by Julia Angwin and Jeff Larson

California regulators said they have required Nationwide and USAA to adjust their auto insurance rates as a result of a report by ProPublica and Consumer Reports that many minority neighborhoods were paying more than white areas with the same risk.

The regulators said their review confirmed our finding that linked the pricing disparities to incorrect applications of a provision in California law. The statute allows insurers to cluster neighboring zip codes together into a single rating territory.

“The companies were making some subjective determinations,” as a basis for calculating rates in some zip codes, said Ken Allen, deputy commissioner of the rate regulation branch of the California Department of Insurance. Nationwide and USAA are two of the 10 largest auto insurance providers in the country by market share.

The department said that the adjustments would largely erase the racial disparities we found in the two companies’ pricing. According to our analysis, USAA charged 18 percent more on average, and Nationwide 14 percent more, in poor, minority neighborhoods than in whiter neighborhoods with similarly high accident costs. Allen said it’s not possible to quantify how these adjustments would affect customers’ premiums because the revisions are too complex. In addition, they’re taking effect at the same time as an overall rate increase.

Allen said the department is now requiring more justification from insurers for their measurements of risk in the poor, minority neighborhoods that California designates as “underserved” for auto coverage.

California’s action marks a rare regulatory rebuke of the insurance industry for its longtime practice of charging higher premiums to drivers living in predominantly minority-urban neighborhoods than to drivers with similar safety records living in majority-white neighborhoods. Insurers have traditionally defended their pricing by saying that the risk is greater in those neighborhoods, even for motorists who have never had an accident. 

The department’s investigation was prompted by a ProPublica and Consumer Reports analysis published in April of car insurance premiums in California, Texas, Missouri and Illinois. ProPublica found that some major insurers were charging minority neighborhoods rates as much as 30 percent more than in other areas with similar accident costs.

The disparities were not as widespread in California, which is a highly regulated insurance market, as in the other states. Even so, within California, we found that units of Nationwide, USAA and Liberty Mutual were charging prices in risky minority neighborhoods that were more than 10 percent above similar risky zip codes where more residents were white.

California regulators said they approved rate increases from Nationwide and USAA last week that contained corrections to the disparities revealed by ProPublica. The regulators said they are still investigating the proposed rates of Liberty Mutual, which had the largest disparities in ProPublica’s analysis. Liberty Mutual spokesman Glenn Greenberg said the company is cooperating with the investigation.

The rate changes will only affect premiums charged from now on. The insurance commission chose not to look into whether, or the extent to which, drivers in California’s underserved neighborhoods may have been mischarged in the past.

Department spokeswoman Nancy Kincaid said there was no need to examine past rates. “After hundreds of hours of additional analysis, department actuaries and analysts did not find any indication the ProPublica analysis revealed valid legal issues,” she said.

Some consumer advocates disagreed with this approach. “We think the commissioner should go back and seek refunds for people who were covertly overcharged by the discriminatory practices that ProPublica uncovered,” said Harvey Rosenfield, founder of Consumer Watchdog. Consumers Union, the policy and action arm of Consumer Reports, has also sent a letter to the department, urging it to examine if any rates were calculated improperly in the past.

The insurance commissions in Missouri, Texas and Illinois did not respond to questions about whether they had taken any actions to address the disparities highlighted in ProPublica’s article. A spokesman for the Illinois Department of Insurance said in a statement that it urges consumers to shop around for the best price on automobile insurance.

ProPublica and Consumer reports analyzed more than 100,000 premiums charged for liability insurance — the combination of bodily injury and property damage that represents the minimum coverage drivers buy in each of the states. To equalize driver-related variables such as age and accident history, we limited our study to one type of customer: a 30-year-old woman with a safe driving record. We then compared those premiums, which were provided by Quadrant Information Services, to the average amounts paid out by insurers for liability claims in each zip code.

When ProPublica published its investigation, the California Department of Insurance criticized the article’s approach and findings, saying that “the study’s flawed methodology results in a flawed conclusion” that some insurers discriminate in rate-setting. Nevertheless, the department subsequently used ProPublica’s methodology as a basis for developing a new way to analyze rate filings. It used its new method to examine the recent Nationwide and USAA rate filings.

In California, when insurers set rates for sparsely populated rural zip codes, which tend to be relatively white, they are allowed to consider risk in contiguous zip codes of their own choosing. In some cases, these clusters led higher risk zip codes to be assigned a lower risk — and therefore, lower premium prices — than the state’s comprehensive analysis of accident costs warranted. The use of contiguous zip codes is also common in Missouri, Texas and Illinois but is less regulated there than in California.

In an interview, deputy insurance commissioner Allen said that Nationwide had made a “procedural error” in its use of the contiguous zip codes provision, and that the regulators required the company to rely more heavily on the state’s risk estimates in those areas.

Nationwide acknowledged that the state required a rate adjustment, but disputed the association with ProPublica’s reporting. “It is inaccurate and misleading for anyone to conclude or imply any connection between Nationwide’s recently approved rating plan and ProPublica’s unsubstantiated findings,” spokesman Eric Hardgrove said. He added that Nationwide is committed to nondiscriminatory rates and “disagrees with any assertion to the contrary.”

On page 2,025 of Nationwide’s most recent California insurance filing, the company disclosed that it provided premium quotes for the “ProPublica risk example” to the California insurance commission.

The improper use of the contiguous zip codes provision was also a factor in the USAA filing, Allen said in an interview. “USAA had failed to apply the updated industry wide factors where they had insufficient data,” he said.

USAA spokesman Roger Wildermuth acknowledged when the company filed its rate plan in August 2016, it did not use California’s most up-to-date risk numbers, which were published eight months earlier in December 2015. The reason, he said, was that the insurer had already “completed months of calculations prior to that update.”

He noted that the department approved that filing, including USAA’s decision to rely on its own data, and has now approved the company’s revised calculations using updated data.

“The department has consistently validated our approach to this rate filing,” he said.

California officials said they will more closely police the clustering algorithms, and their impact on poor and minority neighborhoods, as they review future rate filing applications.

“We will use this analysis going forward,” said Joel Laucher, chief deputy commissioner of the department. “We don’t need to change any rules to do that.” 

by George Joseph

In July, a sweltering tractor trailer ride in Texas became the latest harrowing example of the perils of crossing the U.S. border illegally. From the hospital, one survivor told authorities that he had paid smugglers to get him across the Rio Grande and then cram him on a northbound truck with what he guessed were nearly 100 people. The survivor managed to keep breathing in the pitch black trailer without food or water. But when the doors were opened in a San Antonio Walmart parking lot, eight migrants were dead, their bodies “lying on the floor like meat,” the truck’s driver subsequently said. Another two expired later.

Those 10 deaths are among the 255 known migrant fatalities recorded by the International Organization for Migration in the first eight months of 2017. That’s up from 240 in the same period last year. Experts aren’t certain what’s causing the recent increase; verifying numbers is inherently difficult when it comes to an endeavor whose very mission is to avoid detection by the authorities.

However, academics and the U.S. Border Patrol largely agree on the long-term trends, which reveal a clear pattern. Between 1998 and 2016, the number of unauthorized border-crossers who were captured — which is viewed as the best proxy for the rate of illegal crossings — has plunged 70 percent in the southwest U.S. border region, according to data from the Border Patrol. During that same period, yearly immigrant deaths have risen some 20 percent. (The increase in death rate, which was steady for many years, was interrupted for several years by a temporary surge in migrants from Central America, which we’ll explain, only to resume its upward march.)

The result is a significant increase in the chances of dying in an illegal border crossing over the past two decades. A key cause: efforts by the Border Patrol to push migrants away from easy-to-cross, hard-to-police urban corridors and into barren, isolated terrain. That’s the conclusion of “Why Border Enforcement Backfired,” a 2016 paper whose lead author, Douglas Massey, is a professor at Princeton’s Woodrow Wilson School of Public and International Affairs and the cofounder of the Mexican Migration Project. A spokesman for the Border Patrol echoed the view that the change in policy contributed to the increase in deaths (but disagreed that the policy backfired).

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If somebody had been trying to slip across the border through Texas in the early ’90s, he might have just forded a narrow canal or hopped a chain-link fence from Juarez into El Paso. Back then, the vast majority of unauthorized crossings followed easy routes into big cities like El Paso or San Diego, where illegal immigrants could, to the frustration of authorities, quickly blend into the local population. Border deaths were relatively rare, said Daniel Martinez, an associate professor of sociology at the University of Arizona and a researcher on a project called the Migrant Border Crossing Study.

Things began to change when the Clinton administration, seeking to burnish its tough-on-illegal-immigrant credentials, swelled the Border Patrol’s ranks and adopted a strategy known as Prevention Through Deterrence. The initiative, adopted in 1994, clamped down on popular crossing routes through San Diego and El Paso.

The document laying out the strategy at the time predicted that “with traditional entry and smuggling routes disrupted, illegal traffic will be deterred, or forced over more hostile terrain, less suited for crossing and more suited for enforcement.” Migrant flow would shift to sectors in South Texas and Tucson, it anticipated, while acknowledging that “illegal entrants crossing through remote, uninhabited expanses of land and sea along the border can find themselves in mortal danger.”

That’s precisely what happened when the administration implemented Prevention Through Deterrence. Starting in the mid-’90s, the Border Patrol effectively sealed off the well-traveled crossing paths of the San Diego and El Paso Border Patrol sectors. From 1998 to 2008, deaths in these sectors — which had hovered between 20 and 40 annually — tailed off, eventually dropping to a handful in recent years.

Tens of thousands of migrants began shifting to lengthier, more dangerous, unpopulated routes, according to experts. The location of many fatalities shifted accordingly.

Arizona became a hotbed for migrant crossings and deaths in the first years of the new millennium. In the Tucson sector, which stretches over 262 miles of border, much of it desert terrain, migrant fatalities jumped from 11 in 1998 to a peak of 251 in 2010.

But as the Border Patrol deployed more resources to the Tucson sector, migrants targeted other entry points and deaths began declining, to 84 last year. (As the sector became more heavily patrolled, the percentage of migrants whose cause of death was overheating and other environmental factors rose, according to University of Arizona researchers who examined autopsy data.)

“It’s like a balloon: If you cinch down on the left and the right, it’ll go elsewhere,” said Robert Daniels, a spokesman for the Border Patrol. “So after we cinched down on San Diego and El Paso, that led flow to Arizona. Then, as Arizona was cinched down, that led to flow further south in Texas.”

The latter change is visible in recent years in two Texas sectors. The relatively small Laredo area has seen deaths rise from 20 in 1998 to 68 last year. Meanwhile, in the Rio Grande Valley sector, which includes 320 miles of border and some formidable river crossing points, annual deaths rose from 26 in 1998, peaked at 156 in 2013 then tailed off to 130 last year. The Rio Grande is now the most common site of migrant deaths, according to Border Patrol data. Since January 2009, the remains of more than 550 migrants have been found in just one jurisdiction, Brooks County, where migrants attempting to bypass Border Patrol’s inland checkpoints hike for days through dry ranch land, often getting lost and dehydrated in the flat, arid brush.

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When it implemented the Prevention Through Deterrence policy, the Border Patrol did not anticipate so many people would attempt to cross the deadly terrains left to them, said Doris Meissner, the head of the Immigration and Naturalization Service who signed off on the strategy in 1994. “Border Patrol believed the hostile conditions [in] the really new geographies that had not been typical crossing areas would create their own built-in deterrence, and that didn’t turn out to be true,” said Meissner, now a senior fellow at the Migration Policy Institute. “The shift to those areas happened more quickly than the Border Patrol realized that it would.”

The Border Patrol’s Daniels agreed that the extreme climates of migrants’ crossing paths were the primary cause of the increased deaths, but also blamed smugglers. “We saw the smugglers taking the aliens to more remote locations to cross with the thought that there would be no Border Patrol,” said Daniels, who began his career in Tucson in 1994. “I haven’t heard of any theories for this outside of the extreme weather.” Daniels noted that other possible factors, like shootings and general border violence, could not explain the deaths.

Once it became clear that environmental deterrence was not stopping migrants, however, authorities did not reverse their strategy. “That always has always been one of the major criticisms,” said Meissner. To make up for the increased risks, she said, the Border Patrol trained agents for emergency response operations and deployed agents, paramedics, helicopters and surveillance equipment to hazardous areas.

These rescue effort have saved lives, but they haven’t brought migrant crossing death rates back down to levels seen in the 1990s. The Prevention Through Deterrence strategy “directly led to the exponential increase in deaths in Southern Arizona,” according to Martinez, the researcher on the Migrant Border Crossing Study. “The data speaks for itself: There’s a direct correlation between the border buildup and the deaths. It’s undeniable.”

As this shift took place, border crossings dropped regularly, and from 2012 to 2014, so did migrant death rates. But the latter figures were skewed by a surge of migrants from Central American countries at the same time that illegal entries by Mexicans dipped. Many of the Central Americans, fleeing violence in their countries, intentionally placed themselves in U.S. custody in an attempt to seek asylum. Since the migrant death rate is defined as fatalities as a percentage of apprehensions, the spike in apprehensions had the effect of lowering death rates.

Since 2014, however, those rates have been on the rise again. Some of the rise in deaths in 2017 may have to do with South Texas’ unique environmental factors, wrote Julia Black, project coordinator for the International Organization for Migration’s Missing Migrants Project, in an email to ProPublica. “It is not yet clear why the migrant death rate has increased this year,” she said. “Some part of this can be attributed to an increase in rainfall, which has led to more deaths in the Rio Grande, but it cannot explain the rise in deaths in e.g. the Arizona desert.”

Martinez argued that it is more important to look at the longer-term shifts than trying to identify one or two elements. People have been forced to take ever more demanding and precarious routes.

“We’re seeing more and more remains being recovered on trails at higher elevations than ever seen before,” said Martinez. “Rather than crossing for a couple hours, people cross for days, pushed farther away from the pick-up points, so they literally just can’t carry enough water anymore.”

by Joaquin Sapien

For five days, ProPublica reporter Megan Rose hunkered down in a very small, very hot conference room in Las Vegas, surrounded by boxes brimming with legal records. She took notes and scanned documents one page at a time. The grind of investigative reporting, personified.

But in those pages lay a big payoff: a story of murder, misadventure and injustice.

Listen to the Podcast

Rose had come searching for details about the remarkable case of Fred Steese, a drifter wrongfully convicted of killing a circus performer in 1992. It took nearly 20 years for Steese to get out of prison, even though prosecutors had evidence showing he wasn’t guilty, and that he was likely in another state when the murder happened.

In October 2012, a judge declared Steese innocent. But Steese wound up pleading guilty nonetheless through something called the Alford plea, an increasingly common, perplexing arrangement where a defendant maintains his innocence, but accepts the status of a convicted felon, and forfeits the right to sue.

Rose put it all together in “Kafka in Vegas,” which ran in the May 2017 issue of Vanity Fair.

“If you had been a TV writer, somebody — your producer, director — would be like, ‘This is too outlandish. You have to tone it down,’” Rose said, recalling the records from Steese’s original trial.

On today’s episode of The Breakthrough, she tells us all about it: how she first met Steese in the parking lot of a rundown Vegas apartment complex, how she persuaded veteran prosecutors to talk to her about a high-profile, highly sensitive case, and, of course, what it was like to be in that conference room.

“God, there was just so much,” Rose said. “It’s hard to express just how many pieces of paper that I was going through.”

Tune into The Breakthrough, the podcast from ProPublica where investigative reporters reveal how they nailed their biggest stories.

by Julia Angwin

On Thursday, Facebook Chief Executive Mark Zuckerberg announced several steps to make political ads on the world’s largest social network more transparent. The changes follow Facebook’s acknowledgment earlier this month that $100,000 worth of political ads were placed during the 2016 election cycle by “inauthentic accounts” linked to Russia.

The changes also follow ProPublica’s launch of a crowdsourcing effort earlier this month to collect political advertising from Facebook. Our goal was to ensure that political ads on Facebook, which until now have largely avoided scrutiny, receive the same level of fact-checking by journalists, advocacy groups and political opponents as do print, broadcast and radio political ads. We hope to have some results to share soon.

In the meantime, here’s what we do and don’t know about how Facebook’s changes could play out.

How does Facebook plan to increase disclosure of funders of political ads?

In his statement, Zuckerberg said that Facebook will start requiring political advertisers to disclose “which page paid for an ad.”

This is a reversal for Facebook. In 2011, the company argued to the Federal Election Commission that it would be “inconvenient and impracticable” to include disclaimers in political ads because the ads are so small in size.

While the commission was too divided to make a decision on Facebook’s request for an advisory ruling, the deadlock effectively allowed the company to continue omitting disclosures. (The commission has just reopened discussion of whether to require disclosure for internet advertising).

Now Facebook appears to have dropped its objections to adding disclosures. However, the problem with Facebook’s plan of only revealing which page purchased the ad is that the source of the money behind the page is not always clear.

What is Facebook doing to make political ads more transparent to the public?

Zuckerberg also said that Facebook will start to require political advertisers to place on their pages all the ads they are “currently running to any audience on Facebook.”

This requirement could mean the end of the so-called “dark posts” on Facebook — political ads whose origins were not easily traced. Now, theoretically, each Facebook political ad would be associated with and published on a Facebook page — either for candidates, political action committees or interest groups.

However, the word “currently” suggests that such disclosure could be fleeting. After all, ads can run on Facebook for as little as a few minutes or a few hours. And since campaigns can run dozens, hundreds or even thousands of variations of a single ad — to test which one gets the best response — it will be interesting to see whether and how they manage to display all those ads on their pages simultaneously.

“It would require a lot of vigilance on the part of users and voters to be on those pages at the exact time” that campaigns posted all of their ads, said Brendan Fischer, a lawyer at the Campaign Legal Center, a campaign finance reform watchdog group.

How will Facebook decide which ads are political?

It’s not clear how Facebook will decide which ads are political and which aren’t. There are several existing definitions they could choose from.

The Federal Communications Commission defines political advertising as anything that “communicates a message relating to any political matter of national importance,” but those rules only apply to television and radio broadcasters. FCC rules require extensive disclosure, including the amount paid for the ads, the audiences targeted and how many times the ads run.

The Federal Election Commission has traditionally defined two major types of campaign ads. “Independent expenditures” are ads that expressly advocate the election or defeat of a “clearly identified candidate.” A slightly broader definition, “electioneering communications,” encompasses so-called “issue ads” that mention a candidate but may not directly advocate for his or her election or defeat.

The FEC only requires spending on electioneering ads to be disclosed in the 60 days leading up to a general election or the 30 days leading up to a primary election. And the electioneering communications rule does not apply to online advertising.

Of course, Facebook doesn’t have to choose of any of the existing definitions of political advertising. It could do what it did with hate speech — and make up its own rules.

