Where are the War Dogs? Soldiers are Desperate

Troops betrayed as Army dumps hundreds of heroic war dogs

NYPost: By now, Daniel had been in Afghanistan two months. It was July 2012, his third tour of duty and his first with Oogie, his military working dog. They were leading their platoon on yet another patrol, clearing a no-name village with maybe 15 houses and one mosque, when they began taking fire.

“The first thing that went though my mind,” he says, “was, ‘S- -t. My dog’s gonna get shot.’ ”

It was a perfect L-shaped ambush, bullets coming from the front and the right, the platoon pinned down in a flat, open landscape. Along the road were shallow trenches, no more than 14 inches deep. Daniel grabbed ­Oogie, squeezed him in a hole, then threw himself over his dog.

Daniel with his dog, Oogie

It went against all his Army training. “They tell us it’s better for a dog to step on a bomb than a US soldier,” he says. The truth is Daniel, like just about every other dog handler in the armed forces, would rather take the hit himself.

Five weeks into their training, Daniel and Oogie were inseparable. They showered together. They went to the bathroom together. When Daniel ran on the treadmill, Oogie was on the one right next to him, running along.

That week, Daniel got Oogie’s paw print tattooed on his chest.

“The few times you safeguard your dog are slim compared to what he does every time you go outside the wire,” Daniel says. “That’s your dog. The dog saves you and saves your team. You’re walking behind this dog in known IED hot spots. In a firefight, the dog doesn’t understand.”

Bullets were coming closer now; the enemy had long ago picked up on how important the dogs were to the Americans, how successful they were at sniffing out bombs. “I know there were three separate incidents where they shot at ­Oogie,” Daniel says. And as he lay on top of his dog, he stroked him and whispered and kept him calm.

After five minutes, Daniel’s platoon pushed the enemy back and away, and the first thing Daniel did was get Oogie to shade. “He’s a black Lab, and it was very hot out,” he says. He strapped two big bags of saline to Oogie’s shoulders and hydrated him intravenously, then the two went back out to clear more villages.

“Oogie’s always ready to go,” Daniel says. “He’d hurt himself if I didn’t stop him — he has that much prey drive.”

In September 2012, Daniel and about 18 other soldiers boarded a flight back to North Carolina; their deployment was over.

Waiting on the tarmac were employees from a North Carolina-based company, K2 Solutions, which had the government contract for the dogs. Within moments of deplaning, the handlers got to pat their dogs on the head, say their goodbyes, then watch as the dogs — and all their equipment, down to their shredded leashes — were boarded on a truck and driven away.

“It’s a bunch of infantry guys, and no one wants to be the first to start crying,” Daniel says. “But it didn’t take long. There wasn’t a dry eye.”

Daniel got Oogie’s paw print tattooed on his chest

The only solace these soldiers had was the knowledge that they could apply to adopt their dogs, and that the passage of Robby’s Law in November 2000 would protect that right.

More than three years later, Daniel still doesn’t have Oogie. The dog has vanished.

Daniel, who doesn’t want to use his real name because he’s on active duty, is one of at least 200 military handlers whose dogs were secretly dumped out to civilians by K2 Solutions in February 2014, a Post investigation has found.

At least three government workers were also involved and may have taken dogs for themselves.

It’s a scandal that continues to this day, with hundreds of handlers still searching for their dogs — and the Army, the Pentagon and K2 Solutions covering up what happened, and what may still be happening.

Dumping dogs

On Feb. 10, 2014, one of many adoption events was held on the grounds of K2 Solutions in Southern Pines, NC. The Army had recently ended its TEDD (Tactical Explosive Detection Dogs) program, and word quietly got out that “bomb dogs” would be available to civilians.

Kim Scarborough, 52, a project manager at East Carolina University, was one of them. “I called my husband and said, ‘K2’s dumping dogs. Do you mind if I go?’ ”

In quiet, well-manicured Southern Pines, K2 is a glamorous company. They own huge tracts of land where they covertly train dogs for combat, counterterrorism and catastrophes that will probably never occur in North Carolina. K2’s owner, Lane Kjellsen, is a cryptic figure who claims to be ex-special forces.

The company is privately held. Their Web site advertises dogs for sale, but it’s unclear whether they’re former military working dogs. K2 has trained dogs for both the TEDD program and the Marine Corps’ IDD (Improvised Explosive Device Detector Dog) program, and each canine has about $75,000 to $100,000 worth of training.

Multiple handlers told The Post that they have called and ­e-mailed K2 repeatedly about their dogs, submitting adoption paperwork as they were instructed to do. Yet they have been given little to no information, and at times deliberate misdirection, they say. Finding military dogs isn’t hard: They all have microchips, and the TEDD dogs have serial numbers tattooed on their ears.

These handlers also say K2 trainers who were with them in Iraq and Afghanistan told them they should contact K2, or K2 would contact them, once their dogs were available for adoption.

