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Corporate Inversions

July 17, 2014 Comments off

Corporate Inversions
Source: U.S. House of Representatives, Ways and Means Committee (Democrats)

Congress enacted Section 7874 of the Internal Revenue Code in 2004 as a way to discourage U.S. companies from acquiring smaller foreign companies and moving their tax home to a foreign jurisdiction as part of the overall transaction.

Under current law, a corporate inversion will not be respected for U.S. tax purposes if 80% or more of the new combined corporation (incorporated offshore) is owned by historic shareholders of the U.S. corporation (or, in the case of a partnership, interest owners of the partnership). Alternatively, if at least 60% (but less than 80%) of the combined foreign corporation is owned by historic shareholders of the U.S. corporation, the inversion itself will be respected but the expatriated entity will be subject to an “inversion gain,” including restrictions on the use of certain corporate attributes such as net operating losses. However, these unfavorable rules do not apply if the expanded affiliated group (“affiliated group”) that includes the combined corporation has “substantial business activities” (25% of employees by number, employees by compensation, assets, and income) in the foreign country where it is incorporated.

Since the provision was enacted in 2004, there have been almost 50 corporate inversions.

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Hearing: The State of Religious Liberty in the United States

June 11, 2014 Comments off

Hearing: The State of Religious Liberty in the United States
Source: U.S. House of Representatives Judiciary Committee
Archived webcast and PDFs of witness statements:

  • Mr. Mathew D. Staver

Founder and Chairman of Liberty Counsel
Dean of Liberty University School of Law

  • Ms. Kim Colby

Senior Counsel
Christian Legal Society

  • The Rev. Barry Lynn

Executive Director
Americans United for the Separation of Church and State

  • Mr. Gregory S. Baylor

Senior Counsel
Alliance Defending Freedom

CRS — Social Media in the House of Representatives: Frequently Asked Questions

April 30, 2014 Comments off

Social Media in the House of Representatives: Frequently Asked Questions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Recently, the number of Member offices adopting social media as an official communications tool has increased. With the increased use of social media accounts for official representational duties, the House has adopted policies and regulations regarding the creation, content, and use of third-party social media services. This report answers several questions about the regulation of social media accounts in the House of Representatives.

• How does the House define social media?
• How are social media accounts regulated in the House?
• What makes a social media account an official resource?
• Can Members use official funds for social media?
• Is some content prohibited on official social media accounts?
• Do the mass communications regulations apply to social media?

Investigation of “Drug Speculation” by “Gray Market” Drug Companies

April 28, 2014 Comments off

Investigation of “Drug Speculation” by “Gray Market” Drug Companies
Source: U.S. House of Representatives, Committee on Oversight and Government Reform

In the 112th Congress, Ranking Member Elijah E. Cummings launched an investigation into why hospitals and other health care providers have difficulty obtaining short-supply prescription drugs needed to treat patients suffering from cancer and other life-threatening conditions.

The investigation resulted in a bicameral report titled “Shining Light on the Gray Market,” which exposed a network of private “gray market” companies that take advantage of the national drug shortage crisis to charge exorbitant prices for drugs used to treat cancer and other life-threatening conditions. Follow the links below to learn more about the investigation.

Investigation of Executive Compensation at For-Profit Colleges

April 28, 2014 Comments off

Investigation of Executive Compensation at For-Profit Colleges
Source: U.S. House of Representatives, Committee on Oversight and Government Reform

In the 112th Congress, Ranking Member Elijah Cummings announced an investigation into the compensation packages of top executives at for-profit colleges.

Ranking Member Cummings sent document request letters to the CEOs of 13 for-profit schools seeking copies of compensation agreements for senior executives as part of an effort to determine whether salaries, bonuses, and other compensation are appropriately tied to the performance of students they educate, the vast majority of whom pay for their education with federal tax dollars.

On July 27, 2012, Ranking Member Cummings circulated a memo with preliminary findings from his investigation. Follow the links below to learn more about the investigation.

The Road to Boston: Counterterrorism Challenges and Lessons from the Marathon Bombings

March 27, 2014 Comments off

The Road to Boston: Counterterrorism Challenges and Lessons from the Marathon Bombings (PDF)
Source: U.S. House of Representatives, Homeland Security Committee (via Cryptome.org)

This report examines much of Tamerlan Tsarnaev’s personal history and his interaction with Federal agencies, including his radicalization, the 2011 threat assessment carried out by the FBI, and his travel to Russia in early 2012. Additionally, the Committee explored missed opportunities that potentially could have prevented this attack.

