Stephanie Mencimer

Reporter

Stephanie works in Mother Jones' Washington bureau. A Utah native and graduate of a crappy public university not worth mentioning, she has spent the last year hanging out with angry white people who occasionally don tricorne hats and come to lunch meetings heavily armed.

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Stephanie covers legal affairs and domestic policy in Mother Jones' Washington bureau. She is the author of Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies Are Taking Away Your Right to Sue. A contributing editor of the Washington Monthly, a former investigative reporter at the Washington Post, and a senior writer at the Washington City Paper, she was nominated for a National Magazine Award in 2004 for a Washington Monthly article about myths surrounding the medical malpractice system. In 2000, she won the Harry Chapin Media award for reporting on poverty and hunger, and her 2010 story in Mother Jones of the collapse of the welfare system in Georgia and elsewhere won a Casey Medal for Meritorious Journalism.

Bizarre Utah Bribery Case Sucks In Harry Reid

—By Stephanie Mencimer

| Wed Jan. 30, 2013 8:26 AM PST

Senate Majority Leader Harry Reid (D-Nev.)

Utah may be best known for its clean-living, teetotaling Mormon culture, but the state has long had a reputation as the home for less savory activity: financial fraud. Long known as the "scam capital" of the world, Utah has the dubious distinction of producing large numbers of con artists, penny stock scammers and other charlatans—so many that the Securities and Exchange Commission has an office in Salt Lake City (which is unusual for the agency). Yet another one of these sordid stories is underway in the state right now, and this time, an accused scammer has said he tried to bribe a big name: the highest ranking Democrat in the US Senate, Sen. Harry Reid (D-Nev.), himself a Mormon with many ties to Utah.

The tale is a convoluted one. But it starts with Jeremy Johnson, a St. George businessman and high-profile political donor in the state who has been indicted on a variety of fraud charges stemming from his running of an internet marketing company. In 2010, the Federal Trade Commission sued Johnson's company, iWorks, alleging it had engaged in a far-reaching scam to defraud consumers through bogus money-making offers online. The company was the source of lots of those ads promising free money from government grants after the 2009 stimulus bill passed. Instead of making money, the FTC has alleged, consumers who responded to the ads ended up with unwanted charges on their credit cards that netted iWorks and its principals more than $275 million in ill-gotten gains. (The case is still ongoing.)

After he was indicted on bank fraud and money laundering charges, Johnson came to the Salt Lake Tribune with a bizarre allegation: He claimed that in 2010, when the FTC was investigating iWorks, he tried to bribe Reid, whom he thought could make the FTC investigation go away.

Johnson said the scheme was the idea of John Swallow, a Republican and Utah's newly elected attorney general. Johnson had sought Swallow's help fending off the FTC, and according to Johnson, Swallow, a former lobbyist for a Provo-based payday loan operation, persuaded him that his best chance was a well-placed bribe. Swallow, Johnson said, initially wanted $2 million but settled for $600,000 for Reid.

Swallow put Johnson in touch with Richard Rawle, a Reid donor who owned the payday loan company for which Swallow had lobbied. Rawle, now deceased, supposedly bragged to Johnson that Reid had helped him successfully beat back payday loan regulations. Johnson claimed he paid about $300,000 to a shell company set up by Rawle, with the understanding that it would be used to enlist Reid's help in squashing the FTC investigation. Not long afterward, the FTC sued Johnson. His assets were frozen and he was arrested in the Phoenix airport en route to Costa Rica, and charged with mail fraud.

Clearly unhappy with the turn of events, Johnson said he demanded that Swallow return his bribe money. When the money wasn't forthcoming, Johnson went public with his allegations—shortly after Swallow took office this year. Johnson provided the Salt Lake Tribune with a host of financial records and emails allegedly documenting his exchanges with Swallow.

Everyone Johnson has implicated denies doing anything wrong. Swallow has claimed that the money Johnson gave him was for lobbying, not a bribe. Reid has denied receiving any money from Johnson or any other involvement in the mess. After the audio of a meeting between Swallow and Johnson was released Monday, Reid's office released a new statement to the Tribune:

The allegations of bribery by Mr. Johnson, a man with a background of fraud, deception and corruption, are absurd and utterly false. Bribery is a crime for which Senator Reid has personally put people behind bars. Senator Reid will not have his integrity questioned by a man of Mr. Johnson’s low record and character, and his outrageous allegations will not go unanswered. Clearly, a desperate man is making things up.

