Securities Attorney Tom Krebs on NPR

Listen to Securities Attorney Tom Krebs on National Public Radio’s Planet Money.


Securities Attorney Briefing 17 August 2018


Trump administration is considering pulling back $3 billion in foreign aid

The Trump administration is considering taking back more than $3 billion in foreign aid that Congress already approved, in a move that senators from both parties are calling questionably legal and promising to resist. The Office of Management and Budget instructed the State Department and the U.S. Agency for International Development earlier this month to provide a balance sheet of foreign aid projects that have not yet been funded. Unless Congress intervenes, the money may be returned to the U.S. Treasury at the end of fiscal year on Sept. 30. A scramble is on to allocate the money before the administration announces the expected change, which would freeze the billions of dollars left. In his previous two budgets, President Trump proposed steep cuts to foreign aid, but Congress restored them. Lawmakers from both parties view the last-minute move as a backdoor attempt to get the cuts, despite their objections, before they can do anything about them. The OMB memo, which was read to The Washington Post, said the administration plans to target expiring international assistance funds considered “unnecessary.” “If Congress fails to take action to release the funds, they will remain on hold until the end of the fiscal year . . . then be returned to the Treasury,” the memo says. An administration official declined to comment, saying, “We do not comment on alleged leaks and will not discuss deliberative and pre-decisional information.” With the House out of session until after Labor Day, and the Senate set to consider the nomination of a Supreme Court justice next month, it is unlikely that lawmakers will find time to stave off a politically charged change — particularly in the weeks before the midterm elections. More:

Vatican Calls Abuses by Pennsylvania Priests ‘Criminal and Morally Reprehensible’

The Vatican responded on Thursday to the horrors of a Pennsylvania grand jury report on clergy sex abuse, saying it felt shame and sorrow over the findings that more than 1,000 children had been abused by hundreds of priests over decades while bishops covered up their crimes. “The abuses described in the report are criminal and morally reprehensible,” the Vatican statement said of the report, which was released on Tuesday, shocking Catholics with lurid tales of abusive priests and superiors who turned a blind eye. “Those acts were betrayals of trust that robbed survivors of their dignity and their faith. The church must learn hard lessons from its past, and there should be accountability for both abusers and those who permitted abuse to occur.” “Victims should know that the pope is on their side,” the statement said. “Those who have suffered are his priority, and the church wants to listen to them to root out this tragic horror that destroys the lives of the innocent.” It was one of the strongest mea culpas to date on an issue that Pope Francis has tried to address head-on in recent months, after mounting criticism that the pope had a blind spot when it came to dealing with the sexual abuse of minors by clerics. More:

Pompeo forms ‘Iran Action Group’ for post-nuke deal policy

WASHINGTON (AP) — Secretary of State Mike Pompeo is forming a dedicated group to coordinate and run U.S. policy toward Iran as the Trump administration moves ahead with efforts to force changes in the Islamic Republic’s behavior after withdrawing from the Iran nuclear deal. The State Department said Pompeo will announce the creation of the Iran Action Group on Thursday. Officials said the group will be headed by Brian Hook, who is currently the State Department’s director of policy planning. Hook led the Trump administration’s ultimately unsuccessful attempt to negotiate changes to the nuclear deal with European allies before the president decided in May to pull out of the accord. Since withdrawing, the administration has re-imposed sanctions that were eased under the deal and has steadily ramped up pressure on Iran to try to get it to stop what it describes as “malign activities” in the region. In addition to its nuclear and missile programs, the administration has repeatedly criticized Iran for supporting Syrian President Bashar Assad, Shiite rebels in Yemen and anti-Israel groups. It has also in recent weeks stepped up criticism of Iran’s human rights record and is working with other nations to curb their imports of Iranian oil. The administration is warning Iran’s oil customers that they will face U.S. sanctions in November unless they significantly reduce their imports with an eye on eliminating them entirely. It has also told businesses and governments in Europe that they may also be subject to penalties if they violate, ignore or attempt to subvert the re-imposed U.S. sanctions. In his new job, Hook is to oversee implementation of the administration’s entire Iran policy, the officials said. Pompeo and other officials have denied that the administration is seeking to foment regime change in Iran and maintain they only want to see the government change course. Pompeo created a similar group dedicated to working on North Korea policy while he was director of the CIA. Hook is expected to be replaced as policy planning chief by Kiron Skinner, a foreign policy academic and adviser to several Republican presidential candidates who served on President Donald Trump’s national security transition team and very briefly at the State Department after Trump took office, according to the officials who were not authorized to publicly discuss personnel matters and spoke on condition of anonymity.‘Iran-Action-Group’-for-post-nuke-deal-policy

Judge Says A ‘Well-Planned Conspiracy’ In Kim Jong Nam’s Death

Two women accused of killing Kim Jong Nam, the estranged half-brother of North Korea’s dictator, will remain in custody after a judge in Malaysia on Thursday said there is enough evidence of a “well-planned conspiracy” to move the case forward. The two women, 25-year-old Siti Aisyah, an Indonesian national, and 29-year-old Doan Thi Huong, a Vietnamese national, allegedly smeared the banned nerve agent VX on Kim’s face in the airport of Kuala Lumpur, Malaysia, in February 2017. Kim died in 20 minutes. Although there has never been any definitive proof, North Korean leader Kim Jong Un is widely believed to have ordered his brother’s execution. The women say they were tricked into participating in the attack and thought it was part of a reality TV show prank. Four North Korean men have also been charged as part of the death, but they left Malaysia the morning of the attack and remain at large. Trial judge Azmi Ariffin called the murder of Kim a “well-planned conspiracy between the women and the four North Koreans at large,” according to Reuters, which reports that the judge called upon the two women to prepare a defense for a trial to be held sometime between November and February. They could face the death penalty if convicted. The judge added that although there was not enough evidence to say whether it was a political assassination, he could not rule it out. More:

What to watch as Brexit talks resume in Brussels

The latest round of Brexit negotiations kicked off today in Brussels, with just two months to go before October’s EU Summit — widely seen as one of the last feasible dates to secure a withdrawal treaty.

Why it matters: Consensus has been reached on about 85% of the deal, per the NYTimes’ Steven Erlanger, but several of the most contentious issues, including the Irish border dilemma and the U.K.’s customs and trade relationship with the EU, have yet to be resolved.

What to watch:

  • The original idea for an Irish “backstop,” which would allow Northern Ireland to remain in the EU’s shared “customs union” and “single market,” was rejected by the U.K. in July. Thursday’s negotiations will focus on finding an alternative solution to prevent a hard border between Northern Ireland and the Republic of Ireland.
  • Friday’s talks will seek to clarify the nature of the future trade relationship between the EU and the U.K., after Prime Minister Theresa May’s “Chequers proposal” to remain in the EU’s single market for goods, but not services, was also rejected.
  • In response to the stifling of the Chequers plan, Britain’s new Foreign Secretary, Jeremy Hunt, has embarked on a tour of European capitals, lobbying the EU for “a change in approach” and warning of the severe market impact of a “no deal” Brexit.
  • The EU’s Brexit negotiators reportedly fear that the British secret service has bugged their devices, according to The Telegraph. Regardless of whether that’s true, the accusations themselves are a grim indication of the tensions between the negotiating parties.

Go deeper: The U.K. is changing its mind on Brexit.–67c07281-72fe-403c-912a-3f58f7898921.html

Dream of a Better Life in Afghanistan Ends in a Hilltop Grave for Students

KABUL, Afghanistan — The teenage students were lowered into a mass grave one after another, shoulder to shoulder — just as they had sat at their lecture hall the day before. A suicide bomber, perhaps no older than they, had walked in as their algebra class ended and physics was about to begin, detonating his explosive vest and turning the university prep center into a scene of carnage. On the whiteboard, basic algebraic equations were covered in blood. A nearby blackboard, where “Valentine day” was written in faded chalk, was riddled with holes from the ball bearings that were packed into the bomber’s vest. The lecture hall had been so packed, and the explosion so powerful that nearly half the 230 students were among the casualties. Health officials said at least 40 were killed and 67 others wounded. The mangled bodies were hard to identify. At the hilltop burial site on Thursday, Roshan Ghaznavi, a human rights campaigner, wept over the coffin of a girl named Negina from a poor family; she had been their best hope for a better life. “Today, it is Negina’s casket, tomorrow it will be my casket, the day after it will be your casket,” Ms. Ghaznavi said. “Humanity is dead here. It’s been dead for a long time.” The attack was claimed by the Islamic State, its latest in a brutal string of bloody bombings against civilian targets, everything from mosques to schools, and even a midwife training center. The Islamic State’s hold on Afghan territory was never large, and has been slipping, but its cruel brand of bloodshed has compounded Afghans’ suffering during years of war against the Taliban. More:

Pentagon says China military ‘likely training for strikes’ on U.S. targets

WASHINGTON (Reuters) – China’s military has expanded its bomber operations in recent years while “likely training for strikes” against the United States and its allies, a Pentagon report released on Thursday said. The assessment, which comes at a time of heightened U.S.-China tensions over trade, was contained in an annual report that highlighted China’s efforts to increase its global influence, with defense spending that the Pentagon estimates exceeded $190 billion in 2017. “Over the last three years, the PLA has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and likely training for strikes against U.S. and allied targets,” the report said, using an acronym for China’s People’s Liberation Army. The report comes as China and the United States plan to hold trade talks, offering hope they might resolve an escalating tariff conflict that threatens to degenerate into an all-out trade war. The report said that while the PLA had continued to extend operations, it was not clear what message Beijing was seeking to send by carrying out the flights “beyond a demonstration of improved capabilities.” The Chinese embassy in Washington could not immediately be reached for comment. This year China’s air force landed bombers on islands and reefs in the South China Sea as part of a training exercise in the disputed region. More:

New U.S. training unit in Afghanistan faces old problems

CAMP DAHLKE, Afghanistan (Reuters) – Captain Joe Fontana, a team leader with the U.S. army’s 1st Security Force Assistance Brigade, is part of a new unit but he is working on problems that have been stubbornly familiar to American military advisers in Afghanistan for years. The 1st SFAB was formed last year as a new force of experienced advisers, to focus U.S. army training and support for Afghan troops and, in future, for other foreign armies. It deployed to Afghanistan in March, putting U.S. advisers, previously largely restricted to Corps headquarters, together with front-line brigades and battalions for the first time since most international forces left in 2014. The SFAB has arrived at a time of increasing pressure on the Afghan National Army (ANA) from Taliban fighters who overran a series of outposts and stormed the strategic city of Ghazni this week. The problems they have found are the same ones that existed a decade ago when the NATO-led coalition began to reshape Afghan forces into an army on U.S. lines – poor logistics and organization as well as a reliance on static checkpoints that are vulnerable to attack. Like other advisers, Fontana, who served in a combat unit in the southern Afghan provinces of Zabul and Kandahar in 2011-12 as well as in Iraq, speaks admiringly of the fighting spirit of Afghan soldiers. But he said the army is dogged by persistent problems with supplies, maintaining equipment and making sure units get proper support, issues which for years have been an obstacle to creating Afghan forces capable of standing on their own. More:

Laser Attacks on U.S. Pilots Rising Sharply in Middle East

Hostile forces are targeting U.S. pilots with laser pointers at an increasing rate, putting aircrews at risk over the Middle East and the South China Sea. The number of laser incidents so far this year is on track to top the roughly 600 incidents reported in 2016 and match 2015, when there were a total of about 700 incidents in the Middle East. The figures were obtained by The Wall Street Journal. American pilots operating in Syria, Iraq and Afghanistan experienced most of the more than 350 laser incidents reported over the last seven months—almost as many as took place during the whole of 2017. The Pentagon this year acknowledged attacks around an American base in Djibouti in east Africa, where laser beams appeared to come from a nearby Chinese base. A small number of incidents also took place in the East China Sea, where U.S. pilots were hit by laser beams that may have come from Chinese personnel or from fishermen operating in the area. China denied any involvement.


