Krebs Daily Briefing 29 March 2016

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

EgyptAir Hijacker Taken Into Custody by Cyprus Authorities: Foreign Ministry

The hijacker of an EgyptAir domestic flight diverted to a Cyprus airport has been arrested, according to a tweet by the Cypriot foreign ministry. The man earlier claimed to be wearing an explosive belt and forced the flight from Alexandria to Cairo to land at Larnaca airport. He later released most of the more than 50 people on board. Cypriot officials said the takeover of the aircraft was not linked to terrorism. EgyptAir confirmed the arrest of the hijacker in a tweet. The hijacking dealt a new blow to Egypt’s efforts to project an image of stability to tourists and investors five months after the downing of a Russian passenger plane over the Sinai peninsula, claimed by Islamic State. Militant attacks have surged since 2013, though they have been mostly confined to northern Sinai.

http://www.bloomberg.com/news/articles/2016-03-29/egyptair-hijacker-taken-into-custody-by-cyprus-authorities-foreign-ministry

Jordan’s King Abdullah accused Turkey of sending terrorists to Europe, report says

In a closed-door meeting with U.S. politicians in January, Jordan’s King Abdullah II apparently heaped criticism on Turkey, accusing its government of enabling the infiltration of Islamist terrorists into Europe and encouraging a “radical Islamic solution” to the crises in the Middle East. To an audience that is said to have included Sens. John McCain, Bob Corker, Mitch McConnell and Harry M. Reid, the Jordanian king supposedly claimed that Turkey was helping the Islamic State illicitly export oil and stoking the European refugee crisis to gain leverage over the European Union. “The fact that terrorists are going to Europe is part of Turkish policy and Turkey keeps on getting a slap on the hand, but they are let off the hook,” he said. Details of the meeting, which took place on Jan. 11, were revealed by the Middle East Eye website over the weekend. These private remarks fly in the face of official Jordanian-Turkish relations. The two countries are allies. Just this weekend, Turkish Prime Minister Ahmet Davutoglu met with Abdullah in Amman and hailed the “very beautiful successes” of the relationship. The prime minister was expected to sign about 10 agreements with Jordan on matters of trade and economic cooperation. “There is no problem with bilateral relations between Turkey and Jordan,” Davutoglu insisted. Jordanian government spokesman Mohammed Mumuni also questioned the veracity of the report. “Turkey-Jordan relations are historic and based on mutual respect principle,” he told Turkey’s state-run Anadolu News Agency. “This kind of news is devoid of the minimum of vocational professionalism.” Abdullah’s reported comments paint a rather different picture and echo criticisms leveled at Ankara more often by geopolitical adversaries in Damascus and Moscow. Here’s more from the Middle East Eye:

https://www.washingtonpost.com/news/worldviews/wp/2016/03/28/jordans-king-abdullah-accused-turkey-of-sending-terrorists-to-europe-report-says/?postshare=3181459182809943&tid=ss_tw

Cuba’s Fidel Castro slams Obama following historic visit

Retired leader Fidel Castro accused U.S. President Barack Obama of sweet-talking the Cuban people during his visit to the island last week and ignoring the accomplishments of Communist rule, in an opinion piece carried by all state-run media on Monday. Obama’s visit was aimed at consolidating a detente between the once intractable Cold War enemies and the U.S. president said in a speech to the Cuban people that it was time for both nations to put the past behind them and face the future “as friends and as neighbors and as family, together.” “One assumes that every one of us ran the risk of a heart attack listening to these words,” Castro said in his column, dismissing Obama’s comments as “honey-coated” and reminding Cubans of the many U.S. efforts to overthrow and weaken the Communist government. Castro, 89, laced his opinion piece with nationalist sentiment and, bristling at Obama’s offer to help Cuba, said the country was able to produce the food and material riches it needs with the efforts of its people. “We don’t need the empire to give us anything,” he wrote. Fidel Castro took power in a 1959 revolution and led the country until 2006, when he fell ill and passed power to his brother Raul Castro. He now lives in relative seclusion but is occasionally heard from in opinion pieces or seen on television and in photos meeting with visiting dignitaries. The iconic figure’s influence has waned in his retirement and the introduction of market-style reforms carried out by Raul Castro, but Fidel Castro still has a moral authority among many residents, especially older generations. Obama did not meet with Fidel Castro, 89, during his three-day visit, nor mention him in any of his public appearances. It was the first visit of a sitting U.S. president for 88 years. Fidel Castro blasted Obama for not referring in his speech to the extermination of native peoples in both the United States and Cuba, not recognizing Cuba’s gains in health and education, and not coming clean on what he might know about how South Africa obtained nuclear weapons before apartheid ended, presumably with the aid of the U.S. government. “My modest suggestion is that he reflects (on the U.S. role in South Africa and Cuba’s in Angola) and not now try to elaborate theories about Cuban politics,” Castro said. Castro also took aim at the tourism industry in Cuba, which has grown further since Obama’s rapprochement with Raul Castro in December 2014. He said it was dominated by large foreign corporations which took for granted billion-dollar profits.

http://www.reuters.com/article/us-usa-cuba-castro-idUSKCN0WU18I

Fearing Trump, U.N. Embraces the Art of the Deal

The prospect of a Donald Trump presidency, while anything but a sure bet, has set U.N. diplomats on a race to conclude a set of deals from migration to the Middle East peace process before U.S. President Barack Obama steps down in January 2017. The push to secure diplomatic pacts in the waning months of the Obama presidency reflects mounting uncertainty about the prospects for international cooperation at the United Nations if Trump’s presidential bid succeeds. While many U.N. diplomats are rooting for Hillary Clinton to win the election in November, Trump’s improbable rise to the front of the Republican pack has made many doubt their own ability to handicap what has developed into one of the most unpredictable of American presidential races. European governments, in particular, see the adoption of a U.N. Security Council resolution condemning Israeli settlements or sketching a political road map for a Palestinian state as the major prize. They are also seeking U.S. support at a summit on migration that will be held at U.N. headquarters in September. “Everything that we can do in 2016 we should do in 2016 because we know what we’re dealing with,” said a senior U.N. diplomat who favors Security Council action in the coming months on an Israel-Palestine resolution. “In the Obama administration, we have … the most pro-U.N. administration that any of us can remember.” The remarks come days after Trump lashed out at the U.N. during an address before the American Israel Public Affairs Committee, a pro-Israel lobbying organization, raising fresh fears about the possible resurgence of dormant anti-U.N. sentiment in Washington. “The United Nations is not a friend of democracy,” Trump said. “It’s not a friend even to the United States of America where, as you know, it has its home, and it surely is not a friend to Israel.” Trump’s foreign-policy agenda, such as it is, has been defined by pledges essentially to scupper the post-World War II international order and America’s place in it. It has included repeated attacks against U.S. treaty allies, like Japan and South Korea; trenchant criticisms of the NATO that Washington helped build; vows to start trade wars with America’s largest trading partners; a promise to bring back harsh interrogation techniques widely considered torture; and an anti-terrorism policy with features (such as targeting terrorists’ families) that would contravene international law. Part and parcel of that are attacks on the U.N., long a bogeyman for many conservatives, yet one of the foundation stones of the U.S.-led postwar order. It was Franklin D. Roosevelt and Winston Churchill, after all, who referred to the wartime allies as “the United Nations.” More:

http://foreignpolicy.com/2016/03/28/fearing-trump-u-n-embraces-the-art-of-the-deal/?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=%2AEditors%20Picks

North Korea fires short-range missile along its coast

North Korea test fired a short-range missile on its east coast on Tuesday, South Korea’s military said, amid heightened tension over the isolated country’s nuclear and rocket programs. The missile was fired from near the North Korean coastal town of Wonsan at 5.40 p.m. (0840 GMT) and flew northeast for about 200 km and then “made contact” with the mainland, South Korea’s military said in a statement. North Korean leader Kim Jong Un has presided over a string of short-range missile launches in recent weeks in what North Korean state media has characterized as a response to U.N. sanctions imposed for its fourth nuclear test in January. U.S. President Barack Obama will meet South Korean President Park Geun-hye and Japanese Prime Minister Shinzo Abe on Thursday to discuss North Korea’s nuclear program, the White House said on Monday. The meeting on the sidelines of a Nuclear Security Summit in Washington will take place the same day Obama talks with Chinese President Xi Jinping.

