Securities Attorney Briefing 19 October 2016

Securities Attorney Tom Krebs

International

U.S. expects Islamic State to wield chemical weapons in Mosul fight

The United States expects Islamic State to use crude chemical weapons as it tries to repel an Iraqi-led offensive on the city of Mosul, U.S. officials say, although adding that the group’s technical ability to develop such weapons is highly limited. U.S. forces have begun to regularly collect shell fragments to test for possible chemical agents, given Islamic State’s use of mustard agent in the months before Monday’s launch of the Mosul offensive, one official said. In a previously undisclosed incident, U.S. forces confirmed the presence of a sulfur mustard agent on Islamic State munition fragments on Oct. 5, a second official said. The Islamic State had targeted local forces, not U.S. or coalition troops. “Given ISIL’s reprehensible behavior and flagrant disregard for international standards and norms, this event is not surprising,” the second official told Reuters, speaking on condition of anonymity, and using an acronym for Islamic State. U.S. officials do not believe Islamic State has been successful so far at developing chemical weapons with particularly lethal effects, meaning that conventional weapons are still the most dangerous threat for advancing Iraqi and Kurdish forces – and any foreign advisers who get close enough. Sulfur mustard agents can cause blistering on exposed skin and lungs. At low doses, however, that would not be deadly. Roughly 5,000 U.S. forces are in Iraq. More than 100 of them are embedded with Iraqi and Kurdish Peshmerga forces involved with the Mosul offensive, advising commanders and helping them ensure coalition air power hits the right targets, officials said. Still, those forces are not at the front lines, they added.

http://www.reuters.com/article/us-mideast-crisis-iraq-chemicalweapons-idUSKCN12I2WZ

Ecuador Cuts Internet of Julian Assange, WikiLeaks’ Founder

LONDON — Ecuador said Tuesday that it had cut off Julian Assange’s access to the internet in his exile in the country’s London embassy, making clear that it feared being sucked into an effort to “interfere in electoral processes” in the United States by the activities of theWikiLeaks founder. Ecuador said that it was not evicting Mr. Assange from its embassy, where he sought asylum four years ago. It said that its “temporary restriction” of internet services to Mr. Assange “does not prevent theWikiLeaks organization from carrying out its journalistic activities.” But it was clearly intended to keep the embassy from being the control center for that leaking operation. “The government of Ecuador respects the principle of nonintervention in the affairs of other countries,” it said in a statement, “and it does not interfere in the electoral processes in support of any candidate in particular.” The internet cutoff was the latest twist in the odd tale of Mr. Assange’s self-imposed exile, which began in 2012 when he sought refuge from a Swedish rape investigation that he said was a cover for an American effort to extradite him. Since then, his world has shrunk to a single apartment inside the small diplomatic compound in central London. He has communicated through the embassy’s internet connections, visitors and, presumably, cellphones that would give him another form of internet access. Ecuador’s decision was the first sign that the government in Quito was beginning to wonder if its guest in London was overstaying his welcome. It doubtless was considering the possibility that, should Hillary Clinton prevail in the United States election next month, it would have to explain its role as host to the man who, by remote control, appears to have coordinated the publication of emails purloined from people close to Mrs. Clinton, along with those of the Democratic National Committee and other organizations. The announcement came a day after WikiLeaks said that Mr. Assange’s connection to the internet had been severed shortly after the organization published speeches that Hillary Clinton gave to Goldman Sachs, the global investment firm. The transcripts, the latest in a series of disclosures, appear to have come from the hacked email account of John D. Podesta, the chairman of her campaign and a White House chief of staff when Mrs. Clinton’s husband was president. The statement clearly sought to separate Ecuador from the decision by WikiLeaks to publish Mr. Podesta’s emails and, before that, those hacked from the national committee and elsewhere. In recent weeks, Mr. Assange, once the hero of the American left for exposing classified State Department and Pentagon documents, has been hailed by Donald J. Trump and his advisers for disclosures from Mrs. Clinton’s campaign, which Mr. Trump has used almost daily to fuel his attacks on her.

http://www.nytimes.com/2016/10/19/world/europe/julian-assange-embassy.html?emc=edit_th_20161019&nl=todaysheadlines&nlid=53476364&_r=0

Saudi Arabia Executes a Prince Convicted in a Fatal Shooting

BEIRUT, Lebanon — Saudi Arabia on Tuesday executed a member of the royal family for murder, the first time in four decades it had done so, after he was convicted of shooting another man to death during a brawl. Prince Turki bin Saud bin Turki bin Saud al-Kabeer was put to death in the capital, Riyadh, according to a report by the Saudi state news service. While the report did not detail the method used, most death penalties in Saudi Arabia are carried out by beheading in a public square. The rare event rocketed around the kingdom’s social media networks, with some Saudis saying they never imagined such a thing would happen and others arguing that it showed the quality of their justice system, which follows a strict interpretation of Shariah law and is often criticized by human rights groups and Western governments for what they consider harsh and arbitrary punishments. “The greatest thing is that the citizen sees the law applied to everyone, and that there are not big people and other small people,” Abdul-Rahman al-Lahim, a prominent Saudi lawyer, wrote on Twitter. Other Saudis lauded the monarch, King Salman, on Twitter under an Arabic hashtag that translated as, “Decisive Salman orders retribution for the prince.” Saudi Arabia is one of the world’s few remaining absolute monarchies. The thousands of members of the royal family enjoy perks not available to the rest of the country’s 20 million citizens. Tuesday’s execution was the first time that a member of the royal family had been put to death for murder by the state since 1975, when Prince Faisal bin Musaid was beheaded in Riyadh for assassinating King Faisal. A New York Times article about that event said that some 10,000 people “watched silently as the executioner swung a sword with a golden hilt, but then thousands broke into chants of ‘God is great!’ and ‘Justice is done!’” A couple of years later, a princess and her husband were accused of adultery and executed after the princess refused to marry a man selected by the family. The princess, Mishael, was shot as her husband, Khalid Muhallal, watched. He was then beheaded, according to a New York Times obituary of her grandfather, Prince Mohammed Ibn Abdel-Aziz. It was unclear how many people watched the execution of Prince Turki on Tuesday or what their immediate reaction was. The state news media report did not release his age or provide any other biographical information. Another member of the royal family, Prince Faisal bin Farhan al-Saud, said by telephone from Riyadh that Prince Turki was from one of the most prominent branches of the royal family after that of the direct descendants of King Abdulaziz, who founded the modern Saudi state in 1932. That genealogy earned Prince Turki no extra credit with the courts or with the king, Prince Faisal said. “The king has always said that there is no difference in the law between princes and others, and I think that this is clear manifestation of the reality of that fact,” he said. According to Saudi reports, Prince Turki shot a man during “a group fight” that occurred a few years ago. Adam Coogle, a researcher at Human Rights Watch who tracks Saudi Arabia, said the execution of the prince did not affect his organization’s criticisms of the country. Saudi Arabia has executed 134 people so far this year, according to a count by the group, which opposes the death penalty in all cases.

http://www.nytimes.com/2016/10/19/world/middleeast/saudi-arabia-prince-executed-salman.html?emc=edit_th_20161019&nl=todaysheadlines&nlid=53476364

