Think Again: What’s Wrong with this Mainstream Media Picture?

By Eric Alterman

Republicans earlier this week succeeded in their effort to filibuster the Disclose Act, which would have required corporations and unions that produced political campaign ads to disclose their involvement. The bill passed easily in the House of Representatives, but progressives in the Senate could muster only 57 members. The 40 Republican senators who represent barely a third of the nation's population managed to defeat a bill supported by a clear majority in both houses.

Reading about the vote in the mainstream media, one could easily be forgiven not only for failing to understand this fundamental fact—that the will of an overwhelming majority of Americans was thwarted by an intransigent minority eager to see anonymous corporate campaign ads bolster their party's political fortunes later this year—but also for why the vote mattered to anyone but partisan politicians.

According to The Hill's headline , for instance, the Disclose Act should be seen "as balm to soothe left." The body of the article explains that "Democratic leaders hope to rally their rank-and-file troops this week by dealing with controversial campaign finance legislation just before lawmakers hit the campaign trail," then adds: "Liberal voters, who have grumbled over a litany of failures and legislative compromises that have hurt the left's agenda, will be crucial to Democratic hopes in November."

Similarly, the coverage in The Washington Post and Politico harped on the partisan political angles over the consequences of the vote to our democratic institutions. In this respect they reflected virtually the same spin offered by the extremist right-wing editorial pages of The Wall Street Journal , which complain of "a blatantly partisan bill sponsored by two Members whose main duty is electing Democrats."

In fact, the aim of the legislation was merely to help voters identify who was funding which candidates (and therefore to whom they might be beholden after Election Day), thereby, at the very least, increasing the transparency in the system. The bill was albeit already so compromised that the National Rifle Association, among Washington's nastiest lobbies, had already gotten itself exempted in exchange for its willingness to let the bill pass. Still, this issue used to be at least a partially bipartisan cause.

Indeed, its most prominent champion for decades was Sen. John McCain (R-AZ). And yet, as Mike Tomasky points out in The Guardian, "The act in question in yesterday's vote attempted to preserve and strengthen some McCain-Feingold disclosure requirements. And so we have the sight of John McCain voting to kill a bill intended to uphold the greatest legislative legacy of John McCain."

Campaign finance disclosure is not just a political tit-for-tat that the mainstream press should cover as base political maneuverings. The result of Congress's failure Tuesday to curb the excesses invited by the 5-4 Supreme Court's decision in Citizens United —as pristine an example of "judicial activism" as anyone is likely to find in American history—invites corporations working through the U.S. Chamber of Commerce to hide their involvement in defeating candidates they don't like.

Here's how it works. The Chamber of Commerce procures advertisements that target candidates without revealing who is paying for the ads. It is unknown how much corporations pay for this privilege, but one can assume the chamber's coffers are not going unfilled as a result.

Indeed, immediately following the Citizens United ruling, which blocked a ban on corporate campaign spending, the Chamber spent at least $1 million on attack ads in the Massachusetts Senate race on behalf of then candidate and now Sen. Scott Brown (R-MA). And back in April the far-right Heritage Foundation announced the formation of "Heritage Action" on The Wall Street Journal editorial page to enable its corporate contributors to apply what it calls "political heat" to those representatives who fail to toe its line. The op-ed's title, "New Fangs for the Conservative Beast."

Of course, much of corporate money that goes into these campaigns is spent specifically for the purposes of disinformation and character assassination—and is occasionally turned on conservatives by other conservatives who deem the first conservatives to be insufficiently pure.

When Sen. Lindsey Graham (R-SC) briefly joined in support of Senate climate legislation—since withdrawn—he was met with a barrage of advertisements back home, including one that asked,
"Why would Sen. Lindsey Graham support new energy taxes—called cap and trade—that will further harm our economy and kill millions of American jobs" at a moment when economic conditions have "pushed local businesses to the brink?"

Analyses of databases coding Supreme Court decisions and justices' votes, including one that goes back more than 80 years, demonstrate that the current blinkered view of the Chief Justice John Roberts Supreme Court is the most right-wing and ideologically focused Supreme Court in just about any of our lifetimes. Its hyper-partisan view of the constitutionally untouchable nature of corporate "speech" and therefore corporate money mucking up our elections, is one frequently found in the media. But it is hardly the only view, even on the bench.

Case in point: The U.S. Court of Appeals for the Second Circuit issued a decision upholding the majority of Connecticut's recently enacted campaign finance reform system, including its groundbreaking public financing system, against a sweeping constitutional challenge.

The upshot: You'd never know it from the media coverage but what is at stake in these decisions is less the makeup of our legislatures and more the character of our democracy. It would be nice if reporters covering the issue were willing at least to acknowledge that before going back to their tit-for-tat, "he said, she said" focus on who won and who lost in the game the rest of us consider to be our democracy.

Eric Alterman is a Senior Fellow at the Center for American Progress and a Distinguished Professor of English at Brooklyn College. He is also a Nation columnist and a professor of journalism at the CUNY Graduate School of Journalism. His most recent book is, Why We're Liberals: A Handbook for Restoring America's Most Important Ideals . His "Altercation" blog appears sporadically here and he is a regular contributor to The Daily Beast.

This article was published by the Center for American Progress.

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House Republicans Block Bill To Pay The Healthcare For Ill 9/11 Responders

More common to the Senate, GOP obstruction spread to the House Thursday as Republicans blocked legislation to pay to care for those who have fallen ill due to their exposure to debris during the clean-up after the nation's worst terrorist attack.

The House voted 255 to 159 for H.R. 847, the James Zadroga 9/11 Health and Compensation Act, short of the two-thirds margin needed for passage for this bill. Some 155 Republicans voted against the legislation, which would provide medical monitoring and treatment to World Trade Center responders and survivors who were exposed to the toxins at Ground Zero following the attacks of Sept. 11, 2001.

Nearly 16,000 responders and 2,700 others are currently sick and receiving treatment, according to estimates released by the lawmakers who introduced the measure. More than 40,000 responders are in medical monitoring and 71,000 individuals are enrolled in a World Trade Center health registry.

While the majority of these people live in the New York/New Jersey area, at least 10,000 of those who are sick or being monitored for signs of illness today reside in areas throughout the United States. In fact, citizens in all but four congressional districts across the country could be affected by toxins from the Sept. 11, 2001, attacks, which were masterminded by the al-Qaeda terrorist organization.

Numerous studies have documented the health effects of the World Trade Center attacks, which include lower and upper respiratory, gastrointestinal, and mental health conditions. These illnesses have caused major financial strains on many of those exposed, who are subsequently no longer able to work and face the high price of health care without a federally-funded national program to incur the costs, the lawmakers behind the bill say.

In remarks supporting the bill leading up to the failed vote, House Speaker Nancy Pelosi called debate involving the attacks that felled the twin towers "sacred ground."

"It is a place where there should be no disagreement as to our obligation to those who helped dig out and try to help clean up and recover at the scene of 9/11, at Ground Zero," Pelosi says. "When 9/11 occurred, I don't think there would have been question in anyone's mind that responding to it in this particular way was an emergency. It was an emergency. If there were ever an emergency in our country, responding to 9/11 was one. And so the objection that our colleagues make about paying for this, maybe we shouldn't pay for it, but we are. It is an emergency, it should under emergency spending and investment."

Pelosi called out as bogus the Republican objections that the 9/11 bill would add to the federal budget deficit. The legislation, she says, contains a "pay-for" that would crack down on tax evaders.

"On September 11, 2001, America stood in shock at the tragedy that unfolded at Ground Zero," Pelosi says. "In the days that followed, we stood inspired by the thousands of firefighters, rescue workers, first responders, medical personnel, construction workers, who all traveled to the scene of the attack to help New Yorkers clean up and recover. Many spent days, weeks, or months doing the hard work our government asked them to do in the recovery effort.

"Bound together by tragedy, their acts made them heroes. Their commitment reflected our unity as a people and as a nation," she adds. "Their courage gave us hope that we would emerge from these dark days stronger and more resilient than ever. The whole country watched; the whole world watched, frustrated in our own inability to be at the scene and to be helpful, grateful to those who were so brave, so courageous, to make that sacrifice in a place that was uncertain in terms of its health aspects."

The Zadroga legislation would pay a debt to those responders, Pelosi says.

"This is not a time for any partisanship. This legislation is the least we can do to offer our gratitude and support to those heroes, those individuals who never asked for any recognition or accolades, who simply want the opportunity to live, to live out their lives with health and happiness," the California Democrat says. "And Americans will have a hard time understanding how any leader in Congress could oppose this critical assistance. Let's find a way to help these people, not let's look for ways not to help. We must uphold our pledge to help every one of them. We must not desert them. We must join together as Democrats and Republicans to provide this critical assistance."

