Corruption probes hitting Dems across the country

A wave of corruption arrests and investigations is roiling Democratic politicians, posing a potential image problem in an election year. 
The latest were a pair of arrests earlier this week, snagging Charlotte Mayor Patrick Cannon, who later resigned, and California state Sen. Leland Yee. The latter involved a tangled web of allegations including claims that the gun control-pushing lawmaker tried to connect an undercover agent with an international arms dealer. 
So far, these cases are confined to the state and local levels, so it remains to be seen whether Democrats running in the congressional midterms will be tarnished. 
In fact, the only major arrest of a U.S. congressman since the beginning of 2013 was that of a Republican, Florida Rep. Trey Radel, who was convicted for cocaine possession and resigned early this year. Each party typically is careful to throw stones when the other side finds itself on the wrong side of the law, because corruption and other misbehavior is a bipartisan problem. 
For every Anthony Weiner, there's a Mark Foley. 
But since Radel's October arrest, the bulk of the corruption cases have involved Democrats. 
In California alone, Yee's case marked the third arrest or conviction in as many months of a state Democratic official. 
State Republicans, who have been struggling to regain their political footing, have sought to capitalize on the wave of criminal charges as a way to undo Democrats' dominance in the Legislature. Republicans have repeatedly tried to expel Sen. Rod Wright after he was convicted of perjury and voter fraud in January for lying about his legal residence in Los Angeles County. Democratic leaders have blocked those efforts. The state Senate, though, voted Friday to suspend all three of the lawmakers in trouble. 
The other, Sen. Ron Calderon, was indicted on federal corruption charges in February. Prosecutors say Calderon accepted about $100,000 for himself and family members in exchange for promoting legislation to expand Hollywood tax credits and protect the interest of a hospital that benefited from a provision of the workers' compensation law. 
Then came Yee, whose alleged activities were more befitting Hollywood than his San Francisco district. 
The criminal complaint contained dramatic details about Yee's alleged efforts to connect an undercover agent with a firearms dealer. 
"Do I think we can make some money? I think we can make some money," the senator allegedly said in one of the meetings. 
The cases, while involving local politicians, have put powerful Democrats in an awkward position. 
U.S. Sens. Barbara Boxer and Dianne Feinstein of California joined a growing list of officials on Thursday in distancing themselves by demanding Yee's resignation. The Democratic leader of the state Senate, President Pro Tem Darrell Steinberg, warned Yee to resign or face suspension by his colleagues, saying "he cannot come back." 
Cannon, meanwhile, was ensnared in an FBI sting and faces federal corruption charges alleging he accepted more than $48,000 in cash, airline tickets, a hotel room and a luxury apartment from undercover agents posing as real estate developers and investors. Cannon, while not a household Democratic name, led the city that hosted the Democratic National Convention in 2012. 
On top of that case, Rhode Island House Speaker Gordon Fox said Saturday he was resigning from leadership and would not run for re-election, a day after federal and state authorities raided his Statehouse office and home as part of a criminal investigation that they would not detail. 
The Friday raids were carried out by the U.S. attorney's office, FBI, IRS and state police. Boxes of evidence were carried off after agents spent hours at both his home and office. Officials will not say whom or what they are investigating. 
The 52-year-old Providence Democrat, who became the nation's first openly gay House speaker in 2010, said he planned to serve out the remainder of his term through the end of the year, but that "my personal focus going forward will be on my family and dealing with the investigation." 
Meanwhile, in the shadow of the U.S. Capitol, the mayor of the District of Columbia, a Democrat, is facing his own problems. A U.S. attorney claimed earlier this month that Mayor Vincent Gray knew about an illegal, $668,000 "shadow campaign" that helped propel him into office four years ago. Despite denials from the mayor, who has not been accused of a crime, the revelation further damaged him ahead of next week's primary. 
"I think the question politically is whether it becomes emblematic of the national party," said Mary Katharine Ham, a Fox News contributor. "And that, to some extent, depends on media coverage. In, for instance, 2006, there was the drumbeat against Republicans was this culture of corruption; and that, to a large extent, was effective because it was so consistently covered in the media."