http://www.reuters.com/article/us-northkorea-nuclear-missile-idUSKCN0WV0YH

National

U.S. Says It Has Unlocked iPhone Without Apple

SAN FRANCISCO — The Justice Department said on Monday that it had found a way to unlock an iPhone without help from Apple, allowing the agency to withdraw its legal effort to compel the tech company to assist in a mass-shooting investigation. The decision to drop the case — which involved demanding Apple’s help to open an iPhone used by Syed Rizwan Farook, a gunman in theDecember shooting in San Bernardino, Calif., that killed 14 people —ends a legal standoff between the government and the world’s most valuable public company. The case had become increasingly contentious as Apple refused to help the authorities, inciting a debate about whether privacy or security was more important. Yet law enforcement’s ability to now unlock an iPhone through an alternative method raises new uncertainties, including questions about the strength of security in Apple devices. The development also creates potential for new conflicts between the government and Apple about the method used to open the device and whether that technique will be disclosed. Lawyers for Apple have previously said the company would want to know the procedure used to crack open the smartphone, yet the government might classify the method. “From a legal standpoint, what happened in the San Bernardino case doesn’t mean the fight is over,” said Esha Bhandari, a staff lawyer at the American Civil Liberties Union. She notes that the government generally goes through a process whereby it decides whether to disclose information about certain vulnerabilities so that manufacturers can patch them. “I would hope they would give that information to Apple so that it can patch any weaknesses,” she said, “but if the government classifies the tool, that suggests it may not.” In a two-paragraph filing on Monday, the Justice Department said it had “now successfully accessed the data stored on Farook’s iPhone and therefore no longer requires the assistance from Apple.” F.B.I. investigators have begun examining the contents of the phone but would not say what, if anything, they have identified so far. A senior federal law enforcement official who spoke on the condition of anonymity said it was possible that law enforcement might not find anything useful on the phone. More:

http://www.nytimes.com/2016/03/29/technology/apple-iphone-fbi-justice-department-case.html?emc=edit_na_20160328&nlid=53476364&ref=cta&_r=0

 

Million Fraud Arose From a Gilded Legacy

Andrew Caspersen, the banker accused of stealing $25 million, seemed to have it all, at least on paper.

Scion of a family that built and sold a finance company for billions, Caspersen went from Princeton University to Harvard Law School, where students can read rare books in the Caspersen Room or study in the Caspersen Student Center. Until Monday, he was a managing director at PJT Partners Inc. He earned more than $3 million a year, prosecutors said in court, helping private-equity funds restructure.

Now Caspersen, 39, is out of work and charged with what federal prosecutors describe as a brazen fraud. According to the Manhattan U.S. attorney’s office, he invented a fake “credit facility” that promised high returns and duped a hedge-fund manager into wiring him millions last year, most of it from a charitable foundation. He gambled it away betting on stock options in just four weeks, according to the criminal complaint. In all, Caspersen is accused of scheming to defraud investors of more than $95 million.

Caspersen’s case raises questions about how PJT, an advisory firm that combined with the mergers and restructuring businesses of private-equity giant Blackstone Group LP last year, failed to notice what he was doing, and why someone in his position would allegedly run a scam that was likely to be discovered. PJT’s stock plunged as much as 25 percent before recovering to close down 11 percent at $23.66. Caspersen didn’t offer any answers when he appeared in Manhattan federal court on Monday wearing a white polo shirt and gray slacks, with his wife, mother and one of his brothers looking on from the back row. Defense lawyer Dan Levy, arguing against prosecutors’ request for $20 million bail, said his money was all gone. “Losses have eviscerated any assets,” he said. More:

http://www.bloomberg.com/news/articles/2016-03-29/banker-accused-of-25-million-fraud-arose-from-a-gilded-legacy

U.S. Quake Forecast Includes Human-Induced Temblors for First Time

The U.S. agency responsible for monitoring earthquakes has for the first time issued a short-term seismic forecast that includes both natural and human-induced risks. The report comes after an alarming six-year rise in the incidence of quakes throughout parts of the U.S. where some seven million people may be affected, including pockets that could see quakes as damaging as those typically occurring in California.  The states facing the highest risks from human-induced quakes are, in order, Oklahoma, Kansas, Texas, Colorado, New Mexico, and Arkansas. The largest populations at risk live in Oklahoma and Texas. Earthquakes measuring higher than 3 out of 10 on the Richter scale reached into the hundreds in 2015, up from an average of 24 between 1973 and 2008. Many of the temblors are what scientists call “induced earthquakes” and have been linked to underground storage of water related to oil and gas production. A recent journal study by scientists with the U.S.Geological Survey concluded that water injection wells with the highest rates, greater than 300,000 barrels per month, are more frequently associated with quakes than lower-volume wells, and that managing these injection rates may be a good way to reduce quake risk.

http://www.bloomberg.com/news/articles/2016-03-28/u-s-quake-forecast-includes-human-induced-temblors-for-first-time

 

There hasn’t been a criminal defense lawyer on the Supreme Court in 25 years. That’s a problem.

It’s been a quarter-century since a former criminal defense lawyer sat on the Supreme Court. Since then, crime has fallen by half. Incarceration has risen, then fallen (slightly) again. Americans are becoming more and more critical of the “tough-on-crime” mindset that defined the end of the 20th century, and more skeptical that police and prosecutors will always use their powers for good — in other words, they’re coming in line with how defense lawyers see the world. But when Barack Obama made his third (and likely final) Supreme Court nomination last week, he nominated Merrick Garland. Garland is a former prosecutor with a tough-on-crime record. The Court already has two ex-prosecutors. Appellate defense lawyer Timothy O’Toole points out that the Court has veterans of both sides of civil cases (defendants’ and plaintiffs’ lawyers) and one side of criminal cases (prosecutors). “But the one group that seems kind of outside that box, particularly on the Supreme Court, are defense lawyers. And that’s a shame.” Defense lawyers and scholars worry this isn’t an accident; it’s the result of the structure that shapes who can get nominated to the Supreme Court to begin with. Federal judges tend to be people who “ticked all the political checkboxes on their career starting from when they were 15,” says Tejas Bhatt, assistant public defender for New Haven, Connecticut. Often one of those boxes is working as a prosecutor. Even beyond any particular career experience, the system rewards “people who don’t take controversial positions, they don’t do controversial things, who don’t issue controversial opinions, who do seem to hew more toward law and order and enforcement.” More:

http://www.vox.com/2016/3/28/11306422/supreme-court-prosecutors-career

 

Nathan Deal vetoes Georgia’s ‘religious liberty’ bill

 Gov. Nathan Deal on Monday vetoed the “religious liberty” bill that triggered a wave of criticism from gay rights groups and business leaders and presented him with one of the most consequential challenges he’s faced since his election to Georgia’s top office. In a press conference at the state Capitol, Deal said House Bill 757 doesn’t reflect Georgia’s welcoming image as a state full of “warm, friendly and loving people” – and warned critics that he doesn’t respond well to threats of payback for rejecting the measure. “Our people work side by side without regard to the color of our skin, or the religion we adhere to,” he said. “We are working to make life better for our families and our communities. That is the character of Georgia. I intend to do my part to keep it that way,” he said. “For that reason, I will veto HB 757.” The two-term Republican has been besieged by all sides over the controversial measure, and his office has received thousands of emails and hundreds of calls on the debate. The tension was amplified by a steady stream of corporate titans who urged him to veto the bill – and threatened to pull investments from Georgia if it became law. The governor’s planned veto will likely infuriate religious conservatives who considered the measure, House Bill 757, their top priority. This is the third legislative session they’ve sought to strengthen legal protections from opponents of gay marriage, but last year’s Supreme Court ruling legalizing same-sex weddings galvanized their efforts. It is also likely to herald a more acrimonious relationship between Deal, who campaigned on a pro-business platform, and the evangelical wing of the Georgia Republican party. Already, prominent conservatives have vowed to revive the measure next year. The governor, though, had ample cover from the measure’s critics. Executives from dozens of big-name companies, including Disney, Apple, Time Warner, Intel and Salesforce, called on the governor to veto the bill. The NFL warned it could risk Atlanta’s bid for the Super Bowl and the NCAA hinted it could influence the state’s ability to host championship games. And Deal’s office said two economic development prospects have already abandoned Georgia because of the legislation. More:

http://politics.blog.ajc.com/2016/03/28/breaking-nathan-deal-will-veto-georgias-religious-liberty-bill/

