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National
Zuckerberg discloses Facebook working with Russia probe

WASHINGTON — Facebook CEO Mark Zuckerberg disclosed Tuesday his company is “working with” special counsel Robert Mueller in the federal probe of Russian interference in the 2016 presidential campaign — and working hard to change its own operations after the harvesting of users’ private information by a Trump campaign-affiliated data-mining company.

The founder of the social media giant publicly apologized for his company’s errors in failing to better protect the personal information of its millions of users, a controversy that has brought a flood of bad publicity and sent the company’s stock value plunging. He seemed to achieve a measure of success: Facebook shares surged 4.5 percent for the day, the biggest gain in two years.

Zuckerberg told the Senate Judiciary and Commerce committees that he has not been personally interviewed by Mueller’s team, but “I know we’re working with them.” He offered no details, citing a concern about confidentiality rules of the investigation.

Earlier this year Mueller charged 13 Russian individuals and three Russian companies in a plot to interfere in the 2016 presidential election through a social media propaganda effort that included online ad purchases using U.S. aliases and politicking on U.S. soil. A number of the Russian ads were on Facebook.

During Tuesday’s at-times- contentious hearing, Zuckerberg said it had been “clearly a mistake” to believe the data-mining company Cambridge Analytica had deleted user data that it had harvested in an attempt to sway elections. He said Facebook had considered the data collection “a closed case” because it thought the information had been discarded.

Facebook also didn’t alert the Federal Trade Commission, Zuckerberg said, and he assured senators the company would handle the situation differently today.

He began a two-day congressional inquisition with a public apology for the way Facebook handled the data-mining of its users’ data. He took responsibility for failing to prevent Cambridge Analytica, which was affiliated with Donald Trump’s presidential campaign, from gathering personal information from 87 million users.

Separately, the company began alerting some of its users that their data was gathered by Cambridge Analytica. A notification that appeared on Facebook for some users Tuesday told them that “one of your friends” used Facebook to log into a now-banned personality quiz app called “This Is Your Digital Life.” The notice says the app misused the information, including public profiles, page likes, birthdays and current cities, by sharing it with Cambridge Analytica.

Zuckerberg had apologized many times already, to users and the public, but this was the first time before Congress. He also is to testify Wednesday before the House Energy and Commerce Committee.

Sen. John Thune, R-S.D., the Commerce Committee chairman, told Zuckerberg his company had a 14-year history of apologizing for “ill-advised decisions” related to user privacy. “How is today’s apology different?” Thune asked.

“We have made a lot of mistakes in running the company,” Zuckerberg responded. “I think it’s pretty much impossible, I believe, to start a company in your dorm room and then grow it to be at the scale that we’re at now without making some mistakes.”

Zuckerberg said Facebook is going through “a broader philosophical shift in how we approach our responsibility as a company.” He said the company needs to take a “more proactive role” that includes ensuring the tools it creates are used in “good and healthy” ways.

Sen. Orrin Hatch, R-Utah, said Zuckerberg’s appearance marked the most intense hearing for a tech company since entrepreneur and businessman Bill Gates testified before Congress in March 1998.

In the hearings, Zuckerberg is trying to both restore public trust in his company and stave off federal regulations that some lawmakers have floated. In his opening statement, he also apologized for his company’s involvement in facilitating fake news and Russian interference in the elections.

Democratic Sen. Bill Nelson of Florida said he believes Zuckerberg was taking the congressional hearings seriously “because he knows there is going to be a hard look at regulation.”

Democrats like Nelson have argued that federal laws might be necessary to ensure user privacy. Republicans have yet to get behind any such legislation, but that could change.

Sen. Lindsey Graham, R-S.C., asked Zuckerberg if he would be willing to work with lawmakers to examine what “regulations you think are necessary in your industry.”

Zuckerman responded, “Absolutely.”

