The Wall Street Journal - 04.03.2020

THE WALL STREET JOURNAL. ***** Wednesday, March 4, 2020 |A

chusetts. The Democratic-ma-

jority House of Representa-

tives, in turn, sent its general

counsel to back Mr. Clement’s

argument.

The outcome, however, may

have been presaged in January

2018 when Justice Brett Ka-

free to fire the director. The

Supreme Court then appointed

a renowned conservative law-

yer, Paul Clement, to defend

the structure of the CFPB, an

agency conceived by Demo-

cratic presidential candidate

Elizabeth Warren of Massa-

this law so that the consumers

would be better protected

against financial fraud.”

The Trump administration

refused to defend the CFPB

structure, and sent Solicitor

General Noel Francisco to ar-

gue that the president must be

A bipartisan trio of U.S.
senators pushed again for an-
swers on Google’s “Project
Nightingale,” saying the com-
pany evaded requests for de-
tails on its far-reaching data
tie-up with health giant As-
cension.
The senators, in a letter
Monday to St. Louis-based As-
cension, said they were put off
by the lack of substantive dis-
closure around the effort.
Project Nightingale was re-
vealed in November in a series
of Wall Street Journal articles
that described Google’s then-
secret engagement to collect
and crunch the personal
health information of millions
of patients across 21 states.
Sens. Richard Blumenthal
(D., Conn.), Bill Cassidy (R.,
La.), and Elizabeth Warren (D.,
Mass.) subsequently wrote to
theAlphabetInc. unit seeking
basic information about the
program, including the num-
ber of patients involved, the
data shared and who at Google
had access. The head of
Google Health, David Feinberg,
responded with a letter in De-
cember that largely stuck to
generalities, according to cor-
respondence reviewed by the
Journal.
“Though Google began its
response by telling us that the
company was ‘proud to pro-
vide more details on Google’s
work supporting Ascension,’
the response ultimately did
not provide us with all of the
information we asked for,” the
senators wrote in their new
letter to Ascension.
A Google spokeswoman de-
clined to comment Monday.
Dr. Feinberg told the Journal
in a January article that his
division’s efforts aim to help
patients by reducing paper-
work, facilitating communica-
tion among caregivers and
leading them to treatments.
Ascension earlier this year
fired an employee who had
reached out to media, lawmak-
ers and regulators with con-
cerns about Project Nightin-
gale, a person familiar with
the matter said. The employee,
who described himself as a
whistleblower, was told by As-
cension higher-ups that he
had shared information about
the initiative that was in-
tended to be secret, the per-
son said.
Nick Ragone, a spokesman
for Ascension—one of the
U.S.’s largest health-care sys-
tems with 2,600 hospitals,
doctors’ offices and other fa-
cilities—declined to say why
the employee in question was
fired. “We have never termi-
nated anyone for talking to
media/lawmakers/regula-
tors,” he said.
Mr. Ragone said Ascension
has “met with numerous
elected officials and staff over
the past few months on our
collaboration with Google,”
about “the work we’re doing
to transform the clinician ex-
perience and to improve pa-
tient outcomes.”
Many questions about Proj-
ect Nightingale remain unan-
swered, according to the Sen-
ate correspondence. The
senators say they still await
answers on whether patients
were proactively notified of
Google’s access or could opt
out; the full list of data
shared; what specific services
Google has promised to pro-
vide; and whether there has
been any breach of the data.
The Journal earlier re-
ported that tens of millions of
patient records would be
shared with Google under the
agreement.
The Department of Health
and Human Services Office for
Civil Rights separately began
an inquiry into what regula-
tors called the “mass collec-
tion of individuals’ medical re-
cords” and whether security
was sacrificed.
Dr. Feinberg, in his earlier
written response to senators,
said: “Google’s work with As-
cension is designed to adhere
to industry-wide regulations,
including HIPAA,” referring to
privacy protections under the
landmark Health Insurance
Portability and Accountability
Act of 1996. Dr. Feinberg
added, “We support HIPAA
compliance for certain Google
projects and services.” He
didn’t specify which.

BYROBCOPELAND

Senators

Irked by

Google’s

Response

States Can Charge

Immigrant ID-Theft

A divided Supreme Court on

Tuesday boosted the ability of

states to prosecute illegal immi-

grants for identity theft when

they provide false Social Secu-

rity numbers or other informa-

tion on job applications.

The court, in a 5-4 opinion

by Justice Samuel Alito, rein-

stated convictions obtained by

Kansas prosecutors against

three restaurant workers for

using other people’s Social Se-

curity numbers on forms given

to their employers.

The central question in the

case, Kansas v. Garcia, was

whether such state prosecu-

tions were barred by a provision

of federal immigration law that

says any information submitted

with federal work-authorization

forms can’t be used for state

law-enforcement purposes.

