Category Archives: Social services

A New, Improved Ken Cuccinelli?

ken-cuccinelliBy Peter Galuszka

Is one-time conservative firebrand Ken Cuccinelli undergoing a makeover?

The hard line former Virginia attorney general who lost a bitter gubernatorial race to Terry McAuliffe in 2013 is now helping run an oyster farm and sounding warning alarms about a rising police state.

This is remarkable switch from the man who battled a climatologist in court over global warming; tried to prevent children of illegal immigrants born in this country from getting automatic citizenship; schemed to shut down legal abortion clinics; tried to keep legal protection away from state gay employees; and wanted to arm Medicaid investigators with handguns.

Yet on March 31, Cuccinelli was the co-author with Claire Guthrie Gastanaga, executive director of the American Civil Liberties Union of Virginia of an opinion column in the Richmond Times Dispatch. Their piece pushes bipartisan bills passed by the General Assembly that would limit the use of drones and electronic devices to read and record car license plate numbers called license plate readers or LPRs.

Cuccinelli and Gastanaga say that McAuliffe may amend the bills in ways that would expand police powers instead of protect privacy. “The governor’s proposed amendments to the LPR bills gut privacy protections secured by the legislation,” they write. The governor’s amendments would extend the time police could keep data collected from surveillance devices and let police collect and save crime-related data from drones used during flights that don’t involve law enforcement, they claim.

When not protecting Virginians from Big Brother, Cuccinelli’s been busy oyster farming. He has helped start a farm for the tasty mollusks on the historic Chesapeake Bay island of Tangier. According to an article in The Washington Post, Cuccinelli got involved when he was practicing law in Prince William County after he left office.

He would visit the business and get roped into working at odd jobs. He apparently enjoyed the physical labor and the idea that oysters are entirely self-sustaining and help cleanse bay water.

Environmentalists scoff at the idea, noting that as attorney general, Cuccinelli spent several years investigating Michael Mann, a former University of Virginia climatologist who noted that humans were responsible for the generation of more carbon dioxide emissions and that has brought on climate change.

Some have pointed out that if Cuccinelli had had his way, he would have helped quash climate science, generated even more global warming and sped up the inundation of Tangier Island by rising water levels.

It will be interesting to see if Cuccinelli intends to rebrand himself for future political campaigns and how he tries to reinvent himself.

Cruz, “Liberty” and Teletubbies

AP CRUZ A USA VA By Peter Galuszka

Where’s the “Liberty” in Liberty University?

The Christian school founded by the controversial televangelist Jerry Falwell required students under threat of a $10 “fine” and other punishments to attend a “convocation” Monday where hard-right U.S. Sen. Ted Cruz announced his candidacy for president.

Thus, Liberty produced a throng of people, some 10,000 strong, to cheer on Cruz who wants to throttle Obamacare, gay marriage, abolish the Internal Revenue Service and blunt immigration reform.

Some students stood up to the school for forcing them to become political props. Some wore T-Shirts proclaiming their support of libertarian Rand Paul while others protested the university’s coercion. “I just think it’s unfair. I wouldn’t say it’s dishonest, but it’s approaching dishonesty,” Titus Folks, a Liberty student, told reporters.

University officials, including Jerry Falwell, the son of the late founder, claim they have the right as a private institution to require students to attend “convocations” when they say so. But it doesn’t give them the power to take away the political rights of individual students not to be human displays  in a big and perhaps false show.

There’s another odd issue here. While Liberty obviously supports hard right Tea Party types, the traditional Republican Party in the state is struggling financially.

Russ Moulton, a GOP activist who helped Dave Brat unseat House Majority Leader Eric Cantor in a primary last summer, has emailed party members begging them to come up with $30,000 to help the cash-strapped state party.

GOP party officials downplay the money problem, but it is abundantly clear that the struggles among Virginia Republicans are as stressed out as ever. Brat won in part because he cast himself as a Tea Party favorite painting Cantor as toady for big money interests. The upset drew national attention.

Liberty University has grown from a collection of mobile homes to a successful school, but it always has had the deal with the shadow of its founder. The Rev. Falwell gained notoriety over the years for putting segregationists on his television show and opposing gay rights, going so far as to claim that “Teletubbies,” a cartoon production for young children, covertly backed homosexual role models.

Years ago, the Richmond Times-Dispatch published a story showing that the Rev. Falwell took liberties in promoting the school he founded in 1971. Brochures touting the school pictured a downtown Lynchburg bank building with the bank’s logo airbrushed off. This gave the impression that Liberty was thriving with stately miniature skyscrapers for its campus.

