Feds Have Nearly 2000 Ongoing Investigations Into Stimulus Fund Fraud – Already Nearly 600 Convictions And Judgements Against Individuals And Companies

October 15, 2012

WASHINGTON, DC – The government’s chief spending watchdogs have already secured nearly 600 convictions and judgments against people and companies accused of misusing stimulus funds and have a whopping 1,900 investigations currently open into possible wrongdoing, officials say.

The wave of scrutiny more than three years after the American Recovery and Reinvestment Act was passed by Congress early in the Obama administration means the question of how money was managed early in the program is certain to extend well into the next year as many of the current investigations come to conclusion.

The Recovery Board charged with coordinating efforts among than inspectors generals at more than two dozen federal agencies that distributed stimulus money posted an item on its official blog last month claiming the total amount of money lost to fraud from the $840 billion stimulus program was a miniscule $11.1 million so far.

Vice President Joe Biden even made reference to the figure as he defended the stimulus program from attacks from Republican Rep. Paul Ryan during the vice presidential debate last Thursday. But that number only identifies money that is considered lost to fraud and does not include funds still under investigation or those recommended for reimbursement after audits identified misspending, officials said.

And a senior official familiar with the ongoing investigations by inspectors generals at federal agencies told the Washington Guardian the government expects the loss figure to balloon in coming months.

“These cases often take months or years, and we’ve got hundreds open right now across the government so that number is going to go up, probably by a large amount over the next 18 months,” the official said, speaking only on condition of anonymity because the official was not authorized to speak to the media.

Since the blog post a month ago that released the $11 million figure, several inspectors generals have announced new convictions, prosecutions or audits, a sign that some of the investigations are growing near decisions and actions.

For instance, the Energy Department inspector general reported last week it discovered the California energy commission collected two duplicate payments under a stimulus program that costs taxpayers $678,000 and and it recommended the money be repaid.

The Health and Human Services inspector general reported recently that a Louisiana group that received stimulus funds for Head Start programs for children had inappropriately spent nearly $1.2 million in federal funds to construct a new building that wasn’t approved by federal officials. The group is contesting the finding.

The Energy Department inspector general also warns in its most recent semiannual report that the Western Area Power Administration, which received $3.25 billion in borrowing authority to help build transmission lines under the stimulus law, is at risk of losing significant money on a transmission project for wind power in Montana that it funded.

“WAPA has significant financial exposure on the project … encountering significant delays and cost overruns,” the IG warned.

And a former superintendent of a Montana construction company was charged last month with making false statements regarding the quality of work his firm performed on federal bridge project in Idaho that was funded with $21.6 million in stimulus money. The company used “nonconforming anchor bolts” for parts of the construction, and tried to conceal it. The bolts had to be fixed, delaying the project.

The Recovery Board’s blog last month hinted at the scope of some of the alleged fraud currently being investigated by inspectors general at various agencies. “The 29 IGs with Recovery oversight responsibility have more than 1,900 investigations under way; convictions and judgments total 598,” it noted.

Many of the problems were uncovered by a special group of analysts charged specifically to look for irregularities in the massive stimulus program.

For instance, the analysts discovered that veterans seeking stimulus related benefits had claimed more than 16,000 dependents with Social Security numbers matching those of dead people, the blog noted

Separately, the same analysts found ore than 150 potential shell companies may have improperly received Recovery funds set aside for the Service-Disabled Veteran-Owned Small Business program.

And the analysts had identified more than 400 Recovery Act recipients of funds from 15 federal agencies had previously been terminated for default, most getting the money after falsely certifying they had not been terminated for default.

“We are continually helping agencies review sensitive procurement issues, including some with criminal potential sent to us by the Department of Justice and others in law enforcement,” the Recovery Board said in its blog post.

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Number Of Homeless Families In Washington DC Jumps 18%

October 15, 2012

WASHINGTON, DC — When Janice Coe, a homeless advocate in Loudoun County, learned through her prayer group that a young woman was sleeping in the New Carrollton Metro station with a toddler and a 2-month-old, she sprang into action.

Coe contacted the young woman and arranged for her to take the train to Virginia, where she put the little family up in a Comfort Suites hotel. Then Coe began calling shelters to see who could take them.

