Category Archives: Nevada politics

Police Accountability: No one model and no single system

Crime Scene Tape

There was a meeting in Reno, NV between members of the community, representatives of Black Lives Matter, and law enforcement officers. That’s good. [RGJ]  It’s a start. Or, to put it another way it’s another step on a path forward which has the tortuous feel of a mountain trail with numerous cut backs.  We might be able to more fully address the issues related to policing our communities if we’d take some additional topics into consideration.

One of the most obvious topics is the use of force, in perhaps too many cases deadly force, and how police officers may be held accountable in controversial situations.  The importance of Tennessee v. Garner can’t be overestimated, and further, administrative and legal cases do seem to have an effect on policing policies and practices. [Hudson] However, public perception is also related to faith in the system, and the system is fragmented.

In Nevada, for example, how a citizen can report instances of police misconduct varies with each jurisdiction, and sometimes within a single metropolitan area.  Reporting a favorable comment about policing is very easy in Reno.  There’s a website form for that.  Reporting an instance of possible police misconduct isn’t as simple.  Reno, Washoe County, and Carson City each have their own process and requirements for filing an allegation of misconduct. [ACLU]  There are four ways to file a complaint in Reno, three ways in Washoe County, and only one way (in person) in Carson City.   The report information goes to the Internal Affairs Office in Reno, passes to the Sheriff’s office in Carson City, and through the Sheriff’s office in Washoe County.

The Accountability process is also a matter of local jurisdiction. There is a local Review Board in Las Vegas, which while it does have some investigative powers is confined to making recommendations only.  Even this improvement met with a critique from the Justice Department in a 2012 investigation:

“Metro’s Use of Force Review Board — currently a mix of residents and department personnel — needs revamping because of procedures the COPS Office found “outdated and insufficient.” To remedy the situation, the report recommends Metro create a stand-alone manual for the board, which would outline its purpose, operating procedures and clarify roles of the board’s members.” [LVSun] [DoJ] [DoJ Report pdf]

This wasn’t all the Department of Justice had to say on the matter in October 2012.   The report found that the Coroner’s inquest process related to the review of the use of deadly force was ineffective at the time. The District Attorney’s office needed more training and expertise related to investigating deadly force incidents, and while the Clark County DA had begun to review officer involved lethal shootings, and to issue decision letters, there were no letters for serious, non-fatal use of force incidents. [DoJ Report pdf]  The current accountability public perceptions may rest on how much progress has been made since the 2012 recommendations, and on the application of the review processes in the context of Nevada statutes on police use of force.

The public is beginning to perceive that investigations of police officers are quite different from those a private citizen can expect.  For example, in Las Vegas the officer will receive a 48 hour notice before an interview, and even if that notice requirement is waived it must be approved by the association.  Additionally, the officer will be provided with ALL evidence during an interrogation to facilitate correcting “inconsistencies.”  There are also contractual provisions allowing an officer terminated as a result of an investigation 30 days to appeal and to enter into binding arbitration. Written reprimands will be removed from the officer’s personnel file after 18 months; minor suspensions after 3 years, and major suspensions after 5 years.  There is to be no retention of investigation records in which the officer is exonerated, or the allegations are held to be unfounded, or un-sustained.   The contract in Las Vegas is about “average” in its provisions for police protection, with the major exception that the city is not exclusively liable for civil actions related to the incident.

There are some jurisdictions in which an officer cannot be interrogated for more than 6 hours in a given session, and may not be threatened with vile language or threats of demotion, transfer, or termination of employment. (Fort Worth)  Louisville, KY allows no threats, coercion, or promises made during an interrogation, and St. Petersburg, FL allows only one interrogation session.  [CTP interactive]

“Public Employee and Public Ideology” issues are also entangled in these topics.  There are some conservative voices only too pleased to blame teachers’ unions, for example, for allowing the retention of “bad apples.” However, these voices are strangely silent when the subject of police unions comes to the fore.  It is in no one’s best interest when any public employee is subjected to discriminatory, capricious, or arbitrary treatment regarding his or her demotion, dismissal, or refusal of re-employment.  However, when other public employees are alleged to have been responsible for the death or physical injury of another the notice and the interrogation limitations are not available to them, nor are the requirements that they have access to all the evidence collected prior to the interrogation.