Some observers have noted that Liberty might be an appropriate place for the outspoken Cruz to launch his campaign. The setting tends to blunt the fact that he’s the product of an Ivy League education – something that might not go down too well with Tea Party types – and that he was actually born in Canada, although there is no question about his U.S. citizenship and eligibility to run for question.

Hard-line conservatives have questioned the eligibility of Barack Obama to run for U.S. president although he is likewise qualified.

With Cruz in the ring and Liberty cheering him, it will make for an interesting campaign.

Dominion’s Clever Legerdemain

Dominion's Chesterfield coal-fired plant is Virginia's largest air polluter

Dominion’s Chesterfield coal-fired plant is Virginia’s largest air polluter

By Peter Galuszka

You may have read thousands of words on this blog arguing about the proposed federal Clean Power Plan, its impact on Dominion Virginia Power and a new law passed by the 2015 General Assembly that freezes the utility’s base rates and exempts it from rate reviews for five years.

All of this makes some basic and dangerous assumptions about the future of Dominion’s coal-fired generating plants.

It has somehow gotten into the common mindset that the Environmental Protection Agency will automatically force Dominion to close most of its six coal-fired stations.

Is this really so? And, if it is not, doesn’t that make much of this, including Dominion’s arguments for its five-year holiday from rate reviews by the State Corporation Commission, moot?

In June 2014, the EPA unveiled the Clean Power Plan and asked for comments by this upcoming summer. The idea is to have Virginia cut its carbon emissions by 38 percent by 2025. Coal plants are the largest contributors to carbon emissions by 2025.

A few points:

Dominion announced in 2011 that it would phase out its 638-megawatt coal-fired Chesapeake Energy Center that was built between 1950 and 1958.

In 2011, it also announced plans to phase out coal at its three-unit, 1,141 megawatt Yorktown power plant by shutting one coal-fired unit and converting a second one to natural gas. The units at the station were built in 1957, 1958 and 1974.

Mind you, these announcements came about three years before the EPA asked for comments about its new carbon reduction plan. But somehow, a lack of precision in the debate makes it sound as if the new EPA carbon rules are directly responsible for their closure. But how can that be if Dominion announced the closings in 2011 and the EPA rules were made public in June, 2014? Where’s the link between the events?

When the Chesapeake and Yorktown changes were announced, Dominion Chairman and CEO Thomas F. Farrell II, said: “This is the most cost-effective course to meet expected environmental regulations and maintain reliability for our customers.” Now Dominion is raising the specter of huge bills and unreliable grid.

Dominion has other big coal-fired plants. The largest is the 1,600 megawatt Chesterfield Power Station that provides about 12 per cent of Dominion’s power. Four of its six units—built from 1952 to 1969 — burn coal. Two others built in 1990 and 1992 are combined cycle units that use natural gas and distillate oil.

Dominion has upgraded scrubbers at the units, but the Chesterfield station is the single largest air polluter in the state and one of the largest in the nation.

Another big coal-fired plant is Dominion’s 865-megawatt Clover Power Station. It is more recent, having gone online in 1995 and 1996. It is the second largest carbon emitter in the state.

Then there’s the 600 megawatt Virginia City Hybrid plant that burns both coal and biomass in Wise County. It went into service in 2012.

Dominion had a small coal-fired plant at Bremo Bluffs but has converted it to natural gas.

So, if you add it all up, which coal-fired plants are really in jeopardy of closure by the EPA’s new rules? Chesterfield, Clover or Virginia City?

It’s hard to get a straight answer. In a blog post by Jim Bacon today, he quotes Thomas Wohlfarth, a Dominion senior vice president, as saying “It’s not a foregone conclusion that [the four coal-fired power plants] will be shut down. It’s a very real risk, but not a foregone conclusion.” Another problem is that I count three possible coal-fired plants, and don’t know what the fourth one is.

In a story about the Chesterfield power plant, another spokesman from Dominion told the Chesterfield Observer that Dominion “has no timeline no to close power stations” but it might have to consider some closings if the Clean Power Plan goes ahead as currently drafted.

Environmental groups have said that because of Dominion’s already-announced coal-plant shutdowns and conversion, the state is already 80 percent on its way to meet the proposed Clean Power Plan’s carbon cuts. When I asked a State Corporation Commission spokesman about this last fall, I got no answer.

What seems to be happening is that Dominion is raising the specter of closings without providing specific details of what exactly might be closed and why.

Its previously announced coal-plant shutdowns have suddenly and mysteriously been put back on the table and everyone, including Jim Bacon, the General Assembly and the SCC, seems to be buying into it.

