Exclusive: U.S. considers supporting new U.A.E. push against al Qaeda in Yemen
The United States is considering a request from the United Arab Emirates for military support to assist a new offensive in Yemen against al Qaeda’s most dangerous affiliate, U.S. officials tell Reuters. A U.S.-backed military push by the Gulf ally could allow the administration of President Barack Obama to help strike a fresh blow against a group that has plotted to down U.S. airliners and claimed responsibility for last year’s attacks on the office of Charlie Hebdo magazine in Paris. Al Qaeda in the Arabian Peninsula (AQAP) has exploited the chaos of Yemen’s year-old civil war to become more powerful than any time in its history, and now controls a swathe of the country. The UAE has asked for U.S. help on medical evacuation and combat search and rescue as part of a broad request for American air power, intelligence and logistics support, the U.S. officials said. It was unclear whether U.S. special operations forces – already stretched thin by the conflicts in Iraq, Syria and Afghanistan – were part of the request. The U.S. officials, speaking on condition of anonymity, said the UAE was preparing for a campaign against AQAP, but declined to offer details, citing operational security. The UAE is playing a key role in the Saudi-led coalition fighting Houthi rebels in Yemen that are loosely allied with Iran. The White House and the Pentagon declined to comment. Government officials in the UAE did not respond to request for comment. Washington’s consideration of the request comes ahead of Obama’s planned trip next week to a summit of Gulf leaders in Saudi Arabia. The multiple conflicts in Yemen will be high on the agenda. Saudi-backed Yemen government forces and the Houthi fighters began a tentative truce on Sunday, although there have been reports of violations. Despite significant U.S. strikes, including one that killed AQAP’s leader last year, U.S. counter terrorism efforts have been undermined by Yemen’s civil strife. The worsening conflict forced the evacuation in early 2015 of U.S. military and intelligence personnel who had orchestrated an anti-AQAP campaign involving Yemeni special forces raids backed by U.S. air power. Renewed ground operations spearheaded by UAE special forces would fit the so-called “Obama doctrine” of relying mostly on local partners instead of large-scale U.S. troop deployments. Washington’s use of surrogate fighters has been criticized as inadequate in conflicts ranging from Iraq to Syria to Afghanistan.
Policymakers fret as storm clouds gather over world economy
World financial leaders sounded a sour note on the global economy on Thursday, pointing to Britain’s possible exit from the European Union as a serious threat alongside China’s bumpy growth path and dissent over interest rates in the euro zone. Concern that British voters are edging closer to leaving the EU in a June 23 referendum has spooked finance ministers, central bankers and other officials gathered here for the International Monetary Fund and World Bank spring meetings. IMF Managing Director Christine Lagarde signaled policymakers’ heightened fears that a “Brexit” could derail Europe’s shaky economic recovery and reverberate further afield. “We have clearly elevated ‘Brexit’ as one of the serious downside risks on the horizon of global growth,” Lagarde said in a press conference just two days after the IMF cut its 2016 global growth forecasts for the fourth time in less than a year. Lagarde, who said it was her personal hope that Britain remain in the EU, predicted a divorce would lead to years of financial uncertainty. EU Economic and Monetary Affairs Commissioner Pierre Moscovici chimed in at a separate event, describing the political repercussions of a British vote to leave the bloc as “very bad news.” Their comments followed the Bank of England’s clearest warning yet that Britain’s economy would likely suffer and its currency slide if it bolted from the EU. Moscovici added that the near-term European growth outlook was already worsening. “Overall, we now expect GDP growth in the first quarter of this year to have been positive but slower than we had expected,” Moscovici said in a speech at the Peterson Institute for International Economics.
Yahoo’s Suitors Uncover Few Financial Details
SAN FRANCISCO — As Yahoo prepares to accept first-round bids for its core Internet business on Monday, potential buyers have found themselves facing one big problem: How do you value a company with a declining business when the company appears reluctant to share vital financial details? In meetings and phone calls with potential bidders, Yahoo executives have offered gloomy financial projections for the current year, but have refused to discuss the outlook for 2017 or answer questions about crucial aspects of the business. Some of the three dozen or so potential suitors have even questioned what is truly for sale. But several big companies are expected to place bids for Yahoo anyway, according to people briefed on the matter. Verizon Communications, which has publicly expressed interest in buying Yahoo’s core Internet business and merging it with its AOL division, plans to press forward with a bid, some of these people said. The Daily Mail, a British tabloid newspaper and website, said publicly that it had considered joining with potential investors, including one or more private equity firm, for a bid. And the private equity firm TPG plans to make a bid in the first round on its own, according to a person briefed on the matter. Yet other huge companies plan to sit out the bidding. Google, which competes with Yahoo on search and display advertising and has a search partnership with the company, considered making an offer, but is unlikely to proceed because it fears any deal would draw stiff antitrust scrutiny, according to people briefed on the company’s thinking. Other notable businesses, including AT&T, CBS and the investment firms Silver Lake, Kohlberg Kravis Roberts and General Atlantic, are unlikely to bid, according to others briefed on their plans. And SoftBank, the Japanese telecommunications giant that controls Yahoo Japan, does not plan to bid despite press reports to the contrary.
Bear Stearns Emails Show Its Financing Breaking Away
Within weeks of the shocking collapse of Bear Stearns in March 2008, I started interviewing former executives of the firm to try to figure out what had just happened and why. One of those executives was Paul Friedman, a senior managing director who had been at the firm for 27 years and who oversaw Bear’s fixed-income repo desk. His job, especially in the last year or so of Bear’s existence, was to make sure the company could finance itself on a daily basis in the short-term debt markets. While Bear had about $18 billion in cash on its balance sheet, it needed more than $75 billion in cash on a daily basis to keep operating. For years, making sure that amount was on hand had been a perfunctory, check-the-box assignment. That all changed in the summer of 2007, when two Bear Stearns-related hedge funds collapsed and Bear liquidated them. Short-term lenders began to question the judgment of Bear’s management, and Mr. Friedman was on the front lines of gauging how the market viewed the firm as a credit risk. He quickly discovered, much to his dismay, that Bear had become a pariah. After the final Bear Stearns shareholder meeting, on May 29, 2008, Mr. Friedman told me, in no uncertain terms, that he believed the firm got what was coming to it. “We’re the bad guys,” he said. “We did this to ourselves. We put ourselves in a position where this could happen. It is our fault for allowing it to get this far, and for not taking any steps to do anything about it. It’s a classic case of mismanagement at the top. There’s just no question about it.” But times and perspectives change. When Mr. Friedman appeared before the government’s Financial Crisis Inquiry Commission two years later, Phil Angelides, the commission’s chairman, asked about his comments to me that Bear had been responsible for its own downfall. Much to my surprise, under oath and on national television, Mr. Friedman walked back the statement. After explaining to Mr. Angelides how shocking it was to watch the firm he had worked at for 27 years suddenly implode, he said, “I was angry. I was interviewed over a period when I was looking to find someone to blame. I lashed out.” He apologized and said he had been regretting what he told me two years earlier.