Trump gears up to strip more clearances from officials tied to Russia investigation

President Trump has told advisers that he is eager to strip more security clearances as part of an escalating attack against people who have criticized him or played a role in the investigation of alleged Russian interference in the 2016 presidential campaign, two White House officials said. Over the past 19 months, Trump has fired or threatened to take action against nearly a dozen current and former officials associated with the inquiry, which he has labeled a “rigged witch hunt,” including former FBI director James B. Comey, former deputy attorney general Sally Yates and former FBI deputy director Andrew McCabe. All three were dismissed. Trump intensified his attacks this week by stripping former CIA director John Brennan of his security clearance and announcing that others are under review. Brennan and former director of national intelligence James R. Clapper Jr., who is on Trump’s review list, were among the Obama administration officials who briefed Trump before his inauguration on evidence of Russia’s interference in the campaign. The president has repeatedly urged Attorney General Jeff Sessions and other officials to end the investigation led by special counsel Robert S. Mueller III, who is examining potential collusion between Moscow and the Trump campaign and whether the president has sought to obstruct justice. To critics, Trump’s moves echo President Richard Nixon’s decision to force the abrupt firing of Watergate special counsel Archibald Cox. “If you did all this in one day, it would have a ‘Saturday night massacre’ odor to it,” said Benjamin Wittes, a Brookings Institution fellow who oversees the Lawfare Blog on national security issues, referring to the 1973 move by Nixon that prompted resignations by the Justice Department’s top two officials. “But you spread it out and get people used to the first one, then you do the second one — over a long period of time, it becomes the new normal.” More:

Former US security leaders blast Trump for yanking clearance

WASHINGTON (AP) — Former U.S. security officials issued scathing rebukes to President Donald Trump on Thursday, admonishing him for yanking a top former spy chief’s security clearance in what they cast as an act of political vengeance. Trump said he’d had to do “something” about the “rigged” federal probe of Russian election interference. Trump’s admission that he acted out of frustration about the Russia probe underscored his willingness to use his executive power to fight back against an investigation he sees as a threat to his presidency. Legal experts said the dispute may add to the evidence being reviewed by special counsel Robert Mueller. In an opinion piece in The New York Times, former CIA Director John Brennan said Trump’s decision, announced Wednesday, to deny him access to classified information was a desperate attempt to end Mueller’s investigation. Brennan, who served under President Barack Obama and has become a vocal Trump critic, called Trump’s claims that he did not collude with Russia “hogwash.” The only question remaining is whether the collusion amounts to a “constituted criminally liable conspiracy,” Brennan wrote. Later Thursday, the retired Navy admiral who oversaw the raid that killed Osama bin Laden called Trump’s moves “McCarthy-era tactics.” Writing in The Washington Post, William H. McRaven said he would “consider it an honor” if Trump would revoke his clearance, as well. “Through your actions, you have embarrassed us in the eyes of our children, humiliated us on the world stage and, worst of all, divided us as a nation,” McRaven wrote. That was followed late Thursday by a joint letter from 12 former senior intelligence officials calling Trump’s action “ill-considered and unprecedented.” They said it “has nothing to do with who should and should not hold security clearances — and everything to do with an attempt to stifle free speech.” The signees included six former CIA directors, five former deputy directors and former Director of National Intelligence James Clapper. Two of the signees — Clapper and former CIA Director Michael Hayden — have appeared on a White House list of people who may also have their security clearances revoked. Trump on Wednesday openly tied his decision to strip Brennan of his clearance — and threaten nearly a dozen other former and current officials — to the ongoing investigation into Russian election meddling and possible collusion with his campaign. In an interview with The Wall Street Journal, Trump again called the probe a “rigged witch hunt” and said “these people led it!” More:

Why the FBI Fired an Agent Who Wrote Anti-Tump Texts

The FBI’s disciplinary office had recommended Peter Strzok be suspended for two months but was overruled by the bureau’s deputy director. The paperwork was signed. Former FBI agent Peter Strzok, who became a lightning rod for efforts to undermine the Russia investigation, was set to receive a two-month suspension and a demotion as punishment for his alleged misconduct during the 2016 election. Then the FBI’s Deputy Director David Bowdich stepped in and fired him, saying he had undermined “the credibility of the FBI.” Strzok came under fire late last year after the Justice Department released text messages that he sent using an FBI-issued device that were critical of Trump. But questions have been raised about what specific bureau policies Strzok violated in sending those texts. Candice Will, long-time deputy director of the FBI’s Office of Professional Responsibility, had cited three ways in which Strzok allegedly violated FBI policies during the election, according to a person with direct knowledge of the matter.  The first, “unprofessional conduct off-duty,” directly related to his use of an FBI-issued cell phone to send the private texts. The second, “investigative deficiency”—later reduced to “dereliction of supervisory duty”— related to Strzok’s perceived delay in searching a laptop as part of the probe of Hillary Clinton’s emails in the fall of 2016 that belonged to Anthony Weiner, the husband of a top Clinton aide. Finally, Will told Strzok that he had committed a “security violation” for forwarding certain law-enforcement sensitive documents to his personal Gmail account. Bowdich’s decision to overrule her and fire Strzok on August 10 was considered highly unusual. More:

Veterans Group Sues to Block VA Shadow Rulers

A new lawsuit challenges the legality of a secret Mar-a-Lago troika after ProPublica revealed its influence over the Department of Veterans Affairs.

A liberal veterans group is suing to block the influence of three outside advisers who have been secretly influencing the Department of Veterans Affairs from Mar-a-Lago, President Donald Trump’s private club in Palm Beach, Florida. ProPublica reported last week that the advisers — Marvel Entertainment chairman Ike Perlmutter, West Palm Beach doctor Bruce Moskowitz and Washington lawyer Marc Sherman — have been shaping VA personnel and policy decisions despite having no official role or relevant expertise.

The trio, sometimes referred to as the “Mar-a-Lago Crowd,” is failing to disclose its activities as required by federal law, according to a lawsuit filed today in federal court in Washington, D.C., by VoteVets, a liberal activist group that says it represents 500,000 supporters. The Federal Advisory Committee Act, or FACA, is a Watergate-era sunshine law that requires federal agencies to inform the public when they consult outside experts. VoteVets wants a judge to order the Mar-a-Lago Crowd to disclose records of its activities and cease influencing the VA until it complies with the law. The suit also asks that future meetings of the group be opened to public participation and that minutes of its meetings be kept. “This group has been operating in the dark,” said Will Fischer, VoteVets’ director of government relations. “Our goal in bringing this lawsuit is to bring these activities to light and make sure our members, veterans and military families are able to see what’s going on with our VA and the people directing the activities of our VA.” The VA referred questions about the lawsuit to the Justice Department, which didn’t answer a request for comment. In a statement, a spokeswoman for Perlmutter, Sherman and Moskowitz responded: “We have watched with concern as media outlets — including ProPublica — have misrepresented our actions and used selective emails to paint a distorted picture of our efforts to help the VA and America’s veterans.” The statement asserted that none of the group’s “volunteer efforts,” which it characterized as “recommendations” made in response to requests from the VA, were conducted in secret and that the group didn’t attempt to develop policy or influence personnel decisions. VoteVets is represented by Democracy Forward, an activist group that challenges actions by the Trump administration. The group has brought similar lawsuits against a hunting council at the Interior Department and an infrastructure panel at the departments of Transportation and Commerce. In the latter case, a judge granted initial discovery. “It looks like what was happening here was a group of people giving collective advice to the VA, which is precisely the kind of case where FACA should apply,” said John Bies, a former deputy assistant attorney general in the Justice Department’s Office of Legal Counsel during the Obama administration. More:

Senate, After One Day Back at the Capitol, Packs It In for the Week

Senators didn’t exactly extend themselves with the floor schedule for their first week back in session in August, though they did confirm another pair of President Donald Trump’s nominees to be judges on the 4th U.S. Circuit Court of Appeals: A. Marvin Quattlebaum Jr. and Julius Ness Richardson. Quattlebaum was confirmed Thursday on a 62-28 vote, while Richardson got by on an 81-8 vote. The heavier lift will come next week. The Senate on Wednesday reached an agreement that allowed the body to turn to a package of the Defense and Labor-HHS-Education spending measures as soon as lawmakers voted to confirm Richardson. The order also took care of procedural issues that are particular to floor consideration of appropriation bills. “This process is not easy. It is hard work for our Appropriations subcommittees and full committee to craft this legislation. Then, here on the floor, we need cooperation from both sides to process amendments while resisting the temptation to turn the appropriations process into a free-for-all on all manner of policy issues,” Senate Majority Leader Mitch McConnell said Thursday morning. “But this year, that’s just what we’re doing. The Senate has already passed sevenof 12 bills. In the next several days, we’ll consider No. 8 and No. 9. Once we finish them, they’ll encompass more than 87 percent of total discretionary spending,” the Kentucky Republican added. Senate Minority Leader Charles E. Schumer signaled his own support for the current vibe on appropriations. “I hope we’ll follow the same, bipartisan course of the previous few bills,” the New York Democrat said on the floor.

Space Force Could Be Compromised From the Get-Go, Watchdog Warns

The Air Force is not adequately monitoring the pedigree of parts that go into critical space systems, and they are consequently at risk of being compromised by America’s enemies, according to a Pentagon inspector general report released Thursday. It was the second of four audits that Congress has ordered on the subject, and the results so far indicate a systemic failure to safeguard what goes into U.S. weapons and satellites. Air Force Space Command did not identify all its components and suppliers, nor sufficiently conduct threat assessments, nor require the purchase of the proper circuits from trusted suppliers, nor ensure the right testing capabilities, the audit said. “As a result, an adversary has opportunity to infiltrate the Air Force Space Command supply chain and sabotage, maliciously introduce an unwanted function or otherwise compromise the design or integrity of the critical hardware, software and firmware,” the report concluded. The inspector general’s work suggests that systems that are critical not only to the U.S. military but also to the global economy could be jeopardized. The audit on space assets comes as President Donald Trump has stressed their importance and has advocated creation of a separate military branch to be called Space Force. The new audit focused mainly on the U.S. program to develop new missile-warning satellites, called the Space Based Infrared System. In that program, the Air Force relied on contractors’ assurances about the pedigree of components rather than independently verifying them, the report said. The Air Force was unable to provide the auditors with the name and nationality of the developers involved with designing the satellites. And the command “did not perform due diligence” on all the suppliers.

Trump’s favorite presidential powers

As President Trump has settled into Year 2 of his presidency, he has become especially enamored with powers he can exercise — just like back at the Trump Organization — without the approval or even consultation of anyone else.

Four sources close to Trump tell Axios that the revocation of former CIA Director John Brennan’s clearance belongs in the same category as the president’s love of the pardon power and the signing of executive orders.

