Senior Citizens Organization

By RICARDO ALONSO-ZALDIVAR, Associated Press Writer Ricardo Alonso-zaldivar, Associated Press Writer 1 min ago

WASHINGTON – More than 3 million seniors may have to switch their Medicare prescription plan next year, even if they’re perfectly happy with it, thanks to an attempt by the government to simplify their lives.

The policy change could turn into a hassle for seniors who hadn’t intended to switch plans during Medicare’s open enrollment season this fall.

And it risks undercutting President Barack Obama’s promise that people who like their health care plans can keep them.

A new analysis by a leading private research firm estimates that more than 3 million beneficiaries will see their current drug plan eliminated as Medicare tries to winnow down duplicative and confusing coverage, in order to offer consumers more meaningful choices. Instead of 40 or more plans in each state, beneficiaries would pick from 30 or so.

“As a result of this policy, there are going to be fewer plans offered in 2011,” said Bonnie Washington, a senior analyst with Avalere Health, which produced the study. “There is still going to be robust choice for beneficiaries, but those who have to change plans could experience some disruption and inconvenience.”

While seniors would not lose Medicare coverage, they could see changes in their premiums and copayments.

Medicare officials dismissed the Avalere estimate without offering their own number. “Anybody who is producing that kind of analysis is simply guessing,” said Jonathan Blum, deputy administrator for Medicare.

Avalere’s Washington said the analysis used Medicare’s specifications.

For example, Medicare has already notified insurers they will no longer be able to offer more than one “basic” drug plan in any given location. Several major prescription plans, including CVS-Caremark and AARP, offered two basic options throughout the country this year, Washington said. Eliminating that particular kind of duplication would force 2.75 million beneficiaries to find new coverage, according to Avalere’s estimate.

When other changes are taken into account, as many as 3.7 million Medicare recipients may have to switch, the analysis concluded. That’s about 20 percent of the 17.5 million enrolled in stand-alone drug plans.

Founded by a former Clinton administration budget official, Avalere serves industry and government clients with in-depth research on Medicare and Medicaid.

Former Medicare chief Leslie Norwalk said the change might make things easier for people signing up for a drug plan the first time, but harder for those already in the program.

“If you’re in a plan that you like and you have to change it, it will be disruptive,” said Norwalk, acting administrator under President George W. Bush. “It depends on how (Medicare) handles it to try to make it as seamless as possible.”

Insurance industry representatives declined to comment, saying privately that the companies do not want to antagonize Medicare.

Reducing the number of drug plans has long been a goal for consumer advocates. This year, nearly 1,600 plans offered a dizzying range of options, many of which were not significantly different.

But Medicare is going ahead with the consolidation in a hard-fought election year. Republicans have barraged seniors with charges that Obama and the Democrats raided the program to expand coverage for younger generations under the health care overhaul. Obama’s promise that people can keep health plans they like was made in the context of that broader debate, but the president has repeatedly assured seniors their Medicare benefits are safe.

“Some opponents of the (health care) law may say that this is taking away choices, but we have heard from our members for years that the (drug coverage) options can be confusing,” said Nora Super, AARP’s top health care lobbyist. The seniors lobby supports the change. AARP’s public policy branch is separate from its business side, which sponsors Medicare and other insurance plans.

Medicare official Blum said the agency is working with insurers to keep disruptions to a minimum. For example, seniors could be automatically reassigned to a comparable plan offered by their insurance company. Premiums may not necessarily be any higher, Medicare officials said.

“We are not reducing the number of quality plans,” said Blum, adding that having fewer, more distinct choices will benefit seniors.

Besides eliminating duplicative basic coverage, insurers that offer more than one enhanced coverage plan will have to show the second plan clearly offers better value. Medicare is expected to release its list of drug plans for 2011 late next month.

