U.S. senators call for banning, prosecuting ‘slumlords’ of military housing

By M.B. Pell

NEW YORK (Reuters) – U.S. senators on Tuesday demanded the Defense Department crack down on private landlords who provide substandard housing at military bases with criminal prosecutions or contract cancellations, citing Reuters reports of slum-like living conditions and falsified accounting.

The top civilian and military leaders of the Army, Navy and Air Force appeared before the Senate Armed Services Committee, in the latest hearing addressing substandard military housing.

On Tuesday, senators were presented with a new report from the Government Accountability Office, a Congressional watchdog conducting a review of the housing program that was launched following the Reuters reports. Among the GAO’s core findings: Housing reports sent to Congress are often misleading, painting a falsely positive picture of housing conditions. The program also suffers from inaccurate landlord maintenance reports and lax military oversight, the GAO reported.

To read the GAO report, click: https://bit.ly/35UzZbC

Some senators asked whether the military’s two-decade-old program of having private landlords provide housing on U.S. military bases has failed.

“Are any of them not acting like slumlords at this point? Are any of them doing a good job?” asked Senator Martha McSally, an Arizona Republican and former U.S. Air Force combat pilot. “This pisses me off.”

For more than a year, Reuters has exposed lead, asbestos, mold and vermin contaminating homes where private landlords house thousands of military families on behalf of the Pentagon. More recently, the news agency disclosed how one major landlord doctored maintenance records at some of its bases to help it collect bonus incentive fees.

To read the coverage, click: https://reut.rs/2r1Bkim

Top Defense Department officials have long touted high occupancy rates and satisfaction scores on military family surveys as evidence the effort is generally successful, despite occasional hiccups. But Elizabeth A. Field, the GAO’s director of defense capabilities and management, told senators: “There’s clearly a problem here.”

Army Secretary Ryan McCarthy defended the privatization effort, saying it allowed the military to tap private borrowing that would otherwise be unavailable.

“That doesn’t mean it’s worked out great,” added Acting Navy Secretary Thomas B. Modly. Some privatized housing is “fantastic,” he said, but other housing is not.

The secretaries cited reform steps already taken, including far-reaching inspections of military housing and a planned tenant bill of rights to empower military families.

Senators pressed the secretaries to do more to hold accountable military leaders and landlords.

Oklahoma Republican Jim Inhofe, chair of the Senate Armed Services Committee, asked Air Force Secretary Barbara M. Barrett why she couldn’t “pull the plug” on Balfour Beatty Communities, one of the military’s largest landlords.

This year, Reuters quoted five former Balfour Beatty employees who said they filed false maintenance records at Air Force bases to help the company collect millions in bonus payments. Balfour Beatty, a unit of British infrastructure giant Balfour Beatty PLC <BALF.L>, has said that it is committed to improving its maintenance, and that it has tapped outside counsel and auditors to investigate.

Air Force Secretary Barrett said the Air Force has lost confidence in the company, but stopped short of committing to removing it from the program.

A company spokesman said Balfour Beatty plans this month to finish a “performance improvement plan” requested by the Air Force.

Democratic senators Richard Blumenthal, from Connecticut, and Mazie Hirono, from Hawaii, urged the military to refer instances of fraud for criminal prosecution.

“We probably need to make an example out of a couple of them,” said Senator Thom Tillis, a North Carolina Republican.

(Reporting by M.B. Pell in New York. Additional reporting by Joshua Schneyer. Editing by Ronnie Greene)

U.S. senators tell drug company executives pricing is ‘morally repugnant’

By Yasmeen Abutaleb and Michael Erman

WASHINGTON/NEW YORK (Reuters) – U.S. senators called drug pricing practices “morally repugnant” and told drug company executives they do not want to hear them blame others for the high prices, taking an aggressive stance at a Senate hearing on the rising costs of prescription medicines.

Senators took aim in particular at Abbvie Inc Chief Executive Richard Gonzalez and his company’s rheumatoid arthritis drug Humira – the world’s top-selling prescription medicine.

Executives from AstraZeneca PLC, Sanofi SA, Pfizer Inc, Merck Co, Johnson & Johnson and Bristol-Myers Squibb Co also answered questions from members of the U.S. Senate Finance Committee.

The executives pointed to their companies’ records of developing lifesaving medications, saying profits generated in the lucrative U.S. market help them fund expensive research and development of future treatments.

“American research-based companies are leading the next wave of biomedical innovation to help patients whose diseases cannot be adequately treated with today’s medicines. We should work to ensure policies that support and reward these investments,” said Bristol-Myers CEO Giovanni Caforio.

The executives also voiced support for plans to reform the industry-wide system of rebates that pharmacy benefit managers (PBMs) and health insurers receive from drugmakers in exchange for preferential coverage of their medicines.

In his opening statement, Senator Ron Wyden, the Finance Committee’s top Democrat, tore into each company one-by-one for “profiteering and two-faced scheming.”

“Drugmakers behave as if patients and taxpayers are unlocked ATMs full of cash to be extracted, and their shareholders are the customers they value above all else,” Wyden said.

Senators from both parties targeted AbbVie’s Gonzalez, with Wyden noting that the CEO’s bonus was partially tied to Humira sales, which reached nearly $20 billion globally last year. Republican Senator John Cornyn criticized the company’s web of more than 130 patents that protects Humira’s exclusivity.

The drug has a list price of more than $60,000 a year, nearly double what it was in 2014, according to Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines.

“I support drug companies recovering a profit based on their research and development and development of innovative drugs. But at some point, that patent has to end, that exclusivity has to end, to be able to get it at a much cheaper cost,” said Cornyn, the No. 2 Senate Republican from Texas.

