How an industry helps Chinese students cheat their way into and through U.S. colleges
IOWA CITY, Iowa – The advertisements were tailored for Chinese college students far from home, struggling with the English language and an unfamiliar culture. Coaching services peppered the students with emails and chat messages in Chinese, offering to help foreign students at U.S. colleges do much of the work necessary for a university degree. The companies would author essays for clients. Handle their homework. Even take their exams. All for about a $1,000 a course. For dozens of Chinese nationals at the University of Iowa, the offers proved irresistible. “Test-taking services. Paper-writing. Take Online Courses for you,” says the social-messaging profile of one Chinese coaching outfit used by Iowa students, UI International Student Services. A pitch emailed by another business ended with this reassuring claim: “Your friends are all using us.” Today, the University of Iowa, one of the largest state universities in the American Midwest, says it is investigating at least 30 students suspected of cheating. Three sources familiar with the inquiry say the number under investigation may be two or three times higher. University spokespeople declined to name the students or comment on their nationality, citing academic privacy laws. But those familiar with the investigation said that most, perhaps all, of the cheating suspects are Chinese nationals. They stand accused of cheating in online versions of at least three courses, including law and economics. Three of the Chinese suspects admitted to Reuters that they hired Chinese-run outfits to take exams for them. More:
Mt. Gox Creditors Seek Trillions Where There Are Only Millions
$2,411,412,137,427. That figure — $2.4 trillion for those with an untrained eye for very large numbers — is in the same ballpark as the annual economic output of France. It is also exactly the amount that people around the world claim they lost when Mt. Gox, the Tokyo-based virtual currency exchange, collapsed into bankruptcy in 2014, after huge, unexplained losses of the volatile digital currency Bitcoin. As with most of the people who lost money with Bernard L. Madoff, the investment manager who was convicted of running a Ponzi scheme, most of those who put their Bitcoin in Mt. Gox will be disappointed: The Japanese trustee overseeing the case said on Wednesday that only $91 million in assets has been tracked down to distribute to claimants — a small portion of the more than $500 million in assets that Mt. Gox claimed it had in the weeks before it went bankrupt in February 2014, and a tiny portion of the amount that claimants have requested. The giant gaps between those numbers are an indication, if nothing else, of the sheer number of dishonest people who have been drawn to the fiasco around Mt. Gox and Bitcoin. They are also the latest reminders of the topsy-turvy nature of the digital-currency realm. A currency designed to bring computer precision and traceability to money has been marked by multiple unsolved mysteries swirling around it. Journalists and others have made many unsuccessful attempts to determine the true identity of the creator of the Bitcoin technology, a programmer or group of programmers going by the name Satoshi Nakamoto. Bitcoin experts and law enforcement officials have spent over two years trying to figure out how hundreds of thousands of Bitcoins disappeared from the Mt. Gox exchange. There have been lots of conspiracy theories but few solid answers. The amount that claimants have requested from the Mt. Gox bankruptcy estate is absurd on its face, given that all the Bitcoins in the world today are worth about $7 billion, or 0.3 percent of the $2.4 trillion being claimed. Most of that huge number is an outsize claim by one individual — but even after that is taken out, the rest of the claimants said they lost some $27 billion, or 54 times what the exchange claimed it held before it went under. The trustee said on Wednesday at a meeting with creditors that $414 million of the claims appeared to be legitimate and have been approved. Each of those claimants will get some portion of the $91 million. It is not yet clear how much because of outstanding lawsuits and investigations. Bitcoin investors have complained about how long it has taken to work through the claims, not to mention the legal and accounting costs. The trustee reports that those costs have added up to about $55 million so far. More:
Citigroup Fined in Rate-Rigging Inquiry but Avoids Criminal Charges
Citigroup on Wednesday became the latest big bank accused of trying to manipulate global interest rates, a reminder of Wall Street’s wide-ranging abuse of power in these markets. The Commodity Futures Trading Commission, a federal regulator that oversees Wall Street, announced $425 million in penalties against Citigroup, covering two overlapping cases. And yet Citigroup faces no criminal charges. In an unexpected move, the Justice Department confirmed on Wednesday that it had closed its investigation into Citigroup and some of the other banks suspected of manipulating an interest rate benchmark commonly known as the Isdafix. Still, the trading commission’s civil cases against Citigroup join a long list of actions against banks suspected of manipulating benchmark interest rates and currencies. Last year, the trading commission and the Justice Department announced civil and criminal charges against four of the world’s biggest banks, Citigroup included, for a scheme to manipulate the value of the world’s currencies. “We will vigorously continue to investigate any efforts to manipulate financial benchmarks, and we will take action where possible to protect the integrity of these benchmarks,” Aitan Goelman, the trading commission’s enforcement director, said in a statement on Wednesday. All told, banks have paid more than $15 billion in penalties for the cases. Including those announced on Wednesday, Citibank alone has agreed to pay $735 million. “These settlements represent a significant step for Citi in resolving its legacy benchmark rate investigations,” the bank said in a statement. “In addition to adopting industrywide reforms related to participation in benchmark rates, Citi has made substantial investments in its systems, controls and monitoring processes to better guard against inappropriate behavior. Our greatest priority is to ensure that we conduct business in keeping with the highest ethical standards.” The action against Citigroup centers on its attempts to manipulate a global benchmark rate that is a crucial tool for valuing a wide range of products across financial markets. The benchmark is known as the International Swaps and Derivatives Association Fix, or, in Wall Street parlance, the Isdafix. Its rates are published daily for various interest rate derivatives contracts, which banks trade with other financial institutions and sell to clients looking to either hedge against a swing in interest rates or to speculate on the markets. At the time of the misconduct, which ran from 2007 to 2012, Citigroup sat on a panel of banks that each submitted what was supposed to be a reasonable bid for interest rate derivatives. An average of those submissions formed the Isdafix benchmark rate for that day. But rather than submit an honest bid, Citigroup “made false reports” that skewed its submissions, the trading commission said. The bank’s motive, the agency said, was to benefit its own trading positions at the expense of its trading partners’ and clients’. As with earlier manipulation cases, regulators plowed through emails and instant messages between traders at Citigroup in which they discussed trying to “push” the prices on interest rate swaps to get better deals on derivative transactions the banks was handling. In one March 2008 instant message, a Citigroup trader boasted, “I am very proud of myself,” after telling colleagues he had pushed the prices of a “swap on the screen.” An indication that traders within Citigroup were working to manipulate the Isdafix is revealed in emails sent in 2010 after the publication of a newspaper article on the C.F.T.C.’s preliminary investigation. Upon reading the article, some Citigroup derivatives traders responded with comments such as “Game over” or “Ouch.” More:
At Swinging Wall Street Parties, the Feds Are Now on the Prowl
