SEC investigations will place 

more emphasis on individuals

Nikki Kahn/The Washington Post - Mary Jo White, chair of the Securities and Exchange Commission, is focusing the agency’s enforcement program on the pursuit of individuals, not just companies.

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By Dina ElBoghdady, Published: September 26 

Wall Street’s top cop said Thursday that her agency is sharpening its focus on individual wrongdoers and making a “subtle shift” in the way it pursues them.

Securities and Exchange Commission Chairman Mary Jo White said she has asked her enforcement staff to start probes, when possible, by first taking a hard look at the people suspected of misdeeds within a company, and not just the company itself.

“I want to be sure we are looking first at the individual conduct and working out to the entity, rather than starting with the entity as a whole and working in,” White said at a conference of the Council of Institutional Investors in Chicago. “It is a subtle shift, but one that could bring more individuals into enforcement cases.”

In the wake of the financial crisis, the SEC has repeatedly come under attack for failing to hold enough high-profile executives accountable for their roles in sinking the global economy. Since joining the agency in April, White has pledged to flex the SEC’s muscle, a message she reinforced Thursday.

The speech was one of the most thorough public statements White has made about the agency’s agenda under her watch, and it touched on several SEC priorities, including more robust monitoring of the financial markets and speedy implementation of the many regulations demanded by Congress in recent years.

But White’s most forceful statements were about the enforcement arena.  The former federal prosecutor said the agency should not shy away from tough cases, ignore smaller ones or cut off any legal avenues when it detects wrongdoing — even if that means bringing cases of negligence instead of more serious fraud charges.

“If we do not have the evidence to bring a case charging intentional wrongdoing, then bring the negligence case that does not require intent,” White said.

Although the SEC pursues only civil cases, and therefore cannot put executives behind bars, the agency should impose meaningful penalties on wrongdoers that make “companies and the industry sit up and take notice of what our expectations are,” White said.

Earlier this year, White announced that the agency would start demanding admissions of wrongdoing in certain types of cases — a major departure from a previous policy that routinely allowed defendants to settle cases without admitting or denying liability. White said Thursday that she expects the new approach to lead to more trials.

“We recognize that we may see more financial firms that say, ‘We’ll see you in court,’ ” she said. “But that will not deter us. The SEC has a well-established record of winning when we go to trial.”

Soon after White joined the SEC, the agency went after one of its most high-profile targets when it charged hedge-fund billionaire Steven A. Cohen with ignoring “red flags” indicating that two of his employees engaged in insider trading.

Last month, the SEC won a huge trial victory when a federal jury found former Goldman Sachs executive Fabrice Tourre liable for duping investors about a shoddy mortgage deal, handing the SEC a major win in one of the few cases to emerge from the financial crisis.  However, some critics downplayed the victory, faulting the SEC for going after a mid-level trader instead of his higher-level Goldman bosses.

A similar complaint arose this month after JPMorgan Chase agreed to pay the SEC $200 million — one of the largest SEC penalties ever — as part of a broader $920 million settlement with federal regulators involving the bank’s handling of the disastrous “London Whale” trading losses. As part of the settlement, the bank admitted wrongdoing. But none of the bank’s senior managers were named in the SEC order.      

Looking to block Obamacare, the GOP is a party in search of a strategy

Win McNamee/Getty Images - Speaker of the House John Boehner speaks at a news conference at the U.S. Capitol Sept. 26, 2013 in Washington, D.C. Also pictured are (L-R) House Majority Whip Kevin McCarthy (R-Calif.) and House Majority Leader Eric Cantor (R-Va.).

By Dan Balz, Published: September 26 

Congressional Republicans have become a party of grievances in search of a strategy.  Their first grievance is with President Obama’s Affordable Care Act, the single most unifying issue for a party that has been showing signs of divisions all year. Rank-and-file Republicans, especially those who are aligned with the tea party movement, despise the new health-care law. Their anger has welled up to force GOP leaders to respond with ever-riskier strategies to delay, defund or in some other way disrupt the imminent implementation of the legislation.

Their second grievance is with Obama, and his steadfast resistance to negotiate with them on any aspect of the health-care law. The president may unilaterally decide to delay this or that part of the measure, as he did again on Thursday with a small portion of the implementation plan. But he doesn’t want Republicans to touch it. Each time he makes a change, his unwillingness to engage only infuriates them more.

The antagonism between Obama and the Republicans was on full display Thursday. House GOP leaders went before the cameras to offer their latest ideas on funding the government, defunding or delaying Obamacare, and dealing with the day next month when the government is set to run out of borrowing authority.