Quis custodiet ipsos custodes?

That there is no single model and no single unifying concepts for police accountability means that each jurisdiction is left to its own devices to cope with community and police relations.  Some, like the Dallas PD, have done a better job than others, such as Baton Rouge and Ferguson, MO.

Perhaps we’d be well served to think outside the dotted lines at some tangential issues which exacerbate the situations in which both law enforcement and community members find themselves.  Let’s start with what is likely to be one of the most obvious.

Racism.  Could we at least recognize that it exists? Could we at least acknowledge that it informs some actions that are not necessarily overt? Remember the African American college student who was arrested in NYC for buying a belt the clerk and officers said he couldn’t possibly afford, and concluded that he’d thereby committed fraud? [HuffPo]  Or, the African American actor who was arrested for buying his mother a $1,350 watch, as a present for her college graduation? [DNAinfo]  These are simply more high profile illustrations of the problem as related by one of the participants in the Reno meeting:

“Don Dike-Anukam said he was glad he attended Sunday’s event and hopes others will consider what life is like when “the shoe is on the other foot.”

“It’s hard to explain to people who never had to literally prepare for a police stop or have been followed in a supermarket when you’ve done nothing wrong or know what it’s like to have that feeling of suspicion and done nothing wrong,” Dike-Anukam said. “It makes you a little angry and annoyed inside and sad at the same time.” [RGJ]

Combining racism and fear is a truly toxic mix. What of the police officer  knowing that he is dealing with a white person in a traffic stop who may be armed, and feels less insecure? Or, more insecure if the person in Black? Is the white citizen more innocent until proven guilty, or the Black citizen guilty until proven innocent?

Police as collection agents. One of the things that precipitated the mess in Ferguson, MO was the use of the police department as a collection agency in an effort to bolster the town budget.  In 2010 the Ferguson police department generated $1.4 million for the county treasury, almost 25% of the city’s $13 million budget. [RS]  To put the issue more bluntly:

“…when budgetary whims replace peacekeeping as the central motivation of law enforcement, who is more likely to write up more tickets, the good cop or the crummy one? When the mission of the entire department shifts from “protect and serve” to “punish and profit,” then just what constitutes good police?” [MJ]

Most of the incidents that initiated the current turmoil began as traffic stops and other very minor items in the grand scheme of things.  We’d be remiss if we didn’t ask how many of these stops were associated with increasing revenues for local governments? With fulfilling quotas of some kind? With “keeping the numbers up?”  None of this having much to do with good police work.

Police Training. Now, if we combine racism and revenue generation, then why are we surprised when minor incidents become major news?  One element which seems to need further discussion is the addition of de-escalation policies and training for police officers.

In March 2016, the Los Angeles Police Commission voted to implement a use of force policy emphasizing de-escalation and the use of minimal force in encounters with the general public. [LAcbs]

“One of the recommendations suggests the LAPD’s use-of-force policy be revised “to emphasize that deadly force shall only be exercised when reasonable alternatives have been exhausted or appear impracticable.

The revision in policy will also establish the expectation that officers redeploy to a position of tactical advantage when faced with a threat, whenever such redeployment can be reasonably accomplished in a manner consistent with officer and public safety.” [LAcbs]

Unfortunately, the police union doesn’t seem to be on board:

“Clearly this is not a collaborative process by the Police Commission,” he said. “We are very concerned that the recommendations as written may jeopardize officer and community safety. We’re afraid that this policy does not take into account the split-second, life-and-death decisions police officers must make in the field.”

