The Morning Dispatch: Cuomo Under Fire for Undercounting Nursing Home Deaths

Happy Friday! It is National Corn Chip Day: Please celebrate responsibly.

Quick Hits: Today’s Top Stories

• U.S. gross domestic product increased at a 4 percent annual rate in the fourth quarter of 2020, according to a Department of Commerce report published yesterday. For 2020 as a whole, U.S. GDP declined by 3.5 percent, the largest contraction since the end of World War II.

• Novavax—a biotech company that participated in Operation Warp Speed—announced Thursday its COVID-19 vaccine was 89.3 percent effective in a Phase III clinical trial conducted in the U.K. It was, however, only about 50 percent effective in a smaller trial conducted in South Africa, with most of the infections attributed to the new variant first discovered in that country.

• Health officials in South Carolina have identified the first two confirmed cases of the more transmissible coronavirus variant first discovered in South Africa. Officials said there is “no known travel history and no connection between these two cases” at this time, meaning the variant is likely already spreading within the United States.

• The Pentagon said Thursday it would not commit to a full drawdown of U.S. troops in Afghanistan by May—despite an agreement brokered by the Trump administration last year—because the “Taliban have not met their commitments.” 

• President Biden yesterday issued a memorandum rescinding the “Mexico City policy” that prevented the United States Agency for International Development (USAID) from providing aid to any foreign organization that provides abortions or abortion counseling. The rule has been implemented and revoked by presidential administrations along party lines dating back to Ronald Reagan.

• President Biden also signed an executive order instructing the Department of Health and Human Services to “consider establishing a Special Enrollment Period” for uninsured Americans to enroll in coverage through the Affordable Care Act marketplace.

• Stock trading platforms like Robinhood, Webull Financial, and E*Trade placed restrictions yesterday on buying shares of GameStop and AMC Entertainment after retail investors drove the price of the securities through the roof earlier in the week. Several of the brokerages said the restrictions were necessary to satisfy mandates from their clearing firm. Lawmakers on both sides of the political aisle, however, have expressed interest in holding hearings to determine whether retail investors were unfairly prevented from making trades out of deference to larger institutional investors. 

• New York Attorney General Letitia James, a Democrat, released a report detailing how Gov. Andrew Cuomo’s administration had undercounted the total number of nursing home COVID-19 deaths by several thousand. The report does not affect the total number of coronavirus-related deaths in New York, but the number attributed to nursing homes was revised upward by health department officials on Thursday by more than 3,800.

• Michigan Sen. Gary Peters was named chair of the Democratic Senatorial Campaign Committee on Thursday. The DSCC is responsible for recruiting and fundraising for Democratic candidates for Senate. 

• At least six people died in a Georgia food packing plant accident on Thursday when a liquid nitrogen line ruptured within the facility. About a dozen others were hospitalized.

• The United States confirmed 173,565 new cases of COVID-19 yesterday per the Johns Hopkins University COVID-19 Dashboard, with 8.3 percent of the 2,080,610 tests reported coming back positive. An additional 4,190 deaths were attributed to the virus on Thursday, bringing the pandemic’s American death toll to 433,052. According to the COVID Tracking Project, 104,303 Americans are currently hospitalized with COVID-19. According to the Centers for Disease Control, 48,386,275 COVID-19 vaccine doses have been distributed nationwide, and 26,193,682 have been administered.

Cuomo’s Nursing Home Decision Even Worse Than You Thought 

New York Attorney General Letitia James released a 76-page report on Thursday detailing the vast discrepancies between official nursing home deaths publicized by Democratic Gov. Andrew Cuomo’s health department and those disclosed to her office during a months-long probe. Based on the latter count, the Cuomo administration has been providing New York residents with misleading figures since the outset of the pandemic, significantly undercounting COVID-19 deaths in long-term care facilities.

The reason? In what state health officials have downplayed as a simple clerical error, the Department of Health’s official count excluded residents who contracted coronavirus in nursing homes but were later transferred to hospitals. “Preliminary data also reflects apparent underreporting to DOH by some nursing homes of resident deaths occurring in nursing homes,” the report states. “In fact, the OAG [Office of the Attorney General] found that nursing home resident deaths appear to be undercounted by DOH by approximately 50 percent.”