How will Facebook catch future political ads secretly placed by foreigners?

The law prohibits a foreign national from making any contribution or expenditure in any U.S. election. That means that Russians who bought the ads may have broken the law, but it also means that any American who “knowingly provided substantial assistance” may also have broken the law.

Last week, when Facebook disclosed the Russian ad purchase, the company said it was increasing its technical efforts to identify fake and inauthentic pages and to prevent them from running ads.

Zuckerberg said the company would “strengthen our ad review process for political ads” but didn’t specify exactly how. (Separately, Facebook Chief Operating Officer Sheryl Sandberg said this week that the company is adding more human review to its ad-buying categories, after ProPublica revealed that it allowed advertisers to target ads toward “Jew haters.”)

Zuckerberg also said Facebook will work with other tech companies and governments to share information about online risks during elections.

Will ProPublica continue crowd-sourcing Facebook political ads?

Yes, we plan to keep using our tool to monitor political advertising. This month, we worked with news outlets in Germany — Spiegel Online, Süddeutsche Zeitung and Tagesschau — to collect more than 600 political ads during the parliamentary elections.

We believe there is value to creating a permanent database of political ads that can be inspected by the public, and we intend to track whether Facebook lives up to its promises. If you want to help us, download our tool for Firefox or Chrome web browsers.

by Lauren Kirchner

ProPublica is asking a federal court for access to the source code for New York City’s proprietary DNA software, which some scientists and defense lawyers contend may be inaccurate in matching a defendant to a complex sample of genetic material. Known as a pioneer in analyzing the most difficult evidence from crime scenes, the New York City medical examiner’s office has processed DNA samples supplied not only by local police, but also by about 50 jurisdictions nationwide.

Employees developed the disputed software — known as the Forensic Statistical Tool, or FST — to analyze evidence consisting of multiple people’s DNA and determine the likelihood that a suspect’s DNA was present. According to the medical examiner’s office, FST was used in about 1,350 criminal cases from 2011 until this year, when it was phased out. The office has long kept the source code secret, successfully opposing requests in court by defense attorneys to examine it.

A motion ProPublica filed today in the Southern District of New York asks Judge Valerie Caproni to lift a protective order she had issued in a recent case, U.S. v. Kevin Johnson. While she became the first judge to require the lab to turn over the source code to the defense, her order barred parties in the case from sharing or discussing it.

As reported earlier this month by ProPublica and The New York Times, defense expert Nathaniel Adams, a computer scientist and an engineer at a private forensics consulting firm in Ohio, reviewed the code and found that “the correctness of the behavior of the FST software should be seriously questioned.” However, the versions of Adams’ affidavits available to the public were heavily redacted and the code itself remains shielded by the judge’s order. The medical examiner’s office characterized Adams’ criticisms as stylistic rather than substantive and said FST’s calculations were reliable.

FST played a key role in Johnson’s case. He was arrested after a police search found two guns in his ex-girlfriend’s apartment, where he sometimes stayed. The DNA lab in the medical examiner’s office found two people’s DNA on one gun; by FST’s calculation, it was 156 times more likely than not to contain Johnson’s DNA. The second gun had three people’s DNA and a formidable likelihood of 66 million. Johnson pleaded guilty to illegal gun possession and Caproni sentenced him last month to 28 months in prison, most of which he has already served.

ProPublica filed a public-records request for the FST source code in July. The medical examiner’s office denied the request, citing its “sensitive nature” and writing that “source code consists of information that, ‘if disclosed, would jeopardize the capacity of [OCME] to guarantee the security of its information technology assets.’” The office’s special counsel denied ProPublica’s appeal in August.

ProPublica is seeking to intervene in U.S. v. Johnson with the assistance of the Media Freedom and Information Access Clinic at Yale Law School, which offers pro bono services to news organizations.

Richard Tofel, president of ProPublica, said, “We are seeking disclosure of this code because of the considerable public interest in the accuracy of its predictions, and to further scrutiny of its impact. If we prevail on our motion, we would envision publishing the code alongside an analysis of its likely effectiveness.”

Other nonprofit organizations are also seeking to open proprietary source codes for DNA analysis to wider scrutiny. On Sept. 13, the American Civil Liberties Union and Electronic Frontier Foundation filed briefs in California’s appeals court, supporting efforts by a man convicted of sexual assault and burglary to gain access to the algorithm behind a widely used software program called TrueAllele.  The DNA evidence in his case was so small and mixed that initial analysis was inconclusive, but prosecutors say TrueAllele linked him to three crime scenes in east Bakersfield. He was sentenced to life in prison without parole. The developer of TrueAllele contends that its code is a trade secret. 

Kevin Johnson’s attorneys, Sylvie Levine and Christopher Flood of the Federal Defenders of New York, said they also plan to submit a motion to make the FST source code public. Flood told Caproni in Johnson’s sentencing hearing last month that Adams’ critique of FST “affects every result that has ever been produced by that software,” so there is a public interest in allowing him to discuss it freely.

“It’s hard to imagine a justification for a public lab to be so opaque, when science demands transparency,” Flood told ProPublica after the hearing.

A coalition of defense attorneys, including Flood, sent a letter to New York state’s inspector general, Catherine Leahy Scott, on Sept. 1, asking her to investigate the DNA lab and the thousands of past criminal cases that relied on the results of either FST or a second controversial technique called “high-sensitivity testing.”

Because the lab has kept problems with its “unreliable” testing and “unsound statistical evidence” secret from the public and the courts, the attorneys wrote, “innocent people may be wrongly convicted, and people guilty of serious crimes may go free.”

Following the ProPublica/New York Times article, several elected officials have expressed concern about New York’s DNA testing methods. Three members of the New York City Council — Rory Lancman, Carlos Menchaca and Rafael Espinal — called for further investigation. “The findings in the report raise serious questions about the methods used by the city’s medical examiner to analyze complex DNA samples,” said Lancman, who represents a district in Queens and is the chair of the council’s Committee on Courts and Legal Services. “The possibility that these techniques resulted in numerous wrongful convictions is alarming and undermines confidence in our justice system.”

Joseph Lentol, a New York State Assembly member from north Brooklyn, called for strengthening the state commission that oversees forensic methods. Lentol, who sponsored a bill more than two decades ago that paved the way for DNA testing in criminal proceedings, told ProPublica on Sept. 8 that the New York State Commission on Forensic Science — comprised of forensic lab officials, law enforcement representatives, lawyers and political appointees — should be solely made up of scientists. The DNA Subcommittee of the state commission, which approves all DNA analysis methods used in New York state, unanimously voted in 2010 to recommend the use of FST even though it did not have access to FST’s source code in its evaluation process.

“DNA is very powerful, and that’s why we need to be careful,” said Lentol. Regarding the disputed FST program, he said, “It’s something that should have been more carefully analyzed, and not passed by the forensic commission in the first place without a real close look at it.”

The commission discussed the ProPublica/New York Times article on Sept. 13 in executive session, meaning that reporters were not allowed to cover it and members could not talk about the proceedings publicly. The commission chair, Michael Green, said beforehand that the discussion would be held behind closed doors to avoid jeopardizing any future investigation by the inspector general. Leahy Scott is reviewing the defense attorneys’ letter, her spokesman said.

The medical examiner’s office says it switched from FST to a new program, STRmix, because of changing FBI standards and not because of any deficiencies with FST. Dr. Barbara Sampson, New York City’s chief medical examiner, defended the lab’s DNA testing methods in a Medium post she wrote in response to the ProPublica/New York Times article.

In addition to the Johnson case, attorneys in other ongoing criminal proceedings are citing FST’s perceived unreliability as a basis for defenses and appeals. Mayer Herskovic, a Hasidic Jew and Brooklyn father of two who was sentenced to four years in prison for gang assault after the lab said that his genetic material matched a complex sample of DNA found on the victim’s sneaker, is now appealing his conviction. His lawyer plans to argue that FST was never tested on a population as insulated as the Hasidic Jews of Williamsburg, who very likely share many of the same ancestors, and therefore much of the same DNA.

“DNA is the magic word,” Herskovic told ProPublica. “If you throw it into a trial, they eat it up. For me, it’s not magic at all.”

