April 19, 2016


News and Views


http://www.nbcnews.com/politics/barack-obama/gay-rights-worker-rights-new-battles-between-blue-red-america-n552716

Gay Rights and Worker Rights: The New Battles Between Blue and Red America
by PERRY BACON JR.
APR 11 2016, 5:00 AM ET

Photograph -- Meridian resident Nykolas Alford waves a rainbow-colored flag designed with the U.S. flag during a Human Rights Campaign protest of House Bill 1523 on the Mississippi State Capitol steps in Jackson, Miss., on March 29. Justin Sellers / The Clarion-Ledger via AP
Play -- Battle lines drawn as Mississippi 'religious freedom' bill becomes law 2:18
Related: North Carolina Gov. Pat McCrory Calls LGBT Criticism 'Political Theater'
Related: California, N.Y. Minimum Wage Hikes a Win for Populist Movement
Play -- Pressure Mounts Amid North Carolina's New anti-LGBT Law 2:33
Related: Mississippi Governor Signs 'Religious Freedom' Bill Into Law
Related: North Carolina Starts to See Economic Damage From Anti-Bias Law


States and cities are adopting sweeping bills on a number of major hot-button issues, from gay rights to minimum wage increases — broad and controversial actions that are at times creating heightened tensions between different localities.

After North Carolina and Mississippi adopted new laws that deny some legal protections to people who are gay, lesbian and transgender, Democratic mayors and governors in Vermont, Washington, D.C., Seattle, and New York announced bans on non-essential, government-funded travel to those conservative-leaning states.

Republicans in North Carolina were acting in part to preempt a law adopted by the Democratically-controlled city council of Charlotte that allows transgender people to use restrooms that correspond with the gender they identify with, as opposed to the one on their birth certificates.

The provisions adopted by state legislatures, cities and governors over the last month illustrate that the core divide between blue states and red states remains firmly entrenched, even as the unusual, insurgent candidacies of Bernie Sanders and Donald Trump have reshuffled political coalitions at the national level. Blue states are strongly pushing moves aimed at boosting pay and benefits for low and middle-class workers, while red states continue to back limits on abortion and gay rights.

The legislation also illustrates also [sic] how states, not the federal government, are increasingly the place where major policy initiatives are being adopted, because of the divide between President Obama and congressional Republicans in Washington. Officials in local government are already executing some of the ideas that candidates like Sanders, Trump and Hillary Clinton are promising if elected president.

"It is all an example of the kind of expressive politics that is so prevalent. The purpose of all of this isn't policy — or even a good business decision — but to make a statement," said Bill Bishop, whose 2008 book "The Big Sort" argues Americans are increasingly moving to areas where their neighbors are politically aligned with them.

"In a world where identity construction is a primary consideration of everything, more and more politics and neighborhood choice is about expressing who you are," he added.

The Democratic governors of California and New York, two states where more than one-sixth of Americans live, adopted laws last Monday raising the minimum wage in their states to $15, more than double the federal $7.25. New York Gov. Andrew Cuomo also signed a provision that requires businesses to provide 12 weeks of paid leave for individuals after the birth of a child or to care for an ailing relative, one of the longest leave provisions in the country.

The city of San Francisco last week enacted the first paid leave program in the country that guarantees workers 100 percent of their salaries.

Most paid leave programs provide some percentage of a worker's pay. The state of New York will offer workers 67 percent of their pay in the new leave system. (Federal law is much less generous. Most American workers are entitled to 12 weeks of unpaid leave after the birth of a child.)

Both Democratic presidential contenders, Clinton and Sanders, have proposed higher minimum wages, expanded protections for gay and transgender people and mandatory paid leave programs. Obama has embraced these ideas as well. All three hailed the provisions in New York and California, with Clinton attending a rally with Cuomo after the signing of the minimum wage bill.

And Democrats, both in their words and their boycotts, are forcefully denouncing those in red states who aren't fully embracing gay and transgender rights.

"They make absolutely no sense," Vice President Biden told NBC News Thursday about the new laws in North Carolina and Mississippi, as he held events in Las Vegas as part of his campaign to reduce sexual assaults on college campuses.

"And I think you're going to see those states have to rethink it, because American business is getting much more sophisticated and much more open, and I think it's going to hurt the citizens in the states," Biden added, alluding to companies like PayPal suggesting they will no longer do business in states that pass laws that are viewed as being discriminatory to gay or transgender Americans.

But these pushes for much higher minimum wages and broad paid leave programs are almost exclusively in blue states, with conservatives actively opposing such policies. The minimum wage and paid leave policies in New York are now much different than its border state New Jersey, which is run by Republican Gov. Chris Christie.

The minimum wage in New Jersey is $8.38 an hour and the state offers roughly 67 percent of employee pay for six weeks of leave.

