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Feed aggregator
Families Shoulder Heftier Burdens as College Debt Swells

Pro Publica - January 3, 2013 - 9:38am

by Marian Wang

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It's been a year of eye-popping records for student debt. Outstanding student loan debt surpassed credit card debt, with one
government estimate pegging total student loan debt at more than $1 trillion.

Such staggering figures drew renewed attention to the fact that rising higher education costs and falling government support for
state colleges and universities has burdened individual students and their families with immense debt — all at a time when new
graduates face anemic prospects for getting a decent job.

Parents Take on Federal Loans for Their Children
Increasingly, the debt burden falls on parents, not just students. As we reported with The Chronicle of Higher
Education, the federal Parent Plus loan program allows parents to borrow big from the federal government to fund
their children's college education when grants, scholarships and federal student loans (which are capped at strict dollar
amounts) don't suffice. Borrowers with low income, or even no income at all, can still get the loan so long as they pass
a check on their credit history.

The Parent Plus program has increasingly been the solution for families coming up short on funds for college — but as we noted, it
can be dangerous when families, desperate to give their child the advantages of a costly college education, borrow more than they
can handle.

Selected articles on the college debt crisis:

 No Income? No Problem! How the Gov’t Is Saddling Parents with College Loans They Can’t Afford
 Grieving Father Struggles to Pay Dead Son’s Student Loans
 Student Loan Borrowers Dazed and Confused by Servicer Shuffle


College financial aid offices — which typically see their role as merely laying out financial aid options — are often
reluctant to advise families on how much is too much to borrow. But some highlight the parent loans by including them
in a student's financial aid package in a suggested amount — often the amount needed to cover the "gap" in need. At
some schools, that amount can easily reach tens of thousands of dollars for just one year, let alone four. With no check
on the borrower's income or ability to repay the loan, many families sink into hopeless debt — which, like all federal
student loans, can almost never be eliminated through bankruptcy.

Private Student Loan Pains Continue

Private student loans can also saddle generations with debt when parents co-sign on the loans taken out by their
children. As we reported, that's what happened to Francisco Reynoso, a California gardener who made just over
$21,000 last year. He co-signed on six figures in private student loans for his son. Several months after the younger
Reynoso graduated, he died in a car accident, leaving his father mired in grief and debt.


Private student loans — which for years had been unregulated — generally carry fewer consumer protections than government
loans. If Reynoso's loan had been federal, his debt would have been cancelled upon his son's death. Instead, as we reported, he was
left on the hook — unsure of what company to appeal to because his loans had changed hands so many times. (As of this writing,
Reynoso's four years of financial uncertainty over his debts are nearing an end. One of his debts was discharged through the
bankruptcy process. The other debt has been settled in a confidential agreement with the lender. See our latest story.)

Borrowers on the hook for private student loans don't have many places to turn when lenders refuse to grant flexibility. They're not
affected by the Obama administration's efforts to help federal student loan borrowers manage loan payments — see below. And, of
course, student loans are one of the few debts that generally cannot be shed in bankruptcy. Both the Consumer Financial Protection
Bureau and some members of Congress have suggested that this should be changed for private student loans, but the proposal
hasn't seen much movement.

What the Obama Administration Has Done
This fall, the Obama administration finalized regulations expanding an existing federal program to help struggling borrowers with
federal loans. It's worth noting that the measures — said to be a windfall for some borrowers, especially those heading to graduate
school — won't be of much help for borrowers who have already fallen behind on their federal student loans. In order to qualify for
the current income-based repayment program or the new version, called "Pay As You Earn," borrowers must be current on their
loans.



As we reported, the Obama administration also recently adopted a crucial reform to help disabled borrowers get their
federal student loans forgiven more easily by eliminating some of the red tape. Now, the Education Department has
agreed to accept the assessment of the Social Security Administration in determining whether a borrower is disabled
and thus eligible for loan forgiveness. Its previous, more dysfunctional system had required a second assessment of
disability that kept many borrowers deprived of the benefits to which they were entitled.


We've also reported on how throughout this year, the Education Department has continued its seismic shift in the
servicing of student loans — steadily transferring more than a million borrowers to private companies with contracts to
handle the day-to-day management of federal student loan accounts. As we've reported, the shift will roughly triple
the total number of companies handling loans from a year ago, causing confusion for many borrowers caught in the
shuffle and making it harder for the government to oversee its servicers.

In the past year, the new consumer watchdog agency, the Consumer Financial Protection Bureau, began wielding new regulatory
power over private student loans. The CFPB has published a number of reports detailing abuses in the private loan market and has
been taking all manner of student-loan complaints from consumers.

We'll continue covering student loan stories in the new year. So if you or someone you know has a story about any of the issues
mentioned above — from borrowing to servicing to the loan relief programs — share them with us. Or if you work in financial aid or
at a student loan company, sign up to be one of our experts.

Categories: Media, Politics

Getting more mileage from your ideas

CJR Daily - January 3, 2013 - 5:50am
I'm terrible at writing two to three stories from one reporting trip. How do I get better at this? —Anonymous If you’re a freelancer
who’s writing for a range of publications, think about how you can switch up the format to use your reporting to appeal to different
editors. What makes a good Q&A at one place could be folded...
Categories: Media

Andrew Sullivan's bold experiment

CJR Daily - January 3, 2013 - 5:50am

The great journalism paywall debate has picked up steam lately as more newspapers move away from the idea of giving away
content for free in favor of a metered model for digital subscriptions, which charges readers after allowing a limited amount of
access. But the decision announced yesterday by Andrew Sullivan, one of the grandfathers of the blogging business,...
Categories: Media
Watchdogs to IRS: Reject Rove Group’s Tax Application

Pro Publica - January 2, 2013 - 4:43pm

by Justin Elliott


Two watchdog groups are calling on the IRS to reject Crossroads GPS’ request to be recognized as a social welfare nonprofit.


Democracy 21 and the Campaign Legal Center, nonpartisan outfits that favor tighter campaign finance regulations, wrote a letter to
the tax agency today citing ProPublica’s recent reporting on Crossroads’ 2010 IRS application. The application said that the group’s
activities seeking to influence elections would be “limited in amount, and will not constitute the organization's primary purpose.”

In today’s letter, Democracy 21 and the Campaign Legal Center called those statements by Crossroads GPS “simply not credible, in
light of the actual practices of the organization and the tens of millions of dollars Crossroads GPS spent on campaign ads since
then.”

Conceived by Karl Rove, Crossroads GPS was one of the biggest outside spenders in the 2012 elections, reporting more
than $70 million in expenditures to the Federal Election Commission.

Recognition as a social welfare nonprofit is important for Crossroads because it allows the group to shield the identity of its donors.
Under tax rules, such groups are allowed to spend money on political campaigns but must be primarily engaged in promoting social
welfare.

Campaign Legal Center Executive Director Gerald Hebert said in a statement accompanying today’s letter, “The application filed
with the IRS by Crossroads GPS is laughable in the face of the growing body of evidence against the pretense that Crossroads GPS is
a ‘social welfare’ organization.”

