Listen to Securities Attorney Tom Krebs on National Public Radio’s Planet Money.
Listen to Securities Attorney Tom Krebs on National Public Radio’s Planet Money.
Trump’s Business Ties in the Gulf Raise Questions About His Allegiances
LONDON — President Trump has done business with royals from Saudi Arabia for at least 20 years, since he sold the Plaza Hotel to a partnership formed by a Saudi prince. Mr. Trump has earned millions of dollars from the United Arab Emirates for putting his name on a golf course, with a second soon to open. He has never entered the booming market in neighboring Qatar, however, despite years of trying. Now a feud has broken out among these three crucial American allies, and Mr. Trump has thrown his weight firmly behind the two countries where he has business ties, raising new concerns about the appearance of a conflict between his public role and his financial incentives. Mr. Trump has said he is backing Saudi Arabia and the United Arab Emirates because Qatar is “a funder of terror at a very high level.” But his stance toward Qatar, which is host to the largest American air base in the region, has differed sharply from the positions of the Pentagon and State Department. The secretaries of defense and state have stayed neutral, urging unity against the common enemy of the Islamic State. Mr. Trump is the first president in 40 years to retain his personal business interests after entering the White House. Other senior officials in the executive branch are required to divest their assets. Critics say his singular decision to hold on to his global business empire inevitably casts a doubt on his motives, especially when his public actions dovetail with his business interests. “Other countries in the Middle East see what is happening and may think, ‘We should be opening golf courses’ or ‘We should be buying rooms at the Trump International,’” said Brian Egan, a State Department legal adviser under the Obama administration. “Even if there is no nefarious intent on behalf of the president or the Trumps, for a president to be making money from business holdings in sensitive places around the world is likely to have an impact.” A spokesman for the White House declined to address questions about the appearance of a conflict of interest. The spokesman, Michael Short, said in an email only that Mr. Trump had “formally extracted himself” from management of his business, the Trump Organization. More:
AP Exclusive: Manafort had plan to benefit Putin government
WASHINGTON (AP) — President Donald Trump’s former campaign chairman, Paul Manafort, secretly worked for a Russian billionaire to advance the interests of Russian President Vladimir Putin a decade ago and proposed an ambitious political strategy to undermine anti-Russian opposition across former Soviet republics, The Associated Press has learned. The work appears to contradict assertions by the Trump administration and Manafort himself that he never worked for Russian interests. Manafort proposed in a confidential strategy plan as early as June 2005 that he would influence politics, business dealings and news coverage inside the United States, Europe and the former Soviet republics to benefit the Putin government, even as U.S.-Russia relations under Republican President George W. Bush grew worse. Manafort pitched the plans to Russian aluminum magnate Oleg Deripaska, a close Putin ally with whom Manafort eventually signed a $10 million annual contract beginning in 2006, according to interviews with several people familiar with payments to Manafort and business records obtained by the AP. Manafort and Deripaska maintained a business relationship until at least 2009, according to one person familiar with the work. “We are now of the belief that this model can greatly benefit the Putin Government if employed at the correct levels with the appropriate commitment to success,” Manafort wrote in the 2005 memo to Deripaska. The effort, Manafort wrote, “will be offering a great service that can re-focus, both internally and externally, the policies of the Putin government.” More:
Republicans slam Trump’s new policy toward Cuba
President Trump’s new U.S. policy toward Cuba was met with strong opposition from within the Republican Party on Friday. Trump announced a slew of new restrictions that curtail travel and commercial ties between the U.S. and Cuba, fulfilling one of his campaign promises to roll back Obama-era rules with the communist country. “I am canceling the last administration’s completely one-sided deal with Cuba,” Trump said in Miami’s Little Havana neighborhood, where he announced the change. The move was immediately criticized by Republican members in both houses of Congress, including Rep. Justin Amash (R-Mich.), who accused Trump of “dancing with the Saudis and selling them weapons” while talking about national security. Rep. Tom Emmer (R-Minn.) joined in Amash’s criticism, accusing Trump of abandoning his campaign promise to fight the “status quo.” Emmer also released a statement hitting the Trump administration over the decision. “Most importantly, today’s announcement creates a very real security risk for the American people and our homeland by inviting foreign nations into our backyard to fill a void that today’s announcement is creating,” Emmer wrote Friday. Sens. Jeff Flake (R-Ariz.) and Patrick Leahy (D-Vt.), who co-sponsored the Freedom to Travel to Cuba Act with 53 other senators, bashed Trump for the abrupt reversal of the Obama administration’s policy. “Any policy change that diminishes the ability of Americans to travel freely to Cuba is not in the best interests of the United States or the Cuban people. It is time Senate leadership finally allowed a vote on my bipartisan bill to fully lift these archaic restrictions which do not exist for travel by Americans to any other country in the world,” Flake wrote in a statement. Leahy accused the White House of “re-declaring war” on Cuba with the new policy. “This is a hollow retreat from normalization that takes a swipe at Americans’ freedom to travel, at our national interest, and at the people of Cuba who yearn to reconnect with us – all just to score a political favor with a small and dwindling faction here at home,” Leahy wrote. “This White House, by reaffirming the embargo, has re-declared war on the Cuban people.” Leahy and Flake’s bill, if passed, would lift the restrictions on U.S. tourism in Cuba. It has 55 total co-sponsors but has not yet been brought to the floor for a vote in the Senate.
Russia considers opening military base in Cuba
WASHINGTON -Russia is looking to expand its military presence and has its eye on Cuba and other Latin American countries. Defense Minister Sergei Shoigu said Russia has come up with a list of countries where it’s considering opening military bases. They include Cuba, Nicaragua, Venezuela and Vietnam, according to Russia’s state-owned RIA Novosti news agency. “The talks are under way,” Shoigu told reporters in Moscow. Russia has made several inroads in Cuba, including in nuclear energy, train repair and air traffic control technology. Cuban President Raul Castro visited Moscow last year to attend the 70th anniversary celebration of the defeat of the Nazis in World War II and the Red Army’s key role in the defeat. Cuban state media has cited the Russian military overtures, but the Castro administration has not offered any public indication of whether they’re welcomed. Gregory Weeks, the editor of the academic journal The Latin Americanist, doubts Cuba would allow the Russian government to open a military base on the island as it could be seen as a threat to the United States at a time when the island nation is seeking better relations with its larger northern neighbor. “I don’t see any chance of that happening,” said Gregory Weeks, the chairman of the department of political science and public administration at the University of North Carolina at Charlotte. “I don’t think Cuba want this. Cuba just spent years trying to improve relations with the U.S.. If they allow Russia to open a military base, all that would blow up.” Russia pulled out of Cuba and Vietnam in the early 2000s as part of efforts to lower its military presence and improve ties with the United States. They included closing it Lourdes signals intelligence base in Cuba and the Cam Rahn naval base in Vietnam, which the country is considering reopening. Russia has made inroads in Nicaragua, which has raised concerns in Washington. It was one of several reasons cited by members of Congress who voted to restrict Nicaraguan President Daniel Ortega government’s access to loans from international financial institutions unless it accepts international observers and takes other steps to promote democracy.
Cuban leader Raul Castro says he will retire in 2018
Cuban President Raul Castro announced on Sunday he will step down from power after his second term ends in 2018, and the new parliament named a 52-year-old rising star to become his first vice president and most visible successor. “This will be my last term,” Castro, 81, said shortly after the National Assembly elected him to a second five-year tenure. In a surprise move, the new parliament also named Miguel Diaz-Canel as first vice president, meaning he would take over if Castro cannot serve his full term. Diaz-Canel is a member of the political bureau who rose through the Communist Party ranks in the provinces to become the most visible possible successor to Castro. Raul Castro starts his second term immediately, leaving him free to retire in 2018, aged 86. Former President Fidel Castro joined the National Assembly meeting on Sunday, in a rare public appearance. Since falling ill in 2006 and ceding the presidency to his brother, the elder Castro, 86, has given up official positions except as a deputy in the National Assembly. The new government will almost certainly be the last headed up by the Castro brothers and their generation of leaders who have ruled Cuba since they swept down from the mountains in the 1959 revolution. Cubans and foreign governments were keenly watching whether any new, younger faces appeared among the Council of State members, in particular its first vice president and five vice presidents. Their hopes were partially fulfilled with Diaz-Canel’s ascension. He replaces former first vice president, Jose Machado Ventura, 82, who will continue as one of five vice presidents. Commander of the Revolution Ramiro Valdes, 80, and Gladys Bejerano, 66, the comptroller general, were also re-elected as vice presidents. More:
Russia to target any ‘flying objects’ over Syria where its aviation is active: agencies
Russia’s Defense Ministry said on Monday it would view as targets any flying objects over Syria in the areas of the country where its air forces operate, Russian news agencies reported. The statement followed after a U.S. warplane shot down a Syrian army jet on Sunday in the southern Raqqa countryside, with Washington saying the jet had dropped bombs near U.S.-backed forces and Damascus saying the plane was downed while flying a mission against Islamic State militants. The Defense Ministry also said that it was suspending its interaction with the United States on preventing air incidents over Syria from June 19, the agencies reported. The U.S. did not use its communication channel with Russia ahead of the downing of the Syrian government warplane, the ministry was quoted as saying.
France’s Emmanuel Macron seizes big majority in parliament
PARIS — French President Emmanuel Macron won a large majority in the lower house of parliament Sunday, freeing his hand to carry out an agenda that includes overhauling a rigid labor code. A projection for France 2 television after the second round of the parliamentary election showed an alliance led by Macron’s centrist La République En Marche (LRM) party winning 361 seats out of 577 in the National Assembly, well over the threshold for an absolute majority. However, the victory fell short of forecasts that Macron’s camp would claim as many as 460 seats and was also marred by a record-high abstention rate of around 56 percent. In coming months, voters’ relative lack of enthusiasm will provide fuel for opposition forces, such as resurgent far-left leader Jean-Luc Mélenchon, to claim Macron lacks the legitimacy to implement his policies. “There is a strong majority tonight… the French people want change but they’re also vigilant and there is a challenge for us — a responsibility to make things change, ” said Christophe Castaner, spokesman for the caretaker government Macron appointed after winning the presidential election last month. “We may have let people think a bit too much that everything was settled in advance,” he said, reflecting on the low turnout and the fact Macron’s win was less overwhelming than predicted. He added: “There is no victory tonight. The real victory will be in five years, when France will have changed.” More:
Van rams worshippers leaving London mosque, injuring 10
A van plowed into worshippers near a London mosque on Monday, injuring 10 people in what police said was a deliberate attack on Muslims that was being treated as a terrorist incident. Shortly after midnight, the hired vehicle swerved into a group of people leaving prayers at the Muslim Welfare House and the nearby Finsbury Park Mosque in north London, one of the biggest in the country, witnesses said. “This had all the hallmarks of a terrorist incident,” said Neil Basu, senior national co-ordinator for counter-terrorism policing. “This was an attack on London and all Londoners.” If confirmed by the authorities as terrorism, it would be the fourth attack since March in Britain and the third to involve a vehicle deliberately driven at pedestrians. The attack comes during the Muslim holy month of Ramadan when Muslims were attending special prayers. Abdulrahman Aidroos said he and his friends had been tending an old man who had suffered a heart attack when the van was driven at them. “When he was running he was saying ‘I wanna kill more people, I wanna kill more Muslims’,” he told BBC TV. He said he had helped tackle the driver and pin him down with others until police arrived. Basu thanked those who detained the driver, adding: “Their restraint in the circumstances was commendable.” The suspected van driver, aged 48, was arrested on suspicion of attempted murder and will be questioned by counter-terrorism officers. “I would like to … thank our Imam, Mohammed Mahmoud, whose bravery and courage helped calm the immediate situation after the incident and prevented further injuries and potential loss of life,” said Toufik Kacimi, the chief executive of the Muslim Welfare House. Police said the man who was being given first aid at the scene before the vehicle was driven into pedestrians had died but it was not clear whether his death was directly linked. More:
F.B.I. Botched Evidence Collection in Fraud Case, Judge Rules
Federal prosecutors contend that Benjamin Wey, a New York financier with an art for self-promotion, made tens of millions of dollars through a long-running stock manipulation scheme. But the government’s case against Mr. Wey may be falling apart after a federal judge ruled this week that, in early 2012, law enforcement botched a daylong search of his office in Lower Manhattan and his nearby apartment for evidence of wrongdoing. Judge Alison Nathan of Federal District Court in Manhattan said in a 92-page ruling that none of the documents, email messages, business receipts, computer hard drives and other records gathered in those searches could be used against Mr. Wey at his trial because the search warrants were overly broad and did not specify the crimes he was suspected of committing. The judge also said the 17 agents with the Federal Bureau of Investigation who conducted the searches were largely indiscriminate in seizing property — taking such things as drug prescriptions, X-rays of Wey family members and his children’s school records and test scores. She also noted that the raids took place more than three years before Mr. Wey was indicted in September 2015 and that authorities took a long time returning personal materials to Mr. Wey and his family. The ruling embarrassed federal prosecutors and was made just months before Mr. Wey’s trial date in October on securities fraud and money laundering charges. It is not clear what other evidence prosecutors have against Mr. Wey. As the founder of New York Global Group, Mr. Wey has made a fortune helping Chinese companies acquire what are known as shell companies — often the remnants of publicly traded companies — in deals called reverse mergers. “We honestly don’t know what the government’s evidence is at this point,” said David Siegal, Mr. Wey’s lawyer and a partner with Haynes and Boone.
Banks Told to Keep Skin in Game. They Securitized That Too
Few would argue with the stated mission of The Academy Group: to educate, mentor and find jobs for underprivileged youth. But along the way, the Chicago non-profit is also doing something a bit less lofty — helping Wall Street sell collateralized loan obligations, a cousin of those complex debt instruments that went horribly wrong during the 2008 financial crisis. The foundation and its chief benefactor, the billionaire Mark Walter, committed $160 million for an investment in a Chicago money manager that uses financial engineering to transform junk-rated loans into bonds rated as high as AAA. For the charity, the deal brings the prospect of steady cash flows and, Walter says, a future employer for its graduates. For the CLO manager, it means a deep pocket that enables the firm to comply with post-crisis rules intended to make the instruments less risky. Across Wall Street, similar symbiotic relationships have sprouted up as the market for securitized products faces new regulations requiring issuers to eat their own cooking. While each situation is a little different, the goal is typically the same: help firms that bundle consumer and corporate loans into bonds to raise the money needed to comply with the rules without forcing them to pay up themselves. And it’s all perfectly legal. More:
U.S. bank investors hope Fed stress test results lead to big payouts
Investors are hoping the Federal Reserve will allow big U.S. banks to put an estimated $150 billion in idle capital toward stock buybacks, dividends and profit-boosting investments in the coming weeks after conducting a regular examination of financial strength. On Thursday, the Fed is scheduled to begin releasing results from its two-part annual stress test, which was adopted in response to the financial crisis, to gauge banks’ ability to weather an economic storm that could threaten the stability of the system. The results will be the first since Republican President Donald Trump took office. Trump has not yet made any appointments to the Fed, but Republicans have turned up pressure on the central bank to cut red tape and ease regulations. Wall Street analysts said they will be parsing language the Fed uses in presenting the results for any signs that its approach is starting to soften. Analysts say they do not expect the Fed to announce any explicit changes to the stress test, but they do expect higher payouts. According to their estimates, the Fed could allow banks to distribute nearly as much capital to shareholders over the next year as they generate in profits, a benchmark not hit since before the 2008 crisis. Higher payouts “would be significant from a signaling standpoint” that regulators are easing up on capital requirements, said Steven Chubak, a bank analyst at Nomura Instinet. “That is a key part of the value case for a lot of these stocks.” Banks going through the stress tests have roughly $150 billion more capital than they need, Morgan Stanley analyst Betsy Graseck estimates. She expects the typical big bank to be allowed to increase stock buybacks by 27 percent and dividends by 8 percent, for a combined capital payout of 95 percent of annual earnings, up from 84 percent last year. The Fed first conducted stress tests in 2009 as a way to boost confidence in the financial system. Congress codified the test into law the following year as part of a broader financial reform package, and the Fed came to see it as an important tool to ensure that banks not only maintain enough capital to withstand economic storms, but also run their businesses in ways that avoid operational calamities. However, bankers complain that stress tests have morphed into an overly complex and time-consuming process that occurs in the secrecy of a black box. They have pleaded for more details about models the Fed uses to conduct the numeric part of the tests, and more clarity on a qualitative component that judges factors like risk management. The Fed has been making some changes to enhance transparency, but officials say that revealing too much would allow lenders to game the exams. “We are concerned that releasing all details on the models would give banks an incentive to adjust their business practices in ways that change the results of the stress test without changing the risks faced by the firms,” Fed Chair Janet Yellen told Congress in a letter on Friday. “The result could be less effective stress tests.” Thursday’s results, known as DFAST, will show how much capital the biggest banks would have after an imagined crisis. Shortly after the Fed posts its numbers, big banks tend to disclose results under their own models. Banks can compare the scoring and then scale back and resubmit their capital plans to improve their chances of a passing grade. On June 28, the Fed will announce whether it has approved the plans in a further examination known as the Comprehensive Capital Analysis and Review, or CCAR. More:
The Car Was Repossessed, but the Debt Remains
More than a decade after Yvette Harris’s 1997 Mitsubishi was repossessed, she is still paying off her car loan. She has no choice. Her auto lender took her to court and won the right to seize a portion of her income to cover her debt. The lender has so far been able to garnish $4,133 from her paychecks — a drain that at one point forced Ms. Harris, a single mother who lives in the Bronx, to go on public assistance to support her two sons. “How am I still paying for a car I don’t have?” she asked. For millions of Americans like Ms. Harris who have shaky credit and had to turn to subprime auto loans with high interest rates and hefty fees to buy a car, there is no getting out. Many of these auto loans, it turns out, have a habit of haunting people long after their cars have been repossessed. The reason: Unable to recover the balance of the loans by repossessing and reselling the cars, some subprime lenders are aggressively suing borrowers to collect what remains — even 13 years later. Ms. Harris’s predicament goes a long way toward explaining how lenders, working hand in hand with auto dealers, have made billions of dollars extending high-interest loans to Americans on the financial margins. These are people desperate enough to take on thousands of dollars of debt at interest rates as high as 24 percent for one simple reason: Without a car, they have no way to get to work or to doctors. With their low credit scores, buying or leasing a new car is not an option. And when all the interest and fees of a subprime loan are added up, even a used car with mechanical defects and many miles on the odometer can end up costing more than a new car. Subprime lenders are willing to take a chance on these risky borrowers because when they default, the lenders can repossess their cars and persuade judges in 46 states to give them the power to seize borrowers’ paychecks to cover the balance of the car loan. Now, with defaults rising, federal banking regulators and economists are worried how the strain of these loans will spill over into the broader economy. For low-income Americans, the fallout could, in some ways, be worse than the mortgage crisis. More:
Silicon Valley could be next target for Trump-style nationalism
As tech royalty converges on the White House today for an American Technology Council meeting, the darlings of Silicon Valley are in danger of becoming the devils of Trumpism’s nationalist wing.
This won’t happen overnight, but danger signs are everywhere. Axios Tech Editor Kim Hart wrote last week that the giants, with their “enormous concentrations of wealth and data,” are “drawing the attention of economists and academics who warn they’re growing too powerful.” Turns out it’s government, too. The Bannon wing of the White House would like to take on the lords of the Valley now over outsourcing, the concentration of wealth and their control over our data and lives. But this fight is on hold for a later date, officials tell us. The bigger problem for tech is that many Americans are rethinking their romantic views of the hottest and biggest companies of the new economy. As people look for villains to blame, tech might get its turn:
People increasingly distrust technology, and the companies will increasingly be in the crosshairs. Richard Edelman — president and CEO of the global communications firm — wrote in introducing Edelman’s 2017 Trust Barometer: “[O]ngoing globalization and technological change are now further weakening people’s trust in global institutions, which they believe have failed to protect them from the negative effects of these forces. Be smart: Tech executives are very aware of the public’s unsettled mood and fearful that if they completely disengage with Trump the White House will turn on their companies. That’s why many are here today! Dive deeper: “What Apple’s Tim Cook will tell Trump” (CEOs come with their own agendas: He’ll raise topics the White House hadn’t planned) Off embargo at 6 a.m.: “Silicon Valley’s elite comes to Trump’s Washington.”
The Blood Harvest
The thing about the blood that everyone notices first: It’s blue, baby blue. The marvelous thing about horseshoe crab blood, though, isn’t the color. It’s a chemical found only in the amoebocytes of its blood cells that can detect mere traces of bacterial presence and trap them in inescapable clots. To take advantage of this biological idiosyncrasy, pharmaceutical companies burst the cells that contain the chemical, called coagulogen. Then, they can use the coagulogen to detect contamination in any solution that might come into contact with blood. If there are dangerous bacterial endotoxins in the liquid—even at a concentration of one part per trillion—the horseshoe crab blood extract will go to work, turning the solution into what scientist Fred Bang, who co-discovered the substance, called a “gel.” “This gel immobilized the bacteria but did not kill them,” Bang wrote in the 1956 paper announcing the substance. “The gel or clot was stable and tough and remained so for several weeks at room temperature.” If there is no bacterial contamination, then the coagulation does not occur, and the solution can be considered free of bacteria. It’s a simple, nearly instantaneous test that goes by the name of the LAL, or Limulus amebocyte lysate, test (after the species name of the crab, Limulus polyphemus). The LAL test replaced the rather horrifying prospect of possibly contaminated substances being tested on “large colonies of rabbits.” Pharma companies didn’t like the rabbit process, either, because it was slow and expensive.
So, now, the horseshoe blood test is a big business. “Every drug certified by the FDA must be tested using LAL,” PBS’s Nature documentary noted, “as do surgical implants such as pacemakers and prosthetic devices.” I don’t know about you, but the idea that every single person in America who has ever had an injection has been protected because we harvest the blood of a forgettable sea creature with a hidden chemical superpower makes me feel a little bit crazy. This scenario is not even sci-fi, it’s postmodern technology.
In Hamptons House, a Link to Manafort and Jared Kushner’s Dad
Jared Kushner was a junior at Harvard when an enterprising political operative was drawn into his family’s orbit. His name: Paul Manafort. It was 2002, and, back then, few might have imagined that the two men’s worlds would intersect one day in the figure of Donald Trump. But the Kushners and the Manaforts, it turns out, go way back — at least when it comes to two of New York’s great obsessions: money and real estate. Kushner, of course, is now the son-in-law and confidante of President Trump. Manafort is a big-time Republican strategist and Trump’s former campaign manager. Both have been pulled into the vortex of questions surrounding the administration and Russia. But 15 years ago, when Trump was still running casinos, Manafort’s wife, Kathleen, received a mortgage on a 10-bedroom home in the Hamptons on Long Island. The $150,000 loan was made by NorCrown Bank, in Livingston, New Jersey, whose chairman was Kushner’s father, Charles, the patriarch of the family real estate empire and, at the time, a Democratic powerbroker in New Jersey. NorCrown was acquired by Valley National Bancorp in 2005. Jared married Trump’s daughter, Ivanka, in 2009. “Paul Manafort did not know Charles Kushner 15 years ago when this transaction occurred,” said Jason Maloni, a spokesman for the Manaforts. “He has never met or talked with him in his life. These loans are all ordinary, arm’s length transactions.” He declined to comment about Kathleen Manafort. Charles Kushner declined to comment for this article. More:
GOP considers cancelling August recess to salvage agenda
Alarmed by the stalemate on healthcare reform, lack of progress on tax reform and appropriations bills that are far behind schedule, Republican lawmakers across Congress are increasingly willing to consider cancelling the month-long August recess. Senate Republican negotiators reported that they are not close to a deal on healthcare reform and that scheduling a vote by July 4, which Senate Majority Leader Mitch McConnell (R-Ky.) has pushed, is likely unrealistic. That impasse has held up work on a budget resolution, which is necessary to move tax reform and the annual appropriations bills. Once Republicans vote on a budget resolution for 2018, it will wipe out the special vehicle they plan to use to pass healthcare reform with a simple majority vote — a vehicle that was set up by the budget resolution for 2017. Lawmakers calculate there are only 45 legislative days until the end of the fiscal year, Sept. 30.
With the party still sharply divided on health and tax reform, it looks increasingly possible that Republican lawmakers will leave town in July for a month-long break without any major accomplishments under their belts. “I think there’s a majority that probably supports being here,” said Sen. David Perdue (R-Ga.), referring to the possibility of cancelling or cutting short the August recess. He said GOP lawmakers need to make progress on the budget and spending bills to avoid a government shutdown scenario in September, as well as progressing on tax reform. “I don’t want to wait until the last week to be forced into a [continuing resolution]. That’s ridiculous,” he said of the likelihood Congress will have to pass a short-term continuing resolution to avoid a government shutdown. Perdue said colleagues are also “facing the reality if we don’t we get some kind of tax package on the books this year” the country could find itself in a recession.
Kushner Is Said to Be Reconsidering His Legal Team
Representatives of Jared Kushner, President Trump’s son-in-law and senior adviser, have quietly contacted high-powered criminal lawyers about potentially representing him in the wide-ranging investigation into Russia’s influence on the 2016 election, according to three people briefed on the matter.
Some of Mr. Kushner’s allies have raised questions about the link between his current lawyer, Jamie S. Gorelick, and Robert S. Mueller III, the special counsel appointed to investigate the Trump campaign’s ties to Russia, according to one of the people who spoke on condition of anonymity. Before the Justice Department named him to the special counsel post, Mr. Mueller was a law partner with Ms. Gorelick at the Washington firm of WilmerHale. Such connections are common in Washington legal circles and are often resolved by an acknowledgment from the client of the possible conflict. In this case, Ms. Gorelick urged Mr. Kushner to consider other representation first. In recent days, Mr. Kushner has had discussions with at least one prominent trial lawyer, one of the people said. And if Mr. Kushner chooses to hire a new lawyer, this person may either supplement or replace Ms. Gorelick’s team. So far, Mr. Kushner’s legal team remains unchanged. Ms. Gorelick, who has repeatedly said Mr. Kushner will cooperate with all Russia-related inquiries, is preparing him for a meeting with investigators for the Senate Select Committee on Intelligence. Mr. Kushner also provided a statement on Sunday from Ms. Gorelick describing the recent discussions with other lawyers as seeking advice as opposed to replacing or adding to his legal team. “After the appointment of our former partner Robert Mueller as special counsel, we advised Mr. Kushner to obtain the independent advice of a lawyer with appropriate experience:
Mueller team lawyer brings witness-flipping expertise to Trump probes
A veteran federal prosecutor recruited onto special counsel Robert Mueller’s team is known for a skill that may come in handy in the investigation of potential ties between Russia and U.S. President Donald Trump’s 2016 campaign team: persuading witnesses to turn on friends, colleagues and superiors.
Andrew Weissmann, who headed the U.S. Justice Department’s criminal fraud section before joining Mueller’s team last month, is best known for two assignments – the investigation of now-defunct energy company Enron and organized crime cases in Brooklyn, New York – that depended heavily on gaining witness cooperation. Securing the cooperation of people close to Trump, many of whom have been retaining their own lawyers, could be important for Mueller, who was named by the Justice Department as special counsel on May 17 and is investigating, among other issues, whether Trump himself has sought to obstruct justice. Trump has denied allegations of both collusion and obstruction. “Flipping” witnesses is a common, although not always successful, tactic in criminal prosecutions. Robert Ray, who succeeded Kenneth Starr as the independent counsel examining former President Bill Clinton, noted that Trump’s fired former national security advisor, Michael Flynn, has already offered through his lawyer to testify before Congress in exchange for immunity, suggesting potential willingness to cooperate as a witness.
“It would seem to me the time is now to make some decisions about what you have and what leverage can be applied to get the things you don’t have,” Ray said, referring to Mueller’s team. Trump, Vice President Mike Pence, Trump’s son-in-law Jared Kushner and others close to the president already have hired their own lawyers to help navigate Mueller’s expanding probe and ongoing congressional investigations. Kathryn Ruemmler, who served as White House counsel under former President Barack Obama, said Weissmann is willing to take risks to secure witness testimony that other prosecutors might not. Ruemmler worked with Weissmann on the Justice Department’s Enron task force that investigated the massive corporate fraud that led to the company’s 2001 collapse. Ruemmler recalled that Weissmann had a hunch that former Enron treasurer Ben Glisan would be willing to talk despite already having pleaded guilty without agreeing to cooperate. So Weissmann had U.S. marshals bring Glisan before the grand jury from prison, Ruemmler said. More:
THE MEMO: For Trump, danger signs in the polls
President Trump’s willingness to flout convention and stoke controversy may be starting to hurt him, even among previously strong supporters. Trump has defied political norms ever since the start of his campaign two years ago. He brushed aside calls to become a more conventional candidate, and it paid off, making him the nation’s 45th president. But Trump’s approval rating, always low by historical standards, has been sliding since he took office in January. Crucially, many recent surveys detected an erosion of his support among Republicans and independents. Trump’s job performance wins approval from only 35 percent of the public, while 64 percent disapprove, according to a new poll released late last week from The Associated Press and the NORC Center for Public Affairs Research. That is one of the worst findings yet for Trump in any major survey. The same poll found that 65 percent of Americans think their president has little or no respect for the nation’s democratic institutions and traditions. The second finding does not necessarily spell doom for Trump, given that a large segment of his support comes from people who like him because of his willingness to rebel against “business as usual” in Washington. But it is a warning sign for the president, at the very least. Republican strategist Dan Judy argued that voters who had backed Trump with some ambivalence over Democratic nominee Hillary Clinton last November were among those most likely to be put off by the various controversies to afflict the White House, and by the president’s incendiary style. “A lot of people — the ‘Not Hillary’ Trump voters — knew who Donald Trump was, they knew what kind of person he was,” said Judy, who worked with the president’s GOP primary rival Sen. Marco Rubio (Fla.) last year. “They were willing to tolerate some of the theatrics and some of the disruption it led to, as long as it led to a policy agenda they supported. “The longer he goes without real policy victories, the less patience they are going to have.” Those voters appear to be becoming jaded with the apparently endless storms that have afflicted the Trump presidency. But, as usual, there is no sign of the president backing down or tempering his public pronouncements. Over the past week, amid reports that Trump is under investigation by Special Counsel Robert Mueller for possible obstruction of justice, the president unleashed Twitter barbs at Hillary Clinton, the “fake news media” and fired FBI director James Comey. On Friday morning, Trump appeared to take aim at his own deputy attorney general, Rod Rosenstein, who appointed Mueller after Comey’s firing. “I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt,” Trump wrote.
Sen. Dianne Feinstein (D-Calif.) was among those firing back at Trump. In a statement released a few hours later, she asserted that, “The message the president is sending through his tweets is that he believes the rule of law doesn’t apply to him.” Though Trump’s defenders have long argued that pollsters underestimate his support and his base is resilient, there is some data to back up the skeptics.
In the RealClearPolitics average as of Friday afternoon, Trump’s job performance was registering 39.9 percent approval and 53.6 percent disapproval. Polling and data expert Nate Silver wrote on Twitter earlier this month that, “Good reporting needs to be able to distinguish between Trump’s Bannonist base (20-25% of the country) and all Trump voters (46%).”
Trump’s personal lawyer hires attorney: report
President Trump’s personal lawyer, Michael Cohen, has hired his own attorney as the special counsel investigation into Russian election interference progresses, NBC News reported Friday. Cohen has hired Washington, D.C., attorney Stephen M. Ryan, according to NBC’s Katy Tur. A source told Tur that Cohen will testify before the House Intelligence Committee on Sept. 5, adding that the testimony was delayed due to “scheduling and logistics.” Tur also reported that Michael Caputo, a communications adviser brought on board the Trump campaign by Paul Manafort, has been contacted by the FBI. Caputo has also hired his own attorney — former New York state Attorney General Dennis Vacco. Caputo was asked in May to testify before the House Intelligence Committee. Cohen and Caputo aren’t the only figures connected to Trump who have hired their own attorneys. Trump hired an attorney to represent him in the investigation in late May, while Vice President Pence’s staff announced Thursday that he had hired Virginia attorney Richard Cullen.
How Michael Flynn’s Disdain for Limits Led to a Legal Quagmire
WASHINGTON — Michael T. Flynn was a man seething and thwarted. In the summer of 2014, after repeatedly clashing with other Obama administration officials over his management of the Defense Intelligence Agency — and what he saw as his unheeded warnings about the rising power of Islamic militants — Mr. Flynn was fired, bringing his military career to an abrupt end. Mr. Flynn decided that the military’s loss would be his gain: He would parlay his contacts, his disdain for conventional bureaucracy, and his intelligence career battling Al Qaeda into a lucrative business advising cybersecurity firms and other government contractors. Over the next two years he would sign on as a consultant to nearly two dozen companies, while carving out a niche as a sought-after author and speaker — and ultimately becoming a top adviser to President Trump. “I’ve always had that entrepreneurial spirit,” Mr. Flynn said in an interview in October 2015. In the military, he added, “I learned that following the way you’re supposed to do things isn’t always the way to accomplish a task.” But instead of lofting him into the upper ranks of Beltway bandits, where some other top soldiers have landed, his foray into consulting has become a legal and political quagmire, driven by the same disdain for boundaries that once propelled his rise in the military. His business ties are now the subject of a broad inquiry by a special counsel investigating Russian interference in the 2016 election and possible collusion with Trump associates. That investigation now includes work Mr. Flynn did for Russian clients and for a Turkish businessman with ties to that country’s president, Recep Tayyip Erdogan. More:
Oliver Stone’s Vladimir Putin interviews are accidentally revelatory
The most telling moment in The Putin Interviews, director Oliver Stone’s four-hour conversation with Russian President Vladimir Putin, recorded over the course of nearly two years, comes late in the second hour. Stone is trying to get Putin to say whether he does or doesn’t like then-presidential candidate Bernie Sanders. Putin demurs entirely, but offers up a theory of how power functions. Should Sanders become president, Putin says, he would suddenly realize the vast weight of the American bureaucracy that existed underneath him. He might make some changes to the US on a domestic level, but he would ultimately be unable to change that much — the person at the head of the state matters less than the centuries of power the state has accumulated and will protect at all costs. People aren’t responsible for what happens; the vast structures surrounding them are. Look at Barack Obama, Putin suggests. He sincerely wanted to close the Guantanamo Bay prison, and did he? No. You can’t fight the state. This is telling for two reasons. The first is that it, if true, explains Putin’s motives in regards to the United States in the time since that interview was conducted in 2016. But the second reason is even more telling. This isn’t just how Putin sees [insert US president here]. It’s how he sees himself: as a conduit for the vast sweep of history, guided less by his own political beliefs and desires than by forces even he can barely understand. More:
Ad uses Scalise shooting against Ossoff in Georgia
CHAMBLEE, GA. — Democrat Jon Ossoff and Republican Karen Handel are both speaking out against an ad appearing to link Ossoff to Wednesday’s shooting at a Republican baseball practice outside of Washington, D.C. The television spot, which was produced by the Principled PAC, shows House Majority Whip Steve Scalise (R-La.) on a stretcher after the shooting, along with the sound of gunshots. “The unhinged left is endorsing and applauding shooting Republicans,” the ad’s narrator says. “When will it stop? It won’t if Jon Ossoff wins on Tuesday,” the narrator continues. The spot then shows several images and videos including one of comedian Kathy Griffin holding a fake severed head that looks like President Trump, as well as a letter that reads “Resist the Facist takeover. String up the collaborators.”
