Hey Jude
St. Jude
You may be familiar with St. Jude Children’s Hospital because it’s advertised all over the country:
Each year, the Memphis hospital’s fundraisers send out hundreds of millions of letters, many with heart-wrenching photographs of children left bald from battling cancer. Celebrities like Jennifer Aniston and Sofia Vergara sing the hospital’s praises in televised advertisements. This year, St. Jude’s fundraising reached outer space. The SpaceX Inspiration4 mission in September included a former St. Jude patient as a crew member.
It’s a top-ranked children’s hospital, and a highly regarded charity organization. They raised $2 billion dollars last year, more its 9 closest peers combined. So, where does the money go?
Only about half of the $7.3 billion St. Jude has received in contributions in the past five fiscal years went to the hospital’s research and caring for patients, according to its financial filings with the Internal Revenue Service. About 30% covered the cost of its fundraising operations, and the remaining 20%, or $1 of every $5 donated, increased its reserve fund.
That reserve fund now sits at $5.2 billion - enough money to run the hospital for more than four years on savings alone. The advertising says families don’t pay a dime for treatment, which is true. But the hospital doesn’t always cover additional costs for the families of the children it treats:
While families may not receive a bill from St. Jude, the hospital doesn’t cover what’s usually the biggest source of financial stress associated with childhood cancer: the loss of income as parents quit or take leave from jobs to be with their child during treatment. For many families, the consequence is missed payments for cars, utilities and cellphones. Others face eviction or foreclosure because they can’t keep up with rent and mortgage payments.
It is not the hospital’s responsibility to pay for these things, but it arguably could, since it’s sitting on billions in reserves. What it does offer to families is meager compared to what it raises:
Very little of what St. Jude raises from the public goes to pay for food, travel and housing for families, the investigation found. Last year, it was 2% of the money raised, or nearly $40 million.
The hospital has 73 beds, but its fundraising and investment arm has a huge staff and dozens of offices:
ALSAC, which handles St. Jude’s fundraising and investments, has 2,188 employees in Memphis and in 36 regional offices across the country. More than 400 of the fundraising arm’s employees are paid over $100,000, according to IRS filings. The charity takes in so much money each year that it regularly steers hundreds of millions of dollars in donations to reserve accounts, the filings show.
The charity says it’s raising more funds to build new facilities and fund additional research, but that hasn’t stopped it from putting $1.9 billion into its reserve over the last five years. They operate offices in regions with existing children’s hospitals, which raises concerns they’re taking money that could be used to treat kids locally:
David Clark, a pediatrician and former longtime chairperson of pediatrics at Albany Medical Center in New York, said St. Jude raises tens of thousands of dollars in his region that does little to benefit the children with cancer in his area since almost all are treated locally. ALSAC has a fundraising office located a few miles from Albany Medical.
Most of the money to treat patients at St. Jude’s hospital comes from insurance and the government:
…a substantial portion of the cost for treatment is paid not by St. Jude but by families’ private insurance or by Medicaid, the government insurance program for low-income families. About 90% of patients are insured, bringing in more than $100 million in reimbursements for treatment a year. If a family shows up at St. Jude without insurance, a company hired by the charity helps them find it. St. Jude does cover copays and deductibles, an unusual benefit.
So they continue to use their incredible brand power to stockpile cash and pay their large fundraising and administrative staffs. Not great, but the donors are giving all this money of their own free will, right? Right?
Its bequest operation has a broad reach, with fundraisers based across the nation and a willingness to challenge families in court over the assets their loved ones leave behind. These battles can sometimes be lengthy and costly, spending donor money on litigation and diminishing inheritances. Family attorneys who specialize in such fights say that St. Jude can be especially aggressive, often pursuing cases all the way to state supreme courts.
Man, come on. When a potential donor even hints they might leave St. Jude some money in their will, a charm offensive kicks off:
Representatives of the hospital’s fundraising arm visit their homes; dine with them at local restaurants; send them personal notes and birthday cards; and schedule them for “love calls.”
Bequests make up 20% of St. Jude’s fundraising haul, more than double the national average for charities. They aggressively court the professionals who help seniors and the ill plan their estates:
The nonprofit even courts those who aid in estate planning and drawing up wills, sponsoring conferences where attorneys, financial advisers and estate professionals gather. On at least one occasion it offered attendees a chance to win a golf trip.
[…]
St. Jude has been a top-level diamond sponsor for the past several years of the Heckerling Institute on Estate Planning, an annual conference that typically draws more than 3,000 attendees.
And they aggressively contact potential donors, at times against their wishes:
Harris, after notifying St. Jude of the potential bequest, then asked that no one contact her. That request was apparently ignored as an ALSAC staffer was tasked with getting in touch with Nona a few months after her call
[…]
ALSAC sent Nona handwritten birthday and holiday cards, and in one case, just a note to say, “I thought of you today.” The cards were often followed by phone calls around the holidays to check in with her.
On four occasions — in 2000, twice in 2001 and in 2005 — Nona was listed for what were described in the log as “love calls.” St. Jude declined to provide details on what such calls entailed.
