Securities Attorney Briefing 9 February 2017


Defense, intelligence officials caution White House on terrorist designation for Iran’s Revolutionary Guard

Senior defense and intelligence officials have cautioned the White House that a proposal to designate Iran’s Revolutionary Guard Corps as a foreign terrorist organization could endanger U.S. troops in Iraq and the overall fight against the Islamic State, and would be an unprecedented use of a law that was not designed to sanction government institutions. Defense and intelligence concerns have been expressed at the highest levels over the past several days, as the White House was preparing to roll out an executive order dealing with both Iran’s Islamic Revolutionary Guard Corps and the Muslim Brotherhood, according to administration officials who spoke on the condition of anonymity because they were not authorized to discuss the sensitive matter. The order would direct the State Department — in charge of the designation process — to move toward declaring them terrorist organizations. More:

Senators move to limit Trump on Russia sanctions

A bipartisan group of senators is moving to check President Trump on Russia by bolstering congressional oversight before he can lift sanctions.  Sens. Lindsey Graham (R-S.C.), Ben Cardin (D-Md.), Marco Rubio (R-Fla.), Sherrod Brown (D-Ohio), John McCain (R-Ariz.) and Claire McCaskill (D-Mo.) introduced legislation Wednesday setting up a period of congressional oversight before Trump could roll back financial penalties. The legislation, known as the Russia Sanctions Review Act, would require Trump to notify Congress before he lifts sanctions tied to the invasion of Ukraine or Russia’s meddling in the White House race. “To provide relief at this time would send the wrong signal to Russia and our allies who face Russian oppression. Sanctions relief must be earned, not given,” said Graham, a frequent GOP critic of the president. Lawmakers would have 120 days to pass a joint resolution of disapproval blocking Trump from lifting the sanctions. Trump also would not be able to lift sanctions while Congress was reviewing the proposal. Cardin told reporters on Wednesday that the legislation wasn’t meant to punish Trump, but would help bolster congressional input and understanding of Trump’s policy. “It’s not an attack against President Trump,” Cardin, the top Democrat on the Foreign Relations Committee, said. “This is basically to reestablish our role.” He compared the legislation to a 2015 bill — which passed the Senate with near unanimous support — to allow lawmakers to review and potentially block the Iran nuclear deal.

McCain added that lifting Russia sanctions would send the “wrong message” to Russian President Vladimir Putin. More:

Appeals Court Rejects Immigrants’ Right to a Lawyer in Expedited Cases

Immigrants who are caught entering the U.S. illegally have no right to legal representation, a federal appeals court in San Francisco ruled on Tuesday. The Ninth U.S. Circuit Court of Appeals upheld the deportation of a Mexican immigrant who was arrested while crossing into the U.S. in 2012 and returned to his country the following day. The ruling, from a three-judge panel, came hours before a different Ninth Circuit panel was set to consider an executive order by President Donald Trump that temporary suspended travel from seven countries and halted the admission of refugees. The ruling Tuesday dealt with whether immigrants caught entering the U.S. illegally have due process rights to legal counsel under the Fifth Amendment, an issue separate from those raised in the executive-order challenge. Under a 1996 federal law, Customs and Border Protection officers can use a process called “expedited removal” to swiftly deport immigrants who are caught within 100 miles of the border without valid entry documents and who have been in the U.S. fewer than 14 days. Immigrants subject to expedited removal receive no hearing, see no judge and have no right to appeal. Nearly half of all removals from the U.S. follow this process, according to the Department of Homeland Security.​ Rufino Peralta-Sanchez, who was caught by U.S. Border Patrol agents a mile inside the U.S. border, had argued for a right to hire a lawyer to assist him during the removal process. Judge Jay Bybee, writing for a 2-1 majority, said allowing lawyers to take part in expedited removals would defeat their purpose, “exponentially increasing the cost to the government as the government must detain the alien, pay for the government’s own representation, pay for the creation of a longer record, and pay for the increased time the immigration officer must spend adjudicating such case.” The Trump administration is considering expanding eligibility for expedited removal to include immigrants who have been in the U.S. longer and are arrested farther from the U.S. border. More:

Trump on Immigration Power: I Can Do Whatever I Want

President Donald Trump argued on Wednesday that his power to limit immigration shouldn’t be challenged in courts, reading aloud in a speech from a U.S. statute giving the president authority to stop the entry of “any class” of foreigner. “You can suspend, you can put restrictions, you can do whatever you want,” Trump told a conference of police chiefs and sheriffs in Washington, after reading the law. “It just can’t be written any plainer or better.” A panel of three federal appeals court judges heard arguments Tuesday evening on whether to reinstate Trump’s temporary ban on immigration from seven predominantly Muslim nations, which was halted by a judge in Seattle. The judges on the 9th U.S. Circuit Court of Appeals in San Francisco gave no clear sense of how they would rule. A decision may come this week. But Trump made clear he is frustrated that the issue is being litigated at all, and he alluded to the 9th Circuit’s reputation for liberal leanings. “Now we’re in an area that, let’s just say they’re interpreting things differently than probably 100 percent of the people in this room,” he said. More:

Worries Grow Over Euro’s Fate as Debts Smolder in Italy and Greece

Even as global stock markets climb, worries are building among investors that long-simmering debt troubles in Greece and Italy will put additional strain on the euro. Over the past year, aggressive bond buying by the European Central Bank and encouraging signs of economic growth across Europe have helped the eurozone overcome a series of political jolts, including Britain electing to quit the European Union and Italian voters rejecting the proposals of a reform-minded government. Yet with the central bank expected to eventually unwind its purchases of government bonds and other assets, investors are increasingly becoming concerned about how Europe — and Germany, in particular — can cope with escalating debt pressures in Italy and Greece. The result has been a sell-off of European government bonds as investment funds reassess the risks of holding such securities. In Italy, for instance, some hedge funds are making direct bets that the prices of Italian bonds will collapse. The yield on Italy’s benchmark 10-year note — which moves in the opposite direction of its price — has doubled to 2.3 percent since late last fall. The yield on the equivalent Greek note has jumped to nearly 8 percent from 6.7 percent at the beginning of the year. Mario Draghi, the European Central Bank’s president, promised in summer 2012 to do whatever it took to save the euro, but the debt burdens of Italy and Greece have become progressively worse amid the stagnation of their economies. More:

CIA Memo: Designating Muslim Brotherhood Could ‘Fuel Extremism’

rump administration officials pushing to designate the Muslim Brotherhood as a foreign terrorist organization face at least one significant obstacle: analysts at the Central Intelligence Agency. CIA experts have warned that so labeling the decades-old Islamist group “may fuel extremism” and damage relations with America’s allies, according to a summary of a finished intelligence report for the intelligence community and policymakers that was shared with POLITICO by a U.S. official. The document, published internally on Jan. 31, notes that the Brotherhood—which boasts millions of followers around the Arab world—has “rejected violence as a matter of official policy and opposed al-Qa’ida and ISIS.” It acknowledges that “a minority of MB [Muslim Brotherhood] members have engaged in violence, most often in response to harsh regime repression, perceived foreign occupation, or civil conflicts.” Noting that there are branches of the group in countries such as Jordan, Kuwait, Morocco and Tunisia, it cautions that some of America’s allies in the region “probably worry that such a step could destabilize their internal politics, feed extremist narratives, and anger Muslims worldwide.” “MB groups enjoy widespread support across the Near East-North Africa region and many Arabs and Muslims worldwide would view an MB designation as an affront to their core religious and societal values,” the document continues. “Moreover, a US designation would probably weaken MB leaders’ arguments against violence and provide ISIS and al-Qa’ida additional grist for propaganda to win followers and support, particularly for attacks against US interests.” The CIA declined to comment, and the White House did not respond to a request for comment. But the document threatens to pit the agency against a president who has dismissed its intelligence assessments, and angered many in the intelligence community when he appeared before the agency’s Memorial Wall and exaggerated the size of the crowd at his inaugural address. More:

