Guv Fends Off Trump Bashers as GOP Readies Medicaid Bomb for MA

Friday, February 17, 2017

It looks like Charlie Baker has for the time being thwarted the practitioners of outrage -- they who were demanding from him at least daily denunciations of President Trump, notwithstanding the Commonwealth’s serious-as-heroin financial dependence upon the federal government.  I’ve not heard anything in several days from any Massachusetts group ordering Baker to make explicit his revulsion toward the Donald or else risk losing any claim to political legitimacy, moral credibility, human decency, normal eyesight or clothes sense.  Baker’s winning this game by refusing to play. Good for him.  He knows that any denunciation he did make would never be judged sufficient, and that, if by chance it were so deemed, those suffering from Trump derangement syndrome would be back the next day, baying for more and louder condemnations.  Because Trump’s an idiot doesn’t mean Baker has to slash the Commonwealth’s wrists.

Yesterday morning, the Massachusetts Budget and Policy Center released a report illustrating, in chapter and verse, just how much Massachusetts relies on federal dollars to balance its books.  “This fiscal year, one of every four dollars that supports the state’s budget comes from the federal government – close to $11 billion in federal funds,” according to the report, [“Partnership in Peril: Federal Funding at Risk for State Programs Relied on by Massachusetts Residents”].  Uncle Sam’s reimbursement for Medicaid spending is the biggest single federal subsidy in the Massachusetts budget. “There is a real risk that Congress could change the basic funding structure of the Medicaid program,” the report warns. “For instance, Congress could turn Medicaid into a block grant, which would be a fundamental threat to the program.” 
“Partnership in Peril” may be found at:

http://massbudget.org/report_window.php?loc=Partnership-in-Peril-Federal-Funding-at-Risk.html

Only hours after this report appeared, the national press was reporting on the outlines of the proposal-in-the-works from Congressional Republicans to replace the Affordable Care Act, a.k.a. Obamacare.  As predicted, and as greatly feared in Massachusetts, the GOP wants to end Medicaid as an open-ended entitlement and convert it to a block grant program.  No longer would federal Medicaid subsidies keep pace with the inexorably growing demand here for Medicaid care and services. 

Medicaid spending has been increasing in stunning fashion for years now in Massachusetts.  The State House News Service reported in January, for example, that, “Over the past decade, enrollment in government-funded health coverage under MassHealth (the name we give to our Medicaid program) has rocketed upwards, growing by 70 percent since 2007 when Gov. Deval Patrick took office…”  Today, Medicaid spending represents just over 40 percent of the entire state budget. 
A federal conversion of Medicaid to block grants would trigger an almost immediate budget crisis.  There’d be enormous pressure on the governor and legislature to avoid cutting Medicaid care and services, and to have the state make up the shortfall.  From communities large and small, there’d be impassioned cries to increase state taxes to maintain the Medicaid status quo.  It could become an office holder’s worst nightmare.

If Baker soon finds himself in Washington, arguing and pleading for a kinder, gentler Medicaid block grant program, I hope what I read the other day on Yahoo, i.e., that New Jersey Governor Chris Christie may soon replace Reince Priebus as Trump’s chief of staff, comes true. 
Christie’s an old friend and supporter of Baker.  With him at Trump’s side, Baker would at least get a sympathetic and respectful hearing in the White House.  “…whatever else you want to say about Christie, and I’ve always found him to be a more complicated and gifted politician than his detractors can stand to admit," wrote Yahoo's Matt Bai, "the man knows how to bring focus to a political operation, and how to advance a governing agenda, and how to balance public bluster with backroom pragmatism.”  Baker would be quick to agree with Bai, as would I, that Christie’s a gifted politician. 

