Press release issued on 10. 4. 19
WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) joined 39 of her Senate colleagues in calling out the Trump administration on its actions to undermine health insurance protections for Americans with pre-existing medical conditions. The letter calls on the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) to protect people with pre-existing conditions and limit short-term “junk” health insurance plans that lack essential benefits and financial protections.
“We have heard from patients, physicians, independent experts, and other health care stakeholders that individuals with pre-existing conditions are being negatively impacted by your administration’s actions. More recently, we have seen the real world negative impact on individuals who have unknowingly enrolled in these deceptively marketed junk plans,” wrote the senators.
In the letter, they pointed to stories of Americans harmed by the proliferation of junk health insurance plans.
“Just this month, Bloomberg reported Arizona resident David Diaz unknowingly purchased a short-term health plan that did not cover pre-existing conditions and placed ambiguous limits on emergency room care and other essential health care services,” the senators continued. “His family has been left with hundreds of thousands of dollars in medical debt. The Washington Post similarly reported on Jesse Lynn, who purchased a short-term health plan not realizing his back problem would be considered a pre-existing condition. Jesse’s insurance company refused to cover his care – forcing his family into bankruptcy.”
The letter comes in response to a Trump administration rule that allows states to not uphold federal consumer protections in the Affordable Care Act, while using taxpayer dollars to subsidize junk insurance plans. Under this rule, states can allow insurance companies to discriminate against Americans with pre-existing conditions by increasing costs and limiting coverage. The benefits excluded from these junk plans can include prescription drugs, emergency room visits, maternity care, and mental health care.
“The administration’s rule on state waivers allows taxpayer dollars to go to these junk plans, accelerating the problems we are already seeing with junk plans and leaving fewer resources for people who purchase high quality insurance,” the letter continues. “Additionally, the administration’s new rule weakens coverage by allowing waivers that increase premiums and out-of-pocket costs for those who need health care most. We have worked tirelessly to protect individuals with pre-existing conditions from barriers to coverage. We urge you to do the same, including by limiting the proliferation of short-term junk plans and ensuring that consumers in every state are protected by federal consumer protections for people with pre-existing conditions.”
Senator Cantwell has long supported efforts to help Americans better afford health coverage while ensuring that plans cover essential benefits. She strongly opposed the Trump administration and congressional Republicans’ repeated efforts to repeal the Affordable Care Act and take health care access away from millions of Americans. Cantwell has previously spoken out on the Senate floor against junk health insurance plans, highlighting the harm they have caused to many Americans.
“The state of Washington tried this… a group of state legislators allowed these junk plans to be sold along with compliant plans. Guess what happened? Nearly all of the insurers in our state pulled out of the individual insurance market and a death spiral ensued. Why? Because the cost then of that individual market was so high and so great, they couldn't service it,” Cantwell said in the floor speech.
EYMAN ASSOCIATES ORDERED TO PAY $1 MILLION IN AG CAMPAIGN FINANCE CASE.
Press release from the Washington State AG office. Issued 9. 30. 19
OLYMPIA — A Thurston County Superior Court judge late yesterday ordered for-profit signature gathering firm Citizen Solutions and its principal, William Agazarm, to collectively pay more than $1 million for their role in deceiving Washingtonians by funneling campaign donations to Tim Eyman.
Attorney General Bob Ferguson filed a campaign finance lawsuit against all three defendants in 2017, accusing Citizen Solutions and Agazarm of unlawfully concealing a $308,185 payment to Eyman.
In his order, Judge James Dixon found that Agazarm “personally approved Citizen Solutions’ kickback payment” to Eyman, knowing that Eyman “planned to and, in fact, did use the funds for his own personal expenses and to support the signature gathering effort for a different Eyman-supported initiative, Initiative I-517.”
“The Court finds that the Citizen Solutions Defendants not only knew the extent of Defendant Eyman’s scheme, but actively assisted with his violations, helping him mislead contributors into believing their contributions would go to support ballot initiatives, when in fact, they were benefiting Defendant Eyman personally. Crucially, the Citizen Solutions Defendants assisted Defendant Eyman in laundering payments purportedly for signature gathering, which were made after the signature gathering was completed and accepted by the Citizen Solutions Defendants solely to conceal that they were being funneled to Defendant Eyman.”
