– September 30, 2014

IRS head says no laws broken in loss of emails 

(AP) — Republicans in Congress aren't buying the contention by the head of the Internal Revenue Service that he has seen no evidence anyone committed a crime when the agency lost emails that might shed light on the targeting of tea party and other political groups before the 2010 and 2012 elections.

On Tuesday, a House panel will hear from a White House official who once worked at the IRS.

Jennifer O'Connor worked at the IRS from May to November 2013, helping the agency gather documents related to the congressional investigations, said Rep. Darrell Issa, R-Calif., chairman of the House Oversight Committee. O'Connor has since moved to the White House counsel's office.

Issa subpoenaed O'Connor on Monday night after the White House declined his invitation to have her testify. After getting the subpoena, the White House relented.

Issa said he wants to question O'Connor about former IRS official Lois Lerner's lost emails. The IRS said Lerner's computer crashed in 2011, and emails she had archived on the hard drive were lost.

Lerner headed the division that processes applications for tax-exempt status. The Oversight Committee is investigating the handling of applications from tea party and other political groups. Congressional investigators want Lerner's emails to see if there is evidence that anyone outside the IRS was involved.

"Before her promotion to the White House, Ms. O'Connor led the response to the congressional targeting inquiry and she is uniquely qualified to explain why attorneys did not focus on and flag Lerner's 'lost' emails at the outset," Issa said.

Rep. Elijah Cummings of Maryland, the top Democrat on the Oversight Committee, said, "Republicans have been trying desperately — and unsuccessfully — for more than a year to link this scandal to the White House."

David Ferriero, who heads the National Archives and Records Administration, was also scheduled to testify. The National Archives has asked the IRS to investigate the loss of records, and whether any disposal of data was authorized.

On Monday, IRS Commissioner John Koskinen appeared at a rare evening hearing before Issa's committee to answer questions about the lost emails. The hearing was contentious, with Koskinen brushing aside accusations that the IRS has obstructed the political group targeting investigations.

"I have the ability to say I have seen no evidence of any crime," Koskinen said.

Rep. Michael Turner, R-Ohio, scoffed at Koskinen's assertion.

"I have always believed that what happened in your agency with Lois Lerner is a crime," Turner said. "I believe that there were others involved. I believe the emails that are missing are the ones that would probably give us an ability to establish that. And I believe that somebody undertook a criminal act in its destruction."

Turner, however, acknowledged he has no evidence to back up his belief.

Koskinen said there was no evidence that Lerner intentionally destroyed the emails. To the contrary, he said the IRS went to great lengths trying to retrieve lost documents on Lerner's computer, even sending it to the agency's forensic lab.

In 2011, the IRS had a policy of backing up emails on computer tapes, but the tapes were recycled every six months, Koskinen said. He said Lerner's hard drive was recycled and presumably destroyed.

The IRS was able to generate 24,000 Lerner emails from the 2009 to 2011 period because she had copied in other IRS employees. Overall, the IRS said it is producing a total of 67,000 emails to and from Lerner, covering the period from 2009 to 2013.
The IRS inspector general is investigating the lost emails, Koskinen said.

Lerner, who is now retired from the IRS, has refused to testify at two Oversight Committee hearings, invoking her constitutional right against self-incrimination. In May, the House voted to hold Lerner in contempt of Congress.

