This story was co-published with The New York Times.
President Trump entered office pledging to cut red tape, and within weeks, he ordered his administration to assemble teams to aggressively scale back government regulations.
But the effort — a signature theme in Trump's populist campaign for the White House — is being conducted in large part out of public view and often by political appointees with deep industry ties and potential conflicts.
Most government agencies have declined to disclose information about their deregulation teams. But ProPublica and The New York Times identified 71 appointees, including 28 with potential conflicts, through interviews, public records and documents obtained under the Freedom of Information Act.
Some appointees are reviewing rules their previous employers sought to weaken or kill, and at least two may be positioned to profit if certain regulations are undone.
The appointees include lawyers who have represented businesses in cases against government regulators, staff members of political dark money groups, employees of industry-funded organizations opposed to environmental rules and at least three people who were registered to lobby the agencies they now work for.
At the Education Department alone, two members of the deregulation team were most recently employed by pro-charter advocacy groups or operators, and one appointee was an executive handling regulatory issues at a for-profit college operator.
So far, the process has been scattershot. Some agencies have been soliciting public feedback, while others refuse even to disclose who is in charge of the review. In many cases, responses to public records requests have been denied, delayed or severely redacted.
The Interior Department has not disclosed the correspondence and calendars for its team. But a review of more than 1,300 pages of handwritten sign-in sheets for guests visiting the agency's headquarters in Washington found that appointees had met regularly with industry representatives.
Over a four-month period, from February through May, at least 58 representatives of the oil and gas industry signed their names on the agency's visitor logs before meeting with appointees.
The EPA also rejected requests to release the appointment calendar of the official leading its team — a former top executive for an industry-funded political group — even as she met privately with industry representatives.
And the Defense Department and the Department of Homeland Security provided the titles for most appointees to their review teams, but not names.
When asked for comment about the activities of the deregulation teams, the White House referred reporters to the Office of Management and Budget.
Meghan Burris, a spokeswoman there, said: "As previous administrations have recognized, it's good government to periodically reassess existing regulations. Past regulatory review efforts, however, have not taken a consistent enough look at regulations on the books."
With billions of dollars at stake in the push to deregulate, corporations and other industry groups are hiring lawyers, lobbyists and economists to help navigate this new avenue for influence. Getting to the front of the line is crucial, as it can take years to effect regulatory changes.
"Competition will be fierce," the law firm Clark Hill, which represents businesses pitching the Environmental Protection Agency, said in a marketing memo. "In all likelihood, interested parties will need to develop a multi-pronged strategy to expand support and win pre-eminence over competing regulatory rollback candidates."
Jane Luxton, a lawyer at the firm, said she advised clients to pay for economic and legal analyses that government agencies, short on staff, could use to expedite changes. She declined to identify the clients.
"You may say this is an agency's job, but the agencies are totally overloaded," Luxton said.
On a cloudy, humid day in March, Laura Peterson, a top lobbyist for Syngenta, arrived at the headquarters for the Interior Department. She looped the letter "L" across the agency's sign-in sheet.
Her company, a top pesticide maker based in Switzerland, had spent eight years and millions of dollars lobbying the Obama administration on environmental rules, with limited success.
But Peterson had an in with the new administration.
Scott Cameron, newly installed at the Interior Department and a member of its deregulation team, had just left a nonprofit he had founded. He had advocated getting pesticides approved and out to market faster. His group counted Syngenta as a financial partner.
The meeting with Peterson was one of the first Cameron took as a new government official.
Neither side would reveal what was discussed. "I'm not sure that's reporting information I have to give you," Peterson said.
But lobbying records offered clues.
Syngenta has been one of several pesticide manufacturers pushing for changes to the Endangered Species Act. When federal agencies take actions that may jeopardize endangered animals or plants, they are generally supposed to consult with the Interior Department, which could raise objections.
For decades, the EPA largely ignored this provision when approving new pesticides. But recently, a legal challenge from environmental groups forced its hand — a change that affected Syngenta.