Obamacare

Holder says feds will recognize Michigan gay marriages despite state decision

Attorney General Eric Holder said Friday that the federal government will recognize about 300 same-sex marriages performed in Michigan before a federal appeals court halted them, despite a decision by Michigan's governor not to recognize those unions. 
The decision means federal benefits will be extended to those couples -- including the ability to file taxes jointly, get Social Security benefits for spouses and request legal immigration status for partners. 
"These families will be eligible for all relevant federal benefits on the same terms as other same-sex marriages," Holder said in a statement. 
The announcement Friday morning is Holder's latest entry into the state-level same-sex marriage debate. Holder did the same thing in Utah, where more than 1,000 same-sex couples got married, before the Supreme Court put those unions on hold in January after a federal judge overturned the conservative state's same-sex marriage ban in December. 
Earlier this month, U.S. District Judge Bernard Friedman struck down Michigan's gay marriage ban. 
Four counties then took the extraordinary step of granting licenses on the Saturday before the 6th U.S. Circuit Court of Appeals ordered a temporary halt. The stay was extended indefinitely on Tuesday. 
Michigan Gov. Rick Snyder afterward called the marriages performed last weekend legal but said Michigan won't recognize them. 
Snyder, who is a Republican, acknowledged that same-sex couples "had a legal marriage." But because of the court's stay, he added, the gay marriage ban has been restored. The governor's move closed the door, at least for now, to certain state benefits reserved solely for married couples. The American Civil Liberties Union has said more than 1,000 Michigan laws are tied to marriage. 
Holder cited Snyder's statement in his own on Friday. 
"The Governor of Michigan has made clear that the marriages that took place on Saturday were lawful and valid when entered into, although Michigan will not extend state rights and benefits tied to these marriages pending further legal proceedings," he said. "For purposes of federal law, as I announced in January with respect to similarly situated same-sex couples in Utah, these Michigan couples will not be asked to wait for further resolution in the courts before they may seek federal benefits to which they are entitled." 
Seventeen states and Washington, D.C., issue licenses for same-sex marriages. Since December, bans on gay marriage also have been overturned by courts in Texas, Oklahoma, Kentucky and Virginia, but appeals have put those cases on hold. 
The Associated Press contributed to this report.

Critical part of ObamaCare website still not fixed

Even as the Obama administration struggles to deal with the approaching end of open enrollment for health care exchanges, one critical part of the website has yet to be fixed.
Earlier, administration officials had predicted ObamaCare could be seriously jeopardized if the key back end of healthcare.gov were not fixed ahead of the March 31 enrollment deadline.
The back end of the website is the two-way connection between the government and insurance companies aimed at telling each other who signed up for what.
"Insurance executives just see this as a major nightmare," says Robert Laszewski of Health Policy and Strategy Associates. "I mean, when are we finally going to be able to reconcile all the data, to know who is really covered, who is really paid, and what the insurance companies should be paid for?"
Rep. Lloyd Doggett, D-Texas, raised concerns over it at a recent hearing with Kathleen Sebelius, the Secretary of Health and Human Services.
“The number that's really important," Doggett said, "is not how many people have enrolled, but how many people have paid their premiums that are actually getting in exchange-base coverage. A number," he said pointedly, "we've never been given."
Former Congressional Budget Office Director Doug Holtz-Eakin says,"Nobody knows.There remains no clear information about who has paid the premium and as a result, who the insurance companies need to get reimbursed for."
Though some analysts believe the administration knows a lot more than it is saying, officials deny having any reliable information.
Industry sources and surveys show that while officials boast 5 million sign ups, about 1 million of them are not paying premiums, and therefore not officially enrolled.
The administration hired the firm Accenture in a no-bid contract to fix the site after a previous contractor failed, arguing in official documents last December that there was no time for competing bids,since mid-March was a key turning point in the law, and any delay would, as the document put it, "... result in financial harm to the Government..."
It even went so far as to say that "... the entire health care reform program is jeopardized” by any failure of the back end, and it laid out a list of things that could go wrong, including "Inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers..."
"This had to get fixed right now," says Laszewski. "Well it's past 'right now', it's - you know we're into March and we don't have the back end of the system done, we don't have the ability for insurance companies to be paid, we don't have the ability for reconciliations to be done."
Those reconciliations include who has really signed up, who has paid, and if the subsidies are accurate -- something officials say they don't currently know.
Sebelius tolda congressional committee recently,"people are buying a product in the private market. As soon as we have accurate information, we will give it to you but we do not currently have information about how many people have paid."
Officials now tell Fox News, however, that the dramatic language predicting possible disaster is "no longer an accurate assessment"because they're using temporary workarounds with insurance companies.
But the companies themselves say a reckoning is coming ... that could cost them tens of millions of dollars when the books are finally reconciled. And that could take months, well after insurance companies have to set new rates for 2015.

