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Justice Department price-fixing probe rattles auto industry worldwide

An investigation into price-fixing and bid-rigging in the auto parts industry has mushroomed into the Justice Department's largest criminal antitrust probe ever, and it's not over yet.
The investigation, made public four years ago with FBI raids in the Detroit area, has led to criminal charges against dozens of people and companies, stretched across continents and reverberated through an industry responsible for supplying critical car components.
The collusion has also saddled U.S. drivers with millions of dollars in extra costs.
"It's a very, very safe assumption that U.S. consumers paid more, and sometimes significantly more, for their automobiles as a result of this conspiracy," Brent Snyder, a deputy assistant attorney general in the antitrust division, said in an interview.
So far, 34 individuals have been charged and 27 companies have pleaded guilty or agreed to do so, the Justice Department says.  Collectively, they have agreed to pay more than $2.3 billion in fines. New cases have arisen with regularity, with Attorney General Eric Holder promising last September that investigators "would check under every hood and kick every tire."
The most recent development came Thursday, when an executive from a Japanese company was charged with conspiring to fix the prices of heater control panels sold to Toyota and with persuading workers to destroy evidence.
Officials say the investigation stands out not just for its scope but also for the cooperation the authorities have received from Japan, Australia and other countries. Despite the challenges of prosecuting foreign nationals, the Justice Department has won guilty pleas from a series of Japanese executives who opted to get their punishment over with rather than remain under indictment in their home countries and subject to career-crippling travel restrictions.
Though the techniques and strategies sometimes differed, the executives generally carried out the collusion by trading coded emails, meeting at remote locations and destroying documents to avoid paper trails.
With an eye toward eliminating competition and maximizing profits, they exploited an industry that experts say is in some ways vulnerable to collusion: There are a finite number of purchasers and suppliers, there's steady pressure among companies to cut prices -- and car parts, unlike certain products that have a great deal of variability, are generally standardized and homogeneous.
"The firms will just make more money if they're able to reach and stick to an agreement to collectively charge higher prices so that customers can't get them to bid against each other," said Spencer Weber Waller, director of the Institute for Antitrust Consumer Studies at the Loyola University Chicago law school. "The problem is, of course, it's a felony in the United States."
The Justice Department first publicly surfaced aspects of the investigation when FBI agents in Detroit raided the offices of Denso Corp, Yazaki North America and Tokai Rika. All three companies have pleaded guilty to their roles in price-fixing and bid-rigging schemes.
Since the raids, the probe has broadened to encompass about $5 billion worth of auto parts, including seat belts, ignition coils, steering wheels, air bags, windshield wipers and rubber parts that dampen vibration.
Similar cartels have formed in industries ranging from oil and gas to cement and vitamins, though there's debate among economists about how long they can last, given the constant incentive for one member to cheat the others and the tendency to collapse under their own weight as they keep growing, said Daniel Crane, a University of Michigan law professor.
But the collusion in these cases, which in some instances lasted more than a decade, was "deftly done," said Joe Wiesenfelder, executive editor of Cars.com, who has followed the auto parts investigation.
"If they get too greedy and they make their prices too high, then someone smells a rat," he said. "When they set their prices and fixed their prices, they had to do it in a way that wasn't obvious and that took into account the entire market, including suppliers that weren't involved."
Wiesenfelder said that while the collusion affected car consumers, it's hard to tell how much the investigation has been noticed by the average driver.
"It's kind of abstract to consumers," he said. "It's not that prices were fixed on cars. That would really hit home."
But there are indications the industry is chastened.
For instance, Bridgestone Corp., a tire and rubber company that pleaded guilty this year, announced that it would strengthen its compliance, discipline employees and that certain board members and executives would forfeit a portion of their compensation.
Meanwhile, the Justice Department says it's looking into additional misconduct in an investigation that bears all the hallmarks of classic antitrust law-breaking.
"This one," Snyder said, "has it all."