The story gets weirder. The Tribune tracked Johnson's money trail to a law firm associated with Jay Brown, a Las Vegas lawyer and payday loan industry lobbyist whose name has repeatedly surfaced in organized crime investigations. Brown is an old friend of Reid's, and in 2006, Reid offered to amend his financial disclosure forms after failing to fully disclose the details of his involvement in a land deal with Brown that netted Reid around $700,000. Meanwhile, the US Attorney's office in Utah announced Friday that the Department of Justice and the FBI are both investigating Swallow.

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Gun-Rights Activists Take Aim at Cops With Misleading Video

—By Stephanie Mencimer

| Wed Jan. 23, 2013 5:01 AM PST

A video circulating on the Internet this month has gotten tea partiers and other conservative activists riled up over what they see as the never-ending assault on the right to bear arms, particularly with the Obama administration mobilizing on gun control. The video (below) shows a man getting stopped by Citrus County, Florida, Deputy Sheriff Andy Cox for having expired tags on his van. After the man gets out of the car and futzes around to find his license, proof of insurance and registration, the officer notices that the man has a gun on his hip and asks, "What are you carrying a gun for?" The man answers, "I always carry a gun." At which point the officer quickly gets agitated and demands that he turn around and face the van, or "I'll shoot you in the back." The officer then orders the man to the ground, handcuffs him, and calls for backup.

Gun-rights activists have seized on the video as an example of how they are the persecuted, innocent victims of overzealous law enforcement, and they're using it to support a larger crusade: Ensuring that police officers can never take action against anyone simply because they're carrying a gun. Which is what the activists are implying happened here. The problem is, the man in the video in fact ran afoul of a state gun law, although Florida authorities declined to prosecute him for it.

Gun-rights activists posted the video online in early January and it has since gone viral—but the incident actually took place in July 2009, a fact they don't bother to mention. Yet, the date is key: The man in the video, Joel Edmond Smith, was arrested and charged with a violation of what was then the state's "open carry" prohibition. At the time of his arrest, it was illegal for someone—even with a valid concealed weapon permit—to display a gun openly in public, which Smith did accidentally when he was trying to get his paperwork out of his van. The state legislature changed the law in 2011 so that an accidental display of a legal concealed weapon is no longer a criminal offense, but in 2009, Cox still had solid legal justification for arresting Smith. Nonetheless, the state's attorney didn't see the charges against Smith as sufficiently serious to warrant prosecution and they were dropped shortly after he was arrested.

Those facts haven't stopped gun-rights activists in the past week from urging supporters to call the sheriff's department and ask that Cox be fired. They've done so in the thousands, according to Detective Corey Davidson, an internal affairs investigator with the Citrus County sheriff's department. Davidson said Cox was placed on paid administrative leave about a week ago, and that the department is investigating the incident (again). He said the department never released the video and that it is unclear how it got out or why it started circulating this month. He added that the man arrested in the video has never made any complaints against the department. (Davidson would not release the defendant's name because of the investigation, but it's been circulating on the Internet and is listed in county arrest records.)

The officer's treatment of Smith, who had a valid concealed weapons permit, may not have been model policing, but his reaction was understandable: According to the Violence Policy Center, at least 14 law enforcement officers have been killed by people legally carrying concealed weapons since May 2007, two of them in Florida. In several of these shootings, the officers were killed while conducting routine traffic stops like the one in the video.

The video appears to have been first posted by Sean Caranna, the executive director of Florida Carry, a major figure in the state fighting for the right for people to carry guns in public. Activists like Caranna want to change the law to ensure that cops can't confront or search anyone for carrying a gun in public—whether or not that gun may be illegally possessed. Florida Carry is involved in a legal case pending in the Florida Supreme Court that would decide whether the mere presence of a gun on someone's person can constitute a reasonable suspicion to justify an officer making an investigatory stop or search. A victory for gun activists could make it extremely difficult for law enforcement in the state to crack down on illegal guns and the crime associated with them.

