Federal Times Blogs

Glitch means no paychecks today for thousands of feds

Bookmark and Share

For 40,000 federal employees, this has not been a happy Friday.

The reason: They didn’t get paid.

Because of problems at the Interior Business Center (IBC), which handles payroll processing for numerous agencies outside of the Interior Department, paychecks that were supposed to be direct-deposited today didn’t go through, spokesman Michael Fernandez said in a statement later posted on the center’s website. Paychecks will now be deposited Tuesday, he said. The affected employees work in 23 of the 42 agencies served by the business center. They represent about 17 percent of the 240,000 workers paid through the IBC, according to the statement. Affected agencies include the Securities and Exchange Commission, NASA, the National Archives and Records Administration, and the National Labor Relations Board.

According to Fernandez, the problem resulted when the payroll file sent from the business center to Treasury contained the official pay date of Sept. 17 for the electronic funds transfer, not the expected date of Sept. 13. “Efforts to process a new payment file were unsuccessful,” he said.

The center is working on a plan to prevent this from happening again, Fernandez said. Although most of its customers are not affected, he added, center officials know that this is a “serious matter” and sincerely regret “any inconveniences the error may have caused.”

Joe Ward, the center’s director, referred questions to Fernandez’s office. The snafu highlights the fact that to ‘facilitate processing of payroll in a timely manner,” the center in at least some cases routine deposits payroll money early to banks. As some commenters have noted, the employees are still ostensibly being paid on time, but that may not mean much if–for bill-paying purposes–you assumed that the money would be in your account by Friday. As they say in politics, it’s all about expectations.

The Interior Business Center has begun contacting about 1,800 financial institutions to let them know about the mistake and asking them to work with customers, according to Fernandez’s statement. “Some banks have already agreed to recognize the payments” as if they had been actually made on Friday, the statement says.



Tags: ,

Shareholders benefit from campaign funding disclosure, report says

Bookmark and Share

Companies that hide their political spending from shareholders have less value on the market, according to a report released Tuesday by researchers at Harvard law and the Public Citizen consumer advocacy group.

Harvard law and economics professor John Coates and Taylor Lincoln with Public Citizen’s Congress Watch division compared 80 companies in the Standard & Poor’s 500 that voluntarily disclose their electioneering activities with other S&P 500 companies in the same industry.

The companies with disclosure policies had a 7.5 percent higher industry-adjusted price-to-book ratio than other firms, according to the report. The duo looked at price-to-book ratios, as opposed to year-to-year earnings, to reflect the market’s evaluation how a company is managing shareholder resources.

Coates and Lincoln are using their study to ask the Securities and Exchange Commission to require publicly traded companies to disclose to shareholders and the public their expenditures used for political purposes, including donations to trade associations that help finance electioneering and lobbying activities.

The Supreme Court’s January 2010 Citizens United decision opened corporate spending to third-party groups which do not have to disclose their donors. The ruling resulted in a flood of undisclosed dollars into the 2010 mid-term elections.

Of $266 million spent by outside groups to influence the 2010 elections, more than $135 million was spent by groups that did not disclose their funders, according to the report.

Coates and Lincoln’s request would only deal with publicly traded companies, which are not considered to be the biggest spenders on political campaigns.

Legislation that would have required organizations to disclosure funders failed to pass the Senate. The draft of an executive order that would have required government contractors to disclose their third-party contributions was leaked in April but has yet to be issued.

 The report comes about a month after a group of law professors proposed a similar rule to the SEC.

 “Shareholders of publicly traded companies have a right, at a minimum, to know how the companies in which they are invested are attempting to influence public policy,” the report concludes.

Tags: , ,

No exposure for SEC employees in porn case

Bookmark and Share

Two-dozen past and present Securities and Exchange Commission employees are probably breathing easier. The reason? A federal judge ruled against making their names public after they got caught watching pornography and other sexual images on the job.

In a Freedom of Information Act lawsuit filed this May, Denver attorney Kevin Evans had argued that government workers who “knowingly and intentionally” used taxpayer-financed property to engage in misconduct had no right to privacy. In a ruling last week, U.S. District Judge Christine Arguello disagreed.

Not only were their privacy rights intact, Arguello wrote in an interesting line of judicial reasoning, but those rights were reinforced “by the sexual nature of the misconduct,” which involved employees’ “needs and/or desires, and in at least one instance, an admitted long-standing addiction to Internet pornography.” In addition, Arguello wrote, the SEC had already disclosed enough information about its response to the misconduct.

In a phone interview, Evans said his firm had not decided whether to appeal.

For anyone needing a refresher on this episode, the SEC employees—some earning six-figure salaries—were among 33 commission staff and contractors found by the agency’s inspector general to have accessed sites like spankwire.com and fetishland.com on their government computers since 2005, according to filings in Evans’ suit.