Pesticide lobbyists have been working behind the scenes at agencies and on Capitol Hill to change the provision. Companies have argued that they should be exempt from consulting with the Interior Department because they already undergo EPA approval.
Along with spending millions of dollars on lobbying, they have funded advocacy groups aligned with their cause. Cameron's nonprofit, the Reduce Risks From Invasive Species Coalition, was one such group for Syngenta.
The organization says on its website that its goals include reducing "the regulatory burden of the Endangered Species Act on American society by addressing invasive species." One way to do that is to use pesticides. The nonprofit's mission includes creating "business opportunities for commercial products and services used to control invasive species."
Because donations are not publicly reported, it is unclear how much Syngenta has contributed to Cameron's organization, but his group has called the pesticide company one of its "generous sponsors."
Cameron also served on a committee of experts and stakeholders, including Syngenta, that advised the federal government on decisions related to invasive species. At a committee event last July, he said that one of his priorities was "getting biocontrol agents to market faster," according to meeting minutes.
Paul Minehart, a Syngenta spokesman, said: "Employees regularly engage with those in government that relate to agriculture and our business. Our purpose is to balance serving the public health and environment with enabling farmers' access to innovation."
A spokeswoman for the Interior Department did not respond to questions about how Cameron's relationship with Syngenta might influence his review of regulations.
Under the law, members of the Trump administration can seek ethics waivers to work on issues that overlap with their past business careers. They can also formally recuse themselves when potential conflicts arise.
In many cases, the administration has refused to say whether appointees to Trump's deregulation teams have done either.
One such appointee is Samantha Dravis, the chairwoman of the deregulation team at the EPA, who was a top official at the Republican Attorneys General Association. Dravis was also president of the Rule of Law Defense Fund, which brought together energy companies and Republican attorneys general to file lawsuits against the federal government over Obama-era environmental regulations.
The Republican association's work has been criticized as a vehicle for corporate donors to gain the credibility and expertise of state attorneys general in fighting federal regulations. Donors include the American Petroleum Institute, the energy company ConocoPhillips and the coal giant Alpha Natural Resources.
The Republican association also received funding from Freedom Partners, backed by the conservative billionaires Charles G. and David H. Koch. Dravis worked for that group as well, which recently identified regulations it wants eliminated. Among them are EPA rules relating to clean-water protections and restrictions on greenhouse gas emissions.
Liz Bowman, an EPA spokeswoman, declined to say whether Dravis had recused herself from issues dealing with previous employers or their backers, or had discussed regulations with any of them.
"As you will find when you receive Samantha's calendar, she has met with a range of stakeholders, including nonprofits, industry groups and others, on a wide range of issues," Bowman said.
Bowman said the calendar could be obtained through a public records request. ProPublica and The Times had already filed a request for records including calendars, but the agency's response did not include those documents. (An appeal was filed, but the calendar has not yet been released.)
"We take our ethics responsibilities seriously," Bowman said. "All political staff have had an ethics briefing and know their obligations."
Addressing the agency's regulatory efforts, she said, "We are here to enact a positive environmental agenda that provides real results to the American people, without unnecessarily hamstringing our economy."
At the Agriculture Department, the only known appointee to the deregulation team is Rebeckah Adcock. She previously lobbied the department as a top executive both at CropLife America, a trade association for pesticide makers, and the American Farm Bureau Federation, a trade group for farmers.
The department deals with many issues involving farmers, including crop insurance and land conservation rules, but it would not disclose whether Adcock had recused herself from discussions affecting her past employers.
At the Energy Department, a member of the deregulation team is Brian McCormack, who formerly handled political and external affairs for Edison Electric Institute, a trade association representing investor-owned electrical utilities.
While there, McCormack worked with the American Legislative Exchange Council, an industry-funded group. Both organizations fought against rooftop solar policies in statehouses across the country. Utility companies lose money when customers generate their own power, even more so when they are required to pay consumers who send surplus energy back into the grid.
Though the Energy Department does not directly regulate electrical utilities, it does help oversee international electricity trade, the promotion of renewable energy and the security of domestic energy production. After joining the department, McCormack helped start a review of the nation's electrical grid, according to an agency memo.