Listen, I am uncomfortable writing about a children’s cancer charity. It is the job of fundraisers to fundraise, and nothing St. Jude is accused of is illegal. It is far more aggressive than its peers, and it is stockpiling huge amounts of money for unknown reasons, but, again, this is the country we live in. If our health care system paid to properly treat kids with cancer near where they lived, and our social safety net supported their parents during the treatment, we might not have charities like St. Jude raising billions for the same stated goals. Who knows.
Police Misconduct
We have talked a bit about what happens when police officers are sued for misconduct - typically cities and taxpayers foot the bill. A new Washington Post investigation reveals not only how much money police misconduct costs taxpayers, but how officers with repeated complaints generate an oversized share of settlements paid out:
Officers whose conduct was at issue in more than one payment accounted for more than $1.5 billion, or nearly half of the money spent by the departments to resolve allegations, The Post found. In some cities, officers repeatedly named in misconduct claims accounted for an even larger share. For example, in Chicago, officers who were subject to more than one paid claim accounted for more than $380 million of the nearly $528 million in payments.
If you are a (normal) employer and one of your employees is costing you hundreds of thousands of dollars in lawsuits plus all the costs associated with investigating and defending them, you might think about firing them? Not if you’re a cop:
The Post found that more than 1,200 officers in the departments surveyed had been the subject of at least five payments. More than 200 had 10 or more.
Remember, these are only the complaints that result in monetary payouts. Misconduct so egregious the police department - or, usually, the city - offers the plaintiff money to resolve the matter. Despite paying out $3 billion in claims, cities rarely bother to track which officers are at fault:
Despite the repetition and cost, few cities or counties track claims by the names of the officers involved — meaning that officials may be unaware of officers whose alleged misconduct is repeatedly costing taxpayers.
Settling claims also conveniently allows both police departments and city officials to insist the officers did nothing wrong:
And settlements rarely involve an admission or finding of wrongdoing. Because of this there is no reason to hold officers accountable for them, said Jim Pasco, executive director of the National Fraternal Order of Police, the nation’s largest police labor union with more than 364,000 members.
Ahh yes. Paying out significant cash settlements to people claiming they were abused by police is just business as usual, it would be unfair to punish the officers involved. The FOP director gives away the game:
“If there’s never been a finding of guilt or anyone’s fault, why put that in an officer’s record?” Pasco said. “That would be such a glaring omission of due process where in the legal system in the United States, a person is innocent until proven guilty.”
Police unions have spent the last few decades writing increasingly onerous contracts to prevent cities from holding bad cops accountable. City officials have allowed themselves to be extorted by lawless, unaccountable police departments, paying legal settlements to shield bad cops who abuse the citizens. Citizens who pay not only their salaries but the settlements against them. It’s a game of “stop hitting yourself” except the person making you hit yourself is also hitting you, with a baton, because they know they’ll get away with it.
Crowdfunding Justice
While cities shell out billions to cover up police malfeasance, police departments are turning to private citizens for money to solve crimes:
Othram’s founder and chief executive, David Mittelman, a metaphor-loving geneticist, compares the forensic money request to Kickstarter. “Instead of a product, you’re getting justice for a family,” he said. “We’re crowdfunding for justice.”
That phrase has traditionally meant funding bail or legal bills for the accused, but Othram was seeking $5,000 to sequence the victim’s DNA.
Okay. You know what, let’s give them a chance to explain:
Othram’s pitch is simple: Government labs lack the expensive equipment needed to process DNA evidence — cigarette butts, bloodstained fabric, bone — which may be decades old, degraded or mixed with nonhuman materials. For now, private labs must do the work of creating genetic profiles that are compatible with those generated, much more easily, from a consumer’s saliva. Then forensic genetic genealogists must do the time-consuming labor of sorting through third cousins and population records. Finally, another DNA test is typically required to confirm a suspected match.
They’re referring to the genetic mining authorities did to catch the Golden State Killer:
The case of the Golden State Killer, who committed 13 murders and dozens of rapes in California, went unsolved for decades, until the F.B.I. decided in 2018 to use DNA evidence from a sexual assault to build out the perpetrator’s likely family tree. The resulting identification and prosecution of a 72-year-old former police officer proved the value of what’s called “forensic genetic genealogy.”
Which had some problems, to put it mildly:
What made the investigation possible was GEDmatch, a low-frills, online gathering place for people to upload DNA test results from popular direct-to-consumer services such as Ancestry or 23andMe, in hopes of connecting with unknown relatives. The authorities’ decision to mine the genealogical enthusiasts’ data for investigative leads was shocking at the time, and led the site to warn users.
The FBI used a public DNA database created by ancestry enthusiasts to track and identify criminals. Without anyone’s knowledge or permission. Cool! Now that the genie is out of the bottle, it makes sense companies like Othram would take advantage:
The company created a site called DNASolves to tell the stories of horrific crimes and tragic John and Jane Does — with catchy names like “Christmas tree lady” and “angel baby” — to encourage people to fund budget-crunched police departments, so that they can hire Othram. A competitor, Parabon NanoLabs, had created a similar site called JusticeDrive, which has raised around $30,000.
