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01/14/2014

Cause of Action Finds Resolution for Marine Biologist in Case of Overcriminalization

FOR IMMEDIATE RELEASE                                                                                               CONTACT:      

January 13, 2013                                                                                             Annalisa Musarra, 202-499-4230

 

Cause of Action Finds Resolution for Marine Biologist in Case of Overcriminalization

                                                                                                       

SAN JOSE – Today, the sentencing hearing for Nancy Black was held in the U.S. District Court for the Northern District of California before Judge Edward Davila, bringing an end to a more than seven-year-long investigation and prosecution in the case of United States v. Black.

Ms. Black is represented by Cause of Action (CoA), a government accountability organization, and by attorneys Mark Vermeulen and Lawrence Biegel.

The government’s original charges could have resulted in up to 27 years in prison, a $700,000 fine and forfeiture of her research vessel. However, Ms. Black’s defense team was able to resolve the case through a no-jail plea agreement in which Ms. Black pleaded guilty to a single misdemeanor charge of violating a MMPA regulation prohibiting “feeding” for which she will receive a $12,500 fine, 3 years of probation, and 300 hours of community service.

Ms. Black, a well-respected and highly-esteemed marine biologist whose research focuses on the feeding habits of killer whales, is the first person to be criminally charged with violating a Marine Mammal Protection Act (MMPA) regulation prohibiting feeding marine mammals in the wild. Every other violation of this regulation resulted in relatively modest fines or, in a recent case with far more egregious facts, forfeiture of an old boat.

Dan Epstein, Cause of Action’s executive director, said:

“By singling out a valued and well-respected member of the scientific community for prosecution when more significant violations of the Marine Mammal Protection Act regulation prohibiting feeding resulted in nothing more than small civil fines, Ms. Black’s case illustrates how the power of the federal bureaucracy can affect the lives of hard-working Americans. Ms. Black’s case is a cautionary tale to those who believe the administrative state is benign; when power is unchecked it becomes unbridled and so individuals and small businesses – not the politically well-connected and powerful – often end up as victims of its abuse.”

Nancy Black said:

“I am extremely relieved that this whole ordeal is finally coming to a close. My work is very important to me, and I look forward to returning to my passion of studying marine mammals without the distractions that I have had during this case. I am very grateful for the support I’ve received from the community as well as the help of Cause of Action and my entire legal team.”

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Annalisa Musarra, annalisa.musarra@causeofaction.org.

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01/6/2014

Arkansas Mom Takes on Big Government

FOR IMMEDIATE RELEASE                                                                                                                         CONTACT:   

                                             Adam Temple, 202-630-3532

                                             Mary Beth Hutchins, 202-499-4232

Arkansas Mom Takes on Big Government

The Department of Labor’s attempt to redefine employees is met with a lawsuit from Cause of Action on behalf of consignment company Rhea Lana’s

WASHINGTON – Cause of Action (CoA), a government accountability organization, filed a lawsuit today against the Department of Labor (DOL) on behalf of Rhea Lana, Inc. and Rhea Lana’s Franchise Systems, Inc. (jointly, “Rhea Lana’s”), a national children’s consignment event company, over the DOL’s attempt to ban volunteers at for-profit enterprises.  Should the DOL’s actions stand it could cripple not only Rhea Lana’s but also the entire consignment industry on which millions of Americans rely.

Cause of Action’s Executive Director, Dan Epstein stated, “This illogical move by the Department of Labor demonstrates just how out-of-date their regulations are and how far they are willing to go to shut down free enterprise.  We are facing a government that is essentially telling Americans:  we want to meddle in the minute details of how and where you volunteer. Thousands of entities operate with willing volunteers and to single out Rhea Lana’s is arbitrary, outside the law and damaging to families and entrepreneurs across the country.”

Rhea Lana’s hosts consignment sales in numerous cities that allow parents and other family members to sell children’s clothing and items to other families. Consignors keep approximately 70 percent of the profits generated from their items, and Rhea Lana’s keeps 30 percent.  The small family business has grown to include sales in 23 states across the country.  Consignors assist at sales events in exchange for the option to shop early. Given the tough economic reality facing many parents with young children, shopping for affordable, quality children’s items at Rhea Lana’s events has led to overwhelmingly positive experiences for many families.

In January of 2013, DOL commenced an investigation and concluded, despite the fact there were no apparent complaints from parents and other participants, that consignment event co-venturers were “employees” under the Fair Labor Standards Act.

The suit, filed in the U.S. District Court for the District of Columbia, argues that the DOL acted arbitrarily and outside the law when it classified Rhea Lana’s co-venturers as employees under the Fair Labor Standards Act (FLSA). Cause of Action seeks a declaration that Rhea Lana’s volunteers are not employees under the FLSA and an injunction prohibiting the DOL from bringing action against the company.

“For years we have received overwhelming support from the families who are trying to save money and provide for their children through our sales,” said Rhea Lana Riner, the entrepreneur and founder of Rhea Lana, Inc. “Yet now we find ourselves having to defend how moms choose to use their personal time to benefit their families.  For the government to step in and overregulate our business and our industry just makes no sense.  We’re fighting back to protect our business and the families we serve.”