[Read more in the MoJo blog]

Gun Lovers Freaking Out Over Price Gouging

—By Stephanie Mencimer

| Tue Jan. 15, 2013 7:09 AM PST

Since the elementary-school shooting in Newtown, Connecticut, gun sales have soared as elected officials around the country contemplate new restrictions on gun ownership. Paranoid gun owners have rushed to stock up on guns they think will be banned. They've spread (unfounded) rumors that Walmart, the nation's largest gun retailer, is going to stop selling ammo. All of the panic has prompted something of a run on gun supplies.

The frenzy has been lucrative for the people who make and sell small arms and ammo, but those poor schmucks who just need more shells for the assault weapons they already own are suddenly discovering the dark side of capitalism. In a strange bit of irony, gun owners who helped fuel the post-Newtown surge in sales are now shocked to discover that they're being overcharged. Gun blogs and message boards are full of posts like "i got price gouged," wherein Blue Cow at the Indiana Gun Owners forum writes:

i went to Lens ammo shop on Michigan street in South Bend today. Three days ago a brick of 22LR (500 rounds) of blazer was $20. Today I go to Lens after work and said I would like a brick of 22LR, he went and got it, rang me up and said "That will be $35." I said "What? It was $20 three days ago!!!" Len said "That was last weeks prices, everybody else is gouging so I should make a buck doing it to."

A California gun owner kvetched at Calguns.net that price gouging for ammo should be illegal:

The day I received my CheaperThanDirt catalog I called to place an order. I was interested in the loose 1,000 round case of Eagle .223 for $399.95. The sales rep answers with a price of $999.95. I let her know I'm looking at the catalog with the price of $399.95. With a very snooty and unsympathetic voice, she refers me to the right margin of page 57 which says they can change the price based on "market." If a hardware store charges $100 for a sheet of plywood in advance of a storm, they can be fined and/or jailed. Why is there not something to stop price gouging on ammo?

The complaints about price gouging, though, aren't getting an especially sympathetic response, especially from other gun owners. Many seem to take a dim view of anyone who actually pays such inflated prices. One person responding to Blue Cow in Indiana retorted, "All the whining about prices is getting old." The California poster got several economics lectures about supply and demand. "This is the United States, not the old Soviet Union. Price controls do not belong here," one poster replied.

The price-gouging may have an upside, though not for the gun lovers: It might help keep sales in check—at least temporarily—while Congress gets around to thinking about thinking about considering an assault-weapon ban.

Florida Gov. Rick Scott Wants A Favor—From Obama

—By Stephanie Mencimer

| Wed Jan. 9, 2013 9:43 AM PST

Florida Gov. Rick Scott (R) was in Washington, DC on Monday to make a deal. Florida, along with a handful of other Republican-run states, is still trying to wage war against Obamacare by refusing to take the generous expansion of Medicaid provided for in the new law. The expansion would provide government insurance to around a million poor and lower-middle-class Floridians, and the federal government has promised to foot almost all of the bill.

Last June, after the Supreme Court decision making the Medicaid expansion optional for the states, Scott said he won't take the money. But when Florida hospitals realized Scott's decision could cost them about $650 million a year in other federal payments, they started lobbying furiously to get him to change his mind. So now, after two years suing, demonizing and otherwise attacking President Barack Obama and the Democrats' health care bill, Scott wants to negotiate. He came to Washington saying that he'd like to "work with the administration to reduce the cost of health care." But that doesn't mean he's changed his mind.

Instead, what Scott wants from Kathleen Sebelius, Obama's secretary of health and human services, is something that might actually make Florida’s dismal insurance situation—nearly 4 million Floridians are uninsured—even worse. Scott wants the Sebelius to give him official permission, called a waiver, to hand over the entire existing Medicaid program to private managed care companies. Don't count on that happening.

Here's why. Florida already has a small pilot project approved by George W. Bush's administration that shunts Medicaid participants into HMO-type organizations. Scott has hailed this as a genius innovation that keeps costs down. But a close look at the program reveals no such miracles. A study by the Georgetown University Health Policy Institute concluded that there was no evidence the pilot project was saving money—and even if it was, any savings could have been from denying people needed care. (Anecdotal reports suggested that was the case.)

