U.S. lifts arms ban on old foe Vietnam as regional tensions simmer
The United States announced an end to its embargo on sales of lethal arms to Vietnam on Monday, an historic step that draws a line under the two countries’ old enmity and underscores their shared concerns about Beijing’s growing military clout. The move came during President Barack Obama’s first visit to Hanoi, which his welcoming hosts described as the arrival of a warm spring and a new chapter in relations between two countries that were at war four decades ago. Obama, the third U.S. president to visit Vietnam since diplomatic relations were restored in 1995, has made a strategic ‘rebalance’ toward Asia a centerpiece of his foreign policy. Vietnam, a neighbor of China, is a key part of that strategy amid worries about Beijing’s assertiveness and sovereignty claims in the South China Sea. The decision to lift the arms trade ban, which followed intense debate within the Obama administration, suggested that such concerns outweighed arguments that Vietnam had not done enough to improve its human rights record and that Washington would lose leverage for reforms. Obama told a joint news conference with Vietnamese President Tran Dai Quang that disputes in the South China Sea should be resolved peacefully and not by whoever “throws their weight around”. But he insisted the arms embargo move was not linked to China. “The decision to lift the ban was not based on China or any other considerations. It was based on our desire to complete what has been a lengthy process of moving towards normalization with Vietnam,” he said. He later added that his visit to a former foe showed “hearts can change and peace is possible”. The sale of arms, Obama said, would depend on Vietnam’s human rights commitments, which would be made on a case-by-case basis. More:
Obama Confirms Death of Mullah Mansour, Taliban Leader, in U.S. Strike
HANOI, Vietnam — An American drone strike in a restive province of Pakistan killed Mullah Akhtar Muhammad Mansour, the leader of the Afghan Taliban, the White House confirmed on Monday. Calling the death “an important milestone,” President Obama said in a statement, released just as he was meeting with top officials in Vietnam, that the United States had “removed the leader of an organization that has continued to plot against and unleash attacks on American and coalition forces.” “Mansour rejected efforts by the Afghan government to seriously engage in peace talks and end the violence that has taken the lives of countless innocent Afghan men, women and children,” Mr. Obama continued in the statement. “The Taliban should seize the opportunity to pursue the only real path for ending this long conflict — joining the Afghan government in a reconciliation process that leads to lasting peace and stability.” At a news conference with President Tran Dai Quang of Vietnam, Mr. Obama said that targeting Mullah Mansour did not represent a shift in strategy for the United States mission in Afghanistan. “We are not re-entering the day-to-day combat operations that are currently being conducted by Afghanistan forces,” he said. But Mullah Mansour was a danger to American forces there, he said. “He is an individual who as head of the Taliban was specifically targeting U.S. personnel and troops inside of Afghanistan who are there as part of the mission I have set to maintain a counterterrorism platform and provide assistance,” Mr. Obama said. Killing Mullah Mansour sent a message that “we’re going to protect our people,” he said. The strike was the first such American drone attack in the southwestern Pakistani province of Baluchistan, which is the de facto headquarters of the Afghan Taliban. Nearly all other drone strikes have taken place in other Pakistani and Afghan areas. More:
As Obama Heads to Vietnam, Current Events Overshadow History
HANOI, Vietnam — When Bill Clinton landed in this lake-studded capital 16 years ago, the first American president to visit since the end of the Vietnam War, his mission was to put that conflict behind him, and the trip was among the most remarkable of his presidency. When President Obama arrives here early Monday, his task may be a bit less dramatic, but is in many ways far more ambitious. These two countries, bedeviled by decades of misunderstandings, violence and wariness, now have the chance to create a partnership that seemed unlikely even three years ago. Since then, China’s expansion in the South China Sea has deeply shaken a new Vietnamese government. While the leadership here has not let up on its repression of its people — the police have beaten protesters in demonstrations over an environmental disaster — it now appears more interested in playing one superpower off against the other, perhaps even giving the Pentagon some rotating access to key Vietnamese ports. It would not be an alliance; neither side seems ready for that. But it could throw Beijing off balance in the daily shadowboxing over who will dominate one of the world’s most strategically vital waterways. “It does show how history can work in unpredictable ways,” said Benjamin J. Rhodes, a deputy national security adviser who spent time over the past two years luring Myanmar out of its shell. “Even the worst conflicts can be relatively quickly left behind.” In many parts of Asia, Mr. Obama’s strategy of focusing on the region is still more of a slogan than an operational plan. He has been drawn back into Middle East conflicts in Iraq, Syria and Yemen. But in this part of Southeast Asia, particularly Vietnam, he seems on the verge of the kind of progress Mr. Clinton could only imagine during that first visit, only 10 months before the Sept. 11 attacks changed America’s priorities. Slurping noodles in a shop in Ho Chi Minh City at the end of that trip, Mr. Clinton wondered aloud to a reporter whether the Communist leaders in Vietnam were really willing to turn away from their traditional link to China. It turned out they were not. But now the Chinese, who hindered American efforts during the Vietnam War, are making things easier for the United States. For years, the Communist Party leadership in Vietnam, headed by Nguyen Phu Trong, ignored Chinese activity off the country’s coast even as its deeply nationalistic population became increasingly alarmed. But in 2014, China placed a deep-sea drilling rig to explore for oil and gas right off Vietnam, and Mr. Trong, the party’s general secretary, could not even get his phone calls to Beijing returned. More:
Report: Iraqi military starts to retake Fallujah
Iraqi Prime Minister Haider al-Abadi announced Sunday the start of military operations to retake the city of Fallujah, which has been controlled by Islamic State militants. In a televised address, al-Abadi said Iraqi forces are “approaching a moment of great victory” against the terror group, the Associated Press reported. Al-Abadi reportedly was surrounded by top military commanders from the country’s elite counterterrorism forces as he made the announcement. Fallujah is about 40 miles west of Baghdad and has been under the control of the Islamic State, also known as ISIL or ISIS, for more than two years. The government warned Fallujah residents earlier Sunday to prepare to flee the city or hang white flags outside their homes when the military began its offensive. Earlier, Defense Minister Khalid al-Obeidi had said the liberation of Fallujah would begin “in the coming days” and asked residents to cooperate with security forces. Tanks and other military vehicles lined some streets outside the city Sunday, trying to create safe exit routes. The United Nations Assistance Mission for Iraq issued a report last month saying militants were killing residents attempting to leave the city. The report said residents face acute shortages of food and medicine, and that “humanitarian conditions are worsening and human suffering is increasing” in the city. Iraqi Special Forces, backed by coalition air support, recaptured the Anbar provincial capital of Ramadi in December. Since then, Operation Desert Lynx has seen Iraqi military forces liberating a handful of towns and villages from militant control. Last week, Iraqi soldiers fighting with tribal forces and aided by air support from the U.S.-led coalition reclaimed the town of Rutbah, which sits on the highway linking Syria with Jordan. Iraqi Brig. Gen. Abdul-Ameer al-Khazraji said militants, offered little resistance. Iraq has made consistent gains against the militants on the battlefield in recent months, although suicide bombings and other terror attacks have taken a brutal toll. Even Baghdad’s heavily guarded Green Zone, home to government ministries and international operations, has seen breaches. Anti-government protesters overran blast walls Friday, drawing fire from Iraqi security forces. Scores were wounded, and the violence caused Iraqi Prime Minister Haider al-Abadi to impose a curfew in the city.
Mexico grants extradition of drug lord Joaquin ‘El Chapo’ Guzman to U.S.