Unions, employers square off over ObamaCare costs in collective bargaining

Disputes between unions and employers over paying for new costs associated with the Affordable Care Act are roiling labor talks nationwide.
Unions and employers are tussling over who will pick up the tab for new mandates, such as coverage for dependent children to age 26, as well as future costs, such as a tax on premium health plans starting in 2018. The question is poised to become a significant point of tension as tens of thousands of labor contracts covering millions of workers expire in the next several years, with ACA-related cost increases ranging from 5 percent to 12.5 percent in current talks.
In Philadelphia, disagreement over how much workers should contribute to such health-plan cost increases has stalled talks between the region's transit system and its main union representing 5,000 workers as they try to renegotiate a contract that expired in March.
Roughly 2,000 housekeepers, waiters and others at nine of 10 downtown Las Vegas casinos voted this month to go on strike June 1 if they don't reach agreements on a series of issues, the thorniest of which involve new ACA-related cost increases, according to the Unite Here union.
Flight attendants at Alaska Airlines voted down a tentative contract agreement with management in February, in part because it didn't provide enough protection against a possible surge in ACA-related costs, union members said. They are still without a new contract.
Labor experts on both sides say the law doesn't take into account that health benefits have been negotiated by employers and unions over decades, and that rewriting plans to meet new requirements can affect wages and other labor terms.
"It's been a challenge for even some of the stronger unions to maintain the quality health plans that they have offered over the years," said Daniel Murphy, an attorney in New York who represents employers in labor talks.
Among the earliest supporters of the health-care law, unions have unsuccessfully tried to win concessions from the Obama administration on some issues now involved in the labor talks.
An Obama administration official said: "We have worked hard to smooth implementation" of the health law.
One pressure point is the higher costs of new mandates, especially the requirement that health plans expand coverage for dependents. For Unite Here, adding that coverage for 14,000 dependents raised costs in the health-care fund run by the union's Las Vegas local by $26 million since 2011, said union spokeswoman Bethany Khan.
The union plan covers 55,000 workers and 120,000 people in total. Casinos on the Strip have agreed to pay more to meet the higher health-care costs, according to contract summaries. Unite Here President D. Taylor called the rising costs tied to the health law the biggest hurdle to reaching settlements in Las Vegas.

Nation honors veterans and the fallen on Memorial Day

Across America Monday, citizens will mark Memorial Day with ceremonies and parades honoring those who gave their lives in war, as well as with less solemn events like barbecues with family and friends. 
Despite the day's solemn ethos, Petty Officer 1st Class Brian McNeal told the Associated Press that the fun events should be enjoyed.
 "I'm in the service so that they can enjoy that," said McNeal, 39, who is stationed in Suffolk, Virginia, and was in New York for Fleet Week. "They made the sacrifice so everyday citizens don't have to worry about the evils of the world."
Monday is the climax of a weekend of events honoring America's military. On Sunday, Marine Corps chaplain Rear Admiral Margaret Kibben lauded the sacrifice of veterans around the world in a service at the Marble Collegiate Church in Manhattan.
"What they have done has allowed us to be here," Kibben told the the roughly 200 worshippers Sunday at the Marble Collegiate Church in Manhattan, including active duty servicemen and women. Memorial Day, she said, was a time to remind ourselves of the meaning of sacrifice and to put personal struggles and difficulties in perspective.
Also Sunday, President Obama arrived at Bagram Air Field in Afghanistan to speak with troops and visit soldiers being treated at a base hospital. At least 2,181 members of the U.S. military have died during the nearly 13-year Afghan war and thousands more have been wounded.
Obama has directed all government agencies in the United States to fly their flags at half-staff on Monday in observance of Memorial Day.
On Saturday, Democratic congresswoman Tammy Duckworth served as grand marshal of Chicago's Memorial Day Parade and struggled to hold back tears during a wreath-laying ceremony to honor fallen soldiers. She lost her legs and partial use of an arm when a rocket-propelled grenade hit the Black Hawk helicopter she was piloting in Iraq in 2004.
More than 300 Junior ROTC students from Chicago Military Academy at Bronzeville marched in the city's parade. Afterward, still dressed in their uniforms, they chatted, bantered and ordered ice cream from a vendor's truck while waiting for a bus that would take them back home.
Their instructor, 1st Sgt. Stephen Roberts, an Army veteran, said the students practice all year to march in the parade.
"They enjoy it a lot," Roberts said. "We tell them about it at the beginning of the year. Our rifle, our drum teams, our flags, they practice every day. They come in on their own accord. They do their own practices. It means a lot to them. They're very proud to do this."
In Massachusetts, Boston Marathon survivor Jeff Bauman and his rescuer, Carlos Arredondo, helped plant tens of thousands of flags Saturday at a cemetery to honor soldiers.
The Associated Press contributed to this report.

Leave no man behind: Why is Team Obama unable to bring home Marine held in Mexico?