Although there have been significant improvements in cutting pollution, coal-fired plants still are said to be responsible for deaths and illnesses, not to mention climate change. This remains unaddressed. Why is it deemed so essential that coal-fired units built 40, 50 or 60 years ago be kept in operation? It’s like insisting on driving a Studebaker because getting rid of it might cost someone his job that actually vanished years ago.

Also unaddressed is why Virginia can’t get into some kind of carbon tax or market-based caps on carbon pollution that have seen success with cutting acid rain and fluorocarbons.

It’s as if the state’s collective brain is somehow blocking the very idea of exploring a carbon tax and automatically defaults to the idea that if the EPA and the Obama Administration get their way, Virginia ratepayers will be stuck with $6 billion in extra bills and an unreliable electricity grid.

Could it be that this is exactly the mental legerdemain that Dominion very cleverly is foisting on us? Could be. Meanwhile, they continue to get exactly the kind of legislation from the General Assembly they want.

Time For a Fossil Fuel Reality Check

Murray

Murray

By Peter Galuszka

Let’s pause for a moment, catch our breath and realize what is really going on in the world of fossil fuel and climate change.

We’ve heard tons of loosely-based opinion from climate change deniers and drum beaters for the “War on Coal” crowd.

Here are two recent news items:

Coal baron Robert Murray is closing a $1.4 billion deal for Illinois Basin coal. The outspoken, labor-busting  boss who figured prominently in the “War on Coal” campaign during the Mitt Romney presidential run has been picking up reserves in the robust Illinois Basin and in the distressed Appalachians.

His deal for 50 percent of Foresight Energy follows another he did in 2013 worth $3.5 billion to buy five Appalachian mines from Consol.

What does this mean? It shows that coal overall does have a future, especially in the high-sulfur Illinois Basin which has been rediscovered since utilities such as the Tennessee Valley Authority have been forced to use better scrubbing equipment. Illinois Basin can be twenty bucks a ton cheaper than Appalachian product. He also sees some future left in high coast Appalachian coal.

Stop a moment and consider: new environmental regs promote the use of cheaper coal. Now that coal may not be in the Central Appalachian area of southwest Virginia and West Virginia. But the magic of the market is favoring Illinois Basin product which is simply easier and cheaper to mine as is Powder River Basin coal in Wyoming and Montana.

A big problem with some of the commentators on this blog is that they fail to grasp that the U.S. coal industry is a lot bigger than little ole Virginny’s mines that started to play out decades ago. In their world view, their demise is the fault of the bad old federal government, not sharp barons like Murray who is a major contributor to (ahem) the Republican Party. Their brains seem trapped in a geographical warp zone where they cannot imagine things beyond the borders of the Old Dominion.

And while we are on the GOP, let’s consider George Schultz’s oped Sunday in The Washington Post. For those of you who may forget, he was Secretary of State under Ronald Reagan, the mystical president some of you love and miss dearly.

Schultz’s message is that human based climate change is here. So, stop denying it, get over it and get on with a carbon tax that worked to protect the ozone layer years ago. Yes, they actually worked that out back in Ronnie’s day and a tax and marker system to reduce fluorocarbons actually worked.

Not to add insult to injury, but consider what Schultz wrote: “For example, we can now produce electricity from the wind and sun at close to the same price we pay for electricity from other sources…”

Hmm. Sounds like a wild-eyed, irresponsible greenie. Someone tell Jim Bacon and Dominion Virginia Power.

Are We Reducing Food Insecurity or Aggravating It?

US Secretary of Agriculture Tom Vilsack, Richmond schools Superintendent Dana T. Bedden, and US Rep. Bobby Scott work in the lunch line at Woodville Elementary on March 9, 2015. Photo credit: Richmond Times-Dispatch.

US Secretary of Agriculture Tom Vilsack, Richmond schools Superintendent Dana T. Bedden, and US Rep. Bobby Scott work in the lunch line at Woodville Elementary on March 9, 2015. Photo credit: Richmond Times-Dispatch.

by James A. Bacon

The federal government has awarded Virginia an $8.8 million grant, to support a program in the City of Richmond and seven localities in Southwest Virginia to fight child hunger. Elaborates the Times-Dispatch:

The children will receive a third meal before leaving school every day, and they will also participate in an off-hours program aimed at making sure they get healthy good when they’re not in school.

In Richmond, where 80% of school children qualify for free or reduced lunch, the program will aid some of the poorest students, stated Superintendent Dana T. Bedden.

Let us grant that child hunger is a real phenomenon and a serious one. No one wants children to go hungry, not even mean, heartless conservatives like myself. But I’ve got a lot of questions, starting with, what the hell is going on?

