Experts explain why British Gas profits soar by 889% while households struggle to pay bills

Wholesale energy prices have fallen but this has not fed through to consumers due to lack of incentives, say experts

Tara Cobham

The Independent

British Gas owner Centrica sees supply arm profits soar on price cap boost

Experts have explained why British Gas has reported its highest-ever first-half profits of almost £1bn while households continue to struggle to pay huge bills amid the cost of living crisis.

The supplier’s owner Centrica made a £6.5 billion profit in the first half of 2023, while earnings at its supplier arm soared by 889 per cent. The figures were released as another energy giant, Shell, also announced profits of £3.9 billion over the past three months.

Dr George Dibb, head of the Centre for Economic Justice at the UK think tank IPPR, explained that while wholesale energy prices have fallen from their summer 2022 peak, this has not yet been fed through to customers. This means bills remain high while energy firms’ profits do too.

Dr Jeevun Sandher, head of economics at the New Economics Foundation, said energy firms lacked any incentive to lower energy bills simply because wholesale energy costs have come down. This is due to a combination of lack of regulatory oversight, little competition within the sector, and an energy price cap that companies are reluctant to go under, he explained.

“I haven’t seen any deals on the market that say you’ll get lower than the energy price cap,” he told The Independent. “The consumers in this situation are powerless. The government and the regulators should step in – the consumers themselves can’t really do it.”

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Dr Dibb also pointed out: “Consumers don’t have the power – firms have pricing power.” He said this was especially so when it comes to services people have no choice but to continue purchasing, such as energy and food, even when inflation is worsening. “If a family is struggling, they can’t not have food for their kids or not put the heating on,” he said. “People are already struggling with bills and then they can’t skimp and save anymore. So we’ve seen a great number of people pushed into poverty.”


However, Dr Sandher did say the energy price cap – which is currently set at £2,074 for a typical household per year, about twice as high as it was before the pandemic – is set to fall slightly when it is reviewed in October.

Dr Dibb said that will see bills come down in the next few months but that was down to the regulator Ofgem reducing the cap rather than companies helping out.

British Gas has reported its highest-ever first-half profits of almost £1bn
(Getty)

“Energy firms’ primary concern is about rewarding shareholders,” he said, adding he was not surprised at the reports of huge profits as “that has been a pattern for the last two years”.

He continued: “It demonstrates that our economy is fundamentally unfair. Real wages remain low, yet corporate profits continue to rise. It is people on salaries who are bearing the weight of inflation rather than companies and their profit margins.”

An Ofgem spokesperson said the energy sector was expected to return to profit this year after four years of loss-making and said the soaring profits seen in the first half of this year were a “one-off”. They added that the rise in profits meant suppliers could recoup some of the significant costs and losses they incurred over recent years due to Covid and the Russian invasion of Ukraine.

“We have been clear the sector must not pay dividends until they are financially robust enough to weather future shocks.  We’re closely monitoring levels of customer service, support and financial adequacy and can and will act where suppliers are found lacking. Part of this monitoring will include checking for undue benefits for suppliers as prices fall and profits return and, where we see this, Ofgem will recoup money from suppliers for consumers via the price cap,” they added.

Minister for Energy Consumers and Affordability Amanda Solloway said: “We have stood by consumers as Putin’s illegal attack on Ukraine sent wholesale prices to record highs, covering half a typical household energy bill this winter. Now prices are falling, from this month a typical household will save £426 a year on their bills.”

The Independent has approached British Gas for comment.

AMERIKA
Schools lost track of homeless kids during the pandemic. Many face a steep path to recovery

by CHEYANNE MUMPHREY Associated Press

July 29, 2023

Photo by Pixabay on Pexels.com

PHOENIX (AP) — By the time Aaliyah Ibarra started second grade, her family had moved five times in four years in search of stable housing. As she was about to start a new school, her mother, Bridget Ibarra, saw how much it was affecting her education.

At 8 years old, her daughter did not know the alphabet.

“She was in second grade and couldn’t tell me any of the letters. I would point them out and she didn’t know,” Bridget Ibarra said. “She would sing the song in order, but as soon as I mixed them up, she had no idea.”

“I just didn’t know what letters were which,” says Aaliyah, now 9. “I know them now.”

The family’s struggles coincided with the COVID-19 pandemic that forced Aaliyah to begin her school experience online. Unfamiliar with a computer, Aaliyah was regularly kicked out of the virtual classroom, her mother said. Teachers complained she was not looking at the screen and took too many breaks.

Zoom school was especially difficult for Aaliyah because she was homeless — and like thousands of students nationally, her school didn’t know.

Homeless students often fell through the cracks during the tumult of the pandemic, when many schools struggled to keep track of families with unstable housing. Not being identified as homeless meant students lost out on eligibility for crucial support such as transportation, free uniforms, laundry services and other help.

Years later, the effects have cascaded. As students nationwide have struggled to make up for missed learning, educators have lost critical time identifying who needs the most help. Schools are offering tutoring and counseling but now have limited time to spend federal pandemic relief money for homeless students, said Barbara Duffield, executive director of SchoolHouse Connection, a national homelessness organization.

