Sources: Russians discussed potentially ‘derogatory’ information about Trump and associates during campaign
Russian government officials discussed having potentially “derogatory” information about then-presidential candidate Donald Trump and some of his top aides in conversations intercepted by US intelligence during the 2016 election, according to two former intelligence officials and a congressional source. One source described the information as financial in nature and said the discussion centered on whether the Russians had leverage over Trump’s inner circle. The source said the intercepted communications suggested to US intelligence that Russians believed “they had the ability to influence the administration through the derogatory information.” But the sources, privy to the descriptions of the communications written by US intelligence, cautioned the Russian claims to one another “could have been exaggerated or even made up” as part of a disinformation campaign that the Russians did during the election. The details of the communication shed new light on information US intelligence received about Russian claims of influence. The contents of the conversations made clear to US officials that Russia was considering ways to influence the election — even if their claims turned out to be false. None of the sources would say which specific Trump aides were discussed. One of the officials said the intelligence report masked the American names but it was clear the conversations revolved around the Trump campaign team. Another source would not give more specifics, citing the classified nature of the information. “The Russians could be overstating their belief to influence,” said one of the sources. As CNN first reported, the US intercepted discussions of Russian officials bragging about cultivating relationships with Trump campaign aides during the campaign, including Trump’s first national security adviser, Michael Flynn, to influence Trump. Following CNN’s report, The New York Times said Trump’s campaign chairman Paul Manafort was also discussed. More:
Investigation Turns to Kushner’s Motives in Meeting With a Putin Ally
WASHINGTON — Jared Kushner, the president’s son-in-law and senior adviser, was looking for a direct line to President Vladimir V. Putin of Russia — a search that in mid-December found him in a room with a Russian banker whose financial institution was deeply intertwined with Russian intelligence, and remains under sanction by the United States. Federal and congressional investigators are now examining what exactly Mr. Kushner and the Russian banker, Sergey N. Gorkov, wanted from each other. The banker is a close associate of Mr. Putin, but he has not been known to play a diplomatic role for the Russian leader. That has raised questions about why he was meeting with Mr. Kushner at a crucial moment in the presidential transition, according to current and former officials familiar with the investigations. The New York Times first reported the meeting between Mr. Kushner and Mr. Gorkov in March, but the White House at the time did not explain its aim. That article quoted a White House spokeswoman, Hope Hicks, who said that the meeting came at the request of the Russian ambassador to the United States, Sergey I. Kislyak, with whom Mr. Kushner had met earlier in December at Trump Tower to discuss opening a communications channel with Russian officials during the presidential transition. But the half-hour meeting with Mr. Gorkov since has come under increasing scrutiny. The current and former American officials now say it may have been part of an effort by Mr. Kushner to establish a direct line to Mr. Putin outside of established diplomatic channels. The meeting came as Mr. Trump was openly feuding with American intelligence agencies and their conclusion that Russia had tried to disrupt the presidential election and turn it in his favor. The Senate Intelligence Committee notified the White House in March that it planned to question Mr. Kushner about the meeting. On Friday, citing American officials briefed on intelligence reports, The Washington Post reported that Mr. Kislyak told his superiors in Moscow that Mr. Kushner had proposed a secret channel and had suggested using Russian diplomatic facilities in the United States for the communications. The White House has not denied the Post report, which specified that Russian communication centers at an embassy or consulate in the United States were discussed as hosts for the secure channel. It is not clear whether Mr. Kushner saw the Russian banker as someone who could be repeatedly used as a go-between or whether the meeting with Mr. Gorkov was designed to establish a direct, secure communications line to Mr. Putin.More:
With Italy No Longer in U.S. Focus, Russia Swoops to Fill the Void
ROME — President Trump made the most of his short time in Italy. He was treated to a private audience with the pope, met with both the country’s president and its prime minister in Rome, flew to Sicily for a summit meeting of world leaders and visited with American troops at a nearby naval air station. But as the sudden burst of diplomatic activity subsided with his departure, European and American officials fear a return to the new normal of American inattention as the administration struggles with political turmoil and Russia-related scandals back home. All the while, Russia is assiduously courting Italy, a country that once had the largest Communist party outside the Soviet bloc and that many analysts consider the soft underbelly of the European Union. In Rome, Mr. Trump left behind an embassy without an ambassador, and forfeited a geopolitical playing field that Moscow’s ambassador in Rome, Sergey Razov, is exploiting. A deliberate, gray-haired career diplomat, Mr. Razov has been plugging away at building relationships with Italian politicians, organizing concerts for Italy’s earthquake survivors and visiting Italian regional officials who lament the “unfair” sanctions on Russia — which Moscow dearly wants lifted. Next month, Mr. Razov will offer a sumptuous buffet when he hosts the annual Russia Day celebration amid the dripping chandeliers, coffered ceilings and gilded interiors of his Villa Abamelek residence. Like Mr. Razov’s energetic diplomacy, much of Russia’s relationship building is being done in plain sight, as when President Vladimir V. Putin of Russia hosted Prime Minister Paolo Gentiloni this month in Sochi, and President Sergio Mattarella a few weeks before that in Moscow. But there is a fear among Italian, European and American officials that Russia is also using the same kind of behind-the-scenes influence and news media obfuscation it has employed in the United States and elsewhere, creating a tilt in Italy toward Moscow. Former Prime Minister Matteo Renzi complained privately to his counterparts about Russian meddling in his country’s politics by supporting anti-establishment parties. And websites controlled by a leader of the Five Star Movement, one of Italy’s most popular anti-establishment parties, have spread reports published on Sputnik Italia, an Italian version of the Russian state-funded news operation. Russia “has invested a lot in influencing public opinion in this country,” said Celia Kuningas-Saagpakk, the Estonian ambassador to Italy. She previously worked in her country’s Foreign Ministry, where she covered Russia and monitored its strategies and propaganda tactics in Ukraine and elsewhere. More:
Manuel Noriega, Panamanian strongman toppled in U.S. invasion, dies at 83
Gen. Manuel Noriega, the Panamanian strongman and onetime American ally who was toppled from power in a 1989 U.S. invasion and who spent more than two decades imprisoned on drug dealing and conspiracy convictions, died late Monday. He was most likely 83. The cause of death was not announced but Gen. Noriega had been in intensive care at a hospital for months after complications from surgery to remove a benign brain tumor. Panamanian President Juan Carlos Varela announced the death Tuesday morning on Twitter, saying that the passing closes a chapter in the country’s history. A career military man, Gen. Noriega led the Panamanian Defense Forces from 1983 until President George H.W. Bush ordered the invasion on Dec. 20, 1989, which followed months of deteriorating relations between Panama and the United States. Gen. Noriega was a polarizing figure for decades after he was led in chains from Panama by U.S. marshals on Jan. 4, 1990, to a federal prison in Miami. His opponents said Gen. Noriega was a brute who killed his opponents and hid millions of dollars in gains from drug and other corruption payments. Retired Army general and former secretary of state Colin L. Powell once described Gen. Noriega as “pure evil.” Gen. Noriega consistently rejected such charges, which he said were trumped up by opponents. He claimed the Bush administration moved against him after he refused to help American policy in Central America intended to overthrow Nicaragua’s Sandinista government and halt a civil war in El Salvador. More:
Even Angela Merkel’s political rivals are on her side against Trump
As they campaign against each other ahead of national elections in September, German Chancellor Angela Merkel and her chief political rival, Martin Schulz, find themselves united in opposition to President Trump. Speaking at a beer hall rally in Munich on Sunday, Merkel suggested that the era when Europe could rely on the United States may be coming to an end and that the continent “really must take our fate into our own hands.” The dramatic announcement came after contentious meetings with Trump, who had used his first official trip to Europe to criticize German trade, scold world leaders about their NATO spending and refuse to commit to the Paris agreement on combating climate change. Schulz, a former president of the European Parliament, is the head of the center-left Social Democrats. He is easily the most convincing challenger to Merkel’s 11-year reign as chancellor and a charismatic leader in his own right. Yet rather than criticize his rival or her Christian Democratic Union-led government for the strained relationship with Trump, Schulz has passionately offered support. In video published by the Deutsche Welle news agency on Monday, a visibly angry Schulz can be seen railing against Trump, who he said “believed he could inflict humiliation in Brussels.” The Social Democrat leader then said it did not matter that Merkel and he were in the middle of an election campaign, as “the chancellor represents all of us at summits like these, and I reject with outrage the way this man takes it upon himself to treat the head of our country’s government.” “That is unacceptable,” Schulz said. He had made a similar comment on Sunday shortly after Merkel’s remarks. “A stronger cooperation of European countries on all levels is the answer to Donald Trump,” Schulz told the public broadcaster ARD. On Monday, he tweeted in German, English and French that the “best response to Donald Trump is a stronger Europe.”
Trump Blasts Germany Again as Merkel, Modi Cite Mutual Values
U.S. President Donald Trump ratcheted up a dispute with Germany over trade and defense as Chancellor Angela Merkel met with Indian Prime Minister Narendra Modi in a demonstration of her ability to pivot from the U.S. to strengthen alternative global alliances. “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military,” the U.S. president posted on Twitter Tuesday. “This will change.” The message came minutes after Merkel and Modi held a joint press conference in Berlin, at which the German leader called India a “reliable partner with respect to big projects.” That contrasted with her comments in Munich on Sunday that reliable trans-Atlantic ties that formed the basis of German foreign policy since World War II “are to some extent over.” Merkel and Modi stressed their mutual values on the economy and climate change, with the Indian leader suggesting he will adhere to the Paris Agreement to combat global warming even if the U.S. quits. He praised Merkel’s experience and Germany’s economic example to India. “We are meant for each other,” Modi said.
Fact-check: Donald Trump says Germany owes ‘vast sums of money to NATO’
Less than 24 hours after meeting with German Chancellor Angela Merkel, President Donald Trump took to Twitter to criticize Germany for shirking on its defense payments to the North Atlantic Treaty Organization and the United States. “Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel,” Trump wrote in a tweet March 18. “Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!” Trump has repeatedly called on NATO countries to contribute more to that military alliance, so we decided to fact-check his claim about Germany. What we found is that Trump is misunderstanding how NATO’s joint defense is paid for, and that Germany doesn’t owe anything. See more:
North Korea Says New Missile Landed Within 7 Meters of Target
North Korea’s latest ballistic missile test involved a new rocket with a precision guidance system that landed within seven meters of its target, its state-controlled news agency said Tuesday. Leader Kim Jong Un oversaw the launch of the missile early Monday from the country’s east coast. Preparations before the firing were more automated than for the previous “Hwasong,” or Scud, rockets, the Korean Central News Agency said, adding that this “markedly” reduced the launching time. The accuracy claims, if true, would represent a potentially significant advancement in North Korea’s missile program. KCNA said Kim called for the continued development of more powerful strategic weapons, though the report didn’t mention whether the missile could carry nuclear warheads. “We can’t prove if it’s bluffing, but North Korea is basically saying it can hit the target right in the center, which is scary news for the U.S.,” said Suh Kune Y., a professor at Seoul National University’s department of nuclear engineering. “If true, that means they’re in the final stage of missile development.” The missile first appeared at an April 15 military parade celebrating the birth anniversary of North Korea’s founder Kim Il Sung, the news agency said. It flew 450 kilometers (280 miles) toward Japan, according to South Korean military officials, with the government in Tokyo saying it may have reached waters in Japan’s exclusive economic zone. The test — the ninth this year — came two days after the Group of Seven nations pledged to “strengthen measures” aimed at prompting North Korea to cease nuclear and ballistic missile trials. World leaders are grappling with how to halt provocations by the isolated nation, with South Korea’s President Moon Jae-in seeking engagement while U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe take a harder line. KCNA said North Korea won’t be swayed by pressure from the G-7. More:
U.S. Bombers Fly Near North Korean Border After Missile Launch
SEOUL—The U.S. and South Korea conducted a joint drill involving U.S. B-1B bombers on Monday, the second such exercise this month and a move North Korea called “a grave military provocation,” after the North test-launched a short-range ballistic missile the same day. The drill, which North Korea said took place over South Korea and near the Military Demarcation Line that divides the two Koreas, was confirmed by a spokesman for South Korea’s South Korea’s Ministry of National Defense. The spokesman said the South Korean air force conducted the joint drill with the U.S. but declined to give further details or to say how many B-1B bombers were involved. Lt. Col. Lori Hodge, a spokeswoman for the U.S. Pacific Air Force Command, wouldn’t comment on the particulars of the mission, saying only that the U.S. has “maintained a rotational strategic bomber presence in the region for more than a decade.” She added that the aircraft “provide a significant capability that enables our readiness and commitment to deterrence” and reassured allies in the region. Earlier this month, the U.S. sent a pair of B-1B bombers to an area around the Korean Peninsula to conduct exercises with the South Korean and Japanese air forces, following a failed North Korean missile test days earlier. In that case, as with the most recent one, South Korea only confirmed the joint exercise after North Korea first publicized it in its state media. North Korea accused the U.S. of staging a “nuclear-bomb-dropping drill” with the bombers, which it sees as a new provocation in addition to the presence of the USS Carl Vinson and the USS Ronald Reagan, two aircraft carriers that are operating near the Korean Peninsula. More:
Old World Order Is Alive But Unwell After Four Months of Trump
Four months into Donald Trump’s presidency, the sky has not fallen in on the system of global governance the U.S. did so much to construct since World War II. It is, however, in deep trouble. Trump has not followed through on pre-election threats to declare the North Atlantic Treaty Organization obsolete, abandon the North American Free Trade Agreement, accept Russia’s annexation of Crimea or declare China a currency manipulator. And yet, as he flew back to Washington at the weekend, Trump’s meetings with traditional U.S. allies during his nine-day tour of the Middle East and Europe appeared to leave them more, rather than less worried about the inventory of issues that caused such concern last November. They emerged unsure of his commitment to NATO’s collective-defense principle, unclear as to his stance toward Russia, deeply concerned about his distrust of free-trade agreements and in suspense as to whether he’ll withdraw the U.S. from the 2015 Paris Agreement to slow climate change. Trump said in on Twitter he’d make the decision this week. “We are not in good shape at all,’’ said Francois Heisbourg, a veteran analyst of the trans-Atlantic alliance and chairman of the International Institute for Strategic Studies. “In some ways it’s worse than I thought.’’ He described those as issues of Trump’s impetuous character and governance style.