Clean-energy advocates fear the inquiry will cast solar energy, which can fluctuate, as a threat to grid reliability. Such a finding could scare off state public utility commissions considering solar policies and serve as a boon for electrical utilities, said Matt Kasper, research director at the Energy and Policy Institute, an environmental group.
Disclosure records show that while McCormack was at Edison, the trade group lobbied the federal government, including the Energy Department, on issues including grid reliability.
The department would not answer questions about McCormack's involvement with those issues.
Across the government, at least two appointees to deregulation teams have been granted waivers from ethics rules related to prior jobs, and at least nine others have pledged to recuse themselves from issues related to former employers or clients.
Some of the recusals involve appointees at the Small Business Administration and the Education Department, including Bob Eitel, who leads the education team and was vice president for regulatory legal services at an operator of for-profit colleges.
Another recusal involves Byron Brown, an EPA appointee who is married to a senior government affairs manager for the Hess Corporation, the oil and gas company.
Hess was fined and ordered to spend more than $45 million on pollution controls by the EPA during the Obama administration because of alleged Clean Air Act violations at its refinery in Port Reading, N.J. Disclosure records show that Brown's wife, Lesley Schaaff, lobbied the EPA last year on behalf of the company.
An EPA spokeswoman declined to say whether Brown or Schaaff owned Hess stock, though an agency ethics official said Brown had recused himself from evaluating regulations affecting the company.
The agency declined to say whether Brown would also recuse himself from issues affecting the American Petroleum Institute, where his wife's company is a member. The association has lobbied to ease Obama-era natural gas rules, complaining in a recent letter to Brown's team about an "unprecedented level of federal regulatory actions targeting our industry."
Before being selected to lead the deregulation team at the Department of Housing and Urban Development, Maren Kasper was a director at Roofstock, an online marketplace for investors in single-family rental properties. Financial disclosure records show Kasper owned a stake in the company worth up to $50,000.
Changes at HUD could increase investor interest in rental homes, affecting a company like Roofstock. The agency, for example, oversees the federal government's Section 8 subsidies program for low-income renters.
Ethics officials allowed Kasper to keep her stake, but she pledged not to take actions that would affect it. (A spokesman for HUD said Kasper's tenure on the deregulation task force has since ended.)
One by one, scientists, educators and environmental activists approached the microphone and urged government officials not to weaken regulations intended to protect children from lead.
The forum, run by the EPA in a drab basement meeting room in Washington, was part of the agency's push to identify regulations that were excessive and burdensome to businesses.
Few businesspeople showed up. As public hearings on regulations have played out in recent weeks, many industry and corporate representatives have instead met with Trump administration officials behind closed doors.
Still, the EPA has asked for written comments and held about a dozen public meetings. The agency has received more than 467,000 comments, many of them critical of potential rollbacks, but also some from businesses large and small pleading for relief from regulatory costs or confusion.
After a quiet moment at the meeting to discuss lead regulations, the owner of a local painting company, Brian McCracken, moved to the microphone.
McCracken was frustrated by what he described as costly rules that forced him to test for lead-based paint in homes before he could begin painting. Each test kit costs about $2, and he may need six per room. If a family then declines to hire him, those costs come out of his pocket.
"I don't think anyone is sitting here saying that lead-based dust does not hurt children," he said. "That's not what we are talking about. What the contractor needs is a better way to test."
His voice quavered: "Why do I have to educate the general public about the hazards that generations before me created? It doesn't make sense at all."
Trump is not the first president to take on such frustrations.
President Bill Clinton declared the federal government was failing to regulate "without imposing unacceptable or unreasonable costs on society." He assigned Vice President Al Gore to collect agencies' suggestions for rules that should go. One rule dictated how to measure the consistency of grits.
President George W. Bush's regulatory overhaul focused more on how new regulations were created. The administration installed a political appointee inside each agency who generally had to sign off before any significant new rule could be initiated. At the EPA for a time, that official came from an industry-funded think tank.
