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The Atlantic's Jordan Weissmann has a good takedown of a Wall Street Journal story reporting that ballooning student loans are hampering entrepreneurial types from starting businesses. Surely that's true. If you have several hundred dollars a month worth of loans to pay when you start out, you're going to be less able to spurn a "real" job and start your...

by Joaquin Sapien

Aug. 16: This story has been updated to include a recent decision by the U.S. Court of Appeals for the Second Circuit in the case of a Queens woman who says she was illegally held as a material witness in 2008.

The 20-year-old document – labeled the Hotel Custody log by the Brooklyn District Attorney’s office – is not easy to decipher. It contains a list of New York City hotels beside columns labeled “Date In” and “Date Out.” There are names of individual prosecutors and the units they worked for at the district attorney’s office.

A spokesman for the district attorney’s office, asked to explain the document, refused to say anything. And a judge recently placed the document under seal at the request of lawyers for the city.

Ruddy Quezada and his lawyers, however, are pretty sure they have figured the document out, and that it – in particular the third line from the bottom – holds a key to Quezada’s freedom after more than 20 years behind bars for a murder he insists he didn’t commit.

Quezada’s lawyers assert that the document is a record of witnesses in criminal trials held in hotel rooms by the district attorney in the winter of 1993. Some of the witnesses were prisoners released to testify and held overnight in custody. Others were witnesses who were fearful for their safety.

But some on the list were held under what are known in the criminal justice system as material witness orders, men and women who were deemed “uncooperative,” arrested by detectives and not freed until they agreed to testify.

Most specifically, Quezada’s lawyers say that on March 11, 1993, a man named Sixto Salcedo was checked into the Holiday Inn Crowne Plaza. Salcedo, they say, was released the following day, after he agreed to do what prosecutors wanted: testify that he had seen Ruddy Quezada shoot dead a man named Jose Rosado on the streets of Brooklyn.

Salcedo did testify, and Quezada was convicted. But a lot has happened since – Salcedo has recanted his testimony, another man has confessed to the murder, and Quezada has asked a federal judge to free him from prison. And much of what happens next could turn on what took place at the Crowne Plaza that night 20 years ago.

Salcedo now says in sworn testimony that he never saw Quezada shoot anyone, and that he only agreed to say otherwise after he had been arrested on a material witness order, threatened by detectives and held overnight in one of the hotels used by the district attorney’s office.

“I’m not trying to justify myself,” Salcedo said in the sworn statement, “I’m just trying to have a clear conscience, since I regret the harm that I have caused.”

For some defense lawyers in New York, the Quezada case is just one example of a wider abuse of material witness orders.

The orders are meant to help prosecutors compel testimony from problematic witnesses in criminal cases. But the orders, which must be signed by judges, are supposed to be used only in extraordinary circumstances, as a kind of last resort, often when prosecutors fear a potential witness might flee instead of testifying.

Prosecutors are required to honor basic protocols aimed at protecting the rights of such witnesses: once detained, they are to be brought directly before a judge and provided with a lawyer. A hearing is then supposed to be held to explore the reasons behind a witness’ reluctance to testify: Is it fear? Possible complicity in the crime? Or are witnesses being intimidated into testifying falsely?

Determining much about the use of material witness orders is not easy. Court administrators in New York State are able to say that prosecutors continue to seek them and judges continue to grant them, but can’t say definitively how often the orders are issued or whether prosecutors abide by the law in executing them.

A spokesman for the Queens District Attorney said prosecutors in the office always take such witnesses before a judge. But the city’s other four district attorneys told ProPublica they would not answer questions about how material witness orders are handled by their offices.

But the Quezada case is not the only one dealing with the possible abuse of material witness orders to have surfaced in recent years. Some defense lawyers say they are concerned about how often local prosecutors might have disregarded the safeguards meant to protect the witnesses.

A lawyer for a Queens woman who says she was illegally held as a material witness in 2008 is now pressing to hold prosecutors accountable, seeking to find them personally liable. She scored a considerable victory in her effort this week when a three-judge panel on the U.S. Court of Appeals for the Second Circuit held that prosecutors in the case were not entitled to “absolute immunity” from her lawsuit, and ordered the case to be reconsidered by a district court.

"A material witness warrant secures a witness’s presence at a trial or grand jury proceeding," Judge Gerard E. Lynch of the Second Circuit wrote in an opinion made public Friday. "It does not authorize a person’s arrest and prolonged detention for purposes of investigative interrogation by the police or a prosecutor."

Another lawyer, Joel Rudin, has asked a federal judge in Brooklyn to force the Brooklyn District Attorney to turn over its records concerning the detention of witnesses in hotels over the years. Rudin, who is suing the city over a wrongful conviction that was achieved in part by the abuse of a material witness order, already has won rare access to some material.

Rudin said some witnesses held in hotels were formally classified as prisoners; they may have been inmates brought to court to testify in a criminal trial. But scores of others on the logs he has seen were likely innocent men and women who were being detained under material witness orders, he said.

“If they were not happening in Brooklyn, we would associate such practices with a police state,” Rudin said in court documents filed in May.

The Brooklyn District Attorney declined to respond to Rudin’s allegations.

Controversy arose around federal prosecutors’ deployment of material witness orders after 9/11, when it came to light that they had used the warrants to detain large numbers of people to provide information about terror cases.

But the use of these orders at the state-level remains largely unexamined. In New Jersey, legislators adopted reforms to the state’s material witness statute two decades ago, prompted by a case in which a man was held in jail to testify against a defendant who hadn’t even been charged with a crime yet.

The reforms came after a state commission surveyed the laws on material witness orders across the country.

“Some states had some protections for witnesses, some had none, but no state had a comprehensive set of protections,” said John Cannel, a member of the New Jersey Law Revision Commission, an arm of the state legislature.

One Living Witness, Perhaps Too Valued

Jose Rosado was killed in a drive-by shooting in the crime-ridden Brownsville section of Brooklyn on Oct. 19, 1991. Ruddy Quezada was arrested for the crime, based on the statements to police of two alleged eyewitnesses: Sixto Salcedo and John Delacruz.

But by the time prosecutors were preparing for trial in late 1992, Salcedo was the only witness alive. Delacruz had turned up dead in the Bronx, leaving prosecutors with a badly weakened case without Salcedo’s testimony.

But Salcedo now says that in the run-up to Quezada’s trial he was no longer so certain about what he’d seen that night and refused to testify. Frustrated by Salcedo, prosecutors went to a judge in December 1992 to get an order to arrest him, and question him about just how uncertain he really was.

Salcedo says he eventually was picked up by an investigator with the Brooklyn District Attorney’s office, and brought to the Crowne Plaza hotel. Salcedo says he was never brought before a judge or provided with an attorney, and the Brooklyn District Attorney’s office has offered no evidence to the contrary.

Instead, he got a night with a New York Police Detective named Thomas Buda, who, according to court filings, threatened Salcedo with jail if he didn’t cooperate with prosecutors. Salcedo relented and testified the next day.

At trial he said he was standing in front of a bodega when he saw a black Cadillac with the headlights turned off pull up across the street. Quezada was in the passenger seat. He raised a machine gun and fired multiple shots out of the window.