Cornyn suggested that the powerful Senate Judiciary Committee should examine the U.S. patent system under which drug companies protect the exclusivity of their medicines.

Congress has already held several hearings on rising prescription drug prices in both the Democrat-controlled House of Representatives and the Republican-led Senate, but Tuesday’s hearing is the first time drug company executives, most of them CEOs, will face lawmakers in more than two years.

U.S. President Donald Trump has said drugmakers are “getting away with murder,” and his administration has made bringing down prescription medicine costs for U.S. consumers a top priority.

The U.S. Department of Health and Human Services (HHS) last year rolled out a plan to lower drug prices and has introduced several modest proposals to curb medicine costs, but Democrats have said the Trump administration is not doing enough.

HHS has proposed a rule to eliminate rebates for drugs paid for by Medicare and Medicaid, the government health insurance programs.

Several drugmakers temporarily froze price increases last year after criticism from Trump, but they raised prices on more than 250 prescription drugs at the start of this year, albeit at lower levels than in years past.

(Reporting by Yasmeen Abutaleb; editing by Jonathan Oatis and Bill Berkrot)

U.S. senators want probe of drug trafficking tied to Venezuela government

Venezuela's Vice President Tareck El Aissami talks to the media during a news conference in Caracas, Venezuela November 17, 2017.

By Patricia Zengerle

WASHINGTON (Reuters) – Two U.S. senators called on the U.S. Department of Justice on Wednesday to investigate allegations of drug trafficking by senior officials in the government of Venezuelan President Nicolas Maduro, as the country struggles with economic crisis.

In a letter to U.S. Attorney General Jeff Sessions seen by Reuters, Republican Senator Marco Rubio and Democrat Robert Menendez said they were concerned about possible connections between Maduro’s government and drug trafficking organizations and wanted an investigation “in order to better understand the nexus between criminal actors and members of Maduro’s inner circle.”

Despite being a major oil producing country, Venezuela is undergoing a severe economic and social crisis, with millions suffering food and medicine shortages, hyperinflation and growing insecurity.

Rubio is chairman of the Senate Foreign Relations Committee’s western hemisphere subcommittee, and Menendez is its ranking Democrat. Both lawmakers are vocal critics of the Venezuelan government.

In their letter, they raised concerns that the situation in Venezuela could destabilize the region.

The Venezuelan Information Ministry did not immediately respond to a request for comment. In the past, Maduro has dismissed accusations about drug trafficking links as a smear campaign by Washington, adding that the United States is to blame for the drug trade because it is such a large market for illegal narcotics.

On Aug. 1, 2016, a U.S. District Court announced the indictment of Nestor Reverol, who is now Venezuela’s interior minister, on charges of participating in an international cocaine trafficking conspiracy. In February 2017, the U.S. Treasury Department imposed sanctions against Venezuelan Vice President Tareck el-Aissami for drug trafficking and other related crimes.

And in December 2017, two nephews of Maduro’s wife, Franqui Francisco Flores de Freitas and Efrain Antonio Campo Flores, were convicted in U.S. federal court for drug smuggling.

The European Union announced new sanctions on several senior Venezuelan officials, including Reverol, on Monday, saying this was an expression of the bloc’s concern with the political crisis under Maduro.

Rubio and Menendez also asked Sessions to support efforts by the Organization of American States to address human rights concerns in Venezuela.

A Justice Department spokeswoman did not immediately respond to a request for comment on the letter, which was sent on Wednesday.

(Reporting by Patricia Zengerle; additional reporting by Brian Ellsworth in Caracas; editing by Susan Thomas)

U.S. senators urge Trump to take tough line on Russia over Ukraine

U.S. Senator Richard Durbin (D-IL) (C) talks with reporters after the weekly Democratic caucus policy luncheon at the U.S. Capitol in Washington, U.S.

By Patricia Zengerle

WASHINGTON (Reuters) – A bipartisan group of 27 U.S. senators sent a letter to President-elect Donald Trump on Thursday urging him to take a tough line against Russia over what they termed its “military land grab” in Ukraine.

The letter, whose 12 Republican and 15 Democratic signatories included some leading foreign policy voices from Trump’s Republican party, was an early sign that lawmakers will publicly assert themselves on international matters where they disagree with his White House.

The New York property developer becomes president on Jan. 20.

Trump signaled during his campaign that he might take a softer line in dealings with Moscow, repeatedly praising Russian President Vladimir Putin’s leadership. Putin said recently Trump confirmed to him that he was willing to mend ties.

“In light of Russia’s continued aggression and repeated refusal to respect Ukraine’s territorial integrity and sovereign right to choose its own destiny, we also renew our call for the United States to increase political, economic and military support for Ukraine,” said the letter, led by Senators Richard Durbin, a Democrat, and Rob Portman, a Republican, who are co-chairmen of the Senate Ukraine caucus.

In the letter, seen by Reuters before its public release, the senators also said they believe Russia’s annexation of Crimea should not be accepted and the United States should not lift sanctions imposed on Russia for its behavior in eastern Ukraine.

President Barack Obama and Putin have had a challenging relationship, with stark differences over Russia’s actions in Ukraine and Syria. Tensions have risen more with Obama’s Democratic Party in particular over cyber attacks attributed to Russia during the U.S. presidential election.

Among Republican senators who signed the letter were John McCain, chairman of the Senate Armed Services Committee, and Lindsey Graham, head of the appropriations subcommittee that oversees the State Department.

A majority of Republicans and Democrats on the Senate Foreign Relations Committee, including ranking Democrat Ben Cardin, signed the letter. Jack Reed, the top Democrat on Senate Armed Services, also did so.

(Reporting by Patricia Zengerle; Editing by Leslie Adler and Alistair Bell)