The ad then claims “these same leftists are all for Ossoff, and if he wins, they win.” “Stop Jon Ossoff. Stop Nancy Pelosi. Vote Karen Handel for Congress,” the narrators concludes. Ossoff called the politicization of the shooting that injured Scalise and four others last week “disgraceful.” “The man is fighting for his life. I think it’s disgraceful to politicize it, and I think Secretary Handel should call for it to come down,” Ossoff told a small group of reporters after a canvassing launch at his Chamblee field office. “You have a national tragedy that has united people. There are still be who are in critical condition. It’s just got no place in an attack ad.” A spokeswoman for Handel stopped short of demanding the ad be removed, but called the piece “disturbing and disgusting” in a release to the Atlanta Journal-Constitution. “For any group to use the shootings this week for political or personal benefit is shameful,” spokeswoman Kate Constantini said in a statement. “This group should be ashamed.” James T. Hodgkinson, who allegedly shot Scalise and four others at the baseball practice before being killed by police, had posted a series of anti-Republican Facebook posts, and reportedly had a hit list that included other Republican lawmakers.
The ad comes two days ahead of Tuesday’s sixth district’s special election for Health and Human Services Secretary Tom Price’s Georgia seat.
What Trump gets wrong about coal, natural gas and carbon
The closest thing President Trump has to a climate and energy policy is actually a collection of contradictions. He touts natural gas as a carbon-cutting mechanism, but he also promises to bring back the carbon-emitting coal industry. He talks about “clean coal,” but his actions will make it harder for “clean coal” technology to make any headway. Why it matters: Misleading statements are nothing new in Washington. But these contradictions are becoming the Trump administration’s core policy framework. Top officials, including Secretary of State Rex Tillerson and EPA Administrator Scott Pruitt have over the last couple of weeks repeatedly pushed these contradictory positions, so let’s take a closer look at them.
Carbon emissions: Trump and his top advisers credit fracking, the technology that’s unlocked vast reserves of cleaner burning natural gas over the past decade, for why U.S. carbon emissions are at levels not seen since before 1994. That’s true for the most part, but the rest of the administration’s logic on this front is not. Fracking is lowering emissions because natural gas, which burns 50% less carbon emissions than coal, is displacing coal in America’s electricity mix. Pruitt and others cite the boom in natural gas to show America is addressing carbon emissions regardless of the Paris climate deal. They also say, though, that withdrawing from the accord and repealing Obama-era environmental regulations will help bring the coal industry back. By Pruitt’s own logic, if the Trump administration were to revive the coal industry, it would actually raise U.S. carbon emissions, undermining their only talking point associated with climate change. The EPA didn’t respond to multiple requests for comment. “Ironically, the most successful thing the Trump administration could do to bring back the U.S. coal industry would be to restrict the U.S. natural gas production, but that’s not what they’re trying to do either,” said Trevor Houser, partner at the analysis firm Rhodium Group. “They’re unlikely to succeed in bringing coal back, but if they were, U.S. emissions would go back up.” Coal: Trump talks a lot about “clean coal” and bringing back the coal industry. The term “clean coal” refers to technology that captures carbon from facilities like coal-fired power plants instead of emitting it into the air. Trump doesn’t actually talk about the technology when he uses the term. He’s wrong on both accounts: He can’t revive the coal industry, and his administration’s early moves are actually hurting the chances of “clean coal” technology taking off. Market forces outside of the Trump administration’s control, like Asian demand for coal and cheap natural-gas prices, are likely to keep the long-term future of the U.S. coal industry somewhere between stagnant and negative. That’s the reality no matter what Trump does with the Paris deal or Obama-era regulations. One Obama regulation helped expedite many companies’ decision to convert to natural gas: a 2012 rule imposing the first-ever federal limits on power-plant emissions of mercury and other toxic air pollution. The Trump EPA has signaled it may try to reverse at least parts of that rule. But if it succeeds, it wouldn’t bring back the coal plants that shut down. Power companies have already made the decades-long investment decisions to shift to natural gas and renewable energy, and market forces will ensure most companies don’t revert back to coal. More:
The Finance 202: Overhauling the tax code is more complicated than the Trump administration expected
But the proposal has faced resistance from multiple corners of the House Republican conference, including on the Ways and Means committee itself. Brady last week floated phasing in the tax over five years. That hasn’t won it new fans, and it continues to be a nonstarter in the Senate. That House Republican leaders haven’t moved on testifies more than anything to the lack of viable alternatives advanced by Senate and administration negotiators. On Tuesday, Ryan will deliver what his office is billing as his first major speech on taxes. The address to the National Association of Manufacturers comes a year to the week since the rollout of the House GOP’s tax blueprint. Ryan won’t get in the weeds, but “he will talk about what tax reform looks like, not just the benefits,” according to an aide.
Senate Republicans haven’t helped the project get out of the blocks. And for the rest of the month, at least, they’re likely to stay preoccupied with their own Obamacare repeal-and-replace effort, which Senate Majority Leader Mitch McConnell (R-Ky.) has said he’d like to bring to the floor before the July Fourth recess. Senate Finance Committee Chairman Orrin Hatch (R-Utah) on Friday put out a call for stakeholder input on taxes, asking for submissions by July 17. In the meantime, some GOP senators are working on their own proposals. Sen. Ron Johnson (R-Wisc.) is exploring a plan to eliminate corporate taxes altogether and replace them with revenue from taxing dividends and capital gains as ordinary income. Others are digging through a 2014 draft from then-Ways and Means Committee Chairman Dave Camp (R-Mich.) for new sources of revenue. Republicans leaders in the Capitol are meant to be working with the administration on forging consensus. “It seems they’re still far apart on what an agreement could be,” says Jonathan Traub, a former staff director for Ways and Means Republicans now with Deloitte. And the clock is working against them. Even if a rough sketch of a plan comes together by the end of the summer, it will be jockeying for attention in an already-crowded fall calendar. Republicans returning from the August recess could face intramural showdowns over a new budget resolution, a debt ceiling hike and a government funding package. More:
Tuscaloosa Mayor Walt Maddox: Democrats must be the ‘party of ideas and innovation’
Tuscaloosa Mayor Walt Maddox said today that he’s taking his time deciding on whether to run for governor. “As mayor you get to wake up every single morning and make a difference for the people you work for,” he said. “We certainly want to know if we were successful … could we implement the change that the state desperately needs, and are we the right fit for the party and ultimately the state of Alabama.” Maddox, who has served as Tuscaloosa mayor for 12 years, told AL.com today during a meeting of the Alabama Democratic Reform Caucus that he doesn’t have a timeline yet on when he could announce a run for the state’s highest office. About 50 members of the Alabama Democratic Reform Caucus met in Birmingham on Saturday for its second annual Democratic Action Summit. Sheila Gilbert, chair of the caucus, said the grassroots group is filled with progressive Democrats working to strengthen the party in Alabama and get more Democrats elected into office. Maddox and state Rep. Anthony Daniels, D-Huntsville, the Minority Leader of the Alabama House, spoke during the lunch event. Both Maddox and Daniels said the Democratic Party is going to have to take the offense and stop being the opposition party if it’s going to gain traction in the Republican-dominated state. “Clearly, the events in Washington D.C. have created this tidal wave of enthusiasm (for the Democratic Party in Alabama), more than I have ever seen, but that’s never going to be enough to get you across the finish line,” Maddox said. “We are going to have to be the party of ideas and innovation.” Daniels said the Democratic Party needs to go back to its core principles and share its message with people in rural Alabama. “Today is to give optimism to the people here who are working on the ground, let them know that their work is not being done in vain, he said, of the summit. More:
Hanceville mayor makes pitch for New Orleans Confederate monuments
Mayor Kenneth Nail says he’s heard nothing but approval from Hanceville residents since reaching out to leaders in New Orleans with an offer to take that city’s now-banned Confederate monuments off their hands. “Everybody who’s approached me has said they think it’s a great idea, and it seems like I haven’t offended anybody — which is never the goal,” said Nail Saturday. “One of my good friends, who is black, even messaged me on Facebook and told me, ‘Look, some of my ancestors were forced to fight in that war [the Civil War], and I think it’s a good idea to remember these things.’ He told me, ‘I drive a truck, and I’ll even go down there and pick them up if the city needs me to.’” Nail recently sent a letter to New Orleans Mayor Mitch Landrieu, inquiring about the fate of four pieces of statuary removed from display in the wake of a 2015 New Orleans city council vote to censor from public view images of Confederate figures in the historic port city. The monuments depict Confederate Gens. Robert E. Lee, P.G.T. Beauregard, Confederate President Jefferson Davis, and the Battle of Liberty Place — a postwar insurrection, ultimately quelled by the 22nd U.S. Infantry, that was fought on and around New Orleans’ Canal Street. In Louisiana, controversy over the statues’ removal is ongoing, with litigation pending from the move’s opponents to have the statues restored at their former sites. Nail said he doesn’t know what New Orleans intends to do with the statues, and that he’s only interested in obtaining them if they can be had at little to no cost for his city. “I sent the letter to see what they might do,” said Nail. “I don’t know if they’re going to sell them, give them away, or something else. Honestly, we’re a small town, and if they end up selling them off for a lot of money, of course we couldn’t do that. If they do give them away, then I would approach the [Hanceville] city council to see how they want to proceed. “My view is that it’s an opportunity; a great teaching tool that we could have in our city,” he added. “It’s an opportunity for all of us to reflect on all our struggles, and to celebrate how far we’ve come — while clearly acknowledging that we had those struggles. Different symbols mean different things to different people. We definitely don’t need to forget or be blind to history, which I think some well-meaning folks in our society are kind of pushing for, intentionally or unintentionally. So far, there’s been no response from New Orleans. But, said Nail, win or lose, he’ll be content with the outcome. “What I told the mayor, and what I’ve told everyone I’ve talked about it with, is that, for me, remembering these people and these events is about heritage — not hate,” he said. “Anybody who knows me knows that I’m no racist. But ultimately, it will be up to the folks in New Orleans — and up to the people who live in Hanceville, and the Hanceville City Council — to decide what — if anything — happens next.”
Trump’s Cuba Policy Will Fail by Ben Rhodes
The architect of Obama’s Cuba opening argues that the president’s rollback is a pointless mistake.
One of the most depressing things about President Donald Trump’s decision to roll back elements of the Cuba opening is how predictable it was. A Republican candidate for president makes last-minute campaign promises to a hard-line Cuban American audience in South Florida. Senator Marco Rubio and Congressman Mario Diaz-Balart hold him to those promises. The U.S. government announces changes that will hurt ordinary Cubans, harm the image of the United States, and make it harder for Americans to do business and travel somewhere they want to go. While President Obama raised the hopes of Americans and Cubans alike with a forward-looking opening in diplomatic, commercial and people-to-people ties, President Trump is turning back the clock to a tragically failed Cold War mindset by reimposing restrictions on those activities. While not a full reversal of the Obama opening, Trump’s actions have put relations between the United States and Cuba back into the prison of the past—setting back the prospects for reform inside of Cuba, and ignoring the voices of the Cuban people and a majority of Americans just so that he can reward a small and dwindling political constituency. It didn’t have to be this way, and it won’t stay this way. In the fall of 2014, after 16 months of secret negotiations, I travelled to the Vatican to tell representatives of Pope Francis that the United States and Cuba were prepared to begin normalizing relations. The Vatican diplomats met separately with the U.S. and Cuban delegations to verify that we were telling the truth. Then we all met together and read aloud the steps we were prepared to take. A Cardinal said the world would be moved by this example of former adversaries putting aside the past. One Vatican official who had lived in Cuba had tears in his eyes, a look of deep remembrance on his face. Cuba has long played an outsized role in the world’s imagination. To Americans, it has been the setting for the drama of mobsters, Castros, the Cold War, assassination attempts, boatlifts, and ideological conflict—mixed with the allure of a culture that finds full expression in Miami. To Latin America, Cuba has been a symbol for how United States tries to dictate the politics of the hemisphere—a legacy of democracy and economic progress, as well as coups and death squads. To the developing world, Cuba has been a symbol of sovereignty and resistance, and a supporter of revolution—for good or bad. From the Missile Crisis to the anti-apartheid movement; from the Kennedys to Obama era, this small island has put itself at the center of world events. More:
THE BUZZ: WHAT DID PREET KNOW? — Current chatter going around DC and NYC holds that former US Attorney Preet Bharara, whose office had been investigating Russian money laundering, turned over some significant information to special counsel Robert Mueller.
SPEAKING OF TRUMP INVESTIGATIONS — Here was Trump attorney Jay Sekulow on Fox News Sunday: “[N]ow he’s being investigated by the Department of Justice, he’s being investigated for taking the action that the Attorney General and Deputy Attorney General recommended him to take.”
Chris Wallace: “You stated some facts. First of all, you’ve now said that he is getting investigated after saying that you didn’t …
Sekulow: No. … No, he’s not being investigated!
Wallace: “You just said that he’s being investigated.
Sekulow: “No, Chris … ”
Wallace: “The tape will speak — Jay, the tape will speak for itself. You said he is being investigated.” Transcript.
MACRON WINS BIG IN FRANCE — Via AFP: “French President Emmanuel Macron’s centrist party swept to a large majority in parliamentary elections on Sunday, although it fell short of a predicted landslide. Macron’s year-old Republique en Marche and their allies won 351 seats in the 577-seat National Assembly, final results showed after the second round of an election which has eliminated many high-profile figures.
“The party Macron founded just 16 months ago has re-drawn the French political map, although the winning score was considerably lower than the 470 seats predicted by some pre-vote surveys. But it gives the 39-year-old president one of France’s biggest post-war majorities, strengthening his hand in implementing his programme of business-friendly reforms” Read more.
MUSLIMS TARGETED IN LONDON — Via The [London] Times: “Counterterror police are investigating a van attack on Muslims in north London which left one dead and eight injured. A 48-year-old man was arrested after swerving into a group of worshippers who were leaving evening prayers shortly after midnight.
“One man was pronounced dead at the scene. Police are informing his next of kin.
Two witnesses said that the driver got out of the white van after hitting about ten people and screamed that he wanted to ‘kill all Muslims’.” Read more.
VOTE GOLDMAN! — Bloomberg’s Max “Man About Town” Abelson on former Goldman Sachs execs Archie Parnell and Phil Murphy, both running for office on anti-Trump platforms:
“Seven months after Trump’s triumph left their party in tatters, Democrats are desperate to chip away at his influence. There are only half a dozen big elections left this year, a handful of chances to loosen the Republican grip on power. Two of the Democratic nominees, Parnell and Murphy, worked for the same Wall Street firm whose alumni now stock the Trump administration.”
DOWN TO THE WIRE IN GEORGIA — POLITICO’s Elena Schneider: “The Georgia special election between Republican Karen Handel and Democrat Jon Ossoff could come down to just a few thousand votes on Tuesday, after a six-month campaign that has attracted outsized national attention as a key early test for … Trump’s party.
“Trump, Vice President Mike Pence and House Speaker Paul Ryan have all trekked to Georgia and the campaigns and outside groups have spent a record $50 million in the last six months, building the stakes and the suspense to unprecedented levels in a House district that had always been solidly Republican — until Trump finished barely ahead of Hillary Clinton there in the 2016 presidential election” Read more.
DON’T SLEEP ON SEPTEMBER FED HIKE — Pantheon’s Ian Shepherdson: “In the wake of last week’s rate increase, the fed funds future puts the chance of another rise in September at just 16 percent. After hikes in December, March and June, we think the Fed is trying to tell us something about their intention to keep going; this is not 2015 or 2016, when the Fed happily accepted any excuse not to do what it had said it would do.”
DRIVING THE WEEK — Trump meets with tech CEOs at the White House on Monday … Senate Finance has a hearing on the fiscal 2018 budget at 10:00 a.m. on Wednesday … American Bankers Assoc. holds a forum on payments on Thursday at 8:00 a.m. … Senate Agriculture Committee holds a hearing at 9:30 a.m. Thursday on the nomination of J. Christopher Giancarlo to be chairman of the CFTC … House Financial Services picks up the flood insurance debate on Wednesday … Senate Banking Committee has a hearing at 10:00 a.m. Thursday on Economic Growth … Chicago Fed President Charles Evans speaks at 7:00 p.m. in NYC on Monday … Index of Leading Indicators on Thursday at 10:00 a.m. expected to rise 0.4 percent.
TECH AND TRUMP — POLITICO’s Steven Overly: “The fraught relationship between the country’s leading tech executives and President Donald Trump is about to get even more tense. The latest uncomfortable moment arrives Monday, when top tech CEOs are expected to sit down with Trump at the White House to talk about modernizing government technology.
“Many of the companies have refused to confirm their attendance publicly, in a sign of how sensitive their dealings with the Trump administration have become in a liberal Silicon Valley that loathes his policies on issues like immigration and climate change. It’s just the newest example of a dynamic that has ensnared some of the industry’s leading figures” Read more.
CLINGER FOR FDIC — POLITICO’s Victoria Guida: “President Donald Trump … announced he intends to nominate House aide James Clinger as a member of the Federal Deposit Insurance Corp. and as chairman of the board once Martin Gruenberg’s term ends in late November.
“Clinger, who recently left the House Financial Services Committee, would serve a six-year term if confirmed. He worked for the committee for a combined 20 years, serving as assistant staff director, senior banking counsel and most recently chief counsel. From 2005 to 2007, in between decade-long stints on the Hill, he served as deputy assistant attorney general” Read more.
CLINGER REACT — Cap Alpha’s Ian Katz: “The choice of Clinger presumably gives committee Chairman Jeb Hensarling and House Republicans an ally at top of one of the key banking regulators. … The FDIC has arguably been the toughest regulator on banks in recent years. Under Clinger, we believe the agency would be more sympathetic than at any time since the financial crisis.
“The FDIC is important not only in its role in deposit insurance and safety/soundness oversight, but along with the Federal Reserve it’s the arbiter of living wills. At times, under Chairman Marty Gruenberg, the FDIC has been tougher in the living will process than the Fed”
NO PONIES FOR WALL STREET — Stan Collender in Forbes: “I’ve had enough of the very carefully worded, overly optimistic analyses coming from Wall Street and elsewhere about the many very positive things … Trump will soon be doing for the U.S. economy.
“Business and the people who invest in it need to stop looking for that pony in the ever-growing pile of you-know-what that’s inside the beltway these days. What it thought the day after Election Day Trump would do this year on the economy not only isn’t going to occur as quickly as expected, it’s increasingly unlikely to happen at all in 2017. And 2018 isn’t looking that promising either” Read more.
ASIAN STOCKS OPEN MIXED — Bloomberg’s Adam Haigh: “Stocks in Asia began the week mixed, while the euro headed higher as projections showed the party of France’s president won a large majority in parliamentary elections.
“The euro climbed against the dollar amid indications that Emmanuel Macron’s party is poised to win the biggest majority in 15 years. The pound slipped with formal negotiations on the U.K.’s exit from the European Union due to start. The kiwi climbed as a gauge of the services industry expanded at a faster pace.” Read more.
MORE ON CLINGER — FT’s Barney Jopson: “Trump has taken a big step towards loosening the shackles on Wall Street by nominating a Capitol Hill aide involved in efforts to rip up the Dodd-Frank act as one of the US’s most powerful bank regulators” Read more.
CEOS HAVE ACCESS, BUT DO THEY HAVE CLOUT? — WSJ’s Vanessa Fuhrmans and Peter Nicholas: “When tech industry executives gather at the White House Monday, brainstorming ways to modernize government will be on the agenda. But on display will be … Trump’s evolving relationship with America’s corporate chieftains. …
“[C]orporate leaders are learning about the limits of their clout. Hopes for an overhaul of the corporate-tax code this year are fading, some executives and corporate lobbyists say, as the White House and lawmakers struggle to reach consensus on a plan that could get through Congress” Read more.
GLOBAL INVESTORS SEE NEW WORRIES IN CHINA — NYT’s Michael Schuman: “While investors have been preoccupied with President Trump and chaos in Washington, nerve-rattling elections in Europe and the uncertainty created by Federal Reserve policy and Britain’s decision to leave the European Union, a once-familiar — and possibly bigger — risk to global markets has been bubbling in the background. China.
“Two years after China first set off investor alarm bells worldwide with a stock market crash, a slumping currency and concerns over rising debt, many investors have put those concerns out of mind. Shares of Chinese companies traded in Hong Kong and other places outside the mainland have surged to their highest levels since the crash, beating markets in other developing countries, as investors embrace China’s thriving technology and consumer scenes.” Read more.
BOND TRADERS COME OUT ON TOP AFTER RATE HIKES — Bloomberg’s Brian Chappatta: “It’s been 18 months since the Federal Reserve’s first post-crisis increase in interest rates. Four hikes in, investors in the $14 trillion Treasuries market are laughing all the way to the bank.
“ … Heading into the U.S. summer doldrums, traders seem almost resigned to the notion that a 10-year yield of 2 percent looks far more achievable than 3 percent. This week brings little in the way of significant U.S. data, leaving strategists at BMO Capital Markets contemplating trading patterns and seasonality that could drive yields even lower.” Read more.
BIG BANKS POISED TO STEP UP PAYOUTS — FT’s Ben McLannahan and Barney Jopson: “Big banks in the US are forecast to step up payouts to shareholders, as they clear the latest round of tests designed to ensure they could withstand a catastrophic shock to the system.
“After six years of annual stress tests, the likes of JPMorgan Chase, Wells Fargo and Goldman Sachs have built capital levels high enough to keep trading through the most severe downturn that the regulator can imagine. The banks have also been given repeat endorsements from the US Federal Reserve for the way they manage their risks.
“As a result, according to analysts at Goldman, about a dozen of this year’s 34 test-takers will put in requests for payouts in excess of profits — up from a handful last year. Banks returning more than 100 percent of earnings through dividends and share buybacks over the next cycle could include Citigroup and Morgan Stanley, Goldman said.” Read more.
WHAT’S AHEAD FOR THE GLOBAL ECONOMY? — WSJ: “This week, the U.S. will get a read on the housing market with existing- and new-home sales releases, a number of Federal Reserve officials will give their first public comments following the central bank’s decision to raise interest rates, and a purchasing managers index could show the eurozone economy lost some of its momentum in June.” Read more.
CONSUMERS TURN SHOPPING INTO A POLITICAL STATEMENT — FT’s Shannon Bond: “Fifty-seven percent of global consumers buy or boycott products because of a brand’s stance on political or social issues, according to a new survey, a sign of growing pressure on companies to weigh in on hot-button topics from immigration and climate change to transgender rights and fake news.
“Amplified by the megaphone of the internet, consumers have successfully pushed companies including JPMorgan, Coca-Cola, Mercedes-Benz and Delta Air Lines to pull their marketing dollars from controversial television programmes, unsavoury internet content and even a production of Shakespeare’s Julius Caesar.” Read more.
AUTO DEBT REMAINS WELL AFTER REPOSSESSION — NYT’s Jessica Silver-Greenberg and Michael Corkery: “For millions of Americans like Ms. Harris who have shaky credit and had to turn to subprime auto loans with high interest rates and hefty fees to buy a car, there is no getting out.
“Many of these auto loans, it turns out, have a habit of haunting people long after their cars have been repossessed. The reason: Unable to recover the balance of the loans by repossessing and reselling the cars, some subprime lenders are aggressively suing borrowers to collect what remains — even 13 years later.” Read more.
DIGITAL INVESTMENT SERVICES TURN TO NICHES — WSJ’s Anne Tergesen: “As the millennial investor comes of age, two youthful trends are converging: socially responsible investing and robo-advisory services.
“Over the past year, a small but growing number of firms have introduced automated — or ‘robo’ — investment services that include socially responsible investments. Driving the interest is a desire on the part of individuals to spend and invest in ways that are consistent with their values.” Read more.
President Trump today hosts Panama President Juan Carlos Varela at the White House. He will also meet with technology leaders, including Amazon CEO Jeff Bezos, Apple CEO Tim Cook, PayPal co-founder Peter Thiel, and Google chief Eric Schmidt, who will be at the White House to give advice on ways to improve the government’s use of technology, according to reports.
The Senate meets at 4 p.m. with a 5:30 p.m. confirmation vote on FEMA administrator nominee Brock Long. The House is out but will be back Tuesday.
Senate Republicans are struggling to reach a consensus on their bill to repeal and replace ObamaCare ahead of a looming recess.
GOP lawmakers have spent weeks locked in closed-door meetings, as well as caucus lunches, discussing proposals.
But key policy choices, including what year to end the Medicaid expansion and whether or not to keep some of ObamaCare’s taxes, remain unanswered with less than two weeks until Congress is scheduled to leave town for the July 4th recess.
Conservatives are warning Senate leadership against moving the bill to far to the middle. They’ve specifically taken issue with a longer phase out of Medicaid expansion and keeping in place some of ObamaCare’s taxes for longer than the House bill.
“I think we shouldn’t have new entitlements that will go on forever in a Republican plan to fix healthcare,” Sen. Rand Paul (R-Ky.) told reporters. “We can’t pay for what we already have: Medicare, Medicaid and Social Security.”
Paul, and Sens. Mike Lee (R-Utah) and Ted Cruz (R-Texas) are considered three potential conservative “no” votes, though Cruz has largely held his fire. Both he and Lee are part of the working group convened by Majority Leader Mitch McConnell.
Meanwhile, Sen. Lisa Murkowski (R-Alaska), a moderate Republican and key vote, signaled late last week that she was still undecided on the Senate effort.
“I just truly do not know, because I don’t know where it’s going,” she told reporters.
She separately said in a letter that she’s “committed” to funding Planned Parenthood. The House bill defunds the group for a year.
With 52 seats Republicans could theoretically pass a bill without the two senators, but would need to keep every other member on board and require Vice President Mike Pence to break a 50-50 tie.
Top GOP senators—including Sen. John Thune (R-S.D.), the No. 3 Republican—have expressed optimism that they would be able to vote on their legislation by the July 4th recess.
The move would allow them to use July to hash out differences with the House if the bill passes, or move on to a full calendar of other policy issues if it fails.
But McConnell has yet to publicly commit to a timeline, and Sen. John Cornyn (R-Texas), the No. 2 Senate Republican, has pointed to the August recess as the caucus’s self-imposed deadline.
Democrats are also stepping up their attacks on the GOP healthcare bill, dinging Republicans for refusing to discuss the yet-written legislation in public.
Minority Leader Chuck Schumer (D-N.Y.) sent a letter to McConnell late last week, requesting an all-senators meeting so the two sides could “come together to find solutions to America’s challenges.”
“Please accept our invitation to sit down together in the old Senate Chamber so we can hear your plans and discuss how to make healthcare more affordable and accessible,” Schumer wrote.
Democrats also introduced legislation that would block Republicans from bringing their ObamaCare repeal and replace legislation up for a vote under reconciliation—the fast-track progress that lets its pass by a simple majority—without first giving it a hearing.
Gianforte takes office
Republican Greg Gianforte will take the oath of office on Wednesday afternoon, a month after he assaulted Ben Jacobs, a reporter for The Guardian, the night before a special election.
He’ll be sworn in as a House member just over a week after pleading guilty to the assault. Gianforte was sentenced to 40 hours of community service and 20 hours of anger management counseling, along with a $385 fine.
Gianforte had already pledged to donate $50,000 to the Committee to Protect Journalists while issuing a full apology to Jacobs.
His swearing-in will take on added significance after last Wednesday’s shooting at the GOP baseball practice in Alexandria, Va.
Lawmakers have been calling for greater political civility in the aftermath of a gunman shooting four people, including House Majority Whip Steve Scalise (R-La.).
Scalise remains in the hospital and is expected to remain there for weeks as he recovers from multiple surgeries since a bullet pierced his hip.
Gianforte said in an interview with the Associated Press on Friday that lawmakers are obligated to tone down the partisan rancor.
“I believe that good things can come out of bad,” Gianforte said. “It’s important to make sure we reach out to all parties and hear their voice. I think the other parties have an obligation, as well, to be respectful and in that dialogue.”
Gianforte’s campaign initially issued a statement describing the altercation as “aggressive behavior from a liberal journalist.” But he later apologized at his campaign victory rally the next day after winning the special election over Democrat Rob Quist.
Gianforte is sure to attract massive media interest as soon as he steps into the Capitol Hill complex on Wednesday.
Capitol Hill is a uniquely accessible place for journalists, who are authorized to freely roam just about anywhere on the campus. They congregate outside the House and Senate chambers during votes, and walk up to lawmakers making their way inside to ask questions on behalf of the public.
Gianforte will be closely watched on how he handles the crowds of reporters that are sure to gather around him, put their recorders near his face and ask relentless questions.
Some Democratic lawmakers and the Democratic Congressional Campaign Committee have called on the GOP to refuse to let Gianforte be sworn into office after he admitted to a crime.
But GOP leaders have shown no indication they would refuse to let Gianforte into their ranks.
For the third week in a row, a witness will be called before Congress to testify publicly about Russia’s interference in last year’s election.
Former Homeland Security Secretary Jeh Johnson will appear before the House Intelligence Committee on Wednesday to discuss Russian efforts to breach U.S. election systems.
Johnson’s testimony will come after Attorney General Jeff Sessions, former FBI Director James Comey and the heads of the nation’s security agencies appeared before the Senate Intelligence Committee this month.
The House and Senate Intelligence Committees are conducting two separate investigations into Russia’s election meddling.
The House Appropriations Committee, meanwhile, will also hold a hearing that could result in questions about the FBI’s investigation into Russia’s role in the election and potential ties with President Trump’s campaign.
Acting FBI Director Andrew McCabe will appear before an Appropriations subcommittee to testify about the agency’s budget, but is sure to get questions about the Russia probe.
In the Senate, the Intelligence Committee plans to host a hearing also on Wednesday about potential cyber threats in the 2018 and 2020 elections. That hearing will feature testimony from DHS and FBI officials leading cyber and intelligence divisions.
Workforce development, environmental processes
The House is slated to consider legislation by Rep. Carlos Curbelo (R-Fla.) to create grants for states to conduct projects that help low-income individuals enter the workforce.
Curbelo introduced the bill with Illinois Democrat Danny Davis, which should pave the way for a bipartisan vote this week.
“Poverty is an issue that affects each our districts. We need innovative solutions that can help get people on track to a brighter future,” Curbelo said as the House Ways and Means Committee considered the legislation last week.
Floor consideration of both bills comes after Trump signed an executive order last week aimed at expanding apprenticeships to help people with job training. The order directs the Labor Department to create new rules allowing companies, industry groups and unions to make their own programs to be approved by the agency.
Lawmakers will also consider legislation to streamline the process for utility companies to remove trees near transmission lines as a way to limit the risk of wildfires and streamlines agency coordination for reviews to construct new surface water storage projects.
Sources: Russians discussed potentially ‘derogatory’ information about Trump and associates during campaign
Russian government officials discussed having potentially “derogatory” information about then-presidential candidate Donald Trump and some of his top aides in conversations intercepted by US intelligence during the 2016 election, according to two former intelligence officials and a congressional source. One source described the information as financial in nature and said the discussion centered on whether the Russians had leverage over Trump’s inner circle. The source said the intercepted communications suggested to US intelligence that Russians believed “they had the ability to influence the administration through the derogatory information.” But the sources, privy to the descriptions of the communications written by US intelligence, cautioned the Russian claims to one another “could have been exaggerated or even made up” as part of a disinformation campaign that the Russians did during the election. The details of the communication shed new light on information US intelligence received about Russian claims of influence. The contents of the conversations made clear to US officials that Russia was considering ways to influence the election — even if their claims turned out to be false. None of the sources would say which specific Trump aides were discussed. One of the officials said the intelligence report masked the American names but it was clear the conversations revolved around the Trump campaign team. Another source would not give more specifics, citing the classified nature of the information. “The Russians could be overstating their belief to influence,” said one of the sources. As CNN first reported, the US intercepted discussions of Russian officials bragging about cultivating relationships with Trump campaign aides during the campaign, including Trump’s first national security adviser, Michael Flynn, to influence Trump. Following CNN’s report, The New York Times said Trump’s campaign chairman Paul Manafort was also discussed. More:
Investigation Turns to Kushner’s Motives in Meeting With a Putin Ally
WASHINGTON — Jared Kushner, the president’s son-in-law and senior adviser, was looking for a direct line to President Vladimir V. Putin of Russia — a search that in mid-December found him in a room with a Russian banker whose financial institution was deeply intertwined with Russian intelligence, and remains under sanction by the United States. Federal and congressional investigators are now examining what exactly Mr. Kushner and the Russian banker, Sergey N. Gorkov, wanted from each other. The banker is a close associate of Mr. Putin, but he has not been known to play a diplomatic role for the Russian leader. That has raised questions about why he was meeting with Mr. Kushner at a crucial moment in the presidential transition, according to current and former officials familiar with the investigations. The New York Times first reported the meeting between Mr. Kushner and Mr. Gorkov in March, but the White House at the time did not explain its aim. That article quoted a White House spokeswoman, Hope Hicks, who said that the meeting came at the request of the Russian ambassador to the United States, Sergey I. Kislyak, with whom Mr. Kushner had met earlier in December at Trump Tower to discuss opening a communications channel with Russian officials during the presidential transition. But the half-hour meeting with Mr. Gorkov since has come under increasing scrutiny. The current and former American officials now say it may have been part of an effort by Mr. Kushner to establish a direct line to Mr. Putin outside of established diplomatic channels. The meeting came as Mr. Trump was openly feuding with American intelligence agencies and their conclusion that Russia had tried to disrupt the presidential election and turn it in his favor. The Senate Intelligence Committee notified the White House in March that it planned to question Mr. Kushner about the meeting. On Friday, citing American officials briefed on intelligence reports, The Washington Post reported that Mr. Kislyak told his superiors in Moscow that Mr. Kushner had proposed a secret channel and had suggested using Russian diplomatic facilities in the United States for the communications. The White House has not denied the Post report, which specified that Russian communication centers at an embassy or consulate in the United States were discussed as hosts for the secure channel. It is not clear whether Mr. Kushner saw the Russian banker as someone who could be repeatedly used as a go-between or whether the meeting with Mr. Gorkov was designed to establish a direct, secure communications line to Mr. Putin.More:
With Italy No Longer in U.S. Focus, Russia Swoops to Fill the Void
ROME — President Trump made the most of his short time in Italy. He was treated to a private audience with the pope, met with both the country’s president and its prime minister in Rome, flew to Sicily for a summit meeting of world leaders and visited with American troops at a nearby naval air station. But as the sudden burst of diplomatic activity subsided with his departure, European and American officials fear a return to the new normal of American inattention as the administration struggles with political turmoil and Russia-related scandals back home. All the while, Russia is assiduously courting Italy, a country that once had the largest Communist party outside the Soviet bloc and that many analysts consider the soft underbelly of the European Union. In Rome, Mr. Trump left behind an embassy without an ambassador, and forfeited a geopolitical playing field that Moscow’s ambassador in Rome, Sergey Razov, is exploiting. A deliberate, gray-haired career diplomat, Mr. Razov has been plugging away at building relationships with Italian politicians, organizing concerts for Italy’s earthquake survivors and visiting Italian regional officials who lament the “unfair” sanctions on Russia — which Moscow dearly wants lifted. Next month, Mr. Razov will offer a sumptuous buffet when he hosts the annual Russia Day celebration amid the dripping chandeliers, coffered ceilings and gilded interiors of his Villa Abamelek residence. Like Mr. Razov’s energetic diplomacy, much of Russia’s relationship building is being done in plain sight, as when President Vladimir V. Putin of Russia hosted Prime Minister Paolo Gentiloni this month in Sochi, and President Sergio Mattarella a few weeks before that in Moscow. But there is a fear among Italian, European and American officials that Russia is also using the same kind of behind-the-scenes influence and news media obfuscation it has employed in the United States and elsewhere, creating a tilt in Italy toward Moscow. Former Prime Minister Matteo Renzi complained privately to his counterparts about Russian meddling in his country’s politics by supporting anti-establishment parties. And websites controlled by a leader of the Five Star Movement, one of Italy’s most popular anti-establishment parties, have spread reports published on Sputnik Italia, an Italian version of the Russian state-funded news operation. Russia “has invested a lot in influencing public opinion in this country,” said Celia Kuningas-Saagpakk, the Estonian ambassador to Italy. She previously worked in her country’s Foreign Ministry, where she covered Russia and monitored its strategies and propaganda tactics in Ukraine and elsewhere. More:
Manuel Noriega, Panamanian strongman toppled in U.S. invasion, dies at 83
Gen. Manuel Noriega, the Panamanian strongman and onetime American ally who was toppled from power in a 1989 U.S. invasion and who spent more than two decades imprisoned on drug dealing and conspiracy convictions, died late Monday. He was most likely 83. The cause of death was not announced but Gen. Noriega had been in intensive care at a hospital for months after complications from surgery to remove a benign brain tumor. Panamanian President Juan Carlos Varela announced the death Tuesday morning on Twitter, saying that the passing closes a chapter in the country’s history. A career military man, Gen. Noriega led the Panamanian Defense Forces from 1983 until President George H.W. Bush ordered the invasion on Dec. 20, 1989, which followed months of deteriorating relations between Panama and the United States. Gen. Noriega was a polarizing figure for decades after he was led in chains from Panama by U.S. marshals on Jan. 4, 1990, to a federal prison in Miami. His opponents said Gen. Noriega was a brute who killed his opponents and hid millions of dollars in gains from drug and other corruption payments. Retired Army general and former secretary of state Colin L. Powell once described Gen. Noriega as “pure evil.” Gen. Noriega consistently rejected such charges, which he said were trumped up by opponents. He claimed the Bush administration moved against him after he refused to help American policy in Central America intended to overthrow Nicaragua’s Sandinista government and halt a civil war in El Salvador. More:
Even Angela Merkel’s political rivals are on her side against Trump
As they campaign against each other ahead of national elections in September, German Chancellor Angela Merkel and her chief political rival, Martin Schulz, find themselves united in opposition to President Trump. Speaking at a beer hall rally in Munich on Sunday, Merkel suggested that the era when Europe could rely on the United States may be coming to an end and that the continent “really must take our fate into our own hands.” The dramatic announcement came after contentious meetings with Trump, who had used his first official trip to Europe to criticize German trade, scold world leaders about their NATO spending and refuse to commit to the Paris agreement on combating climate change. Schulz, a former president of the European Parliament, is the head of the center-left Social Democrats. He is easily the most convincing challenger to Merkel’s 11-year reign as chancellor and a charismatic leader in his own right. Yet rather than criticize his rival or her Christian Democratic Union-led government for the strained relationship with Trump, Schulz has passionately offered support. In video published by the Deutsche Welle news agency on Monday, a visibly angry Schulz can be seen railing against Trump, who he said “believed he could inflict humiliation in Brussels.” The Social Democrat leader then said it did not matter that Merkel and he were in the middle of an election campaign, as “the chancellor represents all of us at summits like these, and I reject with outrage the way this man takes it upon himself to treat the head of our country’s government.” “That is unacceptable,” Schulz said. He had made a similar comment on Sunday shortly after Merkel’s remarks. “A stronger cooperation of European countries on all levels is the answer to Donald Trump,” Schulz told the public broadcaster ARD. On Monday, he tweeted in German, English and French that the “best response to Donald Trump is a stronger Europe.”