Despite several phone calls, she came up empty. Coe was shocked to learn that many of the local shelters that cater to families were full, including Good Shepherd Alliance, where Coe was once director of social services.

“I don’t know why nobody will take this girl in,” Coe said. “The baby still had a hospital bracelet on her wrist.”

In a region with seven of the 10 most affluent counties in the country, family homelessness is on the rise — straining services, filling shelters and forcing parents and their children to sleep in cars, parks, and bus and train stations. One mother recently bought $14 bus tickets to and from New York so she and her 2-year-old son would have a safe place to sleep — on the bus.

As cold weather descends on the region, the need will become increasingly acute, advocates say. That will be especially true in the District, where continued fallout from the recession and lack of affordable housing has contributed to an 18 percent increase in family homelessness this year over last.

The city has recently come under fire for turning away families seeking help as 118 overflow beds that were added last winter at D.C. General — the city’s main family homeless shelter — sit empty. A few places have recently opened up, but 500 families — some of whom are living with relatives or friends — are on a waiting list for housing.

“We’re hoping we can keep pace with those in the more dire situations,” said David A. Berns, director of the city’s Department of Human Services.

Berns said the city is trying to keep the overflow beds open for hypothermia season, which begins Nov. 1. The city is mandated by law to shelter its residents if the temperature falls below freezing. The agency does not have the money to operate the extra beds, Berns said.

D.C. Council member Jim Graham (D-Ward 1), who has been critical of the agency’s handling of the crisis, wonders why families are being denied help when the District has a $140 million budget surplus.

“Never did I imagine that beds would be kept vacant,” Graham said. “It’s very upsetting.”

Family homelessness around the Washington region has increased 23 percent since the recession began — though the total number of homeless people stayed fairly steady at around 11,800, according to the Metropolitan Washington Council of Governments, which did its annual “point-in-time” survey of the homeless in January. This included some 3,388 homeless children, the study showed.

“These families are the most desperate because they have young children and have nowhere to go,” said Nassim Moshiree, a lawyer for the Washington Legal Clinic for the Homeless.

Moshiree spent a good part of the day Friday trying to help a homeless mother of three who Thursday night slept with her children on the steps of a church in Northeast after unsuccessfully asking the city for help. After Moshiree intervened, the city found space for them late Friday.

“It’s a complete abomination,” said Antonia Fasanelli, executive director for the Homeless Persons Representation Project, a Maryland legal services and advocacy group based in Baltimore. She noted that in Baltimore — where homeless families from D.C. sometimes end up — three family shelters have been closed in the past five years, for a loss of about 100 shelter beds. “There is just not enough space.”

Throughout Maryland, Fasanelli said, 38 percent of homeless families are living on the streets. That’s the seventh-highest rate of unsheltered families in the country, according to a Department of Housing and Urban Development study on the homeless released in December.

At the Comfort Suites off Route 7 on Thursday, Helen Newsome, 25, fed her 2-year-old son, Cameron, an orange from the breakfast buffet as her infant daughter Isabella slept on the bed beside her.

Newsome said she became homeless this summer after she was evicted from her apartment in Prince George’s County. Since then, she and her children have slept most nights on a bench or the hard tile floor at the New Carrollton Metro, she said. Although she called several area shelters before she was evicted, she said she could never find one with room.

“I’m not asking for a whole room for myself, as long as I have someplace to sleep, somewhere soft,” Newsome said.

On Thursday, Coe took Newsome to the Loudoun County Department of Family Services, where a social worker helped her sign up for food stamps and other aid and said she would try and help her find a subsidized apartment. Finally, Newsome said she could see an end to her ordeal.

“They’re leaning on me,” she said, gesturing to her kids. “I’m their only hope. It’s okay. Everybody goes through something, some people worse than others.”

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Study Finds That 100 Largest US Public Pensions Underfunded By About $1.2 TRILLION

October 15, 2012

US – The largest 100 public pension funds have around $1.2 trillion of unfunded liabilities, about $300 billion above the nearly $900 billion they reported themselves, according to a new actuarial study to be released on Monday.