The court concludes the violations “are particularly egregious, warranting a substantial penalty.”
“This judgment reflects the serious and intentional violations of Washington’s campaign finance laws committed by Mr. Agazarm and Citizen Solutions,” Ferguson said. “Mr. Agazarm and Citizen Solutions knowingly participated in a scheme to hide how contributions to Tim Eyman’s campaigns were really being used.”
Judge Dixon issued a default judgment Sept. 30 ordering:
Agazarm to pay $150,000 in civil penalties;
Citizen Solutions, LLC to pay $150,000 in civil penalties;
Agazarm and Citizen Solutions jointly to pay $117,500 in unpaid contempt sanctions; and
Agazarm and Citzen Solutions to pay $622,255.67 in costs and fees.
Altogether, the defendants owe a total of $1,039,755 67.
Investigation revealed long history of violations
The Attorney General’s investigation revealed that one of Citizen Solutions’ owners has a history of laundering campaign contributions to conceal from the public how those donations were being spent, going back more than a decade.
For example: In a 2010 letter, Eyman asked for a kickback to compensate him for providing the business of his own political committee, Voters Want More Choices. Eyman also proposed a scheme to increase the kickback payment by padding the price his committee would pay Citizen Solutions per signature for Initiative 1053.
Eyman wrote that the committee “agreed to have Citizen Solutions collect signatures for $2.00 each. Im [sic] doing my best to raise money from the business community at a rate of $2.50 per signature. My goal is to have Voters Want More Choices pay Citizen Solutions the agreed upon $2 per sig plus $150,000 so that you have an extra $150,000 to provide to me.”
Eyman forwarded an email from Citizen Solutions to donors that had originally quoted a price of $2 per signature for I-1053; however, Eyman’s forwarded version altered the price to $2.50.
Eyman created “gift schemes” for Citizens Solutions and its owners to funnel money to him. Records show numerous $13,000 payments to Eyman and members of his family from the owners of Citizen Solutions — the amount that Eyman’s accountant told him was the maximum “gift” he could receive without it being reported to the IRS.
Eyman had Citizen Solutions’ owners divide his kickbacks among his wife, Karen, and their minor children, so none of the checks would be more than $13,000. According to Karen Eyman’s deposition, she and the children were unaware of the payments, even though the checks were made out to them.
Eyman wrote to one of the owners: “You generously gave me $9900 on September 22nd (and a nice bottle of champagne!!) so that leaves $35,100 for the rest of 2012 and still $39,000 for 2013. … I ask that you please schedule a few more lunches from now until December 31st so you can ‘max gift’ by the end of the year. You’re making great progress on this and I continue to be extremely grateful for your continued help on it.”
In a June 5, 2012 email to Citizen Solutions principals, Eyman proposed various schemes to increase his compensation, writing: “For the past 10 years, Citizen Solutions has hitched itself to the ‘Eyman bandwagon’ and it’s worked really well -- but I think it’ll be even better if I jump on the ‘Citizen Solutions bandwagon’ especially as we approach a post-517 initiative environment. I bring something to the table (non-stop initiative campaigns by me and diligent efforts to refer other clients to you) and you two bring something to the table (a successful petitioning operation). We’d be a great team.”
One proposal was an ongoing business partnership in which Eyman would share 1/3 of Defendant Citizen Solutions’ revenue. Alternatively, in his June 5, 2012 email, Eyman proposed that the company pay him $270,000 as a sales commission.
He wrote, “When it comes to the extra $270k, I’m working hard to get it for myself by having it paid to Citizen Solutions.”
Three weeks later, as part of the justification to be provided to Voters Want More Choices to increase their payments, Citizen Solutions would state that exactly that amount was “outstanding on the contract” for Initiative 1185 signatures.
Even after all I-1185 signatures had been paid for on July 3, 2012, Citizen Solutions continued to accept payments, including: $27,150 from the Washington Beer and Wine Distributors Association, $45,000 from the Association of Washington Business Political Action Committee, and $170,825 from Eyman’s committee, Voters Want More Choices.