Trump Blasts Germany Again as Merkel, Modi Cite Mutual Values
U.S. President Donald Trump ratcheted up a dispute with Germany over trade and defense as Chancellor Angela Merkel met with Indian Prime Minister Narendra Modi in a demonstration of her ability to pivot from the U.S. to strengthen alternative global alliances. “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military,” the U.S. president posted on Twitter Tuesday. “This will change.” The message came minutes after Merkel and Modi held a joint press conference in Berlin, at which the German leader called India a “reliable partner with respect to big projects.” That contrasted with her comments in Munich on Sunday that reliable trans-Atlantic ties that formed the basis of German foreign policy since World War II “are to some extent over.” Merkel and Modi stressed their mutual values on the economy and climate change, with the Indian leader suggesting he will adhere to the Paris Agreement to combat global warming even if the U.S. quits. He praised Merkel’s experience and Germany’s economic example to India. “We are meant for each other,” Modi said.
Fact-check: Donald Trump says Germany owes ‘vast sums of money to NATO’
Less than 24 hours after meeting with German Chancellor Angela Merkel, President Donald Trump took to Twitter to criticize Germany for shirking on its defense payments to the North Atlantic Treaty Organization and the United States. “Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel,” Trump wrote in a tweet March 18. “Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!” Trump has repeatedly called on NATO countries to contribute more to that military alliance, so we decided to fact-check his claim about Germany. What we found is that Trump is misunderstanding how NATO’s joint defense is paid for, and that Germany doesn’t owe anything. See more:
North Korea Says New Missile Landed Within 7 Meters of Target
North Korea’s latest ballistic missile test involved a new rocket with a precision guidance system that landed within seven meters of its target, its state-controlled news agency said Tuesday. Leader Kim Jong Un oversaw the launch of the missile early Monday from the country’s east coast. Preparations before the firing were more automated than for the previous “Hwasong,” or Scud, rockets, the Korean Central News Agency said, adding that this “markedly” reduced the launching time. The accuracy claims, if true, would represent a potentially significant advancement in North Korea’s missile program. KCNA said Kim called for the continued development of more powerful strategic weapons, though the report didn’t mention whether the missile could carry nuclear warheads. “We can’t prove if it’s bluffing, but North Korea is basically saying it can hit the target right in the center, which is scary news for the U.S.,” said Suh Kune Y., a professor at Seoul National University’s department of nuclear engineering. “If true, that means they’re in the final stage of missile development.” The missile first appeared at an April 15 military parade celebrating the birth anniversary of North Korea’s founder Kim Il Sung, the news agency said. It flew 450 kilometers (280 miles) toward Japan, according to South Korean military officials, with the government in Tokyo saying it may have reached waters in Japan’s exclusive economic zone. The test — the ninth this year — came two days after the Group of Seven nations pledged to “strengthen measures” aimed at prompting North Korea to cease nuclear and ballistic missile trials. World leaders are grappling with how to halt provocations by the isolated nation, with South Korea’s President Moon Jae-in seeking engagement while U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe take a harder line. KCNA said North Korea won’t be swayed by pressure from the G-7. More:
U.S. Bombers Fly Near North Korean Border After Missile Launch
SEOUL—The U.S. and South Korea conducted a joint drill involving U.S. B-1B bombers on Monday, the second such exercise this month and a move North Korea called “a grave military provocation,” after the North test-launched a short-range ballistic missile the same day. The drill, which North Korea said took place over South Korea and near the Military Demarcation Line that divides the two Koreas, was confirmed by a spokesman for South Korea’s South Korea’s Ministry of National Defense. The spokesman said the South Korean air force conducted the joint drill with the U.S. but declined to give further details or to say how many B-1B bombers were involved. Lt. Col. Lori Hodge, a spokeswoman for the U.S. Pacific Air Force Command, wouldn’t comment on the particulars of the mission, saying only that the U.S. has “maintained a rotational strategic bomber presence in the region for more than a decade.” She added that the aircraft “provide a significant capability that enables our readiness and commitment to deterrence” and reassured allies in the region. Earlier this month, the U.S. sent a pair of B-1B bombers to an area around the Korean Peninsula to conduct exercises with the South Korean and Japanese air forces, following a failed North Korean missile test days earlier. In that case, as with the most recent one, South Korea only confirmed the joint exercise after North Korea first publicized it in its state media. North Korea accused the U.S. of staging a “nuclear-bomb-dropping drill” with the bombers, which it sees as a new provocation in addition to the presence of the USS Carl Vinson and the USS Ronald Reagan, two aircraft carriers that are operating near the Korean Peninsula. More:
Old World Order Is Alive But Unwell After Four Months of Trump
Four months into Donald Trump’s presidency, the sky has not fallen in on the system of global governance the U.S. did so much to construct since World War II. It is, however, in deep trouble. Trump has not followed through on pre-election threats to declare the North Atlantic Treaty Organization obsolete, abandon the North American Free Trade Agreement, accept Russia’s annexation of Crimea or declare China a currency manipulator. And yet, as he flew back to Washington at the weekend, Trump’s meetings with traditional U.S. allies during his nine-day tour of the Middle East and Europe appeared to leave them more, rather than less worried about the inventory of issues that caused such concern last November. They emerged unsure of his commitment to NATO’s collective-defense principle, unclear as to his stance toward Russia, deeply concerned about his distrust of free-trade agreements and in suspense as to whether he’ll withdraw the U.S. from the 2015 Paris Agreement to slow climate change. Trump said in on Twitter he’d make the decision this week. “We are not in good shape at all,’’ said Francois Heisbourg, a veteran analyst of the trans-Atlantic alliance and chairman of the International Institute for Strategic Studies. “In some ways it’s worse than I thought.’’ He described those as issues of Trump’s impetuous character and governance style.
U.S. Senator calls for probe into promotion of Kushner Cos deal
The chairman of the Senate Judiciary Committee has called for an investigation into “potentially fraudulent statements and misrepresentations” made by companies promoting investment in a property development involving the family company of White House advisor Jared Kushner. Citing a May 12 report by Reuters, Chuck Grassley, a Republican senator from Iowa, requested a review of claims made by Chinese migration agency Qiaowai and the U.S. Immigration Fund (USIF) in the marketing of the One Journal Square project in Jersey City, New Jersey to potential investors in China. Grassley flagged his concerns to the Department of Homeland Security and the Securities and Exchange Commission in a May 24 letter that was later posted on his website. Jupiter, Florida-based USIF contracted with Beijing-based Qiaowai to market projects including One Journal Square to potential investors through the controversial EB-5 scheme. The program offers qualified foreign investors the chance at a green card in exchange for a $500,000 investment in a U.S. business. Kushner Companies is also working with KABR Group, a private equity fund, on the One Journal Square project, according to marketing materials on Qiaowai’s website. The developers are seeking to raise $150 million, or 15.4 percent of the funding, from EB-5 investors. Because the SEC considers some EB-5 investments securities, companies and individuals that market these investments must comply with U.S. securities laws. EB-5 schemes must also comply with immigration rules. Under United States Citizenship and Immigration Services (USCIS) guidelines, EB-5 investors must put their capital at risk and the green card is not guaranteed. USCIS is part of the Department of Homeland Security. More:
Trump’s Trip Was a Catastrophe for U.S.-Europe Relations
Seven years after the end of the Second World War, on the 10th of March 1952, the governments of the United States, the United Kingdom, France, and the newly established Federal Republic of Germany received an astounding note from the Soviet Union. The Soviet Union offered to withdraw the troops that then occupied eastern Germany and to end its rule over the occupied zone. Germany would be reunited under a constitution that allowed the country freedom to choose its own social system. Germany would even be allowed to rebuild its military, and all Germans except those convicted of war crimes would regain their political rights. In return, the Allied troops in western Germany would also be withdrawn—and reunited Germany would be forbidden to join the new NATO alliance. Historians have long debated whether the note represented a genuine offer or a cynical ploy. (Current consensus: ploy.) There’s no debate about what happened next. Determined to anchor Germany securely in the Western camp of nations, German Chancellor Konrad Adenauer rebuffed the “Stalin note.” West Germany would enter NATO in 1955, build the European Union, and develop as an Atlanticist liberal democracy. The Soviets did not quit, however. Again and again through the Cold War they would probe for ways to split Germany from the West, and especially from the United States. They probably came closest in the early 1980s, when millions of Germans marched in the streets against NATO nuclear missile deployments. (The 1983 song, “99 Luftballons” is probably now the most enduring memento of that dramatic moment.) But in the end … it didn’t work. The alliance held. The Soviet bid for dominance collapsed, as did the Soviet Union itself. Germany was reunited on Western terms: liberal and Atlanticist from the Moselle to the Oder. The deft diplomacy of President George H.W. Bush and Brent Scowcroft over-mastered the objections of Moscow—and not just Moscow. “I love Germany so much that I am grateful there are two of them” went a quip usually attributed to the French novelist Francois Mauriac. For many in London and Paris, Margaret Thatcher and Francois Mitterrand very much included, the quip was no joke. Much of the present malfunctioning architecture of the European Union—including the lethal euro currency—originated in French demands for reassurance that reunification would lead to “a European Germany, not a German Europe. More:
Report: Trump to reverse Obama’s Cuba policy
President Donald Trump plans on reversing a set of policies softening relations with Cuba, according to a report from The Daily Caller. The U.S.-Cuba Trade and Economic Council, a non-partisan group, said the Trump administration is preparing to announce the changes to Obama-era policies in a June speech in Miami, according to the Daily Caller. The report cites two unnamed sources who said a bipartisan trio of senators — Marco Rubio (R-Fla.), Bob Menendez (D-N.J.), and Mario Diaz-Balart (R-Fla.) — pushed for the reversal. Obama, who became the first U.S. president to visit Cuba in almost a century last year, put in motion a series of policies to thaw relations with the Communist island nation, which had been a strategic burden throughout the Cold War. While Obama was able to soften regulation on some kinds of trade, business and travel, Congress has refused to lift the 57-year-old embargo. The Trump administration had put the Cuba policy under review upon taking office. The Daily Caller report surfaced days after Trump met with Pope Francis, who facilitated the deal between Obama and Cuban President Raul Castro.
The $50 Billion Question: What Makes a Bank Big?
There’s a magic line in banking, and it is $50 billion. That is the boundary that separates the big banks from the small. Firms with assets in excess of that figure face stricter rules on capital, mergers and other business, thanks to the Dodd-Frank Act of 2010. Now, as the Trump administration and Republican-controlled Congress look to overhaul Dodd-Frank, one of the few points of bipartisan agreement is that $50 billion isn’t the right number. Lawmakers can’t agree on a better one, though. Banks over the threshold are getting used to the fact that, despite President Trump’s promises to deregulate the banking industry, even an unpopular provision is hard to overturn in the current polarized political environment.
To many banks and industry analysts, change seems commonsensical. The Dodd-Frank rule was implemented to help prevent another financial crisis. But as Treasury Secretary Steven Mnuchin recently told the Senate Banking Committee, banks with $50 billion in assets don’t pose “the same risk as a bank that has $750 billion or $2 trillion.” Even many officials known for sparring with banks, including Daniel Tarullo, the Federal Reserve’s former top banking regulator, support raising the limit. So does Barney Frank, the former Democratic congressman who with former Democratic Senator Chris Dodd was the driving force behind Dodd-Frank. “All numbers are arbitrary, and in the rush, $50 billion seemed like a much bigger number,” Mr. Frank said in a recent interview. Widespread support means Congress theoretically could act to change at least this part of Dodd-Frank. At the recent banking committee hearing, Chairman Mike Crapo (R., Idaho) made a point of calling the $50 billion threshold “one area I would like this committee to address.” Mr. Mnuchin said Treasury would provide recommendations to the president in early June. The trick will be reaching a compromise on what should come next. More:
Drug Lobbyists’ Battle Cry Over Prices: Blame the Others
WASHINGTON — Hundreds of independent pharmacists swarmed the House and Senate office buildings one recent afternoon, climbing the marble staircases as they rushed from one appointment to the next, pitching lawmakers on their plan to rein in the soaring drug prices that have enraged American consumers. As they crowded into lawmakers’ offices, describing themselves as the industry’s “white hats,” they pointed a finger at pharmacy benefit managers like Express Scripts and CVS Health, which handle the drug coverage of millions of Americans. “Want to reduce prescription drug costs?” the pharmacists argued during their visits. “Pay attention to the middlemen.” A civil war has broken out among the most powerful players in the pharmaceutical industry — including brand-name and generic drug makers, and even your local pharmacists — with each blaming others for the rising price of medicine. It is an industry that was already spending nearly double what other business sectors in the United States economy allocate on lobbying, and those sums continue to rise. President Trump has only heightened anxiety by accusing the drug industry of “getting away with murder,”even though he has not weighed in with his own proposal. For now, lawmakers are facing an almost daily assault. “Everyone is very eager to maximize their profits and get a piece of the pie, and sorting it all out is complicated,” said Senator Susan Collins, Republican of Maine. The question is whether a rare confluence of public outrage, political will and presidential leadership can bring about a meaningful change that will slow the drain on consumers’ pocketbooks. “You remember that old photograph of the Three Stooges, their faces cracked sideways and they are pointing at each other?” asked Chester Davis Jr., the president of the Association for Accessible Medicines, sitting in the basement cafeteria of the Russell Senate Office Building at the start of a day in which he would make his own pitches on behalf of generic drugmakers. “Everyone is doing the finger-pointing, when in fact there is a lot of blame to go around.” More:
The Business of Litigation Finance Is Booming
The buying and selling of lawsuits—a decade-old practice in the U.S. known as litigation finance—continues to expand. Consider Pierce Sergenian, a six-lawyer trial boutique started this year by John Pierce and David Sergenian, refugees from the litigation powerhouse Quinn Emanuel Urquhart & Sullivan. The new firm already has an impressive array of contingency-fee cases, where lawyers get paid out of any trial or settlement award. The portfolio includes a high-profile suit against Snap Inc. filed on behalf of a former employee who alleges he was fired for refusing to help executives exaggerate the user base of Snapchat, the disappearing-image app. The only way Pierce Sergenian could afford to handle the 10 cases it has on board is by selling a separate interest in the potential recoveries to a financier, John Pierce explains. Pravati Capital, a litigation funder in Scottsdale, Arizona, has promised to underwrite the law firm’s current and future contingency cases. In return, Pravati will receive its own cut of any damages or settlement amounts–before clients collect anything. Specific dollar figures are confidential, but Pierce says Pravati has agreed to provide the firm with up to an eight-figure sum. Pravati’s chief executive, Alex Chucri, didn’t return a phone message seeking comment. The financing of Pierce Sergenian marks the first time that a law firm and funder have gone public about the existence of such a portfolio-investment arrangement. “It sends a message to deep-pocketed defendants and their law firms that we can go up against the biggest and best,” Pierce says. “It levels the playing field.” If that sounds appealing—more suits on behalf of the proverbial little guy—then the spread of litigation finance should bring cheer. More:
A Texas Republican called ICE on protesters. Then lawmakers started to scuffle.
Lawmakers scuffled on the floor of the Texas House of Representatives on Monday after a Dallas-area Republican told Democrats that he called Immigration and Customs Enforcement officers on protesters in the House gallery. “We were just on the floor talking about the SB4 protests, and [state Rep.] Matt Rinaldi came up to us and made it a point to say, ‘I called (ICE) on all of them,’ ” state Rep. Philip Cortez (D) said. “And this is completely unacceptable. We will not be intimidated. We will not be disrespected.” The protesters were apparently chanting and waving signs against Senate Bill 4, the controversial Texas legislation that Gov. Greg Abbott (R) signed into law this month. It bans sanctuary cities, allows police to question anyone they detain about their immigration status, and compels local officials to comply with federal requests to detain individuals in state and local law enforcement facilities. The law was passed amid a national conversation about immigration enforcement priorities and promises from the Trump administration to aggressively pursue and deport undocumented immigrants. Signing SB4 into law was seen as a big victory for Texas Republicans, who had tried unsuccessfully to pass a ban on sanctuary cities in each legislative session since 2011. Texas Democrats reacted to the bill’s passage with alarm; one lawmaker went on a hunger strike. Video of the scuffle shows lawmakers pushing one another, yelling and gesticulating. Later, Democrats said, Rinaldi repeatedly got in their faces and cursed at them. More:
White Collar Watch: When ‘Political Intelligence’ Meets Insider Trading
A case involving insider trading charges based on government information dispensed by a “political intelligence” operative raises interesting questions about how some of the tricky rules for proving the offense will be applied when information is leaked from a federal agency rather than a corporation.
An indictment filed in United States District Court in Manhattan accuses David B. Blaszczak of exploiting his friendship with Christopher M. Worrall, who held a senior staff position at the Centers for Medicare and Medicaid Services, to learn about impending changes in Medicare reimbursement that would affect health care companies. Mr. Blaszczak then passed the information, the indictment says, to Deerfield Management, a hedge fund firm that was a client of his consulting firm. Two Deerfield partners, Theodore J. Huber and Robert Olan, have been charged along with Mr. Blaszczak and Mr. Worrall with conspiracy, securities fraud, wire fraud and theft of government property. A third partner, Jordan B. Fogel, pleaded guilty to charges and is cooperating with prosecutors. All the defendants except Mr. Olan were also sued by the Securities and Exchange Commission. Lawyers for Mr. Huber and Mr. Olan have denied that their clients engaged in any wrongdoing. The Justice Department accuses Mr. Worrall of leaking information to Mr. Blaszczak about impending cuts to the rates that Medicare pays for certain treatments. Mr. Blaszczak had a number of clients paying for his access to political intelligence about an important program that spends as much as $1 trillion a year.
Trump administration plans to minimize civil rights efforts in agencies
The Trump administration is planning to disband the Labor Department division that has policed discrimination among federal contractors for four decades, according to the White House’s newly proposed budget, part of wider efforts to rein in government programs that promote civil rights.
As outlined in Labor’s fiscal 2018 plan, the move would fold the Office of Federal Contract Compliance Programs, now home to 600 employees, into another government agency in the name of cost-cutting.
The proposal to dismantle the compliance office comes at a time when the Trump administration is reducing the role of the federal government in fighting discrimination and protecting minorities by cutting budgets, dissolving programs and appointing officials unsympathetic to previous practices. The new leadership at the Environmental Protection Agency, for instance, has proposed eliminating its environmental justice program, which addresses pollution that poses health threats specifically concentrated in minority communities. The program, in part, offers money and technical help to residents who are confronted with local hazards such as leaking oil tanks or emissions from chemical plants.
Under President Trump’s proposed budget, the Education Department’s Office of Civil Rights — which has investigated thousands of complaints of discrimination in school districts across the country and set new standards for how colleges should respond to allegations of sexual assault and harassment — would also see significant staffing cuts. Administration officials acknowledge in budget documents that the civil rights office will have to scale back the number of investigations it conducts and limit travel to school districts to carry out its work. More:
It may be time to disobey the commander in chief
In the space of a week, Trump fired FBI Director James Comey, lied about why he did it, then admitted in a TV interview that, actually, he prematurely terminated Comey’s 10-year term because he was annoyed with the FBI’s ongoing investigation into his campaign’s ties to Russian officials. It appears that Trump specifically asked Comey to end the investigation after he fired Michael Flynn, his first national security adviser, ostensibly because Flynn had got caught in a lie to the vice president about a conversation with the Russian ambassador. According to Comey’s notes on the conversation, Trump said, “I hope you can let this go.” Comey didn’t let it go. And one suspects that’s why he’s now updating his LinkedIn profile. Meanwhile, it has emerged that Trump asked the director of national intelligence and the director of the National Security Agency to deny that the FBI was investigating his campaign. The whole affair reeks of obstruction of justice, which has not gone unnoticed by Rod Rosenstein, the deputy attorney general, who appointed a special counsel to investigate the mess last week. “We cannot allow this to go unchecked,” said Al Green, a Democratic Congress member from Houston, who called for the president’s impeachment from the floor of the House. “The president is not above the law … I am a voice in the wilderness, but I assure you that history will vindicate me.” Comey’s firing is the latest and worst in a string of outrageous abuses of office. Let’s be clear: The president of the United States asking an FBI director to end an investigation into the activities of his own campaign, and his own administration, and then firing the FBI director — who is meant to be politically independent — because he refused to stop doing his job, is a brazen assault on the rule of law. It’s a monumental breach of the laws and norms that protect citizens from the tyrannical abuse of violent state power. More:
Reports: White House communications director Mike Dubke resigns
White House communications director Mike Dubke has resigned, according to media reports.
Dubke, who has been in the role for three months, handed in his resignation on May 18, Axios reported.The Washington Post and Politico also reported the development. Axios said Dubke offered to stay until end of Trump’s first overseas trip as president. Trump returned to Washington on Saturday from a nine-day foreign trip to Saudi Arabia, Israel, Vatican City, Brussels and Italy. Dubke’s last day as White House communications director has not been set, Axios reported.
Four Senators to Watch in the Trump-Russia Investigation
WASHINGTON — They are a disparate foursome: the chamber’s leading Republican centrist, a minister who embraces public service as a calling, a seasoned dealmaker and a high-profile presidential contender. These four Republican senators — Susan Collins of Maine, James Lankford of Oklahoma, Roy Blunt of Missouri and Marco Rubio of Florida — are emerging as a bloc integral to the Senate Intelligence Committee’s investigation into Russian meddling in the 2016 presidential election. The investigation is widely considered the premier inquiry, the one with the necessary jurisdiction and the best chance of producing a credible outcome. These four senators loom large as a crucial element in getting there. Despite early skepticism about the Republican-led panel’s commitment to the investigation, the four have made it clear that they are determined to see it through to a conclusion that would satisfy the public and their colleagues in both parties. To get there, they will have to slog through thousands of pages of raw intelligence held by the C.I.A. and devote untold hours to grinding committee work behind closed doors. “This is not about the president, this is about the presidency,” said Mr. Lankford, who was a longtime Baptist youth minister before he entered politics. “This is about where we are as a nation.”
This is not to say that other members of the panel aren’t engaged. The committee’s seven Democrats are certainly interested in finding out whether Russians colluded with the Trump campaign and helped to elect him. Senator Richard M. Burr, Republican of North Carolina and the chairman of the panel, has shown an increasing zeal for pursuing the question after an uncertain start. He and Senator Mark Warner of Virginia, the committee’s ranking Democrat, have forged a solid working relationship. Three other Republicans are also playing a role: John Cornyn of Texas, who as the No. 2 Senate Republican brings a leadership perspective to the investigation, Jim Risch of Idaho and Tom Cotton of Arkansas. More:
Boehner: Trump has been a ‘complete disaster’
Former House Speaker John Boehner said earlier this week that Donald Trump’s presidency so far has been “a complete disaster” and that the billionaire-turned commander in chief is still learning the job.
“Everything else he’s done [in office] has been a complete disaster,” Boehner said during a question-and-answer session at a conference in Houston on Wednesday. “He’s still learning how to be president.”
The former GOP speaker, whose remarks were initially reported by the energy-sector publication Rigzone, said he and Trump had been friends for 15 years and that the two had played golf together multiple times. Still, Boehner said he “never envisioned him” becoming president. Pressed further about Trump’s still-nascent administration, Boehner praised the president for his handling of international affairs and foreign policy, especially his aggressive stance toward the Islamic State. Boehner also tamped down talk of impeachment, calls for which have grown among House Democrats amid the swirling controversy of multiple investigations into the possibility of collusion between the Russian government and individuals with ties to Trump. “Talk of impeachment is the best way to rile up Trump supporters,” Boehner said. “Remember, impeachment is not a legal process; it’s a political process.” The former speaker said the president “did what he could” on legislation to repeal and replace Obamacare, perhaps the president’s most prominent campaign promise, but added Trump should have instead sought to repair his predecessor’s signature health care legislation. Talk of tax reform, another legislative priority for Trump and the Republican-controlled Congress, is just “happy talk,” Boehner said. “I was a little more optimistic about it early in the year; now my odds are 60/40.” The former speaker seemed content with his life as a retired politician and was quick to shoot down any talk of a future presidential bid. “I wake up every day, drink my morning coffee and say hallelujah, hallelujah, hallelujah,” Boehner said. “I don’t want to be president. I drink red wine. I smoke cigarettes. I golf. I cut my own grass. I iron my own clothes. And I’m not willing to give all that up to be president.”
Inside Alabama’s Strange Senate race
Luther Strange’s tenure in the Senate is not even four months old, the Republican having been handed his Alabama seat by a scandal-plagued governor who resigned on the cusp of impeachment by lawmakers in Montgomery. But Republicans in Washington are going all out to rescue Strange in his campaign this year, treating him like a beloved Senate veteran. The multimillion-dollar push in a state that Democrats have almost no chance of winning is intended to help Strange muscle through a crowded primary field that includes two bomb-throwing conservatives apt to cause Mitch McConnell some major headaches should they defeat the appointed senator. The Senate Leadership Fund, the powerful super PAC with close ties to the majority leader, has already reserved $2.65 million in TV airtime and is pledging up to $10 million in the conservative state. The National Republican Senatorial Committee has warned political consultants about working for Strange’s competitors. One of Strange’s challengers is already complaining that McConnell is stifling his fundraising. And influential GOP senators are sending not-so-subtle signals that they aren’t eager to have anyone but Strange return to the Senate after the Aug. 15 primary and a potential runoff in September. “I won’t mention any names,” said Senate Majority Whip John Cornyn (R-Texas), also a two-time NRSC chairman. “But we do need people who are interested in being constructive, because obviously we have a razor-thin margin of 52 [votes] and we can’t go backwards. We need to go forward.” The rally behind Strange, a former Tulane University basketball player whose 6-foot-9-inch profile is befitting of his “Big Luther” moniker, is in one respect unsurprising: The GOP Conference has a longstanding policy of defending its incumbents. That standard will play out in other states this cycle where Republicans are facing primary threats, such as Arizona and Mississippi. More:
Breaking Down Bell’s Budget
Last week, Mayor William Bell revealed his proposed operating budget for the fiscal year 2018. At $428 million, the budget is Birmingham’s largest ever, which appeared to be a point of pride for the mayor. “The city of Birmingham continues to show strong signs of economic growth, allowing us to present the largest budget ever in the city’s history,” Bell said in a statement. That growth, which Bell attributed to “aggressive business recruitment and retention,” meant that the budget increased by approximately $3.1 million from the previous year’s adopted budget of $424,858,869. A degree of contention almost always surrounds proposed budgets. Last year, Bell and the city council spent months negotiating the FY 2017 budget’s expenditures. That budget was eventually passed on August 30 — 61 days after the start of the fiscal year. This year, with both Bell and the city council up for re-election, that debate might be even more prolonged. A budget hearing, open to the public, will take place at city hall at 4:30 p.m. on May 31. The 2018 fiscal year begins on July 1. But what is in the proposed budget? How is the growth the mayor spoke of reflected in spending choices? And what are the points of contention that will likely influence not only the budget talks but the upcoming municipal elections? More:
What is wrong with Fairhope? Fast growing city’s politics filled with tension and division
Fairhope’s growing pains would be the envy of almost any city in Alabama. Yet the city’s political unraveling has been swift and fierce, as squabbles among city leaders have recently led to one administrator filing a simple assault complaint against the mayor. On the surface, a long ago wish of a utopian community that Fairhope’s founders envisioned more than 120 years ago, seems to have been realized. The relatively low-crime community is a popular traveler destination thanks to quaint shops, cozy cafes, popular festivals and historic neighborhoods an eclectic mix of authors and artists call home.
And the secret appeal seems to be out: The city, according to last week’s U.S. Census figures, is the fastest growing community in Alabama’s fastest growing county. Yet the message out of city hall for the past six months has been one of tense friction, shouting matches and disappointment. It’s also one of potential violence: Last week, the city’s human resources director filed a simple assault claim against the mayor for an alleged incident that took place at the end of last year. That incident, observers have noted, underscores the cracks in city government that have pestered Fairhope since November when Karin Wilson, a political novice and independent bookstore owner, was sworn in as the new mayor. Joining her were three new council members – Robert Brown, Jay Robinson and Jimmy Conyers. The three newcomers were largely voted in as part of a voter revolt against the former council, which endorsed a controversial apartment complex last year north of downtown Fairhope. “I don’t think anyone anticipated this to be happening from Day 1,” said Brown, referring to the squabbling that has highlighted most of the meetings since he took office. Said Conyers: “I think I’m a little surprised. I wasn’t anticipating as much tension. I kind of went into it, certainly, maybe a little naive. I figured that we would all work together well.” More:
Confederate ‘catechisms’ lay blame for Civil War on Lincoln, not slavery
Sometimes it seems like the impassioned people who want to preserve Confederate monuments across the South are reading a different history book than the rest of the nation. In fact, they are. A decades-old booklet called the “Confederate Catechism” lays out core beliefs of Southern heritage groups including the Sons of Confederate Veterans, which sells the book and has defended rebel monuments in New Orleans and elsewhere. Some of those monuments were erected by the United Daughters of the Confederacy, which has programs to educate children on its version of Southern history. Here is a look at Confederate catechisms — what they teach, how they developed and how they are used today:
WHAT WAS THE CIVIL WAR ABOUT? Certainly not slavery, according to the most popular version of “A Confederate Catechism,” which is promoted by the Sons of Confederate Veterans on its website.
“Both from the standpoint of the Constitution and sound statesmanship, it was not slavery, but the vindictive, intemperate anti-slavery movement that was at the bottom of all the troubles,” states the 12-page text, written in question-and-answer form. Such claims don’t square with much of today’s scholarship. To critics, they seem at odds with the secession documents issued by Southern states, some of which specifically mentioned slavery as a reason for the dispute that led to formation of the Confederate States of America in 1861. Mississippi’s declaration said the state’s position was “thoroughly identified with the institution of slavery.” More:
Las Vegas casino posts early point spread for 2017 Iron Bowl
At least one Las Vegas casino expects the 2017 Iron Bowl to be a one-score game. The South Point casino in Las Vegas has Alabama as a 3.5-point favorite at Auburn for this year’s meeting of the rivalry, which will be Nov. 25 at Jordan-Hare Stadium. The Iron Bowl was among 65 college football games the casino released early odds for on Monday. There is a $1,000 betting limit on each of the games listed by South Point casino, which lists Auburn as a 36-point favorite over Georgia Southern in the season opener on Sept. 2. Last year, South Point’s early Iron Bowl line had Alabama favored by 18 points, which ended up being exactly accurate in the 30-12 Crimson Tide win. Alabama has won the last three Iron Bowls, beating Auburn 30-12 at Bryant-Denny Stadium last season, 29-13 at Jordan-Hare Stadium in 2015 and 55-44 at Bryant-Denny Stadium in 2014.
How Stephen Miller Rode White Rage from Duke’s Campus to Trump’s West Wing
At the young age of 31, Stephen Miller has his own office in the West Wing and the President’s ear. He also has held a shocking worldview since he was a teenager. From his writings on the 2006 Duke lacrosse-team rape scandal, which gave the then–college junior national media exposure, to an alleged association with a white-nationalist advocate, William D. Cohan dives deep into Miller’s tumultuous past. See full article:
The Politics of Clan: The Adventures of Jared Kushner
Jared Kushner deserves a bit of sympathy. All his life he’s been serving his father or father-in-law. All his career he’s been thrust into roles he’s not ready for. His background has ill prepared him for national government. Now he is in a realm where his instincts seem to lead him astray and where there’s a chance he will end up in disgrace and possibly under indictment. The Kushner family drama begins in the Holocaust. In 1941, Rae Kushner was living in Belarus and was among the teenage girls selected to clean blood from the cobblestones after one of the Nazi mass executions. Rae and other family members tunneled out from the ghetto and joined an armed resistance camp. After the war they eventually made it to New Jersey, where her husband set up a successful construction business that flourished under their son. So far this is an inspiring story of family struggle and immigrant hustle. But as riches rained down on the family, so did betrayal. The feud between Jared’s father and uncle was over grabbing family money, and from the various accounts it’s hard to tell who betrayed the family most. We do know that Jared’s father, Charles, hired a prostitute to have sex with his brother-in-law so he could send a tape of the act to his sister, and ended up pleading guilty to 18 felony counts. “I believe that God and my parents in heaven forgive me for what I did, which was wrong,” Charles once told an interviewer, according to Politico. “I don’t believe God and my parents will ever forgive my brother and sister for instigating a criminal investigation and being cheerleaders for the government and putting their brother in jail because of jealousy, hatred and spite.” Jared’s brother was very young while all this happened and has since gone on to a fantastically successful independent career. But Jared interrupted his studies to take over the family business. He lived out his family-first devotion, his loyalty to kith and kin. More:
TRUMP’S GROWTH FANTASY — POLITICO’s Ben White: “President Donald Trump is betting much of his first term on a bold promise that tax cuts, revamped trade deals and deregulation will unleash the kind of sustained economic boom the United States hasn’t seen since the dot-com days of the late 1990s.
