Krebs Daily Briefing 28 September 2015


Sepp Blatter, FIFA President, Faces Criminal Investigation in Switzerland

ZURICH — Sepp Blatter, the longtime president of FIFA, spent much of Friday underground. Starting at 9 a.m., Mr. Blatter and a few dozen other top executives were ensconced in an isolated conference room three levels below ground at FIFA’s headquarters here, discussing pressing issues like budgets, governance reforms and the scheduling of future World Cup tournaments. All seemed normal and routine. When Mr. Blatter surfaced in the early afternoon, however, he was stunned to find a group of officials from Switzerland’s office of the attorney general waiting for him. Over the next few hours, the officials interrogated Mr. Blatter at length. They searched his office, situated five floors above the bunker, on the top floor of FIFA House, and took boxes of documents, then informed Mr. Blatter that he was under criminal investigation. The investigation centers on “suspicion of criminal mismanagement and suspicion of misappropriation” of funds, according to a statement released by the Swiss authorities, and it has now connected world soccer’s top official directly to a corruption scandal at the highest level of the sport.

German prosecutors investigate ex-VW CEO Martin Winterkorn

German prosecutors opened an investigation Monday into former Volkswagen CEO Martin Winterkorn. Winterkorn resigned last week following the eruption of a scandal involving the automaker’s use of deceptive software to fool regulators into believing diesel cars were compliant with emissions laws. The company has admitted to rigging 11 million cars with the software, which hid the fact that the vehicles are emitting harmful pollutants at rates of up to 40 times U.S. standards. Volkswagen is now facing a cascade of government investigations and consumer lawsuits over the scandal. Monday, Volkswagen AG’s upmarket Audi brand said 2.1 million of its vehicles are among those with the engines affected by the emissions-rigging scandal. Audi said that the engine in question was built into 1.6-liter and 2-liter turbo diesel models in the A1, A3, A4, A6, TT, Q3 and Q5 ranges, German news agency dpa reported. The cars involved have engines in the “euro 5” emissions category; those with the newer “euro 6” engines aren’t affected by the emissions scandal. Volkswagen confirmed Friday that its Porsche brand chief, Matthias Mueller, will become its next CEO.

Russia Surprises U.S. With Accord on Battling ISIS

UNITED NATIONS — For the second time this month, Russia moved toexpand its political and military influence in the Syria conflict and left the United States scrambling, this time by reaching an understanding, announced on Sunday, with Iraq, Syria and Iran to share intelligence about the Islamic State. Like Russia’s earlier move to bolster the government of President Bashar al-Assad by deploying warplanes and tanks to a base near Latakia, Syria, the intelligence-sharing arrangement was sealed without notice to the United States. American officials knew that a group of Russian military officers were in Baghdad, but they were clearly surprised when the Iraqi military’s Joint Operations Command announced the intelligence sharing accord on Sunday. It was another sign that President Vladimir V. Putin of Russia was moving ahead with a sharply different tack from that of the Obama administration in battling the Islamic State, also known as ISIS or ISIL, by assembling a rival coalition that includes Iran and the Syrian government. The effort, which Mr. Putin is expected to underscore in his speech at the United Nations on Monday, not only puts Moscow in a position to give military support to Mr. Assad, its longtime ally in the Middle East, but could also enable the Kremlin to influence the choice of a successor if Mr. Assad were to eventually leave power. Russia’s moves are raising difficult questions for the Obama administration, which remains deeply conflicted about American military involvement in the Syria conflict. Ensuring that the Russian military and the United States-led coalition, which is carrying out airstrikes against the Islamic State, “deconflict” and avoid running into each other is only part of the problem: The Obama administration and the Kremlin do not appear to agree even on the main reason for the conflict.