“When I contacted K2, they were like, ‘She’s gone and adopted out,’ ” says Brian Kornse, who did three tours of duty and has PTSD. “I got in contact with them in February of 2014” — the same month K2 was holding multiple adoption events.

Kornse believes his dog, a black Lab named Fistik, was given to a former Pentagon employee, Leo Gonnering, who may still have been working for the government in 2014. A man who left a voicemail for The Post from “Leo’s phone” said Gonnering “adopted the dog from the Army two years ago. He and his family have no intention of giving the dog up to his prior handler.” He named Kornse as the likely handler and has ­renamed the dog Mystic.

“I guess I had PTSD before, but I never really noticed till I gave Fistik up,” Kornse says. “I started having nightmares. I never experienced that before. She made ­everything better for me — that’s the best way I can describe it.”

Other handlers say K2 would tell them information about their dogs was “privileged” and instruct them to call Lackland Air Force Base in Texas. Staff at Lackland, they say, would send them right back to K2.

‘I guess I had PTSD before, but I never really noticed till I gave Fistik up…She made everything better for me — that’s the best way I can describe it’

 – Brian Kornse said about giving up his dog

“I called K2 in March 2014,” says a handler who asked to remain anonymous. “I said, ‘Can you please help me find my dog?’ They said, ‘No. Call Lackland.’ ”

This handler sent The Post an e-mail exchange he had with Lackland. He asked for help, and a Sgt. Tia Jordan replied, “I’m sorry, but we don’t have any control over TEDD dog adoptions.” Under her signature is her office: the Military Working Dogs Adoptions and Dispositions Center.

“We got blown up together,” he says of his dog. “Before I was even done with training, I knew I’d try to adopt him.”

After months of obfuscation, many handlers give up, and they believe that’s what K2, and some in the Army, want. “I have PTSD and traumatic brain injury,” says Ryan Henderson, who has been searching for his dog, Satan, since 2014. “There are mornings I wake up with anxiety attacks. Dealing with normal life is more than I can handle anyway.”

Henderson says K2 told him Satan had been adopted by his second handler “and they could not give me his information due to privacy laws.”

He believes there’s a thriving black market for the dogs.

“Ninety dogs adopted out, at the same time, under suspicious circumstances?” he says. “Subcontractors are literally another layer of insulation to cover the BS.”

K2’s Web site offers a standard reply to service members looking for their dogs: “All of the dogs in the TEDD program belonged to the Army,” they state. K2 directs handlers to the Army’s Office of the Provost Marshal General.

At least one staffer from the OPMG, Robert Squires, was at K2’s adoption event on Feb. 10. Sources who were there tell The Post that Squires was overseeing it all. He also signed reams of paperwork, telling adopters that copies would be mailed to them.

Ryan Henderson with his dog, Satan

That paperwork was never sent. According to e-mails obtained by The Post, both Squires and another OPMG staffer, Richard Vargus, jointly play dumb.

“Everyone was under the impression that they tried to locate the handlers,” Scarborough says.

Meanwhile, civilians in small North Carolina towns were electrified by the idea of owning a war dog — the ultimate status symbol — and several deputized themselves as prime “bomb dog” movers.

“On Feb. 7, I got a call from my dear friend . . . who asked me to help her with a favor,” Kinston, NC, resident Jean Culbreth wrote on Facebook on Feb. 19, 2014. “The favor was to place 72 retired bomb-sniffing dogs in new homes. Well, it’s 10 days later and I am BEYOND thrilled to say that 92 dogs have been adopted! And with the 11 Ralph and I took for the Lenoir Co. SPCA, I had a part in 103 adoptions in 10 days. Man, I wish we could do this every week. To all involved: GREAT JOB.”

When reached for comment, Culbreth hung up.

‘A clusterf@#&’

When Scarborough arrived at K2’s adoption event, she was stunned. “I called my husband and said, ‘This is the biggest clusterf–k I’ve ever seen.’ We were a bunch of strangers who responded to Jean’s Facebook post.”

They had been told 140 dogs would be available, but just 30 were left. It was only 11 a.m. There were people claiming to be law enforcement who were not in uniform — and law enforcement was given first pick.

Some said they planned to contract out the dogs. One of the few officers in tiny Taylortown, population 1,012, took six dogs. Two men from Virginia, Dean Henderson and Jamie Solis, rolled up with a box truck and took 13.

“All of these dogs have PTSD,” Scarborough says. “Squires said that to me.”

None of the people who sought to adopt was vetted. None was asked what they planned to do with the dogs, or if they were capable of dealing with a dog with war wounds. None was asked whether they had small children.

“That was something that really bothered us,” says an ex-K2 employee who was there that day. He asked not to be identified. “The dog I have, it took me more than a year to calm her down. She was a TEDD. I wouldn’t let her be around children.”

He believes no civilian should ever be allowed to adopt a military working dog. “Civilians don’t understand what these dogs have been through in war,” he says.

