August 2016 Newsletter
 

 

 

What's Inside?

 

 

 

 

 

 
Q&A with Adam Andrzejewski 
Founder and CEO of OpenTheBooks.com 
 

What are the purposes and goals of your organization, OpenTheBooks.com? 
 
At OpenTheBooks.com, our mission is to capture "every dime taxed and spent at every level of government ? fedderal, state and local across America." Our efforts make low-level Freedom of Information Act (FOIA) requests obsolete in the digital age. We are creating an information marketplace where the debate between the left, center and right squeezes out waste, fraud and duplication. 
 
Our country's founders understood that information is power and wrote transparency into our nation's founding documents. For example, Article I, Section 9 of the Constitution states, "? a regular Stattement and Account of the Receipts and Expenditures of all public Money shall be published from time to time." Today, the interpretation is clear: Our motto ? Every Dime. Online. In Real Time. 
 
We are the world's largest private database of government spending that's publicly accessible, with three billion government expenditures online. Our honorary chairman is former U.S. Senator Tom Coburn, Oklahoma. We display nearly all disclosed federal spending since 2000; 48 state checkbooks; and large portions of salaries, pensions and vendor spending in roughly 40,000 of 90,000 municipalities. 
 
We are on pace, over the next 18 months, to complete our first full record of all government expenditures at every level. You could say we're a spending genome project. Our aim is to map spending at all levels. 
 
We believe government spending should be done publicly, not cloaked in the privacy of an outmoded, expensive, intimidating and bureaucratically controlled process. 
 
 
You ran in the Illinois Republican gubernatorial primary in 2010. What did you take away from that campaign? Did that lead you to found your nonprofit? 
 
I ran against the entire incumbent political class ? Republicans and Democcrats. In Illinois politics, if anything happens for the good of the people, it's entirely by accident. The number one manufactured product in Illinois is corruption. I advocated a CSI-style "forensic audit" ? a deep, adversarial, follow-the-money audit to root out waaste, fraud and corrupt practices. The tagline slogan of my campaign was "every dime, online, in real time." It resonated on the trail, and I really believed in the message. 
 
OpenTheBooks.com was founded in 2011 to execute on my promise. We quickly realized that every state, locality and even the federal government needed transparency and oversight. Today, we are fully dedicated to our non-partisan, charitable mission to hold the entire political class accountable for their tax and spend decisions. Our mission is worthy of a lifetime legacy, and I'm not interested in running for office. 
 
 
Tell us about a few of the most eye-opening examples of outrageous local and state government expenditures that your organization has revealed.
 
We've published nine oversight reports on federal spending. We found Minister Louis Farrakhan is a "farmer" with $317,000 in federal farm subsidies. 
 
The Small Business Administration gave private country clubs, golf clubs, beach clubs and swim clubs $160 million in taxpayer-backed, low-interest loans since 2007. 
 
The EPA spent $92 million on high-end, luxury furniture during a period when 2,000 employees were downsized at the agency. 
 
In June, in an op-ed published on the editorial page of The Wall Street Journal, we showcased 67 non-military federal agencies who spent $1.5 billion on guns, ammunition and military-style equipment since 2007. Now, the number of federal officers (200,000+) with firearm authorization exceeds U.S. Marines (182,000). 
 
In July, ABC World News Tonight and Good Morning America showcased our discovery of $20 million in high-end artwork purchased by Veterans Affairs during a period when up to 1,000 veterans died waiting to see a doctor. 
 
We found the VA added 40,000 new positions (2012-2015), but fewer than 3,600 were doctors. Unfortunately, today 500,000 veterans are still wait-listed for a doctor's appointment. 
 
In Illinois, we discovered a pair of union lobbyists actually received $1 million lifetime teacher pensions after substitute teaching for one day in a public school, even after the legislature passed a law expressly designed to stop them. 
 
 
In June 2016, OpenTheBooks.com filed a Freedom of Information Act requesting more than 1,500 government bodies in Oregon to produce their expenditures, public employee salaries and pension information. What was your goal in asking for this information? Why are you and your organization interested in Oregon? 
 
Our goal is to capture and display online every dime taxed and spent at every level of government across America, including Oregon. The recent news headlines in Oregon were similar to those in Illinois: scandal in the governor's mansion. As quoted in ancient proverbs and by Michael Dukakis, "A fish rots from the head down." 
 