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The Sincerest Form of Flattery: GOP Proposes Spill Solutions They Once Filibustered

Senate Republicans are offering a number of proposals in response to the monster Gulf Coast oil spill -- including solutions that they filibustered when Democrats first introduced them.

The GOP energy plan is in response to a Democratic energy bill rolled out this week by Senate Majority Leader Harry Reid (D-Nev.) designed to hold BP accountable for the damage caused by the massive oil disaster resulting from the April 20 explosion on the Deepwater Horizon drilling platform.

That disaster led to the fouling of a wide swath of the Gulf of Mexico, and became the worst catastrophe of its kind in U.S. history.

Senate Democrats subsequently introduced several measures designed to address the crisis, including separate pieces of legislation that would raise 20-year-old liability caps on the damages BP would have to pay, and would grant subpoena power to a White House commission charged with investigating the spill.

Although Republicans unanimously blocked both bills, both proposals are now part of the GOP plan, according to remarks delivered Wednesday on the Senate floor by Republican Leader Mitch McConnell of Kentucky.

In his speech, McConnell charges that "Democrats are doing their best to keep us from passing a serious energy bill before the August recess," before he outlines GOP proposals that include those provisions Republicans previously filibustered.

“Our energy bill would give the President the ability to raise the liability caps on economic damages done by companies like BP — without driving small independent oil producers out of business,” McConnell says.

Republicans also would create "a true bipartisan commission — with subpoena power — to investigate the oil spill, rather than the President’s anti-drilling commission,” McConnell contends.

The commission created by President Obama is bipartisan, however, as it is co-chaired by a former Democratic senator from Florida and a Republican ex-administrator of the Environmental Protection Agency.

The GOP plan also would rescind the temporary drilling moratorium put forward by the Obama administration to halt further deepwater drilling until the causes of the BP disaster are known and rectified. Industry has howled loudly in opposition to that moratorium. The drilling industry and their allies on Capitol Hill argue the moratorium will cost too many jobs.

“So we’ve got our own ideas. We’ve got some of their ideas,” McConnell says of the GOP oil plan. “Our bill doesn’t kill jobs. It doesn’t put a moratorium on production. We’re not interested in yet another debate about a Democrat bill in which the prerequisite is killing more jobs.

“Our bill would address this crisis at hand. Their bill would use the crisis to stifle business and kill jobs in a region that’s in desperate need of jobs. It was my hope that we could have a real debate about energy. Clearly, the Majority isn’t interested in that debate.”

A spokesman for Reid says McConnell's plan amounts to a bailout for BP's benefit.

“You would have to be incredibly out of touch to think we should bail out BP for the disaster they caused in the Gulf, yet that is exactly what Senate Republicans are proposing. Besides the fact that the Republican plan does nothing to create jobs, their proposal would essentially trust BP to pay back the millions of Americans whose livelihoods they’ve ruined," Jim Manley says, referring to the commercial fishermen and others whose jobs are in jeopardy due to the spill.

“This defies common sense. These hard-working people just had the rug pulled out from under them, and Democrats believe they should not be forced to fight BP’s army of corporate lawyers for years to come just to get the compensation they deserve,” Manley adds.

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After Vote, Speaker Tells GOP: Stop Playing Politics With Border Security

The House Wednesday approved a standalone border-security spending bill in an attempt to overcome obstruction to an earlier attempt by Senate Republicans on a day when the issue of immigration was heating up.

Lawmakers approved legislation authored by Rep. David Price (D-N.C.) which would fund 1,700 new Customs and Border Patrol agents and officers to go to the Southwest U.S. border to address ongoing threats from Mexican drug cartels and improve operations at U.S. ports of entry.

Total funding in the bill is $701 million, with $201 million of that total offset by cuts elsewhere in the Department of Homeland Security and Justice Department budgets, according to a statement from Price's office. Price is the chairman of the House Appropriations Committee's homeland security subcommittee.

Amid a backdrop of a federal judge striking down key provisions of Arizona's controversial immigration law, House Speaker Nancy Pelosi called the Price bill a key component of immigration reform and dressed down the GOP for playing "politics with the security of the American homeland."

The House earlier this month approved border funding as part of a larger war-spending supplemental bill, but Republicans in the Senate blocked it and therefore the supplemental sent to President Obama's desk this week to be signed into law doesn't include funding for border security, Pelosi says.

Senate Republicans last week refused to allow the addition of border funds to the war funding bill, Price says. That required House Democrats to take a different approach to fund the border initiative. "With Mexican drug cartels engaging in unprecedented levels of violence, we can't afford to play politics with the security of the American homeland," Pelosi adds.

The House vote came on the same day that U.S. District Judge Susan Bolton struck down the most contested provisions in the Arizona state immigration law which is to take effect Thursday.
The Obama administration challenged the Arizona statute in court at a time when Democrats also are seeking to enact comprehensive immigration reform which is opposed by most Republicans. Many opponents argue that Arizona's law amounts to legalized racial profiling.

Supporters of the Arizona law, including Republican Gov. Jan Brewer, have argued the statute is needed because federal enforcement of the southern border has been too lax.

Bolton agreed with the administration's contention that the Arizona state law would intrude on the federal government's ability to enforce immigration.

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No Longer A Climate Bill, Energy Legislation Now Is All About Oil

Senate Democrats on Wednesday unveiled stripped-down energy legislation which no longer directly would tackle climate change. Instead, the bill's primary aim is to reduce U.S. dependence on oil like that which has fouled much of the Gulf of Mexico.

Democrats described it as a clean energy jobs and oil spill accountability plan, which would create clean energy jobs, hold BP accountable for its monster Gulf spill, and invest in cleaner vehicles that do not rely on oil-based fuel.

“There are many ways to end our addiction to oil and this bill is one of them,” says Senate Majority Leader Harry Reid. “This bill creates jobs that can never be outsourced by strengthening companies that make energy efficiency products. It also saves consumers money – about $1 billion a year over the next 10 years – by cutting energy costs and giving them incentives to make their homes more energy efficient. And it changes the law to make it crystal clear that polluters – not the taxpayers – are going to be held responsible for cleaning up the Gulf.”

Reid last week announced the new direction Senate energy legislation would take after Democrats could not find enough votes for a more-ambitious bill that directly would limit greenhouse gas emissions through a national cap-and-trade system.

Some senators, including Sen. Debbie Stabenow (D-Mich.) blamed Republicans, none of whom stepped up to publicly support a climate bill. Some Democrats, however, have refused to back the climate bill already put forward by Sen. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.). Among those holdouts is Stabenow's home-state colleague, Sen. Carl Levin, who publicly opposed the Kerry-Lieberman American Power Act.

“While the GOP stands in the way of a comprehensive energy package, we must move forward to create jobs and hold BP accountable,” Stabenow says of the new legislation. “This bill will help protect our environment and invest in the development of alternative energy jobs and technology. The Clean Energy Jobs and Oil Accountability Act is an important step to reduce American dependence on oil and lower energy costs through programs like Home Star. It will also hold BP responsible for the devastation it has caused in the Gulf region. I am committed to passing this legislation because it will create good-paying clean energy jobs and lead the way for more comprehensive energy reforms.”



Bill Contains Obama Home Star Program



Home Star refers to a signature initiative of President Obama's which has been included in the Senate bill. Home Star would establish a $6 billion rebate program to encourage Americans to immediately investment in energy-efficient appliances, building mechanical systems and insulation, and whole-home energy efficiency retrofits. It will rapidly create jobs in both construction and manufacturing, while saving families money on their energy bills, supporters say.

Obama traveled to a Home Depot store in Virginia last winter to introduce his Home Star concept, describing insulation as "sexy" because it saves homeowners money.

A broad coalition has formed of environmental groups, the construction industry, and other large businesses, to boost prospects for Home Star to become law.

“The 2,600 members of the HOME STAR Coalition stand together in support of the bi-partisan HOME STAR program, which will deliver a rare triple win for the American people in the form of jobs, savings for consumers, and a positive impact on energy independence and the environment,” says Larry Laseter of WellHome. “Rarely is there an initiative with a near-universal benefit, but that is exactly what we have with the HOME STAR program and we applaud this bi-partisan bill and the Senate leaders for championing this cause.”

Not all are happy with the way the Senate energy bill is turning out, however.

"I am disappointed that because of Republican obstructionism and the need to get 60 votes to overcome a filibuster, the Senate has not been able to go as far as it should in transforming our energy system," says Sen. Bernie Sanders of Vermont, a left-leaning independent who caucuses with Democrats. "While the proposed bill offered by Majority Leader Reid contains important provisions, it goes nowhere near far enough."

Sanders is advocating his own bill, which would advance the use of solar power in the United States.