“There is urgency because of the losses that have occurred over the pandemic — loss in learning, the gaps in attendance and the health crisis,” she said. Many education leaders, Duffield said, don’t even know about federal money earmarked for homeless students — and the programs expire next year.

The number of children identified as homeless by schools nationwide dropped by 21% from the 2018-2019 school year to the 2020-2021 school year, according to federal data. But the decrease, representing more than 288,000 students, likely includes many kids whose homelessness was unknown to schools. Federal counts of homeless people living on the street or in shelters also appeared to decrease in 2021 due to pandemic disruptions, but by 2022, those numbers shot up to the highest in a decade.

In Bridget Ibarra’s case, she chose not to tell the school her kids were homeless — and she says teachers, disconnected from students by a screen, never asked. She was worried if officials knew the family was staying in a shelter, and the school was obliged by law to provide transportation, the family would face pressure to enroll in a different school that was closer.

She knew how hard the disruptions were on her kids.


“I know they didn’t enjoy moving as often as we did. They would say things like, ‘We’re moving again? We just moved!’” Ibarra said.

“When I moved, I missed my friends and my teacher,” Aaliyah said.

The stigma and fear associated with homelessness also can lead families not to tell anyone they lack secure housing, Duffield said.

“If we don’t identify children proactively, we can’t ensure that they have everything they need to be successful in school and even go to school,” she said.

Before the pandemic, Ibarra and her two children moved in with her brother in Phoenix because she was having trouble making ends meet. Then her brother died unexpectedly. At the time, Ibarra was pregnant with her third child and couldn’t afford the rent with what she earned working at a fast-food restaurant.

The family spent the next six months at Maggie’s Place, a shelter in North Phoenix that caters to pregnant women. The four of them, including Aaliyah’s infant brother, moved next to Homeward Bound, an apartment-like shelter for families, where they were living when the pandemic hit a few months before Aaliyah started kindergarten.


Aaliyah’s school, David Crockett Elementary, stuck with online learning her entire kindergarten year. Aaliyah and her older brother, joined by several other children, spent most of their school days on computers in a mixed-grade makeshift classroom at the shelter.

“It was like she wasn’t even in school,” Ibarra said.

While the shelter helped the family meet their basic needs, Ibarra said she asked the school repeatedly for extra academic help for her daughter. She blamed the struggles partly on online learning, but she also felt the school was giving all their attention to Aaliyah’s older brother because he already was designated as a special education student with an individualized education program, or IEP.

The principal, Sean Hannafin, said school officials met frequently with the children’s mom. He said they offered the support they had available, but it was hard to determine online which students had needs that required intervention.

“The best thing we could do was take that data and flag them for when we returned in person, because you need a certain amount of time to observe a child in a classroom,” he said. “The online setting is not the place to observe.”

A federal law aimed at ensuring homeless students have equal access to education provides rights and services to children without a “fixed, regular and adequate nighttime residence.”

Many students aren’t identified as homeless when their parents or guardians enroll them. At school, teachers, cafeteria staff, aides or bus drivers often notice other students whose well-being may need looking into. Students may have unwashed clothes, or many late arrivals or absences.

But with children learning online, teachers and staff often didn’t see those things.

Overall, the drop in the student homelessness count began before the pandemic, but it was much steeper in the first full school year after COVID-19 hit. The percentage of enrolled students identified as homeless in the U.S. dropped from 2.7% in 2018-2019 to 2.2% in 2020-2021.

Over that timeframe, Arizona had one of the biggest drops in the number of students identified as homeless, from about 21,000 to nearly 14,000. But there were signs many families were in distress. KateLynn Dean, who works at Homeward Bound, said the shelter saw huge numbers of families dealing with homelessness for the first time during the pandemic.

Eventually, Bridget Ibarra had to enroll Aaliyah in a different school.

After getting kicked out of low-income housing last year when their property owner sold the building, the family lived with Ibarra’s mother before finding another low-income unit in Chandler, more than 20 miles (32 kilometers) east of Phoenix.

Once the family moved, enrolling in school was far from easy. Aaliyah missed the first three weeks of the school year last fall because of delays obtaining transcripts, and Ibarra insisted she not start the year without a plan to address her delays in reading and writing. Aaliyah spent that time playing and sitting around the house.

“Honestly, Aaliyah said she didn’t care how long, because she didn’t want to go to that school anyway,” her mother said. She said Aaliyah missed her friends and was tired of moving.

At Aaliyah’s new school, Frye Elementary, Principal Alexis Cruz Freeman saw for herself how hard it was to keep in touch with families when children were not in classrooms. Several students disappeared altogether. But she said families have started re-engaging with school. The state of Arizona reported more than 22,000 students were identified as homeless in the last school year — twice as many as the year before.

Ibarra said she tried to shield as much discomfort about their living situation from her kids as possible. It worked. Aaliyah doesn’t remember much about the places they’ve stayed except the people that surrounded her family.

