September 17, 2024

Key Facts to Know Before Novo Nordisk’s CEO Appears at the Senate HELP Committee

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On September 24, 2024, Novo Nordisk CEO Lars Jørgensen will testify at the Senate Committee on Health, Education, Labor, and Pensions (HELP) hearing on the high prices of the diabetes and obesity drugs Ozempic and Wegovy.

Here are key facts to know before the hearing:

1. Novo Nordisk charges Americans up to 15 times more than it charges other wealthy countries for Ozempic and Wegovy.

• Novo Nordisk’s pricing isn’t justified by research and development costs. Since Ozempic’s launch in 2018, Novo Nordisk has spent over $44 billion enriching its shareholders through stock buybacks and dividends—over twice as much as it spent on R&D across its entire portfolio.
• Nor is it justified by production costs. Generic Ozempic and Wegovy could be sold profitably for around $5 and $13 per month, respectively. Novo Nordisk prices them over 100 times higher for Americans. Generics firms have indicated they would sell generics for less than $100 per month.
• Novo Nordisk has amassed nearly $50 billion from Ozempic and Wegovy since their launch.

2. Novo Nordisk’s exorbitant pricing in the U.S. has imposed widespread cost barriers on patients and financial burden on public programs.

• The annual cost to the healthcare system for covering Wegovy for half of the eligible population ($411 billion) would exceed the expenditure on all retail prescription drugs in 2022 ($406 billion). Without substantial price reductions, Wegovy could cost the U.S. health care system $1 trillion by 2031, potentially approaching $2 trillion with greater uptake.
• According to a KFF poll, 1 in 8 adults have used GLP-1s (such as Ozempic and Wegovy), with over half saying that it was difficult to afford their costs.
• Between 2020 and 2021, Medicare’s spending on Ozempic increased by more than a billion dollars, and between 2021 and 2022, spending increased by an astonishing $2 billion.
• Officials in North Carolina and West Virginia have raised alarm over how these drugs could cost state health plans covering public employees over $150 million a year, which could increase the cost of premiums in some cases up to 200%.

3. To avert the ruinous financial consequences of Novo Nordisk’s greed, the Biden administration can use its authority under 28 U.S.C. § 1498 to allow generic production of these drugs, resulting in lower costs for patients and federal health programs.

• After unsuccessful efforts to negotiate lower prices for its State Health Plan with GLP-1 manufacturers, North Carolina’s Treasurer requested that HHS initiate efforts to negotiate voluntary licenses between Novo Nordisk and generic drug producers for supply to federal, state, and local government payers.
• If Novo Nordisk refuses to voluntarily license their products, the federal government can use its authority under 28 U.S.C. § 1498 to authorize generic competitors to these price gouged drugs, as described in Public Citizen’s petition to HHS, saving Medicare $14 billion in the first two years alone, even under conservative assumptions of uptake among patients.

Estimate of Savings from Generic Competitors to Ozempic and Wegovy

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1) Medicare’s savings from generic competition to Ozempic.

Using estimates of net spending for Ozempic in 2022 by Medicare Part D, Public Citizen projects that Medicare would save $1.3 billion in the first year of generic competition and $1.6 billion in the second year of competition to Ozempic. As described in more detail in the Appendix, we estimated savings if the generics cost $100 per month and accounted for increased uptake of generics by patients over time.

	Net Spending on Ozempic in 2022	Net Spending if Generics were Available	Savings
Year 1	$2,452,925,141.00	$1,147,406,466.61	$1,305,518,674.39
Year 2	$2,452,925,141.00	$819,545,498.46	$1,633,379,642.54
Total	$4,905,850,282.00	$1,966,951,965.07	$2,938,898,316.93

 

2) Medicare’s savings from generic competition to Wegovy among enrollees likely eligible due to the new cardiovascular indication.

Federal law prohibits covering drugs solely for weight loss indications. However, as a result of the FDA approving Wegovy to reduce the risk of death, stroke, or heart attack in patients with obesity and excess weight, this year Medicare announced it would allow Part D plans to cover Wegovy for patients with elevated Body Mass Index (BMI) and established cardiovascular disease, regardless of whether the patient has diabetes. Using estimates of the number of Medicare enrollees who likely become eligible for Wegovy under this new cardiovascular indication (3.6 million), Public Citizen estimates Medicare would save between approximately $5 and $20 billion in the first year of generic competition to Wegovy. The range results from the lack of certainty on how many of the 3.6 million enrollees eligible for Wegovy will actually use the medication, so we constructed a lower and upper bound estimate of savings depending on 25% uptake among eligible enrollees vs. 100% uptake among these patients. Similarly, Public Citizen estimates that Medicare would save between approximately $6 billion and $25 billion from the second year of generic competition to Wegovy.

Even under the more conservative set of assumptions, where 25% of Medicare’s eligible enrollees use Wegovy, the program would save over $11 billion in the first two years of generic competition due to Wegovy’s sky high price currently. If even half of Medicare enrollees now eligible for Wegovy use the drug, Medicare would save over $20 billion from the first two years of generic competition on the drug. Finally, under more generous estimates of uptake of Wegovy among eligible enrollees (100% uptake), we estimate over $45 billion in savings from the first two years of generic competition.

	Savings if 25% of Eligible Medicare Enrollees Use Wegovy	Savings if 50% of Eligible Medicare Enrollees Use Wegovy	Savings if 100% of Eligible Medicare Enrollees Use Wegovy
Year 1	$5,061,409,200.00	$10,122,818,400.00	$20,245,636,800.00
Year 2	$6,332,504,400.00	$12,665,008,800.00	$25,330,017,600.00
Total	$11,393,913,600.00	$22,787,827,200.00	$45,575,654,400.00

 

3) Savings to Medicare if the program covers Wegovy for enrollees with an obesity diagnosis.

Bicameral, bipartisan legislation has been proposed to end the Medicare coverage exclusion for drugs used for the treatment of obesity or for weight loss management for individuals with excess weight and who have one or more related comorbidities.[1] We calculate that if Medicare covered Wegovy just for enrollees with an obesity diagnosis, the program would save between approximately $15.7 and $62.7 billion in the first year of generic competition to Wegovy. In the second year of generic competition to Wegovy, Medicare would save between approximately $19.6 and $78.4 billion.

Under the more conservative set of assumptions, we anticipate that if Medicare covers Wegovy for just 25% of enrollees with an obesity diagnosis, generic competition will save the program over $35 billion in just two years. If even half of Medicare enrollees with an obesity diagnosis used the drug, we anticipate that generic competition would save the program over $70 billion over two years. If all Medicare beneficiaries with an obesity diagnosis took the drug, generic competition would save the program over $140 billion in two years.

	Savings if 25% of Medicare Beneficiaries w/ Obesity Use Wegovy	Savings if 50% of Medicare Beneficiaries w/ Obesity Use Wegovy	Savings if 100% of Medicare Beneficiaries w/ Obesity Use Wegovy
Year 1	$15,664,511,530.80	$31,329,023,061.60	$62,658,046,123.20
Year 2	$19,598,413,065.01	$39,196,826,130.02	$78,393,652,260.05
Total	$35,262,924,595.81	$70,525,849,191.63	$141,051,698,383.25

 

Appendix: Methodology for Calculating Savings from Generic Competition on Ozempic and Wegovy

1) Medicare’s savings from generic competition to Ozempic.