by Abrahm Lustgarten

<!-- START CMS BODY CONTENT --> <script src="https://connect.facebook.net/en_US/all.js"></script> <div id="fb-root"></div> <script> FB.init({ appId : '229862657130557', // App ID status : true, // check login status cookie : true, // enable cookies to allow the server to access the session xfbml : true // parse XFBML }); </script> <!-- we can't edit body tag, so use custom bodyclass value in YAML if needed --> <div id="page-body" class="default default-alt story-contractors"> <pp-special> <header role="banner"> <h1><a href="https://features.propublica.org">ProPublica</a></h1> <h2><a href="https://www.propublica.org/series/bombs-in-our-backyard">Bombs in Our Backyard</a></h2> <nav> <ul class="social-links"> <li class="facebook social-widget ss-fb" data-title="How U.S. military outsourcing turned toxic" data-img="" data-txt="Fraud. Bribery. Incompetence. The military’s use of contractors adds to a legacy of environmental damage." data-desc="Fraud. Bribery. Incompetence. 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Bribery. Incompetence. The military’s use of contractors adds to a legacy of environmental damage.</h2> </div> <div class="credits"> <p class="byline">by Abrahm Lustgarten, ProPublica</p> <p class="byline">Photography by Ashley Gilbertson/VII Photo, special to ProPublica</p> <p class="dateline"> <time>September 26, 2017</time> </p> </div> </header><!-- end article header --> <div class="wrapper"> <div class="content"> <p class="opening"><span class="lead-in"><span class="dropcap">I</span>n August 2016,</span> an inspector from the U.S. Environmental Protection Agency arrived at Barksdale Air Force base in Louisiana, a nerve center for the U.S. military’s global air combat operations, to conduct a routine look at the base’s handling of its hazardous waste.</p> <p>Barksdale, like many military bases, generates large volumes of hazardous materials, including thousands of pounds of toxic powder left over from cleaning, painting and maintaining airplanes.</p> <aside class="promotion series-promotion"> <div class="group"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/bomb-art-TEST-2-360*159-621f1b.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/bomb-art-TEST-2-720*318-621f1b.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/bomb-art-TEST-2-360*159-621f1b.jpg" alt="" /> </noscript> </span> <h3>Bombs in Our Backyard</h3> <p>This story is part of an ongoing series examining the Pentagon’s oversight of thousands of toxic sites on American soil, and years of stewardship marked by defiance and delay.</p> </div> <div class="group"> <h3>Email Updates</h3> <p>Sign up to get ProPublica’s major investigations delivered to your inbox.</p> <!-- Begin MailChimp Signup Form --> <div id="mc_embed_signup"> <form action="//propublica.us6.list-manage.com/subscribe/post?u=ff2018a8e2&amp;id=f74e196955" method="post" id="mc-embedded-subscribe-form" name="mc-embedded-subscribe-form" class="validate" target="_blank" novalidate=""> <div id="mc_embed_signup_scroll"> <div class="mc-field-group"> <label for="mce-EMAIL">Sign up to get ProPublica’s investigations delivered to your inbox.</label> <input placeholder="you@example.com" type="email" value="" name="EMAIL" class="required email" id="mce-EMAIL" /> </div> <!-- UPDATE THIS FOR EACH INVESTIGATION --> <!-- <div class="mc-field-group hidden"> <input checked type="checkbox" value="16" name="group[15237][16]" id="mce-group[15237]-15237-4"> <label for="mce-group[15237]-15237-4">Advoserve</label> </div> --> <!-- real people should not fill this in and expect good things - do not remove this or risk form bot signups--> <div style="position: absolute; left: -5000px;" aria-hidden="true"> <input type="text" name="b_ff2018a8e2_f74e196955" tabindex="-1" value="" /> </div> <input type="submit" value="Subscribe" name="subscribe" id="mc-embedded-subscribe" class="button" /> <div id="mce-responses"> <div class="response" id="mce-error-response" style="display:none"></div> <div class="response" id="mce-success-response" style="display:none"></div> </div> </div> </form> </div> <script src="//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js"></script> <script>(function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[3]='TWITTER';ftypes[3]='text';}(jQuery));var $mcj = jQuery.noConflict(true);</script> <!--End mc_embed_signup--> </div> </aside> <p>For years, Barksdale had been sending a portion of its waste to an Ohio company, U.S. Technology Corp., that had sold officials at the base on a seemingly ingenious solution for disposing of it: The company would take the contaminated powder from refurbished war planes and repurpose it into cinderblocks that would be used to build everything from schools to hotels to big-box department stores — even a pregnancy support center in Ohio. The deal would ostensibly shield the Air Force from the liabililty of being a large producer of dangerous hazardous trash.</p> <p>The arrangement was not unique.</p> <p>The military is one of the country’s largest polluters, with an inventory of toxic sites on American soil that once topped 39,000. At many locations, the Pentagon has relied on contractors like U.S. Technology to assist in cleaning and restoring land, removing waste, clearing unexploded bombs, and decontaminating buildings, streams and soil. In addition to its work for Barksdale, U.S. Technology had won some 830 contracts with other military facilities — Army, Air Force, Navy and logistics bases — totaling more than $49 million, many of them to dispose of similar powders.</p> <p>In taking on environmental cleanup jobs, contractors often bring needed expertise to technical tasks the Pentagon isn’t equipped to do itself. They also absorb much of the legal responsibility for disposing of military-made hazards, in some cases helping the Pentagon — at least on paper — winnow down its list of toxic liabilities.</p> <p>But in outsourcing this work, the military has often struggled to provide adequate oversight to ensure that work is done competently — or is completed at all. Today, records show, some of the most dangerous cleanup work that has been entrusted to contractors remains unfinished, or worse, has been falsely pronounced complete, leaving people who live near former military sites to assume these areas are now safe.</p> <p>What the EPA inspector found when he visited Barksdale was an object lesson in the system’s blind spots.</p> <p>Barrels of the waste hadn’t been shipped off and recycled, but rather were stored in a garage tucked away from the facility’s main operations. Further, shipping documents suggested that what waste had been sent off the base hadn’t gone to U.S. Technology’s recycling plant in Ohio, as an Air Force official first told the EPA, but instead had gone to company warehouses in at least two other states. Storing hazardous waste without a permit — and without immediately recycling it — can be illegal.</p> <p>The inspection findings triggered an investigation to determine if the Air Force had been storing hazardous waste that it was supposed to have been recycling without a permit. It also suggested broader problems with U.S. Technology, which was already the subject of an inquiry in Georgia into whether it was illegally dumping waste — including material that could have come from Barksdale — near a residential neighborhood there.</p> <p>Barksdale officials told ProPublica that the base “has never stored” hazardous materials at the request of U.S. Technology. The Air Force and the Pentagon declined to answer any specific questions about U.S. Technology’s work, except to say that the base had been working with the company for at least a decade.</p> <figure class="default"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1243-480*720-132c23.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1243-960*1440-132c23.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1243-900*1350-132c23.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1243-1800*2700-132c23.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1243-480*720-132c23.jpg" alt="" /> </noscript> </span> <figcaption>U.S. Air Force Tech Sergeant Jonathan Hayes works on a B-52 bomber from the 307th Bomb Wing at Barksdale Air Force Base. For more than a decade the Air Force has relied on a private company to handle its waste, even though that company has been associated with multiple investigations and fraud.</figcaption> </figure> <p>ProPublica pieced together what happened at Barksdale using EPA records, including a 1,000-page document compiled by one of its lead investigators, as well as Air Force correspondence, court files, Pentagon contracts and other materials.</p> <p>The documents make clear that officials at Barksdale should have been wary of doing business with U.S. Technology from the start. The head of one of its sub-contractors had been sent to prison in 2008 for illegally dumping hazardous waste under another Pentagon contract. U.S. Technology had been investigated for related wrongdoing — storing or dumping material it claimed to be recycling — in two other states. Indeed, a 2011 Pentagon report to Congress about contractor fraud included U.S. Technology on a list of companies that had criminal or civil judgments against them, but which still received millions of dollars in subsequent contracts.</p> <p>Neither the Air Force nor the Pentagon would respond to questions about why the various military branches continued to award contracts to U.S. Technology despite its problems.</p> <p>The EPA also would not say whether it was looking into U.S. Technology’s contracts with other bases — deals involving millions of pounds of toxic powder and tens of millions of taxpayer dollars — but such a step might well be prudent.</p> <p>In April, U.S. Technology’s founder and president, Raymond Williams, was indicted in U.S. District Court in Missouri for trucking millions of pounds of its hazardous powder waste — from Defense and other types of contracts — over state lines, where, according to EPA documents, the company had been storing it instead of recycling it. In June, Williams was indicted in Georgia on federal charges related to bribing an Air Force official for recycling contracts. Williams has pleaded not guilty in both cases.</p> <p> Asked about Barksdale and other contracts that have gone awry, one of the Pentagon’s top environmental officials told ProPublica that there is no systemic problem with the military’s approach to cleanup or other environmental contracting. Maureen Sullivan, the deputy assistant secretary of defense for environment, safety and occupational health, said the military might have thousands of companies under contract at any given time and that the Barksdale case and others like it amount to rare examples of negligence or incompetence.</p> <p>“Not everybody is an angel,” Sullivan said.</p> <p>Still, the Pentagon and its various monitors have issued repeated warnings about problems related to environmental cleanup contractors.</p> <p>In 2001, the Defense Department’s own inspector general discussed the “significant risk of fraud” in environmental cleanup contracts as one of the Pentagon’s “high risk vulnerabilities.” That report did not list recommendations for reform, chiefly because many of the office’s previous efforts imploring changes had been ignored.</p> <p>A decade later, the U.S. Government Accountability Office concluded that many Pentagon environmental cleanup contracts were vulnerable to corner-cutting, lack of quality review and plain incompetence. The report made clear that the department relied heavily on performance-based contracts despite federal guidelines which cautioned against using them for environmental jobs, perhaps because doing so furthered the Pentagon’s self-interest in ridding itself of environmental headaches.</p> <p>“The evidence is in, a contractor is only as good as the oversight that they have,” said Jane Williams, the executive director of California Communities Against Toxics, a watchdog group that has been tracking defense site cleanups across the country since 1989. “The defense department turns a blind eye… They want to write a check and have someone else do it.”</p> <hr /> <figure class="full"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1709-480*320-1d082b.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1709-960*640-1d082b.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1709-900*600-1d082b.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1709-1800*1200-1d082b.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1709-480*320-1d082b.jpg" alt="" /> </noscript> </span> <figcaption>Barksdale Air Force Base is home to nearly half of the U.S.’s remaining B-52 fleet, airplanes that are more than 55 years old, and require constant maintenance.</figcaption> </figure> <hr /> <p> </p> <p><span class="lead-in">Airmen call Barksdale Air Force</span> base “The Deuce” — home to the 2nd Bombing Wing of the 8th Air Force, a legendary unit in American aerial bombardment with roots going back to World War I. The Wing was moved to Barksdale in 1963, with the production of the B-52. In 1991, seven B-52s flew the longest round-trip combat mission in aviation history from Barksdale’s hangers, firing the first cruise missiles of the first Gulf War into Baghdad from their holds beneath the bombers’ gaping wings.</p> <p>Today, nearly half of the Air Force’s remaining B-52’s fly from this heavily guarded, 22,000-acre base, which has 8,500 airmen stationed there. Those 185,000-pound hunks of aging, flexing metal — still the workhorse of the nation’s strike force more than 55 years after the last one was made — need an extraordinary amount of work to keep them in the air. At Barksdale, the airplanes’ parts are sanded and painted, corrosion removed, cracks in the fuselage cut out and patched, rivets drilled hollow and replaced. All so the planes can return to flight training over Eastern Europe or bombing raids against ISIS in Syria.</p> <p>Essential to this unglamorous, but vital work are millions of tiny glass and plastic beads that machinists use to blast against metal parts to strip away paint and corrosion. The process leaves huge amounts of toxic dust, including the flaked paint and bits of pulverized metal from the planes themselves.</p> <p>U.S. Technology was founded in 1987 by Williams, described by colleagues as an eccentric entrepreneur with a love for historic fighter planes and airplane design. U.S. Technology and its dozen or so affiliated corporations have tried to sell everything from inexpensive prop fighter planes to the United Arab Emirates to concrete blocks. But the core business has always been the bead blasting and recycling.</p> <p>For years Barksdale handled the waste produced by its airplane maintenance just as it handled any other hazardous material: It catalogued and labeled it, registered the quantities with the EPA and state authorities, and shipped it to a specialized disposal facility in Kentucky that was licensed to burn or bury the stuff.</p> <p>But in the last decade, the Pentagon began to press Barksdale and other bases to comply with “waste minimization” rules set out in federal regulations. Barksdale officials said they were required to cut the volume of waste the base produced by 10 percent from 2010 levels by 2020, for example. Increasingly, all bases — which compete for funding and whose officers vie for promotions — are judged on meeting or beating quotas for limiting and then promptly handling waste.</p> <p>Documents make clear U.S. Technology’s pitch spoke directly to Barksdale and was calibrated to help achieve these aims. The company promised to supply all of the base’s blast powder and then retrieve the spent material — thousands of pounds of it a year — to use as fill to make cinderblocks. The EPA and Ohio environment officials had certified this was relatively safe, so long as the cinderblocks didn’t come into contact with the ground, where they could potentially contaminate food and water supplies.</p> <figure class="inset"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0840-square-480*480-246d8f.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0840-square-960*960-246d8f.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0840-square-900*900-246d8f.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0840-square-1800*1800-246d8f.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0840-square-480*480-246d8f.jpg" alt="" /> </noscript> </span> <figcaption>The U.S. Environmental Protection Agency is investigating whether officials at Barksdale Air Force Base stored hazardous waste from the maintenance of its aircraft against federal regulations, and whether the company it hired to recycle it was instead dumping it.</figcaption> </figure> <p>The deal also promised other benefits.</p> <p>Because U.S. Technology was a recycler, the toxic material it removed from Barksdale would no longer be classified legally as “hazardous waste.” This semantic end run spared the Air Force from having to meet strict federal regulations for where such waste goes and for protecting people from being harmed by it. As one company sales document put it, recyclable materials “are exempt from regulation as a waste.” It also meant that, at least technically, Barksdale’s ledger would show that it was producing less waste overall, and thus edging closer to the Pentagon’s goals.</p> <p>U.S. Technology’s sales documents boasted that its approach offered its military customers “maximum protection” from liability and costs related to cleanups, and could maybe even prevent contaminated areas from becoming Superfund sites.</p> <p>Still, the presentations left out important bits of the company’s history.</p> <p>In order to be exempt from hazardous waste laws, federal regulations require waste recycling companies like U.S. Technology to re-purpose at least three-quarters of the hazardous material they collect as part of contracts in any given year. The rule is meant to ensure that waste isn’t simply being stored. Storing hazardous waste requires a highly specialized license and, done wrong, can lead to environmental disaster.</p> <p>In 2002, however, Ohio and EPA investigators inspected U.S. Technology’s plant and found discrepancies in its inventories of hazardous materials received from the military and other customers. Of some 3.6 million pounds of material U.S. Technology had accepted in 2000, for example, only 98,000 pounds of it had been used for recycled products, a figure “well short of the required amount,” according to Ohio state records. In an alleyway next to the building, investigators found stacks of unused outdoor patio furniture apparently molded from hazardous powder but never sold.</p> <p>“There obviously wasn’t a market for the furniture,” wrote Nyall McKenna, the Ohio environment regulator who led the investigation.</p> <p>The investigators found that U.S. Technology had directly recycled a small portion of the material, but shipped the vast majority of it to a processing company in Mississippi that U.S. Technology had hired to reformulate the material into large blocks that the U.S. Army Corps of Engineers — a Pentagon branch itself — could use in its management of the country’s river systems. But it turned out the processing company, Hydromex, hadn’t been recycling the material either. Instead, it had been burying U.S. Technology’s waste in trenches it dug underground, and then had used the remaining powder to make a concrete slab that covered the holes. By the time the EPA and state regulators learned this, more than 11 million pounds of waste from Ohio, and U.S. Technology customers around the country — packed into 25,000 drums — had been stashed at the site in Yazoo, Mississippi.</p> <p>Hydromex’s owner was sent to prison for more than three years. U.S. Technology and its officials avoided prosecution, saying the company was not aware of Hydromex’s dumping and was itself a victim of fraud. (In a later civil trial, a jury rejected U.S. Technology’s fraud claims against the property owner of the Hydromex plant.) In the eyes of regulators, though, U.S. Technology remained liable for the waste material under environmental law, and would ultimately be tasked with removing and — again — properly recycling the dumped waste.</p> <figure class="medium"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0965-480*320-898aa0.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0965-960*640-898aa0.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0965-900*600-898aa0.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0965-1800*1200-898aa0.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_0965-480*320-898aa0.jpg" alt="" /> </noscript> </span> <figcaption>Military installations, including Barksdale, often produce large amounts of hazardous waste. Pentagon officials have set targets for bases to reduce the amount of waste they handle, a program which may be incentivizing the outsourcing of disposal to contractors with little follow-up.</figcaption> </figure> <p>EPA documents and emails obtained by the agency show some of the material dumped in Mississippi came from U.S. military bases and that the case had gotten the attention of the Air Force in particular. At least two other bases — Robins Air Force Base in Georgia and Hill Air Force base in Utah — had been working with U.S. Technology, and others were about to start until they were informally warned off by headquarters, pending a review, according to Air Force documents.</p> <p>In the end, though, any Air Force wariness concerning U.S. Technology proved short-lived. Senior brass, as part of their look at what had gone wrong in 2002, visited the company’s operations in 2005 and came away with a favorable view.</p> <p>“U.S. Technology has a very impressive recycling operation,” William Hoogsteden, a project manager at the Air Force research laboratory at Wright-Patterson Air Force Base in Ohio, wrote in a 2005 memo. The company, the official concluded, “looks to be one of the few legitimate and viable recycling processes using spent plastic media.” </p> <p>Another 2005 letter pushed U.S. Technology’s appeal explicitly. “Their products help us achieve diversion targets (recycle vs. disposal),” wrote David Fort, an Air Force hazardous waste program manager, in an internal Air Force exchange. “This is something that we simply ought to take advantage of.”</p> <p>In 2006, various Pentagon branches signed 30 contracts with U.S. Technology worth more than $2.7 million.  </p> <hr /> <p> </p> <p><span class="lead-in"><span class="dropcap">T</span>he volume and complexity</span> of environmental cleanup work has led the Pentagon to rely more and more on contractors like U.S. Technology. According to the GAO, such companies now handle nearly all of the hazardous waste the Defense Department generates annually, and, according to Pentagon data obtained by ProPublica, at least 2,400 contaminated cleanup sites across the country have been outsourced to private firms.</p> <p>Cleaning up contamination at these sites has already consumed more than $42 billion in taxpayer funds, much of it paid to contractors. By the Pentagon’s conservative estimates, the total cleanup bill is likely to top $70 billion, making Defense pollution one of the most expensive environmental calamities in American history, and a lucrative mainstay for private concerns.</p> <p>Virtually all Pentagon contracting — for weapons, aircraft, base security, reconstruction in war zones, and more — has come under criticism for cost overruns and, at times, for being open to exploitation. It’s impossible to say how environmental cleanup contractors compare to others in these regards. But experts say environmental work is especially hard to monitor; waste disposal and contamination are easy to hide and hard to track. Also, with Pentagon officials under pressure to reduce the list of contaminated sites and cut the costs of attending to them, there’s less incentive to question contractors that say problems are fixed or jobs are done well.</p> <p>A lengthy trail of damning reports from military watchdogs, however, suggests the same problems have cropped up time and again when the Pentagon has delegated environmental cleanups to contractors.</p> <p>In 2015, calling environmental issues a “longstanding material weakness,” the Pentagon’s inspector general said that despite publishing some 20 previous reports on the issue, little progress had been made in adopting recommendations.</p> <p>One of those previous reports was the 2001 report to Congress, which noted that environmental crimes committed by hazardous waste contractors warranted the majority of attention from the agency’s criminal investigations division. Contractors cut corners, falsely certified as done environmental work they hadn’t completed, illegally dumped dangerous materials, or employed workers who weren’t properly trained for their tasks, the report said, describing such incidents as “typical” and “discussed regularly.”</p> <figure class="medium"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170505_ProPublica_Cali_0377-480*320-96987c.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170505_ProPublica_Cali_0377-960*640-96987c.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170505_ProPublica_Cali_0377-900*600-96987c.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170505_ProPublica_Cali_0377-1800*1200-96987c.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170505_ProPublica_Cali_0377-480*320-96987c.jpg" alt="" /> </noscript> </span> <figcaption>A water truck sprays down dust at Hunters Point in San Francisco, California in May. The former Navy shipyard is one of thousands of heavily contaminated former defense sites now being being redeveloped for housing and public use.</figcaption> </figure> <p>The inspector general noted that across all branches of the Pentagon, environmental contracts were ripe for abuse because remediation relies so heavily on contractors to self-report their progress. And it also noted that the results of the review were “disappointing because the department made limited progress in carrying out numerous agreed-upon recommendations” from the past.</p> <p>John Arlington, who researched corruption at defense sites as a former chief investigator for the House Committee on Energy and Commerce, said the problems were epic.</p> <p>“We discovered a very long history of hazardous disposal practices of the worst sort,” said Arlington, who now serves as general counsel for the SIGAR, the Special Inspector General for Afghanistan Reconstruction.</p> <p>In many cases, egregious malpractice — or even intentional deception — hasn’t been enough to steer the Pentagon away from particular contractors. In San Francisco, in 2016, the Nuclear Regulatory Commission determined that employees of a prominent global environmental engineering firm hired by the Navy had falsified soil samples from a radioactive experiment site soon to be converted to housing in the nation’s hottest real estate market. The contractor, Tetra Tech, has received more than $2.3 billion in defense contracts over the past decade, and was being paid more than $300 million for its cleanup in San Francisco.</p> <p>In a legal petition the San Francisco environment group Greenaction submitted to NRC investigators, several Tetra Tech whistleblowers said that, in order to save money, Tetra Tech managers had ordered them to replace contaminated soil samples with clean soil, dump contaminated soil in trenches on the property, falsify documents certifying the work and manipulate the computer data analyzing radiation levels. Their allegations raised questions about environmental safety across some 420 acres of the site.</p> <p>Tetra Tech, which conducted an internal investigation and conceded its samples had been swapped, “emphatically denies” that its management was involved or that there was a broader conspiracy at the site, according to a statement the company sent to ProPublica. The NRC, at first, fined Tetra Tech $7,000, but even that amount was later reduced after an agreement that the company would hold additional training for its employees. A Navy spokesperson said that while Tetra Tech is still under contract, it is no longer doing field work at the site.</p> <p>At Camp Minden, a former Army ammunition plant now owned by Louisiana and used by its National Guard, a munitions waste recycling contractor’s failures caused a disaster too big to ignore.</p> <p>As part of a nationwide effort to decommission more than a billion pounds of aging weapons, the Army hired a company called Explo Systems to disassemble 1.3 million artillery charges at Minden. For $8.6 million, the firm would remove the shells and casings and empty an explosive propellant powder called M6. Explo claimed to have industrial facilities to recycle the M6, and said it would safely destroy some of it while converting the rest into blasting charges it planned to sell to the mining industry.</p> <p>Had the Army ever looked into Explo’s capabilities, it would have learned that it had not yet built two of the processing facilities it would need to destroy and convert the Army’s explosive material. Nevertheless, by mid-2012, Explo documents appeared to show that it had shipped and sold nearly 18 million pounds of the explosives.</p> <p>That illusion quite literally blew up on Oct. 15, 2012, when a massive explosion rocked the Minden grounds, shattering windows in the town four miles away, toppling 11 rail cars, and sending a mushroom cloud 7,000 feet into the sky. EPA records describe a blast radius of raw explosives landing as close as a few thousand feet from the nearby town.</p> <figure class="default"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170414_ProPublica_UXO_0158-480*320-189eb8.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170414_ProPublica_UXO_0158-960*640-189eb8.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170414_ProPublica_UXO_0158-900*600-189eb8.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170414_ProPublica_UXO_0158-1800*1200-189eb8.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170414_ProPublica_UXO_0158-480*320-189eb8.jpg" alt="" /> </noscript> </span> <figcaption>An environmental engineering firm with more than $2 billion in Pentagon contracts has admitted that its employees falsified radioactive soil samples at Hunters Point. Whistleblowers from the firm allege the conduct was part of a larger conspiracy by the company to speed up work and lower costs.</figcaption> </figure> <p>When Louisiana State police executed a search warrant of the base, they found nearly 18 million pounds of M6 explosives stored haphazardly across the property. Photographs show enormous cardboard boxes overstuffed with explosives, sagging under their own weight with water stains rotting their base. The boxes teetered in hallways, were stacked in doorways and spilled out in the surrounding yards, where thousands of them were lined up across fields like parked cars at a county fair. Louisiana’s extreme heat and humidity had taken its toll, degrading the chemical stabilizers that bond the explosives, until they verged on spontaneous ignition.</p> <p>The remaining materials could have blown at any time. Louisiana’s governor declared a state of emergency, and for a week that December, the small community of Doyline along the base’s fence line was evacuated. </p> <p>“It was a perfect storm,” said J.C. King, the Army’s director of munitions and the chief official responsible for Army explosives cleanups, in an interview at the Pentagon in July.</p> <p>King says what happened in Minden, though, is no longer the Army’s problem; when Explo signed its contract, it assumed ownership of the explosives and any contamination that might be associated with them, he said. EPA investigators determined Explo had falsified its sales paperwork and, in fact, had few customers; the very premise of its Army contract was a lie. Six of its executives wound up indicted. They have pleaded not guilty, and are currently awaiting trial in Louisiana. Explo Systems declared bankruptcy the next fall, abandoning the explosives. Its executives did not respond to a request for comment made through their attorney.</p> <p>Despite the substantial real-world harm that has resulted from misconduct by contractors, the Pentagon continues to rely ever more heavily on them for environmental work even as the budget for that work has been whittled. Experts say the process is flawed, incentivizing shortcuts and outsourcing to save money and preserve the Pentagon’s primary military mission. But unless the Pentagon substantially tightens oversight to weed out problem contractors, experts say, the Defense Department’s enormous environmental cleanup program — an effort affecting an amount of land larger than the state of Florida — will only become more vulnerable to abuse.</p> <p>“It’s about priorities; you either pay for a certain result or you end up playing hide the ball,” said William Frank, who for 25 years oversaw Pentagon cleanups at the EPA as a senior attorney in the Federal Facilities Enforcement Office. “The DoD is not accountable and it hasn’t been. But they are complicit. The process itself has this fatal flaw of the necessity of balancing the military warfighter mission and the weapons development industry versus their legal liability” under environmental law. “And it’s not working.”</p> <hr /> <figure class="medium"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0330-480*320-42e199.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0330-960*640-42e199.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0330-900*600-42e199.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0330-1800*1200-42e199.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0330-480*320-42e199.jpg" alt="" /> </noscript> </span> <figcaption>Residents of Doyline, Louisiana were evacuated in 2012 out of fears that millions of pounds of discarded explosives left on the grounds of a former nearby Army plant at Camp Minden, might explode. A contracting firm was hired by the Army to recycle old munitions, but instead stored them in cardboard boxes, leading to an earlier massive explosion.</figcaption> </figure> <hr /> <p> </p> <p><span class="lead-in"><span class="dropcap">W</span>hen the EPA’s</span> David Robertson showed up at Barksdale in August 2016, it appears he was there to do nothing more than a pro-forma inspection. It didn’t take Robertson long, however, to figure out the deal U.S. Technology offered the base was less than advertised, and maybe even a complete sham.</p> <p>His inspection report shows that thousands of pounds of waste from Barksdale hadn’t been shipped to the company’s plant in Ohio, as a Barksdale official initially had said. Instead, shipping documents suggested that much of the waste had been trucked to warehouses in Arkansas and Georgia. There was no paperwork whatsoever for more than a year, from July 2014 until February 2016. And then there were the 55-gallon drums full of bead blast powder on the base itself — labeled “exempt,” and not as hazardous. Some of the grayish powder was loose, sprinkled across the tops of the drums.</p> <p>Standard practice for EPA waste inspectors is to examine every link in the chain of custody before they sign off on a site. Robertson — seeking to verify the explanations offered by Barksdale staff — called regulators in Georgia and Arkansas and told them about the manifests indicating Barksdale waste had been shipped into their states. The Arkansas regulators, according to what Robertson wrote in his inspection report, told him they knew nothing about the shipments or about warehouses storing waste.</p> <p>An EPA official in Georgia, however, was alarmed by the call from Robertson. He alerted Robertson to U.S. Technology’s past legal troubles in Mississippi, and said he’d already been investigating U.S. Technology’s facility in Macon for dumping hazardous waste nearly identical to what Barksdale had produced — and shipped to Macon in 2016 — on the grounds of an old track, called the Middle Georgia Raceway.</p> <p>The track, which once hosted NASCAR races, hasn’t been used for more than auto shows and test driving events since the 1980s, but the community surrounding it has slowly encroached, turning the once-rural and industrial area into a tightly packed nest of suburban streets and family homes.</p> <p>According to EPA documents from Georgia, one of U.S. Technology’s affiliated companies, U.S. Technology Aerospace Engineering, loaded the waste into dumpsters and trucked it to the raceway, where it was spread over several access roads and stashed in barrels lined up as an impact barrier for drivers on the oval. The EPA report does not say directly whether investigators determined the waste came from Barksdale, but it is described as bead-blast waste from the sandblasting of machinery. They found gray piles of loose, dusty material less than 90 feet from people’s backyards.</p> <p>In June 2016, the EPA sent an environmental contracting firm out to the track to sample the soils. Lab reports show the company found significant levels of chromium, arsenic, lead and cadmium. Only the arsenic exceeded health limits when measured for an industrial area — which the racetrack is zoned as. But the levels of chromium, lead and cadmium would all be considered much more dangerous if judged by residential health standards. By that measure, the Middle Georgia Raceway contained arsenic at 28 times the EPA’s limit, and cadmium at nearly four times what would be considered safe. High levels of chromium were also present, but there is no federal screening standard.</p> <p>Robertson makes clear in his report on Barksdale that he suspected both the Air Force and U.S. Technology of what the EPA calls “sham recycling.” The EPA would not comment on the status of its investigation, but its documents show it has assigned an agency criminal investigator and criminal counsel to the case.</p> <figure class="medium"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0727-480*320-118334.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0727-960*640-118334.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0727-900*600-118334.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0727-1800*1200-118334.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170823_ProPublica_Barksdale_0727-480*320-118334.jpg" alt="" /> </noscript> </span> <figcaption>For years the Pentagon has increased its reliance on third party private firms to conduct environmental cleanup and hazardous waste disposal at U.S. Defense properties, despite repeated warnings from watchdogs that such contracts are ripe for abuse. More than 2,000 sites in ProPublica’s database employ contracting firms for cleanups.</figcaption> </figure> <p>The Georgia dumping — which EPA is investigating separately — suggests a potentially larger problem with U.S. Technology.</p> <p>The company appeared, once again, to be having difficulty turning its powder waste into viable products. According to John Socotch, the company’s long-time director of sales, the market for U.S. Technology’s powder dried up when the construction industry tanked in 2008 and it never fully recovered.</p> <p>“Ray had to continually find other means, other companies to recycle the material,” Socotch said of the company’s owner in an interview with ProPublica. He said the company tried selling military waste for brick facades and to glass companies, in order “to get rid of the material.”</p> <p>In Georgia, the raceway’s owner, a local real estate developer who also owns the building in Macon that served as U.S. Technology’s warehouse, told ProPublica that Williams personally appealed to him to dump the waste. “They were asking me about potential sources to get rid of the stuff, because it just accumulates in the warehouse,” said Tim Thornton. Thornton said Williams promised him the material wasn’t hazardous. </p> <p>Ray Williams did not return repeated phone calls from ProPublica, and his lawyer declined to comment. According to Socotch, Williams sold the company’s patents, contracts and processes in April 2015 to an Ohio businessman named Anthony Giancola. Giancola’s office did not return repeated calls for comment, but arranged for Socotch to speak with ProPublica.</p> <p>The sale of the company has not distanced Williams from criminal cases related to its military contracts. In June, he was indicted in a U.S. District Court in Georgia on charges of paying a Department of Defense official $20,000 a year to tailor contracts at Robins Air Force base so that only U.S. Technology’s bead blasting and recycling services could satisfy them. According to the 84 counts in the indictment, between 2004 and 2013 Williams allegedly conspired with the officer, Mark Cundiff, on contracts large and small, including a $25 million supply contract for U.S. bases and NATO members to purchase blasting materials. Cundiff has pleaded guilty in the case.</p> <p>In a separate case, Missouri officials indicted Williams and U.S. Technology Corp. in April 2017 on charges of conspiracy to illegally dispose of hazardous waste. After the Hydromex case in Mississippi, U.S. Technology acquired Hydromex and Williams promised to properly recycle the material that had been dumped in Yazoo. Instead, in 2013, Missouri officials determined that U.S. Technology had trucked the material — 9 million pounds of it — over the state border and deposited it in a U.S. Technology warehouse in Berger, Mo.  Williams has pleaded not guilty in that case.</p> <p>Today, U.S. Technology Corp. has reconstituted itself under new leadership, and a slightly revised name.</p> <p>In April 2015, U.S. Technology Corp. fired all of its employees, according to Socotch. The next day the new owner, who had purchased the patented products and the recycling process from Williams, hired everyone back — including Socotch, the long-time sales director. The company is now called U.S. Technology Media, and is located in one of Williams’ old recycling buildings.</p> <p>“We’re trying to get people to understand we are not that guy,” Socotch said of Williams. “We are not that company.”</p> <p>The Pentagon, it seems, is already persuaded.</p> <p>Between April 2015 and June 2017, the Pentagon awarded 62 contracts to the new company, worth more than $1.9 million. Barksdale officials continued to deal with the new company — and shipped more of its waste to it — in 2016. In late July, after EPA officials sent federal agencies a letter warning them that U.S. Technology was under investigation, and the Pentagon banned U.S. Technology Corp. — the old company — from any new government contracts, adding them to a list of forbidden companies. Contracts with the new company are still allowed.</p> <p>Back at Barksdale, records show that the Air Force has promised the EPA it will now handle its waste on its own, registering its barrels of contaminated powder in federal and state hazardous waste databases and likely shipping them to the licensed disposal facility in Kentucky. It says it will no longer work with U.S. Technology Media.</p> <figure class="full"> <span data-picture="" data-alt=""> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1052-480*320-597078.jpg"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1052-960*640-597078.jpg" data-media="(-webkit-min-device-pixel-ratio: 1.3), (min-resolution: 124.8dpi)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1052-900*600-597078.jpg" data-media="(min-width: 37.5em)"></span> <span data-src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1052-1800*1200-597078.jpg" data-media="(min-width: 37.5em) and (-webkit-min-device-pixel-ratio: 1.3), (min-width: 37.5em) and (min-resolution: 124.8dpi)"></span> <noscript> <img src="https://features.propublica.org/military-pollution/assets/images/generated/20170824_ProPublica_Barksdale_1052-480*320-597078.jpg" alt="" /> </noscript> </span> <figcaption>B-52 Stratofortress bombers have flown historic combat missions from Barksdale Air Force base in Louisiana, including the first attack on Baghdad during the first Gulf War. More recently, Barksdale planes have bombed ISIS targets in Syria. </figcaption> </figure> <p>That, of course, leaves the question of what ever happened to decades worth of hazardous materials Williams and U.S. Technology removed from American military installations. Socotch says much of it was properly recycled, but he declined to say how much or to document the effort.</p> <p>It appears that neither the company nor the Air Force plans to take responsibility for the unprocessed waste. Whatever hazardous waste U.S. Technology had accumulated in its warehouses, Socotch said, is still owned by U.S. Technology Corp., Williams’ apparently now-defunct company.</p> <p>“I can only speak for the new company, because the new company started fresh,” Socotch said. “I don’t know what the old company continues to do to get rid of recycled material.”</p> <p><em><strong>Help us Investigate:</strong> If you have experience with or information about the military’s use of contractors and environmental cleanups, email <a href="mailto:Abrahm.Lustgarten@propublica.org">Abrahm.Lustgarten@propublica.org</a>. For additional coverage, see more from ProPublica’s <a href="Abrahm.Lustgarten@propublica.org">Bombs in Our Backyard</a> series.</em></p> <hr /> <div class="author-bio"> <a href="https://www.propublica.org/site/author/abrahm_lustgarten"><img src="https://features.propublica.org/military-pollution/assets/images/abrahm-lustgarten-mug-200x200.jpg" alt="Author photo" /></a> <p><a href="https://www.propublica.org/site/author/abrahm_lustgarten">Abrahm Lustgarten</a> is a senior environmental reporter, with a focus at the intersection of business, climate and energy.</p> </div> <div class="author-bio"> <p>Nina Hedevang, Razi Syed, Alex Gonzalez, Lauren Gurley, Clare Victoria Church, Alessandra Freitas, Emma Cillekens and Eli Kurland, students in the NYU Arthur L. Carter Journalism Institute graduate studies program, have contributed reporting for the Bombs in Our Backyard project.</p> </div> <div class="author-bio"> <p>Design, production, and opening photo by <a href="https://www.propublica.org/site/author/david_sleight">David Sleight</a>.</p> </div> <hr /> </div><!-- end .content --> </div><!-- end .wrapper --> <footer> <div id="article-bottom"></div> <!-- Begin MailChimp Signup Form --> <div id="mc_embed_signup"> <form action="//propublica.us6.list-manage.com/subscribe/post?u=ff2018a8e2&amp;id=f74e196955" method="post" id="mc-embedded-subscribe-form" name="mc-embedded-subscribe-form" class="validate" target="_blank" novalidate> <div id="mc_embed_signup_scroll"> <div class="mc-field-group"> <label for="mce-EMAIL">Sign up to get ProPublica’s investigations delivered to your inbox.</label> <input placeholder="you@example.com" type="email" value="" name="EMAIL" class="required email" id="mce-EMAIL"> </div> <!-- UPDATE THIS FOR EACH INVESTIGATION --> <!-- <div class="mc-field-group hidden"> <input checked type="checkbox" value="16" name="group[15237][16]" id="mce-group[15237]-15237-4"> <label for="mce-group[15237]-15237-4">Advoserve</label> </div> --> <!-- real people should not fill this in and expect good things - do not remove this or risk form bot signups--> <div style="position: absolute; left: -5000px;" aria-hidden="true"> <input type="text" name="b_ff2018a8e2_f74e196955" tabindex="-1" value=""> </div> <input type="submit" value="Subscribe" name="subscribe" id="mc-embedded-subscribe" class="button"> <div id="mce-responses"> <div class="response" id="mce-error-response" style="display:none"></div> <div class="response" id="mce-success-response" style="display:none"></div> </div> </div> </form> </div> <script src='//s3.amazonaws.com/downloads.mailchimp.com/js/mc-validate.js'></script> <script>(function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';fnames[3]='TWITTER';ftypes[3]='text';}(jQuery));var $mcj = jQuery.noConflict(true);</script> <!--End mc_embed_signup--> <section id="comments"> <div id="disqus_thread"></div> <script> var disqus_shortname = 'propublica'; var disqus_url = 'https://features.propublica.org/military-pollution/military-pollution-contractors-scandal-toxic-cleanups/'; var disqus_title = 'How Military Outsourcing Turned Toxic'; var disqus_identifier = '134926'; /* * * DON'T EDIT BELOW THIS LINE * * */ (function() { var dsq = document.createElement('script'); dsq.type = 'text/javascript'; dsq.async = true; dsq.src = '//' + disqus_shortname + '.disqus.com/embed.js'; (document.getElementsByTagName('head')[0] || document.getElementsByTagName('body')[0]).appendChild(dsq); })(); </script> <noscript> <p>Please enable JavaScript to view the <a href="http://disqus.com/?ref_noscript">comments powered by Disqus.</a></p> </noscript> <p><a href="http://disqus.com" class="dsq-brlink">Comments powered by <span class="logo-disqus">Disqus</span></a></p> </section><!-- end #comments --> </footer> </article> </main><!-- end main[role="main"] --> <footer role="contentinfo"> </footer><!-- end footer[role="contentinfo"] --> </div><!-- end #page-body --> <!-- start footer scripts --> <script src="https://features.propublica.org/military-pollution/assets/js/main.js?2017092612811"></script> <!-- end footer scripts --> <!-- END CMS BODY CONTENT -->

