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[l] at 9/13/19 3:50pm

by Kyle Hopkins , Anchorage Daily News

The U.S. Department of Justice is adding federal prosecutors to pursue cases in remote Alaska towns and villages where U.S. Attorney General William P. Barr recently declared a public safety emergency.

After visiting Alaska and meeting with Alaska Native leaders, Barr declared the problem to be a national emergency, promising $10.5 million in immediate relief. On Thursday, U.S. Attorney Bryan Schroder in Anchorage announced new details on how the money will be spent, as well as related efforts by federal agencies and the state of Alaska.

Among the projects:

  • Funding three new federal prosecutors who will focus on rural Alaska criminal cases.
  • Upgrading public safety infrastructure, such as holding cells, for Alaska villages and tribes.
  • Developing “medium and long-term planning to address violent crime issues in rural Alaska” in tandem with Alaska Native leaders.

A monthslong investigation by the Anchorage Daily News and ProPublica found that one in three Alaska communities has no local law enforcement. Violent crime survivors must sometimes wait hours or days for authorities to arrive. Some villages lack jail cells or safe houses.

It is not yet clear how the federal money might address Alaska’s law enforcement crisis. Police in the state are hired by local communities, the state or the tribes. Some of the federal money is expected to be used for that purpose, particularly on tribal lands, which already get some dollars from the federal government to support an independent law enforcement system and courts.

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Dozens of village and tribal leaders told the Daily News and ProPublica that they want certified law enforcement in their communities, while University of Alaska Anchorage researchers found that sex crimes are more likely to be prosecuted when a village police officer aids in the investigation.

Advocates for Alaska Native rights and tribal sovereignty say any long-term reforms must include an expanded role for tribal courts and government-to-government partnerships between the U.S. and tribes. Research suggests that the presence of traditional elders and employment opportunities, rather than more cops and prosecutors alone, would reduce suicide, alcohol abuse and other problems that have troubled Alaska communities.

Members of Alaska’s congressional delegation also said they are pursuing solutions. Speaking to the Daily News this month, Republican Sen. Dan Sullivan said he is working with Tara Sweeney, assistant secretary for Indian affairs and a longtime Alaska Native leader, on a simple goal: “Every community that wants law enforcement should get it,” Sullivan said.

“The key issue, where the feds can really help, is on the training side,” he said. “That is one of the big areas where we are completely lacking.”

The training would be provided to village public safety officers, or VPSOs, and village police officers, or VPOs. VPSOs are funded by the state of Alaska and overseen by regional nonprofits. Their number is at or near an all-time low.

VPOs are usually hired by villages with fewer than 1,000 people. They make low wages, are sometimes untrained and generally have no benefits or retirement. Federally recognized tribes often hire tribal police officers, or TPOs, who perform similar duties.

Barr’s emergency declaration included $5 million to pay for law enforcement equipment and fund the hiring of 20 officers by tribes and regional nonprofits.

Read More The Village Where Every Cop Has Been Convicted of Domestic Violence Dozens of convicted criminals have been hired as cops in Alaska communities. Often, they are the only applicants. In Stebbins, every cop has a criminal record, including the chief.

Alaska’s sexual assault rate is nearly three times the national average and climbing. The Daily News and ProPublica are investigating the lack of public safety as part of an ongoing look at sexual abuse and a two-tiered justice system that leaves some rural Alaskans lacking basic protections.

“Among domestic violence victims in Alaska, Native women are over-represented by 250%. Yet, one in three communities in Alaska has no local law enforcement,” Sen. Lisa Murkowski, R-Alaska, tweeted Tuesday. Most of the more than 70 communities with no police are primarily Alaska Native.

“When bad things happen and there’s no law enforcement, bad things will continue to happen,” Murkowski said, speaking to tribal leaders at a National Congress of American Indians event in Washington, D.C.

ProPublica and the Anchorage Daily News are spending the year investigating sexual violence in urban and rural Alaska. Here’s how you can stay in touch with us:

Kyle Hopkins is an investigative reporter at the Anchorage Daily News. Email him at khopkins@adn.com and follow him on Twitter at @kylehopkinsAK.

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[l] at 9/13/19 4:00am

by Jodi S. Cohen

This week, my NPR Illinois and ProPublica colleagues reported on a lawsuit filed by two former University of Illinois at Urbana-Champaign students and a professor at another college against former Illinois professor Gary Gang Xu, alleging he assaulted, bullied and raped multiple students — and specifically targeted female Chinese students.

During the past decade, the flagship campus at Urbana-Champaign has become a destination for students from China and has enrolled more Chinese undergraduates during some years than any university in the U.S. There are 569 freshmen from China this year, about 7.4% of the class, according to university data released this week. Overall, there are 5,825 U. of I. students from China, including more than 3,000 undergraduates.

In 2006, fewer than 20 freshmen came from China.

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Five years ago, while a reporter at the Chicago Tribune, I traveled to China to write about this phenomenon. It was the first year that admissions officials held freshman orientation sessions in Beijing, Shanghai and Guangzhou, a reflection of the growing student population and the need to help them prepare for college life in the U.S.

I spoke with Xu while reporting that series. He was a university expert on the subject. A native of Nanjing, China, he started teaching at the university in the early 2000s. He explained that the connection between the university and China dates to the early 1900s, when then-university President Edmund James encouraged Chinese students to study there. James wrote in a journal article that educating Chinese students would benefit the U.S. and help secure relations between the two countries.

James also persuaded President Theodore Roosevelt to create a scholarship program, with money China paid to the U.S. at the end of the Boxer Rebellion in 1901, to support Chinese students’ studies here.

So when Chinese students began studying abroad in the 1980s, many picked Illinois.

“Chinese college students heard these stories, and those historical roots opened the door at the right time for us. When the floodgate was lifted, students were thinking of U. of I. as a nice destination because of all of these stories,” Xu told me in 2014.

Read More Assaults, Bullying, Rape: A Lawsuit Against One Professor Claims a University Didn’t Stop Him Former University of Illinois at Urbana-Champaign professor Gary Gang Xu assaulted and threatened students while university officials downplayed complaints, a lawsuit says. He ultimately resigned, taking $10,000 as part of his separation agreement.

At the time, he was a tenured professor and the head of the Department of East Asian Languages and Cultures. The lawsuit alleges that, at the same time, Xu was in an abusive relationship with an undergraduate student from China, one of the lawsuit’s plaintiffs. She was 19 and he was 45 when they met, according to the lawsuit, and he allegedly sexually assaulted her and coerced her to have an abortion. He allegedly threatened to send her back to China if she did not drop reports she made to the university about his conduct. (I knew nothing about these claims when I spoke with Xu).

In March 2018, Xu denied sexual assault claims, as reported in the student newspaper. He resigned from the university last year, two years after a university investigation found he committed misconduct. He was on paid leave for more than two years — from Jan. 1, 2016, to Aug. 15, 2018 — and received $10,000 as part of his resignation agreement. His salary had been $85,446.

The agreement also contained a confidentiality clause that said Xu “shall not disclose the existence or terms” of the agreement to “anyone else” including “members of the mass media.”

The university told NPR Illinois and ProPublica reporters in a statement: “We are aware of the filing and are reviewing it. We cannot comment on any of its contents at this time.”

Xu had a lot to say when I spoke with him five years ago about how the influx of Chinese students has changed the campus, the communities of Urbana and Champaign, and the students.

So far, he has not commented about the allegations in the lawsuit, which got a lot of media attention this week. He did not return my calls or emails seeking comment.

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[l] at 9/13/19 3:00am

by Maya Miller and Beena Raghavendran

Over the past few months, several hospitals have announced major changes to their financial assistance policies, including curtailing the number of lawsuits they file against low-income patients unable to pay their medical bills.

Investigative reports have spurred the moves, and they prompted criticism from a top federal official.

“We are learning the lengths to which certain not-for-profit hospitals go to collect the full list price from uninsured patients,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, told board members of the American Hospital Association on Tuesday, according to published remarks. “This is unacceptable. Hospitals must be paid for their work, but it’s actions like these that have led to calls for a complete Washington takeover of the entire health care system.”

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In June, ProPublica published a story with MLK50 on the Memphis, Tennessee-based nonprofit hospital system Methodist Le Bonheur Healthcare. It brought more than 8,300 lawsuits against patients, including dozens against its own employees, for unpaid medical bills over five years. In thousands of cases, the hospital attempted to garnish defendants’ paychecks to collect the debt.

After our investigation, the hospital temporarily suspended its legal actions and announced a review. That resulted in the hospital raising its workers’ wages, expanding its financial assistance policy and announcing that it would not sue its lowest-income patients. “We were humbled,” the hospital’s CEO, Michael Ugwueke, told reporters.

The same month, NPR reported that Virginia’s nonprofit Mary Washington Hospital was suing more patients for unpaid medical bills than any hospital in the state. Dr. Marty Makary, a surgeon at Johns Hopkins University, and fellow researchers had documented 20,000 lawsuits filed by Virginia hospitals in 2017 alone. The research team found that nonprofit hospitals more frequently garnished wages than their public and for-profit peers.

In mid-August, The Oklahoman reported that dozens of hospitals across the state had filed more than 22,250 suits against former patients since 2016. Saint Francis Health System, a nonprofit that includes eight hospitals, filed the most lawsuits in the three-year span.

In the first week of September, The New York Times reported that Carlsbad Medical Center in New Mexico had sued 3,000 of its patients since 2015. That report was also based on findings from Makary, who just published the book “The Price We Pay: What Broke American Health Care — and How to Fix It.”

And this week, Kaiser Health News and The Washington Post chronicled how Virginia’s state-run University of Virginia Health System sued patients more than 36,000 times over a six-year span.

There is no federal law mandating that nonprofit hospitals provide a specific amount of charity care, nor is there readily accessible data measuring how aggressively each hospital pursues patients for unpaid bills. But consumer advocates say the revelations in recent coverage on hospitals’ litigation practices are troubling.

“It’s dismaying to see how common it is,” said Jenifer Bosco, an attorney with the National Consumer Law Center who helped craft a Model Medical Debt Protection Act.

Nearly half of the nation’s 6,200 hospitals are nonprofits, meaning they are exempt from paying most local, state and federal taxes in return for providing community benefits.

But the issue of nonprofit hospitals engaging in aggressive debt collection practices that push the very communities they are designed to assist into poverty isn’t new.

In 2014, ProPublica reported on a small Missouri hospital that filed 11,000 lawsuits over a five-year span. In response, Sen. Chuck Grassley, R-Iowa, opened an investigation, and the hospital forgave the debts owed by thousands of former patients.

In 2003, The Wall Street Journal detailed how Yale-New Haven Hospital in Connecticut had pursued a patient’s widow to pay off his late wife’s 20-year-old medical bills. The hospital canceled the debt following the article.

“Some of these things are really outrageous,” said Jessica Curtis, a policy expert with Community Catalyst who helped draft billing protections for patients in the Affordable Care Act. “There are really aggressive tactics being used and little consideration or understanding for how those tactics actually impact people.”

Grassley, chairman of the Senate Finance Committee, sent a letter to the commissioner of the Internal Revenue Service in February to renew his inquiries into whether nonprofit hospitals provide sufficient community benefits to qualify for tax breaks.

Since publishing our story on Methodist hospital in Memphis, we’ve continued to work with communities in the city to better understand the toll these lawsuits are taking.

We’ve learned from our reporting that, because of the stigma around owing money, people who’ve been sued sometimes don’t want to discuss it with a reporter. So we’ve tried to reach people in several ways, including letters sent in the mail, flyers posted in spots they might frequent and graphics we’re sharing on Facebook. We’re learning a bit more every day about what resonates with the community, and we hope to report back on that soon.

In the meantime — and we tell this to every person we can — these stories are stronger and more accurate when people who’ve been sued share their experiences with us. Hearing from more people who have been sued can help us hold more institutions accountable.

If you’ve been sued by a nonprofit hospital or physician group, we want to hear from you. If you work or have worked for an organization that takes unusually aggressive legal action against people unable to pay, we’d also like to hear from you.

Fill out our questionnaire.

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[l] at 9/13/19 3:00am

by Jessica Huseman

In July, election officials across the country received a mass email from NormShield, a Virginia-based cybersecurity company few had heard of.

The company informed the officials it was about to publicly release the results of a “risk scorecard” it had generated assessing vulnerabilities in their internet-facing election systems. States could request their scorecards in advance, the company said, and join what it termed “a joint marketing and public service project.”

“NormShield is the only provider that assesses and prioritizes the risk of any organization within 60 seconds,” Chief Security Officer Bob Maley wrote. Its work would provide each state with an overview of its failures in 10 categories, all given an easy-to-understand letter grade “that can be instantly used to evaluate cyber defenses.”

Initially, most states ignored the email. Some told ProPublica they thought it was spam. Others dismissed it as a heavy-handed marketing ploy — one of dozens of such approaches states receive monthly from cybersecurity companies hoping to win government contracts.

But some states asked for reports on their systems. Considerable upset followed.

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States that received the reports found them riddled with errors and unhelpful for assessing actual election security. The work done by NormShield — called “Rapid Cyber Risk Scorecards” — had tested online government material not associated with elections. In Idaho, for example, the company examined the security of the Department of Environmental Quality, but not the state’s online voter registration system. In Oklahoma, of 200 IP addresses scanned, none were related to elections. In Vermont, the scan had been performed on a defunct domain.

“You would think a firm that claims expertise in cybersecurity could do a simple Google search to find the correct address of a state website,” Iowa Secretary of State Paul Pate said in a statement.

Multiple states confronted NormShield about the reports. Federal government agencies privately called it irresponsible, and nonprofit groups panned NormShield’s failure to appropriately notify the states of vulnerabilities before threatening to report them publicly.

It might all have faded away as an unremarkable, if annoying episode had it not been for the fact that NormShield on Tuesday published its work. While the published report did not name any specific states, it said that more than half of the 50 states whose systems it examined had received “a grade C or below.”

The report garnered considerable attention, written up by The Washington Post, Politico and Axios.

In interviews with ProPublica, election officials and experts in election security said NormShield’s behavior amounted to another kind of election security threat: companies looking to profit from a country on edge about the integrity of its national and local elections.

“There is a lot of work to do to better secure election technology, and states are looking for help,” said David Becker, the executive director of the Center for Election Innovation & Research. “But profiteering only serves to further diminish voter confidence, which is exactly what our adversaries want.”

In an interview, Maley, the NormShield official, defended the company’s work and its dealings with the states. He said that the security tests it ran were legitimate, and that the company had been aboveboard with election officials about that work and what NormShield intended to do with it. States, he said, had ample opportunity to both contest its findings or fix the identified vulnerabilities.

Election officials and experts contacted by ProPublica rejected the company’s assertions and criticized virtually every aspect of NormShield’s work on election systems. The technology it employed was limited, they said, and the company also had failed to honor industry best practices by not adequately alerting the states to its findings before making them public.

Election officials in Oklahoma, for instance, said the company had a “gross misunderstanding” of the state’s systems and rejected its findings. Iowa officials called the report “error ridden.” In an interview, Idaho’s Deputy Secretary of State Chad Houck said the scorecard was “so worthless that I didn’t print it out.”

While the scan did detect real problems — some states, for example, are not using standard protections to prevent email spoofing and others are using outdated operating systems — none of these problems are particularly revelatory, experts said. The Department of Homeland Security runs regular scans on election systems that detect identical problems, and many states said they already had long-term fixes in the works.

Jim Condos, the Vermont secretary of state, said that Vermont has hired multiple cybersecurity consultants recently to perform tests on its systems and none had made the conclusions reached by NormShield’s test, which relied exclusively on publicly available information and did not consult the states to ask specific questions about their security. Scans of other state agencies’ cyberhygiene were not, he said, a reflection of his office.

Maley laughed at the concerns in an interview. He said vulnerabilities in state sites unrelated to elections nonetheless posed risks. “Everything [election offices use] is connected to the state,” he said, calling it “disingenuous” for state officials to suggest otherwise. “Their mail servers, their DNS servers, their server farms — they are connected to the same networks.”

But J. Alex Halderman, a computer science professor at the University of Michigan who studies election systems, said potential interconnectivity to other state agencies is not enough to assert the level of danger NormShield has reported. While many states may depend on the infrastructure Maley references, not all do. Halderman said the tests were “a crude way” of assessing election security.

Dan Wallach, a computer scientist at Rice University, said that without asking specific questions about each state’s security protocols, a scan of the type that NormShield ran would only offer clues as to vulnerabilities but would not itself confirm they were present. “I’m going to label them as a company desperately trying to get attention for themselves,” he said. “This is clearly just a marketing attempt.”

In interviews over many months, election officials across the country have admitted that vulnerabilities exist, and that Americans are right to be worried. Those officials have been frustrated by both state and federal government failures to commit funding to helping protect elections. Congress has failed to pass several bills related to election security, most recently a $600 million funding infusion that would have come with a slew of cybersecurity requirements. Mitch McConnell, the Republican Senate majority leader, blocked their consideration. He says that the country has done enough to prevent Russian interference, and that federal security requirements attached to funding would threaten the states’ ability to conduct their elections as they see fit.

The same officials and a number of independent experts have also cautioned that a mix of legitimate worry and political frenzy has created an environment that companies can exploit. “It appears to me to be an attempt to create hysteria in the public to sell their product,” Condos said.

Candan Bolukbas, NormShield’s chief technology officer, said that the company had “no marketing mindset,” but that any election security work “automatically becomes a marketing item” because it is such a hot topic. He said the company had no intention of selling its product to states and would be offering the scans and assistance to them for free. Their target market is instead private companies, who may see the report and learn of NormShield’s offerings.

“Of course we want to sell our product,” a company spokesperson, Josh Zecher, said.

NormShield is a new company that performs what are called “nonintrusive” tests of websites used by government or private companies. Anyone can request a scan on NormShield’s website for free, and they can then pay NormShield to help mitigate any problems discovered. The company has recently received $3.5 million in seed money from investors.

Cybersecurity companies that perform vulnerability testing generally follow a very specific procedure for notification that includes individually reaching out to subjects and constructively helping them fix problems before publicizing them. NormShield does not appear to have followed this process.

“It’s not a good practice to release scary information based on insufficiently vetted, automatically generated threats. Election officials now need to spend time they don’t have responding to these poorly vetted claims,” said Ben Adida, the CEO of VotingWorks, a nonprofit building secure and affordable voting machines. “I’m sure NormShield meant well, but it seems to me they caused net harm.”

While states were offered an advance copy of their July scorecards, they were unaware that the company had done a second set of tests in August until the public report was released this week. Maley said the report included updated information for the states who demanded NormShield redo the reports using the correct addresses. If a state ignored the report and did not alert NormShield to flaws, the company assumed there were no objections.

Maley said that if NormShield tested incorrect websites, the fault was with the National Association of State Election Directors, which was where the company found the list of websites. NASED, a nonprofit run by a single person, was not contacted ahead of the list being used.

The company appears to have made no independent effort to verify it tested the correct sites. In an interview, when asked what efforts had been made to fact-check the scores, both Maley and Bolukbas said such efforts were unnecessary and not part of their offering to states. “Our proactive part is done when we generate the report,” said Bolukbas, who said mistakes were “inevitable” in any cybersecurity product.

Maley said that states were given “every opportunity” to ask for corrections, and that he regretted if states felt that NormShield’s communication was ineffective or a marketing ploy. When pressed on what opportunities were given to the states, Maley and Bolukbas ended the interview.

In its report, NormShield appears to claim extensive success pointing out vulnerabilities to states. “After the July assessment, NormShield privately provided its findings to the Secretaries of State (SOS) and election commissions in July in order to empower them with the information needed to remediate vulnerabilities. NormShield ran a second scan in August and found significant improvement in the security posture of several election commissions,” it wrote. Media coverage in the Post, Politico and Axios likewise mentions the improvements, correlating them with NormShield’s scans.

But ProPublica was unable to find a state that had made any changes after receiving the report. And in a phone call, Maley downplayed the company’s responsibility for the improvement, saying he was “not willing” to make the correlation between the disclosure and the improvement. “I don’t know,” he said. He declined to specify which states’ grades had improved, and experts say that states may have made a number of changes unrelated to the scans that would have affected their scores.

The Post wrote that NormShield “plans to publish another report next month in which it will actually name which states have low grades” — a move Wallach said would be irresponsible. Maley denied having said this, only saying that it was a “potential option” if states didn’t improve, and that the company would have “internal discussions” about next steps after the data was analyzed.

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[l] at 9/12/19 5:00am

by Patricia Callahan and James Bandler

Amazon is facing questions from Capitol Hill over the safety of its vast delivery network and how the e-commerce giant has evaded responsibility for its role in deaths and serious injuries in crashes involving contractors delivering Amazon packages.

In a letter sent on Thursday to Amazon CEO Jeff Bezos, Sen. Richard Blumenthal decried the company’s “evasive practices and moves to cut regulatory corners,” citing recent investigations by ProPublica and BuzzFeed.

Amazon’s promise of rapid delivery has come with a steep human toll. The ProPublica investigation, which was co-published last week with The New York Times, identified more than 60 crashes since June 2015 involving Amazon delivery contractors that resulted in serious injuries, including 10 deaths.

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Amazon has repeatedly said in court that it is not responsible for the actions of its contractors, citing agreements that require them, as one of the documents puts it, to “defend, indemnify and hold harmless Amazon.”

In recent years, Amazon has built a huge logistics operation to get more goods to customers’ homes in less time. To reduce its reliance on legacy carriers like United Parcel Service, the retailer has created a network of contractors across the country that allows the company to expand and shrink the delivery force as needed, while avoiding the costs of taking on permanent employees.

In his letter to Bezos, Blumenthal, a Democrat from Connecticut, demanded information about the contracts Amazon has with third-party delivery companies.

Describing an “aggressive managerial style” that Amazon forces on its delivery companies that has led to a “chain of worker abuse,” Blumenthal called on the Seattle-based retail giant to “immediately cease” business with contractors that violate labor laws.

“It is simply unacceptable for Amazon to turn the other way as drivers are forced into potentially unsafe vehicles and given dangerous workloads,” Blumenthal said in the letter, which was also signed by Sen. Elizabeth Warren, D-Mass., and Sen. Sherrod Brown, D-Ohio.

“The relentless pressure created by Amazon’s delivery policies raises serious concerns about the working conditions its independent contractors and drivers face — creating a system of worker exploitation and abuses.”

An Amazon spokeswoman did not return calls for comment or respond to emails. In an earlier statement to ProPublica and BuzzFeed, Amazon said, “The assertions do not provide an accurate representation of Amazon’s commitment to safety and all the measures we take to ensure millions of packages are delivered to customers without incident.”

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[l] at 9/12/19 3:00am

by Renee Dudley

On July 3, employees at Arbor Dental in Longview, Washington, noticed glitches in their computers and couldn’t view X-rays. Arbor was one of dozens of dental clinics in Oregon and Washington stymied by a ransomware attack that disrupted their business and blocked access to patients’ records.

But the hackers didn’t target the clinics directly. Instead, they infiltrated them by exploiting vulnerable cybersecurity at Portland-based PM Consultants Inc., which handled the dentists’ software updates, firewalls and data backups. Arbor’s frantic calls to PM went to voicemail, said Whitney Joy, the clinic’s office coordinator.

“The second it happened, they ghosted everybody,” she said. “They didn’t give us a heads up.”

A week later, PM sent an email to clients. “Due to the size and scale of the attack, we are not optimistic about the chances for a full or timely recovery,” it wrote. “At this time we must recommend you seek outside technical assistance with the recovery of your data.”

On July 22, PM notified clients in an email that it was shutting down, “in part due to this devastating event.” The contact phone number listed on PM’s website is disconnected, and the couple that managed the firm did not respond to messages left on their cellphones.

