Health Secretary Resigns After Drawing Fire for Expensive Chartered Flights

From today’s New York Times by Peter Baker:

Tom Price, the health and human services secretary, resigned under pressure on Friday after racking up at least $400,000 in travel bills for chartered flights and undermining President Trump’s promise to drain the swamp of a corrupt and entitled capital.

Already in trouble with Mr. Trump for months of unsuccessful efforts to repeal and replace President Barack Obama’s health care program, Mr. Price failed to defuse the president’s anger over his high-priced travel by agreeing to pay a portion of the cost and expressing “regret” for his actions.

“I’m not happy, O.K.?” Mr. Trump told reporters as he was about to head to his New Jersey golf club for the weekend, barely an hour before the resignation was announced. “I can tell you, I’m not happy.” He called Mr. Price “a very good man” but added that the secretary’s offer to reimburse the government for just part of the cost of the flights “would be unacceptable.”

The White House announcement of Mr. Price’s departure was spare, with none of the customary praise of his work or thanks for his service. The statement issued by the White House press secretary, Sarah Huckabee Sanders, said simply that Mr. Price had “offered his resignation earlier today and the president accepted.”

Mr. Trump tapped Don J. Wright, a deputy assistant secretary for health and the director of the Office of Disease Prevention and Health Promotion, to serve as acting secretary. Possible candidates for a successor include Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, and Scott Gottlieb, the commissioner of the Food and Drug Administration.

Read the complete article here.

How to Restore Government Ethics in the Trump Era

From today’s New York Times by Walter Shaub, Director of the United States Office of Government Ethics:

Shortly after his inauguration, President George H. W. Bush counseled freshly minted White House appointees that, “It’s not really very complicated. It’s a question of knowing right from wrong, avoiding conflicts of interest, bending over backwards to see that there’s not even a perception of conflict of interest.” He paired this straightforward declaration with action, establishing unified standards of conduct for the executive branch and resolving his own conflicts of interest. These words and deeds set the tone for ethical governance.

Since the enactment of the Ethics in Government Act, our past presidents entered government with an appreciation for the importance of tone from the top. Though exempt from the conflict of interest statute, which bars other officials from working on matters affecting their financial interests, they all voluntarily divested conflicting holdings and put the proceeds in blind trusts or nonconflicting assets. They knew their exemption from the statute was not a reward for attaining high office but a pragmatic recognition that America needs its president engaged in urgent matters of state. By holding themselves to the same exacting standards as the rest of the executive branch, they sent a clear message to those serving under them.

This tradition came to an abrupt stop with President Trump. By continuing to hold onto his businesses and effectively advertising them through frequent visits to his properties, our leader creates the appearance of profiting from the presidency. As things stand, we can’t know whether policy aims or personal financial interests motivate his decisions as president. Whatever his intentions may be, the resulting uncertainty casts a pall of doubt over governmental decision-making.

This shift fundamentally changes the executive branch ethics program. I have been a student of that program since I first came to the Office of Government Ethics in 2001, appointed by Marilyn L. Glynn, then the office’s general counsel. Every past administration actively supported O.G.E.’s work and respected it for taking stands when necessary. That White House support provided the office with the leverage it needed to fulfill its mission.

I am not suggesting that it was always easy. Having served for much of my career on the front lines of the presidential nominee program, I regularly locked horns with nominees and White House lawyers in both the Bush and Obama administrations as we wrestled over our differing notions of how best to address ethical risks. Sometimes those deliberations were animated; occasionally they were heated. I am also sure that more than a few nominees felt bruised by the painful process of resolving their conflicts of interest. Even if we did not always agree, however, White House officials always understood that O.G.E.’s only goal — and, indeed, my only goal — was to protect the integrity of the government’s operations. The incidental beneficiaries of those efforts were the Bush and Obama administrations and the nominees we kept out of trouble. That’s why it is disheartening now to witness parts of the ethics program slipping away.

The Office of Government Ethics has been performing the same service it has always provided with respect to the current administration’s nominees. In fact, I have succeeded in moving President Trump’s nominees on average almost a week (six days to be exact) faster than I moved President Obama’s nominees during the last presidential transition, without compromising O.G.E.’s high standards. I am particularly proud of this accomplishment because this administration’s nominees generally hold far more complex financial interests than the last administration’s nominees, a circumstance that would normally be expected to slow O.G.E.’s work. Unfortunately, it has been harder to address other aspects of the lagging ethical culture in the current administration.