Separately, an AARP report issued Wednesday found that retail prices for brand name drugs widely used by seniors rose by 8.3 percent last year, far outpacing general inflation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, otherwise known as Financial Regulatory Reform, will soon be signed into law by President Obama. The bill is 2,319 pages long — there’s no single article that can fully explain every way in which this sweeping legislation will ultimately impact your life, but it’s important to understand at least the basics.

Let’s take a look at exactly how this reform bill will impact your life in the coming months and years.

Mortgage Lending

The changes made to mortgages will help assure that consumers are less likely to get nailed with high fees and bad loan terms.

• The days of the “liar loan” are now officially over. Lenders will now be required to fully document a borrower’s income before agreeing to provide a mortgage loan. They will also be required to determine that the borrower can otherwise repay the loan.

• The bill also prohibits lenders from offering incentives (called yield spread premiums) to mortgage brokers in exchange for originating loans with terms unfavorable to borrowers, such as higher interest rates.

• Prepayment penalties for most mortgage loans will no longer be allowed.

The downside of these consumer protections? By making mortgages less profitable for lenders, they could become tougher to get for borrowers. For example, we’re already seeing stricter lending standards with higher required down payments.

Free Credit Scores

Consumers can already get a free look at their credit histories once every year from the big three credit bureaus — Experian, TransUnion and Equifax (NYSE: EFX – News) — by going to TripleBureauCreditReport.com. In its earlier form, the new law had extended that ability to credit scores as well, offering one free look at our credit scores annually.

In the final version, however, the bill only allows consumers who are denied a loan or suffer some other sort of “adverse action” to get a free look at their credit score.

In addition to being turned down for a loan, other “adverse actions” that could result in a free look at your credit score include an increase in your cost of insurance, being charged more for, or being denied, a car lease, or if the interest rate you’re offered on a credit card or loan is higher than one being offered for those with excellent credit.

Debit Card Interchange Fees

While final changes are still months away, the new bill will very likely save merchants money. Whether it will save any for you, on the other hand, is less certain.

• Interchange fees, also known as “swipe fees,” are charges merchants have to pay Visa and Mastercard for processing debit and credit card transactions. The fee for debit cards currently averages 1.6% — credit cards’ swipe fees average more than 2%. Under the new law, the Federal Reserve can cap the fees on debit cards (but not credit cards) limiting them to what they decide is “reasonable and proportional to the actual cost incurred.”

• It will take months for the Federal Reserve to decide what’s reasonable, but in Europe, Visa and MasterCard interchange fees are as low as 0.2% — in Australia they’re capped at 0.5%. Odds are that caps here will be higher than those charged on other continents, but lower than they are today. In lobbying for this change, retailers virtually assured Congress that they would pass along their savings to consumers. Many consumer advocates, however — including this one — are skeptical.

• Merchants will be allowed to offer a discount to customers who pay with cards that carry lower transaction fees — that’s something that hasn’t been allowed in the past. They’ll also be allowed to set both minimums and maximums for card transactions.

An All-Powerful Consumer Watchdog

One of the primary changes brought about the new law is the establishment of a Consumer Financial Protection Bureau within the Federal Reserve. This new agency will have sweeping powers to regulate virtually every kind of lending activity and lender, from the largest banks to the smallest pawn shops.

But there is one large group of lenders that escapes oversight by the new agency: car dealers.

According to Edmunds.com, of the 11 million cars expected to be sold this year, about 70% will be financed or leased through a car dealership. But despite opposition from both consumer advocates and the White House, Senate republicans successfully excluded car dealers from regulatory overview by the newly formed Consumer Financial Protection Agency.

The argument from car dealers and their lobbyists? They’re already regulated by plenty of state and federal consumer protection rules that are designed to prevent practices such as “bait and switch” lending and loans packed with undisclosed extras such as extended warranties.

In addition, dealers argued, if another layer of regulations are imposed on them, lending and leasing may become so unprofitable that many dealers would simply stop offering it, ultimately hurting consumers.