“He faces a big problem as he focuses his domestic agenda around that premise: Even if he does manage to push big tax cuts through Congress, many economists argue that the administration’s predictions — for nearly a decade of at least 3 percent economic growth — are wildly optimistic and unlikely to materialize.”
BRIEF BURST? — “Even many conservative economists argue that Trump’s plans could, at best, produce a brief burst of faster growth followed by a quick return to the reality of an economy slowed by an aging population and a lack of worker productivity growth.
“‘Trump’s plans alone are not going to get us to consistent 3 percent growth,’ said Kent Smetters, a former George W. Bush administration official and professor at the University of Pennsylvania’s Wharton School.
“He estimates Trump’s initiatives could develop a burst of growth that lasts a couple of years, followed by a return to the recent trend of about two percent growth—and perhaps lower due to the federal debt load being built up.”
THE WAY WE LIVE NOW — “The U.S. economy hasn’t grown at 3 percent or better for seven straight years in many decades. The Ronald Reagan-era boom of the 1980s saw just six years of that kind of growth, and that followed a recession. The Internet boom of the late 1990s produced just five years of growth at 3 percent or better.
“And the U.S. economy is very different now than it was before those two booms. The country is in the eighth year of an economic expansion — rather than coming off a recession — and now faces a Federal Reserve hiking interest rates. … And unlike before other big growth expansions, the labor market appears largely tapped out with joblessness at just 4.4 percent in April and productivity growth stalled.” Read more.
SPEAKING OF TAX CUTS — WSJ’s Richard Rubin: “The boldest ideas for changing the nation’s tax code are either dead or on political life support, as the Republican effort in Congress to reshape the tax system moves much more slowly than lawmakers and their allies in business had hoped. The clear winner, so far, is the status quo.
“Republicans, who control both chambers, are scouring the tax code, searching for ways to offset the deep rate cuts they desire. But their proposals for border adjustment—which would tax imports—and for ending the business interest deduction and making major changes to individual tax breaks for health and retirement have all hit resistance within the party” Read more.
TORY LEAD SHRINKS IN THE U.K. — Pantheon’s Samuel Tombs: “The Conservatives’ opinion poll rating has fallen dramatically over the last 10 days or so, pushing sterling down and forcing investors to confront the possibility that Theresa May might not increase her majority much from the current paltry 17 MPs.
“The average of the last 10 opinion polls puts support for the Conservatives at 45%, only 10% ahead of Labour. What’s more, the lead has narrowed quickly, with one poll last Friday putting the Tories only 5% ahead of Labour.
“The Tories had a 6.5% lead over Labour in 2015, so if the latest polls are right, its now conceivable that the Tories could lose their majority … [T]he turning point appears to have been the launch of the Tories’ manifesto, which put forward unpopular proposals to fund social care”
MERKEL GOES BOLD — FT’s Guy Chazan: “Angela Merkel is not one for bold statements that ricochet round the world. Her speeches tend to be bloodless, understated and forgettable. But that all changed on Sunday. At a campaign event in a sweaty Munich beer tent Germany’s chancellor suggested that the US was no longer a reliable partner. Europe should pay more attention to its own interests ‘and really take our fate into our hands’.
“Many, even in her own CDU party, were stunned. ‘For Merkel, that was an unusually strong statement,’ said one official. ‘Trump’s only been president for four months.’ Parsed by journalists, commentators and politicians across the world, the speech seemed to herald a sea change in transatlantic relations — an acknowledgement that with Donald Trump, the US-European alliance would never be the same again” Read more.
DRIVING THE DAY — Personal income and spending at 8:30 a.m. both expected to rise 0.4 percent … Case-Shiller Home Prices at 9:30 a.m. expected to rise 0.8 percent … Consumer confidence at 10:00 a.m. expected to dip to 119.9 from 120.3 … White House press secretary Sean Spicer is back before the podium this afternoon at 2:00 p.m.
ASIA DIPS — Bloomberg: “Asian equities fell in thin trading and the euro slipped after Mario Draghi’s dovish message to the European Parliament and as investors assessed the path for higher U.S. borrowing costs.
“Stocks in Japan retreated as the yen strengthened. Hong Kong is on holiday Tuesday and markets in China are shut for a second day after the U.K. and U.S. were closed Monday, depressing volumes and limiting price movements. The euro dropped for a fourth straight day … The key challenge for investors remains gauging the ability of the world’s economy to withstand rising borrowing costs” Read more.
HOUSING FINANCE DEAL IN SIGHT? — POLITICO’s Zachary Warmbrodt: “With momentum building behind a potential overhaul of the housing finance system, some key senators are working to reach a deal before the end of this year. Senate Banking Chairman Mike Crapo is aiming to have a bill ready to go in the coming months and is planning to hold a hearing after Congress returns from the Memorial Day recess.
“The Idaho Republican co-authored a 2014 bill that was the Senate’s last major attempt to address the fate of mortgage giants Fannie Mae and Freddie Mac … At the same time, Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), who were important players in driving the legislation four years ago, are holding talks with committee members as they try to advance a new deal” Read more.
COHN ON COAL — Via ABC: “The president’s chief economic adviser is casting doubt on the future of U.S. coal, saying it ‘doesn’t really make that much sense anymore as a feedstock,’ directly contradicting President Donald Trump’s repeated promises to revive the struggling coal industry.
“Briefing reporters Thursday night on Air Force One, Gary Cohn singled out natural gas as ‘such a cleaner fuel.’ By exporting more natural gas and investing in wind and solar energy, the U.S. ‘can be a manufacturing powerhouse and still be environmentally friendly,’ Cohn said. Cohn’s comments were at odds with his boss, who campaigned as coal’s champion” Read more.
GDP REWIND — Hamilton Place Strategies cheat sheet on Friday’s increase in Q1 GDP to 1.2 percent from 0.7 percent.
TIGHT MARKET MEANS JOBS FOR EX-CONS — Bloomberg’s Steve Matthews: “Shea Rochester, who once spent a month in jail on an assault charge that was later dropped, is now wanted in a different way. After a few months of job hunting, the 32-year-old recently got two offers in the same week. He accepted a $14.48-an-hour position at a Georgia factory that makes shortening and cooking oil.
“As U.S. unemployment falls to the lowest level in a decade … people with blemishes on their resumes are getting second looks by employers trying to fill vacancies that currently stand at a near-record 5.7 million. … While the government doesn’t track jobs for those with arrest records, people are increasingly getting hired”
NEW NAMES AT THE SEC — NYT’s Matthew Goldstein and Ben Protess: “The nation’s top securities regulator is going to have a decidedly Sullivan & Cromwell look to it. Jay Clayton, who left Sullivan & Cromwell, the prominent New York law firm, to become the chairman of the Securities and Exchange Commission, is expected to tap his former colleague Steven R. Peikin to serve as the commission’s co-director of enforcement …
“Mr. Clayton is expected to also name Stephanie Avakian, the agency’s acting enforcement director and a former white-collar defense lawyer, as co-director with Mr. Peikin … The hiring decisions are not final but could be announced as soon as this week. …
“The personnel moves — two former defense lawyers taking over a top Wall Street oversight role — may reinforce a perception from Democrats and consumer groups that a certain coziness exists between the defense bar and the regulators they face off against”
BANK REGS KILLING BANKS? — ABA’s Rob Nichols in the L.A. Times: “In 1994, nearly 500 banks were headquartered in California. Today, there are fewer than 180. By the end of the year, if current trends hold, Californians will have only one-third the number of banks to choose from for their mortgage, small business and personal savings needs than they did just a couple of decades ago.
“There are a few reasons for this disturbing trend, which is happening across the country. But the most important one — the reason I hear more than any other from bankers who decide to merge, sell or close their institution — is the increasing federal regulatory burden.” Read more.
CREDIT SCORES HIT RECORD HIGH — WSJ’s AnnaMaria Andriotis: “Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low—a potential boon for lending and economic activity. Consumers’ improving fortunes reflect falling unemployment and continued, if lackluster, economic growth.
“An added benefit: The passage of time since the recession and housing meltdown are helping household balance sheets. In ever-growing numbers, the worst personal financial setbacks, namely foreclosures and bankruptcies, are falling off Americans’ credit reports. … The average credit score nationwide hit 700 in April, up one point from last fall, according to new data from Fair Isaac Corp. That is the highest since at least 2005” Read more.
IMMIGRANTS’ IMPACT ON THE ECONOY — NYT’s Patricia Cohen from Storm Lake, Iowa: “The forces that have helped transform this snug lakeside town in northwestern Iowa … have created a complex swirl of economic successes and hardships, optimism and unease. Fierce global competition, agricultural automation and plant closures have left many rural towns struggling for survival.
“Yet Storm Lake, hustled along by the relentless drive of manufacturers to cut labor costs and by the town’s grit to survive, is still growing. However clumsily at times, this four-square-mile patch has absorbed successive waves of immigrants and refugees — from Asia, from Mexico and Central America, and from Africa.” Read more.
BANKS COOL OFF ON AUTO LOANS — FT’s Ben McLannahan: “Big banks are throttling back from the $1.2tn US car loan market, fearing that consumers have taken on more debt than they can handle. Lenders piled into the sector in the years after the financial crisis, as low defaults and an improving economy encouraged them to focus on a market that performed relatively well as mortgages soured. Total loans across the industry rose to $1.17tn at the end of the first quarter, according to the New York Federal Reserve, up almost 70 per cent from a trough in 2010.
“But data released last week by the [FDIC] showed the first sequential drop in car loans outstanding at commercial banks in at least six years. The total slipped $1.6bn to $440bn from the fourth quarter of last year to the first of this, suggesting that banks — wary of repeating the mistakes of the subprime mortgage crisis — have been spooked by rising delinquencies and the threat of litigation” Read more.
INVESTIGATORS WANT ANSWERS FROM KUSHNER — NYT’s Matthew Rosenberg, Mark Mazzetti and Maggie Haberman: “Jared Kushner, the president’s son-in-law and senior adviser, was looking for a direct line to President Vladimir V. Putin of Russia — a search that in mid-December found him in a room with a Russian banker whose financial institution was deeply intertwined with Russian intelligence, and remains under sanction by the United States.
“Federal and congressional investigators are now examining what exactly Mr. Kushner and the Russian banker, Sergey N. Gorkov, wanted from each other. The banker is a close associate of Mr. Putin, but he has not been known to play a diplomatic role for the Russian leader. That has raised questions about why he was meeting with Mr. Kushner at a crucial moment in the presidential transition” Read more.
Nada. Zip. Zilch. Zero. Members are enjoying their first day of recess – particularly welcome for the workaholics in the Senate who were busy for six straight weeks processing nominations.
Defense, intelligence officials caution White House on terrorist designation for Iran’s Revolutionary Guard
Senior defense and intelligence officials have cautioned the White House that a proposal to designate Iran’s Revolutionary Guard Corps as a foreign terrorist organization could endanger U.S. troops in Iraq and the overall fight against the Islamic State, and would be an unprecedented use of a law that was not designed to sanction government institutions. Defense and intelligence concerns have been expressed at the highest levels over the past several days, as the White House was preparing to roll out an executive order dealing with both Iran’s Islamic Revolutionary Guard Corps and the Muslim Brotherhood, according to administration officials who spoke on the condition of anonymity because they were not authorized to discuss the sensitive matter. The order would direct the State Department — in charge of the designation process — to move toward declaring them terrorist organizations. More:
Senators move to limit Trump on Russia sanctions
A bipartisan group of senators is moving to check President Trump on Russia by bolstering congressional oversight before he can lift sanctions. Sens. Lindsey Graham (R-S.C.), Ben Cardin (D-Md.), Marco Rubio (R-Fla.), Sherrod Brown (D-Ohio), John McCain (R-Ariz.) and Claire McCaskill (D-Mo.) introduced legislation Wednesday setting up a period of congressional oversight before Trump could roll back financial penalties. The legislation, known as the Russia Sanctions Review Act, would require Trump to notify Congress before he lifts sanctions tied to the invasion of Ukraine or Russia’s meddling in the White House race. “To provide relief at this time would send the wrong signal to Russia and our allies who face Russian oppression. Sanctions relief must be earned, not given,” said Graham, a frequent GOP critic of the president. Lawmakers would have 120 days to pass a joint resolution of disapproval blocking Trump from lifting the sanctions. Trump also would not be able to lift sanctions while Congress was reviewing the proposal. Cardin told reporters on Wednesday that the legislation wasn’t meant to punish Trump, but would help bolster congressional input and understanding of Trump’s policy. “It’s not an attack against President Trump,” Cardin, the top Democrat on the Foreign Relations Committee, said. “This is basically to reestablish our role.” He compared the legislation to a 2015 bill — which passed the Senate with near unanimous support — to allow lawmakers to review and potentially block the Iran nuclear deal.
McCain added that lifting Russia sanctions would send the “wrong message” to Russian President Vladimir Putin. More:
Appeals Court Rejects Immigrants’ Right to a Lawyer in Expedited Cases
Immigrants who are caught entering the U.S. illegally have no right to legal representation, a federal appeals court in San Francisco ruled on Tuesday. The Ninth U.S. Circuit Court of Appeals upheld the deportation of a Mexican immigrant who was arrested while crossing into the U.S. in 2012 and returned to his country the following day. The ruling, from a three-judge panel, came hours before a different Ninth Circuit panel was set to consider an executive order by President Donald Trump that temporary suspended travel from seven countries and halted the admission of refugees. The ruling Tuesday dealt with whether immigrants caught entering the U.S. illegally have due process rights to legal counsel under the Fifth Amendment, an issue separate from those raised in the executive-order challenge. Under a 1996 federal law, Customs and Border Protection officers can use a process called “expedited removal” to swiftly deport immigrants who are caught within 100 miles of the border without valid entry documents and who have been in the U.S. fewer than 14 days. Immigrants subject to expedited removal receive no hearing, see no judge and have no right to appeal. Nearly half of all removals from the U.S. follow this process, according to the Department of Homeland Security. Rufino Peralta-Sanchez, who was caught by U.S. Border Patrol agents a mile inside the U.S. border, had argued for a right to hire a lawyer to assist him during the removal process. Judge Jay Bybee, writing for a 2-1 majority, said allowing lawyers to take part in expedited removals would defeat their purpose, “exponentially increasing the cost to the government as the government must detain the alien, pay for the government’s own representation, pay for the creation of a longer record, and pay for the increased time the immigration officer must spend adjudicating such case.” The Trump administration is considering expanding eligibility for expedited removal to include immigrants who have been in the U.S. longer and are arrested farther from the U.S. border. More:
Trump on Immigration Power: I Can Do Whatever I Want
President Donald Trump argued on Wednesday that his power to limit immigration shouldn’t be challenged in courts, reading aloud in a speech from a U.S. statute giving the president authority to stop the entry of “any class” of foreigner. “You can suspend, you can put restrictions, you can do whatever you want,” Trump told a conference of police chiefs and sheriffs in Washington, after reading the law. “It just can’t be written any plainer or better.” A panel of three federal appeals court judges heard arguments Tuesday evening on whether to reinstate Trump’s temporary ban on immigration from seven predominantly Muslim nations, which was halted by a judge in Seattle. The judges on the 9th U.S. Circuit Court of Appeals in San Francisco gave no clear sense of how they would rule. A decision may come this week. But Trump made clear he is frustrated that the issue is being litigated at all, and he alluded to the 9th Circuit’s reputation for liberal leanings. “Now we’re in an area that, let’s just say they’re interpreting things differently than probably 100 percent of the people in this room,” he said. More:
Worries Grow Over Euro’s Fate as Debts Smolder in Italy and Greece
Even as global stock markets climb, worries are building among investors that long-simmering debt troubles in Greece and Italy will put additional strain on the euro. Over the past year, aggressive bond buying by the European Central Bank and encouraging signs of economic growth across Europe have helped the eurozone overcome a series of political jolts, including Britain electing to quit the European Union and Italian voters rejecting the proposals of a reform-minded government. Yet with the central bank expected to eventually unwind its purchases of government bonds and other assets, investors are increasingly becoming concerned about how Europe — and Germany, in particular — can cope with escalating debt pressures in Italy and Greece. The result has been a sell-off of European government bonds as investment funds reassess the risks of holding such securities. In Italy, for instance, some hedge funds are making direct bets that the prices of Italian bonds will collapse. The yield on Italy’s benchmark 10-year note — which moves in the opposite direction of its price — has doubled to 2.3 percent since late last fall. The yield on the equivalent Greek note has jumped to nearly 8 percent from 6.7 percent at the beginning of the year. Mario Draghi, the European Central Bank’s president, promised in summer 2012 to do whatever it took to save the euro, but the debt burdens of Italy and Greece have become progressively worse amid the stagnation of their economies. More:
CIA Memo: Designating Muslim Brotherhood Could ‘Fuel Extremism’
rump administration officials pushing to designate the Muslim Brotherhood as a foreign terrorist organization face at least one significant obstacle: analysts at the Central Intelligence Agency. CIA experts have warned that so labeling the decades-old Islamist group “may fuel extremism” and damage relations with America’s allies, according to a summary of a finished intelligence report for the intelligence community and policymakers that was shared with POLITICO by a U.S. official. The document, published internally on Jan. 31, notes that the Brotherhood—which boasts millions of followers around the Arab world—has “rejected violence as a matter of official policy and opposed al-Qa’ida and ISIS.” It acknowledges that “a minority of MB [Muslim Brotherhood] members have engaged in violence, most often in response to harsh regime repression, perceived foreign occupation, or civil conflicts.” Noting that there are branches of the group in countries such as Jordan, Kuwait, Morocco and Tunisia, it cautions that some of America’s allies in the region “probably worry that such a step could destabilize their internal politics, feed extremist narratives, and anger Muslims worldwide.” “MB groups enjoy widespread support across the Near East-North Africa region and many Arabs and Muslims worldwide would view an MB designation as an affront to their core religious and societal values,” the document continues. “Moreover, a US designation would probably weaken MB leaders’ arguments against violence and provide ISIS and al-Qa’ida additional grist for propaganda to win followers and support, particularly for attacks against US interests.” The CIA declined to comment, and the White House did not respond to a request for comment. But the document threatens to pit the agency against a president who has dismissed its intelligence assessments, and angered many in the intelligence community when he appeared before the agency’s Memorial Wall and exaggerated the size of the crowd at his inaugural address. More:
Venezuela may have given passports to people with ties to terrorism
Toledo, Spain (CNN)The stunning postcard-perfect vista surrounding Misael Lopez in this town about one hour from Madrid belies his constant anxiety, even fear. That’s because the former legal adviser to the Venezuelan Embassy in Iraq is revealing secrets he says his government doesn’t want disclosed. “I’m concerned about my safety and my family’s safety everywhere I go,” Lopez said as he walked the cobble-stoned streets of Toledo. Lopez, 41, says he reported what he says was a scheme to sell passports and visas for thousands of dollars out of the embassy and repeatedly turned down offers to get a cut of the money. But it was the response from his government — which has denied his allegations — that surprised him the most. CNN and CNN en Español teamed up in a year-long joint investigation that uncovered serious irregularities in the issuing of Venezuelan passports and visas, including allegations that passports were given to people with ties to terrorism. The investigation involved reviewing thousands of documents, and conducting interviews in the U.S., Spain, Venezuela and the United Kingdom. One confidential intelligence document obtained by CNN links Venezuela’s new Vice President Tareck El Aissami to 173 Venezuelan passports and ID’s that were issued to individuals from the Middle East, including people connected to the terrorist group Hezbollah. More:
Pentagon leader assumes new role: Turning down the temperature on Trump
As President Trump’s new Pentagon chief, Jim Mattis has a long list of tasks ahead, including devising a more aggressive campaign to combat the Islamic State and restoring military readiness after years of budget cuts. But a few weeks into his tenure, the retired general’s most visible role has been of a different sort: soothing Americans and allies unnerved by the president and some of his top advisers. Mattis, wrapping up a visit to Japan and South Korean last week, carried a message of constancy and restraint on many of the foreign policy issues whose fate has generated anxiety since Trump’s election. In Seoul, Mattis told South Korean leaders that the United States will maintain a tough stance on North Korea’s nuclear and missile programs, predicting a lasting partnership despite Trump’s repeated questioning of the two countries’ military alliance. In Tokyo, he said the United States will stick to a mutual defense treaty, allaying Japanese officials’ concerns about whether the United States will continue its backing in a territorial dispute with China. He also acted to stanch speculation that the United States, as White House officials suggested, might act precipitously against perceived threats from China and Iran, saying that military steps were not required. This week, Mattis spoke with Mexican defense leaders, highlighting cooperation in the wake of Trump’s high-profile feud with President Enrqiue Peña Nieto. More:
Laughing All the Way to Autocracy
The crisis of democracy is no laughing matter. While some dictatorships like Myanmar are finally opening up, some of the world’s biggest powers appear to be shifting toward authoritarianism. Even the United States, home to a vibrant democracy and civil society, is in the headlines because of the autocratic rhetoric of its mercurial president. But what can we do to protect open societies from being drawn into the maelstrom of authoritarianism and closed ones from becoming more dictatorial? In a recent interview with PBS, Mel Brooks, one of America’s oldest and greatest comedians and creator of the all-time classic movie The Producers, offered this opinion: “The great thing about dictators is, you have to know, if you get on a soapbox with them, you’re gonna lose, because they have a way of spellbinding with their oratory. But if you can reduce them to ridicule, then you’re way ahead.” Brooks believes that political humor turns the table on dictators, placing them in a demeaning position by subjecting them to ridicule. This has a subversive effect that undermines their authority, and, therefore, strips them of their power. That gives comedians a silver bullet against authoritarians: jokes and laughter. It’s an intriguing thought. The only problem is that it isn’t true. o see why Brooks’s argument doesn’t hold up, we can turn to Nazi Germany. There is an overwhelming amount of evidence suggesting that political humor flourished under Adolf Hitler’s rule; in fact, quips about the dictator and his henchmen were so widespread that they inspired collections of “whispered jokes” published after the war. The editors of these books were convinced that people who had poked fun at the Nazis were part of a tacit resistance. But in researching my own book Dead Funny: Telling Jokes in Hitler’s Germany, I discovered that, in fact, the opposite was true. Berliners particularly loved jokes about their self-proclaimed Führer. “Absolutely everyone was telling them,” Carl Schulz, a wartime inhabitant of the German capital, told me in an interview. Yet the streets of Berlin were also the site of some of the war’s most vicious fighting. In some parts of the city, the Red Army had to literally fight house by house. If political humor helped undermine the morale of the Berliners, the effect was minuscule. Compared with the fear wielded by the SS and Gestapo, comedy dwindled into nothingness. In fact, much of the humor — even the ostensibly satirical — may have contributed to keeping the regime in power. Many of the jokes under the Third Reich were toothless. A typical example targeted Hermann Göring, Hitler’s portly second in charge: Hermann Göring had his medals remodeled in rubber so he won’t have to take them off in the bathtub. More:
Evangelical leaders buy ad denouncing Trump refugee ban
A group of 100 evangelical leaders will call on President Trump in a full-page newspaper ad to support refugees in the wake of his order barring refugees and people from seven predominately Muslim countries from entering the U.S. The ad, scheduled to run in The Washington Post, is signed by 100 evangelical pastors and authors, including at least one from all 50 states, CNN reported. It urges the president and Vice President Mike Pence to support refugees and expresses concern about the impacts of the president’s executive order. “As Christian pastors and leaders, we are deeply concerned by the recently announced moratorium on refugee resettlement,” the evangelicals’ advertisement says. “As Christians, we have a historic call expressed over two thousand years, to serve the suffering. We cannot abandon this call now.” The evangelical leaders acknowledge the world is dangerous, adding that they “affirm the crucial role of government in protecting us from harm and in setting in terms on refugee admissions.” More:
Judge, Citing Harm to Customers, Blocks $48 Billion Anthem-Cigna Merger
A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining. The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judgeblocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds.
Judge Jackson wrote in her order that she found the Justice Department’s arguments against the deal persuasive, and that putting Anthem and Cigna together would harm customers. “The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects,” the judge wrote. “It will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market.” More:
Supreme Court nominee Gorsuch says Trump’s attacks on judiciary are ‘demoralizing’
President Trump’s escalating attacks on the judicial branch drew denunciation Wednesday from his Supreme Court nominee, Neil Gorsuch, who told lawmakers that the attacks were “demoralizing” and “disheartening” to the independence of the federal courts. “I told him how abhorrent Donald Trump’s invective and insults are towards the judiciary. And he said to me that he found them ‘disheartening’ and ‘demoralizing’ – his words,” Sen. Richard Blumenthal (D- Conn.) said in an interview. Gorsuch “stated very emotionally and strongly his belief in his fellow judges’ integrity and the principle of judicial independence,” he added. “And I made clear to him that that belief requires him to be stronger and more explicit, more public in his views.” Gorsuch’s comments to Blumenthal were confirmed by Ron Bonjean, a member of the judge’s group of aides tasked with helping him navigate the confirmation process.
Trump has been on a days-long crusade against the judicial branch after a Seattle judge halted his controversial executive order temporarily halting the U.S. refugee program and barring entry from seven predominantly Muslim countries. A three-judge panel in the 9th Circuit Court of Appeals is currently deliberating on whether Trump’s executive order should be allowed to continue. More:
Jeff Sessions Confirmed as Attorney General, Capping Bitter Battle
WASHINGTON — Senator Jeff Sessions was confirmed on Wednesday as President Trump’s attorney general, capping a bitter and racially charged nomination battle that crested with the procedural silencing of a leading Democrat, Senator Elizabeth Warren. Mr. Sessions, an Alabama Republican, survived a near-party-line vote, 52 to 47, in the latest sign of the extreme partisanship at play as Mr. Trump strains to install his cabinet. No Republicans broke ranks in their support of a colleague who will become the nation’s top law enforcement official after two decades in the Senate. But the confirmation process — ferocious even by the standards of moldering decorum that have defined the body’s recent years — laid bare the Senate’s deep divisions at the outset of the Trump presidency. At the same time, the treatment of Ms. Warren, who was forced to stop speaking late Tuesday after criticizing Mr. Sessions from the Senate floor, rekindled the gender-infused politics that animated the presidential election and the women’s march protesting Mr. Trump the day after his inauguration last month. Mr. Sessions cast his final vote as a senator to note that he was present for Wednesday’s tally. His confirmation was met by applause from his colleagues, including a few Democrats, on the Senate floor. More:
Alabama Attorney General Luther Strange Named to Sessions’ Former Senate Seat
Montgomery, Ala. (AP) — Alabama’s governor on Thursday named state Attorney General Luther Strange to the U.S. Senate seat left empty by Jeff Sessions. Strange will replace Sessions, whose selection as U.S. attorney general by President Donald Trump was confirmed Wednesday. Strange, a 63-year-old lawyer and former Washington lobbyist, has been the state’s attorney general since 2011. In Strange, Bentley chose a well-connected Republican who last year announced intentions to run for the coveted Senate seat regardless of whether he got the interim appointment. His selection caps two months of jockeying and political guessing games over who would get the nod from Gov. Robert Bentley.
“Alabama has surely been well represented by Senator Sessions, and I am confident Senator Strange will serve as a fine representative for our people. His leadership on a national level, service as a statewide elected official and long record of taking on tough federal issues are the very qualities that will make him a strong conservative Senator for Alabama,” Bentley said in a statement. Strange will serve until an election is held to fill the seat for the remainder of Sessions’ term, which ends in January of 2020. Bentley has said that election will be held in the general election in 2018. Strange said he was “greatly honored and humbled to accept the appointment.” More:
The Curious Case of ‘Big Luther’ Strange
If you thought Jeff Sessions’ path to become Donald Trump’s Attorney General was dramatic, you haven’t been paying attention to politics in Sessions’ home state of Alabama, where Republican Gov. Robert Bentley is facing impeachment charges related to a sex scandal, the House Speaker just went to jail for corruption, and a former Democratic governor was released federal prison yesterday on different corruption changes. Rising mostly above the chaos has been Attorney General Luther Strange, a two-term Republican who, at 6’9, is known to most in the state as “Big Luther.” Strange’s name was included on a list of six last week whom the governor said he is considering to serve the last two years of Sessions’ unexpired term. Among the six, Strange is reportedly the governor’s favorite for the job and Strange has already announced that he’ll run for the Senate seat in 2018 no matter who the governor picks this year. The former Eagle Scout and Tulane basketball standout is well-known in Alabama legal circles. He was a partner at the Birmingham law firm of Bradley Arant Boult Cummings, the sort of white-shoe Southern firm you read about in John Grisham novels, and started his own firm after that. His campaigns for Attorney General in 2010 and 2014 focused on fighting public corruption in a state mired in it. His tenure has mostly lived up to the promises. “Luther is very well respected and very well liked,” said a Birmingham attorney who has worked with Strange. “He’s a by-the-book kind of guy.” Strange would be a natural pick for the job under nearly any circumstances, but Strange and Gov. Bentley aren’t operating under any circumstances. More:
Is the Anti-Trump ‘Resistance’ the New Tea Party?
Bob Bennett didn’t think the new president was such a bad guy. To be sure, Bennett, a Republican senator from Utah, had a lot of policy differences with Barack Obama, the Democrat who had just won the 2008 election in a landslide. But just because Bennett was a conservative and the president was a liberal didn’t mean they couldn’t find common ground, or share an interest in governing the country he believed they both loved. Bennett had always worked across the aisle, and he didn’t see why that should change.
He was as surprised as anyone by the uprising that followed—and cost him his job. The tea party, a mass movement that hadn’t even existed two years earlier, had rallied activists and dealt him a humiliating defeat from within his own party. Today, a new movement—loosely dubbed “the resistance”—has suddenly arisen in visceral reaction to Donald Trump’s election as president, with thousands taking to the streets. For those who remember the tea party, it feels like deja vu. The parallels are striking: a massive grassroots movement, many of its members new to activism, that feeds primarily off fear and reaction. Misunderstood by the media and both parties, it wreaks havoc on its ostensible allies, even as it reenergizes their moribund political prospects; they can ride the wave, but they cannot control it, and they are often at the mercy of its most unreasonable fringe. There’s no telling, in these early days, where the anti-Trump resistance will lead. But looking back at the tea party may hold a clue to what lies ahead, for both the president and his opponents. It burned hot and, in a few years, burned out, without leaving much in the way of lasting institutions—but not before it had reordered Washington and changed the DNA of the political party in its sights. More:
Trump sued over ‘1-in-2-out’ regulations order
Liberal groups are challenging President Trump’s order requiring federal agencies to repeal two regulations for every new rule they issue. The National Resources Defense Council (NRDC), Communications Workers of America, and Public Citizens sued Trump on Wednesday in the United States District Court for the District of Columbia to block the so-called “1-in-2-out” executive order.
The left-leading groups argue Trump’s Jan. 30 order exceeds his authority under the Constitution and will block important health, safety and environmental protections without taking the benefits of those rules into account. Chris Shelton, president of the Communications Workers of America, said workers shouldn’t be required to “trade off one set of job, health and safety protections in order to get protection from another equally dangerous condition.” “This order means that the asbestos workplace standard, for example, could be discarded in order to adopt safeguards for nurses from infectious diseases in their workplaces,” Shelton said in a statement. More:
U.S. Labor Dept prevails in legal challenge to ‘fiduciary’ rule
A U.S. District Court judge on Wednesday upheld the Labor Department’s controversial “fiduciary” rule governing retirement investment advice, in a stunning defeat for the business and financial services groups that had sought to overturn it. In a stinging 81-page ruling, Chief Judge Barbara Lynn for the U.S. District Court for the Northern District of Texas rejected all of the business groups’ arguments, saying the Labor Department did not exceed its legal authority and conducted a proper economic analysis to justify the rule. “The court finds the DOL adequately weighed the monetary and non-monetary costs on the industry of complying with the rules, against the benefits to consumers,” Lynn wrote. “In doing so, the DOL conducted a reasonable cost-benefit analysis.” The Labor Department’s “fiduciary” rule requires brokers to put their clients’ best interests first when advising them about individual retirement accounts or 401(k) retirement plans. It is championed by consumer advocates and retirement non-profit groups, but has been staunchly opposed by the financial services sector, which argues it will make retirement advice too costly and harm lower-income retirees in particular. The long list of groups that sued the Labor Department include the U.S. Chamber of Commerce, the Financial Services Institute, the Financial Services Roundtable, the Insured Retirement Institute and the Securities Industry and Financial Markets Association (SIFMA), among others. The ruling in the Labor Department’s favor came just a few hours after the Justice Department had petitioned the court to stay issuing a ruling because of a Feb. 3 White House request to review the rule to determine if it should be revised or scrapped. Lynn, who was appointed to the bench by President Bill Clinton, denied that request shortly after her ruling was filed.
The judge’s ruling marks a severe reproach to President Donald Trump, who just last week issued a memorandum that directed the Labor Department to go back and conduct a legal and economic analysis of the rule. More:
The Next American Farm Bust Is Upon Us
RANSOM, Kan.—The Farm Belt is hurtling toward a milestone: Soon there will be fewer than two million farms in America for the first time since pioneers moved westward after the Louisiana Purchase.
Across the heartland, a multiyear slump in prices for corn, wheat and other farm commodities brought on by a glut of grain world-wide is pushing many farmers further into debt. Some are shutting down, raising concerns that the next few years could bring the biggest wave of farm closures since the 1980s.
The U.S. share of the global grain market is less than half what it was in the 1970s. American farmers’ incomes will drop 9% in 2017, the Agriculture Department estimates, extending the steepest slide since the Great Depression into a fourth year. “You keep pinching and pinching and pretty soon there’s nothing left to pinch,” said Craig Scott, a fifth-generation farmer in this Western Kansas town. From his father’s porch, the 56-year-old can see the windswept spot where his great-grandparents’ sod house stood in 1902 when they planted the first of the 1,200 acres on which his family farms alfalfa, sorghum and wheat today. Even after harvesting one of their best wheat crops ever last year, thanks to plentiful rain and a mild winter, Mr. Scott isn’t sure how long they can afford to keep farming that ground. Costs for seeds, fertilizer and equipment climbed so high and grain prices dropped so low that he still lost more than $120 an acre. Afraid to come up short again, Mr. Scott decided last fall not to plant 170 acres of winter wheat, close to a third of the usual amount. U.S. farmers sowed the fewest acres of winter wheat this season in more than a century.
Trump blasts Nordstrom for dropping Ivanka’s clothing line
President Donald Trump blasted luxury department store line Nordstrom for dropping his daughter Ivanka Trump’s label. “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!” Trump tweeted Wednesday morning. Nordstrom announced Feb. 5 that they would stop carrying Ivanka Trump’s label due to its performance. “We’ve said all along we make buying decisions based on performance,” Nordstrom said in a statement to The Associated Press on Feb 3. “We’ve got thousands of brands— more than 2,000 offered on the site alone. Reviewing their merit and making edits is part of the regular rhythm of our business.” Nordstrom had issued an internal statement in support of immigrants following Trump’s executive order temporarily barring immigrants from seven Muslim-majority countries just three days before dropping Ivanka Trump’s line. The move also comes amid a #GrabYourWallet hashtag calling for a boycott of all Trump products.