“I saw him,” Salcedo said of Quezada, according to records of the trial. “I saw his face and then I saw some movement, then the shots, then we ran.”

The prosecutor, Ephraim Shaban, reassured the jury that Salcedo had come forward voluntarily.

Quezada, then 30, was convicted of second-degree murder and sentenced to 25 years to life in state prison.

Quezada immediately began to file appeals. And he eventually pressed for information concerning the circumstances of Salcedo’s testimony. He and his lawyers wanted to know if Salcedo had been arrested under a material witness order prior to trial.

For nearly a decade, in court filings and hearings, the Brooklyn District Attorney’s office insisted there was no material witness order used to compel Salcedo’s testimony. State judges accepted the district attorney’s claims. Quezada’s appeals were rejected.

But in 2011, close to 20 years after Quezada’s conviction, prosecutors produced what they had long insisted didn’t exist: a warrant to arrest Salcedo signed by Judge Abraham Gerges on Feb. 8, 1993. It stated that Salcedo should be brought “before the court forthwith” for a hearing to determine whether he did in fact have testimony relevant to the case and whether he should be held in police custody. Quezada’s lawyers also were given the page of the hotel custody log that recorded Salcedo’s night at the Crowne Plaza hotel.

The Brooklyn District Attorney’s office offered no explanation or apology for its failure to turn over the material earlier.

A federal court is now deciding whether to hold a hearing to examine Quezada’s claim of innocence.

Rudin, who is representing a wrongfully convicted Brooklyn man named Jabbar Collins in a multimillion-dollar lawsuit against New York City, suspects the abuse of material witness orders has been a regular feature of the way the Brooklyn District Attorney’s office did business over the years.

Collins, convicted of killing a Brooklyn rabbi in 1995, was told for years that an order used to prompt the testimony of a critical and damning witness in the case against him didn’t exist. Rudin ultimately found that to be false. Much like Quezada’s lawyers, he found that the key witness was picked up on a material witness order and then held for several days before he testified.

Rudin is now digging into the office’s use of material witness orders to bolster his accusation that there has been systemic misconduct in the Brooklyn District Attorney’s office. As part of that effort, Rudin has obtained the sworn testimony of Christopher Salsarulo, a former investigator for the district attorney’s office who says he executed many material witness orders during his three years with the office.

Salsarulo said in his sworn testimony that he received next to no training on how to properly execute a material witness order. He says nothing about bringing witnesses before judges or getting them lawyers.

Salsarulo said he was simply told “to do your best to find the material witness and bring her back to the DA’s office.” Salsarulo said material witnesses were sometimes put in handcuffs and taken to locked hotel rooms under armed guard.

The Brooklyn District Attorney’s office has denied Rudin’s claim that the office ran a rogue operation in which witnesses were routinely jailed and coerced into testifying falsely. To date, the office has not responded to Salsarulo’s portrayal of how material witnesses were handled.

Salsarulo, in his affidavit, painted a vivid picture of how uncooperative witnesses were dealt with, and how such treatment could produce useful testimony.

Witnesses, he said, would be left handcuffed in their underwear.

“You like pants?” Salsarulo said he would ask the witness.

Salsarulo, who now works as an agent for the U.S. Drug Enforcement Administration in New Jersey, said the technique often worked.

“If they’re compliant,” he said of the jailed witnesses, “we dress them and give them water, whatever they need so they would be comfortable.”

“I Didn’t Want to Come to Trial”

At 6 a.m. one January morning in 1992, 19-year-old Michael Thompson was asleep in his mother’s apartment on Avenue C in Manhattan when police rousted him from bed, according to court records. They had a material witness order to bring him before a judge and explore why he had been resistant to testify in a murder case. Six months earlier, Thompson had told police he’d seen someone shoot a man outside a Manhattan nightclub. He’d said he could identify the dead man, and his killer, a man named Fernando Bermudez.

But police and prosecutors had become frustrated over the months by what they viewed as Thompson’s lack of cooperation.

According to court documents, Thompson repeatedly told a Manhattan homicide prosecutor, James Rodriguez, that he didn’t want to testify against Bermudez. He told Rodriguez he’d never been sure of what he had seen that night outside the club.

But Rodriguez wasn’t persuaded. Several other witnesses had also identified Bermudez as the shooter. Rodriguez was determined to have Thompson testify. And so Rodriguez went before Manhattan Judge John A.K. Bradley, and obtained a material witness order authorizing his arrest.

Under New York law, Thompson should’ve been taken before a judge immediately after his arrest. But testimony and court records indicate that didn’t happen. He was supposed to get a lawyer. That didn’t happen. Instead, police drove him directly to the Manhattan District Attorney’s office to meet Rodriguez.

The Manhattan District Attorney’s office, which is now being sued by Bermudez, has declined to comment on the case.

In court filings, city attorneys representing the Manhattan District Attorney have denied any wrongdoing in the case. They claim that neither Thompson, nor any other witness, was pressured to testify falsely. To the contrary, they’ve suggested that the witnesses who recanted did so only as a result of pressure from Bermudez. Rodriguez, the prosecutor on the case, no longer works for the Manhattan District Attorney.

Thompson had been at the scene when Raymond Blount, his 16-year-old friend, was shot to death outside the club. He and others later picked Bermudez’s photograph out of a smattering of pictures provided by police in the days following the shooting. Thompson also picked Bermudez out of a line-up. But the photo was just of his face. And during the line-up, Bermudez never stood up, so Thompson couldn’t see how tall he was.

The man who shot Blount, Thompson said, was 5’8” or 5’9” and weighed about 160 pounds. Bermudez was 6’2” and about 215 pounds.

Thompson says he repeated his concerns to Rodriguez at the office that day he was picked up.

“I didn’t want to come to trial. I kept telling the ADA this because I doubted the identification. It was dark when Raymond got shot, and late,” Thompson said in a sworn statement he signed a year after the trial.

Police had found a toy gun in Thompson’s bedroom that morning. Thompson, who already had a criminal record, said he feared they’d make a case against him for it.

So he testified against Bermudez, as did several others.

“Before I went into the trial court the ADA took me and Frank Kent into his office to rehearse us. I was mad at what I had to do,” Thompson said in his sworn statement. “When I was in court I wasn’t sure no more of what to do. I remember looking at the defendant and thinking ‘he ain’t the kid who did it.’ I said what I was told to say by the ADA… I know now that it was a mistake.”

Bermudez was convicted and given a sentence of 23 years to life.

A year later, all of the witnesses recanted, including Thompson.

After nearly two decades in prison, the case finally imploded completely. State Judge John Cataldo found that Thompson’s forced false testimony was one of a raft of problems with the prosecution of Bermudez: the witnesses, teenagers all, viewed pictures of Bermudez and discussed them while they were all grouped together, violating basic police procedure and rendering their identifications unreliable; one witness feared being charged with the crime himself, and a substantial amount of evidence implicated another gunman.

In the case of Thompson, Cataldo found that he was arrested and threatened in secret, resulting in false testimony that contributed to a wrongful conviction.