Crossroads GPS spokesman Jonathan Collegio responded: “This sounds like the 25th identical letter that the partisans and
ideologues at the Campaign Legal Center have sent to the IRS, and it doesn’t merit anyone’s attention.”

We’ve inquired with the IRS as to whether Crossroads’ has been recognized as a social welfare nonprofit — as of mid-
December it had not — and we will update this post if we hear back.

Categories: Media, Politics

Controversial Dark Money Group Among Five That Told IRS They Would Stay Out of Politics, Then Didn’t

Pro Publica - January 2, 2013 - 10:34am

by Kim Barker

Jan. 4: This post has been updated.

Five conservative dark money groups active in 2012 elections previously told tax regulators that they would not engage in politics,
filings obtained from the IRS show.
The best known and most controversial of the groups is Americans for Responsible Leadership, an Arizona-based
organization. Not long after filing an application to the IRS pledging — under penalty of perjury — that it would not
attempt to sway elections, the group spent more than $5.2 million, mainly to support Republican presidential
candidate Mitt Romney.

The California Fair Political Practices Commission has accused Americans for Responsible Leadership of "campaign
money laundering" for failing to disclose the origin of $11 million it funneled to a group trying to influence two state
ballot propositions.

The other groups that filed applications for IRS recognition of tax-exempt status saying they wouldn't engage in politics are Freedom
Path, Rightchange.com II, America Is Not Stupid and A Better America Now.

Much hangs on these applications, all of which are still pending. The tax code allows social welfare nonprofits to engage in political
activities as long as public welfare, not politics, is their primary purpose. If the IRS ultimately decides not to recognize these groups,
they could have to disclose their donors.

Such decisions, along with IRS' oversight of social welfare nonprofits overall, have come under increasing scrutiny as
these groups have assumed an ever larger role in elections, pouring an unprecedented $322 million into the 2012
cycle.

ProPublica has documented how some social welfare nonprofits underreport their political activities, characterizing them to the IRS
as "education" or "issue advocacy." Other groups have popped up, spent money on elections and then folded before tax regulators
could catch up with them.



The IRS sent the applications submitted by the five groups to ProPublica in response to a public records request,
although the agency is only required to supply these records after groups are recognized as tax-exempt. (ProPublica
also obtained the pending application of Crossroads GPS, the dark money group launched by GOP strategist Karl Rove
that spent more than $70 million on the 2012 elections, which we wrote about separately.)

The IRS confirmed that none of the groups had been recognized as tax-exempt and referred ProPublica to its earlier response about
Crossroads' application. In that email, the IRS cited a law that says publishing unauthorized tax returns or return information is a
felony punishable by up to five years in prison or a fine of up to $5,000, or both.

A lawyer for Americans for Responsible Leadership, Jason Torchinsky, cited the same law in an email.

"If you willfully to (sic) print or publish in any manner any information about Americans for Responsible Leadership that
you do not lawfully possess — and which may or may not be complete — you will be doing so in violation of (the law)
and we will not hesitate to report such unlawful publication to the appropriate law enforcement officials," Torchinsky
wrote.

The other groups for which ProPublica obtained IRS applications did not respond to calls or emails for comment.

ProPublica has published the applications of all five groups, but redacted parts to omit financial information.
"As we said when we published our story on the Crossroads application, ProPublica believes that the information we are publishing
is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication,"
said Richard Tofel, ProPublica's president.

Social welfare nonprofits do not need IRS recognition, though most opt to apply for it. They can operate, and spend money on
politics, while their applications are under consideration.

Americans for Responsible Leadership incorporated in Arizona in July 2011 and applied for IRS recognition last
September.

By that time, the group had already spent $5,300 on get-out-the-vote efforts for Sen. Orrin Hatch, R-Utah, and given
$57,500 to two Republican political committees in Arizona.

Nonetheless, its IRS application said the group hadn't spent any money to influence elections, nor would it. It also said
the group planned to split its efforts between influencing policy and educating the public, in part by "promoting a more
ethical and transparent government."


According to Federal Election Commission filings, the group spent more than $5.2 million on campaign activities in
October and early November, mostly on phone calls urging the defeat of President Barack Obama. In addition to the
millions it pumped into California ballot measures, the group also spent $1.5 million on two Arizona propositions.

While the IRS doesn't classify spending on ballot measures as political, California election authorities do.

When ProPublica read the group's description of its activities on its IRS application to Ann Ravel, the chairwoman of the California
Fair Political Practices Commission, she laughed.

"Wow," she said, upon hearing that the group said it would not try to influence elections. "That's simply false."

The California commission pressed Americans for Responsible Leadership to identify who contributed the funds it aimed at the
California ballot measures, a battle that reached the state Supreme Court. Just before Election Day, the court ordered the group to
reveal its donors.


So, who were they? Another Arizona social welfare nonprofit, which got its money from a Virginia trade association, which also
didn't have to report its donors. California regulators are still trying to peel back the group's layers, to see who's behind the money.

Update (Jan. 4): In a Jan. 2 email to the editor at the Arizona Capitol Times, Jason Torchinsky, an attorney for Americans for
Responsible Leadership, said the group had submitted an amended application for recognition of tax-exempt status to the IRS that
"corrected the error that was the central feature" of ProPublica's story.

Contacted by ProPublica, Torchinsky said he could not confirm that this was accurate without his client's authorization. Torchinsky
also would not say when the group submitted the amended filing, or what was changed.

ProPublica has requested that Americans for Responsible Leadership provide us with the corrected application or give the IRS
permission to do so. So far, we have not received a reply.
Categories: Media, Politics

Podcast: How the Wal-Mart Bribery in Mexico Investigation Came Together

Pro Publica - January 2, 2013 - 9:31am

by Mike Webb

For our first MuckReads podcast of 2013, we invited New York Times reporter David Barstow to talk to our editor Steve Engelberg
about his investigation into how Wal-Mart used bribery to expand their business operations in Mexico.

Barstow and Engelberg talk about how the investigation got started, how he proved the validity of the information he received, why
Mexico's FOIA/public records law was very helpful, the impact the reports have already had and ultimately, why looking into foreign
bribery was important.


When asked how this investigation compares to some of the other Pulitzer Prize-winning work he's done, Barstow said, "This one
had the highest degree of difficulty I think of any story I've ever done. Because it required, number one, penetrating to the highest
reaches of a major corporation which is difficult to do in and of itself. But then it takes the added complexity of trying to understand
a company's operations in a place like Mexico where the rules are incredibly complicated. You have to understand and learn
everything that goes into the permitting process for a new Sam's Club or a Wal-Mart. We're talking 15 to 20 permits per store issued
by different agencies and different bureaucracies and tearing all of that apart in a place like Mexico and then lining it up against the
reporting and the documentation that we're prying loose from the bowels of Wal-Mart de Mexico is a really unbelievable endeavor.
At this point, I'm sure I've looked at well over 100,000 pieces of paper for this line of reporting. And so I think, in terms of degree of
difficulty, it's the most difficult thing I've ever taken on."