  • It’s a power that is uniquely and solely his, and matches his idea of how the presidency ought to be: pure power and instant gratification.
  • “What he enjoys most about this job is finding things he has absolute power over,” said one source who’s worked closely with Trump. “He got a kick out of pardons, that he could pardon anybody he wants and people would come to him to court him and beg him.”

Now — after Sen. Rand Paul (R-Ky.) pointed out to Trump that he could revoke security clearances from former senior officials who were attacking him — he is clearly relishing the unilateral power:

  • For the longest time, according to sources with direct knowledge of the president’s thinking, Trump did not get involved in clearance issues, whatsoever.
  • He “really wanted to stay out of it, not just for Jared and Ivanka but [for] others,” one source with direct knowledge of the process said.
  • Former White House aide Seb Gorka “appealed to him personally several times [to get his permanent security clearance] and he never acted. And he loved Gorka!”

Another source close to Trump said: “I don’t believe Trump is inclined to do anything that erodes separation of powers — at least, nothing that exceeds the historical rate at which executive power has expanded.”

  • “But if there’s a power he’s been given, you can bet every penny you own that he’s going to use it — and perhaps use it in new ways or with greater frequency than ever before.”
  • “I’ve never heard him express anger that he was constitutionally constrained from doing something. But he’s definitely biased toward action, so he’s going to try and have to be told otherwise. For example, look no further than telling Native American tribes to ‘just do it.'”

Reality check: The White House has provided no evidence that Brennan is a threat to national security.

  • West Wing aides have no evidence he leaked classified information; if they did, they would’ve produced it.
  • This was a purely political decision. And the explanation for the delay in announcing the decision — Trump told the Wall Street Journal he was prepared to yank Brennan’s clearance last week but it was too “hectic” — is odd, given that he was on vacation at his New Jersey golf club.

Be smart: The narrative that Trump is doing this to silence Brennan — as the former CIA director suggested in his N.Y. Times Op-Ed — is absurd.

  • Bloomberg’s Eli Lake nails the reality when he writes that far from wanting to silence Brennan, Trump is clearly trying to elevate him as his foil.
  • Lake notes that Trump “wants to make Brennan the face of the so-called resistance.”
  • “This is the Trump playbook,” Lake continues. “Why do you think he keeps tweeting about Maxine Waters? He is a man who approaches politics like professional wrestling, happy to play the villain if it energizes his base. And for Trump, Brennan is a perfect adversary.”

The takeway: Trump always needs a villain to run against and he and his media allies, like Fox’s Sean Hannity, are trying to brand Brennan as the sinister face of the “Deep State” that they claim is out to get Trump.

Trump calls on regulators to consider changing how often companies report earnings

President Trump on Friday called on financial regulators to consider allowing public companies to share information with the public less often, a potentially major shakeup of corporate America. “That would allow greater flexibility & save money,” Trump said in a tweet. Currently, publicly-traded companies must file quarterly reports, disclosing extensive details about their operations, including profits and revenue. But some chief executives have complained that these type of requirements lead them to focus on short-term profits rather than the long-term health of their companies. In his tweet, Trump said that the Securities and Exchange Commission should consider moving the reporting requirement to every six months instead of every three. Trump said the proposal follows conversations with the “world’s top business leaders” about how to “make business (jobs) even better in the U.S.” The SEC did not immediately respond to a request for comment. The proposal is likely to be lambasted by shareholder advocates, who in recent years have called on corporations to share more information with the public not less. More:

Banks Are Eyeing $1.5 Trillion in Credit Card Secrets

Few people can get inside your head—or at least the part of your brain that makes spending decisions—quite like Scott Grimes and Lynne Laube. The co-founders of Cardlytics Inc. deal in some of the most valuable and revealing personal data on the planet: how people use their debit and credit cards. They’re quietly helping some of the largest banks in the U.S. to mine what’s known in the trade as purchase data and use it to encourage customers to buy more things with their plastic. Conventional banks are trying to raise their data game to fend off fast-growing financial technology startups and hold on to customers. “This is the bank’s secret weapon in the digital wars,” Silvio Tavares, chief executive officer of the trade group CardLinx Association, says of purchase data. But it’s a weapon they have to be extremely careful about using. Although consumers are constantly being asked to trade some privacy for convenience and service, banks hold a particular position of trust. In early August the Wall Street Journal reported that Facebook Inc. had approached banks and asked them to share data about their customers, to help it create services such as a way to check balances inside a Facebook app. Facebook said it wasn’t using purchase data to push advertising. Several major banks quickly put out statements saying they weren’t sharing data with the social media company. More:

Meet the Special Counsel Team: So Careful They Won’t Even Disclose Their Shake Shack Orders

ALEXANDRIA, Va. — Greg D. Andres looked like any ordinary guest at the Westin hotel here, standing near the valet in flip-flops and a white Notre Dame boxing T-shirt, waiting for a Postmates delivery from Shake Shack. The moment would be unremarkable save for Mr. Andres’s role as the lead prosecutor for the special counsel, Robert S. Mueller III, in the trial of Paul Manafort, concluding its third week here. Even the briefest glimpses of Mr. Mueller’s investigators, who have spoken publicly only in court papers and short court appearances since the inquiry began, draw notice. Mr. Manafort’s tax and bank fraud trial has provided the first real look at the special counsel’s team, the elusive players in the central drama of Washington political life and the subjects of fascination for the capital’s chattering classes. Tagged by President Trump as “17 angry Democrats,” they have shown themselves to be typical, if harried, government lawyers, staying at the hotel opposite the courthouse to devote most of their waking hours to trying the case. Other members of the special counsel’s office have joined Mr. Andres in the courtroom, including Andrew Weissmann, one of Mr. Mueller’s top deputies, who oversaw the prosecution from a seat in the back. Like a basketball coach during timeouts, he huddled with the others during recesses for strategy sessions, clutching a green government-issue notebook that the rest of the team used during the trial, making them easy to identify. The prosecutors snacked on Life Savers and orange-colored Starburst candy from jars that sat near Judge T. S. Ellis III. They drank from worn foam cups marked with their initials. Next to them sat a black catering-style cart labeled “Property of SCO” — Special Counsel’s Office — piled with binders of documents. Mr. Mueller’s spokesman, Peter Carr, whose “no comment” replies have become a running dark joke among the Washington press corps, sat among the spectators and reporters. He would not even confirm Mr. Andres’s order from Shake Shack, deferring to reportorial observation. Nor would Mr. Andres himself. Asked later whether he had in fact ordered Shake Shack, he laughed, then paused. “I can’t say,” he said, his usual response when journalists at the hotel asked him about his work as he strolled the lobby juggling half-eaten bags of Lay’s potato chips, Starbucks beverages and Diet Coke, his hair tousled and tie loosened. More:

Court filing: Mueller team has three times as much evidence for next Manafort trial

Special counsel Robert Mueller’s team has triple the amount to evidence to present in the next criminal trial of President Trump’s former campaign chairman Paul Manafort. Prosecutors have nearly three times the number of exhibits to present in the upcoming Washington, D.C., trial compared to the Virginia trial that is still in jury deliberations, according to a Thursday court filing obtained by CNN. Mueller’s team reportedly has over 1,000 pieces of evidence to present in Manafort’s D.C. federal case over foreign lobbying and money laundering charges. Prosecutor Greg Andres said in the Virginia court Wednesday that 388 documents were submitted into evidence in the case currently under jury deliberation.

The judge in the D.C. criminal case told prosecutors to “review” their collection “with an eye towards streamlining the presentation of its case,” according to CNN. Manafort’s defense attorneys asked a D.C. judge on Thursday to push their filing deadline back because they have not been given enough time to make plans for the September trial, CNN reported. The judge granted them a four day extension.

Most of the evidence in the two criminal cases will not overlap, CNN reported. Both cases pertain to Manafort’s time as a political consultant to Ukraine. He is accused of illegal lobbying as well as alleged bank and tax fraud. Manafort’s indictment resulted from Mueller’s team during its investigation of Russian interference in the 2016 presidential election, including whether Moscow colluded with members of the Trump campaign. The charges against Manafort are not tied to his work on the Trump campaign, and some of the alleged crimes predate the election by several years.

The Mueller Investigation Is Now on Trial, Too

ALEXANDRIA, VIRGINIA — For the past two weeks, the trial in the case of United States of America v. Paul J. Manafort Jr. has played out inside a courtroom sealed off from the outside world. Phones and laptops are not permitted in the Albert V. Bryan Courthouse in suburban Virginia. There is no Twitter. Journalists covering the trial take notes by hand and file their updates via pay phone or by running outside the courthouse to find WiFi before dashing back inside again. As one columnist put it, the Manafort trial “may be one of the most Trump-free spaces on the planet at the moment.” The main players in this daily drama — Judge T.S. Ellis III, the lawyers representing Special Counsel Robert Mueller and Manafort’s team of defense attorneys — have had their own reasons for preserving this insular existence. Ellis made it clear from the outset that he did not want the trial devolving into a politically charged circus. The government’s charges against Manafort largely cover the period from 2010 to 2014, predating his stint as President Trump’s campaign chairman. And Manafort’s own lawyers surely saw no benefit in highlighting their client’s connections to Trump before a group of jurors who live in a place that broke heavily for Hillary Clinton in 2016. Now, after 12 long days, the trial is nearly over. Just before 10 a.m. Thursday, the jurors left the courtroom and began their secret deliberations over whether Manafort is innocent or guilty of the 18 counts related to tax and bank fraud brought by Mueller. (Manafort has pleaded not guilty to all of the charges.) The closing arguments delivered Wednesday only underscored the curious nature — and massive stakes — of this case. There was little, if any, mention of Donald Trump, Russia, oligarchs or election interference. But there were discussions about whether Mueller’s office had overstepped its bounds by bringing these specific financial charges against Manafort. It was a line of argument that served as a reminder: A win or loss will equally affect the credibility of the Mueller investigation, its ability to carry on its work and the public’s reception of its eventual findings. More:

Trump responds after hundreds of newspaper editorials criticize his attacks on the press

Hundreds of newspaper editorial boards across the country answered a nationwide call Thursday to express disdain for President Trump’s attacks on the news media, while some explained their decision not to do so. The same morning, the president tweeted that the “fake news media” are the “opposition party.” The editorials came after the Boston Globe’s editorial board called on others to use their collective voice to respond to Trump’s war of words with news organizations in the United States. Trump has labeled the news media “the enemy of the American people” and called much of the coverage “fake news.” “Today in the United States we have a president who has created a mantra that members of the media who do not blatantly support the policies of the current US administration are the ‘enemy of the people,’ ” the Globe’s op-ed board wrote in an editorial published online Wednesday. “This is one of the many lies that have been thrown out by this president, much like an old-time charlatan threw out ‘magic’ dust or water on a hopeful crowd.” The Globe’s editorial board made the appeal last week, urging newspaper editorial boards to produce opinion pieces about Trump’s attacks on the media. These boards, staffed by opinion writers, operate independently from news reporters and editors. As The Washington Post’s policy explains, the separation is intended to serve the reader, “who is entitled to the facts in the news columns and to opinions on the editorial and ‘op-ed’ pages.” The Globe reported Thursday that more than 300 of them obliged. Trump responded to the editorials on the same morning, tweeting that the Globe is “in collusion with other papers on free press” and that many of the media are “pushing a political agenda.” A month after taking the oath of office, Trump labeled the news media “the enemy of the American people.” In the year that followed, a CNN analysis concluded, he used the word “fake” — as in “fake news,” “fake stories,” “fake media” or “fake polls” — more than 400 times. He once fumed, the New York Times reported, because a TV on Air Force One was tuned to CNN. Then last week, at a political rally in Pennsylvania, Trump told his audience that the media were “fake, fake disgusting news.” “Whatever happened to honest reporting?” Trump asked the crowd. Then he pointed to a group of journalists covering the event. “They don’t report it. They only make up stories.”