As I’ve noted before, the United States dispenses billions of dollars of food stamps every month. Every family who needs food stamps gets them. The families of the poor, hungry children targeted by this program get food stamps. Now, I can buy the argument that food stamps are a minimal form of food support and that it’s darn hard to feed a family on food stamps alone. But let’s say you have a mother and three children, who receive benefits based on a family of four who collectively consume 84 meals a week. Now let’s say three of those children are getting free lunches and breakfasts at schools (30 meals a week). Are we saying that the food stamps are such a pittance, and that the free food provided by churches and food pantries are so inadequate, that the mother can’t feed herself and her children for the other 51 meals a week?

This just doesn’t add up. Something is going on that the care giving class does not appreciate or understand.

Are the benefits of food stamps stretched thin, perhaps, because female heads of household are living with boyfriends contribute little to the family pot yet must be fed?

Do poor parents change their behavior based on the rational expectation that, if they don’t feed their children, they know the state or philanthropic organizations will step in?

Is the problem not poverty, per se, but the fact that mothers are strung out on drugs or otherwise so consumed with their own disordered lives that they can’t get it together to prepare meals for their children?

I don’t know the answer. All I know is that the more food we dispense, the worse food insecurity seems to get. And the only solution that anyone can think of is to shovel more money and more free food at the poor. I worry that we are enabling the very behavior that causes child hunger in the first place.

Propping Up Coal at the Taxpayers’ Expense

W._Va._coal_mine_1908By Peter Galuszka

It’s always curious when big business and their bankrolled politicians complain about how the government and its regulations stymie the “magic of the free market.”

Then they turn around and keep protectionist policies that give certain industries big favors such as tax credits.

That’s what the General Assembly has done with a bill that would have reduced tax credits doled out to utilities that burn coal mined in Virginia. The original proposal backed by Gov. Terry McAuliffe was intended to help fill a $2.4 billion gap in the state’s biennial budget.

The idea quickly ran afoul of Dominion Virginia Power and the Virginia Coal & Energy Alliance. The original idea was to scale back tax credits but cap coal tax deductions at $500,000 in any given year. But after the utility and the coal industry lobbyists got involved, a bill to retain the tax credits was quickly approved setting caps at a more generous $7.5 million in a given year.

The credits stem from a law passed in 1999. Its purpose is to make it easier for big utilities like Dominion to choose thermal coal mined in Virginia over product mined elsewhere.

Coal production peaked in the state at 46 million tons. It’s now about 22 million tons or less. Coal employment has likewise dropped sharply over the years.

Much of the coal mined in Southwest Virginia is of high quality and some can be used either to generate electricity or make steel. The problem is its cost. Many of the seams in the state have played out and coal is increasingly thinner and is in  harder to reach areas. The cost of mining it has gone up.

For years coal maintained a price advantage over alternatives such as natural gas but thanks to hydraulic fracturing, that is no longer the case. Utilities like Dominion have been converted facilities to gas or are building new plants that use gas. Its last coal-related plant is a hybrid near St. Paul.

What’s causing this shift away from coal? High production costs and cheaper alternatives. Out West, in the Powder River Basin of Wyoming and Montana, coal is cheap and easy to mine. It does well. In other words, the free market is affecting  the declining Virginia coal industry  yet the General Assembly wants to prop it up at the expense of taxpayers and the budget.

By the way, Dominion and coal giant Alpha Natural Resources in Bristol are among the biggest political donors in the state.

Silting, Resilience and Climate Change

by James A. Bacon

Atchafala delta, 1984

Atchafalaya delta, 1984

Louisiana’s coastline is shrinking. Humanity’s impact on the state’s massive but fragile wetlands — levees accelerating Mississippi River water flows, the criss-crossing of marshes with canals — has aggravated the natural phenomena of subsidence and sea-level rise to inundate some 1,900 square miles of coast land over eight decades. It’s an object lesson for Virginia, much of whose low-lying Tidewater region also could end up waterlogged as sea levels rise. We’ve seen the maps — I’ve published some on this blog. A hundred years from now, there could be little left of Norfolk and Virginia Beach in a storm surge but a bunch of islands.

Atchafalaya delta, 2014

Atchafalaya delta, 2014

But, wait, the process of shrinking land mass is not inevitable. Portions of the Louisiana coast are expanding. That’s exactly what you’d expect to find in the Mississippi River delta as the nation’s mightiest river deposits massive volumes of silt and sediment into the Gulf of Mexico. An article in Atlantic CityLab shows satellite photos of the Atchafalaya River, which empties west of the Mississippi, in 1984 and 2014. This delta complex is growing at the rate of one square mile per year.

