ProPublica

by Eli Hager

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President Donald Trump was asked at a press conference this month if there were any federal agencies or programs that Elon Musk’s newly formed Department of Government Efficiency wouldn’t be allowed to mess with.

“Social Security will not be touched,” Trump answered, echoing a promise he has been making for years. Despite his eagerness to explode treaties, shutter entire government agencies and abandon decades-old ways of doing things, the president understands that Social Security benefits for seniors are sacrosanct.

Still, the DOGE team landed at the Social Security Administration this week, with Musk drawing attention for his outlandish claims that large numbers of 150-year-old “vampires” are receiving Social Security payments. DOGE has begun installing its own operatives, including an engineer linked to tweets promoting eugenics and executives with a cut-first-fix-later philosophy, in multiple top positions at the Social Security Administration.

Their first wave of actions — initiating the elimination of 41 jobs and the closing of at least 10 local offices, so far — was largely lost in the rush of headlines. Those first steps might seem restrained compared with the mass firings that DOGE has pursued at other federal agencies. But Social Security recipients rely on in-person service in all 50 states, and the shuttering of offices, reported on DOGE’s website to include locations everywhere from rural West Virginia to Las Vegas, could be hugely consequential. The closures potentially reduce access to Social Security for some of the most vulnerable people in this country — including not just retirees but also individuals with severe physical and intellectual disabilities, as well as children whose parents have died and who’ve been left in poverty.

The Social Security Administration, headquartered just outside Baltimore, has more than 1,200 regional and field offices — nearly a fifth of all of the federal government’s offices nationwide. There are 119,000 visitors to these brick-and-mortar facilities every business day. Many of them do not have high levels of computer and internet literacy and need someone to help them through all the legalese of a nearly century-old social program with a wonky user interface. This is also where elderly people can apply for Medicare, which doesn’t have physical outposts of its own. And it’s where hearings are held — due process provided — for beneficiaries who believe that they have been unfairly kicked off of desperately needed assistance.

“It’s where people access government,” said Kathleen Romig, a longtime expert on the program at the Center on Budget and Policy Priorities who recently served at the Social Security Administration in a temporary capacity.

In the event of more Social Security office closures like the ones that the Trump administration has begun pursuing — the president is broadly moving to close a range of offices and has even floated the idea of terminating every single federal lease — it is disproportionately poor people with lower levels of education who will become less likely to apply for and get help, research on past closures has found.

The White House press office did not respond to a request for comment. But in a recent Fox News interview, press secretary Karoline Leavitt criticized “fake news reporters” for “fear-mongering” about Social Security’s future under the Trump administration. She said that Musk is only going after fraud and waste in the program.

The roughly 15 million recipients of Supplemental Security Income and Social Security Disability Insurance benefits — many of whom are severely disabled and destitute, or are orphans — are among the least politically powerful people in the U.S. Many told ProPublica that the distance to their closest Social Security office is already long, and that wait times to get a representative on the phone or a claim or an appeal processed can range from hours to years. Even before Trump was inaugurated, the agency’s staffing levels were at a 50-year low due to a decade of budget caps and cuts authored by congressional Republicans.

Several SSI and SSDI beneficiaries in rural areas told ProPublica that they have been watching with anxiety as Trump and Musk slash through federal agencies, knowing that any further office or staffing cuts to the Social Security Administration could be catastrophic for them.

Bryan Dooley, a 34-year-old with cerebral palsy who lives outside of Winston Salem, North Carolina, uses a wheelchair and struggles with speaking (he communicated with me through a caretaker). He said that his Social Security benefits, which he receives directly because of his disability and because that disability entitles him to a portion of his late mother’s Social Security, were mistakenly cut off several months ago. As he fights to get the assistance turned back on, he has been depleting his savings account trying to pay his mortgage.

“I really want to stay in the house where I lived with my mother,” he said. “Otherwise it’s a 24-hour care facility for me.”

Dooley, who works part time for a nonprofit called Solutions for Independence that helps others with disabilities, said that “we’re all watching” the developments at the Social Security Administration. If his local office were to be closed, he noted, he might have to coordinate with a caretaker or family member to take him 100 miles to Raleigh for administrative hearings on his benefits; scheduling appointments, already extremely difficult, would become almost impossible. “It would be a nightmare for all of us,” he said.

That nightmare is now on its way to becoming a reality in White Plains, New York, the site of one of the agency’s hearing offices on DOGE’s list of closures. According to a letter that New York Sen. Kirsten Gillibrand recently sent to the Social Security Administration, the White Plains office, which serves beneficiaries across seven counties, currently has more than 2,000 cases pending. Starting in May, elderly and disabled people across the region will have to travel up to 135 miles to the next-closest office, which for some of them will be in another state.

“Does the Administration have plans to close additional SSA offices?” Gillibrand asked.

The Social Security Administration declined to respond to a detailed list of questions about DOGE’s recent efforts at the agency, including the 10 office closures and staffing reductions. A spokesperson did provide a brief statement on the White Plains situation, saying that the agency had been informed by the General Services Administration that the White Plains office’s lease would not be renewed and that there are no plans to replace the office. Many hearings will take place online through video and audio, the spokesperson said.

DOGE’s capture of the Social Security Administration began this week when Trump elevated to acting commissioner a low-level official named Leland Dudek.

In a since-deleted LinkedIn post, Dudek acknowledged that he had been surreptitiously feeding information to DOGE before his promotion. “I confess,” he wrote. “I helped DOGE understand SSA. I mailed myself publicly accessible documents and explained them to DOGE… I confess. I bullied agency executives, shared executive contact information, and circumvented the chain of command to connect DOGE with the people who get stuff done.” He added: “Everything I have ever done is in service to our country, our beneficiaries, and our agency.”

After Dudek was put in charge of the agency, he told staff that he hoped to reassure them that “our continuing priority is paying beneficiaries the right amount at the right time, and providing other critical services people rely on from us.” He also rebutted some of Musk’s claims regarding widescale Social Security fraud.

In a separate meeting, he told Trump administration officials and congressional staffers that one of his new ideas is to “outsource” the jobs of Social Security Administration call center employees, The Wall Street Journal reported late this week.

Still, DOGE has proceeded more carefully with firings and layoffs at the Social Security Administration than it has at other agencies. Whereas aviation safety and nuclear security specialists, veterans affairs staff and firefighters, medical researchers and many others have all been forced out of their jobs by DOGE in recent weeks, it wasn’t until this Thursday that a much smaller number of recently hired or recently promoted Social Security staff started receiving emails saying that their jobs were not “mission critical.” According to emails shared with ProPublica, these staff members had eight hours to decide if they wanted to request another job within the agency, likely at lower pay and in another city (such a job would not be guaranteed, and relocation expenses would not be covered).

These emails appear to have gone out largely to Social Security Administration policy staff and lawyers, including those who help administrative law judges write decisions in disability cases — decisions that may now take longer and potentially have more errors in them as a result, one agency official told ProPublica. “Claimants will have adverse effects in terms of delay and also losing benefits that they might otherwise be entitled to,” said the official, who spoke on the condition of anonymity for fear of retaliation. Social Security disability cases already have huge backlogs at the hearing stage, often taking more than a year.

Still, notably, employees “serving the public directly,” like those in field offices, were spared from these layoffs, at least for now.

That said, staff at Social Security’s regional offices around the country were not listed as “mission critical,” reflecting a further misunderstanding on DOGE’s part of what disabled people in particular need from the agency, legal aid attorneys in multiple states told ProPublica. When a low-income SSI or SSDI recipient has a problem that a front-line rep at a field office can’t explain or fix, or is just too overloaded with cases to deal with, it is regional staff who can help resolve the situation. When a person with an intellectual disability doesn’t understand why their benefits are being cut off or why they haven’t received notices in the mail about their case, regional staff can look through the case file and figure out what to do.

Regional staff do not yet appear to have been affected by DOGE’s layoffs, but many are now feeling on edge. One regional team leader, who also spoke anonymously for fear of retaliation, said that “nobody knows how the RIF [Reduction in Force] is going to work” in the coming days, weeks and months. Offices could be closed at the same time that remote staff are ordered to return to an office, creating a situation in which some SSA employees will face multiple-hour commutes each way every day, all but forcing them to leave their jobs and thus stop serving beneficiaries.

“We think that’s the plan, so that they don’t have to explicitly do as many layoffs” at an agency as popular and heretofore untouchable as the Social Security Administration, said Jessica LaPointe, a council president for the American Federation of Government Employees. LaPointe represents Social Security’s field office and teleservice workers.

That’s not to mention the attrition that could result from the low morale that has been spreading across Social Security Administration employees’ Signal threads and blogs this week; the agency is already the most overworked and demoralized of nearly any across the federal government, surveys of federal workers have found.

“And meanwhile the beneficiary ranks just keep exploding,” the regional team leader said. (The number of Social Security recipients has grown by over 13 million since 2010, as Baby Boomers surge into retirement.)

Even maintaining level staffing, several Social Security experts told ProPublica, would, in population-adjusted terms, amount to a major reduction in the program’s ability to provide benefits and services to its clients.

Martin O’Malley, a Democrat who was commissioner of the Social Security Administration from December 2023 to November 2024 and also previously served as governor of Maryland, told ProPublica that he believes this week marked just the start of what might be a long four years for Social Security. “The American people through a lifetime of work earn not only these benefits but the customer service necessary to process these benefits,” he said. “Their money went to that, too.”

Trump and Musk “are going to break the largest, most important social program in America,” O’Malley predicted — even if they have to do so gradually.

In recent years, the Social Security Administration along with the U.S. Digital Service were working to make it simpler for people with disabilities to apply for Social Security benefits. Officials conducted surveys of poor, elderly and disabled SSI applicants about what would make the process less burdensome, and they then began creating a simplified application — with plain-language questions and some pre-populated answers — that would eventually be available to complete on paper, by phone or online.

The goal was to reduce the time that applicants spend applying for benefits as well as the time that agency staff spend processing those applications. Or, in other words: government efficiency.

Yet these efforts have been slowed now that Trump has renamed the U.S. Digital Service the U.S. Department of Government Efficiency Service.

“In conversations with regular people about how Social Security could be more efficient, they usually say that they want more staff on the phone lines and taking appointments, and more office locations, so that they don’t have to wait 60 days after their spouse or parent died, or wait for months after developing a life-changing disability,” said Romig of the Center on Budget and Policy Priorities. “Right now we’re hearing all these generalities about the government being too big, rather than a focus on individual people trying to access services from that government.”

Which of these philosophies the Social Security Administration adheres to for the remainder of Trump’s time in office will depend in part on which is embraced by Frank Bisignano, Trump’s nominee to become the permanent agency commissioner, who will replace Dudek once confirmed by the Senate. Bisignano’s attitude toward Social Security, its staffing, its regional and field offices, and its customer service hasn’t yet fully come into focus. He hasn’t yet been questioned at a confirmation hearing.

What is known about Bisignano is that he’s an experienced finance executive who oversees a $20 billion company. And that during his time as CEO of Fiserv, the payment-processing giant, his company generated savings by closing about a hundred locations and terminating thousands of employees, providing them with the opportunity to apply for other roles.

by Annie Waldman and Duaa Eldeib

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Every day, they tackled complex issues with life-or-death stakes:

A failure to get donor organs to critically ill patients.

Tobacco products designed to appeal to kids.

Maternal and infant death.

They were hired after lawmakers and bureaucrats debated and negotiated and persuaded their colleagues — sometimes over the course of years — to make those problems someone’s job to solve.

Then, this month, they were fired as part of President Donald Trump’s widespread purge of federal workers. Suddenly, the future of their public health missions was in question.

The White House hasn’t released figures on how many have been fired, but news reports have begun to take stock: about 750 workers at the Centers for Disease Control and Prevention, which plays a central role responding to pandemics; more than 1,000 staffers at the National Institutes of Health, which funds and conducts life-saving research; dozens at the Centers for Medicare and Medicaid Services, which manages public health care and insurance programs; and scores of employees at the Food and Drug Administration, which oversees the safety of food, drugs and medical devices.

Department of Health and Human Services Secretary Robert F. Kennedy Jr. has vowed to gut the federal health centers, stating “entire departments” at the FDA should be cut. Neither the administration nor the federal agencies responded to ProPublica’s questions, but a White House spokesperson has previously said they were removing newer employees who were “not mission critical.”

“The implications for the health of the public are grave,” said Susan Polan, an associate executive director at the American Public Health Association, which is suing the Department of Government Efficiency, the group leading the firings, for violating federal transparency laws. “It is unfathomable that anybody thinks these cuts have value and are doing anything other than being performative.”

ProPublica reporters have spoken with dozens of federal workers employed in roles safeguarding the American public from harm. They described losing critical positions they’d spent years training for. Many expressed fear at what would happen to the work they left behind.

ProPublica is recording the casualties of the purge, highlighting the scale of what is being lost as public health programs and seasoned experts are caught in the Trump administration’s blunt-force drive to shrink the federal government.

Protecting Kids From Tobacco

Dustin Brace (Courtesy Dustin Brace)

For more than a decade, Dustin Brace has worked various federal jobs, serving as an emergency 911 dispatcher for the Navy and, as a member of the Coast Guard, responding to major chemical and oil spills. “I loved working to protect the American people,” he said. “I never thought that I would leave the government.”

Last year, when he joined the FDA, his mission was no different. As a social scientist at the agency’s Center for Tobacco Products, he helped regulate e-cigarettes and related items. Some were being designed to look like kid-friendly foods, resembling cans of grape soda, or decorated with cartoons, like unicorns eating pancakes. In recent years, more young children had been landing in emergency rooms, poisoned by liquid nicotine. And once in a while, devices explode — in people’s pockets, or hands, or faces. One man died after shrapnel entered his brain.

Every week, Brace scrutinized new product applications to ensure that they would not appeal to children and that the devices were safe for consumer use. The work required a close and careful review of thousands of pages of documents, combing them for hidden hazards. “The work takes time to be done properly,” he said.

His job, and the center as a whole, were born out of a bipartisan understanding that the tobacco industry needed to be regulated. It wasn’t until 2009, after decades of industry pushback, that the FDA finally gained the broad legal authority to do so.

If you work or have worked at a government agency, we want to hear from you. You can reach our tip line on Signal at 917-512-0201.

The agency has historically struggled to recruit enough scientists and experts, who could receive higher salaries in the private sector. “People don’t come to agencies like the FDA and centers like CTP for the money,” said Mitch Zeller, who was the center’s director from 2013 through 2022. “They come because they believe in the mission.”

Notably, the center’s regulatory activities are funded through tobacco industry fees, and it does not rely on direct federal support. “Not one taxpayer dollar is spent to regulate the tobacco industry,” said Zeller.

Last Saturday, Brace received a termination notice along with other newer employees on his team. Like those sent to other federal workers, his contained boilerplate language citing poor performance, even though Brace had received favorable reviews over the past year, according to his assessment records.

Brace estimated that more than 10% of staff at the center’s science office were terminated in the past week.

“Things are going to slow down,” Brace said. “More mistakes may be made because the workload is so much higher.”

Keeping Mothers and Babies From Dying

Arielle Kane (Courtesy Arielle Kane)

When Arielle Kane last year joined a team working on an innovative federal program to make childbirth safer in the U.S., the mission spoke to her.

She could save lives.

America has the worst mortality rate among high-income countries for pregnant and postpartum women, and those in underserved communities face some of the highest risks. Their babies also are in danger if their moms can’t access prenatal care or be seen quickly for complications because they live in so-called “maternal deserts” where obstetric care isn’t available or is limited.

Kane’s program, housed under CMS, was created to support mothers on Medicaid — increasing access to birth centers, doulas and midwives, cutting down on risky procedures like C-sections and tracking outcomes like low infant birth weight. Better blood-pressure monitoring could prevent life-threatening complications like preeclampsia. Extra attention paid to depression and substance use could head off equally devastating consequences.

It officially launched on Jan. 1, and Kane was excited about the possibilities.

But after Trump’s inauguration, they were instructed to halt data collection on race and ethnicity, which troubled many of them. Racial disparities are pervasive in maternal health. Black women are three times more likely than white women to die from a pregnancy-related cause and more than twice as likely to have a stillbirth. Kane said she also was told not to communicate with state officials or attend an upcoming conference on maternal health.

Then, just a month and a half after the launch, Kane and three of her colleagues were fired. With two others planning to leave at the end of the month, she said, the team will be reduced by nearly half.

“I’m just so angry,” Kane said. “This model that has a lot of potential is just being gutted. What does that mean for all of the potential impacts we could have had?”

Keeping Donor Organs From Getting Lost

Amy Paris (Courtesy Amy Paris)

For more than a decade, Amy Paris worked for federal agencies as a problem solver: retooling overly bureaucratic and cumbersome processes to make them easier for the public to navigate.

Last year, she was hired to help reform the nation’s organ procurement and transplantation network, a public-private partnership that connects organ donors to patients in vital need of a transplant.

The program had recently come under fire. As thousands of patients were dying on waitlists, some donor organs weren’t even being used. Multiple kidneys had to be thrown out because of transport delays — couriers not picking them up in time or airlines misplacing them. One was accidentally left on an airport luggage trolley.

After federal and Senate investigations detailed numerous failures, including an archaic information technology system, the Health Resources and Services Administration announced a modernization initiative in March 2023.

Paris joined the team last October as a deputy digital services lead, working with transplant surgeons, technology experts and data scientists on upgrades. “We were making headway,” she said. “We had alignment from Democrats and Republicans on the Hill, we had funding, and they were hiring more of us.”

As a new employee, she figured she would be one of the first to go in the federal workforce purge. Even so, she was devastated when she received her notice.

About half of her team was laid off, she said, which sets the reform effort back indefinitely. After her firing, a planned trip to investigate the underlying technology of the network system had to be canceled.

“We are hollowing out our government in a way that is going to hurt people and is going to get people killed,” she said. “That is the scariest thing in the world.”

We are still reporting. If you work or have worked at a government agency, we want to hear from you. You can reach our tip line on Signal at 917-512-0201.

by Abrahm Lustgarten

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

One of President Donald Trump’s most damaging strikes at the foundation of U.S. climate policy is buried deep in a sweeping Inauguration Day executive order focused on “Unleashing American Energy.” Half way through the lengthy document is a directive that would obliterate an obscure but critically important calculation the government uses to gauge the real-world costs that climate change is imposing on the U.S. economy.

Getting rid of the measure, called the “social cost of carbon,” would upend energy and environmental regulations meant to address climate change and could have the long-term effect of shifting costs from polluting industries directly onto Americans as the expenses of climate change rise.

The measure essentially establishes a price for each ton of carbon emitted, based on the long-term damages it is expected to cause in the future. It has become the government’s primary tool to weigh the economic costs of climate change — such as disaster cleanup or health impacts from warming — against the burden of regulations.

The executive order disbanded the working group, which included the treasury secretary, energy secretary and director of national economic policy, that set the social cost of carbon and advised how it should be implemented. It revoked that group’s previous decisions. And it directed the Environmental Protection Agency, which calculates the figure and bases regulatory proposals on it, to reconsider using the social cost of carbon altogether with the goal of eradicating “abuse” that stands in the way of affordable energy production.

The order stems directly from language in the Heritage Foundation’s Project 2025 policy playbook and is based on work by the conservative think tank, which has consistently opposed climate policy and worked to defend the businesses of fossil fuel industries.

As climate change takes hold — the earth has already warmed more than half the total amount scientists project will cause catastrophic destabilization — the size and frequency of billion-dollar disasters has exploded, and the bills for climate damages have begun to affect people’s lives. Economists warn that it could be the steep financial price of adapting to this rapid shift, as much as environmental change itself, that will prove the most challenging and destabilizing.

If carried out, the shift away from using the social cost of carbon measure would not only make it exceedingly difficult to enact new rules slowing climate change and its growing costs in the future, but it would send the signal that the Trump administration doesn’t believe that climate change carries economic consequences.

The move shows “that we’re abandoning any idea that climate change is a problem,” said Marshall Burke, a climate economics researcher at Stanford University.

The White House did not respond to a request for comment. An EPA spokesperson said the agency was working “diligently” to implement what Trump has asked for.

The social cost of carbon calculation — during the Biden administration CO2 was priced at about $190 per ton — is based on a scientifically rigorous set of models that take into account everything from projected warming to the expense of cleaning up after disasters. By putting a dollar value on emissions — and on the savings of reducing those emissions — government agencies are able to compare the costs against the benefits of regulations, as is required by law.

The concept of pricing carbon earned Yale economist William Nordhaus a Nobel Prize, and the approach has been upheld in federal court. It is an integral factor in creating, among other things, fuel economy standards, in setting EnergyStar requirements for appliances and for regulating the amount of pollution allowed to flow from utilities’ smokestacks.

The Heritage Foundation and the Project 2025 authors dispute the validity of the carbon price point, despite the broad scientific consensus supporting the methodology, on technical grounds. They argue that the computer modeling behind it is so flawed as to be easily manipulated by policymakers seeking to justify their desired outcomes. They say that the Biden administration cherry-picked how it reported results in order to produce the highest price possible. They also contend that the long-term economic toll of climate change is modest and will likely be outpaced by growth, warranting, in economic terms, a “discount” on the present value of future damages that emissions would cause, effectively nullifying the social cost of carbon.

Having no social cost of carbon measure in essence asserts that there is no detrimental cost that comes with a warming planet, and that ultimately lowers the burden — or increases profits — for drillers like Exxon, Chevron and Shell as well as the auto industry, the plastics industry, the chemical industries and utilities that generate power.

“All forms of energy should be able to compete on a level playing field, and the best one should win,” said Kevin Dayaratna, the Heritage Foundation’s chief statistician and the acting director of its Center for Data Analysis. “Fundamentally, the regulations being pursued come with significant economic costs to society.”

Ultimately, according to a Jan. 24 Heritage Foundation report, the think tank would like to see Congress “prohibit — by statute — the use of the social cost of carbon in policymaking,” so that no future administration has the option to use it again.

Canceling the measurement of economic impacts from climate change, though, doesn’t make those costs — estimated, using researchers’ projections, to be worth nearly $2 trillion for the U.S. economy this decade — go away. Instead, it will likely have the effect of levying them directly onto citizens, who will see their expenses for everything from housing to food rise higher and faster than they otherwise would.

A report published last month by First Street, a commercial research firm that studies climate threats to housing, found that climate-driven disasters have already spurred rate hikes in homeowners insurance. Over the next 30 years, the report projects, they may double or even quadruple in Florida and other parts of the country especially at risk for disasters, making insurance one of the most expensive aspects of owning a home.

Meanwhile many people are paying more for electricity to run air conditioning to cope with extreme heat. The Rhodium Group, a climate and economic research firm, projects that demand for power could increase as much as 9% on average nationwide within the next 15 years, due to warming alone, and that by later this century people will be paying as much as 20% more for their power than they would if the climate were not warming, especially in parts of Texas and the South.

Extreme heat and humidity are also making it more difficult to work, cutting into both household incomes and company profits as temperatures limit both the number of hours people can labor outdoors and the efficiency of the work they do. An economic study published in the journal Science projects a decline in labor supply as rising temperatures impact worker productivity across parts of the southern United States.

All the while, higher temperatures have already cut into the productivity of farming in the U.S., according to a 2021 study in the journal Nature Climate Change, and crop yields are widely forecast to decrease as temperatures get hotter, cutting into farmers’ livelihoods. Local taxes across the country are expected to rise, as municipalities stretch to raise money for infrastructure projects — from water treatment plants to bridges — that the climate crisis is making necessary.

Collectively, these costs are creating a significant, systemic drag on the U.S. economy. In some of the Gulf Coast counties most vulnerable to hurricanes, according to the Science study and research led by Solomon Hsiang, who heads the Global Policy Laboratory at Stanford University, that drag could amount to as much as a 60% reduction in the growth of the gross domestic product, promising a permanent stagnation of the local economy. Nationally, researchers estimate, climate change is already costing the equivalent of about 1.2% of U.S. GDP per degree of recent warming — which equates to roughly $200 billion each year now and is on pace to rise to more than $1 trillion annually within the next several decades.

These costs touch people already worried about inflation and home affordability, and they stem directly from generations of carbon pollution from fossil fuel consumption that has powered industrial advancement and the growth of the United States’ modern economy. There have been countless and immense benefits to this industrialization. But until the social cost of carbon calculation came along, those costs had been difficult to quantify and had been shifted onto society instead of the balance sheets of the oil and coal companies primarily responsible for them.

Utilizing the social cost of carbon, which began in earnest with the Obama administration in 2009 and was maintained — though minimized — by the first Trump administration, effectively did two things: It reflected some of those expenses back onto the industries that cause them by asking them to pay the expense of complying with regulations that would lower future emissions. And it discounted some of the new costs of climate change to consumers by making the products they use more efficient and thus cheaper to operate. The social cost of carbon calculations have made it possible for Americans to drive cars that go farther for each dollar of gasoline pumped into them or to use refrigerators and light bulbs that gulp fewer kilowatt hours of electricity. Regulators can justify the imposition of those rules because they can quantify the trade-offs.

By eliminating the consideration of carbon’s costs, the Trump administration not only stands to eliminate the consumer benefits, but it will also allow carbon emissions to grow unabated, intensifying the very increases in global temperature that are driving the broader economic damages and hardship in the first place.

Climate scientists and economists say it is fair to question whether the $190 per ton carbon price tag arrived at by the Biden administration — compared with $42 under the Obama administration or the $7 that the Trump administration set during its first term — is too high. There are valid reasons to debate some of the assumptions fed into the EPA’s models and the seeming precision that results from them. But they warn that just because there are a range of calculable outcomes does not make the premise false. Uncertainty is a feature, not a bug, in trying to understand the historic and unprecedented change unfolding on the planet.

But it is implausible to argue that there is no cost at all, Burke, the Stanford researcher, said. That is what the Trump administration and Heritage Foundation appear to be after. The foundation has centered its opposition on the wonky economic process of measuring how much climate damages that are realized decades from now should be worth today. They argue that so long as economic growth continues, there is little reason to pay a premium through regulations now — which the social cost of carbon justifies. So, they seek to discount the metric dramatically, perhaps all the way to zero.

This sounds arcane but is decisive. “Calling for a high discount rate is basically saying that we should give virtually no weight to our grandchildren and successive generations,” said Max Sarinsky, the regulatory policy director at the Institute for Policy Integrity, a nonpartisan think tank associated with New York University’s School of Law. “It’s saying we should be willing to spend very little now to make life better in the future.”

