Krebs Daily Briefing 18 November 2015

Thomas L. Krebs, Securities Litigation, Regulation and Compliance Attorney Lawyer (c)2014 Brandon L. Blankenship
Thomas L. Krebs


Two people died in a raid near Paris, including one who blew herself up, and the police arrested 7

ST.-DENIS, France — After a series of gun battles that began before dawn on Wednesday, the French police raided an apartment in the medieval heart of this northern Paris suburb in an attempt to find the Belgian man suspected of orchestrating the Paris terrorist attacks on Friday. Two people died in the raid, including a woman who detonated an explosive vest; five people were arrested. The raid began around 4:15 a.m., when special police forces, backed by truckloads of soldiers, cordoned off an area near the Place Jean Jaurès, a main square in St.-Denis not far from the Stade de France, where three of the seven attackers who died on Friday night blew themselves up. Inside the apartment, on the third floor of a building on the Rue du Corbillon, at least five suspects were holed up. One of them, the woman, opened fire and then killed herself. Then, a man died when a grenade detonated. The other three were arrested, along with a man and a woman detained outside the apartment. The office of the Paris prosecutor, François Molins, confirmed that the target of the operation was Abdelhamid Abaaoud, who is thought to have organized the attacks, but it was not clear if he was in the apartment at the time of the raid. The police operation unfolded over nearly seven hours, with an initial series of explosions followed by sporadic bursts of gunfire. About 110 members of the security services were involved. Five police officers were lightly wounded, and a 7-year-old police doga Malinois named Diesel, was killed. At 11:47 a.m., Stéphane Le Foll, the agriculture minister and a government spokesman, announced on Twitter that the operation was over and that Interior Minister Bernard Cazeneuve would soon provide details. At 11:58 a.m. the city of St.-Denis announced on Twitter: “The operation is over BUT the security perimeter is still set up. Do not leave your homes.” More:

France’s Real Problems Are Getting Lost in the Fog of War

As gunshots broke out and suicide vests exploded in and around the French capital, the signs of an Islamic State attack were as blaring as the sirens on police cars screeching across Paris through that long, dark night. The attacks — simultaneous, sophisticated, and multipronged — on Nov. 13 bore all the hallmarks of the self-proclaimed caliphate’s murderous ideology. But until it was officially claimed and blamed, we were still in the realm of conjecture. As things happened — and things happen very fast these days — we didn’t have to wait for long. The very next morning, as sleepy Parisians were barely surfacing after a harrowing night, French President François Hollande made a televised address to the nation. Looking less shaken than he did the night before, Hollande wasted no time dropping the D-word: Daesh, the Arabic acronym for the Islamic State. Friday’s attacks, Hollande wasted no time declaring, “was an act of terror committed by the terrorist army of Daesh.” Barely an hour later, the Islamic State’s official claim of responsibility came in a statement issued in Arabic and perfect French. Bearing the appropriate jihadi media insignias, the communiqué featured the usual bluster about crusader France, capital of abomination and depravity. But then it cut to the core. “Eight brothers wearing suicide vests and carrying assault rifles” conducted a “blessed attack” on France because it was “guilty of striking Muslims in the caliphate with their aircraft.” And with that, France — and the rest of the crusading Christian world — crossed a major milestone on the global jihadi highway to security hell. The Nov. 13 attacks, which killed 129 people, were the first suicide bombings on French soil — this in a country that’s no stranger to Islamist violence dating back to the 1990s Algerian “dirty war” between Islamist militants and Algerian security forces. France has already experienced a blowback from the Syrian conflict, including the Jan. 7-9 terrorism spree that is now simply called “the Charlie Hebdo attacks.” But those were lone-wolf attacks or plots conducted with a nod to, but no sanction from, the so-called caliphate. The Paris attacks of last Friday constitute the first successful terrorism plot on Western European soil to be “officially” claimed by the Islamic State. In the old days, when al Qaeda was the only global jihadi game in town, we used the term “central command” or “core” to refer to the network’s Afghanistan-Pakistan nerve center. It’s time to revive that term for the Islamic State — whether it’s Raqqa, the de facto capital; a roving bunch of elites around the self-declared caliph, Abu Bakr al-Baghdadi; or some nasty former-Baathist mastermind — it doesn’t matter. It was central command that sanctioned and claimed the Nov. 13 Paris attacks, the worst violence on French soil since World War II. More:

The French Way of War

France’s military may suffer from a poor reputation in American popular imagination, dating from historical events like the rapid fall to Nazi Germany in World War II and the colonial-era defeat at Dien Bien Phu. This is a mistake: The French airstrikes on Islamic State positions in Syria are only the beginning of the counterattack against ISIS, as French officials themselves are promising. And as anyone familiar with France’s military capabilities can attest, when it comes to war the French are among the very best. Moreover, whatever France does probably will not look like anything the U.S. would do. There is a French way of warfare that reflects the French military’s lack of resources and its modest sense of what it can achieve. They specialize in carefully apportioned and usually small but lethal operations, often behind the scenes; they can go bigger if they have help from the U.S. and other allies—which they will probably have in any case and know how to put to good use. Emblematic of the French approach was France’s military intervention in the Central African Republic in March 2007. To stop a rapidly moving rebel advance into the country from the Sudanese border, the French attacked using a single fighter plane and two waves of paratroopers totaling no more than a “few dozen” who dropped into the combat zone in the Central African town of Birao. In military terms, what the French did was a pinprick, yet it was sufficient to break the rebel advance like placing a rock in the path of a wave. It was, moreover, a risky thing to do: Airborne assaults are intrinsically dangerous, all the more so when one has little capacity to reinforce or withdraw the lightly armed soldiers in an emergency. The first wave of “less than 10” soldiers reportedly made a high-altitude drop. The French military, moreover, did all this quietly, with the French press only learning of the intervention a few weeks after the fact.

Can Terrorists Really Infiltrate the Syrian Refugee Program?

If you look solely at the U.S.’s long record of taking in refugees from countries torn apart by war, it’s hard to argue that national security should be a top concern in the debate over Syrian migrants. In the 14 years since September 11, 2001, the United States has resettled 784,000 refugees from around the world, according to data from the Center for Migration Studies, a D.C. think tank. And within that population, three people have been arrested for activities related to terrorism. None of them were close to executing an attack inside the U.S., and two of the men were caught trying to leave the country to join terrorist groups overseas. “I think I can count on one hand the number of crimes of any significance that I’ve heard have been committed by refugees,” said Lavinia Limón, a veteran of refugee work since 1975 and the president of the U.S. Committee for Refugees and Immigrants. “It just hasn’t been an issue.” Yet it is the issue now, as the Obama administration tries to fend off a revolt by Republican governors over its plans to resettle more than 10,000 Syrian refugees escaping the brutality of both the Islamic State and the Assad government. The coordinated attacks in Paris have fanned fears that terrorists could infiltrate the U.S. by slipping in among the refugees—as might have occurred in the case of one of the Paris attackers. As U.S. officials and refugee advocates point out, that has never happened in modern history. Not when the U.S. took in tens of thousands of Vietnamese refugees in the 1970s. Not when 125,000 Cuban “Marielitos” arrived by boat in 1980. And not in the desperate aftermath of more recent wars in Bosnia, Somalia, or Rwanda. “Those fears have proven unfounded,” said John Sandweg, a former acting director of ICE who previously served as a top lawyer at the Department of Homeland Security. Is there any reason why Syria should be different? More:


Repeat after me: Obama is not admitting 100,000, 200,000 or 250,000 Syrian refugees

 “If we’re going to be bringing 200,000 people over here from that region — if I were one of the leaders of the global jihadist movement and I didn’t infiltrate that group of people with my people, that would be almost malpractice.” — Ben Carson, Nov. 13, 2015. “I am angry that President Obama unilaterally decides that we’ll accept up to 100,000 Syrian refugees while his administration admits we cannot determine their ties to terrorism.” — Former Hewlett Packard chief executive Carly Fiorina, Nov. 14.

“Our president wants to take in 250,000 from Syria. I mean, think of it. 250,000 people. And we all have heart. And we all want people taken care of and all of that. But with the problems our country has, to take in 250,000 people — some of whom are going to have problems, big problems.” — businessman Donald Trump, Nov. 14. “When the president says things like, you know, through an executive order, ‘I’m going to bring 100,000 people in here from Syria,’ Congress needs to say ‘you do that and we’re going to defund everything including your breakfast.’ “ — Carson, quoted in a SuperPac ad released Nov. 17. Sometimes fact checks have an impact, sometimes unfortunately they don’t. In October, Donald Trump earned Four Pinocchios for repeatedly making the outlandish claim that President Obama was planning to admit 200,000 refugees from war-torn Syria. Rather than drop the figure, Trump has boosted it to 250,000. And other candidates have followed his lead with exaggerated figures, just not quite as high. Ben Carson claimed 200,000 from the Middle East “region” and 100,000 from Syria; Fiorina said 100,000 from Syria.

In a tweet, Trump even evoked the image of a flood of Syrian refugees “now pouring into” the United States:  (We initially thought Sen. Rand Paul might qualify for scrutiny as well, since he told reporters in Florida on Nov. 14 that “I would not admit 200,000 people from Syria.” But a check of the audio found that he was responding to a question from an uninformed reporter who flatly stated that the administration had agreed to admit 200,000 from Syria.) In fact, the planned number of Syrian refugees thus far is 10,000. How can people running for president — even if they are all political novices — continue to get this so wrong? The Facts: As we have explained before, the only thing close to a 200,000 figure is an announcement in September by Secretary of State John Kerry that the United States was prepared to boost the number of total refugees accepted from around the world in fiscal 2016, from 70,000 to 85,000. Then, in 2017, Kerry said that 100,000 would be accepted. That adds up to 185,000 over two years. But this would be the total number of refugees, not the number of refugees from Syria. By law, the president every fiscal year sets the maximum number of refugees the United States can accept in a year. (Note to Carson: This is not done by executive order; it is a legal requirement.) Over the past decade, the annual limit has been between 70,000 and 80,000, according to the Congressional Research Service. (In fiscal 2013, about 30 percent came from the Middle East, mostly from Iraq.) So, 100,000 from around the world in 2017 would be a big jump, assuming Obama goes through with the pledge to authorize that level. But nothing is set in stone. As for Syria, Obama has only directed the United States to accept at least 10,000 Syrian refugees in the next year. That’s certainly an increase — fewer than 2,200 Syrians have been admitted to the United States since the uprising began in March 2011, according to State Department officials — but it’s hardly the flood that Trump worries about. (Indeed, it’s only a drop in the bucket of some 4 million Syrian refugees.) In theory, if Obama lifted the ceiling to 100,000 in 2017 and then filled the gap entirely with Syrians, that would be 25,000 more–but that’s still far less than 100,000. Of those admitted to the United States so far, about half have been children and a quarter are adults over 60. There are slightly more men than women, but only 2 percent of those admitted are single males of combat age, officials said. Representatives for Trump, Carson and Fiorina did not respond to queries.

The Pinocchio Test:  There is no excuse for repeated, false statements that have no basis in fact – and have been proven wrong. These candidates each earn Four Pinocchios.


Obama’s biggest terrorism struggle: how to sell “Don’t do stupid shit” as a strategy

What do you do when the moral and emotional stakes of an attack seem to call for war but there is no war that can be constructively fought? That’s a question Barack Obama’s national security advisers have grappled with for months, if not years, as I understand from conversations with them dating to before Friday’s Paris attacks. Many senior administration officials at this point are part of the permanent national security apparatus, but the core group of real “Obama people” has a surprisingly dovish self-conception, where they see themselves operating in a world in which demands for military intervention are constant and endless— from the media, from congressional Republicans, from foreign governments and their allies in Washington, and from the permanent security bureaucracy itself — but America’s actual ability to engage in non-counterproductive interventions is quite limited. In that context, the administration is faced with a nightmare. And it’s a nightmare that looks a lot like what played out in Paris on November 13. Not the shooting but the aftermath:  The nightmare is that in a country where we know it is relatively easy to obtain guns and ammunition and we know that mass casualty shootings are a frighteningly regular fact of life, someday soon a mass casualty shooting will be perpetrated by someone with ties to international Islamist terrorism. When that happens, it will, of course, be a tragedy, just as the shootings in Sandy Hook and Charleston and elsewhere are tragic crimes. But the real nightmare is what comes next. As the scale of the carnage became evident in Paris, major newspapers leapt toward declarations like “war in the heart of Paris” (la guerre en plein de Paris) and “this time it’s war” (c’est fois, c’est la guerre) that are, of course, reminiscent of the post-9/11 declaration of a “war on terror.” But a war against whom? And with what purpose in mind? More:


U.S. pursuing criminal cases against RBS, JPMorgan executives: WSJ

 REUTERS: Federal prosecutors are pursuing criminal cases against executives from the Royal Bank of Scotland Group and JPMorgan Chase & Co for allegedly selling flawed mortgage securities, the Wall Street Journal reported on Tuesday, citing unnamed sources. People familiar with the probes said officials were trying to determine whether the bankers ignored warnings from associates that they were packing too many weak mortgages into investment offerings and whether they can prove that constituted fraud, the newspaper said. ( If filed, the charges would be among the first pursued against specific employees of the largest Wall Street firms over the housing collapse, the WSJ said. Prosecutors are scrutinizing a US$2.2 billion deal that repackaged home mortgages into bonds in 2007 at RBS and two people who worked on a different residential-mortgage deal at JPMorgan, the Journal said. JPMorgan, RBS and Department of Justice declined to comment. JPMorgan said in a filing in November that it was responding to an investigation by the DoJ’s criminal division. Federal prosecutors in Brooklyn are preparing a civil case against UBS Group AG that could result in substantial penalties, some of the people told the Journal. UBS received a subpoena from the US Attorney’s Office for the Eastern District of New York in 2014, seeking documents and information related to UBS’s residential mortgage-backed security business from 2005 through 2007, the company said in a filing.


House passes bill to end pay raises for Fannie Mae and Freddie Mac CEOs

Here’s at least one thing Republicans and Democrats can agree on: The big pay raises the CEOs of Fannie Mae and Freddie Mac were awarded earlier this year should go away. Monday evening, the U.S. House of Representatives voted to approve a bill that would suspend new annual target compensation of $4 million each for Freddie Mac CEO Donald Layton and Fannie Mae CEO Timothy Mayopoulos. If signed into law by President Obama, the bill would return the cap on their pay to $600,000. That level was set in 2012 in the wake of anger over high bonuses that were paid to executives of the housing entities, which were in government conservatorship and had been bailed out by taxpayers. The bill, first introduced by Rep. Ed Royce (R-Calif.) in May, passed the House Financial Services Committee by a 57-1 vote in July. It was soon followed by a Senate version sponsored by Sen. David Vitter (R-La.) and Sen. Elizabeth Warren (D-Mass.), which passed by unanimous consent in September. The latest House version was a voice vote, a procedure typically used for bills that draw little controversy or on issues where individual Congress members may not want a yea or nay vote recorded. In July, the director of the Federal Housing Finance Agency, which oversees the two mortgage finance firms, said the bigger paydays were designed to help compete with the private sector for executives. In a statement from July, FHFA Director Mel Watt said the raises were intended “to promote CEO retention, allow reliable succession planning, and ensure the continuity, efficiency and stability of enterprise operations.” An FHFA spokeswoman declined to comment Monday on the latest House bill. Initial frustration with pay levels at Fannie Mae and Freddie Mac erupted in the wake of the financial crisis, after the CEOs of the two housing entities were awarded a total of $17 million in 2009 and 2010. Watt’s predecessor pledged to cap pay in 2012 before the raises were awarded this year. Obama is expected to sign the bill. White House press secretary Josh Earnest has said in the past that “it is entirely legitimate for the executives at those institutions to be subject to compensation limits,” especially given the advantage they have as entities backed by taxpayers.


Learn Your State’s Cell Phone Location Tracking Laws With This Chart.

Whether you have anything to hide or not, privacy, and the laws regarding your privacy, are important. This interactive chart tells you what each state’s current laws say about law enforcement’s capability to access cell phone information. Your phone is almost always logging everywhere you go. This chart, from the American Civil Liberties Union, gives you a quick glance at what cell phone data of yours can and cannot be a accessed without a warrant. According to the ACLU, the status of your privacy protections completely depends on where you are in the country, and the more you know about your state’s laws the better. For example, Utah requires a warrant for anyone to access your historical or real-time cell phone location information, but in states like Texas, Louisiana, and Georgia, there’s no warrant required to get to your historical location information. You can hover you mouse over each state for a general explanation, or click it to see more specific information; including links to decisive cases. Check it out at the link below.


Privacy Not Included: Federal Law Lags Behind New Tech

Jacqueline Stokes spotted the home paternity test at her local drugstore in Florida and knew she had to try it. She had no doubts for her own family, but as a cybersecurity consultant with an interest in genetics, she couldn’t resist the latest advance. At home, she carefully followed the instructions, swabbing inside the mouths of her husband and her daughter, placing the samples in the pouch provided and mailing them to a lab. Days later, Stokes went online to get the results. Part of the lab’s website address caught her attention, and her professional instincts kicked in. By tweaking the URL slightly, a sprawling directory appeared that gave her access to the test results of some 6,000 other people. The site was taken down after Stokes complained on Twitter. But when she contacted the Department of Health and Human Services about the seemingly obvious violation of patient privacy, she got a surprising response: Officials couldn’t do anything about the breach. The Health Insurance Portability and Accountability Act, a landmark 1996 patient-privacy law, only covers patient information kept by health providers, insurers and data clearinghouses, as well as their business partners. At-home paternity tests fall outside the law’s purview. For that matter, so do wearables like Fitbit that measure steps and sleep, testing companies like 23andMe, and online repositories where individuals can store their health records. In several instances, the privacy of people using these newer services has been compromised, causing embarrassment or legal repercussions. In 2011, for instance, an Australian company failed to properly secure details of hundreds of paternity and drug tests, making them accessible through a Google search. The company said that it quickly fixed the problem. More:


SEC’s White Defends In-House Courts, But Sees Need To Modernize

Securities and Exchange Commission Chairman Mary Jo White acknowledged the need to “modernize” the agency’s in-house court system, even as she defended the fairness of the proceedings that it has relied on increasingly in recent years as an alternative to federal district court. Ms. White spoke at The Wall Street Journal’s CEO forum in Washington, offering her views on a range of issues from exchange-traded funds and GAAP earnings to executive pay and bond market liquidity. The SEC chief said that the commission recently proposed rules to modernize the administrative law proceedings and submitted a draft for public comment. The proposal came amid calls for overhauling the system, which critics say is biased toward the agency and provides few protections to defendants. The proposed change, she noted, includes allowing for additional time and discovery depositions before the trials. Ms. White described the administrative law judge system as “very fair proceedings” that offer even more due-process rights to defendants than district court. The 2010 Dodd-Frank financial overhaul law allowed the SEC to handle a broader range of cases in the in-house court. Still, she acknowledged that the agency needs to critically examine the system for the sake of both fairness and appearance because “the rules haven’t been modernized for almost 10 years.” Turning to the SEC’s ongoing study of ETFs, Ms. White said the outcome of its initial review of severe gyrations in the ETF market on Aug. 24 will be released in the near future. Ms. White said the events on that day – when sharp declines in broader stock markets triggered extreme movements in ETF prices – served as a “mini stress test” for the popular financial product.

That encouraged the SEC to study issues like how the ETFs operate, how the limit-up and limit-down rules work, and whether pilot rules should be set up. “All the commissioners are very focused on ETFs, among other products,” she said. Ms. White said the report will be disclosed “in the near future. Not days but not far down the road.” Asked if the SEC has been sending fewer cases to in-house judges, Ms. White noted that such changes are “cyclical,” depending on the nature of the cases that are brought by its enforcement division. The success rate for the administrative procedures versus that for cases tried in district court also varies, she said, brushing aside criticism about the unfair advantage of the in-house system. “If you look at the past year, we are having essentially nearly 100% win in district court and a lesser success rate in APs,” she said, referring to administrative proceedings. The Journal reported in May that the SEC won against 90% of defendants before its own judges from October 2010 through March of this year – markedly higher than its 69% success rate in federal court over the same period.



Sen. Dick Brewbaker won’t seek re-election

Sen. Dick Brewbaker said Monday he will not seek re-election to the seat he has held for five years. The Montgomery Republican, whose district includes Montgomery, Elmore and Crenshaw counties, said in a phone interview that he wanted to honor a pledge to serve just three terms in the Alabama Legislature. But Brewbaker also criticized the state’s representative bodies, saying “our political system is obviously failing in Alabama.” “How do you change that math?” Brewbaker said. “The way to do it is to change the people in the chamber. We’re not traditionally very good at that in Alabama. I’m hoping some of the people who talk about term limits will follow.” Brewbaker served in the House of Representatives from 2002 to 2006. He won election to his Senate seat in 2010 and was re-elected last year. He owns Brewbaker Motors in Montgomery. The senator said he planned to serve to the end of his term in 2018, but added that he might reconsider if a federal court orders new legislative elections before then. Black legislators sued the state in 2012 over the redistricting map, which they say stacks black voters into legislative districts, hindering their ability to form coalitions with like-minded white voters. The case is pending in federal court. A conservative, Brewbaker served as chairman of the Education Policy Committee and managed to pass a virtual schools bill in the Regular Session of the Legislature in the spring. Brewbaker also helped pass legislation authorizing the State Board of Education to intervene in schools. “We’ve opened the door to school choice, empowering school boards at the expense of the State Board of Education,” he said. “Almost every bill I passed put emphasis on what’s best for their district. I’m very proud of that.” Reflecting his district, Brewbaker also sponsored legislation in 2013 to provide a staggered cost-of-living increase for state employees. The bill did not pass. The senator has never been afraid to offer his opinion or criticize his party. During the budget debates this year, Brewbaker accused Senate Republican leadership of trying to “stampede” the Senate to vote for gambling. Brewbaker has also criticized what he called a “mania we’ve developed for streamlining state government,” saying the state had seen “no savings and no increase in benefits to the public.” More:

Unions to meet at Max’s Deli to discuss Alabama immigration law

BIRMINGHAM, Alabama — A coalition of unions from across the country fighting Alabama’s immigration law will have a lunch meeting today at 1 p.m. at Max’s Deli in the Colonnade shopping center just off U.S. 280. The meeting aims to allow small business owners to talk about how the new immigration law has affected their employees, both documented and undocumented, and its impact on their business in general, according to the Rev. Angie Wright of Greater Birmingham Ministries. Union representatives from Alabama, Michigan, New York, North Carolina, Washington, D.C., and other states are expected to attend. “They are not coming to push a union vs. business perspective,” Wright said. “They want to listen.” Max’s Deli owner Steve Dubrinsky made headlines nationally last month when, after defending his nine legal kitchen workers from Mexico, some immigration law supporters called for a boycott of his restaurant. He talked about it in a story you can read here. Among the attendees signed up are officials from the state AFL-CIO unions from North Carolina, New York, Georgia and Michigan, Coalition of Black Trade Unionists, International Longshoreman’s Union, American Postal Workers Union, United Steelworkers, Transport Workers Union of America, American Federation of Government Employees and American Federation of School Administrators.

Groups: States blocking refugees ‘in small-minded panic’

“If ISIS hoped its attacks in Paris would provoke the US and its allies into acting in small-minded panic, some governors are granting their wish,” Linda Hartke, president of the Lutheran Immigration and Refugee Service, said on a press call Tuesday morning. The groups also questioned the legality and practicality of the moves, citing federal supremacy over immigration matters and the fact that refugees admitted to the United States are legal residents. Bentley Sunday night announced he would oppose the settlement of Syrian refugees in Alabama, following the attacks in Paris Friday. Most of the attackers identified so far were French nationals. One apparently had a Syrian passport, though its authenticity is uncertain. The governor Monday night ordered state agencies to not cooperate with resettlement plans. The governor sent a letter to President Barack Obama Tuesday informing him of his decision and repeating his assertion that he believed the federal government could not properly screen Syrian refugees. “One mistake by the federal government in allowing a refugee with a terrorist connection (to enter the country) poses a major safety threat to our people,” the letter said. “Failure to change course exposes millions of Americans to the possibility of terrorist acts on American soil.” Bentley said Sunday there were no plans to settle Syrian refugees in the state, or credible threats of violence in Alabama. Earlier on Tuesday, Bentley claimed on CNN that “major threats” had come from refugee organizations, threats he did not identify. According to The Economist, only two refugees out of 750,000 admitted to the country since September 11, 2001 have been arrested on terror charges. The arrests involved planning in Iraq. Representatives of refugee aid groups said Tuesday that refugees entering the country go through far more intense background checks and security screenings than other group. The process can take an average of two years.Syrians face even more scrutiny. “They are pointed in looking for indicators of difficulties,” said Lavinia Limon, president and CEO of the U.S. Committee for Refugees and Immigrants. “We’ve seen many cases cancelled and we don’t know why. (But) we move on from there and the refugees never come to the United States.” Hartke said rejecting refugees “would be nothing less than signing a death warrant” for those fleeing the Syrian civil war. “These refugees are fleeing terror themselves, violence like we witnessed in Paris,” said David Appleby, migration director for the U.S. Conference of Catholic Bishops. The groups also cited the Refugee Act of 1980, a U.S. law that gives Congress the final word in refugee resettlement. “I would think in any court case, the states would have a difficult time proving they have a right to deny a certain legal resident (the right) to travel and live in their state,” Appleby said. The groups all said they supported strong checks on refugees entering the country, saying it was crucial to helping refugees enter communities. But they noted the United Nations does both iris scans and biometrics on refugees, which assists with food distribution and helps track movement. Bentley’s order Monday evening specifically told the Alabama Department of Human Resources to not participate in refugee resettlement. DHR administers many programs for the state, and refugees in the country are entitled to federal benefits, said Limon. She said that governors could not choose to cut off groups from state services. “It would be pretty amazing for a governor to discriminate in the provision of services based on ethnicity and racial makeup,” she said. Five refugees, none from Syria, have settled in Alabama in the current fiscal year. 381 refugees came to Alabama between 2011 and 2014, according to the U.S. Department of Health and Human Services’ Office of Refugee Settlement. Only one was Syrian.