How Europe Left Itself Open to Terrorism

In June of 2015, a Belgian ex-convict named Mohamed Abrini flew to Turkey, slipped across the border into Syria and reached the Islamic State’s capital in Raqqah, where he met up with a boyhood friend planning a devastating terror strike on Paris. A look at how the region is grappling with terrorism attacks — and how revolving-door prisons could be compounding the threat .See our reporting. Nicknamed “Brioche” because he had worked in a bakery, Abrini was not a hardcore holy warrior like his brother, who had died in Syria fighting for ISIS the year before. But his jihadi friend, Abdelhamid Abaaoud, won him over. Abaaoud took Abrini to his brother’s grave and said France was to blame for his death, according to European counterterror officials. The French were in the coalition bombing ISIS, Abaaoud said. They had to pay. “Abaaoud really worked Abrini psychologically,” a Belgian counterterror official said. “His main motivation for participating in all this was revenge. Not Islam. He doesn’t know Islam. He’s a criminal … a street punk.” Abrini proved an able operative. He moved confidently across borders, returning from Syria via Britain to pick up cash for the plot, according to Belgian counterterror officials. Back in Brussels, he fended off police who questioned him about a tip that he had been in Syria. Then he set to work leading a group of young extremists who were preparing the logistics for a multi-pronged attack on Paris, officials say. Intelligence about impending attacks prompted Belgian federal police to begin surveillance on Abrini in October. On November 11, a hidden police camera filmed him leaving his home to drive with the attack team to Paris, according to counterterror officials. But the investigators were not following him, so they did not realize he was working on a plot, or alert French officials to his movements. Two days later, attackers killed 130 people in coordinated assaults on the Bataclan concert hall, restaurants and a soccer stadium. Nine of the attackers died, but Abrini and other suspected accomplices took refuge in Brussels, where they eluded capture for another four months. Abrini became notorious in March when Belgian authorities released a grainy security camera image of three men wheeling bomb-laden suitcases into the Brussels airport. Two died in suicide blasts, but police say Abrini lost his nerve at the last moment, fleeing as the bombs went off. A total of 32 people died at the airport and a subway station. And the world came to know Abrini as The Man in the Hat.

https://www.propublica.org/article/how-europe-left-itself-open-to-terrorism?utm_source=pardot&utm_medium=email&utm_campaign=dailynewsletter

Saudi Arabia Poised to Sell Record $17.5 Billion of Bonds

Saudi Arabia is planning to raise as much as $17.5 billion in the biggest bond sale ever from an emerging-market nation, according to two people with knowledge of the offering, as it seeks to shore up finances battered by the slide in oil. The government aims to sell dollar-denominated bonds due in five years yielding about 140 basis points more than similar-maturity U.S. Treasuries, 10-year notes at a spread of about 170 basis points and 30-year securities at 215 basis points, the people said, asking not to be identified because the information is private. The proposed pricing is at least 40 basis points higher than Qatar’s similar-maturity bonds. The sale would eclipse Argentina’s $16.5 billion offering in April as the largest from a developing nation, underlining the deepening strain on a country that has eschewed international debt markets until now. The country clocked up a budget shortfall of $97 billion last year, equal to 15 percent of its gross domestic product, prompting the government this year to cut subsidies, wages and spending. “Boom, they went full-scale,” said Angelo Rossetto, a trader at GMSA Investments Ltd. in London who is bidding for the bonds. They “probably want to take advantage of the window before elections and a possible rate increase. Print a lot now and then see what unfolds,” he said. More:

http://www.bloomberg.com/news/articles/2016-10-19/saudi-arabia-poised-to-sell-record-17-5-billion-sovereign-bonds

Everything you ever wanted to know about the U.S. foreign assistance budget

 Last month, the Obama administration announced an eye-popping $38 billion security assistance deal with the Israelis, to be disbursed over ten years starting in 2019. That caught us off-guard. It seemed like a ton of money. But as we looked into the deal, and others like it, we began to realize how little we knew about the U.S. government’s assistance budget, which ranges from programs combating HIV/AIDS to those directly funding other nations’ armed forces. Using the State Department’s request to Congress for a 2017 budget, we compiled what we thought was a comprehensive look at the U.S. foreign assistance budget. That budget request is a complex stew of programmatic acronyms, thickened by confounding numerical overlaps and an endless roster of government agencies. You can see that first attempt here.  In response, numerous representatives of those same agencies, as well as academics and analysts, got in touch. “You guys are on the right track,” they said, “but there’s much more to this than you’ve got here.” We hope what follows can stand as a more exhaustive explanation.

https://www.washingtonpost.com/graphics/world/which-countries-get-the-most-foreign-aid/?hpid=hp_no-name_graphic-story-a%3Ahomepage%2Fstory

National

Goldman Sachs Joins the Trading Party

Goldman Sachs offered more confirmation on Tuesday that the sun was once again shining on Wall Street’s fixed-income trading desks. Revenue from executing client orders in FICC — fixed income, commodities and currencies — jumped 49 percent to $1.96 billion in the third quarter, excluding accounting adjustments in the same period a year earlier. That led a surge among the four large banks with big trading desks that have reported results so far. The year-over-year gains are a bit misleading on their face, considering the third quarter of 2015 was an ugly period for trading desks after China’s unexpected devaluation of its currency ushered in a volatile stretch in markets that many clients may have chosen to sit out. And in the latest quarter, clients of all banks may have been either forced into action to some degree, or at least found plenty of one-time reasons to trade: the Brexit vote took place just before the quarter began, and looming regulatory changes in the $2.6 trillion money-market industry caused a reshuffling of money between funds as well as a large move higher in Libor rates. More:

https://www.bloomberg.com/gadfly/articles/2016-10-18/goldman-sachs-earnings-a-trading-party-in-search-of-full-swing

Ernst & Young to Pay $11.8 Million for Audit Failures

Washington D.C., Oct. 18, 2016 —  The Securities and Exchange Commission today announced that Ernst & Young LLP has agreed to pay more than $11.8 million to settle charges related to failed audits of an oil services company that used deceptive income tax accounting to inflate earnings. Ernst & Young’s payment will be combined with the $140 million penalty agreed to last month by the audit client, Weatherford International, and money collected from two charged Weatherford employees for a total of more than $152 million that will be returned to investors who were harmed by the accounting fraud.

Also charged in the SEC’s order are the Ernst & Young partner who coordinated the audits, Craig Fronckiewicz, and a former tax partner who was part of the audit engagement team, Sarah Adams.  Both agreed to suspensions to settle charges that they disregarded significant red flags during the audits and reviews. The SEC’s order finds that despite placing the Weatherford audits in a high-risk category, Ernst & Young’s audit team repeatedly failed to detect the company’s fraud until it was more than four years ongoing.  The audit team was aware of post-closing adjustments that Weatherford was making to significantly lower its year-end provision for income taxes each year, but it relied on Weatherford’s unsubstantiated explanations instead of performing the required audit procedures to scrutinize the company’s accounting.  The SEC’s order also finds that Ernst & Young did not take effective measures to minimize known recurring problems its audit teams experienced when auditing tax accounting.

