Category Archives: Industry Jobs Oil Economics

HUD, Housing Urban Development, Fleecing-Scandals

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The truth and facts are in the details but details never seem to matter or to be an agenda stopper.

Is there just one government agency that operates without a scandal or fleecing the taxpayers? Housing and Urban Development is headed by Secretary Julian Castro and former mayor of San Antonio. By the way, his name has been floated as a candidate for Hillary’s running mate to ensure to Latino vote.

Obama himself has kept a close eye on Castro and is helping him build his resume for bigger political ambitions in spite of a history of scandals based in San Antonio.

HUD backs $9.5 million loan on property valued at $3.8 million

COLORADO SPRINGS, Colo. —The Department of Housing and Urban Development provided a $9.4 million loan guarantee to renovate an apartment complex here eight months after the owner convinced the county to value the complex at just $3.8 million, a Watchdog.org investigation found.

The loan for Apollo Village Apartments defaulted and the property was foreclosed on in 2012 with HUD losing as much as $4.5 million on the deal, public trustee records show.

Pete Sepp, president of the National Union of Taxpayers, said these government programs put a substantial amount of taxpayer money at risk and should be eliminated.

“Unfortunately, many government loan programs to individual business people aren’t necessarily dictated by the best interests of taxpayers or the laws of the marketplace,” he said after reviewing information Watchdog.org provided him on the loan. “It’s a classic dilemma we see with the federal subsidies programs.”

Instead of foreclosing, HUD sold the note to a private company for $5 million and the company foreclosed on the property six months later, selling the Apollo complex for $6.2 million – netting a $1.2 million profit the government could have realized to offset part of the loss, foreclosure and HUD records show.

“Apollo Village #101-11128 was insured by HUD through a 223f loan in the amount of $9,401,500.00 on March 23, 2009,” according to an email from Baumann.

The owner, represented by a Denver appraisal firm, filed a property tax appeal on May 27, 2008, and the County Board of Equalization reduced the value of the property from $7.199 million to $3.810 million on July 24, 2008, according to county records and the assessor’s office.

County records showed 36 units were condemned in 2008, and building permits for siding, roof and structural repairs were issued between 2009 and 2014.

HUD rules for market-rate apartments only allow the agency to guarantee 83.3 percent of the project’s value after the repairs are completed, which means HUD estimated the value of the repaired project to be about $11.3 million. Federal HUD officials said they did not have any appraisal information for the project, and the local office was looking to see if any documents were available. Read the report in full here.

There is more of course:

Why Are Over-Income Tenants Living in Public Housing?

A recent report from the Department of Housing and Urban Development’s (HUD’s) Office of Inspector General (OIG) and subsequent news articles have raised questions about the treatment of so-called “over-income” families living in federally assisted public housing. “Over-income” families had, at the time of their initial move-in, income low enough to be eligible to live in public housing (income at or below 80% of local area median income), but their incomes later increased above the eligibility threshold. The Inspector General report found that as many as 25,226 over-income families resided in public housing in 2014 (2.6% of all public housing residents). While the majority of over-income families had incomes that exceeded the initial income eligibility limits by less than $10,000, a small subset of families had incomes that were significantly higher.

As HUD has pointed out in its response to the OIG report, allowing over-income families to remain in public housing is not inconsistent with federal law or regulations. Read the report in total here.

 

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.

 

More TPP, Transpacific Partnership Pact Facts

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During Hillary Clinton’s time as Secretary of State, she was for the TPP and now, well she has flipped on that position.

This is yet another shot across the bow of the White House where she is separating herself from Barack Obama, but is she really?

Hillary Clinton announced Wednesday that she opposes the Trans-Pacific Partnership trade deal.

“I’m continuing to learn about the details of the new Trans-Pacific Partnership, including looking hard at what’s in there to crack down on currency manipulation, which kills American jobs, and to make sure we’re not putting the interests of drug companies ahead of patients and consumers,” she said in a statement. “But based on what I know so far, I can’t support this agreement.”

At the end of the segment of Senator Rand Paul this week with Bret Baier on Fox, Paul describes some of the classified maneuvers of the TPP.

One particular group, left leaning for sure is WikiLeaks, who has been an interesting champion of trying to get all the details on the Transpacific Partnership Part.