Inside the Secret World of Arab Playboys

The death of Sheikh Rashid, eldest son of Dubai’s ruler Sheikh Mohammed, has shone a light on the high-spending, party-mad lifestyles of Arab playboys like him. Did Majed Abulaziz Al-Saud, a 28-year-old Saudi prince, sexually accost five women at a Beverly Hills compound, as police are now investigating, and which The Daily Beast reported Friday? This scandal broke following the end of another reportedly scandalous life. Monday in Dubai marked the end of the official grieving period for Sheikh Rashid, the fast-living eldest son of Dubai’s ruler, Sheikh Mohammed. Rashid died, age 33, of a heart attack on September 19, according to the official account. The royal family of the oil-rich emirate will no doubt be hoping that the conclusion of the mourning period will bring down the curtain. For many years speculation ran rampant that the charming and glamorous Prince Rashid, who lived a glittering life amply accessorized with racehorses, fast cars, and beautiful women, was a persistent drug abuser and sex addict. In the UAE, the prince’s death has been greeted with hagiographic official obituaries. In the West, however, the demise of Rashid has cast a rare beam of light on the secret world of the Arab playboys who flock every summer to escape the intense heat of the Middle East, and spend vast amounts of money on Western debaucheries.


Fox News Credits Leonardo DiCaprio with Painting the Mona Lisa

Listen, it’s been a long week—what, with Emmy hangovers,wall-to-wall Pope coverage, and the Empire premiere. So let’s cut Fox News anchor Shepard Smith a little slack for giving Leonardo DiCaprioworld-renowned actor,environmental activist, and presently living human—credit for painting the 16th-century Renaissance masterpiece, the Mona Lisa. And really, were any of us there to witness the creation of the most famous piece of art in the world? Did any of us not see DiCaprio hop off of a time-traveling Citibike in the early 1500s and paint this masterpiece, e-cigarette in hand? No. So, maybe Shepard Smith was right. Regardless, on Thursday, Smith offered Fox News viewers “an update from scientists trying to identify the model for Leonardo DiCaprio’s Mona Lisa.” While that little teleprompter flub would have been quickly forgotten a decade ago, the peanut gallery that is Twitter has preserved the error forever.

Pentagon: Troops will not get paid during a shutdown

The Pentagon is starting to distribute plans to its personnel in the case of a government shutdown, according to a Friday memo to military and civilian employees from Deputy Defense Secretary Robert Work. During a government shutdown, all military personnel would continue in a normal duty status, but they would not be paid until Congress provides funding, the memo says. A follow-on memo said the Pentagon would continue to prosecute the war in Afghanistan and ongoing operations against al-Qaeda and the Islamic State of Iraq and the Levant (also known as ISIS), including preparation of forces for deployment into those conflicts. The memo said the Pentagon would also continue many other operations necessary for the safety of human life or the protection of property. Although these activities would continue, the troops would still not be paid until Congress appropriates funding. All other activities “would need to be shut down in an orderly and deliberate fashion,” the memo said. In addition, some civilian employees would be furloughed while others would report to work. “Civilian personnel who are necessary to carry out or support excepted activities will also continue in normal duty status and also will not be paid until Congress makes appropriated funds available,” the memo said. Civilian employees paid from lapsed appropriations and who are not necessary to carry out or support excepted activities will be furloughed, it said. The Pentagon recently updated its rationale for determining which civilian employees would be furloughed. “As we saw in 2013, should a shutdown occur, and depending on the length of the shutdown, these determinations may change over time as circumstances evolve,” said the memo. Work’s memo emphasized that the categorization of employees and whether someone is furloughed is not a reflection of the quality of an employee’s work, or his or her importance to the department. “Your chain of command will begin reaching out to you to provide additional detail on our contingency plans and your status under a potential lapse,” it said. The memo also clarifies that should a shutdown happen, official furlough notices would only be issued on Oct. 1. House Armed Services Committee Chairman Mac Thornberry (R-Texas) said Friday that lawmakers are “ready to go” on an emergency bill to pay troops if necessary. “We’re ready to go with that if it gets to that point,” said Thornberry at a press conference. “I hope it doesn’t get to that point. I don’t really think it will, but we’re trying to be ready for contingencies.” The last time there was a shutdown, in 2013, lawmakers passed legislation that protected military pay.