Bank Bailouts

While the bill didn’t go as far as many wanted — for example, it doesn’t give the government carte blanche to preemptively break up banks it considers “too big to fail” — it did establish some new rules that could head problems off before they become systemic. It also should reduce the amount of money taxpayers would be required to shell out should good banks go bad.

• In the case of a failing financial institution, the Federal Deposit Insurance Corp. (FDIC) will borrow from the Treasury to pay for the cost of liquidation, then get its money back by selling off the institution’s assets. If asset sales aren’t enough to repay the Treasury, the FDIC could charge a fee to other banks.

• Payments to creditors of a failing institution designed to prevent a crisis from spreading will be limited to payments a creditor would receive in bankruptcy. In other words, money owed by failing financial firms to other companies might not be entirely repaid. This would prevent a repeat of the $160 billion taxpayer bailout of AIG.

• If a bank fails, the FDIC will have the ability to take back compensation paid to its current or former senior executives for the two years preceding its failure. In addition, the government can ban senior executives found responsible for a bank’s failure from future work in the financial services industry.

Additional Protection for Investors and Consumers

• Financial literacy: The legislation requires the SEC to conduct a financial literacy study. It also creates an Office of Financial Literacy that will be tasked to develop programs to teach Americans about savings, loans, liens and fees. The agency would establish standards for financial advice programs and help keep Americans, particularly seniors, from becoming victims of scams.

• Investor Advocate: The legislation creates an Investor Advocate within the SEC that will represent the interests of retail investors.

• Greater disclosure to retail investors: The legislation requires that adequate disclosures be made to retail investors before they are allowed to invest in financial products.

• More protection for underserved investors: Another goal is to allow the un-banked and under-banked greater access to mainstream financial institutions.

Taxpayer-owned mortgage giant Fannie Mae is targeting families by going after struggling homeowners who strategically default on their mortgage, the firm announced Wednesday.

A default is considered strategic when homeowners have the capacity to pay, yet choose to walk away from their mortgage. The trigger, researchers say, is negative equity: When the value of a home is less than what the lender is owed on it, borrowers are more likely to strategically default.

About 11.3 million homeowners with a mortgage, or 24 percent, owe more on their mortgage than the home is worth, according to real estate research firm CoreLogic. Another 2.3 million have less than 5 percent equity in their homes. All told, about 29 percent of all homeowners with a mortgage are either underwater or very close to it. The firm estimates that the typical underwater homeowner won’t return to positive equity until late 2015 or early 2016.

And Fannie Mae, an arm of the federal government and a big part of the Obama administration’s housing policy, wants to make sure that if struggling families walk away, they suffer for it.

Homeowners who strategically default or did not work “in good faith” to avert foreclosure through other means will be ineligible for new Fannie Mae-backed mortgages for seven years. The firm said it will also pursue homeowners in court, seeking so-called “deficiency judgments” to recoup outstanding debt by seizing borrowers’ other assets. Thirty-nine states do not limit the ability of lenders to recover what they’re owed.

Fannie Mae said that next month the firm “will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.”

“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting,” Terence Edwards, Fannie’s executive vice president for credit portfolio management, said in a statement.

Strategic defaults among homeowners have been on the rise. More than a million homeowners went that route last year, nearly double the amount in 2008 and more than four times the level in 2007, according to a recent analysis by the credit reporting company Experian and Oliver Wyman, a management consulting firm. A study by a team of academics from the University of Chicago and Northwestern University estimated that nearly a third of home mortgage defaults in March were strategic. The deeper underwater homeowners are, the more likely they are to walk away from their mortgage, the researchers noted.

Earlier this month, the House of Representatives passed a bill barring strategic defaulters from obtaining home mortgages backed by the Federal Housing Administration. The agency guarantees nearly one in four new mortgages.

“I can’t help but notice that every group now frantically calling for tough penalties for homeowners who walk away was virulently opposed to judicial modification of mortgages in bankruptcy,” Rep. Brad Miller, a North Carolina Democrat, told the Huffington Post.