Fight continues to tackle sewage problems across Black Belt

LOWNDES CO., AL (WSFA) – Alabama’s Black Belt counties have struggled with inefficient or non-existent sewer systems for years. Some residents have raw sewage filtered right into their yards. It’s a complex issue that officials say is tied to poverty and to the soil itself. Efforts to address the problem are ongoing. Activists and researchers have raised public health concerns, and the region has received recent national attention as new steps are taken to make improvements and improve access to proper sanitation. Charlie Mae Holcombe dreads a stormy forecast. “If it rains constantly for several hours, then my yard is flooded,” Holcombe said. “This is a place of terror.” Holcombe lives outside of Hayneville’s city limits but says sewage from the city wastewater lagoon across the street regularly backs up in her front yard. “My situation is terrible. I’ve been dealing with this ever since 1987 when I moved here, and I have gotten no results. I’m still going through and fighting the same problem over and over again,” Holcombe added. “The city has had to come out here and pump with the truck and pump the waste up out of my yard. When it gets so bad, waste even comes back up in my bathtub. There are times when the water comes out black.” At a home down the street, residents are dealing with a different situation but similar woes. Sewage runs straight from the bathroom into the yard. Wads of toilet paper and waste are visible near the water meter. Catherine Flowers is the founder and executive director of the Alabama Center for Rural Enterprise (ACRE), a non-profit organization that promotes sustainable initiatives to strengthen the infrastructure of families in rural and impoverished communities. “People are living amongst raw sewage. And part of the reason is because, in the case of Lowndes County, you have people who are poor and we have soils that are not conducive to conventional systems and the systems are very expensive and people can’t afford them,” Flowers explained while standing in front of a pit of waste behind a disabled veteran’s house in White Hall. ACRE has been working for years to shed light on the long-standing sewage issues plaguing the Black Belt counties. In Lowndes County, Hayneville, Mosses and Fort Deposit have sewer systems, and White Hall is getting one. In rural areas, residents rely on on-site septic systems, which come with massive challenges in that section of the south.

Uber: Operating in Birmingham by Christmas is feasible

Uber tells ABC 33/40 operating in Birmingham by Christmas is feasible if city council moves forward with changes to the transportation ordinance next week as planned. Representatives from Uber attended Birmingham City Council’s Committee of the Whole meeting Tuesday evening. After a two week public comment period, council discussed changes to the city’s transportation code that could allow for transportation network companies like Uber and Lyft. Council President Johnathan Austin said he went through the new ordinance line by line with Uber. The new ordinance is scheduled to go before the full council for a vote next Tuesday. Trevor Theunissen, Public Policy Manager for Uber Southeast, called the meeting productive. “I think Birmingham is a really important market for us, and I know it is for the constituents,” said Theunissen. “We’ve heard loud and clear from potential riders and drivers all over Birmingham that they want this type of service and we’re ready to provide it. And I hope this draft, I’m confident that this draft that’s provided today is something that will get us to Birmingham.” Uber is looking for three specific changes to the code. Those deal with insurance, business licenses and background checks for drivers. Austin says those issues will be debated by the full council next Tuesday. “The council will at that point have an opportunity to ask any questions, raise any issues, work with the law department and try to resolve any issues that may exist,” said Austin. “I believe we have a really good working document in place. I believe it’s something both the council and the transportation network companies, particularly Uber, can agree on and we need to move forward.” During the meeting, Transportation Committee Chair Councilor Kim Rafferty said she’s also gotten feedback on the code from Lyft. She expects Lyft to meet with the city during the next few weeks.


Bentley’s new refugee stand is old Alabama politics

Syrian refugees, there are good reasons to stay away from Alabama, but not because Gov. Robert Bentley doesn’t want you here. This week, Alabama’s governor issued an executive order to state officials telling them to do what they can to obstruct refugees fleeing the humanitarian disaster in Syria from seeking shelter in the Heart of Dixie. And in a letter to President Barack Obama, he asked the White House to reconsider letting as many as 10,000 refugees into the country. Ultimately, Bentley doesn’t have much authority to keep refugees out. The federal government decides who gets in and who doesn’t. But the governor has always been the Wile E. Coyote of Alabama politics, with 90 percent of a successful plan that always ends with the anvil landing on his own head. Bentley said it was about safety. Don’t believe it. He said his heart goes out to the refugees. Certainly don’t believe that. He said this is about Alabamians, and maybe part of that is true, if only because his last year in office has left him deeply in need of their approval. Let’s start with how most natives start out in Alabama — being born. During the last decade, Alabama’s infant mortality rate has consistently been 50 percent greater — or worse, depending on how you look at it — than the U.S. average. Our mortality rate has hovered just above 8 deaths per 1,000 live births. That looks bad, but take away the white people from those numbers and it gets much, much worse. Between 2003 and 2013, non-white infant mortality was 13.8 deaths per 1,000 live births. Or to give you a better sense of what that means, Syria’s infant mortality rate in 2012 was better than non-white Alabama’s. Today Syria’s is estimated to be 15.61 deaths per 1,000 live births, although that’s just an estimate. I don’t imagine ISIS collects good data. But judging by infant mortality alone, there are only two worse states where to settle — Louisiana and Mississippi. And if you look at most of the other statistics used to measure quality of life, you’ll see similar results. In Alabama, we even have a saying about it, “Thank God for Mississippi.” Or thank Allah, if that’s your thing. You see, there’s a reason Bentley is taking the lead in opposing refugee settlement in the United States. Had Bentley said nothing, and no refugees came, that would have been an embarrassment. Now if none come, it’s a victory. Also, he’s walking point on this because it’s a distraction from his meager record as Alabama governor, and distraction politics are old politics in Alabama. Before refugees, it was illegal immigrants from Latin America and the disastrous bill Bentley signed into law, HB 56, which tried to make Alabama an unbearable place for them to live. And before immigration it was integration. Governors George Wallace and John Patterson used pro-segregation politics to stoke fear in Alabama, just as Bentley is today, and deprive basic citizenship rights even from its native born. And they did it for the same reasons — to distract the voting public here from the reality that their government isn’t delivering for them, much less anybody who might come to visit. This is the same governor, remember, who refused Medicaid expansion, and by doing so left health care out of reach of about 200,000 Alabamians, in addition to billions of federal dollars left on the table that could have been spent here. By at least one study, that decision by Bentley costs Alabama not just money but also about 210 lives per year. The terrorists in Paris he’s getting so worked up about killed only 129. Maybe once in America we lived by those words from “The New Colossus” hung at the Statue of Liberty, “Give me your tired, your poor,your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me. I lift my lamp beside the golden door!” But Bentley and his cohort are doing their damnedest to jam that door shut, and replace those worlds with a new take on another old sign. “Refugee, don’t let the sun go down on you in Alabama.”

Time to Prepare for the Unthinkable

The tragic Paris attacks serve as a poignant reminder of the dangers that free and open societies face from the forces of violent extremism. This carnage comes on the heels of other high profile terrorist attacks including the Russian airliner downing and the Beirut bombings. Together these three attacks have caused hundreds of casualties in a two-week period. The Islamic State group ­­now has operational cells in over a dozen countries and about three dozen jihadist groups across at least 18 nations have pledged support or allegiance to the group. In a very short period of time, the Islamic State group has developed unprecedented reach and demonstrated a proclivity for employing extreme violence tactics to strike at the very heart of civilized societies. Given its strategy, it seems only a matter of time before these extremists might attempt an attack here in the United States. The irony is that the very rights that Americans hold so dear – liberty, privacy, freedom – place it at greater risk. So what should America do to prepare? First, the obvious conclusion must be that drone strikes against Islamic State group leaders in Syria alone will not be the answer. Over the past six months, drone strikes in Syria have killed on average one mid- to high-level commander every two days. Yet during this time, these militants have been largely undeterred and even continued to gain strength and momentum. Here in the homeland, the United States must rely on a different kind of preparedness. It begins with the individual. A better understanding of the factors that are contributing to self-radicalization and strategies to counter these forces are necessary. The Department of Homeland Security has a program and has recently stood up an organization for countering violent extremism that reaches down into state and local governments and communities, seeking to identify at risk individuals and alter their path to radicalization. Programs such as these must continue to be supported and strengthened. Individuals have a role and an important stake in serving as a first line of defense. The DHS’ “see something, say something” campaign provides recognition of the importance of individual vigilance and reporting of suspicious behavior. Post-attack forensics and analysis will likely identify pre-attack behaviors or actions that were out of character. Had these anomalies been reported earlier, perhaps pre-attack intervention could have been successful.

Morning Money

GOOD MORNING FROM DES MOINES! — POLITICO is holding a great event here today beginning at noon central (1 p.m. EST) and bringing POLITICO’s Iowa Caucus members together for the first time for a deep-dive discussion, featuring yours truly along with Steve Shepard and a variety of perspective about the economic policy issues facing the next president.

Featured speakers include: Steve Deace, Host, The Steve Deace Show; Steve Grubbs, Chief Strategist, Iowa, Rand Paul for President; Douglas Holtz-Eakin, President, American Action Forum; David Oman, Senior Adviser, Jeb Bush Presidential Campaign; Gene Sperling, Former National Economic Advisor to Presidents Clinton and Obama; President, Sperling Economic Strategies. Details here:

READ THE SURVEY ANALYSIS ahead of today’s event:


WARREN WEIGHS IN ON TAX REFORM — Sen. Elizabeth Warren this afternoon will give a speech at the National Press Club on corporate international tax reform. Live stream at 12:40 p.m.:

KANDARIAN BACKS TPP — Met Life CEO Steve Kandarian today plans to become among the first big financial services industry executives to back the TPP. Kandarian is backing the trade deal despite other dustups with the administration including the insurer’s labeling as a SIFI. .. From Kandarian’s statement: “After analyzing the text of the TPP, MetLife will support the agreement and seek congressional support for its ratification.

“As one of the largest life insurers in the world with operations in nearly 50 countries, MetLife has four key priorities in assessing any trade deal: improved market access, a level competitive playing field, ease of cross-border data flows, and regulatory transparency. The TPP makes meaningful progress on all of them.”

RYAN WARNS OF BUDGET FIGHTS — WSJ’s Kristina Peterson: “New House Speaker Paul Ryan struck a confrontational stance with the Obama administration Tuesday, setting the stage for showdowns over domestic spending and national security matters as Congress works to wrap up business for the year. Mr. Ryan, speaking at The Wall Street Journal CEO Council annual meeting, said a spending bill needed to avoid a government shutdown in December must include Republican policy measures, injecting fresh drama into the year’s final budget fight.

“He also forcefully warned President Barack Obama against using executive action to close the detention center at Guantanamo Bay, Cuba, and transfer its detainees to the U.S. The Wisconsin Republican didn’t explicitly suggest government operations could lapse when funding expires on Dec. 11, but he didn’t rule out such a possibility. He said Republicans will force Mr. Obama to accept some conservative provisions, known as “riders,” in the sweeping spending bill.”

FRENCH PLANES GROUNDED — Reuters: “Two Air France flights en route to Paris from the United States were diverted on Tuesday following anonymous bomb threats, and hundreds of passengers and crew were safely removed, the airline and the Federal Aviation Administration said. Flight 65, an Airbus A-380 that departed from Los Angeles landed safely in Salt Lake City, where passengers and crew were being taken off the plane and escorted into the terminal, an FAA spokesman said. The Salt Lake Tribune, citing an airport official, reported the plane was carrying 497 passengers and crew.

“A separate flight that left Dulles International Airport outside Washington, D.C., Flight 55, was diverted to Halifax International Airport in Nova Scotia, where passengers and crew had also disembarked. The Halifax Airport tweeted that 262 passengers and crew members had been aboard. In a brief statement, Air France said both flights had been the “subjects of anonymous threats received after their respective take-offs.’”

GUNFIRE ERUPTS IN PARIS — Bloomberg: “Gunfire erupted in the Paris suburb of Saint-Denis from around 4:25am Wednesday morning during the course of an anti-terrorist operation not far from the Stade de France … A large bang and exchanges of gunfire which lasted many minutes could be heard, the news service cited unidentified witnesses.”

GOOD WEDNESDAY MORNING — Hope to see some folks here in Des Moines, which has become M.M.’s second home. Email me on and follow me on Twitter @morningmoneyben.

DRIVING THE DAY — POLITICO Caucus events begins at noon CST, 1 EST … Joint Economic Committee has a hearing at 2:00 p.m. “on the economic challenges of the Millennial Generation and policy solutions to improve its economic future” … Brookings has an event on 2016 at 9:00 a.m. on the 2016 campaign featuring Vin Weber, Bob Reischauer and many others … Treasury holds a Financial Literacy and Education Commission meeting … The meeting “will focus on how to prepare more Americans to plan and take action for long-term financial goals such as retirement” … Secretary Lew, CFPB Director Rich Cordray, and SSA Acting Commissioner Carolyn Colvin will deliver remarks at this meeting … FOMC Minutes at 2:00 p.m. … House Financial Services Committee at 10:00 a.m. holds a hearing “Examining the SEC’s Agenda, Operations, and FY2017 Budget Request” … SEC Chairwoman Mary Jo White testifies

BROOKINGS PAPERS … to be released at the event today:

David Wessel’s paper for the event:


ALSO TODAY: Treasury Deputy Secretary Raskin will deliver keynote remarks at an Economists for Peace and Security forum on inequality & growth at 9:15 a.m. Live stream:

CLINTON HITS SANDERS ON MIDDLE CLASS TAXES — POLITICO’s Annie Karni: “Hillary Clinton is spoiling for a fight over middle class tax hikes. Three days after the fairly cordial second Democratic debate, Clinton’s campaign is mounting an attack against Sen. Bernie Sanders for proposals to raise taxes on the middle class that were part of the national single-payer health care bills he introduced in Congress.

“‘Bernie Sanders has called for a roughly 9-percent tax hike on middle-class families just to cover his health-care plan,’ said Clinton spokesman Brian Fallon, referring to legislation Sanders introduced in 2013, ‘and simple math dictates he’ll need to tax workers even more to pay for the rest of his at least $18-20 trillion agenda. … The latest attempt to draw a contrast on tax hikes and wage increases can be seen as an attempt by Clinton to undercut any momentum Sanders is building among union workers and middle class voters”

SANDERS HITS PAUSE ON SOCIALISM — POLITICO’s Annie Karni: “Bernie Sanders’ ballyhooed speech on socialism is now on indefinite hold. Details about how Sanders would pay for his proposed single-payer national health insurance program to provide Medicare for all Americans have yet to be fleshed out — even though a July 30 post on his campaign website says the Vermont senator would file legislation on single-payer ‘perhaps as soon as next week.’ … And with two-and-a-half months to go before the first votes of 2016 are cast, the candidate whose raison d’etre is ending income inequality has yet to unveil any details of his tax plan, such as whose tax rates would go up and by how much.

“As Sanders attempts to evolve from a niche politician who appeals to a frustratingly uniform group of young, white progressive voters to a major threat to the Hillary Clinton presidential juggernaut, he appears to be stalled on the threshold of mainstream success. Once sure-footed and decisive in expressing his view of the most important issue facing the country, income inequality, Sanders now appears to be holding back, hesitant to put meat on the bones of his big-picture ideas”

THE FED’S INFLATION PUZZLE — WSJ’s Justin Lahart: “Prices of goods and services are taking divergent paths. So, too, are the fortunes of many companies. The Labor Department on Tuesday reported that overall U.S. consumer prices in October were up just 0.2 percent from a year earlier, while core prices, which exclude food and energy items, rose 1.9 percent. That suggests the Federal Reserve’s preferred measure of core prices remained up just 1.3 percent on the year, according to J.P. Morgan. So while the central bank is on course to raise rates next month, it isn’t clear how rapidly it will be able to raise rates thereafter. … Part of why the Fed’s rate prospects are such a muddle is the wide gap that has emerged between prices for goods and services.

“Core goods, heavily exposed to dollar strength and overseas economic weakness, were down 0.7 percent in October from a year earlier. Core services, more insulated from abroad, were up 2.8 percent. The 3.5-percentage-point difference between the two series marks the widest gap since before the recession. The decline in goods prices is transitory — the global economy won’t be weak forever — so there is some sense to the Fed looking through them. But nothing is going to change overnight. And companies that make and sell goods, like manufacturers and retailers, are losing sales to deflation”

VETO THREAT ON MORTGAGE BILL — Per White House SAP: “H.R. 1210 would broaden the definition of qualified mortgages — those that qualify for the safe harbor — to include all mortgages held on a lender’s balance sheet. Under the bill, depository institutions that hold a loan in portfolio would receive a legal safe harbor even if the loan contains terms and features that are abusive and harmful to consumers. The bill would limit the right of borrowers to file claims against holders of such loans and against mortgage originators who directed them to the loans”

CARSON LOST OF FOREIGN POLICY — NYT’s Trip Gabriel: “Ben Carson’s remarks on foreign policy have repeatedly raised questions about his grasp of the subject, but never more seriously than in the past week, when he wrongly asserted that China had intervened militarily in Syria and then failed, on national television, to name the countries he would call on to form a coalition to fight the Islamic State. Faced with increasing scrutiny about whether Mr. Carson — who leads in some Republican presidential polls — was capable of leading American foreign policy, two of his top advisers said in interviews with The New York Times that he had struggled to master the intricacies of the Middle East and national security and that intense tutoring was having little effect.

“‘Nobody has been able to sit down with him and have him get one iota of intelligent information about the Middle East,’ Duane R. Clarridge, a top adviser to Mr. Carson on terrorism and national security, said in an interview. He also said Mr. Carson needed weekly conference calls briefing him on foreign policy so ‘we can make him smart.”


GLOBAL FINANCIAL LITERACY SURVEY — S&P Ratings Global FinLit Survey will be released at 8:30 AM at an event being held at Gallup HQ in DC and featuring closing remarks by Asst Secretary of the Treasury for International Affairs Marisa Lago.

From the findings: “Globally, 2 out of 3 adults are not financially literate. The US ranks 14th in terms of financial literacy (Norway, Sweden, Denmark are #1; Israel #2)

On virtually every country across the globe, there’s a gender gap between women and men on financial literacy. Globally, the gender gap is 5 percent. In the US, it’s twice that”

FOX BUSINESS GETS RATINGS BOOST — Via “Fox News Channel and Fox Business News ranked No. 2 and No. 4 for the week in primetime, with an average of 2.3M and 1.6M viewers, respectively. (FNC also ranked No. 1 in total day with an average of 1.4M). … Boosting FBN was its Tuesday night GOP debate, which brought 13.5M viewers and 3.7M news demo viewers — a record for the network. It was basic cable’s most watched program for the week. Fox News Channel’s numbers were goosed by its coverage of the attacks in Paris on Friday, and aftermath over the weekend”

POTUS Events

In the morning, President Obama will hold a bilateral meeting with President Benigno Aquino of the Philippines.

Later in the morning, the president will deliver remarks at a CEO Summit, attended by 800 business leaders from around the region representing U.S. and Asia-Pacific companies.

In the afternoon, Obama will participate in the first meeting of the leaders of the Trans-Pacific Partnership countries since the conclusion of negotiations and public release of the complete text of the agreement.

Later in the afternoon, Obama will participate in an informal dialogue of Asia Pacific Economic Cooperation Summit (APEC) leaders with the Pacific Alliance.

In the evening, the Obama will attend an APEC welcome dinner and cultural performance. The president will remain overnight in the Philippines.

Floor Action

The House returns at 10 a.m. First votes expected: 1:15 to 2:15 p.m. Last votes expected: 5 to 6 p.m. The Senate returns at 10 a.m., with votes as early as 10:15 a.m.

Krebs Daily Briefing 17 November 2015


Terrorism Is Booming Almost Everywhere But in the United States

On June 19, the U.S. State Department published its Country Reports on Terrorism: 2014 — the department’s annual, congressionally mandated analytical and statistical review of global terrorism. Since the concept of terrorism is open to subjective interpretation and politically motivated misrepresentation, it is important to note that, since 1983, the U.S. government has used the same definition for statistical analytical purposes, which is based in Title 22 of the U.S. Code, Section 2656f(d):  (2) the term “terrorism” means premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents… “non-combatant,” which is referred to but not defined in 22 USC 2656f(d)(2), is interpreted to mean, in addition to civilians, military personnel (whether or not armed or on duty) who are not deployed in a war zone or a war-like setting. With that relatively limited definition of terrorism in mind, there are five significant findings that stand out from the latest report. First, the phenomenon of terrorism has significantly worsened, in terms of the number of attacks, their lethality, as well as the size of terrorist organizations. The number of attacks increased 39 percent from 9,707 in 2013 to 13,463 last year. There were 17,891 fatalities in 2013, growing 83 percent to 32,727 in 2014. To give you a fuller sense of how vastly contemporary terrorism has grown, just a little over a dozen years ago, in 2002, only 725 people were killed worldwide. During President Barack Obama’s first full year in office, in 2010, it was 13,186. In other words, terrorist-related deaths grew by more than 4,000 percent from 2002 and by 148 percent from 2010 to 2014. The size of several groups grew in strength, in particular the self-declared Islamic State, which was estimated to include both between 1,000 and 2,000 members in Iraq and a “significant portion” of the 26,000 extremist fighters in Syria in 2013, and grew in strength to between 20,000 and 31,500 fighters in 2014. Boko Haram also expanded from “hundreds to a few thousand” to “several thousand” fighters. In addition, there were 33 new organizations identified as perpetrators of terrorist attacks in 2014, indicating that more groups are forming to employ this deadly tactic. Second, reflecting what scholars and experts have long known, terrorism predominantly is a driving component of interstate warfare or transregional conflict. Some 63 percent of all attacks occurred in just six countries: Iraq, Pakistan, Afghanistan, India, Nigeria, and Syria. Unsurprisingly, these are also countries characterized by chronic state fragility, deep and widespread dissatisfaction with political leadership, and nonstate actors with the resources and motivation to target noncombatants with lethal force in an effort to achieve some set of clinical objectives. These shared underlying conditions explain why many scholars keep arguing (largely in vain) that any enduring defeat of terrorism requires a conflict prevention, peace building, and development approach, rather than the same set “counterterrorism” principles. More:

Prominent Muslim Sheik Issues Fatwa Against ISIS Violence

In a speech before the U.N. General Assembly laying out a blueprint for the global battle against the group that calls itself the Islamic State, President Obama called on the world to take a stand against religious extremism. “The ideology of ISIL or al-Qaida or Boko Haram will wilt and die if it is consistently exposed and confronted and refuted in the light of day,” Obama said. Then he singled out one organization and one man leading that charge: the new Forum for Promoting Peace in Muslim Societies and Sheik Abdullah bin Bayyah. Describing the group’s purpose, the sheik said, “We must declare war on war so the outcome will be peace upon peace.” Bin Bayyah, 79, is a prominent Muslim cleric and, as a respected religious scholar, has issued edicts to explain why groups such as the so-called Islamic State, also known as ISIL or ISIS, are misguided and should reverse course. Last week, key clerics from the Muslim world issued two fatwas, or religious edicts, against the group. One came from senior religious leaders in Saudi Arabia, and the other came from bin Bayyah. His fatwa calls for dialogue about the true tenets of Islam and, over the course of many pages, questions just about everything for which ISIS says it stands. The fatwa says establishing a caliphate by force is a misreading of religious doctrine. Killing of innocents and violence, the fatwa declares, are wrong too. Bin Bayyah said in an interview with NPR that he hopes the religious ruling will slow the group’s momentum. “Primarily [the fatwa] is really about addressing the mistakes, and it’s really warning them and advising them that what you are doing is clearly wrong,” he said. Bin Bayyah is known as a scholar’s scholar. He was born in the North African country of Mauritania and studied in Islamic centers there. He served as a judge of the High Court in Mauritania and had a number of ministerial positions. Now he’s a lecturer at the Aziz University in Jeddah, Saudi Arabia.

Russia Confirms Metrojet Bombing, Putin Vows to Retaliate

The fight against Islamic State promised to broaden after Vladimir Putin vowed to retaliate against terrorists who blew up a Russian airliner last month and U.S. Secretary of State John Kerry floated the possibility of a cease-fire in the Syrian civil war. The Russian president for the first time blamed a bomb for bringing down a Metrojet flight to St. Petersburg from Egypt on Oct. 31, killing 224 people, and said officials would now focus on “finding and punishing the perpetrators.” His comments were broadcast as Kerry met French President Francois Hollande, who is urging a U.S.-Russian alliance to destroy Islamic State, which he blames for assaults that killed 129 in Paris last week. “We need to step up our efforts to hit them at the core when they’re planning these things,” Kerry told reporters at the Elysee Palace. He later held out the prospect that a Syrian cease-fire could come within weeks, permitting a stepped-up campaign against Islamic State, the Associated Press reported. The diplomacy, including Putin’s huddle with President Barack Obama on Sunday at a global summit, suggest narrowing international differences on how to end the four-year Syrian conflict. Both Russia and western countries are conducting independent bombing campaigns against militant groups in the ravaged nation. Russia’s main focus has been protecting the regime of President Bashar Al-Assad rather than stopping the advance of Islamic State, which has declared a “caliphate” in parts of Syria and Iraq. Islamic State and affiliated groups have escalated their violence in recent weeks. At least 44 people were killed in a Nov. 12 suicide bombing in a Beirut suburb for which the organization claimed responsibility, its first attack in the Lebanese capital. A militant group in the Sinai region that supports Islamic State also said it was responsible for downing the Metrojet flight.

Turning back Syrian refugees isn’t just wrong — it helps ISIS

As French authorities combed an area just outside the Stade de France, where on Friday night a suicide bomber detonated an explosive vest meant for the crowd of thousands just inside, they found a small object that has since become the subject of enormous international attention: a Syrian passport. Greek authorities said that a month earlier, a man traveling under the same name as on the passport had been registered as entering Greece through the island of Leros. They took fingerprints at the time, which match those on the suicide bomber. The passport, French officials found, was fake. Nevertheless, the discovery has revived the specter of terrorists posing as refugees infiltrating the West and renewed calls to close the borders and refuse entry to all Syrian refugees — or at least all the Muslim ones. At least 23 US governors said on Monday that they’d attempt to block any efforts to resettle Syrian refugees in their states, and the few Republican presidential candidates who didn’t outright declare that all Syrian refugees should be banned from entering the United States suggested that only Christian refugees should be allowed in. But such reactions play right into ISIS’s hands. ISIS despises Syrian refugees: It sees them as traitors to the caliphate. By leaving, they turn their back on the caliphate. ISIS depicts its territory as a paradise, and fleeing refugees expose that as a lie. But if refugees do make it out, ISIS wants them to be treated badly — the more the West treats them with suspicion and fear, the more it supports ISIS’s narrative of a West that is hostile to Muslims and bolsters ISIS’s efforts to recruit from migrant communities in Europe. The fewer refugees the West lets in, and the chillier their welcome on arrival, the better for ISIS.


U.S. governors don’t have power to refuse refugees access to their states

As authorities made sense of the aftermath from Friday’s Paris attacks and the death toll count began to stabilize, reports emerged over the weekend that a gunman involved with the coordinated bombings and shootings may have entered Europe, embedded in the scores of refugees fleeing Syria.

By Monday afternoon, the number of American state governors, many of them Republican, who released statements refusing to accept refugees ballooned to more than a dozen. The voices of opposition included presidential candidates Sen. Ted Cruz (R-Texas) and Jeb Bush, who told “CBS This Morning” that the U.S. screening process should only grant refugee status to Syrian Christians. In his letter to President Barack Obama, Texas Gov. Greg Abbott, a Republican, said his state would refrain from participating “in any program that will result in Syrian refugees — any one of whom could be connected to terrorism — being resettled in Texas.” Governors of Alabama, Arizona, Arkansas, Florida, Illinois, Indiana, Louisiana, Massachusetts, Michigan, North Carolina, New Hampshire, Ohio, Wisconsin, among others have all issued similar statements, promising to block Syrian refugees from entering their states.