What a remarkable political resurrection it would be if Christie, after losing his bid for the Republican presidential nomination, embracing Trump, then being cast ignominiously aside by Trump’s inner circle soon after the November election, suddenly found himself one of the most powerful men in Washington. The possibility ought not be dismissed. Politics routinely produces such wonderments.  The Bai column may be found at:

https://www.yahoo.com/news/trumps-in-trouble-is-it-christie-time-already-100043322.html?.tsrc=fauxdal

We need no further proof that Baker is not cut from the same Republican cloth as Trump, but here it is anyway: a comment our governor made to the Lowell Sun earlier this week. “I get the fact that I’m not living in a measured-tone environment,” he said, “but I’m going to model the behavior I believe other folks should exemplify: It’s to be hard on the issues, and soft on the people.  Anybody can stand on a corner and shout insults, but what matters is coming into an arena and finding common ground.  I wish everyone in politics behaved that way.”  [“Gov. Baker: Goal is finding common ground to benefit all,” 2-15-17.]
One of the controversies Trump has triggered since taking office concerns the propriety of medical professionals speculating, in the media, on the mental health and stability of the president.  An example of that phenomenon may be found in a recent letter to the editor of the New York Times, [“Mental Health Professionals Warn About Trump,” 2-13-17.]   

“We believe that the grave emotional instability indicated by Mr. Trump’s speech and actions makes him incapable of serving safely as president,” wrote Lance Dodes and Joseph Schachter.  Significantly, the letter was co-signed by 33 other psychiatrists, psychologists and social workers.
Dodes is a retired assistant clinical professor of psychiatry at Harvard Medical School, Schachter a former chairman of the Committee on Research Proposals for the International Psychoanalytic Association. 

I can’t help but lap this stuff up...but not without qualms.  Many medicos frown on statements like this because it constitutes diagnosing without directly knowing, much less examining the patient.  The other day, I heard one clinician say Trump’s behavior may be disturbing but that doesn’t mean it’s a sign of mental illness, and that in fact Trump is likely not mentally ill because he doesn’t seem to be suffering on account of his temperament.  This called to mind a piece of wisdom I once found on the tag of a tea bag: Some people don’t suffer from mental illness, they enjoy it.

 

 

 

 

 

 

 

Thanks to Governor, T Runs Better but Confident Riders Are Hard to Find

Wednesday, February 15, 2017

An interview with Steve Kadish, Charlie Baker’s chief of staff, by CommonWealth magazine’s Michael Jonas appeared online January 10.  Headlined “Governor Fix-It’s fix-it man,” the Q&A was heavy on the details of Baker administration policy and governance, but nevertheless a good, fast read.

Somewhere near the end, as Jonas and Kadish were discussing the MBTA, to which both the governor and his chief of staff have devoted incredible amounts of time and energy, Jonas said something that had my head nodding like a bobble head doll’s.
“I ride the Red Line.  One day this week there was a signal problem at Harvard.  I start at the far other end at Ashmont and we were delayed because of it,” Jonas related. “And the doors in one of the cars were not working, so people on the platform had to keep scurrying to another one.  It (the T) still has the feeling sometimes of being held together by bailing wire and bubble gum.”

Indeed.
I ride MBTA buses and subway cars every work day -- and almost every day’s an adventure.  My commute yesterday morning is a case in point.

The 7:40 a.m. bus I was supposed to catch in the Melrose Highlands was eight minutes late.  No one shovels out bus stops after snow storms, so I had to wait in the snow-narrowed street, Dunkin’-guzzling, cell-phone-talking motorists be damned.  Upon boarding, I shuffled to my usual spot, a sideways-facing bench at the back.  I like the extra leg room there.  Then I put my face in a magazine. 
More than half-way to Oak Grove station, I noticed something different, something I’d never seen before on that bus at that hour: there were only two other passengers besides myself.  Scanning the road ahead, I saw the why.  My bus was directly behind the 7:25 a.m. bus.  The system wasn’t working as it should; lots of people were going to be late for work.

When our buses-in-tandem got to Oak Grove, there was a big tie-up on the access road, Banks Place.  This happens after heavy snowfalls because the T has set up paid parking spaces on one whole side of Banks Place. It’s impossible to clear all the snow that falls during big storms out of those spaces. Banks Place grows much narrower. With traffic moving in both directions, everybody has to slow down to avoid scraping fenders with oncoming vehicles. Usually, the trip down Banks Place takes maybe 30 seconds; yesterday morning, it took five minutes.
Heading to the platform where the trains pull in, I read on the overhead message board that one train was boarding (about to leave) and the next would depart in 10 minutes. Ten minutes between trains guarantees you’ll be packed into a car like bullets in a magazine.  The T could use one train every three minutes in the rush hours.

