Securities Attorney Daily Briefing 7 February 2017

Securities Attorney Tom Krebs


Iran leader rebuffs Trump’s warning on missiles

Ayatollah Ali Khamenei dismissed Donald Trump’s warning to Iran to stop its missile tests, saying the new U.S. president had shown the “real face” of American corruption. In his first speech since Trump’s inauguration, Iran’s supreme leader called on Iranians to respond to Trump’s “threats” on Feb. 10, the anniversary of Iran’s 1979 Islamic revolution. Trump had tried but failed to frighten Iranians, Khamenei said. “We are thankful to (Trump) for making our life easy as he showed the real face of America,” Khamenei told a meeting of military commanders in Tehran, according to his website. The White House has said the last week’s missile test was not a direct breach of Iran’s 2015 nuclear pact with six world powers, but that it “violates the spirit of that”.. In remarks published on Tuesday, Iranian Foreign Minister Mohammad Javad Zarif said Tehran would not agree to renegotiate its nuclear agreement. “I believe Trump will push for renegotiation. But Iran and European countries will not accept that,” Mohammad Javad Zarif told Ettelaat newspaper. “We will have difficult days ahead.” On the campaign trail, Trump repeatedly promised to tear up the nuclear deal. While his Secretary of State, Rex Tillerson, has not called for an outright rejection of the accord, he has suggested a “full review” of it. The supreme leader, Iran’s top authority, also said Trump has “confirmed what we have been saying for more than 30 years about the political, economic, moral and social corruption in the U.S. ruling system.”

The British Parliament won’t let Trump address them because of his ‘racism’ and ‘sexism’

President Donald Trump will not be allowed to address the U.K. Parliament during his eventual state visit, The Independent reports. “An address by a foreign leader to both houses of Parliament is not an automatic right,” said Speaker of the House of Commons John Bercow, a former Conservative Party member. “It is an earned honor.” Bercow went on: “We value our relationship with the United States. If a state visit takes place, that is way beyond and above the pay grade of the speaker. However, as far as this place is concerned I feel very strongly that our opposition to racism and to sexism and our support for equality before the law and an independent judiciary are hugely important considerations in the House of Commons … I would not wish to issue an invitation to President Trump to speak in the Royal Gallery.” Parts of the Commons erupted into “rare” applause at Bercow’s declaration, The Independent notes. Some British politicians, including Labour leader Jeremy Corbyn, have demanded Trump’s invitation to visit the U.K. be canceled altogether until he revokes his ban on refugees and travelers from seven predominately Muslim nations. More than one million U.K. citizens have signed a petition demanding Trump’s state visit — expected later this year — be canceled. Watch Bercow’s address to Parliament, at link below.

Israel passes bill to seize private Palestinian land for Jewish settlements

JERUSALEM — Israel’s parliament passed a contentious law late Monday that allows the state to seize land privately owned by Palestinians in the West Bank and grant the properties to Jewish settlements for their exclusive use. The measure is designed to protect homes in Jewish settlements, built on private Palestinian property “in good faith or at the state’s instruction,” from possible court-ordered evacuation and demolition. Thousands of homes in dozens of settlements and outposts may now be protected, at least temporarily. The bill is likely headed for a high court challenge. Prime Minister Benjamin Netanyahu supports the legislation and has told his constituents that no government had done more for the settlers. On Monday, the Israeli leader said he had informed the Trump White House that a vote on the legislation was imminent. Israeli legislators in the opposition condemned the bill as reckless and warned that it would turn the world against Israel while goading prosecutors at the International Criminal Court in The Hague to take action against the Jewish state. The bill passed on a vote of 60 to 52. The private Palestinian land would be seized by the government and held until there is a final resolution of decades-long Israel-Palestinian conflict. Palestinian landowners could apply to the state for annual rents or be given another parcel. A member of parliament in Netanyahu’s own Likud party, Benny Begin, son of the former Prime Minister Menachem Begin, speaking before the vote, labeled it “the robbery bill.” Another Likud legislator, the former justice minister Dan Meridor, condemned the bill as “evil and dangerous.”

Steve Bannon Carries Battles to Another Influential Hub: The Vatican

ROME — When Stephen K. Bannon was still heading Breitbart News, he went to the Vatican to cover the canonization of John Paul II and make some friends. High on his list of people to meet was an archconservative American cardinal, Raymond Burke, who had openly clashed with Pope Francis. In one of the cardinal’s antechambers, amid religious statues and book-lined walls, Cardinal Burke and Mr. Bannon — who is now President Trump’s anti-establishment eminence — bonded over their shared worldview. They saw Islam as threatening to overrun a prostrate West weakened by the erosion of traditional Christian values, and viewed themselves as unjustly ostracized by out-of-touch political elites. “When you recognize someone who has sacrificed in order to remain true to his principles and who is fighting the same kind of battles in the cultural arena, in a different section of the battlefield, I’m not surprised there is a meeting of hearts,” said Benjamin Harnwell, a confidant of Cardinal Burke who arranged the 2014 meeting. While Mr. Trump, a twice-divorced president who has boasted of groping women, may seem an unlikely ally of traditionalists in the Vatican, many of them regard his election and the ascendance of Mr. Bannon as potentially game-changing breakthroughs. Just as Mr. Bannon has connected with far-right parties threatening to topple governments throughout Western Europe, he has also made common cause with elements in the Roman Catholic Church who oppose the direction Francis is taking them. Many share Mr. Bannon’s suspicion of Pope Francis as a dangerously misguided, and probably socialist, pontiff.


Despite risks, public pensions put faith in long-term returns

U.S. public pension funds are cutting their expectations for investment returns over the next 30 years or more, but some do not expect to meet even the new targets over the coming decade. After a long period of low interest rates, forecasts by investment analysts show the next 10 years will probably bring slower market growth, leading to reduced expectations for the $3.7 trillion of public pension assets. But public pensions are wary of lowering their expected return rates, or the discount rate, too quickly because doing so would drastically increase costs for state and local governments and their employees, whose contributions form the funds. Instead, the funds say they plan to make up for lower returns expected in the coming decade over the next 30 years or more. “Pension funds are in an extraordinarily difficult political situation,” said Don Boyd, fiscal studies director at the Rockefeller Institute of Government.

If they protect their portfolios by moving assets into safer, lower-return investments, he said, “they will have to drastically increase the cost for local governments. They are reluctant to do that.” The California Public Employees’ Retirement System, the largest U.S. public pension fund, anticipates annual returns of 6.2 percent over the next decade. However, CalPERS still expects its long-term return to align more closely with a discount rate that it plans to reduce to 7 percent by 2020, because it anticipates returns will jump to 7.83 percent in the decades to follow. Such a forecast in the short term could spell declining fund conditions, a rise in unfunded liabilities and increased costs for government employers and workers. CalPERS is not alone. The Ohio Public Employees Retirement System expects an average 6.76 percent return over the next five to seven years, short of its 7.5 percent discount rate. But the fund anticipates returns will climb to 7.85 percent over a 30-year period. More:

Goldman Sachs Economists Are Starting to Worry About President Trump

A rethink, if not an outright reversal? Just a few weeks ago, Wall Street analysts were busy boosting their economic forecasts on the expectation that President Trump would implement sweeping corporate-tax reform, a rollback of regulations, and new fiscal stimulus. Two weeks into his term and the president has been focused primarily on immigration and trade, causing a reevaluation among analysts at some banks that harks back to pre-election concerns about Trump’s uncertain effect on markets and U.S. economic growth. “Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration,” Goldman Sachs Group Inc. economists led by Alec Phillips wrote in note published late last week. “One month into the year, the balance of risks is somewhat less positive in our view.” Goldman’s Phillips cites three key reasons for the more cautious tone. More:

A Quiet Giant of Investing Weighs In on Trump

He is the most successful and influential investor you have probably never heard of. His writings are so coveted and followed by Wall Street that a used copy of a book he wrote several decades ago about investing starts at $795 on Amazon, and a new copy sells for as much as $3,500. Perhaps that’s why a private letter he wrote to his investors a little over two weeks ago about investing during the age of President Trump — and offering his thoughts on the current state of the hedge fund industry — has quietly become the most sought-after reading material on Wall Street. He is Seth A. Klarman, the 59-year-old value investor who runs Baupost Group, which manages some $30 billion. While Mr. Klarman has long kept a low public profile, he is considered a giant within investment circles. He is often compared to Warren Buffett, and The Economist magazine once described him as “The Oracle of Boston,” where Baupost is based. For good measure, he is one of the very few hedge managers Mr. Buffett has publicly praised. In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing “perilously high valuations.” “Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,” he wrote. More:

Trump’s Dodd-Frank Do-Over Diverted to Slow Lane With Obamacare

President Donald Trump’s pledge to dismantle the Dodd-Frank financial overhaul is colliding with the same reality as his pledge to gut Obamacare: The Republican majority in Congress can’t decide how to make it happen and Democrats are vowing to fight. Trump, who last month said Obamacare would be replaced “the same day or the same week,” or perhaps “the same hour,” acknowledged Sunday that the health-care law isn’t going away anytime soon. “We should have something within the year and the following year,” told Fox News’s Bill O’Reilly. The Dodd-Frank directive he signed Friday is hitting the same road block on Capitol Hill and at federal agencies. In both cases, Trump’s team has moved swiftly with a flurry of executive orders that largely promise action in the future. But Republicans in Congress aren’t close yet. On the House side, there’s no agreement on a plan to replace either Obamacare or Dodd-Frank. Even if they reach one soon, it’s almost certain to go beyond what Senate Republicans are likely to accept, and it won’t be able to attract Democratic votes. And putting forward new regulations will take years. Trump’s executive action on Dodd-Frank has also galvanized Democrats to fight changes to a law enacted in response to the 2008 financial crisis.

Extreme Vetting, But Not for Banks

Donald Trump, the man who positioned himself as the common man’s shield against Wall Street, signed a series of orders today calling for reviews or rollbacks of financial regulations. He did so after meeting with some friendly helpers. Here’s how CNBC described the crowd of Wall Street CEOs Trump received, before he ordered a review of both the Dodd-Frank Act and the fiduciary rule requiring investment advisors to act in their clients’ interests:  “Trump also will meet at the White House with leading CEOs, including JPMorgan’s Jamie Dimon, Blackstone’s Steve Schwarzman, and BlackRock’s Larry Fink.” Leading the way for this assortment of populist heroes will be former Goldman honcho Gary Cohn, now Trump’s chief economic advisor. Dimon, Schwarzman, Fink and Cohn collectively represent a rogues gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy. Trump’s approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does. The two primary disasters in American history this century (if we’re not counting Trump’s election) have been 9/11 and the 2008 financial crisis, which cost 8.7 million people their jobs and may have destroyed as much as 45 percent of the world’s wealth. The response to 9/11 we know: major military actions all over the world, plus a radical reshaping of our legal structure, with voters embracing warrantless surveillance, a suspension of habeas corpus, even torture. But the crisis response? Basically, we gave trillions of dollars to bail out the very actors who caused the mess. Now, with Trump’s election, we’ve triumphantly put those same actors back in charge of non-policing themselves. In between, we passed a few weak-sauce rules designed to scale back some of the worst excesses. Those rules presumably will be tossed aside now.

Trump’s first health care action may be to let insurers charge older people more for Insurance

On his first day in office, President Donald Trump signed an executive order instructing his agencies to dismantle the Affordable Care Act “to the maximum extent permitted by law.” But what that would actually mean in practice has remained extremely unclear. The administration has drawn up a proposed new rule, but its content isn’t yet public. However, the Huffington Post’s Jonathan Cohn reports that, according to “industry consultants and lobbyists,” the administration is considering a few executive changes affecting the insurance market. The first among them would let insurers charge older people higher premiums than they’re currently allowed to under Obamacare. The background is that, under the Affordable Care Act’s “age bands,” insurers in the individual markets are allowed to charge their oldest customers a maximum of three times as much as their younger customers for premiums. The Trump administration’s proposed rule would change that, allowing older customers to be charged 3.49 times as much. “According to sources privy to HHS discussions with insurers, officials would argue that since 3.49 ‘rounds down’ to three, the change would still comply with the statute,” Cohn writes. Now, there’s a policy rationale here. Older people use, on average, much more health care than younger people, so it’s much more expensive for insurers to cover them — more than three times as expensive. So if insurers can only charge older people three times as much as anyone else, they’ll need to come up with the rest of the money for their care by charging everyone else relatively more. This is what has happened under Obamacare. The catch is that if insurance becomes too expensive for younger, healthier people, they might respond by not getting it. That would make the insured population sicker as a whole and therefore even more expensive to cover.

Appeals court schedules arguments on Trump travel ban

A federal appeals court will hear oral arguments Tuesday on the Justice Department’s request to overturn a broad block on President Donald Trump’s travel ban executive order. The San Francisco-based 9th Circuit Court of Appeals announced that a three-judge panel will hold an hour-long telephone argument session starting at 6 p.m. ET (3 p.m. PT.) Tuesday. The arguments were scheduled just as the Trump administration filed a new brief arguing that national security concerns make it improper for the courts to intrude on executive branch decisions about which foreigners should be denied entry to the U.S. The new filing warns the courts against taking “the extraordinary step of second-guessing a formal national-security judgment made by the President himself pursuant to broad grants of statutory authority,” the new government filing said.  “The potential national-security risks and harms resulting from the compelled application of procedures that the President has determined must be reexamined, for the purpose of ensuring an adequate measure of protection for the Nation, cannot be undone. Nor can the effect on our constitutional separation of powers,” the Justice Deparment argued. The Justice Department brief backs the federal government’s motion to stay an order U.S. District Court Judge James Robart issued Friday halting several key aspects of Trump’s week-old executive order. He issued the order in a lawsuit brought by the states of Washington and Minnesota. The brief was a lawyerly restatement of tweets Trump issued earlier this week saying that Robart and other judges could be responsible if the nation suffered a terrorist attack as a result of the decision to lift the order in which Trump banned travel to the U.S. by citizens of seven majority-Muslim countries, suspended all refugee admissions for 120 days and put an indefinite hold on Syrian refugees. More:


Justice Department Urges Appeals Court to Reinstate Trump’s Travel Ban


WASHINGTON — The Justice Department on Monday evening urged a federal appeals court to reinstate President Trump’s targeted travel ban, saying that a judge’s order blocking it endangered national security and violated the separation of powers. The court, the United States Court of Appeals for the Ninth Circuit, has scheduled an hourlong oral argument in the case for 3 p.m. Tuesday. Opponents of the ban have said that it is a threat to the rule of law, to the nation’s security and to the economy.

With the filing of the administration’s brief, the challenge to the travel ban, the most ambitious and disruptive initiative of President Trump’s young presidency, is now ready for its most important judicial test yet, one that will yield the first appellate ruling. Many trial judges around the country have blocked aspects of Mr. Trump’s executive order suspending travel from seven mostly Muslim countries and limiting the nation’s refugee program, but none of those cases have reached an appeals court. And none of the lower-court rulings were as broad as the one under review in the case, State of Washington v. Trump. That ruling, from Judge James L. Robart, a federal judge in Seattle,blocked the key parts of Mr. Trump’s executive order. Judge Robart’s ruling allowed immigrants and travelers who had been barred from entry to come to the United States, and it inspired a harsh attack from Mr. Trump, who accused the judge of endangering national security. On Saturday, the administration asked the Ninth Circuit for an immediate administrative stay of Judge Robart’s ruling without hearing from the plaintiffs in the case, the states of Washington and Minnesota. The court declined, instead asking for more briefs. More:


New FCC chair just blocked 9 companies from providing affordable Internet to the poor