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Latest Local News

Written on 09/30/2014, 3:18 pm by Business Journal staff
Pinedale Elementary School is the only Central Valley school to make a list of 337 schools designated as National Blue Ribbon Schools by the U.S....
Written on 09/30/2014, 1:44 pm by The Associated Press
(AP) — U.S. stocks are ending slightly lower, leaving the Standard & Poor's 500 index in the red for September. It was only the third monthly loss for the benchmark index this year. After a day of slight ups and downs, the S&P 500 fell five points, or 0.3 percent, to close at 1,972 on Tuesday. The Dow Jones industrial average lost 28 points, or 0.2 percent, to 17,042. The Nasdaq composite fell 12 points, or 0.3 percent, to 4,493. The S&P 500 fell 1.6 percent in September, but is still up 6.7 percent for the year. EBay rose 8 percent after the company said it would spin off the mobile payment service PayPal. Bond prices fell. The yield on the 10-year Treasury note rose to 2.50 percent.
Written on 09/30/2014, 12:52 pm by 
SADIE GURMAN, Associated Press
(AP) —€” Pot may be legal in Colorado, but you can still be fired for using it. Now, the state's highest court is considering whether workers' off-duty medical marijuana use is protected under an obscure state law. Colorado's Supreme Court on Tuesday heard arguments in a case involving Brandon Coats, a quadriplegic medical marijuana patient who was fired by the Dish Network after failing a drug test in 2010, even though the company did not allege that he was impaired on the job. Coats says his pot smoking is allowed under a little-known state law intended to protect employees from being fired for legal activities off the clock. But the company argues that because pot remains illegal at the federal level, medical marijuana isn't covered by the state law. The case is being watched closely around the country and could have big implications for pot smokers in the first state to legalize recreational sales of the drug. Though the Coats case involves medical marijuana, the court's decision could also affect how companies treat employees who use the drug recreationally. The six justices fired a barrage of questions at attorneys from both sides, but they offered no glimpses into their opinions on the matter. It could be weeks or months before they issue their ruling. Tuesday's arguments highlighted the clash between state laws that are increasingly accepting of marijuana use and employers' drug-free policies that won't tolerate it. "This case need not be an endorsement or an indictment of medical marijuana" but a chance to set standards for employee conduct, Dish attorney Meghan Martinez told the justices. "It's a zero-tolerance policy. It doesn't matter if he was impaired or not." Coats, 35, was paralyzed in a car crash as a teenager and has been a medical marijuana patient since 2009, when he discovered that pot helped calm violent muscle spasms that were making it difficult to work. Coats worked for three years as a telephone operator with Dish before he failed a random drug test in 2010 and was fired. He said he told his supervisors in advance that he probably would fail the test.Coats said he never got high at work. But pot's intoxicating chemical, THC, can stay in the system for weeks. "He smoked marijuana while he was at home and then he crossed the threshold and came to work at Dish with THC in his system," Martinez said. "The use is the effects." Coats' case comes to the justices after a trial court judge and Colorado's appeals court upheld his firing, saying pot can't be considered lawful if it is outlawed at the federal level. Both courts said the state's medical marijuana amendment provided exemptions from criminal prosecution for pot use but did not guarantee the right to use it. Coats' attorney, Michael Evans, told the justices Tuesday that while medical pot is federally illegal, it must be considered legal under state law. "We're getting very confused and mixed messages from everywhere," Evans said. He asked the court to issue a narrow ruling that would apply to people like Coats: those in nonhazardous jobs who are not impaired at work and whose employers don't have federal contracts that could be jeopardized. Michael Francisco, an attorney for the state, said a Coats victory would make Colorado companies liable by being unable to fire those who have broken federal law. A patchwork of laws about marijuana across the country and the conflict between state and federal laws has left the issue unclear. Twenty-three states and Washington, D.C., allow medical marijuana, but courts have ruled against employees who say their pot use is protected. Colorado and Washington state also now allow recreational sales, though court cases so far have involved medical patients. Colorado's constitution specifically says that employers don't have to amend their policies to accommodate employees' marijuana use. But Arizona law, for example, says workers can't be punished for lawfully using medical marijuana unless it would jeopardize an employer's federal contract. State Supreme Courts in California, Montana and Washington state have all ruled against fired patients. A lawsuit filed by a physician assistant in New Mexico who said she was fired for using medical marijuana, which helps with her post-traumatic stress disorder, is still pending. Denver labor and employment attorney Vance Knapp said a Coats win "would turn employment policies into chaos." Other states with lawful-activity laws could see them challenged as a result. Coats, who has been unable to find steady work because of his marijuana use, said after the hearing that he was hopeful he would prevail. At the very least, he said, the court will offer clarity on the issue. "I'm not going to be able to get a job in the near future, so if I can fight the fight and hopefully change that, that's what I am going to do," he said.