I did my best imitation of running to catch the boarding train.  There was only one open seat remaining, between two guys built like the defensive linemen on the Everett High football team.  I couldn’t squeeze my shoulders between the two and had to perch on the edge of the seat, holding my briefcase on my knees.  But I was one of the lucky ones.  I wasn’t standing up and I wasn’t squeezed shoulder to shoulder, face to face with strangers.  Somebody’s 18-inch-wide backpack wasn’t pressed into my spine the whole way to Boston.
The first stop after Oak Grove is Malden Center.  Its platform is always crowded in the morning.  Within 10 seconds of the doors opening, almost every inch of “my” car was occupied.  One may assume the same was true of every other car, meaning there would be a lot of disappointed, angry T patrons at the next three stops, Wellington, Assembly and Sullivan Square.  Not until the train rolled into Community College and the Bunker Hill students disembarked would some standing room open up.

SO, if you were waiting yesterday morning, circa 8:30, at two very busy stops (Wellington and Sullivan Square) and one medium-busy stop (Assembly) on the Orange Line, you had almost zero chance of getting on a train.
“There’s huge investment that’s needed, and so every day we look at performance of all the lines, and it’s not reliable enough yet,” Steve Kadish said in response to Michael Jonas’s “bailing wire and bubble gum” observation, before adding some nuance.

“Let me take that back,” he said.  “The reliability of the Blue Line, the general reliability of the Orange Line, the general reliability of the Red Line – pretty solid when you see the daily stats.  It comes very close to hitting 75 percent on-time performance.”
Kadish is correct.  The Baker administration has definitely made the T run better than it did in the disastrous winter of 2014-15.  That has been no small feat.  As a T rider, I am very glad that Governor Fix-It, (or, as I call him, Our Eagle Scout Governor), decided to “take ownership” of our Godforsaken mass transit system.

The T will not, cannot become the system metro Boston needs, and that “bailing wire and bubble gum feeling” will not vanish, until we get really serious about that “huge investment” Kadish mentioned. 
Read the entire Jonas-Kadish interview by going to: http://commonwealthmagazine.org/politics/governor-fix-its-fix-it-man/

 

Beware! The Oracle of Boston Ain't Digging Trumponomics

Tuesday, February 7, 2017

The money crowd has dubbed him the “Oracle of Boston,” signifying his exceptionally high standing in the investment world as an equal to Warren Buffett, the “Oracle of Omaha.”

Used copies of his book, “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor,” sell for thousands of dollars on the Internet.
He’s so important in the financial circles that, when he had heart surgery a while back, the Wall Street Journal kept its readers apprised of his medical condition and progress.

Meet Seth Klarman, age 59, a Baltimore native, Harvard grad, resident of Chestnut Hill, billionaire, frequent donor to Republican office holders, (including Charlie Baker), and founder of the Baupost Group, a Boston-based private investment partnership.
And, guess what? Our new Republican president has Mr. Klarman shaking in his boots.

As just reported in the New York Times, Klarman recently wrote a private letter to his investors, which found its way to Times reporter Andrew Ross Sorkin.  In an article headlined “A Quiet Giant of Investing Weighs In on Trump,” Sorkin revealed that Klarman views with skepticism and alarm the gains in the stock market that followed Trump’s election.
“In particular, Mr. Klarman appears to believe that investors have become hypnotized by all the talk of pro-growth policies, without considering the full ramifications,” wrote Sorkin.  “He worries, for example, that Mr. Trump’s stimulus efforts ‘could prove quite inflationary, which would likely shock investors.’ ”

Sorkin’s piece, replete with quotations from Klarman’s letter, is a must-read.  There’s a link to it below.  I should not summarize it when the original’s readily available and better written than my blog.  But I'd like to present a few choice excerpts from Klarman’s letter, as reported in the Times:

“President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces.”
“While they might be popular, the reason the U.S. long ago abandoned protectionist trade policies is because they not only don’t work, they actually leave society worse off.”

“The erratic tendencies and overconfidence in his own wisdom and judgment that Donald Trump has demonstrated to date are inconsistent with strong leadership and sound decision-making.”
“The big picture for investors is this: Trump is high volatility, and investors generally abhor volatility and shun uncertainty.”