Secret Service: No guns in GOP convention

The Secret Service says people attending the Republican National Convention in Cleveland this July will not be allowed to carry guns. The statement comes in response to a petition that calls for allowing open carry of guns inside Quicken Loans Arena, the host venue. The petition has amassed more than 43,000 signatures as of Monday morning. Secret Service spokesman Robert Hoback said in a statement that “only authorized law enforcement personnel” working with the agency will be allowed to carry firearms inside protected areas. “Individuals determined to be carrying firearms will not be allowed past a predetermined outer perimeter checkpoint, regardless of whether they possess a ticket to the event,” Hoback said. The Secret Service cited federal law that allows the agency to prevent firearms from being carried into venues with protectees present, even in open-carry states. The Secret Service previously sent a statement to Cleveland’s Newsnet5.com. The petition, which was posted last week on Change.org, has drawn widespread attention, in large part because it seemed designed to test the limits of the Republican Party’s support for the Second Amendment. The anonymous author noted that, while Ohio is an open-carry state, Quicken Loans Arena policy forbids weapons of any kind to be carried into the facility. “This is a direct affront to the Second Amendment and puts all attendees at risk,” the petition reads. The origins of the petition are murky, and some websites have questioned whether it is satire or a hoax. An anonymous blogger, Hyperationalist, posted the petition on Change.org. “Yesterday morning, the dedicated staff of the Hyperationalist launched the Change.org petition posted below,” the blog wrote last Thursday. “We have since collected 1,500 signatures and the pace seems to be picking up. Clearly we have struck a nerve.” Chris Matyszczyk of Cnet referred to the petition as “satirical” in a Monday morning piece. A Twitter account linked to the blog retweeted several messages calling the petition “Wizard-level” and “God-tier” trolling. “Win-win for the Trump people at last night’s rally: a protester got beat up and a black guy got arrested. #TrumpRally #NeverTrump” the user tweeted on March 20. Regardless of its origins, the petition has won attention. Republican frontrunner Donald Trump, who is under Secret Service protection, said this Sunday on ABC’s “This Week” he wanted to take a closer look at the proposal. Trump called himself “a very, very strong person for Second Amendment,” but added, “I have not seen the petition. I want to see what it says. I want to read the fine print.” Other candidates — Sen. Ted Cruz (Texas) and Ohio Gov. John Kasich — have not chimed in on the petition. The Republican National Committee deferred questions about venue security to the Secret Service, which is coordinating with federal, state and local law enforcement to secure the convention site.

http://thehill.com/policy/national-security/274473-secret-service-no-guns-in-convention

Former administration pardon attorney suggests broken system in resignation letter

WASHINGTON — The Obama administration instructed Justice Department attorneys to neglect applications for presidential pardons to give priority to the Justice Department’s initiative to release low-level offenders from prison, the former pardon attorney said in her resignation letter early this year. That inaction was one of several issues that former Pardon Attorney Deborah Leff cited in her letter, which was obtained by USA TODAY after making a Freedom of Information Act request. Leff resigned in January after less than two years as the official responsible for making clemency recommendations for the president. Her resignation letter suggests a broken and bureaucratic process at odds with President Obama’s own aim to exercise his pardon power “more aggressively” in the final months of his presidency. Leff wrote that the administration’s focus on the clemency initiative at the expense of traditional pardons and commutations “means that the requests of thousands of petitioners seeking justice will lie unheard.” “This is inconsistent with the mission and values to which I have dedicated my life, and inconsistent with what I believe the department should represent,” she wrote. It’s the job of the U.S. pardon attorney to investigate all of those cases and make a recommendation to the deputy attorney general, who then forwards it to the White House Counsel’s Office and, ultimately, the president. Because the pardon attorney advises the president on sensitive cases, the process is cloaked in secrecy, and officials rarely discuss the process publicly. So Leff’s letter offers a rare glimpse into how the pardon office works in the Obama administration. Unlike in previous administrations, where pardon office staffers and the White House had routine conversations, Leff said she was denied “all access to the White House Counsel’s Office,” which is the last step for a pardon application before being approved or denied by the president. She said Deputy Attorney General Sally Quillian Yates had overruled her recommendations in an increasing number of cases — and that in those cases, the president was unaware of the difference of opinion. “I believe that prior to making the serious and complex decisions underlying clemency, it is important for the president to have a full set of views,” she said. More:

http://www.usatoday.com/story/news/politics/2016/03/28/former-administration-pardon-attorney-suggests-broken-system-resignation-letter-obama/82168254/?csp=breakingnews

As SAT was hit by security breaches, College Board went ahead with tests that had leaked

Internal documents show that the U.S. college entrance exam has been compromised in Asia far more often than acknowledged. And the newly redesigned SAT retains a key vulnerability that the test-prep industry has exploited for years. Xingyuan Ding is a sophomore at the University of California, Los Angeles, one of America’s most exclusive public universities. In applying to schools, the 20-year-old from China took the SAT college entrance exam four times. He had an advantage on his final try: a booklet compiled by a Shanghai test-preparation school he attended. His study aid was far more valuable than the practice questions that students in America use to prepare for the SAT, the standardized test used by thousands of U.S. colleges to help select applicants. Known in Chinese as a jijing, the booklet was essentially an answer key. It revealed words from the correct responses to multiple-choice questions that had appeared on past SATs – many of which would be used again on the exam Ding took. Thanks to the booklet, Ding said he already knew the answers to about half of the critical reading section of the SAT when he took the test in Hong Kong in December 2013. “I felt really lucky,” Ding said. His score on that section? A perfect 800, he said. Ding’s advance look at material from the test he took was no fluke. His cram school is part of a vibrant Asian industry that systematically exploits security shortcomings in the SAT. Chief among them is a vulnerability created by the owner of the exam: the routine practice of reusing material from tests that already have been given. The College Board, the not-for-profit organization that owns the SAT, has acknowledged widespread problems with test security in Asia in recent years. Since October 2014, the New York-based organization has delayed issuing scores in Asia six times and canceled an exam sitting in two locations there – steps the College Board takes when it has evidence that test material has been exposed to the public. More:

http://www.reuters.com/investigates/special-report/college-sat-one/?utm_source=facebook/

Welcome To Rent Court, Where Tenants Can Face A Tenuous Fate

Today, more than 11 million families spend over half of their incomes on rent, and for the poor, it can be as much as 80 percent. That means millions of Americans face the threat of eviction, or they live in substandard housing because it’s all they can afford. NPR’s Pam Fessler has been spending time at the rent court in Washington, D.C., where the struggle between low-income renters and landlords over affordable housing often comes to a head. In some places, it’s called rent court or housing court. Others, eviction court. In Washington, D.C., it’s known as the Landlord and Tenant Branch. This is where landlords in the city sue tenants, usually because they failed to pay the rent. Each weekday morning, dozens of people can be seen filing into the three-story courthouse where their cases will be heard. And maybe their fates decided. Everyone passes through a metal detector. Women with small children. Elderly tenants with walkers and canes. Several of those who gather in the hallway wear work uniforms. They’re nurse’s aides, security guards, grocery store clerks. The tenants are among the city’s poorest residents. And while this city’s population is less than half African-American, according to U.S. census data from 2014, almost every single tenant here — day after day after day — is black. The white people are usually attorneys. In the wood-paneled courtroom the loud wooden pews squeak loudly during roll call of the day’s cases, which can run into the hundreds. This court had 32,000 cases last year alone. In an effort to help lighten the caseload, the judges encourage tenants and landlords to try to work out a settlement before they’re called into the courtroom. And many of them do, often with the help of a court-appointed mediator. More:

http://www.npr.org/2016/03/28/470522433/welcome-to-rent-court-where-tenants-can-face-a-tenuous-fate

Ex-attorney asks Supreme Court for release of ‘D.C. Madam’ records

A former attorney to “D.C. Madam” is asking the Supreme Court to let him release phone records from Deborah Palfrey’s escort service, saying they could affect the 2016 presidential election, WTOP reported. The records include customer names, addresses and social security numbers. Montgomery Blair Sibley is not permitted to release Palfrey’s records because of a judge’s 2007 restraining order. Sibley filed an application Monday requesting he be released from the restraining order. “Time is of the essence because people are casting votes in primaries and caucuses,” Sibley said, according to U.S. News.