The attack on the dental clinics illustrates a new and worrisome frontier in ransomware — the targeting of managed service providers, or MSPs, to which local governments, medical clinics, and other small- and medium-sized businesses outsource their IT needs. While many MSPs offer reliable support and data storage, others have proven inexperienced or understaffed, unable to defend their own computer systems or help clients salvage files. As a result, cybercriminals profit by infiltrating dozens of businesses or public agencies with a single attack, while the beleaguered MSPs and their incapacitated clients squabble over who should pay the ransom or recovery costs.

Cost savings are the chief appeal of MSPs. It’s often cheaper and more convenient for towns and small businesses with limited technical needs to rely on an MSP rather than hire full-time IT employees. But those benefits are sometimes illusory. This year, attacks on MSPs have paralyzed thousands of small businesses and public agencies. Huntress Labs, a Maryland-based cybersecurity and software firm, has worked with about three dozen MSPs struck by ransomware this year, its executives said. In one incident, 4,200 computers were infected by ransomware through a single MSP.

Last month, hackers infiltrated MSPs in Texas and Wisconsin. An attack on TSM Consulting Services Inc. of Rockwall, Texas, crippled 22 cities and towns, while one on PerCSoft of West Allis, Wisconsin, deprived 400 dental practices around the country of access to electronic files, the Wisconsin Dental Association said in a letter to members. PerCSoft, which hackers penetrated through its cloud remote management software, said in a letter to victims that it had obtained a key to decrypt the ransomware, indicating that it likely paid a ransom. PerCSoft did not return a message seeking comment.

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TSM referred questions about the Texas attack to the state’s Department of Information Resources, which referred questions to the FBI, which confirmed that the ransomware struck the towns through TSM. One of the 22 Texas municipalities has been hit by ransomware twice in the past year while using TSM’s services.

FBI spokeswoman Melinda Urbina acknowledged that MSPs are profitable targets for hackers. “Those are the targets they’re going after because they know that those individuals would be more apt to pay because they want to get those services back online for the public,” she said.

Beyond the individual victims, the MSPs’ shortcomings have a larger consequence. They foster the spread of ransomware, one of the world’s most common cybercrimes. By failing to provide clients with reliable backups or to maintain their own cybersecurity, and in some cases paying ransoms when alternatives are available, they may in effect reward criminals and give them an incentive to strike again. This year, ProPublica has reported on other industries in the ransomware economy, such as data recovery and insurance, which also have enriched ransomware hackers.

To get inside MSPs, attackers have capitalized on security lapses such as weak passwords and failure to use two-factor authentication. In Wisconsin and elsewhere, they also have exploited vulnerabilities in “remote monitoring and management” software that the firms use to install computer updates and handle clients’ other IT needs. Even when patches for such vulnerabilities are available, MSPs sometimes haven’t installed them.

The remote management tools are like “golden keys to immediately distribute ransomware,” said Huntress CEO Kyle Hanslovan. “Just like how you’d want to push a patch at lightning speed, it turns out you can push out ransomware at lightning speed as well.”

Otherwise, the hacker may spread the ransomware manually, infecting computers one at a time using software that normally allows MSP technicians to remotely view and click around on a client’s screen to resolve an IT problem, Hanslovan said. One Huntress client had the “record session” feature of this software automatically enabled. By watching those recordings following the attack, Huntress was able to view exactly how the hacker installed and tracked ransomware on the machines.

Watch a Hacker Install Ransomware

A recording shows a hacker disabling a victim’s virus protection and checking to make sure the ransomware is encrypting the computer’s files.

Source: Huntress Labs; Credit: Lucas Waldron

In some cases, Hanslovan said, MSPs have failed to save and store backup files properly for clients who paid specifically for that service so that systems would be restored in the event of an attack. Instead, the MSPs may have relied on low-cost and insufficient backup solutions, he said. Last month, he said, Huntress worked with an MSP whose clients’ computers and backup files were encrypted in a ransomware attack. The only way to restore the files was to pay the ransom, Hanslovan said.

Even when backups are available, MSPs sometimes prefer to pay the ransom. Hackers have leverage in negotiations because the MSP — usually a small business itself — can’t handle the volume of work for dozens of affected clients who simultaneously demand attention, said Chris Bisnett, chief architect at Huntress.

“It increases the likelihood that someone will pay rather than just try to fix it themselves,” Bisnett said. “It’s one thing if I have 50 computers that are ransomed and encrypted and I can fix them. There’s no way I have time to go and do thousands of computers all at the same time when I’ve got all these customers calling and saying: ‘Hey, we can’t do any business, we’re losing money. We need to be back right now.’ So the likelihood of the MSP just saying, ‘Oh I can’t deal with this, let me just pay,’ goes up.”

Because there are so many victims, the hacker can make a larger ransom demand with greater confidence that it will be paid, Hanslovan said. Attacking the MSP “gives you hundreds or even thousands more computers for the same cost of infection,” he said. The “support cost of negotiating the ransom is low” since the attacker typically corresponds with the MSP rather than its individual clients.

Before this year’s ransomware spree, MSPs were susceptible to other kinds of cybercrime. Last October, the U.S. Department of Homeland Security warned in an alert about attacks on MSPs for “purposes of cyber espionage and intellectual property theft.” It added that “MSPs generally have direct and unfettered access to their customers’ networks,” and that “a compromise in one part of an MSP’s network can spread globally, affecting other customers and introducing risk.”

The first spate of ransomware attacks on MSPs, early this year, deployed what is called the GandCrab strain. Then, in an online hacking forum, the hackers behind GandCrab announced their retirement in May. After that, another strain of ransomware known as Sodinokibi ransomware sprung up and began targeting MSPs.

Send Us Tips We’re Reporting on Ransomware. Do You Know Something About an Attack? Has your organization been hit by ransomware? Did you hire a data recovery firm? Do you know how an attack works from the inside? We’d like to hear from you.

Sodinokibi ransom amounts are “scaled to the size of the organization and the perceived capacity to pay,” according to Connecticut-based Coveware, which negotiates ransoms for clients hit by ransomware. Sodinokibi will not run on systems that use languages including Russian, Romanian and Ukranian, according to security firm Cylance, possibly because those are native languages for hackers who don’t want to draw the attention of local law enforcement.

Sodinokibi was the strain used in the attack on TSM Consulting Services that encrypted the computers of 22 Texas municipalities, leaving them unable to fulfill tasks such as accepting online payments for water bills, providing copies of birth and death certificates and responding to emails. Most of the towns have not been publicly identified. More than half have returned to normal operations, the Texas Information Resources Department said in an update posted on its website. The hackers sought millions of dollars. The department is "unaware of any ransom being paid in this event," according to the update.

TSM began operations in 1997, and it provides equipment and support to more than 300 law enforcement agencies in Texas, according to its website. It is unclear why the 22 municipalities, and not TSM’s other clients, were affected by the August attack.

One of the 22 Texas municipalities hit last month was Kaufman, a city about 30 miles southeast of Dallas. An attack last November on Kaufman, which forced its police department to cease normal operations, was mentioned in a ProPublica article about two data recovery firms that purported to use proprietary technology to disable ransomware but in reality often just paid the attackers. TSM had enlisted one of the firms, Florida-based MonsterCloud, to help Kaufman recover from the November intrusion.

MonsterCloud waived its fee in exchange for a video testimonial featuring the Kaufman police chief, the president of TSM and the TSM technician who worked with Kaufman. In the testimonial, TSM technician Robby Pleasant said that the attackers had “reset everyone’s password, including the administrator,” and that the data “was locked up and not functioning.” Pleasant said in the video that MonsterCloud was able to “recover all the data” and “saved the day.”

“They can come in and recover even if someone does find a hole in our armor,” Pleasant said in the video.

Last month, attackers again found a hole in TSM’s armor. Using a third-party software vendor, rather than TSM, Kaufman had strengthened its backup system since the first attack, so it was able to restore much of the lost data, City Manager Michael Slye said. Kaufman’s computer systems were down for 24 hours, and the city handled municipal business such as writing tickets and taking payments on paper during that time, Slye said.

But backup safeguards were less effective for Kaufman’s police department, which uses a different type of software than other city offices, Slye said. The department’s dashcam video storage lost months of footage, and it still isn’t working, he said.

“It was not a fun experience to get this twice,” he said.

A TSM employee who declined to be named said the November attack may have been caused by “someone clicking on a bad email. We don’t have definitive information on that. We went into recovery mode immediately.”

PM Consultants, the Oregon provider of IT services to dental clinics, was run by a husband and wife, Charles Gosta Miller and Ava Piekarski, out of their home, according to state records. The firm didn’t employ enough technicians, said Cameron Willis, general manager of Dentech LLC in Eugene, Oregon, which took on many of PM’s former clients. Some former PM clients have complained to Willis that it was unresponsive to their requests for help, he said.

“A lot of dental office facilities don’t want to spend the money on IT infrastructure the way they should,” and they lack the technical know-how to vet providers, Willis said. They “don’t know any better. They don’t have the time to research. If you have someone who does provide some service, it’s very, very easy to see how some of the fly-by-nights would attract such a large clientele. ... When one office finds something that works, they scream it to the hills.”

In the July 22 email announcing its closure, PM said it had been “inundated with calls” on the morning of the ransomware attack, “and we immediately started investigating and trying to restore data. Throughout the next several days and into the weekend, we worked around the clock on recovery efforts. ... However, it was soon apparent the number of PC’s that needed restoration was too large for our small team to complete in any reasonable time frame.” The company was also “receiving hundreds of calls, emails and texts to which we were unable to respond.”

PM said that it had retained counsel to “assist with recovery of any available insurance, payment and billing proceeds,” and that it would be “sending out final invoices in the next two weeks.” Its formal dissolution, it continued, “will include an option to submit a claim” against the company.

Austin Covington, director of Lower Columbia Oral Health, a Longview, Washington, clinic affected by the attack, said it plans to take legal action against PM and declined to comment further. Other victims have not been publicly identified.

Read More The Extortion Economy: How Insurance Companies Are Fueling a Rise in Ransomware Attacks Even when public agencies and companies hit by ransomware could recover their files on their own, insurers prefer to pay the ransom. Why? The attacks are good for business.

Some dentists “did not lose any data” because they had good backup files, Willis said. “Some clients lost some. Some lost a lot.” He doesn’t know whether clients paid ransoms, he said.

Dentech takes a different approach than PM did, Willis said. To prevent ransomware and other breaches, even its own staff has limited access to the remote management software favored by hackers, he said. It has 14 technicians, who often handle services such as software updates in person, he said. Dentech requires clients to use best practices, Willis said. If they decline, the firm requires them to sign a waiver releasing Dentech of liability in case of ransomware or other data loss.

Without such explicit terms, it’s often unclear whether the MSP or its clients are responsible for paying ransoms or recovery costs associated with an attack. Chris Loehr, executive vice president of Texas-based Solis Security, which helps victims negotiate ransom payments, was called in when GandCrab ransomware struck an MSP and encrypted some of its clients’ backup files several months ago. The MSP paid the ransom only for those that used its data backup service, which had failed, Loehr said. Clients who did not buy the backup service had to decide themselves whether to pay the ransom.

This summer, in a separate incident, Loehr negotiated with hackers on behalf of a New York-based MSP that was hit by Sodinokibi ransomware. The MSP didn’t want to pay the total ransom of about $2 million in bitcoin to unlock the files of all its clients, who were primarily architectural and engineering firms. Instead, each of the 200 affected clients was left to decide whether to pay about $10,000 in bitcoin. The MSP’s owner refused for legal reasons; he was worried that, if he was sued over the attack, a payment might be construed as an admission of fault, Loehr said.

The preponderance of low-quality MSPs has fostered the current ransomware onslaught, Loehr said. He noted that little experience or funding is needed to open an MSP; the barriers to entry are few.

“The startup costs are low,” Loehr said. “It doesn’t take much. The way the MSP world works, it’s not like you have to go out and buy $1 million of software. You can operate out of your house. These guys charge their clients up front. There is little cash flow to get this stuff off the ground.”

“Every IT guy thinks he can do this,” Loehr said. “‘Hey, I’m a technology guy.’

“No.”

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[l] at 9/11/19 9:11am

by ProPublica

ProPublica is announcing the beta launch of Collaborate, an open-source tool that helps reporters and newsrooms work together on data journalism projects. The tool will debut this week at the Online News Association conference in New Orleans.

As large datasets become more available, they can be difficult for newsrooms to mine efficiently. From troves of data from the federal government to crowdsourced information regularly fielded by social media teams, massive datasets often contain more story leads than one reporter can meaningfully pursue. ProPublica’s Collaborate allows multiple reporters — from one or many newsrooms — to work together.

An open-source software project, Collaborate lets journalists work together to review, verify and report on data that they have collected by uploading spreadsheets or linking to Google Sheets, Google Forms or Screendoor. Once data is added to Collaborate, users can assign data points to individuals or newsrooms; track progress and keep notes around each data point; sort, filter and export the data; and automatically redact sensitive information.

Funded by a Google News Initiative grant, the software is designed to be used by newsrooms of any size, even if they have limited technological resources. Collaborate can be launched and customized without the help of a developer; or users can find the code on Github and tailor it to their needs.

“At ProPublica, we understand that in working with other newsrooms, we can do more powerful journalism, reach wider audiences and have more impact,” said Rachel Glickhouse, partner manager for ProPublica’s Documenting Hate project. “Collaborate makes it easier for more reporters to do collaborative data journalism, whether it involves hundreds of partners or just one or two.”

ProPublica will be providing live demonstrations of the software at the Online News Association conference on Friday from 10 a.m. to 5 p.m. on the fifth floor of the Sheraton New Orleans. This fall, ProPublica will provide virtual trainings on how to use Collaborate and launch crowd-powered projects around shared datasets. The tool is the latest effort this year to help more newsrooms work together; in August, ProPublica published a guide to data collaborations, which shares best practices learned through working in this arena.

Collaborate is an expansion of software built by ProPublica to power two large-scale data collaborations that the nonprofit newsroom has led in recent years. Electionland, a project that monitored voting problems in real time during the 2016 presidential and 2018 midterm elections, brought together more than 1,000 journalists and students across the country. The initiative has been recognized with an Online Journalism Award and a Data Journalism Award for News Data App of the Year, among other honors. Documenting Hate, launched in 2017 after a surge in reported hate incidents along with inadequate data collection on hate crimes, has collected more than 5,000 reports in a database used by more than 170 newsrooms. The project was a finalist for a National Magazine Award and a Scripps Howard Award.

Learn more about Collaborate at ProPublica’s Nerd Blog.

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[l] at 9/11/19 9:10am

by Rachel Glickhouse

On Wednesday, we’re launching a beta test of a new software tool. It’s called Collaborate, and it makes it possible for multiple newsrooms to work together on data projects.

Collaborations are a major part of ProPublica’s approach to journalism, and in the past few years we’ve run several large-scale collaborative projects, including Electionland and Documenting Hate. Along the way, we’ve created software to manage and share the large pools of data used by our hundreds of newsrooms partners. As part of a Google News Initiative grant this year, we’ve beefed up that software and made it open source so that anybody can use it.

Collaborate allows newsrooms to work together around any large shared dataset, especially crowdsourced data. In addition to CSV files and spreadsheets, Collaborate supports live connections to Google Sheets and Forms as well as Screendoor, meaning that updates made to your project in those external data sources will be reflected in Collaborate, too. For example, if you’re collecting tips through Google Forms, any new incoming tips will appear in Collaborate as they come in through your form.

Once you’ve added the data to Collaborate, users can:

  • Create users and restrict access to specific projects;
  • Assign “leads” to other reporters or newsrooms;
  • Track progress and keep notes on each data point;
  • Create a contact log with tipsters;
  • Assign labels to individual data points;
  • Redact names;
  • Sort, filter and export the data.

Collaborate is free and open source. We’ve designed it to be easy to set up for most people, even those without a tech background. That said, the project is in beta, and we’re continuing to resolve bugs.

If you are tech savvy, you can find the code for Collaborate on Github, and you’re welcome to fork the code to make your own changes. (We also invite users to submit bugs on Github.)

This new software is part of our efforts to make it easier for newsrooms to work together; last month, we published a guide to data collaborations, which shares our experiences and best practices we’ve learned through working on some of the largest collaborations in news.

Starting this month, we’ll provide virtual trainings about how to use Collaborate and how to plan and launch crowd-powered projects around shared datasets. We hope newsrooms will find the tool useful, and we welcome your feedback.

Get started here.

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[l] at 9/11/19 3:00am

by Peter Elkind with Doris Burke

On the evening of May 30, Brad Parscale, the campaign manager of Donald J. Trump for President Inc., gave a speech to a gathering of the faithful. Parscale is a striking figure: 6-foot-8, with a trademark Viking beard and a penchant for bombast. He was a phenom of the 2016 election, rising, in a matter of months, from an anonymous web designer in San Antonio to the Trump campaign’s reputed digital savior. Parscale has become a frequent warmup act at Trump rallies and a prized attraction in GOP fundraising circles.

On this occasion, he was speaking to the Miami Young Republicans. Parscale regaled the audience with his litany of Trump’s achievements, according to a recording of the speech (provided by Palm Beach Post reporter Christine Stapleton). He warned of the “crazy socialist Democrats” who want to “slaughter” babies in the third trimester; admit “all of South America” to the U.S. through open borders; and render jet-fueled planes illegal and “farming cows” extinct. “I don’t know about you guys,” Parscale told them. “I really like steak.”

Parscale then turned to his own rhetorical question: “How the heck did you get from East Topeka, Kansas, 43 years old, to become the right-hand man to the Trump family?” That’s a truly remarkable tale, although much, as it turns out, is not quite as Parscale describes it.

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In the speech, Parscale painted his own life story as a testament to the need for Trump. He served up a vivid account of facing crushing personal and professional setbacks (“I was down and out”) before launching a business on a shoestring, then prospering through hard work and self-reliance. He is evidence of the American dream, Parscale declared. His life, he said, shows “why we all need to go out and fight for the president. So that all of our kids can have that same possibility to have that dream happen for them.”

In fact, Parscale’s accounts of his life and his work for the president comprise a classic Trumpian tale: They’re a combination of hyperbole, half-truths and the occasional fiction. Indeed, Parscale shares more than one trait with his most important client. He has embraced political beliefs not in evidence before the 2016 campaign. Like Trump, he has adapted to opportunities as they arose. And like Trump, Parscale is largely unencumbered by the concerns for consistency and accuracy that are the hobgoblins of smaller minds. “When I give a speech, I tell it like a story,” Parscale says when asked about his biographical embellishments and errors. “My story is my story.”

Consider what Parscale has said about his own compensation this campaign season. He has repeatedly emphasized that he is refusing to take the customary cut of the campaign’s digital ad spending. “I felt like as campaign manager it would seem not very ethical and very good of myself to pay myself a percentage of my decisions,” Parscale told CNN earlier this year. Instead, he said, he is accepting a relative pittance for his efforts: an annual “retainer” of $300,000, plus unspecified bonuses. “I wanted to set a high mark,” he told Breitbart News. As he put it: “I don’t do this for a percentage. I do this for my country and for President Trump.”

But that wasn’t the full story. Parscale’s no-commissions policy did not apply when the client was the Republican National Committee, whose main mission, at least when it comes to employing Parscale’s firm, is reelecting Trump. That work represented $18 million in billings for Parscale Strategy since he was named 2020 campaign manager, dwarfing the $4.8 million his companies have received directly from Trump committees.

In an interview for this article, Parscale confirmed he was taking commissions on the portions of the $18 million that was used to buy advertising, but he declined to discuss specifics. Parscale said he saw no conflict of interest because the party was making the decisions. “That’s the RNC’s money,” he said. “If they call me tomorrow and say, ‘We’re not spending any more money on this,’ there’s nothing I can do.”

Parscale then changed his position following that interview and two articles in other publications that examined Parscale’s compensation. The RNC told ProPublica and Texas Monthly in early September that, at Parscale’s request, it would no longer purchase digital ads through his firms. “Going forward, all RNC digital buys will be made directly to the host sites,” party spokesman Mike Reed says. “This is to ensure complete transparency and to give Democrats and the press no way to mislead and wrongly accuse anyone of impropriety.”

Parscale and his fees have attracted an unusual amount of attention, but they’re only part of the story. He has also spearheaded what appears to be the Trump campaign’s takeover of the RNC to the benefit of the president — and the seeming detriment of other Republican candidates. Other presidents have consolidated control over their party; similar criticisms were made of Barack Obama. But the extent of Trump’s takeover is unprecedented, according to experts. They say it inflicted damage on Republican congressional candidates in the 2018 elections, and could do so again in 2020.

One previously unreported example: Since Trump’s election in 2016, critical “voter scores” — sophisticated polling-based analytics that the RNC provides to party committees and candidates — have conspicuously omitted an essential detail for any down-ballot race: how voters in specific states and congressional districts feel about Trump. Republican insiders believe these analytics are being withheld to try and prevent GOP candidates from publicly distancing themselves from the president or leaking unfavorable results that embarrass Trump.

“They don’t want you to know if it isn’t good,” says former RNC chairman Michael Steele, a vocal Trump critic. “There’s a lot of data they’re sitting on that they’re not sharing.” Steele adds that today, “the RNC is not an independent actor; the RNC is now a part of the Trump campaign. The question now isn’t, ‘What do you need?’ The question is, ‘Do you support Donald Trump?’”

In both power and money, the 2020 Trump campaign dwarfs the 2016 incarnation. “You have less than a handful of people who now control the entire ecosystem” of the Republican Party, says one prominent former RNC official, and Parscale is one of that handful. A big part of his sway stems from the massive quantities of money he raises. Parscale sits atop a juggernaut that reported gathering $108 million just in the second quarter this year and that is well on its way to becoming what he claims will be America’s first billion-dollar campaign.

All of which raises the ultimate question for Parscale: He won big in 2016 as an upstart among a small band of political insurgents. Can he win again in 2020 as the captain of an operation so big and established that one operative refers to it as the “Death Star”?


In political terms, Brad Parscale was a nobody before his association with Trump. In the span of just a few years, he has reinvented himself, transforming from an apolitical digital geek — building local websites in T-shirts and cargo shorts for a small San Antonio company — into a hyperpartisan president’s raging avatar, bestriding the national stage in Ermenegildo Zegna suits.

“He was not that guy three years ago,” says John Dickson, a principal of Denim Group, a prominent San Antonio cybersecurity firm, who met Parscale during the 14 years Parscale worked in that city. “He was not a bomb-thrower or an ideologue. He was a savvy business guy, a hustler.”

Indeed, before Trump, Parscale’s Twitter feed was far more Deep Nerd than Deep State — exchanges of coding tips and bro talk. He almost never weighed in on politics. Back then, his Twitter targets weren’t Bernie and Biden, but Luby’s and Chipotle, for falling short on his culinary expectations (“sad there are no standards on how much you get in a salad…”).

Parscale and his parents say he adapted so quickly to meeting Trump’s needs because his own father is very much like him: impatient, unfiltered and larger-than-life.

“I’m not a silver-spoon-type person,” Dwight Parscale declares during a three-hour conversation in the 19th Hole restaurant at Club at Sonterra, the San Antonio country club where he holds court many mornings. “I worked my ass off all my life, and I didn’t know any other way. … Am I worth over a million bucks? Yes. But that’s not that much today. I’ve never considered myself rich.”

Dwight Parscale, 73, was a lawyer but says he abandoned the profession around age 50 after an unfriendly local judge handed down an “outrageous” opinion, prompting him to announce to friends, “I’m going to beat the crap out of him!” He adds, “I finally calmed down and went home and told my wife I’m not going to practice law anymore.”

Aside from Dwight Parscale’s legal practice, he and his wife, Rita, operated a string of businesses over the years, sometimes three at once. They included a swimming pool company, a scuba shop, real estate enterprises, restaurants and a Western-themed nightclub featuring a mechanical bull imported from Fort Worth.