The cascading effects of the president’s departure from existing ethical norms have touched others in government. The tone from the top led one White House appointee to use her position to hawk the merchandise of the president’s daughter and another to endorse the president’s book. It led a cabinet official, whose recent wedding reportedly featured a chartered bus ride from the president’s hotel, to urge the public to see a movie he produced. The press secretary touts one of the president’s commercial enterprises as the “winter White House,” and the State Department has publicized it around the globe. A White House lawyer made the extraordinary assertion that “many regulations promulgated by the Office of Government Ethics (‘OGE’) do not apply to employees of the Executive Office of the President.” Appearing to echo this view, the Office of Management and Budget challenged O.G.E.’s authority to collect routine ethics records. Even some presidential nominees have pushed back against ethics processes with uncommon intensity.

Affected, too, is the very official charged with responsibility for White House ethics, the counsel to the president. His office recently ginned up ten unsigned, undated waivers, many of which seem intended to have retroactive effect, raising the specter of a possible effort to paper over ethics violations. Worse, the counsel appears to be both issuer and recipient of two waivers. His deputy also beat back a press inquiry regarding the applicability of ethics rules to one of the deputy’s former clients. In addition, his office has dragged its feet on responding to O.G.E.’s questions about appointees, despite the office’s statutory duty to review their disclosures and certify their ethical compliance.

Projecting their own cynical partisanship, some defenders of this conduct dismiss any expressions of concern — or, in my case, resignation — as politically motivated.Underlying my own expressions of concern, however, is fidelity to the principle that public service is a public trust. I would not have gone looking for this particular fight; it found me. I can assure those reciting the administration’s talking points that I have not enjoyed the attention, nor have I enjoyed watching the negative effects on the ethics program. As I told the Senate during my confirmation hearing in 2012, I am a true believer in the foundational principles of the executive branch ethics program. I am also acutely aware that the program owes a debt to both parties for its past successes and that it will take both parties to restore the program to good health. To advocate for the executive branch ethics program is to advance the nonpartisan mission of an essential institution of our representative form of government.

Defenders of the status quo also seem unwilling to acknowledge the existence of a problem absent clear evidence of significant violations. This argument risks legitimizing an approach of bare minimum legal compliance. The existence or absence of identified violations is not the only measure of an ethics program — no program can detect every violation and those detected are often hard to prove. At its heart, an ethics program acts as a prevention mechanism through systems designed to reduce the risk of violations occurring. Those systems depend on adherence to ethical norms.

Recent experiences have convinced me that the existing mechanism is insufficient. The Office of Government Ethics needs greater authority to obtain information from the executive branch, including the White House. The White House and agencies lacking inspectors general need investigative oversight, which should be coordinated with O.G.E. The ethics office needs more independence, including authority to communicate directly with Congress on budgetary and legislative matters. Because we can no longer rely on presidents to comply voluntarily with ethical norms, we need new laws to address their conflicts of interest, their receipt of compensation for the use of their names while in office, nepotism and the release of tax forms. Transparency should be increased through laws mandating creation and release of documents related to divestitures, recusals, waivers and training. Disclosure requirements can be refined and the revolving door tightened. These changes would give O.G.E. the tools it needs to address the current challenges and, perhaps more importantly, reinforce for presidents the importance of setting a strong ethical tone from the top.

FED Chair says risk of financial crisis increases if Trump deregulates economy

From today’s LA Times by Jim Puzzanghera:

Federal Reserve Chairwoman Janet L. Yellen told senators Thursday that the risk of another financial crisis would increase if some Trump administration proposals to roll back regulations were enacted.

In her second straight day of Capitol Hill testimony, she walked back her statement last month that she didn’t expect another financial crisis “in our lifetimes.”

“I think we can never be confident there won’t be another financial crisis,” Yellen told members of the Senate Banking Committee.

The U.S. has “done a great deal” since the 2008 crisis to strengthen the financial system, she said. That includes forcing banks to hold more capital to cover potential losses as part of the 2010 Dodd-Frank financial regulatory overhaul law.

“It is important that we maintain the improvements that have been put in place that mitigate the risk and the potential damage,” Yellen said.