The Heritage position — reflected in its Jan. 24 report and emphasized to me in an interview last week — actually goes a leap further, claiming that there is even a chance that there could be an economic benefit to emitting more carbon and that “CO₂ emissions should not be taxed but subsidized.”

The think tank is quick to clarify that it doesn’t necessarily advocate for subsidizing the production of greenhouse gases — that it is merely making a cheeky point about the models’ range of uncertainty. But it goes on to make the argument that continuing to burn fossil fuels and driving up the temperature of the global weather systems and environment could lead to higher crop yields in some places, suggesting that it would ultimately outweigh the damages of extreme disasters, drought, wildfires and hurricanes. In other words, climate change could be a win-win for the environment and for the economy.

“Maybe a little bit of lukewarming is good for society,” Heritage’s Dayaratna said. “You could go on vacation to areas that once you could not necessarily go.”

by Jennifer Smith Richards and Jodi S. Cohen

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The U.S. Department of Education on Thursday told employees that it would lift its monthlong freeze on investigating discrimination complaints at schools and colleges across the country — but only to allow disability investigations to proceed.

That means that thousands of outstanding complaints filed with the department’s Office for Civil Rights related to race and gender discrimination — most of which are submitted by students and families — will continue to sit idle. That includes cases alleging unfair discipline or race-based harassment, for example.

“I am lifting the pause on the processing of complaints alleging discrimination on the basis of disability. Effective immediately, please process complaints that allege only disability-based discrimination,” Craig Trainor, the office’s acting director, wrote in an internal memo obtained by ProPublica. It was sent to employees in the enforcement arm of the office, most of whom are attorneys.

A spokesperson for the department did not immediately respond to a request for comment.

ProPublica reported last week that the Department of Education had halted ongoing civil rights investigations, an unusual move even during a presidential transition. Department employees said they had been told not to communicate with students, families and schools involved in cases that were launched in previous administrations, describing the edict as a “gag order” and saying they had “been essentially muzzled.”

The office has opened only a handful of new cases since the inauguration of President Donald Trump, and nearly all of them reflect his priorities. The investigations target a school district’s gender-neutral bathroom and institutions that have allowed transgender athletes to participate in women’s sports. Other prioritized investigations involve allegations of discrimination against white students or of anti-semitism.

As of last week, the OCR had opened about 20 new investigations in all, a low number compared with similar periods in prior years. More than 250 new cases were opened in the same time period last year, for example.

The OCR has had a backlog of cases for years — there were about 12,000 pending investigations when Trump took office. Some had been open for more than a decade, which civil rights advocates said failed to bring relief to students when they needed it.

About half of the pending investigations are related to students with disabilities who feel they’ve been mistreated or unfairly denied help at school, according to a ProPublica analysis of department data.

Investigators were pursuing about 3,200 active complaints of racial discrimination, including unfair discipline and racial harassment. An additional roughly 1,000 complaints were specific to sexual harassment or sexual violence, the analysis found. The remainder concern a range of discrimination claims.

Ignoring or attacking disability rights “would be politically unpopular,” said Harold Jordan of the American Civil Liberties Union, who works on education equity issues across the country. “They don’t want to be seen as shutting down all the disability claims,” he said.

But complaints typically investigated by the OCR, many related to discrimination against students of color, do not align with Trump’s priorities on racial bias, which so far have related to prejudice against white students.

“They will pick up race cases once people file, essentially, reverse discrimination complaints,” Jordan said.

The OCR, in fact, decided this month that it would investigate a complaint filed in August by the Equal Protection Project, a conservative nonprofit, that alleges the Ithaca City School District in New York excluded white students by hosting an event called the Students of Color Summit. The Biden administration had not acted on the complaint, but new Education Department leaders decided within days that the agency would proceed with an investigation.

Thursday’s memo also included a “revised” case manual, which details how the office will investigate and resolve complaints that allege violations of civil rights law. During the previous administration, investigators had the authority to open “systemic” inquiries when there was evidence of widespread civil rights issues or multiple complaints of the same type of discrimination at a school district or college. That ability to launch wider investigations appears to have been stripped under Trump; there is no mention of systemic investigations in the new manual.

The manual also no longer includes gender-neutral references; people alleging violations of “their” rights have been replaced by “his or her” in Trump’s updated version. That aligns with his recent anti-transgender policies and his view that there are only two genders.

The shifts at the OCR come as Trump has called the Education Department a “con job” and is expected to issue an executive order that it be dismantled. Last week, Trainor told schools and colleges that they have two weeks to eliminate race as a factor in admissions, financial aid, hiring and training or risk losing federal funding.

“Under any banner, discrimination on the basis of race, color, or national origin is, has been, and will continue to be illegal,” Trainor wrote.

During the past two weeks, the Trump administration has terminated contracts totaling hundreds of millions of dollars that mostly focused on education research and data on learning and the country’s schools. The cuts were made at the behest of Elon Musk’s cost-cutting crew, known as the Department of Government Efficiency, which said it also ended dozens of training grants for educators that it deemed wasteful.

But recent contract terminations touted by Musk’s team as ridding the department of “waste” and ending “diversity” programs also abruptly ended services for some students with disabilities.

by Avi Asher-Schapiro, Andy Kroll and Christopher Bing

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While Elon Musk and his underlings demand budget cuts and layoffs across the federal government, funding for their agency — the Department of Government Efficiency — has soared to nearly $40 million, ProPublica found in a review of Office of Management and Budget records.

Billionaire investor Musk has called DOGE “maximally transparent.” President Donald Trump has said that some 100 people work for the group, but his administration has refused to make information about DOGE’s spending and operations public. In an effort to gain a clearer understanding of DOGE’s inner workings, ProPublica has gathered the names and backgrounds of the people employed there. We’ve identified some 46 people, including 12 new names we are adding to the list today.

Trump and Musk have defended DOGE as a tool for trimming fat from what they see as a bloated bureaucracy. The effects of those cuts have proved crippling, bringing a halt to programs that provided essential services to vulnerable populations across the country and the world.

The top Democrat on the House Appropriations Committee, Rep. Rosa DeLauro, D-Conn., told ProPublica she didn’t believe DOGE had the legal authority for the actions it’s taken. She called it a “made-up federal department” that’s wasting taxpayer dollars.

“This unlawful effort is stealing federal funds from American families and businesses,” DeLauro said.

Most of DOGE’s money, records show, has come in the form of payments from other federal agencies made possible by a nearly century-old law called the Economy Act. To steer those funds to the new department, the Trump administration has treated DOGE as if it were a federal agency. And by dispatching members of its staff to other agencies and having those staffers issue edicts about policy and personnel, DOGE has also behaved as if it has agency-level authority.

The use of the Economy Act would seem to subject DOGE to the same open-records laws that cover most federal agencies, such as the Environmental Protection Agency or the State Department. However, DOGE has refused to respond to Freedom of Information Act requests, saying it operates with executive privileges. Musk has also flip-flopped about whether DOGE’s staff members are paid. Initially he said they were not, but earlier this week he said some of them were.

The conflicting stances put the Trump administration in a bind, legal experts say. If DOGE is a federal agency, it can’t shield its records from the public. If it’s not an agency, then DOGE’s tens of millions of dollars in funding weren’t legally allocated and should be returned, some contend.

“The administration can’t have it both ways,” said Adam Grogg, a former deputy general counsel at OMB and now the legal director at Governing for Impact, a left-of-center think tank. “Either it’s an agency covered by FOIA with the authority to do what it’s doing, or it’s purely advising the president and can’t be directing agencies in the way it now is.”

A federal judge presiding over one of the many DOGE-related lawsuits also recently grilled the administration’s lawyers about its conflicting stances. In a recent hearing, U.S. District Judge John Bates characterized the government’s position as “we’re not an agency where we don’t want to be an agency, but we are an agency this one instance where we want to be.”

ProPublica has confirmed the names of 12 additional government staffers who are either part of DOGE or are linked to Musk’s constellation of companies and have roles in the new administration. We confirmed the names by cross-referencing agency records, speaking with dozens of sources inside the federal government, and poring through documents from ongoing litigation challenging DOGE’s authority.

They are spread across agencies. At the Department of Education, DOGE staffers are exploring how to expand the agency’s reliance on AI to both identify potential waste and interact with student loan recipients. At the EPA, they have reportedly gained access to contracting databases. Some staffers serve in executive-level roles while others have ambiguous titles, such as “senior adviser,” leaving unclear the nature of their work.

One of the names newly added to the tracker, Kathryn Armstrong Loving, is the sibling of crypto executive Brian Armstrong, who runs the industry leader Coinbase. Coinbase donated $1 million to Trump’s inauguration fund, and Armstrong met with Trump to discuss appointments to administration posts, according to The Wall Street Journal.

Some employees work at more than one agency. None responded to requests for comment.

While Musk has celebrated DOGE’s cuts and disparaged targeted agencies, Trump officials now say he’s not actually running it.

The White House did not respond to requests for comment.

Funding Floodgates

The Trump administration began funding DOGE soon after it took office. It started by tapping $750,000 from a White House fund for information technology initiatives in late January.

Since then, the funding has ballooned; the most recent apportionment came on Feb. 8 and included a $14 million chunk described as part of a “software modernization initiative.” In all, ProPublica found, more than $39 million has been earmarked to DOGE in the Trump administration’s first month.

For perspective, in recent years Congress had allocated around $50 million a year for the IT modernization initiative that DOGE supplanted, budget records show.

The Trump administration has not yet released enough details to trace the exact source of the funding flowing into DOGE or said who is being paid. The money could be coming from agency budgets that have money set aside for IT upgrades or other services. It’s also not yet clear what timeframe the allocation covers or whether it has funded salaries.

Funding one agency from another’s budget is not unusual, experts say. But money cannot be moved around for whatever purpose the White House wants — it is restricted by something called the “purpose statute,” which requires funds to pay for items Congress has specifically prescribed.

DOGE’s operating method “leaves questions about possible violations of the purpose statute,” said Christie Wentworth with the ethics watchdog Citizens for Responsibility and Ethics in Washington. “If DOGE uses funds that are available only for IT-related purposes for initiatives that have nothing to do with IT, that use could violate federal law.”

Brett Murphy, Kirsten Berg, Pratheek Rebala and Annie Waldman contributed reporting.

Correction

Feb. 21, 2025: This story originally misspelled the name of the sister of cryptocurrency executive Brian Armstrong. She is Kathryn Armstrong Loving, not Katherine.

by Lizzie Presser, Andrea Suozzo, Sophie Chou and Kavitha Surana

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Pregnancy became far more dangerous in Texas after the state banned abortion in 2021, ProPublica found in a first-of-its-kind data analysis.

The rate of sepsis shot up more than 50% for women hospitalized when they lost their pregnancies in the second trimester, ProPublica found.

The surge in this life-threatening condition, caused by infection, was most pronounced for patients whose fetus may still have had a heartbeat when they arrived at the hospital.

ProPublica previously reported on two such cases in which miscarrying women in Texas died of sepsis after doctors delayed evacuating their uteruses. Doing so would have been considered an abortion.

The new reporting shows that, after the state banned abortion, dozens more pregnant and postpartum women died in Texas hospitals than had in pre-pandemic years, which ProPublica used as a baseline to avoid COVID-19-related distortions. As the maternal mortality rate dropped nationally, ProPublica found, it rose substantially in Texas.

ProPublica’s analysis is the most detailed look yet at a rise in life-threatening complications for women losing a pregnancy after Texas banned abortion. It raises concerns that the same pattern may be occurring in more than a dozen other states with similar bans.

To chart the scope of pregnancy-related infections, ProPublica purchased and analyzed seven years of Texas’ hospital discharge data.

When abortion was legal in Texas, the rate of sepsis for women hospitalized during second-trimester pregnancy loss was relatively steady. Then the state’s first abortion ban went into effect and the rate of sepsis spiked.

Note: For hospitalizations involving a pregnancy loss between 13 weeks’ gestation and the end of the 21st week. Rates are annual. (Lucas Waldron/ProPublica)

“This is exactly what we predicted would happen and exactly what we were afraid would happen,” said Dr. Lorie Harper, a maternal-fetal medicine specialist in Austin.

She and a dozen other maternal health experts who reviewed ProPublica’s findings say they add to the evidence that the state’s abortion ban is leading to dangerous delays in care. Texas law threatens up to 99 years in prison for providing an abortion. Though the ban includes an exception for a “medical emergency,” the definition of what constitutes an emergency has been subject to confusion and debate.

Many said the ban is the only explanation they could see for the sudden jump in sepsis cases.

The new analysis comes as Texas legislators consider amending the abortion ban in the wake of ProPublica’s previous reporting, and as doctors, federal lawmakers and the state’s largest newspaper have urged Texas officials to review pregnancy-related deaths from the first full years after the ban was enacted; the state maternal mortality review committee has, thus far, opted not to examine the death data for 2022 and 2023.

The standard of care for miscarrying patients in the second trimester is to offer to empty the uterus, according to leading medical organizations, which can lower the risk of contracting an infection and developing sepsis. If a patient’s water breaks or her cervix opens, that risk rises with every passing hour.

Sepsis can lead to permanent kidney failure, brain damage and dangerous blood clotting. Nationally, it is one of the leading causes of deaths in hospitals.

While some Texas doctors have told ProPublica they regularly offer to empty the uterus in these cases, others say their hospitals don’t allow them to do so until the fetal heartbeat stops or they can document a life-threatening complication.

Last year, ProPublica reported on the repercussions of these kinds of delays.

Forced to wait 40 hours as her dying fetus pressed against her cervix, Josseli Barnica risked a dangerous infection. Doctors didn’t induce labor until her fetus no longer had a heartbeat.

Physicians waited, too, as Nevaeh Crain’s organs failed. Before rushing the pregnant teenager to the operating room, they ran an extra test to confirm her fetus had expired.

Both women had hoped to carry their pregnancies to term, both suffered miscarriages and both died.

In response to their stories, 111 doctors wrote a letter to the Legislature saying the abortion ban kept them from providing lifesaving care and demanding a change.

“It’s black and white in the law, but it’s very vague when you’re in the moment,” said Dr. Tony Ogburn, an OB-GYN in San Antonio. When the fetus has a heartbeat, doctors can’t simply follow the usual evidence-based guidelines, he said. Instead, there is a legal obligation to assess whether a woman’s condition is dire enough to merit an abortion under a prosecutor’s interpretation of the law.

Some prominent Texas Republicans who helped write and pass Texas’ strict abortion bans have recently said that the law should be changed to protect women’s lives — though it’s unclear if proposed amendments will receive a public hearing during the current legislative session.

ProPublica’s findings indicate that the law is getting in the way of providing abortions that can protect against life-threatening infections, said Dr. Sarah Prager, a professor of obstetrics and gynecology at the University of Washington.

“We have the ability to intervene before these patients get sick,” she said. “This is evidence that we aren’t doing that.”

A New View

Health experts, specially equipped to study maternal deaths, sit on federal agencies and state-appointed review panels. But, as ProPublica previously reported, none of these bodies have systematically assessed the consequences of abortion bans.

So ProPublica set out to do so, first by investigating preventable deaths, and now by using data to take a broader view, looking at what happened in Texas hospitals after the state banned abortion, in particular as women faced miscarriages.

“It is kind of mindblowing that even before the bans researchers barely looked into complications of pregnancy loss in hospitals,” said perinatal epidemiologist Alison Gemmill, an expert on miscarriage at Johns Hopkins Bloomberg School of Public Health.

In consultation with Gemmill and more than a dozen other maternal health researchers and obstetricians, ProPublica built a framework for analyzing Texas hospital discharge data from 2017 to 2023, the most recent full year available. This billing data, kept by hospitals and collected by the state, catalogues what happens in every hospitalization. It is anonymized but remarkable in its granularity, including details such as gestational age, complications and procedures.

To study infections during pregnancy loss, ProPublica identified all hospitalizations that included miscarriages, terminations and births from the beginning of the second trimester up to 22 weeks’ gestation, before fetal viability. Since first-trimester miscarriage is often managed in an outpatient setting, ProPublica did not include those cases in this analysis.

When looking at stays for second-trimester pregnancy loss, ProPublica found a relatively steady rate of sepsis before Texas made abortion a crime. In late 2021, the state made it a civil offense to end a pregnancy after a fetus developed cardiac activity, and in the summer of 2022, the state made it a felony to terminate any pregnancy, with few exceptions.

In 2021, 67 patients who lost a pregnancy in the second trimester were diagnosed with sepsis — as in the previous years, they accounted for about 3% of the hospitalizations.

In 2022, that number jumped to 90.

The following year, it climbed to 99.

ProPublica’s analysis was conservative and likely missed some cases. It doesn’t capture what happened to miscarrying patients who were turned away from emergency rooms or those like Barnica who were made to wait, then discharged home before they returned with sepsis.

Our analysis showed that patients who were admitted while their fetus was still believed to have a heartbeat were far more likely to develop sepsis.

Sepsis Rates Spiked for Patients Whose Initial Diagnosis Didn’t Include Fetal Death

For patients in Texas hospitals who lost a pregnancy, about half were not diagnosed with fetal demise when they were admitted, meaning that their fetus may still have had a heartbeat at that time. Those patients saw a dramatic increase in sepsis after the state banned abortion.

Note: For hospitalizations involving a pregnancy loss between 13 weeks’ gestation and the end of the 21st week. We identified patients whose fetus had no heartbeat when they were admitted by looking for a diagnosis of “intrauterine death” or “missed abortion.” Rates are annual. (Lucas Waldron/ProPublica)

“What this says to me is that once a fetal death is diagnosed, doctors can appropriately take care of someone to prevent sepsis, but if the fetus still has a heartbeat, then they aren’t able to act and the risk for maternal sepsis goes way up,” said Dr. Kristina Adams Waldorf, professor of obstetrics and gynecology at UW Medicine and an expert in pregnancy complications. “This is needlessly putting a woman’s life in danger.”

Studies indicate that waiting to evacuate the uterus increases rates of sepsis for patients whose water breaks before the fetus can survive outside the womb, a condition called previable premature rupture of membranes or PPROM. Because of the risk of infection, major medical organizations like the Society for Maternal-Fetal Medicine and the American College of Obstetricians and Gynecologists advise doctors to always offer abortions.

Researchers in Dallas and Houston examined cases of previable pregnancy complications at their local hospitals after the state ban. Both studies found that when women weren’t able to end their pregnancies right away, they were significantly more likely to develop dangerous conditions than before the ban. The study of the University of Texas Health Science Center in Houston, not yet published, found that the rate of sepsis tripled after the ban.

Dr. Emily Fahl, a co-author of that study, recently urged professional societies and state medical boards to “explicitly clarify” that doctors need to recommend evacuating the uterus for patients with a PPROM diagnosis, even with no sign of infection, according to MedPage Today.

UTHealth Houston did not respond to several requests for comment.

ProPublica zoomed out beyond the second trimester to look at deaths of all women hospitalized in Texas while pregnant or up to six weeks postpartum. Deaths peaked amid the COVID-19 pandemic, and most patients who died then were diagnosed with the virus. But looking at the two years before the pandemic, 2018 and 2019, and the two most recent years of data, 2022 and 2023, there is a clear shift:

In the two earlier years, there were 79 maternal hospital deaths.

In the two most recent, there were 120.

Caitlin Myers, an economist at Middlebury College, said it’s crucial to examine these deaths from different angles, as ProPublica has done. Data analyses help illuminate trends but can’t reveal a patient’s history or wishes, as a detailed medical chart might. Diving deep into individual cases can reveal the timeline of treatment and how doctors behave. “When you see them together, it tells a really compelling story that people are dying as a result of the abortion restrictions.”

Texas has no plans to scrutinize those deaths. The chair of the maternal mortality review committee said the group is skipping data from 2022 and 2023 and picking up its analysis with 2024 to get a more “contemporary” view of deaths. She added that the decision had “absolutely no nefarious intent.”

“The fact that Texas is not reviewing those years does a disservice to the 120 individuals you identified who died inpatient and were pregnant,” said Dr. Jonas Swartz, an assistant professor of obstetrics and gynecology at Duke University. “And that is an underestimation of the number of people who died.”

The committee is also prohibited by law from reviewing cases that include an abortion medication or procedure, which can also be used during miscarriages. In response to ProPublica’s reporting, a Democratic state representative filed a bill to overturn that prohibition and order those cases to be examined.

Because not all maternal deaths take place in hospitals and the Texas hospital data did not include cause of death, ProPublica also looked at data compiled from death certificates by the Centers for Disease Control and Prevention.

It shows that the rate of maternal deaths in Texas rose 33% between 2019 and 2023 even as the national rate fell by 7.5%.

A New Imperative

Texas’ abortion law is under review this legislative session. Even the party that championed it and the senator who authored it say they would consider a change.

On a local television program last month, Republican Lt. Gov. Dan Patrick said the law should be amended.

“I do think we need to clarify any language,” Patrick said, “so that doctors are not in fear of being penalized if they think the life of the mother is at risk.”

State Sen. Bryan Hughes, who once argued that the abortion ban he wrote was “plenty clear,” has since reversed course, saying he is working to propose language to amend the ban. Texas Gov. Greg Abbott told ProPublica, through a spokesperson, that he would “look forward to seeing any clarifying language in any proposed legislation from the Legislature.”

Patrick, Hughes and Attorney General Ken Paxton did not respond to ProPublica’s questions about what changes they would like to see made this session and did not comment on findings ProPublica shared.

In response to ProPublica’s analysis, Abbott’s office said in a statement that Texas law is clear and pointed to Texas health department data that shows 135 abortions have been performed since Roe was overturned without resulting in prosecution. The vast majority of the abortions were categorized as responses to an emergency but the data did not specify what kind. Only five were solely to “preserve [the] health of [the] woman.”

At least seven bills related to repealing or creating new exceptions to the abortion laws have been introduced in Texas.

Doctors told ProPublica they would most like to see the bans overturned so all patients could receive standard care, including the option to terminate pregnancies for health considerations, regardless of whether it’s an emergency. No list of exceptions can encompass every situation and risk a patient might face, obstetricians said.

“A list of exceptions is always going to exclude people,” said Dallas OB-GYN Dr. Allison Gilbert.

It seems unlikely a Republican-controlled Legislature would overturn the ban. Gilbert and others are advocating to at least end criminal and civil penalties for doctors. Though no doctor has been prosecuted for violating the ban, the mere threat of criminal charges continues to obstruct care, she said.

In 2023, an amendment was passed that permitted physicians to intervene when patients are diagnosed with PPROM. But it is written in such a way that still exposes physicians to prosecution; it allows them to offer an “affirmative defense,” like arguing self-defense when charged with murder.

“Anything that can reduce those severe penalties that have really chilled physicians in Texas would be helpful,” Gilbert said. “I think it will mean that we save patients’ lives.”

Rep. Mihaela Plesa, a Democrat from outside Dallas who filed a bill to create new health exceptions, said that ProPublica’s latest findings were “infuriating.”

She is urging Republicans to bring the bills to a hearing for debate and discussion.

Last session, there were no public hearings, even as women have sued the state after being denied treatment for their pregnancy complications. This year, though some Republicans appeared open to change, others have gone a different direction.

One recently filed a bill that would allow the state to charge women who get an abortion with homicide, for which they could face the death penalty.

Do you live in a state that has passed laws affecting abortion in the last few years? In the time since, have you or a loved one experienced delayed health care while pregnant or experiencing a miscarriage?

ProPublica would like to hear from you to better understand the unintended impact of abortion bans across the country. Email our reporters at reproductivehealth@propublica.org to share your story.

We understand this may be difficult to talk about, and we have detailed how we report on maternal health to let you know what you can expect from us.

Lucas Waldron contributed graphics. Mariam Elba contributed research.

by Andrea Suozzo, Sophie Chou and Lizzie Presser

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A first-of-its-kind analysis by ProPublica found that the sepsis rate in second-trimester pregnancy loss hospitalizations increased by more than 50% after Texas’ near-total abortion ban went into effect in September 2021. The analysis also identified at least 120 in-hospital deaths of pregnant or postpartum women in 2022 and 2023 — an increase of dozens of deaths from a comparable period before the COVID-19 pandemic.

Neither the CDC nor states are investigating deaths or severe maternal complications related to abortion bans. And although the federal government and many states track severe complications in birth events using a federally established methodology, far less is known about complications that arise during a pregnancy loss. There is no federal methodology for doing this, so we consulted with experts to craft one.

We acquired Texas hospitalization data from 2017 through 2023, giving us more than two years of data after the implementation of the state’s six-week abortion ban in September 2021, and more than a year of data following its full abortion ban, which went into effect in August 2022.

We spoke with dozens of researchers and clinicians to adapt the federal algorithm for birth complications to focus on severe complications in early pregnancy, before fetal viability.

This methodology lays out the steps we took to complete this analysis, to help experts and interested readers understand our approach and its limitations.

Identifying Second-Trimester Hospitalizations

We purchased seven years of inpatient discharge records for all hospitals from the Texas Department of State Health Services. These records contain de-identified data for all hospital stays longer than a day, with information about the stay, including diagnoses recorded and procedures performed during the stay, as well as some patient demographic information and billing data.

Within this dataset, we opted to focus on second-trimester pregnancy loss, because first-trimester miscarriage management often occurs in an outpatient setting. In the future, we plan to look at outpatient data as well.

To examine outcomes in the second trimester, we first identified hospitalizations where a pregnancy ended. We used a methodology to identify severe complications in birth events developed by the Health Resources and Services Administration, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, and the Alliance for Innovation on Maternal Health, an initiative of the American College of Obstetricians and Gynecologists. The method is outlined in statistical code published by HRSA, and it first identifies every hospitalization with a live birth, stillbirth or an “abortive outcome” (which refers to an intended or unintended pregnancy loss before 20 weeks). Rather than excluding those abortive outcomes to focus on birth, as the HRSA code directs, we included them to look at all hospitalizations where a pregnancy ended. This narrowed our list of hospitalizations to an average of 370,000 per year.

The HRSA methodology further filters hospitalizations to only patients who are female and between the ages of 12 and 54. Our dataset had five-year age ranges, so we filtered to ages between 10 and 54. This brought our hospitalization list to 364,000 each year, on average.

For each hospitalization where a pregnancy ended, we looked for a diagnosis code recording the gestational age of the fetus. In cases where a long hospitalization had multiple gestational week codes recorded over the course of the stay, we took the latest one.