"The United States now has the potential to create millions of jobs by moving away from foreign oil and fossil fuels into energy efficiency and such renewable energy sources as wind, solar geothermal and biomass," he says. "I'm going to do everything I can to fight for my legislation which would move us toward 10 million solar rooftops in 10 years."

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Dems Slam Republican Senators For Hypocrisy Over DISCLOSE Act Filibuster

Angry Senate Democrats are calling out Republicans as hypocrites for obstructing a bill that would enhance the transparency of burgeoning special-interest spending on American elections.

A united Senate GOP Tuesday mounted a successful filibuster of the Democracy is Strengthened by Casting Light on Spending in Elections Act, or DISCLOSE Act, which is intended to give Americans a window into the expected increase in corporate influence on elections coming as a result of the Supreme Court's January Citizens United decision which swept away decades of bipartisan limits on special-interest election spending.

Authored by Sen. Charles Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.), the House approved the DISCLOSE Act a month ago.

“Today, Senate Republicans once again voted to protect powerful special interests instead of Americans – this time voting for what amounts to a corporate takeover of our elections,” Van Hollen says in a statement released after the failed Senate cloture vote. “Despite widespread Republican support for increased transparency and disclosure in the past, their opposition to the DISCLOSE Act ensures that voters will be left in the dark as unlimited corporate money is spent by shadowy groups seeking to mislead Americans.”

Van Hollen is not the only DISCLOSE Act supporter to notice that a number of Republicans joined the filibuster who, in the past, advocated for greater transparency of campaign spending.

Senate Democrats released a list of quotes from prominent Republicans who once called for transparency but on Tuesday voted to obstruct the DISCLOSE Act.

Those quotes include remarks made in 2004 by Sen. John McCain (R-Ariz.), who co-authored with Sen. Russ Feingold (D-Wis.) a landmark campaign finance reform law.

"This is not a partisan issue. It should not advantage one party over the other. What reform does is create transparency, equality, and participation, and inspire confidence in those we represent," McCain is quoted as saying. "The strength and real muscle in this fight lies with the American people. During the long battle in the Senate to pass campaign finance reform, we called on the American public to make their voices heard on Capitol Hill. They answered, and the impact was astounding."

Senate Democrats vowed not give up on the DISCLOSE Act, and that they will try again for a vote in September after the annual congressional August recess, but it is unclear if successive attempts could be successful.

Supporters will look most intently on turning the votes of at least one of three moderate New England GOP senators, Scott Brown of Massachusetts, and Olympia Snowe and Susan Collins of Maine.

"Senator Snowe, Collins and Brown all raised concerns about passing the DISCLOSE Act in a time frame that would allow the new law to be effective for the 2010 congressional elections," says Fred Wertheimer, president of Democracy 21, a Washington organization that supporters enactment of the DISCLOSE Act. "That is no longer a practical possibility.

"We again strongly urge Senators Snowe, Collins and Brown, and any other Republican Senator interested in government transparency, to work with Senate supporters of the DISCLOSE Act to reach an agreement that they can support and that will reflect the interests of the American people," Wertheimer adds.

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New BP CEO's Job Must Be 'More Than PR Facelift,' Critic Says

The new boss at BP must "initiate a top-to-bottom reconstruction of the company and resist the urge to simply do a PR facelift," to make up for causing the worst oil disaster in U.S. history, according to one Washington consumer advocate.

The energy titan announced Tuesday that it had tapped executive Bob Dudley to takeover for embattled CEO Tony Hayward, who famously snapped that he wanted his "life back" after oil began gushing from a hole a mile beneath the Gulf of Mexico where the Deepwater Horizon drilling rig once stood.

Dudley, an American, had been brought in to manage the monstrous aftermath of the April 20 explosion that destroyed the rig after Hayward's "life back" quote and other missteps that embarrassed the company.

Hayward will depart for a BP job in Russia, and will leave much work behind for the 54-year-old Dudley to complete, says Tyson Slocum, director of the energy program at Public Citizen, a well-known consumer advocacy organization based in Washington.

"We’ve seen it before: BP installs a new CEO and promises big change. But it doesn’t happen; witness the continuation of BP’s horrific safety record after outgoing CEO Tony Hayward was elevated to the top spot in 2007," Slocum says. "Hayward promised to focus 'like a leaser beam' on safety. So much for that."

Slocum notes BP's previous debacles, including a 2005 Texas City refinery explosion that killed 15 workers and a 2006 Prudhoe Bay pipeline spill in Alaska. The U.S. Justice Department has opened active investigations into the current Gulf disaster, in which some oil continues to seep from the well, despite capping.

"It is clear that BP prioritizes short-term profits at the expense of worker safety and the environment," he says.

Dudley must do much more to heal public trust than merely the ongoing ad campaign in which BP promises to "make it right" by the affected Gulf Coast, Slocum says.

"Incoming CEO Robert Dudley must initiate a top-to-bottom reconstruction of the company and resist the urge to simply do a PR facelift of the kind favored by Hayward and his predecessor, Lord John Browne," Slocum says. "Americans rightly demand corporate responsibility, and Dudley must deliver by fixing a broken BP culture and instituting reforms that prioritize safety and environmental stewardship. Such a commitment must be felt in the ranks of managers and employees -- not simply echoed on expensive TV ads.

"Just as important, Dudley owes it to the communities in the Gulf and beyond to pledge the full resources of the company to paying what is owed," Slocum adds, even if that figure exceeds the $20 billion fund BP established under pressure from the White House.

The Gulf oil disaster has idled commercial fisherman across the Gulf Coast, as well as imperiled other sectors of the region's economy, such as tourism.

"Dudley must assure families harmed by the ongoing crisis that he will take no steps to shield BP’s assets from exposure to liabilities stemming from the Gulf disaster," he says. "If the company is genuine in its claim to wanting to turn the company around, this would be a good start."

Whether Dudley is up to the task is an open question. He reportedly referred to toxic dispersants as "dish soap" and called Hayward's initial

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Momentum Builds In Congress To Overhaul U.S. Chemicals Regulation

Paralleling a process begun in the Senate, two senior House Democrats have introduced legislation to update a federal law dating to 1976 that governs the use of potentially hazardous chemicals in consumer products.

Reps. Bobby Rush, of Illinois, and Rep. Henry Waxman, of California, introduced H.R. 5820, the Toxic Chemicals Safety Act of 2010, aimed at strengthening and updating the decades-old Toxic Substances Control Act (TSCA), the primary statute regulating chemical safety.

Waxman is the powerful chairman of the House Energy and Commerce Committee, while Rush chairs the committee's Commerce, Trade, and Consumer Protection subcommittee.

A presidential advisory panel issued a report in May that found toxins are leading to many more cancer cases than previously acknowledged. Also, the Obama administration's Environmental Protection Agency (EPA) became embroiled in a controversy in which lobbyists reportedly prevented more-strict regulation of the chemical bisphenol A – known as BPA, which is contained in many baby products and other consumer items.

The House bill follows action in the Senate, where Sen. Frank Lautenberg (D-N.J.) in April introduced a similar bill designed to update the TSCA.

"The introduction of this legislation marks a major step forward in our efforts to bring to current industry standards an important statute that, once it becomes law, will permanently shine the bright light of public disclosure on a range of chemicals that consumers encounter in a diverse array of products they use each and every day," says Rush, whose subcommittee has jurisdiction over TSCA enforcement.

"I appreciate the tremendous work, testimony, analysis and public comments that a variety of stakeholders and consumer groups have shared as we’ve worked to craft a piece of legislation that both protects consumers while respecting the right of private industry to innovate while protecting businesses’ confidentiality, trade secrets and intellectual property rights," Rush adds. "We are working with all deliberate speed, in this session of Congress, to update a law that is of major importance to American consumers," said

Rush's subcommittee is scheduled hold a hearing on the legislation next Thursday.

The 1976 law fails to adequately protect Americans from harmful chemicals, according to a Washington-based consumer-protection group that supports the Waxman-Rush bill.

"We applaud Chairman Rush and Chairman Waxman for introducing a bill that will help to reduce chronic disease in the U.S, a burden that scientists have increasingly linked to toxic chemicals found in our homes and places of work,” says Liz Hitchcock, public health advocate at the U.S. Public Interest Research Group (U.S. PIRG). “These reforms will also give American manufacturers and retailers the tools they need to compete in a global marketplace that demands safer products.”

The House legislation would significantly strengthen public health protections from toxic chemicals. For the first time, the chemical industry would be required to demonstrate that chemicals are safe, rather than the EPA having to prove they are unsafe. In a major shift, the legislation would require chemical manufacturers to provide basic health and safety information for all chemicals as a condition for remaining on or entering the market, and to make that information public, U.S. PIRG notes.