Brad Parscale has spoken of a modest upbringing, describing himself as a “farm boy from Kansas.” In fact, he grew up on a suburban cul-de-sac. He attended Topeka-area public schools, where he was a good student and a basketball star. A frustrating college sports career, ended by injuries to his leg and back, took him to four schools. He graduated from Trinity University in San Antonio in 1999, majoring in international business and economics. (He regularly describes it, incorrectly, as an Ivy League school.)

Dwight Parscale, meanwhile, had become the CEO of a Topeka technology company, NewTek, and moved its headquarters to San Antonio before a falling-out with the founder that ended in litigation. The Parscales then relocated to Southern California, where Dwight Parscale became the CEO of a small 3D animation software company called Electric Image.

Brad Parscale went to work for his dad after college, becoming sales manager for Electric Image at a salary of $95,000. Rita Parscale helped manage the company’s books. By the fall of 2001, the Parscales say, they were trying to sell to private investors when the deal, and their business, collapsed amid the economic swoon that followed 9/11.

In his Miami speech, Parscale said he had “just had my first child, married” when he moved out to California, along with “an adopted son,” before the failure of Electric Image and the loss of his job, “within a few months” of the 2001 World Trade Center attacks, sent him reeling. “In a year of that, I lost my wife. Not died — separated. … We got divorced, ended back in Texas.”

In fact, Parscale wasn’t married then, much less divorced. He had become a father in July 1999, at age 23, just weeks after graduating from college. The mother was a 22-year-old woman he’d met while she was working at a San Antonio tanning salon he patronized; she had a son from a previous relationship.

Court records show that the two didn’t marry until March 2003, three years and eight months after their daughter was born. Parscale filed for divorce in August 2004. The split wasn’t finalized until October 2007, when he was 31. Parscale never adopted his first wife’s son.

Electric Image’s failure is also more complex than he has portrayed it. The company filed for bankruptcy in August 2002, declaring $188,453 in assets and nearly $2 million in debt, including $100,068 owed to the IRS for unpaid withholding taxes.

Parscale and his parents improperly transferred company funds and assets to themselves, according to a lawsuit against the three family members filed by a U.S. bankruptcy trustee, a claim disputed by the family. Exhibits in the case show checks, all signed by Rita Parscale in August 2003, for $33,000 paid to Dwight Parscale, $4,800 to Rita Parscale and $6,200 to Brad Parscale. According to the bankruptcy trustee’s filings, Dwight Parscale had taken the company’s business records “to the garbage dump” before the family left California and returned to Texas.

The trustee also accused the Parscales of improperly transferring Electric Image assets for use by a new company in San Antonio, EI Technology Group, which later listed Brad Parscale as CEO. (He continued selling software through EI for years until 2009.)

The matter was finally settled in 2006, with the Parscales agreeing to repay a portion of the disputed funds. “We paid out of our pocket $86,000,” Rita Parscale says. She calls the claims of misappropriation “a bunch of baloney.”

Back in San Antonio, Brad Parscale became a website developer, incorporating in October 2005 what became Parscale Media. He has repeatedly spun a memorable origin tale. He said he started the business with his last $500, seeking clients by approaching them in the tech aisle at a local Borders bookstore.

“Life is amazing,” he wrote in a May 2016 tweet. “My first day I had $500 to my name and tapped shoulders for work. No one knew me.” In 2017, he tweeted from a speech in Monaco about delivering “my story of starting with $500.” In its online biography promoting him for paid speeches (fee range $25,000 to $40,000), the speaker’s bureau representing Parscale repeats that “he invested his last $500 in Parscale Media.”

Parscale may have started his business in late 2005 with $500. But it’s unlikely it was his last $500. Courthouse records show that Parscale, who had begun investing in rental properties, owned three San Antonio homes at the time (each carried a mortgage).

There was no question about the business’s early struggles. In 2008, Parscale’s operation was sandwiched between a car wash and a tattoo parlor and smack in the flight path of the San Antonio airport. “Every time you had a meeting in there,” recalls Ryan Kelly, a San Antonio digital marketing consultant who worked closely with Parscale, “you’d feel like a plane was going to fly right through the office.”

From the start, Parscale displayed qualities that would serve him well with Trump. He was a great salesman. He was a quick study and intensely loyal to his customers. And he worked like a maniac.

In San Antonio, Parscale built a volume business. He did fast, inexpensive work for small enterprises like Dury’s Gun Shop, Quest Plumbing and D&D Farm and Ranch. He pitched clients by day, often making cold calls, and cranked out websites at night. On the side, he sold his own software add-ons to website developers.

At the start, Parscale knew little about digital marketing and even less about design. But he recognized his limitations. Says Natalie Silva, a San Antonio marketing consultant who worked with Parscale for two years starting in 2007: “He was the type of guy who would oversell capabilities and then figure it out — ‘well, I’ll go find someone.’ He would bring in the people he needed to do the things he couldn’t do.”

By 2009, Parscale Media, on its website, claimed a staff of seven and pitched Parscale as “a true pioneer of the industry” with “over 13 years of professional web experience.” (That would date back to 1996, his sophomore year in college.) It also trumpeted “prestigious” Top 10 web designer awards “as seen in” Forbes and Texas Monthly magazines. In fact, both citations were paid marketing promotions, published as advertisements in the two publications.

As his reputation grew, Parscale sometimes found himself paired on projects with a San Antonio graphic and web designer named Jill Giles, who’d run her own small firm since 1984. Giles handled the projects’ look and branding strategy; Parscale did the under-the-hood work.

The two could not have been more different. Giles was 20 years older, a tiny, soft-spoken woman with blond curls and refined taste; a committed Democrat, she socialized with urban liberals. Parscale was a red-headed giant with a booming voice who lived in the suburbs. He dressed, Giles later joked to friends, “like a German tourist,” wearing T-shirts, shorts and sandals with socks to work. (Giles declined to be quoted.)

But in an age when businesses built their reputations and brands online, marrying design and tech skills made sense. They formed Giles-Parscale Inc. in July 2011. They set up shop inside the walled compound Giles owned on the edge of downtown, building out separate, industrial-chic structures for the design and digital teams.

Afflicted with chronic back pain from his basketball injuries, Parscale presided over his domain from an unusually tall standing desk; on difficult days, he sometimes conducted business stretched out on the floor.

With Parscale leading the sales effort, Giles-Parscale won prestigious new contracts. Dickson, the San Antonio tech businessman, saw Parscale dazzle the executive committee of the San Antonio Economic Development Foundation, winning its website and digital work. “He’s like Don Draper. He’s a great pitchman,” says Dickson. “There are just so few who can walk in, pick up the vibe in the room and say the right thing.”

It was just nine months after the merger, in April 2012, that Parscale got his first opportunity to work for the Trump Organization. Asked to bid on designing a website for Trump International Realty, Parscale — eager to land the legendarily cheap celebrity client — won the job with an outrageously low bid of $10,000.

In his Miami speech, Parscale described the Trump Organization call as coming at a moment when he was still struggling. “At this point,” he said, “I have six employees. … I’m living in an $80,000 house, driving a Dodge Charger.” In fact, in 2012, Giles-Parscale had a staff of 30. Parscale lived in a $500,000 home with a swimming pool on a golf course and drove a Lexus.

Parscale simply “made up” his $10,000 price for the initial 2012 work, he later told The Washington Post, with the aim of hooking the Trumps as a client: “I recognized that I was a nobody in San Antonio, but working for the Trumps would be everything.”

Giles-Parscale soon became the go-to choice for other Trump work: the Trump Winery website, Melania Trump’s skin care products website; the Eric Trump Foundation website (Parscale did the latter work for free).

In November 2013, Eric Trump, in Texas for an event, stopped by Giles-Parscale with his future wife to meet the family’s webmaster. Parscale took them out for a steak dinner afterward, then promoted the visit on Twitter: “Hung out with \@EricTrump & his fiancé today. Truly was honored to have their time. One #supercool couple.”

Parscale insisted that Giles-Parscale made “a lot of money” from the Trump businesses. “Over the next five years,” reported the Post, “the Trump Organization sent hundreds of thousands of dollars worth of website-related work to Parscale.”

A knowledgeable Giles-Parscale colleague says that’s not true. “We always lost money on the Trump commercial stuff. Brad wanted it so bad he would bid it ridiculously cheap. He would say, ‘Oh no, this is going to lead to a lot of other work.’… We all knew that we should have been charging more money for it.”

What came next is widely known: In February 2015, the Trumps asked Parscale to craft a simple landing page for the presidential exploratory committee. Parscale did it for $1,500, completing the work on his laptop at home over a weekend. He got another call in June and agreed to build the Trump presidential campaign’s website for $10,000.

Jill Giles was mortified. A lifelong Democrat, she told friends she found Trump’s candidacy “repellant,” and she didn’t want her firm to have anything to do with it. But Parscale reassured his partner: “Nothing will come of this. This isn’t going to last long.”

Indeed, 10 days after Trump announced his candidacy for president, Parscale met two top local Republicans for lunch. But he wasn’t there to chat about the race for the White House. Parscale wanted their support as he considered running for a seat on the San Antonio City Council. Says one of the lunch participants, Robert Stovall, then the Bexar County Republican chairman: “He was very serious about it.”

The two men told Parscale they couldn’t back him. The seat’s conservative incumbent was likely to run one last time in 2017. They didn’t want Parscale to challenge him. Throughout the conversation, Stovall says, one thing was clear: “Brad didn’t think the announcement of Trump running for president was going to be a long-term thing. Everyone was just chuckling about it.”


After Trump’s upset victory in 2016, Parscale would receive acclaim for his central role in a campaign whose intensive, targeted use of social media was without precedent. But it was nondigital skills that proved essential to Parscale’s ascent: learning to navigate the cutthroat culture of Trump’s political world. “He’s a rare survivor of Trump 1.0,” notes Kurt Luidhardt, co-founder of Prosper Group, a political consulting firm that worked on the 2016 campaign. “That’s a big feat to pull off.”

Not that there weren’t some close calls for Parscale. The first came in late 2015, when an array of technical problems and lapses dogged the Trump website. Volunteer data wasn’t getting promptly downloaded. State campaign offices weren’t listed. And the website sometimes functioned poorly or crashed, hitting a low point in early December.

“Today was insane,” Parscale wrote his bosses on Dec. 7, 2015, a day on which traffic spiked as hackers tried to overwhelm the website with a so-called distributed denial of service attack. His email’s recipients included Trump campaign manager Corey Lewandowski, political director Michael Glassner and communications chief Hope Hicks. “About 4 p.m. CST time the traffic on the website increased by about 700,000x the normal traffic…The site has become very unresponsive because it is designed to do 200-300K people a day, not a million in a few minutes.”

“I can build to handle these numbers,” Parscale added, “but at this time I have not spent the cost to make it work this large...I am sorry for the problems today, these numbers were just insane high fast.”

Glassner conferred by email with Matt Braynard, the campaign’s data chief. The two men had been discussing the website problems for weeks. Glassner asked if the day’s traffic would have been a problem if another company ran the Trump website. His email’s subject line: “Transition away from Brad.”

“My suspicion was the answer was no,” Braynard replied, “but I’ve confirmed” that the crash wouldn’t have happened if another firm was running the site. He promised to quickly “compose a summary of reasons why I believe we should transition.”

But before he could do so, Glassner ended the discussion. “We’re going to stick with Brad,” he emailed the next day. Glassner later explained the reason simply: “Brad is considered family.” (Braynard departed the campaign himself a few months later and now runs a nonprofit seeking to register conservative voters.)

Parscale had cultivated a crucial relationship with Trump son-in-law Jared Kushner, who had taken a special interest in the campaign’s digital efforts. Kushner became his most essential ally, enlisting Parscale as his proxy. Parscale understood a fundamental rule of life of Trump’s world: The family’s favor meant everything. “He focused on the kids,” says estranged Trump adviser Omarosa Manigault Newman, who met Parscale during the campaign. “Once the kids like you, you’re in with Trump.”

Brad Parscale at a campaign rally on Oct. 22, 2018. (Saul Loeb/AFP/Getty Images)

Parscale regularly announced his interactions with various Trumps and assiduously flattered them. His Twitter profile today proclaims: “Proud to work for America’s best POTUS.” He has described Trump as “like a second father to me” and recently proclaimed the family “a dynasty that will last for decades.” In tweets, he has called the Trumps “the most amazing family” and pronounced Kushner “a great leader” and “a genius. Also the nicest guy ever.

In 2016, several factors conspired to elevate Parscale’s role. One was the Trump campaign’s raging distrust of the usual suspects from the GOP’s political “swamp,” including both Washington operatives and the Republican National Committee.

Trump also harbored contempt for conventional political practices. With his universal name recognition and domination of media headlines, Trump, who had pledged to bankroll his own primary campaign, had neither the need nor the desire to spend heavily on TV ads. That opened the door to a low-cost alternative in Parscale’s sweet spot: Facebook.

With Kushner’s backing and a small budget, Parscale began crafting Facebook ads directed at voters in key primary states. He’d also built a website page to sell “Make America Great Again” gear, which became a profit center for the campaign.

Through the end of 2015, the Trump campaign had paid Giles-Parscale just $39,000, mostly for “website development,” according to Federal Election Commission filings. By February 2016, his firm was receiving monthly six-figure sums for “digital consulting.” In June, he was named the campaign’s digital director.

Back in San Antonio, Parscale’s work for Trump had roiled his firm. At the start, Parscale had managed the website from home on his laptop. But as his duties grew, he began tapping Giles-Parscale staff for help, recruiting a few designers after first asking, “You got a problem with Trump?”

At the start, Parscale had portrayed the Trump work as just another contract, telling a San Antonio reporter: “We don’t have a say in his views. We are just a mechanism for his delivery.” Giles held to the view that he was, as ever, going overboard to please his client. “I think he would have been equally enthusiastic if he were doing it for Hillary,” she told friends.

By the spring primaries, it became impossible to pretend the work wasn’t affecting Giles-Parscale. Campaign operatives were appearing regularly in the office. “Nobody in their right mind thought it would go very far,” Giles explained to friends months later. “It was kind of scope creep. One day you wake up and say, ‘Holy shit, how did this happen?’”

Giles finally told Parscale he needed to take the Trump work elsewhere. In early June, after it was clear that Trump had locked up the GOP nomination, Parscale secured office space on the third floor of a building near the San Antonio airport. He announced plans to hire a general election digital team of as many as a hundred staffers. With that, Parscale largely abandoned Giles-Parscale.


As Parscale assumed his new role as the Republican nominee’s digital chief, he faced a big question: Now what do we do? He’d never helped run anything approaching the scale and complexity of a presidential campaign.

At that stage, most presidential nominees would already have dozens of experienced digital operatives on board. Clinton had more than a hundred. Trump had just one data staffer in New York and no data infrastructure. “He had to scale from two people to national in 30 seconds,” says Bill Skelly, a veteran RNC data consultant who worked with the 2016 campaign.

Parscale frantically began conferring with an array of consultants, seeking their advice. He was open about how much he didn’t know and bombarded everyone with questions.

With Trump now the certain nominee, his campaign and the Republican National Committee — warily viewed as a haven of “Never Trumpers” — had forged an uneasy alliance. The RNC dispatched about a dozen staff members to San Antonio: experts in political strategy, email fundraising, data and digital marketing.

Conflict soon erupted over power and money. In June 2016, the most immediate flashpoint was the joint fundraising agreement Trump had signed with the RNC, as was customary for the party’s presidential nominee. It provided for fundraising emails to go out in the name of the candidate, seeking donations of $200 or less.

All the funds were to flow into a joint committee, to be split 80-20 between the campaign and the party, and the two sides were to share the valuable donor data the emails generated. Trump clearly needed the help. He hadn’t done any email fundraising during the primaries, and, as of June 1, he had just $1.3 million in his campaign coffers, compared with Clinton’s $42 million.

Yet Trump was refusing to cooperate with the RNC, which wanted both its promised money and the donor lists. Trump’s campaign, relying on private firms, finally dispatched his first fundraising letter on June 21, but it was a disaster. Although the campaign reported raising about $3 million in one day, more than half of the emails were caught in spam filters. Trump-haters had also slipped in prank addresses, generating embarrassing publicity about the campaign seeking illegal donations from members of the Australian, British and Icelandic parliaments.

The letter also directed all resulting donations to the Trump campaign rather than to the joint committee. RNC officials were furious. They wanted their promised cut — and control over the entire fundraising apparatus. “There was a lot of real angst happening at that moment about Brad,” recalls one GOP operative on the scene.

The RNC decided to play hardball. Ahead of the July 4 holiday weekend, it ordered all the RNC staffers working in San Antonio for Trump — more than a dozen — to leave. A former senior RNC official recalls the committee’s digital director, Gerrit Lansing, explaining what happened this way: “I pulled everyone out. They don’t know what the fuck they’re doing down there.” Lansing told the RNC official he had even suggested to RNC chief of staff Katie Walsh that he would quit if Parscale wasn’t fired.

Lansing declined to comment on the record about this episode. Walsh says “there was a negotiation. … I don’t accept the premise that there was any sort of conflict.”

Parscale arrived at his new offices on Friday, July 1, to find the place virtually empty. The lone RNC staffer who remained in town was Gary Coby, director of digital advertising, who had quickly gained Parscale’s trust.

Coby later stood by as Parscale phoned Kushner, effectively pleading for his job. “He just kind of humbled himself to Jared,” Coby recalls. “He said: ‘Obviously it’s your guys’ call. But I’ll do anything for the candidate and the family. … I love this family. … Whatever you guys decide, you can count on me for anything you need or want.’” Adds Coby, “He was making his case as if his role was in jeopardy.”

Parscale managed to keep his job — and to broker peace between the campaign and the RNC. Unlike much of Trump’s inner circle, which viewed the GOP as the enemy, Parscale recognized that the party possessed critical political infrastructure that was impossible for Trump’s makeshift team to replicate. As Parscale puts it: “When I showed up at the RNC for my first meeting, I expected them to be my enemy. I was told that by many in Trump world. But I learned very quickly that for everyone to be successful, we need to be working hand in hand.”

By the middle of the following week, Parscale and his bosses had signed on to a deal with the RNC. The Trump campaign would get all the proceeds from text message appeals and ads on social media sites like Facebook, YouTube, Google and Twitter. All donations from email fundraising — a bigger pot — would be split, though the RNC would cover all the costs. The RNC would run the joint email program and get access to Trump’s growing donor file.

Notes one campaign adviser: “I’ve always thought that was the moment when Brad realized if I play nice with these people, they’re going to play nice with me. And he’s maintained that ever since. I am convinced to this day Brad is who he is because he made peace with the RNC. At every point since then, the benefit of that arrangement has been reinforced. He’s navigated all the levers of power very effectively. Honestly, I think that’s what he’s best at.”

Any collaboration with the Trumps, of course, required support from the family, and Parscale worked to ensure that too. After the RNC fundraising showdown, he urged Kushner to sign off on joining forces with the RNC on the digital front. Parscale also met Eric Trump in Washington for a tour of the Trump International Hotel construction site, dirtying his suit before attending a high-level briefing at RNC headquarters on the party’s plans for the campaign’s ground game. Parscale then backed that plan during a three-hour Acela train trip with Eric to Manhattan and convinced him to support the plan, too. “That’s the day we all got married,” Parscale says of the campaign and the RNC.


After the 2016 election, much was written about the Trump campaign’s use of new Facebook tools to “microtarget” voters, sophisticated data analytics and rapid-fire testing of thousands of campaign ad permutations. Parscale was hailed as an innovative “genius,” an impression he encouraged. “I understood early that Facebook was how Donald Trump was going to win,” he told Lesley Stahl, of “60 Minutes,” in 2017. “Twitter is how he talked to the people. Facebook was going to be how he won.”

Parscale also claimed that after being given broad new responsibilities late in the race, he’d spotted critical voter shifts and “changed all the budgets around” in the campaign’s final days. He says he diverted “every nickel and dime” from hopeless Virginia and sure-win Ohio into advertising in Michigan and Wisconsin, where Trump notched narrow upsets.

Parscale, left, holds up his phone as President Donald Trump takes the stage at a rally in Green Bay, Wisconsin, in April 2019. (Andrew Harnick/AP Photo)

“If you don’t know what you’re talking about, you think he’s a 21st-century Steve Jobs,” says a Republican consultant who knows Parscale. “He’s not an asshole. He’s kind of a huckster. But he’s smart enough to realize he’s a huckster.”

Parscale’s true gift wasn’t deploying new, cutting-edge uses for technology. It was skillful management: cobbling together and empowering a fast-moving, opportunistic digital team staffed by experts from the RNC, commercial ad placement firms and social media companies, which flew about a dozen employees into San Antonio to work alongside Parscale’s team. At Parscale’s direction, the digital operation carried out an unprecedented tilt toward social media, for which the Trump campaign spent nearly half its media budget.

Parscale’s all-in approach toward Facebook was perfectly suited to his unique candidate. “The key to digital success is bottling lightning, and with Donald Trump, the lightning strikes every five minutes,” says Wesley Donehue, CEO of Push Digital, who worked on Marco Rubio’s failed bid for the 2016 presidential nomination. “You will never be able to replicate any digital strategy you had for Donald Trump for any other candidate or any corporation because there is no other Donald Trump.”

Academics and political strategists say digital ads don’t do much to persuade voters to switch candidates. They’re aimed primarily at raising money, firing up the base and suppressing turnout among opposition voters — which perfectly matched Trump’s needs.

In large part, Parscale’s approach was a matter of necessity. In 2016, Trump was anathema to the GOP’s traditional wealthy donors. But small-dollar contributors — “the Army of Trump,” Parscale would later call them — loved him. Trump’s supporters were uniquely responsive to donation appeals on social media; his celebrity and gut-level appeal commanded eyeballs. “The hardest thing in digital advertising is getting people’s attention,” says Coby. “You got a cheat code with Trump.”

Trump’s online and email fundraising generated a record $239 million in small-dollar donations, far more than Hillary Clinton’s and more than two-thirds of his donation total, according to the nonpartisan Campaign Finance Institute. This made Trump competitive in a race where he was outspent nearly 2 to 1.

Parscale’s growing role remained pretty much a secret for weeks into the general election race. But in mid-August, a new FEC filing was about to reveal that Giles-Parscale, an obscure San Antonio firm, had become the campaign’s biggest vendor, receiving $12.5 million to date. That prompted Wired to run a quick, flattering profile of him. Trump, according to a former RNC official, soon began referring to Parscale as “my $10 Million Man.”

By the October FEC filing, that figure had multiplied. Giles-Parscale had received more than $20 million in the previous month, on its way to a jaw-dropping final $94 million tally from the Trump committees. After Trump read media reports spotlighting Parscale’s most recent take, he erupted. Making a rare descent to the campaign’s makeshift offices in Trump Tower, he cornered his digital director in the kitchen and flew into a spitting rage, screaming, “Where the fuck is my money?”

Parscale told Trump that the vast majority was simply passed through his firm and went toward buying ads. After salaries and various consulting fees, he insisted, he’d received only a small percentage — far below what’s typical — as profit. Deputy campaign manager Dave Bossie, who had jumped between the two men, backed Parscale’s story. According to two witnesses, the confrontation ended when Kellyanne Conway sneezed on Trump, distracting him from his fury.


Inside the walls of Giles-Parscale, Hillary Clinton’s concession speech, on the morning after Election Day, was met with tears. For months, many at the firm had clung to a hope: Trump would surely lose; Parscale would come back. Everything would go back to the way it was.

Early in 2016, Parscale appeared to be putting down roots in San Antonio. In January, he and his second wife had spent $801,456 on a new 6,145-square-foot home in a gated country-club community near his parents. But after Trump’s victory, he wasn’t about to go back to selling websites. His partner, Giles, was just as eager to part ways.