Categories: Media, Politics

Unraveling the Freddie-Fannie Tangle

Pro Publica - January 2, 2013 - 9:09am

by Jesse Eisinger and Cora Currier

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In the aftermath of the financial crisis, American taxpayers poured $187.5 billion into two huge but poorly understood companies:
Freddie Mac and Fannie Mae. Now controlled by the government, the companies play an even larger role in the economy than they
did before the crisis and their bailout, but they are riven by conflicts of interest and clashing goals. Are they private companies, only
out to increase their profits, or are they instruments of government policy, dedicated to keeping home ownership available?

ProPublica has focused on the tensions within Freddie Mac and Fannie Mae, as well as those besetting their regulator, the Federal
Housing Finance Agency (FHFA).
NPR's Chris Arnold and ProPublica revealed that Freddie Mac had placed multibillion-dollar bets that pay off only if homeowners
stay trapped in expensive mortgages with interest rates well above current rates. Freddie began increasing these bets dramatically
in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.

The scoop, "Freddie Mac Bets Against American Homeowners," caused an immediate firestorm. As countless media outlets picked
up the story, multiple senators criticized the company and wrote to Edward DeMarco, the acting head of the FHFA, calling for an
investigation into the transactions and the company's activities.



The FHFA responded, saying it had told Freddie not to make any more transactions in the kind of securities at issue,
called inverse floaters. The agency said it had "identified concerns regarding the controls, including risk management,
surrounding the inverse floaters." The agency did not specify those "concerns," but said Freddie agreed in December
that "these transactions would not resume pending completion of [FHFA's] examination work." The statement also said
that Freddie had ceased making the deals earlier in 2011 but did not explain why.

Selected articles on the foreclosure crisis:

 Freddie Mac Bets Against American Homeowners
 Why Freddie Mac Resisted Refis
 Meet the Obscure Federal Regulator Who’s Not Helping Homeowners
 We've Nationalized the Home Mortgage Market. Now What?


In response to a letter Sen. Robert Casey, D-Pa., sent to DeMarco, the regulator expanded on its reasons for shutting down the
transactions a few days later, saying that "the risk associated with these transactions is inconsistent with FHFA's goals of having
Freddie Mac reduce its risk profile and avoid unnecessary complexity that requires specialized risk management practices."

In September, the inspector general of FHFA concluded that there was no deliberate or coordinated effort by Freddie
Mac to keep homeowners trapped in high-interest mortgages in order to profit from trades pegged to those rates. A
firewall is supposed to separate Freddie employees who make trades from those who set policy for homeowners. In its
investigation, the inspector general found no evidence that the firewall had been breached — but conceded it had not
independently evaluated the integrity of the firewall but instead relied on interviews with employees who said no one
had violated the wall.

Penetrating Freddie's boardroom, ProPublica exposed the internal debates over the company's refi programs. Many
economists were pushing for mass refis, because they said they would reduce foreclosures and boost the economy.
But some Freddie board members feared they would cut into company profits. In closed door meetings, two
Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason: They
regarded it as a backdoor economic stimulus.
In a recent explainer, we looked at how with little discussion or planning, we have nationalized the American mortgage
market and what the ramifications of that are. Before the financial crisis, the federal government backed roughly 30
percent of mortgages. Now, the government is backing about 90 percent of new mortgages, with Fannie and Freddie
backing the lion's share. What do we do about Fannie Mac and Freddie Mac? Should the government keep insuring so
many mortgages? And how do we resolve the conflicts of interest and competing goals that beset Freddie and Fannie?
A bipartisan centrist consensus is forming to solve the problem by heading down a path that offers the least resistance
but could be the most dangerous: returning to what existed before the housing market imploded.

ProPublica also focused on the FHFA, which regulates Fannie and Freddie, and DeMarco, its acting head. A coalition of progressive
groups, housing advocates, Democrats and, later, the White House pushed DeMarco to allow Fannie and Freddie to cut the size of
mortgage balances, known as principal reduction. Many economists argue that such debt relief is the key for helping people get
back on their feet and the economy going again.


The fight over principal reduction highlights the conflicting goals at Fannie and Freddie. DeMarco has remained steadfastly opposed
to principal reductions, arguing that they would be too costly — both to the companies' profit margins and to the taxpayers, whom
Freddie and Fannie are still paying back. Critics say DeMarco is putting the Fannie and Freddie's financial interests above struggling
homeowners'. His opposition to principal reduction has stymied White House plans to encourage mass write-downs, because
Fannie and Freddie together own or guarantee half of the country's mortgages.

As part of its revamped refinancing effort, Home Affordable Refinance Program (HARP), the Treasury Department
agreed to supplement Fannie and Freddie to write down principal. In a Propublica/NPR scoop, we revealed that Fannie
and Freddie ran the numbers and determined that principal reductions would actually be profitable for the companies,
undercutting DeMarco's stated reason for opposing them.

Nevertheless, DeMarco subsequently decided against doing them, citing risks that such reductions would cause other homeowners
to voluntarily default on their mortgages.

Because FHFA is an independent regulator, the White House can't simply fire DeMarco over a policy dispute. As an acting director,
DeMarco could have been replaced by a new Obama appointee, but the administration's initial pick withdrew himself from
consideration as Senate Republicans signaled they would oppose him. The Wall Street Journal recently reported that the White
House hopes to have a new nominee early next year.

Categories: Media, Politics

Opening Shot

CJR Daily - January 1, 2013 - 11:00pm
A fter Superstorm Sandy swamped the nation’s media capital in October, some shops, such as the Daily News and American Media,
even had to relocate long-term. In the aftermath came the stories about climate change—seawalls, wetlands, whether we can
afford to keep developing coastal property, and so on. Two major reports due out in...
Categories: Media

'Survival of the wrongest'

CJR Daily - January 1, 2013 - 11:00pm
In late 2011, in a nearly 6,000-word article in The New York Times Magazine, health writer Tara Parker-Pope laid out the scientific
evidence that maintaining weight loss is a nearly impossible task—something that, in the words of one obesity scientist she quotes,
only “rare individuals” can accomplish. Parker-Pope cites a number of studies that reveal the various...
Categories: Media

Obamacare: round two

CJR Daily - January 1, 2013 - 11:00pm

The Affordable Care Act, a.k.a Obamacare, is the law of the land, and the re-election of the president ensures that its far-reaching
provisions will take effect as scheduled in 2014. What does that mean for journalists? It presents an opportunity—and an
obligation—to deliver the clear and thorough reporting that was missing during the debate on the Act itself....
Categories: Media

Chemical reaction

CJR Daily - January 1, 2013 - 11:00pm
The tattoo on Cara Santa Maria’s inner right forearm isn’t exactly the kind of ink drunken sailors get. “Yeah, this is Archeopyeryx
Lithographica,” she says of the pencil-length array of bones. “It’s actually the Berlin specimen, which is a pretty famous transitional
fossil, because some people call it a bird, some call it a dinosaur. Personally, I like...
Categories: Media

You've got shale!