Convicted drug lord Joaquin “El Chapo” Guzman can be extradited to the United States, Mexico’s Foreign Relations Department said Friday. The process can still be appealed, which means it could take weeks or months before the Sinaloa cartel leader may be sent north. Guzman’s lawyers have 30 days to appeal the decision. Juan Pablo Badillo, one of Guzman’s lawyers, told Reuters he would file “many” legal challenges in the coming days. If the extradition goes through, Guzman, who has escaped Mexican prisons twice and led authorities on a months-long search in 2015, will be transferred to U.S. Federal District Court for the Western District of Texas, according to a Mexican government website. The charges are conspiracy, organized crime, weapons possession, murder and money laundering. He will also be prosecuted in the Southern District of California on charges related to cocaine trafficking, according to the Mexican authorities. The department said Friday that the United States has guaranteed that Guzman would not face the death penalty, which is not applied in Mexico. Guzman made world headlines in July when he slipped out of his cell in the maximum security Altiplano federal prison and through a mile-long tunnel to freedom. The dramatic escape prompted a worldwide manhunt which concluded in January with his arrest following a deadly shootout in Los Mochis, a Mexican coastal city of 250,000 in Guzman’s home state of Sinaloa. Attorney General Arely Gómez González said the search had drawn few valuable clues until Guzman reached out to actors and producers and began planning a biopic. That tipped off investigators to his location, and Gómez said a journey to the rugged Sierra Madre by American actor Sean Penn drew authorities to Guzman. El Chapo — meaning “Shorty” for his 5-foot-6 stature — has been an iconic figure in the drug trade for decades. He was first captured in Guatemala in 1993 and was extradited to Mexico. He was serving a 20-year sentence on drug-trafficking charges in a different prison when he pulled off an equally intricate escape in 2001. He was recaptured in Mexico in February 2014. His grip on the multibillion-dollar cartel remained strong. The U.S. Drug Enforcement Administration says he was able to remain a force by communicating with his son and other cartel leaders through lawyers and others who visited him at the Altiplano prison outside Mexico City.
Fannie, Freddie and the Secrets of a Bailout With No Exit
When Washington took over the beleaguered mortgage giants Fannie Mae and Freddie Mac during the collapse of the housing market and the financial crisis of 2008, it was with the implicit promise that they would be returned to shareholders after being nursed back to health. But now, with the unsealing of documents this week that were produced as part of a lawsuit filed against the government, new evidence is coming to light on how intimately the White House was involved in the Treasury’s decision in August 2012 to keep all the companies’ profits for the government. That move effectively maintained Fannie’s and Freddie’s status as wards of the state. The newly released documents go beyond previous disclosures in the case and make clear that the Obama administration never had any intention of restoring Fannie and Freddie, which enjoyed implicit backing from the government before the takeover, to their status as stand-alone entities. An email from Jim Parrott, then a top White House official on housing finance, was sent the day the so-called profit sweep was announced. It said the change was structured to ensure that the companies couldn’t “repay their debt and escape as it were.” The documents also show the Treasury moving to modify the terms of the mortgage finance giants’ $187.5 billion bailout shortly after a July 2012 meeting when the Federal Housing Finance Agency, Fannie’s and Freddie’s regulator, learned that they were about to enter “the golden years” of profitability. Since then, Fannie and Freddie have returned to the Treasury over $50 billion more than they received in the bailout. But the amount they owe to the government remains outstanding. The new materials cast further doubt on arguments made in court by government lawyers that the profit sweep came about because Fannie and Freddie were in a death spiral and taxpayers needed protection from future losses. Documents unsealed last month also served to undermine that legal stance. A Justice Department spokeswoman declined to comment. The trickle of documents comes years after Fannie and Freddie shareholders sued the government, contending that its decision regarding the companies’ profits was illegal. Defending against an array of these suits, lawyers for the Justice Department have requested confidential treatment for thousands of pages of materials. In a case brought in Federal Claims Court, the government’s lawyers assertedpresidential privilege in 45 documents. The Treasury’s integral role in the profit sweep comes through clearly in the new materials, indicating that it was in charge of decisions on Fannie and Freddie, and that the Federal Housing Finance Agency, created by Congress in 2008 as a purportedly independent regulator, did as directed.
Returns are big, but the jury is still out on lawsuit investing
Heads up, financial advisers, because some of the latest performance from a fledgling investment category known as litigation finance could start catching the attention of your clients. The idea of investing capital to help finance a lawsuit is not completely new, but the May 16 passage of a provision of the 2012 JOBS Act could pave the way for lawsuit-investing pitches at the retail investor level. There is no denying the risks that a lawsuit could lose or result in a minimal settlement. But when the latest figures are showing annualized returns in the 90% range, advisers should expect the noise surrounding litigation finance to keep getting louder. “That’s what you get in these low-interest-rate markets; all the weird [stuff] comes out,” said Ed Butowsky, managing partner at Chapwood Capital Investment Management.
Mr. Butowsky is not a fan of investing in lawsuits, and wouldn’t advise his clients to do so, the same way he is personally opposed to investing in marijuana-related businesses. Part of his issue with litigation finance is that he believes gathering investment capital to finance lawsuits will lead to more lawsuits.
“I don’t like the business, and no matter how good it looks I’m not going to invest in that because I just don’t like to be associated with that kind of stuff,” he said. “There’s lots of things where the returns look strong, but you also have to check your moral character. I don’t like extortion and that’s what I think a lot of plaintiff attorneys do.” It would be difficult to dispute that the returns do look good. TrialFunder, which funded its first lawsuit last summer, is touting a 108.7% return over nine months from the settlement of a police brutality case. In another investment on the platform, investors gained 98% by advancing the settlement payout from a trip-and-fall injury lawsuit. Amoush Hakimi, a practicing attorney and TrialFunder chief executive, said he is just weeks away from rolling out a multi-lawsuit fund to be offered on the platform. For now, the litigation finance platforms are all still limited to accredited investors, but the May 16 expansion of the JOBS Act paves the way for such platforms to potentially solicit capital from retail-class investors. Mr. Hakimi said he is already eyeing a retail platform, but that he is “waiting for more clarity on the rules.”
Candidates Who Backed the Oregon Militia Overwhelmingly Voted Out
Voters in rural Harney County, Oregon, overwhelmingly rejected the ideology of right-wing militia members who made the local wildlife refuge famous with their ill-fated occupation earlier this year. Candidates sympathetic to Ammon Bundy and his fellow “patriots” were overwhelmingly voted down in Tuesday’s election, according to Oregon Public Broadcasting. The Malheur National Wildlife Refuge was temporarily “liberated” from government “tyranny” by the marauding band of misfits for three weeks in January. The militia members were protesting the harsh sentences a local rancher and his son were given after they were found guilty of arson. The stand-off ended with an FBI raid that left one occupier, Robert “LaVoy” Finicum, dead. Statewide, only a little more than half of Oregon’s eligible voters turned out in Tuesday’s primary — despite the fact that, as Rolling Stone reported, officials have made it quite easy to vote in the state. Harney County, by contrast, saw 72 percent of eligible voters cast ballots — the highest rate of voter participation in the state. During the occupation, militia members received support, in the form of food and supplies, from around the country, but Tuesday’s election showed there was only tepid enthusiasm for the goal of returning federal land to local control. Tom Schaefer, a candidate running for county judge who invoked the militia’s pet issue in his stump speeches — saying things like, “I think we need to push back with every opportunity and every bit of leverage that we have against these federal agencies that are strangling us” — took third place in his race for county judge. The winner of that race, former County Commissioner Pete Runnels, opposed the occupation. (The Pacific Patriot Network, an organization that supported the militia, called for Runnels’ resignation back in January.) Republican gubernatorial candidate Bruce Cuff, who campaigned on the issue of transferring federal lands to state control and who aligned himself with militia members by speaking at rallies protesting the shooting death of Finicum, came in third in Harney County behind Allen Alley and Bud Pierce, who won the statewide vote.
Veterans Groups Seek a Crackdown on Deceptive Colleges
WASHINGTON — Some of the nation’s largest veterans and military organizations sent letters last week to the Veterans Affairs Departmentasking it to crack down on colleges that prey on veterans by charging exorbitant fees for degrees that mostly fail to deliver promised skills and jobs. The letters were signed by top officials at the American Legion, the National Military Family Association, the Military Officers Association of America and nearly 20 other groups. They called on the department to improve its oversight of colleges that have engaged in deceptive recruiting and other illicit practices but that continue to receive millions in funding under the G.I. Bill. “We encourage you” to take steps against the dozen or so colleges facing “federal and state action for deceiving students,” one of the letters says. The career training and for-profit college industry has been accused in recent years of exploiting veterans, poor people and minorities. Veterans are an especially enticing target because, under a loophole in federal law, money from the G.I. Bill does not count against a cap on federal funding to for-profit schools.