“The DOH reporting system explicitly requires facilities to correct inaccurate reporting,” it continued. “Either such correction was not made by a number of facilities, or data were not reflected in DOH’s published data for other reasons.”

Let’s be clear what James’ investigation does, and does not, allege. The Cuomo administration, she finds, did not reduce the total number of deaths attributed to the coronavirus in the state—42,639 as of last night, the most in the country. Rather, the administration merely reduced the number of those deaths that can be traced back to nursing homes.

New York State Health Commissioner Dr. Howard Zucker focused on this distinction in his response to the report. “The word ‘undercount’ implies there are more total fatalities than have been reported; this is factually wrong,” he said in a lengthy statement. “The OAG suggests that all should be counted as nursing home deaths and not hospital deaths even though they died in hospitals. That does not in any way change the total count of deaths but is instead a question of allocating the number of deaths between hospitals and nursing homes. DOH has consistently made clear that our numbers are reported based on the place of death. DOH does not disagree that the number of people transferred from a nursing home to a hospital is an important data point, and is in the midst of auditing this data from nursing homes.”

The report is particularly damning because Cuomo and the Department of Health have faced months of criticism for their March 2020 order requiring New York nursing homes to accept patients infected with COVID-19. Ostensibly, the order was implemented to prevent hospitals and intensive care units from becoming overwhelmed. “No resident shall be denied re-admission or admission to the NH solely based on a confirmed or suspected diagnosis of COVID-19,” the memo read. “NHs are prohibited from requiring a hospitalized resident who is determined medically stable to be tested for COVID-19 prior to admission or readmission.”

The policy stayed on the books for 46 days and led to about 6,300 COVID-19 patients being admitted to long-term care facilities without being tested.

The policy was criticized when it was announced, with many predictions that it’d result in a spike in nursing home cases and deaths. Not only do nursing homes host the country’s most vulnerable populations, but they’re also high-risk sites for disease outbreaks given their close quarters and large staffs. An association representing nursing home doctors told the Wall Street Journal one day after the directive was handed down that “admitting patients with suspected or documented Covid-19 infection represents a clear and present danger to all of the residents of a nursing home.”

It’s worth remembering where we were back in March. We understood very little about the virus, although we knew that it was absolutely ravaging New York City. It was inevitable that leaders were going to make mistakes. “We can do our best to understand rapidly unfolding events,” David wrote in a French Press at the time. “But the entire time, we should remind ourselves that the fog of war is real, and many things we think we know today may turn out to be wrong tomorrow.”

Cuomo, however, has shown next to no contrition for what was clearly an error, and spent the intervening months deflecting and seeking to blame others. 

In July, the Health Department—in conjunction with McKinsey & Company—issued a report looking into the nursing home issue and found, miraculously, that “nursing home admissions from hospitals were not a driver of nursing home infections or fatalities.” Rather, the report blamed nursing home staff for transmitting the virus to residents.  

Cuomo was asked about this on MSNBC in October. “Yes, people in nursing homes died, and they attacked me and all the other Democratic governors with that,” he said, boasting that New York was 46th out of 50th in terms of percentage of death taking place in long-term care facilities. (A fact checker rated this claim “mostly false,” and that was months before Thursday’s revelations.) “We’ve done a full study of it. The virus came into nursing homes from the staff.”

In the same interview, Cuomo tried to pretend like his March 25 directive never happened. “There was never a directive that said ‘We will send COVID-positive people back to nursing homes,’” he said. “The directive, which was modeled on the federal directive, said you cannot discriminate.”

Cuomo was on MSNBC that day to promote the bookhe published during the pandemic, titled American Crisis: Leadership Lessons from the COVID-19 Pandemic.It’s a 370-page tome written to promote Cuomo’s “leadership” despite the fact that New York has experienced the most COVID deaths of any state in the country—and the second most based on deaths per 100,000 people, trailing only New Jersey. 

