Protect Our Elections Calls on Supreme Court Justice Clarence Thomas to Step Down in Light of His Admission That He Falsified Twenty Years of Financial Disclosure Forms

/PRNewswire/ -- Yesterday, the watchdog group ProtectOurElections.org asked the U.S. Justice Department to bring criminal charges against Supreme Court Justice Clarence Thomas for making false statements on his AO 10 Financial Disclosure forms every year since 2003 by falsely swearing under criminal penalty that his wife Virginia had no non-investment income. http://www.velvetrevolution.us/images/Clarence_Thomas_DOJ_Letter.pdf Within six hours of the group's request, Justice Thomas announced that he had now amended not seven but 20 years of financial disclosure forms to include his wife's income. http://abcnews.go.com/Politics/Supreme_Court/justice-clarence-thomas-amends-financial-disclosure-reports-virginia/story?id=12750650 Justice Thomas said that he "misunderstood" the filing instructions which asked him to check whether his wife had any non-investment income, and had checked "none."

Virginia Thomas worked at the Heritage Foundation from 2003 through 2007 and earned at least $120,000 each year, according to the foundation's IRS Form 990s. She then went to work for Liberty Central in a paid position according to CEO Sarah Field. Last Friday, Common Cause revealed Thomas's false statements in a letter to the Administrative Office of the Courts. Coverage by the Los Angeles Times failed to note the criminal nature of the matter. http://www.latimes.com/news/nationworld/nation/la-na-thomas-disclosure-20110122,0,2413407.story

Each of the AO 10 Financial Disclosure forms signed by Justice Thomas states in Section IX that it is certified under oath as follows:

"I certify that all information given above ( including information pertaining to my spouse and minor or dependent children, if any) is accurate, true, and complete to the best of my knowledge and belief, and that any information not reported was withheld because it met applicable statutory provisions permitting non-disclosure." (Emphasis added.)

Under the signature box in bold capital letters is the following:

NOTE: ANY INDIVIDUAL WHO KNOWINGLY AND WILLFULLY FALSIFIES OR FAILS TO FILE THIS REPORT MAY BE SUBJECT TO CIVIL AND CRIMINAL SANCTIONS (5 U.S.C. app section 104)

According to the Department of Justice Handbook on Prosecutions, persons with expertise in law are presumed to act "knowingly and willfully," and a defendant's signature on a document can help establish willfulness and knowledge. See United States v. Tucker, 133 F.3d 1208, 1218 n. 11 (9th Cir. 1998) (noting that signature proved knowledge of contents of return); United States v. Mohney, 949 F.2d 1397, 1407 (6th Cir. 1991) (holding that signature is prima facie evidence that the signer knows the contents of the return); United States v. Drape, 668 F.2d 22, 26 (1st Cir. 1982) (finding that defendant's signature is sufficient to establish knowledge once it has been shown that the return was false).

If charged, Justice Thomas could face up to one year in prison and a criminal fine for each false statement charge, and a civil fine of up to $50,000 under 5 U.S.C. appendix section 104.

Justice Thomas's conduct is similar to that of an FBI employee who oversaw background investigations for the agency in San Francisco. Rachelle Thomas-Zuill stated on a financial disclosure form that she owned three properties with an outstanding mortgage debt of $866,000, when in fact she owned six properties and had a debt of more than $2.2 million. Thomas-Zuill, who joined the FBI 13 years ago, pleaded guilty last week to making false statements to a government agency, a felony. She will be sentenced April 7th by U.S. District Judge Jeremy Fogel in San Jose.

The Department of Justice civilly prosecuted two other recent false statement cases. In United States v. Dr. William L. Smith , a NASA scientist was charged with violating 18 U.S.C section 208(a), and he settled the case for a substantial fine. In United States v. John R. Van Rosendale , a DOE employee failed under 5 U.S.C. app. section 104 to file a termination financial disclosure report when he left his Government position. He was also fined.

"Yesterday, we asked the Department of Justice to bring criminal charges against Justice Thomas for his knowing and willful false statements under oath," said attorney and Protect Our Elections spokesman Kevin Zeese. "In response, Justice Thomas admitted that he made false statements on 20 years of disclosure forms, but that it was just a simple misunderstanding. How many criminal defendants have said the same thing but were not offered the same opportunity to correct or amend their statements before being prosecuted? How many cases has Justice Thomas sat in judgment of where people were charged with similar conduct? How many lawyers would have asked for Justice Thomas's recusal had the disclosure forms been accurate? Supreme Court Justices are supposed to know the law. Yet, Justice Thomas wants to be treated differently than others who committed similar conduct. His 'misunderstanding' excuse should be argued before a federal jury rather than to a committee that has no authority to grant him immunity from prosecution. No, Justice Thomas cannot be allowed to merely amend his forms without full accountability. We call for him to step down as Supreme Court Justice and for a complete independent audit of all cases in which he sat to determine if his lack of disclosure created a conflict of interest or undermined the fairness of the judgment. We also call for a criminal investigation by career prosecutors at the Department of Justice and an ethics investigation. Anything less would make a mockery of financial disclosure law, undermine respect for the law, and create the appearance that those in powerful positions can violate the law with impunity."

