Category: Policies

Icahn Raises Ethics Flags With Dual Roles as Investor and Trump Adviser

Leave a comment

Since Carl Icahn, the billionaire investor, was named by President Trump as a special adviser on regulatory matters, he has been busy working behind the scenes to try to revamp an obscure Environmental Protection Agency rule that governs the way corn-based ethanol is mixed into gasoline nationwide.

It is a campaign that fits into the charge Mr. Trump gave Mr. Icahn, to help the nation “break free of excessive regulation.” But there is an additional detail that is raising eyebrows in Washington: Mr. Icahn is a majority investor in CVR Energy, an oil refiner based in Sugar Land, Tex., that would have saved $205.9 million last year had the regulatory fix he is pushing been in place.

Mr. Icahn, known internationally for his pugnacious and persistent approach to activist investing, has brought that same technique to his new role. He quizzed Scott Pruitt, a former Oklahoma attorney general, about the ethanol rule when Mr. Icahn helped interview Mr. Pruitt for the E.P.A. job. Mr. Icahn later reached out to Gary D. Cohn, Mr. Trump’s top economic adviser, to raise the issue. Mr. Icahn said he even had a telephone conversation in February with Mr. Trump himself.

The blitz has already generated at least one clear outcome: Since Mr. Trump was elected president with Mr. Icahn’s very vocal support and nearly $200,000 in political contributions to Republican causes — the stock price of CVR Energy has soared. By late December, it had doubled. It is still up 50 percent from the pre-election level, generating a windfall, at least on paper, of $455 million as of Friday.

The merging of private business interest with government affairs — aspects of which have previously been reported by Bloomberg, but which The New York Times has found further evidence of — has generated protests from ethics experts in Washington, as well as certain Senate Democrats. They consider Mr. Icahn’s dual roles perhaps the most troubling conflict of interest to emerge so far in the new administration.

“This is a mile out of bounds by any standard,” said Senator Sheldon Whitehouse, Democrat of Rhode Island, who, along with other Democrats, sent a letter Monday to Mr. Icahn, the Office of Government Ethics and the Department of Justice to object to Mr. Icahn’s dual roles, and to ask new questions. “Were the shoe on the other foot, Republicans would be having fits about any Obama relationship like this.”

Mr. Icahn, 81, in a series of interviews in the last week, was unapologetic. He said he was not subject to conflict of interest rules because he is an informal, unpaid adviser to Mr. Trump, not an official government employee.

“I’m not making any policy,” Mr. Icahn said. “I am only giving my opinion.”

Kelly Love, a White House spokeswoman, also dismissed the criticism. She pointed to the December news release when Mr. Trump first named Mr. Icahn “special adviser to the president” on regulatory matters. “He is simply a private citizen whose opinion the president respects and whom the president speaks with from time to time,” Ms. Love said in a written statement. “Mr. Icahn does not have a position with the administration nor a policy-making role.”

Both compared Mr. Icahn’s role to corporate executives serving on federal advisory commissions, who are expected to argue for changes in federal policies while remaining corporate officers. But CVR Energy, of which Mr. Icahn owns 82 percent, is just one entry on a growing list of potential conflicts that have surfaced since his December appointment.

Mr. Icahn has provided input to the White House on the selection of the new head of the Securities and Exchange Commission. He is a major investor in companies that have recently been targeted for enforcement action or investigation by the S.E.C., including CVR Energy and Herbalife, the nutritional beverage company, of which he owned about 24 percent at the end of last year.

Mr. Icahn has also pressed Freeport-McMoRan, the global mining company he helps run as a result of his large investment, to more aggressively fight back against the government of Indonesia, the company’s chief executive, Richard Adkerson, said in an interview Friday. Indonesia is challenging Freeport’s contract to extract gold and copper from one of the world’s largest mines.

The company, as that pressure from Mr. Icahn and other investors has intensified, has been asking for help from the State Department, Commerce Department and White House, Mr. Adkerson said.

Mr. Icahn is “very concerned about what is happening in Indonesia,” Mr. Adkerson told reporters in Indonesia last month, adding that he was “confident the U.S. government will want to see Freeport treated fairly.” (Both Mr. Adkerson and Mr. Icahn said that Mr. Icahn, who controls two of eight seats on the company’s board, had not directly intervened with the Trump administration on this matter.)

And while the Trump administration imposed a broad freeze on the adoption of new regulations — holding up dozens of new rules affecting everything from hybrid cars to furniture manufacturing — it surprised industry officials by allowing one Internal Revenue Service rule to go into effect in late January. The rule expands a special kind of oil and gas business organization with tax advantages, known as a master limited partnership, that Mr. Icahn cited as a primary reason he first made his big investment in CVR Energy back in 2012.