Bank of America and Citigroup, the nation’s largest and third-largest banks by assets, respectively, support changing existing law to give federal judges the power to modify mortgages in bankruptcy, otherwise known as “cramdown.” Proponents argue that if homeowners were able to modify their mortgages in bankruptcy, the number of strategic defaults would substantially decrease, if not nosedive.

About 3 million homes will receive foreclosure notices this year, real estate research firm RealtyTrac estimates. More than 1 million will be repossessed by lenders, adding to the nearly 2.2 million homes that lenders took over from 2007 to 2009.

Fannie Mae and its sister firm Freddie Mac guarantee nearly three out of every four new mortgages, according to leading industry publication Inside Mortgage Finance. The two firms control about $5.5 trillion in home mortgages, according to their federal regulator. That’s nearly half of all outstanding mortgage debt in the U.S. Their share of the mortgage market is nearly double what it was 20 years ago.

Because Fannie controls such a large portion of new mortgage issuance, the freezing out of homeowners for seven years could prove devastating.

Brent T. White, a law professor at the University of Arizona, recently wrote in an academic paper that most homeowners can recover from a foreclosure within two years. In fact, defaulting on a mortgage is not as bad as most people think, White notes.

“Lenders are unlikely to pursue a deficiency judgment even in recourse states because it is economically inefficient to do so; there is no tax liability on ‘forgiven portions’ of home mortgages under current federal tax law in effect until 2012; defaulting on one’s mortgage does not mean that one’s other credit lines will be revoked; and most people can expect to recover from the negative impact of foreclosure on their credit score within two years (and, meanwhile, two years of poor credit need not seriously impact one’s life),” he writes.

There is a “huge financial upside” for seriously underwater homeowners to strategically default on their mortgages, White said.

While it’s still taboo among most homeowners, it’s common behavior among corporations.

In December, Morgan Stanley, the nation’s sixth-biggest bank by assets, walked away from five San Francisco office buildings the $820-billion firm purchased as part of a landmark $2.43-billion deal near the height of the real estate boom. A group led by Tishman Speyer Properties gave up a 56-building apartment complex in Manhattan in January after defaulting on some $4.4 billion in debt. A spokesman for the California Public Employees’ Retirement System, the nation’s biggest municipal pension fund and one of several investors in the venture, told the Huffington Post that they “basically walked away from it.”

Fannie was effectively nationalized in September 2008. Taxpayers own 79.9 percent of Fannie and Freddie. The Obama administration announced on Christmas Eve that it would provide unlimited financial assistance to the firms, disregarding what was a $400 billion cap on taxpayer bailouts. Their debt is backed by the U.S. government.

The two firms, facing growing losses on sour mortgages in perhaps a worsening housing market, have already taken $145 billion from taxpayers. Fannie Mae is responsible for $83.6 billion of that bailout.

Freddie Mac did not say it would take a similar position on strategic defaulters.

“Such so-called strategic defaults, once rare, are now common enough to jeopardize the already-weak housing and mortgage markets,” wrote economists Celia Chen and Cristian deRitis of Moody’s Economy.com in an April 13 note. “If the trend continues, strategic defaults could both accelerate the pace of home foreclosures and also make it harder for new borrowers to obtain mortgages. Both factors would in turn worsen the decline in house prices.”

JPMorgan Chase, the nation’s second-largest bank by assets with more than $2.1 trillion, warned investors last month that underwater homeowners may not continue to make their payments even when they’re able to, according to a May 10 filing with the Securities and Exchange Commission.

A top executive at Freddie Mac posted a note on the firm’s website pleading with homeowners to not intentionally walk away from their homes.

“Knowing the costs and factoring in the time horizon, some borrowers have made the calculation that it is better to purposely default on the mortgage. While I understand how that might well be a good decision for certain borrowers, that doesn’t make it good social policy,” Freddie Executive Vice President Don Bisenius argued in a May 3 note.