The Winds From Washington Chill Wall Street’s Deal Making
On Wall Street, the phones have been a little quieter. The workload has been a little lighter. The happy hours have been starting earlier. For most people, that would be a good thing. But not for deal-hungry lawyers and bankers, who are experiencing a recent slowdown in megadeals. A series of broken transactions and stock-market volatility have shaken the confidence of some in the boardroom to tackle their next big acquisition. The value of abandoned deals has been higher than that of newly signed deals in the United States so far this year. Almost $340 billion worth of mergers have been withdrawn in 2016, while $282 billion worth of newly signed deals were announced, according to data compiled by Dealogic. The cancellations are skewed toward megadeals, defined as those worth $10 billion or more. Of the 26 deals pulled so far this year, including Pfizer’s $152 billion combination with Allergan, the average deal size is $13 billion, according to Dealogic. Another 2,800 deals have been announced, with an average size of $100 million. So the bigger acquisitions are being withdrawn, while the smaller ones are as active as ever. The divergence in the deal market comes largely as a result of a regulatory clampdown.
Over the last year, with shareholder encouragement, companies ventured into large, complex and risky deals. Last week, the government fought back, in a lawsuit by the Justice Department and new rules from the Treasury Department, to stop many of the transactions. One lawyer described a depression that set over mergers and acquisitions as a result of those two actions. A banker said that Wall Street had come to a grinding halt. These deal makers requested anonymity, so as not to be seen at odds with the government’s decisions. During an election year, advisers say, the big, politically unpopular deals may just have to wait. “Companies were concerned that their large deals would draw political focus and be criticized as part of the campaigning,” Marc-Anthony Hourihan, co-head of Americas mergers and acquisitions at UBS, said. Robert A. Profusek, who heads Jones Day’s global mergers and acquisitions practice, said, “The gargantuan deals, they’re harder; there’s no question in my mind.” “The government has been tougher, but they would say: ‘That’s because you guys have been jamming these giant deals at us. What do you expect us to do?’” Mr. Profusek said.
Goldman’s Blankfein Demands Deepest Cost Cuts in Years
Goldman Sachs Group Inc. is embarking on its biggest cost-cutting push in years as it tries to weather a slump in trading and dealmaking, according to two people with knowledge of the effort. The firm, already expected to report a steep drop in expenses for the first quarter, recently began dismissing more support staff and is increasingly rejecting bankers’ spending on airfare, hotels and entertainment unless it directly serves clients, the people said. For example, the company cut technology workers in London this week, one person said, and some employees in Europe aren’t being permitted to take once-routine trips to other offices in the region, said another. Additional cuts are likely. Chief Executive Officer Lloyd Blankfein, 61, is trying to ride out a years-long bond-trading slump that’s being compounded by market swings and stiffer regulations — challenges that have forced many competitors to scale back. He already has adjusted his workforce, relying more on junior bankers, moving support staff to cheaper locations and investing in technology to improve productivity. “They are getting even leaner,” said Chris Wheeler, analyst at Atlantic Equities LLP in London who has an overweight rating on the bank’s shares. “They have also reduced traders in the business as the electronification of the business increases and as they see credit, rates and commodities follow equities and foreign-exchange onto electronic platforms.” The question is whether his efforts will be enough to satisfy investors when the bank reports quarterly results Tuesday. Betsy Graseck, a Morgan Stanley analyst, estimates Goldman Sachs will say operating expenses declined 29 percent to $4.76 billion — the lowest for the start of a fiscal year in a decade. Still, that’s not as steep as the 37 percent drop in revenue that analysts anticipate. More:
Regulators: Federal Preemption of State Blockchain Laws Unlikely
A member of the Federal Deposit Insurance Corporation (FDIC) and three state-level regulators discussed blockchain technology at a panel today centered on the future of US FinTech policy. Held at the Blockchain & Distributed Ledger Technology Conference in New York City, the panelprovided a window into the complicated series of exchanges – ranging from state-level interactions with citizens to potential top-level federal regulation – that are influencing this discussion. FDIC associate counsel Adriana Rojas said that while her agency wants to take a leadership position, its interaction with state controllers and private institutions is still in early stages. Rojas told the audience: “We need to be proactive. We need to come to these conferences. I think that’s how regulators can get in front of it. … We can’t regulate what we don’t know exists.” Apart from providing the FDIC’s view on the industry, the day’s panel was rare in that the audience was also given a chance to hear what three specific state representatives had to share on the matter. Alabama – The sharp discrepancies in how states are treating bitcoin and blockchain firms was perhaps best on display during a talk by Joseph Borg, director of the Alabama Securities Commission, an independent agency that works with government regulators. Borg said his state is currently receiving applications from industry businesses that “run the gamut” from refined business models, to amateur or even legally dubious proposals. Though one or two inquiries have come from entrepreneurs using an alternative digital currency, “only bitcoin” companies have submitted actual applications, he said. Borg continued: “The industry is fragmented as far as we’re concerned. Many people want to play in the sandbox but many of them aren’t designed to play in the sandbox.” Borg has been with the Alabama commission for 21 years and says that partnerships have been crucial to his organization’s work to understand the still-developing industry. In addition to attending a training session about blockchain taught by the FDIC, he says the commission has “agreements” with FinCEN, the US Treasury and the Consumer Financial Protection Bureau (CFPB). More:
Retirees Rally at the Capitol, Protesting Pension Cuts
WASHINGTON — Some 400,000 retirees who worked in the trucking, parcel delivery and grocery supply industries face drastic pension cuts on July 1 as a result of a little-noticed measure attached to a huge end-of-year spending bill passed in December 2014. Many members of Congress say they were not given the time to read the provisions or did not grasp the ramifications at the time, and they now say they would not have voted for the legislation. The bill allowed trustees of multi-employer retirement plans to slash benefits if a pension fund’s failure was likely to overwhelm the underfunded Pension Benefit Guaranty Corporation, the federal government’s main insurance program for pension plans. The retirees, all beneficiaries of the Central States Pension Fund, which is projected to be insolvent within a decade, were informed of the reductions through letters that began arriving in the mail last October. In many cases, the July 1 cuts would be severe. James Lambert, 69, a former trucker, from Randolph, Ohio, was told his $2,200 monthly pension payment would be slashed to $1,200. Bob Berg, 61, of Hendrum, Minn., who drove a UPS delivery truck for 30 years, was informed that his current monthly payment would drop from $2,200 to $1,150. And Judy Weeks, 62, of Davenport, Iowa, went back to work almost immediately after retiring when her husband, Terry, a former grocery store warehouse worker, learned his benefit would drop from $3,000 to $1,258. They were among hundreds of people who rallied in front of the Capitol on Thursday chanting “No cuts!” — and who were joined by members of Congress who readily acknowledged that working Americans had been let down by the people who represent them.
