Attorney General Kamala Harris has joined the growing pile-on against Wells Fargo’s improper business dealings.

“California’s attorney general is conducting a criminal investigation into whether employees at San Francisco-based Wells Fargo bank stole customers’ identities in the sales practices scandal that rocked the bank and cost its CEO his job, newly released documents show,” the Associated Press reported. “A search warrant and affidavit released [Oct. 19] by the state Department of Justice show that agents sought evidence related to allegations that bank employees created up to 2 million bank and credit card accounts without customers’ approval in order to meet sales goals.”

The move reinforced both Harris’s bid for a national reputation as the presumptive successor to outgoing Sen. Barbara Boxer and the nationwide push for prosecution around Wells Fargo’s practices. “Harris, a Democrat who is running for U.S. Senate, joins a growing list of law enforcement officials looking into the company since Sept. 8, when regulators disclosed in a settlement that the bank fired 5,300 employees for allegedly opening more than 2 million deposit or credit card accounts since 2011 without customers’ knowledge or consent,” as the San Francisco Chronicle noted.

“Harris’ office is asking the San Francisco bank to provide wide-ranging customer account and other information to see whether it violated Sections 529 and 530.5 of the California penal code. The former makes it a crime to falsely impersonate someone, and the latter makes it a crime to use personal identifying information of another person for any unlawful purpose, including to obtain or attempt to obtain credit, goods, services, real property or medical information without that person’s consent. Convictions under both sections are punishable by a fine and/or imprisonment up to one year.” 

From bad to worse

With Harris as an adversary, Wells Fargo has faced a snowballing problem well in excess of a public relations challenge. “The investigation by Attorney General Kamala Harris’ office indicates Wells Fargo’s woes have moved beyond a tarnished image, consumer outrage and lost business opportunities, analysts said,” according to the San Jose Mercury News. “Ohio suspended Wells Fargo from doing business with state agencies and excluded the bank from participating in any state bond offerings. The announcement followed similar moves from California and Illinois and the cities of Seattle and Chicago.”

In fact, over less than two months, “15 investigations have been launched into Wells’ phony accounts scandal, including probes by the Justice Department, the Labor Department and the Office of the Comptroller of the Currency,” Kate Berry noted at Bank Investment Consultant. “Fitch Ratings downgraded Wells’ credit rating to negative, the Better Business Bureau cut off its accreditation, and more states suspended the bank from municipal bond underwriting. Top leaders of the bank’s hometown of San Francisco even went so far as to ask if the OCC should revoke Wells’ 160-year-old bank charter.”

California’s probe has already laid bare unflattering and worrisome customer stories about the way Wells Fargo did business. “State investigators interviewed four Southern California residents as part of their probe into the bank’s practices,” the Mercury News added. “Among the customers’ statements: Wells Fargo employees opened a $10,000 line of credit without permission for one person; set up multiple life insurance policies for another; and established unauthorized checking accounts for children. A 74-year-old woman said the bank opened multiple credit or debit card accounts in her name without her knowledge.”

Signaling reform

The bank has made moves in recent days to change the internal process that appears to have encouraged or allowed abuses. “Wells Fargo is changing how it refers to performance meetings for some wealth and investment management employees following the bank’s settlement last month over its retail sales practices,” the Charlotte Observer reported, citing internal communications obtained by the paper. “The communications suggest Wells’ efforts to overhaul its sales process might extend beyond its retail banking operations.”

The problems with West Covina’s public contracts were so bad, the controller’s office says, that they constitute criminal behavior in violation of the state’s public contracting laws.

However, the statute of limitations for public contracting violations is limited to one year — making it nearly impossible to prosecute violations.

“It makes no sense that the statute of limitations for violating state and local contracting laws is one year from when the money is spent,” Controller Yee said in a statement to CalWatchdog.com. “I urge the legislature to consider a statutory change if we expect to ferret out fraud and prevent willful abuses of state law and taxpayer dollars.”