One regional office examiner used a flash drive to bypass the commission’s Internet filter; a senior attorney at SEC headquarters downloaded so much material that he exhausted his computer’s hard drive.

The 24 workers made up a tiny fraction of the SEC’s workforce of almost 4,000. Although eight resigned, no one was actually fired, according to a compilation by the agency. Of the remaining 16, nine were either counseled or reprimanded (with one reprimanded employee also having to make an eight-hour payment to the leave bank). The final six were suspended from one to 14 days.

Among other court filings is a submission from one of the employees who left. Identified only as “John Doe,” the ex-SEC staffer wrote that disclosure of his identity would “cause me severe personal and professional harm including embarrassment and disgrace, as well as the possible loss of my current job, future employment opportunities and the ability to earn a living.”

The obvious question (one not germane to the lawsuit) that critics might pose:  Why he didn’t think of that a little sooner.

Tags: , ,

Congress approves SEC records exemptions repeal

Bookmark and Share

Congress has given final approval to legislation shutting down controversial Freedom of Information Act exemptions for the Securities and Exchange Commission, according to its sponsor, Sen. Patrick Leahy, D-Vt. The measure now goes to President Obama.

The exemptions, tucked into the financial services overhaul enacted in July, allowed the SEC to withhold some records gathered from hedge funds and other financial entities that it regulates. Without the new provisions, SEC Chairwoman Mary Schapiro argued, such entities could be reluctant to cooperate during examinations out of concern that sensitive records could become public.

But critics said existing FOIA exemptions were adequate for that  purpose and questioned whether the SEC—whose reputation has been marred by its failure early on to catch Ponzi schemer Bernard Madoff and other lapses—would use the exemptions to shield itself from public scrutiny.

Schapiro denied that intent, but lawmakers were evidently not persuaded. The legislation passed the Senate and the House this week on voice votes.

Tags: , , ,

Former SEC lawyer sues LeBron James for $4M, claims he’s his dad. Wait, what?

Bookmark and Share
Miami-bound LeBron James

Miami-bound LeBron James

In what may be the oddest paternity suit in recent memory, a former Securities and Exchange Commission lawyer is suing basketball star LeBron James and his mother for $4 million. Leicester Bryce Stovell claims that he is LeBron’s dad, and that the basketball star and his mom have conspired to deny his paternity and shut him out of the Miami-bound player’s life.

Stovell said his memory of his 1984 one-night stand with Gloria James resurfaced 20 years later. (In an astounding coincidence, that would place his sudden recall well after all hard work and late nights of raising a son, and right around the time James was named the NBA’s Rookie of the Year.) One previous paternity test ruled out Stovell, but he believes that was tampered with and he wants another one.

(Stovell filed a racial discrimination lawsuit against SEC in 2002. SEC paid him $230,000 to settle the case, but did not admit fault, CNN reports.)

"LeBron, I am your father" -- Leicester Bryce Stovell, from his Facebook page

"LeBron, I am your father" -- Leicester Bryce Stovell, from his Facebook page

TMZ, which broke the news, said that “In his suit, Stovell claims he has a very clear recollection of the night he had ‘consensual sexual relations’ with Gloria — in fact, he even remembers apologizing for his sub-par performance.”

Jeez, Stovell. FedLine understands SEC lawyers like to include all the details, but there’s a limit.

Tags: , , , ,

Were you a victim of Wayne McLeod’s alleged Ponzi scheme?

Bookmark and Share

Federal Times would like to talk to people who invested in Wayne McLeod’s bond fund, which the Securities and Exchange Commission said ended up being a long-running Ponzi scheme that targeted federal and state employees. E-mail me at slosey@federaltimes.com. If you’d like to remain anonymous, that’s fine.

Tags: ,

Did porn addiction cause the financial crisis?

Bookmark and Share

Nero fiddled as Rome burned; SEC staffers watched porn as the economy crashed.

A new report from the agency’s inspector general revealed a startling proclivity for sexually graphic materials among certain SEC staffers.

The SEC’s inspector general conducted 33 “probes” — yes, that’s the word the Associated Press chose to use, and yes, I am twelve years old — of SEC officials, including 17 “at a senior level.”

One senior attorney spent up to eight hours a day viewing and downloading pornography on the job, burning files to CDs and DVDs that he kept around his office. An accountant was blocked more than 16,000 times in a month from visiting illicit websites, yet still built a collection of “very graphic” material by using Google Images to get around the SEC’s internal filter.

AP quotes Darrell Issa, the top Republican on the House Committee on Oversight and Government Reform, as saying it is “disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation’s economy on the brink of collapse.”

OK, but if they were spending their time watching reruns of “Jersey Shore” or something, is this such a big story? And which is more unhealthy? Discuss in the comments.

Oh, by the way, Nero committed suicide in A.D. 68, under siege by critics of his tax policies. Just saying.

Tags: , ,