The Veterans Affairs Department has traditionally done little to police the for-profit college industry despite handing more than $1.7 billion for the 2012-13 school year to for-profit colleges. A 2014 Senate reportfound that seven of the eight for-profit college operators that received the most money from the department were under investigation by state or federal authorities for misleading recruiting practices or other violations of federal law. In an emailed statement, Terry Jemison, a spokesman for the department, said it relied largely on states to police the industry. State agencies “are required to ensure that all schools, including nonaccredited schools, have been licensed to operate in their state,” Mr. Jemison wrote. But a recent study by Yale law students found that the department was required by statute to enforce federal education guidelines prohibiting fraudulent practices. Democrats on Capitol Hill have cited the study as more evidence that the department is failing to protect veterans from predatory practices.
“The failure to crack down defies not only the White House priorities and congressional demands, but logic and common sense,” Senator Richard Blumenthal, Democrat of Connecticut, said in an interview.
The industry, defending itself against the allegations, says it offers nontraditional students a flexible way to gain career skills. More:
Key G.O.P. Donors Still Deeply Resist Donald Trump’s Candidacy
A powerful array of the Republican Party’s largest financial backers remains deeply resistant to Donald J. Trump’s presidential candidacy, forming a wall of opposition that could make it exceedingly difficult for him to meet his goal of raising $1 billion before the November election. Interviews and emails with more than 50 of the Republican Party’s largest donors, or their representatives, revealed a measure of contempt and distrust toward their own party’s nominee that is unheard of in modern presidential politics.
More than a dozen of the party’s most reliable individual contributors and wealthy families indicated that they would not give to or raise money for Mr. Trump. This group has contributed a combined $90 million to conservative candidates and causes in the last three federal elections, mainly to “super PACs” dedicated to electing Republican candidates. Up to this point, Mr. Trump has embraced the hostility of the Republican establishment, goading the party’s angry base with diatribes against wealthy donors who he claimed controlled politicians. And he has succeeded while defying conventions of presidential campaigning, relying on media attention and large rallies to fire up supporters, and funding his operation with a mix of his own money and small-dollar contributions. But that formula will be tested as he presents himself to a far larger audience of voters. Mr. Trump has turned to the task of winning over elites he once attacked, with some initial success. And he has said he hopes to raise $1 billion, an enormous task given that he named a finance chairman and started scheduling fund-raisers only this month.
Trump camp quietly courts Muslims
Donald Trump’s top foreign policy adviser has quietly opened backchannels within Muslim and Middle Eastern communities in the U.S. in an attempt to win over a small but increasingly important voting bloc.
Walid Phares, a top national security adviser for Trump, has been courting prominent Muslim Republicans and conservative Middle Eastern activists in the U.S. Some Muslim Republicans and conservative Middle Eastern activists have also engaged with other top campaign officials about furthering Trump’s outreach to those communities. In a Friday phone interview with The Hill, Phares said Trump campaign officials had not directed him to engage with the groups. Rather, he described the talks as a natural extension of the relationships he’s built over decades of policy work on Middle Eastern affairs. Phares said that he initiated contact with several individuals and groups to ask them to organize for Trump or to sell them on Trump’s positions in hopes that they’d at some point support the likely GOP nominee. But the bulk of the discussions, Phares said, were initiated by curious Muslim Republicans or Middle Eastern conservatives seeking additional information on Trump’s views or hoping to influence his policies – particularly as they pertain to the temporary ban on Muslims entering the country. “Most of those who reached out said they want to support Mr. Trump, but they’re not clear about some of the statements he’s made,” Phares said.
“These people know what they want – they’re concerned about the well-being of their communities and believe that Trump has the right economic and social agenda,” he continued. “But they’re trying to get a handle on how he’ll deal with the Middle East.” The behind-the-scenes discussions come as Trump continues to deal with blowback over his proposal to temporarily ban Muslims from entering the country.
The presumptive GOP nominee has also said he’s considering convening a commission headed by former New York City mayor Rudy Giuliani (R) to examine the “problem“ of “radical Islam.” Trump’s critics have cited those remarks as evidence he’s racist or xenophobic. Trump has since softened his rhetoric on the ban, saying it’s merely a “suggestion.” Phares described the ban as a statement about how seriously Trump views the terror threat, rather than a statement of policy. He said Trump will further explain and refine his position as he takes government briefings and meets with interested parties. More:
How the GOP Went South
By joining the Republican Party, once hated in Dixie for being the party of Lincoln and subsequent carpetbaggers, the South helped transform the GOP into the dominant national party for decades. The conservative movement’s founders might have been intellectuals and the GOP establishment once might have been Northeastern elites, but that arrangement was always tenuous. When Willie Sutton was asked why he robbed banks, the infamous outlaw supposedly replied, “Because that’s where the money is.” Likewise, anyone who seeks to understand why conservatism became what it is can only expect this answer: “Because that’s where the votes were.” Indeed, after the 2014 midterms, almost half of the Republican congressional delegation represented Southern districts. But what happens when you build your political coalition around a constituency that is no longer sufficient? What is more, what happens when appeasing your base and growing your coalition become mutually exclusive goals? Times change, and yesterday’s solution becomes tomorrow’s challenge. Such is the case with today’s GOP and the South. The South helped fuel Richard Nixon’s romp over George McGovern and Ronald Reagan’s 49—1 rout of Walter Mondale. It did its part in saving us from a President Dukakis or Kerry. It would be hard to overestimate the importance of the GOP aligning with Southern values. Redskins coach George Allen was famous for saying, “The future is now.” Sometimes, to borrow a phrase from Donald Rumsfeld, you go to war with the army you have. That’s the tradeoff Republicans made, and it was perfectly rational. But there were also unintended consequences. A political party inevitably reflects its constituents’ attitudes and biases. The notion that any party can change its voter base without changing its philosophy and its politicians is naive; pandering inevitably becomes a self‑fulfilling prophecy. Republicans captured the South, yes, but the South also captured the GOP. The addition of the South and rural communities in states like South Carolina, Alabama, and Mississippi as a reliable bloc of the Republican coalition was one of the many factors leading to the GOP’s image as both the stupid party and the party of white men with Confederate flag stickers on the backs of their trucks. This may not be fair—it certainly plays to stereotypes. But that hardly matters. Today, this is increasingly seen as a liability.
Primed to Fight the Government
REDMOND, Ore. — B.J. Soper took aim with his AR-15 semiautomatic rifle and fired a dozen shots at a human silhouette target. Soper’s wife and their 16-year-old daughter practiced drawing pistols. Then Soper helped his 4-year-old daughter, in pink sneakers and a ponytail, work on her marksmanship with a .22-caliber rifle. Deep in the heart of a vast U.S. military training ground, surrounded by spent shotgun shells and juniper trees blasted to shreds, the Central Oregon Constitutional Guard was conducting its weekly firearms training. “The intent is to be able to work together and defend ourselves if we need to,” said Soper, 40, a building contractor who is an emerging leader in a growing national movement rooted in distrust of the federal government, one that increasingly finds itself in armed conflicts with authorities.
Those in the movement call themselves patriots, demanding that the federal government adhere to the Constitution and stop what they see as systematic abuse of land rights, gun rights, freedom of speech and other liberties. Law enforcement officials call them dangerous, delusional and sometimes violent, and say that their numbers are growing amid a wave of anger at the government that has been gaining strength since 2008, a surge that coincided with the election of the first black U.S. president and a crippling economic recession. Soper started his group, which consists of about 30 men, women and children from a handful of families, two years ago as a “defensive unit” against “all enemies foreign and domestic.” Mainly, he’s talking about the federal government, which he thinks is capable of unprovoked aggression against its own people. The group’s members are drywallers and flooring contractors, nurses and painters and high school students, who stockpile supplies, practice survival skills and “basic infantry” tactics, learn how to treat combat injuries, study the Constitution and train with their concealed handguns and combat-style rifles. “It doesn’t say in our Constitution that you can’t stand up and defend yourself,” Soper said. “We’ve let the government step over the line and rule us, and that was never the intent of this country.” More:
This Is What the Future of American Politics Looks Like
For political observers, 2016 feels like an earthquake — a once-in-a-generation event that will remake American politics. The Republican party is fracturing around support for Donald Trump. An avowed socialist has made an insurgent challenge for the Democratic Party’s nomination. On left and right, it feels as though a new era is beginning. And a new era is beginning, but not in the way most people think. Though this election feels like the beginning of a partisan realignment, it’s actually the end of one. The partisan coalitions that defined the Democratic and Republican parties for decades in the middle of the twentieth century broke apart long ago; over the past half century, their component voting blocs — ideological, demographic, economic, geographic, cultural — have reshuffled. The reassembling of new Democratic and Republican coalitions is nearly finished. What we’re seeing this year is the beginning of a policy realignment, when those new partisan coalitions decide which ideas and beliefs they stand for — when, in essence, the party platforms catch up to the shift in party voters that has already happened. The type of conservatism long championed by the Republican Party was destined to fall as soon as a candidate came along who could rally its voters without being beholden to its donors, experts and pundits. The future is being built before our eyes, with far-reaching consequences for every facet of American politics. The 2016 race is a sign that American politics is changing in profound and lasting ways; by the 2020s and 2030s, partisan platforms will have changed drastically. You may find yourself voting for a party you could never imagine supporting right now. What will that political future look like? Today’s Republican Party is predominantly a Midwestern, white, working-class party with its geographic epicenter in the South and interior West. Today’s Democratic Party is a coalition of relatively upscale whites with racial and ethnic minorities, concentrated in an archipelago of densely populated blue cities.
