant with federal requirements for 3 consecutive years. Identifying root causes of improper payments can help agencies target corrective actions, and GAO has made numerous recommendations that could help reduce improper payments. For example, strengthening verification of Medicare providers and suppliers could help reduce improper payments. GAO has stated that continued agency attention is needed to (1) identify susceptible programs, (2) develop reliable estimation methodologies, (3) report as required, and (4) implement effective corrective actions based on root cause analysis. Absent such continued efforts, the federal government cannot be assured that taxpayer funds are adequately safeguarded. The full report is here.

Government burns $125B in improper payments, GAO says

FederalTimes:

A Government Accountability Office report found that the federal government racked up more than $124 billion in improper payments in 2014, $19 billion above the previous year.

The Oct. 1 report found that the surge in payments came almost exclusively from Medicare, Medicaid, and Earned Income Tax Credit programs, which account for 75 percent of improper payments across the federal government.

“Federal spending in Medicare and Medicaid is expected to significantly increase, so it is critical that actions are taken to reduce improper payments in these programs,” the report said.

Improper payments include things like overpayments, underpayments or payments made for goods and services not received.

GAO estimated that since agencies began reporting improper payments in 2003, $1 trillion in federal funding has been lost to the issue.

The report called for greater compliance from government agencies, citing findings that five federal programs with more than $1 billion in improper payments were noncompliant with federal law for three years.

U.S. Comptroller General Gene Dodaro testified before the Senate Committee on Finance on Oct. 1 to address the report’s findings as well as GAO’s recommendations.

“Reducing improper payments is critical to safeguarding federal funds and could help achieve cost savings and improve the government’s fiscal position,” Dodaro said in testimony.

The report noted that Medicaid and Medicare accounted for $77.4 billion in improper benefits in 2014. To fix the problem, GAO suggested the Centers for Medicare and Medicaid improve Medicare automated audits, track postpayment recovery audit activities, remove Social Security numbers from Medicare cards to help prevent fraud and other reforms.

GAO recommended improving efficiency and oversight for Medicaid, including tracking liability for third-party insurers. CMS concurred with the recommendations and, in some cases, was already working on implementation plans for them.

The other big source of improper payments identified in the report was from the Earned Income Tax Credit, a refundable tax credit for low- to moderate-income earners, particularly those with children.

The report identified $17.7 billion in improper payments related to EITC, largely to due to the credit being incorrectly claimed on tax returns.

“As we have reported, a root cause of EITC noncompliance is that eligibility is determined by taxpayers themselves or their tax return preparers and that IRS’s ability to verify eligibility before issuing refunds is limited,” the report said.

Dodaro said that while the some fraud could play a role in improper EITC payments, the complexity of tax law has led to mistaken applications, which perpetuate improper payments.

“Complexity is definitely the heart of the problem here with the error rates,” he said. “We’re not suggesting they be made more complex. What we are suggesting is that Congress regulate paid tax preparers.”

Dodaro cited Oregon’s practice of regulating paid tax preparers, which originated in the 1970s, and pointed to a 2008 study that found Oregon tax returns are 72 percent more likely to be accurate than a comparable return from paid preparers in other states.

Read the report here.

 

Obama Admin Rewards China in Spite of Hacking

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Primer:

Every president stays at the Waldorf Astoria in New York especially during a United Nations General Assembly. Yet, since China bought the iconic hotel, the White House has expressed real concerns over intelligence conflicts, spying and hacking, hence Obama will not use the Waldorf hotel during his stay.

The Crime, Chinese Hacking

Report: Chinese Hackers Used OPM Data To Steal US Military Intel; ‘Significant Risk To US Military’

EXCLUSIVE TO FORBES: Screen shot of directory of data stolen by Iron Tiger from U.S. Defense Contractor Source: Trend Micro

Chinese hackers used data stolen from April’s OPM breach in recent thefts of terabytes of sensitive data from U.S. defense contractors, according to Trend Micro’s Vice President of Cybersecurity Thomas Kellerman. As previously reported, Trend Micro published a report on Thursday entitled Operation Iron Tiger, detailing these extensive confirmed breaches by Chinese cyber spies.