Citizen Solutions forwarded 100 percent of the funds donated for I-1185 signature gathering after July 3, 2012 to Eyman.
Case history
In September of 2015, the Washington State Public Disclosure Commission (PDC) referred the case to the Attorney General’s Office for enforcement. The chair of the PDC Commission described the case as “one of the most egregious the PDC has seen.”
In March of 2017, Ferguson filed the campaign finance lawsuit against Eyman, Agazarm and Citizen Solutions, alleging, on Eyman’s part, improper personal use of more than $300,000 in contributions made to political committees, concealment of more than $490,000 in contributions and misleading reporting. Additional concealed contributions were discovered during the state’s investigation since then. The lawsuit also accused Citizen Solutions of participating in a scheme to conceal campaign money the company funneled to Eyman.
On May 17, 2019, Judge Dixon issued a default order against Citizen Solutions, LLCand Agazarm, finding them liable for their role in the scheme. Prior to that, they had been in contempt of court for 456 days, accruing a total of $177,250 in sanctions for failing to comply with court-ordered discovery requirements.
Assistant Attorneys General Eric Newman, Todd Sipe and Paul Crisalli are handling the case.
AG FERGUSON’S INITIATIVE ENDS NO-POACH CLAUSES AT EIGHT MORE CORPORATE CHAINS WITH MORE THAN 1,400 LOCATIONS NATIONWIDE.
Press release issued 9. 30. 19
SEATTLE — Attorney General Bob Ferguson today announced the latest progress in his initiative to end the use of no-poach clauses nationwide. In order to avoid a lawsuit, eight additional corporate chains eliminated their no-poach practices nationwide by entering into legally Worker Protection Initiative logoenforceable agreements to remove the clauses from franchise contracts. The eight chains have 45 locations in Washington and more than 1,400 locations nationwide. This brings the total number of corporate chains that have signed legally binding agreements with Ferguson to eliminate no-poach clauses from all their franchise agreements nationwide to 93, representing more than 140,000 locations.
Any Lab Test Now, Chuck E. Cheese’s, CruiseShipCenters, Engel & Völkers, Krispy Kreme, Mora Iced Creamery, Sizzler and Starcycle signed legally binding commitments to stop enforcing no-poach clauses, and to stop adding no-poach clauses to new franchise contracts. All eight must make these changes nationwide. In addition, they must amend existing franchise agreements in Washington state. The eight join 85 other corporations that have now signed legally enforceable agreements with the Washington State Attorney General’s Office to end the practice.
No-poach clauses appear in franchise agreements between owners of franchises and corporate headquarters. The clauses prohibit employees from moving among stores in the same corporate chain, a practice that economists believe stagnates wages. For example, the clauses would prohibit an employee at one Chuck E. Cheese’s location from accepting employment from another Chuck E. Cheese’s franchise location for higher pay.
With today’s announcement, Ferguson moves closer to his goal of eliminating no-poach clauses nationwide.
“In less than two years, we’ve stopped the use of no-poach clauses at almost 100 corporate chains nationwide,” Ferguson said. “In other words, these unfair clauses are being taken out of thousands of franchise contracts across the country. Millions of workers have benefited andwill continue to benefit from our initiative to unrig this system that hurts workers’ pay and mobility.”
Success of anti-no-poach initiative
Ferguson continues to investigate and obtain legally enforceable agreements from companies outside of the fast-food industry. Today’s agreements, filed in King County Superior Court, include companies within the travel, real estate and restaurant industries.
This group builds on Ferguson’s announcement in October 2018 of the first corporations outside the fast-food industry anywhere in the country to enter into legally enforceable agreements with Ferguson or any other state attorney general to end no-poach practices. Ferguson will continue to pursue other corporate chains across a wide range of industries.