To estimate savings to Medicare we used the following data sources and assumptions. According to Medicare’s gross spending data for the latest year available (FY 2022), Medicare spent $4,628,160,643.40 on Ozempic.[2] We used the Government Accountability Office’s estimate of rebates as a proportion of gross expenditure for Part D endocrine metabolic agents (47%),[3] which includes antidiabetic medications, to estimate net spending on Ozempic in 2022. We estimate net spending for Ozempic in 2022 to be approximately $2,452,925,141.00.

Next, we calculated how much Medicare would save if patients began using generics rather than the expensive branded medication. First, we estimated continued spending on the branded drug, Ozempic, given academic literature on generic uptake in the first and second year of competition. We prefer this approach to account for the fact that generic uptake increases over time. Experts have found that in the first year of generic competition for a drug, there is 66.1% uptake of generics; in the second year, uptake of generics increases to 82.7%.[4] For the first year of competition, we estimated that Medicare would continue to spend $831,541,622.80 and $424,356,049.39 on the branded medication, Ozempic, in the first and second year of generic competition, respectively.

Then, we calculated net expenditure on generics that would occur as a function of displacing Ozempic’s market share with an estimated price reduction compared to the brand price. The brand price for Ozempic is $968.52 per month.[5] Although inexact, we applied the Government Accountability Office’s rebate estimate for gross spending on endocrine metabolic agents in Medicare Part D to estimate a net price of $513.32 per month per enrollee. If generics can enter the market at $100 a month, the price ratio of generics compared to Ozempic would be 0.194811925. Thus, using this price ratio and expected uptake of generics in the first and second year of competition, we estimated that spending on generics would be $315,864,843.81 and $395,189,449.07 in the first and second year of competition, respectively.

We totaled the continued spending on the branded medication and generics to calculate how much Medicare would spend if generics to Ozempic became available. In the first year, we estimate that Medicare would spend $1,147,406,466.61 on Ozempic and its generics. In the second year, Medicare would spend $819,545,498.46. Compare this to how much Medicare is expected to spend on Ozempic without generics each year: $2,452,925,141.00. Thus, as a consequence of generic competition, Medicare is expected to save 1,305,518,674.39 in the first year and $1,633,379,642.54 in the second year of generic competition, for a total savings of nearly $3 billion in the first two years of generic competition to Ozempic ($2,938,898,316.93).

Caveats to this analysis include that we cannot account for increased uptake of generics to Ozempic because of their lower price. Second, we do not have precise information on the rebates provided by the branded manufacturer to Medicare Part D; however, we believe the savings here are underestimates because spending on Ozempic has dramatically increased recently. Between 2020 and 2021, Medicare’s spending on Ozempic increased by more than a billion dollars, and between 2021 and 2022, spending increased by an $2 billion. Thus, we likely significantly underestimate how much Medicare will spend on Ozempic in subsequent years since we depend on data from 2022, which also limits our savings projections.

2) Medicare’s savings from generic competition to Wegovy among enrollees likely eligible due to the new cardiovascular indication.

There is no historic data on Medicare’s spending on Wegovy due to statutory exclusions for coverage of drugs solely for weight loss. However, with Medicare’s announcement that Part D plans may begin to cover the drug for patients with elevated BMI and established cardiovascular disease, we relied on estimates in the academic literature. Experts in the Annals of Internal Medicine estimated that 3.6 million enrollees were highly likely to be eligible for Wegovy due to the new cardiovascular indication.[6] Under more liberal definitions of established cardiovascular disease, the authors predicted over 15 million enrollees could become eligible for Wegovy.[7] For the purposes of this analysis, we chose the more conservative estimate of 3.6 million enrollees becoming eligible for Wegovy under Medicare’s recent announcement.

We projected estimated net spending for Wegovy under Medicare if 25% of the enrollees highly likely to be eligible used the medication. Relying on prior estimates of the net price for Wegovy ($809 per month) from the Senate Committee on Health, Education, Labor and Pensions,[8] we calculated an annual net expenditure of $8,737,200,000.00 for these patients.

We used the methodology described above to calculate anticipated savings from generic competition in the first and second year of generics availability. We assumed generic uptake would be 66.1% and 82.7% in the first and second year of competition, respectively,[9] and we calculated the generic-to-brand price ratio based on the net price of $809 for Wegovy and $100 for generics (0.123609394). In the first year of generic competition, we anticipated that Medicare would continue to spend $2,961,910,800.00 on Wegovy. With the availability of generics, we project that Medicare would spend $713,880,000.00 on generics for enrollees. So, under the scenario with generics displacing Wegovy’s market share at a lower price, we expect total spending to be $3,675,790,800.00 as opposed to $8,737,200,000.00 (the net spending projected for Medicare if just 25% of likely eligible enrollees used Wegovy). That equates to savings of over $5 billion under this conservative scenario where only 1 in 4 eligible enrollees use the drug.

In the second year of generic competition, we estimate that Medicare would spend $1,511,535,600.00 on the brand medication, Wegovy, and $893,160,000.00 on generics. With a greater share of Wegovy’s market displaced in the second year and the lower price of generics, we anticipate total spending to be $2,404,695,600.00 under the conservative projection that only 25% of eligible enrollees use the drug. Compared to the estimated net expenditure on Wegovy without any generic competition ($8,737,200,000.00), we estimate over $6 billion in savings from the second year of generic competition. Thus, under a conservative scenario where only 1 in 4 Medicare enrollees eligible for Wegovy under the cardiovascular indication use the drug, we estimate $11,393,913,600.00 in savings from two years of generic competition.

If half of all enrollees highly likely to be eligible for Wegovy use the drug, we would anticipate net expenditures and savings to double. Without generic competition to Wegovy, net expenditure each year would be $17,474,400,000.00, and savings across two years of generic competition would be $22,787,827,200.00. If all enrollees who are highly likely to be eligible for Wegovy under the cardiovascular indication use the drug, we anticipate net spending per year to be $34,948,800,000.00 and savings after two years of generic competition to be $45,575,654,400.00.

As we stated above, there are several caveats to this analysis. First, we cannot account for increased usage of generics to Wegovy as a result of their lower price. Second, we do not have precise information on the rebates provided by the branded manufacturer to Medicare Part D for Wegovy; however, we believe our analysis provides an accurate range of potential spending for Medicare because we chose the stricter definition of cardiovascular disease in the literature and showed that Medicare stands to save over $11 billion in two years of generic competition in the conservative scenario where only 1 in 4 enrollees under this strict definition of cardiovascular disease use Wegovy. Thus, even if the final rebate amount is modified, we anticipate that if Medicare were to cover Wegovy for the weight loss indication, savings would be at least, and likely exceed, $11 billion across two years of generic competition because level of uptake and the definition of cardiovascular disease would significantly affect potential net expenditures and savings. For example, if more liberal definitions of cardiovascular disease are used, where over 15 million enrollees may be eligible for Wegovy instead of 3.6 million enrollees, our analysis may grossly underestimate potential spending on Wegovy and savings from generic competition.

3) Savings to Medicare if the program covers Wegovy for enrollees with an obesity diagnosis.

In light of bicameral, bipartisan legislation that would end the Medicare coverage exclusion for drugs used for the treatment of obesity or for weight loss management for individuals with excess weight and who have one or more related comorbidities,[10] we provide an estimate of potential savings to Medicare from generic competition to Wegovy if this exclusion were ended.