This weekend we celebrate Memorial Day in honor of our American servicemen and women who have sacrificed their lives defending us both at home and abroad. Many of our troops enlist in the military upon adulthood and have served in wars before their classmates have even graduated from college. These men and women are true American heroes and we must protect them just as well as they protect us.
Unfortunately, despite President Obama’s Memorial Day proclamation that we shall “never forget” the sacrifices of our soldiers, he and Secretary of State John Kerry have forgotten about a living American hero in dire need rescue: U.S. Marine Sgt. Andrew Tahmooressi.
Tahmooressi, only 25-years-old, is currently jailed in Tijuana, Mexico, after he accidentally drove across the border with three legally owned guns.
During the four years he served in the Marines, he did two tours in Afghanistan. While on the battlefield, he saved eight Marines from the Taliban, and in a separate incident he saved a Marine from bleeding to death after he stepped on an IED and lost his legs. Tahmooressi also suffered a concussion when his vehicle hit an IED.  
On March 20, the U.S. Department of Veterans Affairs diagnosed Tahmooressi with Post-Traumatic Stress Disorder (PTSD).
Though he is from Florida, Tahmooressi chose a facility in San Diego for treatment, and he moved there shortly after his diagnosis. He had friends in the area and began dating a girl he met at church.
On the night of March 31, he drove alone to meet some friends near the Mexican border.  Because he was in transition, his truck was filled with his possessions, including a ladder strapped to his roof.


As midnight approached, Tahmooressi says he got lost due to border checkpoint closures, redirected traffic and lack of signage. Because he was unfamiliar with the area, he wound up at the El Chaparral inspection area at the Tijuana border.  
He was granted entry into Mexico but was stopped by Mexican border agents when he tried to turn around and re-enter the U.S. He was cooperative with the agents and immediately disclosed that he had three legally owned firearms in his truck. Fearing the Mexican authorities would seize his guns, he called 911.
“My problem is I crossed the border by accident and I have three guns in my truck and they’re trying to take my guns from me,” he told the dispatcher.
“So you’re in Mexico…There’s nothing I can help you with, sir…You’re not on American soil anymore,” she responds.
He answered, “I don’t know if I’m really on …I’m not sure if I’ve crossed yet.” 
Tahmooressi went on to say that there was not a “turn around point," and then the call ended.  
No one disputes that Tahmooressi violated Mexican law by entering the country with firearms, and the U.S. respects Mexico’s right to autonomously prosecute suspected criminals.
But the U.S. and Mexico also share mutual goals and work together as partners to eradicate drug cartels. In fact, the U.S. recently assisted Mexico in capturing the notorious drug lord known as "El Chapo" Guzman, the kingpin of the Sinaloa drug cartel. We provided intelligence, boots on the ground and even a surveillance drone.
Unfortunately, the Mexican government has chosen to unreasonably prosecute an American. The only thing Tahmooressi is guilty of is making an honest mistake by unknowingly entering Mexico while in possession of his legally owned firearms.
The Mexican government has chosen to criminally charge a member of our military who has no criminal record, who was not in possession of drugs or other illegal contraband, who was not engaged in suspicious activity that suggested his alignment with a cartel and who suffers from a serious yet treatable mental disorder. Tahmooressi was diagnosed with PTSD after fighting in an international war on terror aimed not only at protecting Americans, but also Mexicans.
According to California Rep. Duncan Hunter’s deputy chief of staff, Joe Kasper, Mexican prosecutors initially discussed charging Tahmooressi with gun trafficking, despite a complete lack of evidence.
In defense of Mexico's prosecution of Tahmooressi for three charges of firearms possession, Alejandro Gonzalez Guilbot, head of Mexican customs in Tijuana, stated that Tahmooressi never claimed he was lost. This is nothing less than a lie. The 911 recording, obtained by Hunter, clearly proves that Tahmooressi was lost.  
It should not go without mentioning that Guilbot, a lifelong public servant to Mexico, is under investigation by the Ministry of Public Service because of his lavish possessions, including a 2012 Rolls Royce Phantom valued at over $300,000, a BMW, a Lexus, many other luxury cars, a million-dollar home in a gated community in Houston and another property in Texas.
The Mexican government’s tactics also included telling Tahmooressi’s lawyer that he could not consent to an interview because there was no paper or pen in the entire jail. After an unreasonable delay, authorities eventually found writing materials.
In the United States, most states require a “preliminary hearing” 30 days after arrest if the defendant is in custody. In Mexico, however, the delay is considerably longer. Tahmooressi's evidentiary-type hearing is not scheduled until May 28, almost two months after his arrest.
Not only should Tahmooressi be released in the interest of reasonableness and justice, but also to show compassion for his mental health and safety.
Mexico has failed to treat Tahmooressi for his PTSD. In March, while in a Tijuana jail cell, he slit his throat and tried to escape because of he feared for his safety.
After he was treated, officials chained all four of his limbs to his hospital bed. Now back in jail, he remains chained to his bed by one leg.
Equally egregious is our own government’s lack of desire and priority to negotiate Tahmooressi’s release.
Hunter has worked tirelessly, and essentially single-handedly, to get the help of our top officials. He has written numerous letters to Secretary of State John Kerry and has yet to receive a response. Kerry was in Mexico earlier this week and "raised" the issue, but to what extent is unknown. Despite Tahmooressi's condition, the U.S. Consulate has not visited him since May 9, and it has told Hunter that it has not scheduled any future visits with him.
Hunter has asked Secretary of Defense Chuck Hagel to suspend all funding to Mexico for equipment transfers and training. In 2013, we trained over 3,000 Mexican troops. Between 2008-2011, the Department of Defense gave $428.7 million worth of equipment to Mexican security forces, including planes, Blackhawk helicopters, and scanners. Hunter has yet to receive a response from Hagel.
It is not in Mexico’s best interest to prosecute a man who indirectly fought to protect the lives of Mexicans while representing the United States in Afghanistan.
Tahmooressi was not the first person to mistakenly enter Mexico, and he will not be the last.
President Obama and Secretary of State Kerry, you must not allow the wrongful prosecution of an American hero. You must not allow Mexico to hold our solider hostage for an honest mistake. You must not allow a young man, who suffers from PTSD as a result of protecting you, your families and fellow Americans, to be chained to a bed and continue to go untreated. 
Now is the time for you to demand Mexico release Andrew Tahmooressi or face serious consequences. 
Time is of the essence.
http://www.foxnews.com/opinion/2014/05/23/why-is-team-obama-unable-to-bring-home-marine-held-in-mexico/#