by Megan Rose

When it comes to Afghanistan, the Pentagon seems to have a penchant for buying planes that don’t fly.

The military “wasted” nearly $65 million on a single inoperable plane that spent years resting on jacks in a warehouse and didn’t manage even one flight in Afghanistan, the Department of Defense inspector general recently reported. The plane, tricked out with sophisticated surveillance capabilities, was supposed to fly counternarcotics missions to disrupt Afghanistan’s vast heroin operations, but languished on its perch in Delaware.

“Consequently, the DoD received no benefit for its more than seven years’ work and $64.8 million in funds wasted,” the inspector general wrote.

The debacle unfortunately has a depressingly familiar ring. In 2014, after spending $486 million on 20 planes for the Afghan Air Force — which, yes, were never able to fly — the Pentagon sold most of them as scrap metal for a whopping 6 cents a pound. The total sale was $32,000.

The $65 million counternarcotics plane was part of the “Global Discovery Program” run jointly with the Drug Enforcement Administration, and is merely the latest in a long string of failed or questionable U.S. programs in Afghanistan. (And it’s yet another example of the failed overall $8.4 billion counternarcotics effort in Afghanistan that has led to more heroin, not less. In 2016, Afghanistan grew nearly three times as much poppy than it had in 2002, according to the United Nations.) A ProPublica investigation found that as of 2015 there were at least $17 billion worth of such projects. To see what kind of projects that money could have paid for here in the U.S. — for example, the testing of the nation’s entire backlog of rape kits or ending dependency on Russia in space — check out this game:

In total, including spending by the DEA and the Pentagon, the plane actually cost taxpayers nearly $86 million, four times as much as it was supposed to cost, according to the Department of Justice inspector general, who also investigated the program. Even these numbers are shaky because the Pentagon didn’t bother to track what it was spending, the inspector general wrote. The Defense Department modified the plane with millions on whizzbang technology like electro-optical infra-red video capability. Then, when the plane was no longer needed (if it was to begin with), it had to take it all out to return the craft to its original state. In August, the government tried to auction the plane off, but there were no buyers. (The aircraft’s sad tale of being shuttered in a warehouse in Delaware and then in Texas is reminiscent of the $3 million worth of patrol boats the military purchased for Afghanistan that sat unused for years in a Naval facility in Virginia.)

Sen. Chuck Grassley, R-Iowa, has railed for years about the seemingly nonexistent Pentagon oversight on such expenditures, as well as the failure of the Pentagon to audit its books, as required by law, in more than a quarter century. Last week, Grassley, who chairs the Judiciary Committee and sits on the Budget and Finance committees, again called out the Pentagon, noting that “not a single official took responsibility” for this latest aircraft waste. “As DoD officials are passing the buck, the American taxpayers are left holding the bag once again,” Grassley wrote to Defense Secretary James Mattis. The Pentagon has not yet responded to Grassley’s letter.

If history is any precedent, Grassley won’t get far in his calls for accountability. ProPublica’s investigation found that when it came to blowing wads of cash, war zones were a consequence-free zone. (Nothing ever happened as a result of the 16 planes being scrapped for pennies.)

To Grassley this latest misadventure is an opportunity for Mattis to follow through on his July promise for better fiscal management of the behemoth Pentagon budget. “In line with your call to ‘take aggressive steps to end waste in the department,’ I ask that a DoD review be conducted to determine who is responsible for what happened,” Grassley wrote.

In a handwritten note at the bottom of his letter to Mattis, Grassley wrote that “common sense dictates” that if a Navy admiral or captain can be dismissed “because their ship rams another” — which happened recently after two fatal collisions at sea — “then these people connected with this failed plane need to be fired. If heads don’t roll nothing changes.”

by Charles Ornstein

A U.S. senator whose state has been devastated by the opioid epidemic sent letters Tuesday asking two major health insurance companies to remove barriers to non-opioid pain treatments.

The letters from Sen. Joe Manchin, D-W.Va., follow a story by ProPublica and The New York Times, which detailed how insurers have restricted access to pain medications that carry a lower risk of addiction or dependence, even as they provided comparatively easy access to cheaper, generic opioid medications.

“The practices detailed in the article are the exact opposite of what we need and will only serve to worsen the opioid epidemic, putting more people at risk of opioid addiction and overdose death,” Manchin wrote in letters to David S. Wichmann, chief executive of UnitedHealth Group, and Joseph R. Swedish, chief executive of Anthem Inc.

“Specifically, I ask you to reduce or eliminate the barriers that your beneficiaries face to access non-opioid pain medications and physical therapy for pain management. Just as importantly, I urge you to ensure that every beneficiary that you serve that needs substance use disorder treatment, including behavioral health counseling, is able to affordably access it.”

UnitedHealth was cited in the story because it stopped covering Butrans, a painkilling skin patch that contains buprenorphine, an opioid that has a lower risk of abuse and dependence than generic, long-acting opioids. As a result, a patient said she turned to long-acting morphine to control her pain, went to the emergency room because she could not control her pain, and now visits her doctor more often than before.

Anthem denied a request for Lyrica, a non-opioid, brand-name drug, for a patient who had been using it successfully to treat the pain associated with interstitial cystitis, a chronic bladder condition. She cannot afford the roughly $520 monthly retail price of Lyrica, she said, so she takes generic gabapentin, a related, cheaper drug. She said it does not manage the pain as well as Lyrica.

UnitedHealth and Anthem defended their decisions and said they take the opioid crisis seriously. Both companies said they have been able to successfully decrease the number of opioid prescriptions taken by members.

In a statement Tuesday, Anthem said, “We share the Senator’s concerns about overdoses in West Virginia and the entire country, and agree that more needs to be done to address the opioid epidemic. That’s why Anthem is addressing the opioid epidemic through a holistic approach involving prevention, treatment and recovery and deterrence.”

Anthem said a West Virginia affiliate, Unicare Health Plan of West Virginia, is expanding a program to offer substance use treatments as part of primary care, removing the stigma that may be attached to it. The insurer also said it covers non-opioid pain relief drugs “according to best clinical practice guidelines and scientific evidence,” noting that some carry retail prices of $350 to $1,500 per prescription.

UnitedHealth has not yet responded to a request for comment.

Until recently, the role of insurers in fanning — or at least failing to stop — the opioid crisis has not received as much attention as that of other players, including pharmaceutical companies, doctors and drug distributors.

A day after the ProPublica/New York Times story was published, attorneys general for 37 states sent a letter to the health insurance industry’s main trade group, urging its members to reconsider coverage policies that may be fueling the opioid crisis.

“The status quo, in which there may be financial incentives to prescribe opioids for pain which they are ill-suited to treat, is unacceptable,” the letter said. “We ask that you quickly initiate additional efforts so that you can play an important role in stopping further deaths.”

Insurers say they have been addressing the issue on many fronts, including monitoring patients’ opioid prescriptions, as well as doctors’ prescribing patterns. Moreover, at least two large pharmacy benefit managers, which run insurers’ drug plans, announced this year that they would limit coverage of new prescriptions for pain pills to a seven- or 10-day supply.

Manchin’s daughter, Heather Bresch, is the chief executive of Mylan, a major pharmaceutical company. Mylan last month disclosed that it had received a subpoena from the Department of Justice seeking information about its manufacturing and sales of opioids. The company said it was cooperating.

While opioids such as hydrocodone and morphine are often prescribed to relieve pain, they also have been linked to abuse and dependence. Drug overdoses are now the leading cause of death among Americans under 50, and more than 2 million Americans are estimated to misuse opioids.