Suddenly it seemed like the summer of 2011 on steroids. House Speaker John A. Boehner (R-Ohio) and others seemed to up the ante again in their quest to stop Obamacare and to force the president to yield. Not only did they continue on a path that could lead to a partial government shutdown on Tuesday, they also signaled that they are ready for another confrontation in mid-October over the debt ceiling, with a list of demands for the president.

An hour or so later, Obama responded at an appearance at Prince George’s Community College in Largo. Rather than trying to tamp down on partisan rhetoric or lower temperatures, he did the opposite, repeatedly waving red flags at the Republicans.

He taunted them and ridiculed them. He said they are obsessed with his health-care law and described some of their objections and characterizations as “crazy” talk. “The closer we get [to implementation], the more desperate they get,” he said. “I mean, over the last few weeks the rhetoric has just been cranked up to a place I’ve never seen before.” 

He questioned Republicans’ real motivation in seeking to stop it, saying they are more worried about the possibility that it might work than they are by their assertion that it could wreck the country. “If it was as bad as they said it was going to be, then they could just go ahead and let it happen and then everybody would hate it so much, and then everybody would vote to repeal it, and that would be the end of it,” he said. “So what is it that they’re so scared about?”

Obama also was defiant in reasserting that he will not negotiate over raising the federal debt ceiling, as he had told Boehner in a recent telephone call. He said he would not give in to “blackmail” on issues that he said have nothing to do with the budget. “I will not negotiate on anything when it comes to the full faith and credit of the United States of America,” he said to applause. “We’re not going to submit to this kind of total irresponsibility.”

Then on Thursday morning, Boehner signaled a double-barreled approach: continuing the fight over the bill to keep the government funded and to defund Obamacare while moving forward on a debt ceiling measure that included various other proposals, such as delaying Obamacare, putting tax reform on a fast track and building the Keystone XL oil pipeline.

 

Moving quickly on the debt ceiling was aimed in part at creating wiggle room for the final stages of the battle over funding the government or, failing that, entering a partial shutdown. What was clear was that House leaders continue to try to calibrate how much leeway they have, given the insistence and persistence of the most conservative elements of their conference.

Republicans point to some public polling as evidence that they can prevail in a showdown with Obama over the debt ceiling. A Bloomberg News poll showed that about six in 10 Americans believe that because Congress lacks discipline, it’s better to include spending cuts on a bill to raise the borrowing limit, rather than simply pass a clean version of the measure.

Republicans interpret that finding and conclude that Obama will be viewed as the unreasonable partner if there is a default. Perhaps. Last time, both sides ended up with debris on them when the public turned on Washington’s dysfunctional climate. That might be the best Republicans can hope for — but are they willing to take the government over a cliff to test it?

Republicans clearly lack the votes to win the first battle that will play out through the weekend. Whether they have the will and the unity to take the debt ceiling issue to the brink remains unclear. Right now they are scrambling by the hour, with no clear road map to guide them.

JPMorgan chief meets U.S. Atty General Holder in bid for deal to end probes, and to avoid criminal charges

We didn't do anything wrong, but we'll give you $11,000,000,000.00 

(that's billion with a B) to keep my sorry ass out of jail.

Gary Cameron/Reuters - JP Morgan chief executive Jamie Dimon leaves the Justice Department after meeting with Attorney General Eric H. Holder Jr. Dimon and Holder met Thursday morning as the nation’s biggest bank attempts to end federal and state investigations into its liability for selling shoddy mortgage securities.

By Danielle Douglas and Sari Horwitz, E-mail the writers

The sage of Wall Street journeyed to Washington on Thursday, but Jamie Dimon’s visit was unlike any the JPMorgan Chase chief has made before.  Dimon sought a meeting with Attorney General Eric H. Holder Jr. in an urgent bid to dispose of multiple government investigations into the bank’s conduct leading up to the financial crisis — and avoid criminal charges. The deal that Dimon discussed with Holder would involve paying the government at least $11 billion, the biggest settlement a single company has ever undertaken, according to several people familiar with the negotiations.

It would also potentially pave the way for other giant banks to reckon with Washington for their roles in the near-collapse of the financial system five years ago. While it would be a historic amount, the fine would still represent a sliver of the damage wrought by the bank for selling mortgage securities that it allegedly knew were worthless.

Dimon, 57, the most prominent of all the Wall Street chieftains, was once mentioned as a possible candidate for Treasury secretary, but in the past year he has faced embarrassing setbacks. In addition to grappling with various government probes, Dimon recently survived a challenge to his leadership after acknowledging a $6.2 billion loss by a JPMorgan trader known as the “London Whale.”