According to an article from the New England Journal of Medicine, experts found that 21% of Medicare Part D enrollees in 2020 had a diagnosis of obesity (9,956,755 enrollees).[11] Extrapolating to 2024, where Medicare Part D’s enrollment has increased by 11.9% since 2020, we estimate that 11,141,609 enrollees likely have an obesity diagnosis.[12] Using the net price for Wegovy for Medicare discussed above from the Senate HELP Committee’s report,[13] we estimate the annual net expenditure if Medicare ended the exclusion for anti-obesity medications and just 25% of those with an obesity diagnosis used Wegovy. We note this is likely an underestimate of the number of enrollees who would use Wegovy, not only because of the conservative estimate of uptake, but because this does not consider usage by patients who are overweight and have one or more weight-related comorbidity. We project, conservatively, that Medicare would spend on a net basis at least $27,040,684,666.82 covering the weight loss indication.

Using the methodology discussed above, we projected savings to Medicare with increasing generic uptake and displacement of the branded drug, Wegovy over time using the generic-to-brand price ratio. Again, we assumed generic uptake would be 66.1% and 82.7% in the first and second year of competition, respectively,[14] and we calculated the generic-to-brand price ratio based on the net price of $809 for Wegovy and $100 for generics (0.123609394). In the first year of generic competition, we calculated continued spending on Wegovy would be $9,166,792,102.05 while spending on generics would be $2,209,381,033.96. In total, we expect spending with generics available to be $11,376,173,136.01, representing $15,664,511,530.80 in savings in just the first year compared to what Medicare would expend with no generic alternatives to Wegovy ($27,040,684,666.82).

In the second year of competition, we would expect spending on Wegovy to drop to $4,678,038,447.36 and spending on generics to be $2,764,233,154.44. Thus, with generics available, we would expect a total spend of $7,442,271,601.80 as opposed to $27,040,684,666.82 without generic alternatives. That represents $19,598,413,065.01 in savings during the second year of competition under the conservative scenario in which 1 in 4 Medicare enrollees with obesity used this anti-obesity medication. Across two years of generic competition to Wegovy, we anticipate at least $35,262,924,595.81 in savings if the Medicare coverage exclusion for anti-obesity treatment is ended.

If 50% of Medicare enrollees with an obesity diagnosis took Wegovy upon ending the coverage exclusion, we anticipate that annual net expenditure would double to $54,081,369,333.63, and savings from two years of generic competition would be $70,525,849,191.63. If all Medicare enrollees with an obesity diagnosis took Wegovy, we would expect annual expenditures to be $108,162,738,667.26 and savings from two years of generic competition to approximate $141,051,698,383.25.

As described above, we cannot account for increased uptake of this anti-obesity medication due to lower costs from generic competition. Differences between the estimated net price here and the actual net price paid by Medicare will also impact this analysis. But we believe we’ve accurately projected the range of spending and savings possible by using conservative assumptions on levels of uptake that greatly affect possible net expenditures and savings. That is, if only 1 in 4 Medicare beneficiaries with an obesity diagnosis take Wegovy, we still project savings over $35 billion across two years of generic competition. Thus, even if the final rebate amount is modified, we anticipate that if Medicare were to cover Wegovy for the weight loss indication, savings would be at least, and likely exceed, $35 billion across two years of generic competition.

[1] Treat and Reduce Obesity Act of 2023, S.2407, 118th Cong. (2023); H.R.4818, 108^th Cong.  (2023) https://www.congress.gov/bill/118th-congress/senate-bill/2407.

[2] Ctrs. Medicare & Medicaid Servs., Medicare Part D Spending by Drug, Data.CMS.Gov, https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-bydrug/medicare-part-d-spending-by-drug (last visited Sept. 16, 2024).

[3] U.S. Gov’t Accountability Off., Medicare Part D: CMS Should Monitor Effects of Rebates on Plan Formularies and Beneficiary Spending, at 19 (Sept. 2023), https://www.gao.gov/assets/gao-23-105270.pdf.

[4] Benjamin N. Rome, ChangWon C. Lee, Joshua J. Gagne, & Aaron S. Kesselheim, Factors Associated With Generic Drug Uptake in the United States, 2012 to 2017, 24 Value Health 804 (2021).

[5] Novo Nordisk, Find out the cost for Ozempic, NovoCare, https://www.novocare.com/diabetes/products/ozempic/explaining-list-price.html (last visited Sept. 16, 2024).

[6] Alexander Chaitoff, Liam Bendicksen, William B. Feldman, Alexander R. Zheutlin, & Hussain S. Lalani, Estimating New Eligibility and Maximum Costs of Expanded Medicare coverage of Semaglutide for Cardiovascular Prevention, Annals of Internal Medicine (Aug. 27, 2024), https://www.acpjournals.org/doi/10.7326/ANNALS-24-00308

[7] Id.

[8] Majority Staff of the Senate HELP Committee, Breaking Point: How Weight Loss Drugs Could Bankrupt American Health Care 6-7 (May 15, 2024).

[9] Benjamin N. Rome, ChangWon C. Lee, Joshua J. Gagne, & Aaron S. Kesselheim, Factors Associated With Generic Drug Uptake in the United States, 2012 to 2017, 24 Value Health 804 (2021).

[10] Treat and Reduce Obesity Act of 2023, S.2407, 118th Cong. (2023); H.R.4818, 108^th Cong.  (2023) https://www.congress.gov/bill/118th-congress/senate-bill/2407.

[11] Khrysta Baig, Stacie B. Dusetzina, David D. Kim, & Ashley A. Leech, Medicare Part D Coverage of Antiobesity Medications— Challenges and Uncertainty Ahead, 388 New England J. Med. Perspective 961 (2023).

[12] Juliette Cubanski & Anthony Damico, Key Facts About Medicare Part D Enrollment, Premiums, and Cost Sharing in 2024, KFF (July 2, 2024), https://www.kff.org/medicare/issue-brief/key-facts-about-medicare-part-d-enrollment-premiums-and-cost-sharing-in-2024/.

[13] Majority Staff of the Senate HELP Committee, Breaking Point: How Weight Loss Drugs Could Bankrupt American Health Care 6 (May 15, 2024).

[14] Benjamin N. Rome, ChangWon C. Lee, Joshua J. Gagne, & Aaron S. Kesselheim, Factors Associated With Generic Drug Uptake in the United States, 2012 to 2017, 24 Value Health 804 (2021).

Public Citizen Testimony to the Texas Senate Committee on Natural Resources & Economic Development Regarding Cement Production Plants

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Protest of BlackRock’s Acquisition of Allete

By Tyson Slocum

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Today in Federal Energy Regulatory Commission docket EC24-105, the Private Equity Stakeholder Project joined with Public Citizen in protesting BlackRock’s effort to acquire Allete and its franchised utilities Minnesota Power and Superior Water, Light and Power Company.

