FROM: U.S. EDUCATION DEPARTMENT
Obama Administration Takes Action to Protect Americans from Predatory, Poor-Performing Career Colleges
New 'gainful employment' proposal targets training programs that saddle students with debt but provide few opportunities for success.
The Obama Administration announced today new steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment—or risk losing access to taxpayer-funded federal student aid.
The proposed regulations released by the U.S. Department of Education will help to strengthen students' options for higher education by giving all career training programs an opportunity to improve, while stopping the flow of federal funding to the lowest-performing ones that fail to do so.
"Higher education should open up doors of opportunity, but students in these low-performing programs often end up worse off than before they enrolled: saddled by debt and with few—if any—options for a career," said U.S. Education Secretary Arne Duncan. "The proposed regulations address growing concerns about unaffordable levels of loan debt for students enrolled in these programs by targeting the lowest-performing programs, while shining a light on best practices and giving all programs an opportunity to improve."
To qualify for federal student aid, the law requires that most for-profit programs and certificate programs at non-profit and public institutions prepare students for gainful employment in a recognized occupation. Some of these programs, whether public, private, or for-profit, empower students to succeed by providing high-quality education and career training. But many of these programs, particularly those at for-profit colleges, are failing to do so—at taxpayers' expense and the cost of students' futures.
Students at for-profit colleges represent only about 13 percent of the total higher education population, but about 31 percent of all student loans and nearly half of all loan defaults. In the most recent data, about 22 percent of student borrowers at for-profit colleges defaulted on their loans within three years, compared to 13 percent of borrowers at public colleges.
Most students at for-profit gainful employment programs who graduated with an associate degree were also left with federal student loan debt, which averaged $23,590, while the majority of students at community colleges did not borrow. And of the for-profit gainful employment programs the Department could analyze and which could be affected by our action today, the majority—72 percent—produced graduates who on average earned less than high school dropouts.
In the Department's proposed regulations, career programs would need to meet key requirements to establish that they sufficiently prepare students for gainful employment.
Institutions must certify that all gainful employment programs meet applicable accreditation requirements and state or federal licensure standards.
All gainful employment programs must pass metrics to continue eligibility in the student financial aid program, including: the estimated annual loan payment of typical graduates does not exceed 20 percent of their discretionary earnings or 8 percent of their total earnings and the default rate for former students does exceed 30 percent.
Additionally, institutions must publicly disclose information about the program costs, debt, and performance of their gainful employment programs so that students can make informed decisions.
Background on the need for action and history of reform
Career training programs offer millions of Americans an opportunity to further their education so that they can pursue their dreams of gaining a well-paying job, owning a home, and providing for their family. These values are the cornerstone of the nation's economy and the gateway to the middle class.
For-profit colleges can receive up to 90 percent of their revenue from taxpayer dollars, with the additional revenue frequently coming from veterans' benefits and private student loans.
These students—including veterans—enrolled to become equipped for the workforce, but often they didn't get what they need. Instead, they found confusing or misleading information, excessive costs, poor quality, low completion rates, and programs that provide training for low-wage occupations or, in some cases, where there simply are no jobs.
Widespread concerns prompted the Obama Administration to embark on a multi-year negotiation with the higher education community over new regulations that ensure students are being prepared for gainful employment. Following last year's court decision, which affirmed the U.S. Department of Education's authority to regulate in this area in order to protect students and taxpayers, the Department undertook new efforts to make career training programs affordable pathways to good jobs.
"Success in career education should be measured by how many students graduate prepared for a good job with sufficient earnings," Duncan said. "While state attorneys general across the country and allies like the Consumer Financial Protection Bureau have taken steps in recent months to stop programs from preying on students, we know more can be done at the local, state, and federal level to stop this abuse."
Details of the New proposal to better prepare students for gainful employment
The proposed regulations follow on public hearings the Department held last year. The affected programs include nearly all programs at for-profit institutions, as well as certificate programs at public and private non-profit institutions, such as community colleges.
The Department has proposed a framework with three components: certification requirements, accountability metrics, and public disclosures. The proposal distinguishes programs that provide affordable training that leads to well-paying jobs from those programs that leave students with poor earnings prospects and relatively high amounts of debt, or which lead to high student loan default rates.
While all programs would have an opportunity to improve under the proposed regulations, those with the worst outcomes—high debt-to-earnings rates or high loan default rates—would lose eligibility to participate in federal student aid programs to protect students and taxpayers.
The proposed rule also increases transparency about gainful employment programs by requiring institutions to tell current and potential students about key outcomes, like average debt levels, earnings, loan repayment rates, loan default rates, and completion and withdrawal rates. This information would help students identify programs that may serve them best and help them make more informed decisions about their educational investment.
Friday, March 14, 2014
THE GENGHIS KHAN "WATER REIGN"
FROM: NATIONAL SCIENCE FOUNDATION
Climate of Genghis Khan's ancient time extends long shadow over Asia of today
Current drought in Mongolia could have serious consequences
Climate was very much on Genghis Khan's side as he expanded his Mongol Empire across northeastern Asia.
That link between Mongolia's climate and its human history echoes down the centuries, according to findings reported in this week's issue of the journal Proceedings of the National Academy of Sciences (PNAS).
But climate may no longer be the boon it was during the latter, wetter part of Genghis Khan's reign. The early years were marked by drought.
Mongolia's current drought conditions could have serious consequences for the Asia region's human and other inhabitants.
The discovery linking ancient and modern history hinges on wood. Trees provide an extensive climate record in their rings.
The tree rings' tales of ebbs and flows in water availability show that Genghis Khan took power during a severe drought, says Amy Hessl, a geographer at West Virginia University and co-author of the paper.
But, the scientists found, the rapid expansion of Genghis Khan's empire coincided with the wettest period in the region during the last millennium.
"Through a careful analysis of tree-ring records spanning eleven centuries, the researchers have provided valuable information about a period of great significance," says Tom Baerwald, a program director for the National Science Foundation's (NSF) Dynamics of Coupled Natural and Human Systems (CNH) Program, which funded the research.
CNH is one of NSF's Science, Engineering and Education for Sustainability (SEES) programs. CNH is supported by NSF's Directorates for Geosciences; Biological Sciences; and Social, Behavioral & Economic Sciences.
"The results also provide insights into the complex interactions of climate, vegetation and human activity in semi-arid regions today," Baerwald says.
Though political realities would also have played into Genghis Khan's power grab, the regional climate at the time appears to have supported his empire's expansion.
The climate provided literal horsepower as armies and their horses fed off the fertile, rain-fed land.
"Such a strong and unified center would have required a concentration of resources that only higher productivity could have sustained, in a land in which extensive pastoral production does not normally provide surplus resources," the paper states.
While the ramifications for past history are significant, so, too, are they for today's.
The scientists believe that human-caused warming may have exacerbated the current drought in central Mongolia, similar to the drought that coincided with Genghis Khan's initial rise to power.
"If future warming overwhelms increased precipitation, episodic 'heat droughts' and their social, economic and political consequences will likely become more common in Mongolia and Inner Asia," according to the paper.
Hessl co-authored the report with scientists Neil Pederson of the Lamont-Doherty Earth Observatory, Nachin Baatarbileg of the National University of Mongolia, Kevin Anchukaitis of the Woods Hole Oceanographic Institution and Nicola Di Cosmo of the Institute for Advanced Study.
-NSF-
Media Contacts
Cheryl Dybas, NSF
Climate of Genghis Khan's ancient time extends long shadow over Asia of today
Current drought in Mongolia could have serious consequences
Climate was very much on Genghis Khan's side as he expanded his Mongol Empire across northeastern Asia.
That link between Mongolia's climate and its human history echoes down the centuries, according to findings reported in this week's issue of the journal Proceedings of the National Academy of Sciences (PNAS).
But climate may no longer be the boon it was during the latter, wetter part of Genghis Khan's reign. The early years were marked by drought.
Mongolia's current drought conditions could have serious consequences for the Asia region's human and other inhabitants.
The discovery linking ancient and modern history hinges on wood. Trees provide an extensive climate record in their rings.
The tree rings' tales of ebbs and flows in water availability show that Genghis Khan took power during a severe drought, says Amy Hessl, a geographer at West Virginia University and co-author of the paper.
But, the scientists found, the rapid expansion of Genghis Khan's empire coincided with the wettest period in the region during the last millennium.
"Through a careful analysis of tree-ring records spanning eleven centuries, the researchers have provided valuable information about a period of great significance," says Tom Baerwald, a program director for the National Science Foundation's (NSF) Dynamics of Coupled Natural and Human Systems (CNH) Program, which funded the research.
CNH is one of NSF's Science, Engineering and Education for Sustainability (SEES) programs. CNH is supported by NSF's Directorates for Geosciences; Biological Sciences; and Social, Behavioral & Economic Sciences.
"The results also provide insights into the complex interactions of climate, vegetation and human activity in semi-arid regions today," Baerwald says.
Though political realities would also have played into Genghis Khan's power grab, the regional climate at the time appears to have supported his empire's expansion.
The climate provided literal horsepower as armies and their horses fed off the fertile, rain-fed land.
"Such a strong and unified center would have required a concentration of resources that only higher productivity could have sustained, in a land in which extensive pastoral production does not normally provide surplus resources," the paper states.
While the ramifications for past history are significant, so, too, are they for today's.
The scientists believe that human-caused warming may have exacerbated the current drought in central Mongolia, similar to the drought that coincided with Genghis Khan's initial rise to power.
"If future warming overwhelms increased precipitation, episodic 'heat droughts' and their social, economic and political consequences will likely become more common in Mongolia and Inner Asia," according to the paper.
Hessl co-authored the report with scientists Neil Pederson of the Lamont-Doherty Earth Observatory, Nachin Baatarbileg of the National University of Mongolia, Kevin Anchukaitis of the Woods Hole Oceanographic Institution and Nicola Di Cosmo of the Institute for Advanced Study.
-NSF-
Media Contacts
Cheryl Dybas, NSF
BROTHERS FOUND GUILTY OF INSIDER TRADING
FROM: SECURITIES AND EXCHANGE COMMISSION
Jury in Cleveland Finds Brothers Engaged in Insider Trading
The Securities and Exchange Commission has obtained a favorable verdict from a jury in the Northern District of Ohio finding that Andrew W. Jacobs of Lancaster, Pa., and his brother Leslie J. Jacobs II of Cleveland, Ohio, committed insider trading in connection with the December 2009 tender offer for Chattem Inc., a Chattanooga, Tenn.-based distributor of pharmaceutical products.
In its complaint, the SEC alleged that A. Jacobs provided L. Jacobs material nonpublic information about the tender offer and that L. Jacobs then traded on the basis of the information he received from his brother. A. Jacobs learned of the tender offer in a confidential conversation with his brother-in-law, who at the time was a Chattem executive. The executive, with whom A. Jacobs had been friends since business school, requested that A. Jacobs keep their discussion confidential, and he agreed to do so. Nonetheless, the next day, A. Jacobs called his brother L. Jacobs and told him that Chattem was going to be acquired. A few days later, L. Jacobs purchased 2000 shares of Chattem, and he sold those shares after the public announcement of the acquisition for an illicit profit of $49,457.21.
After a six-day trial, the jury yesterday found in favor of the SEC on the claims under Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder. These provisions prohibit insider trading in connection with a tender offer. The jury found in favor of the defendants on the claims under Sections 10(b) of the Exchange Act and Rule 10b-5 thereunder.
The trial was presided over by U.S. District Judge Solomon Oliver Jr. The court will now decide what remedies are warranted based on the jury’s verdict. In its complaint, the SEC sought permanent injunctions, disgorgement with prejudgment interest, and civil monetary penalties pursuant to Section 21A of the Exchange Act. The SEC also sought an officer and director bar against A. Jacobs, who was a high-level executive of a public company at the time of the tip. The case was tried by Kristin B. Wilhelm and Joshua A. Mayes of the SEC’s Atlanta Regional Office and Stephan J. Schlegelmilch of the SEC’s headquarters in Washington, D.C.
Jury in Cleveland Finds Brothers Engaged in Insider Trading
The Securities and Exchange Commission has obtained a favorable verdict from a jury in the Northern District of Ohio finding that Andrew W. Jacobs of Lancaster, Pa., and his brother Leslie J. Jacobs II of Cleveland, Ohio, committed insider trading in connection with the December 2009 tender offer for Chattem Inc., a Chattanooga, Tenn.-based distributor of pharmaceutical products.
In its complaint, the SEC alleged that A. Jacobs provided L. Jacobs material nonpublic information about the tender offer and that L. Jacobs then traded on the basis of the information he received from his brother. A. Jacobs learned of the tender offer in a confidential conversation with his brother-in-law, who at the time was a Chattem executive. The executive, with whom A. Jacobs had been friends since business school, requested that A. Jacobs keep their discussion confidential, and he agreed to do so. Nonetheless, the next day, A. Jacobs called his brother L. Jacobs and told him that Chattem was going to be acquired. A few days later, L. Jacobs purchased 2000 shares of Chattem, and he sold those shares after the public announcement of the acquisition for an illicit profit of $49,457.21.
After a six-day trial, the jury yesterday found in favor of the SEC on the claims under Section 14(e) of the Securities Exchange Act of 1934 and Rule 14e-3 thereunder. These provisions prohibit insider trading in connection with a tender offer. The jury found in favor of the defendants on the claims under Sections 10(b) of the Exchange Act and Rule 10b-5 thereunder.
The trial was presided over by U.S. District Judge Solomon Oliver Jr. The court will now decide what remedies are warranted based on the jury’s verdict. In its complaint, the SEC sought permanent injunctions, disgorgement with prejudgment interest, and civil monetary penalties pursuant to Section 21A of the Exchange Act. The SEC also sought an officer and director bar against A. Jacobs, who was a high-level executive of a public company at the time of the tip. The case was tried by Kristin B. Wilhelm and Joshua A. Mayes of the SEC’s Atlanta Regional Office and Stephan J. Schlegelmilch of the SEC’s headquarters in Washington, D.C.
WORLD ENGAGEMENT BY CONFLICT AND STABILIZATION OPERATIONS
03/13/2014 07:08 AM EDT
CSO at Two Years: Engaging Around the World
Report
Bureau of Conflict and Stabilization Operations
Washington, DC
March 13, 2014
Breaking Cycles of Violence
The State Department’s Bureau of Conflict and Stabilization Operations (CSO) was created in 2011 to improve the effectiveness and coherence of the U.S. government in conflict situations.