The drinks were flowing in Miami Beach that evening when Wall Street’s top cop crashed the party. As dealmakers crowded around the sleek circular bar at the Fontainebleau hotel in Miami last September, folks from the Securities and Exchange Commission were mingling, looking for their next big case. Awkward, yes — but not uncommon these days. Like a skunk at a garden party, the SEC has been moving in on the fun-loving Wall Street conference circuit in hopes of getting a better handle on who’s up to no good in the world of finance. Officials scour attendee lists to spot the biggest players in advance and, properly wearing name tags, schmooze over drinks. Of course, they don’t accept any — that’s a no-no under SEC policy. The SEC isn’t the only regulator trawling conferences for tips of suspicious conduct. The Commodity Futures Trading Commission was especially transparent about its intentions when it set up a booth in the middle of an industry gathering in March. Attendees at the opulent Boca Raton Resort & Club in Florida were greeted by smiling agency officials handing out metal whistles emblazoned with “CFTC” and mouse pads advertising their toll-free number. The efforts show how regulators are trying to step up their game after missing Bernard Madoff’s Ponzi scheme and facing criticisms that they didn’t spot Wall Street abuses that led to the 2008 financial crisis. “You have to credit the SEC for trying to understand what’s actually happening in the market,” said Pat Smith, a former federal prosecutor and partner at Smith Villazor in New York. “There’s been a lot of criticism over the years that there’s a lack of sophistication about markets and industry practice.” The SEC has focused on bond conferences including ABS East and ABS Vegas, said people with knowledge of the matter who asked not to be named because the regulator’s efforts aren’t public. Held at luxury hotels in Miami as well as Las Vegas, the four-day conferences bring together investors and originators of debt backed by everything from car loans to jewelry. Kevin Callahan, an SEC spokesman, declined to comment as did Caitlin Fitzpatrick for Information Management Network, the conference organizer.
OCC Fines Wells Fargo $70 Million for Servicing Issues, Ends Consent Order Dating Back to 2011
The Office of the Comptroller of the Currency on Wednesday assessed a $70.0 million civil money penalty against Wells Fargo for violations of a consent order issued back in 2011. But the fine accompanied the termination of the consent order and the end of servicing-related restrictions Wells has been under since June 2015. The OCC said the civil money penalty against Wells was due to violations of the consent order as recently as 2015 and a failure to correct deficiencies in a timely fashion. In June 2015, the OCC amended its servicing-related consent orders with Wells and five other banks, placing a number of restrictions on servicing activities due to their failures to meet requirements under the consent orders. Since then, Wells has faced restrictions regarding acquisitions of servicing, mortgage servicing rights and origination business entities. The company also was required to receive approval from the OCC before completing certain servicing-related activities. Wells – the nation’s largest servicer of home mortgages, according to Inside Mortgage Finance – has been shrinking its servicing portfolio the past few years. Four other banks were released from similar restrictions by the OCC earlier this year and assessed civil money penalties, with the highest fine going against JPMorgan Chase Bank at $48.0 million. HSBC Bank is the only bank that remains under restrictions set by the OCC last June.
FDIC Report Shows Mobile Banking Can Help Underserved Consumers
Mobile banking can help underserved consumers obtain more control over their finances and increase access to mainstream banking, according to a Federal Deposit Insurance Corporation (FDIC) report released today. The report was released at a meeting of the FDIC’s Advisory Committee on Economic Inclusion (ComE-IN), which focused on Mobile Financial Services (MFS). The paper, Opportunities for Mobile Financial Services to Engage Underserved Consumers, reports on the findings from qualitative research with consumers and industry stakeholders and identifies a set of strategies for banks to consider to better position them to meet underserved consumers’ needs. Underserved households are those that are either unbanked or underbanked. Unbanked households are those without an account at an insured banking institution. Underbanked households have an account but also utilize nonbank alternative financial services providers. The FDIC is committed to expanding economic inclusion in the financial mainstream by ensuring that all Americans have access to safe, secure, and affordable banking services. Access to an account at a federally-insured institution provides households with the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, build a credit history, and access credit on fair and affordable terms. Broad participation in mainstream banking also reinforces public confidence in the financial system. The study identifies seven core financial services needs for underserved consumers:
The Don’t Ask, Don’t Tell Guide to Trading on Inside Information
On Friday, July 27, 2012, Phil Mickelson received a phone call. It wasn’t just any call; it was, according to the U.S. Securities and Exchange Commission, a transmission of business intelligence potentially worth millions of dollars. Mickelson’s friend, a gambler named William Walters, was calling to urge him to buy shares of Dean Foods. The Dallas-based dairy conglomerate was going to announce a spinoff of its organic foods unit the following week, and the company’s board thought it would cause Dean stock to pop. Walters had gotten the tip from the best possible source, a board member who’d participated in the conference call where the board encouraged the Dean chief executive officer to move ahead. It was about as close to a sure thing as you could get, and Walters, who understood odds better than most people, had already accumulated almost 4 million shares, an aggressive bet worth about $50 million. The golf great was hardly a high-velocity stock trader. Mickelson, who’s made almost $80 million over his playing career, had never before invested in Dean, according to the government. Yet that following Monday and Tuesday, he allegedly purchased 200,240 shares, partly on margin, for $2.4 million. A week later, on Aug. 7, Dean announced the spinoff, and as the board had predicted, the stock shot up 40 percent. Walters made $17.1 million and Mickelson $931,000. Three people, one a celebrity athlete, with access to internal information about a publicly traded company. Advantages the majority of investors in the market didn’t—and aren’t supposed to—have. Several perfectly timed trades yielding millions in profit. If one were to describe the transaction to a layperson, it’s likely that it would sound like a crime. Securities investigations travel at an inchworm’s pace, and almost four years later, on May 19, the U.S. attorney for the Southern District of New York, Preet Bharara, stood in front of a room full of reporters to announce securities fraud charges against Walters and his source, former Dean board member Thomas Davis. More:
Airlines Spend Millions in Bid to Cut TSA Lines in Record Summer
U.S. airlines and airports are spending millions on added workers to avoid a repeat of long security lines, as the coming Memorial Day weekend kicks off what’s expected to be a record year for summer travel. “We are concerned for this weekend, where we’ll see higher than normal flight loads,” said Ross Feinstein, a spokesman for American Airlines Group Inc. “That will just continue into June and pretty much all the way to September.” American, Delta and United airlines will spend as much as $4 million each for extra workers at their busiest airports to help manage lines and shuffle bins at checkpoints — freeing up Transportation Security Administration officers to focus on screening. Carriers and airports also are diverting some of their own employees to take the load off TSA staff. The efforts follow waits of as much as three hours in security lines starting last month that caused thousands of travelers to miss flights and led to hearings in Congress this week on the agency’s woes. Summer air travel is forecast to climb 4 percent this year to a record 231.1 million passengers, according to the Airlines for America trade group. U.S. travelers are being lured to the skies by relatively low air fares. In addition, inexpensive gasoline makes driving more attractive. AAA, the auto club, predicts that more than 38 million Americans will travel by air and road this weekend, which would be the second-highest volume on record and the most since 2005. Yet 22 percent of 2,500 people surveyed said long airport lines would prompt them to avoid air travel or delay their trips, according to research conducted last week by the U.S. Travel Association. The lost travel spending would total $4.3 billion from June through August, the industry group said. The TSA advises passengers to arrive two hours early for domestic flights and three hours in advance for international travel, and the busiest airports are the most vulnerable to delays. Hartsfield-Jackson Atlanta International, Los Angeles International, Chicago’s O’Hare International, Dallas-Fort Worth International and New York’s John F. Kennedy International are the five busiest U.S. airports, according to Airlines for America. More:
The States Strike Back on Transgender Rights
Officials from 11 states filed a lawsuit Wednesday to reverse the Obama administration’s legal stance on transgender discrimination in public schools, setting up a second major legal battle over transgender rights in the federal courts. The complaint, filed by Texas Attorney General Ken Paxton on behalf of a local school district, asks the federal district court in northern Texas to block the administration from implementing its May 13 guidance letter on protecting transgender rights in public schools. State attorneys-general from Alabama, Georgia, Louisiana, Oklahoma, Tennessee, Wisconsin, West Virginia, and Utah joined the lawsuit, as well as Arizona’s Department of Education and Maine Governor Paul LePage. In the guidance letter, the U.S. Education and Justice Departments notified every public-school district in the country that Title IX, which prohibits discrimination on the basis of sex, also applies to gender identity. Under that interpretation, public schools that discriminate against transgender students could risk losing access to federal funds. More:
Clinton did not comply with federal email policy, watchdog finds
Democratic presidential candidate Hillary Clinton’s use of a private email server while U.S. secretary of state broke government rules and was not approved by State Department security officials, according to an internal government watchdog’s report released on Wednesday. Clinton’s use of the private email server in her home in Chappaqua, New York, for government purposes has prompted several investigations, including an ongoing probe by the Federal Bureau of Investigation. The email controversy has hung over her campaign for months. The report by the department’s inspector general cited “longstanding, systemic weaknesses” with State Department records that predated Clinton’s tenure, and found problems with the email record-keeping of some of her predecessors. But it also singled out Clinton, the front-runner in the race to become the Democratic presidential nominee, for her decision to use a private email server for government business, apparently without seeking authorization. “OIG found no evidence that the Secretary requested or obtained guidance or approval to conduct official business via a personal email account on her private server,” the report said, using an abbreviation for the office of inspector general. The report said she should have discussed the arrangement with the department’s security officials. Officials told the inspector general’s office that they “did not – and would not – approve her exclusive reliance on a personal email account to conduct Department business.” The reason, those officials said, is because it breached department rules and presented “security risks.” More:
What the new inspector general report on Hillary Clinton’s emails actually says
On Wednesday, the State Department’s inspector general released a long-awaited report on the email practices of former Secretary of State Hillary Clinton, other former secretaries of state, and the State Department more broadly. And while the report is filled with impenetrable lingo about records management and bureaucratic processes, it ends up pretty clearly concluding that Clinton’s practices around using a personal email account for all her State Department business were not “appropriate.” Now, this inspector general’s report isn’t the main event in the Clinton email scandal — that’s the FBI probe into whether any criminal activity, such as mishandling of classified information, took place. That’s still underway, though there are reports that it may be nearing completion. Still, it’s significant that State’s inspector general, Steve Linick, has two broad sets of criticisms aimed at Clinton here: the first set related to records management policies, and the second set related to potential security risks. The first issue here relates to whether records of government business were appropriately preserved, according to the Federal Records Act and various regulations. As is well-known, Clinton used her personal email account, which was hosted on a private server, for all her State Department–related emails — she never even bothered to set up a government email address. And all the time she was at State, she apparently made no effort to hand over records of her emails to the government. Only after she had left and State started making inquiries — in 2014 — did she turn over about 30,000 emails she deemed related to government business. Clinton and her aides have a defense here. They argue that she almost always emailed her State Department subordinates at their government email addresses. Therefore, they said, the email records would end up being preserved from the subordinates’ end of each conversation. But the IG doesn’t buy it, and called this “not an appropriate method” of preserving federal records. Clinton should have filed her records at the time, and certainly before she left government, Linick writes. More:
Election model predicts Clinton over Trump
President Obama’s strong approval rating is bolstering Democratic chances of holding the White House, according to a closely followed election model. Moody’s Analytics is forecasting that the Democratic nominee, who is widely expected to be Hillary Clinton, will win the presidency in November over presumptive Republican nominee Donald Trump. “President Obama’s approval rating has crossed over the important 50 percent threshold for the first time in almost four years,” said Dan White, a Moody’s economist who oversees the model. Aside from rising gasoline prices, a drop in Obama’s approval rating is the only model variable that could possibly move far and fast enough to push the model in Republicans’ favor by November, White said. “This sudden surge could be a result of the messy primary season or a relative lull in geopolitical news from overseas,” White said. Moody’s latest model shows for the third straight month that the Democratic nominee would take 332 electoral votes compared with 206 for the Republican nominee. The model has predicted every election correctly since it was created in 1980.
Democrats also are running ahead, although by narrow margins, in the key swing states of Ohio, Virginia, Pennsylvania, Florida and Nevada. The model has predicted a Democratic victory in 2016 since its first forecast was released in July 2015. The president’s approval rating is a first-time variable added into the model for this election cycle and White said it has proven significant historically, “and back-tested extremely well, particularly in other atypical election cycles.” He cited the 1988 election, when Republicans pulled off the rare feat of winning the White House for three straight terms. “In light of the myriad unusual factors swirling around this election, its inclusion may prove particularly prudent in 2016,” White said. The latest Gallup poll for May 9-15 shows the president’s approval at 51 percent. If Obama’s approval rating holds, the two-year increase in favorability running up to the election would surpass even that of President Reagan’s at the end of the Cold War, White said. White explained that the model measures the two-year change in the approval rating running up to election day. The model appears to be at odds with some national polling that shows a tight presidential race. Clinton leads Trump by single digits in a New York Times/CBS News poll released on Thursday. She leads the businessman by 6 points, 47 to 41 percent, among registered voters in a hypothetical general election matchup.
