Feed aggregator

Israel strikes across Gaza as US says it will block another UN resolution

Politico -

RAFAH, Gaza Strip — Israeli strikes across Gaza killed at least 18 people overnight and into Sunday, according to medics and witnesses, as the United States said it would veto another draft U.N. cease-fire resolution.

The U.S., Israel’s top ally, instead hopes to broker a cease-fire agreement and hostage release between Israel and Hamas, and envisions a wider resolution of the Israeli-Palestinian conflict. Israeli Prime Minister Benjamin Netanyahu has pushed back, calling Hamas’ demands “delusional” and rejecting U.S. and international calls for a pathway to Palestinian statehood.

His Cabinet adopted a declaration Sunday saying Israel “categorically rejects international edicts on a permanent arrangement with the Palestinians” and opposes any unilateral recognition of a Palestinian state, which it said would “grant a major prize to terror” after the Oct. 7 attack that triggered the war.

Netanyahu has vowed to continue the offensive until “total victory” over Hamas and to expand it to Gaza’s southernmost town of Rafah, where more than half the enclave’s population of 2.3 million Palestinians has sought refuge from fighting elsewhere.

The head of the World Health Organization, meanwhile, said Nasser Hospital, the main medical center serving southern Gaza, “is not functional anymore” after Israeli forces raided the facility in the southern city of Khan Younis last week.

An airstrike in Rafah overnight killed six people, including a woman and three children, and another strike killed five men in Khan Younis, the main target of the offensive over the past two months. Associated Press journalists saw the bodies arrive at a hospital in Rafah.

In Gaza City, which was isolated, largely evacuated and suffered widespread destruction in the initial weeks of the war, an airstrike flattened a family home, killing seven people, including three women, according to Sayed al-Afifi, a relative of the deceased.

The Israeli military rarely comments on individual strikes and blames civilian casualties on Hamas because the militants operate in dense residential areas.

Dr. Tedros Adhanom Ghebreyesus, the head of the U.N. health agency, said a WHO team was not allowed to enter Nasser Hospital on Friday or Saturday “to assess the conditions of the patients and critical medical needs, despite reaching the hospital compound to deliver fuel alongside partners.”

In a post on X, formerly Twitter, he said there are still about 200 patients in the hospital, including 20 who need urgent referrals to other hospitals.

Israel says it has arrested over 100 suspected militants, including 20 who it says participated in Hamas’ Oct. 7 attack on Israel, without providing evidence. The military says it is looking for the remains of hostages inside the facility and does not target doctors or patients.

The Gaza Health Ministry said 70 medical personnel were among those arrested, as well as patients in hospital beds who were taken away in trucks. Ashraf al-Qidra, a spokesperson for the ministry, said soldiers beat detainees and stripped them of their clothes. There was no immediate comment from the military on those allegations.

The war erupted after Hamas burst through Israel’s defenses and attacked communities across southern Israel, killing some 1,200 people, mostly civilians, and taking around 250 hostage. Militants still hold around 130 hostages, a fourth of whom are believed to be dead, after most of the others were released during a weeklong cease-fire in November.

The war has killed at least 28,985 Palestinians, mostly women and children, according to Gaza’s Health Ministry, which does not distinguish between civilians and combatants in its records. The toll includes 127 bodies brought to hospitals in the past 24 hours, it said Sunday. Around 80% of Gaza’s population have been driven from their homes and a quarter face starvation.

David Satterfield, the U.S. Middle East envoy for humanitarian issues, said Friday that Israeli strikes on Hamas-run police guarding aid convoys had caused them to halt the escorts, making it “virtually impossible” to deliver desperately-needed aid because of the threat of criminal gangs. He also said Israel has not presented specific evidence for its claims that Hamas is diverting U.N. aid.

Algeria, the Arab representative on the U.N. Security Council, has circulated a draft resolution demanding an immediate humanitarian cease-fire and unhindered humanitarian access, as well as rejecting the forced displacement of Palestinian civilians.

U.S. Ambassador Linda Thomas-Greenfield said in a statement late Saturday that the draft resolution runs counter to Washington’s own efforts to end the fighting and “will not be adopted.”

“It is critical that other parties give this process the best odds of succeeding, rather than push measures that put it — and the opportunity for an enduring resolution of hostilities — in jeopardy,” she said.

The U.S. has used its veto on similar previous resolutions with wide international support, and President Joe Biden has bypassed Congress to rush arms to Israel while urging it to take greater measures to spare civilians and facilitate the delivery of humanitarian aid.

The U.S., Qatar and Egypt have spent weeks trying to broker a cease-fire and hostage release, but there’s a wide gap between Israel and Hamas’ demands and Qatar said Saturday that the talks “have not been progressing as expected.”

Hamas has said it will not release all of the remaining hostages without Israel ending the war and withdrawing from Gaza. It is also demanding the release of hundreds of Palestinians imprisoned by Israel, including top militants.

Netanyahu has publicly rejected both demands and any scenario in which Hamas would be able to rebuild its military and governing capabilities. He said he sent a delegation to cease-fire talks in Cairo last week at Biden’s request but doesn’t see the point in sending them again.

In an interview with Israel’s Kan public broadcaster on Saturday, Netanyahu’s national security adviser said that military pressure and sticking to a strict line in the negotiations could lead Hamas to drop its “absurd demands that nobody could accept.”

Tzachi Hanegbi said the U.S. supports Israel’s campaign to destroy Hamas’ capabilities and has not pressured Israel to end the war or withdraw troops from Gaza.

Netanyahu has pushed back against international concern about a planned Israeli ground offensive in Rafah, saying residents will be evacuated to safer areas. Where they will go in largely devastated Gaza is not clear.

The Israeli leader is also opposed to Palestinian statehood, which the U.S. says is a key element in its broader vision for normalization of relations between Israel and regional heavyweight Saudi Arabia, as well as Arab investment in Gaza’s postwar reconstruction and governance.

Payment, Deals Followed Biden Meetings w/Son's Associates

Real Clear Politics -

House impeachment investigators are seeking to uncover what role, if any, Joe Biden played in his son's foreign business dealings. After repeated denials of ever having met Hunter's business partners, evidence of meetings, key payments and witness testimony tell another story.

Biden’s brother used his name to promote a hospital chain. Then it collapsed.

Politico -

In 2017, a hospital operator set out to build a rural health care empire with the help of a Philadelphia-area consultant.

The consultant, Jim Biden, had no experience running hospitals. But he did understand the federal government and had ties to labor unions. Perhaps more important, he was the younger brother of Joe Biden.

The final years of the Obama administration had cemented the former vice president’s towering stature in the world of health care, where he had made the fight against cancer a top federal priority and, then, a centerpiece of his legacy-building efforts.

For then 67-year-old Jim Biden, the third of four Biden siblings, his ties to his older brother made up much of his pitch as he pursued deals that could help Americore make money from drug rehab, lab testing and even cancer treatment.

“This would be a perfect platform to expose my Brothers team to [your] protocol,” Jim Biden wrote to the CEO of a Tampa-area company that controlled licensing rights to an experimental cancer treatment the hospital operator wanted to offer. “Could provide a great opportunity for some real exposure.”

The email, obtained by POLITICO from a person close to the company, documents one of the many ways in which Jim Biden invoked his brother’s name and clout in the course of his work with Americore, which has since gone bankrupt, wreaking havoc in rural communities in the process.

Jim Biden spoke of plans to give his brother equity in Americore, according to one former Americore executive, and install him on its board, according to a second. He also said that if Americore could find a winning business model for rural health care, his brother could promote the company in a future presidential campaign, a third former executive told POLITICO. All were granted anonymity to discuss a company mired in legal and political controversy

In order to fund Americore’s expansion, Jim Biden offered to secure capital from investors in the Middle East, according to the emails and executives. When the expected money did not arrive, it aggravated Americore’s preexisting financial issues. The company collapsed, leaving behind unpaid bills and neglected patients.

The management failures took a human toll as hospital staff went unpaid, services dwindled, and authorities were forced to intervene. At Americore’s hospital in southeastern Kentucky — ravaged by staff departures and dwindling medical supplies — a patient died of cardiac arrest in late 2018 after receiving substandard care, according to a Department of Health and Human Services report obtained by POLITICO.

Four years after its bankruptcy, federal investigators are still pursuing questions about what else happened at Americore.

In September, the Securities and Exchange Commission accused one of Jim Biden’s business partners of fraud related to loans to the company, allegations the business partner has denied.

Meanwhile, the Justice Department found that Americore’s hospital in Pennsylvania entered into sham service agreements and paid kickbacks as part of a scheme that billed the government for medically unnecessary lab tests the hospital shipped out to be performed elsewhere.

Those actions are at the center of a federal prosecution of a $100 million conspiracy to defraud Medicare that has netted a guilty plea from the recipient of the kickbacks, and, according to a person familiar with the case, remains ongoing.

Now, House Republicans pursuing an impeachment inquiry focused on the relationship between the president and his relatives’ business dealings have also homed in on Americore. The House Oversight Committee is set to interview Jim Biden on Feb. 21 as part of the inquiry.

As the layers of activity that occurred in and around Americore are peeled back in a federal prosecution in Pennsylvania, a bankruptcy court in Kentucky, and tense witness interviews on Capitol Hill, a POLITICO investigation renders the most detailed picture to date of the ways in which Joe Biden’s relatives leveraged his public stature to advance a private business venture.

The investigation — based on public records, court filings, dozens of interviews and hundreds of exclusively obtained internal documents — reveals that Jim Biden’s role at Americore was larger than previously reported: In some internal documents and investor materials his name is included among its top handful of leaders. He also helped the company seal regulatory approval to acquire the Pennsylvania hospital and personally fired Americore’s chief financial officer, according to the emails obtained by POLITICO.

The investigation also reveals that Joe Biden’s name and inner circle were more involved with the company than has been understood: In addition to the accounts provided by former executives, investor materials described Jim Biden as an adviser to his older brother. And on top of Joe Biden’s own previously reported encounter with the firm’s CEO, at least three of Joe Biden’s relatives did work with Americore. They include Jim Biden’s wife, Sara, and his son, Jamie. The president’s son, Hunter Biden also met with its CEO, and his personal doctor — current White House physician Kevin O’Connor — joined a meeting with Jim Biden and the president of a hospital being acquired by Americore, according to a former executive and emails obtained by POLITICO.

While the extent to which Joe Biden’s relatives have invoked their ties to him to advance their business careers has been a subject of ongoing controversy, the documents obtained by POLITICO demonstrate that Joe Biden was a central element of Jim Biden’s pitch to potential partners and investors during this period.

None of these Biden family members would answer specific questions related to Ameriore. The White House did not respond to detailed requests for comment.

Jim Biden has not been accused of criminal wrongdoing. His attorney, Paul Fishman, said in a statement that he “conducted himself ethically and honorably in all his business dealings.” A spokesman for Jim Biden declined to answer detailed follow-up questions, writing, “We are not able to participate in this story at this time.”

POLITICO’s investigation did not find that Joe Biden involved himself in the firm or took actions on its behalf. However, Joe Biden did benefit indirectly from his brother’s work with the firm. On the same day Jim Biden received a $200,000 payment from Americore, he made out a check for his brother Joe. The White House has said the check was for repayment of a loan, but did not respond to questions about the circumstances of the loan, including whether Joe Biden was aware of his brother’s income from Americore.