Conflict prevention and crisis response is a vital diplomatic specialty--complementing traditional practices. Focusing on strategically significant countries, CSO believes in taking advantage of the astonishing advances in communications and data gathering and fully realizing the potential of women, young people, and other emerging local leaders. The vast energy generated by expressions of citizen power can move the world toward a brighter tomorrow, if fresh ideas and new alliances steer history toward that promise.
CSO breaks cycles of violence through locally grounded analysis that focuses on a top-priority opportunity to address conflict. When we began, we set three goals:
Make an impact in three or four countries important to the United States.
Build a respected team and trusted partnerships.vellaveve
Be innovative and agile.
By employing tools and expertise to fortify the Department in three areas related to conflict (analysis, strategy, and operations), CSO aims to connect policy and practice. Working with colleagues throughout the State Department and the interagency, CSO strives to forge a common U.S. government understanding of each conflict. The Bureau is now positioned to play a catalytic role as America’s civilian power furthers global peace and prosperity.
Progress in First Four Top-Priority Countries
Kenya is a vital East African ally, and Kenyans and international partners were committed to a peaceful 2013 election. In the previous election season, five years earlier, more than 1,300 people died and 350,000 were displaced. This time Kenyans lost 20 citizens and officials. By mobilizing dozens of apolitical institutions and connecting civil society to the police in new ways, the U.S., its partners, and especially Kenyans, “helped prevent a repeat of the violence we saw five years ago,” Secretary Kerry said.
Bringing the moderate Syrian opposition together and helping them serve the public is a central U.S. objective. Operating from Turkey, CSO has provided opposition activists and local councils with equipment (almost 1,100 recipients), training (more than 1,300 participants), and funding. This assistance has helped Syrians establish 11 independent radio and two TV stations (available to 80 percent of the population), build their resilience under regime and extremist threat, improve their effectiveness and coordination, provide local security, and prepare to serve as democratic leaders and civil administrators. Though the war continues and the regime remains entrenched, many of the opposition councils that we are working with are addressing essential needs.
Honduras has the world’s highest homicide rate, and citizens have lost confidence in their government. CSO has promoted grassroots advocacy and a strategic communications plan to empower civil society groups and encourage government security officials to become more responsive and transparent. Such efforts have helped reduce public fear and shine a light on successful citizen-led efforts to tackle crime. An unprecedented coalition was instrumental in the dismissal of a problematic attorney general and corrupt police, a decline in crime and murder in targeted neighborhoods, and a peaceful election day in November 2013.
In Burma, the challenge is decades of conflict between the government and ethnic minority groups. Creating trust among all Burmese is a priority for U.S. Ambassador Derek Mitchell, and we have helped broaden the constituency for peace, particularly in Kayah State, and strengthen moderate voices in Rakhine State, where animosities between Buddhists and Muslims remain notably high.
Making a Difference in Additional Engagements
In four Central African nations, the United States is determined to end the reign of terror created by Joseph Kony’s Lord’s Resistance Army. Working closely with the host governments and their armed forces, as well as with civil society, the African Union, the UN, the U.S. military, and NGOs, CSO has helped generate significant defections and weaken the LRA. Nigeria, Africa’s most populous country, faces growing violence. As the February 2015 elections approach, the volatile and oil-rich Niger Delta, with its youthful population of 25 million, is a center of concern. With State Department assistance, creative and influential Nigerians have teamed up to mobilize public opinion. Through the dynamic use of an exploding mass media market, they are challenging the narrative that “violence pays” and are promoting non-violent problem-solving between communities and government.
In Bangladesh, home to 180 million people, violence and instability are major problems. The country is struggling to manage a youth bulge, religious-based exclusion, and violent expression with tired political leaders. With the embassy’s guidance, CSO is addressing threats to minority groups.
A new president’s commitment to end the three-decade Casamance conflict in Senegal prompted CSO to deploy a retired ambassador dedicated to helping the government develop and implement a comprehensive peace platform. This has increased public pressure on key actors, spurred negotiations with rebels, enlisted support from the international community, and allowed for safe progress on development projects. A de facto ceasefire has held since late 2012 as negotiations move ahead.
An Emphasis on Analysis, Priorities, and Fast, Adaptable Practice
CSO starts its engagements with joint, rapid, locally-grounded conflict analysis. Data-driven products draw on diverse sources, including diplomatic intelligence and media reports, “big data” platforms, polling, local interviews, and international expertise. Prioritized strategies then target the causes of instability and address high-risk periods such as political transitions and peace negotiations.
Rapid implementation requires host-country partners. CSO seeks to amplify local initiatives by managing nearly $100 million in programs (in FY2013). Working with an embassy, regional bureaus, and others, we use these funds to ground theory in practice.
Real-time monitoring and evaluation enable us to adjust our plans. In Honduras, we saw an important new fiscal initiative get bogged down. In Kenya we should have mobilized already-active religious leaders, youth, civic activists, and police officers earlier. Better anticipation, greater speed, and improved partnership mechanisms are among recurring challenges. So is the need to provide “the right person, in the right place, at the right time,” which is the goal of our new Civilian Response Network.
Finally, communications is central to diplomacy, and CSO is using both traditional media outlets and social media to break cycles of violence in Syria, Honduras, Nigeria, and elsewhere.
In every place CSO works, we count on partners, starting with our colleagues within the State Department and USAID and at the Department of Defense. In Syria, for example, our U.S. partners include the Bureau of Near Eastern Affairs, the Office of Transition Initiatives, the U.S.-Middle East Partnership Initiative, and the Bureau of Democracy, Human Rights and Labor. We rely on allies such as the UK, Denmark, and Canada to support training and other efforts. CSO reaches out to civil society organizations like Sant’Egidio, the Rome-based Catholic lay organization that is at the heart of the campaign to bring a negotiated peace to the Casamance. Host-country partners, such as la Alianza por la Paz y Justicia (Alliance for Peace and Justice) in Honduras, are vital if the initiatives that CSO helps build are to endure. Often, new groups converge to increase their impact, as Champions of Peace did in Kenya.
A Commitment to Improvement
The support our teams have received from more than 20 U.S. ambassadors and their embassies is the best evidence that crisis response and conflict reduction are centerpieces of U.S. diplomacy. Increasingly, colleagues are turning to CSO for assistance in breaking cycles of violence. To build an enduring contributor to U.S. foreign policy, CSO understands that constant learning, close partnerships, and innovation are essential.
Thursday, March 13, 2014
FORMER VA PSYCHIATRIST SENTENCED IN MEDICARE FRAUD CASE
FROM: U.S. JUSTICE DEPARTMENT
Thursday, March 13, 2014
Former Veterans Affairs Psychiatrist Sentenced for Medicare Fraud
A licensed psychiatrist formerly employed by the Department of Veterans Affairs (VA) was sentenced today to serve 18 months in prison for falsely claiming to provide at-home services to Medicare beneficiaries.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Dr. Mikhail L. Presman, 56, of Brooklyn, N.Y., was sentenced by Judge I. Leo Glasser in the Eastern District of New York. Presman was sentenced to serve three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution to Medicare.
According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Presman also submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
The case was investigated by the HHS-OIG, with assistance from the VA Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case was prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant United States Attorney Patricia E. Notopoulos of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Thursday, March 13, 2014
Former Veterans Affairs Psychiatrist Sentenced for Medicare Fraud
A licensed psychiatrist formerly employed by the Department of Veterans Affairs (VA) was sentenced today to serve 18 months in prison for falsely claiming to provide at-home services to Medicare beneficiaries.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Dr. Mikhail L. Presman, 56, of Brooklyn, N.Y., was sentenced by Judge I. Leo Glasser in the Eastern District of New York. Presman was sentenced to serve three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution to Medicare.
According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn. Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated. For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits. Presman also submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
The case was investigated by the HHS-OIG, with assistance from the VA Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case was prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant United States Attorney Patricia E. Notopoulos of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
U.S. DEFENSE DEPARTMENT CONTRACTS FOR MARCH 13, 2014
FROM: U.S. DEFENSE DEPARTMENT
CONTRACTS
NAVY
Exelis Inc., Clifton, N.J., is being awarded a $91,701,414 modification to a previously awarded firm-fixed-price contract (N00019-12-C-0002) to exercise an option for the manufacture and delivery of 42 AN/ALQ-214(V)4 on-board jammer (OBJ) systems. The AN/ALQ-214(V)4/5 is an OBJ component of the integrated defensive electronic counter measures system. It is a self-protection radio frequency (RF) countermeasures system used by Navy F/A-18C/D/E/F strike fighter aircraft against RF guided surface-to-air and air-to-air threats (missiles). Work will be performed in Clifton, N.J. (31 percent); San Jose, Calif. (26 percent); San Diego, Calif. (11 percent); Rancho Cordova, Calif. ( 5 percent); Mountain View, Calif. (4 percent); Hudson, N.H. (2 percent); West Springfield, Mass.(2 percent); and various locations within the United States (19 percent); and is expected to be completed in November 2016. Fiscal 2013 and 2014 aircraft procurement, Navy funds in the amount of $91,701,414 are being obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting.
Cardno TEC-Leidos LLC, Charlottesville, Va., is being awarded a maximum $50,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity architect-engineering contract for range sustainability services for military training range complexes and assets for various locations and environmental planning for National Environmental Policy Act and Executive Order 12114, Environmental Effects Abroad of Major Federal Actions with the preponderance of work involving Navy training range complexes within the Atlantic Fleet area of responsibility (AOR) and may also include work on ranges and installations around the world. The work to be performed provides services of an interdisciplinary team required to support the Tactical Training Theater Assessment and Planning (TAP) Program. The TAP program is intended to ensure the sustainability of Navy training ranges and operating areas to support warfighter readiness around the world. Task order 0001 is being awarded at $10,000 as the minimum guarantee. All work will be performed at various Navy and Marine Corps facilities and other government facilities within the NAVFAC Atlantic AOR including, but not limited to Virginia (50 percent), California (20 percent), Washington (20 percent), and Arizona (10 percent). The term of the contract is not to exceed 60 months with an expected completion date of March 2019. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $10,000 are obligated on this award and will expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website, with five proposals received. The Naval Facilities Engineering Command, Atlantic, Norfolk, Va., is the contracting activity (N62470-14-D-9003).
Lockheed Martin Corp., Baltimore, Md., is being awarded a $22,235,508 modification to previously awarded contract (N00024-11-C-2300) to exercise options for class service efforts and special studies, analyses and reviews for the Littoral Combat Ship (LCS) program. Lockheed Martin will provide engineering and design services as well as affordability efforts to reduce LCS acquisition and lifecycle costs. Work will be performed in Hampton, Va. (32 percent); Marinette, Wis. (27 percent); Moorestown, N.J. (22 percent), and Washington, D.C. (19 percent), and is expected to be completed by March 2015. Fiscal 2013 shipbuilding and conversion, Navy contract funds in the amount of $4,000,000 will be obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.
Honeywell Technology Solutions Inc., Columbia, Md., is being awarded $13,122,763 for time and material task order 0003 under a previously awarded indefinite-delivery/indefinite-quantity contract (M67704-13-D-0020) to support the U.S. Marine Corps, Afghanistan Retrograde and Redeployment Operations/Maintenance/Preservation Packaging and Packing Support. Work will be performed in Afghanistan, and is expected to be completed March 2015. Fiscal 2014 operations and maintenance, Marine Corps funds in the amount of $11,024,637 will be obligated at the time of award. Contract funds in the amount of $6,561,382 will not expire at the end of the current fiscal year. This contract was competitively procured with 19 proposals solicited via the Marine Corps Logistics Support Services Unrestricted Suite-Task Area 9; with eight offers received. The Marine Corps Logistics Command, Albany, Ga., is the contracting activity.
Whiting-Turner Contracting Co., Towson, Md., is being awarded a $12,177,926 modification to increase the maximum dollar value of task order 0009 under a previously awarded firm-fixed-price contract (N40080-10-D-0494) for the design, bid-build repairs to building facades (phase 1) and windows (phase 2) for Rickover Hall at the Naval Support Activity, U.S. Naval Academy, Annapolis, Md. The work to be performed under this modification provides for the replacement of windows and curtain walls, providing temporary facilities and incidental related work. The contractor shall provide all labor, supervision, materials, equipment, tools, parts, supplies, and transportation to perform all work described in the specifications. After award of this modification, the total cumulative task order value will be $17,319,816. Work will be performed in Annapolis, Md., and is expected to be completed by March 17, 2016. Fiscal 2014 restoration and modernization contract funds in the amount of $12,177,926 are being obligated on this award and will expire at the end of the current fiscal year. The Naval Facilities Engineering Command, Washington, Washington, D.C., is the contracting activity.
ARMY
Boh Bros. Construction Co., LLC., New Orleans, La., was awarded a $76,267,513 firm-fixed-price contract for the Southeast Louisiana Urban Flood Control Project, Louisiana Avenue Improvements. Fiscal 2014 other appropriations in the amount of $76,267,513 will be obligated at award. Work is to be performed in New Orleans, La., with an estimated completion date is October 17, 2017. Bids were solicited via the Web with three bids received. The U.S. Army Corps of Engineers – New Orleans District, New Orleans, La., is the contracting activity (W912P8-14-C-0022).
BWAY Corp., Atlanta, Ga., was awarded a $47,207,822 fixed-price with economic-price-adjustment contract for M2A2 ammunition containers. Funding and work performance location will be determined with each order. Estimated completion date is Sept. 30, 2019. Bids were solicited via the web with one received. Army Contracting Command, Rock Island Arsenal, Ill., is the contracting activity (W52P1J-14-D-0006).
Longbow LLC, Orlando, Fla., was awarded a $25,504,554 modification (P00045) to foreign military sales contract W58RGZ-06-C-0134 for initial spares, peculiar ground support equipment, integrated logistics support, management, and production line spares in support of the Royal Saudi Land Forces Aviation Command. Fiscal 2014 other procurement funds in the amount of $25,504,554 were obligated at the time of the award. Estimated completion date is June 30, 2016. Work will be performed in Orlando, Fla. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity.