“Audit and national office professionals must appropriately address known deficiencies in their auditing of high-risk areas, and auditors must have the fortitude to refuse to sign off on an audit if important issues remain unresolved,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “Ernst & Young failed to ensure that material post-closing accounting adjustments were justified by appropriate audit evidence, leading to a significant audit failure.” Ernst & Young, Fronckiewicz, and Adams consented to the SEC’s order without admitting or denying the findings that they engaged in improper professional conduct during the audits and quarterly reviews and caused Weatherford’s reporting violations.  Ernst & Young agreed to pay disgorgement of $9 million, prejudgment interest of more than $1.8 million, and a penalty of $1 million.  Fronckiewicz and Adams agreed to be suspended from appearing or practicing before the SEC as accountants, which includes not participating in the financial reporting or audits of public companies.  The SEC’s order permits Fronckiewicz to apply for reinstatement after two years and Adams to apply for reinstatement after one year. The SEC’s investigation was conducted by Jim Valentino, Ilana Sultan, and Natalie Lentz with assistance from Kevin Lombardi.  The case was supervised by Kara Brockmeyer and Tracy L. Price.

http://www.sec.gov/news/pressrelease/2016-219.html

Credit-Card Rewards War Crimps Bank Profits as Eyes Turn to AmEx

A rewards war that’s helped U.S. credit-card customers amass points for perks or cash proved costly in the latest quarter for some of the nation’s biggest banks. That may signal fresh pain at American Express Co. Issuers have sweetened rewards, cut fees and sought to improve services to lure customers, making it tougher to grow profits. In the past week, three of the biggest lenders — Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. — said combined income from card operations dropped 15 percent to $3.1 billion in the third quarter from a year earlier. At the same time, expenses in their consumer-bank units rose 1 percent to $15.3 billion. AmEx, the largest U.S. credit-card issuer by purchases, is set to report third-quarter results after the close of New York trading Wednesday. Analysts estimate earnings per share fell 23 percent as revenue slipped to $7.7 billion from $8.2 billion a year earlier and expenses climbed. The lender is also grappling with the loss of its largest co-brand partner, Costco Wholesale Corp., which once accounted for 20 percent of its worldwide loans and 8 percent of customer spending. Credit-card results at major banks were probably “a negative for AmEx,” Moshe Orenbuch, an analyst at Credit Suisse Group AG, wrote in a note to clients. JPMorgan and Citigroup probably gained some market share, he said. And a popular new JPMorgan card likely helped partner Visa Inc., he said.

Marina Norville, a spokeswoman for AmEx, declined to comment. Bank of America said Monday that it issued 1.3 million new consumer credit cards during the third quarter, the most since 2008. The lender has stood by its rewards program because it helps drive deposit growth. At Citigroup, reward-hungry customers helped propel growth for some of its new cards. More:

http://www.bloomberg.com/news/articles/2016-10-19/credit-card-rewards-war-crimps-bank-profits-as-eyes-turn-to-amex

Yes, Ford Is Building Plants in Mexico. No, It’s Not Cutting U.S. Jobs.

DETROIT — In the summer of 2008, with the Great Recession underway and Detroit’s auto industry in a free fall, Ford Motor took a big gamble: It would switch three of its North American assembly plants from building trucks and sport utility vehicles to making small passenger cars. With gasoline prices rising above $4 a gallon at the time and truck sales plummeting, Ford was losing billions and — along with General Motors and Chrysler — teetering on the verge of bankruptcy. The centerpiece of Ford’s transition was its plant in Wayne, Mich. There, the company would replace production of big S.U.V.s with that of compact cars, on the assumption that consumer demand had shifted permanently toward smaller vehicles.

“We don’t have a sustainable company if we don’t do this,” Alan R. Mulally, then Ford’s chief executive, said at the time. ut eight years later, Ford, the nation’s second-largest automaker after G.M., is once again reversing course in Wayne. In a move that has drawn fire from Donald J. Trump and other critics of the North American Free Trade Agreement, Ford is giving up on making small cars in the United States and plans to move production of its Focus compact cars from the Wayne factory to a new plant under construction in Mexico. Mr. Trump and others have criticized Ford for creating jobs in Mexico rather than in the United States. Seldom mentioned by Ford’s critics, though, is an essential fact. The Wayne factory will remain fully staffed, with 3,700 workers, to build what Ford really needs now: more trucks and S.U.V.s. There is no doubt that Nafta has played a role in the migration of many American manufacturing jobs to Mexico in the last 22 years. Before the trade agreement, United States automakers barely had a presence in Mexico. Now, Mexico’s car-making work force is about 675,000 strong, according to the Mexican auto industry’s trade association. But the story of Ford’s Wayne plant makes clear that many factors determine the number of auto-making jobs in the United States — a figure that according to federal labor statistics has actually grown by 200,000 jobs, to around 900,000, since the recession gave way to economic recovery in 2009. The reasons include the state of the economy, the profitability of the vehicles being produced, the strength of the dollar, and how well or not each carmaker’s products are faring in the marketplace. More:

http://www.nytimes.com/2016/10/19/business/yes-ford-is-building-plants-in-mexico-no-its-not-cutting-us-jobs.html?emc=edit_th_20161019&nl=todaysheadlines&nlid=53476364

 

Wells Fargo Faces Angry Questions About Profiling Latinos

Matthew Castro says he’s sorry about what he did at Wells Fargo & Co., and even sorrier about the people he did it to: Latinos not so different from himself. Castro, 41, says he is one of the thousands of people Wells Fargo has fired for secretly opening accounts without customers’ consent. But for Castro, the scandal that has toppled the bank’s longtime leader, John Stumpf, cuts especially deep. He says he and colleagues seized every opportunity to open sham accounts for Latinos, many of them recent immigrants. “There would be times the client would sit down and leave without even knowing they had these new accounts,” says Castro, whose father came to the U.S. from Colombia. He says he tried to lessen his guilt by doing volunteer work. As Wells Fargo’s new chief executive officer, Tim Sloan, tries to contain the scandal, Los Angeles authorities, former employees and community activists are raising an uncomfortable question: Did bank employees single out Latinos, particularly those without Social Security numbers or a strong command of English, as they opened legions of unauthorized accounts? A spokeswoman for Wells Fargo, Richele Messick, denied the bank targeted anyone. And given the bank is a major player in the West and Southwest, where many Latinos live, the issue may boil down to geography. More:

http://www.bloomberg.com/news/articles/2016-10-19/for-wells-fargo-angry-questions-about-profiling-latinos

Half of American Adults Are in Police Facial-Recognition Databases

If you’re reading this in the United States, there’s a 50 percent chance that a photo of your face is in at least one database used in police facial-recognition systems. Police departments in nearly half of U.S. states can use facial-recognition software to compare surveillance images with databases of ID photos or mugshots. Some departments only use facial-recognition to confirm the identity of a suspect who’s been detained; others continuously analyze footage from surveillance cameras to determine exactly who is walking by at any particular moment. Altogether, more than 117 million American adults are subject to face-scanning systems. These findings were published Tuesday in a report from Georgetown Law’s Center for Privacy and Technology. It details the results of a year-long investigation that drew upon more than 15,000 pages of records obtained through more than 100 freedom-of-information requests. The study’s authors—Clare Garvie, Alvaro Bedoya, and Jonathan Frankle—attempted to fill in large gaps in public knowledge about how facial-recognition technology is used, and the existence of policies that constrain how police departments can use it. Some details about the FBI’s use of facial scanning were previously known, but the scale of local and state law-enforcement involvement is only now starting to come to light. Facial recognition is fundamentally different from other types of searches, the authors contend—and not just because it makes it easy for police to track people by their physical features, rather than by keeping an eye on their possessions and technology, like a smartphone, a house, or a car.