Otherwise, Joe Biden remained on the sidelines as his name and relatives became intertwined with a company that was pitched as a vehicle for his legacy, but stands accused of defrauding taxpayers instead.

“I was sold that Americore was going to be the salvation of rural hospitals,” said one of the former executives. “The whole thing was a scam, and it didn't take that long to figure it out.”

Mississippi Roots

Jim Biden’s involvement with Americore traces back to his family’s decades-long ties to a circle of Mississippi attorneys that supported Joe Biden’s national political ambitions when he served in the Senate.

Since serving as finance chairman of his brother’s first Senate campaign in his early 20s, Jim Biden had regularly struck up business relationships with Joe Biden’s political backers, including the Mississippians.

The circle orbited around tort lawyer Dickie Scruggs, a brother-in-law of former Republican Senate Majority Leader Trent Lott, who achieved fame and fortune in the 1990s through his scorched-earth legal fights against big tobacco companies.

One of Scruggs’ associates had worked for Joe Biden’s 1988 presidential campaign, and when Scruggs needed congressional support for a large tobacco settlement, he hired Jim Biden as a consultant.

Then, in 2007, Scruggs became an early supporter of Joe Biden’s Democratic presidential primary bid, but the high-flying tort lawyer’s star soon came crashing down when he was caught trying to bribe a judge in a dispute over attorney’s fees.

Scruggs’ downfall also dealt a blow to Jim Biden: As his big brother wielded the gavel of the Senate Foreign Relations Committee and pursued his second presidential run, he was preparing to launch an international lobbying firm with two Scruggs associates. When both of the men were implicated in the bribery scheme and convicted along with Scruggs, the lobbying business was abandoned.

Jim Biden’s dealings went much further with Joey Langston, another lawyer convicted for trying to bribe a judge for Scruggs. When Langston got out of prison, he went into the health care field, and Jim Biden joined him.

Like the Bidens, Langston’s family is a close-knit clan. Just as Jim Biden regularly involved his nephew Hunter in his ventures, Joey Langston sometimes did business with his son, Keaton Langston. A former business partner of the Langstons recalled being struck in a business meeting when Keaton Langston referred to his father as “daddy.”

Some details of the Jim Biden-Joey Langston relationship have emerged from the impeachment inquiry in recent months.

According to a person familiar with Joey Langston’s congressional interview earlier this month, he told investigators that he has lent Jim Biden $800,000, that he has received only $400,000 in repayment, and that he has no documentation of the loans.

According to a second person familiar with the interview transcript, Joey Langston said he has not spoken to Joe Biden in more than a decade and did not know of Joe Biden having any involvement in his brother’s dealings.

Many details of the relationship between Jim Biden and Joey Langston remain sketchy. Sometime around 2015, the two men became involved in a business called Trina Health, in which Jim Biden at one point described himself as a partner.

Trina championed a controversial method for treating diabetes that some insurers balked at paying for. Trina’s founder, G. Ford Gilbert, lobbied the state’s legislature to force insurers to pay for his product. But he was caught bribing the majority leader of Alabama’s House of Representatives, Republican Micky Hammon, leading to Gilbert’s conviction.

Jim Biden and Joey Langston, who were not implicated in the scheme, moved on from Trina, but maintained an interest in the business of health care.

The Biden Brand

In early 2017, Joe Biden was in legacy-building mode.

His son Beau Biden’s battle with brain cancer had inspired the Cancer Moonshot, a federal push to cure the disease, and closely linked the Biden name with health care in the public imagination.

In the waning days of the Obama administration, the outgoing vice president announced he would continue the cancer fight with a nonprofit, the Biden Cancer Initiative. In June, the nonprofit officially launched.

At the time, Jim Biden was in empire-building mode. Like his older brother, his plans included health care.

One aspect involved a business that allowed hospitals to outsource the complicated, but often lucrative, work of performing medical tests to a specialized service.


In May 2017, a company that provided lab services, Fountain Health, LLC, was incorporated in Mississippi with Keaton Langston listed as its sole member. And it was through Fountain Health that Jim Biden first found his way to Americore, according to one of the hospital operator’s former executives.

At the time, Americore had recently been founded by a Canadian entrepreneur, Grant White, as a vehicle for taking over distressed rural hospitals. White believed he could create a better business model for these facilities by capitalizing on the value of their underlying real estate, and the company was in the process of acquiring a handful of hospitals across the eastern half of the United States.

One of them was in Pineville, the seat of Bell County in southeastern Kentucky. That’s where both Langstons and Jim Biden showed up in May 2017 to pitch Americore on outsourcing its lab services, according to the former Americore executive.

White, who had little experience running clinical labs himself, was sold on the idea.

By early June, Fountain had made a deal with a hospital that Americore had recently agreed to acquire outside of Pittsburgh, according to a contract obtained by POLITICO.

The contract was included in a cache of tens of thousands of internal Americore documents, dealing with all aspects of the business, which changed hands in the course of one of the many private disputes related to the company. POLITICO, which first began reporting on Jim Biden’s Americore involvement in 2019, recently obtained the cache, and this article draws on hundreds of the documents within it.

Jim Biden’s representatives declined to respond to questions about whether he has a relationship with Fountain Health.

As relations deepened between Fountain Health and Americore in the summer of 2017, Jim Biden grew closer to White. He saw even more potential in struggling rural hospitals than the value contained in their real estate.

In addition to cancer treatment, he believed he could help Americore land contracts from the Veterans Affairs Department, an area rife with federal subsidies, and from labor groups, political allies of his older brother with whom he had built longstanding business ties over the decades, according to emails and the former Americore executives.

A few weeks after Fountain concluded the deal with Ellwood City Hospital in Pennsylvania, Jim Biden took O’Connor, an army veteran who served as Joe Biden’s government-provided doctor during the Obama administration, to meet with the hospital’s president, Beverly Annarumo.

“You and your team clearly share our vision, and I look forward to seeing you again in coming months,” O’Connor, who now serves as Biden’s White House physician, wrote to Annarumo later that week. Annarumo did not respond to requests for comment.

The White House did not respond to requests to interview O’Connor. The physician, who also lists an affiliation with the George Washington University’s medical school, did not respond to an email sent to him through the university’s website.

As the summer wore on, plans for a health care empire continued apace.

On July 12, Joey Langston emailed Jim Biden, Keaton Langston, White and two others to schedule a “meeting for Fountain Health partners” the next week.

“Jim will report to the group the results of his discussions earlier today with a contact at [Blue Cross Blue Shield],” he wrote. “There will also be discussion about how to proceed with the Union contacts that have been made by Jim and Keaton, within the last two weeks.”

The partners’ meeting had to be put off so that White and Jim Biden could attend a meeting in Ellwood City, where Americore’s hospital acquisition faced review by the state.

Once the acquisition was completed, Joey Langston wrote in another email to Jim Biden and others, Fountain could dramatically increase the samples it sent to Ellwood City for lab testing.

But before the deal could close, it needed to be reviewed by the office of Pennsylvania’s attorney general. At the time, that was Josh Shapiro, who, as the Democratic nominee for that post in 2016, had campaigned alongside Joe Biden.

Approval was no guarantee. Americore’s efforts to acquire a hospital in southwest Virginia were encountering resistance: Local authorities had learned about financial problems in Pineville, where the hospital had just failed to make payroll, and about one of White’s previous ventures in Canada, in which investors had been saddled with losses.

In Pennsylvania, the company had a leg up. With his roots in Scranton, and his three decades representing neighboring Delaware, Joe Biden had earned the honorific of Pennsylvania’s “third senator,” and an endorsement from a Biden could help ease concerns about Americore’s trustworthiness.

On a Thursday afternoon in July, Shapiro’s office held a hearing at the hospital to solicit feedback on the proposed takeover. In a show of support, Jim Biden accompanied White, who noted the presence of his new ally. “We also have Jim Biden here as one of our strategic partners,” White said, according to a transcript of the hearing obtained under Pennsylvania’s Right-to-Know Law. “Very familiar person I’m sure.”

In the weeks that followed, Shapiro recommended the approval of Americore’s acquisition of the hospital, which began going by the name Ellwood City Medical Center, according to a September 2017 order issued by Lawrence County judge David Acker that greenlit the takeover.

Representatives for the attorney general’s office directed requests for more information about the approval to the state’s public records process, where a request for documents remains pending. Representatives for Shapiro, who now serves as governor, did not respond to requests for comment.

Americore’s bid enjoyed support from some local stakeholders, and it is unclear what role Jim Biden’s help played in the approval.

His appearance at the Ellwood City hearing had been a rare sign of visible support. As a personal business bio he sent Grant White a few days after the hearing made clear, he preferred to operate in the background.

“Jim has been advising his brother in relation to implementing the Cancer Moonshot, his nephew Beau Biden’s legacy foundation and other Biden family projects,” the bio states. “Through the years, Jim has personally met and has maintained relationships with many key governmental and business leaders throughout the world. He remains the closest personal advisor to his brother. He prides himself in maintaining a low business and political profile.”

Big Brother

In private, Jim Biden was less shy, especially when it came to invoking his older brother.

Several former Americore executives said Joe Biden was central to Jim Biden’s ambitions for the company.

One said that Jim Biden explained to him "His brother was very interested in rural health care and very interested in veterans’ health care and it was something he really wanted to get behind."

In fact, Jim Biden told the executive, if Americore successfully demonstrated a model for revitalizing rural health care, Joe Biden could run on it in 2020. "This would help his brother get elected if it were to take off and go," the former executive explained.

Another former executive said that Jim Biden spoke of plans — which did not come to pass — to give Joe Biden equity in Americore.

The plans were part of broader discussions about Jim Biden taking an equity stake of his own in the company, this person said.

A third former executive said that White and Jim Biden spoke of plans to put Joe Biden on Americore’s board.

None of them recalled any indication that Joe Biden ever did involve himself in the company, though his younger brother also invoked him in the course of wooing potential business partners and acquisition targets outside of Americore.

One person on the receiving end of Jim Biden’s health care pitch recalled a phone call in which Jim Biden said he was sitting in a car next to his brother Joe. Joe Biden has said that he never discussed business with his brother.

Previously, an executive who was suing Jim Biden told POLITICO that in a call with the maker of an oral health care rinse he had offered to have the product promoted by the Biden Cancer Initiative. At the time, a spokesman for Jim Biden dismissed that allegation as “pure fantasy.”

The newly obtained email sent to another potential business partner confirms that Joe Biden at times was featured in Jim Biden’s pitch. “This would be a perfect platform to expose my Brothers team to [your] protocol,” he wrote to Jonathan Brenner, the CEO of Tampa-area health care firm Medicus. Brenner did not respond to requests for comment.

While Joe Biden has said he never discussed business with Jim Biden, he did have a chance to meet Americore’s CEO.

In September of 2017, White attended a fundraiser for the Beau Biden Foundation, a nonprofit dedicated to fighting child abuse, alongside Jim Biden. At the event at the Wilmington Country Club, White met Joe Biden, though there is no indication they discussed business.