AIR FORCE
L-3 Communications Integrated Systems, Waco, Texas, has been awarded a $38,000,000 modification (P00009) for an existing firm-fixed-price contract (FA8625-13-C-6597) for C-27J spare parts for the Australian military. The contract modification incorporates purchase of non-long-lead critical parts; this is a modification of a pre-existing undefinitized contract action that purchased long-lead spare parts. The work will be performed at Waco, Texas, and is expected to be completed by March 2015. This modification relates to 100 percent foreign military sales for Australia. Air Force Life Cycle Management Center/WLVK, Wright-Patterson Air Force Base, Ohio, is the contracting activity.
Lockheed Martin Global Inc., Orlando, Fla., has been awarded a $24,000,000 indefinite-delivery/indefinite-quantity contract for training and technology transfer in accordance with security assistance agreements and or security cooperation programs as necessary for international C-130J maintenance training requirements for the Iraqi Air Force. Work will be performed at New Al-Muthana Air Base, Iraq (also known as Baghdad International Airport Complex), and work is expected to be completed by Jan. 31, 2017. This award is a sole-source award and is 100 percent foreign military sales for Iraq. 338 Security Contracting Squadron, Joint Base San Antonio, Randolph Air Force Base, Texas, is the contracting activity (FA3002-14-D-0004).
DEFENSE LOGISTICS AGENCY
Altitude Technologies, doing business as Chinook Medical Gear Inc.*, Durango, Colo., has been awarded a maximum $28,636,252 modification (P00006) exercising the second option period on a one-year base contract (SPM2D0-12-D-0003) with seven one-year option periods for various medical and surgical products. This is a fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract. Location of performance is Colorado with an April 3, 2015 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. Type of appropriation is fiscal 2014 war-stopper funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
CORRECTION: The contract announced March 4, 2014 to Universal Sodexho had the incorrect modification and length of time on the contract. The correct announcement should read:
Universal Sodexho, Tacoma, Wash., has been awarded a maximum $10,800,000 exercising the sixth modification (P00027) on a three-month bridge contract (SPM500-05-D-BP07) with three one-year option periods for maintenance, repair and operations supplies for the Korea Region. This is a firm-fixed-price, indefinite delivery/indefinite quantity contract. Location of performance is Washington with a June 30, 2014 performance completion date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
DEFENSE ADVANCED RESEARCH PROJECTS AGENCY
L-3 Communications Corp., Salt Lake City, Utah, has been awarded a $16,458,470 cost-plus-fixed-fee contract. The work will support the DARPA mobile hotspots program for phases 2 and 3 (if option is exercised). If successful, the phase 2 effort is expected to deliver a solution consisting of radio and router pods for mounting on Shadow unmanned aerial vehicles, with all mobile hotspots subsystems wholly contained within the pods. Work will be performed in Salt Lake City, Utah (73.9%); North Hampton, Mass. (11.7%); Fort Lee, N.J. (4.7%); Malibu, Calif. (3.6%); Nashua, N.H. (1.7%); Guthrie, Okla. (1.8%); Springville, Utah (2.5%). The estimated completion date is March 12, 2015. Fiscal 2013 and 2014 research and development funds are being obligated at time of award. The contracting activity is DARPA, Arlington, Va., (HR0011-14-C-0047).
MISSILE DEFENSE AGENCY
Lockheed Martin Corp., Moorestown, N.J., is being awarded an $8,058,225 modification to previously awarded cost-plus fixed-fee contract (HQ0276-10-C-0003) to provide test support at the Aegis Ashore Missile Defense Test Complex. As a result of this modification, the total contract value will increase from $301,550,229 to $309,608,454. The work will be performed at the Pacific Missile Range Facility, Kekaha, Hawaii. The period of performance is from contract award through Dec. 31, 2015. Fiscal 2014 research, development, test and evaluation funds will be used to incrementally fund this effort. The Missile Defense Agency, Dahlgren, Va., is the contracting activity.
*Small Business
CONTRACTS
NAVY
Exelis Inc., Clifton, N.J., is being awarded a $91,701,414 modification to a previously awarded firm-fixed-price contract (N00019-12-C-0002) to exercise an option for the manufacture and delivery of 42 AN/ALQ-214(V)4 on-board jammer (OBJ) systems. The AN/ALQ-214(V)4/5 is an OBJ component of the integrated defensive electronic counter measures system. It is a self-protection radio frequency (RF) countermeasures system used by Navy F/A-18C/D/E/F strike fighter aircraft against RF guided surface-to-air and air-to-air threats (missiles). Work will be performed in Clifton, N.J. (31 percent); San Jose, Calif. (26 percent); San Diego, Calif. (11 percent); Rancho Cordova, Calif. ( 5 percent); Mountain View, Calif. (4 percent); Hudson, N.H. (2 percent); West Springfield, Mass.(2 percent); and various locations within the United States (19 percent); and is expected to be completed in November 2016. Fiscal 2013 and 2014 aircraft procurement, Navy funds in the amount of $91,701,414 are being obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting.
Cardno TEC-Leidos LLC, Charlottesville, Va., is being awarded a maximum $50,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity architect-engineering contract for range sustainability services for military training range complexes and assets for various locations and environmental planning for National Environmental Policy Act and Executive Order 12114, Environmental Effects Abroad of Major Federal Actions with the preponderance of work involving Navy training range complexes within the Atlantic Fleet area of responsibility (AOR) and may also include work on ranges and installations around the world. The work to be performed provides services of an interdisciplinary team required to support the Tactical Training Theater Assessment and Planning (TAP) Program. The TAP program is intended to ensure the sustainability of Navy training ranges and operating areas to support warfighter readiness around the world. Task order 0001 is being awarded at $10,000 as the minimum guarantee. All work will be performed at various Navy and Marine Corps facilities and other government facilities within the NAVFAC Atlantic AOR including, but not limited to Virginia (50 percent), California (20 percent), Washington (20 percent), and Arizona (10 percent). The term of the contract is not to exceed 60 months with an expected completion date of March 2019. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $10,000 are obligated on this award and will expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website, with five proposals received. The Naval Facilities Engineering Command, Atlantic, Norfolk, Va., is the contracting activity (N62470-14-D-9003).
Lockheed Martin Corp., Baltimore, Md., is being awarded a $22,235,508 modification to previously awarded contract (N00024-11-C-2300) to exercise options for class service efforts and special studies, analyses and reviews for the Littoral Combat Ship (LCS) program. Lockheed Martin will provide engineering and design services as well as affordability efforts to reduce LCS acquisition and lifecycle costs. Work will be performed in Hampton, Va. (32 percent); Marinette, Wis. (27 percent); Moorestown, N.J. (22 percent), and Washington, D.C. (19 percent), and is expected to be completed by March 2015. Fiscal 2013 shipbuilding and conversion, Navy contract funds in the amount of $4,000,000 will be obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.
Honeywell Technology Solutions Inc., Columbia, Md., is being awarded $13,122,763 for time and material task order 0003 under a previously awarded indefinite-delivery/indefinite-quantity contract (M67704-13-D-0020) to support the U.S. Marine Corps, Afghanistan Retrograde and Redeployment Operations/Maintenance/Preservation Packaging and Packing Support. Work will be performed in Afghanistan, and is expected to be completed March 2015. Fiscal 2014 operations and maintenance, Marine Corps funds in the amount of $11,024,637 will be obligated at the time of award. Contract funds in the amount of $6,561,382 will not expire at the end of the current fiscal year. This contract was competitively procured with 19 proposals solicited via the Marine Corps Logistics Support Services Unrestricted Suite-Task Area 9; with eight offers received. The Marine Corps Logistics Command, Albany, Ga., is the contracting activity.
Whiting-Turner Contracting Co., Towson, Md., is being awarded a $12,177,926 modification to increase the maximum dollar value of task order 0009 under a previously awarded firm-fixed-price contract (N40080-10-D-0494) for the design, bid-build repairs to building facades (phase 1) and windows (phase 2) for Rickover Hall at the Naval Support Activity, U.S. Naval Academy, Annapolis, Md. The work to be performed under this modification provides for the replacement of windows and curtain walls, providing temporary facilities and incidental related work. The contractor shall provide all labor, supervision, materials, equipment, tools, parts, supplies, and transportation to perform all work described in the specifications. After award of this modification, the total cumulative task order value will be $17,319,816. Work will be performed in Annapolis, Md., and is expected to be completed by March 17, 2016. Fiscal 2014 restoration and modernization contract funds in the amount of $12,177,926 are being obligated on this award and will expire at the end of the current fiscal year. The Naval Facilities Engineering Command, Washington, Washington, D.C., is the contracting activity.
ARMY
Boh Bros. Construction Co., LLC., New Orleans, La., was awarded a $76,267,513 firm-fixed-price contract for the Southeast Louisiana Urban Flood Control Project, Louisiana Avenue Improvements. Fiscal 2014 other appropriations in the amount of $76,267,513 will be obligated at award. Work is to be performed in New Orleans, La., with an estimated completion date is October 17, 2017. Bids were solicited via the Web with three bids received. The U.S. Army Corps of Engineers – New Orleans District, New Orleans, La., is the contracting activity (W912P8-14-C-0022).
BWAY Corp., Atlanta, Ga., was awarded a $47,207,822 fixed-price with economic-price-adjustment contract for M2A2 ammunition containers. Funding and work performance location will be determined with each order. Estimated completion date is Sept. 30, 2019. Bids were solicited via the web with one received. Army Contracting Command, Rock Island Arsenal, Ill., is the contracting activity (W52P1J-14-D-0006).
Longbow LLC, Orlando, Fla., was awarded a $25,504,554 modification (P00045) to foreign military sales contract W58RGZ-06-C-0134 for initial spares, peculiar ground support equipment, integrated logistics support, management, and production line spares in support of the Royal Saudi Land Forces Aviation Command. Fiscal 2014 other procurement funds in the amount of $25,504,554 were obligated at the time of the award. Estimated completion date is June 30, 2016. Work will be performed in Orlando, Fla. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity.
AIR FORCE
L-3 Communications Integrated Systems, Waco, Texas, has been awarded a $38,000,000 modification (P00009) for an existing firm-fixed-price contract (FA8625-13-C-6597) for C-27J spare parts for the Australian military. The contract modification incorporates purchase of non-long-lead critical parts; this is a modification of a pre-existing undefinitized contract action that purchased long-lead spare parts. The work will be performed at Waco, Texas, and is expected to be completed by March 2015. This modification relates to 100 percent foreign military sales for Australia. Air Force Life Cycle Management Center/WLVK, Wright-Patterson Air Force Base, Ohio, is the contracting activity.
Lockheed Martin Global Inc., Orlando, Fla., has been awarded a $24,000,000 indefinite-delivery/indefinite-quantity contract for training and technology transfer in accordance with security assistance agreements and or security cooperation programs as necessary for international C-130J maintenance training requirements for the Iraqi Air Force. Work will be performed at New Al-Muthana Air Base, Iraq (also known as Baghdad International Airport Complex), and work is expected to be completed by Jan. 31, 2017. This award is a sole-source award and is 100 percent foreign military sales for Iraq. 338 Security Contracting Squadron, Joint Base San Antonio, Randolph Air Force Base, Texas, is the contracting activity (FA3002-14-D-0004).
DEFENSE LOGISTICS AGENCY
Altitude Technologies, doing business as Chinook Medical Gear Inc.*, Durango, Colo., has been awarded a maximum $28,636,252 modification (P00006) exercising the second option period on a one-year base contract (SPM2D0-12-D-0003) with seven one-year option periods for various medical and surgical products. This is a fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract. Location of performance is Colorado with an April 3, 2015 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. Type of appropriation is fiscal 2014 war-stopper funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
CORRECTION: The contract announced March 4, 2014 to Universal Sodexho had the incorrect modification and length of time on the contract. The correct announcement should read:
Universal Sodexho, Tacoma, Wash., has been awarded a maximum $10,800,000 exercising the sixth modification (P00027) on a three-month bridge contract (SPM500-05-D-BP07) with three one-year option periods for maintenance, repair and operations supplies for the Korea Region. This is a firm-fixed-price, indefinite delivery/indefinite quantity contract. Location of performance is Washington with a June 30, 2014 performance completion date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
DEFENSE ADVANCED RESEARCH PROJECTS AGENCY
L-3 Communications Corp., Salt Lake City, Utah, has been awarded a $16,458,470 cost-plus-fixed-fee contract. The work will support the DARPA mobile hotspots program for phases 2 and 3 (if option is exercised). If successful, the phase 2 effort is expected to deliver a solution consisting of radio and router pods for mounting on Shadow unmanned aerial vehicles, with all mobile hotspots subsystems wholly contained within the pods. Work will be performed in Salt Lake City, Utah (73.9%); North Hampton, Mass. (11.7%); Fort Lee, N.J. (4.7%); Malibu, Calif. (3.6%); Nashua, N.H. (1.7%); Guthrie, Okla. (1.8%); Springville, Utah (2.5%). The estimated completion date is March 12, 2015. Fiscal 2013 and 2014 research and development funds are being obligated at time of award. The contracting activity is DARPA, Arlington, Va., (HR0011-14-C-0047).
MISSILE DEFENSE AGENCY
Lockheed Martin Corp., Moorestown, N.J., is being awarded an $8,058,225 modification to previously awarded cost-plus fixed-fee contract (HQ0276-10-C-0003) to provide test support at the Aegis Ashore Missile Defense Test Complex. As a result of this modification, the total contract value will increase from $301,550,229 to $309,608,454. The work will be performed at the Pacific Missile Range Facility, Kekaha, Hawaii. The period of performance is from contract award through Dec. 31, 2015. Fiscal 2014 research, development, test and evaluation funds will be used to incrementally fund this effort. The Missile Defense Agency, Dahlgren, Va., is the contracting activity.
*Small Business
DOJ SEEKS RESTRAINING ORDER STOPPING OHIO FROM EXCESSIVE SECLUSION OF BOYS WITH MENTAL HEALTH NEEDS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, March 12, 2014
Justice Department Seeks Temporary Restraining Order to Stop Ohio Department of Youth Services from Excessively Secluding Boys with Mental Health Needs
Today, the Justice Department sought a federal court order temporarily restraining the Ohio Department of Youth Services (DYS) from unlawfully secluding boys with mental health needs in its juvenile correctional facilities. The requested order would require DYS to abide by safeguards in its use of seclusion until a final ruling on the claims that DYS’ seclusion practices violate the constitutional rights of boys in DYS custody. In conjunction with its request for a temporary restraining order, the department sought to expand its existing complaint regarding the Scioto Juvenile Correctional Facility, to include claims of unlawful seclusion at all of the DYS facilities.
