Investigative Journalism in the Public Interest
Who’s Been Impersonating This ProPublica Reporter?
The post Who’s Been Impersonating This ProPublica Reporter? appeared first on ProPublica.
The call came from a number I didn’t recognize, with a Canadian area code. A steely voice on the other end of the line greeted me, identifying himself as an official with the Canadian military. He had a question: Had I been reaching out to him on WhatsApp, trying to work him for information? I paused. As an investigative reporter at ProPublica, I’m reaching out to a lot of people all the time. But as I racked my brain, I couldn’t think of any Canadians I had recently tried to develop as sources. It seems as though someone is impersonating you, the man warned. I was at a loss. What was Fake Me asking about? Were they just using my name or my picture too? How could I be sure the person warning me about this impostor wasn’t actually an impostor himself? The Canadian official assured me he’d send a message from his government email to confirm his identity, and he’d include screenshots of his conversation with Fake Me. I thanked him, and we exchanged some pleasantries. Before saying goodbye, I asked him if there was anything he’d like to get on the radar of an investigative reporter. (Without even realizing it, I was working him for information. Maybe Fake Me and Real Me aren’t so different.) The screenshots the Canadian sent over later showed someone with a Miami number using my ProPublica headshot as their profile pic. I’ve never lived in Florida. “This is Robert Faturechi from ProPublica,” Fake Me wrote. “I really need to get in touch with you.” The Canadian asked me not to publicly reveal too many details about his work, but it involves dealing with other countries, including Ukraine. I alerted our security team at ProPublica. They told me that there was little we could do aside from reporting the fake account to WhatsApp. We did, and I put the matter behind me — until two weeks later, when I got another warning. This time it was a Latvian businessman who said he runs an organization providing equipment to the Ukrainian military and is involved in a drone development project with Ukrainian forces. “Hey!” the Latvian wrote to me on LinkedIn. “Was good to chat on Signal! Let’s connect here as well!” The only problem was I had never chatted with him on Signal, the encrypted messaging app. The Latvian reached out to me on LinkedIn because he was concerned he wasn’t talking to Real Me on Signal. He sent over screenshots of someone using my headshot and claiming to be me. “Am I right in understanding that you are an expert in the field of UAVs?” Fake Me had messaged the Latvian, referring to unmanned aerial vehicles, a fancy term for drones. “My clients,” the impostor explained, “are particularly interested in the application of UAVs in Ukraine.” The Latvian had offered to discuss the topic in a phone call, but Fake Me (who could be a man or woman) declined, saying they weren’t “comfortable” talking on the phone. They asked to continue the “conversation in written format” or if the Latvian could “record a voice message on this topic.” The Latvian, growing suspicious, insisted on a video call. Fake Me relented, sending him step-by-step instructions they said would result in a secure video chat, but that actually appeared to have been an attempt to trick the Latvian into giving up access to his email account. The Latvian ultimately blocked Fake Me. The impersonations were disquieting. Investigative reporting is hard enough with public trust in media so low and those in power stepping up attacks against journalists. Scammers giving potential sources another thing to worry about just makes our work more difficult. I can’t be certain what Fake Me is up to, but posing as a journalist in this way seems to be the latest evolution in online deception. ProPublica has chronicled the dark world of pig butchering, in which human traffickers in Asia force their victims to scam people by posing as friends or potential romantic interests. In those cases, the goal is cash. But sometimes the objective is stealing sensitive information. And even sophisticated actors can fall victim to so-called phishing attacks, in which scammers impersonate legitimate entities. One of the most notable and perhaps consequential instances was when John Podesta, chair of Hillary Clinton’s 2016 presidential campaign, fell victim to an email purporting to be a Google security alert, giving hackers access to his personal Gmail account. Thousands of his emails, some of them quite damaging to Clinton and the Democratic Party, were published online. <img fetchpriority="high" decoding="async" width="739" height="1466" js-autosizes src="https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?w=527" alt="A screenshot of a WhatsApp conversation." class="wp-image-74162" srcset="https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg 739w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=151,300 151w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=516,1024 516w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=422,837 422w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=552,1095 552w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=558,1107 558w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=527,1045 527w, https://www.propublica.org/wp-content/uploads/2026/04/Imposter-Redacted.jpg?resize=400,794 400w" sizes="(max-width: 739px) 100vw, 739px" /> A screenshot of the conversation between a Canadian official and Fake Robert. Obtained and redacted by ProPublica From the screenshots the Canadian and Latvian sent me, I could tell Fake Me wasn’t asking for credit card info or urging anyone to buy a gift card. It didn’t appear to be a moneymaking scam. I’m not sure who else they’ve reached out to, but in both cases I was alerted to, Fake Me seemed to have an interest in foreign militaries. Maybe some clunky intelligence operation? I tried calling Fake Me using the phone number they used to reach out to the Canadian defense official. I got a recorded message saying the line was not in service. On Signal and WhatsApp, the number rang and rang, without an answer. There was even less we could do about the second impersonation than we could about the first. Signal keeps extremely little information about its users; it knows when someone first created their account and the phone number they used to do so but stores nothing about who they’re messaging. That’s by design. The hands-off approach is part of why it’s a safe platform for journalists to talk securely to sources. But it also makes catching impostor accounts difficult. Red flags, like sending messages with suspicious links, aren’t detectable by Signal. (WhatsApp can’t see the content of messages unless a user reports them. It has the ability to see who its users are messaging, but a spokesperson said it’s rare for the company to store that data.) Cooper Quintin, a technologist at the digital privacy nonprofit Electronic Frontier Foundation, said he had never heard of a case like mine on Signal. But overall he was noticing an upswing in scams on the secure messaging app. Signal was doing what it could, he said, such as adding a feature that slows down would-be spammers trying to send many messages in a short time frame. Signal also makes links from unknown senders unclickable. But there are limits to what Signal can do, he said, without compromising its hallmark privacy protections for its users. “This fits a trajectory. As Signal gets more popular, more attackers start to view it as a potential platform for attacks,” said Quintin, who insisted we talk via video chat so he could be sure I wasn’t an online impersonator asking to interview him about being impersonated online. Some platforms — such as Facebook and Instagram — allow users to get verified accounts in which the site essentially confirms they are who they claim to be. But it wouldn’t be feasible for Signal to do the same, said digital security expert Runa Sandvik, who consults on security matters for ProPublica. The nonprofit that runs Signal is small, and verification would require staffing it doesn’t have. More significantly, she said, it would require Signal to collect more information about its users, eroding the privacy protections that make it popular. Signal did not provide comment for this article. A spokesperson for WhatsApp said “we have a strong track record of banning those trying to scam others and staying ahead of scammers and their tactics.” The spokesperson said WhatsApp “took appropriate action in line with our policies” against the account spoofing me but declined to say what that action was. In general, WhatsApp tries to root out scam accounts, even before they’re reported, by monitoring for suspicious behavior that includes attempting to launch many accounts from a single location. It turns out, if you’re contacted by someone pretending to be a reporter, the best way to scuttle their scam is to do a little reporting of your own. Every journalist at ProPublica has a bio page. Here is mine. On my bio page, you’ll find my Signal handle and email if you click on the Contact Me button. You can always check the Signal information or email address on my bio page to verify that I’m the person contacting you. This is true for every ProPublica reporter: We all have our Signal numbers or usernames on our profiles, and we all have an email ending in @propublica.org. <img decoding="async" js-autosizes height="919" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?w=752" alt="" class="wp-image-74198" srcset="https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg 1080w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=245,300 245w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=768,939 768w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=838,1024 838w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=863,1055 863w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=422,516 422w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=552,675 552w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=558,682 558w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=527,644 527w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=752,919 752w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=400,489 400w, https://www.propublica.org/wp-content/uploads/2026/04/Robert-Contact-1.jpg?resize=800,978 800w" sizes="(max-width: 752px) 100vw, 752px" /> The same goes for reporters at other outlets. If one reaches out to you and you have doubts, check their website and social accounts to verify their email or Signal or WhatsApp numbers. We’ve heard through the media grapevine and in published accounts about scams similar to mine hitting other organizations as well. They include smaller-scale deceptions. The New York Times recently flagged an account on X falsely claiming to be an intern for the news organization. In 2023, Reuters reported that two of its reporters in China were being impersonated via Instagram and Telegram accounts that were attempting to get information on activists protesting the country’s COVID-19 policies. And just this month, a correspondent for Reuters in Saudi Arabia warned his followers that someone was impersonating him on WhatsApp. There are also more sophisticated campaigns to be on alert for. The German government this year released a vague warning about what it described as likely a state-sponsored actor attempting to commandeer the Signal accounts of government officials and reporters across Europe. And last month, the FBI announced that individuals associated with Russian intelligence were posing as Signal’s security department to fool American government officials and journalists into providing information that would allow the hackers to take over their accounts. Once they had access, the FBI warned, they could see conversations and contact lists, and send messages as the victim. These scams should worry anyone who cares about investigative reporting. Throughout my career, I’ve done sensitive stories exposing wrongs in politics, finance, the military and law enforcement. Many of them relied on courageous individuals who have taken leaps of faith and shared information, sometimes at real personal risk. I go to great lengths to protect my sources and make sure they are comfortable taking that risk. If potential sources have to doubt that I am who I say I am, they may be less likely to engage. When journalists are impersonated online, like I have been, Sandvik said they shouldn’t be quiet about it. “If and when it does happen, be very public about it, which is what you’re doing now,” she said. “Let people know this is happening so if people hear from you, they know this is something to look out for.” The post Who’s Been Impersonating This ProPublica Reporter? appeared first on ProPublica.
A Judge Worried a Proposed Settlement Doesn’t Do Enough to Help Victims. The DOJ Is Still Moving Forward.
The post A Judge Worried a Proposed Settlement Doesn’t Do Enough to Help Victims. The DOJ Is Still Moving Forward. appeared first on ProPublica.
The Justice Department said Friday that it would move forward on a proposed $68 million settlement with a Texas land developer it had accused of preying on Hispanic residents, despite a judge’s concerns that the agreement did not do enough to help victims. During a hearing, U.S. District Judge Alfred H. Bennett questioned why the settlement had no compensation for those who were harmed and grilled a federal prosecutor over $20 million devoted to police and immigration enforcement. He said he was uncomfortable with the provision because the Justice Department’s lawsuit against Colony Ridge, which has massive subdivisions north of Houston, mentioned nothing about public safety or immigration. “I thought I was dealing with … folks who had been defrauded, with allegations of above-market interest rates, improper foreclosures,” Bennett said, holding up the original lawsuit in his right hand and the settlement in his left. “Now, all of the sudden, I’m being asked to OK increased law enforcement?” “Who in the settlement room said it would be a good idea to give $20 million to law enforcement?” Bennett asked early in the hearing. “Where did that come from?” The original idea came from the state, said Justice Department senior prosecutor Varda Hussain, referring to the office of Texas Attorney General Ken Paxton. Paxton’s office filed a similar lawsuit that would also be resolved through the settlement. He did not respond to a request for comment. Hussain, a principal deputy chief at the Justice Department’s Washington headquarters, said that the federal government stood by the provision even though neither its lawsuit nor the state’s raised concerns about crime. Colony Ridge residents told federal investigators that they were worried about crime in the development after the lawsuit was filed, Hussain said. “I understand what it might look like to you, but I am telling you that this is a concern that friends of the court and residents will tell you exists,” Hussain said. The settlement ends a three-year legal dispute in which the Justice Department and Consumer Financial Protection Bureau accused Colony Ridge of deceiving tens of thousands of Hispanic consumers into taking out high-interest loans that many could not afford. The developer then benefited when it foreclosed on their properties, prosecutors said. Former attorneys and investigators with the Justice Department and CPFB, including those involved in filing the original lawsuit in 2023, told ProPublica and The Texas Tribune they were stunned that the Trump administration had reached a settlement that did not seek to compensate victims. Of the 183 housing and civil enforcement settlements the Justice Department has announced since 2018, only 6% lacked money for victims, and none included funding for police or immigration enforcement, an analysis by the news organizations found. Including such a provision in a predatory lending case has never been done before, said Bennett, who sought to find a compromise. An hour into the hearing, Bennett asked the Justice Department and the attorneys for Colony Ridge, which has denied any wrongdoing, whether they would consider his suggestions to revise the settlement to obtain his approval. Colony Ridge attorney Jason Ray said his client would consider it. Hussain said the Justice Department wasn’t interested. Instead, the Justice Department said it would pursue the settlement without seeking judicial approval under a provision of federal law that allows it to do so. That means the court will not supervise Colony Ridge to ensure the developer follows the terms of the settlement, said Johnathan Smith, former deputy assistant attorney general for civil rights during the Biden administration. Smith, who helped assemble the Colony Ridge lawsuit three years ago, said now the case simply goes away because there is no one to enforce it. He added that the Justice Department cannot sue Colony Ridge based on the same claims in the future. “By having settlements that are public and that are court-enforced, it sends a clear message to other potential bad actors that there could be real consequences for their actions,” Smith said in an email. He said the Justice Department’s decision amounts to a “get out of jail free card.” The “DOJ is turning its back on the victims, and those victims are left with no recourse and no assurance that any actions will be taken to remedy the harms that were identified in DOJ’s original complaint,” Smith said. The Justice Department did not immediately respond to a request for comment about Smith’s criticisms. During the hearing, however, Hussain said the department would ensure Colony Ridge abides by the settlement. In a court filing, the developer said it had already started implementing the provisions, which include adopting stricter lending standards. Keilah Sanchez, a former Colony Ridge landowner who, along with her sister, collected complaints from residents who said they had been mistreated by the developer, said it was crushing to see the settlement be implemented without helping past victims. “It’s unbelievable, but at this point, I don’t expect much from these agencies,” she said. The post A Judge Worried a Proposed Settlement Doesn’t Do Enough to Help Victims. The DOJ Is Still Moving Forward. appeared first on ProPublica.