“He was arrested and taken to the trial Assistant and told to make the identification or see if the judge would jail him for his lack of cooperation. The resulting testimony was tainted by these actions,” Cataldo said in a 79-page decision.

Thompson and another witness against Bermudez, Cataldo ruled, were left with a “feeling they had no recourse but to walk into court and identify Mr. Bermudez as the shooter, no matter what their doubts might have been.”

A Rare Review for an Overlooked Statute

In the late 1980s, New Jersey’s Hackensack River was suffering from decades of heavy industrial pollution. The 50-mile-long river had absorbed the waste of the state’s booming chemical processing industry. There were high levels of lead, cadmium, petroleum products, and other toxic refuse.

In 1989, state prosecutors were trying to hold polluters to account, and they thought they’d found someone who could help them: a man named Janos Misik, a low-level employee who worked for the Petro King Terminal Corp., a company suspected of dumping petroleum into the river. But Misik failed to attend a scheduled appointment with prosecutors. The prosecutors obtained a material witness order from a state judge and arrested Misik.

Misik’s attorney objected to the arrest. Misik’s employer hadn’t even been indicted, the attorney pointed out; therefore the state had no business obtaining a material witness order to pick him up.

A state judge ultimately found that prosecutors used the warrant as an “oppressive tool which amounted to a clear abuse of the court’s process,” and also identified some glaring deficiencies in the New Jersey law governing material witness orders. For one thing, the judge noted, the statute was over a century old. Second, it didn’t even define the term “material witness.” It didn’t include standards for determining the circumstances under which a witness could be arrested.

The judge suggested the state legislature undertake a review of the law.

So a case of toxic waste dumping, it turned out, gave rise to an uncommon inquiry on the long-obscure issue of material witnesses.

The New Jersey Law Revision Commission— an investigative arm of the state’s legislature— began examining the state’s material witness law in 1990.

Comprised of deans from three New Jersey law schools, two state legislators, and four practicing attorneys, the commission spent nearly two years analyzing academic work on the subject, case law and material witness statutes from all over the country.

It found that other state statutes were similarly out of date. So in 1992, the commission suggested its own reforms and the state legislature adopted them in 1994.

In order to obtain a material witness order from a judge, a New Jersey prosecutor now has to prove by clear and convincing evidence that the person does indeed have information material to the case and will not agree to cooperate.

When judges authorize such orders, witnesses have to be brought immediately to court for hearings in which judges evaluate their testimony and determine whether they need to be held in custody.

To date, there has been no similar move to examine New York’s statute.

At ProPublica’s request, Professor Bennett Gershman, a leading expert on prosecutorial misconduct, reviewed the material witness laws for New Jersey and New York. He suggested that they’re actually quite similar. The laws are not problematic, Gershman said, but rather the compliance of prosecutors with them.

“These are strong-arm tactics under the guise of something that looks official to bring people into the D.A.’s office or hotel room or some other place where the witness is being held secretly incommunicado and the witness is interrogated,” said Gershman, who has closely followed the New York cases involving material witnesses. “It’s possible that material witness order laws are being bypassed in New York as a matter of policy.”

This month, CJR presents "Required Skimming," a daily miniguide to our staffers' beats and obsessions. If we overlooked any of your must-read destinations, please tell us in the comments. Self-styled Siren: Beloved of classic film fans everywhere. Farran Nehme (@selfstyledsiren), a freelance film reviewer for The New York Post, writes about movies in such sparkling prose that you feel compelled...

FAIRWAY, KS -- It's no secret: with a few exceptions, newspapers remain way behind the journalistic curve in taking advantage of what the Web can do. But those same newspapers are still a leading source for important investigative and accountability journalism--especially in areas away from major media markets, like the Midwestern states I cover for CJR. The result is that...

by Blair Hickman

Aug. 16: This post has been corrected and updated.

A top editor at Lean In, the nonprofit offshoot of Facebook COO Sheryl Sandberg’s book about empowering women to achieve their goals, has come under fire for seeking an unpaid intern.

And though many online questioned the ethics of the position, it likely would have been legal for the nonprofit to do so.

Jessica Bennett, Lean In’s Editor-at-Large, posted on Facebook yesterday: "Wanted: editorial intern, to work with our editor (me) in New York. Part-time, unpaid, must be HIGHLY organized with editorial and social chops and able to commit to a regular schedule through end of year. Design and web skills a plus! HIT ME UP. Start date ASAP."

The public was less than pleased. Noting that the unpaid position seemed to conflict with the organization’s mission to help women “pursue their ambitions,” over 200 people replied to Bennett’s post, the bulk of them saying the organization should pony up:

“By restricting it to those who can afford to have done all that and live in NYC without pay on a permanent position, you excluded an awful a lot of people, namely those with less possessions and women included. Your medium and behavior does not meet the message – and that is a tremendous shame.” – Sofia Diogo Mateius

“Unpaid work, be it internships for young women or volunteer positions for older moms, is exploitive. Shame on you lean in. Pay up.” – Michele Morris

“Have to agree, the message is, at best, mixed, here. What you are “offering” and what the organization supposedly stands for, stand in contrast.” – Shawn Eggers Gypsea

It’s worth noting that three-quarters of unpaid interns are women, according to a recent study.

But despite the online uproar, Lean In is likely not under any legal obligation to pay their interns — because Lean In is a nonprofit, any unpaid interns would be deemed “generally permissible” under federal guidelines issued by the Department of Labor.

Within a few hours of her original post, Bennett clarified that she was indeed looking for a volunteer, not an unpaid intern. “Since I joined Lean In, many people have reached out asking if they can volunteer – and specifically, intern. This was MY post, looking for a volunteer to help me in New York. LOTS of nonprofits accept volunteers. This was NOT an official Lean In job posting. Sorry for the confusion.”

Lean In spokeswoman Andrea Saul also sent us a statement emphasizing that the opening was a volunteer position.

“LeanIn.Org, like many nonprofits, has enjoyed the participation of some part-time volunteers to help us advance our education and peer support programs,” Saul said.

We have reached out to Bennett, and will update this post if she responds.

Update: Lean In Pledges to Establish Paid Internship Program

Late Thursday, Lean In president Rachel Thomas posted a statement on Facebook, noting that while the organization has worked with volunteers in the past, the position in question “doesn’t fall within LeanIn.Org’s definition of ‘volunteer.’”

“As a startup, we haven’t had a formal internship program,” she continued. “Moving forward we plan to, and it will be paid.”

When asked what the difference is between an unpaid intern and a volunteer, professor of labor law David Yamada laughed. "If I had the answer to that, I could be a sitting federal judge."

The difference between an unpaid intern and a volunteer at a nonprofit is simply a complicated issue, Yamada said.

"I don’t think anyone thought about this when the law was being drafted. Internships weren’t a big deal in the 1930s when they were drafting this statute. Now the intern economy is raising questions that weren’t an issue before," he said.

Correction: This post has been corrected to note that federal guidelines for unpaid interns at nonprofits are issued by the Department of Labor, not contained in the Fair Labor Standards Act. We also changed the headline from "perfectly legal" to "apparently legal" to reflect this distinction.