BlackRock’s proposed acquisition of ALLETE and its franchised utilities fails the public interest test required under Section 203 of the Federal Power Act^[1] because BlackRock’s extensive horizontal control of utility and end-user voting shares subject to blanket authorization threatens competition, rates and regulation. The proposed ALLETE transaction and approved acquisition of GIP change the “facts, policies, and procedures the Commission relied upon in granting” BlackRock’s blanket waivers to control up to 20% of the voting shares of  utilities, and as such first requires BlackRock to “inform the Commission within 30 days of any material change in circumstances that would reflect a departure from the facts, policies, and procedures the Commission relied upon in granting the” blanket authorization.[2] The Commission must therefore hold this proceeding in abeyance until the Commission completes its review of how the GIP acquisition and proposed ALLETE transaction materially change the facts of BlackRock’s blanket authorization, as required by the Commission’s BlackRock-GIP order.[3] Absent changes to or revocation of that blanket authorization, the Commission cannot find the proposed transaction to “be consistent with the public interest” as required by law.

Commissioner Mark C. Christie noted in his concurring statement on the Commission’s approval of BlackRock’s acquisition of GIP the “influence that large shareholders, BlackRock or otherwise, can potentially exert across the consumer-serving utility industry should not be underestimated. Such horizontal shareholdings pose the threat of decreased innovation, reduced competition, and ultimately higher prices to consumers, as well as the prospect of chilling investment” in generation . . . You do not need a Ph.D. in economics to see the potential for anticompetitive conduct and outcomes when an investment entity like a huge asset manager seeks to own generation assets that will be — or should be — competitors.”^[4] This is most certainly the case with BlackRock’s proposed acquisition of ALLETE.

BlackRock already controls 13.01% of ALLETE voting shares,^[5] held through the Commission’s blanket authorization. BlackRock’s control of 13% of ALLETE’s voting shares exposes the active conflict of interest in the Commission’s blanket authorization policy, as BlackRock can use its control of ALLETE’s voting shares to further its financial self-interest ahead of ALLETE’s captive customers. The Commission’s blanket authorization policy fails to remedy BlackRock’s self-interest in voting those shares.

BlackRock also controls 10.81% and 10.41%,^[6] respectively, of Cleveland Cliffs and US Steel—two industrial taconite facility customers of ALLETE representing 70% of Minnesota Power’s entire industrial demand.^[7] BlackRock’s control of 13% of ALLETE’s voting shares and more than 10% of two of its largest customers raises concerns about horizontal competition and conflict of interest that are ignored in the application. The application is silent on how BlackRock can simultaneously manage its non-controlling ownership of voting shares of utilities that compete with its active, direct holdings—an income prioritization conflict for BlackRock that threatens competition, rates and regulation.

According to BlackRock’s most recent quarterly filing, submitted to the Commission on August 14, 2024,^[8] it controls voting shares in excess of 10% of at least 19 different electric utilities operating in FERC-jurisdictional markets: Avista Corp; Black Hills Corp; Chesapeake Utilities; Consolidated Edison; Essential Utilities; Eversource Energy; Exelon Corp; Idacorp; MGE Energy; New Jersey Resources Corp; Northwestern Energy; OGE Energy; Otter Tail Corp; PNM Resources; Portland General Electric; Public Service Enterprise Group; Sempra; UGI Corp; and Unitil Corp. This same disclosure reveals BlackRock controls 18.68% and 10.57%, respectively, of the voting shares of SunRun and FirstSolar; 13.63% of coal supplier Peabody Energy; additional companies that sell services to utilities (Hannon Armstrong 15.4% and Ormat Technologies 13.93%), and entities with MBR affiliates (Stepstone Group, 12.12%).

The proposed ALLETE purchase fundamentally transforms BlackRock’s business model from that of a non-controlling asset manager to acquiring securities that will result in the transfer of control over a public utility, rendering the facts and conditions of the blanket authorization to be null and void. Evidence of BlackRock’s transformation from a passive to active investor includes the fact that GIP’s CEO, Adebayo Ogunlesi, will be promoted to Blackrock’s board of directors and global executive committee, giving him oversight of Blackrock’s overall business (both active and non-controlling investments). This promotion of GIP’s CEO to BlackRock’s board of directors undermines the application’s claim that “the strategic and day-to-day operations and activities of [GIP] will continue to be organized and managed separately from BlackRock.”[9] GIP cannot be “managed separately from BlackRock” when GIP’s current CEO will literally serve on BlackRock’s board and global executive committee. BlackRock’s failure to segregate its non-controlling investment management operations from its active control of ALLETE and other Commission-jurisdictional assets clearly violates the terms of the Commission’s blanket authorization order and is therefore a fatal error of the application.

The application’s failure to remedy how the proposed ALLETE acquisition violates BlackRock’s blanket authorization must result in either the Commission rejecting the application for being inconsistent with the public interest; modifying the terms of the blanket authorization; or requiring divestiture of BlackRock’s non-controlling investment management operations from its active investments. At a minimum, the Commission should require applicants to include in its market power screens all MBR entities where BlackRock controls voting shares of affiliates in excess of 10%, even when that control is subject to the Commission’s blanket authorization.

ALLETE filed petitions to approve the acquisition on July 19^th at the Minnesota Public Utilities Commission^[10] (MNPUC) and the Public Service Commission of Wisconsin^[11] (PSCW). The Citizens Utility Board of Minnesota (CUB) submitted a comment stating that it is “concerned about the inherent conflict of interest that arises between ratepayers wanting to pay as little as possible for safe and reliable electric service and private equity investors wanting to maximize their return on investment.”^[12] In addition, Minnesota Attorney General Keith Ellison filed a comment that includes an analysis of whether the transaction is consistent with the public interest. The analysis states: “If the transaction is consummated, ALLETE and Minnesota Power will become subsidiaries of Global and Canada Pension. Global is itself set to be acquired by BlackRock, one of the world’s largest asset managers. All of these entities have numerous other investments in energy and nonenergy industries, presenting opportunities for cross-subsidization and self-dealing that could harm Minnesota Power’s ratepayers and the public interest more broadly.”^[13] The comment letter recommends the case be sent to an evidentiary hearing to determine whether the proposed transaction may have negative implications for its ratepayers, Minnesota and the public interest. In addition, the MN Department of Commerce also voiced concerns over the deal saying it “raises significant issues related to affiliated interests”.^[14]

The Commission must hold this proceeding in abeyance until it completes its review of how BlackRock’s GIP acquisition and proposed ALLETE transactions materially change the facts of BlackRock’s blanket authorization.

Access a .pdf of the filing here ALLETE protest

^[1] 16 U.S.C. § 824b(a)(4).

[2] April 19, 2022 Order Extending Blanket Authorization to Acquire Securities, Docket No. EC16-77-002, at page 12, paragraph M, https://elibrary.ferc.gov/eLibrary/filelist?accession_num=20220419-3080

[3] September 6, 2024 “Order Authorizing Disposition of Jurisdictional Facilities and Acquisition of Securities,” 188 FERC ¶ 61,166, Docket No. EC24-58 at ¶58, https://elibrary.ferc.gov/eLibrary/filelist?accession_num=20240906-3099

^[4] Docket No. EC24-58, at ¶2, https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240715-5129

^[5] BlackRock’s most recent quarterly filing, submitted to the Commission August 14, 2024

https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240814-5165

^[6]BlackRock’s most recent quarterly filing, submitted to the Commission August 14, 2024

https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240814-5165

^[7]At page 10, https://www.sec.gov/ix?doc=/Archives/edgar/data/66756/000006675624000007/ale-20231231.htm

^[8] https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240814-5165

[9] Application, at page 16.