For Holder, 62, meanwhile, a landmark settlement with JPMorgan could help quiet criticism that the Justice Department has failed to hold Wall Street accountable for sparking the housing market’s crash and the ensuing recession. Holder was criticized by lawmakers and consumer advocates this year for saying that some banks had become too big to prosecute.

Holder has taken a direct hand in the negotiations and, in an unusual move, held a 50-minute meeting with Dimon on Thursday. The meeting was “civil,” according to a person familiar with the negotiations, but the talks could still fall apart.

The discussion centered partly on whether the bank could avoid criminal prosecution if it paid the fine and whether it would have to admit guilt. Asked about the negotiations in an unrelated news conference, Holder acknowledged the meeting but snapped at a reporter who suggested that “prison time” was not part of the talks. “You weren’t in the room when I said I was talking to them,” Holder said.

An $11 billion fine would be the largest by far imposed by Justice, far above the $3 billion paid by GlaxoSmithKline in 2011 for illegally pushing antidepressants on consumers. And a person familiar with the matter said the $11 billion represented “a floor” for what JPMorgan would ultimately have to pay to wipe away a host of probes into its mortgage business.

JPMorgan, which declined to comment, is expected to submit another settlement offer soon.
Even at $11 billion or more, the bank would be paying just a fraction of the damage it wreaked on mortgage investors, government agencies and homeowners. And a deal might ensure that no senior executives go to jail, which some experts say would let Wall Street avoid full responsibility. 

 

Finance “is the only field in America where you can commit fraud with impunity and even after you get caught, you can buy your way out of it. And not with your money, mind you, but with shareholders’ money,” said William Black, a former bank regulator who teaches law at the University of Missouri at Kansas City.

 Investors have welcomed the negotiations, which intensified this week, sending the firm’s stock up.

“JPMorgan realizes that the market wants it to clean this mess up. And Jamie Dimon, for all of his faults, is one heck of a smart businessman. He wants to end this tsunami of litigation,” said securities lawyer Andrew Stoltmann.

A resolution with Justice would reduce but not end the legal headaches at JPMorgan. There are ongoing federal probes into the bank’s debt-collection pr

But much of JPMorgan’s legal trouble stems from its mortgage business, which mushroomed through 2008 acquisitions of Bear Stearns and Washington Mutual.

People familiar with the Justice negotiations said a primary factor driving the talks is a lawsuit brought by the Federal Housing Finance Agency over mortgage securities sold by Bear Stearns and Washington Mutual. The securities in contention were bought by mortgage finance companies Fannie Mae and Freddie Mac, which are overseen by the FHFA and cost taxpayers $188 billion to save.

Negotiations, which have been sporadic over the past several weeks, restarted in earnest Monday as federal prosecutors in California prepared to announce civil charges against JPMorgan over the sale of mortgage-backed securities between 2005 and 2007, said the people, who were not authorized to speak publicly.

Facing another lawsuit, JPMorgan returned to the table with an offer of more than $3 billion. But Holder personally rejected the offer, the people said. It is rare for the attorney general to meet with the chief executive of a corporation under investigation, but much is at stake in this case, including Holder’s reputation.

There has been speculation that Holder may step down by the end of the year, and pulling off this record settlement would be a significant accomplishment. Justice has levied multimillion-dollar fines against big banks, including HSBC and Barclays, but to lawmakers and consumer advocates, those penalties are tantamount to a slap on the wrist.

“If I was in [Holder’s] position, I would be concerned about my legacy,” said John C. Coffee Jr., a professor of securities law at Columbia Law School. “There’s been a lot of criticism of officials in Justice being much too soft, timid.”

A sticking point for JPMorgan is whether it will be forced to admit guilt as part of the settlement with Justice, a move that could endanger its defense against similar private litigation.

The bank admitted wrongdoing in a $200 million settlement with the Securities and Exchange Commission last week over its handling of the “London Whale” trading losses. As significant a victory as the admission was for the agency, legal experts said it was a carefully crafted acknowledgment that’s unlikely to harm JPMorgan.

“Justice could craft an admission of wrongdoing that is not an admission of liability,” Coffee said. “You can say we should have been more careful or diligent, but it’s not the same thing as saying we packaged a toxic portfolio and knowingly sold it to suckers.”

Dimon may still be reluctant to confess to misdeeds rooted in the failings of Bear Stearns, a company that JPMorgan bought at the behest of the government.

When New York Attorney General Eric Schneiderman sued JPMorgan in October, alleging the “fraudulent and deceptive” sale of mortgage securities created by Bear Stearns, Dimon vowed to contest the allegations. Now that case may be swept up into the bank’s deal with Justice.