We are excited about the prospects in Oregon to enforce open records law and initiate a new era of citizen-led government reform. 
 
 
You recently wrote in The Register-Guard about asking Oregon's attorney general for a review of your request because "39 local units of government want to charge us more than $40,100 in special fees just to produce simple records of public employee salaries." Your organization does work in a lot of states; how unusual are these types of fees? 
 
Since 2011, our data capture specialists have filed over 125,000 Freedom of Information Act (FOIA) requests. We work with the biggest units of government in the country, including the United States Office of Personnel Management, City of New York, California Public Employees Retirement Systems (CALPERS), Comptroller of Texas, and approximately 40,000 smaller units across America. None of the larger governments have ever charged us a fee, and it's very rare for the smaller units to charge anything as well. 
 
The State of Oregon did not charge us a dime for the public employee salary file (2010-2015) and the state checkbook (2011-2015). But at the municipal level in Oregon, it's often "death by invoice." Over and over again, municipalities are trying to force us to pay for legal review and other fees. There should not be a "transparency tax" in Oregon or any state. (Review the entire FY2015 Oregon State checkbook by ZIP code on our interactive mapping platform.)
 
There's also another issue we'll ask the attorney general to clarify: the Public Employee Retirement System (PERS) rejected our request for salaries but fulfilled our request for the retirement annuities. We feel PERS erred. It's settled law that public employee salaries are of the public record. We feel our case is solid and will substantially increase the flow of public information. 
 
Of the 1,509 Oregon governmental units that you have asked to compile records of all government expenditures, salaries and pensions, and vendor transactions, how many have complied? How many have levied extreme fees (which is a violation of Oregon's open records law)? Is Lane County the worst offender with a fee of $23,000? 
 
We are not asking Lane County to lead the charge on openness and accountability ? only to follow the law, as has virtually every state and 600 locaal entities in Oregon to date. Currently, 600 units of Oregon government have produced a responsive record, and our teams are working with hundreds more units as they deliver data. Only about 43 units want to charge us an extreme fee, and we refuse to comply with this "transparency tax."
 
Out of the 125,000 FOIA requests that we've filed since 2011, Lane County is the all-time champion of the transparency tax ? trying to stick us with a $23,487 bill. In 2013, San Bernardino County in California wanted to assess a fee of $13,200 to produce its public salaries, but we've never seen a bill like the one from Lane County. 
 
Our request is for basic payroll information: Who is employed, and where do they work (the agency)? When did they start? How much did they make last year? What's their title? 
 
It is important that taxpayers be able to follow the money and see exactly where their money goes and to whom. This information must be produced when requested and should not take an outrageous sum of money to procure an electronic copy. After all, it's not their money. It's your money! 
 
Unfortunately, a Lane County commissioner, Jay Bozievich, recently posted blog comments that double down on the anti-transparency stance and misconstrued our request for public information. To clarify the record, we've opened the books on our request and subsequent email exchange with county officials. Readers can review our three attempts to persuade the county to comply with the law and the county's steadfast insistence to charge us $23,487. 
 
Let's be clear. Our salary record request doesn't take much time to fulfill and is a matter of settled law. 
 
 
According to a 2012 National Education Association study, Oregon ranks 14th in teacher compensation, yet the state routinely has one of the nation's worst high school dropout rates. In 2008, Oregon teachers unions spent $357 per teacher on political campaigns, the highest figure in the nation. By contrast, Colorado's teachers unions were second that year in political spending, at $157 per teacher. Are you surprised by the level of public employee union political dominance in Oregon? 
 
Across the political spectrum, from the Bernie Sanders left to the Donald Trump right, everyone is decrying a rigged political system. Have the public sector unions gamed the system for the personal gain of their membership in Oregon and set up an unholy pay-for-play relationship with politicians for more pay, perquisites and pensions? 
 
At this point, we have no idea. But, here's what we do know. All sides can't gainfully or credibly debate these critical public policy issues without hard data. Big data at OpenTheBooks.com will play a large role in the public square by quantifying metrics, benchmarking performance costs, and, ultimately, driving robust efficiencies. 
 