Aaliyah has gained ground academically at her new school, Cruz Freeman said. She still has trouble pronouncing and recognizing some words. But by the end of the school year, she was able to read a text and write four sentences based on its meaning. She is also performing at grade level in math.

The principal considers her a success story in part because of her mother’s support.

“She was an advocate for her children, which is all that we can ever ask for,” Cruz Freeman said.

___

Associated Press data journalist Sharon Lurye contributed to this report from New Orleans.

___

The Associated Press education team receives support from the Carnegie Corporation of New York. The AP is solely responsible for all content.

AMERIKA

HOW RACIALIZED POLICING HAS AFFECTED MULTIPLE GENERATIONS OF OUR FAMILY

TIME
IDEAS
BY TONI MICHAELS AND JON MICHAELS
JULY 29, 2023 
Toni Michaels is an attorney and community activist. Jon Michaels is a law professor, as well as the author of Constitutional Coup and a forthcoming book titled Vigilante Democracy


Our son, “Ben” (whose name we’ve kept private at his request) is just a kid—a shy, squirmy, and anxious preteen who loves Star Wars and sticks close to his mom. But because he’s also just a Black kid, Ben’s not afforded the luxury of losing himself completely in any escapist sci-fi realm—nor can he trust that his mom will always be able to protect him.

For that reason, he’s heard versions of "The Talk" more times than he’s seen The Rise of Skywalker.

“Listen,” we began slowly as we offered yet another presentation of The Talk. Ben and his sisters had heard our spiel seven, maybe eight times already. Events demanded a refresher.

On Jan. 3, 2023, a Black school teacher from Washington, DC was pulled over while on holiday in Los Angeles. Reacting to what appeared to be a panic attic, LAPD officers tased Keenan Anderson six times in the span of 42 seconds. The vacationing motorist, who pleaded “please, sir, don’t do this” and exclaimed “they’re trying to George Floyd me,” died several hours later.

Then, on January 7, 2023, Memphis police stopped Tyre Nichols for alleged reckless driving. The officers issued “dozens of contradictory and unachievable orders,” and then brutally and lethally beat the twenty-nine-year-old man. Amid the chaos and violence, Nichols cried out for his mother, a woman whose home stood a mere 100 yards away.

Young. Black. Male. Panic-Stricken. Devoted to his mother.

While we know those attributes apply to so many loving, joyful, and spirited sons, brothers, dads, and husbands, our thoughts turned squarely to Ben.

Read More: Tyre Nichols' Killing Is The Result of a Diseased Culture

“We’ve told you this before…. But if the police ever stop the car, sit perfectly still,” we explain. “Don’t scream. Don’t wiggle. Don’t unbuckle your seatbelt. Don’t dig into your backpack. Don’t reach for Mom!”

“But….”

“No buts.”

Our lawyerly middle child is a tireless and inventive debater. He tried again: “But….”

“Listen, there’s nothing to argue. We just need your help to get through a situation like this.”

The barrister-in-training wasn’t done. “Wait….” His face lit up. Ben had the answer; at least he thought he did.

With theatrics reserved for the likes of a Jedi Perry Mason, Ben slowly rolled up his sleeves to show us his rail-thin—and walnut-colored—arms. “Look,” he insisted, “it’s possible they’ll think I’m White. You guys see it, right? Right?”

Our faces made clear we were anything but bowled over. Still, our Padawan persisted, selling it the best he could. We wanted to credit his ingenuity and his survival instincts. But we couldn’t indulge him. Deflated, horrified, and simply saddened, all we could do was shake our heads.


“Maybe we can let them know I’m biracial? Maybe they’ll…they’ll just know!” Ben was now bargaining, urgently, pathetically. He stared intently at his unmistakably White dad, hoping he would agree to punch his privilege ticket. But I (Jon) just looked down at the floor.

I (Toni) was likewise no help. I reminded Ben of what the latter already knew: He’s the spitting image of me—and thus unmistakably Black. “Ben, you and I… the police aren’t going to give either one of us a pass,” I explained.

In all of our previous renditions of The Talk, passing never came up. The thought hadn’t even crossed our minds, in part because Ben has always identified as Black and in part because we never thought he could get away with it. And, in all of our previous renditions, we never brought up Wiley—Ben’s maternal great-grandfather.

When Wiley began practicing law in the Jim Crow South, he’d regularly receive frantic calls. Someone’s son, brother, or cousin had been arrested—on trumped-up charges—and was now being held in a backwater county jail. Knowing it’d prove unhelpful (and likely dangerous) for a young Black attorney to barge into those sheriff’s offices demanding justice, Wiley worked the phones.

Pretending to be just another good ol’ boy on the other end of the line, Wiley laid it on thick. Mimicking the patois of the White men who so strenuously opposed his bar admission, Wiley introduced himself as a country lawyer from “up a-ways.” He’d ask “how’s the “fishin’ down there,” feign excitement about “huntin’ season,” and commiserate with the sheriff over “no-good civil rights agitators stirring up ‘our Blacks.’”