An internal LAPD report was released earlier this month that found LAPD officers used force nearly 2,000 times last year, including 21 cases in which people were fatally shot. More than one-third of the 38 people who were shot by police were mentally ill. [LAcbs]

However, making those decisions is a function of training and experience, and if the training includes how to de-escalate a volatile situation then both the safety of the officer and the safety of the citizen could be improved.  It hardly seems fair to criticize an officer when the predominance of his or her training is consumed in fire arms training, and then complain when the person shoots first and faces the questions later.

Guns. Eventually it all comes back to guns.   Now, there’s research reported on the subject:

“The results were shocking: line-of-duty homicide rates among police officers were more than three times higher in states with high gun ownership compared with the low gun ownership states. Between 1996 and 2010, in other words, there were 0.31 officer fatalities for every 10,000 employed officers in low gun ownership states. But there were 0.95 fatalities per 10,000 officers in the high gun ownership states.” [WaPo]

Law enforcement officers “working in states with higher levels of gun ownership faced a greater likelihood of being shot and killed on the job compared with their peers in states with lower gun ownership,” the study concludes. The relationship was strong enough that every 10 percent increase in gun ownership correlated with 10 more officer deaths over the study period. [WaPo]

If we’re truly interested in the safety of our law enforcement personnel then we have to address what’s killing them. Guns.

This partial list of “Things To Think About” is a heaping portion of problems on our collective plate.  None of these discussion will be easy, or simple, or without rancor.  However, I don’t think that we can afford to ignore any of the elements.   Those who refuse to consider the possibility that there are problems in our contemporary system will not be convinced there is a necessity to address these topics; those who do should take heart that communities around the country, like Reno, are at least beginning the discussion.

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Filed under civil liberties, Gun Issues, Las Vegas, Nevada, Nevada politics, Politics, public safety, violence

And then they left town….

Gun violence by state “A House panel on Thursday rejected multiple efforts by Democrats to eliminate a budget amendment that has frozen nearly all government research into gun violence for 17 years.

During a markup of next year’s health spending bill, Republicans blocked two amendments that would have allowed the Centers for Disease Control and Prevention (CDC) to study gun-related deaths. Neither had a recorded vote. 

Eliminating the provision has become a priority for Democrats since the June 12 attack on a gay nightclub in Orlando, Fla., that killed 49 people — the nation’s deadliest mass shooting. 

The provision, known as the Dickey Amendment for former Rep. Jay Dickey (R-Ark.), was first enacted in 1996 after groups including the National Rifle Association (NRA) accused federal agencies of trying to advance gun control.”  [The Hill]

Nevada Representative Mark Amodei (R-NV2) is a member of the House Appropriations Committee but is not a member of the House Appropriations Subcommittee on Labor, Health, Human Services, and related agencies.

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Filed under Amodei, Congress, Gun Issues, Nevada politics, Republicans

Obstruction By Blue Slip: GOP assault on Federal Courts

Heller Blue Slip

Senator Dean Heller’s (R-NV) slip is showing, or rather it isn’t showing up. President Obama nominated Ann Rachel Traum to the Federal District Court (Nevada) on April 28, 2016.  So, where’s the blue form from the Senator’s office indicating the Judiciary Committee should move forward with this nomination?

One theory has it that not only are Senate Republicans blocking a Supreme Court nomination but they’re doing it down the line, right down to the overworked, understaffed federal district courts level.

“There are lots of GOP senators doing this. Sen. Dan Coats (Ind.) hasn’t turned in his blue slip for his judicial nominee, Myra Selby. Sens. Richard Shelby (Ala.) and Jeff Sessions (Ala.) haven’t turned in their blue slips for their nominee, Abdul Kallon. Sens. Lindsey Graham (S.C.), Tim Scott (S.C.), Dean Heller (Nev.), Richard Burr (N.C.), Thom Tillis (N.C.), Pat Toomey (Pa.) and Rand Paul (Ky.) haven’t turned in blue slips for their nominees, either. And Senate Majority Leader Mitch McConnell (R-Ky.) hasn’t turned in his blue slip for his nominee, Lisabeth Hughes.”  [HuffPo]