Flags in at Arlington National Cemetery

Civil War Veterans, Fourth of July or Decoration Day

Ortonville, Minnesota

1880

 

Majority of judges behind wave of gay marriage rulings were Democrat-appointed

State-approved bans on same-sex marriage have been falling at a rapid clip since the Supreme Court struck down part of the Defense of Marriage Act last year. 
The changes -- gay couples can now wed in 19 states and the District of Columbia -- reflect shifting social and political attitudes toward same-sex marriage. But they also reflect, in several cases, the opinions of Democrat-appointed judges who single-handedly struck down state-approved bans.   
In a testament to the influence of judicial appointments, most of the judges responsible for the decisions over the past year were appointed by either President Obama or, two decades ago, Bill Clinton. 
Among the justices to recently effect a major state change was U.S. District Judge Michael McShane in Oregon. 
He threw out the state's voter-approved gay marriage ban on Monday. 
McShane was nominated by Obama in January 2013 and was confirmed several months later. He was in a position to effectively enact gay marriage from the bench, as state officials earlier refused to defend Oregon's ban and said they wouldn't appeal. 
The National Organization for Marriage sought to intervene, but both McShane and a federal appeals court rejected its attempts to argue in favor of the ban. 
The next day, U.S. District Judge John E. Jones III overturned a 1996 Pennsylvania law barring recognition of gay marriage, calling it unconstitutional. 
The National Organization for Marriage protested again, calling the ruling an "end-run around the democratic process" that "places the capricious will of one man above the desires of millions of citizens." 
But Pennsylvania Gov. Tom Corbett, a Republican, on Wednesday decided to end his court fight because "the case is extremely unlikely to succeed on appeal." The governor's decision means that same-sex marriage will remain legal in Pennsylvania, without the threat that a higher court will reinstate the ban. 
In Pennsylvania's case, the judge who threw out the ban was appointed by Republican President George W. Bush. 
Only one other judge -- of the eight who have ruled against gay marriage bans since the DOMA decision -- is Republican-appointed. The other is Bernard Friedman, a U.S. District Court judge in Michigan who struck down that state's gay marriage ban in March, though the decision is being appealed. Friedman was appointed by Ronald Reagan. 
Three of the judges -- in Oregon, Virginia and Utah -- were appointed by Obama in the last few years. Two were appointed by Clinton. One, in Idaho, was appointed by regional judges. 
Several of these cases are still being litigated. In 29 states, judges are being asked whether gays should have the right to marry. 
Advocates see a clear trend where gay marriage will increasingly be legalized. 
After the Pennsylvania decision, National Gay and Lesbian Task Force Director Rea Carey said: "The momentum for same-sex marriage across the entire nation is unstoppable." 
But opposition in some places remains strong. A spokesman for Montana Attorney General Tim Fox said he will vigorously defend the state's constitutional ban against the lawsuit brought by four gay couples. 
In Utah, Gov. Gary Herbert said at a news conference Thursday he also is committed to defending his state's ban, and he blasted decisions against doing so by leaders in other states. 
"For elected officials, governors or attorney generals, to pick and choose what laws (they) will enforce I think is a tragedy, and is the next step to anarchy," Herbert said. "We have an obligation as a state to defend those laws." 
The Associated Press contributed to this report.