^[10] July 19, 2024 Initial Filing – Petition for Approval Docket Number PA-24-198 www.edockets.state.mn.us/edockets/searchDocuments.do?method=showPoup&documentId={20E3CC90-0000-CB1E-9F69-13722A140B90}&documentTitle=20247-208768-01

^[11] July 19, 2024 Verified Petition For Declaratory Ruling Or, In The Alternative,

For Approvals Of A Holding Company Takeover Docket No 5820-DR-100 https://apps.psc.wi.gov/ERF/ERFview/viewdoc.aspx?docid=509235

^[12] August 26, 2024 Comments of the Citizens Utility Board of Minnesota Docket PA-24-198 www.edockets.state.mn.us/edockets/searchDocuments.do?method=showPoup&documentId={007D6C91-0000-C83D-A721-A9B636DE555E}&documentTitle=20248-209629-02

^[13] August 19, 2024 Comments of the Office of the Attorney General Docket PA-24-198 www.edockets.state.mn.us/edockets/searchDocuments.do?method=showPoup&documentId=%7B10186B91-0000-C13B-AB1F-393C704BB6FE%7D&documentTitle=20248-209588-02

^[14]Lovrien, Jimmy, Minnesota Attorney General, others concerned over possible Allete sale, Duluth News Tribune, August 30, 2024, www.duluthnewstribune.com/news/local/minnesota-attorney-general-others-concerned-over-possible-allete-sale

September 16, 2024

Crypto’s Protection Racket

By Bartlett Naylor

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In Hollywood crime movies, criminals regularly pay off the cops to protect their illicit trade, plots often rooted in reality. (See Serpico.)  The cryptocurrency sector, or “crypto bros,” may be film buffs, because they’re using the very same script. They have deployed a record amount of money into the 2024 election cycle in an attempt to convince lawmakers to ignore crypto’s harms, with obvious results. They’ve wilted the will of politicians, especially Democrats, who must otherwise understand that crypto is a Ponzi-like scheme. (The only way to make a profit is to sell the crypto to someone willing to pay more; there are no dividends from a token that is, after all, simply a string of computer numbers.) The crypto industry’s ultimate target: dismantling the efforts by the Securities and Exchange Commission (SEC), led by brave chair Gary Gensler, to insist that crypto purveyors honor the same rules that apply to all those who invite the public to invest in their projects.

Unfortunately, the current state affairs is that a lawmaker who votes “no” on pro-crypto legislation that would disenfranchise the SEC will lead a handful of crypto zillionaires to deploy millions of dollars to defeat this scrupulous lawmaker in the coming election. Public Citizen’s Rick Claypool documented this phenomenon in two reports. As of August 2024, the crypto sector amassed $169 million to spend in support or opposition to candidates based on their crypto statements and votes. That amount is more than any other sector is spending in elections—more than Wall Street, Big Oil, and Pharma. It’s nearly half of all corporate money contributed in the 2024 election cycle. It’s 15 percent of all known corporate money contributions since the U.S. Supreme Court’s disastrous 2010 decision in Citizens United that made such unlimited corporate political spending legal (expanding the previous 1976 Buckley decision). Alone, this deluge of corporate spending constitutes an unprecedented, frightening corruption of lawmaking, the starkest example to date, as Public Citizen President Robert Weissman has opined.

To be clear, not all corporate political spending is legal. Public Citizen co-filed a complaint with Molly White alleging that contributor Coinbase violated campaign finance rules that prohibit contributions when the firm seeks or obtains a government contract.

A dangerous U.S. House bill that not only harms investor protection for crypto but any investment that uses the same digital platform called blockchain to record transactions drew 71 Democrats in support. These Democrats defied the warnings of Rep. Maxine Waters (D-Calif.) ranking member of the House Financial Services Committee and Minority Leader Hakeem Jeffries (D-N.Y.).  Fear of crypto political spending arguably prevailed.

Other illicit enterprises will surely learn from the example. A sector that bilks billions from Americans will find it a cheap escape from accountability to redirect a small fraction of these ill-gotten gains to buy off enough politicians to block sensible reform.  Ripple, a crypto sponsor and payment systems firm,  paid a $125 million fine following an SEC case. Its otherwise sizeable $45 million in political spending so far in 2024 pales next that penalty.

Importantly, this spending doesn’t pay for political advertisements that discuss crypto. The political ads don’t mention crypto at all.  Crypto policy holds little interest for most Americans. Ninety-three percent of Americans neither own nor use crypto at all, according to Federal Reserve data. And that figure rose over the last few years as more people learn about crypto. The number of people who own crypto has declined over the last several years as information about the sector has increased. Maybe these political ads avoid referencing crypto because a growing number of Americans understand this sector as all hype and little hope. A 2022 Pew poll found that about half of all crypto investors report their experience fell below expectations, and only 15 percent said they did better than anticipated. In 2023, Pew found than 88 percent of Americans familiar with crypto reported they were not confident that crypto is safe.  In the sober confines of the courtroom, where lies and exaggeration aren’t tolerated, even crypto lawyers liken crypto to a Beanie Baby in order to escape SEC oversight, as opposed to an investment in Beanie Baby Inc. (Technically, Ty Inc. ) Maybe the ads don’t mention crypto because sector leaders such as Sam Bankman-Fried and Changpeng Zhao now serve prison sentences for theft or other lawbreaking connected to their crypto companies. Maybe the political ads funded by crypto avoid mentioning their product because scams abound, as detailed weekly by crypto skeptic Molly White, or recorded on an SEC website.

Instead, crypto political spending goes to advertisements with no mention of the candidate’s crypto position. Crypto political funder Fairshake– underwritten largely by venture capital firm Andreesen Horowitz, crypto firm Coinbase, Ripple and others– spent some $10 million to defeat Senate candidate Katie Porter who challenged the massive energy use by crypto. Instead of this issue, the ads deviously claimed she’d broken a promise to eschew support from disfavored industries such as Big Oil and Big Banks, an unfounded assertion. Hiding their breathless claims of crypto potential tellingly reveals they must understand this neither resonates with voters, nor finds purchase in reality

Perniciously, this crypto spending goes to super PACS legally divorced from candidate campaigns. This insulates the candidate from criticism that they may be shills for the crypto Ponzi scheme. By contrast, candidates that accept money from certain rapacious industries such as Wall Street or Big Pharma face public opprobrium for accepting this lucre, as Fairshake unfairly exploited in the Porter race.

The crypto bros openly discuss this protection racket. Said one, “Having money, unfortunately, is a big part of the way government works in the US.” Said another, “It’s now become quite risky, I would say even maybe political suicide, to be anti-crypto in DC.”

Politicians may believe they face a cruel dilemma. They can avoid taking a position on crypto or even vote to support the sector, betraying their scruples. Or they can oppose crypto, and invite the wrath of crypto-funded ads, jeopardizing their election and ability to serve average Americans on a myriad of other issues. Washington doesn’t always follow the Hollywood script where the honest cop eventually prevails over the corrupt ones.

There’s no easy, obvious escape from this dilemma.

Ultimately, Citizens United must be overturned and campaign finance reform fully realized. Until then, this Hollywood crime show becomes a horror movie series.