Two other polls this week — from Fox News and Rasmussen Reports — showed Trump with a single-digit lead.
Trump aide mistakenly emails Politico reporter for Clinton dirt
One of Donald Trump‘s aides accidentally emailed a reporter from Politico to ask for information about the Whitewater real estate deal. The aide, campaign spokeswoman Hope Hicks, meant to respond to Trump campaign adviser Michael Caputo, but instead contacted Marc Caputo, a political reporter. The email included text from a message Michael Caputo sent to a Republican National Committee researcher asking him to “work up information on HRC/Whitewater as soon as possible,” Politico reported Wednesday. Hicks was copied on the email. “This is for immediate use and for the afternoon talking points process,” the email said. The Hicks response — accidentally sent to Marc Caputo — said the RNC researcher, Michael Abboud, “is still an employee of the RNC.” “We need to be sensitive to that until he comes over to our team full time,” the email said. Whitewater is a controversy referring to Bill and Hillary Clinton‘s real estate development through a company they formed called the Whitewater Development Corporation. There were allegations that Bill Clinton used his influence as Arkansas governor to get a $300,000 loan to the Clintons’ partner in the deal. After he was elected president, the Justice Department and Congress looked into the deal, but the Clintons were not prosecuted. RNC chief strategist Sean Spicer said in a statement that the Whitewater request was “just another example of Republican campaigns up and down the ballot looking to us for the best information. “Whether it’s the Trump campaign or top Senate, House or down ballot candidates we will consistently provide them with the resources they need to win.”
Gov. Bentley scandal: Bentley gets court date to fight Spencer Collier lawsuit
Gov. Robert Bentley this week requested, and received, a court date to fight allegations made by former ALEA head Spencer Collier in his wrongful termination lawsuit. On Wednesday, Montgomery County Circuit Judge Johnny Hardwick set a hearing for July 26 for all motions pending in the lawsuit. Bentley on Monday filed a motion seeking to be dismissed as a defendant in the lawsuit. Collier’s replacement as Alabama Law Enforcement Agency Secretary Stan Stabler also filed a similar motion as well as Bentley for Governor Inc. Collier’s lawsuit names as defendants Bentley, Stabler, Bentley’s re-election campaign, Rebekah Mason (Bentley’s former adviser and, Collier said, the woman with whom the governor was having an affair), Mason’s PR company RCM Communications and Alabama Council for Excellent Government (the dark money group that paid Mason’s salary). Both Bentley and Stabler, in their motions to dismiss, requested oral arguments to make their case. Attorneys in the case have until July 19 to submit all filings to be considered during the hearing, according to Hardwick’s order. Gov. Robert Bentley responds to statements made by Spencer Collier, the now former head of the Alabama Law Enforcement Agency, Wednesday, March 23, 2016, in Montgomery, Ala. Bentley fired Collier Tuesday after Collier claimed to have evidence of an affair between Bentley and a senior adviser. Gov. Robert Bentley this week requested, and received, a court date to fight allegations made by former ALEA head Spencer Collier in his wrongful termination lawsuit. On Wednesday, Montgomery County Circuit Judge Johnny Hardwick set a hearing for July 26 for all motions pending in the lawsuit. Bentley on Monday filed a motion seeking to be dismissed as a defendant in the lawsuit. Collier’s replacement as Alabama Law Enforcement Agency Secretary Stan Stabler also filed a similar motion as well as Bentley for Governor Inc. Collier’s lawsuit names as defendants Bentley, Stabler, Bentley’s re-election campaign, Rebekah Mason (Bentley’s former adviser and, Collier said, the woman with whom the governor was having an affair), Mason’s PR company RCM Communications and Alabama Council for Excellent Government (the dark money group that paid Mason’s salary). Both Bentley and Stabler, in their motions to dismiss, requested oral arguments to make their case. Attorneys in the case have until July 19 to submit all filings to be considered during the hearing, according to Hardwick’s order. The suit claims defamation of character, invasion of privacy, wrongful termination and reckless conduct, among other things. Bentley’s 13-page motion to dismiss was filed by attorneys John Neiman, Stephanie Houston Mays and Mark Foley Jr. Their argument states that Bentley is protected from the lawsuit by sovereign immunity because he was performing his duties as governor when he fired Collier. The motion also asserts Collier’s lawsuit does not state a claim upon which relief can be granted. The same team of attorneys filed Stabler’s response, also asserting that no claim was stated in the lawsuit against Stabler upon which relief can be granted. Gov. Robert Bentley motion to dismiss
Witness: Hubbard sought investors to shore up troubled business
OPELIKA — House Speaker Mike Hubbard, R-Auburn, didn’t make any money off his printing company, Craftmaster, while he was running the state House of Representatives, one of Hubbard’s business partners testified in a Lee County courtroom this morning. In fact, none of Craftmaster’s owners saw a profit. “When we bought the company it was $8.8 million in debt. It’s almost like raising the Titanic,” said Barry Whatley, a co-owner of Craftmaster, an Auburn company that prints political advertisements. Craftmaster lies at the heart of the 23-count indictment in Hubbard’s corruption trial, which started this week. Prosecutors allege Hubbard, an owner of the printing company, directed party officials to send business to Craftmaster when Hubbard was chairman of the Alabama Republican Party. Prosecutors also say that later, as House speaker, Hubbard violated state ethics laws by seeking investments in Craftmaster from business leaders with business before the Legislature. In his Wednesday testimony, Whatley outlined the history behind that push for new investors. Under questioning by prosecutor Matt Hart, Whatley said he and Hubbard were among the investors who bought the struggling printer in 2000. The business never made substantial money, Whatley said, and filed for bankruptcy in 2005. Much of the difficulty, he testified, was due to the need to pay for presses previous owners had purchased. Later the business fell behind on its payroll taxes, Whatley said. “We were submitting the paperwork but we were not paying the payments,” Whatley said. Whatley said the company sought out $1.5 million in investments — $150,000 each from 10 investors — to help keep the business afloat. He said Hubbard secured eight of the 10 new investors, all chosen from among people wealthy enough to take a risk on the business. Hubbard is accused of violating ethics law in seeking those investments. Potential investors named in the indictment include Jimmy Rane, the owner of the company that makes the treated lumber known as Yellawood; James Holbrook of the financial firm Sterne Agee; and Robert Burton, president of