What is clear is that Mr. Icahn has an unusual position in the Trump administration. During his campaign, Mr. Trump repeatedly boasted of his ties to Mr. Icahn — calling him “my very dear friend” and citing Mr. Icahn’s support as a sign that “many of the great businesspeople are endorsing me.”

His fortune, $16.6 billion, according to a Forbes estimate, is greater than those of all the other members of Mr. Trump’s cabinet combined, with investments in companies as diverse as Hertz, Xerox and PayPal, as well as A.I.G., the multinational insurance company, and most recently Bristol-Myers Squibb, the global biopharmaceutical company.

Mr. Trump’s cabinet appointees, many of whom are very rich, had to undergo stringent reviews by the Office of Government Ethics that negotiated personalized asset sales agreements for each of them to help them avoid conflicts of interest. But Mr. Icahn is not required to take any such steps, given that he is an unpaid adviser rather than a formal government employee.

Mr. Icahn has long fought against the ethanol rule, known more formally as the Renewable Fuel Standard. In August he wrote an unusually personal 11-page letter to Gina McCarthy, who served as President Barack Obama’s head of the Environmental Protection Agency, and one of Ms. McCarthy’s top deputies, with an all-capital-letter headline: “PROGRAM IS BROKEN AND NEEDS TO BE FIXED IMMEDIATELY.”

He pushed the federal government, in this letter and other appeals, to eliminate the requirement that refiners be held responsible for ensuring that ethanol is blended into gasoline, given that the actual blending is often done by gas station owners, closer to the point of sale. Other merchant refiners like the San Antonio-based Valero Energy joined Mr. Icahn in pressing the E.P.A.

“This is a terrible, flawed rule,” said LeAnn Johnson Koch, a lawyer representing a group of smaller refiners, who joined the effort.

Major oil companies, like Exxon Mobil, own both the refineries and service stations, so they can handle this requirement. But CVR Energy and other so-called merchant refiners no longer handle the gasoline once it leaves their refineries. So they must buy renewable fuel credits — nicknamed RINs — to prove to the E.P.A. that they have complied with the blending of the ethanol and gasoline, a requirement that cost CVR $637.5 million over the last four years.

“You are robbing refineries so that gas station owners and other players can make windfall profits,” Mr. Icahn said in an interview Friday, barely able to contain his anger at the arrangement.

But the Obama administration, in November, moved to reject the request to revamp the system.

“We were not persuaded that the program would be appreciably better at accomplishing its goals, with the approach that he was advocating,” said Janet McCabe, the E.P.A. administrator who oversaw the program.

So after Mr. Trump won, Mr. Icahn took up the campaign again, this time gaining much higher access. First, Mr. Trump asked Mr. Icahn to help him screen candidates for the E.P.A. job, so when Mr. Icahn interviewed Mr. Pruitt, he asked him specifically about his position on the ethanol rule.

“The E.P.A., in my opinion, has gone way too far, has sort of run amok with these crazy regulations,” Mr. Icahn said in an interview with Bloomberg television in early December, explaining why he supported Mr. Pruitt for the job. Mr. Icahn then added that Mr. Pruitt had made clear to him that “he feels pretty strongly about the absurdity of these obligations, and I feel that this should be done immediately,” referring to the ethanol rule.

In February, Mr. Icahn set up a telephone call with Mr. Trump. The conversation, which took place in the lobby of Mr. Icahn’s New York apartment building as he was returning from walking his dog, involved a plan he had hatched to force the E.P.A. to revamp the rule, details of which were confirmed by Mr. Icahn, after being first reported by Bloomberg.

Mr. Icahn confirmed in an interview Friday that he had follow-up conversations with Mr. Cohn, Mr. Trump’s top economic adviser, and Mike Catanzaro, a top Trump White House aide on energy policy (and a former oil industry lobbyist).

But Mr. Icahn’s plan has run into intense opposition from other industry players, including the powerful American Petroleum Institute, and a trade association that represents major ethanol producers like Iowa-based Poet. In an interview last week, Poet’s chief executive, Jeff Broin, called the plan a “back-room” deal. “It seems like self-dealing to me and a clear conflict of interest,” he said.

The White House, in a statement, said no policy change was imminent.

But Mr. Icahn’s actions have already generated calls for investigations, including a complaint filed this month with congressional officials by Public Citizen, a liberal nonprofit group.

Not uncharacteristically for Mr. Icahn, he shows no sign that he intends to back down in his push for the policy change.

“All my life I have fought the establishment — from U.S. Steel, to eBay, to Apple,” he said last week, listing some of his famous battles to force management changes at companies in which he has invested. “I have never shied away from it. I am not going to now.”