The Georgetown group also found that it would be all but impossible to make Medicaid more efficient, especially compared with private insurance. Between 2007 and 2012, private sector family insurance premiums rose more than 31 percent, but Florida's per-person Medicaid costs actually fell by five percent. And the idea that Rick Scott is giving the federal government tips on making health care more efficient is interesting given that when he ran his own health care company, Columbia/HCA, it was systematically bilking the federal government of millions of dollars in what turned out to be the biggest health care fraud case the US has ever prosecuted.

So maybe it's not surprising that the Obama administration has so far refused to allow Scott to expand the Medicaid pilot project, much less add another million people to it. And that's not all Scott wants: He's also asked Sebelius to allow Florida to charge all Medicaid patients unprecedented co-pays, such as $100 for emergency room visits not deemed an emergency, plus $10 monthly premiums. The Georgetown Health Policy Institute concluded that such a change would prompt about 800,000 poor parents and children to leave the program, an outcome that flies in the face of the administration's goal of extending Medicaid in the first place. After Monday's meeting with Sebelius, Scott said he was optimistic that he'd get what he wanted, or at least another meeting. Given his track record, he probably shouldn't hold his breath.

Report: Your Charitable Donation Is Going to Telemarketers, Not Charity

—By Stephanie Mencimer

| Fri Dec. 21, 2012 2:27 PM PST

'Tis the season to give to charity. But a new report from New York Attorney General Eric Schneiderman finds that many of the donations New Yorkers are giving to charity are mostly going to line the pockets of telemarketing firms. The report found that more than 60 cents of every dollar raised by a professional telemarketing firm for charity goes to the firm itself. Out of 602 fundraising efforts examined, only 49 returned more than 65 percent of the money raised to the nonprofit. More than a third of the fundraising attempts returned less than 30 percent of the donor money to the charity, and in 76 of the campaigns, charities actually lost money hiring the telemarketers. Schneiderman has issued subpoenas to some of the entities in the report in an investigation into whether repeat offenders are breaking New York fundraising laws with their money-losing telemarketing schemes.

Consumer advocates have been saying for years that a lot of charitable fundraising doesn't go to the needy. But the New York AG's report comes at an interesting time, when Congress and the president have been discussing whether limiting the $50 billion in annual tax deductions Americans claim for charitable donations is a good way to shore up the nation's finances. Nonprofit groups have risen up en mass to oppose the idea, but the AG's report shows that despite claims by conservatives, the private sector is not especially efficient when it comes to serving the less fortunate. And since many of the beneficiaries of charitable donations (the telemarketers) are not even nonprofits, it's not clear why such donations are tax-deductible in the first place.

Among the worst offenders on the AG's list are some familiar organizations, many of which are politically involved. Among them is Tea Party Patriots, a group that has long had unusually high administrative and fundraising costs. Schneiderman found that in 2011, Tea Party Patriots, one of the largest grassroots tea party organizations to have come out of the movement, collected nearly $2 million in donations through telemarketers. Just $54,000 of that—less than 5 percent—went back to the organization. The telemarketers kept the rest. Also, it seems that tea partiers are good at promising telemarketers they'll donate, but not so good about actually paying up. The report shows that Tea Party Patriots had $850,000 in pledges that went uncollected. For an organization that promotes fiscal responsibility, it's not setting an especially good example.

(Note to conservative activists: If you're looking to give to a tea party group over the phone, you're probably best off giving to FreedomWorks, which was until recently run by a professional lobbyist and former member of Congress. FreedomWorks was one of the few groups examined by New York that got 65 percent of the money it raised through telemarketers. Of course, what it did with that money is another issue.)

The Family Research Council Action, Americans United for Life (an anti-abortion group), Ralph Reed's Faith and Freedom Coalition, and the Concerned Women of America Legislative Action Committee, which ended up nearly $175,000 in the hole from one of its fundraising efforts, all had pretty bad records. But more liberal groups weren't that much better. NARAL, the ACLU, and People for the American Way all ended up at the bottom of the report: their telemarketing efforts ended up costing them more than they made. It's all just one more reason to hang up on telemarketers and send your donations through the mail.