In both parties, there’s a gap between the inherited orthodoxy of a decade or two ago and the real interests of today’s electoral coalition. And in both parties, that gap between voters and policies is being closed in favor of the voters — a slight transition in the case of Hillary Clinton, but a dramatic one in the case of Donald Trump. More:
Fitbit accuracy questioned in lawsuit
(CNN)Your favorite fitness tracker may not be totally accurate, according to a study used in an amended complaint filed Thursday against Fitbit. The class-action lawsuit, filed earlier this year, argues that the PurePulse technology used in the Fitbit trackers that measure your heart rate doesn’t do it as well as the company’s marketing material promises, a claim Fitbit denies. The technology is used in the more expensive models of the device, the Surge, Blaze and Charge HR. The lawsuit was filed on behalf of people who bought these Fitbits specially to help them track their heart rate, whether for health reasons or to make sure they are getting the most out of their workouts. “We are not arguing that it is a medical device. I think that is irrelevant,” said Jonathan Selbin, one of the attorneys who filed the lawsuit. “This is about the way they market it and that they charge a premium for the heart rate monitor, but it’s not giving a meaningful measurement.” The suit alleges that a defect in the trackers is a safety hazard because people who rely on inaccurate heart rate readings for medical purposes could be at risk. The class-action members say there is no reasonable way for them to know that the devices can be inaccurate and that they might not have even bought them if they knew. The amended complaint, filed Thursday, added a new study that looked at how the trackers worked for 43 healthy adults, compared with an ECG and against each other. The participants wore two Fitbits during the test. The study — which was funded by the legal team that brought the lawsuit — found that the devices were off by, on average, 20 beats per minute during moderate- to high-intensity exercise. The lawsuit concludes that the “devices could not provide meaningful heart rate data” when someone is exercising. More:
MONTGOMERY—The investigation into Governor Robert Bentley has taken a new turn, with the recusal of US Attorney for the Middle District of Alabama, George Beck. Those with knowledge of the investigation believe that Beck’s recusal is due to his long association with donor’s, consultants, and advisors, who have been been involved in various capacities with the Bentley administration. While much of the probe into allegations against Bentley has been under the FBI’s Public Integrity Section (PIN), ultimate oversight has now been given to John A. Horn the US Attorney for the Northern District of Georgia. PIN oversees the federal effort to combat corruption by prosecuting elected and appointed public officials at all levels of government. Horn, a career prosecutor, was appointed by the Obama administration in 2015, for the district that runs from the mountains of northern Georgia to the Atlanta suburbs in the south, and from the western border of Alabama to the two Carolinas in the east. The primary office is located in the US courthouse in Atlanta. Bentley continues to claim he has done nothing unethical, or illegal. He recently reminded the voters that God had chosen him to lead the State, and that he would finish that mission. A task force from the FBI, the Postmaster General, and the IRS is conducting the investigation into allegations of obstruction of justice, fraudulent use of campaign contributions, improper use of State resources, and other potential criminal acts, according to former Bentley confidants, and staffers, who are cooperating with the investigators. The most serious scrutiny surrounds Bentley’s involvement with Rebekah Caldwell Mason, his former senior advisor, and alleged paramour. More:
Advisory: Pregnant women, infants should avoid drinking tap water in some parts of AL
(WIAT) — Eight water systems in Alabama are said to have concentrations of chemicals above the health advisory issued by the EPA yesterday. The EPA health advisory was developed to protect “sensitive populations” like breast-fed infants, pregnant women, and infants fed with formula prepared with tap water. The compounds found in the water systems are man-made chemicals that resist heat, oil, grease and water, and are found in products like nonstick cookware, products that protect carpet and waterproof clothing. The chemicals are called perfluorooctane sulfonate (PFOS) and perfluorooactanoic acid (PFOA). According to the EPA, pregnant women in the identified communities (below) should consider finding an alternate source of drinking water. If your infant is fed with formula, consider using formula that does not require adding water. They also say other people may consider these steps. The exposure to the chemicals is mainly from ingestion, so other uses of tap water like showering, bathing and laundry should be fine. PFCs are NOT removed by boiling. “The health effects of exposure in the general population are not totally clear at this time, but the health advisory level will be protective for them as well,” the ADPH said. After the EPA released their final health advisory regarding the chemicals, the Alabama Department of Public Health issued a release, naming the eight North Alabama water systems that have tested as having concentrations above the newly released health advisory levels:
The Council Strikes Back
During its recently concluded regular session, the Alabama Legislature passed — and Gov. Robert Bentley signed into law — substantive changes in the Mayor-Council Act, the document under which Birmingham’s city government has operated since 1963. Essentially, numerous powers once reserved solely to the Birmingham City Council have been either transferred to the Office of the Mayor or are now shared between the two branches of government. Among other things, the amended law mandates that the council elect new officers annually, rather than every four years. With the law becoming effective immediately on its passage, the council was obliged to hold elections last week. By a 5-4 vote, sitting Council President Johnathan Austin was re-elected, while Steven Hoyt replaced Jay Roberson as President Pro-Tem. Following the election, Austin reshuffled the council’s committee assignments to reflect the majority that re-elected him as president. Some of the councilors who were reassigned complained not only about the reshuffling but also about being required to change office space along the long hallway that houses the council. Collectively, these recent events beg questions about how the council will function going forward, both internally and in its relationship to a newly powerful Mayor William Bell — and how those dynamics may impact the municipal election that will take place in 2017. To answer those questions — and to talk about the current state of the city in general — three members of the new council majority visited Weld’s offices on the evening of May 16. Austin and Hoyt were joined by Councilor Sheila Tyson (Councilors Marcus Lundy and Lashunda Scales had prior commitments) in a 90-minute conversation with Weld publisher Mark Kelly, excerpts from which appear at link below.
House Speaker Mike Hubbard’s lawyers drop effort to get identities of 2 AL.com commenters
House Speaker Mike Hubbard’s attorneys have dropped efforts to subpoena the Alabama Media Group to reveal the identities of two anonymous commenters to news stories on AL.com. Hubbard’s attorneys on Friday notified the court it is withdrawing its subpoena to the Alabama Media Group “as it is unnecessary at this time.” The notification did not indicate why the attorneys were seeking to withdraw the subpoena for Hubbard’s ethics trial, which begins Tuesday in Lee County. A hearing on the subpoena request had been set at the start of the trial Tuesday morning, but in Friday’s notice by Hubbard’s attorneys stated the hearing is now unnecessary. Alabama Media Group had asked Lee County Circuit Judge Jacob Walker to block the subpoena because it violates a right to anonymous free speech under the First Amendment and because it violates Alabama law and rules of criminal procedure. The subpoena sought information about the accounts of commenters “Reaganwasbetter” and “noonewouldusethis,” including email addresses, IP addresses and any and all registration information. Among its arguments, AMG asserted that posted comments identified by Hubbard’s lawyers do not satisfy the factors that would outweigh the protection of anonymous free speech. A 16-member jury – including four alternates – was selected last week for the trial that’s expected to last several weeks. A Lee County grand jury indicted Hubbard in October 2014 on 23 felony ethics charges. He is accused of using his political offices to benefit his businesses. Hubbard has denied any wrongdoing.