If this sounds creepy to you, you’re not alone. However, it’s found a valuable demo - true crime enthusiasts:
The philanthropy is also being fueled by true crime, an entertainment genre that has come to dominate podcast charts. Audiochuck, an Indiana company with a slate of popular true crime shows, has donated approximately $800,000 to organizations doing investigative genealogical research, including Othram, but the majority has gone to a nonprofit started by Ashley Flowers, host of the network’s “Crime Junkie” podcast.
Great. There are also significant concerns these private campaigns will focus on white victims, given their donors, and the DNA databases themselves:
An existing bias toward prioritizing white victims, which has been documented in media coverage, could be compounded by the demographic makeup of the genealogy databases. Their composition “skews heavily white,” according to a recent law review article, which contrasted these databases to state collections of DNA, such as the F.B.I.’s Codis, which overrepresent Black people, who are more likely to be arrested and have their DNA taken.
Excellent. I am not arguing against solving crimes, but I question why we need private donors and for-profit companies to step in and test samples and research genealogical trees when the police can find BILLIONS OF DOLLARS to fund legal settlements. We crowdfund everything in this country, so why not add solving crimes to the list, I guess, since cops are shamefully bad at it.
Targeted Victory
Man, what the hell:
Facebook parent company Meta is paying one of the biggest Republican consulting firms in the country to orchestrate a nationwide campaign seeking to turn the public against TikTok.
[…]
Employees with the firm, Targeted Victory, worked to undermine TikTok through a nationwide media and lobbying campaign portraying the fast-growing app, owned by the Beijing-based company ByteDance, as a danger to American children and society, according to internal emails shared with The Washington Post.
When you are facing lawsuits, investigations, and bad press on a regular basis, it’s probably not the best move to hire a GOP consulting firm to smear one of your competitors. Especially not when they’re sending emails like this:
“Bonus point if we can fit this into a broader message that the current bills/proposals aren’t where [state attorneys general] or members of Congress should be focused,” a Targeted Victory staffer wrote.
And this:
In one email, a Targeted Victory director asked for ideas on local political reporters who could serve as a “back channel” for anti-TikTok messages, saying the firm “would definitely want it to be hands off.”
And this:
In other emails, Targeted Victory urged partners to push stories to local media tying TikTok to dangerous teen trends in an effort to show the app’s purported harms. “Any local examples of bad TikTok trends/stories in your markets?” a Targeted Victory staffer asked.
“Dream would be to get stories with headlines like ‘From dances to danger: how TikTok has become the most harmful social media space for kids,’ ” the staffer wrote.
Sure, negative PR is a part of corporate strategy, and maybe sometimes you have to just make stuff up because why not:
In October, Targeted Victory worked to spread rumors of the “Slap a Teacher TikTok challenge” in local news, touting a local news report on the alleged challenge in Hawaii. In reality, no such challenge existed on TikTok.
Why is Facebook so worried? It blames TikTok for its lousy app engagement among young people:
In an internal report last year leaked by the whistleblower Frances Haugen, Facebook researchers said teens were spending “2-3X more time” on TikTok than Instagram, and that Facebook’s popularity among young people had plummeted.
Despite having essentially unlimited resources to do its own PR, Facebook thought it would be a good idea to hire a consulting firm used by the Trump campaign to plant fake stories and write fake op-eds about a competitor to try and deflect attention from their many scandals. A normal thing for a company that insists we should trust it with all our personal data.
Rug Pulls
We have talked before about the rug pull - when the creators of a crypto token or project suddenly abscond with the proceeds. It is definitely a scam but is it technically illegal? The DoJ has decided it is:
Today, the United States Department of Justice announced that it has charged a pair of 20-year-olds, Ethan Nguyen and Andre Llacuna, with conspiracy to commit wire fraud and conspiracy to commit money laundering over the Frosties NFT project.
[…]
This is the first known case of the Department of Justice charging NFT creators with alleged conspiracy to defraud buyers—a potential landmark case in the rising NFT industry, which generated some $25 billion in total trading volume in 2021 alone.
The term even made it into a quote from the charging US Attorney:
“As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFT’s, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money,” [Williams] continued.
There you have it. Rug pulls are now a term of art at the Justice Department, and can be charged as wire fraud and money laundering, I guess.
Short Cons
MarketWatch - “A former administrator at the Yale University School of Medicine has pleaded guilty to stealing $40 million from the school in a nearly decade-long computer and electronics purchasing fraud.”
ProPublica - “A ProPublica review found that such ratings have come to serve as shadow credit scores for renters. But compared to credit reporting, tenant screening is less regulated and offers fewer consumer protections — which can have dire consequences for applicants trying to secure housing.”
NPR - “More than 70 businesses were listed as employers on these fake profiles. Several told NPR they had hired outside marketers to help with sales. They said they hadn't authorized any use of computer-generated images, however, and many were surprised to learn about them when NPR asked.”
Defector - “This is the crux of the appeal of so-called “play-to-earn” games, blockchain-based games that allow players to earn tokens or NFTs through their work in the game, which can then be exchanged for other forms of currency.”
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