We excluded pregnancy-end hospitalizations without a gestational week code from our analysis — removing about 49,500 hospitalizations, or 1.9% of our dataset. More than two-thirds had coding that indicated a birth, likely to have occurred after 20 weeks.

Based on conversations with doctors and researchers, we narrowed our focus to hospitalizations where a pregnancy ended in the second trimester before fetal viability, from the start of the 13th week through 21 weeks and six days. While pregnancies that end at 20 and 21 weeks are often coded as births, rather than abortive outcomes, we included those weeks in our definition of pregnancy loss because experts told us it’s extremely unlikely that a baby born at 21 weeks could survive. This brought our list of hospitalizations to 15,188.

The number of second trimester hospitalizations, and characteristics of the women hospitalized, was largely stable from 2017 through 2023, the years of our analysis. In 2023, however, as the number of births in the state increased, the number of hospitalizations in our window declined to 2,036, below the yearly average of 2,169.

The race and ethnicity of patients each year, as well as the proportion of these hospitalizations in which the patients were covered by Medicaid or uninsured, did not change significantly after the state’s 2021 abortion ban, known as SB 8, went into effect.

Determining Sepsis Rates

Within these hospitalizations, we looked for diagnoses of sepsis, a life-threatening complication that can follow delays in emptying the uterus. The CDC defines a list of sepsis codes associated with severe maternal complications, which formed the basis of our definition. However, that list of codes is developed to look at sepsis in birth events, the vast majority of which occur much later in a pregnancy than our hospitalizations. We identified five sepsis codes associated with early pregnancy events like ectopic pregnancy and miscarriage, adding them to the existing list of sepsis codes to develop a definition that more fully captured early pregnancy complications.

To compare rates before and after the implementation of SB 8, we grouped the nine quarters of data we had after the implementation of the ban (October 2021 through December 2023) and compared it with the nine quarters immediately before (July 2019 through September 2021). Our dataset gives us the quarter in which a patient was discharged from the hospital but not the exact date, so the “before” group contains one month of data from after SB 8 went into effect on Sept. 1, 2021.

Identifying Fetal Demise

The standard of care for second-trimester miscarriage or rupture of membranes prior to fetal viability is to offer patients a dilation and evacuation or an induction to end the pregnancy — even if there is still a fetal heartbeat. In our reporting, we’d heard that because of the language of Texas’ abortion law, some hospitals and doctors were waiting for the fetal heartbeat to stop or the mother to develop a life-threatening illness, whichever occurred first. To look into this, we wanted to separate hospitalizations in which doctors would have theoretically been able to offer a termination immediately under the law — ones where the patient had a diagnosis indicating that there was no fetal heartbeat at the time of admission to the hospital — from ones where doctors may have waited to provide care.

We determined that about half of our second-trimester hospitalizations did not have a fetal heartbeat on admission. We identified these cases by focusing on two sets of diagnosis codes: Prior to 20 weeks gestation, a diagnosis of “missed abortion” refers to a miscarriage where the fetus has stopped developing, but the body has not yet expelled the tissue. After 20 weeks, a diagnosis of “intrauterine death” indicates that the fetus has died. For both diagnoses, we included only those that were marked as “present on admission.”

Sepsis Rate Findings

Our analysis found that the sepsis rate in second-trimester pregnancy loss hospitalizations increased after the state’s ban went into effect, and the surge was most pronounced in cases in which the fetus may still have had a heartbeat when the patient arrived at the hospital.

In the nine quarters before SB 8 went into effect, the sepsis rate in second-trimester pregnancy loss hospitalizations was 2.9%. In the nine quarters after SB 8 went into effect, the sepsis rate was 4.5%, an increase of 55%.

Since our total number of sepsis cases was relatively small, we measured whether the two groups of data were significantly different using a t-test. We calculated sepsis rates for second-trimester hospitalizations in the nine quarters after SB 8 went into effect and compared that with sepsis rates during the nine quarters immediately prior. We found that increase to be statistically significant (p-value < 0.05).

Sepsis Rate Increased Over 50% for Second-Trimester Pregnancy Loss Hospitalizations After SB 8

We compared the nine quarters after SB 8 went into effect — from October 2021 through December 2023 — to the nine quarters before the ban went into effect — July 2019 to September 2021.

Note: For hospitalizations involving a pregnancy loss between 13 weeks’ gestation and the end of the 21st week.

Sepsis is a reaction to an infection, and the most common additional infection diagnosis in sepsis hospitalizations was chorioamnionitis, an infection of the amniotic fluid that can also cause early rupture of membranes. Rates of chorioamnionitis in sepsis cases remained stable before and after SB 8.

Our analysis also showed that patients admitted while their fetus was still believed to have a heartbeat were far more likely to contract sepsis.

Sepsis Rates Spiked for Patients Whose Initial Diagnosis Didn’t Include Fetal Death

For patients in Texas hospitals who lost a pregnancy, about half were not diagnosed with fetal demise when they were admitted, meaning that their fetus may still have had a heartbeat at that time. Those patients saw a dramatic increase in sepsis after the state banned abortion.

Note: For hospitalizations involving a pregnancy loss between 13 weeks’ gestation and the end of the 21st week. We identified patients whose fetus had no heartbeat when they were admitted by looking for a diagnosis of “intrauterine death” or “missed abortion.” Rates are annual. (Lucas Waldron/ProPublica)

In the nine quarters prior to the implementation of SB 8, the rate of sepsis was nearly twice as high for those with no fetal demise diagnosis on admission compared with those with a fetal demise diagnosis on admission. After SB 8, the rate increased in both groups, and the gap between them widened.

Again, since the number of total sepsis cases was relatively small, we used a t-test to see if there was a statistically significant difference before and after SB 8 in both groups. We found the increase in rates to be significant on both counts (p < 0.05).

Sepsis Rates for Hospitalizations With Fetal Demise on Admission Sepsis Rates for Hospitalizations Without Fetal Demise on Admission Notes: For hospitalizations involving a pregnancy loss between 13 weeks’ gestation and the end of the 21st week. We compared the nine quarters after SB 8 went into effect to the nine quarters before the ban went into effect. Sepsis Rate Analysis Limitations

Maternal health experts noted that discharge data offers a limited window into the details of patient care. Changes in the frequency of a diagnosis code can signal a change in patient health but also a change in coding practices. Our analysis can’t isolate changes in outcomes from changes in sepsis coding practices over time or doctors taking additional documentation steps to show they’ve complied with the law. And billing records offer no detail into a patient’s history and medical wishes or the decisions that medical staff make in the course of care.

Our analysis also does not account for changes in health care outside of hospitals. Though births typically take place in a hospital, other early pregnancy care often occurs in an outpatient setting and does not require a hospitalization, so we can only see a small subset of this type of care — specifically, the most severe cases. We also can’t account for how closures of reproductive health care clinics in the wake of Texas’ abortion ban changed the role hospitals play in miscarriage care.

We cannot see when hospitals turn patients away rather than admitting them. And if a patient who is miscarrying has an inpatient stay at one hospital and is then transferred to another hospital for another inpatient stay, that patient would be double-counted in our analysis, since we can’t connect patients across visits. This could potentially inflate the number of hospitalizations in our dataset, artificially pushing the sepsis rate down.

Our dataset is missing a handful of records from the fourth quarter of 2023; in a small number of cases — about 300 per quarter, or 0.04% of records — providers submit data on a hospitalization late, and that record is released in the dataset for the following quarter.

Billing data is widely used by researchers to study maternal health. While it will never tell the whole story, in aggregate, particularly in a state with a large population, it can paint a picture of changing health outcomes. Our analysis gives us a broad view of care at Texas hospitals before and after a major policy change.

More than a dozen maternal health experts reviewed ProPublica’s findings and said our analysis adds to mounting evidence that the state’s abortion ban is likely leading to dangerous delays in care. Many said the ban is the only explanation they could see for the sudden jump in sepsis cases.

Pregnancy-Associated Hospital Deaths

We found 120 women who died while hospitalized during pregnancy or up to six weeks postpartum in 2022 and 2023 in the inpatient billing data. The Texas Maternal Mortality and Morbidity Review Committee will not review deaths from these years, stating that they will skip to 2024 in an effort to get a more “contemporary” view of deaths, a choice that faced widespread criticism. (The committee chair said there was “absolutely no nefarious intent” behind the decision.)

To identify inpatient deaths in the Texas hospital discharge data, we included all records with a “patient status” of “expired” and with a diagnosis or procedure code indicating that the patient was pregnant or up to six weeks postpartum, with a specific postpartum complication based on the “Identifying Pregnant and Postpartum Medicaid and CHIP Beneficiaries” code list by the Centers for Medicare & Medicaid Services. The CDC looks at deaths up to within one year of a pregnancy’s end, but our dataset doesn’t explicitly identify pregnant or recently pregnant patients, so we were limited in the hospitalizations we could identify through codes.

Our tally does not include those who died in a hospitalization that took place separately from the end of a pregnancy, unless the patient was diagnosed with a specific postpartum complication. We did not filter for age and gender for our death records, as that data was less reliably filled out than the diagnosis and procedure codes.

Our count of inpatient deaths does not attempt to determine what role a person’s pregnancy or the state’s abortion ban played in their death. That type of analysis would require access to medical records. Our tally would include, for example, a person who was hospitalized after a car crash but who was also pregnant. Experts advised us to leave these cases in, because without investigation by the maternal mortality committee, it’s impossible to know, for example, if there was any relationship between the patient’s pregnancy and the cause of the accident, or if there were any delays in maternal care after the accident.

We found that deaths increased sharply during the height of the COVID-19 pandemic and peaked in 2021, and that many cases in 2020 and afterward included COVID-19 diagnostic codes. More than 60% of the deaths that we analyzed had a diagnosis of COVID-19 in 2021, and 27% had a COVID-19 diagnosis in 2022. The COVID-19 diagnostic code was not introduced until October 2020, several months after the pandemic began, and was updated in January 2021. The coding changes, combined with changes in hospital protocols around identifying COVID-19 cases, make it impossible to filter out all COVID-19 related deaths during this time period.

Texas and National Rates of Maternal Mortality

The hospital billing data only includes information about Texas, so to compare with national rates, we used data from the CDC’s WONDER portal, which is based on birth and death certificates. For this analysis, we used a definition of maternal death recommended by CDC research guidelines for this data source. Our denominator includes all live births. For statewide rates, we use the state of residence of the mother in both the numerator and denominator. Rates are reported per 100,000 births.

Between 2019 and 2023, we found a 33% increase in maternal mortality rates in Texas, compared with a decrease of 7.5% nationally during the same time.

While both nationally and in Texas rates of maternal mortality peaked in 2021 during the COVID-19 pandemic and have dropped since, rates in Texas remain higher than before the pandemic.

Missing Documents

The federal methodology we used as a basis for our analysis of severe complications in pregnancy hospitalizations was outlined in a document available for download from HRSA’s Maternal and Child Health Bureau. The instructions included statistical code that we adapted to do our own analysis, and they were accompanied by a spreadsheet of maternal and child outcome measures over time for all 50 states and nationally.

As of early February, both the instructions and the spreadsheet had been replaced by documents noting that the files were “currently under construction and not available.”

Lucas Waldron contributed graphics.

by Lomi Kriel, ProPublica and The Texas Tribune

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

This article is co-published with The Texas Tribune, a nonprofit, nonpartisan local newsroom that informs and engages with Texans. Sign up for The Brief Weekly to get up to speed on their essential coverage of Texas issues.

The Afghan brothers worked closely with the American military for years, fighting the Taliban alongside U.S. troops, including the Special Forces, and facing gunfire and near misses from roadside bombs while watching their friends die.

They escaped Afghanistan in 2021 when the Taliban seized control of the country. One brother is now an elite U.S. Army paratrooper at Fort Liberty in North Carolina. The other serves in the Army Reserve in Houston. Their eldest sister and her husband, however, were stranded in Afghanistan, forced into hiding as they waited for the U.S. government to green-light their refugee applications. Finally, after three years, they received those approvals in December and, according to the family, were slated to reunite with their brothers this month.

But weeks before the couple was due to arrive, President Donald Trump issued an executive order indefinitely suspending the admission of refugees. The order was the first in a series of sweeping actions that blocked the arrival of more than 10,000 refugees who already had flights booked for the U.S. and that froze funding for national and international resettlement organizations.

A top former government official who worked on refugee issues told ProPublica and The Texas Tribune that another 100,000 refugees who had already been vetted by the Department of Homeland Security have also been blocked from entering the country. The official, who declined to be identified for fear of retribution, said the Trump administration is “moving so swiftly that there might not be much of a refugee program left to recover.”

Taken together, Trump’s actions are effectively dismantling the U.S. refugee system and eroding the country’s historic commitment to legal immigration, according to refugee resettlement and U.S. military experts, who say the most egregious examples include denying entrance to thousands of Afghans who worked with the U.S. military and their relatives.

The refugees “have been going through the process, which is very slow and very detailed and offers extreme scrutiny on each and every individual, and now, all of a sudden, that too is no longer acceptable,” said Erol Kekic, senior vice president with Church World Service, one of 10 national programs that work with the U.S. government to resettle refugees.

“We’re basically abandoning humanity at this moment in time, and America has been known for being that shining star and guiding countries in the world when it comes to doing the right thing for people in need,” Kekic said. “Now we’re not.”

The orders halting aid to international groups also indirectly affected a separate visa program for Afghan translators who worked with the U.S. military, closing off yet another avenue by which thousands hoped to enter the country. Together, the Trump administration’s actions have likely shuttered pathways to the U.S. for about 200,000 Afghans and their relatives whose refugee and military visa applications are currently being reviewed, including tens of thousands who have been vetted, the former U.S. government official said.

Abandoning Afghan allies whose work with the U.S. has them facing threats of retribution and death imperils the country’s standing abroad and makes the military’s job exceedingly difficult, said Ryan Crocker, a former U.S. ambassador to Afghanistan and onetime dean of Texas A&M University’s George Bush School of Government and Public Service.

If the Trump administration does not quickly exempt Afghans from the refugee-related orders, “good luck signing up the next bunch of recruits to help us in our endeavors in the future,” said Crocker, who is now a fellow with the Carnegie Endowment for International Peace, a nonpartisan international think tank in Washington, D.C.

“The entire world sees what we do and don’t do to support those who supported us,” Crocker said.

Spokespeople for the White House, the U.S. State Department, Secretary of State Marco Rubio and Homeland Security Secretary Kristi Noem did not respond to requests for comment about the escalated actions by Trump, who slashed refugee admissions to a record low of 15,000 in the final year of his first term.

Refugees and a coalition of resettlement groups filed the first refugee-related lawsuit against the administration last week, seeking to reverse the executive orders. It argues that the recent actions violate Congress’ authority to make immigration laws and that the administration did not follow federal regulations in implementing them. Another resettlement group, the U.S. Conference of Catholic Bishops, also sued the Trump administration over its refugee actions this week, arguing that they were unlawful.

The executive orders promise a review in 90 days and say that the State Department and DHS could grant exemptions “on a case-by-case basis,” but refugee groups said that neither agency has explained who is eligible or how to request such a waiver.

The Afghan brothers, who asked to be identified by an abbreviation of their last name, Mojo, are hoping the answers come quickly. They are among at least 200 Afghan Americans currently serving in the U.S. military whose family members applied for refugee status, only to be suddenly denied entrance.

“We feel betrayed,” the brother in Houston said. “We serve this country because it protected us, but now it is abandoning my sister, who is in danger because of our work with America.”

The Army Reserve member shows a letter written by his American military supervisor attesting to his years of risks and service for the U.S. government in fighting the Taliban. The letter argues that the man and his family were in danger as a result of his service and that the U.S. would “benefit” from his presence. (Annie Mulligan for ProPublica and The Texas Tribune) “A Community Issue”

The U.S. Refugee Admissions Program, which Congress created in 1980 following the Vietnam War, allows legal immigration for people fleeing their countries if they meet the narrow definition of being persecuted.

To qualify, refugees must prove that they have been targeted for political, racial or religious reasons or because they are part of a threatened social or ethnic group.

The vetting, which requires multiple security screenings and medical examinations, takes an average of about two years, according to experts.

Those who had made it through the process and are now unable to come because of Trump’s recent actions include the children of a former U.S. military translator living in Massachusetts with his wife. The Afghan couple waited three years to reunite with their children, who were separated from their parents at the Kabul airport on the day of the Taliban takeover and have been living in Qatar during the yearslong vetting process.

The kids, ages six to 17, were about to board their flights in Doha last month when the executive orders suddenly blocked their travel, leaving them in Qatar, where they had been supported by international refugee agencies that were funded, in part, by the U.S. government.

It’s uncertain how much longer they can stay in Qatar, said their father, Gul, who asked that his last name not be published to protect his family.

“When my wife heard this news, she fell on the ground and lost consciousness,” Gul said. “We have waited years for them to come and in a few hours, everything changed.”

A former Texas National Guard member was beside himself when he talked about how his plans to be reunited with his wife later this month had been upended. She is a member of the Hazara minority group, which has historically been the target of widespread attacks and abuses including from the Islamic State’s affiliate in Afghanistan, according to a 2022 report by Human Rights Watch, an international advocacy group.

His work for the U.S. military, he said, put her in even more danger.

“I don’t know what we’re going to do,” he sobbed into the phone.

The actions have also blocked the arrival of persecuted Christians, whom Trump had previously vowed to protect. That includes an Afghan family whose conversion led to violent attacks from conservative Muslims, according to refugee organizations.

Word of their persecution spurred a church in the conservative East Texas community of Tyler to sponsor the family’s refugee resettlement applications. Justin Reese, a 42-year-old software developer in Tyler who volunteers to help resettle refugees, said telling the family that it could no longer come was heartbreaking.

“You went from this level of commitment and certainty to none at all, literally in the space of a couple of minutes,” he said.

Aside from halting arrivals, Trump’s orders have blocked funding to U.S. nonprofit resettlement organizations, which caused them to lay off or furlough hundreds of employees and hindered their ability to help refugees already in the country.

In Houston, for example, the YMCA is currently restricted from offering about 400 new refugees basic services such as housing and health screening to help set them up for self-sufficiency, said Jeff Watkins, the organization’s chief international initiatives officer.

The nonprofit is temporarily relying on private funds and other programs to ensure that refugees’ housing and food needs are met and that they are not stranded, but Watkins said that is not sustainable for the long term.

“This becomes a community issue if those needs aren’t addressed,” Watkins said.

The Afghan Army reservist in Houston hopes the Trump administration will ultimately do right by his family after their previous and continuing service to the U.S. government. (Annie Mulligan for ProPublica and The Texas Tribune) “Live Up to Our Word”

The Afghan brothers in Houston and North Carolina said that their sister and her husband were forced to flee their home three years ago after the Taliban published photos of the brothers working with American troops and interrogated neighbors about their whereabouts.

The couple, who are both physicians, could no longer work. They moved every few months, relying on wire transfers sent by the brothers as they waited for the U.S. government to approve their refugee applications.

Now they are forced to continue hiding, but this time the path toward safety feels more nebulous.

Each day with no action increases the danger for stranded Afghans like them, said Shawn VanDiver, a U.S. Navy veteran who leads AfghanEvac, an organization that he began to help those left behind after the withdrawal.

“The Taliban is routinely harassing and torturing folks associated with us,” he said.

For years, Republicans criticized Biden for his handling of the withdrawal. “Now is the time for them to stand with our Afghan allies and fix this,” VanDiver said.

A Taliban spokesperson disputed in a text that it targeted those who worked with the U.S. military. The United Nations Assistance Mission in Afghanistan, however, in 2023 documented more than 200 killings of former officials and members of the armed forces after the takeover, but international human rights officials have said the true number is likely far higher.

U.S. Rep. Michael McCaul of Texas, one of Biden’s critics on Afghanistan, said in a recent interview with CBS News that the U.S. needed to “live up to our word” to protect Afghan allies.

“Otherwise, down the road, in another conflict, no one’s going to trust us,” he said.

But McCaul avoided criticizing Trump in a statement to ProPublica and the Tribune, saying that he believed the president would listen to veterans who have called for an exemption for Afghan allies.

The Houston brother said that he hopes that Trump will ultimately do the right thing for the families of servicemen like him and his brother, who have sacrificed so much for America.

His brother in North Carolina has written to his congressman to request an exemption for Afghans who “have been doing everything legally, following the law.”

“We don’t want to be worried about our loved ones being left behind in Afghanistan, and that will help boost our morale and our confidence in serving the American people with integrity,” he said.

That service, according to the North Carolina brother, will soon include a deployment to the Texas border with Mexico, where his unit would be ordered to aid the curtailing of illegal immigration.

Anjeanette Damon and Jeremy Kohler contributed reporting.

by Margaret Coker, The Current

This article was produced for ProPublica’s Local Reporting Network in partnership with The Current. Sign up for Dispatches to get stories like this one as soon as they are published.

In January, standing before a cluster of television cameras on the steps of the state Capitol, Georgia Gov. Brian Kemp promoted his experiment in Medicaid reform as a showcase for fellow conservatives seeking to overhaul safety net benefits around the country.

“What we are doing is working,” Kemp boasted about Georgia Pathways to Coverage. The federally subsidized health insurance program is supposed to cover nearly a quarter-million low-income Georgians who can prove they are working, studying or volunteering.

What the governor did not disclose, however, was that his program is not achieving two primary goals: enrolling people in health care and getting them to work, according to an examination by The Current and ProPublica. The findings were confirmed recently by an independent evaluation commissioned by the state that has yet to be publicly released.

As of the end of 2024, the Pathways program has cost federal and state taxpayers more than $86.9 million, three-quarters of which has gone to consultants, The Current and ProPublica found. The state asserted that costs increased because of a two-year delay to the program’s launch.

A mere 6,500 participants have enrolled 18 months into the program, approximately 75% fewer than the state had estimated for Pathways’ first year. Thousands of others never finished applying, according to the state’s data, as reports of technical glitches mounted. The state also never hired enough people to help residents sign up or to verify that participants are actually working, as Georgia required, federal officials and state workers said.

As a result, the Kemp administration has quietly rolled back a core tenet it heralded when it launched Pathways as an alternative to government entitlement programs for poor people that many conservatives deride as handouts and the nanny state. Rather than verifying that people are working every month, Georgia is confirming that participants meet these requirements only at the time of enrollment and upon their annual renewal, the state said in January.

Georgia’s experience offers a warning for the nation as conservatives attempt to curtail federally subsidized health care for low-income Americans, as outlined by Project 2025, the playbook designed for a second Donald Trump presidency. Congressional Republicans are pushing for deep cuts to Medicaid along with requiring recipients to work. Right now, Georgia is the only state that imposes a work requirement for Medicaid coverage. But nearly a dozen largely Republican-led states are considering work requirements for Medicaid enrollees.

Federal and state officials who have worked on Pathways say a litany of bad decisions, some technical and some political, doomed the program from meeting Kemp’s original goals. Even some lawmakers in Kemp’s own party want to pull the plug on Pathways.

The quarter-million people eligible for Pathways would have had an easier road to coverage had the state simply chosen to expand Medicaid under the Affordable Care Act, the 2010 health reform law that extended insurance to tens of millions of Americans, said Joan Alker, executive director of the Center for Children and Families at Georgetown University McCourt School of Public Policy. Kemp is one of 10 Republican governors who refused federal government subsidies to expand Medicaid under the belief that entitlement programs encourage freeloaders and are a drag on federal and state budgets. Sixteen percent of working-age residents in Georgia lack health insurance, one of the highest uninsured rates in the nation.

In response to Pathways’ low enrollment numbers, Kemp’s spokesperson Garrison Douglas said the governor never thought it was realistic to enroll the entire pool of eligible Georgians in the program. Douglas said Kemp’s health care strategy for low-income Georgians is superior to Medicaid expansion because it saves the state money and funnels participants into private health insurance, rather than what the Kemp administration has described as overregulated government-mandated plans that reimburse hospitals and doctors at lower rates.

“As the governor has said repeatedly, those who continue to promote full Medicaid expansion are selling Georgians a bill of goods,” he said.

The Pathways program is slated to sunset this fall, but Georgia has filed a request with the Trump administration to extend the experiment for another five years with the less stringent verification rules, as independent evaluators recommended. The Trump administration did not respond to requests for comment about its support for Medicaid work requirements and its views on Georgia’s Pathways experiment.

State officials did not explain why Georgia has not been able to meet its own verification standards.

“The governor’s mandate for all state agencies is to continually seek ways to make government more efficient and accessible for hardworking Georgians,” Fiona Roberts, a Department of Community Health spokesperson, said in a written statement.

The state requires Pathways participants to work at least 80 hours a month or be enrolled in school, job training or volunteering — activities the governor’s office says it believes contribute to eventual “financial independence.” Health policy research shows that requiring low-income people to work for health insurance does not increase coverage or boost their economic circumstances because most of them already have jobs.

“If the goal truly is to increase health insurance for low-income Georgians, they are doing it wrong,” said Dr. Harry J. Heiman, a member of a state commission to study comprehensive health coverage and a professor at Georgia State University School of Public Health. “The one thing that Pathways seems to do well is waste taxpayer money on consultants and administrative costs.”

Plagued by Tech Glitches

Pathways was supposed to help a group of Georgians whom the state had previously deemed ineligible for Medicaid: adults between 18 and 64 years old earning less than $15,650 a year if they are single, or $32,150 for a family of four.

The state told the federal government in its application to experiment with Pathways that it hoped to enroll 25,000 of the 246,000 Georgians eligible for Pathways during the program’s first year.

But those seeking coverage faced technical hurdles right away, according to interviews with six applicants as well as federal officials and current and former state employees.

The enrollment portal crashed each of the three times Kelsey Williams tried to apply. The single mother had been kicked off Medicaid last spring, after her son turned 1, per state law allowing her to keep her coverage for a year after giving birth. She called the Pathways customer service hotline for help and was sent through a phone tree that ended in a voicemail asking callers to leave a message.

“You’d go from one robot voice to another,” said Williams, who worked irregular hours as a convenience store clerk outside Macon.

No one called back. She gave up after nearly a month of trying. “I got the feeling that they really didn’t want to help me,” she said.

State officials have paid Deloitte Consulting more than $50 million so far for a software application that often froze and wiped out personal information, forcing applicants to start over. The technology also proved hard to navigate for many of Pathways’ target clients who don’t own smartphones or have access to reliable high-speed internet.

I got the feeling that they really didn’t want to help me.