West Covina: 72 of 79 control components inadequate

The audit of West Covina covered just two fiscal years, from 2011-13, during which time the city routinely misstated its revenues and expenditures. The controller’s audit division reviewed the internal accounting components based on the guidelines established by the General Accounting Office’s Internal Control Management and Evaluation tool. Ninety-two percent, or 72 of 79 components were deemed inadequate.

The City of West Covina struggled with basic accounting procedures. In fiscal year 2011-12, the city understated its property tax revenue by $14 million, sales tax revenue by $4 million and expenditures by $16 million. The following year, expenditures were off by $9.78 million and property tax revenue understated by $4.2 million.

In addition to misstating the city’s financials, the council and top management charged the city for lavish meals, hotel bills and other expenses with no government purpose. From July 1, 2011, to June 30, 2013, city officials charged more than $32,000 in “questionable” expenses to city credit cards. According to the state controller’s audit, former city councilmembers and city managers charged thousands of dollars for hotel stays in Santa Barbara and weekend getaways in Indian Wells.

Problems occurred under former City Manager Andrew Pasmant

Among the State Controller’s other findings:

• West Covina settled a breach of contract lawsuit for $900,000 after a real estate deal fell through due to the city’s failure to comply with applicable laws and regulations. The city also paid $145,000 in legal fees to the West Covina Improvement Association, which challenged the deal’s legality.
• After winning a discrimination and hostile work environment lawsuit, West Covina waived its right to recover more than a million dollars in costs and legal fees. The State Controller’s review concluded the city failed in its responsibility to protect taxpayer dollars.
• Invoices for $457,015 in legal fees did not detail the work performed or show payment authorization.

In another instance of questionable city spending, the state controller’s audit revealed, “On November 17, 2011, the former City Manager charged to the City issued card $5,300 for a business-magazine advertisement for a private company for which the contact person was the former Community Development Director.” Andrew Pasmant, according to city records, was the city manager at the date in question.

The West Covina city council should have anticipated Pasmant’s penchant for problems. When the city hired him in 2001, it knew about Pasmant’s past problems in the City of South Gate, which needed “a court order to get him out of his office,” according to the Los Angeles Times.

Sweetheart Contract for Athens Services

The former city manager can share the blame with the former members of the city council.

In 2012, the council approved a sweetheart deal for Athens Services to collect the city’s trash and recycling. Athens Services received a contract extension until November 2037 in exchange for a one-time payment of $2 million and annual contributions of $50,000 to the City’s SWAT program, $20,000 to the Summer Concert series, and $30,000 to the Fourth of July celebration.
That agreement with Athens Service  was approved by then-Mayor Mike Touhey and then-Councilmen Steve Herfert and Rob Sotelo. Councilman Fredrick Sykes, who cast the lone dissenting vote, criticized the contract.

“The evergreen clause has been in the driver’s seat in this city forever,” Sykes said of the Athens contract, according to the San Gabriel Valley Tribune. “The City Council doesn’t control the how and the when and the cost. We have no say.”

To its credit, the City of West Covina has embraced much of the audit’s findings and cooperated with the state controller’s office. The current city council was largely elected on a reform slate and took over control after the problems found in the audit.

“The City of West Covina acknowledges that the open bidding requirements established by the municipal code were not always complied with,” the city stated in response to the audit. The city also says that it has adopted “a new and more comprehensive purchasing policy since the time periods evaluated.”

A complete copy of the audit is available at the State Controller’s website.

Data acquired illegally, such as Social Security information, date of birth or street address, could be used to clear the IRS’ “multi-step authentication process,” rendering most of those safety precautions useless. With this data, the IRS said, criminals were able to file fraudulent tax refunds.

According to the statement:

“The matter is under review by the Treasury Inspector General for Tax Administration as well as the IRS’ Criminal Investigation unit, and the ‘Get Transcript’ application has been shut down temporarily.