Justice Alito, writing for a

conservative majority, said the

answer was no. The mere fact

that Kansas law on identity

theft overlapped with federal

law “does not even begin to

make a case” that the state’s

prosecutorial efforts should be

pre-empted, he wrote.

“In the present cases, there

is certainly no suggestion that

the Kansas prosecutions frus-

trated any federal interests,”

Justice Alito said. Joining him

in the majority were Chief Jus-

tice John Roberts and Justices

Clarence Thomas, Neil Gorsuch

and Brett Kavanaugh.

The Trump administration

had sided with Kansas in the

case, arguing that Congress never

meant to carve out an immigra-

tion-related exception that would

prevent states from enforcing

their own identity-theft laws.

In dissent, Justice Stephen

Breyer, writing for the court’s

liberal wing, said U.S. immigra-

tion law gave federal authori-

ties the sole responsibility to

police fraud committed to ob-

tain eligibility to work.

The law “reserves to the

federal government—and thus

takes from the states—the

power to prosecute people for

misrepresenting material infor-

mation in an effort to convince

their employer that they are

authorized to work in this

country,” Justice Breyer wrote.

Joining him in dissent were

Justices Ruth Bader Ginsburg,

Sonia Sotomayor and Elena

Kagan.

—Brent Kendall

U.S. NEWS

Gymnastics Probe Takes New Turn

Investigators examine

if the sport’s former

U.S. head was involved

in financial misconduct

Simone Biles at an October competition. Investigators spoke to her mother as part of a probe involving the former head of USA Gymnastics. LIONEL BONAVENTURE/AGENCE FRANCE-PRESSE/GETTY IMAGES

and child-pornography charges.

Meanwhile, talks to settle

hundreds of civil claims against

USA Gymnastics over Nassar’s

abuse have become increas-

ingly bitter over a proposed of-

fer of $215 million from USA

Gymnastics that would end re-

lated claims against the U.S.

Olympic and Paralympic Com-

mittee and several individuals,

including Mr. Penny.

The proposal and dragging

on of the settlement negotia-

tions have prompted top Amer-

ican gymnasts to amplify their

complaints about what they

say is a lack of accountability

for the Nassar scandal. Ms.

Biles, the 2016 Olympic cham-

pion and expected face of the

2020 Games, and Aly Raisman,

a gold medalist in 2012 and

2016, excoriated USA Gymnas-

tics and the USOPC on Twitter

over the weekend.

“Ugh at the airport. Head-

ing to team camp. Still want

answers from USAG and

USOPC. Wish they BOTH

wanted an independent inves-

tigation as much as the survi-

vors&Ido.Anxiety high. Hard

not to think about everything

that I DON’T WANT TO THINK

ABOUT!!!” wrote Ms. Biles. Ms.

Raisman wrote: “The only way

for anyone to know what re-

ally happened is if someone

forces them to release ALL

documents & data to investi-

gate. HOW CAN WE MAKE

THIS HAPPEN?”

The meetings with the gym-

nasts’ families are part of a

sweeping investigation led by

the Justice Department’s

money-laundering and child-

exploitation units, the U.S. at-

torney’s office in Washington,

D.C., the Internal Revenue Ser-

vice, the FBI and Homeland

Security Investigations. The

investigation, now more than

a year old, grew out of reports

of widespread sexual abuse

across the U.S. Olympic com-

munity.

At first, investigators cast a

wide net, seeking information

from a range of entities—in-

cluding the USOPC itself—

about the Olympic system and

its response to sexual abuse

allegations, people familiar

with the investigation said. In

recent months, the investiga-

tion has focused on potential

business and financial miscon-

duct in a few specific sports

organizations, including USA

Gymnastics.

Federal investigators in Jan-

uary interviewed Nellie Biles,

Simone’s mother, about her in-

teractions with Mr. Penny, ac-

cording to a person familiar

with the investigation. Ms.

Biles’s agent, Janey Miller, con-

firmed the interview and said,

“Simone and her family hope

that this investigation will hold

to account those who failed so

many families, including the

Biles, who placed their daugh-

ters in the trust of a system

that betrayed them.”

Rita Wieber, mother to 2012

Olympic gold medalist Jordyn

Wieber, says she told investiga-

tors in a September interview

that Mr. Penny acted as her

daughter’s agent from late 2011

until the summer of 2012. Mr.

Penny specifically dissuaded

the Wiebers from signing with

an independent sports agent,

warning them about demands

on the gymnast’s time as she

sought to make the 2012 team,

which was selected by USA

Gymnastics officials, Rita Wie-

ber said in an interview with

the Journal.

Federal prosecutors and in-

vestigators conducting a wide-

ranging criminal inquiry of U.S.

Olympic sports have inter-

viewed the parents of star

American gymnasts, including

Simone Biles and Jordyn Wie-

ber, as they explore whether

there were financial impropri-

eties involving the former head

of USA Gymnastics, people fa-

miliar with the investigation

said.