The two partners agreed: Parscale, the hot commodity, would take the lead in seeking a buyer who could run the digital business. In the meantime, he was busy taking victory laps, attending election post-mortems at Harvard and in Silicon Valley, giving a speech in Monaco and sitting for interviews. He’d assigned a copywriter who had worked on the Trump campaign to write a Wikipedia profile for him.

On Aug. 1, 2017, the sale of Giles-Parscale was announced, to a company called CloudCommerce Inc. The commercial marketing business would become Parscale Digital. The design side would be renamed Giles Design Bureau. The political work — along with Parscale himself — would move to Florida as an independent company called Parscale Strategy.

A press release described the deal as a $9 million all-stock purchase of Parscale’s business. Parscale was also to receive $1 million in cash for his web hosting company, become the face of the parent company and receive a seat on the board. Giles got stock options, along with rent for use of her building and about $700,000 cash.

In reality, in selling to CloudCommerce, an obscure California penny-stock company, Parscale had jumped into a mess of his own making. For starters, his stock would be worth $9 million only if the shares rose exponentially. And the company, as Trump might say, was a doozy.

CloudCommerce had lost money for seven straight years, according to Securities and Exchange Commission filings, prompting its accountants to voice “substantial doubt” about its ability to remain “a going concern.” In the days before the acquisition was announced, its stock was trading at less than a penny.

The company had a distinctly dodgy past. A former CEO and a second executive had pleaded guilty to federal fraud charges in a scheme to pump up the price of the company’s shares. Its current CEO had once filed for personal bankruptcy. CloudCommerce, whose leadership had vowed to rapidly grow the enterprise enough to uplist it onto a major exchange, had changed names and business strategies three times, while seeking to entice acquisition targets, as one email put it, with the prospect of “riding the tidal wave” of company shares “to early retirement.” (CloudCommerce did not respond to requests for comment.)

After the sale, Parscale began deploying his digital-marketing tactics on a new product: himself.

On Aug. 8, he tweeted about a 500% spike in CloudCommerce’s share price, from less than a penny to 5 cents, that had greeted the announcement.

Much like Trump, CloudCommerce and its new marquee player worked to lure business by creating a premium brand that would convey the value of his personal magic. They called it “the Parscale Effect.” Digital ads for Parscale Strategy’s website, which featured juddering images of Parscale and admiring media headlines (“Donald Trump’s Michael Bay”), declared: “Brad Parscale shaped the 2016 presidential election with a data driven digital strategy to influence action. Find out how the Parscale Effect can transform your business.”

Parscale approached political contacts, asking if they’d want to sell their firms in exchange for CloudCommerce stock, according to two people with direct knowledge. At least two turned him down. One recalls Parscale’s pitch: “He told me he was going to list CloudCommerce on Nasdaq, and we were all going to be really rich.”

Parscale’s political success intrigued some high-profile clients. In mid-2017, Mark Cuban, owner of the Dallas Mavericks, hired Parscale for a “sales analytics” project, to see if he could help sell basketball tickets. “I figure, we’ll see if what he does can make a difference. … I’m a big believer that when it comes to data, you don’t take sides. You look to see results,” says Cuban, a reality TV star who has toyed with running for president. In the end, Parscale’s impact was “in line with what we did with other advanced metrics companies,” says Cuban. “It helped, but wasn’t anything dramatic.”

Parscale was hired to boost ticket sales for “Only the Brave,” a Hollywood movie about an elite California firefighting team. He retained a Trump surrogate, Marcus Luttrell, a former Navy SEAL and war hero who was depicted in the movie “Lone Survivor,” to endorse the film, according to Variety, and Parscale promoted the movie on Twitter without disclosing he’d been paid to do so: “A film about real American heroes. Risked it all to save others. Can’t wait to honor these men by watching the movie! #onlythebrave #maga”

Ultimately, CloudCommerce was unable to successfully exploit Parscale’s commercial business, which largely went on hiatus as Parscale turned back to politics. CloudCommerce continues to lose money and bleed cash. The company’s SEC filings now list Parscale’s role as Trump’s campaign manager as a “risk factor,” citing the president’s unpopularity with some employees and customers.

“Brad thought if he got on board and applied some of his techniques, a penny stock becomes a dollar stock and $1 million becomes $100 million,” says Jeremy Sloan, a San Antonio lawyer who represented Parscale in the CloudCommerce deal and has known him for a decade. “I remember telling him: ‘Dude, you’re taking a risk here — selling your whole company, all these assets you’re selling for stock. If you go from one penny to $3, that’s great. But if you go from one to zero, that $9 million headline turns into $90,000.’”

As of Sept. 9, CloudCommerce shares were trading for less than a cent.


Parscale’s efforts to monetize his role in Trump’s victory met with more success in the political world.

Trump pioneered the nonstop presidential campaign, filing for reelection on the day of his inauguration, and Parscale positioned himself to capitalize on it. He incorporated Parscale Strategy, his political-consulting business, just 10 days later. Although Parscale lacked a formal campaign title until being named campaign manager in February 2018, he never stopped working for Trump — or getting paid for it.

During the 14 months before Parscale’s selection, his firms received more than $13 million. The money came from three different Trump campaign committees, the RNC, the presidential inaugural committee, a pro-Trump super PAC and a “dark money” organization. Parscale unsuccessfully sought work from at least two other GOP campaign committees.

Parscale simultaneously served as a co-founder of and senior adviser to America First Policies, a pro-Trump “dark money” group, and its sibling, the super PAC America First Action, which quickly became a paid refuge for Trump campaign veterans. The two groups are allowed to raise unlimited sums but are legally barred from coordinating with the campaign. Activist group Common Cause claims, in complaints to the FEC and the Justice Department, that the two groups have illegally coordinated with the Trump campaign. The complaints are still pending. (A spokesperson for America First declined to comment.)

Up through his appointment as Trump’s campaign manager on Feb. 27, 2018, the two America First groups paid Parscale’s firm more than $3.5 million for “media advocacy,” website services and work in congressional special-election campaigns. Days after his appointment, America First ceased paying Parscale Strategy, presumably to avoid running afoul of laws barring the super PAC from coordinating with Trump’s campaign.

Instead, America First Action soon began making payments for similar services to a new entity, incorporated in Delaware on March 2, called Red State Data & Digital. Parscale told ProPublica and Texas Monthly that he formed Red State to allow his employees to continue working for America First while he distanced himself from the group. Parscale didn’t mention that one of the employees was his wife, a fact subsequently revealed by CNN. Red State Data & Digital has received $923,201 from America First Action.

Red State represents Parscale’s attempt to channel those funds to a legally separate entity. “The lawyers suggested it for firewall purposes so it would have its own billing,” says Parscale. “It was legally recommended to me. I don’t even see the bills. I have employees that work for them, and they are firewalled from me.”

Such maneuvers are part of “a really troubling trend” — a “fig leaf” — to form campaign vendors that are “legally distinct but practically inseparable” from a campaign, says Adav Noti, former associate general counsel for the FEC, who is now senior director for the nonprofit Campaign Legal Center. “One serves the super PAC, one serves the campaign, but they’re run by the same people. You can firewall off staff people, but you can’t firewall your own brain. I would be very skeptical about that. Candidates and their advisers are not supposed to be coming in any contact with soft money.”


In 2016, Parscale, out of necessity, ceded much of the Trump campaign’s digital operations to the RNC. For the 2020 election, the tables are turned: Trump’s reelection campaign has effectively taken over the party organization.

The tone was set early at the top, with the installation of Ronna McDaniel, a fierce Trump loyalist, as RNC chair. But with Parscale’s help, Trump’s control over the committee has gone deeper. The group’s willingness to do Trump’s bidding has extended to its handling of voter data, for which Parscale has helped empower two former RNC chiefs of staff (who happen to be married to each other), Katie Walsh and Mike Shields. They’re the winners in an intraparty struggle that has shifted power, money and staff from the RNC to the party’s private repository of voter information, called the Data Trust. Parscale was named to the Data Trust board in May 2017.

The changes have degraded the GOP’s data operation, which is critical for winning elections, according to critics, including Bill Skelly, a longtime Republican data consultant no longer doing RNC work, and Jesse Kamzol, an RNC data director who was ousted in mid-2017. They believe out-of-date and incomplete information in the party-supplied voter files, used for voter contact and turnout efforts, contributed to the GOP’s poor performance in the 2018 midterms.

One example: sophisticated RNC voter score projections for Rep. John Culberson, a nine-term incumbent defending a suburban Houston seat held by Republicans for a half-century, showed Culberson winning his race handily, with a 56% to 35% margin among likely voters 11 weeks before Election Day, documents reviewed by ProPublica show. Other polls during this period consistently showed Culberson and Democrat Lizzie Fletcher in a far closer race. Culberson ultimately lost 52.5% to 47.5%.

Former RNC data experts blame such problems on poor data “hygiene,” the tedious work of keeping the files accurate and current. Says one: “They’re getting wrong addresses, wrong phone numbers, wrong emails. ... They’re not updating it. They’re building voter files and political data sets. It’s not a technical thing; it’s kind of an art. Imagine you suddenly went from having a bunch of Picassos and Monets. Then you go to someone who can finger-paint.”

Shields, who served as a senior adviser to the Data Trust until July 31, says all changes occurred “with the full knowledge of the Trump campaign and Brad.” He adamantly denies any systemic problems. He and RNC officials defend the quality of the data and blame the criticism on a “small pocket” of political operatives who have lost business in the Trump era. Skelly denies any such motivation, saying, “It is right to continue to innovate and look for change, but not for its own sake.”

More conspicuously, since Trump’s election, the RNC — at his campaign’s direction — has excluded critical “voter scores” on the president from the analytics it routinely provides to GOP candidates and committees nationwide, with the aim of electing down-ballot Republicans.

Republican consultants say the Trump information is being withheld for two reasons: to discourage candidates from distancing themselves from the president, and to avoid embarrassing him with poor results that might leak. But they say its concealment harms other Republicans, forcing them to campaign without it or pay to get the information elsewhere.

Indeed, RNC “voter score” documents from 2018 include a wealth of voter information for a given district, including attitudes toward the major parties, state elected officials, local candidates, critical issues and even Democratic House Speaker Nancy Pelosi. There is no data on Trump. To the contrary, according to one GOP expert, 2016 Trump information previously made available was conspicuously withheld starting in mid-2017.

“There has been a major decision to lock down the Trump voter scores,” says a former national GOP data official, who was repeatedly blocked from obtaining the information. He calls this “Trump-first mentality” at the RNC “outside the norm” and a “major hindrance” to the success of down-ballot candidates.

According to RNC documents, the scores are used to guide an array of campaign efforts, including field programs, fundraising, digital advertising and communications. Says a former RNC data officer: “It’s definitely hurting the party not to release that information. I wish we could have handed it over.”

Current and former party officials from two major battleground states confirm that the RNC refused their repeated requests for Trump data. “What voters in our state think about Donald Trump matters,” says the executive director for one state. “There are people who loved our governor but were turned off by the president. We deliver different messages to people who need to be convinced to come out to our side. How are we supposed to run campaigns if we’re flying blind on thinking about the president?”

When asked about this, Walsh, who serves as a senior adviser to the RNC, embraces the proposition that the committee now — properly — does the president’s bidding. Because Trump effectively paid for the voter data by raising money for the RNC, according to this view, his campaign was fully entitled to withhold it even from other Republicans. “I don’t think most campaigns give their data out to other campaigns for free,” Walsh says. “So I don’t see why the president would be expected to. That’s all data work done by the RNC, and the head of the party is the president. So it’s his data.”

Says one veteran GOP consultant: “They should just put ‘TRUMP’ signs in front of the Republican National Committee building now, just like every other building he’s got.”


The 2020 Trump campaign could not be more different from 2016. Parscale has been methodically assembling a political war machine, largely along traditional lines. He has created a large-dollar fundraising network; begun training sessions for field recruits; and established outreach groups for African Americans, women and Hispanics. (In 2016, the campaign didn’t even translate its website into Spanish.) Parscale has also spent tens of millions building contact files of Trump donors and supporters, harvested from responses to Facebook ads and rally sign-ups.

Parscale’s life feels a lot bigger-scale these days, too. He now lives in a $2.4-million home on the Intracoastal Waterway in Fort Lauderdale, Florida. He now drives a Ferrari and a BMW X6. Since his star turn on “60 Minutes,” Parscale has become a recognizable conservative political celebrity. He has 361,000 Twitter followers, up from 3,793 just three years ago.

Parscale has assumed the role of Trump’s troll-in-chief, backing his boss’s boasts and false claims; generating ads playing to voters’ fears; twisting the knife on the president’s opponents; and caricaturing Democrats’ policies. Recently, the Trump campaign circulated an ad on Facebook claiming that every Democratic presidential candidate would eliminate private health insurance. As a website called Popular Information first pointed out, the ad included a photo of five candidates raising their hands affirmatively at their June 27 debate, but it omitted the fact that they were responding to a different question. When I asked him about the ad, Parscale ignored the false photo and displayed some Trumpian defiance. “Make no mistake,” he says. “All Democrats from Bernie to Biden will eliminate private insurance either outright or as a consequence of the public option crowding out private insurance.”

Parscale seems to revel in the combat — at least part of the time. “I barely leave the house,” he says. “We don’t even go to dinner any more. We eat in. It’s not worth it anymore.” The world is now divided among fans who want to pose with him for a selfie and antagonists who’d rather throw things at him. In that way, as in so many others, he has come to resemble his boss.

[*] [-] [-] [x] [A+] [a-]  
[l] at 9/10/19 2:53pm

by Rachel Otwell and Mary Hansen , NPR Illinois, and Alex Mierjeski, ProPublica

Two former students at the University of Illinois at Urbana-Champaign and a professor at another college filed a lawsuit Tuesday against a former UIUC professor, claiming he assaulted, bullied and raped multiple students.

The lawsuit, filed in federal court in Urbana against Gary Gang Xu, seeks damages for distress from emotional, physical and sexual abuse.

The lawsuit claims Xu specifically targeted female Chinese students, who often depended on the university for their visa status.

Xu did not immediately respond to requests from NPR Illinois for his reaction to allegations in the lawsuit. He had denied sexual assault claims in reporting by the UIUC student newspaper in spring of 2018.

Xu was a subject of recent reporting by NPR Illinois and ProPublica detailing gaps in how the University of Illinois’ flagship campus has dealt with professors found to have violated its policies after being accused of sexual misconduct.

Xu, who was a tenured professor in the Department of East Asian Languages and Cultures, resigned last year, two years after a university investigation found that he violated a no-contact directive involving a student and had an inappropriate relationship with that student.

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After the finding of misconduct, he was on paid leave, during which he took outside teaching appointments, including in Stockholm. As part of his resignation agreement, he received a $10,000 separation payment. The resignation agreement also included a confidentiality clause stating Xu “shall not disclose the existence or terms” of the agreement to “anyone else” including “members of the mass media.”

The lawsuit claims the university did not adequately respond to what it knew about Xu’s conduct. It asserts that UIUC was well aware of allegations against Xu years before it took action. Ann Olivarius, an attorney for the plaintiffs, said the university “cast a blind eye” on Xu’s conduct.

“I’ve spoken to a number of faculty, and they certainly were well aware of the misconduct of Gary Xu over a long period,” Olivarius said. “Many of the faculty said to me that they were very upset that nothing had been done.”

A spokesperson for the university said in a statement: “We are aware of the filing and are reviewing it. We cannot comment on any of its contents at this time.”

The statement also read in part: “The University investigates and takes appropriate action whenever conduct is reported that may jeopardize or impact the safety or security of our students or others. The current administration is reviewing and revising disciplinary processes to allow us to take quicker and more forceful action when employment misconduct is proven.”

The lawsuit focuses on Xu’s relationship with an undergraduate student, Xingjian Sun, who is a named plaintiff. She was a 19-year-old freshman when they met in the spring of 2013. Xu was then 45 and the head of the Department of East Asian Languages and Cultures. He agreed to be Sun’s instructor for an independent study course, and the complaint said their relationship became intimate later that year, first involving kissing in his office.

The complaint details a two-year, tumultuous relationship, in which Xu allegedly berated Sun and isolated her from her friends, instructing her to keep their relationship a secret. He raped her, beat her and threatened her family, according to the lawsuit.

The complaint contends that Xu forced Sun to have an abortion when she became pregnant with his child. Because of this and what she considered ongoing abuse, according to the complaint, Sun became depressed and twice attempted suicide. According to the complaint, Xu beat her on the way to the hospital while she was unconscious from drugs from one suicide attempt. The suit also alleges a brutal beating during a trip to China that required a hospital stay.

Xu intimidated Sun into withdrawing three complaints against him she made to the university: “As is typical of a victim of domestic violence, she dropped these reports shortly after making them to protect her safety — Xu beat her and threatened to hurt and her family if she did not,” the complaint reads.

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Their relationship came to an end in 2015, according to the complaint, after Sun filed a petition for a protective order in August in the 6th Judicial Circuit Court of Illinois. This followed what she claimed was another violent episode. Police were called but did not make an arrest. In October 2015, she dropped her petition for a protective order against Xu, according to the lawsuit.

The second plaintiff is another former student who said Xu took advantage of her work planning an art exhibit in China. The student claims she did other work that went unpaid and uncredited, and that Xu was also disparaging and “overtly sexualiz[ed] her,” attempting to kiss her. The other student, Xing Zhao, said she was used for unpaid labor and that “Xu further used the threat of physical force and actual physical confinement to require her to do his bidding.”

The complaint alleges that Zhao’s experience was not unique and quotes other students, including Grace Chang, a “U.S.-born Chinese woman,” who took classes in the Department of East Asian Languages and Cultures. The complaint claims she witnessed “professors’ exploitation of students labor” at UIUC.

“The international students at UIUC, particularly the women, are incredibly vulnerable,” Chang said, according to the lawsuit. “This is particularly acute for the students who rely on financial aid.”

The third plaintiff is Ao Wang, a professor at Wesleyan University in Connecticut, who “knew of Xu by his poor reputation through academic cirlces,” according to the complaint, and who was friends with a woman Xu had allegedly attempted to rape. Wang had publicized some of these claims on social media and was then sued by Xu in a court in China, a case that is ongoing, according to the complaint. Wang says Xu harassed him and people he knew and made threats, including that he would “kill Wang.”

All three plaintiffs are seeking damages. Sun said that she incurred thousands of dollars in medical bills and that her reputation has been irreparably harmed. She needs ongoing mental health care as she suffers from post-traumatic stress disorder, according to the lawsuit.

Claims against Xu were first made public through Chinese media in March 2018 and were then reported by The Daily Illini, UIUC’s student newspaper. The university declined to provide records about its investigation of Xu to The Daily Illini and Illinois Public Media under the Freedom of Information Act.

The university recently provided its heavily redacted investigative report and Xu’s response to NPR Illinois. It concluded that Xu had an intimate relationship with Sun and that he violated the student code. In Xu’s response, he called the report “full of factual mistakes, logical inconsistencies and fallacies.”

The lawsuit outlined several ways in which the plaintiffs say the university did not take the complaints against Xu seriously enough.

The complaint claims that Sun shared photos of her injuries on the university’s official page on Weibo, a Chinese social media site, after she says Xu beat her while in China. The university also knew that Xu had violated a no-contact directive, but he faced no immediate consequences, the lawsuit says.

“Xu abused this power; the University let him,” the suit reads.

Unlike many other universities, UIUC allows faculty-student relationships, though it stipulates that an individual can’t participate in educational or institutional decisions for a person with whom he or she has had a sexual relationship.

A university task force is reexamining the policy after public scrutiny last fall over the university’s handling of misconduct claims against professors.

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[l] at 9/10/19 10:50am

by Marshall Allen and Doris Burke

Like most of us, William Murphy dreads calling health insurance companies. They route him onto a rollercoaster of irrelevant voice menus, and when he finally reaches a human, it’s a customer service rep who has no idea what he’s talking about. Then it can take days to hear back, if anyone responds at all.

The thing is, Murphy isn’t a disgruntled patient. He prosecutes medical fraud cases for the Alameda County District Attorney’s Office in Oakland, California. And when he calls insurers, he’s in pursuit of criminals stealing from them and their clients. But, he said, they typically respond with something akin to a shrug. “There’s no sense of urgency, even though this is their company that’s getting ripped off.”

It’s not just Murphy. I called health care fraud prosecutors across California to ask what insurers were doing to help bring cases against those plundering health care dollars. More than one simply burst out laughing. “Not much,” one prosecutor said.

It seems counterintuitive. Escalating health care costs are one of the greatest financial concerns in the United States. And an estimated 10% of those costs are likely eaten up by fraud, experts say. Yet private health insurers, who preside over some $1.2 trillion in spending each year, exhibit a puzzling lack of ambition when it comes to bringing fraudsters to justice.

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Like much of what happens behind the scenes in the health insurance industry, the insurers’ tepid response to fraud typically goes unexamined. But this year, I dove into the crazy tale of a Texas personal trainer who didn’t have a medical license but was easily able to claim he was a doctor and bill some of the nation’s most prominent health insurers for four years — walking away with $4 million. David Williams, who was also a convicted felon, discovered stunning weaknesses in the system: that when he applied for a National Provider Identifier, the number required to bill health insurance plans, no one would verify whether he was a doctor; and that when he billed insurers as an out-of-network “doctor,” they wouldn’t check either and would keep paying him even long after they learned of his fraud. He was later convicted of health care fraud and is now in federal prison.

Williams’ scam raised the eyebrows of even my most jaded health care sources. It prompted a half-dozen Democratic senators to write to the federal agency that administers the NPIs and ask what it was doing to plug the “loopholes.”

But it also got me thinking: As journalists, we are peppered with press releases touting the fraud enforcement successes in Medicare and Medicaid, the government health plans. The federal Department of Justice and state Medicaid Fraud Control Units file thousands of criminal and civil cases a year (and still are accused of not being as aggressive as they could be). Clearly, their goal is to let folks know they will be prosecuted.

But we rarely hear about the fraud enforcement efforts of private health insurers. These companies manage the plans of about 150 million Americans who get their health benefits through their employers. They’re sitting on a massive trove of claims data that can help identify scammers, and problems are routinely flagged by their members. And experts, including investigators who once worked for the insurers, tell me there’s rampant fraud against the private plans.

The bottom line is significant: If a con artist, or a corrupt medical professional, makes off with health care dollars, those losses are not necessarily the insurers’. They will be passed on to people covered by the plans in the form of higher monthly premiums and out-of-pocket costs as well as reduced benefits.

So, what’s up?

I wasn’t going to find out from the insurers. Aetna, Cigna, UnitedHealthcare and others ignored or refused my many requests to interview their fraud investigators or responded with assurances about their fraud-fighting efforts, with few specifics.

A United spokesperson said I couldn’t speak to a fraud investigator because “we do not want to make information public that would make it easier for those intent on engaging in fraud to commit these crimes.” She said the insurer uses analytics to flag potentially fraudulent billing and, in some cases, physically verifies that medical offices exist.

With that scant response, I plunged into the daunting thicket of agencies that are supposed to oversee the fight against health care fraud, each divided by region and responsibility. I contacted insurance regulators in every state and interviewed more than 50 other experts, including prosecutors, claims analysts and a dozen former investigators for the internal fraud units of private insurers.

What I found has troubling implications, especially for employers and workers who get their health plans through the big insurers. Far from being fierce guardians of your health care dollars, experts told me, the big-name insurers — who sell their own plans or are paid to manage employers’ — pick and choose their battles. And, for a variety of reasons, fraud is not a top priority.


California is known for sunshine, surf and health care scams. It’s so rife with suspicious bills and kickbacks that the feds based a Medicare Fraud Strike Force in its ground zero for schemes, Los Angeles. The state’s Medicaid Fraud Control Unit in the attorney general’s office is among the busiest in the nation.