In addition to disabling the “Get Transcript” application, the IRS has taken the below steps:

• “Sending a letter to all of the approximately 200,000 taxpayers whose accounts had attempted unauthorized accesses, notifying them that third parties appear to have had access to taxpayer Social Security numbers and additional personal financial information from a non-IRS source before attempting to access the IRS transcript application. Although half of this group did not actually have their transcript account accessed because the third parties failed the authentication tests, the IRS is still taking an additional protective step to alert taxpayers. That’s because malicious actors acquired sensitive financial information from a source outside the IRS about these households that led to the attempts to access the transcript application.
• “Offering free credit monitoring for the approximately 100,000 taxpayers whose Get Transcript accounts were accessed to ensure this information isn’t being used through other financial avenues. Taxpayers will receive specific instructions so they can sign up for the credit monitoring. The IRS emphasizes these outreach letters will not request any personal identification information from taxpayers. In addition, the IRS is marking the underlying taxpayer accounts on our core processing system to flag for potential identity theft to protect taxpayers going forward — both right now and in 2016.”

Los Angeles City Controller Ron Galperin

Los Angeles City Controller Ron Galperin released an audit on Tuesday outlining excessive overtime use in the Department of Transportation. The controller’s office received an anonymous tip from its Fraud Waste & Abuse Hotline and was able to “identify four supervisors in the Traffic Paint and Sign Section who received at least $70,000 in overtime pay during FY 2013-14.” The findings also included a superintendent that received “$155,319 in overtime on top of his normal $78,000 yearly earnings—effectively tripling his salary.”

“This report should put everyone on notice,” said Controller Galperin. “We are watching overtime and we will not permit it to be abused.” The release continued:

[blockquote style=”3″]In FY 2013-14, 93% of Traffic Paint and Sign employees received overtime. Citywide, among full-time employees excluding LAPD, LAFD and DOT, the number was 49%.

Among the other findings:

• Super-human work schedules: One employee was paid for 261 hours during a two-week period. He claimed to work 10 18-hour days and 4 days of at least 16 hours.
• Doing the jobs of two full-timers: 30 out of 67 Traffic Paint and Sign employees, including supervisors, claimed more than 1,000 hours of overtime in FY 2013-14; seven of the 30 claimed to work at least 2,000 hours of overtime. (A full-time employee is paid for 2,080 hours per year. 2,000 hours of overtime in a year equates to, on average, working more than 38 hours of overtime every week of the year. An employee who does this is constantly working double shifts, doing the job of two full-timers.)
• The Tab: Traffic Paint and Sign employee overtime cost the City $3.3 million dollars in FY 2013-14. The average overtime pay for each Traffic Paint and Sign employee was $48,100, compared to $8,377 for other departments, excluding LAPD, LAFD and DOT. [/blockquote]

Due to budget problems, the California Senate cut its budget 4 percent. The Times reported:

After years of turning down cost-of-living increases for its budget, the state Senate on Friday notified its workforce that 39 employees will be laid off at the end of the year to avoid a multi-million-dollar deficit, a cut of about 4% of the total staff in the upper house. 

Fifty other positions are being cut through attrition and employees will pay about $30 a month more for health care insurance premiums, officials said.

The good news:

• Fewer functionaries living off us with massive pay, perks and pensions.
• Fewer functionaries to write bills increasing our taxes.
• Fewer functionaries to write bills controlling and repressing us.

Now, if they just could get lay off the other 96 percent in the Senate and 100 percent in the Assembly and the executive and judicial branches.

This led to dozens of stories in the Los Angeles Times that described a series of similar cases involving Toyota and alleged a coverup of the accidents and serious problems with Toyota’s engineering and vehicle design. But there’s a gigantic problem with this story.

The case of the death of the CHP officer involved a misplaced floor mat pinning down the accelerator — not Toyota’s fault. The Prius case by all evidence appears to be a fraud by a con artist — not Toyota’s fault. And as some iconoclastic journalists pointed out as the case was unfolding, nearly all the cases involved elderly drivers who are far more prone to driver error such as hitting the wrong foot pedal.