And Texas Sen. John Cornyn, a member of the Judiciary panel and the No. 2 Republican in the Senate, appeared open to regulation in a speech ahead of the hearing. Cornyn said apologies are “not enough” and suggested legislation could eventually be needed to give consumers more control over their data privacy.

“This is a serious matter, and I think people expect us to take action,” Cornyn told reporters after his speech.

At the hearing, Zuckerberg said, “We didn’t take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here.”

After resisting previous calls to testify, Zuckerberg agreed to come to Capitol Hill this month after reports surfaced — and the company confirmed — that Cambridge Analytica had gathered Facebook users’ data. Zuckerberg said his company has a responsibility to make sure that doesn’t happen again.

He acknowledged that the company was too slow to respond to Russian election interference and said it was “working hard to get better.” The company has said that as many as 146 million people may have received information from a Russian agency that’s accused of orchestrating much of the cyber meddling in the election.

He outlined steps the company has taken to restrict outsiders’ access to people’s personal information. He also said the company is investigating every app that had access to a large amount of information before the company moved to prevent such access in 2014 — actions that came too late in the Cambridge Analytica case.


Carolyn Kaster, Associated Press 

Life-sized cutouts depicting Facebook CEO Mark Zuckerberg wearing "Fix Fakebook" T-shirts are displayed by advocacy group, Avaaz, on the South East Lawn of the Capitol on Capitol Hill in Washington, Tuesday.


Local
Consultant: Fort Edward, Hudson Falls school merger could net $44 million in special aid

FORT EDWARD — If the Fort Edward and Hudson Falls school districts were to merge, the combined district would qualify for $44 million in special reorganization aid over the next 14 years, according to an analysis from a consultant.

The state would also pay 95 percent of any new building projects in the merged district, according to Jerry Steele of the Capital Area School District Association.

Fort Edward hired Steele to perform the study at a cost of $4,850 because it is facing fiscal challenges due to the loss of revenue from the shutdown of the General Electric Co. dewatering plant associated with the Hudson River dredging operation.

Merger study

Fort Edward school officials stressed that no decisions have been made about the district’s future.

“We want to have information so we can make a choice, if and when the time comes,” said Superintendent of Schools Daniel Ward.

In a roughly hour-long presentation, Steele outlined the issues facing the roughly 480-student district. By analyzing birth rates and enrollment trends, he projected that the school’s population would decrease to 448 students by the 2022-2023 school year.

Steele also said the district would face a gap between revenues and expenses, assuming no changes. The 2017-2018 budget actually is projecting a surplus of over $8,000. However, he said that would change to a $107,000 shortfall by the 2021-2022 school year.

If that gap is not closed, the district would have to tap fund balance to plug the hole.

The assessment of the former dewatering plan properties is a big question looming over the district. The tentative assessment of all village property would decrease its value from $139 million to $112 million. That assessment drop alone would increase the tax rate by $5.17 per $1,000 of assessed valuation, according to Steele.

Hudson Falls has been identified as a merger partner for Fort Edward dating back to a 1958 state master plan, according to Steele.

“It was right at a time when a lot of centralizations were taking place,” he said.

Steele speaks from personal experience, as he was the last superintendent of the Maplewood school district, which was annexed into the North Colonie school district in 2008. His district faced a financial crisis because a company went out of business and wanted a half-million in taxes refunded.

“You’re not in as bad a position as I was,” he said, adding that he had to raise the tax levy by over 20 percent two years in a row.

He estimated that the tax rate in the newly combined district would drop for Fort Edward residents by $5.39 per $1,000 of assessed value, according to his estimates. Residents of the Hudson Falls Central School District would see their taxes increase by 84 cents per $1,000.

He said the district should use the current building as an elementary school for the Hudson Falls school district.

Steele said his former school is being used for a wraparound program for kindergarten and special education students.

“They’re using that building to the fullest extent,” he said.

Steele explained that if Fort Edward and Hudson Falls went forward with a merger, they would hire a consultant for a more thorough study. The consultant would get public input.