“I am not sure I have ever seen anything that is so wrong as this pension cut,” said Senator Heidi Heitkamp, Democrat of North Dakota. Representative Marcy Kaptur, Democrat of Ohio, said, “I can tell you as someone who has served here for over three decades now, it’s not on the level. You should know that when the decision was made to force your pension cuts, that bill did not come up under regular order. It never, ever had its own day in the sun.” By law, the cuts must be approved or rejected by the Treasury Department, which in the face of outcry has now turned for help to Kenneth R. Feinberg, the lawyer who administered compensation related to the Sept. 11 attacks and the BP oil spill in the Gulf of Mexico.
Mr. Feinberg has been given a May 7 deadline to make a decision. The law also contains provisions that require beneficiaries to vote on accepting the cuts, and a quirky rule that counts any beneficiaries who do not submit ballots to be in favor of the cuts. At Thursday’s rally, the outrage focused on the seeming lack of political will from Congress to rescue a pension plan that had promised retirement benefits to middle-class workers, even when the same Congress was willing to bail out major financial institutions during the 2008 financial crisis. The workers blamed some of the same Wall Street banks that needed bailouts for the poor investment decisions that sent the Central States Pension Fund hurtling toward insolvency.
The bill at the center of the controversy, the Multistate Employer Pension Reform Act, was largely intended to protect the Pension Benefits Guaranty Corporation, which was at risk of being pushed into insolvency by large numbers of pension failures. The plight of the Central States Pension Fund beneficiaries is proving a potent issue in states with some of the most hotly contested Congressional races, including Ohio and Wisconsin, where tens of thousands of people are at risk of their pensions being reduced, many of them members of the Teamsters union. Senator Rob Portman, Republican of Ohio, who is up for re-election, has spoken out in support of the pensioners and introduced legislation that would change the voting process on any required cuts. But Mr. Portman, who is known as a fiscal conservative, has stopped short of calling for legislation that would immediately inject cash into the Central States fund.
Fiduciary Rule Won’t Solve Retirement Savings Crisis
The latest numbers on the U.S. retirement crisis are in, and they point to a massive opportunity for financial planners if they can meet the challenge of providing unbiased retirement advice in a new fiduciary world. The annual survey of retirement confidence from the Employee Benefit Research Institute (EBRI) released in March suggests workers are more optimistic than they’ve been since the Great Recession. The Retirement Confidence Survey (RCS) found that 21 percent of workers this year are very confident about their retirement prospects, compared with 13 percent in 2013. Those who are somewhat confident rose to 42 percent, up from 38 percent in 2013. But their confidence is driven by rising confidence in the macro economy, not improving retirement prospects at the individual household level. Fifty-four percent of households have saved less than $25,000—and within that group, 26 percent have less than $1,000. The saving levels are better for older workers. Among workers aged 55 or higher, 30 percent have saved more than $250,000 and 15 percent between $100,000 and $249,000. But even within this group, 33 percent have less than $25,000. Just as troubling, most of the RCS respondents don’t have a good grasp of retirement planning basics. Consider the numbers: More:
Pork Served Up on Hill as Pig Sleeps
Lawmakers and a live pig in an American flag hat joined forces on Wednesday to expose pork-barrel spending in this year’s Congressional Pig Book. This year is the 24th edition of the Citizens Against Government Waste’s book, which documents spending on questionable projects that lawmakers inserted into the budget. The release is especially timely due to the attempts to restore earmarks from both sides of the aisle, according to the organization. “The American people don’t believe we’ve made significant progress in eliminating waste here in Washington, D.C.,” Arizona Republican Sen. John McCain said, describing the rise of outsider candidates in this election at a news conference at the Phoenix Park Hotel.
The defense hawk spoke on the waste that occurs in the Defense Appropriations bill, including a push by Sen. Richard Shelby, R-Ala., for $225 million worth of Navy vessels “that the Navy neither needs, nor wants.” McCain also spoke on the inclusion of medical research in the same bill. “No one is opposed to medical research,” he said. “I’m opposed to medical research funding being put in a Defense Appropriations bill.” Arizona Republican Sen. Jeff Flake has his own personal favorites when it comes to what he considers government waste. He said his office has a tournament-style bracket of waste, and the top ones include money for the East-West Center in Hawaii that “the State Department said they don’t want” and a rapid bus system in Aspen, Colo. In 1960, Congress created the East-West Center for education and research in the relationship between Asia and the U.S. “We must cut this out-of-control spending … if we are ever going to get the debt under control,” said fellow Sen. Joni Ernst, R-Iowa.
While the lawmakers spoke, the pig in the back of the room roamed around. But, at one point, Rep. Mick Mulvaney, R-S.C., pointed out that it had fallen asleep. “I’ve spoken in some really tough rooms but, I’ve never spoken in a room where the pig fell asleep,” he said. House Republican Study Committee Chairman Bill Flores touted the panel’s conservative budget proposal rolled out last month. “We also know that talk is not enough,” he said.