The firm warned investors and analysts about the risk of increased strategic defaults in March 2008. Referring to it as “ruthlessness,” Dick Syron, Freddie’s former chairman and CEO, said the firm was “seeing an increase in ruthlessness” that had “the potential for changing consumer behavior.”

Fannie Mae said Wednesday that borrowers who have “extenuating circumstances may be eligible for new loan in a shorter timeframe” than the seven-year period it’s warning about.

Republicans in the House recently tried to rein in the twin mortgage giants. Rep. Darrell Issa, the top Republican on the House Committee on Oversight and Government Reform, attempted Wednesday to amend the financial reform bill under consideration by the House and Senate to mandate that the federal government appoint an inspector general to oversee Fannie and Freddie. The mortgage behemoths’ federal regulator has been operating without an independent watchdog looking over it and Fannie and Freddie since 2008.

Republicans have also tried to amend the bill to subject Fannie and Freddie to the Freedom of Information Act so members of the public can keep tabs on the firms by compelling the disclosure of documents and records.

Both efforts were thwarted by House Financial Services Committee Chairman Barney Frank (D-Mass.), who ruled that they were not “germane” to the legislation under consideration.

Emails sent after normal business hours to spokesmen for the White House and Treasury Department requesting comment were not returned.

By TOM BREEN, Associated Press Writer Tom Breen, Associated Press Writer – 1 hr 31 mins ago

NEW ORLEANS – BP’s costs for the disastrous Gulf of Mexico oil spill climbed nearly half a billion dollars in the past week, raising the oil giant’s tab to just over $3 billion for work on cleaning and capping the gusher and payouts to individuals, businesses and governments.

London-based BP PLC, the largest oil and gas producer in the Gulf, released its latest tally of response costs Monday. The total of $3.12 billion was up from $2.65 billion a week earlier. The figure does not include a $20 billion fund for Gulf damages BP created last month.

As BP continued drilling relief wells that are the best hope for plugging the blown-out well, a giant new oil skimming vessel was tested in the Gulf. But lousy weather means it may be longer than first hoped before officials know if it can work full-time sucking crude from the sea.

The Taiwanese skimmer dubbed “A Whale” has been able to show off its maneuverability during a weekend test in a 25-mile-square patch of water just north of the site where an April 20 explosion on the Deepwater Horizon killed 11 workers and started the worst oil spill in Gulf history.

TMT, the shipping firm that owns the vessel, had hoped to test a containment boom system designed to direct greater volumes of oily water into the 12 vents or “jaws” that the ship uses to suck it in, according to spokesman Bob Grantham.

But lingering bad weather in the form of stiff winds and choppy seas has made that impossible, and prevented a flotilla of smaller skimmers from working offshore along the coasts of Alabama, Mississippi and Florida.

“As was the case yesterday, the sea state, with waves at times in excess of 10 feet, is not permitting optimal testing conditions,” Grantham said in an e-mail Sunday.

The skimmers, which have been idle off the coasts since a spell of bad weather last week kicked up by Hurricane Alex, were on the water along the Louisiana coast over the weekend. Officials with the U.S. Coast Guard are waiting for the weather to improve before sending them out elsewhere.

“We’ve got our guys out there and they’re docked and ready, but safety is a huge concern for us, especially with the smaller vessels,” said Courtnee Ferguson, a spokeswoman for the Joint Information Command in Mobile, Ala.

On Sunday, huge barges used to collect oil from skimming vessels were parked at the mouth of Mobile Bay, waiting for conditions to subside as waves rose to about 5 feet high miles offshore.

The current spate of bad weather is likely to last well into next week, according to the National Weather Service.

“This should remain fairly persistent through the next few days, and maybe get a little worse,” meteorologist Mike Efferson said.