The department’s request for a restraining order detailed the state’s excessive use of seclusion, including the following information:
· In the second half of 2013, the state imposed a total of almost 60,000 hours of seclusion on 229 boys with mental health needs;
· One boy spent 1,964 hours in seclusion over six months; the state gave another boy 21 straight days of seclusion;
· Ten boys at one facility spent over 10 percent of their time in custody in seclusion;
· While secluded, several boys were on suicide watch, had suicidal thoughts or hurt themselves.
“The Ohio Department of Youth Services must stop violating the rights of youth in its custody through unlawful seclusion,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division. “The way in which Ohio uses seclusion to punish youth with mental health needs, victimizes one of the most vulnerable groups in our society.”
“Ohio’s juvenile correctional facilities must comply with the Eighth and 14th Amendments,” said U.S. Attorney Carter Stewart for the Southern District of Ohio. “We will remain vigilant in protecting the constitutional rights of all our citizens, particularly young people and those with mental illness.”
“The facts in this case reveal a serious disregard for the rights of young people with mental health needs in Ohio’s custody,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. “The Ohio Department of Youth Services has a responsibility to ensure the health and safety of these young people, including providing appropriate mental health treatment, so that they can overcome challenging behaviors and return to the community to become successful adults.”
Following an investigation under the Violent Crime Control and Law Enforcement Act of 1994 and the Civil Rights of Institutionalized Persons Act (CRIPA), the Justice Department issued findings in May 2007 detailing significant constitutional deficiencies regarding use of physical force, grievance investigation and processing and use of seclusion. In June 2008, the department entered into a consent decree with the state to correct these deficiencies at the Scioto Juvenile Correctional Facility. However, the recent discovery that DYS continued to unlawfully seclude boys with mental health needs at Scioto Juvenile Correctional Facility and had moved boys to other DYS facilities also using unlawful seclusion prompted the department today to seek a temporary restraining order and an order allowing it to add the remaining DYS facilities to its complaint.
This case is being litigated by attorneys from the Special Litigation Section of the Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Ohio and the U.S. Attorney’s Office for the Northern District of Ohio.
Wednesday, March 12, 2014
Justice Department Seeks Temporary Restraining Order to Stop Ohio Department of Youth Services from Excessively Secluding Boys with Mental Health Needs
Today, the Justice Department sought a federal court order temporarily restraining the Ohio Department of Youth Services (DYS) from unlawfully secluding boys with mental health needs in its juvenile correctional facilities. The requested order would require DYS to abide by safeguards in its use of seclusion until a final ruling on the claims that DYS’ seclusion practices violate the constitutional rights of boys in DYS custody. In conjunction with its request for a temporary restraining order, the department sought to expand its existing complaint regarding the Scioto Juvenile Correctional Facility, to include claims of unlawful seclusion at all of the DYS facilities.
The department’s request for a restraining order detailed the state’s excessive use of seclusion, including the following information:
· In the second half of 2013, the state imposed a total of almost 60,000 hours of seclusion on 229 boys with mental health needs;
· One boy spent 1,964 hours in seclusion over six months; the state gave another boy 21 straight days of seclusion;
· Ten boys at one facility spent over 10 percent of their time in custody in seclusion;
· While secluded, several boys were on suicide watch, had suicidal thoughts or hurt themselves.
“The Ohio Department of Youth Services must stop violating the rights of youth in its custody through unlawful seclusion,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division. “The way in which Ohio uses seclusion to punish youth with mental health needs, victimizes one of the most vulnerable groups in our society.”
“Ohio’s juvenile correctional facilities must comply with the Eighth and 14th Amendments,” said U.S. Attorney Carter Stewart for the Southern District of Ohio. “We will remain vigilant in protecting the constitutional rights of all our citizens, particularly young people and those with mental illness.”
“The facts in this case reveal a serious disregard for the rights of young people with mental health needs in Ohio’s custody,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. “The Ohio Department of Youth Services has a responsibility to ensure the health and safety of these young people, including providing appropriate mental health treatment, so that they can overcome challenging behaviors and return to the community to become successful adults.”
Following an investigation under the Violent Crime Control and Law Enforcement Act of 1994 and the Civil Rights of Institutionalized Persons Act (CRIPA), the Justice Department issued findings in May 2007 detailing significant constitutional deficiencies regarding use of physical force, grievance investigation and processing and use of seclusion. In June 2008, the department entered into a consent decree with the state to correct these deficiencies at the Scioto Juvenile Correctional Facility. However, the recent discovery that DYS continued to unlawfully seclude boys with mental health needs at Scioto Juvenile Correctional Facility and had moved boys to other DYS facilities also using unlawful seclusion prompted the department today to seek a temporary restraining order and an order allowing it to add the remaining DYS facilities to its complaint.
This case is being litigated by attorneys from the Special Litigation Section of the Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Ohio and the U.S. Attorney’s Office for the Northern District of Ohio.
DOD CHIEF WORRIES SEQUESTRATION MAY PUT AT RISK U.S ROLE AS GUARANTOR OF GLOBAL SECURITY
FROM: U.S. DEFENSE DEPARTMENT
By Jim Garamone
American Forces Press Service
WASHINGTON, March 13, 2014 – If sequestration begins again in fiscal year 2016, the U.S. military will not be able to carry out defense strategy, Defense Secretary Chuck Hagel told the House Appropriations Committee’s defense subcommittee this morning.
A return to sequester would put at risk "America's traditional role as a guarantor of global security, and ultimately our own security," Hagel said.
Events in Europe over the past few weeks underscore the need for American involvement, Hagel said. President Barack Obama's fiscal 2015 defense budget request reflects that reality, he added, and sustains U.S. commitments and leadership at a very defining time.
"I believe this budget has to be far more than a set of numbers or just a list of decisions," the secretary said. "It is a statement of values. It's a statement of priorities. It's a statement of our needs. It's a statement of our responsibilities."
The budget request is realistic, Hagel said, and prepares the military to defend the nation at a time of increasing uncertainty throughout the world.
From the troop side, Hagel discussed compensation reform. The department is committed to providing service members fair compensation, he emphasized, "as well as the training and the tools and the edge they will always need to succeed in battle and return home safely.”
"To meet those obligations under constrained budgets, we need some modest adjustments to the growth in pay and benefits,” the secretary said. “All these savings will be reinvested in training and equipping our troops. And there are no proposals to change retirement in this budget."
The Defense Department will continue to recommend pay increases, Hagel said, but they will not be as substantial as in past years. The department will continue subsidizing off-base housing costs, he added, but not at 100 percent, as it is today. DOD will pay about 95 percent, he said, and it will be phased in over the next several years.
The budget request includes a provision to reduce subsidies for military commissaries. "We are not shutting down commissaries," Hagel explained. "We recommend gradually phasing out some subsidies, but only for domestic commissaries that are not in remote areas."
Finally, the secretary said, the Defense Department recommends simplifying and modernizing the three TRICARE military health plan systems by merging them into one, with modest increases in copays and deductibles for military retirees and family members that encourage them more fully to use the most affordable means of care. "Active duty personnel will still receive care that is entirely free," he said.
By Jim Garamone
American Forces Press Service
WASHINGTON, March 13, 2014 – If sequestration begins again in fiscal year 2016, the U.S. military will not be able to carry out defense strategy, Defense Secretary Chuck Hagel told the House Appropriations Committee’s defense subcommittee this morning.
A return to sequester would put at risk "America's traditional role as a guarantor of global security, and ultimately our own security," Hagel said.
Events in Europe over the past few weeks underscore the need for American involvement, Hagel said. President Barack Obama's fiscal 2015 defense budget request reflects that reality, he added, and sustains U.S. commitments and leadership at a very defining time.
"I believe this budget has to be far more than a set of numbers or just a list of decisions," the secretary said. "It is a statement of values. It's a statement of priorities. It's a statement of our needs. It's a statement of our responsibilities."
The budget request is realistic, Hagel said, and prepares the military to defend the nation at a time of increasing uncertainty throughout the world.
From the troop side, Hagel discussed compensation reform. The department is committed to providing service members fair compensation, he emphasized, "as well as the training and the tools and the edge they will always need to succeed in battle and return home safely.”
"To meet those obligations under constrained budgets, we need some modest adjustments to the growth in pay and benefits,” the secretary said. “All these savings will be reinvested in training and equipping our troops. And there are no proposals to change retirement in this budget."
The Defense Department will continue to recommend pay increases, Hagel said, but they will not be as substantial as in past years. The department will continue subsidizing off-base housing costs, he added, but not at 100 percent, as it is today. DOD will pay about 95 percent, he said, and it will be phased in over the next several years.
The budget request includes a provision to reduce subsidies for military commissaries. "We are not shutting down commissaries," Hagel explained. "We recommend gradually phasing out some subsidies, but only for domestic commissaries that are not in remote areas."
Finally, the secretary said, the Defense Department recommends simplifying and modernizing the three TRICARE military health plan systems by merging them into one, with modest increases in copays and deductibles for military retirees and family members that encourage them more fully to use the most affordable means of care. "Active duty personnel will still receive care that is entirely free," he said.
STANDING READY TO DEFEND U.S TERRITORY
FROM: U.S. DEFENSE DEPARTMENT
Northcom, NORAD Stand Ready to Defend Nation, Commander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, March 13, 2014 – The Bipartisan Budget Act of 2013 provided an important reprieve by enabling short-term readiness fixes and selected program buybacks of significant importance, the commander of North American Aerospace Defense Command and U.S. Northern Command said today.
But the challenges posed by sequestration and the Budget Control Act remain, Army Gen. Charles H. Jacoby Jr. told members of the Senate Armed Services Committee.
The Defense Department’s ability to plan and decide strategically and find innovative solutions to complex national security challenges is hampered by the budget uncertainty, he said.
“The recent Bipartisan Budget Act only postpones, but does not eliminate, the risks to our future readiness and ability to meet the missions specified in the defense strategic guidance of 2012,” Jacoby said before calling on Congress to find a permanent fix.
The department made a “hard choice” when it implemented the furlough of civilian employees as a cost-cutting measure, the general said. “This decision compromised morale, unsettled families and caused us to break a bond of trust -- one that is absolutely critical to the accomplishment of our mission,” he added.
Equally unsettling, Jacoby said, is that NORAD's ability to execute its primary mission has been subjected to increased risk due to the degradation of Air Force combat readiness.
“With the vigilance and the support of Air Combat Command and the [U.S. Air Forces in Europe], we've been able to sustain our effective day-to-day posture, but that comes at the cost of overall U.S. Air Force readiness, which continues to hover at 50 percent,” the general said.
Threats to national security are becoming more diffuse and less attributable, the general noted. Ultimately, he said, crises elsewhere in the world can rapidly manifest themselves in the United States and make the nation more vulnerable.
“While we stand constant vigil against asymmetric network threat activities, Russian actions in the Ukraine demonstrate that symmetric threats remain,” Jacoby said. “Al-Qaida and transnational criminal networks continue to adapt, and they do so much more quickly than we do.”
To deter and defeat these globally networked threats, the United States must prioritize its support to its partners in the law enforcement community and the international community, the general said.
And, “tangible evidence of North Korean and Iranian ambitions confirms that a limited ballistic missile threat to the homeland has matured from a theoretical to a practical consideration,” he added.
Northcom and NORAD are working with the Missile Defense Agency to address concerns about the potential for proliferation of these lethal technologies, Jacoby said. Together, the three agencies are investing in a “tailored solution to address the challenges that advancing missile technologies impose on our ballistic missile defense system architecture,” he noted.
Northcom and NORAD are working together to address a variety of other challenges, the general said. As seasonal ice decreases, for example, the Arctic is evolving into an increasingly important strategic issue, he told the Senate panel.
“Therefore, we continue to work with our premier Arctic partner, Canada, and other stakeholders to develop our communications domain awareness infrastructure and presence in order to enable safety, security, and defense in the far north,” Jacoby said.
Maintaining an in-depth defense of the nation requires partnerships with neighboring countries, the general said.
“Our futures are inextricably bound together. And this needs to be a good thing in the security context,” he said. “The stronger and safer they are, the stronger our partnerships, the safer we all are collectively. And this creates our common, competitive security advantage for North America.”
Northcom also stands ready to respond to national security events and to support the federal response to man-made or natural disasters, he said.
“Our challenge remains to not be late to need,” the general said. “The men and women of Northcom and NORAD proudly remain vigilant and ready, as we stand watch over North America and adapt to the uncertainty of the global security environment and fiscal realities.”
Northcom, NORAD Stand Ready to Defend Nation, Commander Says
By Claudette Roulo
American Forces Press Service
WASHINGTON, March 13, 2014 – The Bipartisan Budget Act of 2013 provided an important reprieve by enabling short-term readiness fixes and selected program buybacks of significant importance, the commander of North American Aerospace Defense Command and U.S. Northern Command said today.
But the challenges posed by sequestration and the Budget Control Act remain, Army Gen. Charles H. Jacoby Jr. told members of the Senate Armed Services Committee.
The Defense Department’s ability to plan and decide strategically and find innovative solutions to complex national security challenges is hampered by the budget uncertainty, he said.
“The recent Bipartisan Budget Act only postpones, but does not eliminate, the risks to our future readiness and ability to meet the missions specified in the defense strategic guidance of 2012,” Jacoby said before calling on Congress to find a permanent fix.
The department made a “hard choice” when it implemented the furlough of civilian employees as a cost-cutting measure, the general said. “This decision compromised morale, unsettled families and caused us to break a bond of trust -- one that is absolutely critical to the accomplishment of our mission,” he added.
Equally unsettling, Jacoby said, is that NORAD's ability to execute its primary mission has been subjected to increased risk due to the degradation of Air Force combat readiness.
“With the vigilance and the support of Air Combat Command and the [U.S. Air Forces in Europe], we've been able to sustain our effective day-to-day posture, but that comes at the cost of overall U.S. Air Force readiness, which continues to hover at 50 percent,” the general said.