Federal Judge Delivers Another Blow to SEC’s In-House Court

A federal judge in Atlanta has just delivered a timely reminder that the Securities and Exchange Commission’s legal headache over its in-house court likely won’t be cured completely by the proposed reforms the agency issued Thursday. U.S. District Judge Leigh May, who has previously ruled that the SEC’s system for appointing its five in-house judges is likely unconstitutional, found against the agency again Thursday. The judge rejected an SEC challenge to her decision to halt a case against Atlanta-based investment advisory firm Gray Financial Group Inc. and two of its executives. Gray has sued the SEC to try to stop it from trying the case before one of its five administrative law judges, rather than in federal court. The judge wrote that the SEC argued there was a public interest in its case going forward speedily because the Gray Financial executives are “essentially bad apples managing millions of assets who should be barred from the industry.” But she said that even if the SEC’s allegations are true–and Gray Financial and its executives deny any wrongdoing–“that does not give the government the right to institute an unconstitutional administrative process against them.” A spokeswoman for the SEC declined to comment Friday. The SEC is appealing rulings by Judge May and another federal judge that question the constitutional legitimacy of its in-house court. But these legal wrangles aren’t addressed in the proposed reforms the SEC put out for public comment Thursday.

Tom Krebs is a securities attorney in Mountain Brook, Alabama.

S.E.C. Turns Its Eye to Hidden Fees in Mutual Funds

As regulators have ramped up their scrutiny of private equity practices in recent years, investors have learned a lot about hidden — and dubious — fees they are paying. Now it’s time for investors in the $16 trillion mutual fund arena to do the same. On Sept. 21, the Securities and Exchange Commission’s enforcement division filed proceedings against First Eagle Investment Management, an asset-management company overseeing $100 billion — mostly in eight stock, bond and multi-asset funds. The S.E.C. said that from January 2008 through March 2014, First Eagle improperly billed its investors $25 million for payments to brokers marketing the funds’ shares. The commission also accused First Eagle of misleading investors by maintaining in fund documents during that period that it was paying the marketing costs itself.  First Eagle settled the matter without confirming or denying the allegations. It agreed to pay about $27 million in disgorgement and interest as well as penalties of $12.5 million. The S.E.C. will set up a fund to return money to investors who were harmed by First Eagle’s actions. As a modest First Eagle fund shareholder, I am one of them. Under S.E.C. rules, fund companies like First Eagle can charge shareholders for some costs associated with attracting new money and investors. Such fees fall under a so-called 12b-1 plan, named for the S.E.C. rule governing its use. That plan is subject to approval by a fund company’s board; funds seeking to pay marketing costs above those set out by the 12b-1 plan must take them out of their own pockets, not those of their investors.

Big banks abusing 2012 settlement deal

The nation’s largest mortgage lenders are violating the terms of a punitive 2012 settlement that was meant to prevent unfair and unnecessary foreclosures that destroyed communities and pushed working families from their homes. Interviews by POLITICO with more than 20 housing counselors, Legal Aid lawyers and government prosecutors in states hard hit by the real estate crisis that followed the 2007 financial meltdown reveal that the nation’s top lenders are violating the settlement and rules put in place last year by the Consumer Financial Protection Bureau. In some cases, the problems — repeated requests for the same documents, for example — stem from ongoing disorganization deep inside the loan servicing departments of the banks, but some homeowners and their representatives claim the issues are a deliberate attempt to use foreclosure to resolve cases that have lingered for years. In 2012, as 49 state attorneys general and the Holder Justice Department announced the landmark $25 billion accord with five of the nation’s biggest lenders, North Carolina Attorney General Roy Cooper spoke for many when he declared: “If homeowners get the runaround for a modification, if homes are foreclosed before other options expire, the monitor and the courts can step in and make it right.” The AGs were especially inflamed by stories of banks that continued to accept payments from financially strapped borrowers even as they quietly filed paperwork to take back the homes. But the abuses haven’t stopped. Since the beginning of 2014, more than 60,000 complaints have been filed nationwide by borrowers about servicers rushing the foreclosure process or mishandling a modification request, according to POLITICO’s review of the bureau’s database. But the complaints likely underestimate the problem because most homeowners have no idea the database exists, according to counselors and attorneys. (More than 472,000 U.S. homeowners are in some stage of foreclosure as of June, with another 1.3 million in serious delinquency, according to the most recent data from CoreLogic.)