In contrast, red states are acting on the cultural issues that Republicans in Congress, the Supreme Court and even candidates like Trump appear to be either retreating from or downplaying.

A new law in Indiana bans abortions if they are sought because of the race, gender, or medical diagnoses of the fetus, meaning that a woman could not have an abortion because her baby were likely to have an illness like Down syndrome. A new law in Utah requires women who are having abortions after 20 weeks of their pregnancies to use anesthesia, as lawmakers in the state argued the potential baby is being injured during the abortion process and therefore should receive some kind of relief.

The LGBT provisions adopted in Mississippi and North Carolina show that cultural conservatives in those states will not be cowed by the growing acceptance, in more liberal areas of the country, of people who are gay or transgender.

The U.S. Supreme Court's sweeping ruling last year outlawing gay marriage bans, authored by conservative-leaning justice Anthony Kennedy, appeared to be putting the country on a path where the rights of LBGT people would be continually expanded, as had been for women and blacks in early generations.

Many businesses, particularly in liberal Silicon Valley, warned both North Carolina and Mississippi that they would refuse to travel to or add jobs in those states if bills were adopted.

The states ignored these threats.

Mississippi's new law list professionals, such as photographers and those who make floral arrangements, who should be protected from any kind of legal action if they refuse to participate in same-sex marriages. The law includes a preamble that says Mississippi is extending legal protections to those who believe "marriage is between one man and one woman," and "sexual relations are properly reserved to such a marriage."

North Carolina's law bars cities from adopting new protections for gay and transgender people, and requires students in schools to use the bathroom of whatever gender is on their birth certificates.

"If our action in keeping men out of women's bathrooms and showers protected the life of just one child or one woman from being molested or assaulted, then it was worth it," said North Carolina Lt. Gov. Dan Forest.

Mississippi Gov. Phil Bryant said he embraced his state's bill to "protect sincerely held religious beliefs and moral convictions."

Some more moderate Republicans have suggested that these laws may be misguided.

"I don't want to force people to violate their deeply-held religious convictions, but we'd have to see what that's all about. I wouldn't have signed that law, from everything I know," Ohio Gov. and 2016 GOP candidate John Kasich told CBS News this weekend.

The North Carolina law, in a less-noticed provision, also prevents cities in the state from raising their minimum wages above the state's $7.25 rate. North Carolina conservatives, by adopting that policy, will stop more liberal cities like Charlotte or Chapel Hill from following New York and California in hiking the minimum wage.

"You have cities and regions that are mismatched," says Bishop. "Chapel Hill, Durham and Asheville in North Carolina. The Central Valley and Orange County in California."

These state actions and their resulting divides are likely to continue. A number of states in the South are considering measures to defend religious freedom in ways that allow religious organizations and individual believers not to offer services or hire people who are gay, lesbian or transgender. Other conservative-leaning states are proposing bills to push back against what they view as a growing secularization of American society, with Tennessee Republicans proposing a bill to make the Bible the state's official book.

Liberals meanwhile are trying for minimum wage increases on conservative turf. "Fight for 15," the labor union-backed group pushing to raise the minimum wage to $15 across the country, is planning campaigns in Florida, Illinois and Ohio, three states run by GOP governors.



“The legislation also illustrates also [sic] how states, not the federal government, are increasingly the place where major policy initiatives are being adopted …. "It is all an example of the kind of expressive politics that is so prevalent. The purpose of all of this isn't policy — or even a good business decision — but to make a statement," said Bill Bishop, whose 2008 book "The Big Sort" argues Americans are increasingly moving to areas where their neighbors are politically aligned with them. …. The Democratic governors of California and New York, two states where more than one-sixth of Americans live, adopted laws last Monday raising the minimum wage in their states to $15, more than double the federal $7.25. New York Gov. Andrew Cuomo also signed a provision that requires businesses to provide 12 weeks of paid leave for individuals after the birth of a child or to care for an ailing relative, one of the longest leave provisions in the country. …. A new law in Indiana bans abortions if they are sought because of the race, gender, or medical diagnoses of the fetus, meaning that a woman could not have an abortion because her baby were likely to have an illness like Down syndrome. A new law in Utah requires women who are having abortions after 20 weeks of their pregnancies to use anesthesia, as lawmakers in the state argued the potential baby is being injured during the abortion process and therefore should receive some kind of relief. …. The U.S. Supreme Court's sweeping ruling last year outlawing gay marriage bans, authored by conservative-leaning justice Anthony Kennedy, appeared to be putting the country on a path where the rights of LBGT people would be continually expanded, as had been for women and blacks in early generations. …. Some more moderate Republicans have suggested that these laws may be misguided. "I don't want to force people to violate their deeply-held religious convictions, but we'd have to see what that's all about. I wouldn't have signed that law, from everything I know," Ohio Gov. and 2016 GOP candidate John Kasich told CBS News this weekend. …. The North Carolina law, in a less-noticed provision, also prevents cities in the state from raising their minimum wages above the state's $7.25 rate. …. Other conservative-leaning states are proposing bills to push back against what they view as a growing secularization of American society, with Tennessee Republicans proposing a bill to make the Bible the state's official book.”


