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Mylan Announces $465 Million Settlement Over Whether Epipen Qualifies as Generic

The Free Press WV

The pharmaceutical company Mylan has announced a $465 million settlement agreement with the U.S. Department of Justice over its EpiPen auto-injector products.

The conflict was over whether Mylan misclassified EpiPen as generic to avoid paying Medicaid rebates to the federal government.

Under the settlement, Mylan will reclassify EpiPen for purposes of the Medicaid Drug Rebate Program and pay the rebate applicable to innovator products, effective as of this past April 01.

Mylan had earlier indicated that a settlement was reached but today was the first day it was confirmed by the government.

As Bloomberg reported, some U.S. lawmakers criticized the deal as not tough enough on the company.

“As we said when we announced the settlement last year, bringing closure to this matter is the right course of action for Mylan and our stakeholders to allow us to move forward,” Mylan chief executive officer Heather Bresch stated in a news release.

“Over the course of the last year, we have taken significant steps to enhance access to epinephrine auto-injectors, including bringing a solution to the fast-changing healthcare landscape in the U.S. by launching an authorized generic version at less than half the wholesale acquisition cost of the brand and meaningfully expanding our patient access programs.”

Bresch is the daughter of Senator Joe Manchin, D-WV, and Gayle Manchin, the secretary of Education and the Arts in Governor Jim Justice’s administration.

She and Mylan have been under scrutiny over the price of Epi-Pen for much of this past year. Mylan acquired the rights to the shot-delivered medicine in 2007 and then raised the price roughly six-fold.

“Mylan has always been committed to providing patients in the U.S. and around the world with access to medicine, and we look forward to continuing to deliver on this mission,” Bresch said in the news release.

The settlement does not contain an admission or finding of wrongdoing.

Mylan also has entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.

The settlement provides resolution of potential Medicaid rebate liability claims by the federal government, as well as by some hospitals and other covered entities, such as rival drugmaker Sanofi, which sued Mylan last year.

“It was our contention that Mylan’s intentional misclassification of EpiPen allowed them to amass hundreds of millions of dollars which they then used to finance their anticompetitive behavior in the marketplace,” Sanofi said in a statement Thursday.

The settlement allocates money to the Medicaid programs of all 50 states and establishes a framework for resolving all potential state Medicaid rebate liability claims within 60 days.

Medicaid gets a 23 percent discount on brand-name drugs and a 13 percent discount on generics.

The Centers for Medicare and Medicaid Service indicated that EpiPen had been classified incorrectly as a generic since at least 1997, both by Mylan and previous makers.

The Justice Department claimed in its lawsuit that by misclassifying EpiPen as a generic product rather than a brand name, Mylan profited at the expense of Medicaid, the government’s health-insurance program for the poor.

“Taxpayers rightly expect companies like Mylan that receive payments from taxpayer-funded programs to scrupulously follow the rules,” said William Weinreb, the acting U.S. Attorney in Massachusetts.


08.18.2017
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WVONGA to Push Again for Mineral Efficiency

The Free Press WV

Natural gas production in West Virginia is not growing as much as it is in Pennsylvania and Ohio. The head of the West Virginia Oil and Natural Gas Association blames it on noncompetitive drilling laws.

Specifically, that means West Virginia lacks laws allowing joint development and co-tenancy.

WVONGA will try again in the next legislative session to secure those two items, said Anne Blankenship, WVONGA executive director.

“WVONGA will advocate again in 2018 for the West Virginia Legislature to pass a mineral efficiency bill that will resolve the issue when 100 percent of the mineral interest owners do not consent to the development of oil and gas,” Blankenship said last week. “In many instances, a fraction of one percent of the mineral interest owners can prevent the development of oil and gas against the will of the super majority.

“Our surrounding states, including Ohio and Pennsylvania, have laws in place to address this issue, and production is increasing at higher rates in those states than in West Virginia. To become competitive with these states, West Virginia must pass similar laws.”

Co-tenancy would allow drilling when 75 percent of owners of a tract agree to allow development of mineral rights, even if the other 25 percent do not approve or cannot be located. Joint development would allow drilling companies to use horizontal drilling to extract natural gas under land using leases that were bought when shallow, vertical wells were the only drilling technology available.

Both practices have been opposed by landowner rights organizations and the West Virginia Farm Bureau.

Senate Bill 576, which addressed joint development and co-tenancy, passed the state Senate this year but died in committee when it moved to the House of Delegates.

EQT is one of the largest drillers and producers of natural gas in West Virginia. In a recent conference call, EQT CEO Steve Schlotterbeck referred to what he called West Virginia’s “antiquated” oil and gas drilling laws and regulations when discussing EQT’s capital expenditure program and how it plans to drill more in Pennsylvania than in West Virginia.

An EQT spokesperson confirmed that Schlotterbeck was referring to the lack of joint development and co-tenancy in West Virginia.

After this year’s regular session of the Legislature ended, Schlotterbeck said EQT can drill wells with longer laterals in Pennsylvania than it can in West Virginia because of joint development and co-tenancy. He also said West Virginia’s laws are wasteful of natural gas. Because the company cannot drill laterals in West Virginia that are as long as those in Pennsylvania because of co-tenancy restrictions, some gas that could be recovered here is not recovered, he said.

Blankenship’s comments came as WVONGA compared production in West Virginia counties last year. Blankenship said Doddridge County (334,486,963 cubic feet) was by far the largest natural gas producing county in 2016, producing about 334.5 million cubic feet, followed by Wetzel County with 208.7 million.

The next four counties ranked by production were: Marshall, with 143.1 million cubic feet; Ritchie, with 130.8 million; Harrison, with 128.3 million; and Tyler, with 120.9 million.

Statewide, West Virginia wells produced nearly 1.35 billion cubic feet, up about 2.5 percent from 2015, Blankenship said.

According to the U.S. Energy Information Administration, West Virginia’s natural gas production last year increased by about 56.3 million cubic feet, or 4.3 percent. Pennsylvania’s production increased by 450.99 million cubic feet, or 9.37 percent.

Ohio overtook West Virginia in production by producing about 44.5 percent more gas than in 2015, according to the EIA.