Talking Points Memo has a nice follow-up on the NYT's Cory Booker/Waywire story, reporting that the "ridiculous" company, despite having already buck-raked billionaires Oprah, Eric Schmidt, and Reid Hoffman, is still trolling for investors cash. Clarke told TPM she would confirm whether or not Booker had met with potential investors since his campaign began. But minutes later, she called back...

It's hard for a czar to get attention these days. If you listen to the conservative political media, at one point there were at least 32 in the Obama administration. That count may be a teeny bit high, but there are enough random, high-ranking officials running around the executive branch that the most significant events of their tenure may be...

This month, CJR presents "Required skimming," a daily miniguide to our staffers' beats and obsessions. If we overlooked your favorite voice in the mind beat, please tell us in the comments. When writer David Dobbs announced he was moving his blog, Neuron Culture -which covers genes, brains, and everything in between-from Wired to his own platform, the Internet...

by Christie Thompson

This story was co-produced with WNYC.

When Amir Hall entered New York state prison for a parole violation in November 2009, he came with a long list of psychological problems. Hall arrived at the prison from a state psychiatric hospital, after he had tried to suffocate himself. Hospital staff diagnosed Hall with serious depression.

In Mid-State prison, Hall was in and out of solitary confinement for fighting with other inmates and other rule violations. After throwing Kool-Aid at an officer, he was sentenced to seven months in solitary at Great Meadow Correctional Facility, a maximum-security prison in upstate New York.

Hall did not want to be moved. When his mother and grandmother visited him that spring, Hall warned them: If he didn't get out of prison soon, he would not be coming home.

A grainy tape of Hall's transfer on June 18, 2010, shows prison guards spraying chemicals into his cell, forcing him to come out. He barely says a word as he is made to strip, shower, bend over and cough. His head drops, his shoulders slump. His face is blank and expressionless. He stares at his hands, except for a few furtive glances at the silent guards wearing gas masks and riot gear.

"There was somebody who looked defeated, like the life was beat out of him," said his sister Shaleah Hall. "I don't know who that person was. The person in that video was not my brother."

Multiple studies have shown that isolation can damage inmates' minds, particularly those already struggling with mental illness. In recent years, New York state has led the way in implementing policies to protect troubled inmates from the trauma of solitary confinement.

A 2007 federal court order required New York to provide inmates with "serious" mental illness more treatment while in solitary. And a follow-up law enacted in 2011 all but bans such inmates from being put there altogether.

But something odd has happened: Since protections were first added, the number of inmates diagnosed with severe mental illness has dropped. The number of inmates diagnosed with "serious" mental illness is down 33 percent since 2007, compared to a 13 percent decrease in the state's prison population.

A larger portion of inmates flagged for mental issues are now being given more modest diagnoses, such as adjustment disorders or minor mood disorders.

It's unclear what exactly is driving the drop in "serious" diagnoses. But "whenever you draw a magic line, and somebody gets all these rights above it and none below it," said Jack Beck, director of the Prison Visiting Project for the nonprofit Correctional Association of New York, "you create an incentive to push people below." The association was one of a coalition of organizations that called for the change in policy.

The New York Office of Mental Health says the decrease reflects improvements to the screening process. Efforts to base diagnoses on firmer evidence "has resulted in somewhat fewer, but better-substantiated diagnoses" of serious mental illness, said a spokesman for the office in an emailed statement.

In Hall's case, prison mental health staff never labeled his problems as "serious."

Instead, they repeatedly downgraded his diagnosis. After three months in solitary — during which Hall was put on suicide watch twice — they changed his status to a level for inmates who have experienced "at least six months of psychiatric stability."

Two weeks after his diagnosis was downgraded, and two days after he was transferred to solitary at Great Meadow, guards found Hall in his cell hanging from a bed sheet.

As part of a report issued on every inmate death, the Corrections Department's Medical Review Board found no documented reason behind the change in Hall's diagnosis.

A 2011 Poughkeepsie Journal investigation detailed a spike in inmate suicides in 2010, which disproportionately took place in solitary confinement. Death reports from the state's oversight committee obtained by the Journal suggest several inmates who have committed suicide in recent years may have been under-diagnosed.

Hall's family is suing the Corrections Department and the Office of Mental Health, among other defendants, for failing to treat his mental illness and instead locking him in solitary.

"If someone knew anything, had any inkling that there was that going on, why was he put there?" asked his aunt Sonya Hall.

New York State's Office of Mental Health, which is in charge of inmates' mental health care, declined to comment on Hall's case, citing the litigation.

Amir Hall (or Mir, as his family calls him) was originally arrested in October 2007, for the unarmed robbery of a Verizon store. He made off with $86. Released on parole, he lived with his sister Shaleah Hall and her two sons while working at a local Holiday Inn and studying to become a nurse.

"Sometimes I sit there thinking that he's going to walk through the door and make everybody laugh," said Shaleah, who has "In Loving Memory of Amir" tattooed in a curling ribbon on her right bicep. "He was the life of the party. If you met him, you would just love him."

But Hall's mood could shift in an instant, Shaleah said. He was often paranoid, worried that people judged him for being gay. He would snap, then apologize repeatedly for it afterward.

"You had to walk on eggshells sometimes, because you never knew if he was going to be happy or sad that day," Shaleah said. "It was like this ever since we were kids."

One of those outbursts landed Hall back in prison for violating parole, after he got into a fight with Shaleah's friend.

Knowing her brother's history of mental illness, Shaleah said solitary confinement must have "drove him crazy."

"I feel like they treated him like an animal," she said. "They just locked him away and forgot about him."

The lawsuit over Hall's death claims mental health and prison staff ignored recommendations that he receive more treatment, and that staff members failed to properly assess his mental health when he arrived at Great Meadow.

.right-sidebar-media { width: 250px; float:right; margin: 0 0 12px 12px; } .right-sidebar-media h2.definition { font-size: 15px; font-weight: bold; font-family: "ff-meta-serif-web-1", "ff-meta-serif-web-2", "Georgia", serif; margin-bottom: 10px; } .right-sidebar-media p.definition { font-size: 13px; font-family: font-family: "Helvetica Neue", Arial, sans-serif; } .right-sidebar-media p.definition .termtbd { text-transform: uppercase; font-weight: bold; } Timeline of Amir Hall's Case

October 2007 Amir Hall is arrested for robbing $86 from a Verizon store, unarmed.

May 11, 2009 After fighting with his sister’s friend, Hall is given a sentence of 16 months to four years for violating his parole.

Aug. 31, 2009 Officers at Albany County Jail find Hall attempting to suffocate himself. He is sent to a state psychiatric hospital, where he is diagnosed with “serious” depression.

Nov. 3, 2009 Hospital staff drop Hall’s diagnosis to a non-serious case of borderline personality disorder and addiction. He is discharged to Downstate Correctional Facility.

Nov. 13, 2009 Prison mental health staff re-diagnose Hall with adjustment disorder, personality disorder and addiction.

December 2009 Staff decide to take Hall off anti-depressants.

Jan. 2, 2010 Hall is put on suicide watch after cutting himself with a razor.