This is interesting. People are actually moving out of their homes into areas with more politically and socially compatible populations. I wonder how many people are worried, as I have been, by the increasing anger along cultural lines. Will we have a new Civil War?? As for the Tennessee Republicans proposing a law to make the Bible their “official” book, that should be against the law. I hope someone will sue and carry it up to the Supreme Court – maybe the ACLU. I’m proud of John Kasich for speaking out against the “religious freedom” laws that are popping up across the country. Maybe he’ll end up joining the Democratic Party; or a new third party made up of some from both the Dems and the GOP, as well as Independents like Bill Maher.



http://www.cbsnews.com/news/gop-congressman-ill-poison-myself-if-cruz-wins/

GOP Congressman: I'll poison myself if Cruz wins
By SOPAN DEB CBS NEWS
April 19, 2016, 11:10 AM

Play VIDEO -- What does Trump Campaign shakeup mean?


If Texas Sen. Ted Cruz becomes the Republican nominee, Rep. Peter King, a fellow Republican, might take the route of ancient armies when faced with defeat: poison.

"Well, first of all, in case anybody gets confused, I'm not endorsing Ted Cruz. I hate Ted Cruz," King said on MSNBC. And not to put too fine a point on this - King is a Republican.

"And I think I'll take cyanide if he got the nomination," King finished.

Ouch.

King has been an outspoken critic of Cruz, even at point saying, "Any New Yorker who even thinks of voting for Ted Cruz should have their head examined."

Does this mean King is going to vote for the overwhelming favorite and native son, business mogul Donald Trump, in Tuesday's New York primaries? Not quite.

"I think you are going to see Donald Trump scoring a big victory tonight," King said. "I do not endorse Donald Trump. In fact, I actually voted by absentee ballot for John Kasich. I'm not endorsing John, but I voted for him to really send a message."

To be clear, it's not an endorsement of the current Ohio governor. It is just a vote, the same rationale former New York mayor Rudy Giuliani used in his non-endorsement and vote for Trump.

When pressed by MSNBC hosts why he wouldn't just come out and endorse Kasich, King said, "First of all, it's not a fear, I endorsed Marco Rubio and he lost and I stopped that now. With John Kasich, if I thought that John Kasich had a viable chance, I'd come out and endorse him. But I want to keep my powder dry because this may go to the convention."

King also had some not so subtle criticism of Trump.

"The likelihood is Donald Trump is going to be at the nomination. I want Donald Trump to know that if he wants to support our Republicans, he's gotta get more substance, he's got to really learn what he's talking about."

King continued.

"He can't just be talking off the top of his head and making reckless charges, so really what I'm saying is that also, it's a good suggestion that maybe John Kasich would be a good choice of Vice President."

Trump is the overwhelming favorite to win the New York primary on Tuesday and to take home most of the 95 delegates at stake. The latest CBS battleground tracker has Trump at 54 percent in the state, with Cruz at 21 percent, followed by Kasich at 19 percent.



“If Texas Sen. Ted Cruz becomes the Republican nominee, Rep. Peter King, a fellow Republican, might take the route of ancient armies when faced with defeat: poison. "Well, first of all, in case anybody gets confused, I'm not endorsing Ted Cruz. I hate Ted Cruz," King said on MSNBC. And not to put too fine a point on this - King is a Republican. "And I think I'll take cyanide if he got the nomination," King finished.” …. "I think you are going to see Donald Trump scoring a big victory tonight," King said. "I do not endorse Donald Trump. In fact, I actually voted by absentee ballot for John Kasich. I'm not endorsing John, but I voted for him to really send a message."…. "The likelihood is Donald Trump is going to be at the nomination. I want Donald Trump to know that if he wants to support our Republicans, he's gotta get more substance, he's got to really learn what he's talking about." …. "He can't just be talking off the top of his head and making reckless charges, so really what I'm saying is that also, it's a good suggestion that maybe John Kasich would be a good choice of Vice President."