Head of Retirement Systems of Alabama says pension funds are under attack


BIRMINGHAM, AL (WBRC) – The head of the Retirement Systems of Alabama (RSA) says the state employee pension fund is doing well, but employees must do their part to keep it alive. Dr. David Bronner spoke to dozens of state employees in Birmingham Thursday. Bronner was his usual fiery self, not only informing those employees of the retirement system’s status, but also sharing his insights on the states’s budget crisis and what he feels it will take for the legislature and governor to turn things around financially. But his biggest message focused on state employees’ pension funds, telling attendees that those funds  are under attack from billionaires whom Bronner says are spending lots of money to do away with their pension programs and health benefits. He says employees must do their part in encouraging lawmakers to protect the system that is already in place and doing well right now. “It’s in fine shape. It’s 68 to 69 percent funded. We got up to 100 percent in 2000. We got killed in ’08 and ’09. The last five years we’ve had 11 percent return on assets. As far as pension funds go, we’re in the top 25 percent the last five years, we’re in the top 13 percent the last three years. We can’t do any better than that. If the rest of the things in Alabama were in the top 25 percent or the top 13 percent, we’d be doing really well, wouldn’t we?” Bronner said. In addressing the state’s budget crisis, Bronner says there need to be more industrial incentives and tax increases to bring more jobs to the state.


Judge says Walter Energy could ‘crash and burn’ as negotiations stall


Bankruptcy proceedings for Alabama metallurgical coal producer Walter Energy may have taken a turn for the worst. Negotiations between the lenders and company have proven unsuccessful and a federal bankruptcy judge on Thursday said it does not seem possible to reach an agreement in the next 30 days, due to the lack of cooperation at the corporate level, according to a report from Bloomberg. Lawyers representing the company were in court seeking approval of a deal with lenders to use cash representing collateral for its debt over the next 30 days. Lenders said they would no longer let Walter use cash on the court’s previously approved terms. Lenders said the agreement was terminated after the judge made modifications to the deal that the lenders viewed as unacceptable. Mitchell said the plan’s support agreement was formed only for the benefit of lenders, and as a result, disregarded unsecured creditors and union workers. Lenders offered new terms to allow cash use until Oct. 21. Also, the agreement tried to bind the court to its terms, which, if not approved, gave the lenders ability to pull their support. A lawyer for Birmingham-based Walter Energy said the company is operating at a loss and will run out of cash in about a month if a new lender deal was not struck. If the new cash accord is approved, Walter will reengage with lenders to try to reach a deal. If a deal is not reached, the company will be sold. The company filed for Chapter 11 bankruptcy reorganization in June and has spent the last few months at the negotiating table. Many jobs have already been impacted across Walter’s footprint, after the company sent out federal WARN notices to all salaried employees. At last count, 370 workers at No. 7 were slated to be laid off in July.

Commissioner of Agriculture and Industries says Hubbard Should Step Down

MONTGOMERY—Alabama Commissioner of Agriculture and Industries John McMillian has now publicly stated that he believes Speaker Mike Hubbard should step down as Speaker. In a phone conversation with the Alabama Political Reporter, McMillian, a highly respect republican  said, “I think it is time for him to step down.” Hubbard was charged in October of last year with committing 23 felony counts of public corruption. Hubbard has stubbornly held on to the Speaker’s gavel despite the ever-growing body of evidence making its way into the press. When pressed for details on why Hubbard should resign his leadership roll, McMillian said, “For all the obvious reason…with all the problems facing our state, serious issues before the legislature, his legal problem have become a distraction. Hundreds of emails have been release by the State’s prosecution in response to Hubbard’s attorney J. Mark Whites motions. The latest barrage of emails release this week show Hubbard asking for lobbying jobs, pressuring business leaders for work and scheming with former Gov. Bob Riley to make tens of thousands of dollars in a potentially illegal sub-contracting deal. McMillian believes that not only are Hubbard’s legal woes a distraction for those trying to conduct state business but also a detriment to the ALGOP brand. “There is no way to put a positive spin on it,” said McMillian. Privately a growing number of lawmakers are saying Hubbard needs to go but McMillian is the first statewide elected constitutional officer to go public with the call.