Feb. 17, 2010 After a series of small prison violations, Hall is sentenced to 21 days in solitary confinement. In March, he gets 30 more days for fighting.

March/April 2010 Hall is put on suicide watch twice while in solitary confinement.

June 4, 2010 Mental health staff drop Hall’s diagnosis to a level for inmates who have experienced at least “six months of psychiatric stability.”

June 9, 2010 Hall is sentenced to seven months in isolation after throwing Kool-Aid at a guard.

June 18, 2010 Prison guards gas Hall out of his cell to move him to a maximum-security prison, where staff fail to give him a health screening or refer him for a mental health review.

June 20, 2010 Hall is found hanging from a bed sheet in his cell. He is pronounced dead at 3:37 p.m.

In a response to the state oversight committee's assessment of Hall's case, the Office of Mental Health said they were retraining staff on screening for suicide risk. The Corrections Department said they were working to improve communication when inmates are transferred to new facilities.

Sarah Kerr, a staff attorney with the Prisoners' Rights Project of the Legal Aid Society, noted Hall's case during a Senate hearing on solitary confinement. "The repeated punitive responses to [Hall] as he psychiatrically deteriorated in solitary confinement exemplify the importance of vigilance and monitoring, and the need for diversion from harmful solitary confinement," she wrote.

Kerr points out that significant improvements have been made for inmates diagnosed above the "serious" mental illness line. The new mental health units provide at least four hours of out-of-cell treatment a day, and speed up an inmate's return to the general population.

"I don't think those improvements should be taken lightly," said Kerr. "In terms of mental health policy, we're way ahead of the country."

But when it comes to solitary confinement, "New York is among the worst states," said Taylor Pendergrass of the New York Civil Liberties Union, which is suing the state over its use of isolation. "Even if you're totally sane and you go into solitary, it's incredibly hard to deal with the psychological toll of that," he said.

Solitary confinement is used in jails and prisons across the country, though there's no reliable data to compare its prevalence among states. Experts say New York stands out for sentencing inmates to solitary for infractions as minor as having too many postage stamps or a messy cell. A report from the NYCLU found that five out of six solitary sentences in New York prisons were for "non-violent misbehavior."

Under the state's new law, all inmates housed in solitary — known in New York as Special Housing Units, or SHU — receive regular check-ins from mental health staff. The screenings are meant to catch inmates not originally diagnosed with a disorder who develop problems in isolation.

But Jennifer Parish, director of criminal justice advocacy at the Urban Justice Center, said she thinks many staff members still view inmates' symptoms as attempts to avoid punishment. "If you don't believe that being in solitary can have detrimental effects to a person's mental health, you're going to see someone who just says, 'I want to get out of here,'" she said.

Beck has seen the same skepticism in conversations with some prison staff. "There's a bias in the system that looks at the incarcerated population as anti-social, malingerers, manipulators," Beck said. "I hear that all the time."

When inmates ask to see mental health staff, "we have found far too often that it appears security staff really resent people asking for these interventions," Beck said. "We have in a few facilities what I think are credible stories of individuals being beaten up when they want to go to the crisis center."

As Sarah Kerr sees it, "if mental health staff are overly concerned that people are feigning illness, that they're conning their way out of special housing ... that will lead to tragedies."

The Corrections Department says any unusual behavior by inmates or attempts to hurt themselves are reported to mental health staff. A spokesman for the Office of Mental Health said "inmates reporting psychiatric symptoms are taken seriously and assessed carefully."

Donna Currao said prison staff ignored her and her husband, Tommy Currao, when he attempted suicide at least 10 times over the course of 10 months in solitary confinement. According to his wife, Currao had been sent to solitary after testing positive for heroin.

Currao's first suicide attempt in solitary was in July 2012, when he tried to overdose on heroin. That October, guards found him attempting to hang himself in his cell. While on suicide watch after he tried again to overdose, Currao broke open his hearing aid and used the metal inside to cut his wrists. (He received a bill of $500 for "destruction of state property," Donna said.)

Both the Corrections Department and the Office of Mental Health declined to comment on Currao's case.

According to the Corrections Department, an inmate can be returned to solitary confinement after being on suicide watch if they're cleared by the Office of Mental Health. In 2011, 14 percent of the 8,242 inmates released from New York's mental health crisis units were sent to solitary confinement.

After just three weeks in isolation, Donna noticed a dramatic change in her husband. He "was withdrawn, all he would do is apologize," Donna said. He was no longer laughing with her, playing cards or chatting with other inmates. She watched him drop from 240 pounds to 160.

Currao stopped writing the almost daily letters he'd sent for 13 years. When Donna persuaded him to start again, as a way to escape, he talked of an overwhelming sadness.

Donna says she repeatedly called the prison. She faxed them copies of Currao's suicidal letters. But he remained in isolation.

"I don't know if they don't want to spend the money, or think it's a joke," she said. "They still thought he wanted out of solitary. He wanted out of the picture is what he wanted."

A survey by the state's independent oversight committee found many family members who said prison officials didn't listen to concerns about inmates' psychological wellbeing. None of the mental health files reviewed by the oversight committee contained information from family members about a prisoner's psychiatric history.

The Office of Mental Health says it's working on creating new procedures to "insure that the call is responded to promptly and in a manner that addresses the family member's concern as best as possible."

Prisoner rights advocates are also working on a new legislative proposal to ensure that mentally ill inmates get the treatment they need. A coalition of groups is drafting a new bill, which would expand protections from solitary for inmates with mental illness, and put a limit on solitary confinement sentences for any prisoner, whether or not they're diagnosed with a disorder.

"Even though there's a law that says you can't do this for people with serious mental illness, it hasn't stopped [Corrections] from using solitary," said Parish. "I think they just replaced it with lower-level tickets instead of some of the most serious ones."

In May, Donna's persistence in trying to get her husband treatment finally saw results. Currao met with a psychologist, and was diagnosed with "serious" anti-social personality disorder and dysthymic disorder. He was moved out of solitary confinement and into one of the 170 Residential Mental Health Treatment beds created under the recent law.

Currao "seems to be 1,000 times better" since entering treatment, Donna said. He talks about wanting to become a counselor when he's released.

But Donna wonders why it took so many suicide attempts and nearly a year of pressure to get her husband a proper diagnosis and the treatment he was legally owed. "They are not enforcing this law," she said. "Why do we have to fight so hard to get them evaluated?"

Hall's family is left with the same questions as they search for answers about his death. "How many more people have to die?" Shaleah asked. "They need help. Locking them away is hurting them more."

by Cora Currier

This week, Attorney General Eric Holder spoke out against the impacts of “draconian” sentences for nonviolent drug offenders. “Too many Americans go to too many prisons for far too long, and for no truly good law enforcement reason,” said Holder.

But in unveiling the new “smart on crime” initiative, Holder skipped mention of the sweeping power the president has to shorten or forgive a federal prisoner’s sentence.

President Obama has given just one person early release from prison. As ProPublica has documented, Obama has overall granted clemency at a lower rate than any modern president, which includes both commutations – early release – and pardons. Last year, ProPublica reported that the Justice Department’s Office of the Pardon Attorney rarely gives positive clemency recommendations to the president. Experts have been calling for reform of the entire clemency process.