~~  Jim Ross ~~

UHC’s Three Germ-Zapping Robots Been Named

Environmental Service Employees Win $100 Gift Cards

United Hospital Center (UHC) recently announced that it has the most Xenex LightStrike Germ-Zapping Robots in West Virginia. The three robots are being used to enhance environmental cleanliness by disinfecting and destroying hard-to-kill germs, bacteria, and superbugs in hard-to-clean places.

The Environmental Services team participated in a contest to name all three of the robots, as these modern marvels of technology are also included as part of the cleaning team at UHC. Each of the following contest winners received a $100 gift card to the cafeteria:

    • Brenda Morrison with the name “UHC3PO”

    • Karen Minnear with the name “Elroy”

    • Chris Owen with the name U.S.H.E.R. (Ultra Sanitation Healthcare Efficient Robot)

The Free Press WV
Pictured from left front row: Brenda Morrison, Environmental Services, contest winner; Karen Minnear, Environmental Services, contest winner; Chris Owen, Environmental Services, contest winner; Pictured from left back row:  Dr. Mark Povroznik; chief quality officer, vice president of quality; Beth Bond, MBA, BSN, RN, CIC, infection preventionist manager; Annetta Payne, RN, CIC, infection preventionist; and Brian Fijewski, MBA, director of environmental services.


“This was a great opportunity to engage with our Environmental Services staff that is responsible for the room cleaning program,” said Dr. Mark Povroznik, chairman of Infection Control at UHC. “The entire Environmental Services team, including the robots, is critical in the implementation of ultra violet room disinfection.”

Each person could submit up to three names for the contest, as a total of 30 names were submitted. The committee of judges from the UHC Personnel Action Committee (PAC) selected the three winning entries.

“If not properly cleaned some spores, such as C-diff, can live on surfaces for up to five months,” said Dr. Povroznik. “Upon a patient discharge, Environmental Services will clean the room as they would normally and then they terminally clean a room with one of the robots. These robots are just the latest step in UHC’s effort to prevent infections.”

IOGAWV Selects Leadership for 2017-18

The Free Press WV

Marc A. Monteleone, general counsel to WACO Oil and Gas Co. and a partner in the law firm of Bowles Rice, LLP, has been elected to lead the Independent Oil and Gas Association of West Virginia, Inc. (IOGAWV) as its president for 2017-2018.

Joining Monteleone on the leadership team are Vice President Brett Loflin, Northeast Natural Energy LLC, Secretary-Treasurer Jim Pritt, Enervest Operating, LLC and Immediate Past President Scott Freshwater, ConServ Inc./Reserve Oil and Gas, Inc.

The Free Press WV
Marc A. Monteleone


“I am truly humbled and honored to serve as president of IOGAWV for the coming year,” Monteleone said. “I am ready to work hard and help our members meet the challenges of energy production, environmental stewardship and job creation.”

Monteleone concentrates his practice in oil and gas law, commercial law, federal and state taxation, construction law and real estate development. He has extensive experience in managing oil and gas operations and is the owner of Mountain Lion Enterprises Inc. and Tygart River Oil & Gas, LLC. He serves as general counsel to Waco Oil & Gas Co., Inc., where his duties include overseeing Marcellus Shale exploration, negotiation of gas sales contracts and supervising mineral acquisitions. In addition, he represents many large and small oil and gas production companies. He has an extensive real estate practice in land use and development law, representing both large and small developers proposing commercial and residential projects.

He previously served on the board of directors of IOGAWV from 2010-2013 and served as secretary/treasurer from 2011-2013.  He earned his undergraduate and law degrees from West Virginia University and his masters of law in taxation from New York University.

“IOGAWV is the largest natural gas and oil association in West Virginia, serving all producers in West Virginia,” Monteleone said. “I have large shoes to fill following President Scott Freshwater. He did an outstanding job of leading this organization and expanding its services to the producer community. Luckily, Scott serves another year as immediate past president, so I get to work alongside him and continue many of the initiatives he began this year. He is an amazing person and leader and his dedication to our membership is truly inspiring.”

Frontier Offering Higher Speeds, Discounts as Result Of $160 Million Settlement

The Free Press WV

Frontier Communications’ $160 million settlement with West Virginia Attorney General Patrick Morrisey’s office has led to increased internet speeds and discounts for approximately 40 percent of customers affected.

Frontier Communications entered into the settlement to resolve complaints about internet speeds provided to its customers.

“This agreement already has improved connectivity for thousands of West Virginians, however significant work remains,” Morrisey said.

Morrisey’s office, between 2013 and 2015, received multiple complaints from customers paying for Frontier’s high-speed service, which advertised internet speeds up to 6 megabytes per second. The subsequent investigation found many customers expecting internet speeds “up to 6 Mbps” frequently received speeds 1.5 Mbps or lower.

The discounted monthly rate set bills for approximately 27,500 affected customers at $9.99.

Those with further questions can contact the Attorney General’s Consumer Protection Division at 1-800-368-8808 or visit the office online at www.wvago.gov.

Natural Gas Production Up for A 13th Straight Year in West Virginia

The Free Press WV

Although the price of natural gas has been low for several years, production in West Virginia continues to grow stronger.  The West Virginia Oil and Natural Gas Association reports for a 13th straight year, production increased in West Virginia, setting a new all time high in each of those years.  The increase for 2016 is only about 2.5 percent, but according to Association Executive Director Anne Blankenship, that’s still a positive.

“That is all due to the investments made in this state and the advancements in technology which allow our drillers to produce natural gas more efficiently,” she said on Tuesday’s MetroNews Talkline.

Improved technology allowed for increased gas production without drilling additional gas wells.  The industry looked at those developments as positive since they reduce the footprint of the industry and its environmental impact.  But, according to Blankenship while West Virginia is seeing increased production, the level of increase pales in comparison to neighboring states.

“The disappointing part is we’re not increasing nearly as much as Ohio and Pennsylvania. ” Blankenship said. “Both of those states have mineral efficiency laws in place.  Ohio has pooling.  Pennsylvania has joint development and co-tenancy. Ohio saw a 43 percent increase in 2016.  Obviously they are doing something right there that we don’t have here.”

The legislature gave the gas industry a cool reception to those mineral efficiency proposals during the 2017 Regular Legislative Session, but Blankenship said despite failure of the legislation, progress was made and the industry hoped to keep up the momentum in next year’s session.

“There’s always a lot of education that needs to be done,” she said. “This is not a ‘taking of property rights’ it is a ‘basic majority rules’ concept so we can be in line with surrounding states.”