TPP leaked: Wikileaks releases intellectual property chapter of controversial internet and medicine-regulating trade agreement

Bolton of Independent:

Wikileaks has released the Intellectual Property Rights chapter of the controversial Trans-Pacific Partnership (TPP) agreement, which they claim contains rules and regulations that would have “wide-ranging effects on internet services, medicines, publishers, civil liberties and biological patents.”

The idea behind the TPP is free trade – amongst the member states, it aims to lower trade barriers, create a common standard for intellectual property, enforce labour and environmental law standards and promote economic growth.

The agreement has come under severe criticism and scrutiny, however, for the policy of total secrecy during the years-long negotiations.

Others have criticised the more stringent intellectual property laws it would introduce, which could extend copyright terms and mean harsher penalties for file-sharers.

A number of trade unions and economists, such as Joseph Stiglitz, have said the agreement “serves the interest of the wealthiest”, and caters to the needs of corporations rather than the citizens of member nations.

Concerns have also been raised over the effect it could have on the cost of medicines – by extending the intellectual property rights of certain branded drugs, delays in the development of cheaper, ‘generic’ versions of these drugs could ensue, potentially leading to poorer people having to wait much longer than the wealthy to get access to the newest medicines.

The chapter on these intellectual property issues is what has been leaked by Wikileaks, and is one of the more controversial chapters in the whole agreement.

Peter Maybarduk, the program director at Public Citizen’s Global Access to Medicines, said that if the TPP is ratified, “people in the Pacific-Rim countries would have to live by the rules of this leaked text.”

“The new monopoly rights for big pharmaceutical firms would compromise access to medicines in TPP countries. The TPP would cost lives.”

The document, dated 5 October, was apparently produced on the day it was announced that the 12 member states to the treaty had reached an agreement after five and a half years of negotiations.

The nations of Vietnam, Peru, Mexico, Malaysia, Japan, Canada, Australia, USA, Singapore, New Zealand, Chile and Brunei are all prospective member states to the free-trade agreement, between them representing over 40 per cent of the world economy.

Despite the leak, the final text of the TPP is reportedly being held until after the Canadian general election, on 19 October.

While, as Wikileaks says, there still needs to a be a final “legal scrub” of the document before it is finished, negotiations on the document between signatories have now ended.

 

Hotel Chains Credit Cards Hacked

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Not the first case for hotel chains not protecting guest records.

FromHotelManagement: A U.S. appeals court said the Federal Trade Commission has authority to regulate corporate cyber security, and may pursue a lawsuit accusing hotel operator Wyndham Worldwide Corp of failing to properly safeguard consumers’ information.

The 3-0 decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia on Monday upheld an April 2014 lower court ruling allowing the case to go forward. The FTC wants to hold Wyndham accountable for three breaches in 2008 and 2009 in which hackers broke into its computer system and stole credit card and other details from more than 619,000 consumers, leading to over $10.6 million in fraudulent charges.

The FTC originally sued Wyndham in 2012 over the lack of security that led to its massive hack. But before the case proceeded, Wyndham appealed to a higher court to dismiss it, arguing that the FTC didn’t have the authority to punish the hotel chain for its breach. The third circuit court’s new decision spells out that Wyndham’s breach is exactly the sort of “unfair or deceptive business practice” the FTC is empowered to stop, reports Wired.

BusinessInsider: In August, Visa alerted numerous financial institutions of a breach. Five different banks determined the commonality between the cards included in that alert was that they were used at Hilton properties — including Embassy Suites, Doubletree, Hampton Inn and Suites, and the upscale Waldorf Astoria Hotels & Resorts, Krebs reports.

Hilton Hotels investigates customer credit card security hack

FNC: Hilton Hotels announced that it is looking into a possible security breach that occurred at gift shops, restaurants, bars, and other stores located on Hilton owned properties across the U.S.

According to cyber-security expert Brian Krebs, Visa sent confidential alerts to several financial institutions warning of a security breach at various retail locations earlier this year from April 21 to July 27. While the alerts named individual card numbers that had allegedly been compromised, per Visa’s policy, the notifications did not name the breached retail location. But sources at five different banks have now determined that the hacks all had one thing in common–they occurred at Hilton property point-of-sale registers.