‘That was something that really bothered us…Civilians don’t understand what these dogs have been through in war’

 – an ex-K2 employee

This employee says that during the event, he was “getting dogs out of the kennel and displaying them to people.” He knew it was wrong. “Too many civilians were getting dogs that should have gone to handlers. It wasn’t right.”

He says handlers were calling him constantly, complaining that the Army and K2 “keep losing my s- -t.” He also says K2 was in collusion with Army officials. “Squires was there and signing paperwork. He adopted two TEDD dogs. One was Fistik” — Kornse’s dog. Vargus, he says, “was the head of the program. He knew what was going on.” Vargus is also believed to have taken at least two dogs.

This employee says he kept Squires from taking at least one dog. “I talked to Squires and said, ‘I know this handler wants this dog.’ They let me take him.”

The Army confirmed to The Post that Vargus was in charge of policy of the TEDD program, but refused to comment on any involvement he, Squires or Gonnering had in these adoptions, or dogs they are alleged to have taken.

“All TEDD adoptions were performed in accordance with the law,” the Army said in a statement. “The Army will continue to carry out standard adoptions in accordance with the disposition procedures established by the law and the Department of Defense.”

Scars of war

Once Scarborough got her dog, Ben, she was directed to a room where an Army veterinarian was waiting. The dogs were getting five-minute exams — temperature, teeth checks — before being shunted off K2 grounds.

She was apparently the first civilian the doctor saw that day.

“They got to me and it stops,” she says. “The veterinarian was clearly very upset. She just stopped doing the exams.” The doctor left the room, but Scarborough and others could overhear her. Scarborough believes the veterinarian was on the phone with superiors.

“She was saying, ‘I don’t know what to do. This is not what we normally do.’ She was very disturbed, very distraught.”

After several hours, the veterinarian returned. The dogs remained muzzled the entire time. “She said she was told, ‘Let it go — proceed,’ ” Scarborough says. That doctor, Capt. Sarah T. Watkins, Branch OIC at Fort Bragg, signed Ben’s medical records.

Scarborough was given those along with her dog’s deployment records — something every handler who spoke with The Post had no idea existed. A copy obtained by The Post shows that next to each dog’s name and serial number is the name of their handler, refuting claims by the Army and K2 that tracking down a dog’s handler is too difficult.

Scarborough encountered similar stonewalling when she requested Ben’s military papers.

“There is no ‘official’ Army record since he was technically a contract dog,” Squires told Scarborough in an e-mail dated July 25, 2014, “but by regulation he is classified as a Military Working Dog.”

Scarborough realized she had no business adopting Ben.

“It wasn’t till I got home that I said, ‘Oh, my God. I’ve got a bomb dog that couldn’t make it as a patrol dog and has PTSD.” She says that on the way home from the K2 adoption event, Ben freaked out when he heard sirens.

‘I’ve offered $5,000 cash, plus a new German shepherd of their choosing, for his return. I have heard nothing’

 – Army veteran Ryan Henderson

When he hears thunder, or gunfire — Scarborough and her husband live on a farm where they allow hunting — Ben races through the house and hides under her husband’s desk, or jumps into bed with her “shaking like a leaf.”

Scarborough says she and Ben’s handler got in touch a few days ago with help from online group Justice for TEDD Handlers, run by Betsy Hampton, a civilian.

Scarborough says the handler is overwhelmed to have found Ben.

“He said to me, ‘That’s my Ben. That dog saved my life. I owe him.’ I mean, ladies from the Daughters of the American Revolution have these dogs,” she says. “If the handler wants Ben, it belongs to him. Period, the end.”

Handlers don’t typically get that response. Many who have found their dogs over social media are rebuffed. More than one has been told their dog ran away, or was hit by a car.

Army veteran Ryan Henderson has tracked his dog, Satan, to a family in Chocowinity, NC.

“I’ve offered $5,000 cash, plus a new German shepherd of their choosing, for his return,” Henderson says. “I have heard nothing. They refuse to contact me.”

Ryan Henderson with his dog, Satan, whom he has been trying to get back since 2014.

Every handler The Post spoke with stressed this point: The dogs are not just dogs, or “equipment,” as the Army designates them. They are battle-scarred veterans who have saved lives.

‘Destroy the dogs’

The 13 dogs Dean Henderson and Jamie Solis took from K2 were, in fact, treated like outdated equipment. On the night of Feb. 10, 2014, the two men drove up to Currituck Kennels at Mt. Hope in Va., the dogs sliding around the back of their truck the whole way.

“Half of the dogs were on human Prozac and Xanax,” kennel master Greg Meredith tells The Post. “They were emaciated. They all had PTSD. One had an injury to his tail from shrapnel.”

The men told Meredith they were ex-Secret Service, had just bought the dogs for $30,000 each, and had a contract to sell them to the Panamanian government for twice that amount.

The paperwork given out at K2 that day included a document stating the adopter could not give a dog away, sell it, or profit from it. “If they lied to K2 and were planning to sell, they’d be in serious amounts of s- -t,” says the ex-K2 employee. “That’s illegal. And if K2 knew about that, that’s even more illegal.”

