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Dig Investigative nuggets from the staff of Reveal

Billionaires versus the press

The revelation that billionaire Peter Thiel secretly funded a libel lawsuit against Gawker has provoked a lot of handwringing in media circles.

“Be very, very worried,” tweeted Mother Jones Editor Clara Jeffery. Nevermind that most of us don’t publish celebrity sex tapes – how many other fabulously rich people are trying to take down media outlets from the shadows? Now that Gawker is facing a $140 million verdict, will more billionaires try the tactic? It’s hard to know, but we do know the ones who have gone after journalists more directly.

Sheldon Adelson: The casino magnate and major GOP donor sued a Wall Street Journal reporter over an article that described him as “foul-mouthed.” The suit is ongoing. Adelson also sued former newspaper columnist John L. Smith into bankruptcy over a passage in a book. Adelson more recently bought the Las Vegas Review-Journal, where Smith worked. The columnist resigned after being told he couldn’t write about Adelson.

Frank VanderSloot: The Idaho businessman and Republican donor sued Mother Jones over an article about his company’s contributions to Mitt Romney’s super political action committee. The story noted the company’s “history of run-ins with regulators.” Mother Jones won the case, but only after “the take-no-prisoners legal assault … consumed a good part of the past two and a half years and has cost millions (yes, millions) in legal fees.” And, in an eerie harbinger of this week’s Thiel news, VanderSloot said he was creating a $1 million fund to pay the legal expenses of people suing the “liberal press.”

Donald Trump: In 2009, Trump filed a $5 billion defamation suit against a book author... Read More >

Why the DOJ is backing a whistleblower’s claims of medical fraud

The U.S. Department of Justice is backing a whistleblower who claims that hospital chain Prime Healthcare Services inappropriately urged doctors to transfer emergency room patients into hospital beds.

In a lawsuit, a former hospital executive alleges that the chain overlooked medical need and whisked emergency room patients to the inpatient wings of the hospital if they were covered by Medicare or private insurance. Nonpaying customers, the case alleges, were shown the door after a cursory stay.

By joining the False Claims Act lawsuit, the Justice Department brings additional legal firepower and evidence from an independent probe that validates aspects of the whistleblower’s case.

The Center for Investigative Reporting exposed allegations of the profit-motivated practice in a 2011 report. We analyzed public data showing that after the chain took over a hospital, the percent of seniors admitted into the hospital from the ER spiked, usually from about 40 percent to more than 60 percent.

One woman said she felt like she was in the “Twilight Zone” as physicians at a Prime hospital overruled her family’s objections to admitting her grandmother, who hoped to see her own doctor at a nearby hospital.

Months after the story ran, whistleblower Karin Berntsen filed suit. Berntsen was director of quality and risk management at Alvarado Hospital in San Diego County. Her lawsuit claims that patients who didn’t meet the threshold required for hospital admission were admitted anyway.

Magistrate Judge Patrick J. Walsh ruled today that federal civil fraud attorneys in Los Angeles can join the case and will have 30 days to... Read More >

Can an algorithm be any better than a coin toss at finding criminals?

A deep dive from ProPublica reporters who wanted to vet whether an algorithm really could determine the likelihood that someone would commit a crime in the future has produced some worrisome findings. ProPublica zeroed in on some 7,000 people in Broward County, Florida, who were arrested and given risk scores to decide the likelihood that they would reoffend in the two years following their arrest.

Among other things, ProPublica concluded that the risk formula wrongly flagged black defendants as future criminals and failed to flag certain white defendants as a higher risk for committing future crimes.

According to ProPublica:

“Scores like this – known as risk assessments – are increasingly common in courtrooms across the nation. They are used to inform decisions about who can be set free at every stage of the criminal justice system, from assigning bond amounts – as is the case in Fort Lauderdale – to even more fundamental decisions about defendants’ freedom. In Arizona, Colorado, Delaware, Kentucky, Louisiana, Oklahoma, Virginia, Washington and Wisconsin, the results of such assessments are given to judges during criminal sentencing.”

Despite former Attorney General Eric Holder worrying that racial bias could surface in such risk assessments and perpetuate biases that already existed in the criminal justice system, the U.S. Sentencing Commission has never studied the issue. The ProPublica reporters also concluded that the tool was exceptionally bad at predicting future acts of violence. Just 1 in 5 people from the analysis later committed a violent crime after the prediction was made that they would do so.