President Trump has promised to dismantle Dodd-Frank, which Republicans have said has been too burdensome for banks.

In a report last month ordered by Trump, Treasury Secretary Steven T. Mnuchin proposed sweeping regulatory reductions, including changes that would reduce capital requirements for the biggest banks.

Yellen said she would not favor reducing those capital requirements.

Read the entire article here.

House Republicans Are Trying to Pass the Most Dangerous Wall Street Deregulation Bill Ever

From Mother Jones, June 7, 2017 by Hannah Levintova:
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From the earliest days of his campaign, Donald Trump has opposed the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Obama-era financial reform law passed in response to the 2008 financial crisis.  Trump has characterized it as a “disaster” that has created obstacles for the financial sector and hurt growth. In April, he repeated his promise to gut the existing law.
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“We’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some, obviously, but getting rid of many,” Trump said in a meeting with top executives during a “Strategic and Policy CEO Discussion,” which included the leaders of major companies like Walmart and Pepsi. He added, “For the the bankers in the room, they’ll be very happy.”
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The Republican Congress shares Trump’s dislike of Dodd-Frank and this week, the House plans to vote on the Financial CHOICE Act, a Dodd-Frank overhaul bill that will, as promised, make banks and Wall Street “very happy” if it becomes law, while undoing numerous financial safeguards for regular Americans. (CHOICE is an acronym for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.”)
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The bill, sponsored by Rep. Jeb Hensarling (R-Texas), takes aim at some of Dodd-Frank’s main achievements: It guts rules intended to protect mortgage borrowers and military veterans, and restrict predatory lenders. It also weakens the Consumer Financial Protection Bureau’s ability to oversee and enforce consumer protection laws against banks around the country—upending a mix of powers that have helped the CFPB recover nearly $12 billion for 29 million individuals since opening its doors in July 2011. The bill also weakens or outright cuts a number of bank regulations enacted through Dodd-Frank to keep risky investing behavior in check in order to avoid the economic devastation of another financial crisis or taxpayer-funded bailout.

Read the entire article here.

Behind Trump’s Climate Policy Change? Oil Lobbyists and GOP Lackeys

The data is self-evident. Conservative politicians in the GOP don’t believe the science of climate change because they take the most money from oil and energy lobbyists. Notice they hedged their bets by donating significant amounts to Hillary Clinton’s presidential campaign?

However, Clinton would almost certainly have upheld the climate accord, since she helped pave the way for an international consensus of countries to reduce their carbon emissions during her tenure as Secretary of State.

Top 20 recipients of oil and energy money from lobbyists and industry executives. This is why Trump and the GOP do not support common sense climate legislation and oppose environmental protections for American citizens and future generations.

Robert Mueller, Former FBI Director, Is Named Special Counsel for #RussiaGate

From today’s New York Times by Rebecca Ruiz:

WASHINGTON — The Justice Department has appointed Robert S. Mueller III, the former F.B.I. director, to serve as a special counsel to oversee its investigation into Russian meddling in the election, Deputy Attorney General Rod J. Rosenstein announced on Wednesday.

The appointment of Mr. Mueller dramatically raises the stakes for President Trump in the multiple investigations into his campaign’s ties to the Russians. It follows a swiftly moving series of developments that have roiled Washington, including Mr. Trump’s abrupt dismissal of the F.B.I. director, James B. Comey, and the disclosure that the president urged Mr. Comey to drop the bureau’s investigation into his former national security adviser, Michael T. Flynn.

“I determined that it is in the public interest for me to exercise my authorities and appoint a special counsel to assume responsibility for this matter,” Mr. Rosenstein said in a statement. “My decision is not a finding that crimes have been committed or that any prosecution is warranted. I have made no such determination.”

While a special counsel would remain ultimately answerable to Mr. Rosenstein — and by extension, the president — he would have greater autonomy to run an investigation than a United States attorney would. Mr. Mueller will be able to choose to what extent to consult with or inform the Justice Department about his investigation as it goes forward.

Mr. Mueller is viewed by members of both parties as one of the most credible law enforcement officials in the country. He served both Democratic and Republican presidents, from 2001 to 2013, and was asked by President Barack Obama to stay on beyond the normal 10-year term until Mr. Comey was appointed.

Read the full article here.

