Pro Publica

A patient in a psychiatric ward was seen on video possibly being sexually assaulted. No one reported it.

by Duaa Eldeib and Tony Briscoe

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

A Chicago hospital with a history of patient-care violations didn’t tell police that a patient in its psychiatric unit may have been sexually assaulted by another patient, even though the incident was caught on surveillance video.

Nor did the facility, Roseland Community Hospital on the far South Side, closely monitor the alleged attacker — identified in records as a 49-year-old man with a history of sexual violence and aggression — as it was supposed to do.

Five months after the June 24 incident, hospital officials acknowledged, Roseland still has not identified the potential victim.

Roseland president and CEO Tim Egan said the hospital did not become aware of the incident until about two months after it happened. Yet even then, the hospital did not notify regulators at the Illinois Department of Public Health, as the agency said it should have done. The agency investigated the incident about a week after the hospital learned of it, after the first of two complaints to the agency.

The state public health department also did not contact law enforcement officials, doing so only last week after ProPublica raised questions about how the agency had handled the possible assault.

IDPH reported the incident to the Chicago Police Department and the Illinois State Police. Chicago police said Monday they have opened an investigation into the incident; Egan said police asked the hospital to hold the video footage. State Police have confirmed they received the report.

In response to ProPublica’s questions, IDPH also said that it is exploring changes to state public health regulations that would require hospitals to report suspected patient-on-patient sexual assaults to law enforcement. Currently, only alleged staff-on-patient assaults must be reported.

While Roseland knows the identity of the apparent aggressor, the identity of the potential victim is still in question. A complaint to state officials obtained by ProPublica identified the alleged victim as a 21-year-old developmentally disabled man with autism.

His caregivers said the young man, who lives in a state-funded group home, functions like a 9- to 11-year-old, is fascinated by fire trucks and bounces up and down at the sight of Christmas lights. They said the young man recently told a nurse he had been touched inappropriately at a hospital, which he didn’t name.

The caregivers have filed a report with Chicago police and also retained an attorney for him.

Egan, however, said in an interview that the 21-year-old, who is white, is “unequivocally” not the second patient. An internal hospital investigation has eliminated him because, he said, both patients in the video are Black. Federal records do not identify the two patients by race and say the face of the second patient is not visible.

Roseland’s behavioral health unit has a capacity of 24 patients, yet Egan said hospital officials had not interviewed any of the patients who were there the day of the alleged assault.

“The video depicts unacceptable behavior and is completely counter to Roseland Community Hospital’s commitment to providing safe and effective patient care,” Egan said.

He said the hospital continues to investigate the circumstances surrounding the incident, including whether it was consensual. Roseland began its investigation after it discovered the footage in August, Egan said, but IDPH arrived and asked for the video before the hospital was able to get answers.

The hospital would have called police immediately, Egan said, if it “looked like there was a crime committed.”

Egan said Roseland has implemented a number of changes over the past several months. The hospital has cut ties with the unit’s former medical director. Roseland also fired an employee who had been outside the day room in the psychiatric unit when “confirmed inappropriate sexual behavior between two patients” occurred, according to hospital records obtained by ProPublica.

“We have new policies and procedures. New physicians in charge of the behavioral health unit and a new chief quality officer being hired, and they will ensure this and other protections and precautions will be taken,” Egan said.

Roseland, a small nonprofit hospital, has long struggled financially and has faced repeated scrutiny from state and federal authorities. More than 70% of its patients received Medicare or Medicaid last year; around 90% of the facility’s patients were Black. After closing its adolescent behavioral unit in February, Egan said, it opened its adult unit in March. The hospital hopes to receive state funding to expand the adult unit and reopen the adolescent unit, he added.

“There is a tremendous need for behavioral health expansion on the South Side of Chicago specifically,” Egan said.

The Centers for Medicare and Medicaid Services, which regulates hospitals receiving federal funding, cited Roseland four times between July and September for incidents where its behavioral health unit placed patients in “immediate jeopardy,” its most serious citation that indicates patients had been in imminent danger of serious injury or death.

The hospital failed to properly monitor patients, adequately investigate the incident involving the two men and ensure the safety of its patients, “potentially affecting the care of all psychiatric patients,” according to documents obtained through open records requests.

At the time of the June 24 incident, Roseland had no social worker on staff in the behavioral health unit, an omission that allowed for more than 50 patients to be discharged from the hospital without proper planning for follow-up treatment, medication assistance or housing arrangements, according to federal records. Egan attributed those problems to former personnel.

“All the deficiencies that were uncovered since the IDPH survey have been corrected,” Egan said. “That’s why we’ve launched the investigation so we better understand any mistakes so they would be corrected immediately.”

“We meet every regulatory survey with absolute transparency,” he added.

The video of the two patients, according to federal inspection records, was discovered when hospital staff were looking at footage during an unrelated internal investigation. It was turned over to state investigators during a surprise visit in early September that was prompted by a complaint to the IDPH about the incident between the patients.

The footage showed “sexual activity” between two men in the corner of the day room; one of the patients has his hospital gown raised above his waist and is leaning into the other patient.

When the psychiatric unit’s director was told about the video by employees, she did not begin an immediate investigation or interview workers because she was scheduled to have time off the next three days, she told state investigators.

Roseland officials told state investigators that the hospital had begun an inquiry into the incident on Aug. 31. But by Sept. 2, the hospital’s quality department had not received a report from the unit’s director, despite hospital policy that requires employees to report situations that could or did result in physical or psychological harm, federal records show.

“This occurrence should have been reported and an investigation should have been conducted immediately,” the chief nursing officer told the state investigators.

An advocate for people with disabilities said hospital officials lost valuable time.

“Memories do fade,” said Stacey Aschemann, a vice president at Equip for Equality, a nonprofit with offices across Illinois. “So timely investigating is essential to figuring out who was involved, maybe who wasn’t doing their job, if that was a concern. Timeliness is really important in these circumstances.”

And although the incident is described in federal reports as “sexual activity,” a catch-all phrase used when consent cannot be determined, it is impossible to know for sure whether consent was given without identifying the second patient, all the more reason the hospital should have investigated, Aschemann said.

Only the face of the alleged assailant was visible on the video, records show. Hospital workers told state investigators they “believed” they knew his identity: a man with a history of psychosis, aggressive behavior and an “inability to maintain safety” of himself or others, records show. But workers told state investigators that they had not definitively determined either patient’s identity, according to federal records.

The hospital was cited by inspectors for failing to provide him one-on-one monitoring.

Roseland’s risk manager also expressed concern for the safety of the patients because of the improper monitoring, telling state investigators in September: “There is potential for harm if an investigation is not done right away to maintain safety measures or correct any concerns.”

In response to the investigation’s findings, according to federal documents, the hospital built a wall to eliminate blind spots in the recessed area in the day room and to provide clear visibility for staff and cameras. The hospital, the documents show, also revised its policy to add precautions for supervising patients who act out sexually and planned staff training on identifying and reporting potential abuse.

By late September, federal officials determined that the hospital had returned to compliance.

The second complaint about the incident was filed in October and alleges that the hospital “intentionally lied” to IDPH about not knowing the identities of the two patients, both of whom are named and had been frequently admitted to the psychiatric unit. Egan disputes that claim.

The complaint, which was obtained by ProPublica, was filed with the inspector general for the Illinois Department of Healthcare and Family Services, which reached out to the state Department on Aging and the Department of Human Services to determine which agency might investigate the incident.

All three state agencies said they followed protocol and did not have the jurisdiction to investigate the complaint, which falls to IDPH. The other agencies ensured that IDPH, which licenses state hospitals and investigates complaints on behalf of the federal Medicare agency, was notified.

Federal officials determined IDPH “fully investigated the June 24, 2021, incident, cited the facility at the highest level, and did not need to reopen the prior investigation,” said IDPH spokesperson Melaney Arnold.

Arnold said hospitals should report sexual assaults to the police and IDPH. Her agency did not initially alert police, she said, in part because investigators learned of the incident more than two months after it occurred and do not know the identities of the two patients. Following questions from ProPublica, Arnold said the agency notified police.

In addition to exploring changes to its reporting regulations, IDPH is also updating its rules on how closely some patients must be monitored and procedures for how incidents involving patient sexual activity are investigated.

Three months after the incident, the 49-year-old was charged with misdemeanor battery after he shoved a man’s head against a wall in the emergency room of a hospital in Chicago’s south suburbs, court records show. After he failed to return to court, he was taken into custody and was still being held in Cook County Jail on Monday.

Efforts to reach him and his family were unsuccessful, and he is not being named because he hasn’t been charged criminally in the Roseland incident.

ProPublica also is not naming the 21-year-old because he is allegedly a victim of sexual assault. His caregivers and the home where they work are not being named because doing so could identify the 21-year-old.

The caregivers blame inaction by hospital and public health officials for a monthslong delay in reaching out to the 21-year-old to see if he needed treatment. The caregivers said they had noticed behavioral changes they couldn’t explain in the young man when he returned to the group home following his hospitalization at Roseland.

The caregivers said they learned of the incident in early November — more than four months after the alleged assault — from the Illinois Department of Human Services following ProPublica’s inquiries with the state. The caregivers said the state described the incident as an alleged assault.

“We had never heard anything. We should have been notified immediately,” one caregiver said in an interview, adding: “It makes us feel like they don’t care about the individuals — that they don’t matter. Had this happened to a well-bodied person … more would have been done.”

Since the incident, the 21-year-old has had frequent outbursts and has repeatedly tried to run away from his group home, the caregivers said. They are reluctant to send him to Roseland again.

“We don’t know what’s been done to him,” one of the caregivers said.

They saw me and thought the worst

As Sojourner Gibbs pulled out of her parking space at a Sam's Club in Jefferson Parish, Louisiana, one afternoon last summer, she felt the familiar, sickening symptoms of diabetic shock. Weakness, confusion. She began to sweat and shake uncontrollably. And then, Gibbs said, panic set in.

Her car lurched forward a few feet. She slammed on the brakes. The groceries she had just purchased for her family's Juneteenth barbecue jostled in the back. People started honking their horns. A concerned woman walked up to her car. “I'm a diabetic! I need help!" Gibbs yelled.

The woman called 911. Dispatcher notes show a report of a “Black female sitting/screaming" in a gold Ford Expedition. “Appears scared." Moments later: “Needs EMS."

Jefferson Parish Sheriff's Office deputies arrived before the paramedics. First just one, then three more. Gibbs, a doctoral candidate in public policy, thrashed in the front seat, her body stiffening. She recalls telling deputies she was diabetic. The sheriff's department report says she told deputies to “go away."

She insists she heard one say, “This bitch is lying. She's high on something."

As deputies surrounded the car, Alicia Dardar, who is white and grew up in Jefferson Parish, pulled up nearby. Dardar felt uneasy as she saw what was happening, she said, and she thought of George Floyd, who a month earlier had been killed by a Minneapolis police officer. She started recording with her cell phone.

Her video shows the four deputies dragging Gibbs out of the driver's side door. Gibbs cries, “I don't know why you're doing this." Then a deputy grabs one of Gibbs' legs from underneath her, sending her face-first into the dirt. They secure her hands behind her back with zip ties, restraining her as paramedics arrive.

She remembers thinking of her sons, 10 and 4, and praying: Please, Lord, do not take me.

When paramedics arrived and took Gibbs' blood sugar level, it was 17 milligrams per deciliter. Levels below 40 milligrams can be critical, even fatal. She said one paramedic told her, “You could have died." While she was in the ambulance, deputies combed through her belongings in her SUV.

Over the next few months, Gibbs would file a complaint with the sheriff's internal affairs division, hoping the officers involved would face consequences. What she didn't know at the time, but would later learn, is that the Sheriff's Office would fail to follow its own internal investigations policy. Despite her complaints, no official would ever interview her or Dardar before exonerating the officers of all wrongdoing. The Sheriff's Office did not respond to questions about Gibbs' case.

Had the scene in the parking lot played out in New Orleans, just four miles away, Gibbs' pursuit of answers likely would have had very different results. That's because just over a decade ago, the U.S. Department of Justice released a scathing report about policing in the city. It found that the New Orleans Police Department had failed to properly track and review when its officers used force, that its internal investigation system was deeply flawed, that officers were disproportionately shooting and killing Black people, and that years of ignored complaints and stonewalling had eroded public trust.

The report led to a settlement agreement with the city in 2013 that has resulted in drastic overhauls in policing, turning a troubled department into a model — albeit an imperfect one — of reform. Federal monitors wrote in February that despite still needing some improvement, NOPD had become a “changed agency."

But the DOJ has never launched an investigation in Jefferson Parish, a suburb of about 440,000 people west of New Orleans that straddles the banks of the Mississippi River. Its Sheriff's Office is one of the largest in the state, with jurisdiction over the entirety of the parish's 665 square miles, including those cities that have their own police departments.

Here, policing looks a lot like it did in New Orleans a decade ago, with racial disparities in the people officers shoot, little transparency in cases where force is used, and a flawed internal affairs process that critics say protects problematic deputies instead of the public. Records and data collected over the last year by WWNO/WRKF and ProPublica support the claims that many Black residents have made for years: that deputies treat white residents and residents of color in significantly different ways.

More than 70% of people who deputies shot at during the past eight years were Black, more than double the 27% of the population that is Black, the news organizations' investigation found. Seventy five percent of the people who died — 12 of 16 — after being shot or restrained by deputies during that time were Black men.

The disparities resemble those of the Louisiana State Police, which has come under heavy fire recently over a pattern of violence directed at Black arrestees. At that agency — which Black lawmakers have asked the Department of Justice to investigate — 67% of incidents where the police used force in recent years have targeted Black Louisianans, the Associated Press reported Sept. 9. Black people make up nearly one-third of the state's population.

The Jefferson Parish Sheriff's Office, when questioned about such incidents, failed to provide vital details, exhibiting a lack of transparency. In response to public records requests, the office could not account for how often its deputies use force. It also refused to provide the news organizations with copies of complaints against deputies.

After failing to respond to weeks of emails and voicemails, Sheriff Joe Lopinto declined to be interviewed for this story and did not respond to written questions. He said only that when his deputies commit serious misconduct, they are arrested, noting that at least nine deputies have been booked since he became sheriff in 2017, although he could not say how many of those incidents involved officers inappropriately using force.

Based on news reports, only one of those bookings appeared to involve excessive force — a 21-year Sheriff's Office veteran who was accused of pepper-spraying a man without justification.

Gibbs said she has heard stories of abuses by Jefferson Parish deputies for years, but she didn't see herself as someone who would ever have a reason to worry.

“I thought as long as I do the things I'm supposed to do, I'd be OK," she said. “We pay our taxes. We have a very nice home. We go to work. We go to school. We educate our children."

In the end, though, she said, none of it mattered. The deputies didn't see a woman experiencing a medical emergency. They saw a Black woman acting irrationally, pegged her as a drug addict, and treated her as such, she said.

“They had a narrative in their minds of who I was and why I was and where I was. And no matter how many times I said I'm diabetic, no one responded to that," Gibbs said. “They saw me and thought the worst."

Across the Parish Line

Carved out of land that belonged to Orleans Parish until 1825, Jefferson Parish encompasses sprawling suburbs outside the city and stretches down to fishing villages on the Gulf of Mexico. The histories of the two parishes are intertwined, their shared border revised over the years by annexations for reasons both political and pragmatic.

As the two communities grew, their histories diverged. New Orleans is an international port city, a tourist mecca famous as the birthplace of jazz. Jefferson Parish boomed in the white flight movement of the 1950s and 1960s, once electing David Duke, the grand wizard of the Ku Klux Klan, to the state legislature.

Although the population has diversified over the years — Black people now account for more than a quarter of the population, and Latinos have grown to account for 15% — Jefferson Parish voters supported Donald Trump in the past two presidential elections and sent conservative Republicans to Congress, including former U.S. Sen. David Vitter and Rep. Steve Scalise.

And while the margins of victory have grown tighter in recent years, the area's conservative bent has repercussions for the oversight of the Sheriff's Office. That's because the Jefferson Parish sheriff, like the majority of the country's sheriffs, is an elected position and answers only to the voters.

The sheriff also derives considerable power from the Louisiana Constitution, which prescribes that the position be unconstrained by governmental or civilian oversight. Sheriffs don't answer to politicians, unlike in New Orleans, where the police chief is appointed by the mayor and can be fired. In New Orleans, the City Council approves the police budget, but the Jefferson Parish Sheriff's Office is funded through sources, such as property and sales taxes, that do not require outside approval. Public calls for accountability ultimately can only end up with the sheriff.

The late Sheriff Harry Lee, who served for 28 years until his death in 2007, called his job “the closest thing there is to being a king in the U.S." Lee openly espoused racist views in public statements, once declaring: “If there are some young Blacks driving a car late at night in a predominantly white area, they will be stopped." He eventually backed off the order, but he announced 20 years later that his solution to violent crime was “only stopping Black people."

When Hurricane Katrina and the failure of the federal levees flooded New Orleans in 2005, it prompted a large crowd of mostly Black people to attempt to cross the Crescent City Connection bridge into Jefferson Parish. They were confronted by sheriff's deputies and Gretna Police Department officers and forced to turn back. At least one officer fired a shot in the air, according to local reports.

No one was hurt, but the law enforcement blockade led to protests and allegations of racism from civil rights groups. Lee defended the officers' actions, saying the area had already accepted thousands of evacuees and didn't have enough supplies to care for thousands more.

Although the DOJ later found that the officers hadn't intentionally broken any laws, Jonathan Smith, who was with the DOJ at the time, said the events were a “big red flag." Federal investigators knew at the time that Jefferson Parish was “a troubled department," said Smith, who served as chief of the Special Litigation Section for DOJ's civil rights division from 2010 to 2015. He added, though, that he could not discuss whether any specific agency was of interest during his tenure.

Ultimately what happened on Danziger Bridge in New Orleans three days later overshadowed the Jefferson Parish blockade. There, NOPD officers shot six Black people who were part of a crowd fleeing the flooded city, killing two of them. Police attempted to cover up the murders by planting evidence, fabricating witnesses and falsifying reports, an investigation later found.

A united front of civil rights attorneys, elected officials and Black and white residents demanded accountability. The DOJ launched its yearlong investigation. And in 2011, the department issued its damning report.

“NOPD's failure to ensure that its officers routinely respect the Constitution and the rule of law undermines trust within the very communities whose cooperation the Department most needs to enforce the law and prevent crime," DOJ investigators concluded. Two years later, the DOJ entered into a consent decree with the police department, which agreed to sweeping changes in how it operates and strict outside oversight.

Several former federal officials told the news organizations there is no particular set of problems that trigger a DOJ investigation, which is a necessary step before the department can seek a consent decree. High-profile flare-ups — like the fatal shooting of Michael Brown in Ferguson, Missouri, or the death of Freddie Gray in Baltimore — tend to bring scrutiny.

There are, however, certain patterns of misconduct that have proven to be of interest to the Department of Justice, Smith said. Most of them involve findings of racial disparities, and many involve the police using excessive force and failing to discipline officers for wrongdoing.

Smith said that a lack of accountability is “probably the most important thing I've seen in every department where there's been a problem. That gives people impunity to engage in bad conduct."

Evidence of problematic policing, however, does not ensure that a federal investigation will be conducted. At the time Smith was with the DOJ, he said he had a maximum of 15 attorneys working on police investigations. While the department would not provide updated numbers on staffing, it's clear the Civil Rights Division has to make some hard choices about where to focus its efforts among the more than 18,000 law enforcement agencies across the country, Smith said.

DOJ involvement also tends to go in waves and largely tracks the politics of the president. President George W. Bush pursued just three consent decrees; President Barack Obama pursued 15. And under President Donald Trump, Attorney General Jeff Sessions circulated a memo cautioning against their use and entered into zero.

After President Joe Biden's election, Attorney General Merrick Garland quickly rescinded Sessions' order and announced investigations into the Minneapolis and Louisville, Kentucky, police departments following the deaths of George Floyd and Breonna Taylor. The DOJ also opened an investigation into the Phoenix Police Department in response to accusations that officers used excessive force against homeless people.

Absent a consent decree, imposing more accountability on the sheriff's office would probably require an amendment to the state constitution, according to experts, which is unlikely to pass given the opposition from both law enforcement and the public.

Advocates say that leaves the DOJ as their best hope, citing the changes they've seen in New Orleans.

“The consent decree has played a significant role in the way the NOPD shows up now," said Norris Henderson, the founder and executive director of the New Orleans-based advocacy group Voice of the Experienced, which promotes criminal justice reforms. “JPSO has been operating with reckless abandon for years."

A Department That Polices Itself

One night last August, a little after 4 a.m., Theresa Burke arrived at her son Ferel's hospital room in New Orleans, summoned by a phone call from a nurse who said he had been brought in by deputies, bruised and bloodied.

Hours earlier, Burke had tried to find Ferel, 13 at the time, after hearing he had been detained for stealing a car with two friends and attempting to run from officers. She didn't think to contact local hospitals. The deputies who met Burke outside her son's door tried to stop her, telling her she wasn't authorized to see him. She refused to take no for an answer.

As Burke approached her son's hospital bed, where he was lying on his side, his wrists handcuffed behind his back, the 32-year-old dental assistant hit record on her phone. She provided a copy of the resulting video to WWNO/WRKF and ProPublica. Burke can be heard gently calling her son's name. “Ferel? Ferel, wake up."