Tennessee Lawmakers Pass Fix to School Threats Law After Kids Were Arrested for Jokes and Misunderstandings
The post Tennessee Lawmakers Pass Fix to School Threats Law After Kids Were Arrested for Jokes and Misunderstandings appeared first on ProPublica.
Tennessee lawmakers passed legislation this week to fix the state’s controversial threats of mass violence law, which had resulted in children being charged with felonies over jokes and misunderstandings. Gov. Bill Lee is expected to sign the bill, which will require that school officials only report student threats to police if a threat is “credible,” meaning reasonably expected to be carried out. Previously, a school administrator who failed to report any threat of mass violence could be charged with a misdemeanor. The change comes after pressure from advocates and an investigation by ProPublica and WPLN. Many of the children charged had disabilities and were students of color. One of the youngest children charged with a felony last year was 6. In one case ProPublica and WPLN investigated, an autistic teenager with an intellectual disability told his teacher that his backpack would blow up if anyone touched it. Police only found a stuffed bunny inside, but they arrested and charged him with making a threat of mass violence. That child’s mother is now suing the school district; the case is ongoing. Another family ProPublica and WPLN wrote about later won a $100,000 settlement against a Chattanooga public charter school; family members argued in a federal lawsuit that the school wrongly reported their 11-year-old autistic child to the police. Multiple parents also filed a lawsuit against Williamson County Schools, outside of Nashville, claiming their children were wrongly suspended and arrested after being accused of making threats of mass violence at school. The school board disputed the claims in court records and moved to dismiss the lawsuit. In an initial ruling, the judge said the families had a “plausible claim” and allowed the case to move forward. Sen. Ferrell Haile, who co-authored this year’s bill, said during a late March committee hearing that he hoped it would prevent students with disabilities from being needlessly arrested for statements “they have no ability to carry out.” He said he was inspired by the story of a fifth grader with a disability in his district who made a statement out of frustration one day at school. The school police officer told the family he didn’t want to arrest the child but the law required him to, whether or not the threat was credible. His superiors charged the child with a felony. “In some counties, it has become a standard practice to charge every threat even if it has been deemed not credible,” Haile said at the hearing. Haile’s current stance is a departure from his prior position and those of most other Tennessee Republicans, who refused to back similar language as recently as last winter. In fact, in 2025, Haile proposed a bill that would extend the felony threats law to more locations, including child care agencies, preschools and churches. When a Democratic colleague asked him during a hearing to consider only applying the felony charge to people who intended to carry out the threats, Haile said no. Police and district attorneys — not school principals or counselors — should be responsible for determining whether a threat was credible, he said last year. Haile did not respond to a request for comment. Advocates are applauding the recent change to the law but warn that it isn’t a panacea. Tennessee law still does not require police to consider whether a threat is credible before charging or arresting youth. “This is not a total solution to threats of mass violence,” said Zoe Jamail, an advocate for children with the nonprofit Raphah Institute. “It is a huge step forward in terms of signifying an intent by the legislature that noncredible threats shouldn’t be prosecuted.” The post Tennessee Lawmakers Pass Fix to School Threats Law After Kids Were Arrested for Jokes and Misunderstandings appeared first on ProPublica.
“A Slap in the Face”: Trump’s DOJ Plans to Settle Predatory Lending Case Without Compensating Victims
The post “A Slap in the Face”: Trump’s DOJ Plans to Settle Predatory Lending Case Without Compensating Victims appeared first on ProPublica.
In December 2023, the U.S. Justice Department sued a Texas land developer it accused of duping tens of thousands of Hispanic residents into predatory mortgages, a landmark case for the Biden administration. Colony Ridge, which sold plots in massive subdivisions north of Houston, had become a “one-stop shop for discriminatory lending,” Kristen Clarke, assistant attorney general for civil rights, said at a news conference announcing the lawsuit. The developer targeted Hispanic applicants through false advertising and persuaded them to take out high-interest loans that many could not afford, then benefited when it foreclosed on their properties, the lawsuit alleged. “Our goal at the end of the day is to ensure that victims are compensated for their loss,” Clarke declared. Three years later, the Trump administration and Colony Ridge are on the verge of resolving the case. But the $68 million proposed settlement provides no money for victims of the alleged scheme. Instead, it sets aside $20 million for policing and immigration enforcement — a provision that may be used to target the very people who were victimized by the developer, according to former government officials who worked on such cases. “I’ve never seen a settlement like this, with a complete misalignment between what you’re settling and what the resolution is,” said Elena Babinecz, who led fair lending investigations at the Consumer Financial Protection Bureau for 12 years under the Obama, Trump and Biden administrations, before leaving in October. “It’s a slap in the face to the individuals that were harmed; that the Justice Department acknowledges were harmed,” said Babinecz, who was at the bureau when it joined the Justice Department in filing suit against Colony Ridge. “It’s a complete misjustice, and it’s not at all why these civil rights laws were passed.” <img decoding="async" js-autosizes height="973" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="A court document outlining a proposed settlement agreement with a highlighted line that reads, “(1) general local law enforcement, including, primarily, funding additional delegated immigration enforcement authority from the federal government to the Liberty County Sheriff’s Office and Liberty County Constable offices.”" class="wp-image-73732" srcset="https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 2318w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=232,300 232w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,994 768w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=791,1024 791w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1187,1536 1187w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1582,2048 1582w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,1117 863w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,546 422w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,714 552w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,722 558w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,682 527w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,973 752w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,1487 1149w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1236,1600 1236w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,518 400w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,1035 800w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,1553 1200w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,2071 1600w, https://www.propublica.org/wp-content/uploads/2026/04/ColonyRidge-Settlement_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,2588 2000w" sizes="(max-width: 752px) 100vw, 752px" /> The Justice Department’s proposed settlement in the Colony Ridge case sets aside $20 million for policing and immigration enforcement but no money for victims of the alleged scheme. U.S. District Court for the Southern District of Texas. Highlighted by ProPublica and The Texas Tribune. Seven other attorneys and investigators who formerly enforced the federal government’s lending and housing civil rights laws also told ProPublica and The Texas Tribune that they were stunned by the agreement, which a U.S. district judge must still approve. Indeed, Colony Ridge is the largest Justice Department case since at least 2018 in which the settlement includes no monetary compensation for victims. The judge has scheduled a hearing on Friday over the proposal. A coalition of fair housing and civil rights groups has urged the court to reject the settlement, arguing the lawsuit is the only realistic prospect for many consumers to get recompense because they cannot afford private attorneys. The Justice Department had built a case against Colony Ridge with “stark and overwhelming evidence,” Clarke told the news organizations. Prosecutors said Colony Ridge repeatedly misled consumers about the condition of lots they purchased, forcing them to spend hundreds or thousands on drainage improvements and utility connections they hadn’t known the land needed. This contributed to consumers defaulting on high-interest loans, according to the lawsuit. Colony Ridge then benefited from the improvements made to the land it foreclosed on and resold the lots at higher prices. In the end, tens of thousands of victims were exploited through the developer’s predatory practices in a span of eight years, the government argued. Colony Ridge repossessed more than 15,000 lots, many owned by immigrants, a 2023 investigation by the Houston Landing found. Of the 183 housing and civil enforcement Justice Department settlements since 2018, only 6% did not include money for victims. Each of those cases was smaller in scope than Colony Ridge. They included a suburban Maryland car dealership accused of racial discrimination in loan offers over a seven-month period and a California landlord who allegedly refused to provide handicapped parking to one tenant. None of the settlements — except for Colony Ridge — includes funding for police or immigration enforcement. <img loading="lazy" decoding="async" js-autosizes height="501" width="752" data-id="73730" src="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="Three houses sit back in a large, grassy field with some short trees under a blue, cloudy sky." class="wp-image-73730" srcset="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,200 300w, 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https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,351 527w, 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800w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_473_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> <img loading="lazy" decoding="async" js-autosizes height="501" width="752" data-id="73726" src="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="An unfinished house, draped with white plastic construction material, sits behind a deteriorated wooden fence." class="wp-image-73726" srcset="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,683 1024w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1536,1024 1536w, 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558w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,1333 2000w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_109_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> The government argued that Colony Ridge exploited tens of thousands of people through predatory mortgages. Lexi Parra for ProPublica and The Texas Tribune As federal investigators built a case around how Colony Ridge had treated its largely immigrant customers, conservative media and politicians aligned with Trump — who had made immigration enforcement a cornerstone of his campaign — did not focus on how consumers had been harmed. They instead accused the development of being a haven for immigrants. They claimed, without providing evidence, that the development was a base for Mexican drug cartels and a “no-go” zone for police. Local law enforcement disputed the assertions, saying that violent crime there was no different from other neighborhoods in and around Houston. State legislative panels convened to investigate the allegations also fizzled out after they were unable to substantiate such claims. Neither the federal government nor a lawsuit filed by Texas Attorney General Ken Paxton months later raised public safety concerns or a need for more policing or immigration enforcement. The Justice Department declined to comment and did not respond to the concerns raised by former employees and people involved in the case. Paxton’s office did not respond to multiple emails. But while announcing the settlement in February, Harmeet K. Dhillon, who leads the department’s Civil Rights Division, argued that Colony Ridge had encouraged illegal immigration by targeting Hispanic consumers with the bait of affordable homeownership. “This DOJ will go after all lenders, financiers, and land developers who participate in schemes which ultimately encourage illegal immigration,” she said. In his own news release about the settlement, which would also resolve the Texas suit, Paxton focused primarily on funding set aside for immigration enforcement. “Under my watch, Texas will never be a sanctuary for illegals,” he said. The focus on immigration makes the lives of those who were harmed more difficult, said Catherine Bendor, a manager in the Justice Department’s Housing and Civil Enforcement Section for eight years until 2024. “Even if they’re citizens, they’ll likely be hassled by immigration agents who target people based on appearance or accent,” she said. John Harris, Colony Ridge’s CEO, declined to be interviewed. The settlement does not include an admission of wrongdoing. He has long maintained that his company, which started in 2011 and offered mortgages for as little as a 1% down payment, has not preyed on its customers. The financing terms helped the development grow rapidly, albeit inconsistently, with neat modular homes, trailers and abandoned or vacant lots across more than 33,000 acres. Matt Rascon, a spokesperson for Colony Ridge, said the company “found success offering a path to land ownership through flexible financing options with no credit checks.” His comments echoed the company’s argument in court that it created a path to homeownership for thousands of lower-income consumers whom risk-averse banks reject. Offering loans when others wouldn’t is the most common argument predatory lenders make to justify their practices, said Nathalie Martin, a University of New Mexico law professor who has studied high-cost loans. “You can see from this situation, it doesn’t help people to get them into loans that are more costly than they need to be,” Martin said. Former federal officials and Colony Ridge property owners acknowledge that the settlement includes some provisions to protect consumers in the future. It would require Colony Ridge to adopt stricter lending standards and allow buyers to back out of purchases without penalty within two months. The developer would also make $48 million in infrastructure upgrades and provide transparent, bilingual marketing and communication. Another provision bars Colony Ridge from developing new lots to sell for three years. But the agreement exempts 674 acres that the developer has already subdivided. The concessions are helpful but inadequate because they miss a clear opportunity to help victims recover money they lost, which is a key reason such cases are filed, said Jon Seward, who was principal deputy chief for the Justice Department when he left in May 2023 after 17 years in its Housing and Civil Enforcement Section. <img loading="lazy" decoding="async" js-autosizes style="object-position: 49% 39%;" height="1128" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="A woman with white hair, wearing a blue-checkered collared shirt over a white T-shirt, stares with a thin smile." class="wp-image-73729" srcset="https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 2000w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=200,300 200w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,1152 768w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=683,1024 683w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,1536 1024w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1365,2048 1365w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,1295 863w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,633 422w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,828 552w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,837 558w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,791 527w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,1128 752w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,1724 1149w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1067,1600 1067w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,600 400w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,1200 800w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,1800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/2026324_COLONY-RIDGE-DOJ-SETTLEMENT_LP_276_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,2400 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Maria Acevedo said Colony Ridge foreclosed on her property in 2021 even though she was making payments. Lexi Parra for ProPublica and The Texas Tribune One such victim was Maria Acevedo, who describes herself as a lifelong Republican and U.S. citizen who said she voted for Trump three times. A former land developer herself, Acevedo took out a high-interest $40,000 loan in 2018 to buy a half-acre of land where she planned to retire. She then spent an additional $60,000 on surveying, engineering and adding dirt to protect against flooding. Acevedo said she planned to refinance her loan but learned that she couldn’t because the property had a lien from a previous owner. Colony Ridge foreclosed on the property three years later, even though Acevedo said she was making payments. Colony Ridge did not comment on Acevedo’s case or those of other individuals in this story. The foreclosure ruined her retirement plans, Acevedo said, adding that the challenges strained her marriage and eventually led to divorce. She considered finding a lawyer to sue. But she said she decided to “become a team player” and serve as a government witness after federal investigators pledged to help victims like her recover what they lost. Now, Acevedo said, she feels betrayed by a settlement that ignores Hispanic consumers like her. “I know we were targeted. A blind man could see it,” Acevedo said. She added that the lawsuit was “going smooth, but once the Trump administration came in and took it over, it changed.” Even if she could now find a lawyer, her window to file a lawsuit has expired because state and federal laws require they be brought within five years. Since returning to office, the Trump administration has abandoned an $80 million settlement with Navy Federal Credit Union over illegal overdraft fees, which allowed the bank to continue operating without penalty, and halted dozens of investigations, including a case accusing a major Pennsylvania lender of defrauding student borrowers. Both defendants have denied wrongdoing. The Trump administration and White House budget director Russell Vought have taken aim at the CFPB, which was formed to protect consumers from getting ripped off by businesses. For Vought, the agency was an example of government overreach. It was also one of the first targets for Trump’s Department of Government Efficiency. In April, in response to a lawsuit by bureau employees over the CFPB’s attempt to lay off 90% of its staff, the administration offered a compromise proposal: slashing two-thirds. The White House and Vought’s office declined to comment, but the administration has argued the agency was needlessly aggressive and wasteful. The shift away from pursuing consumer protection cases gives the impression that the federal government is no longer serious about protecting regular people from unscrupulous businesses, former Justice Department and CFPB employees said. Investigators spent months gathering stories and building trust with residents who were wary of cooperating, said Johnathan Smith, a former deputy assistant attorney general for civil rights during the Biden administration, who visited the development before the lawsuit. The team worked to ensure that the community “believed something was going to be different because the Justice Department got involved.” “It’s just heartbreaking how the settlement failed to meet that mark,” he said. SuEllen Sanchez and her sister, Keilah Sanchez, were among those who shared their stories with investigators, expecting the government would help them reclaim what they lost. They also provided investigators with hundreds of records from neighbors who said they’d been scammed. A U.S. citizen born in Puerto Rico, SuEllen Sanchez had purchased five lots in Colony Ridge in 2020. She saw it as a way to invest money she’d earned as an aesthetician and perhaps open a business there. Sanchez said the advertisements and sales representatives for Colony Ridge led her to believe the lots would be ready to build on. They weren’t. Clearing the land for development, acquiring permits and connecting utilities cost her more than $10,000. Colony Ridge foreclosed on one of the lots in 2021, according to Sanchez, who disputes the developer’s claims that she had missed loan payments. Sanchez wondered if others also believed they’d been scammed. That’s when she and her sister, a web developer who also had purchased Colony Ridge properties, launched a website asking residents to share their experiences with the developer. Sanchez said she was dismayed that all of their efforts resulted in the proposed settlement. “These were consumer-based lawsuits, so you would think they’d actually do something for consumers with everything that they stipulated that this company did wrong,” Sanchez said. “There’s no way somebody who has all these violations should still be operating.” Acevedo feels the same way, and she wants the judge to know it as he mulls the settlement. She doesn’t have a lawyer, but after the Justice Department proposed it, she filed a legal brief in the case demanding compensation as a victim. She offered to testify and present evidence. “I want the court to hear me directly,” she wrote to Judge Alfred H. Bennett. “I am willing to swear to my experience.” On Friday, she plans to drive 30 miles to Courtroom 9A in the Houston federal building for the settlement hearing, hoping for the judge to grant her request to be heard. The post “A Slap in the Face”: Trump’s DOJ Plans to Settle Predatory Lending Case Without Compensating Victims appeared first on ProPublica.
