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Need a Lyft? Ride-sharing company ‘burning’ through money

+ As Lyft raises $500 million, it is “burning through tens of millions of dollars a month,” losing $127 million in the first half of 2015 on $46.7 million in revenue, according to private fundraising documents obtained by Bloomberg. In a sign of its intense focus on growth in a competitive environment, the ride-sharing company spent $96.1 million on marketing during that period, more than twice its net revenue.

+ Here’s a simple math problem that even my 2nd-grade son should be able to figure out: How many $500 AK-47s can you buy with $500 million? That’s how much oil revenue ISIS takes in every year through its control of lucrative oil fields and the petroleum infrastructure in Iraq, which is five times higher than initial U.S. intelligence estimates, a gross miscalculation that severely underestimated the terror group’s financial health.

+ A Texas Congressman, who’s also second-generation auto dealer, tucked an amendment into the massive transportation bill that passed the House of Representatives last week that helps his family business. The little-noticed provision from Rep. Roger Williams “would allow dealers to rent or loan out vehicles even if they are subject to safety recalls,” reports the Center for Public Integrity’s John Dunbar.

+ The comptroller of financially-strapped Puerto Rico, Yesmín M. Valdivieso Galib, was fined for claiming a homestead tax exemption in FL while living on the island, reports the Centro de Periodismo Investigativo.

This government agency is putting the finances of students in jeopardy

+ It’s a glaring cybersecurity risk that very few people pay attention to: The U.S. Department of Education, which manages more $1 trillion in student loan debt, is putting in jeopardy the finances of students and their parents by not doing more to prevent attacks by hackers. Over a quarter of reported cyber-incidents involving the mishandling of data, including personal information, according to the Government Accountability Office.

+ The Santa Clara Valley Medical Center, which is partly funded by California taxpayers, spent $11 million on hospital equipment that is now missing, reports NBC Bay Area.

+ A former top fundraiser for the University of Georgia, Deborah Dietzler, “abused her position” to skip work and run marathons at taxpayer expense, booking flights and hotels in cities where she wanted to run marathons, according to an investigation by WSB-TV and the Atlanta Journal-Constitution.

+ As part of Essential Air Service, a little-known controversial $246 million government program to support airports in small cities, dozens of commercial flights depart without passengers or with nearly empty loads, reports the News4 I-Team (Washington D.C.).

 

Top Valeant exec in the sights of Congressional investigators

+ He may just have the worst Bond villain name imaginable but Laizer Kornwasser is becoming a poster boy for the burgeoning scandal over Valeant, the drug company under fire for its price increases and relationship with specialty pharmacy, Philidor Rx Services. Kornwasser is the highest-ranking exec at the company to be on the radar of Congressional Democrats investigating Valeant and he’s one of the main characters in the damning report (see below) published a few weeks ago, which noted that he was hired personally by CEO Michael Pearson on the same day that Philidor was incorporated in Delaware.

+ One of the biggest politically active nonprofits in the country was virtually the only supporter of Carolina Rising, the North Carolina group that spent $4.7 million on ads supporting now-Sen. Thom Tillis’ successful run to unseat incumbent Democrat Kay Hagan in 2014, reports the Center for Responsive Politics.

+ Three major universities in Texas – Texas A&M University, the University of Houston and Trinity University – are being investigated by the U.S. Department of Education’s Office for Civil Rights over how they handled allegations of sexual violence on their campuses, according to documents obtained by The Texas Tribune.

+ In a case that highlights how white-collar crime remains a relatively low priority for state prosecutors, a couple implicated in a Ponzi scheme that stole more than $1 million in cash and diamonds from Atlanta victims was released on low bail (and subsequently fled to New York City) because the judge didn’t want to put them in jail for what is considered a property crime, reports Atlanta TV station, 11Alive.

Watch this report from 11Alive:

Where does your state rank when it comes to corruption?

Where does your state rank? Only 3 states scored higher than a D+ in this State Integrity investigation by the Center for Public Integrity, which found that statehouses are rife with secrecy, questionable ethics and conflicts of interest.

+ Railroad companies hauling crude oil and other hazardous liquids through Minnesota still have not fully complied with a state law requiring them to detail their spill response plans, according to documents obtained by 5 EYEWITNESS NEWS.

+ Child molesters, drug dealers and other criminals are increasingly using encryption technology on their phones to hide evidence that police and law enforcement officials say they can no longer access, even with a search warrant, reports Scripps News and the Toronto Star.