Other key elements of the Waxman-Rush legislation:


• Chemicals must meet a health standard to enter or remain on the market.
• EPA will identify and restrict the most toxic chemicals that build up in the food chain and in the human body, such as brominated flame retardants.
• Populations most vulnerable to toxic chemicals, including pregnant women, infants and children, and those living in environmental ‘hot spots’, will have extra protections from toxic chemicals.
• EPA will rely on the National Academy of Sciences’ recommendations to incorporate the best and latest science when determining the safety of chemicals.

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Pelosi Enlists 'Most Eloquent, Persuasive Voices' To Persuade GOP To Support Economic Aid

House Speaker Nancy Pelosi made a direct appeal Monday to state lawmakers to convince Republican senators to drop their obstruction of initiatives aimed at shoring up state and local economies nationwide.

Senate Democrats repeatedly attempted to pass legislation to provide federal subsidies to help states struggling with dramatic losses in a tax revenue, which in turn, threatens economic recovery nationwide, according to analysts.

Specific provisions include so-called FMAP funding to help states support their Medicaid health programs, legislation aimed at preventing teacher layoffs, and a "comprehensive jobs bill," Pelosi says.

Despite GOP objection, Pelosi says Democrats' legislation is "paid for," in other words it would not add to the federal budget deficit or debt.

Senate Republicans consistently upheld filibusters of such legislation, however. Democrats stripped out these aid initiatives in order to pass a much more narrow extension of unemployment benefits for the nation's jobless.

“America’s state legislators and governors have been clear that one of the best ways Congress can help the budgetary crises our states are facing is enhanced FMAP funding. That’s because it is fungible and flexible,” Pelosi says. “Enhanced FMAP has been both an opportunity and a challenge for you. When Congress included $87 billion in enhanced FMAP investments in the Recovery Act, it helped keep cops on the beat and teachers in the classroom and helped address the health needs of your constituents. Many of your state budgets have been predicated on continued enhanced FMAP funding.”

Pennsylvania Gov. Ed Rendell (D) last month noted that 47 of the nation's governors, Democrats and Republicans alike, support further federal FMAP funding to help their states deal with the ongonig deep economic downtown.

FMAP support helps states beyond Medicaid, according to at least one recent study. It helps states avoid layoffs across the board, including teachers and other jobs. In all, nearly 1 million jobs nationwide could be at risk without further federal funding to state governments, the study says.

Separately, several prominent House Democrats, including at least one top Pelosi lieutentant, are scheduled to appear in a press event on Capitol Hill to release a joint report from the National League of Cities, United States Conference of Mayors and the National Association of Counties illustrating the economies of local governments have hit a crisis point, forcing significant layoffs and cuts in support services for families and individuals.

With FMAP funding stalled in the Senate, at least some Republicans must be convinced to support it so as to overcome a filibuster, the speaker says.

The California Democrat on Monday addressed attendees at the 36th annual legislative summit for the National Conference of States Legislatures (NCSL) in Louisville, Ky. The NCSL summit brings together government officials, legislative staffers, and union and businesses representatives.

“You are the most eloquent and persuasive voices on this subject; you know best why this is necessary. I urge you to tell Republicans in the Senate about the real cost to your communities of their opposition – cuts to hospitals, nursing homes, and public safety, elimination of domestic violence and homelessness initiatives, and slashed budgets for mental health and child welfare services,” Pelosi says. “We will only be able to ensure an extension of enhanced FMAP funding with your strong advocacy. This will not happen without Republican support, and I welcome any suggestions you have to reach out to those Republican senators who oppose the efforts to extend enhanced FMAP. We must pass FMAP.”

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Senator Asks: Why Should We Trust BP's Damage Assessment?

The federal government is relying too heavily on BP to help assess the damage the company itself has caused during the monster oil disaster in the Gulf of Mexico, according to to a Senate subcommittee chairman.

Sen. Benjamin Cardin (D-Md.) expressed his concern in a letter last week in a letter to Interior Secretary Ken Salazar ahead of a hearing the lawmaker intends to hold Tuesday within the Senate Environment and Public Work Committee's water and wildlife subcommittee which he chairs.

Specifically, Cardin worries about the role BP will play in the Natural Resource Damage Assessment (NRDA), a legal process that begins the process of holding BP responsible for the scope of the clean-up for three months of crude that have flooded the Gulf of Mexico that began in April with the explosion of the Deepwater Horizon drilling rig.

BP reportedly has intentionally lowballed estimates of how much oil actually has been fouling the waters off Louisiana and a growing number of Gulf Coast states.

The BP spill, the worst disaster of its kind in U.S. history, has idled shrimpers, commercial fishermen, and jeopardized the livelihoods of those in the tourism and other industries along the Gulf Coast.

“If we can’t trust BP to tell us how much oil had been leaking into the Gulf of Mexico for nearly three months, why should we trust them when it comes to assessing the damage they have done to our environment?” Cardin asks. “I want to be sure that the federal government, which takes the lead in assessing the environmental impact of this catastrophe, has the tools and resources necessary to accomplish this critical task.”

In his letter to Salazar (PDF), Cardin notes that the National Park Service (NPS) and Fish and Wildlife Service (FWS), along with other federal agencies, must work with BP in the process to conduct studies to identify the extent of resource injuries, the best methods for restoring those resources, and the type and amount of restoration required.

"This process is critical for holding responsible parties accountable. The NRDA will dictate the scope and scale of the restoration work," Cardin writes.

"It has come to my attention that NPS and FWS must rely to a troubling extent on approval from BP before beginning any assessment work," he adds. "Laws and regulations that surround the NRDA and the administration of the Oil Spill Liability Trust Fund require NPS and FWS consult with BP on proposed studies; a process that can take several weeks and may allow the responsible parties to delay and obstruct time sensitive work."

To ensure their ability to collect data and avoid delay, other agencies have established funding mechanisms, such as reimbursable agreements, which allow them to begin assessment work while the required consultation process unfolds, Cardin says.

Cardin tells Salazar that Interior should immediately create such a mechanism to enable FWS and NPS to conduct their natural resource damage assessment work in a timely fashion.

Cardin says that at his Tuesday hearing, titled, “Assessing Natural Resource Damages Resulting from the BP Deepwater Horizon Disaster,” he plans to question the Fish and Wildlife Service on the issue of timely funding for assessment work.

"I expect that the Department [of Interior] will be in a position at that time to announce how it will address it going forward including any recommendations for Congressional action," Cardin tells Salazar.

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OSHA Cuts Outdated Air Quality Rule From Oil Worker Training

by Sasha Chavkin, ProPublica

Earlier this week, we reported that oil cleanup workers on offshore vessels are getting additional safety training, but pointed out that the training curriculum referred to air quality standards that the head of the Occupational Safety and Health Administration has acknowledged to be “outrageously out of date.”

Following our report, OSHA told us that the slide that referred to these standards – known as the Permissible Exposure Limits – shouldn’t have even been there in the first place. “OSHA has requested that the slide you referenced be pulled from the training curriculum and states that it should not have been included. I’m told it’s been pulled,” wrote Labor Department spokesman Jason Surbey in an e-mail.

The training is provided by contractors hired by BP, but the curriculum had already gone through several rounds of revisions by OSHA before the course was allowed to start.

OSHA also told us that it is applying different and stricter air quality guidelines than the permissible exposure limits for operations in the Gulf of Mexico.

Here’s more from the e-mail from Jason Surbey:

In characterizing worker exposure OSHA instead relies on more up-to-date recommended protective limits set by organizations such as National Institute for Occupational Safety and Health, the American Conference of Governmental Industrial Hygienists, and the American Industrial Hygiene Association, and not on the older, less protective Permissible Exposure Limits. Results of air monitoring are compared to the lowest known Occupational Exposure Limit for the listed contaminant for purposes of risk assessment and protective equipment recommendations.

The statement – as official as it may sound – leaves key questions remaining about what standards are being used to monitor chemical exposure in the Gulf. There are major differences between the guidelines endorsed by the various organizations: for example, OSHA’s permissible limit for 2-butoxyethanol, a chemical found in some dispersants, is ten times higher (PDF) than NIOSH’s recommended limit. But only the permissible exposure limit is legally enforceable, according to an OSHA fact sheet (PDF) on dispersant use.

With the agency’s actions to remove references to the previous guidelines – and the latest sampling results showing that air quality in the Gulf is comparable to L.A. on a bad day, as my colleague reported yesterday – we at ProPublica are trying to figure out exactly what the current standards are for chemical exposure for cleanup workers.

We called OSHA yesterday to try to get some details about which organizations’ protective limits are being employed, and whether, as suggested by the statement above, the strictest standard is always applied. We haven’t yet heard back yet, but we’ll update you when we hear more.

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When Denying Loan Mods, Loan Servicers Often Wrongly Blame Investors

by Karen Weise, ProPublica

Arthur and Alberta Bailey are about to lose their home near New Orleans, and their mortgage company says one thing stands in the way of relief: The investors who own their mortgage won’t allow any modifications.