'Not educated': Reid blames Internet ignorance for ObamaCare extension

   SENATE MAJORITY LEADER Harry Reid, attempting to explain the Obama administration's latest decision to extend a key ObamaCare deadline, says people just 'are not educated on how to use the Internet.'

Bar

Obama administration extends health care enrollment deadline

The Obama administration will grant extra time to Americans who say they are unable to enroll in health care plans through the federal insurance marketplace by the deadline set for the end of March, Fox News confirmed Tuesday.
All consumers who have begun to apply for coverage on HealthCare.gov, but who do not finish by Monday, will have until about mid-April to ask for an extension, federal officials told the Washington Post.
The Washington Post reported that users will have a chance to check a box on the website indicating they tried to enroll before the deadline, though the government will not try to determine whether the person actually made an effort to sign up.
"This is probably the first of many (extensions)," Chris Stirewalt told Megyn Kelly Tuesday on "The Kelly File."
"This is the first nod to a dire political situation," Stirewalt added.
Republican National Committee Chairman Reince Priebus pounced on the extension, calling it another delay for a "failed health care law."
“Another day, another ObamaCare delay from the same Obama administration that won’t work with Republicans to help Americans suffering from the unintended consequences of the Democrats’ failed health care law," Priebus said in a statement. "Democrats in leadership may say they are doubling down on ObamaCare but you have to wonder how many more unilateral delays their candidates running in 2014 can withstand.”
Many states and the federal government experienced technical problems with the enrollment websites, but implementation of the federal Affordable Care Act has been a relative disaster in Maryland, Massachusetts, Nevada, Oregon and Vermont.
Rather than focusing on meeting enrollment targets, officials in those states find themselves consumed with replacing top officials, cancelling contracts with software companies, dealing with state or federal investigations, and spending tens of millions of dollars on fixes and new contractors. The core of the problem has been the difficulty in building an online health insurance marketplace that syncs up with myriad state and federal databases.
Early projections for those five states were to sign up a combined 800,000 Americans for private health insurance coverage by March 31, 11 percent of the Obama administration's original target for national enrollment. Yet with just days to go before the six-month enrollment period ends, achieving 25 percent of that target would be considered a success.
Overseers of Nevada Health Link have called that state's program a "full failure" and a "catastrophe." Some officials have suggested dumping Xerox, which was awarded a $75 million contract to develop the system.
While Xerox remains on the job, a state board earlier this month approved up to $1.5 million to hire another tech firm, Deloitte Consulting, to assess the Xerox system and recommend fixes.
Last month Nevada officials cut their target enrollment from 118,000 to 50,000 and conceded that meeting even the lower goal would be a challenge. That drew the ire of board members, who lashed out about the thousands of people who will remain uninsured after Monday's deadline.
"These are not numbers. These are people throughout the state who don't have health insurance," said Lynn Etkins, an attorney and vice chairwoman of the board overseeing the Silver State Health Insurance Exchange.
A week later, Nevada exchange executive director Jon Hager announced his resignation to pursue "new opportunities."
It is a similar story in Oregon, where the exchange's executive director and two officials who oversaw the early technology development resigned. As of last week, 47,000 Oregonians had signed up for private insurance, less than a quarter of initial projections for the full enrollment period.
The exchange's website was so badly bungled that applications at the beginning had to be processed manually, a process that remains partially in use. Cover Oregon has withheld $26 million of the $160 million billed by Oracle, which designed the website.
The federal Government Accountability Office has announced an investigation, and a state-funded audit released last week found a failure by the exchange's managers to heed reports of problems, poor communication and what it described as "unrealistic optimism." In announcing results of the audit, Democratic Gov. John Kitzhaber said he was angry and disappointed in a process that had caused so much confusion and uncertainty among consumers.