“In some ways I was not prepared for the moment, because no one could truly be prepared for the moment,” he writes in the book’s introduction. “In other ways, I have spent my whole life preparing for it.”

Fox News senior meteorologist Janice Dean lost both of her in-laws in New York elder care facilities last year, and she has pushed to bring attention to Cuomo’s decision making in the months since.

“When [Cuomo’s book] came out, I think the nursing home issue was dealt with in two pages, and he blamed everything and everyone else and never took any accountability or responsibility for it,” Dean told The Dispatch.She added that she has been bullied by Cuomo’s staff for criticizing him on the air: “I was told that I need to watch my back.”

Dean thinks that calling for Cuomo’s resignation in response to his mishandling of the coronavirus pandemic is a “short-term solution” to the problem. “I actually would like to see them on the stand,” she said of Cuomo and his Department of Health. “Answering questions and having to tell the whole truth and nothing but the truth, and have it documented so that we never have to go through something like this again. I really think this should be the end of his administration.”

GameStop, Part Deux

In yesterday’s TMD, we brought you up to speed on the fascinating fight between the r/WallStreetBets online community of hobbyist investors and Wall Street hedge funds over shares in the video game retail company GameStop. The investing fight continues. The share price caromed around wildly again, reaching a low of $126 and a high of  $492 before ending the day at $197. It was at $194 during after-hours trading as of early this morning. The accompanying interpersonal fight, however, has gotten far nastier.

That’s because, on Thursday morning, retail investors looking to buy GameStop using trading apps like Robinhood or WeBull were hit with a surprise: The platforms would permit users only to sell shares in GameStop, not buy them. Robinhood, the most downloaded app in the nation in recent days, has been the most popular way for amateur investors to participate in GameStopmania. The effect of the restrictions was to artificially lower the price at a time when only better-connected investors had the opportunity to capitalize on it.

The r/WallStreetBets crowd—which already saw the fight as a sort of class warfare clash with the financial elite—went ballistic, accusing Robinhood of rigging the game to ensure the stock price would fall. The restrictions also attracted the attention of lawmakers on both sides of the aisle in Congress.

“This is unacceptable,” tweeted progressive Democratic Rep. Alexandria Ocasio-Cortez. “We need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.”

“I find it very disturbing,” GOP Sen. Pat Toomey told reporters yesterday, “that a platform would suddenly freeze out retail investors who are simply exercising their right to make a purchase.”

“It’s going to end badly for most, that’s a bubble, that’s gonna burst and it’s gonna end up collapsing in price,” Toomey continued. “But people should be free to make the investments.”

Democrats in both the House and Senate have already pledged to hold hearings about the matter in the coming weeks. “People on Wall Street only care about the rules when they’re getting hurt,” Sen. Sherrod Brown said. “American workers have known for years that the Wall Street system is broken—they’ve been paying the price. It’s time for SEC and Congress to make the economy work for everyone, not just Wall Street.”

Why have the restrictions been implemented? It’s possible such hearings will unearth a nefarious plot between the brokerages and hedge funds to collude and hang the little guy out to dry, but the explanation is likely far more banal. 

“As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits,” the platform’s co-founder Vlad Tenev said yesterday. “Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.”

“To be clear,” Tenev reiterated, “this decision was not made on the direction of any market maker we route to or other market participants.”

Bloomberg reported last night that Robinhood has tapped into “several hundred million dollars” from its banking credit lines in order to maintain solvency through a tumultuous few days. The New York Timesadded that Robinhood on Thursday raised more than $1 billion from existing investors, including Sequoia Capital and Ribbit Capital, to ensure that it wouldn’t need to place even more restrictions on user trading.

“Look, it is not negotiable for us to comply with our financial requirements and our clearinghouse deposits,” Tenev said Thursday. “We have to do that.”

Citadel Securities, one of the hedge funds on the receiving end of the most social media ire yesterday, also denied any involvement in the various brokerages’ decisions. “Citadel is not involved in, or responsible for, any retail brokers’ decision to stop trading in any way,” a spokesperson said in a statement. “Citadel Securities has not instructed or otherwise caused any brokerage firm to stop, suspend, or limit trading or otherwise refuse to do business.”