It’s a story heard again and again across the country as desperate homeowners try to participate in a federal program created to foster loan modifications and prevent foreclosures. Loan servicers say their hands are tied by Wall Street.

Have you worked for a servicer in a loan modification call center? We want to hear from you.

Are you a homeowner who's struggling to pay your mortgage? Are you seeking a loan modification through the government program? We want to hear from you.

Federal officials, bank officers, housing counselors and investors themselves say that excuse is cited far more often than is justified. In fact, they say, few mortgage deals include such restrictions.

Consider the case of the Baileys. Litton, a subsidiary of Goldman Sachs, services their loan, and Litton’s contract with investors has no clear language banning modifications. In fact, documents show that over 115 other mortgages from the same investment pool have already been modified.

Even the representative of investors in the Baileys’ mortgage says only the servicer can decide when to modify loans. While he couldn’t comment on an individual case, Bank of New York Mellon spokesman Kevin Heine says it’s “misinformation” to say that investors make these decisions.

Servicers can pass the buck because one mortgage often involves many different companies. During the housing bubble, banks often sold mortgages to investors on Wall Street so they wouldn’t have to keep the loans on their own books, freeing them to make even more loans and protecting them from those that went bad. They then hired servicers to handle the day-to-day work of collecting payments from homeowners ­– and to decide when to modify loans. Now loan servicers have been inundated with requests from homeowners trying to avoid foreclosure through the government’s $75 billion mortgage modification program. The Treasury Department estimates that 1.7 million homeowners should qualify for help.

For homeowners, it can be difficult to understand who is responsible for what. This confusion gives servicers a ready excuse for refusing modifications.

Indeed, nobody knows the exact extent to which servicers are passing blame on to investors. Some housing counselors estimate that 10 percent of the denials they see are attributed to investors; others say they see as many as 40 percent. Either way, tens of thousands of homeowners may be affected, their attempts to modify their mortgage wrongly denied.

The prevalence of such false claims by servicers is a “legitimate concern,” said Laurie Maggiano, the Treasury Department’s director of policy for the modification program. “It’s been very frustrating for us.”

Investors are also dismayed, saying servicers are not acting in their best interests. “This is one of those rare alliances where investors and borrowers are on the same page,” according to Laurie Goodman, senior managing director at Amherst Securities, a brokerage firm that specializes in mortgage securities. She says investors have “zero vote” in determining individual loan modifications and, instead of foreclosures, prefer sustainable modifications that lower homeowners’ total debt.

Investor-owned mortgages represent more than a third of trial and permanent modifications in the government’s program. Under the program, servicers must modify the loans of qualified borrowers unless contracts with investors prohibit the modification, or if calculations determine that the investors won’t benefit from a modification. Investors’ contracts rarely prohibit modifications, and at times, ProPublica found, they have been blamed for denials even though other mortgages owned by the same investors have been modified.

Even when contracts with investors do have restrictions, servicers don’t appear to be following federal requirements that they ask investors for waivers to allow modifications.

Such requests “never happen,” says David Co, a director at Deutsche Bank’s department that oversees 1,600 residential securities, the complex bundles of mortgages sold to investors.

Treasury’s Maggiano says the government is investigating investor denials and considering greater consequences for servicers that wrongfully deny modifications. Servicers’ compliance and accountability have been a major problem for the government’s program. Treasury has threatened penalties before, but it hasn’t yet issued any.

Whose decision is it?

“The very phrase ‘investor restriction,’ I think, is deliberately confusing,” says Joseph Sant, an attorney with Staten Island Legal Services, which represents homeowners in foreclosure. “What we’re talking about are not business entities or people, but inert documents.”

Typically, financial institutions set up mortgage-backed securities as a trust — legally their own entities — and then sell bonds from the trust to investors, which can range from mutual funds to pension funds. At the same time, they sign up trustees to manage the security and hire divisions of their own banks or other companies to act as servicers that work directly with homeowners.

While servicers often tell homeowners that investors decide whose loans can be adjusted, Heine, the spokesman for Bank of New York Mellon, one of the largest trustees that administer mortgage securities, says the responsibility to modify loans “falls squarely to the servicer.”

And the contracts that servicers often blame are usually not a roadblock. A report by John Hunt, a law professor at the University of California, Davis, looked at contracts (PDF) that covered three-quarters of the subprime loans securitized in 2006 and found that only 8 percent prohibited modifications outright. Almost two-thirds of the contracts explicitly gave servicers the authority to make modifications, particularly for homeowners who had defaulted or would likely default soon. The rest of the contracts did not address modifications.

Jeffrey Gentes, an attorney at the Connecticut Fair Housing Center who works with hundreds of homeowners across the state, estimates that in 80 percent of the cases in which he has seen the servicing contracts, no language prevents modifications as the servicers have claimed.

Homeowners’ advocates say that when they successfully disprove a contractual restriction, the servicer just gives another reason for denying the modification. “The investor is cited first until the borrower can prove it otherwise,” says Kevin Stein, associate director of the California Reinvestment Coalition, which helps low-income people and minority groups get access to financial services.

Sant, the Staten Island attorney, says a servicer told one client that the contract with investors forbade extending the length of the mortgage, one key way monthly payments can be reduced through government’s program. But the government has addressed the objection, ruling that if a servicer can’t extend the length of a mortgage, it can still give a modification and just add a balloon payment to the end of the loan. Sant pushed back on the servicer’s attorney, who dropped that reason for denial and instead said the homeowner had failed the computer model that determines eligibility. Sant currently is reviewing the case to determine how to proceed.

Struggling to get information

Homeowners looking to challenge investor restrictions need information that is not easily accessible, or sometimes even public. “All of the information seems to be in the hands of the servicers,” Stein says. “Even the investors don’t know what’s going on.”

Tracking down the servicer’s contract with investors, or even just the name of the mortgage-backed security that owns a loan, is often a struggle. Many homeowners and advocates report that servicers will not tell them the name of the security.

National City Mortgage turned down (PDF) Candice Sullivan’s request to modify the loan on her home in Northern California, writing that “the investor has denied the modification at this time.” On the phone, the servicer wouldn’t give Sullivan the name of the security that owns her loan, so Sullivan wrote a letter citing consumer protection laws (PDF) and asking for the information. PNC, which had bought National City, responded by stating (PDF), “We are unable to disclose any information regarding the investor of your loan due to our servicing contract with them.”

But in 1995, as part of efforts to increase consumer protections in the mortgage industry, Congress passed a law amending the Truth in Lending Act (section F) to require servicers to provide the name and contact information for the owner of a loan when a homeowner submits a written request. The Federal Reserve, which has authority over the Truth in Lending Act, confirmed the law’s requirement that the information be provided.

PNC declined to comment and referred us to the Mortgage Bankers Association, an industry group, which asserted that onerous requests from homeowners don’t require responses. It did not specify what it considered to be onerous.

These difficulties extend into court as well. Karen Gargamelli, an attorney with the nonprofit legal-services group Common Law in New York, says Bank of America took eight months to provide the contract that covered one client’s loan, despite being in state-mandated foreclosure settlement conferences. The bank produced the agreement only after a court order. After a year and a half in settlement conferences, the court-appointed negotiator recently found that the bank was not negotiating in “good faith” and recommended that a trial judge cancel the foreclosure.

Treasury has recently begun requiring servicers to provide a list of every potential restriction for every agreement that could impede a government modification. Though the department has not yet decided if it will make the list public, the government’s compliance teams will at a minimum have the list to check denials that homeowners or housing counselors bring to their attention.

“If there is a mistake made, the consequences are being felt by the homeowner, their family, their neighbors, the local government,” says Stein, of the California Reinvestment Coalition. “They are not being felt by the servicer.”

In limbo on the bayou

Sitting in his home in La Place, La., 20 miles north of New Orleans, Arthur Bailey says he is usually an optimist. At 68 years old, Bailey, a retired mechanic, thinks he’ll live “another 99” and hopes to live independently with his wife, Alberta, in their own home.

But after Hurricane Katrina, a series of problems, including complications from a change in mortgage servicers, left the Baileys behind on their loan. The new servicer, Litton, told them they had to pay up. Now they’re on the brink of foreclosure.

For two years, even before the government program began, the Baileys have been trying to get a modification. They say they can afford their original loan payment of around $500 but can’t pay the extra $238 a month that Litton demands to cover the late payments, accrued interest, and fees. Their only income is less than $1,600 a month from Social Security, and both are limited by health problems: Arthur had a stroke several years ago, and Alberta had a kidney transplant in February. “I’m a cripple putting off buying a $99 wheelchair,” Arthur Bailey said in his Louisiana drawl.