Regulators are telling nine companies they won’t be allowed to participate in a federal program meant to help them provide affordable Internet access to low-income consumers – weeks after those companies had been given the green light. The move, announced Friday by FCC Chairman Ajit Pai, reverses a decision by his Democratic predecessor, Tom Wheeler, and undercuts the companies’ ability to provide low-cost Internet access to poorer Americans. In a statement, Pai called the initial decisions a form of “midnight regulation.” “These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward,” he said. The program, known as Lifeline, provides registered households with a $9.25-a-month credit, which can then be used to buy home Internet service. As many as 13 million Americans may be eligible for Lifeline that do not have broadband service at home, the FCC has found. Roughly 900 service providers participate in the Lifeline program. For Kajeet Inc., one of the companies that was initially granted permission to provide service through Lifeline, the news comes as a blow. “I’m most concerned about the children we serve,” said Kajeet founder Daniel Neal. “We partner with school districts – 41 states and the District of Columbia – to provide educational broadband so that poor kids can do their homework.” Since becoming chairman last month, Pai has made closing the digital divide a central axis of his policy agenda. Although the vast majority of Americans have access to Internet service, there remain distinct gaps in U.S. broadband penetration, particularly among seniors, minorities and the poor. In his first address to FCC staff, Pai singled out the digital divide as one of the signature issues he hoped to address. More:


Trump: ‘Any negative polls are fake news’


President Trump early Monday blasted “negative polls” as “fake news,” saying the public wants “border security and extreme vetting.” “Any negative polls are fake news, just like the CNN, ABC, NBC polls in the election. Sorry, people want border security and extreme vetting,” he tweeted. Trump also said that “everyone knows” he calls his own shots, “largely based on an accumulation of data.” “I call my own shots, largely based on an accumulation of data, and everyone knows it. Some FAKE NEWS media, in order to marginalize, lies!” he tweeted. A CNN/ORC poll released Sunday found that most Americans oppose Trump’s executive order on immigration. CNN’s Brian Stelter pointed out that the news network showed results from the poll around 30 minutes before Trump’s tweets. More:


CNN says it passed on booking Conway for Sunday show


CNN said Monday that it passed on booking Kellyanne Conway as a guest for a Sunday morning political show, needling President Trump’s top aide on Twitter. “. @KellyannePolls was offered to SOTU on Sunday by the White House,” the CNN Communications account tweeted Monday, referring to its “State of the Union” show. “We passed. Those are the facts.”  The New York Times reported Sunday that CNN had decided not to put Conway on as a Sunday guest partially because of “serious questions about her credibility.” Mika Brzezinski, the co-host of MSNBC’s “Morning Joe,” also took to Twitter to knock Conway. CNN on Monday was responding to a tweet from Conway, who denied that she was passed over and claimed she wasn’t able to go on shows this weekend. “False. I could do no live Sunday shows this week BC of family,” she tweeted. “Plus, I was invited onto CNN today & tomorrow. CNN Brass on those emails.” Vice President Pence was interviewed on the Sunday morning political shows this weekend, but skipped CNN. Conway faced backlash this weekend after pointing to a terrorist attack that never happened during her defense of Trump’s executive order temporarily barring refugees and people from seven predominately Muslim countries from entering the U.S. During an interview last week with MSNBC’s “Hardball,” Conway referenced the “Bowling Green massacre,” an event that never happened.

“President Obama had a six-month ban on the Iraqi refugee program after two Iraqis came here to this country, were radicalized, and they were the masterminds behind the Bowling Green massacre,” Conway said during the MSNBC interview. “Most people don’t know that because it didn’t get covered.” Conway later corrected herself in a tweet following the interview, which included a link to a 2013 ABC News report that referenced two terrorists from al Qaeda in Iraq who had been living in Bowling Green, Ky. The report said the State Department halted Iraqi refugee requests for six months in 2011 as a result of the case.

Over the weekend, Conway sought to defend herself, saying she “misspoke one word.” She called some of those who criticized her for the misstatement “haters.” She also spurred controversy last month when she said White House press secretary Sean Spicer provided “alternative facts” to reporters during his first briefing.


Decoding Stephen Miller’s Nationalist Mind


In the opinion section of last Wednesday’s New York Times, journalist Masha Gessen and retired tennis star Martina Navratilova wrote an article on their feelings about the recent immigration restrictions ordered by Donald Trump. “This anger and despair make both of us feel as if we are losing our home,” they wrote. Since both writers had themselves immigrated to the United States, “home,” rather than being a place of birth, was somewhere that gave them “a sense of safety, a sense of familiarity, a sense of inhabiting space with certainty, a sense, indeed, of the certainty of that space—the opposite feeling of having the rug pulled out from under your feet.” This was all understandable—and sad. At the same time, their sentiments opened an unlikely window on the thinking of Trump’s chief advisers. Trumpism—along with its leaders in the White House—is often rejected as a doctrine of simple racism or ethno-nationalism. But such pejoratives obscure that it’s a mostly coherent system of belief (in contrast to the thoughts of Trump himself), one that’s more vulnerable than most to hijacking by racial extremists (take a bow, Richard Spencer), but still—for now, God help us—separate from them. A few years back, Stephen Miller, a White House senior policy adviser at whose feet much of the tumult resulting from Trump’s immigration order has been laid, madesome brief remarks at a conservative gathering in Palm Beach. “One of the things that we’re missing from our political dialogue right now is the idea that the United States is a home,” said Miller, who was then a staffer for Jeff Sessions. “It is more than an accounting sheet. It is more than the sum of its G.D.P., its total tax collections, or its total outlays. America is a family.” What threatened the American family and home, said Miller, was a government that cared more about numbers pleasing to business interests than to the concerns of those whom it was supposed to represent. With its push for ever-lower barriers to migration or trade, he explained, Washington was abandoning the “real flesh-and-blood citizens who together create this body politic, this nation, this home, represented by that flag.” This has been a staple of the belief system among Trump’s senior staffers: America is a home, not an economy, and the economy must serve the home, not the other way around.

What Miller left unsaid, but implied, was also the contrast between home and doctrine. For the past two decades, prevailing opinion has embraced the idea of the United States as an “experiment,” a “propositional nation” or “creedal nation,” as Irving Kristol described it in 1995. In contrast to older nations, America is bound together by people “dedicated to the proposition” of constitutional democracy as laid out by Lincoln. It’s an appealing idea for a great number of reasons. It helps bridge our ethnic divisions, and it gives newcomers a fast track to assimilation. That citizenship is an act of will, a buy-in rather than something more organic, helps remove nationhood from the realm of “blood and soil,” a conception of nationhood that predated the Nazis but won’t soon recover from their embrace.


Group behind Women’s March to launch strike


The group behind the Women’s March on Washington in protest of Donald Trump‘s presidency announced plans for a strike. In social media posts, the Women’s March group announced a “General Strike: A day without a woman.” The date and other details about the strike were not immediately clear. Hundreds of thousands of protesters gathered in cities across the world on Jan. 21 to march on Trump’s first full day in office to voice opposition to his policies. The plans, hatched just after Trump’s Election Day victory, began with a march in Washington and quickly ballooned into a massive protest that sparked sister demonstrations around the world. The Women’s March group is now organizing in local communities to keep people involved in politics.


North Carolina’s bathroom law puts NCAA events at risk: official


North Carolina is close to losing NCAA championship events for six years at a cost of more than $250 million because of a law that restricts bathroom access for transgender people, a local sports official told state lawmakers on Monday. The governing body for U.S. college athletics is reviewing bids to host events through spring 2022, including 133 from North Carolina cities and universities, said Scott Dupree, executive director of the Greater Raleigh Sports Alliance. The law known as House Bill 2, which bars transgender people from using government-run restrooms that match their gender identity and limits local nondiscrimination protections, will doom the state’s chances, Dupree wrote in a letter. “Our contacts at the NCAA tell us that, due to their stance on HB 2, all North Carolina bids will be pulled from the review process and removed from consideration,” said Dupree, adding he was sharing the information on behalf of the North Carolina Sports Association. The NCAA did not respond to a request for comment. The organization has already moved championship events, including two rounds of the prominent Division I men’s basketball tournament, from the hoops-loving state for the current academic year in protest at the measure. “In a matter of days, our state’s sports tourism industry will suffer crushing, long-term losses and will essentially close its doors to NCAA business,” Dupree said. “Our window to act is closing rapidly.” Adopted last March by North Carolina’s Republican-controlled legislature, the law prompted legal challenges, boycotts by corporations and entertainers, and the relocation of the National Basketball Association’s 2017 All-Star Game. More:


Claims of ‘Homosexual Agenda’ Help Kill Hate Crimes Laws in 5 States


Last year, lawmakers in South Carolina introduced legislation that would have increased the standard penalties for anyone who assaults, intimidates or threatens another individual if they did so because of the victim’s “race, religion, color, sex, age, national origin, or sexual orientation.” Drafted by Democratic legislators after white supremacist Dylann Roof murdered nine African-American parishioners at a church in Charleston, the bill never even came up for a vote. It was a familiar fate. In recent years, at least a half-dozen other hate crimes proposals have died in the South Carolina statehouse. Much the same story played out in Indiana, where Republican state Sen. Susan Glick authored similar legislation in 2016; Glick’s bill would have increased time behind bars for those convicted of harming or intimidating someone if the assailant’s motivation was driven by the victim’s gender identity, disability, sexual orientation, race, religion or immigration status. The legislation passed in the Senate by a vote of 34-16 but died in the House without so much as a hearing. Since the 1980s, nearly every state in the union has enacted some sort of hate crimes law, as have Washington, D.C., and the federal government. While the laws vary from state to state, they generally bolster penalties for those who commit crimes — assault, vandalism, credible threats of physical violence, among others — because of some sort of bias against the victim. South Carolina and Indiana are among a small handful of states that have failed to pass such laws. Wyoming, Arkansas and Georgia are the other hold-outs. Much of the opposition to creating hate-crime legislation in these states has come from well-organized groups of Christian fundamentalists who on religious grounds disapprove of any sort of legal protections for gays, lesbians and transgender people. For these critics, the primary concern is legal language stepping up punishment for crimes motivated by contempt for the LGBT populace, measures they view as a small but dangerous part of a broader “homosexual agenda.” One of the Christian groups is the Family Research Council. Contacted by ProPublica, the FRC’s national office directed questions about hate crimes to Ryan McCann, an Indiana activist and lobbyist who works with the organization. McCann views hate crimes laws as a sort of Trojan Horse: If Indiana adopts such a law, McCann said, LGBT advocates will use the precedent to argue for further legal safeguards, including anti-discrimination statutes, which he opposes. More:


‘If something happens’: Trump points his finger in case of a terrorist attack


President Trump appears to be laying the groundwork to preemptively shift blame for any future terrorist attack on U.S. soil from his administration to the federal judiciary, as well as to the media. In recent tweets, Trump personally attacked James L. Robart, a U.S. district judge in Washington state, for putting “our country in such peril” with his ruling that temporarily blocked enforcement of the administration’s ban on all refugees as well as citizens of seven majority-Muslim countries from entering the United States.

“If something happens blame him and the court system. People pouring in. Bad!” Trump wrote in a tweet Sunday. Then on Monday, Trump seemed to spread that blame to include news organizations. In a speech to the U.S. Central Command, the president accused the media of failing to report on some terrorist attacks for what he implied were nefarious reasons. “ISIS is on a campaign of genocide, committing atrocities across the world,” Trump told commanders at MacDill Air Force Base in Tampa, using an acronym for the Islamic State terrorist group. He added: “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.


WH list of terror attacks misspells San Bernardino


The White House misspelled San Bernardino, Calif., in its Monday evening list of terrorist attacks it says “have not received the media attention they deserved.” The list calls the Dec. 2, 2015, mass shooting the “San Bernadino” attack before accurately stating that the “coordinated firearms attack” was perpetrated by “two US persons” who killed 14 people and wounded 21 others. Rep. Mark Takano (D-Calif.) criticized the spelling error late Monday. “If the White House didn’t know how to spell San Bernardino they should’ve read one of thousands of heartbreaking articles remembering victims,” he tweeted. Rep. Pete Aguilar (D-Calif.) also lashed out about the misspelling on Twitter, saying Trump was exploiting “our community to justify your #muslimban.” Monday’s list additionally includes repeated misspellings of “attacker” and “attackers” as “attaker” and “attakers,” respectively. The White House distributed Monday’s list to illustrate how “most” of the noted attacks had not received adequate media coverage. The list spans from September 2014 to December 2016 and contains 78 attacks planned or carried out by followers of the Islamic State in Iraq and Syria (ISIS) both at home and abroad. The collection includes major attacks such as San Bernardino and the November 2015 massacre in Paris that dominated news coverage for weeks. It also listed strikes overseas that received limited media attention in the U.S., including killings in Dhaka, Bangladesh and Zvornik, Bosnia. “Since ISIS declared its caliphate, there has been a major attack targeting the West executed or inspired by the group more than once every two weeks,” the White House said. Officials distributed the document hours after President Trump accused the media of failing to report on terrorist attacks. “It’s gotten to a point where it’s not even being reported,” he said at MacDill Air Force Base in Tampa, Fla. “And in many cases, the very, very dishonest press doesn’t want to report it.”


Why did the USDA shut down an online animal abuse database?


An online database documenting animal abuse suddenly disappeared from the United States Department of Agriculture (USDA) website on Friday, sparking outrage among animal rights activists. Thousands of inspection reports and other information documenting animals mistreated, injured, or killed at research laboratories, zoos, puppy mills, and elsewhere were removed due to privacy concerns, said the USDA’s Animal and Plant Health Inspection Service (APHIS) in a statement. But some animal welfare groups believe the move was in response to pressure from industries that rely on animals, as advocates for such businesses have long fought against what they see as excessive government oversight influenced by animal rights groups. “There has been tremendous pushback from the industries that exploit animals because the information in that database was used to publicize and expose the abuse of animals,” Michael Budkie, the executive director of Stop Animal Exploitation NOW!, told CNN. “Essentially this is going to help labs and animal dealers and animal breeders who break the law to remain undetected and out of the public eye, because it will slow down the process of obtaining information.” The shutdown has been decried by animal rights advocates as a reversal of the progress that has been made in recent years to crack down on animal abuse. Last year, the FBI began tracking data on animal cruelty crimes, a move that was widely applauded by both law enforcement and animal activists. A number of states have also proposed or implemented animal abuser registries to ensure that listed offenders aren’t able to access animals. Advocates for businesses that rely on animals have spoken out against such registries and argued that public USDA records allow animal rights groups to target individual animal owners and animal related businesses. More:


California and President Trump are going to war with each other


President Trump had harsh words for one of his most fervent opponents during the pre-Super Bowl interview with Fox News’s Bill O’Reilly that aired Sunday. Not President Vladimir Putin, mind you, whose alleged unpleasant habit of murdering journalists met with a shrug from the president. No, Trump lashed out at the nation’s largest state, California. “I just spent the week in California,” O’Reilly said. “As you know, they are now voting on whether they should become a sanctuary state. So California and the U.S.A. are on a collision course. How do you see it?” “Well, I think it’s ridiculous,” Trump replied. “Sanctuary cities, as you know I’m very much opposed to sanctuary cities. They breed crime, there’s a lot of problems. We have to well defund, we give tremendous amounts of money to California . . . California in many ways is out of control, as you know. Obviously the voters agree or otherwise they wouldn’t have voted for me.” “So defunding is your weapon of choice?” O’Reilly asked. More:


Your Guide to the Sprawling New Anti-Trump Resistance Movement


The election of Donald Trump was a catastrophe for progressive America, but the damage may be mitigated over the long term by a remarkable surge of energy on the left in response to his election. As many as 5.2 million people participated in hastily organized Women’s Marches across the country, senators’ phones have reportedly been jammed with calls protesting Trump’s cabinet nominees and other early moves, and, according to a poll conducted by The Washington Post, more than one in three Democrats say they plan to become “more involved in the political process in the next year” as a result of the election. That’s true of 40 percent of Democratic women, and almost half of self-identified liberal Democrats. The widely held view that Trump is an illegitimate president who’s poised to enact an agenda combining the worst of House Speaker Paul Ryan’s “granny-starving” fiscal conservatism with White House consigliere Steve Bannon’s ethno-nationalism has fueled the formation of dozens of new grassroots resistance groups. Some were launched by seasoned political operatives, others by people who hadn’t engaged in activism in the past. Some were germinated during chats on long bus rides to the Women’s March. Not all of them will succeed—some false starts are a given—but like any collection of innovative start-ups, it only takes a few successes to change the landscape. Here’s an overview of some of the new efforts launched since November 9. It’s by no means comprehensive, but we started with a list of 75 new groups and whittled them down to some of the most interesting or promising. They’re not presented in any kind of ranked order. Our hope is that knowing how others are standing up to Trump will inspire more readers to get involved.