Worth Your Time

• In a piece written for the Los Angeles Times, Chris Stirewalt—the former political editor of Fox News who was laid off earlier this month—reflects on his time in cable news and what’s wrong with the medium. “Ratings, combined with scads of market research, tell [cable news producers] what keeps viewers entranced and what makes them pick up their remotes,” Stirewalt writes. “Whatever the platform, the competitive advantage belongs to those who can best habituate consumers, which in the stunted, data-obsessed thinking of our time, means avoiding at almost any cost impinging on the reality so painstakingly built around them. As outlets have increasingly prioritized habituation over information, consumers have unsurprisingly become ever more sensitive to any interruption of their daily diet. … Having been cosseted by self-validating coverage for so long, many Americans now consider any news that might suggest that they are in error or that their side has been defeated as an attack on them personally.”

• Over at FiveThirtyEight, Maggie Koerth and Amelia Thomson-DeVeaux have put together a thorough and data-driven analysis of polarization trends in the United States: How and why we got here, what the dividing lines are, and whether there’s any hope for “unity” in the Biden era. As “political labels burrowed their way into the depths of Americans’ identities, politics has gained the power to color and shape the way we think about parts of ourselves that aren’t necessarily political,” they write. “Everything, in other words, is partisan now. And all-or-nothingism has, accordingly, become the way politics is practiced. … That’s not just the result of increasing polarization, of course—there’s a twisted mess of forces at work. Eroding trust in political institutions has increased distrust in mainstream politics, which in turn fuels conspiracy theories and encourages politicians to embrace fringe politics, which makes compromise and deescalation even less likely.”

• As COVID-19 vaccines have rolled out across the country, public health officials have done their best to lower expectations by highlighting all of the limitations of inoculations. Full protection doesn’t kick in until a week after the second dose, we don’t know with confidence yet whether vaccinated individuals can still transmit the virus, and the vaccines may be somewhat less effective against new COVID variants. Somewhat lost in this conversation is the fact that the vaccines are really freaking great. “Advising people that they must do nothing differently after vaccination—not even in the privacy of their homes—creates the misimpression that vaccines offer little benefit at all,” Harvard epidemiologist Julia Marcus writes in The Atlantic. “Vaccines provide a true reduction of risk, not a false sense of security. And trying to eliminate even the lowest-risk changes in behavior both underestimates people’s need to be close to one another and discourages the very thing that will get everyone out of this mess: vaccine uptake.”

Presented Without Comment

Also Presented Without Comment

Toeing the Company Line

• On yesterday’s episode of Advisory Opinions, David and Sarah break down a federal judge’s temporary restraining order blocking the Biden administration’s 100-day pause on deportations, discuss a pro-Trump influencer being charged with interfering in the 2016 election through voter suppression, and dive into the cultural ramifications of this week’s GameStop rally on Wall Street.

• Thursday’s edition of Vital Interests (🔒) features Thomas Joscelyn’s analysis of Chinese leader Xi Jinping’s speech at the World Economic Forum earlier this week. “Xi may think that he can maintain a balance of power through international institutions while China continues to rise,” he writes. “But if the new Biden administration adheres to the [National Security Council’s “U.S. Strategic Framework for the Indo-Pacific], that won’t be possible. ‘Past diplomacy has often been broad and shallow, which suits China’s interests,’ the framework reads. The same can be said of Xi’s rhetoric.”

Let Us Know

This whole r/WallStreetBets saga has us wishing we bought GameStop at its exact lowest price and sold it at its exact highest. Or, apparently, that we got in on the ground floor of some cryptocurrency called “Dogecoin.” We didn’t, though.

Do you have any “I could’ve been rich!” missed opportunities in your past that still haunt you?

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Haley Byrd Wilt (@byrdinator), Audrey Fahlberg (@FahlOutBerg), Charlotte Lawson (@charlotteUVA), and Steve Hayes (@stephenfhayes).