—Kelsey Williams

As of January, the state’s own documents show that the program had a backlog of 16,000 applications awaiting processing, and in some months, upwards of 40% of people who started applications for Pathways gave up.

An independent evaluation from December, obtained by The Current and ProPublica, analyzed data gleaned from the first 13 months of the Pathways program and noted that applicants experienced administrative barriers to enrollment. People 50 and older had an especially difficult time proving they met the requirements, the evaluation said. The program requires applicants to provide paperwork that verifies their work status, including pay stubs and tax documents. That protocol contradicts Medicaid regulations that states should use available data to confirm most eligibility criteria, when possible, instead of making people provide documentation.

For Georgians who did manage to enroll, the technology problems persisted when they were required to verify each month that they had a job or were otherwise participating in a “qualifying activity.”

Paul Mikell lives in an area outside Atlanta without reliable internet service — and he doesn’t have the income for a phone plan with unlimited data. It takes him more than an hour each month to upload the employment documents necessary to reconfirm his eligibility, often using the free Wi-Fi at his public library.

Sometimes, Mikell said, the task has stretched days, even a whole week, because the Pathways verification portal freezes or crashes. One time, he said, he waited eight days for customer support to retrieve a password and restore his access.

The 49-year-old works part time for a hauling and trucking company in exchange for housing. He also picks up odd jobs to support his young son and elderly father. He does not receive traditional pay stubs that could be easily pulled by the state to verify his work status.

“It’s really, really difficult,” said Mikell, adding that stress over the possibility of losing coverage keeps him awake at night. “But it’s the only health care for someone like me.”

Mikell’s informal employment situation is typical for many low-income Americans who exist outside mainstream financial networks, and illustrates why verification can be an arduous process for programs with work requirements, said Jennifer Wagner, an expert in Medicaid enrollment technology at the Center on Budget and Policy Priorities, a Washington think tank. In Georgia, 65% of people eligible for Pathways are employed at least part time, while many of the rest are tethered to unpaid work such as caregiving that Pathways does not recognize, state data shows.

To help automate the application and verification processes, Georgia uses digital tools to collect wage and work histories of employees at large companies as well as those who are self-employed. But these tools are not comprehensive, and the task of verifying applicants’ eligibility for Pathways largely falls on a cadre of overburdened caseworkers.

In August 2023, a month after Pathways launched, the state was only able to verify that 39 of the 152 enrollees were indeed working or otherwise engaged in activities deemed acceptable by the state, according to state reports to the Centers for Medicare and Medicaid Services. Those reports attributed the low numbers to a lack of “functionality” and did not provide further explanation.

The state’s contracts with Deloitte, which The Current and ProPublica obtained through a public records request, were heavily redacted and reveal no detail about the technical design of Pathways’ digital platform or how it would be tested before launch.

Deloitte declined to comment and referred questions about the technical difficulties to Georgia officials. Roberts, the spokesperson for Georgia’s Medicaid agency, referred to Pathways as “both a policy and technical success” but said it had to work through issues “consistent with the launch of a new program of similar scale and complexity.”

“Based on feedback from customers and the community, the state continues to evolve the Pathways program and its processes,” Roberts said in a written statement.

The state still requires Pathways recipients to upload paperwork every month, but Georgia is only verifying it annually, Roberts said. The state also says it is not kicking anyone off the rolls.

An Overwhelmed Workforce

Loosening Pathways’ verification process does not change what federal and state officials say is another fundamental flaw in the program: Getting people enrolled would ultimately hinge on an understaffed department already struggling to keep up with processing applications for other safety net benefits.

About 30% of the staff at Georgia’s Division of Family and Children Services that oversees benefits enrollment and employment verification had turned over between 2017 and 2022, according to state data. Former agency managers attribute the unusually high churn to a workforce fed up with low pay and high stress, exacerbated by the coronavirus pandemic.

In 2023, the year Pathways launched, the agency was already swamped.

Caseworkers had started the time-intensive task of reenrolling the 2 million Georgians who had traditional Medicaid benefits, a process that happens every five years to ensure that participants still meet the requirements.

Federal officials were simultaneously scrutinizing the department for its backlog of 157,000 food stamp applications and ordered it to develop a “corrective plan” to process those benefits more quickly. Georgia was also slipping behind the 45-day standard for processing Medicaid applications, according to federal data.

Meanwhile, for approximately six months before Pathways started, caseworkers needed extensive training for the new program, further delaying reviews of food stamps and Medicaid applications, former managers said.

That spring, Kemp approved a temporary fix to the department’s workforce shortage: using federal grants to hire 300 additional caseworkers to handle the flood of Medicaid renewals. But state officials did not beef up staffing to handle Pathways applications, according to two federal employees and one former state manager, despite the fact that so much of Kemp’s political capital was riding on the program’s success.

The workload ballooned after Pathways’ launch in July 2023, according to three former caseworkers. “I’d go into work every day with piles and piles of files, and each of those files represented a real human being with real suffering,” said Deanna Matthews, who quit last year. “What people don’t realize is that some of us were processing food stamp applications and our families were struggling and needing food assistance as well.” (Starting salary for a caseworker who determines applicants’ eligibility for federal benefits is approximately $32,000 — the same as the federal poverty line for a family of four.)

I’d go into work every day with piles and piles of files, and each of those files represented a real human being with real suffering.

—Deanna Matthews

In December 2023, the state agency overseeing DFCS moved 200 caseworkers who had been processing applications for Medicaid to tackle the backlog of food stamp applications.

In Pathways’ first six months, the department had enrolled just 2,300 people, according to state data.

In response to questions from The Current and ProPublica, Ellen Brown, a spokesperson for the Georgia Department of Human Services, said the state has committed enough people to administer Pathways but that it “can always use more caseworkers” and continues to hire.

At the state Capitol, Republican legislators representing rural counties, where large numbers of uninsured adults live, had begun questioning their governor’s push for Pathways. They sought advice from other Republican-led states that were expanding Medicaid without work requirements.

Arkansas had removed its work requirements after a federal judge ruled that such policies resulted in a significant number of people losing health coverage, which goes against Medicaid’s rules. The former head of North Carolina’s Medicaid agency testified to Georgia lawmakers that Medicaid expansion would boost local economies, rather than drag down state budgets, as many conservatives fear.

Last spring, a bipartisan group of Georgia lawmakers introduced bills in both the House and Senate to allow Medicaid expansion and let Pathways sink into oblivion.

“What we’re doing so far just hasn’t seemed to work. And so, at some point, we’ve got to be open to more ideas,” Georgia state Sen. Matt Brass, a Republican from Newnan and co-sponsor of the bill, said during a committee hearing at the time.

But the measure never made it to a full vote in either chamber.

Kemp quashed the rebellion after his allies in the Legislature argued that Pathways needed more time to prove itself. Georgia awarded Deloitte a $10.7 million advertising contract last summer to create television, radio and social media spots encouraging enrollment and to tout the program at community events around the state.

As a new legislative session is underway, no bill to abandon Pathways in favor of expanding Medicaid has emerged.

“We are focused on Pathways,” said state Rep. Lee Hawkins, a Republican dentist who represents the rural constituency of Gainesville. “We are going to build on what we’ve got and focus on making it better.”

by Peter Elkind

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Even as he has vowed to eliminate “every dollar of waste, fraud, and abuse across the federal budget and operations,” the new acting administrator of the General Services Administration, Stephen Ehikian, has appointed a senior adviser whose firm used to specialize in tax transactions that a bipartisan Senate committee excoriated and that the IRS branded as “abusive” and among “the worst of the worst tax scams.” The adviser has been battling the tax agency in court over $4 billion in disallowed deductions for thousands of his clients.

The GSA, the federal agency responsible for managing the government’s land and property, will now be taking advice from Frank Schuler IV, the 57-year-old co-founder and longtime president of Ornstein-Schuler, an Atlanta-based real estate investment company. Schuler’s firm was for years among the most prolific promoters of tax-shelter deals known as “syndicated conservation easements.”

Schuler and his colleagues exploited a tax deduction that was created to reward landowners who give up development rights for their acreage, usually by donating those rights to a nonprofit land trust. When used as intended, conservation easements can preserve pristine land, sometimes as a park that the public can use, and reward the land donor with a charitable tax deduction.

But middlemen like Schuler’s firm turned the tax provision into a highly profitable business, packaging easements into what were essentially outsized tax deductions for purchase. After snatching up a cheap piece of vacant land, Schuler and others typically hired a private appraiser willing to declare that the property had huge untapped development value — that it was suited to become anything from a gravel mine to a luxury resort — and was worth many times its purchase price. They then sold stakes in the easement donation to rich individuals, who claimed wildly inflated tax deductions based on the appraisal, cutting their taxes by twice as much as they’d invested. ProPublica first began investigating the syndicated easement business, which has cost the government tens of billions in tax revenue, back in 2017.

The IRS, the Justice Department and Congress struggled for years, through public warnings, hundreds of audits, tax court cases and criminal prosecutions, to shut down the scheme. Those efforts were countered by $11 million in lobbying expenditures from the promoters and the creation of a Washington-based trade group, called Partnership for Conservation, which Schuler founded. Syndication advocates pressed Congress to defund the IRS crackdown.

In 2020, the Senate Finance Committee released a bipartisan investigative report on the transactions. (Schuler was one of six people subpoenaed by the committee to provide information.) The report, which detailed Ornstein-Schuler’s practices, described syndicated easements as a “dollar machine” for wealthy taxpayers, saving them two dollars in taxes for every dollar they put in, “with promoters pocketing millions of dollars in fees for organizing the deals.” The practice was finally curbed through legislation passed in late 2022, but it remains on the IRS’ “Dirty Dozen” list of “bogus tax avoidance strategies.”

“This is someone who made his money by ripping off American taxpayers and who shouldn’t come anywhere near a position of authority over tax dollars,” commented Sen. Ron Wyden, the Oregon Democrat who helped oversee the Senate investigation, in a written statement after being told about Schuler’s appointment. “He’ll fit right in with the Trump administration.”

Schuler’s exact role in the government is unclear. A GSA staffer said that he was present on a recent 15-minute video “check-in” conducted by Nate Cavanaugh, a 28-year-old who ProPublica has identified as being part of Elon Musk’s DOGE team. Cavanaugh introduced Schuler, who said little, as “my colleague Frank.”

Schuler’s photo and contact information were also listed last week in the agency’s internal staff directory shortly after his profile disappeared from the Ornstein-Schuler website. But it’s unknown whether he’s a paid government employee or a volunteer associated with Elon Musk’s DOGE effort. Schuler and Matt Ornstein did not respond to calls, messages and emails seeking comment. The GSA and Ehikian did not respond to emails sent to the agency’s press office.

Frank Schuler (Ornstein-Schuler website)

In the past, Schuler has described his tax transactions as legitimate and well intentioned. In a 2017 interview with ProPublica, he said his entry into the business of syndicating easements was the result of a personal epiphany sparked when his toddler son compared the paving of a residential development to pollution. As Schuler described it, “The importance of conserving land for him and future generations really pushed me to this point. … That’s why today I’m so passionate about conservation.”

Ornstein-Schuler dropped out of the syndicated-easement business in 2019, citing “recent developments and the uncertainty related to the conservation and gifting of property.” The firm turned to other real estate and tax realms, including launching a new division to buy and sell Georgia state film tax credits. Schuler also reportedly earned a credit as an executive producer on a film in which Mira Sorvino played an AI home security system. (Ornstein, who’s still CEO of Ornstein-Schuler, also co-founded a private equity firm, whose holdings include a chain of dental offices and a chain of car washes.)

But the legal warfare over Ornstein-Schuler’s tax-avoidance business continues today. According to a recent IRS filing, the firm has filed more than 100 tax court cases involving its transactions, contesting more than $4 billion in disallowed charitable deductions from some 2,000 investors. Many of the cases are still pending. Ornstein-Schuler has made long-running efforts to reach a global settlement with the IRS; another filing includes an August 2022 letter from one of its law firms asserting that such an agreement would clear the way for collection of $1.5 billion in taxes and would personally cost Schuler and his partner approximately $150 million in additional taxes, interest and penalties.

A tax court decision handed down last year resolved the first of Schuler’s cases to actually go to trial, involving multiple conservation easements from 2014 on 4,607 acres in rural Alabama. The promoters claimed that the potential for sand and gravel mining justified a total of $187 million in charitable deductions. Investor promotional materials, evidence showed, projected $200,000 in tax savings for every $100,000 invested. The decision, which resolved 13 linked cases involving the property, backed the IRS, disallowing about $180 million of the $187 million in write-offs and imposing 40% “gross valuation misstatement” penalties on most of the disallowed amounts. The judge found that partnerships promoted by Schuler had claimed deductions as high as $50,000 an acre on land that had been purchased less than a year earlier for $2,200 an acre.

In his opinion, Albert Lauber, a senior judge in U.S. Tax Court, pointedly noted how Ornstein-Schuler’s standard pitch of promising investors $2 in tax savings for every $1 they invested assumed he’d obtain a sky-high property appraisal, generating a profitable investor write-off. “When asked at trial how he could have posited in advance a deduction-to-investment ratio of $4.389 to $1, before any appraisals had been performed, Mr. Schuler said that appraisals were basically irrelevant to the tax write-off they were offering,” the judge wrote. He called the land values Schuler’s firm had claimed “wholly implausible.”

“We were making plenty of money,” Schuler testified during the case. “The investors were doing well. And we felt that it was great that land was being conserved.”

Ornstein-Schuler is also among the defendants in a federal class-action suit in Georgia filed by three investors. The suit claims Ornstein-Schuler collaborated with lawyers, accountants, appraisers and others to collect millions in fees through a “fraudulent scheme” that deployed “a mountain of misrepresentations and omissions” to promote invalid easement deductions based on “egregiously inflated appraisals.” Ornstein-Schuler and other defendants have filed a joint motion to dismiss the case, asserting that the risks of the easement investments were fully disclosed and they misled no one.

Ornstein-Schuler has also gone on the attack. In December 2023, it sued the IRS, claiming that the agency had failed to respond to a Freedom of Information Act request for an array of agency documents. The firm complained of “IRS abuses relating to its targeting of conservation easement transactions,” which it said were part of a “well-publicized campaign.” Among the requested documents: “all records of communications between IRS employees and members of the news media,” including ProPublica reporter Peter Elkind, Wall Street Journal reporter Richard Rubin and Forbes reporter Peter Reilly, regarding conservation easements. Rod Rosenstein, a deputy U.S. attorney general during the first Trump administration, is representing Ornstein-Schuler in the case.

Doris Burke contributed research. Avi Asher-Schapiro contributed reporting.

by Anna Clark

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up for Dispatches, a newsletter that spotlights wrongdoing around the country, to receive our stories in your inbox every week.

It wasn’t about playing God. Rather, it was a better way to feed the world.

That’s how a biotech company called AquaBounty described its AquAdvantage salmon, the first genetically modified animal approved by the federal government for human consumption. By adding a gene from Chinook salmon to Atlantic salmon and using DNA sequences from eel-like ocean pout as a “growth promoter,” the company said its salmon could grow twice as fast.

The silvery superfish is indistinguishable from other Atlantic salmon, the company said, but, with freshwater tanks and less feed, it can reach market size sooner than its conventional cousins. No ocean required.

But it was all easier said than done. After decades of backlash, boycotts and persistent financial losses, on top of the regulatory slog, AquaBounty hooked its hopes for the future on a village in Ohio with an enterprising name — Pioneer — and an accommodating mayor, Ed Kidston.

Eventually, it fell apart. And the village that hoped for a transformative industry is carrying the cost.

Pioneer, population 1,410, is just south of the Michigan border, in a county where fields of corn are cut by spear-straight country roads. AquaBounty promised 112 jobs, plus resources for schools and infrastructure.

And it promised something different from the metal stamping plant or Menards distribution center that opened in the area in past years. Researchers and advocates have long suggested that the Rust Belt use its water wealth to build a “blue economy.” AquaBounty seemed like a forward-looking prospect.

Although the company never made a profit in its 30-some years of existence, public officials rolled out the red carpet.

AquaBounty got a state permit to withdraw up to 5.25 million gallons of groundwater per day to operate the fish farm. JobsOhio, the state’s private economic development arm, executed an agreement to grant it $1 million. The Toledo-Lucas County Port Authority authorized up to $425 million in revenue bonds.

An enterprise zone relieved AquaBounty of 15 years of property taxes. With the help of state dollars, Pioneer extended a road, a project estimated at $1.7 million.

Pioneer, which operates its own electric system, borrowed $3.95 million on the municipal debt market — later upped to $5 million — for a new substation project. The substation would provide a boost to AquaBounty’s energy needs.

And before AquaBounty’s plans were public knowledge, a company owned by Kidston purchased land for $600,000. He later flipped it to AquaBounty for nearly $2.1 million.

The mayor did well. Pioneer and the state did not.

Nearly three years after AquaBounty broke ground, there are no fancy fish tanks. No designer fish. No new jobs. Even with so much public assistance, it’s not clear if AquaBounty will ever finish building the farm. This month, it auctioned off “new” and “unused” equipment from the site.

Neither Kidston, who has said that he was merely trying to help the town, nor AquaBounty responded to questions for this story.

Locals are left to grapple with a partially developed site, a short-circuited growth strategy and questions about whether the project was ever viable.

The saga “could potentially send a message that it’s difficult to develop in Williams County,” said Ashley Epling, who took the helm of the county’s economic development organization after AquaBounty arrived in town.

Todd Roth, who oversees the Williams County engineering department, said the promise of development can require tradeoffs that compel public officials to make difficult decisions.

“How far do we go on hope?” he asked.

Residents of Pioneer, Ohio, were promised jobs and economic development that have yet to materialize. (Nick Hagen for ProPublica) Panama to Ohio

In the highlands of Panama, tucked behind padlocked gates and barbed wire, AquaBounty wanted to prove what was possible. There, in 2008, it opened a demonstration facility — a venture that “no one would ever think that anyone in their right mind would do,” said Ron Stotish, former president and chief executive officer.

“We built a small farm basically by hand, with local labor and this local trout farmer,” Stotish said. A visiting reporter told television viewers that it had “shades of Jurassic Park.”

Without precedent for AquAdvantage salmon, the Food and Drug Administration reviewed it as a new animal drug. Inspectors visited AquaBounty’s Panama facility and its hatchery on Canada’s Prince Edward Island. They assessed environmental risks, like transgenic fish escaping and interfering with salmon in the wild. The company said it designed AquAdvantage salmon as sterile females so they won’t reproduce.

Journalists and activists scrutinized AquaBounty too, reporting on a mishap in Panama that cost the company its first batch of commercial-sized fish and supermarkets pledging that they wouldn’t sell bioengineered salmon.

With the fish not even for sale yet, AquaBounty patched together financing to stay afloat, including from a former Soviet oligarch.

Conventional Atlantic salmon is raised in tanks at an AquaBounty facility in Albany, Indiana, in 2019. (Jordan Kartholl/USA Today Network/Imagn Images)

Federal approval came in 2015 — for the Panamanian and Canadian sites only. New facilities needed individual approval. Meanwhile, a coalition of environmental and industry groups, including the Center for Food Safety, filed a lawsuit challenging the FDA’s review. In a case that would take years to resolve, they argued that the agency failed to fully assess the risk of AquAdvantage salmon escaping into the wild.

And genetically modified salmon had an influential foe: U.S. Sen. Lisa Murkowski of Alaska. Following FDA approval, she inserted language into a spending bill that stymied the introduction or distribution of genetically modified fish until labeling guidelines were in place. In comparison to what she dubbed “frankenfish,” she noted that Alaskan fisheries “are world-renowned for their high-quality, productivity, and sustainability.”

Momentum shifted after Canada approved AquAdvantage salmon and the U.S. developed a labeling policy. By 2019, reporters and at least one politician were touring AquaBounty’s small salmon farm in Indiana.

The future seemed bright when Stotish left the company at the end of the year. “I’m the guy that won the Super Bowl and then walked out the door,” he said.

AquaBounty’s search for a place to build its first large-scale production facility brought it to the northwest corner of Ohio, where, according to an account written by Kidston, it considered property he owned. He didn’t name the prospective developer in his letter to a state commission, but details correspond almost exactly to AquaBounty.

The company decided to pursue its project elsewhere, Kidston wrote — paralleling AquaBounty’s announcement about a site in Kentucky — but it retained his business, Artesian of Pioneer, to evaluate the water supply at the site it was considering in another state. The company found the water characteristics unsuitable for its purpose, he wrote.

AquaBounty eventually decided to build on property that it bought from Kidston’s company. At the 2022 groundbreaking, Aquabounty President and CEO Sylvia Wulf was enthusiastic about the company’s future in Ohio. “We thought that Pioneer’s the kind of community that would be receptive,” she said in a newscast.

Pioneer would set a template, the company later proclaimed. AquaBounty would build new farms every two years or so. It eyed global markets: Brazil, Argentina, Israel, China.

Ohio was just the beginning.

Pioneer Mayor Ed Kidston during a Village Council meeting on Jan. 13 (Nick Hagen for ProPublica) The Mayor’s Land, a Town’s Hopes

On a cold night in January 2021, the Madison Township trustees gathered in a truck bay. Kidston, mayor of the village encircled by the township, had requested a special meeting.

First elected in 1995, he’s believed to be Pioneer’s longest-serving mayor, exceeding another Mayor Kidston — his father, Bruce. He has trim white hair, a ruddy complexion and a prominent presence. At last year’s Christmas tree lighting, he dressed as an ornamented evergreen, wearing a crown of lights.

People protest against extracting local groundwater and selling it to Toledo suburbs, before a Pioneer Village Council meeting in 2018. (Lori King/The Blade)

His presence stretches into property and business holdings, including Artesian of Pioneer, founded by his parents, and now specializing in water supply and wastewater treatment. It dips below ground, too. He sparked protests in 2018 and 2019 when he tried to extract and sell up to 14 million gallons a day of groundwater to the Toledo suburbs, which many feared would deplete the local aquifer. Kidston defended the effort, but ultimately the suburbs went with another water plan.

In the truck bay, the topic was a proposal to allow Pioneer to annex about 160 acres from Madison Township so that the village could spur development at its expanded industrial park. Minutes summarizing the meeting indicate that while two Pioneer council members and the Pioneer administrator were present, only Kidston spoke about the proposal with the township trustees that evening.

Kidston signed in as the mayor of Pioneer, according to the minutes and the trustee who said he recorded them. Thanks to a recent purchase, his company Kidston Consultants was one of two landowners of the site. Kidston described his interest in the annexation, what he’d like to accomplish and how development would benefit schools, according to the minutes.

When trustees worried about traffic costs, Kidston offered $5,000 for road maintenance — an annual contribution for 10 years, he indicated.

There was no vote that night. Within days, Kidston wrote an email to several officials who attended the meeting, saying that he was present that night merely as a landowner and representative of the other landowner, not as mayor.

His goal, he added in the email, has always been to ensure that everyone wins. The financial offer was to compensate the township “in exchange for a non-adversarial ‘quick’ agreement,” he wrote.

Kidston then contacted the Ohio Ethics Commission, describing his intersecting interests in a prospective development. His water business had provided services for a company that was interested in a site he’d like to have annexed by Pioneer. The company might also be interested in an ongoing business relationship. He wouldn’t participate in village decision-making about annexation or efforts to secure a tax abatement, Kidston wrote.

An attorney’s response noted that Kidston may retain the same access to governmental entities as any other citizen. But, it said, he cannot use his position as village mayor, “formally or informally,” in any matters involving the proposed annexation of the property, or to secure the annexation of the property. It also said that Kidston cannot take action as a village official “to benefit your personal financial interests or the financial interests of a company with which you have an ongoing business relationship.”

Kidston didn’t attend another special meeting about annexation, held 12 days after the first. But, according to the minutes, Kidston’s company would pay the township $50,000 if the trustees signed an annexation agreement that day. A local development official spoke on behalf of the proposal, telling trustees that she couldn’t guarantee payment from Kidston beyond that day.

The township board unanimously rejected the $50,000 offer. Two of three trustees told ProPublica they felt pressured and had concerns about the ethics of what they considered such an unusual offer, echoing remarks in the local news at the time. (The third trustee didn’t respond to inquiries from ProPublica.)

Two days later, the trustees approved a deal where Pioneer would pay the township $390.54 annually, the approximate sum the township would forgo in taxes.

Kidston Consultants purchased more than 80 acres on Jan. 22, 2021, three days before the truck bay meeting. The communities approved annexation on Feb. 8. On July 23, Kidston’s company nailed down an agreement to sell the land to AquaBounty. The profit: about $1.5 million.

News of AquaBounty’s arrival spread locally when The Bryan Times published a story a week later: “Salmon farm planned for Pioneer.” It was believed to be the largest investment ever in Williams County.

AquaBounty intended to discharge treated wastewater from its Pioneer facility into the east branch of the St. Joseph River. (Nick Hagen for ProPublica) Suddenly, an Upstream Battle

As AquaBounty made its move into Ohio, everybody seemed to get on board.

There were the JobsOhio grant and the port authority’s bond authorization. There was a 15-year property tax exemption. With assistance from state agencies, the village committed millions to developing roadway and power infrastructure that would support AquaBounty.

Some incentives were contingent. In exchange for the abatement, for example, AquaBounty agreed to maintain a certain number of jobs and donate a percentage of its savings to a county infrastructure fund and area schools.

North Central Local schools could get $750,000 a year for 15 years, Kidston estimated in news reports. Maybe even a million.

The coming jobs would have higher wages than usual for the area, a local economic development official told the county commission. They were new types of jobs, too, suitable for people with biology and chemistry degrees or research expertise.

“We both have personal experiences with people who have left our region or not worked in their field because they don’t have those types of jobs here,” she said.

Now, maybe, that’d change.

Sherry Fleming, left, at a Williams County Alliance meeting in Montpelier, Ohio. The grassroots environmental group monitors local water resources and has raised complaints about AquaBounty’s proposed aquifer usage. (Nick Hagen for ProPublica)

Besides financial and infrastructure support, AquaBounty got an unusual state permit to withdraw up to 5.25 million gallons of groundwater a day. The company planned to treat and discharge most of it into the St. Joseph River, where it would eventually flow into Lake Erie instead of replenishing the aquifer.

