GAO study: nearly half of government credit card expenses improper

From CNN:

Federal employees charged millions of dollars to government credit or debit cards, according to a Government Accountability Office study released Wednesday.

Those charges include Internet dating services, iPods, expensive clothing, a $13,500 dinner and lingerie to be worn during jungle training in Ecuador, the study said.

The audit also found that government agencies could not account for nearly $2 million worth of items, which included computer servers, laptop computers, iPods and digital cameras.

Nearly half of transactions made in the 2006 fiscal year with government credit or debit cards -- referred to as "purchase cards" -- were improper, the study found, and the audit condemned the government-wide "rate of failure" as "unacceptably high."

The improper purchases were either not authorized or did not meet the government's requirements for using purchase cards, the study [(PDF)] said.

What kind of lingerie is worn during jungle training in Ecuador? Was the jungle training itself an improper expenditure, or was that OK?

The Creation of an Evolutionist

Mike Beidler stopped by to post a comment on the post about "truth tickets," and I'm very pleased to see his blog, "The Creation of an Evolutionist," which describes his personal journey from being a young-earth creationist to accepting the fact and theory of evolution. It's people like Mike that are the most likely to have an influence on changing the minds of current young-earth creationists. Because of that, it's also the case that people like Mike often get to take even more heat from creationist organizations than we atheists receive. Those organizations are premised on the assumption that Christianity requires creationism, and Mike is a living, breathing, and forcefully arguing counterexample.

I, like Mike, used to be a young-earth creationist, but my journey continued on to the rejection of Christianity and theism.

Faith-based U.S. history text exposed

The Center for Inquiry has released a detailed critique (PDF) of a U.S. history textbook by James Q. Wilson and John Dilulio, Jr., pointing out that it falsely claims that there's doubt about the very existence of the greenhouse effect, falsely claims that the U.S. Supreme Court has banned prayer in schools (as opposed to teacher-led prayer), falsely claims that the U.S. Supreme Court decision in Lawrence v. Texas overturned Texas's anti-sodomy law on a close 5-4 vote (it was 6-3), falsely claims that the checks and balances of the U.S. Constitution were motivated by worries about original sin, and so on. (A summary can be found at the Friendly Atheist blog.) Wilson is Ronald W. Reagan Professor for Public Policy at Pepperdine University and chairman of the Council of Economic Advisors of the American Enterprise Institute; Dilulio was the first head of George W. Bush's Office of Faith-Based and Community Initiatives and is a professor at the University of Pennsylvania.

The problems in this textbook were uncovered by Matthew LaClair of Kearny, NJ, who previously received a lot of press coverage for his exposure of a U.S. history teacher at his school, David Paskiewicz, who was using the classroom as a forum for proselytizing evangelical Christianity. That story broke in the mainstream media only after being publicized on this blog.

Fox News review of "Expelled"

Roger Friedman at Fox News reviews "Expelled":

"Expelled" is a sloppy, all-over-the-place, poorly made (and not just a little boring) "expose" of the scientific community. It’s not very exciting. But it does show that Stein, who’s carved out a career selling eye drops in commercials and amusing us on sitcoms, is either completely nuts or so avaricious that he’s abandoned all good sense to make a buck.

Looks like "Expelled"'s positive reviews are limited to those by right-wing political talk show hosts on whose shows they're buying advertising.

Student religious freedom act

John Lynch brought my attention this morning to HB 2713, the student religious freedom act, in the Arizona legislature. At first I thought this was like the "academic freedom" bills being pushed by the Discovery Institute (which I believe is also something that the film "Expelled" is being used to push), but those are about defending the ability of teacher to promote nonsense in the classroom, while this bill only defends student-initiated religious expression.

There is one serious problem with the bill, however, and that is its conflation of religious and secular viewpoints: "Each public educational institution shall permit religious viewpoints in the same manner and to the same extent as secular viewpoints are permitted on the same subject matter." If instead, this said merely that if one religious viewpoint is permitted, all religious viewpoints must be permitted, I'd have no problem with it. But this wording has the effect that where you can discuss anything at all, you can also discuss religion. In a science classroom, since science is secular, you can talk about religion. In a math classroom, since math is secular, you can talk about religion. That's ludicrous.

I think the bill will die, if not for the good reason I've just given, for the reason that it does also open things up to all religions and to anti-religion. If students are permitted to wear shirts with a Christian message, they must also be permitted to wear shirts promoting an Islamic message, an atheist message, a Satanic message, or a Pastafarian message. Likewise, if students are permitted to use personal viewpoints in writing an essay or giving a presentation to the class, they may use their viewpoints on religious matters as well. Again, atheism would have to be as welcome as Christianity. (And it's not that atheism is a religion, only that it is a viewpoint on religious matters.)

I suspect the authors and sponsors of the bill--State Representatives Clark, Anderson, Barto, Crump, Groe, Pearce, Robson, Tobin, and Yarbrough, and by State Senators Gorman, Gould, L. Gray, Harper, and Johnson--don't really want that consequence.