Venezuela may have given passports to people with ties to terrorism

Toledo, Spain (CNN)The stunning postcard-perfect vista surrounding Misael Lopez in this town about one hour from Madrid belies his constant anxiety, even fear. That’s because the former legal adviser to the Venezuelan Embassy in Iraq is revealing secrets he says his government doesn’t want disclosed. “I’m concerned about my safety and my family’s safety everywhere I go,” Lopez said as he walked the cobble-stoned streets of Toledo. Lopez, 41, says he reported what he says was a scheme to sell passports and visas for thousands of dollars out of the embassy and repeatedly turned down offers to get a cut of the money. But it was the response from his government — which has denied his allegations — that surprised him the most. CNN and CNN en Español teamed up in a year-long joint investigation that uncovered serious irregularities in the issuing of Venezuelan passports and visas, including allegations that passports were given to people with ties to terrorism. The investigation involved reviewing thousands of documents, and conducting interviews in the U.S., Spain, Venezuela and the United Kingdom. One confidential intelligence document obtained by CNN links Venezuela’s new Vice President Tareck El Aissami to 173 Venezuelan passports and ID’s that were issued to individuals from the Middle East, including people connected to the terrorist group Hezbollah. More:

Pentagon leader assumes new role: Turning down the temperature on Trump

As President Trump’s new Pentagon chief, Jim Mattis has a long list of tasks ahead, including devising a more aggressive campaign to combat the Islamic State and restoring military readiness after years of budget cuts. But a few weeks into his tenure, the retired general’s most visible role has been of a different sort: soothing Americans and allies unnerved by the president and some of his top advisers. Mattis, wrapping up a visit to Japan and South Korean last week, carried a message of constancy and restraint on many of the foreign policy issues whose fate has generated anxiety since Trump’s election. In Seoul, Mattis told South Korean leaders that the United States will maintain a tough stance on North Korea’s nuclear and missile programs, predicting a lasting partnership despite Trump’s repeated questioning of the two countries’ military alliance. In Tokyo, he said the United States will stick to a mutual defense treaty, allaying Japanese officials’ concerns about whether the United States will continue its backing in a territorial dispute with China. He also acted to stanch speculation that the United States, as White House officials suggested, might act precipitously against perceived threats from China and Iran, saying that military steps were not required. This week, Mattis spoke with Mexican defense leaders, highlighting cooperation in the wake of Trump’s high-profile feud with President Enrqiue Peña Nieto. More:

Laughing All the Way to Autocracy

The crisis of democracy is no laughing matter. While some dictatorships like Myanmar are finally opening up, some of the world’s biggest powers appear to be shifting toward authoritarianism. Even the United States, home to a vibrant democracy and civil society, is in the headlines because of the autocratic rhetoric of its mercurial president. But what can we do to protect open societies from being drawn into the maelstrom of authoritarianism and closed ones from becoming more dictatorial? In a recent interview with PBS, Mel Brooks, one of America’s oldest and greatest comedians and creator of the all-time classic movie The Producers, offered this opinion:  “The great thing about dictators is, you have to know, if you get on a soapbox with them, you’re gonna lose, because they have a way of spellbinding with their oratory. But if you can reduce them to ridicule, then you’re way ahead.” Brooks believes that political humor turns the table on dictators, placing them in a demeaning position by subjecting them to ridicule. This has a subversive effect that undermines their authority, and, therefore, strips them of their power. That gives comedians a silver bullet against authoritarians: jokes and laughter. It’s an intriguing thought. The only problem is that it isn’t true. o see why Brooks’s argument doesn’t hold up, we can turn to Nazi Germany. There is an overwhelming amount of evidence suggesting that political humor flourished under Adolf Hitler’s rule; in fact, quips about the dictator and his henchmen were so widespread that they inspired collections of “whispered jokes” published after the war. The editors of these books were convinced that people who had poked fun at the Nazis were part of a tacit resistance. But in researching my own book Dead Funny: Telling Jokes in Hitler’s Germany, I discovered that, in fact, the opposite was true. Berliners particularly loved jokes about their self-proclaimed Führer. “Absolutely everyone was telling them,” Carl Schulz, a wartime inhabitant of the German capital, told me in an interview. Yet the streets of Berlin were also the site of some of the war’s most vicious fighting. In some parts of the city, the Red Army had to literally fight house by house. If political humor helped undermine the morale of the Berliners, the effect was minuscule. Compared with the fear wielded by the SS and Gestapo, comedy dwindled into nothingness. In fact, much of the humor — even the ostensibly satirical — may have contributed to keeping the regime in power. Many of the jokes under the Third Reich were toothless. A typical example targeted Hermann Göring, Hitler’s portly second in charge: Hermann Göring had his medals remodeled in rubber so he won’t have to take them off in the bathtub. More:

Evangelical leaders buy ad denouncing Trump refugee ban

A group of 100 evangelical leaders will call on President Trump in a full-page newspaper ad to support refugees in the wake of his order barring refugees and people from seven predominately Muslim countries from entering the U.S. The ad, scheduled to run in The Washington Post, is signed by 100 evangelical pastors and authors, including at least one from all 50 states, CNN reported. It urges the president and Vice President Mike Pence to support refugees and expresses concern about the impacts of the president’s executive order. “As Christian pastors and leaders, we are deeply concerned by the recently announced moratorium on refugee resettlement,” the evangelicals’ advertisement says. “As Christians, we have a historic call expressed over two thousand years, to serve the suffering. We cannot abandon this call now.” The evangelical leaders acknowledge the world is dangerous, adding that they “affirm the crucial role of government in protecting us from harm and in setting in terms on refugee admissions.” More:


Judge, Citing Harm to Customers, Blocks $48 Billion Anthem-Cigna Merger

A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining. The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judgeblocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds.

Judge Jackson wrote in her order that she found the Justice Department’s arguments against the deal persuasive, and that putting Anthem and Cigna together would harm customers. “The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects,” the judge wrote. “It will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market.” More:


Supreme Court nominee Gorsuch says Trump’s attacks on judiciary are ‘demoralizing’

President Trump’s escalating attacks on the judicial branch drew denunciation Wednesday from his Supreme Court nominee, Neil Gorsuch, who told lawmakers that the attacks were “demoralizing” and “disheartening” to the independence of the federal courts. “I told him how abhorrent Donald Trump’s invective and insults are towards the judiciary. And he said to me that he found them ‘disheartening’ and ‘demoralizing’ – his words,” Sen. Richard Blumenthal (D- Conn.) said in an interview. Gorsuch “stated very emotionally and strongly his belief in his fellow judges’ integrity and the principle of judicial independence,” he added. “And I made clear to him that that belief requires him to be stronger and more explicit, more public in his views.” Gorsuch’s comments to Blumenthal were confirmed by Ron Bonjean, a member of the judge’s group of aides tasked with helping him navigate the confirmation process.

Trump has been on a days-long crusade against the judicial branch after a Seattle judge halted his controversial executive order temporarily halting the U.S. refu­gee program and barring entry from seven predominantly Muslim countries. A three-judge panel in the 9th Circuit Court of Appeals is currently deliberating on whether Trump’s executive order should be allowed to continue. More:

Jeff Sessions Confirmed as Attorney General, Capping Bitter Battle

WASHINGTON — Senator Jeff Sessions was confirmed on Wednesday as President Trump’s attorney general, capping a bitter and racially charged nomination battle that crested with the procedural silencing of a leading Democrat, Senator Elizabeth Warren. Mr. Sessions, an Alabama Republican, survived a near-party-line vote, 52 to 47, in the latest sign of the extreme partisanship at play as Mr. Trump strains to install his cabinet. No Republicans broke ranks in their support of a colleague who will become the nation’s top law enforcement official after two decades in the Senate. But the confirmation process — ferocious even by the standards of moldering decorum that have defined the body’s recent years — laid bare the Senate’s deep divisions at the outset of the Trump presidency. At the same time, the treatment of Ms. Warren, who was forced to stop speaking late Tuesday after criticizing Mr. Sessions from the Senate floor, rekindled the gender-infused politics that animated the presidential election and the women’s march protesting Mr. Trump the day after his inauguration last month. Mr. Sessions cast his final vote as a senator to note that he was present for Wednesday’s tally. His confirmation was met by applause from his colleagues, including a few Democrats, on the Senate floor. More:

Alabama Attorney General Luther Strange Named to Sessions’ Former Senate Seat

Montgomery, Ala. (AP) — Alabama’s governor on Thursday named state Attorney General Luther Strange to the U.S. Senate seat left empty by Jeff Sessions. Strange will replace Sessions, whose selection as U.S. attorney general by President Donald Trump was confirmed Wednesday. Strange, a 63-year-old lawyer and former Washington lobbyist, has been the state’s attorney general since 2011. In Strange, Bentley chose a well-connected Republican who last year announced intentions to run for the coveted Senate seat regardless of whether he got the interim appointment. His selection caps two months of jockeying and political guessing games over who would get the nod from Gov. Robert Bentley.

