Eideard

The Heartland Institute, the libertarian thinktank whose project to undermine science lessons for schoolchildren was exposed this week, faces new scrutiny of its finances – including its donors and tax status.

The Guardian has learned of a whistleblower complaint to the Internal Revenue Service about Heartland’s 501(c)(3) tax-exempt status…

The unauthorised release of internal documents indicated Heartland had received $14 million over several years from a single anonymous donor as well as tobacco and liquor companies and corporations pledged to social responsibility, including the General Motors Foundation.

The release of the donors’ list led a number of environmental organisations to demand GM, which gave $30,000, and Microsoft, which gave $59,908 in free software, to sever their ties with a thinktank that has a core mission of discrediting climate science…

Others are focusing on Heartland’s support from the tobacco industry as well as major health and pharmaceutical companies for a thinktank which has opposed smoking bans and healthcare reform.

John Mashey, a retired computer scientist and Silicon Valley executive, said he filed a complaint to the IRS this week that said Heartland’s public relations and lobbying efforts violated its non-profit status. Mashey said he sent off his audit, the product of three months’ research, just a few hours before the unauthorised release of the Heartland documents.

Mashey said in a telephone interview that the complaint looked at the activities of Heartland and two other organisations that have been prominent in misinforming the public about climate change, the Science and Environmental Policy Project, run by Fred Singer, and the Centre for the Study of Carbon Dioxide and Global Change, run by Craig Idso. Both men were funded by Heartland, with Idso receiving $11,600 per month and Singer $5,500 a month, according to the 2012 budget…

“I believe there was a massive abuse of 501c(3),” Mashey said. “My extensive study of these thinktanks showed numerous specific actions that violated the rules – such as that their work is supposed to be factually based. Such as there was a whole lot of behaviour that sure looked like lobbying and sending money to foreign organisations that are not charities.”

Mashey later published his audit of Heartland finances in Desmogblog, which was the first outlet to run the trove of Heartland documents.

Overdue. Creeps like this violate federal law on non-profit status all the time when they serve as a lobbying front for corporations with a vested interest in Heartland’s comments – whether that be climate, tobacco or fronting for pharmaceutical companies.

I spent last year in Afghanistan, visiting and talking with U.S. troops and their Afghan partners. My duties with the Army’s Rapid Equipping Force took me into every significant area where our soldiers engage the enemy. Over the course of 12 months, I covered more than 9,000 miles and talked, traveled and patrolled with troops in Kandahar, Kunar, Ghazni, Khost, Paktika, Kunduz, Balkh, Nangarhar and other provinces.

What I saw bore no resemblance to rosy official statements by U.S. military leaders about conditions on the ground…

I saw little to no evidence the local governments were able to provide for the basic needs of the people. Some of the Afghan civilians I talked with said the people didn’t want to be connected to a predatory or incapable local government.

From time to time, I observed Afghan Security forces collude with the insurgency.

Much of what I saw during my deployment, let alone read or wrote in official reports, I can’t talk about; the information remains classified. But I can say that such reports — mine and others’ — serve to illuminate the gulf between conditions on the ground and official statements of progress…

In all of the places I visited, the tactical situation was bad to abysmal. If the events I have described — and many, many more I could mention — had been in the first year of war, or even the third or fourth, one might be willing to believe that Afghanistan was just a hard fight, and we should stick it out. Yet these incidents all happened in the 10th year of war.

As the numbers depicting casualties and enemy violence indicate the absence of progress, so too did my observations of the tactical situation all over Afghanistan…

How many more men must die in support of a mission that is not succeeding and behind an array of more than seven years of optimistic statements by U.S. senior leaders in Afghanistan? No one expects our leaders to always have a successful plan. But we do expect — and the men who do the living, fighting and dying deserve — to have our leaders tell us the truth about what’s going on…

If Americans were able to compare the public statements many of our leaders have made with classified data, this credibility gulf would be immediately observable. Naturally, I am not authorized to divulge classified material to the public. But I am legally able to share it with members of Congress. I have accordingly provided a much fuller accounting in a classified report to several members of Congress, both Democrats and Republicans, senators and House members…

RTFA. Follow Colonel Davis’ relation of what he saw and has reported – both in classified detail to Congress and the Pentagon and unclassified open publication. The following is the final statement made by ARMED FORCES JOURNAL which published this report.

When it comes to deciding what matters are worth plunging our nation into war and which are not, our senior leaders owe it to the nation and to the uniformed members to be candid — graphically, if necessary — in telling them what’s at stake and how expensive potential success is likely to be. U.S. citizens and their elected representatives can decide if the risk to blood and treasure is worth it.