Maryland's exchange crashed at the start of open enrollment on Oct. 1 and has been rocky ever since. The exchange's initial executive director, Rebecca Pearce, quit two months into open enrollment, and last month Maryland fired the state's prime information technology contractor, Noridian Healthcare Solutions, after paying it $65 million.
U.S. Rep. Andy Harris, the only Republican in Maryland's congressional delegation, called for a review by the U.S. Department of Health and Human Services into how $250 million in federal money was used in the botched exchange. The department's inspector general informed Harris that it will conduct the review.
"I mean, this is an immense amount of money on a project that I think in the end, if I were betting right now, I would bet that they will abandon the Maryland exchange and either import another state exchange like Connecticut's that works or go to the federal exchange," Harris said.
In addition to making major fixes, Maryland officials are considering whether to adopt technology developed by another state, join a consortium of other states running their own exchanges or partner with the federal exchange.
In Massachusetts, where health care reform implemented under then-Gov. Mitt Romney was used as a model for President Obama's Affordable Care Act, officials announced earlier this month that they were cutting ties with CGI Group Inc. The Montreal-based firm also was the lead contractor on the troubled federal health care website that operates in 36 states.
CGI was hired last year under a $68 million contract to develop a website transitioning Massachusetts' previous health insurance program to reflect requirements under the federal law.
But technical problems quickly led to a backlog of 50,000 paper applications, a pile that has since been whittled to about 21,000. The state hired Optum, another health care technology firm, to come up with short- and long-term solutions for the website, for which it was to be paid at least $16.4 million through the end of March.
"The picture we are painting is that we have a long way to go," said Sarah Iselin, a health care executive hired by Massachusetts Gov. Deval Patrick to oversee fixing the website. "We are not going to sugarcoat anything."
With its politics dominated by Democrats, Vermont was an early supporter of the Affordable Care Act. While the state has had some success with enrollments, its state-run exchange also continues to be plagued with problems.
The latest official numbers released by the Obama administration show that 24,300 people had signed up for individual plans through the exchange by March 1. That compares to the administration's original projection of 45,600 by that point in time.
As recently as Tuesday, the online marketplace still could not handle enrollees reporting a change of marital status, job or other circumstance. Participants must contact the exchange's customer service line to report those changes.
Gov. Peter Shumlin, a Democrat, has repeatedly said he has been disappointed with the rollout of the exchange website, which drew widespread criticism after it went live last fall for being slow and not allowing users to correct mistakes.
The portal could not process premium payments online until earlier this month.
Vermont Republican leaders have asked for an investigation by federal prosecutors and are hoping to capitalize on the exchange's problems by targeting Democrats, who control both houses of the state Legislature, in this year's elections.
"People are just disgusted with it," said Rep. Brian Savage, the assistant House minority leader.
The governor's spokesman, Scott Coriell, said the exchange has been making steady improvements and that enrollments have been picking up rapidly as the deadline approaches.
Some states, including Nevada, are giving consumers extra time to get through the process if technical problems prevented them from completing their enrollment by Monday. As of last week, only 22,000 successfully purchased private coverage in Nevada.
In all five states, officials are trying to limp through the end of this year's signup period while focusing on fixing problems so the exchanges run more smoothly when the next open enrollment period begins in November.
Nevada officials said they will push Xerox for improvements and await the assessment from Deloitte, but officials concede there will be a lot on the line.
"We can't go through this again," Republican Gov. Brian Sandoval said. "We're not going to wake up every morning seeing stories of Nevadans who can't navigate through the system; that aren't getting insurance cards; the gentleman who had a heart attack who is still sitting in limbo not knowing what his status is.
"This has cascaded to absolute worst-case scenario."