 

September 12, 2024

Public Citizen Letter to Denton City Council Opposing Denton Municipal Electric’s Proposed Net Metering Repeal

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Denton City Hall
215 E McKinney Street
Denton, TX 76201

Delivered via email

Re: Denton Municipal Electric Net Metering Repeal

Dear Mayor Hudspeth, City Council, and City Manager Hensley:

Public Citizen is a nonprofit consumer advocacy organization that champions the public interest throughout Texas. We work with people across Texas, including Denton, to support the accessibility of clean renewable energy, including rooftop solar.

Public Citizen opposes the Denton Municipal Electric proposal to repeal the net metering policy and replace it with a much lower rate for energy produced by rooftop solar. Your constituents include residents who have invested – or plan to invest – in a rooftop solar system who want to do their part for a healthy environment, save on electric bills, and provide energy security for their families. We urge you to join them in opposing the DME proposal when the utility takes it to the City Council on Sept. 17.

Polling repeatedly shows that rooftop solar is very popular—in Texas and across the country– and it’s no surprise. Not only does this renewable source of energy avoid air pollution and greenhouse gas emissions, but it also avoids the need to develop more land. Rooftop solar is also especially valuable to communities because it creates local jobs, generates sales tax revenue, and allows for resiliency when paired with batteries – which is increasingly common.

Rooftop solar also provides incredible benefits to the electric grid and electric utilities, though many utilities – including DME – aren’t well-versed in assessing that value. Rooftop solar avoids the need for costly and increasingly unreliable transmission, provides energy at a time of day when prices on the ERCOT market are high, reduces the need for ancillary services, suppresses local market prices, and reduces distribution system costs.¹

DME’s proposal to exclude climate and air quality benefits from the value of solar doesn’t reflect reality and does a disservice to the people of Denton. Although Denton Municipal Electric does purchase renewable energy and retire the Renewable Energy Credits (RECs) that offset its load, they do not offset all DME’s emissions, including those from the gas-burning Denton Energy Center (DEC). Additionally, DME’s renewable energy portfolio does not currently align with demand from the utility’s customers, and the utility still relies on fossil fuel generation from the ERCOT grid. Therefore, the ERCOT emissions rate is an appropriate proxy for the avoided emissions from rooftop solar. The DME proposal fails to account for the improved local air quality and climate benefits of reducing the need to burn natural gas at the DEC, or purchase electricity created through the burning of natural gas or coal in the ERCOT market.

If conserving the health of the climate and the local air quality of the people of Denton are priorities for the city of Denton, policies and rates must align with those priorities. For Denton to increase local renewable energy generation, as directed by the City Council-approved Denton Climate Action Plan, the city council must allocate appropriate value to the environmental benefits of rooftop solar. By offering a fair price for electricity produced from rooftop solar systems, more people are likely to invest in the technology.

The simplest and easiest solution is to maintain the current net metering policy. Numerous independent value of solar studies show that net metering is a fair rate policy. However, if the Council and DME wish to accurately examine the full value rooftop solar provides, we strongly encourage a new value of solar study that follows the best practices established in the National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources. This manual provides a systematic approach to accurately valuing the energy that comes from rooftop solar in a specific area.

The City of Denton has demonstrated considerable success building a clean energy portfolio that includes energy efficiency incentives, renewable energy, and a new climate action plan. The city deserves praise for what it has done to this point. Still, there is a lot of work to be done, and a repeal of Denton’s net metering policy would hinder progress towards a clean future. The DME proposal, on the other hand, guarantees more carbon emissions.

City Council should reject this proposal and make it clear that any future discussions of the net metering policy must be considered only after completion of a new value of solar study that follows the best practices described in the National Standard Practice Manual.

We ask you to stand on the side of fairness, a healthy environment and energy security, and against the DME proposal.

Respectfully,
Kamil Cook
Climate and Clean Energy Associate
Public Citizen Texas

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¹“Value of Residential Solar in Texas.” Dunsky Energy & Climate Advisors for Texas Solar Energy Society. July 16, 2024. https://txses.org/wp-content/uploads/2024/07/Value-of-Residential-Solar-in-Texas.pdf.

Public Citizen Model State Law Regulating Non-Consensual Intimate Deepfakes

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A few important recommendations to keep in mind when drafting this legislation:

1. Provide for both civil liability and criminal penalties. Civil liability can afford the victim injunctive and economic relief while the criminal penalty can act as a deterrent.
2. Allow for a defense of consent but require more than mere assertions of oral consent to satisfy it.
3. Disclaimers of inauthenticity or unauthorized creation should not be permitted as a defense against intimate deepfakes,as such disclosure does not mitigate the reputational and psychological harm done to the victims.

Model Language:

SEC. 1. Short title.

This Act may be cited as the [[“Preventing Deepfakes of Intimate Images Act”]].

SEC. 2. Civil Action: Disclosure of intimate digital depictions.

“(a) Definitions.—In this section: 

“(1) CONSENT.—The term ‘consent’ means an affirmative, conscious, and voluntary authorization made by the individual free from force, fraud, misrepresentation, or coercion.

“(2) DEPICTED INDIVIDUAL.—The term ‘depicted individual’ means an individual who, as a result of digitization or by means of digital manipulation, appears in whole or in part in an intimate digital depiction and who is identifiable by virtue of the person’s face, likeness, or other distinguishing characteristic, such as a unique birthmark or other recognizable feature, or from information displayed in connection with the digital depiction.

“(3) DIGITAL DEPICTION.—The term ‘digital depiction’ means a realistic visual depiction of an individual that has been created or altered using digital manipulation and includes stored data which is capable of conversion into a visual image.

“(4) DISCLOSE.— The term “disclose” means to transfer, publish, distribute, or make accessible.

“(5) INTIMATE DIGITAL DEPICTION.—The term ‘intimate digital depiction’ means a digital depiction of an individual that has been created or altered using digital manipulation and that appears to depict— 

“(A) the uncovered genitals, pubic area, anus, or postpubescent female nipple of an identifiable individual; 

“(B) the display or transfer of bodily sexual fluids— 

“(i) onto any part of the body of an identifiable individual; or

“(ii) from the body of an identifiable individual; or

“(C) an identifiable individual engaging in sexually explicit conduct.

“(6) SEXUALLY EXPLICIT CONDUCT.—The term ‘sexually explicit conduct’ means graphic sexual intercourse, including genital-genital, oral-genital, anal-genital, or oral-anal, whether between persons of the same or opposite sex, or lascivious simulated sexual intercourse where the genitals, breast, or pubic area of any person is exhibited; graphic or lascivious simulated bestiality, masturbation, or sadistic or masochistic abuse; or graphic or simulated lascivious exhibition of the anus, genitals, or pubic area of any person;

“(b) Right of action.— 

“(1) IN GENERAL.—Except as provided in subsection (e), an individual who is the subject of an intimate digital depiction that is disclosed without the consent of the individual, where such disclosure was made by a person who knows that, or recklessly disregards whether, the individual has not consented to such disclosure, may bring a civil action against that person in an appropriate district court as set forth in subsection (d).

“(2) RIGHTS ON BEHALF OF CERTAIN INDIVIDUALS.—In the case of an individual who have not attained 18 years of age or are incompetent, incapacitated, or deceased, the legal guardian of the individual or representative of the individual’s estate, another family member, or any other person appointed as suitable by the court, may assume the individual’s rights under this section, but in no event shall the defendant be named as such representative or guardian.