Writes John Metcalfe: “Scientists are quite interested in studying these processes, as they believe they might help counter today’s leading cause of coastal deterioration: rising sea levels.”

There is a widely held assumption that Virginia could lose hundreds of square miles of wetlands as local subsidence and rising global sea levels conspire to flood the Tidewater marshlands. But is inundation inevitable? The James, Potomac, Rappahannock, Susquehanna  and other tributaries dump large volumes of sediment into the Chesapeake Bay — so much so that the silt clouds the waters, blocks sunlight and disrupts the bay ecology. But eventually the sediment settles to the bottom, contributing to the build-up of mud and muck.

It would be interesting to know: Which process is occurring more rapidly in the Chesapeake Bay — sea level rise or sedimentation? A related question: How is the sediment distributed? Accumulation of silt in the middle of the Bay just makes a shallower bay. But accumulation in the marshlands might support the creation of new land mass that we see in the Atchafalaya delta.

craney_islandDredging the sediment build-up in Virginia’s shipping channels costs tens of millions of dollars a  year. Much of the dredge material has been directed to Craney Island, a man-made land mass that has transformed the coastline of Hampton Roads. We have a lot of raw material to work with.

Last summer, Governor Terry McAuliffe appointed a Climate Change and Resiliency Update Commission to prepare Virginia’s coastal communities for the impact of climate change. It strikes me that the sedimentation issue is ill understood and little discussed. How likely are Virginia marshlands likely to survive incremental sea-level rise as the deposition of silt raises the bay bed? To what extent can Virginia productively re-route sediment from channel dredging to build up the most vulnerable sections of the coastline?

There is a strong bias among those who fret about Global Warming toward solutions that entail re-engineering the nation’s energy economy in order to reduce the carbon dioxide emissions implicated in rising temperatures. Any changes we make in Virginia will have an infinitesimal impact on global temperatures, even if, as widely asserted, CO2 emissions are driving them higher. To survive global warming and rising sea levels, we must make our communities more resilient. That’s where our actions can make a difference.

The Governor’s commission is scheduled to submit its recommendations by June 30 this year. Let us hope that it incorporates the insights scientists are gleaning from Louisiana’s Atchafalaya delta.

Turning 62: Take the Social Security and Run?

retirement

Not me!

by James A. Bacon

I turn 62 years old today, and one of the few perks of advancing age is the prospect of collecting Social Security. I, like thousands of other Baby Boomers who turn 62 every day, face the decision whether to start pocketing Social Security now, wait until full retirement at 66 or delay taking benefits even longer in the expectation of bigger checks down the road.

The conventional wisdom is that it makes sense to wait to 66, or even older if you can, because each year you delay, your SS benefits increase by roughly 8% to compensate for the actuarial reality that you’ll have one year less to collect before you die. If you’re in good health and expect to live longer than average life expectancy for male 62-year-olds — 83.8 years — delaying retirement is an especially good idea.

But what if you don’t have faith in the system to deliver on its promises, as I do not? What if you share the widely held belief that, barring heroic action by Congress, that the Social Security Trust Fund will run out by 2030? If the trust fund runs dry, the system can pay out no more than it brings in through payroll taxes, or about 75% of current promised levels.? Should we adopt the attitude of take the money and run? Get what’s yours while you can?

It’s a big decision, so I punched some numbers into a spreadsheet to see how the Retire-at-62 scenario compares to the Retire-at-66 scenario. (The numbers below are rough estimates only, not official Social Security Administration estimates.)

SS_payout2
This chart compares the cumulative payout under a Retire-at-66 scenario receiving $2,000 per month or $24,000 per year compared to a Retire-at-62 scenario of $1,500 per month or $18,000 per year.

Waiting until 66 means no Social Security income for the first four years. During that period, you’d end up a cumulative $72,000 in the hole. But then, beginning at 66, your annual payout would be roughly $6,000 per  year higher. You’d whittle away at that $72,000 hole until, at age 77, you broke even. After that, you’d be ahead of the game by increasingly large margins each  year.

Then comes Boomergeddon. Around 2030 — the left vertical line — the trust fund runs out of money and Uncle Sam reduces the payout to what it brings in through payroll taxes, or about 25%. (The actual number would vary, depending upon economic and employment conditions.) In one sense, you’re screwed — you’re getting less than promised. But you’d be screwed if you retired early, too. You’d still be ahead of the game compared to retiring at 62 — just by a smaller margin, ahead by only $4,500 per year instead of $6,000 per year.