The next month, White met Jim and Hunter Biden for lunch at the Mandarin Oriental Hotel in Manhattan. The trio discussed the possibility that Americore could land an investment from associates of Jim and Hunter Biden affiliated with CEFC, a Chinese energy firm, according to a person familiar with the conversation.

Tracy Schmaler, a communications consultant who has been fielding media inquiries on behalf of Hunter Biden’s legal team, did not respond to a request for information about the encounter.

In November, Jim and Hunter’s plans with the Chinese businessmen were upended when one of them, Patrick Ho, was arrested by the FBI for bribing government officials in Chad and Uganda.

As he looked elsewhere for investment capital, Jim Biden enlisted the help of more relatives.

Emails also show that his son, Jamie Biden — a creative type known for his turn as a long-haired DJ in the Hamptons — pitched in, helping to create a video presentation about Americore intended to entice investors.

Jim Biden’s wife, Sara Biden, an attorney and a partner in Jim’s consulting firm, Lion Hall Group, was more involved. She helped prepare investor presentations and for a time was given her own Americore email address, according to emails obtained by POLITICO.

Neither Jamie Biden nor Sara Biden responded to requests for comment.

At one point, Sara Biden sent a person involved with fundraising a draft investor presentation “with a few minor revisions by Jim.” The presentation describes Jim Biden as a partner with Americore alongside a brief bio that begins by identifying him as “Brother and Campaign Finance Chair of former Vice President Joe Biden.”

‘Threatening the former vice president’

As the hunt for financing continued, Jim Biden increasingly focused on deep-pocketed investors from the Middle East. He said his connections there would help him land Americore a large investment, according to former Americore executive Tom Pritchard, who spoke to POLITICO about the matter in 2020, as well as three other former executives at the company.

For help, he worked with a hedge fund manager, Michael Lewitt, with whom he was friendly, and Amer Rustom, the CEO of business development firm the Platinum Group, who has boasted of ties to officials in the Middle East. Eventually, Lewitt and a group of Platinum-related companies committed to raise the $30 million for Americore, according to a complaint filed against Lewitt by the SEC.

Rustom did not respond to requests for comments sent to the Platinum Group.

In August of 2017, Jim Biden began workshopping a letter that Rustom was to deliver to Khaled Sultan Al Rabban, an official at the Qatar Investment Authority, according to emails obtained by POLITICO. He shared one version of the letter with White. A few days later, Sara Biden sent an updated version to Hunter Biden to review.

In this draft, which was among the documents found on Hunter Biden’s abandoned laptop, Jim Biden writes that, though the Bidens are not lobbyists, “My family could provide a wealth of introductions and business opportunities at the highest levels that I believe would be worthy of the interest of His Excellency.”

“On behalf of the Biden family, I welcome your interest here,” the letter states. Jim Biden’s representatives declined to respond to questions about his efforts to raise overseas capital, and the Qatar Investment Authority did not respond to a request for comment.

Whatever happened with the Qataris, months went by without an investment arriving. By January 2018, Americore was insolvent, according to the SEC’s complaint against Lewitt.

In the middle of that month, Lewitt’s fund extended Americore a lifeline in the form of a bridge loan, meant to hold it over until the real investment capital arrived. The size of the initial loan was $2 million, according to the SEC’s complaint.

A few days later, Americore wired Jim Biden $400,000. Bank records filed in Americore’s federal bankruptcy case describe the payment as a loan.

Around this time, Jim Biden — who has been variously described in internal documents and investor presentations as an Americore “partner,” “principal” and “advisor” — waded deeper into the business. He set up an office at Americore’s Fort Lauderdale headquarters and began participating in some hiring and firing decisions, interviews with former executives and emails show.

On March 1, Americore wired Jim Biden $200,000, again described in bank records as a loan. That same day, Jim Biden wrote a check to Joe Biden for $200,000, describing it as a loan repayment in the memo line.

The White House, which did not respond to questions about the transfer, has also characterized it as a loan repayment in statements to media outlets. POLITICO previously reviewed bank records that show a $200,000 payment to Jim Biden from an account that appeared to belong to Joe Biden made several weeks earlier.

With Lewitt’s bridge funding keeping Americore afloat, the company continued to pursue a big overseas investment.

On Friday, March 9, Americore executives worked into the night to prepare materials for their investor pitch.

But according to a person present, those efforts hit a hitch when the company’s new financial officer, Tony Sudduth, refused to put together financial statements. Sudduth protested, the person said, that he had not been provided with enough information, such as bank records documenting the firm’s debts and revenues, to produce legitimate statements.

The next morning, a Saturday, Jim Biden summoned Sudduth to the office and fired him, according to emails and a person familiar with the situation. The firing set off a flurry of emails between Jim Biden, Americore executives and the company’s outside counsel.

In a memo drafted to memorialize the firing, Jim Biden wrote that White directed him to fire Sudduth. According to the memo, Jim Biden informed the ousted CFO that “The synergies weren’t right, and that for a myriad of reasons, some of which I may not even be fully aware, it was determined that it was necessary to terminate him.”

Two weeks later, Sudduth emailed Jim Biden and White to demand severance. “I have seen enough,” he wrote, “that I am pretty sure Americore’s partners would not welcome a public battle that will ultimately disclose and expose the complete workings of the organization.”

The email does not specify what Sudduth might expose, but a person familiar with the situation said that Sudduth had concluded during the course of his short tenure that the company’s business model was premised on overcharging for lab tests.

In a note to outside counsel, White remarked that Sudduth’s email, in which he alludes to the prominence of the Biden family, “reads like he is threatening the former vice president of the United States.”

Despite the company’s tight finances, Americore later drafted a severance agreement that offered Sudduth, who had worked there for about two months, $100,000.

Jim Biden’s representatives declined to respond to a question about Sudduth’s firing and Sudduth declined to comment.

At the time, the company still expected that a large cash infusion was imminent.

In late March, Jim Biden confirmed in an email to White that Americore would have a $30 million line of credit in place by mid-April to begin financing acquisitions.

But the money still did not materialize.

By mid-May, bickering began to ensue. White threatened to get financing elsewhere. Jim Biden responded with a soul-baring note, expressing hurt that White had undermined him in front of others.

“Believe it or not, I am a sensitive person where optics makes a big difference in my life,” he wrote.

He implored White to provide a more detailed financial picture of the operation, writing, “This kind of investment would generate a great deal of scrutiny both of the company’s financials and of me personally.” And he emphasized his own commitment to raising money for the company, writing, “I agreed to go to Qatar, Saudi Arabia and China (at my own expense).”

He also took exception to the suggestion that White did not need him. “I believe in my value” he wrote, “with the VA, Labor, the Blues, drug & rehab, the financial community, etc.”

A ‘blockage’ in Dubai

The strain reflected the company’s dire need for money as it awaited financing. The problem was made worse by pressure on its lab billing revenues.

Back in January 2018, the head of the Ellwood City Medical Center had emailed Americore executives, as well as the Langstons, with bad news: Blue Cross was suspending payments for lab services and refusing to pay for tests submitted by Ellwood’s lab that came from out-of-state patients.


The hospital in Pineville also faced financial problems. There, Americore had, without warning, stopped paying health insurance premiums for its Pineville employees. Staffers, who continued to have the premiums deducted from their paychecks, only learned of the problem when their insurance claims met with surprise rejections.

As a result, when the husband of one longtime employee, Betsy Marsee, died, her life insurance claim was denied, according to Pineville Mayor Scott Madon, a former executive at the hospital, and a report in the Middlesboro News. Attempts to reach Marsee were unsuccessful.

In April of that year, the Kentucky labor department opened a criminal investigation into the unpaid premiums. The department did not respond to a request for comment.

As the financial strain grew, White increasingly came to rely on merchant cash advances — which in effect often amounted to high-interest loans — to keep his operation afloat.

In June, one of Americore’s lenders, GTR Source, obtained a $1.5 million judgment against it, one of several obtained by Americore’s creditors in New York. As a result, PNC Bank froze Ellwood City Hospital’s bank accounts, sparking panic inside the company and a protracted legal fight.

For a time, it appeared that financial relief was in sight as Lewitt tried to transfer funds between the United Arab Emirates and its neighbor, Qatar, in order to move them into the United States.

In late June, Lewitt wrote to Jim Biden and White, “We are working on moving the Dubai money into Qatar. The blockage is slowing things down but we are moving as quickly as we can… Amer would like me to join Jim for the presentation to the Finance Minister in Doha so as soon as we have the date I will plan my travel.”

Asked about the nature of the blockage, Lewitt declined to comment. Whatever issue was preventing Americore from accessing the overseas funds, it was not resolved in time to save the company.

Around this time, Jim Biden and Grant White were pursuing a more extensive partnership that would have given Jim Biden’s Lion Hall Group a roughly one-third stake in an Americore holding company that would own several subsidiaries, according to emails, documents and a proposed operating agreement, dated June 18, 2018, obtained by POLITICO.

Instead, on July 5, Jim Biden suddenly cut off contact with White altogether. “Based on information I have become aware of over the last several days, it has become increasingly clear to me that moving forward I can’t be involved with Americore,” he wrote.

Pritchard previously told POLITICO the departure was related to politics: “Jim needed to lay low because his brother was possibly running for president, and he didn’t need any bad press.”

That summer, Lewitt wrote in an email that emerged in later litigation that relations with White had soured because White had failed to disclose he had taken out merchant cash advances and generally managed the company’s finances poorly.

White declined to comment “for the time being.”

Despite the falling out with White, Jim Biden’s foray into health care was not over. He, Lewitt and Rustom continued to separately court two companies that had previously been in partnership talks with Americore.

Later, those companies sued Jim Biden, Lewitt, Rustom and others in federal court in Tennessee, alleging in filings that they engaged in a “classic fraudulent bait-and-switch.”

According to the Tennessee complaint, Jim Biden and his associates encouraged the two companies to make costly acquisitions while promising to fund them with an imminent overseas investment that never materialized. The complaint alleged that the intent of those actions was to drive the companies into bankruptcy so that Jim Biden and his associates could then take control of the companies.

Jim Biden and his associates denied wrongdoing in the Tennessee case, which settled on undisclosed terms.

‘Liquid gold’

While Jim Biden had cut off direct contact with Americore, the same was not true for all of his associates.

Lewitt’s fund lent the company additional funds, and Keaton Langston continued to provide lab testing services through Fountain Health.

But in the months after Jim Biden parted ways with White, Americore’s finances deteriorated, and scrutiny of its lab billing practices intensified.

In September, United Healthcare sent its hospital in Ellwood City an audit letter, obtained by POLITICO, saying that it was investigating a dramatic surge in billing claims for lab services that began in the third quarter of 2017.

A spokesman for the insurer, Bryan Fisher, declined to share the results of its investigation, citing the sensitivity of billing audits and the frequency with which their results attract attention from law enforcement.

Indeed, lab billing schemes have kept federal law enforcement officials busy in recent years, as loosely connected criminal networks swap tips about the most lucrative tests and the latest loopholes that people seeking to defraud Medicare can exploit to thwart detection.