Former Alabama Gov. Don Siegelman expected to be released from prison this week


OAKDALE, La. – Former Alabama Gov. Don Siegelman, who has served a little more than five years in prison on bribery and related charges, is set to be granted home confinement for the final six months of his prison term, a former Siegelman aide told WHNT News 19 this afternoon. Siegelman, 70, is currently being housed at Oakdale Federal Correctional Institute in Oakdale, La.  His family lives in Birmingham.

Family spokesman Chip Hill said Siegelman has been told he will be released from prison on Wednesday. “He will be on very restricted supervised probation for an initial period of time,” Hill said in an email to WHNT News 19. “This is expected to be about six months.  Following that, he will be on unsupervised probation for an extended, but not yet specified, period of time. Immediately after returning home, he will report to an assigned probation officer who will provide him with much more detailed information about what restrictions he will have, including specifics regarding media access. “Naturally, his family and many friends are very excited about his release and very much look forward to seeing him,” Hill wrote.


Alabama State Rep. Jack Williams announces he will not seek re-election


Vestavia Hills-Republican, State Rep Jack Williams announced he will not not seek re-election at the end of his term Monday morning. Williams, 59, has been a member of the Alabama House of Representatives since 2004, representing House District 47, which is composed of much of the City of Vestavia Hills and the City of Hoover. “I’ve been in Montgomery for the last 12 years and have two more years to go at the end of my term and there are some other things that I have an interest in doing that doesn’t include anything in Montgomery,” Williams told Alabama Today. “I will refocus my attention then.”

The former Chairman of the Greater Birmingham Young Republicans, Williams has also served as President of the National Republican County Officials. He currently serves as the Chairman on the Alabama House Commerce and Small Business Committee. Williams made the formal announcement of his decision Monday morning in the foyer of his church in Vestavia Hills — an apt location following all of the prayers that went into his decision. “I’m grateful for the voters in District 47 and for the confidence they’ve shown in me the last three to four elections,” he told Alabama Today after the announcement. “I wanted to make announcement now, in time to give folks a chance to consider running. There are a lot of folks capable in the District.” Williams said he had privately made the decision years ago, but wanted to be sure of his choice before he formally announced it. “I probably decided a couple of years ago I wasn’t going to run again for the legislature, but didn’t want to make a decision in the heat of an election season,” Williams explained. ” But as the months have gone by, I’ve prayed about and thought about it and I’m even more confident this is the right thing for both myself and the District.”


Mystery donor gives $2.5 M to Alabama Alzheimer research


Alabama genetic scientists are beginning new research that could lead to earlier diagnosis and new treatments for Alzheimer disease. The research, which involves sequencing the complete genetic makeup of 1,500 patients, is funded by a new, anonymous gift of $2.5 million to the HudsonAlpha Institute of Biotechnology in Huntsville. “We are overwhelmed with gratitude and deeply humbled. This generous gift allows us to begin a unique Alzheimer disease project that has the potential to lead to earlier diagnosis and new treatments,” said lead researcher Dr. Rick Myers, HudsonAlpha’s president and science director. Myers’ team hopes to create an early “picture” of the disease, the institute said.

“HudsonAlpha has a rare opportunity to conduct truly groundbreaking research in Alzheimer disease through this project. What we learn could help us diagnose earlier, monitor treatments better and lead to drug discoveries for new treatments,” Myers said. The donation was made in December to the institute’s M&M Fund. That fund had a goal of $4.3 million in gifts, and the institute said it is only $400,000 away.

That gives the institute access to 750 more patient samples. In order to finish research on the entire set of patients, the institute needs another $1.5 million. “These diseases impact tens of millions of people every year, and their families as well. I believe we will change their stories through this work. It is an incredibly compelling reason to give,” Myers said.


AL bill proposes $10 minimum wage


BIRMINGHAM, AL (WBRC) – Alabama does not have a minimum wage. The federal minimum of $7.25 applies. Representative Juandalynn Givan (District-60) pre-filed a bill that will create a state minimum wage of $10 for workers. “It’s important because we have people who are barely making ends meet in the state of Alabama,” Givan said. The bill requires hourly workers get paid $10 per hour. Tipped employees must be paid at least the minimum wage, once wages and tips are combined, with a requirement that at least 30 percent come from wages. “It’s just time and it’s a uniform minimum wage act so it’s not just for one municipality versus another, it’s for the entire state of Alabama,” said Givan. Scott Dean opened Mama Goldberg’s Deli in Homewood 10 years ago. He likes being his own boss but says it can be stressful. “There’s always repairs that have to be made, small monetary things that come that you’re not expecting. You’re where the buck stops,” he explained. Costs of rent and food have gone up from year to year for Dean, and he says an increased cost for employees is inevitable. “My main concern is how much will I have to raise prices,” he said. He’s not against a higher minimum wage, adding that he already pays above the minimum. “Hopefully maybe if more people had more money they would be able to go out and spend it more. And so maybe it would counteract raising the prices just a little bit.”


Alabama Senate GOP supports income tax cuts, ending pistol permit requirement


The Alabama Senate Republican Caucus will support changes in state income tax deductions that would cut taxes for 180,000 Alabamians, the caucus announced in a press release. The caucus, which holds 26 seats in the 35-member Senate, released its agenda for the 2017 session, which starts Tuesday. The caucus will also support a bill to eliminate the requirement for a permit to carry a concealed handgun.

“I look forward to working with my colleagues as we roll up our sleeves and put in the necessary work to implement these bold reforms, which strengthen Alabama’s future and will create more opportunity for the hard-working taxpayers of this state,” Senate President Pro Tem Del Marsh said in the press release.

The income tax cuts would result from raising the income thresholds for claiming standard deductions on state income taxes. The proposal is a new one and the sponsor will be announced later this week. Sen. Gerald Allen, R-Tuscaloosa, is sponsoring a proposal to eliminate the requirement for a permit to carry a concealed pistol. It is likely to face opposition from sheriffs and police, who have previously opposed his bills to eliminate the requirement for a permit to carry a loaded pistol unlocked in a vehicle. Allen’s bill this year would go further by eliminating the requirement for concealed carry permits altogether. Ten states allow concealed carry without a permit, according to the GOP Caucus press release. If Allen’s bill became law, people would still be able to buy pistol permits so that they could carry concealed handguns in neighboring states that have reciprocity agreements with Alabama. Other items on the Senate GOP caucus agenda:


Birmingham police warn public about dangerous carjacking spree


BIRMINGHAM, Ala. (WIAT) — Several carjackings in the area have caught the attention of police due to their similarities. Police believe the suspects are black males in their teens. Birmingham Police say the suspects come up behind the car, hit it from the back and then wait for the victim to get out of the car to survey the damage. Once they do that, police say the suspects pull a gun on the victim and then steal their car and in some cases, wallets. “From what we know, we know we don’t believe they are selling the cars because they take the cars and use the same vehicles to go and commit additional robberies,” Birmingham Lt.Sean Edwards said. Police are urging people, specifically single females, to remain extremely cautious. The suspects are targeting people in the early morning hours. “If you are a single female driving your car, just be mindful. If somebody bumps your car, please pull over at a gas station, a well lit area where there’s more people there that can assist you,” Edwards said. Birmingham police say they have some strong leads in this case. These suspects are not targeting one specific area. They are spread out throughout the city. If anyone has information that can help police, call 205-254-2000


Senator discussed as candidate for ASU job to stop revolving door


An Alabama State University Board of Trustee told IAP News this week that several members are giving serious consideration to the selection of State Senator Quinton Ross as its next President.

The Trustee, who asked not be identified, said Ross was the favorite choice to be ASU President by some members in recent private talks. According to the Trustee, in 2014 Ross had also been discussed as a possible candidate for the office before the selection of former ASU President Gwendolyn Boyd.