In the L.A. Times’ first huge takeout on the controversy, here are the ages of the drivers involved in the incidents the newspaper cited (for some incidents, it didn’t offer any ages): 60, 61, 63, 68, 71, 72, 72, 77, 79, 83, 85, 89.

How odd — Toyotas are prejudiced against older drivers!

When government regulators use trial-lawyer dirty tricks

Forbes treats this scandal with the brisk contempt it deserves:

“The evidence strongly suggests [driver error is] what’s behind most cases of unintended acceleration involving Toyota vehicles. … the government has failed to find any evidence of an electronic or mechanical problem to explain why Toyota vehicles have accelerated out of control. There is a politically incorrect explanation: Age. The gremlin inside Toyota’s electronics seems designed to attack people over the age of 60, including the 76-year-old woman who convinced an Oklahoma jury to hit Toyota for $3 million over an accident that killed her 70-year-old passenger.

“Now the Wall Street Journal reports Toyota is close to paying $1 billion to settle a federal criminal investigation into its alleged failure to report the alleged incidents of unintended acceleration that federal authorities have already concluded mostly resulted from operator error. This comes after Toyota agreed to pay more than $1 billion to settle private suits based on the novel theory that Toyota owners had suffered economic damages because their cars were worth less after plaintiff lawyers spread reports of an electronic defect that caused unintended acceleration. Which the government failed to find.

“If this all sounds a little crazy, get used to it. We are now firmly in the era of regulation by legal intimidation … . Regulators, prosecutors and attorneys general have learned a valuable lesson from their private counterparts, class-action attorneys. Build a big enough case, and the target company will settle. The alternative can be fiduciary suicide: Risking the entire net worth of the company on a jury’s whim.

“The Oklahoma jury that determined it was Toyota’s fault that a 76-year-old woman crashed her car exiting the highway demonstrates the stakes. That verdict, if upheld to judgment, might have provided the precedent requiring Toyota to admit fault in thousands of other cases.”

The L.A. Times abets a dishonest scam

While the Times, to its credit, has acknowledged those who doubt Toyota is to blame for these problems, most of its reporting skips over the lack of hard evidence that Toyota is at fault. Nor do LATers acknowledge that if Toyota is not to blame, the automaker can’t be accused of a coverup of these accidents.

Anti-business business columnist Michael Hiltzik is typical.

What’s unfortunate about this is that one of last year’s Pulitzer awards hinted we could finally be seeing journalists appreciating and using the scientific method to ferret out scoops. The Sun Sentinel of South Florida used records from toll stops to document outrageous behavior by local law-enforcement officers:

“A three-month … investigation found almost 800 cops from a dozen agencies speeding 90 to 130 mph on our highways.

“Many weren’t even on-duty — they were commuting to and from work in their take-home patrol cars.”

If the Times had relied on such hard evidence instead of trusting anecdotes shaped by remora-like lawyers peddling oh-the-humanity horror-story myths about malfunctioning Toyotas, its coverage would have been a lot different.

Remember, modern vehicles are festooned with gadgets and gauges measuring their performance. Federal regulators looking at the Toyotas involved in these sudden-acceleration cases closely scrutinized these gadgets and gauges — and found no evidence Toyota was at fault in even one case.

If that’s not the lede of any story about this mess, it’s a comment on journalists’ innumeracy and love of a splashy scandal. Pathetic.

Friday, the city clerk announced that she rejected the petitions, along with 34,000 signatures, on the grounds some of the petition versions did not comply with election code.

“Due to technical issues identified in the submitted petitions, I find the petition noncompliant with significant provisions of the California Elections Code and the Sacramento City Charter, and therefore insufficient to move forward,” Shirley Concolino, Sacramento City Clerk, said in a press release.

Yet, just last week, the Sacramento County Registrar certified there were enough verified signatures on the petitions to qualify the measure for the ballot.