Despite the troubles, Litton isn’t planning to lower their monthly payments. “They are saying that the investor don’t want to do it,” Arthur Bailey said. “But the investor said Litton can do it.”

Alexa Milton, who oversees a team of counselors at Affordable Housing Centers of America, has been helping the Baileys try to get a modification and said Litton’s message is clear: “They seemed pretty straightforward in saying the investor prohibited all modifications of loans in the security.”

But data that the security’s trustee reported to investors shows that more than 115 mortgages in Bailey’s pool have been modified.

Litton told ProPublica that it cannot speak about a specific homeowner’s situation but said it encounters language in contracts "from time to time that prohibits the modification of loans.”

The Baileys have reached an impasse. Litton canceled a foreclosure sale in March when Alberta Bailey had major heart surgery after complications from the kidney transplant. Arthur Bailey says he is “just living in limbo.” Litton could put the house up for sale any day.

Reporter Paul Kiel contributed to this story.

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Gitmo Challenges Could Endanger Half of Convictions

by Chisun Lee, ProPublica

Decisions on two legal challenges to the Guantanamo military commissions system, both expected this summer, could undo half the convictions won so far before the tribunals and disrupt a number of pending cases.

The appeals of two 2008 convictions attack several core aspects of the young trial system. One potentially explosive argument is that the most commonly charged offenses -- conspiracy and providing material support for terrorism -- are not war crimes that can be tried in a military court.

The government insists there is longstanding precedent for prosecuting these acts through military justice. "Terrorism, though perhaps often by other names, is undoubtedly a war crime," Edward White, a Navy lawyer who represents the government in one of the appeals, wrote in a brief. Violators, he added "were historically liable to be shot immediately upon capture."

Attorneys for the appellants, however, say the U.S. is going too far. "There's no other country in the world that recognizes material support for terrorism as a war crime," said Joseph McMillan, who represents Salim Ahmed Hamdan, a Yemeni challenging a 2008 conviction. It's a civilian offense that can be tried only in a civilian court, McMillan contends.

Whatever the U.S. Court of Military Commission Review decides, the loser can appeal, potentially all the way to the U.S. Supreme Court. But the rulings would have broad effect in the meantime, said White, chief of appeals for the prosecution in the Defense Department's Office of Military Commissions, providing "important system-wide precedent."

This is Hamdan's second challenge to the Guantanamo commissions. His first, to the tribunals as set up by President George W. Bush, resulted in a 2006 Supreme Court decision invalidating the system before he could be tried. After Congress created the current commissions, he was convicted for providing material support as a driver to Osama bin Laden. Though he now lives free in Yemen, having completed his sentence, he is appealing again "to clear his name," said McMillan.

The second appeal stems from the conviction of another Yemeni, Ali Hamza al-Bahlul. He remains at Guantanamo after being sentenced to life in prison for committing conspiracy, providing material support for terrorism, and soliciting murder as a publicist for al-Qaida.

The fate of the Bahlul and Hamdan cases could affect the paths of many others.

Two other men have been convicted in the Guantanamo commissions for offenses that the appeals call invalid. Ibrahim Ahmed Mahmoud al-Qosi, a Sudanese citizen accused of serving as an al-Qaida cook, bodyguard and driver, pleaded guilty this month to conspiracy and providing material support. David Hicks pleaded guilty in 2007 to providing material support and served a short sentence, before being released in his native Australia.

Hicks is reportedly considering an appeal. "The law that he eventually pleaded guilty to was not actually an international war crime at all," his former lawyer recently told the Australian Associated Press.

Nine of the 12 detainees who remain at Guantanamo and are on the commission case list are accused of material support, conspiracy, or both. (This excludes the five suspected Sept. 11 co-conspirators, who are on the list but are currently set for civilian prosecutions.) There's been no movement to prepare for trial in many cases on the list, a Pentagon spokeswoman said.

It's not clear how the war crimes challenge would fare at the nation's highest court. Four of the five justices who ruled for Hamdan in 2006 concluded that conspiracy was not a war crime, but the composition of the court has since shifted. The fifth, Anthony Kennedy, held off, saying Hamdan's successful arguments on other points made it unnecessary to decide that issue.

In addition to denying their actions were war crimes, Hamdan and Bahlul make an array of other arguments. They say they were punished for conduct that was made illegal only after they acted, a violation of the Constitution's prohibition on ex post facto laws. They also contend that establishing military commissions only for foreigners is unconstitutional discrimination.

Their cases illustrate a key concern of critics: The system touted by conservatives and embraced by the Obama administration as the most effective one for bringing certain detainees to justice is fraught with the potential to be undone, even years after trials conclude.

"The military commissions are an attractive option, because it's a lot easier for the government to win," said Stephen Vladeck, a national security law expert at American University who supports the detainees' appeals and favors prosecution in civilian court. "But these are fundamental questions you just don't have in the Southern District of New York."

Three dozen detainees are set to be prosecuted in civilian or military court, according to an internal administration review completed in January and recently published by the Washington Post (PDF).

One solution for the government might be to strike plea agreements in which defendants waive their right to appeal. A Guantanamo prosecutor told The New York Times earlier this month that al-Qosi, by pleading guilty, had effectively given up that right. But the Pentagon wouldn't tell us if the still-secret plea agreement contains a waiver.

"Whether or not the military commissions are constitutional is a question that will take years to answer," said McMillan. "If they're struck down by, ultimately, the Supreme Court of the United States, in various respects, the government is back at Square 1."

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Bogus ‘Obama Mom’ Grants Lure Students

by Sharona Coutts, ProPublica

Listen today to Marketplace for a version of this story.

After being laid off from her job as a high school teacher in Dayton, Ohio, Nicole Massey decided to go back to college. For months, she scoured the Web for ways to fund her tuition, while supporting her 10-year-old son, Tyler. So when ads turned up in Massey's inbox claiming that President Barack Obama had created special college grants and scholarships for single mothers, her hopes soared.

"You see his picture," Massey said, "so I clicked on it." The link took her to a new window, where she was asked to enter her name, age and other information about the degree she wanted. The site then produced a list of schools that lined up with Massey's choices.

Almost immediately, recruiters from for-profit colleges, including the University of Phoenix, Kaplan University, Grand Canyon University and a couple of local schools, bombarded Massey with e-mails and calls.

"That's when I would bring up the thing, 'What about the Obama loans? What about the money for the single moms in the stimulus?'" she said. "And they would say, 'Well, we'll call you back with more information about that.'"

They never did -- and little wonder: "There is no such thing as an Obama grant for moms," said Robert Shireman, who until early this month was deputy undersecretary at the U.S. Department of Education. "Moms are eligible for federal financial aid generally -- Pell Grants, student loans and other aid -- but nothing specific to moms or single moms." Nevertheless, the Obama mom ads have become "ubiquitous," he said.

For-profit universities and career colleges are flourishing in the down economy, thanks in part to a gusher of taxpayer money flowing into the federal government's Pell Grant program for economically needy students. Hundreds of thousands of Americans have already enrolled in for-profit colleges, which are fiercely competing for new recruits.

The grant windfall has fueled another boom: for online marketers that gather contact information from prospective students and sell it to schools. Just a few years ago, these firms, known as lead generators, fed the subprime mortgage machine. Now they are earning more than $1 billion a year for finding prospective students, according to one industry estimate.

Consumer advocates say they are alarmed by parallels between the subprime mortgage industry and for-profit schools, which also have come under fire for targeting low-income groups and signing up students for loans that can leave them buried in debt. Some schools earn nearly 90 percent of their revenue from federal student aid programs.

Single moms, the critics say, are especially vulnerable.

"In comparison with an 18-year-old traditional college student, a single mom faces unique, often unsurpassable obstacles to getting an education," said Greg C. Frazier of Community Connections of Jacksonville, a group that works with disadvantaged women in Florida. "Frequently she will be lured by the promises of low-cost, easy online courses that in reality do not deliver."

Harris Miller, president of the Career College Association, said the 1,400 for-profit colleges, universities and trade schools his organization represents object to using misleading or false advertising to recruit students. But Miller said lead generators often are subcontractors a couple of steps removed from a school's recruiting operation, making them hard to police.

Shireman, while denouncing the ads, said the Education Department lacks authority to crack down on subcontractors. A spokeswoman for the Federal Trade Commission, which does have such power, called the ads misleading but declined to say whether the agency is investigating them.

Vital Market for Career Schools

Mothers are an important market for the for-profit schools. Women account for 65 percent of their students, and more than half have dependent children, according to the Career College Association. In many instances, returning to school could provide mothers with a step up to a better job and improved circumstances for their children.

But women who've responded to the ads told ProPublica they felt "targeted," "victimized" and "insulted" once they discovered the Obama grants do not exist.