The pension systems reported a median funding level of 75.1 percent. The study by the actuarial firm Milliman, which used different ways to value assets and measure liabilities, finds an aggregate level of funding of 67.8 percent.

But Milliman, one of the world largest actuarial firms took a close look at U.S. public pension funding for the first time, and said the multibillion-dollar difference was good news.

Rebecca Sielman, the report’s author, said results should reassure the public that America’s public pensions in general are accurately reporting their funding shortfalls.

The difference between what public pensions across the United States have reported and what Milliman found wasn’t significant, Sielman said. She noted that a relatively small change in the way the figures are calculated could lead to seemingly outsized results because the funds are so large.

“The numbers really didn’t change that much,” she said. “It really didn’t move the needle.”

Both the pension funds’ reported results and Milliman’s findings fell within the range of previous estimates from other studies of the total size of the public pension shortfall in the United States.

With the study, Milliman, stepped into the debate about whether public pensions are underreporting the size of their liabilities.

That hot-button issue revolves around how much money public employers – and, by extension, taxpayers – will have to contribute to cover future payouts for member benefits. It is a key issue at a time of dwindling revenues and tighter budgets for states and local governments.

Pension funds get money from the returns on their assets and from members’ contributions. States and cities also pay into the funds, but their contributions are discounted based on how much money they think their investments will make over time.

The 100 funds Milliman studied used a median rate of return for their investments of 8 percent. But the recession slashed into the market, dropping actual median returns to just 3.2 percent for the last five years, according to data from Callan Associates.

The difference has prompted critics to claim that the funds are underreporting their unfunded liabilities, or the gap between what they’ve promised to pay retirees in the future and what they’ll actually have on hand to cover the benefits.

Critics have called for public pensions to reduce their assumed rates of return to as little as 5 percent or less, which would cause unfunded liabilities to soar and likely leave taxpayers having to cover the difference.

But without the change, critics say, future generations will be left to deal with a financial bomb.

FINDINGS WITHIN RANGE OF SIMILAR STUDIES

Other studies have tried to measure the overall size of the problem. The Pew Center on the States found that the shortfall is about $766 billion. Moody’s Investors Service said in July that the collective gap would be $2.2 trillion if funds used a 5.5 percent discount rate.

Milliman has studied the health of the 100 largest private pension funds for about a decade. But this is its first study of public plans, conducted specifically to determine whether the systems were using unrealistically high return-rate assumptions as the critics claimed.

“I thought that we would find fairly pervasive use of interest rates that are high relative to current market consensus about future investment returns, and we didn’t find that,” Sielman said.

The firm, which has done actuarial work for nearly all of the U.S. states in the past, examined each individual fund in the study, using market valuations instead of smoothed valuations to measure assets and recalibrating liabilities based on Milliman’s own benchmarks of expected long-term returns.

The firm found that the median discount rate should actually be 7.65 percent, rather than the 8 percent median rate the funds used in aggregate.

A third of the plans were using lower rates than they needed to, Milliman found, according to Sielman.

A small number of plans seriously underreported their liabilities because they use rates that are too high, Milliman found.

Milliman’s study did not name the specific plans that underreported their liabilities. Sielman said the firm was not releasing its results for individual plans.

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Feds Investigating Congressman Jesse Jackson Jr’s Finances After His Mental Meltdown – Son Of Media Whore Jesse Jackson

October 15, 2012

WASHINGTON, DC – The snowballing troubles of Jesse Jackson Jr. took a new turn Friday with the revelation that federal investigators have launched a probe into “suspicious activity” in the South Shore congessman’s finances.

Focusing on a completely new area of scrutiny for the son of the famed civil rights leader, the investigation is not related to former Gov. Rod Blagojevich’s attempted sale of a U.S. Senate seat, a scandal that has ensnared Jackson in the past, sources told the Chicago Sun-Times.

Rather, the probe — based in the Washington, D.C., FBI field office —is focusing on “suspicious activity” involving the congressman’s finances related to his House seat and the possibility of inappropriate expenditures, the sources said.

The probe was active in the weeks prior to Jackson taking a leave from his U.S. House seat on June 10, a leave his office ultimately attributed to his need for treatment for bipolar disorder, the sources said.