He was drenched in sweat, his face bloody, Burke said. He wavered in and out of consciousness.

“Look at me," she said, keeping her voice low so the guard at the door couldn't hear. “Look at me. What's wrong?"

“Beat me up," he responded.

“Beat you up? Who beat you up?" Burke asked her son.

“Police."

Burke paused to compose herself and said: “Mama gonna take care of it. Don't worry, ya hear?"

But as she sought accountability and an explanation for her son's injuries, Burke would find no easy answers from a department that answers only to itself.

Over the next year, she would hear conflicting accounts: Her son said a deputy grabbed his hair and smashed his head into the pavement. The deputy who arrested him wrote that Ferel suffered minor injuries that could have been incurred in the car wreck or during the arrest.

But here's one thing all parties ultimately agreed upon: an officer struck Ferel. The arresting deputy said Ferel resisted, so he “delivered two closed fist strikes to Mr. Burke's abdomen," after which he “finally complied."

In New Orleans, since the DOJ investigation, that simple fact — admitted to by the officer himself — would have prompted an internal affairs investigation, even without a formal complaint, experts said.

In addition, the department's use-of-force policy includes a detailed list of prohibited actions, such as neck holds, warning shots, shooting at moving vehicles and pistol whipping. It states that officers have a duty to intercede when they suspect a colleague is using excessive force. There is also a separate 14-page policy laying out the reporting requirements for uses of excessive force.

But none of that applies in Jefferson Parish.

The Sheriff's Office has a policy that says deputies should only use as much force as necessary to protect themselves and the public. It does not include a list of prohibited actions. Instead, it states that “generally" deputies should not fire warning shots or shoot at moving vehicles unless the driver is using deadly force.

The policy also does not say what level of force should prompt an intervention or internal investigation. It states only that when a deputy's use of force results in an injury to either the deputy or a civilian, the deputy must complete a report while a ranking officer goes to the scene to determine and document if there are witnesses or evidence.

In Jefferson Parish, it's not clear that the department is tracking how its officers use force at all. In response to requests, the department provided only records of shootings. But the vast majority of use-of-force incidents — like Ferel's — do not involve shootings, experts say. However, in response to requests for records regarding those non-shooting incidents, the Sheriff's Office provided none, instead sending along files on a suicide and murders committed by civilians. The research organization Police Scorecard Project made a similar request for data on use-of-force incidents. The Sheriff's Office responded by saying those records don't exist.

For a long time, New Orleans' system was similarly broken.

But after the DOJ intervened, the NOPD created a Use of Force Review Board that reviews all incidents. The outcomes of use-of-force investigations are published in an online database. The number of times NOPD officers have reported using force has fallen by half over the past five years, from 754 in 2015 to 338 last year, due largely to improved training, according to the consent decree monitor and criminal justice experts.

In Jefferson Parish, there was no independent monitor Burke could turn to for help. She posted on Instagram about Ferel's injuries: “I am deeply saddened," she wrote, “and I want justice for my child."

Then she hired attorney Chris Murell, who filed a civil lawsuit and asked the Sheriff's Office to provide all records related to Ferel's arrest and injuries. Their response, reviewed by a reporter for WWNO/WRKF and ProPublica, did not include an internal affairs investigation, a use-of-force review or any mention of discipline. The only time the punching is mentioned is in a single sentence in a report prepared by the deputy who arrested him.

These factors — the deputy's admission, the boy's hospitalization, his mother publicly accusing the deputy of attacking her son — should have raised red flags within the Sheriff's Office and prompted an internal affairs investigation, said Sam Walker, emeritus professor of criminal justice at the University of Nebraska at Omaha.

“I would assume that hospitalization of a use-of-force victim would automatically trigger an [internal affairs] investigation," Walker said. “The officer's claims cannot be accepted without at least some investigation."

But Burke said that's exactly what happened. And some people in the parish seem to be OK with that, she said.

“They're going to stand together [with] their police officers if they do wrong, especially if it's a Black kid," Burke said. “They don't care."

“My Son Has a Bullet Wound"

Even in the most high-profile use-of-force incidents — when officers shoot someone and or a person dies in custody — the Sheriff's Office has faced similar criticisms. Since 2018, a string of incidents where deputies shot Black people has prompted mounting calls for reform. Those calls intensified last summer amid the nationwide protests in response to Floyd's death and allegations that the office concealed from the public that a deputy shot 14-year-old Tre'mall McGee.

Tre'mall and three friends ran from deputies in March 2020 after being pulled over in a stolen car. Tre'mall was facedown, trying to squeeze under a shed in a backyard, when a deputy shot him in the shoulder. (The deputy said the boy moved his arm and he feared Tre'mall had a gun. The boy did not.) The deputy could not be reached for comment.

Tre'mall's mother, Tiffany McGee, said she tried for months to get answers about her son's shooting, but said the Sheriff's Office stonewalled her: Tiffany said she met with the sheriff's criminal investigations bureau and asked to file a complaint. They sent her to the internal affairs division, which told her to contact the New Orleans branch of the FBI. The FBI sent her back to the Sheriff's Office, where detectives referred her to the head of the gun violence unit, who told her their officers hadn't shot at anyone recently.

When McGee pressed the sergeant, he asked, “He was shot with a firearm, not a Taser?" according to a recording of their conversation.

“My son has a bullet wound," she replied. “That is never going to go away. At 14 years old, OK?"

Frustrated, McGee finally turned to the media. When reporters questioned Lopinto last summer, he insisted the Sheriff's Office has a “great reputation of doing the right thing." But, he emphasized, “we have the authority to defend ourselves. And guess what? There's people out there that shoot at us."

Lopinto then lashed out at the attorneys and families suing him. He accused them of spreading a “false narrative for the sake of trying to get a payday" and dismissed Tre'mall's injuries as “non-life-threatening." In response to the family's lawsuit, the Sheriff's Office said its deputies' actions were “reasonable under the circumstances" and accused Tre'mall of negligence.

After WWNO/WRKF and ProPublica filed a public records request for investigative reports into every time deputies shot at someone since 2013, it received records for only 16 of 35 incidents. The Sheriff's Office withheld the remainder, saying some (nearly four years old) were still under investigation, were the subject of pending criminal litigation or involved juveniles. In at least a dozen of the 35 shootings, deputies' accounts were disputed by witnesses or the people who were shot at, according to public records, news reports and subsequent lawsuits.

The news organizations' review found that of the 40 people deputies shot at during the past eight years, 29 were Black — meaning 73% of people shot at by police were Black, more than double their share of the population. (In some of the 35 shootings, more than one person was shot at.)

After similar findings by the DOJ in New Orleans, NOPD now typically releases body camera footage within 10 days of an officer shooting at someone or an incident that results in the hospitalization or death of a civilian. Each shooting triggers independent reviews of witness interviews, autopsies and disciplinary hearings.

In New Orleans, “people can have faith in the process," said Stella Cziment with the New Orleans Independent Police Monitor, a civilian oversight agency. “There's a lot of eyes on that decision, and a lot of evidence behind that decision."

Without the benefit of that transparency, people in Jefferson Parish alleging abuses by deputies have turned to the courts. Since 2013, nearly twice as many lawsuits alleging wrongdoing by deputies have been filed against the Sheriff's Office as against the NOPD, despite NOPD having about 1,100 officers compared to about 760 at the Sheriff's Office, according to a WWNO/WRKF and ProPublica review. Three-fourths of the plaintiffs in the Jefferson Parish lawsuits were Black.

The litigation has exposed problems in how the Sheriff's Office handles some of its most serious cases. While it conducts criminal investigations to see if deputies violated the law, the Sheriff's Office repeatedly said in sworn statements in court filings that it did not conduct internal affairs investigations into high-profile deaths of people in police custody.

This is significant, said Lou Reiter, a national police consultant and trainer. Internal affairs investigations not only scrutinize the actions of the deputy but also assess the response of the organization as a whole. Is there a strong enough policy in place to prevent misconduct? Is it enforced? Did supervisors react appropriately and discipline those found to be in violation of the agency's ethical standards?

“They're a fact-finding, unbiased look to say, 'How can we protect all the stakeholders?' Because, in the end, if you don't do a good job, the community pays for it," Reiter said of internal affairs investigations.

Eric Parsa, 16, died in January 2020 after deputies — including one who weighed more than 300 pounds — sat on his back for at least nine minutes while he was facedown on the pavement of a parking lot, according to court records. The coroner ruled the severely autistic boy's death was an accident as a result of excited delirium, with “prone positioning" as a contributing factor.

The family filed a lawsuit against the Sheriff's Office, which issued a press release saying the suit was “rife with false claims and malicious accusations" and claiming that Parsa had attacked his father and deputies were trying to control him.

William Most, an attorney suing on behalf of Parsa's parents, asked through discovery if the Sheriff's Office had conducted an internal affairs investigation. The answer was no, according to court filings. No one was disciplined.

Most, looking to establish a pattern as to how the Sheriff's Office handles in-custody deaths, also asked about the May 2018 death of 22-year-old Keeven Robinson, whose family claims he died after deputies beat and choked him. Lopintotold reporters he suspected Robinson's death was due to a combination of asthma and poor air quality. But the coroner ruled his death a homicide by asphyxiation and that his injuries were consistent with someone squeezing his neck or choking him.

As with Parsa, the Sheriff's Office said it did not conduct an internal affairs investigation into Robinson's death. It also said no one was disciplined.

Walker, the criminal justice professor, said the absence of internal affairs investigations into such deaths is “inconceivable."

“I don't think this occurs anywhere else," he said.

A Flawed Complaints Process

After Gibbs' encounter with deputies, she was taken to a local hospital where she stayed for several hours while her blood sugar levels normalized. She returned home later that day with leaves and dirt in her hair from being thrown to the ground. Her arms were sore from where the deputies grabbed her. She had scratches on her wrists from being handcuffed.

She stood before her husband and two children, shaken and distraught, and wept.

Ten days after the incident, Gibbs — named after the famed abolitionist Sojourner Truth — filed a complaint with the sheriff's internal affairs division, hoping it would spur an investigation and result in disciplinary action against the deputies.

“I was pinned in the dirt by an officer's knees on my right shoulder and right thigh," Gibbs wrote. “In between cries, I said, 'Please don't kill me. I am a diabetic.'"

Since that day, she wrote, she'd had trouble sleeping, often lying awake at night thinking about how when she needed help, she “instead received harm."

She sent a follow-up email three days later, asking the Sheriff's Office to preserve any evidence of the encounter and to provide any police reports.

Days went by, then weeks, with no response. Nobody reached out to Gibbs for an interview, which is a direct violation of the sheriff's internal investigations policy. It states that the investigator shall “thoroughly exhaust all leads," which includes interviewing “the accused employee, all principals, and all witnesses."

When WWNO/WRKF and ProPublica filed a public records request for copies of all complaints against Sheriff's Office employees during the past two years, the office denied the request, calling it overly burdensome and an invasion of privacy. The agency said it couldn't even provide the number of complaints filed, stating such a number “does not exist."

When the news organizations narrowed their request, seeking only substantiated complaints from 2017 through mid-2020, the Sheriff's Office turned up only one report. It involved a deputy who was suspended for three days after being accused of slapping and choking a patient in an ambulance.

“If you find out one out of every 50 [complaints] is sustained, that indicates a failure to really investigate and take seriously complaints about use of force," Walker said.

Ashonta Wyatt, a leader in Jefferson Parish's Black community who helped found an organization called the Village Keepers to push for reforms of the Sheriff's Office, said the lack of accountability in the complaint process has damaged public trust.

“We feel almost at his mercy," she said of the sheriff. “I have family members and friends that will not drive in parts of Jefferson Parish. Ever. They just won't do it."

NOPD's complaint procedures prompted similar criticisms of opacity before the DOJ investigation, but the department now publishes the outcomes of all complaint investigations in a public database.

During the three-year span in which Jefferson Parish substantiated only one complaint, NOPD substantiated 247, according to the department.

No Body Cameras

It's been more than a year since Dardar took video of Jefferson Parish deputies dragging Gibbs out of her vehicle. Dardar grew up in Jefferson Parish during the reign of Sheriff Harry Lee and remembers when he ordered deputies to stop Black people driving in white neighborhoods. She said she had long worried about how the Sheriff's Office treats Black people. But witnessing what happened to Gibbs was difficult, she said, particularly because her 12-year-old son saw the whole thing.

“I don't see how you could treat a fellow human that way, especially one who's screaming for help and zero threat to you," she said.

Dardar's video is the only footage Gibbs has seen of what happened that day. That's because the Jefferson Parish Sheriff's Office remains one of the few large law enforcement agencies both in Louisiana and across the country that does not use body cameras.

About 80% of U.S. police departments with at least 500 sworn officers had body cameras as of 2016, according to the most recent report by the Bureau of Justice Statistics.

Many more have adopted them since then. The St. Tammany Parish Sheriff's Office, one of the largest in Louisiana, entered into a $1.6 million, five-year contract that covers purchasing cameras, training officers on their use and storing the video footage.

The Gretna Police Department, located on the west bank of Jefferson Parish, followed suit in May.

“It's something that is good for the community, it's good for the officers," Police Chief Arthur Lawson said, according to local news reports. “If the officer is acting inappropriately or violates our policies, it gives us a tool there."

Lopinto, however, has consistently pleaded poverty, saying his department can't absorb the cost it would take to store the footage, which he estimated to cost at least $1.9 million annually.

After the shooting of 14-year-old Tre'mall McGee, the state House of Representatives unanimously passed a resolution requesting that Lopinto, by Jan. 1, 2021, present a plan to outfit deputies with body cameras.

Rep. Rodney Lyons, D-Harvey, who introduced the resolution, said there is a “parish-wide consensus" in support of the technology. Lopinto, however, dismissed the resolution as doing “nothing" and having “no effect of law." He has yet to present a plan.

About three months after Gibbs filed her complaint with the Sheriff's Office, she received a letter from the department. It was 99 words. Gibbs read it slowly, carefully digesting every sentence. It said the investigation into her complaint had been concluded. All four deputies had been “exonerated."

“This means that the investigation and reviews have determined that the facts do not reflect a violation of this Department's Code of Conduct," the Sheriff's Office wrote, concluding by thanking Gibbs for bringing the matter to its attention.

Gibbs said the letter retraumatized her. But she was not surprised.

“If you want to perpetuate a certain conduct, you keep that person moving forward," she said. “Institutions protect institutions."

In response to a lawsuit Gibbs later filed against the Sheriff's Office, the department defended its deputies' actions as “reasonable under the circumstances" and wrote that Gibbs, “by virtue of her own actions and conduct, was guilty of negligence."

When a reporter told Gibbs the deputy who grabbed her leg from underneath her also shot 14-year-old Tre'mall and later was promoted to detective, she put her head in her hands and cried.

January 6 Select Committee subpoenas Trump Chief of Staff Mark Meadows and other top aides

The U.S. House of Representatives select committee investigating the events of Jan. 6 issued subpoenas on Thursday to former White House Chief of Staff Mark Meadows and three other allies of former President Donald Trump.

These are the first subpoenas announced by the committee and represent its intensifying interest in what transpired in the White House before and during the assault on the Capitol. Demands for documents and depositions were also sent to former Deputy Chief of Staff Dan Scavino, former Pentagon Chief of Staff Kash Patel and former Trump adviser Steve Bannon.

The committee's letter to Meadows cited a June ProPublica report, which found that he was involved in shaping the rally that preceded the attack on the Capitol and presented evidence that organizers may have warned him about the dangers of an unpermitted march. The letter also cited emails Meadows sent to top Justice Department officials in the weeks before Jan. 6, asking the officials to investigate fringe theories pertaining to the 2020 election.

“The investigation has revealed credible evidence of your involvement in events within the scope of the Select Committee's inquiry. You were the President's Chief of Staff and have critical information regarding many elements of our inquiry," said the letter to Meadows, written by the committee chairman, Rep. Bennie Thompson, D-Miss.

ProPublica's reporting described senior Trump officials' efforts to contain an increasingly volatile situation in the days and hours before the Jan. 6 attack on the Capitol and added new details suggesting aides knew the day could turn chaotic.

The reporting also raised questions as to whether Meadows specifically was warned about the potential danger of an unpermitted march on the Capitol from the White House Ellipse, which had been announced days before Jan. 6 by far-right provocateur Ali Alexander.

Rally organizers Dustin Stockton and Amy Kremer feared that the march could present a legal liability and a public safety risk, according to Stockton and others. Stockton told ProPublica that he and Kremer sought to push top White House officials to address the concerns over the march.

He said he and Kremer agreed she would take the matter directly to Meadows. Shortly afterward, she told Stockton “the White House would take care of it," which he interpreted to mean she had contacted top officials about the march.

Kremer denied ever speaking to Meadows or any other White House official about her concerns going into Jan. 6. But in a Dec. 27 text from Kremer obtained by ProPublica, she told her fellow organizers that “the WH and team Trump are aware of the situation" with Alexander and that she needed “to be the one to handle both."

Through his adviser, Ben Williamson, Meadows declined to answer questions for our original story. Meadows and Williamson did not immediately respond to a request for comment on the subpoena.

The full picture of what Meadows and the other officials knew remains unclear, but the committee has asked that the Trump allies provide documents by Oct. 7 and appear for depositions the following week.

From Your Site Articles

40 million people rely on the Colorado River. It’s drying up fast

by Abrahm Lustgarten

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Series: Killing the Colorado

The Water Crisis in the West

On a 110-degree day several years ago, surrounded by piles of sand and rock in the desert outside of Las Vegas, I stepped into a yellow cage large enough to fit three standing adults and was lowered 600 feet through a black hole into the ground. There, at the bottom, amid pooling water and dripping rock, was an enormous machine driving a cone-shaped drill bit into the earth. The machine was carving a cavernous, 3-mile tunnel beneath the bottom of the nation's largest freshwater reservoir, Lake Mead.

Lake Mead, a reservoir formed by the construction of the Hoover Dam in the 1930s, is one of the most important pieces of infrastructure on the Colorado River, supplying fresh water to Nevada, California, Arizona and Mexico. The reservoir hasn't been full since 1983. In 2000, it began a steady decline caused by epochal drought. On my visit in 2015, the lake was just about 40% full. A chalky ring on the surrounding cliffs marked where the waterline once reached, like the residue on an empty bathtub. The tunnel far below represented Nevada's latest salvo in a simmering water war: the construction of a $1.4 billion drainage hole to ensure that if the lake ever ran dry, Las Vegas could get the very last drop.

For years, experts in the American West have predicted that, unless the steady overuse of water was brought under control, the Colorado River would no longer be able to support all of the 40 million people who depend on it. Over the past two decades, Western states took incremental steps to save water, signed agreements to share what was left and then, like Las Vegas, did what they could to protect themselves. But they believed the tipping point was still a long way off.

Like the record-breaking heat waves and the ceaseless mega-fires, the decline of the Colorado River has been faster than expected. This year, even though rainfall and snowpack high up in the Rocky Mountains were at near-normal levels, the parched soils and plants stricken by intense heat absorbed much of the water, and inflows to Lake Powell were around one-fourth of their usual amount. The Colorado's flow has already declined by nearly 20%, on average, from its flow throughout the 1900s, and if the current rate of warming continues, the loss could well be 50% by the end of this century.

Earlier this month, federal officials declared an emergency water shortage on the Colorado River for the first time. The shortage declaration forces reductions in water deliveries to specific states, beginning with the abrupt cutoff of nearly one-fifth of Arizona's supply from the river, and modest cuts for Nevada and Mexico, with more negotiations and cuts to follow. But it also sounded an alarm: one of the country's most important sources of fresh water is in peril, another victim of the accelerating climate crisis.

Americans are about to face all sorts of difficult choices about how and where to live as the climate continues to heat up. States will be forced to choose which coastlines to abandon as sea levels rise, which wildfire-prone suburbs to retreat from and which small towns cannot afford new infrastructure to protect against floods or heat. What to do in the parts of the country that are losing their essential supply of water may turn out to be the first among those choices.

The Colorado River's enormous significance extends well beyond the American West. In addition to providing water for the people of seven states, 29 federally recognized tribes and northern Mexico, its water is used to grow everything from the carrots stacked on supermarket shelves in New Jersey to the beef in a hamburger served at a Massachusetts diner. The power generated by its two biggest dams — the Hoover and Glen Canyon — is marketed across an electricity grid that reaches from Arizona to Wyoming.

The formal declaration of the water crisis arrived days after the Census Bureau released numbers showing that, even as the drought worsened over recent decades, hundreds of thousands more people have moved to the regions that depend on the Colorado.

Phoenix expanded more over the past 10 years than any other large American city, while smaller urban areas across Arizona, Nevada, Utah and California each ranked among the fastest-growing places in the country. The river's water supports roughly 15 million more people today than it did when Bill Clinton was elected president in 1992. These statistics suggest that the climate crisis and explosive development in the West are on a collision course. And it raises the question: What happens next?

Since about 70% of water delivered from the Colorado River goes to growing crops, not to people in cities, the next step will likely be to demand large-scale reductions for farmers and ranchers across millions of acres of land, forcing wrenching choices about which crops to grow and for whom — an omen that many of America's food-generating regions might ultimately have to shift someplace else as the climate warms.