“Not only is Trump shockingly unpredictable, he’s apparently deliberately so; he says it’s part of his plan.”
“If things go wrong, we could find ourselves at the beginning of a lengthy decline in dollar hegemony, a rapid rise in interest rates and inflation, and global angst.”

Here’s the link to “A Quiet Giant…”:
https://www.nytimes.com/2017/02/06/business/dealbook/sorkin-seth-klarman-trump-investors.html

 

This Month in Corruption: Same Old Saga Stays with Us

Tuesday, January 31, 2017

As a faithful reader of the State House News Service, I have been noticing for years how often the Press Releases section of the service’s subscriber-only web site contains an account of wrongdoing and/or unsavory behavior in the public sector or in sectors regulated by public agencies/overseers.

At the end of last month, I decided to do a post summarizing some of those more recent accounts and  I put a headline on it that said, “This Month in Corruption: Snapshots of the Public Trust Betrayed.”
In the back of my mind was that I could turn this into a regular feature.  But, unsure as to whether the bad behavior pipeline was really as full and as fast-flowing as I perceived it to be, I held off on designating “This Month in Corruption” a regular feature.

Well, my concerns about supply were exaggerated, to say the least.  Herewith the ill-cultivated fruits of January, as presented by the State House News Service:
Postal Worker's Steroid-Import Enterprise.  On January 4, a federal postal worker copped a plea concerning the purchase and importation of illegal anabolic steroids.  According to a press release from the Office of the U.S. Attorney for Massachusetts, John A. Psehoyas, age 54, pleaded guilty to one count of importing a controlled substance and agreed to resign from the U.S. Postal Service. 

“Psehoyas was a customer service supervisor at the Lynnfield, Mass. Post Office,” the release related.  “From August 2014 to March 2016, Psehoyas purchased anabolic steroids, a controlled substance, from online sources.  He had the parcels containing steroids shipped to him from China, Turkey and Romania.  The parcels were addressed to multiple addresses to avoid suspicion, but Psehoyas tracked the parcels using a USPS tracking system.”
U.S. District Court Senior Judge Douglas P. Woodlock is scheduled to sentence Psehoyas on April 6.

Rating Agency Rapped for Fees-Motivated Analyses. On January 17, Attorney General Maura Healey announced that Moody’s, the big credit analysis and rating agency, will pay $12 million to Massachusetts in relation to its conduct in the rating of securities packaged as mortgage loans.  This was part of an $863-million-plus settlement Moody’s made on January 13 with 22 states.
While Moody’s emphasized its independence and objectivity, Healey’s office noted, it “allowed its analysis to be influenced by its desire to earn lucrative fees from its investment bank clients and assigned credit rating to risky assets packaged and sold by Wall Street investment banks that failed to disclose the risks posed by those securities.

Moody’s put out a statement declaring that it “stands behind the integrity of its ratings, methodologies and processes,” and adding that “the settlement contains no finding of any violations of law, nor any admission of liability.”
A Bank’s 'Secret Commissions' Scheme.  On January 18, the Office of the U.S. Attorney for Massachusetts announced that State Street Corporation had entered into a deferred prosecution agreement under which it would pay a $32.3 million criminal penalty to resolve the government’s criminal investigation into a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.  State Street also agreed to offer an equal amount as a civil penalty to the federal Securities and Exchange Commission.

“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney William D. Weinreb. 
Acting Assistant Attorney General David Bitkower chimed in, “The bank fundamentally abused its clients’ trust and inflicted very real financial losses.”

Also quoted in the release was Harold H. Shaw, Special Agent in Charge of the Boston Field Division of the FBI, who said, “State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients.  This agreement…demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence, and hold financial institutions accountable.”
A ‘Shell Game’ in the Hedges. On January 18, Massachusetts Secretary of State Bill Galvin moved to bar three Cambridge-based hedge funds and Yasuna Murakami, the man who operates them, from any securities business in Massachusetts.  Secretary Galvin alleged that the funds operated as Ponzi schemes.

Murakami took about $15.3 million into the funds from at least 47 investors, Galvin maintained.
“This case represents a classic example of a shell game of moving the money from one investor to another with some left over to fatten the coffers of the money manager,” Galvin said.  “It is yet another example of how rogue actors use every trick in the book to entice otherwise sophisticated investors to turn over their money based on promised high returns.”