The signatures were collected by STOP, Sacramento Taxpayers Opposed to Pork, and Voters for a Fair Arena Deal, to put the decision of whether a public subsidy for the new arena project downtown, should be on the ballot in the city of Sacramento.

“The4000, a group representing the new downtown arena plan responded to Friday’s decision by saying, ‘For STOP, this has never been about a vote and democracy; it has always been about tricking voters and stalling the arena with a two-part vote designed to blow up the project,’” reported Fox 40 news.

The4000 is a group headed up my Mayor Kevin Johnson, a former NBA player. “The downtown arena is an extraordinary, once-in-a-generation project with a profound potential to generate catalytic economic benefits for the downtown, city and region,” The4000 claims.

In the letter Concolino sent to STOP about her decision, she cited the nine different petition versions as being problematic. Concolino said even though the petition’s signatures are valid, they were gathered before STOP officially filed their notice of intent with the city clerk’s office.

Last week, in the lawsuit targeting the arena deal orchestrated by Mayor Kevin Johnson, a former NBA star, Sacramento Superior Court Judge Eugene Balonon had issued a tentative order on the depositions. But he said he would deliberate a little longer on the case law before issuing a final ruling.

The judge's order issued Tuesday supports petitioners’ requests that they be allowed to depose McCarty and Rhinehart.

The plaintiffs are a group of citizens known as STOP (Sacramento Taxpayers Opposed to Pork) who are fighting the arena subsidy deal. According to the lawsuit filed by STOP, the city subsidy is actually $338 million — not the $258 million the city claims.

STOP has tried to get the details of the arena deal and purchase of the Sacramento Kings to be made public.

'Undiscoverable, privileged' information?

The attorney for the defendants insisted in court and in legal filings that the information the petitioners seek from McCarty and Rhinehart is “undiscoverable, privileged information.”

“The court disagrees,” wrote Judge Balanon. “Defendants have not met their burden in asserting this privilege as to Councilman McCarty.”

An order protecting Rhinehart from being deposed was also denied by the judge.

Deposition notices were sent to city officials in September. But according to the plaintiff's attorney, Patrick Soluri, the mayor and city officials have engaged in various avoidance tactics, including filing numerous objections to deposition notices, rolling demurrers, and refusing to comply with a court order directing them to reschedule a further hearing. Soluri said these were stall tactics designed solely to delay the inevitable discovery until after the city’s expected formal approval of the arena in April.

“Defendants request for a stay of all discovery pending a ruling on another demur is DENIED,” the judge wrote in Tuesday's ruling.

Following the hearing last Thursday, Sacramento Bee columnist Marcos Breton ridiculed the lawsuit.

“Did you hear about the 'secret deal' between the city of Sacramento and the Kings? It’s supposedly a backroom, off-the-books, under-the-radar, 'sweetener' that was cooked up secretly between city officials and Kings owners. It would secretly provide hidden subsidies from the city to the Kings for the purpose of secretly making the Kings owners financially whole for 'overpaying' to buy one of the worst franchises in the NBA.”

essay to buyToday Breton may be eating crow for lunch. He's openly championed the arena deal and mocked anyone opposed to it.

Councilman McCarty has consistently opposed the arena deal. He sent a letter to City Manager John Shirey and the news media last February, challenging the use of public money for an arena, questioning whether the city would get a return on its investment and asking who would be accountable if revenues don't meet expenses.

Ballot initiative on subsidy

Beyond the legal challenge to the city’s deal, there is also a ballot initiative petition to require a public vote on any public subsidy for a professional sports franchise.  The petition signatures are currently being counted.

However, it appears Mayor Johnson and the City Council will attempt to moot the result of that vote by pushing up their approvals of the arena prior to the June vote that would thereafter require voter approval.  Approval of the deal and related bond sales were previously scheduled for summer or fall 2014.

See recent CalWatchdog stories covering the Sacramento arena deal here, here, here  and here.

And go here for all of the CalWatchdog stories on the arena deal.