They Needed Treatment for Drug Addiction. The Company They Turned to May Have Used Them to Commit Fraud.
The post They Needed Treatment for Drug Addiction. The Company They Turned to May Have Used Them to Commit Fraud. appeared first on ProPublica.
Renault Shirley remembers the first time he was asked to falsify billing reports for Kentucky’s largest drug rehab center. He had just returned from a church service in 2023 where the company’s founder and owner, a charismatic Christian from Eastern Kentucky, preached about the value of getting sober to hundreds of clients and staff at Addiction Recovery Care. Shirley, 58, who led recovery group discussions at ARC, said one of his supervisors told him to submit an invoice for the day’s canceled treatment sessions. With it, Shirley said, he was told to fabricate the details of a group discussion, including quotations from clients, as if they had attended a meeting. “It was fraud,” Shirley told the Lexington Herald-Leader and ProPublica, adding that he refused. But he said he saw others do it often when they gathered to enter their reports into the billing system. Shirley and ARC were part of a new economy, a boom fueled by misery and addiction and easy money from government officials desperate to curtail the opioid crisis that was devastating rural America. Kentucky’s payouts for drug treatment became so lucrative that companies bused in clients from other states to fill their treatment centers. ARC reigned above them all, providing more than two-thirds of all treatment beds in Kentucky at its peak in 2024. Between 2019 and 2024 ARC billed the state $1.7 billion, of which it was paid more than $377 million in state Medicaid money for addiction treatment services. During those years ARC won praise for its programs. The U.S. Department of Health and Human Services lauded ARC as a model, and Newsweek named the company one of the best addiction treatment providers in the country. Kentucky Gov. Andy Beshear called its founder “an essential partner in our fight against addiction.” But ARC’s growth was fueled in part by billing practices that federal prosecutors and former employees now allege may have amounted to fraud. FBI investigators were alerted to the case through a whistleblower suit filed in 2023, which alleged ARC fraudulently billed Medicaid for a therapeutic service called psychoeducation. The FBI has asked those who “believe you were victimized by ARC” to fill out a tip form. That investigation is ongoing, according to the FBI. ProPublica and the Herald-Leader interviewed six people affiliated with the company over the last six years, including former staff members, clients and some who came for treatment and were later hired on. They shared publicly for the first time how they came to ARC seeking help for addiction but became reluctant participants in the company’s alleged billing scheme. Two of them have said they made similar statements to federal investigators. Part of the fraud, three of them said, was committed at the explicit urging of supervisors who told them they were under pressure to meet billing targets set by ARC leaders — a circumstance exacerbated by a persistent lack of qualified staff, they said. Those who talked to the news organizations did not keep contemporaneous notes and do not have access to company emails that could support their claims because they no longer work for ARC. But their accounts are corroborated by other clients and referred to in two key documents. The first was a draft settlement agreement between ARC, the state of Kentucky and the Department of Justice filed by lawyers suing ARC in January as evidence in an unrelated civil suit. That suit, which is pending, alleges that ARC failed to repay at least $8 million it borrowed from two loan companies to pay the DOJ settlement. ARC denied it failed to pay the company. The draft DOJ settlement document alleges that ARC knowingly falsified some medical records from 2018 to the start of 2024 in order to collect $16 million for group meetings like Shirley described. It allegedly collected millions more by using low-level staff to bill the state for services that under the law must be delivered by a doctor or licensed therapist. The second document was a 2025 investigative report by the Kentucky Cabinet for Health and Family Services that has yet to be released but was obtained by ProPublica and the Herald-Leader. That report said state investigators found that ARC had violated so many regulatory standards, lack of staff chief among them, that the conditions posed “an immediate danger to client health, safety and welfare.” In response to questions for this story, ARC said it “voluntarily disclosed” billing errors to state and federal authorities after the company hired an outside agency to audit its billing practices. The draft settlement with the DOJ, the company said, was not supposed to be made public and therefore it could not comment. The draft settlement was unsigned. “ARC has never knowingly or fraudulently billed Medicaid for services, and there is no evidence that the organization encouraged employees to falsify group notes for billing purposes,” ARC’s Vice President of Marketing Vanessa Keeton wrote in a March 23 email in response to written questions about the company’s billing practices and employee allegations. She said that the company could not comment on staff, but that it “maintains a strict, zero-tolerance policy for fraud and non-compliant billing practices.” Keeton added that “any claims from clients or Peer Support Specialists about whether a specific service was billed are based on assumptions and do not accurately reflect actual billing practices.” Nearly all of the people interviewed for this story credit ARC with playing a key role in their sobriety. But most also said they felt betrayed by an organization that publicly touted a Christian message and a commitment to helping others while internally prioritizing money over the well-being of their clients and staff. Called by God In late 2008, ARC owner Tim Robinson was working as an assistant county attorney near Ashland when he had an epiphany. An evangelical Christian who’d recently gotten sober from alcoholism, Robinson has said God told him to start a “health care ministry” to help his neighbors in the mountains and hollows of Appalachia hit hard by the opioid crisis. There were few treatment centers in the state at the time. Robinson in 2010 opened the first ARC center in Louisa, a small town on the West Virginia border, 30 miles from his hometown in Martin County. ARC steadily grew across Eastern Kentucky. In 2015, the company was the state’s first drug treatment provider to accept Medicaid patients, which dramatically increased the number of available clients. The following year, ARC unveiled its yearlong “crisis-to-career” program, equal parts drug treatment and job training that ultimately helped clients become staff at ARC. But it was during the COVID-19 pandemic that ARC exploded in size, thanks in large part to changes to billing rules put in place by the governor. As the global health crisis unfolded, Robinson — a well-connected political donor who has given hundreds of thousands to people from both major parties, including Beshear, a Democrat — emailed the governor and said drug treatment centers needed help to stay afloat amid pandemic restrictions. In March 2020 Beshear signed an executive order that gave companies providing addiction services new latitude: The seven managed care organizations that controlled Medicaid billing in the state would need to allow providers to bill for an expanded menu of services without prior approval. Beshear said last month that order helped the commonwealth make significant and important progress in the fight against addiction. “Kentucky has lost far too many children of God to overdose related deaths,” he said, citing the recent decline in overdose deaths in the state. The decision meant companies could easily bill for what are known as peer support services, which are designed to help clients follow a treatment plan; these can be provided by staff who complete a 30-hour training course. ARC encouraged clients like Shirley to take the course and get credentialed as peer support specialists. Then, once they graduated from ARC’s program, many transitioned to staff and provided services they could bill to Medicaid. The order also allowed easier billing for psychoeducation, a session during which a clinician talks to a patient about their diagnosis and treatment. The broadly defined service, which at the time could be billed for multiple times a week, is usually provided as part of a clinical therapy session, but Kentucky allows it to be billed as a separate service — which state Medicaid experts opposed because it drives up the cost of treatment. From 2019 to 2024, ARC billed the state over $400 million for psychoeducation and peer support, earning the company more than $125 million, about a quarter of all reimbursements paid to Kentucky providers during that time. The revenue allowed it to open at least four new centers, including the roughly 700-bed Crown Recovery Center on a former college campus in Springfield, and to purchase a shuttered hospital campus in Ashland that ARC now uses for inpatient, outpatient and psychiatric services. ARC Billed Medicaid for Tens of Millions Annually in Psychoeducation and Peer Support Services in Recent Years <img loading="lazy" decoding="async" js-autosizes height="738" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?w=752" alt="A line graph showing the amount ARC billed for psychoeducation and peer support services between 2019 and 2024. Psychoeducation saw rapid growth, rising from under $9 million to over $85 million by 2024. Peer support services grew as well, from under $9 million to over $37 million." class="wp-image-73906" srcset="https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png 1110w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=300,294 300w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=768,753 768w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=1024,1005 1024w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=863,847 863w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=80,80 80w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=422,414 422w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=552,542 552w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=558,547 558w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=527,517 527w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=752,738 752w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=400,392 400w, https://www.propublica.org/wp-content/uploads/2026/04/kentucky-drug-rehab-chart.png?resize=800,785 800w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Source: Kentucky Cabinet for Health and Family Services Psychoeducation soon became ARC’s most lucrative service, accounting for almost half of its reimbursement from Medicaid in 2024. ARC said its billing for the service was in accordance with applicable laws and regulations and followed established billing protocols. The spike in billing caught the attention of the companies that oversee state Medicaid spending. Liz Stearman, director of behavioral health for Humana, and other Medicaid experts repeatedly warned Kentucky officials that the state’s high spending on lower-level peer support and psychoeducation without the attendant clinical services wasn’t helping people seeking addiction treatment. They said in a letter to the Kentucky Cabinet for Health and Family Services that evidence showed clients in the state had more emergency department visits and more admissions and readmissions to hospitals and residential drug treatment facilities. Stearman reminded lawmakers that Kentucky was one of the few states that allowed the service to be billed separately. Psychoeducation “does not have any national standards of clinical criteria that exist anywhere in the country, and the vast majority of states do not actually cover (it) as a standalone service,” she told a state legislative committee on Dec. 3, 2024. “Unfortunately we’re paying a higher amount of Medicaid dollars for less evidence-based services,” she said. Beshear’s 2020 order and permission from Kentucky Medicaid to bill psychoeducation as a separate service helped create a new revenue stream for providers. Still, on the surface the expansion of Robinson’s company was a good thing, giving Kentucky more treatment beds per capita than any other state — a fact Beshear and other elected officials touted. “I remember not too long ago when finding a treatment bed meant driving hours away or sitting on endless waiting lists. That’s all changed,” state Attorney General Russell Coleman said in a 2024 press conference. By that point, ARC was operating as many as 30 facilities in more than 20 Eastern and Central Kentucky counties. That year Robinson announced ARC would expand into Ohio and West Virginia. “It Was Just Herding Cattle” <img loading="lazy" decoding="async" js-autosizes height="766" width="1149" src="https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?w=1149" alt="An aerial view of cars driving through a town with one-story buildings. Tree lined hills surround the town." class="wp-image-74034" srcset="https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg 2000w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1024,682 1024w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1536,1024 1536w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/02_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1600,1066 1600w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /> ARC is headquartered in Louisa, Kentucky, a small town on the West Virginia border. Before widespread facility closures and layoffs in recent years, Louisa housed multiple ARC centers. Ryan C. Hermens/Lexington Herald-Leader During these years staff members said they were repeatedly asked to falsify bills for nonexistent treatment. ARC said it has since invested significant funds to hire a compliance and auditing team. The half dozen people who spoke to the Herald-Leader and ProPublica said the company sometimes billed when a gathering did not meet the requirements of a meeting, such as when clients watched movies unrelated to recovery or had informal discussions while traveling in ARC vans. Other times clients played board games in lieu of group meetings, or the gatherings simply didn’t happen but were billed for anyway, three former peer support specialists said. When Shirley was a client at Crown, ARC’s largest center, he said it was common for a peer support specialist to “sometimes walk in, ask me what I was grateful for. I would write it on a piece of paper, then they would leave.” Shirley said from talking with other staff members that this was a strategy