In addition to barring Murakami and his firm from the securities business, Galvin’s office is seeking to disgorge “all of the profits from the alleged wrongdoing,” provide the investors with restitution, and levy an administrative fine.
Owww! The Pain of Bad Billing for Dental Work.  On January 25, the Office of Attorney General Healey announced that a Newton dentist, Dr. Julia Faigel, had agreed to pay $475,000 to the state’s Medicaid program (MassHealth) to resolve allegations of improper billing for work performed at 21 different dental offices the doctor owned and operated.

There was a “pattern of problematic billing” in these offices that “cost MassHealth thousands of dollars and violated state regulations,” Healey announced.
A Cherry-Picking Financial Advisor. On January 25, a Waltham-based financial advisor agreed to plead guilty in connection with defrauding his clients by engaging in a multi-year “cherry-picking” scheme. 

Michael J. Breton, age 52, managing partner of an investment advisory firm, Strategic Capital Management, had been facing charges of securities fraud, reports the Office of the Acting U.S. Attorney for Massachusetts.

According to that office, “Breton allegedly purchased shares in those companies shortly before the earnings announcements and then allocated the shares after the earnings announcements.  Thus, Breton allocated the shares to one of his accounts or to the client accounts after knowing whether the company had announced positive or negative news about its earnings, which determined whether the trade was likely to be profitable in the short term,  Throughout the scheme, Breton allocated more profitable trades to himself and allocated unprofitable trades to his clients, thereby stealing more than $1.3 million in potential profits from his clients.”
Variable Annuities of the 'Unsuitable' Variety. On January 30, Secretary of State Bill Galvin ordered LPL Financial LLC to offer approximately $2.5 million in restitution to retirees and other older investors in the health care field in connection with the sale of unsuitable variable annuities.  The order also featured a $975,000 fine against LPL.

Last month, the Secretary of State’s Securities Division charged LPL with failure to supervise one of its investment advisers “who sold variable annuity products to clients which were unsuitable for the clients,” Galvin’s release stated.
“The facts in this case make clear that seniors and retirees continue to be prey to unscrupulous advisers targeting 401(k) and 403(b) roll-over assets to gain high commissions on unsuitable products,” Galvin said.

 

  

No Consolation but MA at Least Knows a Pathological Candidate when it Sees One

Friday, January 13, 2017

Nearly half a century has passed since the presidential election of 1968. We’re still learning things about that race that make your stomach turn.

On Saturday, December 31, the New York Times published an article by John A. Farrell, author of a forthcoming biography of Richard Nixon. 
“Nixon’s Vietnam Treachery” describes how Farrell made a startling discovery while conducting research at the Richard Nixon Presidential Library in California: notes written by Nixon’s top aide, H.R. Haldeman, confirming that Nixon tried to sabotage Vietnam War peace negotiations in the fall of ’68.  He feared that a peace settlement engineered by Lyndon Johnson before the election would assure his defeat at the hands of Johnson’s vice president, Hubert Humphrey.   

“Haldeman’s notes return us to the dark side,” Farrell wrote in the Times. “…we must now weigh apparently criminal behavior that, given the human lives at stake and the decade of carnage that followed in Southeast Asia, may be more reprehensible than anything Nixon did in Watergate.”
Farrell wrote that Haldeman’s notes,  unsealed only  nine years ago, “contain other gems, like Haldeman’s notations of a promise, made by Nixon to Southern Republicans, that he would retreat on civil rights and ‘lay off pro-Negro crap’ if elected president.  There are notes from Nixon’s 1962 California gubernatorial campaign, in which he and his aides discuss the need to wiretap political foes.”  The Farrell piece may be found in its entirety, and I strongly encourage everyone to read it, at:

So, we have been given proof that the 37th president of the United States was so driven to become the most powerful man in the world he did not care if U.S. soldiers had to keep on dying and suffering grievous battle wounds if that is what it would take to put him in office.

Every person who runs for president is possessed by a rare form of ambition, of course. Nixon was not the first candidate in which that ambition boiled over into pathology.  Nor would he be the last, as is apparent in the president-elect to anyone who opens his eyes and is ready to accept the evidence of his senses.
In the case of Nixon and now Trump, we citizens of the Commonwealth can mutter the refrain, “Don’t blame me, I’m from Massachusetts."  In the instant the slogan is voiced, we know it provides no consolation.