CJR Daily - January 1, 2013 - 11:00pm
The story of Janet McIntyre, the woman in the photo above, embodies many of the reasons why Brian Cohen and his colleagues at
the Marcellus Shale Documentary Project decided to keep working, even though the project officially ended in October, following
an exhibit of their photographs, a panel discussion, and the publication of a book of photos...
Categories: Media

Safe at the plate?

CJR Daily - January 1, 2013 - 11:00pm
Four-year-old Jake Hurley was wearing a red power tie when I first met him on Capitol Hill in October 2009. He and his dad, Peter, a
police officer from Oregon, had just finished a long day of lobbying for the Food Safety Modernization Act, a bill that aimed to
strengthen federal food safety regulation. Earlier that year, Jake...
Categories: Media

Can You Fight Poverty With a Five-Star Hotel?

Pro Publica - January 1, 2013 - 11:00pm

by Cheryl Strauss Einhorn, Special to ProPublica

Jan. 4: The International Financial Corporation of the World Bank responded to this article. Read its response and our
answer.
This story was co-published with Foreign Policy.

Accra is a city of choking red dust where almost no rain falls for three months at a time and clothes hung out on a line dry in 15
minutes. So the new five-star Mövenpick hotel affords a haven of sorts in Ghana’s crowded capital, with manicured lawns, amply
watered vegetation, and uniformed waiters gliding poolside on roller skates to offer icy drinks to guests. A high concrete wall rings
the grounds, keeping out the city’s overflowing poor who hawk goods in the street by day and the homeless who lie on the
sidewalks by night.

The Mövenpick, which opened in 2011, fits the model of a modern international luxury hotel, with 260 rooms, seven floors, and
13,500 square feet of retail space displaying $2,000 Italian handbags and other wares. But it is exceptional in at least one respect: It
was financed by a combination of two very different entities: a multibillion-dollar investment company largely controlled by a Saudi
prince, and the poverty-fighting World Bank.


The investment company, Kingdom Holding Company, has a market value of $12 billion, and Forbes ranks its principal owner, Prince
Alwaleed bin Talal, as the world’s 29th-richest person, estimating his net worth at $18 billion. The World Bank, meanwhile,
contributed its part through its International Finance Corporation (IFC), set up back in 1956 to muster cheap loans and other
financial support for private businesses that contribute to its planet-improving mandate. “At the World Bank, we have made the
world’s most pressing development issue—to reduce global poverty—our mission,” the bank proclaims.


Why, then, did the IFC give a Saudi prince’s company an attractively priced $26 million loan to help build the Mövenpick, a hotel the
prince was fully capable of financing himself? The answer is that the IFC’s portfolio of billions of dollars in loans and investments is
not in fact primarily targeted at helping the impoverished. At least as important is the goal of making a profit for the World Bank.

I reached this conclusion after traveling to Ghana—in many ways typical of the more than 100 countries where the IFC works—to
see firsthand the kinds of problems the World Bank’s lenders are supposed to tackle and whether their efforts are really working on
the ground. I pored through thousands of pages of the bank’s publicly available reports and financial statements and talked to
dozens of experts familiar with its performance in Ghana and many other countries.


In case after case, the verdict was the same: The IFC likes to work with huge corporations, funding projects these companies could
finance themselves. Its partners are billionaires and massive multinationals, from oil giants like ExxonMobil to Grupo Arcor, the
huge Argentine candy-maker. Its projects include not only glitzy hotels and high-end shopping malls, but also gritty gold and copper
mines and oil pipelines, some of which end up benefiting the very corrupt, authoritarian regimes that the rest of the World Bank is
urging to change. Nearly a quarter of the IFC’s paid-in capital from member governments—now standing at $2.4 billion—came from
U.S. taxpayers, and every president in the World Bank’s 69-year history has been an American. But the United States has had little
complaint with these practices, even when they have become a subject of public controversy.



Not long ago, the World Bank’s internal watchdog sharply criticized the IFC’s approach, saying it gives little more than
lip service to the bank’s poverty-fighting mission. The report, a major 2011 review by the bank’s Independent
Evaluation Group, found that fewer than half the IFC investments it studied involved fighting poverty. “[M]ost IFC
investment projects generate satisfactory returns but do not provide evidence of identifiable opportunities for the
poor to participate in, contribute to, or benefit from the economic activities that the project supports,” the report
concluded. In fact, it said, only 13 percent of 500 projects studied “had objectives with an explicit focus on poor
people,” and even those that did, the report found, had a “limited” impact. The IFC did not dispute the conclusions.
There is certainly need in countries like Ghana, whose per capita GDP ranks in the bottom third of the world, with life expectancy in
the bottom 15 percent and infant mortality in the bottom fourth. The IFC committed about $145 million in loans and equity in
Ghana just in fiscal year 2012. Yet Takyiwaa Manuh, who advises the Ghanaian government on economic development as a member
of the National Development Planning Commission, told me she doesn’t think of the IFC’s investments “as fighting poverty. Just
because some people are employed, it is hard to say that is poverty reduction.”


But the policies continue. Why? Tycoons and megacompanies offer relatively low risk and generally assured returns for the IFC,
allowing it to reinvest the earnings in more such projects. Only a portion of this money ends up benefiting local workers, and critics
contend that the IFC’s investments often work against local development needs.“The IFC’s model itself is a problem,” says Jesse
Griffiths, director of the European Network on Debt and Development (Eurodad), a Belgian-based nonprofit. “The IFC undermines
democracy with its piecemeal, top-down approach to development that follows the priorities of private companies.”


“We’re not saying we’re perfect,” Rashad Kaldany told me. He is a veteran IFC executive and currently its vice president for global
industries. The IFC operates “at the frontier,” he said. “We know that not every project will work. It’s about trying to make a
difference to the poor and about achieving financial sustainability”—twin goals that are challenging in combination.

When it comes to luxury hotels like the Mövenpick in downtown Accra, however, the IFC offers no apology for its
investments, even making the case for them as an economic boon for poor countries. A January 2012 report from the
World Bank says hotels “play a critical role in development as they catalyze tourism and business infrastructure,”
noting its partners include such “leading” firms as luxury chains Shangri-La, Hilton, Marriott, InterContinental—and, of
course, Mövenpick.

In Accra, Mary-Jean Moyo, the IFC’s in-country manager for Ghana, told me the new hotel fights poverty by creating jobs. To
illustrate, she recalled how the Mövenpick’s manager “noticed that a few boys roller-skate on Sundays outside the hotel. The
manager decided to hire them to work at the pool. That is development and helping local people.” How many were hired, I asked.
Six, Moyo responded.

When I spoke with Stuart Chase, the Mövenpick’s manager, he told me that other kinds of investments besides the new hotel he
was clearly proud of would do far more to stimulate Ghana’s economy and reduce poverty. Chase, who has lived and worked in
Ghana for years,mentioned the country’s congested and potholed roads, poor electricity system, limited food supplies, and lack of
trade schools. “There is no hotel school and no vocational training in the country,” he complained. As a result, all the top staff
members among his 300 employees are foreign.