To avoid a lawsuit, the following corporate chains entered into legally binding commitments to eliminate no-poach clauses nationwide:
Any Lab Test Now (6 Washington locations, estimated 112 locations nationwide)
Chuck E. Cheese’s (11 Washington locations, estimated 500 locations nationwide)
CruiseShipCenters (8 Washington locations, estimated 99 locations nationwide)
Engel & Völkers (3 Washington locations, estimated 165 locations nationwide)
Krispy Kreme (8 Washington locations, estimated 343 locations nationwide)
Mora Iced Creamery (4 Washington locations, estimated 8 locations nationwide)
Sizzler (3 Washington locations, estimated 112 locations nationwide)
Starcycle (2 Washington locations, estimated 10 locations nationwide)
These corporations will no longer include no-poach language in new franchise agreements. Additionally, the companies will no longer enforce no-poach provisions currently included in franchise agreements at more than 1,400 locations nationwide where tens of thousands of workers are employed. Finally, the companies must remove current no-poach clauses from their Washington contracts in the next 60 to 120 days, and their nationwide contracts as they come up for renewal.
Any Lab Test Now, Chuck E. Cheese’s, Krispy Kreme and Sizzler stopped adding no-poach provisions to their franchise agreements before the Attorney General’s investigation into the companies began. The companies’ legally binding commitment ensures that all four will remove no-poach clauses from existing franchise agreements and cannot use the clauses again in the future.
No-poach lawsuit
In October 2018, Ferguson filed his first lawsuit against restaurant chain Jersey Mike’s for its use of no-poach clauses. Unlike dozens of other corporate chains, Jersey Mike’s refused to enter into a legally binding agreement to end these practices nationwide, and Ferguson filed a lawsuit against the company.
Ferguson resolved that lawsuit in August. In order to avoid trial, Jersey Mike’s ultimately agreed to eliminate no poach clauses from all its corporate franchise agreements, and also paid the state of Washington $150,000. Had Jersey Mike’s agreed to Ferguson’s original offer, they would not have had to make any payment to the state of Washington.
Background on Ferguson’s initiative to eliminate no-poach clauses
As a result of Ferguson’s initiative to eliminate no-poach clauses, 93 chains have signed legally binding commitments to end no-poach practices nationwide at an estimated 143,000 locations. The changes benefit millions of workers across the U.S.
The initiative began with a September 2017 article in the New York Times titled “Why Aren’t Paychecks Growing? A Burger-Joint Clause Offers a Clue.” The article focused on the downward pressure no-poach agreements among fast-food franchises place on wages. After reading the article, Solicitor General Noah Purcell referred the subject to Attorney General Ferguson. The article cited research by Princeton economists Alan Krueger and Orley Ashenfelter highlighting the harms to workers caused by the practice.
Professors Krueger and Ashenfelter examined franchise agreements for 156 of the largest franchise companies in the United States. The franchise agreements for companies with more than 500 locations operating in the U.S. were analyzed for any language “restricting the recruitment and hiring of employees from other units within the franchise company.”
The economists assert that “no-poach” clauses reduce opportunities for low-wage workers and stagnate wages, harming workers in Washington and across the nation.
In January 2018, Ferguson’s Antitrust Division launched an investigation into no-poach clauses. The Attorney General’s Office investigated the corporations on the economists’ list to determine which fast-food companies used no-poach clauses and were present and employed people in Washington. Out of the original restaurants the Antitrust Division contacted, three chains — Hissho Sushi, Long John Silver’s and Wendy’s — did not use no-poach provisions in their franchise contracts. In addition to the companies announced today, Ferguson negotiated an end to no-poach practices with 46 corporate chains in 2018, including McDonald’s, Anytime Fitness, Sport Clips and La Quinta. Ferguson’s initiative has continued this year with 47 more chains. For more information, click here.
In September 2018, Ferguson announced that he was expanding his investigation to industries beyond fast-food restaurants, starting with all the remaining companies on Krueger and Ashenfelter’s list. Ferguson also announced that he was beginning to investigate fast-food chains that economists Krueger and Ashenfelter did not include in their analysis because they have fewer than 500 stores nationwide. The first chains outside of the restaurant industry to end no-poach practices included gyms, automotive services and convenience stores.
Corporate chains that do not agree to end the practice face a lawsuit from Ferguson’s office. In October 2018, the Attorney General filed the first lawsuit by a state attorney general against a company for using no-poach clauses. That case resolved in August 2019.