It was unclear whether the investigation involved the congressman’s official House spending account or his campaign finance account. But one source said it was an account monitored by Congress.

All members of the U.S. House receive an allowance to operate offices in Washington and in their districts. The allowances for rank-and-file members ranged from $1.4 million to $2 million in 2010, according to the House website.

Jackson’s congressional spokesman Frank Watkins said he was unaware of any investigation, had no comment and had no immediate way to get a hold of the congressman.

One of Jackson’s attorney’s, Paul Langer, repeatedly said “no comment,” when asked whether Jackson was under investigation related to his finances.

When asked if he was still representing Jackson or if the congressman had retained another attorney, Langer said:

“I can’t even comment on that.”

News of the probe — first disclosed by the Sun-Times — comes as questions increasingly swirl around Jackson’s absence from not only his official duties in Washington, but the campaign trail as the Nov. 6 election nears.

Citing exhaustion, Jackson, 47, stopped working, according to his staff, on June 10. His staff did not make that known until two weeks later.

He went to a clinic in Arizona then to the Mayo Clinic, which released a statement saying he was being treated for a bipolar disorder. Jackson is up for re-election Nov. 6 but has not campaigned since he won the Democratic primary in March.

The Jacksons put their Washington, D.C., home on the market last month at a price of $2.5 million. A campaign spokesman said at the time that the home was put on the market to pay for mounting medical bills. They subsequently took it off the market, saying it was a security issue.

Jackson came under scrutiny after one of his campaign donors approached Blagojevich with a pay-to-play offer regarding the appointment to President Barack Obama’s vacant Senate seat. Jackson has denied any wrongdoing, but that revelation sparked an investigation by a House ethics committee.

Jackson was first elected to Congress in 1995 and boasted of almost never missing a vote until he vanished from public view in June.

That’s when his office announced that he was taking off work to undergo medical treatment for “exhaustion.” Under pressure to reveal more details of his condition from even fellow politicians, Jackson’s office gradually dribbled out more extensive explanations over the course of the summer.

He finally surfaced nearly a month later when Sun-Times columnist Michael Sneed reported he was being treated at the Mayo Clinic in Rochester, Minn. The clinic revealed Jackson was being treated for Bipolar II depression, “a treatable condition that affects parts of the brain controlling emotion, thought and drive and is most likely caused by a complex set of genetic and environmental factors.”

Jackson returned to his home in Washington, D.C., early last month, but he still has not returned to work. His wife, Ald. Sandi Jackson (7th), recently said he may not return until after the November election, when he is up for another two-year term in the U.S. House.

“I can’t speak to when that’s going to happen or how that’s going to happen,” she said. “I can only say that I will continue to rely on [doctors’] expertise. I would only ask for patience.”

The couple has been loathe to speak to the media.

During a fund-raising event last month, Sandi Jackson called reporters waiting to speak to her outside “jackals.” She went to great lengths to avoid the media that night, waiting inside the darkened, otherwise empty restaurant until the last camera departed before she would exit.

The congressman once was among the more extroverted Chicago politicians, but he has been far more reclusive since his name was first linked to the scandal surrounding Blagojevich almost four years ago.

Jackson friend and campaign contributor Raghuveer Nayak told authorities he approached the then-governor with a lucrative fund-raising offer that could have led to Blagojevich’s appointment of Jackson to Obama’s old Senate seat.

Jackson has denied that version of events, and he was never charged with wrongdoing.

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Riots To Follow US Election In November? Obama Supporters Threatening To Riot If He Loses

October 14, 2012

WASHINGTON, DC – Will the most divisive campaign in modern American history culminate in massive riots in our major cities? Right now, supporters of Barack Obama and supporters of Mitt Romney are both pinning all of their hopes on a victory on November 6th. The race for the presidency is extremely tight, and obviously the side that loses is going to be extremely disappointed when the election results are finalized. But could this actually lead to violence? Could we actually see rioting in communities all over America? Well, the conditions are certainly ripe for it.