Bentley: General Fund language may be unconstitutional

Gov. Robert Bentley asked the Alabama Supreme Court this week to review language in the General Fund budget. The portions in question involve limitations on how the Alabama Law Enforcement Agency can respond to possible shortfalls in its operating budget and requires any cuts go to administrative services. The budget allows cuts to public services only as a “last resort.” The governor is also challenging language requiring the Director of Finance and at least one of the two General Fund budget chairs in the Legislature to approve new construction and vehicle purchases. Bentley said in a statement Friday that the language violates the state Constitution’s separation of powers clause. “I further believe there is language in the act which violates the constitutional restrictions on creation of state debt and on the content allowed in appropriations bills,” the statement said. “For these reasons, I have asked the Alabama Supreme Court to review the constitutionality of the requested sections of the General Fund Appropriations Act as quickly as possible.” The move by Bentley — who signed the budget Sept. 17 — caught legislative leaders by surprise. The chairs of the Legislature’s General Fund budget committees said Friday it was too early to tell what it would mean for the budget. “That language was in the House-passed version, and I don’t recall getting a visit or a call of concern from the administration,” said Senate Finance and Taxation General Fund chairman Arthur Orr, R-Decatur. “I guess I would assume there was no problem with it.” Senate President Pro Tem Del Marsh, R-Anniston, criticized the governor in a statement. “It’s unfortunate that now he wants to find ways to cut services to the taxpayers instead of downsizing non essential government services – as the legislature intended in the budget,” Marsh said in a statement. The budget came after a six-month struggle that saw two special legislative sessions and sniping between Bentley, the House and the Senate over addressing a shortfall of at least $200 million in 2016 General Fund budget, which goes into effect on Oct. 1. Bentley requested an opinion of the Alabama Supreme Court in a letter sent Wednesday. Those opinions are legally nonbinding, said Othni Lathram, the director of the Alabama Law Institute and interim director of the Alabama Legislative Fiscal Office. “It may or may not be answered,” he said. “There’s no requirement that they have to respond to these. If they do, there’s no certainty you’re going to get unanimity on their viewpoints.” But the governor and the Legislature could interpret the opinion of the Alabama Supreme Court — or lack of it — as they see fit. “Depending on what they write back, that arguably gives the governor, should he choose to, a reason not implement the budget the way it’s written,” Lathram said. “That creates a set of choices the budget chairs can decide from there,” which could possibly include legal action. More:




What Robert Bentley should say about all those rumors

Dear Gov. Bentley, I had almost decided that we weren’t being fair with you until I saw what was happening to Lane Kiffin on Twitter today. By the time I’m done writing this column, Alabama’s offensive coordinator will have to deny having slept with every warm body in Tuscaloosa, up to and including Big Al. If he didn’t deny it, it must be true, right? You might think that’s crazy, but then there was that thing with British Prime Minister David Cameron and the pig. It’s been an old saw in politics that you can recover from anything except being caught in bed with a dead girl or a live boy, but where does dead swine fit into that picture? Again, Cameron didn’t deny it. Instead, his spokesman said he wouldn’t dignify the rumors with a response, which led even Time magazine to write that the dead-pig-sex-scandal wouldn’t be going away. Repeat: Didn’t deny it, so it must be true. These kinds of things put me and my media kin in a real pickle. On one hand we have a professional obligation to write only things that we can prove to be true. On the other hand, we cannot ignore what everyone under the sun is talking, Tweeting, Facebooking, Instagramming and even Google-plussing (Is that still a thing? Was it ever?) about on the Internet. Let’s take your case as an example. Nearly a year ago rumors started going around about you and a staffer with whom you work closely. Don’t take this the wrong way, but my immediate reaction was to doubt it because a sex scandal that involves you is … well … it’s so gross that it causes me to question my belief in God. More:



Morning Money

SOME TRUMP ON “60 MINUTES” — There was a lot of crazy stuff but a few highlights without comment.

On the border: “We are going to build a wall. It’s going to be a great wall and it’s not going to be very expensive … It will be a real wall. It will be a wall that works. It’ll actually be a wall that will look good, believe it or not … “

On undocumented immigrants: “We are rounding them up in a very humane way and a very nice way and they are going to be happy because they want to be legalized. … I know it doesn’t sound nice but not everything is nice.”

On China respecting him as president: “Just like I have the Chinese banks in my building, they listen to me”

On health care: “Everybody has got to be covered … I am going to take care of everybody … The government is going to pay for [the uninsured] but we are going to save so much on the other side but for the most part it’s going to be a private plan and people are going to be able to go out and negotiate great plans with lots of different competition with lots of competitors with great companies and they can have their doctors, they can have plans, they can have everything.” (The latter portion of that sounds almost exactly like … Obamacare).