“I believe this information is relevant to that political discourse. “Denying Sibley a hearing deprives the People of the information they may deem material to the exercise of their electoral franchise,” he wrote in his application for a stay of restraining order, according to WTOP. Sibley threatened to release information about Palfrey’s customers if the Supreme Court won’t hear his request. Sibley sued former Chief Judge Richard Roberts of D.C.’s U.S. District Court and Clerk of the Court Angela Caesar for $1 million each. He says in the suit that his First and Fifth Amendment rights were violated because he has not been permitted to argue that Palfrey’s records should be released. His case hasn’t been heard yet. “To be clear, if Sibley is not allowed to file his Motion to Modify the Restraining Order and thereafter does not promptly receive a fair and impartial hearing on that Motion, he will justifiably consider the Restraining Order void as a result of being denied such a hearing by the District Court, Circuit Court and now this Court,” a footnote in Sibley’s Supreme Court filing says. “In that event, Sibley will simply release publicly the Verizon Wireless Subpoena Return records containing the names and addresses of eight hundred fifteen Washington, D.C. clients of the D.C. Madam’s escort service,” Sibley wrote.

http://thehill.com/blogs/blog-briefing-room/news/274512-former-attorney-asks-supreme-court-to-allow-release-of-dc-madam

Alabama attorney tapped to clerk for Supreme Court Justice Clarence Thomas

BIRMINGHAM, Ala. — Last week, the Birmingham law firm Maynard Cooper & Gale announced that one of their attorneys would be clerking for U.S. Supreme Court Justice Clarence Thomas. That lawyer, Mrs. Kasdin Miller Mitchell, will be one of Thomas’ four clerks for the 2016 term beginning this summer. Mitchell received both her undergraduate and law degree from Yale University. While in law school, she was Senior Editor of the Yale Law Review and Co-Editor-in-Chief of the Yale Law & Policy Review. Prior to attending law school, she served as the Assistant Press Secretary to the First Lady at The White House and as a special assistant at the United States Department of Energy. Currently, Mitchell is a member of the firm’s Securities Litigation and Appellate and Post-Verdict practices. Prior to joining Maynard Cooper & Gale, she served as a law clerk to Judge William H. Pryor Jr. on the United States Court of Appeals for the Eleventh Circuit and as an assistant solicitor general in the Office of Attorney General of the State of Alabama. Being selected as a law clerk for the Supreme Court is very prestigious. Each justice is allowed to have up to four clerks, except the Chief Justice who gets five. The primary job of the clerks is research. When a justice is assigned an opinion to write, she will have her clerks organize all the relevant information, deconstruct arguments from briefs and oral testimony and amicus sources, develop the legal framework for the opinion, and assist in drafting the opinion. After the passing of Justice Scalia, Justice Thomas is now considered by most to be the most conservative jurist on the bench. Thomas, who first joined the court in 1991, employs a brand of Originalist interpretation that is unique among his more progressive colleagues. Thomas has also gained renown for his perpetual silence during court. Beginning on February 22, 2006, when he asked a question during a death penalty case, Thomas had not asked another question from the bench for over ten years, finally asking a question on February 29, 2016. Justice Thomas and his clerks will be integral in the key issues before the court in the 2016 term. The court will hear a wide array of issues ranging from union political spending power to environmental regulations.

http://yellowhammernews.com/politics-2/birmingham-attorney-to-clerk-for-justice-thomas/

NY governor bans state travel to North Carolina

New York Gov. Andrew M. Cuomo signed an executive order Monday banning all non-essential state travel to North Carolina. The order compels all New York agencies to review any planned trips to the state and cancel any “publicly funded travel that is not essential to the enforcement of state law or public health and safety,” according to a statement from his office. The ban follows enactment last week of a law in North Carolina that prohibits people from using bathrooms that don’t match their biological sex and bans municipalities from creating their own antidiscrimination policies. The law has been widely condemned by other politicians, media outlets, gay rights advocates and businesses around the country. The mayor of San Francisco last week announced he is banning city employees from traveling to North Carolina on public business. The American Civil Liberties Union announced Monday it is filing a federal lawsuit, saying the law is discriminatory to the lesbian, gay, bisexual and transgender community.

http://thehill.com/blogs/ballot-box/274515-ny-governor-bans-state-travel-to-north-carolina

Why Ted Cruz’s sex life matters: The GOP’s toxic “family values” charade deserves continued scrutiny

When is an affair just an affair? And when is someone’s private sex public business? Those are the questions of the moment following two sets of high-profile allegations involving Republican politicians engaging in extramarital relations. Last week, the National Enquirer alleged that GOP presidential candidate Ted Cruz had been “caught cheating” with five mistresses, choosing not to identify the women by name. Earlier in the week, a story broke that Robert Bentley, Alabama’s virulently anti-gay governor, was having an affair with Rebekah Caldwell Mason, his married chief of staff. As Neal Broverman reports for the Advocate, rumors of their affair had been circulating in Washington for years. Both deny the allegations. Many believe that what takes happens in the bedrooms between consensual adults should stay there, even when it’s politicians whose policies we disagree with. My colleague, Mary Elizabeth Williams, argued that this is hardly the worst misdeed Cruz has ever committed; however, in our extremely sex negative culture, it may be the one that ends his White House run. “[O]f all the reasons that Cruz shouldn’t be president, is an accusation that he slept with other women really the one he ought to go down for?” Williams asks. She astutely notes that—given the possibility that the report was leaked by a Trump staffer—the story is “intriguingly timed, to say the least.” Should it prove legitimate, inquiry about Ted Cruz’s sex life is more than just “gossip”—as Politico’s Jack Shafer likewise suggested. Cruz’s alleged affairs are worthy of inquiry for the same reason that it’s news when closeted Republicans like Larry Craig foot-tap for sex in an airport bathroom or Randy Boehning is caught on a gay hookup app: Their lies hurt people. Their duplicity, often cloaked in “family values” political rhetoric, profoundly affects the LGBT populations against whose interests they consistently voted, even while engaging in the exact behavior they deemed despicable. In 2006, Craig—the now-disgraced Idaho Senator—supported adding an amendment to the Constitution that would ban same sex-marriage. There’s a great rule of thumb on the subject, known as the Barney Frank Rule. “I think there’s a right to privacy,” the retired Senator once explained to Bill Maher. “But the right to privacy should not be a right to hypocrisy. People who want to demonize other people shouldn’t then be able to go home and close the door, and do it themselves.”

http://www.salon.com/2016/03/29/ted_cruzs_sex_life_matters_the_gops_toxic_family_values_charade_deserves_continued_debunking/?utm_source=facebook&utm_medium=socialflow