(h/t New York Times)

Eric Trump Says He Will Keep Father Updated on Business Despite ‘Pact’

Leave a comment

Eric Trump has said he will give his father “quarterly” updates on the family’s businesses – which the president has refused to divest from – in spite of the sons’ promises to separate the private companies from their father’s public office.

In an interview with Forbes magazine, Donald Trump’s middle son at first said the family honored “kind of a steadfast pact we made” not to mix business interests with public ones.

“There is kind of a clear separation of church and state that we maintain, and I am deadly serious about that exercise,” he said. “I do not talk about the government with him, and he does not talk about the business with us.”

But he went on to say that he would keep the president abreast of “the bottom line, profitability reports and stuff like that, but you know, that’s about it”.

He said those reports would be “probably quarterly”.

“My father and I are very close,” he added. “I talk to him a lot. We’re pretty inseparable.”

Since their father handed day-to-day management of the Trump Organization to his adult sons, Eric and Donald Jr, the family has insisted they do not discuss the business with president. Ethics attorneys of both parties and the nonpartisan Office of Government Ethics have called the arrangement a failure to prevent potential conflicts of interest – for instance, Trump hotels selling rooms to foreign diplomats.

Eric Trump’s statement alarmed ethics experts, including Lisa Gilbert, a director at the not-for-profit watchdog Public Citizen. “It confirms our worst assumptions about the lack of separation between his business and current office,” she said. “There’s no way to reconcile quarterly updates from your son.”

Advertisement

Gilbert said there were signs that the Trump family was already profiting from the presidency, including increased business at his golf clubs. His south Florida club, Mar-a-Lago, doubled its entrance fee to $200,000 in January, and in February the first lady, Melania Trump, filed court documents arguing that the White House was an opportunity to develop “multimillion-dollar business relationships”.

“It’s not a single thing,” Gilbert said. “Their businesses are doing better because there is more cachet around them.”

The watchdog released a report this week analyzing the first two months of the Trump presidency. It concluded that Trump had broken several promises to “isolate” himself from the business, that his White House was “clouded by corruption and conflicts”, and that he had surrounded himself “with the same major donors and Wall Street executives he claimed he would fight if elected”.

A Washington DC wine bar sued Trump and his new hotel this month, alleging that his ownership provides an illegal competitive advantage. The president still holds direct ties to his businesses, DC liquor board documents show, as the sole beneficiary of a revocable trust.

The White House and Department of Homeland Security have declined to answer questions about whether taxpayer dollars have profited the Trump family, for instance through Secret Service rental payments to Trump properties.

“Eric Trump and his father the president are doing what we thought they would do all along,” said Richard Painter, who served as chief ethics attorney for George W Bush. “This of course makes no difference for conflict of interest purposes because it is his ownership of the businesses that creates conflicts of interest, regardless of who manages them.”

Painter added that Trump’s remarks show that “the businesses is an important concern for the president”.

Gilbert compared the arrangement to other possible conflicts in the White House. Trump has appointed his son-in-law, Jared Kushner, as a senior adviser, despite anti-nepotism laws, and the president’s daughter, Ivanka, has acquired a security clearance and an office in the White House, although she has no official role. In November, Trump denied that he had sought security clearances for his children.

“We don’t really have a mechanism to enforce the ethics rules,” Gilbert said. “It’s left us without a lot of ground to stand on.”

Like the president, Kushner and his wife have said they will separate themselves from their family businesses, but have only done so partially, if at all. Kushner retains parts of his billionaire family’s real estate empire, White House documents show, and Ivanka Trump has so far failed to resign, as promised, from the family business, according to documents acquired by ProPublica.

Possible conflicts have already arisen for both of the president’s family confidantes: Kushner’s family is negotiating a $400m deal with a Chinese firm connected to Beijing’s leadership, and one of Ivanka Trump’s brands was promoted, in violation of ethics rules, on national television by another of the president’s advisers.

In Dallas this month, Donald Jr told Republican fundraisers that he had “basically zero contact” with his father. His brother, similarly, told Forbes that he tries to “minimize fluff calls that you might otherwise have because I understand that time is a resource”.

But he also echoed an earlier boast about the family brand being “the hottest it has ever been”.

“We’re doing great in all of our assets,” he said, before arguing that being the family in the White House also entailed “great sacrifices” for the business, especially “when you limit an international business to only domestic properties, when you put hundreds of millions of dollars of cash into a campaign, when you run with very, very tight and strict rules and the things that we do every single day in terms of compliance.

“I don’t know,” he concluded. “You could look at it either way.”

(h/t The Guardian)

Former Trump Campaign Chairman Paul Manafort ‘Offered to Help Putin’

Leave a comment

Paul Manafort is said to have proposed a strategy to nullify anti-Russian opposition across former Soviet republics a decade ago.