If you live until 83.8, your life expectancy at 62 years old today — the right vertical line — you’d still be ahead. If you’re healthier and more long-lived than average and live past 83.8 — and half of all males do — then the cumulative payout surpasses the early retirement scenario by an increasingly large margin.

This calculation does not take into account inflation, but that’s a non-factor because the Social Security program adjusts the payout each year to reflect the higher cost of living. Neither does it take into account the time value of money. A dollar earned in 2015 is much more valuable than one earned in 2030. That’s especially true if you actually save your money and earn a return on your investment. But most people (including me) don’t anticipate saving money during retirement; they anticipate spending down some or all of their savings. They view Social Security payments as income to be spent. Thus, the time value of money really has no application here.

What if, as I argued in my book “Boomergeddon,” Uncle Sam changes the payout in a Boomergeddon scenario to make Social Security even more of an income-redistribution engine than it already is? People living on the margin, say $1,000 a month, live a marginal existence as it is; they would truly suffer if their payments were cut when the trust fund is exhausted. There is a high degree of probability that politicians would give low-income households smaller cuts and take the balance out of the hides of higher-income households. But that still doesn’t change the bottom line that most middle-class Americans would be better off retiring at 66 — they would be better off by a smaller margin. Anyone with a lick of sense would anticipate the possibility of changes to the payout formulas and adjust their lifestyles accordingly, but the prospect of Boomergeddon shouldn’t change the decision when to retire.

The critical variable influencing your retirement-age decision is your health. If you have diabetes, untreated hypertension, a high risk of cancer or other health threats, you have worse odds of making it to 83.8 years old. Even then, you’re not necessarily well advised to take the money and run. The break-even year is 77. If you live older than 77, you’d still come out ahead delaying your retirement.

For many people, the discussion is purely academic. If you’re working a full-time salaried job, it probably makes sense to continue working, generating income and letting your Social Security retirement benefits gain value. But there are plenty of sixty-plus people who have lost their jobs, find themselves working part-time or have fluctuating free-lance incomes for whom that Social Security income might look pretty good. Those would be well advised to think carefully before making the leap.

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 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.

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)

Takeaways From Bob McDonnell’s Sentencing

Mcd sentencedBy Peter Galuszka

The outpouring of support for convicted former Gov. Robert F. McDonnell was overwhelming at his sentencing hearing yesterday at which he was told that he will serve two years in a federal penitentiary.

And this very support stands in marked contrast to McDonnell’s performance on the witness stand during his marathon trial last summer. There he alternated between saying that he “holds himself accountable” and then blaming his aides, vitamin salesman Jonnie R. Williams and, of course, his estranged wife Maureen who was set up to take the fall.

So which Bob is really Bob?

In U.S. District Judge James R. Spencer’s courtroom, the hours’ long reading of letters of support and 11 witness testimonials from the stand became tedious and repetitive. Bob kneels down to comfort a sick woman. Bob helps out Katrina hurricane victims on his week-long vacation, builds a basketball court and breaks his jaw. Bob restores voting rights to 8,128 convicted felons who had served their time. Bob’s only flaws are his gullibility and naïvite. Bob writes thank you notes.

The most impressive supporter by far was L. Douglas Wilder, the former Richmond mayor who became the first-ever African-American governor. Always unpredictable, the Democratic politician came down hard on Bob’s side, saying he’s known him for years and found him to “to be of his word.” Wilder touched off applause in the courtroom he blamed Williams as “the man who started this bribe” as “the one who got away clean.”

All of these people were trying to convince Judge Spencer that Bob should not get jail time but 6,000 hours of community service. One option would be to stick him in a service coordination job on the island nation of Haiti. The job normally would pay $100,000 including benefits but Bob wouldn’t get the money and would work and have to sleep in a hot and buggy room. Other possibilities including holding an unpaid $60,000 job coordinating a food bank in southwest Virginia.

To his credit, Judge Spencer didn’t bite. Prosecutor Michael Dry said that McDonnell is free to do all the community service he wants after he serves his time behind bars. McDonnell could have gotten more than 12 years in prison. Spencer gave him two.

The sentence is on the light side but is probably fair. McDonnell has been tremendously humiliated. He completely dishonored his public trust and will go down in history as the Virginia governor who was corrupt. At least he is getting some jail time.

And he might win on appeal. It’s not a slam dunk but there is respected legal opinion out there that “honest services fraud” can be viewed in a tight or loose focus. Spencer chose a tight focus but we will have to see if the appeal McDonnell has filed gets to the U.S. Fourth Circuit and then Supreme Court.