Likewise when having to decide whether to continue a war, alter its aims or to close off a campaign that cannot be won at an acceptable price, our senior leaders have an obligation to tell Congress and American people the unvarnished truth and let the people decide what course of action to choose. That is the very essence of civilian control of the military. The American people deserve better than what they’ve gotten from their senior uniformed leaders over the last number of years. Simply telling the truth would be a good start. AFJ

Daylife/Reuters Pictures used by permission

Sacked Olympus chief executive Michael Woodford says he has contacted the UK’s Serious Fraud Office about the Japanese firm’s accounting practices.

Mr Woodford, who was dismissed last week, told the BBC that he believed the camera-maker had paid out excessive sums in relation to takeover deals. He says he was fired for raising the issue, but Olympus says his different management style was to blame.

The SFO confirmed that Mr Woodford had contacted it.

Olympus said it would “consider” taking legal action against Mr Woodford for disclosing confidential information.

Mr Woodford said he had commissioned auditors PricewaterhouseCoopers to look into an alleged $687 million payment by Olympus to a Cayman Island company. He told the BBC that he was ousted after he distributed a copy of the PwC report on Wednesday night…

He says he was called into a board meeting on Friday at which the agenda had been changed. The only new item to discuss was his dismissal as chief executive with immediate effect, for which, he said, no reason was given.

After the board voted for his dismissal, he left the meeting and was followed to his office by a colleague…He was asked for the key to his flat, 51% of which he owned, and was told to get the bus to the airport as they had taken away his car…

According to Mr Woodford, auditors were unable to establish who owned the company in the Cayman Islands. He said questions still had to be answered: “To whom and for what did we pay this money..?”

A perfectly legitimate question within any legal corporate structure. Whether that structure is manipulated by officers dedicated to criminal pursuits is an entirely relevant question.

Sounds like Mr. Woodford asked that question. His dismissal is the only answer, so far.

Daylife/AP Photo used by permission

One of Rupert Murdoch’s most senior European executives has resigned following Guardian inquiries about a circulation scam at News Corporation’s flagship newspaper, the Wall Street Journal.

The Guardian found evidence that the Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal’s true circulation.

The bizarre scheme included a formal, written contract in which the Journal persuaded one company to co-operate by agreeing to publish articles that promoted its activities, a move which led some staff to accuse the paper’s management of violating journalistic ethics and jeopardising its treasured reputation for editorial quality.

Internal emails and documents suggest the scam was promoted by Andrew Langhoff, the European managing director of the Journal’s parent company, Dow Jones and Co, which was bought by Rupert Murdoch’s News Corporation in July 2007. Langhoff resigned on Tuesday.

The highly controversial activities were organised in London and focused on the Journal’s European edition, which circulates in the EU, Russia, and Africa. Senior executives in New York, including Murdoch’s right-hand man, Les Hinton, were alerted to the problems last year by an internal whistleblower and apparently chose to take no action. The whistleblower was then made redundant…

This stinks like someone digging up the bodies of Wall Street barons from the 19th Century and using them for reanimation experiments. Zombie subscribers and counterfeit editions of the Wall Street Journal indeed.

RTFA for the details of the elaborate money-laundering, phony reconstruction of circulation numbers for a once-great newspaper.

Eileen Foster

In the summer of 2007, a team of corporate investigators sifted through mounds of paper pulled from shred bins at Countrywide Financial Corp. mortgage shops in and around Boston.

By intercepting the documents before they were sliced by the shredder, the investigators were able to uncover what they believed was evidence that branch employees had used scissors, tape and Wite-Out to create fake bank statements, inflated property appraisals and other phony paperwork. Inside the heaps of paper, for example, they found mock-ups that indicated to investigators that workers had, as a matter of routine, literally cut and pasted the address for one home onto an appraisal for a completely different piece of property.

Eileen Foster, the company’s new fraud investigations chief, had seen a lot of slippery behavior in her two-plus decades in the banking business. But she’d never seen anything like this. “You’re looking at it and you’re going, Oh my God, how did it get to this point?” Foster recalls. “How do you get people to go to work every day and do these things and think it’s okay..?”

One executive, Foster says, sent an email to dozens of workers in the Boston region, warning them the fraud unit was on the case and not to put anything in their emails or instant messages that might be used against them…Her team was not allowed to interview a senior manager who oversaw the branches. Instead, she says, Countrywide’s Employee Relations Department did the interview and then let the manager’s boss vet the transcript before it was provided to Foster and the fraud unit.

In the end, dozens of employees were let go and six branches were shut down. But Foster worried some of the worst actors had escaped unscathed. She suspected, she says, that something wasn’t right with Countrywide’s culture — and that it was going to be rough going for her as she and her team dug into the methods used by Countrywide’s sales machine.