On himself: “I’m on a lot of covers … I think I have more covers than almost any supermodel.”

M.M. THOUGHT BUBBLE — Seems to me that Trump (beyond the nativist, immigration pandering) is now running on raising taxes on the rich and cutting them on the poor and middle class and providing government subsidized universal health care. In other words … as a virulently anti-immigrant Democrat. Rival Republicans could (and probably will) have a field day with that.

WALL STREET FREAKS ABOUT BOEHNER — POLITICO’s Ben White: “Wall Street is quietly freaking out over House Speaker John Boehner’s surprise decision to resign from his post at the end of next month. The growing fear is that while Boehner will almost certainly avoid a government shutdown [this] week as his final act, chaos could easily return in December as another government funding fight will align with the need to raise the nation’s borrowing limit.

“And it would happen just as the Federal Reserve is likely to begin raising interest rates and with a new speaker — likely House Majority Leader Kevin McCarthy — under heavy pressure from the right not to cut any deals with President Barack Obama and congressional Democrats. ‘This risk of a shutdown and major debt ceiling fight in December has now dramatically increased,’ said Isaac Boltansky of Compass Point Research and Trading. ‘Boehner’s retirement should be a very concerning signal for markets. We will now have a new cast of characters running things, and McCarthy is going to be pulled very hard to the right.’”

WINTER IS COMING — “‘Winter is coming,”’ said Chris Krueger of Guggenheim Securities, referencing the tease line for ‘Game of Thrones,’ the popular HBO show. ‘There is much more risk of a real accident occurring around the need to raise the debt limit. Whoever is speaker and whip and in the rest of leadership will determine a lot of it. But under any circumstances, conservatives in the Freedom Caucus and the tea party movement are going to have an awful lot of juice.’”

“The fear among Wall Street executives and investors is that McCarthy or any new speaker will not, as their first major act later this year, be able to cut a deal on government funding and the debt limit that passes the House with mostly Democratic votes. Boehner was able to pull this off on multiple occasions but never without pain and threats to his speakership. Now it will be up to a new leadership team that will also face pressure from GOP presidential candidates including Sen. Ted Cruz of Texas to push hard to achieve policy goals like defunding Planned Parenthood in return for lifting the borrowing limit and keeping the government open.”

WEAK DATA THIS WEEK? — HFE’s Jim O’Sullivan: “We remain skeptical that global weakening will stop the downtrend in the U.S. unemployment rate. … Despite our big-picture view, we expect some of this week’s data to raise fears that growth is deteriorating. … The September employment report could suggest slowing … even if the 173K rise in payrolls reported for August is revised up a bit. As with August, the September payrolls data have tended to be underreported initially and then revised up later.

“Over the last five years, the initially reported September rise has been revised up by 49K, on average, over the following two months — not as large as the 77K average for August, but still sizable. We also expect a pause in the unemployment rate after the big 0.2-point drop in August, and just a 0.1% rise in hourly earnings following an above-trend 0.3% gain.”

GOOD MONDAY MORNING — Hope everyone caught the blood moon eclipse last night. Super cool. If you did miss it, don’t worry, it will be back in 2033. Email me at and follow me on Twitter @morningmoneyben.

DRIVING THE WEEK — Congress has until midnight Wednesday to pass a CR to keep the government open (and will probably do so but for how long?) … Senate expected to move forward with a clean CR early this evening … Donald Trump is releasing a tax today … Consumer spending and personal income this morning expected to rise 0.3% and 0.4% respectively … President Obama will address the 70th Session of the United Nations General Assembly at 10:00 a.m. and hold a meeting with Russian President Putin of Russia this evening … August jobs report at 8:30 a.m. Friday expected to show a gain of 196K and no change to 5.1% jobless rate … Tesla unveils its first SUV on Tuesday … Senate Finance has a hearing Tuesday on the Puerto Rico crisis … Bank of America must resubmit its capital plan to the Fed by Wednesday

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Pro staff on what John Boehner’s departure means for Jeb Hensarling and the House Financial Services Committee [] — and to get Morning Money every day before 6 a.m. — please contact Pro Services at (703) 341-4600 or

JEB BUSH: EARLY POLLS DON’T MATTER — POLITICO’s Kyle Cheney: “Former Florida Gov. Jeb Bush, who has persistently trailed Donald Trump and Ben Carson in the Republican presidential polls, is questioning the accuracy of them showing him way behind. ‘These polls really don’t matter,’ Bush said in an interview on ‘Fox News Sunday.’ ‘They don’t filter out the people that aren’t going to vote. It’s just … an obsession, because it kind of frames the debate for people for that week.’