Hoar Construction. All the potential donors in the indictment employ lobbyists, prosecutors say, indicating they have business before the Legislature. Prosecutors also asked Whatley about the company’s relationship with Majority Strategies, a Florida-based political consulting company that got hundreds of thousands of dollars in business from the state GOP when Hubbard was party leader. Majority Strategies took on Craftmaster as its printer for that work. The relationship between the two companies was sometimes rocky: Prosecutors asked Whatley to read from an email exchange between Whatley and a Majority Strategies executive who was dissatisfied with Craftmaster’s work. “Over $500,000 of work has been sent to Craftmaster at the request of Mike over the years and we still have to deal with this attitude?” Whatley said, quoting the 2013 email. On cross examination, Hubbard’s lawyers asked Whatley if Hubbard had profited from any of those business dealings, given the company’s struggles to be profitable. Whatley said the speaker didn’t, and made no money from the company at all except for some small commissions earned in 2002, before Hubbard became speaker. Defense lawyers also asked if Craftmaster had ever delivered a mailing late. Whatley said they hadn’t. Hubbard’s lawyers asked if on-time delivery was important for a political consultant seeking a printer. “You would be fired by that political marketing firm. You would be fired if you missed a drop date,” Whatley said. Prosecutors also questioned Chris Hines, an executive for the Auburn Network, the media company that Hubbard once owned outright. The company held broadcast rights to Auburn sports events; later Hubbard sold those rights and the sports division of the company to another business, which kept the speaker on as president. Hines said that at some point in the past few years, the company told Hubbard he wouldn’t stay in that position. “He was no longer going to be retained as an employee of IMG Sports,” Hines said. Hines said he did some personal bookkeeping for Hubbard, who owns a lake house in Wedowee, his own residence in Auburn, a farm in Loachapoka and a Destin, Fla., condo. More:
Hubbard aide: Speaker used staff to work for business clients
Alabama House Speaker Mike Hubbard, R-Auburn, asked his chief of staff to help get a patent approved for one of his business clients, the former staffer testified in a Lee County courtroom Wednesday. “Mr. Hubbard told me he had 100,000 reasons to get this done,” said Josh Blades, Hubbard’s chief of staff from 2011 to 2014. Hubbard faces 23 felony counts of ethics law violations in a public corruption trial that began this week. The House speaker is accused of using his connections as speaker and former chairman of the Alabama Republican Party to secure new clients and bring more business to companies he owned or worked for. Blades told jurors Wednesday that he and House security officer Stephen Tidwell traveled to Atlanta with Hubbard in a state car to meet one of Hubbard’s consulting clients, a woman from the Auburn-based company Capitol Cups though he and Tidwell didn’t know the reason for the trip. Hubbard and the woman went to the headquarters of Chick-Fil-A to pitch a business deal between the cup company and the restaurant, Blades said. Blades said neither he nor Tidwell were aware Hubbard was working for Capitol Cups at the time. “It was my understanding that this company was a constituent in his district,” Blades said. Blades said he became aware of Hubbard’s employment with Capitol Cups only after the House speaker tasked him with helping the company get a patent. Blades said Hubbard told him to call officials in Mississippi to get in contact with a Mississippian who was on a governing board at the U.S. patent office. Hubbard made the “100,000 reasons” comment while pressing Blades to get the patent matter settled quickly. “It made me uncomfortable, because when I heard it I immediately thought that the speaker meant money in some form,” he said. Blades seemed to struggle with his emotions during the testimony, sighing deeply into the microphone and sniffling. Questioned on another set of allegations against the speaker, Blades said he advised Hubbard against voting on a state budget that included provisions that would give much of Medicaid’s pharmacy business to a coalition of independent pharmacists. Hubbard was working as a consultant for the pharmacists’ group, American Pharmacy Cooperative, at the time of the vote. “I was afraid there could be legal implications for what happened,” Blades said. “I was afraid Mike could be in some sort of legal trouble because this transpired.” Hubbard voted in favor of the bill despite the advice. Jason Isbell, former legal counsel for Hubbard, said the language in question was brought to him by Ferrell Patrick, a lobbyist for the pharmacy cooperative, and former Rep. Greg Wren. A Republican from Montgomery, Wren stepped down from his House seat as part of a plea deal in an earlier corruption case. More:
Dianne Bentley: Former Alabama first lady rebuilds her life with help from friends, supporters
Muriel Farley is quick to tell you she is not a blogger. That’s why Farley – the wife of Republican representative Allen Farley – was caught by surprise when her blog post about former Alabama First Lady Dianne Bentley caught the attention of so many, with almost 10,000 people reading the words of encouragement the lawmaker’s wife. The attention to that blog post – titled “Dianne Bentley, My friend” – is just one example of the interest in Mrs. Bentley, who in the summer of 2015 filed for divorce from Gov. Robert Bentley, her husband of 50 years. Since then, Gov. Bentley had admitted to making inappropriate comments to his married female adviser Rebekah Caldwell Mason. Gov. Bentley and Mason have denied having a physical affair; both are the subject of ethics investigations and possibly FBI inquiries. Throughout the entire scandal, Dianne Bentley has made few public appearances and a handful of statements, only saying after the couple’s divorce was finalized that she was “doing fine.” “The Lord is good and he is holding my hand and guiding us through this, and we just appreciate all the support and the prayers of the people of Alabama that have been with us,” Bentley said last October. “I like to say that I once was first lady of Alabama and I’m not first anymore, but I’m still a lady, and I still want to represent the state of Alabama as a lady.” Bentley’s friends and supporters said that’s just what she’s doing. Most recently, she spoke at a luncheon for Birmingham-based Gateway, a nonprofit that provides services for foster families, a cause she championed during her time in Montgomery. Farley said she’s not surprised to see Bentley still advocating for the causes she believes in. “She is so genuine and has such a huge heart,” Farley said. “She truly enjoyed being First Lady. She loves the people of Alabama. As Alabama’s First Lady, she loved to serve and associate with Alabama’s school children, foster children and especially trying to help the domestic violence shelters and the victims. Dianne truly misses being able to help people as Alabama’s First Lady.”
