Author Archives: Peter Galuszka

Ain’t Too Proud to Beg

temptationsBy Peter Galuszka

The World Wide Web is a wonderful thing. It can provide useful, nearly instantaneous information, build communities and topple dictators.

It has also wreaked havoc on how journalists and commentators gather and disseminate original content. Tens of thousands of journalists have lost their jobs because the old business model that paid them has collapsed.

Blogging, fashionable for two decades ago, is, of course an offshoot of the Net. It is based on slicing and dicing other people’s original content.

Jim Bacon and I do that on this blog, but we also accomplish a lot more. We create our own original content that often is unique. Between us, we have more than eight decades of experience and hope that shows in our work.

We have been working mostly for free, but we need to pay our bills. Some blogs and Net services have paywalls or require subscriptions.  We’re not asking for that, but we are requesting that you consider making a contribution so we can keep on doing what we have been.If you would like to contribute you can do so by looking at the payment icon on the upper left of the home page.

Many thanks.

Dominion’s Strange Ploy to Avoid Audits

dominion By Peter Galuszka

Dominion Virginia Power appears to be getting its way with strange legislation to freeze its rates and avoid regulatory audits for the next six years.

The state senate will hold hearings today on a bill that would cancel biennial rate reviews by the State Corporation Commission to 2020. Dominion’s rates will be frozen and couldn’t go up or down.

The utility’s reasoning is that it may have to spend a lot to comply with unfinished regulations by the U.S. Environmental Protection Agency that would cut carbon emissions from coal plants by 30 percent by 2030 compared with 2005 levels. Always looking out for its customers, Dominion doesn’t want to stick them with astronomical rate hikes resulting from the EPA rules.

The bill was drafted by Dominion, the state’s largest donor to political campaigns, by Sen. Frank Wagner (R-Virginia Beach) who is the go-to guy for laws favoring energy firms.

In 2004, Wagner sponsored legislation that allowed companies the right to survey land for proposed natural gas pipelines without having to obtain the owner’s permission first. The nettlesome law figures heavily in the current battle by property owners over proposed gas pipelines in the state, notably the $5 billion Atlantic Coast Pipeline in which Dominion is a partner. The pipeline would take gas 550-miles from West Virginia, through Virginia and on into North Carolina. Dominion has sued more than 240 landowners who have refused to grant access. They are challenging the constitutionality of the pipeline law in federal court.

There’s a lot odd about Wagner’s current bill. The first problem is that it would supposedly protect Dominion customers from federal rules that aren’t even final. It is weird that Dominion would use the excuse that it might be socked with huge costs by having to shutter coal-fired plants. Surprise, surprise! Dominion announced several years ago that it would shut down aging coal units in Yorktown and Chesapeake. So, what’s the connection between the new EPA rules and coal-plant closures?

Atty. Gen Mark Herring says that the Wagner bill is a ploy to keep Dominion from having its profits overseen by the SCC because the utility might have a $280 million surplus that ordinarily might have to go back to ratepayers. After  a 2011 SCC rate review, Dominion had to pay back $78 million to customers.

The other oddity is why Dominion and Wagner are suddenly so scared about exploding costs brought on by the EPA. After all, prices for natural gas, which fuel some of Dominion’s units and is  less polluting than coal, are very low – so low that the fracking boom that released a flood of cheap gas is slowing down considerably.

Environmental groups say that the Wagner bill is a gift for Dominion. The senator has received more than $43,000 in donations from the utility over the years.

The Many Problems of Offshore Drilling

deepwaterBy Peter Galuszka

Almost five years after the infamous Deepwater Horizon disaster in the Gulf of Mexico, President Barack Obama has again proposed opening tracts offshore of Virginia and the southeastern U.S. coast to oil and natural gas drilling.

The plan poses big risks for what may be little gain. Federal surveys show there could be 3.3 billion barrels of crude oil and 31.3 trillion cubic feet of natural gas in the potential lease area stretching from Virginia to Georgia.