President Barack Obama ordered regular updates from each agency about the effectiveness of rules already on the books.
"When you raise the profile, when it's clearly an executive priority, it gets attention," said Heather Krause, director of strategic issues at the Government Accountability Office, the main auditor of the federal government. According to the auditor's analysis, the effect under Obama was mostly to clarify and streamline rules, not eliminate them.
Like Bush, Trump has empowered political appointees. Though some agencies have included career staff members on their review teams, an executive order from Trump creating the teams does not require it — nonpolitical employees are generally believed to be more wedded to existing rules. And like Obama, Trump has imposed regular reporting requirements.
But Trump, who spent his business career on the other side of government regulations, has put an emphasis on cutting old rules.
The same day he signed the executive order initiating the review, he addressed a large crowd of conservative activists at a Maryland convention center.
"We have begun a historic program to reduce the regulations that are crushing our economy — crushing," Trump said. "We're going to put the regulations industry out of work and out of business."
Amit Narang, a regulatory expert at the liberal advocacy group Public Citizen, said Trump's decision to create teams of political appointees — formally known as regulatory reform task forces — should make it easier for the White House to overcome bureaucratic resistance to his rollback plans.
"To the extent there's a deep state effect in this administration," Narang said, "the task force will be more effective in trying to get the agenda in place."
The New York Times' Kitty Bennett contributed reporting to this story.
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This article was produced in partnership with The New York Times.
More than a decade ago, Italy tried a novel approach to help bring down drug costs: asking pharmaceutical companies to return money to the national health system if some of their medicines failed to work as expected. The effort largely flopped.
The Trump administration is now considering whether to encourage a similar approach. Pharmaceutical executives presented the idea to President Trump at a meeting in January, and the general concept was raised last month in a draft executive order aimed at combating rising drug prices.
A number of drug companies have recently entered into such deals, which they call outcomes-based contracts. Merck has done so for its diabetes drugs Januvia and Janumet, promising to return money if patients' diabetes did not meet goals for control. And Novartis, which makes the heart failure treatment Entresto, is refunding money if too many patients taking the drug are hospitalized. In more typical deals, drugmakers pay rebates to insurers based on the number of drugs sold and to gain easier access for members to their products.
But there is scant evidence this new approach lowers costs. Pharmaceutical companies still set the drug's list price and have to agree to the criteria upon which they will be measured. Some experts say such arrangements are a ploy to deflect attention from substantive changes that could hurt companies' bottom lines, such as allowing Medicare to negotiate drug prices. Moreover, the savings don't always trickle down to consumers.
"Most of them get launched with great fanfare," said Dr. Steve Miller, the chief medical officer at Express Scripts, which manages the drug benefits of more than 80 million Americans. "But then you never hear anything about it after the launch because most of them collapse under their own weight."
In a recent note to investors, David Maris, an analyst at Wells Fargo, described the approach as a "carnival game" and said he did not know of any such arrangements "where a drug company did not consider it a win for them."
Robert Zirkelbach, a spokesman for the Pharmaceutical Research and Manufacturers of America, the industry trade group, said the approach was in keeping with a trend toward paying doctors and hospitals for the quality of care they deliver rather than the number of services they provide.
"We recognize that as science is moving forward, the way we pay for medicines needs to evolve as well," Zirkelbach said. The group has been promoting the idea in an advertising campaign.
To understand how these deals work, consider the one that the drugmaker Amgen made with Harvard Pilgrim Health Care, a nonprofit insurer in Massachusetts and one of the insurers to most aggressively test the concept. It has entered into at least eight such deals over the past two years. This spring, Amgen agreed to pay a full refund to Harvard Pilgrim if patients who took its pricey new cholesterol drug, Repatha, suffered a heart attack or stroke. Repatha is intended for patients with very high cholesterol levels, for which cheaper drugs, known as statins, do not work.
As part of such deals, insurers eased restrictions on which patients could gain access to the drug, said Dr. Joshua J. Ofman, a senior vice president at Amgen. Sales of Repatha and similar drugs have disappointed in part because insurers have been reluctant to pay for them given their price. Repatha can cost up to $16,000 per year.