That instigated a backlash from people who said the plan would draw down the aquifer, thinning lakes and threatening drinking water even beyond Ohio’s borders. The Pokagon Band of Potawatomi Indians asked why AquaBounty couldn’t reuse or recirculate more of what it took, and why there wasn’t a review of the impact on wetlands. With the impact from the proposed withdrawal swelling across its border, Michigan’s environmental agency also weighed in with concerns. Sherry Fleming of Williams County Alliance, a grassroots environmental group, said that Ohio “continues to treat water as nothing more than a commodity.”

Some skeptics questioned AquaBounty’s ties to the mayor. “Mr. Kidston swears up and down that the aquifer has enough, and will always have enough water, to withstand 5.2 million gallons of withdrawal a day,” wrote a retiree with a farm to an official with the Ohio Department of Natural Resources. The mayor sold AquaBounty property and services, he said. “This man has always had a dog in this fight!”

The Aquifer Used by AquaBounty Could be Reduced by 1, 5 and 10 Feet in the Areas Surrounding Pioneer, Ohio Note: Drawdown predictions are not tied to a specific drawdown timeline. They represent the extent of drawdown predicted at the time that no further change would occur. The 5’ and 10’ predictions were created by the engineering firm Burgess & Niple on behalf of AquaBounty. The 1’ prediction was created by the Michigan Department of Environment, Great Lakes and Energy’s water use assessment staff. (Lucas Waldron/ProPublica)

Despite the opposition, the state granted the water permits, explaining that all requirements were met and certain safeguards were in place. But AquaBounty still had a problem: It didn’t have a way of moving water between its farm and the site about a mile east where it planned to withdraw and discharge it — on land owned by Kidston’s company.

Pioneer applied three times for a right-of-way permit so that AquaBounty could build pipelines across private property. The county rejected each request.

Pioneer and AquaBounty sued, arguing that the pipelines are a utility, serving the broader public good. The commission responded that pipelines between two private property owners are not a public utility, and even if they were, nothing compels commissioners to grant the right of way.

Roth, the county engineer, expressed concern at how much government support AquaBounty got before its plans were clearly viable.

They still didn’t have a way to get the water to their farm, Roth said to ProPublica, “and yet, they were starting to get money.”

Problems mounted. The Indiana farm was fined over permit violations for excess pollutants in its discharged water. Due to a ruling in the FDA lawsuit, the agency was further reviewing the salmon’s escape risk.

And expected costs in Pioneer more than doubled from initial estimates, flirting with $500 million. The bonds authorized by the port authority were never issued. (Contacted by ProPublica, an authority official wouldn’t say why.)

In June 2023, about 13 months after breaking ground, AquaBounty announced a pause on construction in Pioneer, citing “a substantial increase in its estimated cost.”

With its stock price deflated, the company was at risk of slipping off the trading market, so it performed a reverse stock split. It sold the Indiana farm for less than it paid, with certain equipment purchased for Pioneer included. It twice replaced the CEO, put one Canadian facility up for sale and announced it was winding down another — its only remaining active farm.

Along a smooth new road, the Pioneer site now sits frozen, roughly 30% complete, according to a company estimate.

Pioneer officials said in a statement to ProPublica that the village has not been advised that AquaBounty has terminated its project. They emphasized that the court dispute over the pipeline was still not settled and that an initial ruling was in the village’s favor. On Friday, a judge ruled against the county’s appeal.

AquaBounty’s interim CEO said in December that the company would “assess alternatives for our Ohio farm project.” To investors, it mentioned higher costs due to inflation.

The outlook is bleak. While AquaBounty once estimated that it would be operational by now, with salmon ready for market in 2025, there was instead an online auction for its “new unused” assets earlier this month: tanks, filters, pumps, even a 200,000-square-foot pre-engineered metal building.

A sign points toward AquaBounty’s stalled construction site in Pioneer. (First image: Nick Hagen for ProPublica. Second image: John D’Angelo for ProPublica.) An Uncertain Future

In Pioneer and beyond, there has yet to be a full public accounting of what went wrong.

Not every development can be expected to make it, even with incentives, said Greg LeRoy, executive director of the nonprofit Good Jobs First, which scrutinizes public subsidies in economic development. But, he said, it’s important to vet companies with unproven business plans before spending public resources on their behalf — and to have a transparent process before deals are approved.

“If you’re taking on debt or giving them equity, or you’re laying out cash for utilities,” LeRoy said, “those are risky things.”

JobsOhio’s million-dollar grant depended on the creation of 112 jobs, $222 million in capital investment and a payroll of more than $5.4 million by the end of 2026, according to a spokesperson.

When a company fails to meet grant commitments, he said, “we will claw back our dollars so they can be used for future economic development projects to benefit Ohioans.”

As a private entity with a funding mechanism set up by the state, JobsOhio reveals few details about how it spends its money — a lack of transparency that has long been criticized. The spokesperson didn’t respond to a question about whether AquaBounty received some or all of its grant money.

AquaBounty was expected to pay Pioneer millions of dollars a year for the electricity it used and reimburse it for certain costs associated with building the substation. The $5 million note matures in November. In response to ProPublica’s inquiries about the substation, the village said it will pay any debt that it owes, “even if AquaBounty should cease to exist.” According to the state treasurer’s office, the village, which has about 800 electricity customers, is expected to use its electric revenue to pay the debt.

Local schools also face uncertainty. The district has long struggled with finances, and AquaBounty’s contributions were presented as a salve. But that funding hasn’t materialized. Last year, the district twice turned to taxpayers for help, seeking support for basic needs such as utilities, transportation, staffing and custodial supplies.

At both the March and November ballots, voters rejected it.

The district hasn’t responded to ProPublica’s questions. School board President Kati Burt, Kidston’s daughter, declined to comment.

Mark Schmucker, a Madison Township trustee and former board president, marvels at how officials championed AquaBounty as “the biggest infrastructure project in Northwest Ohio,” despite its shaky history.

“They were going to donate a million to the school every year,” he said. “How can they donate a million to the school when they never made a million in a year? Or showed a profit in 30 years?”

Epling, who has led the county’s economic development agency since 2023, said that the government incentives for the company “were publicly documented and structured with clear performance-based contingencies.”

She added, “Moving forward, my goal is to ensure that economic development efforts are well vetted, clearly communicated and beneficial to the community.”

Late last year, an unexpected provision showed up in a massive bill introduced in the Ohio Legislature. It exempted village mayors and other executive officers from key ethical requirements when they do business with the communities they represent. One of the bill’s sponsors said that other ethics laws would still apply.

Kidston’s company, Artesian of Pioneer, employed the lobbyist behind the provision, according to the bill sponsor and disclosure records.

The Legislature passed the bill. But Gov. Mike DeWine vetoed it, citing opposition from the ethics commission.

The change, according to the commission, would “invite misuse of taxpayer money.”

by Brett Murphy and Anna Maria Barry-Jester

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Before Peter Marocco was selected to dismantle America’s entire foreign aid sector on behalf of President Donald Trump, he was an official with the State Department on a diplomatic mission.

In 2018, during Trump’s first term, Marocco was a senior political appointee tasked with promoting stability in areas with armed conflict. That summer, he made a two-week trip to the Balkans, visiting several Eastern European countries in what was advertised as an effort to “counter violent extremism” and “strengthen inter-religious dialogue.”

At the time, the U.S. was trying to maintain a fragile peace agreement it had helped broker two decades earlier in the region. The Balkans are still living in the shadows of the Bosnian war, a 1990s conflict between the region’s disparate ethno-religious groups that led to the deaths of an estimated 100,000 people, including thousands of Muslim civilians who were massacred by Serb forces.

To avoid compromising such delicate international relations, American diplomatic work is carefully prescribed, even down to the people U.S. officials meet — and those they should avoid, like politicians under Treasury Department sanctions for corruption or war crimes.

On a 2018 visit to the Balkans, Marocco secretly met with officials whom the American government had determined were off-limits without the highest levels of approval: ethnonationalist Bosnian Serb separatist leaders. Those politicians had been working for years to defy their nation’s constitution and undermine the American-backed peace deal in an effort to promote a Christian Bosnian Serb state. ProPublica pieced the episode together from interviews with seven current and former U.S. officials.

Among those in attendance was Milorad Dodik, according to one of the officials. The leader of a political region within the broader nation, Dodik was at the time under U.S. sanctions by the Trump administration for actively obstructing American efforts to prevent more bloodshed. (The officials interviewed for this article requested anonymity for fear of retaliation from the administration.)

Dodik has since called himself “pro-Russian, anti-Western and anti-American” in a meeting with Russian President Vladimir Putin and is currently under new sanctions for corruption charges. He has also vowed to tear the country apart rather than allow the U.S. to unify it.

Maureen Cormack, then the American ambassador to Bosnia and Herzegovina, discovered the meeting had taken place and confronted Marocco in the embassy at the end of his visit. Marocco initially demurred, an official said, before finally acknowledging the gathering. Cormack was furious, issuing a sharp rebuke, the official said. Cormack didn’t respond to repeated requests for comment.

Marocco left the country soon after. A year later, he was no longer working at the State Department.

What he had discussed with the Bosnian separatists is not clear. But the meeting itself provided legitimacy to far-right politicians pushing for a Christian state and undermined U.S. foreign policy, experts and officials said.

“He reinforced a whole political trajectory that is antithetical to what the U.S. is trying to do,” one U.S. official told ProPublica, “which is supporting a peace agreement.”

After the State Department, the Trump administration sent Marocco to a senior post at the U.S. Agency for International Development, where he attempted to delay or halt dozens of programs — including those that benefited Bosnia and Herzegovina’s unified government — and reinvent the agency to better align with his version of U.S. foreign policy. That agenda, former colleagues told ProPublica, was overtly militaristic and Christian nationalist. The complaints about Marocco alarmed agency leaders so much that they significantly curtailed his duties in the waning months of the administration.

Marocco’s turbulent tenure during the last Trump administration sheds light on his current efforts to destroy the American foreign aid system from the inside out. Current and former officials see it as a campaign of retribution against those who opposed his earlier work, as well as an opportunity to fulfill his most controversial policies by sidelining bureaucrats who get in his way.

Marocco is now the director for foreign assistance at the State Department and has been delegated the power of deputy administrator of USAID — helping lead the two agencies that previously rejected him. And unlike last time, Marocco is now without strictures and answers to few in the executive branch besides Trump himself.

Immediately after the inauguration last month, Marocco drafted the order shutting down all of USAID’s programs and freezing foreign aid. He’s led the efforts to place nearly all of the agency’s staff on administrative leave, though the courts have temporarily lifted many of those. Much of USAID’s work has not resumed, according to interviews with dozens of government employees and nongovernmental organizations, despite the State Department’s claim that waivers allow work involving “core lifesaving medicine, medical services, food, shelter and substance assistance” to continue.

“It’s an exact repeat of what he did but at scale,” said a former senior official at USAID who worked alongside Marocco during his previous stint in government. “He had no problem stopping foreign assistance. … He came in, he said, ‘We’re going to stop all programming, stop everything going on in the field.’”

Marocco and the State Department did not respond to a detailed list of questions about the meeting or his views. Dodik did not respond either.

Marocco’s meeting was not the only diplomatic misstep in his tumultuous career.

During a trip to Serbia, Marocco on his own volition invited the country’s president, Aleksandar Vučić, to visit Srebrenica, where more than 8,000 Muslims were killed during the Bosnian genocide, according to two officials familiar with the incident. Considered highly inappropriate — Bosnian Serb and Serbian paramilitary forces had massacred the people buried there — the invitation had not been approved by the U.S. ambassador.

In 2020, the Trump administration appointed Marocco to USAID, the world’s largest foreign aid organization. As assistant to the administrator in charge of the Bureau for Conflict Prevention and Stabilization, he bewildered staff by attempting to reorient the work exclusively toward his brand of U.S. national security interests, according to interviews with his former subordinates and superiors, as well as an official complaint, known as a dissent cable, lodged against him within three months after he’d joined. Some said he frequently favored programs that benefited Christian minorities abroad.

Marocco told subordinates that he disagreed with much of USAID’s traditional “soft power” approach toward diplomacy and ordered wide-ranging but vague reviews of the agency’s programs, insisting that he personally approve any expenses over $10,000, the officials said.

Those who worked alongside him throughout government were particularly alarmed by comments he had made during private conversations when discussing American foreign policy. Those officials told ProPublica that Marocco has questioned whether USAID should be funding programs to combat racist nationalism and hate speech abroad.

While he was at the agency, he frequently expressed wanting to cut programs he didn’t like or understand, his former colleagues said. In the internal cable filed to leaders of the agency, they accused Marocco of trying to withhold congressionally approved funds slated for most of the programs supporting democracy and fair elections in Bosnia and Herzegovina and redirect that money toward addressing Islamic extremism.

That cable warns that “operational capacity and strategic efficacy have been and continue to be rapidly degraded” by Marocco, and that the programs risk being irreversibly damaged “at significant financial cost to the American taxpayer.”

Diplomats said his efforts undermined U.S. strategic interests in the region and, by favoring one religion over another, likely ran afoul of the Constitution’s religious freedom clause, according to the cable. They were concerned that his actions “risk worsening BiH’s tense sectarian tensions by affirming one side’s narrative while stigmatizing the other,” they wrote in the cable, using the abbreviation for Bosnia and Herzegovina. Bosnia is about 50% Muslim with large minority populations of Serb Orthodox Christians and Roman Catholic Croats.

“He had it in for Bosnia,” a former official at USAID said, “and I didn’t know why at the time.”

Marocco’s short time at USAID was the last in a stretch of four jobs at four agencies, including the Pentagon and the Department of Commerce.

Marocco was next seen inside the U.S. Capitol during the Jan. 6, 2021, insurrection, according to footage gathered and analyzed by an online group. He was not charged with a crime and has not responded to multiple requests for comment about his role that day, though he has called the accusations “[p]etty smear tactics and desperate personal attacks by politicians with no solutions.”

Experts in and outside government now consider Marocco to be orchestrating the new Trump administration’s foreign aid policy largely by himself. His official position is director of foreign assistance at the State Department, and the powers of the deputy administrator of USAID have been delegated to him as well. “Right now he is the most important person at the State Department,” one official observed.

Marocco’s rapid-fire assault on USAID has come under legal scrutiny in recent days after dozens of employees and organizations filed lawsuits, seeking to reverse his most consequential changes. Judges have at least temporarily reined in the broad use of administrative leave for thousands of employees across the agency and told the agency to reinstate programs that were funded and approved prior to Trump’s inauguration.

Marocco has defended his sweeping takedown as a necessary measure to root out government waste and support Trump’s agenda to make America safer and more prosperous.

“His thinking was that the people in government were not abiding by the right theory,” another official told ProPublica. “Well we know now how far he’s willing to go.”

Pratheek Rebala and Alex Mierjeski contributed research.

Do you have any information about government officials leading U.S. foreign policy? If so, please reach out to Brett Murphy on Signal at 508-523-5195 or Anna Maria Barry-Jester on Signal at 408-504-8131.

by Kyle Hopkins, Anchorage Daily News

This article was produced for ProPublica’s Local Reporting Network in partnership with the Anchorage Daily News. Sign up for Dispatches to get stories like this one as soon as they are published.

The chief justice of the Alaska Supreme Court told state lawmakers this week that the court system is taking steps to reduce the amount of time it takes criminal cases to reach trial, a problem highlighted by a recent ProPublica and Anchorage Daily News investigation.

In an annual State of the Judiciary speech to legislators Wednesday at the Capitol in Juneau, Chief Justice Susan M. Carney said the court system has increased training for judges, created new policies on postponements and authorized overtime pay. She noted that the court system’s mission includes deciding cases “expeditiously and with integrity.”

“You are probably aware that we are not meeting expectations — our own or Alaskans’ — about the expeditious part of that mission,” Carney said.

Noting “recent media accounts” of extreme delays, Carney said the state is gaining ground and that resolving the problem is “our No. 1 priority.”

“We must, and we will, improve how we handle criminal cases to prevent that kind of delay,” Carney said.

The Daily News and ProPublica reported in January that the most serious felony cases in Alaska can take five, seven or even 10 years to reach trial as judges approve dozens of delays. These delays might be requested because defense attorneys are waiting for prosecutors to share evidence or because attorneys have high caseloads to juggle, or even as a tactic to weaken the prosecution’s case with the passage of time.

The category of cases that ProPublica and the Daily News examined, the most serious felonies such as murders and violent sexual assaults, took the judicial system a median of three years to complete in 2023, a threefold increase from 2013.

The newsrooms identified one case that judges described as one of the most “horrendous” sexual assaults they had ever seen and that has been delayed at least 74 times over the course of 10 years.

The Alaska judicial system and lawmakers were aware of serious pretrial delays long before COVID-19 disrupted the courts, particularly in Anchorage. In 2009, a report by the National Center for State Courts noted that the time to resolve felony criminal cases in Anchorage had increased nearly 400% over the prior decade.

While acknowledging the long delays described in news reports and their impact on victims and defendants in major felonies, Carney told legislators that less serious criminal cases — which are most cases in the system — do not take as long to resolve.

“I do this not to justify those extraordinarily delayed cases, but I do want to provide a bigger picture,” said Carney, a Fairbanks judge who was appointed to the Supreme Court in 2016 and became the chief justice this year.

The median time to close misdemeanor cases is six months or shorter, Carney said. Less serious felony cases such as vehicle theft and certain assault charges are resolved within a median of six months, she said. Class A felonies, which include some sexual assaults, manslaughter and some drug charges, take a median of 13 months.

Carney also noted that only about 3% of criminal cases go to trial. Many are resolved when the defendant agrees to plead guilty to reduced charges, rather than take the chance of being found guilty by a jury, or when prosecutors drop the charges.

Carney told legislators that judges have created new limits on the number of times a case can be delayed and on the duration of the delays, and that judges devoted one-third of their annual conference to training on how to reduce the number of pending cases.

More cases are now being closed than are being opened, and the number of open cases last month was down by one-third from a year before, Carney said, bringing the number of open criminal cases to its lowest since 2018.

“So we are making progress,” said Carney, who spent nearly three decades as a lawyer for the Alaska Public Defender Agency and Office of Public Advocacy.

She did not provide caseload figures specifically for unclassified felonies, the category of serious crimes that ProPublica and the Daily News focused on.

Alaska’s sluggish justice system has created palpable impacts on crime victims, defendants and the community.

A Daily News and ProPublica report in October found the city of Anchorage dismissed hundreds of criminal cases in 2024 because it didn’t have enough prosecutors to meet speedy trial deadlines. Dismissed cases included charges of domestic violence assault and child abuse.

State prosecutors have responded to that investigation by offering added staff to help the city keep cases moving.

by Mark Olalde

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up for Dispatches, a newsletter that spotlights wrongdoing around the country, to receive our stories in your inbox every week.

President Donald Trump and Elon Musk’s efforts to shrink the federal government, launched as the deadly Palisades and Eaton fires burned across Los Angeles, have left the country’s wildland firefighting force unprepared for the rapidly approaching wildfire season.

The administration has frozen funds, including money appropriated by Congress, and issued a deluge of orders eliminating federal employees, which has thrown agencies tasked with battling blazes into disarray as individual offices and managers struggle to interpret the directives. The uncertainty has limited training and postponed work to reduce flammable vegetation in areas vulnerable to wildfire. It has also left some firefighters with little choice but to leave the force, their colleagues said.

ProPublica spoke to a dozen firefighters and others who assist with the federal wildfire response across the country and across agencies. They described a range of immediate impacts on a workforce that was already stressed by budgetary woes predating the Trump administration. Hiring of some seasonal workers has stalled. Money for partner nonprofits that assist with fuel-reduction projects has been frozen. And crews that had traveled to support prescribed burns in Florida were turned back, while those assisting with wildfire cleanup in California faced confusion over how long they would be allowed to do that work.

“Uncertainty is at an all-time high. Morale is at an all-time low,” one federal wildland firefighter said. Multiple federal employees asked not to be named because of their fear of retribution from the White House.

In two separate lawsuits, judges issued temporary restraining orders against aspects of the White House’s broad freeze of federal spending, although the administration continues arguing that it has the authority to halt the flow of money. Some funding freezes appear to be thawing, but projects and hiring have already been severely impacted.

In one case, the freeze to Bipartisan Infrastructure Law and Inflation Reduction Act funding, combined with orders limiting travel by some federal employees, forced the National Park Service to cancel a massive prescribed burn scheduled for January and February in Everglades National Park and Big Cypress National Preserve, ProPublica has confirmed. Prescribed burns help prevent catastrophic wildfires by clearing vegetation that serves as fuel, and the meticulously planned 151,434-acre Florida fire — to cover more than six times the land area of nearby Miami — was also meant to protect a Native American reservation and improve ecological biodiversity.

“We will be more vulnerable to a catastrophic fire in the future as a result of not being able to do the prescribed burns,” a federal firefighter with direct knowledge of the situation said.

The National Park Service gave conflicting explanations for the cancellation, suggesting in a news release that weather was the cause while internally acknowledging it was due to funding, the firefighter said.

This comes as the U.S. Forest Service, which employs more than 10,000 firefighters, has been wracked by long-running deficits and a lack of support for the physical and mental health stresses inherent in the job. Federal firefighters told ProPublica they were happy to do a dangerous job, but the administration’s actions have added to uncertainty surrounding their often-seasonal employment.

A spokesperson for the Forest Service said in a statement that a major prescribed burn training program was proceeding as planned and “active management, including hazardous fuels reduction and prescribed fires, continue under other funding authorities.” The newly confirmed secretary of the U.S. Department of Agriculture will review the remainder of the agency’s spending, according to the statement. The Forest Service did not say specifically what funding the agency has available or when the freezes might be lifted.

“Protecting the people and communities we serve, as well as the infrastructure, businesses, and resources they depend on to grow and thrive, remains a top priority,” the statement said.

The White House did not respond to a request for comment.

The reality is supervisors are guessing how to interpret the White House’s commands, and a “huge leadership vacuum” has resulted in conflicting orders, according to Ben McLane, captain of a federal handcrew, which constructs fireline around an active blaze.

A national firefighting leadership training program that McLane was set to attend was canceled on short notice, he said. McLane acknowledged that federal firefighting agencies need a major overhaul, noting that his crew was downsized 30% by pre-Trump administration cuts. But the current confusion could further impact public safety because of the lack of clear leadership and the disrupted preparations for wildfire season.

“Wildfire doesn’t care about our bureaucratic calendar,” McLane said.

“It’s Always Cheaper to Do a Prescribed Burn”

The threat of wildfire is year-round in the Southeast and spreads west and north as snow melts and temperatures rise. In the West, fire season generally starts in the spring, although climate change has extended the season by more than two months over the past few decades, according to the Department of Agriculture.

Preparations for fire season begin each year in the Southeast, where mild winters allow crews to carry out prescribed burns while snow blankets the West. In a typical year, crews fly in from across the country to assist in containing the planned fires and to train for battling wildfires. The Southeast typically accounts for two-thirds of the acreage treated with federal prescribed burns annually, according to data from the Coalition of Prescribed Fire Councils and the National Association of State Foresters.

The controlled burns serve several purposes: minimizing the size of naturally occurring wildfires by reducing available fuel; promoting biodiversity by creating varied habitat and recycling nutrients into the soil; and providing an opportunity for training in a controlled setting.

Any delays this time of year set preparations back, and numerous firefighters raised the alarm about the canceled burn in the Everglades.

Crews had arrived for three-week assignments to assist with the burn, which was planned alongside the Miccosukee Tribe of Indians of Florida and was to remove fuel near the Miccosukee Indian Village. The goal, according to a National Park Service press release, was to “protect the Tribal Community from wildfire, enhance landscape resiliency, aid in ecosystem restoration, protect cultural values and improve firefighter and public safety.”

But some crews were told to head home early, according to a firefighter with direct knowledge of the situation. “We do not have the resources to control this burn,” the firefighter said.

A National Park Service representative confirmed the burn was canceled but did not answer questions about the reason for the cancellation.

Internally, however, the agency acknowledged that gaps in funding and staffing forced it to abandon the plan until at least the next fiscal year. The agency also told staff that congressionally appropriated funds were frozen, some hiring was halted and overtime was strictly limited, the firefighter said.

Prescribed burns across the country that require travel or overtime pay have also been limited. Nonprofits that manage complementary burns, adding to the acreage treated, have also seen their federal funding frozen. And some state agencies have been locked out of these funds.

In Montana, for instance, the state’s Department of Natural Resources and Conservation uses federal grants to assist communities in becoming more resistant to wildfires. That money was recently cut off, according to emails reviewed by ProPublica. (The department did not immediately respond to a request for comment.)

“What do they want, more fires?” Mary Louise Knapp, a Montana resident who has worked with the department on fire resiliency in her own neighborhood, said of the Trump administration.

Any short-term savings from the funding freeze, one federal firefighter said, are likely to be eclipsed by the vast resources needed to combat even larger wildfires. “It’s always cheaper to do a prescribed burn,” the firefighter said.

“They Still Don’t Have the Budget Under Control”

Even before Trump’s second inauguration, the federal firefighting force faced severe challenges.

The Government Accountability Office, in a 2023 study, found that low pay, which “does not reflect the risk or physical demands of the work,” made hiring and retaining firefighters difficult. The study also pointed to well-documented mental health and work-life balance issues across the Forest Service and the four agencies within the U.S. Department of the Interior that constitute the then-18,700-person strong force.

Then came the Forest Service’s attempts last year to close a budget shortfall worth hundreds of millions of dollars. The agency stopped hiring seasonal workers outside the fire program.

“The reality’s setting in — they still don’t have the budget under control,” one Forest Service firefighter said. Even though firefighting positions were exempted, personnel who do other jobs often assist with fires. And a lack of support staff could force firefighters to do additional work such as maintaining recreational trails, taking them away from fire-related duties.

Much of the force is hired seasonally or switches between crews and agencies at different times of the year. But the increased uncertainty has prompted once-reliable seasonal hires to take other jobs that offer more stability.

“We’re the only ones left,” the Forest Service firefighter said of the hiring freezes.

(In early February, Sen. Tim Sheehy, a Montana Republican, and Sen. Alex Padilla, a California Democrat, introduced legislation to create a new, unified firefighting agency.)

All this comes as wildfires are growing larger and more catastrophic. The area of land burned annually over the past decade was 43% larger than the average since the federal government began tracking it in 1983, according to data from the National Interagency Coordination Center.

“Long, Snowballing Effects”

The bureaucratic turbulence will have long-term consequences for the force and for communities in fire-prone areas, firefighters said.