For the venerable JPMorgan, arguably the big bank that emerged strongest from the crisis, to even consider paying $11 billion to the government shows that the bank is beleaguered, analysts say. “JPMorgan has just north of $20 billion in litigation reserves; $11 billion is a significant hit given the fact it still has . . . a large litany of further liability exposure,” said Joshua Rosner, managing director of the research firm Graham Fisher & Co.

He added: “I don’t know how they can get a deal to work that satisfies JPMorgan’s desire to have a comprehensive settlement and the government’s desire to get a large number.”
 

Underpaid 83-Year-Old Professor Died Trying to Make Ends Meet by Working Night Shift at Eat an' Save

The sad financial straits of Margaret Mary Vojtko is the latest tragic example of how adjunct professors are mistreated.

On Sept. 1, Margaret Mary Vojtko, an adjunct professor who had taught French at Duquesne University for 25 years, passed away at the age of 83. She died as the result of a massive heart attack she suffered two weeks before. As it turned out, I may have been the last person she talked to.

On Aug. 16, I received a call from a very upset Margaret Mary. She told me that she was under an incredible amount of stress. She was receiving radiation therapy for the cancer that had just returned to her, she was living nearly homeless because she could not afford the upkeep on her home, which was literally falling in on itself, and now, she explained, she had received another indignity -- a letter from Adult Protective Services telling her that someone had referred her case to them saying that she needed assistance in taking care of herself. The letter said that if she did not meet with the caseworker the following Monday, her case would be turned over to Orphans' Court.

For a proud professional like Margaret Mary, this was the last straw; she was mortified. She begged me to call Adult Protective Services and tell them to leave her alone, that she could take care of herself and did not need their help. I agreed to. Sadly, a couple of hours later, she was found on her front lawn, unconscious from a heart attack. She never regained consciousness.

Meanwhile, I called Adult Protective Services right after talking to Margaret Mary, and I explained the situation. I said that she had just been let go from her job as a professor at Duquesne, that she was given no severance or retirement benefits, and that the reason she was having trouble taking care of herself was because she was living in extreme poverty. The caseworker paused and asked with incredulity, "She was a professor?" I said yes. The case- worker was shocked; this was not the usual type of person for whom she was called in to help.

Of course, what the case-worker didn't understand was that Margaret Mary was an adjunct professor, meaning that, unlike a well-paid tenured professor, Margaret Mary worked on a contract basis from semester to semester, with no job security, no benefits and with a salary of between $3,000 and just over $3,500 per three-credit course. Adjuncts now make up well over 50 percent of the faculty at colleges and universities.

While adjuncts at Duquesne overwhelmingly voted to join the United Steelworkers union a year ago, Duquesne has fought unionization, claiming that it should have a religious exemption. Duquesne has claimed that the unionization of adjuncts like Margaret Mary would somehow interfere with its mission to inculcate Catholic values among its students.

This would be news to Georgetown University -- one of only two Catholic universities to make U.S. News & World Report's list of top 25 universities -- which just recognized its adjunct professors' union, citing the Catholic Church's social justice teachings, which favor labor unions.

As amazing as it sounds, Margaret Mary, a 25-year professor, was not making ends meet. Even during the best of times, when she was teaching three classes a semester and two during the summer, she was not even clearing $25,000 a year, and she received absolutely no health care benefits. Compare this to the salary of Duquesne's president, who makes more than $700,000 with full benefits.

Meanwhile, in the past year, her teaching load had been reduced by the university to one class a semester, which meant she was making well below $10,000 a year. With huge out-of-pocket bills from UPMC Mercy for her cancer treatment, Margaret Mary was left in abject penury. She could no longer keep her electricity on in her home, which became uninhabitable during the winter. She therefore took to working at an Eat 'n Park at night and then trying to catch some sleep during the day at her office at Duquesne. When this was discovered by the university, the police were called in to eject her from her office. Still, despite her cancer and her poverty, she never missed a day of class.

Finally, in the spring, she was let go by the university, which told her she was no longer effective as an instructor -- despite many glowing evaluations from students. She came to me to seek legal help to try to save her job. She said that all she wanted was money to pay her medical bills because Duquesne, which never paid her much to begin with, gave her nothing on her way out the door.

Duquesne knew all about Margaret Mary's plight, for I apprised them of it in two letters. I never received a reply, and Margaret Mary was forced to die saddened, penniless and on the verge of being turned over to Orphan's Court.

The funeral Mass for Margaret Mary, a devout Catholic, was held at Epiphany Church, only a few blocks from Duquesne. The priest who said Mass was from the University of Dayton, another Catholic university and my alma mater. Margaret Mary was laid out in a simple, cardboard casket devoid of any handles for pallbearers -- a sad sight, but an honest symbol of what she had been reduced to by her ostensibly Catholic employer.