“(c) Consent.—For purposes of an action under subsection (b)— 

“(1) an individual’s consent to the creation of the intimate digital depiction shall not establish that the individual consented to its disclosure; and

“(2) consent shall be deemed validly given only if— 

“(A) it is set forth in an agreement written in plain language signed knowingly and voluntarily by the depicted individual; and

“(B) it includes a general description of the intimate digital depiction and, if applicable, the visual work into which it will be incorporated.

“(d) Relief.— 

“(1) IN GENERAL.— 

“(A) DAMAGES.—In a civil action filed under this section, an individual may recover any of the following: 

“(i) An amount equal to the monetary gain made by the defendant from the creation, development, or disclosure of the intimate digital depiction.

“(ii) Either of the following: 

“(I) The actual damages sustained by the individual as a result of the intimate digital depiction, including damages for emotional distress.

“(II) Liquidated damages in the amount of $150,000.

“(iii) Punitive damages.

“(iv) The cost of the action, including reasonable attorney’s fees and other litigation costs reasonably incurred.

“(B) EQUITABLE RELIEF.—In a civil action filed under this section, a court may, in addition to any other relief available at law, order equitable relief, including a temporary restraining order, a preliminary injunction, or a permanent injunction ordering the defendant to cease display or disclosure of the intimate digital depiction.

“(2) PRESERVATION OF ANONYMITY.—In ordering relief under this subsection, the court may grant injunctive relief maintaining the confidentiality of a plaintiff using a pseudonym.

“(e) Exceptions.—An identifiable individual may not bring an action for relief under this section relating to— 

“(1) a disclosure the defendant can show was made in good faith— 

“(A) to or by a law enforcement officer or agency in the course of reporting or investigating— 

“(i) unlawful activity; or

“(ii) unsolicited or unwelcome conduct; or

“(B) as part of a legal proceeding; 

“or

“(3) a disclosure made in good faith and reasonably intended to assist the identifiable individual.

“(f) In camera.—A court may authorize an in camera proceeding under this section.

“(g) Disclaimers.—It shall not be a defense to an action under this section that there is a disclaimer stating that the intimate digital depiction of the depicted individual was unauthorized or that the depicted individual did not participate in the creation or development of the material.

“(h) Limitations.—For purposes of this section, a provider of an interactive computer service shall not be held liable on account of— 

“(1) any action voluntarily taken in good faith to restrict access to or availability of intimate digital depictions; or

“(2) any action taken to enable or make available to information content providers or other persons the technical means to restrict access to intimate digital depictions.”.

SEC. 3. Criminal action: Intimate digital depictions

“(a) Offense.—Whoever discloses or threatens to disclose or solicits the disclosure of an intimate digital depiction— 

“(1) with the intent to harass, annoy, threaten, alarm, or cause substantial harm to the finances or reputation of the depicted individual; or 

“(2) with actual knowledge that, or reckless disregard for whether, such disclosure or threatened disclosure will cause physical, emotional, reputational, or economic harm to the depicted individual, 

shall be punished as provided under subsection (b). 

“(b) Penalty.—Any person who commits an offense under subsection (a) shall be— 

“(1) fined under this title, imprisoned for not more than 2 years, or both; or

“(2) fined under this title, imprisoned for not more than 10 years, or both, in the case of a violation in which the creation, reproduction, or distribution of the intimate digital depiction could be reasonably expected to— 

“(A) affect the conduct of any administrative, legislative, or judicial proceeding of a governmental agency, including the administration of an election; or

“(B) facilitate violence.

“(c) Disclaimers.—It shall not be a defense to an action under this section that there is a disclaimer stating that the intimate digital depiction of the depicted individual was unauthorized or that the depicted individual did not participate in the creation or development of the material.

“(d) Limitations.—For purposes of this section, a provider of an interactive computer service shall not be held liable on account of— 

“(1) any action voluntarily taken in good faith to restrict access to or availability of intimate digital depictions; or

“(2) any action taken to enable or make available to information content providers or other persons the technical means to restrict access to intimate digital depictions.

“(e) Definitions.—In this section: 

“(1) CONSENT.— The term ‘consent’ means an affirmative, conscious, and voluntary authorization made by the individual free from force, fraud, misrepresentation, or coercion.

“(2) DEPICTED INDIVIDUAL.—The term ‘depicted individual’ means an individual who, as a result of digitization or by means of digital manipulation, appears in whole or in part in an intimate digital depiction and who is identifiable by virtue of the person’s face, likeness, or other distinguishing characteristic, such as a unique birthmark or other recognizable feature, or from information displayed in connection with the digital depiction.

“(3) DIGITAL DEPICTION.— The term ‘digital depiction’ means a realistic visual depiction of an individual that has been created or altered using digital manipulation and includes stored data which is capable of conversion into a visual image.

“(4) DISCLOSE.— The term “disclose” means to transfer, publish, distribute, or make accessible.

“(5) INTIMATE DIGITAL DEPICTION.—The term ‘intimate digital depiction’ means a digital depiction of an individual that has been created or altered using digital manipulation and that appears to depict— 

“(A) the uncovered genitals, pubic area, anus, or postpubescent female nipple of an identifiable individual; 

“(B) the display or transfer of bodily sexual fluids— 

“(i) onto any part of the body of an identifiable individual; or

“(ii) from the body of an identifiable individual; or

“(C) an identifiable individual engaging in sexually explicit conduct.

“(6) SEXUALLY EXPLICIT CONDUCT.— The term ‘sexually explicit conduct’ means graphic sexual intercourse, including genital-genital, oral-genital, anal-genital, or oral-anal, or lascivious simulated sexual intercourse where the genitals, breast, or pubic area of any person is exhibited; graphic or lascivious simulated bestiality, masturbation, or sadistic or masochistic abuse; or graphic or simulated lascivious exhibition of the anus, genitals, or pubic area of any person.

September 9, 2024

Public Citizen Comments on Proposed Air Quality Permit for Wolf Hollow II Generating Station

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¹ From https://www.epa.gov/outdoor-air-quality-data/monitor-values-report, the following values were entered: Pollutant: PM2.5; Year: 2023, 2022, 2021; Geographic Area: Dallas County; Exceptional events: excluded.
² See, e.g. https://time.com/6982015/bitcoin-mining-texas-health/, https://time.com/6982015/bitcoin-mining-texas- health/.
³ The agency would assert that existing permitting procedures do account for community context and cumulative impacts. We disagree.
⁴ See https://www.epa.gov/system/files/documents/2024-04/cps-111-fact-sheet-overview.pdf. 5 See attached EJSCREEN reports based on a one mile buffer around the facility.

Testimony Before the FDA’s Antimicrobial Drugs Advisory Committee Meeting about Sulopenem Etzadroxil/Probenecid for Uncomplicated Urinary Tract Infection

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In testimony before the FDA’s Antimicrobial Drugs Advisory Committee about oral sulopenem etzadroxil/probenecid for the treatment of uncomplicated urinary tract infection in adult women, Public Citizen emphasized our concerns about the significant risk of increasing antimicrobial resistance if the drug was widely used for uncomplicated urinary tract infection, the insufficient evidence that the drug was either a superior drug or needed alternative to existing first line treatments, and the importance of further study of the potential for increased antimicrobial resistance at both the individual and population level.