House Budget Committee Releases Report on the War on Poverty

March 7, 2014 Comments off

House Budget Committee Releases Report on the War on Poverty
Source: U.S. House of Representatives, Budget Committee (GOP)

Today, the House Budget Committee’s majority staff released a new report, “The War on Poverty: 50 Years Later.” The report provides an in-depth look at the federal government’s efforts to alleviate poverty in America today. In fiscal year 2012, Washington spent at least $799 billion on 92 programs to help low-income families. But as the report shows, some of these programs are duplicative or even counterproductive. And as a whole, they often discourage families from getting ahead.

Issa, Grassley Report on FDA Employee Monitoring Finds Agency Still Lacks Adequate Whistleblower Protections

February 26, 2014 Comments off

Issa, Grassley Report on FDA Employee Monitoring Finds Agency Still Lacks Adequate Whistleblower Protections
Source: U.S. House of Representatives, Committee on Oversight and Government Reform

oday, House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., and Senate Judiciary Committee Ranking Member Chuck Grassley, R-Iowa, released a joint report on the U.S. Food and Drug Administration (FDA)’s highly-invasive surveillance program that monitored employees who contacted Congress and the media with concerns about FDA’s medical device approval process.

In April 2010, the FDA initiated a surveillance program of unprecedented scope to monitor employees in the Center for Devices and Radiological Health. The program allowed FDA managers to read communications between FDA employees and Congress, the U.S. Office of Special Counsel (OSC), and their personal attorneys. The Joint Committee report, entitled “Limitless Surveillance at the FDA: Protecting the Rights of Federal Whistleblowers,” found the FDA acted without regard for employees’ whistleblower rights, which protect their communications to Congress and OSC. The joint report also found that FDA conducted the program without adequate guidelines in place and made no effort to limit the scope of the program to exclude protected communications.

Staff Report: Slipping Through the Cracks: How the D.C. Navy Yard Shooting Exposes Flaws in the Federal Security Clearance Process

February 12, 2014 Comments off

Staff Report: Slipping Through the Cracks: How the D.C. Navy Yard Shooting Exposes Flaws in the Federal Security Clearance Process
Source: U.S. House of Representatives Committee on Oversight and Government Reform

Key Findings:

+ Non-cooperation of 450 police departments with federal background investigators – Federal law requires local law enforcement agencies to provide criminal history information to federal security clearance investigators. But Federal law is vague on exactly what must be shared and many local law enforcement agencies frequently shun federal security clearance investigators, by providing only limited, if any, information. New York City, Newark, Baltimore, Washington, D.C., and Seattle – where Aaron Alexis had a gun-related arrest – are all included on OPM’s list of cities with non-cooperating police departments. Documents in the report detail incomplete information made available to background investigators, who did not know that a previous 2004 arrest of Alexis in Seattle involved a firearm and that a police report stated Alexis claimed to have suffered a “’black-out’ fueled by anger.” (Pages 18-19 and 40-43)

+ Lack of continuous monitoring – Under current law, a person holding a Top Secret clearance must be reinvestigated every five years in order to continue holding the clearance, those holding a Secret clearance must be reinvestigated every ten years, and those holding a Confidential clearance must be reinvestigated every fifteen years. In the intervening years, cleared individuals and their supervisors must report any derogatory information but there are no effective checks enforcing compliance beyond the renewal requirement. Numerous violent incidents from Aaron Alexis’ post 2007 past – when he received his security clearance – would have only been recognized when his clearance required renewal in 2017. (Pages 32-35)

+ Regulations prohibit background checkers from looking at the Internet or social media when performing checks – Investigators conducting federal security clearance background checks do not see, search, or receive reports of the vast amount of information available online. Nor do current federal security process guidelines allow the adjudicators who grant the clearances to access this information. The current Investigators Handbook guidelines strictly prohibit the use of the Internet to obtain substantive information. The Handbook does not address the use of social media, but instead includes a near-blanket restriction on the use of the Internet. Regulations prohibit efforts intended to safeguard national secrets that many private employers conduct independently when making hiring decisions. (Pages 35-38)

Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports

February 10, 2014 Comments off

Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports (PDF)
Source: U.S. House of Representatives, Energy and Commerce Committee (GOP)
From press release:

The House Energy and Commerce Committee today released a policy paper entitled “Prosperity at Home and Strengthened Allies Abroad – A Global Perspective on Natural Gas Exports.” Over the past year, the committee has analyzed the effects of exporting U.S. liquefied natural gas (LNG) through a series of hearings and an international forum. This report is the culmination of these efforts, detailing the economic and geopolitical benefits of U.S. LNG exports and outlining the actions necessary to realize them.