U.S. Senator calls for probe into promotion of Kushner Cos deal
The chairman of the Senate Judiciary Committee has called for an investigation into “potentially fraudulent statements and misrepresentations” made by companies promoting investment in a property development involving the family company of White House advisor Jared Kushner. Citing a May 12 report by Reuters, Chuck Grassley, a Republican senator from Iowa, requested a review of claims made by Chinese migration agency Qiaowai and the U.S. Immigration Fund (USIF) in the marketing of the One Journal Square project in Jersey City, New Jersey to potential investors in China. Grassley flagged his concerns to the Department of Homeland Security and the Securities and Exchange Commission in a May 24 letter that was later posted on his website. Jupiter, Florida-based USIF contracted with Beijing-based Qiaowai to market projects including One Journal Square to potential investors through the controversial EB-5 scheme. The program offers qualified foreign investors the chance at a green card in exchange for a $500,000 investment in a U.S. business. Kushner Companies is also working with KABR Group, a private equity fund, on the One Journal Square project, according to marketing materials on Qiaowai’s website. The developers are seeking to raise $150 million, or 15.4 percent of the funding, from EB-5 investors. Because the SEC considers some EB-5 investments securities, companies and individuals that market these investments must comply with U.S. securities laws. EB-5 schemes must also comply with immigration rules. Under United States Citizenship and Immigration Services (USCIS) guidelines, EB-5 investors must put their capital at risk and the green card is not guaranteed. USCIS is part of the Department of Homeland Security. More:
Trump’s Trip Was a Catastrophe for U.S.-Europe Relations
Seven years after the end of the Second World War, on the 10th of March 1952, the governments of the United States, the United Kingdom, France, and the newly established Federal Republic of Germany received an astounding note from the Soviet Union. The Soviet Union offered to withdraw the troops that then occupied eastern Germany and to end its rule over the occupied zone. Germany would be reunited under a constitution that allowed the country freedom to choose its own social system. Germany would even be allowed to rebuild its military, and all Germans except those convicted of war crimes would regain their political rights. In return, the Allied troops in western Germany would also be withdrawn—and reunited Germany would be forbidden to join the new NATO alliance. Historians have long debated whether the note represented a genuine offer or a cynical ploy. (Current consensus: ploy.) There’s no debate about what happened next. Determined to anchor Germany securely in the Western camp of nations, German Chancellor Konrad Adenauer rebuffed the “Stalin note.” West Germany would enter NATO in 1955, build the European Union, and develop as an Atlanticist liberal democracy. The Soviets did not quit, however. Again and again through the Cold War they would probe for ways to split Germany from the West, and especially from the United States. They probably came closest in the early 1980s, when millions of Germans marched in the streets against NATO nuclear missile deployments. (The 1983 song, “99 Luftballons” is probably now the most enduring memento of that dramatic moment.) But in the end … it didn’t work. The alliance held. The Soviet bid for dominance collapsed, as did the Soviet Union itself. Germany was reunited on Western terms: liberal and Atlanticist from the Moselle to the Oder. The deft diplomacy of President George H.W. Bush and Brent Scowcroft over-mastered the objections of Moscow—and not just Moscow. “I love Germany so much that I am grateful there are two of them” went a quip usually attributed to the French novelist Francois Mauriac. For many in London and Paris, Margaret Thatcher and Francois Mitterrand very much included, the quip was no joke. Much of the present malfunctioning architecture of the European Union—including the lethal euro currency—originated in French demands for reassurance that reunification would lead to “a European Germany, not a German Europe. More:
Report: Trump to reverse Obama’s Cuba policy
President Donald Trump plans on reversing a set of policies softening relations with Cuba, according to a report from The Daily Caller. The U.S.-Cuba Trade and Economic Council, a non-partisan group, said the Trump administration is preparing to announce the changes to Obama-era policies in a June speech in Miami, according to the Daily Caller. The report cites two unnamed sources who said a bipartisan trio of senators — Marco Rubio (R-Fla.), Bob Menendez (D-N.J.), and Mario Diaz-Balart (R-Fla.) — pushed for the reversal. Obama, who became the first U.S. president to visit Cuba in almost a century last year, put in motion a series of policies to thaw relations with the Communist island nation, which had been a strategic burden throughout the Cold War. While Obama was able to soften regulation on some kinds of trade, business and travel, Congress has refused to lift the 57-year-old embargo. The Trump administration had put the Cuba policy under review upon taking office. The Daily Caller report surfaced days after Trump met with Pope Francis, who facilitated the deal between Obama and Cuban President Raul Castro.
The $50 Billion Question: What Makes a Bank Big?
There’s a magic line in banking, and it is $50 billion. That is the boundary that separates the big banks from the small. Firms with assets in excess of that figure face stricter rules on capital, mergers and other business, thanks to the Dodd-Frank Act of 2010. Now, as the Trump administration and Republican-controlled Congress look to overhaul Dodd-Frank, one of the few points of bipartisan agreement is that $50 billion isn’t the right number. Lawmakers can’t agree on a better one, though. Banks over the threshold are getting used to the fact that, despite President Trump’s promises to deregulate the banking industry, even an unpopular provision is hard to overturn in the current polarized political environment.