Energy industry officials praised the plan while complaining it doesn’t go far enough. Environmental groups including the Sierra Club and the Chesapeake Bay Foundation condemned it. Besides the ecological risk, the move is a step away from refocusing energy on renewables that do not lead to more carbon emissions and climate change.

Obama’s plan would restrict drilling to areas more than 50 miles off the coast. This is a sop to the Navy and other military which conduct regular exercises offshore and to the commercial and sports fishing industries.

Is the restriction worthwhile? It is generally easier for oil rigs to be placed in shallow water and much of the areas off of Virginia and northeastern North Carolina and off of South Carolina and Georgia are in plateaus that aren’t very deep – maybe just a few hundred feet. Yet the Atlantic takes a huge plunge not far off of Cape Hatteras, descending as much as two miles down.

Drilling in deep water presents special problems for oil companies involving high pressure and high temperatures. That was the case with the Deepwater Horizon tragedy on April 20, 1010 that killed 11 workers. One big factor that a blowout preventer, designed to shut down the rig if drilling hits abnormally high levels of pressure, didn’t work completely. The rig was in 5,000 feet of water and crude spewed uncontrolled. Winds from the south washed the oil towards land and polluted nearly 500 miles of coastline in Florida, Alabama, Mississippi and Louisiana. An estimated 49 million barrels of crude were released.

oil-drilling-mapAlthough it isn’t certain if energy firms would drill in the very deep waters off of North Carolina, there is cold comfort in the fact that the Deepwater rig was only 48 miles from shore. In other words, it would have been too close in for the latest plan involving the southeastern coast. Supposedly, blowout preventers have been upgraded but there were still spills involving them off of Brazil and China post-Deepwater.

If something like that happened closer to home, it is not exactly certain where the oil would go. Winds can blow from the ocean and currents are very fickle. The Labrador Current might tend to push spilled oil back onto environmentally sensitive shoreline while the Gulf Stream might tend to take the spilled oil out to sea.

There is no question that drilling off any of the southeastern coast would be of some benefit to the now-struggling Tidewater economy since it has plenty of steel-bending industries, an able workforce and no significant bridges to pass under to reach deep water. It might help since the defense sector is winding down, but who knows what world conflicts will be like in 2025. Hampton Roads would be a more logical staging area than other ports such as Wilmington, N.C., Charleston or Savannah.

There’s a rub, however. The 3.3 billion barrels of estimated reserves isn’t that much. It is a fraction of the total estimated reserves in the country. Energy sector officials claim there is probably much more. Okay, fine, but no one knows for sure. The natural gas reserves involved are also somewhat small – just a fraction of the estimated reserves in the U.S.

It’s not the first time offshore drilling has come up locally. There was a big push for it in the late 1970s, prompting oil rig giant Brown & Root to buy up land near Cape Charles for fabricating rigs. Nothing happened and much of the land now is used for a luxury golf community. Obama was supposed to back lease sales in 2010 but then Deepwater happened. This begs the question – if the offshore petroleum is so valuable, why has it taken so long?

Yet another issue is what cut Virginia would actually get from offshore drilling. There was a flap a few years ago when offshore drilling was being pitched. Some revenues to states from offshore petroleum production are computed by how much shoreline a state has. In Virginia’s case, it is not much, at least when compared to North Carolina. Virginia politicians have pointed this out and hope for some adjustment.

No one can predict energy markets a decade from now. For instance, no one knew that hydraulic fracturing would increase petroleum production by 64 percent and possibly make the U.S. a petroleum exporter for the first time since the 1970s. Granted it is a rock and a hard place kind of choice. Fracking is fraught with pollution problems just as offshore drilling is.

There are certain to be plenty of lawsuits over the offshore plan and economics will likely determine its future. An important choice is whether it is worth risking Virginia’s military, resort and fishing businesses for Big Oil whose promise is uncertain when it comes to offshore drilling.

The Strange Story of Health Diagnostic Laboratory

HDL's Mallory before her fall.

HDL’s Mallory before her fall.