By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

By the fall of 2008, she was out of a job too. Countrywide’s new owner, Bank of America Corp., told her it was firing her for “unprofessional conduct.”

Foster began a three-year battle to clear her name and establish that she and other employees had been punished for doing the right thing. Last week, the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000.

Bank of America denies Foster’s allegations and stands behind its decision to fire her. Foster sees the ruling as a vindication of her decision to keep fighting.

“I don’t let people bully me, intimidate me and coerce me,” Foster told iWatch News during a series of interviews. “And it’s just not right that people don’t know what happened here and how it happened.”

This is the intro to Part 1 of Eileen Foster’s tribulations as whistleblower on Countrywide Financial. The single company that can assume credit for the Great Recession over any other. Add to it the continued attempts by present owners Bank of America to paper over the crimes committed, fraud perpetrated.

Part 2 appears today. Just click the link above and follow the slime trail.

DaVita’s new planned world headquarters in Denver

One of the nation’s largest providers of kidney dialysis deliberately wasted medicine in order to reap hundreds of millions of dollars in extra payments from Medicare, a former clinic nurse and a doctor are charging in a whistle-blower lawsuit.

The lawsuit says that the company, DaVita, used larger than necessary vials of medicine knowing that Medicare would pay for the unused portion of each vial if it were deemed unavoidable waste. DaVita, which treats nearly a third of the nation’s dialysis patients, denies the accusations.

The accusations are the latest related to how financial incentives may have driven overuse of pharmaceuticals in the dialysis business. In January, Medicare began a payment system that pays for the overall treatment and does not pay separately for the drugs accompanying it. Many practices, including the size of some vials used, suddenly changed, providing an instant case study of how financial incentives can influence treatment choices.

The lawsuit says that until January, for example, DaVita required nurses to use one 10-microgram vial of Zemplar, a vitamin D drug, instead of a six-microgram dose in three two-microgram vials,. It then billed Medicare for all 10 micrograms even though four went unused.

Instead of giving an entire 100-milligram vial of Venofer, an iron drug, once or twice a month, the clinics gave 25-milligram doses more frequently, the suit says. But since the drug came only in a 100-milligram vial, Medicare was billed for 100 milligrams for each dose, even though 75 milligrams were wasted, the lawsuit says…

This so-called bundled payment system has instantly turned drugs from a source of profit to a cost to be avoided. And dialysis clinics have responded.

Not especially different from the ever-popular cost-plus billing often used in the military-industrial complex. My least favorite form of welfare for capitalists producing non-consumable goods. If you have a guaranteed profit of any size – and can inflate the legitimate costs 100% – you double your profit.

 
Networking giant Cisco was blasted by a Canadian judge for arranging for the criminal arrest of a whistleblower who was suing the company.

Peter Adekeye launched an anti-trust case against his former employer in the US District Court for Northern California and was giving his deposition where he lived in Vancouver when four coppers entered the room and interrupted the hearing.

According to Ars Technica. Adekeye was jailed while the legal mess was sorted out. Part of the problem was that the highly expensive legal team for Cisco had done its best to convince the Canadian authorities that Adekeye was a “sinister” Nigerian on the run from 97 charges of illegal computer hacking…

US prosecutors invoked “emergency provisions” of the Extradition Act to obtain the arrest warrant…

When the extradition documentation actually arrived, the judge would discover that it was a pack of “innuendo, half truths, and complete falsehoods.”

Throughout all of this, the judges and the Canadian legal system was apparently unaware that all the made-up crimes were part of the bigger anti-trust battle Adekeye was waging against Cisco…

Justice McKinnon was shocked that a trivial $14,000 civil case had been transformed into a criminal proceeding and engaged the full might and resources of two governments, with the aim of misleading one of Canada’s senior trial courts.

Cisco allegedly engineered it so that the arrest took place in the presence of a US High Court Judge, Special Master, George Fisher, with Cisco’s lawyers insisting on filming the entire arrest on the record. It was clearly an attempt to humiliate Adekeye and weaken his case.

McKinnon said that it all spoke “volumes for Cisco’s duplicity”.

What should be most alarming is that Cisco could use extradition laws and their buddies in the US government to have those who challenged their dominion locked up under American laws – in Canada.

End product – from the people HP bribed to influence

Hewlett-Packard will pay more than $16 million to settle a lawsuit alleging they violated competitive bidding rules with the Houston and Dallas school districts to win technology contracts, the Department of Justice announced…

The DOJ inquiry that led to the settlement was triggered by a 2007 whistle-blower lawsuit filed in Houston by Dave Richardson and Dave Gillis…

Richardson, who owns an insurance company, became suspicious when his business dealing with HISD dried up. After enlisting the help of former FBI agent Gillis, they discovered what appeared to be sweetheart deals regarding technology purchases, including the lucrative federal program known as E-rate, which funds internet connections for schools and libraries.