Seventeen months went by. Meredith had spent nearly $150,000 of his own money caring for the dogs and was broke. He pressed Henderson for help.

“Destroy the dogs” was the reply.

Meredith called K2, who sent him to Vargus. He provided The Post with e-mails between himself, Vargus and Squires.

In a phone call, “Vargus tells me they couldn’t determine who had ownership at that point — the contractors or DoD,” Meredith says. Vargus’ office is at the Pentagon, which houses the Department of Defense.

“He told me he was there when Dean and Jamie picked them up,” Meredith says. “He knows them. They’re known to him. I said, ‘I’ve been told these dogs can’t be re-purposed or resold, but Dean and Jamie told me they paid $30K a piece for these dogs.’ I said, ‘There’s a coverup going on here.’ ”

Henderson and Solis did not return calls for comment.

‘My best friend’

The handlers, understandably, trust no one. Adam Wopat served for five years and did two tours . He spent a year in combat with his dog, Heijn, in Kandahar.

On May 30, 2012, while sweeping a compound with the 4th Infantry Division, an IED went off. One soldier lost a leg. Another was medevaced out. Wopat was knocked back and unconscious, and Heijn was blown way behind him.

Adam Wopat with his dog, Heijn

“Once I got up and came to my senses, I realized, ‘Oh, I still have a dog,’ because he had already returned to me and was laying down next to me.”

Wopat is crying now. “After we hit our one-month mark of training — it’s like when a son calls you ‘Daddy,’ ” he says.

Last year, Wopat was contacted by a man named John Moreno, who said he founded an organization called Operation Releash in May 2015 to reunite veterans with their dogs.

“He told me US Capitol Police had him. He told me they were going to fly us up on Veterans Day, and to wear a suit and tie,” Wopat recalls. Moreno said they were going to retire Heijn and re-home him with Wopat.

“On Oct. 19th, the day he told me to call him on his new cellphone, he ceases contact with me,” Wopat says.

Moreno is ex-K2. He most recently worked as executive director of the Worcester County Humane Society in Maryland, a position he left after six weeks. “He was not caring for the dogs,” a former colleague tells The Post.

Moreno confirms Wopat’s version of events. Asked why he disappeared, Moreno told The Post: “A lot of stuff was going on at the time. I wanted to be left alone.”

Former Marine Nick Beckham says he knows where his IDD dog, Lucky, is: Living with K2 CEO Lane Kjellsen in North Carolina. Beckham says he was tipped off by a K2 employee.

“K2 told me I had the right to adopt if I was the first handler and the dogs were retired,” Beckham says. “I called K2 and asked for paperwork. I filled it out and mailed it in and I never heard back. I e-mailed again — they never responded.”

Reached Wednesday, Kjellsen admitted many adoption events had taken place at K2. “Hundreds of dogs were adopted out,” he said. “Let me take that back. Not hundreds, but more than 100.”

K2 CEO Lane Kjellsen (left) adopted former Marine Nick Beckham’s dog, Lucky

He went on to claim that “K2 had nothing to do with adopting those dogs.”

Asked if he had an IDD dog named Lucky, he said, “Lucky? Is that true? Um . . . I don’t know. I do have a dog named Lucky.”

He then admitted he had sold Lucky to the Marine Corps, and once retired, “the Marine Corps repeatedly reached out to the handler and had no luck. I properly adopted Lucky through normal channels. K2 didn’t handle any adoption paperwork.”

Kjellsen then suggested the Army was to blame for all the war dogs who have been wrongly and secretly re-homed, but he refused to give The Post specifics.

“I would say, ‘Get an official investigation and let me talk,’ ” Kjellsen says. “I’d tell them what the Army did. I can’t [tell you]. I need to be subpoenaed.”

Beckham is disconsolate to this day. “Lucky was my first and only dog,” he says. “He was my best friend.”

Cuban Migrants Flood the SW Border

2015: At Least 44,000 Cubans Entered US Through Texas and Southern Border This Year, Number on the Rise – Report

The number of Cubans attempting to come to the Unites States via Texas has increased this year, thanks in large part to the thaw in political tensions between the U.S. and Cuba.

 

After President Obama and Cuban leader Raul Castro announced their plans to normalize relations between the two nations, many Cubans feared that the special migrant status they have enjoyed for over 50 years would come to an end. The current “wet foot, dry foot policy” allows anyone who has fled Cuba and entered the U.S. the ability to pursue residency and work in the country.

The Los Angles Times reports that at least 44,000 Cubans have reached the southern U.S. border during the fiscal year which ended in September. This figure is more than twice as many of the 17,466 Cubans who came through the southern border the year before. Full article here.