For our story earlier this month, ProPublica and the Times analyzed Medicare prescription drug plans covering 35.7 million people in the second quarter of this year. Only one-third of the people covered, for example, had any access to Butrans. And every drug plan that covered lidocaine patches, which are not addictive but cost more than other generic pain drugs, required that patients get prior approval from the insurer for them.

Moreover, we found that many plans make it easier to get opioids than medications to treat addiction, such as Suboxone. Drug plans covering 33.6 million people include Suboxone, but two-thirds require prior authorization. And even if they do approve coverage, some insurance companies have set a high out-of-pocket cost for Suboxone, rendering it unaffordable for many addicts, a number of pharmacists and doctors said.

In his letters, Manchin asked UnitedHealth and Anthem to share their plans for addressing the crisis. “We have lost too many Americans to the opioid epidemic,” he wrote. “I hope that your company will be a part of the solution.”

by Paul Kiel with Hannah Fresques

Novasha Miller pushed through</span> the revolving doors of the black glass tower on Jefferson Avenue last December and felt a rush of déjà vu. The building, conspicuous in Memphis’ modest skyline along the Mississippi River, looms over its neighbors. Then she remembered: Years ago, as a teenager, she’d accompanied her mother inside. Now she was 32, herself the mother of a teenager , and she was entering the same door, taking the same elevator. Like her mother before her, Miller was filing for bankruptcy. She’d cried when she made the decision, but with three boys and one uneven paycheck, every month was a narrow escape. A debt collector had recently won a court judgment against her and, along with that, the ability to seize a chunk of her pay. Soon, she would be forced to decide between groceries or electricity. Bankruptcy, she figured, despite its stink of shame and failure, would stop all that. She could begin anew: older, wiser, and with a job at a catering company that paid $10.50 an hour, a good bump from her last one. She could keep dreaming of a life where she had money left over at the end of each month, a chance of one day owning a home. What Miller didn’t know when she swallowed her pride and called a local bankruptcy attorney is that she would probably end up right back where she started, with the same debts, in the same crisis. For the black debtors who, for generations, have made Memphis the bankruptcy capital of the U.S., the system delivers neither forgiveness nor renewal. Up on the sixth floor of that tower where I met Miller last February, the U.S. Bankruptcy Court for the Western District of Tennessee appeared to be a well-functioning machine. Debtors, nearly all black like her, crowded the wedge-shaped waiting area as lawyers, paralegals and court staff, almost all white, milled about in front. Hundreds of cases are filed here every week, and those who oversee and administer the process all proudly note the court’s marvelous efficiency. Millions of dollars flow smoothly to creditors, to the court, to bankruptcy attorneys. But the machine hides a harsh reality. When [ProPublica analyzed consumer bankruptcy filings nationwide](https://projects.propublica.org/graphics/bankruptcy-data-analysis), the district stood out, both for the stunning number of cases in which debtors were unable to get relief, and for the reasons why. In Memphis, an entrenched legal culture has made bankruptcy a boon for attorneys while miring clients like Miller in a cycle of futility. Under federal bankruptcy law, people overwhelmed by debt have a choice: They can either file under Chapter 7, which wipes out debts and, since most filers lack significant assets, allows them to keep what little they have. Or they can choose Chapter 13, which usually requires five years of payments to creditors before any debts are eliminated, but blocks foreclosures and car repossessions as long as debtors can keep up. In most of the country, Chapter 7 is the overwhelming choice. Only in the South, [in a band of states stretching from North Carolina to Texas](https://projects.propublica.org/graphics/bankruptcy-chapter-13), is Chapter 13 predominant. The responsibility of knowing which path to pick falls to those seeking relief. In Memphis, about three-quarters of filings are under Chapter 13. That’s how Miller filed. She thought the two chapters were “the same,” she told me. Initially, they are. Upon filing, debtors are shielded from garnishments and debt collectors. But whereas under Chapter 7 those protections are generally made permanent after a few months, under Chapter 13 they last only as long as payments are made. Most Chapter 13 filers in Memphis don’t last a year, let alone five. As efficiently as cases are opened, they are closed — usually because debtors fail to keep up with payments, according to a ProPublica analysis of court data. In 2015, over 9,000 cases in the district were dismissed — more cases than were *filed* in 22 other states that year. Less than a third of Chapter 13 cases in the district result in a discharge of debts. And when their cases are dismissed, debtors are often in worse straits, because as they struggled to make payments, the interest on their unpaid debts continued to mount. Once the refuge of bankruptcy is gone, the debt floods back larger than ever. They’ve borne the costs of bankruptcy — attorney and filing fees, a seven-year flag on their credit reports — without receiving its primary benefit. A system that is supposed to eliminate debt instead serves to magnify it. Driving this tremendous churn of filings is a handful of bankruptcy attorneys with what sounds like an easy pitch: immediate relief, for free. In Memphis, it typically costs around $1,000 to hire an attorney to file a Chapter 7, but most attorneys will file a Chapter 13 for no money down. Ultimately, the fees for Chapter 13 filings are higher — upwards of $3,000 — but the payments are stretched over time. For many people, this is the only option they can afford: debt relief on credit. For attorneys, they gain clients — and a regular flow of fees — they might not otherwise get, even if few of their clients get lasting relief. For black filers in Memphis, relief is particularly rare. They are more likely than their white peers to file under Chapter 13 and less likely to complete a Chapter 13 plan. Because failure is so frequent in Memphis, many people file again and again. In 2015, about half of the black debtors who filed under Chapter 13 in the district had done so at least once before in the previous five years. Some had filed as many as 20 times over their lifetimes. Here, bankruptcy is often not the one-time rescue it was envisioned to be, but rather a way for the poor to hold on to basic necessities like electricity for a couple months. “The way we have it set up, our culture, has a lot of unintended consequences,” said Judge Jennie Latta, one of five bankruptcy judges in the Western District of Tennessee. Since 1997, when she took the bench, the racial disparities in Memphis have been evident, she said. “It was troubling to me then, and it’s still troubling to me.” When I asked judges, trustees, who administer the cases, and debtor attorneys what could be done to reduce racial disparities and improve outcomes, I was mostly met with resignation. I heard a lot about the poverty in Memphis and a legal culture with deeply rooted traditions. But ProPublica’s analysis identified bankruptcy attorneys in Memphis who had much more success in getting their black clients out of debt. These attorneys had a different approach, preferring Chapter 7 to Chapter 13, and, crucially, allowing more flexibility in what clients paid upfront in fees. Scrutiny of Memphis is important, because the racial differences we found there [are present across the country](https://projects.propublica.org/graphics/bankruptcy-data-analysis#National). Nationally, the odds of black debtors choosing Chapter 13 instead of Chapter 7 were more than twice as high as for white debtors with a similar financial profile. And once they chose Chapter 13, we found, the odds of their cases ending in dismissal — with no relief from their debts — were about 50 percent higher. Meanwhile, the $0-down style of bankruptcy practiced in Memphis, long common across the South, is quietly growing in popularity elsewhere. Chicago in particular has seen an explosion of Chapter 13 filings in recent years. A recent study found that [the “no money down” model is becoming more prevalent](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2925899), prompting concerns that it is snaring increasing numbers of unsuspecting debtors and ultimately keeping them in debt. *** About 10 miles south of the black glass tower lies the community of Whitehaven. Famous as the site of Graceland, Elvis Presley’s mansion, its streets are lined with miles of humbler homes, mostly one- or two-bedroom bungalows. The houses reflect the range of financial security among Whitehaven’s almost exclusively black residents: Some lawns are immaculately kept in front of neat, pretty facades, while others run riot with weeds next to broken-down cars. This is where Novasha Miller was born and raised. She went to Hillcrest High on Graceland Drive and still lives in the area. Here, bankruptcy has a startling ubiquity. Count the bankruptcies filed from 2011 through 2015 by residents of Whitehaven, and there is almost one for every three households. Miller’s spiral downward began in late 2014, when she and her sons moved into a $545-per-month apartment in Highland Meadows, a complex pitched on its website as nestled in a “serene woodland setting.” Inside, roads wander around shaded clusters of two-story structures, some with boarded-up doors and windows. Miller soon realized she’d made a mistake by signing the lease. Roaches emerged every time she cooked, she said. Underneath the kitchen sink, mold was spreading that seemed to aggravate her 10-year-old son’s asthma. The stove broke; then bedbugs arrived, leaving telltale marks up and down her and her boys’ arms. Despite her calls and complaints, she said, management didn’t fix the mold issue and told her she’d have to pay for an exterminator herself. Finally, she decided to move. She wrote a letter saying she was breaking her lease and explaining why. “My kids’ health is more important than anything, and I just had to leave,” she told me. (The company that manages Highland Meadows did not respond to requests for comment.) A couple of months after she moved, Absolute Recovery Services, a collection agency, sent her a letter saying she owed $5,531 — a total that seemed inflated to Miller. If she didn’t pay up immediately, the agency wrote, it might sue. It followed through the next month, tacking on a $1,844 attorney fee, for a total bill of $7,375. Derek Whitlock, the attorney who represented Absolute Recovery Services in its suit against Miller, provided ProPublica with an accounting of Miller’s debt. Only $1,635 was due to back rent; the rest stemmed from eight different types of fees — all of which, Whitlock said, Miller had “contractually agreed to.” Miller’s lease had also stated that residents were “responsible for keeping the premises free from infestation of pest, etc.,” he said. With no attorney to represent her, Miller went to court. Delayed by a search for parking, she missed her case, and Absolute Recovery won a judgment against her. A court employee told her the agency could soon move to garnish her paycheck, she said. Under Tennessee law, debt collectors can seize up to a quarter of debtors’ take-home pay, and in Shelby County, which contains Memphis, they sought to do so in over 21,000 cases in 2015, according to a ProPublica analysis of court records. Such garnishments are [far more common in black neighborhoods](https://www.propublica.org/article/debt-collection-lawsuits-squeeze-black-neighborhoods). “I cried, stressing at work,” said Miller. “I couldn’t work, trying to figure out what to do.” At the time, Miller earned $9 an hour working for a catering company where her hours were often cut without warning. Although she’d never had an extended stretch of unemployment, the last several years had been a struggle. She still carried $19,000 in student loans from a cosmetology program, and a $1,100 loan from a car title lender, TitleMax, which she’d used to cover one month’s shortfall. TitleMax routinely lends at annual interest rates above 150 percent in Tennessee, and every month Miller had to come up with about $100 in interest to keep the company from seizing her 2003 Pontiac Grand Prix. If Absolute Recovery garnished her wages, Miller stood to lose her apartment, her electricity or the car she drove to work. The pressure, she said, pushed her into bankruptcy court. “It’s hard out here,” she said. “I hate that I had to go through it just to keep people from garnishing my check.” She Googled “bankruptcy attorney” and landed on the website of Arthur Ray, who has been practicing in Memphis since the 1970s. His website was topped with "$0" in large type. “Most of our Chapter 13 bankruptcies are filed for $0 attorney’s fee up front.” She called and made an appointment. *** Earlier this year, I headed to Memphis to meet people like Miller and find out why attorneys there kept funneling their black clients into Chapter 13 plans when so few could complete them. I came armed with [what amounted to a score sheet for each attorney, showing how their black and white clients had fared](https://projects.propublica.org/graphics/bankruptcy-data-analysis#Differences-Among-The-Largest-Firms). ProPublica had taken every case filed in the district over 15 years, paired it with census information and put it on a map. In a starkly segregated city like Memphis, we could deduce the race of their clients with confidence based on where they lived. I caught up with Ray by phone. Like most of the higher volume lawyers in the district, Ray is white while most of his clients are black. About nine out of every 10 of his cases is a Chapter 13. And he was twice as likely to file under Chapter 7 for a white client as he was for a black client. None of this troubles Ray in the least. If Chapter 13 has an evangelist, it’s Ray, who trumpets its attributes unapologetically. In his eyes, debtors need Chapter 13 to train them to get their financial houses in order and instill discipline on their unruly spending. “A Chapter 13 shows people how to live without buying things for that 60-month plan,” he said. “With a Chapter 7, wham bam it’s over, and they’re back to the same old thing, the bad habits that got them in trouble to begin with.” When debtors squander Chapter 7’s power to erase debt, he argued, they are stuck — barred from filing again for eight years. Better to keep that option in reserve for something truly catastrophic, he said. Ray conceded that most of his clients do not successfully complete their Chapter 13 plans, but he argued that wasn’t so bad. “It may be a long time before the creditors come after them,” he said. And when the phone calls and the legal notices do come back, “then they can file again.” I told Ray that Novasha Miller hadn’t understood the difference between the two chapters. Ray was not troubled by this either. As required by law, he said, he provides clients with documents explaining the difference, but any client who asks about Chapter 7 will get an argument from him. “They need to learn how to live not buying things on credit,” he said. Few attorneys are likely to express this paternalistic view as bluntly as Ray, but the idea that bankruptcy courts should rehabilitate debtors instead of simply freeing them of their debts dates back to the 1930s, when, buoyed by creditors’ lobbying efforts, Chapter 13 first became law. It’s a form of bankruptcy that sprang from the South: Started as an experiment by the bankruptcy court in Birmingham, Alabama, it was added to the federal bankruptcy code through a bill authored by a Memphis congressman. To this day, many see Chapter 13 as the more honorable form of bankruptcy because it includes some attempt to repay debts. But when I asked some of Ray’s colleagues why so many of their clients filed under Chapter 13, honor was rarely mentioned. Instead, they said it was about holding on. “Chapter 13 is generally a ‘keep your stuff’ chapter,” is how Bert Benham, a Memphis bankruptcy attorney, put it. Most people who end up filing in the district don’t own much. In 2015, 69 percent of those who filed under Chapter 13 didn’t own a home, and the median, or typical, income was less than $23,000 per year. For many people, the most important thing is keeping their car, a necessity in Memphis, which has little public transportation. Used car lots abound, offering subprime credit. When borrowers fall behind and lenders threaten repossession, Chapter 7 won’t stop that from happening. But Chapter 13 allows secured debts to be repaid over the course of the plan. In theory, loan payments on a car or mortgage can be reduced to an affordable level, providing time to catch up without fear of repossession or foreclosure. Lured by this promise, desperate Chapter 13 filers can spend years caught in a loop. One Whitehaven resident told me how, in order to hold on to her car, she’d filed under Chapter 13 four times since 2011. The first time, she lost her job a year and a half after filing, and her case was dismissed after she fell behind. She immediately filed again to keep the car for job interviews, using unemployment benefits to make the payments until she couldn’t. She then filed a third time. Finally in 2014, after her third dismissal, she got a new part-time job paying $11 an hour and filed again. She still has two years of payments to go and will have spent most of her 30’s trying to hold on to her car. “If I’d known,” she said, “I just would have let my car go.” Bernise Fulwiley, 60, filed for Chapter 13 in 2014 to avoid foreclosure on her home, a brick bungalow with a large maple in the yard on a corner in Whitehaven. The following year, she lost her warehouse job when she required foot surgery and couldn’t keep up her payments. She got another warehouse job, earning $9.50 an hour, and filed again. She has kept up the payments for two years, and is determined to make it for three more. “‘God, go before me. Open this door! Help me, Lord!’ That’s been my prayer,” she said. “I ain’t gonna never give up.” For decades, the most prolific bankruptcy firm in Memphis has been Jimmy McElroy’s, known for its long-running TV commercials featuring the now-deceased Ruby Wilson, a legendary blues and gospel singer dubbed the Queen of Beale Street. At the end of 30-second spots, she exclaimed, “Miss Ruby sings the blues, and you don’t have to!” McElroy, a mild-mannered white man in his 70s with a genteel lilt to his speech, told me that “the ultimate success” for a Chapter 13 filing is “to pay it out, get a discharge, get out of debt. And then learn to live within your means.” From 2011 through 2015, McElroy’s firm filed over 8,000 Chapter 13 cases and fewer than 900 Chapter 7 cases. About 80 percent of his clients come from predominantly black neighborhoods. But “ultimate success” is rare at his firm. Only about one in five of the Chapter 13 cases [filed by his black clients](https://projects.propublica.org/graphics/bankruptcy-data-analysis#Differences-Among-The-Largest-Firms) reached discharge, a rate typical for the district. When I asked why, McElroy, whose office is in the same tower as the bankruptcy court, said clients generally “get the temporary relief they needed,” but then things just happen: “They lose their job. They get sick. They get a divorce.” Sometimes Chapter 7 does seem like a better choice, he said, but the client can’t afford to pay the attorney fee, which, at his firm, is about $1,000. In those cases, he’ll advise them to start with a Chapter 13, since it’s “more affordable to get into,” he said. “I tell them … ‘If you get in a better situation, we can convert later.’” Debtors are, indeed, allowed to switch from Chapter 13 to Chapter 7 after their cases have begun, although it typically requires paying an additional attorney fee. But this rarely happens in the district. Only about 5 percent of Chapter 13 filings since 2008 converted to Chapter 7, according to our analysis. For McElroy’s firm’s cases, it was 2 percent. *** Often in Memphis, the whole goal of bankruptcy is just to address basic needs, even if only for a month or two. Last year, Memphis Light, Gas and Water cut off customers’ electricity for nonpayment 98,000 times. It’s an “astoundingly high” number given that Memphis provides electricity to fewer than 400,000 customers and “far higher than any other large urban utility that I’ve seen,” said John Howat, senior energy analyst with the National Consumer Law Center. Nearly half the Chapter 13 cases filed by black residents in the district had utility debt, our analysis of 2010 filings found. The typical debt with the utility company was $1,100. For customers with poor credit, the utility has a policy of disconnecting service within a couple months if the arrears grow beyond $200. MLGW does offer programs for low-income customers and installment plans for those who fall behind. “We have probably some of the most liberal customer assistance programs of any utility in the country,” said Gale Carson, spokeswoman for MLGW. But that assistance is limited to just a few thousand households. And the installment plans require customers to make the payments in addition to their normal monthly bills. By declaring bankruptcy, debtors can start a monthly Chapter 13 plan tied to their income and get the power turned back on within a month or so. In February, I visited Michael Baloga, an attorney at Long, Umsted, Jones & Kriger, at the firm’s downtown storefront, just down the street from the Shelby County Jail and next door to a bail bond agent. “Chapter 13 bankruptcy can be a necessary evil at times,” he told me. “Like, for today, there are people who are coming in because it’s cold, and they don’t have electricity.” Baloga said he didn’t like to file cases just for that reason. “But on the other hand, am I going to let them sit and freeze in their home because they don’t have it? … I know that they’re going to file the bankruptcy and that they’re not going to stay in it very long. In the alternative, am I just going to turn them away and say, ‘No, you’re not going to get a chance at all?’” For the firm’s predominantly poor and black clientele, [the chances are remarkably low](https://projects.propublica.org/graphics/bankruptcy-data-analysis#Differences-Among-The-Largest-Firms): Only one in 10 of the cases result in a discharge. Most don’t last six months. Using bankruptcy this way “seems like using a sledgehammer to hang a picture,” said Judge Latta. But she understands why debtors do it. “I think bankruptcy, in Memphis anyway, is very much part of the social safety net,” she said, “and all these problems fall down into it.” About 18,000 times each year, Tennessee suspends the driver’s license of a Shelby County resident for failing to pay a traffic fine, according to state data obtained by Just City, a Memphis nonprofit advocacy organization. About 84 percent are black drivers, although only half of Shelby County’s residents are black. In 2010, about a quarter of black residents filing Chapter 13 had outstanding debt with the Shelby County General Sessions Criminal Court, which handles mostly misdemeanors and traffic offenses, our data shows. Their typical debt was around $1,600. Court officials said licenses are only suspended if defendants fail to pay fines within 12 months. The court offers installment plans, including one called the Driver’s Assistance Program that allows drivers to regain their licenses. But only about 230 people were enrolled in the program as of March, they said. For those who can’t afford or don’t qualify for the court’s programs, Chapter 13 provides an answer. They can get their licenses reactivated within a matter of months and stretch payments over five years, if they make it that long. Such fines can’t be eliminated through Chapter 7. In Chicago, similar pressures have led to a recent boom in Chapter 13 filings. Chapter 13 filings by black residents in the Northern District of Illinois rose 88 percent from 2011 to 2015, we found. There, the issue is mostly parking tickets, according to ProPublica’s analysis and [a recent academic study](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2845497) of filings in Cook County. But, like Memphis, it’s overwhelmingly black debtors who file for Chapter 13 to forestall license suspensions or car seizures. Black households are particularly vulnerable to financial difficulties like these. They have [less income](http://www.pewsocialtrends.org/2016/06/27/1-demographic-trends-and-economic-well-being/), [fewer assets](http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/), and [less financial stability](http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/03/how-income-volatility-interacts-with-american-families-financial-security) than white ones — all [deficits](http://www.insightcced.org/wp-content/uploads/2015/08/Umbrellas_Dont_Make_It_Rain_Final.pdf) with [deep roots](https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/). When they are [hit with financial emergencies](http://www.pewtrusts.org/~/media/assets/2015/10/emergency-savings-report-1_artfinal.pdf?la=en) (a cut in pay, a needed car repair), they are [less likely to have the resources to withstand them](http://www.pewtrusts.org/en/about/news-room/press-releases/2015/11/18/pew-finds-american-families-ill-equipped-for-financial-emergencies). The same vulnerabilities that make black Americans more likely to file for bankruptcy make them less likely to succeed in bankruptcy. In Memphis, that means the debtors who use the bankruptcy system the most — low-income black debtors — fare the worst. “I say all the time that in Memphis, debtors don’t earn a living wage,” said Sylvia Brown, one of the two trustees for Chapter 13 cases in Memphis. *** A few floors above the bankruptcy court are the offices of Cohen & Fila, a firm with a mostly poor clientele and [one of the highest volume practices in the district](https://projects.propublica.org/graphics/bankruptcy-data-analysis#Differences-Among-The-Largest-Firms). I asked Tom Fila, a Yankee transplant who has practiced bankruptcy law in Memphis for more than 20 years, about one of his clients: The firm had filed 17 cases on her behalf, all but two under Chapter 13. She was one of at least 465 people who had filed for bankruptcy 10 or more times in the district between 2001 and 2015, ProPublica’s analysis found. These repeat filers tend to be among the poorest. Fila bristled at the implication that his firm had filed the cases for any reason but the best interest of the client. “I’m not making money on these cases, and I probably shouldn’t file them,” he told me. “I often tell my clients that repeated filings aren’t doing them any good. They are ending up in the same spot they started in, only now they have multiple bankruptcy cases on their credit report … but at the end of the day I’m not the one living without utilities or being evicted or being without transportation.” Of course, most of the time attorneys in the district do get paid something. When we analyzed the Chapter 13 cases filed in 2010, we found that, on average, attorneys in the district collected $1,340 per case out of their full $3,000 fee. Some firms, like Fila’s, collected much less (about $700), and some collected more. But what has made bankruptcy a viable business for the biggest firms in Memphis for so long is the sheer volume. From the 12,000-plus Chapter 13 cases they filed in 2010, we estimate that attorneys reaped at least $16 million in attorney fees over the next five years. McElroy’s firm, the largest, collected at least $2 million. Things have worked this way in the district for as long as anyone can remember. The district’s chief judge, David Kennedy, who has presided over cases since 1980, said attorneys have been charging $0 down to file Chapter 13s at least since the 1970s. He sees no clear need for reform. Chapter 13 “provides, I think, better relief, depending on the circumstances,” he said, adding that the large number of dismissals is not necessarily bad. “Just because it doesn’t go to discharge doesn’t mean it’s a failed case.” A homeowner might file Chapter 13 to stop a foreclosure, he said, then use the breathing room to work out a loan modification with the mortgage servicer and drop the case voluntarily. That undoubtedly does happen. But most debtors in the district don’t own a home. Judge Latta said efforts to help the poor file under Chapter 7 for free have met with resistance. “We get a lot of pushback on pro bono programs here,” she said. “\[Attorneys\] say, ‘But, judge, we can put them in a Chapter 13, and we can get paid for that.’” It’s no secret in Memphis that bankruptcy works differently outside the South, but the scope of that contrast is staggering. In 2015, for example, there were 9,000 Chapter 13 cases filed in Shelby County, while in Brooklyn, New York, there were fewer than 300. Brooklyn has a similar poverty rate, median income and higher housing costs. Like Shelby County, it has a large black population. It also has 1.6 million more people. What’s the biggest difference? How bankruptcy attorneys are paid. In Brooklyn, attorneys usually ask for around $2,000 upfront to file a Chapter 13, said Michael Macco, a trustee in the Eastern District of New York. As a result, poorer households simply can’t afford to file. The typical Chapter 13 debtor who hired an attorney in Brooklyn in 2015 was a middle-income homeowner with $420,000 in assets — over 40 times more in assets than filers in Shelby County. The reasons for vast differences like these among courts are largely arbitrary. While bankruptcy is a federal institution, ruled by laws made in Washington, D.C., each local court is essentially its own kingdom with its own customs shaped by the judges, trustees and attorneys who work there. Scrutiny of these differences, and how they affect debtors, has been scant. While judges like Kennedy are untroubled by the flood of unsuccessful Chapter 13s, our analysis found Memphis attorneys who have built successful bankruptcy practices in a different way. In an office park on the eastern edge of the city, I met Jerome Payne, who has filed more Chapter 7s on behalf of black clients than anyone in the district in recent years, despite not being in the top 10 firms in terms of total volume. That alone would make Payne stand out. But Payne is also, unlike all but a few debtor attorneys in Memphis, black. A cop turned nurse turned attorney, Payne, 66, has been practicing bankruptcy law in Memphis since the 1990s. Inside his office, the thick carpeting and friendly banter between Payne and his two long-standing employees give the place a homey feel, albeit a home with files stacked everywhere and large binders labeled “GARNISHMENTS” spilling out of a cabinet. African-American identity is a major part of his practice. When his firm sends out letters to prospective clients — usually people who have been sued over a debt – he tries to make sure they know. “I use black heritage stamps,” he said. Sometimes he uses Kwanzaa stamps. He includes a page with inspirational sayings, like one with a quote from Marcus Garvey, a leader of the Black Nationalist movement, who is depicted with his body in the shape of Africa. The emphasis on blackness is not just a marketing gimmick, he said. Because the clients are “people who look like me,” he said, “they feel more comfortable with me.” And that, he said, may help in convincing debtors that Chapter 7 is a better choice. Payne’s challenge, he said, is getting them “to take the emotions out of a home, the apartment, out of the vehicle” and decide that they are better off without the debt. This discussion is what he calls his “come-to-Jesus meeting.” Contrary to Arthur Ray’s emphasis on teaching his clients financial discipline through five years of payments, Payne promotes the discipline of letting go of possessions they can’t afford. “Me being African American, and me understanding my community, maybe I’ve been more successful in showing them that this is not the way you ought to go,” he said. Crucially, Payne also approaches fees differently. Whether it’s a Chapter 7 or Chapter 13, the down payment is usually a couple hundred dollars, and his clients can pay the remainder in installments. He doesn’t file Chapter 13 cases for no money down, because he just doesn’t like the idea. And he has an employee, instead of him, discuss fee arrangements with clients, he said, because “I found that it colors the way that I do business.” Brad George is another attorney in the district who often files Chapter 7 cases for his clients. His approach is simple. “It’s not rocket science, I can tell you that,” said George, who is white and has practiced bankruptcy in Memphis for 20 years. If there is a good reason to do a Chapter 13, like a threatened foreclosure or driver’s license issue, then he will file that way. Otherwise, he said, “I think you should try and always, always, always do a \[Chapter 7\].” To file a Chapter 7 with George, it costs the debtor $555, with most of that due upfront. That is about half of what many other attorneys charge in Memphis. But, to George, it just seems like enough. “I figure I spend about two hours on average per Chapter 7 \[case\],” he said. “So that’s pretty fair, I’d say.” George also doesn’t file Chapter 13 cases for no money down, instead asking for around $200 dollars, giving his clients a much more balanced choice between how much money they have to come up with to file Chapter 7 versus Chapter 13. George’s black clients file under Chapter 7 almost half the time, according to our analysis, a rate that is almost two and a half times what is typical in the district. There is also little racial disparity in what portion of his black and white clients end up in Chapter 7. Payne and George agree that their flexibility with fees is likely a key reason they are able to file more Chapter 7 cases for black clients. There are understandable reasons why attorneys tend to be less flexible with Chapter 7 fees. When debtors receive a discharge of their debts at the end of the case, outstanding fees to their attorneys are also wiped out. Any further payments are voluntary. As a result, debtor attorneys — in Memphis or anywhere else — generally require the entirety of their fee upfront. To address this problem, some scholars [have called for Congress to change the law](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2925899) to make attorney fees clearly exempt from discharge. Such a change could have a large effect. The firm that files the most bankruptcy cases in Atlanta, for example, files Chapter 7 cases for $0 down, with the entirety of the fee due through an installment plan that lasts several months. The chief judge in the Northern District of Georgia has ruled that such arrangements are legal, and other large firms in the Atlanta area have adopted the practice. The result is clear. In the heart of the South, most of the filings in the Northern District of Georgia are under Chapter 7 — compared to less than 30 percent in the rest of the state. And notably, black debtors in that district file under Chapter 7 almost half the time, a rate significantly higher than even the white debtors in the Western District of Tennessee. *** For now, things in Memphis continue as they seemingly always have. In April, less than six months after it began, Novasha Miller’s Chapter 13 case was dismissed. Though she hasn’t heard anything yet, her old landlord’s collection agency is again free to attempt garnishment of her wages. Miller said that a miscommunication with her attorney led to the dismissal. After she changed jobs again (the new one pays a little bit less, $9.36 an hour, but it’s full-time and she likes the people), she notified Ray’s office, she said, but the plan payments were never set up to be automatically withdrawn from her paychecks. However it happened, having paid about $600, all of which was absorbed by court and attorney fees, she was back to square one. Choosing Chapter 7 could have resulted in her emerging from bankruptcy with her student loan as her only remaining debt. Instead, her debts, having gone unpaid for months, were now larger — she’s not clear yet just how much — the interest applied as if the bankruptcy had never happened. She is thinking of filing again, maybe with a different attorney. And hopefully, she said, this time it’ll work out.