It isn’t like the current nominee isn’t qualified. The resume is remarkable:

“Anne Rachel Traum is a Professor of Law at the University of Nevada-Las Vegas William S. Boyd School of Law.  She is currently on leave from the law school and serving as Special Counsel in the Office for Access to Justice at the United States Department of Justice.  Professor Traum joined the University of Nevada-Las Vegas William S. Boyd School of Law faculty in 2008, and she has served as the Director of the Appellate Clinic since 2009.  She also served as the Associate Dean for Experiential Legal Education from 2013 to 2015.  From 2002 to 2008, Professor Traum served as an Assistant Federal Public Defender in the Federal Public Defender’s Office in Las Vegas, Nevada.  She served as an Assistant United States Attorney in the United States Attorney’s Office for the District of Nevada from 2000 to 2002, while on detail from the Environmental and Natural Resources Division of the United States Department of Justice, where she worked from 1998 to 2000.  She began her legal career as a law clerk to the Honorable Stanwood R. Duval, Jr. of the United States District Court for the Eastern District of Louisiana.  Professor Traum received her J.D. Order of the Coif and cum laude from the University of California, Hastings College of Law in 1996 and her A.B. with honors from Brown University in 1991.” [WH

This obstructionism is egregious on so many levels.  Politically, it’s the equivalent of a toddler’s temper tantrum – if we can’t have exactly the courts we want then we don’t want any.  This, in turn leads to the next layer of political idiocy.

It doesn’t do to complain about the time and expense required to litigate cases and at the same time keep courts short handed such that they cannot schedule hearings on a timely basis. This affects both plaintiffs and defendants in both civil and criminal cases.  Nor, are we merely speaking of the vacancies at the top of the judicial roster.

“While Senate battles over nominees to the Supreme Court and appeals courts draw more headlines, the less-noticed openings are increasing workloads and delaying trials in federal courts that take in hundreds of thousands of cases a year — compared with the 80 or so cases heard by the nation’s highest court.

Of 673 U.S. district court judgeships, 67 — or 10 percent — are vacant under President Obama, nearly twice as many as at this point of Republican George W. Bush’s presidency and 50 percent higher than at this time under Bill Clinton (D) or George H.W. Bush (R), according to data kept by the Administrative Office of the U.S. Courts.

The number of federally designated district court “judicial emergencies” — where seats carry particularly heavy caseloads or have been open for an extended period — is also roughly double what it was in May 2008 and May 2000, according to the administrative office.

Heavy caseloads in some places slow resolution of everything from commercial disputes to workplace discrimination claims to federal regulatory challenges, in which district court rulings are often the last word because most are not appealed.” [JDnom] (emphasis added)

Consider this last paragraph carefully.  “Commercial disputes” is one category worthy of attention – someone, somewhere, who is engaged in interstate commerce may not be getting paid in a timely fashion because there is no judge with docket time available to hear the case?  Someone, somewhere would like to challenge a federal regulation, but hasn’t the “float” required to engage in protracted litigation because of the docket backlog?

We do have a constitutional guarantee of a “speedy and public trial,” under the provisions of the 6th Amendment, but this applies only to criminal prosecutions – not to those commercial disputes, discrimination claims (and defenses), regulatory challenges, and other civil litigation.  We have a backlog, and it’s getting deeper:

“Combined filings for civil cases and criminal defendants in the U.S. district courts decreased by 28,836 (down 7 percent) to 361,689. Terminations once again held steady, declining by 2,634 (down less than 1 percent) to 347,828. Because filings exceeded terminations, the total for pending cases and defendants rose by 12,268 (up 3 percent) to 438,808.” [UScourts.gov] (emphasis added)

Pending civil cases are reported up by 5%, to 340,925 nationwide.  And, still the Senate Republicans will not act.

Senator Heller, Where is your blue slip?