Threats to national security are becoming more diffuse and less attributable, the general noted. Ultimately, he said, crises elsewhere in the world can rapidly manifest themselves in the United States and make the nation more vulnerable.
“While we stand constant vigil against asymmetric network threat activities, Russian actions in the Ukraine demonstrate that symmetric threats remain,” Jacoby said. “Al-Qaida and transnational criminal networks continue to adapt, and they do so much more quickly than we do.”
To deter and defeat these globally networked threats, the United States must prioritize its support to its partners in the law enforcement community and the international community, the general said.
And, “tangible evidence of North Korean and Iranian ambitions confirms that a limited ballistic missile threat to the homeland has matured from a theoretical to a practical consideration,” he added.
Northcom and NORAD are working with the Missile Defense Agency to address concerns about the potential for proliferation of these lethal technologies, Jacoby said. Together, the three agencies are investing in a “tailored solution to address the challenges that advancing missile technologies impose on our ballistic missile defense system architecture,” he noted.
Northcom and NORAD are working together to address a variety of other challenges, the general said. As seasonal ice decreases, for example, the Arctic is evolving into an increasingly important strategic issue, he told the Senate panel.
“Therefore, we continue to work with our premier Arctic partner, Canada, and other stakeholders to develop our communications domain awareness infrastructure and presence in order to enable safety, security, and defense in the far north,” Jacoby said.
Maintaining an in-depth defense of the nation requires partnerships with neighboring countries, the general said.
“Our futures are inextricably bound together. And this needs to be a good thing in the security context,” he said. “The stronger and safer they are, the stronger our partnerships, the safer we all are collectively. And this creates our common, competitive security advantage for North America.”
Northcom also stands ready to respond to national security events and to support the federal response to man-made or natural disasters, he said.
“Our challenge remains to not be late to need,” the general said. “The men and women of Northcom and NORAD proudly remain vigilant and ready, as we stand watch over North America and adapt to the uncertainty of the global security environment and fiscal realities.”
SEC GETS ASSET FREEZE AGAINST MICROCAP STOCK PROMOTER
FROM: SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze against a promoter behind a platform of affiliated microcap stock promotion websites.
The SEC alleges that John Babikian used AwesomePennyStocks.com and its related site PennyStocksUniverse.com, collectively “APS,” to commit a brand of securities fraud known as “scalping.” The APS websites disseminated e-mails to approximately 700,000 people shortly after 2:30 p.m. Eastern time on the afternoon of Feb. 23, 2012, and recommended the penny stock America West Resources Inc. (AWSRQ). What the e-mails failed to disclose among other things was that Babikian held more than 1.4 million shares of America West stock, which he had already positioned and intended to sell immediately through a Swiss bank. The APS emails immediately triggered massive increases in America West’s share price and trading volume, which Babikian exploited by unloading shares of America West’s stock over the remaining 90 minutes of the trading day for ill-gotten gains of more than $1.9 million.
According to documents filed simultaneously with the SEC’s complaint in federal court in Manhattan, Babikian was actively attempting to liquidate his U.S. assets, which he holds in the names of alter ego front companies. He was seeking to wire the proceeds offshore. The Honorable Paul A. Crotty granted the SEC’s emergency request to preserve these assets by issuing an asset freeze order.
“The Enforcement Division, including its Microcap Fraud Task Force, is intensely focused on the scourge of microcap fraud and is aggressively working to root out microcap fraudsters who make their living by preying on unwitting investors,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.
“By obtaining today’s emergency asset freeze, we have thwarted Babikian’s attempts to liquidate and expatriate assets that should be used to return his ill-gotten gains and pay appropriate penalties,” said Stephen L. Cohen, Associate Director of the SEC’s Division of Enforcement in Washington, D.C.
According to the SEC’s complaint, America West’s stock was both low-priced and thinly traded prior to Babikian’s mass dissemination of the APS e-mails promoting it. America West’s trading volume in 2011 averaged approximately 15,400 shares per day. There was not a single trade in America West stock on Feb. 23, 2012, before the touting e-mails were sent. However, in the immediate aftermath of Babikian’s e-mail launch, more than 7.8 million shares of America West stock was traded in the next 90 minutes as America West’s share price hit an all-time high. Absent the fraudulent touts, Babikian could not have sold more than a few thousand shares at an extremely lower share price.
The court’s order, among other things, freezes Babikian’s assets, temporarily restrains him from further similar misconduct, requires an accounting, prohibits document alteration or destruction, and expedites discovery. Pursuant to the order, the SEC has taken immediate action to freeze Babikian’s U.S. assets, which include the proceeds of the sale of a fractional interest in an airplane that Babikian had been attempting to have wired to an offshore bank, two homes in the Los Angeles area, and agricultural property in Oregon.
The SEC’s investigation, which is continuing, has been led by Andrew R. McFall, John P. Lucas, Robert W. Nesbitt and supervised by J. Lee Buck II. The case will be litigated by Matthew P. Cohen and Michael J. Roessner. The SEC appreciates the assistance of the Quebec Autorité des Marchés Financiers, Financial Industry Regulatory Authority, and OTC Markets Group Inc.
The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze against a promoter behind a platform of affiliated microcap stock promotion websites.
The SEC alleges that John Babikian used AwesomePennyStocks.com and its related site PennyStocksUniverse.com, collectively “APS,” to commit a brand of securities fraud known as “scalping.” The APS websites disseminated e-mails to approximately 700,000 people shortly after 2:30 p.m. Eastern time on the afternoon of Feb. 23, 2012, and recommended the penny stock America West Resources Inc. (AWSRQ). What the e-mails failed to disclose among other things was that Babikian held more than 1.4 million shares of America West stock, which he had already positioned and intended to sell immediately through a Swiss bank. The APS emails immediately triggered massive increases in America West’s share price and trading volume, which Babikian exploited by unloading shares of America West’s stock over the remaining 90 minutes of the trading day for ill-gotten gains of more than $1.9 million.
According to documents filed simultaneously with the SEC’s complaint in federal court in Manhattan, Babikian was actively attempting to liquidate his U.S. assets, which he holds in the names of alter ego front companies. He was seeking to wire the proceeds offshore. The Honorable Paul A. Crotty granted the SEC’s emergency request to preserve these assets by issuing an asset freeze order.
“The Enforcement Division, including its Microcap Fraud Task Force, is intensely focused on the scourge of microcap fraud and is aggressively working to root out microcap fraudsters who make their living by preying on unwitting investors,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.
“By obtaining today’s emergency asset freeze, we have thwarted Babikian’s attempts to liquidate and expatriate assets that should be used to return his ill-gotten gains and pay appropriate penalties,” said Stephen L. Cohen, Associate Director of the SEC’s Division of Enforcement in Washington, D.C.
According to the SEC’s complaint, America West’s stock was both low-priced and thinly traded prior to Babikian’s mass dissemination of the APS e-mails promoting it. America West’s trading volume in 2011 averaged approximately 15,400 shares per day. There was not a single trade in America West stock on Feb. 23, 2012, before the touting e-mails were sent. However, in the immediate aftermath of Babikian’s e-mail launch, more than 7.8 million shares of America West stock was traded in the next 90 minutes as America West’s share price hit an all-time high. Absent the fraudulent touts, Babikian could not have sold more than a few thousand shares at an extremely lower share price.
The court’s order, among other things, freezes Babikian’s assets, temporarily restrains him from further similar misconduct, requires an accounting, prohibits document alteration or destruction, and expedites discovery. Pursuant to the order, the SEC has taken immediate action to freeze Babikian’s U.S. assets, which include the proceeds of the sale of a fractional interest in an airplane that Babikian had been attempting to have wired to an offshore bank, two homes in the Los Angeles area, and agricultural property in Oregon.
The SEC’s investigation, which is continuing, has been led by Andrew R. McFall, John P. Lucas, Robert W. Nesbitt and supervised by J. Lee Buck II. The case will be litigated by Matthew P. Cohen and Michael J. Roessner. The SEC appreciates the assistance of the Quebec Autorité des Marchés Financiers, Financial Industry Regulatory Authority, and OTC Markets Group Inc.
WHITE HOUSE FACT SHEET REGARDING OVERTIME PROTECTIONS
FROM: THE WHITE HOUSE
FACT SHEET: Opportunity for All: Rewarding Hard Work by Strengthening Overtime Protections
After weathering the Great Recession and through five years of hard work and determination, America is creating jobs and rebuilding our economy. But as a result of shifts that have taken hold over more than three decades, too many Americans are working harder than ever just to get by, let alone to get ahead.
President Obama believes that, in America, if you work hard and take responsibility, you should have the opportunity to succeed. That’s why he has pledged to make 2014 a year of action, working with Congress where they’re willing, but using his phone and his pen wherever he can to build real, lasting economic security for the middle class and those working hard to become a part of the middle class.
As part of that effort, today, President Obama is directing the Secretary of Labor to begin the process of addressing overtime pay protections to help make sure millions of workers are paid a fair wage for a hard day's work and rules are simplified for employers and workers alike.
Basic Overtime Protections Have Eroded
The overtime rules that establish the 40-hour workweek, a linchpin of the middle class, have eroded over the years. As a result, millions of salaried workers have been left without the protections of overtime or sometimes even the minimum wage. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay. It’s even possible for employers to pay workers less than the minimum wage per hour.
The overtime and minimum wage rules are set in the Fair Labor Standards Act, originally passed by Congress in 1938, and apply broadly to private-sector workers. However, there are some exceptions to these rules, which the Department of Labor has the authority to define through regulation. One of the most commonly used exemptions is for “executive, administrative and professional” employees, the so-called “white collar” exemption.
Workers who are paid hourly wages or who earn below a certain salary are generally protected by overtime regulations, while those above the threshold who perform executive, professional or administrative duties are not. That threshold has failed to keep up with inflation, only being updated twice in the last 40 years and leaving millions of low-paid, salaried workers without these basic protections. Specifically:
In 1975 the Department of Labor set the threshold below which white collar workers were entitled to overtime pay at $250 per week.
In 2004 that threshold was set at $455 per week (the equivalent of $561 in today's dollars). This is below today’s poverty line for a worker supporting a family of four, and well below 1975 levels in inflation adjusted terms.
Today, only 12 percent of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections (compared with 18 percent in 2004 and 65 percent in 1975). Many of the remaining 88 percent of salaried workers are ineligible for these protections because they fall within the white collar exemptions. Many recognize that these regulations are outdated, which is why states like New York and California have set higher salary thresholds.
At the same time, employers and workers alike have difficulty navigating the existing regulations, and many recognize that the rules should be modernized to better fit today’s economy.
Details of the Presidential Memorandum
Improving the overtime regulations consistent with the Memorandum the President will sign today could benefit millions of people who are working harder but falling further behind. The Fair Labor Standards Act protects over 135 million workers in more than 7.3 million workplaces nationwide.
The Presidential Memorandum instructs the Secretary of Labor to update regulations regarding who qualifies for overtime protection. In so doing, the Secretary shall consider how the regulations could be revised to:
Update existing protections in keeping with the intention of the Fair Labor Standards Act.
Address the changing nature of the American workplace.
Simplify the overtime rules to make them easier for both workers and businesses to understand and apply.
FACT SHEET: Opportunity for All: Rewarding Hard Work by Strengthening Overtime Protections
After weathering the Great Recession and through five years of hard work and determination, America is creating jobs and rebuilding our economy. But as a result of shifts that have taken hold over more than three decades, too many Americans are working harder than ever just to get by, let alone to get ahead.
President Obama believes that, in America, if you work hard and take responsibility, you should have the opportunity to succeed. That’s why he has pledged to make 2014 a year of action, working with Congress where they’re willing, but using his phone and his pen wherever he can to build real, lasting economic security for the middle class and those working hard to become a part of the middle class.
As part of that effort, today, President Obama is directing the Secretary of Labor to begin the process of addressing overtime pay protections to help make sure millions of workers are paid a fair wage for a hard day's work and rules are simplified for employers and workers alike.
Basic Overtime Protections Have Eroded
The overtime rules that establish the 40-hour workweek, a linchpin of the middle class, have eroded over the years. As a result, millions of salaried workers have been left without the protections of overtime or sometimes even the minimum wage. For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay. It’s even possible for employers to pay workers less than the minimum wage per hour.
The overtime and minimum wage rules are set in the Fair Labor Standards Act, originally passed by Congress in 1938, and apply broadly to private-sector workers. However, there are some exceptions to these rules, which the Department of Labor has the authority to define through regulation. One of the most commonly used exemptions is for “executive, administrative and professional” employees, the so-called “white collar” exemption.
Workers who are paid hourly wages or who earn below a certain salary are generally protected by overtime regulations, while those above the threshold who perform executive, professional or administrative duties are not. That threshold has failed to keep up with inflation, only being updated twice in the last 40 years and leaving millions of low-paid, salaried workers without these basic protections. Specifically:
In 1975 the Department of Labor set the threshold below which white collar workers were entitled to overtime pay at $250 per week.
In 2004 that threshold was set at $455 per week (the equivalent of $561 in today's dollars). This is below today’s poverty line for a worker supporting a family of four, and well below 1975 levels in inflation adjusted terms.
Today, only 12 percent of salaried workers fall below the threshold that would guarantee them overtime and minimum wage protections (compared with 18 percent in 2004 and 65 percent in 1975). Many of the remaining 88 percent of salaried workers are ineligible for these protections because they fall within the white collar exemptions. Many recognize that these regulations are outdated, which is why states like New York and California have set higher salary thresholds.
At the same time, employers and workers alike have difficulty navigating the existing regulations, and many recognize that the rules should be modernized to better fit today’s economy.
Details of the Presidential Memorandum
Improving the overtime regulations consistent with the Memorandum the President will sign today could benefit millions of people who are working harder but falling further behind. The Fair Labor Standards Act protects over 135 million workers in more than 7.3 million workplaces nationwide.
The Presidential Memorandum instructs the Secretary of Labor to update regulations regarding who qualifies for overtime protection. In so doing, the Secretary shall consider how the regulations could be revised to:
Update existing protections in keeping with the intention of the Fair Labor Standards Act.
Address the changing nature of the American workplace.
Simplify the overtime rules to make them easier for both workers and businesses to understand and apply.