Blankenship added the lack of any of those efficiency laws along with a relatively high severance tax causes West Virginia to be viewed unfavorably by companies considering drilling in the Mountain State.  Many simply choose to cross the state line and set up according to her.

“We have nothing in place to deal with the inefficient manner in which we are having to produce right now,” Blankenship said. “That’s affecting our ability to bring in companies willing to drill in West Virginia.”

Judge Orderes EQT to Show Formulas Used in Royalty Payments

The Free Press WV

A Judge has ordered EQT to produce the documents and formulas its royalty owners have asked for in a dispute dating back to 2013.

The suit, filed four years ago by the Kay Company LLC and other lessors, accused EQT of improperly deducting post-production costs from their royalty payments.

EQT had been ordered by federal Magistrate Judge James Seibert to produce the information, despite the company’s characterization of the request as “unduly burdensome.“ EQT also contended the data was “protected work product.“

But U.S. District Judge John Bailey affirmed Seibert’s ruling in a 13-page order filed July 18. In it, Bailey noted that EQT had claimed there are “so many individual types of lease language that a class is improper and unmanageable.“

“This court is not totally convinced that the resistance is meritorious in that West Virginia has limited the categories of leases,“ Bailey wrote, pointing out the lessors were “seeking information as to how (EQT) classifies the numerous leases in the payment of royalties.“

“These attempts have been thwarted or delayed by the actions of the defendants,“ Bailey wrote. “For example, when asked about a list by which the defendants determine how to pay royalties to the various lessors, (EQT) took the position that such a list did not exist or that the list was work product. This court found such a position untenable.“

Bailey cited the transcript from the magisterial proceeding, in which Siebert had asked the lawyers who, at EQT, makes a mathematical calculation on how to pay and was told, “they look at it lease by lease.“

“Finally, after over four years, someone has admitted that they have two or more formulae for calculating royalty payments,“ Bailey wrote. “As a corollary, therefore, the defendants have to have a list as to which leases are determined by which formula.“

EQT’s legal team could not be reached for comment.

What Happened When Walmart Left

In West Virginia, the people of McDowell County can’t get jobs, and recently lost their biggest employer – the local Walmart store.

They describe the devastating loss of jobs, community and access to fresh food
The Free Press WV

When Walmart left town, it didn’t linger over the goodbyes. It slashed the prices on all its products, stripped the shelves bare, and vanished, leaving behind only the ghostly shadow of its famous brand name and gold star logo on the front wall of a deserted shell.

The departure was so quick that telltale signs remain of the getaway, like smoldering ashes in the fireplaces of an evacuated town. Notices still taped to the glass entranceway record with tombstone-like precision the exact moment that the supercenter was shuttered: “Store closed at 7pm, Thursday 28 January 2016.”

Ten years. That’s all the time it took for the store to rise up in a clearing of the lush forest of West Virginia’s coal country and then disappear again, as though it had never been there.
The Inequality Project: the Guardian’s in-depth look at our unequal world

But for the people of McDowell County – proud country folk laboring under the burdens of high unemployment, low income and endemic ill health – even such a fleeting visit to this rural backwater by the world’s largest retailer had a profound impact. Both in the arrival, and in the hasty leaving.

Wanda Church was present for both of these book-ends of the Walmart story – one of a few workers who helped set up the store in October 2005 and then gut it 10 years, three months and two days later. She remembers the feeling of excitement and expectation as they stocked the supercenter for the very first time, turning it in just 20 days from an empty building into a teeming cathedral of retail capitalism.

“It was amazing what we were able to do, stocking the shelves from nothing to full in such a short time,” she said, talking as she waited for her car to be repaired at a gas station over the road from the disused store. As if to underscore her enduring attachment to the corporation, she was wearing one of her old Walmart T-shirts.

She was there at the supercenter, too, on that fateful day last year when she and her fellow Walmart workers walked out of the store for the last time. “We were all crying. It was a sad day for a lot of people. It was a sad day for me – I spent more of those 10 years at Walmart than I did at my own home.”

Much has been written about what happens when the corporate giant opens up in an area, with numerous studies recording how it sucks the energy out of a locality, overpowering the competition through sheer scale and forcing the closure of mom-and-pop stores for up to 20 miles around. A more pressing, and much less-well-understood, question is what are the consequences when Walmart screeches into reverse: when it ups and quits, leaving behind a trail of lost jobs and broken promises.

The Free Press WV


The subject is gathering increasing urgency as the megacorporation rethinks its business strategy. Rural areas like McDowell County, where Walmart focused its expansion plans in the 1990s, are experiencing accelerating depopulation that is putting a strain on the firm’s boundless ambitions.

Hit hard by the longterm decline in coal mining that is the mainstay of the area, McDowell County has seen a devastating and sustained erosion of its people, from almost 100,000 in 1950 when coal was king, to about 18,000 today. That depleted population is today scattered widely across small towns and in mountain hollows (pronounced “hollers”), accentuating the sense of sparseness and emptiness.

The Walmart supercenter is located about five miles from the county seat, Welch, which still boasts imposing brick buildings as a memory of better times. But the glow of coal’s legacy has cooled, as the boarding up of many of the town’s shops and restaurants attests.

When you combine the county’s economic malaise with Walmart’s increasingly ferocious battle against Amazon for dominance over online retailing, you can see why outsized physical presences could seem surplus to requirements. “There has been a wave of closings across the US, most acutely in small towns and rural communities that have had heavy population loss,” said Michael Hicks, an economics professor at Ball State University who is an authority on Walmart’s local impact.

On 15 January 2016, those winds of change swept across the country with a fury. Walmart announced that it was closing 269 stores worldwide, 154 of them in the US. Of those, 14 were supercenters, the gargantuan “big boxes” that have become the familiar face of the company since the first opened in Missouri in 1988.

One of those supercenters was in McDowell County.

“It was a big thing for people round here when Walmart pulled out. People didn’t know what to do. Young people started leaving because there’s nothing for them here. It’s like we’re existing, but not existing.”

The words are spoken by Henrietta Banks, 60, who lives just up the hill from the mothballed supercenter. We’re sitting in her front room where she spends much of her time in a hospital bed that has been set up for her as she is treated for congenital heart disease.