Tension Simmers as Cubans Breeze Across U.S. Border

LAREDO, Tex. — They are crossing the border here by the hundreds each day, approved to enter the United States in a matter of hours. Part of a fast-rising influx of Cubans, they walk out to a Laredo street and are greeted by volunteers from Cubanos en Libertad, or Cubans in Freedom, who help them arrange travel to their American destination — often Miami — and start applying for work permits and federal benefits like food stamps and Medicaid, available by law to Cubans immediately after their arrival.

The friendly reception given the Cubans, an artifact of hostile relations with the Castro government, is a stark contrast with the treatment of Central American families fleeing violence in their countries. And it is creating tensions in this predominantly Mexican-American city, where residents saw how Central American migrants, who came in an influx in 2014, were detained by the Border Patrol and ordered to appear in immigration courts.

“The people here are starting to feel resentment,” said Representative Henry Cuellar, Democrat of Texas, whose congressional district includes the city. “They are asking, is it fair that the Cubans get to stay and the Central Americans are being deported?”

The disparity will be in sharp relief next week when Pope Francis comes to the border at El Paso to offer prayers for the many migrants who have faced danger or arrest trying to cross the United States border.

Town officials have warned Cubans not to loiter in the streets. Local bus companies complain that Cubans are chartering special vans to travel. Some residents here have also begun to speak up.

A group of veterans from Afghanistan and Iraq held two protests by the border bridge in recent weeks, saying the federal government was spending money on Cubans when it was not meeting the needs of people here.

“We make everyone from Central America wait in line, while the Cubans walk in even though they are not refugees,” said Gabriel Lopez, a Mexican-American Navy veteran who is president of the group of veterans. “We are saying, don’t open the borders to Cubans and give them instant benefits while we have American veterans living on the streets.”

In coming weeks the number of Cubans is expected to spike, as more than 5,000 who have been stalled in Costa Rica since late last year will leave there on regular plane flights agreed to by governments in Central America and Mexico. Already about 12,100 Cubans entered through Laredo and other Texas border stations in the last three months of 2015, according to official figures. Border officials say as many as 48,000 Cubans could cross here this year, more than all those who came in the last two years combined.

Under the Cuban Adjustment Act, a law Congress passed in 1966 in the early years of enmity with Fidel Castro, any Cuban who sets foot on American soil is given permission to enter, known as parole. Cubans are also eligible for federal welfare benefits including financial assistance for nine months under separate policies from the 1980s. After a year, they can apply for permanent residency, a gateway to citizenship.

The recent exodus from Cuba began in mid-2014, even before President Obama in December of that year announced a restoration of diplomatic relations with the government, now led by Mr. Castro’s brother Raúl. In a major change, President Raúl Castro allowed Cubans to leave the country without exit visas. Many Cubans have said that rumors that the special entry to the United States would be canceled had caused them to pack up and go.

“The rumors are unfounded,” Alan Bersin, assistant secretary of Homeland Security, said in an interview, seeking to dispel the fears. “The Cuban Adjustment Act is still in effect and is part of the overall immigration policy and there is no intent presently to change that.”

Mr. Cuellar has called for the act to be repealed, but he acknowledges there is little prospect that Congress will act this year.

The recent influx is nothing like the chaotic rush of Cubans fleeing the Communist government that overwhelmed South Florida with the Mariel boatlift in 1980, and the rafter crisis in 1994. The federal border authorities, who have been watching the number of Cubans growing steadily, added officers and opened extra rooms in the border station, doubling their capacity to process them. Most Cubans move through in less than an hour, officials said.

Frank Longoria, assistant director of field operations for United States Customs and Border Protection, said that despite their numbers, the Cubans’ entry has not affected the huge flows of people and freight trucks each day through Laredo, the country’s largest land port of entry.

At the border, Cubans are fingerprinted and pass through routine criminal and terrorism background checks. There is no special vetting for Cubans, and there are no medical examinations or vaccination requirements.

“Right now I feel like the freest Cuban in the whole world,” said Rodny Nápoles, 39, a coach of the Cuban national women’s water polo team who crossed into Laredo this week.

This week, the first direct flights from northern Costa Rica to the Mexican city just across the border brought more than 300 Cubans, including at least 41 pregnant women and their families.

One of them, Yadelys Rodríguez Martín, 28, who was 19 weeks pregnant, sat down to rest and enjoy a moment of relief on the front steps of Cubanos en Libertad, right after emerging from the border station. After traveling through Ecuador and being stuck for three months in Costa Rica because of a political dispute in the region, she said she was stunned by how quickly she had been admitted into the United States.

“We are not used to things happening so fast,” Ms. Rodríguez said.  More here.

The Constitutional Jurist, Scalia has Been Called Home

A man who understood every word of the U.S. Constitution and applied them in their original context. The law does not follow the mood or attitude of the country, rather the country must follow the mood and the attitude of the Constitution.

Two Texas news sources, confirmed by CBS and Fox News, report the sad news that Supreme Court Associate Justice Antonin Scalia is dead:

Scalia, 79, was a guest at the Cibolo Creek Ranch, a resort in the Big Bend region south of Marfa.