By Peter Galuszka

The biggest problem facing the health care industry in Virginia and the rest of the country isn’t Obamacare or the lack of new medical discoveries. It the lack of transparency that hides what is really going on with pricing tests, drugs and hospital and doctors’ fees. Big Insurance and Big and Small Pharma cut secret deals. We are all affected.

I’ve been wanting to blog about this – especially after Jim Bacon’s recent post on the supposed tech trend in health care – but I wanted to wait until a story I’ve been working on for a few weeks was posted at Style Weekly, where I am a contributing editor.

In it, I explore the strange story of Health Diagnostic Laboratory, a famed Richmond start-up that went from zero to $383 million in revenues and 800 employees in a few short years. The firm said it was developing advanced bio-marker tests that could predict heart disease and diabetes long before they took root. HDL’s officials thought it would transform the $1.6 trillion health care industry.

Richmond’s business elite applauded HDL founder Tonya Mallory, a woman who grew up just north of the city and had the strong personality and drive to create the HDL behemoth. Badly wanting a high tech champion in a not-so high tech town, the city’s boosters did much to publicize HDL and Mallory, believing they could draw in more startups.

The story was too good to be true. It start to deflate last summer when the federal government noted that HDL was one of several testing labs being probed for paying doctors $17 for using HDL tests for Medicare patients when Medicare authorized $3 per test. Mallory resigned Dept. 23. Several lawsuits by Mallory’s former employer, Cigna health insurance and another have accused HDL of fraud. HDL has responded in court.

One legal picture suggests that HDL wasn’t a true tech startup but a new firm that stole intellectual property and sales staff. HDL says no, but its new leader Joe McConnell has taken steps to reform sales and marketing and is said to be working with the U.S. Department of Justice to settle a federal investigation.

The HDL affair raises issues about the inside marketing and apparent payoffs that are the biggest problem the health care industry faces. It doesn’t matter what kind of “market magic” combined with new technology comes up if something like this keeps happening.

This is all the more reason for a universal payer system. That may be “socialized” medicine but in my opinion it is the only logical way to go.

Campus Rapes Must be Reported to Police

hunting groundBy Peter Galuszka

You can’t have it both ways.

The Virginia General Assembly is taking steps to make it mandatory that officials at state universities report to police allegations of sexual assault, except for crisis counselors.

The move follows the incident at the University of Virginia which was turned upside down by a flawed report in Rolling Stone magazine that a female student had been gang raped in 2012.

Although there are strong doubts that the rape took place in that case, it broached the issue that if a student reports rape on campus, school administrators may not be inclined to do much about it. The assaults often occur at parties where alcohol is readily available.

After the Rolling Stone bombshell hit, U.Va. officials temporarily suspended activities at fraternities and sororities to sort matters out. The university now has rules that ban mixed drinks and require sober monitors at Greek parties.

That’s a good step, but I think the General Assembly is wise to take it a step further with its requirement that alleged rapes be referred to law enforcement. Why not? Rape is a serious felony nearly up there with murder. Would school officials not report that one student had apparently killed another? Crisis counselors would be exempt from the requirement, so students in pain and unsure of what to do would still have a protected outlet to find help.

The Washington Post editorialized today that the legislature should take slower steps when considering new laws to help prevent campus rape. The newspaper believes that pushing ahead with mandatory rules on reporting rape would make victims not want to report anything at all. It wants to wait until a state commission tasked with reviewing campus rape issues deliver its report.

The Post is wrong here. Rape is rape. Of course it is incredibly personal, but if it is a crime, it should be reported as one. Doing so not only would affirm the rights of the victim, it also might help exonerate supposed perpetrators who have been falsely accused.

Having rape regarded as a true crime would demystify it and allow all sides to deal with it properly. And it’s not as if rape is suddenly no longer a college problem after the Rolling Stone story evaporated. A new documentary released at the recent Sundance film festival called “The Hunting Ground” is said to uproot rape cultures at schools such as Harvard, Notre Dame and the University of North Carolina at Chapel Hill.