+ Donald Trump charges an average $250,000 per speech, commanding the biggest speaking fees of all the presidential candidates, closely followed by Hillary Clinton’s average $235,000 fee.

+ Allegations that Sen. Bob Corker may have engaged in insider trading and made false statements on his financial disclosure forms prompted the Campaign for Accountability to call for an SEC investigation of the powerful lawmaker. Per the group’s release this morning:

“Between 2008 and 2015, Sen. Corker, his wife and daughters made an astonishing 70 trades of stock in the real estate investment giant CBL & Associates Properties – more than triple the number of transactions he made of any other stock. Some of the trades closely preceded company announcements that led to changes in the stock’s price and seemingly resulted in the senator making millions of dollars.”

According to the group’s executive director Anne Weismann, “Sen. Corker’s trades followed a consistent pattern — he bought low and sold high. It beggars belief to suggest these trades – netting the senator and his family millions – were mere coincidences.”

Hedge funds push back against proposal to pause deals when banks fail

+ Hedge funds are pushing back against proposals to keep securities financing agreements – called repos – and securities lending transactions intact for up to 48 hours after a bank fails, reports Bloomberg. Such an effort, which is intended to allow the healthy unwinding of a giant bank without hurting the larger economy, could threaten the investments of hedge fund clients, argues the Managed Funds Association, a lobbying group for that sector.

+ British defense firm Mondial Defence Systems is being probed by the FBI over alleged kickbacks paid to an American citizen to help secure a Pentagon contract to supply troops with bomb-disposal equipment, reports the Independent.

+ Sen. Chuck Grassley (R-Iowa) and 11 other senators are pushing a bill to expand the independence of agency inspector generals and to allow them access to all agency records, in the wake of a recent Justice Department decision that limits such access.

+ Must-read dramatic story by the NYT’s Ian Urbina about the illegal “manning agencies” that trick villagers in the Philippines with false promises of high wages and send them to ships notorious for poor safety and labor records.

Nearly 1,000 cops have lost their badges due to sexual misconduct

+ Nearly 1,000 police officers have lost their badges in recent years due to sexual misconduct, according to a yearlong investigation by the Associated Press. That doesn’t count states such as California and New York, which don’t have a statewide system for keeping records of such dismissals.

+ Prominent U.S. senators plan to investigate large price increases in drugs sold by Valeant Pharmaceuticals, Retrophin, Rodelis Therapeutics and Turing, which made headlines for its move to increase the price of an anti-infection drug from $13.50 to $750 per tablet last month. The senate’s Special Committee on Aging, led by Susan Collins (R-Maine) and Claire McCaskill (D-Missouri) will hold a hearing on the issue on December 9.

+ A predatory debt collector in Minnesota’s manual for employees was a smoking bazooka of abusive and deceptive practices” that included such ploys as threatening people by invoking the IRS, suspending their professional licenses and a sheriff’s sale of their property, according to documents obtained by investigators for the state’s Commerce Department. Tucker, Albin and Associates was hit with a record civil penalty by the department in July.

+ Two members of legendary hip-hop group Wu Tang Clan were once investigated by the FBI over suspicions that Raekwon and RZA had marked Staten Island gangsters Anthony and Harvey Christian for death over alleged robberies of members of their own family, according to newly-released documents obtained by the Staten Island Advance. “The Detectives have documented, in their case files that the WTC is heavily involved in the sale of drugs, illegal guns, weapons possession, murder, car jackings, and other types of violent crimes,” the FBI document read. “It is believed that the [REDACTED] sometimes carry out enforcement actions for the WTC which include beatings, shootings, and murder.”

The billion-dollar boondoggle behind the runaway blimp

+ The 6,000-foot-long multibillion-dollar surveillance blimp that broke loose on Wednesday afternoon and came down in pieces over Pennsylvania represents the last gasp of one of the Pentagon’s more bizarre boondoggles, reports the Intercept. It was one of only two airships in the 18-year, $2.7-billion-dollar Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System, which was once supposed to include 36 blimps to protect the country from cruise missiles.

+ Deutsche Bank is close to settling a regulatory probe into alleged violations of U.S. sanctions laws against Iran and other rogue nations, probably paying about $200 million, reports Bloomberg News.