Forty-eight years ago in November, Humphrey beat Nixon here by 702,374 votes.   Of the 2,331,752 residents of Massachusetts who voted in that election, 63% wanted Humphrey. [Interesting footnote: The president/vice president ticket of George Wallace and Curtis Lemay received 87,088 votes in Massachusetts, 3.73%, in the final election.]
I’m glad I won't be around five decades from now when presidential historians and biographers will still be unearthing the sickening evidence of Trump’s ability to justify the means by the ends.

   

Company that Sold Land for Casino Says It Was Gamed Out of Rightful Price

Friday, January 6, 2017

The Massachusetts Gaming Commission has a big fight on its hands with the guys who sold the land for a casino in Everett to Steve Wynn.  If the commission loses, it could be out millions of dollars.

FBT Everett Realty filed a civil suit against the commission in Suffolk Superior Court, Boston, on Nov. 15, accusing it of “tortious interference” in FBT’s contract with Wynn Resorts, of Las Vegas, Nevada. [FBT is represented in the case by the Boston law firm of Todd & Weld, which boasts on its web site, "Our clients turn to us for the highest level of trial advocacy because they know that we begin to prepare every case for trial from the day it comes in the door."]
Under a binding legal option, FBT had committed in December of 2012 to selling the land to Wynn for $75 million.  But, due to subsequent “interference” by the commission, Wynn cut the agreed-upon price by $40 million, the lawsuit says, and forced FBT to accept the lower figure by threatening legal action against FBT.

The commission’s interference was motivated, the lawsuit claims, by a desire to deprive FBT of a “casino-related premium” on the land because the commission mistakenly believed a convicted felon, Charles Lightbody of Revere, who’d once been a member of FBT, was still involved in the ownership group, and the commission did not want him to make money on the transaction.   Felons are prohibited by Massachusetts law from profiting on a casino operation.
The lawsuit documents tell a version of the well-publicized tale of how Lightbody, during phone calls to a friend in prison, was caught on tape apparently crowing about the casino.  Here are some of the key paragraphs from the suit:

“On July 2, 2013, Lt. Kevin Condon of the IEB was informed by then-Major Frank Hughes of the existence of a series of recorded phone calls between Charles Lightbody and Darin Bufalino, an inmate in state prison.  In these calls, which were being monitored by state and federal law enforcement, the two men discussed the Everett casino project and gave law enforcement the impression that Mr. Lightbody retained some kind of ownership interest in FBT.  Lt. Condon has testified that the tapes were concerning to him because he ‘believed that would affect the entire gaming process if a person like Charlie Lightbody was involved in it.’  [Note: The IEB is the gaming commission’s internal law enforcement unit, the Investigations and Enforcement Bureau.]
“Shortly after Lt. Condon and Major Hughes listened to the Lightbody/Bufalino tapes, Lt. Condon determined that the IEB should interview the principals of FBT.  Those interviews took place between July 9 and July 16, 2013.  The three members of FBT, Dustin DeNunzio, Anthony Gattineri and Paul Lohnes, were interviewed, as was Mr. Lightbody, a former member of FBT.  The IEB also sought to interview Gary DeCicco, another former member of FBT, but Mr. DeCicco refused to speak to the IEB.

“During their consensual interviews with the IEB, Messrs. DeNunzio, Gattineri and Lohnes each identified Mr. Lightbody as a former owner of FBT.  The IEB (erroneously) believed, however, that the FBT principals had lied during their interviews regarding the ownership status of Mr. Lightbody in FBT.  The IEB believed either that Mr. Lightbody was still a hidden owner of FBT or, alternatively, that the FBT principals had falsified paperwork making it appear as though Mr. Lightbody had exited FBT in August 2012, rather than at some later date.
“The IEB and the Gaming Commission were angry at the FBT principals’ perceived malfeasance and the possibility that they would receive a substantial profit from the sale of the Everett Parcel if Wynn Resorts received a casino license.  This is evident from internal emails and other documents memorializing internal discussions at the IEB and Gaming Commission, the content of the IEB’s suitability report on the Wynn application, public meeting transcripts, and sworn witness testimony from a subsequent federal criminal trial.”