Written on 09/30/2014, 12:47 pm by Associated Press
(AP) — California Gov. Jerry Brown's decision to veto a $19 million funding plan dealt a blow to four new Riverside County cities that were counting on the measure to make up for lost revenue.The Press-Enterprise reports ( ) Tuesday that the recently created cities hoped a bill sponsored by state Sen. Richard Roth would restore funding lost after state lawmakers shifted vehicle license fee revenue away from municipalities. The cities of Jurupa Valley, Eastvale, Menifee and Wildomar depended more on license fee revenues than older cities, which have other sources of revenue. Jurupa Valley could run out of money in two years and declared its intention to disincorporate earlier this year. Interim City Manager Gary Thompson said the city should ask about the possibility of an override, though it is unlikely.
Written on 09/30/2014, 12:46 pm by KIMBERLY PIERCEALL, Associated Press
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Written on 09/30/2014, 12:46 pm by Associated Press
(AP) — California officials are urging residents and businesses to conserve water as the state ends one of the driest-ever "water years."The California Department of Water Resources says the state received less than 60 percent of the average precipitation in the 2014 water year that ends Tuesday. The department says the state's major reservoirs collectively held only 57 percent of average water storage on Sept. 1 Department Director Mark Cowin says day-to-day water conservation is essential because the state could face a fourth consecutive dry winter, which is typically California's rainy season. Officials say recent storms haven't dented the state's drought and forecasters can't predict if California will get enough major storms to end the drought. California's water year runs from Oct. 1 to Sept. 30.
Written on 09/30/2014, 12:43 pm by 
JENNIFER C. KERR, Associated Press
(AP) — For years, football fans have bemoaned the rule barring NFL home games that haven't sold out from being televised in the local market. Well, you can't blame the government anymore. The Federal Communications Commission voted Tuesday to end the 1975 rule with a push from its chairman. "We at the FCC shouldn't be complicit in preventing sports fans from watching their favorite teams on TV," said Chairman Tom Wheeler. "It's time to sack the sports blackout rule." The vote won't actually end blackouts, which are written into the NFL's private contracts with broadcast and cable companies. But it means responsibility for blackouts now lies entirely with the NFL and its television partners, not the government. Last year, only two NFL games were blacked out in local markets: The Bengals against the Chargers in San Diego on Dec. 1 and the Dolphins vs. the Bills in Buffalo on Dec. 22. Even so, the NFL launched a lobbying campaign against the blackout repeal. The rule has barred cable-TV stations from televising games in metro areas where those games were being blacked out on local TV. The league warned that without this rule in place, it would move more games to pay cable and away from free over-the-air broadcasts on local television stations. It hired Hall-of-Famer Lynn Swann, who starred for the Pittsburgh Steelers, to conduct a grassroots campaign to "protect football on free TV." The FCC commissioners were unmoved. They noted that the NFL makes plenty of money selling old-fashioned broadcast rights. What's more, the NFL's TV contracts don't expire until 2022, so it couldn't do anything for eight years. In the meantime, Commissioner Roger Goodell and other league executives have extolled the benefits of airing games on free TV. This year, they moved some Thursday night games to CBS from the cable channel NFL Network. The blackout rule is a vestige of a bygone era, when the NFL was hardly today's wildly popular money-making machine. When the rule passed nearly four decades ago, just 40 percent of NFL games sold out, and teams relied on ticket sales for most of their revenue. In the mid-1990s, roughly two-thirds of NFL games typically sold out. A decade ago, the figure approached 90 percent. Now, it's 99 percent. Yet in any case, NFL teams get most of their revenue from television. The blackouts, rare as they are now, have been especially bitter for Bills fans. Perhaps their greatest victory in franchise history — a 41-38 comeback win over the Houston Oilers in a 1993 playoff game — was blacked out on local television because Buffalo's Rich Stadium (now Ralph Wilson Stadium) didn't sell out for the game. In fact, FCC Commissioner Ajit Pai, a Buffalo native, chose to announce his vote against the blackout rule last month at Buffalo's Anchor Bar, which claims to have created that beloved game day snack-food staple, the Buffalo wing. "Our job is to serve the public interest, not the private interests of team owners," Pai said.
Written on 09/30/2014, 12:36 pm by RANDALL CHASE, Associated Press