For one, it allows officers to track large groups of people who aren’t necessarily suspected of committing a crime. Courts haven’t determined whether facial recognition constitutes a “search,” which would limit its use under the Fourth Amendment, so many departments use it on the public indiscriminately. (This is true also for technologies that track a smartphone’s location, for example.)

https://www.theatlantic.com/technology/archive/2016/10/half-of-american-adults-are-in-police-facial-recognition-databases/504560/

Obama Tells Trump: Stop ‘Whining’ and Trying to Discredit the Election

WASHINGTON — President Obama said Tuesday that Donald J. Trump should “stop whining and go try to make his case to get votes.” Speaking at a Rose Garden news conference with Matteo Renzi, the Italian prime minister, Mr. Obama also called it “unprecedented” for any presidential candidate to “discredit the elections” before any votes were even cast, as Mr. Trump has done repeatedly in recent days. “One of the great things about America’s democracy is we have a vigorous, sometimes bitter political contest, and when it’s done, historically, regardless of party, the person who loses the election congratulates the winner, reaffirms our democracy and we move forward,” Mr. Obama said. Speaking of the tradition of a peaceful transfer of power after presidential elections, Mr. Obama said, “That’s how democracy survives.” “I have never seen in my lifetime or in modern political history, any presidential candidate trying to discredit the elections and the election process before votes have even taken place,” Mr. Obama said. “It’s unprecedented. It happens to be based on no facts.”

http://www.nytimes.com/2016/10/19/us/politics/obama-donald-trump-election.html?emc=edit_na_20161018&nlid=53476364&ref=cta&_r=0

Glenn Beck Is Taking on Trump – But at What Cost?

The way right-wing-media personality Glenn Beck sees it, no matter who wins the election, Donald or Hillary, he’s done for, gone, kaput, along with all that he has built since leaving Fox News in 2011 – his websites (TheBlaze and Glennbeck.com), his radio show (The Glenn Beck Radio Program), his live-streamed online network, his status as a bestselling author in four genres (latest nonfiction hit – Liars: How Progressives Exploit Our Fears for Power and Control). Last year, Forbes put his corporate revenue at around $90 million. After November 8th, that, too, would presumably take a giant hit, maybe force him to sell his beloved $200,000 Mercedes-Maybach or his private jet or perhaps the stuffed life-size polar bear that overlooks his office for no discernible reason. In fact, his many enemies in both conservative- and liberal-media camps are already front-running the end, churning out copy with headlines like “Glenn Beck Empire Is Officially Collapsing” and “Glenn Beck’s Blaze Empire Continues Its Decline,” the stories buttressed with tales of mass layoffs at his various businesses, rapidly declining Web traffic, plummeting ad sales, outside offices being shuttered and side ventures needing to be scuttled. And a good bit of this presumably because of his failure to fall in line and support Donald Trump – the way so many of his right-wing brothers have. More:

http://www.rollingstone.com/politics/features/glenn-beck-is-taking-on-trump-but-at-what-cost-w445358

Hustler’s Larry Flynt puts $1M bounty on ‘scandalous’ Trump tapes

Prominent pornographer Larry Flynt is outraged by Republican nominee Donald Trump’s alleged treatment of women. In fact, the Hustler magazine publisher is so disgusted that he is putting up a $1 million reward for any “scandalous” recordings of Trump. The reward will be paid for “verifiable video footage or audio recordings for use prior to the November 8 election clearly showing Donald Trump engaging in illegal activity or acting in a sexually demeaning or derogatory manner,” according to a statement from the magazine. The full statement can be seen at thedonaldtapes.com, a website created to “streamline the submission process,” according to Hustler spokeswoman Minda Gowen. Flynt, 73, appears to have been motivated by Trump’s comments about groping women on a 2005 recording and the recent allegations of sexual misconduct by Trump that have surfaced. “I have always celebrated women,” Flynt said in a statement. “Women in all shapes and sizes. To treat a woman like Mr. Trump himself has is both disappointing and unbelievable, especially coming from someone who wants to be our President.” Flynt is also “appalled at the hypocrisy of our elected officials,” according to the statement. In particular, he sees hypocrisy in Trump’s claims that “‘nobody has more respect for women than me”‘ despite tremendous amounts of evidence to the contrary.” Flynt has openly opposed Trump for president. He has endorsed Hillary Clinton, created a Trump porn parody and said he may move to Canada if Trump wins. As the publisher of a hardcore pornographic magazine, Flynt has long faced criticism for his own treatment of women. Many consider the depictions of women in his publications as sexist and misogynistic. Flynt posted similar bounties for evidence of political figures’ indiscretions in the past, including in 1998 during Bill Clinton’s impeachment.

http://www.usatoday.com/story/news/politics/onpolitics/2016/10/18/larry-flynt-trump-reward/92379706/

Five things to watch in tonight’s last debate

LAS VEGAS – Donald Trump is down to his third and final toss of the debate-night dice. It’s fitting, in this craps 2016 campaign, that a semi-successful casino magnate turned semi-successful presidential candidate would get his last big chance in a city that fleeces suckers by the thousands– while occasionally making kings out of underdogs in ill-fitting suits and overlong ties. For all his recent struggles, Trump has been, in the words of a longtime adviser, “an uncommonly lucky man,” fortunate to catch the populist wave of his restive party, aligned ever so perfectly with the infotainment appetites of fun-starved basic cable, and luckiest of all in drawing Hillary Clinton, a flawed opponent nearly if not quite as unpopular as he is. So maybe he’s got one more surprise in him. Yet here Trump stands (sitting, actually at tonight’s debate on UNLV’s campus), so far down in the calculations of most oddsmakers that even his own people seem at a loss to describe what victory might look like. And that’s the problem: He’s run such a disorganized, nasty and politically undisciplined campaign, it’s hard to even see what a win looks like, or worse, whether it would really do any good. Every presidential debate is, by definition, do or die. This one might be do and die. Here are five things to watch if you can stomach watching another one of these things. More:
http://www.politico.com/story/2016/10/what-to-watch-for-in-the-last-2016-debate-229970#ixzz4NXAWmWTW

State/Local

Roy Moore refuses to remove items from his office at request of acting chief justice

Suspended Alabama Chief Justice Roy Moore says he did not respond to the acting chief justice’s request to clean out his office on or before Tuesday. Acting Chief Justice Lyn Stuart sent a letter to Moore last week asking him to clean out his personal items and turn over his keys to the state judicial building in the wake of his recent conviction by the Court of the Judiciary on judicial ethics charges. Moore is appealing the decision of the COJ, which suspended him without pay for the remainder of his term.

But Moore said in an interview with AL.com on Tuesday that he had not and would not respond to Stuart. He said that Stuart exceeded her authority in making that request. “It’s not her authority to execute the judgement of the COJ,” he said. Moore said that Stuart should recuse herself from all matters in the case. The COJ suspended Moore for an administrative order he issued to probate judges. The COJ found that the order was telling the probate judges to defy the U.S. Supreme Court and refuse to issue marriage licenses to same-sex couples. Moore also had issued a statement through his lawyer late Monday saying that Stuart and three other Alabama Supreme Court Justices should recuse themselves from hearing his appeal. Other special justices would be appointed to hear the case if that were to happen. “My appeal is still pending but Justice Stuart is acting like she has already decided the appeal against me,” Moore stated. “I have asked Justices Stuart, Bolin, Main and Shaw to be recused from hearing my case.”