One federal employee involved in training programs likened the federal funding freeze during the prime training season to a “massive sledgehammer” hitting the force. The firefighter painted a stark picture of the harm: instructors quitting, workers in the dark about whether they can travel to receive instruction and leadership positions potentially remaining vacant as firefighters, who lack required training, are unable to qualify for promotions.

“Any pause in a training system like this can have long, snowballing effects,” they said.

Additionally, the workforce has been stressed by Trump’s executive orders calling for programs relating to the topics of diversity, equity and inclusion to be shuttered, including employee support groups and seminars on topics such as women in the wildfire community. Government websites have already been scrubbed of information lauding progress in diversifying the male-dominated federal firefighting force, ProPublica found.

Workers who deal with the aftermath of wildfires are also under pressure.

In Southern California, the Environmental Protection Agency has more than 1,500 employees and contractors working to clean up toxic pollution released by the Palisades and Eaton fires. There, too, the Trump administration’s orders have caused confusion, particularly a decree that the effort must be completed within a 30-day window.

That timeline is unprecedented, EPA staff on the ground told ProPublica, and has led to logistical headaches and an inability to gather community input on how to best approach the cleanup. “We’re doing as much as we can, but we’re down to the wire already,” an EPA employee working on the response said.

The agency had completed hazardous material removal at more than 4,600 properties as of Wednesday, according to a statement from Molly Vaseliou, an EPA spokesperson. “EPA is on track to meet President Trump’s ambitious cleanup timeline,” she said.

As Trump has signed more executive orders aimed at shrinking the federal workforce, firefighters voiced concern about their long-term ability to do their jobs.

On Feb. 11, a Trump order demanded agencies only hire one replacement for every four people who leave the government. Firefighters in multiple divisions said they had asked whether their jobs were protected by an exemption for public safety but received no clear answer.

“The 2 million federal employees are seen as the boogeyman, and we’re really not,” said Kelly Martin, the former chief of fire and aviation at Yosemite National Park. “It’s had a really devastating impact on morale for the federal employees that have committed their lives and moved their families into rural communities. Now, they’re finding, ‘I may not have a job.’”

by Jennifer Smith Richards and Jodi S. Cohen

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

In the three-and-a-half weeks since Donald Trump returned to the presidency, investigations by the agency that handles allegations of civil rights violations in the nation’s schools and colleges have ground to a halt.

At the same time, there’s been a dramatic drop in the number of new cases opened by the U.S. Department of Education’s Office for Civil Rights — and the few that attorneys have been directed to investigate reflect some of Trump’s priorities: getting rid of gender-neutral bathrooms, banning transgender athletes from participating in women’s sports and alleged antisemitism or discrimination against white students.

The OCR has opened about 20 new investigations since Trump’s inauguration, sources inside the department told ProPublica, a low number compared with similar periods in previous years. During the first three weeks of the Biden administration, for instance, the office opened about 110 new investigations into discrimination based on race, gender, national origin or disability, the office’s historic priorities. More than 250 new cases were opened in the same time period last year.

Historically, the bulk of investigations in the office have been launched after students or their families file complaints. Since Trump took office, the focus has shifted to “directed investigations,” meaning that the Trump administration has ordered those inquiries.

“We have not been able to open any (investigations) that come from the public,” said one longtime OCR attorney who asked not to be named for fear of losing their job.

Several employees told ProPublica that they have been told not to communicate with the students, families and schools involved in cases launched in previous administrations and to cancel scheduled meetings and mediations. “We’ve been essentially muzzled,” the attorney said.

A spokesperson for the Education Department did not respond to requests for comment.

Even though new case openings typically slow during a presidential transition as new political appointees gain their footing and set priorities, it is not typical for it to all but stop. “Under the first Trump administration, of course things shifted and there were changes, but we never had this gag order on us,” said another OCR attorney who also asked not to be named.

The shift at the OCR comes as Trump has called the Education Department a “con job” and is expected to issue an executive order that the department be dismantled. In her confirmation hearing on Thursday, Trump’s nominee to be education secretary, Linda McMahon, said she hadn’t decided whether to cut funding to the OCR, as Republicans have called for.

This week, the Trump administration terminated more than $900 million in contracts that mostly focused on education research and data on learning and the country’s schools. The cuts were made at the behest of Elon Musk’s cost-cutting crew, known as the Department of Government Efficiency, which said it also ended dozens of training grants for educators that it deemed wasteful.

Since 1979, the department’s civil rights arm has worked to enforce the nation’s antidiscrimination laws in schools. It operates under a congressional mandate to uphold the Civil Rights Act of 1964 as well as the federal laws that prohibit discriminating against students because of gender or disability.

About 12,000 complaints were under investigation when Trump took office. The largest share of pending complaints — about 6,000 — are related to students with disabilities who feel they’ve been mistreated or unfairly denied help at school, according to a ProPublica analysis of department data.

Investigators were pursuing about 3,200 active complaints of racial discrimination, including unfair discipline and racial harassment. An additional roughly 1,000 complaints were specific to sexual harassment or sexual violence, the analysis found. The remainder concern a range of discrimination claims.

Students and families often turn to the OCR after they feel their concerns have not been addressed by their school districts. The process is free, which means even if families can’t afford a lawyer to pursue a lawsuit, they may still get relief — access to disabilities services or increased safety at school, for example.

When the OCR finds evidence of discrimination, it can force a school district or college to change its policies or provide services to a student, and it sometimes monitors the institutions to make sure they comply.

Last fall, for example, the OCR concluded that a rural Pennsylvania school district had failed to protect Black students from racist taunts and harassment by a group of white students. White students in the Norwin School District had circulated a photo of themselves labeled “Kool Kids Klub,” wore Confederate flag clothing, told a Black student to “go pick cotton” and used racial epithets, investigators found. District officials initially said they saw no problem with some of the white students’ behavior and did not believe the students had created a racially hostile environment.

But the OCR’s findings and corrective action required the district to study several years of racial harassment complaints and undergo training on how to better respond to racial conflict in the district.

The department’s power to hold schools accountable when they fail to protect students and provide relief in real time — while a student is still in school — makes its work urgent, civil rights attorneys and department staff said.

About 600 of the Education Department’s roughly 4,000 employees work in the OCR, either at the Washington headquarters or one of 12 regional offices. At least 74 department employees, some of whom had taken diversity training, have been placed on administrative leave, according to Sheria Smith, an OCR attorney and president of the American Federation of Government Employees Local 252, a union that represents nonmanagement Education Department employees.

Smith said 15 of those workers on leave are from the OCR. Fifty newer Education Department employees were fired Wednesday, she said, including three from the OCR.

“The one thing that is clear right now is we have a complete disruption of the services we provide and are hearing from our stakeholders,” Smith said, citing as an example a Kentucky family reaching out to silenced OCR workers to plead for answers about the complaint they’d made about how their elementary school handled their child’s sexual assault.

“It is the members of the public that are suffering with these disruptions,” she said.

Another department employee who asked not to be identified, fearing they could lose their job, said a number of the students’ complaints are urgent.

“Many of these students are in crisis,” the employee said. “They are counting on some kind of intervention to get that student back in school and graduate or get accommodations.”

There are students who need help now, the employee said. “And now the federal government is literally doing nothing.”

The department’s new leadership has said publicly it plans to broaden the types of discrimination the department will investigate. Among the cases it is investigating is whether one all-gender restroom in a Denver high school discriminates against girls. The acting head of the OCR even took the unusual step of announcing the investigation in a press release, something previous administrations typically did not do.

“Let me be clear: it is a new day in America, and under President Trump, OCR will not tolerate discrimination of any kind,” acting OCR head Craig Trainor said in the press release announcing that he had directed civil rights staff to investigate a Denver Public Schools bathroom because it “appears to directly violate the civil rights of the District’s female students.”

Denver schools spokesperson Scott Pribble called the investigation “unprecedented.” He added, “This is not the first all-gender bathroom we have in a school, but it’s the first time an investigation has been opened by OCR.” There are other girls’ restrooms in the school; only one was converted to an all-gender restroom after students lobbied school administrators to do so.

Trainor again took a tough approach on Wednesday when he announced a new investigation into high school athletics groups in Minnesota and California, both of which have said they would not shut transgender women out of women’s sports. The administration had already opened three similar investigations against other institutions for alleged violations of Title IX, the federal law that prevents gender-based discrimination in education programs, in response to the executive order Trump had signed to ban transgender women and girls from participating in women’s sports.

The states “are free to engage in all the meaningless virtue-signaling that they want, but at the end of the day they must abide by federal law,” Trainor said.

The OCR also decided that it would investigate a complaint filed in August by the Equal Protection Project, a conservative nonprofit, that alleges discrimination against white students. The Biden administration had not acted on the complaint, but new department leaders decided within days that it would proceed with an investigation. The complaint alleges that the Ithaca City School District in New York excluded white students by hosting an event called the Students of Color Summit.

Cornell University professor William Jacobson, who founded the Equal Protection Project, said his organization has filed about 60 complaints over the years with the OCR, some of which remain under investigation. Asked whether he thought the change in administration helped fast-track the Ithaca complaint, he said, “I don’t see how it could have hurt.”

“We want evenhanded enforcement, and we hope the department will be more aggressive than it has in the past,” Jacobson said. “If there are programs that exclude Black students, we want the department to go after that, but I am not aware of such programs.”

Ithaca school officials declined to comment.

Catherine Lhamon, who oversaw the OCR under former Presidents Barack Obama and Joe Biden, questioned the current administration’s approach of issuing press releases to announce investigations. One announcement included a quote from a former collegiate athlete who has railed against transgender women in sports.

“It’s hugely political and suggests a conclusion before the OCR has even conducted an investigation,” Lhamon said. The agency, she said, is supposed to be a neutral fact-finder.

The agency appears to have ended its long-standing practice of making public a list of institutions that are being investigated and what type of discrimination is alleged. That was last updated Jan. 14, the week before Trump’s inauguration.

We are continuing to report on the U.S. Department of Education. Are you a former or current Education Department employee? Are you a student or school employee impacted by changes at the department? You can reach our tip line on Signal at 917-512-0201. Please be as specific, detailed and clear as you can.

Mollie Simon contributed research.

by Perla Trevizo and Mica Rosenberg, ProPublica and The Texas Tribune

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

This article is co-published with The Texas Tribune, a nonprofit, nonpartisan local newsroom that informs and engages with Texans. Sign up for The Brief Weekly to get up to speed on their essential coverage of Texas issues.

The military planes departed from Texas in quick succession, eight flights in as many days. Each one carried more than a dozen immigrants that the U.S. alleged are the “worst of the worst” kinds of criminals, including members of a violent Venezuelan street gang.

Since Feb. 4, the Trump administration has flown about 100 immigrant detainees to the U.S. naval base in Guantanamo Bay, Cuba, a facility better known for having held those suspected of plotting the 9/11 terrorist attacks. Officials have widely touted the flights as a demonstration of President Donald Trump’s commitment to one of the central promises of his campaign, and they’ve distributed photos of some of the immigrants at both takeoff and landing. But they have not released the names of those they’re holding or provided details about their alleged crimes.

In recent days, however, information about the flights and the people on them has emerged that calls the government’s narrative into question. ProPublica and The Texas Tribune have identified nearly a dozen Venezuelan immigrants who have been transferred to Guantanamo. The New York Times published a larger list with some, but not all, of the same names.

For three of the Guantanamo detainees who had been held at an immigration detention center in El Paso, Texas, ProPublica and the Tribune obtained records about their criminal histories and spoke to their families. The three men are all Venezuelan. Each had been detained by immigration authorities soon after crossing the U.S.-Mexico border and was being held in custody, awaiting deportation. In some cases, they had been languishing for months because Venezuela, until recently, was largely not accepting deportees. According to U.S. federal court records, two of them had no crimes on their records except for illegal entry. The third had picked up an additional charge while in detention, for kicking an officer while being restrained during a riot.

Relatives of the three men said in interviews on Tuesday that they have been left entirely in the dark about their loved ones. They all said that their relatives were not criminals, and two provided records from the Venezuelan Interior Ministry and other documents to support their statements. They said the U.S. government has given them neither information about the detainees’ whereabouts nor the ability to speak with them.

Attorneys say they have also been denied access. The American Civil Liberties Union filed a lawsuit on Wednesday, arguing that the U.S. Constitution gives the detainees rights to legal representation that shouldn’t be stripped away just because they have been moved to Guantanamo.

“Never before have people been taken from U.S. soil and sent to Guantanamo, and then denied access to lawyers and the outside world,” said Lee Gelernt, the lead attorney in the ACLU case. “It is difficult to think of anything so flagrantly at odds with the fundamental principles on which our country was built.”

Yesika Palma sobbed as she spoke about her brother Jose Daniel Simancas, a 30-year-old construction worker, and how it felt to think of him being treated like a terrorist when all he’d done was attempt to come to the United States in pursuit of a decent job. Angela Sequera was distraught about not being able to speak to her son, Yoiker Sequera, who’d worked as a barber in Venezuela.

Michel Duran expressed the same dismay about his son, Mayfreed Duran, who also worked as a barber. “To me it’s the desperation, the frustration that I know nothing of him,” he said in a phone interview in Spanish from his home in Venezuela. “It’s a terrible anguish. I don’t sleep.”

In response to questions about the Guantanamo detentions, officials at the Department of Homeland Security insisted, without pointing to any evidence, that some — but not all — of the immigrants they have transferred to Guantanamo are violent gang members and others are “high-threat” criminals. “All these individuals committed a crime by entering the United States illegally,” an agency official said in a statement. Some detainees are being held in Guantanamo’s maximum-security prison while others are in the Migrant Operations Center that in the past has been used to house those intercepted at sea.

DHS spokesperson Tricia McLaughlin, responding to the ACLU lawsuit, said in an email that there was a phone system that detainees could use to reach attorneys. Writing in all caps for emphasis, she added, “If the AMERICAN Civil Liberties Union cares more about highly dangerous criminal aliens including murders & vicious gang members than they do about American citizens — they should change their name.”

In the past, the U.S. government has withheld information about cases that it says involve a threat to national security. In those cases, the authorities say, information they’re using to make custody determinations is confidential. The government said some of the people sent to Guantanamo are tied to the Tren de Aragua criminal organization, which Trump designated a terrorist group when he took office. Among the things law enforcement has used to identify members of the group have been certain tattoos, including stars, roses and crowns, though there’s disagreement on whether the practice is reliable. Lawyers have expressed concern that the government sometimes uses national security concerns as a pretext to avoid scrutiny.

The Guantanamo detentions may be among the highest-profile moves the Trump administration has made as part of its mass deportation campaign, but federal agents have also fanned out across the country over the last several weeks to conduct raids in neighborhoods and workplaces. Data obtained by ProPublica and the Tribune shows that from Jan. 20 through the first days of February, there have been at least 14,000 immigration arrests. Around 44% of them were of people with criminal convictions, and of those, close to half were convicted of misdemeanors. Still, Trump’s border czar, Tom Homan, has said that he’s not satisfied with the pace of enforcement.

Government data obtained by the news organizations shows that the Trump administration has averaged about 500 deportations per day, well short of the more than 2,100 per day during the 2024 fiscal year under former President Joe Biden. However, the difference could be attributed to lower numbers of border crossings, which have been dropping since last year.

Trump directed the departments of Defense and Homeland Security last month to prepare 30,000 beds at Guantanamo and later said the site was for “criminal illegal aliens threatening the American people.”

Mayfreed Duran, left, Yoiker Sequera, center, and Jose Daniel Simancas are among the roughly 100 people the U.S. government has flown to a detention facility in Guantanamo Bay. (Edited by ProPublica, source images courtesy of Duran’s, Sequera’s and Simancas’ families)

Relatives of three of those currently detained in Guantanamo said the immigrants all had tattoos. And one of them, Simancas, was from Aragua, the state where Tren de Aragua was born. The detainees’ relatives dispute that their loved ones have anything to do with the group. “This doesn’t make sense. He’s a family man,” Palma said in Spanish of her brother. “Having tattoos is not a sin.”

Palma, who is currently living in Ecuador, said her brother left Venezuela years ago, first living for a time in Ecuador and then in Costa Rica. He decided to try his luck in the United States last year, crossing with a group that included his wife and cousin, who were soon released into the U.S. to pursue asylum claims, they both said in interviews. All three women said Simancas was proud of his work on construction sites and shared TikTok videos he made showing the progress of some of his projects, set to music. Simancas called his cousin on Feb. 7 saying he was being taken to Guantanamo. “It is truly distressing,” his sister said. “I have to have faith because if I break down I can’t help him.”

Duran’s father only learned of his son’s potential whereabouts after recognizing his face in a TikTok video with some of the images released by the U.S. government of men in gray sweats and shackles being led into military planes in El Paso.

Duran had left Venezuela hoping to one day open his own barbershop in Chicago, where he had relatives. He described his son, who has a toddler, as a jokester and a dedicated worker. Duran was detained in July 2023 on his third attempt crossing the border, his father said. He remained in detention following a conviction for assaulting a federal officer during a riot at the immigration center in El Paso in August, about a month after his arrival. He’d called his father on Feb. 6, asking him to gather documentation that could prove he had no criminal record in Venezuela because officials were trying to tie him to Tren de Aragua. That was the last his father heard of him.

Angela Sequera was used to talking to her son every day on the phone while he was detained in El Paso, but then she abruptly stopped hearing from him. On Sunday she got a call from a detainee inside the El Paso center telling her that her son Yoiker had been transferred, but she wasn’t able to speak to him; when she looked him up online, it still showed him as being at the border.

She’d last heard from him a day earlier. “Estoy cansado,” I’m exhausted, she said he told her in Spanish. “It’s unfair that I’m still detained.” He’d been held inside the detention center in El Paso since September, after turning himself in to the Border Patrol in Presidio, nearly four hours south of El Paso.

Yoiker Sequera, who was first identified by the online publication Migrant Insider, is among the three Venezuelans named in the lawsuit filed by the ACLU. The 25-year-old had wanted to be a barber ever since he was a boy, his mother said, just like his uncle. That’s how he made a living wherever he went, in Venezuela, Ecuador, Colombia. He continued to cut hair along the migrant route, as he was trying last year to make his way to his family in California, and inside the detention center.

Angela Sequera said her son had planned on crossing the border and trying to seek asylum in the United States. “Now they want to tie him to criminal gangs. Everything that’s happening is so unfair.”

We are still reporting. Do you have information about the U.S. immigration system you want to share? You can reach our tip line on Signal at 917-512-0201. Please be as specific, detailed and clear as you can.

Pratheek Rebala contributed reporting.

by Hal Bernton for ProPublica and Nathaniel Herz, Northern Journal

This article was produced for ProPublica in partnership with Northern Journal and the Anchorage Daily News. Sign up for Dispatches to get stories like this one as soon as they are published.

Last summer, an unsettling quiet cloaked the isolated Southwest Alaska community of King Cove as the town’s economic engine — a sprawling seafood processing plant — sat shuttered.

Bunkhouses, once filled with hundreds of workers during the peak salmon harvest, were vacant. Four diesel generators that had rumbled day and night were stilled. The plant docks, once lined with boats and circled by fish-scavenging gulls, were empty.

The closure resulted from the financial implosion of the plant’s owner, Peter Pan Seafood. Some local fishing boat captains directed their ire at company leaders who accepted their seafood, then failed to pay them.

They dwelled far less on a surprising, largely silent, powerhouse investor in the plant: the state of Alaska.

The trustees of Alaska’s Permanent Fund, an $80 billion savings account whose earnings provide residents with annual dividends and help pay for government services, decided to invest more money in companies with ties to Alaska. More than $29 million went to Peter Pan, according to figures provided by the Permanent Fund’s current board chair.

The deal ended disastrously last year with the company’s liquidation, hundreds of unpaid creditors and a likely total loss for Alaskans on their investment.

A ProPublica investigation, in collaboration with the Anchorage Daily News and Northern Journal, revealed that the Permanent Fund’s leadership and its hired management firm ignored or overlooked warning signs leading up to the deal.

First image: Vacant worker housing at the closed plant. Second image: Alejandro Cornil Jr. operated the diesel generators that powered the plant. This past year, Cornil has been paid to watch over the silent campus. Fishing boat captain Jonathan Severian prepares his boat, Amber Bay, in King Cove. He filed a claim against Peter Pan for more than $49,000 in unpaid seafood deliveries. (Marc Lester/ADN)

The management firm, McKinley Capital Management, had scant experience in restructuring private companies to boost profits — a skill set that would be essential in its Peter Pan deal.

McKinley chose an entrepreneur with troubling chapters in his career to be a business partner in Peter Pan and to help run the company. He had pleaded guilty to a federal misdemeanor criminal count in 2006 stemming from the marketing of tainted fish and was involved in another Alaska seafood processor that went belly-up months before the Peter Pan deal closed, a business failure that drew FBI scrutiny.

Amid a long-term decline in state revenue from oil, the Permanent Fund faces increasing pressure to deliver earnings. The Peter Pan venture illustrates the risk involved in seeking some of these returns within Alaska. When failure occurs, the impact is local, not in another state or a foreign country where a Wall Street firm has invested Alaskans’ money.

In King Cove this winter, the processing plant, the community’s largest generator of jobs and tax income, remains closed. City leaders are contemplating slashing a third of next year’s budget and are likely to ask the state to bail them out. Some families have already moved away, and school enrollment is down 20%.

“Events have conspired to threaten our very existence,” said King Cove Mayor Warren Wilson, in a commentary published in the Anchorage Daily News.

Peter Pan Seafood operated a processing facility in King Cove, an isolated community on the Alaska Peninsula. (Lucas Waldron, ProPublica)

About $56 million from the Permanent Fund remains invested by McKinley, the firm that put together the Peter Pan deal. Its investments have ranged from a kelp processing venture to a satellite launch company that, last year, narrowly averted filing for bankruptcy. These investments — dragged down by Peter Pan — have dropped 21% in value since 2021. That is the worst three-year return of any individual investment fund shown in the Permanent Fund’s December performance report.

The seafood industry is notoriously volatile, and Peter Pan’s failure came during a difficult period. Collectively, the industry in Alaska lost an estimated $1.8 billion between 2022 and 2023, according to a federal study.

Craig Richards, a Permanent Fund trustee and former Alaska attorney general who led the effort to create the state-focused investment program, said he’s not ready to declare it a failure. A second investment firm managing a portion of the fund’s Alaska-focused investments has produced far better results than the one that bet on Peter Pan.

“This is a business risk, and sometimes when you take risks and you hold private portfolios, you’re going to have failures,” Richards said. “That doesn’t tell me there’s inherent danger in the Permanent Fund making in-state investments. It tells me that fishing is risky.”

Other trustees see it differently. In the spring of 2023, all but Richards voted to keep the $200 million in-state program from expanding. Jason Brune, the current chair of the six-person board, was one of the critics.

“We are not a training ground for Alaska investment opportunities to see if they can work or not work,” Brune said in an interview. “Our statutory responsibility is to maximize returns for the state.”

Alaska Permanent Fund Corp. trustees Craig Richards, first image, and Jason Brune, second image, center, at a board meeting in Anchorage in 2023. (Marc Lester/ADN) A New Kind of Investment

Alaskans voted to create the Permanent Fund nearly a half-century ago, when the state was awash in royalties and taxes generated by recently discovered oil. The fund grew into a portfolio of stocks, bonds, private companies and real estate that now churns out multibillion-dollar returns. The earnings finance much of state government and provide annual dividend checks that typically exceed $1,000 per resident.

Scarcely any of the money, though, is invested within Alaska. After falling oil prices slammed the state’s petroleum-dependent economy in 2015, some of the fund’s governor-appointed trustees posed a question: What if a chunk of the portfolio went to investment firms and businesses with Alaska ties?

Alaska has a patchy record of government-sponsored investment and economic development. Those efforts include hundreds of millions of dollars spent studying a hydroelectric dam that was never built and tens of millions building an Anchorage seafood plant that failed.

The state-subsidized former Alaska Seafood International plant in Anchorage is now ChangePoint Alaska church. (Loren Holmes/ADN)

Two former Permanent Fund employees told ProPublica that staff members considered the proposed in-state investment plan a distraction from their mission to maximize returns regardless of geography — and that they made that position clear to board members in private.

Staffers also considered the $200 million investment that trustees proposed to be too hefty for the scale of business opportunities connected to Alaska’s small economy. (The former employees requested anonymity to express views contrary to those of some board members.)

Still, the trustees approved the program unanimously in 2018. The Permanent Fund chose to hire outside management firms to make the investments, a standard operating procedure that, in this case, would insulate trustees and staff members from lobbying by Alaska businesses seeking money. Richards, the program’s champion, said he didn’t recall pushback from the staff on in-state investments but thought the outsourcing plan would address concerns that might arise from such an initiative.

In the end, only two firms bid on the contract: Barings, a $420 billion subsidiary of the finance giant MassMutual, and McKinley Capital, based in Anchorage.

At McKinley’s head was Rob Gillam, a third-generation Alaskan bullish on the economic potential of his home state. Gillam had recently taken over as chief executive of the firm founded by his father, Bob, a colorful player in Alaska business listed as one of the state’s wealthiest residents before dying of complications from a stroke in 2018.

Rob Gillam, now 52, spent parts of his youth in Southwest Alaska’s Bristol Bay region — including at his father’s fishing lodge, where guests could savor aged whiskey and king crab. The younger Gillam roamed drainages that sustain the world’s largest sockeye salmon runs. He once told an interviewer he would “rather be in Dillingham,” a Bristol Bay salmon hub, than Davos, the Swiss resort area that hosts annual conclaves of billionaires.

Gillam’s father oversaw billions of dollars in investments for the Permanent Fund and other clients, but the money largely stayed in the plain-vanilla world of publicly traded stocks and bonds.

First image: An undated photo of Bob Gillam, who died in 2018. In the 1990s, Gillam founded the company that became McKinley Capital Management, which ultimately managed billions of dollars in assets. Second image: Gillam’s son, Rob Gillam, took over leadership of the company after his father’s death and helped engineer the acquisition of Peter Pan Seafood through an investment fund backed by the state of Alaska. (First image: Courtesy of Rob Gillam. Second image: Loren Holmes/ADN.)

Rob Gillam’s bid for a piece of the new $200 million investment program would take the firm into a different realm: private equity, which entails buying private companies, finding ways to boost their profits and selling them for a big return.

Private equity requires specialized skills, and a critical one is hard-nosed due diligence before an investment is made. That may include running background checks on key partners and sifting through litigation to uncover red flags, according to Eli Gralnik, a due diligence specialist at a consultancy called Alias Intelligence.