Besides, Accra already has close to a dozen luxury hotels. Before taking over the Mövenpick, Chase managed another nearby five-
star hotel owned by Ghana’s Social Security and National Insurance Trust, the country’s pension system. So when the IFC decided to
finance Prince Alwaleed’s hotel, it was entering into direct competition with the people it claims it wants to lift out of poverty.
Moyo acknowledged to me that the IFC didn’t study the local hotel scene before making this investment, unlike its standard
practice. “We knew the company and had another successful investment in Kingdom that made the Ghana deal attractive to us,”
she said. The other investment? A $20 million deal in 2010 to help develop five luxury venues in Kenya, complete with heated
swimming pools, golf courses, and organized safaris.
U.S. Sen. Patrick Leahy, a Vermont Democrat who sits on the Senate Appropriations subcommittee that has jurisdiction over U.S.
participation in the World Bank, called the Ghana loan “not an appropriate use of public funds” when alerted to it by a 2011
Washington Times article. The U.S. Treasury Department, which administers American participation in the World Bank, defended
the loan, telling the newspaper that the IFC package replaced funding expected from private banks that pulled out when market
conditions soured, putting the entire $103 million project at risk. When I was in Accra in July, however, at least two other major
hotel projects were under construction with private financing obtained in the same period. The prince’s representatives didn’t
respond to requests for comment.

***


Luxury hotels and resorts are hardly the only IFC investments that offer at best limited prospects for serving its poverty-fighting
mandate. Founded just a dozen years after the World Bank itself, the IFC has in recent years become its fastest-growing unit. It now
has a staff of some 3,400 people in 103 countries and made $15 billion in loan commitments in 2012 across about 580
projects—more than double its 2006 total and a figure that’s projected to grow to about $20 billion in the next few years.

The original notion was that while the World Bank was lending directly to poor countries, the IFC would stimulate the
growth of private business, entrepreneurship, and financial markets in some of those same countries by lending to and
investing in for-profit corporations. The founders, notably including a General Foods executive named Robert Garner,
emphasized that the IFC would participate only in projects for which “sufficient private capital is not available on
reasonable terms.”


That concept has become muddied over the years, as well-heeled borrowers with excellent credit have sought to take advantage of
the IFC’s relatively attractive loan terms and other investment vehicles, plus, in some cases, the cachet associated with World Bank
support. The IFC’s growth got a boost in the early 1980s when it was permitted for the first time to raise money from the global
capital markets by issuing bonds. More recently, its growth has accelerated as it has entered new businesses, including trade
finance, derivatives, and private equity, sometimes to the annoyance of private banks with which it competes.


Today, the IFC’s booming list of business partners reads like a who’s who of giant multinational corporations: Dow Chemical,
DuPont, Mitsubishi, Vodafone, and many more. It has funded fast-food chains like Domino’s Pizza in South Africa and Kentucky
Fried Chicken in Jamaica. It invests in upscale shopping malls in Egypt, Ghana, the former Soviet republics, Eastern Europe, and
Central Asia. It backs candy-shop chains in Argentina and Bangladesh; breweries with global beer behemoths like SABMiller and
with other breweries in the Czech Republic, Laos, Romania, Russia, and Tanzania; and soft-drink distribution for the likes of Coca-
Cola, PepsiCo, and their competitors in Cambodia, Ethiopia, Mali, Russia, South Sudan, Uzbekistan, and more.

The criticism of most such investments—from a broad array of academics and watchdog groups as well as local organizations in the
poor countries themselves—is that they make little impact on poverty and could just as easily be undertaken without IFC subsidies.
In some cases, critics contend, the projects hold back development and exacerbate poverty, not to mention subjecting affected
countries to pollution and other ills.



The debate is swirling as the World Bank has a new leader, installed in July: Jim Yong Kim, an American physician who
recently stepped down as president of Dartmouth College. The bank declined to make him available to comment for
this article, and in his brief tenure so far, he has given little hint of his view of the IFC. In both his statement when he
took office in July and on his first overseas visit, to Ghana’s neighbor to the west, Ivory Coast, he did note briefly the
importance of the IFC within the World Bank Group and of the private sector to global job creation.
The IFC is also in the middle of a change in leadership. Its former head, Lars Thunell, recently completed his term, and Chinese
national Jin-Yong Cai, a Goldman Sachs partner who was in charge of the firm’s Chinese banking operations, succeeded him in
October. At that time, Kaldany, who had been serving as the IFC’s acting CEO, stepped back to the post of vice president for global
industries.



The IFC’s operations have been the subject not only of outside criticism but of significant parts of 2011’s stinging
internal report and other critiques from within the World Bank. The 2011 document, in which the bank’s Independent
Evaluation Group examined the IFC’s activities over the previous decade, portrayed a profit-oriented, deal-driven
organization that often fails to reach the poor, and at times may even sacrifice the poor, in a drive to earn a healthy
return on its investments: “Greater effort is needed in translating the strategic intentions into actions in investment
operations and advisory services to enhance IFC’s poverty focus.”

But the IFC’s money-generating strategy has at least one benefit: It sustains the jobs of the people who work for it. The “more
money the IFC makes, the more the bank has [available] to invest,” says Griffiths, the director of Eurodad. “Staff is incentivized to
make money.”

Francis Kalitsi, a former IFC employee who is now a managing partner at private-equity firm Serengeti Capital in Accra, has a similar
view. “To get ahead, you had to book big transactions,” he recalls of his time at the IFC. “The IFC is very profit-focused. The IFC does
not address poverty, and its investments rarely touch the poor.”


The IFC sets annual targets for the number, size, and types of deals employees should complete, and it awards performance
bonuses for reaching these targets, according to several current and former IFC staffers. “If you don’t reach the target, you don’t get
a bonus,” says Alan Moody, a former IFC manager who now works elsewhere at the World Bank. Deals often come to the IFC from
private companies, not the other way around. “We choose our projects by identifying key clients and asking them what their needs
are,” says the IFC’s Moyo. That means, though, that by following private companies’ priorities, the IFC makes investments that are
not necessarily aligned with countries’ own development strategies.

Even if the IFC focused more of its resources on poverty, it doesn’t have a good way to track whether its work has any impact. The
2011 report—which advises that the IFC “needs to think carefully about questions such as who the poor are, where they are
located, and how they can be reached”—criticizes theIFCfor lacking metrics for its investments, saying it fails to “[d]efine, monitor,
and report poverty outcomes for projects.”

The IFC does not contest these criticisms. Its management responded to the evaluation group’s report by stating, “We
broadly agree with [the] report’s lessons and recommendations” and conceded that the “IFC has not been consistent in
stating … the anticipated poverty reduction effects of a project.” The IFC notes that it several years ago began using a
Development Outcome Tracking System (DOTS) to measure the effectiveness of its projects at spurring economic
development and alleviating poverty. This system, however, has drawn snickers from a number of IFC clients. They
note that the DOTS ratings rely heavily on self-reporting by the recipient companies and depend to some extent on
financial data for the entire firm, often with multiple divisions around the world, rather than focusing on the specific
area of the IFC-funded project. Still, Kaldany expresses enthusiasm for the effort, saying it is pathbreaking and getting
better.