“Justice Stuart’s action against me personally and the subsequent firing of the staff attorneys I hired is troublesome and such actions prejudge the case,” Moore stated. “Instead of acting as though my appeal has already been decided, I call upon these justices to recuse.” Also, none of the justices should have any role in appointing successor justices to hear his appeal, Moore stated. Moore’s attorney, Mat Staver with the legal group Liberty Counsel, last Friday night filed a motion with the Alabama Supreme Court seeking an order countermanding the letter Stuart sent. “Compelling the Chief Justice to remove his property pending appeal is a mean-spirited and oppressive action that serves no purpose except to gratuitously humiliate the Chief Justice,” the motion states. More:

http://www.al.com/news/birmingham/index.ssf/2016/10/roy_moore_refuses_to_remove_it.html#incart_2box

Some Alabama probate judges still refuse to issue marriage licenses 16 months after gay marriage ruling

Probate judges in at least eight Alabama counties continued to refuse to issue any marriage licenses as of Tuesday, nearly 16 months after the U.S. Supreme Court found that same-sex marriage is a constitutional right. More than a dozen Alabama probate judges stopped issuing marriage licenses to both gay and straight couples at various points after a federal judge struck down Alabama’s gay marriage ban on Jan. 23, 2015, and in the wake of the June 26, 2015, Supreme Court ruling. On Tuesday, AL.com spoke with representatives of 14 of 15 county probate courts that gay marriage advocates identified as having indicated in recent months that they would not grant marriage licenses. Calls seeking comment from Geneva County Probate Judge Greg Hamic’s office were not immediately returned. Six of the judges said Tuesday that they are now issuing the licenses, but employees of Autauga, Choctaw, Clarke, Cleburne, Covington, Elmore, Pike and Washington counties confirmed that their probate judges are not currently granting any marriage licenses. “We do not issue marriage licenses because our judge chose not to. It’s our judge’s choice,” Debbie Owens, chief clerk of Washington County, said of the county’s probate judge, Nick Williams, declining to elaborate. Randall C. Marshall, legal director of the American Civil Liberties Union (ACLU) of Alabama, said he believes the reason why the judges are refusing to grant marriage licenses is clear. “There is no doubt that the counties that are not issuing licenses to anybody have taken that approach because of the same sex-marriage decision,” he said Tuesday.

http://www.al.com/news/birmingham/index.ssf/2016/10/at_least_8_alabama_counties_st.html#incart_river_home

25 Alabama counties will test iPad-based voter list in November

Voters at selected polling places in 25 Alabama counties will check in via an iPad-based system this November. The system is part of a pilot program backed by Alabama Secretary of state John Merrill, in which an electronic system replaces the paper printouts of voter rolls that poll workers use to check off qualified voters as they prepare to cast their ballots. It applies only to that part of the process, not the creation of the voter rolls or the actual voting. Voters still will cast their votes on the same machines they’ve been using. The program is being tested in counties where both the county commission and the probate judge approved its use.  According to Merrill’s office, they are Mobile, Baldwin, Henry, Barbour, Bullock, Autauga, Limestone, Madison, Jackson, Dekalb, Cherokee, Morgan, Blount, Jefferson, Chambers, Marengo, Hale, Lowndes, Shelby, Cleburne, Randolph, Houston, Cullman, Marion, and Winston. John Bennett, deputy chief of staff for Merrill, said that each participating county will have enough of KNOWiNK’s Poll Pad setups to deploy them at a few polling places, meaning that even in those counties most voters may not see them. But for those who do use the affected polling places, things will work a little differently. Instead of going to a specific line based on the first letter of his or her last name, a voter will simply go to whichever line is shortest. If the voter presents a driver license, the system will be able to scan it; if they’re using a different form of approved ID, the poll worker will look up the voter by name. (According to state law, acceptable forms of ID include state-issued nondriver ID cards; Alabama voter ID cards; government-issued photo ID cards; student or employee photo ID cards issued by a public or private college, university or postgraduate technical or professional school within the state; military ID cards; and tribal ID cards.) More:

http://www.al.com/news/index.ssf/2016/10/25_alabama_counties_will_test.html#incart_river_index

Birmingham spending $1.35 million on Magic City Classic. Here’s where the money goes

Birmingham is spending $1.35 million on the 75th Magic City Classic this year, according to information released today by the mayor’s office. The Magic City Classic is the largest city-sponsored event and has an economic impact of $18 million on the Birmingham area, according to the Greater Birmingham Convention and Visitors Bureau. The 2015 event had 50,000 attendees. The 75th Magic City Classic is set for Saturday, Oct. 29 at Legion Field. Kickoff of the game between Alabama A&M and Alabama State University is set for 3 p.m. A number of events are held throughout the weekend. The Birmingham City Council approved on Oct. 11 spending $650,000 on the Magic City Classic, but according to the mayor’s office, all of the expenditures for the event have been approved by the council. Last week, several councilors requested information from the mayor’s office on what those funds were being spent on.

“We just need to know the whole enchilada,” Councilor Valerie Abbott said last week. “What money are the taxpayers spending? Because it is not our money. We fritter it away like it is, but it is not. Out of the $1.35 million approved by the City Council, $749,500 will go towards the universities playing in the game, entertainment, security and shuttle service. A breakdown of those expenses is below. Another $600,715 will be spent on personnel, including police officer over time, public works employees and Legion Field staff. The following is a breakdown of the $749,500 in expenses:

http://www.al.com/news/birmingham/index.ssf/2016/10/birmingham_spending_135_millio.html#incart_river_home

Eight Alabama Cities Receive Failing Grades on LGBTQ Equality

MONTGOMERY—All of the cities in Alabama scored by the Human Rights Campaign Foundation on LGBTQ equality received a failing grade in this year’s Municipal Equality Index. The eight cities scored an average of eight out of 100 points. The index, which was released Monday, scores the inclusivity of municipal laws, policies, services and employment. Eight Alabama cities, Montgomery, Birmingham, Huntsville, Mobile, Tuscaloosa, Auburn, Hoover and Florence, were scored. Birmingham, Hoover and Florence received the highest score in the State: a 12 out of 100. Auburn received the lowest score, measuring in at a whopping zero out of 100. The Loveliest Village on the Plains was one of only eight cities across the US that received no points for LGBTQ inclusivity and equality among more than 500 cities scored in the index. Cities are scored in the index based on their nondiscrimination laws, the employment attitude of the municipality, services provided by the city, law enforcement and the position of the city’s leadership toward LGBTQ equality. Montgomery, which scored a nine out of 100 on the index, received points for the city’s employment nondiscrimination clause and explicit anti-bullying policies.

Birmingham, which received a 12, took six points for anti-bullying policies, three for pro-LGBTQ equality stances among city leaders and three for pro-equality legislative and policy efforts. The Magic City was also awarded bonus points for providing HIV/AIDs services. Cities are leading the way when it comes to LGBTQ equality in the absence of action from state leaders, the HRC said, with cities receiving an average score of 55 out of 100. “More than 24 million people live in cities that have more comprehensive laws for transgender people than the states do,” HRC said. “And that’s an important part of how 135 million Americans — 42 percent of the population — are covered under LGBTQ-inclusive non-discrimination laws.” Over the past two years, many states have also passed anti-LGBTQ “Freedom of Religion Laws,” which the HRC says legalizes discrimination against LGBTQ people. “Despite another year of legislative attacks on LGBTQ equality, we are not merely holding our ground; we also continue to make significant gains across the country,” said Rebecca Isaacs, executive director of the Equality Federation Institute, which partnered with the HRC Foundation to conduct the report.

http://www.alreporter.com/eight-alabama-cities-receive-failing-grades-on-lgbtq-equality/

Social security and veterans benefits recipients, military retirees: Here’s your 2017 raise

People who receive Social Security or veterans benefits or are military retirees will see only a small monthly raise next year. The Social Security Administration announced Tuesday the 2017 cost-of-living-adjustment will be 0.3 percent. The change will increase monthly benefits for more than 70 million Americans, though only by a few dollars. According to the Social Security Administration, a retired worker currently receiving $1,355 in monthly benefits will see that go to $1,360 as a result of the COLA. Others will see changes ranging from $4 to $6 a month, though it’s expected the increase will be offset by higher costs associated with Medicare Part B. 2017 is the third consecutive year in which the annual adjustment will be under 0.5 percent. Recipients received no COLA in 2010, 2011 or 2016 and the 2017 increase is the smallest since the Social Security Administration began automatic annual adjustments in the 1970s.