Many of the schemes involve teams of marketers who fan out to well-trafficked locations like senior centers and health fairs and induce people, often the elderly, to provide cheek swabs on the promise of receiving a free disease screening. Another popular avenue for lab billing frauds in recent years has been drug testing, which can be so lucrative that some in the drug rehab have world taken to calling urine “liquid gold.”

At Americore’s hospital in Ellwood City, the alleged fraud had begun with drug tests, which were performed elsewhere and then billed to private insurers, according to a complaint filed in federal bankruptcy court in Kentucky against Keaton Langston and others by Carol Fox, the DOJ-appointed trustee charged with overseeing Americore’s liquidation.

(The complaint also names a Fountain Health entity in Delaware as a defendant, saying that Keaton Langston and a co-conspirator, Florida businessman Daniel Hurt, who has admitted to his role in Medicare fraud at the hospital, owned or controlled it. Other than a shared connection to Keaton Langston, it is not clear if that Fountain Health entity is related to the one Keaton Langston registered in Mississippi.)

When the insurance companies discovered the alleged fraud and started to claw back their money, Keaton Langston and his co-conspirators allegedly embarked on a Medicare fraud scheme, according to the complaint.

The alleged conspirators targeted senior citizens at sites around the country that included churches and synagogues, inducing them to provide cheek swabs for genetic cancer tests that were then shipped to Ellwood City, according to Fox’s complaint, which states they were then repackaged for processing elsewhere, while Americore’s hospital filed millions of dollars worth of fraudulent Medicare claims for tests it did not perform.

Keaton Langston’s Fountain Health email address is no longer working. A phone number listed for him on one of Fountain Health’s contracts was disconnected. The contract also lists an email address for Keaton Langston at the Mississippi law firm of Langston & Lott, but a note sent to that address did not receive a response.

Casey Langston Lott, a cousin of Keaton Langston’s and the owner of that law firm, said Keaton Langston is not affiliated with his firm. He declined to provide contact information for Keaton Langston.

Lott is listed as the registered agent of the Fountain Health entity that Keaton Langston incorporated in Mississippi, but he told POLITICO that he was not familiar with Fountain Health.

In September, court records show, the bankruptcy court approved a settlement in which Keaton Langston denied wrongdoing and agreed to pay $240,000.


Lott, who acted as his uncle Joey Langston’s lawyer for his impeachment inquiry interview, said that his uncle declined to comment for this article.

‘Endangering the lives of my patients’

Even as tens of millions of dollars flowed into Ellwood City Medical Center from Medicare fraud, the quality of care at the hospital diminished.

In the final months of 2018, as Americore stopped paying bills, doctors abandoned the hospital and utility providers prepared to cut it off from gas and water.

Employee paychecks were delayed, and then started to dry up altogether. Alan Dambach, who served on the local board of trustees overseeing the hospital, said that when stray funds came into the hospital through accounts receivable, they were quickly divvied up among staff who had stopped receiving regular paychecks. Sporadic, meager pay was better than none at all.

The Lawrence County District Attorney opened a criminal investigation of the hospital. So did Shapiro’s office and the U.S. Department of Labor.

In January of 2019, Pennsylvania’s Health Department placed the hospital on a probationary license, citing failures that included the need to transfer a surgery patient because it had run out of supplies, according to an investigation of the hospital’s shortcomings published by the local Beaver County Times. Eventually, the health department shuttered Ellwood City’s inpatient services and emergency room altogether.

At Americore’s hospital in Pineville, Kentucky, the situation was arguably worse.

A January 2019 report by HHS’ Centers for Medicare & Medicaid Services — obtained by POLITICO from Kentucky’s health department — paints a vivid picture of conditions there.

Over the course of 2018, doctors left, equipment went without maintenance and medical supplies became scarce. At times, staffers had to leave the operating room mid-surgery to track down missing gauze.

In July of 2018, a nurse in the hospital’s emergency department told an emergency dispatcher not to bother bringing in a stroke victim. “We are just going to kill this guy,” the nurse explained, according to an audio recording cited in the report. The patient, already en route to Pineville, was diverted via helicopter to another hospital.

In October, the report said, a surgeon quit after concluding that operating there was “endangering the lives of my patients.”

Then, just after 8 p.m. on the first Tuesday of December, a patient arrived in the throes of cardiac arrest.

Twice, the patient needed epinephrine to stimulate their heart, but the hospital did not have enough of the drug on hand, and staff from the ambulance service had to provide it.

A doctor ordered an X-ray of the patient’s chest, but it appears none was taken: A nurse later told an HHS investigator that there were no radiology staffers on hand that night.

At 9:55, the patient, identified by HHS only as Patient #12, was pronounced dead.

A few months later, the city was forced to take over the hospital and fire much of its staff.

Though Jim Biden was long gone, some people involved with the company felt he should share some blame for the fiasco.

“My impression is that the fact that the money Biden promised didn’t come, it had a ripple effect,” recalled one executive at the Pineville hospital, who was granted anonymity to discuss internal matters. “Things didn't get paid.”

On New Year’s Eve, Americore filed for bankruptcy.

Congress, the Courts and a Conviction

Americore’s collapse created legal and political shockwaves that continue to reverberate four years later.

Three weeks before the bankruptcy filing, FBI agents paid Pineville a visit, according to a person interviewed by them there. Among the topics they asked about was lab billing, he said.

The next month, the FBI raided the Ellwood City Medical Center.

In 2022, the Justice Department obtained a guilty plea from Daniel Hurt — the Florida businessman named in Fox’s civil complaint — for his role in the Medicare fraud scheme run through the hospital and a third Fountain Health entity. A lawyer for Hurt, Colin Callahan, declined to comment.

Prosecutors alleged that, in some cases, the hospital fraudulently billed Medicare more than $6,000 for tests that were ordered on the basis of phony prescriptions and that it paid Hurt kickbacks from its Medicare reimbursements under the guise of sham service agreements.

The Justice Department filing accompanying Hurt’s guilty plea states that he worked with co-conspirators, but does not name them.

A person familiar with the Justice Department’s criminal case said it remains open.

Also in 2022, Fox, the bankruptcy trustee, sued Jim Biden for fraudulent transfer over the payments he received from Americore, saying he had failed to repay loans from the company.

Jim Biden responded that the transfers had in fact been consulting payments. The dispute settled, with Fox stipulating she had not been provided evidence that Jim Biden engaged in fraud and Jim Biden agreeing to pay back $350,000 of the $610,000 he had received from Americore.

This past September, the SEC sued Lewitt alleging he had defrauded his fund’s clients, including a large number of senior citizens. The agency alleged that his loans to Americore violated the fund’s policies and that Lewitt had taken $4.7 million out of the fund for his own personal use. Lewitt has denied wrongdoing.

With Americore in ruins, taxpayers have little prospect of being made whole. The federal government has filed a claim for more than $142 million from the defunct company for Medicare fraud alone, according to bankruptcy court filings.

House Republicans — who have already interviewed Fox — have signaled their intention to further probe Americore and people tied to it.

In December, Oversight Chair James Comer (R-Ky.) and Judiciary Chair Jim Jordan (R-Ohio) sent Lewitt a letter seeking his testimony.

“I will of course tell them everything I know. I’m surprised it took them so long to contact me,” Lewitt told POLITICO. “Stay tuned.”

As Washington investigates the Americore saga, the rural communities where it operated are still trying to make sense of it themselves.

In Pineville, the hospital’s operations have stabilized with the financial help of a local bank.

The city’s mayor, Madon, said that residents still have questions about Americore’s tenure. His elderly mother, who worked as a telephone operator at the hospital there, has complained, he said, that she fielded confusing phone calls from drug test recipients all over the country who were themselves confused by their billing records: “Ma’am, where is Pineville, Kentucky? I’m from so-and-so Texas.”

Madon said that members of the hospital’s board had initially taken comfort in the appearance of a Biden at the troubled hospital. “They were elated,” he recalled. “Here’s the savior.”

Instead, things only got worse.

Now, Madon is just relieved that Americore’s turn in his city has ended, he said. “It beats anything I’ve ever seen.”

Republicans who ousted George Santos don’t regret it, even though they lost the seat

Politico -

House Republicans expressed few regrets this week for their decision to oust the scandal-plagued George Santos or even for their inability to hold his seat this past Tuesday.

That loss, in a closely watched special election in New York’s third congressional district, has further narrowed an already-thin GOP House majority. But those Republicans who gave Santos the boot said they’d do it again. Some bristled at the idea that they’d now reconsider. “I didn’t shrink the Republican majority — George Santos shrunk it by his actions,” said Rep. Mike Lawler (R-N.Y.). “I’m sorry, you have to have standards in the halls of Congress. And so I don’t regret voting to expel George Santos. He was unfit to serve … Sometimes these decisions are bigger than politics.”

The Santos saga hasn’t just forced Republicans to weigh the ethical transgressions they’d tolerate for a more powerful grip on the House chamber. It has required them to confront the possibility that their formula for winning some battleground seats like his — a combination of tough-on-the-border and tough-on-crime politics — may not be the blueprint they imagined for November.

But few seem eager to see the party make major structural or policy changes after Democrat Tom Suozzi won the special election convincingly. Instead, lawmakers accused Republican Mazi Pilip of running a bad campaign, noted that now-President Joe Biden won the district by more than eight points in 2020, and pointed to myriad isolated factors — everything from poor party financing, to bad weather, to Santos’ “taint” — to explain away Tuesday’s loss.

“Congratulations to the Democrats, they spent $15 million and won a seat Biden won by eight points, by less than eight points,” National Republican Congressional Committee Chair Richard Hudson (R-N.C.) said, his voice dripping with sarcasm. His takeaway: “If they outspend us three-to-one, they can win Biden plus-8 seats.”

While Democrats did majorly outspend Republicans in the New York race, pouring $14.4 million into political ads in the district compared to the GOP’s $8.5 million, Long Island has raced to the right in the years since Biden’s win. The district had swung so far that Santos won by nearly eight points in 2022 in a race that drew little national attention. Hudson’s dismissiveness belied the hope that many Republicans previously expressed for retaining the seat.

It also wasn’t shared by everyone in the party.

Some members expressed concern that months of dysfunction in the GOP-led House had left them with few clear wins to tout to voters beyond the impeachment of Department of Homeland Security Secretary Alejandro Mayorkas and the passage of a major immigration overhaul early this Congress that is going nowhere in the Senate.

“I think ultimately we always have to be judged on both what we try to achieve and what we actually achieve,” said Rep. Marc Molinaro (R-N.Y.). “And we have to achieve more.”

Others, particularly those who originally opposed ousting Santos, said that the original sin the party made was to boot him from the chamber before there was a conviction.

“Don't expel a Republican member of Congress that hasn't been convicted of a crime and is a good vote,” said Rep. Marjorie Taylor Greene (R-Ga.), who added that she planned to talk to her conference about the perils of Republican infighting.

Santos himself said House Republicans at large regret pushing him out now that their margin has shrunk even further, telling POLITICO that Pilip’s loss meant taking away voters’ “duly elected choice and recalling their election without allowing them to make that decision in November.”

But as the party took stock of Tuesday night’s election, in which their margin was shaved down to a mere two seats, many seemed simply uninterested in, or disinclined to do, any type of second guessing.

That mindset applied to the tactical choices the party had made in contesting the special election.