Drag queen may be cure for Alabama’s political ills – Video
Rachel Maddow reports that Ambrosia Starling, the fixation of Alabama Chief Justice Roy Moore since his suspension from the bench over LGBT rights issues, is considering a run for Alabama governor. Duration: 4:10
Could you live off a ‘part-time’ salary of $61,500 a year? Mike Hubbard couldn’t
There are two ways money can ruin your life: When you can’t get enough and when you can’t get enough. Soon, a jury in Lee County will have to decide which of those paths wrecked the life and political career of Alabama House Speaker Mike Hubbard. Sometimes you can hear better from a distance, and if you sit near the back of the courtroom, you might notice something interesting. The lead prosecutor, Matt Hart and the lead defense lawyer, Bill Baxley, were saying much the exact same thing. Mike Hubbard couldn’t live off his “part-time” salary. In opening arguments Tuesday, Hart described Hubbard as a desperate man who broke Alabama ethics laws that he helped pass. The key, though, is why. After moving to Auburn from Georgia to take a job in the university’s sports information department, Hubbard struck out for the private sector, eventually creating a company that owned Auburn’s sports broadcasting rights. But the global beast of media consolidation eventually baited Hubbard into a deal and he sold those rights to a bigger conglomerate. That company kept Hubbard on as their Man on the Plains, at least until that conglomerate got gobbled up by an even bigger conglomerate which wasn’t nearly as eager to keep Hubbard on their payroll. They told Hubbard he could soon have to find a new job. At the same time, Hubbard also owned a stake in a struggling printing company in Auburn. The convergence of those two misfortunes made Hubbard desperate. He needed new sources of revenue, and he leaned on his network of political and business leaders to find him new work and new investment. The funny thing is, Baxley’s version is similar, to a point. Baxley told a sometimes-muddled but folksy story of a young up-by-the-bootstraps kid from Georgia who once helped Herschel Walker at UGA and Bo Jackson at Auburn get the Heisman recognition both those players rightfully deserved before making his way into the private sector.
As Baxley tells it, Hubbard built his own broadcasting and media business and took over a local printing company that did quality work, even if its revenue didn’t always exceed expenditures. Leading up to his 2010 campaign to take control of the Alabama Legislature from Democrats, Hubbard leveraged those companies and skills to achieve an “economy of scale,” Baxley argued. And here’s where Baxley and Hart’s narratives cleaved by both definitions of that word — coming together and breaking apart. Hart described Hubbard as a citizen-lawmaker, obligated, first, to the public he was supposed to serve before his own interests. Hubbard, he said, chose to meet his own needs before the public’s. Baxley described Hubbard as a citizen-lawmaker who had to meet his own needs before he could serve the public. That’s where they almost cleave together. Here’s where they cleave apart. Baxley argued that Hubbard couldn’t support his family off his “part-time” salary as a public servant and he shouldn’t have to. But here’s the thing. That part-time salary? It is $61,500 a year. A few years ago, Alabama lawmakers indexed their salaries to the median household income in Alabama. And the Alabama House speaker gets another $20,000 bonus on top of that. It’s probably more than what many of those jurors make working full time.
But for Mike Hubbard it wasn’t enough, and that makes all the difference.
Gov. Bentley scandal: ‘Grand jury investigation’ apparently underway
The investigation into Gov. Robert Bentley, and the fallout of his relationship with former adviser Rebekah Caldwell Mason, is apparently moving to the grand jury. A letter sent by a federal prosecutor to lawyers of people who have been questioned by the FBI in the Bentley affair, explains that George Beck, U.S. Attorney in Alabama’s Middle District, recused himself from the investigation. He has been replaced on the case by a U.S. Attorney from Georgia. Jonathan Ross, assistant U.S. Attorney in the Middle District, wrote the letter under the subject “Grand Jury Investigation.” The note is the first evidence that Bentley’s relationship with Mason or his attempts to hide that relationship is being examined by a grand jury.
It has already been made clear that investigators from the FBI, the IRS, the U.S. Postal Service and state agencies have begun asking questions of former Bentley staffers, executive security officers and others who were at one time close to the governor. The full text of the letter, mailed last week, is below.
Re: Grand Jury Investigation
This letter is to inform you and your client that United States Attorney George L. Beck, Jr. has recused himself and his office from any investigation of and prosecution arising from the operations of the office of the Governor of Alabama. The Attorney General of the United States has appointed United States Attorney John A. Horn of the Northern District of Georgia and his staff to oversee any investigation of and prosecution arising from the above-described matters.
The Government is appreciative of the assistance you and your client have provided in this matter to date. Should you have any questions regarding the content of this letter, please direct such questions to United States Attorney Horn or a member of his staff.
I look forward to working with you on future matters.
George L. Beck, Jr.
By: Jonathan S. Ross
Assistant U.S. Attorney
If Medicaid expansion was a relocating company
I made a mistake. That’s right, I screwed up. And I did so several times over the last few years. I’ve written about Alabama’s ignorant refusal of Medicaid expansion and participation in President Obama’s health care reform (Obamacare). That wasn’t the mistake. I still believe all that I wrote, and I think each passing day proves how stupid and petty such a refusal is. The mistake I made — and to be fair, I wasn’t alone in this — was in how I presented the idea of Medicaid expansion. Silly me, I forgot who my audience was and is, what they valued and the buzzwords to which they respond best. It took an email from a reader — a guy who works closely with a health insurance provider in this state — to make it clear just how badly I messed up. The idea he recommended for selling Medicaid expansion, and the one I should have used, went like this: “Someone should make this pitch to Gov. (Robert) Bentley: Governor, XYZ Company is considering relocating and Alabama is on the list,” he wrote. He then went on to lay out the details of what XYZ would bring to the table. Over the next 10 years, he said, this company anticipates hiring 40,000 Alabamians, with most of them earning a salary between $31,000 and $48,000.
During that time, the businesses and offshoots of XYZ will also add more than $30 billion to the state economy. That’s 6,000 more jobs than Hyundai, all of its suppliers and all of its indirect employment opportunities have created over the last 10 years. When all the costs, such as training, site preparation, tax breaks and other incentives, are added up, Alabama paid about $252 million to get Hyundai here (a bargain compared to the $1 billion in incentives wasted on Thyssen Krupp.) Unlike them, XYZ is going to do the opposite. It’s going to pay your citizens for the privilege of doing business in the state. In addition to providing full coverage health insurance to all of those 40,000 employees, XYZ will also provide health insurance to every citizen in the state who earns less than $16,000 per year or less than about $33,000 for a family of four. It will pay 100 percent of the costs for insuring roughly 300,000 people for three years and then cover 90 percent of the costs forever. If you doubt the ability of XYZ to live up to such a claim, I suggest you take a look at Kentucky, where a Democratic governor ignored the dire warnings of Republicans and made this deal. Over the last year, Kentucky enrolled around 375,000 people through Medicaid expansion. A recent study of the expansion by Deloitte Consulting and the University of Louisville now shows the state taking in more than $30 billion and creating more than 40,000 jobs in just six years. Kentucky’s state budget, through added revenue and cost savings, will enjoy an $820 million gain during that span. And it gets better. In the as-conservative-as-Alabama state of Utah, there is a new push to expand Medicaid. It is coming from law enforcement. Last week, Salt Lake City’s police chief told state lawmakers that Medicaid expansion in Obamacare significantly aided mental health patients’ care. A study from a non-profit group showed that many of the state’s murders and accidental deaths might be prevented if such care was implemented. That should be of particular interest in this state, where a once lauded mental health system has been all but defunded and our local jails have become de facto mental health wards, minus the doctors and trained medical staff. Imagine: a company locating here that wasn’t looking for a handout, wasn’t looking to exploit the union-free, cheap labor and wasn’t interested in only bettering its bottom line. Instead, it provides good jobs, helps the poorest citizens lead healthier lives and cuts crime. That’s Medicaid expansion under Obamacare. And that’s the pitch I should’ve made long ago.