Tired of Being Defined by Others, G.O.P. Women Speak for Themselves

WASHINGTON — When Representative Cathy McMorris Rodgers took a position in the House Republican leadership after the 2012 elections, she knew she had a lot of work to do. Her party had just lost multiple key constituencies, and she was particularly bothered by the party’s poor standing with women. “I found that our brand was so damaged that it was almost like they couldn’t even hear us,” said Ms. McMorris Rodgers, of Washington State, who juggles considerable responsibilities on Capitol Hill with three young children age 8 and under. Acutely aware that the Democrats will most likely have a woman at the top of their ticket in 2016, Ms. McMorris Rodgers and some of her female colleagues undertook an ambitious campaign — and an unconventional one by Washington standards. They decided to reach out to women via women’s magazines and new media, hoping to connect with them in grocery store aisles and through popular online forums. They recorded some success with upbeat tales of Republican women scattered through the pages of publications such as Glamour, Good Housekeeping, Marie Claire and, most recently, Elle. Now she and her colleagues face not only the prospect of Hillary Clinton as the Democratic nominee, but also the businessman Donald J. Trump as their own standard-bearer. They fear that his well-documented negative remarks about women could unravel all of their efforts to cast Republican women in a positive light. A new CNN/ORC poll found that 73 percent of registered female voters in the United States had an unfavorable view of Mr. Trump, and 31 percent of Republican women would be upset if Mr. Trump won. “I think his comments regarding women and other comments, I find them inappropriate,” Ms. McMorris Rodgers said in an interview. “I find them hurtful and I think they are hurtful to the party, a party that has been founded on equal opportunity for all.” More:

http://www.nytimes.com/2016/03/29/us/politics/gop-women-try-to-reach-other-women-with-their-own-message.html?ref=politics&smid=tw-nytpolitics&smtyp=cur&_r=0

State/Local

 

Governor Bentley’s office reportedly under investigation on federal and state level

 MONTGOMERY, Ala. (WIAT) — Multiple sources, as well as CBS 42 sister station WKRG, are reporting that there are at least two active investigations against Governor Bentley and his top aide, Rebekah Mason. One investigation is reportedly on the state level, and the other is allegedly on the federal.

Multiple sources close to the investigation confirm to CBS 42 News that the State Attorney General and U.S. Attorney’s office are conducting interviews. The U.S. Attorney is reportedly looking into a possible misuse of state resources and campaign money in regards to the Governor’s relationship with Mason.

Meanwhile, the state is reportedly interested in Bentley’s alleged involvement in the criminal case against House Speaker Mike Hubbard. CBS 42 News is following this breaking news, and will have the latest on our investigation as new information becomes available.

http://wiat.com/2016/03/28/governor-bentleys-office-reportedly-under-investigation-on-federal-and-state-level/

 

These four audio clips suggest Bentley is lying when he denies having a ‘physical affair’

Alabama Governor Robert Bentley insists he did not have a physical relationship with his senior advisor Rebekah Mason, but his own words — captured in a recording made by his then-wife — suggest he is not being entirely forthcoming. “I want everyone to know though that I have never had a physical affair with Mrs. Mason,” Bentley said in a press conference last week. Longtime political observers noted the similarities between Bentley’s statement and then-President Bill Clinton’s assertion that he “did not have sexual relations with that woman, Ms. Lewinsky.” DNA evidence ultimately proved that Clinton was lying. Audio recordings obtained by Yellowhammer News seem to do the same in Bentley’s case. Here are four comments made by Bentley during phone conversations with Mrs. Mason that reference past physical contact between the two:

http://yellowhammernews.com/politics-2/bentley-denies-having-a-physical-affair-the-evidence-suggests-he-is-lying/

 

Report: Medicaid expansion would benefit 85,000 Alabamians with mental illness

Expanding Medicaid could help 85,000 low-income people in Alabama who are struggling with substance abuse and mental illness, according to a new report from the U.S. Department of Health and Human Services. People with mental illness account for more than 30 percent of the low-income uninsured in Alabama, according to the report. Studies show that people with Medicaid coverage are more likely to seek care than their uninsured counterparts. The costs of treating mental illness and substance abuse among low-income residents have typically fallen to the states. Alabama and many other states have cut the budgets of mental health agencies, resulting in the loss of state treatment beds. This, in turn, has put pressure on hospital emergency rooms, which frequently treat patients in mental health crisis. The report highlighted some examples of improved care for mental illness and substance abuse disorders in states that expanded Medicaid. In Oregon, for instance, people newly eligible for Medicaid had a lower probability of depression. In Alabama, expanding Medicaid could translate to 16,000 fewer people reporting symptoms of depression, according to the report. States that expanded Medicaid also had higher rates of growth in the number of doctors certified to prescribe medication for substance abuse disorders, according to the report. According to the CDC, Alabama has the highest rate of opioid prescriptions per capita in the country. Homeless people in Alabama, who suffer from high rates of mental illness and substance use disorders, could be one of the groups most likely to benefit from Medicaid expansion, according to the report. The federal government is paying all the costs of Medicaid expansion through 2016, but President Barack Obama has proposed to increase that for another three years for the 19 states that have not expanded coverage, including Alabama. States will ultimately shoulder 10 percent of the costs of expansion. Opponents of Medicaid expansion have said the costs could top $200 million a year in Alabama. Legislators have shown little appetite for increasing the Medicaid budget, and are currently considering a funding plan that would leave the agency about $85 million short of the full amount requested by the commissioner. The budget proposed by legislators could jeopardize a plan to control Medicaid costs by transitioning to managed care, said Gov. Robert Bentley. More:

http://www.al.com/news/index.ssf/2016/03/medicaid_expansion_would_benef.html#incart_river_home

 

Some in GOP Want Bentley OUt

As first reported last week by the ‘Alabama Political Reporter,’ state and federal investigators are reportedly continuing their separate probes into the conduct of embattled Governor Robert Bentley (R) and the generous financial compensation he has paid over the course years to his top advisor, and alleged mistress, Mrs. Rebekah Caldwell Mason as well as allegations that Gov. Bentley and Mrs. Mason are involved in a conspiracy to undermine and obstruct the prosecution against indicted Speaker of the House Mike Hubbard (R from Auburn) by ordering Alabama Law Enforcement Agency (ALEA) Secretary Spencer Collier not to tell the truth to state prosecutors. When Collier complied with the Alabama Attorney General’s office request for an affidavit, he was suspended and then fired by an angry Gov. Bentley. There are also allegations that the pair and acting ALEA head Stan Stabler have fired or reassigned top ALEA officials without any due process in order to close and cover up a number of state ethics investigations. It could take weeks for the FBI and the Alabama Attorney General’s office to sort this all out and complete their investigations and likely could take even more time to empanel investigative grand juries to weigh the evidence against Gov. Bentley and the other accused. If the grand jury did actually indict the Governor it would be months after that for a trial to occur. State Representative Mike Hubbard (R from Auburn) was indicted on 23 felony counts in October of 2014 and still has not gone to trial. Waiting for this mess to grind its way through the courts is not good enough for some in the Alabama GOP. On Monday, March 28 the College Republican Federation of Alabama Executive Board unanimously passed a resolution calling for, “Robert Bentley to resign immediately from his elected position as Governor of Alabama to prevent further shame and embarrassment on the state of Alabama, its citizens, and the Republican Party.”

http://www.alreporter.com/some-in-gop-want-bentley-out/

 

Paranoia Inside the Bentley Bubble

MONTGOMERY—Those inside Gov. Robert Bentley’s inner circle have, for the last several months, expressed concerns about the growing paranoia driving the Governor and his senior adviser Rebekah Caldwell Mason. Several months ago, Mason became convinced that Matt Hart, Chief of the Attorney General’s Special Prosecution Division, was coming after her. Hart, of course, led the investigation, which resulted in the indictment of Speaker Mike Hubbard on 23 felony counts of public corruption. “Rebekah convinced the Governor that Hart was out to get her,” said a former Bentley political adviser. “To this day, she has him convinced that Hart is more evil than Hubbard, if you can imagine that?” About six months ago, a rumor began to circulate among politicos that Hart had a “hit list” of individuals who would be prosecuted if Hubbard were convicted. Prominent lobbyists, former Bentley advisors, big corporations, and Mason were rumored to be among Hart’s targets. According to those formerly aligned with Hubbard, this so-called hit list was manufactured by Hubbard and his cronies as a way to drive people to fear the Attorney General’s Office and, in turn, aid Hubbard. “The enemy of my enemy is my friend,” was the endgame for what Hubbard’s people believed. “If they could make people believe they were on Hart’s list after his trial then they would help Hubbard stop Hart now. That was the thinking,” according to the source. Since Bentley’s reelection in 2014, those once close to the Governor say, a “bunker mentality” has taken hold at the Capitol, with Mason handling all negative fallout while feeding Bentley only the information she wanted him to have. “She has filtered what news reports he sees, since the middle 2014,” a former staffer said. “She only wants him to see skittles and rainbows.” In fact, copies of the Governor’s daily press clippings from March 23 to 28, obtained by alreporter.com, show not one sign of the avalanche of negative press surrounding Bentley. SEE PRESS CLIPPINGS Inside the bubble that has become the Bentley Administration, the Governor is in the dark, say former top advisors. Also, reportedly, cabinet members are rallying around the embattled Governor believing that his apology for inappropriate sexting and FaceTime chats will die out over time. “They truly believe this is no big deal and that the apology was all he needed to do,” a former staffer said. “Rebekah is telling everyone, she has everything under control.” What Mason told staffers would make a two-day story, is into its second week, with no signs slowing down.

