CREW today sent a letter to House Committee on Appropriations Chairman David Obey (D-WI) and Defense Appropriations Subcommittee Chairman Norm Dicks (D-WA), asking that the appropriations committee ban earmarks to non-profits that funnel earmarked funds to for-profits.

On March 10, 2010, Reps. Obey and Dicks jointly issued a press release announcing that the appropriations committee would no longer approve earmarks directed to for-profits.
News stories have indicated, however, that as soon as the ban was enacted, for-profit entities -- sometimes in collaboration with members of Congress -- began devising schemes to get around it.

The New York Times and the Huffington Post reported that some for-profit companies set up shadow non-profit organizations to receive earmarked funds, while others are exploiting partnerships with existing non-profits to serve as pass-throughs.

For example, Ohio defense contractor Imaging Systems Technology, which previously received $8.4 million in earmarks requested by Rep. Marcy Kaptur (D-OH) to produce body armor parts, established a non-profit organization specializing in the same product as the defense contractor, located at the same address, and naming the company’s vice-president as executive director. Rep. Kaptur then requested $10.4 million in earmarks for the new non-profit, the Great Lakes Research Center, noting it “met the requirements for reform.”

Asked about the maneuver to skirt the for-profit earmarks ban, the defense contractor’s president replied:

It’s not illegal - so what?

Given the lengths to which members of Congress and for-profit companies have gone to defy the ban, CREW suggests the appropriations committee issue a statement making clear that earmarks will not be awarded to non-profits that funnel any portion of earmarked funds to for-profit entities. In any event, because there has been confusion as to the ban’s parameters, CREW also suggests that the committee issue guidance regarding the scope of the ban.

CREW Executive Director Melanie Sloan said today:

Chairmen Obey and Dicks deserve credit for trying to reign in earmarks, but it is a tough road to hoe considering how addicted members of Congress and businesses are to all that pork. It was inevitable that some would try to circumvent the ban. The question is, confronted with clear evidence that for-profits are circumventing the ban by having non-profits serve as funnels for earmarked funds, what is the committee going to do about it?

Click here (PDF) to read CREW’s letter to Chairmen Obey and Dicks.

CREW sent a letter today to the Federal Trade Commission (FTC) requesting an antitrust investigation into drug companies’ vaccine distribution policies. Many drug companies, including Sanofi Pasteur and Merck, offer vaccines at discount prices – but with a potentially dangerous catch.

The discounts are conditioned on an express agreement that the physicians’ healthcare groups will use only the offering drug company’s vaccines and other products. If any member of the practice fails to comply with this exclusivity requirement, the entire practice loses the discounts.

On top of potentially depriving patients of receiving best-suited vaccines, this all-too-common occurrence suppresses market competition and may prevent new and more effective vaccines from being developed.

CREW’s Executive Director Melanie Sloan said today:

Patients presume that doctors choose vaccines based on the patient’s best interests. Now we learn that’s not always true. In some cases, doctors are choosing vaccines based on the discounts offered by the drug manufacturer. No one should have to question their physicians’ motives, but the practices of companies like Sanofi Pasteur and Merck suggest we should all be questioning our doctors closely about why they chose a particular vaccine.

Click here to read CREW’s letter to the FTC.

CREW today sent a letter to the Senate Committee on Health, Education, Labor and Pensions, calling for changes in rules and practices regarding witnesses brought in to offer testimony. CREW’s letter comes after the Committee heard the June 24th testimony of Steven Eisman – a portfolio manager of a hedge fund known to short-sale stocks in for-profit education companies.

Mr. Eisman has in the past offered public comments bashing the for-profit education industry – to his great financial benefit. For example, after a May 26, 2010 speech at the Ira Sohn Research Conference, the share values of the companies he criticized plummeted. Through short-sales in those companies, Mr. Eisman reaped huge profit.

CREW is calling on the Committee to put safeguards in place to ensure future witnesses cannot use their testimonies for their private financial gain.

Melanie Sloan, CREW’s executive director, said today:

While many who testify before Congress have a financial interest at stake, few profit directly from their testimony alone. Congress should not be in the business of helping hedge fund managers like Mr. Eisman make even more money. Congressional hearings are intended to air issues of national significance – not line witnesses’ pockets.