The annual COLA is determined by the Consumer Price Index, which measures inflation in the the costs of goods and services. Congress has linked veterans and military retiree benefits to the Social Security formula, meaning the groups receive the same amounts in most years. More than 60 million retirees, disabled workers, spouses and children receive Social Security benefits, as do 4 million disabled veterans, 2.5 million federal retirees and survivors and 8 million who receive Supplemental Security Income, a disability program for the poor.

http://www.al.com/news/index.ssf/2016/10/social_security_and_veterans_b.html#incart_river_home

Blogs/Opinions

What the Hell Happened to My Republican Party?

As a confirmed #NeverTrump conservative from day one, I should be ecstatic at the way Donald Trump’s campaign has cratered since the Oct. 7 revelation of an audiotape in which he boasted of groping women. Numerous women have now come forward to testify that this was not, as the Republican nominee claimed in the second presidential debate, an empty boast. The Real Clear Politics average has Hillary Clinton 7.0 points ahead nationally in a two-way race; a landslide is becoming increasingly likely.

And yet, although I’m relieved that Trump is unlikely to be our next president, I remain profoundly disturbed and depressed that so many of my fellow Republicans continue to back him despite the growing evidence of his degeneracy and lunacy. Their position in the campaign’s waning days — sitting on the Trump Train as it hurtles toward the precipice — bodes ill for the future of the Republican Party. Sensing his impending downfall, Trump has been ranting that the election is rigged against him, hinting that his opponent is high on drugs, and demanding that she be locked up. Even more disturbing is his claim that Clinton is engaged in a conspiracy with a shadowy cabal of “international banks to plot the destruction of U.S. sovereignty in order to enrich these global financial powers, her special interest friends, and her donors” — language that echoes centuries of anti-Semitic slurs. Trump has also been issuing empty threats to sue the New York Timesand vainly trying to rebut the sexual assault charges against him — for instance, by putting forward a notorious British fabulist and self-proclaimed pimp to assert that he was on the very same flight, in the very same first-class cabin, nearly 40 years ago when Trump was alleged to have groped a female passenger and that absolutely nothing untoward happened. The more Trump talks, the more demented he sounds. At the rate he is going, he will end the campaign in a psychiatric ward — or on his own TV channel, which is pretty much the same thing. And yet all of his unhinged harangues have barely dented Trump’s support among his slavishly loyal base. A recent Fox News pollshowed Clinton ahead of Trump by 7 percent overall, but Trump is still getting 80 percent of the Republican vote — only 10 points lower than John McCain, a war heroreceived in 2008. AWashington Post-ABC News poll found 72 percent approve of his threats to imprison Clinton — a violation of the most basic norms of democracy. A survey by Public Policy Polling observed that among Trump supporters in Florida, 40 percent say Clinton is literally a demon — a claim advanced by the crackpot talk-radio host Alex Jones, who says the Democratic nominee “stinks” of sulfur. These surveys suggest that most of the GOP base is so disfigured by pathological, unreasoning hatred of Clinton — a flawed candidate, to be sure, but also a centrist Democrat with ample qualifications for the presidency — that they will embrace any alternative, no matter how vile. More:

https://foreignpolicy.com/2016/10/18/trump-presidential-election-gop-values-republican-party-conservative-principles/?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=%2AEditors%20Picks

Donald Trump’s unpatriotic campaign

“Make America great again.” Donald Trump’s campaign slogan implies its critique. Isn’t America great already? Apparently not. In recent days, though, Trump’s distaste for America has come clearer. His frontal assault on the basic legitimacy of the country’s presidential election is more than a rationalization — it’s a tell, a revealed preference, a window into how little regard Trump has for the country he seeks to lead. America is great. And one of the reasons it’s great is that it has a long history of peaceful, predictable transitions of power. We venerate George Washington for stepping down at a time when his countrymen would have made him king. The Constitution was amended to ensure no leader, no matter how beloved, could hold the White House for more than eight years. The tradition is so strong that in 2000, Al Gore conceded the presidency, even though he won more votes than the victor and only lost Florida, if he lost Florida, because of a confusing butterfly ballot. The end of his campaign came through a Supreme Court decision, not a full and fair recount. He could have contested the outcome. But he didn’t.

Gore loved America. He believed it great, and thus worth protecting. “Let there be no doubt,” he said, “while I strongly disagree with the court’s decision, I accept it. I accept the finality of this outcome which will be ratified next Monday in the Electoral College. And tonight, for the sake of our unity as a people and the strength of our democracy, I offer my concession.” This spirit isn’t just noble; it’s essential for democracies to survive. “Graceful concessions by losing candidates constitute a sort of glue that holds the polity together, providing a cohesion that is lacking in less-well-established democracies,” writes Shaun Bowler, a political scientist at UC Riverside, and co-author of Losers’ Consent: Elections and Democratic Legitimacy. “Graceful concession” does not appear to be the direction Trump is going. “Hillary Clinton should have been prosecuted and should be in jail,” he tweeted on Saturday. “Instead she is running for president in what looks like a rigged election.” Republicans tried to cover for him. Oh, he just means the media is biased, his supporters said. He doesn’t mean the election is literally being rigged.

“The election is absolutely being rigged by the dishonest and distorted media pushing Crooked Hillary,” Trump clarified on Sunday, “but also at many polling places – SAD.”

So much for that.

http://www.vox.com/policy-and-politics/2016/10/17/13300818/donald-trump-unpatriotic-campaign?yptr=yahoo

Is that a statue of a saint or devil outside the Alabama Capitol?

There are little things in life, and especially in Alabama, that’ll cause you that old double take. Wa-wa-wa-whaaat?  Like when you walk outside the Capitol in Montgomery to see that stately and dignified, larger-than-life statue of Dr. J. Marion Sims, the “father of modern gynecology.” He’s there looking selfless and solemn, the very image of capable care, captured in bronze. You smile to yourself and nod, proud that Alabama saw a need to recognize advances in women’s medical issues way back in 1939, when the statue was erected. There were progressive folks in the state back then, pushing for equality and the common good and liberty and health care for all. And then –- then you go home to learn more about this J. Marion Sims, who brought comfort to so many. And…And…Wa-wa-wa-whaaat? Say it ain’t so J. Say it ain’t so. Because Alabama’s bronzed doc was more than a selfless healer. Some think of him as a Frankenstein. One South Carolinian dubbed him “Father Butcher.” Because Sims, standing tall in the shadow of the Alabama Capitol, honed his surgical craft on slave women. Without anesthesia.

If he needed a patient he bought one. Or rented her. And carved her up until he got it right. Or not.