According to a report, Scalia arrived at the ranch on Friday and attended a private party with about 40 people. When he did not appear for breakfast, a person associated with the ranch went to his room and found a body.

Chief U.S. District Judge Orlando Garcia, of the Western Judicial District of Texas, was notified about the death from the U.S. Marshals Service.

U.S. District Judge Fred Biery said he was among those notified about Scalia’s death…

Texas Gov. Greg Abbott released a statement Saturday afternoon, calling Scalia a man of God, a patriot and an “unwavering defender of the written Constitution.”

“He was the solid rock who turned away so many attempts to depart from and distort the Constitution,” Abbott said. “We mourn his passing, and we pray that his successor on the Supreme Court will take his place as a champion for the written Constitution and the Rule of Law. Cecilia and I extend our deepest condolences to his family, and we will keep them in our thoughts and prayers.”

Scalia was nominated to the U.S. Supreme Court in 1986 by President Ronald Reagan.

Here is an interview our own Peter Robinson did with Justice Scalia about three years ago:

NationalLawJournal: U.S Supreme Court Justice Antonin Scalia, the intellectual leader of the court’s conservative wing, is dead at age 79. According to official reports from Texas, he died overnight at a ranch in west Texas where he had gone quail hunting.

His sudden death came as he was about to mark his thirtieth year on the court; he is the longest-serving current member. Appointed by President Ronald Reagan, Scalia is the father of nine and a former law professor.

Scalia’s death sets up a major battle over his successor. Because of Scalia’s pivotal role on the court’s right wing, Republicans could block almost any nominee put forward by President Barack Obama. Scalia once said he would never retired during the tenure of any president whose nominee would try to dismantle his jurisprudence.

Chief Justice John G. Roberts Jr. issued a statement Saturday afternoon: “On behalf of the Court and retired Justices, I am saddened to report that our colleague Justice Antonin Scalia has passed away. He was an extraordinary individual and jurist, admired and treasured by his colleagues. His passing is a great loss to the Court and the country he so loyally served. We extend our deepest condolences to his wife Maureen and his family.

Scalia was perhaps the court’s most bombastic and colorfulmember, with caustic dissents in some of the court’s most landmark decisions.

In the 2013 United States v. Windsor case, he dismissed the majority’s rationale for striking down the Defense of Marriage Act as “legal argle-bargle.” But his dissent proved prescient, forecasting the series of rulings that struck down state bans on same-sex marriage. “It is just a matter of listening and waiting for the other shoe,” Scalia wrote in his dissent.

Asked frequently about Bush v. Gore, the 2000 ruling that resolved the 2000 presidential election, Scalia would just say, “Get over it.”

Read more: http://www.nationallawjournal.com/id=1202749702587/Justice-Antonin-Scalia-Leader-of-Courts-Conservative-Wing-Dies-at-79#ixzz405lGu8O6

 

Pay Your Bills Years in Advance, Negative Interest Rate

Primer: 

The Federal Reserve System‍—‌also known as the Federal Reserve or simply as the Fed‍—‌is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded, and its structure has evolved. Events such as the Great Depression in the 1930s were major factors leading to changes in the system.[10]

The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and as of 2009 also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and releases numerous publications, such as the Beige Book.

Negative 0.5% Interest Rate: Why People Are Paying to Save

When you lend somebody money, they usually have to pay you for the privilege.

NYT’s: That has been a bedrock assumption across centuries of financial history. But it is an assumption that is increasingly being tossed aside by some of the world’s central banks and bond markets.

A decade ago, negative interest rates were a theoretical curiosity that economists would discuss almost as a parlor game. Two years ago, it began showing up as an unconventional step that a few small countries considered. Now, it is the stated policy of some of the most powerful global central banks, including the European Central Bank and the Bank of Japan.

On Thursday, Sweden’s central bank lowered its bank lending rate to a negative 0.5 percent from a negative 0.35 percent, and said it could cut further still; European bank stocks were hammered partly because investors feared what negative rates could do to bank profits. The Federal Reserve chairwoman, Janet Yellen, acknowledged in congressional testimony Wednesday and Thursday that the American central bank was taking a look at the strategy, though she emphasized no such move was envisioned.

But as negative rates — in which depositors pay to hold money in bank accounts — become a more common fixture, there are many unknowns about what these policies mean for finance, for the economy and even for the definition of money.

These are some of the key questions, and, where we have them, the answers.

So how do negative interest rates work?

It depends. In the cases of interest rate targets set by central banks like the E.C.B. and Swedish Riksbank, they set a negative target rate for banks, and banks in turn pass it along to their customers. The E.C.B., for example, currently has a negative 0.3 percent rate, meaning that when banks deposit money at the central bank overnight, they pay for the privilege.

Banks have different ways of passing the negative rates on to depositors, often framed as fees for keeping money in an account, which is basically negative interest rates by another name.