Back in 2008, we fought the public sector unions on salary and pension transparency in Illinois. Specifically, at the College of DuPage (COD) ? the ssecond largest college in the state ? it was a knockdown, drag-out bbattle to open the books on public salaries. Ultimately, we were successful and set the transparency standard. Then, by 2014, the teacher's union at COD was our ally in reining in waste, fraud and duplication. Together, we helped bring a new day to the college. 
 
 
You recently discovered that Oregon has 1,690 state employees receiving annual salaries of more than $100,000, costing taxpayers $258.3 million in payroll benefits and pension costs. Just six years ago, in 2010, Oregon had only 730 six-figure salaries in state government, costing taxpayers $117.5 million in compensation? Is there a correlation between political dominance and burgeoning public salaries? 
 
The new "minimum wage" for state government public employees is fast becoming six figures. In 2010, only 730 state employees made $100,000+, and today there are 1,690. The trajectory of state government pay is worrisome. For example, with two six-percent pay raises, an additional 1,300 Oregon state workers will join the $100,000+ salary club. 
 
Of course, escalating annual public salaries pad the lifetime pensions. The latest numbers displayed at OpenTheBooks.com from PERS show 1,853 retirees received $8,000 a month ($96,000/year) in 2015 ? up 50 percent from 1,227 retirees in 2012. >
 
In order for stakeholders to simply engage in the pay and pension policy debates, we need better information. For example, PERS refused to release retirement annuitants "last employer." Wouldn't you like to know which units of government conferred the most six-figure pensions? How about being able to track double dippers from retirement to their next public salary? Even in union-dominated Illinois, we are able to easily compile deeper and more useful information. 
 
 
Who is going to win this fight between your organization and those Oregon governments who don't want to comply with their own state's Freedom of Information Act? 
 
We are testing whether or not the law applies to public bodies. Can government in Oregon violate the law and hide its spending data from citizens? Unfortunately, just a few public bodies will create all kinds of excuses from "our accounting systems are old" to "it costs too much." They'll say, "It's already online," and it's not. 
 
We've heard it all before, and it's nonsense. Government must follow the law. Incompetence is not an excuse. "Where government spent our money" is the most important data set for oversight. It's our money and taxpayers deserve to see every dime. So Oregon, don't test our will and wallet; just get on with it. Join the transparency revolution!
 

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The Fourth Turning ? Trump's Moment in History?
 
Unlike most of America's political establishment, disciples of William Strauss and Neil Howe's 1997 book "The Fourth Turning" (a theory of generational politics in America) have no trouble understanding the political rise of Donald Trump. 
 
The authors divide their best-selling book of American history into 90-year cycles. These cycles consist of four 20- to 22-year generation periods, which renew themselves after the completion of the current cycle. The four periods of this repeating American generational history are: 1) the High, 2) the Awakening, 3) the Unraveling and 4) the Crisis. Guess which period, according to the authors, we are in now? The Crisis. Or in Trump-speak: "What the hell is going on in our country?"
 
Strauss and Howe describe the current full cycle as having begun with The High or First Turning in post-World War II America, a post-crisis era where American institutions were strong and respected, and individualism was weak. That era ended with the assassination of President Kennedy.
 
Here's how Wikipedia describes the Second Turning, or Awakening: "This is an era when institutions are attacked in the name of personal and spiritual autonomy. Just when society is reaching its high tide of progress, people suddenly tire of social discipline and want to recapture a sense of self-awareness, spirituality, and personal authenticity." In other words, the love generation and flower power of the 1960s and culminating in the tax revolts of the early 1980s.
 
After the Awakening comes the Third Turning, an Unraveling. "The mood of this era is the opposite of the High: Institutions are weak and distrusted, while individualism is strong and flourishing. America's most recent Unraveling was the long economic boom and Culture War, beginning in the 1980s and ending in the late 2000s." 
 
The Fourth Turning is the era we inhabit today: the Crisis. This is an era, according to the authors, "where institutional life is destroyed and rebuilt in response to a perceived threat to the nation's survival." This is the point that Donald Trump stressed over and over again during his hour-plus-long acceptance speech in Cleveland ? that AAmerica is in a crisis. And because of Trump's inimitable style, his point and his speech resonated quite thoroughly with the American people. 
 
It is also the point that Democrats most heavily ridiculed and distorted during their own convention the following week in Philadelphia, arguing over and over again that the Republican nominee, Donald Trump, had painted a "very dark and gloomy picture of America," one that had little or no resemblance to the truth. Tell that to authors Strauss and Howe, or to the 63 percent of Americans who watched his speech approvingly.
 