In Democratic Debate, Clinton and Sanders Spar Over Judgment
Senator Bernie Sanders, seizing on potential vulnerabilities for Hillary Clinton in the coming New York primary, repeatedly savaged her ties to wealthy donors and Wall Street banks during their debate on Thursday night, delivering a ferocious performance that Mrs. Clinton countered with steely confidence and her own sharp elbows. Mr. Sanders, hoping to humiliate Mrs. Clinton in her adopted home state in Tuesday’s primary, bluntly challenged her fitness for the presidency, saying she had the experience and intelligence for the job but adding, “I do question her judgment.” He listed her most controversial actions over the years, from voting to authorize the American invasion of Iraq to supporting some free-trade deals and taking $675,000 in speaking fees from Goldman Sachs. While he did not repeat his recent remark that she was unqualified to be president, he constantly edged up to the line. “Do we really feel confident about a candidate who says she will bring change in America when she is so dependent on big money interests?” Mr. Sanders asked. “I don’t think so.” Mrs. Clinton fought back hard, especially in a fierce exchange over Israel, as the two candidates played to a rambunctious and roaring audience at the Brooklyn Navy Yard: a classic New York crowd that interrupted, booed and cheered in sports arena style, creating a highly charged atmosphere. The forum also revealed the increasing animosity between Mr. Sanders and Mrs. Clinton, who no longer offer each other the polite rejoinders and carefully couched criticisms that characterized the early part of the campaign. Feisty and frequently sarcastic, Mr. Sanders could barely contain his disgust with Mrs. Clinton’s ties with Wall Street, a ripe target among liberals in New York City and in economically depressed upstate regions. After Mrs. Clinton said she had stood up to bankers and “called them out” on their shaky financial practices before the recession, Mr. Sanders delivered his retort with the flair of a veteran Broadway actor.
Board Recommends Parole for Charles Manson Follower Leslie Van Houten
A California review board recommended parole Thursday for former Charles Manson “family” member Leslie Van Houten, who was convicted along with other members of the cult in the 1969 killings of Leno and Rosemary LaBianca. Van Houten, 66, had been denied parole 19 times by the state parole board since being convicted of first-degree murder and sentenced to life in prison. After the two commissioners on the panel issued their decision at a hearing at the California Institution for Women in Chino, Van Houten said she felt “numb,” according to her attorney, Richard Pfeiffer. “The opposition to parole has always been the name Manson,” Pfeiffer said. “A lot of people who oppose parole don’t know anything about Leslie’s conduct. Her role was bad. Everyone’s was. But they don’t know what she’s done since then and all of the good she’s done.” The ruling will be reviewed by the parole board’s legal team. If upheld, it will be forwarded to Gov. Jerry Brown, who could decide to block Van Houten’s release. A spokesman for the governor said Thursday that it would be premature for his office to comment.
Cory LaBianca, who was 21 when her father, a wealthy grocer, and stepmother were slain in their Los Feliz home, said she was disappointed by the parole board’s decision and planned to lobby the governor to reject Van Houten’s release. “Maybe Leslie Van Houten has been a model prisoner,” Cory LaBianca said. “But you know what? We still suffer our loss. My father will never be paroled. My stepmother will never get her life back. There’s no way I can agree with the ruling today.” Los Angeles County Dist. Atty. Jackie Lacey, whose office argued for Van Houten to remain behind bars, also expressed disapproval in a statement: “We disagree with the board’s decision and will evaluate how we plan to proceed.” More:
My Night at the Playboy Mansion With Donald Trump
The last time I saw Donald Trump, he was screaming at me on stage at the Hollywood Bowl.
In 2006, I was a contestant on Season 6 of The Apprentice, the NBC show in which 18 contestants competed for a managerial job working for Donald Trump, the program’s host. Each week, members of the losing team would be called to Trump’s boardroom where at least one would be “fired.” I lasted eight episodes. At the season finale, those of us cast off in earlier episodes were brought back to witness the spectacle of the winning “apprentice” being chosen before an audience, in a live broadcast. Sitting onstage in a fake boardroom set, Trump asked the former contestants for their opinions on which finalist he should hire, turning finally to me before announcing his decision. I jokingly suggested that he choose Sanjaya, the goofily flamboyant singer then enjoying a run on American Idol. I meant it as a quip about the triviality of the whole self-serious reality-audition process. It was live TV, so I couldn’t be edited out.
Moments after we went off-air, with the stage full and audience members still exiting their seats, Trump spotted me and jabbed a finger at my face. “What was that?,” he barked. I told him the truth: I had nothing nice to say about either of the finalists, and rather than insult them, I went for humor. Humor was not, apparently, welcome in the boardroom. “Well, it wasn’t funny,” Trump snapped, his face inches away from mine. He stormed off. Up to that point, I felt I had been on Trump’s good side. It’s true that he’d fired me, but he fires most people on the show, and some of them have gone on to be his biggest boosters. Somewhere in my parents’ house, there’s even a personal post-firing letter from Trump, encouraging and complimentary. So naturally, I was taken aback when my joke turned into an onstage browbeating.