“Alabama has surely been well represented by Senator Sessions, and I am confident Senator Strange will serve as a fine representative for our people. His leadership on a national level, service as a statewide elected official and long record of taking on tough federal issues are the very qualities that will make him a strong conservative Senator for Alabama,” Bentley said in a statement. Strange will serve until an election is held to fill the seat for the remainder of Sessions’ term, which ends in January of 2020. Bentley has said that election will be held in the general election in 2018. Strange said he was “greatly honored and humbled to accept the appointment.” More:

The Curious Case of ‘Big Luther’ Strange

If you thought Jeff Sessions’ path to become Donald Trump’s Attorney General was dramatic, you haven’t been paying attention to politics in Sessions’ home state of Alabama, where Republican Gov. Robert Bentley is facing impeachment charges related to a sex scandal, the House Speaker just went to jail for corruption, and a former Democratic governor was released federal prison yesterday on different corruption changes. Rising mostly above the chaos has been Attorney General Luther Strange, a two-term Republican who, at 6’9, is known to most in the state as “Big Luther.” Strange’s name was included on a list of six last week whom the governor said he is considering to serve the last two years of Sessions’ unexpired term. Among the six, Strange is reportedly the governor’s favorite for the job and Strange has already announced that he’ll run for the Senate seat in 2018 no matter who the governor picks this year. The former Eagle Scout and Tulane basketball standout is well-known in Alabama legal circles. He was a partner at the Birmingham law firm of Bradley Arant Boult Cummings, the sort of white-shoe Southern firm you read about in John Grisham novels, and started his own firm after that. His campaigns for Attorney General in 2010 and 2014 focused on fighting public corruption in a state mired in it. His tenure has mostly lived up to the promises. “Luther is very well respected and very well liked,” said a Birmingham attorney who has worked with Strange. “He’s a by-the-book kind of guy.” Strange would be a natural pick for the job under nearly any circumstances, but Strange and Gov. Bentley aren’t operating under any circumstances. More:

Is the Anti-Trump ‘Resistance’ the New Tea Party?

Bob Bennett didn’t think the new president was such a bad guy. To be sure, Bennett, a Republican senator from Utah, had a lot of policy differences with Barack Obama, the Democrat who had just won the 2008 election in a landslide. But just because Bennett was a conservative and the president was a liberal didn’t mean they couldn’t find common ground, or share an interest in governing the country he believed they both loved. Bennett had always worked across the aisle, and he didn’t see why that should change.

He was as surprised as anyone by the uprising that followed—and cost him his job. The tea party, a mass movement that hadn’t even existed two years earlier, had rallied activists and dealt him a humiliating defeat from within his own party. Today, a new movement—loosely dubbed “the resistance”—has suddenly arisen in visceral reaction to Donald Trump’s election as president, with thousands taking to the streets. For those who remember the tea party, it feels like deja vu. The parallels are striking: a massive grassroots movement, many of its members new to activism, that feeds primarily off fear and reaction. Misunderstood by the media and both parties, it wreaks havoc on its ostensible allies, even as it reenergizes their moribund political prospects; they can ride the wave, but they cannot control it, and they are often at the mercy of its most unreasonable fringe. There’s no telling, in these early days, where the anti-Trump resistance will lead. But looking back at the tea party may hold a clue to what lies ahead, for both the president and his opponents. It burned hot and, in a few years, burned out, without leaving much in the way of lasting institutions—but not before it had reordered Washington and changed the DNA of the political party in its sights. More:

Trump sued over ‘1-in-2-out’ regulations order

Liberal groups are challenging President Trump’s order requiring federal agencies to repeal two regulations for every new rule they issue. The National Resources Defense Council (NRDC), Communications Workers of America, and Public Citizens sued Trump on Wednesday in the United States District Court for the District of Columbia to block the so-called “1-in-2-out” executive order.

The left-leading groups argue Trump’s Jan. 30 order exceeds his authority under the Constitution and will block important health, safety and environmental protections without taking the benefits of those rules into account. Chris Shelton, president of the Communications Workers of America, said workers shouldn’t be required to “trade off one set of job, health and safety protections in order to get protection from another equally dangerous condition.” “This order means that the asbestos workplace standard, for example, could be discarded in order to adopt safeguards for nurses from infectious diseases in their workplaces,” Shelton said in a statement. More:

U.S. Labor Dept prevails in legal challenge to ‘fiduciary’ rule

A U.S. District Court judge on Wednesday upheld the Labor Department’s controversial “fiduciary” rule governing retirement investment advice, in a stunning defeat for the business and financial services groups that had sought to overturn it. In a stinging 81-page ruling, Chief Judge Barbara Lynn for the U.S. District Court for the Northern District of Texas rejected all of the business groups’ arguments, saying the Labor Department did not exceed its legal authority and conducted a proper economic analysis to justify the rule. “The court finds the DOL adequately weighed the monetary and non-monetary costs on the industry of complying with the rules, against the benefits to consumers,” Lynn wrote. “In doing so, the DOL conducted a reasonable cost-benefit analysis.” The Labor Department’s “fiduciary” rule requires brokers to put their clients’ best interests first when advising them about individual retirement accounts or 401(k) retirement plans. It is championed by consumer advocates and retirement non-profit groups, but has been staunchly opposed by the financial services sector, which argues it will make retirement advice too costly and harm lower-income retirees in particular. The long list of groups that sued the Labor Department include the U.S. Chamber of Commerce, the Financial Services Institute, the Financial Services Roundtable, the Insured Retirement Institute and the Securities Industry and Financial Markets Association (SIFMA), among others. The ruling in the Labor Department’s favor came just a few hours after the Justice Department had petitioned the court to stay issuing a ruling because of a Feb. 3 White House request to review the rule to determine if it should be revised or scrapped. Lynn, who was appointed to the bench by President Bill Clinton, denied that request shortly after her ruling was filed.

The judge’s ruling marks a severe reproach to President Donald Trump, who just last week issued a memorandum that directed the Labor Department to go back and conduct a legal and economic analysis of the rule. More:

The Next American Farm Bust Is Upon Us

RANSOM, Kan.—The Farm Belt is hurtling toward a milestone: Soon there will be fewer than two million farms in America for the first time since pioneers moved westward after the Louisiana Purchase.

Across the heartland, a multiyear slump in prices for corn, wheat and other farm commodities brought on by a glut of grain world-wide is pushing many farmers further into debt. Some are shutting down, raising concerns that the next few years could bring the biggest wave of farm closures since the 1980s.

The U.S. share of the global grain market is less than half what it was in the 1970s. American farmers’ incomes will drop 9% in 2017, the Agriculture Department estimates, extending the steepest slide since the Great Depression into a fourth year. “You keep pinching and pinching and pretty soon there’s nothing left to pinch,” said Craig Scott, a fifth-generation farmer in this Western Kansas town. From his father’s porch, the 56-year-old can see the windswept spot where his great-grandparents’ sod house stood in 1902 when they planted the first of the 1,200 acres on which his family farms alfalfa, sorghum and wheat today. Even after harvesting one of their best wheat crops ever last year, thanks to plentiful rain and a mild winter, Mr. Scott isn’t sure how long they can afford to keep farming that ground. Costs for seeds, fertilizer and equipment climbed so high and grain prices dropped so low that he still lost more than $120 an acre. Afraid to come up short again, Mr. Scott decided last fall not to plant 170 acres of winter wheat, close to a third of the usual amount. U.S. farmers sowed the fewest acres of winter wheat this season in more than a century.