Lots of people, including some Republicans, think Trump is full of hot air, and foul smelling hot air at that. Somebody like Kasich who shows good common sense and a more benign outlook on our society is a hundred percent better than either Trump or Cruz, only I’d like to see him run for President and not Vice President. As for Rep. King taking a dose of cyanide, I doubt that. It does make good rhetoric, though, given the overall tenor of the Republican campaign so far. Hillary and Bernie have gotten heated, but not as in as ridiculous a way as Trump and Cruz. If you’re wondering why I included Cruz in that comment, it’s because of his threat to “bomb the Middle East until the sand glows in the dark.” That not only offends people of good character, it sounds like an oblique reference to a nuclear bomb. We really can’t have that kind of talk.



http://www.dailykos.com/story/2015/12/8/1457863/-Ted-Cruz-vows-to-carpet-bomb-ISIS-until-he-finds-out-if-sand-can-glow-in-the-dark

Ted Cruz vows to 'carpet bomb' ISIS until he finds out 'if sand can glow in the dark'
By Hunter
Tuesday Dec 08, 2015 · 6:30 PM EST

It's getting increasingly difficult for anyone to argue that the current Republican field is anything but a collection of maniacs pandering to a collection of lunatics.

"We will carpet bomb [ISIS] into oblivion. I don’t know if sand can glow in the dark, but we’re going to find out," [Ted Cruz] said at the Rising Tide Summit in Cedar Rapids.

For those of you who have been living in a cave or bunker since, say, the 1950s—and I promise, none of us would blame you—bomb them until they glow is the mating call of the apocalyptic nuclear warbird. Drab plumage, but they've got quite the pipes for such tiny things.

This is the part where we are supposed to say that no, of course a sitting Republican senator and would-be keeper of the nuclear button is not really suggesting that he would use nuclear bombs to dislodge ISIS from the Syrian cities and towns under their control. He is just implying the ultimate war escalation for momentary political effect, because he knows it makes certain members of his crowd orgasm in their seats. He is not really an unhinged lunatic who comes to nearly all of his own political beliefs by taking the most batshit crazy thing anyone else ever said, then doubling down on it.

And truly, what sort of lunatic would you have to be to hear all those various batshit crazy things and think to yourself, wow, this batshit crazy man is making some solid points and should be placed in a position of power?

Cruz received some of the loudest applause during his speech for saying the U.S. would not enforce Sharia law. He also earned cheers from the audience for calling multiple times to abolish the Internal Revenue Service.

I'm beginning to think we may have been overestimating the intelligence of the Republican voter all along.

I'm also beginning to think that the eventual Iowa caucus winner will be decided by an onstage belching contest.



EXCERPTS -- “This is the part where we are supposed to say that no, of course a sitting Republican senator and would-be keeper of the nuclear button is not really suggesting that he would use nuclear bombs to dislodge ISIS from the Syrian cities and towns under their control. He is just implying the ultimate war escalation for momentary political effect, because he knows it makes certain members of his crowd orgasm in their seats. …. I'm also beginning to think that the eventual Iowa caucus winner will be decided by an onstage belching contest.”


If you thought nobody would ever say things like this, you’re wrong. I always read Daily Kos because they are invariably true Democrats, both economically and socially, and because they are entertaining. They also usually have a really valid point to put forth. The idea that any political candidate of any stripe could possibly “abolish the IRS” is absolutely ridiculous, so I’m not worried much about Cruz, unless the NeoNazi Right should actually win enough elections to make a total takeover of our government or totally infiltrate our police departments and military, and I don’t think they will, at least for a long, long time. If that happens I’ll put a bedroll and lots of water and canned food into my Honda and drive across the border to Canada.



http://www.cbsnews.com/news/lawsuit-against-lunada-bay-boys-surfers-for-threats-and-violence/

Lawsuit seeks to end "gang mentality" of infamous California surfers
CBS NEWS
April 19, 2016, 6:56 AM


A new lawsuit claims a group of local surfers is harassing outsiders who try to ride the waves at a highly desirable piece of surfing real estate south of Los Angeles.

The area is officially open to the public, but stories of confrontations in Lunada Bay go back decades, reports CBS News correspondent Carter Evans.

"You guys lost or something? Stay away from this area, this bay right here."

That's the welcome two British reporters from the Guardian newspaper got when they tried to surf at Lunada Bay last May. They went undercover with video, and were warned about being taunted by the "younger kids."

Lunada Bay is known for its breathtaking views and an infamous group of local surfers - known as the "Bay Boys" - who fiercely protect their precious surf spot.

Last October, a woman recorded video of a surfer getting punched and turned it over to police. These were not isolated incidents.

Cory Spencer is an alleged victim. He is also a police officer.

"I was ran over in the water. I was injured," Spencer said. "I finally got up the courage after 32 years of surfing to come and surf here and the rumors came alive and it's time to end this gang mentality here. This is a gang. They do meet all those definitions. There's no denying that."

Spencer and the Guardian's undercover video are now at the center of a lawsuit that's seeking a gang injunction against the Bay Boys. It would ban them from coming to Lunada and fine them for preventing access to a public beach.

"This beach has been stolen from the public," said attorney Vic Otten, who represents Spencer and another surfer suing the Bay Boys. He is confident he has the evidence to prove that they are a gang.

"Rarely do lawyers have evidence like the tape from the two British guys that's cited to my lawsuit," Otten said.