Her nephew, who had contacted me about her passing, implored me to make sure that she didn't die in vain. He said that while there was nothing that could be done for Margaret Mary, we had to help the other adjuncts at Duquesne and other universities who were being treated just as she was, and who could end up just like she did. I believe that writing this story is the first step in doing just that.

Daniel Kovalik is senior associate general counsel of the United Steelworkers union and an adjunct professor of law at the University of Pittsburgh. 

THIS IS WHY YOU DON'T HAVE FULL VOTING RIGHTS

D.C. tax office mix-ups put homes in peril

Debbie Cenziper, Michael Sallah, Steven Rich Monday, Sep 9, 2013

District tax officials have made hundreds of mistakes in recent years by counting property owners as delinquent even after they paid their taxes, forcing them to fight for their homes in grueling legal battles that in some cases persisted for years, The Washington Post found.

Since 2007, the D.C. Office of Tax and Revenue put nearly 1,900 owners at risk of foreclosure by imposing liens on their properties and then erroneously selling them to investors at public auctions.

The sales have stunned property owners across the city — many of them elderly and poor — who have scrambled to attend court hearings and plead with city officials to clear their names.

A 48-year-old math teacher paid his taxes in 2007, but the tax office took his $1,400 payment and applied it to the wrong house, crediting an entirely different taxpayer.

A 58-year-old bank employee almost lost her house in 2010 because the tax office mistakenly sent bills and notices to a wooded lot across from a strip shopping center in Virginia — 12 times.

A 69-year-old hat designer was given the wrong payoff amount and ended up in court to save her property, owned by her family since 1943.
Those homeowners found out about the mistakes in time to fight. Ninety-five-year-old Daisy Dolsey, living in a nursing home and struggling with Alzheimer’s, wasn’t so lucky: She lost her $300,000 house over a $44.79 tax debt even after she paid her taxes.

“It really is the stereotype of bad government — it’s appalling,” said Amy Mix, a lawyer for AARP’s Legal Counsel for the Elderly, which has turned up numerous errors in tax lien cases. “It’s not enough people doing their jobs and not enough people caring.”

For more than a century, the District has placed liens on properties when owners failed to pay their taxes, then sold them at auctions. The investors buying the liens charge owners interest and often hefty fees on top of the tax debt and can take the properties through foreclosure if the money is not repaid.

But one in every five liens has been sold by mistake, forcing the tax office to later cancel the sales — and pay hundreds of thousands of dollars to compensate the investors who bought them.

The tax office’s own records show a series of errors, from failing to credit taxpayers for their payments to applying money to the wrong accounts.

One former official, Chester Carr, described the breakdowns inside the agency in recent years: thousands of payments coming into the office that tax officials could not match to the proper accounts. Carr said he feared the tax office was instead declaring taxpayers delinquent and selling the liens at auction.

“People’s properties would be sold erroneously,” said Carr, a former operations manager who left the tax office last year and is now a lead analyst for real estate assessments in Arlington. “Lots of times, they just gathered up the files that were delinquent and said, ‘Here, this is what we’re going to sell.’ ”

Tax office officials defend the program, saying they quickly match payments to the right accounts and have taken steps to cut back on errors, including mailing more notices to homeowners and posting updated payments on the tax office’s Web site.

They blamed many of the canceled liens on property owners, saying they waited too long to settle their bills.

“Canceled or voided sales do not indicate that the tax office made a mistake,” the agency said in a written statement. “In the past, this problem occurred because the property owner made a payment so close to the real property tax sale that the payment could not be processed before the tax sale took place.”

But tax collectors in several of Maryland’s largest counties say they fixed that problem years ago: In Montgomery, Prince George’s and Howard counties, payments post immediately and error rates are down to 1 percent or less, officials said. The District’s rate averaged 21 percent from 2007 to 2012.

“It’s terrible — that’s phenomenally high,” said Stan Willis, the former treasury chief in Prince George’s. “If I had a 20 percent voided rate, golly, I’d be looking at the accuracy of my data and realizing that we had a lot of work.”

Stephen Cordi, the District’s deputy chief financial officer, said the tax office’s errors “have dropped dramatically,” citing only 85 canceled liens in 2012.

But that was still a 7 percent error rate, which followed a 34 percent error rate the year before.

“When is the nightmare going to be over with?” said 64-year-old Carmen Starks, who found herself fighting to save her home even after she paid her taxes.

The tax office took four days to credit her payment in 2010, a delay that triggered an $8.61 interest charge — enough to keep her delinquent and allow a tax lien investor to press to foreclose on her rowhouse in Northwest Washington.

Starks discovered the error. Dolsey did not.