Currently, the breach does not appear to have comprised the guest reservation systems at the associated properties. The company released the following statement regarding the incident:

“Hilton Worldwide is strongly committed to protecting our customers’ credit card information. We have many systems in place and work with some of the top experts in the field to address data security.  Unfortunately the possibility of fraudulent credit card activity is all too common for every company in today’s marketplace.  We take any potential issue very seriously, and we are looking into this matter.”

The breach includes other Hilton brand name properties including Embassy Suites, Doubletree, Hampton Inn and Suites, and Waldorf Astoria Hotels & Resorts. The hotel group is advising customers who may have made purchases at Hilton properties during the time indicated to carefully scan bank records for any unusual activity and contact their bank immediately.

According to USA Today, evidence from the investigation indicates that the hack may have affected credit card transactions as far back as Nov. 2014 and security breaches could possibly be ongoing.

Union Corruption Runs Far and Wide

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For a listing of union members corruption, investigations and indictments, go here.

For a chilling read of an 84 page report on union corruption and how cases play into the RICO Act, go here.  There is a long history of criminal activity and it is an enterprise that still occurs and grows.

Report: Government Unions Take from the Poor to Give to the Rich

White-collar professionals dominate public sector union ranks

FreeBeacon: The government employees who now make up a majority of the nation’s union members are a far cry from the blue-collar archetype of old, according to a new report.

The Competitive Enterprise Institute will release a report on Tuesday morning documenting the changing nature of unionism in America, as white-collar professionals in the public sector overtake the private sector working class as the face of unionism.

“Public sector unions may claim they stand up for the little guy, but generally they aren’t representing blue collar workers against a better-educated, white-collar management,” said Carrie Sheffield, a scholar at the institute, in a release. “Government unions represent skilled, white-collar workers who enjoy big benefits and job security, courtesy of the taxpayer.”

Government workers are more likely to work behind a desk and enjoy civil service protections than the manufacturing workers who stood at the forefront of the labor movement at the start of the 20th century, according to the report. A majority of them have college educations.

“A larger share of public sector than private sector workers are employed in “management, professional, and related occupations.” In 2013, 56.2 percent of public sector workers and 37.8 percent of private sector workers were employed in these occupations,” the report says. “As the percentage of public sector union members increased between 1971 and 2004, the fraction of union members in the top third of the nation’s income distribution increased by 24 percent, while the proportion of unionists in the bottom third of the distribution declined by 45 percent. This is because better-educated and more affluent workers are more likely to belong to public rather than private sector unions.”

Sheffield said that these paychecks and costs have grown rapidly—retired New York City cops, the report notes, now outnumber active duty ones—in recent years and have the effect of pitting taxpayers, including the working class, against well-paid civil servants.

Pension debt and other unfunded compensation for government workers have led to several major municipal bankruptcies. Detroit, for example, declared bankruptcy when it was unable to meet nearly $20 billion in debt, about half of which was attributed to worker retirement benefits.

“Unfortunately for taxpayers, government unions donate huge amounts to elected officials who then vote on those expanding benefit packages—much to the detriment of cities like Detroit and Stockton, California, and states like Illinois and New Jersey that are on the brink of fiscal insolvency,” Sheffield said in a release.

The shift has created incentives to grow government and spur political involvement from public servants. The current system allows government unions to pump millions of dollars to candidates, who become the agents that the unions negotiate with at the bargaining table.

Sheffield recounts how early private sector union boosters were skeptical of government unions. President Franklin Delano Roosevelt, a champion of organized labor, once said that “Collective bargaining, as usually understood, cannot be transplanted into the public service.”

The institute says that lawmakers should enact reforms akin to that of Gov. Scott Walker in Wisconsin to return to the balance outlined by Roosevelt. Walker was able to become the first sitting governor to survive a recall vote by highlighting the high costs associated with union-negotiated benefits and its effect on his state’s working class. Sheffield said that lawmakers should do the same.

“Government unions are a powerful interest group that is uniquely privileged in being funded by taxpayers. Their members generally have higher levels of education than the average private sector worker, and enjoy greater compensation and job security. David taking on Goliath they are certainly not,” the report says.