often used to submit bills for group meetings that did not occur. Odell Hager arrived as a client at ARC in 2015, after a judge ordered him to do so for carrying drugs. He ping-ponged between treatment and jail for the next few years until he landed in 2021 at May Hill, one of ARC’s centers in Louisa. <img loading="lazy" decoding="async" js-autosizes height="766" width="1149" src="https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?w=1149" alt="A man with a beard and tattoos on his hands wearing a baseball cap and sweatshirt, sitting on a chair in a room decorated with small framed photos." class="wp-image-74036" srcset="https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg 2000w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1024,682 1024w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1536,1024 1536w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/20_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1600,1066 1600w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /> Odell Hager at his home in Lexington, Kentucky. He is a former client and peer support specialist at ARC. He said treatment groups frequently did not discuss recovery and instead watched popular movies. Ryan C. Hermens/Lexington Herald-Leader During his time there, first as a client and then as a peer support specialist, Hager saw examples of well-run peer support groups but said they were rare. “Our peer support group was, ‘All right, you all just sit in the living room and watch a movie,’” while group leaders sat in the office on their phones, he said. Hager, who worked at three ARC centers during the span of nearly a decade, said those kinds of groups that ARC billed for were the standard and forging group notes was common. Hager’s account was corroborated by an ARC client who overlapped with him. Hager said he also relayed his experience to the FBI in an interview. “In my mind, it was no different than a prison system,” Hager said. “It was just herding cattle: get them in, get them out, get them in, get them out.” Individual peer support is intended to be a check-in with a client: “How are you doing, are you having thoughts of relapse, are you feeling good right now?” Hager said. At the end of the check-in, a peer support specialist sent in quotes from the client to ARC’s billing department to prove the discussion took place so the company could then bill Medicaid for the service. “But we were doing that with people we wouldn’t even see because we were so behind,” Hager said. Hager said he doesn’t blame low-level peer support specialists for falsely logging group notes. Many peer support specialists, newly in recovery and overworked, were following orders from their supervisors or didn’t know any better, he said. Hager counts himself among them. “I’m not justifying it,” he said. “When we were doing it we didn’t know it was a bad thing.” Dustin Cornett, 34, was a client at Crown. After years of addiction, Cornett, who’s from South Eastern Kentucky, admitted himself in 2022 to ARC. He said he was disappointed when he attended peer support groups that largely consisted of watching popular movies. “We never did a damn thing,” he said. “We all knew it was just a money racket, an insurance scam.” Peer support staff said they were asked to meet billing “quotas” each week. Pressure to meet those expectations sometimes resulted in staff falsely recording group notes, said Hager and Beckie Rose-Bowman, who was initially a client at ARC and later director of Riverplace, a 120-bed ARC facility in Pikeville, which has since closed. “There were days I had peer support groups booked back-to-back in one- and two-hour increments with no space in between,” Rose-Bowman said. Billing was “100% their emphasis,” she said. ARC supervisors above her monitored peer support group attendance and would “come down” on staff if their attendance was short in the notes they submitted for billing, Rose-Bowman remembered. Other times, if a client was missing from a group, staff would count them as being present, she said. In addition to denying that ARC encouraged such fraud, Keeton, the company spokesperson, said it had processes in place to ensure appropriate billing. “When issues are identified, for example, a peer support group watching a movie rather than receiving prescribed services, corrective action is taken immediately, and those services are not billed,” she said. <img loading="lazy" decoding="async" js-autosizes height="766" width="1149" src="https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?w=1149" alt="A woman with windswept hair and glasses, wearing a black-and-white striped top, stands in front of a blurred building and looks away from the camera." class="wp-image-74037" srcset="https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg 2000w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1024,682 1024w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1536,1024 1536w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/11_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1600,1066 1600w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /> Beckie Rose-Bowman in downtown Louisa. She and other ARC peer support staff said they were asked to meet billing “quotas” each week. Ryan C. Hermens/Lexington Herald-Leader “I Don’t Have Enough Staff” As ARC expanded, its staffing shortage grew more dire. Lack of staff, including licensed clinicians, was one of several “systemic deficiencies” the Kentucky Cabinet for Health and Family Services found during the 2025 investigation of ARC’s operations. State officials conducted multiple site visits at three of ARC’s largest centers after a client died in July 2025 at Riverplace, where Shirley worked. The probe, which lasted from August to November 2025, was also partly triggered by separate allegations that clients “did not receive timely or appropriate care.” The report did not disclose the source of the allegations. Keeton said the company was “extremely saddened” by the client’s death and, following an internal review, concluded there was “no indication that the death resulted from any action or inaction on the part of ARC.” But those Kentucky investigators concluded that ARC operated with an “absence of qualified, licensed clinical personnel,” calling it a “sustained and systemic pattern.” In some instances, state investigators found clients were recording and reporting their own vital signs, a violation of state and clinical rules. That full report, obtained by the Herald-Leader and ProPublica, shows employees regularly complained to ARC supervisors and administrators with “persistent concerns” that a shortage of staff was putting clients’ health and safety at risk and hamstringing staff’s ability to properly run groups. ARC staff raised this issue to supervisors and state investigators, according to the report, saying “it feels like we are working around the clock” and “my life is about to become unmanageable because I don’t have enough staff.” Another employee, according to the findings, implied the shortage was so dire, “I am scared to take vacation.” To help deal with the shortages, the company began sending clients to its own college to get trained as counselors to work at ARC. Roughly 60% of ARC’s workforce is former clients, the company’s spokesperson said. ARC said it disputed the findings of the report to the state and requested a hearing. It noted that the Cabinet did not suspend or close the facilities and that the company “continues to operate and accept clients across all applicable levels of care with the knowledge and approval of the Cabinet.” The state said the report has not been released because the investigation was ongoing. People inside the company said that those newly trained staff were often used when ARC couldn’t provide regular visits with licensed clinical professionals. Shannon Gray, who started at ARC in 2021 and oversaw all treatment services there until early 2025, said clients rarely saw psychologists and counselors and did not receive enough treatment from more highly trained clinicians. Instead, ARC relied too much on peer-led sessions billed under peer support and psychoeducation, Gray said. “From a therapeutic value, (that’s) too many services, too many groups,” said Gray, who also wrote the curriculum that Shirley and others used when leading groups. “I argued it many times, but even though I voiced concern, I still stayed there, so I’ll call myself out on this.” <img loading="lazy" decoding="async" js-autosizes height="1128" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?w=752" alt="A bald man wearing dark jeans, a polo shirt and a necklace with a cross stands with his hands in his pockets. The background is a blurred road and buildings with vegetation." class="wp-image-74038" srcset="https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg 1333w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=200,300 200w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=768,1152 768w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=682,1024 682w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1024,1536 1024w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=863,1295 863w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=422,633 422w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=552,828 552w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=558,837 558w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=527,791 527w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=752,1128 752w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1149,1724 1149w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1066,1600 1066w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=400,600 400w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=800,1200 800w, https://www.propublica.org/wp-content/uploads/2026/04/23_-260113ARC_rh_maxWidth_3000_maxHeight_3000_ppi_72_quality_95_embedColorProfile_true.jpg?resize=1200,1800 1200w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Shannon Gray at his home in Lawrenceburg, Kentucky. Gray said he argued against ARC’s reliance on peer-led treatment. Ryan C. Hermens/Lexington Herald-Leader The state’s 2025 investigative report agreed with Gray, saying unlicensed employees at ARC were often asked to do jobs for which they were not qualified, such as medication oversight. This was “despite the lack of licensure, training and clinical competency required by state regulation,” the Cabinet found. The draft DOJ settlement alleges something similar: Between 2018 and March 2024, ARC “knew or recklessly disregarded” Medicaid rules by allowing unlicensed staff — “practitioners that did not have a professional credential” — to bill for behavioral health services that should’ve been provided by a therapist or professional counselor. Shirley, who had minimal training, said the company’s computer billing system only allowed him to bill peer support groups under the psychoeducation code, which yielded a higher reimbursement rate, even if a clinician wasn’t present with him when leading a group. “There was never a discussion about any other code to use,” said Shirley, adding that he didn’t know at the time how lucrative the psychoeducation code was. He only knew “everybody was using it.” Keeton disputed this allegation, saying that while ARC did receive millions from Medicaid for peer support and psychoeducation, “there was no directive requiring staff to bill exclusively under a single code.” Legislators Step In Today, Robinson’s grand vision has begun to unravel. In 2024, the seven managed care organizations in Kentucky raised alarms in a letter to the state’s health and welfare agency citing high costs and poor outcomes. That year Republicans in the Kentucky General Assembly acted, reducing the amount Medicaid would pay for psychoeducation and peer support, and ARC’s major source of income began to decline, state data shows. Republicans also reinstated the requirement that providers seek authorization from insurers before they provide services. In March of this year, a Kentucky lawmaker introduced a bill that outlawed billing for psychoeducational services in the state. The legislature delivered the bill to Beshear’s desk in late March. It is awaiting his decision. Kentucky Republican state Rep. Kim Moser, the bill’s sponsor, said the measure is urgent because billing for psychoeducation has grown exponentially. “We can look at the numbers and see that it’s being overused,” Moser said. “I just think we need to do something about it.” ARC continues to bill Medicaid and Medicare. But since the state’s cuts to Medicaid payments for certain services, and the launch of the FBI investigation in 2024, ARC has laid off hundreds of employees and shuttered dozens of facilities, leaving some clients homeless. Last year, ARC’s founder tried to sell off most of the company in part to pay the DOJ’s settlement, according to the creditors’ suit, but that deal fell through in December. When the two loan companies sued ARC in January 2026 for allegedly refusing to pay back millions they were owed, they claimed ARC was in “desperate financial straits” and facing “imminent bankruptcy.” ARC claimed in a separate filing it needed that money for operating costs and called the demands for repayment “unduly burdensome.” The company is still seeking a buyer. Even with the recent changes, lawmakers say Medicaid spending on drug treatment is still too high. In part this is because “there’s big money in making sure that addicts don’t actually enter into recovery,” Kentucky state Sen. Chris McDaniel, who co-chairs the legislature’s appropriations and revenue committee, said during a Feb. 24 hearing. “I’ve never met an industry that can so effectively obfuscate the results of their work as the substance use industry,” he said in the February hearing. “At some point, we have to ask ourselves, how much of Medicaid is about patients, and how much is about profits?” As for Shirley, he was laid off last year. He now works at a different residential recovery center in Western Kentucky — a move that he said opened his eyes to how poorly clients were treated at ARC and how little clinical care they received. “Their model is not to help clients,” he said of ARC. “For them, it’s a revolving door. It’s warehousing.” Keeton said this assessment isn’t reflective of ARC’s mission or the success of the thousands of individuals it serves. “We don’t ‘warehouse’ people,” she said. “We invest in them.” The post They Needed Treatment for Drug Addiction. The Company They Turned to May Have Used Them to Commit Fraud. appeared first on ProPublica.
For-Profit Hospital Chain Never Put Aside Money for Malpractice Insurance to Compensate Injured Patients
The post For-Profit Hospital Chain Never Put Aside Money for Malpractice Insurance to Compensate Injured Patients appeared first on ProPublica.