California, so far shielded from major cuts, has already agreed to reductions that will take effect if the drought worsens. But it may be asked to do more. Its enormous share of the river, which it uses to irrigate crops across the Imperial Valley and for Los Angeles and other cities, will be in the crosshairs when negotiations over a diminished Colorado begin again. The Imperial Irrigation District there is the largest single water rights holder from the entire basin and has been especially resistant to compromise over the river. It did not sign the drought contingency plan laying out cuts that other big players on the Colorado system agreed to in 2019.

New Mexico, Colorado, Utah and Wyoming — states in the river's Upper Basin — will most likely also face pressure to use less water. Should that happen, places like Utah that hoped to one day support faster development and economic growth with their share of the river may have to surrender their ambition.

The negotiations that led to the region being even minimally prepared for this latest shortage were agonizing, but they were merely a warm-up for the pain-inflicting cuts and sacrifices that almost certainly will be required if the water shortages persist over the coming decades. The region's leaders, for all their efforts to compromise, have long avoided these more difficult conversations. One way or another, farms will have to surrender their water, and cities will have to live with less of it. Time has run out for other options.

Western states arrived at this crucible in large part because of their own doing. The original multistate compact that governs the use of the Colorado, which was signed in 1922, was exuberantly optimistic: The states agreed to divide up an estimated total amount of water that turned out to be much more than what would actually flow. Nevertheless, with the building of the Hoover Dam to collect and store river water, and the development of the Colorado's plumbing system of canals and pipelines to deliver it, the West was able to open a savings account to fund its extraordinary economic growth. Over the years since, those states have overdrawn the river's average deposits. It should be no surprise that even without the pressures of climate change, such a plan would lead to bankruptcy.

Making a bad situation worse, leaders in Western states have allowed wasteful practices to continue that add to the material threat facing the region. A majority of the water used by farms — and thus much of the river — goes to growing nonessential crops like alfalfa and other grasses that feed cattle for meat production. Much of those grasses are also exported to feed animals in the Middle East and Asia. Short of regulating which types of crops are allowed, which state authorities may not even have the authority to do, it may fall to consumers to drive change. Water usage data suggests that if Americans avoid meat one day each week they could save an amount of water equivalent to the entire flow of the Colorado each year, more than enough water to alleviate the region's shortages.

Water is also being wasted because of flaws in the laws. The rights to take water from the river are generally distributed — like deeds to property — based on seniority. It is very difficult to take rights away from existing stakeholders, whether cities or individual ranchers, so long as they use the water allocated to them. That system creates a perverse incentive: Across the basin, ranchers often take their maximum allocation each year, even if just to spill it on the ground, for fear that, if they don't, they could lose the right to take that water in the future. Changes in the laws that remove the threat of penalties for not exercising water rights, or that expand rewards for ranchers who conserve water, could be an easy remedy.

A breathtaking amount of the water from the Colorado — about 10% of the river's recent total flow — simply evaporates off the sprawling surfaces of large reservoirs as they bake in the sun. Last year, evaporative losses from Lake Mead and Lake Powell alone added up to almost a million acre feet of water — or nearly twice what Arizona will be forced to give up now as a result of this month's shortage declaration. These losses are increasing as the climate warms. Yet federal officials have so far discounted technological fixes — like covering the water surface to reduce the losses — and they continue to maintain both reservoirs, even though both of them are only around a third full. If the two were combined, some experts argue, much of those losses could be avoided.

For all the hard-won progress made at the negotiating table, it remains to be seen whether the stakeholders can tackle the looming challenges that come next. Over the years, Western states and tribes have agreed on voluntary cuts, which defused much of the political chaos that would otherwise have resulted from this month's shortage declaration, but they remain disparate and self-interested parties hoping they can miraculously agree on a way to manage the river without truly changing their ways. For all their wishful thinking, climate science suggests there is no future in the region that does not include serious disruptions to its economy, growth trajectory and perhaps even quality of life.

The uncomfortable truth is that difficult and unpopular decisions are now unavoidable. Prohibiting some water uses as unacceptable — long eschewed as antithetical to personal freedoms and the rules of capitalism — is now what's needed most.

The laws that determine who gets water in the West, and how much of it, are based on the principle of “beneficial use" — generally the idea that resources should further economic advancement. But whose economic advancement? Do we support the farmers in Arizona who grow alfalfa to feed cows in the United Arab Emirates? Or do we ensure the survival of the Colorado River, which supports some 8% of the nation's GDP?

Earlier this month, the Bureau of Reclamation released lesser-noticed projections for water levels, and they are sobering. The figures include an estimate for what the bureau calls “minimum probable in flow" — or the low end of expectations. Water levels in Lake Mead could drop by another 40 vertical feet by the middle 2023, ultimately reaching just 1,026 feet above sea level — an elevation that further threatens Lake Mead's hydroelectric power generation for about 1.3 million people in Arizona, California and Nevada. At 895 feet, the reservoir would become what's called a “dead pool"; water would no longer be able to flow downstream.

The bureau's projections mean we are close to uncharted territory. The current shortage agreement, negotiated between the states in 2007, only addresses shortages down to a lake elevation of 1,025 feet. After that, the rules become murky, and there is greater potential for fraught legal conflicts. Northern states in the region, for example, are likely to ask why the vast evaporation losses from Lake Mead, which stores water for the southern states, have never been counted as a part of the water those southern states use. Fantastical and expensive solutions that have previously been dismissed by the federal government — like the desalinization of seawater, towing icebergs from the Arctic or pumping water from the Mississippi River through a pipeline — are likely to be seriously considered. None of this, however, will be enough to solve the problem unless it's accompanied by serious efforts to lower carbon dioxide emissions, which are ultimately responsible for driving changes to the climate.

Meanwhile, population growth in Arizona and elsewhere in the basin is likely to continue, at least for now, because short-term fixes so far have obscured the seriousness of the risks to the region. Water is still cheap, thanks to the federal subsidies for all those dams and canals that make it seem plentiful. The myth persists that technology can always outrun nature, that the American West holds endless possibility. It may be the region's undoing. As the author Wallace Stegner once wrote: “One cannot be pessimistic about the West. This is the native home of hope."

40 million people rely on the Colorado River -- and it's drying up fast

On a 110-degree day several years ago, surrounded by piles of sand and rock in the desert outside of Las Vegas, I stepped into a yellow cage large enough to fit three standing adults and was lowered 600 feet through a black hole into the ground. There, at the bottom, amid pooling water and dripping rock, was an enormous machine driving a cone-shaped drill bit into the earth. The machine was carving a cavernous, 3-mile tunnel beneath the bottom of the nation's largest freshwater reservoir, Lake Mead.

Lake Mead, a reservoir formed by the construction of the Hoover Dam in the 1930s, is one of the most important pieces of infrastructure on the Colorado River, supplying fresh water to Nevada, California, Arizona and Mexico. The reservoir hasn't been full since 1983. In 2000, it began a steady decline caused by epochal drought. On my visit in 2015, the lake was just about 40% full. A chalky ring on the surrounding cliffs marked where the waterline once reached, like the residue on an empty bathtub. The tunnel far below represented Nevada's latest salvo in a simmering water war: the construction of a $1.4 billion drainage hole to ensure that if the lake ever ran dry, Las Vegas could get the very last drop.

For years, experts in the American West have predicted that, unless the steady overuse of water was brought under control, the Colorado River would no longer be able to support all of the 40 million people who depend on it. Over the past two decades, Western states took incremental steps to save water, signed agreements to share what was left and then, like Las Vegas, did what they could to protect themselves. But they believed the tipping point was still a long way off.

Like the record-breaking heat waves and the ceaseless mega-fires, the decline of the Colorado River has been faster than expected. This year, even though rainfall and snowpack high up in the Rocky Mountains were at near-normal levels, the parched soils and plants stricken by intense heat absorbed much of the water, and inflows to Lake Powell were around one-fourth of their usual amount. The Colorado's flow has already declined by nearly 20%, on average, from its flow throughout the 1900s, and if the current rate of warming continues, the loss could well be 50% by the end of this century.

Earlier this month, federal officials declared an emergency water shortage on the Colorado River for the first time. The shortage declaration forces reductions in water deliveries to specific states, beginning with the abrupt cutoff of nearly one-fifth of Arizona's supply from the river, and modest cuts for Nevada and Mexico, with more negotiations and cuts to follow. But it also sounded an alarm: one of the country's most important sources of fresh water is in peril, another victim of the accelerating climate crisis.

Americans are about to face all sorts of difficult choices about how and where to live as the climate continues to heat up. States will be forced to choose which coastlines to abandon as sea levels rise, which wildfire-prone suburbs to retreat from and which small towns cannot afford new infrastructure to protect against floods or heat. What to do in the parts of the country that are losing their essential supply of water may turn out to be the first among those choices.

The Colorado River's enormous significance extends well beyond the American West. In addition to providing water for the people of seven states, 29 federally recognized tribes and northern Mexico, its water is used to grow everything from the carrots stacked on supermarket shelves in New Jersey to the beef in a hamburger served at a Massachusetts diner. The power generated by its two biggest dams — the Hoover and Glen Canyon — is marketed across an electricity grid that reaches from Arizona to Wyoming.

The formal declaration of the water crisis arrived days after the Census Bureau released numbers showing that, even as the drought worsened over recent decades, hundreds of thousands more people have moved to the regions that depend on the Colorado.

Phoenix expanded more over the past 10 years than any other large American city, while smaller urban areas across Arizona, Nevada, Utah and California each ranked among the fastest-growing places in the country. The river's water supports roughly 15 million more people today than it did when Bill Clinton was elected president in 1992. These statistics suggest that the climate crisis and explosive development in the West are on a collision course. And it raises the question: What happens next?

Since about 70% of water delivered from the Colorado River goes to growing crops, not to people in cities, the next step will likely be to demand large-scale reductions for farmers and ranchers across millions of acres of land, forcing wrenching choices about which crops to grow and for whom — an omen that many of America's food-generating regions might ultimately have to shift someplace else as the climate warms.

California, so far shielded from major cuts, has already agreed to reductions that will take effect if the drought worsens. But it may be asked to do more. Its enormous share of the river, which it uses to irrigate crops across the Imperial Valley and for Los Angeles and other cities, will be in the crosshairs when negotiations over a diminished Colorado begin again. The Imperial Irrigation District there is the largest single water rights holder from the entire basin and has been especially resistant to compromise over the river. It did not sign the drought contingency plan laying out cuts that other big players on the Colorado system agreed to in 2019.

New Mexico, Colorado, Utah and Wyoming — states in the river's Upper Basin — will most likely also face pressure to use less water. Should that happen, places like Utah that hoped to one day support faster development and economic growth with their share of the river may have to surrender their ambition.

The negotiations that led to the region being even minimally prepared for this latest shortage were agonizing, but they were merely a warm-up for the pain-inflicting cuts and sacrifices that almost certainly will be required if the water shortages persist over the coming decades. The region's leaders, for all their efforts to compromise, have long avoided these more difficult conversations. One way or another, farms will have to surrender their water, and cities will have to live with less of it. Time has run out for other options.

Western states arrived at this crucible in large part because of their own doing. The original multistate compact that governs the use of the Colorado, which was signed in 1922, was exuberantly optimistic: The states agreed to divide up an estimated total amount of water that turned out to be much more than what would actually flow. Nevertheless, with the building of the Hoover Dam to collect and store river water, and the development of the Colorado's plumbing system of canals and pipelines to deliver it, the West was able to open a savings account to fund its extraordinary economic growth. Over the years since, those states have overdrawn the river's average deposits. It should be no surprise that even without the pressures of climate change, such a plan would lead to bankruptcy.

Making a bad situation worse, leaders in Western states have allowed wasteful practices to continue that add to the material threat facing the region. A majority of the water used by farms — and thus much of the river — goes to growing nonessential crops like alfalfa and other grasses that feed cattle for meat production. Much of those grasses are also exported to feed animals in the Middle East and Asia. Short of regulating which types of crops are allowed, which state authorities may not even have the authority to do, it may fall to consumers to drive change. Water usage data suggests that if Americans avoid meat one day each week they could save an amount of water equivalent to the entire flow of the Colorado each year, more than enough water to alleviate the region's shortages.

Water is also being wasted because of flaws in the laws. The rights to take water from the river are generally distributed — like deeds to property — based on seniority. It is very difficult to take rights away from existing stakeholders, whether cities or individual ranchers, so long as they use the water allocated to them. That system creates a perverse incentive: Across the basin, ranchers often take their maximum allocation each year, even if just to spill it on the ground, for fear that, if they don't, they could lose the right to take that water in the future. Changes in the laws that remove the threat of penalties for not exercising water rights, or that expand rewards for ranchers who conserve water, could be an easy remedy.

A breathtaking amount of the water from the Colorado — about 10% of the river's recent total flow — simply evaporates off the sprawling surfaces of large reservoirs as they bake in the sun. Last year, evaporative losses from Lake Mead and Lake Powell alone added up to almost a million acre feet of water — or nearly twice what Arizona will be forced to give up now as a result of this month's shortage declaration. These losses are increasing as the climate warms. Yet federal officials have so far discounted technological fixes — like covering the water surface to reduce the losses — and they continue to maintain both reservoirs, even though both of them are only around a third full. If the two were combined, some experts argue, much of those losses could be avoided.

For all the hard-won progress made at the negotiating table, it remains to be seen whether the stakeholders can tackle the looming challenges that come next. Over the years, Western states and tribes have agreed on voluntary cuts, which defused much of the political chaos that would otherwise have resulted from this month's shortage declaration, but they remain disparate and self-interested parties hoping they can miraculously agree on a way to manage the river without truly changing their ways. For all their wishful thinking, climate science suggests there is no future in the region that does not include serious disruptions to its economy, growth trajectory and perhaps even quality of life.

The uncomfortable truth is that difficult and unpopular decisions are now unavoidable. Prohibiting some water uses as unacceptable — long eschewed as antithetical to personal freedoms and the rules of capitalism — is now what's needed most.

The laws that determine who gets water in the West, and how much of it, are based on the principle of “beneficial use" — generally the idea that resources should further economic advancement. But whose economic advancement? Do we support the farmers in Arizona who grow alfalfa to feed cows in the United Arab Emirates? Or do we ensure the survival of the Colorado River, which supports some 8% of the nation's GDP?

Earlier this month, the Bureau of Reclamation released lesser-noticed projections for water levels, and they are sobering. The figures include an estimate for what the bureau calls “minimum probable in flow" — or the low end of expectations. Water levels in Lake Mead could drop by another 40 vertical feet by the middle 2023, ultimately reaching just 1,026 feet above sea level — an elevation that further threatens Lake Mead's hydroelectric power generation for about 1.3 million people in Arizona, California and Nevada. At 895 feet, the reservoir would become what's called a “dead pool"; water would no longer be able to flow downstream.

The bureau's projections mean we are close to uncharted territory. The current shortage agreement, negotiated between the states in 2007, only addresses shortages down to a lake elevation of 1,025 feet. After that, the rules become murky, and there is greater potential for fraught legal conflicts. Northern states in the region, for example, are likely to ask why the vast evaporation losses from Lake Mead, which stores water for the southern states, have never been counted as a part of the water those southern states use. Fantastical and expensive solutions that have previously been dismissed by the federal government — like the desalinization of seawater, towing icebergs from the Arctic or pumping water from the Mississippi River through a pipeline — are likely to be seriously considered. None of this, however, will be enough to solve the problem unless it's accompanied by serious efforts to lower carbon dioxide emissions, which are ultimately responsible for driving changes to the climate.

Meanwhile, population growth in Arizona and elsewhere in the basin is likely to continue, at least for now, because short-term fixes so far have obscured the seriousness of the risks to the region. Water is still cheap, thanks to the federal subsidies for all those dams and canals that make it seem plentiful. The myth persists that technology can always outrun nature, that the American West holds endless possibility. It may be the region's undoing. As the author Wallace Stegner once wrote: “One cannot be pessimistic about the West. This is the native home of hope."

'We're not allowed to hang up': The harsh reality of working in customer service

Last year ProPublica wrote about the world of work-at-home customer service, spotlighting a largely unseen industry that helps brand-name companies shed labor costs by outsourcing the task of mollifying unhappy customers.

As we reported on the industry, we invited current and former customer service representatives to contact us. They did. We heard from more than 100 and interviewed dozens. Often, their stories disturbed us. One woman, afraid to take a bathroom break, kept a jar under her desk in case she needed to urinate. Another, afraid to call in sick, paused calls to vomit. A third, afraid to hang up on a customer, didn't know what to do when she realized a caller was masturbating to the sound of her voice.

These accounts captured how agents are simultaneously ubiquitous and invisible. Customers talk to them all the time but know little about their work conditions.

So we're providing accounts from seven agents, many of whom describe the experience of being caught between abusive callers and corporate directives to appease. These seven are highly representative of the 100-plus agents we heard from, as well as the agents we interviewed in our first article. The agents, including some who told us they love their setups, laid out common themes, describing problems that people at various levels of the industry, including managers, have told us are endemic. We've also found echoes of these complaints in lawsuits and arbitration claims. Abusive callers are such a concern that, a few years ago in Canada, a union for telecommunications workers launched a campaign called “Hang Up on Abuse." Airbnb, recognizing the emotional strain of taking such calls, offered their in-house customer service agents free therapy sessions.

The reps we spoke to needed these jobs, which allowed them to work from home even before the pandemic. They included people with disabilities, caretaking obligations or limited opportunities in rural towns. Recruitment ads touted flexibility and the chance to be your own boss. But many agents discovered the roles came with limited hours, close monitoring and strict performance measurements that put them in constant fear of losing their jobs. A Department of Labor investigator concluded that one contractor, Arise Virtual Solutions, exerted an “extraordinary degree of control" over agents.

Most customer service agents are women. Many describe being sexually harassed. One said a caller told her, “I really like the way you type." Their work belongs to a grim history of women in outsourced roles stretching back to the piecework manufacturing era. A half century ago, temp work exploded, driven by companies hiring women to cut costs compared with full-time employees. These magazine ads from 1970 and 1971 show how women temps were viewed at the time, and the attitudes have certain parallels to how customer service agents are viewed today. While many agents work full time, a growing segment are independent contractors who don't get paid holidays, vacation time or fringe benefits.

In the accounts below, most of the agents asked not to be identified, citing nondisclosure agreements that are common in the industry. (To work for some companies, agents must sign NDAs before they can even accept the job.) We've condensed for clarity and verified details wherever possible, collecting Facebook screenshots, email exchanges, company performance review forms, tax records and other proof of employment, along with contemporaneous recollections from agents' relatives or friends. But there were instances in which we couldn't get such documentation, owing in part to the premium placed on privacy and security by the companies. Some agents said they weren't even allowed to have their personal phone in their workroom while helping customers. Some lost access to their email and the company platform when they quit or were fired, and they hadn't made copies or screenshots beforehand. In every case we invited the companies that these agents worked with to comment.

Agent Taking Calls and Chats for TurboTax

Christine Stewart has social anxiety and depression. “I have a really hard time being out in public," she said. She wanted to work from home, so she became an independent contractor for Sykes from 2017 to 2018. The company bills itself as “a leading provider of multichannel demand generation and customer engagement services for Global 2000 companies." At Sykes, she helped customers using Intuit's TurboTax.

“I was actually sick one day, I called, they have a supervisor line, and told them I was going to be [out] sick. And without actually saying it, the lady said, you're going to be in trouble if you don't show up. And me, I don't like to get in trouble at work, I'm a good employee. I went to work. I kept hitting my mute button every time I had to throw up."

During training, she said, “they told me if you wanted to work nights, you could work nights. If you want to work days, you can work days. Once you finish the training they're like, 'This is your schedule.' I said I can't work that and they were like, 'Well, this is the schedule, and if you can't work the schedule, you don't want the job.' I was like, 'I need the job, I do want the job.' I said, 'I can do 8 a.m. to 12 p.m.' They wanted me to do 12 to 12. I have to get my kids on the bus in the morning, I was like, 'I need to take a five-minute break when the bus pulls up.' Even that was a huge problem for them. They would say, 'You can't keep taking these five-minute breaks.'"

Customers berated her. “One person called me the C-word. I'd call my supervisor. They'd say, 'Calm them down.' … They'd always try to push me to stay on the call and calm the customer down myself. I wasn't getting paid enough to do that. When you have a customer sitting there and saying you're worthless … you're supposed to 'de-escalate.'"

“There can be no background noise, no nature noises or cars passing by. I had a den. I had to insulate my den," she said. (To confirm the expense, she shared a tax form with ProPublica that showed a $100 deduction.) “I had to turn the AC off; you could hear the AC blowing. They called me out on that. When I was training, the lady said she could hear the air conditioner in the background."

One time, she said, “my kid broke his hand." She dropped her call, dropped everything, to help him, but then she needed a story, because, she said, had she told her supervisors the truth — that her kid broke his hand and needed her help — “I would've gotten in trouble even if I had a hospital note."

“I said my internet went down. I pulled the plug on everything, because it was their equipment. ... I didn't know if they had any kind of monitoring software that wasn't on the webcam or anything. It was better not to take any chances and unplug the whole thing."