“I think our committee did a good job. I think our candidate did a good job,” said senior GOP member Rep. Tom Cole (R-Okla.). “You don't know how much of it was weather related and all that and there's always a lot of individual factors.”

It applied to the vote to expel Santos, too.

“My vote was not contingent on the outcome of the election. It was based on what I thought was the right thing to do,” said Rep. John Curtis (R-Utah), who is running for Senate in 2024. “If it was the right thing to do, then the seat doesn’t matter.”

“I wish we would have won it, but so be it,” said Rep. Mike Bost (R-Ill.)

Santos was first elected in 2022 in a shocking upset, besting Democrat Robert Zimmerman in a race that many thought would not be competitive. But even before he was sworn in, his lies started to unravel. Among the litany of falsehoods he pedaled: Claiming his grandparents were Holocaust survivors, that he had employees who survived the deadly shooting at Pulse nightclub in Orlando; and that his mother was in Manhattan during the Sept. 11 attacks.

A damning 56-page report released last year by the House Ethics Committee found that Santos likely broke federal laws by inappropriately spending campaign funds and working to obscure his trail of campaign money. And when the House voted 311-114 to expel him in December, the vote was notably bipartisan, with 105 Republicans lining up against him.

The loss of his seat on Tuesday was one of a string of almost uninterrupted defeats the GOP has suffered across the country since the midterms. Arguably the biggest of those losses was in Wisconsin. In the most expensive state Supreme Court race ever, a liberal candidate blew out a former conservative justice last spring, flipping the balance of power on the court and leading to the potential break-up of the GOP's durable legislative gerrymander.

Kentucky Democratic Gov. Andy Beshear won reelection in 2023 despite the otherwise deep red tilt of his state. And Democrats took complete control — albeit narrowly — of the Virginia legislature despite a major investment from GOP Gov. Glenn Youngkin. Candidates in special legislative elections last year ran, on average, eight points ahead of Biden's margins.

Still, some Republicans running in competitive districts were not discouraged by Tuesday’s outcome. Republican Alison Esposito, who is challenging Rep. Pat Ryan (D-N.Y.) in his lower Hudson Valley district in New York, said immigration will continue to be an important issue.

“It is clear that Tom Suozzi did a complete 180 on his views on immigration and securing the southern border,” she said in a statement. “He couldn’t run away from the Biden agenda and his past policy mistakes fast enough.”

Other Republicans, including those who voted to expel Santos, made the case that more distance from the ex-representative would, ultimately, serve the party better.

“Probably there was still some Santos taint,” said Rep. Andy Barr (R-Ky.), in downplaying Tuesday’s results. “So it's not representative of our prospects.”

Anthony Adragna, Nicholas Wu, Daniella Diaz, Madison Fernandez and Zach Montellaro contributed to this report.

Control of the House Could Come Down to This New York Republican

Politico -

It’d been three weeks since the ignominious ouster of Speaker Kevin McCarthy and House Republicans were restless and snappish. Majority Whip Tom Emmer had just pulled his name from the running, the third person to drop out of consideration after being backed by a majority of the caucus. There were no clear alternatives left.

Louisiana Rep. Mike Johnson, the runner-up on the last internal party vote, was hardly an obvious consensus candidate among the fractured GOP. Johnson had a minimal public profile, mostly known for pushing a lawsuit to overturn the 2020 presidential election and for his arch-conservative views on social issues, someone who had called legal abortion “an American holocaust,” won taxpayer funding for a creationist theme park and held an open disdain for LGBTQ+ rights.

But he found an ally from an unexpected corner. Rep. Marc Molinaro — a relatively unknown, moderate Republican freshman from upstate New York — played a pivotal role in ushering Johnson into the speakership. He gave an impassioned speech calling on his colleagues to immediately vote for Johnson in a closed-door meeting after Emmer bowed out of the running.

“I basically said, ‘We cannot go back out to that hallway, and into our communities, and say that we denied a member [the] opportunity because he didn’t line up with our purity tests.’ That’s inexcusable,” Molinaro recalled to me in November. Although Molinaro’s speech, detailed first in The Washington Post","link":{"target":"NEW","attributes":[],"url":"https://www.washingtonpost.com/politics/2023/10/28/how-mike-johnson-went-little-known-house-speaker-24-hours/","_id":"0000018d-bc62-dd01-adbd-bce6ece90004","_type":"33ac701a-72c1-316a-a3a5-13918cf384df"},"_id":"0000018d-bc62-dd01-adbd-bce6ece90005","_type":"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}">The Washington Post, rankled some more experienced members, it helped provide momentum for Johnson’s nascent candidacy. Days later, Molinaro was named to the committee that escorted Johnson into the House chamber to be sworn in as speaker.

After meeting with Johnson before the vote, Molinaro had felt assured that he would be a speaker who would listen to fellow Republicans across the ideological spectrum of their caucus. “He understood that he had to give voice to districts like mine,” Molinaro told me. “My very question to him before he became speaker was, could he ensure that members like me and districts like ours were given a seat at the table?” 

Districts like Molinaro’s are crucial to the House GOP majority. Molinaro belongs to a small cadre of freshman Republican representatives from New York who flipped four seats in 2022, more than the soon to be two-seat margin of the GOP majority in the House. His current upstate New York swing district — which he won by just 1.6 percent in 2022, which President Joe Biden would have carried with just over 51 percent in 2020, and in which Democrats outnumber Republicans among registered voters — is the kind that Republicans desperately need to hold on to if they hope to maintain control of the House next year. His unexpected victory in an ostensibly blue state has also granted him unusual influence in the conference.

But heading into 2024, Molinaro is perhaps one of the most vulnerable incumbents in the country — due in part to his support of Johnson, and his propensity for toeing the Republican Party line even as a swing-district representative. Tom Suozzi’s victory in the special election to fill ousted Rep. George Santos’ seat this week proved that moderate Democrats can still win in suburban New York, leaving Molinaro and his ilk in an even more tenuous position.

When I first spoke with Molinaro in his congressional office in early November, he disputed the idea that he was caught between the needs of voters in his large purplish district, and the vicissitudes of a temperamental Republican Conference in Washington — while still acknowledging that he faces an uphill battle. “I do recognize that in a conference such as ours,” Molinaro said, “where clearly our membership is more strongly conservative on some issues, members like me have to speak louder, work harder and be more respectful in gaining support to either slow something down, alter it entirely or make sure the conference hears our voices as well.”

Molinaro argued that electing a speaker was a necessary part of that process. But his connection to Johnson and fidelity to his party in Washington has made him an easy target for Democrats. A recent video by the Democratic Congressional Campaign Committee contrasted Molinaro’s description of Johnson as exhibiting “common decency” with Johnson’s support for further abortion restrictions.

Molinaro dismissed these criticisms preemptively. “The Democrats in Washington, D.C. already decided what the campaign against me and members like me was going to be and they just needed to insert the next villain,” he said. “Those ads were already cut.”

But Molinaro is not just a beleaguered moderate unfairly targeted by the MAGA-hating left. He tries to present himself as a pragmatist, but he clearly prides himself as a reliable Republican — even as that obeisance may drag him down at home. He has fallen in line with more conservative priorities, particularly on immigration. When Molinaro lent his support to opening an impeachment inquiry into Biden — arguing that there was enough smoke pertaining to potential wrongdoing to see if there was any fire with a formal investigation — the Democratic congressional campaign arm seized on it as a further example of his allegiance to Washington Republicans over his own constituents.

It's nearly impossible for him to characterize himself as a good option for Democratic voters, partially because he would be attacked regardless of his positions — and because he is, at his core, a true modern Republican. He needs to prove to his constituents that his blend of party loyalty and strategic independence is the best method to represent them.

In an interview in his district in late November, Molinaro further explained his governing philosophy: He sees his role as bifurcated between the duties of Washington and the duties of representing voters at home. The Molinaro who escorted Johnson into the chamber is the same Molinaro who holds community meetings in his district where the speaker of the House is never mentioned.

“They’re just two very different things,” Molinaro said. He denied that this created any dissonance, that two different jobs necessarily resulted in two different politicians. “I’m very much the same exact person.”

Molinaro has been a politician for his entire adult life, which is apparent as soon as you meet him. Molinaro was elected mayor of his small hometown when he was 19 and has held some kind of public office almost continuously for the three decades since. Now 48 years old, he served as county executive of Dutchess County — located to the south of his current district — for 12 years before entering Congress. 

Molinaro’s handshake is firm, his eye contact expert, his talking points assured without seeming overly studied. He appears nearly immune to questions intended to catch him off guard, volleying back almost immediately with deft answers. Most of the time, he even responds to the question that was asked, instead of the one he’d prefer.

But he’s not above delivering a soundbite: When I interviewed him in his Washington office, Molinaro told me that his strategy in representing his district was to “listen, learn and lead.”

“I live by that: I listen to the people who have concerns, I learn from their concerns and then I respond to them as respectfully as possible,” he said. (Molinaro said the words “listen” and “listening” roughly 20 times in that 30-minute conversation.) By his own account, Molinaro is “highly caffeinated.” When he enthusiastically told me that he finds the constant grind of a congressional campaign “invigorating,” he actually meant it.

It’s relatively easy to find Molinaro these days during a tricky congressional vote, whether it’s related to impeachment, government funding or a bipartisan tax deal. He’ll likely be in the hallway just off the House floor, surrounded by a gaggle of reporters eager to hear how one of the new go-to “moderate” members — read: unwilling to burn the House down for ideological purposes — will describe the internecine drama of the day. As one House Democrat who sits on a committee with Molinaro cracked: “If he wasn’t always on TV, I couldn’t pick him out of a lineup.”

Molinaro has arguably earned the media attention. “Not many freshmen come in here and make an impact in their first term, and he has. He has stature, he has confidence, he’s very well-spoken, and he’s been courageous on a number of legislative issues,” said Rep. Brian Fitzpatrick, a moderate Republican from Pennsylvania and chair of the bipartisan Problem Solvers Caucus, citing Molinaro’s support for organized labor. (In 2022, Molinaro won the endorsement of the state’s largest public workers union, and he has sponsored legislation to provide tax deductions for union workers.)

“It generally takes people two or three years to figure out where the bathrooms are in this town,” Rep. Dusty Johnson, chair of the centrist Republican Main Street Partnership, told me. “Within six months, Marc Molinaro was already viewed as a savvy and strategic operator.”

Molinaro’s influence stems in part from his situation. He is what former Speaker Nancy Pelosi liked to call a “majority maker” — a representative who won a tough swing district, helping to clinch control of the House for his party. “I truly think every member is a ‘majority maker,’” Molinaro demurred when I made this comparison, “but obviously there are certain districts that if that member didn’t win, there still would be a Republican.”

Thanks to those other districts, Molinaro entered Congress during a particularly dysfunctional era, even by modern standards. In his first week in office, Molinaro sat through 15 rounds of voting to elect McCarthy to the speakership. Barely nine months later, the House was consumed in chaos as McCarthy was ousted by a small but recalcitrant faction of Republicans, leading to those three weeks without a speaker.

Before Johnson became the party’s choice for speaker, Molinaro twice voted for Rep. Jim Jordan, the pugilistic chair of the House Judiciary Committee. He broke with several of his fellow freshman Republicans from New York, who chose to name Lee Zeldin — a former congressman from Long Island — rather than lend their support to a controversial figure like Jordan.