In followup to yesterday’s article on this report, I interviewed Kellerman and had further discussions last night with Dr. Ziv Chang, Sr. Director, Cyber Safety Solutions, Core Technology at Trend Micro and lead author on the report. No contact has been made with Trend representatives since last night. Kellerman stated during that interview that he believes OPM data was used in formulating the attacks discussed in the Iron Tiger Report.

OPM data was used in formulating attacks on U.S. military interests

Kellerman said he believes that data stolen from the U.S. Office of Personnel Management in the April 2015 breach of the OPM systems has been and is being used by Chinese cyber spies, named by Trend Micro as “Iron Tiger.” He said that the OPM data enabled Iron Tiger to precisely target U.S. military contractor victims as well as to know the types of information each victim would hold, determine the best methods to use to attack them and to execute attacks.

Theft of highly-sensitive, mission critical data 

When asked to characterize the types of data that Iron Tiger targeted on contractor systems Chang commented that the following types of data were targeted and exfiltrated:

  • Base Operations Support
  • Engineering, Procurement & Construction
  • Information Technology & Systems Engineering
  • Intelligence Analytics & Training
  • Language & Cultural Analysis
  • Operations and Maintenance
  • Security Assessment & Training

 

Stolen data presents a significant and serious risk to US military interests

Both Kellerman and Chang confirmed when asked that the data stolen by Iron Tiger presented a significant and serious risk to U.S. military interests and operations. Kellerman said that appropriate representatives within the US government had been notified and provided a copy of the report as well as all relevant details not included in the report such as victim (target) names and data stolen, two days before Trend Micro made the report public on its site. The latest data hacks by Iron Tiber on U.S. military interests were observed was August 21, 2015.

Kellerman stated that he believes the attacks are ongoing but may be slowed in response to global discussions about possible sanctions for breaches on civilian entites. Trend Micro is continuing to monitor the group and will report to victims and authorities as appropriate, Kellerman said. Much more here.

The Reward for China

A computer rendering of the XpressWest train.

China, U.S. Reach Agreement on High-Speed Rail Before Xi Visit

Bloomberg: A China Railway Group-led consortium andXpressWest Enterprises LLC will form a joint venture to build a high-speed railway linking Las Vegas and Los Angeles, the first Chinese-made bullet-train project in the U.S.

Construction of the 370-kilometer (230-mile) Southwest Rail Network will begin as soon as next September, according to a statement from Shu Guozeng, an official with the Communist Party’s leading group on financial and economic affairs. The project comes after four years of negotiations and will be supported by $100 million in initial capital. The statement didn’t specify the project’s expected cost or completion date.

The agreement, signed days before PresidentXi Jinping’s state visit to the U.S., is a milestone in China’s efforts to market its high-speed rail technology in advanced economies. The country has beenpushing the technology primarily in emerging markets — often with a sales pitch from PremierLi Keqiang– as a means to project political influence. A $567 million contract last October to supply trains forBoston’s subway system was China’s first rail-related deal in the U.S.

The agreement also represents an important victory in China’s high-speed rail rivalry withJapan, as the two countries havecompeted for train contracts throughout Asia. The parent company ofJR Central, Japan’s largest bullet-train maker, hadexpressed interest in the Los Angeles-Las Vegas line several years ago, and China and Japan are both expected tobid to supply train cars for a proposed high-speed rail line in California’s Central Valley.

“This is the first high-speed railway project where China and the U.S. will have systematic cooperation,” Yang Zhongmin, a deputy chief engineer with China Railway Group, said after a news conference in Beijing. “It shows the advancement of China-made high-speed railways.”

The Los Angeles-Las Vegas project will create new technology, manufacturing and construction jobs in the region, Shu’s statement said.

Through July, China had built more than 17,000 kilometers (10,565 miles) of domestic high-speed rail lines, according to the officialXinhua News Agency.

Apart from the railway project, China National Machinery Industry Corp. andGeneral Electric Co. signed a memo of understanding to invest $327 million to develop 60 wind power stations in Kenya, Shu said at the Beijing news conference.