Alabama woman keeps resurrecting shoddy day cares in God’s name
This story was produced and written by Reveal from The Center for Investigative Reporting. Learn more at revealnews.org and subscribe to the podcast, produced with PRX, on iTunes. She’s been called a crook. A con artist. A snake in the grass. But in Alabama, the only thing that really matters to state regulators is that she calls herself a Christian. She ran a church day care from a decrepit warehouse that one worker called a “house out of a horror movie.” She opened another child care center next to a porn store. Each of her day cares has been dogged by complaints of abuse and neglect. Workers said she hit children with flyswatters, locked them in closets or rapped them with rulers. She’s failed to pay so many employees that one reportedly slapped her in the face and another threatened to hurl a pickle jar at her, according to police reports. She has been arrested multiple times, for crimes ranging from theft to child endangerment. In total, Deborah Stokes has operated at least a dozen Christian day cares across southern Alabama. Every time she is chased out of town by furious parents, workers or landlords, she reopens in the next town over. In the process, she has collected at least $86,000 in taxpayer funding to run her day cares with almost no oversight. She doesn’t need a license. She doesn’t need a curriculum or qualified workers. All she needs is a building with a roof, desperate parents and a piece of paper saying she runs a church. In 16 states, day cares that claim to be religious get a pass on certain licensing rules. Alabama offers religious day cares the most freedom of any state, shielding them from most government oversight. Reveal from The Center for Investigative Reporting found no evidence that Stokes’ church, which she founded, holds services or performs outreach. The ministry’s address changes often, to Stokes’ new day care or her rental home. But by saying that her day cares are religious, she has remained virtually untouchable for a decade. Police, county health officials, building inspectors, city council members and throngs of angry parents and former employees have done everything in their limited power to shut down Stokes for good. All of them have failed. “I wouldn’t trust her with a glow stick, let alone a child,” said Kimberly Nicole Hinman, a former employee at one of Stokes’ day cares. “But she says she’s a Christian, and people trust her.” A Reveal investigation found that the religious exemption has become a safe haven for dangerous day care operators who can’t stay out of trouble. Combing through records around the country, we identified at least 80 operators who rebranded themselves as religious – sometimes just days after regulators took the extreme step of shutting down their licensed day cares. In Alabama, 13 day care operators lost their licenses from 2004 to 2014; three reopened as religious entities. After that, the trio faced almost no oversight: More:
Gov. Robert Bentley, Rebekah Mason flew to Vegas, attended Celine Dion show
On Nov. 17 of last year, Gov. Robert Bentley boarded a state airplane for Las Vegas, along with his former political adviser Rebekah Caldwell Mason, communications director Jennifer Ardis, Deputy Chief of Staff Jon Barganier and his security detail. They went to attend the Republican Governors Association Annual Conference. Oh. And to catch a show. They didn’t have to think twice before going to the Colosseum at Caesar’s Palace for an elaborate concert by Celine Dion. Bentley went backstage and made Dion an honorary Alabamian. He posed for pictures with her, which he showed around the office – along with backstage passes for which he was ungubernatorially proud. Mason and Ardis posed for pictures, too. The concert was “amazing,” Ardis said. Bentley’s staff argues that there is no foul. Ardis said Bentley himself paid for all the Celine Dion tickets, and the Republican Governors Association reimbursed the Bentley campaign for the cost of the conference and the flight. The campaign reimbursed the state, and no taxpayer money was used, she said. She did provide a copy of a deposit to the state of Alabama in the amount of $11,641.35. It was dated March 25 of this year. It came almost 19 weeks after the trip. And it came 3 days after former Alabama Law Enforcement Agency chief Spencer Collier went public with claims that Bentley and Mason had been engaged in an affair, and that Bentley had been warned that using state or campaign assets to carry out an affair could be illegal. Ardis said the Republican Governors Association wired Bentley’s campaign the reimbursement. She said she does not know why there was a delay or when the payments will appear on campaign finance reports. Attempts to reach the RGA to confirm the amount and the scenario were unsuccessful Thursday. But the concert – and the money – are just part of the issue. Some who have been close to the governor claim Bentley boasted prior to the trip of wanting to use Las Vegas to get some personal time with Mason. More:
VictoryLand’s McGregor could take case to U.S. Supreme Court
VictoryLand owner Milton McGregor said Thursday that he won’t apply for a rehearing before the Alabama Supreme Court, which ruled two weeks ago that electronic bingo games being played at McGregor’s casino were illegal slot machines. Instead, McGregor is taking his case to the people. And then, if necessary, to the U.S. Supreme Court. “There is no need to go before that corrupt Bob Riley court again, because everyone in the state knows what the outcome would be,” said McGregor, referencing the former governor who started the state’s crackdown on electronic bingo casinos. “For them, it’s not about the law,” McGregor continued. “If they truly cared about the law, they would have allowed us to present oral arguments. They didn’t have the decency to even respond to our request. Instead, they hid in the shadows behind closed doors and come up with a ruling that was purely political.” The Alabama Supreme Court overturned a Montgomery Circuit Court judge’s ruling in the case, which was a civil forfeiture hearing to determine if the state had the right to keep more than 1,000 electronic bingo machines and over $200,000 in cash seized from VictoryLand during a 2013 raid by the state’s attorney general’s office. Circuit Court Judge William Shashy originally ruled last June, and then again in October, that the state had treated VictoryLand unfairly by singling it out for prosecution and stated that the voters in Macon had knowingly approved electronic bingo when they passed a 2003 constitutional amendment. More:
State legislator vows to introduce bill requiring all day cares to be licensed after reading Reveal story on AL.com
A story produced and written by Reveal from The Center for Investigative Reporting published on AL.com this morning took a deeper look at the negligent and even abusive Alabama day cares that benefit from religious exemption loopholes in state law. After reading the story, State Rep. Patricia Todd announced she would present a bill next week to require all day cares to be licensed and regulated. “We should not have any unlicensed childcare centers,” said Todd, D-Birmingham. “We license tattoo parlors and want to license barbers. “What is more precious than a child? That should be our top priority.” The story, published by AL.com and produced by Reveal from The Center for Investigative Reporting, comes after a series of AL.com stories in the past year about the state’s religious exemption for day care centers. State law allows day cares that operate as part of a church to go unregulated, uninspected and unlicensed by the Alabama Department of Human Resources. Alabama offers the least regulation of any state over religiously-affiliated day care centers. Because DHR is not allowed to investigate or reprimand those centers, in some instances gross negligence and abuse of children has gone unchecked.
Todd spoke with legislative services today and asked for a bill to be drafted that she could introduce next week. She admitted it’s unlikely the bill will pass during this legislative session since the session is nearly over. DHR would need additional funding to be able to inspect and regulate the additional 900 or so day cares that are currently license-exempt, and the state budget has already passed. But, she said, a bill now could open the door to a stronger bill during the next legislative session.