If the film is accurate, Virginia legislators are right to address the problem, regardless of how the University of Virginia situation played out.

Incidentally,  poll taken by the Judy Ford Wason Center for Public Policy at Christopher Newport University shows that 90 percent of voters survey think the police must be informed  of campus rape allegations rather than have them handle internally. The results were released today.

The Importance of “Selma”

Selma_posterBy Peter Galuszka

“Selma” is one of those fairly rare films that underline a crucial time and place in history while thrusting important issues forward to the present day.

Ably directed by Ava DuVernay, the movie depicts the fight for the Voting Rights Act culminating in the dramatic march across the Edmund Pettus Bridge in Selma, Ala. in 1965. It portrays the brutality and racism that kept Alabama’s white power structure firmly in charge and how brave, non-violent and very smart tactics by African-American agitators shook things loose.

Holding it all together is British actor David Oyelowo as Dr. Martin Luther King Jr. Oyelowo’s subtle and vulnerable approach while dealing with infighting among his colleagues and revelations of his marital infidelities contrast with his brilliant skill at oratory. During the two hours or so of the film, Oyelowo’s booming speeches and sermons never bored me. By contrast, the recent “Lincoln,” the Steven Spielberg flick filmed in Richmond, was a bit of a snoozer.

To its credit, “Selma” never gets too clichéd even with the extremely overexposed Oprah Winfrey assuming roles as a film producer and also as an actress portraying a middle-aged nursing home working who gets beaten up several times protesting white officials who kept her from registering to vote.

“Selma” has been controversial because nit-picking critics claim the film misrepresents the role President Lyndon B. Johnson played in getting the Voting Rights Act passed. The film shows him as reluctant and the Selma event was staged to push him to move proposed legislation to Congress. A series of LBJ biographies by highly-regarded historian Robert A. Caro show the opposite – that Johnson, a Southern white from Texas — was very much the driver of civil rights bills. In fact, his deft ability to knock political heads on Capitol Hill was probably the reason why they passed. It was a feat that even the Kennedys probably couldn’t have achieved.

One scene in the movie bothered me at first. King leads protestors to the Selma court house to register. When a brutal sheriff stands in their way, they all kneel down on the pavement with their arms behind their heads in a manner very reminiscent of last year’s protests against a police killing in Ferguson, Mo.

I thought, “Hey, I don’t care how they present LBJ, but fast-forwarding to 2014 is a bit of stretch.”

Then I decided that maybe not, history aside, the same thing is really happening now. There’s not just Ferguson, but Cleveland, Brooklyn and other places. The Richmond Times-Dispatch reports this morning that over the past 14 years, police in the state killed 31 blacks and 32 whites. Only 20 percent of the state’s population is black. Now that is a disturbing figure.

Another disturbing allusion to the present is the widespread move mostly by Republican politicians in the South and Southwest make it harder for people to register to vote. In one move scene, Oprah Winfrey wants to register before an arrogant white clerk. He asks her to recite the Preamble to the U.S. Constitution. She does. He then asks her how many judges there are in Alabama. She gives the correct number. He then demands that she name all of them, which very few might have been able to do. She is rejected.

The moves to blunt new voters today is focused more on Hispanic immigrants but it is just as racist and wrong. And, Virginia is still stuck with the anti-voter policies of the Byrd Organization that was in power at the time of the Selma march. The idea, equally racist, was to keep ALL voters from participating in the political process as much as possible. That is why we have off-year elections and gerrymandered districts.

I was only 12 years old when Selma occurred but I remember watching it on television. I was living at the time in West Virginia which didn’t have that much racial tension. But I do remember flying out of National Airport in DC on the day that King was assassinated. The center of town, mostly 14th Street, appeared to be in flames.

The Real “War on Coal”

Blankenship at 2009 Labor Day rally

Blankenship at 2009 Labor Day rally

By Peter Galuszka

Over in West Virginia, some things never seem to change.