PRESIDENT OBAMA MAKES REMARKS ON OVERTIME PAY
FROM: THE WHITE HOUSE
Remarks by the President On Overtime Pay
East Room
2:27 P.M. EDT
THE PRESIDENT: Thank you, everybody, thank you. (Applause.) Thank you so much. Please. Thank you, guys. Please have a seat.
Well, welcome to the White House. Before I get started, I just want to acknowledge somebody who is working so hard on behalf of America’s workers each and every day, our outstanding Secretary of Labor, Tom Perez. So give him a big round of applause. (Applause.) There you go. Tom must have brought some of his family with him. (Laughter.)
We’ve got a lot of honored guests here. We’ve got middle-class workers who rely on overtime pay. We’ve got business owners who believe in treating their employees right both because it’s the right thing to do but also because it’s good for business. And thanks to the hard work and resilience of Americans like the ones who are here today, our economy has been growing for a number of years now.
Our businesses have created more than 8.5 million new jobs over the last four years. The unemployment rate is at the lowest it’s been in over five years. But in many ways, the trends that have really battered middle-class families for decades have gotten worse, not better. Those at the top are doing better than ever, but for the average family, wages have barely budged. And too many Americans are working harder and harder just to get by.
So we’ve got to reverse those trends. We’ve got to build an economy that works for everybody, not just for a few. And we’ve got to restore the basic notion of opportunity that is at the heart of the American experience: Opportunity for everyone; the belief that here in America, it doesn’t matter where you started, if you are willing to work hard and act responsibly, you’ve got a chance to get ahead.
So at my State of the Union at the beginning of the year I laid out an opportunity agenda to give more Americans a chance to succeed. It’s got four parts. Number one, making sure we’re creating more good jobs that pay good wages. Number two, making sure that we’re training more Americans with the skills that are needed to fill those jobs. Number three, making sure every child in America gets a world-class education. And number four, which is what I’m going to be focusing on today, making sure that our economy rewards the hard work of every American.
Now, making work pay means making sure women earn equal pay for equal work. (Applause.) It means giving women the chance to have a baby without sacrificing jobs, or a day off to care for a sick child or parent without worrying about making ends meet. It means making sure every American has access to quality, affordable health care that’s there when you need it. So if there’s somebody out there that you know that doesn’t have health insurance, make sure they go on healthcare.gov -- (laughter) -- before March 31st. That’s a priority. (Applause.) And it means wages and paychecks that help to support a family.
Profitable corporations like Costco see paying higher wages as way to reduce turnover and boost productivity. And I’ve asked business owners to do what they can to give their employee a raise. As some of you saw, I was at The Gap yesterday -- or the day before yesterday in Manhattan -- and fortunately Malia and Sasha liked the sweaters I bought them. (Laughter.) But part of what I wanted to highlight was the fact that, on its own, The Gap decided to give a raise to 64,000 employees across the country.
I’ve now called on Congress to give America a raise by raising the minimum wage to $10.10 an hour. (Applause.) And in this year of action, while Congress decides what it’s going to do -- whether it’s going to do anything about this issue -- and I hope that it does, and I know Democrats are pushing hard to get minimum wage legislation passed -- I’m going to do what I can on my own to raise wages for more hardworking Americans. So a few weeks ago I signed an executive order requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour. Today, I’m going to use my pen to give more Americans the chance to earn the overtime pay that they deserve.
Overtime is a pretty simple idea: If you have to work more, you should get paid more. And if you want to know why it’s so important, just ask some of the folks here who are behind me. Nancy Minor works at an oil refinery in Pennsylvania -- Nancy, raise your hand. There you go. Yes, give Nancy a big round of applause. (Applause.) So for the last 16 years, Nancy has been a single mom raising and educating four kids on her own, and that is not easy, as you might imagine. She’s been able to do it, though, thanks in part to her overtime pay.
For more than 75 years, the 40-hour workweek and the overtime that comes with it have helped countless workers like Nancy get ahead. And it means that when she’s asked to makes significant sacrifices on behalf of her company -- which she’s happy to do -- they’re also looking out for her, recognizing that that puts a strain on her family and -- having to get a babysitter and all kinds of things, adjustments that she has to make. It’s just fair. It’s just the right thing to do.
Unfortunately, today, millions of Americans aren’t getting the extra pay they deserve. That’s because an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year. So if you’re making $23,000, typically, you’re not high in management. If your salary is even a dollar above the current threshold, you may not be guaranteed overtime. It doesn't matter if what you do is mostly physical work like stocking shelves, it doesn't matter if you’re working 50 or 60 or 70 hours a week -- your employer doesn't have to pay you a single extra dime.
And I think that’s wrong. It doesn’t make sense that in some cases this rule actually makes it possible for salaried workers to be paid less than the minimum wage. It’s not right when business owners who treat their employees fairly can be undercut by competitors who aren’t treating their employees right. If you’re working hard, you’re barely making ends meet, you should be paid overtime. Period. Because working Americans have struggled through stagnant wages for too long.
Every day, I get letters from folks who just feel like they’re treading water. No matter how hard they’re working -- they’re putting in long hours, they’re working harder and harder just to get by, but it’s always, at the end of the month, real tight. Workers like the ones with me here today, they want to work hard. They don’t expect a free lunch and they don’t expect to be fabulously wealthy, they just want a chance to get ahead.
So today, I’m taking action to help give more workers that chance. I’m directing Tom Perez, my Secretary of Labor, to restore the common-sense principle behind overtime: If you go above and beyond to help your employer and your economy succeed, then you should share a little bit in that success. And this is going to make a real difference in the lives of millions of Americans, from managers in fast food and retail to office workers, cargo inspectors.
And we’re going to do this the right way -- we’re going to consult with both workers and businesses as we update our overtime rules. We’re going to work to simplify the system to it’s easier for employers and employees alike. With any kind of change like this, not everybody is going to be happy, but Americans have spent too long working more and getting less in return.
So wherever and whenever I can make sure that our economy rewards hard work and responsibility, that it makes sure that it’s treating fairly the workers who are out there building this economy every day, that’s what I’m going to do. What every American wants is a paycheck that lets them support their families, experience a little bit of economic security, pass down some hope and optimism to their kids. That’s what we’re going to be fighting for. That’s what I’m going to be fighting for as long as I’m President of the United States.
And with that, I’m going to sign this memo. And I want to thank everybody for being here, especially the folks standing behind me. (Applause.)
END
2:27 P.M. EDT
Remarks by the President On Overtime Pay
East Room
2:27 P.M. EDT
THE PRESIDENT: Thank you, everybody, thank you. (Applause.) Thank you so much. Please. Thank you, guys. Please have a seat.
Well, welcome to the White House. Before I get started, I just want to acknowledge somebody who is working so hard on behalf of America’s workers each and every day, our outstanding Secretary of Labor, Tom Perez. So give him a big round of applause. (Applause.) There you go. Tom must have brought some of his family with him. (Laughter.)
We’ve got a lot of honored guests here. We’ve got middle-class workers who rely on overtime pay. We’ve got business owners who believe in treating their employees right both because it’s the right thing to do but also because it’s good for business. And thanks to the hard work and resilience of Americans like the ones who are here today, our economy has been growing for a number of years now.
Our businesses have created more than 8.5 million new jobs over the last four years. The unemployment rate is at the lowest it’s been in over five years. But in many ways, the trends that have really battered middle-class families for decades have gotten worse, not better. Those at the top are doing better than ever, but for the average family, wages have barely budged. And too many Americans are working harder and harder just to get by.
So we’ve got to reverse those trends. We’ve got to build an economy that works for everybody, not just for a few. And we’ve got to restore the basic notion of opportunity that is at the heart of the American experience: Opportunity for everyone; the belief that here in America, it doesn’t matter where you started, if you are willing to work hard and act responsibly, you’ve got a chance to get ahead.
So at my State of the Union at the beginning of the year I laid out an opportunity agenda to give more Americans a chance to succeed. It’s got four parts. Number one, making sure we’re creating more good jobs that pay good wages. Number two, making sure that we’re training more Americans with the skills that are needed to fill those jobs. Number three, making sure every child in America gets a world-class education. And number four, which is what I’m going to be focusing on today, making sure that our economy rewards the hard work of every American.
Now, making work pay means making sure women earn equal pay for equal work. (Applause.) It means giving women the chance to have a baby without sacrificing jobs, or a day off to care for a sick child or parent without worrying about making ends meet. It means making sure every American has access to quality, affordable health care that’s there when you need it. So if there’s somebody out there that you know that doesn’t have health insurance, make sure they go on healthcare.gov -- (laughter) -- before March 31st. That’s a priority. (Applause.) And it means wages and paychecks that help to support a family.
Profitable corporations like Costco see paying higher wages as way to reduce turnover and boost productivity. And I’ve asked business owners to do what they can to give their employee a raise. As some of you saw, I was at The Gap yesterday -- or the day before yesterday in Manhattan -- and fortunately Malia and Sasha liked the sweaters I bought them. (Laughter.) But part of what I wanted to highlight was the fact that, on its own, The Gap decided to give a raise to 64,000 employees across the country.
I’ve now called on Congress to give America a raise by raising the minimum wage to $10.10 an hour. (Applause.) And in this year of action, while Congress decides what it’s going to do -- whether it’s going to do anything about this issue -- and I hope that it does, and I know Democrats are pushing hard to get minimum wage legislation passed -- I’m going to do what I can on my own to raise wages for more hardworking Americans. So a few weeks ago I signed an executive order requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour. Today, I’m going to use my pen to give more Americans the chance to earn the overtime pay that they deserve.
Overtime is a pretty simple idea: If you have to work more, you should get paid more. And if you want to know why it’s so important, just ask some of the folks here who are behind me. Nancy Minor works at an oil refinery in Pennsylvania -- Nancy, raise your hand. There you go. Yes, give Nancy a big round of applause. (Applause.) So for the last 16 years, Nancy has been a single mom raising and educating four kids on her own, and that is not easy, as you might imagine. She’s been able to do it, though, thanks in part to her overtime pay.
For more than 75 years, the 40-hour workweek and the overtime that comes with it have helped countless workers like Nancy get ahead. And it means that when she’s asked to makes significant sacrifices on behalf of her company -- which she’s happy to do -- they’re also looking out for her, recognizing that that puts a strain on her family and -- having to get a babysitter and all kinds of things, adjustments that she has to make. It’s just fair. It’s just the right thing to do.
Unfortunately, today, millions of Americans aren’t getting the extra pay they deserve. That’s because an exception that was originally meant for high-paid, white-collar employees now covers workers earning as little as $23,660 a year. So if you’re making $23,000, typically, you’re not high in management. If your salary is even a dollar above the current threshold, you may not be guaranteed overtime. It doesn't matter if what you do is mostly physical work like stocking shelves, it doesn't matter if you’re working 50 or 60 or 70 hours a week -- your employer doesn't have to pay you a single extra dime.
And I think that’s wrong. It doesn’t make sense that in some cases this rule actually makes it possible for salaried workers to be paid less than the minimum wage. It’s not right when business owners who treat their employees fairly can be undercut by competitors who aren’t treating their employees right. If you’re working hard, you’re barely making ends meet, you should be paid overtime. Period. Because working Americans have struggled through stagnant wages for too long.
Every day, I get letters from folks who just feel like they’re treading water. No matter how hard they’re working -- they’re putting in long hours, they’re working harder and harder just to get by, but it’s always, at the end of the month, real tight. Workers like the ones with me here today, they want to work hard. They don’t expect a free lunch and they don’t expect to be fabulously wealthy, they just want a chance to get ahead.
So today, I’m taking action to help give more workers that chance. I’m directing Tom Perez, my Secretary of Labor, to restore the common-sense principle behind overtime: If you go above and beyond to help your employer and your economy succeed, then you should share a little bit in that success. And this is going to make a real difference in the lives of millions of Americans, from managers in fast food and retail to office workers, cargo inspectors.
And we’re going to do this the right way -- we’re going to consult with both workers and businesses as we update our overtime rules. We’re going to work to simplify the system to it’s easier for employers and employees alike. With any kind of change like this, not everybody is going to be happy, but Americans have spent too long working more and getting less in return.
So wherever and whenever I can make sure that our economy rewards hard work and responsibility, that it makes sure that it’s treating fairly the workers who are out there building this economy every day, that’s what I’m going to do. What every American wants is a paycheck that lets them support their families, experience a little bit of economic security, pass down some hope and optimism to their kids. That’s what we’re going to be fighting for. That’s what I’m going to be fighting for as long as I’m President of the United States.
And with that, I’m going to sign this memo. And I want to thank everybody for being here, especially the folks standing behind me. (Applause.)
END
2:27 P.M. EDT
MAN SENTENCED FOR CYBER "SEXTORTION"
FROM: U.S. JUSTICE DEPARTMENT
Thursday, March 13, 2014
Maine Resident Sentenced for Engaging in Cyber “Sextortion” of New Hampshire Victim
John Bryan Villegas, 23, of Kittery, Maine, was sentenced today in federal court in New Hampshire to serve 33 months in prison for engaging in a type of cyber stalking known as “sextortion,” announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
On Sept. 18, 2013, Villegas pleaded guilty to an information charging him with one count of engaging in cyber stalking. The information charges that Villegas attempted to extort a New Hampshire female into providing him with sexually explicit photographs and videos of her. He sent her e-mail messages in which he threatened to publish on the internet – and distribute to the victim’s neighbors and work and social acquaintances – other sexually explicit photographs of the victim that were stored on her laptop computer, which had been recently stolen during a burglary of her residence. On Jan. 9, 2014, Villegas pleaded guilty in New Hampshire state court to charges that he committed that burglary.
The case was investigated by the U.S. Secret Service and was prosecuted by Senior Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
The department would like to thank the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service for their cooperation.
Thursday, March 13, 2014
Maine Resident Sentenced for Engaging in Cyber “Sextortion” of New Hampshire Victim
John Bryan Villegas, 23, of Kittery, Maine, was sentenced today in federal court in New Hampshire to serve 33 months in prison for engaging in a type of cyber stalking known as “sextortion,” announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
On Sept. 18, 2013, Villegas pleaded guilty to an information charging him with one count of engaging in cyber stalking. The information charges that Villegas attempted to extort a New Hampshire female into providing him with sexually explicit photographs and videos of her. He sent her e-mail messages in which he threatened to publish on the internet – and distribute to the victim’s neighbors and work and social acquaintances – other sexually explicit photographs of the victim that were stored on her laptop computer, which had been recently stolen during a burglary of her residence. On Jan. 9, 2014, Villegas pleaded guilty in New Hampshire state court to charges that he committed that burglary.