During Xi’svisit starting next week, China and the U.S. are expected to reach agreements on trade, energy, climate, finance, aviation, defense and infrastructure construction, China Foreign MinisterWang Yi said Wednesday. Xi is due to visitBoeing Co.’s factory in Everett, Washington as China makes a push to build its own passenger planes.

“Economic and trade cooperation will be a major topic for president Xi’s visit to the U.S.,” Shu said in Beijing. “China and the U.S. share common interests and have solid foundation for cooperation.”

Update: Conditions of Voting Machines

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What can you do?

  1. Take the class to be a poll worker
  2. Call your State Secretary, ask hard questions, get documentation, never believe the first answer.
  3. Investigate machines in your district or state, irregularities should be reported to the State Attorney General.

Voting machine study finds problems – but not ones easily fixed

Across the country, aging computerized voting machines nearing end of useful life

43 states set to use machines that will be at least 10 years old

Estimated cost to upgrade voting machines at $1 billion

By Chris Adams

[email protected] 

WASHINGTON

Finding that many of the nation’s voting machines are “perilously close” to the end of their useful life, a study of voting systems in all 50 states recommended a series of steps that could be undertaken before voters cast their ballots in coming years.

Estimating it as a $1 billion problem, the experts from the Brennan Center for Justice at New York University School of Law said it likely was too late to replace equipment in most places before the 2016 election – although local officials should be preparing emergency paper ballots and taking other steps to minimize problems caused by failing machines.

 

Officials should already be looking ahead to 2020.

“One of the things that was really shocking to me is how far reaching it has become, and how few places have taken steps to replace their equipment,” said Lawrence Norden, deputy director of the Brennan Center’s Democracy Program.

The center is a nonpartisan law and policy think tank and advocacy organization that “seeks to improve our systems of democracy and justice.”

The report – “America’s Voting Machines at Risk” – was based on a wide-ranging review of the nation’s election systems. It included interviews with more than 30 state and 80 local election officials across the country.

While some voting-machine problems have been written about locally, others had not, reflecting the reality that even national elections are handled on the local level.

In fact, broad problems in voting systems can go unnoticed for years – until there is a tight election.

But many argued that unless and until equipment is replaced, we will increasingly see problems . . . flipped votes, freezes, shut downs, long lines, and, in the worst case scenarios, lost votes and erroneous tallies.

Brennan Center for Justice study ‘America’s Voting Machines at Risk’

Consider Florida and the presidential election of 2000, where the state’s hanging chads, high voter error rates and lost votes became central to the outcome and recounts that gripped the nation and put George W. Bush in the White House.

“Everything is at the local level,” Norden said. “So unless you have a Florida 2000 situation, you’re not getting national coverage of these individual problems, even if they’re becoming fairly common.

“In some ways, that’s the lesson of 2000,” he added. “There were plenty of warnings about punch-card machines before 2000, but they were reported locally. There were warnings from experts, but nobody was listening.”

As it stands, several battleground states have aging equipment.

According to Norden, 90 percent of counties in Ohio are using machines that will be at least 10 years old in November 2016. In Pennsylvania, North Carolina, Virginia and Florida, about half or more of counties have machines that will be 10 or more years old by November 2016.

The Brennan Center’s state numbers assume that equipment currently in use will not be replaced by 2016, although a very small number of counties or local jurisdictions could upgrade between the time they were surveyed and the elections.

One example of the kind of problem cited in the study: Until an upgrade last year, the voting system in Leon County, Fla., was more than 20 years old and still needed to use an old-fashioned – and slow – analog modem to transmit information. When he needed to replace those modems, voting systems manager Mark Earley turned to eBay.

“They were even hard to find on eBay,” Earley said in an interview with McClatchy. “The system was a great system, for as long as it lasted. But as that modem issued showed, it was nearing the end of its life.”

Although Leon County, which includes the state capital of Tallahassee, upgraded in time for the 2014 election, several other counties in the state are still on the same system Leon County previously used, Earley said.

The central problem is that unlike voting machines of previous eras, systems in place today were not designed to last for decades.

“No one expects a laptop to last for 10 years,” the report noted. And yet many of the voting machines today that are entering their teen years have not been properly maintained – perhaps being stored in moist conditions – or rely on outdated software.