With almost 40 million residents, California is also one of the largest markets for commercial health insurance in the country. Commercial health insurers covered about 14.4 million Californians in 2018. If there’s anywhere private health insurers should be beating back fraud, flagging suspicious cases and referring fraudsters to the authorities, it’s the Golden State.

Like any rip-off, there are two ways to publicly hold perpetrators accountable and deter others: Prosecute them or sue to recoup the money. I called the district attorneys’ offices in California’s 14 largest counties, which cover about 80% of the state’s population, or 32 million people. How often, I asked, did a fraud case referred by a commercial health insurer lead to criminal charges in 2017 and 2018?

All told, prosecutors in those counties filed charges in just 22 such cases in the two years.

To put that record in context, take a look at the state’s Medicaid program, which covers about 13 million low-income people. During fiscal 2017 and 2018, the program’s fraud unit filed criminal charges against 321 fraudulent medical providers. It garnered 65 civil settlements and judgments and recovered more than $93 million, according to the state attorney general’s office.

A rigorous search for civil lawsuits filed by private health insurers over fraud in California turned up just one case in 2017 and 2018. Experts said insurers rarely sue over fraud because of the high cost of litigation.

I asked the commercial insurers in California for the case numbers of any civil lawsuits they’d filed in those years. Most didn’t respond. United said it had filed “more than a dozen civil arbitrations and lawsuits across the country” over “the past couple of years.” It included a list of four lawsuits in which the company won, or is seeking, tens of millions of dollars from medical providers. That’s not reassuring. United is a behemoth with more than $226 billion in revenue in 2018. Yet it only rarely pursued reimbursement in court.

I called up a former federal fraud prosecutor who’d worked with both Medicare and private insurers. He said my calls to the prosecutors exposed alarming differences in the way fraud is enforced in the private and government health plans. The Medicaid fraud units are “staffed and actively engaged,” said Michael Elliott, who ran about 100 fraud investigations when he worked for the Department of Justice in Texas from 2008 to 2015.

Private insurers, he said, simply don’t make fraud enforcement a big enough part of their mission. “At the end of the day, it shows their priorities are elsewhere,” he said.

Jennifer Lentz Snyder, who heads health care fraud prosecutions for the Los Angeles County District Attorney’s Office, said insurers should be grateful she’s pursuing fraudsters. But she said that when she asks for even basic information, like the number of times patients were treated at a location, they make it difficult.

“They want us, a criminal agency, to submit questions to their civil lawyers, to examine if there’s a ‘problem’ with the questions,” Snyder said. “It suggests we are not on the same page in terms of enforcement and protecting the integrity of the system.”


I wondered if perhaps private insurers worked better with regulators, whom they are bound by law to obey.

Michael Marben quickly quashed that notion. Marben, director of the Commerce Fraud Bureau in Minnesota, suspects health insurers in his state are breaking the law. They are required to send his office any case where they have a “reasonable belief” there’s been fraud. That allows his office to spot trends, assist with investigations and warn other insurers.

In 2017, insurers in the state referred just two cases of suspected fraud. In 2018, they referred five.

That’s not because everyone there is “Minnesota nice.” During the same time period, the state’s Medicaid fraud unit conducted 596 investigations and netted 134 indictments.

And it wasn’t an issue of the profit-driven sector not wanting to cooperate with regulators. In the auto insurance market, for example, the state’s Fraud Bureau had more than 2,200 referrals, most of them from insurers.

There’s “conscious underreporting” by health insurers, Marben said. “You can’t have a company that doesn’t experience fraud.”

The public doesn’t realize that the unregulated fraud has a cost, he said. “This has a direct impact on consumers.”

Fraud involving the programs of private insurers has long been flagged as a problem. About three dozen states have similar reporting requirements, based on model legislation developed in the 1990s by the Coalition Against Insurance Fraud. The laws require all insurers to notify state regulators about potential scams. But no one seems to believe the health insurers actually do. “Everyone I visit says the same thing. In some states they receive basically no referrals from health insurers,” said Dennis Jay, executive director of the coalition, a nonprofit group of private insurers, government agencies and consumer groups that fights fraud.

Incompetence may also be part of the problem. The California Department of Insurance found in recent audits that the investigators for two major health insurers needed more training because they “missed opportunities” for identifying what the auditors thought could be fraud, an official told me.

But as I began calling around, the dearth of cases was truly remarkable. What was happening to people who were defrauding the insurers? What was happening to the doctors billing for services they didn’t provide? And who was watching the money?

Georgia regulators said only three of the state’s top 10 health insurers reported any suspected fraud cases in 2017 and 2018.

The Arizona Department of Insurance got 32 referrals in 2017. That seemed low, so the regulator reminded the companies about its fraud reporting law. The next year the number more than quadrupled to 133. Paul Hill, the department’s chief law enforcement officer, speculated that companies don’t report fraud because they “don’t want the publicity.”

In Washington, the Office of the Insurance Commissioner only got one report in 2017 from Premera Blue Cross, one of the state’s largest insurers. A Premera official told me the company doesn’t report potential fraud unless it finds criminal intent. Instead it deals with most cases internally as “abusive billing,” which means the company “educates” the perpetrators. Only if the billing issues continue does it become suspected fraud.

Apparently, Premera is a great educator. The company’s investigations have led to only one fraud conviction since 2014, the official said.

Steve Valandra, a spokesman for the Washington regulator, doesn’t buy the Premera official’s explanation for the low number of referrals. The state’s reporting law doesn’t say insurers have to prove intent to refer a case, he said. It says they need to report any case where they have a “reasonable belief” there may be fraud.

Jay, director of the fraud-fighting coalition, said regulators need to use their authority to crack down on the insurers who don’t report suspected fraud. “Fine them,” he said.


States only regulate the fully insured health plans, in which people pay monthly premiums and the insurer pays their bills. But more than half of working Americans are covered under self-funded plans, in which their employer is paying the bills and hires an administrator, typically an insurance company, to run things.

Self-funded plans are regulated by the federal Department of Labor, but it barely looks at fraud. The Labor Department oversees plans covering tens of millions of people, but it opened just 359 health-related criminal cases in 2017 and 2018 and filed charges in 185, a spokesman said in an email.

The Department of Justice, which oversees the FBI and federal prosecutors, also investigates and prosecutes fraud in employer-sponsored health plans. But its spokesman said it doesn’t track how many cases involve commercial health plans.

Elliott, the former federal fraud prosecutor, said the Justice Department is more focused on policing fraud against the government health plans. When he was a federal prosecutor in North Texas, Elliott said he had about 15 cases involving government plans for every one involving a private one.

When private insurers pitched the occasional case, Elliott said, prosecutors had to weigh whether the insurer would fully cooperate with the investigation. Federal prosecutors dig into the details when they get referrals, he said. They might want to broaden a case, which could create more work for the insurer, or sully its reputation. Or, prosecutors might find out the insurer was not doing its job. “Certain things they wanted you to know about and certain things they didn’t want you to know about,” he said.

The private insurers, Elliot said, seemed to prefer to close cases quietly, cutting off the fraudster and pursuing repayment. But, he said, that allows the scammer to go on cheating others. That’s not fraud enforcement, he said. It’s an “accounting mechanism.”


I tracked down a dozen or so investigators who once worked for insurers, and they all said the same thing: Insurers don’t police fraud as much as they could because it hurts the bottom line.

When Dan Bowerman worked as a medical director for Independence Blue Cross in Philadelphia, he said it was easy to spot apparent fraud. But Bowerman, who is a chiropractor as well as a fraud investigator and expert in billing codes, said it takes a lot of work to show criminal intent. A medical provider can say a staffer made an honest mistake, he said. Or a doctor could claim to be trying a novel treatment, a gray area that medical policies allow. And medical providers can also produce records, bogus or not, to substantiate claims, he said. “There are very few providers that willingly agree that they committed health care fraud,” said Bowerman, who worked at the plan for about a decade, leaving in 2012, and is now semiretired.

Michael Crowley investigated fraud for more than a decade for three companies, including Humana and United. The flood of fraud was so great, he said, that investigators ignored suspect claims worth less than $300. Investigating those, the companies determined, would cost more than what they could recover, he said.

But those small claims add up. Williams, the personal trainer from Texas, billed insurers in increments of $300 and under for more than four years, and it added up to about $25 million. “If you’re a provider, you’re going to figure out that threshold real quick and stay under it,” Crowley said.

Crowley and other investigators say targeting suspect medical providers and facilities puts the insurers in a dilemma. They need a certain number of doctors and hospitals in their networks to make plans attractive to employers. They also must ensure patients have access to the care they need.

So apparently, I learned, there’s a calculation that goes on: If, for instance, you’re the only neurologist in town, your fraud may be forgiven.

“Commercial payers have relationships they are trying to keep intact,” said Jennifer Warren, who worked in payment integrity and fraud investigations for the insurance giants Optum, a subsidiary of United, and Cigna. She left the insurance industry in late 2017 to work for a vendor that helps employers reduce pharmacy spending.

At Optum, she said, the payment integrity team would require some suspect providers to provide records substantiating their claims. Or, she said, they would require everyone who billed for certain procedures to provide documentation. But if the providers complained enough, she’d be told to remove the hurdle. It’s a balancing act, she said. “They don’t want that provider out of the network, even though they’re obviously billing incorrectly,” she said.

Some insurers say they participate in a voluntary Medicare-led program called the Healthcare Fraud Prevention Partnership that analyzes claims data to look for fraud. But Medicare won’t say which insurers had actually shared data, or whether that information had been used to help convict scammers.

Several former fraud investigators said the first step was always to school suspected fraudsters on their misbehavior. That means months of letters ending with the admonition: “Don’t do this anymore.” Meanwhile, the former investigators said, a river of suspicious bills flowed through the payment system.

“If you talk to anyone who works in the special investigation units and cares about what they’re doing, they’re frustrated,” Warren said.

Louise Dobbe worked as an attorney for United and advised its fraud unit for more than a decade. She believes fraudsters know they are less likely to be prosecuted by private plans. Billing data showed that people cheating United on the commercial side played it straight with Medicare, said Dobbe, who left United in 2014 and stressed she is not speaking on its behalf.

If a doctor fleeces Medicare, the agency can block that person from billing it — a crushing blow. “We don’t have the hammer on the private side or the commercial side that Medicare does,” she said.

And Dobbe said referring cases to law enforcement is harder than it sounds. “They want it on a silver platter,” she said. An insurer might have nailed a $3,000 claim as fraud “dead to rights,” but the authorities will pass. “They want the bang for their buck,” she said.

Snyder, the Los Angeles County prosecutor, said insurers rarely send her any cases, and there’s no excuse. It is “incredibly easy to make a fraud report.”

Private insurers, she said, weigh fraud enforcement by its “return on investment,” when their priority should be the integrity of the health care system.

“The crime itself is stupid simple,” she said. “You lie about something to get something you’re not entitled to.”

[*] [-] [-] [x] [A+] [a-]  
[l] at 9/10/19 10:50am

by Marshall Allen

In most states, laws require private health insurers to submit information to regulators about suspected fraud in their networks. Such reporting helps everyone by highlighting scammers and their schemes. For instance, a doctor could be billing several insurers for services that weren’t provided, a hospital could be uniformly gaming billing codes to pad profits or a fraudster could be targeting several insurers pretending to be a medical professional.

But ProPublica found that most insurers prefer to handle suspicious cases internally without notifying regulators or prosecutors, who could pursue the alleged perpetrators in court. Ultimately, money lost to fraud is passed on to employers and working Americans who pay for the health plans.

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Here are three things insurance regulators, health care advocates and benefits consultants say could be done right now to ensure insurers take appropriate action:

State regulators could penalize insurers for failing to report suspected fraud.

About three dozen states require health insurers to report suspected cases of fraud to regulators. The reports allow regulators to warn other insurers about schemes, investigate cases and make referrals to law enforcement. Although health insurance fraud is widespread, regulators say they receive few reports.

Regulators need to randomly audit the claims received by insurers and fine the insurers for failing to report any fraud the spot checks uncover, said Dennis Jay, executive director of the Coalition Against Insurance Fraud. “I have never heard a good excuse for why regulators are not cracking down.”

Require suspected cases of fraud to be reported to regulators nationwide.

More than a dozen states do not require insurers to report suspected cases of health care fraud to regulators. Neither does the federal government, which regulates self-funded plans, in which an employer funds the plan and hires an insurer or other company to process medical claims.

More than half of the 150 million Americans who get their benefits at work are covered by self-funded plans. This means suspected cases of fraud are not being reported to regulators in most of the plans that cover working Americans. Experts say regulators need to be notified if an insurer or plan administrator identifies potential fraud, allowing them to investigate and alert law enforcement if necessary.

Give employers who fund their companies’ health benefits detailed information about spending, so they can spot suspicious trends.

The typical contracts between employers who fund their plans and plan administrators limit what employers can see about their claims, said Doug Aldeen, a Texas attorney who specializes in employer-sponsored benefits. For instance, the plan administrator may only provide a bill for the total amount spent on their workers’ health care — not a breakdown of costs. Aldeen said this system may obscure spending that could be fraudulent.

Aldeen said proposed legislation in Ohio could help employers take part in policing fraud. The bill would require insurance carriers to provide anonymous but detailed claims data to employers. That way, he said, they could identify any spending that looks out of line. Something similar could be done for all health plans, Aldeen said.

Have you worked in health insurance or employer-sponsored health benefits? ProPublica is investigating the industry and wants to hear from you. Please complete our brief questionnaire.

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[l] at 9/9/19 3:00am

by David Armstrong and Jeff Ernsthausen

Purdue Pharma has tried to refute accusations that it fueled the opioid crisis by arguing it was a small player in the U.S. market for prescription pain relievers. But a new ProPublica analysis of government data shows that the company, the maker of OxyContin, had a far bigger impact than it portrays.

Purdue’s position rests on a Drug Enforcement Administration database, made public by a court order in July, which shows Purdue sold 3.3% of the prescription opioid pain pills in the U.S. from 2006 to 2012.

Last month, when Purdue moved to dismiss a lawsuit by the Massachusetts attorney general alleging that it had downplayed the addiction risk of its potent drug, the company highlighted the DEA statistic in a slide presentation. One slide was headlined: “Purdue makes a very small fraction of opioids nationally.”

Company lawyer Timothy Blank told the judge, “The notion that Purdue has created this epidemic is a serious misconception.”

The number promoted by Purdue, however, is an inadequate measure of market share and understates the company’s role in the opioid epidemic, according to experts and the new ProPublica analysis. That’s because the percentage of sales doesn’t take the potency and dose of the pills into account. The analysis favored by Purdue treats every pain pill as the same, whether it is a 5 milligram Percocet or an 80 milligram OxyContin. It’s analogous to measuring alcohol sales by equating a 12-ounce glass of 100 proof whiskey with a similar-sized can of light beer.

ProPublica analyzed the same data set touted by Purdue but accounted for the wide variation in strengths of prescription painkillers. Besides counting the number of pills sold, the analysis measured the amount and potency of opioid that they contained. Higher doses of opioids are associated with a greater risk of overdose.

On that basis, the market share of Purdue is 16% — about five times higher than the number cited by the company. That makes Purdue the third-largest seller of opioids from 2006 to 2012, behind generic pain pill makers Actavis Pharma and SpecGx, a subsidiary of Mallinckrodt.

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“All opioids are not created equal,” said Len Paulozzi, a former medical epidemiologist at the Centers for Disease Control and Prevention who researched prescription opioid overdose risk. He said it is important to adjust for potency because “the risk of an overdose, whether fatal or nonfatal, is directly related to the dosage a person receives.”

Purdue’s contention that it was a minor participant in the opioid painkiller market is both a legal and a public relations strategy. The company has been working to settle more than 2,000 lawsuits blaming it for helping to create the public health disaster, and also to protect the reputation and legacy of the Sackler family, its owners. Once praised for their philanthropy, the Sacklers have more recently been condemned by politicians and advocates for their stewardship of Purdue.

Settlement talks, which included a provision that the Sacklers contribute at least $3 billion of their own money, recently reached an impasse and Purdue is considering filing for bankruptcy, the Associated Press reported Saturday. The Sacklers have been separately sued by more than a dozen states, including Massachusetts and Connecticut, for their role in overseeing the company’s allegedly illegal marketing of OxyContin.

Purdue has long experience at countering criticism of OxyContin. The first reports that people were abusing the drug surfaced two decades ago. Since then, Purdue has repeatedly argued that its flagship drug has done more good than harm. Even when Purdue pleaded guilty in 2007 in federal court to a criminal charge of illegally marketing OxyContin by downplaying addiction risks, it blamed misstatements by employees who didn’t follow company directives. More recently, the company and representatives of the Sackler family have said that the opioid crisis is now driven by “illegal street drugs” such as heroin and fentanyl.

Purdue declined to comment on the ProPublica analysis.

By minimizing OxyContin’s market share, the per-pill sales data that Purdue prefers also muffles the drug’s outsized impact in certain states, especially in the Northeast. For example, Purdue’s lawyer told the Massachusetts judge that the company sold just 4.6% of the prescription pain pills in the state from 2006 through 2012. But when the total amount of opioid ingredient in each pill is considered, Purdue’s market share in the state is actually more than four times higher at 20.5%.

In some states, when sales are adjusted for potency, Purdue sold more painkiller medication than any other company: Purdue was the top seller in Rhode Island, with 31.2% of the opioid market, as well as in Connecticut, where it had 28.5%. In Ohio, which has consistently ranked among states with the highest rates of overdoses, Purdue had one-fifth of the market. In 13 states, Purdue was responsible for 20% or more of retail opioid painkiller sales.

The market share nationally of some companies dropped when potency was considered. SpecGx, which has 37.7% of the market on a per pill basis, fell to 29%. Actavis declined from 34.6% of the total pill market to 30.4% in the ProPublica analysis.

The analysis of the DEA data cited by Purdue was first done by The Washington Post. It partnered with the publisher of the Charleston Gazette-Mail in West Virginia in a joint legal action that prompted the release of the DEA database. The database, called Automation of Reports and Consolidated Orders System, or ARCOS, tracks every opioid pill sold in the country from manufacturer to distributor to pharmacy.

The Post limited its analysis to shipments of oxycodone and hydrocodone, which accounted for three-fourths of all pill shipments to pharmacies. ProPublica also restricted its analysis to the same two drug classes sold by retail outlets and practitioners because the numbers cited by Purdue in court are based on that methodology.

The reason Purdue’s market share is significantly larger when measuring the amount of opioid ingredient sold is because OxyContin is formulated at strengths many times higher than most other pain pills.

When Oxycontin was unveiled in 1996, Purdue’s marketing campaign touted it as providing longer pain relief while allowing patients to take fewer pills each day. To accomplish that, Purdue packed into each pill a large amount of opioid that was slowly released over a 12-hour period. Its largest dose, until it was taken off the market in 2001 amid safety concerns, was a 160 milligram pill.

Abusers quickly figured out how to crush OxyContin tablets and remove the opioid inside. Some snorted it, while others reduced it to liquid form and injected it.

In determining the amounts of opioid painkillers sold by Purdue and other manufacturers, ProPublica calculated a rate called morphine milligram equivalent, or MME, which is commonly used by public health agencies, including the Food and Drug Administration and the CDC.

The calculation standardizes different types of opioids to the same morphine equivalent. Hydrocodone, the opioid in Vicodin, has a potency that is equivalent to morphine. Oxycodone, the opioid in OxyContin, is one and a half times more potent than morphine. When converting to morphine equivalents, the amount of hydrocodone in a pill is multiplied by one, while oxycodone is multiplied by 1.5.

Using this formula, an 80 milligram pill of OxyContin has an MME of 120 while a 5 milligram Vicodin pill has an MME of 5.

The average total MME for a pill sold by Purdue in the DEA database was 61.5. By comparison, the average MME per pill sold by the largest manufacturer during this time frame, Actavis Pharma, was 11. For the second biggest manufacturer, SpecGx, it was even lower at 9.6 MME.

CDC guidelines advise against prescribing more than 90 MME per day. OxyContin users are typically directed by their doctors to take two pills per day. Based on the DEA database, the typical prescription from 2006 to 2012 would have totaled 123 MME a day — an amount 37% above the maximum recommended by the CDC.

A CDC review in 2016 concluded that higher opioid dosages are associated with increased overdose risk. One of the studies cited by the CDC found that patients taking between 50 and 100 MME of painkillers a day were up to 4.6 times more likely to overdose than those taking less than 20 MME. For patients receiving more than 100 MME a day, the risk was up to nine times higher than for the lower dose group.

“If Purdue sold a lot of 80 milligram pills, they are going to have proportionately more of the market on an MME basis,” said Gary Franklin, the medical director for the Washington State Department of Labor and Industries. “That is an important point to get out. People are dying from these higher doses.”

Franklin, who is an unpaid expert for the state of Washington in its lawsuit against Purdue, cautioned that other factors increase overdose risk as well. For instance, people who take benzodiazepines, such as Xanax, at the same time as opioids can fatally overdose on lower doses of painkillers.

The FDA, in a staff report this year, also found that a higher daily dose of opioid pain relievers “likely contributes causally to increased risk of intentional and unintentional opioid overdose.” The agency noted that other factors influence overdose risk and that a substantial portion of overdose victims either did not have a prescription for the pills they took or were prescribed a lower daily dose.

Until 2010, according to the DEA’s National Drug Threat Assessment Summary, OxyContin was “by far” the most commonly abused prescription painkiller in the country. In 2010, Purdue introduced a reformulated version of OxyContin that is harder to abuse. The new version can still be abused if crushed or taken orally, but it does not provide as potent a high as the older version, according to the agency.

In the Massachusetts hearing last month, Purdue relied on the lower per pill market share in oral arguments before the judge and in the accompanying slide presentation of data. One slide stated, “DEA Data Refute the Commonwealth’s Allegations.”

“What the commonwealth has done is create an extraordinary misperception in the community, and it is a dangerous misperception,” Purdue’s attorney Blank told the judge at the Aug. 2 hearing, according to a transcript of the proceeding. “The attorney general says it is all on Purdue. It is not all on Purdue.”

“All those prescriptions are not equal,” responded Assistant Attorney General Sandy Alexander. “Some of those prescriptions are for two pills of the lowest dose opioid. Purdue specialized in the most dangerous prescriptions because they were the most profitable.”

The Massachusetts lawsuit cites internal Purdue records in alleging the company pushed higher doses because they were the most profitable. Authorities also allege that the company knew patients taking more of the drug were more likely to overdose. One Massachusetts doctor, who was paid more than $80,000 by Purdue to give talks to other physicians, prescribed 24 of the highest dose OxyContin pills a day for a single patient, according to the state complaint.

“Purdue specialized in getting patients on the highest doses for the longest periods of time,” Alexander told the judge. “Those prescriptions, when you count them, they’re not all equally valuable to a drug company and they’re not all equally dangerous to the people of Massachusetts.”

Purdue’s market share from 2006 to 2012 would have likely been even higher save for an anomaly in the history of the drug. For a brief time, including the years 2006 and 2007, OxyContin had generic competition. Its sales slumped from $1.3 billion in 2005 to $752 million in 2006 and $1 billion in 2007, according to health care data firm IQVIA. Purdue sued the generic makers and gradually eliminated competition from them so that by 2008, OxyContin sales more than doubled from the prior year to $2.3 billion.

By that measure, dollar sales, Purdue has long been the market leader for prescription opioids. Internal Purdue records indicate OxyContin had more than 28% of the total market share in gross sales each year from 2008 through 2018. Since 1996, sales of OxyContin have totaled more than $35 billion. The Sackler family received at least $8 billion in company profits during that time, according to court records.

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[l] at 9/6/19 12:00pm

by Jerry Mitchell , Mississippi Center for Investigative Reporting

Top Mississippi officials called for a review of the state’s increasingly troubled prison system, following stories by the Mississippi Center for Investigative Reporting and ProPublica that documented chaotic conditions in the facilities.