Sims performed multiple surgeries on at least 10 slave women between 1846 and 1849, according to a New York Times story about a Sims statue there in 2003. One of those women, Anarcha, was operated on 30 times. His methods were questioned even then. But he said the gain was worth the cost, and in his autobiography he justified the acts by saying “I kept these Negroes at my own expense.” It’s like a prequel to the Tuskegee syphilis studies. With a scalpel. And no anesthesia. Not that good didn’t come from this mad science bad. He was only in Alabama for about 18 years in between, practicing medicine here from 1835 to 1853. It has been reported that he moved to Alabama soon after med school, after his first two patients died. But he has a statue. Right there with all the honored Confederates. Sims once had a portrait hanging at UAB’s Center for Advanced Medical Studies, but that was removed in 2006 because of modern sensibilities. Or sense. A Sims descendent, Virginia Sims Hudson of Frisco City, at the time called that decision “gutless” and said it was “classic political correctness run amok.” “This is a man who gave his life to help people in need, no matter their color. Women of wealth and position came to Sims wanting to be cured from this horrible condition that so many women had to endure,” she wrote.

“Our country was made great by hardworking, dedicated people like Sims.” Our country was made what it is by people like Sims. Who used black people like lab rats to further his aims. Who rationalized it because he paid for them. Wa-wa-wa-whaaat? Maybe, as the Times suggested years ago, it’s time someone built a statue to honor those slave woman. They were the mothers of modern gynecology, and knew the real pain of discovery. Let it be Alabama. Sims developed procedures and gynecological tools still used in operating rooms. His advances, honed on slaves named Lucy and Betsey and Anarcha, all but wiped out vesico-vaginal fistula in the western world, a condition caused by extended childbirth that resulted in incontinence. His supporters say he must be understood in the context of his time. He was certainly hailed as a hero in days gone by. Statues were erected to him in South Carolina, where he was born, and in New York City, where he died.

http://www.al.com/opinion/index.ssf/2016/10/is_that_a_statue_of_a_saint_or.html

Morning Money

THE FINAL SHOWDOWN — Donald Trump and Hillary Clinton square off Wednesday night in Las Vegas for the final debate of the 2016 campaign. Trump comes in trailing by around 7 points nationally and struggling in just about every critical swing state. Trump even appears to be in trouble in traditionally red states including Georgia, Arizona and Texas. Internal figures in national polls suggest there is probably nothing Trump can do in Las Vegas to turn things around.

In the latest Fox News poll, just 35 percent of voters say Trump has the temperament to serve as president to 61 percent for Clinton. Only 37 percent say he has the judgment to 53 percent for Clinton. Even on the question of “change,” which should be Trump’s strong point, he trails 47 percent to 44 percent.

One debate can’t turn these kind of numbers around. Clinton only needs a competent, forward-looking performance to essentially close the election out. Trump, for unknown reasons, is bringing President Obama’s estranged half brother to the debate. That should tell you all you need to know.

The full Fox results are worth reading. Quite eye opening. One thing that jumped out: 74 percent support a path to legal status for undocumented immigrants. Just 18 percent say the U.S. should “deport as many as possible.” Read more.

KUDLOW CALLS FOR “CIVILITY” — Via POLITICO’s Colin Wilhelm: “During a question and answer session at the WSJ’s financial regulation conference in New York, Larry Kudlow spoke to the need for more civility in political discourse, which at times sounded more aimed at the Trump campaign he’d advised on tax and economic policy than anyone else.

“I don’t like insults, I don’t like underhanded this and that, name-calling. I don’t like any of that. This is about principles not personalities,” Kudlow said about politics. “I’m asking you for civility. Our disagreements aside, these are some things that should work and we should talk about them,” Kudlow said to a roomful of financial executives, policy makers, and journalists gathered in the Four Seasons Hotel — -a couple avenues over from Trump Tower on Manhattan’s east side.

When asked about what economic advisers Trump might bring into the White House, Kudlow didn’t want to go there, saying it was too early. But he added, “I cannot speak for the campaign … I helped write his economic and tax cut plan, which if I do say so myself, I thought it was pretty darn good. I just wish he ‘d use it.” Past leaders Kudlow praised for their civility were Kennedy, Reagan, and … Bill Clinton.

WEISS WARNING SHOT — Treasury Counselor Antonio Weiss issued a warning against any attempts to alter President Obama’s signature financial legacy during end of year appropriations. “Let me say one thing, which is that the Obama administration and the Treasury Department will remain steadfast in making sure that these targeted efforts to upend [Dodd-Frank] do not meet success,” he said, referring to prior attempts — some successful — to change financial regulation through end of year appropriations packages.

BARNEY FRANK SEES HISTORIC OPPORTUNITY … to exploit House Speaker Paul Ryan’s ambitions. Via POLITICO’s Victoria Guida: “The former chairman of the House Financial Services Committee said Tuesday that he’s more optimistic than some about prospects for legislation to become law next year under a divided government. “I think people are leaving out one factor,” Frank said at the WSJ event. “Paul Ryan is the first speaker of the House since John Nance Garner in 1932 who wants to be president of the United States. Paul Ryan is subject to a whole different set of incentives and pressures than any previous speaker. He cannot in his own interest simply say no.”

Frank said he’d like to see some improvements to the bill that bears his name. “Once Hillary Clinton is elected .. it will be clear that [Dodd-Frank] is not going away, and then I think people will feel free to make some changes,” he said, adding that there’s “bipartisan support” for some of them.

DEBATE PREP: TRUMP ON JOBS — Via ThirdWay: “There’s an outside chance that tonight’s debate, after the scandals and insults, could return to jobs and the economy. Third Way is out with a new memo … on Trump’s boldest claims about jobs. For each claim, the authors examine the source of the idea and how it holds up to the facts. Read more.

TRUMP’S MATH DOESN’T ADD UP — WSJ’s Greg Ip: “Donald Trump’s tax cuts would result in $6 trillion in lost revenue over the next decade, according to several independent analyses. His advisers disagree. They claim Mr. Trump’s entire program, including trade, regulation and energy, not just taxes, would generate so much growth there would be almost no increase in the deficit.
Their math doesn’t add up.

“It rests on aggressive, tenuous or flawed assumptions: that deficits caused by tax cuts don’t raise interest rates; that removing regulations adds directly to gross domestic product; that oil and gas companies will rush to drill on newly opened federal land regardless of energy prices; and that protectionism expands the economy even if U.S. companies and workers are already working flat out” Read more.

TRUMP BACKER COMPARES DOL RULE TO SLAVERY — Huff Po’s Ben Walsh: “One of Donald Trump’s top Wall Street fundraisers said an Obama administration rule cracking down on retirement fees and bad investment advice ‘could be the dumbest decision to come out of the U.S. government in the last 50 to 60 years.’ Anthony Scaramucci, who founded Skybridge Capital … made the comments at a securities conference last week in Washington, Investment News reports. ‘It’s about like the Dred Scott decision,’ Scaramucci said, promising that a Trump administration would repeal what’s known as the fiduciary rule

“Scaramucci wrote in a follow up email to Investment News reporter Mark Schoeff Jr. that he made the comparison to the 1857 Supreme Court case denying African Americans citizenship because ‘the left-leaning Department of Labor has made a decision to discriminate against a class of people who they deem to be adding no value.’” Read more.

UNIONS SPEND BIG FOR DEMS — WSJ’s Brody Mullins and Rebecca Ballhaus: “U.S. labor unions are plowing money into the 2016 elections at an unprecedented rate, largely in an effort to help elect Hillary Clinton and give Democrats a majority in the Senate. According to the most recent campaign-finance filings, unions spent about $108 million on the elections from January 2015 through the end of August, a 38 percent jump from $78 million during the same period leading up to the 2012 election, and nearly double their 2008 total in the same period. Nearly 85 percent of their spending this year has supported Democrats.