In response, the Minneapolis Star Tribune’s editorial board wrote:

Let’s start with a fundamental truth: It is and always has been in the interests of the powerful to dismiss and discredit those who could prove a check on their power. President Donald Trump is not the first politician to openly attack the media for fulfilling its watchdog role. He is, perhaps, the most blatant and relentless about it. To this president, the journalist’s time-honored role in a democracy is meaningless. Reporters present a fact-finding counter to the fanciful narrative Trump spins daily. See more responses:

Free Press Gets a Boost With Senate Resolution Declaring It Is Not the Enemy

The Senate on Thursday went on record declaring “that the press is not the enemy of the people” — a rebuke to President Donald Trump, who declares the opposite on a regular basis. Senators adopted by unanimous consent a resolution from Democratic Sen. Brian Schatz of Hawaii and Minority Leader Charles E. Schumer of New York to declare the Senate’s support for a free press and the First Amendment protections afforded to journalists. The resolution text was released the same day 350 newspapers ran editorials designed to push back on Trump’s criticisms of the media. That action provoked a response from Trump, who responded in a series of Thursday morning tweets. “There is nothing that I would want more for our Country than true FREEDOM OF THE PRESS. The fact is that the Press is FREE to write and say anything it wants, but much of what it says is FAKE NEWS, pushing a political agenda or just plain trying to hurt people,” Trump wrote. “HONESTY WINS!” The Schatz-Schumer resolution “reaffirms the vital and indispensable role the free press serves to inform the electorate, uncover the truth, act as a check on the inherent power of the government, further national discourse and debate, and otherwise advance our most basic and cherished democratic norms and freedoms.” “This bill is an opportunity for us to uphold our oath and make clear that we support liberty and free speech,” Schatz said in a statement. “It also sends the message that the legislative branch is capable of functioning as a separate and co-equal branch of government.” The preamble to the measure highlights a number of past debates, including litigation, about press freedoms. It also quotes from the Virginia Declaration of Rights, stating, “The freedom of the Press is one of the greatest bulwarks of liberty, and can never be restrained but by despotic Governments.” “We rely on reporters and newscasters to keep our leaders honest, accountable, and always working in the best interest of the American people. I truly believe that America always solves its problems and combating dangerous and irresponsible attacks on journalism is no exception,” Schumer said in a statement.

Fact Checker Analysis

Who is Bruce Ohr and why does Trump keep tweeting about him?

“Bruce Ohr of the ‘Justice’ Department (can you believe he is still there) is accused of helping disgraced Christopher Steele ‘find dirt on Trump.’ Ohr’s wife, Nelly, was in on the act big time – worked for Fusion GPS on Fake Dossier.”

— President Trump, in a tweet, Aug. 14, 2018

“The big story that the Fake News Media refuses to report is lowlife Christopher Steele’s many meetings with Deputy A.G. Bruce Ohr and his beautiful wife, Nelly. It was Fusion GPS that hired Steele to write the phony & discredited Dossier, paid for by Crooked Hillary & the DNC.”

— Trump, in a tweet, Aug. 11

Who is Bruce Ohr?

Ohr exists in a netherworld — a subject of fascination in right-leaning media, barely a mention in mainstream media. His name last appeared in the pages of The Washington Post in February, and yet President Trump keeps tweeting about him. White House press secretary Sarah Huckabee Sanders, in announcing that Trump had revoked the security clearance of former CIA director John Brennan, listed the names of other people who also faced revocation of clearances. Ohr’s name was on the list.

We have previously tried to explain the roles of former British agent Christopher Steele and Fusion GPS in the investigation of Russian interference in the 2016 election. Ohr is less of a central player, but as a reader service, we will try to disentangle the president’s tweets and explain what is known – and unknown – about Ohr’s actions. We will not offer a Pinocchio rating.

The Facts

First, let’s take a look at the key players. Fusion GPS was started by a group of former Wall Street Journal reporters, notably investigative reporter Glenn R. Simpson. Fusion in 2015 began investigating Trump under a contract with the Washington Free Beacon, a conservative website financially supported by GOP megadonor Paul Singer. That assignment ended once Trump was on track to win the nomination. But in April 2016, Fusion was hired by the Hillary Clinton campaign and the Democratic National Committee to keep funding the research. (Marc E. Elias, a lawyer representing the Clinton campaign and the DNC, retained the firm.) Steele, a former British intelligence officer with ties to the FBI and the U.S. intelligence community, was hired by Fusion to examine Trump’s ties in Russia. Steele was the author of the “dossier” alleging ties between Trump and Russia; the dossier is actually several memos, based on conversations with Russian sources, that were written between June and December of 2016. More:

GOP’s midterm peril: What if they win on killing Obamacare?

MISHAWAKA, Ind. — Republican candidates are trying to have it both ways on Obamacare. On one hand, Republicans are still campaigning against the law, arguing a strong election result will allow them one more shot at repealing the Affordable Care Act with GOP majorities in both chambers. And many high-profile Senate GOP candidates support a lawsuit that would scuttle Obamacare if successful in the nation’s courts, a case that will be heard by a federal judge in September. Yet at the same time Republicans are still touting the law’s most popular provisions, arguing that after it is struck down they will be able to preserve protections for pre-existing conditions by passing a new bill. GOP challengers in four of the most competitive Senate races support the lawsuit. “Sure, anything that’s going to actually get rid of it, yes,” said Indiana GOP Senate nominee Mike Braun of the GOP lawsuit to gut the law in an interview in Mishawaka. “And then be ready to come back and talk about what you’re ready to do about pre-existing conditions and no limits on coverage. That’s where you don’t hear much conservative talk.”

The problem? Congress has shown no ability to pass new healthcare legislation under Republican rule or work across party lines, raising severe doubts that the GOP would be able to fulfill its promises to both kill the law and maintain its popular provisions. More:

Omarosa releases recording of $15K-per-month job offer from Lara Trump

Omarosa Manigault Newman on Thursday released a recording of what appeared to be President Donald Trump’s daughter-in-law and campaign adviser Lara Trump offering the former “Apprentice” star a job on the president’s campaign for $15,000 a month — an offer Manigault Newman said she saw as an “attempt to buy” her silence. The newly released tape, one of multiple to come out this week, is the first since Trump’s campaign filed an arbitration proceeding against Manigualt Newman alleging that she violated a 2016 nondisclosure agreement, an accusation Manigault Newman has denied. The recording also appears to authenticate the claim Manigault Newman made in her recently released book, that she was offered a $15,000-per-month job with the Trump campaign after being fired by the administration.

“The president has said he’s happy I was fired, I’m a lowlife, I’m a dog, all these things. But then you find out behind the scenes they’re saying how awesome I am and how great I am and I should come on the campaign,” Manigualt Newman said in an interview with MSNBC. “So, really, what is it, which one of it is it? Is it that they supported me or they want me out?” The recording between Manigualt Newman and Lara Trump was released exclusively to MSNBC, with four clips of the conversation, selected by Manigault Newman, played on air. MSNBC disclosed a producer for the network listened to the whole recording. In the recording, Lara Trump, a top official with the Trump campaign and the wife of the president’s son Eric Trump, begins by talking about a New York Times article written by reporter Maggie Haberman. More:

“Death Spiral”: Why Omarosa Totally Triggered Trump

In the days before Omarosa Manigault Newman rolled out her White House tell-all, Unhinged, Donald Trump’s advisers were hoping he wouldn’t engage with the book, believing it would only elevate her claims and help sell more copies. “Just ignore it,” one told me, while even Melania Trump told her husband to let it go, Axios reported. Of course, this being Donald Trump, he ignored their counsel and went to war. Now advisers fear his rage at Manigault Newman is fueling irrational outbursts that bolster the claim in her book that Trump said the “n-word” during an Apprentice outtake. In recent days, Trump has called Manigault Newman “crazed,” a “lowlife,” and a “dog” on Twitter. His campaign filed an arbitration suit against her seeking “millions.” And Trump told advisers that he wants Attorney General Jeff Sessions to have Manigault Newman arrested, according to one Republican briefed on the conversations. (It’s unclear what law Trump believes she broke.) Another Republican recounted how over the weekend Trump derailed a midterm-election strategy session to rant about Manigault Newman’s betrayal. In an effort to change the narrative, the White House announced yesterday that Trump had revoked former C.I.A. director John Brennan’s security clearance. But that only ignited a new public-relations crisis. A former West Wing official compared Trump’s erratic behavior this week to the P.R. nightmare he created by attacking grieving Muslim-American Gold Star parents during the 2016 campaign. It’s a “death spiral,” the former official said. Advisers and friends offered differing theories to explain Trump’s nuclear response to a book that has failed to top the best-seller list, even while Trump has campaigned against it. “He’s known her for 15 years and thinks it’s a personal betrayal,” the former West Wing official said. Others said Manigault Newman’s well-oiled media rollout ignited Trump’s fury. “She is doing everything perfect if her ultimate goal is to troll Trump,” another former official said. One longtime Trump friend said Trump is so reactive to Manigault Newman’s book because he instinctively trusts women more than men. Throughout his career, he has allowed women to get close to him, from his early assistant, Norma Foerderer, to Rhona Graff, to Hope Hicks. Meanwhile, former Trump aide Sam Nunberg told me that Trump is lashing out because he sees Manigault Newman as a “formidable enemy.” “Hell hath no fury like Omarosa scorned,” Nunberg said.

NYT: Omarosa believed to have as many as 200 tapes

Former White House staffer Omarosa Manigault Newman is reportedly believed to have scores of recordings from her time working for President Trump, leaving other aides concerned. The New York Times reported on Thursday that the former White House aide could have as many as 200 tapes that may contain information about the president and people close to him. The newspaper reported that a number of Trump administration aides have expressed concern that they too will make an appearance on Manigault Newman’s other tapes, as she continues to release bombshell recordings in promotion of her new tell-all book, “Unhinged.” The report arrives on the heels of a recording released by Manigault Newman on Thursday morning showing the president’s daughter-in-law, Lara Trump, offering the former aide a job following her dismissal from the White House last year. More:

Trump has now fired or threatened most senior officials related to the Russia investigation

President Trump says that although he has never obstructed justice in the Russia investigation, he does “fight back.” And, as of Wednesday, he had “fought back” against a majority of top officials involved in leading, overseeing or making administration decisions about that probe. According to an analysis by The Washington Post, of the more than a dozen officials with what could be construed as leadership roles in the investigation, more than half have been fired and/or threatened with official recourse. The most recent examples were the White House’s revocation of former CIA director John Brennan’s security clearance Wednesday and the threats to do the same for nine other current and former officials who have run afoul of Trump. In one fell swoop, the White House effectively more than doubled its enemies list — and served notice that ex-officials who were involved in the probe will not be permitted to criticize Trump willy-nilly. Not all the firings have come directly from Trump or relate directly to the probe; FBI officials Andrew McCabe and Peter Strzok, for instance, were terminated by the bureau after highly critical inspector-general reports, and former acting attorney general Sally Yates refused to defend Trump’s travel ban in court. But Trump has targeted all of them, and all three also saw their security clearances threatened Wednesday (even as McCabe and Strzok don’t appear to have them anymore).