To many banks and industry analysts, change seems commonsensical. The Dodd-Frank rule was implemented to help prevent another financial crisis. But as Treasury Secretary Steven Mnuchin recently told the Senate Banking Committee, banks with $50 billion in assets don’t pose “the same risk as a bank that has $750 billion or $2 trillion.” Even many officials known for sparring with banks, including Daniel Tarullo, the Federal Reserve’s former top banking regulator, support raising the limit. So does Barney Frank, the former Democratic congressman who with former Democratic Senator Chris Dodd was the driving force behind Dodd-Frank. “All numbers are arbitrary, and in the rush, $50 billion seemed like a much bigger number,” Mr. Frank said in a recent interview. Widespread support means Congress theoretically could act to change at least this part of Dodd-Frank. At the recent banking committee hearing, Chairman Mike Crapo (R., Idaho) made a point of calling the $50 billion threshold “one area I would like this committee to address.” Mr. Mnuchin said Treasury would provide recommendations to the president in early June. The trick will be reaching a compromise on what should come next. More:
Drug Lobbyists’ Battle Cry Over Prices: Blame the Others
WASHINGTON — Hundreds of independent pharmacists swarmed the House and Senate office buildings one recent afternoon, climbing the marble staircases as they rushed from one appointment to the next, pitching lawmakers on their plan to rein in the soaring drug prices that have enraged American consumers. As they crowded into lawmakers’ offices, describing themselves as the industry’s “white hats,” they pointed a finger at pharmacy benefit managers like Express Scripts and CVS Health, which handle the drug coverage of millions of Americans. “Want to reduce prescription drug costs?” the pharmacists argued during their visits. “Pay attention to the middlemen.” A civil war has broken out among the most powerful players in the pharmaceutical industry — including brand-name and generic drug makers, and even your local pharmacists — with each blaming others for the rising price of medicine. It is an industry that was already spending nearly double what other business sectors in the United States economy allocate on lobbying, and those sums continue to rise. President Trump has only heightened anxiety by accusing the drug industry of “getting away with murder,”even though he has not weighed in with his own proposal. For now, lawmakers are facing an almost daily assault. “Everyone is very eager to maximize their profits and get a piece of the pie, and sorting it all out is complicated,” said Senator Susan Collins, Republican of Maine. The question is whether a rare confluence of public outrage, political will and presidential leadership can bring about a meaningful change that will slow the drain on consumers’ pocketbooks. “You remember that old photograph of the Three Stooges, their faces cracked sideways and they are pointing at each other?” asked Chester Davis Jr., the president of the Association for Accessible Medicines, sitting in the basement cafeteria of the Russell Senate Office Building at the start of a day in which he would make his own pitches on behalf of generic drugmakers. “Everyone is doing the finger-pointing, when in fact there is a lot of blame to go around.” More:
The Business of Litigation Finance Is Booming
The buying and selling of lawsuits—a decade-old practice in the U.S. known as litigation finance—continues to expand. Consider Pierce Sergenian, a six-lawyer trial boutique started this year by John Pierce and David Sergenian, refugees from the litigation powerhouse Quinn Emanuel Urquhart & Sullivan. The new firm already has an impressive array of contingency-fee cases, where lawyers get paid out of any trial or settlement award. The portfolio includes a high-profile suit against Snap Inc. filed on behalf of a former employee who alleges he was fired for refusing to help executives exaggerate the user base of Snapchat, the disappearing-image app. The only way Pierce Sergenian could afford to handle the 10 cases it has on board is by selling a separate interest in the potential recoveries to a financier, John Pierce explains. Pravati Capital, a litigation funder in Scottsdale, Arizona, has promised to underwrite the law firm’s current and future contingency cases. In return, Pravati will receive its own cut of any damages or settlement amounts–before clients collect anything. Specific dollar figures are confidential, but Pierce says Pravati has agreed to provide the firm with up to an eight-figure sum. Pravati’s chief executive, Alex Chucri, didn’t return a phone message seeking comment. The financing of Pierce Sergenian marks the first time that a law firm and funder have gone public about the existence of such a portfolio-investment arrangement. “It sends a message to deep-pocketed defendants and their law firms that we can go up against the biggest and best,” Pierce says. “It levels the playing field.” If that sounds appealing—more suits on behalf of the proverbial little guy—then the spread of litigation finance should bring cheer. More:
A Texas Republican called ICE on protesters. Then lawmakers started to scuffle.
Lawmakers scuffled on the floor of the Texas House of Representatives on Monday after a Dallas-area Republican told Democrats that he called Immigration and Customs Enforcement officers on protesters in the House gallery. “We were just on the floor talking about the SB4 protests, and [state Rep.] Matt Rinaldi came up to us and made it a point to say, ‘I called (ICE) on all of them,’ ” state Rep. Philip Cortez (D) said. “And this is completely unacceptable. We will not be intimidated. We will not be disrespected.” The protesters were apparently chanting and waving signs against Senate Bill 4, the controversial Texas legislation that Gov. Greg Abbott (R) signed into law this month. It bans sanctuary cities, allows police to question anyone they detain about their immigration status, and compels local officials to comply with federal requests to detain individuals in state and local law enforcement facilities. The law was passed amid a national conversation about immigration enforcement priorities and promises from the Trump administration to aggressively pursue and deport undocumented immigrants. Signing SB4 into law was seen as a big victory for Texas Republicans, who had tried unsuccessfully to pass a ban on sanctuary cities in each legislative session since 2011. Texas Democrats reacted to the bill’s passage with alarm; one lawmaker went on a hunger strike. Video of the scuffle shows lawmakers pushing one another, yelling and gesticulating. Later, Democrats said, Rinaldi repeatedly got in their faces and cursed at them. More:
White Collar Watch: When ‘Political Intelligence’ Meets Insider Trading
A case involving insider trading charges based on government information dispensed by a “political intelligence” operative raises interesting questions about how some of the tricky rules for proving the offense will be applied when information is leaked from a federal agency rather than a corporation.
An indictment filed in United States District Court in Manhattan accuses David B. Blaszczak of exploiting his friendship with Christopher M. Worrall, who held a senior staff position at the Centers for Medicare and Medicaid Services, to learn about impending changes in Medicare reimbursement that would affect health care companies. Mr. Blaszczak then passed the information, the indictment says, to Deerfield Management, a hedge fund firm that was a client of his consulting firm. Two Deerfield partners, Theodore J. Huber and Robert Olan, have been charged along with Mr. Blaszczak and Mr. Worrall with conspiracy, securities fraud, wire fraud and theft of government property. A third partner, Jordan B. Fogel, pleaded guilty to charges and is cooperating with prosecutors. All the defendants except Mr. Olan were also sued by the Securities and Exchange Commission. Lawyers for Mr. Huber and Mr. Olan have denied that their clients engaged in any wrongdoing. The Justice Department accuses Mr. Worrall of leaking information to Mr. Blaszczak about impending cuts to the rates that Medicare pays for certain treatments. Mr. Blaszczak had a number of clients paying for his access to political intelligence about an important program that spends as much as $1 trillion a year.