The central question of this election still hangs out there ? in spiite of what the media says about an almost certain Hillary victory ?? is Donald Trump the person whose one inherent political ability is to light the match and start the revolution, ala Sam Adams, Patrick Henry, George Mason? Is he the American political figure who can both identify the Crisis, and make the transition from revolutionary to leader and president, ala Thomas Jefferson, James Madison, George Washington, John Adams? 
 
Not every revolutionary has the temperament to stick around and govern after the revolution has been successful. In Cuba in the 1960s, Fidel Castro did; Che Guevara didn't. 
 
The underlying structure of this election ? the pathetic recovery annd slow growth, the harsh and sometimes brutal dislocation of technology/globalization, the conflagration of ISIS terrorism, the overweening political correctness of our times, and, of course, the serious, big time corruption of the Clintons ? all favor the challenger in 2016.>
 
Trump began the revolution by directly challenging the Republican Party and overthrowing Republican Party dogma of the last generation: free trade, supply-side economics, entitlement reform, lax immigration policies, and reckless and unsuccessful foreign interventions. Now, Trump has taken his revolution to the general election, but will he have the discipline and temperament to push it past the finish line in November? 
 
An Ohio poll this week shows Hillary leading Trump by only 43 to 39 percent ? and this after the Trump campaign has hit bottom and Hillary?'s has peaked. These should be alarmingly close numbers to her campaign.
 
If William Strauss and Neil Howe's theories of generation turnings are correct, then the man who identified the Crisis accurately, Donald Trump, should dominate the fall election. It's Trump's election, not Hillary's, to win or to lose. 
 
But if he wins, the elites, as Peggy Noonan recently noted in her Wall Street Journal column, will have never seen it coming ? too dissconnected to even notice that their nation is in Crisis, or too lazy to pick up a copy of Stauss and Howe's book. 
 
As for Trump, win or lose, the revolutionary figure always leaves his mark. 
 
Millennial Viewpoint
From a blogpost on OregonUpstart.com by Jacob Vandever 
 
Scrolling through my Facebook feed the other day, I spotted a sponsored post from Governor Kate Brown promoting an article she had written for the Huffington Post entitled "Republicans, Do What's Right: Disavow Trump." 
 
While I am not a huge fan of Trump, my immediate reaction was one of anger and disappointment. Where does an unelected governor, whose leadership to this point amounts to rubber stamping whatever Tina Kotek and the leftist special interests put on her desk, get the moral authority to chastise Republicans on their reactions to Trump?
 
When Brown does something about Oregon's schools being ranked at the bottom, addresses the problems with our unsustainable retirement system, or even finds a fix for our transportation infrastructure problems, then she can lecture me and other Republicans all she wants about Donald Trump. But it seems like Governor Brown is much more interested in scoring political points than in doing any actual governing. 
 
Instead of brokering a compromise to address our upcoming budget shortfall, Brown is more than happy to let the union-backed Our Oregon take the lead with the divisive Measure 97 that was crafted to be sold politically, not to be good tax policy.
 
Instead of doing something about the PERS crisis, it is clear that Brown would rather have us focus on passing "feel good" gun control measures. She made that apparent when she said, "Rampant gun violence has pitted our constitutional right to assemble, to do the ordinary things of daily life, against the right to bear arms in ways our country's founder could never have predicted."
 
Brown lectures us, "Every Republican across the country, whether in support or sitting in silent anguish, please listen to that inner voice telling you to disavow Donald Trump."
 
She does have experience in this area, because she spent a long time herself in "silent anguish" avoiding any position on Measure 97 and the Trans-Pacific Partnership. She seemed especially anguished when she dodged those questions on OPB last month. Brown was finally able to follow her conscious, after months and months of getting questioned on these policies, and ultimately (surprise!) came out in favor of the largest tax increase in Oregon's history.
 
How about this Governor Brown: Why don't you "do the right thing" and disavow Hillary Clinton for all the questionable foreign money she took in to her family's foundation during her tenure as secretary of state or her reckless use of a personal email server? 
 
But really, for the sake of our state, I would rather the governor just get back to work. 
 