Meanwhile, there has been little evidence of change on the ground. Everywhere I looked—in Ghana, in nearby West Africa, and
globally—the IFC still seems to be giving its mandate to fight poverty short shrift.
In finance, for example, R. Yofi Grant, executive director of Databank, one of Ghana’s largest banks, told me that the IFC’s practice
of providing loans at attractive terms to multinational companies “crowds out local banks and private-equity firms by taking the
juiciest investments and walking away with a healthy return.”

Grant says that the IFC recently organized a $115 million financing package for global telecom giantVodafone to expand its
operations in Ghana, even though six telecom companies already operate in the country. Despite such robust private investment,
the IFC’s loan package for Vodafone was its second in two years. “That is not poverty reduction, and these are not frontier
investments,” Grant says, referring to the IFC’s refrain that it invests where other financiers might not. “The IFC says all the right
things and does all the wrong things.”

***

A thousand miles east of Ghana are Cameroon and Chad, which exemplify a major and highly controversial domain of IFC
investment, one where the stakes are often higher than with hotels and shopping malls. That domain is energy.



As of the end of 2011, the IFC reported a $2 billion oil-and-gas portfolio, investing with 30 companies in 23 countries
and, the IFC boasted, achieving “Award Winning Recognition from the Market.” But critics, including environmentalists
and nonprofit groups such as the Bretton Woods Project and Christian Aid, contend that the projects often exacerbate
the poverty they are supposed to alleviate. The projects, they say, frequently escalate local conflict and corruption,
displace communities, disrupt livelihoods, and contribute to the emission of greenhouse gases and other pollutants.

In 2003, an independent review panel within the World Bank even recommended that the bank, including the IFC, pull out of all oil,
natural gas, and coal-mining projects by 2008, saying such loans do not benefit the poor who live where the natural resources are
found. But the World Bank’s board overruled these recommendations. The bank ultimately agreed to an approach that is “business
as usual with marginal changes,” Emil Salim, the Indonesian officialwho led the bank’s review, told Bloomberg News in 2004. In a
conference call with reporters at the time, IFC executive Kaldany said, “There was very broad consensus that we should remain
engaged; we do add value.”

The example of Chad and Cameroon, however, offers a more complicated picture. In 2000, the IFC invested roughly $200 million
with ExxonMobil, Chevron, and others, along with the governments of Chad and Cameroon, to support the construction of a nearly
$4 billion oil-pipeline project that experts estimate will generate more than $5 billion in revenue over the 25-year life of the project
from wells mainly in landlocked Chad to a port in Cameroon.

Editor's Note

The World Bank and its unit that makes loans to private businesses, the International Finance Corporation, have raised questions
about ProPublica’s ethics in the reporting of this story. Specifically, they have questioned whether the reporter, freelancer Cheryl
Strauss Einhorn, properly identified herself as working for ProPublica as she interviewed present or former World Bank staffers in
Ghana, where much of the reporting for the article was done. We take such issues very seriously and have looked closely into the
Bank’s concerns.
The matter would seem simple. ProPublica’s ethics guidelines state clearly that “we don’t misidentify or misrepresent
ourselves to get a story. When we seek an interview, we identify ourselves as ProPublica journalists.” The complication
in this case is that Einhorn, an experienced financial journalist who has worked for such outlets as Barron’s magazine
and CNBC, is now both a freelance writer and an adjunct professor at the Columbia Business School in New York City. In
reporting the story as a freelance for ProPublica, she was also gathering material that could be used in teaching her
classes or in academic publishing.

Einhorn’s contacts with World Bank staff at its headquarters in Washington, D.C., seem uncontroversial. Last July 27, she emailed
David Theis, a bank communications official: “I am working on a project for Pro Publica about emerging market development and
the World Bank, focusing on the private sector model at the International Finance Corporation.” He guided her to other bank
staffers.

The World Bank and the IFC have centered their complaints earlier in July, when Einhorn set up interviews in Ghana and then
traveled there. In several instances, her emails make no reference to ProPublica, but rather focus entirely on her role at Columbia. “I
teach at the Columbia Business School and am planning to travel to Accra on July 18 as part of my research on economic
development issues and projects,” she wrote in one typical email.

Einhorn says that when she actually held the interviews, she orally made clear, as our policy requires, that ProPublica was involved
and that she hoped to publish her work. At least some of the interviewees say that they did not hear any mention of ProPublica. We
can find no written or recorded evidence to show whose memories are correct.

However, three things are clear:

Einhorn was hardly trying to keep her ProPublica connection a secret in Ghana. Emails successfully seeking interviews with top in-
country officials of Coca Cola and Newmont Mining, both significant IFC clients, made clear reference to ProPublica.

Einhorn was not misrepresenting or misidentifying herself when she invoked her Columbia connection. She expects her research in
Ghana to be useful in her academic role. The worst she can be accused of is having been incomplete in identifying herself – and even
then, if her memory is correct, she made the ProPublica connection orally.

In any case, the interviewees didn’t ask or get agreement to make their comments not for quotation. In an era of publish or perish in
academe and instant Tweeting from classrooms, it’s hard to imagine that remarks to a professor would be substantially less public
than those to a reporter.

-Paul E. Steiger

The two countries are even poorer than Ghana to the west. Per capita income in Chad ranks 193rd in the world, compared with
185th place for Cameroon and 172nd for Ghana. Life expectancy at birth in Chad, at 48.7 years, is the world’s absolute worst, and
the country has been ruled for the last two decades by heavy-handed dictator Idriss Déby.


“Conditions were and are a hardship and horrible,” says Peter Rosenblum, co-director of the Human Rights Institute at Columbia
University, who argued that the pipeline project should demand protections for the civilian population. The bulk of the oil revenue
was supposed to be set aside for food, education, health care, and infrastructure. But in the face of attacks from rebel groups
supported by neighboring Sudan, and asserting a need to defend the pipeline, Déby instead channeled substantial chunks into arms
purchases, bringing criticism not only from human rights groups but from the World Bank. As critics of the project had warned, the
oil bonanza increased the stakes for control of the country and added to the civil strife.
What happened with Chad is not an isolated incident. Despite perennial controversies over energy and mining projects, often the
subject of fierce disputes related to everything from their environmental impacts to the extent they boost authoritarian regimes,
the IFC continues to invest in them extensively. Just in 2012, the IFC announced investments in mining projects for gold, copper, and
diamonds in places like Mongolia, Liberia, and South Africa, as well as investments in oil and gas projects in Colombia, Ivory Coast,
the Middle East, and North Africa.

Moreover, as with Chad’s Déby, the IFC continues to lend and invest in countries with heavy-handed rulers such as Syria (Bashar al-
Assad) and Venezuela (Hugo Chávez). Kaldany told me there were about a dozen dictatorships, which he wouldn’t name, where the
IFC would simply not do business. But then there is a second tier, where he is inclined to work. “It is a tradeoff. We can have a
positive influence,” he said, referring to a recent IFC deal in now civil war-torn Syria to fund microfinance. He said the IFC is insisting
on increasingly tight financial controls in such countries to ensure that the proceeds from the projects are targeted directly to the
poor rather than to sustaining the dictators’ hold on power. He acknowledged that the controls in the Chad case were not nearly
tight enough and that the IFC ultimately had to pull out.