“Senator Ross has the respect of not only students, faculty, and board members he has a great chance of being nominated when we get down to the process of hiring a new President,” said the trustee. “He graduated from the ASU…a leader…and is well regarded in the Legislature.” More:


Pre-filed Shenanigans


One can always find free entertainment by reading some of the pre-filed bills before each session of the Alabama Legislature. This year was somewhat light on crazy but there are a few gems that stick out. Be sure to watch these puppies as the legislature begins the 2017 session this week. Senator Phil Williams is the sponsor of the so-called Alabama Privacy Act. Counter-intuitively the centerpiece of the Alabama Privacy Act requires operators of public bathrooms to provide a monitor for the activities going on inside the bathroom. This bill is a self-inflicted wound to common sense. Legislation introduced by Sen. Trip Pittman brings new life to the firing squad – In a parting “shot” to his tenure in the Senate, Pittman would like to re-introduce the firing squad as one of three possible methods of execution a doomed inmate can elect. Pittman has announced he will not run again for the Alabama Senate. But before he leaves he seems to want to give condemned prisoners one last chance to save the state some money and go out with a bang. Well at least Pittman is not trying to limit the choices of Alabamians.

Fantasy Sports Contest Act by Sen. Tom Whatley – Bingo by another name his bill creates a regulatory scheme for operators of fantasy sports contests. Why is this necessary you ask? Because without a regulatory scheme for this purpose then “fantasy sports games” start to look almost indistinguishable from “illegal Bingo games” through the lens of Alabama law. With so many uptight ‘conservatives’ who rend their garments at the thought of gambling, re-framing the argument with a more palatable window dressing is key. With the amount of money moving around with DraftKings, FanDuel and other online fantasy sports betting some states are starting to see the burgeoning industry as a potential source of tax revenue. However the state would probably make a better bet with reforms to and legalization and taxation of casino gaming. Alabama Church Protection Act by Rep. Lynn Greer – Alabama citizens already have a legal right to keep and bear firearms and it is already legally permissible to defend your life and the lives of others with deadly force under limited circumstances. The bill would “authorize the governing body of any church or place of worship to establish a security program by which designated members are authorized to carry firearms for the protection of the congregation of the church or place of worship.” Churches of course are already authorized to do this, but Rep. Greer’s church protection act extends additional legal protections to a church’s security force, provided the members of the security force are trained through a process regulated by the Alabama Law Enforcement Association.

Days numbered for death penalty reverses? A pair of bills HB32 (introduced by Democratic Rep. Chris England) and SB16 introduced by (Republican Sen. Dick Brewbaker) could spell the end of Alabama judges reversing a jury’s recommendation of life in prison to the death penalty. Under existing law, in a capital case, the jury may recommend to the court the sentence of a person convicted of a capital offense, but the court is not required to accept the jury’s recommendation. Both bills call for the judge to follow the jury’s recommendation in a capital case. England’s bill goes one step further requiring a unanimous vote of a jury to recommend death, under current law 10 of 12 jurors can move forward with a death sentence. A pair of cases last year in Federal court found the practice of judicial override for jury’s recommendation of life in prison in favor of a death sentence was unconstitutional in Delaware and Florida, the only other states who have not outlawed this practice. Another Federal case took exception to non-unanimous death sentences. Last year the Supreme Court of the United States sent back three death-penalty cases to lower courts for reconsideration. With Alabama already in hot water with the Feds over prison conditions (see elsewhere) SCOTUS and 11th Circuit Court could have a lot more to say about Alabama justice in the coming year.




I Was on the National Security Council. Bannon Doesn’t Belong There.


In his first weeks in office, President Trump has outlined plans to reorganize the White House’s National Security Council. This is in keeping with tradition: New presidents regularly reconfigure the council to fit their management style and national security priorities. Some of Mr. Trump’s plans, such as including the director of the C.I.A. as a full voting member of the council, are welcome. But some of Mr. Trump’s other plans are unsettling and should be remedied as soon as possible — in particular the role he has given to his top political adviser, Stephen K. Bannon. What’s more, according to Mr. Trump’s plans for the National Security Council, neither the chairman of the Joint Chiefs of Staff, the nation’s highest-ranking military officer and the president’s primary military adviser, nor the director of national intelligence, the president’s primary intelligence adviser, will be a permanent member of the council’s “principals committee,” a core group responsible for formulating policy. President George W. Bush’s council, on which I served from 2007 through 2009 as chairman of the Joint Chiefs of staff, was arranged similarly to Mr. Trump’s. But it bears noting that under President Obama, both the director of national intelligence and I were permanent members of the principals committee, codifying the importance of these positions. In my experience there are very few — if any — meetings of the principals committee at which the input of the military and the intelligence community is not vital. With an increasingly belligerent Russia, tensions in the South China Sea and a smoldering Middle East, it makes little sense to minimize the participation of the professionals leading and representing these two groups. More:


Why We’re Calling for Congress to Impeach Donald Trump


Nelson is a retired Justice of the Montana Supreme Court and a member of the Legal Advisory Committee for Free Speech For People. Bonifaz is the co-founder and president of Free Speech For People.

It has been widely acknowledged that, upon swearing the Oath of Office, President Donald Trump would be in direct violation of the foreign-emoluments clause of the U.S. Constitution.

Never heard of the foreign-emoluments clause? You’re not alone. It’s tucked away in Article I, Section 9, of the Constitution. It’s clause number 8. It states, in pertinent part: “… no person holding any Office of Profit or Trust under [the United States], shall, without the Consent of the Congress, accept of any present, Emolument, Office or Title of any kind whatever, from any King, Prince or foreign State.”

This clause was included in the Articles of Confederation and, later, in the Constitution itself. It was borne out of the Framers’ obsession with preventing in the newly minted United States the sort of corruption that dominated 17th and 18th century foreign politics and governments — characterized by gift-giving, back-scratching, foreign interference in other countries and transactions that might not lead to corruption but, nonetheless, could give the appearance of impropriety. Where Trump runs afoul of the foreign-emoluments clause is that, first and foremost, he is a businessman with significant financial interests and governmental entanglements all over the globe. Indeed, as Norman Eisen, Richard Painter and Laurence Tribe stated at the Brookings Institution, “Never in American history has a [President] presented more conflict of interest questions and foreign entanglements than Donald Trump.” Moreover, Trump’s businesses dealings are veiled in complicated corporate technicalities and lack transparency. More:


A letter to GOP voters: You’re being conned


Dear Republican voter,

You’re a fool. I say that in the nicest possible way. I say that with a tone of pity, instead of a tone of condescension. I say that because I want to help you, and in turn help all the rest of us. But mostly I say it because you’ve been tricked time and again – like a bunch of Charlie Browns trying to kick the same football – into believing that the shiny, controversial, fringe issue is of utmost importance and should take all of your focus while the other boring, policy stuff should be left up to the lawmakers who have your interest at heart. Those lawmakers have played you for a fool. If you doubt this, take just a moment and do one thing for me. Look around you. Take a long, hard look at the state where you live. Look at the poverty. Look at the poor-performing schools. Look at the lack of hospitals and doctors. Look at the lack of quality jobs. Look at the crumbling infrastructure. Look at the jam-packed prisons. Look at the budget shortfalls. Look at the undrinkable tap water and unfishable rivers. Look at it all. Now, ask yourself how it got that way. It sure didn’t come from progressive, liberal governance, because we’ve never had that. And it sure hasn’t come from a focus on the real issues. Nor has it come because our lawmakers have ever once focused specifically on what’s good for the average Alabamian instead of on what’s good for the wealthy Alabamian. And the way they have been able to get away with this top-level mooching for so long is simple: Distraction. It’s the oldest con game in the book. Distract with movement or shiny objects over here while you pull off the trick over there. There have been a steady flow of distractions for years: civil rights, gay marriage, abortion, immigration. This session of Alabama’s legislature will be no different. You can see it in the pre-filed bills and the Republican agenda. (I’d mention the Democratic agenda, but it’s simply to remain irrelevant, so there’s no point.) There are the usual bills targeting abortion laws, which usually wind up only costing us hundreds of thousands of dollars to unsuccessfully defend in court. The GOP agenda calls for more of the abortion bills, and it pushes others on immigration and protecting Confederate memorials. Here’s what’s not in that agenda and not in any pre-filed, Republican legislation: ideas for fixing the state’s crumbling health care industry, ideas for properly funding government for an extended period without cutting necessary services or ideas for repairing the infrastructure issues.