“As governor, one of the first actions I’ll take is a full audit of the system to figure out why we keep seeing problems like this, and identify solutions to prevent them from happening in the future,” Democratic gubernatorial candidate and state Attorney General Jim Hood said in a statement.

The Mississippi Center for Investigative Reporting and ProPublica showed how prisoners have been beaten and burned by fellow inmates at the South Mississippi Correctional Institution. At that prison, inmates outnumber guards 23 to 1, a ratio far higher than that of other state and federal prison systems.

After the most recent story on Aug. 19, inmates at the prison in Leakesville were searched and moved, and one gang operating inside the state’s prisons said it is disarming.

Hood’s Republican opponent, Lt. Gov. Tate Reeves, acknowledged there is “still much more work to be done to strengthen Mississippi prisons,” according to spokeswoman Laura Hipp.

She said Reeves, locked in a tight race with Hood, was committed to a measure signed into law in 2014 by Gov. Phil Bryant. The initiative promised to reduce the prison population, save millions and reinvest some of the money into programs for offenders.

“We have passed prison reform that encourages nonviolent offenders to be productive citizens who can work to support their families,” Hipp said. “Tate is dedicated to that effort.”

But a May story by the Mississippi Center for Investigative Reporting and ProPublica showed how implementation of the 2014 law has been marked by broken promises and funding shortfalls, according to interviews, data and documents.

Instead of investing money into programs for offenders, the story found, the savings have gone back into the state’s coffers, helping to pay for huge corporate tax cuts at a time the state was struggling to meet revenue estimates.

The Mississippi Department of Corrections’ spending has declined by $185 million since 2014. The department’s $347 million budget for this fiscal year is $30 million less than it was in 2014.

A spokeswoman for Bryant said the governor remains confident that Corrections Commissioner Pelicia Hall, the state’s top prison official, is taking the steps needed to improve the system.

“He trusts the commissioner to navigate challenges and to properly manage the state’s correctional facilities,” Rivers Ormon said.

In an unusual display of bipartisanship, Hood’s concern over the state’s struggling reform effort was echoed by other top Mississippi officials.

State Rep. Jay Hughes, a Democrat who toured SMCI in April and is running for lieutenant governor, called on state lawmakers to hold hearings focusing on Mississippi prisons to address the kinds of problems he witnessed in the facility. “The legislative committee process has a heightened degree of attention,” he said.

Secretary of State Delbert Hosemann, Hughes’ Republican opponent in the race for lieutenant governor, recently toured the Mississippi State Penitentiary at Parchman and left concerned. “Our corrections officers are underpaid and working significant overtime,” he said, “and conditions inside our facilities are deteriorating.”

More reform is needed, he said. “We want productive, tax-paying citizens and not recidivism.”

In the days following the story about SMCI, corrections officers began moving inmates to different units within the prison, according to families and inmates. They also searched inmates and cellblocks for contraband. Such techniques are often used by corrections officials to break down gangs’ ability to operate.

Read More Inside The Prison Where Inmates Set Each Other On Fire and Gangs Have More Power Than Guards At South Mississippi Correctional Institution, inmates have been on perpetual lockdown for seven months and gangs enforce rules. With frequent beatings, burnings and escapes, the prison has become a violent tinderbox.

Self-described leaders of the Gangster Disciples, one of several groups operating inside the prisons, told the Mississippi Center for Investigative Reporting and ProPublica that their members are turning in their weapons to show they are against violence and that they want to transition to “the war against illiteracy.”

Shawn Davis, who identified himself as an “outstanding representative” for the Gangster Disciples, wrote that the group had turned in at least 255 weapons at Mississippi prisons since Aug. 26.

Davis, a 32-year-old inmate serving a life sentence for murder at Parchman, wrote that he surrendered five weapons. On the same day that the Mississippi Center for Investigative Reporting asked corrections officials to confirm Davis’ account, the prison put Davis in lockdown for belonging to a gang, according to inmates. Prison officials did not return requests for comment.

A top Gangster Disciples leader, who asked not to be named over concerns about retribution from prison officials, said prison classes sometimes have waiting lists. He said the group has begun teaching its own courses on topics such as real estate, journalism, corporate thinking, time management, business development and entrepreneurship.

“One time we were part of the problem,” he said. “Now we want to be part of the solution.”

The prisoner movements, weapons surrender and educational offerings could not be officially confirmed. Corrections officials did not return requests for comment.

Outside experts expressed skepticism. Jimmy Anthony, a vice president of the Mississippi Association of Gang Investigators, said the Gangster Disciples have made such promises before.

“They would be in a low-income community, cleaning up garbage,” he said.

But by night, “the same people would be selling crack cocaine.”

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[l] at 9/6/19 11:28am

by Akilah Johnson

GAITHERSBURG, Md. — Ritchard Jenkins reached into the black computer bag he keeps near his workstation at Graceful Touch Barber and Beauty Salon and rifled through medical papers, pulling out an envelope buried deep at the bottom.

It was an unopened medical bill for $971.78, now 17 months overdue, that he had put out of sight and out of mind. Another unpaid bill from May for $447.13 rested in a nearby drawer. Both are the result of an arthritic knee that needs to be replaced and keeps the 55-year-old master barber in near-constant pain.

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He makes numerous phone calls to doctors and insurance companies to discuss his coverage. And just when he thought he couldn’t take any more, he fell down the steps, breaking his right wrist, tearing his rotator cuff and kickstarting a new round of hospital stays, tests — and insurance claims.

“Health care is ridiculous. These politicians really need to step their game up,” Jenkins said recently, using his left hand to hold clippers and a comb because his right remains swollen and partially immobile.

But Jenkins shrugged when asked if Medicare-for-all, the slogan that has dominated early campaigning in the 2020 Democratic primary, was the solution to his and America’s health care woes. He mumbled something about being too young for Medicare and laid bare the disconnect between how voters think and talk about health care and how candidates do.

Jenkins uses clippers with his swollen right hand. (Gabriella Demczuk, special to ProPublica)

As the Democratic primary campaign heats up, with the third debate scheduled for Sept. 12, candidates have used the slogan to distinguish themselves as bold progressives, moderate pragmatists or, in some instances, a little of both. The Trump administration has made it a point of attack, vowing to create a better system at lower costs. But interviews with voters and research by health policy experts show that the average voter has little idea of what is meant by the phrase that has already become a campaign signpost.

In its broadest terms, Medicare-for-all is what health care experts call single-payer: A system in which a government entity reimburses doctors and hospitals at a set rate. Many of the world’s most admired health care systems, from France to Israel to Canada, use some version of this approach.

Many health care experts argue that single-payer is the most effective way to deliver medical care to the greatest number of people. But until now, it has been politically unimaginable, taken off the table by most candidates seeking national office.

Health care “is the most important issue” of the election, and “single-payer is the right solution for American health care,” said Dr. Adam Gaffney, president of Physicians for a National Health Program and instructor at Harvard Medical School, who supports calling it Medicare-for-all but acknowledges pitfalls with the framing.

This “is an issue that affects, literally, every single person in this country,” he said. “Even putting the medical issues aside, it’s an economic issue. The way we finance health care promotes economic inequality.”

Medicare-for-all, in the purest sense, largely would replace private health insurance with a single, government-run program covering most everyone. It would be similar to traditional Medicare, the current federal health insurance program for most adults over 65 and young people meeting federal disability requirements, hence the name.

Sounds simple? It’s not.

Medicare was signed into law in 1965 after a 50-year effort to create a national health insurance system covering everyone. Opposition was so fierce that President Franklin Roosevelt excluded health insurance from the Social Security Act of 1935, and 13 years later President Harry S. Truman’s efforts to close what he called “the greatest gap in our social security structure” died in committee. The only way to get the law passed was by limiting coverage to older Americans.

And it’s worked, more or less, because of the government’s ability to set payments to health care providers. Still, high-quality, affordable coverage remains out of reach for many Americans, including many on Medicare. (Medicare covers only a portion of medical expenses, with many people buying supplemental plans to mitigate out-of-pocket costs.)

The Affordable Care Act, passed in 2010 during the Obama administration, was seen by many experts as a once-in-a-generation reform. Some argue it didn’t go far enough to provide every American with quality health insurance at a reasonable price. Others say it proves that the government isn’t the solution.

The fight over whether to expand the government’s health care system to cover all Americans has been part of the national conversation for generations, albeit often on the fringes, and was a topic of debate even before independent Sen. Bernie Sanders, of Vermont, made it his campaign rallying cry during his first Democratic primary presidential campaign in 2016.

[ Graphic: Only Two Candidates Support Medicare-for-All in Its Broadest Termsand Mean It. See How Each Candidate's Views Break Down. ]

In fact, it was the lessons learned during President Bill Clinton’s failed health care reforms in the 1990s that inspired the term Medicare-for-all. The phrase first appeared in the Congressional Record in 2003 on a House bill introduced by former Rep. John Conyers Jr., of Michigan, and again in 2006 when the late Massachusetts Sen. Edward M. Kennedy, long a proponent of national health insurance, introduced the “Medicare for All Act.”

But it was a former staffer who suggested Kennedy start saying Medicare-for-all instead of single-payer.

“It was too wonky, and no one knew what it meant,” Dr. Philip Caper, a single-payer advocate for nearly 50 years who worked with Kennedy from 1971 to 1976, said during a phone interview from his home in Maine. “I said: What we’re really talking about is expanding Medicare for everybody. I think you should use Medicare-for-all from now on. It’s harder to demonize it … and you don’t have to explain it.”

The senator took his advice, but the bill died in committee.

“This is the first time the notion of Medicare-for-all has really had any political traction” since 1974, Caper said.

It was the subject of the first question asked during the first night of the second Democratic presidential debate in Detroit, where the discussion lasted more than 20 minutes. And a recent Morning Consult/Politico poll showed that 65% of voters say they would support a candidate in the Democratic primary who favors Medicare-for-all over preserving and improving current health care laws.

Still, Caper said, for such a shift to work, there would be a huge need to educate the public and grow a large, active constituency around Medicare-for-all. Elected officials “hate the political pain” that often accompanies large-scale change, he said.

Plenty of people are arguing against Medicare-for-all, urging program reforms but not restructuring. Dozens of health care business groups created the Partnership for America’s Health Care Future to eschew “one-size-fits-all health care … whether it’s called Medicare for all, buy-in, or a public option.” And though the American Medical Association is not listed as a member on the alliance’s website, its president said recently that it too believes in a “pluralistic system.”

“Rather than disrupt what we have now, let’s build up on the progress of it,” said Dr. Patrice Harris, president of the AMA. “Ninety percent of folks have health insurance. It really is about the 10% of folks who don’t.”

Making national health insurance a reality would mean redesigning the country’s health care payment infrastructure. It would involve going from a diffuse network that includes private insurers for those who can afford it and public services for a limited number of those who can’t into a single government-administered system. The role of insurance companies would be vastly reduced. By one estimate, as many 2 million people who are paid to process insurance claims or argue about them would lose their jobs.

Would people get to keep their doctors? Unclear. Would prescription drug costs decrease? Uncertain. Would wait times increase? Unknown. Copays? No, depending on the plan. Increase in taxes? Almost certainly, but again, it depends.

Jenkins’ workstation. (Gabriella Demczuk, special to ProPublica)

Because the current system doesn’t cover everyone, the government would have to raise money (that is, taxes) to pay for a national health care system. Economists and health experts agree that this would cost significantly more than the $3.5 trillion the nation currently spends on health care, about a third of which is spent on private insurance. And a substantial sum of the nation’s health care costs goes to administering and processing insurance claims.

They disagree on who would get taxed or how much and over whether the trade-off — higher taxes in exchange for limited to no copays, premiums or deductibles — would be worth it. Some experts argue that creating a national health care system would cost the country an additional $32 trillion. Others say it would eventually save $12.5 trillion. Determining who’s right, and by how much, depends on the design of the system which remains a heavily debated point of contention.

“When you say Medicare-for-all, there are eight different flavors,” with each dependent on each presidential candidate’s platform, said John McDonough, a professor at Harvard’s T.H. Chan School of Public Health who was instrumental in both Massachusetts’ universal health care plan and the Affordable Care Act. “It’s an advertising slogan; it’s not a scientific concept.”

A Kaiser Family Foundation report from July found that about three-fourths of the country supports expanding public health insurance programs, including allowing those 55 to 64 to buy into Medicare.

But the report showed that how politicians talk about the issue matters, with 63% responding favorably to the terms “Medicare-for-all” and “universal health coverage.” Those positive feelings begin dissipating when it’s called a “single-payer national health insurance system,” dropping to 49%. They essentially evaporate if it means eliminating private insurance, increasing taxes or disrupting the current Medicare system, with about 60% opposing a national health care plan.

“The problem is: What is Medicare-for-all?” asked Ashley Kirzinger, associate director for the Kaiser Family Foundation’s public opinion and survey research team, which has been polling on the topic since Sanders’ 2016 campaign pushed it into the mainstream. “It’s not Medicare and lots of times it’s not for all, so it’s a little bit of a misnomer.”

Core dimensions of health policy — cost, access, quality and equity — vary wildly depending on factors such as income, geography, race, gender, ethnicity and job type, McDonough said, adding that creating a formula to improve everyone’s health care is “very hard. When you make changes, you will improve it for many but diminish it for others.”

All 20 Democratic candidates say health care is a human right, and universal coverage has been a cornerstone of the Democratic Party’s platform. But universal coverage and Medicare-for-all can be achieved in very different ways — one can include keeping private insurance and the other, in the strictest sense, doesn’t — and are not necessarily synonymous.

Candidates’ health care platforms exist on a spectrum from least to most disruptive, with some calling for building on the current system while others champion its complete dismantling.

Twelve support Medicare-for-all — or something like it — with some, such as Beto O’Rourke, the former Texas congressman, and Mayor Pete Buttigieg of South Bend, Indiana, opposing a single-payer system while trading in the brand recognition that is Medicare-for-all with their respective slogans “Medicare for America” and “Medicare for all who want it.”

The candidates views are not fixed. Some have occupied several positions at once or adjusted their plans to be more mainstream.

Three of the six senators in the race co-sponsored the bill written by Sanders to establish a national Medicare-for-all health insurance program. And until recently he remained the consistent single-payer stalwart, committed to the bill as written. But he, too, reportedly announced compromises for union workers that would allow any employer savings under Medicare-for-all to be passed along to workers in money or other benefits. Others, however, have flirted with — or flat-out embraced — maintaining private insurance.

And Sen. Kamala Harris of California, who calls her plan Medicare-for-all though it includes a mix of public and private insurance, co-sponsored the Sanders bill. She also co-sponsored four other bills along the ideological spectrum currently before Congress.

Then there are candidates such as former Vice President Joe Biden and former Maryland Rep. John Delaney who say Medicare-for-all is too controversial and costly an experiment. Universal coverage can be reached without completely upending the system, they contend.

[ Graphic: Nearly Every Senator Running Has Co-Sponsored Multiple Medicare Bills Across the Spectrum. See What Those Bills Are. ]

Caper, the single-payer evangelist who helped popularize the term, said presidential candidates “water it down” and “confuse the issue” by suggesting Medicare-for-all can include commercial insurance.

To him it’s simple: The mission of commercial insurance is to make money while Medicare’s mission is to facilitate care for people. “That’s a fundamental difference,” he said.

Some voters remain unmoved, convinced that the health care debate is little more than meaningless campaign rhetoric.

“Politicians have no clue what it’s like out here,” said Margaret Coates, who, for more than two decades, worked in medical billing for providers and insurers.

Medicare is expensive and confusing, she said, and so is trying to buy health insurance. About two years before she turned 65, Coates said the government began inundating her with a dizzying array of information about Medicare.

“I did not know how expensive these plans were until I reached Medicare age,” she said, sitting in the magazine section of the Gaithersburg library, where signs posted against the back wall ask, “Are you eligible for help with Medicare costs?”

The need for help is widespread. Medicare covers about 80% of the costs of doctor visits and outpatient services; most seniors buy insurance to cover some or all of the remainder.

Coates’ 28-year-old daughter, a cosmetologist, has had her own health care struggles. Last year, she paid more in federal taxes for not having insurance, a penalty that costs at least about $700 per adult. (The Tax Cuts and Jobs Act of 2017 eliminated penalties for taxes filed in April 2020.) To avoid another penalty, she took on the cheapest insurance she could find at a cost of about $120 a month. With a $3,000 annual deductible, she has had to turn to her parents for help with medical bills.

“Everyone is up there cheering and happy because you have medical insurance,” Coates said. “But no one is saying what happens after you get it.”

Much of the conversation about the costs associated with Medicare-for-all include trillion-dollar figures, which does little to explain how it would affect taxpayers’ wallets. What resonates most with voters are not big aggregate numbers, but people’s out-of-pocket costs, said Kenneth Thorpe, an Emory University health policy researcher who worked as a legislative consultant to Vermont during its failed effort to create a single-payer system.

“We spent two years doing estimates, saying if we ran [health care] through the state, what would the state have to raise in taxes?” The answer, he said: Almost a 20% increase in payroll and income taxes. Creating a single-payer plan that would have covered everyone in Vermont would have forced some small businesses to close and put some people out of work.

In the end, he said the trade-off — increase taxes to expand coverage and decrease health care costs — wasn’t worth it, so “they dropped it, one of the most liberal states in the country.”

Charles Blahous, a senior research strategist at the Mercatus Center at George Mason University, and a former trustee of the Medicare and Social Security programs, said it would be an “analytical mistake to say we’re paying for this in other ways.” Because, he continued, “even if you make a very aggressive assumption for substantial administrative cost savings and substantial drug cost savings. It would still be the case that national spending would be higher.”

About 81% of Democrats and left-leaning independents say the federal government has a responsibility to ensure health insurance for all Americans, according to a recent Pew Research Center poll. The opposite is true of Republicans and right-leaning voters, 77% of whom say this is not the government’s responsibility.

Anger over the passage of the Affordable Care Act, which made health care more accessible and affordable for millions of Americans without coverage (though, critics say, not affordable and accessible enough), helped give rise to the Tea Party. Republicans made repealing President Barack Obama’s signature health care legislation central to their party’s effort until the 2018 midterm elections, when voters turned out en masse demanding that key provisions be retained.

Still, the Trump administration said replacing the ACA is key, backing a federal lawsuit seeking to overturn the law and proposing rules allowing individuals to purchase short-term insurance, small businesses to join forces to offer employees health plans, and employers more flexibility in how they fund health insurance.

Health and Human Services Secretary Alex Azar reiterated the administration’s objective of “choice and competition” during a July speech before an advocacy group whose mission is to improve private health insurance options for Medicare beneficiaries while taking aim at the Medicare-for-all debate. He criticized “a total government takeover” as a “reckless” idea.

Taking a seat at an empty barber chair at Graceful Touch, Antonio Dickerson shakes his head in disgust at the idea of government working to improve life for people like him.

“Absolutely not,” said the 50-year-old, rubbing a scar on his shin, a reminder of health care interactions that have left him with a heavy dose of skepticism that Medicare-for-all — or essentially any government action — will result in meaningful reform.

He watched Jenkins, his friend and co-worker, return to work instead of recuperating after surgery because he can’t afford the supplemental coverage that would allow him to take more time to heal.

Jenkins returned to work instead of recuperating after his injury because he can’t afford supplemental coverage. “Health care is ridiculous. These politicians really need to step their game up,” he said. (Gabriella Demczuk, special to ProPublica)

He watched his grandmother die two weeks after being released from the hospital, saying her insurer would no longer cover the cost of her care.

He watched one nurse’s shift end — and begin again — as he waited, uninsured, in an emergency room for hours, blood oozing from an open wound on his shin that eventually required 32 stitches.

“If you don’t have any money, get to the back to the line,” he said asking if those in the barbershop had ever seen “John Q,” a 2002 movie starring Denzel Washington about a husband and father whose son needs a life-saving operation but insurance won’t cover it.

Washington’s character takes the emergency room hostage, forcing the hospital and doctors to perform his son’s heart transplant.

That, said Dickerson, is “a very understandable situation.”

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[l] at 9/6/19 10:45am

by Kyle Hopkins , Anchorage Daily News

She met him at a bar on a windless January night. Anna Sattler, 30 years old at the time, was wrapping up a girls’ night out when she got into an argument with friends and found herself without a designated driver. When this kindly stranger appeared, offering to drive her home, she accepted.

“The intention was never to pick anybody up. I was looking for a ride,” said Sattler, who had grown up in the close-knit native Yup’ik communities of Western Alaska and was still learning to navigate life on the urban road system. The man seemed so nice, she remembers. Until she started saying no.

Sattler says the man parked along a dark stretch of highway on the Kenai Peninsula, a mountainous region dotted with a few small cities south of Anchorage. There, he raped her, dragging her back to his van again and again when she tried to escape and scrambled for the woods. Afterward, as he began driving again, he asked her if anyone knew where she was. Would anyone miss her?

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Sattler opened the door and tumbled from the moving vehicle. “If I was going to die that night, I was going to die by my own hands,” she said.

That was 18 years ago.

Like countless other reports of sexual assault in Alaska, the case soon went cold. Sattler told a state trooper what had happened and a nurse swabbed her body for DNA samples. In the months and years after the attack, she said, no one seemed to believe her.

“I’m someone’s auntie. I’m someone’s mom. I’m someone’s sister,” she said in a recent interview. “We are humans. We desire to have justice.”

Sattler gave up hoping he would ever be caught. Until now.

The Alaska State Troopers on Thursday announced that rape and kidnapping charges had been filed in the case against 57-year-old Carmen D. Perzechino Jr. A former dog musher who competed in the 2004 Iditarod Trail Sled Dog Race, Perzechino was a longtime Sterling resident whom the U.S. Marshals Service extradited from the Philippines to face the new charges.

Perzechino has denied committing the crime. He could not be reached for comment.

Sattler says she can’t remember hearing much, if anything, from troopers after first reporting the rape. A troopers spokeswoman described the 2001 investigation as thorough and said it included witness interviews, seizure of surveillance video and other efforts. There is nothing in trooper records that indicate why the DNA evidence was not earlier submitted for testing, she said.

Over nearly two decades, Sattler had never stopped looking over her shoulder: The man had her driver’s license and purse, left behind when she jumped from the van.

Sattler said she wants her story to be publicly known as part of an ongoing investigation by the Anchorage Daily News and ProPublica into sexual violence in Alaska. She is one of nearly 300 Alaska survivors who have come forward to share their experiences from all corners of the state.

Her assault raises questions about the Alaska State Troopers’ efforts to find a suspect when she first reported the attack, and delays in processing DNA evidence that might have solved cold cases years earlier. It also hints at a new reckoning for perpetrators. Men who escaped arrest for decades are now being caught in a net of new evidence testing as police departments dust off old rape kits and cold case investigators capitalize on advances in DNA testing and genetic genealogy.

According to the indictment filed on March 13 in state court in Kenai, but not made public until Thursday, troopers submitted evidence from Sattler’s sexual assault examination for testing in 2018 under a project to reduce Alaska’s mountain of more than 3,000 unprocessed rape kits. As of June 1, 568 previously untested rape kits collected by troopers, including the evidence in this case, had been processed by a private lab under a federally funded portion of the project.

Troopers say Perzechino is the first person to be charged with rape in an Alaska case as a result of the newly tested evidence and follow-up investigations.

A longtime resident of the small town of Sterling on the Kenai Peninsula, 55 air miles southwest of Anchorage, Perzechino had recently sought to open a marijuana retail business. Investigators contacted Perzechino in January to talk about the 2001 attack, according to the charges. Troopers say he is believed to have left the U.S. this February.

Perzechino denied the assault and said he did not engage in any sexual activity with Sattler, the charges say.

Sattler, who said she was also sexually abused as a child by a relative, said she is sharing her story publicly now to support other survivors and fuel a conversation about rape in Alaska. The state’s rate of sex crimes is nearly three times the U.S. average. This year, the Daily News and ProPublica have been reporting how gaps in law enforcement leave many communities unprotected.