The gymnasts’ parents have

told investigators that Steve

Penny, previously the chief ex-

ecutive of USA Gymnastics, had

sought to act as Ms. Biles’s

agent, and did act as Ms. Wie-

ber’s, while he ran the non-

profit governing body and

managed its sponsorship deals,

according to people familiar

with the interviews.

Mr. Penny declined to com-

ment on the federal criminal

investigation. His lawyers have

previously said their client had

never been anyone’s agent or

suggested being one. They said

he only sought to help athletes

and that he never received any

money related to any sponsor-

ship relationship.

USA Gymnastics selected

athletes for all major competi-

tions, and acting as an agent

for athletes could raise ques-

tions about whether it was

treating non-represented ath-

letes fairly. In addition, Mr.

Penny’s compensation grew

along with his success in win-

ning marketing deals for the

organization, creating a poten-

tial conflict over whether deals

cut were entirely in the inter-

ests of the represented ath-

letes. An agent arrangement

could also run afoul of federal

laws governing nonprofit or-

ganizations.

The federal investigation is

one of several to grow out of

the sexual-abuse scandal in-

volving national gymnastics

team physician Larry Nassar,

who is currently serving an ef-

fective life sentence for assault

BYLOUISERADNOFSKY

ANDREBECCADAVISO’BRIEN

vanaugh, then a federal ap-

peals judge, filed a dissent in a

separate case upholding the

CFPB’s configuration. The dis-

sent contended that the for-

cause requirement for remov-

ing the director marred a

constitutional design that

helped “safeguard liberty” by

assigning the president “au-

thority to supervise, direct,

and remove at will subordi-

nate officers in the Executive

Branch.”

The remedy, he wrote then,

was eliminating the for-cause

provision, but otherwise leav-

ing the CFPB intact.

At Tuesday’s session, Jus-

tice Kavanaugh elaborated on

his concerns. “The problem re-

ally reveals itself,” he said,

when a new president is stuck

with a holdover CFPB director

who may have “a wildly differ-

ent conception of consumer fi-

nancial protection.”

President Trump, who has

sought to relax some consumer

protections pursued by his pre-

decessor, faced that situation

until Obama-appointee Richard

Cordray stepped down as CFPB

director in November 2017.

The term of the current di-

rector, Kathy Kraninger, expires

in 2023, meaning she would be

running the CFPB well into the

next presidential term unless

she were to resign or be re-

moved for bad behavior.

The justices focused less on

the case’s near-term political

consequences, though, than

their different understandings

of the constitutional structure.

Justice Elena Kagan rebut-

ted the focus on removal au-

thority that is central to the

conservative theory of the

president’s exclusive power

over the executive branch.

“This is a Constitution that

doesn’t say anything about re-

moval,” she said. “Indeed, it

doesn’t say anything very

much about the structure or

organization of the govern-

ment in general,” suggesting

the framers left that to the

elected branches to decide.

WASHINGTON—The Su-

preme Court indicated Tuesday

that it may curtail the indepen-

dence of an eight-year-old

agency created to protect con-

sumers from abusive financial

practices, but showed little in-

clination to eliminate the Con-

sumer Financial Protection Bu-

reau outright, as a California

law firm had asked.

The case centers on the bu-

reau’s structure: Its director is

nominated by the president

and confirmed by the Senate

for a five-year term, but can

only be removed for “ineffi-

ciency, neglect of duty, or mal-

feasance in office.” Conserva-

tives argue that limit impinges

on the president’s constitu-

tional power over the executive

branch, which they say must

include authority to remove of-

ficials at will.

Lower courts have upheld

the CFPB’s structure, citing

Supreme Court precedents

that rejected challenges to

other executive-branch agen-

cies that Congress partially in-

sulated from political inter-

ventions, including the Federal

Trade Commission and, under

a now-expired law, indepen-

dent counsels.

Kannon Shanmugam, repre-

senting Seila Law LLC of Or-

ange, Calif., which is under in-

vestigation by the agency for

abusive telemarketing prac-

tices in its debt-relief business,

told the justices that such rul-

ings shouldn’t be extended to

cover the CFPB. He argued the

bureau’s structure was so

flawed that the agency should

be shut down and, at mini-

mum, the court void the civil

investigative demand the CFPB

served on his client.

Justice Ruth Bader Ginsburg

had a sharp response to the

plaintiff’s argument that the

director’s power infringes on

the civil liberty of those tar-

geted by the agency’s enforce-

ment actions. “Now whose lib-

erty are we speaking of?” she

said. “What about the consum-

ers? I mean, Congress passed

BYJESSBRAVIN

ANDYUKAHAYASHI

Court Weighs Consumer Agency’s Structure

Kathy Kraninger, director of the Consumer Financial Protection Bureau, in 2019.

Lawyers deny Steve

Penny acted as an

agent while heading

USA Gymnastics.

ANDREW HARRER/BLOOMBERG NEWS

 Justices signal curbing of SEC

remedies....................................... B