“His comments aired Sunday, as a new NBC/Wall Street Journal poll of Republicans who say they’re likely to vote in next year’s GOP caucuses and primaries showed him lagging in a distant fifth behind Trump, the real estate developer and entertainer, and Carson, a retired neurosurgeon, who were tied for first — and trailing (but statistically tied with) Florida Sen. Marco Rubio and former Hewlett-Packard CEO Carly Fiorina.”

SOME INVESTORS GET SPECIAL CEO ACCESS — WSJ’s Serena Ng and Anton Troainovski: “Procter & Gamble Co. Chief Executive A.G. Lafley speaks on just one earnings conference call a year, down from his previous practice of every quarter. … But Mr. Lafley still meets regularly with investors in private. In March, Mr. Lafley’s comments during a string of conversations with investors in New York gave a Wall Street analyst who was present the strong impression that he would step aside as CEO sooner than expected. That hunch was confirmed in July. …

“For the past 15 years, selective disclosure by companies has been illegal under U.S. securities rules. Yet the same rules explicitly allow private meetings like those by P&G. The result is a booming back channel through which facts and body language flow from public companies to handpicked recipients. Participants say they’ve detected hints about sales results and takeover leanings. More common are subtle shifts in emphasis or tone by a company.”

IMMIGRATION RESHAPING U.S. — FT’s Sam Fleming: “The ranks of immigrants and their children will grow to reach a record share of the US population in the second half of this century, projections show, with Asian immigration taking over as the biggest source of population growth. … The forecasts demonstrate the extent to which immigration will reshape the US population, even as politicians such as Republican presidential frontrunner Donald Trump use hostility towards foreigners to appeal to parts of the electorate.

“The report from the Pew Research Center finds that foreign-born individuals and their children will comprise 36 per cent of the US population by 2065, higher than the peaks reached at the beginning of the 20th century and up from 26 per cent now. The ranks of foreign-born individuals alone will also rise to a record. The research finds that the driver of US population growth over the next five decades will be immigration from Asian countries such as China, India, Korea and the Philippines, with the expansion overtaking arrivals of Hispanics”

DONORS TO JEB: GET IT TOGETHER … SOON — WP: By Ed O’Keefe and Matea Gold: “Jeb Bush is entering a critical phase of his Republican presidential campaign, with top donors warning that the former Florida governor needs to demonstrate growth in the polls over the next month or face serious defections among supporters. The warnings, expressed by numerous senior GOP fund­raisers in recent days, come as Bush and an allied super PAC are in the early stages of an aggressive television ad campaign they say will help erase doubts about his viability. But Bush continues to battle against a steady decline in the polls, sinking to fifth place at just 7 percent in a national NBC News/Wall Street Journal poll released Sunday and similarly languishing in the early-voting states of Iowa and New Hampshire. …

“The warnings from top donors come as Wisconsin Gov. Scott Walker’s exit from the race re­focused the battle within the GOP’s establishment wing as one between Bush and his former protégé, Sen. Marco Rubio (R-Fla.). Right now, the momentum appears to be behind Rubio, who has jumped ahead of Bush in most polls. At least a third of the bundlers who signed up to raise money for Walker have switched their allegiance to Rubio, while a smaller number have gone with Bush … Party strategists said that Bush must find a way to recharge his campaign with a compelling message about his conservative governing record in Florida”

TRUMP TAX PLAN PREVIEW — WSJ’s Heather Haddon: “Donald Trump is set to release a tax plan Monday that calls for major reductions in levies on middle-income and poor payers, while increasing taxes on the wealthy and reining in companies that pay less in taxes by moving their headquarters overseas. The plan will offer a ‘major tax reduction for almost all citizens’ and help stimulate business in the U.S. again, the Republican candidate’s campaign said Sunday.