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Governor Cuts State Services Again in Beginning Days of the Fiscal Year

The Office of Planning and Budget is withholding four percent of funds from already stressed state agencies, and has asked agencies to propose budgets for cuts of four, six, and eight percent on top of this year's large cuts. The Georgia Budget &Policy Institute's latest report, Georgia Once Again Faces Budget Shortfall: Governor Orders Hundreds of Millions of Dollars in Additional Budget Cuts, details the financial impact of these three levels of cuts.

Georgia is in the first month of its 2011 fiscal year, yet it is already facing a potential budget shortfall of between $413 million and $613 million. This shortfall is on top of the $2.5 billion in budget cuts already implemented since pre-recessionary FY 2009. This budget gap is due to several factors:

1) the U.S. Congress has not extended the enhanced Medicaid match which would have provided Georgia $375 million;
2) the state transferred $37.7 million in Education Stabilization Recovery Act funds budgeted for FY 2011 into FY 2010; and
3) there is a projected shortfall in the State Health Benefit Plan of as much as $200 million.

The education QBE funding formula is exempt from the withholding allotment. In addition, the Department of Education has been instructed to submit a FY 2011 Amended Budget proposal with a two percent QBE budget cut.

Lawmakers had already cut the fiscal year (FY) 2011 budget by over 12 percent since FY 2009, despite a growing population, increasing infrastructure problems, and significant needs for services from those families hardest hit during the recession.

"Particularly concerning is the fact that vital state agencies that educate and protect our children, protect the health and safety of vulnerable Georgians, and plan the state's economic development have already faced crippling cuts," said Alan Essig, the Institute's executive director and author of the latest policy report.

"Most of the additional cuts can be avoided if Congress passes the enhanced Medicaid funding which our state is counting on."

Even if congress approves the enhanced Medicaid match, all Recovery Act state stabilization funds expire the end of June. According to the Georgia State University Fiscal Research Center the state of Georgia will be facing a structural deficit of between $1.8 billion and $2 billion in FY 2012.

"We have high expectations that the recently formed Tax Council will develop recommendations to solve Georgia's immediate fiscal crisis as well as fix Georgia's long-term structural deficit," said Essig. "Its decisions affect Georgia's economy and its people."

Also, read an update of an analysis by Deputy Director Sarah Beth Gehl that details tax legislation passed during the 2010 legislative session, Adding Up the Fiscal Notes 2010: Governor Vetoes Revenue Drains on Future Budgets, but Signs Bill That Reduces Low Income Tax Credit.

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Senate Fix Needed to Meet White House Promise That Financial Reform Won't Weaken State Insurance Regulation

/PRNewswire/ -- Financial reform legislation must be amended to preserve states' ability to protect insurance consumers and bring the bill in line with White House comments yesterday targeting potential industry loopholes in financial reform, said Consumer Watchdog today.

White House Communications Director Dan Pfeiffer blogged a list of the '10 Most Wanted Lobbyist Loopholes' in the financial reform bill yesterday. He warned against efforts to exempt the insurance industry from new information collection requirements and notes that the bill does not change states' authority to regulate insurance. However language in the legislation currently under consideration in the Senate would grant the Treasury Department broad new authority to preempt state insurance laws and regulations on behalf of foreign insurance companies.

Pfeiffer wrote: "Insurance is regulated by the states, not the federal government - and this bill doesn't change that. But this bill would give the Treasury Department the ability to collect information from insurance companies so that it can help identify emerging risks before they blow up the financial system - like AIG."

Consumer advocates point to language in the main Senate proposal that would allow federal preemption of state insurance laws and are calling for an amendment to bring the bill in line with White House position on this issue.

"The Senate bill would allow Treasury to roll back strong state insurance protections on behalf of foreign insurance firms. It must be amended to meet White House assurances that state oversight of insurance will not be harmed. Insurance deregulation should not be the end result of the Senate's financial re-regulation package," said Carmen Balber, Washington Director for Consumer Watchdog.