Look, you can be as passionate as you want about abortion, immigration, gay marriage, minority voting rights and guns, but none of those things are going to be solved by any bill that passes in this state. Those are federal issues. So, while passing a “right to life” amendment might make you feel good, it’s actually doing the opposite. Because while you were allowing our lawmakers to focus on that nonsense, real health care issues, like funding Medicaid, were going unaddressed. And believe it or not, that matters to you. Even if you don’t know anyone on Medicaid, it matters. Because when those who live around you are unable to get decent, basic care, and their simple illnesses cause complicated illnesses, you wind up paying more, the businesses around you lose their employees and pay more in insurance costs and a family that relies on the labor of that person loses its breadwinner. These are things that should matter to you. These are the things that should drive you to elect better, smarter, more honest people. But they don’t. Time and again, you fall for the shiny ball trick, and we wind up with a bunch of crooks who just keep lining their own pockets at our expense. And it makes us all look like fools. Do better, Josh Moon


Morning Money

FSOC CLASH AHEAD? — A former Treasury staffer notes to MM that President Trump’s executive action on financial regulation directs the Treasury secretary to consult with members of the Financial Stability Oversight Council and report within 120 days on regulations that might violate a series of “core principles.”

That means the report could come around the same time that FSOC typically releases its annual report that usually includes emerging potential risks to the financial system. Non-political, professional staff members are already hard at work on that report.

So will the new Treasury team, once there is a confirmed secretary, try and slow down that work? Or influence the results so they don’t conflict with the separate report to the president intended to lessen or simply existing regulations? “It raises a whole bunch of questions. Will they put blinders on about risks to the financial system?” the source asked.

CORPORATE BACKLASH TO TRUMP GROWS — POLITICO’s Ben White and Tony Romm: “The resistance to President Donald Trump’s agenda is spreading fast across corporate America. Technology giants like Google and Facebook are leading the movement. But more traditional American brands like Budweiser, Coca-Cola and 84 Lumber used the Super Bowl, watched by more than 100 million people, to brand themselves in sharp contrast to Trump’s nationalist agenda on immigration and trade.

“An early calculus is developing around American board rooms from Silicon Valley to the heartland to New York: While taking on Trump risks sparking anger from an irascible and highly voluble president, staying quiet and potentially alienating customers and employees could be much worse in the long run.” Read more.


SCARAMUCCI BACK IN? — NYPost’s Josh Kosman: “Anthony Scaramucci’s bid to work at the White House isn’t dead yet — and it may get a new lease on life from Stephen Schwarzman. Wall Street insiders say ‘The Mooch’ may find a surprise advocate in Schwarzman, the New York-based buyout king, as he fields questions from the Trump administration over his business dealings with a China-based investment firm.

“That’s partly because Schwarzman’s private-equity firm, Blackstone Group, cut a deal last October with the same Chinese outfit, HNA Group, to sell a 25 percent stake in Hilton Worldwide Holdings for $6.5 billion. HNA attracted scrutiny last month when, along with the little-known firm RON Transatlantic, it agreed to buy Scaramucci’s hedge fund, SkyBridge Capital, for more than $200 million.” Read more.

ANOTHER Q1 SLOWDOWN AHEAD? — The first growth numbers for the Trump era will certainly matter. And they may not be great. Pantheon’s Ian Shepherdson: “Two factors … suggest that we should be skeptical, at least, of the idea that headline GDP growth will be robust in the first quarter … First, the drop in January auto sales and the very warm weather, relative to seasonal norms, mean that real consumption very likely fell outright in the first month of the quarter …

“Second, the long-standing problem of the first quarter seasonal adjustments appears to linger. Reported growth in the first quarter has undershot the average pace for the previous three quarters in six of the past eight years, with a median gap of 2.2 percentage points … That’s more than enough to make a meaningful difference to perceptions of the strength of the economy.”

PUZDER HAS A NANNY PROBLEM — HuffPo’s Ryan Grim: “Trump’s nominee to run the Department of Labor, Andrew Puzder, employed an undocumented immigrant as household help, Puzder has informed members of the administration and officials in the Senate involved in his confirmation process.

“Hiring undocumented workers has sunk nominees in the past, particularly when it reflects directly on the scope of the Cabinet position. But Trump transition officials told Puzder that the previous rules for vetting and strict ethics no longer applied. ‘The view in the transition was that’s the old model,’ said one GOP official involved with Puzder’s nomination.” Read more.

HuffPo’s Sam Stein tweets: “Andy Puzder’s hearing has been postponed again, the HELP committee announces.”

REACT — Allied Progress’s Karl Frisch: “Late tonight we learned that the GOP Senate has delayed Trump Labor nominee Andy Puzder’s confirmation hearing for a FIFTH TIME with no explanation. What are they hiding? Each time this hearing is delayed, we’ll send this statement out just like we did after the third and fourth delay.”

DAILY SAY WHAT? — POLITICO’s Annie Karni, Josh Dawsey, and Tara Palmeri have a jaw dropper on Trump being upset by the goofy (and hilarious) Melissa McCarthy spoof of WH press sec Sean Spicer: “More than being lampooned as a press secretary who makes up facts, it was Spicer’s portrayal by a woman that was most problematic in the president’s eyes, according to sources close to him.

“And the unflattering send-up by a female comedian was not considered helpful for Spicer’s longevity in the grueling, high-profile job, where he has struggled to strike the right balance between representing an administration that considers the media the ‘opposition party,’ and developing a functional relationship with the press.” Read more.

MM doesn’t really have words for how weird this is.

STOCKS WOBBLE — Reuters: “Appetite for Asian stocks and the euro ebbed on Tuesday as a rising tide of economic and political concerns added to anxiety … Overnight, both U.S. and European stocks dropped. Wall Street dipped as much as 0.2 percent, led lower by the energy sector as oil prices fell, with investors still waiting for details of … Trump’s economic policies.

“Declines in European shares came on the heels of the French presidential campaign launch of far-right National Front Leader Marine Le Pen on a platform pledging to fight globalization and take France out of the European Union.” Read more.

TRUMP BARRED FROM U.K. PARLIAMENT — Bloomberg: “Trump must not be allowed to address the U.K. Parliament during a state visit to Britain, House of Commons Speaker John Bercow said. Prime Minister Theresa May invited Trump to visit the U.K., but there have been calls by lawmakers not to give the president the honor of addressing both houses of Parliament after he introduced a ban on people from some majority-Muslim countries traveling to the U.S. …

“Trump’s predecessor, Barack Obama, and world leaders including Nelson Mandela, Angela Merkel and Pope Benedict XVI have all been invited to speak to members of the House of Commons and the House of Lords. The White House did not respond to a request for comment on Bercow’s announcement.” Read more.

DRIVING THE DAY — San Francisco appeals court at 3:00 p.m. Pacific time hears oral arguments in the case of the State of Washington vs. Trump that essentially halted the administration’s travel ban. The arguments are expected to be made by phone and web cast … House Financial Services has an organizational meeting at 10:00 a.m. …. International trade at 8:30 a.m. expected to show deficit unchanged at $45.0B … The Hamilton Project at Brookings holds a forum on “Identifying a Fiscally Responsible Approach to Funding Infrastructure” at 8:30 a.m.

PAY RULE TARGETED BY SEC — WSJ’s Andrew Ackerman: “The acting head of the [SEC] is quickly targeting rules long-loathed by the business community, moving for the second time since Inauguration Day to ease some Dodd-Frank financial-overhaul requirements.

“Republican Michael Piwowar, who took over shortly after the inauguration, signaled Monday that the commission would take a fresh look at new requirements that companies disclose the pay gap between chief executives and their employees. The move shows the extent to which officials under the Trump administration could press at the agency level to ease Obama-era initiatives they oppose without waiting on Congress to act.” Read more.