She remembers the excitement when the supercenter opened. “People welcomed it with open arms, we needed the jobs,” she said.

But in the end the expectation that Walmart would usher in a new, better era for McDowell County proved illusory. Her late husband Arthur, a former sharpshooter in the US Army who died in 2010, worked as a greeter at Walmart for a few years. He took the job largely in the hope of securing healthcare insurance for Henrietta, but he was told that coverage wasn’t part of the package, and the couple had to make do with Medicaid.

Their daughter Nicole, 25, is sitting beside her mother holding her hand. She works as a corrections officer in a nearby prison, but her dream is to become a therapist.

Given her mother’s health issues, Nicole Banks tries to compensate for Walmart’s departure by seeking out fresh fruit and vegetables in the surrounding area. But it’s not easy. The nearest replacement store, Goodsons, is too expensive, she says, and other Walmarts are an hour’s drive away along Appalachian roads that are as tightly coiled as the copperhead snakes that live in the local forest.

Already, she spends half her $1,200 post-tax monthly salary on car insurance and repayments, and gas for the long drive for groceries eats into the little that is left. So she and her mom grab food where they can, opting for less pricey meals of hamburgers or spaghetti rather than fresh salad that takes another big chunk out of her income.

It’s not great for her mother’s health, but then Nicole thinks that’s typical for McDowell County people since Walmart left town. She has noticed that processed foods seem popular again; there are long lines again at the local McDonald’s.

“There’s a lot of people getting sick since the store closed because they’re not getting the right diet. It’s sad to me, but bad food is cheap.”

Nicole Banks is the first person in her family to go to college. With a degree in sociology, how would she sum up the impact of Walmart leaving?

She pauses to think for a while, and when she replies, she does so with unexpected vehemence. “It’s ridiculous,” she says. “People round here can’t get healthcare, they can’t get jobs and now the good food has gone. We are not getting our basic needs met. People are dying young.”

Banks is not exaggerating. Of the 3,142 counties in the US, McDowell County comes in at No 3,142 in terms of life expectancy. For men, that’s 64 years, a statistic that, as Bernie Sanders likes to point out, is the same for men in Namibia.

Clearly, such endemic health problems cannot be laid exclusively at the door of Walmart. But for Sabrina Shrader, a community organizer who was born and bred in the area, it provides the context for understanding the effect of the corporation’s decision, and that of its controlling family, to pack its bags and quit.

“The Walton family are billionaires,” she said (also no exaggeration – their collective worth is put at about $150bn). “They developed a system that just made us worse off, and then they took even that away from us.”

McDowell County forms part of the largest mixed mesophyte forest in the world, a relic of the ancient woodland that once covered much of North America. Wherever you look, majestic sugar maples, hickory, oaks and tulip trees tower overhead, hugging the steep slopes of the Appalachians.

It was into this stunning setting that Walmart descended in 2005 on the site of an old Kmart, like the spacecraft of alien botanists that lands in the forest at the start of the movie ET. And there it sat: a massive gash of concrete encircled by nature’s abundance.

Peep into the glass doors of the front of the store and you can start to appreciate the brutal simplicity of the Walmart concept. There is nothing inside its windowless walls, just 103,000sq ft of air. A Walmart supercenter is no more, no less than the name implies: a big box, an empty stage on which to wave a magic wand and summon up a million retail dreams.

Pack it with 80,000 products, and the people will come. Not just from all over McDowell County, but from far beyond. Over the 10 short years of the supercenter’s existence, many of those people grew dependent on it in so many ways.

Top of the list of dependencies: jobs.

“It’s all about jobs,” says Melissa Nester, publisher of the local newspaper, The Welch News, which sells 4,500 copies three times a week and doggedly refuses to have a website. “Dollar stores have picked up some of the trade left by Walmart, but they haven’t created many jobs.”

At its peak, Walmart employed 300 people in the McDowell County supercenter. That was down to about 140 by the end, but it still made it the largest employer in the area.

Wanda Church has been unemployed since that day when she cried as Walmart’s doors were closed for the last time; the company offered her a night shift at the next store along, but she couldn’t stomach the hour’s drive either way and wasn’t prepared to leave her home. Other employees felt they had no choice and are either commuting long distances or have relocated to work at other Walmart outlets, some as far off as Myrtle Beach in South Carolina, some 375 miles away.

There were knock-on effects, too, for local businesses that used to tender to workers and shoppers drawn into the area by the supercenter. Restaurants in a radius of several miles from the store complain of empty tables, while houses and shops in its close vicinity are now up for sale.

“It has affected this place real much, nobody stays here no more,” says Jessie Swims, 67, sitting on a bench at the Big Four motel across the road from the supercenter, drinking a soda. Swims has lived in one of the motel’s 15 rooms for the past five years, paying $600 a month out of his retirement money. Big Four used to be full, he says, now most of the rooms are empty and it too has been put on the market.

After jobs, taxes are the next things to go. The town of Kimball in which the supercenter is located used to receive $145,000 a year in taxes from Walmart, and when that went it had to cut back its workforce and put all remaining staff on a four-day week.

The county government also lost $68,000 in taxes, most of which went to schools, and all its staff were given a 10% pay cut. “All Walmart was interested in was how many millions of dollars they made, they weren’t interested in helping the community,” says McDowell County commissioner Gordon Lambert. “When they didn’t make the profit they wanted, they left.”

Walmart’s total revenue in the year in which the company closed the McDowell County store was $485.9bn.

I asked Walmart why it quit McDowell County. A spokeswoman said that closing a store was never easy, but it was “a necessary part of keeping a business healthy and positioned for future growth”. A number of factors had driven this particular decision, she said, including “financial performance as well as strategic alignment with long-term plans”.

The company had worked with all the employees who had lost their jobs to find them suitable transfers or give them severance pay. “We look forward to continuing to serve our Kimball area customers when they visit our stores in Bluefield, Princeton and MacArthur,” she said, (without referencing the hour’s drive.)

Economic losses are only one aspect of the hurt felt locally as a result of Walmart’s passing. There is something intangible, less material – and more chilling – about the fallout, something that seems to flow from the dependency the people of McDowell County developed on the retail magic conjured up inside that big box.

The Free Press WV


It’s touched upon by Wanda Church when she tries to explain why she cried that day. It was because, she says, she lost her family when Walmart closed.

Her family?