The collapse of Prospect Medical, a for-profit hospital chain plundered by private equity and the company’s management, has generated a painful litany of woes. Amid a debt-fueled acquisition spree that saw the small California company grow to 17 hospitals in six states, Prospect was repeatedly cited for dangerous medical care, poor infection control and unsanitary facilities. The company stiffed state and local governments on more than $135 million in taxes and didn’t pay vendors for equipment, services and supplies. It shuttered four safety-net hospitals in a Philadelphia suburb that it had promised to keep open, laying off thousands. Now, more than a year after the company filed for bankruptcy in January 2025, a new layer of harm has emerged: Prospect had promised to provide malpractice coverage for its hospitals and many of its doctors, but court filings show it set aside no money to pay those costs — or to compensate injured patients. As a result, hundreds of people with pending malpractice cases against the company may never have a shot at meaningful redress. One of them is Pamela Dorn. The lawsuit she filed against Prospect in 2024 has stalled, and it’s now doubtful she’ll ever be able to hold the company accountable for the negligent care she says it provided her husband. Bob Dorn, 75, suffered from such severe dementia that he couldn’t chew and was on a liquid diet. But when he became aggressive in March 2022 and was taken to Prospect’s emergency room in Waterbury, Connecticut, the medical staff sedated him, then left him unattended with a meal of macaroni and cheese and broccoli, according to Dorn’s lawsuit and an interview with her. Hospital staff later found her husband choking and struggling to breathe. He was intubated and taken to the intensive care unit but never regained consciousness. His death certificate said he died from asphyxia due to food blocking his airway. <img loading="lazy" decoding="async" js-autosizes height="702" width="527" src="https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?w=527" alt="A man and a woman embrace in a hug, standing in a sunlit kitchen. " class="wp-image-73853" srcset="https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg 1000w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=225,300 225w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=768,1024 768w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=863,1150 863w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=422,563 422w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=552,736 552w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=558,744 558w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=527,702 527w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=752,1002 752w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=400,533 400w, https://www.propublica.org/wp-content/uploads/2026/04/20260404_Prospect_Dorn.jpg?resize=800,1066 800w" sizes="auto, (max-width: 527px) 100vw, 527px" /> Bob and Pamela Dorn in their kitchen in Connecticut in 2021, a year before his death Courtesy Pamela Dorn “I didn’t want the same thing to happen to somebody else,” Dorn said, explaining why she filed the case. “How a hospital system operates without malpractice insurance is beyond me. It’s irresponsible.” (In court filings, attorneys for Prospect and the ER doctors have denied the negligence allegations.) Compounding the shock for plaintiffs like Dorn, as well as former Prospect doctors and their lawyers, is that Prospect wasn’t legally obligated to prove it could actually pay its malpractice costs. Like a growing number of health care companies, Prospect had saved money by “self-insuring” against these claims. Instead of paying premiums to a commercial insurer, the company pledged to pay directly for the legal defense of its facilities and doctors and to cover negotiated settlements or trial awards up to certain amounts — for many cases, up to $7.5 million. States typically require commercial insurers to file audited statements showing they’ve set aside sufficient funds for malpractice obligations and to contribute to a guaranty fund that pays a portion of claims if an insurer goes belly-up. But there’s little oversight — and no safety-net fund to tap — when companies self-insure. The problem has also surfaced in the bankruptcies of two other private-equity-backed health care companies, the Steward hospital chain and Genesis HealthCare, once the nation’s largest nursing home company. (Genesis agreed to at least 155 malpractice settlements totalling $58 million but filed for bankruptcy before paying most plaintiffs, KFF Health News reported. The company denied wrongdoing.) “It seems like a gaping hole,” said Connecticut Rep. Cristin McCarthy Vahey, who co-chairs the state legislature’s public health committee. She called Prospect’s lack of coverage “awful, devastating and infuriating. … What has happened with Prospect is like peeling an onion. The more we peel, the more we cry.” In emailed responses to questions from ProPublica, insurance regulators in Connecticut, Rhode Island and Pennsylvania said they are troubled by the harm caused by Prospect’s failure to fund malpractice coverage, a problem they hadn’t encountered before. All said they have limited authority to regulate companies that self-insure. In Connecticut, where Prospect owned three hospitals, a spokesperson for the insurance department wrote that state law allows health systems “to meet malpractice obligations through self-insured options” and the agency has no responsibility for “solvency oversight.” Prospect also owned insurance subsidiaries that provided some coverage for its hospitals. But they were headquartered in Vermont and offshore, in the Cayman Islands — which is legal but puts them beyond Pennsylvania’s reach, a spokesperson for the state’s insurance department said. Rhode Island requires hospital companies to receive formal approval to self-insure and to submit financial information annually to regulators, but a spokesperson for the state Department of Business Regulation acknowledged Prospect had filed no such documents since 2019, despite self-insuring until 2025 when it filed for bankruptcy. Agency records show the state has taken no action against the company. (Open investigations are confidential, and the spokesperson said he could not comment on whether one is underway.) Connecticut plaintiff attorney Mike D’Amico, who represents Dorn, has been handling malpractice cases for four decades. The Prospect situation is “a disaster” and “something I’ve never seen before,” he said. “You have a lot of people that have been harmed by negligent conduct that have no recourse.” Prospect, which ProPublica reported on in 2020, has become a case study on the public harms that can stem from private equity’s growing involvement in health care. In the decade after Leonard Green & Partners bought majority control of Prospect in 2010, the firm and the company’s founders, Sam Lee and David Topper, together extracted $658 million in fees and dividends for themselves and other investors, according to Securities and Exchange Commission filings and financial statements. This starved the business of money for staffing, maintenance and critical supplies while loading it up with debt. Unable to find an outside buyer for the now financially decimated company, Leonard Green finally sold its majority stake back to Lee and Topper in 2021. Prospect’s January 2025 bankruptcy filing came just four days after the release of a bipartisan U.S. Senate Budget Committee investigation into how private-equity ownership affects care. Titled “Profits Over Patients,” the report offered a harsh verdict on Prospect, saying its “primary focus was on financial goals rather than quality of care at their hospitals,” and that it had caused “the collapse of critical health care services in the communities it served.” Prospect, which has denied any misconduct or negligent care, has now sold or closed all of its hospitals. Leonard Green, which disputed the Senate report’s conclusions, declined to respond to questions from ProPublica. Lee, estimated to have personally received $128 million from the company, could not be reached for comment; an attorney who previously represented him did not respond to a call and email. Topper, who received $94 million from Prospect through a family trust, responded to questions posed by a reporter in a brief phone conversation with “no comment.” Prospect’s bankruptcy filing placed an automatic hold on more than 300 lawsuits filed against the company, seeking a total of more than $800 million in damages, according to bankruptcy court filings. Some of the malpractice cases awaiting resolution were near settlement or scheduled to go to trial when the hold began. Many alleged egregious harms, including wrongful deaths or debilitating injuries requiring costly care. The widower of a 39-year-old physician sued the company in state court in Hartford, Connecticut, in 2022, alleging his wife died from negligent care following an emergency cesarean section at the Prospect hospital where she worked. Parents of a 10-month-old boy filed suit in state court in Philadelphia in 2023, claiming he’d required multiple operations (and eventually removal of his esophagus) after ER doctors failed to conduct tests revealing that he’d swallowed a button battery. A 2019 Pennsylvania case claimed a man’s bowel was perforated during a hernia repair, triggering life-threatening complications that required five more surgeries. In court filings in each of these cases, Prospect, its hospitals and its doctors denied the allegations of malpractice, negligence or wrongful death. The insurance chaos began to surface in late October, after the Texas judge presiding over Prospect’s bankruptcy lifted the initial litigation hold. Her move followed failed efforts to persuade private insurers responsible for covering awards in excess of what Prospect’s self-insurance provided to kick in money for mediated settlements. The private insurers’ reasoning, according to bankruptcy court filings: their “reinsurance” contracts required them to pay only in cases where Prospect had already paid its entire share, similar to an auto insurance deductible. In Connecticut and Rhode Island, Prospect had promised to pay $7.5 million for each lawsuit before any outside coverage kicked in. In Pennsylvania, Prospect relied on another form of self-insurance: a Vermont-based insurance subsidiary. That business was supposed to pay the first $500,000 of Pennsylvania malpractice costs, but it appears Prospect underfunded the subsidiary. (By exactly how much remains unclear.) Complicating matters further: For Pennsylvania cases filed after October 2020, the subsidiary wasn’t required to contribute until after Prospect had covered the first $250,000. There are similar problems in California, where Prospect sold its six hospitals in the bankruptcy proceedings to a new for-profit company. Los Angeles attorney Judith Tishkoff, whose firm has represented Prospect for years, last week filed to withdraw from seven malpractice cases, saying Prospect’s general counsel has told her there is no insurance coverage and no money to pay any defense costs or legal fees. Even those who win court awards or settlements against Prospect seem destined to be treated as unsecured claims in the company’s bankruptcy. Like vendors with unpaid bills for hospital linens and bandages, they’re likely to receive just pennies on the dollar, bankruptcy lawyers told ProPublica. Some plaintiffs lawyers, who get paid on a contingency basis, say they’re declining to take on new malpractice cases involving Prospect, given the difficulty of obtaining any recovery. Pennsylvania attorney Leonard Sloane is among them. “It’s a gamble to take on a new case,” said Sloane. “To pursue one of these claims is very expensive. There’s gotta be something at the end, otherwise what’s the sense of pursuing on behalf of a client who gets nothing?” Sloane represents the survivors of a 67-year-old woman who died in 2022 after a Prospect surgeon performing a partial lung removal mistakenly cut a pulmonary vein, leading to a cascade of complications. The doctor acknowledged in medical records that he’d made “a technical mistake,” but the lawyer representing him and Prospect has moved to throw out claims for punitive damages, denying his actions met the legal standard of “recklessness.” Sloane, who has been practicing for 50 years, believes the family’s case is strong, “but if there’s no coverage, that’s the end.” Prospect promised the doctors it employed malpractice coverage, but those facing lawsuits have learned they may have to foot hundreds of thousands in legal costs personally, plus any settlements or court awards. Dr. John Horan, 69, is a family physician in Rhode Island who has been practicing medicine for 41 years. He sold his practice to Prospect in 2016 and worked for the company until 2022. That year, the family of a patient who died filed a lawsuit blaming him for failing to diagnose her lung cancer. Horan denies he’s at fault. In December 2025, Horan’s lawyer told him Prospect was refusing to defend him or pay any of his costs. “I was nauseous for the next month,” he told ProPublica. Horan and his wife have met with a bankruptcy lawyer. Paul Galamaga, Horan’s defense attorney, said he was handling 10 Prospect-related cases in Rhode Island when the company filed for bankruptcy. Prospect owes him about $183,000. He’s won court approval to withdraw from seven of the lawsuits but continues to represent Horan and two other physicians, who he says will now have to pay him personally. “There’s no money to pay me or defend any of the doctors,” Galamaga said. Some defense lawyers have sought to reimpose a freeze on proceedings, citing the uncertainty about Prospect’s ability to pay. In Pennsylvania, attorney Ben Post, whose firm is listed in court filings as defense counsel in 16 Prospect malpractice lawsuits, filed motions late last year seeking to clamp a stay on several malpractice cases. If he didn’t get it, he said, he’d have “no choice” but to withdraw. In response to one such filing, plaintiffs attorney Francis Curran wrote that his 83-year-old client had been seeking redress for her husband’s death for nine years. “With each additional delay,” he said, “it becomes less and less likely that Plaintiff will receive just compensation during her lifetime.” (Although one of Post’s stay requests has already been denied, a lawyer his firm has retained to help navigate the insurance uncertainty said Post has no immediate plans to withdraw from any cases.) In February, the Rhode Island legislature approved an $18 million emergency loan guarantee to assure the long-delayed sale of Prospect’s two struggling Providence-area hospitals, Our Lady of Fatima and Roger Williams Medical Center, to a Georgia-based nonprofit. Rep. Charlene Lima took to the floor to talk about the risk to local physicians left without promised malpractice coverage, warning that it could force them into bankruptcy and worsen the shortage of primary care doctors in Rhode Island. “The state shares culpability in this situation,” Lima said in an interview, adding that she’d support regulations to ensure this doesn’t happen again. “We weren’t looking at this or regulating this. It’s like nobody was watching the henhouse except the foxes maybe.” The harms of porous insurance oversight have also surfaced in the bankruptcy of Steward Health Care, an even larger hospital chain bankrolled by private equity. Backed by giant Cerberus Capital Management in 2010, Steward grew to 37 hospitals over a decade. In 2021, Cerberus exited the investment with a reported $800 million in profits, while Steward CEO Ralph de la Torre, a former heart surgeon who reaped more than $250 million from the company, bought himself a $40 million yacht. Three years later, Steward filed for bankruptcy, owing hundreds of millions to vendors and employees and facing accusations of fraud and abysmal patient care. (Cerberus declined to respond to questions from ProPublica, instead pointing to a public statement in which it said Steward’s problems “appear to be overwhelmingly related to the post-Cerberus ownership period.” A spokesperson for de la Torre, who led the ownership group until he resigned in late 2024, said he “firmly disputes” the allegations against him, “including claims of greed and bad-faith misconduct,” and intends to “vigorously defend himself against them.”) To cover its malpractice costs, Steward operated a self-insurance subsidiary, called TRACO, which it had relocated to Panama, where it faced little regulatory oversight. According to a Boston Globe investigation, instead of setting aside adequate reserves, Steward treated TRACO like “a piggy bank,” siphoning out hundreds of millions to pay operating costs and buy more hospitals. By 2024, when Steward went bankrupt, TRACO had just $3.5 million left to defend and pay for more than 500 malpractice lawsuits, according to documents cited by the Globe. Last year, a malpractice case brought against a Steward hospital outside Salt Lake City went before a Utah state judge. It involved allegations that a 19-year-old pregnant woman’s delivery was botched by inexperienced, ill-trained nurses. According to medical records and court testimony, they gave her overdoses of the labor-inducing drug Pitocin, starving her baby of blood and oxygen, then ignored fetal monitoring that signaled distress while an on-call doctor dozed in a room nearby. The baby suffered brain damage that has left her largely unable to speak. She is likely to remain disabled for life. Steward’s defense lawyers had withdrawn after the company stopped paying and communicating with them, leaving the family and its expert witnesses to present their case. In an emotional 42-minute discourse from the bench, Judge Patrick Corum said what had happened “literally took my breath away.” The family “would have been better off delivering this baby in the bathroom of a gas station, or in a hut somewhere in Africa, than in this hospital,” he declared. In October, he awarded the family $543.2 million in damages, one of the biggest malpractice awards in Utah’s history. The injured child is now 6 and requires costly care. But because TRACO has no money — and Steward’s “excess” insurers are refusing to step in because TRACO hasn’t paid its share — it’s unclear when, or whether, the family will get anything. David Creasy, the family’s attorney, said the battle to resolve the matter could take years. “We’ve got to be able to find some way to get them the money they need to take care of her,” he said in an interview. “There was absolutely no oversight of TRACO.” The Steward and Prospect bankruptcies make clear “this is a national issue,” said Stacy Paterno, CEO of the Rhode Island Medical Society. Paterno said she has begun convening regular meetings with her counterparts from a half-dozen states where Prospect and Steward operated hospitals about the risks posed by unregulated self-insurance plans, both to doctors and injured patients. Steward’s creditors are trying to claw back money from the company’s former leaders. In November, a Steward creditors committee filed a 178-page lawsuit against former CEO de la Torre and more than a dozen other individuals and corporate entities that details the company’s alleged plundering of TRACO’s insurance reserves. The complaint does not name Cerberus as a defendant but suggests Cerberus may be a future target of the creditors’ “ongoing” investigation. (In court filings, de la Torre and other Steward defendants have denied the creditor lawsuit’s allegations.) Prospect’s creditors are poised to launch a similar effort. The bankruptcy court has approved $10 million to pursue legal claims against former Prospect principals, with Leonard Green and Prospect’s former top executives, Lee and Topper, as the big targets. “We really do believe there are potentially hundreds of millions” that can be recouped from those who “may have contributed to the downfall of this company,” Charles Persons, an attorney for the unsecured creditors committee, told the judge at a Dec. 12 court hearing. It’s unclear how much might be recovered, but it would likely be a fraction of what the company owes, and malpractice victims would share these funds with thousands of other unsecured creditors. “The folks who have the lawsuits,” said D’Amico, the lawyer representing Dorn, “essentially go to the bottom of the barrel.” The post For-Profit Hospital Chain Never Put Aside Money for Malpractice Insurance to Compensate Injured Patients appeared first on ProPublica.