Problem is, states don’t really have a choice. According to Think Progress’ Ian Millhiser, the states are limited in their power to resist the intake of refugees, an action that’s specifically under the president’s purview. Under the Refugee Act of 1980, “President Obama has explicit statutory authorization to accept foreign refugees into the United States.” In a letter to Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.), Rick Scott said “it is our understanding that the state does not have the authority to prevent the federal government from funding the relocation of these Syrian refugees to Florida even without state support.” Instead, Scott said Congress ought “to take immediate and aggressive action to prevent President Obama and his administration from using any federal tax dollars to fund the relocation of up to 425 Syrian refugees” to Florida. Cecillia Wang of the American Civil Liberties Union said in a statement Monday that politicians were fabricating a link between the Paris attacks and Syrian refugee resettlement in the U.S. “Making policy based on this fear mongering is wrong for two reasons,” she said. “It is factually wrong for blaming refugees for the very terror they are fleeing, and it is legally wrong because it violates our laws and the values on which our country was founded.” Presidential candidate Rand Paul also introduced a bill Monday that imposed an “immediate moratorium on visas for refugees.” The U.S. plans to accept 10,000 Syrian refugees over the next fiscal year. Some Democrats, including presidential candidates Hillary Clinton and Martin O’Malley said that number should increase to 65,000 Syrian refugees. Either way, state governors will have to yield to Obama’s plan. According to The New York Times, the U.S. has accepted 1,854 Syrian refugees as of Sept. 2015. Over the same time period, Germany has accepted nearly 93,000 refugees. Speaking from Antalya, Turkey, on Monday, President Obama said the U.S. and other countries should continue to accept refugees leaving Syria, adding that they were the ones that are more harmed by terrorism, especially the brutal tactics of the Islamic State militants. “Slamming the door in their faces would be a betrayal of our values,” Obama said at the close of the Group of 20 summit in Antalya. “Our nations can welcome refugees who are desperately seeking safety and ensure our own security. We can and must do both.” Washington Gov. Jay Inslee supported Obama’s stance on providing sanctuary to Syrian refugees. “Washington will continue to be a state that welcomes those seeking refuge from persecution, regardless of where they come from or the religion they practice,” he said.


Three states refuse Syrian refugees

Three Republican governors have announced that Syrian refugees won’t be allowed to resettle in their states in the wake of last week’s terrorist attacks in Paris. Michigan Gov. Rick Snyder and Alabama Gov. Robert Bentley issued statements Sunday saying that they wanted to prioritize the safety of the residents in their states. Texas Gov. Greg Abbott joined them on Monday. “Michigan is a welcoming state and we are proud of our rich history of immigration,” Snyder said, according to the Detroit Free Press. “But our first priority is protecting the safety of our residents.” The governor had previously said he was working with the Obama administration on plans to resettle Syrian refugees, with at least 200 already relocated by one agency, according to the newspaper. Snyder said his state wouldn’t allow for any Syrian refugees until the Department of Homeland Security reviewed its procedures for accepting migrants, according to the Free Press. Alabama currently has a single refugee processing center, in Mobile, Ala., approved by the State Department, but it hasn’t relocated any Syrian refugees, according to Bentley’s office. “The acts of terror committed over the weekend are a tragic reminder to the world that evil exists and takes the form of terrorists who seek to destroy the basic freedoms we will always fight to preserve,” Bentley said in his statement. “I will not place Alabamians at even the slightest, possible risk of an attack on our people,” he added. “The threat posed to Texas by ISIS is very real,” Abbott wrote in a letter Monday urging President Obama to halt his plans, pointing to a foiled ISIS-inspired plot in Garland, Texas, in May, among other incidents. “A Syrian ‘refugee’ appears to have been part of the Paris terror attack. American humanitarian compassion could be exploited to expose Americans to similar deadly danger,” Abbott wrote. A top aide to Obama said Sunday that the Obama administration still plans to allow 10,000 Syrian refugees into the U.S. over the next year despite the Paris attacks. “We had very robust vetting procedures for those refugees,” White House Deputy National Security Adviser Ben Rhodes said on Fox News. “There are women and children, orphans of this war, and I think we need to do our along with our allies to provide them a safe haven,” Rhodes added. The plan to allow the Syrian refugees into the U.S. has faced fresh criticism after the attack that left 129 dead and hundreds more injured. At least one suspect reportedly slipped into France among migrants. Obama maintained during remarks earlier Monday at the G-20 meeting in Turkey that the U.S. would continue to accept the refugees, including Syrians, only after “rigorous” security screenings. “Slamming the door in their faces would be a betrayal of our values,” he said.


WASHINGTON — State governments often play a small role in helping to resettle refugees. But despite protests from more than a dozen Republican governors who want to close their states to Syrian refugees, those governors probably have little power to stop them from coming, legal scholars say. “The one thing I feel very comfortable saying is there is absolutely no constitutional power for a state to exclude anyone from its territories,” said Stephen Legomsky, aWashington University of St. Louis law professor and former chief counsel of U.S. Citizenship and Immigration Services in the Obama administration. A growing number of Republican governors have protested the resettlement of Syrian refugees since the terrorist attacks in Paris last Friday. At least one of the Paris attackers was carrying a Syrian passport — but French officials said Saturday that the passport was a fake. Still, the Paris attacks have reopened the debate over the Obama administration’s decision in September to accept 10,000 Syrian refugees over the next year. The Republican governors have taken a range of approaches to the issue, but none has explained how they would legally keep Syrian refugees out. Whether states have to actively cooperate those those resettlements is another question, and that’s where many of the governors are trying to exert leverage.


Rejecting Syrian Refugee

Between April and October of 1980, amid an economic downturn, Fidel Castro announced that Cubans who wanted to leave could do so. It precipitated a mass exodus toward the United States. Around 125,000 Cubans fled the island in the Mariel boatlift. The question was what to do with them once they arrived. After all, huge infusions of refugees are often unwelcome, and rumors that the “Marielitos” included many released criminals made many Americans even less welcoming. In May, President Jimmy Carter informed Arkansas Governor Bill Clinton, then nearing the end of his first term in office, that 20,000 of the immigrants would be housed temporarily at Fort Chaffee in northwest Arkansas. Clinton backed the move by his fellow Democrat publicly, but was privately furious: “How could you do this to me? I busted my ass for Carter. You’re gonna get me beat.” Once they’d arrived, the resettlement process ground to a halt, and in June, a riot erupted, and Clinton called out the National Guard. Several months later, as he’d predicted Clinton lost his bid for reelection to Frank White, a first-time candidate for office. In the same election, Carter lost the White House. The story turned out happily for Clinton, who defeated White in 1982 and went on to become president, but Carter and Clinton reportedly still dislike each other. “I will not place Alabamians at even the slightest, possible risk of an attack on our people,” Governor Robert Bentley said. “Please continue to join me in praying for those who have suffered loss and for those who will never allow freedom to fade at the hands of terrorists.” Alabama does not immediately appear a likely terrorist target, and officials said there were no specific threats. There is a State Department-approved refugee-processing center in Mobile, but apparently no Syrians have been processed or resettled in Alabama. More interesting is Michigan, where Governor Rick Snyder was the first to announce he’d block resettlement. “Michigan is a welcoming state and we are proud of our rich history of immigration,” he said in the statement. “But our first priority is protecting the safety of our residents.” The Great Lake State has the highest proportion of Arab American residents, and the second highest number of Arab Americans, in the nation. In September, when he announced his intention to accept refugees, Snyder had presented it as a matter of neighborliness. “Isn’t that part of being a good Michigander?” he asked. More:


What Wall Street’s Return to Central Banking May Mean for Policy

Wall Street is again leading to the corridors of central banks. From Minneapolis to Paris, investors and financiers are increasingly being hired to help set monetary policy less than a decade since the banking crisis roiled the world economy and chilled their public-sector employment prospects. Academic studies of historical voting records at central banks suggest the new trend may mean an increased bias towards tighter monetary policy. Last week’s appointment of Neel Kashkari to run the Federal Reserve Bank of Minneapolis as of January means a third of the Fed’s 12 district banks will soon be run by officials with past ties to Goldman Sachs Group Inc. Kashkari also worked for Pacific Investment Management Co. and managed the U.S. Treasury’s $700 billion rescue of banks during the financial crisis. The New York Fed’s William Dudley was Goldman’s chief U.S. economist for almost a decade before joining the central bank in 2007, while recently appointed Dallas Fed President Robert Steven Kaplan spent 22 years at Goldman and rose to become its vice chairman of investment banking. Although Patrick Harker joined the Philadelphia Fed from the University of Delaware he also served as an independent trustee of Goldman Sachs Trust. Fed Vice Chairman Stanley Fischer and Atlanta Fed President Dennis Lockhart both spent time working for Citigroup Inc. It’s not just the Fed. Bank of England Governor Mark Carney and European Central Bank President Mario Draghi both famously worked for Goldman before entering central banking, yet they have recently been joined by others with financial backgrounds. The new head of the Bank of France, Francois Villeroy de Galhau, spent 12 years at BNP Paribas SA, becoming its chief operating officer in 2011. Meanwhile, in September, Gertjan Vlieghe joined the BOE’s Monetary Policy Committee from hedge fund Brevan Howard having also previously worked for Deutsche Bank AG. So what does the re-emergence of financiers in the halls of central banks mean for monetary policy at a time when it’s set to diverge internationally? More:


The Myth of the Terrorist Mastermind

Now that French authorities have named a suspected chief planner of the Paris attacks—27-year-old Belgian ISIS veteran Abdelhamid Abaaoud—the press is building him up as if he’s 100 feet tall. Abaaoud isn’t just another opportunist butcher of innocent flesh, he’s a “mastermind,” concur the New York Times, the Los Angeles Times, the Associated Press, CBS News, Fox News, Time, NPR, the Guardian, NBC News, the Independent, and other outlets. Even POLITICO gets in on the act, though hedging it as the “alleged mastermind.” It doesn’t diminish the horror of Paris slaughter in the least to note that there was nothing “masterful” about the operation that took place last Friday. Nor was any special genius on display at two failed operations from earlier this year, on a high-speed train and in a church, attributed to Abaaoud’s know-how. These two operations—providing shooters with firearms and pointing them in the direction of a group of unsuspecting civilians—took about as much imagination and skill as ordering a pizza. The Paris assault was more complex: Abaaoud allegedly dispatched three teams of attackers to six or seven locations to perform their killing chores. But no true mastermind would brag about the results. At or near the stadium, where upwards of 80,000 fans were watching a soccer match between Germany and France, the three suicide bombers detonated their charges and killed only one other person.

About two score victims were killed at restaurants by gunmen, and other 89 were killed at the sold-out Bataclan theater (1,500 capacity) by three shooters and their suicide bombs. It might take a cold heart to say this, but by one measure the Paris attack was a failed plan. Several hundred or maybe even 1,000 could have died if a real mastermind had been in charge. If we accept estimates that eight killers were responsible for the Paris attacks, they managed to kill fewer people, on average, than one unbalanced person did at Sandy Hook Elementary School. Nobody calls him a mastermind.


Recent Setbacks Cast Harsh Light on Cyrus Vance, the Manhattan Prosecutor

As the district attorney of Manhattan, Cyrus R. Vance Jr. enjoys the spotlight of being a top prosecutor in the nation’s financial capital. Yet the spotlight has lately been harsher in the wake of several setbacks in white-collar trials, including the mistrial last month in the criminal case against three former executives at the once-mighty law firm Dewey & LeBoeuf. As a result, lawyers have been second-guessing about whether Mr. Vance’s office has made financial trials overly complex and has been too aggressive in pursuing matters that might best be treated as civil disputes. Apparent missteps by his office in a mortgage fraud case involving a Chinatown bank — the details of which have just emerged in a court filing — raise additional questions about the trial readiness of his prosecutors. Mr. Vance rejects those suggestions, saying it is unfair to draw too many conclusions from any two cases. “If you look at two cases, it is like looking at crime statistics for the weekend,” Mr. Vance, 61, said in a recent interview.

Still, he said he was willing to concede that the trial of former Dewey executives Steven H. Davis, Stephen DiCarmine and Joel Sanders could have been handled better. He said if there is a new trial for the men, who were accused of orchestrating an accounting fraud that deceived the law firm’s financial backers, it will have to be “simpler and shorter.”


Prosecutors Agree to Drop Tax Shelter Scheme Charge

In a rare settlement, Manhattan federal prosecutors agreed to drop charges Monday against a former Deutsche Bank AGDBK.XE +0.35% broker accused of participating in one of the largest tax frauds in U.S. history. The former broker, David Parse, had fought the Justice Department for six years denying the allegations. On Monday, Mr. Parse reached a detente with federal prosecutors, agreeing to a deal under which the charges against him will be dropped in a year if he complies with certain terms. U.S. District Judge Laura Taylor Swain signed off on the deal, a deferred prosecution agreement, during a hearing in Manhattan federal court Monday. Deferred prosecution agreements are rare in white collar cases involving individual defendants, though they are frequently used in corporate criminal cases. Prosecutor Stanley Okula said the Manhattan U.S. Attorney’s office had decided not to pursue its case against Mr. Parse in an “exercise of discretion” after considering a range of factors, included whether the case was an appropriate use of the office’s resources. Mr. Parse, 54 years old, was indicted in 2009 for allegedly participating in a tax shelter scheme and convicted after a trial in 2011 on mail fraud while being acquitted on four other counts. In a bizarre twist after the trial, U.S. District Judge William Pauley determined a female juror had lied about her professional background in order to get on the jury. Judge Pauley ordered new trials for three of Mr. Parse’s co-defendants but did not do so for Mr. Parse, finding his lawyers had known or suspected prior to the trial that the juror had lied and proceeded with the trial in spite of that. Mr. Parse was sentenced to 3 ½ years in prison but the Second U.S. Circuit Court of Appeals overturned the conviction, reversing​ Judge​ Pauley’s decision, citing the juror. More”



Ethics Commission Offering Secret Advice

MONTGOMERY—It is not widely know that the Alabama Ethic Commission provides confidential opinions to public officials, especially legislators…but they do. Under former Director Jim Sumner, verbal advice was given from time to time without the weight of protection. Under the new administration of Tom Albritton, that private advice comes in written form. Unlike an official Advisory Opinion voted on by the full Ethics Commission, these private letters given primarily to lawmakers are not get-out-of-jail-free cards, but could serve as reasonable doubt in a legal proceeding. Unlike an Advisory Opinion, which is made public (if you know what you are looking for), this private legal advice is kept secret and only becomes public once a lawmaker is in trouble. Why does the Ethics Commission want to keep this advice secret and why is it being provided? Is this practice of giving free, secret, legal advice further proof of the Commission’s willingness to kiss the ring of even the lowliest legislator? Or is it a symptom of a broken institution that should be flushed like so much refuge? The Commission has for many years been viewed as a paper tiger, something the Republican Supermajority tried to address when it gave the Commission subpoena power and severed the Commission’s budget from legislative whim. This individual publicly undisclosed guidance smacks of something more sinister. These cozy little permissions and secret loopholes granted certain individual legislators is scandalous and should demand a thorough investigation by a select panel under the direction of the Attorney General’s Office. In fact, here’s a better idea: Demolish the entire Ethics Commission and place its duties under the State’s Attorney General. The Attorney General’s Office already has a Opinions Division and those opinions are actually reviewed by more than one lawyer. Currently, legal opinions offered by the Ethics Commission are written by one man: Hugh Evans. While no one is questioning Evans’ knowledge and experience concerning Ethics Law, peer review and other legal-eagle eyes can be useful. These private opinions offer no public value at all, they only benefit the individual office holder. If a lawmaker is worried about committing an Ethics violation, they should hire an attorney. The Ethics Commission is not a legal “Dear Abby” for wayward lawmakers. If a legislator is worried that he or she might be breaking the law, they probably are.

There are serious problems inside the Ethic Commission, giving way to suspicion and fear that it, too, may very well be corrupted from the inside out. More:


Lesbian mother asks U.S. Supreme Court to review Alabama Supreme Court adoption ruling

A woman on Monday asked the U.S. Supreme Court to review an Alabama Supreme Court decision refusing to recognize a Georgia court’s recognition of her adoption of her lesbian partner’s three children.

The children, born through artificial insemination during the couple’s relationship, are living with their biological mother – identified as E.L. in court filings – in Jefferson County. The non-biological mother, identified by the initials as V.L., adopted the children in Georgia in 2007. V.L. also asked the U.S. Supreme Court on Monday for an emergency order permitting her to visit her children while her appeal is pending, according an announcement by the National Center for Lesbian Rights. As a result of an earlier Alabama order, V.L. has not had visitation with her children—ages 12, 10, and 10—for nearly seven months, even though she has raised them from their birth,  the NCLR states. In her request, V.L. notes that the Alabama Supreme Court’s decision is unprecedented, the NCLR states. The case was first appealed to the Alabama Court of Civil Appeals. That court ruled in October 2014 that the Jefferson County judge had erred when he granted V.L. visitation rights. But then that appeals court reversed itself in February. The case was then appealed to the Alabama Supreme Court. On Sept.18 the Alabama Supreme Court issued an order refusing to recognize V.L.’s Georgia adoption and declaring it void. The Alabama Supreme Court found that Alabama did not have to recognize adoption by the woman – V.L. – of her partner’s biological children because it found  the Georgia court didn’t properly apply Georgia law. “Before this ruling, no state supreme court has refused to recognize a same-sex parent’s adoption from another state—or any out-of-state adoption—based on a disagreement with how the court issuing the adoption interpreted its own adoption laws,” according to the NCLR statement.




Sorry FDR: There is something to fear besides fear itself

There is something to fear besides fear itself. There is ISIS or ISIL and the kind of indiscriminate terrorism that reaches into cities, that seizes our souls and takes us back to the darkest moments of our history. There is plenty to fear. There are nukes and cyber attacks and assaults on our very frame of reference. There is a proliferation of crazy people with guns and the will to use them. There is racial unrest and Kim Jong-un and Vladimir Putin’s shirtless visage. There is Ebola and Alzheimer’s Disease and the possibility that Donald Trump could become president of the United States. So sorry FDR. Here in the 21st century there is plenty to fear besides fear. No question. The question – now as back then — is whether we allow our own fearfulness to become more dangerous than the things that frighten us. It’s easy, at times like these, to well up in anger and fear. It’s natural to rush to lock the doors and hide from ourselves and our feelings and from everything and everyone we believe threatens our people and our way of life. It is easy to understand that urge and inclination, to grasp the politics that make governors like those in Alabama and Michigan, Louisiana, Texas and elsewhere slam the doors of their states in fear, to toss the keys and shout to D.C. that they will accept no Syrian refugees. “As your Governor, I will not stand complicit to a policy that places the citizens of Alabama in harm’s way,” Alabama Gov. Robert Bentley said in a statement as he sought to declare Alabama off limits. “The acts of terror committed over the weekend are a tragic reminder to the world that evil exists and takes the form of terrorists who seek to destroy the basic freedoms we will always fight to preserve.” And of course the acts of terror committed over the weekend are a tragic reminder to the world that evil exists. But if terrorists want to destroy the basic freedoms we fight to preserve, they found their target. Because fear does what fear always does. It steals our freedom more effectively than any terrorist. It robs us of who we are, and who we are is the very essence of our freedom. Fear makes us turn away from more charitable values, to see the enemy at our every gate. It causes us to rush toward the mass appeal – and the confinement – of the mob.

It is easy to look at the horror eight people carried out in Paris and imagine the ease with which it could happen here. It is easy to look with revulsion at the 129 dead in that city and see ourselves and our friends and loved ones in the dark places of the mind. It is harder to look outside our own locked doors at the humanity in Syria itself, where six million children – more than the entire population of the state of Alabama – have been forced to flee their homes and quit school in hunger and uncertainty. It is hard at times like these to remember the 12 million people who have been displaced. It is harder than it need be to mourn the 240,000 people killed in the Syrian War or the thousands unaccounted for. It is easy, as Bentley has tried to do, to lock the door in the name of safety. It is harder, as Vermont Gov. Peter Shumlin did, to offer cautious sanctuary.


Morning Money

HOW 2016 INSIDERS VIEW THE ECONOMY — POLITICO’s Ben White and Steven Shepard: “Income inequality is the most pressing economic concern for Democrats, while Republicans are focused on growth, even over traditionally conservative priorities like deficit reduction. … That’s according to a special survey of the POLITICO Caucus, a bipartisan group of influential political strategists, operatives and activists in Iowa, New Hampshire, South Carolina and Nevada, who were asked to prioritize the economic issues driving the presidential campaigns.

“The survey was conducted earlier this month, prior to the terrorist attacks in France last week, and was supplemented by on-the-ground reporting in Iowa, which will cast the first votes in the presidential nominating process next February. Offered identical lists of issues — economic inequality, economic growth, deficit reduction, taxes and unemployment — insiders differed wildly.

“The overwhelming majority of Democrats, 81 percent, said inequality was most important, while nearly 65 percent of Republicans picked growth. ‘Democratic base voters see the country in stark terms: the small group at the top who’ve got it all, and everyone else struggling to make it in a country that won’t even guarantee them modest sick time or family leave,’ said a Nevada Democrat, who, like all of the Caucus insiders, responded anonymously.

THE SCENE IN IOWA — “Here in the first-in-the-nation caucus state, those arguments are resonating acutely with potential caucusgoers in both parties. Conditions are improving nationwide — even more rapidly in Iowa — but serious problems persist. Unemployment has recovered close to historical norms nationally. And it’s down to just 3.8 percent in Iowa, where the financial services and agricultural technology industries are booming, especially around Des Moines.

“Dean Bowers, a farmer for decades before building a home-repair business, told POLITICO outside the Drake Diner on a windy day last week that he may eventually support one of the GOP candidates. But the 88-year-old balks at the way Republicans have talked about the economy during their highly watched debates. ‘They get up there and say, ‘Oh, everything is so awful. America is falling apart.’ And it makes me mad, because it just isn’t true,” said Bowers. ‘It’s not true here. There’s plenty of work.’

“But growth remains slow both in Iowa and nationwide. Wages are sluggish, and the labor force participation rate is at its lowest level in nearly 40 years. The country faces an $18-trillion debt, and entitlement programs whose long-term financing is in peril. Many Americans think the nation is on the wrong track and that the deck is stacked for powerful interests in Washington and corporate America.”

JOIN US IN IOWA — POLITICO is hosting an event (featuring yours truly and Steven Shepard) in Iowa on Wednesday to talk more about how the economy is playing in 2012. Lots of great guests including Gene Sperling, Douglas Holtz-Eakin, Steve Grubbs and more. Come check it out if you will be in Des Moines.

MORE ON THE ECONOMIC IMPACT OF THE PARIS ATTACKS — Manulife’s Megan Greene: “The coordinated terrorist attacks on Friday evening were concentrated in Paris, but the implications will be felt far beyond the French capital city, France, or even Europe. The markets opened up slightly down on Sunday evening and Monday morning, but the Paris attacks are unlikely to have a direct, long-lasting impact on various asset-classes. They will however significantly impact politics in Europe and the EU’s relationship with a number of other regions.

“The most obvious impact of the Paris terror attacks on Europe is to shift the debate on the refugee crisis from the humanitarian crisis to the security crisis. The connection between ISIS fighters and Syrian refugees streaming into Europe was unfortunately highlighted very quickly by analysts and the media — it took the BBC less than an hour during its coverage of the events on Friday to connect the attacks with Muslim refugees entering Europe. This connection is for the most part dead wrong.”

SHUTDOWN THREAT OVER REFUGEES? — POLITICO’s Seung Min Kim , Jake Sherman and Burgess Everett: “A cascade of Republicans on Monday implored the Obama administration to scrap plans to resettle 10,000 Syrian refugees in the United States next year, saying they pose an unacceptable security risk in the wake of last week’s terrorist attacks in Paris. And, in a dramatic twist, the sudden standoff is raising the possibility of a government shutdown next month. …

“Throughout the day a host of Republican governors around the country, wary that refugees could end up in their home states, blasted … Obama’s plans. But those governors lack real sway over the process, and some are asking Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Paul Ryan (R-Wis.) to insert a provision in the Dec. 11 spending bill that would bar more Syrian settlers. … The politics are moving fast: The Democratic governor of New Hampshire, a Senate candidate, is siding with conservatives, and Sen. Lindsey Graham (R-S.C.) is reversing his support for a $1 billion spending bill intended to allow in more Syrian refugees after touting the measure just weeks ago”

M.M. ERRATA — The item from an anonymous source on financial firm locations in Sept. 2011 had some inaccuracies and omissions. Another emailer notes: “Lehman only moved up after 9/11 and because of 9/11. Merrill’s entire operation was until very recently in the WFC. Their HQ building was damaged in the attacks JP Morgan still fills up One Chase Manhattan Plaza — a couple blocks from WTC.

“Morgan Stanley had about 4k employees in WTC. Citi had more than 2K workers in 7WTC and their investment bank is on Greenwich Street a few blocks above the WTC. Deutsche Bank has been downtown since they bought Bankers Trust. NASDAQ moved to Times Square after 9/11.”

RASKIN PREVIEW — From remarks to be delivered today at The Clearing House’s conference in New York: “As owners and operators of key portions of the financial sector, the responsibility for assessing and addressing many of these threats and vulnerabilities is yours. … The point here is that this is not just a technological challenge. It is a challenge of changing human behavior; and it’s a challenge of changing governance and business and operational processes. Virtually every process you engage in needs to be reviewed and updated, enterprise-wide, from a cyber-resiliency perspective. This sounds daunting, but none of this is impossible.”

GOOD TUESDAY MORNING — Just two defeated NFL teams left — New England and Carolina — following the Bengals loss last night at home to the Texans. Email me on and follow me on Twitter @morningmoneyben.

DRIVING THE DAY — President Obama is in Manila, Philippines … House Financial Services subcommittee has a hearing at 10:00 a.m. on “Dodd-Frank Five Years Later: What Have We Learned from Conflict Minerals Reporting?” … Raskin speaks this morning at The Clearing House’s Annual Conference in New York. … Treasury at 4:00 p.m. releases the Treasury International Capital (TIC) data for September 2015 … Consumer Prices at 8:30 expected to rise 0.2 percent headline and core … Industrial Production at 8:30 a.m. expected to rise 0.1 percent …

TCH AGENDA — Features both Raskin and Fed Gov. Jerome Powell:

WHY WALL STREET LOVES HILLARY — Just a hint, it ain’t just 9/11. Via Bloomberg’s Max Abelson:

THE TRUMP VIEW OF THE ECONOMY — Via a Maggie Haberman tweet: “Real unemployment, Trump says, ‘is between 20 and 25 percent.” Of course in reality, it is not. Even the broad U6 measure is now at 9.5 percent

In the same speech, Trump said he had magical ability to sense when terrorism was about to happen.

WHAT IS THE ECONOMIC COST OF TERRORISM? — NYT’s Andrew Ross Sorkin: “It feels frivolous to ask that question after the horrific Paris attacks, but it is one of the central issues with which policy makers and investors are grappling. The conventional wisdom is that an act of terrorism accounts for a mere blip in economic damage. Economists often point to research showing that after the Madrid train bombings in 2004 and the London subway bombings in 2005, gross domestic product in those countries barely budged and showed little direct correlation to the attacks.