Intuit told us that it “engages with vendors" able to deliver “flexible support," and that it is “dedicated to providing a safe, ethical, and inclusive workplace for all of our employees and vendor workers." (See thefull statement.)

Sykes did not respond to requests for comment.

Agent Taking Calls for Bath & Body Works

She needed money for a medical procedure, so, during the pandemic, she began working for Liveops as an independent contractor, helping customers for Bath & Body Works. She worked from home.

For online orders, Bath & Body Works allows shoppers to use just one promotion per order. A customer, for example, can use a code to knock down the price of a particular item, but they can't combine multiple codes. Customers can get upset when this is explained to them.

“We encounter customers who ordered the wrong items and want us to send them the right items for free. We receive calls from customers who have had their packages stolen. And then we get customers all the time who find out we don't sell a particular fragrance anymore, and they can be just incredibly abusive."

“I may as well say it out loud. We get called bitches all the time. One woman called me a 'stupid fucking cunt.'"

“It can wear on you. We're not allowed to answer back in the same way, nor are we allowed to hang up on them. Nor can we hang up on them after giving them one warning. The policy I am told is, we're not allowed to hang up on any customer under any circumstances, even if they question our race or ethnic background or anything like that. My understanding is that we're not even allowed to give people a warning."

“We have to sit there basically and listen to these people until they run out of steam. It's like they don't see us as a person."

With the pandemic, she said, a lot of agents are young women who lost their jobs and are desperate for anything. A lot of her fellow agents are Black women. “I've heard them say they were called 'stupid n-----,' 'you stupid Black bitch.'"

While some customer service reps are pressed to work more hours than they want, she got too few. Last fall, she signed up to work for four and a half hours during one day. She was paid 31 cents per minute of talking time. So when she wasn't getting calls, she wasn't getting paid. For those four and a half hours, she said, she sat there with her headset plugged in.

“No calls in those four and a half hours. Nothing. … I got some personal budget stuff done. Surfed websites unrelated to work. Familiarized myself with products on the website. I hate to say it, but I think I dozed off at one point."

Were there other days in which you got no calls? we asked.

“Oh, yes."

“How many?"

“I lost track."

Liveops has quality auditors who listen to at least four of an agent's calls per month, she said. They score agents using an audit form, which she shared with ProPublica. It says agents should make a “connected recommendation for each opportunity throughout the interaction" based on the customer's orders. Say a customer buys soap. The agent should ask, “Did you want a soap holder, too?" If a customer buys candles, the agent should also pitch candleholders.

“A customer calls to say, 'Hey, I didn't get my package.' So I'm supposed to say, 'Hey, do you want to buy some more products when you still don't have your package?' Oh, for crying out loud. Really."

The audit form has 20 questions. They include: “9. Did the agent compliment the customer's selections, reassure about the fragrance choices and/or give general positive reinforcement about the items? … 18. Did the agent apologize when necessary, show empathy and/or recognizes customer emotion? 19. Did the agent let the customer know that we have 'heard' them, that we genuinely care, and did the agent remain engaged throughout the entire interaction?"

A Liveops document said that if an agent's scores fall within the “unacceptable" range for three months in a calendar year, “the agent may be subject to removal from the program."

She said she recently received an email saying she had used profanity on a call, so Liveops was terminating her contract. She didn't remember saying anything profane. The company provided no recording for her to listen to. She emailed Liveops and called corporate to ask for details or a chance to hear whatever it is she was supposed to have said, but she got no response. (She said she didn't make copies of these emails before her email account was closed.)

“No appeal," she said.

Liveops told us that it does not comment on specific clients or agents, but said in a statement that agents choose their client programs and “have the freedom and flexibility to work around their lives." The statement added: “All client programs have their own unique process for handling and dispositioning unproductive calls and significantly upset clients. There are controls in place to ensure that, to the extent possible, all calls are professional, and no customer or agent is subject to verbal abuse." (Read Liveops'full statement.)

Bath & Body Works did not respond to requests for comment.

Agent Taking Calls and Chats for Barnes & Noble

She worked as an independent contractor for Arise Virtual Solutions, a company that bills itself as a pioneer in the work-from-home industry.

Customers, she said, “get mad at us. They start cursing at us. They start threatening to report us to the main office." One customer, she said, told her he was going to keep her on the line until he got what he wanted; he “started with the F-word," then apologized, then carried on. He “wouldn't stop and wouldn't stop" until finally, realizing the agent wouldn't give in, he gave up.

At one time she handled calls from Barnes & Noble customers. “A lot of cursing, a lot of crying — crying — believe it or not. I've been called every name in the book. And I do mean from A to Z. Everything in between. I've been hung up on, threatened, told I'm going to lose my job. I had one woman tell me, 'I hope you have a miserable day.' You can't laugh. I can't laugh. I'm thinking to myself, 'You ordered the Bible. You're some Christian person?' She'd ordered a Bible! Those are the worst! Those are the worst hypocrites! They scream, curse, yell, carry on, threaten. They're the worst."

“The women, their mouths are unbelievable. Or they start crying. They're worse than the men. I'm like, 'It's a book, for God's sake.'"

Arise told us that it does not tolerate harassment of any kind. (See thefull statement.)

Barnes & Noble did not respond to multiple requests for comment.

Agent in a Call Center Taking Calls for Sprint

She was employed by iQor (pronounced I-core) as a retention specialist and sales agent, taking calls from customers for Sprint (which has since merged with T-Mobile). She worked in a call center.

“If the customer is angry and wants to completely cancel, you have 14 minutes to resolve their issue, get them to stay and sell them a new phone," she said.

A unit called workforce management would push agents along. One workforce management monitor would sit at a computer, checking the length of each agent's call. Another would walk the floor. These two would communicate by walkie talkie, one alerting the other to any agent whose call was running long.

“At 10 minutes you had somebody tapping on your shoulder. At 12 minutes you had someone tapping on your shoulder and saying, 'Wrap it up, wrap it up, wrap it up.' At 14 minutes, 'What's going on? You need to wrap this up. You need to move on.'"

“We had this guy who would run around on the floor yelling, 'Move it along, people, all hands on deck, move it along, move it along.'"

Agents would have management in one ear and customers in the other. Customers would often be insulting, sometimes shockingly so.

She remembered one customer in particular. “He was very, very upset. And it's personal. You get called names. 'I hope you fucking die.'" Another Sprint customer told her: “'I hope when T-Mobile takes over, you all lose your fucking jobs, your fucking families, your fucking homes, and you all kill yourselves.'"

She said she was not allowed to hang up. Only a supervisor could do that. “Where's the line where you no longer have to take that?" she said. “I spent more than one instance in the bathroom, crying, then shaking it off and going back to work."

“I'm pretty thick-skinned, and I had nightmares. It beats you down. Everybody is angry. Eight out of 10 calls, they're angry and they're cursing by the time they get to you. Usually it's the men who make it personal. That's why I coined the term AngryWhiteManistan. 'I have another resident of AngryWhiteManistan here.' They'll say things like, 'Well, then, you better get me someone who is not incompetent.'"

In her nightmares, she said, she would be doing some mundane task, such as making dinner in the kitchen, when the phone would ring. She'd pick up and hear: “Are you done yet? We need to move on. We need to move on. We need to move on."

T-Mobile, which merged with Sprint in 2020, told us it wouldn't comment on Sprint's prior practices. Since the merger, T-Mobile said, it has taken steps “to align T-Mobile's Care practices across our team and all our partners to our award-winning Team of Experts (TEX) model, whichheavily prioritizes customer and agent experience over more traditional call center metrics."The company's statement added, “We have a long-held policy that all of our experts do not have to tolerate abusive speech or behavior." (Read the company'sfull statement.)

IQordid not respond to requests for comment.

Agent Supervising Other Agents Taking Calls for DirecTV

She's lived in “many, many states" and worked in many call centers. Now she lives out west in a rural setting where jobs, and options, are scarce. A few years ago she found a job that lets her work from home. She started as an agent at Convergys (since acquired by Concentrix), then became a supervisor.

“It's just enough of a wage that you're going to be ineligible for most public support. I'm not eligible for any financial aid whatsoever. And yet I go to the food bank every month because I don't make enough money. … I don't go to the doctor, even when I should."

She said the job attracts a lot of new parents. And retirees. And people with medical issues. She said that in her experience, the turnover is “tremendous." Within months, many people get fired, or “termed," short for terminated. “We fire more than they resign. A lot more."

Most firings are over attendance. What counts as an attendance infraction? “Anything. It doesn't matter if it's in your control or not. … Your power goes out and, bam, you're absent. ... Doesn't matter if you had a hurricane."

“You don't know if you're going to have a job tomorrow."

Once, as a supervisor, she listened to a recording of a call that had been made to an agent working at home, answering calls from customers for DirecTV. “DirecTV had a policy, you never hung up on a customer, ever. You simply weren't allowed to, no matter what they said." (ProPublica interviewed another agent who also understood this to be the case.)

“There was a guy who called in and masturbated on the phone. It was awful. … Just imagine being a woman in your office in your home, alone. And here's this guy doing this, and it takes you a few minutes to figure out what that sound is, and when you do you're horrified, and you don't know what to do. All you know is, you're not allowed to hang up the phone. That would be horrible. I felt so terrible for her."

The agent, crying, asked if she could quit for the day without an attendance infraction. “We had the recorded call, it's not like it was ever in doubt. My boss was a man, at first he didn't understand why that was an issue." He didn't understand why the agent was so troubled. “I had to go to HR to get them to explain to him why it was an issue." Only then could the agent stop taking calls.

Convergys was acquired by Concentrix in 2018. Concentrix said it does not disclose details about current or former staff out of respect for their confidentiality, but said in a statement: “We recognize that the work-at-home environment isn't foreveryone. … We take the health and safety of our staff very seriously and do not have a no hang-up policy. Our staff are given extensive training to manage each interaction with techniques to deflect anddiffusesituations should they arise. If subjected to harassment or abuse they are trained and empowered to end the conversation." (See Concentrix'sfull statement.)

DirecTV told us: “The allegations are disturbing. We suggest you contact the agent's employer." In a written statement, the company said: “We don't tolerate, and we don't expect our vendors to tolerate, harassment of any kind. We have policies and procedures in place for our employees to escalate inappropriate customer interactions and the ability to terminate any customer interaction if and when that becomes necessary." A DirecTV spokesperson said in a phone call that “to the best of our knowledge," the company has not ever had a no-hang-up policy.

Agent Taking Calls for Home Depot

She's in her 60s and wanted a work-from-home job to keep her family safe during the pandemic. She saw a company called Arise Virtual Solutions mentioned online, but she was skeptical. She would be an independent contractor, required to absorb substantial startup costs. (ProPublica's previous article on customer service noted that Arise's agents often spend more than $1,000 on training and equipment.)

Then she saw Bob Wells, a real-life nomad featured in the movie “Nomadland," talking about Arise on YouTube. She decided to give it a chance. “I was like, 'I need work.' … I'd kind of given up on finding something more legit, frankly, because of the pandemic. So it was a pandemic Band-Aid for me."

She answered calls from customers for Home Depot. One, a nurse's aide, had ordered a portable toilet for a client. “This woman was like, 'I have a 90-year-old lady who needs this thing like, yesterday, and you haven't delivered it for three weeks, what is your problem?'" To the agent, this was urgent. “When it became a humanitarian issue, and there were plenty of humanitarian issues, especially during the pandemic," she would send the matter to people above her, who would then send it to Home Depot to do something. The customer's problem might then be resolved. “But my stats would go down," she said, because she hadn't resolved the matter herself. (She shared Arise's performance metrics with us.)

On days when the phone didn't stop ringing — and there were many — she couldn't step away from her desk. “I had a bottle I kept under my desk in case I had to urinate. I never used it, but I had it there if I needed it. I'm in my 60s. … There could be an emergency."

The work was isolating. She joined Facebook groups (and provided screenshots to ProPublica) and began to talk with other frustrated agents. She realized she was among the few white women in her work cohort. And she realized customers were nicer to her — an immigrant with a British accent. “When I first came to this country, I couldn't believe people could tell the color of a person over the phone. That was a culture shock. ... When people are calling in, I think they find it easier to yell at a Black woman. … I'm not the most evolved person, but I began to look at the work through a racial lens. ... I answered the phone, and there were people who called, and right at the beginning of the call, they were full of white-hot rage." Then they would hear her accent. “Well, the amount of comments I got from people who were like, 'Wow, they've got classy people here!' … I was born in a British colony. People think I'm a butler or a classy servant."

Home Depot spokesperson Margaret Smith told us the company uses an escalation process designed to help agents handle difficult calls. “If a customer becomes irate or disrespectful, we ask the associate to either have their supervisor take over the call or transfer the call to the resolution queue," she said. Agents who use this process are not supposed to be penalized, she said. (Read Home Depot's full statement.)

Arise provided us with a statement about itsnetwork of agents, whom it callsservice partners. “Arise does not tolerate discrimination or harassment of any kind," the statement said. “Service Partners interacting with individual customers through the Arise® Platform are protected by both client and Arise policies and processes that include the ability to disconnect callers without penalty or transfer these calls to support resources if they are unable to de-escalate the situation." (Read Arise's full statement.)

Agent Taking Video Calls and Chats for TurboTax

Mara M. was a hairstylist and cosmetology teacher when her health began worsening. “Probably in about 2015, I started sleeping a lot. Any time I would stand up I would get really dizzy, really lightheaded. One of the requirements to teach hair is to be able to stand. I couldn't stand up. It was a walker and wheelchair for me. … I have postural orthostatic tachycardia syndrome."

Mara eventually discovered Concentrix, a global customer service outsourcing company, while searching for work-from-home jobs on Indeed.com. She signed on at age 23, hoping she might be matched with a company that sold beauty products.

At her orientation three weeks later, Mara learned which account — that is, which of Concentrix's corporate clients — she would be matched with. She would be working part time, doing video calls and live chats for Intuit. She would be helping people use TurboTax.

Mara didn't have an office. But she did have a closet. So she turned her closet into an office. (She sent us photographs.) “They sent me a blue screen to put behind my chair," she says. That way, customers wouldn't know she was working from home, much less from inside her closet. She bought a computer, a monitor, a headset.

“We were not supposed to hang up. … You're supposed to hear them out, then empathize with them, then acknowledge that the problem was made. I had tried all that. They say, you know, apologize, but the people stay angry."

One customer called her, moaning. “I was very uncomfortable. I couldn't tell if he was sick; I couldn't tell if he was watching porn in the background. I just tried to get through the guy's questions." Afterward she told a friend that she thought the man on the other end of the line had been masturbating. (The friend confirmed this conversation.)

She learned that agents were monitored. “We had a webcam, and [the monitors] can see you through the webcam. … I'm not sure how often you were watched. But the trainer did say you should shut down your computer after your shift because they can still see you. I was like, that's really Big Brother. … That freaked me out because I spend a lot of time in my room." And she learned there were no built-in breaks for part-timers. “You can't step away when you're on the clock." She said it felt confining, like her closet was a prison cell.

She struggled to answer questions about complicated tax forms. She would Google for answers in a different window while trying to look confident to the customer, who could see her on the video call. “I had a nightmare so bad that I'd wake up at 6 in the morning over this job. I cried. I'm a sensitive person, so a lot of people probably wouldn't have cried. … I didn't know what I was doing. … I was like, 'I finally have a job, but I don't know what the answers are.'"

Mara didn't feel like she could quit. For the most part, she said, her metrics were high. But customers weren't responding to survey questions about her performance. And her lowest score was her “doc rate" — documentation rate — which penalizes agents for not closing out a chat with a customer. They get credit only when a customer says, “Yes, you have answered all my questions."

“Some people don't answer back after they get the answers they need. For those types of chats and everything, we couldn't close those cases. My doc rate dropped because ... I couldn't close the case on some of them."

Eventually, Concentrix emailed to say that TurboTax wanted her off the account, citing “a review of stats … done over the weekend." (Mara shared copies of the exchange with ProPublica.)

“I do apologize for the inconvenience," a Concentrix representative wrote. “Please feel free to apply for other Concentrix accounts!"

Intuit told us agents are “provided training to end calls with customers should they encounter abusive or threatening behavior." Its statement also said that Intuit establishes performance standards with vendors such as Concentrix: “Vendors — not Intuit — are responsible for ensuring those workers they engage to support Intuit's customers or our account meet those standards." (Read the full statement.)

Concentrix, which said it does not disclose details about current or former staff, told us, “We take the health and safety of our staff very seriously and do not have a no hang-up policy." (See Concentrix's full statement.)

​The billionaire playbook: How sports owners use their teams to avoid millions in taxes

At a concession stand at Staples Center in Los Angeles, Adelaide Avila was pingponging between pouring beers, wiping down counters and taking out the trash. Her Los Angeles Lakers were playing their hometown rival, the Clippers, but Avila was working too hard to follow the March 2019 game.

When she filed taxes for her previous year's labors at the arena and her second job driving for Uber, the 50-year-old Avila reported making $44,810. The federal government took a 14.1% cut.

On the court that night, the players were also hard at work. None more so than LeBron James. The Lakers star was suffering through a painful strained groin injury, but he still put up more points and played more minutes than any other player.

In his tax return, James reported making $124 million in 2018. He paid a federal income tax rate of 35.9%. Not surprisingly, it was more than double the rate paid by Avila.

The wealthiest person in the building that night, in all likelihood, was Steve Ballmer, owner of the Clippers. The evening was decidedly less arduous for the billionaire former CEO of Microsoft. He sat courtside, in a pink dress shirt and slacks, surrounded by friends. His legs were outstretched, his shoes almost touching the sideline.

Ballmer had reason to smile: His Clippers won. But even if they hadn't, his ownership of the team was reaping him massive tax benefits.

For the prior year, Ballmer reported making $656 million. The dollar figure he paid in taxes was large, $78 million; but as a percentage of what he made, it was tiny. Records reviewed by ProPublica show his federal income tax rate was just 12%.

That's a third of the rate James paid, even though Ballmer made five times as much as the superstar player. Ballmer's rate was also lower than Avila's — even though Ballmer's income was almost 15,000 times greater than the concession worker's.

Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they're often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses.

But in few industries is that tax treatment more detached from economic reality than in professional sports. Teams' most valuable assets, such as TV deals and player contracts, are virtually guaranteed to regenerate because sports franchises are essentially monopolies. There's little risk that players will stop playing for Ballmer's Clippers or that TV stations will stop airing their games. But Ballmer still gets to deduct the value of those assets over time, almost $2 billion in all, from his taxable income.

This allows Ballmer to perform a kind of financial magic trick. If he profits from the Clippers, he can — legally — inform the IRS that he is losing money, thus saving vast sums on his taxes. If the Clippers are unprofitable in a given year, he can tell the IRS he's losing vastly more.

Glimpses of the Clippers' real-world financial results show the business has often been profitable. Those include audited financials disclosed in a Bank of America report just before Ballmer bought the team, as well as NBA records that were leaked after he became owner.

But IRS records obtained by ProPublica show the Clippers have reported $700 million in losses for tax purposes in recent years. Not only does Ballmer not have to pay tax on any real-world Clippers profits, he can use the tax write-off to offset his other income.

Ballmer isn't alone. ProPublica reviewed tax information for dozens of team owners across the four largest American pro sports leagues. Owners frequently report incomes for their teams that are millions below their real-world earnings, according to the tax records, previously leaked team financial records and interviews with experts.

They include Shahid Khan, an automotive tycoon who made use of at least $79 million in losses from a stake in the Jacksonville Jaguars even as his football team has consistently been projected to bring in millions a year. And Leonard Wilf, a New Jersey real estate developer who owns the Minnesota Vikings with family members, has taken $66 million in losses from his minority stake in the team.

In a statement, Khan responded: “We're a nation of laws. U.S. Congress passes them. In the case of tax laws, the IRS applies and enforces the regulations, which are absolute. We simply and fully comply with those very IRS regulations." Wilf didn't respond to questions.

Ballmer's spokesperson declined to answer specific questions, but said “Steve has always paid the taxes he owes, and has publicly noted that he would personally be fine with paying more."

These revelations are part of what ProPublica has unearthed in a trove of tax information for the wealthiest Americans. ProPublica has already revealed that billionaires are paying shockingly little to the government by avoiding the types of income that can be taxed.

The records also show how some of the richest people on the planet use their membership in the exclusive club of pro sports team owners to further lower their tax bills.

The records upend conventional wisdom about how taxation works in America. Billionaire owners are consistently paying lower tax rates than their millionaire players — and often lower even than the rates paid by the workers who staff their stadiums. The massive reductions on personal tax bills that owners glean from their teams come on top of the much-criticized subsidies the teams get from local governments for new stadiums and further deplete federal coffers that fund everything from the military to medical research to food stamps and other safety net programs.

The history of team ownership as a way to avoid taxes goes back almost a century. Bill Veeck, owner of the Cleveland Indians in the 1940s and later the Chicago White Sox, stated it plainly in his memoir: “Look, we play the Star Spangled Banner before every game. You want us to pay income taxes too?"

Veeck is credited with convincing the IRS to accept a tax maneuver even he described as a “gimmick." Player salaries were already treated as a deductible business expense for a team. That was not controversial in the slightest.