Molinaro explained his initial support for Jordan as a desire to keep Congress moving, arguing that his constituents care more about economic issues than the nomination of which Republican became the next House speaker. But to his critics — namely Josh Riley, his Democratic opponent in 2022 who is running again this year — it was a cruel dismissal of his own district.

“He’s in the district, telling people he’s a moderate. And then he turns around and goes to Congress and votes not just with all the extreme elements of his party, but actually for the most extreme people in his party to be speaker,” Riley told me in an interview at the Washington headquarters for the Democratic Congressional Campaign Committee. “I don’t know who you call or label a moderate in the Republican Party these days, but it’s not somebody who voted not once but twice for Jim Jordan to be speaker of the House.”

The conflagration over the speakership was perhaps the most dramatic, but not the only, example of the new lawmaker becoming ensnared in toxic national politics. He recently voted to impeach Homeland Security Secretary Alejandro Mayorkas on largely ideological grounds, and has adopted a hard-line stance on immigration issues, a position influenced by the busing of migrants from New York City to his district.

Where many freshman lawmakers would be content to sit on the sidelines during such epic showdowns, Molinaro’s unique position within the conference — his status as swing-district representative combined with his decades of political experience — granted him a higher profile. “I have more policy initiatives in major pieces of legislation than any freshman member. I think we're the second or third of any member of Congress,” Molinaro said. According to his office, Molinaro has authored and passed, with bipartisan support, two standalone bills, four measures included in the reauthorization of the Federal Aviation Administration and 26 amendments within other larger bills.

Molinaro has taken plenty of more moderate stances. He was one of a few Republicans to block a spending bill because it included a provision to limit access to a popular abortion medication. He is a vocal supporter of raising a cap on the state and local tax deduction — a priority for lawmakers in high-tax states — and helped ensure such a measure was considered in the Rules Committee though it was derailed on the floor. He quietly pressed Johnson on preventing further cuts to food stamps, as POLITICO reported last year.

As a former county executive, Molinaro — who himself benefited from food stamps as a child — appreciates how bureaucracy can help and hinder lower-income Americans. “Having to wait in line for food stamps and watch a government bureaucrat demoralize my mother and make her feel worthless — that's not the system the Democrats claim to support, but it's the one that they've created,” he said. “I've also then had to run a social service agency to make sure that we're trying to wring out every last dollar efficiency without hurting people. That's not necessarily the government that Republicans talk about, but it is the one that empowers people.”

Molinaro was in his element.

Seated at the head of a rectangle of folding tables, Molinaro was on-topic and on-message. He sat in a firehouse in his upstate New York district, surrounded by community and county leaders. It was the Tuesday before Thanksgiving, but fat flakes of snow were already drifting outside as Molinaro spoke, making the case to establish a new mental health support facility in rural Sullivan County.

Molinaro had overseen the establishment of a similar 24-hour facility, called a “stabilization center,” during his tenure as county executive of Dutchess County, with the aim of connecting those struggling with mental health with necessary resources. “My goal will be to try to get you to the next stage. Not get in your way, but continue to encourage, and then connect you with whoever is appropriate to help you make this happen, if that’s what you want to do,” Molinaro pledged to the firehouse crowd.

Although he is relatively new to the area, Molinaro had quickly learned that Sullivan is exceptional in its struggles: Roughly 17 percent of the population lives in poverty, and ranks 60th in health outcomes out of New York’s 60 counties. (Including Sullivan, four of the counties that Molinaro represents are in the bottom 12 of health rankings.)

The 19th Congressional District is notable for its geographic diversity, stretching from the border of Pennsylvania to the border of Massachusetts, collaring upstate New York like a low-slung belt. It includes relatively bustling college towns like Binghamton and Ithaca; it crests the Catskills and borders the Finger Lakes; it is dotted with both ski resorts and family farms.

“The east side of the of the 19th District, the median income is like $65,000. The west side is $32,000,” Molinaro told me. “The only way you will represent this district is by being out among people.” 

As Molinaro happily settled “among the people” in the firehouse meeting, it was possible to forget that, as a federal lawmaker, Molinaro would not be leading the effort to establish a stabilization center in Sullivan County. He casts his vote in Washington, not in the local county legislatures; as much as he sees his job as the mayor of his executive district, he is now but one in 435. “I used to have 1,800 employees, now I have 18,” Molinaro joked.

If the job of lawmaker entailed only community meetings and town halls, one could imagine Molinaro happily spending his days hopping from local event to local event, mediating and facilitating and insisting folks call him “Marc.” Kamal Johnson, the Democratic mayor of Hudson, New York, who has known Molinaro for several years, told me that he believed the representative is an “amazing leader” on the “local level.” “I can’t say anything bad about him reaching across the line to voters,” he said. “I think he knows that’s the name of the game. He knows how to play the game.”

Or, in the words of Michael Dupree, chair of the Democratic Party in Dutchess County: “He’s the type that likes kissing babies.”

Of course, his friendly demeanor isn’t convincing to all of his Democratic constituents. “He does a lot of outreach on touchy-feely topics,” Mary Jo Thomas, the co-leader of the local Indivisible chapter in Binghamton, on the western edge of the district, told me. “He is very concerned — and I believe him — about folks who are neurodivergent or who have other disabilities. But he votes 90 percent of the time with MAGA Republicans. He votes 90 percent of the time with Marjorie Taylor Greene."

Still, Molinaro believes people are more concerned with the price of their electric bill than, say, opening an impeachment inquiry despite no real evidence of wrongdoing by a president. I asked whether he considered himself an institutionalist — someone dedicated to upholding the workings of the House. Molinaro instead identified himself as “pragmatic.”

“People live in the middle. And what they want from the government is either to get out of the way for them to solve their own problems, or get into helping solve their problems,” he said. “Maybe it sounds arrogant. I just know when government can be helpful, and when government can be hurtful. And being pragmatic and understanding that is, I think, really effective as a member of Congress.”

I first met Molinaro in the spring of 2018, shortly after he became the Republican nominee for governor of New York. He was not yet a national target of Democratic ire, but instead was the sacrificial lamb of the New York GOP that year, with the unenviable task of challenging popular then-Gov. Andrew Cuomo as he sought a third term.

When I spoke to him that year for an interview, Molinaro told me he felt a kinship with Luke Skywalker, the protagonist of the original Star Wars trilogy. He considered himself an underdog, like Luke, fighting against an evil empire. However, there was no flaw in the Cuomo political Death Star that Molinaro could successfully exploit at that point — allegations of sexual harassment and mishandling of the coronavirus pandemic wouldn’t emerge for another two years or so — and as the underfunded GOP candidate, he lost by a dramatic margin.

Molinaro exists now in a different political landscape: Cuomo is gone, but Molinaro’s star is once again on the rise, only this time as a leader in Washington. Having kept Donald Trump at arm’s length in his 2018 campaign, Molinaro may have to do the same when seeking reelection in 2024, likely with the former president on the ballot. (Molinaro, who did not support Trump in 2016 but has said he will support the Republican nominee in 2024, failed to mention Trump during any of our conversations.)

Molinaro received some welcome news this week, as the lines of his district were redrawn to be slightly more favorable to Republicans. A bipartisan redistricting commission approved a new map after a state court ruled in December that New York’s districts must be redrawn. Although the map must still be OK'd by the Democratic-controlled Legislature, Molinaro’s district would be slightly more secure for a Republican candidate, going from a district that would have supported Biden by 5 points down to a much narrower 1 point edge based on the 2020 election. Even so, he will need to maintain the separation of his Washington persona from his district reputation if he is to convince Democratic-leaning constituents in November.

The 2024 race is shaping up to be expensive; both Riley and Molinaro have raised millions of dollars. The political action committee affiliated with House Republican leadership has already spent hundreds of thousands of dollars to boost his candidacy.

When I spoke with him in his congressional office, I asked Molinaro if he still felt like Luke Skywalker. He has been in elected politics since he was 19, and now he is firmly ensconced in a national institution, a card-carrying denizen of the Washington swamp. Nonetheless, he said he still feels like an outsider, still “the kid who grew up on food stamps,” now burdened with the responsibility of hundreds of thousands of constituents.

“I might be a little bit [of] the older Luke Skywalker, but still the same. I still have that drive and a little bit of that chip, of being the kid who shouldn’t — I can’t imagine I’m here,” he said.

“And so because I’m here, I’ve used that honor, that privilege and that opportunity to really fight for people who need a little bit of rebellion sometimes.”

It was a classic Molinaro response: quick, quippy, likable. The trick will be finding the balance between necessary rebellion and institutional maneuvering: remaining the hero of his own story without allowing himself to be subsumed by the party that still has his loyalty.

'Walk that line’: Climate protesters weigh how fiercely to air their gripes about Biden

Politico -

Environmental activists urging President Joe Biden to wage a stronger fight against climate change are facing an agonizing strategic decision: How hard can they push him without risking throwing the election to Donald Trump?

Despite delivering the largest-ever investment in climate action through Congress, pouring hundreds of billions of dollars into technologies such as wind power and electric cars, Biden and his appointees have faced loud protests from activists dismayed by administration actions boosting oil and gas production. Unhappiness is especially rife among the young climate-minded voters who Democrats worry will either sit out the November election or back a third-party candidate.

Biden has made recent moves to shore up his support from the Democrats’ green wing, including a pause on new approvals for natural gas export projects. But environmental leaders wonder how aggressively they can prod Biden to go further without causing fatal damage to his campaign — for instance, by pressuring him into positions that would feed Trump’s accusations that his green agenda is endangering the economy.

Protests decrying the administration’s pro-fossil-fuel actions also run the risk of further demoralizing activists who see any compromises as dooming the planet.

“I’m worried about getting climate activists back,” said Erich Pica, president of Friends of the Earth Action, a group that has sharply criticized Biden’s decisions to back fossil fuel infrastructure projects. Given some activists’ doubts about Biden, “I think that is something that the campaign itself has to answer.”

Biden campaign spokesperson Lauren Hitt declined to discuss activists’ responses to the president’s fossil fuel moves. She said in an email that “the President’s climate policy is motivated by common sense.”

But Biden’s challenge was evident Monday when 100 members of the youth-led climate group Sunrise Movement descended on his campaign’s headquarters in Wilmington, Delaware. Police arrested 20 protesters who had entered the campaign office with signs imploring Biden to “Lead or Lose” and to fund climate efforts rather than sending money to Israel.

The activists also demanded that the president declare a “climate emergency.” That move, they said, would unlock executive powers allowing Biden to cancel fossil fuel development on federal lands and direct manufacturers to make renewable energy products.

“Young people have set the bar for what it’s going to take to turn on our generation and mobilize young people to go out to the polls at the level that we did in 2020,” said Stephen O’Hanlon, a spokesperson with Sunrise. “And Joe Biden’s campaign seems to be out of touch with how high that bar is.”

With Biden trailing Trump in several national polls, one of the last things the president needs is part of his base visibly causing confrontation, said Mark Longabaugh, a Democratic strategist who had advised Vermont Sen. Bernie Sanders’ 2016 presidential campaign.