He also has video from 1995 when a local news station captured one of the Bay Boys saying, "You won't surf here again, boy."

The lawsuit claims local police have done little to stop the problem. The Guardian video shows the response the British reporters got from the Palos Verdes Estates police after their encounter.

"We know all of them. They're infamous around here," an officer says. "If you felt uncomfortable, you know, then don't do it."

In a statement, the city of Palos Verde Estates told "CBS This Morning" that the police department "takes seriously its public safety mission and has, and will continue to monitor and enforce the laws in Lunada Bay."

When "CBS This Morning" took our cameras there, a local officer stopped by with some advice.

"We can't send officers down there all the time, you know... but if something happens, you have a cell phone too," an officer said.

"I would never tell someone you might have to protect yourself or you might get hurt. I would try to take care of the problem, so you don't. That's what we're supposed to do, right?" Spencer said.

We tried to contact the defendants in the lawsuit, but none of them wanted to talk.

But many who live near Lunada Bay say the lawsuit is blowing everything out of proportion.

"It's not a gang, it's not a gang. You have a couple of bad apples out here, causing trouble," said resident Frank Ponce. "Get rid of the few bad apples."

But Otten disagrees.

"It's not a few - there's easily 40 bad apples and probably more," Otten said.

We watched as one of the eight defendants currently named in the suit was served with court papers.

Otten said he plans to add more defendants to the suit in the coming weeks and is seeking class action status - a powerful legal tool he hopes will break up the Bay Boys for good.



“That's the welcome two British reporters from the Guardian newspaper got when they tried to surf at Lunada Bay last May. They went undercover with video, and were warned about being taunted by the "younger kids." Lunada Bay is known for its breathtaking views and an infamous group of local surfers - known as the "Bay Boys" - who fiercely protect their precious surf spot. …. But many who live near Lunada Bay say the lawsuit is blowing everything out of proportion. "It's not a gang, it's not a gang. You have a couple of bad apples out here, causing trouble," said resident Frank Ponce. "Get rid of the few bad apples." But Otten disagrees. "It's not a few - there's easily 40 bad apples and probably more," Otten said. We watched as one of the eight defendants currently named in the suit was served with court papers.”


“Otten said he plans to add more defendants to the suit in the coming weeks and is seeking class action status - a powerful legal tool he hopes will break up the Bay Boys for good.” I’m glad a class action suit is being filed. Eight have so far been named in the suit, but some 40 have been involved in the harassment. I detest, as those of you have read my blogs before know, what psychologists call “group think,” but which to me is “mob rule.” In the West and the South from time to time such mob violence has led to lynchings, cross burning, beatings and more. The reason for having police is to take care of these things legally and fairly. I hope they succeed in their suit and in addition fence off the darned beach to the public, requiring tickets or city issued passes to any who want to walk or surf there. They should have to get a police clearance for a pass. Then anyone who has a violent or unruly past would be kept off the beach.



http://www.cbsnews.com/news/religious-group-sues-san-francisco-over-open-air-urinal/

Religious group sues San Francisco over open-air urinal
CBS/AP
April 19, 2016, 10:25 AM

Photograph -- Outdoor urinal at Mission Dolores Park in San Francisco. CBS SAN FRANCISCO


SAN FRANCISCO- A religious organization has filed a lawsuit against the city of San Francisco to remove an open-air urinal it calls unsanitary and indecent from a popular park.

The Chinese Christian Union of San Francisco filed a civil complaint last week demanding the city remove the concrete circular urinal from the iconic Dolores Park.

The group says the urinal, which is out in the open and screened only with plants for privacy, "emanates offensive odors," ''has no hand-washing facilities" and "it's offensive to manners and morals."

The lawsuit further alleges that the facility installed in February discriminates against women and the disabled and exposes those who use it to "shame and embarrassment."

"The open-air urination hole violates the privacy of those who need to use the restroom but would be required to expose their bodies and suffer shame and degradation of urinating in public view," it says.

The City Attorney's office said in a statement that it will defend against the litigation and pointed out the 16-acre park is well-known for its "counter culture, immodest sunbathers, pot brownie vendors, spectacular city views, and famously irreverent 'Hunky Jesus' contest."

The office said residents advocated for the facility, called a "pissoir," to stop people from urinating on walls, bushes and sidewalks.

"If I had to predict the top 100 things in Dolores Park likely to offend these plaintiffs, I wouldn't have guessed that this would make the cut," City Attorney spokesman Matt Dorsey said in the statement. There have been several formal complaints against the urinal, reports CBS San Francisco. Last month, the Pacific Justice Institute, a conservative legal defense nonprofit, sent a cease-and-desist letter to the city about the urinal project, saying it violates the privacy rights of both users and those forced to watch them.

The urinal is part of a $20 million renovation plan that now has put more than two dozen toilets in Dolores Park along with other upgrades.