Then, and only then, did he get down to business. Wiley claimed that the detainee in question was kin to one of his domestics. And this domestic, he advised, was so struck with worry that she was useless around the house. Then came the closing: As one (strongly implied) White man to another, would the sheriff do him a favor and “let the ‘boy’ go.”

According to family lore, Wiley’s magic worked every time.

That story had always filled Wiley’s children and grandchildren with pride. This time, though, Ben’s desperate gambit soured my (Toni’s) memory; the customary feeling was now outstripped by heartache.

Wiley’s strategic passing as White in 1950s Arkansas was plucky and daring, a selfless, stopgap measure en route to full racial equality. Thanks to the then-burgeoning Civil Rights Movement, passing would soon be passé.

Ben’s recent plea to pass hit us very differently. His plan was clunky and implausible. Unable to conceal his coloring behind Ma Bell’s skirt, as Wiley once could thanks to his savvy telephonic advocacy, Ben wasn’t going to fool anyone. What’s more, that once-promising future of full racial equality looks far less bright today as powerful strains of White nationalism re-infect our politics and constitutional jurisprudence. (Indeed, since this particular exchange with Ben, we’ve had to repeat and recast The Talk, now adding doorsteps and one’s own home to an ever-expanding list of danger zones.)

Today’s rollback in civil rights further links Wiley and Ben. Wiley spent his career in the trenches, integrating schools in Little Rock, defending Mississippi Freedom Riders, expanding voting rights in Georgia, and readying the next generation of Black lawyers as Dean of Howard University’s storied law school.

In between Wiley and Ben, there’s us. We’re the beneficiaries of Wiley’s battles: The granddaughter of a civil rights lawyer and the grandson of Eastern European refugees; an interracial, interfaith couple whose love blossomed while in school together—surely the segregationists’ greatest fear—and yielded three wonderful kids. Yet the Wiley-to-Ben link is not shiny and sturdy, but tarnished and frayed. For here we are, living not in the deep red south but in bright blue California, some 70 years later, parents to a young Black male feeling Wiley’s same sense of urgency to outfox the good ol’ boys with badges.

Biden commemorates 75th anniversary of desegregation order in U.S. armed forces and condemns political blockade on military appointments

by NNPA Newswire Senior Correspondent

 Stacy M. Brown

July 29, 2023

President Joe Biden Credit: Official White House Photo by Adam Schultz

In a ceremony held at the Truman Library Institute, President Joe Biden paid tribute to a pivotal moment in American history—the 75th anniversary of the executive order signed by President Harry Truman that desegregated the U.S. Armed Forces.

The commemoration not only honored the courage and sacrifice of Black veterans but also highlighted the profound impact of diversity on the strength and capabilities of the military.

President Harry S. Truman’s landmark order, signed on July 26, 1948, declared that there should be “equality of treatment and opportunity for all persons in the armed services without regard to race, color, religion, or national origin,” Biden emphasized.

During the three-day symposium, Biden championed the significance of this decision, which paved the way for future civil rights laws and legal rulings and laid the foundation for a more inclusive and powerful military.

In his address, the President praised the contributions of service members of color, acknowledging their equal bravery and sacrifices.

He celebrated the increasing diversity within the U.S. military, noting that over 40 percent of the active-duty force comprises people of color, a significant increase from the mere 2 percent representation in 1948.

“As our military became more diverse, it became stronger, tougher, and more capable — proving our diversity is a strength, not a weakness — a necessary part of our warfighting and our deterrence and our successful military operations,” the President insisted.

“And our unity out of many, not division, ensures good order and discipline, unit cohesion, effectiveness, and military readiness. We’ve seen it with generations of patriots, regardless of who they are mentored and trained by. Fellow servicemen from every background, like my friend, the late Colin Powell.”

Biden also highlighted the progress made in promoting gender equality, with about 20 percent of the current active-duty force comprised of women.

“Our military became stronger, tougher, and more capable as it became more diverse,” Biden asserted.

He noted that diversity is not a weakness but a strength, vital to successful military operations, warfighting, and deterrence.
Unity, he said, is a critical factor in maintaining good order, discipline, and unit cohesion.

However, the President also used the occasion to address a pressing issue affecting the military—the political blockade on military appointments.

He pointed out that Republican senators, particularly Sen. Tommy Tuberville from Alabama, have been obstructing more than 300 military operations nominations for political reasons, causing significant harm to military readiness, security, leadership, and troop morale.

Among the pending appointments is General C.Q. Brown, an F-16 pilot and wing commander, who is poised to become the first African American to lead any Armed Services branch as Chairman of the Joint Chiefs of Staff. Additionally, Admiral Lisa Franchetti, the second woman in the Navy to achieve the rank of four-star admiral, is awaiting confirmation as the first female Chief of Naval Operations.

Biden voiced his concern that this partisan freeze on appointments is disrupting military families’ lives, freezing their pay, and impacting their ability to plan for the future.