THE PRESSURE ON RYAN — Paul Ryan on Wednesday pushed back against reports that he was close to endorsing Donald Trump for president. “I don’t have a timeline in my mind and I have not made a decision,” he said. The House Speaker is under pressure from some in the financial world who view him as the best hope for the party in the future to hold his ground and refuse to endorse the presumptive GOP nominee.
If he doesn’t stay in the #nevertrump camp these people at least want him to endorse Trump in the most tepid way possible and leave himself a rhetorical way out that would allow him to back away if the GOP nominee says or does something completely crazy. It’s a very tough spot for Ryan. He doesn’t want to be viewed as doing anything to help Hillary Clinton but a close embrace of Trump could tarnish his future if the Trump turns into a total debacle.
MANAFORT: NO TAX RETURNS FROM TRUMP — HuffPo’s Howard Fineman spoke with Trump campaign chair Paul Manafort. Here’s what Manfort had to say about Trump’s tax returns: “I will be surprised if he puts them out. I wouldn’t necessarily advise him to. It’s not really an issue for the people we are appealing to.
“His tax returns are incredibly complicated. I wouldn’t understand them, so how are the American people going to? The financial disclosure he put out gives the salient points … The only people who want the tax returns are the people who want to defeat him.” http://huff.to/25mWXGo
WHERE TO EVEN BEGIN with those statements. Manafort is certainly right that most of Trump’s ardent supporters don’t care about his tax returns. But what about voters who remain undecided and worry about Trump’s honesty? Or who aren’t sure he is the titan he claims to be? And the financial disclosure Trump released tells us nothing about what his real income is and what he pays in taxes or gives to charity. There is a great deal of important information in there. You’ve got to turn over at least two tax returns to get a mortgage … but not to be leader of the free world?
DEMS WANT TO FORCE TRUMP’S HAND — WSJ’s Siobahn Hughes: “Sen. Ron Wyden (D., Ore.) on Wednesday introduced legislation to require presidential nominees to release their tax returns, a policy that would force presumptive … Trump to share records that he has so far withheld. The move was one of a flurry by Democrats on Capitol Hill that bolster positions taken by … Hillary Clinton …
“Under his measure, candidates would have to release at least three years of tax returns within 15 days of becoming the nominee at their party’s convention. Because Republicans control the Senate, Mr. Wyden’s legislation doesn’t have an obvious path to becoming law — or even get a vote. It functions more as a messaging vehicle in a presidential election year.” http://on.wsj.com/1UesIZt
FIRST LOOK: THE HITCHIKER’S GUIDE TO INSIDER TRADING — New issue of Bloomberg Businessweek, on newsstands Friday: “The Don’t Ask, Don’t Tell Guide to Trading on Inside Information: Why Phil Mickelson didn’t get busted” by Sheelah Kolhatkar, which explains why insider trading was legal for the golf pro. http://bloom.bg/1sAfBst
HILLARY CLINTON’S EMAIL PROBLEMS WON’T FADE — POLITICO’s Josh Gerstein: “A newly-issued report on Hillary Clinton’s use of a private email server flatly rejects one of her core defenses in the controversy — that she was playing by the rules. And while the findings of the State Department Inspector General probe don’t land any devastating blows against the Democratic frontrunner, it provides ample grist to keep questions about her handling of the situation alive as the general election campaign gears up.
“[D]etails in the report stoke some lingering mysteries about the email imbroglio. The decision by Clinton and many of her senior aides not to cooperate with the inspector general investigation seems certain to compound those concerns and may have made it more difficult for investigators to get to the bottom of some of the unresolved issues, including whether concerns about Clinton’s system were bottled up by top officials. It’s the kind of uncertainty that Clinton’s political enemies are sure to try and exploit” http://politi.co/25iuTjX
SPEAKING OF EXPLOITING … POLITICO’s Brianna Gurciullo: “Donald Trump said the State Department inspector general’s report on Hillary Clinton’s exclusive use of a private email server was ‘not good’ news for his rival. Trump mentioned the report leaked to the press Wednesday during a rally in Anaheim, California. In recent days, the presumptive Republican nominee has more frequently hit Clinton on her private email use during her four years as secretary of state, proclaiming it will be a frequent target in the general election” http://politi.co/1TAGPLG
WHEN TO CARE ABOUT NATIONAL POLLS — NYT’s Josh Katz and Kevin Quealy: “When should you start to care about polls? With some caveats, we believe the answer is: not quite yet. … At this point — 167 days before the election — a simple polling average has differed from the final result by about nine percentage points. We expect this average to become more meaningful by the week, until the national party conventions temporarily make it less so …
“The average difference begins to flatten about two months before the election. The day before the voting, an unadjusted polling average has been about 3.5 points off the final result. … [T]his far out, a simple polling average is not particularly helpful at predicting the final result.” http://nyti.ms/1WPv98p
OIL HITS $50 — FT’s Gregory Meyer: “Oil prices have pushed above $50 a barrel for the first time this year, as demand strengthens for motor fuels and traders weigh the threat of further supply outages. ICE July Brent crude rose as much as 0.7 per cent to $50.08 a barrel early on Thursday in Asia. US benchmark West Texas Intermediate was up 0.6 per cent at $49.86. …
“Crude has almost doubled since hitting 12-year lows in January on the belief that the market will start to rebalance as supplies of high cost oil decline and rising consumption from motorists and other oil users helps take care of excess stocks.” http://on.ft.com/248xtGT
TREASURY UNVEILS FINANCIAL SERVICES FIX FOR TPP — POLITICO’s Doug Palmer and Victoria Guida: “The Treasury Department is changing its approach to the handling of financial data storage in future trade deals in a bid to improve the chances for passage of [TPP] …
“The move represents a major Obama administration effort to resolve one of the highest-profile complaints about the deal: The Asia-Pacific pact leaves financial services out of a rule that would ban governments from requiring companies to store data within their borders – an exception demanded by Treasury in deference to U.S. regulators, who couldn’t get access to some data stored overseas during the financial crisis.” http://politico.pro/1TKXQ3X
WALL STREET EXECS GENERALLY SKATE BY — WSJ’s Jean Eaglesham and Anupreeta Das: “Gary Heinz is little known on Wall Street, but he belongs to a select club. In 2013, the former UBS Group AG employee was sent to prison on charges of rigging bids tied to the municipal-bond market. Now, he sits at a halfway house in San Antonio, awaiting his release in July. It rarely happens that way.