Trump administration plans to minimize civil rights efforts in agencies
The Trump administration is planning to disband the Labor Department division that has policed discrimination among federal contractors for four decades, according to the White House’s newly proposed budget, part of wider efforts to rein in government programs that promote civil rights.
As outlined in Labor’s fiscal 2018 plan, the move would fold the Office of Federal Contract Compliance Programs, now home to 600 employees, into another government agency in the name of cost-cutting.
The proposal to dismantle the compliance office comes at a time when the Trump administration is reducing the role of the federal government in fighting discrimination and protecting minorities by cutting budgets, dissolving programs and appointing officials unsympathetic to previous practices. The new leadership at the Environmental Protection Agency, for instance, has proposed eliminating its environmental justice program, which addresses pollution that poses health threats specifically concentrated in minority communities. The program, in part, offers money and technical help to residents who are confronted with local hazards such as leaking oil tanks or emissions from chemical plants.
Under President Trump’s proposed budget, the Education Department’s Office of Civil Rights — which has investigated thousands of complaints of discrimination in school districts across the country and set new standards for how colleges should respond to allegations of sexual assault and harassment — would also see significant staffing cuts. Administration officials acknowledge in budget documents that the civil rights office will have to scale back the number of investigations it conducts and limit travel to school districts to carry out its work. More:
It may be time to disobey the commander in chief
In the space of a week, Trump fired FBI Director James Comey, lied about why he did it, then admitted in a TV interview that, actually, he prematurely terminated Comey’s 10-year term because he was annoyed with the FBI’s ongoing investigation into his campaign’s ties to Russian officials. It appears that Trump specifically asked Comey to end the investigation after he fired Michael Flynn, his first national security adviser, ostensibly because Flynn had got caught in a lie to the vice president about a conversation with the Russian ambassador. According to Comey’s notes on the conversation, Trump said, “I hope you can let this go.” Comey didn’t let it go. And one suspects that’s why he’s now updating his LinkedIn profile. Meanwhile, it has emerged that Trump asked the director of national intelligence and the director of the National Security Agency to deny that the FBI was investigating his campaign. The whole affair reeks of obstruction of justice, which has not gone unnoticed by Rod Rosenstein, the deputy attorney general, who appointed a special counsel to investigate the mess last week. “We cannot allow this to go unchecked,” said Al Green, a Democratic Congress member from Houston, who called for the president’s impeachment from the floor of the House. “The president is not above the law … I am a voice in the wilderness, but I assure you that history will vindicate me.” Comey’s firing is the latest and worst in a string of outrageous abuses of office. Let’s be clear: The president of the United States asking an FBI director to end an investigation into the activities of his own campaign, and his own administration, and then firing the FBI director — who is meant to be politically independent — because he refused to stop doing his job, is a brazen assault on the rule of law. It’s a monumental breach of the laws and norms that protect citizens from the tyrannical abuse of violent state power. More:
Reports: White House communications director Mike Dubke resigns
White House communications director Mike Dubke has resigned, according to media reports.
Dubke, who has been in the role for three months, handed in his resignation on May 18, Axios reported.The Washington Post and Politico also reported the development. Axios said Dubke offered to stay until end of Trump’s first overseas trip as president. Trump returned to Washington on Saturday from a nine-day foreign trip to Saudi Arabia, Israel, Vatican City, Brussels and Italy. Dubke’s last day as White House communications director has not been set, Axios reported.
Four Senators to Watch in the Trump-Russia Investigation
WASHINGTON — They are a disparate foursome: the chamber’s leading Republican centrist, a minister who embraces public service as a calling, a seasoned dealmaker and a high-profile presidential contender. These four Republican senators — Susan Collins of Maine, James Lankford of Oklahoma, Roy Blunt of Missouri and Marco Rubio of Florida — are emerging as a bloc integral to the Senate Intelligence Committee’s investigation into Russian meddling in the 2016 presidential election. The investigation is widely considered the premier inquiry, the one with the necessary jurisdiction and the best chance of producing a credible outcome. These four senators loom large as a crucial element in getting there. Despite early skepticism about the Republican-led panel’s commitment to the investigation, the four have made it clear that they are determined to see it through to a conclusion that would satisfy the public and their colleagues in both parties. To get there, they will have to slog through thousands of pages of raw intelligence held by the C.I.A. and devote untold hours to grinding committee work behind closed doors. “This is not about the president, this is about the presidency,” said Mr. Lankford, who was a longtime Baptist youth minister before he entered politics. “This is about where we are as a nation.”
This is not to say that other members of the panel aren’t engaged. The committee’s seven Democrats are certainly interested in finding out whether Russians colluded with the Trump campaign and helped to elect him. Senator Richard M. Burr, Republican of North Carolina and the chairman of the panel, has shown an increasing zeal for pursuing the question after an uncertain start. He and Senator Mark Warner of Virginia, the committee’s ranking Democrat, have forged a solid working relationship. Three other Republicans are also playing a role: John Cornyn of Texas, who as the No. 2 Senate Republican brings a leadership perspective to the investigation, Jim Risch of Idaho and Tom Cotton of Arkansas. More:
Boehner: Trump has been a ‘complete disaster’
Former House Speaker John Boehner said earlier this week that Donald Trump’s presidency so far has been “a complete disaster” and that the billionaire-turned commander in chief is still learning the job.
“Everything else he’s done [in office] has been a complete disaster,” Boehner said during a question-and-answer session at a conference in Houston on Wednesday. “He’s still learning how to be president.”
The former GOP speaker, whose remarks were initially reported by the energy-sector publication Rigzone, said he and Trump had been friends for 15 years and that the two had played golf together multiple times. Still, Boehner said he “never envisioned him” becoming president. Pressed further about Trump’s still-nascent administration, Boehner praised the president for his handling of international affairs and foreign policy, especially his aggressive stance toward the Islamic State. Boehner also tamped down talk of impeachment, calls for which have grown among House Democrats amid the swirling controversy of multiple investigations into the possibility of collusion between the Russian government and individuals with ties to Trump. “Talk of impeachment is the best way to rile up Trump supporters,” Boehner said. “Remember, impeachment is not a legal process; it’s a political process.” The former speaker said the president “did what he could” on legislation to repeal and replace Obamacare, perhaps the president’s most prominent campaign promise, but added Trump should have instead sought to repair his predecessor’s signature health care legislation. Talk of tax reform, another legislative priority for Trump and the Republican-controlled Congress, is just “happy talk,” Boehner said. “I was a little more optimistic about it early in the year; now my odds are 60/40.” The former speaker seemed content with his life as a retired politician and was quick to shoot down any talk of a future presidential bid. “I wake up every day, drink my morning coffee and say hallelujah, hallelujah, hallelujah,” Boehner said. “I don’t want to be president. I drink red wine. I smoke cigarettes. I golf. I cut my own grass. I iron my own clothes. And I’m not willing to give all that up to be president.”