But Veeck dreamed up an innovation, a way to get a second tax deduction for the same players: depreciation. The way he accomplished this was by separately buying the contracts before the old company was liquidated, instead of transferring them to the new company as had been done before. That meant that the contracts were treated as a separate asset. The value a new owner assigned to that asset when he bought the team could be used to offset taxes on team profits, as well as any other income he might have. (Defenders of the practice contend that it's not double-dipping since the deductions are taken against two separate pools of money: the money used to purchase the team and the day-to-day operating budget.)

Team owners, Veeck wrote in his memoir, had won “a tax write-off that could have been figured out by a Texas oilman. It wasn't figured out by a Texas oilman. It was figured out by a Chicago hustler. Me."

Once the IRS accepted this premise, the natural next step — owners assigning as large a portion of the total team purchase price as possible to player contracts — was elevated into a sport of its own. Decades ago, Paul Beeston, who was president of the Toronto Blue Jays and president of Major League Baseball at various times, famously described the result: “Under generally accepted accounting principles, I could turn a $4 million profit into a $2 million loss and I could get every national accounting firm to agree with me."

The depreciation of tangible assets, and their decay over time, is often intuitive. A machine in a factory and a fleet of cars have more obvious fair market values and life spans before business owners will have to pay to replace them. Take, for example, a newspaper business with a printing press that cost $10 million and will last for, say, 20 years. The idea of depreciation is that the newspaper owner could deduct a piece of that $10 million every year for the 20-year lifespan of the press.

But amortization, the term for depreciating nonphysical assets, was less straightforward. Sports teams are often mainly composed of these assets. Valuing and assigning a life span to a player contract or a TV deal was more subjective and thus vulnerable to aggressive tax maneuvers by team owners.

Several NBA teams claimed that more than 90% — in one case, 100% — of their value consisted of player contracts that could be written off on the owner's taxes, according to league financials that emerged in an early 1970s congressional investigation.

By that time the IRS had begun a series of challenges of valuation methods by team owners, part of a larger fight across industries about how business owners should be allowed to write off so-called intangible assets. The tax agency insisted that companies should only be able to write off assets with a limited useful life.

In an effort to stop the endless litigation, Congress inaugurated the modern era of amortization by simplifying the rules in 1993: Under the new regime, the purchaser of a business would be allowed, over the span of 15 years, to write off more types of intangible assets. This might have been welcome news for the sports business. But Congress explicitly excluded the industry from the law.

Following lobbying by Major League Baseball, in 2004, sports teams were granted the right to use this deduction as part of a tax bill signed by President George W. Bush, himself a former part owner of the Texas Rangers. Now, team owners could write off the price they paid not just for player contracts, but also a range of other items such as TV and radio contracts and even goodwill, an amorphous accounting concept that represents the value of a business' reputation. Altogether, those assets typically amount to 90% or more of the price paid for a team.

That means when billionaires buy teams, the law allows them to treat almost all of what they bought, including assets that don't lose value, as deteriorating over time. A team's franchise rights, which never expire, automatically get treated like a pharmaceutical company's patent on a blockbuster drug, which has a finite life span. In reality, the right to operate a franchise in one of the major leagues has in the last few decades been a license to print money: In the past two decades, the average value of basketball, football, baseball and hockey teams has grown by more than 500%.

ProPublica uncovered the tax breaks used by team owners by dissecting reports sent to the IRS that capture the profit or loss of a business. Still, untangling the precise benefits can be difficult. For example, some owners hold their team stakes in companies that also had unrelated assets — a corporate nesting doll that makes it impossible to determine the losses a team produced. The examples mentioned in this article are instances in which it appears the owners did not intermingle assets and the team's ownership structure is clear based on ProPublica's analysis of the tax records, court documents, corporate registration data and news reports.

When Steve Ballmer offered to buy the Clippers in 2014 for a record sum, the team's longtime owner, Donald Sterling, was taken aback.

“I'm curious about one thing," Sterling said at a meeting later recounted by his lawyer.

“Of course, what is the question?" Ballmer responded.

Sterling proceeded: “You really have $2 billion?"

The size of the offer was impressive considering the context. In 1981, Sterling had paid $12.5 million for the club. In the three decades that followed, Sterling had become notorious for neglecting and mistreating the team. He didn't provide a training facility for years, forcing the team to practice at the gym of a local junior college. He heckled his own players during games. After games, Sterling was said to parade friends through the locker room so they could gawk at the players' bodies.

But even Sterling's mismanagement couldn't stop the Clippers' rise in value. Players kept signing with the Clippers — drafted rookies because they typically have no other option if they want to play in the NBA and veterans because there are a finite number of teams to choose from.

TV deals also grew in value. The Clippers had little fan support, and they oscillated between being league bottom-dwellers and a middling franchise. But before Sterling sold the team, the Clippers were expected to sign a new local media deal worth two to three times more than their previous deal.

The beginning of the end of Sterling's tenure came when he was recorded by his mistress telling her not to bring Black people to Clippers games. The NBA moved to force Sterling out. Ballmer swooped in, outbidding Oprah Winfrey and others. (ProPublica couldn't reach Sterling for comment. His wife, Shelly, who co-owned the Clippers with him, defended their tenure in emails to ProPublica, saying they weren't the only owners whose team didn't own a practice facility and suggesting her husband did not heckle players. “I GUESS WHEN THERE IS NOTHING TO WRITE ABOUT WHY NOT TRY TO WRITE SOME SCUM," she wrote.)

Ballmer, one of the richest people in the world, wasn't just motivated by his love for basketball. He expected the team to be profitable. “It's not a cheap price, but when you're used to looking at tech companies with huge risk, no earnings and huge multiples, this doesn't look like the craziest thing I've ever acquired," he said at the time. “There's much less risk. There's real earnings in this business."

Two years later, as the league negotiated a new contract with the players union, Ballmer portrayed the team's finances in a much different light. “I'm a new owner and I've heard this is the golden age of basketball economics. You should tell our finance people that," he told a reporter in 2016. “We're sitting there looking at red ink, and it's real red ink. I know, it shows up on my tax returns."

But losses on a tax return don't necessarily mean losses, as large or at all, in the real world.

Ballmer was acquiring a team that had skyrocketed in value over the previous decade. And there was the benefit for his taxes: He was allowed to start treating the Clippers — including those player contracts and TV deals — as if they were losing value.

From 2014 to 2018, records show Ballmer reported a total of $700 million in losses from his ownership of the Clippers, almost certainly composed mainly of paper losses from amortization.

The evidence examined by ProPublica showed the Clippers have often been profitable, though many of the glimpses into the team's finances are from before Ballmer took over. Leaked NBA records during Ballmer's tenure showed the Clippers in the black as recently as 2017. Audited financials disclosed in the Bank of America report just before the sale showed the team netting $14 million and $18 million in the two years before Ballmer took over, with projected growth in the future. Tax records for the pre-Ballmer era examined by ProPublica showed the team consistently making millions in profits. Forbes has also estimated the team generates millions in annual profits.

Nevertheless, Ballmer reported staggering losses from the Clippers to the IRS. Those losses allowed him to reduce the taxes he owed on the billions he has reaped from Microsoft stock sales and dividends. Owning the Clippers cut his tax bill by about $140 million in just five years, according to a ProPublica analysis.

Unlike billionaire team owners, millionaire players are virtually guaranteed to pay a large share of their income in taxes.

The law favors people who are rich because they own things over people who are rich because they make a high income from their work. Wages — the main source of income for most people, including athletes — are taxed at the highest rates of all, topping out at a marginal rate of 37% plus an extra 3.8% for Medicare. The government takes a smaller share of money made from, say, selling a stock. That's not to mention the benefits available to people who own businesses, such as the paper losses created by buying a sports team.

So while Ballmer's tax rate for 2018 was 12% on his $656 million of income, Lakers star Anthony Davis paid 40% that year on $35 million of income. Golfer Tiger Woods made $22 million and paid 34%. Boxer Floyd Mayweather paid more than 37% on his $53 million income. Star Houston Astros pitcher Justin Verlander made $30 million and paid a 39% cut.

(In each instance in which ProPublica refers to “income" in this article, we are referring to adjusted gross income, which the IRS defines as earnings minus certain items like alimony or student loan interest payments. We calculated tax rates the way government agencies and many economists do, by including not just the Medicare and Social Security taxes automatically taken out of workers' paychecks, but also the share employers are required to pay for those programs on behalf of their employees. The rationale for including the employer's share as part of the employee's tax burden is that employers pay less in wages because of these costs. These levies make up most of the tax burden for the typical worker, a low but still significant percentage for millionaire players, but a negligible share or nothing for billionaires like Ballmer who typically don't take salaries and other forms of income these taxes apply to.)

In a few cases, star players have bought pieces of pro sports teams. But that doesn't automatically get them the low rates enjoyed by the typical billionaire owner. Basketball great Michael Jordan, for instance, owns the NBA's Charlotte Hornets and a tiny stake in the Miami Marlins baseball team. His share of the Hornets produced $3.6 million in tax losses in 2015, even though the team was estimated to be in the black that year. He still makes a large portion of his money from Nike though, which is taxed at a high rate. That year, for example, he paid 38% in federal taxes on $114 million in income. Jordan's spokeswoman declined to answer specific questions.

Ballmer's tax advantages reduce the revenue flowing to the federal government. At the same time, he has publicly bemoaned the perils of having a government that spends more than it takes in. He has founded a nonprofit, USA Facts, that provides data on government spending. “Nobody wants to sacrifice anything in the short term so that we don't leave these huge debt and deficits to our children," he told Fox Business three years ago. “That drives me crazy."

Perhaps the savviest tax play for billionaires interested in pro sports is buying a football team. Financial analysts believe it's exceedingly difficult to lose money running an NFL franchise. “I think the NFL is the only sport where each team is profitable and viable," said mining tycoon Alan Kestenbaum, now a part owner of the Atlanta Falcons, in an interview with Bloomberg.

The NFL's TV ratings dominance, easily surpassing the NBA and other major leagues, is at the center of the sport's money machine. Each of the 32 teams — from the small-market Buffalo Bills to the behemoth Dallas Cowboys — takes an equal share of national revenue, mostly derived from broadcasting deals. In 2019 alone those deals generated $9.5 billion, divided into $296 million slices for each team. The league recently re-upped its contracts with the networks and added Amazon's Prime Video streaming service in an 11-year, $105 billion deal. On the expense side of the ledger, the biggest line item, player salaries, is limited since the league enforces what's known as a hard salary cap.

Those two sources of profitability drove the record $2.3 billion price of the last NFL team to change hands, the Carolina Panthers. But the sale triggered a dramatic swing in how the team's finances were reported to the IRS, records show. The Panthers suddenly went from producing large profits to suffering major losses.

The Panthers were built into a thriving business by Jerry Richardson, a onetime NFL player turned fast food restaurant magnate, who was awarded the expansion franchise in the early 1990s. In addition to its share of the league's national TV deals, the team quickly built up another major revenue source, selling out virtually every game to an enthusiastic local fan base in Charlotte. Success followed on the field. By 2016, led by MVP quarterback Cam Newton, the Panthers won the NFC Championship and made the Super Bowl.

With the amortization benefit from the early years of the team used up, the Panthers produced millions of profits every year, with margins growing annually in the five years through 2017, tax records of Richardson and several previous minority owners show. ProPublica estimated the team's annual income based on the tax information of a complex web of team entities, as well as leaked financial statements published by Deadspin.

That year, after Richardson was at the center of a lurid racism and sexual harassment scandal, he announced he was putting the team on the auction block. Several billionaires put in bids.

The winning bidder was David Tepper, founder of the hedge fund Appaloosa Management. Tepper, who made his fortune trading distressed debt and once hired Ashlee Simpson to play his daughter's bat mitzvah, is now the league's richest owner.

The $2.3 billion Tepper paid would produce amortization expenses of around $140 million per year, according to the IRS' general guidelines. That annual expense would wipe out any Panthers profits for tax purposes.

The team swung from a large taxable profit before its sale to a tax loss of about $115 million, according to a ProPublica analysis of IRS records, after Tepper's purchase in 2018. There's no evidence anything significant about the Panthers' real-world revenue and expenses changed between 2017 and 2018. The only major difference is the team changed hands, and Tepper now gets a tax benefit through his new entity, Tepper Sports Holdings.

Tepper's hedge fund is a massive producer of capital gains income — in the past decade, he has often reported more than $1 billion in annual income — so the tax losses produced by the Panthers are extremely valuable to him. A spokesman for Tepper didn't respond to questions.

The same year Tepper bought the Panthers, the NHL's newest hockey team, the Las Vegas Golden Knights, accomplished what only one expansion team had done before by making it to the league finals in its inaugural season. Since then, the Golden Knights have continued to win. Off the ice, they've been among the best in the NHL at motivating fans to spend money on team apparel, and the Golden Knights have consistently sold out their home games.

The team's owner, William Foley, the chairman of insurance giant Fidelity National Financial, made it clear he wasn't in the business of losing money. “We developed a conservative business plan," Foley told a reporter in 2017, the first year the team played. “I didn't want to write $20 million checks every year." He likely didn't have to. Forbes estimated millions in profit for the team from 2017 to 2019.

But for tax purposes, records show, the team produced losses of more than $57 million during those years. That was thanks in part to the team's ability to write off the $500 million expansion fee that Foley paid to the NHL in 2016.

In a statement to ProPublica, Golden Knights Chief Legal Officer Peter Sadowski did not respond to questions about amortization. He did respond to a question about one of the team's income streams, noting that the money from season ticket deposits was “used to pay rent, to employ hundreds of people, provide outstanding entertainment and create a source of pride for our community."

The Golden Knights' tax losses helped offset the money Foley made from his other ventures, saving him more than $12 million in taxes over two years, according to a ProPublica analysis.

The value of sports franchises, as noted, tends to rise inexorably — but teams sometimes lose money along the way. Internal NBA records obtained by ESPN in 2017 showed that the league's clubs were averaging almost $18 million in net income that season. But nine of the 30 clubs were in the red.

Even when a team spends more than it takes in, an owner can still end up on top. The amortization benefit can turn a loss into an even larger loss, which can then be used to offset other income and save money on taxes.

For example, Dan Gilbert, founder of Quicken Loans, was able to lower his taxable income by about $443 million from 2005 to 2018 because of his stake in the Cleveland Cavaliers, tax records show. In that same period, the team reached the pinnacle, winning its first-ever NBA championship in 2016.

In emails to ProPublica, Gilbert's lawyer wrote that the team consistently loses money. “During the entire time after Mr. Gilbert's purchase of the team, the Cavaliers has operated with an actual loss (negative cash flow/negative income) unrelated to any depreciation or amortization and there have been no funds to distribute to Mr. Gilbert or any other owner," he wrote.

The tax write-off for amortization, Gilbert's lawyer argued, is essential to all businesses, from restaurants to factories to sports franchises. Without it, he wrote, “there would be no capital investments made by owners and businesses would be taxed on revenue without properly taking into account all costs necessary to generate that revenue. That would be antithetical to capitalism and fatal to the United States' economy."

Gilbert's lawyer added that the Cavaliers owner has paid “enormous" taxes for many years. He also wrote: “Your e-mail makes reference to other wage earners such as the players and their salaries. The facts are this: Mr. Gilbert is the only party referenced in your e-mail who has undertaken any risk. Mr. Gilbert has risked the purchase price paid for the Cavaliers, his subsequent capital contributions, the debt he has personally guaranteed and the players' salaries which are guaranteed. ... To compare the guaranteed salaries of the Cavaliers' players as an applicable measure of Mr. Gilbert's tax rate is absurd."

Advocates for team owners point out that when owners sell their teams, they have to pay back the taxes they avoided by using amortization. But even if owners ultimately repay the taxes they skipped, deferring payment of those taxes for years, sometimes decades, essentially amounts to an interest-free loan from taxpayers. An owner could reap huge gains by investing that money.

If owners die while holding their stake, as many do, the tax savings may never be repaid. And their heirs can generally restart the amortization cycle anew.

Bob Piccinini was a minority member of the group that purchased the Golden State Warriors in 2010. He made his fortune turning Modesto-based Save Mart Supermarkets into the largest family-owned grocery chain in California. Already a part owner of multiple baseball teams, he entered the basketball world not because he had a particularly keen interest in the sport, but to make money. “Sports franchises continue to go up in value," Piccinini said at the time.

His tax information shows he bought more than 7% of the Warriors. From 2011 to 2014, he reported total losses of $16 million. Nearly a decade's worth of tax data from other Warriors owners, also reviewed by ProPublica, showed many millions in losses — all of it during a period when the team rose to become historically dominant. Meanwhile, leaked financials obtained by ESPN from 2017 show the Warriors to be an extremely profitable business, netting $92 million in one season alone. Forbes estimates also put the team well in the black during that period. A Warriors spokesperson declined to answer a series of specific questions, instead providing a one-sentence statement: “Over the course of the last decade, we have invested hundreds of millions of dollars into our team on the court, our overall operation and, of course, the construction and opening of a new, 100 percent privately financed arena in San Francisco."

Piccinini died in 2015. The court records about the inheritance he left his children don't specifically mention his stake in the team or whether his estate paid taxes following his death. But the tax code likely would have allowed his children never to repay the government for the paper losses their father enjoyed. It would also have permitted Piccinni's heirs to begin claiming paper losses of their own.

In the years since, Piccinini's son, Dominic, has been a courtside regular at Warriors games. An occasional actor in his 20s, Dominic has an Instagram profile that shows him high-fiving Stephen Curry and other players midgame and posing for photos with rappers including Drake and E-40. In 2019, he and a friend went viral when ESPN panned to them drinking from golden chalices.

In an interview, Dominic told ProPublica that he allowed his family's lawyers to handle the tax details of his inheritance, which granted him and his siblings equal shares of their father's stake in the Warriors.

“It's just the darndest thing," he said in a phone call from a vacation in Mexico. “I'm a lucky son of a bitch, there's no way around it."

How tech mogul Peter Thiel turned a retirement account for the middle class into a $5 billion tax-free piggy bank

Billionaire Peter Thiel, a founder of PayPal, has publicly condemned “confiscatory taxes." He's been a major funder of one of the most prominent anti-tax political action committees in the country. And he's bankrolled a group that promotes building floating nations that would impose no compulsory income taxes.

But Thiel doesn't need a man-made island to avoid paying taxes. He has something just as effective: a Roth individual retirement account.

Over the last 20 years, Thiel has quietly turned his Roth IRA — a humdrum retirement vehicle intended to spur Americans to save for their golden years — into a gargantuan tax-exempt piggy bank, confidential Internal Revenue Service data shows. Using stock deals unavailable to most people, Thiel has taken a retirement account worth less than $2,000 in 1999 and spun it into a $5 billion windfall.

To put that into perspective, here's how much the average Roth was worth at the end of 2018: $39,108.

And here's how much $5 billion is: If every one of the 2.3 million people in Houston, Texas, were to deposit $2,000 into a bank today, those accounts still wouldn't equal what Thiel has in his Roth IRA.

What's more, as long as Thiel waits to withdraw his money until April 2027, when he is six months shy of his 60th birthday, he will never have to pay a penny of tax on those billions.

ProPublica has obtained a trove of IRS tax return data on thousands of the country's wealthiest people, covering more than 15 years. This data provides, for the first time, an inside look at the financial lives of the richest Americans, those whose stratospheric fortunes put them among history's wealthiest individuals.

What this secret information reveals is that while most Americans are dutifully paying taxes — chipping in their part to fund the military, highways and safety-net programs — the country's richest citizens are finding ways to sidestep the tax system.

One of the most surprising of these techniques involves the Roth IRA, which limits most people to contributing just $6,000 each year.

The late Sen. William Roth Jr., a Delaware Republican, pushed through a law establishing the Roth IRA in 1997 to allow “hard-working, middle-class Americans" to stow money away, tax-free, for retirement. The Clinton administration didn't want to give a fat tax break to wealthy people who were likely to save anyway, so it blocked Americans making more than $110,000 ($160,000 for a couple) per year from using them and capped annual contributions back then at $2,000.

Yet, from the start, a small number of entrepreneurs, like Thiel, made an end run around the rules: Open a Roth with $2,000 or less. Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value. Pay just fractions of a penny per share, a price low enough to buy huge numbers of shares. Watch as all the gains on that stock — no matter how giant — are shielded from taxes forever, as long as the IRA remains untouched until age 59 and a half. Then use the proceeds, still inside the Roth, to make other investments.

About a decade after the creation of the Roth, Congress made it even easier to turn the accounts into mammoth tax shelters. It allowed everyone — including the very richest Americans — to take money they'd stowed in less favorable traditional retirement accounts and, after paying a one-time tax, shift them to a Roth where their money could grow unchecked by Uncle Sam — a Bermuda-style tax haven right here in the U.S.

To identify those who have amassed fortunes in retirement accounts, ProPublica scoured the tax return data of the ultrawealthy for IRA accounts valued at more than $20 million. Reporters also examined Securities and Exchange Commission filings, court documents and other records, including a memo detailing Thiel's wealth that was included in his 2005 application for residency in New Zealand.

Among this rarefied group, ProPublica found, the term “individual retirement account" has become a misnomer. Rather than a way to build a nest egg for old age, the accounts have morphed into supercharged investment vehicles subsidized by American taxpayers. Ted Weschler, a deputy of Warren Buffett at Berkshire Hathaway, had $264.4 million in his Roth account at the end of 2018. Hedge fund manager Randall Smith, whose Alden Global Capital has gutted newspapers around the country, had $252.6 million in his.