Impact of Mike Hubbard trial could go beyond courtroom
In a schoolroom-sized chamber on the second floor of the Lee County Justice Center Tuesday, a trial will begin that could cut through Alabama politics like a coroner’s knife, with all the grisly revelations that follow. Lee County Circuit Judge Jacob Walker should hear opening arguments in House Speaker Mike Hubbard’s trial on 23 felony ethics counts, after a possible hearing dealing with outstanding motions in the case Tuesday morning. Prosecutors with the Alabama Attorney General’s Office say Hubbard used his public offices – first as Alabama Republican Party chairman, then as House Speaker – to secure consulting clients and business investments in violation of the Alabama Ethics Act. Hubbard, a Republican from Auburn, maintains his innocence and his attorneys say the transactions were proper.
The proceedings may pull in other notable political figures, including Gov. Robert Bentley; former Gov. Bob Riley and dozens of legislators, lobbyists and staffers, who all could testify in the case. Hundreds of emails Hubbard sent and received between 2011 and 2013, already included in the case file, will add to the debate by attorneys about the meaning of actions and transactions Hubbard had with dozens of politicians, lobbyists and business leaders inside and outside of Montgomery. Beyond the courtroom, the outcome of the trial could have a significant effect on Alabama politics and the House of Representatives at a time when Bentley and Alabama Chief Justice Roy Moore find themselves stuck in their own controversies and critical decisions on Medicaid loom. The charges against Hubbard fall into four broad categories:
The Mike Hubbard case: Breaking down the charges
While Alabama House Speaker Mike Hubbard faces 23 felony ethics charges, many of the counts cover the same actions. Counts 1 through 4: Craftmasters and the Auburn Network
The charges: Prosecutors accuse Hubbard of using his position as Alabama Republican Party chairman to steer GOP business to the Auburn Network, Hubbard’s consulting firm, and Craftmasters, an Auburn-based printing firm that Hubbard holds a partial interest in. The charge comes under a law preventing public officials from gaining personal benefit from their position. The background: Hubbard served as chairman of the Alabama Republican Party from 2007 to 2011, helping the GOP win control of the Legislature in 2010. In 2012, then-chairman Bill Armistead commissioned an audit of party spending during the campaign that found that close to $800,000 in printing business went to Craftmasters. Hubbard pushed for release of the report. Prosecutors: In a February 2015 filing, prosecutors said the business meant that Hubbard aimed to “essentially embezzle” party money. Prosecutors cite an email where one consultant said they were being “forced” to use Craftmasters despite what they said was higher prices at the company. Hubbard: Hubbard said the contract with Craftmasters allowed economies of scale that saved the party money. In a September 2015 filing challenging the constitutionality of the Ethics Act as applied to Hubbard, Mark White, then an attorney for Hubbard, did not address the specific actions but argued that political parties had the right under the First Amendment to disburse their money as they saw fit. Counts 5 and 6: The American Pharmacy Cooperative Inc. The charges: Prosecutors accuse Hubbard of attempting to insert language into the 2014 General Fund budget that would have made the American Pharmacy Cooperative Inc. (APCI), one of his clients, the only firm that would have been able to bid on a Pharmacy Benefit Manager (PBM) discussed at the time for the state’s Medicaid program, and then voting for the budget with the language in it. The charge falls under a law forbidding officials from voting for legislation “in which he or she knows or should have known that he or she had a conflict of interest.” The background: Hubbard had a $5,000-a-month consulting contract with APCI, signed in June 2012 that included a provision that prevented Hubbard “from providing the services of consultant … within the state of Alabama.” The speaker voted for a version of the General Fund budget that included the language, which ultimately came out of the final budget. Prosecutors: Prosecutors say APCI resisted the implementation of a PBM at first but in the spring of 2013 gave suggested budget language to then-Rep. Greg Wren, R-Montgomery, that would have made APCI the only entity that could successfully bid on such a program. Prosecutors say Hubbard or his staff was present during discussions of the language and cite an April 19, 2013, letter from APCI President Tim Hamrick thanking Hubbard for preventing “a large, out-of-state pharmacy benefit manager from taking over the pharmacy program in Medicaid.” Wren, who pleaded guilty to a misdemeanor ethics charge over the issue and resigned his seat, could testify on the issue. Hubbard: Hubbard has said his work on the APCI contract only involved out-of-state issues. White wrote in his September filing the speaker did not have a conflict of interest as defined in state law because he did not hold a leadership role or ownership stake in the organization and because there was no guarantee APCI would have won a contract and the financial benefits of it. Counts 7 through 9: The Southeast Alabama Gas District (SEAGD) The charges: More:
Opinion – Josh Moon: Roy Moore’s attack on Christianity
Enough is enough, Roy Moore. We all get it by now. By this point, there isn’t a person who has lived in this state more than a year who hasn’t listened to a lifetime worth of Moore blather on and on incessantly about his impeccable morals – which have now twice led to him failing to honor the oaths he took when becoming a Supreme Court justice – and blather even more about the moral failings of the sinners all around him. The non-Christians are ruining America. The gays are ruining marriage. The Southern Poverty Law Center is ruining law. Ambrosia Starling is ruining his dreams. It must be mighty tough to be Roy Moore, what with the weight of all that is righteous and holy resting so heavy on his shoulders alone.
Except it’s not. Moore’s faux-Christian Soldier routine is a lucrative one, hauling in millions of dollars for him and his family to spread around. There’s been more than $2.5 million in donations to Moore’s nonprofit organization, the Foundation for Moral Law, in four years. From that pot, he, his wife and his son, Caleb Moore, have earned nice salaries. There are also the questionable avoidances of serious jail time for Caleb Moore, who has now been arrested seven times, failed a drug test while in court-ordered, Christian rehab and was still provided entrance into a pre-trial diversion program following his latest arrest in March 2015. But ignore all of that. And ignore Roy Moore’s continued hateful speech. His willingness to say anything and issue any order – rule of law be damned – to enflame his followers and send them scrambling to write him a check. But mostly, ignore the fact that while Roy Moore is living like a king, reaping the fame and attention that his rhetoric brings, there are actually people out there – good, Christian men and women – teaching and living the actual Christian bible, following the kindness and goodness directed by Jesus Christ. They help the homeless. They feed the needy. They clothe the children. They fight in courtrooms and jails for the rights of the oppressed and abused. They donate their time and money, without a second thought or an expectation of glory, to help those who need it most.
They belittle no one, welcome all. They inspire people just by being themselves and set an example that make others want to live better lives. They work through churches, through government agencies, through private business and just in their own personal ways. If you are a Christian, and for even a second you’ve wondered why your religion has lost the respect or the standing it once had, it is because these people have faded deep into the shadows while the hateful, vitriolic, defensive and offensive speech and tactics of men and women like Roy Moore, Fred Phelps and Franklin Graham have come to be the face of modern Christianity. A perfect example came Thursday, when several pastors and local leaders took to the steps of the Alabama Judicial Building to rally for Roy Moore. All of them were there hoping to grab a piece of fame and notoriety, as they heaped praise on a man who faces removal from the bench for a second time and who has taken great pride in casting as many stones as possible at those who have sinned differently than him. To honor such a person while invoking the name of Jesus Christ, the disconnect from reality has to be great. And it was. Consider Troy Towns, the black vice-chairman of the Alabama GOP, advocating that states have the right to make their own laws – a position that, if followed in the past, would have left Towns speaking at the “colored podium” on Thursday.
Towns also took off on a rant about the horrors of gays being accepted into the church – a phenomenon he blamed on “too many punks in the pulpit.” And somewhere, the original Pulpit Punk – the one who shielded a prostitute, dined with thieves, forgave the immoral woman, touched the leper, washed his disciples’ feet and really harped on love and kindness – had to be disappointed that so much good has been lost to hate and greed. I hear often of the “attacks” on Christianity, and it was a popular theme at Thursday’s rally. But the only real threat to Christianity in a nation where churches are free and plentiful is from the people within who have twisted the faith for their own gain, to excuse their own bigotry and to line their own pockets. People like Roy Moore.