by Paul Kiel and Hannah Fresques

by Hannah Fresques and Paul Kiel

by ProPublica

Have you seriously considered filing for bankruptcy any time in the last ten years?

ProPublica is working on a series of stories about the bankruptcy system. If you hit financial difficulties at any time in the last ten years and really thought about filing for bankruptcy, we want to hear from you. And we especially want to hear from you if you did not file — maybe because you couldn’t afford an attorney or you decided bankruptcy wouldn’t help. Whatever the reason, we’d like to hear it.

You can either text “hello” to 317-707-6371, or fill out the form below. You’ll inform our reporting on whether the bankruptcy system is providing help to those who need it.

We’ll keep you updated on what we find. If you have any other questions about the series or our work, we’re also checking our inbox at bankruptcy@propublica.org.

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by Paul Kiel

The two main bankruptcy options available to people overrun by consumer debt are Chapter 7 or Chapter 13. The options differ greatly in how they work and the relief they provide. Below are the basic attributes of each chapter, as well as statistics drawn from ProPublica’s analysis of bankruptcy filings from 2008-2015 to show what types of debtors are choosing each chapter and how successful they are at having their debts wiped away or discharged. This guide is part of our series on bankruptcy, which takes a close, critical look at the system and its shortcomings.

Chapter 7 is a form of liquidation, meaning the debtor’s assets are divvied up among creditors. However, 95 percent of cases involve debtors who do not have assets above the legal threshold, which is set by state law, and therefore don’t have to give up anything. The median Chapter 7 case lasts three and a half months from filing to discharge. About 96 percent of debtors who file under Chapter 7 receive a discharge of their debts.

When a debt is discharged, it is no longer legally owed. Unsecured debts (e.g. credit cards, medical bills, etc.) are typically dischargeable with some important exceptions like student loans. Secured debts (e.g. a mortgage, a car loan) are dealt with differently in a Chapter 7: Typically a debtor can either relinquish the secured asset or keep it by continuing payments.

Chapter 13 is a form of repayment plan. The debtor’s obligations are combined in one, regular payment (although certain ongoing obligations like utility bills might be paid outside the plan) calibrated to the debtor’s income. A Chapter 13 plan often involves paying a portion of unsecured debts.

A Chapter 13 plan can last from three to five years, but most plans are five-year plans. In cases filed between 2008 and 2010, about 41 percent of debtors who filed under Chapter 13 received a discharge of their debts. Another 10 percent first filed under Chapter 13, but then converted to Chapter 7 and received a discharge that way.

Why would someone choose one or the other?

Speaking generally, the primary benefit offered by Chapter 7 is near-guaranteed debt relief. Chapter 13 primarily offers benefits related to secured debt. For example, Chapter 13 stops foreclosure proceedings so debtors who have fallen behind on their mortgages can catch up over time without the danger of losing their homes.

Also, if someone has filed for bankruptcy in recent years and successfully discharged their debts, they might be forced to choose Chapter 13, since Chapter 7 has stricter rules about refiling. After receiving a Chapter 7 discharge, for example, debtors are barred for eight years from receiving another one, but they would only have to wait four years to file under Chapter 13. There is no such time limit if the debtor’s earlier case was dismissed.

What is the effect of filing on someone’s credit score?

Bankruptcy is a negative credit event, but the effect isn’t the same for everyone.

Initially, Chapter 7 and Chapter 13 have the same effect on a credit score, which diminishes over time. The main difference is that the flag for a Chapter 13 bankruptcy is removed from the debtor’s credit history seven years after filing, while a Chapter 7 bankruptcy stays on there for 10 years.

Because people who file for bankruptcy usually have fallen behind on a number of debts, the typical bankruptcy filer has a credit score in the range of 525 to 575, which is lower than about 80 percent of the population with a score. It is a score that is so low that when someone files for bankruptcy, their credit score tends to actually jump up in the following year. This is because the negative mark of a bankruptcy is outweighed by the positive effect of the debt relief.

How much does an attorney cost?

A comprehensive study of attorney fees put the average price of a Chapter 7 in 2009 at around $1,000 and a Chapter 13 at around $2,600. Those averages would probably be at least 25 percent higher if measured today, though, and fees vary from court district to court district. For example, in Memphis the typical Chapter 13 attorney fee is now $3,800.

Chapter 7 attorney fees are generally due in full before filing, although there are places (again, it depends on where you live) where attorneys will offer an installment plan. In a Chapter 13, part of the fee is typically paid up front, with the remainder paid through the plan. In certain areas of the country, particularly in the South, attorneys will start a Chapter 13 case for very little — frequently $0 — paid up front. This can be a problem when debtors choose Chapter 13 simply because they can’t afford Chapter 7. Low-income debtors (with household annual income below about $35,000) are at particular risk of failing to complete Chapter 13 plans and having their cases dismissed.

What happens if someone’s case is dismissed without a discharge?

Almost all Chapter 7 cases end in a discharge, so this is mostly a concern for Chapter 13 filers.

Debtors with lower incomes are less likely to reach discharge through Chapter 13. Furthermore, black debtors are more likely than white debtors to choose Chapter 13, but they are less likely to reach discharge, as we show in this story.

When Chapter 13 cases are dismissed, the protection of bankruptcy is removed. Because the payments that debtors made during the plan were typically less than what they contractually owed, they will likely find themselves further behind on their debts.

How does having an attorney affect someone’s chances?

Debtors who are represented by attorneys tend to fare far better than those who aren’t.

Only about 8 percent of debtors who filed under Chapter 7 from 2008-2015 did so without an attorney’s help. About 72 percent of those cases ended in the debt being discharged. By comparison, debtors who were represented by attorneys received discharges 98 percent of the time.

About 9 percent of debtors who filed under Chapter 13 from 2008-2015 did so without an attorney’s help. It is very rare for such cases to reach discharge. Only about 4 percent of the Chapter 13 pro se cases filed from 2008-2010 ended in discharges.

How many people choose each chapter? What is the typical financial profile of filers?

Nationally, about 71 percent of consumer filings were through Chapter 7 during the years following the Great Recession (2009-2011), but Chapter 7 filings fell off in more recent years (2013-2015), when they accounted for 66 percent of filings. The median Chapter 7 debtor from 2008-2015 had annual income of about $35,000.

In the South, Chapter 13 is far more popular, partly due to lower up-front attorney fees. In nine states (Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas), at least half of consumer filings are under Chapter 13. Click here to see a map that shows what percentage of filings are under Chapter 13 in each county nationwide.

This big regional difference reflects a difference in what sort of debtors use Chapter 13. Outside the South, Chapter 13 is overwhelmingly used by middle-income homeowners, while in the South, a lot more low-income debtors (with income similar to Chapter 7 debtors) file under Chapter 13, and many don’t even own a home.

What happens to people in financial trouble who don’t file for bankruptcy?

There are plenty of reasons, some good, some bad, not to file for bankruptcy. But we’d like your help answering this question. Have you considered filing for bankruptcy any time in the past 10 years? Do you know someone else who did — or is right now? Fill out our survey and tell us about your experience. We’d like to hear from as many people as possible in the coming months to inform our reporting on how the system is working — or not. Please share.

by Alec MacGillis

Tenants of the Baltimore-area apartment complexes owned by Jared Kushner’s real-estate company have brought a class-action lawsuit against the firm’s property management arm over its aggressive pursuit of tenants for allegedly unpaid rent.