Buffett, one of the richest men in the world and a vocal supporter of higher taxes on the rich, also is making use of a Roth. At the end of 2018, Buffett had $20.2 million in it. Former Renaissance Technologies hedge fund manager Robert Mercer had $31.5 million in his Roth, the records show.

Buffett didn't respond to questions sent by email. Mercer couldn't be reached for comment, and his accountants and attorneys didn't respond to requests to accept questions on his behalf. Smith also couldn't be reached for comment, and an employee at his hedge fund repeatedly hung up when ProPublica reporters identified themselves. Other representatives for Smith and his hedge fund didn't respond.

In a written statement, Weschler said his retirement account relied on publicly traded investments and strategies available to all taxpayers. Nevertheless, he said he supports reforming the system.

“Although I have been an enormous beneficiary of the IRA mechanism, I personally do not feel the tax shield afforded me by my IRA is necessarily good tax policy," he wrote. “To this end, I am openly supportive of modifying the benefit afforded to retirement accounts once they exceed a certain threshold."

A spokesman for Thiel accepted detailed questions on Thiel's behalf, then never responded to phone calls or emails. Messages left at Thiel's venture capital fund were not returned.

While the scope and scale of such accounts has never been publicly documented, Congress has long been aware of their existence — and the ballooning tax breaks they were garnering for the ultrawealthy. The Government Accountability Office, the investigative arm of Congress, for years has warned that the wealthiest Americans were accumulating massive retirement accounts in ways federal lawmakers never intended.

At the same time, Congress has slashed the IRS' budget so severely that the agency's ability to ferret out abuses has been stymied. Money was so tight that at one point in 2015 the agency couldn't afford to enter critical data about IRAs from paper tax filings into its computer system.

Over the years, a few politicians have tried, and failed, to crack down on the tax breaks the ultrarich receive from their giant IRAs.

In 2016, Sen. Ron Wyden, an Oregon Democrat, floated a detailed reform plan and said, “It's time to face the fact that our tax code needs a dose of fairness when it comes to retirement savings, and that starts with cracking down on massive Roth IRA accounts built on assets from sweetheart, inside deals."

“Tax incentives for retirement savings," he added at the time, “are designed to help people build a nest egg, not a golden egg."

But Wyden soon abandoned his proposal; there was no chance the Republican-controlled Senate would pass it.

Meanwhile, Thiel's Roth grew.

And grew.

At the end of 2019, it hit the $5 billion mark, jumping more than $3 billion in just three years' time — all of it tax-free.

Thiel, a fan of J.R.R. Tolkien, by then had brought his Roth under the auspices of a family trust company called Rivendell Trust. In “The Lord of the Rings," Rivendell is a secret valley populated by elves, a misty sanctuary against forces of darkness. Thiel's earthly version resides in a suburban Las Vegas office complex, across from a Cheesecake Factory, and is staffed by a small group of corporate lawyers.

And thanks to the Roth, Thiel's fortune is far more vast than even experts in tallying the wealth of the rich believed. In 2019, Forbes put Thiel's total net worth at just $2.3 billion. That was less than half of what his Roth alone was worth.

The ultrawealthy's hijacking of a tool meant for the middle class becomes especially striking when you consider what the retirement future looks like for many Americans.

There isn't one.

One in four working-age Americans has nothing saved for retirement, a 2020 Federal Reserve study found.

Individual retirement accounts emerged from the ruins of corporate pensions. The traditional IRA had existed since the 1970s for workers who didn't have pensions, but as corporations shifted the burden of saving for retirement to workers, too few Americans were setting up these accounts, condemning many to scrape by on Social Security in old age. By the 1990s, politicians on both sides of the aisle were fretting over the declining savings rates in the U.S.

It was against this backdrop that an idea Sen. Roth had been pushing for years finally found its moment.

One of the fathers of Reaganomics, Roth was determined to slash the federal budget, cut taxes and rein in the IRS. Starting in 1997, as chairman of the Senate Finance Committee, Roth held a series of hearings that portrayed IRS agents as menacing thugs. Roth's investigations sparked legislation that gutted the IRS' collection powers for more than a decade.

But it was his championing of the Roth IRA that would earn the senator posthumous fame and a mention in the American Heritage dictionary. Roth's obsession was a new kind of IRA, which he said would “be a blessing to countless Americans as they prepare for the future."

It would also create an escape hatch from the entire income tax system.

Run-of-the-mill retirement plans — a traditional IRA or 401(k), for instance — defer taxes to a later date. The money that people put into their accounts is deducted from their income, so they aren't taxed up front, nor are the dividends, interest or gains on investments along the way. But when retirees withdraw money, they have to pay income tax on it.

A Roth, by contrast, eliminates tax liability rather than deferring it. People who open a Roth don't get the tax break on the money they initially put in. But once they deposit that money, their investments grow tax-free forever and retirees don't pay a penny of taxes on withdrawals. Even better, unlike a traditional IRA, the Roth doesn't require retirees to deplete the account as they age.

Sen. Roth promised that his new IRA would “provide relief to hard-working, middle-class Americans."

The law creating the Roth IRA passed in 1997 with overwhelming bipartisan support. A few tax wonks predicted that workers who were most likely to struggle financially in old age wouldn't open the accounts because they couldn't afford to save. Roths, they warned, would become a giveaway to mostly well-off taxpayers who would have saved anyway. Investing in a Roth was like locking in a rate on a mortgage when interest rates were low, an attractive proposition for wealthy Americans worried that Congress would raise tax rates in future years.

That's why the Clinton administration insisted on barring people who made too much from stashing money in a Roth. Surely, that would prevent the superrich from gaming the system to use Roths as tax shelters.

1999 Thiel Roth IRA worth:$1,664
1999 S&P 500 Roth IRA worth:$2,421

One day in early 1999, a deputy of Thiel's at the company that would become PayPal walked into the San Francisco office of Pensco Pension Services. It could have been an uneventful appointment. Instead, it changed Thiel's life.

Thiel, a Stanford law graduate, ran a small hedge fund and hadn't yet joined the ranks of the ultrawealthy. But he had outsized ambitions for his months-old tech venture, where he served as both chairman and CEO. He envisioned his company creating “a new world currency, free from all government control."

Influenced by libertarian Ayn Rand and Tolkien's fantasy trilogy, Thiel, then in his early 30s, carried himself like a contrarian philosopher king. A few years earlier, he had co-authored a jeremiad against multiculturalism that accused the administration of then-President Bill Clinton of waging class warfare. “Taxing the rich seems to have become an end in itself," he and his co-author wrote.

Pensco was a small firm that allowed its customers to put nearly any investment they wanted into a tax-advantaged retirement account. Thiel was about to become Pensco's whale.

In an interview with ProPublica, Pensco founder Tom Anderson recalled how Thiel and other PayPal executives had wanted to put startup shares of the company into traditional IRAs.

Anderson dangled something sweeter.

“I said, 'If you really think this is going to be big, you know, you might want to consider this new Roth,'" recalled Anderson, who is now retired. If the investment ballooned, he remembered saying, “'you're not going to pay tax on it when you take it out.' It's a no-brainer."

The math was compelling. Thiel wouldn't get a tax break up front, but he'd avoid an immense tax bill later on if the investment surged in value.

“They immediately grasped that," Anderson said. “And they did it."

What happened next deprived the U.S. government of untold millions in tax revenue. Perhaps billions. Thiel used his new Roth IRA to purchase shares of his startup.

In 1999, single taxpayers were only allowed to contribute to a Roth if they made less than $110,000. Like many startups, PayPal offered its top executives low initial salaries and large stock grants. Thiel's income that year was $73,263, the IRS records show.

Thiel also had an advantage over most Americans with IRAs, who typically use them to purchase publicly traded stocks, bonds, mutual funds and certificates of deposit. Since Thiel used his Roth to buy shares of a private company, the value wasn't set on a public stock exchange.

Although the details of such purchases are not usually public, Thiel's financial assistant later disclosed them in a letter included in the entrepreneur's application for residency in New Zealand: “Mr. Thiel purchased his founders' shares in PayPal through his Roth IRA during PayPal's formation."

While SEC filings describing that time don't mention Thiel's Roth, they show that he bought his first slice of the company in January 1999. Thiel paid $0.001 per share — yes, just a tenth of a penny — for 1.7 million shares. At that price, he was able to buy a large stake for just $1,700.

In 1999, $2,000 was the maximum amount you could put into a Roth in a year.

Thiel's unusual stock purchase risked running afoul of rules designed to prevent IRAs from becoming illegal tax shelters. Investors aren't allowed to buy assets for less than their true value through an IRA. The practice is sometimes known as “stuffing" because it gets around the strict limits imposed by Congress on how much money can be put in a Roth.

PayPal later disclosed details about the early history of the company in an SEC filing before its initial public offering. The filing reveals that Thiel's founders' shares were among those the company sold to employees at “below fair value."

Victor Fleischer, a tax law professor at the University of California, Irvine who has written about the valuation of founders' shares, read the PayPal filings at ProPublica's request. Buying startup shares at a discounted $0.001 price with a Roth, he asserts, would be indefensible.

“That's a huge scandal," Fleischer said, adding, “How greedy can you get?"

Warren Baker, a Seattle tax attorney who specializes in IRAs, said he would advise clients who are top executives working at a startup not to purchase founders' shares with a Roth to avoid accusations by the IRS that they got a special deal and undervalued the shares. Baker was speaking generally, not about Thiel.

“I would be concerned about the fact that you can't support the valuation number as being reasonable," he said.

At the time Thiel bought his founders' shares, his own hedge fund had already loaned the new startup $100,000, California and SEC records show.

And soon after the company sold him the shares, millions of dollars poured in from investors, securities filings show. In just a month's time, the company sold a slice of itself to investors for $500,000. That June and August, another $4.5 million poured in from the venture fund arm of telecom giant Nokia and other investors, those records show.

The dot-com boom was in full swing. “We're definitely on to something big," Thiel told employees in late 1999, predicting that PayPal would become “the Microsoft of payments," according to “The PayPal Wars," a book by a former employee recounting those heady early years.

But when it came time for Pensco, the custodian of Thiel's Roth, to report the value of the account to the IRS at the close of 1999, none of the investor enthusiasm was apparent. Pensco told the IRS that Thiel's Roth was worth just $1,664 at the end of 1999, tax records show.

In an interview, Anderson said Pensco relied on the companies whose shares were in a Roth to say what they were worth. He didn't know how PayPal came up with its market value, but he said Thiel's purchase of those shares was “very legitimate."

From there, nothing would stop Thiel's Roth. In a Silicon Valley equivalent of Tolkien alchemy, his Roth would transform those PayPal shares into a tax-free fortune — one that would be safer than all the gems, gold and silver in the dragon Smaug's mountain.

After 1999, Thiel would never again contribute money to his Roth, tax records show.

He didn't need to. In just a year's time, the value of his Roth jumped from $1,664 to $3.8 million — a 227,490% increase.

Then in 2002, eBay purchased PayPal. That same year, Thiel sold the shares, still inside his Roth, his financial assistant later told New Zealand officials. The tax-free proceeds poured into his account. By the end of 2002, Thiel's Roth was worth $28.5 million, tax records show.

If he had held his shares outside of the Roth in a normal investment account, Thiel would have owed the IRS 20% of his gains and owed another 9% to California tax authorities. Because the shares were in a Roth, he had no tax bill when he sold them, saving him millions.

Suddenly, Thiel had an advantage few investors could claim: His own personal investment bank that wasn't subject to taxation. He could now use the cash inside the Roth to buy and sell nearly any investment he wanted. Thiel used the millions in proceeds from his PayPal windfall to invest in other Silicon Valley startups as well as his own hedge fund, according to his financial assistant's memo. Once again, Thiel's Roth scooped up startup shares at bargain-basement prices.

For instance, Thiel and colleagues in 2003 founded Palantir, a data analytics company, helped by an early investment from a CIA-backed venture fund. The company was named after the “seeing stones" made by elves in the “Lord of the Rings" trilogy, used to detect danger near and far.

Thiel used his Roth to buy shares of Palantir when it was still a private company, years before it was listed on the New York Stock Exchange, according to a ProPublica analysis of tax records, an SEC filing and shareholder records included in a civil suit.

Over the years, Palantir has won federal contracts from the military to hunt terrorists and from U.S. Immigration and Customs Enforcement to find undocumented immigrants. Even the IRS has a $99 million contract with Palantir to comb through data to identify tax cheats.

Then, in 2004, Thiel met Mark Zuckerberg, a Harvard undergraduate who had come to Silicon Valley for the summer to work on growing the company that would become Facebook. Thiel invested $500,000, Facebook's first large outside infusion of cash. Those Facebook shares ended up — where else? — in Thiel's Roth IRA, an attorney for Facebook later disclosed in a letter filed in federal court. That ensured that Thiel wouldn't owe taxes on his early investment in the company.

As Thiel's Roth and fortune ballooned, he scolded Americans for their financial imprudence. In a 2006 Forbes column, headlined “Warning: Save, Save, Save," Thiel lamented the low household savings in the U.S. and called for most Americans to live within their means.

“Forgo the new kitchen and sundeck," he wrote. “Shoot to put away 15% of the paycheck." His closing advice: “Living modestly and saving well is better than dying broke."

In an interview on the website Big Think, Thiel said the U.S. tax system has “fairness problems" in which “you have super rich people paying a lower rate than people in the middle or upper middle class."

The answer wasn't taxing the rich more, he said, but “taxing the middle class and the upper middle class a lot less" and cutting their dependence on expensive programs such as Medicare and Social Security.

By then, Thiel had purchased a Ferrari and had bought and sold a penthouse in the San Francisco Four Seasons. In 2005, he sought residency in New Zealand, which had become a destination for some ultrawealthy people who saw it as a safe haven should civilization collapse.

“I have long admired the people, culture, business environment and government of New Zealand, as well as the encouragement which is given to investment, business and trade in New Zealand," Thiel later wrote in a letter to the country's government.

Thiel applied as an investor. His application, prepared by his then-financial assistant, Jason Portnoy, touted the size of his Roth. Thiel transferred $749,967 to a bank in New Zealand, keeping it under the umbrella of the Roth.

The country, where the “Lord of the Rings" movies were filmed, approved Thiel's application. The New Zealand Herald later revealed that the country had secretly granted Thiel full citizenship. The newspaper obtained Thiel's application through a public records request, and those documents included Portnoy's letter.

In the next two years, Thiel's Roth reached new heights, reflecting Facebook's meteoric rise. In his bestselling book on startups, “Zero to One," Thiel wrote: “Money makes money." By the end of 2008, the Roth was worth $870 million.

Up to this point, Thiel was one of the few Americans who had managed to amass prodigious Roth accounts. Among the others were at least three additional PayPal alums who eventually built Roths worth more than $80 million each, according to tax records and SEC filings.

Even so, the existing income limits managed to keep most of the superrich out.

Then, in the latter years of the George W. Bush administration, Congress took a wrecking ball to those defenses, and the wealthy stormed in.

The change centered on an unsexy-sounding maneuver known as a Roth conversion. It works like this: If you have money in a traditional IRA, you can transform it into a Roth as long as you pay one-time income tax on the money. By converting the account to a Roth, no additional income taxes are ever due.

Conversions had existed since the Roth's conception, but they had been restricted to Americans making below $100,000 per year.

In 2006, Bush and the Republican-controlled Congress were seeking to slash taxes on capital gains, the type of income that can be generated when stocks or other assets are sold. But they faced a problem. Budget rules required them to find a way to make up for the lost revenue.

Their solution was widely viewed as a gimmick: using one tax cut to pay for another tax cut. A provision was included in the Bush bill that lifted the ban on the wealthy making Roth conversions. Since the maneuver requires a payment of tax up front, it counted in short-term congressional budget models as actually raising revenue. The tax breaks didn't come until later. “It will have large and damaging effects on the federal budget for decades to come," wrote budget expert Len Burman in the specialty publication Tax Notes.

The new backdoor into the Roth opened in 2010 and set off a frenzy of conversions among hedge fund managers, industrialists and heirs, the tax records reviewed by ProPublica show.

Weschler, the Berkshire Hathaway executive, amassed a giant traditional IRA in his years as a private equity partner and hedge fund manager. He converted a whopping $130 million. His boss, Warren Buffett, converted $11.6 million. After paying the one-time tax, both men saw their Roth accounts soar.

In his statement, Weschler said he opened a retirement account as a 22-year-old junior financial analyst in 1983 and began contributing the maximum amount allowed, along with a generous match from his employer. Weschler said his Roth is so large because he chose investments carefully, had “exceptional luck" and had nearly four decades for it to grow.

Weschler said he could envision the late Sen. Roth holding up his experience as “an aspirational example of the power of deferred consumption" that could “hopefully help motivate generations of future savers."

He added that he paid more than $28 million in federal taxes to convert his account to a Roth.

Some of the wealthy managed to avoid even that one-time tax bill.

Three members of the Ebrahimi family, whose patriarch made a fortune at the software firm Quark, collectively converted $65 million into Roths in 2010 and 2011. Farhad Ebrahimi, one of the heirs of the fortune, has supported left-wing causes and became known for walking around the Occupy Boston protest in 2011 wearing a hand-lettered T-shirt that declared he was a member of the 1% and said: “Tax me, I'm good for it."

Kind of.

He converted $19.4 million into a Roth, which would have triggered $6.8 million in income tax. But thanks to losses generated by other investments, he wiped out the tax bill on the conversion. Ebrahimi declined to comment.

In 2009, word of Thiel's secret weapon leaked for the first time.

In a story headlined, “Give Me Liberty or Give Me Taxpayer Money," Gawker Media, citing anonymous sources, revealed that Thiel held his Facebook investment in a tax-free Roth.

The Great Recession, though, caught up with Thiel. His hedge fund racked up big losses.

Thiel then did something unusual: For five years starting in 2010, he dipped into his Roth for at least $254 million, the IRS tax return data obtained by ProPublica shows. That is almost unheard of among the wealthy, tax advisers say, because it shrinks the pot of money that can be invested tax-free. Because Thiel was still in his 40s, he was too young to pull money from a Roth without paying income tax plus a 10% penalty on these withdrawals.

During the life of his Roth, Thiel also has made money outside it. He took in an additional $687 million of income from 1999 to 2018, largely from gains on investments, tax records show. All told, over that period he paid $206 million in federal taxes, including the taxes on the early Roth withdrawals.

In four of those years, however, Thiel managed to cut his federal income tax bill to zero.

In 2011, Thiel caught the attention of the IRS. The agency launched an audit, tax records show. The records don't spell out what the IRS was looking at or if it involved Thiel's Roth. Whatever the case, the audit was closed years later and Thiel didn't owe any more taxes, tax records show.

By 2012, large IRAs began to attract scrutiny, falling under the klieg lights of presidential politics.

That January, The Wall Street Journal reported that Mitt Romney, the former private equity executive running for the GOP nomination, had listed on a financial disclosure form that he had amassed an IRA worth between $20 million and $102 million. The story ran on the front page and launched waves of coverage in other publications. Romney had a traditional IRA, not a Roth. But how, people wondered, could the account have grown so large, given that the government imposed strict limits on how much money could be put into one of the tax-deferred accounts?

Citing former company insiders and documents, the Journal reported that during Romney's time as CEO at investment giant Bain Capital, executives there had effectively bypassed the contribution limits by putting extremely low-valued shares from private equity deals into their IRAs, then watching them balloon.

ProPublica's analysis of the tax records show that by the end of 2018, at least seven other current or former Bain executives had amassed IRAs worth $25 million or more, with three exceeding $90 million.

Other financiers also found ways to supersize their retirement accounts. Michael Milken, for example, the 1980s junk bond king who went to prison for fraud and was later pardoned by President Donald Trump, had traditional IRAs valued at $509 million.

A senior adviser to Milken declined to answer questions, “since it's not our practice to publish or discuss Mike Milken's private financial information, I can't help you on this one."

Romney lost the 2012 election, but the IRA revelation provoked a lasting backlash. Wyden asked the investigative arm of Congress to look into the matter. In a landmark report issued in 2014, the Government Accountability Office sounded the alarm, finding the mega IRAs stood “in contrast to Congress's aim."

IRS officials told investigators that the federal government was losing more and more money to “IRA abuses." The GAO investigators flagged “aggressive" valuation tactics by private equity. And while it didn't mention Thiel or his PayPal co-founders, the report laid out how startup founders' shares could be used to render IRA contribution limits irrelevant. “Individuals can manipulate contribution limits by grossly undervaluing investments at the time the individual uses an IRA to purchase them," the congressional investigators wrote.

The report estimated that, as of 2011, there were around 300 taxpayers with IRAs worth more than $25 million. That detail reverberated around the media and Capitol Hill. Few knew that most of those accounts were minuscule compared to Thiel's, which that year was valued at nearly $1.6 billion.

A series of reform proposals followed. Wyden, who now holds Roth's old position as chair of the Senate Finance Committee, has become the leading proponent of rolling back what he calls “unfair strategies used by the privileged to rake in subsidies and dodge tax bills with so-called 'mega Roth IRAs.'" In 2016, he released a plan that would require owners of Roth IRAs worth more than $5 million to take money out of the accounts. Amid howls of protest from the retirement industry and a Senate and House controlled by Republicans, Wyden's proposal went nowhere.