He argued that it’s crucial to have these outstanding leaders confirmed to address national security challenges effectively and support military families in their critical career decisions.

The President also criticized the opposition to Pentagon policies that would grant servicemen and women and their family’s access to reproductive healthcare rights in states where such access is currently denied.

He condemned the GOP blockade, stressing that it was affecting the lives of military spouses and service members stationed in those states.

Biden urged an end to the political impasse, emphasizing the importance of putting the needs of the military first and prioritizing national security above partisan agendas.

“A growing cascade of damage and disruption, all because one senator from Alabama and 48 Republicans who refuse to stand up to him, to lift the blockade over the Pentagon policy offering servicemen and women, their families access to reproductive healthcare rights they deserve if they’re stationed in states that deny it,” Biden remarked.

“I think it’s outrageous. But don’t just take it from me. Hundreds of military spouses petitioned to end the extreme blockade. One spouse referencing the senator from Alabama said, quote, ‘This isn’t a football game. This nonsense must stop right now.’”

Tax complaint filed against rightwing parents’ rights group Moms for Liberty




Michigan attorney alleges organization, named an extremist group by Southern Poverty Law Center, in violation of non-profit status

MacKenzie Ryan

THE GUARDIAN 

Sat 29 Jul 2023 

A Michigan attorney has confirmed she filed an Internal Revenue Service (IRS) complaint against Moms for Liberty, the parental rights group with positions against racially inclusive and LGBTQ+ education in schools. The complaint, which is private but was obtained by the Guardian, alleges that the rightwing organization is in violation of its 501(c)4 non-profit status.

Experts in tax law say an IRS investigation into the Moms for Liberty, named an extremist group by Southern Poverty Law Center, would take at least two years. If their non-profit status is revoked, it would most likely cause the group to re-characterize as a private organization, further decreasing transparency about how money is flowing into it.

Representatives for Moms for Liberty declined to comment, saying they would be unable to respond to questions without seeing a copy of the complaint.

The eight-page complaint questions whether Moms for Liberty is a political educational organization and notes public posts endorsing Republican candidates, the group’s campaigning for Republican candidates, and links to partisan training materials.

“It would be a permissible educational purpose if there were advocating to remove gender discussions from classrooms and schools if there was a balanced presentation of benefits and drawbacks of using a person’s preferred pronouns, supporting LGBTQ youth, impacts on children of being ‘exposed’ to LGBTQ supportive environments,” the complaint states. “There is not.”

The complaint cites a landmark case, American Campaign Academy v Commissioner, in which a school for Republican candidates was ultimately denied its non-profit status because it was providing partisan-only education.

Admission to local chapters is through private Facebook pages and controlled by the national organization, the complaint continues, obscuring the ability to determine how the group’s educational activities benefit the public.

The IRS complaint also examines if Moms for Liberty is an action organization, raising questions about its participation in political campaigns and active recruitment of school board candidates.

“The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office,” the complaint reads. “However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity.”

Many of the elements of the complaint – the issues raised about Moms for Liberty’s private memberships and websites and questions about it being a political educational organization – will not pass muster, Phillip Hackney, associate professor of law at University of Pittsburgh said, though Hackney said he does think the complaint is correct in bringing up the group’s intervention in political campaigns. 501(c)4 groups, the most common type of dark money organizations, are allowed to endorse candidates and participate in an unlimited amount of lobbying. Hackney warned the group’s campaigning and promoting candidates can theoretically get into “a damage area” if it exceeds 25% of their group’s activities.

If it stretches past that to 25 to 50% of the group’s activities, it reaches “a real danger zone”, he said. Once campaigning becomes more than half of what the group is participating in, they can lose their non-profit status. With continuing budget resolutions, Hackney said Congress has made it hard for the IRS to give clarity in this space.

Additionally, Hackey calls 501(c)4 groups “charitable-organizations lite”, formed exclusively for social welfare purposes with the goal of doing something broadly in the public interest. Social welfare is a hard-to-define term, he said; as a result, the organizations that don’t quite fit the standards for a charitable non-profit will instead go into the “trash bin” of a 501(c)4.

A wide range of organizations can fit into the gray-area definition of social welfare. An Urban Institute study found that the majority of 501(c)4 groups are community service clubs, but also include sports leagues, veterans organizations, health providers and insurers, and homeowner and tenant associations.

More people are familiar with 501(c)3 non-profit, tax-exempt charitable organizations that do not need to pay taxes on earnings or donations, a benefit that makes this type of non-profit “superior” to 501(c)4 social welfare organizations, Hackney said. Charities can do a small amount of lobbying, though the exact amount of activities and expenses they’re allowed to contribute according to IRS law remains unclear. They are nonetheless prohibited from “intervening in a political campaign directly or indirectly”, such as endorsing a presidential candidate, Hackney said.

“That same prohibition does not apply to a (c)4. A number of charitable organizations will set up a charity, then have a sister social welfare organization that conducts lobbying,” Hackney said, calling it a “troublesome space”.