Dear GOP: I’m just not that into you
Dear GOP, I think we need some time apart. Yes, yes, I know we’ve been together since the 1980s. We used to have so much in common — winning the Cold War, free enterprise and most of all a can-do attitude about America. Our closest friends – the Reagans, the Bushes and later the Romneys – were admirable, and how proud we were to be in their company. What nice, upstanding types they were. We believed in standards, civility and — how quaint! — facts. Sure, there were stressful times. Not every four years was a victory party, but there were so many witty and interesting people to lift our spirits — William F. Buckley Jr., Irving Kristol, Jeane Kirkpatrick — and what fun we had defending Western civilization and skewering moral equivalence. It was inspiring. And along came the younger idealists — that nice Paul Ryan and the whip-smart Arthur Brooks. The surly ones were on the left. Nothing was ever good enough for them. The grass was always greener on the other side of the Atlantic. Then our relationship got, well, difficult. In lieu of interesting discussions, there were arguments. Yelling. Accusations. Feelings of betrayal. Instead of fighting the Democrats, we spent precious time and energy fighting one another. No more “Firing Line,” not even “Crossfire.” It got worse: One book after another by know-nothing talk show hosts, the loudmouths in talk radio, the conspiratorialists in the blogs. Suddenly it became chic to be angry and ignorant, and awkward to step outside the conservative cul-de-sac. Folks who had been preaching the gospel of personal responsibility became professional victims. The MSM! The MSM! Enough with all the whining. Between all the nasty language about our immigrant neighbors and the ranting about China, it has become tiresome. Everything’s a conspiracy. Scientists, journalists, foreigners and the miscellaneous elites — can they all be out to get us? You really need to get the whole Trump thing out of your system. The denials and lies, the name-calling. One day it’s cut taxes, then it’s raise them. One day wages are too high, and the next day Trump can’t see how people get by on so little. Yes, release his tax returns; no, then again, don’t. I get a headache just trying to keep up with all the excuses and contradictions. Pretending to be someone else, admitting it and then denying it — that’s all too weird.
Now that Reince Priebus fellow now goes around saying all that evidence of Trump’s mistreatment of women is just evidence of a plot by political opponents? Really!? (He sounds like a liberal who won’t “judge” anyone and makes excuses for all sorts of bad behavior. “It’s when people live in glass houses and throw stones that people get in trouble. . . . It’s not necessarily that people make mistakes or have regrets or seek forgiveness. It’s whether or not the person launching the charge is authentic in their own life and can actually be pure enough to make such a charge.” I confess, I haven’t a clue what he means.) Then he sounds like Chicken Little, saying the country will be destroyed if we take up with an earnest conservative. Whenever he is on TV, the poor man looks like he’s making a hostage video. I remain a realistic conservative, a believer in America’s ability and obligation to do good in the world; in the wonders of the free market — including free trade and legal immigration; in limited but energetic government (although not all centralized at the federal level); and in the rule of law and individual rights. Until you get your act together, however, I think some private time would help. I’ll enjoy being independent (still and always a reform-minded conservative) or maybe see if there are any new parties starting up. That Ben Sasse fellow from Nebraska seems awfully smart and well-grounded. You work on your anger management issues. Turn off Fox News and turn on the History Channel. Make some friends who don’t think just like you. Tolerate some iconoclasts. For heaven’s sake, get rid of Trump and get his cult followers out of their trance. No more excuses for bad behavior, and no more pretending we can hide from the rest of the world. Then let’s talk, maybe in December. By then you should have plenty of free time. Yours, Right Turn
Gov. Bentley isn’t stupid, but he thinks you are
Gov. Robert Bentley wants to play games. Thursday I wrote a column about how the governor has been using a private email account for public business, how we asked for those emails under Alabama’s Open Records Act, and how the governor’s office told us in no uncertain terms that those records are not public.
But when AL.com reporter Mike Cason asked the governor about it later that afternoon, Bentley decided to be as coy as he was condescending. “They are a public record and in fact, whoever wrote the article does not know how to ask for the material. If they would ask for it properly they could get the material,” Bentley told Cason. If it takes saying “please,” I’m not too proud to be polite. I’ll even give the governor a “pretty please with sugar on top.” But that’s not what the governor wants. Instead, the governor wants to play hide-and-go-seek. From the beginning of his administration, Bentley has used a private email address for public business. He sent work-related email from that account and he received work-related email with that account. Staff knew it, and yet when my colleague John Archibald first asked for the governor’s emails last year, he got this run-around from the governor’s spokeswoman, Jennifer Ardis.
Archibald: “So his emails are held on a private email server? I’m not sure I understand.”
Ardis: “He does not have a state email account.”
Archibald: “Does he send any email in an official capacity? Does he use email?”
Ardis: “The governor does not have nor use a state email account.”
Archibald: “Sorry to be so redundant, but does he use email at all? Seems like if he does we fall into the whole Hillary hole. How is it different?”
Ardis: “Let me check on that and I will get back to you.”
For those keeping score at home, Ardis never got back to him on that.
In fact, the governor’s office never volunteered or admitted the fact that he used only his private email account. We had to get that information from former staffers. With his private email address in-hand, I asked again for those emails. That request was denied. And Bentley blathers on. “Nothing is being hidden,” the governor said Thursday. “Everything is open. All they have to do is access it properly.”
Access it properly? How does that work? Do I say “open sesame”? Do I dance a jig on Jeff Davis’ star?
We submitted a public information request. It was clear which documents we were requesting. The governor’s office said those documents were not public. But the governor says we could have gotten them, not by asking for his email, but by asking for other people’s email. “All of that is public record,” Bentley said. “All they have to do is go and ask the person who either sent the email that’s public or received an email from me, and they can get it. That’s public record.” But here’s the thing. Let’s say that other members of the governor’s staff use private email accounts for their public job (they do), or let’s suppose the governor emails back and forth with his off-the-books senior political advisor/love interest, Rebekah Caldwell Mason at her Gmail account (he did) — using the governor’s method, none of that would be accessible. He knows that. He’s not being stupid. He just thinks you and I are stupid. And let’s face it, the reason the governor is playing this game is that he doesn’t want us to read those emails, just as he doesn’t want us to read the text messages he exchanged with Mason on his burner phone. But that’s not all that those emails could show. They could show, for instance, whether Chattanooga real estate mogul and campaign sugar daddy Franklin Haney improperly influenced the governor regarding a nuclear power plant in northeast Alabama. They could show the political machinations behind the governor’s decision to refuse expanding Medicaid. They could show whether the governor’s concerns with his former ALEA secretary, Spencer Collier, were really about malfeasance or if all that was just a cooked-up excuse invented to discredit Collier. The list goes on and on, but it’s really this simple: Bentley’s emails and text messages could reveal the truth about his administration. And that’s the last thing he wants you to see.
GOLDMAN ON HOW TO INVEST 2016 — From Goldman Sachs’s Weekly Kickstart email: “Although prediction markets currently assign a high probability that Hillary Clinton will win the election, polls in prior contests tightened as voting day approached. Increasing political uncertainty will lift equity market uncertainty in coming months. From a portfolio strategy perspective, protectionism and tax policy are two areas of debate that have investment implications.
“Buy stocks with high US sales and high effective tax rates and avoid firms with high foreign sales and low tax rates. … Politics is now a topic in every client discussion. Last week we argued the S&P 500 was vulnerable to a 5 percent-10 percent drawdown and the index could fall to 1850-1950 during the next several months although it would end the year at 2100, roughly 3 percent above the current level.”
NO NEED TO WORRY ABOUT BREXIT? — Pantheon UK’s Samuel Tombs: “Sterling rebounded last week and the probability of a Brexit, implied by betting markets, fell from 30 percent to 20 percent. … [T]he evidence that support for ‘Bremain’ has risen recently is persuasive. [S]even opinion polls were published last week, all showing that support for the status quo has risen. ‘Bremain’ had an average lead of 14 percent over ‘Brexit’ in four phone polls, exceeding the 9 percent lead in the same polls a month ago. The shift in the online polls was more modest, but visible. …
“The pick up in ‘Bremain’ support seems to reflect voters placing more weight on economic issues, and less on immigration. The economy is now the most often-mentioned consideration among voters, according to ComRes. The barrage of warnings from the Treasury, Bank of England and IMF has paid off. … The situation also still is relatively fluid; about 20 percent of people who have said that they will vote for either Remain or Leave in recent polls also said that they might change their minds”
MAYBE STILL WORRY — FT’s George Parker and Chris Giles: “Britain will be plunged into a year-long recession if it votes to leave the EU, according to a bleak analysis of the short-term economic shock of a Brexit vote to be published on Monday by the Treasury. … David Cameron and George Osborne hope the Treasury warning of an immediate hit to jobs, interest rates and house prices will be the clinching argument for undecided voters as the EU referendum campaign enters its final month.