The IFC’s critics see two obvious ways to fix it: dramatically overhaul its priorities or sharply reduce its funding and channel those
resources toward the type of World Bank projects that more closely align with its anti-poverty mission.

Kaldany said that the IFC is seeking to increase its number of small projects, of under $5 million and tightly targeted on the poor,
and to devote more attention to the poorest of the poor countries. In the most recent fiscal year, it generated 105 of the smaller
projects, 20 percent of its total deals, although a much smaller percentage of its total dollar outlays. (IFC officials couldn’t
immediately provide that number.)

But don’t count on a new direction. Although its new leadership has remained publicly mum, the IFC’s new chief, Cai, has told
people he strongly supports its current strategy.

***

In Accra, not far from the new Mövenpick, the IFC’s posh offices—sporting a lawn, flowers, and private parking—sit amid a slum,
surrounded by an imposing concrete wall topped by coils of barbed wire. The only paved part of the road to the IFC is directly in
front of the guarded complex, which has no sign announcing its identity. The rest of the road is a winding, dusty dirt path filled with
potholes and surrounded by hovels erected out of battered metal or wood.

Barefoot children sit amid goats and roving chickens, on ground dotted by garbage and litter. Women cook tiny fish strung onto
sticks over an open fire, ignoring the near-100-degree temperatures. I approached them one day in July, and some of them said
they had lived there for 15 years. When asked whether they knew what the World Bank is, they said no. When told that it fights
poverty, many of them laughed.

“We need help, and we know there are places that help,” said one woman who was cooking as two young boys clung to her legs.
“But we have never heard of them.”

Cheryl Strauss Einhorn is a financial journalist and adjunct professor at Columbia Business School.

Categories: Media, Politics

Snow job?

CJR Daily - January 1, 2013 - 11:00pm
Side by side, the two cartoon figures stride across the screen, their stick arms wrapped around massive boxes of gifts. Mischievous
music tinkles in the background and a bemused narrator—his words punctuated by comic sound effects—tells a tale of petty
corruption by Colorado Congressman Ed Perlmutter, a Democrat running for his fourth term. Congressman Perlmutter sure knows
how to work...
Categories: Media

Another round of Cosmos

CJR Daily - January 1, 2013 - 11:00pm
When it comes to making science popular and accessible, astrophysicist Neil deGrasse Tyson does it all. He’s the director of the
Hayden Planetarium at the American Museum of Natural History in New York, which has inspired visitors from around the world to
ponder the depths of space. He’s written more than half a dozen books and hosted...
Categories: Media

Fundamental objections

CJR Daily - January 1, 2013 - 11:00pm
Thirty seconds into a phone conversation, Hamid’s voice shifted from polite to brusque. “No, I cannot look into this,” he said to the
person on the line, and hung up. I was visiting Hamid (not his real name), a senior member at the Tribal Union on Journalists (TUJ),
in Peshawar in December 2011 to discuss the growing problem...
Categories: Media

My space

CJR Daily - January 1, 2013 - 11:00pm
Esther Dyson always figured she would ride a rocket one day. As the daughter of renowned physicist Freeman Dyson, she says, “I
took it for granted. I just assumed it was like airplanes—my parents would fly on airplanes, and when I grew up I would fly on them,
too.” About 10 years ago, she realized no spaceflight was...
Categories: Media

Stories I'd like to see

CJR Daily - January 1, 2013 - 8:16am
In his “Stories I’d like to see” column, journalist and entrepreneur Steven Brill spotlights topics that, in his opinion, have received
insufficient media attention. This article was originally published on Reuters.com. 1. Media tug of war in China: Last week,
Bloomberg.com posted an amazing story, accompanied by graphics and clickable family trees, that unraveled how the “princeling”
ancestors...
Categories: Media

Best of MuckReads 2012

Pro Publica - December 31, 2012 - 12:17pm

by Blair Hickman , Suevon Lee and Cora Currier
As 2012 comes to a close (and awards season approaches), we selected some of our favorite accountability journalism
published this year. Browse our full collection over on MuckReads, and thanks to all of those who submitted
nominations.




Wal-Mart Abroad, New York Times

The New York Times takes a sweeping look at Wal-Mart’s Mexico operations to uncover systemic bribery that helped
the company quickly expand across the country. When executives discovered the paper trail and possible cover ups,
they shut down the investigation. In December, the Times “picked up where Wal-Mart’s internal investigation was cut
off,” and found that its actions went well beyond routine bribes.




Louisiana Incarcerated, The Times-Picayune


The Times-Picayune investigated how Louisiana came to have the highest incarceration rate in the world, revealing a
web of harsh sentencing, low parole rates and financial incentives to keep people behind bars. Via Dafna Linzer




Playing with Fire, Chicago Tribune


The Chicago Tribune detailed a decades-long campaign to load furniture with fire-retardant chemicals. Fueled in part by
the tobacco industry, which sought to deflect blame from cigarettes for household fires, the push for flame retardants
relied on misleading or erroneous claims, and has exposed the average American to “pounds of toxic chemicals” linked
to cancer and a range of other health problems. Via Michael Grabell




Insider Trading, Bloomberg

Reporter David Voreacos spent much of 2012 exploring the growth and evolution of insider trading, from the virality of the trading
of health care stocks, to the intricacies of a 17-year scheme, to the effects that such trading can have on relationships. Via Paul
Steiger




Ghost Factories, USA Today
Lead factories have spewed lead particles and other toxic chemicals for decades, leaving neighborhoods contaminated even after
factories have closed. In many cases, the EPA knew about dangerous levels of toxins but did nothing to orchestrate clean ups or
warn people living near the old facilities.




Billions in Hidden Riches for Family of Chinese Leader, New York Times

A deep look into the finances of the family of China's Prime Minister Wen Jiabao, which prompted the Chinese government to block
access to the New York Times. The family fortune is tied to state-owned companies and obscured in complex arrangements. Earlier
in the year, Bloomberg scrutinized the family wealth of Xi Jinping, expected to become China’s next president, in another story
showing the hidden ways China’s elite leverage government connections.




Dying For Relief, Los Angeles Times

The California medical board’s approach to oversight has allowed reckless prescribing, with occasionally fatal
consequences. Most board members declined to comment, but following The Times’ investigation, board officials said
they’ve asked the Legislature to require county coroners report prescription drug deaths to the board. Via Ryan
Gabrielson




Credit Scars, Columbus Dispatch

“That’s not my birth date. That’s not my name. I’m not dead.” – just some of the errors made by largely unregulated
credit reporting agencies found by the Dispatch in a review of tens of thousands of complaints. What seem like simple
mistakes can have huge consequences on consumers’ credit scores, because it is difficult, sometimes impossible, to
correct them.