Then, the school boards would schedule a nonbinding referendum, which would give the state education commissioner a sense of whether there is support for the idea. A binding referendum would follow and the merger typically takes effect the next July 1 — the start of the new fiscal year for school districts.

The district could lease space in its building to BOCES or some other organization, according to Steele.

Fort Edward has been awarded $75,000 in a Community Schools grant in the latest budget. That funding can be used for partnerships with other community service agencies, Steele added.

One of the Fort Edward school board members, Ella Collins, lived through the process when she was superintendent of Abraham Wing School in Glens Falls. Voters rejected a merger with the Glens Falls City School District on three separate occasions.

Another option is for Fort Edward to pay tuition to send its students in grades 7-12 to Hudson Falls.

Using current year data, Steele said it would cost Fort Edward about $800,000 to tuition out 211 students in grades 7-12 at a rate of $3,763 per pupil. That compares with $1.88 million in salaries and benefits costs for Fort Edward’s teachers for grades 7-12.

However, Steele cautioned that the savings could be erased, depending on how the state runs the education funding formula. Aid is awarded to districts on a per-pupil basis.

Ward said the state has not run the education funding formula the proper way in several years. The state just takes the current year’s amount and factors in an increase. No district receives any less aid than it received in the current year, which would not be the case if the formula was used, because it factors in enrollment.

For example, Fort Edward’s formula was based on a population of 577 students, according to Steele.

He said this issue would require further investigation if the district decided to go that route.

“If you’re going to lose that (aid), you want to know that up front,” he said.

Board President Thomas Roche said another wild card is the future of the former dewatering plant property.

“The thing that we’re waiting for and hoping for is to see what’s going to park in that land there,” he said.


Local
Man indicted for attempted murder in Moreau shooting

BALLSTON SPA — The Moreau man who allegedly shot his neighbor during an argument at a party has been indicted on an attempted murder charge as well as eight other charges.

The indictment against Joey M. Castro, 24, of Laurel Road, alleges he was trying to kill 35-year-old Michael Desnoyers when he shot him with what court records indicate was an illegal assault rifle last Oct. 8.

The shooting left Desnoyers seriously injured, and the extent of his recovery was unclear.

Saratoga County District Attorney Karen Heggen called the shooting a “tragedy” and said Desnoyers continues to deal with the injuries.

“He suffered serious physical injuries,” she said.

Police said the shooting occurred during an argument at a party that Desnoyers was hosting in the backyard of his home next to Castro’s, just west of the Hudson River.

State Police have not said what led to the strife between the two men, or how many times Desnoyers was shot with a semiautomatic rifle. Neighbors said the following day that the party was loud and that Desnoyers regularly hosted gatherings at his home.

In addition to the attempted murder count, Castro faces two charges each of first-degree assault and first-degree reckless endangerment and single counts of criminal use of a firearm and criminal possession of a weapon.

The reckless endangerment counts accuse him of endangering other people who were at the gathering.

Castro also faces misdemeanor charges of failure to register an assault rifle and unlawful manufacture of a weapon. The latter charge alleges that he illegally altered the gun, while the former was brought because it was a gun that had features that required it be registered under the state’s so-called “Safe Act” of gun laws.

He had been charged with felony assault and criminal use of a firearm the night of the shooting. Some of the charges relate to unspecified conduct related to the gun in 2014, according to the Saratoga County District Attorney’s Office.

Castro faces up to 25 years in state prison for the shooting and possible consecutive sentences for possessing and altering the gun.

No arraignment date had been set as of Tuesday morning, Heggen said. Castro is free on bail after having been sent to Saratoga County Jail following arraignment in October.

His lawyer, Richard DeVall of Saratoga Springs, could not be reached Tuesday morning.


Castro


Business
AP
Enforcement actions at watchdog agency halt under Trump

NEW YORK — In the 130-plus days since the Trump administration took control of the nation’s consumer watchdog agency, it has not recorded a single enforcement action against banks, credit card companies, debt collectors or any finance companies whatsoever.