On the shore, beach cleanup crews were making progress on new oil that washed up thanks to the high tides generated by last week’s bad weather.

In Grand Isle, about 800 people were removing tar balls and liquid oil from seven miles of beach, Coast Guard Cmdr. Randal Ogrydziak said.

“In a day or two, you wouldn’t be able to tell the oil was even there,” he said.

By Wednesday, Ogrydziak said they should have a machine on the beach that washes sand where the oil washed ashore.

Crews have also been working to put containment boom thrown around by the storms back into place, he said.

So far, weather has not slowed drilling on two relief wells meant to finally plug the spill. BP officials have said they’re running slightly ahead of schedule on the drilling, but expect weather or other delays.

Early to mid-August is still the timeframe for the completion of the drilling.

Along with the drilling, the capture and burning of oil and gas at the site of the leaking well has gone on without interruption from the weather. But the choppy seas have delayed the operation of another vessel that officials say will roughly double the amount of oil being collected or burned.

The Helix Producer is supposed to connect with the leaking well by a flexible hose that will help it disconnect and reconnect quickly if a hurricane or other major storm forces an evacuation of the site.

Coast Guard officials say they’re hoping to have the Helix Producer connected to the well and collecting oil by Wednesday.

Because of incentives created by the United States Government, Pharmaceutical Companies have created charitable programs called Patient Assistance Programs. These programs aid low income, uninsured Americans by providing them free prescription drugs with no strings attached. Currently, there are over 270 Patient Assistance Programs offering help with prescriptions to those in need.

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FANNIE MAE BRINGING DOWN THE HAMMER ON STRATEGIC DEFAULTS

STOP STRATEGIC DEFAULTS Fannie Mae announced today that they will make people who can make their payments and who do a strategic default will make them wait seven years before they are eligible for a Fannie Mae loan. It is estimated that there are 11 million homes acros America who are under water. That means the home owner owes more on the mortgage than the current market value of the home. We are facing the worst real estate bubble in the history of this county. There were predictions that we could have up to 21 million households upside down in their house in three years. I believe Fannie Mae is taking an early position to make people think twice before they perform a strategic default.

DEFINITION OF A STRATEGIC DEFAULT

This is when a home owner is walking away from their mortgage that they could pay but have decided not to because they owe more than their house is were worth at the current time. Home owners are not seeing any hope. So, their ideal suggestion is to give up and start all over.

Furthermore, Fannie Mae stated that they will pursue deficiency judgments in states that allow this by law. Strategic defaults are continuing to rise because people have lost hope in the American Finance Machine. People on Wall Street continue to receive big bonuses at Christmas time and the American home owner is losing their home. Where is the balance? Who is monitoring Wall Street?

Fannie Mae will look at each hardship as it crosses it desk. A person with an acceptable hard ship or an approved short sale will only have to wait two years before obtaining a mortgage backed by Fannie Mae. Another option for home owners is to sign over their house in a “deed in lieu of foreclosure” to avoid a lengthy foreclosure process.

Statistics show that 7 out of 10 people who were foreclosed on their home did not seek a real estate professional for assistance.

June 09, 2010, 12:28 AM EDT

By Kim Chipman and Mary Jane Credeur

June 9 (Bloomberg) — Gary Jarvis, a charter-boat captain from Destin, Florida, says he planned to make at least $60,000 this month taking anglers out in the Gulf of Mexico to catch red snapper. Instead he’s living on $5,000 he got from BP Plc to help cover income lost to the worst oil spill in U.S. history.

“This is crushing,” said Jarvis, 58, who says he has $20,000 a month in bills and normally grosses about $350,000 a year as a charter and commercial fisherman. “I’m already calling creditors and saying, ‘Look, this may go really south.’”

Florida’s fishing industry is reeling as oil spreads through the Gulf and shuts down the waters that typically draw millions of tourists and fishing enthusiasts to the state. Recreational saltwater fishing in the state generates $8 billion in revenue a year and commercial fishing produces an additional $4 billion, according to Robert Zales II, president of the National Association of Charter Boat Operators in Orange Beach, Alabama, on the Florida border.

