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July 20, 2006

Scam scam scam scam

Back when I was in grad school at American University, I ended up working with Jeff Reiman on what would become the 4th edition of his book, The Rich Get Richer & the Poor Get Prison. That turned into work on the 5th, 6th, 7th and the 8th edition (which will be out later this month o in August). Obviously there's something to the book and the thesis.

Being involved in the book has given me an appreciation for scams, especially by those who are powerful and wealthy. There are a few items I've collected recently on this topic. Not all are defined as crime, but they are scams and part of the blog's purpose is to highlight shit  problems like these.

Taxpayer Victim of Govt: Dept of Agriculture "Livestock Compensation Program" 

The Washington Post introduces the problem this way:

On a clear, cold morning in February 2003, Nico de Boer heard what sounded like a clap of thunder and stepped outside his hillside home for a look. High above the tree line, the 40-year-old dairy farmer saw a trail of smoke curling across the sky -- all that remained of the space shuttle Columbia.

Weeks later, de Boer was startled to learn that he was one of hundreds of East Texas ranchers entitled to up to $40,000 in disaster compensation from the federal government, even though the nearest debris landed 10 to 20 miles from his cattle.

The Livestock Compensation Program started out as a good idea in terms of helping farmers and ranchers hurt by drought. At first, ranchers had to have actually suffered a loss:

But ranchers who weren't eligible complained to their representatives in Washington, and in 2003 Congress dropped that requirement. Ranchers could then get payments for any type of federally declared "disaster." In some cases, USDA administrators prodded employees in the agency's county offices to find qualifying disasters, even if they were two years old or had nothing to do with ranching or farming.

In one county in northern Texas, ranchers collected nearly $1 million for an ice storm that took place a year and a half before the livestock program was even created. In Washington state, ranchers in one county received $1.6 million for an earthquake that caused them no damage. In Wisconsin, a winter snowstorm triggered millions of dollars more. For hundreds of ranchers from East Texas to the Louisiana border, the shuttle explosion opened the door to about $5 million, records show.

According to the Post, of the $1.2 billion the program spent between 2002 and 2003 "$635 million went to ranchers and dairy farmers in areas where there was moderate drought or none at all."

Several of the Republicans responsible declined comment. Yes Republicans - they're in charge and obviously have some blind spots when it comes to fiscal discipline, welfare, handouts, and big govt.

See Gaul, Morgan and Cohen, No Drought Required For Federal Drought Aid. Washington Post, July 18, 2006; Page A01.

In a related subsequent story, the Post  writes about the abuse of the powederd milk program, which was also intended to benefit the same population and remove an overstock from govt warehouses:

But within months, the program spawned a lucrative secondary market in which ranchers, feed dealers and brokers began trading the powdered milk in a daisy chain of transactions, generating millions of dollars in profits. Tens of millions of pounds of powdered milk intended solely for livestock owners in drought-stricken states went to states with no drought or were sold to middlemen in Mexico and other countries, a Washington Post investigation found.

Taxpayers paid at least $400 million for the emergency milk program, one of an array of costly relief plans crafted by Congress and the USDA to insulate farmers and ranchers from risk. 

Ultimately, there was little enforcement and no penalties even if people were caught. Obviously "tough on crime" has some specific limits as well.  [Gaul, Cohen and Morgan, Aid to Ranchers Was Diverted For Big Profits. Washington Post, July 19, 2006; Page A01. the sidebar in the web version has links to additional related stories.]

Health: Research & Conflicts of Interest

I've been interested in conflicts of interest since a spat involving some research showing private prisons had a lower recidivism rate. Turns out one of the authors was on the board of a private prison company, his adademic reseearch center on private prisons is funded by them, he's received millions in consulting and owns shares in private prisons. The research may stil be valid, but knowing the financial interest of the author is important in knowing how much additional scrutiny should be given to the results. Even if there's no screwing with the data, there is a perception of impropriety that can also be an issue for hose wishing to maintain a reputation of honesty.

So, my interest was piqued by the headline, "Journal Editor Again Says She Was Misled" (see story in Business Week or CNN). I saw the "news" stories later about the link in women between migraines and heart attacks, based on an article appearing in the Journal of the American Medical Association. But it turns out that:

All six authors of the study have done consulting work or received research financing from makers of treatments for migraines or heart-related problems.

The authors say it was a study on the biological link, so their consulting dollars and finances had nothing to do with it. (You can read the corrections and letters at the JAMA page here.)  The editors comment:

our policy has required complete disclosure of all financial interests and relationships and all affiliations relevant to the subject matter discussed in the article. In this case, financial interests and relationships with manufacturers of products that are used in the management of migraine or cardiovascular disease certainly are relevant and should be disclosed...

But in many ways, the damage is done. The story is in the journal and made the headlines - and attracted much more publicity than the very import additional information.

This happens a lot. Beware and dig for information. As we privatize, well - everything - more and more people will have financial ties. Corporations are increasingly likely to sponso (pay for) research that gets reported. Critical thinking is one of the most valuable abilities you can develop.

Bush Talks to NAACP About Race

Bush is talking to the NAACP today for the first time in six years, as part of a transparent ploy to get votes in the election this fall. From the transcript of his talk (provided by the NY Times):

We'll work together, and as we do so, you must understand I understand that racism still lingers in America. (Applause.) It's a lot easier to change a law than to change a human heart. And I understand that many African Americans distrust my political party.

AUDIENCE: Yes! (Applause.)

Remember this was the same guy who stood up after Katrina and said:

All of us saw on television, there's . . . some deep, persistent poverty in this region. That poverty has roots in a history of racial discrimination, which cut off generations from the opportunity of America. We have a duty to confront this poverty with bold action.

So what's happened, busides tax cuts for the rich and a continuing mess in New Orleans?  The Washington Post reminds us:

As it happened, poverty's turn in the presidential limelight was brief. Bush has talked little about the issue since the immediate crisis passed, while pursuing policies that his liberal critics say will hurt the poor. He has publicly mentioned domestic poverty six times since giving back-to-back speeches on the issue in September. Domestic poverty did not come up in his State of the Union address in January, and his most recent budget included no new initiatives directed at the poor...

He has never publicly discussed the growing crisis of young, uneducated black men, whose plight has worsened in the past decade even as the economy has generally flourished, according to a recent spate of academic studies.

*     *     * 

At one point in time, I had a desire to try to keep track of all the white collar and corporate crime headlines. I quickly found that there were too many. But I will try to keep doing posts like this to raise awareness.

Listening to

George Bush Doesn't Care About Black People (free mp3). This song uses the riff from Kanye West's Gold digger song [from Late Registration], and overlays a rap whose chorus is based on his televised comments, but it's done by The Legendary K.O. (I'm sure Kanye likes it). Words and additional info via Boing Boing.  

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