“None of this stuff is my fault,” she said. “We have to start saying something.”

“You’re Going to Die Today”

Here is what happened the night of the attack, according to Sattler’s recollection and a detailed account filed in state court by prosecutors.

On Jan. 19, 2001, Sattler traveled from her home in Anchorage to Soldotna, about 145 miles away on the highway, where she and friends went barhopping. The group split up and Sattler began talking to a man later identified by prosecutors as Perzechino.

Perzechino offered to give Sattler a ride, the charges say, and she accepted. They climbed into a vehicle that Sattler later described to troopers as a white or light-colored van with bucket seats.

The body of the van had no windows, Sattler noticed as they traveled the highway. She began to feel uneasy.

“After the male [Perzechino] had been driving for awhile, he began to tell [Sattler] that he wanted to have sex with her and began talking sexually aggressive to her,” prosecutors wrote in charging documents. “[Sattler] told him no, and that she wanted to go back to the bar.”

Sattler said Perzechino’s demeanor changed. He told her he was going to have sex with her, she said. He wasn’t asking.

Perzechino parked in a wooded area, Sattler said. It might have been along the highway, or a back road. “I was so disoriented. I didn’t know my way around back then.”

No cars passed. She saw no house lights.

“When I attempted to run away from his parked vehicle, he would tackle me and drag me back,” Sattler said. She remembers feeling the sting of ice on the ground after each tackle. Perzechino took her back to the van, pulled down her pants and raped her, she said. He told her, “You asked for this.”

Eventually they returned to the road, Perzechino talking as he drove. The charges say he told Sattler she was “pathetic” and threatened to kill her.

Sattler says she believed him. “He said, ‘You’re going to die today.’”

She pretended to be in shock, leaning her head against the cool window. Lying motionless. If she jumped from the van, would her legs be injured, she wondered. Could she run? She said, “I wanted to make myself as small as possible so I can figure out what he was going to do next, and I could counter that.”

The van had traveled about two miles when Sattler saw the lights of a state Department of Transportation truck.

“As we passed the DOT truck, I turned and looked at [Perzechino],” she said. The two made eye contact.

Without a word, Sattler opened the passenger door of the van and rolled, spilling out onto the highway, she said.

The state transportation employee, who had been working to place a road sign, heard the squealing of brakes. According to the charges, he looked up and saw Sattler “rolling in the road” as a van sped away.

“He’s going to kill me!” Sattler yelled. She asked the DOT driver to follow the van.

“I had wanted to figure out who he was,” she said. After a short, failed chase attempt, the DOT worker took Sattler to troopers who began a sexual assault exam. The investigator seemed uninterested, Sattler said. She believes troopers could have done more.

“I knew that they wouldn’t actively search for him,” she said.

The charges say troopers tried to identify the white van by looking for similar vehicles in the area.

“Unfortunately, it was a popular vehicle ... and [the trooper] was unable to develop a lead through this process,” trooper spokeswoman Megan Peters wrote in response to questions about the investigation. The Department of Public Safety “takes all reports of sexual assault seriously and strives to investigate each case to the highest of professional standards.”

But by January 2002, a year after the attack, the state closed the case because of a lack of leads.

“He Did More Talking Than Running Dogs”

Perzechino, meantime, was making a life for himself in Alaska.

A short profile published on the Iditarod website says he had come to the state in 1996 from New Hampshire, where he owned a mechanical installation company. In 1999, he pleaded no contest to a misdemeanor, domestic violence assault charge and filed for bankruptcy the following year.

By the winter of 2001 Perzechino was competing in sled dog races, entering short Eagle River contests and finishing second to Lance Mackey in the Chugiak 50. Perzechino ran the Tustumena 200 and Copper Basin 300 before entering the Iditarod as a rookie.

“I’ve been a nervous wreck for the last two to three weeks,” he told a Daily News sports reporter on the day of the race. He didn’t finish the 1,000-mile competition, scratching about a third of the way through. He never entered again.

“Seemed like he did more talking than running dogs,” said longtime Kenai Peninsula musher and former Iditarod champion Dean Osmar, who remembered Perzechino as an occasional presence in the area mushing scene.

“He was sort of around the fringes of it. He was buying dogs,” Osmar said.

A few weeks after the Iditarod, his wife wrote a request for a protective order saying Perzechino threatened to shoot their sled dogs after she withdrew money from a joint savings account. Among the family possessions, the filing noted, was a 1998 Ford van. It is unclear from online court records if Perzechino responded to the accusations; Kenai courthouse filings show a judge or magistrate granted the protective order.

In 2005, the couple began divorce proceedings, public records show. (His ex-wife did not respond to interview requests.) That year two women filed requests, one in Kenai and one in Anchorage state court, asking that domestic violence protective orders be placed against Perzechino.

One of the women described herself as an ex-girlfriend. She wrote Perzechino told her he would “never let me go” and had vowed to slice a tattoo from his skin and mail it to her. “He said he needs to beat someone up and it might as well be me,” she wrote.

In 2009, Perzechino pleaded guilty to a charge of misconduct involving a controlled substance. A trooper smelled marijuana during a traffic stop and seized his truck. Three years later he was visiting Anchorage when he saw a woman and yelled to her from his car. He had $20 to spend, he said.

The woman told him to pull into a parking lot and they agreed to trade money for sex, according to criminal charges filed by the city of Anchorage. The woman turned out to be an undercover police officer, and Perzechino pleaded no contest to a charge of soliciting prostitution. A magistrate ordered him to pay a $1,000 fine and serve three years of probation.

More recently, Perzechino attempted to launch a retail marijuana business, according to Marijuana Control Board records. Regulators denied the application, citing prior violations at the address.

In March, Carmen D. Perzechino Jr. was indicted for the 2001 rape and kidnapping of Anna Sattler. (Marc Lester / ADN)

There is no indication Perzechino was considered a sexual assault suspect prior to 2018, when the state announced an effort to reduce the backlog of untested rape kits across the state. Some of the testing, for evidence gathered by dozens of police departments, would be paid for with a one-time appropriation from the state Legislature. Testing of evidence from trooper investigations was funded with a $1.5 million federal grant.

Under the federally supported effort, troopers submitted DNA swabs collected from Sattler in 2001. It matched a known profile for Perzechino, according to the charges.

It’s unclear how and when Perzechino’s DNA came to be included in the national database, known as the Combined DNA Index System, or CODIS.

In January, an investigator with the Alaska State Troopers, Mike Burkmire, called Perzechino and asked him about the sexual assault reported all those years earlier by Sattler. Perzechino told the detective he did not go out to bars at the time and said he did not drink. He was married back then, he said, and “never had sex with anyone he picked up from a bar and that no female had ever jumped out of his van while it was moving.”

Perzechino could not explain why his DNA matched evidence collected in the case, the charges say.

Sattler had told investigators the man who attacked her was 5’8” to 5’10” and about 190 pounds. Perzechino is 5’10” and currently 225 pounds. When the cold case investigator searched vehicle records, he found Perzechino had owned a full-sized silver van in 2001, similar to the vehicle Sattler described to police and witnessed by the state transportation worker who drove her to safety.

A grand jury handed up the indictment on rape and kidnapping charges in March, with a superior court judge in Kenai issuing a warrant for Perzechino’s arrest.

“People Like Him Are Not Welcome in Our Country”

On April 4, members of the Philippine Bureau of Immigration’s Fugitive Search Unit found Perzechino in an apartment in Angeles City, Pampanga, and took him into custody at the request of the U.S. Embassy, according to a state-run news agency.

“People like him are not welcome in our country. If he did that in the U.S., then there is a possibility that he might commit the same crime in the Philippines,” Immigration Commissioner Jaime Morente of the Philippines said at the time. “Criminals like him ought to be barred from ever setting foot in our country.”

The Philippine News Agency reported that Perzechino was to be held at an immigration facility in Camp Bagong Diwa, Taguig, pending a deportation order. Troopers say he was extradited to the U.S. in August and is expected to face the charges in Alaska state courts.

The Daily News attempted to reach Perzechino, family members or an attorney representing him via several email addresses and phone numbers that he had listed in public records. One such email received a reply.

It said, in part: “Carmen has not been convicted of a crime. ... I do not communicate with Carmen and have no information as to his circumstance.” The sender did not respond to requests for additional information or explain his or her relationship to Perzechino.

Sattler, who learned Perzechino’s name this year when called by investigators, said she never stopped worrying about encountering the man who raped her. Now that he faces felony charges, she said she’s grateful for the new effort to test rape kits and to prosecute cold cases.

She also hopes to start a conversation about sexual assault in Alaska. It was a scary step to go public with her story, she said. At the time of the attack, she kept it to herself and she knows other Alaskan women who carry similar wounds.

“I want to hold everybody’s hand who has been through something like this,” she said. “It’s not easy, but I have enough strength to go through this and I have enough to carry people through this with me. But I can’t do it alone.”

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[l] at 9/5/19 12:00pm

by Rachel Otwell , NPR Illinois

State and national lawmakers, victims’ rights advocates and students called for a review of sexual harassment policies at the University of Illinois following an investigation by NPR Illinois and ProPublica that found gaps in the way sexual misconduct allegations were handled at the system’s flagship campus.

The news organizations reported last week how the University of Illinois at Urbana-Champaign allowed several professors to resign, some with provisions guaranteeing confidentiality, though they were accused of sexual misconduct and found to have violated university policies. Other faculty members facing similar accusations were allowed to stay on staff. Some were given extended periods of paid leave both during and following investigations.

“This article makes clear that this isn’t just an issue with students … but one that includes faculty,” U.S. Rep. Rodney Davis, a Republican whose district includes the Urbana-Champaign area, said in a statement. “The U of I needs to review their policies to protect students and faculty.”

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State Rep. Carol Ammons, a Democrat whose district includes the UIUC campus, said in a statement that there should be “a proper mechanism of discipline to ensure that perpetrators of this nature do not, in fact, benefit from harming students and university staff.”

Ammons, who chairs the House Higher Education Committee and co-chairs a Democratic statewide panel that explored sexual harassment and gender discrimination in politics, said she wants to work with the university and fellow lawmakers on a “comprehensive solution.”

Carrie Ward heads the Illinois Coalition Against Sexual Assault, a nonprofit that represents a state network of rape crisis centers. She said many victims are wary of speaking out for fear of retaliation and stigma, and some don’t come forward. The cases reported by NPR Illinois and ProPublica, in which victims reported allegations of misconduct but perpetrators were allowed to quietly leave, are disappointing, she said.

“I found it both not surprising and also somewhat demoralizing because I think what happens is the emphasis once again is on protecting the person who has committed the harassment,” she said. “And by protecting, I mean protecting their reputation, perhaps protecting their salary, protecting their ability to go someplace else and be employed in the same field.”

In four cases reported on by NPR Illinois and ProPublica, the university used confidentiality clauses, which required professors not to talk about the reasons for their resignations. In two of those cases, the university promised to keep the details secret as well. The university’s leadership said it has stopped using the clauses.

Resignations are the typical way that professors who face credible sexual misconduct allegations and investigations are let go. Firings are virtually nonexistent for tenured staff.

UIUC Provost Andreas Cangellaris said the university is considering ways to change that.

Read More At the University of Illinois at Urbana-Champaign, Preserving the Reputations of Sexual Harassers An administrator resigned amid sexual harassment accusations. Another college hired him. A professor was found to have stalked a coworker. She agreed to retire, then won a Fulbright grant. Campus leaders vow reforms, but many say it’s a long road.

In a statement to the Illinois public radio program “The 21st,” he wrote: “Sexual misconduct is always unacceptable at this university, and we are committed to making sure we have in place practices and policies that are truly aligned with our values. … These behaviors and actions undermine every aspect of our university missions of education, scholarship and service. We are taking actions to ensure that we live up to our responsibility.”

He said that disciplinary processes are under review “to allow us to take quicker and more forceful action when employment misconduct is proven.”

Task forces and committees continue to look at related issues, and a report is due this year from one group looking specifically at faculty misconduct issues. UIUC also says it has already ended the use of confidentiality agreements.

Ali Mirza, a junior studying political science and chief of staff for the student government association at UIUC, said the association plans to take its concerns to the administration in coming weeks.

“We need to do better. … There shouldn’t be any room for error in something like this.”

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[l] at 9/5/19 3:00am

by Ken Armstrong and T. Christian Miller, ProPublica

This year, in Bartow, Florida, a man received a 17-year sentence for raping a 13-year-old girl. The same girl had reported a previous allegation of rape against the same man — only to be branded a liar and prosecuted as a juvenile for filing false information with the police.

The second time she reported being raped, the girl had photo and video evidence. The Ledger, a newspaper in Lakeland, Florida, reported that the prosecutor in the false-reporting case subsequently testified that the girl should never have been prosecuted. A judge, the paper said, later determined she had been failed by the criminal justice system.

With its parallels to “An Unbelievable Story of Rape,” co-published by ProPublica and The Marshall Project in December 2015, the girl’s case shows that there continue to be instances in which law enforcement authorities doubt victims of sexual assault and even charge them criminally for coming forward.

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That failure of the criminal justice system is the subject of a dramatized, eight-part series that will begin airing on Netflix next week. Called “Unbelievable,” the Netflix series is based on the story by ProPublica and The Marshall Project, which won the Pulitzer Prize for explanatory reporting in 2016, and on a subsequent radio episode of “This American Life.” The series also draws upon “A False Report,” a book written by the story’s two reporters about the case.

The series, available to Netflix subscribers in 190 countries beginning Sept. 13, stars Emmy Award-winning actresses Toni Collette and Merritt Wever as police detectives in Colorado who team up to track down a serial rapist.

Kaitlyn Dever, who co-starred this year in the movie “Booksmart,” portrays Marie, a young woman in Lynnwood, Washington, who was accused of lying when she reported being raped.

The young woman, identified in the article by her middle name, Marie, was charged in 2008 with filing a false report, but her record was subsequently cleared when it was learned that she had been telling the truth all along. Her rapist, who had gone on to commit a series of additional attacks, is imprisoned in Colorado. The reporting by ProPublica, The Marshall Project and “This American Life” showed how the Lynnwood police investigation was deeply flawed, and how doubts about the young woman’s account both started and spread.

Marie said in a recent interview that she is grateful for the Netflix series, hopeful its lessons will resonate. “I don’t want it to happen to someone else like that,” she said of being falsely accused of lying. Marie now lives outside of Washington state. She is married, with two children, and works driving an 18-wheeler. Asked recently how she’s doing, Marie said: “Like any normal person with a family with two small children, I’m doing OK for the most part. I’m hanging in there.”

“He didn’t take my life away,” Marie said of Marc O’Leary, the man who broke into her apartment and attacked her at knifepoint. “I don’t want to cower in the corner. I didn’t want it to ruin the rest of my life. I didn’t want to give him the satisfaction. I wasn’t going to let him destroy me.”

The Netflix series’ showrunner, the person with overall creative authority, is Susannah Grant, who was nominated for an Academy Award for her screenplay of “Erin Brockovich.” Grant wrote “Unbelievable” with a team that included Ayelet Waldman, a former federal public defender turned novelist and essayist, and Waldman’s husband, Michael Chabon, who won the Pulitzer Prize for his novel, “The Amazing Adventures of Kavalier & Clay.”

Grant said that what attracted her most to this story was Marie: “Her heroic journey through things no one should have to endure. Her unwavering determination, as the world is piling betrayal on top of betrayal, to still try to ‘be as happy as I can be.’”

She was also drawn by the two Colorado detectives and their squads, and how they went beyond the call of duty while investigating a serial rapist assaulting women in the suburbs of Denver. “And then there are all the broken cultural issues exposed by the story — the quiet, corrosive prejudices we all carry around with us, the incredibly ordinary ways that things can go horribly wrong — and the admirable people who have made it their life’s work to make them a little more right,” Grant said.

The series is based on true events, and certain scenes — for example, Marie’s interrogation by police, the number of times she is asked to recount the attack and her rape examination at the hospital — hew closely to what happened. The series takes more dramatic license on the Colorado side of the investigation. The show’s creators, for instance, changed certain biographical elements of the women who were attacked outside Denver, making it less likely the characters could be matched to the real victims.

Lisa Cholodenko directed the series’ first three episodes. She previously received an Academy Award nomination for best director for “The Kids Are All Right.” The series’ executive producers include Sarah Timberman and Katie Couric.

As horrific as Marie’s case was — being raped, then charged with false reporting — it was not unique or new. Two victims of sexual assault in 1997 — one in Madison, Wisconsin, the other in New York City — faced criminal charges after they had reported being attacked. In both instances, their attackers were later identified and convicted, and the women were exonerated.

In 2004, a 19-year-old woman who reported being sexually assaulted in Cranberry Township, Pennsylvania, was charged with false reporting and spent five days in jail before bailing out. The man who attacked her was subsequently arrested. The charges against her were dropped. She sued the police and received a $1.5 million settlement.

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[l] at 9/5/19 12:00am

by Patricia Callahan

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up for ProPublica’s Big Story newsletter to receive stories like this one in your inbox as soon as they are published.

When she added Gabrielle’s name to the chart in her kitchen, Judy Kennedy could picture the annual ritual. At birthdays she would ask her newest grandchild to stand up straight, heels against the door frame, so she could mark Gabrielle’s height beside that of her other granddaughter in the Maine house the family has lived in since the 1800s.

But there are no lines for Gabrielle.

In January, the 9-month-old was killed when a driver delivering Amazon.com packages crashed a 26-foot rented box truck into the back of her mother’s Jeep. The baby was strapped into a car seat in the back.

The delivery driver, a subcontractor ferrying pallets of Amazon boxes from suburban Boston to five locations in Maine, said in an interview that he was running late and failed to spot the Jeep in time to avoid the crash.

If Gabrielle’s parents, who have hired lawyers, try to hold Amazon accountable, they will confront a company that shields itself from liability for accidents involving the drivers who deliver its billions of packages a year.

In its relentless push for e-commerce dominance, Amazon has built a huge logistics operation in recent years to get more goods to customers’ homes in less and less time. As it moves to reduce its reliance on legacy carriers like United Parcel Service, the retailer has created a network of contractors across the country that allows the company to expand and shrink the delivery force as needed, while avoiding the costs of taking on permanent employees.

But Amazon’s promise of speedy delivery has come at a price, one largely hidden from public view. An investigation by ProPublica identified more than 60 accidents since June 2015 involving Amazon delivery contractors that resulted in serious injuries, including 10 deaths. That tally is most likely a fraction of the accidents that have occurred: Many people don’t sue, and those who do can’t always tell when Amazon is involved, court records, police reports and news accounts show.

Even as Amazon argues that it bears no legal responsibility for the human toll, it maintains a tight grip on how the delivery drivers do their jobs.

Their paychecks are signed by hundreds of companies, but often Amazon directs, through an app, the order of the deliveries and the route to each destination. Amazon software tracks drivers’ progress, and a dispatcher in an Amazon warehouse can call them if they fall behind schedule. Amazon requires that 999 out of 1,000 deliveries arrive on time, according to work orders obtained from contractors with drivers in eight states.

Amazon has repeatedly said in court that it is not responsible for the actions of its contractors, citing agreements that require them, as one puts it, to “defend, indemnify and hold harmless Amazon.” Just last week, an operations manager for Amazon testified in Chicago that it signs such agreements with all its “delivery service partners,” who assume the liability and the responsibility for legal costs. The agreements cover “all loss or damage to personal property or bodily harm including death.”

Amazon vigilantly enforces the terms of those agreements. In New Jersey, when a contractor’s insurer failed to pay Amazon’s legal bills in a suit brought by a physician injured in a crash, Amazon sued to force the insurer to pick up the tab. In California, the company sued contractors, telling courts that any damages arising from crashes there should be billed to the delivery companies.

“I think anyone who thinks about Amazon has very conflicted feelings,” said Tim Hauck, whose sister, Stacey Hayes Curry, was killed last year by a driver delivering Amazon packages in a San Diego office park. “It’s sure nice to get something in two days for free. You’re always impressed with that side of it. But this idea that they’ve walled themselves off from responsibility is disturbing.”

“You’ve got this wonderful convenience with this technology,” he added, “but there’s a human cost to it.”

Amazon, the world’s largest retailer, is famously secretive about details of its operations, including the scale of its delivery network. In many of the accidents involving its contractors, drivers were using cars, trucks and cargo vans that bore no hint of Amazon’s corporate logo. The truck involved in Gabrielle Kennedy’s death, for example, was marked only “Penske Truck Rental.”

Amazon declined to answer questions about the demands it places on drivers, the anonymity of delivery vehicles or any requirement that these contractors indemnify Amazon.

The company said that even one serious incident was too many, but would not disclose how many people had been killed or seriously injured by drivers shuttling Amazon packages from warehouses to customers’ homes — the final leg of the journey, which the company calls the last mile.

In a written statement to ProPublica and to BuzzFeed, which published an article last week on Amazon’s delivery practices, Amazon said: “The assertions do not provide an accurate representation of Amazon’s commitment to safety and all the measures we take to ensure millions of packages are delivered to customers without incident.

“Whether it’s state-of-the art telemetrics and advanced safety technology in last-mile vans, driver safety training programs, or continuous improvements within our mapping and routing technology, we have invested tens of millions of dollars in safety mechanisms across our network, and regularly communicate safety best practices to drivers. We are committed to greater investments and management focus to continuously improve our safety performance.”

Among those killed in the Amazon delivery crashes ProPublica examined were a 22-year-old former Temple University student crushed when a contractor turned left into his motorcycle, an 89-year-old former Macy’s Herald Square saleswoman struck as she crossed a New Jersey street and an 89-year-old Pennsylvania grandmother hit in front of an Outback Steakhouse.

Telesfora Escamilla was walking in a Chicago crosswalk three days before Christmas in 2016 when an Amazon delivery contractor turned left and hit her. Escamilla had been preparing to celebrate the holidays and her 85th birthday with her family. Instead, they planned her funeral.

It’s difficult to determine the accident rate and safety records of Amazon’s army of contractors because the company does not disclose that information and much of its delivery operation falls into a regulatory void. The Federal Motor Carrier Safety Administration, which regulates trucks and collects data on truck collisions, doesn’t track crashes involving the smaller cargo vans that are the workhorses of Amazon’s delivery force.

“Nothing applies,” said Chris Turner, director of crash and data programs at the Commercial Vehicle Safety Alliance, whose members include federal, state and local officials that enforce trucking rules.

The box truck that killed Gabrielle was big enough — more than 10,000 pounds — that the fatal crash would have been included in federal regulators’ records of the subcontractor, if the company hadn’t gone out of business after the accident. But nothing in the current reporting requirements would have connected it to Amazon.

On the day of the crash, Ellen Kennedy was on her way to drop off the baby at her mother’s house before heading to work at a veterinary practice. It was about 6:30 a.m., still dark.

Months later, Kennedy still can’t shake her memory of the delivery truck’s lights in her rearview mirror.

“I can’t eat or sleep because when I close my eyes all I see are the headlights coming at me and all I hear are my sickening screams as I try to open your door to get to you,” she wrote on Facebook. “And I beg God to tell me what I did so wrong that he gave me you, the child I longed for, and then took you away.”


In the runup to Christmas 2013, Amazon had a lot to celebrate. That December, in a “60 Minutes” interview, its chief executive, Jeff Bezos, unveiled drones he said eventually would ferry customers their packages 30 minutes after they placed their orders.

“I know this looks like science fiction,” Bezos said as he showed Charlie Rose, the CBS correspondent, a video of a drone picking up a package from a conveyor belt and flying it to a doorstep. “It’s not.”

“Wow!” Rose exclaimed.

Amazon Prime, the loyalty program that had made two-day shipping standard almost a decade earlier, surged in popularity. More than a million customers signed up for Prime memberships in just the third week of December 2013. Sales hit a record high.