The lawsuit, filed Wednesday in Circuit Court for Baltimore City, alleges that the management company and related corporate entities have been improperly inflating payments owed by tenants by charging them late fees that are often unfounded and court fees that are not actually approved by any court. This, the lawsuit charges, sets in motion a vicious cycle in which tenants’ rent payments are partly assessed toward the fees instead of the actual rent owed, thus deeming the tenant once again “late” on his or her rent payment, leading to yet more late fees and court fees. Making matters worse, the 5 percent late fees are frequently assessed on principal that includes allegedly unpaid fees, not just the rent itself. Tenants are pressured to pay the snowballing bills with immediate threat of eviction, the suit alleges.

“The routine practice of charging tenants illegal fees combined with filing eviction proceedings against tenants who have paid their rent on time is predatory and destructive to hard-working Marylanders and their families. This is yet another example of corporations profiting from deceptive policies,” said Chelsea Ortega of Santoni, Vocci & Ortega, a Baltimore-area firm that has also brought class-action suits for similar “fee-churning” practices against two other large property management companies in the area. In this case, the firm is working with Brown Goldstein & Levy, a Baltimore firm specializing in civil rights cases, and the Public Justice Center, a civil legal aid office based in Baltimore that has also brought cases against area landlords over similar practices.

A spokesman for the Kushner Companies declined to comment on the particulars of the lawsuit. “We will respond to the complaint at the appropriate time in the legal proceedings,” he said.

The family-controlled Kushner Companies purchased apartment complexes with about 5,500 units in the Baltimore area as part of a $371 million deal in 2012, and added three more complexes a year later for $37.9 million. After several subsequent deals, the company now manages a total of 15 complexes in the Baltimore area, with a total of close to 9,000 units. Jared Kushner, who was instrumental in the purchases, stepped down as the company’s CEO when his father-in-law, Donald Trump, won the presidency. Kushner has become one of Trump’s senior advisers in the White House.

The suit follows a May 23 article jointly published by ProPublica and The New York Times Magazine that detailed the Kushner Companies’ highly litigious dealings with the people who rent its apartments. The company, which shares ownership in some of the complexes with other partners but runs them all through its Westminster Management subsidiary, has brought hundreds of cases against current and former tenants in local courts.

Many of the cases involved former tenants who had moved out of the complexes several years prior to the Kushner Companies’ purchase of them. And some involved tenants who possessed clear evidence that they did not owe the money the company claimed, yet were pursued anyway for several years, with late fees and court fees piling on top of the original claims. The article also described shoddy conditions that many tenants contend with at the complexes, including mice, leaky roofs and mold.

In response to questions for the May 23 article, the Kushner Companies’ chief financial officer said that its approach when it came to pursuing tenants was in line with industry practices and that it had a fiduciary duty to its ownership partners to collect all money owed by current and former tenants.

A subsequent report by The Baltimore Sun last month found that in some cases, Kushner Companies went to even greater lengths: Since 2013, corporate entities affiliated with the company sought the civil arrest of 105 former tenants at the company’s 17 Maryland complexes (it also owns two in the Washington suburbs) for failing to appear in court to face allegations of unpaid rent. Twenty former tenants were in fact briefly detained, the Sun reported.

In response to the stories, Maryland’s two U.S. senators and four of its House members, all Democrats, last month sent a letter to Kushner Companies asking for some of the firm’s records. The lawmakers noted that the complexes rely heavily on tenants with Housing Choice (Section 8) rental vouchers, and thus must comply with a host of Department of Housing and Urban Development regulations. The lawmakers demanded, among other things, all notifications from HUD, public housing authorities, inspection companies or local jurisdictions identifying defects in the complexes in the past three years; all complaints from residents about maintenance and repair issues over the past three years; and information regarding the role played by Jared Kushner.

One of the two named tenants in the class-action suit filed Wednesday is Tenae Smith. Smith and her partner have lived at Dutch Village, a Kushner-owned complex on the northern edge of Baltimore, since 2009. Last September, water started leaking from the bathroom ceiling whenever it rained. She told the rental office repeatedly in the months following, but no one came to fix it. Finally, during a hard rain in December, she slipped on the wet bathroom floor, and had had enough. She filed a rent escrow claim in court on Dec. 19, seeking to withhold her rent until the problem was fixed. But the city inspector didn’t come to verify the problem until Jan. 11. Dutch Village finally started work on the problem on Jan. 24, just before her Jan. 30 rent escrow hearing. The judge dismissed the case, but Smith kept fighting, insisting on a reduction in rent for the months when the problem went ignored. Then, during a hard spring rain, the patched ceiling leaked again, suggesting the problem was with the roof.

Smith, who has two young children, has been in court countless times this year, arguing for her rent escrow claim and against Dutch Village’s suits demanding payment of her $795-per-month rent. Her family has also been dealing with bedbugs, a leaky sink and mold in the utility closet.

The class-action suit alleges that Dutch Village at various points charged Smith with fees for “writ filing” and “legal-summons” ranging up to $80 even though no court had awarded such fees. If Smith did not pay all of the fees along with her rent, Dutch Village sometimes rejected her rent payment, leading to yet more fees. For instance, when she paid her $795 rent for this past July, it rejected the payment and said she in fact owed $944.70 because of accumulated fees, a sum that would grow with additional late fees, agent fees and baseless court fees if it was not paid in full.

“I would pay my rent, and if I was late, I would pay a 5% late fee, but the fees kept adding up,” Smith said in a statement paired with the lawsuit. “I work full-time and made regular payments, but they kept taking me to court for eviction and piling on the fees.”

The other named plaintiff is Howard Smith (no relation), a retiree who has lived in the Kushner-owned Carroll Park Apartments in Middle River, east of Baltimore, for 10 years. He has been hit with a string of late fees and court fees and eviction notices even though he has arranged to have his rent automatically debited from his bank account every month. He has also suffered repeating flooding in his ground-floor unit, including in 2015 after a mentally unstable tenant above him left the tub running, causing Smith’s ceiling to collapse. That tenant subsequently shot two employees in the rental office.

The class-action suit alleges that on several occasions in the past two years, after Smith paid his rent in full, Carroll Park misallocated a portion of that payment to non-rent charges, deemed his rent to be late, then charged him a “legal-summons fee,” even though no court had awarded such a fee at the time, as well as a “legal-agent fee,” and then filed an eviction notice to spur payment of the full bill. Smith complied, fearful of eviction.

“Adding small but improper fees to the rent of tenants living paycheck to paycheck, then misallocating rent payments to those fees in order to generate more fees, is a scheme that preys on working-class tenants,” said Andrew D. Freeman of Brown, Goldstein & Levy. “Westminster Management’s misuse of Maryland courts’ eviction proceedings to force tenants to pay these improper fees makes this scheme all the more deplorable. It must be stopped.”

One former tenant pursued by Kushner Companies has already received legal relief. Kamiia Warren, a home health care worker, moved her family out of the Cove Village complex in Essex, just east of Baltimore, in 2010 after her elderly neighbor started behaving erratically toward them. Warren got the necessary written approval from the on-site manager to leave in advance of her lease’s expiration. But three years later, after Kushner Companies bought the complex and took over management of it, she received notice that a Kushner subsidiary, JK2 Westminster, was suing her for $3,014.08 for having broken her lease.

Warren was initially unable to locate the document showing she had permission to leave, and a Baltimore County judge awarded JK2 Westminster a judgment of nearly $5,000 against her, including court and late fees. The Baltimore-area law firm that handles all of the cases against the Kushner Companies’ local tenants then got a court order to garnish Warren’s wages and bank account — she changed jobs soon afterward, but her bank account was cleaned out.

Around the same time, she got her hands on a copy of the document showing she had received permission to move and presented it in court, but the Kushner attorneys kept up their pursuit, eventually securing a court lien against her for the remaining $4,615 she allegedly owed. That lien has marred her credit record, making it hard for her to secure loans, including the one she would need to launch the small assisted living center she dreams of opening.

But after the ProPublica/New York Times article appeared, featuring her treatment by Kushner Companies, lawyers at the Baltimore office of Ballard Spahr, a nationwide law firm, stepped forward offering to take on Warren’s case pro bono. They contacted the Kushner Companies’ local lawyer, Jeffrey Tapper, and earlier this month, the company agreed to a stipulation releasing Warren from the $4,615 lien — more than seven years after she moved out of Cove Village.

by Paul Kiel and Hannah Fresques

This week we published a deep look at why bankruptcy frequently fails to provide relief to black Americans struggling with debt. The story focused on Memphis, Tennessee — the bankruptcy capital of the nation — where black debtors have for generations been funneled into Chapter 13, which usually requires five years of payments most have no chance of making.

Debt-laden consumers outside the South overwhelmingly file under Chapter 7, which wipes away most debts, our story and analysis shows.

But in recent years, there’s been one big geographic exception: Chicago.

In Northern Illinois, Chapter 13 Filing Rates Have Been Rising Steeply in Black Areas

Chapter 13 filings per 1,000 residents - black census tracts vs. white census tracts

Because of a boom in Chapter 13 filings, the U.S. Bankruptcy Court for the Northern District of Illinois, which includes Chicago, had more consumer filings in 2015 than any other district in the country.

Almost exclusively fueling this rise are residents of the district’s black communities, where the rate of filings has doubled since 2009. This racial disparity isn’t unique to the Chicago area, but there’s hardly anywhere else in the country where the gap is quite so wide. Even controlling for income, the odds of a black debtor in the Northern District of Illinois choosing Chapter 13 instead of Chapter 7 were about four times as high as those of a white debtor. And, as we found nationally, black debtors were less likely to successfully complete their Chapter 13 plans and have their debts discharged.

Why this is happening can be traced to the sort of run-of-the-mill financial hit many Americans face: traffic-related tickets. In Chicago, the failure to pay such tickets can result in a suspended driver’s license or impounded car, crucial lifelines to many low-income families.

In our analysis, we note that the rise in Chapter 13 filings has mainly been driven by black, low-income debtors unable to pay tickets owed to the City of Chicago. By filing under Chapter 13, these people are trying to keep their cars or licenses. Chapter 13 stops seizures and suspensions as long as debtors can keep up payments, but the data shows that most can’t. We also found that the Semrad Law Firm, also known as DebtStoppers, played an outsized role. The firm’s clients are largely black and overwhelmingly file under Chapter 13. From 2012 through 2015, DebtStoppers accounted for about 40 percent of Chapter 13 filings by debtors who lived in mostly black areas.

Semrad did not respond to several requests for comment.

Although the attorney fee for a Chapter 13 in the district is a steep $4,000, debtors typically pay very little of that — anywhere from $0 to a few hundred dollars — up front. The rest is paid through the Chapter 13 payments over time. As we detailed in our story, this gives bankruptcy attorneys an incentive to file cases even when their low-income clients’ prospects for debt relief are poor.

You can read our story on Memphis, which clearly has implications for Chicago as well, here. Our data analysis both explores the racial disparities in bankruptcy on the national level and more locally in the Memphis and Chicago areas.

News applications developer Mike Tigas contributed to this story.

by David Eads, ProPublica and Darryl Holliday, City Bureau

Public meetings are important spaces for democracy, where any resident can participate and hold public figures accountable. City Bureau's Documenters program pays community members an hourly wage to attend and document public meetings, as a way to inform and engage their communities.

How do Documenters know when meetings are happening? It’s not easy. These events are spread across dozens of websites and are rarely available in machine-readable calendar formats like iCal.

To better manage the data, City Bureau and ProPublica Illinois are working together to develop a community open-source project to scrape and store this information in a central calendar. We believe that like Elex, the NPR / New York Times collaboration to make election data easier to work with, joining forces on this data plumbing will yield dividends for City Bureau and ProPublica Illinois. Other organizations and individuals also will find it useful, and having two partners who want the same information for different purposes provides a strong incentive to push the project forward.

Because there are so many calendars in so many formats but only one way to actually store the data, the project also provides a great opportunity for people interested in becoming involved in civic data or data journalism, or who just want to learn how they can contribute to an open-source project. It’s the kind of project that offers many discrete tasks that can be split up among a group with varying skills, skill levels and interests.

On July 30, we announced a call for coders via social media, City Bureau’s newsletter and direct email alerts to Chicago’s various civic tech organizations. Our plan was to meet every Tuesday between 4-8 p.m. at City Bureau’s South Side newsroom to share skills, learn new techniques and build scrapers to collect times, dates and locations of civic and governmental public meetings in Chicago. Some 48 hours later, we had a growing list of sign-ups and a core group of 10 novice and experienced coders at our first working session.

By our third hacking session, four scrapers had been completed and 20 were underway. That same week, the introduction of a code of conduct helped to frame how we would work — in a collaborative, equitable working environment created by our participants in prior weeks. What’s more, one lucky coder left the session with some City Bureau and ProPublica swag.

What’s Next

The Public Meeting Aggregator project was started to respond to a journalistic need for one place to find public meetings. Eventually, it will be integrated into a larger civic journalism plan outlined in City Bureau’s June 27 blog post, “Investing in Our Documenters = Investing in Our Community,” which explains how a $50,000 prototype grant from the Democracy Fund and the Knight Foundation will be used over the next eight months to create a digital platform to manage, coordinate, compensate and track City Bureau Documenters.

In the short term, we’ll provide space for our volunteer civic coders so they can exchange skills on the open-source public meetings aggregator and City Bureau staffers can plan the best use of its $50,000 prototype grant. The goal: to promote a diverse set of coders, build a unique civic platform and expand the Documenters program to other cities. ProPublica will use the event data to better deploy reporters and to examine issues like the accessibility of public meetings.

On Oct. 14, City Bureau will host a “design-a-thon” aimed at designing and vetting a public-facing version of our civic aggregator — complete with a better name for the tool. Much like a hack-a-thon, where coders meet to engage in collaborative computer programming, City Bureau’s design-a-thon is a free day-long event where designers, coders, journalists and community members will work in teams. The goal: to bring together different perspectives and approaches to propose solutions for how to use the event data.

Throughout the day, we'll host trainings by local journalists, designers and coders to help fulfill City Bureau's mission to provide a civic service while democratizing skills, creating shared learning environments and encouraging dialogue across communities.

For more information on how you can get involved, check out City Bureau’s event page.

Want to Get Involved Remotely?

We’ll be meeting at City Bureau’s South Side newsroom through September but you can also contribute to the project remotely. How? Sign up to join City Bureau’s Slack (please be sure to say hello in the #introductions channel) and check out the project’s Github page for a primer on the code, issues and pull requests. If you want to take on a scraper, leave us a comment here next to the appropriate public meeting.

Not a coder? Check out this spreadsheet of Chicago’s public meetings to help us fact-check. Add public meetings that aren’t listed and/or help us fill out columns by leaving comments; the doc is currently read-only but open to comments from anyone.

Want to see a Public Meetings Aggregator for your city? Let us know.

by Paul Kiel

For what appears to be decades, the credit rating agency Equifax has quietly layered three more years of tarnish on the credit histories of hundreds of thousands of people who had filed for bankruptcy under Chapter 13.

While its competitors, TransUnion and Experian, placed a flag on such histories for seven years, Equifax left it on the reports of Chapter 13 filers who failed to complete their bankruptcy plans for 10.

After ProPublica asked about the difference in its policy, the company said it now leaves the flag on for seven years, but refused to say when and why the change was made.

The consequences of Equifax’s harsher policy were likely life-changing for some unlucky people. As Experian warns consumers on its website, “having a bankruptcy in your credit history will seriously affect your ability to obtain credit for as long as it remains on your report. It can also affect your ability to qualify for things like an apartment, utilities, and even employment. Even car insurance rates may be affected.” Without knowing why, consumers could have been turned down for apartments because landlords checked their Equifax report rather than those from Experian or TransUnion.

Why Equifax’s policy was different is unclear and the company would not address it. But that such a discrepancy had gone unnoticed and unaddressed for so long underscores how lightly regulated the industry is.

ProPublica contacted all of the major credit agencies earlier this year as part of our ongoing series on consumer bankruptcy. The policies of TransUnion and Experian were similar: People who filed under Chapter 7, which wipes out most debts, would have a flag on their report for 10 years; those who filed under Chapter 13, which usually involves five years of payments before debts are forgiven, would have a flag for seven.

Equifax had the same Chapter 7 policy. But the company had a key difference in its policy for Chapter 13 filers: Those who were unable to complete their five years of payments and had their cases dismissed were saddled with a flag for three additional years.

This difference had the potential for widespread impact. About half of Chapter 13 cases are dismissed, usually because debtors fall behind on payments. From 2008 through 2010, 574,000 Chapter 13 cases were filed and subsequently dismissed, according to our analysis of filings. Under Equifax’s policy of keeping the flag on for 10 years, all those debtors would have a flag on their Equifax report through the end of 2017, but not on their TransUnion and Experian histories.

“It’s a problem, because you have a disparate treatment of debtors depending on which credit rating agency is reporting,” said Tara Twomey, an attorney with the National Consumer Law Center. “We really need consistent credit reporting for this system to work.”

Equifax’s policy also disproportionately affected black consumers, because, as our analysis showed, black debtors are more likely than whites to choose Chapter 13 and have their cases dismissed.

ProPublica wrote the company again in July, prior to its recent disclosure that its records had been hacked, laying out the potential impact of its policy on consumers and asking why it differed from competitors. In an email, Equifax spokeswoman Nancy Bistritz-Balkan wrote that the company had “recently modified the length of time for how long a dismissed Chapter 13 bankruptcy remains on file.” Under the new policy, she wrote, “Equifax removes the flag for a Chapter 13 bankruptcy after seven years, regardless of outcome.”

She would not say what “recently” meant, only saying, “The change we referenced was not implemented after we received your inquiry.” As to why Equifax made the change, she wrote, “At this time, I do not have additional details about how the change was made.”

It might seem puzzling that such a meaningful policy is not governed by law. While some aspects of credit reporting are, others are simply decided among the agencies themselves. Bankruptcy is a mix of the two. Under the Fair Credit Reporting Act, the longest a bankruptcy can stay on someone’s credit report is 10 years. The credit rating agencies have voluntarily decided to treat Chapter 13 cases differently because Chapter 13 typically involves the repayment of some debt, while Chapter 7 does not. Bistritz-Balkan made a point of saying that Equifax’s previous policy had been legal.

Initially, Chapter 7 and Chapter 13 have a similar effect on debtors’ credit scores, one that diminishes over time. Bankruptcy is a negative mark on a debtor’s history, but that doesn’t mean that declaring bankruptcy will invariably damage someone’s credit score. In fact, research shows that most people who declare bankruptcy actually see their score rise in the following months. That’s because the typical score is so low that the negative effect of the bankruptcy is outweighed by the positive effect of wiping out debt.