An amendment offered by Senator Jeff Merkley (D-OR) and supported by Consumer Watchdog would narrow the broad scope of insurance preemption in the bill to help preserve state insurance regulation and give Congress and the states more input into insurance agreements negotiated by Treasury.

The current Senate provisions would allow Treasury to negotiate new insurance policy through international agreements and behind closed doors, with no input from Congress, state regulators or insurance consumers. Treasury need not consider states' regulatory goals, potential gaps in insurance regulation, or protect insurance consumers in negotiating such agreements. Agreements could then be used to preempt state insurance protections, including capital, solvency and other prudential laws, on behalf of foreign insurers. The states would have no authority to challenge unilateral preemption decisions by Treasury on the merits. Even state laws that treat all insurance companies equally could be subject to preemption. And the current language threatens to subject state insurance laws to preemption under deregulatory constraints contained in existing trade agreements.

"A Senate fix is necessary to preserve states' ability to protect insurance consumers," said Balber.

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Libertarians call for more finance industry freedom

Libertarian Party Executive Director Wes Benedict issued the following statement today, regarding the financial regulation legislation in Congress:

"The Libertarian Party opposes the legislation currently in Congress. Instead of removing harmful regulations that reduce competition, create winners and losers, and stifle the choices of consumers and financial firms, this legislation merely adds to that heap of regulations.

"It is remarkable that so many people have blamed the banking and financial company failures on the 'free market.' The American finance industry is probably the most regulated industry in human history. It doesn't remotely resemble a free market, and that's been true for many decades. It would be much more accurate to blame the failures on government interference.

"The 2008 TARP bailouts were strongly supported by both Republicans and Democrats. Presidential candidates Barack Obama and John McCain both supported them--Senator McCain even 'suspended his campaign' to rush back to Washington and help push through the massive bailouts. On the other hand, Libertarian presidential candidate Bob Barr firmly opposed those bailouts, and the Libertarian Party has continued to express our opposition since then.

"We're seeing the typical cycle of government regulation:

1. Add more regulations.
2. Watch the new regulations create new problems.
3. Blame the free market.
4. Go to step 1.

"The 2008 TARP bailouts were rationalized with the 'too big to fail' phantom -- the notion that if a big company goes bankrupt, then all financial activity will cease, and the world will basically end. It was one more example of government creating a 'fear of catastrophe' to get people to knuckle under to big government payouts.

"Another major problem with protective government regulation is that it gives consumers the false impression that 'everything's OK, the government will make sure you can't be hurt.' That causes consumers to stop doing their homework, and stop keeping an eye on the businesses they depend on. Then, when the government regulators fail in their job (as the SEC has repeatedly, for example), consumers get hurt much worse than they would if they had never been told the government was taking care of them.

"The problem isn't too little regulation, but too much. Banks, insurance companies, and other financial companies must be allowed to operate freely in a free market, and they must be allowed to fail. No other system will work. Heaping more regulations on top of the already enormous financial regulation pile will only lead to new problems."

Mark A. Calabria of the Cato Institute, writing in the New York Post, commented, "Far from protecting the little guy and sticking it to the fat cats, this bill keeps good, old-fashioned political patronage alive and well."

The Libertarian Party's Platform states: "We favor free-market banking, with unrestricted competition among banks and depository institutions of all types."

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Obama Administration Grants Relief to States on Payments to Medicarefor Part D Costs

HHS Secretary Kathleen Sebelius today announced $4.3 billion in financial relief to states by reducing the amount they will have to pay the federal government to offset the cost of Medicare coverage for prescription drugs for state residents eligible for both Medicare and Medicaid.

“We believe today’s action will help states as they struggle to maintain Medicaid and other budget priorities in these difficult economic times,” said Secretary Sebelius. “This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it.”

This temporary financial boost to states is made possible by the American Recovery and Reinvestment Act of 2009 (ARRA). That law granted a significant, yet temporary, increase in the amount states receive from the federal government to help pay for their Medicaid programs. The increase was to the federal share of Medicaid costs, referred to as federal medical assistance percentage payments (FMAP).

In a call with state governors today, Secretary Sebelius reported that HHS will apply the ARRA increased FMAP to so-called clawback payments. The clawback payment is the amount states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). It is intended to offset some of the added expense to Medicare Part D of assuming drug costs for residents dually eligible for both programs. Prior to MMA, state Medicaid programs covered prescription drug costs for these beneficiaries. Because Medicaid is a state/federal matching program, the higher FMAP under ARRA results in a temporary reduction of the states’ share of spending and therefore in their clawback obligation.