The committee concludes that LNG exports offer the opportunity for the U.S. to improve the domestic economy while providing our allies and trading partners an affordable and secure energy source. According to the report, “Our friends and allies around the globe desperately need a more stable, reliable, and affordable supply of natural gas, and American consumers and manufacturers need continued robust demand to bring additional resources into competitive production. The U.S. has the opportunity to be the world’s preferred supplier, and the case for mutually beneficial trade is very strong.”

Questionable Acquisitions: Problematic IT Contracting at the IRS

July 1, 2013 Comments off

Questionable Acquisitions: Problematic IT Contracting at the IRS (PDF)
Source: House Committee on Oversight and Government Reform

The Internal Revenue Service is the nation’s tax collection agency, charged with collecting more than $2 trillion annually from American taxpayers. At the end of 2012, the IRS reported that it has 97,717 employees spread across offices in each of the 50 states.

The IRS also has broad powers to investigate and prosecute tax cases. For fiscal year 2013, $12.7 billion in funds appropriated by Congress will support IRS activities.

A significant portion of IRS’s appropriated funds are spent on contracts for a variety of goods and services. The IRS Office of Procurement administers the contracts, of which there are more than 1,000 with a reported lifecycle value of approximately $39.2 billion.3 The IRS spends approximately $2 billion every year on information technology (IT) alone. The agency has over 400 dedicated employees who work on IT acquisition. Many vendors compete to do business with the IRS. Considering the large annual IRS investment in IT, any advantage in the contracting process gained by a particular vendor could prove very lucrative. The Committee found that one company—Strong Castle, Inc.—gained precisely such an advantage based on the relationship between the company’s CEO and an IRS contracting official. Strong Castle, Inc. was formerly known as Signet Computers. In January 2012 Braulio Castillo purchased Signet Computers and subsequently renamed the company Strong Castle, Inc. Except for specific references in documents, testimony, and discussion surrounding the purchase of the company, this report will refer to the company as Strong Castle.

An investigation by the Committee on Oversight and Government Reform found weaknesses in the IRS contracting process that expose billions of taxpayer dollars to fraud and abuse. This report details the Committee’s findings and makes recommendations to strengthen the IRS contracting process. 4 The Committee learned of allegations concerning a series of contracts, potentially worth more than $500 million, awarded by the IRS to Strong Castle. Witnesses who contacted the Committee alleged that Strong Castle engaged in fraud to win those IRS contracts. Documents and testimony obtained by the Committee showed that a cozy relationship between Strong Castle President and Chief Executive Officer Braulio Castillo and IRS Deputy Director for IT Acquisition Greg Roseman may have influenced the selection process.

Hearing: Defining the Problem and Scope of Over-criminalization and Over-federalization

June 21, 2013 Comments off

Defining the Problem and Scope of Over-criminalization and Over-federalization

Source: U.S. House of Representatives Committee on the Judiciary

From Statement for the Record of House Judiciary Committee Chairman Bob Goodlatte:


The number of federal crimes has exploded in recent years, bringing the number to approximately 4,500. According to a study by the Federalist Society, the number of federal criminal offenses grew by 30 percent between 1980 and 2004. Congress added 452 new federal criminal offenses between just 2000 and 2007 alone, which averages to 56.5 new crimes per year. This pace is simply unsustainable.

Perhaps more concerning than the sheer number of offenses is how Congress has written many of these new crimes. The recent growth of the federal code in all areas of life has brought with it an ever-increasing labyrinth of federal regulations, many of which also impose criminal penalties without a showing of mens rea, or criminal intent.

Webcast and testimonies.

Markey, Waxman Report Highlights Gaps in Grid Security

May 24, 2013 Comments off

Markey, Waxman Report Highlights Gaps in Grid Security

Source: U.S. House of Representatives (via Congressman Ed Markey – D/MA)

Drawing from responses from more than 100 utilities across America, a new report released today shows that the nation’s electric grid remains highly vulnerable to attacks from Iran and North Korea, or other threats like geomagnetic storms from solar activity. The report, released by Reps. Ed Markey (D-Mass.) and Henry A. Waxman (D-Calif.) indicates that the lengthy, industry-driven process by which grid security standards are set results in long delays and haphazard implementation of the voluntary security recommendations the industry refuses to make mandatory. The House Energy and Commerce Committee is holding a hearing on cybersecurity on Tuesday.