Executive branch employees are forbidden from using their positions to promote any corporation, although the president is technically exempt. However, former Obama administration ethics czar Norm Eisen said Nordstrom should consider suing under the California Unfair Competition Law, which forbids “any unfair” business act, Eisen said. He also offered his help. Pennsylvania Senator Bob Casey also replied to the tweet, by “CC”ing the Office of Government Ethics. Senator Casey “feels it is unethical and inappropriate for the President to lash out at a private company for refusing to enrich his family,” Casey’s press secretary Jacklin Rhoads said in an emailed statement. Nordstrom’s stock took a brief fall following the Tweet, from 42.69 at 10:50 to 42.50 at 10:55. However, it has since risen to $42.90 as of 11:50 a.m. More:
Nordstrom’s shares up nearly 5 percent after clash with Donald Trump
President Trump went to war Wednesday with Nordstrom, the department store, over its decision to stop carrying his daughter Ivanka’s line of branded apparel. And it appears Nordstrom won, with the company’s stock up almost 5 percent on the day. The saga began way back on February 2, when a spokesperson for Nordstrom rather blandly confirmed to Racked that Ivanka’s clothing was disappearing from stores: “Based on the brand’s performance, we’ve decided not to buy it for this season.”
The president ignored this issue for almost an entire week. Then Wednesday morning, according to the White House’s official schedule, he received his daily intelligence briefing at 10:30 am. There clearly wasn’t much urgent national security business to transact, because by 10:51 am he was focused on the threat to his daughter’s brand licensing business. Shortly thereafter, your hard-earned tax dollars went to work pursuing the first family’s vendetta against a retailer that scorned them, with the staff-run @POTUS account retweeting the president and White House press secretary Sean Spicer continuing the charge at the daily press briefing. Nordstrom’s move, according to Spicer, was not a business decision based on the sales of Ivanka’s line at all. It was, rather, a “direct attack” on Trump administration policy in a manner that is “not acceptable.” Trump has previously depressed the stock prices of private companies by tweeting negative things about them in a manner that perhaps suggested forthcoming retaliation on the part of the federal government. But most companies have found their share prices bouncing back rapidly. In Nordstrom’s case, the dip lasted less than an hour, and over the course of the day, shares surged. More:
Anti-Trump Employees Put Their Bosses in the Hot Seat
Only hours after IBM Chief Executive Officer Ginni Rometty congratulated Donald Trump on his election victory and offered to work with him on economic goals, IBM software engineer Daniel Hanley drafted a petition. The document urged Rometty to “do what’s right for IBMers,” including “respect our right to refuse to participate in any government contracts that violate constitutional and civil liberties.” The petition now has more than 1,600 signatures. Since Trump took charge at the White House, executives at companies including the Cleveland Clinic, Facebook, and Uber have come under internal pressure to answer for not just their policies but their politics. Employees like Hanley are pushing top bosses to sever their personal or professional ties to the administration, registering their dissent with protests, walkouts, and open letters. A handful have even resigned. Companies have been the targets of political protests before—think defense contractors during the Vietnam War, or Coca-Cola during apartheid—but employees have typically stayed out of it. “There’s been nothing this substantial by employees,” said Roger Gottlieb, a Worcester Polytechnic Institute professor who has written about protest movements. “It may be a reflection of the new economy where employees feel less allegiance and entitled to more of a say.” The new corporate dissenters don’t necessarily go quietly, either. After Oracle Co-Chief Executive Safra Catz joined Trump’s transition team, George Polisner, 57, quit his post as a manager of cloud operations—and detailed his reasons for doing so in a post on LinkedIn that’s now been viewed more than 350,000 times. Elizabeth Holli Wood, 31, has been a vocal critic of IBM after quitting her job there in protest. Even job candidates are drawing lines in the sand. A 39-year-old lawyer canceled an interview at Morgan, Lewis & Bockius after reading that the Philadelphia firm had handled Trump’s ethics and conflicts-of-interest compliance and won a “Russia Law Firm of the Year” award. The candidate, who didn’t want to be named, wrote to the recruiter that he couldn’t work at a firm that didn’t seem to share his principles. More:
Chelsea Clinton’s Husband Closes His Hedge Fund
Eaglevale Partners, the hedge fund co-founded by Marc Mezvinsky, the son-in-law of Hillary and Bill Clinton, closed in December, according to a person with knowledge of the matter. Eaglevale, based in New York, is in the process of returning money to clients, said the person who asked not to be named because the firm is private. Eaglevale was started by former Goldman Sachs Group Inc. traders Bennett Grau, Mark Mallon and Mezvinsky in 2011. They had previously worked together on the bank’s global macro proprietary-trading desk. A spokesman for Eaglevale declined to comment on the news, which was reported earlier by Hedge Fund Alert. More:
The End of Facts in the Trump Era
The order floated down from the lunatic’s castle late on a Friday. No more visas of any kind from seven countries, Donald Trump decreed, and mayhem replaced a weekend. Thunderstruck customs officials scrambled to make sense of the surprise order; planes landed and innocent travelers were detained; the Internet exploded; protesters stormed airports everywhere; the acting attorney general refused to go along and was fired like a contestant on one of Trump’s shows; it was Keystone Kops meets Pinochet.
And then there were the lies. If there is one thing the first few weeks of the Trump administration have proved, it’s that keeping track of what we used to call “objective fact” is now a fool’s errand.
Did the visa ban affect green-card holders? On a case-by-case basis, the administration said. The following day, a senior official said the ban “doesn’t affect them.” Reporters then asked if that was different from what was said at first. The answer, “No,” constituted a seemingly impossible third response to a simple question. The Trump administration is breaking new metaphysical ground in the mechanics of untruth. Trump went on to blame the media for falsely reporting that the plan was a “Muslim ban,” when a ban on Muslims was one of his most explicit campaign promises. He misled about it being “similar” to Barack Obama’s 2011 policy regarding Iraqi visas (it wasn’t close). He lied about everything with regard to the visa story, except for one thing: its popularity. “A majority of Americans agree with the president,” chirped Sean Spicer, already a challenger to former Disney tour guide and Nixon flack Ron Ziegler for the title of most loathed White House spokesman ever. Because this was the Trump administration, most sensible people assumed Spicer’s line was a lie. But it wasn’t. Despite near-unanimous condemnation by the international community and massive demonstrations, polls showed that more Americans than not supported whatever it was Trump was doing with the borders. This gets to the heart of a chilling truth that much of educated America has yet to face about the Trump era. Amid all the howling about Trump’s deceptions, the far more upsetting story is the mandate behind them – not so much the death of truth in politics, but the irrelevance of it. Donald Trump is proving that if you connect with America’s anger and paranoia, you can get by quite easily without facts. More:
Trump blasts CNN: Cuomo never asked Blumenthal about ‘long-term lie’ of serving in Vietnam
President Trump on Thursday blasted CNN, saying host Chris Cuomo didn’t ask Sen. Richard Blumenthal (D-Conn.) during an earlier interview about the Connecticut senator’s “long-term lie” of serving in the Vietnam War. “Chris Cuomo, in his interview with Sen. Blumenthal, never asked him about his long-term lie about his brave “service” in Vietnam,” the president tweeted. “FAKE NEWS!” Cuomo immediately addressed Trump’s tweet on the air, with the network re-broadcasting the beginning of Cuomo’s interview with the Connecticut Democrat, when Cuomo asked Blumenthal about misrepresenting his military record in the past. In response to the question, Blumenthal defended his statements that Judge Neil Gorsuch, Trump’s Supreme Court nominee, expressed concern to him about the president’s attacks on federal judges. “Really, the first point that I made in the interview,” Cuomo said on CNN. “The president with all due respect, is once again off on the facts. And that’s not something that any of us have any desire to say on a regular basis, but it keeps being true,” Cuomo continued. “Fake news is the worst thing that you can call a journalist. It’s like an ethnic disparagement. We all have these ugly words for people. That’s the one for journalists.” Cuomo said the president keeps doubling down when the facts “don’t favor his position.”
“Once again, he doubles down, when he’s wrong,” he said. The president has repeatedly said he doesn’t watch CNN, but his tweet came shortly after the Blumenthal interview aired Thursday morning.
Trump and terrorism: Why is the White House ignoring the real danger of homegrown extremism?
The brouhaha between the Trump administration and the press has continued all week, with President Trump complaining publicly that the media is refusing to cover terrorist attacks for unspecified reasons:
You’ve seen what happened in Paris and Nice. All over Europe, it’s happening. It’s gotten to a point where it’s not even being reported. And in many cases, the very, very dishonest press doesn’t want to report it. They have their reasons, and you understand that. Why he thinks the press would hide these stories is completely mystifying. The media go to great lengths to milk every single bloody casualty and tragic death they can. Nothing is as good for ratings as terror porn, as Trump surely knows. It was natural that the media suspected Trump was referring to the “Bowling Green massacre,” which Kellyanne Conway had been publicly insisting had not been covered by the media. (She was right. It wasn’t covered — because there was no Bowling Green massacre.) But when the White House released a list of 78 terrorist attacks the administration claimed had not be adequately covered, it included Paris, Nice, San Bernardino, Orlando and Brussels, among dozens of others that had received wall-to-wall coverage for weeks. Then the White House explained that it was really referring to attacks overseas like the machete-wielding man who threatened people in Paris last week and was killed before he could hurt anyone. Such attacks aren’t being given the kind of hysterical reporting that Trump officials apparently believe is necessary for citizens to understand the threat. They want to ensure that Americans think they are in danger of being hacked to death by deranged Muslims at any moment. Obviously, terrorism is a danger in this world. There isn’t anyone on the planet who is unaware of that. But this idea that foreign terrorists are the greatest threat to America has been repeatedly debunked in recent years, because the data simply does not back up that claim. Despite the minimal risk they present, after the Paris and San Bernardino attacks Donald Trump seized on the xenophobic paranoia that was setting the right wing aflame. He tied his existing Mexican-immigrant bashing to Muslim-immigrant bashing, and the issue took on a life of its own. Before Trump burst on to the scene, FBI director James Comey and other top law enforcement officials were making it clear that the danger from ISIS-style attacks in the United States did not stem from foreign immigrants or refugees but rather homegrown “lone wolves,” usually young male misfits who became radicalized online. More:
Aides and staffers are reportedly leaking about Trump out of genuine alarm
The Trump White House is so leaky that the constant drip of insider information has become a story and matter of speculation in itself. All presidential administrations leak, usually when one aide or staffer wants to harm a rival or expose an unwanted policy, or an administration wants to spread some news or gossip through backchannels. But “Trump’s two-week-old administration has a third category: leaks from White House and agency officials alarmed by the president’s conduct,” report Huffington Post White House reporters Christina Wilkie and S.V. Date. Both reporters say they have been approached with material from “individuals in executive agencies and in the White House itself” who “spoke on condition of anonymity for fear of losing their jobs.” Some of the leaks Wilkie and Date published Tuesday night include a 3 a.m. phone call Trump reportedly made to his national security adviser, Michael Flynn, to ask if a strong or weak dollar is better for the economy. (Flynn “told Trump he didn’t know, that it wasn’t his area of expertise, that, perhaps, Trump should ask an economist instead,” The Huffington Post reports.) Then there are these: The commander in chief doesn’t like to read long [briefing] memos, a White House aide who asked to remain unnamed told The Huffington Post. So preferably they must be no more than a single page. They must have bullet points but not more than nine per page. Small things can provide him great joy or generate intense irritation. Trump told The New York Times that he’s fascinated with the phone system inside the White House. At the same time, he’s registered a complaint about the hand towels aboard Air Force One, the White House aide said, because they are not soft enough. [The Huffington Post] “I’ve been in this town for 26 years; I have never seen anything like this,” Eliot Cohen, a senior State Department and National Security Council official in the George W. Bush administration, told The Huffington Post. “I genuinely do not think this is a mentally healthy president.” Randy Evans, a Republican National Committee member, predicts the leaks won’t last. “If the administration gets serious about leaks, they’ll do the blue-dye test and find them,” he said, describing a method where you feed discrete stories to different staffers and see which ones show up in print. More:
Lyft hiring drivers ahead of possible Birmingham launch
Popular ridesharing program Lyft is in the process of hiring drivers to launch in Birmingham, multiple drivers tell AL.com. Lyft is similar to Uber in that the app matches drivers to customers seeking rides using GPS. Lyft does not currently operate anywhere in Alabama. The company held several orientation meetings this past weekend, according to several people who attended them. Company representatives shared information about working driving for Lyft and took information from potential drivers. AL.com has obtained official communications from Lyft sent to a driver. All drivers spoken to for this story said Lyft plans to launch in Birmingham within 30 days. A Lyft representative said at the orientation the company has not yet finalized where in the Birmingham area they are offering the service, a driver said. Lyft did not respond to an email with questions Wednesday. City of Birmingham spokeswoman April Odom said Lyft has not submitted anything to the city. Ridesharing only began in Birmingham in December 2015 after more than a year of negotiations between Uber and city officials. As part of those negotiations, anyone who wants to be an Uber driver is required to apply for a license with the city of Birmingham. The license costs $30 annually, the same price paid for a taxi license.
Rep. Anthony Daniels of Huntsville elected Democratic House Minority Leader
MONTGOMERY, Ala. – Huntsville’s Rep. Anthony Daniels has won a vote in a party caucus to assume the role of House Minority Leader. Rep. Craig Ford announced he would not run to retain the spot last October in a fiery letter that called for both Nancy Worley, the Alabama Democratic Party Chairwoman and Dr. Joe Reed, head of the State Democratic Executive Committee to step down. Shortly after Ford’s announcement, Daniels announced he would seek the spot, telling WHNT News 19, “With my fundraising background, any leader of any party has to have the ability to raise money. They have to have the ability to be able to broaden the base and get people excited about being a part of the party process. And they have to have the ability to engage all members. So yes, I will be seeking Minority Leader.” At the time, he called for party unity and handling party business in private. Daniels also said of the party brand in October, “We are Alabama Democrats, we are not Washington Democrats,” he explained. “We have our own uniqueness. I want to kind of rebrand us to being the party of unity, and the party of inclusion.”
Perhaps as part of that process, Daniels heavily focused on job growth in a Montgomery interview with WHNT News 19 on the first day of the 2017 legislative session. He even expressed a willingness to work with President Donald Trump, so long as that collaboration would lead to more jobs. Daniels told us, “If they’re serious, as they said on the campaign trail, about job growth, I’m serious about job growth. And so that’s something where I can see some common ground. But just to talk about it and not take the aggressive steps to make it happen, that’s where we’re far apart. I’m about results.” More:
Bill to block funding to ‘sanctuary’ colleges advances in Alabama House
A bill that would block state funding to Alabama public colleges and universities that adopt a “sanctuary” policy, meaning they will not follow federal or state immigration law, was approved by an Alabama House committee today. The “Americans First Act” is a four-page bill sponsored by Rep. Phil Williams, R-Huntsville. Williams said he was contacted by leadership at the University of Alabama in Huntsville about a student movement to make UAH a “sanctuary” campus. Williams said he thought it was unlikely that any Alabama university would adopt such a policy. “I don’t think that this is going to happen,” Williams said. “But across America, there are issues that are very concerning with universities and their posture toward federal law.” The committee approved Williams’ bill on a voice vote, with several Democrats opposing it. Rep. Ralph Howard, D-Greensboro, said he saw no justification for passing a bill telling universities they had to obey federal law. “So what we’re saying is, all these highly educated people don’t have the ability to read federal law and understand it,” Howard said. Reps. Barbara Boyd, D-Anniston and John Rogers, D-Birmingham, also spoke in opposition to the bill. A student at Auburn University at Montgomery who is an Air Force veteran and a lawyer from Montgomery urged the committee to oppose the bill during a public hearing that came before today’s vote. “While it sounds innocuous, it’s really not,” attorney Alfred Norris said. “We don’t want to create a hostile environment, which is exactly what this bill does.” Williams said the bill is not aimed at keeping foreign students out of Alabama colleges, but at making sure colleges follow immigration law. “Please don’t spin it as we’re not welcoming to foreigners,” Williams said. “It has nothing to do with that. It says we’re going to put Americans First.” The bill says two-year and four-year colleges are subject to the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, the controversial immigration bill passed in 2011 and commonly called HB 56. Major parts of the law were found unconstitutional by federal courts, but Williams said much of it remains intact. Williams’ bill says failure to comply with state or federal immigration laws or cooperate with authorities “pursuant to a public declaration of sanctuary status or otherwise” could result in a forfeiture of funds. The bill can now be considered by the full House.
Alabama Attorney General lacks serious tools to fight Medicaid fraud
Yearly, State lawmakers struggle to feed the beast know as Medicaid, and every year they ignore Medicaid fraud legislation that would bring tens of millions back into our State coffers annually. By denying the State’s Attorney General’s Office the tools to prosecute Medicaid fraud, the State is losing millions in recoverable funds while allowing perpetrators to remain free to continue to defraud the system.
By passing a False Claims Act, along with qui tam, a door would open for real Medicaid fraud prosecution. A False Claim Act imposes liability on persons and companies who defraud government programs. Qui tam is a term used for rewarding a whistleblower who exposes fraud on the government for which they receive a 10 percent share of the recovery. Currently, 35 states have a False Claims Act with qui tam, but not Alabama. Monies captured under a False Claims Act with qui tam where qui tam meets Debt Reduction Act provisions would result in an HHS award of 10 percent bonus of all monies recovered by the state.
After Mr. Trump’s Din, the Quiet Grandeur of the Courts
The most reassuring sound in these rancorous early days of the Trump administration was the legal debate, at times arcane, over the president’s travel ban during live-streamed oral arguments in a federal appeals court on Tuesday. No gratuitous insults, no personal threats or childish tantrum — only judges and lawyers debating complex legal issues with respect and restraint. It was the sound of grown-ups taking responsibility for governing the country, and for people’s lives. Contrast that with the unfiltered outbursts Americans have endured from President Trump in the chaotic days since he signed his slapdash order suspending entry for people from seven predominantly Muslim countries, and all refugees.
Mr. Trump’s attacks on judges who questioned his order were too much even for his nominee to the Supreme Court, Judge Neil Gorsuch of the federal appeals court in Denver. Judge Gorsuch called the comments “demoralizing” and “disheartening,” according to a senator with whom he met on Capitol Hill on Wednesday. Mr. Trump — who has a toddler’s aversion to the word “no” — berated a federal judge who temporarily blocked the order last week, calling him a “so-called” judge on Twitter. He then warned that the judge, and the entire court system, could be responsible for any future terrorist attacks that might occur. The three-judge panel of the Court of Appeals for the Ninth Circuit, based in San Francisco, appeared skeptical of the administration’s argument on Tuesday that the executive order is essentially unreviewable. It has yet not issued a ruling, but that didn’t stop Mr. Trump, who wrote early Wednesday morning on Twitter, “If the U.S. does not win this case as it so obviously should, we can never have the security and safety to which we are entitled. Politics!” More:
Shoker! Rediculous chocker Trump attaks and dishoners English with ever-dummer spellings.
The English language was unprepared for the attak. It was destined to loose. And, inevitably, it chocked.
The Trump White House on Monday night, attempting to demonstrate that the media had ignored terrorism, released a list of 78 “underreported” attacks. The list didn’t expose anything new about terrorist attacks, but it did reveal a previously underreported assault by the Trump administration on the conventions of written English. Twenty-seven times, the White House memo misspelled “attacker” or “attackers” as “attaker” or “attakers.” San Bernardino lost its second “r.” “Denmark” became “Denmakr.” I wish I could say this attack was unprecedented — or, as President Trump spells it, unpresidented. But I cannot say that. Nothing has distinguished Trump, his aides and his loyal supporters more than their shared struggle with spelling. The morning after his inauguration, Trump tweeted: “I am honered to serve you, the great American People, as your 45th President of the United States!” The honer is all ours, sir — just as it was exactly a year ago when you tweeted: “Every poll said I won the debate last night. Great honer!” Soon after the latest honer boner, Trump received his first international visitor, the British prime minister, and the Trump White House, in its official schedule, spelled her name wrong not once and not twice but thrice. Theresa May became Teresa May. Britons noticed the gaffe, as well they would: Teresa May is the name of a British former soft-porn actress and busty nude model. During the transition, Trump thundered on Twitter in a tweet that was so unpresidential it might be Freudian: “China steals United States Navy research drone in international waters — rips it out of water and takes it to China in unpresidented act.” But what was really unprecedented was Trump’s tweet on Hillary Clinton that included three misspellings in the space of 140 characters: “Hillary Clinton should not be given national security briefings in that she is a lose cannon with extraordinarily bad judgement & insticts.” My insticts say Trump should enable auto-correct. That might have prevented him from labeling Sen. Marco Rubio (R-Fla.) a “lightweight chocker” and “always a chocker” after the senator choked in a GOP presidential debate. Trump’s spelling chock was no shock. He attacked another primary opponent, Sen. Ted Cruz (R-Tex.), by tweeting: “Big shoker! People do not like Ted.” It was no shoker, by contrast, that Trump also tweeted that Cruz “will loose big to Hillary.”
NORDSTROM VS. TRUMP — Brands keep pushing back against President Donald Trump and on Wednesday, at least, the brands won. Shares in Nordstrom Inc. closed the day up over 4 percent after Trump lashed out at the high-end retailer for dropping first daughter Ivanka Trump’s apparel and accessories line. The news of the removal was about a week old. But Trump chose Wednesday morning to fire back, tweeting: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!”
The official @potus account then retweeted the attack, putting the full weight of the United States government at the service of Trump’s personal family business squabble. Press secretary Sean Spicer dutifully kept up the attack at the daily briefing, accusing Nordstrom of dropping the line not because it was selling poorly but as a “direct attack” on the administration.
But investors shrugged off Trump, sending Nordstrom shares higher after a brief dip. Other companies targeted by Trump have also seen their shares recover much of their initial declines after finding themselves on the receiving end of a presidential blast. Stocks move for all kinds of reasons, of course. But at least on Wednesday, it appeared that Trump simply gave Nordstrom some free — and potentially welcome — attention.
Vox’s Mathew Yglesias: “[I]t may be that investors are anticipating a surge of new sales at the retailer thanks to the massive amount of free publicity Trump garnered for their store, or the way that doing battle with an unpopular president could boost its profile in the large metropolitan areas where most of its stores are located.” Read more.
Bloomberg’s Shannon Pettypiece, Richard Clough and Lindsey Rupp: “Trump is intervening in the daily business of U.S. companies to an unprecedented extent, spurring investors and executives to weigh their exposure to his wrath when making decisions.
“[After the Nordstrom tweet], Trump was trying to play corporate good cop. Intel Corp.’s Chief Executive Officer Brian Krzanich was in the Oval Office with Trump when he announced the semiconductor-maker would spend $7 billion on its production facilities in Chandler, Arizona that will create 3,000 jobs, a move that was already widely expected by investors and did little to boost shares.”
MM BOOK SHELF — We are excited to read New Yorker staff writer Sheelah Kolhatkar’s new book “Black Edge” about the government’s investigation of Steve Cohen and SAC Capital. Here’s a rave about it from the NYT. Get it on Amazon.
CEA MIND-MELD — A plugged in DC veteran offers thoughts on what Trump could do with the in-house economic forecasting shop that still doesn’t have a director: “CEA was created by statute which also requires an annual economic report — so it will be hard to eliminate (it could be ignored, but they do need to fill it out sometime).
“What has also not been reported is that the two Members of CEA are no longer Senate-confirmed, only the Chair. … So, it would be very easy for them to simply name a Member and have that person as ‘acting’ until a Chair is nominated. Not sure why they have not done that.”
CALLABRIA JOINS TEAM PENCE — POLITICO’s Lorraine Woellert: “Vice President Mike Pence has hired Mark Calabria as his chief economist … Calabria was director of financial regulation studies at the Cato Institute, where he was a prominent voice on financial services and economic policy and an expert on mortgage and housing reform.
“Before joining Cato in 2009, Calabria worked for the Senate Banking Committee, where he handled housing, mortgage finance, economics, banking and insurance for then-ranking member Richard Shelby (R-Ala.). His resumé includes stints at the Department of Housing and Urban Development, the National Association of Realtors and the National Association of Home Builders”
MELANIA INC. — Tim O’Brien on Bloomberg View: “We can all thank Melania Trump for giving us a clearer sense of what she and her family are looking for from their stay in the White House. … In court papers Melania filed on Monday as part of a libel lawsuit against the parent company of the Daily Mail, she said that the British tabloid and web site, by falsely reporting that she had once worked as a prostitute, caused the first lady to miss ‘major business opportunities’ and ‘multimillion-dollar relationships.’
“The lawsuit … said Melania’s missed deals would have involved such products as ‘apparel, accessories, shoes, jewelry, cosmetics, hair care, skin care, and fragrance.’ Melania’s role as first lady to President Donald Trump would have offered her a ‘once-in-a-lifetime’ opportunity to cash in on such deals, the lawsuit noted, but the reputational damage done by the Daily Mail had disrupted those plans” Read more.
ANTHEM DEAL REJECTED — POLITICO’s Paul Demko: “A federal judge halted Anthem’s bid to acquire Cigna for $54 billion … ruling the deal between the insurance giants can’t go forward because it would illegally hurt competition. U.S. District Judge Amy Berman Jackson concluded that the merger, which would create the country’s largest insurance company, would stifle competition for large employers in a market dominated by just four insurers, including Anthem and Cigna.
“The Justice Department successfully argued that the deal would eliminate an innovative, growing competitor in Cigna, and that the savings promised by Anthem were either illusory or not contingent on the merger” Read more.
FIRST LOOK: WHY TO WORRY ABOUT PUZDER — Bloomberg Businessweek cover story asks “Is Trump’s nominee for Labor, Andrew Puzder, yet another reason for American workers to worry? YES” Story is here. Cover image.
2-FOR-1 ORDER DRAWS LAWSUIT — Trump’s executive order requiring agencies to repeal two regulations for each new regulation drew a lawsuit from Public Citizen, the Natural Resources Defense Council and the Communications Workers of America. See it here.
KEEP VOLCKER BUT FIX IT — KBRA’s Chris Whalen in American Banker: “By retaining the Volcker Rule but revising it to address liquidity concerns, the Trump administration could achieve many of the goals of restoring Glass-Steagall while correcting a key problem created by Dodd-Frank.” Read more.
MNUCHIN BACKED — The U.S. Hispanic Chamber of Commerce CEO Javier Palomarez in Forbes: “We know that nominee for Secretary of Treasury, Steven Mnuchin, will play a pivotal role within the administration to promote a fair corporate tax rate and roll back much of the complex web of financial regulations that hurt our companies.” Read more.
Mnuchin, FWIW, is expected to get confirmed on Saturday. Shortly thereafter look for several top Treasury slots to get announced.
TRICKY TIME FOR FOREX — Mohamed El-Erian in the FT: “This is a tricky time for foreign exchange traders who now face an unsettling combination of policy uncertainty, fluid international trade arrangements and changes in official practices. … The dollar initially surged as the election of … Trump alongside Republican Congressional majorities fuelled market expectations of higher growth, capital repatriation and tighter monetary policy …
“This, together with the post-Trump rise in stocks and government yields, subsequently stalled as market participants waited for policy announcements to translate to design and implementation. Even last Friday’s dramatic financial deregulation signal could not stop a fourth successive week of dollar weakness. Currency markets have also been dealing with unusual uncertainties relating to international trade regimes and White House commentary.” Read more.
INTEL APPEASES TRUMP, GETS FREE AD — POLITICO’s Tony Romm and Madeline Conway: “Intel pledged on Wednesday that the chipmaker would commit $7 billion to build a new factory in Arizona while hiring at least 3,000 employees, an expansion that the company’s chief executive, Brian Krzanich, attributed to … Trump — even though some of those plans have been in the works for years.
“After a meeting with Trump at the White House, the president essentially turned the microphone over to Krzanich for what amounted to a product unveiling in the Oval Office that aired for free on the major cable networks” Read more.
BANKS SEE AN OPENING — POLITICO Pro’s Colin Wilhelm reports: “The war between banks and credit unions over a tax exemption for the latter has a new battleground: the House Republican tax reform plan.
“Banks see a way to break through the current stalemate by pushing to include an end to the exemption in the House GOP’s yet-to-be released comprehensive tax reform plan.” Read more.
DEUTSCHE RETREATS FROM SWAPS CLEARING — FT’s Joe Rennison reports: “Deutsche Bank is closing its US swaps clearing business as it battles to cut costs amid continued questions over its business model.
“The bank will continue to clear futures globally, according to people briefed on its plans, but its decision to stop clearing swaps in the US is effective immediately. The business had dwindled, with the German lender slipping to become only the 13th largest clearing bank for US swaps at the end of 2016.”Read more.
CHINA’S YUAN HONEYMOON — Bloomberg reports: “China has got the yuan in a sweet spot. The nation’s authorities have let the currency rise enough against the U.S. dollar to put a spanner in President Donald Trump’s assertion that China deliberately undervalues its exchange rate. At the same time, it has weakened against a trade-weighted basket of currencies, giving China a competitive edge in exports.” Read more.
BANKS CAN’T WAIT TO WIPE OUT COMPLAINTS DATABASE — Bloomberg’s Shahien Nasiripour reports: “Among the changes enacted through Dodd-Frank was the creation of the database, which catalogues consumer complaints about financial products and services. The law called for the CFPB to maintain it and provide Congress with annual updates analyzing the complaints.
“Reviled by banks, the database is a prime target for a Trump administration that has vowed to rewrite Obama-era financial rules and has suggested it will change the consumer bureau’s approach to policing financial markets. Richard Cordray, the bureau’s director, is among the complaint portal’s biggest proponents.” Read more.
GOLDMAN FOLDS LONDON OPERATIONS — Reuters’ Maiya Keidan and Olivia Oran report: “Goldman Sachs Investment Partners (GSIP), which opened in 2008 with one of the biggest launches in hedge fund history, is folding its London operations into the United States and shifting staff members to New York, four sources told Reuters.
“About eight staff members who made up the London team were recently told to move to the Battery Park City headquarters of Goldman Sach Group Inc (GS.N) in lower Manhattan or find a new job internally, the sources said.” Read more.
WELLS FARGO TO CUT BONUSES — WSJ’s Emily Glazer reports: “Wells Fargo & Co.’s board is likely to eliminate annual bonuses for 2016 for some top executives following the bank’s sales-practices scandal, according to people familiar with the matter.
“The cut to compensation isn’t meant to reflect culpability on the part of the executives in connection with the sales-practices scandal, the people said. Rather it is meant to show accountability for the bank’s overall performance.” Read more.
INVESTORS PILING ON JUNK BONDS IN TRUMP ERA — FT’s Eric Platt reports: “Investors are piling into some of the riskiest bonds sold by US companies as they bet on President Donald Trump delivering on his promises of a stronger economy, lower taxes and less regulation.
“Demand for junk-rated bonds has driven yields on debt with the lowest quality credit rating down towards 10 per cent as more than $10bn has flowed into funds that invest in the asset class since the start of December.” Read more.
WORRIES BUILD OVER EURO FATE — NYT’s Landon Thomas Jr. reports: “Even as global stock markets climb, worries are building among investors that long-simmering debt troubles in Greece and Italy will put additional strain on the euro.
“Yet with the central bank expected to eventually unwind its purchases of government bonds and other assets, investors are increasingly becoming concerned about how Europe — and Germany, in particular — can cope with escalating debt pressures in Italy and Greece.” Read more.
FIRMS SLASH INTEREST TAB: WSJ’s Matt Wirz reports: “Rising interest-rate expectations are fueling the biggest corporate-refinancing boom in years.
“U.S. companies refinanced $100 billion of loans in January, the largest monthly total in at least a decade, according to data from S&P Global Inc … .Borrowers in recent months have saved more than $1 billion in annual interest costs by renegotiating terms with their lenders, according to a Wall Street Journal analysis of the data.” Read more.
VW THREATENS LEGAL ACTION — FT’s Patrick McGee reports: “Volkswagen threatened legal action against its former chairman on Wednesday as the carmaker stepped into a public feud over whether top executives concealed knowledge about the diesel emissions scandal before it was revealed by US regulators in September 2015.
“In the past week, assertions to the contrary have been circulating in German media, based on leaks from what former chairman Ferdinand Piëch, grandson of Ferdinand Porsche, designer of the VW Beetle, allegedly told public prosecutors in Braunschweig, who are investigating the issue.” Read more.
FED GENERAL COUNSEL ALVAREZ TO RETIRE: POLITICO Pro’s Victoria Guida reports: “Federal Reserve General Counsel Scott Alvarez, one of the most influential figures at the central bank, will retire later this year after decades at the agency, the Fed announced today.
“Alvarez, who has served as general counsel since 2004, has played a key role in shaping the Fed’s approach to monetary policy and its implementation of the Dodd-Frank Act. The Fed Board of Governors said it will launch a search for his replacement.” Read more.
ALSO FOR YOUR RADAR —
MORE ON DURBIN — The Nat’l Restaurant Association also sent members to the Hill on Wednesday to argue against repeal of the Durbin amendment on swipe fees. Via the association’s VP Leslie Shedd: “If Wall Street gets its way and the current debit swipe-fee protections are removed, it would mean an $8 billion tax on small businesses that goes directly into the pockets of the biggest banks in the country.”
GE LAUNCHES 20K WOMEN INITIATIVE — GE on Wednesday announced a goal of having 20,000 women fill STEM roles at GE by 2020 (obtaining a 50:50 representation for all technical entry-level programs). Read more.
NEW HOUSEHOLD STUDY — The JPMorgan Chase Institute has a new report out Thursday on the financial resiliency of US households. The report “shows that each year nearly forty percent of US families make at least one extraordinary payment of roughly $1,500. The percentage is even higher for older Americans (44 percent) who often face the added challenge of managing against a fixed income.” Full report.
NEW ONLINE LENDING INSTITUTE — POLITICO’s Colin Wilhelm: “A new Online Lending Policy Institute has formed to research marketplace lending and fintech, with the backing of Quicken’s RocketLoans division and Cross River Bank, a New Jersey bank that helps facilitate loans made by marketplace lenders.
“The institute will be directed by former Federal Reserve assistant general counsel Con Hurley, who currently teaches banking law at Boston University. In a call with POLITICO Hurley insisted that the institute will focus on research, not advocacy, to differentiate itself from a trade association.”
9:00 am || Receives his daily intelligence briefing
9:30 am || Breakfast with airline industry officials; State Dining Room
10:30 am || Participates in the swearing-in of Attorney General Jeff Sessions
11:30 am || Speaks with President Ashraf Ghani of Afghanistan
Noon || Speaks with Emir Tamim bin Hamad Al Thani of Qatar
12:30 pm || Holds a SCOTUS listening session and lunch; Roosevelt Room
2:15 pm || Speaks with Emir Sabah al-Ahmad al-Jabir al-Sabah of Kuwait
2:45 pm || Speaks with Prime Minister Haider al-Abadi of Iraq
The House meets in a pro forma session at 2:30 p.m. The Senate is back at 10 a.m. to continue consideration of Tom Price to be Health and Human Services secretary. On deck: Trump’s Treasury pick Steven Mnuchin.
AROUND THE HILL — Sen. Susan Collins meets with SCOTUS nominee Gorsuch at 10:15. Then Gorsuch is off to huddle with Sen. Steve Daines at 11:15. Sens. Chuck Schumer and Patty Murray at noon will gaggle on Trump’s pick for Labor secretary, Andrew Puzder.
HAPPENING TODAY: SOON-TO-BE SEN. STRANGE COMES TO WASHINGTON. Drama aside, it’s pretty-much official: Alabama Gov. Robert Bentley will tap Luther Strange to fill the Senate seat of incoming Attorney General Jeff Sessions — despite the quiet conflict-of-interest worries in the southern state. Bres, Ken Vogel and Marc Caputo report today that Bentley “will formally announce Strange’s selection at a press conference in Montgomery on Thursday morning, and then the two will travel to Washington for Strange’s swearing-in as a senator.” Expect that to happen around 2 p.m. in the Senate.