VA

'Why didn't they prepare?' Hundreds of VA vacancies, as returning vets strain system

WASHINGTON –  Despite rampant allegations of veterans stuck in limbo waiting for care, hundreds of jobs remain unfilled at the Department of Veterans Affairs -- including at some of the very locations where doctors supposedly were too short-staffed to see patients. 
A search by FoxNews.com on Friday of the USA Jobs federal employment website showed more than 1,080 current vacancies in health-related fields at the VA. 
A search of the words “VA” and “physician” yielded 167 jobs openings with top-range salaries of roughly $295,000 a year. There are 18 openings alone in the Phoenix VA Health Care System – the same one facing allegations that up to 40 people died while waiting for treatment.
One full-time position is for the chief of medicine. The vacancy, posted April 15 and open until June 13, comes with an annual salary up to $235,000.  
The VA pitches the job as a don't-miss opportunity. The ad boasts that “as a VA physician, your opportunities are endless” -- the agency offers "generous paid time off and a variety of predictable and flexible scheduling opportunities.”
So why the vacancies, at such a critical time? 
In recent weeks, whistleblowers have come forward to criticize how the agency is handling its massive caseload. The allegations generally accuse local VA facilities of pushing off patients and then manipulating their own records to make it seem like they’re receiving care in a timely fashion.
Officials, in explaining the overburdened system, have pointed to the influx of veterans from the wars in Afghanistan and Iraq, as well as the long-term care of aging vets from Vietnam.
“We go into Afghanistan, leave Afghanistan for Iraq with unfinished business in Afghanistan,” House Speaker Nancy Pelosi said Thursday, suggesting these problems were years in the making. “Ten years later, we have all of these additional veterans -- in the past five years, two million more veterans needing benefits from the VA. That's a huge, huge increase.” 
But the hundreds of vacancies show that the VA, with the influx of veterans a well-known factor, is not even operating at full capacity now. 
Pete Hegseth, CEO of Concerned Veterans for America, questioned why the department didn't better prepare for the returning veterans by staffing up. 
“These are self-inflicted wounds. This isn’t a money issue. This is a prioritization issue,” he said. "They knew there were going to be more veterans who needed care. Why didn't they prepare?" 
Hegseth, a Fox News contributor, said he’s not surprised that lawmakers are trying to shift the blame. “It’s cover your ass time,” he said. 
The inspector general at the VA says 26 facilities are now being investigated nationwide, including the one in Phoenix.
Some have accused administrators of cooking the books and creating an environment that encouraged VA staff to manipulate wait times of veterans who need medical or mental health care. Others, though, have called the scandal political theater and say for the most part, the VA medical system works.
In a letter to veterans Friday, VA Secretary Eric Shinseki vowed to do better and promised to investigate every allegation brought to the department’s attention.
“As we approach our observance of Memorial Day and its special significance to our nation, VA is re-doubling its efforts, with integrity and compassion, to earn your trust,” he wrote. 
On Wednesday, President Obama broke his silence on the issue, vowing to “fix whatever is wrong” but stopping short of calling for Shinseki’s resignation.
As the scandal plays out in D.C., the VA continues its march to fill the hundreds of vacancies for health care officials at its clinics and hospitals across the country.
Among those is also a position in Kansas City, Mo., for a full-time radiologist, with a pay range of $98,967 to $295,000.
There are also openings at the VA teaching hospital in Danville, Ill., for urologists, pulmonologists and dental laboratory technicians. The facility also has an opening for an outpatient pharmacist, tasked with dispensing “appropriate medications and counseling patients on proper medication administration and storage.” The salary range is between $101,580 and $123,776.
Calls to the VA for comment were not returned.