Trump blasts Nordstrom for dropping Ivanka’s clothing line

President Donald Trump blasted luxury department store line Nordstrom for dropping his daughter Ivanka Trump’s label. “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!” Trump tweeted Wednesday morning. Nordstrom announced Feb. 5 that they would stop carrying Ivanka Trump’s label due to its performance. “We’ve said all along we make buying decisions based on performance,” Nordstrom said in a statement to The Associated Press on Feb 3. “We’ve got thousands of brands— more than 2,000 offered on the site alone. Reviewing their merit and making edits is part of the regular rhythm of our business.” Nordstrom had issued an internal statement in support of immigrants following Trump’s executive order temporarily barring immigrants from seven Muslim-majority countries just three days before dropping Ivanka Trump’s line. The move also comes amid a #GrabYourWallet hashtag calling for a boycott of all Trump products.

Executive branch employees are forbidden from using their positions to promote any corporation, although the president is technically exempt. However, former Obama administration ethics czar Norm Eisen said Nordstrom should consider suing under the California Unfair Competition Law, which forbids “any unfair” business act, Eisen said. He also offered his help. Pennsylvania Senator Bob Casey also replied to the tweet, by “CC”ing the Office of Government Ethics. Senator Casey “feels it is unethical and inappropriate for the President to lash out at a private company for refusing to enrich his family,” Casey’s press secretary Jacklin Rhoads said in an emailed statement. Nordstrom’s stock took a brief fall following the Tweet, from 42.69 at 10:50 to 42.50 at 10:55. However, it has since risen to $42.90 as of 11:50 a.m. More:

Nordstrom’s shares up nearly 5 percent after clash with Donald Trump

President Trump went to war Wednesday with Nordstrom, the department store, over its decision to stop carrying his daughter Ivanka’s line of branded apparel. And it appears Nordstrom won, with the company’s stock up almost 5 percent on the day. The saga began way back on February 2, when a spokesperson for Nordstrom rather blandly confirmed to Racked that Ivanka’s clothing was disappearing from stores: “Based on the brand’s performance, we’ve decided not to buy it for this season.”

The president ignored this issue for almost an entire week. Then Wednesday morning, according to the White House’s official schedule, he received his daily intelligence briefing at 10:30 am. There clearly wasn’t much urgent national security business to transact, because by 10:51 am he was focused on the threat to his daughter’s brand licensing business. Shortly thereafter, your hard-earned tax dollars went to work pursuing the first family’s vendetta against a retailer that scorned them, with the staff-run @POTUS account retweeting the president and White House press secretary Sean Spicer continuing the charge at the daily press briefing. Nordstrom’s move, according to Spicer, was not a business decision based on the sales of Ivanka’s line at all. It was, rather, a “direct attack” on Trump administration policy in a manner that is “not acceptable.” Trump has previously depressed the stock prices of private companies by tweeting negative things about them in a manner that perhaps suggested forthcoming retaliation on the part of the federal government. But most companies have found their share prices bouncing back rapidly. In Nordstrom’s case, the dip lasted less than an hour, and over the course of the day, shares surged. More:

Anti-Trump Employees Put Their Bosses in the Hot Seat

Only hours after IBM Chief Executive Officer Ginni Rometty congratulated Donald Trump on his election victory and offered to work with him on economic goals, IBM software engineer Daniel Hanley drafted a petition. The document urged Rometty to “do what’s right for IBMers,” including “respect our right to refuse to participate in any government contracts that violate constitutional and civil liberties.” The petition now has more than 1,600 signatures. Since Trump took charge at the White House, executives at companies including the Cleveland Clinic, Facebook, and Uber have come under internal pressure to answer for not just their policies but their politics. Employees like Hanley are pushing top bosses to sever their personal or professional ties to the administration, registering their dissent with protests, walkouts, and open letters. A handful have even resigned. Companies have been the targets of political protests before—think defense contractors during the Vietnam War, or Coca-Cola during apartheid—but employees have typically stayed out of it. “There’s been nothing this substantial by employees,” said Roger Gottlieb, a Worcester Polytechnic Institute professor who has written about protest movements. “It may be a reflection of the new economy where employees feel less allegiance and entitled to more of a say.” The new corporate dissenters don’t necessarily go quietly, either. After Oracle Co-Chief Executive Safra Catz joined Trump’s transition team, George Polisner, 57, quit his post as a manager of cloud operations—and detailed his reasons for doing so in a post on LinkedIn that’s now been viewed more than 350,000 times. Elizabeth Holli Wood, 31, has been a vocal critic of IBM after quitting her job there in protest. Even job candidates are drawing lines in the sand. A 39-year-old lawyer canceled an interview at Morgan, Lewis & Bockius after reading that the Philadelphia firm had handled Trump’s ethics and conflicts-of-interest compliance and won a “Russia Law Firm of the Year” award. The candidate, who didn’t want to be named, wrote to the recruiter that he couldn’t work at a firm that didn’t seem to share his principles. More:

Chelsea Clinton’s Husband Closes His Hedge Fund

Eaglevale Partners, the hedge fund co-founded by Marc Mezvinsky, the son-in-law of Hillary and Bill Clinton, closed in December, according to a person with knowledge of the matter. Eaglevale, based in New York, is in the process of returning money to clients, said the person who asked not to be named because the firm is private. Eaglevale was started by former Goldman Sachs Group Inc. traders Bennett Grau, Mark Mallon and Mezvinsky in 2011. They had previously worked together on the bank’s global macro proprietary-trading desk. A spokesman for Eaglevale declined to comment on the news, which was reported earlier by Hedge Fund Alert. More:

The End of Facts in the Trump Era

The order floated down from the lunatic’s castle late on a Friday. No more visas of any kind from seven countries, Donald Trump decreed, and mayhem replaced a weekend. Thunderstruck customs officials scrambled to make sense of the surprise order; planes landed and innocent travelers were detained; the Internet exploded; protesters stormed airports everywhere; the acting attorney general refused to go along and was fired like a contestant on one of Trump’s shows; it was Keystone Kops meets Pinochet.

And then there were the lies. If there is one thing the first few weeks of the Trump administration have proved, it’s that keeping track of what we used to call “objective fact” is now a fool’s errand.

Did the visa ban affect green-card holders? On a case-by-case basis, the administration said. The following day, a senior official said the ban “doesn’t affect them.” Reporters then asked if that was different from what was said at first. The answer, “No,” constituted a seemingly impossible third response to a simple question. The Trump administration is breaking new metaphysical ground in the mechanics of untruth. Trump went on to blame the media for falsely reporting that the plan was a “Muslim ban,” when a ban on Muslims was one of his most explicit campaign promises. He misled about it being “similar” to Barack Obama’s 2011 policy regarding Iraqi visas (it wasn’t close). He lied about everything with regard to the visa story, except for one thing: its popularity. “A majority of Americans agree with the president,” chirped Sean Spicer, already a challenger to former Disney tour guide and Nixon flack Ron Ziegler for the title of most loathed White House spokesman ever.  Because this was the Trump administration, most sensible people assumed Spicer’s line was a lie. But it wasn’t. Despite near-unanimous condemnation by the international community and massive demonstrations, polls showed that more Americans than not supported whatever it was Trump was doing with the borders. This gets to the heart of a chilling truth that much of educated America has yet to face about the Trump era. Amid all the howling about Trump’s deceptions, the far more upsetting story is the mandate behind them – not so much the death of truth in politics, but the irrelevance of it. Donald Trump is proving that if you connect with America’s anger and paranoia, you can get by quite easily without facts. More:

Trump blasts CNN: Cuomo never asked Blumenthal about ‘long-term lie’ of serving in Vietnam

President Trump on Thursday blasted CNN, saying host Chris Cuomo didn’t ask Sen. Richard Blumenthal (D-Conn.) during an earlier interview about the Connecticut senator’s “long-term lie” of serving in the Vietnam War. “Chris Cuomo, in his interview with Sen. Blumenthal, never asked him about his long-term lie about his brave “service” in Vietnam,” the president tweeted. “FAKE NEWS!” Cuomo immediately addressed Trump’s tweet on the air, with the network re-broadcasting the beginning of Cuomo’s interview with the Connecticut Democrat, when Cuomo asked Blumenthal about misrepresenting his military record in the past. In response to the question, Blumenthal defended his statements that Judge Neil Gorsuch, Trump’s Supreme Court nominee, expressed concern to him about the president’s attacks on federal judges. “Really, the first point that I made in the interview,” Cuomo said on CNN. “The president with all due respect, is once again off on the facts. And that’s not something that any of us have any desire to say on a regular basis, but it keeps being true,” Cuomo continued. “Fake news is the worst thing that you can call a journalist. It’s like an ethnic disparagement. We all have these ugly words for people. That’s the one for journalists.” Cuomo said the president keeps doubling down when the facts “don’t favor his position.”