Inside Alabama’s Strange Senate race
Luther Strange’s tenure in the Senate is not even four months old, the Republican having been handed his Alabama seat by a scandal-plagued governor who resigned on the cusp of impeachment by lawmakers in Montgomery. But Republicans in Washington are going all out to rescue Strange in his campaign this year, treating him like a beloved Senate veteran. The multimillion-dollar push in a state that Democrats have almost no chance of winning is intended to help Strange muscle through a crowded primary field that includes two bomb-throwing conservatives apt to cause Mitch McConnell some major headaches should they defeat the appointed senator. The Senate Leadership Fund, the powerful super PAC with close ties to the majority leader, has already reserved $2.65 million in TV airtime and is pledging up to $10 million in the conservative state. The National Republican Senatorial Committee has warned political consultants about working for Strange’s competitors. One of Strange’s challengers is already complaining that McConnell is stifling his fundraising. And influential GOP senators are sending not-so-subtle signals that they aren’t eager to have anyone but Strange return to the Senate after the Aug. 15 primary and a potential runoff in September. “I won’t mention any names,” said Senate Majority Whip John Cornyn (R-Texas), also a two-time NRSC chairman. “But we do need people who are interested in being constructive, because obviously we have a razor-thin margin of 52 [votes] and we can’t go backwards. We need to go forward.” The rally behind Strange, a former Tulane University basketball player whose 6-foot-9-inch profile is befitting of his “Big Luther” moniker, is in one respect unsurprising: The GOP Conference has a longstanding policy of defending its incumbents. That standard will play out in other states this cycle where Republicans are facing primary threats, such as Arizona and Mississippi. More:
Breaking Down Bell’s Budget
Last week, Mayor William Bell revealed his proposed operating budget for the fiscal year 2018. At $428 million, the budget is Birmingham’s largest ever, which appeared to be a point of pride for the mayor. “The city of Birmingham continues to show strong signs of economic growth, allowing us to present the largest budget ever in the city’s history,” Bell said in a statement. That growth, which Bell attributed to “aggressive business recruitment and retention,” meant that the budget increased by approximately $3.1 million from the previous year’s adopted budget of $424,858,869. A degree of contention almost always surrounds proposed budgets. Last year, Bell and the city council spent months negotiating the FY 2017 budget’s expenditures. That budget was eventually passed on August 30 — 61 days after the start of the fiscal year. This year, with both Bell and the city council up for re-election, that debate might be even more prolonged. A budget hearing, open to the public, will take place at city hall at 4:30 p.m. on May 31. The 2018 fiscal year begins on July 1. But what is in the proposed budget? How is the growth the mayor spoke of reflected in spending choices? And what are the points of contention that will likely influence not only the budget talks but the upcoming municipal elections? More:
What is wrong with Fairhope? Fast growing city’s politics filled with tension and division
Fairhope’s growing pains would be the envy of almost any city in Alabama. Yet the city’s political unraveling has been swift and fierce, as squabbles among city leaders have recently led to one administrator filing a simple assault complaint against the mayor. On the surface, a long ago wish of a utopian community that Fairhope’s founders envisioned more than 120 years ago, seems to have been realized. The relatively low-crime community is a popular traveler destination thanks to quaint shops, cozy cafes, popular festivals and historic neighborhoods an eclectic mix of authors and artists call home.
And the secret appeal seems to be out: The city, according to last week’s U.S. Census figures, is the fastest growing community in Alabama’s fastest growing county. Yet the message out of city hall for the past six months has been one of tense friction, shouting matches and disappointment. It’s also one of potential violence: Last week, the city’s human resources director filed a simple assault claim against the mayor for an alleged incident that took place at the end of last year. That incident, observers have noted, underscores the cracks in city government that have pestered Fairhope since November when Karin Wilson, a political novice and independent bookstore owner, was sworn in as the new mayor. Joining her were three new council members – Robert Brown, Jay Robinson and Jimmy Conyers. The three newcomers were largely voted in as part of a voter revolt against the former council, which endorsed a controversial apartment complex last year north of downtown Fairhope. “I don’t think anyone anticipated this to be happening from Day 1,” said Brown, referring to the squabbling that has highlighted most of the meetings since he took office. Said Conyers: “I think I’m a little surprised. I wasn’t anticipating as much tension. I kind of went into it, certainly, maybe a little naive. I figured that we would all work together well.” More:
Confederate ‘catechisms’ lay blame for Civil War on Lincoln, not slavery
Sometimes it seems like the impassioned people who want to preserve Confederate monuments across the South are reading a different history book than the rest of the nation. In fact, they are. A decades-old booklet called the “Confederate Catechism” lays out core beliefs of Southern heritage groups including the Sons of Confederate Veterans, which sells the book and has defended rebel monuments in New Orleans and elsewhere. Some of those monuments were erected by the United Daughters of the Confederacy, which has programs to educate children on its version of Southern history. Here is a look at Confederate catechisms — what they teach, how they developed and how they are used today:
WHAT WAS THE CIVIL WAR ABOUT? Certainly not slavery, according to the most popular version of “A Confederate Catechism,” which is promoted by the Sons of Confederate Veterans on its website.
“Both from the standpoint of the Constitution and sound statesmanship, it was not slavery, but the vindictive, intemperate anti-slavery movement that was at the bottom of all the troubles,” states the 12-page text, written in question-and-answer form. Such claims don’t square with much of today’s scholarship. To critics, they seem at odds with the secession documents issued by Southern states, some of which specifically mentioned slavery as a reason for the dispute that led to formation of the Confederate States of America in 1861. Mississippi’s declaration said the state’s position was “thoroughly identified with the institution of slavery.” More:
Las Vegas casino posts early point spread for 2017 Iron Bowl
At least one Las Vegas casino expects the 2017 Iron Bowl to be a one-score game. The South Point casino in Las Vegas has Alabama as a 3.5-point favorite at Auburn for this year’s meeting of the rivalry, which will be Nov. 25 at Jordan-Hare Stadium. The Iron Bowl was among 65 college football games the casino released early odds for on Monday. There is a $1,000 betting limit on each of the games listed by South Point casino, which lists Auburn as a 36-point favorite over Georgia Southern in the season opener on Sept. 2. Last year, South Point’s early Iron Bowl line had Alabama favored by 18 points, which ended up being exactly accurate in the 30-12 Crimson Tide win. Alabama has won the last three Iron Bowls, beating Auburn 30-12 at Bryant-Denny Stadium last season, 29-13 at Jordan-Hare Stadium in 2015 and 55-44 at Bryant-Denny Stadium in 2014.