San Francisco has a long, sometimes creative, history of dealing with public urination. Last summer, the city painted nearly 30 walls with a repellant paint that makes urine spray back on the offender. In 2002, the city increased the possible fine for the crime up to $500, but that did little to deter the practice.



“The Chinese Christian Union of San Francisco filed a civil complaint last week demanding the city remove the concrete circular urinal from the iconic Dolores Park. …. The City Attorney's office said in a statement that it will defend against the litigation and pointed out the 16-acre park is well-known for its "counter culture, immodest sunbathers, pot brownie vendors, spectacular city views, and famously irreverent 'Hunky Jesus' contest." The office said residents advocated for the facility, called a "pissoir," to stop people from urinating on walls, bushes and sidewalks. …. Last month, the Pacific Justice Institute, a conservative legal defense nonprofit, sent a cease-and-desist letter to the city about the urinal project, saying it violates the privacy rights of both users and those forced to watch them. The urinal is part of a $20 million renovation plan that now has put more than two dozen toilets in Dolores Park along with other upgrades.”


I understand the need for toilets in a 16 acre park, but such facilities should be fully enclosed, with comparable units available to women and the handicapped, and flushable so that the area wouldn’t become malodorous. Why in heaven’s name would San Francisco do something like this? The reason” given -- that the area is full of “counter culture, immodest sunbathers, and pot brownie vendors” -- makes no sense at all unless they are saying that such people don’t deserve a decent toilet, which is a despicable argument. I’m glad to see that they are being sued, and would like to see a state law against this kind of thing in the future. As for people urinating on buildings, etc., post police guards and arrest them.



http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

Life insurance industry under investigation
Audits of leading life insurance companies have uncovered a systematic, industry-wide practice of not paying significant numbers of beneficiaries

CORRESPONDENT
Lesley Stahl
Apr 17, 2016

Photograph -- lifeinsurancea.jpg, Joseph Bigony receives a long-overdue payment from his sister's life insurance policy CBS NEWS
Photograph -- kevinmccarty.jpg, Kevin McCarty, Florida's insurance commissioner CBS NEWS
Photograph -- notpaidmain.jpg, California State Controller Betty Yee, right, and Lesley Stahl CBS NEWS


The following is a script from "Not Paid" which aired on April 17, 2016. Lesley Stahl is the correspondent. Rich Bonin, producer.

When you take out a life insurance policy, you pay premiums in the expectation that when you die your spouse or your children will receive the benefit. But audits of the nation's leading insurance companies have uncovered a systematic, industry-wide practice of not paying significant numbers of beneficiaries.

In a little-known series of settlements, 25 of the nation's biggest life insurance companies have agreed to pay more than 7 and a half billion dollars in back death benefits. However, about 35 insurance companies have not settled and remain under investigation for not paying when the beneficiary is unaware there was a policy, something that is not at all uncommon.

Kevin McCarty: The beneficiary never comes forward because he or she doesn't know the policy exists.

But the companies know, says Kevin McCarty, the insurance commissioner of Florida, who led the national task force investigating the industry. And the companies don't pay, he says, unless a beneficiary makes a claim.

Kevin McCarty: And what we found is that companies have actual knowledge in their files that people have died, yet they have neglected to initiate an investigation and pay the claim.

Lesley Stahl: So in other words, life insurance companies are failing to pay out death benefits when they know the person is dead, and they're claiming they don't know.

Kevin McCarty: In many cases, that has been exactly what we have found.

Lesley Stahl: When you found that, what went on inside you?

Kevin McCarty: My first instinct was of course is [sic] unleash the hounds of hell -- let's go after them, and expose them for the unconscionable, indefensible behavior that was going on.

He says some of the policies are worth more than a million dollars. But most are valued at less than $10,000.

As a result of the audits, Joseph Bigony of West Virginia recently got a long-overdue payment of more than $5,000 from his sister's policy.

Joseph Bigony: I was the administrator of her estate when she died in June of 1990, and we didn't know anything about this at all.

Jeff Atwater: You're talking about millions of policies.

Lesley Stahl: Millions?

Jeff Atwater: Hundreds of thousands of policies that we're dealing with just here in Florida.

Jeff Atwater is the chief financial officer of Florida in charge of regulating the state's insurance industry.

Jeff Atwater: You can assume from what we have found that the policies that should have paid out in the 60s, in the 70s, in the 80s, in the 90s were never paid.

Lesley Stahl: And you're saying it's part of their plan?

Jeff Atwater: After all we've looked at, Lesley, it would be hard to imagine. This is not a small dollar amount. These are billions of dollars that now stay in the investment accounts of these insurance companies rather than return money to those families.

Lesley Stahl: Tell us some of the big names.