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Election Junk Mail Saves US Postal Service From Insolvency – Mountains Of Political Crap Gives Near Bankrupt USPS A Month Of Breathing Room

October 14, 2012

WASHINGTON, DC – The 2012 election season couldn’t have come at a better time for the U.S. Postal Service.

While still low on cash, the postal service has enough to avoid insolvency this month, thanks in large part to the mountains of political junk mail and the influx of Super PACs paying top postage rates.

Federal candidates, political parties and special interest groups are mailing out more fliers and postcards via the postal service in 2012 than in previous election cycles. Spending topped $28.9 million through the end of August, compared to $27.9 million for the entire election cycle in 2008, according to the Center for Responsive Politics.

The postal service is on track to surpass an original estimate of $285 million, which includes the haul from local races nationwide, said Cliff Rucker, vice president of USPS sales.

It’s still not enough to save the postal service. But it’s enough to get the agency past an October cash crunch that the postal service had warned about.

“Our liquidity situation remains serious,” USPS spokesman David Partenheimer said. “We do expect election mail and the current holiday mailing season to help us get through this month’s low point in our cash flow.”

Related: Postal Service increasing prices

The USPS has been teetering on the brink of bankruptcy. A key reason was a 2006 law that required the postal service to make annual payments of about $5.5 billion for 10 years to pay for future retiree health benefits.

The other big issue has been the dramatic drop in regular mail that most consumers use because the rise of technology has enabled electronic bill pay and instant communications like email, skype and texting.

In the three months that ended June 30, the agency reported net losses of $5.2 billion.

Congress has been grappling with different bills to save the postal service, but no consensus has emerged. None are expected before next year. By spring, the postal service could again face the threat of insolvency.

The election season has been a bright spot. Political consultants, who send direct mail, are predicting the 2012 political season to be the best yet for the postal service.

“It’s a presidential year, there’s more money in the system, there’s certainly more direct mail … than there was two years ago,” said Chris Cooper, managing director at SKD Knickerbocker, a political consulting firm that works with Democrats.

Roughly 15% of campaign spending goes toward political junk mail, according to the Campaign Media Analysis Group. If $2.5 billion is spent on the 2012 elections, as the the Center for Responsive Politics has estimated, it could push the tally as high as $375 million.

The postal service is more conservative. Spokeswoman Patricia Licata says the USPS is hoping to meet or top its political haul from 2010, which was about $338 million.

One major reason for the large haul is the influx of Super PACs, the independent groups that can raise and spend unlimited amounts of cash on campaigns. Many Super PACs are funded with cash from large corporations and small groups of wealthy individuals.

The Super PACs are also spending more because they don’t qualify for postal service discounts of about 8 cents to 12 cents apiece reserved for candidates and political parties. Those can add up.

Political groups also prefer direct mail, because they can “micro-target” certain geographic areas for specific, often negative, messages about opposing candidates.

“Much of the political mail is coming from the Super PACs, because you can send nastier messages about candidates with direct mail than you can in a television ad,” said Alan Robinson, a postal policy consultant with Direct Communications Group.

So far, Democrats are outspending Republicans using the postal service — $17.8 million vs $10.2 million — according to an analysis of campaign expenditures by the Center for Responsive Politics.

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Broke: Annual Social Security Increase May Be Lowest Since 1975 – Government Sees Different Inflation Levels Than People Who Actually Buy Food And Pay Bills

October 14, 2012

WASHINGTON, DC – Social Security recipients shouldn’t expect a big increase in monthly benefits come January.

Preliminary figures show the annual benefit boost will be between 1 percent and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975.

Monthly benefits for retired workers now average $1,237, meaning the typical retiree can expect a raise of between $12 and $24 a month.

The size of the increase will be made official Tuesday, when the government releases inflation figures for September. The announcement is unlikely to please a big block of voters — 56 million people get benefits — just three weeks before elections for president and Congress.

The cost-of-living adjustment, or COLA, is tied to a government measure of inflation adopted by Congress in the 1970s. It shows that consumer prices have gone up by less than 2 percent in the past year.

“Basically, for the past 12 months, prices did not go up as rapidly as they did the year before,” said Polina Vlasenko, an economist at the American Institute for Economic Research, based in Great Barrington, Mass.
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