How Tech Companies are Waging “Psyops” Warfare on American and British Democracies

From yesterday’s Guardian by Carole Cadwalladr:

In June 2013, a young American postgraduate called Sophie was passing through London when she called up the boss of a firm where she’d previously interned. The company, SCL Elections, went on to be bought by Robert Mercer, a secretive hedge fund billionaire, renamed Cambridge Analytica, and achieved a certain notoriety as the data analytics firm that played a role in both Trump and Brexit campaigns. But all of this was still to come. London in 2013 was still basking in the afterglow of the Olympics. Britain had not yet Brexited. The world had not yet turned.

“That was before we became this dark, dystopian data company that gave the world Trump,” a former Cambridge Analytica employee who I’ll call Paul tells me. “It was back when we were still just a psychological warfare firm.”

Was that really what you called it, I ask him. Psychological warfare? “Totally. That’s what it is. Psyops. Psychological operations – the same methods the military use to effect mass sentiment change. It’s what they mean by winning ‘hearts and minds’. We were just doing it to win elections in the kind of developing countries that don’t have many rules.”

Why would anyone want to intern with a psychological warfare firm, I ask him. And he looks at me like I am mad. “It was like working for MI6. Only it’s MI6 for hire. It was very posh, very English, run by an old Etonian and you got to do some really cool things. Fly all over the world. You were working with the president of Kenya or Ghana or wherever. It’s not like election campaigns in the west. You got to do all sorts of crazy shit.”

On that day in June 2013, Sophie met up with SCL’s chief executive, Alexander Nix, and gave him the germ of an idea. “She said, ‘You really need to get into data.’ She really drummed it home to Alexander. And she suggested he meet this firm that belonged to someone she knew about through her father.”

Who’s her father?

“Eric Schmidt.”

Eric Schmidt – the chairman of Google?

“Yes. And she suggested Alexander should meet this company called Palantir.”

I had been speaking to former employees of Cambridge Analytica for months and heard dozens of hair-raising stories, but it was still a gobsmacking moment. To anyone concerned about surveillance, Palantir is practically now a trigger word. The data-mining firm has contracts with governments all over the world – including GCHQ and the NSA. It’s owned by Peter Thiel, the billionaire co-founder of eBay and PayPal, who became Silicon Valley’s first vocal supporter of Trump.

In some ways, Eric Schmidt’s daughter showing up to make an introduction to Palantir is just another weird detail in the weirdest story I have ever researched.

A weird but telling detail. Because it goes to the heart of why the story of Cambridge Analytica is one of the most profoundly unsettling of our time. Sophie Schmidt now works for another Silicon Valley megafirm: Uber. And what’s clear is that the power and dominance of the Silicon Valley – Google and Facebook and a small handful of others – are at the centre of the global tectonic shift we are currently witnessing.

Read the entire story here.

U.S. Senate votes to block California-led effort on retirement security for low-income workers

From today’s LA Times by Evan Halper

A pioneering, California-led effort to create retirement security for low-income workers has been thrown into jeopardy after the U.S. Senate voted Wednesday to block states from starting programs to automatically enroll millions of people in IRA-type savings plans.

The measure, aimed at stopping the fledgling state retirement programs, now goes to President Trump, who has vowed to sign it.

That leaves lawmakers in California, Illinois and other states who only months ago were celebrating the success of their long-planned initiative scrambling to regroup. The Senate voted 50 to 49 to stop the state plans.

The retirement programs that were about to launch in seven states and are under consideration in many more were targeted by Wall Street firms and the U.S. Chamber of Commerce.

The vote reflected the renewed influence of the business lobby in Washington since the 2016 election, with lawmakers defying the 38-million member AARP, a vocal supporter of the auto-IRA program. The seniors group had warned senators that its members would hold them accountable for their votes.

“Nobody had a problem with this except for the big Wall Street companies who invented in their mind that they would be losing business to these state innovations,” said Sen. Christopher S. Murphy (D-Conn.), whose state was moving to implement an auto-IRA program. “This is a terrible, terrible thing we are doing,” he said of the Senate’s vote to undermine the state programs.

The California Secure Choice program and similar retirement laws generally require employers with no retirement plans to automatically invest a small percentage of each worker’s pay in a state-sponsored retirement account. Employers can opt out of the program if they choose.