The charity will not be able to intervene with a political campaign, while the sister organization will. The organizations need to ensure the money coming in through the charity does not get mixed in with the 501(c)4 sister organization.

Social welfare organizations do not receive the same type of far-reaching tax benefits as charities. For example, they do not need to pay taxes on their goods and services if they further the organization’s purpose. If that standard isn’t met, a business tax applies. Nevertheless, this type of non-profit structure contains a tremendous boon for wealthy donors: tax exemption on gifted securities.

Barre Seid, a Chicago billionaire, donated $1.65bn in securities to the Marble Freedom Trust, a rightwing 501(c)4 run by Federalist Society leader Leonard Leo. Marble Freedom and Seid did not need to pay taxes on the stock transfer, which represented 100% of Seid’s ownership of the electrical goods manufacturing company Tripp Lite. If the securities had appreciated during the time frame Marble Freedom Trust owned the stock, it wouldn’t have been required to pay taxes on those gains. However, the conservative fund ultimately sold the stock; the power management company Eaton Corporation acquired it in March 2021.

Within a month, Marble Freedom Trust used the proceeds from the sale to funnel tens of millions of dollars into other conservative groups advocating for rightwing judges and greater privacy protections for libertarian and conservative donors, CNN reported.

Currently, charitable organizations and social welfare organizations do not need to disclose their donors. IRS rules about non-profit donor disclosures changed during the Trump administration, opening the tap for dark money to flood election politics without the public knowing about it. Hackney argued that disclosure is “a reasonable thing” that is “part of the democratic fabric”, but social welfare organizations are able to operate in a way that resists it, particularly when they are doing issue advocacy.

IRS investigations into a 501(c)4 like Moms for Liberty would be “heavily fact intensive”, Hackney said, with an agent reviewing materials and going back and forth with attorneys for 18 months. The IRS has a statute of limitations to complete an investigation within three years, he said. If the group’s status is revoked after that time, it probably would not owe back taxes but would reorganize as a taxable, private organization with even less transparency and no prohibitions on political campaigning.

 

The Return of MDMA

Some doctors are itching to prescribe ecstacy again. How do we avoid the regulatory mistakes of the '80s?

NIKO VOROBYOV | 7.29.2023  REASON

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(Photo 177051537 © Olha Karpovych | Dreamstime.com)

I Feel Love MDMA and the Quest for Connection in a Fractured World, by Rachel Nuwer, Bloomsbury, 384 page, $28.99

In 2006 a Florida man named Zulfi Riza reached out to Rick Doblin, the founder of the Multidisciplinary Association for Psychedelic Studies (MAPS). Riza was suicidal. He was suffering from PTSD, anxiety, depression, and anger issues. He had tried countless remedies, and he felt that Doblin was his last hope. Riza had heard that an underground network of psychiatrists practiced therapy using the illegal drug MDMA, better known as ecstasy or molly. And Doblin knew of such a therapist.

But Riza also suffered seizures. Should a medical emergency take place during a session, the therapist would be exposed and could lose their license, or worse.

Doblin told him he couldn't help. Riza killed himself the very same morning.

The Drug Enforcement Administration (DEA) had unilaterally outlawed MDMA in 1985 under emergency powers granted to it by Congress. To back up the ban, the agency cited flimsy evidence about MDA, another drug entirely. It was a catastrophic case of government overreach. Zulfi Riza was just one of many people whose lives may have been saved had they not been forced to seek help in secret.

The DEA isn't the only villain in this story. In 2002, a senator from Delaware named Joe Biden proposed the Reducing Americans' Vulnerability to Ecstasy (RAVE) Act. This eventually passed, in somewhat watered-down form, as the Illicit Drug Anti-Proliferation Act. It basically made party organizers liable for drugs consumed on the premises. This made it much more complicated to organize services such as testing partygoers' drugs for dangerous ingredients, as it would implicitly admit there was drug-taking on-site.

At a time when Americans are dying in record numbers from accidentally ingesting substances such as fentanyl, a de facto ban on drug checking in places where Americans take drugs—clubs, festivals—seems especially criminal.

Now that the war on weed is all but lost—federal legalization of marijuana feels like a matter of when, not if—the next battlefront will be over MDMA and other psychedelics. This year Australia allowed licensed therapists to give patients the drug. (It did the same as well for magic mushrooms.) Meanwhile, the Biden administration expects MDMA and psilocybin to be approved therapeutically within the next few years.

Rachel Nuwer's book I Feel Love arrives just in time for the debate. It exhaustively chronicles MDMA's journey from a therapeutic tool to an underground party pill and back to therapy. Although many drug books dwell on the criminal element—killer kingpins, sophisticated smugglers—Nuwer, a respected science journalist, mostly prefers to explore the positive potential of ecstasy and the forces, such as MAPS, seeking to unleash it.