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Filed under Heller, Judicial, Nevada politics, Politics

Amodei’s Land Grab

Amodei Privatization Land “Congressman Mark Amodei will give an update to the Elko City Council Tuesday on possible issues that might impact the City and Elko County, according to Assistant City Manager Scott Wilkinson.

Amodei’s topics have not been outlined for the City. However, past subjects have included lands issues and sage grouse.” [EDFP]

If he’s set on discussing land issues, then we might guess he’s off to thread another precarious choice between the Bundyite Bunch and the BLM.  Back in late April, 2014 Representative Amodei was praising the BLM for backing off the confrontation with the Rampant Bundys, recalling his words:

“That is a leadership-type thing where you say, ‘We are getting our butts kicked and we are taking our team off the field and getting out of the stadium,'” Amodei said, according to the Reno Gazette-Journal. “It’s not a win, but probably the right thing to do under the circumstances.” [LVSun]

Two years later Amodei’s tone changed, he didn’t support the Bundys and he definitely didn’t want to be labeled anti-park:

“Amodei, however, said the (1) report attempts to use the Bundy sideshow to score political points rather than take a serious look at important issues such as (2) land access, ecosystem health and local economies.

“They don’t speak for me on anything to do with public lands,” Amodei said of Bundy and his acolytes. (3) “I want it to be about the resources, not about some guy who is or isn’t paying his grazing fees.” [RGJ] (numbering added)

Parse with us now. (1) When faced with a report bearing uncomfortable factual inclusions, such as Amodei’s opposition to funding and maintaining national parks and monuments, deflect the issue to the Bundy Bunch – who want no federal involvement in public land administration (grazing, forests, parks, monuments, …) and announce one’s inclination to talk about substantive land issues.  The 2nd District Representative had an opportunity to vote on the SHARE Act, a privatization proposal in Congress this year, but was absent for the vote.

“Representative Rob Wittman (R-VA) sponsored H.R. 2406, the Sportsmen’s Heritage and Recreational Enhancement (SHARE) Act of 2015, which contains harmful measures undermining the National Environmental Policy Act (NEPA), the Wilderness Act, and other bedrock environmental laws. The bill includes language that could allow the use of motorized vehicles, road construction, and other forms of development within protected wilderness areas, and it blocks input from public stakeholders in National Wildlife Refuge management decisions. This legislation also includes provisions that would weaken the EPA’s ability to regulate toxic lead in ammunition, fishing equipment. Additionally, this bill would undermine international commitments to combat ivory trafficking, thwarts our ability to effectively manage marine resources, and cuts the public out of management decisions impacting hundreds of millions of acres of public lands. On February 26, the House approved H.R. 2406 by a vote of 242-161 (House roll call vote 101). NO IS THE PRO-ENVIRONMENT VOTE.” [LCV] (emphasis added)

(2) Representative Amodei has the big three listed — “land access, ecosystem health, and local economies.” However, in terms of access notice the underlining in the SHARE bill – when management decisions are to be made the PUBLIC is cut out of the process. This raises the question that if we are speaking of public access to public lands and the public is cut out of the management decision process, then whose access are we talking about?  Since the GOP sponsored bill passed the GOP controlled Congress, then it’s reasonable to assume the GOP doesn’t want input from PUBLIC organizations concerning management decisions – leaving the field (literally?) to the mining, logging, privatization, and other commercial interests?

And, if rivers are dredged or fouled, forests are cut down, wildlife is endangered, hunters are denied access, fishing enthusiasts are turned away, then it must be for the sake of the “local economies?” Unfortunately, Representative Amodei’s comments as reported offer no explication of his priorities.

(3) But then, there’s Representative Amodei’s infamous quote: “…we do understand their frustration with increasingly heavy handed federal agencies that continue to violate the rights of hardworking American farmers and ranchers.” [RGJ] Are heavily armed men taking over a federal wildlife refuge and threatening violence just “frustrated?”  So, perhaps it would be logical to infer that Amodei’s heart is with the “frustrated” members of those “local economies” which seek to exploit public resources?