Here’s a rundown:

Attorneys general

Loretta E. Lynch: Has not been criticized by Trump for Russia investigation but has been for Clinton investigation

Sally Yates (acting): Fired for refusing to defend Trump’s travel ban, security clearance threatened

Jeff Sessions: Threatened with firing or being forced out via tweets and private comments

Rod J. Rosenstein (acting for Russia investigation in light of Sessions’s recusal): Threatened repeatedly

FBI director

James B. Comey: Fired, security clearance threatened (despite apparently not having one)

Andrew McCabe: Fired for issues unrelated to Russia probe (with Trump’s approval and after strong Trump criticisms), security clearance threatened

Leading Russia probe

Peter Strzok (as top FBI counterintelligence official): Fired for issues unrelated to Russia probe, security clearance threatened

Robert S. Mueller III (as special counsel): Threatened with firing, which Trump reportedly attempted twice

CIA director

John Brennan: Security clearance revoked

Mike Pompeo: Trump ally who later became secretary of state


Sessions vows to “vigorously” prosecute makers of 3D-printed guns

Attorney General Jeff Sessions on Thursday warned that the Justice Department will “vigorously enforce” the federal prohibition of producing undetectable 3D-printed firearms “to the fullest extent.”

“We will not stand for the evasion, especially the flaunting, of current law and will take action to ensure that individuals who violate the law by making plastic firearms and rendering them undetectable, will be prosecuted to the fullest extent.”

— Sessions said in a statement

The backdrop: This stern caution comes a day after Sessions’ own department asked a federal court to lift an injunction that blocks the public from downloading the blueprints. Almost a dozen states, led by Washington, have sued the State Department for allowing a pro-gun group to publish the files online, arguing it’s a threat to public safety and that terrorists could use undetectable plastic weapons to evade detection.

President Trump had expressed skepticism over 3D-printed guns, which had prompted widespread debate and outrage. “I am looking into 3-D Plastic Guns being sold to the public. Already spoke to NRA, doesn’t seem to make much sense!” Trump tweeted in July.

A new Axios/SurveyMonkey poll this week found that eight out of 10 Americans say they believe 3D-printed gun blueprints should not be available online, a rare consensus on gun policy that cuts across party and ideological lines.–61c1289e-06d2-48b7-8b1a-a94e18341162.html

Children poisoned by lead on U.S. Army bases as hazards go ignored

FORT BENNING, Ga. – Army Colonel J. Cale Brown put his life on the line in two tours of duty in Afghanistan, earning a pair of Bronze Stars for his service. In between those deployments, Brown received orders to report to Fort Benning, the sprawling Georgia base that proudly describes itself as the century-old home of the U.S. infantry. He was pleased. His wife, Darlena, was pregnant with their second child, and the Browns owned a home in the area. Their 10-month-old son, John Cale Jr, was a precocious baby, babbling a dozen words and exploring solid foods. Cale’s duties as a battalion commander required him to live on base. So instead of moving into their own house, in 2011 the Browns rented a place inside Fort Benning. The 80-year-old white stucco home had hosted generations of officers. Like most family housing on U.S. bases today, the home wasn’t owned and operated by the military. It was managed by Villages of Benning, a partnership between two private companies and the U.S. Army, whose website beckons families to “enjoy the luxuries of on-post living.” The symptoms began suddenly. At 18 months, JC would awake screaming. He began refusing food, stopped responding to his name and lost most of his words. “He was disappearing into an isolated brain,” Darlena recalls. For nearly a year, doctors probed: Was it colic? Autism? Ear infections? Then, in late 2012, came a call from JC’s pediatrician: He had high levels of lead in his blood. When Darlena told Villages of Benning of his poisoning, contractors ordered home testing. The results: At least 113 spots in the home had lead paint, including several peeling or crumbling patches, requiring $26,150 in lead abatement. Villages of Benning moved the Browns into another old house next door. The heavy metal had stunted JC’s brain, medical records reviewed by Reuters show. At age two, he was diagnosed with a developmental disorder caused by lead. Now eight, JC has undergone years of costly therapy. He excels at reading and swimming, but still struggles with speech, hyperactivity and social interactions. More:

$92M is new estimate for Trump military parade; big increase

WASHINGTON (AP) — A U.S. official says the Veterans Day military parade ordered up by President Donald Trump would cost about $92 million — more than three times the maximum initial estimate.

The official — who spoke on condition of anonymity to discuss plans that haven’t been released yet — says about $50 million would cover Pentagon costs for equipment, personnel and other support for the November parade in Washington. The remainder would be borne by other agencies and would include security costs. Details are not final and haven’t been approved by Defense Secretary Jim Mattis. The White House budget office earlier estimated to Congress the parade would cost between $10 million and $30 million. Trump decided he wanted the parade after he attended France’s Bastille Day celebration in Paris last year.$92M-is-new-estimate-for-Trump-military-parade;-big-increase

Trump’s military parade delayed until 2019

The controversial military parade ordered by President Donald Trump originally scheduled for Veterans Day will be delayed until 2019, the Pentagon announced Thursday night. The Defense Department, which initially planned the parade for November to coincide with Veterans Day weekend and the 100th anniversary of the end of World War I, did not give a reason for the abrupt change of plan, simply issuing a statement that said it has “agreed to explore opportunities in 2019.” The announcement came only hours after a report by CNBC that the estimated cost of the parade is now as much as $92 million — much more than previous estimates of $12 million to $30 million. Trump originally asked for the military to organize such an event after seeing similar demonstrations on Bastille Day in France, but lawmakers on both sides of the aisle criticized the pomp and circumstance as reminiscent of authoritarian regimes.

The parade is expected to include marching troops from different branches as well as a “heavy air component” of modern and historic war planes, the Pentagon said in March. But it will not include some of the heaviest military hardware like tanks to avoid damaging roads between the White House and the Capitol like the last one did in 1991 after the Persian Gulf War. The White House did not immediately respond to a request for comment.

Trump cancels military parade, blaming DC for cost

President Trump on Friday said that he was canceling plans for a military parade, blaming a $92 million price tag and local politicians in Washington, D.C. The cost of the parade had appeared to be escalating, with reports on Thursday estimating it would be $80 million more than previously estimated at a time of rising debt. Trump said “local politicians” in D.C. were responsible for the cost in announcing the cancelation, thought he offered no specific evidence. “The local politicians who run Washington, D.C. (poorly) know a windfall when they see it. When asked to give us a price for holding a great celebratory military parade, they wanted a number so ridiculously high that I cancelled it. Never let someone hold you up! I will instead attend the big parade already scheduled at Andrews Air Force Base on a different date, & go to the Paris parade, celebrating the end of the War, on November 11th,” Trump wrote. “Maybe we will do something next year in D.C. when the cost comes WAY DOWN,” he added. “Now we can buy some more jet fighters!”

U.S. Sues Operators Of Pirate Texas Station Known As ‘Alex Jones Radio’

The U.S. government says the operators of a station considered the “flagship” radio outlet for conspiracy theorist Alex Jones must pay a $15,000 FCC penalty for broadcasting without a license. The station’s operators have rejected the demand and accuse the Federal Communications Commission of “trying to run a bluff.” To collect the debt, the Justice Department recently filed a civil suit against Walter Olenick and M. Rae Nadler-Olenick, demanding the married couple pay the FCC’s penalty “for willful and repeated violation” of U.S. law. They’re accused of operating a pirate radio station; Texas Liberty Radio has been unlicensed at least since 2013, according to the FCC. On its website, Texas Liberty Radio says it stopped broadcasting when it lost tower access in December 2017. But for years, the Olenicks have been fighting the FCC’s attempt to enforce federal laws, insisting the agency doesn’t have any power over them. Texas Liberty Radio is the “Austin flagship” for Jones, according to the Austin American-Statesman. The Associated Press and Inside Radio also referred to it as the flagship — raising the ire of one of the station’s hosts, Danny Sessom, who said late Wednesday night that TXLR only rebroadcasts Jones’ radio show. Calling it anything else, he said, was “actual fake news.” But in Austin, the 90.1 FM frequency has long been associated with Jones. When the FCC first penalized the Olenicks in 2014, The Austin Chronicle noted that 90.1 “has aired New World Order warnings for more than a decade, earning it the nickname ‘Alex Jones Radio.’ “In a string of correspondence with the FCC, the Olenicks dismissed the agency’s claims against them as preposterous and unfounded, saying in essence that they never agreed to be regulated by the U.S. government. More:

DOJ Sues Ivanka’s Ex-Business Partner for Massive Fraud

he Justice Department is suing a friend and former business partner of Ivanka Trump for his alleged role in schemes to defraud the federal government out of millions of dollars in tax liabilities on his father’s estate. Filed last month and reported here for the first time, the suit follows an August 2017 POLITICO investigation of alleged financial wrongdoing by New York businessman Moshe Lax and glaring irregularities in the Internal Revenue Service’s handling of a $27 million lien on his father’s estate.

The suit, which seeks more than $60 million in unpaid tax liabilities, was brought in the Southern District of New York by lawyers in the Justice Department’s tax division. It alleges that Lax, his sister Zlaty Schwartz, and his late father, Chaim Lax, engaged in a series of complex “sham transactions” designed to fraudulently evade tax liability.The government alleges the family members undertook 10 separate schemes “designed to hide the Lax family assets from the IRS and other creditors and make it appear as though the Estate was insolvent.” At a time when Democrats are working to make corruption a midterm campaign issue and a jury deliberates over whether to convict President Donald Trump’s former campaign manager for tax fraud, the suit threatens to further the perception that the Trump family and their closest associates operate in a corrupt milieu. Though the complaint does not mention Trump or accuse her of wrongdoing, Madison Avenue Diamonds, the business that Trump helped run for years under the name Ivanka Trump Fine Jewelry, figures prominently in the government’s case. More:

Melania Trump, a Mysterious First Lady, Weathers a Chaotic White House

WASHINGTON — Hours after Melania Trump moved into the White House in June of last year, she peered out a window and took in a stunning view of the Washington Monument: “Looking forward to the memories we’ll make in our new home!” the first lady cheerily wrote on Twitter in a snapshot of the tableau. But Mrs. Trump understood even then that her efforts to forge her own role would be second-guessed and scrutinized at every turn, including by her spouse. Mrs. Trump, a former fashion model who prefers clean, modern lines, had chosen some furniture for the White House residence in the months before she joined her husband in Washington. Yet in her absence, President Trump — whose tastes veer toward the gilded, triumphal style of Louis XIV — replaced her choices with several pieces he liked better. One of two people familiar with the episode cited it as an example of Mr. Trump’s tendency not to relent on even the smallest requests from his wife. A little more than a year later, Mrs. Trump remains an intensely private first lady still adjusting to the demands of a new life. She has few friends in Washington, keeps a light public schedule and when not watching over her 12-year-old son, Barron, returns home to New York — at least once per month, two people close to her say — for meetings and to visit a small circle of associates, including her sister and her hairstylist. More:

FCC chair says White House lawyer asked about status of Sinclair deal

The White House’s top lawyer made contact with Federal Communications Commission Chairman Ajit Pai to inquire about its review of the purchase of Tribune Media stations by the conservative broadcaster Sinclair, Pai told a Senate committee on Thursday.