“Even in the United States after the Sept. 11 attacks, consumption remained relatively stable, though investment fell … If the stock market can be considered a barometer of economic confidence, it is remarkable to see how quickly it typically rebounds after a terrorist event. … On Monday, market participants steeled themselves for a steep decline, but the indexes in the United States were up more than 1 percent, and markets in Europe were close to flat. But that reaction — and the reaction to previous attacks — may belie the true cost of terrorism and, more important, underestimate the potential cost of the Paris killings. …

“The attack in Paris could have far-reaching implications for the future of the eurozone and for companies doing business there. The events in Paris could add to the pressure to close borders in the eurozone. It is also reigniting a debate about privacy and surveillance that could have big implications for technology companies”

TECH FIRMS UNDER PRESSURE — FT’s Geoff Dyer: “The Paris attacks are reviving the debate about whether terrorists are taking advantage of encryption technologies that make their communications impossible for law enforcement to read. The Obama administration said last month the time was not right for legislation that would force technology companies to find ways to decode messages after facing stiff resistance from the industry. …

“However, with intelligence agencies in both Europe and the US facing questions about how such a multi-pronged attack could have been planned without detection, the administration and some of its allies in Congress stepped up their criticism on Monday of the proliferation of encrypted messaging. Since the Edward Snowden revelations in 2013 about snooping by the National Security Agency, technology companies including Apple and Google have strengthened encryption on products used by millions of people and which the companies themselves cannot break”

ASIA SURGES — Reuters: “Asian stocks rose across the board on Tuesday, relieved after seeing Wall Street take the Paris attacks in stride and surging overnight, while expectations for a December rate hike by the Federal Reserve kept the dollar on a bullish footing. … ‘Investors think that the attacks in Paris would have little impact on the global economy in the long-term,’ said Hikaru Sato, senior technical analyst at Daiwa Securities in Tokyo. … Asia took early leads from Wall Street, which surged on Monday as investors decided Friday’s attacks in Paris would have little long-term impact on the U.S. economy and corporate earnings. The Dow rose 1.4 percent and the S&P 500 surged 1.5 percent”

BIGGEST COST SINCE 9/11? — Bloomberg: “In the wake of Friday’s massacre in Paris, a new report says the world is paying the highest price for terrorism since the 2001 attack on New York’s Twin Towers. In 2014, acts of terror cost the world $52.9 billion — roughly the size of Bulgaria’s entire annual gross domestic product — compared with $51.51 billion in the aftermath of Sept. 11, according to the latest annual Global Terrorism Index by the Institute for Economics and Peace, which has been collecting data since 1997.

“To put a price on terrorism, IEP calculates the value of property damage, say from a suicide bombing in a building, and the cost of death and injury, including medical care costs and lost earnings. It doesn’t take into account the increased number of security guards, higher insurance premiums, or city gridlock in the aftermath of an assault. While the findings do not include the impact of Friday’s carnage in the French capital — those will be quantified in next year’s study — the economic consequences of Europe’s worst terror attack in a decade so soon after January’s Charlie Hebdo shootings will reverberate across the European Union almost immediately”


JUST IN TIME FOR 2016 — The updated POLITICO App is now live. Get the politics and policy you need in a dynamic new design. Don’t miss out. Download on the App Store.

THE INSIDERS TAKE — As 2016 heats up, so has the POLITICO Caucus. POLITICO’s exclusive insider survey of more than 200 political operatives, activists and elected officials has expanded from Iowa and New Hampshire to two additional states: South Carolina and Nevada. Check out the weekly survey and the new Caucus home, here.

ALSO TODAY: CHAMBER FLY-IN — Per U.S. Chamber: “Small business owners from across the country are voicing their concerns with the Department of Labor’s proposed fiduciary rule at a small business fly-in hosted by the U.S. Chamber of Commerce today. Chamber President and CEO Thomas J. Donohue will explain how the proposed rule will impact the ability of small businesses to offer retirement plans and benefits while Representative Peter Roskam (IL-6) will discuss the Congressional response and action”

ALSO TODAY: MILLENNIAL SAVINGS EVENT — Per FSR: “The Financial Services Roundtable Save 10 Initiative is hosting Make Retirement Great Again (#FeelTheEarn) for a conversation about millennials and saving. Rep. Elise Stefanik is among the participants.”

HOUSE PASSES GSE PAY BILL — Per release: “Today, the U.S. House of Representatives passed legislation to cap the salaries of the CEOs of Fannie Mae and Freddie Mac modeled on H.R. 2243, the Equity in Government Compensation Act of 2015, as introduced by U.S. Representative Ed Royce (R-Calif.). The bill is the first major standalone legislation enacted that deals with the GSEs since they were placed into conservatorship should the President sign it into law as expected.”

POTUS Events

In the morning, President Obama will arrive in Manila, Philippines. In the afternoon, Obama will participate in a bilateral meeting with Prime Minister Malcolm Turnbull of Australia. The president will remain overnight in the Philippines.

Floor Action

The House returns at 10 a.m. First votes expected: 1:30-2:30 p.m. Last votes expected: 3:30-4:30 p.m. The Senate will convene at 10 am for a moment of silence for the victims of the Paris attacks. THUD appropriations cloture vote on tap for Wednesday unless an agreement is reached sooner. Also on the deck: a resolution disapproving EPA rules on carbon emissions.

Krebs Daily Briefing 16 November 2015

Thomas L. Krebs, Securities Litigation, Regulation and Compliance Attorney Lawyer (c)2014 Brandon L. Blankenship
Thomas L. Krebs


A new Islamic State video threatens a Paris-style attack on Washington

A video released by an Islamic State sub-group appears to show militants in Iraq praising the Paris shootings and warning that a similar attack could take place in Washington. The message, which was distributed by Islamic State-related social network accounts on Monday, claimed to be made by Wilayat Kirkuk, a group based in Salahuddine province, north of Iraq. Its authenticity could not immediately be confirmed. The six-minute long video begins with a selection of news clips showing the aftermath of the attacks, with French President Francois Hollande condemning them. [France launches fierce assault on ISIS targets in Syria] Later in the video, a man identified as “Al Ghareeb the Algerian” speaks to the camera, threatening the “crusader” nations in the coalition against the Islamic State. The United States’ capital city is specifically singled out. “We say to the states that take part in the crusader campaign that, by God, you will have a day, God willing, like France’s and by God, as we struck France in the center of its abode in Paris, then we swear that we will strike America at its center in Washington,” the man shown says, according to a translation from Reuters. The same man also said that European nations should expect similar attacks. “I say to the European countries that we are coming, coming with booby traps and explosives, coming with explosive belts and [gun] silencers and you will be unable to stop us because today we are much stronger than before,” he said. Friday’s attacks in Paris, which have left at least 129 people dead, were claimed by the Islamic State shortly afterwards. French warplanes launched a retaliatory attack on Sunday, dropping 20 bombs on the Islamic State’s de facto in Raqqa, Syria.

U.S. Warplanes Strike ISIS Oil Trucks in Syria

ISTANBUL — Intensifying pressure on the Islamic State, United States warplanes for the first time attacked hundreds of trucks on Monday that the extremist group has been using to smuggle the crude oil it has been producing in Syria, American officials said. According to an initial assessment, 116 trucks were destroyed in the attack, which took place near Deir al-Zour, an area in eastern Syria that is controlled by the Islamic State. The airstrikes were carried out by four A-10 attack planes and two AC-130 gunships based in Turkey. Plans for the strike were developed well before the terrorist attacks in and around Paris on Friday, officials familiar with the operation said, part of a broader operation to disrupt the ability of the Islamic State, also known as ISIS or ISIL, to generate revenue to support its military operations and govern its territory. American officials have long been frustrated by ability of ISIS to generate tens of million of dollars a month by producing and exporting oil. To disrupt that source of revenue, American officials said last week that the United States had sharply stepped up its airstrikes against infrastructure that allows ISIS to pump oil in Syria. Until Monday, the United States had refrained from striking the fleet used to transport oil, believed to include more than 1,000 tanker trucks, because of concerns about causing civilian casualties. As a result, the Islamic State’s distribution system for exporting oil had remained largely intact. The new campaign is called Tidal Wave II. It is named after the World War II effort to counter Nazi Germany by striking Romania’s oil industry. Lt. Gen. Sean B. MacFarland, who in September assumed command of the international coalition’s campaign in Iraq and Syria, suggested the name. To reduce the risk of harming civilians, two F-15 warplanes dropped leaflets about an hour before the attack warning drivers to abandon their vehicles, and strafing runs were conducted to reinforce the message. More:

Here is ISIS’s statement claiming responsibility for the Paris attacks

ISIS has issued a statement claiming responsibility for the attacks in Paris, calling the city a capital of “crusaders” as well as “prostitution and vice.” It warns of more attacks if France continues in the “crusader campaign,” an apparent reference to France’s role in air strikes against ISIS in Syria and Iraq. The statement, below, is not surprising: ISIS often claims credit for terror attacks, whether it was responsible or not. And while there is strong reason to suspect ISIS responsibility for the Paris attacks that killed over 120, including French President Francois Hollande stating as much, the ISIS statement is still a bit odd. Terror groups, when they claim credit for attacks, will sometimes include details of the planning or execution that establish the group was indeed responsible. There are none here; it details nothing that was not publicly available information from news reports. It also includes no biographical information on the attackers, even a name or photo, though terror groups will often lionize its attackers as “martyrs” in such statements. None of this is to argue that ISIS is thus not responsible; it is entirely possible the group may later release more information to establish its role. It is also possible that the attack was launched by a local ISIS cell that did not share, or was unable to share, background details with the group’s central command back in Syria. But it is worth keeping this in mind as you read the group’s claim of responsibility below. See statement:

What ISIS Really Wants

The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it. What is the Islamic State? Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors. The group seized Mosul, Iraq, last June, and already rules an area larger than the United Kingdom. Abu Bakr al-Baghdadi has been its leader since May 2010, but until last summer, his most recent known appearance on film was a grainy mug shot from a stay in U.S. captivity at Camp Bucca during the occupation of Iraq. Then, on July 5 of last year, he stepped into the pulpit of the Great Mosque of al-Nuri in Mosul, to deliver a Ramadan sermon as the first caliph in generations—upgrading his resolution from grainy to high-definition, and his position from hunted guerrilla to commander of all Muslims. The inflow of jihadists that followed, from around the world, was unprecedented in its pace and volume, and is continuing. Our ignorance of the Islamic State is in some ways understandable: It is a hermit kingdom; few have gone there and returned. Baghdadi has spoken on camera only once. But his address, and the Islamic State’s countless other propaganda videos and encyclicals, are online, and the caliphate’s supporters have toiled mightily to make their project knowable. We can gather that their state rejects peace as a matter of principle; that it hungers for genocide; that its religious views make it constitutionally incapable of certain types of change, even if that change might ensure its survival; and that it considers itself a harbinger of—and headline player in—the imminent end of the world. More:

From Russia with Schadenfreude

It took the hundreds of theatergoers a few moments to realize that the armed gunmen shooting volleys into the air were not part of the show. A few people tried to flee, but it was too late: The gunmen had taken control of the theater and began strapping explosives to the room’s columns. They hung an Islamist flag from the stage and explained to their hostages that it was retribution for their country’s war against them and their Muslim brethren. But it was not Syria of which they spoke, but Chechnya, and it was not the Bataclan, in Paris, but the Dubrovka Theater in Moscow. It was not Nov. 13, 2015, but Oct. 23, 2002. The crowd was there not to see Eagles of Death Metal, but a play called Nord-Ost. And instead of holding the hall for a couple of hours, the Chechen guerrillas held the theater for three days, not allowing the 900 hostages to use the restroom for the duration and forcing them to use the orchestra pit instead. Like Paris, Moscow too has known terror, slicing sharply, unexpectedly through its cosmopolitan evenings. It was hard, watching the attacks in Paris unfold, for Moscow reporting veterans not to think of the parallels with the Dubrovka Theater crisis, 13 years prior, in part because like the siege of Paris’s Bataclan concert hall on Friday night, the siege of the Dubrovka Theater too ended with mass casualties. So when Paris exploded in terror on Friday, Muscovites imagined they knew how Parisians felt. On Saturday morning, there was a traffic jam around the French Embassy in Moscow as locals ferried flowers, stacking them on the pavement in a massive pyre of stems and petals. Others waited in line to add their mementos of empathy. Many cried, even those who said they had no loved ones in Paris. They just knew how those in Paris felt. “We are one family,” one woman told TV Rain. But not everyone’s empathy took the form of sympathy. Many Russians took the opportunity to chide their naive French counterparts for bringing the terror on themselves. More:

British Authorities Accuse 10 of Rigging Benchmark Interest Rate

LONDON — British authorities said on Friday that they had begun criminal proceedings against 10 current and former employees of Barclays and Deutsche Bank, accusing them of manipulating a global benchmark interest rate. The accusations, made by the Serious Fraud Office, which investigates financial crime in Britain, are the first by the agency that relate to the euro interbank offered rate, or Euribor. The fraud office has charged more than a dozen people as part of a long-running investigation into the manipulation of the London interbank offered rate, a similar benchmark interest rate known as Libor. The Libor scandal has led to billions of dollars in fines and has rocked the reputations of some of the world’s biggest banks, including Barclays, the Royal Bank of Scotland, UBS and Deutsche Bank. Barclays and Deutsche Bank declined to comment on Friday. “The investigation continues,” the Serious Fraud Office said in a statement. The individuals in the criminal proceedings brought by the Serious Fraud Office on Friday include Christian Bittar, a former senior trader at Deutsche Bank. More:

Anonymous vs. the Islamic State

For John Chase, the breaking point came on Jan. 7, when al Qaeda-linked militants gunned down 12 people at the Paris office of Charlie Hebdo. Subsequent attacks by a gunman affiliated with the Islamic State would take five more lives. Watching triumphant jihadi messages bounce across Twitter, the 25-year-old Boston native was incensed. They needed to be stopped. Although Chase’s formal education ended with high school, computers were second nature to him. He had begun fiddling with code at the age of 7 and freelanced as a web designer and social media strategist. He now turned these skills to fighting the Islamic State, also known as ISIS. Centralizing other hacktivists’ efforts, he compiled a database of 26,000 Islamic State-linked Twitter accounts. He helped build a website to host the list in public view and took steps to immunize it against hacking counterattacks by Islamic State sympathizers. He even assumed an appropriately hacker-sounding nom de guerre, “XRSone,” and engaged any reporter who would listen. In doing so, Chase briefly became an unofficial spokesman for #OpISIS — and part of one of the strangest conflicts of the 21st century. For more than a year, a ragtag collection of casual volunteers, seasoned coders, and professional trolls has waged an online war against the Islamic State and its virtual supporters. Many in this anti-Islamic State army identify with the infamous hacking collective Anonymous. They are based around the world and hail from every walk of life. They have virtually nothing in common except a passion for computers and a feeling that, with its torrent of viral-engineered propaganda and concerted online recruiting, the Islamic State has trespassed in their domain. The hacktivists have vowed to fight back. The effort has ebbed and flowed, but the past nine months have seen a significant increase in both the frequency and visibility of online attacks against the Islamic State. To date, hacktivists claim to have dismantled some 149 Islamic State-linked websites and flagged roughly 101,000 Twitter accounts and 5,900 propaganda videos. At the same time, this casual association of volunteers has morphed into a new sort of organization, postured to combat the Islamic State in both the Twitter “town square” and the bowels of the deep web.

Reports: Suspected mastermind of Paris attacks identified

PARIS — A French official identified the suspected mastermind of the attacks that killed 132 people in Paris on Friday as Belgian national Abdelhamid Abaaoud, according to media reports. The official, who the Associated Press said was not authorized to publicly speak about the investigation, said Abaaoud is believed to be linked to thwarted attacks on a high-speed train bound for the French capital and a church in the Paris area earlier this year. French radio station RTL described Abaaoud, 27, as “one of the most active (Islamic State) executioners” in Syria. Reuters reported that Abaaoud is currently in the war-torn country, citing a source close to the investigation. His brother Mohamed reportedly was interviewed and released by Belgian authorities. French Interior Minister Bernard Cazeneuve said raids were carried out on 168 locations across France overnight. He said 23 people were arrested and 104 people have been placed under house arrest over the past two days. French media reported that five people were arrested and police seized weapons including a rocket launcher at an apartment in Lyon.


U.S. top court rejects anti-abortion group’s Planned Parenthood case

The U.S. Supreme Court on Monday rejected an anti-abortion group’s bid to force the federal government to reveal more information about a $1 million grant it made in 2011 to women’s health provider Planned Parenthood in New Hampshire. The nine justices rejected an appeal filed by New Hampshire Right to Life, a group that sued the federal government under freedom of information law to find out about the arrangement. The Supreme Court’s action leaves in place a February ruling by the Boston-based 1st U.S. Circuit Court of Appeals in favor of the government. The government already has revealed some details about the grant, but New Hampshire Right to Life sought more, including a Planned Parenthood internal document that explains how the group operates its clinics. Planned Parenthood, which provides abortions as well as health services for women, has been under fire for months by Republican lawmakers and anti-abortion activists over a series of videos produced by an anti-abortion group that purport to show that it improperly sells fetal tissue to researchers for profit. Planned Parenthood gets about $500 million annually in federal funds, largely in reimbursements through the Medicaid health insurance program.

Two of the court’s conservative justices, Clarence Thomas and Antonin Scalia, said they would have heard the case.


‘The Attacks Will Be Spectacular’

An exclusive look at how the Bush administration ignored this warning from the CIA months before 9/11, along with others that were far more detailed than previously revealed. in Laden Determined to Strike in U.S.” The CIA’s famous Presidential Daily Brief, presented to George W. Bush on August 6, 2001, has always been Exhibit A in the case that his administration shrugged off warnings of an Al Qaeda attack. But months earlier, starting in the spring of 2001, the CIA repeatedly and urgently began to warn the White House that an attack was coming. By May of 2001, says Cofer Black, then chief of the CIA’s counterterrorism center, “it was very evident that we were going to be struck, we were gonna be struck hard and lots of Americans were going to die.” “There were real plots being manifested,” Cofer’s former boss, George Tenet, told me in his first interview in eight years. “The world felt like it was on the edge of eruption. In this time period of June and July, the threat continues to rise. Terrorists were disappearing [as if in hiding, in preparation for an attack]. Camps were closing. Threat reportings on the rise.” The crisis came to a head on July 10. The critical meeting that took place that day was first reported by Bob Woodward in 2006. Tenet also wrote about it in general terms in his 2007 memoir At the Center of the Storm.  But neither he nor Black has spoken about it publicly in such detail until now—or been so emphatic about how specific and pressing their warnings really were. Over the past eight months, in more than a hundred hours of interviews, my partners Jules and Gedeon Naudet and I talked with Tenet and the 11 other living former CIA directors for The Spymasters, a documentary set to air this month on Showtime. More:

Judge rules for Clinton on emails

A federal judge on Friday sided with the State Department against a conservative legal advocacy group trying to speed up the government’s release of some Hillary Clinton emails.

Judge Amit Mehta said that it would be “unwise and potentially risky” to order the government to quickly release some of the 329 emails specifically related to the 2012 terror attack in Benghazi, Libya, which it had recently discovered. Those emails — along with tens of thousands of others — are already on pace to be released by next February, as a result of a separate lawsuit under the Freedom of Information Act, said Mehta, a judge for the U.S. District Court for the District of Columbia, who was appointed by President Obama. The best solution would be “to keep this on course,” Mehta said, since the government has already “made concrete commitments” in the other case. The decision is a blow to Judicial Watch, the right-leaning legal group that has filed 20 lawsuits over the Clinton emails. Judicial Watch had asked for the Benghazi-related emails to be pulled out of that larger tranche and given special attention.

“This is just continued delay,” argued Judicial Watch lawyer Ramona Cotca, who complained that the “case has been pending for months.” The decision also underscores the deeply tangled web of legal cases surrounding Clinton’s emails, which have become a headache for the State Department as well as a drag on her presidential campaign. At issue were 242 emails to or from Clinton in 2012 that relate to the Benghazi attack, which the State Department had found during a second search in response to Judicial Watch’s request under the Freedom of Information Act. Many of those emails had not yet been disclosed to Congress, Judicial Watch said, and might have remained buried were it not for their lawsuit. More:


Supreme Court may wade back into abortion debate

 WASHINGTON — Nearly a quarter-century after its last major ruling on abortion created a fragile balance between women’s rights and government restrictions, the Supreme Court appears ready for a rematch. And like the last time, the debate would unfold in the midst of a presidential election. The first act could play out as early as Friday, when the justices may decide whether to hear a challenge to tough new limits placed on abortion clinics and doctors in Texas. The restrictions — forcing doctors to have admitting privileges at nearby hospitals and requiring clinics to measure up to outpatient surgery centers — threaten to leave the state with just 10 clinics clustered in four population centers and along the Mexican border. A similar law in Mississippi, which the justices also could agree to consider, threatens to close the state’s lone abortion clinic. Because of that, it was struck down by the same federal appeals court that upheld the Texas restrictions. If the court takes up one or both cases, its ruling next year will help clarify its 1992 decision in Planned Parenthood v. Casey, when a deeply divided court upheld the right to abortion while letting states impose restrictions that do not block women from obtaining services. “This will be the most important abortion rights case before the Supreme Court in almost 25 years,” says Nancy Northup, president of the Center for Reproductive Rights, which filed the lawsuit on behalf of several abortion clinics. “It’s overdue,” says Steven Aden, senior counsel with Alliance Defending Freedom, which has submitted briefs on behalf of several states in the legal battle. “The Caseystandard is unworkable and was ill-designed to begin with. We have more litigation now over the meaning of the Casey standard than we’ve ever had.” More:


White House on defense over Obama claim that ISIS is ‘contained’

The White House has been forced onto the defense over President Obama’s claim that the Islamic State in Iraq and Syria (ISIS) has been “contained” — a statement that came one day before the group carried out the deadliest massacre in France in a generation. “We have contained them,” Obama said in an interview with ABC News that aired on Thursday. “I don’t think they’re gaining strength.” The following day, a series of coordinated terror attacks killed 129 people across Paris in the country’s deadliest episode since World War II. The attacks forced the White House to defend the comments, which appeared to confirm critics’ suspicions that Obama has consistently underestimated ISIS. More than one year ago, Obama appeared to liken ISIS to al Qaeda’s “JV team” in a comment that has been repeatedly mocked by the president’s critics. “The president was referring very specifically to the question of ISIL’s geographic expansion in Iraq and Syria,” White House deputy national security advisor Ben Rhodes said on NBC’s “Meet the Press” on Sunday, using an alternate acronym for ISIS. “They had been on the march in both Iraq and Syria for some time,” he added. “But starting a year ago, we were able to halt that expansion.” Rhodes made his way onto multiple Sunday morning political talk shows with nearly identical comments to defend the Obama administration’s push against ISIS. “It’s a very specific point the president was making,” Rhodes said on CNN’s “State of the Union.” “The fact is we have been able to stop that geographic advance and take back significant amounts of territory in both Northern Iraq and Northern Syria,” he added on ABC’s “This Week with George Stephanopoulos.” Obama’s comment is already coming back to haunt him on the GOP presidential campaign trail. On Saturday, former executive Carly Fiorina accused Obama of taking a “victory lap” before the Paris attacks. Even Hillary Clinton, Obama’s former secretary of State and the Democratic front-runner, broke with the president on Saturday, claiming during a presidential debate that ISIS “cannot be contained.” More:


DraftKings, FanDuel Punch Back With Lawsuits Against Schneiderman

Daily fantasy-sports operators DraftKings Inc. and FanDuel Inc. aren’t just refusing to comply with New York Attorney General Eric Schneiderman’s demands that they stop conducting business in the state: They’re suing him. In separate lawsuits filed in civil court in Manhattan, the industry’s two largest players accused Mr. Schneiderman of waging an illegal campaign against them. (Read the WSJ story here.)

Mr. Schneiderman earlier this week issued cease-and-desist letters to the companies that  accused them of engaging in illegal gambling under state law and demanded they stop accepting wagers from New York customers. (You can read his letters here and here.) “The Attorney General’s actions constitute a shocking overreach. He has unleashed an irresponsible, irrational, and illegal campaign to destroy a legitimate industry, intending to deprive hundreds of thousands of New Yorkers of the use and enjoyment of these services,” states the complaint by DraftKings, which is represented by Randy Mastro of Gibson, Dunn & Crutcher LLP. FanDuel, which has retained Debevoise & Plimpton LLP, charged that Mr. Schneiderman’s assertions about the company are wrong and are damaging its reputation with consumers. Both companies are seeking a declaration from the court that their online contests are legal.

In a statement Friday, Mr. Schneiderman said the companies can expect a lawsuit from him too. “The Attorney General’s job is to enforce New York State law, and the law here is clear,” he said. “Because both companies have refused to follow the law in our state, we will take action to enforce state law.”

Law Blog wrote earlier about how the attorney general’s cease-and-desist demands aren’t enforceable without a court order. More:


Efforts to Rein In Arbitration Come Under Well-Financed Attack

A television ad during the Republican presidential debate last Tuesday depicted pale bureaucrats rubber-stamping the word “DENIED” on the files of frustrated Americans, beneath a red banner of Senator Elizabeth Warren evoking a Communist apparatchik. The ad attacks the Consumer Financial Protection Bureau, a federal agency created with Ms. Warren’s strong backing after the 2008 mortgage crisis. What the ad did not say: Its sponsor wants to rein in the agency in part because of its efforts to restrict arbitration — the widespread practice in corporate America of requiring customers and employees to resolve disputes not in the courts, but in private proceedings with neither judge nor jury. In fact, arbitration is one of the reasons the ad’s sponsor, American Action Network, wanted to blast the agency with the $500,000 campaign, the group said. The consumer agency’s stance on arbitration, while difficult to convey in a TV spot, “is a perfect example of how government is taking away the power of individuals and handing it to the trial lawyers,” said Mike Shields, president of the American Action Network and a former top aide at the Republican National Committee. More:


Ex-New York Senate leader, son face corruption trial

Former New York state Senate Majority Leader Dean Skelos and his son are set to face trial on Monday on charges the politician pressured companies doing business with the state to give his son hundreds of thousands of dollars in jobs and commissions. Jury selection is scheduled to begin in federal court in Manhattan in the corruption case of Skelos, a 67-year-old Republican, and his 33-year-old son, Adam.

The trial is among the highest-profile to spill out of a string of corruption scandals involving members of the state legislature in Albany. More than 30 state lawmakers have either been indicted or forced from office in recent years. Skelos, who for now retains the Long Island Senate seat he has held for three decades, was charged just four months after prosecutors unveiled corruption charges against the former New York State Assembly Speaker, Sheldon Silver. Both cases are being pursued by the office of U.S. Attorney Preet Bharara in Manhattan, who has criticized Albany for being “one of the most corrupt governments in the nation.” Skelos’s trial begins just two weeks after a jury began hearing evidence in the case against Silver, a Democrat who was long one of the state’s most powerful lawmakers. Prosecutors are expected to rest in that case early this week. Prosecutors said from 2010 to 2015, Dean Skelos pressured several companies with business before the state to provide commission sales work or employment to Adam Skelos. Prosecutors said Dean Skelos pressured a real estate developer and an environmental technology company to pay his son nearly $220,000 in exchange for his support on infrastructure and legislation. Adam Skelos also earned title insurance commissions from developers with legislative business and over $100,000 through a no-show job from a medical malpractice insurer that was actively lobbying his father, according to the indictment. Both men have pleaded not guilty. Skelos when he was initially charged said he would “be found not only not guilty, but innocent.” The trial is expected to last four to six weeks.