+ That shocking video of a black high-school student in South Carolina being tossed out of her desk, dragged across the floor and handcuffed is not an isolated case. Across the country, in less-publicized incidents, “thousands of students are also getting arrested, ticketed, interrogated and searched by police officers, often in connection with minor indiscretions or allegations they were disruptive,” reports the Center for Public Integrity. Just yesterday, an Oklahoma City police officer was criminally charged after video emerged of him punching a student in the face.

+ Many of the biggest donors to Republican presidential candidate John Kasich’s super PAC have longstanding business ties to the governor that prompted ethics complaints, which could revive “cronyism concern,” reports Politico’s Isaac Arnsdorf.

 

Judge repudiates explosive testimony that helped undermine Chevron’s $9.5B judgment

+ In case you missed it, this is a must-read: One of the key witnesses who helped Chevron undermine a $9.5 billion judgment it faced in Ecuador for oil contamination in the Amazon jungle is repudiating his prior testimony. Ecuadoran judge Alberto Guerra, who only had $100 to his name in 2011, says that Chevron showered him with perks to win him over, including $326,000, an immigration attorney and a car, once showing him a safe filled with money and telling him, “Look, look, look what’s down there. We have $20,000 there,” according to transcripts obtained by the always-indispensable Courthouse News Service’s Adam Klasfeld.

+ Seven years after the financial crisis put credit-default swaps in the headlines, the secretive circle of banks who control the $14 trillion credit insurance market are being pressured to take on conflicts of interest. At present, firms like Goldman Sachs and JPMorgan, who wrote the CDS rules and buy and sell CDSs, also decide which debtor’s default has triggered a payout of a CDS, reports Bloomberg News’ Nabila Ahmed.

+ The companies in Louisville, Kentucky that are the biggest repeat pollution offenders rarely clean up their act, even in the wake of fines. Local businesses have paid the city over $3.8 million in fines since 2003, but the city still gets multiple failing grades from environmental groups.

+ The government of Myanmar is furthering the genocide of Muslims in the country by stoking fears in townships and planning riots that left hundreds dead in 2012, according to eyewitness and documents obtained by Al-Jazeera.

 

 

EPA to get more aggressive on civil rights reviews after decades of inaction

+ Kudos to the Center for Public Integrity’s Yue Qui and Talia Buford for spurring the Environmental Protection Agency (EPA) to adopt a more aggressive approach to civil rights reviews after their reporting on the agency’s decades of inaction.

+ The rise of family offices, which handle the personal finances of hedge fund managers such as Bill Ackman from within their own firms, is raising concerns since they are more lightly regulated than hedge funds and could bring up conflicts since investments might overlap or collide.

+ Former CIA director Leon Panetta may have crossed ethical lines by revealing details about the classified mission to hunt Osama Bin Laden to the filmmakers behind “Zero Dark Thirty. Among the tidbits in this Vice News story: Top spooks were treated to dinners and hotel stays by screenwriter Mark Boal.

+ Calls to replace Mary Jo White as chair of the Securities and Exchange Commission (SEC) are growing louder and more aggressive. Mobile billboards (the “Dump (Mary Jo) Truck”) are crisscrossing Washington DC this week and more than 115,000 activists have signed a petition and called the White House asking President Obama to replace White, who has many Wall Street connections and has had to recuse herself several times from decision impacting former clients such as JPMorgan.

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The inside story of how a healthcare giant made billions by breaking the law

+ Today’s must-read: The first installment of Steve Brill’s 15-part, 58,000-word investigation of Johnson & Johnson, the drug giant that covered up the dangerous side effects of a powerful anti-psychotic drug, Risperdal, that it was illegally marketing to children and the elderly.

+ The botched rollout of Obamacare was partly due to sloppy work by inadequately trained government employees, who failed to “identify delays and problems that contributed to millions in cost overruns,” according to a new audit by the Centers for Medicare and Medicaid Services’ inspector general. Despite this abysmal record, the much-criticized prime contractor, CGI Federal, still receives huge government contracts (586 contracts and grants worth almost $300 million in FY2015 alone), according to our analysis of government spending records.

+ To the surprise of practically no one, the Navy’s contracting system is “not auditable” – resulting in wasteful spending and inaccurate financial statements – according to a new audit by the Pentagon’s inspector general.

+ Despite the fact that the psychiatric records of infamous serial murderess Amy Archer Gilligan (whose story was told in the movie “Arsenic and Old Lace”) are over 50 years old, the Connecticut Supreme Court ruled this week that the documents should not be released and remain confidential.