Next up is wife Maureen, who is a tragic figure and also was convicted of corruption. Her own daughters characterized her as a sick woman who badly needs help. Some columnists have pumped her up, saying she’s the unsung heroine stuck raising the kids while the ambitious politician is selfishly away building his career.

Something about that argument doesn’t ring true to me. Maureen McDonnell may well have despised the time Bob spent away from her but she also was right beside him, pushing her own agenda such as selling nutraceuticals and backing pet programs such as marketing Virginia wines and helped injured military veterans. As First Lady, she was no shrinking violet when it came to letting her wishes known to state employees.

She comes up for sentencing Feb. 20 and now that her husband’s fate is known, it seems likely she won’t get any jail time. If so, maybe she can get the help she seems to badly need and the McDonnell family can start to heal their terrible wounds.

One of the character witnesses Tuesday was William Howell, the Republican Speaker of the House of Delegates who provided the enormously valuable insight that “people would describe Bob as a Boy Scout.” Not only is Howell’s remark insipid, it hides how much he’s responsible for maintaining the total mess that policing ethics among Virginia public officials has become.

No matter how many Wednesday morning Bible studies Howell says he attended with McDonnell, he still did nothing to improve regulation of political donations and gifts. If anything, he’s the problem not the solution since he minimizes every decent initiative to rationalize Virginia’s loosey-goosey system. If there were clear rules, McDonnell may never have gotten caught in his quagmire. He might have known when to avoid crossing the line.

Howell told the court that the General Assembly is busy setting its house right and that McDonnell’s predicament “Most certainly . . . has had a deterrent effect.” That was likely the most ridiculous statement during the five hours of court testimony on a horrid sentencing day.

Virginia’s Top Stories in 2014

mcd convictedBy Peter Galuszka

The Year 2014 was quite eventful if unsettling. It represented some major turning points for the Old Dominion.

Here are my picks for the top stories:

  • Robert F. McDonnell becomes the highest-ranking former or serving state official to be convicted of corruption. The six-week-long trial from July to September of the Republican former governor and his wife, Maureen, was international news. In terms of trash, it offered everything – greed, tackiness, a dysfunctional marriage, a relationship “triangle,” and an inner glimpse of how things work at the state capital.  More importantly, it ends forever the conceit that there is a “Virginia Way” in which politicians are gentlemen above reproach, the status quo prevails and ordinary voters should be kept as far away from the political process as possible. It also shows the unfinished job of reforming ethics. The hidden heroes are honest state bureaucrats who resisted top-down pushes to vet dubious vitamin pills plus the State Police who did their investigative duty.
  • Eric Cantor loses. Cantor, another Republican, had been riding high as the 7th District Congressman and House Majority Leader. A wunderkind of the Richmond business elite, Cantor was positioned to be House Speaker and was considered invulnerable, at least until David Brat, an unknown college economics professor and populist libertarian, exploited fractures in the state GOP to win a stunning primary upset. Cantor immediately landed in a high-paying lobbying job for a financial house.
  • Terry McAuliffe takes over. The Democrat Washington insider and Clinton crony beat hard-right fanatic Kenneth Cuccinelli in a tight 2013 race. He bet almost everything on getting the GOP-run General Assembly to expand Medicaid benefits to 400,000 low income Virginians. He lost and will try again. He’s done a pretty good job at snaring new business, notably the $2 billion Shandong-Tralin paper mill from China for Chesterfield County. It will employ 2,000.
  • Roads projects blow up. Leftover highway messes such as the bypass of U.S. 29 in Charlottesville finally got spiked for now. Big questions remain about what happened to the $400 million or so that the McDonnell Administration spent on the unwanted U.S. 460 road to nowhere in southeastern Virginia.
  • Gay marriage becomes legal. A U.S. District Judge in Norfolk found Virginia’s ban on gay marriage unconstitutional and the U.S. Supreme Court pushed opening gay marriage farther. The rulings helped turn the page on the state’s prejudicial past, such as the ban on interracial marriage that lasted until the late 1960s.
  • Fracking changes state energy picture. A flood of natural gas from West Virginia and Pennsylvania has utilities like Dominion Resources pushing gas projects. It’s been nixing coal plants and delaying new nukes and renewables. Dominion is also shaking things up by pitching a $5 billion, 550-mile-long pipeline through some of the state’s most picturesque areas – just one of several pipelines being pitched. The EPA has stirred things up with complex new rules in cutting carbon emissions and the state’s business community and their buddies at the State Corporation Commission have organized a massive opposition campaign. McAuliffe, meanwhile, has issued his “everything” energy plan that looks remarkably like former governor McDonnell’s.
  • State struggles with budget gaps. Sequestration of federal spending and defense cuts have sent officials scrambling to plug a $2.4 billion gap in the biennial budget. It is back to the same old smoke and mirrors to raise taxes while not seeming to. Obvious solutions – such as raising taxes on gasoline and tobacco – remain off limits.
  • College rape became a hot issue after Rolling Stone printed a flawed story about an alleged gang rape of a female student at the prestigious University of Virginia in 2012. Progressives pushed for raising awareness while conservatives took full advantage of the reporter’s reporting gaps to pretend that sex abuse is not really an issue.
  • Poverty is on the radar screen, especially in Richmond which has poverty rate of 27 percent (70 percent in some neighborhoods) and other spots such as Newport News. Richmond Mayor Dwight Jones got a lot of national press attention for his campaign to eradicate poverty but it is really hard to understand what he’s actually doing or whether it is successful. The real attention in Richmond is on such essentials as replacing the Diamond baseball stadium, justifying a training camp for the Washington Redskins and giving big subsidies for a rich San Diego brewer of craft beer.
  • Day care regulation. Virginia has a horrible reputation for allowing small, home day care centers to operate without regulation. Dozens have children have died over the past few years at them. This year there were deaths at centers in Midlothian and Lynchburg.
  • The continued madness of the Virginia Tobacco Indemnification and Community Revitalization Commission. This out-of-control slush fund in the tobacco belt continued its waywardness by talking with Democratic State Sen. Phil Pucket about a six-figure job just as Puckett was to resign and deny a swing vote in the senate in favor of expanding Medicaid. The commission also drew attention for inside plays by the politically powerful Kilgore family and giving $30 million in an unsolicited grant to utility Dominion.