As illicit narcotics go, ecstasy is relatively benign. It does not, as an infamous episode of Oprah suggested, turn your brain into Swiss cheese. Instead, it floods you with an overwhelming sense of love, joy, and empathy—the kind of feeling you get, as Nuwer puts it, "if you were suddenly reunited with a good friend that you hadn't seen in years, and you stayed up all night talking because you were so happy to see each other."

It's precisely these properties that make MDMA such a useful tool for addressing trauma, anxiety, and other mental health issues. Since it's virtually impossible to feel bad while on it, patients can dive deep into traumatic events without being overcome with emotions, and open up to their therapists about things they'd normally keep bottled up.

But as any seasoned tripper will tell you, it's not just the drugs; it's how and where you use them—the set and setting. Someone undergoing MDMA-assisted therapy will get support and guidance from trained professionals. Likewise, someone spending all night pumping his fist in the air at a warehouse party in Brooklyn is unlikely to walk away with any psychological breakthroughs.

Rick Doblin's quest to legalize ecstasy features prominently in the book. Doblin has been fascinated with psychedelics ever since his time studying at New College in Florida, in those days an open-minded institution where students took acid and hung around a clothes-free swimming pool. When the DEA announced its intent to outlaw ecstasy in 1984, Doblin led the counterattack, rallying lawyers, shrinks, and scientists. When that failed and the ban was soon to go into effect, Doblin sold ecstasy pills that had been donated by one of the drug's first kingpins, Michael Clegg, to fund experiments on rats and dogs. Doblin then enrolled at Harvard and interned at the White House to become an insider in government policy.

MAPS has been behind several promising studies showing MDMA's potential in treating combat veterans, sexual assault survivors, and others. Less happily, Doblin and MAPS have been criticised recently for how they handled a sexual abuse case during one of their clinical trials. While creepy therapists are hardly unique to psychedelics, tossing mind-altering chemicals into the mix leaves patients particularly vulnerable. Doblin also has a reputation as a psychedelic evangelist who sometimes gets ahead of himself, which has hurt the cause at times. To her credit, Nuwer doesn't shy away from Doblin's flaws, which will likely get more attention as the debate around psychedelics heats up.

Although Nuwer does an excellent job of breaking down the scientific studies of ecstasy and how exactly it works on the brain, there are still gaps in the research. Some experts have questioned whether enough is known about those for whom MDMA-assisted therapy doesn't work. Could it actually make things worse? Certainly, there are accounts of patients feeling suicidal after a session, a point which Nuwer perhaps covers a little too briefly.

Still, most people aren't taking ecstasy in a clinical setting to cope with survivor's guilt after surviving an IED blast in Fallujah. They're doing it to let loose at boisterous jamborees like Coachella and Burning Man. Nuwer feels no shame describing herself rolling on molly at house parties.

As for ecstasy's alleged dangers: Millions of people have taken the drug since the late '80s, but there hasn't been a corresponding epidemic of brain damage. An infamous study that seemed to show that it caused brain damage in monkeys turned out to be bogus after it was discovered the monkeys had been injected not with molly but with meth.

That isn't to say ecstasy is harmless. Nothing is—even caffeine can kill you in heroic doses. But most of the drug's dangers exist precisely because of the DEA's decision to ban it all those years ago. Nuwer tells the story of Martha Fernback, a 15-year-old English schoolgirl who died in 2013 after swallowing half a gram of 91 percent pure MDMA powder. Like almost everyone else who wants to feel the euphoric bliss of molly, she purchased her gear from an underground pusher, not a licensed pharmacist. She had no idea what dose she was taking, or even if it contained MDMA at all.

Imagine if we played the same stupid games with liquor or beer. Actually, you don't have to imagine. Certain parts of the world have banned booze, so the people there aren't sipping fine wine; they're drinking moonshine or bathtub hooch. Many of them then go blind or die. Rather than crusade against the evils of drugs, Martha's mother joined a campaign called Anyone's Child, calling for a reform of British laws and the legalization of ecstasy.

The ancient Greeks had a word, pharmakon, that can mean either "poison" or "medicine." It's too bad we can't always tell which is which.

Studies Keep Finding That Social Media Algorithms Don't Increase Polarization. Why Is the Press So Skeptical?

New research on Facebook before the 2020 election finds scant evidence to suggest algorithms are shifting our political views.

ELIZABETH NOLAN BROWN | 7.29.2023 

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(Photo by Brett Jordan on Unsplash )

New research looking at Facebook in the run-up to the 2020 election finds scant evidence to suggest that social media algorithms are to blame for political polarization, extremism, or belief in misinformation. The findings are part of a project in which Meta opened its internal data to academic researchers. The results of this collaboration will be publicized in 16 papers, the first four of which were just published in the journals Science and Nature.

One of the studies found that switching users from an algorithmic feed to a reverse chronological feed—something suggested by many social media foes as the responsible thing to do—actually led to users seeing more political content and more potential misinformation. The change did lead to seeing less content "classified as uncivil or containing slur words" and more content "from moderate friends." But none of these shifts made a significant difference in terms of users' political knowledge, attitudes, or polarization levels

"Algorithms are extremely influential in terms of…shaping their on-platform experience," researcher Joshua Tucker, co-director of the Center for Social Media and Politics at New York University, told The Washington Post. Despite this, "we find very little impact in changes to people's attitudes about politics and even people's self-reported participation around politics."