Project 2025’s Pro-Corruption & Anti-Democracy Agenda

By Jon Golinger, Democracy Advocate

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INTRODUCTION

The Heritage Foundation led the creation of Project 2025, a policy agenda and implementation playbook for a right-wing presidential administration.  Project 2025’s plans are outlined in the 920 page “Mandate For Leadership” briefing book and a series of 23 policy seminars and training videos created by the Heritage Foundation and Project 2025 leaders as a “Masterclass” for a “Presidential Administration Academy.”

A careful review of Project 2025’s plans reveals, among other things, a series of pro-corruption, anti-democracy schemes to fire independent Inspectors General, rollback voting rights, gut anti-corruption law enforcement, replace qualified experts with political cronies, and weaponize the Department of Justice to target local officials and election administrators for partisan political reasons.

I.  Project 2025 Would Eliminate Independent Government Oversight and Accountability

a.  Fire Independent Inspectors General

• There are 74 independent Inspectors General (IGs) working to oversee federal operations and detect and prevent fraud, waste, abuse, and misconduct throughout federal programs.[1] Project 2025 says the President should summarily fire these independent investigators and install loyalists instead.
• “Should the next administration exercise their authority to select and appoint their own IGs?” – Mike Howell, Heritage Foundation [2]
• “Yeah, most certainly. I’m a firm believer in the unitary executive and that they should have control of the people that work within the government.” – Tom Jones, American Accountability Foundation [3]
• “In a new administration, would you rather have some fresh eyes on programs or Miss IG, Debbie DC, who’s been around for half a decade and is up to the same old stuff?” – Mike Howell, Heritage Foundation [4]

      

b.  Terminate public corruption investigations

• Project 2025 says the President should direct a political appointee to review all major active FBI investigations and terminate any they deem “contrary to the national interest.” This could mean that any public corruption investigations into a friend, donor, or ally of the president could be closed, while investigations of enemies would likely continue.
• “Conduct an immediate, comprehensive review of all major active FBI investigations and activities and terminate any that are unlawful or contrary to the national interest.” [5]

c.  Replace Qualified Experts with Political Cronies

• Project 2025 would enact a new “Schedule F” to allow the president to summarily fire 50,000 qualified civil service staff and replace them with partisan political operatives trained by Project 2025.
• “the Trump Administration issued Executive Order 1395724 to make career professionals in positions that are not normally subject to change as a result of a presidential transition but who discharge significant duties and exercise significant discretion in formulating and implementing executive branch policy and programs an exception to the competitive hiring rules and examinations for career positions under a new Schedule F . . . The order was subsequently reversed by President Biden at the demand of the civil service associations and unions. It should be reinstated . . .” [6]

II.  Project 2025 Would Weaponize the Department of Justice to Target Political Enemies

a.  Put the FBI under political control

• Project 2025 proposes to move the FBI out from under the direct supervision of the Deputy Attorney General and under the political control of a Department of Justice presidential appointee who is more “politically accountable” to the President. This could lead to the FBI being misused to support a partisan political agenda.
• “place the FBI under a politically accountable leader” [7]

b.  Take Legal Action Against District Attorneys

• Project 2025 says the president should direct the U.S. Department of Justice (DOJ) to take “legal action” against local elected officials, such as District Attorneys, for ideological reasons.
• “Where warranted and proper under federal law, initiate legal action against local officials—including District Attorneys—who deny American citizens the ‘equal protection of the laws’ by refusing to prosecute criminal offenses in their jurisdictions. This holds true particularly for jurisdictions that refuse to enforce the law against criminals based on the Left’s favored defining characteristics of the would-be offender (race, so-called gender identity, sexual orientation, etc.) or other political considerations (e.g., immigration status).” [8]

c.  Prosecute Election Officials

• Project 2025 wants the President to instruct the Department of Justice to criminally prosecute state election administration officials such as the Pennsylvania Secretary of State for allowing eligible voters to cure defective ballots or vote by provisional ballot.

• “The law in Pennsylvania clearly states that no county may affirmatively provide provisional ballots: The mail-in voter must vote in person and sign a new affidavit. In the 2020 election, the Pennsylvania Supreme Court recognized that ‘the Election Code contains no requirement that voters whose ballots are deemed inadequately verified be apprised of this fact. Thus, unlike in-person voters, mail-in or absentee voters are not provided any opportunity to cure perceived defects in a timely manner.’ Given the Pennsylvania Secretary of State’s use of guidance to circumvent state law, the Pennsylvania Secretary of State should have been (and still should be) investigated and prosecuted for potential violations of 18 U.S. Code § 241.” [9]

III.  Project 2025 Would Undermine Voting Rights and Anti-Corruption Laws

a.  Criminalize the Voting Process

• Project 2025 would open the door to intimidating state and local election workers, conducting sham investigations, and aggressively prosecuting voters and election officials by shifting responsibility for prosecuting election-related offenses from the Department of Justice’s Civil Rights to Division to the Criminal Division.
• “The Attorney General in the next conservative Administration should reassign responsibility for prosecuting violations of 18 U.S. Code § 241 from the Civil Rights Division to the Criminal Division where it belongs. Otherwise, voter registration fraud and unlawful ballot correction will remain federal election offenses that are never appropriately investigated and prosecuted.”[10]

b.  Direct the Department of Justice and Federal Election Commission to limit the prosecution and enforcement of violations of campaign finance law

• Project 2025 says the President should direct the Department of Justice to defer any decision to criminally prosecute campaign finance laws to the members of the Federal Election Commission (FEC), unless the FEC affirmatively votes in favor of enforcement.
• This would empower anti-enforcement FEC commissioners to block enforcement and lead to more corruption with no consequences.
• “The President should direct the DOJ and the attorney general not to prosecute individuals under an interpretation of the law with which the FEC—the expert agency designated by Congress to enforce the law civilly and issue regulations establishing the standards under which the law is applied—does not agree.” [11]

c.  Allow More Big Money in Politics While Reducing Donor Transparency

• Project 2025 says campaign contribution limits should be lifted to allow more big money to flow directly into candidates’ campaigns while campaign contribution disclosure requirements should be weakened to make it harder for voters to find out who is donating to candidates running for federal office.
• “Contribution limits should generally be much higher”[12]
• “index [donation] reporting requirements to inflation.”[13]

 

Footnotes

[1] Congressional Research Service, “Statutory Inspectors General in the Federal Government,” November 13, 2023, https://crsreports.congress.gov/product/pdf/R/R45450

[2] Project 2025 Private Training Video: Oversight and Investigations (Project 2025 Video), minute 16:41; https://www.youtube.com/watch?v=xxe55mU4DA8

[3] Project 2025 Video, minute 16:47

[4] Project 2025 Video, minute 17:20

[5] Project 2025 “Mandate for Leadership” (Project 2025 Mandate), p. 549; https://archive.org/details/2025_MandateForLeadership_FULL/page/549/mode/1up?view=theater

[6] Project 2025 Mandate, pp. 80-81

[7] Project 2025 Mandate, p. 550

[8] Project 2025 Mandate, p. 553

[9] Project 2025 Mandate, p. 564

[10] Project 2025 Mandate, p. 562

[11] Project 2025 Mandate, p. 863

[12] Project 2025 Mandate, p. 866

[13] Project 2025 Mandate, p. 866