“When a full range... Read More >

TSA ousts official paid large bonuses despite security lapses


Kelly Hogan Bonuses

Credit: House Oversight and Government Reform Committee

Under mounting pressure to fix long screening lines that have plagued airports nationwide for months, the troubled Transportation Security Administration today removed a senior official who oversees roughly 440 security checkpoints as part of a broader shake-up, according to an email sent by the agency’s administrator.

Kelly Hoggan, who was ousted from his post as the assistant administrator of the TSA’s Office of Security Operations, had drawn the ire of Congress for having received more than $90,000 in cash bonuses and awards despite known security weaknesses on his watch. He also was blamed in part for the agency’s use of so-called directed reassignments to silence internal whistleblowers and critics.

TSA Administrator Peter Neffenger announced the change in an email to senior managers and the aviation industry. The changes come less than two weeks after a May 12 House oversight committee hearing during which Neffenger defended Hoggan, saying he had no plans to fire him. Since that hearing, members of Congress have admonished the TSA to reduce the one- to two-hour delays airline passengers have faced around the country or new leadership would be necessary.

“To ensure we intensify our agency-wide focus on mission effectiveness, I have directed several leadership and operational changes at the national, regional and airport levels,” Neffenger wrote. “These adjustments will enable more focused leadership and screening operations at critical airports in the national transportation system.”

A TSA spokesman confirmed that the agency had announced management changes internally but did not comment further.

On Sunday, two prominent House members who appeared on television suggested that new TSA leadership... Read More >

Manager reportedly urinates on employee – and keeps his job

Matthew Clark was lying on the ground fixing a digger for a North Dakota oil field services company when a manager allegedly came up to him and, laughing, urinated on his legs.

Clark, of Filipino descent, already had suffered constant verbal abuse during his job as a “rat hole” laborer for American Casing & Equipment Inc., according to his 2015 court complaint. The white manager, shop foreman Jerome Funk, allegedly called him a “monkey,” “wetback,” “brown worm” and other profane racial epithets.

“People kid around, you know?” said American Casing’s owner, Steve Larvick, in an phone interview. “I wasn’t there, so I can’t say one way or another if he was just kidding around or if they were just kidding around with each other or what.”

This month, Larvick’s company settled a discrimination case brought by the Equal Employment Opportunity Commission. American Casing agreed to pay Clark $154,400 for backpay and damages and $95,600 for his legal fees. A judge still needs to approve the settlement.

“We got spanked pretty good,” Larvick said.

Clark’s attorney, Joshua Newville of Minneapolis, said he hopes the settlement sends a message to other North Dakota businesses.

“There’s certainly no shortage of this kind of conduct,” he said. “Too many employers up there are treating it like it’s the Wild Wild West.”

Clark, the worker who complained of racial slurs and getting peed on, got fired. American Casing retaliated against him, according to the EEOC, by terminating him two days after he complained to the company’s safety manager.

Funk, the shop foreman, claims he didn’t urinate on Clark, said Larvick. Larvick said he doesn’t know what happened. Funk got... Read More >

Derelict public housing cleared of squatters and holdout employee

Thirty police officers raided Richmond, California’s abandoned Hacienda public housing complex on Wednesday, evicting the city employee who refused to leave and clearing the building of squatters exposed last week in a story by Reveal from The Center for Investigative Reporting.

“It’s outrageous that it took all of this,” said Lt. Eric Smith with the Richmond Police Department. “But the eviction is complete, and we’ve secured the building.”

It took an unlawful detainer lawsuit, scores of neighbor complaints, and ultimately a court order to remove Marcus Moore, a former housing authority employee, from Hacienda. Moore was blamed for sparking a squatter crisis at the housing project that cost the city thousands of dollars in the process, based on utility records reviewed by Reveal.

At least 30 homeless people had broken into the 150-unit building in recent months, busting through the wrought-iron gates in front, ripping copper piping from the walls and leaving mounds of garbage and human waste in the already decrepit building.

After neighbors complained about the impending public health disaster, the housing authority promised to get the situation under control. But they failed in efforts to deter squatters by posting no trespassing signs and sealing the front gates. Even the security guards hired by the city acknowledged in emails that they were “totally ineffective” in stopping hordes of squatters from breaking into and trashing the building.

“The destruction that’s gone on in that complex is pretty bad,” Smith said. “This really prevents the city and the Richmond Housing Authority from providing affordable housing for people in need when it’s... Read More >

You might be eligible for overtime pay, but will your boss pay up?