Families of the 29 miners killed on April 5, 2010 at Massey Energy’s Upper Big Branch are asking a federal judge to lift her gag order so they can testify before West Virginia legislators considering tougher rules that would make it easier for workers to sue employers over job-related injuries and deaths.

U.S. District Judge Irene Berger issued the gag order last year after Donald L. Blankenship, the former chief of Richmond-based Massey Energy, was indicted on four criminal charges for his role in the disaster – the worst one in 40 years. He is scheduled to go on trial in Beckley on April 20.

The question seems to be that the judge is protecting Blankenship’s rights over those of the people hurt by his management. It is not really news in the Mountain State that has always supported Coal Barons over workers. It’s a weird, neo-colonialist thing that never seems to change.

This month, Berger denied a move by several news agencies, including the Charleston Gazette and The Wall Street Journal, to lift the gag order.

As head of Massey Energy, which has since been taken over by Bristol-based Alpha Natural Resources, Blankenship was a true publicity hog. He was never shy about pushing his arch-conservative, pro-business views or bankrolling politicians and judges. Worrying about protecting his legal rights at the expense of free speech is a real travesty.

Yes, there is a “War on Coal” – but the other way around. The conflict is how coal bosses wage war on their employees and their families.

Interview: McAuliffe’s Economic Goals

 maurice jonesBy Peter Galuszka

For a glimpse of where the administration of Gov. Terry McAuliffe is heading, here’s an interview I did with Maurice Jones, the secretary of commerce and trade that was published in Richmond’s Style Weekly.

Jones, a graduate of Hampden-Sydney College and University of Virginia law, is a former Rhodes Scholar who had been a deputy secretary of the U.S. Department of Housing and Urban Development under President Barack Obama. Before that, he was publisher of The Virginian-Pilot, which owns Style.

According to Jones, McAuliffe is big on jobs creation, corporate recruitment and upgrading education, especially at the community college and jobs-training levels. Virginia is doing poorly in economic growth, coming in recently at No. 48, ahead of only Maryland and the District of Columbia which, like Virginia have been hit hard by federal spending cuts.

Jones says he’s been traveling overseas a lot in his first year in office. Doing so helped land the $2 billion paper with Shandong Tranlin in Chesterfield County. The project, which will create 2,000 jobs, is the largest single investment by the Chinese in the U.S. McAuliffe also backs the highly controversial $5 billion Atlantic Coast Pipeline planned by Dominion because its natural gas should spawn badly-needed industrial growth in poor counties near the North Carolina border.

Read more, read here.

(Note: I have a new business blog going at Style Weekly called “The Deal.” Find it on Style’s webpage —   www.styleweekly.com)

Whatever Happened to “Boomergeddon?”

rush_limbaugh5By Peter Galuszka

Attention ditto-heads!

Before President Barack Obama’s State of the Union address last night, there was an interesting piece on CNN of hard-line conservatives claiming two years ago that the U.S. economy would collapse if Obama were re-elected.

They claimed that the U.S. faced uncontrollable government spending and ever-growing budget deficits. Obama’s efforts to kick-start the economy were just one missfire after another. Don’t believe me? Look up a zillion posts in Bacon’s Rebellion written by the usual suspects.

My favorite segment on the CNN report was radio talk show host Rush Limbaugh making his usual dire predictions about our plunge to Boomergeddon:

“How long does this country have if Obama wins? We’re headed toward an economic collapse and we are the leader of the world. ….If Obama’s re-elected, it will happen. There’s no IF about this. And it’s gonna be ugly. It’s gonna be gut-wrenching, but it will happen. The country’s economy is going to collapse if Obama is re-elected. I don’t know how long: a year and a half, two years, three years.”

Well we’re almost there and guess what? Obama felt comfortable enough strong economy last night to rebrand himself as a liberal and push programs to finally help out the middle class. They include a more fair tax system and helping make community college study free. In a University of Richmond poll in last year’s fourth quarter, most of the 62 chief executive officers of Central Virginia companies said they had “strong optimism” about the country’s brightening economic picture.