According to the center, experts agree that the expected lifespan for core components of most voting machines purchased since 2000 is between 10 and 15 years.

In all, 43 states are using some machines that will be at least 10 years old in 2016. In 14 states, machines will be 15 or more years old.

And while officials in 31 states said they wanted to purchase new voting machines in the next five years, officials from 22 of those states said they did not know where they would get money to do so, the report said.

That said, systemic problems and aging machines don’t necessarily make for an immediate calamity.

“No one we talked to predicted there will be a vast meltdown of all, or even most, of the nation’s voting equipment in 2016,” it concluded. “Aging machines do not all fail at once on a single day.”

Read more here: http://www.mcclatchydc.com/news/politics-government/election/article35249379.html#storylink=cpy
Read more here: http://www.mcclatchydc.com/news/politics-government/election/article35249379.html#storylink=cpy

 

IRS Commissioner Still has a Job After a $600M Mistake?

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IRS Inspector General

Just check out page 2 of the Inspector General’s report found here.

Over $572 Million in Excess Obamacare Tax Credits Paid Out

FreeBeacon: provided relief to individuals who received overpayments

The Internal Revenue Service paid out over $572 million in excess Obamacare tax credits and sent incorrect forms to over half a million individuals due to a computer programming error, according a new government report.

The report released by the Treasury Inspector General for Tax Administration on Tuesday inspected the interim results of the IRS’s verification of Obamacare’s Premium Tax Credits, which were created to assist low or medium-income individuals and families to purchase health insurance in the marketplace.

 IRS Commissioner

Those who are eligible to receive tax credits under Obamacare can choose to have their credits paid either directly to their health insurance provider as a partial payment towards their monthly premiums—known as the Advance Premium Tax Credit—or can receive the tax credits as one lump sum on their annual income tax return.

According to the IRS, $11 billion worth of tax credits were paid in advance to insurers for fiscal year 2014. By March 26, 2015, the IRS processed around 1.4 million tax returns that showed $4.4 billion in credits, bringing the total to more than $15 billion for 2014. Individuals claimed more than $240 million in additional premium credits and received $572 million in excess advance payments, according to the agency.

The inspection also brought to light a computer programming error that led to more than half a million individuals receiving incorrect health insurance forms.

Incorrect versions of the Health Insurance Marketplace Form, or Form 1095-A, were sent out to 800,000 individuals who participated in Obamacare’s federal exchange.

The forms were sent as a result of a computer programming error that ultimately displayed premium amounts for calendar year 2015 rather than 2014. Taxpayers use the premium amount to determine their allowable Paid Tax Credit.

After the mistake was discovered, the Center for Medicare and Medicaid Services said that it would send corrected 1095-A forms and urged the affected individuals to hold off filling out their forms. However, the Treasury estimated that 50,000 of these individuals had already filled out their tax returns as of February 2015.

Treasury announced in late February that people who had already completed their tax returns did not have to correct the errors by filing an amended tax return and stated that they would not seek to recoup the excess payments.

“On February 24, 2015, Treasury announced that taxpayers enrolled in the Federal Exchange who have already filed their tax return do not need to file an amended tax return to correct errors in their PTC claim resulting from an incorrect Form 1095-A,” the report said. “Treasury stated that the IRS would not pursue action to recoup excess PTC these taxpayers may have received as a result of the error.”

Treasury further said in March that it would extend this relief to every person who filed an incorrect tax return with the wrong premium amounts.

“On March 20, 2015, Treasury expanded relief from filing an amended tax return to all taxpayers who received and filed a tax return based on an incorrect Form 1095-A,” the report states.

The extent to which the incorrect forms contributed to the $572 million in excess payments is unknown and still being evaluated.

The inspection also found that the IRS could not verify nearly 40 percent of enrollees who comprised the more than $15 billion in dispersed tax credits due to lack of information.

“This is par for the course with Obamacare. Even after years of work and billions of tax dollars spent, this law again and again fails to prevent the prodigious waste of Americans’ money,” said Curtis Kalin, a spokesman for the watchdog group Citizens Against Government Waste

“There must be an effective system in place to track where subsidies have been sent and to whom. That is one of the most basic safeguards against waste and fraud. Taxpayers deserve the assurance that their money isn’t being hopelessly squandered, especially when there are commonsense ways to prevent it.”