If Harvard Pilgrim patients taking Repatha have a heart attack or stroke, they share in the refund, getting back all out-of-pocket payments that they have made toward the drug, said Dr. Michael Sherman, chief medical officer at Harvard Pilgrim.
Doctors who prescribe Repatha said the deals do not affect how they treat patients. "We're completely agnostic to it," said Dr. Frederic S. Resnic, chairman of cardiovascular medicine at the Lahey Hospital & Medical Center in Burlington, Massachusetts, who sees patients with Harvard Pilgrim insurance. The drugs are so costly that doctors still only prescribe them when patients really need them, he said.
Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, is skeptical. He said the pharmaceutical industry is conflating setting drug prices based on the value they bring to patients and the health care system, which he supports, with negotiating givebacks when patients don't respond to drugs, which he sees as too little, too late.
The arrangements, he said, carried "bells and whistles" that made them look good in theory. "But as long as you control all the contract terms, it can be a lot of optics but no substance," he said.
Bach and others say the pharmaceutical industry is using this approach to justify seeking major changes to federal regulations that could benefit them even more — including rolling back a requirement that Medicaid programs for the poor get the lowest drug prices, and another that bars companies from giving kickbacks to health providers. The industry says the changes are needed to allow more flexibility in the type of deals they can offer.
Drug companies and insurers touted these contracts when they were announced, but participants in several deals either declined to comment recently or provided little information about their programs.
At a conference last month in Virginia, a senior director with Prime Therapeutics, a pharmacy benefit manager, offered a blunt assessment of such contracts, saying they were not cost-effective. But in a phone interview, his boss, David Lassen, the chief clinical officer, was a bit more measured, saying that though the deals carry promise, the work to track patient outcomes is expensive and burdensome. "In their current state, where they're falling short is where you look at the return on investment," Lassen said.
Sherman at Harvard Pilgrim said the deals would not work for every drug and that drugmakers typically showed no interest when there were no competing brand-name drugs that worked in a similar way.
Some pharmaceutical executives acknowledge the model should not be seen as a panacea. Leonard S. Schleifer, the chief executive of Regeneron, questioned how such pricing would work for a drug like Dupixent, an eczema drug his company makes that was approved this year.
"Are we going to start calculating the surface area of the rash that's improved?" said Schleifer, whose company has entered into some outcomes-based deals for Praluent, a competitor to Repatha.
Other drugmakers said proof that the concept works can be seen in the interest they are getting from insurers. "No one is going to enter into these contracts if they don't believe the prices they are paying are of good value," Ofman, of Amgen, said.
Italy's experience is instructive.
Beginning in 2006, the Italian National Health System negotiated deals with drugmakers for certain medicines. It required doctors to track whether their patients were meeting certain goals, and if they were not, the pharmaceutical company would reimburse a share of what it was paid.
In 2015, researchers studying Italy's experiment concluded that the amount of money refunded by the companies was "trifling."
"The performance of this system was very, very poor," said Filippo Drago, director of the Department of Biomedical and Biotechnological Sciences at the University of Catania in Italy and an author of the study. He attributed the low savings to the administrative complexity of tracking the results and said drug companies fought efforts to reimburse for bad outcomes.
Italy now asks drug companies to provide some of their products for free — at first. Manufacturers are only paid once results are demonstrated.
"This system is working very well," Drago said.
Correction, July 10, 2017: An earlier version of this article referred incorrectly to deals between drugmakers and health plans for coverage of drugs like Repatha. The deals made it easier for patients to gain access to Repatha through their insurer; they did not ease restrictions on which patients were prescribed the drug.
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This story was co-published with The Real Deal.
In April 2016, as Donald Trump was on the cusp of clinching the Republican nomination for the White House, he sold two luxury condos near Manhattan's Central Park for less than half the price his company had said they were worth. The lucky buyer: Trump's son, Eric.