Redistricting, Ethics Panel Pushes Ahead

seal_virginiaBy Peter Galuszka

Against strong chances that their efforts will be killed in the self-serving General Assembly, a panel is pushing ahead with badly needed reforms in government ethics and redistricting.

The bipartisan Commission on Integrity and Public Confidence in State Government wants to change the state constitution to create and independent redistricting commission tasked with remaking voting districts without regard to an election’s outcome.

Headed by Republican former Lt. Gov. Bill Bolling and Democrat former U.S. Rep. Rick Boucher, the group proposes that the redistricting commission be made up of five members. One each would be chosen by the House of Delegates speaker and minority leader and the same in the Senate. The four people would choose a fifth one and if they can’t decide, the state’s chief justice of the state Supreme Court would make the decision.

The idea is coming forward after two big events. One is the first-time ever conviction of a former or sitting governor in the state on corruption charges. The other was a federal court decision in October that the lines of the 3rd Congressional District were drawn in an unconstitutional way by packing in African-Americans. Doing so ensured victories by black politicians while diluted the black vote in neighboring ones.

The state constitution requires state and federal districts to be redrawn every 10 years to changes in settlement patterns. It has also been complicated by the Voting Rights Act, a 1960s-era vehicle that tried to correct the wrongs of white-dominated Southern states erecting districts so black votes were kept away.

At the moment very few of the races of other General Assembly are competitive. They are designed to keep incumbents in power which, in most rural districts, are Republicans. Thus, the real clash of ideas comes from a very tiny margin of voters and activists at Republican primaries that are often not representative of mainstream thinking.

Likewise, Virginia badly needs to address its “anything goes” policies regarding campaign donations and accepting gifts. This is a big reason why Robert F. McDonnell got into such big trouble with his corruption conviction that could put him in jail for a decade or more. Gov. Terry McAuliffe created the Bolling-Boucher commission just after McDonnell and his wife Maureen were convicted in a federal court in Richmond.

These reforms are absolutely necessary. If the General Assembly stubbornly deep-sixes the redistricting plan, someone else will have to come in. A federal judge has given the state until April 15 to redraw the 3rd district or the feds will do it.

And, as the McDonnell case shows, if Virginia goes over the top with ethics violations, the feds will do it, too. Underlining that point, the U.S. Probation Office is recommending double the usual prison time for McDonnell. Analysts say it is to make the statement crystal clear.

But, this is Virginia, unfortunately. Instead of dealing head-on with serious ethics problems, the ruling elite is mounting a campaign to give McDonnell time in community service instead of behind bars. Its proponents include the usual players like House Speaker Bill Howell and Tom Farrell of the utility Dominion.

Their game is to keep the status quo for as long as they can. Too bad times are changing, but the longer they stall, the more they hurt the people of Virginia.