That’s likely no fluke: Mick Mulvaney, appointed acting director of the Consumer Financial Protection Bureau in late November, promised to shrink the bureau’s mandate and take a much softer approach to enforcement, and records reviewed by The Associated Press indicate he has kept his word.

A review of a CFPB database obtained by the AP through a Freedom of Information request shows that the bureau issued an average of two to four enforcement actions a month under former Director Richard Cordray, President Barack Obama’s appointee. But the database shows zero enforcement actions have been taken since Nov. 21, 2017, three days before Cordray resigned.

Before Mulvaney, the bureau used enforcement actions to extract billions of dollars in relief for consumers from financial companies and to stop companies from doing harm. Bank of America was ordered to return $727 million to consumers for deceptive credit card practices in 2015 — the largest award in the bureau’s history — but the CFPB has issued dozens of smaller actions to get relief for student borrowers, victims of debt collection companies and bank customers.

In the roughly seven years it has been in existence, the bureau has returned $3.97 billion in cash back to American consumers through enforcement actions and an additional $7.93 billion in other types of relief, such as lower loan balances or debt relief, based on the CFPB’s records. The bureau estimates roughly one of every 10 Americans has received some sort of reimbursement or relief due to the bureau’s enforcement work since it was created.

Despite that direct relief to consumers, Republicans — including Mulvaney when he was representing South Carolina in Congress — accused the bureau of overreach. Mulvaney once called the bureau a “sick, sad joke” of an agency.

Bureau watchers on both sides of the issue say that they don’t believe enforcement actions have stopped entirely, and supervision and investigations at the agency are still ongoing. In a statement, the CFPB said the slowdown is tied to a new administration taking over the bureau, adding that “it is our job to enforce the law, and we take it very seriously.”

“Assessing the legal risks of all pending enforcement actions is a critical part of the transition process and standard procedure for new leadership at enforcement agencies such as the Bureau. That review continues alongside the agency’s ongoing law enforcement work,” the statement said.

While consumer advocates expected fewer enforcement actions under a more business-friendly Trump administration, the fact that the database indicates they have stopped entirely raises concern that consumers have been left vulnerable. There were some periods under the Obama administration where bureau enforcement actions slowed, but those appear largely tied to the fact the agency was just getting underway. This is the longest stretch without enforcement actions in the CFPB’s history.

“Enforcement is very important,” said Lauren Saunders, associate director at the National Consumer Law Center, a consumer advocacy organization and a critic of Mulvaney. “If a company violates the law, it needs to be held accountable and called out instead of being quietly admonished through supervision.”

The bureau effectively has two main avenues it can use to check wrongdoing at banks and other financial companies.

One is supervision, which is typically confidential and more routine. The CFPB has full-time inspectors inside most of the nation’s largest banks who, when they see something that may not be illegal but still raises concerns, can speak privately with bank management. If an issue is more substantial, like a potential breach of consumer protection laws, the bureau can begin an investigation that can culminate in an enforcement order, which is basically a court order directing a company to stop illegal behavior and often carries a fine.

“Enforcement is one of the most important parts of CFPB, because of the signals it is able to send to markets,” Saunders said.

Whether or not enforcement has been slowed by the change in management, Mulvaney repeatedly has said he wants to significantly curtail the bureau’s operations, and the slowing of enforcement would be part of that.

“I made it clear that the Bureau will continue to execute the law, but will no longer go beyond its statutory mandate,” Mulvaney said in his semi-annual report to Congress. His report also called for Congress to pass laws further curtailing the bureau’s authority.

Mulvaney will appear in front of Congress today and Thursday to discuss that report, and enforcement is expected to come up in questioning.

“My sense is things are moving forward in some way, but much more slowly than what was the historic pace of enforcement work,” said Joanna Pearl, legal director at the recently created Public Rights Project, who was chief of staff of the CFPB’s Office of Enforcement until January.