Rotten day cares don’t hide behind God, just the Alabama Legislature
In Alabama there are real problems and there are imaginary problems. The state’s ban on hunting over baited fields is an imaginary problem, but that hasn’t stopped some lawmakers from trying make it legal to hunt over a big pile of corn. Lane Cake is an imaginary problem, and yetevery year the Alabama Legislature considers the same resolution to make it the Alabama state dessert. If they’d just pass the thing so we could move on to more important imaginary matters, like the state appetizer or the state cocktail. Religious oppression in schools is an imaginary problem, too, which Rep. Mack Butler solved last year by passing a bill that made things like student-led prayer legal. By Butler’s own admission, everything his bill legalized was already legal, constitutionally protected and fully litigated before the United States Supreme Court. He just wanted to make those legal things even more legal. Lawmakers love imaginary problems because there’s no cost to them politically and little cost to the state financially, except when they invite federal court challenges. Real problems, on the other hand, cost money. Real problems take effort to solve. Real problems don’t lend themselves to State House grandstanding, nor do they yield the kind of constituent back-patting lawmakers crave. Alabama’s negligence when it comes to regulating and licensing religious affiliated daycares is a real problem. Alabama law doesn’t merely neglect state oversight of religious-affiliated daycares, it strains the muscles in its neck looking the other way. It’s as simple as this: In Alabama, a day care can invoke a religious exemption to the rules and regulations that apply to for-profit and other non-profit child care centers. As a result, hundreds of child care centers throughout the state operate without oversight. In some instances, operators who have been shut down by the state have reopened by hiding behind Alabama’s religious exemption. Let’s be clear here. We’re not talking about the state dictating curriculum. We’re talking about simple, basic stuff, such as ensuring these facilities have employees who know CPR and that they don’t hire convicted pedophiles to change children’s diapers. And let’s be clear about something else. This isn’t about targeting religious daycares for a greater degree of scrutiny. My wife and I recently put our new son in a church day care that, not only subjects itself voluntarily to much higher degrees of government scrutiny and accreditation, but also actively advocates for the state to close the religious day care loophole. When I take my son there each morning, there on the bulletin board where they post school announcements and notices about baby food recalls, is a poster. It says, “In Alabama tattoo parlors must be licensed. Child care centers don’t.” The reason my child’s daycare has stepped out on this issue is simple: Ensuring the safety and wellbeing of children is not a matter of religious freedom; it’s about the safety and wellbeing of children. We don’t exempt surgeons from being licensed to cut on patients because they work for religious affiliated hospitals. We don’t let lawyers practice law without passing the bar exam because of where they go to church. We don’t even let barbers and hairdressers cut hair — no, really, they have to be licensed in Alabama — because of which god they worship. But if you wanted to open your own daycare next to a porn store (this really happened) or staff it with child predators, you can do that, as long as you hide behind religion. Not only can you do that, but you can get government money when you do. Meanwhile, Alabama lawmakers would rather drug test food stamp recipients than require background checks on child care workers. When Alabama looks the other way, children get hurt. Sometimes, they die. When I started poking around this issue, I was relieved that lawmakers appeared to be closing the loophole. What else would something called the Alabama Child Care Provider Inclusion Act do? I should know better. Rather than protecting children from ne’er-do-wells and scofflaws, the bill, introduced by Rep. Rich Wingo, R-Tuscaloosa, doesn’t do any such thing at all. Instead, it would protect adoptions agencies that refuse to place orphaned or abandoned children with gay and lesbian couples. I felt naive because, for a moment, I thought our lawmakers wanted to fix a real problem. I guess I let my imagination get away from me.
Editorial: Don Siegelman deserves a pardon by Anniston Star Editorial Board
Over the course of 2015, President Barack Obama used the clemency powers of his office to free more than 100 federal prisoners, most of whom were nonviolent offenders who had been sentenced by overly harsh narcotics laws. The releases were, Obama said in late December, “another step forward in upholding our ideals of justice and fairness.” Those “men and women … had served their debt to society,” he said. More than 100 former state attorneys general are asking Obama to do much the same for Don Siegelman, the former Alabama governor who was convicted in 2006 on federal corruption charges. They have sent the president a letter. “Although nine years have passed, Gov. Siegelman’s unjust conviction continues to eat away at the integrity of the justice system,” reads part of the letter, which was delivered to the White House Wednesday. “Many legal scholars as well as the public at large believe that the prosecution of Gov. Siegelman was a perversion of justice.” The central charge against Siegelman, a Democrat elected in a heavily Republican state, boils down to this. As governor, Siegelman was looking to promote an election on whether or not the state should create a lottery. One generous contributor to the special lottery campaign fund was Richard Scrushy, the high-flying CEO of HealthSouth who wished to be appointed to a state hospital board. Bush-appointed federal prosecutors claimed Scrushy’s $500,000 contribution to the lottery campaign was the price to gain an appointment by Siegelman to the state board. Despite the lack of a smoking gun explicitly showing Siegelman sold a seat on the state hospital board, federal prosecutors won a conviction on their second attempt. The first one was abandoned by prosecutors over a dispute over evidence with the federal judge in the case. After he retired, that judge, U.W. Clemon, wrote that the “2004 prosecution of Mr. Siegelman in the Northern District of Alabama was the most unfounded criminal case over which I presided in my entire judicial career. In my judgment, his prosecution was completely without legal merit; and it could not have been accomplished without the approval of the Department of Justice.” It’s been firmly established that the Bush administration Justice Department wasn’t above playing politics. So, if the standard becomes politicians appointing contributors to valued posts, then plenty U.S. ambassadors will have to be brought home today. That’s a standard that isn’t confined to Siegelman. In fact, in 2013 Bloomberg News reported that 26 ambassadors appointed by Obama had contributed a total of $13.6 million to Democratic Party causes. We urge President Obama to heed the letter from the bipartisan collection of former prosecutors and pardon Don Siegelman.
DEM DEBATE WRAP — Tons of high-decibel Wall Street talk but not a whole lot of new ground between Hillary Clinton and Bernie Sanders in their feisty Brooklyn brawl on Thursday night. A few highlights.
Clinton on breaking up banks: “Dodd-Frank sets fourth the appropriate steps that need to be taken. I will appoint regulators tough enough … to break up any bank that fails the test in Dodd-Frank. … I have been standing up and saying continuously we have the law. We’ve got to execute under it. So you’re right, I will move immediately to break up any financial institution, but I go further because I want the law to the extend to those that are part of the shadow banking industry”
Sanders on breaking up banks: “I don’t need Dodd-Frank now to tell me that we have got to break up these banks, A.) because they’re based on fraudulent principles, and B.) because when you have six financial institutions that have assets equivalent to 58% of the GDP of this country, they were just too big, too much concentration of wealth and power.