Click here to read CREW’s letter.

South Carolina has certainly seen its fair share of controversy over the past few years, and today CREW has the state’s latest and greatest in its sights: mystery Senate candidate Alvin Greene.

We just called on the Attorney General of South Carolina, Henry McMaster, to investigate (PDF) whether or not Mr. Greene was induced to run for the Democratic nomination to challenge incumbent Sen. Jim DeMint. Inducing a candidate to run is a blatant violation of South Carolina law.

Mr. Greene originally tried to pay the $10K filing fee with a personal check, which was rejected. He miraculously returned the same day with a new check with the name “Alvin M. Greene for Senate” handwritten as the payer. While he claims this money came from his personal savings account, he has to date refused to confirm this with documentation.

It looks unlikely that Mr. Green had this amount of money on hand. He was discharged from the Army in August 2009 and has been unemployed ever since. What’s more, in November 2009, when charged with obscenity for showing pornography to a USC student, he was assigned a public defender – a service usually reserved only for poor defendants.

CREW also filed a complaint (PDF) with the Federal Election Commission (FEC) alleging that Mr. Greene and three other candidates in the June 8, 2010 South Carolina primary violated the Federal Election Campaign Act (FECA) and FEC regulations by failing to file mandatory disclosure reports. Gregory Brown, Ben Fraiser, Brian Doyle and Mr. Greene all failed to file their mandatory April 15th Quarterly Report and 12-Day Pre-Primary Reports.

Additionally, Mr. Green failed to file a Statement of Candidacy for himself and a Statement of Organization for his campaign.

CREW’s Executive Director, Melanie Sloan, said today:

The people of South Carolina have a right to fair, transparent and fraud-free elections. Paying candidates to run for office and concealing the sources of campaign funds undermines the integrity of the electoral process and threatens our democracy.

And election law regulations – and their deadlines – exist for a reason. All candidates who are serious about representing the American public in our federal government should be able to perform such simply tasks as filing paperwork on time.

Read CREW’s FEC complaint and the complaint’s exhibits.

Read CREW’s letter to South Carolina Attorney General McMaster.

The Ninth Circuit Court of Appeals today unanimously reversed a lower court decision that would have a created a massive loophole in the Federal Election Campaign Act (FECA) and allowed wealthy individuals to contribute unlimited amounts to the candidates of their choice through straw donors.

The Justice Department had prosecuted prominent California trial attorney Pierce O’Donnell for violating FECA by reimbursing thirteen employees of his law firm for making a total of $26,000 in contributions to the presidential campaign of former Senator John Edwards (D-NC). A federal district court in California had dismissed the indictment on the grounds that the Act only prohibited making contributions under fake names – not reimbursing others for making contributions. The Ninth Circuit correctly rejected that interpretation today, holding specifically that the Act prohibits providing donation money to others when they are merely ‘straw donors.’

In September 2009, CREW filed an amicus brief in the case supporting the Justice Department's long-standing interpretation of the law.

CREW’s Executive Director Melanie Sloan said today,

By reversing the lower court’s decision, the Ninth Circuit has helped ensure that our elections are not bought and sold by the wealthy. Mr. O’Donnell’s scheme was a brazen violation of election law – and CREW praises the Ninth Circuit for recognizing this fact.

Click here (PDF) to read the Ninth Circuit’s decision.

CREW today sent a letter to the Inspector General of the Department of Health and Human Services calling for an investigation into the appointments of two members of the Food and Drug Administration’s (FDA) Tobacco Products Scientific Advisory Committee (TPSAC). The two members, Drs. Neal Benowitz and Jack Henningfield, have blatant financial ties to companies that make smoking cessation products – calling in to question the impartiality of the panel’s advice.

Dr. Benowitz’s ties to the smoking cessation industry include paid consultant jobs with Pfizer, GlaxoSmithKline, Novartis and Aradigm and charging between $270-600 per hour to serve as an expert witness in tobacco lawsuits. Similarly, Dr. Henningfield is a paid consultant for pharmaceutical companies. What’s more, he’s also a partner in a company that holds at least one patent for a nicotine gum, and will greatly benefit financially if he succeeds in obtaining a patent license.