Gov. Robert Bentley says he’ll refuse relocation of Syrian refugees to Alabama

Gov. Robert Bentley announced tonight he would refuse the relocation of Syrian refugees to the state in the wake of the terrorist attacks in Paris on Friday. “After full consideration of this weekend’s attacks of terror on innocent citizens in Paris, I will oppose any attempt to relocate Syrian refugees to Alabama through the U.S. Refugee Admissions Program,” Bentley said in a news release. “As your governor, I will not stand complicit to a policy that places the citizens of Alabama in harm’s way.” Michigan Gov. Rick Snyder announced Sunday that his state would not accept Syrian refugees until the U.S. Department of Homeland Security fully reviewed its procedures, USA Today reported. A White House official said Sunday that President Obama still planned for the United States to accept 10,000 refugees from Syria over the next year, The Hill reported. U.S. Rep. Mike McCaul of Texas, chairman of the House Homeland Security Committee, told Fox News there are “gaping holes” in the ability to screen refugees to reduce the risk of terrorists entering the country. CNN reported that one of Friday’s suicide bombers at the Paris stadium entered Europe among Syrian refugees last month. Alabama has a refugee processing center in Mobile that is approved by the U.S. State Department. No Syrian refugees have relocated to Alabama, the governor’s office said. Neighboring states have processed a number of refugees, according to the governor’s office. “The acts of terror committed over the weekend are a tragic reminder to the world that evil exists and takes the form of terrorists who seek to destroy the basic freedoms we will always fight to preserve,” Bentley said in a statement.

AL avoids DOJ voter registration lawsuit with signing of memorandum

MONTGOMERY, AL (WSFA) – The State of Alabama has signed a Memorandum of Understanding with the U.S. Department of Justice regarding compliance with the Motor Vehicle provision of the National Voter Registration Act of 1993, says Gov. Robert Bentley. Alabama was notified on Sept. 8 that the DOJ was authorizing a lawsuit for noncompliance with the provision. The MOU, which Gov. Bentley signed Friday, will commit the state to a series of actions that resolve the DOJ’s concerns to bring the state into compliance while also avoiding a suit. [DOCUMENT: Memorandum of Understanding (.pdf)] “Voting rights are important to every citizen, and it is imperative that every Alabamian have the ability to vote,” Gov. Bentley said. “In signing the comprehensive and realistic agreement announced today, we have avoided spending time and money on litigation, allowing state resources to instead be directed to making it easier for Alabama citizens to register to vote. I commend Secretary [Spencer] Collier, [Secretary of State John Merrill] and representatives from the Department of Justice who worked through this issue and created a sensible solution.” The governor said the state recently began efforts to integrate voter registration into its electronic driver’s license system. Alabama Law Enforcement Agency will modify the system, used for in-person license transactions at ALEA offices and those of probate judges, license commissioners, and revenue commissioners, and also modify its new online system to allow Alabamians the ability to renew licenses or get duplicates. Secretary of State Merrill will also adjust the statewide electronic voter registration system to able to electronically receive voter registration date from ALEA. Until the electronic solution is complete, which is expected by Summer 2016, the state is putting a short term, paper-based system in place. Under the MOU, the state has will also adopt a change of address form for driver’s license purposes, and has agreed to certain requirements concerning training, reporting, public education, and consulting with the DOJ.


Is Gov. Bentley nudging closer to supporting a lottery to support Medicaid expansion?

 Last month in this space the question was asked:  Is Gov. Robert Bentley nudging closer to an attempt to expand Medicaid under Barack Obama’s signature accomplishment as president: the Affordable Care Act (ACA), commonly called Obamacare? Thursday the governor gave the most direct answer to date to that question. “We are looking at that (Medicaid expansion). We have not made a final decision on that yet, exactly on how that will work,” said Bentley in response to a question from an audience of lawyers.
The question now:   Is Bentley nudging closer to supporting a state lottery to provide the critical state dollars that will be needed to expand Medicaid under the ACA? Thursday Bentley said a major stumbling block to expanding Medicaid is financial. Bentley said if he decided to try to expand the program, which provides health care for about one million mostly poor Alabamians and children, the state would have to come up with $710 million in matching money to qualify for the roughly $7 billion the state could initially receive. The governor acknowledged that there is currently no revenue source in the state close to being able to provide the matching money. But Bentley did seem to offer one possible source, a state lottery whose proceeds he said he would want to see go entirely to the state’s General Fund Budget, where Medicaid dollars are allocated. In responding to a question from his audience about funding government, the governor said he expects a lottery to be proposed in the Legislature next winter and said that “might” be something in his long-term plans. In a public appearance Friday the governor was asked a follow-up question about his lottery comment on Thursday. Asked if he was mulling over supporting a lottery, Bentley said:  “I think there has to be a long-term stream of money for the General Fund. I’m going to leave that up to the Legislature …Whether a lottery is the solution, I don’t know. But the Legislature has to look at all revenue streams.” Asked if he would support a lottery bill if he saw one that was the right one Bentley said:  “I’ll have to look at it and see. I just want to make sure that if the people are given the opportunity to vote on this that no one makes money on it other than the state. And that it’s a clean lottery bill. And that way, I would be willing to talk about it positively. If not, I would have to go the other way.”
By a “clean bill” Bentley means one that only calls for the creation of a lottery, not a bill that would also call for the creation of Las Vegas-style gambling in casinos. State Senate leader Del Marsh is expected to come with legislation in the next legislative session to do just that. Bentley has been critical of full blown gambling. Historically Bentley has not been a supporter of any type of gambling including a lottery. In 1999 he said he voted against a lottery proposed by then Gov. Don Siegelman that would have funded education needs. But Bentley since 2010 has also consistently said he would not block a public vote on a lottery if the Legislature approved a constitutional amendment allowing one. Such a change would have to be approved by voters. More:


Four candidates challenge Gov. Bentley’s appointee to education post

 Gov. Robert Bentley’s appointee to the State Board of Education campaigned against public school tax increases and was criticized in the national media for his conservative views. Now his appointee, Matthew Brown, is set to run in an election against four other candidates in the March 1 Republican primary

These candidates for the District 1 board seat are Adam Bourne, the Mobile County Republican Executive Committee Treasurer; Carl Myrick, the son of Baldwin County School Board Member Tony Myrick; former Daphne Mayor Harry Brown; and Jackie Zeigler, the wife of Alabama State Auditor Jim Zeigler. Former Prichard Mayor Ron Davis is running unopposed for the Democratic nomination for the seat. Here’s a brief breakdown of the four candidates.


Macon County Voters Ignored in VictoryLand Case

MONTGOMERY— The history of Constitutional Amendment 744 paints a compelling picture of what those, who worked for and against its passage, thought it would mean for the future of gambling in Macon County. Advertisements and statements on both sides made it clear that electronic bingo was at issue.

With the signing of Executive Order 13, Governor Robert Bentley signaled his desire to put an end to the bingo wars begun by Gov. Bob Riley, and continued under the Office of Attorney General Luther Strange. The clear winners of Riley’s bingo war are the Poarch Band of Creek Indians (PCI), whose gaming operation have grown exponentially as a result of his actions and those of Strange.

The battle over bingo has primarily centered on VictoryLand, owned by Milton McGregor. At the heart of the matter is Constitutional Amendment 744, which was passed, in part, as an effort to allow electronic bingo in Macon County to compete with growing economic threat from tribal gaming facilities, which were first to adopted electronic bingo machines in the State. The day after signing Executive Order 13, Bentley raised the Constitutional Amendments issue on bingo saying, “We have constitutional amendments in two counties —we have more than that but right now we are talking primarily about two counties and I believe constitutionally you should look at what the Constitution actually amendment 744 which, leaders from that community attest, allows electronic bingo or bingo in any form. Only two counties Greene and Macon have passed constitutional amendments allowing bingo since electronic machines have been available. These counties have held that the people voted to allow electronic bingo or bingo in any form, something that Riley and in recent years Strange’s office have denied. But Gov. Bentley, a day after signing Executive Order 13, signaled that he draws a different conclusion from Riley and Bentley. However, Bentley has been telegraphing his thoughts publicly and privately that Macon County’s VictoryLand should be free to operate unmolested, because they have a constitutional right to do so.




Does Birmingham really need Uber?

By: Johnathan F. Austin, Birmingham City Council President, Chair of the Committee of the Whole, Administration and Education Committees and a member of the Economic Development and Budget and Finance Committees

Birmingham is experiencing the most exciting resurgence of, I would say, any southern city in America. We’ve recently been named the number one city in America for millennial entrepreneurs, one of the best food cities in America, we’re the first city in North America to introduce the Zyp bike share program, and we will host the 2021 World Games. The City Council has made a commitment to revitalize our neighborhoods, and as a result, our city is truly on the move. We have the unique opportunity of combining lessons learned from our predecessors with technological innovations. As the technological landscape continues to evolve, so must our city ordinances. This Council has vowed to Frame our Future, contributing to the enrichment and continual growth, and casting new vision for our community. It’s imperative now that we tackle one of our longstanding unresolved issues – transportation. Enter ridesharing. Uber recently published an article demonstrating how many potential users they have in the Birmingham Metropolitan Area. It’s clear our citizens want Uber. However, the media is portraying that Uber and other Transportation Network Companies (TNCs) find City leaders’ proposals “unworkable and not serious.” But let me be clear – This Council wants Uber. All Council members present at the September Committee of the Whole voted in favor of Uber. As your City Council President, as your neighbor, as a citizen who cares about the progress our community, I want Uber. Above our want for Uber and similar transportation network companies, however, we require safety. The issue is not if we want Uber here. The question is how do we bring ridesharing services to Birmingham but ensure they operate as safely as possible to provide the greatest good for all passengers, drivers, and other vehicles? More:


Morning Money

STOCKS DIP FOLLOWING PARIS ATTACKS – Bloomberg: “Stocks fell around the world and the euro slipped as investors responded to Europe’s worst terror attack in a decade by trimming positions in riskier assets. Demand for havens boosted gold and government bonds. … The Stoxx Europe 600 Index dropped to a three-week low and Europe’s common currency weakened 0.2 percent as the violence in Paris on Friday sparked concern that geopolitical tensions will hurt trade and consumer confidence.

“Chinese shares in Hong Kong led losses in Asian equity markets after authorities restricted the use of borrowed money to buy shares, while U.S. index futures slipped. Gold advanced the most in a month and Treasuries climbed for a fifth day. Oil halted two weeks of losses as France dispatched warplanes to bomb Islamic State’s stronghold in Syria”

THE BRUSSELS CONNECTION – POLITICO Europe’s Hans Von Der Burchard and Laurens Cerulus: “‘We don’t have a grip on the situation in Molenbeek.’ A confession — a mea culpa almost — summed up the Belgian government’s reaction to the links discovered between the terrorist strikes in Paris and this working class, immigrant neighborhood of Brussels. Speaking to public broadcaster VRT Sunday, Interior Minister Jan Jambon said that the authorities had lost control over this area of the EU capital, which culprits in several recent terrorist attacks in Europe, including Friday’s carnage in Paris, have called home.

“As the people of Paris united in grief and anxiety, the focus of the investigation into the coordinated shootouts and bombings at several locations in the French capital shifted northward over the weekend to Brussels. Officials said the Paris plot increasingly looked like it was hatched in the Belgian capital.”

LIVE BLOG — Follow the latest news on the Paris attacks here:

FRANCE STRIKES ISIS – Reuters: “French warplanes pounded Islamic State positions in Syria on Sunday as police in Europe widened their investigations into coordinated attacks in Paris that killed more than 130 people. … Islamic State has claimed responsibility for Friday’s suicide bombings and shootings, which have re-ignited a row over Europe’s refugee crisis and drawn calls to block a huge influx of Muslim asylum-seekers.

“French police have launched an international hunt for a Belgian-born man they believe helped organize the assaults with two of his brothers. One of the brothers died in the attacks, while the second is under arrest in Belgium, a judicial source said. A further two French suicide attackers have been identified, police said, while the identity of four other assailants, who were all killed, was still under review. … French jets on Sunday launched their biggest raids in Syria to date, hitting its stronghold in Raqqa. … The Paris attacks were seen causing a short-term sell-off in global stock markets … but few strategists expected a prolonged economic impact or change in prevailing market directions.”

FRENCH AUTHORITIES STAGE RAIDS – WSJ’s Inti Landauro: “French police on Monday searched the homes of suspected radical Islamists across France, hours after airstrikes on Islamic State targets in Syria … Authorities carried out raids in several cities across France amid fears that attackers may strike again in the country or elsewhere in Europe, Prime Minister Manuel Valls said. … Mr. Valls said the country was now at war with terrorism and that the Paris attacks were ‘conceived, organized and planned’ in Syria.”

HILLARY’S WALL STREET GAFFE – POLITICO’s Gabriel Debenedetti: “The widespread expectation was that Saturday evening’s Democratic debate would revolve around the Paris attacks. But it turned out Wall Street policy ended up driving the most striking moments … [A]nd it was Hillary Clinton’s relationship with the financial community she once represented that provided perhaps the most memorable, and questionable, moment of the evening, when she invoked the terrorist attacks of September 11.

“‘I represented New York, and I represented New York on 9/11 when we were attacked,’ Clinton said, explaining her support from finance-world contributors. ‘Where were we attacked? We were attacked in downtown Manhattan, where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy and it was a way to rebuke the terrorists who had attacked our country.’”

WHY IT WAS SO WRONG – Per a veteran of the 1996 and 2000 Democratic presidential campaigns: “What big banks other than Goldman were downtown on 9/11? Citi is at 53rd & Park. JP Morgan Chase is at 47th & Park. Bear Sterns was across 47th from JPM. Morgan Stanley is at 47th & Broadway, Lehman was basically three blocks away (at 49th & Seventh).

“Wells Fargo is in San Francisco, Wachovia was in Charlotte. The exchanges themselves were hard hit after 9/11, as well as a bunch of law firms and other support professionals. Most banks had a presence downtown, but the industry started to move to midtown 35 years earlier. Her geography in this case is about as accurate as in a West Wing episode.”

THE ECONOMIC IMPACT OF PARIS – Mohamed A. El-Erian in the FT: “Loving Paris as as I do, having lived and gone to school in the city, it is hard to focus strictly on the economic and financial implications of Friday’s tragedy. Yet for the French capital’s impressive resilience to prevail, and for society to be able to overcome this terrorist horror, we need as quickly as possible to reach an understanding of the implications and the possible responses.

“As with any unanticipated atrocity, particularly on this scale, Friday’s attacks will damp economic activity for a while. Parisians will consume less, particularly when it comes to leisure activities in the city. There will also be fewer visitors, especially from outside Europe. This, along with the security and border checks that will persist for a while, will lower France’s growth in gross domestic product and place downward pressure on inflation. France’s EU neighbours will also feel the negative effects”

ATTACKS UPEND 2016 RACE – POLITICO’s Shane Goldmacher: “It took just 48 hours, but the tragic terror attacks on Paris have quickly cleaved the 2016 Republican primary into a contest between those with serious foreign policy experience and those without, shifting the race, at least for now, from a campaign for the presidency to a test for commander in chief. … The disparity between candidates has been present and glaring for months, of course, but it took a backseat in a primary where experience has been akin to a dirty word, and early state voters haven’t demanded great familiarity with world affairs.

“The question for 2016 now turns on whether foreign policy fluency and the seasoning of elected office somehow morphs into an asset, a development which could dislodge the two outsiders who are currently perched comfortably atop the polls – Donald Trump and Ben Carson – and reorder the race. …

“Jeb Bush, the former Florida governor, called for a declaration of war against the Islamic State. Sen. Marco Rubio said America was engaged in a ‘clash of civilizations.’ But Carson struggled to articulate how exactly his foreign-policy vision would translate in the real world … Trump, who before the attack had said his ISIS policy would be to ‘bomb the s — t out of them,’ was unusually absent, not just from the Sunday interview circuit but the discussion”

GOOD MONDAY MORNING – Brutal weekend for Paris and for us all. We have no wise words to offer other than love your families and your neighbors and your friends more than you ever have before. Life is so precious and so fragile. Email me on and follow me on Twitter @morningmoneyben

DRIVING THE WEEK – Global markets today will continue to react to the events in Paris but large sustained falls seem unlikely … President Obama is at the G20 meeting in Turkey and will attend a meeting on “enhancing resilience through financial regulation, international tax, anti-corruption and IMF reform” before multiple bilateral meetings and a press conference … Treasury Secretary Jack Lew is also in Turkey for the G20 … The American Bankers Association and the American Bar Association conference hold the 27th annual Money Laundering Enforcement Conference through Tuesday 17 … House Financial Services has a hearing Wednesday at 10:00 a.m. on the SEC … Consumer Prices at 8:30 a.m. Tuesday expected to rise 0.2 percent headline and core … Industrial Production at 8:30 a.m. Tuesday expected to rise 0.1 percent … FOMC Minutes out at 2:00 p.m. Wednesday … Index of Leading Indicators at 10:00 a.m. Thursday expected to rise 0.5 percent …

CLINTON: NOT SO TOUGH ON WALL STREET – Jeff Gerth in POLITICO Magazine: “Under attack during Saturday night’s Democratic debate over her historical reliance on campaign contributions from Wall Street, Hillary Clinton said she isn’t influenced by such donations and would be at least as tough on the industry as her opponents … Yet an examination of Clinton’s remarks to Wall Street in December 2007 and her actions as a New York senator — a period when she had the best opportunity to translate her words into deeds — presents a more mixed picture of her record on the financial industry.

“The bills Clinton introduced on banking and housing finance got no traction. When she had a chance to support a 2007 bill that aimed to curb a tax break she publicly decried for hedge-fund and private-equity executives, she failed to sign on. Clinton also has some history with the shadow-banking world she says is a continuing risk to the financial system. While in the Senate, she made a little-noticed overture to Treasury Secretary Henry Paulson, who was involved in talks to rescue giant insurer AIG with government funds. She was calling on behalf of wealthy investors who stood to lose millions and had hired two longtime Clinton associates to represent them”

PARIS COULD CAUSE BROAD SHIFT – WSJ’s Stephen Fidler and Julian E. Barnes: “Thirty minutes of terror on the streets of Paris looks to become the catalyst for a broad shift in international politics with implications that could last for years. Much of the focus in the West over the past year has been on a perceived growing threat from Russia. Terrorism was a real, but containable problem. Moscow’s new aggressive military posture in Ukraine and beyond, on the other hand, posed a more serious threat.

“But with a series of well-coordinated strikes, Islamic State put the threat of terrorism back at the center of the international agenda. And Russia, far from a nuclear-armed enemy, instantly presented itself as a partner — one with a plan for immediately tamping down the threat. Moscow’s strategy — to back the regime of Syrian President Bashar al-Assad, at least temporarily, as the best way of tackling Islamic State — has been unpalatable to the U.S. and, up to now, France, which has been one of Mr. Assad’s fiercest international critics. That position could well be changing.”

JAPAN RETURNS TO RECESSION – FT’s Robin Harding in Tokyo: “Japan is back in recession after its economy shrank at a worse-than-expected annualised rate of 0.8 percent in the third quarter. The figure, which came in well below expectations of a 0.3 percent fall, is a fresh blow to Prime Minister Shinzo Abe’s efforts to end deflation and revitalise economic growth. .. Although there is little sign of the economy falling into a downward spiral, sluggish demand makes it harder to persuade companies to raise wages and investment next year. The Bank of Japan regards wage rises as essential for progress towards its goal of 2 percent inflation. …

“However, the breakdown of gross domestic product suggests there is still some momentum in the economy. Almost all of the decline was due to businesses running down inventory, which knocked 2.1 percentage points off annualised growth. By their nature, inventories can only fall so far. Meanwhile consumption contributed an annualised 1.2 percentage points to growth and net exports an annualised gain of 0.4 percentage point.”

POTUS Events

President Obama today is in Atalya, Turkey attending the G20 summit. He will also meet with Prime Minister David Cameron of the United Kingdom, Chancellor Angela Merkel of Germany, Prime Minister Matteo Renzi of Italy and Foreign Minister Laurent Fabius of France and hold a press conference

All times Eastern
Live stream of Obama press conference at 9:30 am ET

Floor Action

Congress has until Friday to renew funding for transportation projects ahead of its Thanksgiving recess next week.

House and Senate negotiators have been hammering out the differences between each chamber’s respective long-term highway funding bills.

Lawmakers expect to unveil a final version this week to meet the Nov. 20 deadline set by the most recent short-term extension. If all goes as planned, it’ll mark the first long-term highway bill sent to a president’s desk in years.

The House earlier this month passed its version, which lasts for six years but contains only three years’ worth of guaranteed road and transit funding. Senators, meanwhile, similarly passed a six-year bill with only three years’ worth of pay-fors.

Conference negotiations between the two chambers are expected to be short. Congress doesn’t have much time left: Lawmakers plan to depart Washington for the holiday by Thursday afternoon.

In case the long-term bill doesn’t pass in time, the House might vote on a short-term highway funding extension early in the week to avoid missing the deadline.

Sanctuary cities

Senate Majority Leader Mitch McConnell (R-Ky.) could tee up a vote on legislation to increase penalties for undocumented immigrants who reenter the country after being deported.

Senate Democratic aides told The Hill that the Republican leader has informed Democrats that he could set up a vote on “Kate’s Law,” though McConnell’s office said that nothing has been scheduled.

The proposal is named after Kathryn Steinle, who was shot and killed in San Francisco allegedly by an illegal immigrant who had already been deported five times.

McConnell fast-tracked legislation last month from Sen. Ted Cruz (R-Texas), who is running for president, which allowed it to be placed on the Senate calendar where it could be brought up for a vote.

The legislation, which is backed by Sen. Marco Rubio (R-Fla.), would create a mandatory minimum sentence of five years for any undocumented immigrant who reenters the country after they were previously convicted of an aggravated felony or of illegally reentering the country twice.

Cruz tried to get unanimous consent to pass his legislation earlier this month but was blocked by Senate Minority Leader Harry Reid (D-Nev.).


The Senate could take up legislation that would repeal parts of ObamaCare before leaving town for a scheduled week-long Thanksgiving break.

While Sen. John Cornyn (R-Texas) has said leadership could bring up the legislation the week before Thanksgiving, it’s looking increasingly likely to get pushed into December. McConnell’s office added, separately, that the legislation hasn’t been scheduled.

Republicans are using the reconciliation process—which blocks a likely Democratic filibuster by only requiring the legislation to overcome a simple majority vote—to send the repeal bill to the president’s desk by the end of the year.

But the move, including a push to tie defunding Planned Parenthood to the package, is dividing Senate Republicans.

Sens. Cruz, Rubio and Mike Lee (R-Utah) are pledging to vote against any legislation that stops short of a full repeal of the Affordable Care Act.

If the three senators don’t back the measure, McConnell would need every other Republican lawmaker to vote for it in order to get the legislation through the upper chamber.

But moderate Republican Sen. Susan Collins (R-Maine) and Republican Sens. Mark Kirk (Ill.) and Lisa Murkowski (Alaska), who are both up for reelection next year, have balked at tying in Planned Parenthood.

Separately, some Republicans are voicing concerns about including a repeal of the Medicaid expansion. Thirty states, including some with Republican governors, agreed to expand the program under the Affordable Care Act, which extended healthcare to millions of people.

Auditing the Fed

The House is slated to consider multiple financial services measures this week, including a bill to overhaul the Federal Reserve.

Rep. Bill Huizenga’s (R-Mich.) legislation would, among other things, require an audit of the Federal Reserve and clarify the “blackout period” regarding when agency employees can speak publicly about policies.

Auditing the Federal Reserve was a pet issue championed by former Rep. Ron Paul (R-Texas), whose son, Sen. Rand Paul (R-Ky.), has since taken it on in the name of increasing transparency.

But some lawmakers, particularly Democrats, warn that auditing the Federal Reserve would politicize the agency’s monetary policy decisions.

Another measure on tap would suspend the current compensation packages for the chief executive officers of Fannie Mae and Freddie Mac. The bill is expected to be considered under a fast-track process requiring a two-thirds majority, which indicates it’s expected to pass overwhelmingly.

Krebs Daily Briefing 13 November 2015


Fate of ‘Jihadi John’ unclear after U.S. drone strike in Syria

A U.S. drone strike in Syria late Thursday targeted the infamous masked Islamic State executioner named “Jihadi John,” the Pentagon said. But it’s unclear if he was killed in the strike. He is known for his brutal beheading of several Western hostages in Syria. The U.S. military said early Friday it was still working to determine whether the strike killed the militant, a British citizen whose real name is Mohamed Emwazi. And British Prime Minister David Cameron said in a statement that the strike was the “right thing to do.” He also confirmed that “we cannot yet be certain that the strike against Jihadi John was successful.” Cameron described the strike as an “act of self-defense” and made a point of thanking the U.S. military for its attempt to “strike at the heart of (the Islamic State),” also known as ISIL or ISIS. Officially, the Pentagon would only confirm that the strike had Emwazi in its sights. “U.S. forces conducted an airstrike . . . targeting Mohamed Emwazi, also known as “Jihadi John,” Pentagon Press Secretary Peter Cook said on Thursday. “We are assessing the results of tonight’s operation and will provide additional information as and where appropriate,” Cook said. Emwazi is believed by the U.S. to have participated in the videos showing the murders of U.S. journalists Steven Sotloff and James Foley, U.S. aid worker Abdul-Rahman Kassig, British aid workers David Haines and Alan Henning, Japanese journalist Kenji Goto, and a number of other hostages. Emwazi, 26, graduated from the University of Westminster in London with a degree in computer programming in 2009. Born in Kuwait and raised in London, he left the British capital and became a star salesman for a Kuwaiti IT company, the Guardiannewspaper reported earlier this year.

IS video threatens attacks in Russia

Islamic State has released a video threatening attacks in Russia “very soon” in revenge for Russian bombing in Syria, the SITE monitoring group said on Thursday, and the Kremlin said Russian state security services would study the material. Al-Hayat Media Center, the militant group’s foreign language media division, released a video in Russian with chants of “Soon, very soon, the blood will spill like an ocean”, SITE reported. Islamic State has previously called for attacks on Russia and the United States in revenge for strikes by their warplanes on its fighters in Syria. Western intelligence officials suspect the ultra-hardline Sunni group of planting a bomb in a Russian passenger plane which crashed in Egypt’s Sinai Peninsula on Oct. 31, killing all 224 passengers and crew. Islamic State militants fighting Egyptian security forces in Sinai said they brought down the plane which was taking Russian tourists back home from the Egyptian tourist resort of Sharm al-Sheikh. Russia’s security agencies will undoubtedly look into a video, Kremlin spokesman Dmitry Peskov said on Thursday. “I do not know the authenticity of this video, I do not know the authenticity of these sources, but in any case no doubt this will be material for review by our special (security) services,” Peskov told journalists on a conference call.