Sanders, asked about his NYDN comments about letting banks decide what size to be: “Because I’m not sure that the government should say is you are too big to fail, you’ve got to be a certain size, and then the banks themselves can figure out what they want to sell off. I don’t know that it’s appropriate for the department of Treasury to be making those decisions. What we need is to make sure that they are safe.”
Sanders on Clinton “calling out” banks: “She called them out. My goodness, they must have been really crushed by this. And was that before or after you received huge sums of money by giving speaking engagements? They must have been very, very upset by what you did.”
Clinton on Sanders’ claims that she’s influenced by Wall Street money: “He cannot come up with any example because there is no example.”
INDUSTRY RESPONSE — Via Hamilton Place Strategies: “[T]he Democratic debate featured discussion on large banks’ living wills and whether to break up the banks. Once again, the debate failed to mention the following facts demonstrating the significant changes large banks have made to improve safety and soundness as well as ensure TBTF is over: Three of the six largest banks are smaller since 2007. Four are smaller since Dodd-Frank.
“Meanwhile, JPMorgan shrunk six percent last year. Legal entities have been reduced by 20 percent for the largest banks, simplifying the resolution process. Banks are committed to ensuring they can be resolved in the event of failure without damaging the economy. The living wills process is iterative. Dodd-Frank outlines a specific path for addressing regulatory requirements on living wills prior to forced to divestitures. Capital has than doubled, while liquidity has tripled since 2008.”
CHINA GROWTH SLOWEST IN SEVEN YEARS — Reuters: “China’s economy grew 6.7 percent in the first quarter from a year earlier, meeting expectations and at its slowest pace in seven years, although other indicators show the slowdown in the world’s second largest economy may be bottoming out. .. Analysts polled by Reuters had expected gross domestic product (GDP) to grow 6.7 percent, easing slightly from 6.8 percent in the fourth quarter and marking the slowest rate of growth since the first quarter of 2009, when growth tumbled to 6.2 percent.
“China’s economy grew 6.9 percent in 2015, its weakest rate in a quarter of a century. Analysts polled by Reuters expect the economy will lose more momentum this year, forecasting growth will cool to 6.5 percent even if Beijing ramps up fiscal spending and cuts interest rates again.” http://reut.rs/1Mx0x8q
HOUSE GOP PRESSES ON LEAKS — House Financial Services Chair Jeb Hensarling and Oversight subcommittee chair Sean Duffy wrote to the FDIC and Fed complaining about the leak to the WSJ on April 12th of regulators’ decision to reject the living will submissions of several large banks. The results were officially released on the 13th. Among other things, the letter asks for a list of all FDIC and Fed employees who had access to the results on April 12th: http://politi.co/1T7XS4e
MORNING MONEY RADIO — Catch me and Breaking Views’ Rob Cox on WNYC’s “Money Talking” chatting about money and 2016. http://bit.ly/1WuGbyB
MORE ON COST-BENEFIT ANALYSIS — St. John’s University School of Law professor Jeff Sovern emails: “Consumer protection agencies already use CBA. The Dodd-Frank Act directs the CFPB to ‘consider’ costs and benefits. The FTC has a Bureau of Economics which effectively institutionalizes CBA. Neither the CFPB nor the FTC can find a practice unfair unless they find that it causes ‘substantial injury . . . which is . . . not outweighed by countervailing benefits.’”
AND EVEN MORE! — From a former Hill aide: “‘Common sense’ regulation balances competing interests. For example, you could build the safest plane ever, with quadruple redundancies and every imaginable safety device possible. But, it would either be too heavy to fly or it would be so expensive to ride that only a select few could afford it. … ‘Reformers’ are always pointing to the trillions lost in the crisis — and rightly so.
“The problem is that they ignored their responsibility to develop a regulatory structure where both growth and stability are possible. They threw in all the supposed bells and whistles but the lumbering craft they built only has First Class seats. As such, most of those who lost the trillions have no chance to get it back. They left the economy class stranded in the terminal and all they have to offer as the 1% departs is ‘the old plane crashed.’ That is nonsense, not common sense.”
THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Sabrina Rodriguez on TTIP’s chances — and to get Morning Money every day before 6 a.m. — please contact Pro Services at (703) 341-4600 firstname.lastname@example.org
DRIVING THE DAY — IMF/World Bank meetings continue … Puerto Rico bill faces big moment in the House … U.S. Chamber hosts an event on comprehensive tax reform … Industrial production at 9:15 a.m. expected to decline 0.1% … Univ. Michigan Consumer Sentiment at 9:55 a.m. expected to rise to 92.0 from 91.0 … Treasury Secretary Jack Lew holds a press conference in the evening at The George Washington University.
WP ON PUERTO RICO BILL — Via WP edit page: “The good news is that Mr. Ryan and his committee chairmen, working with the Obama administration, are closer than ever to producing a bill — certainly closer than those familiar with the usual congressional dysfunction might have expected. …
“The Obama administration broadly supports the framework; in the interest of a compromise, the administration has dropped its call for extra Medicaid funding and a new earned-income tax credit, which Republicans saw as too close to a taxpayer bailout … In short, there’s a chance for major bipartisan legislation on a big issue — and if Mr. Ryan can rein in his caucus, it might just happen.” http://wapo.st/22ynZne
BIG CHALLENGE FOR RYAN — POLITICO’s Colin Wilhelm: “House Speaker Paul Ryan faces a challenge on Friday as he tries to rally Republicans and salvage a deal with the Obama administration that would allow Puerto Rico to restructure more than $70 billion in debt. … If Republicans can’t muster enough conservative support for the bill, the measure could be dramatically rewritten to win over Democrats, who are currently opposed to the legislation.
“But it was those kinds of maneuvers that turned Republicans away from his predecessor, John Boehner. Moving too far leftward risks alienating key members of Rep. Rob Bishop’s House Natural Resources Committee, and could imperil the bill on the House floor. Both Bishop and GOP leadership believe if this bill goes down, a taxpayer bailout would be practically inevitable.” http://politi.co/1SFbaSy
OIL PLUNGE HITS BANKS — FT’s Ben McLannahan and Alistair Gray: “Three of America’s biggest banks have each taken $500m hits on their energy portfolios and warned of more pain to come, as they spelt out the damage inflicted by lower oil prices. Wells Fargo, Bank of America and JPMorgan Chase were among the most aggressive lenders to the oil boom, putting together portfolios on the basis that high prices were here to stay … But as explorers and producers continue to struggle with crude at about $40 a barrel, down more than 60 per cent from the 2014 peak, the bills are coming due for the lenders that backed them.