When banner ads and pop-ups appeared in her Facebook profile and on the Web site Blackplanet.com, Lisa Jackson, a single mom from Washington, D.C., clicked on the links.

Jackson lost her job as a project manager in a furniture dealership last year and spent a lot of time online looking for ways to escape unemployment. She realized there were no Obama grants for single moms after receiving e-mails from several for-profit schools.

"I feel it's an insult to my intelligence to some degree," she said.

The use of President Obama's name also troubled Jackson, who is African-American.

"Some of these advertisers are playing on the sense that we have our first African-American president," she said, noting that Obama's image and name have been used to promote mortgage refinancing in minority neighborhoods. "It's sad. They've used it for the wrong reasons."

Priya Raghubir, a marketing professor at New York University's Stern School of Business, said it's not a coincidence that marketers are recycling techniques from the subprime mortgage boom. Obama has strong appeal among younger people, minority groups and lower-income households, she said. The same people were disproportionately targeted for subprime loans, according to research by the Department of Housing and Urban Development.

"For these groups particularly, he is a figure, a celebrity, who is highly liked and also signals something they would like to associate with -- the way he has used education to break a number of barriers and get to where he has at such a young age," Raghubir said.

Watchdog groups, Congress, the Education Department and some investors have voiced concerns (PDF) about recruitment and
at for-profits schools. A recent report (PDF) by the College Board found that more than half of the students at for-profits graduate with $30,500 or more in debt -- compared with about a quarter of private college grads and 12 percent from public schools.

Middlemen in the Recruiting Game

Last year's economic stimulus bill added $17 billion for the government's need-based Pell Grant program, and an expansion signed earlier this year by Obama is expected to provide around 820,000 additional grant awards over a decade, according to an Education Department spokesman. The money began rolling in during the fiscal year that ended in June, and while public, private and for-profit schools all saw big gains in Pell Grant revenue, the overall increase to for-profits was highest -- 70 percent over the prior year.

The University of Phoenix -- the largest for-profit school -- took in more than $1 billion from some 300,000 Pell Grants alone in 2009-2010, Education Department data show. That's about what Phoenix's parent company, the Apollo Group, spent on "selling and promotional" activities in 2009, according to company financial filings.

For-profits spend heavily on lead generation, typically some 20 to 30 percent of their ad and marketing budget, according to Ampush Media, a San Francisco lead generation firm. An Ampush research report prepared in February estimated that higher-education leads were a $1 billion market and said that market was "expanding rapidly" while mortgage leads had only "muted growth."

Experian PLC, a company that provides consumer credit reports and advice, also operates lead-generation businesses. The company once used a video of a woman dancing energetically in front of her computer to funnel people to one of its websites -- LowerMyBills.com.

The site was a major source of leads for subprime lenders during the housing boom, according to Sam Rogers, mortgage industry analyst at the Center for Responsible Lending, a nonprofit that monitors lending practices. (The Sandler Foundation, the principal funder of ProPublica, also provides significant financial support to the center.)

Experian used the same video at another of its websites, ClassesUSA.com, which collects information to sell to colleges. Another ad for LowerMyBills.com features a buxom blonde dancing suggestively under the text, "New Housing Bill Passed! $133,000 Mortgage for Under $529/Month!" That same dancing blonde sometimes also linked to ClassesUSA.com.

A third Experian ad is an animation of two young women walking side by side, with a banner saying, "Obama Asks Moms to Return to School."

Steve Krenzer, president of Experian Interactive Media, declined to comment on why Experian used the ads to target both subprime mortgage borrowers and students.

"Here's an example of an icon of the American financial sector luring unwitting consumers into prohibitively expensive borrowing that they can't afford and that the taxpayers will have to make good," said Barmak Nassirian, spokesman for the American Association of Collegiate Registrars and Admissions Officers, an industry group whose members include some for-profit schools.

ProPublica asked the two other major consumer credit reporting companies, Equifax and TransUnion, whether they had any such ads. TransUnion said it does not engage in direct-to-consumer lead generation. Equifax did not comment.

The most common ads are pop-ups that show up onscreen automatically. ProPublica also found examples of websites that referred to Obama mom grants or loans and provided links to lead generators.

"Barack Obama has made the pledge to help moms go back to school while the government pays for it," said one. "Unemployed mothers can snatch a college diploma at the comforts of their own home without spending a dime for baby-sitting (sic)," read another.

Schools pay anywhere from a few dollars up to $85 per lead, said Daniel Kim, president of a small New Jersey-based lead generation company called MyCS Network. Although some nonprofit schools use lead generators, the biggest clients for higher-education leads are for-profit universities, according to Kim, who has worked in the industry since 2004.

ProPublica contacted several lead generators linked to the Obama mom ads, but all either declined to comment or did not return calls or e-mails. To determine which schools were buying those leads, we asked volunteers from the ProPublica Reporting Network to click on the links, fill out the online forms and report back.

Hana Shepherd, of New York City, received 10 calls and nine e-mails from recruiters within a day of filling out a form. Susan Sawyers, also of New York City, received pages of e-mails.

The schools included Walden University, Golden Gate University, Kaplan University, Ashford University, American InterContinental University, Capella University, Colorado Technical University and the University of Phoenix -- all for-profit institutions.

Sawyers also received an e-mail from one public university: the University of Southern California Rossier School of Education. Jennifer Hanlon, director of marketing at 2tor, the company that manages the Rossier School's online advertising, said she was surprised and disappointed to hear about the ad.

Part of the problem, said Hanlon, is that lead generators frequently farm out work to subcontractors. "It's frustrating being an advertiser because you contract with one person and they have a group of affiliates they work with," she said. "You just have to be a diligent advertiser and find out where you're being seen, and if you see anything on the shady side, you have to do your due diligence."

A spokesman for Capella said school officials also "periodically review messaging" used by lead generators, and that they had terminated Capella's "involvement" with several ad campaigns earlier this year after discovering they were "paraphrasing President Obama." A spokeswoman for Golden Gate University said the school would "immediately" ask any of its lead generators to stop should they find the marketers using Obama mom ads. The other schools did not comment.

At our request, volunteers asked the lead generators and college recruiters about Obama grants or scholarships for moms. While no recruiter claimed the grants actually existed, they generally did not dispute that they did. More often, said Shepherd, "I was told that a financial aid person could assist me later when I asked about the Obama grants."

A Regulatory Vacuum

At a round-table meeting in Northern Virginia this winter, Education Secretary Arne Duncan was surprised by a question from one of the attendees.

"One of the students participating in a discussion actually asked: 'Is there an Obama scholarship for moms? Because I've seen ads about it,'" said Shireman, who was Duncan's deputy.

Duncan had never heard of the ads, let alone an "Obama" scholarship for moms. But Shireman had. "I've seen the ad myself on my personal e-mail," he said, describing it as "misleading." Yet the department lacks authority to stop the advertisements, Shireman said.

"We're not a general regulatory agency around issues of marketing," he said. "The Department of Education doesn't have any direct authority over third-party entities, unless those third-party entities are working for the schools."

The department recently released draft regulations that would strengthen its ability to crack down on misleading ads, Shireman said. But the new rules apply only to the schools or companies that work for them directly -- not to subcontractors.

The Federal Trade Commission does have jurisdiction over fraudulent marketing, and is "actively looking at scams that use news about the economic stimulus package to falsely claim that the package includes money for government grants, home repair, to pay off debts, scholarships," said Lois Greisman, director of the agency's Marketing Division.

But Greisman said she could not comment on whether the FTC is looking at any specific entity and could not point to any previous enforcement action involving the Obama mom ads. Blackplanet.com did not respond to our request for comment and Yahoo! declined to comment about ads on its sites.

Miller, the Career College Association president, said for-profit schools have objected to the tactics used by some lead generators. In one instance, he said, schools were stunned to discover that a lead generator was using the promise of free food or housing to attract people to enter their data. "No one thought this was OK," he said.

Schools often work with a primary lead generator and may require that company to sign a contract giving the school oversight of ad copy. Miller said his group is encouraging schools to hire their own "mystery shoppers" to police lead generators.

But Kim, of the lead generator MyCS Network, said all misleading techniques make the industry "look bad." They persist, he said, for a simple reason -- they work.

"It's tough because there are these large companies doing it," Kim said, "and they're getting these leads to the schools, and the schools think these leads are good."

ProPublica's Joe Kokenge contributed to this report.

Several ProPublica readers belonging to our Reporting Network assisted reporter Sharona Coutts with identifying schools buying leads. If you'd like to help ProPublica with its reporting, join our Reporting Network.

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Rep. Rangel’s Ethics Wrangle: Get the Rundown

by Marian Wang, ProPublica

The House Ethics Committee has finally come out from behind its veil of secrecy and announced that after a two-year investigation, it has found Rep. Charlie Rangel, D.-N.Y., likely violated ethics rules.