“The GOP presidential front-runner is also expected to call for the poorest filers to pay no federal taxes at all while also recommending that corporate levies be reduced. In an interview … on CBS’s ‘60 Minutes’ Sunday night, Mr. Trump shrugged off questions as to how he would pay for the tax plan and what kind of Republican presidential candidate would recommend that the wealthy pay more to the government’ … The tax plan will be the second policy platform released by Mr. Trump in the more than three months since he declared his candidacy. He released a six-page paper outlining his hard-line stance on immigration last month”

TOO LATE FOR DODD-FRANK CHANGES? — ICBA’s Cam Fine in a Washington Times op-ed: “Let’s be brutally frank. Opportunities to pass vital, consensus, community bank regulatory relief legislation are fading. While Republicans and Democrats alike have pledged to reform excessive regulatory burdens on Main Street institutions to improve local economies, partisan bickering threatens to thwart enacting needed regulatory relief anytime soon.”

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POTUS Events

10:00 am || Addresses the United Nations General Assembly; United Nations Building
11:00 am || Meets with Indian Prime Minister Modi
1:15 pm || Attends a luncheon hosted by United Nations Secretary-General Ban Ki-moon
3:00 pm || Chairs the United Nations Peacekeeping Summit
5:05 pm || Meets with Russian President Putin
7:30 pm || Hosts a reception for visiting Heads of State

All times Eastern
Live Stream of Obama address at 10:00 am

Floor Action

Congress will race this week to pass a government spending bill by Wednesday night to avert a shutdown.

The Senate will take a procedural vote on a short-term continuing resolution that includes funding for Planned Parenthood on Monday at 4:30 p.m., paving the way for the bill to be sent to the House by Tuesday.

The move comes after nearly every Democrat—and eight Republicans—blocked a short-term proposal that would have funded the government but defunded Planned Parenthood. Voting to defund the organization was widely expected to fail, with Sen. Lisa Murkowski (R-Alaska) telling reporters ahead of last week’s vote: “I think we all know we’re gonna do a clean CR.”

Senate Majority Leader Mitch McConnell (R-Ky.) blasted Democrats, saying that by backing Planned Parenthood they are “making a losing bet they will come to regret over the long time.” But he urged Republicans to support the “clean” spending bill, even though it funds the organization, adding that “the government will shut down next week if Congress doesn’t act.”

House Republicans will take up the stopgap measure free of policy riders this week before the deadline. It’s expected to pass with Democratic support and many GOP defections.

Rather than using the government funding bill as leverage, House GOP leaders plan to use a fast-track process known as reconciliation to try to defund Planned Parenthood.

Using reconciliation would prevent Senate Democrats from filibustering it, almost ensuring that a funding bill blocking money for Planned Parenthood would reach the White House. However, it would likely face a veto threat from President Obama.

The House will also vote Tuesday on legislation authored by Rep. Sean Duffy (R-Wis.) that would allow states to withhold Medicaid funding from providers that conduct abortions.

House GOP leadership jockeying

Speaker John Boehner’s (R-Ohio) announcement that he will resign at the end of October stunned Capitol Hill on Friday. But it only took a few hours for Republicans to start gauging support from colleagues to run for leadership slots.

GOP leaders have not yet announced when the leadership elections will take place.

House Majority Leader Kevin McCarthy (R-Calif.) appears to be in the strongest position to succeed Boehner as Speaker, though he has not officially said yet if he will run. Should McCarthy move up, and other members of the leadership run for promotions, the entire hierarchy could be up for grabs.

Majority Whip Steve Scalise (R-La.) told House vote counters Friday evening that he will run for majority leader if McCarthy becomes Speaker, according to a source familiar with the call.

This week could be the start of launching official candidacies for leadership slots after lawmakers have had the weekend to discuss options with each other and leave time following Boehner’s surprise announcement.

Iran sanctions

The House is expected to vote later in the week on a bill to prohibit lifting Iran sanctions as part of the nuclear deal unless the country pays court-ordered damages owed to terror victims.

Under the bill as introduced by Rep. Patrick Meehan (R-Pa.), the president would have to first certify to Congress that Iran has paid the damages. Consideration of the measure comes after Republicans were unable to overcome a Senate Democratic filibuster of a resolution disapproving of the Iran nuclear deal earlier this month. The House rejected the deal, but not enough Democrats joined the GOP to force a presidential veto override.