In 2004, the retired seamstress didn’t pay her $406 tax bill, prompting the city to put a lien on her home in Northeast Washington, in a leafy neighborhood with wide front porches and backyard swing sets. In July 2005, the tax office sold the lien at auction.

When relatives found out less than two months later, they paid the city on behalf of Dolsey, who was 88 at the time. Her niece, Deborah Miller, an IRS auditor, said she paid exactly what the tax office told her by phone to bring the account current — $639.47.

But the tax office never lifted the lien, allowing the tax lien purchaser who bought it to press for foreclosure in February 2006. The company was owned by Steven Berman, who was later convicted of rigging tax lien auctions in Maryland.

When his company tacked on $5,600 in legal fees and other costs — 14 times Dolsey’s original tax debt — the family couldn’t pay, and the house was taken by Berman’s company. The company’s law firm, which is run by Berman’s wife, said it was willing to reduce the fees to $3,500. Family members said recently that they could not come up with the money.

In response to questions from The Post, the tax office said Dolsey’s lien remained active because she still had $44.79 left on the books after Miller had paid the tax debt. The agency produced an undated bill showing what officials said she owed at the time. No other records reviewed by The Post, including subsequent bills and account statements, reflect a $44 shortfall.

Miller said she received no notification that the family still owed money and had paid exactly what she was told.

“If I had owed them $40 more, then why didn’t someone tell me?” said Miller, 61. “It’s ridiculous — period.”

Cordi said he couldn’t speak to whether the family was given an accurate payoff amount by the tax office.

“They were $40 short,” he said. “It was properly foreclosed on.”
The family was outraged when it learned from The Post that the $44 shortfall had cost Dolsey the family home of five decades.

“I feel terrible,” said Michael Zimmerman, Dolsey’s nephew. “You pay your taxes. You do the right thing. You’re entitled to honest government that puts you first.”

The tax office, an arm of the D.C. Office of the Chief Financial Officer, has been warned by its own auditors for years about poor record-keeping and a sweeping lack of controls that undermine one of the most important functions in municipal government.

The agency has been overseen for more than a decade by Natwar M. Gandhi, who in February announced his plans to resign amid criticism over the way he managed the agency.

But the blunders in the tax lien program have never come to light.

Of the 9,000 liens sold at auction in the past six years, nearly 1,900 were put up by mistake, risking homes, land and commercial buildings, a Post analysis shows. The total value of the property: more than $900 million.

Year after year, the tax office quietly canceled the liens even as the agency dipped into taxpayer funds to pay more than $840,000 to compensate the purchasers who had bought them, and $730,000 to their lawyers.

But the greatest impact was on homeowners, who were exposed to a program dominated by aggressive purchasers demanding thousands in fees on top of the tax debt — and taking homes when families couldn’t pay.

Nearly 200 liens were picked up by Aeon Financial, a Chicago firm harshly criticized by the District’s attorney general in 2009 for allegedly exploiting families with excessive fees. More than 270 were purchased by companies managed by Berman, who was sentenced in 2010 for rigging tax auctions in a massive criminal case in Maryland.

In many cases, it took the tax office months to cancel the liens, leaving homeowners in legal limbo with their houses on the line.

Starks, who faced losing her house in Northwest Washington, spent more than two years working with lawyers from the Legal Counsel for the Elderly and catching the bus to the courthouse, her bills stuffed in her purse.

She had borrowed $5,094 from a friend to pay her back taxes in 2010. She had no idea that a tax office mistake had kept her delinquent.

“I was feeling good, that everything was taken care of, and I didn’t have anything else to worry about,” she said.

But when a friend dropped her off from noon prayer service two years ago, she found a court summons tacked to the door. “What’s that on your door, sister Starks?” her friend asked.

That’s when Starks discovered the case was still active and that a tax lien purchaser was pushing to take the house in court — and had tacked on $2,663 in legal fees. Her lawyers recently persuaded the tax office to cancel the lien.

“At this age of my life, I shouldn’t have to be concerned about stuff like this,” said Starks, who owns the home free and clear.

The nearly 1,900 liens sold by the tax office were scattered throughout every ward of the city, from condominiums in Northwest to aging rowhouses in Southeast. The majority were sold because agency officials didn’t realize the taxes had been paid before the auction.

There were other problems, too.

For 69-year-old Theresa Banks, a former Sunday school teacher who designs women’s hats, the trouble started in 2007 when she went to the tax office and asked how much she owed on the lot next to her family home. She paid $1,100.

About a year later, she found a sign tacked to the door, showing a lien had been put on her property for unpaid taxes and a purchaser was moving to take the lot through foreclosure. She was terrified: Her family has owned the property since 1943, when the Marshall Heights neighborhood had no running water or paved streets.