“Wells on Thursday announced that it would pump up its reserves for energy losses to $1.7bn, from $1.2bn at the end of the fourth quarter, while Bank of America added $525m to its buffer. A day earlier, JPMorgan Chase said it had increased its reserves by $529m during the quarter — and said it could add another $500m by the time the year is out. … The banks have emphasised that their energy loans are manageable, accounting for about 2 per cent of their total loan books.” http://on.ft.com/1SF6c8B
BATS PRICES BIG IPO — WSJ’s Corrie Driebusch: “After a flubbed stock-market debut in 2012, Bats Global Markets Inc. is set to list again in a high-stakes test of its own exchange and of the wider new-issue market after a lackluster first quarter. Bats Global’s initial public offering raised $252.7 million late Thursday after selling 13.3 million shares at $19 apiece, valuing the company at $1.82 billion … Earlier Thursday, Bats had increased the number of shares, which it had priced at between $17 and $19, from 11.2 million, a sign of strong investor interest in the IPO.
“The first quarter was the slowest quarter for U.S. listings since the financial crisis, and a successful Bats debut could help revive the IPO market. For the Lenexa, Kan., exchange operator, it is a shot at redemption. Four years ago, Bats was forced to cancel its IPO after it said a software bug disrupted trading shortly after its stock listed on its own exchange. Bats said it is ready to go this time” http://on.wsj.com/23A0ct1
DC CHILLS THE DEALMAKERS — NYT’s Leslie Picker: “On Wall Street, the phones have been a little quieter … . A series of broken transactions and stock-market volatility have shaken the confidence of some in the boardroom to tackle their next big acquisition. The value of abandoned deals has been higher than that of newly signed deals in the United States so far this year. Almost $340 billion worth of mergers have been withdrawn in 2016, while $282 billion worth of newly signed deals were announced …
“The cancellations are skewed toward megadeals, defined as those worth $10 billion or more. … The divergence in the deal market comes largely as a result of a regulatory clampdown. Over the last year, with shareholder encouragement, companies ventured into large, complex and risky deals. Last week, the government fought back, in a lawsuit by the Justice Department and new rules from the Treasury Department, to stop many of the transactions. One lawyer described a depression that set over mergers and acquisitions as a result of those two actions” http://nyti.ms/23A0ro7
CAM FINE ON JAMIE DIMON — ICBA’s Cam Fine in a letter to the WSJ: “The correspondent banking system that Jamie Dimon describes … has existed for 200 years. While the story of our financial system is one of interdependence, the reliance of today’s largest banks on a government guarantee against failure has destabilized the banking ecosystem and threatens institutions not deemed ‘too big to fail.’
“Community banks are critical of the largest financial firms, not merely due to their size but because concentrating most of the industry’s assets in a handful of banks puts the entire system at risk. … It’s a fundamental question of concentration, risk and moral hazard.” http://on.wsj.com/1V5i75S
MICROSOFT SUES DOJ — WSJ’s Jay Greene and Devlin Barrett: “Microsoft Corp. sued the Justice Department on Thursday, saying it’s unconstitutional for the government to bar tech companies from telling customers when federal agents have examined their data. The suit … raises a fundamental question of how easily, and secretly, the government should be able to gain access to individuals’ information in the cloud-computing era.
“Critics argue that a person would know if their home or hard drive were searched by investigators, but agents now have the ability — and are using it in thousands of cases — to keep secret their searches of information stored in the massive data centers that power cloud computing.” http://on.wsj.com/1qtnrTw
10:00 am || Receives the Presidential Daily Briefing
All times Eastern
Live stream of White House briefing at noon
The House is in at 9 a.m. with first and last votes expected between 10:30 a.m. to 11:30 a.m. On tap is the No Rate Regulation of Broadband Internet Access Act. The Senate is out until Monday.
Last-Minute Tips for Filing Your Taxes
Don’t panic if you haven’t done your taxes yet. There’s no time like the present to prepare and file your 2015 tax return. Visit IRS.gov for tax tools and help to make filing less taxing.
- Don’t delay. Don’t wait until the last minute to do your taxes. If you rush to beat the deadline, you may miss out on tax savings or make a mistake. An error may delay your refund and could cause the IRS to send you a letter.
- Use IRS Free File. If you made $62,000 or less, you can use free tax software to do your taxes and e-file. If you made more, you can use Free File Fillable Forms. These are electronic versions of IRS paper forms. Free File will also help with the reporting requirements for the Affordable Care Act.
- Try IRS e-file. No matter who does your taxes, you should file them using IRS e-file. It’s the safe, easy and accurate way to file your tax return. You’re 20 times less likely to make a mistake when you e-file compared to filing a paper return. Tax software catches and corrects common paper filing errors. It also will alert you to tax credits and deductions you may otherwise miss.
- Visit IRS.gov. Go online for tax information and resources. The Interactive Tax Assistant, Tax Trails and IRS Tax Map are useful question and answer resources.
- File on time. If you owe taxes but can’t pay by the April due date, you should still file on time and pay as much as you can. This will reduce potential penalties and interest charges. If you can’t pay all the tax you owe, you may apply for an installment agreement. The easy way to apply is to use the Online Payment Agreement application on IRS.gov. You can also apply by mail using IRS Form 9465, Installment Agreement Request.
- File an extension. If you’re not ready to file by April 18 (April 19 for taxpayers in Maine or Massachusetts), you can get an automatic six-month extension. You can e-file your extension request for free using IRS Free File. If you owe tax, you can request your extension when you make a payment with Direct Pay, Electronic Federal Tax Payment System or by debit or credit card and select Form 4868 as the payment type. You may also file using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Make sure to e-file or mail the form and pay an estimate of any tax due by the April due date.
- File to reconcile Advance Payments of the Premium Tax Credit. You must file a tax return and submit Form 8962 to reconcile advance payments of the premium tax credit with the actual premium tax credit to which you are entitled. You will need Form 1095-A from the Marketplace to complete Form 8962. Filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.