“Holder’s speech begs the question, why is not more attention given to the broken pardons office?” said Robert Ehrlich, a former Republican governor of Maryland who recently started a law clinic devoted to pardons. 

One person who is still waiting to hear about his petition for commutation is Clarence Aaron. He has been in prison since 1993, when he was sentenced to three life terms for his role in a drug deal. Aaron was not the buyer, seller, nor supplier of the drugs. It was his first criminal offense.

The White House ordered a fresh review of Aaron’s petition last year after ProPublica found that the  pardon attorney, Ronald Rodgers, had misrepresented Aaron’s case when it was brought to President George W. Bush. An Inspector General’s report released in December supported ProPublica’s findings, and referred the incident to the Deputy Attorney General to determine if “administrative action is appropriate.”

Nine months later, Justice Department spokesman Wyn Hornbuckle says the “issues raised in the report are still being examined.”

In his speech, Holder expressed concern about racial disparities in sentencing and treatment of prisoners. In 2011, a ProPublica investigation found that whites were four times as likely to receive pardons as minorities. Following our story, the Justice Department commissioned a study on racial disparities in pardons. Hornbuckle says that study is “ongoing.”

“The clemency process will need to be invigorated both from the bottom up and the top down,” said Jeffrey Crouch, a professor at American University, who wrote a book on pardons. “One step is the pardon attorney giving applicants a fair review and a positive recommendation. The other step is President Obama being more willing to use his pardon power.”

For now, Holder’s initiative has little to offer prisoners already behind bars. He directed prosecutors to avoid charges that carried mandatory minimum sentences for certain low-level, nonviolent drug offenders and urged the passage of legislation to change those sentencing requirements. But in 2010, there were more than 75,000 people in federal custody that had been given mandatory sentences.

“We’ve been getting a lot of calls asking, does this mean my loved one gets to go home?” said Molly Gill, government affairs counsel at Families Against Mandatory Minimums. “For the vast majority of people it doesn’t change their sentences and it isn’t retroactive.” (Holder did expand “compassionate release” for some elderly prisoners.)  

While clemency does not generally reach wide swaths of prisoners, Presidents Gerald Ford and Jimmy Carter used it to affect policy on a larger scale, creating programs to forgive thousands of Vietnam War draft evaders.

In the 1960s, Attorney General Robert F. Kennedy also took a stand against what he described as “grossly unjust” outcomes of sentencing practices – and used commutations to do so. He directed federal prison wardens to seek out and bring him prisoners deserving of early release. Kennedy acknowledged that presidential commutations were “at best only stop-gaps” in a sentencing regime that needed reform. President John F. Kennedy commuted 100 sentences in total, and President Lyndon B. Johnson 226.

Mark Osler, a law professor at St. Thomas University who runs a clinic on commutations, said Obama could also do more. “Holder’s emphasis on how wrong these laws have been, and how damaging the Justice Department’s enforcement of those laws has been, gives me hope that this only the first step,” Osler said. 

The Wall Street Journal has been doing terrific reporting on the unfair advantages high-frequency traders are getting from news organizations. Its latest page-one story looks at how a Deutsche Börse "news service" helped spark an FBI investigation into how government data is transmitted by publishers. The story comes two months after the Journal reported that Thomson Reuters was charging big...

On Monday night, a panel of journalists and public relations experts gathered at the National Press Club in Washington DC to discuss the role of federal public affairs offices. While communications officers see themselves as useful intermediaries between the public and its government, many reporters regard them as obstructive bureaucrats stemming the flow of information. John Donnelly, a reporter with...

In 2010, the German media conglomerate WAZ sold its Bulgarian Media Group to two millionaire tycoons: Ognian I. Bonev, chairman and executive director of Bulgaria's biggest pharmaceutical company, and Lyubomir Pavlov, a former banker. Included in the purchase were two mass dailies, 24 Chassa and Trud. The latter's longtime editor, Tosho Toshev, was promptly fired. Soon after, Toshev published--in a...

This month, CJR presents "required skimming," a daily miniguide to our staffers' beats and obsessions. If we overlooked any of your must-read destinations, please tell us in the comments. --Authored by law student Benjamin Kabak, Second Avenue Sagas tracks transit news across the New York City, with occasional forays into other parts of the Tri-State area. The blog gets its...

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by Mike Webb

Earlier this month, ProPublica reporter A.C. Thompson and Jonathan Jones – in partnership with PBS Frontline - published a revealing expose on the assisted living industry and the largest provider of those facilities in the U.S. – Emeritus. The pair explained how and why the assisted living business has become so large, why the industry is loosely regulated by the states, and how Emeritus, in its quest for profits, endangered some residents by not providing enough qualified staff to care for them.

For the podcast, Thompson spoke to ProPublica editor-in-chief Stephen Engelberg about assisted living and how they told the narrative through the eyes of one resident (Joan Boice) who was fatally injured while in an Emeritus home. When asked what types of fines the state of California levies against assisted living facilities, Thompson said, “What you see in California typically is if you have an incident that leads to real serious physical harm or the death of a resident, you will see a fine. And that fine will be – wait for it - $150. Every now and then, there’s multiple violations, so you might see $300. And you don’t get the sense that these fines are really having any sort of deterrent effect on the companies that are getting them.”

He continued, “In California, you are going to be in a lot more trouble if you abuse an animal than if you abuse or neglect a senior in one of these facilities – a human being.”

Read the full story and watch the Frontline investigation as well.

by Blair Hickman

We’re very pleased to announce that we have selected an intern to help us investigate the intern economy. Meet Casey McDermott!  

Casey is a recent graduate of Penn State University, and will join us fresh off an internship at the Chronicle of Higher Education, where she covered several aspects of the student experience (including a piece on schools’ role in fostering unpaid internships). Before that, Casey was Editor-in-Chief of the Daily Collegian at Penn State. While there, she guided the paper’s coverage of the Jerry Sandusky scandal, and helped oversee the launch of their mobile app and mobile website.

As an intern herself, McDermott said she’s excited to explore this issue. “There's been no shortage of debate surrounding this issue,” she said. “But it demands serious attention from reporters who are willing to look beyond the rhetoric — examining internships from legal, financial and other perspectives. I'm excited to have the chance to help ProPublica take a closer look at the intern economy and its implications for the people who keep it running.”

We’re excited to add Casey’s unique mix of accountability reporting experience, keen editorial judgment and multimedia skills to our internship team. She’ll start here at ProPublica HQ on September 3rd, and will hit the road soon after that to document the intern experience on the ground. What kind of support is available to those who may not be able to afford an unpaid internship? Are schools doing their part to ensure unpaid internships are educational and beneficial? These are some of the questions Casey will be looking into.

We’re still working out the details of Casey’s route, so stay tuned for updates on how to follow her journey. You can also follow her on Twitter.

And of course, a huge thank you to everyone who made this possible by donating to our Kickstarter campaign! We literally couldn’t have done this without you.