“The people I worked with, I relied on them if I needed help. The customers, they were our family.”

You hear it from Darrell Williams, 42, a truck driver picking wild raspberries on the side of the road to make a fruit cobbler. He recalls that his twin boys acquired their nicknames inside the supercenter. “My kids grew up in there. They called them the Screamers, because they used to scream if they didn’t get what they wanted.”

For Dan Phillips, Walmart was a way of coping with bereavement after his wife died a few years ago. “If you were lonely and had nothing to do, you’d go to Walmart to talk to folk. It was a great social network.”

Being a schoolteacher, Phillips has a theory for what happened when the store closed. “Socialization. We lost our socialization factor. Now it’s hard to keep track of people, there’s no other place like it where you can stand and chat.”

There was something else Phillips lost with Walmart’s departure. To illustrate the point, he reaches into his red pick-up truck and pulls out a loaded Para Ordnance Warthog .45 handgun and waves it at us, telling us not to freak as the safety is on.

“Bought this in the Walmart parking lot,” he says. “Guy sees me reading a gun magazine and asks me was I carrying. He offered to sell me the Para warthog and I got it for $775.” Phillips took his new possession home and added to his collection of 140 firearms.

“They screwed us real hard by leaving us like that,” he says, reflecting on the various ways his life has changed. “It’s so sad they thought they could just walk away.”

There are some rays of hope piercing through the dense ancient forest of McDowell County. Some families are trying to avoid the long drive to alternative outlets and the heavy prices by growing their own food.

In a hollow on Hensley Mountain, Alma McNelly, 53, affectionately known as “Maw”, and her husband Randy or “Paw”, live with 11 chihuahuas, a cockerel who wakes them at 5am every day and a horse called Snowman. Maw grows cauliflowers, tomatoes, carrots and strawberries. She shares the produce out to friends and family at the end of the pay month when times are lean and people start to go hungry.

She also collects six eggs a day from her brood of wyandotte hens. The only downside is that Paw doesn’t trust fresh-laid eggs unless they’re pickled, so she still has to make a monthly run to a supermarket to get factory-farmed eggs.

Down the road, Deana Lucion, 29, six months pregnant and with her 18-month-old daughter Trinity in her arms, tells us that she has started growing cucumbers, squash, peppers and corn. Her husband Phillip Lucion, 35, also supplements his income as a mechanic in a coalmine by catching trout in the nearby lake.

They make ends meet, but to the couple it’s a constant slog. “We do live in a great place,” Phillip says, “but I feel like a slave sometimes.”

When things get really rough at the end of the month – the money has run out, there are no food stamps left and the petrol tank is dry – people can always turn to the local food bank Five Loaves and Two Fishes run by Linda McKinney and her son Joel. On the third Saturday of the month they supply canned food and daily necessities such as toilet paper to up to 150 people who often sleep in their cars in the parking lot overnight to ensure they receive help.

For the last two years of its existence, the Walmart supercenter provided the food bank with close to 200,000lb of meat, dairy, pies and bread, allowing the McKinneys to increase the frequency of their giving. Now that’s gone, they try to make up for the shortfall by growing tomatoes, arugula and peppers in a greenhouse.

Linda McKinney says that the fresh food they received from Walmart, or “waste” as the corporation classed it, is sorely missed. But, like many of the other residents of McDowell County, she says she also mourns the communal aspect of the supercenter, its quality as a “social hub”.

McKinney rattles off a list of all the community facilities that disappeared from the region in recent years as the population declined and the culture of mega-chains like Walmart took root.

There used to be 28 churches of her United Methodist denomination in the county, now there are six; there were seven bars in Welch, all but one have closed; there were three cinemas, now it’s down to one; there are no community centers left; many of the corner shops have gone. “There’s nothing here,” McKinney says.

McKinney has one other, rather astonishing, reason to regret that the store closed. Walking.

Walking?

“I went to Walmart for the walk,” she says. “I went early and I got a cart and I walked all over the store. I loved walking around it. I would walk and talk, talk and walk. I could walk the store all day.”

That’s a statement that will reverberate far beyond the boundaries of McDowell County, or West Virginia. It could be applied to small towns and rural areas right across the US. This is the statement of communities that have had the communal bled out of them.

Filling the void, as well as helping to create it, came a sparkling new phenomenon: a big box, 103,000 square feet of windowless air, where you could catch up with friends, trade guns, shop to your heart’s content and even take a hike, all within a concrete gash carved out of one of the world’s most breathtakingly beautiful ancient forests.

And now that too is gone.

~~  Ed Pilkington in McDowell County, West Virginia ~~

What the Gutting of Sears Tells Us About America

The Free Press WV

Sears is fading. Fast. The 124-year-old retailer — the place where all America once shopped — is tumbling into a shopping horror.

At some Sears stores, recent news accounts report, ceilings are collapsing, rats are racing, and toilets aren’t working “for weeks on end.” Job cutbacks and a decade of under-investment have left store shelves bare — and customers on their own.

“You could fire a cannon in any direction and not hit one salesperson,” Michael Looney, a former Sears employee in California, recently told Business Insider.


Lampert’s Way

Meanwhile, the hedge-fund billionaire who’s been running Sears the last dozen years is keeping up a brave front. Eddie Lampert is sticking to his story that Sears is wondrously transforming itself into a “member”-oriented retailer for the online age.

But business analysts have been ridiculing these claims ever since Lampert started making them. They see the Ayn Rand acolyte as an ideologue who’s left Sears “ravaged by infighting.” In 2014, one business media survey found that Lampert had more negative ratings from employees than any other major top exec in America.

By standard bottom-line yardsticks, Lampert’s reign at Sears has been one of the biggest disasters in modern business history. Between 2011 and 2016, the giant retailer’s revenues plummeted by almost half. The company lost $8.2 billion over that span. Over the last decade, meanwhile, Sears stock price has sunk from nearly $200 per share to under $10.

Lampert’s colossal failure at Sears, some observers believe, simply reflects a broader trend, the epochal economic shift from bricks-and-mortar to online retail. Few major enterprises built for success in one business epoch, the argument goes, have ever been able to prosper in another.

But Sears as an enterprise has, ironically, already pulled off an epochal transformation. That epochal shift came in the middle of the 20th century under Robert E. Wood, the West Point-trained, former Army general who led Sears from just before the Great Depression into the 1950s.