Gillam, who declined to be interviewed, said in a statement that McKinley was up-front with the Permanent Fund about its lack of private equity experience. He said he has always believed in “Alaskans investing in Alaskans” and noted that the Permanent Fund, in its announcement about the in-state program’s launch, said it was trying to generate attractive returns by backing “emerging” managers locally. “Emerging generally means new” to a line of investments, Gillam wrote.

Gillam said he’s done numerous personal business deals in his career and that his firm hired an experienced Alaska investment adviser to help manage McKinley’s private equity work. (The adviser did not play a leading role in the Peter Pan deal, according to two sources familiar with McKinley but unauthorized to disclose sensitive information. The adviser declined to comment.)

One of the former Permanent Fund employees said the staff was uncomfortable with giving McKinley part of the in-state portfolio but felt pressure from trustees to hire an Alaska-based firm.

“We couldn’t, politically, not choose McKinley,” said the former employee.

Richards, the Permanent Fund chair at the time and the main advocate for the in-state investment plan, called this assertion “poppycock.” He said the idea that the board had an “implied or expressed” expectation of whom the staff should choose is “not accurate in the least.”

Staff members ultimately agreed to split the $200 million between Barings and Gillam’s McKinley Capital.

With $100 million in hand, Gillam was ready to plunge into private equity. McKinley Capital secured another $17 million from investors beyond the Alaska Permanent Fund. McKinley called the joint project the Na’-Nuk Investment Fund, after the Iñupiaq word for polar bear.

Then, the bear started hunting for deals.

The Seafood Entrepreneur

An opportunity soon emerged for Gillam that was centered in Southwest Alaska, the region Gillam knew and loved. The idea was to turn around the flagging seafood company Peter Pan — aided by a charismatic entrepreneur with a mane of blond hair, a passion for pickleball and an eclectic resume.

Rodger May has produced Hollywood movies featuring John Travolta, Julia Roberts and Danny Devito. He bankrolled a hunt for sunken treasure near Juneau and owns a Washington-based wagyu beef company. He works out of his home on Maui and sometimes from a second large, lakeside home south of Seattle.

May, now 59, launched his seafood industry career as a college student in the 1980s when he founded a Canadian salmon import business. Since then, he has sold billions of dollars of seafood, he said in a 2024 court filing. Big box stores and food service companies are major clients.

Rodger May’s business affairs have included a wagyu beef company, real estate investments, Hollywood movies and a venture to salvage sunken treasure off the coast of Juneau. (Courtesy of Rodger May)

His business career has also, on occasion, drawn scrutiny from federal authorities.

May entered into a consent decree in Seattle in 2000 to settle charges of violating a federal safety law intended to keep unsafe foods out of interstate markets — in this case, smoked salmon that allegedly was not properly prepared and risked forming toxins during the product’s shelf life. May did not admit to wrongdoing but agreed to take steps to ensure product safety, including implementing a processing plan developed by a food safety expert.

Six years later, after a Food and Drug Administration investigation, May pleaded guilty to a criminal misdemeanor count stemming from vacuum-packed fish that federal officials said was contaminated by an ammonia leak. May’s company was fined $400,000.

In court filings, May said the fish was sold at a deeply discounted price and labeled for use only as bait, as required by the federal government. But other companies resold a portion to federal prisons, and inmates in Minnesota reported suffering stomach disorders, prosecutors said in a sentencing memorandum. While prosecutors wrote that May admitted some sales were made “with a wink and a nod,” May’s attorney wrote that his client did not “advise or have knowledge of the mislabeling of the fish.”

The court cases were long past when May and McKinley Capital began talking about a partnership in 2020, the year after McKinley was entrusted with the Permanent Fund’s money.

May had known Rob Gillam and his father for years and had visited the family fishing lodge, according to two sources who said Gillam talked about the visits. May also previously served on a corporate board with Jared Carney, vice chair of McKinley’s board, federal securities records show.

Three investors — May, McKinley Capital and a third partner, Los Angeles-based RRG Capital Management — would pool their money. May’s Washington-based fish company would merge with Peter Pan, which had four Alaska processing plants that had been losing money for its Japanese owners, and May would take a leadership role. Everyone’s investment would nearly double in value by 2026, one financial projection showed.

Converted shipping containers housed up to six workers each at the former Peter Pan Seafood plant in Dillingham, Alaska, now owned by Silver Bay Seafoods. Processing workers were recruited from the U.S. — and internationally through the H-2B visa program — and worked long hours. The Dillingham plant off-loaded, processed and packaged sockeye salmon from Bristol Bay, the largest wild salmon fishery in the world. (Corinne Smith)

What did May’s would-be partners know about his business background at the time?

ProPublica obtained one data point: a “quality of earnings” report, produced for RRG before the deal closed. It examined May’s company, Northwest Fish. The report found it profitable with annual revenue that for two years exceeded $100 million, but its authors cautioned that the company-supplied figures were unaudited.

The report also noted May’s partial ownership of an Alaska seafood business called Golden Harvest Alaska Seafood. It omitted that the company had collapsed months before, making headlines when it shuttered its processing plant on the remote Aleutian island of Adak. May was one of four Golden Harvest board members, according to interviews with investors.

Fishing boat captains alleged in court they were owed more than $2 million, although they later withdrew their lawsuit, citing dim prospects of getting paid.

Separately, a forensic audit commissioned by some of the company’s investors found evidence of financial fraud, including “improprieties” in financial submissions to a bank, according to a copy of the document obtained by ProPublica. The audit said that company officials submitted documents to the bank showing “the company was profitable when, in fact, it was not.”

The audit findings were handed over to the Alaska State Troopers, spurring an FBI investigation that included interviews with commercial fishermen and several investors but ultimately no charges, according to investors familiar with the inquiry. May said he was aware of the FBI investigation but was never interviewed by an agent. He said it had nothing to do with him, adding that “we were one of the largest losers in this debacle.”

An FBI spokesperson, Chloe Martin, said the agency does not confirm or deny the existence of investigations unless or until charges are filed.

Gillam declined to comment on the scope of McKinley’s vetting of May and his businesses or what it found.

A source familiar with the vetting process indicated that Gillam and the other partners in the Peter Pan deal were aware of the federal scrutiny May received early in his career over food safety. But they also reviewed his strong record of seafood sales through the decades, according to the source, who asked not to be named due to the confidentiality requirements of private equity deals.

The source said the formal vetting process did not turn up the allegations of financial fraud at Golden Harvest.

Jason Scharfman, a due diligence expert, said that McKinley or its partner should have uncovered the Golden Harvest lawsuit had they taken steps common in the private equity world — like hiring a private investigator or other professionals to conduct “boots on the ground” research on May’s businesses. Those efforts, in turn, could have led to information about a government investigation.

“It’s not clear that McKinley and its business partners were asking questions that would surface such concerns,” said Scharfman, after a reporter read him an excerpt of the “quality of earnings” report on May’s business.

As for the Permanent Fund, Allen Waldrop, the fund official who oversees private equity investments, said the staff doesn’t interfere with the individual investment decisions of their private money managers.

But the staff had at least one opportunity to raise objections: The Permanent Fund’s agreement with McKinley contained what’s known as a “concentration limit,” restricting how much money could go into a particular deal. Waldrop said Gillam’s team asked the Permanent Fund to waive the cap for Peter Pan, to which staffers said yes.

So, on Dec. 31, 2020, two weeks after the report on May’s businesses was delivered, his new business partners closed the deal. Alaska residents were about to wager a small piece of the Permanent Fund, the source of their annual dividend checks, on a seafood company.

The Turnaround Begins

King Cove, 625 miles southwest of Anchorage, spreads across a swath of the Alaska Peninsula often shrouded in fog. Summer sun breaks reveal vistas of precipitous slopes mantled in deep green grasses — with distant volcanic peaks shrouded in snow.

From left: Chris Babcock, Bonita Babcock and Shankell Mack watch from a bluff as King Cove’s Independence Day fishing derby gets underway. First image: An Independence Day-themed bike parade in King Cove. Second image: Villagers launch midnight fireworks from a dock in King Cove. (Marc Lester/ADN)

Since 1911, boat captains — many of them descendants of Indigenous Unangax̂ who resettled from nearby islands — have been delivering bountiful catches to the town’s seafood processing plant. It sits along a narrow spit frequented by brown bears.

In the decade leading up to the acquisition, residents complained that Peter Pan’s Japanese corporate parent was letting the plant fall into neglect.

May and his partners promised to shake things up. They would develop new products that commanded a premium. When buying fish, they would be fiercely competitive with processors in other communities. More fish flowing through Peter Pan’s production lines would boost earnings so that the company could later be sold at a profit.

Many industry observers were skeptical, noting increasing foreign competition as well as the age and remoteness of Peter Pan’s plants.

“Everyone is losing money in the Alaska salmon industry,” read a headline in Intrafish, an industry trade publication. “Why do Peter Pan’s new owners think they’re different?

Gillam was confident. In a 2021 interview with another industry publication, National Fisherman, he emphasized the enduring demand for sustainably harvested seafood in the pandemic and the experience of the team that would execute on the Peter Pan deal. “What’s most unusual about our transaction,” Gillam said, was the addition of May’s sales organization to form “a vertically integrated, global seafood powerhouse.”

Two summers of huge salmon runs ensued, fueling a surge in production at the King Cove plant and record tax hauls for the city government.

But economic headwinds and years of underinvestment in Peter Pan’s assets made it hard to convert the enormous catch into corporate profits.

One big problem was the skyrocketing cost of labor in Alaska. Hourly wages for the plant’s foreign workers, set by the federal government, rose 30% from 2020 to 2022 even as a pandemic forced costly quarantines.

Another challenge: Peter Pan’s aging King Cove plant required costly maintenance. Salmon canning equipment repeatedly broke down. Many spare parts were secondhand.

“We were slowly making progress,” said Jon Hickman, Peter Pan’s vice president of operations between 2021 and 2023. “But stuff was pretty tired.”

First image: When Peter Pan’s King Cove plant was operating in 2022, workers processed Pacific cod. Second image: Two years later, in July 2024, the closed plant. (Marc Lester/ADN)

The company funded upgrades. Bunkhouses got new siding. Junk equipment and old nets were hauled away. The workforce expanded.

“Everybody got extra helpers,” said Alejandro Cornil Jr., who’d worked at the King Cove plant for more than three decades. “I got two employees that I didn’t need.”

May, Peter Pan’s president and chief growth officer, focused on marketing the company’s products. He would later say in court filings that he tripled Peter Pan’s sales and also personally lent the company nearly $40 million to keep it afloat.

In 2023, two years into the new ownership, a global downturn in seafood markets put the company under severe pressure. Warehouses filled with unsold product, running up storage bills, and the company struggled to make payments to fishermen.

In January 2024 came a bombshell announcement: The King Cove plant would not open for the winter fishing season.

“You can’t keep on going to work producing a product, and selling it at a loss,” May told Northern Journal at the time. He would later tell ProPublica that Peter Pan was hit with an array of economic blows that created a “perfect storm.”

In April, bank creditors found Peter Pan in “imminent danger of insolvency.” They filed a motion in a Washington state court to take control from the owners, then moved to liquidate the company.

Peter Pan and its processing plants would be sold at auction.

Aftermath

For King Cove residents, Peter Pan’s plunge was a wrenching development that put boat captains in line with hundreds of other creditors seeking to get their money back.

City Council member Dean Gould was one of the hardest hit. Peter Pan owed him more than $185,000 for his catch of Dungeness crab and salmon the company processed in 2023, Gould said in a receivership filing.

Gould started fishing at age 10, inheriting his boat, the 53-foot Northern Star, from his father. For decades, he was loyal to Peter Pan, selling the company his catch even when competitors paid higher prices.

Dean Gould, skipper of the King Cove-based fishing vessel Northern Star, looks out from his cabin as he cruises the North Pacific for salmon in July. (Marc Lester/ADN)

With the plant closed, Gould and other King Cove fishermen scrambled to find plants in other communities that would buy their catch. Gould dipped into retirement savings to pay his crew and other expenses.

But the season was a bust.

During one July opening, Gould pulled in fewer than 400 salmon in a day, not even enough to cover his fuel costs.

“Wishing, wishing, wishing there would be more, but there ain’t,” Gould said. “If I had that money in the bank, I wouldn’t have to push so hard.”

Gould’s boat, the Northern Star, is connected by rope to a smaller skiff that helps the Northern Star’s crew set a circular seine net in the water.

Watch video ➜

First image: Deck boss Darien Uttech of King Cove. Second image: Water droplets fly from the lines of the vessel’s gear as crew member Sam Irwin hauls it in. First image: Salmon spill onto the deck of the Northern Star. Second image: Uttech helps rinse off fellow crew member Luni Tolai after hauling the net on deck. (Marc Lester/ADN)

The closure roiled the King Cove plant’s workers, many of them on work visas from countries including Mexico, Ukraine and the Philippines. They were at other seasonal worksites when Peter Pan closed and had left behind laptops, televisions and other personal gear. The belongings remained locked up as people far away decided the company’s fate.

Members of the Permanent Fund staff offered sympathy but did not accept responsibility for Peter Pan’s demise.

“We don’t have the ability to change the course of the company,” said Waldrop, a deputy chief investment officer at the Permanent Fund. “We can’t intervene. We can’t do anything. We’re not managing it.”

Behind the scenes, the Permanent Fund staff had continued to voice concerns about the in-state investment program even before Peter Pan shut down. McKinley faced particular scrutiny.

In a heavily redacted version of a 2022 memo released after a public records request, top Permanent Fund officials observed that many of McKinley’s investments had “very weak ties” to Alaska. They recommended that for “future iterations” of in-state investments, the board consider restrictions like demanding McKinley and the other investment manager, Barings, divulge which businesses received state money — a request both managers had initially resisted.

The Permanent Fund staffers had one more suggestion for the board: Consider consolidating the program under one of the two management firms. The next 10 lines of the memo are blacked out. But Brune, the current board chair, confirmed the staff suggested dropping McKinley if the in-state program were to expand. One reason was that McKinley had put so much money into a seafood company, he said.

In April 2023, the fund’s trustees voted to halt further expansion of the in-state investment program. Board members cited concerns including the risk that managers’ investments could go to businesses connected to trustees or their relatives, creating conflicts of interest.

Richards, the program’s backer, cast the lone vote to keep it going. But in a recent interview, while standing by his support for in-state investments, he acknowledged he may have underestimated one risk.

“What we’re seeing is headline risk,” Richards said, “and that was something that I think I probably did not internalize to the degree that it turned out to be.”

The King Cove-based commercial fishing boat Dominion anchors in a calm cove on the night before an open period for salmon fishing. (Marc Lester/ADN) A New Owner

The fight for what remains of Peter Pan took one last twist at the end: May, the man originally brought in to help steer the company to profitability, joined the bidding for its assets.

More than 90 commercial boat owners and operators wrote a letter of protest, saying they would refuse to sell future harvests to May. Another letter, signed by 200 King Cove residents, told the court overseeing the auction, “We are a proud hardworking people, and what happened under Mr. May’s leadership broke something inside of us that may never fully heal.”

Gillam also had soured on his business partner, May. Their attorneys traded strongly worded court filings about the events that preceded Peter Pan’s failure. May defended his record, saying that far more boat captains would have gone unpaid without the money he loaned the company.

Despite all the objections, a Washington Superior Court official overseeing the liquidation approved the sale to May. The decision called for May to pay off more than $27 million in bank loans, legal fees and state taxes. The future of King Cove’s plant would be in his hands.

Most creditors, including Gould and other boat owners owed more than $5 million, would get nothing. The workers with items left behind could pay to have someone ship them home. The money invested by the state of Alaska and other partners in the Peter Pan venture was gone.

May is selling most of Peter Pan’s assets while litigation continues, but he’s held on to the King Cove plant. In a November teleconference with King Cove’s City Council, May called for a collaborative effort to try to get the aging facility, damaged by a 2024 fire, back up and running. He bristled when a skeptical Gould confronted him about unpaid debts.

“I’m the guy that’s been fighting for you,” May said. “I’m really getting tired of people taking shots at me.”

Freelance journalist Corinne Smith contributed reporting.

by Jesse Coburn

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Four and a half years ago, a newly formed corporate entity purchased a low-income housing complex with 264 apartments in Phoenix. The property had received more than $4 million in federal tax credits and, in exchange, was supposed to remain affordable for decades.

The company then used a legal loophole that stripped the affordability protections from the apartments. The maneuver appears to have been lucrative for the company, which bought the property for under $20 million and flipped it two years later for $63 million. Today, advertised rents there have gone up by around 50%.

Similar stories have been playing out across the country for years, as developers and real estate investors take advantage of an obscure section of the tax code known as the “qualified contract” provision. It allows owners of low-income rental properties that have received generous tax credits to raise rents far sooner than the law typically requires.

Some 115,000 apartments in the United States have lost rent restrictions as a result, according to one estimate. Experts say these conversions are exacerbating the nation’s shortage of affordable housing, which has intensified in recent years. One report recently concluded that the country has nearly 5 million fewer housing units than it needs. The problem is most acute for those with low incomes.

The loophole has remained open for decades despite widespread agreement among regulators and advocates about its harm. Congressional efforts to repeal the provision have failed — most recently in 2023 — though state reforms have trimmed its effects. President Donald Trump has pledged to lower housing costs, but some advocates for reform are skeptical that his administration or a Republican-controlled Congress will strike a statute that can be lucrative to the real estate industry. (The White House did not respond to a request for comment.)

“We have an affordable housing crisis just about everywhere in the country,” said Robert Rozen, a former Senate aide who helped draft the provision and now calls for its repeal. “We can’t afford to lose more affordable units, particularly as a result of a loophole in the law.”

The statute is part of the law defining the Low-Income Housing Tax Credit, which has become the primary catalyst for new affordable rental housing in the country. The program offers developers a tax subsidy worth potentially millions of dollars in exchange for keeping units affordable and renting them only to poor and working-class tenants. Typically that’s households making below 60% of the area median income. For a family of three to qualify in Phoenix last year, it would’ve had to make $55,560 or less.

Rent and income restrictions are supposed to last at least 30 years. But, after just 14 years, property owners may ask their states to find buyers. This opt-out clause was meant to offer wary investors an early exit from the program while retaining the affordability protections on the properties. But it included a critical unintended flaw: States can only sell at prices set by a formula that almost always overvalues the properties. As a result, buyers are rarely found. If states can’t find buyers within a year, owners are free to raise rents on vacant units and, a few years later, on existing tenants as well.

“It was obviously a mistake to include this in the law,” said Rozen, now an attorney specializing in affordable housing. “We didn’t know what we were doing when we constructed the buy-out formula.”

The beneficiaries of this maneuver are often shielded from public view. The Arizona property, previously called Sombra Apartments, was flipped by a Delaware limited liability company that incorporated under the name Sombra Apartments LLC shortly before the purchase and has a small online footprint. Through a public records request, ProPublica received the application that triggered the loss of affordability protections, which shows the LLC was controlled by a real estate investment firm in Scottsdale, Arizona, called ReNue Properties. ReNue’s website says the company specializes in “the acquisition and rejuvenation of underperforming multifamily properties” and has generated an average 81% return. Michael Christiansen, whose LinkedIn profile lists him as ReNue’s CEO at the time of the transactions, did not respond to requests for comment. (More than 5,700 low-income units in the state have lost affordability protections through the same opt-out method, according to a 2023 Arizona Republic report.)

Some companies exploiting the loophole appear to have done so with the indirect assistance of Fannie Mae and Freddie Mac. The government-sponsored enterprises support the nation’s housing sector, typically by buying mortgages to inject cash into the mortgage market. Property records show that the enterprises were involved in loans to owners of low-income housing who then stripped the properties of affordability protections or are seeking to do so. The enterprises’ involvement appears at odds with their declared support for affordable housing. Spokespeople for Fannie and Freddie did not respond to requests for comment.

Two industry insiders defended the qualified contract process as a way to fight the shortage of middle-income housing. That’s the position of Charlie Moline, CEO of Moline Investment Management, who said he has used the mechanism to remove affordability protections from around 20 multifamily properties across the Midwest.

Typically, low-income housing tax credit properties are too old and worn to be converted into high-end market-rate units, he said. But, freed of the income and rent limits, the properties can become appealing to middle-income renters after some basic renovations. “No one’s displaced by what we’re doing,” said Moline, who contends that he keeps rent increases moderate. “Our goal is to expand affordable housing to the missing middle.”

That goal would be of little benefit to Lashunda Williams, a resident of a low-income apartment complex in Omaha, Nebraska, that Moline purchased last year and is taking through the opt-out process. Williams, 33, said she makes $17 an hour as a custodian at an Amazon warehouse and pays $899 for a one-bedroom apartment. “I can barely keep up with my rent half the time,” she said. If it increased, “I would have to move.”

Moline’s argument was similarly unpersuasive to Rozen, the former Senate aide. “The bottom line is the owner is increasing his rental income and tenants who the program was intended to serve are losing their affordable rents,” Rozen said. “And the federal government is being taken advantage of.”

Affordable housing proponents have long called for repealing the qualified contract provision. But congressional efforts to do so have fizzled, in part due to lobbying from developers and private equity firms with interests in low-income housing, according to a former congressional staffer involved in the repeal effort.

Advocates have had more success pushing for state-level reforms. A majority of states now incentivize or require applicants for low-income housing tax credits to waive their opt-out rights, according to Moha Thakur of the National Housing Trust. The Department of Housing and Urban Development, the Federal Housing Finance Agency and the Department of Agriculture’s Rural Housing Service have also recently proposed or enacted policies to combat the problem. That includes a 2023 FHFA requirement that Fannie Mae and Freddie Mac no longer invest in low-income housing eligible for early opt-outs. However, Fannie and Freddie can still back loans on such properties, which is more commonly how they are involved, according to Rozen. (Freddie has said it is studying the issue.) And given the Trump administration’s mass-scale attempts to demolish regulations, particularly those adopted under the Biden administration, it’s unclear whether the new policy initiatives will survive.

The state-level changes have had an impact, bringing the number of apartments lost annually through the opt-out from around 10,000 a year to between 6,000 and 7,000. Without congressional action, however, the loophole remains on the books and a threat to poor tenants. “That loophole shouldn’t exist,” said Joy Noll, a tenant of the Arizona property, who lives on modest housing and disability subsidies. If rents rise further, Noll fears she will have to move: “It made it impossible for those of us who are low income to stay.”

by Sergio Hernández

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

We updated our Supreme Connections database with new disclosures on Thursday, adding Justice Samuel Alito’s deferred 2023 filing and eight previously missing disclosures from Justice Clarence Thomas dating back to the 1990s.

Supreme Connections is our database that makes it easy for anyone to browse justices’ financial disclosures and to search for connections to people and companies mentioned within them.

This update includes Alito’s 2023 disclosure, which was released in August after he received an extension, as well as eight Thomas filings from the 1990s provided by Documented. Those filings were not previously available in our database. While federal ethics law requires judges to file these disclosures each year, the law requires most filings to be destroyed after six years, making many past disclosures hard to find.

Alito’s disclosure includes $900 in concert tickets from Princess Gloria von Thurn und Taxis, which The New York Times reported were for her annual music festival in Regensburg, Germany. The Bavarian aristocrat once dubbed the “punk princess” has reinvented herself in recent decades, closely aligning with European conservative and Catholic circles.

The newly added Thomas filings, which cover 1992 to 1999, reveal more than 100 gifts or travel-related reimbursements, including more than a dozen private flights, cigars from the late conservative commentator Rush Limbaugh, and a 1997 trip paid for by billionaire Harlan Crow to Bohemian Grove, an all-male retreat in northern California. ProPublica previously reported how Crow has provided Thomas with extensive undisclosed luxury travel, including several other trips to Bohemian Grove. Thomas has argued he did not need to disclose such gifts.

Browse the database to learn more.

Do you have any tips on the Supreme Court? Josh Kaplan can be reached by email at joshua.kaplan@propublica.org and by Signal or WhatsApp at 734-834-9383. Justin Elliott can be reached by email at justin@propublica.org or by Signal or WhatsApp at 774-826-6240.

by Robin Fields

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Vincent Gaynor remembers, almost to the minute, when he realized his part in birthing the breakthrough gene therapy Zolgensma had ended and the forces that turned it into the world’s most expensive drug had taken over.

It was May 2014. He and his wife were sitting in the cafeteria at Nationwide Children’s Hospital in Columbus, Ohio.

Elsewhere in the hospital, an infant — patient No. 1 in a landmark clinical trial — was receiving an IV infusion that, if it worked, would fix the genetic mutation that caused spinal muscular atrophy, a rare, incurable disease. At the time, children born with the most severe form of SMA swiftly lost their ability to move, to swallow, to breathe. Depending on the disease’s progression, most didn’t live to their second birthdays.

The Gaynors’ daughter Sophia had been diagnosed with SMA five years earlier. Since then, they’d raced to fund research to save her. Their charity, Sophia’s Cure, was covering a substantial portion of the costs of the trial.

They’d helped raise about $2 million for a program at Nationwide run by Brian Kaspar, a leading researcher. Gaynor, a New York City construction worker, had forged a tight bond with Kaspar, speaking frequently with him by phone, sometimes deep into the night.

But their relationship had started to fray when — with success in sight — Kaspar became part owner of AveXis, a biotech startup that had snapped up the rights to his SMA drug. Billions of dollars were at stake.

When Kaspar walked into the cafeteria that day, Gaynor said, the scientist didn’t acknowledge him or his wife before sitting down a short distance away. Neither did the man with him, the startup’s CEO.

“It was like they didn’t know us,” Gaynor recalled.

When Zolgensma hit the market five years later, it was hailed as a miracle drug. Some babies treated with it grew up able to run and play. It helped reduce U.S. death rates from SMA, long the leading genetic cause of infant mortality, by two-thirds.

That leap forward came at a sky-high price: more than $2 million per dose, making Zolgensma then the costliest one-time treatment ever.

How did a drug rooted, like many, in seed money from the U.S. government — that is, American taxpayers — and spurred by the grassroots fundraising of desperate parents, end up with such a price tag?

The story of Zolgensma lays bare a confounding reality about modern drug development, in which revolutionary new treatments are becoming available only to be priced out of reach for many. It’s a story that upends commonly held conceptions that high drug prices reflect huge industry investments in innovation. Most of all, it’s a story that prompts, again and again, an increasingly urgent question: Do medical advances really have to be this expensive?