“DOL erred in applying a categorical ban against volunteerism in this context,” stated Reed Rubinstein, senior vice president of litigation at Cause of Action.  “It should have applied the Supreme Court’s ‘economic realities’ test, which requires the agency to consider all relevant facts and circumstances when determining the applicability of the FLSA.  The economic realities of Rhea Lana’s consignment events do not create an employee-employer relationship between Rhea Lana’s and its volunteers.”

The Complaint for Declaratory and Injunctive Relief can be read in its entirety here. The government has 60 days to file a response.

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

About Rhea Lana’s:

Founded by Rhea Lana Riner in her living room 16 years ago and headquartered in Conway, Arkansas, Rhea Lana’s Children’s Consignment hosts semi-annual sales. With Arkansas roots, Rhea Lana’s Franchise Systems, Inc. is rapidly growing with 69 locations in 23 states. The company is the first consignment sale business in the country to offer on-line management and real time tracking of merchandise through a computerized inventory system and a convenient mobile application. For more information, visit www.rhealana.com.

 

 

To schedule an interview concerning the litigation, contact Adam Temple, temple@jdafrontline.com, 202-630-3532.

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12/17/2013

Cause of Action responds to resignation of DHS Deputy IG Charles Edwards

Cause of Action, a government accountability group which has investigated Department of Homeland Security (DHS) Deputy Inspector General (IG) Charles Edwards, issued the following response to his resignation.

Executive Director Dan Epstein:

“Cause of Action has investigated Charles Edwards for two years, working with information from credible insiders, and filing a FOIA request for records related to Edwards’ misconduct on March 27, 2013, which DHS OIG ignored, prompting us to sue. Our lawsuit ultimately led to the receipt of documents revealing nepotism, mismanagement and the existence of several internal complaints against Edwards, compelling us to ask the President to remove him from office. Cause of Action sees the failure of the Administration to hold Edwards accountable and Edwards’ resignation, less than three days before a Senate hearing, as a cowardly excuse to avoid answering difficult questions about allegations of his abuse and misconduct, some of which may rise to violations of the law, in the Inspector General office.”

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12/16/2013

CoA requests investigation of Sen. Harry Reid, USCIS in EB-5 abuse

In light of Senator Harry Reid’s (D-NV) expected nomination announcement of Alejandro Mayorkas as Deputy Secretary of the Department of Homeland Security (DHS), Cause of Action (CoA) sent a request for investigation to Chairwoman Barbara Boxer (D-CA) of the U.S. Senate Select Committee on Ethics, calling for the investigation of Senator Reid’s communications with U.S. Citizenship and Immigration Services (USCIS) officials and the potential fast-tracking of EB-5 immigrant investor applications.

CoA is continuing to investigate EB-5 program abuse, and just last week, we wrote to Chairman Issa of the House Oversight and Government Reform Committee urging the committee to examine USCIS’ abuse of the EB-5 program.

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12/11/2013

Statement: Cause of Action on Mayorkas’ Pending Deputy Secretary Nomination

Cause of Action, a government accountability group, sent a letter to Chairman Darrell Issa of the House Committee on Oversight and Government reform urging the committee to examine the U.S. Citizenship and Immigration Services’ (USCIS) oversight of the EB-5 visa Pilot Program. Cause of Action issued the following statement in response to the Senate Homeland Security and Governmental Affairs Committee pending nomination for Alejandro Mayorkas for Deputy Secretary of the Department of Homeland Security (DHS) :

Executive Director Dan Epstein:

“Just this week, Cause of Action sent a letter to the House Committee on Oversight and Government Reform urging the Committee to examine the USCIS’ administration of the EB-5 visa Pilot Program, which is under the oversight of Alejandro Mayorkas. Whistleblowers revealed that Mayorkas fast-tracked visa applications through the EB-5 program, which is being used to finance crony companies while failing to deliver on job creation.  In light of these concerns and the current DHS OIG investigation of Mayorkas, it was irresponsible for the Senate Homeland Security and Governmental Affairs Committee to vote on Mayorkas’ nomination for Deputy Secretary of the DHS before DHS’s internal investigation is complete.”

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12/9/2013

Report: Forest City Enterprises Profits Despite Legal Violations

FOR IMMEDIATE RELEASE                                                                                                 

CONTACT:      

Jamie Morris, 202-499-2425

 

Report: Forest City Enterprises Profits Despite Legal Violations

Cause of Action calls on Congress to investigate Forest City Enterprises and lax oversight at USCIS, DOJ 

WASHINGTON –Cause of Action (CoA), a government accountability organization, today released “Unfair Enrichment: How Forest City Enterprises Acts Above the Law,” the third and final installment of the three-part investigation, “Political Profiteering: How Forest City Enterprises Makes Private Profits at the Expense of America’s Taxpayers,” exposing how New York State manipulated census data to benefit Forest City Enterprises’ (FCE) New York subsidiary Forest City Ratner (FCR) and the New York City Regional Center (NYCRC).  With this data, FCR and the NYCRC enticed foreign investors into a cash-for-visas program, all while downplaying the risk of investment and exaggerating job creation predictions.  Further, the Department of Justice (DOJ) failed to prosecute FCR executives who bribed city council members to approve another FCR development in project in Yonkers, N.Y.