The investigation now continues across several industries that utilize no-poach clauses in their franchise contracts, including:
Automotive services
Child care
Cleaning services
Convenience stores
Custom window treatment services
Electronics repair services
Home healthcare services
Hotels
Insurance adjustor services
Parcel services
Tax preparation
Travel services
Since the investigation began in early 2018, Ferguson’s Antitrust Division has successfully negotiated an elimination of no-poach clauses at 93 companies nationwide, including the eight announced today.
Senior Assistant Attorney General Jonathan Mark and Assistant Attorneys General Eric Newman, Rahul Rao and Justin Wade of the Attorney General’s Antitrust Division are leading the no-poach initiative.
The Office of the Attorney General's Antitrust Division is responsible for enforcing the antitrust provisions of Washington's Unfair Business Practices-Consumer Protection Act. The division investigates and litigates complaints of anticompetitive conduct and reviews potentially anticompetitive mergers. The division also brings actions in federal court under the federal antitrust laws. It receives no general fund support, funding its own actions through recoveries made in other cases.
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WORLD NEWS HEADLINES
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A spike in the number of refugees reaching Greek island reception centres is likely to worsen the situation in already “dangerously overcrowded” facilities there, the UN refugee agency said on Tuesday.
Strict alcohol laws which cut intake more than 40 per cent in Russia, linked to historically high life expectancy.
Strict laws put in place by the Russian authorities since 2003 have resulted in a significant drop in alcohol-related deaths nationwide, a report from the World Health Organization (WHO) revealed on Tuesday.
WHO and UNICEF in campaign to protect 1.6 million in Sudan from cholera
UN agencies are working with the authorities in Sudan to protect more than one million people from cholera, an infectious disease which can kill within hours if left untreated.
UN expresses concern following wave of street protests in Iraq and elsewhere
The United Nations is urging authorities in Iraq to allow citizens to exercise their right to freedom of expression after the security forces opened fire on mass anti-government protests which began earlier this week.
Ground-breaking clean air protocol to guard human health and the planet, enters into force.
European and North American countries will take a major stride in cleaning up the atmosphere next Monday, 7 October, through the implementation of an amended legally binding treaty to limit the amount of emissions polluting the air.
FIFA and UN kick off healthy living campaign, to harness global game’s ‘huge potential’
At a ceremony held in Geneva on Friday, the World Health Organization (WHO) and football’s world governing body, FIFA, announced that they are teaming up to raise awareness of the benefits of a healthy lifestyle.
UN commits to help Pacific island agriculture adapt and survive climate crisis.
The UN’s Food and Agriculture Organization (FAO) pledged on Friday to work hand in hand with the people of the Pacific to improve nutrition, and mitigate the worst effects of climate change, which pose an existential threat to many island nations across the region.
‘We need to stand up now’ for the elderly: urges UN rights expert on World Day.
In the coming decade, the number of persons aged 60 or over is projected to grow by 46 per cent, making the increase in those officially classified as elderly, one of the “most significant transformations of this century,'' the United Nations declared on Tuesday, marking the International Day of Older Persons.
Constitutional Committee breakthrough offers ‘sign of hope’ for long-suffering Syrians.
There is a “sign of hope for the long-suffering Syrian people” as a Syrian-led, Syrian-owned, credible and inclusive Constitutional Committee is set to start deliberations next month, the United Nations Special Envoy for the country told the Security Council on Monday.
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IN THIS WEEK'S EDITION
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PAGE 2
Cantwell, Colleagues Call for Inquiry into Uber, Lyft’s Continued Use of Vehicles with Open Safety Recalls.
PAGE 3
CONGRESSMAN KILMER ON TRUMP IMPEACHMENT.
PAGE 4
Inslee, Ferguson statement on appeals court decision on net neutrality.
PAGE 5
Treasury Department and FHFA Modify Terms of Preferred Stock Purchase Agreements for Fannie Mae and Freddie Mac.
PAGE 6
Cantwell Announces New Federal Funding for Green Lake Community Boathouse Upgrade Project
PAGE 7
Kilmer, Brooks Introduce Legislation to Give Students in Need Access to More Financial Aid.
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