How Stephen Miller Rode White Rage from Duke’s Campus to Trump’s West Wing
At the young age of 31, Stephen Miller has his own office in the West Wing and the President’s ear. He also has held a shocking worldview since he was a teenager. From his writings on the 2006 Duke lacrosse-team rape scandal, which gave the then–college junior national media exposure, to an alleged association with a white-nationalist advocate, William D. Cohan dives deep into Miller’s tumultuous past. See full article:
The Politics of Clan: The Adventures of Jared Kushner
Jared Kushner deserves a bit of sympathy. All his life he’s been serving his father or father-in-law. All his career he’s been thrust into roles he’s not ready for. His background has ill prepared him for national government. Now he is in a realm where his instincts seem to lead him astray and where there’s a chance he will end up in disgrace and possibly under indictment. The Kushner family drama begins in the Holocaust. In 1941, Rae Kushner was living in Belarus and was among the teenage girls selected to clean blood from the cobblestones after one of the Nazi mass executions. Rae and other family members tunneled out from the ghetto and joined an armed resistance camp. After the war they eventually made it to New Jersey, where her husband set up a successful construction business that flourished under their son. So far this is an inspiring story of family struggle and immigrant hustle. But as riches rained down on the family, so did betrayal. The feud between Jared’s father and uncle was over grabbing family money, and from the various accounts it’s hard to tell who betrayed the family most. We do know that Jared’s father, Charles, hired a prostitute to have sex with his brother-in-law so he could send a tape of the act to his sister, and ended up pleading guilty to 18 felony counts. “I believe that God and my parents in heaven forgive me for what I did, which was wrong,” Charles once told an interviewer, according to Politico. “I don’t believe God and my parents will ever forgive my brother and sister for instigating a criminal investigation and being cheerleaders for the government and putting their brother in jail because of jealousy, hatred and spite.” Jared’s brother was very young while all this happened and has since gone on to a fantastically successful independent career. But Jared interrupted his studies to take over the family business. He lived out his family-first devotion, his loyalty to kith and kin. More:
TRUMP’S GROWTH FANTASY — POLITICO’s Ben White: “President Donald Trump is betting much of his first term on a bold promise that tax cuts, revamped trade deals and deregulation will unleash the kind of sustained economic boom the United States hasn’t seen since the dot-com days of the late 1990s.
“He faces a big problem as he focuses his domestic agenda around that premise: Even if he does manage to push big tax cuts through Congress, many economists argue that the administration’s predictions — for nearly a decade of at least 3 percent economic growth — are wildly optimistic and unlikely to materialize.”
BRIEF BURST? — “Even many conservative economists argue that Trump’s plans could, at best, produce a brief burst of faster growth followed by a quick return to the reality of an economy slowed by an aging population and a lack of worker productivity growth.
“‘Trump’s plans alone are not going to get us to consistent 3 percent growth,’ said Kent Smetters, a former George W. Bush administration official and professor at the University of Pennsylvania’s Wharton School.
“He estimates Trump’s initiatives could develop a burst of growth that lasts a couple of years, followed by a return to the recent trend of about two percent growth—and perhaps lower due to the federal debt load being built up.”
THE WAY WE LIVE NOW — “The U.S. economy hasn’t grown at 3 percent or better for seven straight years in many decades. The Ronald Reagan-era boom of the 1980s saw just six years of that kind of growth, and that followed a recession. The Internet boom of the late 1990s produced just five years of growth at 3 percent or better.
“And the U.S. economy is very different now than it was before those two booms. The country is in the eighth year of an economic expansion — rather than coming off a recession — and now faces a Federal Reserve hiking interest rates. … And unlike before other big growth expansions, the labor market appears largely tapped out with joblessness at just 4.4 percent in April and productivity growth stalled.” Read more.
SPEAKING OF TAX CUTS — WSJ’s Richard Rubin: “The boldest ideas for changing the nation’s tax code are either dead or on political life support, as the Republican effort in Congress to reshape the tax system moves much more slowly than lawmakers and their allies in business had hoped. The clear winner, so far, is the status quo.
“Republicans, who control both chambers, are scouring the tax code, searching for ways to offset the deep rate cuts they desire. But their proposals for border adjustment—which would tax imports—and for ending the business interest deduction and making major changes to individual tax breaks for health and retirement have all hit resistance within the party” Read more.
TORY LEAD SHRINKS IN THE U.K. — Pantheon’s Samuel Tombs: “The Conservatives’ opinion poll rating has fallen dramatically over the last 10 days or so, pushing sterling down and forcing investors to confront the possibility that Theresa May might not increase her majority much from the current paltry 17 MPs.
“The average of the last 10 opinion polls puts support for the Conservatives at 45%, only 10% ahead of Labour. What’s more, the lead has narrowed quickly, with one poll last Friday putting the Tories only 5% ahead of Labour.
“The Tories had a 6.5% lead over Labour in 2015, so if the latest polls are right, its now conceivable that the Tories could lose their majority … [T]he turning point appears to have been the launch of the Tories’ manifesto, which put forward unpopular proposals to fund social care”
MERKEL GOES BOLD — FT’s Guy Chazan: “Angela Merkel is not one for bold statements that ricochet round the world. Her speeches tend to be bloodless, understated and forgettable. But that all changed on Sunday. At a campaign event in a sweaty Munich beer tent Germany’s chancellor suggested that the US was no longer a reliable partner. Europe should pay more attention to its own interests ‘and really take our fate into our hands’.
“Many, even in her own CDU party, were stunned. ‘For Merkel, that was an unusually strong statement,’ said one official. ‘Trump’s only been president for four months.’ Parsed by journalists, commentators and politicians across the world, the speech seemed to herald a sea change in transatlantic relations — an acknowledgement that with Donald Trump, the US-European alliance would never be the same again” Read more.
DRIVING THE DAY — Personal income and spending at 8:30 a.m. both expected to rise 0.4 percent … Case-Shiller Home Prices at 9:30 a.m. expected to rise 0.8 percent … Consumer confidence at 10:00 a.m. expected to dip to 119.9 from 120.3 … White House press secretary Sean Spicer is back before the podium this afternoon at 2:00 p.m.
ASIA DIPS — Bloomberg: “Asian equities fell in thin trading and the euro slipped after Mario Draghi’s dovish message to the European Parliament and as investors assessed the path for higher U.S. borrowing costs.