“The Treasury analysis suggests that growth could be 3.6 per cent lower after two years if Britain votes to leave the EU, compared with the forecast for continued growth after a vote to remain. This would produce a recession similar to that of the early 1990s but not as bad as the one that followed the 2008 crash. Leave campaigners will point to the large margin of error implicit in the Treasury’s economic model, which claims that the economy could be 6 per cent lower than the current forecast under a worst-case scenario” http://on.ft.com/1YPWt42
RIGHT CONTINUES TO RISE IN EUROPE — Vienna/AFP: “Austrian far-right hopes of winning a presidential runoff remained on hold Sunday as the candidates were neck-and-neck in a battle closely watched by the EU, which is struggling to contain a surge of anti-immigrant parties. … A win would see Norbert Hofer of the Freedom Party (FPOe) become the European Union’s first far-right head of state. On Sunday evening, the vote was evenly split between Hofer of the Freedom Party (FPOe) and Green-backed economics professor Alexander van der Bellen, with both on 50.0 …
“As a result, the winner is unlikely to be known before Monday, once the postal vote has been counted. Close to 900,000 people — or a record 14 percent of Austria’s 6.4 million eligible voters — cast their ballot by mail this year. A huge influx of asylum-seekers, rising unemployment and frozen reforms has driven voters away from the two centrist parties that have dominated Austrian politics since 1945” http://yhoo.it/1XLpPm0
The far right and far left taking over from establishment candidates? Sure sounds familiar! Though in our election one establishment-friendly candidate still seems like a lock to limp to the nomination.
HRC ON TRUMP: MAYBE HE’S NOT SO RICH — Speaking of that candidate limping to the finishing line, Hillary Clinton on NBC’s “Meet the Press” : “There’s no evidence he has any ideas about making America great, as he advertises. He seems to be particularly focused on making himself appear great. And as we go through this campaign, we’re going to be demonstrating the hollowness of his rhetoric’ … She also attacked him for not releasing his tax returns and proving ‘that he actually has the level of success he claims to have.’” http://nbcnews.to/1Vf6RUe
BERNIE DOES IT TOO! — Bernie Sanders on Saturday in California: “[Trump] tells us is he is a billionaire. Who knows? He is probably as broke as everybody else is.” http://bit.ly/1YPzS7O
SENSE A THEME? — Chapter One in the “Beat Trump” playbook is to raise serious questions about whether his biggest selling point — that he is a monster success who could make America “win” again — is built on a huge pile of lies. And until Trump releases tax returns, chipping away at his personal narrative of success is not likely to be all that hard. Democrats will never pry away Trump’s true believers but they could make his recent bump in the polls his high water mark.
ASIA UP; JAPAN DOWN — Reuters: “Asian shares rose on Monday after a solid session on Wall Street, while the dollar moved away from recent highs though remained supported as investors bet that the U.S. Federal Reserve was on track to raise rates sooner rather than later. … But Japan’s Nikkei stock index extended losses, shedding 1.1 percent on worrying economic data and reports that Japan’s sales tax increase would proceed as planned.” http://reut.rs/1s3Ngef
DRIVING THE WEEK — President Obama visits Vietnam and Hiroshima, Japan in one of his last big foreign trips as president. Prior to Hiroshima, President Obama will spend two days in central Japan for his final G-7 meeting … Senate Finance has a hearing Tuesday at 10:00 a.m. on “Debt versus Equity: Corporate Integration Considerations.” … Senate Banking has Iran sanctions hearing at 10:30 a.m. Tuesday and 2:30 p.m. Wednesday … Second estimate of Q1 GDP at 8:30 a.m. Friday expected to rise to 0.9 percent from 0.5 percent.
MONDAY FUNNIES — This gun enthusiast is apparently very worried about losing the constitutional right to wax their arms. http://bit.ly/1Tt8vNh
POLL BLAST ONE: THE RACE IS CLOSE — POLITICO’s Matthew Nussbaum: “Donald Trump holds a razor-thin lead over Hillary Clinton in a Washington Post-ABC News poll released Sunday. The presumptive Republican presidential nominee leads by just 2 points, 46 percent to 44 percent, over the Democratic front-runner among registered voters — essentially a dead heat, well within the poll’s 3.5 percentage-point margin of error.
“The poll indicates a race in which Clinton once held a commanding lead is shaping up to be extremely close. Clinton led Trump 50 percent to 41 percent in a March Post/ABC poll. The new poll also tested a race in which 2012 Republican nominee Mitt Romney jumps in. In that matchup, Clinton captured 37 percent of those surveyed, with Trump 35 percent and Romney at 22 percent” http://politi.co/1WJyVQt
POLL BLAST TWO: THE RACE IS REALLY CLOSE — “Clinton edges past … Trump by just three points in a new national NBC News/Wall Street Journal poll released Sunday. Clinton leads Trump 46 percent to 43 percent, within the poll’s 3.1 percentage-point margin of error. … Clinton led Trump 50 percent to 39 percent in an April NBC News/Wall Street Journal poll” http://politi.co/1Wb6b35
GREECE APPROVES AUSTERITY — Bloomberg: “Greek lawmakers on Sunday approved additional austerity measures required to unlock more emergency loans from the euro area, ahead of a meeting of finance ministers that will assess the country’s compliance with its bailout program and determine the scope for debt relief.
“Prime Minister Alexis Tsipras secured backing for measures ranging from the taxation of clothing made from crocodile skin to the sale of bad loans to distressed debt funds, after winning the support of the 153 lawmakers from the governing Syriza and Independent Greeks parties in the 300-seat chamber. Syriza governing party lawmaker Vasiliki Katrivanou voted against articles setting up a new privatization fund and the creation of a fiscal break mechanism of contingent measures” http://bloom.bg/1WbfQXu
CUBAN ON WALL STREET — Dallas Mavericks owner Mark Cuban on NBC’s “Meet the Press”: “[T]here’s an issue right now for me with market structure. I think we’re at a significant risk, with high frequency trading because what’s happening and, you know, the original goal of Wall Street was to be able to create a source of capital for companies to grow, create liquidity and allow investors to invest.
“But what we’ve evolved to now with things like high frequency and algorithmic trading, but in particularly high frequency trading, is that it’s all about financial engineering. … And so, if you put just a miniscule tax on each trade and possible even a smaller tax on each quote, you’re going to see Wall Street, you’re going to see markets gear back toward actual investments” http://nbcnews.to/27NWrQj
MARKETS START TO GET THE FED RIGHT — HFE’s Jim O’Sullivan: “Fed officials had been expressing the view that markets were pricing in too much pessimism and not enough Fed tightening, but it took the more hawkish-than-expected FOMC minutes to get a meaningful reaction. The amount of tightening being priced in over the next year and a half is still far too low, in our view, but at least the implied probability of a move at one of the next two meetings is no longer negligible.
“We think the probability of another tightening move as soon as the June meeting is higher than the estimated 28 percent priced into markets, although we agree it is still below 50 percent. We see a better-than-50 percent probability of a move by the July meeting. We continue to forecast two quarter-point moves this year and four next year”
ICYMI: TIM O’BRIEN ON TRUMP’S WEALTH — Bloomberg View’s Timothy L. O’Brien: “What were the ‘incredible’ numbers the presumptive Republican presidential nominee disclosed in the new filing? More than $557 million in ‘income,’ up from $362 million he disclosed in an FEC document filed last July. Hold on, though. In a press release, the Trump team also described that $557 million as ‘revenue.’