Jeff Atwater: It would be all the large brand names that you're familiar with: John Hancock, MetLife, Prudential. Many of these companies have sat down with us and made right.

No one disputes that the insurers pay out on policies when the beneficiary files a proper claim.

But says Kevin McCarty of Florida, many of the companies routinely and deliberately disregarded evidence in their own files that the policyholders had died.

Unless someone filed a claim, he says, the companies would cancel the policy and keep the death benefit for themselves.

Kevin McCarty: Here's a life insurance policy that's issued in Florida in January 2002. The insurer died in April of 2008. We actually have in the insurance company's file, a copy, a scanned copy, of the death certificate.

Kevin McCarty: And the accompanying envelope which displayed the spouse's return address.

Lesley Stahl: With the spouse's address on it.

Kevin McCarty: It's right here.

Lesley Stahl: Let me see.

Kevin McCarty: Less than one month after the death the policy was terminated for non-payment.

Industry lobbyists - like this one at a recent hearing in Florida -- argue that the burden falls on the beneficiaries.

Lobbyist: We all enter into contracts every day and if you sign that contract, you're obligated to know what's in it.

Lesley Stahl: The companies argue that in the policies that these people signed, it says - black and white - that they have to make the claim and show up with a copy or the policy itself. "And if they don't do that, we don't have an obligation."

Kevin McCarty: But Florida law says something too. And you have to look at it not just in terms of the contract, but to your responsibilities under the Florida insurance code. And I'm here to say that you have a responsibility to investigate a claim if you know someone has died. And if you have a letter that says you're deceased, you have actual knowledge the person has died.

Insurance companies are regulated separately by each state and he says similar laws are on the books across the country.

State regulators first got wind of the insurance industry practice from Jim Hartley and Jeff Drubner who run a technology and auditing company called Verus Financial. Based on an insider tip in 2006, Drubner, employing techniques he had used as an FBI agent, combed through insurance company data and discovered that the insurers were routinely using the Social Security Death Master File - which is a constantly-updated list of people who have died in the United States.

Lesley Stahl: What was the significance to you that they were using the Death Master File for something?

Jeff Drubner: I knew at that point that they knew because if you have--

Lesley Stahl: They knew who was alive and dead, is what you're saying?

Jeff Drubner: Yeah, because they know who they've insured and if they have a list of everybody that's passed away. I knew that they knew.

Lesley Stahl: What was the next step?

Jim Hartley: The next step was to speak to the states. There wasn't one treasurer, one controller or one attorney general who didn't have a reaction that this shouldn't be allowed to happen and we have to fix it.

Drubner went on to discover that most insurance companies used the Death Master File only when it was to their advantage: to cut off annuity or retirement payments once the policyholder died. But they didn't then notify the life insurance side of the company.

Kevin McCarty: We have actual cases, Lesley, where a policyholder had both an annuity and a life policy. And they terminated the annuity, and of course they knew the person was dead, so they-- so--

Lesley Stahl: Claimed over here that they didn't know he was dead?

Kevin McCarty: Lesley, when we went in and looked at the memos, the right side told the left side and the other side said--

Lesley Stahl: And you saw it in the audits? You'd just see it-

Kevin McCarty: We saw it in the audits.

Something else they saw in the audits related to "whole life" insurance policies -- that in addition to a death benefit build up a cash nest egg, like a 401K.

What they found is that when a beneficiary did not come forward, the company continued to pay themselves premiums out of the dead person's nest egg.

In this $20,000 policy, for instance, the nest egg was drained down more than $9,000 to zero...after the person had died.

California Controller Betty Yee says that kind of siphoning off was widespread in cases where beneficiaries did not come forward.

Betty Yee: How can you not be outraged by this?

She says that in about a third of the cases there was evidence of death in the file.

Betty Yee: Here we have a policyholder.

Lesley Stahl: Is this the actual file that you saw with the word "deceased" in large, large unmistakable letters--

Betty Yee: Yes, yes, "deceased" with the date of death.

Lesley Stahl: And still they didn't-- they didn't stop paying themselves.

Betty Yee: No, no, and you would've thought with that kind of indication, a next step would be to confirm that by looking at the Death Master File and beginning the claims process with the family member.

Lesley Stahl: And they didn't.

Betty Yee: They didn't.

When the cash was all used up the companies cancelled the policy. Under the law they're allowed to pay themselves premiums using their customer's accumulated cash while they're alive. Florida's McCarty says the law was originally intended as a way to protect consumers.

Kevin McCarty: For instance, if you have a life policy and you lose your job and you can't make your premium payment, they will take some of the cash value that's built up in your policy and pay the premium. Which is great for consumer protection.

But in this situation, after they died...

Kevin McCarty: I think it's tantamount to stealing when you know in your books and records the person is dead and you drain the policy. Now if you think about that, if you would have explained that trying to sell that policy at the beginning.

Lesley Stahl: At the beginning.