The Obama administration’s new overtime rule could mean extra bucks for those extra hours at work – but only if your boss follows the rules. And historically, that doesn’t always happen.

“There’s a huge problem with compliance,” said D. Michael Hancock, former assistant administrator for the U.S. Department of Labor’s Wage and Hour Division. “It’s sort of the folk legend that, ‘I’m paid a salary, therefore I don’t get paid overtime.’ There’s a lot of ignorance out there among employers and employees.”

So listen up: Under the new regulations, salaried employees who make under $47,476 a year are entitled to be paid time and a half for anything over 40 hours a week. Until now, that threshold was $23,660 a year. If you’re an hourly worker, you already qualify for overtime. And if you make more than $47,476, you still might qualify, but it depends on your job duties.

The White House estimates this will benefit 4.2 million workers. They’ll either get a raise, so they’re above the $47,476 threshold; get paid overtime for extra work; or get their hours cut back. The Huffington Post’s Dave Jamieson explains further, calling it a “BFD.”

This should especially affect low-paid restaurant and store managers, said Hancock, now an attorney at Cohen Milstein Sellers & Toll in Washington.

“It’s not at all uncommon for them to earn a very low salary, $28,000 to $30,000 a year, and be expected to work fairly grueling hours,” he said. “People are just being worked to the bone, and either they’ll be paid more and continue to do that, or the employer is going to reduce their hours and those people will have more... Read More >

Tesla relied on cheap foreign labor

Tesla used foreign laborers from Eastern Europe, some of whom earned as little as $5 an hour, to build a paint shop at the company’s Fremont, California, plant, according to The Mercury News.

After reading the story, Tesla CEO Elon Musk vowed to investigate the mistreatment of the workers, who largely were from Croatia and Slovenia.

Among those workers was Gregor Lesnik, an electrician from Slovenia, who claimed in a lawsuit to have worked 10 hours a day, for at least six days a week. Eisenmann, a German company, hired Lesnik through ISM Vuzem, a subcontractor, to help build Tesla’s paint shop. Both Vuzem and Eisenmann helped Lesnik secure a temporary business visa known as a B-1, even though he was performing hands-on work, according to The Mercury News.

In May 2015, Lesnik plunged nearly three stories through the paint shop roof. He broke his legs and ribs, tore ligaments in his knee and suffered a concussion, according to The Mercury News.

Tesla initially denied responsibility for Lesnick, telling the Mercury News that it did not hire him.

But the company appeared to shift it’s stance after the article was published.

“Morally, we need to give Mr. Lesnik the benefit of the doubt and we need to take care of him,” Tesla said in a statement. “We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor,... Read More >

Here’s how Arizona residents are reacting to foreign water mining

First, they depleted their freshwater aquifers. Now, companies from the Middle East are pumping up limited water supplies in the Arizona desert and exporting it back to Saudi Arabia and elsewhere in the form of hay.

“Camels Don’t Fly, Deserts Don’t Bloom,” a new documentary produced by seven graduate students at Arizona State University, tracks both the business of exporting water from the Southwest desert and the angry reaction of local residents, who are fast seeing their water disappear. They interviewed me for their 15-minute film that expands on revelations I first reported about Middle Eastern companies mining the limited water in Arizona after similarly depleting aquifers in Saudi Arabia.

The ASU class is a partnership between the Walter Cronkite School of Journalism and Mass Communication and the School of Sustainability. Here is the documentary:

OSHA requires companies to report injuries

Thousands of employers in hazardous industries will be required to electronically submit injury and illness information that federal workplace safety officials will make available online, the U.S. Occupational Safety and Health Administration said Wednesday.

Currently, employers are required to log injuries and illnesses and the number of days injured workers spend away from work. But they are not required to send them to OSHA.

“Access to injury data will also help OSHA better target our compliance assistance and enforcement resources at establishments where workers are at greatest risk, and enable ‘big data’ researchers to apply their skills to making workplaces safer,” David Michaels, OSHA’s director, said in a statement.

Beginning in 2017, companies with at least 250 workers in industries such as construction and manufacturing must electronically submit to OSHA injury and illness logs. Smaller employers will be required to submit more limited data to the agency.

Under the new regulation, employers must have a procedure for workers to report injuries without fear of retaliation.

The new regulation is part of a push by President Barack Obama for labor reforms that would expand the availability of overtime pay and limit workers’ exposure to silica and other carcinogens.

Jennifer Gollan can be reached at Follow her on Twitter: @jennifergollan.

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