Such family-friendly deals would normally incur hundreds of thousands of dollars in gift taxes.
But in this case, Trump appears unlikely to have been on the hook for anywhere near that, thanks to benefits only available to real estate developers.
Eric Trump bought the two condos on the two top floors of the Trump Parc East building at 100 Central Park South for $350,000 each. Trump Organization filings show that, as of February 2016 — two months before Trump sold the apartments to Eric — the condos were priced at $790,000 and $800,000. A similar one-bedroom condo on a lower floor at the same building sold for $690,000 in 2014.
The transactions illustrate the unique advantages that real estate developers like Trump have when passing down valuable assets between generations.
"Not everyone has the opportunity to avoid gift taxes, just developers with developer units," said Beth Shapiro Kaufman, an estate planning attorney and president at Caplin & Drysdale in Washington, D.C. "The biggest game in gift taxes is valuation issues."
An owner who sells real estate for less than it's worth would typically have to pay gift tax on the difference between the sales price and the true market value. Any personal gifts that are worth more than $14,000 in a year are subject to up to 40 percent in federal taxes.
But as the building's developer selling the units for the first time, Trump had lots of flexibility within the law to determine the value of the apartments.
"This is really, really primo real estate," said Bob Lord, a tax attorney who reviewed the transaction records at ProPublica's request. "Why would you show a sale at $350,000 other than to play games for tax purposes?"
The units were originally rent regulated, which would typically lower the value of the apartments significantly.
New York City records state that the condos are no longer rent regulated. It's not clear when they were deregulated, but the result is that Eric Trump will likely be able to sell the apartments at significantly higher prices. It's also unclear if anyone currently lives in the condos. The younger Trump bought another, much larger, apartment in the building for $2 million in 2007.
It's ultimately unclear how much, if any, taxes Trump paid on the transactions. The Trump Organization, the White House and Eric Trump did not respond to requests for comment.
But other taxes paid on the transaction suggest gift taxes were not paid. Trump paid a total of $13,000 in city and state transfer taxes, New York City property records show. Those transfer taxes, according to a spokeswoman for the city's Department of Finance, are not usually paid when "bona fide gifts" are involved.
Also, when a sale is reported as a gift, buyers and sellers typically disclose in transfer records that the sale is taking place between two relatives. The Trumps did not.
Trump has said that he, like many Americans, wants to keep his taxes at a minimum. "I fight like hell and pay as little as possible," he told CBS' "Face the Nation" in August 2015. Trump has proposed repealing the estate tax entirely.
The condo sales were disclosed in President Trump's 2017 federal financial disclosure, which was released by the U.S. Office of Government Ethics last month. The buyers were listed as two limited liability companies. After we asked readers to help us analyze the documents, a reader flagged the deals and noted that the LLCs listed as the buyers were managed by Eric Trump.
Trump bought the Central Park South building in 1981 and later converted it into condos. The building's 80 units were initially filled mostly with wealthy rent-regulated tenants who had the right to keep renewing their leases at below-market rates as long as they chose to remain in the building. That interfered with Trump's plan to tear down the building and replace it with a condo project.
Under New York laws, developers who convert apartment buildings into condos must disclose to the New York state attorney general how much they're looking to sell units for to existing tenants as well as to the public.
Trump's 1997 disclosure to the attorney general, known as an offering plan, shows that units 13G and 14G were both rent regulated and originally listed for sale at $245,000 and $250,000, respectively. Over time, as market prices moved higher, Trump filed frequent amendments raising the listed prices, a standard practice for developers. ProPublica and The Real Deal obtained the offering plan and amendments through a public-records request.
Trump reported nearly $3.2 million in revenue in 2016 and the first half of 2017 from condo sales using the company, Trump CPS LLC. He resigned as president of that company on Jan. 19, the day before his inauguration.
As with the president's other assets, Trump CPS LLC is held by the Donald J. Trump Revocable Trust and is managed by one of Trump's lawyers and the president's sons. Trump put his businesses under the trust in response to criticism about conflicts. As we have reported, President Trump can take funds from the trust any time.
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