This isn’t the first time the FDA has run into trouble with conflicts of interest on their advisory committees. Former FDA Chairman Lester Crawford pleaded guilty to such charges in 2006 when it was revealed he owned stock in Pepsico and Sysco at the same time he chaired the FDA’s Obesity Working Group. The FDA claimed it dealt with these conflicts in 2008 by instituting new procedures for screening potential panel members and proclaiming that members cannot participate in particular matters in which they have a financial conflicts of interest without a waiver. It seems the FDA is ignoring their advisory committee rules in the TPSAC, which is scheduled to meet tomorrow and Wednesday, June 8th and 9th.

Melanie Sloan, CREW’s executive director, said today:

TPSAC panel members are barred from having financial ties to cigarette companies. Common sense dictates they shouldn’t have ties to pharmaceutical companies that make smoking cessation products either. The public needs to have confidence that new regulations are aimed at preventing smoking, not increasing drug companies’ profits. Loathing tobacco companies does not justify ignoring clear conflicts of interest. As great as it is that the FDA is finally regulating tobacco products – and as credentialed as Drs. Benowitz and Henningfield may be – there is no excuse for including those paid to consult or create smoking cessation products on the panel. How can we have faith in the TPSAC’s conclusions when some of its members have a vested financial interest in the panel’s decisions?

Click here to read CREW’s letter to the Inspector General.

CREW today issued a report (PDF) that shows the Securities and Exchange Commission (SEC) is instituting its promised post-Madoff-scandal reforms at a slow pace and with limited progress.

Following the agency’s embarrassing 16-year failure to detect Bernard Madoff’s massive Ponzi scheme, SEC Chairman Mary L. Shapiro promised to make fundamental reforms to the Enforcement Division, ranging from the creation of a central database to manage tips, complaints and referrals, to the establishment of specialized units better able to analyze highly specialized and complex areas of security law.

CREW monitored these promised reforms by filing an October 2009 Freedom of Information Act (FOIA) request for documentation showing progress in seven key areas.

CREW found that despite the urgent need for significant structural reform, the SEC has not rushed to implement many of the promised changes. The agency has made the most progress in filling new staff positions and adding new offices, but given how long this has taken, the impact of these steps is not yet discernable. At bottom, the central question of whether the SEC has instituted meaningful and effective reforms to address the systemic problems revealed by the agency’s failure to uncover Mr. Madoff’s blatant criminal conduct still cannot be answered.

CREW’s Executive Director, Melanie Sloan, said today:

Despite its historic failure to prevent Bernie Madoff’s staggering fraud, the SEC is dragging its feet on some of the most urgent structural reforms needed. The SEC may be headed in the right direction, but not at the speed Americans have the right to expect given the agency’s monumental failures.

She continued:

The slow pace of reform is hard to fathom. If we’ve learned anything from the agency’s failure to stop Bernie Madoff and subsequent swindlers, it’s that the country needs an aggressive SEC working to protect Americans’ hard earned dollars.

Click here to read CREW’s report, “Reform at the SEC, Fiction or Reality?”

Click here to read a summary of the report’s findings.

On the heels of last week’s primaries that showed people are sick of ways of Washington, CREW today sent out two letters – one to Senate leaders Harry Reid (D-NV) and Mitch McConnell (R-KY) and one to Sen. Jim DeMint (R-SC) – asking for their support for S. Res. 502, a resolution introduced by Sens. Ron Wyden (D-OR) and Charles Grassley (R-IA) to eliminate secret holds.

CREW asked Sens. Reid and McConnell to bring up the Wyden-Grassley resolution as a stand-alone bill before the August recess and – for enforcement purposes – to grant the Senate Ethics Committee jurisdiction to investigate and discipline senators to violate the ban on secret holds.

In December 2009, CREW sent a letter to the Senate Ethics Committee asking them punish senators who violated widely-ignored the 2007 ban on secret holds, but the Committee responded in April 2010 that to do so lies outside their jurisdiction.

In addition to sending a letter to the party leaders in the Senate, CREW also sent a letter to Sen. DeMint because he has stopped the Senate from voting on the issue. On May 13th, the Wyden-Grassley provision was offered as an amendment to a bill on financial services reform, but Sen. DeMint offered a secondary amendment regarding the border fence, effectively killing the proposed ban on secret holds. Later, Sen. DeMint’s spokesperson indicated, via MSNBC’s The Dylan Ratigan Show, that Wyden-Grassley was not strong enough and that it was “not germane” to the financial reform bill.