This temporary adjustment in the clawback payments will be applied for the period October 1, 2008 through December 31, 2010. In his 2011 budget, President Obama calls for the FMAP increase established in ARRA to be extended through June 30, 2011.

“In asking Congress to extend the increased FMAP in his 2011 budget proposal, the President recognizes both the critical role Medicaid plays in the health of our most vulnerable citizens and difficulties states are experiencing given the economic downturn,” Secretary Sebelius said.

States make clawback payments monthly and CMS is currently reprogramming its billing system to calculate the new, reduced payments owed by states. The savings, which are retroactive to October 2008, will be deducted from what they otherwise would have owed going forward.

The table below shows each state’s estimated savings. Column B shows the state’s obligation under the pre-ARRA formula with column C showing the newly calculated payment, column D the total estimated savings to the state.

State (A)	Total Q1 FY 09 Thru Q1 FY 11 Clawback Based on Reg. FMAP (B)	Total Q1 FY 09 Thru Q1 FY 11 Clawback Based on ARRA FMAP (C)	Total State Savings/Fed. Cost Q1 FY 09 Thru Q1 FY 11 (D)
Alabama	$150,247,579	$106,425,199	$43,822,379
Alaska	$48,317,314	$38,286,755	$10,030,558
Arizona	$153,759,854	$108,954,983	$44,804,871
Arkansas	$87,089,886	$62,440,556	$24,649,330
California	$2,913,864,100	$2,238,430,401	$675,433,698
Colorado	$192,319,003	$150,066,687	$42,252,316
Connecticut	$296,665,054	$230,615,556	$66,049,498
Delaware	$34,099,374	$26,386,737	$7,712,637
District of Columbia	$25,602,876	$17,959,629	$7,643,248
Florida	$1,015,370,655	$732,819,868	$282,550,787
Georgia	$256,830,737	$186,189,524	$70,641,213
Hawaii	$60,409,856	$43,814,638	$16,595,218
Idaho	$46,562,615	$32,122,245	$14,440,370
Illinois	$875,508,052	$675,854,129	$199,653,923
Indiana	$209,694,287	$151,629,223	$58,065,064
Iowa	$162,359,071	$127,106,244	$35,252,826
Kansas	$113,478,227	$89,157,121	$24,321,107
Kentucky	$182,471,045	$127,408,848	$55,062,197
Louisiana	$203,392,153	$126,178,376	$77,213,777
Maine	$103,581,677	$75,744,571	$27,837,106
Maryland	$238,997,062	$187,197,783	$51,799,278
Massachusetts	$612,833,627	$480,102,616	$132,731,011
Michigan	$386,791,612	$285,445,457	$101,346,155
Minnesota	$360,083,533	$278,777,119	$81,306,414
Mississippi	$102,735,712	$65,989,013	$36,746,699
Missouri	$407,283,149	$299,443,677	$107,839,472
Montana	$28,771,325	$20,110,737	$8,660,588
Nebraska	$95,393,763	$76,664,267	$18,729,497
Nevada	$62,310,316	$45,031,768	$17,278,548
New Hampshire	$71,136,363	$56,982,733	$14,153,631
New Jersey	$696,147,055	$543,196,366	$152,950,689
New Mexico	$47,436,153	$33,768,936	$13,667,217
New York	$1,882,163,731	$1,474,399,935	$407,763,796
North Carolina	$552,941,188	$400,670,852	$152,270,335
North Dakota	$22,440,556	$18,259,530	$4,181,026
Ohio	$581,726,147	$430,246,974	$151,479,172
Oklahoma	$154,134,582	$106,156,483	$47,978,098
Oregon	$147,332,690	$108,155,974	$39,176,716
Pennsylvania	$1,000,611,930	$771,650,285	$228,961,645
Rhode Island	$97,366,309	$74,159,944	$23,206,365
South Carolina	$168,667,834	$117,154,008	$51,513,826
South Dakota	$31,593,895	$25,104,607	$6,489,288
Tennessee	$442,828,611	$321,494,820	$121,333,791
Texas	$777,317,414	$567,316,054	$210,001,360
Utah	$57,174,136	$39,826,114	$17,348,022
Vermont	$49,485,228	$36,881,632	$12,603,596
Virginia	$390,311,646	$304,575,535	$85,736,111
Washington	$359,451,673	$273,090,100	$86,361,573
West Virginia	$71,905,352	$48,544,797	$23,360,555
Wisconsin	$476,178,882	$358,970,479	$117,208,403
Wyoming	$23,393,068	$18,935,147	$4,457,921
TOTAL	$17,528,567,954	$13,215,895,031	$4,312,672,922