“Once again, he doubles down, when he’s wrong,” he said. The president has repeatedly said he doesn’t watch CNN, but his tweet came shortly after the Blumenthal interview aired Thursday morning.

Trump and terrorism: Why is the White House ignoring the real danger of homegrown extremism?

The brouhaha between the Trump administration and the press has continued all week, with President Trump complaining publicly that the media is refusing to cover terrorist attacks for unspecified reasons:

You’ve seen what happened in Paris and Nice. All over Europe, it’s happening. It’s gotten to a point where it’s not even being reported. And in many cases, the very, very dishonest press doesn’t want to report it. They have their reasons, and you understand that. Why he thinks the press would hide these stories is completely mystifying. The media go to great lengths to milk every single bloody casualty and tragic death they can. Nothing is as good for ratings as terror porn, as Trump surely knows. It was natural that the media suspected Trump was referring to the “Bowling Green massacre,” which Kellyanne Conway had been publicly insisting had not been covered by the media. (She was right. It wasn’t covered — because there was no Bowling Green massacre.) But when the White House released a list of 78 terrorist attacks the administration claimed had not be adequately covered, it included Paris, Nice, San Bernardino, Orlando and Brussels, among dozens of others that had received wall-to-wall coverage for weeks. Then the White House explained that it was really referring to attacks overseas like the machete-wielding man who threatened people in Paris last week and was killed before he could hurt anyone. Such attacks aren’t being given the kind of hysterical reporting that Trump officials apparently believe is necessary for citizens to understand the threat. They want to ensure that Americans think they are in danger of being hacked to death by deranged Muslims at any moment. Obviously, terrorism is a danger in this world. There isn’t anyone on the planet who is unaware of that. But this idea that foreign terrorists are the greatest threat to America has been repeatedly debunked in recent years, because the data simply does not back up that claim. Despite the minimal risk they present, after the Paris and San Bernardino attacks Donald Trump seized on the xenophobic paranoia that was setting the right wing aflame. He tied his existing Mexican-immigrant bashing to Muslim-immigrant bashing, and the issue took on a life of its own. Before Trump burst on to the scene, FBI director James Comey and other top law enforcement officials were making it clear that the danger from ISIS-style attacks in the United States did not stem from foreign immigrants or refugees but rather homegrown “lone wolves,” usually young male misfits who became radicalized online. More:

Aides and staffers are reportedly leaking about Trump out of genuine alarm

The Trump White House is so leaky that the constant drip of insider information has become a story and matter of speculation in itself. All presidential administrations leak, usually when one aide or staffer wants to harm a rival or expose an unwanted policy, or an administration wants to spread some news or gossip through backchannels. But “Trump’s two-week-old administration has a third category: leaks from White House and agency officials alarmed by the president’s conduct,” report Huffington Post White House reporters Christina Wilkie and S.V. Date. Both reporters say they have been approached with material from “individuals in executive agencies and in the White House itself” who “spoke on condition of anonymity for fear of losing their jobs.” Some of the leaks Wilkie and Date published Tuesday night include a 3 a.m. phone call Trump reportedly made to his national security adviser, Michael Flynn, to ask if a strong or weak dollar is better for the economy. (Flynn “told Trump he didn’t know, that it wasn’t his area of expertise, that, perhaps, Trump should ask an economist instead,” The Huffington Post reports.) Then there are these: The commander in chief doesn’t like to read long [briefing] memos, a White House aide who asked to remain unnamed told The Huffington Post. So preferably they must be no more than a single page. They must have bullet points but not more than nine per page. Small things can provide him great joy or generate intense irritation. Trump told The New York Times that he’s fascinated with the phone system inside the White House. At the same time, he’s registered a complaint about the hand towels aboard Air Force One, the White House aide said, because they are not soft enough. [The Huffington Post] “I’ve been in this town for 26 years; I have never seen anything like this,” Eliot Cohen, a senior State Department and National Security Council official in the George W. Bush administration, told The Huffington Post. “I genuinely do not think this is a mentally healthy president.” Randy Evans, a Republican National Committee member, predicts the leaks won’t last. “If the administration gets serious about leaks, they’ll do the blue-dye test and find them,” he said, describing a method where you feed discrete stories to different staffers and see which ones show up in print. More:


Lyft hiring drivers ahead of possible Birmingham launch

Popular ridesharing program Lyft is in the process of hiring drivers to launch in Birmingham, multiple drivers tell Lyft is similar to Uber in that the app matches drivers to customers seeking rides using GPS. Lyft does not currently operate anywhere in Alabama. The company held several orientation meetings this past weekend, according to several people who attended them. Company representatives shared information about working driving for Lyft and took information from potential drivers. has obtained official communications from Lyft sent to a driver. All drivers spoken to for this story said Lyft plans to launch in Birmingham within 30 days. A Lyft representative said at the orientation the company has not yet finalized where in the Birmingham area they are offering the service, a driver said. Lyft did not respond to an email with questions Wednesday. City of Birmingham spokeswoman April Odom said Lyft has not submitted anything to the city.  Ridesharing only began in Birmingham in December 2015 after more than a year of negotiations between Uber and city officials. As part of those negotiations, anyone who wants to be an Uber driver is required to apply for a license with the city of Birmingham. The license costs $30 annually, the same price paid for a taxi license.

Rep. Anthony Daniels of Huntsville elected Democratic House Minority Leader

MONTGOMERY, Ala. – Huntsville’s Rep. Anthony Daniels has won a vote in a party caucus to assume the role of House Minority Leader. Rep. Craig Ford announced he would not run to retain the spot last October in a fiery letter that called for both Nancy Worley, the Alabama Democratic Party Chairwoman and Dr. Joe Reed, head of the State Democratic Executive Committee to step down. Shortly after Ford’s announcement, Daniels announced he would seek the spot, telling WHNT News 19, “With my fundraising background, any leader of any party has to have the ability to raise money. They have to have the ability to be able to broaden the base and get people excited about being a part of the party process. And they have to have the ability to engage all members. So yes, I will be seeking Minority Leader.” At the time, he called for party unity and handling party business in private. Daniels also said of the party brand in October, “We are Alabama Democrats, we are not Washington Democrats,” he explained. “We have our own uniqueness. I want to kind of rebrand us to being the party of unity, and the party of inclusion.”