What Wood Would Do

Wood understood early on that the automobile had changed the retail landscape. Before the auto age, average Americans had shopped by mail-order catalog, a retail category Sears dominated. With cars a mass phenomenon, Wood realized, shoppers could now drive to shop. The future belonged to general merchandise department stores, and Sears, under Wood, would open up hundreds of them. By Wood’s 1954 retirement, Sears towered over American retail.

Why did Wood succeed where Lampert fails? Sheer genius on Wood’s part? Hardly. The more important factor: Wood understood a basic element of enterprise effectiveness. Successful enterprises share, he believed, both credit and rewards.

Wood didn’t prance about Sears as a self-styled savior. Nor did he tolerate pomposity from anyone else in Sears management. During Wood’s tenure, editors at the Sears employee newspaper regularly ran articles that irreverently teased top Sears execs.

Sears execs would also receive no special perks. Seniority at Sears, not corporate rank, determined benefits like vacation and sick days. General Wood also kept management salaries below their level at other retailers. Wood wanted Sears known as the “workingman’s friend.”

The Sears profit-sharing plan bolstered that reputation. The plan applied to Sears workers who stuck with the company more than a year. Those who worked 15 years would see the company put into the “Savings and Profit Sharing Pension Fund of Sears, Roebuck and Co.” a sum that equaled five times the employee contribution.

These dollars would be invested in various assets, mostly Sears stock, and the assets would pay dividends than went to profit-sharing participants. Veteran employees would routinely receive more from profit-sharing payouts than their wages. Janitors making $40 a week could waltz into retirement with $2,500 in savings.

During Wood’s tenure, current and retired Sears employees would end up holding a third of the company’s shares, the highest employee-share percentage anywhere in Corporate America.

What explains Wood’s readiness to share? Did he grow up in abject poverty? Did he come from a family of progressive political activists? None of the above.

Wood had a conventional, conservative business political outlook. By 1938, he had emerged as a strong critic of Franklin Roosevelt’s New Deal. After World War II, he moved into America’s right-wing fringes.


Unions and Taxes Matter

So why did this right-winger share the wealth at Sears? He had little choice. Robert E. Wood operated in an America where two major institutions — the tax system and the labor market — were combining to make a sharing of sorts the national default.

The federal income tax throughout the mid-century Sears golden years subjected individual income over $200,000 to a tax rate that hovered around 90 percent. That left top executives like Wood with little incentive to feather their own nests. Why bother? They had little personally to gain from squeezing workers or cooking corporate books.

Trade unions, meanwhile, dominated the labor market. In major metro areas outside the South, most private-sector workers carried union cards. But not at Sears. Unions in the mid-century United States represented less than 8 percent of the Sears domestic workforce.

Wood liked things that way. He kept unions away, notes historian James Worthy, by having Sears match the gains unions at other companies were bargaining to win. Sears offered life and health insurance, sick pay, vacations, and separation allowances “long before they became common practice in American industry.”

Sears would be an outlier in the nonunion private sector. Few nonunion concerns worked as hard as Sears to provide economic security to their employees. But most all major nonunion companies — outside the South — made some effort to ratchet up worker pay and benefits. With unions representing such a significant share of the workforce, nonunion concerns had to try to approximate union-level wages and fringes or go without workers.

The result? The bottom 90 percent of American families would see their incomes soar in the post-war years, from a $10,513 average — in current dollars — in 1940 to $20,036 in 1950 to $26,665 in 1960.


Fast Forward

Sears chief Eddie Lampert, by contrast, is operating today in an entirely different economic environment. In huge swatches of the private sector, unions have no presence at all. Lampert has been able to shortchange workers left and right and not worry about any consequences.

And the tax system? The top federal tax rate on income has, over the past three decades, bounced around between 28 and 39.6 percent, less than half the top rate that Wood faced.

In other words, power suits like Lampert can keep, after taxes, the vast bulk of whatever income they can grab. That gives them a powerful incentive to grab, by any means necessary, as much as they can. Lampert has been free, in effect, to run Sears into the ground — and enrich himself in the process.

The most arrogant instance of this enriching? Two years ago, with Sears already on the ropes, Lampert and the hedge fund he also runs created a real-estate investment trust, then engineered a deal that had Sears sell to the trust over 200 of its best brick-and-mortar stores.

Lampert’s real-estate trust then rented space in the stores back to Sears, retaining the right to rent to other retailers as well. The deal guaranteed Lampert’s trust $135 million in rent money the first year and 2 percent annual hikes starting in the second.

Sears does get to cut the lease short on stores that prove “unprofitable,” but only if the Lampert-run retailer pays the Lampert-run trust an extra year’s rent and a year’s worth of operating expenses.

This maneuvering understandably outraged a good many Sears shareholders. They subsequently filed a lawsuit charging that Lampert was stripping Sears of its most valuable assets for his own personal gain.

The Lampert-friendly Sears board of directors vigorously denied that charge, then, this past February, agreed to pay out $40 million to settle the shareholder lawsuit.

Various other shifty moves have left Lampert well-positioned to survive any Sears bankruptcy and continue his lush luxury life. Should Sears go under, Lampert figures to be able to spend more time at his $40-million waterfront getaway on South Florida’s ultra-exclusive Indian Creek Island, a 32-home enclave that has its own mayor and full-time police force.


The Trump Connection

Eddie Lampert, living large at the expense of hard-working men and women of modest means, may just personify almost everything wrong with the modern American economy. He seems like just the kind of “swamp” creature Donald Trump once railed against.

But Eddie Lampert isn’t worrying about anybody draining his particular chunk of swampland, and he has some excellent reasons to feel confident.

Here’s one: Trump Treasury Secretary Steve Mnuchin didn’t just room with Lampert at Yale and didn’t just get his wheeling and dealing start in life, like Lampert, as a mover and shaker at Goldman Sachs. Mnuchin, before stepping down this past December to join the Trump cabinet, had spent the last 12 years sitting on the Sears board of directors.

~~  Sam Pizzigati ~~

Frontier Files Lawsuit on Broadband Bill Section

The Free Press WV

Frontier, no fan of West Virginia’s plan for broadening broadband coverage, has gone to federal court to block part of a new state law allowing providers to make changes to a competitor’s poles.