Amodei is quick to cite his support for the National Park Service budget, and his support for the hazardous fuel mitigation efforts on public lands, but part of what got him on the Anti-Park list is explained: “Amodei landed on the list for sponsoring legislation that would give the state control of 7.2 million of the approximately 58 million acres of federally controlled land in Nevada..[RGJ]

It doesn’t take too much imagination to see that cash strapped states (like Nevada) might not eventually want to capitalize on the exploitation of public lands in the state, quite possibly at the expense of small ranching concerns, outdoor sports participants, and wildlife in particular.

A sneak peak might be on display with his bill to place BLM lands in trust with Nevada tribes:

“The House Natural Resources Committee approved the Nevada Native Nations Land Act, H.R. 2733, which Amodei introduced to provide more opportunities for economic development and protection of natural resources in the regions.

“(Wednesday’s) vote puts us one step closer to placing Nevada public lands back into local control — rather than in the hands of Washington bureaucrats,” Amodei said. “My bill carefully balances the unique needs of our Nevada tribal nations with those of local ranchers, land owners and businesses.” [RiponAdv] (emphasis added)

There he goes again, getting land out from under the “Washington Bureaucrats.”  The only salvation in this legislation is that Native Americans, who generally have a better standard of stewardship than the Koch Brothers,  are the ones holding the lands in trust.  We might also safely conclude that this “one step” is the first of many in which Representative Amodei seeks to place Nevada public lands under local control.

From local it’s one more step to private.

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Filed under Amodei, Interior Department, koch brothers, National Parks, Native Americans, Nevada politics, public lands, Reservations, Rural Nevada

Grab the Money and Go: Nevada School Funding Case Scheduled

Turkey

It’s a turkey, no matter how one looks at it – the proposal for parents to be able to grab public money for “private” education in the state of Nevada and run off to do heaven only knows what with it.  And, now the case comes to the courts.  [LVRJ]

“The law passed by the Republican-controlled 2015 Legislature and signed by Gov. Brian Sandoval allows parents to set up education savings accounts to receive a portion of state per-pupil funding and use the money, about $5,100 annually, to send their children to private school or pay for other educational options. The program, administered by the state treasurer’s office, has received more than 6,000 applications.

A group of parents sued in Carson City, arguing it will illegally divert money from public schools. A Carson City judge in January agreed and issued an injunction.

The ACLU challenged the law on separate grounds, claiming it violates a constitutional prohibition against using money for sectarian purposes. A Clark County judge last month rejected those arguments and upheld the law.” [LVRJ]

I’m not at all sure why the ACLU case didn’t have a better outcome, because the Nevada Constitution is very clear about prohibiting public funds for sectarian use.   Additionally, I’m a bit fogged about why the ultra-conservatives in Nevada would want to allow funds for potentially radical religious instruction of any stripe.  There’s a question here – would these same people be so supportive if the private school receiving the money were, say, a madrasah?

And, it’s notable that we aren’t talking about peanuts here.  If 6,000 families each grab $5,100 every year from taxpayer funds for private schooling, then we’re speaking of some $30,600,000, or $61,200,000 for the biennium.

If  the idea is to bankrupt public education and then privatize the remnants, this is a perfect formula.  Complain that the public schools are not performing to some artificially established standard, then promote the creation of private schools, followed hard by the transfer of funds away from public education into those private “reformers,” and perpetuate the cycle of under-funded public  schools trying to compete with corporation sponsored private ones.  There’s no way for the public schools to win, and that’s precisely what the privatizers have in mind.

Stay tuned, the Nevada Supreme Court will hear the case on July 29, 2016.

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Filed under education, nevada education, Nevada judiciary, Nevada legislature, Nevada politics, privatization, profiteering

And They Voted To What? House GOP wants to drop the new fiduciary rule

Money Pile 2

The Republican leadership of the U.S. House of Representatives did try to do some business in the midst of the Democratic representatives’ sit in, and a miserable bit of business it was.