There was no fast break at a recent court date concerning a suit by Sacramento activists opposed to tax subsidies for a new arena. The activists are Issac Gonzalez, James Cathcart and Julian Camacho.

CalWatchdog.com attended the Dec. 19 hearing before Judge Eugene Balonon, who was expected to decide the case one way or another. Instead, the judge postponed the hearing date out to Jan. 9, 2014.

Just before that date, the plaintiffs and their attorneys, Patrick Soluri and Jeffrey Anderson, hope to be deposing the defendants, Mayor Kevin Johnson, City Manager John Shirey, Deputy City Manager John Dangberg and other city officials. The deposition dates are on Jan. 6, 7 and 8.

“I think we are starting to see the light at the end of the tunnel where we can actually start engaging in some serious discovery to obtain evidence to support the allegations we have made,” said attorney Anderson after the hearing. The attorneys said they are trying to force city officials and staff to reveal an alleged secret deal.

“We believe that will develop additional evidence that we can then take and do further depositions of other city officials and other document request,” Anderson said.

The lawsuit accuses the officials of making a secret deal with arena investors to provide an extra $80 million of public money to help an investors’ group beef up an offer against a Seattle group vying for the Sacramento Kings professional basketball team. Instead of a $258 million subsidy, as the city claims, the city allegedly was really going to deliver $338 million for the arena, according to the lawsuit. In the lawsuit’s wording from its May filing:

“Rather than risk a groundswell of public opposition that would be generated by accurately disclosing the combined subsidies for the arena and purchase of the Kings franchise, Mayor Johnson, Mr. Shirey and Mr. Dangberg determined that it was more politically expedient to simply misrepresent to the taxpayers the true value of the city’s subsidies.”

The entire case file is available at Sacramento Superior Court services.

Response

In response, Mayor Johnson, a former NBA player, the other plaintiffs and their attorneys insist the information the petitioners seek is “undiscoverable, privileged information.” According to a search on the Court website, they claim the discovery “is not permissible.” And they insist:

Solura said of the judge’s ruling on the depositions, “It informed the city that these stunts and tricks to prevent us from getting to discovery will simply not be tolerated anymore.”

The court documents tell the other side, that of the mayor and the other respondents, who maintained:

“Despite the pending demurrer, Petitioners began conducting discovery, but later conceded that their proposed discovery would not assist them in alleging a ripe claim. In light of this irrelevant discovery, respondents were forced to seek – and obtain – a stay of discovery pending its demurrer. A short time later, this Court agreed that the Petition did not raise a justiciable controversy but granted Petitioners leave to amend.”

Initiative

The court case also is competing on time with an initiative aimed at forestalling the arena. Gonzalez is the campaign manager for the group, Voters for a Fair Arena Deal. Reported the Sacramento Business Journal of the signatures the group gathered, “ ‘The overwhelming majority should be approved,’ Gonzalez said, pointing out another group involved in the effort, Sacramento Taxpayers Opposed to Pork, initially said they’d collected over 40,000 signatures, but the total submitted only ended up around 34,000. ‘There was an exhaustive scrubbing going on at the end.’”

The groups working for a ballot measure used a validation service before submitting the 34,000 signatures and think their valid signature percentage will be high, according to a recent Sacramento Business Journal story.

However, reported the Bee, “So far, the council has only tentatively approved the financing plan, and a vote on issuing the bonds won’t come until next spring. What isn’t known is whether the subsidy issue will come to a public vote in June.”

Public funds

The City of Sacramento’s approval of a term sheet on the arena deal “constitutes the illegal expenditure of public funds,” according to the lawsuit. Despite the city calling the term sheet “non-binding,” Gonzalez et al. argue the city has already “committed monies to the hiring of consultants and other services.”

Mayor Johnson and city officials approved the $447.7 million arena deal at the Downtown Plaza in March, insisting it was a public-private partnership, with the private contributions amounting to only about one-third of the deal.

The lawsuit also alleges the public subsidy will enrich the Sacramento Investor Group, at the expense to taxpayers. The Sacramento Investor Group purchased the Sacramento Kings NBA franchise.