ProPublica traced Zolgensma’s journey from lab to market, from the supporters there at the beginning to the hired guns brought in at the end to construct a rationale for its unprecedented price.

We found that taxpayers and private charities like Sophia’s Cure subsidized much of the science that yielded Zolgensma, providing research grants and opening the door to federal tax credits and other benefits that sped its path to approval.

Yet that support came with no conditions — financial or otherwise — for the for-profit companies that brought the drug over the finish line, particularly when it came to pricing.

Vincent Gaynor with his daughter Sophia (Photo courtesy of Vincent Gaynor)

Once Zolgensma’s potential was clear, early champions like the Gaynors were left behind as the private sector rushed in. AveXis’ top executives and venture-capital backers made tens or hundreds of millions of dollars apiece when the startup was swallowed by the pharmaceutical giant Novartis AG in 2018.

Wall Street analysts predicted Novartis’ new prize drug would be the first therapy to smash the million-dollar-a-dose mark. The Swiss colossus crafted a sophisticated campaign to justify more than double that amount, enlisting a team of respected academics, data-modelers and pricing strategists to help make its case.

“This was a case where the charities and the government did everything to get this thing commercialized, and then it just became an opportunity for a bunch of people to make transformative, generational wealth,” said James Love, director of the public advocacy group Knowledge Ecology International.

In a statement to ProPublica, Novartis said Zolgensma’s price reflects its benefits to children with SMA and to society more broadly.

“Zolgensma is consistently priced based on the value it provides to patients, caregivers and health systems,” the company said, adding that the drug may reduce the burden of SMA by replacing “repeat, lifelong therapies with a single treatment.”

Zolgensma’s price quickly became the standard for gene therapies. Nine of them cost more than $2 million. A tenth, approved in November, is predicted to run about $3.8 million, just shy of the most expensive, also approved last year, which costs $4.25 million a dose.

“Drug companies charge whatever they think they can get away with,” said David Mitchell, the founder of Patients For Affordable Drugs. “And every time the benchmark moves up, they think, ‘Well, we can get away with more.’”

Parents of children with SMA say their concerns about costs pale in comparison to the hope offered by such cutting-edge therapies. “I mean, it’s a child’s life,” said Hailey Weihs, who battled her health plan to get Zolgensma for her daughter. “Anybody would want that for their own child.”

The seven-figure costs of Zolgensma and other gene therapies add to the nation’s ballooning bill for prescription drugs, absorbed by all Americans in the form of rising insurance premiums and taxes for public programs like Medicaid.

Breakthroughs like Zolgensma are often framed as wins for all: Patients get life-saving new therapies. Drug companies and biotech investors make enough money to incentivize even more breakthroughs.

But not everyone’s a winner, Gaynor noted.

No one wanted Zolgensma to succeed more than he did, or understands better what it has meant for families like his. Yet his years behind the scenes of the drug’s development left him and his family disillusioned.

“I learned it’s all about money,” Gaynor said. “It’s not about saving people.”

When Vincent and Catherine Gaynor started their married life in 2006, they knew one thing for certain: They wanted children.

They learned well into Catherine’s 2008 pregnancy that they were both carriers for SMA, meaning there was a 25% chance their child would be born with the muscle-wasting disorder.

They were concerned but clung to the larger chance the baby would be born healthy.

When Sophia was born in late February 2009, at first they just marveled at her sweet disposition and bright, expressive eyes. How she loved being snuggled. How she sighed after she burped.

But it didn’t take long for Vincent, who’d grown up with younger siblings, to sense something was off. Sophia didn’t lift her legs. They flopped outward like a frog’s when he changed her diaper.

Their pediatrician assured them Sophia was fine. Then a different doctor suggested testing her for SMA. While they waited for the results, the family went to a nearby park, and Catherine pushed Sophia’s stroller around a pond. “I remember walking behind her with the video camera and knowing in my heart this was the last day we were all going to be happy,” Vincent recalled.

After Sophia’s diagnosis, Catherine quit her office job to care for the baby full time. Vincent started gulping down studies and going to conferences, desperate to find a way to save his daughter.

At the time, there were no treatments to slow or stop SMA. By the time Sophia was 4 months old, she needed a machine to help her breathe overnight. At 6 months, she could no longer take a bottle and needed a feeding tube. Each time she lost ground, their urgency to find a treatment grew.

The Gaynors didn’t have deep pockets or wealthy friends. He was a steamfitter with Local 638, from a family of steamfitters. They began raising small amounts of money by hosting golf tournaments and throwing Zumba parties. As the volume of donations grew, they founded Sophia’s Cure, emerging as serious players in the small world of SMA charities.

I learned it’s all about money. It’s not about saving people.

—Vincent Gaynor, who raised funds for medical research to help his daughter with spinal muscular atrophy

Vincent met Brian Kaspar at a cocktail hour for high-yield fundraisers. Kaspar was among the small group of top researchers working to find treatments for SMA, competing fiercely for recognition and funds. (Kaspar declined an interview request from ProPublica and didn’t respond to written questions.)

Because his drug was a gene therapy, public grant money and private philanthropy played an especially central role, with the National Institutes of Health alone putting over $450 million into science related to SMA. Drug companies at the time approached these treatments with more skepticism, waiting longer to invest and letting universities and academic hospitals do the heavy lifting, said Ameet Sarpatwari, an assistant professor at Harvard Medical School who studies the pharmaceutical industry.

Drug companies sponsored only 40% of the U.S. gene therapy trials active in January 2019, according to a study Sarpatwari co-authored.

“The narrative of industry is, ‘We’re doing the hard, expensive part of drug development,’ and, at least for cell and gene therapies, the most risky part is actually being done by public or federally supported labs,” Sarpatwari said, calling Zolgensma a “poster child” for the study’s findings.

By the time of the cocktail party, Kaspar had turned early research into a promising drug therapy that he was beginning to test on animals — the precursor to a human trial. Gaynor remembered him as humble and almost classically nerdy, happy to spend hours on the phone explaining how motor neurons work.

More established SMA charities tended to hedge their bets, spreading money around to multiple programs. But Sophia was already around 18 months old, and Gaynor had no time for that. In September 2010, when Sophia’s Cure won a $250,000 grant from the Pepsi Refresh Project by amassing votes online, he steered the money to Kaspar’s program. The following June, the charity signed an agreement promising Kaspar up to $1 million more, for which it had launched a drive to recruit 200 people to raise $5,000 apiece.

As the money flowed in, Gaynor and Kaspar became close friends. The Gaynors stayed overnight at Kaspar’s house on their drive to an annual charity event. Kaspar did a Q&A for the Sophia’s Cure YouTube channel from the Gaynors’ dining room and proofread posts Vincent wrote for the charity’s website.

Gaynor said they often talked about how getting the drug through the development process would require way more money and muscle than the various SMA charities could muster. Kaspar shared his conversations with venture capital firms and even asked Gaynor to talk to a potential investor.

Yet Gaynor said he was blindsided when Kaspar told him he’d formed a relationship with a Dallas startup called BioLife Cell Bank that had been focused on stem cell research.

The CEO, John Carbona, then 54, had run medical device and equipment companies, but he had no background in drug development. In an interview, Carbona told ProPublica that he took the reins at BioLife in the aftermath of his mother’s death, determined to do something “significant” to fulfill her hopes for him. After an associate’s twins were born with SMA, he said he became convinced that Kaspar’s gene therapy was the answer.

Carbona remade BioLife into AveXis: Av for adeno-associated virus serotype 9, the engine of Kaspar’s drug; ve for vector; X for the DNA helix; and Is for Isis, the goddess of children, nature and magic.

Still, for much of the next year and a half, money from charities and more than $2.5 million from the National Institutes of Health remained Kaspar’s bread and butter. In late 2012, Sophia’s Cure agreed to provide another $550,000 for a Phase 1 clinical trial. The Nationwide Children’s Hospital Foundation, an affiliate of the hospital, agreed to match it.

Kaspar singled out Sophia’s Cure for the extent of its support in a Nationwide press release.

“Sophia’s Cure Foundation has been the lead funder of this program and their incredible investment in this lab has accelerated our program by many years,” he said.

The trial protocol called for Kaspar’s therapy to be tested on infants up to 9 months old. It was a pragmatic decision: The company had limited funds and capacity to produce the test doses, which would be smaller for children who weighed less. Plus, the youngest children were likely to show the most dramatic results since they’d be treated before SMA inflicted its worst damage.

That left out Sophia, as well as most of the kids whose parents made up Gaynor’s fundraising network.

Gaynor’s dream of saving his daughter had tapered into determination to stop the disease’s progression and preserve the strength she had left. Sophia could no longer move her whole hand, but she could still tap with her right pointer finger. She could use an eye-gaze computer to click open screens and attend school remotely. She could communicate a bit, blinking once for yes and twice for no.

Early on, Gaynor said, Kaspar had promised a trial for older kids. But Gaynor felt Kaspar’s commitment wavered as his ties to AveXis grew and his reliance on funding from Sophia’s Cure diminished.

Carbona struck a deal with Nationwide Children’s in late 2013, getting AveXis the exclusive right to develop an SMA treatment using the hospital’s inventions, including Kaspar’s, in exchange for stock. A few months later, Kaspar signed a contract that granted him an even larger stake in the company. The company also landed its first major investor, Paul Manning of PBM Capital.

Over this period, Gaynor said, the phone calls and updates from Kaspar slowed. The Gaynors were invited to Nationwide Children’s for the start of the clinical trial by the family of the child receiving the first dose.

After the initial awkwardness in the cafeteria, the Gaynors said, Kaspar and Carbona eventually came over and sat with them. Carbona remembers it differently, saying that he recalled seeing the Gaynors that day and the mood was friendly, even celebratory.

Tension surfaced two months later when they all converged in Lancaster, Wisconsin, for Avery’s Race, an annual SMA fundraiser benefiting Sophia’s Cure.

The event brought together dozens of families from across the country for an awareness walk, an auction and a rubber ducky race in a nearby creek. In the finale, parents posed questions to Kaspar, Gaynor and Carbona, almost all of them about the clinical trial.

In video footage captured by a documentary filmmaker, Catherine Gaynor asked bluntly whether testing the drug only on infants meant the FDA would approve the treatment only for the youngest patients while “everyone else is left hanging out to dry.”

Kaspar acknowledged this was possible. He described expanding the treatment to older children as “step two” but made clear that funds for testing would have to come from Sophia’s Cure.

That’s what the money raised at Avery’s Race would support, Vincent Gaynor said, adding pointedly that his nonprofit would focus on the work others would avoid “because it’s not going to push stock prices up.”

Neither Kaspar nor Carbona responded directly to the dig. Carbona, noting the company had other funding needs, said they would expand testing when they had proof the drug worked.

I mean, they all have their hearts in the right place, but they’re being run by people who are looking for a return on investment.

—John Carbona, former CEO of AveXis

By early 2015, AveXis had raised millions from deep-pocketed biotech investors, adding members of several venture-capital funds to its board. Their participation would be critical in bringing the drug to market, paying for licenses to patented technology needed to make and administer it, for example. It also meant that Zolgensma had to do more than save lives — its promise had to make AveXis’ investors a profit.

Almost immediately, Carbona said, the board pushed to take the company public.

“I mean, they all have their hearts in the right place, but they’re being run by people who are looking for a return on investment,” he said.

As AveXis moved toward an initial public offering, some on the board questioned whether Carbona should continue running it, he said. He’d been accused years earlier of fraud and breach of fiduciary duty by a former employer, who won a $2.2 million court judgment against him. Carbona had denied any wrongdoing and the judgment was reversed in part and reduced on appeal, but the case left lasting damage. “It hurt me immensely,” he said.

Later that year, the board replaced Carbona with a new chief executive, Sean P. Nolan, who had a decadeslong record at pharmaceutical and biotech companies.

In September, a company representative offered the Gaynors a meeting with Nolan, saying Kaspar had stressed how instrumental Sophia’s Cure had been to the work on the drug. The Gaynors traveled into Manhattan for the meeting at a hotel bar. They told Nolan about their concerns, including that older kids wouldn’t have access to Kaspar’s drug since it hadn’t been tested on them. They said Nolan was cordial but never followed up. (Nolan didn’t respond to emailed questions from ProPublica.)

Nasdaq posted a video to Facebook with the caption, “Getting ready to ring the #Nasdaq opening bell with AveXis, Inc!” (Excerpt from archived live video clip obtained from Nasdaq/Facebook)

Watch video ➜

Early the following year, AveXis went public. Nolan celebrated by ringing the NASDAQ opening bell as Kaspar, other company executives and members of the board whooped and clapped.

The IPO and subsequent stock sales raised hundreds of millions of dollars, but little of the money went toward additional trials on Zolgensma, an analysis by KEI, the public advocacy group, concluded.

The drug’s trials were small, often involving two dozen patients or fewer. AveXis, and later Novartis, spent less than $12 million up to the point of the drug’s approval — surprisingly little — to prove the therapy was safe and effective, the group estimated, based on information obtained through Freedom of Information Act requests, from studies and in Securities and Exchange Commission filings. (Novartis did not respond to questions from ProPublica about trial costs.)

The companies spent more than 10 times that amount to license intellectual property from others, KEI found. It’s not the clinical trials, Love, the director, said, that “makes developing gene therapies more expensive than it has to be.”

By the time of AveXis’ IPO, the Gaynors had decided to wind down Sophia’s Cure and step back from the SMA community. In 2015, Sophia began having seizures that became more frequent over time. She was 6 years old and growing weaker. Her SMA had progressed too far for Kaspar’s drug to help her.

Vincent’s sense of failure was crushing. In September 2016, after years of pent-up anger, he took a last stab at getting Kaspar and AveXis to acknowledge that the charity and its donors had essentially been a partner in developing Zolgensma.

Sophia’s Cure sued Kaspar, Carbona, Nolan, AveXis, Nationwide Children’s Hospital and its affiliated research institute and foundation for breach of contract. They’d relied on the charity’s money to advance the treatment, the lawsuit alleged, then violated the terms of donation agreements by cutting it out of credit and ownership rights once the drug was headed for success. The suit sought damages of $500 million.

Many larger disease foundations have launched venture philanthropy programs that invest in biotech companies and projects, getting royalties and other financial considerations if their gifts help fund new treatments. In court filings, Nationwide Children’s called the notion that the tiny Sophia’s Cure had any right to the drug “simply not true, or even plausible,” and AveXis called it “wholly unsupported.”

Carbona said he was “disappointed and surprised” by the lawsuit. Nationwide didn’t respond to questions about the matter.

In November 2017, as the litigation went on, the results of the clinical trial that the charity helped fund were published.

They were remarkable. At 20 months, all 15 children who’d been treated remained alive, and none relied on a ventilator to breathe. Eleven of 12 infants who received a higher dose of the therapy were able to sit unassisted, speak and be fed orally. Two could walk on their own.

Based on preliminary trial data, the FDA had designated Zolgensma a breakthrough therapy, one of three special designations that helped it race from human trials to regulatory approval in five years. Once the full trial results came out, AveXis became a red-hot acquisition target.

In April 2018, Novartis beat out another bidder, agreeing to buy the company for $8.7 billion.

The sale delivered massive windfalls to those with the biggest stakes in AveXis.

Kaspar alone took in more than $400 million. He swapped his longtime family home in New Albany, Ohio, for a 9-acre estate in San Diego County, California, that had been listed for just over $8 million. It featured a dine-in stone wine cellar, a horse ring and stables.

Nolan, who’d led AveXis for less than three years, walked away with over $190 million; according to a financial filing, his payout included a golden parachute worth almost $65 million. Manning, the startup’s first big investor, made more than $315 million, multiplying his original investment by about 60. (Manning didn’t respond to calls or emailed questions from ProPublica.)

Carbona, too, made a bundle — he declined to say how much. Since he’d already left the company, his payout wasn’t disclosed in SEC filings. “It didn’t matter,” he said of the money. The 20-hour days he’d put into AveXis had helped advance a lifesaving drug. “This was a significant impact on humanity.”

After watching AveXis’ executives and investors cash in, the Gaynors were dealt another painful setback. In early 2019, a U.S. district court judge in Ohio dismissed Sophia’s Cure’s lawsuit against all parties, concluding there had been no breach of contract.

Their last hope for recognition of the charity’s role in bringing Zolgensma to the world was extinguished.

Once Novartis acquired AveXis, it turned to setting a price for its much-anticipated gene therapy.

Unlike other nations, the United States allows companies to charge whatever they want for new drugs. This often means Americans pay the world’s highest prices, particularly during the period when only the original manufacturer can market a drug. Research by PhRMA, the trade group for drug companies, suggests unfettered pricing buys Americans faster access, as long as insurers will pay: New medicines most often launch first in the U.S.

Novartis’ deliberations took place at the end of a decade in which launch prices of new drugs had risen exponentially, drawing ire from patient advocacy groups and Congress. The median annual launch price for a new drug jumped from about $2,000 in 2008 to about $180,000 in 2021, one study found.

In part, the increase reflected that a growing proportion of new drugs treated rare diseases. Drug companies have argued these therapies should cost more because their markets are smaller, making it harder to recoup expenses.

Cell and gene therapies also drove prices higher. The first three such treatments were approved in 2017, launching at prices of $370,000 or more. Luxturna, a gene therapy for a rare disorder that causes vision loss, costs $425,000 per eye.

Industry insiders assumed Zolgensma would cost more than Luxturna. But how much?

There was what I would call pressure from Wall Street. This was going to set a precedent. Investors wanted to see a high price here.

—Dr. Steven D. Pearson, founder of a nonprofit that assesses drug prices

How drug companies pick prices for their products is among their most closely held secrets.

Beyond its statement, Novartis didn’t respond to questions from ProPublica about how it set or justified Zolgensma’s price. We reached out to more than three dozen people who were at the company or consulted for it at the time; most didn’t respond or declined to comment. A couple said they were bound by nondisclosure agreements.

The most visible portion of Novartis’ work was an effort to put a dollar value on how much Zolgensma would extend and improve SMA patients’ lives and offset the costs of caring for them.

This approach, known as value-based pricing, was originally championed by insurers and consumer watchdogs hoping to rein in drug prices. Other nations use economic assessments to decide whether to cover drugs and at what price, often paying far less than the U.S. for the same treatments.

But pharmaceutical companies have learned to use these techniques to their advantage.

Novartis brought together experts from academia and top consulting firms to work with its internal health economics team to publish research framing Zolgensma as a good value even at a high price.

One of the academics was Daniel Malone, then a professor at the University of Arizona’s College of Pharmacy. The target audience was mainly insurers, he said in an interview.

“We’re trying to influence the thousands of pharmacy and therapeutics committees around the country that are going to be looking at this therapy and whether they are going to provide it,” he said.

At the company’s direction, Malone said, their model mainly compared Zolgensma to the only other SMA treatment then on the market, a chronic treatment called Spinraza. It, too, was pricey, costing $750,000 in the first year and $375,000 every year after; over a decade, the tally would come to more than $4 million. (This was hypothetical; the FDA had approved Spinraza in December 2016, so no one had ever taken it for that long.)

A paper Malone co-authored concluded that Zolgensma, at prices up to $5 million, was a better buy than its rival, delivering more therapeutic benefit at a similar cost.

Company executives publicly floated multimillion-dollar prices for Zolgensma using data points from Malone and others.

“Four million dollars is a significant amount of money,” Dave Lennon, then president of Novartis’ AveXis unit, told Wall Street analysts on a call in November 2018. But “we’ve shown through other studies that we are cost-effective in the range of $4 million to $5 million.”

Such talk normalized “prices that would’ve been inconceivable a generation ago,” said Peter Maybarduk, director of access to medicines at the nonprofit consumer advocacy group Public Citizen. “It has a desensitizing effect.”

Novartis’ team of experts also helped the company prepare for Zolgensma’s evaluation by the Institute for Clinical and Economic Review, a nonprofit that assesses whether drugs are priced fairly.

Unlike agencies in Europe that do similar evaluations to set drug prices for national health systems, ICER’s recommendations aren’t binding, but they’ve become increasingly influential among public and private payers when it comes to coverage decisions.

Dr. Steven D. Pearson, the nonprofit’s founder, said that as ICER began its review, he was aware that investors were pushing for a big number.

“There was what I would call pressure from Wall Street,” he said. “This was going to set a precedent. Investors wanted to see a high price here.”

At first, it looked like ICER would resist. Its December 2018 draft report said Zolgensma would be overpriced at $2 million.

Novartis pushed back. Another consultant, University of Washington professor emeritus Louis Garrison, submitted public comments echoing a forthcoming AveXis-sponsored journal article he’d co-authored. It argued that drugs like Zolgensma, which treat rare, catastrophic conditions, deserved higher prices, in part to “incentivize appropriate risk taking and investments” by their developers.

Garrison said AveXis reviewed the article prior to publication, but he had the final say on its content. “I thought I could make a value-based argument that they would welcome and that I believe in,” he said. He said he was not directly involved in the company’s pricing decision.

Nonetheless, ICER’s final report in April 2019 concluded Zolgensma would need to be priced under $900,000 to be cost-effective, though it acknowledged the drug was still being tested on infants who hadn’t yet shown symptoms of SMA. If they also benefited, the report suggested the drug’s value might increase.

On May 24, the FDA approved Zolgensma to treat children under 2 with all forms of SMA.

Novartis finally revealed the treatment’s U.S. launch price, $2.125 million, framing this as a 50% discount on Spinraza and what the company’s research showed the gene therapy was worth.

It also pocketed yet another taxpayer-funded benefit: a voucher from the Food and Drug Administration redeemable for accelerated review of another drug. Such vouchers — designed to encourage companies to invest in pediatric rare-disease treatments — can be sold, typically bringing prices of around $100 million apiece.

That same day, ICER released an update. New data showing Zolgensma’s substantial benefits for presymptomatic children made the drug cost-effective at prices up to $1.9 million by one benchmark and up to $2.1 million by another, it said.

Pearson acknowledged the scale and timing of the switch were unusual, but said it was driven by the data, not outside pressure. “We weren’t trying to fit into somebody’s preexpectation of where the number would be, believe me,” he said.

He immediately caught flak from insurers.

“I got a lot of phone calls saying, ‘Why on earth did you say $2.1 million was a fair price? How could that possibly be the case? We’re going to get swamped with this,’” he recalled.

The Gaynors, linking to news coverage on Zolgensma’s launch, wrote on the Sophia’s Cure Facebook page that they were “ecstatic” for children newly born with SMA, but that helping create the world’s most expensive drug “is certainly not what we had in mind.”

Malone said he thought it was mostly the potential for blowback that had prevented Novartis from demanding even more for Zolgensma. He’d recommended charging the full $5 million.

“Obviously it didn’t stick,” he said. “They decided not to price the product there, I think, because of the political backlash they would’ve gotten being the first out of the gate at that price point.”

In the months after Zolgensma hit the market in the U.S., parents of children with SMA frequently ran into resistance from health insurers that refused to pay for it.

Between late 2019 and mid-2022, Chicago attorney Eamon Kelly represented at least seven parents battling health plans across the country, helping them appeal denied claims or representing them at state Medicaid hearings.

Hailey Weihs came to Kelly when her insurer, a Medicaid-managed care plan in Texas, wouldn’t pay for Zolgensma for her infant daughter Aniya. As the coverage dispute dragged on, Aniya developed tongue tremors and lost the ability to bear weight on her legs.

Kelly won the case, as he had all the others, but Aniya’s five-month wait to get the drug was terrifying. “Every day kids with this disease lose motor neurons,” Weihs said. “When you lose them, you cannot get them back.”

Now state Medicaid programs and most employer health plans cover Zolgensma, but they often limit which patients get access. Some require doctors to get approval in advance before providing the treatment or impose restrictions on who’s eligible that go beyond what’s on the drug’s label, such as requiring an SMA specialist to prescribe it.

Though fewer than 300 American children are born each year with SMA, treatments for the disease annually rank among the top 20 drug classes for Medicaid spending. From 2019 through 2022, Medicaid spent $309 million on 208 Zolgensma claims, an average of almost $1.5 million per claim. (Under federal law, Medicaid doesn’t pay list price for drugs, getting substantial rebates; other payers also negotiate discounts.)

Globally, more than 4,000 children have been treated with Zolgensma, Novartis said. The drug topped $1 billion in annual sales in its second full year on the market. Through 2024, the company had reported over $6.4 billion in revenue from Zolgensma sales.

Novartis is working to expand use of the drug in older children, in part by seeking approval for a second version of the drug, administered by spinal injection, for children with less severe SMA.

“We are unwavering in our commitment to the SMA community and will continue to advance efforts to ensure access to Zolgensma for SMA patients who may benefit from this transformative, one-time gene therapy,” the company said in its statement.

Still, more than five years after Zolgensma’s approval in the U.S., the drug remains out of reach for children in many low- and middle-income countries.

Love, KEI’s director, said he’s heard from families in countries like India and South Africa, where it’s a struggle to obtain not only Zolgensma, but also other SMA treatments available in the U.S.

“It’s maddening to me,” he said.

After setting aside their charity work, the Gaynors refocused their energy on Sophia and her two younger siblings, who don’t have SMA.

The Gaynor family (Photo courtesy Vincent Gaynor)

They’ve taken the clan to Disney World and to the Bahamas to swim with dolphins. Their youngest, who’s 8, lies beside Sophia on her bed and watches movies with her.

Now 15, Sophia had her longest-ever hospitalization in early 2024 when a virus caused her blood sugar to plummet and triggered frequent seizures. She didn’t wake up for two weeks. Since then, she’s been weaker, her affect flatter.

Her parents say they don’t think about the future. “Our focus is that she’s happy, that there’s love all around her,” Catherine said. “It’s just day to day.”

The Gaynors have taken solace in the idea that, through Sophia’s Cure, their daughter has made a difference for all the children with SMA who came after her. “That was kind of our consolation prize,” Catherine said.

One of those kids turned out to be her cousin, Vincent’s sister’s son, who was diagnosed with SMA in 2023 and then treated with Zolgensma. He walked at 10 months and now races around. “That helped me, in part, feel better about what we did,” Vincent said.

He still bristles at the drug’s price, which he blames on the payouts hauled in by those at AveXis and now Novartis.

“All those people, they all came in at the 12th hour once the trial was funded and you had the breakthrough,” he said. “Once it was taken from us, it was all about greed.”

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Kirsten Berg contributed research.