KLARMAN WARNS ON TRUMP — NYT’s Andrew Ross Sorkin: “He is the most successful and influential investor you have probably never heard of. His writings are so coveted and followed by Wall Street that a used copy of a book he wrote several decades ago about investing starts at $795 on Amazon, and a new copy sells for as much as $3,500.

“He is Seth A. Klarman, the 59-year-old value investor who runs Baupost Group, which manages some $30 billion. In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing
‘perilously high valuations.’

“‘Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,’ he wrote.” Read more.

TRUMP TEAM TRIES TO MEND FENCES ON HILL — POLITICO’s Josh Dawsey, Shane Goldmacher, Eli Stokols, and Matthew Nussbaum: “Kellyanne Conway, one of … Trump’s most prominent aides, trekked to Capitol Hill Monday morning on a diplomatic mission – to reassure the 100 or so Senate GOP communications staffers that Trump has no intention of acting unilaterally with a pen and a phone, while neglecting Congress.

“Instead, a number of aides were left wondering if the White House is truly hearing their concerns. After touting last week’s smooth rollout of Supreme Court nominee Neil Gorsuch, Conway faced questions about the tens of thousands of calls and emails that GOP senators have received about education secretary nominee Betsy Devos.” Read more.

LENDING CLUB’S LEGAL BATTLE — POLITICO Pro’s Colin Wilhelm: “Moody’s ratings service says a victory by Lending Club in a legal battle with borrowers is a ‘credit positive’ for the business model used by marketplace lenders.

“A judge in the Southern District of New York granted the marketplace lender’s motion to compel arbitration and stay a class action lawsuit brought by borrowers against the lending site and its partner bank, the Utah state-chartered WebBank.” Read more.

JUDICIAL OVER-REACH? — FT’s Barney Jopson: “Trump’s legal battle over a controversial travel ban will move to an appeals court hearing on Tuesday where his administration will argue that a judge’s injunction against it was ‘vastly overbroad’.

“A federal appeals court in San Francisco said it would hear testimony in the case on Tuesday afternoon as ructions over the ban dominate the early weeks of the Trump presidency.” Read more.

TRUMP VS. CORDRAY — POLITICO Pro’s Lorraine Wollert and Josh Dawsey report: “Allies of … Trump are building a legal case for ousting Richard Cordray, the director of the Consumer Financial Protection Bureau who one court called ‘the single most powerful official’ in government after the president.

“Cordray has long been in the crosshairs of free-market conservatives and lawyers, and now some are informally compiling a dossier that would give Trump cover to fire him, should he choose to do so, for ‘inefficiency, neglect of duty, or malfeasance.’ Those are the only conditions under which the director can be removed.” Read more.

IF MM HAD A NICKEL … for every day we hear rumors that Cordray’s firing is imminent … well, we’d have a bag of nickels.

A MORE CAUTIOUS TONE — Bloomberg’s Julie Verhage reports: “‘Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration,’ Goldman Sachs Group Inc. economists led by Alec Phillips wrote in note published late last week.

“‘One month into the year, the balance of risks is somewhat less positive in our view.’ Goldman’s Phillips cites three key reasons for the more cautious tone.” Read more.

BAN HITS BUSINESS TRAVEL — NYT’s Martha White: “The Trump administration’s executive order on Jan. 27 barring citizens of seven Muslim-majority nations from entering the United States has had diplomatic and legal reverberations. But the order hit much closer to home for the professionals who oversee and coordinate everything from small board meetings to huge conventions in the increasingly global business of corporate travel.”

“A quick survey by the Association of Corporate Travel Executives, conducted three days after the executive order was issued, found that the repercussions in the business travel community were swift. Nearly four in 10 executives said the travel ban would curtail their company’s business travel.” Read more.

DRAGHI PUSHES BACK — FT’s Claire Jones: “Mario Draghi has pushed back against the new US administration on issues ranging from financial regulation and protectionism to the valuation of the euro, underlying the scope for transatlantic discord as … Trump’s team advances its America First agenda.

“In a question-and-answer session with the European Parliament, the European Central Bank president registered his concern at the White House’s plans to roll back the US’s 2010 Dodd-Frank financial regulations and Mr Trump’s hostility to multilateral trade deals.” Read more.

“WALL STREET FIRST” AGENDA — POLITICO Pro’s Zachary Warmbrodt: “House Democrats today blasted Republican plans for undoing the 2010 Dodd-Frank law but said they were still willing to revisit financial regulations for small banks and credit unions.

“House Minority Leader Nancy Pelosi and Financial Services Committee ranking member Maxine Waters said … Trump was pursuing a ‘Wall Street first’ agenda, after the administration on Friday released executive orders that opened the door to further deregulation.” Read more.

GOLDMANS BILLION-DOLLAR DISPUTE — Reuters’ Eveline Danubrata: “Indonesia will hold a court hearing on Tuesday into a billion-dollar dispute between Goldman Sachs and a local tycoon, who says the Wall Street giant’s unit unlawfully sold shares he owned, in the latest test for the country’s legal system.

“Goldman took the unusual step of counter-suing the tycoon – Benny Tjokrosaputro – for reputational damage. The hearing on Tuesday will give the retail-to-property businessman a chance to rebuff Goldman’s assertion.” Read more.

FOX PROFIT JUMPS — WSJ’s Keach Hagey: “21st Century Fox Inc. posted a 27 percent increase in profit for the most recent quarter, driven by stronger advertising and affiliate fees at its broadcast and cable-television segments.

“After years of being a laggard, the Fox network was the star of the quarter, thanks to strong advertising revenue from sports events such as the World Series, higher spending on political advertising and higher fees from distributors. The broadcaster helped push television segment revenue up 12% in the quarter. Politics and sports also helped boost revenue and profit at the cable division, home to Fox News and the FS1 sports network.” Read more.

VIOLA GOES SILENT — Via DefenseNews on high-Frequency trading billionaire Vincent Viola’s dropping out for Secretary of the Army: “[A]ccording to sources close to the process, there was little to no pre-vetting for Trump’s service secretary picks.'” Read more.

POTUS Events

9:00 am || Recieves his daily intelligence briefing
9:30 am || Meets with county sheriffs; Roosevelt Room
10:45 am || Meets with Veterans Affairs officials; Roosevelt Room
1:30 pm || Meets with House Oversight Committee Chairman Rep. Jason Chaffetz, R-Utah
3:00 pm || Meets with Secretary of State Tillerson
5:00 pm || Hosts Green Berets Qualification Course Young Officers

Floor Action

The House meets at 10 a.m. with first votes at 1:30 p.m. and last votes around 5:15 p.m. Today’s agenda: The Senate holds a vote around 12 p.m. on DeVos’ Education secretary nomination.



Early Withdrawals from Retirement Plans


Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of income tax taxpayers may have to pay. Here are a few key points to know about taking an early distribution:

  1. Early Withdrawals. An early withdrawal normally is taking cash out of a retirement plan before the taxpayer is 59½ years old.
  2. Additional Tax. If a taxpayer took an early withdrawal from a plan last year, they must report it to the IRS. They may have to pay income tax on the amount taken out. If it was an early withdrawal, they may have to pay an additional 10 percent tax.
  3. Nontaxable Withdrawals. The additional 10 percent tax does not apply to nontaxable withdrawals. These include withdrawals of contributions that taxpayers paid tax on before they put them into the plan. A rollover is a form of nontaxable withdrawal. A rollover occurs when people take cash or other assets from one plan and put the money in another plan. They normally have 60 days to complete a rollover to make it tax-free.
  4. Check Exceptions. There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs.
  5. File Form 5329. If someone took an early withdrawal last year, they may have to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with their federal tax return. Form 5329 has more details.
  6. Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is the easiest and most accurate way to file a tax return. The tax software that taxpayers use to e-file will pick the right tax forms, do the math and help get the tax benefits they are due. Seven out of 10 taxpayers qualify to use IRS Free File tax software. Free File is only available through the IRS website at

More information on this topic is available on

About Thomas Krebs

Securities litigation, regulation and compliance attorney.