Another of the experiments involved limiting re-shared content in some users' feeds. Reshares—a measure of social media virility—"is a key feature of social platforms that could plausibly drive" political polarization and political knowledge, the researchers suggest. Users who saw no reshared content for three months did wind up having less news knowledge, as well as lower engagement with the platform and less exposure to "untrustworthy content." But it did not make a difference in political attitudes or polarization levels.

Nor did increasing users' exposure to ideologically diverse views—as another of the experiments did—wind up significantly shifting "affective polarization, ideological extremity, candidate evaluations and belief in false claims."

Taken together, the studies strike a strong blow against the "zombie bite" theory of algorithmic exposure, in which people are passive vessels easily infected by divisive content, fake news, and whatever else social media platforms throw at them.

They're the latest in a long line of papers and reports casting doubt on the now-conventional wisdom that social media platforms—and particularly their algorithms—are at fault for a range of modern political and cultural problems, from political polarization to extremism to misinformation and much more. (Reason highlighted a lot of this research in its January 2023 cover story, "In Defense of Algorithms.")

Yet despite a substantial body of research challenging such assumptions, a lot of the press remains credulous about claims of tech company culpability and villainy while reporting very skeptically on any evidence to the contrary. And this media bias is on full display in the coverage of the new Facebook and Instagram studies.

The Post's piece on them contains this in-article ad after the first paragraph: "Tech is not your friend. We are. Sign up for The Tech Friend newsletter."

It's an almost perfect distillation of the larger dynamic at play here, in which traditional media—having lost ample eyeballs and advertising dollars to social media—seems intent to cast tech platforms as untrustworthy, unscrupulous, and dangerous for democracy, in contrast to the honest, virtuous, and democracy-protecting members of the mainstream press.

The Post piece goes on to quote three people uninvolved with the Facebook studies who have qualms about it, including "Facebook whistleblower" Frances Haugen. "She argued that by the time the researchers evaluated the chronological approach during the fall of 2020, thousands of users already had joined mega groups that would have flooded their feeds with potentially problematic content," the Post reports.

This is, of course, a very different complaint than the one typically heard from Haugen and her ilk—that Facebook's algorithms deliberately push divisive and extreme content. Here Haugen shifts the goal posts, complaining about groups that people self-select into and the fact that Facebook showed them content from these groups at all.

And the Post also moves the goal posts, describing the study as being "conducted in a world in which, in many ways, the cat was already out of the bag. A three-month switch in how information is served on a social network occurred in the context of a long-standing change in how people share and find information." Tucker tells the Post: "This finding cannot tell us what the world would have been like if we hadn't had social media around for the last 10 to 15 years."

Of course, the big fear for years has been about bursts of election-time information—pushed by hostile foreign actors, U.S. political groups, etc.—and their potential ability to tilt political outcomes thanks to algorithmic amplification. These new studies squarely strike at such fears, while any "long-standing change" in information finding is, in this context, utterly irrelevant, as is some hypothetical world in which social media never existed. The only purpose statements like these seem designed to serve is to minimize the findings in question.

The coverage in Science—which published three of the new papers—is even weirder. The journal has packaged the studies in a special issue with the cover line "Wired to Split" and an introduction titled "Democracy Intercepted."

The cover features two groups of people—one dressed in red, one dressed in blue—sitting on opposite sides of the Meta logo, facing in opposite directions. Each member of each group is intently looking at a laptop or tablet or smartphone, with several members appearing outraged. The design seems to illustrate the exact opposite of what was actually found in the studies, as do the slogans and introductory text associated with the new studies.

"Can a business model that prioritizes 'engagement algorithms' pose a threat to democracy?" asks Science in the introduction. It goes on to state that "tech companies have a public responsibility to understand how design features of platforms may affect users and, ultimately, democracy. The time is now to motivate substantive changes and reforms." It teases the research in question—without once mentioning that the findings go against more hysterical interpretations. It's as if the whole package was designed with a preferred narrative in mind but no regard for the actual research at hand.

Because what the actual research found—as Talia Stroud, a lead researcher on the project and director of the Center for Media Engagement at the University of Texas at Austin puts it—is that experimenting with popular ideas to tweak algorithms in a supposedly socially responsible way simply "did not sway political attitudes."

Stroud is quoted in Nature, which does a better overall job of framing the research in a realistic way ("Tweaking Facebook feeds is no easy fix for polarization, studies find" is the headline of an article about it). But even Nature can't resist quotes that minimize the findings. "The science is nice, but the generalizability seems limited," Northwestern University political scientist James Druckman is quoted in Nature as saying. "This is just another data point in that discussion."

ELIZABETH NOLAN BROWN is a senior editor at Reason.