The case was investigated by the U.S. Secret Service and was prosecuted by Senior Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
The department would like to thank the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service for their cooperation.
U.S. EXTENDS CONGRATULATIONS TO POPE FRANCIS ON ELECTION ANNIVERSARY
FROM: U.S. STATE DEPARTMENT
On the Anniversary of the Election of His Holiness Pope Francis
Press Statement
John Kerry
Secretary of State
Washington, DC
March 13, 2014
On behalf of President Obama and the people of the United States, I extend heartfelt congratulations to His Holiness Pope Francis on the one-year anniversary of his historic election to the See of Rome.
I had the privilege two months ago to be the first Catholic Secretary of State to visit the Vatican since the United States established diplomatic relations with the Holy See three decades ago. As a former altar boy, I never imagined that I would one day cross the threshold of the Vatican as Secretary of State.
My first and formative sense of religion came from my parents, Richard and Rosemary. My parents taught me early that we are all put on this earth for something greater than ourselves. They taught me my faith and they taught me to live by it.
Millions of Americans share this devotion to a higher purpose and a commitment to help others. The relationship between the United States and the Holy See is built on that common foundation. The Holy Father’s emphasis on addressing poverty has brought much needed global attention to helping the neediest among us.
The values that unite us are many and include promoting human rights and religious freedom, protecting the environment, and fighting trafficking in persons and the exploitation of faith as a pretext for violence.
I am particularly appreciative of the Holy Father’s appeals for peace in the Middle East and support of Israeli–Palestinian negotiations.
Today, I join millions of Americans in offering congratulations to the Holy Father as he continues his work of leading the Catholic Church in our modern world.
On the Anniversary of the Election of His Holiness Pope Francis
Press Statement
John Kerry
Secretary of State
Washington, DC
March 13, 2014
On behalf of President Obama and the people of the United States, I extend heartfelt congratulations to His Holiness Pope Francis on the one-year anniversary of his historic election to the See of Rome.
I had the privilege two months ago to be the first Catholic Secretary of State to visit the Vatican since the United States established diplomatic relations with the Holy See three decades ago. As a former altar boy, I never imagined that I would one day cross the threshold of the Vatican as Secretary of State.
My first and formative sense of religion came from my parents, Richard and Rosemary. My parents taught me early that we are all put on this earth for something greater than ourselves. They taught me my faith and they taught me to live by it.
Millions of Americans share this devotion to a higher purpose and a commitment to help others. The relationship between the United States and the Holy See is built on that common foundation. The Holy Father’s emphasis on addressing poverty has brought much needed global attention to helping the neediest among us.
The values that unite us are many and include promoting human rights and religious freedom, protecting the environment, and fighting trafficking in persons and the exploitation of faith as a pretext for violence.
I am particularly appreciative of the Holy Father’s appeals for peace in the Middle East and support of Israeli–Palestinian negotiations.
Today, I join millions of Americans in offering congratulations to the Holy Father as he continues his work of leading the Catholic Church in our modern world.
SEC CHARGES LIONS GATE WITH GIVING INACCURATE DISCLOSURES TO STOP TAKEOVER
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged motion picture company Lions Gate Entertainment Corp. with failing to fully and accurately disclose to investors a key aspect of its effort to thwart a hostile takeover bid.
Lions Gate agreed to pay $7.5 million and admit wrongdoing to settle the SEC’s charges.
According to the SEC’s order instituting settled administrative proceedings, Lions Gate’s management participated in a set of extraordinary corporate transactions in 2010 that put millions of newly issued company shares in the hands of a management-friendly director. A purpose of the maneuver was to defeat a hostile tender offer by a large shareholder who had been locked in a battle for control of the company for at least a year. However, Lions Gate failed to reveal that the move was part of a defensive strategy to solidify incumbent management’s control, instead stating in SEC filings that the transactions were part of a previously announced plan to reduce debt. In fact, the company had made no such prior announcement. Lions Gate also represented that the transactions were not “prearranged” with the management-friendly director, and failed to disclose the extent to which it planned and enabled the transactions with the expectation that the director would get the shares.
“Lions Gate withheld material information just as its shareholders were faced with a critical decision about the future of the company,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement. “Full and fair disclosure is crucial in tender offers given that shareholders rely heavily on corporate insiders to make informed decisions, especially in the midst of tender offer battles.”
According to the SEC’s order, the large shareholder had made several tender offers and acquired more than 37 percent of Lions Gate’s outstanding stock. For its part, Lions Gate management believed that allowing the shareholder to control the company was not in the best interest of Lions Gate or its shareholders. The company engaged in an active campaign to discourage shareholders from tendering their stock to the shareholder, and vigorously looked for a management ally to purchase available shares of Lions Gate stock. Lions Gate went on to establish the basic framework for an extraordinary three-part set of transactions that would begin by exchanging $100 million in notes from a holder for new notes convertible to stock at a more favorable conversion rate. The note holder would then sell the notes to the management-friendly director at a premium, and the director would then immediately convert the notes to shares.
According to the SEC’s order, the Lions Gate board of directors approved the transactions at a midnight board meeting on July 20, 2010, while facing an imminent tender offer from the large shareholder. Completed in hours, these transactions allowed the friendly director to obtain control of approximately nine percent of the company’s outstanding stock, effectively blocking the takeover bid.
The SEC’s order finds that Lions Gate then failed to meet its disclosure obligations. First, Lions Gate stated in a July 20 press release and 8-K filing that the transactions were done to reduce the company’s debt, and failed to disclose the effort to foil the takeover bid. Furthermore, Lions Gate management knew that a large, direct sale of stock from the company to the friendly director would have required prior approval from its shareholders under a New York Stock Exchange (NYSE) rule. After the transactions, NYSE contacted Lions Gate to inquire whether the transactions violated the NYSE rule requiring shareholder approval. In response to the NYSE inquiry, Lions Gate said it would disclose additional information. In its subsequent tender offer filings made to the SEC in September, Lions Gate represented that the note exchange was not part of a prearranged plan to get shares to the management-friendly director.
Among the facts admitted by Lions Gate, reflecting the extent to which the company planned and enabled the transactions, include:
Lions Gate did not announce a plan to reduce total debt prior to issuing the press release on July 20, 2010.
Lions Gate amended its insider trading policy at the midnight board meeting to allow the friendly director to immediately convert the notes to stock.
Lions Gate approved the friendly director’s last-minute request to change the conversion price.
Lions Gate allowed the friendly director to review the new note terms, term sheet, and exchange agreement before they were provided to the note holder.
Lions Gate failed to include other required information in its tender offer filings, including the fact that the friendly director converted the notes at favorable price resulting in the director owning a near 9 percent interest in Lions Gate.
The SEC’s order finds that Lions Gate violated Sections 13(a) and 14(d) of the Securities Exchange Act of 1934 and Rules 12b-20 13a-11, and 14d-9. In addition to the financial penalty, the order requires Lions Gate to cease and desist from future violations.
The SEC’s investigation was conducted by Nicholas A. Brady with assistance from Jeffrey T. Infelise. The case was supervised by Anita B. Bandy and Moira T. Roberts.
The Securities and Exchange Commission today charged motion picture company Lions Gate Entertainment Corp. with failing to fully and accurately disclose to investors a key aspect of its effort to thwart a hostile takeover bid.
Lions Gate agreed to pay $7.5 million and admit wrongdoing to settle the SEC’s charges.
According to the SEC’s order instituting settled administrative proceedings, Lions Gate’s management participated in a set of extraordinary corporate transactions in 2010 that put millions of newly issued company shares in the hands of a management-friendly director. A purpose of the maneuver was to defeat a hostile tender offer by a large shareholder who had been locked in a battle for control of the company for at least a year. However, Lions Gate failed to reveal that the move was part of a defensive strategy to solidify incumbent management’s control, instead stating in SEC filings that the transactions were part of a previously announced plan to reduce debt. In fact, the company had made no such prior announcement. Lions Gate also represented that the transactions were not “prearranged” with the management-friendly director, and failed to disclose the extent to which it planned and enabled the transactions with the expectation that the director would get the shares.
“Lions Gate withheld material information just as its shareholders were faced with a critical decision about the future of the company,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement. “Full and fair disclosure is crucial in tender offers given that shareholders rely heavily on corporate insiders to make informed decisions, especially in the midst of tender offer battles.”
According to the SEC’s order, the large shareholder had made several tender offers and acquired more than 37 percent of Lions Gate’s outstanding stock. For its part, Lions Gate management believed that allowing the shareholder to control the company was not in the best interest of Lions Gate or its shareholders. The company engaged in an active campaign to discourage shareholders from tendering their stock to the shareholder, and vigorously looked for a management ally to purchase available shares of Lions Gate stock. Lions Gate went on to establish the basic framework for an extraordinary three-part set of transactions that would begin by exchanging $100 million in notes from a holder for new notes convertible to stock at a more favorable conversion rate. The note holder would then sell the notes to the management-friendly director at a premium, and the director would then immediately convert the notes to shares.
According to the SEC’s order, the Lions Gate board of directors approved the transactions at a midnight board meeting on July 20, 2010, while facing an imminent tender offer from the large shareholder. Completed in hours, these transactions allowed the friendly director to obtain control of approximately nine percent of the company’s outstanding stock, effectively blocking the takeover bid.
The SEC’s order finds that Lions Gate then failed to meet its disclosure obligations. First, Lions Gate stated in a July 20 press release and 8-K filing that the transactions were done to reduce the company’s debt, and failed to disclose the effort to foil the takeover bid. Furthermore, Lions Gate management knew that a large, direct sale of stock from the company to the friendly director would have required prior approval from its shareholders under a New York Stock Exchange (NYSE) rule. After the transactions, NYSE contacted Lions Gate to inquire whether the transactions violated the NYSE rule requiring shareholder approval. In response to the NYSE inquiry, Lions Gate said it would disclose additional information. In its subsequent tender offer filings made to the SEC in September, Lions Gate represented that the note exchange was not part of a prearranged plan to get shares to the management-friendly director.
Among the facts admitted by Lions Gate, reflecting the extent to which the company planned and enabled the transactions, include:
Lions Gate did not announce a plan to reduce total debt prior to issuing the press release on July 20, 2010.
Lions Gate amended its insider trading policy at the midnight board meeting to allow the friendly director to immediately convert the notes to stock.
Lions Gate approved the friendly director’s last-minute request to change the conversion price.
Lions Gate allowed the friendly director to review the new note terms, term sheet, and exchange agreement before they were provided to the note holder.
Lions Gate failed to include other required information in its tender offer filings, including the fact that the friendly director converted the notes at favorable price resulting in the director owning a near 9 percent interest in Lions Gate.
The SEC’s order finds that Lions Gate violated Sections 13(a) and 14(d) of the Securities Exchange Act of 1934 and Rules 12b-20 13a-11, and 14d-9. In addition to the financial penalty, the order requires Lions Gate to cease and desist from future violations.
The SEC’s investigation was conducted by Nicholas A. Brady with assistance from Jeffrey T. Infelise. The case was supervised by Anita B. Bandy and Moira T. Roberts.
CARGO UNLOADED FROM SOYUZ TMA-10M SPACECRAFT
Engineers document cargo as it is unloaded from the Soyuz TMA-10M spacecraft after it landed with Expedition 38 Commander Oleg Kotov of the Russian Federal Space Agency, Roscosmos, and Flight Engineers: Mike Hopkins of NASA, and, Sergey Ryazanskiy of Roscosmos, near the town of Zhezkazgan, Kazakhstan on Tuesday, March 11, 2014. Hopkins, Kotov and Ryazanskiy returned to Earth after five and a half months onboard the International Space Station where they served as members of the Expedition 37 and 38 crews. Image Credit-NASA-Bill Ingalls.
WHITE HOUSE PRESS SECRETARY'S STATEMENT ON VISIT BY IRISH PRIME MINISTER KENNY
FROM: THE WHITE HOUSE
Statement by the Press Secretary on the Visit of Irish Prime Minister Enda Kenny
President Obama will welcome Prime Minister (Taoiseach) Enda Kenny of Ireland to the White House on Friday, March 14. The United States and Ireland share a strong bilateral relationship; deep cultural, historic, and people-to-people bonds; and a shared commitment to advancing peace, security, and prosperity in the world. In the morning, the Vice President will host the Taoiseach for breakfast at the Naval Observatory, and the President will meet with the Taoiseach in the Oval Office. Subsequently, the President and the Vice President will attend the traditional St. Patrick’s Day lunch at the U.S. Capitol. In the early evening, the President and the First Lady will host a reception to celebrate their sixth St. Patrick’s Day at the White House. During the reception, the President and Kenny will participate in the annual Shamrock ceremony started under President Truman.
Also on March 14, the Vice President will meet with First Minister Peter Robinson and deputy First Minister Martin McGuinness of Northern Ireland at the White House to discuss progress toward building a peaceful and prosperous future for the people of Northern Ireland.
Statement by the Press Secretary on the Visit of Irish Prime Minister Enda Kenny
President Obama will welcome Prime Minister (Taoiseach) Enda Kenny of Ireland to the White House on Friday, March 14. The United States and Ireland share a strong bilateral relationship; deep cultural, historic, and people-to-people bonds; and a shared commitment to advancing peace, security, and prosperity in the world. In the morning, the Vice President will host the Taoiseach for breakfast at the Naval Observatory, and the President will meet with the Taoiseach in the Oval Office. Subsequently, the President and the Vice President will attend the traditional St. Patrick’s Day lunch at the U.S. Capitol. In the early evening, the President and the First Lady will host a reception to celebrate their sixth St. Patrick’s Day at the White House. During the reception, the President and Kenny will participate in the annual Shamrock ceremony started under President Truman.
Also on March 14, the Vice President will meet with First Minister Peter Robinson and deputy First Minister Martin McGuinness of Northern Ireland at the White House to discuss progress toward building a peaceful and prosperous future for the people of Northern Ireland.