What about deficits? Well, not to raise any names associated with this blog, but last October, the budget deficit had dropped to its lowest level since the Great Recession. It had fallen to $483 billion in f/y 2014. That’s only 2.8 percent of GDP and less than the average of the previous 40 years, the U.S. Treasury Department reported.

Hmm. Does anyone have a copy of the book “Boomergeddon?” I can’t find mine and want one as a keepsake.

Back to Pork at Ft. Pickett

fort pickettBy Peter Galuszka

It was curious that Gov. Terry McAuliffe, while emphasizing that the state needs to wean itself from the sweet milk of federal spending, pushed a very interesting government project in the piney woods of Nottoway  and three other counties.

In his speech to the 2015 General Assembly on Wednesday, McAuliffe said he was “thrilled to help convince the State Department and the General Services Administration to choose Fort Pickett as the home of the Foreign Affairs Security Training Center, bringing as many as 500 jobs and millions in investment along with it.”

The U.S. State Department has been trying for years to get an adequate training facility for its guards and U.S. embassies and consulates around the world. The U.S. Marines they use are pretty much ceremonial and the deployment of private armies such as the former Blackwater of Moyock, N.C. is fraught with problems as several recent high-profile court trials attest.

The need for well-trained, non-privatized guards was underlined on Sept. 11, 2012 in the bloody siege of the U.S. consulate in Benghazi, Libya. Last spring, Ft. Pickett, a Virginia Army National Guard base, was chosen for the $461 million Foreign Affairs Security Training Center which will create 1,500 permanent and part-time jobs.

It’s a project both parties can love. Republican U.S. Reps. Randy Forbes and Robert Hurt are smitten as are Democratic U.S. Sens. Tim Kaine and Mark Warner and of course, McAuliffe. It may be ironic that the Ft. Pickett site can draw such bipartisan support in Virginia when Republicans beat everyone up so badly, especially former Secretary of State Hillary Clinton, over Benghazi. It’s also curious that a national security expense like this goes down so easily with politicians while accepting federal money to expand Medicaid coverage to 400,000 lower income Virginians is such a no-no. Conservatives argue that Medicaid would hurt budget discipline, but won’t this training center do the same?

The State Department says it has 2,000 security people in 160 countries and plans 75 more. They now take a 10-week training course at a military base in West Virginia that includes a local race track that is considered inadequate.

Ft. Pickett is probably a logical site. Its 45,000 plus acres were carved out of several counties during World War II and an airfield was built. During the Cold War (as now) the facility was used for artillery and tank practice since its rolling pine-gum forest somewhat resembled the terrain of Eastern Europe where the real fighting might be.

It had been marked for closure but somehow survived, sustaining the small town of Blackstone where one often sees troops in utilities at the local Hardees or McDonald’s. From time to time, Ft. Pickett hosts special guest trainees such as the Navy SEALS, the Marines, Army rangers and Delta Forces, the FBI, Secret Service, Drug Enforcement and others. I live about 20 miles from the base and from time to time, my house shakes either from artillery shots or helicopters that roar at low altitude. One particularly loud weekend, I looked up the fort’s website to see who was there. It was the Canadian Army shooting up Old Virginny.

There was a rumor going around a couple years ago that Ft. Pickett housed a to-scale mockup of Osama Bin Laden’s hideout in Pakistan and that SEALS used it to train before killing him. The story was so juicy that it ended up on the Blackstone Chamber of Commerce Website for a while but I don’t think it is true. It was probably in North Carolina at a CIA base at Harvey Point on Albemarle Sound or at Ft. Bragg.

The State Department facility will be built on 1,500 acres of land and supposedly 10,000 students a year will use it. I can’t understand where they get that number if there are only 2,000 State Department guards, but never mind.

The base used to be fairly open. When my German Shepherd was alive sometimes we’d drive down there to see what was going on. Usually, nothing, but on occasion you’d see helicopters or an Air Force cargo jet practicing takeoffs and landings.

The facility will help the local area but I am sure the old access will be limited. Meanwhile, it’s back to federal money that Virginia loves so well, at least in this case.