“For these guys to hold a protest, at this moment, creates a nuisance that can be debilitating,” Longabaugh said.

On the other hand, protests offer Biden an opportunity to explain how his administration is addressing climate and clean energy, said Stanley Greenberg, a Democratic strategist who has also performed climate polling in other countries.

But Greenberg cautioned Biden against taking strident positions given voters' sensitivity to energy price swings that could leave him “marginalized.” He instead suggested that Biden lean into how his administration is investing in cleaner energy sources — a move the public broadly supports.

“The right entry point is that people want change and we are in fact leading the change on the climate issue, on the transition to net-zero,” he said.

Young climate protesters have repeatedly registered their disapproval of the president’s actions, disrupting countless appearances by Biden officials and Democratic lawmakers to demand that the administration block projects that his appointees eventually approved. Those include the 600-million-barrel Willow oil project in Alaska, which the Interior Department greenlit last March, and the Mountain Valley Pipeline, which would carry gas from Appalachia to the East Coast. U.S. oil production has reached record highs under Biden, while the country has emerged as the world’s top natural gas exporter.

But O’Hanlon acknowledged a real risk that actions such as Sunrise’s headquarters protest could make Biden appear weak and even more unpopular — something that would benefit Trump, who has pledged an all-out assault on Biden’s climate policies.

Sunrise is going through an internal process of figuring out how fiercely it should push, O’Hanlon said. “It’s hard to say right now exactly how we’ll walk that line."

Polls reflect the disillusionment that this highly active group of voters feels with Biden, driven by what they see as his inadequate progress and broken promises on climate change.

Biden’s approval rating sits at 39 percent for people between 18 and 29 years old, according to a Harvard Kennedy School Institute of Politics youth vote poll released in December. Just 39 percent of that group trusts his handling of climate change. (Only 19 percent said they trust Trump on the issue, while 41 percent picked “neither.”)

Past elections offer Democrats reason to fear this unhappiness could hurt Biden’s campaign. During the 2000 race, anger among many South Florida environmentalists over a proposed Air Force base redevelopment near the Everglades helped drive voters to Green Party candidate Ralph Nader, and even prompted Vice President Al Gore to cut back on planned campaign appearances in the state for fear of being met by embarrassing protests. Nader grabbed more than 97,000 votes in the deciding swing state state, which Gore lost to George W. Bush by 537 votes.

Then as now, the Democratic nominee’s critics on the progressive left bridle at being asked to settle for the status quo.

“If the line goes, ‘Look at all we’ve done. You should be satisfied,’ that never works with people,” said Jamie Henn, a longtime climate organizer who is director of advocacy group Fossil Free Media.

Biden’s environmental supporters disagree on how best to motivate voters who are concerned about climate change to turn out for the president. One faction of the environmental movement is confident that touting Biden’s accomplishments will help voters realize his climate record is unparalleled. But the more progressive flank is betting that public confrontation and unrelenting pressure will coax Biden into even more aggressive action that excites people still on the sidelines.

The groups all agree on one thing: Electing Trump would be devastating for meeting U.S. climate goals. But that is not animating voters who see such framing as picking the lesser of two evils — including some who are also motivated by Biden’s other policies, such as support for Israel.

“Some people may disagree with a couple of decisions in particular,” said Tiernan Sittenfeld, senior vice president of government affairs with the League of Conservation Voters, whose political action committee, LCV Action Fund, endorsed Biden’s reelection last year.

But, she said, when it comes to defeating Trump, “this choice could not be more clear: The president who has done more on climate than any other by far, or the most anti-environmental president ever.”

But Pica said voter education efforts championing Biden’s environmental accomplishments are unlikely to sway the disaffected activists. Those people are already highly engaged in the political process and want to see Biden take more drastic action to curtail fossil fuel infrastructure, he said.

“Just talking about clean energy or regulatory pieces I don’t think are enough to bring those folks along,” he said. “And many of those folks are in swing states that will matter.”

On the other hand, some of Biden’s actions have drawn a positive response from environmental activists. After he announced the pause on new gas export permits — so his agencies can reassess the exports’ climate and economic impacts — a number of groups canceled a sit-in they had planned to hold at the Energy Department.

Instead, roughly 300 people — including some who had flown in for the sit-in — and lawmakers like Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Pramila Jayapal (D-Wash.) and Sen. Ed Markey (D-Mass.) gathered at a Capitol Hill-area dive bar to celebrate the fifth anniversary of the introduction of the Green New Deal resolution. Congress never enacted that suite of climate and social proposals, though many of its environmental ideas eventually found their way into the Inflation Reduction Act, Biden’s signature climate law. (Trump has conflated the two, denouncing Biden’s policies as the "Green New Scam.")

“These investments lower energy costs, create jobs, increase energy independence and protect our natural resources for future generations to enjoy,” said Hitt, Biden’s spokesperson.

Biden exceeded the expectations of many in the climate community with the IRA, along with the 2021 infrastructure law that included more than $40 billion for adapting to rising seas, wildfires and drought, said David Kieve, president of the Environmental Defense Fund Action. And the administration is finishing rules that aim to clamp down on climate pollution from cars and power plants.

Kieve, who served in Biden’s Council on Environmental Quality after leading environmental outreach on the president’s 2020 campaign, said his organization plans to underscore that Biden’s “motive” is clear: He wants to do more on climate, which is the opposite of Trump.

Biden “has passed my test of being more committed on climate than any president in history has,” Kieve said. “And I think there’s some storytelling that needs to be done around that.”

Is Wall Street to Blame for the Collapse of Newspapers?

Politico -

The great American newspaper ain’t what it used to be. At practically every newspaper in the country except for a fortunate few, hard times have reduced page count, eliminated news beats and resulted in the layoffs of thousands of journalists.

The hardest hit, Margot Susca reports in her new book, Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy","link":{"target":"NEW","attributes":[],"url":"https://www.amazon.com/Hedged-Investment-Newspapers-Undermine-Communication/dp/0252087569","_id":"0000018d-bc62-dd01-adbd-bce6ed2e0000","_type":"33ac701a-72c1-316a-a3a5-13918cf384df"},"_id":"0000018d-bc62-dd01-adbd-bce6ed2e0001","_type":"02ec1f82-5e56-3b8c-af6e-6fc7c8772266"}">Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy, have been the chain newspapers — Gannett, GateHouse, Lee Enterprises, et al. — purchased and squeezed by private equity firms like Alden Global Capital. Nationwide, the percentage of newspapers owned by private equity rose from 5 percent in 2001 to 23 percent in 2019; they include such storied titles as the Chicago Tribune, the Orange County Register and USA Today, as well as scores of smaller papers. Some papers have been reduced to zombie versions of their former selves as the new owners have shaved them down to minimize costs, depriving readers of the comprehensive coverage they enjoyed in the golden age of newspapers.

Susca, an American University professor of journalism and a former newspaper journalist, writes that these new owners have turned their backs on what she thinks is the true purpose of newspapers — to serve democracy — in their pursuit of greed. For a taste of the book, see this excerpt in Neiman Reports.

As someone who’s covered the industry’s growing travails for some time, you can detect a bit of skepticism from my questions. Is Wall Street really to blame for the fall of newspapers? By the end of our conversation, she was asking me, “Did you just brush up on your Milton Friedman?”

This interview was conducted in person and via email and has been edited for length and clarity.

Without using the dust jacket, give us the dust jacket pitch for Hedged.

The book investigates the last 20 years of ownership and investment in the American chain newspaper industry. Through entities like hedge funds and private equity firms, this investor class continues to dismantle the one institution meant to give voice to average citizens in our democracy. I ultimately reveal an industry rocked less by external forces like lost ad revenue and more by ownership and management obsessed with profit and beholden to private fund interests that feel no responsibility toward journalism or the public it is meant to serve.

How and why did newspapers become distressed properties?

Newspaper executives pressured by private equity investors chose mergers and acquisitions as the strategy to face the digital future. It stacked debt as advertising losses also mounted. But before and after the recession, investment firms and the private equity divisions of Wall Street banks created conditions that left newspaper chains hamstrung and in debt for billions of dollars after a wave of acquisitions and consolidations. Different private firms then profited off newspaper bankruptcies or debt financing.

What encouraged the private equity firms to acquire distressed newspaper chains? Why didn’t the equity crowd buy and strip newspapers before the mid-2000s financial crisis?

In the 1990s, newspaper stocks were the golden goose of any portfolio. Newspapers were steadily profitable earning margins of up to 30 percent. Why fix what isn’t broken? But that also hurt innovation, as those who could read the tea leaves wanted investment but were thwarted by those who wanted to stay sailing those calm seas. A former editor from the St. Louis Post-Dispatch told me that in 2003, he went to editors at a time they were earning 25 percent profit margins and said they would need to cut into that profit to dedicate a team to the digital transition. They refused.

This period is what UMass scholar Gerald Epstein calls “financialization,” alongside the rise of the hedge fund and private equity class. Consider between 2006 and 2016, investment in the hedge fund industry globally skyrocketed from $1 trillion to $5 trillion.

If newspapers are as commercially viable as you seem to imply, why haven’t we seen moves by investors to preserve and improve them?

I hope you didn’t come away from the book thinking my core takeaway is that newspapers are in great financial shape. The point of the book is that if private investment funds kept their paws off these papers, our local newspaper ecosystem would be better off. In 2021, the U.S. newspaper industry generated $20.9 billion in revenue with profit margins just below 4 percent. That’s down from its wonder years, but it’s hardly a knockout.

We have seen moves to protect newspapers, but this investor class is not the group taking the initiative. Advocates, philanthropists, and researchers are working diligently to find solutions and new business models to preserve newspapers, understanding after this period of overharvesting how damaging this investor class has been to the chain newspaper marketplace. The Portland Press Herald has just been purchased by the Maine Trust for Local News, an offshoot of the nonprofit National Trust for Local News. Almost a year before, the Chicago Sun-Times newspaper switched to nonprofit status and became a subsidiary of Chicago Public Media. The Salt Lake Tribune was a trailblazer when it switched to nonprofit status in October 2019. We have the Philadelphia Inquirer and the Lenfest Institute. None of these initiatives were made possible because a group of Wall Street investors sat around a boardroom table before dinner at Cipriani and said, “Let’s create better local journalism.”

Non-private equity firms like Newhouse have made similar cuts in their newspapers. Does that indicate that private equity isn’t that much of an outlier?

Calling private equity an outlier oversimplifies the role both private equity and hedge funds have played in the chain newspaper market over the last two decades, and it plays into the same tired conventional wisdom that ad losses alone are responsible for all of the newspaper industry’s problems. I also think it lets private investment funds off the hook for the severe damage they have done to the local newspaper marketplace.

Private equity investors in the early to mid-2000s pressured newspaper managers at publicly traded chains, including Tribune, Journal Register and Knight Ridder, to make disastrous decisions. Rather than choosing innovation or investing in digital or even trying to compete head on with Craigslist, newspaper chains chose mergers and acquisitions as a strategy to stave off revenue losses. As the ad losses mounted and the Great Recession hit, servicing the debt from those mergers and acquisitions was like taking a sprinkler to a raging wildfire. Then, hedge funds that specialize in distressed debt or in financing targeted the newspaper chains that were forced to declare bankruptcy. Alden Global Capital stayed on as an owner. Alden owns two chains, MediaNews Group and Tribune, which spiraled after its 2008 bankruptcy after just a year of ownership from private equity billionaire Sam Zell. Cerberus and Apollo are in the market as lenders. Chatham Asset Management bought the McClatchy chain in 2020.