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Sisyphus Had It Easy
By Philip J. Romero
 
Health care is a sector on the verge of absorbing one out of every five dollars of U.S. GDP -- truly the vampire squid sucking the life force from the economy. According to its partisans, Obamacare "fixed" this six years ago. Yet health "reform" is alive and well in the election campaign. 
 
Can anything shed light, not heat, on this existential economic issue? 
 
Stripped of the rhetoric, the vast majority of health policy commentary comes from one of the following vantage points: 
 
Demand side. Most conservatives believe that a number of dysfunctional policies inflate demand for health care and preclude patients from exercising the same discipline as they do in other markets. Exhibit A is employer-based third party payment, where insurers pay most of the cost of care. This insulates the consumer from the true impact of their choices and forces insurers to intrude in the doctor-patient relationship to protect their clients' (the employers') interests. The fact that employers can deduct the cost of health insurance premiums but individuals cannot (below 10 percent of gross income) tilts the field unfairly and drives further market distortions.
 
Many conservative health reforms emphasize making patients more financially accountable, such as through high deductible health plans. Conservatives also like equalizing tax deductibility, such as through tax advantaged health savings accounts. Liberals generally ignore the demand side entirely. A more common liberal trope is to mandate specific health benefits, which also drive up costs, by 50 percent or more. 
 
Supply side. American health providers earn at least twice as much as those in any other developed nation. Several types of therapies (e.g., pharmaceuticals) and diagnosis (e.g., imaging systems) are multibillion dollar businesses. Large sectors, including hospital chains and insurers, are highly concentrated with little real competition. I call it the "health cartel." Whole sectors, such as health insurers, add little value but face little real competition.
 
Most reform proposals skirt the supply side entirely. Many are major steps backwards, such as the prohibition on federal government price negotiation with pharmaceutical firms that was made part of the Medicare Part D enabling legislation in 2003.
 
The forces that have made health services such a well-compensated sector are as deep and pervasive as those that allowed the financial sector to capture more than half of all corporate profits in the final years before 2008. They cannot be alleviated through health reform alone, so most reform proposals ? liberal and conservative ? put it in the "tootoo hard" category and ignore it.
 
Access. When supply costs more than even heavily subsidized demand can afford, millions of patients fall through the cracks. Achieving universal "access" to health insurance has been a liberal rallying cry for most of a century, with both Bernie Sanders and Hillary Clinton proposing versions in this election cycle. Obamacare focused entirely on access, ignoring the root problems. 
 
But as we are discovering, many of the 10-plus million newly insured have only theoretical access. And the insurers who scored an expanded customer base under Obamacare (paid for by taxpayers through Medicaid) are finding it to be a very expensive gift. This is why most have withdrawn from Obamacare exchanges in the face of high unplanned costs: their new members are far sicker than they expected. The Affordable Care Act was designed as the last word in access, but it is imploding.
 
Appraising Clinton's and Trump's health proposals isn't simple in the present content-free electoral contest, but the above scheme can help you read between the lines. Clinton's proposals, like her abortive Hillarycare of a dozen years ago, graft mandates onto the current third-party, inflated demand system. She relies on ever more rules to make it difficult for insurers to exercise expenditure discipline. Clinton's interest in a "public option" ? offeringg a Medicare-type government funded system to any patient who chooses it -- can in theory create competition with insurers. But the public option's market share will depend enormously on whether it is priced correctly. Price it too low (as its advocates will push), and it will have an expanding caseload that will require metastasizing taxpayer subsidies. At present, Trump's plan is a few well-worn GOP slogans, following his pattern of explaining what he is against but not what he proposes instead. 
 
There is another way: Separate health finance from health policy. Allow states to meaningfully experiment. Let them use new financing mechanisms that leverage rising health costs against themselves ? leveraging liabiliities as a counterpart to the traditional leveraging of assets. Space limits preclude a full explanation, but a new book I published with Randy S. Miller, "Health Financing Without Deficits: Reform that Sidesteps Political Gridlock," details how this can work. It also elaborates on each party's enormous blind spots regarding truly effective reform. 
 
Our health care system is like a termite-infested house held together with ever thicker coats of paint. Too many proposals have accepted most of the rot, adding more faux reform. As Senator Sam Nunn is fond of saying, "Today's problems were yesterday's solutions." It is extremely unlikely that either ideological position has a complete answer. 
 

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