In response, the mayor and other backers of the arena cite a city-sponsored study saying the arena will bring $7 billion in economic benefits to the city over 50 years. “That includes spinoffs such as sales at restaurants and hotels, as well as $6.7 million in taxes,” according to a Sacramento Bee story.

Sacramento’s publicly funded arena deal has been billed as “the largest redevelopment project in city history” in Sacramento, as CalWatchDog.com explained in an article.

Voters in 2006: ‘No’

However, for more than 13 years, there have been numerous attempts to gain city approval for a new, publicly subsidized arena. Sacramento voters even turned down two ballot measures in 2006 that would have approved a public subsidy through a ¼-cent sales tax.

In 2011, Johnson formed an “independent” non-profit group to develop the new arena. The “Think Big Sacramento” group conducted a bold public relations campaign to push the publicly subsidized arena plan.

But Johnson’s group turned out to be so closely linked to the Sacramento Kings organization, the Fair Political Practices Commission fined him $37,500 for his failure to report more than $3.5 million in “behest” payments from the Kings. According to the FPPC, “[T]hese payments are not considered campaign contributions or gifts, but are payments made at the ‘behest’ of elected officials to be used for legislative, governmental or charitable purposes.”

The problem is, for millions of Americans, it is not true. Millions of previously insured Americans have received cancellations from insurance companies. Doctor groups are not part of the exchanges.

And the problems are only getting worse — now you may not be able to keep your prescriptions.

“If you like your medicines, you may not be able to keep them under Obamacare,” health policy analyst Scott Gottlieb wrote in Forbes. “Health plans are cheapening their drug formularies — just like they cheapened their networks of doctors. That’s how they’re paying for the benefits that President Obama promised, everything from free contraception to a leveling of premiums between older (and typically costlier) beneficiaries, and younger consumers.”

The Affordable Care Act is one big ponzi scheme.

Doctors ‘just say no’

The system won’t work without doctors.

“An estimated seven out of every 10 physicians in deep-blue California are rebelling against the state’s Obamacare health insurance exchange and won’t participate, the head of the state’s largest medical association said,” the Washington Examiner recently reported.

“California offers one of the lowest government reimbursement rates in the country — 30 percent lower than federal Medicare payments,” the Examiner said. “And reimbursement rates for some procedures are even lower.”

Doctors can’t work for free. Many doctors run small businesses. “We need some recognition that we’re doing a service to the community,” California Medical Association President Dr. Richard Thorp told the Examiner. “And we can’t do it at a loss. No other business would do that.”

One California doctor said Medicare reimburses a return doctor office visit at $76 in San Diego, California. The Medicaid reimbursement is only $24. Medicaid is government health coverage for low-income and welfare recipients.

Covered California has been secretive about its plan reimbursement rates, and doctors now say rates will be close to the Medicaid reimbursements. Doctor networks cannot afford to work for a fraction of the cost.

Another ‘glitch’ — Phishing for personal data

IT experts are now warning the Healthcare.gov Obamacare computer system directs users to fraudulent health care websites.

Some Healthcare.gov users are reporting they were told their user password was incorrect, and then the website directed them to a “forgot password” page — which asked for highly personal information.

Politico reported The D.C. insurance exchange where thousands of Hill aides are shopping has confirmed that an outside scammer is redirecting customers to a fraudulent website.

“Some shoppers are being directed from the insurance website to an outside site that appears nearly identical to the real exchange, officials confirmed Friday,” Politico reported. “The fraud is widespread enough that they’re considering adding disclaimers to its website to warn users against divulging their check card or PIN numbers.”

“Yes, we have heard of it. There is definitely a phishing scam from an outside source,” said Richard Sorian, a spokesman for D.C. Health Link.

A notice on the exchange’s website warns consumers against being “fooled by fake websites claiming to help you.”

How do you know if you are on a fake Obamacare exchange website? If it doesn’t crash.