Why it matters: The FCC — and merger reviews generally — are supposed to be independent from the White House. Pai explained, “no one has called from the White House to express a view. We received one status inquiry.”

The details: Pai said he spoke with McGahn on July 16 or July 17. On July 16, Pai expressed “serious concerns” about the deal and moved to send parts of the transaction to an administrative law judge in a move that can prove fatal for a merger. Tribune has since dropped out of the deal and is suing Sinclair.

  • “He saw something in the news and wanted to know what our decision was — or what the [proposed] action was,” Pai said. “He just wanted to know what it was.”
  • McGahn made the call after the chairman had gone public with his concerns, according to an FCC spokesperson.

President Trump criticized Pai over his decision on the deal in a tweet on July 24.

  • “So sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune,” Trump said. “This would have been a great and much needed Conservative voice for and of the People.”

Walmart And Others Offer Workers Payday Loan Alternative

Even in a strong economy, many Americans live paycheck to paycheck. Forty percent don’t have $400 to cover an emergency expense, such as a car repair. And many working-class people turn to payday loans or other costly ways to borrow money. But more companies are stepping in to help their workers with a much cheaper way to get some emergency cash. Startup companies that offer better options for workers are partnering with all kinds of businesses — from giants like Walmart to little fried chicken restaurants.

“This is where it all happens; this is kitchen here,” says cook Keith Brown as he walks past the ovens and big bowls of flour at Lee’s Famous Recipe Chicken in Richmond, Va. He and the crew are gearing up for the lunchtime rush. The restaurant owner, Henry Loving, noticed over the years that many of his workers here were getting burned. Not with fry oil, but by high-cost loans they would get stuck in. “You know, a lot of times the folks that I have working for me are tight on money and they’ll go out and do payday loans or something like that,” says Loving. “And by the time I get wind of it, it’s too late and they’re in all kinds of extra hard trouble trying to get that paid off.” More:


Saban, Bama seek title with old challenges, new faces

TUSCALOOSA, Ala. (AP) — Alabama and Nick Saban begin the quest for their sixth national title as college football’s ultimate power couple with many of the same old challenges — and lots of new faces.

The Crimson Tide must replace a bounty of NFL talent, especially on defense, like usual. What’s new: six assistant coaches, both coordinators, pretty much the entire secondary and maybe the starting quarterback. The quarterback battle between 28-game starter Jalen Hurts and Tua Tagovailoa has hogged the headlines, overshadowing the fact that eight members of the nation’s top defense were drafted. Gone are the starting secondary, including All-American Minkah Fitzpatrick , and a top reserve.

“That’s probably the least amount of returning experienced players that we’ve ever had,” Saban said.
Nonetheless, Alabama faces its typical expectations of contending for Southeastern Conference and national titles and keeping a perfect string of four playoff berths intact. The Tide has won five national championships in the past nine years and is widely considered the favorite to win No. 6 next January. Saban, who also won a title at LSU, and Bear Bryant are the only major college coaches to win six national championships. Now, the fit-and-trim 66-year-old is flush with an eight-year, $74 million contract and showing no signs of slowing down. Nor is his program. Veterans like tailback Damien Harris already are acquainted with the challenges of trying to repeat as national champs. The Tide fell just short of pulling that feat off in 2016. “The mindset going into this season is that we know our success isn’t going to be inherited,” Harris said. “Anything we accomplish as a team this season is not going to come from the fact that we won a national championship last year. “If anything, it is just going to make it that much harder. We know that winning a national championship puts a target on your back.”

Sex abuse in Alabama included in report on priests in Pennsylvania

A priest from Pennsylvania sexually abused two boys on a trip to Mobile in the 1980s and was charged in 1990, according to a Pennsylvania grand jury report this week that revealed details of sexual abuse by 301 priests. The report mentions several priests who had connections to Alabama. Father Gary L. Ketcham, also referred to in some documents as Ketchum, was accused of drunkenly molesting two boys while visiting friends in Mobile, the Diocese of Erie learned sometime prior to March 1989. Ketcham was sent to therapy when the diocese found out about the Mobile incident, and was housed at the diocese-owned treatment facility called the Ecclesia Center, the report said. In September 1989, the diocese loaned Ketcham $5,000 for attorney fees, the first of several loans to Ketcham. The grand jury found a promissory note to Ketcham from the diocese in which they pledged to front him $25,000 for lawyer fees and bond. The director of clergy personnel wrote, “Don’t worry… you’re good for it.” Ketcham pleaded guilty to both felony counts and was ordered to pay a $15,000 fine, according to the grand jury report.

In 2002, a laicization process was started to formally remove Ketcham from the church. Ketcham was laicized in 2004. The grand jury report, released Tuesday by the Pennsylvania attorney general, detailed sexual abuse by priests in Pennsylvania and a cover-up by church leaders over several decades. The investigation documented 301 priests who sexually abused children while serving in active ministry for the church. The report included accounts of more than 1,000 sexually abused youth. Alabama was also mentioned in the case of Father Gregory P. Furjanic, a defrocked priest who later attempted to obtain credentials as a Lutheran minister in Mobile and St. Petersburg, Fla. In 2005, Lutheran Social Services in St. Petersburg, Fla., contacted the Diocese of Erie to investigate Furjanic, who had his priestly authority removed in 1996 after allegations of sexual abuse. He represented himself as a clergy member associated with Lutheran ministry and had the title “Reverend” on his business cards. More:

Federal appeals court reverses decision involving Jefferson County bankruptcy case

A federal appeals court has overturned a lower court’s ruling that had allowed a legal challenge by residents of Jefferson County’s bankruptcy settlement to go forward. An 11th Circuit Court of Appeals opinion issued Thursday ruled the district court’s order is reversed, and ordered for the “dismissal of the ratepayers’ appeal from the plan confirmed by the bankruptcy court.” Their ruling came nearly four years after U.S. District Court Judge Sharon Blackburn refused to toss out a lawsuit by a group of sewer customers who wanted to see the county’s bankruptcy exit plan unraveled. “We note, in concluding, that no party has so far asked the bankruptcy court to exercise its jurisdiction to force Jefferson County to adjust its sewer rates according to the provisions of the confirmed plan. We therefore express no view on whether the ratepayers (or anyone else) will be able to mount a challenge to aspects of the plan in the future should the bankruptcy court in fact purport to exercise its jurisdiction to compel an increase in rates in compliance with the plan,” the appeals court’s ruling stated. On Dec. 3, 2013, Jefferson County exited bankruptcy after completing the refinancing of its sewer debt. That debt was the centerpiece of the county’s plan for exiting its $4.23 billion bankruptcy. A group made up mostly of local elected officials appealed the bankruptcy judge’s decision to approve the county’s bankruptcy plan, because they said it would unreasonably raise rates for sewer customers for 40 years to come.  County officials asked Blackburn to dismiss that appeal, stating the claims were moot since the exit plan had already been consummated. In September 2014, the judge ruled that the ratepayers could continue their appeal and said consummation of the plan didn’t make that appeal entirely moot. “The fact that the (bankruptcy) Confirmation Order has taken effect – the new sewer warrants have issued and the old sewer warrants have been retired – does not extinguish the controversy, although it may limit the scope of relief available” to sewer customers, Blackburn wrote in her order. County Commissioner David Carrington said Thursday he was pleased, but not surprised at the appeal’s court’s ruling. “As reported in times past, the County was always confident in our Chapter 9 Plan of Adjustment,” he said. More:

Jay Roberson resigns from Birmingham City Council

Birmingham City Council President Pro Tem Jay Roberson is resigning from his post effective Sept. 10.

Roberson made the announcement today at Lawson State Community College. Roberson said he is stepping down because his wife, Niva, received a promotion and “dream job” with Alabaster City Schools. He didn’t release what job his wife received. Alabama City Schools hasn’t responded to a request for information on Niva Roberson’s employment. “To perform her duties in this role, we will be moving to the neighboring city of Alabaster as a family,” Roberson said. “My decision to step down makes today one that is filled with emotion.” “I am very proud of the record we have established,” he added. “Even more, I am proud that we established our record of success scandal free.” Roberson has served District 7 on the council since 2009. At the podium today, Roberson was surrounded by his wife, two sisters and his parents, James and Linda. Roberson was also supported by his colleagues on the council, John Hilliard, Hunter Williams, Sheila Tyson and Council President Valerie Abbott. Birmingham Mayor Randall Woodfin and former Mayor William Bell also attended the press conference. “It is a big loss for the council — a big loss of experience,” Abbott told of Roberson’s resignation. More:


Revoke my security clearance, too, Mr. President

William H. McRaven, a retired Navy admiral, was commander of the U.S. Joint Special Operations Command from 2011 to 2014. He oversaw the 2011 Navy SEAL raid in Pakistan that killed al-Qaeda leader Osama bin Laden.

Dear Mr. President:

Former CIA director John Brennan, whose security clearance you revoked on Wednesday, is one of the finest public servants I have ever known. Few Americans have done more to protect this country than John. He is a man of unparalleled integrity, whose honesty and character have never been in question, except by those who don’t know him. Therefore, I would consider it an honor if you would revoke my security clearance as well, so I can add my name to the list of men and women who have spoken up against your presidency. Like most Americans, I had hoped that when you became president, you would rise to the occasion and become the leader this great nation needs. A good leader tries to embody the best qualities of his or her organization. A good leader sets the example for others to follow. A good leader always puts the welfare of others before himself or herself. Your leadership, however, has shown little of these qualities. Through your actions, you have embarrassed us in the eyes of our children, humiliated us on the world stage and, worst of all, divided us as a nation. If you think for a moment that your McCarthy-era tactics will suppress the voices of criticism, you are sadly mistaken. The criticism will continue until you become the leader we prayed you would be.

Alabama Dem leader Joe Reed on Doug Jones’ failed power move: “George Wallace tried it, too”

This is an opinion column.

Joe L. Reed has seen the power move before; he didn’t like it then, either. It was 1974 and the perpetrator was none other than George Wallace, then in his second stint as Alabama’s Governor. Wallace’s Democrats were the strongest party in the state but that was changing fast as the national party increasingly embraced a civil rights agenda driven largely by protests, actions, and crimes that took place in Alabama. That strategy was, of course, anathema to Wallace’s “state’s rights” (read: segregationist) faction of the Alabama party, and the group tried one last time to avert outright extinction. Eight years earlier, Robert Vance‘s election as state party chair had come in the wake of the passages of the Civil Rights Act of 1964 and the Voting Rights Act of 1965 and was the first significant manifestation of the state Democratic party’s transition from the party of white segregationists to a more inclusive party.