“House Republicans on Wednesday failed to muster the two-thirds majority needed to block the Obama administration’s controversial standards for financial advisers.  The House voted 239-180 to block the fiduciary rule, well more than 40 votes short of the total needed.

Wednesday night’s vote came as Democrats staged a sit-in on the House floor, starting around nearly 12 hours earlier, to push for a vote on legislation to prevent terror suspects from buying guns.”  [TheHill]

There’s a little story about priorities herein.  While the Democrats were trying to get the leadership to schedule votes on gun safety legislation, the Republicans were trying to make it easier for financial advisers to rip people off. [TP]

Let’s try to make this as simple as humanly possible.  “Fiduciary” /fəˈdooSHēˌerē,-SHərē/, “ involving trust, especially with regard to the relationship between a trustee and a beneficiary.”   Think of that pile of money in the graphic above as your savings. You have trusted a financial adviser to tell you the best investments you can make to get a good return on your savings, especially for your retirement account.   You are trusting that what your investment and/or financial adviser is telling you is in your best interest.

The Department of Labor has drafted a rule to require your financial adviser to act in your best interest regarding your investments – and not to give you advice on financial products that will do more for the investment advisers than they will do for you.  In short, it’s a matter of trust —  you should be able to trust what your financial adviser is telling you. You should be able to trust that the advice isn’t intended to feather the nests of the investment advisers instead of yours.

So, what have the Republicans been doing?  Return with us now to the Senate side of the Capitol building.  On May 24, 2016 the Republican controlled Senate voted to kill the Labor Department rule. [vote 84]  The vote was 56-41, obviously not sufficient to over-ride the promised veto.  And, who voted along with other Republicans to kill the rule? None other than our own Bankers’ Boy, Senator Dean Heller (R-NV).

HJ Res 88 Senate Vote

Now, let’s return to the House side of the Capitol Building.  HJ Res 88, “ On disapproving the rule submitted by the Department of Labor relating to the definition of the term “Fiduciary,” on passage, the objections of the President to the contrary notwithstanding… [vote 338] And who from the great state of Nevada voted to kill the rule?  Representatives Mark Amodei (R-NV2), Cresent Hardy (R-NV4), and Joe Heck (R-NV3).  Who as a member of Nevada’s congressional delegation did NOT vote to allow financial advisers to act in their own best interests rather than yours – Representative Dina Titus (D-NV1). The attempt to overturn the Labor Department rule failed 239-180.  The Republicans needed a 2/3rds majority to get rid of the rule, and thanks to Representative Titus and 179 other members of the House they didn’t get it.

In spite of the Republicans’ best efforts – your financial adviser will now have to offer investment advice based on what is in YOUR best interests – and not peddle financial products that will garner fees, kickbacks, and other “revenue enhancement” for the advisers.

And, THIS is what the Republicans thought was more important than scheduling votes on gun safety in America.

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Filed under Economy, financial regulation, Heck, Heller, Nevada politics, Republicans

Senator Heller’s Choke Point

Heller Amendment Operation Choke Point

One thing in life is almost more certain than death and taxes – if there is legislation that the banking industry wants then Senator Dean Heller (R-NV) will be quite happy to sponsor it, carry water for it, vote for it, and then remind anyone who is still listening how he’s a Man for the Consumers because he once voted against the “bail-out.”   To see Senator Heller’s latest foray into playing the Banker’s Boy one needs to dig a bit, unearthing S.Amdt 4715 to S.Amdt 4685 amending HR 2578, the Commerce, Justice, Science and Related Agencies Appropriations Act of 2016.