“The Alarm Bell”: Arizona’s Drop in SNAP Participation Signals Potential Nationwide Impact of Trump Legislation
The post “The Alarm Bell”: Arizona’s Drop in SNAP Participation Signals Potential Nationwide Impact of Trump Legislation appeared first on ProPublica.
More than 400,000 Arizonans have lost their SNAP benefits since July — the largest decline in the nation by a wide margin — as an underfunded state agency administered changes called for in President Donald Trump’s so-called One Big Beautiful Bill Act. The drop represents nearly 47% of the state’s participants in the program better known as food stamps and includes about 180,000 children, according to the Arizona Department of Economic Security, which administers the program. On Wednesday, the nonpartisan Center on Budget and Policy Priorities released data through February showing that the reduction in Arizona has far outstripped other states. After Arizona, the largest loss of participants was in Florida, where less than 16% of recipients lost benefits since July, according to the center’s analysis. Arizona officials attribute the plunging caseload to swift implementation of policy changes forced by the bill, including new work requirements. But interviews suggest that Arizona’s efforts to comply, combined with cuts to the agency that runs the Supplemental Nutrition Assistance Program, have contributed to the decline — making it more difficult to apply and causing people who are eligible to be denied. The state’s drop has exceeded previous projections. “Arizona is just the alarm bell,” said Joseph Palomino, executive director of the Arizona Center for Economic Progress, a nonpartisan advocacy organization. “This is likely going to happen in every state.” The bill, which places a larger share of the program’s costs onto states, expanded work requirements for some recipients and eliminated work exemptions for others, such as people who are homeless or aging out of foster care. In addition, the bill mandates that states reduce their payment error rates — which measure the accuracy of eligibility and payment determinations — or face millions in penalties. Although some changes don’t fully take effect until the fall, experts say Arizona’s experience suggests people are already going hungry as a result of the legislation’s changes. Charisma Garcia, a 25-year-old mother of two, has tried for months to obtain an interview to complete a SNAP application. After weeks calling the agency only to get a recorded message, she woke before sunrise recently to wait in line at an Arizona Department of Economic Security office in south Phoenix. A security guard told her the agency wasn’t doing in-person interviews, so she headed to a food bank instead. She needed to feed her children, ages 3 and 6. “I need to do the thing that gets me the food,” she said. Brett Bezio, a spokesperson for DES, said the agency is focusing on reducing the state’s error rate to ensure “the program remains a stable resource for vulnerable Arizonans.” Although Arizona’s rate of 8.8% is below the national average, the new federal regulations require that it be brought down to 6%. If officials don’t reduce the rate, Arizona could face penalties of $195.4 million in two years, which is more than double the amount it pays to operate the program. The department said it expects participation to stabilize in the months ahead. The choices Arizona is making are “a reality that every state is facing,” said Katie Bergh, a senior policy analyst with the Center on Budget and Policy Priorities. Congress created a “terrible incentive” by requiring states to reduce their error rate and shoulder more of the program’s costs, she said. Nationwide, SNAP enrollment plummeted 8% from December 2024 to December 2025, according to estimates from the U.S. Department of Agriculture, which runs SNAP. Trump has touted it as a success. “We lifted 3.3 million Americans off of food stamps,” he said, referencing figures since he took office. “That’s a record.” Arizona Saw the Biggest Drop in SNAP Participation of All States Since Congress Passed Megabill The state showed monthly drops after the bill became law on July 4. <img loading="lazy" decoding="async" js-autosizes height="755" width="1149" src="https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?w=1149" alt="A chart showing percentage changes in SNAP program participation for all 50 states from July to December 2025. After July 4, when the so-called One Big Beautiful Bill Act became law, participation in some states began to fall. Arizona declined 32%, the most of any state, by December." class="wp-image-74017" srcset="https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png 2300w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=300,197 300w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=768,505 768w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=1024,673 1024w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=1536,1010 1536w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=2048,1346 2048w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=863,567 863w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=422,277 422w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=552,363 552w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=558,367 558w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=527,346 527w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=752,494 752w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=1149,755 1149w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=2000,1315 2000w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=400,263 400w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=800,526 800w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=1200,789 1200w, https://www.propublica.org/wp-content/uploads/2026/04/snap-changes-fallback_bedcd4.png?resize=1600,1052 1600w" sizes="auto, (max-width: 1149px) 100vw, 1149px" /> Note: U.S. territories not shown. Program data for North Dakota in October 2025 was excluded from the Center on Budget and Policy Priorities’ analysis and also is not shown. Sources: CBPP analysis of U.S. Department of Agriculture and state SNAP programs data. Chris Alcantara/ProPublica Asked about the sharp decline in SNAP participants, Gov. Katie Hobbs’ press secretary, Liliana Soto, blamed Trump administration policies, which have “increased bureaucracy and red tape on states across the country, and forced DES to take difficult but necessary steps to reduce the state’s payment error rate.” Hobbs’ administration is taking these steps “to avoid staggering fines of hundreds of millions of dollars that would further endanger food assistance for vulnerable Arizonans,” Soto said in a statement. But other factors have aggravated Arizona’s situation. In 2021, the state Legislature and then-Gov. Doug Ducey, a Republican, passed a flat 2.5% income tax largely benefiting the wealthy, which has forced more than $1 billion in spending cuts and fund swaps to balance the state budget in subsequent years. (Ducey has defended the flat tax as necessary to ensure the state continues to be competitive and “a jobs magnet and generator of opportunity.”) Last summer, DES also laid off about 500 employees in response to the elimination of federal grants and in anticipation of additional federal cuts. Officials said that about 160 eligibility specialists lost their jobs, a 40% decline since July 2024. In December, Hobbs, a Democrat, allocated $7.5 million to DES, most of which was used to hire more than 100 workers and increase overtime to handle SNAP cases. A spokesperson said applications are also slowed by “1980s technology” it uses to administer benefits. Hobbs asked for an additional $48.4 million in her 2027 budget proposal to help the department administer SNAP. The most recent federal data, from 2023, shows that the state spends $70 million to operate the $2 billion program. Meanwhile, some seeking SNAP assistance told ProPublica that their applications remain in limbo, sometimes for months. Garcia, the mother of two, said she will keep trying to obtain the benefits. She’s looking for work as a cook after being laid off from a car wash in January. Her family is living with her grandparents, where groceries are shared among six people. Sometimes, her 3-year-old pats his belly when he’s hungry for his favorite fruits like strawberries. At times, she hasn’t received fruit in the boxes she receives from the food bank. “I’m in a pinch,” she said. “I’m struggling. The post “The Alarm Bell”: Arizona’s Drop in SNAP Participation Signals Potential Nationwide Impact of Trump Legislation appeared first on ProPublica.
“Economic Civil War”: States Push Laws to Shield Oil and Gas Companies From Accountability
The post “Economic Civil War”: States Push Laws to Shield Oil and Gas Companies From Accountability appeared first on ProPublica.
Across the country, Republican-led state legislatures are passing a slate of laws that effectively shield oil and gas companies from legal claims that they are responsible for the destruction and mounting toll caused by climate change. Fifteen laws have either been passed or are currently being debated in 11 states. Together, they threaten to remove long-standing tools for the public to hold corporations accountable. A ProPublica investigation has found that most of these bills are part of a coordinated effort, orchestrated by a constellation of groups that share staff or have funding ties to the prominent conservative activist Leonard Leo, who is credited with placing conservative justices on the U.S. Supreme Court. These groups have drafted state legislation, planned its dissemination and engaged a well-connected lobbying firm to get them signed into law. The effort is unfolding as courts are weighing more than 30 significant lawsuits by states, counties and municipalities accusing fossil fuel companies of misrepresenting the risks their products posed to consumers and seeking to recoup the costs of disasters and other climate impacts like wildfire losses or coastal flooding that their products helped cause. A goal of the legislation is to block these cases from going forward and prevent new ones from being filed. The strategy to establish state laws that will make it all but impossible to sue oil and gas companies was laid out in detail by a group of lobbyists and political operatives in December, during a panel presentation at the annual States and Nation Policy Summit of the American Legislative Exchange Council — the influential organization that brings together state lawmakers, corporate leaders and conservative activists to draft and promote legislation. During the session, one of the panelists, Will Hild, the executive director of a nonprofit called Consumers’ Research, described the climate cases as a liberal effort to use the judicial system to exact a new tax on energy companies in the form of civil judgments. Another panelist, Oramel H. Skinner, the former solicitor general for Arizona and the executive director of the nonprofit Alliance for Consumers, warned that those judgments will trickle down to make citizens’ lives less affordable and ultimately make many of their choices — whether to own pickup trucks or purchase a side of beef — illegal. ProPublica reviewed an audio recording of the event obtained by the nonpartisan watchdog group Documented. Hild and Skinner had come to the session with a ready-made fix: a set of pre-written bills and plenty of funding. <img loading="lazy" decoding="async" js-autosizes height="501" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?w=752" alt="A man in a suit stands behind a glass pane. He is looking directly at the camera with his hands in his pockets." class="wp-image-73667" srcset="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=1024,683 1024w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=1536,1024 1536w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=2048,1365 2048w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=2000,1333 2000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-1258507244_maxHeight_3000_maxWidth_3000.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Will Hild, the executive director of the nonprofit Consumers’ Research Bloomberg/Getty Images Consumers’ Research and the Alliance for Consumers are both funded by organizations connected to Leo. ProPublica examined lobbying records across 25 states, federal tax disclosures for more than a dozen organizations and notes from other closed-door strategy sessions among ALEC members and found that several Leo-supported groups are part of a national strategy to give legal immunity to companies for their climate emissions. Since 2021, Leo has been deploying a $1.6 billion gift through a series of nonprofits and other organizations that obscure the source and the recipients of donations — so-called dark money groups. Much of that money has been routed through a nonprofit judicial advocacy group Leo founded — now called The 85 Fund — which both receives and disseminates Leo’s funding. Many of these nonprofits are increasingly focused on issues related to climate change. The panel session’s moderator, Michael Thompson, is a senior vice president at CRC Advisors, Leo’s for-profit Virginia-based political and corporate consulting firm. He also sits on ALEC’s Private Enterprise Advisory Council. Hild’s organization, Consumers’ Research, received more than 65% of its funding in 2024 through a dark money group called Donors Trust. The 85 Fund contributed more than $67 million to Donors Trust in 2024. Consumers’ Research also works closely with — and contracted more than $670,000 of work in 2024 to — CRC Advisors. Another panelist, Paul N. Watkins, was a legal fellow at Consumers’ Research. According to tax filings, his law firm received more than $2.2 million in 2024 from the group. As recently as 2024, Skinner was also counsel for Leo’s 85 Fund, according to the nonprofit’s tax filings. “For decades, the left has leveraged immense resources to capture the institutions that shape our society — the legal system, universities, medical and scientific bodies, the entertainment industry, and our biggest corporations,” Leo wrote to ProPublica in a text message. “That takeover resulted in a radically woke culture that does not reflect the will of the American people, or the pillars of limited constitutional government that made our country great. That is why our enterprise supports organizations that are committed to crushing liberal dominance and restoring balance in the institutions that shape society.” At the ALEC session, Skinner presented a model bill that would effectively bar cities and towns from bringing public nuisance lawsuits against corporations and others when the issue is a broad public harm like climate change. In several cases, plaintiffs have argued that the impacts of climate change — the buckling of a road from extreme swings in temperature, for example — are a “nuisance” caused by fossil fuel companies. Nuisance claims are common in the American legal system, giving individuals, companies or communities a way to sue when someone else’s actions damage their property, degrade the health or safety of the environment around them or interfere with their rights. Under these laws, parties can ask for financial compensation or seek court orders to remedy problems, such as pollution. Skinner, however, argues that nuisance laws should only be used to address local, easily fixable problems, like excessive noise from a bar. His bill would curtail the use of public nuisance suits in climate cases by limiting liability for manufacturers and other businesses and giving state attorneys general the sole authority to bring them. “Think really hard about every lever you have in your states to shut off the ability for this woke lawfare machine to churn,” Skinner told the audience. “The left’s goal is to reshape society around you using the courtroom.” The second draft law, called the Energy Freedom Act, was produced by the policy nonprofit associated with Hild’s organization. It would, among many provisions, shield businesses from liability related to emissions of greenhouse gases if those releases did not violate the federal Clean Air Act. Critics of the bills say they subvert the rights of local communities. They send the message that “you can pollute with impunity,” said Carly Phillips, a senior scientist with the Union of Concerned Scientists. “It’s really a thumb in the eye of places that are affected by climate