According to Zachary Anderson, a spokesman for FICO, the median FICO score for consumers who declared bankruptcy between October 2009 and October 2010, when filings peaked during the Great Recession, was 558 — lower than all but 20 percent of consumers with a credit score.

A recent analysis of credit files by Paul Goldsmith-Pinkham, an economist with the Federal Reserve Bank of New York, shows how scores change before and after bankruptcy. In the months prior to filing, as consumers fall deeper into debt, the average credit score plunges. The analysis, using a credit score generated by Equifax that works similarly to a FICO score, found that the average score fell to a low around 520-530, but recovered sharply over the next 6 months, then gradually increased thereafter.

Average Credit Scores Plunge Before Bankruptcy, Rise After

The next noticeable bump was seven or 10 years later, depending on the chapter, when the bankruptcy flags were removed. Consumers’ credit scores then jumped by about 10 points.

The consumers with the lowest credit scores, the analysis found, were those who had their Chapter 13 cases dismissed. That would be due, in part, to the fact that they tend to be disproportionately low-income and black, two groups with lower credit scores on average.

As we showed in our story about bankruptcy in Memphis, where Chapter 13 dismissals are incredibly common, these debtors can find themselves worse off for having tried bankruptcy. They might be even further behind on their debts after their cases are dismissed, making it harder to re-establish their credit. The effect of a dismissal lasts for years. At the very least, Equifax’s change in how it handles Chapter 13s means that the shadow cast by a past bankruptcy isn’t quite as long.

by Isaac Arnsdorf

The special prosecutor investigating Russia’s interference in the 2016 presidential election has subpoenaed an associate of Gen. Michael Flynn’s Turkish lobbying client. The subpoena, a copy of which was obtained by ProPublica, ordered Sezgin Baran Korkmaz to testify before a grand jury in Washington on Sept. 22.

“The grand jury is conducting an investigation of possible violations of federal criminal laws involving the Foreign Agents Registration Act, among other offenses,” a letter accompanying the subpoena stated. The letter is signed by Robert Mueller and Zainab Ahmad, a senior assistant special counsel who specializes in prosecuting terrorism. Korkmaz did not respond to requests for comment.

There are no indications of direct links between Korkmaz and Flynn, who briefly served as Donald Trump’s national security adviser. But Korkmaz, 39, is a close ally of Ekim Alptekin, the 40-year-old Turkish businessman who hired Flynn to lobby for Turkish interests shortly before the election. Korkmaz, a Turkish national, said in a radio interview in May that he started as a dishwasher at age 13 and is now bringing hundreds of millions of dollars from the U.S. to Turkey. His company invests in a range of industries in Turkey, the Middle East, the U.S. and Russia, and he has invested in several projects that involve people accused or convicted of crimes.

It’s not clear why prosecutors wanted Korkmaz to testify. But one possible explanation is his connection to Alptekin. Investigators are interested in the ultimate source of the money that Alptekin’s company paid to Flynn’s firm, according to a person familiar with the probe. (Representatives for Alptekin, Flynn and Mueller all declined to comment.)

Korkmaz and Alptekin are involved in a trade group together and have overlapping business interests. Korkmaz’s company, SBK Holding, is a member of the Turkey-U.S. Business Council, which is chaired by Alptekin. SBK was one of two platinum sponsors of the council’s conference in May 2017 at the Trump hotel in Washington. Both Alptekin and Korkmaz gave keynote speeches at the conference. In his remarks, Korkmaz credited Alptekin for helping him succeed in business. “Where I am now is due to the support of Mr. Ekim,” he said in Turkish.

The two men both attended a meeting at the Harvard Club in Manhattan in September 2016, according to a pro-government newspaper columnist who was present. That meeting occurred during the same week in which Flynn met with two Turkish ministers, also in New York, a gathering arranged by Alptekin. At that meeting, they discussed potential plans for the U.S. to hand over Fetullah Gulen, a controversial cleric and opponent of Turkey’s president who lives in Pennsylvania, to Turkey, the Wall Street Journal reported.

Alptekin defended his work with Flynn in his speech at the business council in May. “As many of you have read in the media, I hired the Flynn Intel Group in 2016 before the election with a mandate to help me understand where the Turkish-American relationship is and where it’s going and what the obstacles to the relationship are,” Alptekin said. “My aim was to commission independent research and to establish objective facts” to help businesses understand what he views as the threat from Gulen, whom Turkish President Recep Tayyip Erdogan suspects of trying to topple him.

The discovery of the lobbying deal with Alptekin, which ultimately generated about $450,000 for Flynn’s firm, helped put Flynn in legal jeopardy because he didn’t initially report his work as a foreign agent to the Justice Department.

As for Korkmaz, his business interests are diverse. SBK has “major investments” in the Russian energy sector, a September 2016 announcement by a Turkish government agency said. The company’s website shows operations in Russia but doesn’t specify what they are.

The company backed a bid, which was ultimately unsuccessful, for a high-profile infrastructure project in Russia several years ago. In 2014, SBK pursued a major project that was a top priority for President Vladimir Putin at the time. After annexing Crimea, Putin wanted a bridge built over the Kerch Strait to connect Crimea to Russia. SBK signed an agreement to supply $850 million in financing to build the bridge. But the deal went to a company led by Putin’s childhood best friend.

Some of Korkmaz’s colleagues and investing partners have come under scrutiny — or worse — by criminal authorities. The U.S. sister company of Korkmaz’s operation, known as SBK Holdings USA, is led by Levon Termendzhyan, a Russian fuel trader with a long rap sheet, according to court records. Termendzhyan has been charged with, but found not guilty of, tax fraud and armed assault. He was convicted of battery in 2013.

In an ongoing lawsuit in California Superior Court in Los Angeles, a former SBK Holdings USA employee claimed in a sworn declaration this year that he was told by two people interviewed by Department of Homeland Security investigators that the agents are probing Termendzhyan for money laundering, tax evasion and stolen petroleum. SBK Holdings USA’s lawyer called those accusations “irrelevant and preposterous” in a court filing. (The lawyer declined to comment for this article.) SBK Holdings USA accuses the former employee of embezzling, which he denies.

Since 2013, Korkmaz’s SBK has managed $500 million of investments in Turkey from another of Termendzhyan’s companies and from a third American company called Washakie Renewable Energy. The latter is part of a conglomerate controlled by the Kingston Group, a fundamentalist Mormon clan.

In 2011, Utah’s then-attorney general called the Kingstons an “organized crime family.” Washakie paid a $3 million fine in 2015 to settle allegations that its biofuels plant collected federal subsidies while failing to produce. In February 2016, federal agents with the Internal Revenue Service, Environmental Protection Agency and Department of Homeland Security raided some of the family’s company offices. The investigation has not resulted in any charges.

In a radio interview, Korkmaz said he convinced the Kingstons to invest in Turkey, and Alptekin is on the board of a Kingston entity that invests in Turkey. Kingston Group did not respond to requests for comment.

by Jessica Huseman

An audit released late last week by the New York state comptroller’s office found the state’s Education Department, which regulates nursing, failed to investigate top-priority complaints against nurses in the time allowed by law.

It also found nurses’ backgrounds were not adequately checked and that they were not properly monitored for criminal behavior after licensure.

All of these findings confirm those in a ProPublica investigation into New York’s nursing regulations published in April of 2016.

“The report underscores a problem we already knew existed,” said state Sen. Kemp Hannon, who has co-sponsored two bills — one in 2016 and one in 2017 — aimed at correcting problems identified by ProPublica. In 2016, the bill passed the Senate with a single “no” vote but never received a vote in the Assembly. In 2017, the bill passed the Senate unanimously, but the Assembly never proposed a bill or moved on the Senate bill.

“The roadblock lies squarely at the hands of the Assembly,” Hannon said. “At some point they have to bow to the need for action.”

Assembly member Deborah Glick, who sponsored 2016 legislation similar to the Senate’s, said the Assembly is “working assiduously” towards a bill. She said earlier versions of the legislation did not respect the due process rights of licensed professionals, particularly by allowing regulators to summarily suspend professionals’ licenses before they had a chance to respond in some cases. In other states, regulators have the power to do this when there is an urgent threat to safety.

“We understand the critical importance of protecting the public, but we also understand that licensed professionals are entitled to their due process rights,” she said. She said a solution was almost reached this legislative session, but other initiatives “diverted” the higher education committee’s attention. She said she would make it a priority to pass legislation at the start of the next session, which begins in January 2018.

Mark Johnson, a spokesman for the comptroller’s office, said that while audits of state departments are routine, ProPublica’s reporting was “a factor” in the decision to investigate nursing regulations.

As ProPublica reported, the Education Department relies on nurses to self-disclose misconduct and criminal convictions. In New York, nurses are only required to make these disclosures every three years when they renew their licenses, which the comptroller’s audit noted “[enables] nurses who have been sanctioned to practice in the interim.”

“As a result, the Department cannot be assured that all episodes of misconduct are identified properly and in a timely manner, and that nurses who pose a threat to the public’s health and safety are prevented from practicing in New York State,” the audit said.

Both the 2016 and 2017 Senate bills, sponsored by Sen. Kenneth LaValle and co-sponsored by Hannon, would have fixed the vast majority of the problems identified by ProPublica and the recent audit. Aimed at all 54 professions licensed by the Education Department, both bills would have allowed the department to summarily suspend the licenses of professionals suspected of extreme misconduct. The measures also defined “moral character” requirements for licensed professions, and required professionals to inform the department of criminal convictions within 30 days.

Hannon said he will continue to pursue a solution for the problems referenced in the comptroller’s audit. If the legislature will not act to fix holes in the oversight of all 54 professions licensed by the state, he said he may propose legislation aimed directly at nursing or move to have the regulation of nurses moved from the Education Department to the Health Department, which regulates doctors and physician assistants. New York is the only state in the country that assigns the regulation of nursing to the Education Department.

Under the Education Department’s supervision, New York has continued to allow nurses who have harmed patients to retain active nursing licenses.

ProPublica’s report highlighted the case of Linda Ansa, a Bronx nurse who the New York Health Department found had nearly killed a 99-year-old nursing home resident by administering 50 times the necessary dose of insulin.

Nursing homes in New York are regulated by the Health Department, which penalized Ansa in 2014 before referring her case to the Education Department for action against her license. But more than three years after her case was referred, no action has been taken. Her license remains clear. Neither Ansa nor the attorney who represented her in the Health Department case has responded to requests for comment.

The Education Department declined to comment on Ansa’s case and typically declines to answer questions on specific disciplinary actions. A spokesman for the department, Jonathan Burman, said in a statement that all allegations of misconduct are taken “extremely seriously.” He said that the department has “sought legislation to modernize and enhance our authority over licensed professions” for the past two years.

“We will continue to work with the legislature to get this important public protection bill enacted,” he said.

In a response included in the comptroller’s audit, the Education Department said its budget has not kept pace with its increasing responsibilities. The professions regulated by the Education Department range from nursing to landscape architecture and the number of professions the agency oversees has increased steadily over the decades. According to the audit, receipts from fees collected by the department have risen from $41.5 million in 2010-2011 to $53.5 million in 2016-2017. The department’s appropriation in the state budget, however, has stayed at $45.1 million over the same period. The department also told the comptroller’s office its antiquated computer system made it difficult to efficiently handle its caseload.

The state commissioner of education, MaryEllen Elia, has 90 days to report to the comptroller, the governor and the legislature on what steps the Education Department has taken to implement the comptroller’s recommendations.

The recommendations include streamlining and more closely tracking investigations, strengthening controls over “moral character” requirements for nurses and researching the best practices of other states.

Donna Nickitas is the executive officer of the nursing Ph.D. program at the Graduate Center of the City University of New York. She called the comptroller’s recommendations obvious and said she was “greatly disappointed” that neither the Legislature nor the Education Department had undertaken those improvements over the last year and a half.

“[ProPublica] came to the table so long ago with evidence showing other states were far ahead of us,” she said. “In the private sector, they fire people over this.”

by Justin Elliott, Jessica Huseman and Decca Muldowney

The Red Cross’ anemic response to Hurricane Harvey left officials in several Texas counties seething, emails obtained by ProPublica show. In some cases, the Red Cross simply failed to show up as it promised it would.

In DeWitt, a county of 20,000 where Harvey ripped apart the roof of a hotel, Emergency Management Coordinator Cyndi Smith upbraided a Red Cross official in a Sept. 9 email:

“Red Cross was not there as they were suppose[d] to be with the shelter and again no communication to what this is actually about and that you have been in DeWitt County doing anything.”

With fewer than 24 hours’ notice, Micah Dyer, a school superintendent in DeWitt County, was forced to run a shelter on his own in an unused district building that would eventually house 400 people. For the first three days the shelter was opened, only two Red Cross volunteers were there — neither had any experience running a shelter, Dyer said in an interview.

“Every hot meal came from us,” Dyer said. “[School district employees] had to go to our pantries and walk-in coolers and get whatever we could get so people would have food.” Dyer says the Red Cross didn’t appear with supplies until the fourth day of the storm, and didn’t bring enough cots or food for those housed in the shelter, he said. A significant portion of the Meals-Ready-to-Eat the charity did bring had gone bad, he said.

The charity contested his account, saying in a statement that it maintained two shelters in DeWitt County — including the one Dyer ran — “and recorded a total of 1,599 overnight stays.”

We have only a partial picture of the Red Cross’ response to the massive storm. ProPublica received emails through public records requests from several counties, large and small. But they don’t cover the full swath of the state affected by the storm.

Still, the frustration many authorities felt with the Red Cross was striking. Officials in Jefferson County, which contains Beaumont, were so fed up with the Red Cross that they kicked out a charity employee assigned to work with government officials from the headquarters for the storm response.

“Everything we asked him to do, I didn't feel was getting done in a timely manner,” said Mike White, Jefferson County’s deputy emergency management coordinator.

In Colorado County, west of Houston, a local official told colleagues on Aug. 30 the charity had simply failed to show up at a shelter as promised.

“Persons needing intermediate-term shelters have been transferred to the Red Cross Shelter in Sealy. Red Cross approved the shelter, but the promised shelter management teams and the supply trailer never arrived, nor do they know where they went,” Charles Rogers, the county’s emergency management coordinator, wrote.

On Aug. 27, two days after Harvey made landfall, the fire marshal of Humble, a small city in the Houston metro area, sent an urgent plea as his city faced severe flooding: Could the Red Cross help to staff a shelter in his area?

“I hate to say this but the Red Cross is completely out of resources and have almost no road accessibility,” responded Kristina Clark, an emergency management official in Harris County, which contains Houston. “The best thing I can recommend is to open something and message to your people to bring THEIR OWN food, sleeping bags, clothes, medication, etc.”

The Red Cross said in a statement that, overall, it has provided more than 414,000 overnight shelter stays, and with its partners served “almost 3.2 million meals and snacks.”

Providing relief in the wake of the storm was an enormously difficult task. Tom McCasland, Houston’s director of housing and community development, said in an interview that it wasn’t just the Red Cross — but also city and county governments — that didn’t have the resources to respond to the storm. The storm destroyed over 15,000 homes and damaged over 200,000.

“No one was prepared for this in terms of magnitude of numbers that showed up” at the George R. Brown Convention Center, one of the major shelters in Houston, McCasland said. “Given the circumstances, I can say that [the Red Cross] worked their hearts out.”

Many others singled out the Red Cross for criticism. At a public meeting earlier this month, Houston City Councilman Dave Martin let loose on the charity for being the “most inept, unorganized organization I've ever experienced.”

Martin urged Houstonians not to donate. “I have not seen a single person in Kingwood or Clear Lake that's a representative of the Red Cross,” he said, referring to two hard-hit areas. “You know who opened our shelters? We did. You know who sent water and supplies? We did.”

In an interview with ProPublica, Martin said he ran into Gail McGovern, the charity’s CEO, in a parking lot several days after Harvey hit. When he raised his concerns to her, Martin said she responded: “Do you know how much we raised with Katrina? $2 billion. We won’t even raise hundreds of millions here.’ I just thought, ‘Really, Gail? That’s your response to me?’”

Asked about McGovern’s conversation with the city councilman, the Red Cross said, “We understand his frustration.” The charity said it has raised around $350 million for Harvey.

As ProPublica has previously detailed, the charity’s attempts to respond to large disasters in recent years have been harshly criticized by victims, government officials and, in many cases, by the Red Cross’ own staff. Reconstruction efforts after the 2010 Haiti earthquake fell far short of the charity’s public claims. After Superstorm Sandy hit New York in 2012, Red Cross leadership diverted disaster relief resources for public-relations purposes. And after floods in Louisiana, a state official wrote that the Red Cross “failed for 12 days.”

While the Red Cross operates largely as a private nonprofit, it was created by Congress more than a century ago and has an officially mandated role to work with the government in providing food and shelter after disasters.

As disasters have gotten larger and more frequent, the Red Cross has gotten smaller. Under the nine-year tenure of McGovern, who came from the private sector, the group has had budget shortfalls and cut staff sharply. Local chapters, including in Texas, have been shuttered.

The cuts have stripped the charity of experienced disaster management personnel. Under McGovern, the number of paid employees has shrunk from 36,000 in 2008 to just over 21,000 in 2015, according to tax filings.

The group sent fewer responders after Harvey than it did after Superstorm Sandy hit the East Coast five years ago. Six days after Sandy hit New York, the charity reported it had “more than 5,000 Red Cross workers” responding to the disaster. Six days after Harvey made landfall, the Red Cross reported “2,300 disaster workers” in Texas. A Red Cross spokesperson told ProPublica the Sandy response was larger because the storm affected 11 states. It also said technology has resulted in the charity becoming “more efficient and effective in our response.”

The charity has said it would give $400 directly to households in the most affected areas. But the program has been beset by technical glitches and unexplained denials, according to reporting by NBC News and several Texas outlets. The Red Cross has apologized for the problems.

There have also been problems with a Red Cross hotline for disaster victims. The hotline is staffed by employees of a contractor, TeleTech. A staffer at the firm described frequent trouble with a system that was supposed to identify open shelters for those who needed them.

“Their programs we use to find shelters for the victims are not working properly, often telling agents that there [are] openings when in fact the shelter is full,” the staffer said. “Victims get there and are turned around and call us back saying that they used the last of their gas, only to be directed to another shelter with the same results.” The staffer requested anonymity for fear of reprisal for speaking to the media.

The Red Cross said in response that “shelter populations are changing on a minute-by-minute basis” during disasters, which sometimes results in reported figures becoming quickly out of date.

The Red Cross is still in Texas and is also responding to Hurricanes Irma and Maria. Overall, the Red Cross says it has partnered with local agencies to open shelters in eight states, Puerto Rico and the U.S. Virgin Islands.