Senator Heller has teamed up with Senators Vitter, Crapo, Paul, Lee, and Cruz to insert the following: 

Sec. __.  None of the funds made available in this Act may
    be used to carry out the program known as “Operation Choke
    Point”. [Cong.gov]

What is Operation Choke Point and what was it intended to do?  The Department of Justice was disturbed by reports that fraudulent merchants had found a way around federal banking regulations and once they inserted themselves into the banking system they could team with payment processors to initiate debit transactions against consumer’s accounts and have the amounts transmitted to their own accounts.

Even more disturbing, the Department’s investigations revealed that some third party processors knew that the merchants with whom they were working were frauds but they continued to process their transactions in direct violation of federal law.  [Harris pdf]

So, for example, Quickie Check Instant Lending could get a customer to sign a loan agreement for some outrageous amount of interest, and then hand the item over to a payment processor.  With some cooperation from the bank (usually garnered by providing a handsome fee thereto) the payment processor would have the bank make automatic debits to the person’s account.  Or, say, the Fast Weight Loss Pill Factory got an order from John Q. Public, and the payment processor + bank would insure that John’s bank account was regularly debited for the fraudulent product, or for products not delivered, or whatever scam was being run.

The idea behind Choke Point was to gather information from banks which appeared to be engaged in fraud, or might have evidence of fraudulent conduct by others. Subpoenas were issued, and indeed there were some banks doing some rather obnoxious business.  [See Fair Oaks Bank]  The Fair Oaks Bank had received hundreds of notices from consumers’ banks that the people whose bank accounts were being charged had NOT authorized the payments; had evidence that more than a dozen merchants served by the payment processor had “return rates” over 30% and one had a “return rate” over 70%; and, Fair Oaks had evidence of efforts by merchants to conceal their real identities.

One of the obvious targets are payday lenders who were operating in violation of state regulations regarding the amount of interest that could be charged to a customer.  As the New York Times explained back in January 2014:

“The new, more rigorous oversight could have a chilling effect on Internet payday lenders, which have migrated from storefronts to websites where they offer short-term loans at interest rates that often exceed 500 percent annually. As a growing number of states enact interest rate caps that effectively ban the loans, the lenders increasingly depend on the banks for their survival. With the banks’ help, the lenders that typically work with a third-party payment processor that has an account at the banks are able, authorities say, to automatically deduct payments from customers’ checking accounts even in states where the loans are illegal.”

The object of Choke Point was to cut the insidious relationship between the banks, the processors, and the fraudsters – or choke it off.  If one wanted to promote the interests of the payday lenders, third party processors, and banks willing to turn a blind eye toward the nature of these transactions – there are fewer ways much better than to hamstring the Department of Justice’s investigations into these kinds of transactions.  However, that is precisely what Senator Heller is proposing.

The DoJ’s investigations were also reviled because some of the ammosexuals among us got the idea that if pawn shops couldn’t use the untraditional routes for payment, therefore the whole operation was one giant gun grab. Senators Cruz and Lee bought this horse and have been riding it for some time now.  One quick visit to Politifact will demolish the SunTrust Bank/Brooksville Pawn shop story that made the rounds in 2015.

“SunTrust announced in a Aug. 8, 2014, press release that the bank had “decided to discontinue banking relationships with three types of businesses – specifically payday lenders, pawn shops and dedicated check-cashers – due to compliance requirements.” The bank still works with firearms dealers, according to the release.” [Politifact]

Hence, the policy decision made by SunTrust was no more “anti-gun” than it was anti-jewelry, anti-guitar, anti-CD, anti-work out equipment, or anything else  in a pawn shop.

There are some salient features of this story – once again Senator Heller who delights in his description as a “moderate,” has teamed up with some of the most radical members of the GOP in the U.S. Senate (witness his previous alliances with Senator Jim DeMint (R-SC).  Once again Senator Heller has sided with the payday lenders against any action taken to regulate their relationships with their customers. And, once more Senator Heller has demonstrated his willingness to carry any water in any bucket the American Bankers’ Association wants him to transport to the Senate floor.

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Filed under banking, Economy, financial regulation, fraud, Heller, Nevada politics