Bond markets reflect these negative rates, too, including for longer-term government debt. For example, if you bought a two-year Swiss government bond on Thursday, you would have needed to pay a price that resulted in a yield of negative 1.12 percent. Even 10-year Swiss bonds have a negative rate, a sign markets expect below-zero rates to persist in Switzerland for many years to come.

Generally companies that borrow money are viewed as riskier than governments, so they have to pay higher interest rates. Therefore negative-rate corporate debt is still rare. But it has happened, including with corporate bonds issued by the Swiss food giant Nestle.

But don’t people just withdraw cash rather than pay to deposit it at their bank or buy a government bond that will give them back less than they paid?

You’d think, right? This was exactly why economists had long thought that negative interest rates were impossible. It helps explain why central banks first turned to other tools, including quantitative easing, when they saw a need to ease monetary policy despite interest rates that were already near zero.

But it looks as if the convenience of keeping money in a bank account is worth a small negative interest rate or fees for most consumers and businesses, at least at the only slightly negative rates currently in place. Storing and providing security for cash may be more expensive than a small bank charge.

When initial experiments in Switzerland and Sweden didn’t result in mass withdrawals from the banking system, larger central banks in need of easier money moved gingerly in the same direction. They’ll stop when either their economies start to grow or they see more concrete evidence that negative rates are doing more harm than good.

How is this supposed to help the economy?

Pretty much the same way it always is supposed to help the economy when a central bank cuts rates. Lower rates encourage business investment and consumer spending; increase the value of the stock market and other risky assets; lower the value of a country’s currency, making exporters more competitive; and create expectations of higher future inflation, which can induce people to spend now.

We have decades of experience with central banks trying to manage the economy by, for example, cutting bank rates to 2 percent from 3 percent when there is an economic downturn. The shift to negative rate policies is, hypothetically at least, the same, but with a starting point of rates already around zero.

So does it work?

It’s hard to say with any certainty yet. At a minimum, it seems to have an effect of lowering the value of a currency, which makes export industries very happy. It’s less clear whether it can help create sustained economic growth, particularly when the hard-to-calculate downsides are factored in.

What are those downsides?

The global financial system is built on an assumption of above-zero interest rates. Going below zero could cause damage to the very architecture by which money and credit zoom through the economy, and in turn inhibit growth.

Banks could cease to be viable businesses, eliminating a key way that money is channeled from savers to productive investments. Money market mutual funds, widely used in the United States, could well cease to exist. Insurance companies and pension funds could face their own major strains.

In a speech last year, Hervé Hannoun, then the deputy general manager of the Bank for International Settlements, even argued that this could “over time encourage the use of alternative virtual currencies, undermining the foundations of the financial system as we know it today.”

Is the Federal Reserve going to do this in the United States?

Janet Yellen doesn’t think so. But in two days of congressional testimony this week, she also didn’t rule it out.

For one thing, the United States economy, and particularly its labor market, looks to be in stronger shape than that of many others around the world. So the Fed expects to be in interest-rate raising mode this year (though exactly how fast is very much in question). But even if the economy does take a turn for the worse, there’s no certainty that negative rates are the path the Fed would take.

There is a question of whether that would even be legal. It’s not clear if the language of the Federal Reserve Act allows negative bank rates (J.P. Koning, a financial commentator, runs through the legal issues here). Ms. Yellen said in testimony this week that the legality of negative rates “remains a question that we still would need to investigate more thoroughly.”

She also said that “it isn’t just a question of legal authority.”

“It’s also a question of could the plumbing of the payment system in the United States handle it?” she said. “Is our institutional structure of our money markets compatible with it? We’ve not determined that.”

Financial markets do not now price in meaningful odds of negative rates in the United States. Want one modest clue that negative rates can’t be ruled out, though? In its annual stress test of major banks, the Fed asked the firms to figure out what would happen to their finances in a “severely adverse” scenario that included a sharp rise in unemployment and a rate of negative 0.5 percent rate on short-term Treasury bills — in other words, what you’d expect to see if there were a recession and the Fed cut rates well below zero.

Ms. Yellen noted that the rates on Treasury bills could go negative even in the absence of a policy shift by the Fed, as has happened a few times in the past.

So what are some of the weird things that could happen in a world in which negative rates become routine?

The policies in Europe and Japan are still relatively new and involve rates only slightly below zero. But if the policies become long-lasting, or negative rates go much lower, there are a lot of mind-bending ways it could affect routine transactions.

For example, would people start prepaying years’ worth of cable bills to avoid having money tied up in a money-losing bank account? How about property taxes? Would companies and governments put in place new policies prohibiting people from paying their bills too early?

Or consider this: Many commercial transactions now take place with some short-term credit attached — for example, a company that gets a 60-day grace period to pay bills from its suppliers. Would that flip, and suddenly suppliers would prohibit upfront payment and insist that their customers wait 60 days to pay?

Might new businesses sprout up that allow people to securely store thousands of dollars in bundles of $100 bills, or could people buy physical objects as stores of value that the banks can’t charge a negative interest rate on?