CoA’s nearly two-year investigation found that executives of FCR played illicit roles in the 2005-2006 bribery scandal that resulted in the federal conviction of two local politicians in Yonkers, N.Y. for securing approval for FCR’s Ridge Hill development project.  The DOJ failed to prosecute, despite being alerted by a 2010 letter from Ranking Member of the House Committee on Oversight and Government Reform Darrell Issa (R-CA) and Ranking Member of the House Judiciary Committee Lamar Smith (R-TX) that raised concerns that “political favoritism” guided the DOJ’s decision “not to pursue legal charges against Forest City Ratner and its employees.”

Dan Epstein, Cause of Action’s executive director commented:

“Our investigation uncovered that not only did FCR violate the law and engage in political profiteering, but the DOJ turned a blind eye to FCR’s criminal activity while the USCIS failed to hold New York State accountable. We can’t rely on these federal agencies to properly apply their own rules and protect the interests of taxpayers, which is why Congress should intervene and investigate these practices.”

Findings from the report include:

  • The New York Department of Labor (NYDOL) and the Empire State Development Corporation (ESDC) manipulated census data in order to create a “targeted employment area” (TEA) for the New York City Regional Center (NYRC) and FCR in violation of U.S. Citizenship & Immigration Services (USCIS) regulations.
  • FCR and NYRC, with the cooperation of New York state elected officials, misleadingly advertised the Atlantic Yards Project to potential investors by keeping the actual purpose of EB-5 funding ambiguous and exaggerating job creation predictions.  EB-5 investors were also misled as to the risk of their investing in the Atlantic Yards project—a potential Federal securities violation.
  • The DOJ failed to prosecute FCR executives who bribed Yonkers City Council Member Sandi Annabi.  FCR executives covered up payments to Yonkers Republican Party Chairman Zehy Jereis under the guise of a consulting contract for “retail hunting” in order to protect themselves from federal criminal liability when, in fact, Jereis’s consulting contract was in exchange for Annabi’s vote approving FCR’s Ridge Hill Project.
  • FCE defended and benefited from eminent domain seizures for private development in California and New York, and spent a combined $350,000 on California ballot initiatives in 2006 and 2008 to back sweeping eminent domain measures to benefit private developers.

In light of these findings, CoA wrote to Chairman Issa of the House Oversight and Government Reform Committee urging the committee to examine USCUS’ treatment of states’ TEA designations and determine whether undue political influence affected DOJ’s decision not to prosecute FCE.

To access our letter, click here. 

To access Unfair Enrichment: How Forest City Enterprises Acts Above the Law, click here.

To access parts one and two of the investigation, click here.

About Cause of Action:

Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit www.causeofaction.org.  

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins,  202-400-2721 or Jamie Morris, jamie.morris@causeofaction.org.

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12/5/2013

Cause of Action Statement on Federal Trade Commission’s Request for More Authority

FOR IMMEDIATE RELEASE

CONTACT: Kevin Schmidt, 202-499-2414

kevin.schmidt@causeofaction.org

Cause of Action Statement on Federal Trade Commission’s Request for More Authority

WASHINGTON – Cause of Action (CoA), a government accountability organization, issued the following statement from Senior VP of Litigation Reed Rubinstein regarding the Federal Trade Commission’s request for Congress to pass legislation expanding the commission’s oversight and jurisdiction:

“For decades the FTC has been asking Congress for more authority and when denied the expanded jurisdiction, they choose to act anyway, defying lawmakers. The agency has shown a propensity to engage in burdensome and malicious investigations, including their most recent actions against LabMD involving data security, despite the fact Congress denied their request in 2000 and has never approved it.”

CoA is also defending LabMD against a complaint brought by the FTC based, in part, on allegations that a third party was able to obtain data from LabMD’s computers through the peer-to-peer (P2P) file sharing program LimeWire. LabMD argues that the FTC lacks the authority to regulate patient-information. The FTC has attacked LabMD without publishing any data-security regulations or standards and with the knowledge that LabMD’s data security practices are regulated by the U.S. Department of Health and Human Services (HHS).  HHS has never suggested that LabMD violated any patient information data-security regulations or requirements.

Last month, CoA filed a Complaint for Declaratory and Injunctive Relief in the U.S. District Court for the District of Columbia, on behalf of LabMD, seeking to stop the Federal Trade Commission’s (FTC) extralegal abuse of government power.

The lawsuit along with the previous filings on behalf of LabMD, can be found here.

About Cause of Action:

Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit www.causeofaction.org.

About LabMD:

LabMD is a cancer detection facility that specializes in analysis and diagnosis of blood, urine, and tissue specimens for cancers, micro-organisms and tumor markers. You can find out more about their battle with the FTC here.

 

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Kevin Schmidt, kevin.schmidt@causeofaction.org. 

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