change.” The push to block climate suits across the states comes as several of the cases against the oil industry approach, or have already entered, the perilous legal phases of discovery, when plaintiffs will have the opportunity to seek confidential industry documents and depose oil executives. The stakes for oil companies are enormous. By some estimates more than $10 trillion in damages can be attributed to U.S. emissions. There’s a reason why state and local governments have increasingly brought these suits. The frequency and cost of climate-influenced disasters, including severe storms, drought and flooding, continues to mount — between $350 billion and $450 billion in each of the last three years — stretching government budgets. Significantly, the science that makes it possible to attribute how much any one disaster was influenced by climate change has steadily advanced. To cite one example, the March heat waves across the U.S. would have been virtually impossible without the emissions that have caused climate change, according to the European science group World Weather Attribution, and were about four times as likely to happen as they were a decade ago. Boulder, Colorado, is among the places facing increasing droughts, more extreme precipitation and larger wildfires — all of which are significantly propelled by climate change linked to the emissions from the use of fossil fuels. The state has estimated the costs of these perils will run into the many hundreds of millions of dollars. In 2018, Boulder County sued Exxon Mobil and the Canadian oil company Suncor Energy, accusing the companies of “intentional, reckless and negligent conduct.” Among its claims, the county alleged the oil companies engaged in a conspiracy to mislead the public and violated consumer protection rules by mischaracterizing the dangers of their products. They accused the oil companies of creating a public nuisance by altering the environment and leaving the county to pay to abate growing hazards such as the flooding that tests roads and bridges. Exxon Mobil and Suncor Energy have never filed a response in Colorado but asked for the case to be dismissed. Ever since, the lawsuit has been mired in a dispute over whether Colorado courts were the correct venue, with the state Supreme Court ultimately ruling last May that they were. Suncor filed to the U.S. Supreme Court to reconsider, and this fall it will weigh the company’s petition asking whether federal environmental law preempts the state law. The high-profile national court case is just one facet in an increasingly tense fight over liability for the fossil fuel industry. In January, the American Petroleum Institute, the largest fossil fuel industry group in the United States, said fighting the climate liability lawsuits was one of its top priorities in 2026. Lobbying records for the group from last year show that it advocated for legislation to protect oil producers from climate lawsuits at the state level. The Trump administration; other industry groups, including the Chamber of Commerce; and several of the nonprofit advocacy groups associated with Leo have argued that state courts are the wrong venue for claims that ultimately concern emissions that drift widely across borders, and they wish to see other cases moved or dismissed. They say that because the federal government already has the authority to regulate those emissions, the federal courts, not the states, should hear the claims. In an interview, Hild told ProPublica that he sees the suits as an illegitimate effort to enact policy through the courts and to “regulate the entire U.S. economy from a single state.” In an email, Skinner wrote: “Our effort is not one focused on climate change. But it is true that left-wing activists and their dark money donors have put vast sums of money and years of groundwork into pushing a coast-to-coast campaign of climate-focused public nuisance lawsuits.” Neither Watkins nor Thompson responded to requests for comment. <img loading="lazy" decoding="async" js-autosizes height="1128" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?w=752" alt="A man in a suit and tie stands behind a lectern with large leather armchairs and wood paneling behind him. He is speaking into a microphone." class="wp-image-73668" srcset="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg 2000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=200,300 200w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=768,1152 768w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=683,1024 683w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1024,1536 1024w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1365,2048 1365w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=863,1295 863w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=422,633 422w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=552,828 552w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=558,837 558w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=527,791 527w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=752,1128 752w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1149,1724 1149w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1067,1600 1067w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=400,600 400w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=800,1200 800w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1200,1800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2204620197_maxHeight_3000_maxWidth_3000.jpg?resize=1600,2400 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Prominent conservative activist Leonard Leo Nordin Catic/Getty Images When Skinner and Hild finished their presentation at ALEC they made a QR code available to download the language of the model bills and directed the audience to a woman named Catherine Gunsalus, who was in the back of the room. She would be able to answer any questions, they said. Gunsalus until recently worked for the Heritage Action Fund, the political and lobbying arm of the Heritage Foundation, the Trump-aligned think tank that is most recently known for promoting the Project 2025 agenda. Records show that Gunsalus has also lobbied in collaboration with another Leo-affiliated group, Americans for Public Trust. In April 2025, she formed a lobbying firm called Varidon Strategies and began registering in states almost immediately afterward, according to records. By mid-summer, Varidon was representing Alliance for Consumers Action Fund; Consumers’ Research; The Honest Election Project, an affiliate of The 85 Fund; as well as other Leo entities in 25 states. In the majority of those filings, Varidon used an email address at the domain of Holtzman Vogel, a Virginia-based law firm that is often retained by Leo’s organizations. Gunsalus did not reply to a detailed list of questions. In the four months since the ALEC summit, there has been substantial activity in the states where Varidon has registered. On Jan. 5, representatives in Missouri introduced the loosely related Eliminate Criminal Profiteering Act, which could stop revenues flowing to law firms from settlements in the sort of nuisance suits often used in climate cases. Two days later, legislators took up the Public Nuisance Reform Act, which proposes narrowing the definition of what could be considered a nuisance. That same month, similar bills were introduced in Indiana, Oklahoma and Tennessee. In February, eight more followed in Oklahoma, Iowa, South Carolina, Utah, Louisiana and Kansas. Skinner, who is registered to lobby in Kansas, was invited to testify in a hearing about that state’s bill and launched a new “End the Lawfare” website targeting the “left-wing” agenda. As of April 2, versions of the model legislation offered at the ALEC meeting have been introduced across 11 states altogether. In Utah, the governor has signed two related bills into law, and in Tennessee and Indiana, bills are awaiting their governors’ signature. The more states there are with some sort of waiver in place, the narrower the pathway for cities and states to seek redress as environmental conditions worsen, and the costs continue to rise. Hild and Skinner and the Leo network’s bills also serve another purpose: teeing up a conflict that pits states against one another, a conflict that only the Supreme Court or Congress can finally resolve. As Hild put it at the ALEC gathering, “This is economic civil war.” The post “Economic Civil War”: States Push Laws to Shield Oil and Gas Companies From Accountability appeared first on ProPublica.
The Federal Government Is Rushing Toward AI. Our Reporting Offers Three Cautionary Tales.
The post The Federal Government Is Rushing Toward AI. Our Reporting Offers Three Cautionary Tales. appeared first on ProPublica.
As a cybersecurity reporter at ProPublica, much of my work over the past two years has focused on how the federal government and its IT contractors, like Microsoft, have navigated major technological transitions. The one now in the news every day is artificial intelligence. This emerging technology has its grip on everyone: Home users, corporations and the federal government are all rushing to use it. President Donald Trump and his Cabinet say AI will transform the nation, making us more prosperous, efficient and secure — if only we can adopt it fast enough. But this messaging isn’t new. President Barack Obama’s administration used nearly identical language a decade and a half ago as the U.S. barreled into the technological revolution of cloud computing. I’ve studied how the federal government has handled — and mishandled — this transition over the past two decades, and my reporting offers some cautionary tales and valuable lessons as policymakers encourage the use of AI and federal agencies adopt the technology. Lesson 1: There’s no such thing as a free lunch Then: In the early 2020s, a series of cyberattacks linked to Russia, China and Iran left the federal government reeling. The Biden administration called on major tech companies to help the U.S. bolster its defenses. In response, Microsoft CEO Satya Nadella pledged to give the government $150 million in technical services to help upgrade its digital security. It also offered a “free” security upgrade for government customers. Now: Last year, the Trump administration announced a raft of agreements with tech companies that were meant to help federal agencies “purchase enterprise AI tools at government-friendly pricing.” Agencies could use OpenAI’s ChatGPT for $1. Google’s Gemini for 47 cents. Grok by xAI for 42 cents. The administration hoped that the low-cost pricing would make it “easier for federal teams to acquire powerful AI capabilities … to enhance mission delivery and operational efficiency.” The takeaway: Be wary of freebies. Our investigation into Microsoft’s seemingly straightforward commitment revealed a more complex, profit-driven agenda. After installing the upgrades, federal customers would be effectively locked in, because shifting to a competitor after the free trial would be cumbersome and costly. At that point, the customer would have little choice but to pay for the higher subscription fees. The plan worked: One former Microsoft salesperson told me “it was successful beyond what any of us could have imagined.” In response to questions about the commitment, Microsoft has said its “sole goal during this period was to support an urgent request by the Administration to enhance the security posture of federal agencies who were continuously being targeted by sophisticated nation-state threat actors.” Agencies looking to buy AI tools at discounted rates today must consider how the costs might balloon down the road. The General Services Administration warns that AI “usage costs can grow quickly without proper monitoring and management controls” and advises agencies to “set usage limits and regularly review consumption reports.” Lesson 2: Oversight programs are only as effective as their resources Then: In the Obama era, the federal government shifted its sensitive information and computing needs to data centers owned and operated by private companies. Acknowledging the potential risks, the administration created the Federal Risk and Authorization Management Program, or FedRAMP, in 2011 to help ensure the security of the cloud computing services that it was encouraging U.S. agencies to use. But in my recent investigation of the program, I found it was no match for Microsoft, which effectively wore down the FedRAMP team over five years as the company sought the program’s seal of approval for a major cloud offering known as GCC High. Despite serious reservations about its cybersecurity, FedRAMP ultimately authorized the product, in part because it lacked the resources to keep going. In response to questions, Microsoft told me: “We stand by our products and the comprehensive steps we’ve taken to ensure all FedRAMP-authorized products meet the security and compliance requirements necessary.” Now: Today, this tiny outpost within the General Services Administration has even fewer resources to oversee the cloud technology on which the government relies — including AI. FedRAMP says it now operates “with an absolute minimum of support staff” and “limited customer service.” The program was an early target of the Trump administration’s Department of Government Efficiency. The takeaway: FedRAMP, which a 2024 White House memo said “must be an expert program that can analyze and validate the security claims” of cloud providers, is now little more than a rubber stamp for the tech industry, former employees told me. As federal agencies adopt AI tools that draw upon reams of sensitive information, the implications of this downsizing for federal cybersecurity are far-reaching. A GSA spokesperson defended the program and said FedRAMP now “operates with strengthened oversight and accountability mechanisms.” Lesson 3: “Independent” reviews are only so independent Then: The government has long relied on so-called third-party assessors to verify the security claims made by cloud service providers like Microsoft and Google. In theory, these firms are supposed to be independent experts that offer a recommendation to FedRAMP on whether a product meets federal standards. But in practice, their independence has an asterisk: They are paid by the companies they are evaluating. My recent investigation found that this setup creates an inherent conflict of interest. In the case of Microsoft’s GCC High, two assessors recommended the product despite being unable to fully vet it, according to a former FedRAMP reviewer. One of those firms did not respond to my questions and the other denied this account. Read More Federal Cyber Experts Thought Microsoft’s Cloud Was “a Pile of Shit.” They Approved It Anyway. FedRAMP, we found, is well aware of how the financial arrangement between the cloud companies and their assessors can distort official findings about cybersecurity problems. The program even created a “back channel” to encourage assessors to share concerns they might not otherwise raise in their official reports for fear of angering their tech clients and losing business. Now: With FedRAMP reduced to being a “paper pusher,” as one former GSA official put it, these third-party assessment firms have taken on even more importance in the vetting process. In response to questions from ProPublica, the GSA said that FedRAMP’s system “does not create an inherent conflict of interest for professional auditors who meet ethical and contractual performance expectations.” It did not respond to questions about the program’s back channel. The takeaway: The pendulum has essentially swung back to the pre-FedRAMP era, when each federal agency was individually responsible for vetting the products it used. The GSA told me that FedRAMP’s job is “to ensure agencies have sufficient information to make these risk decisions.” The problem is that agencies often lack the staff and resources to do thorough reviews, which means the whole system is leaning on the claims of the cloud companies and the assessments of the third-party firms they pay to evaluate them. The post The Federal Government Is Rushing Toward AI. Our Reporting Offers Three Cautionary Tales. appeared first on ProPublica.
RFK Jr. May Reverse a Peptide Ban He Calls “Illegal.” Former FDA Officials Say He Mischaracterized Their Work.
The post RFK Jr. May Reverse a Peptide Ban He Calls “Illegal.” Former FDA Officials Say He Mischaracterized Their Work. appeared first on ProPublica.