(AP) — Two members of an international hacking ring that gained access to a U.S. Army computer network while targeting computer giant Microsoft and several video game developers pleaded guilty to conspiracy charges Tuesday in federal court in Delaware. David Pokora, 22, of Mississauga, Ontario, and Sanadodeh Nesheiwat, 28, of Washington, New Jersey, each pleaded guilty to a single count of conspiracy to commit computer fraud and copyright infringement. They face up to five years in prison when sentenced in January. Prosecutors said the two men were part of a small group of gaming enthusiasts that called itself the Xbox Underground. An 18-count superseding indictment that was returned by a grand jury in April and unsealed Tuesday also charges Nathan Leroux, 20, of Bowie, Maryland, and Austin Alcala, 18, of McCordsville, Indiana, with participating in the conspiracy. An Australian national whose name was not released also has been charged, and authorities, who are continuing their investigation, say roughly half-a-dozen other individuals may be involved. According to prosecutors, the defendants stole more than $100 million in intellectual property and other proprietary data related to the Xbox One gaming console and Xbox Live online gaming system and popular video games such as "Call of Duty: Modern Warfare 3" and "Gears of War 3." "These were extremely sophisticated hackers.... Don't be fooled by their ages," Assistant U.S. Attorney Ed McAndrew said after Tuesday's court hearing. At the same time, McAndrew said, their method of compromising the computer systems of the companies was relatively basic: stealing the computer user names and passwords of employees and software development partners. Once inside the companies' computer networks, the conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and prerelease works, and other information, authorities said. They also stole financial and other sensitive information relating to the companies, but not their customers, McAndrew told U.S. District Court Judge Gregory Sleet. Prosecutors said the ring's exploits included manufacturing and selling a counterfeit Xbox One gaming console before the unit's official release and gaining access to an Army computer system for two months in late 2012 through their hacking of Zombie Studios, a Seattle-based video game company that was working with the Army on flight simulation software to train Apache helicopter pilots. "As soon as they were notified, they addressed the particular manner in which they were branched," McAndrew said when asked about the military's response to the hacking. McAndrew said FBI officials in Delaware were alerted to the hacking operation in January 2011 by a confidential informant, and that the gaming companies cooperated in the investigation. Authorities began obtaining arrest warrants last year, and Pokora, who McAndrew said was looked to by other group members as a leader, was taken into custody in March at a border crossing in Lewiston, New York. Pokora's plea is believed to be the first conviction of a foreign-based individual for hacking into U.S. businesses to steal trade secret information, authorities said.
Written on 09/30/2014, 12:22 pm by Business Journal staff
Cricket Wireless is helping to celebrate Hispanic Heritage Month by offering free long distance calls to Mexico and other countries from stores in Fresno, Visalia and Modesto.From Oct. 1-3, the company will let Hispanic families make calls to Mexico, Argentina, Columbia, Dominican Republic, Paraguay, Peru, Spain and Venezuela. Calls are limited to one call per customer per day. The calls can be made from the following Cricket Wireless locations: • 6460 N. Blackstone Ave., Suite 101, Fresno• 2313 S. Mooney Blvd., Visalia• 3430 Tully Road, Suite 46, Modesto Cricket Wireless also offers long distance calling plans starting at $5 a month for unlimited landline calling and texting.
Written on 09/30/2014, 11:03 am by Business Journal staff
Alaska Airlines announced it has added a third daily flight to Seattle from Fresno Yosemite International Airport.The increased service from two flights to three began last month, with direct flights from Fresno to the Seattle-Tacoma International Airport departing most weekdays at 6 a.m., 11:25 a.m. and 4:05 p.m. Return flights are scheduled to arrive in Fresno at 10:25 a.m., 3:35 p.m. and 8:56 p.m., while weekend schedules vary. Alaska Airlines will use 70-seat CRJ-700 regional jets for the flights. "The additional non-stop flight provides more convenient departure and return options with greater connectivity throughout Alaska’s route system from Seattle’s Sea-Tac airport," said FYI's Director of Aviation Kevin Meikle, in a release. "For example, you can be in Seattle for a 9 a.m. meeting and back in Fresno by 3:35 p.m., to wrap up the day’s work." Alaska Airlines also provides two daily non-stop flights to San Diego departing at 7 a.m. and 7:40 a.m. and daily non-stop service to Portland departing at 10:35 a.m. In all, ten carriers provide 42 daily nonstop domestic and international departures from Fresno Yosemite International Airport to 13 destinations, including American Airlines, American Eagle, Delta Connection and United Express.  

Latest State News

Written on 09/30/2014, 12:47 pm by Associated Press
(AP) — California Gov. Jerry Brown's...
Written on 09/30/2014, 12:46 pm by Associated Press
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Written on 09/30/2014, 9:55 am by 
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Latest National News

Written on 09/30/2014, 1:44 pm by The Associated Press
(AP) — U.S. stocks are ending slightly...
Written on 09/30/2014, 12:52 pm by 
SADIE GURMAN, Associated Press
(AP) —€” Pot may be legal in Colorado,...
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Written on 09/30/2014, 12:43 pm by 
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