REMARKS: PRESIDENT OBAMA AND UKRAINE PRIME MINISTER YATSENYUK
FROM: THE WHITE HOUSE
Remarks by President Obama and Ukraine Prime Minister Yatsenyuk after Bilateral Meeting
Oval Office
3:30 P.M. EDT
PRESIDENT OBAMA: It is a pleasure to welcome Prime Minister Yatsenyuk to the Oval Office, to the White House.
I think all of us have seen the courage of the Ukrainian people in standing up on behalf of democracy and on the desire that I believe is universal for people to be able to determine their own destiny. And we saw in the Maidan how ordinary people from all parts of the country had said that we want a change. And the Prime Minister was part of that process, showed tremendous courage, and upheld the principles of nonviolence throughout the course of events over the last several months.
Obviously, the Prime Minister comes here during a very difficult time for his country. In the aftermath of President Yanukovych leaving the country, the parliament, the Rada, acted in a responsible fashion to fill the void, created a inclusive process in which all parties had input, including the party of former President Yanukovych. They have set forward a process to stabilize the country, take a very deliberate step to assure economic stability and negotiate with the International Monetary Fund, and to schedule early elections so that the Ukrainian people, in fact, can choose their direction for the future. And the Prime Minister has managed that process with great skill and great restraint, and we’re very much appreciative of the work that he has done.
The most pressing challenge that Ukraine faces at the moment, however, is the threat to its territorial integrity and its sovereignty. We have been very clear that we consider the Russian incursion into Crimea outside of its bases to be a violation of international law, of international agreements of which Russia is a signatory, and a violation of the territorial integrity and sovereignty of Ukraine. And we have been very firm in saying that we will stand with Ukraine and the Ukrainian people in ensuring that that territorial integrity and sovereignty is maintained.
I think we all recognize that there are historic ties between Russia and Ukraine, and I think the Prime Minister would be the first one to acknowledge that. And I think the Prime Minister and the current government in Kyiv has recognized and has communicated directly to the Russian Federation their desire to try to manage through this process diplomatically. But what the Prime Minister I think has rightly insisted on is, is that they cannot have a country outside of Ukraine dictate to them how they should arrange their affairs. And there is a constitutional process in place and a set of elections that they can move forward on that, in fact, could lead to different arrangements over time with the Crimean region, but that is not something that can be done with the barrel of a gun pointed at you.
And so Secretary Kerry is in communications with the Russian government and has offered to try to explore with his counterpart, Foreign Minister Lavrov, a diplomatic solution to this crisis. We are in close communication with the Ukrainian government in terms of how we might proceed going forward. But we will continue to say to the Russian government that if it continues on the path that it is on then not only us, but the international community -- the European Union and others -- will be forced to apply a cost to Russia’s violations of international law and its encroachments on Ukraine.
There’s another path available, and we hope that President Putin is willing to seize that path. But if he does not, I’m very confident that the international community will stand strongly behind the Ukrainian government in preserving its unity and its territorial integrity.
Let me just make two final points. Obviously, because of the political turmoil, the economic situation in Ukraine has become more challenging, not less. And that’s why I’m very proud that not only as critical members of the International Monetary Fund, the IMF, we are working with the Prime Minister and his team in a package that can help to institute necessary reforms inside of the Ukraine, but also help to stabilize the situation so that people feel confident that in their daily lives they can meet their basic necessities.
We’re also asking Congress to act promptly to deliver on an aid package, including a $1 billion loan guarantee that can help smooth the path for reform inside of Ukraine and give the Prime Minister and his government the capacity to do what they need to do as they are also organizing an election process. So I would just ask both Democrats and Republicans, who I know are unified in their support of Ukraine, to move quickly to give us the support that we need so that we can give the Ukrainian people the support that they need.
And then, finally, Mr. Prime Minister, I would ask that you deliver a message on behalf of the American people to all the Ukrainian people, and that is that we admire their courage; we appreciate their aspirations. The interests of the United States are solely in making sure that the people of Ukraine are able to determine their own destiny. That is something that here in the United States we believe in deeply. I know it’s something that you believe in deeply as well. And you can rest assured that you will have our strong support as you move forward during these difficult times.
Thank you.
PRIME MINISTER YATSENYUK: Thank you, Mr. President. And we highly appreciate the support that you have given to the Ukrainian people. And my country feels that the United States stands by the Ukrainian people.
Mr. President, it’s all about the freedom. We fight for our freedom. We fight for our independence. We fight for our sovereignty. And we will never surrender.
My country has faced a number of challenges. The military one is a key challenge today, and we urge Russia to stick to its international obligations, to pull back its military into barracks, and to start the dialogue with no guns, with no military, with no tanks, but with the diplomacy and political tools.
On behalf of my government, I would like to reiterate that we are absolutely ready and open for talks with the Russian Federation. We adhere to all international obligations. And we as the state of Ukraine will fulfill all bilateral and multilateral international treaties.
On the economic side, Mr. President, we highly appreciate the support of the United States and the decision to guarantee $1 billion loan for the Ukrainian economy. You know that we resumed talks with the IMF. We do understand that these are tough reforms, but these reforms are needed for the Ukrainian state. And we are back on track in terms of delivering real reforms in my country.
As I already informed you, probably in the nearest future, next week or in 10 days, Ukraine is to sign a political part of -- association agreement with the European Union, and we want to be very clear that Ukraine is and will be a part of the Western world, and our Russian partners have to realize that we are ready to make a new type or to craft a new type of our relationship where Ukraine is a part of the European Union, but Ukraine is a good friend and partner of Russia.
So much will depend on whether Russia wants to have this talk and whether Russia wants to have Ukraine as a partner or as a subordinate. As I already indicated, we will never surrender and we will do everything in order to preserve peace, stability, and independence of my country. And we appreciate your personal support, the support of your government, support of the American people to the Ukrainian people.
Thank you, Mr. President.
PRESIDENT OBAMA: Mr. Prime Minister, thank you very much.
Q (Inaudible.)
PRESIDENT OBAMA: Julie, we completely reject a referendum patched together in a few weeks with Russian military personnel basically taking over Crimea. We reject its legitimacy. It is contrary to international law. It is contrary to the Ukrainian constitution.
I know that we've heard from the Russian Federation this notion that these kinds of decisions are often made in other places, and they’ve even analogized it to Scotland or other situations of that sort. In each of those cases that they’ve cited, decisions were made by a national government through a long, lengthy, deliberative process. It's not something that happens in a few days, and it's not something that happens with an outside army essentially taking over the region.
As you just heard the Prime Minister indicate, the people of Ukraine recognize historic ties with the people of Russia. The Prime Minister you just heard say, repeat what he said often, which is they’re prepared to respect all international treaties and obligations that they are signatories to, including Russian basing rights in Crimea. The issue now is whether or not Russia is able to militarily dominate a region of somebody else’s country, engineer a slapdash referendum, and ignore not only the Ukrainian constitution but a Ukrainian government that includes parties that are historically in opposition with each other -- including, by the way, the party of the previous President.
So we will not recognize, certainly, any referendum that goes forward. My hope is, is that as a consequence of diplomatic efforts over the next several days that there will be a rethinking of the process that's been put forward.
We have already put in place the architecture for us to apply financial and economic consequences to actions that are taken. But our strong preference is to resolve this diplomatically. And as you heard the Prime Minister say, this idea that somehow the Ukrainian people are forced to choose between good relations with the West or good relations with Russia, economic ties with the West or economic ties with Russia, is the kind of zero-sum formulation that in the 21st century, with a highly integrated, global economy, doesn’t make any sense and is not in the interests of the Ukrainian people.
I actually think, in the end, it's not in the interests of Russia either. Russia should be thinking about how can it work with Ukraine to further strengthen its economic ties and trade and exchanges with Europe. That will make Russia stronger, not weaker. But obviously Mr. Putin has some different ideas at this point.
We do not know yet what our diplomatic efforts will yield, but we'll keep on pressing. In the meantime, the main message I want to send is that we are highly supportive of a government in Kyiv that is taking on some very tough decisions, is committed to law and order, inclusivity, committed to the rights of all Ukrainian people, and is committed to fair and free elections that should settle once and for all any questions that there may be about what’s transpired since former President Yanukovych left the country.
And the most important thing to remember is this is up to the Ukrainian people. It's not up to the United States. It's not up to Russia. It's up to the Ukrainian people to make a decision about how they want to live their lives. That's what all of us should support. And certainly that's the reason why I'm so pleased to have the Prime Minister here today.
END 3:46 P.M. EDT
Wednesday, March 12, 2014
PRESIDENT OBAMA'S MESSAGE TO CONGRESS ON CONTINUATION OF NATIONAL EMERGENCY REGARDING IRAN
FROM: THE WHITE HOUSE
Message to the Congress -- Continuation of the National Emergency with Respect to Iran
TO THE CONGRESS OF THE UNITED STATES:
Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, within 90 days prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice stating that the national emergency with respect to Iran that was declared on March 15, 1995, is to continue in effect beyond March 15, 2014.
The crisis between the United States and Iran resulting from the actions and policies of the Government of Iran has not been resolved. The Joint Plan of Action (JPOA) between the P5+1 and Iran went into effect on January 20, 2014, for a period of 6 months. This marks the first time in a decade that Iran has agreed to and taken specific actions to halt its nuclear program and to roll it back in key respects. In return for Iran's actions on its nuclear program, the P5+1, in coordination with the European Union, are taking actions to implement the limited, temporary, and reversible sanctions relief outlined in the JPOA.
Nevertheless, certain actions and policies of the Government of Iran are contrary to the interests of the United States in the region and continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For these reasons, I have determined that it is necessary to continue the national emergency declared with respect to Iran and to maintain in force comprehensive sanctions against Iran to deal with this threat.
BARACK OBAMA
Message to the Congress -- Continuation of the National Emergency with Respect to Iran
TO THE CONGRESS OF THE UNITED STATES:
Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, within 90 days prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice stating that the national emergency with respect to Iran that was declared on March 15, 1995, is to continue in effect beyond March 15, 2014.
The crisis between the United States and Iran resulting from the actions and policies of the Government of Iran has not been resolved. The Joint Plan of Action (JPOA) between the P5+1 and Iran went into effect on January 20, 2014, for a period of 6 months. This marks the first time in a decade that Iran has agreed to and taken specific actions to halt its nuclear program and to roll it back in key respects. In return for Iran's actions on its nuclear program, the P5+1, in coordination with the European Union, are taking actions to implement the limited, temporary, and reversible sanctions relief outlined in the JPOA.
Nevertheless, certain actions and policies of the Government of Iran are contrary to the interests of the United States in the region and continue to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For these reasons, I have determined that it is necessary to continue the national emergency declared with respect to Iran and to maintain in force comprehensive sanctions against Iran to deal with this threat.
BARACK OBAMA
WHITE HOUSE RELEASES STATEMENT OF G-7 LEADERS ON UKRAINE
FROM: THE WHITE HOUSE
Statement of G-7 Leaders on Ukraine
We, the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, the President of the European Council and the President of the European Commission, call on the Russian Federation to cease all efforts to change the status of Crimea contrary to Ukrainian law and in violation of international law. We call on the Russian Federation to immediately halt actions supporting a referendum on the territory of Crimea regarding its status, in direct violation of the Constitution of Ukraine.
Any such referendum would have no legal effect. Given the lack of adequate preparation and the intimidating presence of Russian troops, it would also be a deeply flawed process which would have no moral force. For all these reasons, we would not recognize the outcome.
Russian annexation of Crimea would be a clear violation of the United Nations Charter; Russia’s commitments under the Helsinki Final Act; its obligations to Ukraine under its 1997 Treaty of Friendship, Cooperation and Partnership; the Russia-Ukraine 1997 basing agreement; and its commitments in the Budapest Memorandum of 1994. In addition to its impact on the unity, sovereignty and territorial integrity of Ukraine, the annexation of Crimea could have grave implications for the legal order that protects the unity and sovereignty of all states. Should the Russian Federation take such a step, we will take further action, individually and collectively.
We call on the Russian Federation to de-escalate the conflict in Crimea and other parts of Ukraine immediately, withdraw its forces back to their pre-crisis numbers and garrisons, begin direct discussions with the Government of Ukraine, and avail itself of international mediation and observation offers to address any legitimate concerns it may have. We, the leaders of the G-7, urge Russia to join us in working together through diplomatic processes to resolve the current crisis and support progress for a sovereign independent, inclusive and united Ukraine. We also remind the Russian Federation of our decision to suspend participation in any activities related to preparation of a G-8 Sochi meeting until it changes course and the environment comes back to where the G-8 is able to have a meaningful discussion.
Statement of G-7 Leaders on Ukraine
We, the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, the President of the European Council and the President of the European Commission, call on the Russian Federation to cease all efforts to change the status of Crimea contrary to Ukrainian law and in violation of international law. We call on the Russian Federation to immediately halt actions supporting a referendum on the territory of Crimea regarding its status, in direct violation of the Constitution of Ukraine.
Any such referendum would have no legal effect. Given the lack of adequate preparation and the intimidating presence of Russian troops, it would also be a deeply flawed process which would have no moral force. For all these reasons, we would not recognize the outcome.
Russian annexation of Crimea would be a clear violation of the United Nations Charter; Russia’s commitments under the Helsinki Final Act; its obligations to Ukraine under its 1997 Treaty of Friendship, Cooperation and Partnership; the Russia-Ukraine 1997 basing agreement; and its commitments in the Budapest Memorandum of 1994. In addition to its impact on the unity, sovereignty and territorial integrity of Ukraine, the annexation of Crimea could have grave implications for the legal order that protects the unity and sovereignty of all states. Should the Russian Federation take such a step, we will take further action, individually and collectively.
We call on the Russian Federation to de-escalate the conflict in Crimea and other parts of Ukraine immediately, withdraw its forces back to their pre-crisis numbers and garrisons, begin direct discussions with the Government of Ukraine, and avail itself of international mediation and observation offers to address any legitimate concerns it may have. We, the leaders of the G-7, urge Russia to join us in working together through diplomatic processes to resolve the current crisis and support progress for a sovereign independent, inclusive and united Ukraine. We also remind the Russian Federation of our decision to suspend participation in any activities related to preparation of a G-8 Sochi meeting until it changes course and the environment comes back to where the G-8 is able to have a meaningful discussion.
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