For more from our internships investigation, read our explainer on how unpaid interns aren't protected against sexual harassment, explore lawsuits unpaid interns have brought against employers and share your intern story with us.

by Abrahm Lustgarten

Don Feusner ran dairy cattle on his 370-acre slice of northern Pennsylvania until he could no longer turn a profit by farming. Then, at age 60, he sold all but a few Angus and aimed for a comfortable retirement on money from drilling his land for natural gas instead.

It seemed promising. Two wells drilled on his lease hit as sweet a spot as the Marcellus shale could offer – tens of millions of cubic feet of natural gas gushed forth. Last December, he received a check for $8,506 for a month’s share of the gas.

Then one day in April, Feusner ripped open his royalty envelope to find that while his wells were still producing the same amount of gas, the gusher of cash had slowed. His eyes cascaded down the page to his monthly balance at the bottom: $1,690.

Chesapeake Energy, the company that drilled his wells, was withholding almost 90 percent of Feusner’s share of the income to cover unspecified “gathering” expenses and it wasn’t explaining why.

“They said you’re going to be a millionaire in a couple of years, but none of that has happened,” Feusner said. “I guess we’re expected to just take whatever they want to give us.”

Like every landowner who signs a lease agreement to allow a drilling company to take resources off his land, Feusner is owed a cut of what is produced, called a royalty.

In 1982, in a landmark effort to keep people from being fleeced by the oil industry, the federal government passed a law establishing that royalty payments to landowners would be no less than 12.5 percent of the oil and gas sales from their leases.

From Pennsylvania to North Dakota, a powerful argument for allowing extensive new drilling has been that royalty payments would enrich local landowners, lifting the economies of heartland and rural America. The boom was also supposed to fill the government’s coffers, since roughly 30 percent of the nation’s drilling takes place on federal land.

Over the last decade, an untold number of leases were signed, and hundreds of thousands of wells have been sunk into new energy deposits across the country.

But manipulation of costs and other data by oil companies is keeping billions of dollars in royalties out of the hands of private and government landholders, an investigation by ProPublica has found.

An analysis of lease agreements, government documents and thousands of pages of court records shows that such underpayments are widespread. Thousands of landowners like Feusner are receiving far less than they expected based on the sales value of gas or oil produced on their property. In some cases, they are being paid virtually nothing at all.

In many cases, lawyers and auditors who specialize in production accounting tell ProPublica energy companies are using complex accounting and business arrangements to skim profits off the sale of resources and increase the expenses charged to landowners.

Deducting expenses is itself controversial and debated as unfair among landowners, but it is allowable under many leases, some of which were signed without landowners fully understanding their implications.

But some companies deduct expenses for transporting and processing natural gas, even when leases contain clauses explicitly prohibiting such deductions. In other cases, according to court files and documents obtained by ProPublica, they withhold money without explanation for other, unauthorized expenses, and without telling landowners that the money is being withheld.

Significant amounts of fuel are never sold at all – companies use it themselves to power equipment that processes gas, sometimes at facilities far away from the land on which it was drilled. In Oklahoma, Chesapeake deducted marketing fees from payments to a landowner – a joint owner in the well – even though the fees went to its own subsidiary, a pipeline company called Chesapeake Energy Marketing. The landowner alleged the fees had been disguised in the form of lower sales prices. A court ruled that the company was entitled to charge the fees.

Costs such as these are normally only documented in private transactions between energy companies, and are almost never detailed to landowners.

“To find out how the calculation is done, you may well have to file a lawsuit and get it through discovery,” said Owen Anderson, the Eugene Kuntz Chair in Oil, Gas & Natural Resources at the University of Oklahoma College of Law, and an expert on royalty disputes. “I’m not aware of any state that requires that level of disclosure.”

To keep royalties low, companies sometimes set up subsidiaries or limited partnerships to which they sell oil and gas at reduced prices, only to recoup the full value of the resources when their subsidiaries resell it. Royalty payments are usually based on the initial transaction.

In other cases, companies have bartered for services off the books, hiding the full value of resources from landowners. In a 2003 case in Louisiana, for example, Kerr McGee, now owned by Anadarko Petroleum, sold its oil for a fraction of its value – and paid royalties to the government on the discounted amount – in a trade arrangement for marketing services that were never accounted for on its cash flow statements. The federal government sued, and won.

The government has an arsenal of tools to combat royalty underpayment. The Department of Interior has rules governing what deductions are allowable. It also employs an auditing agency that, while far from perfect, has uncovered more than a dozen instances in which drillers were “willful” in deceiving the government on royalty payments just since 2011. A spokesman for the Department of Interior’s Office of Natural Resources Revenue says that over the last three decades, the government has recouped more than $4 billion in unpaid fees from such cases.

There are few such protective mechanisms for private landowners, though, who enter into agreements without regulatory oversight and must pay to audit or challenge energy companies out of their own pockets.

ProPublica made several attempts to contact Chesapeake Energy for this article. The company declined, via email, to answer any questions regarding royalties, and then did not respond to detailed sets of questions submitted afterward. The leading industry trade group, the American Petroleum Institute, also declined to comment on landowners’ allegations of underpayments, saying that individual companies would need to respond to specific claims.

Anderson acknowledged that many landowners enter into contracts without understanding their implications and said it was up to them to do due diligence before signing agreements with oil and gas companies.

“The duty of the corporation is to make money for shareholders,” Anderson said. “Every penny that a corporation can save on royalties is a penny of profit for shareholders, so why shouldn’t they try to save every penny that they can on payments to royalty owners?”

* * *

Gas flows up through a well head on Feusner’s property, makes a couple of turns and passes a meter that measures its volume. Then it flows into larger pipes fed by multiple pipelines in a process the industry calls “gathering.” Together, the mixed gases might get compressed or processed to improve the gas quality for final sale, before feeding into a larger network of pipelines that extends for hundreds of miles to an end point, where the gas is sold and ultimately distributed to consumers.

Each section of pipeline is owned and managed by a different company. These companies buy the gas from Chesapeake, but have no accountability to Feusner. They operate under minimal regulatory oversight, and have sales contracts with the well operator, in this case Chesapeake, with terms that are private. Until Chesapeake sold its pipeline company last winter, the pipelines were owned by its own subsidiaries.

As in many royalty disputes, it is not clear exactly which point of sale is the one on which Feusner’s payments should be based – the last sale onto the open market or earlier changes in custody. It’s equally unclear whether the expenses being charged to Feusner are incurred before or after that point of sale, or what processes, exactly, fall under the term “gathering.” Definitions of that term vary, depending on who is asked. In an email, a spokesperson for Chesapeake declined to say how the company defines gathering.

Making matters more complicated, the rights to the gas itself are often split into shares, sometimes among as many as a half-dozen companies, and are frequently traded. Feusner originally signed a lease with a small drilling company, which sold the rights to the lease to Chesapeake. Chesapeake sold a share of its rights in the lease to a Norwegian company, Statoil, which now owns about a one-third interest in the gas produced from Feusner’s property.

Chesapeake and Statoil pay him royalties and account for expenses separately. Statoil does not deduct any expenses in calculating Feusner’s royalty payments, possibly because it has a different interpretation of what’s allowed.