Perhaps as part of that process, Daniels heavily focused on job growth in a Montgomery interview with WHNT News 19 on the first day of the 2017 legislative session. He even expressed a willingness to work with President Donald Trump, so long as that collaboration would lead to more jobs. Daniels told us, “If they’re serious, as they said on the campaign trail, about job growth, I’m serious about job growth. And so that’s something where I can see some common ground. But just to talk about it and not take the aggressive steps to make it happen, that’s where we’re far apart. I’m about results.” More:

Bill to block funding to ‘sanctuary’ colleges advances in Alabama House

A bill that would block state funding to Alabama public colleges and universities that adopt a “sanctuary” policy, meaning they will not follow federal or state immigration law, was approved by an Alabama House committee today. The “Americans First Act” is a four-page bill sponsored by Rep. Phil Williams, R-Huntsville. Williams said he was contacted by leadership at the University of Alabama in Huntsville about a student movement to make UAH a “sanctuary” campus. Williams said he thought it was unlikely that any Alabama university would adopt such a policy. “I don’t think that this is going to happen,” Williams said. “But across America, there are issues that are very concerning with universities and their posture toward federal law.” The committee approved Williams’ bill on a voice vote, with several Democrats opposing it. Rep. Ralph Howard, D-Greensboro, said he saw no justification for passing a bill telling universities they had to obey federal law. “So what we’re saying is, all these highly educated people don’t have the ability to read federal law and understand it,” Howard said. Reps. Barbara Boyd, D-Anniston and John Rogers, D-Birmingham, also spoke in opposition to the bill. A student at Auburn University at Montgomery who is an Air Force veteran and a lawyer from Montgomery urged the committee to oppose the bill during a public hearing that came before today’s vote. “While it sounds innocuous, it’s really not,” attorney Alfred Norris said. “We don’t want to create a hostile environment, which is exactly what this bill does.” Williams said the bill is not aimed at keeping foreign students out of Alabama colleges, but at making sure colleges follow immigration law. “Please don’t spin it as we’re not welcoming to foreigners,” Williams said. “It has nothing to do with that. It says we’re going to put Americans First.” The bill says two-year and four-year colleges are subject to the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, the controversial immigration bill passed in 2011 and commonly called HB 56. Major parts of the law were found unconstitutional by federal courts, but Williams said much of it remains intact. Williams’ bill says failure to comply with state or federal immigration laws or cooperate with authorities “pursuant to a public declaration of sanctuary status or otherwise” could result in a forfeiture of funds. The bill can now be considered by the full House.

Alabama Attorney General lacks serious tools to fight Medicaid fraud

Yearly, State lawmakers struggle to feed the beast know as Medicaid, and every year they ignore Medicaid fraud legislation that would bring tens of millions back into our State coffers annually. By denying the State’s Attorney General’s Office the tools to prosecute Medicaid fraud, the State is losing millions in recoverable funds while allowing perpetrators to remain free to continue to defraud the system.

By passing a False Claims Act, along with qui tam, a door would open for real Medicaid fraud prosecution. A False Claim Act imposes liability on persons and companies who defraud government programs. Qui tam is a term used for rewarding a whistleblower who exposes fraud on the government for which they receive a 10 percent share of the recovery. Currently, 35 states have a False Claims Act with qui tam, but not Alabama. Monies captured under a False Claims Act with qui tam where qui tam meets Debt Reduction Act provisions would result in an HHS award of 10 percent bonus of all monies recovered by the state.


After Mr. Trump’s Din, the Quiet Grandeur of the Courts

The most reassuring sound in these rancorous early days of the Trump administration was the legal debate, at times arcane, over the president’s travel ban during live-streamed oral arguments in a federal appeals court on Tuesday. No gratuitous insults, no personal threats or childish tantrum — only judges and lawyers debating complex legal issues with respect and restraint. It was the sound of grown-ups taking responsibility for governing the country, and for people’s lives. Contrast that with the unfiltered outbursts Americans have endured from President Trump in the chaotic days since he signed his slapdash order suspending entry for people from seven predominantly Muslim countries, and all refugees.

Mr. Trump’s attacks on judges who questioned his order were too much even for his nominee to the Supreme Court, Judge Neil Gorsuch of the federal appeals court in Denver. Judge Gorsuch called the comments “demoralizing” and “disheartening,” according to a senator with whom he met on Capitol Hill on Wednesday. Mr. Trump — who has a toddler’s aversion to the word “no” — berated a federal judge who temporarily blocked the order last week, calling him a “so-called” judge on Twitter. He then warned that the judge, and the entire court system, could be responsible for any future terrorist attacks that might occur. The three-judge panel of the Court of Appeals for the Ninth Circuit, based in San Francisco, appeared skeptical of the administration’s argument on Tuesday that the executive order is essentially unreviewable. It has yet not issued a ruling, but that didn’t stop Mr. Trump, who wrote early Wednesday morning on Twitter, “If the U.S. does not win this case as it so obviously should, we can never have the security and safety to which we are entitled. Politics!” More:

Shoker! Rediculous chocker Trump attaks and dishoners English with ever-dummer spellings.

The English language was unprepared for the attak. It was destined to loose. And, inevitably, it chocked.

The Trump White House on Monday night, attempting to demonstrate that the media had ignored terrorism, released a list of 78 “underreported” attacks. The list didn’t expose anything new about terrorist attacks, but it did reveal a previously underreported assault by the Trump administration on the conventions of written English. Twenty-seven times, the White House memo misspelled “attacker” or “attackers” as “attaker” or “attakers.” San Bernardino lost its second “r.” “Denmark” became “Denmakr.” I wish I could say this attack was unprecedented — or, as President Trump spells it, unpresidented. But I cannot say that. Nothing has distinguished Trump, his aides and his loyal supporters more than their shared struggle with spelling. The morning after his inauguration, Trump tweeted: “I am honered to serve you, the great American People, as your 45th President of the United States!” The honer is all ours, sir — just as it was exactly a year ago when you tweeted: “Every poll said I won the debate last night. Great honer!” Soon after the latest honer boner, Trump received his first international visitor, the British prime minister, and the Trump White House, in its official schedule, spelled her name wrong not once and not twice but thrice. Theresa May became Teresa May. Britons noticed the gaffe, as well they would: Teresa May is the name of a British former soft-porn actress and busty nude model. During the transition, Trump thundered on Twitter in a tweet that was so unpresidential it might be Freudian: “China steals United States Navy research drone in international waters — rips it out of water and takes it to China in unpresidented act.” But what was really unprecedented was Trump’s tweet on Hillary Clinton that included three misspellings in the space of 140 characters: “Hillary Clinton should not be given national security briefings in that she is a lose cannon with extraordinarily bad judgement & insticts.” My insticts say Trump should enable auto-correct. That might have prevented him from labeling Sen. Marco Rubio (R-Fla.) a “lightweight chocker” and “always a chocker” after the senator choked in a GOP presidential debate. Trump’s spelling chock was no shock. He attacked another primary opponent, Sen. Ted Cruz (R-Tex.), by tweeting: “Big shoker! People do not like Ted.” It was no shoker, by contrast, that Trump also tweeted that Cruz “will loose big to Hillary.”


Morning Money


NORDSTROM VS. TRUMP — Brands keep pushing back against President Donald Trump and on Wednesday, at least, the brands won. Shares in Nordstrom Inc. closed the day up over 4 percent after Trump lashed out at the high-end retailer for dropping first daughter Ivanka Trump’s apparel and accessories line. The news of the removal was about a week old. But Trump chose Wednesday morning to fire back, tweeting: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!”


The official @potus account then retweeted the attack, putting the full weight of the United States government at the service of Trump’s personal family business squabble. Press secretary Sean Spicer dutifully kept up the attack at the daily briefing, accusing Nordstrom of dropping the line not because it was selling poorly but as a “direct attack” on the administration.


But investors shrugged off Trump, sending Nordstrom shares higher after a brief dip. Other companies targeted by Trump have also seen their shares recover much of their initial declines after finding themselves on the receiving end of a presidential blast. Stocks move for all kinds of reasons, of course. But at least on Wednesday, it appeared that Trump simply gave Nordstrom some free — and potentially welcome — attention.


Vox’s Mathew Yglesias: “[I]t may be that investors are anticipating a surge of new sales at the retailer thanks to the massive amount of free publicity Trump garnered for their store, or the way that doing battle with an unpopular president could boost its profile in the large metropolitan areas where most of its stores are located.” Read more.


Bloomberg’s Shannon Pettypiece, Richard Clough and Lindsey Rupp: “Trump is intervening in the daily business of U.S. companies to an unprecedented extent, spurring investors and executives to weigh their exposure to his wrath when making decisions.