This thread in the suit concludes with:
“In order to impose a financial penalty on FBT and its members, one that the Gaming Commission knew it had no lawful authority to impose, the Gaming Commission devised a plan to ensure that FBT did not receive any casino-related premium for the sale of its land to Wynn Resorts.”

The enabling legislation for casino gambling, Chapter 23K of the Massachusetts General Laws, says that “ensuring public confidence in the integrity of the gaming licensing process and in the strict oversight of all gaming establishments through a rigorous regulatory scheme is the paramount policy objective” of the law. 
The power and authority granted to the gaming commission under Chapter 23K is supposed to be “construed as broadly as necessary for the implementation, administration and enforcement of the law.”

Did the commission and its investigators have a responsibility to pursue aggressively the facts concerning Lightbody’s standing in, or involvement with, FBT Everett Realty? 
Absolutely.

Did the commission act appropriately when it took Lightbody’s former and/or supposed affiliation with FBT, fashioned it into a club, handed it to Wynn, and encouraged his company to use it as a device for saving $40 million?
Doubtful, I’ve always thought.

It’s not hard to see why DeNunzio, Gattineri and Lohnes are eager to put the commission’s action in this regard to a legal test.  (Wouldn’t you, Mr. and Mrs. Prospective Jurors, do the same?) These guys paid $8 million for the former Monsanto Chemical property in Everett in 2009 and were poised, three years later, to secure a 900 percent-plus (gross) profit by selling it to Wynn for $75 million.
As a direct result of steps by the gaming commission, they lost 53 percent, $40 million, of what they almost had and have always believed they should have collected.

I don’t think there were many who thought DeNunzio, Gattineri, Lohnes, et al. had made a good move when they acquired the property because it was severely and extensively contaminated and because its prospects for conventional redevelopment purposes were, at the time, quite dim.  They took a big chance and got extremely lucky when the state legalized casino gambling and Steve Wynn came to town, burning to vanquish the competition at Suffolk Downs/Mohegan Sun and capture the sole available casino license for Eastern Massachusetts. 
That’s the American way. 

Congratulations and good luck to each of them, I say.

Do not be surprised if the gaming commission tries to have the suit dismissed on the ground that Wynn was not named as a defendant by FBT.  If it were dismissed, FBT would almost certainly be glad to insert Wynn in the case and refile it.  Then the serious negotiations would commence. 
I was not smart enough to go to law school.  That should (but won’t) stop me from hazarding a guess, i.e., Wynn and the commission could end up contributing as much as $10 million each to make this thing go away.

 

 

 

This Month in Corruption: Snapshots of the Public Trust Betrayed

Monday, December 26, 2016

If I were back in the newspaper business, I’d probably write a lead for this article containing the cliché, “Crime never takes a holiday.” 

Yes, clichés are the first resort of lazy-minded and hurried scribes, but the good thing is, they're usually accurate. 
So, with perfunctory apologies for interrupting your holiday cheer, I now present four separate accounts of public corruption in Massachusetts, which were all brought to culminations of sorts this month within a span of six days:

Embezzlement at Housing Authority.  On Tuesday, December 13, Rosa A. Famania, age 33, of Milford, pleaded guilty to one count of embezzling money from an agency receiving federal funds.  That agency is the Framingham Housing Authority (FHA), where Famania was employed as an accounting assistant for five-and-a-half years.
A press release from the Office of U.S. Attorney Carmen M. Ortiz states, “Between February 2014 and August 2015, Famania stole approximately 181 cash rental payments totaling $70,649 from FHA and utilized an FHA accounting software program to assist in disguising the theft...”

The release continues, “When Famania came into possession of the rent payments, she did not deposit the payments into the FHA bank account.  Instead, she kept the cash rent payments and adjusted the tenants’ balance downward…Approximately $55,100 in cash was deposited into an account maintained by Famania between July 2014 and July 2015.  From February 2014 to July 2014, nineteen U.S. Postal Service money orders totaling $17,900 were deposited into another bank account maintained by Famania.”
Famania will be sentenced for the crime, which carries a prison term of up to 10 years, on March 14, 2017.