http://www.alreporter.com/paranoia-inside-the-bentley-bubble/

 

UAH students protest Trump-supporting Jeff Sessions as graduation speaker

Citing in part his support for Republican presidential candidate Donald Trump, students at the University of Alabama in Huntsville are protesting U.S. Sen. Jeff Sessions as the keynote speaker at spring graduation. A petition on Change.org points to an array of reasons Sessions should not be welcome as the graduation speaker but primarily focuses on his growing ties with Trump, the GOP front runner. Sessions is chair of the Trump campaign’s National Security Advisory Committee and has been a strong influence on Trump’s immigration policies. Sessions, who arranged a meeting between Trump and GOP leaders earlier this month in Washington, has also been speculated as a vice presidential candidate. Despite the petition, posted over the weekend and now with 315 signatures by midday Monday, the school stood by its decision to tap Sessions as the graduation speaker for the May 1 event at the Von Braun Center. “The Honorable Jeff Sessions has ably served the people of Alabama as United States Senator since 1997, and was the unanimous choice for Commencement speaker of a diverse selection committee that represents students, faculty and staff,” the school said in a statement to AL.com. “As a university that values inclusiveness, we welcome Senator Sessions with the respect and civility that he and his office deserve.” Dalton Hicks, a UAH junior majoring in aerospace engineering who, along with girlfriend and UAH graduate Victoria Forrester, started the petition, acknowledged that preventing Sessions from speaking may not be possible. “Getting things to change in such a quick manner like this may not be feasible,” Hicks told AL.com on Monday. “We do want to put forward the message that a large part of the student population did not agree with this decision. If they are able to remove him as the speaker and replace him with someone who is more indicative of the whole of UAH, the diversity of UAH, that would be amazing. “But at least this gets the information to them that this wasn’t OK, you kind of dropped the ball here, you could have done a lot better with the speaker and you didn’t. It just lets them know to try not to do this again.” In the petition stated that Sessions’ presence as the speaker “only enrages the student body and in no way represents the whole of this University.” “It is known that Republican Presidential Candidate Donald J. Trump has said many inflammatory remarks towards women, the disabled, and immigrants,” the petition states in part. “All of which are populations not to be forgotten at this university. Whereas, Donald J. Trump has proposed a large amount of cuts and downsizing of the Department of Education that will likely interfere with the federal funds necessary to run our beautiful institution and provide students the opportunity of a higher education. This in turn will cause a rise in the cost of attendance of an establishment of higher education which runs counter to the wishes of the student body at this university. “While we as students at this university understand that listening to all voices can allow for better communication of ideas and an equal understanding of all views, this Commencement Ceremony is not the time or place for such. This speech is something to inspire and send off students to the larger world. You want to leave them motivated and driven and we believe that this choices only enrages the student body and in no way represents the whole of this University.” Hicks said that Sessions’ voting record on higher education funding, his support of Trump and his lack of support for LGBT citizens played roles in starting the petition. He also said that Sessions did not measure up to NASA Administrator Charles Bolden, the December graduation ceremony speaker. “Either the university was blind to that or somebody messed up something along the line or there is some other underlying reason,” Hicks said. “That doesn’t gel with us, the students.”

http://www.al.com/news/huntsville/index.ssf/2016/03/uah_students_protest_trump-sup.html#incart_river_home

New bill can end state-issued marriage licenses

Engaged students at The University of Alabama have to consider the effects of a new marriage-license-ending bill when deciding whether or not to get married in Alabama. The bill ends state-issued marriage licenses in Alabama and passed the state’s Senate on March 15. This bill would repeal the current procedure and instill a new system in which couples will 
complete forms recording their marriages. For couples wishing to marry in Alabama, this bill would require their lawyers to handle the legalization of their marriage. The state would then record marriages instead of granting licenses. Rep. Greg Albritton, the bill’s sponsor, told The Associated Press the bill would benefit couples, as the process of filing forms is easier than obtaining a marriage license. Opponents of the bill argue that it is an unfair response to the recent legalization of same-sex marriage. If the state doesn’t grant marriage licenses, it’s no longer responsible for recognizing same-sex marriages. Birmingham judge Brian Huff said the bill is not an effort to streamline the marriage process, but an example of legalized bigotry. “Why cause all these problems if the current system isn’t broken?” he told AL.com. “This bill exists for no reason other than to make it clear that the state legislature doesn’t agree with same-sex marriage.” Engaged student Melia Cotter believes this bill would actually help calm controversy throughout the state. Cotter, a junior majoring in nursing, said this bill would take away the pressure to recognize same-sex marriages on government officials who oppose them and is a good way to handle the backlash since the U.S. Supreme Court’s decision. “I think the society we are a part of at this time is obviously having a huge battle over the definition of marriage,” she said. “Therefore, from my knowledge of the bill, I think overall it is a wise move … in my eyes, a contract by the state doesn’t define my marriage.” Kirk Walter, advisor for UA Spectrum and assistant director of the Office of Student Involvement, said he thinks the government has no business in people’s bedrooms in general, and the proposed direction of a legal contract is hypothetically ideal. However, he said he doesn’t think the bill is written in an entirely libertarian spirit. “This is not too far upfield of a separate but equal kind of standard,” he said. “[Marriage] has been a state sponsored activity for so long, and now that it’s actually being opened up to loving couples of any sense, just to scale that back and have this kind of toddler tantrum about it is kind of pathetic.” The bill also affects engaged students at the University who plan to marry in Alabama and relocate to another state. Montgomery County Probate Judge Steven Reed told AL.com problems could arise if a married couple doesn’t have a marriage license in another state. The bill would make the marriage process more expensive, as couples need more help from attorneys, especially because the bill would also require the couple to make a prenuptial agreement. This kind of added financial stress may force engaged students to postpone their plans. Emily Surratt, a senior majoring in nursing, said although she and her fiancé do not plan to marry in Alabama, she does not see why this bill would be necessary. “I suppose if we were getting married here, we would have to go along with it, and would likely find it annoying that Alabama decided to do their own thing, and that our marriage may not be recognized legally in other states,” she said. A version of this bill did not make it past the House of Representatives in 2015. Now, Albritton’s modified version is expected to be presented in committee in the House in the upcoming weeks.

http://www.cw.ua.edu/article/2016/03/new-bill-can-end-state-issued-marriage-licenses

 

Blogs/Opinions

 