“Negative interest rates in Japan is blowing my mind,” said Jose Canseco, the provocative retired baseball player not normally known for his economic musings, on Twitter. And the truth is, he’s not the only one.

Facts: Mexico to U.S. Immigration

Unaccompanied Alien Children Charged in Execution-Style Murder, Media Calls Them “Baby-Faced Boys”

It appears that the recent execution-style murder of a Massachusetts man was committed by two Central American teens that came to the U.S. as Unaccompanied Alien Children (UAC) under President Obama’s open border free-for-all. Tens of thousands of illegal immigrant minors—mostly from El Salvador, Guatemala and Honduras—have entered the country through the Mexican border since the influx began in the summer of 2014 and the administration has relocated them nationwide.

News reports indicate that the 17-year-olds charged in the gruesome Massachusetts killing entered the U.S. recently as UAC’s and both have ties to MS-13, according to authorities cited by various outlets. They lived in Everett and one of the teens, Cristian Nunez-Flores, moved to Massachusetts from his native El Salvador a year and a half ago which is when the influx of Central American minors began. His parents remain in El Salvador, according to a local news article. The other gangbanger’s name is Jose Vasquez Ardon and he too is a recent arrival from Central America. Prosecutors say the teens, described in a local news article as “baby-faced boys,”shot a 19-year-old in the head. Both are being held without bail for obvious reasons. A must read summary here.

*** Meanwhile***

5 facts about Mexico and immigration to the U.S.

PewResearch: Pope Francis is expected to make immigration a major theme of his visit to Mexico. By traveling northward across Mexico, he intends to symbolically retrace the journey of Mexican and Central American migrants traveling to the United States. After the pope leaves Mexico City, his route will begin in the southern state of Chiapas, which shares a long border with Guatemala, and end in Ciudad Juárez, located across the U.S.-Mexico border from El Paso, Texas, a longtime entry point to the U.S.

U.S. immigration from Latin America has shifted over the past two decades. From 1965 to 2015, more than 16 million Mexicans migrated to the U.S. in one of the largest mass migrations in modern history. But over the past decade, Mexican migration to the U.S. has slowed dramatically. Today, Mexico increasingly serves as a land bridge for Central American immigrants traveling to the U.S.

Here are five facts about Mexico and trends in immigration to the U.S.

1Mexico increases deportations of Central AmericansMexico is stopping more unauthorized Central American immigrants at its southern border. The Mexican government said in 2014 that it would increase enforcement at its southern border in response to an increased flow of Central Americans traveling through Mexico to reach the U.S. In 2015, the government there carried out about 150,000 deportations of unauthorized immigrants from El Salvador, Guatemala and Honduras, a 44% jump over the previous year. These three Central American countries alone accounted for nearly all (97%) of Mexico’s deportations in 2015.

2Despite increased enforcement by Mexico, many unauthorized Central Americans are still reaching the U.S. via Mexico. At the U.S.-Mexico border, the number of families and unaccompanied children apprehended by U.S. Customs and Border Protection officials is again rising, though it’s too early to tell how 2016 will compare with prior years. From Oct. 1, 2015, to Jan. 31, 2016, 24,616 families and 20,455 unaccompanied children – the vast majority of them from Central America – were apprehended at the southwestern U.S. border, double the total from the same time period the year before. Apprehensions of unaccompanied children rose to record levels in fiscal 2014, then decreased by 42% in fiscal 2015.

3More Cubans are also traveling through Mexico to reach the U.S. The number of Cubans migrating through Mexico to reach the U.S. spiked dramatically last year after President Barack Obama said the U.S. would renew ties with the island nation. In fiscal 2015, 43,159 Cubans entered the U.S. via ports of entry, a 78% increase over the previous year. Two-thirds of these Cubans arrived through the U.S. Border Patrol’s Laredo Sector in Texas. (Cubans who pass an inspection can enter the U.S. legally under the Cuban Adjustment Act of 1966.)

4Fewer Mexicans are migrating to the U.S. today than in the past. In fact, more Mexicans left than came to the U.S since the end of the Great Recession. Between 2009 and 2014, 870,000 Mexican nationals left Mexico to come to the U.S., down from the 2.9 million who left Mexico for the U.S. between 1995 and 2000. Of those moving back to Mexico, many cite family as the reason for their return. About 1 million Mexican immigrants and their U.S.-born children moved from the U.S. to Mexico between 2009 and 2014, and 61% said they had done so to reunite with family or to start a family, according to the 2014 Mexican National Survey of Demographic Dynamics.

5More Mexicans now say life is about the same in the U.S. and Mexico. In 2015, 33% of Mexican adults said life in the U.S. is neither better nor worse than life in Mexico, up from 23% who said this in 2007. Still, about half of Mexican adults believe life is better in the U.S. and 35% of Mexicans said they would move to the U.S. if they had the opportunity and means to do so, similar shares as in 2009.