Foxconn’s Reform Promises, The New York Times


As Apple shifted almost all of its manufacturing work overseas, reports emerged of unsafe and harsh working conditions. This series
of articles details the challenges posed by the globalized technology workforce and the reforms that Foxconn – Apple’s largest
manufacturing partner and one of China’s largest private employers – has vowed to make. Via Michael Grabell




In Jennifer’s Room, California Watch
A powerful narrative of one California family’s struggle to get justice for their developmentally disabled daughter, who
was was impregnated by an unknown assailant while under state care. See the full investigation into sexual abuse at
California’s board-and-care centers.




N.C. Nonprofit Hospitals Make Big Money on Cancer Drug Markups, The News & Observer and The Charlotte Observer

This joint investigation explores the costly cancer drug treatment market in North Carolina’s largest hospital systems, where some
drugs are priced two to 10 times higher than at independent clinics. Hospitals say the soaring out-of-pocket costs are necessary to
offset free services for the poor and uninsured; according to a survey by the American Cancer Society, it’s led to nearly one in five
patients delaying recommended treatment.




Chesapeake Energy, Reuters

It’s been a rough year for Chesapeake Energy and CEO Aubrey McClendon. The company is now under investigation for
possibly violating antitrust laws, among other issues, and amidst scandal, McClendon’s personal fortune has shrunk by
more than half. You can find a full list of articles here.

Categories: Media, Politics

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res that its far-reaching
tunity—and an
 f....




h, this is Archeopyeryx
retty famous transitional




 en and his colleagues at
 d in October, following




. He and his dad, Peter, a
 a bill that aimed to




 its response and our
ut on a line dry in 15
anicured lawns, amply
high concrete wall rings
ss who lie on the


 ms, seven floors, and
 in at least one respect: It
gely controlled by a Saudi



 its principal owner, Prince
ank, meanwhile,
ap loans and other
nk, we have made the




he Mövenpick, a hotel the
oans and investments is
 fit for the World Bank.

here the IFC works—to
orts are really working on
ments and talked to



  these companies could
l to Grupo Arcor, the
 so gritty gold and copper
 est of the World Bank is
t $2.4 billion—came from
ted States has had little




 gives little more than
 Independent
verty. “[M]ost IFC
 portunities for the
 ports,” the report
 t focus on poor
ute the conclusions.
 d, with life expectancy in
  loans and equity in
development as a member
 fighting poverty. Just



 d returns for the IFC,
 local workers, and critics
  problem,” says Jesse
 it. “The IFC undermines
 mpanies.”


 ice president for global
 t trying to make a
mbination.

 no apology for its
 2012 report from the
 s infrastructure,”
 rContinental—and, of


 y creating jobs. To
 side the hotel. The
 any were hired, I asked.


sides the new hotel he
s lived and worked in
ood supplies, and lack of
 ult, all the top staff


ed another nearby five-
o when the IFC decided to
o lift out of poverty.
 nlike its standard
 deal attractive to us,”
mplete with heated
s jurisdiction over U.S.
ed to it by a 2011
World Bank, defended
lled out when market
east two other major
presentatives didn’t




 g its poverty-fighting
stest-growing unit. It now
s about 580
next few years.

C would stimulate the
ntries by lending to and
 amed Robert Garner,
 not available on



ught to take advantage of
ociated with World Bank
 oney from the global
 es, including trade
 tes.


ns: Dow Chemical,
  Africa and Kentucky
 Eastern Europe, and
 hs like SABMiller and
 n for the likes of Coca-
ore.

local organizations in the
en without IFC subsidies.
n subjecting affected




 erican physician who
able to comment for
 statement when he
 did note briefly the
on.
s term, and Chinese
s, succeeded him in
vice president for global




 f 2011’s stinging
 e bank’s Independent
 nted, deal-driven
ve to earn a healthy
ctions in investment


rk for it. The “more
“Staff is incentivized to


tal in Accra, has a similar
ofit-focused. The IFC does



ards performance
h the target, you don’t get
en come to the IFC from
 g them what their needs
 es investments that are


ork has any impact. The
e, where they are
ils to “[d]efine, monitor,



report by stating, “We
s not been consistent in
ars ago began using a
purring economic
of IFC clients. They
 to some extent on
using on the specific
hbreaking and getting


arby West Africa, and
e that the IFC’s practice
ty firms by taking the


ne to expand its
ust private investment,
are not frontier
e IFC says all the right




 domain of IFC
ergy.



anies in 23 countries
ding environmentalists
jects often exacerbate
lict and corruption,
nd other pollutants.

the IFC, pull out of all oil,
e natural resources are
pproach that is “business
erg News in 2004. In a
at we should remain


d roughly $200 million
e construction of a nearly
25-year life of the project




 have raised questions
rter, freelancer Cheryl
World Bank staffers in
 ooked closely into the
entify or misrepresent
 ists.” The complication
as Barron’s magazine
 ool in New York City. In
 sed in teaching her


 st July 27, she emailed
arket development and
 her to other bank


 n Ghana and then
 n her role at Columbia. “I
h on economic


ProPublica was involved
ention of ProPublica. We




interviews with top in-
oPublica.

 expects her research in
 tifying herself – and even


 era of publish or perish in
 substantially less public




world, compared with
 d’s absolute worst, and



s Institute at Columbia
e bulk of the oil revenue
s from rebel groups
 stantial chunks into arms
 project had warned, the
ning projects, often the
 authoritarian regimes,
 ects for gold, copper, and
n Colombia, Ivory Coast,


 such as Syria (Bashar al-
 ouldn’t name, where the
eoff. We can have a
He said the IFC is insisting
targeted directly to the
d case were not nearly


ding and channel those


  targeted on the poor,
  ted 105 of the smaller
 fficials couldn’t


w chief, Cai, has told




 king—sit amid a slum,
 o the IFC is directly in
 dusty dirt path filled with


k tiny fish strung onto
nd some of them said
 hen told that it fights


 boys clung to her legs.
xes of gifts. Mischievous
tells a tale of petty
n Perlmutter sure knows




’s the director of the
rom around the world to




 into this,” he said to the
 ion on Journalists (TUJ),




man Dyson, she says, “I
w up I would fly on them,




opinion, have received
hina: Last week,
 ed how the “princeling”
countability journalism
 o submitted




 c bribery that helped
d possible cover ups,
  investigation was cut




he world, revealing a
 ia Dafna Linzer




micals. Fueled in part by
h for flame retardants
toxic chemicals” linked




he virality of the trading
lationships. Via Paul
ontaminated even after
hestrate clean ups or




nese government to block
 ex arrangements. Earlier
ent, in another story




sionally fatal
on, board officials said
board. Via Ryan




 largely unregulated
What seem like simple
imes impossible, to




 ng conditions. This series
 nn – Apple’s largest
abell
isabled daughter, who
into sexual abuse at




he Charlotte Observer

al systems, where some
t costs are necessary to
ed to nearly one in five




under investigation for
fortune has shrunk by
inally Pay Off (95)


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