The full report, entitled “Electric Grid Vulnerability: Industry Responses Reveal Security Gaps”, can be found HERE. In January, Reps. Markey and Waxman sent letters to more than 150 utilities asking how often the grid came under attack, what measures the utilities were taking to protect against cyber attacks like the Stuxnet computer worm, and other questions.

The top findings of the report include:

–The electric grid is the target of numerous and daily cyber attacks. One utility said that there were 10,000 attempted attacks each month, and others describe the level of potential incursions as “daily”, “constant”, “malicious” and “seeking to gain access to internal systems.”

–Most utilities comply with mandatory standards only, not additional voluntary ones, and do so unevenly. For example, while almost all utilities said they complied with mandatory Stuxnet standards, only 21 percent of industry-owned utilities, 44 percent of municipally- or cooperatively-owned utilities and 62.5 percent of federal entities reported compliance with voluntary Stuxnet recommendations that industry did not agree to mandate.

–Most utilities have not taken concrete steps to reduce the vulnerability of the grid to geomagnetic storms and it is unclear whether the number of available spare transformers is adequate.

House Ways and Means Committee — 2012 Green Book (released November 2012)

February 5, 2013 Comments off

2012 Green Book

Source: U.S. House of Representatives (Committee on Ways and Means)

From Letter of Transmittal (PDF):

Since 1981, the Committee on Ways and Means has published the Green Book, which presents background material and statistical data on the major entitlement programs and other activities within the Committee’s jurisdiction. Over the decades, the Green Book has become a valuable resource and standard reference on American social policy. It is widely used by Members of Congress and their staffs, analysts in congressional and administrative agencies, members of the media, scholars, and citizens interested in the Nation’s social policy.

New Markey Report Reveals Before Current Outbreak At Least 23 Deaths, 86 Serious Illnesses, Injuries Associated with Compounding Pharmacy Practices

October 30, 2012 Comments off

New Markey Report Reveals Before Current Outbreak At Least 23 Deaths, 86 Serious Illnesses, Injuries Associated with Compounding Pharmacy Practices
Source: Edward J. Markey (D-Mass.) (U.S. House of Representatives)

With the meningitis outreak death toll reaching 25 and 344 more sickened by injectable steroids manufactured at the New England Compounding Center (NECC), Congressman Edward J. Markey (D-Mass.) today released a new comprehensive report documenting more than a decade of violations and problems at compounding pharmacies throughout the nation. Rep. Markey’s report, “Compounding Pharmacies, Compounding Risk” describes the nature of regulatory oversight and gaps in legal authority that, even before the current meningitis outbreak, led to at least 23 deaths and 86 serious illnesses or injuries in at least 34 states. Violations at compounding facilities included compounding pharmacies selling copies of commercially-available drugs, selling drugs made using ingredients that were not Food and Drug Adminsitration (FDA)-approved or were recalled for safety or effectiveness reasons, cases where sterile facilities were visibly dirty and contamination of the drug product was known to have occurred, and either selling drug products without a valid prescription or manufacturing large quantities of drug products.

Drawn entirely from media reports, publicly-available FDA and state Boards of Pharmacy documents from all 50 states, Puerto Rico and DC, Rep. Markey’s report shows how FDA’s efforts to assure the safety of compounding pharmacies have been challenged at every juncture by some members of the compounding pharmacy sector. The report also reveals that the state Boards of Pharmacy do not typically and consistently oversee the safety of the drugs made by compounding pharmacies and do not always provide records of their enforcement activities in an easily searchable and publicly available format.

Documents in the News — Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE

October 10, 2012 Comments off

Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE (PDF)


Source: U.S. House of Representatives Permanent Select Committee on Intelligence

From press release:

The Chairman and Ranking Member of the House Intelligence Committee, Mike Rogers (R-MI) and C.A. Dutch Ruppersberger (D-MD), today released a report recommending to U.S. companies considering doing business with Chinese telecommunications companies Huawei and ZTE to find another vendor. The report encourages U.S. companies to take into account the long-term security risks associated with either company providing equipment or services to our telecommunications infrastructure. Additionally, the report recommends that U.S. government systems, particularly sensitive systems, exclude Huawei or ZTE equipment or component parts.

The report highlights the interconnectivity of U.S. critical infrastructure systems and warns of the heightened threat of cyber espionage and predatory disruption or destruction of U.S. networks if telecommunications networks are built by companies with known ties to the Chinese state, a country known to aggressively steal valuable trade secrets and other sensitive data from American companies.