With the help of a nonprofit attorney, Banks fought in court, arguing that she had received an incorrect payoff amount, which had left her account deficient.

In 2009, the agency canceled the sale.

Banks, who has hip problems and walks with a cane, said she made at least four trips to court to save her land.

“You’re black. You’re poor. This is the only thing you have to hold onto,” she said.
Carr, the former tax official, said the breakdowns in the office were so extensive that thousands of pieces of mail were returned each year and never re-sent. Carr said he worried that taxpayers weren’t getting their tax statements — let alone warnings that they were delinquent.

“The mail just sat there and sat there,” he said.

Until late last year, the tax office kept a log of returned mail, but it has since lost it, a court document shows.

Carr also said that tax officials have struggled to link payments to the proper accounts, often because taxpayers failed to provide enough information about their properties.

Agency officials said that they have worked to match the payments to the right accounts. “We make every effort to apply payment to the taxpayer account,” the agency said in a prepared response.

But local housing groups said they have been helping homeowners deal with the tax office’s mistakes for years.

“It’s ridiculous,” said Laura Newland, a former Legal Counsel for the Elderly attorney who has worked with hundreds of property owners. “Homeowners are thinking they are going to lose their house — through no fault of their own.”

Jennifer Jenkins contributed to this report. 

 

DISTRICT OF COLUMBIA RESIDENTS ARE ENTITLES TO HONEST GOVERNMENT THAT PUTS THEM FIRST - THAT IS NOT HAPPENING.

What Really Causes Heart Disease?

Forget the “science” that has been drummed into your head for decades. 

Inflammation is the culprit

 

I trained for many years with other prominent physicians labelled “opinion makers.”  Bombarded with scientific literature, continually attending education seminars, we opinion makers insisted heart disease resulted from the simple fact of elevated blood cholesterol.

The only accepted therapy was prescribing medications to lower cholesterol and a diet that severely restricted fat intake. The latter of course we insisted would lower cholesterol and heart disease. Deviations from these recommendations were considered heresy and could quite possibly result in malpractice.

These recommendations are no longer scientifically or morally defensible. The discovery a few years ago that inflammation in the artery wall is the real cause of heart disease is slowly leading to a paradigm shift in how heart disease and other chronic ailments will be treated.

The long-established dietary recommendations have created epidemics of obesity and diabetes, the consequences of which dwarf any historical plague in terms of mortality, human suffering and dire economic consequences.

Despite the fact that 25% of the population takes expensive statin medications and despite the fact we have reduced the fat content of our diets, more Americans will die this year of heart disease than ever before.

Statistics from the American Heart Association show that 75 million Americans currently suffer from heart disease, 20 million have diabetes and 57 million have pre-diabetes. These disorders are affecting younger and younger people in greater numbers every year.

Simply stated, without inflammation being present in the body, there is no way that cholesterol would accumulate in the wall of the blood vessel and cause heart disease and strokes. Without inflammation, cholesterol would move freely throughout the body as nature intended. It is inflammation that causes cholesterol to become trapped.

Inflammation is not complicated — it is quite simply your body’s natural defense to a foreign invader such as a bacteria, toxin or virus. The cycle of inflammation is perfect in how it protects your body from these bacterial and viral invaders. However, if we chronically expose the body to injury by toxins or foods the human body was never designed to process,a condition occurs called chronic inflammation. Chronic inflammation is just as harmful as acute inflammation is beneficial.

What thoughtful person would willfully expose himself repeatedly to foods or other substances that are known to cause injury to the body?  Well,smokers perhaps, but at least they made that choice willfully.

The rest of us have simply followed the recommended mainstream diet that is low in fat and high in polyunsaturated fats and carbohydrates, not knowing we were causing repeated injury to our blood vessels. This repeated injury creates chronic inflammation leading to heart disease, stroke, diabetes and obesity.

Let me repeat that: The injury and inflammation in our blood vessels is caused by the low fat diet recommended for years by mainstream medicine.

What are the biggest culprits of chronic inflammation? Quite simply, they are the overload of simple, highly processed carbohydrates (sugar, flourand all the products made from them) and the excess consumption of omega-6 vegetable oils like soybean, corn and sunflower that are found in many processed foods.

Take a moment to visualize rubbing a stiff brush repeatedly over soft skin until it becomes quite red and nearly bleeding. you kept this up several times a day, every day for five years. If you could tolerate this painful brushing, you would have a bleeding, swollen infected area that became worse with each repeated injury. This is a good way to visualize the inflammatory process that could be going on in your body right now.