As we reported in March, the ethics committee “admonished” Rangel for violating ethics rules against accepting gifts when he attended conferences in the Carribbean in 2007 and 2008, but the investigation into Rangel’s other alleged violations continued.What were those other violations? The committee didn't disclose the details of what they found, but we’ve kept a full rundown of Rangel's ethics record.

The House Ethics Committee also announced the creation of a subcommittee to hear the case against Rangel and make a final judgment. It'll be the first time such a hearing has happened since 2002, pointed out The New York Times. In that 2002 case, former Rep. James Traficant Jr., ended up being expelled from Congress for bribery and served seven years in prison.

The subcommittee will meet to hear the allegations against Rangel on July 29.

"I am pleased that, at long last, sunshine will pierce the cloud of serious allegations that have been raised against me in the media,'' Rangel said in a statement, as reported by The Wall Street Journal. "I will be glad to respond to the allegations at such time as the ethics committee makes them public."

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Unemployment Benefits To Start Flowing Again, But Congress Left Some Economic Help Undone

Although unemployment benefits will once again start flowing to millions of jobless Americans, Congress failed to follow through on crucial pieces of their financial-aid plans.

President Obama Thursday signed hard-fought legislation Thursday that extends the emergency unemployment compensation, or EUC, program and full federal funding of state extended benefits through November 27. Because the law is retroactive, eligible claimants now may be paid for weeks of unemployment after the previous law expired on June 5.

Millions of out-of-work Americans had begun losing their unemployment benefits after the previous extension expired, causing even greater hardship for those looking for work and leaving many to face dire circumstances, such as homelessness. Republicans repeatedly blocked a new extension from coming to a vote; finally, two members of the Senate GOP broke ranks with the others, enabling the Senate to pass a new extension.

National unemployment stands at 9.5 percent, but is in the double digits in many places, including Nevada and Michigan. Long-term unemployment, or the number of Americans out of work six months or longer, is at levels unseen since World War II.

"We applaud the actions of the president and Congress to provide this important financial lifeline for more than 200,000 Pennsylvanians who otherwise would have run out of benefits by July 31," says Sandi Vito, Pennsylvania's state labor & industry secretary. "All eligible individuals will be notified by mail, and we are expediting claims processing to get this much-needed money to Pennsylvanians who are out of work through no fault of their own."

Vito, however, foresees having to clear a backlog created by the expiration of benefits for many.

"We expect a very high volume of claims due to the congressional delay in reauthorizing these vital programs, so we ask claimants to please be patient and use the online services whenever possible," she says. "We do understand how important these benefits are to Pennsylvanians, and we will do everything we can to ensure their swift delivery."

However, in order to win votes for the continuation of unemployment insurance, Senate Democrats stripped down their legislation, which means key economic supports they argued were necessary aren't happening.

Specifically, Congress has not extended state fiscal assistance contained within last year's economic stimulus program, or the small but highly cost-effective TANF Emergency Fund, which together are helping create hundreds of thousands of jobs, according to Chad Stone, chief economist at the Washington-based Center for Budget and Policy Priorities.

States are continuing to lay off workers and cut spending to offset weak tax revenues, and these steps are impeding the economic recovery, Stone says. By extending state fiscal assistance, which will largely run out by December 31, Congress can help states balance their budgets with fewer job-killing spending cuts, he says.

Congress also should extend the TANF Emergency Fund, which 36 states and the District of Columbia are using to help create subsidized jobs in the private and public sectors. States estimate they will have placed about 240,000 people in these jobs by the time the fund expires on September 30, but many states plan to start shutting down their programs in the next month unless Congress extends the fund.

"Let’s hope [the successful unemployment extension] vote is a harbinger of speedy action on these two pressing issues," Stone says.

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Reverse Ferret! When Stories Bite Back

by Stephen Engelberg, ProPublica

Over the past 24 hours, the White House and the NAACP and a host of bloggers have been exposed to a painful and public lesson in one of journalism's basic rules: If you're going to accuse someone of wrongdoing, you must give them a fair chance to explain themselves.

The reason behind this rule should be obvious. Things aren't always what they seem. Sources have agendas. People's memories are faulty. And, yes, there are people who want to plant misleading stories.

There are those who argue that the modern pace of the news cycle has made the requirement of seeking comment as quaint as glue pots and typewriters. Some news is too hot to hold! Just be transparent about what you know! Update when new facts come to light!

I couldn't disagree more.

Today's media environment has been defined by both the speed of publishing (we expect to see the video of the plane landing on the Hudson minutes after touchdown) and the emergence of openly partisan outlets whose "reports" are spearheading a political agenda.

There's a premium on speed, but there's an even bigger premium on pushing for the full context in an environment in which news nuggets are thrust into public view by parties with a clear stake in the outcome.

Consider the tale of Shirley Sherrod, until Monday morning an obscure Agriculture Department official, after the website BigGovernment.com posted a video clip in which she appeared to say she had not done all she could to help a white farmer save his land.

Within hours, Sherrod was called by her federal bosses and told to pull over to the side of the road and send them a resignation letter via her BlackBerry. In the rush to contain any political damage, the Obama administration appears to have been uninterested in hearing her side of the story. The NAACP immediately branded her comments as "shameful" and the agriculture secretary, Tom Vilsack, triumphantly proclaimed that his department had "zero tolerance" for racism.

In an era in which political "war rooms'' put a premium on instantly responding to attacks, this seemed like a classic piece of battlefield surgery.

But it backfired. Given a chance to explain the context of her remarks, Sherrod turned the story on its head.

The tape, it turned out, had been edited to leave a misleading impression. Sherrod said, and the recording of her full remarks backed her up, that she had recounted the story of the white farmer as a way of explaining how her attitudes on race had been transformed. In segments not included in the clip, Sherrod went on to say that she had done everything she could to rescue the farmer from his plight.

That turned out to be true. The farmer, Roger Spooner, was quickly tracked down by reporters and added another relevant fact: Not only had Sherrod fought hard to help the family save its farm, she had helped Spooner prevail. "If it hadn't been for her, we would've never known who to see or what to do," he told CNN. "She led us right to our success."

The website that brought the initial clip of Sherrod's remarks to light, BigGovernment.com, is an active participant in the political wars. It's the brainchild of Andrew Breitbart, the conservative activist recently in the headlines for airing a videotape in which employees of the anti-poverty group ACORN were covertly filmed advising clients on how to break the law.

ACORN later complained that the tapes had been edited to make them look more incriminating. But there was no question that at least a handful of ACORN officials had made some dumb remarks.

In this instance, the story was wrong and quickly fell apart when it was fact-checked.

Breitbart made no secret of his intentions. In his bylined story posting the clip, he said he was doing so in response to an NAACP resolution demanding the Tea Party repudiate racist remarks by its members. It's worth recalling the exact phrasing of Breitbart's piece, which appeared on July 19 at 8:18 a.m.:

We are in possession of a video from in which Shirley Sherrod, USDA Georgia Director of Rural Development, speaks at the NAACP Freedom Fund dinner in Georgia. In her meandering speech to what appears to be an all-black audience, this federally appointed executive bureaucrat lays out in stark detail, that her federal duties are managed through the prism of race and class distinctions.

This story did not mention that the incident at issue occurred decades before Sherrod took her federal job. And it nowhere discloses that the farmer ultimately kept his land. Breitbart told TPM Muckraker that he'd posted a two-minute version of the speech provided by his "sources," and that he hadn't edited it.

By this afternoon, everyone involved in the flap was furiously back-pedaling. Vilsack offered to rehire Sherrod. The NAACP retracted its statement, saying it had been "snookered.'' White House spokesman Robert Gibbs acknowledged, "I don't think there's any doubt that if we all look at this, one of the great lessons we will take away from this is to ask all the questions first."

Journalists did their job, and quickly tracked down the truth. The people rushing to judgment were politicians, not reporters.

This story reminds us of several basic truths. Videotapes are no more reliable than any other piece of journalistic evidence. Fact-checking is not optional. And the request for explanation should give subjects of journalistic inquiry a real opportunity to respond and provide context. I once insisted that a reporter call an accused war criminal for comment.

Why, he asked?

Because we might just learn something from him.

The Sherrod story reminds me of an anecdote told by British journalists about Kelvin MacKenzie, the legendary editor hired by Rupert Murdoch to shake up the tabloid paper The Sun. MacKenzie delighted in unleashing tough stories on the powerful and wasn't overly concerned by the facts. Stick a ferret up their trousers, he would tell his staff.

If the story turned out to be wrong, as it sometimes did, McKenzie would burst out of his office and shout: "Reverse ferret!" A signal the story should be rolled back in subsequent editions.

In the age of the instant news cycle, the possibilities for errant ferrets are unlimited and worth taking pains to avoid.

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