Win Free Sex: Distraction

Former Alabama Law Enforcement Agency Secretary (ALEA), Spencer Collier, held a press conference on Wednesday, where he reiterated Gov. Robert Bentley’s order to lie to the State’s Attorney General, the firings at ALEA, the closing of ongoing criminal investigations into the Bentley Administration and a sitting State Senator. But if you read press reports from around the State about the presser, you would be led to believe it was all about an alleged affair between Gov. Bentley and his unpaid senior advisor, Rebekah Caldwell Mason. Sadly, sex sells more than potential criminal activities. The story of Collier’s firing is now tied to an alleged sexual peccadillo, but it is so much more than that. This story is as old as time, where a ladder-climbing younger female finds a strong man. She is seduced by his power, and he is led astray by her charms. Those who have worked along side Bentley and Mason fear to speak publicly, but they say privately, she is not just the power behind the throne, she only allows Bentley to believe he occupies that royal seat. They are a team, but only in the sense that she runs the games, and he follows her lead. As Collier said at his press conference, she was not elected by the people, Bentley was. But she is in charge. Collier alluded to the fact that it was Mason who determined which drivers licenses offices would be closed, and where, and she is the one who decided that the State Parks should be closed. Others have now confirmed that it was Mason who said of the park closings, “Close them. Only poor people use them anyway,” according to two individuals in the meetings. Gov. Bentley held a press conference just hours after Collier, where he apologized for inappropriate remarks he made to Mason, which had recorded. When asked if Mason had asked him to stop making such remarks, he said, “No.” And in a moment reminiscent of President Bill Clinton’s denial of his affair with Monica Lewinsky, the Governor said, he did not have sexual relations with Mrs. Mason. Collier and others have said that sexting, and other inappropriate behavior was witnessed by staff and law enforcement. Will State Senators at an impeachment hearing have to decide what the mean of is, is? Mason said Collier had a gender bias, and that if she were a man she would be treated differently. Would the Governor have said how much he liked squeezing her breast if she were a man? Collier once again said he would swear under oath to his actions, and that Bentley and others should do the same. But again, this is not about who did or did not have sex. This is about the law. Did Bentley or Mason give any orders or have any influence over the firings and reassignments of ALEA personnel? Did Bentley or Mason give any orders or have any influence over the closing of criminal cases at ALEA? Did Bentley or Mason give any orders or have any influence over the investigation they claim shows wrong doing by Collier or others? Did Bentley and Mason use State resources to facilitate or cover up any illicit activities? And was it illegal for Bentley to order Collier to lie to the Attorney General? The alleged sexual relations between Bentley and Mason is a distraction from the most important question: Have any crimes been committed? “Do not know, do not hear, do not see, do not speak,” are tenets from the murderous regime of Cambodian Dictator, Pol Pot, leader of the deadly Khmer Rouge. Many of the horrors of the Khmer Rouge are chronicled in the book, “The Killing Fields.” As of late, Alabama has become a killing field for political careers, reputations and public trust. In just five and a half short years, the Republican leadership has shown that the Democrats were rank amateurs when it comes to corruption.

http://www.alreporter.com/win-free-sex-distraction/

Morning Money

BREAKING OVERNIGHT: EGYPTAIR FLIGHT HIJACKED — Reuters: “An Egyptair domestic flight from Alexandria to Cairo was hijacked on Tuesday and landed in Cyprus, Egyptian officials said. … The pilot of the plane was threatened by a passenger strapped with explosives, Egypt’s Civil Aviation Ministry said. The Cyprus Broadcasting Corporation reported that 55 passengers were on board and a crew of seven.

“The hijacking occurred in Cyprus’s flight information region and the airliner was diverted to Larnaca. … Israel scrambled warplanes in its airspace as a precaution in response to the plane hijacking, according to an Israeli military source.” http://reut.rs/1RH5yqC

UPDATE — News bulletins as of 3:30 a.m. EST suggested passengers on the hijacked flight were being freed.

BIG DAY FOR YELLEN — Fed Chair Janet Yellen speaks at the New York Economic Club of New York at 12:20 p.m. with markets searching for signals about the next hike in the wake of weak new data on inflation and spending and ahead of what is expected to be another strong jobs report on Friday. Will she give any fresh clues? Is the Fed one and done for the year? How can that be if the jobless rate keeps falling and wage gains increase? …

HFE’s Jim O’Sullivan: “[W]e view the rapid downtrend in the unemployment rate as evidence that monetary policy has been highly stimulative — stimulative enough to generate above-potential growth … Upward pressure on core inflation and wages is likely to intensify if the unemployment rate keeps falling.”

EUROPE RISES AS MARKETS WAIT ON YELLEN — Bloomberg: “European shares rose as most markets in the region opened for their first trading day this week. Asian stocks dropped with oil, while the dollar rebounded from its first slide in seven days amid conflicting messages over the outlook for U.S. interest rates. …

“The Stoxx Europe 600 Index snapped a four-day retreat, while equity benchmarks in Australia and Shanghai declined. A gauge of the dollar resumed gains after stumbling on Monday ahead of a speech from Federal Reserve Chair Janet Yellen and a run of U.S. economic data due this week.” http://bloom.bg/1WTLhmd

SOURCE THAT HELPED KILL BEAR STEARNS REVEALED — WSJ’s John Carney: “It has been called the bombshell that blew up Bear Stearns. It happened on Wednesday, March 12, 2008, shortly after 9 a.m. in an interview broadcast on CNBC. There, reporter David Faber asked Bear Stearns chief Alan Schwartz to respond to reports that Goldman Sachs wouldn’t ‘accept the counterparty risk of Bear Stearns.’ Mr. Schwartz said the firm’s counterparties still were trading with Bear Stearns.

“Hours later, CNBC reported that Goldman was indeed still doing trades with Bear Stearns. In the eyes of many on Wall Street, however, the damage was done. Confidence in Bear Stearns quickly evaporated — and with it the firm’s ability to survive. … A former Bear Stearns executive named Kyle Bass of Hayman Capital Management LP — a well-known hedge-fund manager — was the source for Mr. Faber, according to formerly confidential government records.” http://on.wsj.com/1WTL2r4

UNCLE SAM CRACKS THE iPHONE — POLITICO’s Josh Gerstein: “The FBI has succeeded in accessing the data on an iPhone used by a shooter in the San Bernardino, Calif. terrorist attack last year and no longer needs a court order to force Apple to help break into the device … The development scuttles — for now — what was shaping up as a momentous court fight between the U.S. government and technology companies that are increasingly turning to encryption to secure phones and computers against the prying eyes of both hackers and law enforcement.

“After going to court last month to try to force Apple to disable security features that made it hard for law enforcement to access the phone used by shooter Syed Farook, the FBI signaled about a week ago that it had been advised of an alternative method that might work to pull data from the device. … While this particular legal battle has concluded, it is unclear whether the method the FBI has discovered will moot a series of pending legal disputes over other iPhones in other parts of the country. In addition, more sophisticated encryption technology on newer phones could make those devices harder to crack” http://politi.co/1Uy7ZCX

APPLE, DEFENDED — FT’s John Thornhill: “In spite of the odium heaped upon the company, Apple has done the right thing to stress-test these issues in court. … The issue of principle concerns whether a company can be conscripted by the government into taking actions that it believes endanger its users’ rights and its commercial interests. It is one thing to hand over all accessible data upon receipt of a lawful request; it is quite another to be forced to create a backdoor into its own products.” http://on.ft.com/22VQb5H

DRIVING THE DAY — Yellen speaks at 12:20 p.m. at the Economic Club of New York … President Obama travels to Atlanta to speak at the annual National Rx Drug Abuse & Heroin Summit … Treasury Under Secretary for International Affairs Nathan Sheets will travel beginning Tuesday to Frankfurt, Germany, Brussels, Belgium, and Paris, France. On Tuesday in Frankfurt “Secretary Sheets will discuss the state of the global economy and financial system with officials at the European Central Bank and with financial sector participants. … On Wednesday, Sheets will visit Brussels and “will meet with officials from the European Union and European Commission to discuss economic developments in the United States and Europe and to express Treasury’s support for EU efforts in the fight against terrorism.” … Treasury Secretary Jack Lew on Tuesday “will participate in a roundtable discussion on gender and financial inclusion with international development advocates and stakeholders” … New America at 9:30 a.m. will host a discussion on payday lenders … Regulators from across the financial industry will meet in DC starting Tuesday for a “Financial Data Summit” hosted by the Data Coalition. … Case-Shiller home prices at 9:00 a.m. expected to rise 0.7 percent … Conference Board Consumer Confidence at 10:00 a.m. expected to rise to 94.0 from 92.2 …

GSE REFORM FIGHT KEEPS RAGING! — Still lots of MM email traffic over the Sperling/Parrott/Zandi GSE reform proposal and whether it should or should not be a plank of Hillary Clinton’s presidential campaign. People close to the campaign and the proposal itself say it’s way too in the weeds for the campaign. Many outside observers do not see it this way.

ICBA’s Cam Fine emails: “[B]y Sperling publically putting his name out there as a contributor to the Parrott/Zandi GSE reform proposal, Clinton has ‘talked’ on GSE reform. Most of the creators of this proposal will probably wind up as senior housing officials in the Clinton administration should there be one.”