“We aren’t fishing anymore,” said Zales, 57, who runs a family charter-fishing business in Panama City, Florida, and has been in the industry for 45 years. “Everybody is scared as hell because no one knows what our future is.”

The BP spill hit just as fishermen were beginning to recover from devastating hurricanes, particularly Hurricane Ivan in 2004, and from the U.S. recession.

Bad Timing

“It could not be worse timing,” said Ben Fairey, 58, a charter captain from Pensacola who says his 62-foot boat “Necessity” normally produces about $300,000 in revenue from June to August. “We were hoping 2010 was going to be the bottom and we’d start to crawl our way out. In at least two weeks the only calls I’ve had are cancellations.”

BP as of last week had received about 1,000 “large loss” claims, those exceeding $5,000, from fishermen and others, and about half of those were from Florida, according to Darryl Willis, a BP vice president who is overseeing the company’s claims process throughout the Gulf coast.

While Florida fishing waters remain open for now, U.S.- controlled areas where charter boats go for their deep-sea catches have been shut down.

“It’s inevitable they will close,” Patricia Hubbard, whose family owns a deep-sea charter fishing business in Madeira Beach, near St. Petersburg, said of Florida’s ocean fishing grounds.

She said she noticed a slowing in business immediately after the spill. “We were already living on a wing and a prayer,” she said. “Now BP has clipped our wings and we are just living on prayer.”

No Rig Access

Along with the toxic danger of the gushing crude and potential harm from chemical dispersants BP is spraying to break up the oil, charter-fishing businesses are hurt by not having access to waters around Gulf oil rigs such as the Deepwater Horizon, which exploded on April 20, killing 11 people and triggering the spill. The rig was leased by London-based BP from Switzerland-based Transocean Ltd.

Fishing near big oil rigs such as the Deepwater Horizon, which attract prized fish such as dolphin, yellowfin tuna and blue marlin, normally makes up about 40 percent of the charter- fishing business for large boats, according to Fairey.

“The rigs are like a floating artificial reef,” he said.

Some charter-boat operators are turning to BP for employment. Tony Davis, 56, a fifth-generation Destin, Florida, fisherman who is captain of a 65-foot boat called “The Anastasia,” said he has been helping BP in its cleanup efforts for $200 a day since May 5. He has yet to be paid, he said.

Working for BP

BP is working to process paychecks for fishermen and other workers as quickly as possible, BP spokeswoman Lucia Bustamante said at a June 5 briefing in Escambia County in northwest Florida. Sometimes that process is slowed by incomplete bank account routing information or efforts to verify Social Security numbers and other data, she said.

As part of the agreement with BP, Davis said he’s not allowed to do charter fishing trips. He isn’t worried about missing much business, he said.

Captain Brent “Hollywood” Shaver is trying to get on BP’s list for local cleanup and observation work so he will still have income coming in later this year. In the meantime, he’s been taking fishing groups out on his 24-footer, “Captain Bligh,” while Florida-controlled waters are still open.

“It’s fixing to go away, that much is clear,” Shaver, 59, said of his Orange Beach-based charters. He charges as much as $1,000 a day depending on the group size and the trip’s duration.

“We might be wiped out for two years, or five, or ten,” he said. “This might be the last fishing I ever do in my lifetime.”

–Editors: Joe Winski, Larry Liebert

To contact the reporters on this story: Kim Chipman in Pensacola Beach, Florida at KChipman@bloomberg.net; Mary Jane Credeur in Pensacola Beach, Florida at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at LLiebert@bloomberg.net.

Pasadena, CA: “It’s not just about me,” says Florene, 75. “There are lots of people who are discriminated against by Sodexo. My reason to file a complaint is to add my voice, because if people don’t, this kind of behavior will continue. How can companies in the 21st century act this way?” Florene is not alone in claiming that Sodexo violated California labor laws.