The money is managed by private investment firms that partner with the states. The accounts are intended to help build financial security for some 55 million workers nationwide whose employers do not offer a retirement plan.

The push to implement the programs was delayed for years by complicated federal Labor Department rules governing such investment pools. In its final months, the Obama administration gave states the green light to pursue their vision. But Congress has now voted to revoke that authority, leaving the programs in limbo. Opponents of the state programs say they became too risky for consumers after the federal rules were changed.

Read the entire article here.

Economic inequality in LA ripens new concerns about future riots

From today’s LA Times by Victoria Kim and Melissa Edelhed:

Nearly 6 out of 10 Angelenos think another riot is likely in the next five years, increasing for the first time after two decades of steady decline. That’s higher than in any year except for 1997, the first year the survey was conducted, and more than a 10-point jump compared with the 2012 survey.

Young adults ages 18 to 29, who didn’t directly experience the riots, were more likely than older residents to feel another riot was a possibility, with nearly 7 out of 10 saying one was likely, compared with about half of those 45 or older. Those who were unemployed or worked part-time were also more pessimistic, as were black and Latino residents, compared with whites and Asians, the poll found.

Researchers theorized that the turnaround may be linked to several factors, including the more polarized national dialogue on race sparked by police shootings in Ferguson, Mo., and elsewhere, as well as by the tenor of last year’s presidential election. Moreover, many parts of L.A. still suffer from some of the economic problems and lack of opportunities that fueled anger before the riots.

“Economic disparity continues to increase, and at the end of the day, that is what causes disruption,” said Fernando Guerra, a political science professor who has worked on the survey since its inception. “People are trying to get along and want to get along, but they understand economic tension boils over to political and social tension.”Los Angeles riots rememberedThere was a moment of silence candlelight vigil in Koreatown to commemoratethe 17th anniversary of the Los Angeles riots. This year’s theme focused on teaching their history to Korean American youth, many of whom were born after the riots, during which tensions between the city’s black and Korean communities exploded.

Although the city’s unemployment rate last year was about half of what it was in 1992, the median income of Angelenos, when adjusted for inflation, is lower than it was around the time of the riots. Poverty rates still remain high at 22%, comparable with the years preceding the riots.

Read the entire article here.

Read coverage of LA Times Special Edition: 25th Anniversary of LA Riots here.

Bribe Cases, Secret Jared Kushner Partner, Potential Conflicts of Interest

From today’s New York Times by Jesse Drucker

It was the summer of 2012, and Jared Kushner was headed downtown.

His family’s real estate firm, the Kushner Companies, would spend about $190 million over the next few months on dozens of apartment buildings in tony Lower Manhattan neighborhoods including the East Village, the West Village and SoHo.

For much of the roughly $50 million in down payments, Mr. Kushner turned to an undisclosed overseas partner. Public records and shell companies shield the investor’s identity. But, it turns out, the money came from a member of Israel’s Steinmetz family, which built a fortune as one of the world’s leading diamond traders.

A Kushner Companies spokeswoman and several Steinmetz representatives say Raz Steinmetz, 53, was behind the deals. His uncle, and the family’s most prominent figure, is the billionaire Beny Steinmetz, who is under scrutiny by law enforcement authorities in four countries. In the United States, federal prosecutors are investigating whether representatives of his firm bribed government officials in Guinea to secure a multibillion dollar mining concession. In Israel, Mr. Steinmetz was detained in December and questioned in a bribery and money laundering investigation. In Switzerland and Guinea, prosecutors have conducted similar inquiries.

The Steinmetz partnership with Mr. Kushner underscores the mystery behind his family’s multibillion-dollar business and its potential for conflicts with his role as perhaps the second-most powerful man in the White House, behind only his father-in-law, President Trump.

Although Mr. Kushner resigned in January from his chief executive role at Kushner Companies, he remains the beneficiary of trusts that own the sprawling real estate business. The firm has taken part in roughly $7 billion in acquisitions over the last decade, many of them backed by foreign partners whose identities he will not reveal. Last month, his company announced that it had ended talks with the Anbang Insurance Group, a Chinese financial firm linked to leading members of the ruling Communist Party. The potential agreement, first disclosed by The New York Times, had raised questions because of its favorable terms for the Kushners.

Read the entire article here.