Five Things to Know About the Child Tax Credit
The Child Tax Credit is a tax credit that may save taxpayers up to $1,000 for each eligible qualifying child. Taxpayers should make sure they qualify before they claim it. Here are five facts from the IRS on the Child Tax Credit:
The IRS Interactive Tax Assistant tool – Is My Child a Qualifying Child for the Child Tax Credit? – helps taxpayers determine if a child is a qualifying child for the Child Tax Credit.
Iran leader rebuffs Trump’s warning on missiles
Ayatollah Ali Khamenei dismissed Donald Trump’s warning to Iran to stop its missile tests, saying the new U.S. president had shown the “real face” of American corruption. In his first speech since Trump’s inauguration, Iran’s supreme leader called on Iranians to respond to Trump’s “threats” on Feb. 10, the anniversary of Iran’s 1979 Islamic revolution. Trump had tried but failed to frighten Iranians, Khamenei said. “We are thankful to (Trump) for making our life easy as he showed the real face of America,” Khamenei told a meeting of military commanders in Tehran, according to his website. The White House has said the last week’s missile test was not a direct breach of Iran’s 2015 nuclear pact with six world powers, but that it “violates the spirit of that”.. In remarks published on Tuesday, Iranian Foreign Minister Mohammad Javad Zarif said Tehran would not agree to renegotiate its nuclear agreement. “I believe Trump will push for renegotiation. But Iran and European countries will not accept that,” Mohammad Javad Zarif told Ettelaat newspaper. “We will have difficult days ahead.” On the campaign trail, Trump repeatedly promised to tear up the nuclear deal. While his Secretary of State, Rex Tillerson, has not called for an outright rejection of the accord, he has suggested a “full review” of it. The supreme leader, Iran’s top authority, also said Trump has “confirmed what we have been saying for more than 30 years about the political, economic, moral and social corruption in the U.S. ruling system.”
The British Parliament won’t let Trump address them because of his ‘racism’ and ‘sexism’
President Donald Trump will not be allowed to address the U.K. Parliament during his eventual state visit, The Independent reports. “An address by a foreign leader to both houses of Parliament is not an automatic right,” said Speaker of the House of Commons John Bercow, a former Conservative Party member. “It is an earned honor.” Bercow went on: “We value our relationship with the United States. If a state visit takes place, that is way beyond and above the pay grade of the speaker. However, as far as this place is concerned I feel very strongly that our opposition to racism and to sexism and our support for equality before the law and an independent judiciary are hugely important considerations in the House of Commons … I would not wish to issue an invitation to President Trump to speak in the Royal Gallery.” Parts of the Commons erupted into “rare” applause at Bercow’s declaration, The Independent notes. Some British politicians, including Labour leader Jeremy Corbyn, have demanded Trump’s invitation to visit the U.K. be canceled altogether until he revokes his ban on refugees and travelers from seven predominately Muslim nations. More than one million U.K. citizens have signed a petition demanding Trump’s state visit — expected later this year — be canceled. Watch Bercow’s address to Parliament, at link below.
Israel passes bill to seize private Palestinian land for Jewish settlements
JERUSALEM — Israel’s parliament passed a contentious law late Monday that allows the state to seize land privately owned by Palestinians in the West Bank and grant the properties to Jewish settlements for their exclusive use. The measure is designed to protect homes in Jewish settlements, built on private Palestinian property “in good faith or at the state’s instruction,” from possible court-ordered evacuation and demolition. Thousands of homes in dozens of settlements and outposts may now be protected, at least temporarily. The bill is likely headed for a high court challenge. Prime Minister Benjamin Netanyahu supports the legislation and has told his constituents that no government had done more for the settlers. On Monday, the Israeli leader said he had informed the Trump White House that a vote on the legislation was imminent. Israeli legislators in the opposition condemned the bill as reckless and warned that it would turn the world against Israel while goading prosecutors at the International Criminal Court in The Hague to take action against the Jewish state. The bill passed on a vote of 60 to 52. The private Palestinian land would be seized by the government and held until there is a final resolution of decades-long Israel-Palestinian conflict. Palestinian landowners could apply to the state for annual rents or be given another parcel. A member of parliament in Netanyahu’s own Likud party, Benny Begin, son of the former Prime Minister Menachem Begin, speaking before the vote, labeled it “the robbery bill.” Another Likud legislator, the former justice minister Dan Meridor, condemned the bill as “evil and dangerous.”
Steve Bannon Carries Battles to Another Influential Hub: The Vatican
ROME — When Stephen K. Bannon was still heading Breitbart News, he went to the Vatican to cover the canonization of John Paul II and make some friends. High on his list of people to meet was an archconservative American cardinal, Raymond Burke, who had openly clashed with Pope Francis. In one of the cardinal’s antechambers, amid religious statues and book-lined walls, Cardinal Burke and Mr. Bannon — who is now President Trump’s anti-establishment eminence — bonded over their shared worldview. They saw Islam as threatening to overrun a prostrate West weakened by the erosion of traditional Christian values, and viewed themselves as unjustly ostracized by out-of-touch political elites. “When you recognize someone who has sacrificed in order to remain true to his principles and who is fighting the same kind of battles in the cultural arena, in a different section of the battlefield, I’m not surprised there is a meeting of hearts,” said Benjamin Harnwell, a confidant of Cardinal Burke who arranged the 2014 meeting. While Mr. Trump, a twice-divorced president who has boasted of groping women, may seem an unlikely ally of traditionalists in the Vatican, many of them regard his election and the ascendance of Mr. Bannon as potentially game-changing breakthroughs. Just as Mr. Bannon has connected with far-right parties threatening to topple governments throughout Western Europe, he has also made common cause with elements in the Roman Catholic Church who oppose the direction Francis is taking them. Many share Mr. Bannon’s suspicion of Pope Francis as a dangerously misguided, and probably socialist, pontiff.
Despite risks, public pensions put faith in long-term returns
U.S. public pension funds are cutting their expectations for investment returns over the next 30 years or more, but some do not expect to meet even the new targets over the coming decade. After a long period of low interest rates, forecasts by investment analysts show the next 10 years will probably bring slower market growth, leading to reduced expectations for the $3.7 trillion of public pension assets. But public pensions are wary of lowering their expected return rates, or the discount rate, too quickly because doing so would drastically increase costs for state and local governments and their employees, whose contributions form the funds. Instead, the funds say they plan to make up for lower returns expected in the coming decade over the next 30 years or more. “Pension funds are in an extraordinarily difficult political situation,” said Don Boyd, fiscal studies director at the Rockefeller Institute of Government.
If they protect their portfolios by moving assets into safer, lower-return investments, he said, “they will have to drastically increase the cost for local governments. They are reluctant to do that.” The California Public Employees’ Retirement System, the largest U.S. public pension fund, anticipates annual returns of 6.2 percent over the next decade. However, CalPERS still expects its long-term return to align more closely with a discount rate that it plans to reduce to 7 percent by 2020, because it anticipates returns will jump to 7.83 percent in the decades to follow. Such a forecast in the short term could spell declining fund conditions, a rise in unfunded liabilities and increased costs for government employers and workers. CalPERS is not alone. The Ohio Public Employees Retirement System expects an average 6.76 percent return over the next five to seven years, short of its 7.5 percent discount rate. But the fund anticipates returns will climb to 7.85 percent over a 30-year period. More:
Goldman Sachs Economists Are Starting to Worry About President Trump
A rethink, if not an outright reversal? Just a few weeks ago, Wall Street analysts were busy boosting their economic forecasts on the expectation that President Trump would implement sweeping corporate-tax reform, a rollback of regulations, and new fiscal stimulus. Two weeks into his term and the president has been focused primarily on immigration and trade, causing a reevaluation among analysts at some banks that harks back to pre-election concerns about Trump’s uncertain effect on markets and U.S. economic growth. “Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration,” Goldman Sachs Group Inc. economists led by Alec Phillips wrote in note published late last week. “One month into the year, the balance of risks is somewhat less positive in our view.” Goldman’s Phillips cites three key reasons for the more cautious tone. More:
A Quiet Giant of Investing Weighs In on Trump
He is the most successful and influential investor you have probably never heard of. His writings are so coveted and followed by Wall Street that a used copy of a book he wrote several decades ago about investing starts at $795 on Amazon, and a new copy sells for as much as $3,500. Perhaps that’s why a private letter he wrote to his investors a little over two weeks ago about investing during the age of President Trump — and offering his thoughts on the current state of the hedge fund industry — has quietly become the most sought-after reading material on Wall Street. He is Seth A. Klarman, the 59-year-old value investor who runs Baupost Group, which manages some $30 billion. While Mr. Klarman has long kept a low public profile, he is considered a giant within investment circles. He is often compared to Warren Buffett, and The Economist magazine once described him as “The Oracle of Boston,” where Baupost is based. For good measure, he is one of the very few hedge managers Mr. Buffett has publicly praised. In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing “perilously high valuations.” “Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,” he wrote. More:
Trump’s Dodd-Frank Do-Over Diverted to Slow Lane With Obamacare
President Donald Trump’s pledge to dismantle the Dodd-Frank financial overhaul is colliding with the same reality as his pledge to gut Obamacare: The Republican majority in Congress can’t decide how to make it happen and Democrats are vowing to fight. Trump, who last month said Obamacare would be replaced “the same day or the same week,” or perhaps “the same hour,” acknowledged Sunday that the health-care law isn’t going away anytime soon. “We should have something within the year and the following year,” told Fox News’s Bill O’Reilly. The Dodd-Frank directive he signed Friday is hitting the same road block on Capitol Hill and at federal agencies. In both cases, Trump’s team has moved swiftly with a flurry of executive orders that largely promise action in the future. But Republicans in Congress aren’t close yet. On the House side, there’s no agreement on a plan to replace either Obamacare or Dodd-Frank. Even if they reach one soon, it’s almost certain to go beyond what Senate Republicans are likely to accept, and it won’t be able to attract Democratic votes. And putting forward new regulations will take years. Trump’s executive action on Dodd-Frank has also galvanized Democrats to fight changes to a law enacted in response to the 2008 financial crisis.
Extreme Vetting, But Not for Banks
Donald Trump, the man who positioned himself as the common man’s shield against Wall Street, signed a series of orders today calling for reviews or rollbacks of financial regulations. He did so after meeting with some friendly helpers. Here’s how CNBC described the crowd of Wall Street CEOs Trump received, before he ordered a review of both the Dodd-Frank Act and the fiduciary rule requiring investment advisors to act in their clients’ interests: “Trump also will meet at the White House with leading CEOs, including JPMorgan’s Jamie Dimon, Blackstone’s Steve Schwarzman, and BlackRock’s Larry Fink.” Leading the way for this assortment of populist heroes will be former Goldman honcho Gary Cohn, now Trump’s chief economic advisor. Dimon, Schwarzman, Fink and Cohn collectively represent a rogues gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy. Trump’s approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does. The two primary disasters in American history this century (if we’re not counting Trump’s election) have been 9/11 and the 2008 financial crisis, which cost 8.7 million people their jobs and may have destroyed as much as 45 percent of the world’s wealth. The response to 9/11 we know: major military actions all over the world, plus a radical reshaping of our legal structure, with voters embracing warrantless surveillance, a suspension of habeas corpus, even torture. But the crisis response? Basically, we gave trillions of dollars to bail out the very actors who caused the mess. Now, with Trump’s election, we’ve triumphantly put those same actors back in charge of non-policing themselves. In between, we passed a few weak-sauce rules designed to scale back some of the worst excesses. Those rules presumably will be tossed aside now.
Trump’s first health care action may be to let insurers charge older people more for Insurance
On his first day in office, President Donald Trump signed an executive order instructing his agencies to dismantle the Affordable Care Act “to the maximum extent permitted by law.” But what that would actually mean in practice has remained extremely unclear. The administration has drawn up a proposed new rule, but its content isn’t yet public. However, the Huffington Post’s Jonathan Cohn reports that, according to “industry consultants and lobbyists,” the administration is considering a few executive changes affecting the insurance market. The first among them would let insurers charge older people higher premiums than they’re currently allowed to under Obamacare. The background is that, under the Affordable Care Act’s “age bands,” insurers in the individual markets are allowed to charge their oldest customers a maximum of three times as much as their younger customers for premiums. The Trump administration’s proposed rule would change that, allowing older customers to be charged 3.49 times as much. “According to sources privy to HHS discussions with insurers, officials would argue that since 3.49 ‘rounds down’ to three, the change would still comply with the statute,” Cohn writes. Now, there’s a policy rationale here. Older people use, on average, much more health care than younger people, so it’s much more expensive for insurers to cover them — more than three times as expensive. So if insurers can only charge older people three times as much as anyone else, they’ll need to come up with the rest of the money for their care by charging everyone else relatively more. This is what has happened under Obamacare. The catch is that if insurance becomes too expensive for younger, healthier people, they might respond by not getting it. That would make the insured population sicker as a whole and therefore even more expensive to cover.
Appeals court schedules arguments on Trump travel ban
A federal appeals court will hear oral arguments Tuesday on the Justice Department’s request to overturn a broad block on President Donald Trump’s travel ban executive order. The San Francisco-based 9th Circuit Court of Appeals announced that a three-judge panel will hold an hour-long telephone argument session starting at 6 p.m. ET (3 p.m. PT.) Tuesday. The arguments were scheduled just as the Trump administration filed a new brief arguing that national security concerns make it improper for the courts to intrude on executive branch decisions about which foreigners should be denied entry to the U.S. The new filing warns the courts against taking “the extraordinary step of second-guessing a formal national-security judgment made by the President himself pursuant to broad grants of statutory authority,” the new government filing said. “The potential national-security risks and harms resulting from the compelled application of procedures that the President has determined must be reexamined, for the purpose of ensuring an adequate measure of protection for the Nation, cannot be undone. Nor can the effect on our constitutional separation of powers,” the Justice Deparment argued. The Justice Department brief backs the federal government’s motion to stay an order U.S. District Court Judge James Robart issued Friday halting several key aspects of Trump’s week-old executive order. He issued the order in a lawsuit brought by the states of Washington and Minnesota. The brief was a lawyerly restatement of tweets Trump issued earlier this week saying that Robart and other judges could be responsible if the nation suffered a terrorist attack as a result of the decision to lift the order in which Trump banned travel to the U.S. by citizens of seven majority-Muslim countries, suspended all refugee admissions for 120 days and put an indefinite hold on Syrian refugees. More:
Justice Department Urges Appeals Court to Reinstate Trump’s Travel Ban
WASHINGTON — The Justice Department on Monday evening urged a federal appeals court to reinstate President Trump’s targeted travel ban, saying that a judge’s order blocking it endangered national security and violated the separation of powers. The court, the United States Court of Appeals for the Ninth Circuit, has scheduled an hourlong oral argument in the case for 3 p.m. Tuesday. Opponents of the ban have said that it is a threat to the rule of law, to the nation’s security and to the economy.
With the filing of the administration’s brief, the challenge to the travel ban, the most ambitious and disruptive initiative of President Trump’s young presidency, is now ready for its most important judicial test yet, one that will yield the first appellate ruling. Many trial judges around the country have blocked aspects of Mr. Trump’s executive order suspending travel from seven mostly Muslim countries and limiting the nation’s refugee program, but none of those cases have reached an appeals court. And none of the lower-court rulings were as broad as the one under review in the case, State of Washington v. Trump. That ruling, from Judge James L. Robart, a federal judge in Seattle,blocked the key parts of Mr. Trump’s executive order. Judge Robart’s ruling allowed immigrants and travelers who had been barred from entry to come to the United States, and it inspired a harsh attack from Mr. Trump, who accused the judge of endangering national security. On Saturday, the administration asked the Ninth Circuit for an immediate administrative stay of Judge Robart’s ruling without hearing from the plaintiffs in the case, the states of Washington and Minnesota. The court declined, instead asking for more briefs. More:
New FCC chair just blocked 9 companies from providing affordable Internet to the poor
Regulators are telling nine companies they won’t be allowed to participate in a federal program meant to help them provide affordable Internet access to low-income consumers – weeks after those companies had been given the green light. The move, announced Friday by FCC Chairman Ajit Pai, reverses a decision by his Democratic predecessor, Tom Wheeler, and undercuts the companies’ ability to provide low-cost Internet access to poorer Americans. In a statement, Pai called the initial decisions a form of “midnight regulation.” “These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward,” he said. The program, known as Lifeline, provides registered households with a $9.25-a-month credit, which can then be used to buy home Internet service. As many as 13 million Americans may be eligible for Lifeline that do not have broadband service at home, the FCC has found. Roughly 900 service providers participate in the Lifeline program. For Kajeet Inc., one of the companies that was initially granted permission to provide service through Lifeline, the news comes as a blow. “I’m most concerned about the children we serve,” said Kajeet founder Daniel Neal. “We partner with school districts – 41 states and the District of Columbia – to provide educational broadband so that poor kids can do their homework.” Since becoming chairman last month, Pai has made closing the digital divide a central axis of his policy agenda. Although the vast majority of Americans have access to Internet service, there remain distinct gaps in U.S. broadband penetration, particularly among seniors, minorities and the poor. In his first address to FCC staff, Pai singled out the digital divide as one of the signature issues he hoped to address. More:
Trump: ‘Any negative polls are fake news’
President Trump early Monday blasted “negative polls” as “fake news,” saying the public wants “border security and extreme vetting.” “Any negative polls are fake news, just like the CNN, ABC, NBC polls in the election. Sorry, people want border security and extreme vetting,” he tweeted. Trump also said that “everyone knows” he calls his own shots, “largely based on an accumulation of data.” “I call my own shots, largely based on an accumulation of data, and everyone knows it. Some FAKE NEWS media, in order to marginalize, lies!” he tweeted. A CNN/ORC poll released Sunday found that most Americans oppose Trump’s executive order on immigration. CNN’s Brian Stelter pointed out that the news network showed results from the poll around 30 minutes before Trump’s tweets. More:
CNN says it passed on booking Conway for Sunday show
CNN said Monday that it passed on booking Kellyanne Conway as a guest for a Sunday morning political show, needling President Trump’s top aide on Twitter. “. @KellyannePolls was offered to SOTU on Sunday by the White House,” the CNN Communications account tweeted Monday, referring to its “State of the Union” show. “We passed. Those are the facts.” The New York Times reported Sunday that CNN had decided not to put Conway on as a Sunday guest partially because of “serious questions about her credibility.” Mika Brzezinski, the co-host of MSNBC’s “Morning Joe,” also took to Twitter to knock Conway. CNN on Monday was responding to a tweet from Conway, who denied that she was passed over and claimed she wasn’t able to go on shows this weekend. “False. I could do no live Sunday shows this week BC of family,” she tweeted. “Plus, I was invited onto CNN today & tomorrow. CNN Brass on those emails.” Vice President Pence was interviewed on the Sunday morning political shows this weekend, but skipped CNN. Conway faced backlash this weekend after pointing to a terrorist attack that never happened during her defense of Trump’s executive order temporarily barring refugees and people from seven predominately Muslim countries from entering the U.S. During an interview last week with MSNBC’s “Hardball,” Conway referenced the “Bowling Green massacre,” an event that never happened.
“President Obama had a six-month ban on the Iraqi refugee program after two Iraqis came here to this country, were radicalized, and they were the masterminds behind the Bowling Green massacre,” Conway said during the MSNBC interview. “Most people don’t know that because it didn’t get covered.” Conway later corrected herself in a tweet following the interview, which included a link to a 2013 ABC News report that referenced two terrorists from al Qaeda in Iraq who had been living in Bowling Green, Ky. The report said the State Department halted Iraqi refugee requests for six months in 2011 as a result of the case.
Over the weekend, Conway sought to defend herself, saying she “misspoke one word.” She called some of those who criticized her for the misstatement “haters.” She also spurred controversy last month when she said White House press secretary Sean Spicer provided “alternative facts” to reporters during his first briefing.
Decoding Stephen Miller’s Nationalist Mind
In the opinion section of last Wednesday’s New York Times, journalist Masha Gessen and retired tennis star Martina Navratilova wrote an article on their feelings about the recent immigration restrictions ordered by Donald Trump. “This anger and despair make both of us feel as if we are losing our home,” they wrote. Since both writers had themselves immigrated to the United States, “home,” rather than being a place of birth, was somewhere that gave them “a sense of safety, a sense of familiarity, a sense of inhabiting space with certainty, a sense, indeed, of the certainty of that space—the opposite feeling of having the rug pulled out from under your feet.” This was all understandable—and sad. At the same time, their sentiments opened an unlikely window on the thinking of Trump’s chief advisers. Trumpism—along with its leaders in the White House—is often rejected as a doctrine of simple racism or ethno-nationalism. But such pejoratives obscure that it’s a mostly coherent system of belief (in contrast to the thoughts of Trump himself), one that’s more vulnerable than most to hijacking by racial extremists (take a bow, Richard Spencer), but still—for now, God help us—separate from them. A few years back, Stephen Miller, a White House senior policy adviser at whose feet much of the tumult resulting from Trump’s immigration order has been laid, madesome brief remarks at a conservative gathering in Palm Beach. “One of the things that we’re missing from our political dialogue right now is the idea that the United States is a home,” said Miller, who was then a staffer for Jeff Sessions. “It is more than an accounting sheet. It is more than the sum of its G.D.P., its total tax collections, or its total outlays. America is a family.” What threatened the American family and home, said Miller, was a government that cared more about numbers pleasing to business interests than to the concerns of those whom it was supposed to represent. With its push for ever-lower barriers to migration or trade, he explained, Washington was abandoning the “real flesh-and-blood citizens who together create this body politic, this nation, this home, represented by that flag.” This has been a staple of the belief system among Trump’s senior staffers: America is a home, not an economy, and the economy must serve the home, not the other way around.
What Miller left unsaid, but implied, was also the contrast between home and doctrine. For the past two decades, prevailing opinion has embraced the idea of the United States as an “experiment,” a “propositional nation” or “creedal nation,” as Irving Kristol described it in 1995. In contrast to older nations, America is bound together by people “dedicated to the proposition” of constitutional democracy as laid out by Lincoln. It’s an appealing idea for a great number of reasons. It helps bridge our ethnic divisions, and it gives newcomers a fast track to assimilation. That citizenship is an act of will, a buy-in rather than something more organic, helps remove nationhood from the realm of “blood and soil,” a conception of nationhood that predated the Nazis but won’t soon recover from their embrace.
Group behind Women’s March to launch strike
The group behind the Women’s March on Washington in protest of Donald Trump‘s presidency announced plans for a strike. In social media posts, the Women’s March group announced a “General Strike: A day without a woman.” The date and other details about the strike were not immediately clear. Hundreds of thousands of protesters gathered in cities across the world on Jan. 21 to march on Trump’s first full day in office to voice opposition to his policies. The plans, hatched just after Trump’s Election Day victory, began with a march in Washington and quickly ballooned into a massive protest that sparked sister demonstrations around the world. The Women’s March group is now organizing in local communities to keep people involved in politics.
North Carolina’s bathroom law puts NCAA events at risk: official
North Carolina is close to losing NCAA championship events for six years at a cost of more than $250 million because of a law that restricts bathroom access for transgender people, a local sports official told state lawmakers on Monday. The governing body for U.S. college athletics is reviewing bids to host events through spring 2022, including 133 from North Carolina cities and universities, said Scott Dupree, executive director of the Greater Raleigh Sports Alliance. The law known as House Bill 2, which bars transgender people from using government-run restrooms that match their gender identity and limits local nondiscrimination protections, will doom the state’s chances, Dupree wrote in a letter. “Our contacts at the NCAA tell us that, due to their stance on HB 2, all North Carolina bids will be pulled from the review process and removed from consideration,” said Dupree, adding he was sharing the information on behalf of the North Carolina Sports Association. The NCAA did not respond to a request for comment. The organization has already moved championship events, including two rounds of the prominent Division I men’s basketball tournament, from the hoops-loving state for the current academic year in protest at the measure. “In a matter of days, our state’s sports tourism industry will suffer crushing, long-term losses and will essentially close its doors to NCAA business,” Dupree said. “Our window to act is closing rapidly.” Adopted last March by North Carolina’s Republican-controlled legislature, the law prompted legal challenges, boycotts by corporations and entertainers, and the relocation of the National Basketball Association’s 2017 All-Star Game. More:
Claims of ‘Homosexual Agenda’ Help Kill Hate Crimes Laws in 5 States
Last year, lawmakers in South Carolina introduced legislation that would have increased the standard penalties for anyone who assaults, intimidates or threatens another individual if they did so because of the victim’s “race, religion, color, sex, age, national origin, or sexual orientation.” Drafted by Democratic legislators after white supremacist Dylann Roof murdered nine African-American parishioners at a church in Charleston, the bill never even came up for a vote. It was a familiar fate. In recent years, at least a half-dozen other hate crimes proposals have died in the South Carolina statehouse. Much the same story played out in Indiana, where Republican state Sen. Susan Glick authored similar legislation in 2016; Glick’s bill would have increased time behind bars for those convicted of harming or intimidating someone if the assailant’s motivation was driven by the victim’s gender identity, disability, sexual orientation, race, religion or immigration status. The legislation passed in the Senate by a vote of 34-16 but died in the House without so much as a hearing. Since the 1980s, nearly every state in the union has enacted some sort of hate crimes law, as have Washington, D.C., and the federal government. While the laws vary from state to state, they generally bolster penalties for those who commit crimes — assault, vandalism, credible threats of physical violence, among others — because of some sort of bias against the victim. South Carolina and Indiana are among a small handful of states that have failed to pass such laws. Wyoming, Arkansas and Georgia are the other hold-outs. Much of the opposition to creating hate-crime legislation in these states has come from well-organized groups of Christian fundamentalists who on religious grounds disapprove of any sort of legal protections for gays, lesbians and transgender people. For these critics, the primary concern is legal language stepping up punishment for crimes motivated by contempt for the LGBT populace, measures they view as a small but dangerous part of a broader “homosexual agenda.” One of the Christian groups is the Family Research Council. Contacted by ProPublica, the FRC’s national office directed questions about hate crimes to Ryan McCann, an Indiana activist and lobbyist who works with the organization. McCann views hate crimes laws as a sort of Trojan Horse: If Indiana adopts such a law, McCann said, LGBT advocates will use the precedent to argue for further legal safeguards, including anti-discrimination statutes, which he opposes. More:
‘If something happens’: Trump points his finger in case of a terrorist attack
President Trump appears to be laying the groundwork to preemptively shift blame for any future terrorist attack on U.S. soil from his administration to the federal judiciary, as well as to the media. In recent tweets, Trump personally attacked James L. Robart, a U.S. district judge in Washington state, for putting “our country in such peril” with his ruling that temporarily blocked enforcement of the administration’s ban on all refugees as well as citizens of seven majority-Muslim countries from entering the United States.
“If something happens blame him and the court system. People pouring in. Bad!” Trump wrote in a tweet Sunday. Then on Monday, Trump seemed to spread that blame to include news organizations. In a speech to the U.S. Central Command, the president accused the media of failing to report on some terrorist attacks for what he implied were nefarious reasons. “ISIS is on a campaign of genocide, committing atrocities across the world,” Trump told commanders at MacDill Air Force Base in Tampa, using an acronym for the Islamic State terrorist group. He added: “You’ve seen what happened in Paris and Nice. All over Europe it’s happening. It’s gotten to a point where it’s not even being reported. And in many cases, the very, very dishonest press doesn’t want to report it.
WH list of terror attacks misspells San Bernardino
The White House misspelled San Bernardino, Calif., in its Monday evening list of terrorist attacks it says “have not received the media attention they deserved.” The list calls the Dec. 2, 2015, mass shooting the “San Bernadino” attack before accurately stating that the “coordinated firearms attack” was perpetrated by “two US persons” who killed 14 people and wounded 21 others. Rep. Mark Takano (D-Calif.) criticized the spelling error late Monday. “If the White House didn’t know how to spell San Bernardino they should’ve read one of thousands of heartbreaking articles remembering victims,” he tweeted. Rep. Pete Aguilar (D-Calif.) also lashed out about the misspelling on Twitter, saying Trump was exploiting “our community to justify your #muslimban.” Monday’s list additionally includes repeated misspellings of “attacker” and “attackers” as “attaker” and “attakers,” respectively. The White House distributed Monday’s list to illustrate how “most” of the noted attacks had not received adequate media coverage. The list spans from September 2014 to December 2016 and contains 78 attacks planned or carried out by followers of the Islamic State in Iraq and Syria (ISIS) both at home and abroad. The collection includes major attacks such as San Bernardino and the November 2015 massacre in Paris that dominated news coverage for weeks. It also listed strikes overseas that received limited media attention in the U.S., including killings in Dhaka, Bangladesh and Zvornik, Bosnia. “Since ISIS declared its caliphate, there has been a major attack targeting the West executed or inspired by the group more than once every two weeks,” the White House said. Officials distributed the document hours after President Trump accused the media of failing to report on terrorist attacks. “It’s gotten to a point where it’s not even being reported,” he said at MacDill Air Force Base in Tampa, Fla. “And in many cases, the very, very dishonest press doesn’t want to report it.”
Why did the USDA shut down an online animal abuse database?
An online database documenting animal abuse suddenly disappeared from the United States Department of Agriculture (USDA) website on Friday, sparking outrage among animal rights activists. Thousands of inspection reports and other information documenting animals mistreated, injured, or killed at research laboratories, zoos, puppy mills, and elsewhere were removed due to privacy concerns, said the USDA’s Animal and Plant Health Inspection Service (APHIS) in a statement. But some animal welfare groups believe the move was in response to pressure from industries that rely on animals, as advocates for such businesses have long fought against what they see as excessive government oversight influenced by animal rights groups. “There has been tremendous pushback from the industries that exploit animals because the information in that database was used to publicize and expose the abuse of animals,” Michael Budkie, the executive director of Stop Animal Exploitation NOW!, told CNN. “Essentially this is going to help labs and animal dealers and animal breeders who break the law to remain undetected and out of the public eye, because it will slow down the process of obtaining information.” The shutdown has been decried by animal rights advocates as a reversal of the progress that has been made in recent years to crack down on animal abuse. Last year, the FBI began tracking data on animal cruelty crimes, a move that was widely applauded by both law enforcement and animal activists. A number of states have also proposed or implemented animal abuser registries to ensure that listed offenders aren’t able to access animals. Advocates for businesses that rely on animals have spoken out against such registries and argued that public USDA records allow animal rights groups to target individual animal owners and animal related businesses. More:
California and President Trump are going to war with each other
President Trump had harsh words for one of his most fervent opponents during the pre-Super Bowl interview with Fox News’s Bill O’Reilly that aired Sunday. Not President Vladimir Putin, mind you, whose alleged unpleasant habit of murdering journalists met with a shrug from the president. No, Trump lashed out at the nation’s largest state, California. “I just spent the week in California,” O’Reilly said. “As you know, they are now voting on whether they should become a sanctuary state. So California and the U.S.A. are on a collision course. How do you see it?” “Well, I think it’s ridiculous,” Trump replied. “Sanctuary cities, as you know I’m very much opposed to sanctuary cities. They breed crime, there’s a lot of problems. We have to well defund, we give tremendous amounts of money to California . . . California in many ways is out of control, as you know. Obviously the voters agree or otherwise they wouldn’t have voted for me.” “So defunding is your weapon of choice?” O’Reilly asked. More:
Your Guide to the Sprawling New Anti-Trump Resistance Movement
The election of Donald Trump was a catastrophe for progressive America, but the damage may be mitigated over the long term by a remarkable surge of energy on the left in response to his election. As many as 5.2 million people participated in hastily organized Women’s Marches across the country, senators’ phones have reportedly been jammed with calls protesting Trump’s cabinet nominees and other early moves, and, according to a poll conducted by The Washington Post, more than one in three Democrats say they plan to become “more involved in the political process in the next year” as a result of the election. That’s true of 40 percent of Democratic women, and almost half of self-identified liberal Democrats. The widely held view that Trump is an illegitimate president who’s poised to enact an agenda combining the worst of House Speaker Paul Ryan’s “granny-starving” fiscal conservatism with White House consigliere Steve Bannon’s ethno-nationalism has fueled the formation of dozens of new grassroots resistance groups. Some were launched by seasoned political operatives, others by people who hadn’t engaged in activism in the past. Some were germinated during chats on long bus rides to the Women’s March. Not all of them will succeed—some false starts are a given—but like any collection of innovative start-ups, it only takes a few successes to change the landscape. Here’s an overview of some of the new efforts launched since November 9. It’s by no means comprehensive, but we started with a list of 75 new groups and whittled them down to some of the most interesting or promising. They’re not presented in any kind of ranked order. Our hope is that knowing how others are standing up to Trump will inspire more readers to get involved.
Former Alabama Gov. Don Siegelman expected to be released from prison this week
OAKDALE, La. – Former Alabama Gov. Don Siegelman, who has served a little more than five years in prison on bribery and related charges, is set to be granted home confinement for the final six months of his prison term, a former Siegelman aide told WHNT News 19 this afternoon. Siegelman, 70, is currently being housed at Oakdale Federal Correctional Institute in Oakdale, La. His family lives in Birmingham.
Family spokesman Chip Hill said Siegelman has been told he will be released from prison on Wednesday. “He will be on very restricted supervised probation for an initial period of time,” Hill said in an email to WHNT News 19. “This is expected to be about six months. Following that, he will be on unsupervised probation for an extended, but not yet specified, period of time. Immediately after returning home, he will report to an assigned probation officer who will provide him with much more detailed information about what restrictions he will have, including specifics regarding media access. “Naturally, his family and many friends are very excited about his release and very much look forward to seeing him,” Hill wrote.
Alabama State Rep. Jack Williams announces he will not seek re-election
Vestavia Hills-Republican, State Rep Jack Williams announced he will not not seek re-election at the end of his term Monday morning. Williams, 59, has been a member of the Alabama House of Representatives since 2004, representing House District 47, which is composed of much of the City of Vestavia Hills and the City of Hoover. “I’ve been in Montgomery for the last 12 years and have two more years to go at the end of my term and there are some other things that I have an interest in doing that doesn’t include anything in Montgomery,” Williams told Alabama Today. “I will refocus my attention then.”
The former Chairman of the Greater Birmingham Young Republicans, Williams has also served as President of the National Republican County Officials. He currently serves as the Chairman on the Alabama House Commerce and Small Business Committee. Williams made the formal announcement of his decision Monday morning in the foyer of his church in Vestavia Hills — an apt location following all of the prayers that went into his decision. “I’m grateful for the voters in District 47 and for the confidence they’ve shown in me the last three to four elections,” he told Alabama Today after the announcement. “I wanted to make announcement now, in time to give folks a chance to consider running. There are a lot of folks capable in the District.” Williams said he had privately made the decision years ago, but wanted to be sure of his choice before he formally announced it. “I probably decided a couple of years ago I wasn’t going to run again for the legislature, but didn’t want to make a decision in the heat of an election season,” Williams explained. ” But as the months have gone by, I’ve prayed about and thought about it and I’m even more confident this is the right thing for both myself and the District.”
Mystery donor gives $2.5 M to Alabama Alzheimer research
Alabama genetic scientists are beginning new research that could lead to earlier diagnosis and new treatments for Alzheimer disease. The research, which involves sequencing the complete genetic makeup of 1,500 patients, is funded by a new, anonymous gift of $2.5 million to the HudsonAlpha Institute of Biotechnology in Huntsville. “We are overwhelmed with gratitude and deeply humbled. This generous gift allows us to begin a unique Alzheimer disease project that has the potential to lead to earlier diagnosis and new treatments,” said lead researcher Dr. Rick Myers, HudsonAlpha’s president and science director. Myers’ team hopes to create an early “picture” of the disease, the institute said.
“HudsonAlpha has a rare opportunity to conduct truly groundbreaking research in Alzheimer disease through this project. What we learn could help us diagnose earlier, monitor treatments better and lead to drug discoveries for new treatments,” Myers said. The donation was made in December to the institute’s M&M Fund. That fund had a goal of $4.3 million in gifts, and the institute said it is only $400,000 away.