The IRS, meanwhile, was floundering in its efforts to police retirement accounts. At one point the agency recommended Congress prohibit IRA accounts from buying investments that aren't traded on a public market, such as founders' shares. That went nowhere, too. Instead, Congress began slashing the IRS' budget, kneecapping the agency for more than a decade.

In 2009, an internal team had recommended the agency at least collect data on unorthodox assets held in IRAs. But it took more than five years for the agency to mandate disclosure of those investments. Even then, the agency simply required tax forms to say whether an IRA held stock in a private company, not the name of the company or the price per share.

By 2015, the agency was struggling to handle the paper forms sent in by the companies that administer IRAs. The agency couldn't afford to digitize them. Another two years went by before the IRS started electronically transcribing the forms.

After years of plodding, the agency said it was finally ready in 2019 to use the data to target potential abusers for audits. And that's before the real fighting begins over hotly contested issues such as how to value shares in a startup that aren't publicly traded. IRS officials have complained to congressional investigators that challenging such valuations is costly and time-consuming, and that it requires a small army of experts to go up against deep-pocketed taxpayers.

The IRS did not respond to detailed questions. But as ProPublica has reported, in tax disputes with the superrich, the IRS is completely outmatched.

In his book “Zero to One," Thiel argues that fortunes are built not by luck or unfair advantage, but by discerning investors and founders who are more courageous than their peers, leaders who zig when the crowd zags. Thiel devotes an entire chapter to the importance of keeping secrets, writing that “every great business is built around a secret that's hidden from the outside."

A secret of Thiel's is that his fortune was built not just with brains but also with massive tax breaks. By 2019, Thiel's holdings had grown so vast and diverse that his $5 billion was spread across 96 subaccounts inside his Roth.

As his wealth grew, Thiel showered millions of dollars on Republican politicians and groups with an anti-tax agenda, including Club for Growth Action. In 2016, he became the rare Silicon Valley titan to endorse Donald Trump.

The Trump years, which fueled a market boom, were good for Thiel and his Roth. In 2018, he moved his Roth from Pensco to Rivendell, the family trust company named after Tolkien's elven sanctuary.

In Tolkien's fantasy world, elves can be killed in battle or succumb to grief, but they don't die of old age or disease. Thiel has told people he hopes to live to be 120 years old. That might be a bit optimistic, but he is not taking any chances and is investing in anti-aging technology companies. He's even tucked some of those shares into his Roth, SEC and tax records show.

Assuming a modest 6% annual return and no withdrawals, his tax-free golden egg could be worth about $263 billion in 2087, when Thiel plans to celebrate his 120th birthday. That's larger than the current gross domestic product of New Zealand, his adopted homeland.

“There is good news and bad news," Thiel told The Washington Post when asked about living more than a century. “The bad news is: If you don't believe in the good news, you're not saving enough for retirement and likely to spend much of your old age in poverty."

“The financial planning," Thiel said, “takes on a very different character."

New details suggest senior Trump aides knew Jan. 6 rally could get chaotic

On Dec. 19, President Donald Trump blasted out a tweet to his 88 million followers, inviting supporters to Washington for a “wild" protest.

Earlier that week, one of his senior advisers had released a 36-page report alleging significant evidence of election fraud that could reverse Joe Biden's victory. “A great report," Trump wrote. “Statistically impossible to have lost the 2020 Election. Big protest in D.C. on January 6th. Be there, will be wild!"

The tweet worked like a starter's pistol, with two pro-Trump factions competing to take control of the “big protest."

On one side stood Women for America First, led by Amy Kremer, a Republican operative who helped found the tea party movement. The group initially wanted to hold a kind of extended oral argument, with multiple speakers making their case for how the election had been stolen.

On the other was Stop the Steal, a new, more radical group that had recruited avowed racists to swell its ranks and wanted the President to share the podium with Alex Jones, the radio host banned from the world's major social media platforms for hate speech, misinformation and glorifying violence. Stop the Steal organizers say their plan was to march on the Capitol and demand that lawmakers give Trump a second term.

ProPublica has obtained new details about the Trump White House's knowledge of the gathering storm, after interviewing more than 50 people involved in the events of Jan. 6 and reviewing months of private correspondence. Taken together, these accounts suggest that senior Trump aides had been warned the Jan. 6 events could turn chaotic, with tens of thousands of people potentially overwhelming ill-prepared law enforcement officials.

Rather than trying to halt the march, Trump and his allies accommodated its leaders, according to text messages and interviews with Republican operatives and officials.

Katrina Pierson, a former Trump campaign official assigned by the White House to take charge of the rally planning, helped arrange a deal where those organizers deemed too extreme to speak at the Ellipse could do so on the night of Jan. 5. That event ended up including incendiary speeches from Jones and Ali Alexander, the leader of Stop the Steal, who fired up his followers with a chant of “Victory or death!"

The record of what White House officials knew about Jan. 6 and when they knew it remains incomplete. Key officials, including White House Chief of Staff Mark Meadows, declined to be interviewed for this story.

The second impeachment of President Trump focused mostly on his public statements, including his Jan. 6 exhortation that the crowd march on the Capitol and “fight like hell." Trump was acquitted by the Senate, and his lawyers insisted that the attack on the Capitol was both regrettable and unforeseeable.

Rally organizers interviewed by ProPublica said they did not expect Jan. 6 to culminate with the violent sacking of the Capitol. But they acknowledged they were worried about plans by the Stop the Steal movement to organize an unpermitted march that would reach the steps of the building as Congress gathered to certify the election results.

One of the Women for America First organizers told ProPublica he and his group felt they needed to urgently warn the White House of the possible danger.

“A last-minute march, without a permit, without all the metro police that'd usually be there to fortify the perimeter, felt unsafe," Dustin Stockton said in a recent interview.

“And these people aren't there for a fucking flower contest," added Jennifer Lynn Lawrence, Stockton's fiancee and co-organizer. “They're there because they're angry."

Stockton said he and Kremer initially took their concerns to Pierson. Feeling that they weren't gaining enough traction, Stockton said, he and Kremer agreed to call Meadows directly.

Kremer, who has a personal relationship with Meadows dating back to his early days in Congress, said she would handle the matter herself. Soon after, Kremer told Stockton “the White House would take care of it," which he interpreted to mean she had contacted top officials about the march.

Kremer denied that she ever spoke with Meadows or any other White House official about her Jan. 6 concerns. “Also, no one on my team was talking to them that I was aware of," she said in an email to ProPublica. Meadows declined to comment on whether he'd been contacted.

A Dec. 27 text from Kremer obtained by ProPublica casts doubt on her assertion. Written at a time when her group was pressing to control the upcoming Jan. 6 rally, it refers to Alexander and Cindy Chafian, an activist who worked closely with Alex Jones. “The WH and team Trump are aware of the situation with Ali and Cindy," Kremer wrote. “I need to be the one to handle both." Kremer did not answer questions from ProPublica about the text.

So far, congressional and law enforcement reconstructions of Jan. 6 have established failures of preparedness and intelligence sharing by the U.S. Capitol Police, the FBI and the Pentagon, which is responsible for deploying the D.C. National Guard.

But those reports have not addressed the role of White House officials in the unfolding events and whether officials took appropriate action before or during the rally. Legislation that would have authorized an independent commission to investigate further was quashed by Senate Republicans.

Yesterday, House Speaker Nancy Pelosi announced she would create a select committee to investigate Jan. 6 that would not require Republican support. It's not certain whether Meadows and other aides would be willing to testify. Internal White House dealings have historically been subject to claims of “executive privilege" by both Democratic and Republican administrations.

Our reporting raises new questions that will not be answered unless Trump insiders tell the story of that day. It remains unclear, for example, precisely what Meadows and other White House officials learned of safety concerns about the march and whether they took those reports seriously.

The former president has a well-established pattern of bolstering far-right groups while he and his aides attempt to maintain some distance. Following the 2017 “Unite the Right" rally in Charlottesville, Virginia, Trump at first appeared to tacitly support torch-bearing white supremacists, later backing off. And in one presidential debate, he appeared to offer encouragement to the Proud Boys, a group of street brawlers who claim to protect Trump supporters, his statement triggering a dramatic spike in their recruitment. Trump later disavowed his support.

ProPublica has learned that White House officials worked behind the scenes to prevent the leaders of the march from appearing on stage and embarrassing the president. But Trump then undid those efforts with his speech, urging the crowd to join the march on the Capitol organized by the very people who had been blocked from speaking.

“And if you don't fight like hell, you're not going to have a country anymore," he said.

One Nation Under God

On Nov. 5, as Joe Biden began to emerge as the likely winner of the 2020 presidential election, a far-right provocateur named Ali Alexander assembled a loose collection of right-wing activists to help Trump maintain the presidency.

Alexander approached the cause of overturning the election with an almost messianic fervor. In private text messages, he obsessed over gaining attention from Trump and strategized about how to draw large, angry crowds in support of him.

On Nov. 7, the group held simultaneous protests in all 50 states.

Seven days later, its members traveled to Washington for the Million MAGA March, which drew tens of thousands. The event is now considered by many to be a precursor of Jan. 6.

Alexander united them under the battle cry “Stop the Steal," a phrase originally coined by former Trump adviser Roger Stone, whom Alexander has called a friend. (Stone launched a short-lived organization of the same name in 2016.) To draw such crowds, Alexander made clear Stop the Steal would collaborate with anyone who supported its cause, no matter how extreme their views.

“We're willing to work with racists," he said on one livestream in December. Alexander did not return requests for comment made by email, by voicemail, to his recent attorney or to Stop the Steal PAC's designated agent.

As he worked to expand his influence, Alexander found a valuable ally in Alex Jones, the conspiracy theorist at the helm of the popular far-right website InfoWars. Jones, who first gained notoriety for spreading a lie that the Sandy Hook school shooting was a hoax, had once counted more than 2 million YouTube subscribers and 800,000 Twitter followers before being banned from both platforms.

Alexander also collaborated with Nick Fuentes, the 22-year-old leader of the white nationalist “Groyper" movement.

“Thirty percent of that crowd was Alex Jones' crowd," Alexander said on another livestream, referring to the Million MAGA March on Nov. 14. “And there were thousands and thousands of Groypers — America First young white men. … Even if you thought these were bad people, why can't bad people do good tasks? Why can't bad people fight for their country?"

Alexander's willingness to work with such people sparked conflict even within his inner circle.

“Is Nick Fuentes now a prominent figure in Stop the Steal?" asked Brandon Straka, an openly gay conservative activist, in a November text message, obtained exclusively by ProPublica. “I find him disgusting," Straka said, pointing to Fuentes' vehemently anti-LGBT views.

Alexander saw more people and more power. He wrote that Fuentes was “very valuable" at “putting bodies in places," and that both Jones and Fuentes were “willing to push bodies … where we point."

Straka, Fuentes and Jones did not respond to requests for comment.

Right-wing leaders who had once known each other only peripherally were now feeling a deeper sense of camaraderie. In an interview, Proud Boys leader Enrique Tarrio described how he felt as he walked alongside Jones through the crowds assembled in Washington on Nov. 14, after Jones had asked the Proud Boys to act as his informal bodyguards.

“That was the moment we really united everybody under one banner," he said. “That everyone thought, 'Fuck you, this is what we can do.'" According to Tarrio, the Proud Boys nearly tripled in numbers around this time, bringing in over 20,000 new members. “November was the seed that sparked that flower on Jan. 6," he said.

The crowds impressed people like Tom Van Flein, chief of staff for Rep. Paul Gosar, R-Ariz. Van Flein told ProPublica he kept in regular contact with Alexander while Gosar led the effort in Congress to shoot down the election certification. “Ali was very talented and put on some very good rallies on short notice," Van Flein said. “Great turnout."

But as Jan. 6 drew nearer, the Capitol Police became increasingly concerned by the disparate elements that formed the rank and file of the organization.

“Stop the Steal's propensity to attract white supremacists, militia members, and others who actively promote violence, may lead to a significantly dangerous situation for law enforcement and the general public alike," the Capitol Police wrote in a Jan. 3 intelligence assessment.

Yet the police force, for all its concern, wound up effectively blindsided by what happened on Jan. 6.

An intelligence report from that day obtained by ProPublica shows that the Capitol Police expected a handful of rallies on Capitol grounds, the largest of which would be hosted by a group called One Nation Under God.

Law enforcement anticipated between 50 and 500 people at the gathering, assigning it the lowest possible threat score and predicting a 1% to 5% chance of arrests. The police gave much higher threat scores to two small anti-Trump demonstrations planned elsewhere in the city.

However, One Nation Under God was a fake name used to trick the Capitol Police into giving Stop the Steal a permit, according to Stop the Steal organizer Kimberly Fletcher. Fletcher is president of Moms for America, a grassroots organization founded to combat “radical feminism."

“Everybody was using different names because they didn't want us to be there," Fletcher said, adding that Alexander and his allies experimented with a variety of aliases to secure permits for the east front of the Capitol. Laughing, Fletcher recalled how the police repeatedly called her “trying to find out who was who."

A Senate report on security failures during the Capitol riot released earlier this month suggests that at least one Capitol Police intelligence officer had suspicions about this deceptive strategy, but that leadership failed to appreciate it — yet another example of an intelligence breakdown.

On Dec. 31, the officer sent an email expressing her concerns that the permit requests were “being used as proxies for Stop the Steal" and that those requesting permits “may also be involved with organizations that may be planning trouble" on Jan. 6.

A Capitol Police spokesperson told ProPublica on April 2, “Our intelligence suggested one or more groups were affiliated with Stop the Steal," after we asked for a copy of the One Nation Under God permit, which they declined to provide.

Yet 18 days later, Capitol Police Acting Chief Yogananda Pittman told congressional investigators that she believed the permit requests had been properly vetted and that they were not granted to anyone affiliated with Stop the Steal. Pittman did not respond to ProPublica requests for comment.

Last week, a Capitol Police spokesperson told ProPublica, “The Department knew that Stop the Steal and One Nation Under God organizers were likely associated," but added that the police believed denying a permit based on “assumed associations" would be a First Amendment violation. “The Department did, however, take the likely association into account when making decisions to enhance its security posture."

Kenneth Harrelson, an Oath Keeper who allegedly ran the far-right group's “ground team" in D.C. on Jan. 6, went to Washington to provide security for Alexander, according to Harrelson's wife. Harrelson has pleaded not guilty to felony charges in connection with the riot and is one of the Oath Keepers at the center of a major Department of Justice conspiracy case.

Harrelson's wife, Angel Harrelson, said in an interview with ProPublica that her husband was excited to visit Washington for the first time, especially to provide security for an important person, but that he lost Alexander in the chaos that consumed the Capitol and decided to join the crowd inside.

“Historic Day!"

As the movement hurtled toward Jan. 6, what started as a loosely united coalition quickly splintered, dividing into two competing groups that vied for power and credit.

On one side, Alexander and Jones had emerged as a new, more extreme element within the Republican grassroots ecosystem.

Their chief opposition was the organization Women for America First, helmed by Kremer and other veterans of the tea party movement, itself once viewed as the Republican fringe. Kremer was an early backer of Trump, and her tea party work helped get Mark Meadows elected to the House of Representatives in 2012.

The schism was rooted in an ideological dispute. Kremer felt Alexander's agenda and tactics were too extreme; Alexander wanted to distinguish Stop the Steal by being more directly confrontational than Kremer's group and the tea party. “Our movement is masculine in nature," he said in a livestream.

Trump promoted both groups' events online at various times.

Stop the Steal, through its alias One Nation Under God, obtained a Capitol Police permit to rally on Capitol grounds, while Kremer and Women for America First controlled the National Park Service permit for a large gathering on the White House Ellipse.

Alexander and Jones wanted to speak at the Ellipse rally, but Kremer was opposed. The provocateurs found a powerful ally in Caroline Wren, an elite Republican fundraiser with connections to the Trump family, particularly Donald Trump Jr. and his partner, Kimberly Guilfoyle. Wren had raised money for the Ellipse rally and pushed to get Alexander and Jones on stage, according to six people involved in the Jan. 6 rally and emails reviewed by ProPublica.

Pierson, the Trump campaign official, had initially been asked by Wren to help mediate the conflict. But Pierson shared Kremer's concern that Jones and Alexander were too unpredictable. Pierson and Wren declined to comment.

On Jan. 2, the fighting became so intense that Pierson asked senior White House officials how she should handle the situation, according to a person familiar with White House communications. The officials agreed that Alexander and Jones should not be on the stage and told Pierson to take charge of the event.

The next morning, Trump announced to the world that he would attend the rally at the Ellipse. “I will be there. Historic day!" he tweeted. This came as a surprise to both rally organizers and White House staff, each of whom told ProPublica they hadn't been informed he intended to speak at the rally.

That same day, a website went live promoting a march on Jan. 6. It instructed demonstrators to meet at the Ellipse, then march to the Capitol at 1 p.m. to “let the establishment know we will fight back against this fraudulent election. … The fate of our nation depends on it."

Alexander and his allies fired off these instructions across social media.

While Kremer and her group had held legally permitted marches at previous D.C. rallies and promoted all their events with the hashtag #marchfortrump, this time their permit specifically barred them from holding an “organized march." Rally organizers were concerned that violating their permit could create a legal liability for themselves and pose significant danger to the public, said Stockton, a political consultant with tea party roots who spent weeks with Kremer as they held rallies across the country in support of the president.

Lawrence and Stockton's fellow organizers contacted Pierson to inform her that the march was unpermitted, according to Stockton and three other people familiar with the situation.

While ProPublica has independently confirmed that senior White House officials, including Meadows, were involved in the broader effort to limit Alexander's role on Jan. 6, it remains unclear just how far the rally organizers went to warn officials of their specific fears about the march.

Another source present for communications between Amy Kremer and her daughter and fellow organizer, Kylie Kremer, told ProPublica that on Jan. 3, Kylie Kremer called her mother in desperation about the march.

Kylie Kremer asked her mom to escalate the situation to higher levels of the White House, and her mother said she would work on it, according to the source, who could hear the conversation on speakerphone. “You need to call right now," the source remembered the younger Kremer saying.

The source said that Kylie Kremer suggested Meadows as a person to contact around that time.

The source said that in a subsequent conversation, Amy Kremer told her daughter she would take the matter to Eric Trump's wife, Lara Trump. The source said that Kremer was in frequent contact with Lara Trump at the time.

Stockton said that he was not aware of Kremer talking to the family about Jan. 6, but added that Kremer regularly communicates with the Trump family, including Lara Trump. He also said that Kremer gave him the distinct impression that she had contacted Meadows about the march.

Through his adviser Ben Williamson, Meadows declined to comment on whether the organizers contacted him regarding the march.

Lara Trump, who spoke at the Ellipse on Jan. 6, did not immediately respond to a voicemail and text message asking for comment or to an inquiry left on her website. Eric Trump did not immediately respond to an emailed request for comment.

Kremer did not answer questions from ProPublica about communications with Lara Trump. Donald Trump's press office did not immediately respond to a request for comment.

The White House, at the time, was scrambling from one crisis to the next. On Jan. 2, Trump and Meadows called Georgia Secretary of State Brad Raffensperger. Trump pressed Raffensperger to “find 11,780 votes" that would swing the state tally his way. On Jan. 3, the president met with Acting Secretary of Defense Christopher Miller and urged him to do what he could to protect Trump's supporters on the 6th.

Meanwhile, Wren, the Republican fundraiser, was continuing to advocate for Jones and Alexander to play a prominent role at the Ellipse rally, according to emails and multiple sources.

A senior White House official suggested to Pierson that she resolve the dispute by going to the president himself, according to a source familiar with the matter.

On Jan. 4, Pierson met with Trump in the Oval Office. Trump expressed surprise that other people wanted to speak at the Ellipse at all. His request for the day was simple: He wanted lots of music and to limit the speakers to himself, some family members and a few others, according to the source and emails reviewed by ProPublica. The president asked if there was another venue where people like Alexander and Roger Stone could speak.

Pierson assured him there was. She informed the president that there was another rally scheduled the night before the election certification where those who lost their opportunity to speak at the Ellipse could still do so. It was meant as an olive branch extended between the competing factions, according to Stockton and two other sources.

Chafian, a reiki practitioner who'd been working closely with Alex Jones, was put in charge of the evening portion of the Jan. 5 event.

The speakers included Jones, Alexander, Stone, Michael Flynn and Three Percenter militia member Jeremy Liggett, who wore a flak jacket and led a “Fuck antifa!" chant. (Liggett is now running for Congress.) Chafian had invited Proud Boy leader Tarrio to speak as well, but Tarrio was arrested the day before on charges that he had brought prohibited gun magazines to Washington and burned a Black Lives Matter banner stolen from a church.

Tarrio told ProPublica that he did not know the flag was taken from a church and that the gun magazines were a custom-engraved gift for a friend. He has pleaded not guilty to a misdemeanor charge of property destruction; the gun magazine charge is still pending indictment before a grand jury.

“Thank you, Proud Boys!" Chafian shouted at the end of her speech. “The Proud Boys, the Oath Keepers, the Three Percenters — all of those guys keep you safe."