‘Revolving door’? Ties between consultancy, gov’t raise questions about Benghazi probe

Meet Beacon Global Strategies.
The online bios for its founders and managing directors suggest no group knows more about the Benghazi terrorist attack and the Obama administration's response. Yet the consulting firm has deep ties to former Secretary of State Hillary Clinton and others involved in the controversy – ties so intertwined with the administration and Capitol Hill that they raise questions about an upcoming hearing where former CIA Acting Director Mike Morell is slated to testify.
"It is like a revolving door on steroids," Bill Allison, whose Sunlight Foundation is a nonprofit that supports government transparency, told Fox News, adding that Washington's “revolving door” is a bipartisan problem.
"Republicans have gone through the revolving door, Democrats. … It says an awful lot about Washington and how hard it is to really be independent in Washington.”
READ BEACON'S REGISTRATION AS AN LLC
Morell, who also is a national security analyst for CBS News and has a book deal, joined the Beacon firm after retiring from the CIA last year. In doing so, he joined an organization already stacked with ex-government officials. Among them is Philippe Reines, whom the New York Times magazine recently described as Clinton's "principal gatekeeper." According to Beacon’s website, Reines traveled to more than 110 countries with the then-Secretary of State as part of her senior team.
Another employee, Jeremy Bash, was a former chief of staff to Leon Panetta at both the CIA and Defense Department. Andrew Shapiro was a Clinton policy adviser at the State Department whose portfolio included ridding Libya of shoulder-launched missiles called MANPADs. 
And it includes Republican J. Michael Allen, who was a former majority staff director for the House Intelligence Committee, headed by Republican Rep. Mike Rogers.
In November 2012, Morell testified before the House Intelligence Committee in a closed session about Benghazi, when Allen was still staff director. In May 2013, Morell testified for a second time in a closed session about Benghazi and the so-called talking points – the administration’s flawed public narrative initially blaming a protest for the attack, which killed four Americans.
Morell now is expected to testify for a third time in early April before the same panel -- the House Intelligence Committee, where his colleague Allen once worked -- after Republican allegations he misled the Senate Intelligence Committee over the talking points. The next hearing is expected to be public.
READ J. MICHAEL ALLEN'S FINANCIAL DISCLOSURE STATEMENT
Business records reviewed by Fox News show that in April 2013, Beacon Global Strategies registered as an LLC. 
Congressional rules require immediate notice to the ethics committee when a senior Hill staffer, who earns more than $120,000, negotiates for outside employment. Allen falls into this category.
A Nov. 19, 2012 Memorandum to all House Members, Officers and Employees, posted on the Ethics Committee website states:
"Certain House staff must notify the [Ethics] Committee within three (3) business days after they commence any negotiation or agreement for future employment or compensation with a private entity. Staff subject to this disclosure requirement are those employees of the House who are paid at or above an annual rate of $119,553.60. …”
"The term 'negotiations' connotes 'a communication between two parties with a view toward reaching an agreement' and in which there is 'active interest on both sides.'”
It adds: "Employees also should avoid situations that might be viewed as presenting even a risk that the individual might be improperly influenced by personal financial interests."
Disclosure forms, obtained by Fox News from the congressional clerk's office and written in Allen's handwriting, state that he filed with the ethics panel in July -- almost three months after Beacon registered. Fox News asked Allen when he began informal discussions with Beacon, as opposed to formal negotiations for employment, and whether at the time of Morell's May 2013 testimony, Allen was aware the former deputy director of the CIA might join Beacon.
In light of Morell's upcoming testimony, and given the apparent discrepancy between Morell's November 2012 and May 2013 testimony before the House Intelligence Committee, Fox News also asked Allen what steps he took to further investigate whether Morell had misled lawmakers.
After exchanging emails over a four-and-a-half hour period, Beacon Global Strategies LLC provided a lengthy statement to Fox News on behalf of Allen. While not providing specifics, Beacon provided "the overall timeline of the firm’s formation and the subsequent personnel actions."
While Allen is listed on the website as a founder, Beacon's statement indicates he was not approached until two months after its registration.
The statement said:
"This firm was founded on the strong belief that keeping America secure must be a nonpartisan endeavor, and is dedicated to acting in a truly bipartisan manner. We not only adhere to all governing ethics rules and laws, we strive to go above and beyond those requirements and hold ourselves to the high ethical and professional standards we did throughout our decades serving in government. As for the timeline: this company was formally created by the three original partners in April of 2013. Mr. Allen was approached at the end of June, at which point he filed a ‘Notification of Negotiations or Agreement for Future Employment’ with the US House of Representatives Committee on Ethics. He subsequently filed a ‘Statement of Recusal’ with the same committee. Upon accepting the offer to join the firm in July, he promptly and fully disclosed such to Congressional officials. Mr. Morell was not approached until November. Therefore, nobody could have been influenced by events that were not yet planned and had not yet occurred."
Fox News spoke Monday with Rogers, chairman of the committee, who underscored the fact that no congressional panel has done more to investigate Benghazi than his -- and that Morell is now being recalled for a third time, where, in an open forum, all issues can be addressed, including allegations that Morell misled the Senate Intelligence Committee. 
As for Beacon, in a September interview with Defense News shortly after the firm launched, Reines indicated it may be a temporary stop. "In terms of going back in, I think we all want to, but we also know that life doesn't necessarily work out so cutely."