Additionally, the report notes that modern critical infrastructure is incredibly connected, everything from electric power grids to banking and finance systems to natural gas, oil, and water systems to rail and shipping channels. All of these entities depend on computerized control systems. The risk is high that a failure or disruption in one system could have a devastating ripple effect throughout many aspects of modern American living.

2010 House Compensation Study: Guide for the 112th Congress

July 8, 2012 Comments off

2010 House Compensation Study: Guide for the 112th Congress (PDF)
Source: Chief Administrative Office, U.S. House of Representatives

This report summarizes the results of a survey administered from October 5, 2010 to October 15, 2010 for the Chief Administrative Officer of the U.S. House of Representatives on compensation, employment, organizational structure, benefits, and other office practices of House Member personal offices. The Web-based survey was sent to 440 Representatives’ offices; the remaining office was not contacted because the Chief of Staff position was vacant at the time of survey administration. A total of 133 (30.2%) offices provided responses to the survey.

How Countrywide Used Its VIP Loan Program to Influence Washington Policymakers

July 6, 2012 Comments off

How Countrywide Used Its VIP Loan Program to Influence Washington Policymakers

Source: U.S. House of Representatives (Oversight and Government Reform Committee)

House Oversight and Government Reform Committee Chairman Darrell Issa today released a new report following the Committee’s three year investigation into Countrywide Financial’s “Friends of Angelo” and “VIP Program” that issued discounted mortgages to influential Washington policy figures. The report finds that Countrywide used its VIP Program to aid its lobbying efforts as well as to strengthen its relationship with taxpayer backed Fannie Mae. Countrywide partnered with Fannie Mae in a strategic business alliance that also included joint lobbying efforts.

Report: Government Motors: A Preliminary Report on the Effects of Bailouts and Politics on the Obama Administration’s Ability to Protect American Consumers

February 2, 2012 Comments off

Report: Government Motors: A Preliminary Report on the Effects of Bailouts and Politics on the Obama Administration’s Ability to Protect American Consumers (PDF)
Source: U.S. House of Representatives Committee on Oversight and Government Reform (Majority)

The delayed public notification of serious safety concerns relating to the Chevy Volt raises significant concerns regarding the unnatural relationship between General Motors (GM), Chrysler and the Obama Administration. Rather than allowing GM and Chrysler to enter into a traditional bankruptcy process, the Obama Administration intervened and forced the companies to participate in a politically orchestrated process. The result was that GM and Chrysler emerged as quasi-private entities, partially owned by the United States government. President Obama has used this unusual blurring of public and private sector boundaries to openly tout the results of this partnership as a top accomplishment of his Administration – creating a dynamic where the President is politically reliant on the success of GM and Chrysler.

Moreover, in the case of GM, the Administration has offered substantial taxpayer funded subsidies to encourage production of the Volt, such as $151.4 million in stimulus funds for a Michigan-based company that produces lithium-ion polymer battery cells for the Volt as well as $105 million directly to GM. It has also extended a significant subsidy to encourage consumers to purchase the vehicle, offering buyers of the Volt a federal tax credit of up to $7,500 per vehicle.

In the face of that political dependency, it is deeply troubling that public notification of the safety concerns related to the Volt was inexplicably delayed for six months – a period of time that also coincides with the negotiation over the 2017-2025 fuel economy standards. The necessity of a full explanation for NHTSA’s silence concerning the Volt’s safety risk has been compounded by its lack of cooperation with the Committee.

Cummings Issues Report Detailing Five Years of Gunwalking Operations in Arizona

February 2, 2012 Comments off

Cummings Issues Report Detailing Five Years of Gunwalking Operations in Arizona
Source: U.S. House of Representatives Committee on Oversight and Government Reform (Minority)

Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, issued a 95-page minority staff report entitled “Fatally Flawed: Five Years of Gunwalking in Arizona.” The report describes the results of the Committee’s year-long investigation into the actions and circumstances that led to multiple gunwalking operations in Arizona from 2006 to 2010.

According to a letter Cummings sent to Committee Members accompanying the report, “this report tells the story of how misguided gunwalking operations originated in 2006 as ATF’s Phoenix Field Division devised a strategy to forgo prosecutions against low-level straw purchasers while they attempted to build bigger charges.”

The report finds that this strategy failed to include sufficient operational controls to stop these dangerous weapons from getting into the hands of violent criminals, creating a danger to public safety on both sides of the border. Rather than halting operations after flaws became evident, ATF’s Phoenix Field Division launched several similarly reckless operations over the course of several years, according to the report, also with tragic results.

+ Full Report (PDF)

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