Wren, however, would not back down. On the morning of Jan. 6, she arrived at the Ellipse before dawn and began arranging the seats. Jones and Alexander moved toward the front. Organizers were so worried that Jones and Alexander might try to rush the stage that Pierson contacted a senior White House official to see how aggressive she could get in her effort to contain Wren.

After discussing several options, the official suggested she call the United States Park Police and have Wren escorted off the premises.

Pierson relayed this to Kylie Kremer, who contacted the police. Officers arrived, but ultimately took no action.

By 9 a.m.,Trump supporters had arrived in droves: nuns and bikers, men in American flag suits, a line of Oath Keepers. Signs welcomed the crowd with the words “Save America March."

Kylie Kremer greeted them gleefully. “What's up, deplorables!" she said from the stage.

Wren escorted Jones and Alexander out of the event early, as they prepared to lead their march on the Capitol.

At 11:57 a.m, Trump got on stage and, after a rambling speech, gave his now infamous directive. “You'll never take back our country with weakness. You have to show strength and you have to be strong," he said. “I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard."

Lawrence, Dustin Stockton's fiancee and co-organizer, remembers her shock.

“What the fuck is this motherfucker talking about?" Lawrence, an ardent Trump supporter, said of the former president.

In the coming hours, an angry mob would force its way into the building. Protesters smashed windows with riot shields stolen from cops, ransacked House Speaker Nancy Pelosi's chambers, and inflicted an estimated $1.5 million of damage. Roughly 140 police officers were injured. One was stabbed with a metal fence stake and another had spinal discs smashed, according to union officials.

The Stop the Steal group chat shows a reckoning with these events in real time.

“They stormed the capital," wrote Stop the Steal national coordinator Michael Coudrey in a text message at 2:33 p.m. “Our event is on delay."

“I'm at the Capitol and just joined the breach!!!" texted Straka, who months earlier had raised concerns about allying with white nationalists. “I just got gassed! Never felt so fucking alive in my life!!!"

Alexander and Coudrey advised the group to leave.

“Everyone get out of there," Alexander wrote. “The FBI is coming hunting."

In the months since, the Department of Justice has charged more than 400 people for their actions at the Capitol, including more than 20 alleged Proud Boys, over a dozen alleged Oath Keepers, and Straka. It's unclear from court records whether Straka has yet entered a plea.

In emails to ProPublica, Coudrey declined to answer questions about Stop the Steal. “I just really don't care about politics anymore," he said. “It's boring."

Meadows, now a senior partner at the Conservative Partnership Institute, a think tank in Washington, appeared on Fox News on Jan. 27, delivering one of the first public remarks on the riot from a former Trump White House official. He encouraged the GOP to “get on" from Jan. 6 and focus on “what's important to the American people." Neither Meadows nor anyone else who worked in the Trump White House at the time has had to answer questions as part of the various inquiries currently proceeding in Congress.

Alexander has kept a low profile since Jan. 6. But in private, texts show, he has encouraged his allies to prepare for “civil war."

“Don't denounce anything," he messaged his inner circle in January regarding the Capitol riot. “You don't want to be on the opposite side of freedom fighters in the coming conflict. Veterans will be looking for civilian political leaders."

How the pandemic economy could wipe out a generation of black-owned businesses

Of all the products made at Danette Wilder's small manufacturing plant near the University of Kentucky in Lexington, the products she depended on most for sales were the O-rings cranked out by her vintage presses.

Each month, Wilder's crew of six people, working at long tables as they listened to a soundtrack of funk and R&B, made thousands of the rubber loops, cut from spools into precise strips and spliced into uniform perfect circles.

The work distinguished Wilder's company, SealingLife Technology, as one of the vanishingly few rubber products suppliers owned by a female engineer — not to mention one who is also Black. It hasn't been an easy path: Wilder has navigated state and federal set-aside programs, tight-fisted bankers and what she saw as obvious discrimination. But eventually, Wilder built SealingLife into a reliable vendor for all manner of aerospace, medical and other industrial businesses.

Now, SealingLife is struggling to survive as orders for its O-rings have dried up over the past year, plunging the company into hundreds of thousands of dollars in debt. That's not an unusual story in the current pandemic-induced recession, which has been a gut punch for millions of small business owners. But Wilder faces obstacles that are disproportionately common among Black-owned companies, which on average had fewer resources to draw upon going into last year, were hit particularly hard by the downturn and were less well-served by the relief programs set up to help.

“We're in a purgatory state," Wilder said. “The long term is, if we can't get our foot in the door with people who understand what we do and how we do it and provide us opportunities to grow, then the outcome is very bleak.''

There are disparities between American businesses owned by white people and those owned by all minority groups, but the widest ones are typically with Black entrepreneurs, who tend to have modest family wealth and thin professional networks to help recruit talent and cut deals. Although the number of Black-owned businesses has grown in recent years, the vast majority remain sole proprietorships. As of 2012 — the most recent data the Census Bureau has collected — average annual sales for a Black-owned business came to about $58,000, compared to nearly 10 times that amount for the average white-owned enterprise.

Those years of compounding disadvantage have been exacerbated by the pandemic. For example, 18.4% fewer self-employed Black people were working in July 2020 than there had been a year previously, compared to 6.2% fewer self-employed white people (the dips for Asian and Hispanic people were even smaller). And minority-owned businesses overall have also been at the back of the line for relief programs, which were initially designed without factoring in the unique challenges of small businesses owned by people of color. As a result, federal Paycheck Protection Program loans to businesses in areas with a higher percentage of minority residents came in later and in lesser amounts per employee.

That's not new either. Decades of public and private initiatives meant to boost minority-owned businesses have fallen short. Since the 1980s, race-based contracting preferences have been weakened by federal court rulings. Now, the pandemic's fallout threatens to arrest the nascent progress of a generation of Black entrepreneurs. That would only widen the yawning gap between wealth held by white people and that held by African Americans, which had barely begun to narrow after the last recession in 2009.

Wilder, 50, stands an imposing 6 feet tall, and shows up for a factory tour wearing maroon slacks, loafers, and big blocky glasses. She's lived through all of those systemic disadvantages that show up in statistics. But she doesn't want to end up like the averages. She just wants a fair shake.

“Whenever something's been amputated, you need a recovery period," Wilder said. “It's sort of like, when you get behind on something, if there's nothing to help you recover, nothing really helps."

Danette Wilder grew up in inner-city Detroit, where her father, with only a few years of formal schooling, had moved to work in a Chrysler plant. She went to Detroit's Central High School, which at the time had one of the worst graduation rates in the nation.

But Wilder did well in school, and enrolled at Old Dominion University, in Norfolk, Virginia, where her half-sister Gwendolyn Wilder lived. When their brother was murdered in Detroit, the two sisters took over caring for his two infant children. Danette Wilder worked multiple research and development jobs while finishing her degree, then landed an engineering job at Corning Inc., the venerable materials company now famous for making glass iPhone screens. Gwendolyn Wilder, too, got a Corning job, as an executive assistant.

Corning, located in largely white upstate New York, was making a diversity push. But Danette Wilder said she soon learned that she'd been hired at a much lower salary than the other engineering recruits; when she raised the disparity with her bosses, she said, she got nowhere.

Instead, Wilder tried a workaround, getting a side job for a few hours a week at a Toys R Us in Corning, which she knew company employees and executives would frequent. The extra income helped, but she also believes her second job led higher-ups to double her pay. “It caused such an uproar, because people were like, 'She works for Corning?'" Wilder recalled.

Wilder reasoned that working within the system might be more effective than loudly decrying injustice. “Sometimes it's not all about starting a riot," she said. “It's about strategically understanding their rules, and learning how to utilize them to get what you need." (A spokesperson for Corning declined to comment on the incident but said that the company has “consistently operated at parity for minority and majority pay equity for many years.")

Next, Wilder joined Toyota Motor Manufacturing in Georgetown, Kentucky, which paid even better. But the work wasn't as professionally stimulating as at Corning, so Wilder started doing some information technology consulting on the side, and in 2005 she quit Toyota to go out on her own. One consulting client was Les Burd, who in 1989 had started a rubber company called ElastoSeal. Burd hired Wilder as ElastoSeal's chief operating officer, and credits her with improving all manner of business functions. A few years later, when Burd was looking for a succession plan, they arranged for Wilder to buy a stake in the company.

The transfer, however, hit a snag when other people involved in the transaction objected. That brought Wilder to a familiar point for many people of color: Seeing no other plausible explanation for a setback, and wondering whether discrimination could be at play. “You see I'm educated. I've proven I know how to make you money. And you're still struggling?" Wilder said. “It's hard to prove in a court of law, but it really is that legitimate."

Burd said he understands prejudice exists, but doubts that it thwarted his deal with Wilder (who emphasized her respect for him). “It's just different hurdles to jump through, and we didn't make a conscientious enough effort to get it done," he said.

While the deal languished, Wilder started SealingLife, focusing on niche, high-value, low-volume products, many of which needed to be custom-designed to fit specific machines. ElastoSeal eventually leased part of its facility to Wilder and allowed her to run most of its operations. Wilder figures the long incubation period within an established business may have helped her gain a foothold in Kentucky's decidedly white male manufacturing industry. (According to the Census Bureau, in 2012, 6,269 out of 7,032 manufacturing firms in Kentucky were white-owned, while 122 were owned by Black people.)

“We gained a lot of business under that camouflage, because it was white-owned," Wilder said of assuming ElastoSeal's operations. Gwendolyn Wilder, who now helps run SealingLife, recalled both of them being blatantly slighted in meetings with other businesses and lenders. “It's not like it's hidden. It's in your face," she said.

Danette Wilder's small staff includes her brother Delonzo Wilder, who helps with SealingLife's trucking division, and childhood friend Jasmine Heflin, who works in the production room. As orders dropped off during the pandemic, Wilder tried to avoid layoffs by reducing hours, which was easier because some employees left of their own accord to care for children whose schools had closed.

Inside the company's supply warehouse, a high-ceilinged room with racks that hold spools of rubber and plastics, a curtained-off section hides much of the advanced work that may be key to SealingLife's future. Sitting atop a giant tabletop machine used to cut large sheets of material, Wilder huddled with a young process engineer named Sarah Honchul, who showed her a tiny, orange, hole-filled rubber rectangle that she had developed for an equine medical device. (Kentucky is horse country, after all.) Honchul is also working on a gasket seal for a company that manufactures laboratory experiment systems for the International Space Station.

“That has to pass tests at NASA," Wilder said with a hint of pride.

SealingLife is AS9100- and ISO 9001-certified, which allows it to do aerospace business. The certifications are neither easy nor cheap to get, but they are supposed to pay off by getting big companies to trust a business to deliver quality on high-risk products. SealingLife will do lower-tech jobs too; one of its more consistent gigs is making football thigh pads with custom-designed decorative imprints.

Still, everything is harder for companies without strong networks and vast capital reserves. Wilder doesn't have the cash flow to afford high salaries, so she hires workers right out of college and trains them. She can't afford new equipment for extruding and grinding rubber, so she buys ancient machines at auctions and refurbishes them. The colorful masses of steel sit like dinosaurs around the warehouse, in various states of operability. “The newest thing in here is probably the fridge," said Jennifer Cady, Wilder's quality representative.

When the machines break, which they often do, Wilder repairs them herself, sapping time from hunting new business. She could seek a loan to expand more quickly, but Black-owned firms have historically had a tougher time with lenders. According to a 2016 Federal Reserve survey, the share of Black entrepreneurs applying for loans was 10 percentage points higher than that of white entrepreneurs — but were almost twice as likely to have their applications rejected.

Burd, who is white, said he never had trouble getting loans for ElastoSeal. Wilder's experience was different: Her own bank turned her down for a loan multiple times, and she finally found a small local bank to extend credit. Of course, it's easier to guarantee loans with high-dollar, long-term contracts in place. And those kinds of contracts are difficult to win without equipment that produces quick turnarounds.

For example, cutting rubber for O-rings takes longer than it would if SealingLife had the capital to purchase more modern equipment. The company's hand presses are difficult for less-skilled workers to operate, making it harder to ensure high-quality product. “We would love to get automated presses, because that makes it so we can standardize the process more, we'd have more consistent pieces coming out," Cady said.

To help her employees develop some of those skills, Wilder sent them to train with Darryl Hawkins, who runs a small rubber compounding company in Wichita Falls, Texas. Compounding involves mixing various chemicals used in rubber production, such as carbon black, which can coat clothes and skin so thoroughly that it still seeps onto sheets after workers have taken a shower. Hawkins and Wilder met at a conference; as far as they can tell, theirs are among a small handful of Black-owned rubber companies in the U.S.

Hawkins followed a path similar to Wilder's, but two decades earlier. He served as a chemist for tire manufacturing companies before striking out on his own in 1985. Trying to get loans, he said, he was often passed over. Instead, he slowly expanded his company. He primarily served the oil industry, which was struggling with sagging prices before the pandemic, and saw them fall off a cliff when energy demand collapsed. He would sell his business, but there aren't many interested buyers.

“Unfortunately, it's like trying to reach up like a drowning man right now," said Hawkins, who has a fuzzy beard and walks with a cane. “You'd grab for almost anything."

Wilder hoped that her orders for rubber would keep his business alive, but hasn't had enough to pass along. She still dreams of buying Hawkins out, but the pandemic put a hitch in those aspirations. Now, she worries about becoming what he is: a small business owner without a cushion that could be wiped out if conditions worsen.

“Where is his retirement?" Wilder asked, rhetorically. “I get emotional about this now. Because there are still people out here who have a sense of integrity, want to give back and do well and serve their customers the old-fashioned way. A lot of minority companies, that's what they want to do."

And despite all the progress America is supposed to have made on racial equity, nothing seems to be getting easier.

“I see it happening to me," Wilder said.

Policymakers have tried for years to mitigate the structural disadvantages facing minority-owned businesses, but those efforts have been scaled back over the years, rather than strengthened.

Take contracting preferences. After passage of a 1977 law, federal, state and local governments set firm targets for the percentage of their procurement dollars that should go to minority-owned businesses. White business owners challenged them almost immediately in court. In 1989, the U.S. Supreme Court overruled a set-aside program in Richmond, Virginia, but left the door open if the public entity conducted a study and found that minority-owned firms were disadvantaged in the area. In 1997,even that bit of flexibility disappeared, when the high court found that Philadelphia's set-aside program was unconstitutional. Over the years, cities and states weakened their minority contracting requirements to the point where they often have little effect.

In Lexington, for example, the city government aims to award 10% of its contracting dollars to disadvantaged businesses. But that category includes women- and veteran-owned businesses, which scooped up the overwhelming majority of those opportunities in 2019 and 2020,according to the Lexington Herald-Leader. Less than 1% of the dollar value of the city's disadvantaged-business contracts went to Black-owned businesses.

Wilder's experience with city government contracting has been difficult. In 2014, she decided to repurpose trucks that she'd purchased for rubber business and turn them instead into a waste-hauling division. As the business grew, she signed on as a minority-owned subcontractor to a white-owned company called Waste Services of the Bluegrass, which was vying for Lexington's 5-year, $17 million trash contract. She thinks her participation in the bid helped Waste Services ultimately win. But as the number of vehicles needed to fulfill the contract grew beyond Waste Services' plans, she contends, her equipment was damaged and the business went to another supplier. She's now suing in Fayette County Circuit Court for breach of contract, having lost thousands of dollars on the debacle. Waste Services did not respond to a request for comment.

“Welcome to Kentucky," Wilder said wryly.

On the state level, Kentucky maintains a directory of women- and minority-owned businesses, but does not require their participation in government procurement.

Federal programs have also been under attack. For example, in 1998, U.S. Sen. Mitch McConnell tried to amend a transportation funding bill to strip out race-based preferences. “Every time the government hands out a highway contract to one person based on race or gender, it discriminates against another person based on race or gender," McConnell saidduring floor debate. The Department of Transportation's disadvantaged business contracting program survived, but the Clinton administration had already tightened eligibility requirements, making it harder to qualify.

What's left is the Small Business Administration's 8(a) program, which gives a competitive edge for federal contracts to small firms that are owned by veterans, minorities, or women. But with onerous certification requirements and no guaranteed returns, the number of enrolled businesses sank in the early 2010s. Participation rose again over the past few years as the application process was streamlined. In 2018, the agency's inspector general criticized the changes for giving benefits to firms that weren't truly disadvantaged. (Hawkins' business got certified — at a cost of about $10,000 — but he said he never saw much new business as a result. Wilder is in the process of applying, saying she thinks she's built the connections necessary to actually win contracts.)

The federal government also tries to help minority-owned businesses in other ways. The Minority Business Development Agency, established by presidential decree in 1969, has limped along with a budget of about $45 million a year, running a network of business assistance centers and commissioning occasional research reports.

President Donald Trump proposed eliminating the MBDA, but Congress did not oblige. So to run the office, Trump appointed a 2016 campaign volunteer who, before he took a job in Trump's Department of Commerce, had no business development experience: Henry Childs II, a Texas lawyer.

Childs said he tried to get the MBDA enshrined in statute, and despite his initial allegiance to Trump, spoke up when he saw potential problems with White House initiatives like PPP that gave an edge to businesses with strong banking relationships. “I don't know if they thought the PPP was going to be the answer, but it wasn't," said Childs, who went on to launch a private equity fund for minority-owned businesses. “I don't think they understand the difference between Wall Street and Main Street."

Efforts to help minority-owned businesses also exist in the private sector. Over the years, many large companies have developed “supplier diversity" programs to include entrepreneurs of color. But they often have little transparency and weak standards, according tosurveys.

With heightened attention to racial injustice following the George Floyd police killing, many large corporations pledged to amp up supplier diversity and lending initiatives. Coca-Cola, for example, pledged to increase its purchases from Black-owned suppliers by $500 million over the next five years, while Netflix deposited $100 million into Black-owned banks. But Adrienne Trimble, who ran the National Minority Supplier Development Council until Mar. 1, when she took a job as chief diversity officer at Sysco, worries that corporate attention could fade.

“We don't want this to just be a moment in time," Trimble said. “We expect this to be a movement, and holding those companies accountable to ensuring they have diversity in their supply chains."

Accountability is an elusive thing. Outside of government contracting, no law requires private businesses to contract with minority-owned firms, or to disclose how much they do. As Wilder has experienced, a diversity initiative can peter out quickly. “Like a lot of things to help women and minorities, there's a big push for a while, and then it wanes off," Wilder said, remembering her time at Corning.

Parker Hannifin, the Cleveland-based conglomerate, was SealingLife's biggest O-ring customer until it cut back its orders almost to zero in early 2020. Wilder said the company gave her no explanation.

A spokesperson for Parker Hannifin, Aidan Gormley, said that orders were dropped after it merged several business units and began to manufacture O-rings in-house. “The change was a business decision and in no way reflected the quality of products or services provided by the supplier," Gormley said.

Parker Hannifin said it has a diverse supplier base, but it declined to disclose any numbers, which makes Wilder skeptical about how much effort they're putting into it. The company controls so much of the market for seals that, without it, Wilder has a more limited range of potential customers. Wilder even won a regional supplier of the year award from the NMSDC, which she hoped would jump-start new business opportunities. But pitching big companies is frustrating, even when they have supplier diversity programs.

“A lot of times the wrong people are sitting at that table, and they don't have the knowledge to know what we're talking about, and they don't know where to put us," Wilder said. “So we get caught in this nested loop, which becomes very frustrating, if 99 out of 100 times that's what happens."

Wilder is grateful for the nearly $500,000 she got from the SBA's Economic Injury Disaster Loan and PPP programs, which she applied for early (although her second-draw PPP loan hasn't come through yet, leaving her more dependent on the non-forgivable EIDL). But it's merely left her treading water, while she works to diversify into operations consulting and team up with other small companies to go after bigger contracts.

What more could public policy do? Along with strengthening government contracting requirements for small businesses, Wilder suggests, one big step would be more heavily incentivizing and monitoring private-sector supplier diversity programs. If the federal government pushed companies like Parker Hannifin to buy goods and services from small and minority-owned firms, she thinks, the resulting leg up would allow companies like hers to grow and be more competitive.

Advocates and academics have proposed plenty of other ways to bolster Black entrepreneurs. One would be for the federal government to pump tens of billions of dollars into community development financial institutions, which explicitly focus on lending in underserved communities. (Congress got a start on this in December, allocating $12 billion to CDFIs.) Another would be re-invigorating the MBDA to fund more universal, easier-to-access technical assistance programs and to make infrastructure grants that support Black communities, like renovating and redistributing vacant properties. (Connor Maxwell, the Center for American Progress analyst who co-wrote the MBDA proposal, now works at Biden's National Economic Council, but so far the administration's racial equity agenda has not specifically focused on minority-owned businesses.)

One side benefit of supporting minority-owned businesses is that they tend to employ more people of color, which could also help close racial gaps in unemployment. And that's true of Wilder. She's always seen her business as a way to lift up those around her. Long-term, she doesn't want SealingLife to be just a family business. She wants it to be something bigger.

“This industry has been run by a lot of white companies that do this and they pass it down to their kids, and it's like a glass ceiling, and breaking into it is impossible," Wilder said. And then, only half-joking: “The government needs to have a stimulus package for mental health counseling for what we go through, the constant letdowns. We need some rehab."

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