I think a few supportive emails are in order, thanking them for endorsing the right of students to argue for atheism in the classroom (and Satanism, and Scientology, a religion that Johnson, Gray, Gorman, and Pearce are familiar with, since they've previously sponsored bills on behalf of the religion).

Fake acupuncture works better than real acupuncture

Orac discusses a recent study in the Clinical Journal of Pain that compared the effects of "real" acupuncture (with real needles) to fake acupuncture (with needles with blunt ends that retract after hitting the skin, and do not puncture it) on test subjects between 2001 and 2003.

The result:

Both treatment groups, "true" and sham acupuncture, experienced decreases in the intensity of arm pain, arm symptoms, and noted improvement in arm function. However, patients in the sham acupuncture group improved more than patients in the "true" acupuncture group in the intensity of arm pain and just as much in measures of arm function and grip strength. The difference between the two groups was not sustained at a followup visit one month after the treatment ended, although the improvement in both groups remained detectable compared to baseline. Indeed, arm pain and arm symptoms scores declined faster in the sham compared with the "true" acupuncture group.

In this study, which was the largest, best-designed trial thus far for acupuncture for arm pain due to RSI, sham acupuncture was better than "real" acupuncture!

Read the details at Orac's Respectful Insolence blog.

Scammers scamming scammers

Marco Cova looks in some detail at the contents of some phishing scam kits targeting particular banks that were released to the public recently. These sorts of kits, containing web code, are ordinarily sold to scammers, but these were given away free. It wasn't out of generosity, but part of a larger scam--the code was written using a variety of obfuscation techniques so that the unwary script kiddie who modifies it to send the captured information to their own email address will not receive it. Instead, that information is sent to various email addresses presumably controlled by the distributor of the scammer-scamming phishing kits.

"Truth Tickets" to "Expelled"

Alonzo Fyfe, the Atheist Ethicist, has come up with an interesting suggestion--rather than purchase a ticket to go see "Expelled," purchase a "truth ticket" by sending a contribution equal in value to a movie ticket ($10 is the suggested number) to the National Center for Science Education. (Click that link, and select "donation only.") Alonzo's sending 10 "truth tickets" worth of payment to the NCSE to promote good science.

I'll match him, and raise him 5 "truth tickets." Anyone else care to buy a few? Pass it on...

UPDATE (April 8, 2008): P.Z. Myers compares this idea to carbon offsets.

The Panda's Thumb has also reported on the idea.

UPDATE: BTW, if you must see the film in the theater (my wife and I rarely go to the movies anymore, since Netflix is so much more convenient, and I don't really have any interest in seeing this movie in any case), wait until after opening weekend. The "stupidity offset" for contributing to the opening weekend box office gross should probably be a much, much larger donation to the NCSE--better to make a smaller donation and see it the following week, if you must.

John Hancock 401Ks suck

Last December, when Kat got her last paycheck of the year, I noticed that her employer's payroll department had allowed a deferral $100 in excess of the IRS limits to her 401K. I've previously run into a similar problem when my employer's 401K plan failed nondiscrimination tests, and I was given a refund of part of my deferrals for a prior year. Kat immediately contacted her employer and 401K plan advisor, and we were told that the excess deferral would be paid out before April 15. In the meantime, I couldn't complete our tax return because we needed to know how much would be paid out (the amount would be different from $100, based on how much the funds it was invested in had lost or gained) and some other information in order to complete the appropriate additional paperwork.

In January, Kat invited me to attend a presentation at her company about their new 401K plan that they would be switching to in late February, through John Hancock. The investment options looked reasonable--a wide variety of funds, including international and emerging market funds, and some index funds, mostly from third parties including Dimensional Fund Advisors. Her employer still wasn't offering any matching funds, but was supposedly covering all plan expenses. A big plus was the availability of a Roth 401K option, which we selected to put all new contributions into. I was still expecting that the excess deferral would be paid out before or at the transition, but of course it didn't happen. The old plan advisor said the new one would now have to deal with it, but that the old plan would issue the 1099-R form. But not until 2009, so I'd need to collect information myself to fill out a substitute Form 4852, because this would still count as 2007 income.

In early March, we got online access to the new 401K, and we were in for a surprise. I'm used to accounting for all of our investments using Quicken, which allows downloading of stock quotes via the Internet. But strangely, none of the prices reported online via John Hancock bore anything but a slight resemblance to the stock prices of the underlying funds we had selected to invest in. Rather, John Hancock's website reported all of the funds as "subaccounts" with "units" instead of shares, and "unit values" instead of share prices. There seems to be no way to get the unit values on a daily basis, only when a transaction occurs, and then I get to enter them manually. It may be possible to import into Quicken by downloading the transaction history as a CSV document and writing a script to change its format, which I'm sure I'll pursue in due time.

If units were equal to shares, we were paying $2-$5 a share more than the market share price for every purchase. Fortunately, that doesn't appear to be quite how it works, though I'm still unsure of the details since the plan advisor had made no mention of this. The John Hancock materials and plan administrators do not seem willing to explain in any detail, beyond noting that there are additional fees hidden in these costs, and that there is a benefit in getting access to A-shares of these funds at a discount. So much for the employer covering all of the plan costs.