“Statoil’s policy is to carefully look at each individual lease, and to take post-production deductions only where the lease and the law allow for it,” a company spokesman wrote in an email. “We take our production in kind from Chesapeake and we have no input into how they interpret the leases.”

Once the gas is produced, a host of opaque transactions influence how sales are accounted for and proceeds are allocated to everyone entitled to a slice. The chain of custody and division of shares is so complex that even the country’s best forensic accountants struggle to make sense of energy companies’ books.

Feusner’s lease does not give him the right to review Chesapeake’s contracts with its partners, or to verify the sales figures that the company reports to him. Pennsylvania – though it recently passed a law requiring that the total amount of deductions be listed on royalty statements – has no laws dictating at what point a sale price needs to be set, and what expenses are legitimate.

Concerns about royalties have begun to attract the attention of state legislators, who held a hearing on the issue in June. Some have acknowledged a need to clarify minimum royalty guarantees in the state, but so far, that hasn’t happened.

“If you have a system that is not transparent from wellhead to burner tip and you hide behind confidentiality, then you have something to hide,” Jerry Simmons, executive director of the National Association of Royalty Owners (NARO), the premier organization representing private landowners in the U.S., told ProPublica in a 2009 interview. Simmons said recently that his views had not changed, but declined to be interviewed again. “The idea that regulatory agencies don’t know the volume of gas being produced in this country is absurd.”

Because so many disputes come down to interpretations of contract language, companies often look to courts for clarification. Not many royalty cases have been argued in Pennsylvania so far, but in 2010, a landmark decision, Kilmer v. Elexco Land Services, set out that the state’s minimum royalty guarantee applied to revenues before expenses were calculated, and that, when allowed by leases, energy companies were free to charge back deductions against those royalties.

Since then, Pennsylvania landowners say, Chesapeake has been making larger deductions from their checks. (The company did not respond to questions about this.) In April, Feusner’s effective royalty rate on the gas sold by Chesapeake was less than 1 percent.

Paul Sidorek is an accountant representing some 60 northeastern Pennsylvania landowners who receive royalty income from drilling. He’s also a landowner himself – in 2009, he leased 145 acres, and that lease was eventually sold to Chesapeake. Well aware of the troubles encountered by others, Sidorek negotiated a 20 percent royalty and made sure his lease said explicitly that no expenses could be deducted from the sale of the gas produced on his property.

Yet now, Sidorek says, Chesapeake is deducting as much as 30 percent from his royalties, attributing it to “gathering” and “third party” expenses, an amount that adds up to some $40,000 a year.

“Now that the royalties are flowing, some people just count it as a blessing and say we don’t care what Chesapeake does, it’s money we wouldn’t have had before,” Sidorek said. But he’s filed a lawsuit. “I figure I could give my grandson a first-class education for what Chesapeake is deducting that they are not entitled to, so I’m taking it on.”

Landowners, lawyers, legislators and even some energy industry groups say Chesapeake stands out for its confusing accounting and tendency to deduct the most expenses from landowners’ royalty checks in Pennsylvania.

“They’ve had a culture of doing cutthroat business,” said Jackie Root, president of Pennsylvania’s chapter of the National Association of Royalty Owners.

Chesapeake did not respond to questions on whether its approach differs from that of other companies.

Root and others report good working relationships with other companies operating wells in Pennsylvania, and say that deductions – if they occur at all – are modest. Statoil, which has an interest in a number of Chesapeake wells, does not deduct any expenses on its share of many of the same leases. In an email from a spokesperson, the company said “We always seek to deal with our lease holders in a fair manner.”

Several landowners said that not only do deductions vary between companies using the same gas “gathering” network – sales prices do as well.

On Sidorek’s royalty statements, for example, Chesapeake and Statoil disclose substantially different sales prices for the same gas moved through the same system.

“If Statoil can consistently sell the gas for $.25 more, and Chesapeake claims it’s the premier producer in the country, then why the hell can’t they get the same price Statoil does for the same gas on the same day?” Sidorek wondered.

He thinks Chesapeake was giving a discount to a pipeline company it used to own. Chesapeake did not respond to questions about the price discrepancy.

Chesapeake may be the focus of landowner ire in Pennsylvania, but across the country thousands of landowners have filed similar complaints against many oil and gas producers.

In dozens of class actions reviewed by ProPublica, landowners have alleged they cannot make sense of the expenses deducted from their payments or that companies are hiding charges

Publicly traded oil and gas companies also have disclosed settlements and judgments related to royalty disputes that, collectively, add up to billions of dollars.

In 2003, a jury found that Exxon had defrauded the state of Alabama out of royalty payments and ordered the company to pay nearly $103 million in back royalties and interest, plus $11.8 billion in punitive damages. (The punitive damages were reduced to $3.5 billion on appeal, and then eliminated by the state supreme court in 2007.)

In 2007, a jury ordered a Chesapeake subsidiary to pay $404 million, including $270 million in punitive damages, for cheating a class of leaseholders in West Virginia. In 2010, Shell was hit with a $66 million judgment, including $52 million in punitive fines, after a jury decided the company had hidden a prolific well and then intentionally misled landowners when they sought royalties. The judgment was upheld on appeal.

Since the language of individual lease agreements vary widely, and some date back nearly 100 years, many of the disagreements about deductions boil down to differing interpretations of the language in the contract.

In Pennsylvania, however, courts have set few precedents for how leases should be read and substantial hurdles stand in the way of landowners interested in bringing cases.

Pennsylvania attorneys say many of their clients’ leases do not allow landowners to audit gas companies to verify their accounting. Even landowners allowed to conduct such audits could have to shell out tens of thousands of dollars to do so.

When audits turn up discrepancies, attorneys say, many Pennsylvania leases require landowners to submit to arbitration – another exhaustive process that can cost tens of thousands of dollars. Arbitration clauses can also make it more difficult for landowners to join class action suits in which individuals can pool their resources and gain enough leverage to take on the industry.

“They basically are daring you to sue them,” said Aaron Hovan, an attorney in Tunkhannock, Pa., representing landowners who have royalty concerns. “And you need to have a really good case to go through all of that, and then you could definitely lose.”

All of these hurdles have to be cleared within Pennsylvania’s four-year statute of limitations. Landowners who realize too late that they have been underpaid for years – or who inherit a lease from an ailing parent who never bothered to check their statements – are simply out of luck.

Even if a gas company were found liable for underpaying royalties in Pennsylvania, it would have little to fear. It would owe only the amount it should have paid in the first place; unlike Oklahoma and other states, Pennsylvania law does not allow for any additional interest on unpaid royalties and sets a very high bar for winning punitive penalties.

“They just wait to see who challenges them, they keep what they keep, they give up what they lose,” said Root, the NARO chapter president. “It may just be part of their business decision to do it this way.”

This month, CJR presents "Required skimming," a daily miniguide to our staffers' beats and obsessions. If we overlooked your favorite awesome financial fraud site, or food mag, or whatever, please tell us in the comments. —Peter Henning, a Wayne State law prof, is a go-to source for all things white collar on the NYT's Dealbook vertical. —If there's is a...