Fraudulent Billing for Services. On Friday, December 16, Nita Guzman, age 52, of Burlington, was sentenced to jail and ordered to pay up to $570,000 in restitution for stealing from public agencies by billing for unlicensed psychological services.  
Guzman had pleaded guilty in Middlesex Superior Court to two counts of filing false Medicaid claims, one count of filing a false claim with a public agency, four counts of larceny, and two counts of practicing psychology without a license.  Her sentence to the house of correction was for 18 months.  After that, she’ll be on probation for five years.

According to a press release from the Office of the Massachusetts Attorney General, Guzman and her sister “orchestrated a criminal scheme to provide and bill for unlicensed psychological and mental health services for patients, including children, that they were not qualified to offer…”
The release continued, “Guzman’s twin sister, Nina Tischer, pleaded guilty in February 2016 to charges of False Claims to Public Agency (3 counts), Larceny (3 counts), Identity Fraud (3 counts), and Unlicensed Practice of Psychology (3 counts).  She was sentenced to two-and-a-half years in the House of Correction, suspended for a probationary period of five years…

“Through their corporations, both located in Lowell, the sisters provided bilingual psychological services to Medicaid and Medicare members in the greater-Lowell and greater-Lawrence areas, performed mental health disability evaluations for the Department of Transitional Assistance and the state’s Medicaid program (MassHealth), and assessed children for learning disabilities for Lawrence Public Schools.
“The investigation of Guzman began when a licensed psychologist reported to the AG’s Office that Guzman’s company had used her name and license number without permission to bill a Medicaid managed care organization more than $430,000.”

Theft from State Agency.  On Monday, December 19, Ennia Manto, age 52, of Braintree, the former Director of the Finance Division of the Massachusetts Group Insurance Commission (GIC), pleaded guilty to stealing more than $122,000 from the agency.  (The GIC is a quasi-independent agency  providing and administering health insurance and other benefits to state employees and retirees.) 
A press release from the Office of Attorney General Maura Healey states, “In June 2015, an accountant at the GIC discovered a wire payment for $72,349.83 that could not be reconciled with the GIC’s statements and internal documents.  Manto acknowledged that he made the transfer, claiming it was a payment to a health plan administrator for a nonstandard report.  Later, the accountant discovered that the required payment was for a different amount and not due for another year.  The GIC launched an immediate internal investigation and reported the matter to authorities.”

The release continues, “Upon learning that the wire transfer was being looked into, Manto altered the original printout of the wire transfer by cutting out information related to Seaport Equity, a company owned by Manto, and taping in information about the health plan administrator.  These documents were later found in a GIC recycling bin.  The contract documents that Manto had given to the accountant as backup documentation for the wire transfer had also been altered.
“Authorities subsequently confirmed that between March and June 2015, Manto made two wire transfers to Seaport Equity.  Further investigation revealed that Manto made an additional unauthorized wire transfer from the GIC’s funds to Seaport Equity in March 2015 for $50,000.”

Although the Attorney General’s office had recommended jail time followed by probation, Manto was ordered to make full restitution to the state and given three years’ probation.
Conspiring against Federal Regulators.  On Monday, December 19, Robert A. Ronzio, age 42, of North Providence, Rhode Island, national sales director for the New England Compounding Center (NECC) in Framingham, pleaded guilty in the federal district court of Boston in connection with an alleged conspiracy to defraud the Food and Drug Administration (FDA). 

Ronzio is reported to be cooperating with the government in its ongoing investigation of the center, where legal drugs were compounded, and he will not be sentenced until September 27, 2017.

A press release from the Office of U.S. Attorney Carmen M. Ortiz stated, “Ronzio admitted that NECC was a pharmacy dispensing drugs pursuant to physician-created prescriptions when it fact it operated as a manufacturer distributing drugs in bulk.  NECC created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions when it fact it was not.”
The release noted that “The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC.  The outbreak was the largest public health crisis caused by a pharmaceutical product.  The Centers for Disease Control and Prevention reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA.  Of those 751 patients, the CDC reported that 64 patients in nine states died.  The government’s investigation has revealed that those numbers continue to rise.

“In December 2014, following a two-year investigation, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment.  The indictment did not charge Ronzio with having an active role in the drug manufacturing operations of NECC, but did charge him with conspiring to defraud the FDA.”