And other industry observer emails: “One of Clinton’s key weaknesses that she is too beholden to Wall Street and not willing to tackle the tough issues. GSE reform is the biggest undone piece of financial reform (although politically difficult). Too in the weeds? Clinton outlined closing loopholes in the Volcker Rule, modifying leverage and liquidity requirements, and reviewing money market fund regulation (among many other esoteric issues) — but not addressing trillion dollar government-controlled enterprises?

SKIPPING SHAREHOLDERS — The Street’s Carleton English: “The latest proposal on what to do with Fannie Mae (FNMA) and Freddie Mac (FMCC) was recently released, but it omitted one key aspect of the equation: shareholders. The report on government-sponsored entity (GSE) reform was written by a team of writers who suggested merging Fannie and Freddie into a single government corporation, called the National Mortgage Reinsurance Corp. (NMRC), which would perform the same functions the two perform today.

“There also would be an explicit government guarantee on mortgage-backed securities funded by ‘guarantee fees’ charged by NMRC. Also, all ‘noncatastrophic credit risk’ would be pushed into the private market. As for what would happen to current Fannie and Freddie shareholders, the authors admit the new model so far has not figured out how to address them.” http://bit.ly/1PCAEhB

EX-BLACKSTONE EXEC CHARGED WITH THEFT — WSJ’s Christopher M. Matthews and Matt Jarzemsky: “Prosecutors charged former Blackstone Group managing principal Andrew W.W. Caspersen, most recently an executive at Park Hill Group, with stealing $25 million from investors, and scheming to defraud investors of $70 million more. In charges unsealed Monday, the Manhattan U.S. attorney’s office said Mr. Caspersen lied to customers, telling them their investments would be put into a secured loan to an investment firm, and instead converted $25 million for his own use.

“He was arrested Saturday … Mr. Caspersen allegedly solicited investments from a charitable foundation affiliated with a multinational hedge fund, promising to invest the money in the secured loan. But, according to prosecutors, Mr. Caspersen didn’t have authority to raise the funds from investors and never invested the money in the loan. Instead, he took $24.6 million from the charity, prosecutors said, along with $400,000 from an employee at the hedge fund and used it to trade on stocks in his personal brokerage account … After losing most of the money on ‘aggressive options trading,’ prosecutors said he attempted to solicit another $20 million from the charity and $50 million from another New York-based private equity firm.” http://on.wsj.com/25tddTR

WHAT’S NEXT ON PUERTO RICO? — Guggenheim’s Jaret Seiberg: “We believe the legislation that House Republicans are crafting would create a powerful control board and a means for a federal judge to force a restructuring of Puerto Rico’s debt. While not perfect for any side, this seems to us to be the type of package that could garner bipartisan support and get enacted into law as soon as this summer.

“With Congress on its three-week Easter recess, it is clear that the House will not complete work on Puerto Rican legislation by its self-imposed March 31st deadline. Despite this, there is real work on the island’s fiscal troubles occurring on both sides of the aisle. … The key authority for the control board is the territories clause of the U.S. Constitution, which gives Congress authority to make rules and regulations for U.S. territories. What is critical here is that this is the same basis for authority that Treasury recently proposed. This is why we believe there is progress toward a bipartisan solution. Both sides are at least now focused on the same page.”

CHINESE INSURER SHROUDED IN MYSTERY — WSJ’s Rick Carew and Ned Levin: “Chinese insurer Anbang Insurance Group Co., which just upped the ante in a bidding war for Starwood Hotels & Resorts Worldwide Inc., made three unsuccessful offers last year to purchase the same U.S. luxury hotel chain. Each time, Anbang and its chairman, Wu Xiaohui, were pressed by Starwood and its bankers for details on how they would pay for the deal, according to public filings by Starwood. On the third attempt on Nov. 3, Anbang withdrew its offer in the middle of a meeting with Starwood executives … after Starwood told the Chinese insurer it wouldn’t be able to proceed without financing details.

“Anbang has exploded onto the international scene in recent years by spending billions to acquire insurers and hotels throughout the world. In February 2015, it laid out nearly $2 billion to buy New York’s Waldorf Astoria … . On Monday, Starwood said Anbang had made a new, $14 billion all-cash offer for Starwood, continuing a bidding war with Marriott International Inc. that started earlier this month. For all its ambition, Anbang remains opaque to many both inside and outside of China. Its ownership, as of its most recent public filings, is a mash of corporate shareholders, with multiple layers of holding companies registered all around the country” http://on.wsj.com/1Mx2Gk0

AUTOMAKERS BET ON CHINA — NYT’s Keith Bradsher: “The new $1.3 billion Cadillac factory on the outskirts of Shanghai is a shrine to modern manufacturing, the kind of facility that automakers all over the world dream of building but can seldom afford. … The factory is part of an aggressive expansion by automakers in China, the world’s largest market for new cars and the industry’s brightest hope for the last 15 years. But the country’s economy is now cooling, which could leave carmakers with too many factories and not enough buyers.

“G.M. will open a second, $1 billion factory in Wuhan next year. G.M.’s main rival in the Chinese market, Volkswagen, plans to open large assembly plants next year alongside its existing factories in the cities of Foshan, Ningbo and Yizheng and build one in Qingdao by 2018. Hyundai plans to complete a factory south of Beijing by October and another in Chongqing next year, while Chinese automakers like Great Wall and Changan are aggressively adding capacity. … Automakers are expanding at a time when China’s economic growth has slowed to its lowest level in more than a quarter-century. China is closing coal mines across the country and plans to shutter steel mill” http://nyti.ms/1Si9Fdg

ALSO FOR YOUR RADAR

JPM LAUNCHES NEW INDEX — The JPMorgan Chase Institute on Tuesday is launching “a Local Consumer Commerce Index (LCCI), which will be refreshed regularly throughout the year and offers a measure of the economic health and vibrancy of U.S. consumers, local businesses and the cities in which they reside by analyzing debit and credit card spending New December 2015 data show year-over-year consumer spending growth of 2.3 percent. Year-over-year growth in local consumer commerce exceeded two percent in three of the most recent six months observed by the series (July, October and December). All 15 cities that comprise the Index experienced positive consumer spending growth in December, the first month since January 2015 with across-the-board growth” http://bit.ly/1Mx64LM

FISCAL CONFIDENCE AT 51 — Per release: “The Peter G. Peterson Foundation’s March Fiscal Confidence Index, a monthly measure of public attitudes about the nation’s long-term debt and the efforts elected leaders are making to address America’s fiscal challenges, shows that a significant majority of Americans remain concerned about the nation’s fiscal future and want more action from Washington. The Fiscal Confidence Index, modeled after the Consumer Confidence Index, is 51 (100 is neutral) http://bit.ly/16YRV2a

FUNDS GROUPS WEIGH IN ON DERIVATIVES RULE — Per release: The Managed Funds Association and the Alternative Investment Management Association “submitted a joint comment letter to the U.S. Securities and Exchange Commission on the Commission’s proposed rule on the use of derivatives by mutual funds and other registered investment companies.

“While generally supporting several aspects of the SEC’s proposal, including asset segregation requirements and an activities-based approach to regulation, the Associations have concerns with the adverse effects of the rule’s imposition of a new notional-based leverage limit on registered funds.” Letter: http://bit.ly/1Tf6pnM

NEW SMALL BUSINESS LOAN GROUP FORMED — Per release going out this a.m: “The nation’s foremost small-business groups have partnered with leading online small-business lending and finance companies to create the Coalition for Responsible Business Finance (CRBF), a new advocacy organization dedicated to bolstering the credibility, reliability and security of the growing non-traditional small-business lending industry.” http://bit.ly/1qceoqq

POTUS Events

10:00 am || Receives the Presidential Daily Briefing
11:25 am || Deaparts White House
1:40 pm || Arrives Atlanta, Georgia
2:30 pm || Speaks at the National Rx Drug Abuse & Heroin Summit; AmericasMart, Atlanta
4:15 pm || Departs Atlanta
5:45 pm || Arrives Joint Base Andrews

All times Eastern

Floor Action

None.