That gives the institute access to 750 more patient samples. In order to finish research on the entire set of patients, the institute needs another $1.5 million. “These diseases impact tens of millions of people every year, and their families as well. I believe we will change their stories through this work. It is an incredibly compelling reason to give,” Myers said.
AL bill proposes $10 minimum wage
BIRMINGHAM, AL (WBRC) – Alabama does not have a minimum wage. The federal minimum of $7.25 applies. Representative Juandalynn Givan (District-60) pre-filed a bill that will create a state minimum wage of $10 for workers. “It’s important because we have people who are barely making ends meet in the state of Alabama,” Givan said. The bill requires hourly workers get paid $10 per hour. Tipped employees must be paid at least the minimum wage, once wages and tips are combined, with a requirement that at least 30 percent come from wages. “It’s just time and it’s a uniform minimum wage act so it’s not just for one municipality versus another, it’s for the entire state of Alabama,” said Givan. Scott Dean opened Mama Goldberg’s Deli in Homewood 10 years ago. He likes being his own boss but says it can be stressful. “There’s always repairs that have to be made, small monetary things that come that you’re not expecting. You’re where the buck stops,” he explained. Costs of rent and food have gone up from year to year for Dean, and he says an increased cost for employees is inevitable. “My main concern is how much will I have to raise prices,” he said. He’s not against a higher minimum wage, adding that he already pays above the minimum. “Hopefully maybe if more people had more money they would be able to go out and spend it more. And so maybe it would counteract raising the prices just a little bit.”
Alabama Senate GOP supports income tax cuts, ending pistol permit requirement
The Alabama Senate Republican Caucus will support changes in state income tax deductions that would cut taxes for 180,000 Alabamians, the caucus announced in a press release. The caucus, which holds 26 seats in the 35-member Senate, released its agenda for the 2017 session, which starts Tuesday. The caucus will also support a bill to eliminate the requirement for a permit to carry a concealed handgun.
“I look forward to working with my colleagues as we roll up our sleeves and put in the necessary work to implement these bold reforms, which strengthen Alabama’s future and will create more opportunity for the hard-working taxpayers of this state,” Senate President Pro Tem Del Marsh said in the press release.
The income tax cuts would result from raising the income thresholds for claiming standard deductions on state income taxes. The proposal is a new one and the sponsor will be announced later this week. Sen. Gerald Allen, R-Tuscaloosa, is sponsoring a proposal to eliminate the requirement for a permit to carry a concealed pistol. It is likely to face opposition from sheriffs and police, who have previously opposed his bills to eliminate the requirement for a permit to carry a loaded pistol unlocked in a vehicle. Allen’s bill this year would go further by eliminating the requirement for concealed carry permits altogether. Ten states allow concealed carry without a permit, according to the GOP Caucus press release. If Allen’s bill became law, people would still be able to buy pistol permits so that they could carry concealed handguns in neighboring states that have reciprocity agreements with Alabama. Other items on the Senate GOP caucus agenda:
Birmingham police warn public about dangerous carjacking spree
BIRMINGHAM, Ala. (WIAT) — Several carjackings in the area have caught the attention of police due to their similarities. Police believe the suspects are black males in their teens. Birmingham Police say the suspects come up behind the car, hit it from the back and then wait for the victim to get out of the car to survey the damage. Once they do that, police say the suspects pull a gun on the victim and then steal their car and in some cases, wallets. “From what we know, we know we don’t believe they are selling the cars because they take the cars and use the same vehicles to go and commit additional robberies,” Birmingham Lt.Sean Edwards said. Police are urging people, specifically single females, to remain extremely cautious. The suspects are targeting people in the early morning hours. “If you are a single female driving your car, just be mindful. If somebody bumps your car, please pull over at a gas station, a well lit area where there’s more people there that can assist you,” Edwards said. Birmingham police say they have some strong leads in this case. These suspects are not targeting one specific area. They are spread out throughout the city. If anyone has information that can help police, call 205-254-2000
Senator discussed as candidate for ASU job to stop revolving door
An Alabama State University Board of Trustee told IAP News this week that several members are giving serious consideration to the selection of State Senator Quinton Ross as its next President.
The Trustee, who asked not be identified, said Ross was the favorite choice to be ASU President by some members in recent private talks. According to the Trustee, in 2014 Ross had also been discussed as a possible candidate for the office before the selection of former ASU President Gwendolyn Boyd.
“Senator Ross has the respect of not only students, faculty, and board members he has a great chance of being nominated when we get down to the process of hiring a new President,” said the trustee. “He graduated from the ASU…a leader…and is well regarded in the Legislature.” More:
One can always find free entertainment by reading some of the pre-filed bills before each session of the Alabama Legislature. This year was somewhat light on crazy but there are a few gems that stick out. Be sure to watch these puppies as the legislature begins the 2017 session this week. Senator Phil Williams is the sponsor of the so-called Alabama Privacy Act. Counter-intuitively the centerpiece of the Alabama Privacy Act requires operators of public bathrooms to provide a monitor for the activities going on inside the bathroom. This bill is a self-inflicted wound to common sense. Legislation introduced by Sen. Trip Pittman brings new life to the firing squad – In a parting “shot” to his tenure in the Senate, Pittman would like to re-introduce the firing squad as one of three possible methods of execution a doomed inmate can elect. Pittman has announced he will not run again for the Alabama Senate. But before he leaves he seems to want to give condemned prisoners one last chance to save the state some money and go out with a bang. Well at least Pittman is not trying to limit the choices of Alabamians.
Fantasy Sports Contest Act by Sen. Tom Whatley – Bingo by another name his bill creates a regulatory scheme for operators of fantasy sports contests. Why is this necessary you ask? Because without a regulatory scheme for this purpose then “fantasy sports games” start to look almost indistinguishable from “illegal Bingo games” through the lens of Alabama law. With so many uptight ‘conservatives’ who rend their garments at the thought of gambling, re-framing the argument with a more palatable window dressing is key. With the amount of money moving around with DraftKings, FanDuel and other online fantasy sports betting some states are starting to see the burgeoning industry as a potential source of tax revenue. However the state would probably make a better bet with reforms to and legalization and taxation of casino gaming. Alabama Church Protection Act by Rep. Lynn Greer – Alabama citizens already have a legal right to keep and bear firearms and it is already legally permissible to defend your life and the lives of others with deadly force under limited circumstances. The bill would “authorize the governing body of any church or place of worship to establish a security program by which designated members are authorized to carry firearms for the protection of the congregation of the church or place of worship.” Churches of course are already authorized to do this, but Rep. Greer’s church protection act extends additional legal protections to a church’s security force, provided the members of the security force are trained through a process regulated by the Alabama Law Enforcement Association.
Days numbered for death penalty reverses? A pair of bills HB32 (introduced by Democratic Rep. Chris England) and SB16 introduced by (Republican Sen. Dick Brewbaker) could spell the end of Alabama judges reversing a jury’s recommendation of life in prison to the death penalty. Under existing law, in a capital case, the jury may recommend to the court the sentence of a person convicted of a capital offense, but the court is not required to accept the jury’s recommendation. Both bills call for the judge to follow the jury’s recommendation in a capital case. England’s bill goes one step further requiring a unanimous vote of a jury to recommend death, under current law 10 of 12 jurors can move forward with a death sentence. A pair of cases last year in Federal court found the practice of judicial override for jury’s recommendation of life in prison in favor of a death sentence was unconstitutional in Delaware and Florida, the only other states who have not outlawed this practice. Another Federal case took exception to non-unanimous death sentences. Last year the Supreme Court of the United States sent back three death-penalty cases to lower courts for reconsideration. With Alabama already in hot water with the Feds over prison conditions (see elsewhere) SCOTUS and 11th Circuit Court could have a lot more to say about Alabama justice in the coming year.
I Was on the National Security Council. Bannon Doesn’t Belong There.
In his first weeks in office, President Trump has outlined plans to reorganize the White House’s National Security Council. This is in keeping with tradition: New presidents regularly reconfigure the council to fit their management style and national security priorities. Some of Mr. Trump’s plans, such as including the director of the C.I.A. as a full voting member of the council, are welcome. But some of Mr. Trump’s other plans are unsettling and should be remedied as soon as possible — in particular the role he has given to his top political adviser, Stephen K. Bannon. What’s more, according to Mr. Trump’s plans for the National Security Council, neither the chairman of the Joint Chiefs of Staff, the nation’s highest-ranking military officer and the president’s primary military adviser, nor the director of national intelligence, the president’s primary intelligence adviser, will be a permanent member of the council’s “principals committee,” a core group responsible for formulating policy. President George W. Bush’s council, on which I served from 2007 through 2009 as chairman of the Joint Chiefs of staff, was arranged similarly to Mr. Trump’s. But it bears noting that under President Obama, both the director of national intelligence and I were permanent members of the principals committee, codifying the importance of these positions. In my experience there are very few — if any — meetings of the principals committee at which the input of the military and the intelligence community is not vital. With an increasingly belligerent Russia, tensions in the South China Sea and a smoldering Middle East, it makes little sense to minimize the participation of the professionals leading and representing these two groups. More:
Why We’re Calling for Congress to Impeach Donald Trump
Nelson is a retired Justice of the Montana Supreme Court and a member of the Legal Advisory Committee for Free Speech For People. Bonifaz is the co-founder and president of Free Speech For People.
Never heard of the foreign-emoluments clause? You’re not alone. It’s tucked away in Article I, Section 9, of the Constitution. It’s clause number 8. It states, in pertinent part: “… no person holding any Office of Profit or Trust under [the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office or Title of any kind whatever, from any King, Prince or foreign State.”
This clause was included in the Articles of Confederation and, later, in the Constitution itself. It was borne out of the Framers’ obsession with preventing in the newly minted United States the sort of corruption that dominated 17th and 18th century foreign politics and governments — characterized by gift-giving, back-scratching, foreign interference in other countries and transactions that might not lead to corruption but, nonetheless, could give the appearance of impropriety. Where Trump runs afoul of the foreign-emoluments clause is that, first and foremost, he is a businessman with significant financial interests and governmental entanglements all over the globe. Indeed, as Norman Eisen, Richard Painter and Laurence Tribe stated at the Brookings Institution, “Never in American history has a [President] presented more conflict of interest questions and foreign entanglements than Donald Trump.” Moreover, Trump’s businesses dealings are veiled in complicated corporate technicalities and lack transparency. More:
Dear Republican voter,
You’re a fool. I say that in the nicest possible way. I say that with a tone of pity, instead of a tone of condescension. I say that because I want to help you, and in turn help all the rest of us. But mostly I say it because you’ve been tricked time and again – like a bunch of Charlie Browns trying to kick the same football – into believing that the shiny, controversial, fringe issue is of utmost importance and should take all of your focus while the other boring, policy stuff should be left up to the lawmakers who have your interest at heart. Those lawmakers have played you for a fool. If you doubt this, take just a moment and do one thing for me. Look around you. Take a long, hard look at the state where you live. Look at the poverty. Look at the poor-performing schools. Look at the lack of hospitals and doctors. Look at the lack of quality jobs. Look at the crumbling infrastructure. Look at the jam-packed prisons. Look at the budget shortfalls. Look at the undrinkable tap water and unfishable rivers. Look at it all. Now, ask yourself how it got that way. It sure didn’t come from progressive, liberal governance, because we’ve never had that. And it sure hasn’t come from a focus on the real issues. Nor has it come because our lawmakers have ever once focused specifically on what’s good for the average Alabamian instead of on what’s good for the wealthy Alabamian. And the way they have been able to get away with this top-level mooching for so long is simple: Distraction. It’s the oldest con game in the book. Distract with movement or shiny objects over here while you pull off the trick over there. There have been a steady flow of distractions for years: civil rights, gay marriage, abortion, immigration. This session of Alabama’s legislature will be no different. You can see it in the pre-filed bills and the Republican agenda. (I’d mention the Democratic agenda, but it’s simply to remain irrelevant, so there’s no point.) There are the usual bills targeting abortion laws, which usually wind up only costing us hundreds of thousands of dollars to unsuccessfully defend in court. The GOP agenda calls for more of the abortion bills, and it pushes others on immigration and protecting Confederate memorials. Here’s what’s not in that agenda and not in any pre-filed, Republican legislation: ideas for fixing the state’s crumbling health care industry, ideas for properly funding government for an extended period without cutting necessary services or ideas for repairing the infrastructure issues.
Look, you can be as passionate as you want about abortion, immigration, gay marriage, minority voting rights and guns, but none of those things are going to be solved by any bill that passes in this state. Those are federal issues. So, while passing a “right to life” amendment might make you feel good, it’s actually doing the opposite. Because while you were allowing our lawmakers to focus on that nonsense, real health care issues, like funding Medicaid, were going unaddressed. And believe it or not, that matters to you. Even if you don’t know anyone on Medicaid, it matters. Because when those who live around you are unable to get decent, basic care, and their simple illnesses cause complicated illnesses, you wind up paying more, the businesses around you lose their employees and pay more in insurance costs and a family that relies on the labor of that person loses its breadwinner. These are things that should matter to you. These are the things that should drive you to elect better, smarter, more honest people. But they don’t. Time and again, you fall for the shiny ball trick, and we wind up with a bunch of crooks who just keep lining their own pockets at our expense. And it makes us all look like fools. Do better, Josh Moon
FSOC CLASH AHEAD? — A former Treasury staffer notes to MM that President Trump’s executive action on financial regulation directs the Treasury secretary to consult with members of the Financial Stability Oversight Council and report within 120 days on regulations that might violate a series of “core principles.”
That means the report could come around the same time that FSOC typically releases its annual report that usually includes emerging potential risks to the financial system. Non-political, professional staff members are already hard at work on that report.
So will the new Treasury team, once there is a confirmed secretary, try and slow down that work? Or influence the results so they don’t conflict with the separate report to the president intended to lessen or simply existing regulations? “It raises a whole bunch of questions. Will they put blinders on about risks to the financial system?” the source asked.
CORPORATE BACKLASH TO TRUMP GROWS — POLITICO’s Ben White and Tony Romm: “The resistance to President Donald Trump’s agenda is spreading fast across corporate America. Technology giants like Google and Facebook are leading the movement. But more traditional American brands like Budweiser, Coca-Cola and 84 Lumber used the Super Bowl, watched by more than 100 million people, to brand themselves in sharp contrast to Trump’s nationalist agenda on immigration and trade.
“An early calculus is developing around American board rooms from Silicon Valley to the heartland to New York: While taking on Trump risks sparking anger from an irascible and highly voluble president, staying quiet and potentially alienating customers and employees could be much worse in the long run.” Read more.
MORE ON THE TECH BLOWBACK from Tony here.
SCARAMUCCI BACK IN? — NYPost’s Josh Kosman: “Anthony Scaramucci’s bid to work at the White House isn’t dead yet — and it may get a new lease on life from Stephen Schwarzman. Wall Street insiders say ‘The Mooch’ may find a surprise advocate in Schwarzman, the New York-based buyout king, as he fields questions from the Trump administration over his business dealings with a China-based investment firm.
“That’s partly because Schwarzman’s private-equity firm, Blackstone Group, cut a deal last October with the same Chinese outfit, HNA Group, to sell a 25 percent stake in Hilton Worldwide Holdings for $6.5 billion. HNA attracted scrutiny last month when, along with the little-known firm RON Transatlantic, it agreed to buy Scaramucci’s hedge fund, SkyBridge Capital, for more than $200 million.” Read more.
ANOTHER Q1 SLOWDOWN AHEAD? — The first growth numbers for the Trump era will certainly matter. And they may not be great. Pantheon’s Ian Shepherdson: “Two factors … suggest that we should be skeptical, at least, of the idea that headline GDP growth will be robust in the first quarter … First, the drop in January auto sales and the very warm weather, relative to seasonal norms, mean that real consumption very likely fell outright in the first month of the quarter …
“Second, the long-standing problem of the first quarter seasonal adjustments appears to linger. Reported growth in the first quarter has undershot the average pace for the previous three quarters in six of the past eight years, with a median gap of 2.2 percentage points … That’s more than enough to make a meaningful difference to perceptions of the strength of the economy.”
PUZDER HAS A NANNY PROBLEM — HuffPo’s Ryan Grim: “Trump’s nominee to run the Department of Labor, Andrew Puzder, employed an undocumented immigrant as household help, Puzder has informed members of the administration and officials in the Senate involved in his confirmation process.
“Hiring undocumented workers has sunk nominees in the past, particularly when it reflects directly on the scope of the Cabinet position. But Trump transition officials told Puzder that the previous rules for vetting and strict ethics no longer applied. ‘The view in the transition was that’s the old model,’ said one GOP official involved with Puzder’s nomination.” Read more.
HuffPo’s Sam Stein tweets: “Andy Puzder’s hearing has been postponed again, the HELP committee announces.”
REACT — Allied Progress’s Karl Frisch: “Late tonight we learned that the GOP Senate has delayed Trump Labor nominee Andy Puzder’s confirmation hearing for a FIFTH TIME with no explanation. What are they hiding? Each time this hearing is delayed, we’ll send this statement out just like we did after the third and fourth delay.”
DAILY SAY WHAT? — POLITICO’s Annie Karni, Josh Dawsey, and Tara Palmeri have a jaw dropper on Trump being upset by the goofy (and hilarious) Melissa McCarthy spoof of WH press sec Sean Spicer: “More than being lampooned as a press secretary who makes up facts, it was Spicer’s portrayal by a woman that was most problematic in the president’s eyes, according to sources close to him.
“And the unflattering send-up by a female comedian was not considered helpful for Spicer’s longevity in the grueling, high-profile job, where he has struggled to strike the right balance between representing an administration that considers the media the ‘opposition party,’ and developing a functional relationship with the press.” Read more.
MM doesn’t really have words for how weird this is.
STOCKS WOBBLE — Reuters: “Appetite for Asian stocks and the euro ebbed on Tuesday as a rising tide of economic and political concerns added to anxiety … Overnight, both U.S. and European stocks dropped. Wall Street dipped as much as 0.2 percent, led lower by the energy sector as oil prices fell, with investors still waiting for details of … Trump’s economic policies.
“Declines in European shares came on the heels of the French presidential campaign launch of far-right National Front Leader Marine Le Pen on a platform pledging to fight globalization and take France out of the European Union.” Read more.
TRUMP BARRED FROM U.K. PARLIAMENT — Bloomberg: “Trump must not be allowed to address the U.K. Parliament during a state visit to Britain, House of Commons Speaker John Bercow said. Prime Minister Theresa May invited Trump to visit the U.K., but there have been calls by lawmakers not to give the president the honor of addressing both houses of Parliament after he introduced a ban on people from some majority-Muslim countries traveling to the U.S. …
“Trump’s predecessor, Barack Obama, and world leaders including Nelson Mandela, Angela Merkel and Pope Benedict XVI have all been invited to speak to members of the House of Commons and the House of Lords. The White House did not respond to a request for comment on Bercow’s announcement.” Read more.
DRIVING THE DAY — San Francisco appeals court at 3:00 p.m. Pacific time hears oral arguments in the case of the State of Washington vs. Trump that essentially halted the administration’s travel ban. The arguments are expected to be made by phone and web cast … House Financial Services has an organizational meeting at 10:00 a.m. …. International trade at 8:30 a.m. expected to show deficit unchanged at $45.0B … The Hamilton Project at Brookings holds a forum on “Identifying a Fiscally Responsible Approach to Funding Infrastructure” at 8:30 a.m.
PAY RULE TARGETED BY SEC — WSJ’s Andrew Ackerman: “The acting head of the [SEC] is quickly targeting rules long-loathed by the business community, moving for the second time since Inauguration Day to ease some Dodd-Frank financial-overhaul requirements.
“Republican Michael Piwowar, who took over shortly after the inauguration, signaled Monday that the commission would take a fresh look at new requirements that companies disclose the pay gap between chief executives and their employees. The move shows the extent to which officials under the Trump administration could press at the agency level to ease Obama-era initiatives they oppose without waiting on Congress to act.” Read more.
KLARMAN WARNS ON TRUMP — NYT’s Andrew Ross Sorkin: “He is the most successful and influential investor you have probably never heard of. His writings are so coveted and followed by Wall Street that a used copy of a book he wrote several decades ago about investing starts at $795 on Amazon, and a new copy sells for as much as $3,500.
“He is Seth A. Klarman, the 59-year-old value investor who runs Baupost Group, which manages some $30 billion. In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing
‘perilously high valuations.’
“‘Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,’ he wrote.” Read more.
TRUMP TEAM TRIES TO MEND FENCES ON HILL — POLITICO’s Josh Dawsey, Shane Goldmacher, Eli Stokols, and Matthew Nussbaum: “Kellyanne Conway, one of … Trump’s most prominent aides, trekked to Capitol Hill Monday morning on a diplomatic mission – to reassure the 100 or so Senate GOP communications staffers that Trump has no intention of acting unilaterally with a pen and a phone, while neglecting Congress.
“Instead, a number of aides were left wondering if the White House is truly hearing their concerns. After touting last week’s smooth rollout of Supreme Court nominee Neil Gorsuch, Conway faced questions about the tens of thousands of calls and emails that GOP senators have received about education secretary nominee Betsy Devos.” Read more.
LENDING CLUB’S LEGAL BATTLE — POLITICO Pro’s Colin Wilhelm: “Moody’s ratings service says a victory by Lending Club in a legal battle with borrowers is a ‘credit positive’ for the business model used by marketplace lenders.
“A judge in the Southern District of New York granted the marketplace lender’s motion to compel arbitration and stay a class action lawsuit brought by borrowers against the lending site and its partner bank, the Utah state-chartered WebBank.” Read more.
JUDICIAL OVER-REACH? — FT’s Barney Jopson: “Trump’s legal battle over a controversial travel ban will move to an appeals court hearing on Tuesday where his administration will argue that a judge’s injunction against it was ‘vastly overbroad’.
“A federal appeals court in San Francisco said it would hear testimony in the case on Tuesday afternoon as ructions over the ban dominate the early weeks of the Trump presidency.” Read more.
TRUMP VS. CORDRAY — POLITICO Pro’s Lorraine Wollert and Josh Dawsey report: “Allies of … Trump are building a legal case for ousting Richard Cordray, the director of the Consumer Financial Protection Bureau who one court called ‘the single most powerful official’ in government after the president.
“Cordray has long been in the crosshairs of free-market conservatives and lawyers, and now some are informally compiling a dossier that would give Trump cover to fire him, should he choose to do so, for ‘inefficiency, neglect of duty, or malfeasance.’ Those are the only conditions under which the director can be removed.” Read more.
IF MM HAD A NICKEL … for every day we hear rumors that Cordray’s firing is imminent … well, we’d have a bag of nickels.
A MORE CAUTIOUS TONE — Bloomberg’s Julie Verhage reports: “‘Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration,’ Goldman Sachs Group Inc. economists led by Alec Phillips wrote in note published late last week.
“‘One month into the year, the balance of risks is somewhat less positive in our view.’ Goldman’s Phillips cites three key reasons for the more cautious tone.” Read more.
BAN HITS BUSINESS TRAVEL — NYT’s Martha White: “The Trump administration’s executive order on Jan. 27 barring citizens of seven Muslim-majority nations from entering the United States has had diplomatic and legal reverberations. But the order hit much closer to home for the professionals who oversee and coordinate everything from small board meetings to huge conventions in the increasingly global business of corporate travel.”
“A quick survey by the Association of Corporate Travel Executives, conducted three days after the executive order was issued, found that the repercussions in the business travel community were swift. Nearly four in 10 executives said the travel ban would curtail their company’s business travel.” Read more.
DRAGHI PUSHES BACK — FT’s Claire Jones: “Mario Draghi has pushed back against the new US administration on issues ranging from financial regulation and protectionism to the valuation of the euro, underlying the scope for transatlantic discord as … Trump’s team advances its America First agenda.
“In a question-and-answer session with the European Parliament, the European Central Bank president registered his concern at the White House’s plans to roll back the US’s 2010 Dodd-Frank financial regulations and Mr Trump’s hostility to multilateral trade deals.” Read more.
“WALL STREET FIRST” AGENDA — POLITICO Pro’s Zachary Warmbrodt: “House Democrats today blasted Republican plans for undoing the 2010 Dodd-Frank law but said they were still willing to revisit financial regulations for small banks and credit unions.
“House Minority Leader Nancy Pelosi and Financial Services Committee ranking member Maxine Waters said … Trump was pursuing a ‘Wall Street first’ agenda, after the administration on Friday released executive orders that opened the door to further deregulation.” Read more.
GOLDMANS BILLION-DOLLAR DISPUTE — Reuters’ Eveline Danubrata: “Indonesia will hold a court hearing on Tuesday into a billion-dollar dispute between Goldman Sachs and a local tycoon, who says the Wall Street giant’s unit unlawfully sold shares he owned, in the latest test for the country’s legal system.
“Goldman took the unusual step of counter-suing the tycoon – Benny Tjokrosaputro – for reputational damage. The hearing on Tuesday will give the retail-to-property businessman a chance to rebuff Goldman’s assertion.” Read more.
FOX PROFIT JUMPS — WSJ’s Keach Hagey: “21st Century Fox Inc. posted a 27 percent increase in profit for the most recent quarter, driven by stronger advertising and affiliate fees at its broadcast and cable-television segments.
“After years of being a laggard, the Fox network was the star of the quarter, thanks to strong advertising revenue from sports events such as the World Series, higher spending on political advertising and higher fees from distributors. The broadcaster helped push television segment revenue up 12% in the quarter. Politics and sports also helped boost revenue and profit at the cable division, home to Fox News and the FS1 sports network.” Read more.
VIOLA GOES SILENT — Via DefenseNews on high-Frequency trading billionaire Vincent Viola’s dropping out for Secretary of the Army: “[A]ccording to sources close to the process, there was little to no pre-vetting for Trump’s service secretary picks.'” Read more.
9:00 am || Recieves his daily intelligence briefing
9:30 am || Meets with county sheriffs; Roosevelt Room
10:45 am || Meets with Veterans Affairs officials; Roosevelt Room
1:30 pm || Meets with House Oversight Committee Chairman Rep. Jason Chaffetz, R-Utah
3:00 pm || Meets with Secretary of State Tillerson
5:00 pm || Hosts Green Berets Qualification Course Young Officers
The House meets at 10 a.m. with first votes at 1:30 p.m. and last votes around 5:15 p.m. Today’s agenda: http://bit.ly/2kI8E8K. The Senate holds a vote around 12 p.m. on DeVos’ Education secretary nomination.
Early Withdrawals from Retirement Plans
Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:
More information on this topic is available on IRS.gov.
Twenty years before Vladimir Putin began his ingenious campaign to influence the U.S. presidential election, his predecessor as Russia’s president stood on a dark street near the White House. In his underpants. Looking for a pizza. It was September 1994, and Boris Yeltsin was in Washington for a state visit with his new friend, President Bill Clinton. The Soviet Union had collapsed just three years earlier, and a relationship was blossoming between the U.S. and Russia, one that held the promise of burying decades of hostility. Russia’s abrupt transition from communist dictatorship was chaotic, but a fragile democratic process and nascent capitalism were taking hold. U.S. officials entertained visions of a Western-friendly Russia as a partner in a stable and secure Europe. To that end, Clinton and Yeltsin had built an alliance on the shared goal of preventing a revanchist security state from taking power in Moscow and returning the U.S. and Russia to a Cold War state of hostility. During one early visit to Moscow, Clinton told a young audience to “choose hope over fear” and “find a new definition of Russia’s greatness.” Rarely had an American and a Russian leader been so chummy. Clinton and Yeltsin were buddies, two lovable rascals with big appetites. But something else was different as well: For the first time in decades, Russia was the obvious number two in the relationship. Stripped of its Iron Curtain puppet states, its economy in tatters and its military breaking down, Russia was a shrinking, messy place. And its president was becoming an embarrassment. A presumed alcoholic, Yeltsin would often lose his balance in public, sending aides scurrying to prop him back up. In one slurred telephone conversation with Clinton, the Russian proposed that the men hold a secret meeting on a submarine. But nothing could top that fall night in 1994. While staying at Blair House—the guest residence for visiting foreign dignitaries across Pennsylvania Avenue from the White House—Yeltsin slipped past his security, stumbled down the stairs and stepped onto the street. “Pizza! Pizza!” he blurted at the Secret Service agents who intercepted him. (There are two versions of the story: In one that Clinton himself told to a biographer, Yeltsin is on the street; in another, he’s stopped before he makes it out the door.) More:
How a Putin Fan Overseas Pushed Pro-Trump Propaganda to Americans
The Patriot News Agency website popped up in July, soon after it became clear that Donald J. Trump would win the Republican presidential nomination, bearing a logo of a red, white and blue eagle and the motto “Built by patriots, for patriots.” Tucked away on a corner of the site, next to links for Twitter and YouTube, is a link to another social media platform that most Americans have never heard of: VKontakte, the Russian equivalent of Facebook. It is a clue that Patriot News, like many sites that appeared out of nowhere and pumped out pro-Trump hoaxes tying his opponent Hillary Clinton to Satanism, pedophilia and other conspiracies, is actually run by foreigners based overseas. But while most of those others seem be the work of young, apolitical opportunists cashing in on a conservative appetite for viral nonsense, operators of Patriot News had an explicitly partisan motivation: getting Mr. Trump elected. Patriot News — whose postings were viewed and shared tens of thousands of times in the United States — is among a constellation of websites run out of the United Kingdom that are linked to James Dowson, a far-right political activist who advocated Britain’s exit from the European Union and is a fan of President Vladimir V. Putin of Russia. A vocal proponent of Christian nationalist, anti-immigrant movements in Europe, Mr. Dowson, 52, has spoken at a conference of far-right leaders in Russia and makes no secret of his hope that Mr. Trump will usher in an era of rapprochement with Mr. Putin. More:
BP to Invest $1 Billion in Gas Field Off Coast of Northwest Africa
BP PLC will invest nearly $1 billion in a vast natural gas field off the coast of northwest Africa, a sign that major energy companies continue to scour the world for opportunities to pump more even as they recover from one of the worst oil and gas price crashes in decades. The agreement with exploration company Kosmos Energy Ltd. of Dallas calls for BP to pay more than $900 million in the coming years to help test the viability of the Tortue prospect in waters off Mauritania and Senegal. By some estimates, the field could hold as much as 50 trillion cubic feet of natural gas. That is enough to meet demand in the United Kingdom for about 20 years, according to the U.S. Energy Information Administration. The deal also makes BP the operator of the project, giving the British oil giant another potential growth opportunity in its portfolio as two years of low energy prices and cost-cutting have reduced the number of new drilling frontiers. Funding from BP will be used for further drilling, as well as feasibility studies and development costs that should put BP and Kosmos in a position to make a final investment decision on the project by 2018, according to Kosmos. More:
Digital currency sales take off, but with no regulation questions abound
A small, but rapidly growing number of digital technology start-ups is raising cash by creating and selling their own currencies in offerings that bypass banks or venture capital firms as intermediaries and are outside the reach of financial regulators. Investors are being drawn in on hopes that such “initial coin offerings” will match or exceed the performance of the first digital currency, bitcoin. For the sellers, the appeal of selling their own currencies, or tokens, to raise cash is enormous. There is no paperwork as would be required for a public securities sale. But the lack of regulatory oversight is raising red flags among some market experts and financial technology lawyers, some of whom even question the legality of the tokens. Joe Zhou says he needed just 58 seconds to sell enough tokens to meet the roughly $5.5 million fund-raising target for FirstBlood, the online gaming website he co-founded. “We had expected the sale to run for a month and we even gave the people who participated early-bird discounts because we were not sure how it would go,” Zhou said. The tokens sold by FirstBlood, like those sold by other companies, are the currency required to play games on the platform, for instance, or claim rewards for referrals. For FirstBlood, a distinct advantage to having its own currency was to give gamers complete control over their funds, with no intermediaries such as banks involved, and with encryption features protecting against hacks. The transactions are accounted for using blockchain, a ledger of transactions that first emerged as the software underpinning bitcoin and is maintained by a network of computers on the internet. Blockchain has gained traction on both Wall Street and Main Street, encouraged by the technology’s ability to record and track the movement of assets.
China Says Trump’s Description of Drone Seizure as Theft Is ‘Inaccurate’
BEIJING—China’s Foreign Ministry said Monday that military officials are in touch with the U.S. over the return of an American undersea drone and dismissed President-elect Donald Trump’s criticism of the Chinese navy’s seizure of the device. Hewing to statements issued over the weekend by China’s Defense Ministry, Foreign Ministry spokeswoman Hua Chunying described Thursday’s seizure as an effort by the Chinese navy to “prevent harm” to vessels freely and safely moving in the area. “The Chinese side inspected it, found that it belongs to the U.S., and decided to hand it back,” Ms. Hua told reporters at a regular briefing. She said both countries’ militaries “are in smooth communications, and we believe this incident will be properly handled.” The Pentagon says the U.S. Navy drone was gathering oceanographic data when it was captured in international waters in the South China Sea. That location suggests the incident occurred outside the waters China claims belong to it. As such the seizure marks an escalation of Beijing’s efforts to block U.S. naval surveillance and adds to recent tensions over Taiwan and trade. Asked if the drone was spying on China, Ms. Hua sidestepped, saying, “We have always opposed long-term survey and reconnaissance by U.S. vessels in waters facing China, as this threatens Chinese sovereignty and security.” In Twitter posts over the weekend, Mr. Trump twice characterized China’s seizure as stealing, saying on Saturday “China steals U.S. Navy research drone,” and on Sunday that “we should tell China that we don’t want the drone they stole back.” Ms. Hua described the president-elect’s characterization of Beijing’s actions as “wholly inaccurate.”