Kevin McCarty: You're sitting in your kitchen and saying, you know, you've got all these symbols of security and financial stability and we're going to be there for you with your family in their grief, but they say, "Oh, by the way. If you stick that policy in a shoe box and stick it in your closet, not only are we not going to look for you, but we're gonna to take all the cash value in it, and...

Lesley Stahl: Give it back to the company.

Kevin McCarty: Give it back to the company. And leave your beneficiary with nothing. Here, sign here.

The 25 insurance companies that have settled with the states admitted no wrongdoing, but agreed to pay out more than $7.5 billion - either directly to the unpaid beneficiaries or to the states, which then try to find the beneficiaries by phone...

Woman: We have received some funds from an insurance company that's in your name.

Or online...

PSA: Thousands of Oklahomans are owed money from life insurance policies.

None of the life insurance companies we contacted would give us an interview, but speaking on their behalf, the industry trade association, the American Council of Life Insurers, told us quote: "most life insurers are going well beyond what the law requires to identify policy owners who have died and left unclaimed benefits."

Ken Miller, the treasurer of Oklahoma, says there are still about 35 insurance companies that have not settled and some are fighting tooth and nail. At stake, he says, is up to $3 billion more in unclaimed benefits nationwide.

Lesley Stahl: Who's fighting the hardest?

Ken Miller: Kemper is the main one.

Kemper, a Chicago-based insurance company, has been pushing for legislation around the country that would bar the states from forcing Kemper to go back and search for unpaid beneficiaries.

When we called Kemper, they referred us to Steve Weisbart of the Insurance Information Institute -- who says making companies like Kemper pay now would be unfair.

Steve Weisbart: If we can say, "Do something today that you didn't expect to do and didn't plan to do and didn't collect money to do 30 years ago," what else can we say today that they should be doing retroactively. It's potentially an open door.

Lesley Stahl: A slippery slope is what you're saying?

Steve Weisbart: A slippery slope.

Kemper has argued in court filings that it's never used the Death Master File to identify deceased policyholders and that finding and paying their beneficiaries now would result in "a substantial financial loss..." and require the company to "...substantially alter (its) business practices."

Ken Miller: If your model is built upon the fact that you're not going to pay a dead person's loved ones for a policy that they've completely paid in full, to me that's just a bad policy.

An Oklahoma woman, Sherry Sanders, didn't know about her husband's policy until about a year ago, when - because of a settlement, she got a check worth $22,000. We asked Oklahoma Treasurer Miller how much an insurance company can make by holding on to the $22,000.

Ken Miller: Well, Lesley, now you've hit on something that's the most important issue. And that's the time value of money. Because that's what this is all about. This is about money. That $22,000 invested for 50 years at an eight percent return becomes $1.2 million.

Lesley Stahl: That the company gets because it sat there?

Ken Miller: And that's just one small policy. If you expand that over all the policies that's just due to my state, it's a tremendous amount of money, billions and billions of dollars.

The American Council of Life Insurers says that the industry has paid out more than $600 billion in death benefits over the last 10 years - so the companies are doing a good job.

Ken Miller: I don't think we should pat 'em on the back for doing what they're supposed to do.

Lesley Stahl: But the companies say that this is only 1% of the life insurance policies.

Ken Miller: Then why fight it? If it's so inconsequential, if it's such a small amount-- then why be spending your reputation to not pay dead people's loved ones money that's rightfully due them.



US law should cover all business activities, rather than merely state laws, and there should be prohibitions of bizarre practices like this, which secretly skirt the law. This makes them a SCAM and not a business, and they should be subject to criminal convictions of management members, dissolution of the insurance company as a business, and prosecute anyone else as well who is complicit in this abuse of decent human beings as well (advertising agencies, TV stations, Internet sites). If a homeowner can be liable for payment of any loan or lien that a business has against its' name, I think the Insurance companies should also. I get invitations to join a life insurance plan frequently in the mail. I immediately toss it into the trash. I have no heirs, so I have no need for a life insurance plan.

Insurance is a very dirty business in general, to me, including health insurance – except perhaps for the companies that are covered under Medicare. I think (hope) that they will be scrutinized sufficiently to prevent this kind of behavior. Even under Medicare, the copay and coinsurance payments alone can amount to a good bit of money out of the income of someone in my financial situation, and then they don’t pay for everything either. I do like the fact that doctors, after the insurance share is paid, cannot bill the patient for an often exorbitant remainder, at least if he has Medicare.

On the issue of insurance as a scam, see the following dailykos article: http://www.dailykos.com/story/2014/9/18/1330440/-Health-Insurance-Takes-Business-Plan-From-Mafia. It does bear a very close resemblance to a protection racket or extortion racket as defined in Wikipedia. I first saw that in an old black and white movie with the business owner being “visited” by a member of the mafia.