“The Wall Street Journal examined 156 criminal and civil cases brought by the Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission against 10 of the largest Wall Street banks since 2009. In 81 percent of those cases, individual employees were neither identified nor charged. A total of 47 bank employees were charged … One was a boardroom-level executive, the Journal’s analysis found.” http://on.wsj.com/1Vj35cv
HOT READ: PETER THIEL VS. GAWKER — NYT’s Andrew Ross Sorkin: “A billionaire Silicon Valley entrepreneur was outed as being gay by a media organization. His friends suffered at the hands of the same gossip site. Nearly a decade later, the entrepreneur secretly financed a lawsuit to try to put the media company out of business. That is the back story to a legal case that had already grabbed headlines: The wrestler Hulk Hogan sued Gawker Media for invasion of privacy after it published a sex tape, and a Florida jury recently awarded the wrestler, whose real name is Terry Gene Bollea, $140 million.
“What the jury did not know — nor the public — was that Mr. Hogan had a secret benefactor paying for the lawsuit, to the tune of about $10 million: Peter Thiel, a co-founder of PayPal and one of the earliest investors in Facebook. A 2007 article published by Gawker, ‘Peter Thiel is totally gay, people,’ and a series of articles about his friends and others that he said ‘ruined people’s lives for no reason’ drove Mr. Thiel to mount a clandestine war against Gawker, funding a team of lawyers to find and help ‘victims of the company’s coverage to mount cases against Gawker.” http://nyti.ms/1TL3PG7
PRODUCTIVITY TO FALL FOR FIRST TIME IN DECADES — FT’s Sam Fleming and Chris Giles: “Productivity is set to fall in the US for the first time in more than three decades, raising the prospect of persistent wage stagnation and the risk of a further populist backlash. Research by the Conference Board, a US think-tank, also shows the rate of productivity growth sliding behind the feeble rates in other advanced economies, with gross domestic product per hour projected to drop by 0.2 per cent this year.
“The data highlight both the fragility of global economic prospects and pressures on blue-collar workers, who have rallied in large numbers to the anti-establishment message of … Trump … Janet Yellen, the Federal Reserve chair, has highlighted disappointing productivity numbers as one of the reasons for tepid wage growth in the US … Unless the rate of productivity growth increases, advanced economies will struggle to raise living standards and pay for the costs of their ageing populations” http://on.ft.com/1Xyei93
SO MUCH FOR GOP UNITY! — WP’s Jose A. DelReal and Jenna Johnson: “A fresh string of attacks by … Trump this week on rivals in the GOP establishment — including one delivered against a prominent Latina governor in her home state — raised new doubts about his ability or desire to unite the party’s badly fractured leadership. … The revived feuding this week has only added to the concerns of holdouts such as House Speaker Paul D. Ryan (R-Wis.) …
“The intraparty skirmishing began with an attack on New Mexico Gov. Susana Martinez (R) during a campaign rally in Albuquerque, where Trump blamed her for mismanaging the state’s economy … Next, at a campaign event Wednesday in Anaheim, Calif., Trump … knocked South Carolina Gov. Nikki Haley’s decision to endorse Sen. Marco Rubio (R-Fla.), mocked former Florida governor Jeb Bush for his energy level and blasted 2012 Republican presidential nominee Mitt Romney as a ‘choker.’” http://wapo.st/248xY3y
SCHMIDT SEES NO GOOGLE BREAK-UP — Bloomberg: “When Alphabet Inc. Chairman Eric Schmidt looks to the near future, he sees breakthroughs in health and technology that will change the world. … Speaking at Bloomberg’s Breakaway conference Wednesday in New York, Schmidt also said Alphabet, the holding company that owns Google and other businesses including Nest and Fiber, will probably never break up and its job is to seek out transformative solutions.
“‘There’s tremendous optimism around this next generation of scientists and thinkers,’ Schmidt said. ‘There are problems that bedeviled us for centuries that can in fact be solved.’ The government should play a role in accelerating these developments as they’ve done in the past, he said, pointing to initial public investment in Silicon Valley that allowed it to become the high-growth area it is today.” http://bloom.bg/1UexDcR
TAKATA, HARD UP FOR CASH, HIRES LAZARD — Reuters: “Takata Corp confirmed on Wednesday it has hired investment bank Lazard Ltd to lead a financial restructuring in an effort to resolve costs stemming from its recall of tens of millions of faulty air bags linked to at least 13 deaths and more than 100 injuries worldwide. Takata’s board of directors in February named an outside steering committee to develop a comprehensive restructuring plan to address the financial and operational issues related to its recall of the defective inflators.
“Takata’s outside committee said it retained Lazard as it is ‘expeditiously seeking new investment for Takata,’ the committee said in a statement. Takata, which posted a net loss of 13.1 billion yen ($120 million) for the year ended in March, potentially could face billions of dollars in costs related to the recall” http://reut.rs/1UeDgYE
11:00 am || Arrives Ise-Jingu Shrine; Ise, Japan
1:30 pm || Attends a G7 working lunch; Shima Kanko Hotel, Shima City, Japan
3:30 pm || Attends G7 session two; Shima Kanko Hotel, Shima City, Japan
4:40 pm || Attends G7 session three; Shima Kanko Hotel, Shima City, Japan
7:40 pm || Attends a G7 working dinner; Shima Kanko Hotel, Shima City, Japan
All times Japan Standard Time, which is 13 hours ahead of U.S. Eastern
The House will complete work on the Energy and Water spending bill. The House will also consider a Motion to Go to Conference on H.R. 4974 – Military Construction and Veterans Affairs and Related Agencies Appropriations Act / H.R. 5243 – Zika Response Appropriations Act / H.R. 897 – Zika Vector Control Act and Democrat Motion to Instruct Conferees.
The Senate is considering the Defense authorization bill.