Discrimination against a Senior Black Woman: a California Labor Law ViolationIn 2005 Sodexo settled to the tune of $80 million a discrimination lawsuit filed by thousands of black employees who charged that they were barred from promotions and segregated within the company. The giant provider of food and facilities management services also agreed to follow diversity and inclusion guidelines that would increase opportunities for African Americans to advance within the company. In fact, the Sodexo website states, “Sodexo’s leadership in diversity and inclusion stems from our recognition that being a dynamic company requires people with rich backgrounds and diverse perspectives.” A picture of two happy black people supplements the text.

“I know I was doing a good job and I was working very hard. The way I was treated indicates discrimination… and discrimination must not be tolerated anywhere”
Five years later, on April 27, 2010, community leaders and Sodexo workers testified at a press conference and released a new report scrutinizing Sodexo’s progress.

None of this is news to Florene.

Discriminatory actions started even before Florene’s first day on the job. “My friend, who is the general manager and got me the job, said I would start at $12 per hour. But when I met my supervisor, he said the job only paid $10.50 per hour.

“When I got this job I was so excited, like someone had thrown me a lifeline,” says Florene, who had been out of work for some time. “My supervisor and a few co-workers made unreasonable demands on me, but I figured if they saw my efforts and hard work, they would get through this.” Unfortunately, their racist behavior continued, with the obvious goal of forcing Florene to resign.

“I wouldn’t resign. I knew I was doing a good job and I’m a hard worker, regardless of my age. My age doesn’t bother me but others think if you are over 60 you can’t walk and chew gum at the same time. I look and feel 55 but I don’t have control over the calendar. I can easily work 40-hour weeks; I wasn’t going to mess up this job.

“However, the complaints against me continued at weekly meetings. They wanted me to sign reports—complaints about me—but I wouldn’t. The badgering continued. One person said, ‘Why don’t you just resign and maintain your dignity?’

“‘Whatever it is you want, I will try to do that but I will not resign,’ I told my supervisor. I complained to HR but they ignored me. I finally left, and for three days I was so overwhelmed that I couldn’t leave my house.

“My friends said I should file a complaint, because I was also replaced by a 20-year-old. I believe I was discriminated because of my age and race. I know I was doing a good job and I was working very hard. The way I was treated indicates discrimination, and I know that is a violation of the California labor law. And discrimination must not be tolerated anywhere. I owe it to myself and others to file a claim against Sodexo. Certainly I need money, but this isn’t just about the money. They are horrible people, and I am devastated by this.

“I get social security but we all know that isn’t enough. I need to work because the cost of living is just too high. My job prospects aren’t good and I’m struggling emotionally. And I’m not alone: lots of people are discriminated against within this company.”

Florene is right. Here are two more examples of discrimination, posted on the “Clean Up Sodexo” website:

“We had a director at our unit actually refer to the employees as monkeys,” writes George Spivey, a Sodexo worker at Georgia Tech. “It bothers me to even talk about it. I went to Human Resources to report a complaint. I don’t know if they ever did an investigation.”

“I worked with a chef who would pull down his pants, use the ‘n’ word, and always had this thing about ‘you people’ referring to us being different from him,” said Rubynell Barbee, a Sodexo worker at Morehouse College. “I brought it up with Human Resources but they said since he was part black it was ok. I don’t think that it’s ok.”

BP claims to be meeting in the U.S. to see how to accelerate claim payments to those affected in the U.S. It appears BP has only processed 50% of the claims made by those who have been damaged by the oil spill. The cut off riser and subsequent cap appears to be pumping more oil into the gulf now. Too date, 55,000,000 gallons of oil have been pumped into the gulf destroying marshes, beaches, and killing birds and sea life.

The damage from this disaster will be felt for 5-10 years minimum.