Mnuchin’s Ultra-Long Bond Idea Is an Ultra-Longshot for Treasury
Ultra-long U.S. Treasuries look like an ultra-longshot. That’s the message from traders, strategists and even duration-starved bond investors about the potential for 50- or 100-year U.S. obligations. Steven Mnuchin, President-elect Donald Trump’s pick for Treasury Secretary, said he’d “take a look at everything,” in response to a question about those maturities in a Nov. 30 CNBC interview. The remarks sent 30-year U.S. bonds into a tailspin, even though the Treasury has persistently slapped down the notion. The move sounds reasonable in theory: Long-term interest rates are near record lows, and other countries have issued maturities of 50 or more years, though not necessarily on a regular basis. But for the U.S., that approach carries risk: The predictability of the nation’s debt auctions lures investors and lowers borrowing costs. What’s more, the average maturity of the world’s biggest bond market is already set to reach historic highs. “Treasury has built up a very good reputation as a predictable, reliable issuer that doesn’t play games with the yield curve — investors like that,” said Aaron Kohli, an interest-rate strategist in New York at BMO Capital Markets, one of the Federal Reserve’s 23 primary dealers. “If you lose that, you issue the 50-year because it’ll make people happy, that’s not something that’s really going to be a strong positive in the long run.” The Treasury says regular issuance has been a “pillar” of its debt management since the 1970s. This month, Daleep Singh, assistant secretary for financial markets, reiterated the importance of that stance at a presentation at Columbia University. “Treasury does not face a one-time issuance decision,” Singh said in prepared remarks. “What would be the effects of an abrupt cancellation of a 50-year bond issuance, or the program itself, on the credibility of Treasury as a regular and predictable issuer?” More:
California Employee Pension Will Consider Cutting Return Assumption
Calpers may be getting a bit more real. The $300 billion California public employees’ pension manager is considering cutting its investment return assumption. The move would squeeze the budgets of public authorities and employees, but secure funding for retirees. If the American government pension bellwether can do it, others will follow. Public pension funds in the United States have long relied on unrealistic investment assumptions, but the financial crisis and lackluster market performance have exposed that game. Calpers took a small step in 2012 by lowering its return assumption by 0.25 percentage point, to 7.5 percent, but the fund generated a return of just 0.61 percent in the 12 months that ended June 30. Annualized returns were 5.1 percent over the last 10 years. Ted Eliopoulos, the chief investment officer, has overhauled the fund’s portfolio since taking over two years ago, slashing the hedge fund allocation and awarding fewer, but bigger, mandates to outside managers. Those moves are not sufficient to close the gap for a retirement system that has only 76 percent of the assets needed to ensure current retirement benefits to its members. The Calpers board will next week consider a plan to reduce the return assumption to as low as 7 percent. The cost to employers would be phased in over five years, with the pension contributions of state and local governments rising by as much as $2 billion a year in the fifth year. For employees, the hit could be another percentage point or more in payroll deductions. More:
How Not to Build a Supermall: $5 Billion, 5 Governors, 3 Developers, and 15 Years
Chris Christie once called American Dream “the ugliest damn building in New Jersey.” Will it ever open? Don Ghermezian wants to pitch us on the American Dream, but he has a few conditions. First, we’re not allowed to record his eight-minute presentation. Second, we can ask him only a few questions, at the end. Third, if they’re about his family, he won’t say much. “This is a $4.8 billion project that will be the center of the universe,” he says, promising we’ll be impressed. If not, “you’ll be the first ever to leave here without thinking, ‘Holy shit. These guys are incredible.’ ” Ghermezian is speaking in the New Jersey Meadowlands offices of Triple Five, a family business that owns North America’s two biggest shopping centers: West Edmonton Mall and Mall of America. Triple Five are the incredible guys in question; Ghermezian is the company’s president. The future center of the universe is across the turnpike, a 91-acre tract of filled-in wetlands now home to a structure Governor Chris Christie, something of an expert on dismal spectacles, called “the ugliest damn building in New Jersey, maybe America.” The first thing Ghermezian means for us to understand is that his family isn’t building a mall. Online shopping is killing malls; American Dream is one of only two in the country being built from the ground up. Its extravagant attractions make it “internet-proof,” says Ghermezian, who is in his 40s and wears a big watch and expensive sneakers. Beyond its 450 shops and restaurants, half of the 3 million-square-foot complex will be devoted to entertainment: a DreamWorks water park, a Nickelodeon theme park, a Legoland, a ski slope, an aquarium, a performing arts space, a movie theater, an ice rink, a miniature golf course, and a kosher food hall, all enclosed in a glass bubble. More:
The Vampire Squid Occupies Trump’s White House
After running against Goldman as a candidate, Donald Trump licks the boots of the world’s largest investment bank. Back on February 19th, during a primary-season speech in Myrtle Beach, South Carolina, Donald Trump directed a two-pronged rhetorical offensive against opponents in both parties. He started with Ted Cruz. Cruz’s campaign, Trump pointed out, had taken loans from the infamous investment bank Goldman Sachs. And he’d failed to properly disclose one of these loans. “I know the guys at Goldman Sachs. They have total, total control over [Cruz],” Trump said. “Just like they have total control over Hillary Clinton.” Trump demonized the bank enough that it almost seemed like genuine animosity existed between candidate and squid. When Goldman announced in September that it was banning employees from donating to Trump’s campaign, it seemed official. In October, Trump was even more specific in pointing the finger at Goldman. Referencing speeches Clinton gave to Goldman, Trump said that “Hillary Clinton meets in secret with international banks to plot the destruction of U.S. sovereignty in order to enrich these global financial powers, her special interest friends and her donors.” Trump’s tales sounded like classic Rothschild/Bilderberg conspiracy lore. They would have been absurd, were it not for the fact that so much of the innuendo around Goldman Sachs often turns out to be true.
The bank has an extraordinary history of placing its executives in high-ranking governmental and quasi-governmental positions, from treasury secretaries to senators to the heads of the World and European Central Banks. Goldman has been implicated in the trafficking of toxic mortgages, a sprawling state corruption case in Malaysia, the manipulation of world commodity prices and a heinous episode involving Greece in which the bank helped to mask the country’s ballooning debt while simultaneously working with JPMorgan Chase to create an index for betting against Greece’s economy. Nonetheless, Trump’s insinuations about a Goldman-Hillary secret conspiracy were so pointed that CEO Lloyd Blankfein was forced to respond. “If there’s some secret international cabal, I’ve been left out of the party again,” he quipped. In his final pitch to voters in the days before the election, Trump used the image of Blankfein in a TV ad to argue that insiders had ruined the lives of ordinary Americans to enrich themselves. Here is the narration you heard when Blankfein’s face came on screen: “It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.” One surprise election result and a mountain of jubilant #draintheswamp hashtags later, Donald Trump has filled his White House with, you guessed it, Goldman veterans. His chief strategist, the unabashed white-supremacist loon Steve Bannon, is a former Goldman banker, as is adviser Anthony Scaramucci. Steve Mnuchin marks the fourth Goldman-pedigreed treasury secretary in the last four presidencies, after Bob Rubin, Lawrence Summers and Hank Paulson. But the real shocker is the recent appointment of Goldman Chief Operating Officer Gary Cohn to the post of director of the National Economic Council. Bannon and Mnuchin were former, past Goldmanites. Cohn, meanwhile, is undoubtedly at least the number-two figure at the world’s most despised bank, if not the outright co-head with Blankfein. He has been at the center of many of its most infamous episodes, including the Greek affair. So much for draining the swamp. More:
The shipping industry is poised for massive upheaval. Can FedEx weather the storm?
MEMPHIS — Between 10 and 11:30 p.m., as most of this city is winding down for the night, the FedEx Express World Hub is revving up for its busiest hours of the day. Some 10,000 workers pour into the campus, ready to begin a mind-bogglingly complex ritual of steering packages to customers’ doorsteps on time. Hundreds of equipment operators zoom around the 880-acre site on warehouse tugs, pulling behind them trains of silver shipping containers shaped like half-igloos. In an earsplitting operation dubbed “the matrix,” package sorters corral boxes into a single-file line for a trip down a tangle of conveyor belts.
On this particular night at FedEx’s largest global facility, workers will sort some 1.3 million express packages. That number only swelled when holiday shopping kicked into high gear. This logistical symphony has been decades in the making, the product of billions of dollars in investment in automated sortation systems and Boeing 767 cargo jets. During the peak hours on this night, air traffic controllers in the Tennessee city will usher in about 150 flights, an average of one every 40 seconds. Analysts say infrastructure such as this makes FedEx and its rival, UPS, extremely difficult to dislodge from their thrones atop the U.S. shipping industry. And yet as dominant as they are, the stalwarts are also vulnerable, facing a fresh wave of potential disruption. More:
House conservatives’ sweeping plan for Trump’s first 100 days, explained
Thursday morning, the House Freedom Caucus, the main group representing the far right of House Republicans, released an ambitious regulatory — or, really, deregulatory — agenda for the Trump administration to pursue. It consists of a detailed, agency-by-agency list of regulations, mostly imposed during President Obama’s administration, that it would like to see repealed or rolled back. The Trump administration likely won’t do 100 percent of what’s on the menu here, but in his Cabinet appointments Trump has largely assembled a team of down-the-line conservatives, so it’s a good look at the direction policy is likely to take. For your reading pleasure, we’re providing a summary of the main highlights, organized by topic rather than by agency, since citizens are probably more interested in what’s going to be changing than in how the bureaucratic boxes line up. To get a flavor for what’s in store, there is one line in the extensive document really worth reading. The Freedom Caucus places each of 228 regulations slated for elimination into a grid, one of whose columns is cost — and in most cases they do, indeed, provide an estimated cost of compliance with the regulation divorced from any discussion of the benefits. When it comes to Rule 211, network neutrality, however, they simply state: “All regulations carry costs, which are inevitably passed on to consumers in one form or another.” It’s not clear exactly where the Freedom Caucus got this idea or why they think it’s true, but as a broad philosophical statement it’s admirably clear and concise. The network neutrality rule’s proponents say that given the lack of competition in wireless broadband markets, requiring infrastructure owners to treat all internet traffic the same is useful in promoting competition among online services and minimizing infrastructure monopolists’ ability to extract monopoly profits. One might or might not agree with that analysis, but from a normal person’s point of view it would at least be a question worth asking. The Freedom Caucus view, by contrast, is that all you really need to know about Network Neutrality regulations — or any other kind of regulation — is that it is a regulation and all regulations, by definition, are costly. It’s simply not possible to imagine a rule that corrects for negative externalities, asymmetrical information, imperfect competition, myopia, or any other problem in a socially beneficial way. More:
Republicans charge forward with repeal of health care law, but few are eager to follow
WASHINGTON — As they race to repeal large parts of the Affordable Care Act, President-elect Donald Trump and congressional Republicans are leaving behind nearly everyone but their base voters and a handful of conservative activists. Not a single major organization representing patients, physicians, hospitals or others who work in the nation’s health care system backs the GOP’s strategy.
New polls also show far more Americans would like to expand or keep the health care law, rather than repeal it. Even many conservative health policy experts caution that the emerging Republican plan, which calls for a vote in January to roll back insurance coverage followed by a lengthy period to develop a replacement, could be disastrous. Intensifying the political risks for Republicans, a growing number of patient groups are warning that millions of Americans are in danger of losing vital health protections and that Republicans need to agree on a replacement plan before they uproot the current system.
“When people get cancer, they have to know that they are going to have insurance,” said Chris Hansen, president of the American Cancer Society’s advocacy arm. “There have been and are problems with the ACA, but we have to make sure that what is done and the way it is done is not going to leave people who have cancer or who may get cancer … in the lurch.” The American Cancer Society Cancer Action Network last week sent a letter to congressional leaders urging them not to repeal large parts of the health care law without first developing replacement legislation that guarantees patients the same protections. GOP leaders, who have repeatedly promised their core voters that they would repeal the law, oppose any delay in a vote, despite the risk that Republicans may be held responsible for any ensuing turmoil. They are pushing to pass a bill early next year that would repeal many key provisions of the law. That would include the money that has allowed states to expand their Medicaid safety nets and the billions of dollars in federal funds that have provided subsidies to low- and middle-income Americans to help with the cost of insurance premiums. More than 20 million Americans who previously lacked insurance have gained coverage under the law. “We have to bring relief to Obamacare as quickly as possible so that it stops doing damage, not just to the health care system but to the families of America who need affordable health insurance,” House Speaker Paul Ryan, R-Wis., told reporters at the Capitol last week. To minimize disruptions, senior Republicans want to delay when the cuts would take effect. The idea is to buy time to allow the party to develop an alternative — something that GOP lawmakers have been unable to agree on in the six years since the law passed. More:
Senators call for panel to investigate Russian hacking
Four Senators on Sunday called for the creation of a bipartisan investigative panel that would investigate U.S. government allegations that Russia and other foreign countries tried to hack the U.S. elections.
U.S. Senator Charles Schumer of New York, the incoming Senate Minority Leader, said that he and Democrat Jack Reed of Rhode Island, Republicans John McCain of Arizona and Lindsey Graham of South Carolina would be issuing a joint letter about creating the committee.
Longtime Business Lobbyist Laments Loss of ‘Smoke-Filled Rooms’ in Washington
Sessions to African-Americans: Fear not
Jeff Sessions took a surprise trip to South Carolina last week at the behest of the Senate’s only black Republican. His allies talk up how Sessions locked arms with Rep. John Lewis (D-Ga.) to mark the 50th anniversary of Bloody Sunday in Selma, Alabama. And the senator, in a lengthy nominee questionnaire delivered this month, practically depicts himself as a civil rights hero. When the Senate takes up President-elect Donald Trump’s choice to be the nation’s next top law enforcement official in January, allegations of racism that have dogged Sessions for three decades running are certain to be his biggest liability. So he and his allies have mounted an aggressive public relations campaign to refashion Sessions’ image. The core message: The charges that sank Sessions’ bid to become a federal judge in 1986 don’t represent who Sessions is now, or even who he was at the time. Delivering it is a lineup of prominent black leaders and others with personal ties to Sessions enlisted by Trump’s transition team.
“He knows all of my brothers and sisters,” said one of the character witnesses, William Huntley, who worked under Sessions in the office of the U.S. Attorney for the Southern District of Alabama. Huntley, now a lawyer in Mobile, Alabama, said in an interview that he’s never encountered racial insensitivity from Sessions in the three decades they’ve known each other. “He came to the hospital when my first child was born,” Huntley said. “He has come to birthday parties at my house.” Liberal outside groups are unmoved. Alarmed by what they view as a weak legislative record on voting issues, gay rights and immigration policy, Sessions’ opponents are trying to litigate a broader case against him rather than focus solely on the racism questions. “Yes, it happened a long time ago. It’s certainly not irrelevant and it has to be raised,” said Christopher Kang, a former deputy counsel to President Barack Obama who now serves as national director for the National Council of Asian Pacific Americans. But “it has to be examined in the context of his entire career.”
A Majority of Republicans Think Donald Trump Won the Popular Vote, Which He Definitely Did Not
One thing we’ve all learned from this period of change after Election Day is that facts just don’t seem to be facts anymore. The only indisputable fact these days may now be the truth is now infinitely malleable, subject to whatever spin any outlet or public figure wants to put on it. On Election Day, we learned two facts: Donald Trump won the projected electoral college, but was beaten by Hillary Clinton in the popular vote by a margin that has now grown to nearly three million votes. Now, despite the numbers being readily available, even this has come into question among partisans, according to a new poll.
In a poll conducted for The Washington Post, firm Qualtrics surveyed a nationally representative slice of the country between December 6 and 12, asking the question, “In last month’s election, Donald Trump won the majority of votes in the electoral college. Who do you think won the most popular votes?” Of those surveyed, twenty-nine percent believed that Trump won the popular vote. However 52 percent of Republicans who responded to the survey believed he won the popular vote, as well as seven percent of Democrats and 24 percent of Independents. This discrepancy along party lines didn’t show up in other non-partisan questions on the survey, such as what percentage of the population is black or Latino. According to the Post, this can be explained using psychology: we all choose to believe facts that correspond with what we already believe. More:
Trump private security force ‘playing with fire’
GRAND RAPIDS, Michigan — President-elect Donald Trump has continued employing a private security and intelligence team at his victory rallies, and he is expected to keep at least some members of the team after he becomes president, according to people familiar with the plans. The arrangement represents a major break from tradition. All modern presidents and presidents-elect have entrusted their personal security entirely to the Secret Service, and their event security mostly to local law enforcement, according to presidential security experts and Secret Service sources. But Trump — who puts a premium on loyalty and has demonstrated great interest in having forceful security at his events — has opted to maintain an aggressive and unprecedented private security force, led by Keith Schiller, a retired New York City cop and Navy veteran who started working for Trump in 1999 as a part-time bodyguard, eventually rising to become his head of security. Security officials warn that employing private security personnel heightens risks for the president-elect and his team, as well as for protesters, dozens of whom have alleged racial profiling, undue force or aggression at the hands Trump’s security, with at least 10 joining a trio of lawsuits now pending against Trump, his campaign or its security. “It’s playing with fire,” said Jonathan Wackrow, a former Secret Service agent who worked on President Barack Obama’s protective detail during his 2012 reelection campaign. Having a private security team working events with Secret Service “increases the Service’s liability, it creates greater confusion and it creates greater risk,” Wackrow said. More:
How ‘Saturday Night Live’ managed to turn 2016’s chaos into TV gold
It’s an unusual time for late-night humor. Rarely has the news cycle been so ripe for comedic commentary and the landscape so saturated with options for viewers. “Saturday Night Live” has done well in that arena, airing a midseason finale on Saturday that concluded months of high ratings and critical praise.
SNL’s ability to skewer Donald Trump, book hotly anticipated hosts and attract weeks of hate-tweets from the president-elect himself have all boosted the show’s relevance. The sketch show successfully took advantage of a bizarre political climate that has brought its own record-shattering television ratings and, at times, has felt more like a reality show than the conclusion of a campaign season. Preliminary ratings show that SNL is on track to surpass last year’s numbers. That makes sense given that political humor has long served as the show’s staple material, and its most defining moments — Tina Fey as Sarah Palin, Will Ferrell as George W. Bush — have often come during election years. But this season also contrasts with last year, when “Saturday Night Live” ended up in a maelstrom of controversy for having then-candidate Trump on as host. That 2015 episode brought in record ratings and plenty of blowback, including concerns over whether SNL would break FCC rules on giving political candidates equal time on air. Protesters said the show’s producers and writers helped “normalize” Trump’s behavior during the primaries. More:
Donald Trump’s questionable intelligence: All those false claims about his academic record and derision of others bespeak profound insecurity
Donald Trump says he doesn’t need daily intelligence briefings. “I’m, like, a smart person,” he told Fox News’ Chris Wallace last weekend, explaining why he’ll be the first president since Harry Truman to avoid getting daily updates from intelligence professionals about national security threats. During and since his campaign, Trump has evoked these two themes. First, he’s skeptical of intelligence. Second, he’s smart.
The first is obviously true. The second is a matter of dispute. Trump frequently boasts about how smart he is. Anyone who feels compelled to tell everyone how smart he is is clearly insecure about his intelligence and accomplishments. In Trump’s case, he has good reason to have doubts. Trump has the kind of street smarts (what he calls “gut instinct”) characteristic of con artists, but his limited vocabulary, short attention span, ignorance of policy specifics, indifference to scientific evidence and admitted aversion to reading raise questions about his intellectual abilities. In 2004, in an interview with CNN, Trump said, “I went to the Wharton School of Finance. I got very good marks. I was a good student. It’s the best business school in the world, as far as I’m concerned.” Trump has repeated that claim many times since. Each time, it isn’t clear if he’s trying to convince his interviewer or himself. In 2011, in an interview with ABC, Trump said: “Let me tell you, I’m a really smart guy. I was a really good student at the best school in the country,” referring once again to Wharton, the University of Pennsylvania’s business school, where he earned a bachelor’s degree in 1968. “I went to the Wharton School of Finance,” he said during a speech in Phoenix in July of 2015. “I’m, like, a really smart person.” In an interview on NBC’s “Meet the Press” in August 2015, Trump described Wharton as “probably the hardest there is to get into.” He added, “Some of the great business minds in the world have gone to Wharton.” He also observed: “Look, if I were a liberal Democrat, people would say I’m the super genius of all time. The super genius of all time.” During a CNN-sponsored Republican town hall in Columbia, South Carolina, last February, Trump reminded the audience that he had gone to Wharton and then repeated the same boast: “Look, I went to the best school, I was a good student and all of this stuff. I mean, I’m a smart person.” Trump frequently communicates via Twitter, which is not a good venue for displaying one’s linguistic prowess, but many observers have noted that Trump has a difficult time expressing himself and speaking in complete sentences. A linguistic analysis last year by Politico found that Trump speaks at a fourth-grade level. A study by researchers at Carnegie-Mellon University compared this year’s Republican and Democratic presidential candidates in terms of their vocabulary and grammar. Trump’s scored at a fifth-grade level, the lowest of all the candidates. Some might suspect that this is not an intellectual shortcoming but instead Trump’s calculated way of communicating with a wide audience. But Tony Schwartz, who spent a great deal of time with the developer while ghostwriting his book “The Art of the Deal,” noted that Trump has a very limited vocabulary. It would hardly be surprising if these observations infuriated the vain and insecure Trump. More with links to school records.
Insiders say Bentley has chosen Sessions’ replacement
During a Cabinet meeting last week, Gov. Robert Bentley said that well over one hundred individuals were seeking the US Senate seat, soon to be vacated by Sen. Jeff Sessions. Several present at the meeting believed Bentley slyly tipped his hand as to which individual currently holds the inside track for the appointment. Insiders say the die was cast weeks ago, and the interviews that began last week are a perfunctory charade. Since President-elect Donald Trump tapped Sessions for US Attorney General, a legion of current and former lawmakers have been working contacts to convince Bentley that they deserve the position. Add to those numbers cabinet members, judges and assorted others and the field looks pretty crowded. State Senators Del Marsh, Cam Ward, Trip Pitman, and Arthur Orr are public contenders, as are current and former house members including Perry Hooper, Jr., the entire Alabama Congressional delegation is in the hunt as well as ADECA Chief Jim Byard, Supreme Court Justice Jim Main and Attorney General Luther Strange. Strange and Hooper are the only individual so far to formally declare their candidacy for 2018. Until last week, State Senator Dick Brewbaker was considering a run, but has taken himself out of the race. Of all the names in the hat for the seat, only Strange and Marsh are thought to have the ability to quickly raise money for an actual campaign. Given Strange’s name, ID pollsters believe he is the front-runner in a special or general election. Marsh, a wealthy businessman, could self-finance, which makes him a serious candidate in an election. On Goat Hill, the process is an ongoing guessing game with lots of questions and even more speculation. But those close to the Governor admit that only one question matters in the isolated world of the Bentley administration: That question is… “What does Rebekah want?” Bentley’s alleged lover, Rebekah Caldwell Mason, is reportedly the power behind the throne. According to cabinet members and administration staffers, ADEC’s Byard is Mason’s pick. The former Prattville mayor hasn’t been shy about his aspiration to replace Sessions, and members of his staff have made it known that their boss is the front runner.
At the cabinet meeting, Bentley spoke about the potential candidates he recently interviewed including, Marsh, Ward, and Hooper. During the discussion Bentley jokingly said to Byard, “We’ll get to you, Jim,” which several individuals present felt it was an inside joke between the two men.
South Alabama plant to pay $150,000 in federal race discrimination lawsuit
A federal race discrimination lawsuit against a south Alabama steel manufacturing plant was resolved Friday with a $150,000 consent decree, the U.S. Equal Employment Opportunity Commission announced. In June 2015, EEOC filed a lawsuit accusing Outokumpu Stainless USA, LLC of not promoting workers at its Calvert plant because of their race. The commission said the black workers, Daniel Nickelson, Wallace Dubose, Steven Jones, Victor Oliver and Joshua Burrell, were highly qualified to become Team Leaders, but the company hired white applicants who were less qualified for the job. EEOC filed the lawsuit after first attempting to reach a pre-litigation settlement. The discrimination violates Title VII of the Civil Rights Act of 1964, Marsha Rucker, regional attorney for EEOC’s Birmingham District Office said. “Making employment decisions based on race, such as promoting white candidates over more qualified African-American candidates, strikes at the heart of why Title VII exists,” Rucker said “Although we have come a long way since Title VII was enacted, discrimination still occurs. EEOC will continue to pursue actions against employers who make employment decisions based on race rather than skill and experience.” Also included in the three-year consent decree, the company must implement new polices to prevent discrimination, provide anti-discrimination training to employees and post anti-discrimination notices throughout the plant. More:
How Republics End
Many people are reacting to the rise of Trumpism and nativist movements in Europe by reading history — specifically, the history of the 1930s. And they are right to do so. It takes willful blindness not to see the parallels between the rise of fascism and our current political nightmare. But the ’30s isn’t the only era with lessons to teach us. Lately I’ve been reading a lot about the ancient world. Initially, I have to admit, I was doing it for entertainment and as a refuge from news that gets worse with each passing day. But I couldn’t help noticing the contemporary resonances of some Roman history — specifically, the tale of how the Roman Republic fell. Here’s what I learned: Republican institutions don’t protect against tyranny when powerful people start defying political norms. And tyranny, when it comes, can flourish even while maintaining a republican facade. On the first point: Roman politics involved fierce competition among ambitious men. But for centuries that competition was constrained by some seemingly unbreakable rules. Here’s what Adrian Goldsworthy’s “In the Name of Rome” says: “However important it was for an individual to win fame and add to his and his family’s reputation, this should always be subordinated to the good of the Republic … no disappointed Roman politician sought the aid of a foreign power.” America used to be like that, with prominent senators declaring that we must stop “partisan politics at the water’s edge.” But now we have a president-elect who openly asked Russia to help smear his opponent, and all indications are that the bulk of his party was and is just fine with that. (A new poll shows that Republican approval of Vladimir Putin has surged even though — or, more likely, precisely because — it has become clear that Russian intervention played an important role in the U.S. election.) Winning domestic political struggles is all that matters, the good of the republic be damned. More:
LOOKING AHEAD TO 2017 — Your predictions for the year ahead are beginning to roll-in. Keep them coming to firstname.lastname@example.org. … Here’s Allianz’s Mohamed A. El-Erian on what to expect in 2017: “If left only to domestic drivers, the US economy would likely experience a pickup in both growth and inflation in 2017, together with further job creation and broader and higher wage growth. In the process, the policy stance would pivot from excessive reliance on monetary policy to include greater use of fiscal measures and structural reforms.
“But for these domestic developments to prevail and also lead to genuine financial stability, it also matters what other countries do — particularly, China, Germany and Japan. Absent concurrent pro-growth policy adjustments there, the prospects for better US economic performance and higher Fed interest rates would lead to further dollar strengthening, and this from a level that is already at 2003 highs. Such excessive dollar appreciation would risk undermining growth while increasing the risk of protectionism.”
WHY TRUMP COULD BE IN TROUBLE ON THE ECONOMY — HFE’s Jim O’Sullivan: “According to campaign documents … Trump’s economic plan would ‘create a dynamic booming economy,’ with ‘25 million new jobs over the next decade.’ That implies a 1.5 percent-per-year rate of increase in employment. The plan would also ‘conservatively boost growth to 3.5 percent per year’ … [T]he plan counts on about a 2 percent-per-year rate of increase in productivity for the economy as a whole. …
“Economists have generally scoffed at those projections. We don’t think they are attainable, either. The employment part in particular looks virtually impossible without a surge in immigration, which would be counter to another part of the campaign plan. With the economy at close to full employment, 1.5 percent per year employment growth would require a similar pace for labor force growth, which is not plausible given demographic trends”
WHY YELLEN COULD SLOW HIM DOWN — Pantheon’s Ian Shepherdson argues Fed Chair Janet Yellen is not committed to letting the economy run hot for a while: “Judging by conversations we have had with investors since October, the idea that the Fed will be willing to let inflation overshoot the 2 percent target for a time has become received wisdom in the markets.
“The logic is straightforward; after eight years of core inflation undershooting the target, a period of overshoot is needed keep the medium-term average close to 2 percent. Fed Chair Yellen appeared to endorse this idea in her October 14 speech in Boston. … But Dr. Yellen pushed back, hard, against the idea in her press conference last week, arguing that she was merely raising the question as something which requires research”
ECONOMISTS DOUBT THE FED — FT’s Eric Platt: “The Fed … will wait six months before raising interest rates again, according to a survey of top economists that suggests policymakers will maintain a cautious approach to tightening policy until they see the economic package … Trump has promised.
“Officials will raise the Fed’s key short-term rate just twice in 2017, starting with a move in June, an FT survey of 31 Wall Street economists found. The findings come days after the central bank pushed its official rate higher for only the second time since the financial crisis and rattled bond markets by projecting three further moves next year.” Read more.
ASIA RELIEVED BY DRONE RETURN — Reuters: “Asian shares steadied in early trade on Monday after China agreed to return a U.S. drone it had seized, easing worries about rising diplomatic tensions between the world’s two biggest economic powers. … Financial markets briefly turned ‘risk-off’ in late U.S. trade on Friday following news that a Chinese Navy warship had seized a U.S. underwater drone in international waters in the South China Sea. … The furor appears to have been defused for now after the two countries said on Saturday China will return the drone” Read more.
STOLEN SECRETS? — Bloomberg: “A top U.S. lawmaker said China may be poring over a seized underwater drone to unearth secret information about Navy technology, hours after … Trump suggested Beijing should ‘keep it.’
“‘The Chinese are able to do a thing called reverse-engineering, where they are able to — while they hold this drone, able to find out all of the technical information. And some of it is pretty valuable,’ Senator John McCain of Arizona said Sunday on CNN’s ‘State of the Union.’” Read more.
IS NYC THE NEW CAPITAL? — WP’s By Paul Schwartzman: “The world’s power address du jour is a sheath of soaring black glass on Fifth Avenue, at the entrance to which a cop in combat armor — his fingers on an assault rifle — took a moment the other day to tell a tourist where to find the city’s best pizza. …
“The White House may be the nation’s time-honored symbol of power, but Trump is establishing his 58-story colossus at 725 Fifth Avenue as a stage for his new role, potentially nipping at Washington’s reputation as the center of American authority and the stature of its most famous address, 1600 Pennsylvania Avenue” Read more.
HAPPENING TODAY — Trump should secure victory in the Electoral College on Monday despite all the noise from some Democrats and outside groups looking to flip enough electors to keep the president-elect short of 270.
Worth remembering, when Trump or his surrogates talk about their “historic” or “landslide” win that it was, in fact, no such thing. Trump’s electoral margin ranks 46th in 58 elections. And his 2.5 million popular vote loss (so far) gives him the 3rd worst margin for a victor since 1824, trailed only by Rutherford B. Hayes and John Quincy Adams (who was selected by the House). Read more.
MM REAL TALK — There are two equally maddening political positions popular in the land right now. On the left: Trump’s win shouldn’t count and the Electoral College should reject him. On the Trump-right: The president-elect’s thin electoral margin and popular vote loss don’t matter and he should do whatever he wants. Both are completely bogus. Trump won. Did the Russians help? Probably. Does that kind of suck? Sure. But who knows if it was decisive.
Hillary Clinton had many problems. She lost states she needed to win. Trump’s presidency will be perfectly legitimate. But losing the popular vote matters in terms of approach to governance and conciliation with political opponents. More people dislike Trump’s policies on immigration than embrace them. There is no mandate for rounding up the undocumented en masse and evicting them from the country. Trump so far seems to get this even if some of his ardent supporters do not.
ALSO TODAY: LEW TALKS HAMILTON WITH CHERNOW — At 11:00 a.m. via Treasury, Treasury Secretary Jack Lew “will participate in a moderated conversation with Pulitzer Prize-winning historian and author of Alexander Hamilton Ron Chernow at their alma mater, Forest Hills High School.
“The Secretary and Mr. Chernow will discuss the history and legacy of Alexander Hamilton, how history can influence the arts and currency, the importance of public education, as well as share memories from their time at Forest Hills High School. Following the discussion, students will have the opportunity to ask questions”
HAPPENING THIS WEEK — The Dow is virtually certain to hit the 20K milestone, perhaps as early as Monday, as exuberance over Trump’s fiscal plans and faith that the Fed will go slow continue to dominate.
MONDAY FUNNIES — ICYMI, SNL crushed it with its “Hillary Actually,” skit in which Hillary Clinton (Kate McKinnon) went to an elector’s house and tried to persuade her to not vote for Trump. http://bit.ly/2hx2Htk
TRUMP TEAM TAMPS DOWN RUSSIA TALK — WSJ’s Damian Paletta and Kate O’Keefe: “Fresh signs emerged Sunday that … Trump could embrace the intelligence community’s view that the Russians were behind a computer-hacking operation aimed at influencing the November election. A senior Trump aide said Mr. Trump could accept Russia’s involvement if there is a unified presentation of evidence from the Federal Bureau of Investigation and other agencies.
“This followed weeks of skepticism from the president-elect and his supporters … Speaking on Fox News Sunday, Mr. Trump’s incoming chief of staff, Reince Priebus, said the president-elect ‘would accept the conclusion if these intelligence professionals would get together, put out a report, show the American people that they are actually on the same page.’ His statement follows an intensifying bipartisan push on Capitol Hill to launch a separate investigation into the matter” Read more.
DEUTSCHE PAYS UP — POLITICO’s Patrick Temple-West: “Deutsche Bank has agreed to pay regulators $37 million for committing violations with its stock trading platform, the SEC and the New York Attorney General said Friday.
“From January 2012 to February 2014, Deutsche made misstatements and omissions regarding its ‘dark pool’ trading router. Deutsche admitted its dark pool ranking model was not working as the company had marketed it to customers, regulators said. When the bank discovered a technical problem in 2013, the company did not fully correct it or tell clients about it.” Read more.
BLANKFEIN ON TOP — WSJ’s Liz Hoffman’s: “While Goldman this week underwent its most dramatic management reshuffling in a decade, Lloyd Blankfein remains firmly ensconced as chief executive — and appears likely to stay, having outlasted an impatient deputy and effectively restarted the clock on his new successors-in-waiting.
“The rotation shows that he continues to keep trusted lieutenants close and reflects the board’s support for him, a decade into his tenure.” Read more.
TROUBLE FOR TILLERSON? — POLITICO’s Isaac Arnsdorf and Elana Schor: “ExxonMobil successfully lobbied against a bill that would have made it harder for the next president to lift sanctions against Russia, clearing the way for the oil giant to restart a program worth billions of dollars if Donald Trump eases those restrictions as president.
“The bill, known as the STAND for Ukraine Act, would have converted into law for five years President Barack Obama’s measures punishing Russia for annexing Crimea, making it more difficult for Trump to roll them back. The Senate left town on Monday without acting on the bill, making it easier for Trump to end the sanctions with a stroke of the pen.” Read more.
APPLE APPEALS — Reuters’ Foo Yun Chee: “Apple will launch a legal challenge this week to a record $14 billion EU tax demand, arguing that EU regulators ignored tax experts and corporate law and deliberately picked a method to maximize the penalty, senior executives said.
“Apple plans to tell the court that the Commission erred when it ruled that the head office of Irish-registered units Apple Sales International (ASI) and Apple Operations Europe existed only on paper, with no justification for the billions of euros it posted in untaxed profits.” Read more.
IRAN TALKS TOUGH — WSJ’s Aresu Eqbali and Robert Wall: “Iranian officials publicly hardened their resolve to proceed with a multibillion-dollar deal to buy dozens of Boeing Co. jets, threatening to claw back any lost money if the deal is scuttled after the inauguration of President-elect Donald Trump.
“Iranian Deputy Transport Minister Asghar Fakhrieh-Kashan said that if sanctions are re-imposed invalidating the contracts with Airbus and Boeing ‘we will take back all the prepayments, with interest.’” Read more.
PRIVATBANK NATIONALIZED — FT’s Roman Olearchyk: “Ukraine’s government moved late on Sunday to nationalise PrivatBank, the war-scarred country’s largest and most systemically important commercial bank, amid concerns over the state of its balance sheet.
“The transaction, which placed 100 per cent of the bank into state ownership, was agreed with the outspoken Igor Kolomoisky and Gennady Bogolubov, PrivatBank’s oligarch majority co-owners, the government said. The two control a diversified portfolio of assets spanning oil production, ferroalloys, media and chemicals.” Read more.
UBER DEFIANT — NYT’s Mike Isaac: “The dispute is rooted in Uber’s refusal to seek a permit from the California Department of Motor Vehicles, which would allow it to test autonomous vehicles under certain conditions. Companies like Google, Tesla Motors and Mercedes-Benz have all gotten such permits.
“The motor vehicles department did not immediately respond to requests for comment. But in a letter to Uber on Friday, lawyers in the California attorney general’s office reiterated the state’s position that the company pull the self-cars off the road until it got the permits or face unspecified consequences.” Read more.
MORTGAGE RATES HEAD HIGHER — WSJ’s Annamaria Andriotis: “The era of ultralow mortgage rates is over. The Federal Reserve’s decision to raise the federal-funds target rate by a quarter of a percentage point Wednesday means borrowing is about to get more expensive for consumers.
“Some homeowners also will feel the pain, in particular those who signed up for home-equity lines of credit, adjustable-rate mortgages .. and other variable-rate loans. Interest rates on these loans tend to rise after rate increases, resulting in larger payments for borrowers … Rates on plain-vanilla, 30-year fixed-rate mortgages have surged since Election Day by 0.76 percentage point, bringing them to an average of 4.38 percent on Thursday — their highest rate since April 2014” Read more.
The Obama’s are spending the holidays in Hawaii.
Next vote: Jan. 3.
Tom Krebs has concentrated his law practice in securities and related financial transactions for decades. Securities attorney daily briefing is a summary of trending issues that may have some impact on securities or securities litigation.