Regardless of where the inflammatory process occurs, externally or internally, it is the same. I have peered inside thousands upon thousands of arteries. A diseased artery looks as if someone took a brush and scrubbed repeatedly against its wall. Several times a day, every day, the foods we eat create small injuries compounding into more injuries, causing the body to respond continuously and appropriately with inflammation.

While we savor the tantalizing taste of a sweet roll, our bodies respond alarmingly as if a foreign invader arrived declaring war. Foods loaded with sugars and simple carbohydrates, or processed withomega-6 oils for long shelf life have been the mainstay of the American diet for six decades. These foods have been slowly poisoning everyone.

How does eating a simple sweet roll create a cascade of inflammation to make you sick?

Imagine spilling syrup on your keyboard and you have a visual of what occurs inside the cell. When we consume simple carbohydrates such as sugar, blood sugar rises rapidly. In response, your pancreas secretes insulin whose primary purpose is to drive sugar into each cell where it is stored for energy. If the cell is full and does not need glucose, it is rejected to avoid extra sugar gumming up the works.

When your full cells reject the extra glucose, blood sugar rises producing more insulin and the glucose converts to stored fat.

What does all this have to do with inflammation? Blood sugar is controlled in a very narrow range. Extra sugar molecules attach to a variety of proteins that in turn injure the blood vessel wall. This repeated injury to the blood vessel wall sets off inflammation. When you spike your blood sugar level several times a day, every day, it is exactly like taking sandpaper to the inside of your delicate blood vessels.

Let’s get back to the sweet roll. That innocent looking goody not only contains sugars, it is baked in one of many omega-6 oils such as soybean. Chips and fries are soaked in soybean oil; processed foods are manufactured with omega-6 oils for longer shelf life. While omega-6’s are essential -they are part of every cell membrane controlling what goes in and out of the cell – they must be in the correct balance with omega-3’s.  If the balance shifts by consuming excessive omega-6, the cell membrane produces chemicals called cytokines that directly cause inflammation.

Today’s mainstream American diet has produced an extreme imbalance of these two fats. The ratio of imbalance ranges from 15:1 to as high as 30:1 in favor of omega-6. That’s a tremendous amount of cytokines causing inflammation. In today’s food environment, a 3:1 ratio would be optimal and healthy.

To make matters worse, the excess weight you are carrying from eating these foods creates overloaded fat cells that pour out large quantities of pro-inflammatory chemicals that add to the injury caused by having high blood sugar. The process that began with a sweet roll turns into a vicious cycle over time that creates heart disease, high blood pressure, diabetes and finally, Alzheimer’s disease, as the inflammatory process continues unabated.

There is no escaping the fact that the more we consume prepared and processed foods, the more we trip the inflammation switch little by little each day. The human body cannot process, nor was it designed to consume, foods packed with sugars and soaked in omega-6 oils.

There is but one answer to quieting inflammation, and that is returning to foods closer to their natural state. To build muscle, eat more protein. Choose carbohydrates that are very complex such as colorful fruits and vegetables. 

Cut down on or eliminate inflammation- causing omega-6 fats like corn and soybean oil and the processed foods that are made from them.  One tablespoon of corn oil contains 7,280 mg of omega-6; soybean contains 6,940 mg. Instead, use olive oil or butter from grass-fed beef.   Animal fats contain less than 20% omega-6 and are much less likely to cause inflammation than the supposedly healthy oils labelled polyunsaturated. 

Forget the “science” that has been drummed into your head for decades. The science that saturated fat alone causes heart disease is non-existent. The science that saturated fat raises blood cholesterol is also very weak. Since we now know that cholesterol is not the cause of heart disease, the concern about saturated fat is even more absurd today.

The cholesterol theory led to the no-fat, low-fat recommendations that in turn created the very foods now causing an epidemic of inflammation. Mainstream medicine made a terrible mistake when it advised people to avoid saturated fat in favor of foods high in omega-6 fats. We now have an epidemic of arterial inflammation leading to heart disease and other silent killers.

What you can do is choose whole foods your grandmother served and not those your mom turned to as grocery store aisles filled with manufactured foods. By eliminating inflammatory foods and adding essential nutrients from fresh unprocessed food, you will reverse years of damage in your arteries and throughout your body from consuming the typical American diet.

Dr. Dwight Lundell is the past Chief of Staff and Chief of Surgery at Banner Heart Hospital , Mesa , AZ. His private practice, Cardiac Care Center was in Mesa, AZ. Recently Dr. Lundell left surgery to focus on the nutritional treatment of heart disease. He is the founder of Healthy Humans Foundation that promotes human health with a focus on helping large corporations promote wellness. He is also the author of The Cure for Heart Disease and The Great Cholesterol Lie.

The official news release can be found here: Prevent Disease