Twin Explosions in Beirut

Dozens of people are dead and more than 100 wounded after two explosions in the Shiite neighborhood of Burj al-Barajneh. The Daily Star newspaper and the state-run National News Agency reported that 37 people were killed and 180 wounded. Al-Arabiya put it at 40. The neighborhood is a stronghold of Hezbollah, the Shiite militant group, and Al-Arabiya reported the blasts occurred near a hospital run by the group. The Daily Star said the explosions were set off by suicide bombers. Lebanon is no stranger to conflict. Its 15-year-long civil war ended in 1990, but the tiny country has often found itself overwhelmed by its larger neighbors, Syria and Israel, as well as by Hezbollah’s powerful military presence within the country. Adding to the complication, Hezbollah fighters are now in Syria fighting the predominantly Sunni Islamic State on behalf of Syrian President Bashar al-Assad. The Lebanese government has declared Friday to be a day of mourning.

The Real Estate Manager Who’s Making the Queen Richer

Fifteen years ago, London’s Regent Street was known for Liberty, the high-end department store with its mock Tudor facade, and Hamleys, the 255-year-old toymaker. Otherwise, it was a West End backwater filled with airline offices, carpet shops, and stores selling royal kitsch aimed at tourists. Today, it’s a global shopping mecca. Apple, J.Crew, Hugo Boss, Michael Kors, and Brooks Brothers, among others, have opened flagship megastores on Regent Street, turning it into a giant outdoor mall in the heart of London. This didn’t happen by accident. Almost all of Regent Street, along with huge swaths of central London, is owned by the Crown Estate, which manages a property portfolio worth £11 billion ($17 billion) on behalf of the British monarchy and Her Majesty’s Treasury. Once a sleepy rent collector, the Crown Estate has morphed into a nimble corporate property investor that has helped keep London in the forefront of great world cities. Like London itself, the Crown Estate is booming. It posted a record £285 million return to Treasury coffers in the year ended on March 31, up almost 7 percent over the previous year. That’s been good news for Queen Elizabeth II, who gets 15 percent of the estate’s annual profit in the form of a Sovereign Grant to fund the royal family’s living expenses. While the rest of Britain endures lingering austerity alongside modest growth, the queen’s annual income is set to rise to £42.7 million in fiscal year 2017, up from £31 million in fiscal year 2013. “It’s the original sovereign wealth fund, investing on behalf of the crown,” says Tom Appleby, a senior lecturer at the University of the West of England. “They’ve acquired a lot and done joint ventures, which makes them more a sovereign wealth fund than a passive land manager.”



House Republican Hard-Liners Drafting ‘Contract With America II’

 U.S. House Republican hard-liners who helped force out former Speaker John Boehner are readying their next act: a multi-point manifesto demanding quick action on long-time conservative priorities.

Members of the House Freedom Caucus are preparing a “Contract With America II” that would call for House votes in the first 100 days of 2016 on replacing Obamacare, overhauling entitlement programs such as Social Security and Medicare, and repealing the estate tax. An early draft of the plan obtained by Bloomberg News also calls for legislation to slash government regulations by 20 percent, cut corporate tax rates and expand offshore oil drilling. Efforts are still under way to finalize contents of the “contract,” which lawmakers say they hope will become the basis of House Republicans’ 2016 agenda.

The plan is tentatively named after the “Contract With America” that Newt Gingrich and other Republicans used to describe their pledges in the 1994 elec­tion campaign that swept the party into the House majority.

Two decades later, members of the Freedom Caucus have been waging war on a Republican establishment they say has gone astray. They’ve already toppled Boehner of Ohio as speaker and helped quash House Majority Leader Kevin McCarthy’s bid to take over the job. More:


Blackstone to buy about $3 billion in property fund stakes from Calpers

Blackstone Group LP, the world’s largest alternative asset manager, has agreed to buy about $3 billion worth of stakes in real estate funds from Californian public pension fund Calpers, a boost to its so-called secondaries business. The deal, the largest of its kind, would allow the California Public Employees’ Retirement System to sell 43 of its international and domestic funds to Blackstone, the two said in separate statements on Thursday. Blackstone is buying the fund stakes through its Strategic Partners division, which has raised more than $19 billion to acquire stakes in private equity and real estate funds from investors who want to cash out. These funds typically have 10-year lock-up periods, meaning the only option for investors looking to get out of them is to sell them to someone else.


Powerful House panel likely to dump committee chairs

House Republicans are moving toward booting committee chairmen from a powerful panel that makes committee assignments, in what would be Speaker Paul Ryan’s biggest restructuring of internal GOP policy so far in his tenure, according to multiple sources involved in the talks. Shortly after winning the speakership, the Wisconsin Republican promised he would rework the House Republican Steering Committee before Thanksgiving, and he impaneled eight lawmakers to hash out changes. This week, the lawmakers have discussed a two-part overhaul to the committee that would drastically change its membership. During the current Congress, top committee chairmen would be removed from the panel and replaced with members elected by the House Republican Conference, according to multiple sources involved in and familiar with the talks. In the next Congress, the GOP would add additional regional representatives to the committee so it better reflects the makeup of the Republican Conference.


Vincent Asaro, Accused in Lufthansa Heist, Is Found Not Guilty

Vincent Asaro, who was charged with helping plan the 1978 Lufthansa robbery at Kennedy International Airport along with other acts of racketeering and extortion that spanned much of his 80 years, was acquitted on all counts on Thursday. The jury in Federal District Court in Brooklyn began deliberations late on Monday and continued through the week with a break on Wednesday for Veterans Day. During a three-week trial, prosecutors argued that Mr. Asaro, a third-generation Mafia member, had committed murder and robbery and performed shakedowns and other crimes on behalf of his Mafia family, the Bonnanos. The most famous one, depicted in the movie “Goodfellas,” was the robbery at the Lufthansa airline terminal at Kennedy Airport. It was then said to be the largest cash robbery in United States history. Mr. Asaro helped plan it, they said, and his accomplices stole $5 million in cash and $1 million in jewels from a cargo vault. But the jury rejected the prosecution’s case, dealing a stunning blow to the United States attorney’s office for the Eastern District of New York. An informer named Gaspare Valenti — Mr. Asaro’s cousin — had approached the Federal Bureau of Investigation in 2008, and had helped prosecutors link the Lufthansa crime, and many others, to Mr. Asaro. Mr. Asaro had also killed a man in 1969 whom he suspected of being an informer, prosecutors charged. The man, Paul Katz, owned a Queens warehouse where Mr. Asaro and James Burke, a Mafia associate known as Jimmy the Gent, would unload their goods. After Mr. Asaro and Mr. Burke were arrested at the warehouse, they began to suspect Mr. Katz of working with the police, Mr. Valenti testified. More:

Koch Brother: I Won’t Back a Candidate Until They Stop Being So Bad

At this point, America is anxiously waiting for February, when the primaries will start forcefully shaking candidates, many of them alive solely due to the generosity of super-PACs, out of the presidential field. For many, an injection of cash from the Koch brothers would be a welcome lifeline. One of them, however, doesn’t even want to commit—yet. In an interview with USA TodayCharles Koch, one half of the billionaire brothers known for heavily funding several conservative candidates and causes, was straightforward: “I have no plans to support anybody in the primary now.” Koch and his brother David had initially planned to take their $250 million fund-raising apparatus, which already funds several congressional candidates, think tanks, and ballot-initiative efforts, and pour it into the Republican presidential primary for the first time. Back in April, Koch publicly discussed supporting several candidates such asScott WalkerJeb! BushMarco RubioTed Cruz, and Rand Paul. But none of those candidates are doing well in the polls—Walker isn’t even in the race anymore—and Koch, with too many candidates to choose from, has fewer damns to give, much less money:  Asked what he wants to hear from Republican contenders vying for his support, Koch said, “It’s not only what they say. “If they start saying things we think are beneficial overall and will change the trajectory of the country, then that would be good, but we have to believe also they’ll follow through on it, and by and large, candidates don’t do that.” He refused to discuss possible Republican sugar babies: “When we do, it’s totally blown out of proportion”—though it’s more likely that simply saying “Koch-endorsed candidate” tends to elicit virulently hateful reactions. None of this means the Koch brothers are tempering their ambitions to shape America’s politics: a new report in Politico highlights the depths they’ve gone to influence the Senate, where Ken Vogel writes that the brothers’ network all but “created” Joni Ernst, a senator from Iowa.

Immigration brawl breaks out between Cruz and Rubio

The immigration squabble among the Republican presidential contenders has turned into an all-out brawl between Ted Cruz and Marco Rubio, with the two senators challenging each other’s conservative credentials on the hot-button issue. While they were by no means the only GOP candidates throwing around immigration accusations on Thursday, the intensity was the highest between Cruz and Rubio, seen as two of the strongest ascending members of the Republican field, especially after Tuesday’s fourth debate. “They fought tooth and nail to try and jam this amnesty down the American people’s throats,” Cruz said in an interview with conservative radio host Laura Ingraham on Thursday, speaking about the “Gang of Eight” senators. Rubio’s membership in the group, which unsuccessfully shepherded a comprehensive immigration reform effort in 2013, has haunted him since. “Talk is cheap,” Cruz continued, saying Rubio’s actions disprove any claim that he’s as conservative as Cruz on the topic. Cruz later added that the Florida senator opposed a set of amendments introduced by Sen. Jeff Sessions (R-Ala.) and himself. “He opposed every single one of them, every single amendment,” Cruz said. “The ‘Gang of Eight’ voted as a gang against enforcing and securing the border.”  Rubio, in roughly the same bracket of hours Thursday morning, took a few shots at Cruz while campaigning in South Carolina, hitting the Texas senator from the right. More:

Governments Requests Rise for Facebook User Data, Blocking

Governments around the globe are asking Facebook Inc.FB -0.93% to ban more posts and to hand over more user data, according to the social network’s latest report on government requests. During the first six months of 2015, 92 countries asked the company to restrict 20,568 pieces of content on Facebook, Messenger, WhatsApp and Instagram that they believed violated their laws. That was more than double the 8,774 requests Facebook received during the first half of 2014 from 83 countries. Requests for user account data also rose 18% to 41,214 in the same time frame. On average, Facebook provided some data for about 42.4% of the requests. The U.S. made 17,577 requests about 26,579 user accounts in the first half of 2015, according to Facebook. About 80% of U.S. requests resulted in Facebook providing at least some data. Facebook started providing information on government requests about two years ago amid scrutiny over how much user  information tech companies were providing to U.S. authorities. Apple Inc.AAPL -0.34%, Microsoft Corp.MSFT -0.62% and others share similar reports. Apple reported a 9% rise in the number of device requests it received from law enforcement officials during the first half of the year. In a blog post Wednesday, Facebook reiterated that it does not give direct access to people’s data and pushes back if the request is too broad. Government officials can flag Facebook content that they believe violates local laws. If Facebook agrees, it will make that post unavailable within that country. For example, posts denying the Holocaust are blocked in Germany, where Holocaust denial is illegal.

Glass-Steagall takes center stage in 2016

A Depression-Era banking law is helping to shape the 2016 presidential field, as Wall Street critics push hard for its return. The Glass-Steagall Act, the 1933 law that established a firewall between investment and commercial banking, was repealed 16 years ago on Thursday. Where candidates stand on its possible return has become a litmus test in both parties, with supporters arguing Congress needs to restore it to prevent the next financial collapse. The debate is leaving the 2016 field, and particularly Hillary Clinton, in a tough spot. “A lot of people view it as a litmus test,” said Dennis Kelleher, president and CEO of the Wall Street reform group Better Markets. For those who are in favor of restoring the law, a candidate’s backing Glass-Steagall says “‘I get it, I get it. I will be tough on Wall Street. Trust me,’” Kelleher said. Calls from the left and right for a return to Glass-Steagall have popped up all over the campaign trail, particularly from feisty populist underdogs. The calls are more popular on the Democratic side, where both Sen. Bernie Sanders (I-Vt.) and former Maryland Gov. Martin O’Malley have echoed Sen. Elizabeth Warren (D-Mass.) in supporting restoration of the law. In the Republican field, former Arkansas Gov. Mike Huckabee is the only active candidate who backs putting Glass-Steagall back in place, though former Texas Gov. Rick Perry proposed a new banking firewall as part of his Wall Street overhaul before he dropped out of the race. Democratic frontrunner Hillary Clinton and many of her potential GOP rivals are trying to find space in the center to tap into public unrest over Wall Street without turning off Wall Street’s deep fundraising wells. An October Washington Post/ABC News poll found that most members of both parties favor tougher rules for the financial sector, with 67 percent of overall Americans in favor of a further crackdown.

Democrats may clash with Warren on financial rules

Elizabeth Warren is warning Democrats not to use an upcoming spending bill to soften the banking regulations that were part of the landmark Dodd-Frank law passed after the 2008 financial crisis. But a group of moderate Democrats is quietly negotiating with Republicans who want to do just that, risking the wrath of Warren and a fired up liberal base that wields considerable power over the party. The group — including Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, and Jon Tester of Montana — has been talking with Senate Banking Chairman Richard Shelby of Alabama, who is trying to include the regulatory overhaul in a fiscal 2016 appropriations bill. The idea is anathema to Warren of Massachusetts and others in the party’s progressive wing — not to mention the White House. Warren almost shut down the government last year when a controversial Wall Street rule was gutted in a spending bill, and she’s vowed she won’t lose again. While Warren’s fiery rhetoric has earned her a nationwide liberal following, the talks raise questions about just how much sway she has over her colleagues. It’s unclear how any deal would move forward at this point without riding on a must-pass bill.

Everything you need to know about Saturday’s Democratic debate

When is the next Democratic presidential debate? The second Democratic presidential debate will be Saturday, Nov. 14, live from Drake University in Des Moines, Iowa. The school has been a staple for primary debates: It has hosted nationally televised debates every presidential cycle since 2007. Sheslow Auditorium, where the debate will occur, listed on the National Register of Historic Places. It holds just 775 seats and has striking stained glass windows. If you’re eager to look like an insider, refer to the campus neighborhood as “Dogtown.” What time and how long is the debate? The debate will last two hours and begin at 9 p.m. Eastern time. It should look markedly different than the last Democratic debate: With just three candidates, each participant should be able to speak for a length of time equivalent to a stump speech. CBS News says there will be no opening statements. Candidates will have 60 seconds to respond, 30 seconds for rebuttals and follow-ups, and 60 seconds for closing statements. How can I watch the debate? The debate will air on CBS and stream for free at No cable subscription is necessary. CBS will also air the debate on its radio affiliates, meaning anyone with network TV, radio or Internet access can take it in. Those already tuned in to the live broadcast of the Midwest favorite Prairie Home Companion can simply switch the radio dial to listen.


Here’s what happens when you buy a $170.4 million painting with a credit card

 In just a few minutes, one art collector may have earned more credit card rewards than most people will in a lifetime. Billionaire art collector Liu Yiqian paid $170.4 million (one of the highest prices ever paid at an auction) for Amedeo Modigliani’s “Nu Couche” on Monday. Last year, the same collector purchased a $36.3 million porcelain cup, reportedly with his American Express AXP, -1.28%   Centurion card, Bloomberg News reported at the time. Experts say that it is possible to make a huge purchase like this on a card. Often, you will need to get pre-cleared by the card issuer before doing so, says Ben Woolsey, the president of, and of course, the merchant would have to be willing to accept that form of payment for such a large purchase. But “it’s possible in some cases with certain ultra-high-net-worth people,” says Woolsey. If Yiqian did use the same credit card for this painting as he had in the past, the points he could have earned would be staggering. Sean McQuay, a credit card analyst at NerdWallet, says that an American Express Centurion cardholder (which Yiqian reportedly is) earns one point per dollar spent and the points are worth about one cent apiece. This means that if he bought a $170.4 million painting, he’d be looking at rewards worth more than $1.7 million, Woolsey says. He could get a variety of things for those rewards, including $1.7 million in gift cards or statement credits. But because of better points redemption rates, it might be an even better bet to trade them in for flights and hotels. He could redeem those points for more than 1,000 round-trip first-class plane tickets from Beijing to New York, says Woolsey. “That could potentially be worth over $7 million,” he says.  The American Express Centurion card, targeted to very high net-worth consumers, has a $7,500 initiation fee and a $2,500 annual membership fee. American Express has not yet responded to our request for comment on Centurion rewards.

Why Fantasy-Sports Sites Can Ignore Schneiderman for Now

New York Attorney General Eric Schneiderman is accusing the two biggest daily fantasy sports sites, FanDuel Inc. and DraftKings Inc., of running an illegal gambling operation, demanding in letters to the companies that they stop “accepting wagers” in his state. Despite the tough words, Mr. Schneiderman can’t shut down anything on his own. The attorney general isn’t a regulator like banking and insurance officials at New York’s Department of Financial Services, an agency with the power to strip financial institutions of their licenses to operate. The fantasy sports sites say they’re operating in New York legally and don’t have to obey Mr. Schneiderman. Mr. Schneiderman is hardly powerless. He can bring his allegations before a court, which can impose penalties and order remedies. And he can ask for an injunction ordering the companies to immediately suspend their activities in New York. And lack of legal weight doesn’t mean lack of force. It’s not nothing when the state’s chief legal officer alleges a business is operating illegally. “The main impact of his cease-and-desist letter is to send a cautionary message to thirds parties such as payment processors,” Dentons partner Avi Schick, a former deputy New York attorney general under Eliot Spitzer, told Law Blog. Dentons’ Washington, D.C., office lobbies on behalf of the Fantasy Sports Trade Association, whose members include FanDuel and DraftKings. A report by Market Watch examines how that message is being received:

Barack Obama: ‘I Am Not the Lead Singer From Korn’

President Barack Obama awarded army captain Florent Groberg the Medal of Honor Thursday at a ceremony in the White House, and during the president’s speech, he made an unlikely reference to Korn singer Jonathan Davis. Groberg was given the medal after tackling a suicide bomber while serving in Afghanistan in August 2012, an act of bravery that saved the lives of fellow service members and seriously injured his leg. Early on in his recovery – it took three years and 33 surgeries to save his leg – Korn’s Davis visited Groberg in the hospital, but the dazed army captain thought he had simply hallucinated their meeting. During his Medal of Honor speech, Obama referenced that moment, Stereogum reports. “He woke up in a hospital bed in a little bit of a haze. He wasn’t sure, but he thought he was in Germany and someone was at his bedside talking to him. And he thought it was the lead singer from the heavy metal band Korn,” Obama said. “Flo thought, ‘What’s going on? Am I hallucinating?’ But he wasn’t. It was all real. And so today, Flo, I want to assure you, you are not hallucinating. You are actually in the White House. Those cameras are on. I am not the lead singer from Korn. We are here to award you our nation’s highest military distinction.” Davis, himself not a fan of Obama’s politics – he called the president an “illuminati puppet” during a February 2014 interview with the Alex Jones Show – was still surprised by the presidential name-check on Instagram:


Bice proposes 5 percent raise for teachers in 2017

Alabama State Superintendent Tommy Bice said Thursday the department would recommend raising teachers’ salaries five percent in fiscal year 2017, which begins next October. “If you think about our greatest investment in public education, it’s our people and we’re asking more of our people than we have in a long time,” Bice told the Alabama State Board of Education at a work session. “That’s a hard sell.” The Alabama Legislature will have the final word on public school spending next year. The raise would cost $160 million, according to the department. Bice said he would seek further raises in 2018 and 2019, with the goal of bringing teacher salaries in line with inflation. Alabama teachers with a bachelors’ degree start at $36,867 a year. A masters degree bumps that starting salary to $42,395. The groups top out at $46,917 and $53,792. The ceiling for the highest pay grade — a teacher with a doctorate and 27 years’ experience — is $62,040. After a seven percent raise in 2008, educators have received one salary increase — a two percent increase in 2013 — in the past seven years. The 2013 increase took place at the same time as teachers’ retirement costs went up. Bice said Thursday the raise amounted to “a wash.” The department also estimates inflation has gone up 9.75 percent since 2008. Bice said he would propose a higher increase if other expenses, such as insurance or pensions, went up. “We would have to look at a COLA increase if they’re looking at another increase (in costs),” Bice said. Like other states, Alabama has seen fewer people pursuing teaching careers in recent years. Bice cited statistics showing that the number of education majors in Alabama had fallen 45.5 percent since 2008.

What’s the status of the Blue Cross antitrust lawsuit?

A federal judge late last month ordered that the Alabama portion of an antitrust lawsuit filed against the Blue Cross Blue Shield Association can move forward. The suit, which was filed in 2012, alleges that Blue Cross limits competition among other insurers by dividing territory among its affiliates, including Blue Cross Blue Shield of Alabama. Joe Whatley, a Birmingham attorney representing the plaintiff in the case, said that the order made by U.S. District Court Judge David Proctor will allow the claims made in Alabama to move ahead of other portions of the massive lawsuit. “This order allows us to focus the claims on a specific case so that we can proceed in a specific way,” he said. “This will move the Alabama claims much faster, which is good for us because Alabama is the most concentrated state in the nation.” Whatley said that Blue Cross pays providers less because of reduced competition in the state. Blue Cross Blue Shield of Alabama controls more than 90 percent of the health insurance market, which is the least competitive state for health insurers. “Our company operates in compliance with a license from the Blue Cross and Blue Shield Association. We comply with all state and federal laws and continue to believe the allegations in the case do not have any merit,” said Blue Cross Blue Shield Spokesperson Koko Mackin.

Gov. Bentley says he is ‘looking’ at Medicaid expansion

MONTGOMERY, AL (WSFA) – Alabama Gov. Robert Bentley unveiled some of his policy plans for next year in front of a crowd of lawyers Thursday morning. The governor said his focus will be on helping the 55 rural counties in Alabama. His policy initiatives were broken down into four different parts. Healthcare was one major part. Bentley said his administration is mulling an expansion of the state’s Medicaid program, but has not made a final decision. Bentley, who is a doctor, said he was concerned about the health care access for the state’s working poor and rural health care infrastructure. However, Bentley said a stumbling block is figuring out a way to fund the state’s share of costs. Thirty states have expanded Medicaid under President Barack Obama’s health care law. The governor has previously said he might support a state-designed program with work and premium requirements on recipients. The governor also said he wants to create a statewide broadband system using money from the FCC. He said improved connectivity is important in today’s interconnected world. “It will help with business. It will help with healthcare. It will certainly help with education,” Bentley said. The governor said he plans on improving transportation systems in rural Alabama with a focus on having buses and trains to service the area. Bentley’s last focus was on Pre-K, explaining that he wants every child to have the opportunity to go to a first class Pre-K before he leaves office. Bentley said he would release the exact details of his plan in February.

Clinton praises Google’s Alabama investment while unveiling plan for coal communities

Democratic presidential front-runner Hillary Clinton rolled out her plan for revitalizing coal communities on Thursday, using Google’s plan to build a data center in Jackson County as an example of how she would repurpose former coal sites. Clinton’s $30 billion plan would “ensure that coal miners and their families get the benefits they’ve earned and respect they deserve, to invest in economic diversification and job creation, and to make coal communities an engine of US economic growth in the 21st century as they have been for generations,” according to the campaign. The former secretary of state said she would try to prevent struggling coal companies from using bankruptcy to stop paying employees’ retirement benefits and health care and partner with entrepreneurs, community leaders and labor groups to help coal workers find new jobs without having to relocate. She said sites of abandoned coal mines have “rich soil and abundant water” that make them breeding grounds for new investments. If elected, Clinton said she would use the Abandoned Mine Reclamation Fund to remediate such sites so they could be used for new economic opportunities. She cited the planned Jackson County data center as an example. “Clinton will provide similar support for redevelopment of retired coal power plant sites to attract new investment, such as Google’s plans to build a data center on the site of a recently closed coal plant in Alabama,” the campaign said. Among her other proposals are increasing broadband access in coal communities and upping funding for technical assistance for entrepreneurs and small businesses in such areas.

I-20/59 bridge replacement to start soon; work should take 4 years

Work to replace the bridges of Interstate 20/59 through downtown Birmingham will start soon, last about four years and cost about $420 million, the Alabama Department of Transportation announced Wednesday. When the three-phase project is finished, the aging bridge that carries I-20/59 through downtown Birmingham and its access bridges will be replaced. In the process, two access points to I-20/59 downtown — at 18th Street and at 22nd Street — will be eliminated. While the project will eventually require the closure of I-20/59 through downtown, that won’t happen until the third phase of the project, a couple of years away. More details:


Know your rights when dealing with police officers

By John Gross, assistant professor of Clinical Legal Education and Director of the Criminal Defense Clinic at the University of Alabama School of Law. Earlier this week, in response to a noise complaint, members of the Tuscaloosa Police Department forced their way into an apartment, dragged three University of Alabama students out and then proceeded to use a Taser and batons on at least one of the students. Despite the fact that the Chief of the Tuscaloosa Police Department, Steve Anderson, called the incident a “black eye” for his department and the city, many people expressed the view that if the students had acted differently, then the incident would never have occurred.  The argument they make is that if someone fails to cooperate with a police officer, if they disrespect authority, then they have no right to complain when that officer decides to use force against them. While this argument might appear reasonable, it fails to take into consideration rights guaranteed by the Constitution, rights which are necessary for the maintenance of a free and democratic society. Our First Amendment right to freedom of speech allows us to be critical of police officers. Our Fourth Amendment right to be free from unreasonable searches and seizures permits us to exclude police officers from our homes.  Our Fifth Amendment right to remain silent means that we don’t have to talk to police officers. Just as a refusal to testify when charged with a crime cannot be held against someone, a refusal to speak with an officer or to give consent to a search when asked cannot be viewed as an admission of guilt. If my refusal to permit an officer to search my person, my car or my home is seen as an admission of guilt, then my right to be free from unreasonable searches and seizures would vanish whenever I try to assert it. Arguing that the right way to handle any encounter with law enforcement is to simply do whatever they tell you is really an argument for a police state. Refusing to step outside of your home when ordered to by a police officer isn’t a refusal to respect the officer’s authority; it is the invocation of a right guaranteed by the Constitution, which the police officer has sworn to uphold. An officer who comes into someone’s home, without their permission and without a warrant, is the one who is not respecting authority. More:


Morning Money

INSIDE THE TRUMP SHOW — Greetings from Des Moines where M.M. is reporting out a story (look for it next week). Took the long drive up to Fort Dodge last night for a Donald Trump rally. Reports of any fade are way overdone. The place was jammed with around 1,500 people and more in an overflow room. Trump’s performance — which came just after he told CNN that Ben Carson’s ‘pathological temper’ was incurable like ‘child molesting’ — was deeply strange, a rambling series of rants about illegal immigration punctuated by signing books and telling often incomprehensible stories (at least they were incomprehensible to me). It was like being stuck at Thanksgiving dinner with a garrulous relative who won’t stop talking.