But UPS couldn’t keep up. Irate customers spent the holidays railing about missed gifts and disappointed children.

It was clear that if Amazon wanted to grow, it needed something other than dreams of drones.

The next spring, Amazon was testing contract couriers in San Francisco, Los Angeles and New York, according to The Wall Street Journal. And in 2015, Amazon introduced Flex, an app that allows people to sign up for delivery shifts using their own vehicles. (Amazon considers Flex drivers independent contractors, too.)

Amazon won’t say what percentage of packages its contractors deliver, but industry analysts say the share is growing fast. Researchers at Cowen estimate that in 2015, UPS and the United States Postal Service handled 91% of Amazon’s domestic deliveries, while contractors and DHL had less than 3%. Amazon’s network of contractors will handle 23% of its American deliveries this year, Cowen estimates, and 43% by 2024.

Analysts and companies in the logistics industry think Amazon eventually will become a formidable competitor to UPS and to FedEx, which until recently also had a slice of Amazon’s business. Acknowledging the threat, FedEx severed its domestic shipping ties with Amazon last month.

It wasn’t so long ago that most consumers bought their goods at brick-and-mortar stores. Then Bezos figured out a way to make shopping effortless and deliveries fast. When the store travels to the customer, there’s no need to stock up all at once. A steady stream of purchases means many delivery trips.

Amazon is only getting faster in delivering orders, and its competitors are racing to catch up. Last April, after reporting a record $3.6 billion quarterly profit, Amazon’s chief financial officer, Brian Olsavsky, told Wall Street analysts that the company was investing $800 million to make free overnight delivery the default for Prime members in the United States.

The next day, Walmart teased on Twitter: “One-day free shipping … without a membership fee. Now THAT would be groundbreaking. Stay tuned.” Walmart began offering free overnight delivery of 220,000 popular items in a few American cities, with a goal of expanding to 40 major metropolitan areas.

The one-upmanship has continued. In June, Amazon said Prime members were eligible for free one-day shipping on 10 million products.

Analysts at Cowen estimate that Amazon shipped 2.3 billion packages last year in the United States. The final leg of that journey, from warehouse to doorstep, has always been the most expensive for online retailers.

Contractors are critical to keeping the cost down. Olsavsky told analysts in January that Amazon’s contractors could make deliveries for the same price as or less than the legacy carriers. And the contractor network is nimbler, allowing Amazon to add or subtract drivers quickly.

Today, Amazon relies on tiers of contractors, ranging from publicly traded logistics businesses to tiny companies providing just a handful of drivers, to the Flex drivers. And during some busy periods, Amazon hires temporary employees as drivers.

Amazon isn’t unique in its outsourcing. Uber and the food startup DoorDash, for example, rely on delivery contractors, as do many publishers, including The New York Times.


The law governing independent contractors varies by state, but it all boils down to control: Does Amazon control enough aspects of the drivers’ jobs to make it responsible for their actions?

The question of where companies draw the line is a contentious one that has spurred litigation and legislation. FedEx has settled lawsuits in recent years brought by drivers who argued that they functioned as employees, not independent contractors. Last week, Uber and Lyft announced that they would spend $60 million to contest a proposed California law that would force them to treat their contract drivers as employees.

In lawsuits, people injured in crashes and drivers in wage disputes have argued that Amazon retains so much control that it effectively is the drivers’ employer.

To counter that argument, Amazon says the contractors hire and fire their own drivers. Yet work orders and the court testimony of an Amazon manager reveal that Amazon can demand that contractors bar particular drivers from its delivery force. It directs and tracks drivers’ routes. And Amazon is the sole client for many contractors.

The leverage Amazon holds over its delivery contractors was at the heart of bankruptcy proceedings for one such company, Tenet Concepts, last year in Fort Worth, Texas. Tenet formed in 2015 just to serve Amazon. The retailer paid a flat rate for each of Tenet’s delivery routes, which the contractor used to pay 300 employees, records show.

Then some drivers sued, alleging that Tenet had failed to pay them fairly. The drivers also sued Amazon, saying the online retailer was also their employer and that it, too, owed them money.

Tenet filed for bankruptcy protection, saying it couldn’t afford the anticipated $800,000 in legal costs to defend itself and, as required under its contract, Amazon. The bankruptcy judge, Russell Nelms, questioned why Tenet should have to pay for the defense of Amazon, when the critical issue was whether Amazon was the de facto employer.

Regardless of any indemnification provision, the judge said, “I think that’s an issue that Amazon on its own has to step up and defend, doesn’t it?”

“Well, Your Honor, Amazon doesn’t think that,” Laurie Rea, Tenet’s lawyer, responded. Amazon’s position, she said, was that Tenet had to pay defense costs and claims.

She added: “Amazon could cut them off right now, and that would be the end of the business and 300-plus people won’t have jobs. Because Amazon does have the upper hand.”

Ultimately, the court allowed Tenet’s bankruptcy to go forward, with the indemnity agreement in place. When Tenet crafted a plan to emerge from bankruptcy, it set up a monthly schedule to pay Amazon, now both a client and a creditor.


Rene Romero had worked as a truck driver in Honduras for decades, but had been delivering Amazon packages for only about two months before the crash that killed Gabrielle Kennedy, he said.

Romero’s job was to pick up pallets of packages at an Amazon warehouse south of Boston and deliver them to post offices around New England. He was working for DSD Vanomos, a business with just two trucks. It was a subcontractor for XPO Logistics, a large transportation company that handled “postal injection” deliveries for Amazon.

He would get to the warehouse at about midnight, he said, and wait to be assigned a route. His deadline for dropping off the packages was 6 a.m., he said, and the post offices would add them to mail routes.

On Jan. 10, Romero got a late start because there were other drivers ahead of him, he recalled in the interview. XPO said that according to its records, by 6 a.m. Romero had made it to two of the five post offices on his list. Romero said he was running late by the time he drove through Waterboro, Maine. On past trips, he said, he had been pressured by dispatchers.

“They’re calling you and saying: ‘Hey, did you get there yet? When are you going to get there?’” said Romero, 54.

It’s not clear whether those dispatchers worked for XPO or Amazon. XPO said it had a “joint dispatch” arrangement with Amazon, which declined to comment.

Still, he said, he didn’t think he had been speeding on the stretch of the town’s Main Street where Kennedy’s Jeep was stopped in front of him, waiting at an intersection to make a turn. He recalled the speed limit as 55 miles an hour — it’s actually 35 — but said he wasn’t going that fast because it was dark and foggy. He hit his brakes when he was about 10 feet away from the Jeep, he remembered, but couldn’t stop in time.

“Look,” he said, “the truth is I didn’t see the vehicle in front of me.”

He was charged with aggravated driving to endanger, a felony, and jailed.

Romero said he called the owner of DSD Vanomos, Denis Rolando Vasquez, to ask for help, only to be told that XPO had terminated its contract with DSD the day of the crash.

“He said, ‘You’re going to have to figure that out yourself,’” Romero recalled Vasquez saying about the criminal case.

In an interview, Vasquez said the driver hadn’t asked for help getting out of jail. Vasquez said XPO had been an important customer and that, without that work, his two-truck company couldn’t stay in business.

“The accident was something very terrible for all of us — for Rene and his family, and for me and my family, and especially for the child’s family,” Vasquez said. “Everybody lost here.”

XPO declined to comment when asked if it had indemnified Amazon.

An XPO spokesman, Bob Josephson, disputed Romero’s description of his work routine and the events leading up to the crash. Josephson said the driver had arrived at the Amazon warehouse at 1:11 a.m. and started his route at 1:50 a.m. — 10 minutes early. The deadline for dropping off his pallets of packages, Josephson said, had been 8 a.m., not 6.

When asked if XPO conveyed those expectations to Romero in Spanish, the language he spoke, Josephson responded that the instructions were in the “same format as previous days.” He added that just the week before, Romero had completed a delivery at one of the same Maine post offices at 7:26 a.m.

Romero couldn’t afford a lawyer. Delivering Amazon packages paid about $600 a week, and he had only $100 in the bank, according to court records. He qualified for a public defender. He spent seven days in jail before his daughter raised the money to bail him out.

In an interview in May, Romero said he hadn’t heard from his former boss or anyone from Amazon. “They just abandoned me,” he said.

This summer, the prosecutor’s office dropped the felony charge and began pursuing a civil offense — motor vehicle violation resulting in death — punishable with a fine and a suspension of driving privileges. The office did not respond to an inquiry about why it had dropped the felony charge.


In assembling its network of contractors, Amazon has fundamentally altered the career expectations and training of delivery drivers, turning what once was a steady union job with benefits into a transitory job.

“Logistics experience not required,” says an ad on an Amazon website, enticing aspiring entrepreneurs to start their own delivery contracting businesses with Amazon’s help. But the notion that anyone can do this kind of work belies the fact that being a delivery driver is among the deadlier jobs in America, according to data from the United States Bureau of Labor Statistics.

UPS trains its drivers in multimillion-dollar facilities where they are put through virtual-reality and obstacle-course hazards to learn to avoid them.

Flex drivers say Amazon trains them primarily through instructional videos they watch on their phones. When printed, Amazon’s delivery driver onboarding course from late 2017 is 39 pages, with less than half of one page devoted to defensive driving. One of the fatalities involving Amazon drivers was a 70-year-old Kansas grandfather on a Flex shift during the 2017 holiday rush.

In five of the 10 fatal crashes, drivers were making left turns. Studies have shown that left turns are more dangerous than right turns: They involve crossing oncoming traffic, and the vehicle pillar between the windshield and the side window can obstruct a driver’s view of pedestrians in crosswalks on the left. UPS says the algorithm that powers turn-by-turn directions for its drivers programs out most left turns.

Amazon has started building that safety feature into the routes of some of its delivery drivers but not others. Amazon contractors use two types of smartphone devices to scan packages: One includes left turns in its directions; the other avoids them, according to several drivers and a contractor who had to buy newer devices. Amazon declined to answer questions about the inconsistency.

While many career mail carriers and UPS drivers follow familiar routes every day, contract drivers for Amazon are often in unfamiliar territory, reliant on Amazon’s directions.

Nicolya Dorton, a former driver for a contractor called Scoobeez, said she often didn’t know where she was going when she delivered Amazon packages from a warehouse in San Leandro, California. Her shift was supposed to end at 6 p.m., she said, but she sometimes drove until 10 p.m. to finish deliveries. “You have to come back with an empty truck,” she said.

She recalled panicking one night in October 2016 when she saw a car coming toward her as she drove up what she thought was a one-way Oakland overpass (the street ran in both directions). She made a sudden U-turn and crashed, leading to a lawsuit filed by an injured driver, records show.

“I thought I was dead,” said Dorton, who stopped delivering for Scoobeez that night. “I think I had five or six packages left. I was way over time and trying to get it done and wound up getting into an accident.”

Other drivers echoed that feeling of pressure. Jeffrey Lines, a Texas driver who sued Tenet Concepts claiming the company had shorted his wages, testified in the bankruptcy case that when he’d delivered Amazon Prime Now packages — which he said had to arrive within an hour or two of the order — he couldn’t stop even to use a restroom.

“You can’t get a break,” said Lines, who stopped working for Tenet in January 2016, and whose wage claim was ultimately rejected. “Because if you take a break, you delay the orders, we get fired.”


Get hit by a UPS driver or a mail truck, and it’s obvious who the driver’s employer is.

But many Amazon contractors use plain white vans or rented box trucks that have no visible connection to the e-commerce giant, and Flex drivers sign up for shifts driving their own vehicles. Dorton drove a white Enterprise cargo van; Lines, his own car.

Last September Amazon announced it was arranging for contractors to lease 20,000 cargo vans emblazoned with its logo. At the same time, the company has been fighting to keep other parts of its delivery force anonymous.

When the planning board of the Boston suburb Braintree passed zoning rules requiring that delivery vehicles serving a new Amazon warehouse there be labeled as part of the company’s delivery network, Amazon sued, saying the signage demands were unreasonable.

The lack of labeling can make it difficult for people outside Amazon to know the scope of the harm attributable to collisions, or for those injured to hold Amazon accountable. The driver hurt by Dorton’s sudden U-turn sued only Dorton, Enterprise and Scoobeez. Amazon’s role wasn’t immediately apparent.

Amazon has been a named defendant in 45 lawsuits related to the crashes ProPublica examined. In some instances, plaintiffs or judges ultimately dropped Amazon from the suits; other cases led to confidential settlements, and it is unclear whether the payouts came from Amazon or its contractors. Still other claims are in the early stages. Testimony in one case that went to trial in Chicago recently underscored the challenges of taking on one of the world’s most powerful companies.

When Raul Salinas, 77, was struck in a hit-and-run two years ago by an unlabeled white cargo van, his son suspected right away that the driver was tied to Amazon. Salinas, a pedestrian, was hit in the crosswalk of a street leading to the company’s Chicago warehouse.

The family struggled to get any information about who was behind the wheel, even after filing a negligence lawsuit against the company. The accident left Salinas, a retired trailer repairman, with broken ribs and a fractured arm and knee, and requiring surgery to reconstruct his shoulder. Hospitalized for more than a month, he now walks with a cane and has limited function in the injured arm.

Police surveillance video shows a white van hitting Salinas on the evening of Dec. 8, 2017, then driving around his body and running a stop sign before fleeing. The footage is too blurry to make out the license plate, but a witness told the police he saw an Amazon van. Another witness who testified at the trial last week said the driver was wearing a reflective vest, which many Amazon contractors’ drivers wear.

After paramedics took Salinas to the hospital, his son Stephen and an acquaintance went to the warehouse. Workers there denied any knowledge of the accident and called the police when Stephen Salinas slipped inside the warehouse and started yelling at the shift manager.

According to company records submitted in the court case, the shift manager, Kevin Barbosa, reported to Amazon’s Global Security Command Center that an outsider had entered the warehouse and said “in an aggressive manner” that his father had been hit by an Amazon van. Barbosa told Amazon security officials that the street where the accident occurred was a popular corridor for drivers going to and from the warehouse and that their white delivery vans bore no Amazon logos, the records show.

In response to a question from Salinas’ lawyer, Barbosa said he had wanted to investigate but was told not to by an Amazon supervisor. “I was pretty frustrated,” Barbosa added.

Amazon’s lead investigator, Dusko Tadic, did not go to the warehouse, interview drivers or inspect vans for damage that night, according to his testimony.

That weekend Tadic and another manager reviewed warehouse surveillance video that had captured every vehicle entering and exiting the night of the accident. Tadic said they saw white vans, but none with marks indicating an accident. He took notes, he said, but later threw out his notebook.

The cameras record in a loop, so about every nine days footage is recorded over — unless someone saves it. Tadic preserved the video of Stephen Salinas’ unauthorized entry but not the footage of the vans, according to court records.

He reviewed Amazon’s routing software but did not identify any vans passing through the intersection at the time of the crash.

Amazon’s lawyers argued that many companies use white vans and that there was no admissible evidence that the driver who struck Salinas had been delivering Amazon packages.

On Tuesday, Judge Joan E. Powell of the Cook County Circuit Court ruled in Amazon’s favor, saying that without knowing the driver’s identity and whether the truck was connected to Amazon, there was “too much uncertainty” in the case to send it to the jury.


Before the morning of Jan. 10, Ellen Kennedy, Gabrielle’s mother, felt like she finally had everything she ever wanted.

Her marriage had broken up not long after Gabrielle was born, but she and her ex-husband, Chad Kennedy, had ironed out a routine. She had primary custody. He had shared-parenting rights two days a week. Gabrielle’s grandmothers pitched in to help.

“I literally thought that I was never happier because I had my baby, and I was making it as a single mom,” Kennedy recalled in an interview.

After the crash, she said, she sat on the couch in her trailer watching videos of Gabrielle, crying and drinking.

“I just pushed everybody away,” she recalled.

Her car destroyed, she had no way to get to her job. She fell behind on her bills and lost her trailer home.

On what would have been Gabrielle’s first birthday, Kennedy wrote her a letter and posted it on Facebook. “Not a day, hour, minute or second goes by that I don’t think of you and wish you were here. I wonder how big you’d be now,” she wrote. “I long to see you crawling around and playing with your toys and laughing at the dogs.”

The message went on: “It’s not FAIR but I want you to know I love you so, so much and I wait for the day when I can see you again. ’Til that time, baby, watch over me. I need you. Love, your mama down here.”

Her ex-husband could not bear to see photos or videos of his daughter. He grew depressed and drank heavily, he said. In March, he spent eight days in the hospital being treated for liver problems. Doctors warned his mother, Judy, that he might not survive.

But he pulled through. “Gabrielle wouldn’t want me to die,” he said.

Both he and his ex-wife said they were sober now. He sleeps in a recliner in his parents’ living room. His mother sleeps on the couch so she can watch him and talk him through darker moments.

Ellen and Chad Kennedy have each retained a personal-injury lawyer, but neither has filed suit against the driver, the two contracting companies or Amazon.

Chad Kennedy and his father, Brian, were sitting on the porch one evening last May when the conversation turned to Amazon’s pursuit of speed — and customers’ demand for it.

“So what if the packages take three days instead of two?” Brian Kennedy said. “You know, it ain’t that big a deal to me. But maybe some people, if they don’t get it in two days, they raise Cain.”

His son agreed. “These big powerhouse companies like Amazon should realize what the impact is when they’re speeding up deliveries,” Chad Kennedy said. They should see “the tragic families that have lost somebody or have gotten hurt from somebody’s negligence,” he said, “just because they want a package a day before another service.”

Do you have information about Amazon you’d like to share? Email patricia.callahan@propublica.org. Here’s how to send tips and documents to ProPublica securely.

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[l] at 9/4/19 11:59pm

by Patricia Callahan

On the corner of 28th Street and Drake Avenue in Chicago’s Little Village neighborhood, the family of Telesfora Escamilla created a shrine for their mother, decorating a tree with silk flowers, ribbons and Our Lady of Guadalupe candles.

Escamilla was in a crosswalk at that intersection three days before Christmas in 2016 when a driver delivering Amazon packages in a cargo van turned left and hit her. She died that day, two weeks shy of her 85th birthday.

The delivery driver, who was working for an Amazon contractor at the height of the holiday rush, was indicted on a felony charge of reckless homicide but was acquitted in a bench trial this summer. Escamilla’s children are suing Amazon, the contractor and the driver. The driver declined to comment; the contractor did not return calls seeking comment; and Amazon declined to comment.

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A proud member of the steelworkers union, Escamilla spent three decades as a machine operator at Crown, Cork & Seal. She and her husband raised their six children in the neighborhood.

Escamilla never drove. She walked everywhere — to feed the birds, to the grocery store, to daily Mass. She had her own pew at St. Agnes of Bohemia Catholic Church.

“She was the neighborhood’s mother,” Joann Escamilla, her daughter-in-law, said. “She even talked to the gangbangers, saying, ‘This is not the life for you.’”

At 84, Escamilla still raked leaves and shoveled snow. And she loved to dance.

“She put the records on all the time, the Spanish records, and whoever’s there, she would dance with that person,” her daughter Irma said. “Whoever’s in the area, she’ll grab them and dance with them.”

When Escamilla’s husband of 57 years died in 2010, her son Bernard said he asked his mother to move in with his family.

The answer was “no,” Bernard Escamilla said. “She wanted to stay there.”

His sister Eleanore chimed in. “We both asked her. No, she was comfortable with the neighborhood … There was not one person she didn’t know in that area.”

Even a witness to the crash cried on the stand as he testified at the delivery driver’s criminal trial. When he was younger, the witness recalled how Escamilla would tell him to go inside and stay out of trouble.

The day of the crash, Escamilla’s daughter Gloria, who lives in Houston, spoke to her on the phone at 7 a.m., as she always did. Her mother was excited about Christmas, talking about serving Chickies’ Italian beef and her favorite tamales.

Escamilla held together four generations of her family. Without her, they feel adrift. Christmas isn’t a festive occasion any more, her children said.

“Now it’s not a holiday,” Gloria Escamilla said. “It will never be the same.”

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[l] at 9/4/19 11:59pm

by Patricia Callahan

After his mother was killed by a driver delivering Amazon packages, Tyler Hayes wrote a letter to Amazon CEO Jeff Bezos.

Stacey Hayes Curry, who was hit and killed by a driver working for an Amazon contractor. (Courtesy of Tyler Hayes)

Hayes asked Bezos to come up with safer ways for Amazon’s contractors to deliver packages so that no other family would experience the devastation his has.

“Amazon is a leading company in so many areas, but is repeatedly cited for putting its workers at risk from over working, which has put others at risk as well,” Hayes wrote. “Maybe it was simply carelessness by one driver at one time that forever impacted my life, but I don’t think so. I think this attitude of reckless speed stems from the top and trickles down.”

Hayes couldn’t bring himself to send it.

Stacey Hayes Curry, 61, was a legal secretary at a San Diego law firm. On a clear June day last year, she was coming back from a walk in the office park where she worked when a delivery driver for an Amazon contractor ran her over with his rented cargo van.

He told police he had just dropped off a package at one building in the office park and was on his way to another. He thought he had hit a speed bump and didn’t realize he had run over a pedestrian until he saw Curry on the street in his rearview mirror, police records show.

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In reconstructing the crash at the scene that day, San Diego police noted that the music playing in the van was so loud they had to turn it down, and that there were no visual obstructions that would have prevented him from seeing Curry clearly.

“I just don’t know how the hell she got there,” police said the driver told them. The officer who reconstructed the crash added, “This statement alone tells me he was never paying attention to what was in front of him.”

The driver pleaded guilty to a misdemeanor charge of vehicular manslaughter, according to the San Diego City Attorney’s Office.

Curry’s family settled a claim with the contractor’s insurer but did not sue Amazon, Hayes said. Efforts to reach the driver were unsuccessful; the contractor did not return calls seeking comment; and Amazon declined to comment.

Curry had raised two children as a single mom. She remarried in 2000 and was talking about retiring. She was devoted to her two grandchildren.

“Never once did I feel unloved or unappreciated,” Hayes said in a eulogy for his mother. “She loved me more than I ever would have asked her to. I couldn’t be more proud of who she was and how she sacrificed everything for me and my sister.”

Curry also helped her 93-year-old mother live independently, doing her grocery shopping and making sure they didn’t miss their beloved San Diego Padres games on TV. Curry called her mother every day and took her out to lunch after church on Sundays, said her brother, Tim Hauck.

“She was a real devoted daughter,” Hauck said, adding that their mother has noticeably declined since Curry’s death.

Here’s the Letter:

On June 15, 2018 my mom was hit and run over by a delivery truck contracted by Amazon in San Diego. She died on the way to the hospital.

This has devastated my family as you might imagine. My mom was a wonderful, hardworking woman who is missed by many.

I’m writing to advocate for Amazon putting more time and resources into its workforce safety. Not just those first-party employees, but those contracted out in the last-mile efforts.

By all accounts my mom’s death was an accident and wasn’t malicious. ... But from police reports there also wasn’t any remorse from the driver. Amazon PR offered a generic statement the day of the accident. But the contracted company did not.

This letter is simply to ask — How can you lead Amazon to innovate around safety? Amazon is a leading company in so many areas, but is repeatedly cited for putting its workers at risk from over working, which has put others at risk as well.

Maybe it was simply carelessness by one driver at one time that forever impacted my life, but I don’t think so. I think this attitude of reckless speed stems from the top and trickles down. There are plenty of reports of this over the years, from employees not being able to take bathroom breaks to drivers taking on too many deliveries and driving dangerously.

I truly hope Amazon can right the ship it’s charting on employee safety and how it conveys incentives to companies it contracts. Amazon’s worker safety ultimately impacts us all and the pain from this accident is one I hope no one else has to experience.

— Tyler Hayes

As of 9/15/19 9:26am. Last new 9/13/19 4:24pm.

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