“[After the Nordstrom tweet], Trump was trying to play corporate good cop. Intel Corp.’s Chief Executive Officer Brian Krzanich was in the Oval Office with Trump when he announced the semiconductor-maker would spend $7 billion on its production facilities in Chandler, Arizona that will create 3,000 jobs, a move that was already widely expected by investors and did little to boost shares.”


MM BOOK SHELF — We are excited to read New Yorker staff writer Sheelah Kolhatkar’s new book “Black Edge” about the government’s investigation of Steve Cohen and SAC Capital. Here’s a rave about it from the NYT. Get it on Amazon.


CEA MIND-MELD — A plugged in DC veteran offers thoughts on what Trump could do with the in-house economic forecasting shop that still doesn’t have a director: “CEA was created by statute which also requires an annual economic report — so it will be hard to eliminate (it could be ignored, but they do need to fill it out sometime).

“What has also not been reported is that the two Members of CEA are no longer Senate-confirmed, only the Chair. … So, it would be very easy for them to simply name a Member and have that person as ‘acting’ until a Chair is nominated. Not sure why they have not done that.”


CALLABRIA JOINS TEAM PENCE — POLITICO’s Lorraine Woellert: “Vice President Mike Pence has hired Mark Calabria as his chief economist … Calabria was director of financial regulation studies at the Cato Institute, where he was a prominent voice on financial services and economic policy and an expert on mortgage and housing reform.


“Before joining Cato in 2009, Calabria worked for the Senate Banking Committee, where he handled housing, mortgage finance, economics, banking and insurance for then-ranking member Richard Shelby (R-Ala.). His resumé includes stints at the Department of Housing and Urban Development, the National Association of Realtors and the National Association of Home Builders”


MELANIA INC. — Tim O’Brien on Bloomberg View: “We can all thank Melania Trump for giving us a clearer sense of what she and her family are looking for from their stay in the White House. … In court papers Melania filed on Monday as part of a libel lawsuit against the parent company of the Daily Mail, she said that the British tabloid and web site, by falsely reporting that she had once worked as a prostitute, caused the first lady to miss ‘major business opportunities’ and ‘multimillion-dollar relationships.’


“The lawsuit … said Melania’s missed deals would have involved such products as ‘apparel, accessories, shoes, jewelry, cosmetics, hair care, skin care, and fragrance.’ Melania’s role as first lady to President Donald Trump would have offered her a ‘once-in-a-lifetime’ opportunity to cash in on such deals, the lawsuit noted, but the reputational damage done by the Daily Mail had disrupted those plans” Read more.


ANTHEM DEAL REJECTED — POLITICO’s Paul Demko: “A federal judge halted Anthem’s bid to acquire Cigna for $54 billion … ruling the deal between the insurance giants can’t go forward because it would illegally hurt competition. U.S. District Judge Amy Berman Jackson concluded that the merger, which would create the country’s largest insurance company, would stifle competition for large employers in a market dominated by just four insurers, including Anthem and Cigna.


“The Justice Department successfully argued that the deal would eliminate an innovative, growing competitor in Cigna, and that the savings promised by Anthem were either illusory or not contingent on the merger” Read more.


FIRST LOOK: WHY TO WORRY ABOUT PUZDER — Bloomberg Businessweek cover story asks “Is Trump’s nominee for Labor, Andrew Puzder, yet another reason for American workers to worry? YES” Story is here. Cover image.


2-FOR-1 ORDER DRAWS LAWSUIT — Trump’s executive order requiring agencies to repeal two regulations for each new regulation drew a lawsuit from Public Citizen, the Natural Resources Defense Council and the Communications Workers of America. See it here.


KEEP VOLCKER BUT FIX IT — KBRA’s Chris Whalen in American Banker: “By retaining the Volcker Rule but revising it to address liquidity concerns, the Trump administration could achieve many of the goals of restoring Glass-Steagall while correcting a key problem created by Dodd-Frank.” Read more.


MNUCHIN BACKED — The U.S. Hispanic Chamber of Commerce CEO Javier Palomarez in Forbes: “We know that nominee for Secretary of Treasury, Steven Mnuchin, will play a pivotal role within the administration to promote a fair corporate tax rate and roll back much of the complex web of financial regulations that hurt our companies.” Read more.


Mnuchin, FWIW, is expected to get confirmed on Saturday. Shortly thereafter look for several top Treasury slots to get announced.


TRICKY TIME FOR FOREX — Mohamed El-Erian in the FT: “This is a tricky time for foreign exchange traders who now face an unsettling combination of policy uncertainty, fluid international trade arrangements and changes in official practices. … The dollar initially surged as the election of … Trump alongside Republican Congressional majorities fuelled market expectations of higher growth, capital repatriation and tighter monetary policy …


“This, together with the post-Trump rise in stocks and government yields, subsequently stalled as market participants waited for policy announcements to translate to design and implementation. Even last Friday’s dramatic financial deregulation signal could not stop a fourth successive week of dollar weakness. Currency markets have also been dealing with unusual uncertainties relating to international trade regimes and White House commentary.” Read more.


INTEL APPEASES TRUMP, GETS FREE AD — POLITICO’s Tony Romm and Madeline Conway: “Intel pledged on Wednesday that the chipmaker would commit $7 billion to build a new factory in Arizona while hiring at least 3,000 employees, an expansion that the company’s chief executive, Brian Krzanich, attributed to … Trump — even though some of those plans have been in the works for years.

“After a meeting with Trump at the White House, the president essentially turned the microphone over to Krzanich for what amounted to a product unveiling in the Oval Office that aired for free on the major cable networks” Read more.


BANKS SEE AN OPENING — POLITICO Pro’s Colin Wilhelm reports: “The war between banks and credit unions over a tax exemption for the latter has a new battleground: the House Republican tax reform plan.


“Banks see a way to break through the current stalemate by pushing to include an end to the exemption in the House GOP’s yet-to-be released comprehensive tax reform plan.” Read more.


DEUTSCHE RETREATS FROM SWAPS CLEARING — FT’s Joe Rennison reports: “Deutsche Bank is closing its US swaps clearing business as it battles to cut costs amid continued questions over its business model.


“The bank will continue to clear futures globally, according to people briefed on its plans, but its decision to stop clearing swaps in the US is effective immediately. The business had dwindled, with the German lender slipping to become only the 13th largest clearing bank for US swaps at the end of 2016.”Read more.


CHINA’S YUAN HONEYMOON — Bloomberg reports: “China has got the yuan in a sweet spot. The nation’s authorities have let the currency rise enough against the U.S. dollar to put a spanner in President Donald Trump’s assertion that China deliberately undervalues its exchange rate. At the same time, it has weakened against a trade-weighted basket of currencies, giving China a competitive edge in exports.” Read more.


BANKS CAN’T WAIT TO WIPE OUT COMPLAINTS DATABASE — Bloomberg’s Shahien Nasiripour reports: “Among the changes enacted through Dodd-Frank was the creation of the database, which catalogues consumer complaints about financial products and services. The law called for the CFPB to maintain it and provide Congress with annual updates analyzing the complaints.


Reviled by banks, the database is a prime target for a Trump administration that has vowed to rewrite Obama-era financial rules and has suggested it will change the consumer bureau’s approach to policing financial markets. Richard Cordray, the bureau’s director, is among the complaint portal’s biggest proponents.” Read more.


GOLDMAN FOLDS LONDON OPERATIONS — Reuters’ Maiya Keidan and Olivia Oran report: “Goldman Sachs Investment Partners (GSIP), which opened in 2008 with one of the biggest launches in hedge fund history, is folding its London operations into the United States and shifting staff members to New York, four sources told Reuters.


“About eight staff members who made up the London team were recently told to move to the Battery Park City headquarters of Goldman Sach Group Inc (GS.N) in lower Manhattan or find a new job internally, the sources said.” Read more.


WELLS FARGO TO CUT BONUSES — WSJ’s Emily Glazer reports: “Wells Fargo & Co.’s board is likely to eliminate annual bonuses for 2016 for some top executives following the bank’s sales-practices scandal, according to people familiar with the matter.