HB 3093, designed to expand and enhance broadband coverage in West Virginia, established a state Broadband Council to track broadband service and create broadband expansion policy. It also allows communities or businesses to form broadband co-ops to access federal grant money to extend service, in addition to allowing them to access utility poles belonging to Frontier and other companies.

The broadband expansion bill, signed by Governor Jim Justice in April, was designed to make sure all West Virginians have access to high-speed internet. But during the 2017 legislative session, Frontier insisted lawmakers would be better served to target areas where there is no internet access.

In a suit filed July 07 in Charleston, Frontier said it has no problem with broadband co-ops but contends giving competitors access to other carriers’ poles runs counter to federal law and FCC regulations.

“Frontier supports efforts to expand and improve broadband access in West Virginia. In fact, we’ve spent hundreds of millions of dollars to do just that,“ the company said July 10 in an emailed statement from spokesman Andy Malinoski. “And, we aren’t challenging House Bill 3093’s broadband provisions. Our issue is with House Bill 3093’s technical requirements of all providers, including Frontier, to follow when attaching to utility poles. Those requirements are inconsistent with preexisting federal requirements established under federal law and by the FCC. We’re simply seeking a ruling that the federal requirements prevail.”

The suit names Governor Jim Justice, Public Service Commission Chairman Michael A. Albert and PSC Commissioners Brooks F. McCabe Jr. and Renee A. Larrick as defendants.

Delegate Roger Hanshaw, the Clay County Republican who served as lead sponsor of HB 3093, sees the lawsuit as a smokescreen.

“I know there was some objection to the provision during the legislative session,“ Hanshaw said. “I think it’s important to pause for a minute ... and ask why the Legislature felt it had to pass the law in the first place. It wouldn’t be necessary if (everyone in West Virginia) simply had service; it was adopted because people in West Virginia have no service or inadequate service.“

Hanshaw said it was clear from the start Frontier didn’t like the bill.

“Frontier seems to have taken it as a direct shot at them, (but) we really don’t care who provides service,“ he said. “If Frontier wants to provide service to every customer in West Virginia, they’re welcome to. It’s not about incentivizing or punishing one company or another, it’s about providing the service.

“I don’t care if Frontier has every customer in West Virginia, but if they want that level of customer base they simply need to provide the service. It’s frustrating that the company would rather file lawsuits than provide service.“

Frontier says the new law states companies can relocate or alter equipment on a competitor’s poles without prior notice in some cases, requiring a 45-day advance notice only if the work “would cause, or would reasonably be expected to cause, a customer outage.“ If the existing company doesn’t respond within that 45-day time frame, competitors can make whatever changes they deem necessary.

Frontier insists the provision increases the risk of service interruptions and will make it harder for them to track the source of connectivity problems and says it also could interfere with its contractual obligations with cable television providers.

“Either Frontier will not be notified at all of the location or nature of (the work) or, even where Frontier is entitled to notice, it may not know of the location and type of work until the new attacher actually provides the notice of completion of the work, if ever,“ the company said in the complaint.

But Hanshaw called that “another red herring” and said the bill gives the existing pole owner the right to say no.

“It’s only if they refuse to communicate with the requester that folks can go on their poles (and change connections). All they have to do is say no,“ he said.

Hanshaw also points out internet access is vital in today’s economy, not just for residential users but for business and industries. He said his family operates a small business in Clay County “and there are days we can’t process a credit card sale, the connection is so slow and unreliable. That’s simply inexcusable in this economy.“

“There was some perception by Frontier during the session that (HB 3093) was targeted at their company, and that couldn’t be farther from the truth,“ Hanshaw added. “Truth is, I don’t care who provides service to West Virginia. I do care that it meets the needs I have and my constituents have and West Virginia homeowners and businesses have; that’s not the case now. If they don’t want to provide that service, why in the world would they go to such lengths to prevent people from helping themselves?“

Frontier wants a court order barring the state from permitting others to access their poles, saying the company faces “imminent, irreparable harm” if the provision isn’t struck down.

~~  Linda Harris ~~

Glenville State College Accounting Professor Named President of WVSCPA

Glenville State College Accounting Professor Named President of WVSCPAGlenville State College Associate Professor of Accounting and Chair of the Department of Business Cheryl F. McKinney has been elected President of the West Virginia Society of Certified Public Accountants (WVSCPA) for the 2017-2018 year. McKinney was installed during the Society’s Annual Meeting, which was held at The Greenbrier on June 16. She becomes the 99th president of the WVSCPA. It is also believed that McKinney is the first sitting educator or professor in almost forty years to be president of the Society.

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McKinney is a tenured professor at GSC and has taught accounting courses since 1983. In addition to teaching, she previously operated an independent CPA firm, preparing taxes and providing accounting consultancy to her customers. For a time she also worked for the major accounting services firm Ernst & Whinney (now known as Ernst & Young or, simply, EY). The multitalented McKinney also performs alongside the student and alumni members of GSC’s Percussion Ensemble which is under the direction of her husband John.

“This is a tremendous achievement for Professor McKinney and indicative of the quality of faculty here at Glenville State College. Her election as President of the West Virginia Society of CPAs demonstrates the confidence that the other members of that professional association have in her abilities,” said incoming Glenville State College President Dr. Tracy Pellett. “In the short amount of time that I’ve been at Glenville State, the faculty and staff have truly impressed me with the work they do both on and off campus. I know the rest of the Pioneer family joins me in congratulating Mrs. McKinney on this accomplishment.”

“We are so proud that Cheryl McKinney has been elected President of the West Virginia Society of Certified Public Accountants for the 2017-2018 year. She is the ultimate accounting professor and will serve the presidency with honor and integrity. This new role is a positive reflection on Mrs. McKinney, her department, and all of our faculty as a whole,” said Vice President for Academic Affairs Dr. Milan Vavrek.

The WVSCPA is the leading professional association dedicated to enhancing the success and professionalism of all Certified Public Accountants in West Virginia and to serving the public by providing financial information and training.

State Computer Consultants Run Up Gigantic Bills

The Free Press WV

West Virginia government officials had a good idea back in 2010—create software that would link all state department computer systems to dramatically improve business functions and the payroll system while also providing more transparency for the public.