And Trump went back into the rant he started on CNN, going on for ten minutes on Carson’s incurable “disease.” Of Carson’s many tales in his book, Trump asked “how stupid are the people of Iowa, how stupid are the people of the country to believe this crap?” See it here:

The crowd, possibly annoyed that Trump started late, only occasionally interrupted with big cheers. The real estate billionaire seemed kind of worn out and loopy. Plenty of people M.M. spoke to at the rally were hard-core Trump fans with no plans to jump ship. But a number of others said they were on the fence and were also taking a hard look at Ted Cruz.

Several said they liked Ben Carson but were unnerved by the neurosurgeon’s lack of knowledge on economic issues in the most recent GOP debate. Marco Rubio got some props but clearly has a big problem on immigration. All the interviews took place before and during the early stage of the rally, not after it got really weird. By that time we had to hotfoot it back to Des Moines to write this column for you. Anyway, more coming from Iowa next week.

WARREN WARNS DEMS — POLITICO’s Zachary Warmbrodt: “Elizabeth Warren is warning Democrats not to use an upcoming spending bill to soften the banking regulations that were part of the landmark Dodd-Frank law passed after the 2008 financial crisis. But a group of moderate Democrats is quietly negotiating with Republicans who want to do just that, risking the wrath of Warren and a fired-up liberal base that wields considerable power over the party.

“The group — including Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, and Jon Tester of Montana — has been talking with Senate Banking Chairman Richard Shelby of Alabama, who is trying to include the regulatory overhaul in a fiscal 2016 appropriations bill. The idea is anathema to … not to mention the White House. Warren almost shut down the government last year when a controversial Wall Street rule was gutted in a spending bill, and she’s vowed she won’t lose again.”

HUNSTMAN PUSHBACK — AAF’s Douglas Holtz-Eakin took issue with Thursday’s item on Jon Hunstman and bank break-ups: “I noticed Mark Macintosh’s assertion yesterday that ‘breaking up the big banks’ was a ‘conservative issue.’ The notion that it’s government’s job to dictate to any private company how it is structured — or that government has any idea at all what the appropriate size of as U.S. banks is — may have been a Jon Huntsman idea, but it’s not a conservative idea. An authentically conservative idea is to ensure that failing banks will never again receive special treatment from the government at taxpayer’s expense.”

FIRST LOOK: BERNANKE HASN’T VOTED “IN A LONG TIME” — In the next broadcast of the new “Wall Street Week,” which airs Sundays at 9:00 a.m. (WNYW Fox 5 in NYC), former Fed Chair Ben Bernanke says he hasn’t voted “for a long time” And he explains how his time as Fed Chairman changed his view on politics and why he now stays away from it. Video:

DRIVING THE DAY — President Obama this afternoon meets with national security leaders “to discuss the strategic importance of the Trans-Pacific Partnership” … Retail Sales at 8:30 a.m. expected to rise 0.3 percent … Producer Prices at 8:30 a.m. expected to rise 0.2 percent headline and 0.1 percent core … Univ. of Michigan Consumer Sentiment at 10:00 a.m. expected to rise to 91.1 form 90.0 … Business Inventories at 10:00 a.m. expected to be flat …

ASIA SLIDES — Reuters: “Asian shares slumped on Friday after commodity prices plunged to multi-year lows on worries that slower global growth may worsen a supply glut, while U.S. Federal Reserve officials kept beating the drum for a rate hike next month. … Oil prices plunged to near the 6 1/2-year lows touched in August, when financial markets were gripped by fear of a hard landing for the Chinese economy. U.S. crude futures hovered around to a 2-1/2 month low of $41.54 per barrel on a persistent rise in U.S. stockpiles, and were poised for a 6.2 percent decline for the week”

G20 PREP — Bloomberg: “The Turkish coastal resort of Antalya plays host to the Group of 20 summit from Sunday, and puts world leaders next door to one of the biggest crises on their plate. The G-20’s mandate is to foster economic and financial stability and the Turkish government’s agenda for the 2015 presidency refers to ‘strengthening the global recovery’ and enhancing market regulation, energy policy and climate change. Yet for many leaders attending, the summit will be dominated by the war in Syria and the outflow of humanity arriving on European shores via Turkey.

“Antalya is almost equidistant from the part of the Aegean Sea where Syrians are drowning as they seek safety and Islamic State’s territory. In the run-up to the summit, the Turkish authorities have deployed extra police in the city and raided the homes of suspected militants and their supporters.”

TRUMP CLARIFIES WAGE COMMENTS — POLITICO’s Eliza Collins: “Donald Trump on Thursday clarified his comments from Tuesday night’s GOP debate about wages being too high, saying the blowback has been misguided. The billionaire businessman was asked during the Fox Business debate about whether he was sympathetic to protesters who have been pushing for the minimum wage to be raised to $15 an hour. ‘I can’t be … and the reason I can’t be is because we are a country that is being beaten on every front,’ Trump said on Tuesday night. ‘Taxes too high, wages too high, we’re not going to be able to compete against the world.’

“But on Fox News’ Special Report’ Thursday he insisted that he never said wages were too high, just that the minimum wage should not increase. ‘I didn’t say that. Bret, we were talking about the minimum wage, and they said ‘should we increase the minimum wage?’ And I’m saying that if we’re going to compete with other countries we can’t do that because the wages would be too high,’ Trump said after host Bret Baier asked him about his comments. ‘I was referring to the minimum wage.’”

BIG OBAMA DONORS ON THE SIDELINES — WSJ’s Daniel Shaw: “President Barack Obama’s biggest campaign donors are mostly sitting on the sidelines of the 2016 Democratic presidential primary so far, not opening their wallets in support of Hillary Clinton or Bernie Sanders. Almost four-fifths of the people who gave the 2012 maximum $5,000 to the president’s re-election committee hadn’t donated to a presidential candidate by Oct. 1, a Wall Street Journal analysis of federal campaign finance records found.

“In interviews ahead of this Saturday’s Democratic debate in Iowa, donors said Mrs. Clinton, the party’s front-runner, hadn’t motivated them to give the way Mr. Obama and previous Democratic candidates had. Still others said they are put off by the larger role of super PACs and that their donations to candidates, which are limited in this election cycle to $5,400 for the eventual nominee, just don’t matter much anymore. … The donors’ reluctance could be a troubling trend for Mrs. Clinton. They are some of the easiest prospective contributors to identify, given that their names are on Mr. Obama’s campaign disclosure reports, and that they’ve already made a habit of cutting checks to politicians”

MORE FED OFFICIALS BEAT DRUMS FOR DECEMBER — NYT’s Binyamin Appelbaum: “Federal Reserve officials, poised to start raising the central bank’s benchmark interest rate in December, are turning from the question of whether to act to how quickly the Fed should raise rates thereafter. William C. Dudley, the president of the Federal Reserve Bank of New York … said on Thursday that his reasons for hesitation have receded. Now, he said, he sees a stronger case for moving ahead. ‘I think it is quite possible that the conditions the committee has established to begin to normalize monetary policy could soon be satisfied,’ Mr. Dudley told the Economic Club of New York.

“He said he saw the risks of acting too soon and waiting too long as ‘nearly balanced.’ The remarks by Mr. Dudley, an influential adviser to Janet L. Yellen, the Fed’s chairwoman, reflected the tentative consensus among Fed officials that the time has come to raise the benchmark rate when the Federal Open Market Committee meets in Washington on Dec. 15 and 16. Investors and analysts now regard a December increase as all but certain, barring unexpected developments.”

GOLDMAN POWER SHIFT — FT’s Ben McLannahan in New York: “Goldman Sachs has promoted more managing directors to its banking divisions than its securities unit, in a sign of a shift of power within the Wall Street giant. On Thursday, the bank said that it had anointed 425 new MDs, of which 96 would be in its advisory division, 13 in merchant banking and 103 in securities. During the previous round of MD promotions in 2013, the securities unit dominated, accounting for 91 of 280 elevations, comfortably ahead of banking (51) and merchant banking (eight). …

“The class of 2015 is the first to be assessed on a two-year cycle, after Goldman shifted from annual assessments. That was part of a strategy to make the MD status more enticing, at a time when big banks are struggling to retain their top people under a slew of post-crisis regulations. MDs, one rung below the ultimate prize of partnership, will now comprise 6.7 per cent of Goldman’s staff, down from 7.4 per cent last year. ‘We’re trying to get the pyramid right,’ said a person close to the process”

FED MAY CRACK DOWN ON REVOLVING DOOR — WSJ’s Katy Burne: “The Federal Reserve is weighing new measures to tighten the restraints it imposes on bank examiners who leave the central bank for jobs with financial institutions, following questions of a revolving door between the regulator and Wall Street. The move would enhance a series of existing curbs the Fed places on bank examiners leaving for firms, said people familiar with the proposal, as the central bank is under fresh pressure from lawmakers to improve its transparency and bank-supervisory procedures.

“A Fed spokesman, Dave Skidmore, said the Fed’s board of governors and regional reserve banks ‘are looking at the area of post-employment restrictions and considering a variety of actions.’ He declined to give specifics but added, ‘We expect to finish up this consideration in the near future.’ News of the plans comes a month after a New York state banking regulator fined Goldman Sachs Group Inc. $50 million for failing to properly supervise a former employee, Rohit Bansal, who had joined the firm from the New York Fed and was able to obtain confidential supervisory information from a former Fed co-worker.”

POTUS Events

11:30 am || Meets with Archbishop Joseph Kurtz, President of the United States Conference of Catholic Bishops
12:30 pm || Lunch with Biden
3:10 pm || Meets with national security leaders to discuss the strategic importance of the Trans-Pacific Partnership

All times Eastern
Live stream of White House briefing at 12:30 pm

Floor Action


Krebs Daily Briefing 12 November 2015


Iraqi Kurds launch offensive to retake ISIL-held Sinjar

Kurdish fighters backed by U.S.-led coalition airstrikes launched a ground offensive shortly after dawn Thursday to recapture the strategic Iraqi town of Sinjar from the Islamic State, touching off a fierce battle for control of the strategic city. U.S. advisers are with Kuridsh units at headquarters far from the fighting, according to a U.S. military official who did not want to be identified by name because he is not authorized to speak publicly about the battle. He said the siege to capture the city is expected to take two to four days, and another week to fully secure Sinjar, which is in northern Iraq near the Syrian and Turkish borders. The U.S.-led coalition supported the operation with at least 20 airstrikes as Kurdish forces launched the offensive, the official said. The Kurdistan Region Security Council said in a series of tweets that warplanes struck dozens of positions in Sinjar and the nearby city of Tal Afar. Both are on the border with Syria. Sinjar became an early symbol of Islamic State brutality when thousands of Yazidis, a small religious sect, were slaughtered and many of their women forced into sexual slavery after the town fell to Islamic State militants in August 2014. The plight of the Yazidis captured world attention and helped draw the United States back into Iraq. The United States launched airstrikes in an effort to defend the Yazidis as they fled Sinjar. The city also has major military significance, sitting across a major Islamic State supply line between Raqqa, the Islamic State’s de facto capital in Syria, and Mosul, Iraq’s second largest city, which is under the militants’ control. “Severing that supply route will impact ISIL’s ability to move men and material between those two hubs,” said Army Col. Steve Warren, a military spokesman in Baghdad, using an acronym for the Islamic State. “The coalition is providing substantial air power to support this operation.” The ground offensive includes up to 7,500 Kurdish fighters, known as Peshmerga. The city is defended by up to 600 militants, according to the Kurdish security council. “Radio chatter of an ISIL (leader) can be heard instructing ISIL terrorists to stay and fight in Sinjar, adding that anyone fleeing the battlefield will be killed,” the Kurdish council said in a statement. It said about 30 militants have been killed in the offensive so far. The Kurdish council said the forces also now control three villages as part of the offensive. The Kurdish council said ts objectives are to clear the militants from Sinjar, take strategic supply routes, and establish “a significant buffer zone” to protect the city and its inhabitants from the Islamic State. The Kurds live in a semiautonomous region of northern Iraq. Their military forces have been effective over the past  year in driving Islamic State militants from parts of northern Iraq.

Major Oil Companies Have Half-Trillion Dollars to Fund Takeovers

The world’s six largest publicly traded oil producers have more than a half-trillion dollars in stock and cash to snap up rival explorers. Exxon Mobil Corp. tops the list with a total of $320 billion for potential acquisitions. Chevron is next with $65 billion in cash and its own shares tucked away, followed by BP Plc with $53 billion, according to data from corporate filings compiled by Bloomberg.

A Last Cigarette With Helmut Schmidt

No, no, no. I have never thought about how I’ll be remembered after I’m gone. No.” Helmut Schmidt, the former chancellor of Germany who Tuesday died at the age of 96, was quick to admonish me when I visited him a few years ago at his office in Hamburg. This had always been Schmidt’s style — clipped, curt, unsentimental — though his affect grew more curmudgeonly with age. (After his secretary showed me to his modest book-lined room, Schmidt did little to acknowledge my presence until I seated myself across from him at his desk.) In his regular articles for Die Zeit, the weekly newspaper where he worked as a publisher after leaving the chancellery in 1982, he aired opinions mostly out of step with the day: dismissive of political correctness and grassroots protests, harshly critical of the superficiality and materialism of youth. They were the types of crabby “get off my lawn” pronouncements likely to earn ridicule or, perhaps worse, quiet pity from younger readers. Yet Schmidt, as public intellectual and unwitting pop icon, experienced a curious late-in-life boom in popularity. A nationwide poll several years ago named him the “coolest guy” in Germany, ahead of both the country’s leading heartthrob and its best-known comedian, and the dry political books he published in his later years — like Out of Office, a combined memoir and political ethics treatise — were routinely bestsellers, not only among nostalgic older readers but also young readers. In his final years, Schmidt made the shift from public figure to cultural phenomenon, from politician to star. It was a shift that spoke volumes about how German culture had changed over the course of his lifetime. Outside of Germany, it might have seemed strange that a 90-year-old former politician — one who could move only with aid of a cane and was almost entirely deaf — had become a sort of symbol of hip. This was stranger still because during his heyday as a politician Schmidt had hardly been a popular figure.

New Alzheimer’s treatment fully restores memory function

Australian researchers have come up with a non-invasive ultrasound technology that clears the brain of neurotoxic amyloid plaques – structures that are responsible for memory loss and a decline in cognitive function in Alzheimer’s patients. If a person has Alzheimer’s disease, it’s usually the result of a build-up of two types of lesions – amyloid plaques, and neurofibrillary tangles. Amyloid plaques sit between the neurons and end up as dense clusters of beta-amyloid molecules, a sticky type of protein that clumps together and forms plaques. Neurofibrillary tangles are found inside the neurons of the brain, and they’re caused by defective tau proteins that clump up into a thick, insoluble mass. This causes tiny filaments called microtubules to get all twisted, which disrupts the transportation of essential materials such as nutrients and organelles along them, just like when you twist up the vacuum cleaner tube. As we don’t have any kind of vaccine or preventative measure for Alzheimer’s – a disease that affects 343,000 people in Australia, and 50 million worldwide – it’s been a race to figure out how best to treat it, starting with how to clear the build-up of defective beta-amyloid and tau proteins from a patient’s brain. Now a team from the Queensland Brain Institute (QBI) at the University of Queensland have come up with a pretty promising solution for removing the former. Publishing in Science Translational Medicine, the team describes the technique as using a particular type of ultrasound called a focused therapeutic ultrasound, which non-invasively beams sound waves into the brain tissue. More:

A smuggler’s tale

ZAKHO, Iraq – In photo after photo, Sediq Sevo’s Facebook page lays out the riches and allure of Europe. In one picture the young Iraqi Kurd poses beneath the Eiffel Tower. In another he stands in a neon-lit restaurant in Rotterdam. A third has him grinning beside a train in Milan. He stopped posting pictures in August. That was the month Sevo helped smuggle five fellow Iraqi Kurds to Europe, he told Reuters. They ended up dead, trapped with 66 other migrants inside a truck abandoned alongside an Austrian highway. Like Sevo, many of the dead came from Iraqi Kurdistan. They had joined hundreds of thousands of people who have entered Europe illegally this year from homes wrecked by civil war, sectarian violence or repressive governments in countries such as Syria, Afghanistan and Eritrea. Many are young men ready to risk their lives for the chance of stability and wealth. On their side are determination, sheer numbers, and people-smugglers. Human brokers such as Sevo play the central role in many migrants’ journeys. He was the first in a chain of people that helped the five men make their way from northern Iraq through Turkey and Bulgaria to Serbia, Hungary and finally Austria. “I have good experience in the smuggling industry,” he told Reuters in a phone interview in October. “I have been working for more than seven years in the smuggling sector … I used to take people from Kurdistan to Turkey and from Turkey to Greece all on foot and by car.”


Veterans Affairs pays $142 million in bonuses amid scandals


WASHINGTON – The Department of Veterans Affairsdoled out more than $142 million in bonuses to executives and employees for performance in 2014 even as scandals over veterans’ health care and other issues racked the agency. Among the recipients were claims processors in a Philadelphia benefits office that investigators dubbed the worst in the country last year. They received $300 to $900 each. Managers in Tomah, Wis., got $1,000 to $4,000, even though they oversaw the over-prescription of opiates to veterans – one of whom died. The VA also rewarded executives who managed construction of a facility in Denver, a disastrous project years overdue and more than $1 billion over budget. They took home $4,000 to $8,000 each. And in St. Cloud, Minn., where an internal investigation report last year outlined mismanagement that led to mass resignations of health care providers, the chief of staff cited by investigators received a performance bonus of almost $4,000. As one of his final acts last year before resigning, then-VA secretary Eric Shinseki announced he was suspending bonuses in the wake of revelations that VA employees falsified wait lists to meet wait-time targets — ostensibly as part of efforts to secure the extra pay. But he only curtailed them for a sliver of VA executives — those in senior levels of the Veterans Health Administration, which oversees health care. The agency has continued to pay performance-based bonuses to nearly half of agency employees, including in health administration, according to data provided to USA TODAY by the House Veterans’ Affairs Committee. In all, some 156,000 executives, managers and employees received them for 2014 performance. VA spokesman James Hutton said the vast majority of agency employees are committed to serving veterans. “VA will continue to review tools and options in order to ensure the department is able to attract and retain the best talent to serve our nation’s veterans, while operating as a good steward of taxpayer funds,” Hutton said.

The ghosts of 2008

Republicans don’t usually talk much about the 2008 financial crisis. It’s a reminder of the sour conclusion of the last Republican presidency. It’s a reminder that President Obama inherited an economy in a terrifying free-fall. And it’s a reminder of Republican opposition to Wall Street regulation and reform. At last night’s Fox Business debate on the economy, Republicans had to talk about the crisis. It was a reminder of why they don’t like doing that. After all, the bank bailouts that helped fix the crisis also sparked the fury that helped launch the Tea Party—and GOP candidates buck the Tea Party at their peril. But the Wall Street reforms that Congress passed in 2010 are almost as popular with voters as Wall Street bailouts are unpopular, and the GOP candidates don’t support those either. It’s an awkward situation, and since the bailouts and reforms have both been surprisingly successful, the candidates often ended up in factual, logical and political cul-de-sacs trying to bash them. Jeb Bush, a former Lehman Brothers adviser, said the biggest banks now hold less capital and take more risks because of the Dodd-Frank financial reforms; in fact, their Tier One capital levels have doubled from about 6% to 12%, while leverage in the financial system has been cut from about $16 trillion to about $9 trillion.  John Kasich, a former Lehman Brothers banker, seemed unaware that FDIC insurance protects ordinary depositors at failing commercial banks.

Bitcoin Has Come Crashing Back to Earth

Bitcoin’s recent rally has reversed in a major way. While the virtual currency is still about 20 percent higher than it was a month ago, it has fallen sharply in recent days. Searching for reasons behind bitcoin’s price movements often feels like an exercise in futility, but two things did dominate recent conversations concerning the cryptocurrency’s rise; those were a questionable Russian scheme as well as a surge in Chinese demand. Now it seems the two may be inextricably linked. User registrations and transactions on bitcoin exchanges like BTCC – one of China’s largest – have surged since mid September, around the same time the Russian scheme took off. According to BTCC, transaction volume in bitcoins went from 540,324 in September to 1,152,889 in October. “We saw a hockey stick change in daily registrations,” Bobby Lee, CEO of the exchange, said in an interview last week. “The last few days have been crazy and customer service is around the clock, working overtime.” Some argue that Chinese demand may have surged as investors attempted to bypass the country’s capital controls or looked for a way to avoid volatility in the stock market. But others say that doesn’t make much sense since – as evidenced by this week’s price movement – bitcoin itself is extremely unpredictable. Investors who piled into the currency at its recent peak are now experiencing that volatility first hand.

Tide turns against U.S. residency restrictions on sex offenders

Nearly two decades have passed since Josh Gravens, then 12 years old, was playing with his 8-year-old sister and touched her body in an inappropriate way, landing himself on a sex offender registry. His sister forgave him long ago but Gravens still worries that the incident could force him out of his Dallas home. Concerns about sexual predators have led communities in 30 U.S. states to adopt laws limiting where registered sex offenders can live, typically keeping them away from schools, parks or other places where children congregate. Gravens, now 29 and an advocate for prisoner rights, spends a lot of his time courting Dallas City Council members, including volunteering on election campaigns, in hopes of preventing them from imposing rigid limits on where sex offenders may live. “It would be absolutely disruptive and possibly push me out of a town where I finally feel like I’ve found my way,” said Gravens, who lives near a park. “Dallas is the first city I felt I had a chance. A lot of places I was terrified of my own name.” Increasingly tough laws adopted in the United States over the past 20 years have had the unintended consequence of forcing many of the nation’s 800,000 registered sex offenders into homelessness. That in turn makes them harder to track, according to law enforcement, and strips them of the stable homes advocates say are key to getting a job and rehabilitation. Recently there has been something of a backlash against such residency restrictions – with courts striking them down in 2015 in New York, Massachusetts and California. Last week in Rhode Island, a federal judge granted a restraining order that allowed high-risk offenders who live within 1,000 feet (305 meters) of a school to stay in their homes at least until January. This week in Texas, civil rights advocates demanded that 46 small communities immediately rescind their residency restrictions or be sued.

The real reason Wall Street loves the Trans-Pacific Partnership

Due primarily to Elizabeth Warren’s joint role as a leading critic of the Trans-Pacific Partnership and a critic from the left of the Obama administration’s approach to bank regulation, it’s natural that the financial services chapter of TPP has been at the center of much discussion. TPP critics have repeatedly raised the specter of a trade deal broadly undermining American financial regulation. The Obama administration responded to this concern by including a number of pieces of treaty language — including a backstop to the much-debated investor-state dispute settlement (ISDS) process — but it’s left critics entirely unmollified. The issue essentially amounts to a complete breakdown of political trust, with critics basically rejecting the idea that any sort of safeguard is adequate. Many progressives, including Warren, have been waging a years-long effort to shrink, break up, or otherwise destroy America’s largest financial services companies. The team negotiating the TPP, by contrast, is trying to secure access to lucrative foreign markets for American financial services companies. From the point of view of the Obama administration, the financial services chapter offers a significant upside in the form of more high-value exports and a very limited downside due to the protections for domestic financial regulation. To the administration’s critics, bolstering financial services exports isn’t an upside at all — so there’s really no level of downside risk that’s worth bearing. More:

Obamacare repeal faces new obstacles

Moderate Senate Republicans are voicing new opposition to a conservative-backed plan to defund Planned Parenthood — a move that could imperil the GOP’s long-cherished goal of sending an Obamacare repeal to the president’s desk. Several GOP moderates were hoping the Senate parliamentarian would help them avoid a tough election-year vote on the Planned Parenthood provisions by forcing Republican leaders to remove the defunding language from a broader House-passed bill that also dismantles Obamacare. But the latest ruling from the parliamentarian’s office, which has the ultimate say on what can be passed using fast-track budget rules, said the defunding language could stay — robbing the leadership and moderates of a procedural escape hatch. “The House version obviously has some pieces in it that are complicating for me,” said Sen. Lisa Murkowski (R-Alaska), adding that the Planned Parenthood provisions are a “big issue.” Now — on a bill in which Majority Leader Mitch McConnell (R-Ky.) has little room for error — GOP leaders are facing resistance from both their conservative and moderate ends, obscuring the path toward the 51 votes McConnell needs to send a sweeping Obamacare repeal to the White House.

Justice officials fear nation’s biggest wiretap operation may not be legal

RIVERSIDE, Calif. — Federal drug agents have built a massive wiretapping operation in the Los Angeles suburbs, secretly intercepting tens of thousands of Americans’ phone calls and text messages to monitor drug traffickers across the United States despite objections from Justice Department lawyers who fear the practice may not be legal. Nearly all of that surveillance was authorized by a single state court judge in Riverside County, who last year signed off on almost five times as many wiretaps as any other judge in the United States. The judge’s orders allowed investigators — usually from theU.S. Drug Enforcement Administration — to intercept more than 2 million conversations involving 44,000 people, federal court records show. The eavesdropping is aimed at dismantling the drug rings that have turned Los Angeles’ eastern suburbs into what the DEA says is the nation’s busiest shipping corridor for heroin and methamphetamine. Riverside wiretaps are supposed to be tied to crime within the county, but investigators have relied on them to make arrests and seize shipments of cash and drugs as far away as New York and Virginia, sometimes concealing the surveillance in the process. The surveillance has raised concerns among Justice Department lawyers in Los Angeles, who have mostly refused to use the results in federal court because they have concluded the state court’s eavesdropping orders are unlikely to withstand a legal challenge, current and former Justice officials said. More:

Exclusive: Morgan Stanley turns to stodgy bank accounts to boost profit

Morgan Stanley, (MS.N) better known for underwriting bonds than for retail banking, plans to offer savings accounts and certificates of deposits next year to wring more profit from its wealth management clients, executives told Reuters. The bank has offered checking accounts and credit cards for years, but it is launching more consumer banking products and giving brokers bonuses if clients use them. The goal is to win more of the assets that customers keep at rivals such as JPMorgan Chase & Co (JPM.N) or Bank of America Corp. (BAC.N) Right now, just 1 percent of Morgan Stanley’s more than 3.5 million wealth management clients actively use its retail banking products. “You shouldn’t have to deal with two or three financial institutions,” said Eric Heaton, president of Morgan Stanley U.S Banks, in an interview with Reuters. “Just deal with us.” Morgan Stanley has no plans to build retail bank branches, and will instead rely on its 16,000 brokers to sell the new products. The effort may leave it looking a little more like a conventional bank, a move that regulators have been encouraging since the crisis. Its chief rival, Goldman Sachs Group Inc (GS.N), took a similar step in August, when it agreed to buy General Electric (GE.N) Capital Bank’s online deposit business. The move is also likely to boost the bottom line – clients who actively use Morgan Stanley’s banking products hold on average 7 percent more assets at the firm than those who don’t.