Reed, the long-time head of the Alabama Democratic Caucus–the state party’s black caucus–recalls Wallace, then paralyzed from the waist down due to an assassination attempt two years prior, rolling his wheelchair onto the floor in the room at the prestigious Parliament House in Birmingham in 1974 where the Democratic Executive Committee was holding elections. “There was a big battle,” Reed said. “Governor Wallace came on the floor where the delegates were and nominated [Florence attorney and former State Senator] Bert Haltom to run against Vance. The delegates rejected it and reaffirmed our support for chairman Robert Vance [by a 66-51 vote]. “The same thing,” Reed said, “happen this weekend.” Reed, who turns 80 in November, was talking about fresh-off-the-ballot Sen. Doug Jones’ failed–and somewhat embarrassing–effort last Saturday to boot current party chair Nancy Worley and replace her with Montgomery attorney and lobbyist Peck Fox. Like Wallace, Jones came before the Democratic Executive Committee–this time the site was the Davis Theater for the Performing Arts in Montgomery–and nominated an opponent to run against the sitting chair. “This party needs to build,” Jones told committee members. “We need change. And the only way to get change is to have change.” It was a pure power move, played with bravado–and a little bit of nerve. And, like Wallace’s, it went pfft. “Our faction stuck together—like glue,” Reed said. “All over the state.” Although the 101-89 vote for Worley was face-saving close, it was still a very high-profile blow to the state’s most visible Democrat. More:

Dan Rather and Elliot Kirschner: Why a Free Press Matters

America’s Founding Fathers, after breaking free from monarchical subjugation, were determined to construct a government of checks and balances on absolute concentrated power. So they created a federal system that differentiated between state and national control, as well as three branches of government with distinct powers and responsibilities that had to answer to one another. But, not satisfied that that was enough, they added 10 amendments to the Constitution. And in the very first of those amendments, they established what has become an insurance policy for the continued health of the republic: a free press. As a working journalist, I know I have a stake in this concept. But as a grandfather who wants to see his grandchildren live in a country at least as free as the one I have enjoyed, a free press is even more relevant now than ever. The role of the press is to ask hard questions and refuse to be deterred even when someone powerful claims, “Nothing to see here.” At first glance, it might seem as if the press is a destabilizing force: It can undermine the credibility of our elected officials and ultimately our confidence in government. It can drive down stock prices and embolden our nation’s critics and enemies. It can uncover inconvenient truths and stir divisions within our society. But our Founders understood that long-term accountability is more important than short-term stability. Where would America be without the muckrakers of the progressive era, like Ida Tarbell, who uncovered the perfidy and immorality of the Standard Oil monopoly under John D. Rockefeller; without The New York Times’ publication of the Pentagon Papers, which exposed the lies around the Vietnam War; without the dogged work of The Boston Globe in documenting sexual abuse within the Catholic Church? Because of the press, powerful institutions were held accountable for their actions, and we became a stronger nation. The institution of a free press in America is presently in a state of crisis greater than I have ever seen in my lifetime, and perhaps in any moment in this nation’s history. The winds of instability howl from many directions: a sustained attack on press freedom from those in political power, crumbling business models, rapidly changing technologies, and some self-inflicted wounds. This is a test, not only for those of us who work in journalism, but also for the nation as a whole. More:

Donald Trump Is a Dangerous Demagogue. It’s Time for a Crusading Press to Fight Back.

When Adolf Hitler came to power, after the Nazis had shut down all of Germany’s independent newspapers and magazines and ended press freedom in the country, Hermann Ullstein, a member of a highly regarded German publishing family, fled to New York and wrote a penetrating memoir of the rise and fall of his family’s media empire. His father, Leopold Ullstein, a Jewish newspaper dealer, had founded Ullstein Verlag, the family publishing house, which at its pre-Nazi peak owned some of Germany’s most important publications, including the Vossische Zeitung newspaper. But when Hitler stole their press holdings, Hermann Ullstein and other family members fled, and by World War II, the Ullstein presses were being used to print Das Reich, a newspaper created by Nazi propaganda minister Joseph Goebbels. From his refuge in New York, Hermann Ullstein wrote critically of the failure of the German press to confront Hitler more aggressively when it still had a chance — before he came to power. In his 1943 book, Ullstein chastised the mainstream press in Germany for being too cautious in the pre-Nazi years, especially in comparison to the aggressive right-wing media that was rising during the late 1920s and boosting Hitler’s political fortunes. He lamented the weak response of  “the loyal press,” his phrase for the pre-Nazi mainstream press “whose efforts were devoted to democracy, and whose failure was to a large extent due to mildness of language, to the tired and cautious spirit in which they fought.” Hermann Ullstein’s criticism of the mainstream press of the pre-Nazi era would sound eerily familiar to anyone following the American media today as it tries to confront Donald Trump. Trump has repeatedly castigated the American press as “the enemy of the people” and has brought his political supporters to such a crazed pitch that many of them now consider journalists to be traitors.  Some of Trump’s backers even seem to think that physical attacks on reporters are acceptable. Trump uses his Twitter account to maliciously attack individual reporters, and journalists covering Trump’s dark and fevered rallies are now being forced to hire security personnel to protect themselves from the crowds. Trump seeks to discredit the mainstream press at every turn, while granting preferential access to news organizations that traffic in right-wing propaganda and conspiracy theories. More:

Morning Money

STEEL COUNTRY ON EDGE — Greetings from western Pennsylvania where MM is on a reporting trip with POLITICO producer Jenny Ament for a podcast and story coming next week on the impact of President Donald Trump’s tariffs on imported steel and aluminum.

We won’t spoil it here but just offer a little taste. The tariffs are largely popular with steel makers but even some of the workers we spoke with expressed distrust of whether Trump really has their long-term best interests at heart. And they are not all sold on the idea that the tariffs will really bring American steel production anywhere near back to its glory days.

And workers and managers who buy steel are flat out panicked by the tariffs as they see their costs rising and wonder whether the tariffs will ultimately cost them their solid, well-paying jobs. This is still largely Trump country outside the metro-Pittsburgh area. But the president’s vulnerabilities – and the wider danger to Republicans in November – are on full display here. Stay tuned and sign up here for the POLITICO Money pod so you don’t miss it.

KUDLOW TALKS UP CHINA TALKS — One thing we heard over and over in Pa. was that Trump should focus more directly on China when it comes to dumping practices and not use such broad tariffs. Well, at least NEC director Larry Kudlow says talks are finally back on again with the Chinese.

From his Fox News interview: “We’re making great headway in Europe, making headway in Mexico. We’ve got a Chinese delegation coming next week, kind of second-level delegation. Maybe they’ll reopen those talks. I particularly am optimistic about Europe and Mexico.”

Freedom Partners Executive Vice President Nathan Nascimento on the China news: “Tariffs are nothing short of a tax on American businesses and consumers. It is a self-destructive policy threatening to undermine the tremendous growth our economy experienced in the past two years. …

“We’re encouraged by news that leaders from Beijing and Washington will meet this month to re-start a trade dialogue. Ultimately, that is a better path to create more American jobs and achieve tariff-free trade than a trade war.”

SPEAKING OF TARIFFS — Another dark side emerges in the exemption application process which infers great power on DC officials and tends to deepen rather than drain the swamp.

Alison Acosta Winters in National Review: “What’s less reported, though increasingly problematic, is that [tariff] proliferation has empowered government bureaucrats ill-suited to the task to pick industry winners and losers. …

“Career employees at the Department of Commerce generally have no industry expertise to balance the arguments, yet they must judge the petitions as if they did. Already, more than 20,000 exemption requests have been filed with the government. They have overwhelmed the feds, who are falling short of their initial goal of a 90-day response.” Read more.

FIRST LOOK: FIN TECH REPORT— Per release going out Friday from Rep. Emanuel Cleaver, II (D-Mo.): “While many FinTech companies claim their algorithms protect against discrimination, many respondents failed to demonstrate how they protect consumers from unintentional discrimination. It is imperative that automated lending algorithms avoid geographical and race-based biases.

“Companies mentioned in this investigation include LendUp, Fora Financial, Biz2Credit, Kabbage, LendingClub, and OnDeck Capital, Inc. It should be noted that LendUp is in fact a consumer lending company, however they agreed to participate in this investigation.”

“The initial findings are clear as day. We need to further understand how lenders may be intentionally or unintentionally offering higher interest rates to minorities and underserved communities, and work to implement industry-wide best practices” said Congressman Cleaver.” Read more.

CAMP KOTOK REPORT — David Kotok shared the results of his survey of close to 30 top econ watchers who attended this year’s Camp Kotok fishing/wonk weekend at Leen’s lodge in Maine. The median forecast for the jobless rate in June of 2019: 3.9 percent. The median forecast for GDP growth from Q2 2018 to Q2 2019: 2.73 percent.

TRUMP VS NEW YORK — POLITICO’s Annie Karni: “Even in the West Wing, all politics is local. … Trump — raised in Queens, made in Manhattan — in the past week is finding his latest targets back home, turning New York political leaders into liberal punching bags that offer him familiar and useful foils ahead of the midterm elections.

“It’s an old political playbook — attack elite, liberal New York, and the heartland loves you — but it’s also personal for Trump, whose relationships with some of New York’s political leaders go back generations. … For a president whose actions are often driven by knee-jerk responses to criticism, rather than any planned political strategy, running against New York is seen as a mix of opportunity, muscle memory and method.” Read more.

DRIVING THE DAY— President Trump fundraisers in the Hamptons before heading to Bedminster … Index of Leading Indicators at 10:00 a.m. expected to rise 0.4 percent … Univ. of Michigan Consumer Sentiment at 10:00 a.m. expected to be flat at 97.9 …

PARADE … DELAYED — POLITICO’s Jacqueline Klimas: “The controversial military parade ordered by … Trump originally scheduled for Veterans Day will be delayed until 2019, the Pentagon announced Thursday night.

“The Defense Department, which first planned the parade for November to coincide with Veterans Day weekend and the 100th anniversary of the end of World War I, did not give a reason for abrupt change of plan, simply issuing a statement that said it has ‘agreed to explore opportunities in 2019.’

“The announcement came only hours after a report by CNBC that the estimated cost of the parade is now as much as $92 million — far more than previous estimates of between $12 million and $30 million.” Read more.

FIRING BACK AT BANKS — Better Markets Dennis Kelleher emails re Victoria’s item Thursday on big banks arguing to lower their special capital surcharge: “I almost hurt myself laughing at the megabanks’ argument that they need to lower their already inadequate capital levels due to ‘international competitiveness.’ How stupid do they think regulators at the Fed and elsewhere are?

“While they might be able to show that their capital levels are a tiny bit higher than some global banks, the evidence shows they are killing their competition everywhere around the world, as even the quickest visit to any global capital will quickly reveal.

NEW COMPLAINT AGAINST ROSS — POLITICO’s Patrick Temple-West: “Commerce Department Secretary Wilbur Ross should be investigated for potentially violating federal conflict of interest laws for meeting with the executives heading firms tied to his financial holdings, a Washington watchdog group said in a complaint today. Citizens for Responsibility and Ethics in Washington also called for the Justice Department to investigate whether Ross made false statements on his financial disclosures.” Read more

MNUCHIN: WE COULD HIT TURKEY HARDER — POLITICO’s Caitlin Oprysko: “The United States is prepared to take more action against the Turkish government if it does not move to release a detained American pastor, Treasury Secretary Steven Mnuchin said …

“At a Cabinet meeting at the White House, Mnuchin noted recent sanctions imposed on members of Turkish President Recep Tayyip Erdoğan’s administration over its refusal to release Rev. Andrew Brunson and added that ‘we have more that we’re planning to do if they don’t release him quickly,’ according to a pool report. Mnuchin didn’t elaborate.” Read more.