“The cut to compensation isn’t meant to reflect culpability on the part of the executives in connection with the sales-practices scandal, the people said. Rather it is meant to show accountability for the bank’s overall performance.” Read more.


INVESTORS PILING ON JUNK BONDS IN TRUMP ERA — FT’s Eric Platt reports: “Investors are piling into some of the riskiest bonds sold by US companies as they bet on President Donald Trump delivering on his promises of a stronger economy, lower taxes and less regulation.


“Demand for junk-rated bonds has driven yields on debt with the lowest quality credit rating down towards 10 per cent as more than $10bn has flowed into funds that invest in the asset class since the start of December.” Read more.


WORRIES BUILD OVER EURO FATE — NYT’s Landon Thomas Jr. reports: “Even as global stock markets climb, worries are building among investors that long-simmering debt troubles in Greece and Italy will put additional strain on the euro.


“Yet with the central bank expected to eventually unwind its purchases of government bonds and other assets, investors are increasingly becoming concerned about how Europe — and Germany, in particular — can cope with escalating debt pressures in Italy and Greece.” Read more.


FIRMS SLASH INTEREST TAB: WSJ’s Matt Wirz reports: “Rising interest-rate expectations are fueling the biggest corporate-refinancing boom in years.


“U.S. companies refinanced $100 billion of loans in January, the largest monthly total in at least a decade, according to data from S&P Global Inc … .Borrowers in recent months have saved more than $1 billion in annual interest costs by renegotiating terms with their lenders, according to a Wall Street Journal analysis of the data.” Read more.


VW THREATENS LEGAL ACTION — FT’s Patrick McGee reports: “Volkswagen threatened legal action against its former chairman on Wednesday as the carmaker stepped into a public feud over whether top executives concealed knowledge about the diesel emissions scandal before it was revealed by US regulators in September 2015.


“In the past week, assertions to the contrary have been circulating in German media, based on leaks from what former chairman Ferdinand Piëch, grandson of Ferdinand Porsche, designer of the VW Beetle, allegedly told public prosecutors in Braunschweig, who are investigating the issue.” Read more.


FED GENERAL COUNSEL ALVAREZ TO RETIRE: POLITICO Pro’s Victoria Guida reports: “Federal Reserve General Counsel Scott Alvarez, one of the most influential figures at the central bank, will retire later this year after decades at the agency, the Fed announced today.


“Alvarez, who has served as general counsel since 2004, has played a key role in shaping the Fed’s approach to monetary policy and its implementation of the Dodd-Frank Act. The Fed Board of Governors said it will launch a search for his replacement.” Read more.




MORE ON DURBIN — The Nat’l Restaurant Association also sent members to the Hill on Wednesday to argue against repeal of the Durbin amendment on swipe fees. Via the association’s VP Leslie Shedd: “If Wall Street gets its way and the current debit swipe-fee protections are removed, it would mean an $8 billion tax on small businesses that goes directly into the pockets of the biggest banks in the country.”


GE LAUNCHES 20K WOMEN INITIATIVE — GE on Wednesday announced a goal of having 20,000 women fill STEM roles at GE by 2020 (obtaining a 50:50 representation for all technical entry-level programs). Read more.


NEW HOUSEHOLD STUDY — The JPMorgan Chase Institute has a new report out Thursday on the financial resiliency of US households. The report “shows that each year nearly forty percent of US families make at least one extraordinary payment of roughly $1,500. The percentage is even higher for older Americans (44 percent) who often face the added challenge of managing against a fixed income.” Full report.


NEW ONLINE LENDING INSTITUTE — POLITICO’s Colin Wilhelm: “A new Online Lending Policy Institute has formed to research marketplace lending and fintech, with the backing of Quicken’s RocketLoans division and Cross River Bank, a New Jersey bank that helps facilitate loans made by marketplace lenders.


“The institute will be directed by former Federal Reserve assistant general counsel Con Hurley, who currently teaches banking law at Boston University. In a call with POLITICO Hurley insisted that the institute will focus on research, not advocacy, to differentiate itself from a trade association.”


POTUS Events

9:00 am || Receives his daily intelligence briefing
9:30 am || Breakfast with airline industry officials; State Dining Room
10:30 am || Participates in the swearing-in of Attorney General Jeff Sessions
11:30 am || Speaks with President Ashraf Ghani of Afghanistan
Noon || Speaks with Emir Tamim bin Hamad Al Thani of Qatar
12:30 pm || Holds a SCOTUS listening session and lunch; Roosevelt Room
2:15 pm || Speaks with Emir Sabah al-Ahmad al-Jabir al-Sabah of Kuwait
2:45 pm || Speaks with Prime Minister Haider al-Abadi of Iraq

Floor Action

The House meets in a pro forma session at 2:30 p.m. The Senate is back at 10 a.m. to continue consideration of Tom Price to be Health and Human Services secretary. On deck: Trump’s Treasury pick Steven Mnuchin.

AROUND THE HILL — Sen. Susan Collins meets with SCOTUS nominee Gorsuch at 10:15. Then Gorsuch is off to huddle with Sen. Steve Daines at 11:15. Sens. Chuck Schumer and Patty Murray at noon will gaggle on Trump’s pick for Labor secretary, Andrew Puzder.

HAPPENING TODAY: SOON-TO-BE SEN. STRANGE COMES TO WASHINGTON. Drama aside, it’s pretty-much official: Alabama Gov. Robert Bentley will tap Luther Strange to fill the Senate seat of incoming Attorney General Jeff Sessions — despite the quiet conflict-of-interest worries in the southern state. Bres, Ken Vogel and Marc Caputo report today that Bentley “will formally announce Strange’s selection at a press conference in Montgomery on Thursday morning, and then the two will travel to Washington for Strange’s swearing-in as a senator.” Expect that to happen around 2 p.m. in the Senate.



Five Things to Know About the Child Tax Credit


The Child Tax Credit is a tax credit that may save taxpayers up to $1,000 for each eligible qualifying child. Taxpayers should make sure they qualify before they claim it. Here are five facts from the IRS on the Child Tax Credit:

  1. Qualifications. For the Child Tax Credit, a qualifying child must pass several tests:
  • Age. The child must have been under age 17 on Dec. 31, 2016.
  • Relationship. The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother or half-sister. The child may be a descendant of any of these individuals. A qualifying child could also include grandchildren, nieces or nephews. Taxpayers would always treat an adopted child as their own child. An adopted child includes a child lawfully placed with them for legal adoption.
  • Support. The child must have not provided more than half of their own support for the year.
  • Dependent. The child must be a dependent that a taxpayer claims on their federal tax return.
  • Joint return. The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.
  • Citizenship. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.
  • Residence. In most cases, the child must have lived with the taxpayer for more than half of 2016.

The IRS Interactive Tax Assistant tool – Is My Child a Qualifying Child for the Child Tax Credit? – helps taxpayers determine if a child is a qualifying child for the Child Tax Credit.

  1. Limitations. The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate a taxpayer’s credit depending on their filing status and income.
  2. Additional Child Tax Credit.  If a taxpayer qualifies and gets less than the full Child Tax Credit, they could receive a refund, even if they owe no tax, with the Additional Child Tax Credit.Because of a new tax-law change, the IRS cannot issue refunds before Feb. 15 for tax returns that claim the Earned Income Tax Credit (EITC) or the ACTC. This applies to the entire refund, even the portion not associated with these credits. The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS expects these refunds to be available in bank accounts or debit cards at the earliest, during the week of Feb. 27. This will happen as long as there are no processing issues with the tax return and the taxpayer chose direct deposit. Read more about refund timing for early EITC/ACTC filers.
  1. Schedule 8812. If a taxpayer qualifies to claim the Child Tax Credit, they need to check to see if they must complete and attach Schedule 8812, Child Tax Credit, with their tax return. Taxpayers can visit to view, download or print IRS tax forms anytime.
  2. IRS E-file. The easiest way to claim the Child Tax Credit is with IRS E-file. This system is safe, accurate and easy to use. Taxpayers can also use IRS Free File to prepare and e-file their taxes for free. Go to to learn more.



About Thomas Krebs

Securities litigation, regulation and compliance attorney.