Seven years later the system, called wvOASIS, is mostly, but not entirely in place, and the estimated cost has skyrocketed from $90 million to approximately $150 million. The delays and cost overruns are bad enough, but a new report by the West Virginia Legislature’s Post Audit Division reveals the state has spent millions on consultants from Information Services Group (ISG) to provide “project oversight” for wvOASIS.

“Over the life of the consultant relationship with ISG, from May 2010 to January 2017, a total of 31 consultants have billed over $24 million for services rendered,” the report said. “This equates to an average monthly invoice of $299,115 over 81 months.”

Some of the consultants ran up huge bills.  “Since 2010, there have been 29 instances where an individual consultant billed in excess of $40,000 in one month.”  Nine consultants billed the state for over $1 million during the contract. Making matters worse, the auditors could not find any specific details “about times clocked in and out, nor a summary of the work conducted during these hours.”

Let that sink in.  The state spends $150 million on a new computer system and pays $24 million of taxpayer dollars to consultants to run it?  Most damaging is the report’s finding that even after all that time and all that money, the state is still dependent on consultants to process the state payroll.

IT, software support and upgrades are absolutely critical to keep a complicated system operating, so it’s understandable that the state would need continuing help. However, it looks like the taxpayers have been taken for an expensive ride here.

“Due to the size, scope and cost of this project, the inability to verify the accuracy of over $24 million invoiced for 134,867 consulting hours worked is a concerning hindrance to ensuring the state is being invoiced correctly,” the report said.

Well, that’s an understatement.

The Enterprise Resource Planning Board, which is made up of representatives from the offices of the Governor, Auditor and Treasurer, was created to implement wvOASIS, and it’s evident this massive project got away from them. Newly elected Auditor J.B. McCuskey is trying to right the ship.

The state did not renew the contract with ISG and instead has cut a one-year deal with Dataview to finish the wvOASIS installation and train state workers to operate the system. “There was not a real push to train,” McCuskey said, adding that his office is now shifting emphasis from “consultants forever to consultants training state workers.”

The timing of the audit report is significant; it comes as the Governor and state lawmakers are struggling to balance next year’s budget. The concept of cutting government spending further has lost momentum, but this report reveals an area where poor management has cost the taxpayers millions.

UHC Pharmacist is Preceptor of the Year

Carlton “Sonny” Hoskinson Jr., Class of 1986, spends much of his time in his role as a clinical pharmacist helping educate future pharmacy professionals. He has been a pharmacist at United Hospital Center (UHC) in Bridgeport for 30 years and has been working with WVU student pharmacists almost the entirety of his career.

“I really enjoy helping students with these educational experiences because I feel it is an interesting way to help foster the learning process,” Hoskinson said.

Hoskinson is the director of Camp Catch Your Breath—a camp for children ages 8-13 with asthma—and has been involved with the organization for approximately 25 years. The specialty camp is staffed by medical professionals, such as nurses, respiratory therapists, pharmacists and a physician, and annually gives 70 children with asthma a summer camp experience that they might otherwise not be able to have.

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Our student pharmacists have the opportunity to complete a rotation at the camp with Hoskinson as their preceptor each summer. During this rotation, our students build their clinical skills through completing medication profiles, showing the children how to properly use their inhalers and nebulizers and answering any questions the children might have.

“By participating in Camp Catch Your Breath, the students get to see the outcomes that we as pharmacists might not see in outpatient settings,” Hoskinson said. “It’s really great when you listen and hear someone’s breathing clear up after a treatment and know that you were able to help them. I tell the students that, more than likely, they will not see the children again after camp, but you don’t know what kind of impact you are going to have on someone.

In pharmacy, we provide medication treatments, and we may not always see it, but we are helping a patient feel better and are giving them more quality time with their families.”

Hoskinson has received numerous positive responses from students about the uniqueness of the rotation. Several students have been inspired to further their education and complete hospital pharmacy residency programs, and some have even completed programs to become certified asthma educators.

In a rotation evaluation, one student stated, “Sonny demonstrates his commitment to our school and profession by consistently volunteering to accept students on rotation at both UHC and through his Asthma Camp rotation at Camp Catch Your Breath. Camp Catch Your Breath is a prominent example to Sonny’s willingness to lead and further our profession.”

Hoskinson hopes that student pharmacists see a more diverse picture of the profession of pharmacy when they complete rotations at Camp Catch Your Breath. He strives to provide students with memorable learning experiences and encourages them to get “hands-on” and involved in all aspects of the rotation.

Tiered Severance Tax Could Destroy Oil and Gas Industry

The Free Press WV

The Independent Oil and Gas Association of West Virginia (IOGAWV) provides a voice for West Virginia’s oil and natural gas industry — including producers who live, work, contribute to and cast their votes in West Virginia.

Despite what people may think or hear, producers in this state are experiencing the lowest natural gas pricing environment we have seen in generations. Combine that with increasing gas transportation and processing costs, regulatory compliance costs, operating costs, severance taxes and a flawed property tax formula, and many producers are operating in the red.

While producers are struggling to thrive, Governor Jim Justice now has proposed a tiered severance tax on natural gas that consists entirely of increases, beginning with a floor that matches the current 5 percent rate. This proposal provides absolutely no relief to an industry facing hard times and essentially “kicks us while we are down.”

Natural gas development poses the best short-term fix to our state’s current economic situation. Instead of creating jobs and improving the economy, as was the basis of Governor Justice’s campaign, this bill discourages growth, kills jobs and could crush an entire industry. This will drive investment for mineral development to surrounding states with more reasonable severance taxes and reduce the likelihood of royalty owners seeing any income from new wells being drilled.

Independent producers are strong-willed and resilient during tough times. Producers have done their part by cutting down drastically and becoming more economically efficient. The natural gas pipeline companies have done their part, seeking approvals of new projects and installing new infrastructure to get our natural gas to better markets. And just when forecasts are optimistic about the future of the industry, this bill comes into play, eliminating any potential gains achieved from the efforts of producers and pipeline companies. Proposing a tiered severance tax system during a time of historically low natural gas pricing proves that some of our elected officials do not understand the energy market. West Virginia producers are attempting to dig themselves out of an incredibly deep hole, but the governor is trying to take away the shovel.

It’s time for our legislators to do their part. I strongly urge the House of Delegates and Senate to reject the tiered severance tax proposal on natural gas.

Charlie Burd is executive director of the Independent Oil and Gas Association of West Virginia.

The Free Press WV

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