Then, on two separate occasions last week when Sen. Wyden sought to bring the his resolution up for a vote, two senators, Jim Risch (R-ID) and Richard Shelby (R-AL), objected on Sen. DeMint’s behalf, again preventing a vote.

Given his spokesperson’s claim that he thought the initial provision was not strong enough, CREW asked Sen. DeMint to toughen the bill by working with Sens. Wyden and Grassley to strengthen the bill, again by giving the Senate Ethics Committee jurisdiction over violations.

Sen. DeMint has a history of making statements that rail against the Washington status quo and call for greater transparency. To that end, CREW’s executive director Melanie Sloan said today:

Nothing says transparency like an end to secret holds. How about an up-or-down vote on that?

Click here to read CREW’s letter to Sens. Reid and McConnell.

Click here to read CREW’s letter to Sen. DeMint.

Click here to read Sen. DeMint’s statements condemning “politics as usual.”

Late yesterday, in light of widely varying claims of just how much oil is currently spilling into the Gulf of Mexico, CREW and Greenpeace filed Freedom of Information Act (FOIA) requests for oil spill video feeds and related documents with the Coast Guard, Environmental Protection Agency, Interior Department and National Oceanic and Atmospheric Administration.

If scientists are given access to the live video feeds of the nearly month-long Deepwater Horizon spill, we would have a much more accurate estimate of the amount of oil that is leaking into the Gulf. British Petroleum executives have claimed 5,000 barrels a day, but others who have seen excerpts of the live video feed from the bottom of the Gulf have calculated a significantly higher amount.

CREW’s executive director, Melanie Sloan, said today:

It is impossible to understand why the government hasn’t already made the video feed and other records documenting the impact of the spill public. Americans have the right to any information that would allow an accurate assessment of the true dangers this oil spill has created. While we hope for prompt and complete responses to our requests, if the government resists or delays producing this critical information, CREW and Greenpeace are prepared to aggressively pursue this matter in court.

Read CREW’s and Greenpeace's FOIA requests to the:

• U.S. Coast Guard
• Environmental Protection Agency
• U.S. Department of the Interior
• National Oceanic and Atmospheric Administration

CREW and the National Security Archive today asked U.S. archivist David S. Ferriero to restore all of the millions of missing emails that went missing from Bush White House Servers. Our letter comes on the heels of new evidence that 83% of emails from 21 days between September 2003 and August 2005 were never archived.

CREW and the National Security Archive recently settled our lawsuits against the Executive Office of the President (EOP) and the National Archives and Records Administration (NARA) over the millions of Bush-era emails that had gone missing from White House servers. The settlement stipulated that EOP would conduct a comparison of archived email and email restored from backup tapes for 21 days identified as having a suspiciously low volume of email. That comparison revealed that just 83% of emails found on the backup tapes were not archived – and would have been lost forever if not for our lawsuit.

CREW has found that the process to identify “low volume” email days was flawed, however, so a large volume of unrestored emails – that are still on backup tapes – still remains missing. The archivist has custody over these tapes – and he must restore them to prevent vital government records from being lost forever.

What’s more, a recent NARA report shows that 79% of federal agencies may be improperly destroying records in violation of federal law. In light of CREW’s discovery regarding the missing White House emails, we’ve asked the Obama administration to convene a high-level commission to develop a plan of action to respond to this unacceptable problem.

Anne Weismann, CREW’s chief counsel, said today:

The Bush administration spent millions of dollars trying to prove there were no missing emails in the first place. Now we know the truth: emails did in fact vanish from White House servers. Unless the archivist takes further action, most of the emails lost from a 2 year period critical to our nation’s history will never be recovered. As troubling as the missing Bush emails are, the Obama administration has a much bigger problem on its hands. With the majority of federal records at risk of destruction, the government simply cannot sit back and do nothing while valuable records are lost to history.

Click here to read CREW’s and the Archive’s letter to the archivist.

Click here to read CREW’s and the Archive’s letter to the White House.