Legitimate Voting is up to YOU at the Local Level

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The most precious duty real citizens have is to vote, but must be an informed voter, where the vote is good for the country. Ensuring votes are made in a legitimate location, not duplicated, not under fraudulent names and with validated identification must be task undertaken by every citizen at the local level. Understand the laws, challenge the voter rolls and volunteer.

Voter Fraud across the country in past elections has been noted and reported with little consequence and this is where demands for investigations and prosecutions come into play.

Fraud cases below:

North Carolina

Florida

Maryland

Ohio

Need more?

300 cases investigated by the Heritage Foundation

The Heritage Foundation’s list of nearly 300 documented cases of voter fraud in the United States continues to grow.

Recent additions reveal that voter fraud is not just an individual or isolated crime; in some counties and communities, election fraud is almost a way of life.

These additions again reinforce the need for measures such as voter ID laws and procedures designed to verify the accuracy of voter registration information are needed to prevent these crimes in the first place.

Take East Chicago, Ind., for example, a town made infamous by the extensive voter fraud that occurred there in the 2003 Democratic mayoral primary election. More details here.

At the County level:

 

Election Group: 141 U.S. Counties Have More Registered Voters Than People

Firm says they’ll bring lawsuits if voter rolls are not purged

FreeBeacon: A public interest law firm is threatening to bring lawsuits against more than 100 counties across the United States that appear to have more registered voters than living residents.

The Public Interest Legal Foundation (PILF), a law firm dedicated to election integrity based in Indiana, recently sent statutory notice letters to election officials in 141 counties putting them on notice of their discoveries. The group says if action is not taken to correct the questionable voter rolls, they will bring lawsuits against every single county on the list.

“Corrupted voter rolls provide the perfect environment for voter fraud,” said J. Christian Adams, president and general counsel of PILF. “Close elections tainted by voter fraud turned control of the United States Senate in 2009. Too much is at stake in 2016 to allow that to happen again.”

The statutory notice letters argue the counties are violating the National Voter Registration Act (NVRA) and urge them to correct the issue, claiming their voter rolls contain a substantially high amount of ineligible voters. The group used federally produced data to come to their conclusions.

“Voter rolls across America have been discovered that contain substantial numbers of ineligible voters, resulting in the possible disenfranchisement of legally eligible voters via ballot dilution that threatens to subvert the nation’s electoral process,” a sample letter sent to the counties reads.

“Based on our comparison of publicly available information published by the U.S. Census Bureau and the federal Election Assistance Commission, your county is failing to comply with Section 8 of the NVRA,” it continues. “Federal law requires election officials to conduct a reasonable effort to maintain voter registration lists free of dead voters, ineligible voters and voters who have moved away.”

“In short, your county has significantly more voters on the registration rolls than it has eligible live voters and is thus not reasonably maintaining the rolls.”

According to PILF, the 141 counties targeted for their suspicious voter rolls span across 21 states and include: Michigan (24 counties), Kentucky (18), Illinois (17), Indiana (11), Alabama (10), Colorado (10), Texas (9), Nebraska (7), New Mexico (5), South Dakota (5), Kansas (4), Mississippi (4), Louisiana (3), West Virginia (3), Georgia (2), Iowa (2), Montana (2), and North Carolina (2), as well as Arizona, Missouri, and New York (1 each).

Data provided by the group also shows that some counties have voter registration rates that exceed 150 percent.

Franklin County, located in Illinois, contains the highest voter registration rate of any county on the list at 190 percent. Franklin is followed by Pulaski County, also located in Illinois. Pulaski boasts a 176 percent voter registration rate, according to the group.

Adams said former Attorney General Eric Holder and current AG Loretta Lynch refused to enforce the law because they don’t have a problem with corrupted voter rolls.

“Eric Holder and Loretta Lynch have deliberately refused to enforce this law because they have no problem with corrupted voter rolls,” Christian Adams told the Washington Free Beacon in an email statement. “They don’t like the law, so they don’t enforce it. It’s a pattern that has come to characterize this Justice Department.”