Apple in talks with U.S. banks for person-to-person payment service: WSJ

Apple Inc (AAPL.O) is in talks with U.S. banks to develop a person-to-person mobile payment service, the Wall Street Journal reported. The talks are ongoing and it is unclear if any of the banks have signed an agreement with Apple, the Journal said, citing people familiar with the matter. The service, which would compete with PayPal Inc’s (PYPL.O) popular Venmo, would allow users to transfer funds from their checking accounts through Apple devices, the Journal reported on Wednesday. The service would likely be linked to the company’s Apple Pay system, which allows customers to make credit-card and debit-card payments with their mobile phones, the newspaper said. A launch isn’t imminent, but one person told the Journal that Apple could roll it out next year. Apple has been talking with a number of banks about the service, including JPMorgan Chase & Co (JPM.N), Capital One Financial Corp (COF.N), Wells Fargo & Co (WFC.N) and U.S. Bancorp (USB.N). An Apple spokeswoman declined to comment.

How the Kochs created Joni Ernst

Joni Ernst was surprised to receive an invitation in the summer of 2013 that she later credited with starting her meteoric rise to the U.S. Senate. Ernst was then a little-known Iowa state senator and lieutenant colonel in the National Guard who was considering a long-shot campaign for the GOP nomination for U.S. Senate. Polls showed more than 90 percent of her state’s voters had no opinion of her. At least a half-dozen other Republicans ― some with better funding and connections and stronger establishment support ― also were positioning themselves to run against the presumptive Democratic nominee, Rep. Bruce Braley. But Ernst was being watched closely by allies of the billionaire brothers Charles and David Koch, who saw in her an advocate for their brand of free-market, libertarian-infused conservatism. Operatives affiliated with the Kochs’ political network invited Ernst to the network’s August 2013 gathering of wealthy conservative donors at a posh resort in Albuquerque’s Santa Ana Pueblo. Ernst later told POLITICO she had no idea “how my name came through those channels.” But her appearance at the event impressed donors and was followed by an infusion of support that helped Ernst win the GOP nomination and, eventually, a Senate seat. It also represented a new phase in the rapid expansion of the Koch-backed political network ― its willingness to become involved in primary fights among GOP candidates — potentially putting it on a collision course with the official Republican Party. Until now, little has been known about the secretive role played by the Kochs’ donors and operatives in boosting Ernst. The Koch network has focused primarily on policy fights, mostly leaving the spadework of recruiting and nurturing candidates to the party. But the network’s financial support for Ernst ― detailed here for the first time ― offers the first signs of a move into GOP primaries. More:

Money for Nothing? Sheldon Silver Trial Sheds Light on Referral Fees

You need to know the law to become a lawyer. But as the federal trial of former New York Assembly Speaker Sheldon Silver illustrates, attorneys don’t have to perform any legal work to collect millions of dollars from a firm. Leaders at Manhattan-based Weitz & Luxenberg PC testified that Mr. Silver, who was “of counsel” to the personal injury law firm for many years, performed no legal work while receiving more than $3 million in referral fees. Reports WSJ’s Erica Orden:  Sheldon Silver may have performed no legal work for Weitz & Luxenberg P.C. for the many years he was of counsel, the firm’s leaders testified on Tuesday, but he was treated to some unusual perks, including paychecks hand-deposited by its managing attorney. The attorney, Gary Klein, said on Tuesday that after Mr. Silver, then the New York state Assembly speaker, complained about delays between the time a check was signed and when it was mailed, Mr. Klein took to depositing them himself in Mr. Silver’s HSBC account, a duty he assumed for no one else at the firm. Those checks were primarily for the referral fees that are central to the Manhattan U.S. attorney’s case against Mr. Silver, a Manhattan Democrat who is on trial on charges of honest-services fraud, extortion and money laundering. He has pleaded not guilty. Among other charges, prosecutors say the once-powerful Democrat steered $500,000 in state money to a Columbia University oncologist to help his research. In exchange, they allege, the physician made asbestos personal-injury referrals to Weitz & Luxenberg. More:

Donald Trump Loves Gold, Ben Carson Loves Jesus—Inside the Homes of the Republican Rivals

The Donald’s $100 million apartment is furnished with shameless excess, Carson imagines himself with Christ, and Fiorina and Huckabee love sweeping staircases. Many may object to his views on Mexicans, the looks of Carly Fiorina, and his sneering at Megyn Kelly—and much more—but at least, when it comes to interior decoration, Donald Trump is no slave to mimsy restraint. It can be safely assumed that Donald Trump does not spend his weekends at Ikea. As pictures published by the Daily Mail show, to the surprise of absolutely no one, when it comes to how he furnishes his home the Trump taste is for maximalism. The penthouse, on the 66th floreor of Trump Tower and worth a reputed $100 million, is a riot of gold-everything and glittering chandeliers. Even Liberace might grimace at the excess of it all, and seek refuge in his sunglasses. But here it is: floor-to-ceiling marble, a statue of an intertwined Eros and Psyche, a Renoir (“La Loge”) next to a writing desk, cushions bearing the Trump coat of arms, classical paintings, gorgeous coffee-table books (one costing $15,000), and even a very luxe toy car—with personalized license plate—owned by Trump and third wife Melania’s young son, Barron. There are lots of family pictures (many crowded on one table), including one of his father, Fred. There is more gold, more marble, more pillars—the apartment reminded me of Joan Rivers’ New York apartment: its own mini-Versailles, if a little homelier. Trump’s home, like his other candidates’ abodes, is an acutely aesthetic symbol, and manifestation, of his personality.

The 7 biggest presidential sex scandals in American history

Before 1988, when presidential contender Gary Hart was brought down by the media for a sex scandal, the private lives of politicians and presidents were considered just that: private. Hart dared the press to follow him, and they did—all the way to a pleasure cruise aboard the Monkey Business and a picture of pretty Donna Rice sitting on Hart’s lap. Hart’s travails, and this turning point in American media and politics, are detailed in Matt Bai’s surprisingly sympathetic portrait, All the Truth Is Out. In Bai’s telling, Hart, who never held political office again, wasn’t the only loser in the deal. Politicians have been stalked ever since the new era of gossipy, “gotcha” political journalism was born. Bill Clinton’s missteps became topics of discussion in households all over the country. Politics was never so icky … or interesting. The sex lives of our political leaders may have no bearing on their abilities to perform their jobs, but they sell a lot of newspapers and popular books. Because of the antics of Hart and Clinton, we can be sure that, abilities be damned, no politician today gets a free pass with any sexual skeletons hiding in the closet. Just ask John Edwards. Long before Hart and Clinton, there were ample examples of leaders who, if they held office today, would have made for some sensational copy. Here are seven of the most notable.



Don’t invest in marijuana, Alabama Securities Commission says

Some investors are hoping marijuana is the next big thing, but the Alabama Securities Commission does not want you to invest in it. The Commission released warnings against three trends in investing this week: marijuana, digital currencies like bitcoins, and binary options. “At first glance, these products appear to have no real connection to one another,” ASC Director Joseph Borg said in a statement. “But what they all have in common is their recent emergence as three investments that both sellers and buyers hope will become the ‘next big thing.’ Before you consider investing, make sure you understand what these products are, their benefits, and their risks.” The commission also warned against all three last year. Binary options are securities whose payout depends on the stock’s outcome. It’s an all-or-nothing payout structure, and investors will either receive a pre-determined amount of money if the asset increased over the fixed period or no money at all. Unlike traditional options, the amount paid won’t be affected by the amount of growth. The risk with marijuana is that that the federal government could force operations to cease operation and not provide any recourse for investors to recover funds. It’s also particularly susceptible to scams, the ACS warns. Bitcoin is risky because it’s vulnerable to hackers and fluctuates wildly, ACS said. It’s also risky to scams because there’s so much variation in its regulation.

Bentley: Gambling order clarifies ‘right approach’ to enforcement

“Constitutional officers, who are sheriffs and district attorneys . . . they interpret (the law) and they make a decision on whether they will prosecute,” the governor said. “I’m saying this is a local issue, and all laws start locally and the enforcement of all laws start locally.” The comments were first reported by Bentley last week rescinded his 2011 executive order putting the power of gambling enforcement in the hands of Attorney General Luther Strange. That order followed an announcement from a memo by Strange in January that said local officials would take the lead on those prosecutions in the future. Both moves signaled a retreat from the state’s years-long battle with bingo operators, and may provide one way for casinos such as VictoryLand in Macon County to reopen. The Alabama Supreme Court Monday blocked a lower court order requiring the return of electronic bingo machines seized from VictoryLand. The Alabama Constitution bans gambling, though individual amendments have carved out areas for it in the state; what kind of gambling those amendments allow is at the crux of the dispute. Bentley personally opposes gambling, and criticized legislative efforts to address a General Fund shortfall with gambling legislation. Experts say lottery and gambling revenues do not grow and are unlikely to provide long-term stability to the state budgets. But noting Tuesday he had no role in the process, the governor reiterated that he would not oppose allowing Alabama citizens to vote on a constitutional amendment addressing gambling. Such an amendment would need approval by three-fifths of the Legislature, which would then send it to voters for approval. The Legislature’s two budget chairs said last week the General Fund may need at least $30 million in new revenue next year, and both chairs said they expected legalized gambling to be one option explored. Bentley agreed. “Will it be taken up in this next session?” Bentley said. “I’m sure it probably will.”

Electronic Bingo questions may have to be decided by legislature

MONTGOMERY, AL (WSFA) – Last week, Governor Bentley issued an executive order to clarify how state laws should be prosecuted. The order had many pro-gaming supporters claiming victory as the Attorney General’s office claims it doesn’t change anything. The governor’s order said local constitutional officials should be in charge of enforcing local and state laws. Many pro-gaming supporters believe this will help them keep bingo, as counties like Macon and Greene have local constitutional amendments that legalize electronic bingo. Joe Hubbard, a former Alabama state representative and Attorney General candidate, however says that the order does not legalize electronic bingo everywhere. “What the governor is trying to say is that you are asking a broad question and the answer really is, it depends. It depends on the constitutional amendments in a particular county, and it depends on how that amendment will be enforced.” Hubbard said. Part of the reason for the issue around state gaming, is an inconsistent legal status around the state. “You have some counties where people have said, ‘not only do we want bingo, but we want electronic bingo.’ You have some counties who don’t want any bingo, not even church bingo. So it is a patchwork set of laws,” Hubbard said. Governor Bentley said any further clarification of his executive order would need a constitutional amendment to be approved by the people. Hubbard said this would put the situation in front of lawmakers to once and for all come up with a plan for electronic bingo. “How do we tax it? How do we regulate it, and how do we ensure that the system is not taken advantage of? Once we have that clarity from the legislature, the people of Alabama can decide, is that what we want?” Hubbard said. The state has spent an estimated $9 million prosecuting gaming cases throughout the state in recent years. Hubbard says the time is now for lawmakers to help settle the issue. “The legislature needs to step up and do it’s job, and provide some clarity on this issue,” Hubbard said.

Milton McGregor hopes to open VictoryLand by Christmas

VictoryLand owner Milton McGregor hopes to have his casino reopened by Christmas despite an Alabama Supreme Court order allowing the state to keep seized gambling machines, his lawyer said Wednesday. McGregor attorney Joe Espy said the casino’s reopening will hinge on the ability to obtain new electronic bingo machines, but he believes VictoryLand will be able to do that. “He is hoping that he can reopen by Christmas so people can have jobs,” Espy said. The Alabama Supreme Court on Monday stayed a judge’s order directing the state to return the devices. However, Espy said VictoryLand workers were doubtful that those machines would have worked anyway if returned. The state has been in a long-running legal battle over the slot machine look-alikes. The attorney general’s office has argued that the machines, which feature swirling electronic displays and chiming sounds, are illegal. Casino operators have argued, however, that the digital displays are just for entertainment. They said the machines’ internal workings play bingo and are allowed under state law. The attorney general’s office seized 1,615 electronic bingo machines and $260,000 in cash during a 2013 raid at VictoryLand in Macon County. Montgomery Circuit Judge William Shashy dismissed the case, however, and ordered the state to return the machines by Nov. 16. Shashy said it was unfair to close one casino when others remained open. The state Supreme Court on Monday stayed the order to return the machines. Gambling equipment manufacturers typically lease the devices to casinos, meaning they could see their property seized if the state raided a gambling facility. Espy said he believes recent legal developments, including Shashy’s order, will make manufacturers willing to put their machines back in the state. Espy acknowledged the attorney general’s office could try to seize the new machines, but said there would be a legal fight if the state attempted another raid.

$21 Million in Gulf Restoration grants announced for Alabama

MONTGOMERY, Ala. – Alabama Gov. Robert Bentley on Tuesday announced that in a third round of grants from the Gulf Environmental Benefit Fund, the National Fish and Wildlife Foundation (NFWF) has approved more than $21 million for five Alabama projects to restore some of Alabama’s natural resources affected by the 2010 BP Deepwater Horizon explosion and oil spill. “The Gulf Coast of Alabama is one of the state’s greatest natural treasures, and it is important we restore it from the devastation caused by the 2010 oil spill,” Governor Bentley said. “The $21 million we will receive from the National Fish and Wildlife Foundation will support our continued long-term recovery efforts from the adverse effects of the oil spill.  I appreciate the unified effort of our local, state and federal partners who are working with us in this long-term recovery process to restore the Alabama Gulf Coast.” The Gulf Environmental Benefit Fund was established in 2013 when a U.S. District Court made BP and Transocean–the Swiss-based offshore drilling contractor that owned Deepwater Horizon–provide $2.544 billion to the NFWF to fund Gulf Coast restoration projects. A total of $356 million will be paid into the Gulf Fund over a five year period for conservation projects in the State of Alabama. While projects are necessary to help Alabama’s Gulf Coast continue its recovery, some Alabama legislators are discontent with how much control Montgomery has over how other parts of the settlement money is divvied out. However, the 2015 Gulf Environmental Benefit Fund projects are primarily focused on Alabama’s coastal counties.Alabama 2015 Projects include:

Comment on Birmingham transportation code by Friday; Uber says updates fall short

The most recent update to Birmingham’s transportation ordinance, which aims to open the door for ridesharing companies among other updates, is open for public comment through Friday. That rewrite addresses several flaws in the code and allows for the inclusion of transportation network companies, said Councilwoman Kim Rafferty, who heads the transportation committee. “This is a complete rewrite to all sections of the code, including the horse-drawn carriage section, and we need to hear from as many stakeholders as possible,” Rafferty said. “This input will ensure that we have addressed or properly regulated all forms of motorized vehicle, pedicab, and horse transportation in the City of Birmingham, without compromising the regulatory integrity of other jurisdictions in which these companies and services may work in.” The full text of the updated code is on the city council’s website, and anyone can submit comments through an online form. The deadline to submit comments is Friday. The Birmingham City Council will discuss comments and code updates during a special called meeting at 5 p.m. Nov. 17 at city hall. The proposed code was created by the council’s transportation committee, the city’s law department and the Birmingham Police Department. They also requested input from the Alabama Law Enforcement Agency, the Public Service Commission, the Alabama Insurance Regulators, the Birmingham Airport Authority and nearby jurisdictions that also would have to update regulations governing on-demand transportation. More:

How Alabama’s uninsured stats measure up nationally

Since the first enrollment period of the Health Insurance Marketplace mandated under the Affordable Care Act, more than 107,000 Alabama residents have gained health insurance that were previously uninsured. According to a report from WalletHub, that has lowered Alabama’s uninsured rate 2.45 percent from 2010 to 2014. The report ranks Alabama 37th nationally for that decrease. The uninsured rate in Alabama is 12.15 percent, which ranks the state 35th. WalletHub used U.S. Census Bureau data to measure the uninsured rates by state before and after the implementation of the ACA. The states with the lowest uninsured rates include No. 1 Massachusetts (3.28 percent), No. 2 Vermont (4.95 percent), and No. 3 Hawaii (5.27 percent).

Ex-Marine Jonathan McConnell running for Richard Shelby’s seat

U.S. Sen. Richard Shelby, R-Ala., has been in Congress longer than Jonathan McConnell has been alive. McConnell, a 33-year-old ex-Marine and the owner of a security business, is challenging Alabama’s longtime senior senator in the March GOP primary, and he said his relative inexperience compared to Shelby isn’t a liability. “I think that we need change in this country and I think the best way to make change is in the U.S. Senate,” McConnell, a former Marine captain who is set tokick off his campaign on Thursday, told in an interview last week. “I wasn’t too young to lead 149 Marines in Iraq.” The Birmingham resident’s campaign marks his first run for public office. He was raised in Mobile, graduated from Auburn, served in the Marines for four years and got his law degree from the University of Alabama. He claimed Shelby, who has been in the Senate since 1987 before serving in the House for nine years, is not as conservative as Alabamians may believe. “I’m running against Richard Shelby because I’m sick of career politicians who are absolutely getting nothing done. As a small business owner I know what it means to run a small business … and [make] payroll,” McConnell said. “It’s time we sent senators like Sen. Shelby home. He’s voted to raise the debt ceiling numerous times. He’s made no efforts to actually cut spending. He’s not representative of our core conservative Christian values.” Shelby voted against the most recent budget deal, saying the agreement “exacerbates our nation’s debt crisis and increases runaway government spending.” The 81-year-old senator also voted against funding Planned Parenthood and was critical of the Supreme Court decision that legalized gay marriage. McConnell pointed to Shelby’s scorecards from the conservative group Heritage Action, which went from a 71 rating four years ago to a 77 two years ago and a 99 rating today to claim that the senator has only become increasingly conservative because of political expediency.  “He’s not a conservative and he knows that he has an election coming up March 1,” McConnell said. “I think he does a great job of turning conservative when it’s convenient for him.” More:



Op-ed: A key to Alabama’s future


Experts sometimes err, especially when dealing with challenges they do not fully comprehend. The advisors from the Pew Charitable Trusts are mistaken in the advice they recently gave to the Alabama Legislature’s Joint Committee on Public Pensions. According to a story in The Star (“Analysts: RSA Investments Falling Short,” Nov. 6), these East Coast analysts believe the Retirement Systems of Alabama should not put anything close to 16 percent of the state’s pension fund money into the state of Alabama. They think the RSA’s chief, David Bronner, should send the money to Wall Street instead.

I am a political scientist with research publications on the U.S. Congress, market morality and other matters. Over the years, I’ve witnessed many examples of legislative committees soliciting advice in hearings from ideologically aligned specialists they believe will give them public-relations cover for tax-policy adjustments beneficial to their partisan support groups. This is a defective approach to policy-making. It has a pretense of democratic fact-finding, but a reality of ideological agenda-setting.

A far-sighted evaluation of the RSA’s approach to in-state investment shows the pragmatism and wisdom of Bronner’s approach. The Alabama Legislature would err greatly to enact a standard limiting the RSA’s investments in Alabama. If Republican legislators take this step, some who normally vote Republican for in-state offices may use primary races to vote out short-sighted legislators and replace them with persons who better understand the big picture in economic development. Here is what the Pew Trust advisors miss. Bronner’s in-state RSA investments work to refurbish and polish Alabama’s image nationwide. Bronner’s world-class projects help keep Alabama in the hunt for respect, increased tourism and economic growth. Pew analysts have seemingly forgotten that Montgomery served as the capital of the Confederacy, Birmingham was widely perceived as a lightning rod for civil-rights abuses, and Tuscaloosa was the place where Gov. George Wallace took his infamous 1963 “Stand in the Schoolhouse Door.” I’ve lived in six states outside the Southeast and understand the public-image challenge Alabama faced until the RSA’s in-state investments began raising Alabama’s national standing. More:


Morning Money

HAPPY GLASS-STEAGALL REPEAL ANNIVERSARY — Today is the 16th anniversary of the repeal of Glass-Stegall through the Graham-Leach-Blilely Act. And John Reed, former CEO of Citi, the bank that helped push it through, no longer thinks it was such a hot idea. Reed writes in the FT: “[W]e were wrong about some things, and others we failed to anticipate. Two stand out. One was the belief that combining all types of finance into one institution would drive costs down — and the larger the institution the more efficient it would be. We now know that there are very few cost efficiencies that come from the merger of functions …

“The second thing we were wrong about has to do with culture — and this turns out to be very serious. Mixing incompatible cultures is a problem all by itself. It makes the entire finance industry more fragile. … I think the lessons of Glass-Steagall and its repeal suggest that the universal banking model is inherently unstable and unworkable. No amount of restructuring, management change or regulation is ever likely to change that.”

BIG DAY FOR FED SPEAK — HFE’s Jim O’Sullivan: “Six out of 17 Fed officials are scheduled to speak on Thursday. New York Fed President Dudley said the following earlier this year: ‘I expect that the trajectory of short-term interest rates after liftoff will likely be relatively shallow.’ He will probably say something like that again when he speaks before the Economic Club of New York on Thursday”

MORE DEBATE GRADES — Capital Alpha Partners’ Loren Smith emails: “In rough order of win: Marco Rubio: Looked great and sounded great as always … not quite as shiny as previous – kind of an odd non-sequitur when Rand hit him on giving out welfare in the form of refundable tax credits and Marco hit back that Rand was an isolationist. If Jeb did well enough to survive through Christmas, that delays Rubio’s ability to consolidate the establishment wing. But overall Rubio is winning and doing well.

“Ted Cruz: Did well. Probably won the messy exchange on immigration with Trump-Kasich-Jeb with the cleanup statement that the GOP can’t be like the Dems. Cruz continues to seem like the eventual conservative alternative. Donald Trump: Did fine. Dialing back the insults a little bit. If he’s really sagging in the polls, I doubt this helps; if he’s holding steady, this will keep him there. … Jeb Bush probably lowered the blood pressure among his top backers, but gosh, he just looks so nervous”

M.M. SIDEBAR — The eventual Rubio-Cruz showdown for the nomination that we’ve written about before seems more likely than ever. And if that’s what it comes down to, Rubio probably wins. But no guarantee. And it’s not impossible, As Bill Scher writes here, that Bush could stage a John Kerry-like comeback.

And here’s more on the coming Cruz-Rubio smackdown:

M.M. WAY BACK MACHINE: JON HUNTSMAN EDITION — Mark McIntosh, Jon Huntsman’s 2012 issues director, emails: “[A] big part of his platform was breaking up the big banks. This was before Warren came on to the scene. It was also the original issue that inspired the tea party. This was a conservative issue before the D’s hijacked it.”

DRIVING THE DAY — At 9:30 a.m., Federal Reserve Chair Janet Yellen delivers welcoming remarks at the Conference on Monetary Policy Implementation and Transmission in the Post-Crisis Period at the Fed … Initial jobless claims at 8:30 EST a.m. expected to dip to 270K from 276K … JOLTS Report at 10:00 a.m. expected to show openings up 1.5 percent to 5.45M …

TRUMP ON FOX — GOP presidential candidate Donald Trump will be on Mornings with Maria on Fox Business Channel during the 7 a.m. hour.

BUSH PLANS BIG DC FUNDRAISER — POLITICO’s Alex Isenstadt: “Jeb Bush, who recently slashed staff salaries and fired consultants amid mounting financial woes, is planning a major Washington, D.C., fundraising event that organizers hope will help fill his campaign’s depleted coffers. … Those involved with the planning of the event, which is to be held on the evening of Dec. 3 at the home of former Ambassador Boyden Gray, said it would be one of Bush’s largest Washington fundraisers since he formally launched his candidacy last summer.

“According to an invitation obtained by POLITICO, the host committee for the event includes over two dozen current members of Congress and over 60 lobbyists, fundraisers, and financial players. Among the names listed on the invitation are Sens. Susan Collins and Orrin Hatch and House Rules Committee Chairman Pete Sessions. Also included are Bush family loyalists such as former Energy Secretary Spencer Abraham, former Transportation Secretary Maria Cino, and former George W. Bush Chiefs of Staff Andy Card and Josh Bolten. Former House Majority Leader Eric Cantor is also listed”

RYAN: NO TAX DICTATORSHIP — POLITICO Pro’s Toby Eckert: “House Speaker Paul Ryan today indicated that he wouldn’t try to dictate a tax reform package from his new perch … ‘It can’t just be a Paul Ryan tax reform. It has to be Republican tax reform by the Republican Ways and Means Committee and the Senate Finance Committee.” Ryan also said he ‘would love to see’ international tax reform in 2016 and that ‘everything should be on the table’ in tax reform talks, even a flat tax.”

APPLE LOOKS TO VENMO KILLER — WSJ’s Robin Sidel: “Apple Inc. is in discussions with U.S. banks to develop a mobile person-to-person payment service that would compete with PayPalInc.’s popular Venmo platform … The talks are ongoing, and it is unclear if any of the banks have struck an agreement with Apple … Key details remain in flux, including technical aspects that would determine how the service would tie into the banking industry’s existing infrastructure …

“The service under consideration would allow consumers to zap payments from their checking accounts to recipients through their Apple devices. The service would likely be linked to the company’s Apple Pay system, which allows customers to make credit-card and debit-card payments with their mobile phones. A launch isn’t imminent, but one person said such a service could get off the ground next year. Apple has been talking with a number of banks about the service, including J.P. Morgan Chase & Co., Capital One Financial Corp.,Wells Fargo & Co. and U.S. Bancorp.”

FOX BIZ SCORES HIGH RATINGS — NYT’s Emily Steel: “Fox Business Network long has stood in the shadow of its much larger and louder sibling, Fox News Channel, and its outsize personalities like Bill O’Reilly. And in the financial world, the network consistently trails its competitor CNBC in television ratings. … On Tuesday night, Fox Business Network stepped into the spotlight with its broadcast of the fourth Republican presidential debate in Milwaukee, attracting 13.5 million viewers, according to Nielsen data — the largest audience in its eight-year history.

“The network received generally positive reviews for its handling of the debate … The viewership was a standout for the network but less than that for previous debates in the 2016 presidential race. Earlier debates on Fox News and CNN drew more than 23 million viewers … Tuesday’s G.O.P. debate was the first ever for Fox Business Network and one of its biggest moments since its start in October 2007. At the time, Rupert Murdoch’s News Corporation was in advanced talks to acquire Dow Jones & Company, the publisher of The Wall Street Journal, for about $5 billion.”

BOND TRADERS LOSE OUT AT BONUS TIME — FT’s Ben McLannahan and Kadhim Shubber in New York: “Bond traders are set to miss out on a general trend of modest pay rises for bankers this year, according to a survey that highlights the waning influence of fixed-income departments within the biggest global banks. The survey, to be released in coming days by Options Group, a New York-based recruiter, found that senior staff within fixed-income, currencies and commodities (FICC) divisions around the world are on course to earn an average 4 percent less this year than they did in 2014, with particularly sharp falls for staff in securitised products (-17 percent) and credit (-15 percent). …

“In cash equities, however, total pay is set to rise by 7 percent, while equity derivatives staff are set to pick up 11 percent more than last year. In investment banking and wealth management, too, average pay is set to rise by 5 percent and 6 percent, respectively. According to Mike Karp, chief executive of Options Group, the figures are a sign of tougher times for FICC departments, which have been squeezed by tighter regulation and a general push to conserve capital. For years, FICC departments had been the powerhouse, accounting for just under half of total revenues in 2009 at Goldman Sachs, for example”

POTUS Events

11:15 am || Awards Captain Florent A. Groberg, U.S. Army (Ret) the Medal of Honor; East Room

All times Eastern
Live stream of White House briefing at noon

Floor Action

We’ll be seeing you next week.