But we still needed to get the incorrect excess deferral refunded so that we could file our tax return. Finally, the John Hancock site showed that a check for $97.39 had been issued on March 20--but with no accounting for any subtractions of units from any of the subaccounts. The check arrived in our hands only yesterday--April 5--apparently delivered by pony express. The documentation with the check showed that there had been a further $30 transaction fee deducted from the account, eating away another third of that incorrect deferral "investment." It also, helpfully, reported a number of units for both the check and the fee, something the online transaction history left unstated. It didn't, however, show how many units were taken from each subaccount. I compared the number of units that we had purchased through all the transactions in the history, compared the difference to what John Hancock is currently reporting, and found that the difference was close to, but not identical to the sum of the units that had supposedly been taken out. This was made slightly more difficult by the fact that while the site reports on the dollar total of the Roth 401K, it only reports the units per subaccount as a combined total of the Roth and traditional 401Ks.

In attempting to check again in more detail today, I found that John Hancock's site doesn't permit users to look at transaction histories on Sundays (or before 9 a.m. ET or after 9 p.m. ET on Saturday, or between 3 a.m. and 7 a.m. ET on weekdays). I could still look at total holdings, however--I'm not sure what kind of rule is being followed here with this restriction, religious or otherwise.

Doing a little searching online, I see multiple complaints about extortionately high expense ratios on John Hancock 401Ks. Apparently John Hancock is the choice of plan provider for small employers who want to minimize their costs and shift them to their employees in a relatively untransparent manner. For comparison, most index funds have relatively low expense ratios. I have some money invested in USAA's S&P 500 Members Shares Index Fund, which has an expense ratio of 0.19%. (Once I reach $100,000 in that fund, I can move it to USAA's S&P 500 Member Rewards Index Fund, which has an even lower expense ratio of 0.09%.) My 401K, through Fidelity, is mostly in Fidelity's Spartan U.S. Equities Index, another S&P 500 index, with an expense ratio of 0.09%. John Hancock's 500 Index Fund, by contrast, has an expense ratio of 0.54%, plus an apparently undisclosed "sales and service fee," which apparently goes to third party plan advisors and managers. That is ridiculously high for an index fund. John Hancock's other funds are worse. (We at least intentionally selected funds that had the lowest available expense ratios of the types we wanted, which included DFA's international, emerging markets, and small cap funds.)

I advise that you check out the 401K plan offerings of a prospective employer and weigh them as part of your decision in taking a job there. If they use John Hancock, that should be a mark against them. And once you leave a company that has a 401K through John Hancock, I recommend immediately rolling it over into an IRA with better investment options.

If any readers can shed additional light on how John Hancock's "subaccounts" and "units" work, along with any advice on how to get more transparency and accountability out of them, I'd appreciate it. Other reports of experiences with John Hancock are also welcome.

UPDATE (April 10, 2008): I can get per-day unit values from the John Hancock site, but only for the previous day's price, and there's no way to download them in an importable format except with the quarterly statements, so if I want them in Quicken I need to look them up and input them manually, or just do it once per quarter.

UPDATE (June 2, 2008): As moneyman2424's comment below indicates, John Hancock, an insurance company, sells 401K investment options that are actually annuities, which have their own expenses on top of the underlying equities. There's a good discussion of this subject at the FundAlarm discussion board.

UPDATE (July 19, 2008): The John Hancock 401K suckage continues. Their website is down all weekend for maintenance, and the second quarter of 2008 is the second quarter in a row in which there have been extortionate unexplained fees, this time wiping out all gains and then some for the quarter. There are two line items for fees, one simply labeled "fees," and the other labeled "RIA investment advisory fee." An RIA is a "registered investment advisor," but we've received no investment advice from anyone in the second quarter, or at all, for that matter. There was a presentation from someone explaining the 401K when we signed up, but he offered no investment advice worth paying for, simply explaining the funds and offering some suggested allocations which we didn't follow. He also failed to mention any fees (rather, he said that the employer would be covering all of the fees, which was obviously not true), failed to point out expense ratios, and failed to mention that we're investing in "units" in annuity "subaccounts" rather than actual shares in actual mutual funds. In short, if anything he should be paying out compensation for his omissions rather than receiving a cut.

UPDATE (July 26, 2008): Another complaint--John Hancock reports unit prices to three decimal points. With every reported purchase, there are several funds where the purchase price per unit is a tenth of a cent above the reported unit price for the day. It's just another way for them to collect a little bit more money in a non-transparent manner.

UPDATE (July 28, 2008): CNN/Money ran a story on July 23 about living with bad 401Ks.

Arizona ranks dead last in 2007 income growth

Arizona ranked #11 for income growth among the states in 2006, but dropped to dead last in 2007, primarily due to the fact that so many jobs in the state have been dependent upon real estate.

Note that one economist quoted in the cited article expressed skepticism about this result, and attributes it instead to an overestimate of Arizona population growth by the Bureau of Economic Analysis.