Explain the concept of “overharvesting” by the equity owners of chains that you describe in your book.

Overharvesting is my tinkering with harvesting, which is a term coined by the late data journalism pioneer Phil Meyer. Overharvesting suggests that a news organization or newspaper chain exists solely to maximize shareholder profits or line private investment funds’ pockets rather than to keep citizens informed, and in the process of reaping the profits, the investment firms leave behind a barren wasteland. I certainly recognize that profit has been part of American newspapers as long as we’ve been a country, but profit in the name of democracy looks much different than profit made in spite of it.

Is the private equity purchase of newspaper chains the cause of their ruination or the effect? 

Private investment funds are directly responsible for major problems at the newspaper chains I studied for the book. That includes GateHouse, Gannett, Journal Register, Knight Ridder, McClatchy, MediaNews Group and Tribune. These funds played different roles in these chains, but the roles they played when taken together over a 20-year period proved disastrous. Private investment firms have exerted various levels of influence over corporate newspaper firms as institutional investors or managers or as part of other complex financing and debt restructuring after blockbuster mergers and acquisitions.

Conventional wisdom notes basically a two-step process as it relates to newspapers. There was a loss of internet advertising, and then newspapers fell apart. What I did with my research was use 20 years of SEC records and bankruptcy documents to map more about what was happening in the boardrooms, calling the shots before, during and after that loss of advertising revenue crunch hit the newspaper industry. It was a relatively unknown part of the equation, and it is crucial to understand how these firms’ business practices played a role.

New York City private equity powerhouse Fortress Investment Group was the longtime owner and major shareholder of GateHouse, which was, for a time, America’s largest chain. In 2019, GateHouse merged with Gannett. Despite its failed innovations, Fortress in 2020 took from Gannett $1 million in dividends plus a one-time payment of $30.4 million. Gannett CEO Michael Reed, a former GateHouse executive, in 2022 claimed the business was so bad that hundreds of reporters who covered community news needed to be let go. The year before, Reed earned $7.7 million in compensation, which was a direct pat-on-the-back from Gannett’s board. Those fees and executives’ payouts are signs of a failed system that is tainted by the ultrawealthy that uses layoffs as the ball in its pinball machine.

Investors have started treating most newspapers like they were houses built on the Cape Hatteras beach, doomed to be worth zero as market forces (like a hurricane) drove their value down. Operating from such a playbook, isn’t it rational to extract as much value out of the property as possible, making only minimal investments until the disaster finally arrives?

Did you just brush up on your Milton Friedman? I think like a scholar and practitioner of journalism and democracy, not a peddler of stocks and bonds, because once we view constitutionally protected news organizations like any other widget in a capitalist economy, then our democracy is doomed. But look around, we’re already feeling the effects of that extraction as the investor class gets richer and misinformation spreads like a virus in the void left by a weakened local newspaper system.

Artificial intelligence is making critical health care decisions. The sheriff is MIA

Politico -

Doctors are already using unregulated artificial intelligence tools such as note-taking virtual assistants and predictive software that helps them diagnose and treat diseases.

Government has slow-walked regulation of the fast-moving technology because the funding and staffing challenges facing agencies like the Food and Drug Administration in writing and enforcing rules are so vast. It’s unlikely they will catch up any time soon. That means the AI rollout in health care is becoming a high-stakes experiment in whether the private sector can help transform medicine safely without government watching.

“The cart is so far ahead of the horse, it's like how do we rein it back in without careening over the ravine?” said John Ayers, associate professor at the University of California San Diego.

Unlike medical devices or drugs, AI software changes. Rather than issuing a one-time approval, FDA wants to monitor artificial intelligence products over time, something it’s never done proactively.

President Joe Biden in October promised a coordinated and fast response from his agencies to ensure AI safety and efficacy. But regulators like the FDA don’t have the resources they need to preside over technology that, by definition, is constantly changing.

“We'd need another doubling of size and last I looked the taxpayer is not very interested in doing that,” FDA Commissioner Robert Califf said at a conference in January and then reiterated the point at a recent meeting of FDA stakeholders.

Califf was frank about the FDA’s challenges. Evaluating AI, because it is constantly learning and may perform differently depending on the venue, is a monumental task that doesn’t fit his agency’s existing paradigm. When the FDA approves drugs and medical devices, it doesn’t need to keep tabs on how they evolve.

And the problem for the FDA goes beyond adjusting its regulatory approach or hiring more staff. A new report from the Government Accountability Office, the watchdog arm of Congress, said the agency wants more power — to request AI performance data and to set guardrails for algorithms in more specific ways than its traditional risk assessment framework for drugs and medical devices allows, the GAO said.

Considering Congress has barely begun to consider, much less reach consensus on AI regulation, that could take a while.

Congress is traditionally loath to expand FDA’s authorities. And so far, the FDA hasn’t asked.

It has offered guidance to medical device makers on safely incorporating artificial intelligence, sparking an industry backlash from tech firms that say the agency has overreached — even though the guidance is legally nonbinding.

At the same time, some AI experts in academia and industry say the FDA isn’t doing enough with the authorities it already has.

Scope of authority

Advancements in AI have created big gaps in what the FDA regulates. It does nothing to review tools like chatbots, for example, and it has no authority over systems that summarize doctors’ notes and perform other critical administrative tasks.

The FDA does regulate first-gen AI tools as it does medical devices, and 14 months ago Congress granted the agency the power to allow makers of devices, some of which include early AI, to implement preplanned updates without having to reapply for clearance.

But the scope of FDA’s powers over AI are unsettled.

A coalition of firms filed a petition with FDA accusing the agency of exceeding its authority when it issued a 2022 guidance that says makers of artificial intelligence that offer time-sensitive recommendations and diagnoses must seek FDA clearance. Even though the guidance is legally nonbinding, companies typically feel they must comply.

The Healthcare Information and Management Systems Society, a trade group that represents health technology companies, also expressed confusion over the scope of FDA authority and how power over AI regulation is split among it and other agencies within the Department of Health and Human Services, like the Office of the National Coordinator for Health Information Technology. That office set rules requiring more transparency around AI systems in December.

“From the industry perspective, without having some sort of clarity from HHS, it gets into this area where folks don't know directly who to go to,” said Colin Rom, a former senior adviser to then-FDA Commissioner Stephen Hahn who now leads health policy at venture capital firm Andreessen Horowitz.

Meanwhile, the FDA told GAO that to proactively track whether algorithms are effective over time, it needs new authority from Congress to collect performance data.

The agency also said it wants new powers to create specific safeguards for individual algorithms, rather than using existing medical device classifications to determine controls.

The FDA plans to communicate its needs to Congress.

Oversight outsourced

But that still leaves it beholden to a gridlocked Capitol Hill.

As a result, Califf and some in the industry have proposed another idea: the creation of public-private assurance labs, probably at major universities or academic health centers, which could validate and monitor artificial intelligence in health care.

“We’ve got to have a community of entities that do the assessments in a way that gives the certification of the algorithms actually doing good and not harm,” Califf said at the consumer electronics show last month.

The idea also has some support in Congress. Sen. John Hickenlooper (D-Colo.) has called for qualified third parties to audit advanced artificial intelligence. He’s thinking specifically about generative AI, the kind like ChatGPT that mimics human intelligence, though it is the same oversight framework Califf has suggested.

That approach could have flaws, as some AI experts have noted, since AI tested on a major university campus might not work as well at a small rural hospital.

“You know as a practicing physician that different environments are different,” Mark Sendak, population health and data science lead at Duke University’s Institute for Health Innovation, told senators at a Finance Committee hearing on artificial intelligence in health care this month. “Every health care organization needs to be able to locally govern AI.”

In January, Micky Tripathi, the national coordinator for health information technology, and Troy Tazbaz, FDA’s director of digital health, wrote in the Journal of the American Medical Association that assurance labs would have to take that problem into account.

The article, which was co-authored by researchers at Stanford Medicine, Johns Hopkins University and the Mayo Clinic, calls for a small number of pilot labs to lead the way in designing validation systems.

But seeing that collaboration among regulators, major universities and health care providers hasn’t reassured smaller players, who worry about conflicts of interest if the pilot labs are organizations that are also making their own AI systems or collaborating with tech firms.

Ayers thinks the FDA should be handling AI validation within its own walls and that makers of AI systems should at a minimum have to show that they improve outcomes for patients, regardless of who does the oversight.

He noted the failure of an AI system from electronic health records firm Epic to detect sepsis, a sometimes fatal reaction to infection, that had slipped by regulators. The company has since overhauled its algorithm and a spokesperson for the FDA said that it doesn’t disclose communications with specific firms.

But the incident has left many in health care and technology feeling like the agency isn’t using its current authorities effectively.

“They should be out there policing this stuff,” said Ayers.

Santos sues Jimmy Kimmel for tricking him into making videos to ridicule him

Politico -

NEW YORK — Former U.S. Rep. George Santos alleged in a lawsuit filed Saturday that late-night host Jimmy Kimmel deceived him into making videos on the Cameo app that were used to ridicule the disgraced New York Republican on the show.

The lawsuit filed in U.S. district court for the southern district of New York names Kimmel, ABC and Walt Disney Co. as defendants. A Disney representative listed as a media contact for the Jimmy Kimmel Live! show didn’t immediately respond to an email from The Associated Press seeking comment.

Santos, who was expelled from the House of Representatives last year after being charged with multiple counts of fraud and stealing from donors, is suing over alleged copyright infringement, fraudulent inducement, breach of contract and unjust enrichment.

Kimmel misrepresented himself to induce Santos to create personalized videos “capitalizing on and ridiculing” his “gregarious personality,” the lawsuit alleges.

Through Cameo, Santos received requests from individuals and businesses seeking personalized video messages. Unbeknownst to Santos, Kimmel submitted at least 14 requests that used phony names and narratives, according to the complaint.

Starting in December the videos were played on a segment, “ Will Santos Say It? ” the suit says.

In one of the clips, Santos offers congratulations to the purported winner of a beef-eating contest, calling the feat of consuming 6 pounds of loose ground beef in under 30 minutes “amazing and impressive.”

“Frankly, Kimmel’s fake requests were funny, but what he did was clear violation of copyright law,” Robert Fantone, an attorney for Santos, said in an email.

Santos is seeking statutory damages totaling $750,000 for the five videos he created that were played on the show and various social media platforms. He also asks for other damages to be determined at trial.

The ex-lawmaker faces a slew of criminal charges, including allegations that he defrauded campaign donors, lied to Congress about his wealth, received unemployment benefits while employed and used campaign contributions to pay for personal expenses like designer clothing. He also is alleged to have made unauthorized charges on credit cards belonging to some of his donors.

Santos pleaded not guilty to a revised indictment in October.

On Tuesday, Democrat Tom Suozzi won a special election for Santos’ former seat.


Subscribe to Kitsap County Democratic Women aggregator