“Stocks in Japan retreated as the yen strengthened. Hong Kong is on holiday Tuesday and markets in China are shut for a second day after the U.K. and U.S. were closed Monday, depressing volumes and limiting price movements. The euro dropped for a fourth straight day … The key challenge for investors remains gauging the ability of the world’s economy to withstand rising borrowing costs” Read more.
HOUSING FINANCE DEAL IN SIGHT? — POLITICO’s Zachary Warmbrodt: “With momentum building behind a potential overhaul of the housing finance system, some key senators are working to reach a deal before the end of this year. Senate Banking Chairman Mike Crapo is aiming to have a bill ready to go in the coming months and is planning to hold a hearing after Congress returns from the Memorial Day recess.
“The Idaho Republican co-authored a 2014 bill that was the Senate’s last major attempt to address the fate of mortgage giants Fannie Mae and Freddie Mac … At the same time, Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), who were important players in driving the legislation four years ago, are holding talks with committee members as they try to advance a new deal” Read more.
COHN ON COAL — Via ABC: “The president’s chief economic adviser is casting doubt on the future of U.S. coal, saying it ‘doesn’t really make that much sense anymore as a feedstock,’ directly contradicting President Donald Trump’s repeated promises to revive the struggling coal industry.
“Briefing reporters Thursday night on Air Force One, Gary Cohn singled out natural gas as ‘such a cleaner fuel.’ By exporting more natural gas and investing in wind and solar energy, the U.S. ‘can be a manufacturing powerhouse and still be environmentally friendly,’ Cohn said. Cohn’s comments were at odds with his boss, who campaigned as coal’s champion” Read more.
GDP REWIND — Hamilton Place Strategies cheat sheet on Friday’s increase in Q1 GDP to 1.2 percent from 0.7 percent.
TIGHT MARKET MEANS JOBS FOR EX-CONS — Bloomberg’s Steve Matthews: “Shea Rochester, who once spent a month in jail on an assault charge that was later dropped, is now wanted in a different way. After a few months of job hunting, the 32-year-old recently got two offers in the same week. He accepted a $14.48-an-hour position at a Georgia factory that makes shortening and cooking oil.
“As U.S. unemployment falls to the lowest level in a decade … people with blemishes on their resumes are getting second looks by employers trying to fill vacancies that currently stand at a near-record 5.7 million. … While the government doesn’t track jobs for those with arrest records, people are increasingly getting hired”
NEW NAMES AT THE SEC — NYT’s Matthew Goldstein and Ben Protess: “The nation’s top securities regulator is going to have a decidedly Sullivan & Cromwell look to it. Jay Clayton, who left Sullivan & Cromwell, the prominent New York law firm, to become the chairman of the Securities and Exchange Commission, is expected to tap his former colleague Steven R. Peikin to serve as the commission’s co-director of enforcement …
“Mr. Clayton is expected to also name Stephanie Avakian, the agency’s acting enforcement director and a former white-collar defense lawyer, as co-director with Mr. Peikin … The hiring decisions are not final but could be announced as soon as this week. …
“The personnel moves — two former defense lawyers taking over a top Wall Street oversight role — may reinforce a perception from Democrats and consumer groups that a certain coziness exists between the defense bar and the regulators they face off against”
BANK REGS KILLING BANKS? — ABA’s Rob Nichols in the L.A. Times: “In 1994, nearly 500 banks were headquartered in California. Today, there are fewer than 180. By the end of the year, if current trends hold, Californians will have only one-third the number of banks to choose from for their mortgage, small business and personal savings needs than they did just a couple of decades ago.
“There are a few reasons for this disturbing trend, which is happening across the country. But the most important one — the reason I hear more than any other from bankers who decide to merge, sell or close their institution — is the increasing federal regulatory burden.” Read more.
CREDIT SCORES HIT RECORD HIGH — WSJ’s AnnaMaria Andriotis: “Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low—a potential boon for lending and economic activity. Consumers’ improving fortunes reflect falling unemployment and continued, if lackluster, economic growth.
“An added benefit: The passage of time since the recession and housing meltdown are helping household balance sheets. In ever-growing numbers, the worst personal financial setbacks, namely foreclosures and bankruptcies, are falling off Americans’ credit reports. … The average credit score nationwide hit 700 in April, up one point from last fall, according to new data from Fair Isaac Corp. That is the highest since at least 2005” Read more.
IMMIGRANTS’ IMPACT ON THE ECONOY — NYT’s Patricia Cohen from Storm Lake, Iowa: “The forces that have helped transform this snug lakeside town in northwestern Iowa … have created a complex swirl of economic successes and hardships, optimism and unease. Fierce global competition, agricultural automation and plant closures have left many rural towns struggling for survival.
“Yet Storm Lake, hustled along by the relentless drive of manufacturers to cut labor costs and by the town’s grit to survive, is still growing. However clumsily at times, this four-square-mile patch has absorbed successive waves of immigrants and refugees — from Asia, from Mexico and Central America, and from Africa.” Read more.
BANKS COOL OFF ON AUTO LOANS — FT’s Ben McLannahan: “Big banks are throttling back from the $1.2tn US car loan market, fearing that consumers have taken on more debt than they can handle. Lenders piled into the sector in the years after the financial crisis, as low defaults and an improving economy encouraged them to focus on a market that performed relatively well as mortgages soured. Total loans across the industry rose to $1.17tn at the end of the first quarter, according to the New York Federal Reserve, up almost 70 per cent from a trough in 2010.
“But data released last week by the [FDIC] showed the first sequential drop in car loans outstanding at commercial banks in at least six years. The total slipped $1.6bn to $440bn from the fourth quarter of last year to the first of this, suggesting that banks — wary of repeating the mistakes of the subprime mortgage crisis — have been spooked by rising delinquencies and the threat of litigation” Read more.
INVESTIGATORS WANT ANSWERS FROM KUSHNER — NYT’s Matthew Rosenberg, Mark Mazzetti and Maggie Haberman: “Jared Kushner, the president’s son-in-law and senior adviser, was looking for a direct line to President Vladimir V. Putin of Russia — a search that in mid-December found him in a room with a Russian banker whose financial institution was deeply intertwined with Russian intelligence, and remains under sanction by the United States.
“Federal and congressional investigators are now examining what exactly Mr. Kushner and the Russian banker, Sergey N. Gorkov, wanted from each other. The banker is a close associate of Mr. Putin, but he has not been known to play a diplomatic role for the Russian leader. That has raised questions about why he was meeting with Mr. Kushner at a crucial moment in the presidential transition” Read more.
Nada. Zip. Zilch. Zero. Members are enjoying their first day of recess – particularly welcome for the workaholics in the Senate who were busy for six straight weeks processing nominations.