TURKEY TRIES TO RE-WRITE THE PLAYBOOK — Mohamed El-Erian: “Whether by accident or design, Turkey is trying to rewrite the chapter on crisis management in the emerging-market playbook. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures – and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the United States” Read more.


STOCKS MARCH HIGHER — AP’s Marley Jay: “U.S. stocks jumped Thursday as China and the U.S. said they will hold their first trade discussions in months, a potential sign of progress toward ending their trade war. China will send a trade envoy to Washington later this month in a new attempt to end the trade dispute before it causes major damage to the global economy. The two sides haven’t talked since early June. Energy and metals prices and shares of industrial companies turned higher.

“Walmart soared after reporting its strongest growth in sales in more than a decade. Other companies that make and sell basic necessities also rose. … Other retailers and consumer goods companies also edged higher. Target added 1.7 percent to $82.07 and Procter & Gamble rose 1.7 percent to $83.69 while McDonald’s climbed 1.2 percent to $161.73. Banks rallied as interest rates increased. Bond prices turned lower again. The yield on the 10-year Treasury note rose to 2.87 percent from 2.85 percent.” Read more.

COULD TURKEY COME OUT STRONGER THAN EVER? — Reuters: “Turkish Finance Minister Berat Albayrak hosted a conference call with global investors on Thursday in a bid to reassure them that policymakers are able to tackle the worst currency crisis the country has suffered since 2001.

“Some 3,000 investors and economists had registered for the call. [Here] are reactions from fund managers and analysts who listened to the call. ‘He was very orthodox in what he said, he said all the right things, but it’s one thing saying them and another thing doing them,’ said Sailesh Lad, AXA Investment Managers.” Read more.

LIRA UNDER PRESSURE — FT’s Laura Pitel, Andrew England, Jonathan Wheatley and Roger Blitz: “The Turkish lira came under fresh pressure on Thursday as the U.S. warned that new sanctions would be imposed on Turkey if a detained American evangelical pastor was not released.

“The embattled currency had been steadily strengthening in recent days after steps to clamp down on short selling and reassurances from the government that it would not impose capital controls.” Read more.

WHY YUAN FALL HASN’T STOPPED STOCKS — WSJ’s James Mackintosh: “Three years ago, a drop of less than 3 percent in the yuan against the dollar was enough to create panic among investors world-wide. The S&P 500 fell more than 10 percent within a few days, the usual definition of a correction, and global stocks plummeted. The plunge was repeated at the end of 2015, with the same effect. Yet this year, a far bigger drop in the Chinese currency has been all but ignored by U.S. stocks.

“What gives? The answer is a reflection both of the relative strength of China and the U.S., and investors’ views of Chinese policy. But the yuan still poses a threat, even to investors who care little about China.” Read more.


A BLIP OR A BOOM? — AP’s Josh Boak and Christopher Rugaber: “Is the latest pickup in U.S. economic growth destined to slow in the years ahead as most analysts say? Or, as the Trump administration insists, is the economy on the cusp of an explosive boom that will reward Americans and defy those expectations?

“On Thursday … Trump’s chief economic adviser made his case for the boom. Calling mainstream predictions ‘pure nonsense,’ Larry Kudlow declared that the expansion — already the second-longest on record — is merely in its ‘early innings.’ ‘The single biggest event, be it political or otherwise, this year is an economic boom that most people thought would be impossible to generate,’ Kudlow said at a Cabinet meeting, speaking at the president’s request and looking directly at him. ‘Not a rise. Not a blip.’ ‘People may disagree with me,’ Kudlow continued, ‘but I’m saying this, we are just in the early stages.’” Read more.

THE SEC-MUSK DRAMA JUST KEEPS COMING — WSJ’s Dave Michaels, Emily Glazer and Tim Higgins: “Securities regulators began investigating last year whether Tesla Inc. misled investors about its Model 3 car production problems, according to people familiar with the matter.

“The [SEC] subpoenaed a parts supplier for the auto maker as part of the probe, one of the people said, well before the regulators began looking into Elon Musk’s tweet last week about taking the company private. Regulators have also subpoenaed Tesla’s directors seeking to learn what they knew about Mr. Musk’s plan to take Tesla private … Both issues are being handled by the SEC’s San Francisco office, one of the people said.” Read more.

The first crack at Musk could give top Tesla funds an edge — Reuters’ Ross Kerber: “Information about Elon Musk’s efforts to take Tesla Inc. private is scarce. But some small investors wonder if top funds have an edge. In a blog post on Monday, the Tesla chief executive said he would sound out some of his largest shareholders on the idea. The list could include T. Rowe Price Group Inc. and Fidelity Investments, which each have had a good run with the stock.

“Some stockholders worry the meetings could yield details not available to smaller investors, a tension that is emerging more often as big funds own larger stakes in companies and stress their frequent talks with U.S. corporations. Some small investors say they do not expect a level informational playing field when it comes to Tesla, whose shares have been whipsawed by Musk’s unpredictable tweets.” Read more.

While we’re on the subject of Elon Musk — Bloomberg’s David Welch and Alex Barinka: “Goldman Sachs Group Inc. made millions of dollars helping Elon Musk bring Tesla Inc. to the public market. Now, it could stand to make even more advising the electric-car maker’s CEO on how to reverse that decision.

“When Musk tweeted late Monday he was ‘excited to work with’ advisers on his plan to take Tesla private, one of the first names he mentioned was Goldman Sachs. The relationship between the billionaire and the bank goes back to at least 2010, when Goldman Sachs led Tesla’s initial public offering. It’s also given Musk hundreds of millions of dollars in personal loans.” Read more.

It’s only been 10 days since the tweet heard around the world, but if you need a quick refresher of everything that’s happened, Bloomberg also has this timeline detailing the whole saga.


ABA ON THE CRA — ABA CEO Rob Nichols in the Hill: “[O]utdated rules, a lack of transparency and inconsistent examinations are preventing the Community Reinvestment Act from fully meeting that mission today. Instead, its regulations are holding back investment in the very communities the law is intended to serve, while imposing unnecessary compliance burdens on banks.” Read more.

TRUMP RIPPED BY FORMER COMMANDER — POLITICO’s Rebecca Morin: “The former commander of the U.S. Joint Special Operations Command, who also oversaw the raid that killed Osama bin Laden, has a request for … Trump: revoke his security clearance.” Read more.

MINIMUM WAGE HIKE HITS ARKANSAS BALLOT — Via the Houston Chronicle: “[T]he secretary of state of Arkansas announced that an initiative to raise the state’s minimum wage to $11 an hour will appear on the November ballot. In the wake of new data showing wages have stagnated for middle-class families, Arkansas voters are set to join a growing national movement to bypass the broken political system and raise the minimum wage directly through ballot initiatives.” Read more.

POTUS Events

TRUMP is going to the Hamptons today. He is attending a roundtable and luncheon in Southampton. At 2:30 p.m., Trump will fly from the Hamptons to New Jersey to spend the weekend at his golf course in Bedminster.

Floor Action

The House and Senate are out.


Securities Attorney Briefing 19JUN2017


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:–politics.html

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:

  • Some shine has come off Facebook (though not in user data, Dan Primack points out: People still love the service), as executives fend off grievances about fake news, live violence and the filter bubble.
  • Silicon Valley makes itself a juicy target with its male dominance, concentration of wealth (in both people and places), and reliance on foreign workers.
  • Robots will soon be eating lots of jobs, with working-class, blue collar workers — an engine of the Trump coalition — at the most immediate risk. Many think this will be the story of the next 10 years.
  • Anyone familiar with military intelligence will tell you cyber-risk is much greater than most people realize. Russians used cyber tools to try to throw the 2016, and electronic attack is perhaps the greatest U.S vulnerability to an international power.

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 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:


Morning Money

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.


POTUS Events


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.


Floor Action

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.

Senate Republicans are walking a tightrope over the women’s health organization. Both Murkowski and GOP Sen. Susan Collins (R-Maine) oppose cutting off federal funding for the organization.

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.

Russia probe

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.

Securities Attorney Briefing 30 May 2017


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:

Morning Money

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”
Read more.

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.

POTUS Events


Floor Action

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.

Securities Attorney Briefing 9 February 2017


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 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. 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.”


Morning Money


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.




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.”


POTUS Events

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

Floor Action

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:

  1. Qualifications. For the Child Tax Credit, a qualifying child must pass several tests:
  • Age. The child must have been under age 17 on Dec. 31, 2016.
  • Relationship. The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother or half-sister. The child may be a descendant of any of these individuals. A qualifying child could also include grandchildren, nieces or nephews. Taxpayers would always treat an adopted child as their own child. An adopted child includes a child lawfully placed with them for legal adoption.
  • Support. The child must have not provided more than half of their own support for the year.
  • Dependent. The child must be a dependent that a taxpayer claims on their federal tax return.
  • Joint return. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.
  • Citizenship. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.
  • Residence. In most cases, the child must have lived with the taxpayer for more than half of 2016.

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.

  1. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate a taxpayer’s credit depending on their filing status and income.
  2. Additional Child Tax Credit.  If a taxpayer qualifies and gets less than the full Child Tax Credit, they could receive a refund, even if they owe no tax, with the Additional Child Tax Credit.Because of a new tax-law change, the IRS cannot issue refunds before Feb. 15 for tax returns that claim the Earned Income Tax Credit (EITC) or the ACTC. This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects these refunds to be available in bank accounts or debit cards at the earliest, during the week of Feb. 27. This will happen as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.
  1. Schedule 8812. If a taxpayer qualifies to claim the Child Tax Credit, they need to check to see if they must complete and attach Schedule 8812, Child Tax Credit, with their tax return. Taxpayers can visit to view, download or print IRS tax forms anytime.
  2. IRS E-file. The easiest way to claim the Child Tax Credit is with IRS E-file. This system is safe, accurate and easy to use. Taxpayers can also use IRS Free File to prepare and e-file their taxes for free. Go to to learn more.



Securities Attorney Daily Briefing 7 February 2017

Securities Attorney Tom Krebs


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:


Pre-filed Shenanigans


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.

It has been widely acknowledged that, upon swearing the Oath of Office, President Donald Trump would be in direct violation of the foreign-emoluments clause of the U.S. Constitution.

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:


A letter to GOP voters: You’re being conned


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


Morning Money

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.


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.

POTUS Events

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

Floor Action

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: 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:

  1. Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.
  2. Additional Tax. If a taxpayer took an early withdrawal from a plan last year, they must report it to the IRS. They may have to pay income tax on the amount taken out. If it was an early withdrawal, they may have to pay an additional 10 percent tax.
  3. Nontaxable Withdrawals. The additional 10 percent tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the plan. A rollover is a form of nontaxable withdrawal. A rollover occurs when people take cash or other assets from one plan and put the money in another plan. They normally have 60 days to complete a rollover to make it tax-free.
  4. Check Exceptions. There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs.
  5. File Form 5329. If someone took an early withdrawal last year, they may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return. Form 5329 has more details.
  6. Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is the easiest and most accurate way to file a tax return. The tax software that taxpayers use to e-file will pick the right tax forms, do the math and help get the tax benefits they are due. Seven out of 10 taxpayers qualify to use IRS Free File tax software. Free File is only available through the IRS website at

More information on this topic is available on