“Almost every large union is spending more than has been seen in modern elections, financing rallies, canvassing efforts and ad campaigns to bolster Democrats. The AFL-CIO has spent $11.4 million funding outside political groups such as super PACs thus far, up from $5 million at this point in the 2012 election, according to the nonpartisan Center for Responsive Politics. The National Education Association has spent $14 million, up from $7.7 million” Read more.

DRIVING THE DAY — Final debate begins at 9:00 p.m. EST at UNLV at will last 90 minutes, moderated by Fox News’ Chris Wallace. Topics include immigration, entitlements and debt, the Supreme Court, the economy, foreign policy, and each candidate’s fitness to serve as president … Goldman Sachs CEO Lloyd Blankfein will be on CNBC’s “Power Lunch” at 2:40 p.m.

CHINA GDP ON TRACK AT 6.7 PERCENT — FT’s Tom Mitchell and Yuan Yang” “The Chinese economy expanded 6.7 per cent in the third quarter of 2016, putting it firmly on track to meet the government’s full-year target of at least 6.5 per cent growth. But concerns are mounting that the rate could decelerate as officials try to cool an overheated property sector, a traditional motor of the country’s economy.

“This month more than 20 urban governments across China introduced measures to restrain property prices, which over the past year have increased by as much as 25 per cent in cities such as Beijing and Shanghai. Many analysts believe the real-estate sector ultimately accounts for more than half of all investment, after factoring in related demand for everything from concrete to household goods” Read more.

SPORTS BLINK: BELICHICK BLASTS MICROSOFT — New England Patriots coach Bill Belichick went on an extraordinary rant against the “undependable” Microsoft Surface tablet he is supposed to use on game days and pledged to never use it again. Read more.

KAINE LAYS OUT POVERTY PLAN — POLITICO’s Brent Griffiths: “At a small nonprofit in Detroit, Virginia Sen. Tim Kaine said America is not a nation where people ‘walk on by’ those in poverty. … In a city whose history Donald Trump channels into his narrative of a nation that neglects its workers through corrupt trade deals, Kaine spoke of not just rebuilding Detroit but reshaping the city and the country into a place where those in poverty are no longer in peril through an agenda put forth by him and Hillary Clinton” Read more.

THE LEFT LOVED IT — Kait Sweeney, Progressive Change Campaign Committee Press Secretary, emails: “It’s great to see Clinton and Kaine keeping the volume high on their bold progressive promises like expanding Social Security, debt-free college, a $15 minimum wage, the public option, and opposing the TPP. Hillary Clinton can avoid being outflanked in Wednesday’s debate by Donald Trump’s faux economic populism by being vocal on these popular progressive ideas”

COLLATERAL DAMAGE — WSJ’s Rachael King: “Months before Salesforce.com Inc. considered buying Twitter Inc., the company was looking at more than a dozen acquisition targets that didn’t include the social-media giant, according to an internal presentation for its board members.

“The presentation came from a trove of thousands of former Secretary of State Colin Powell’s emails that was published in September by DCLeaks, a website of self-described “hacktivists” that releases documents from government officials and other prominent people. Mr. Powell sits on Salesforce’s board of directors.” Read more.

GOLDMAN STRIKES GOLD — FT’s Ben McLannahan: “Goldman Sachs has achieved its first double-digit return on equity of the past six quarters, as brighter capital-markets conditions allowed the Wall Street bank to benefit from the shakeout of weaker competitors.

“The upbeat commentary was consistent with other big US banks such as JPMorgan Chase, Citigroup and Bank of America Merrill Lynch, which all reported better than expected figures from their investment banking divisions, which span trading and advisory activities.” Read more.

ROUND AND ROUND IT GOES — POLITICO’s Zachary Warmbrodt: “Hillary Clinton’s campaign advisers disagreed about how tough the former Secretary of State should be when it came to the ‘revolving door’ that circulates people between jobs in Washington and Wall Street, according to email conversations released by WikiLeaks.

“The dispute arose in a string of August 2015 messages — unverified by the campaign — where aides provided input on an op-ed that Clinton planned to publish with Sen. Tammy Baldwin (D-Wis.)” Read more.

SUING SAMSUNG — “Samsung Electronics Co Ltd’s U.S. unit is facing a proposed class action lawsuit from three Galaxy Note 7 customers, according to a filing in a federal court in Newark, New Jersey.

“The complaint against Samsung Electronics America Inc seeks to represent a nationwide class of Note 7 customers in Nevada, Pennsylvania and California.” Read more.

YAHOO BOUNDS BACK — Bloomberg’s Brian Womack: “Yahoo! Inc. reported third-quarter profit that topped estimates, a rare bit of good news after a large-scale hack of user data was disclosed last month that could threaten the purchase of the company’s main web assets by Verizon Communications Inc.” Read more.

LEAN … LEFT? — POLITICO’S Zachary Warmbrodt, Ben White and Tony Romm: “Sheryl Sandberg, the billionaire Facebook executive whose book “Lean In” has made her an icon to women in the workplace, is getting lots of attention as a potential Treasury secretary under Hillary Clinton.

“But she’s also drawing red flags from progressives, who are suspicious about her ties to former Clinton administration Treasury Secretary Larry Summers, unhappy with Facebook’s international tax practices and wary about seeing the next Democratic White House stack its Cabinet with allies of big business.” Read more.

NO, FORD IS NOT CUTTING U.S. JOBS — NYT’s Bill Vlasic: “In a move that has drawn fire from Donald J. Trump and other critics of [NAFTA], Ford is giving up on making small cars in the United States and plans to move production of its Focus compact cars from the Wayne factory to a new plant under construction in Mexico.

“Mr. Trump and others have criticized Ford for creating jobs in Mexico rather than in the United States. Seldom mentioned by Ford’s critics, though, is an essential fact. The Wayne factory will remain fully staffed, with 3,700 workers, to build what Ford really needs now: more trucks and S.U.V.s.” Read more.

MEET SERVICE KING — The American Investment Council has a new video up on Service King Collision Repair Center, a private equity-backed company, first owned by The Carlyle Group and then sold to Blackstone, with Carlyle maintaining a minority stake and partnership role. Video.

ARE FUND MANAGERS FINISHED? — WSJ’s Spencer Jakab: “By almost any measure — performance, inflows and certainly bang for the buck — passive funds for years have trounced active managers. But can the superior performance continue, or are there limits to their success? Passive investing amounts to tracking an index or formula as opposed to paying a human being to actively beat the market. The question of whether investors can continue to get more for less isn’t merely a case of grousing from beaten money managers.

“There are legitimate arguments against passive investing’s virtues and sustainability. Past performance, as they say, is no guarantee of future returns. Nor is there precedent for what happens when so much money is invested blindly according to a formula” Read more.

RASKIN ON CYBER — More from the WSJ fin reg event: “Cyberthreats to financial institutions have transformed into a global problem that requires a united effort from government and business, according to Sarah Bloom Raskin, deputy secretary of the U.S. Department of the Treasury …

The Treasury is also working with the Group of Seven leading industrialized nations, known as G7, on fundamental and scalable cybersecurity guidelines. ‘We now have realized that in order to get this right, we have to think about this globally,’ Ms. Raskin said.” Read more.

POTUS Events

Floor Action

Both the House and Senate are out.

AROUND THE HILL— House Minority Leader Nancy Pelosi holds a press conference in HVC Studio A at 11:30 a.m.