“To be clear, ‘income’ is meant to be the amount of money Trump puts in his own pocket each year and ‘revenue’ is the amount of money his businesses pull in (before expenses and other goodies that reside above the bottom line). As he did in his July release, Trump appears to be conflating income and revenue in his public disclosures. These figures also look a little odd when paired with reporting from Crain’s Aaron Elstein, which showed that Trump received a New York State tax break reserved for households with annual incomes of $500,000 or less” http://bloom.bg/1NFGJQD
DOMESTIC MANUFACTURERS BEAT EXPORTERS — WSJ’s Lisa Beilfuss: “The fortunes of U.S. manufacturers are increasingly divided between those looking outward and those looking inward. Global industrial giants are struggling under the weight of a strong dollar, reeling commodity markets and weak demand in emerging and advanced economies alike, from Brazil to Europe to China. But domestically oriented U.S. manufacturers are faring better, with steadier business buoyed by the relatively brighter auto, housing and job markets.
“The split conditions, seen throughout the latest corporate earnings reports and gauges of U.S. factory activity, reflect broader tensions plaguing the global economy. While the world’s largest economy — the U.S. — is struggling to accelerate, it is performing better than many of its counterparts struggling just to stay above water. … At Nation Ford Chemical Co. in South Carolina, about 20 miles outside of Charlotte, N.C., president Jay Dickson is having a hard time finding enough workers to keep up with brisk business … At Caterpillar Inc., on the other hand, some gears are stuck” http://on.wsj.com/1RiL0nG
STILL TOUGH FOR WOMEN ON WALL STREET — NYT’s Susan Antilla — “Smith Barney paid $150 million in arbitration awards and settlements in the [Boom Boom Room] case, and it and other Wall Street firms rushed to set up anti-harassment training, employee hotlines and programs to recruit women. Twenty years later, permanent change is less obvious. … Complaints persist about pay and promotion disparities and a lack of women in senior management roles, and frustrations are growing about the limited ability of individuals to seek damages in court. …
“Women are slowly joining the senior ranks of Wall Street firms. Last year, women at Deutsche Bank represented 20.5 percent of the firm’s directors and managing directors, up from 17.1 percent in 2011, according to its 2015 human resources report. Goldman Sachs’s latest class of managing directors was 25 percent female, the highest proportion since that title was created in the mid-1990s. The least progress has been made in pay. Last week, a managing director at Bank of America Merrill Lynch filed a gender-discrimination complaint in federal court in New York, noting that her 2015 bonus was $1.55 million while her male counterpart’s was $5.5 million” http://nyti.ms/1s3HEAE
SPEAKING OF BOYS CLUBS — Bloomberg’s Keri Geiger: “A managing director suing Bank of America for gender discrimination by what she called an in-house ‘bro’s club’ has set traders on Wall Street buzzing because of a host of other practices alleged in the complaint — including front- running, lying to customers and manipulating bond prices. …
“The lawsuit by Megan Messina, a 42-year-old co-head of the global structured credit products team, describes practices similar to those at the center of a longstanding investigation of the bank by federal prosecutors in Charlotte, where the bank is based.” http://bit.ly/1TDLqLh
10:25 am || Participates in an arrival ceremony with President Tran Dai Quang of Vietnam; Presidential Palace, Hanoi, Vietnam
10:50 am || Meets with Vietnamese President Tran Dai Quang, Presidential Palace
Noon || Meets with Chairwoman Nguyen Thi Kim Ngan of the National Assembly of Vietnam; International Convention Center, Hanoi
1:05 pm || Obama and Quang hold a press conference; Presidential Palace
2:20 pm || Attends a state luncheon; Internationa Convention Center
3:50 pm || Holds a bilateral meeting with Prime Minister Nguyen Xuan Phuc of Vietnam; Presidential Palace
4:50 pm || Meets with General Secretary Nguyen Phu Trong of the Communist Party of Vietnam; Central Office of the Communist Party of Vietnam, Hanoi
All times Indochina Time, which is 11 hours ahead of U.S. Eastern
The House will move ahead with its appropriations process this week despite the risk of another culture war erupting on the floor, while the Senate takes up a defense policy bill before leaving for the Memorial Day recess.
The $602 billion defense authorization before the Senate broadly outlines policy for the Pentagon and military branches, including limitations on President Obama’s push to close the Guantanamo Bay detention center and whether women should be required to register for the Selective Service.
The “must pass” bill attracts hundreds of amendments each year, and lawmakers are expected to battle over a handful of controversial proposals.
Conservative senators are expected to try to remove a provision that would require women to register for the Selective Service, allowing them to be called up if the country returns to a draft.
While the measure was defeated in the House, opponents could face an uphill battle in the Senate.
A push to remove the provision was already defeated in committee. A separate bill noting that only Congress can change the Military Selective Service Act, which outlines who is eligible for the draft, has stalled.
While the bill largely holds the line on current restrictions on Guantanamo Bay detainee transfers, Sen. James Inhofe (R-Okla.) said earlier this month that he would push for additional measures.
“I intend to file amendments that… put more safeguards in place to mitigate the threat created by the release of high risk Gitmo detainees,” he said in a statement.
McCain is also expected to open a spending fight with Democrats, who have said breaking the two-year budget deal is a non-starter for their caucus.
The Arizona Republican said in a speech at the Brookings Institution on Thursday evening that he would push for at least an additional $17 billion.
He also sent a “dear colleague” letter ahead of the Senate’s debate, stressing that he believes the current spending caps are undercutting the military.
“For the sake of the men and women serving in our military, I believe the Senate must make a different choice,” he wrote in the letter. “I am committed to seeking solutions to give our service members the resources, training, and the equipment they need and deserve.”
The House passed its version of the defense authorization last week.
D.C. budget autonomy
The House is expected to consider legislation that would repeal a referendum approved by District of Columbia voters three years ago that grants the city the ability to spend local tax dollars without approval from Congress.
A D.C. judge upheld the referendum in a March ruling. But Rep. Mark Meadows’s (R-N.C.) legislation would ensure that the newfound budget autonomy wouldn’t be allowed to go forward.
Under the referendum, D.C.’s budget would still be sent to Congress for a 30-day review. If Congress does not try to change it during that timeframe, the city could proceed as if the budget were automatically approved.
Supporters of the referendum, including D.C.’s non-voting representative in Congress, Del. Eleanor Holmes Norton (D), view it as a step toward statehood.
Meadows, who chairs the House Oversight subcommittee with jurisdiction over D.C., warned during a hearing this month that D.C. government employees could face penalties if the city spends money without congressional approval.
Norton’s office said Friday that she plans to file an amendment that would grant D.C. budget autonomy as an act of Congress. However, GOP leaders might decide against giving her amendment floor consideration.
Energy, environmental regulations
The House is slated to consider a major compromise bill this week to overhaul chemical safety laws.
Bipartisan lawmakers unveiled the legislation on Friday after nearly a year and a half of negotiations. It would reform the Toxic Substance Control Act (TSCA) after decades of complaints that it’s no longer effective.
The measure on the House floor this week would grant the Environmental Protection Agency (EPA) new authority to test and regulate thousands of chemicals considered potentially harmful. The EPA has only banned six chemicals under the TSCA law.
In addition, the House will take up a bill that failed to pass last week under a fast-track procedure that would prohibit the EPA from requiring permits to spray federally approved pesticides into new bodies of water.
The measure was rebranded as a means to help combat the spread of the Zika virus. But opposition from Democrats prevented it from clearing the two-thirds majority threshold to pass it. This time, Republicans are returning it to the floor under a procedure requiring only a simple majority.
The House is also expected to take the procedural steps necessary this week to go to a conference committee with the Senate on an energy reform bill. If negotiators strike a deal this year, it will be the first energy policy overhaul in nearly a decade.
A bulk of the House’s time in session this week will be spent on consideration of the 2017 spending bill for the Department of Energy and water infrastructure projects.
The $37.4 billion measure is expected to be considered under a freewheeling process that allows lawmakers to offer unlimited numbers of amendments, which could open up the possibility of politically risky votes.
The House considered its first spending bill of the year, for the Department of Veterans’ Affairs, last week using the same procedure. That resulted in Democrats offering two particularly controversial amendments regarding the display of the Confederate flag and prohibiting discrimination on the basis of sexual orientation.
The energy spending bill is usually one of the easiest of the 12 annual appropriations to pass. However, a floor fight could erupt again if Rep. Sean Patrick Maloney (D-N.Y.) reprises his amendment from last week to prevent LGBT discrimination.
GOP leaders held last week’s vote open for seven minutes as they scrambled to convince enough Republicans to change their votes so that Maloney’s measure wouldn’t pass.