“They took their findings to the government and said, ‘You need to do something.’ Not much was done, so they filed the lawsuit,” said their attorney, Travis Crabtree… Did anyone think the Bush administration would come down on the side of honesty in Texas?

The investigation accused Houston businessman Frankie Wong of setting up a group of companies, including Hewlett-Packard, that came to be known as “The Consortium.” They applied for technology contracts with both HISD and the Dallas Independent School District.

Because of their close connection with district officials, thanks to the suspect gratuities, the bid requirements were worded in such a way that only they could satisfy them, officials said.

More lawsuits from other firms screwed by the Consortium proceed. The Obama DOJ will intervene as needed on behalf of the plaintiffs.

Texas school boards will continue, of course, without tempering any of the corrupt ideology guiding their practices.

Cheryl Eckard, center – N.Y.TIMES photo by Gunther

A former quality control manager at GlaxoSmithKline (GSK) has received £61million, believed to be the largest ever reward for a whistleblower, after exposing a series of contamination problems at a drugs factory in Puerto Rico, and a subsequent cover-up by company bosses.

Cheryl Eckard, 51, will pocket the $96m share of a $750m criminal and civil settlement between US regulators and the British pharmaceuticals group. The case showed that the company repeatedly ignored serious failings, including allegations that staff were “skimming” drugs to sell them on the Latin American black market and that its factory had mixed drug types and doses in the same bottle.

Eckard first warned of the numerous violations after being sent by GSK to investigate problems in the group’s huge factory in Cidra, Puerto Rico, in July 2002, following a warning letter to the company from US health officials.

Over the next 10 months, she repeatedly alerted a string of GSK executives to a catalogue of breaches, only to be blocked and eventually sacked in 2003. In July of that year, Eckard phoned JP Garnier, the then chief executive, who declined to take the call to speak to her about the findings and the cover-up. Eckard, who is from North Carolina and is married with children, now works as a freelance consultant for the pharmaceutical industry…

Court documents show how Eckard was gradually sidelined, despite increasing complaints to a growing number of senior bosses.

I’m hard-pressed to comprehend companies that display this kind of pigheadedness. I’ve been peripherally involved with a few similar cases in major American firms – one of which resulted in an arrest – and time and again the fault lies with management that [a] refuses to believe that one of their peers could possibly be stupid, criminal or incompetent; and [b] they can’t believe that an ordinary mortal down in the bowels of the firm has turned up this foolishness – even with evidence staring them in the face.

I’m pleased as Punch to see a whistleblower rewarded. Especially after being harassed and fired for her efforts.

From 1986 until her retirement last year, Master Sgt. Toni Jaffe’s job with the California Army National Guard was to give away money — the federally subsidized student-loan repayments and cash bonuses — paid for by federal taxpayers nationwide — that the Guard is supposed to use to attract new recruits and encourage Guard members to reenlist.

Instead, according to a Guard auditor turned federal whistle-blower, as much as $100 million has gone to soldiers who didn’t qualify for the incentives, including some who got tens of thousands of dollars more than the program allows.

For years, the auditor and other Guard officials alleged in interviews or internal documents obtained by The Sacramento Bee, California’s incentives program was operated as a slush fund that was doled out improperly to hundreds of soldiers with fabricated paperwork, scant supervision and little regard for the law.

The Guard documents describe a high-speed assembly line for bonuses and loan repayments, in which Jaffe single-handedly processed some 8,600 payments over a 16-month period in 2007 and 2008 — about 25 per workday.

Most student loan repayments, the documents show, were drawn from money designated for combat veterans. Yet a large portion of those funds went to Guard members who hadn’t served a day at war. Captains and majors were among those whom auditors think benefited improperly…

The documents show that by recruiters and officers up the chain of command overlooked or ignored her efforts. Some recruiters appear to have benefited personally…

On July 8, the managers who replaced Jaffe briefed Capt. Ronald S. Clark, a federal auditor who oversees funds spent by state Guard organizations, about her alleged lapses. A former police investigator, FBI agent and U.S. Secret Service officer, Clark has fought white-collar crime for years.

Still, he said, the scale and audacity of the corruption he encountered in reviewing the California program shocked him: Excluding $43 million in improper payments recently halted by Jaffe’s replacements, Clark estimated that $100 million was misspent. He called it “war profiteering.”

RTFA. Beaucoup examples, threads and tales of corruption.

Clark was intimidated enough by the extent of fraud throughout the Guard bureaucracy he wasn’t just worried about his investigations being stonewalled and blocked. Fearing for his life and the safety of his family, he contacted the FBI and the IRS – who took over his work and turned it into a criminal investigation.