Just under three years ago, the Food and Drug Administration deemed 19 peptide drugs too unsafe to be dispensed by compounding pharmacies, which mix components of approved drugs to create bespoke medication for people who have trouble taking commonly available products. Now, under Health and Human Services Secretary Robert F. Kennedy Jr., the agency is poised to reverse itself. That’s despite few clinical studies supporting the effectiveness or safety of these peptides, which are amino acid chains meant to help regulate functions in the body and have become popular among fitness and longevity enthusiasts. In February, Kennedy said the FDA acted illegally in 2023 when it categorized 19 peptides as too unsafe for compounders, whose final products aren’t tested or approved by the FDA. Kennedy, who described himself as a “big fan” of peptides, has used the therapies himself. “It was illegal because they’re not supposed to do that unless there’s a safety signal,” Kennedy said on “The Joe Rogan Experience” podcast, referring to adverse events related to medications. “And they didn’t have a safety signal. They’re not allowed to look at efficacy. They’re not allowed to say, ‘Well, we don’t believe these are efficacious,’ or whatever. They can only look at safety.” But three former FDA officials closely familiar with how the agency created the criteria to assess the peptides in the first place say Kennedy has mischaracterized their work. The agency’s 2023 decision to ban certain peptides was supported by numerous documented safety concerns, they said. FDA regulations also require the agency to assess both safety and effectiveness before approving a substance for compounding. “It would be a disruption of the societal pact we have had since 1962 that drugs will be studied to see if they work before they are marketed in the U.S.,” said Janet Woodcock, a former FDA acting commissioner. If Kennedy justifies reversal of the previous work by suggesting there were no safety concerns, it would give a false imprimatur of safety to more than a dozen unapproved, untested drugs, the officials said. There’s been little new science on the 19 peptides since the FDA’s 2023 decision to categorize them as unsafe. But demand for the drugs has exploded as influencers have flooded social media with promises of sculpted physiques, glowing skin, luscious hair, rapidly healing injuries, youthful energy and blazing sex lives. <img loading="lazy" decoding="async" js-autosizes height="444" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="Six ads that claim peptides can help if you’re “struggling with low libido,” can “unlock cellular energy,” can be “a game-changer for women over 40,” can “accelerate fat loss, build muscle, improve recovery, and restore vitality,” among other things." class="wp-image-73221" srcset="https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,177 300w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,454 768w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,605 1024w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1536,907 1536w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2048,1210 2048w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,510 863w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,249 422w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,326 552w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,330 558w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,311 527w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,444 752w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,679 1149w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,1181 2000w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,236 400w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,473 800w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,709 1200w, https://www.propublica.org/wp-content/uploads/2026/04/PeptideAds_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,945 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Ads on Meta platforms claim peptide users can get a range of health benefits. Obtained by ProPublica The demand has given rise to a burgeoning gray market, where wellness spas, multilevel marketers and telehealth websites ply the public with vials of “research grade” peptides labeled “not for human use.” “More people want to use them,” said Lauren Colenso-Semple, a muscle physiology researcher and science communication specialist who follows scientific studies of peptides as part of her work. “That’s what’s changed.” FDA-approved peptide drugs such as insulin and oxytocin have been available for decades. Newer ones such as semaglutide and tirzepatide, broadly known as GLP-1s, have exploded in popularity for weight loss and have shown promise for treating other conditions, such as addictions and neurodegenerative and liver diseases. The popularity of these drugs has led the public to become more comfortable with injectables and has helped drive attention to other gray-market peptides. Last year, at a Las Vegas conference promising radical life extension, two women became critically ill after being injected with peptides the FDA had categorized as unsafe. Although Nevada regulators investigated and fined the health practitioners involved in administering the peptides, investigators weren’t able to determine the exact cause of the reaction. The doctor who ran the booth where the women became ill said he didn’t believe that the peptides caused their reactions but apologized for the incident and said he would review his practices. The Alliance for Pharmacy Compounding, one of the largest industry associations lobbying for the FDA to change its stance on peptides, acknowledges it knows little about the safety of individual peptides being sold to the public. (Its CEO says it is an advocacy organization, not a scientific one.) But the group argues the public would be safer if peptides were handled by regulated compounding pharmacies instead of the gray market. The FDA should forgo the usual human clinical trials in order to bring about this shift, a spokesperson for the alliance said. “Where we don’t have research, clinical trials, what we’ve got a ton of, is, shall we say, testimonials, patient affidavits, attesting to the wonders of the drug,” said Scott Brunner, the alliance’s chief executive officer. “And RFK Jr. is one of those testifiers.” On the Rogan podcast, Kennedy wasn’t clear on exactly how the FDA would let compounders start dispensing peptides, describing it only as “some kind of action” to make “about 14” peptides “more accessible.” Nor has he specified which peptides he wants to make available. (Neither the FDA nor HHS responded to ProPublica’s requests for more information.) But several regulatory shortcuts exist and, ultimately, Kennedy could simply declare the ingredients are legal. “He has all of the authority,” said Woodcock, likening such a declaration to former HHS Secretary Kathleen Sebelius’ unilateral 2011 reversal of the FDA’s decision to lift age restrictions on the emergency contraception Plan B. (A judge ultimately found Sebelius’ move to be arbitrary and capricious and nullified it.) “The secretary can do anything they want.” <img loading="lazy" decoding="async" js-autosizes height="502" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="Six TVs showing a commercial with former tennis star Serena Williams above a packed restaurant with people dining and watching the screens." class="wp-image-73219" srcset="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,683 1024w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1536,1025 1536w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2048,1366 2048w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,576 863w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,352 527w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,502 752w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,1334 2000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,534 800w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2260111539_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> A commercial for a GLP-1 drug appeared on television screens at a bar in Los Angeles during the Super Bowl LX broadcast. The Food and Drug Administration has approved peptide drugs such as semaglutide and tirzepatide, known as GLP-1s, and they have exploded in popularity for weight loss and shown promise for treating other conditions. Jill Connelly/Bloomberg/Getty Images The Bulks List The FDA’s road to regulating compounding pharmacies — and by extension the peptides they seek to dispense — has been long and tedious. Much of the regulatory fight has focused on which ingredients compounders should be allowed to use. Under a 1997 law, the first passed by Congress to regulate the industry, compounders can only use ingredients that are a component of an approved drug, have what’s known as a USP monograph (essentially a third-party certified recipe for a drug used mainly by manufacturers of generics), or are listed as approved substances by the FDA. This FDA list, known as “the bulks list,” is at the center of the ongoing peptide debate. Litigation and pressure from the industry and lawmakers delayed for decades the creation of the bulks list, leaving compounders in limbo on scores of substances, not just peptides. “Everything was a fight. It was a huge fight,” said one former FDA official who has spent more than 30 years working on compounding policies. The former official asked not to be named to avoid a public debate with the industry. The need for the list took on new urgency in 2012, when more than 60 people died from fungal meningitis infections contracted from a drug produced at a compounding facility and dispensed to hundreds of people. Congress passed another law further regulating large compounders that sell medications to doctors’ offices and hospitals rather than individual patients. The new law also prompted the agency to move more quickly on establishing the bulks list. The FDA asked the industry to nominate substances for inclusion on the list. It did so, nominating thousands of ingredients, including, for example, purified water and asparagus. “They put in everything,” the official said. “Literally thousands of nominations with absolutely no justification for why it needed to be there.” Each substance would have to be reviewed individually before it could be added to the bulks list. The agency would have to solicit public comment and an advisory committee of health and pharmacy experts would have to review the FDA’s research. Reviewing them “was a massive effort. The agency proceeded glacially, but really we were speeding as fast as we could,” the official said. In 2017, under pressure to move more quickly, the FDA came up with an interim solution. It substantially narrowed the list of nominated ingredients, quickly reviewed each remaining substance and placed them into three categories. The first was substances with enough of a safety track record that the agency felt comfortable letting compounders use them while the final list was assembled. The second category included substances considered too risky for compounding. And the third included those without enough supporting information for the FDA to make an informed decision and therefore wouldn’t be used for compounding. This categorization didn’t constitute a formal regulation; rather the agency was using its discretion not to go after compounders who used ingredients it deemed safe — those from the first category. In 2023, the FDA placed 19 peptides in Category 2, which already included a handful of substances the agency considered to be dangerous. This is what Kennedy has called “the war on peptides.” In explaining its decisions, the FDA pointed to well-established research in peptide drug development that injectable peptides carry the risk of causing immune reactions. Such reactions can range from responses with “no clinical manifestations” to irritating rashes to life-threatening conditions such as anaphylactic shock, which constricts breathing and impairs motor function. Peptides occur naturally in the body but break down quickly after serving their purpose. Peptide drugs, on the other hand, are manufactured to last longer in the body to create a therapeutic response, such as controlling appetite or promoting the growth of new blood vessels, bone density or muscle. “Now that it’s been tweaked to make it something else, the immune system can recognize it as foreign and there’s the potential issue of having an unwanted immune response,” Colenso-Semple said. The manufacturing process can also introduce impurities — like bacteria or heavy metals — into peptide drugs. They also are sensitive to environmental conditions and can change chemical composition if stored at the wrong temperatures or shaken too vigorously, increasing the risk of an immune response or decreasing their effectiveness. And when a substance is injected, as opposed to taken orally, it bypasses most of the body’s natural defenses. The risk of an immune response is common to peptide drugs in general. But individual peptides also present specific potential risks. The FDA reviewed data to assess these risks and found limited human studies on a few peptide therapies; most have only been studied in animals or in clinical populations like HIV patients. What human data the FDA did find for individual peptides indicated the potential for harm. Subjects in studies of six individual peptides — growth hormone releasing peptide-2, ibutamoren mesylate, ipamorelin, CJC-1295, AOD-9604 and melanotan II — experienced adverse events, including death. (It wasn’t proven whether the deaths were caused by the peptides or by something else.) Ultimately, the FDA decided not enough data existed to allay the known safety concerns. “Of course any adverse event can be a flag,” said another former FDA official who worked in the compounding division when the peptides were categorized as unsafe. The former official asked not to be named because they work in public health and don’t want to antagonize the current administration. “Also, if there is no clinical data for a substance, and an awareness that the substance has the propensity for harm, that could make it an appropriate placement on the Category 2 list.” <img loading="lazy" decoding="async" js-autosizes height="502" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="An arm with a butterfly needle stuck into it. The person’s gloved hand rests on a black table near a rack of vials, a box of medical tape and crumpled paper packaging from medical supplies." class="wp-image-73220" srcset="https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,683 1024w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1536,1025 1536w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2048,1366 2048w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,576 863w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,352 527w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,502 752w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,1334 2000w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,534 800w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/h_16418342_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Attendees are taught how to draw blood during a “peptide rave” in San Francisco last year. Jason Henry/The New York Times/Redux Are They Safe? Putting the peptides on the unsafe list didn’t change much for compounders. Because those peptides aren’t components of an approved drug and don’t carry a USP monograph, compounders weren’t allowed to dispense them anyway. “All that did was put an exclamation point on it,” Brunner said. In the months after the FDA’s announcement, his organization repeatedly warned its members not to dispense peptides. But the listing prompted at least two peptide companies to sue the FDA, arguing it was dragging its feet on creating the bulks list of allowed compounding substances. To date, only six substances have made it through the process to be put on the list, none of which are peptides and none of which are injectables. As the lawsuit wound its way through federal court, the FDA agreed to accelerate the review of four peptides named in the lawsuit: CJC-1295, AOD-9604, thymosin-alpha and ipamorelin acetate. It also decided to move forward on two other peptides not listed in the complaint: kisspeptin and ibutamoren mesylate. Online marketing claims these peptides help with, among other things, weight loss, muscle-building, anti-aging, insomnia, tissue repair and sexual dysfunction. Marketers also claim thymosin-alpha, one of the more studied peptides, can help with immune function, Lyme disease and COVID-19. In the final months of the Biden administration, the FDA convened the expert advisory committee and presented its research on the six peptides. In reports up to 158 pages long, the agency detailed the science behind the immune response risk in synthetic peptides, listed documented adverse events associated with the drugs and summarized the limited research on human subjects. In each case, the FDA recommended against putting the peptide on the bulks list for compounders. “I can’t imagine anybody looking at this data and being comfortable” making these available to the public, Colenso-Semple said. The peptide industry was given just 10 minutes before the committee to present arguments that the six peptides were safe. Speakers offered anecdotal evidence from their own and others’ practices. Even though peptides can’t legally be used by compounders, many were dispensing the drugs because the FDA has been lax in enforcing its regulations. “Many of the peptides that have been placed on Category 2 have been used successfully by thousands of our practitioners treating hundreds of thousands of patients who utilize these compounds to energize cellular function and give the body what it needs to help address sickness and disease, including obesity, diabetes and addiction,” said Dan DeNeui, CEO of one of the peptide companies that sued the FDA. His wife, Terri DeNeui, a nurse practitioner and founder of their company Evexias Health Solutions, presented information from a survey of 508 patients treated with various peptides that said 19% reported uncomfortable side effects and less than 1% experienced an adverse event. They also contended peptides would be more safely dispensed by regulated compounders than on the gray market — the argument now being made by the Alliance for Compounding Pharmacies. The active ingredients in the drugs would be manufactured at an FDA-registered facility subject to inspection, and compounders are overseen by state boards of pharmacies to ensure sterile conditions. That’s “a heck of a lot better than what many consumers are doing,” getting advice in chat rooms and “ordering some substance that purports to be a peptide and may or may not be,” Brunner told ProPublica. While that argument addresses quality-control concerns associated with the gray market, it doesn’t confront the fundamental question of whether peptides are safe. “They’re totally unapproved drugs,” said one of the former FDA officials. “Would you let a pharmaceutical company do this? No. No way.” In the end, the advisory committee sided with the FDA and endorsed its initial decision that the six peptides were too risky to be dispensed to the public. <img loading="lazy" decoding="async" js-autosizes height="501" width="752" src="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?w=752" alt="A tanned man with short gray hair, wearing a blue pinstriped suit and a tie with crabs on it. " class="wp-image-73218" srcset="https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg 3000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=300,200 300w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=768,512 768w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1024,683 1024w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1536,1024 1536w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2048,1365 2048w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=863,575 863w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=422,281 422w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=552,368 552w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=558,372 558w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=527,351 527w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=752,501 752w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1149,766 1149w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=2000,1333 2000w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=400,267 400w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=800,533 800w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1200,800 1200w, https://www.propublica.org/wp-content/uploads/2026/04/GettyImages-2258396832_preview_maxWidth_3000_maxHeight_3000_ppi_72_embedColorProfile_true_quality_95.jpg?resize=1600,1067 1600w" sizes="auto, (max-width: 752px) 100vw, 752px" /> Health and Human Services Secretary Robert F. Kennedy Jr. has vowed to end the “war on peptides.” Aaron Schwartz/CNP/Bloomberg/Getty Images What Happens Now? Unhappy with the advisory committee’s decision, the compounding industry has amplified its argument that the FDA review process for the bulks list is broken. The advisory committee had few working compounders on it and didn’t give those who opposed the decision on peptides enough time to present its arguments, industry advocates say. With a new administration, whose health secretary has used peptides himself and is trying to advance alternative health practices, they see an opportunity. They hope the FDA will appoint more members with compounding experience to the committee and ease enforcement on peptides while it continues the established regulatory process. “Given the scale of demand — demand that is going to be met, if not by a state licensed compounding pharmacy, then by the black and gray markets — we believe the lens that the FDA is using related to these peptides, at least some of the peptides, is the wrong lens,” Brunner said. “They’re wanting research, clinical trials. They’re wanting a certain amount of certitude that, frankly, is appropriate for most drugs, but not for this moment.” Regulatory shortcuts exist that would allow the FDA to skip the more laborious approval process. The FDA could simply remove the peptides from Category 2, those it considers unsafe. It could place them in Category 1, allowing them to be used in compounding. Or it could announce it’s changing its enforcement strategy and not going after compounders who work with these substances. None of that would be safe for the public, Woodcock contends. Congress intended for the FDA to “refer to a substantive body of evidence about the safety and effectiveness” of ingredients put on the bulks list, she said. “This wasn’t supposed to be a route for unapproved drugs to get into the market,” she said. “Not even Congress was thinking that.” The post RFK Jr. May Reverse a Peptide Ban He Calls “Illegal.” Former FDA Officials Say He Mischaracterized Their Work. appeared first on ProPublica.