AP says documents and interviews support its claims about Mr Manafort.

Mr Manafort has insisted that he never worked for Russian interests.

He worked as Mr Trump’s unpaid campaign chairman from March until August last year, including the period during which the flamboyant New York billionaire clinched the Republican nomination.

He resigned after AP revealed that he had co-ordinated a secret Washington lobbying operation on behalf of Ukraine’s ruling pro-Russian political party until 2014.

Newly obtained business records link Mr Manafort more directly to Mr Putin’s interests in the region, AP says.

It comes as Trump campaign advisers are the subject of an FBI investigation and two congressional inquiries.

Investigators are reviewing whether the Trump campaign and its associates co-ordinated with Moscow to interfere in the 2016 presidential election campaign to damage Mr Trump’s opponent, Hillary Clinton, a stern critic of Mr Putin.

Mr Manafort is said to have pitched the plans to aluminium magnate Oleg Deripaska, a close ally of President Putin.

In a confidential strategy plan in 2005, AP reports, Mr Manafort proposed to influence politics, business dealings and news coverage in the US, Europe and the ex-Soviet republics to advance the interests of the Putin government.

At this time, US-Russia relations were deteriorating.

“We are now of the belief that this model can greatly benefit the Putin government if employed at the correct levels with the appropriate commitment to success,” Mr Manafort is said to have written, adding that it would be offering “a great service that can refocus, both internally and externally, the policies of the Putin government”.

Mr Manafort signed a $10m-a-year contract beginning in 2006, AP reports. How much work he did under this contract was unclear.

Mr Manafort and Mr Deripaska reportedly maintained a business relationship until at least 2009.

When Donald Trump picked Paul Manafort to be his campaign chair last March, the political operative was a relatively minor player in Washington, consigned to working for deep-pocketed foreign benefactors. That those benefactors have turned out to include Russian oligarchs and Ukrainian politicians with ties to Vladimir Putin is sure to cause growing concern in the Trump White House.

Now it appears increasingly likely that Mr Manafort is one of the “individuals associated with the Trump campaign”, in Director James Comey’s words, at the heart of an ongoing FBI investigation.

This would explain why White House Press Secretary Sean Spicer recently downplayed Mr Manafort’s connections to the Trump team, saying he “played a very limited role” in the campaign for “a very limited amount of time”.

Mr Manafort could face legal consequences if the FBI concludes that he did not properly disclose his work for foreign leaders. That would at the very least prove embarrassing for Mr Trump, given the power he delegated to Mr Manafort last summer.

If it turns out that Mr Manafort’s contacts with foreign interests continued during his time at the top of the Trump campaign, the situation for the White House could go from embarrassing to full-blown scandal.

In a statement to AP, Mr Manafort confirmed that he had worked for Mr Deripaska in several countries but insisted the work was being unfairly cast as “inappropriate or nefarious” as part of a “smear campaign”.

“I worked with Oleg Deripaska almost a decade ago representing him on business and personal matters in countries where he had investments,” Mr Manafort said in the statement.

“My work for Mr Deripaska did not involve representing Russian political interests.”

A spokesman for Mr Deripaska in Moscow declined to answer questions from AP.

Further allegations have been made in Ukraine about secret funds said to have been paid to Mr Manafort.

Lawmaker Serhiy Leshchenko said he had evidence that Mr Manafort had tried to hide a payment of $750,000 (£600,800) by a pro-Russian party in 2009.

Mr Manafort’s spokesman said the claim was “baseless”.

Mr Manafort was an adviser to Ukraine’s ex-President Viktor Yanukovych, but denies receiving any cash payments.

(h/t BBC)

Trump Has Political Aides Monitoring the Loyalty of Cabinet Secretaries

Leave a comment

As President Trump recently reminded us, when someone has been disloyal to him, he never forgets it. But now that he’s president, it’s become more difficult to keep track of those who have defied him — or who may potentially defy him. That’s why, according to the Washington Post, Trump has embedded political appointees in every cabinet agency and tasked them with keeping tabs on the secretaries’ fealty to the president. Unsurprisingly, this is not going over well with some cabinet members.

The Post is not the first to note the existence of these monitors. Last month, Politico reported that the Trump administration had created the new position of “senior White House adviser” within each agency, placing many former campaign aides in those jobs. Records obtained by ProPublica show that there are at least 16 of these advisers, with Trump loyalists stationed in all the major departments, as well as in some smaller agencies, such as NASA.

There’s some disagreement over who the advisers answer to. The Post says they report to the Office of Cabinet Affairs, which is overseen by White House deputy chief of staff Rick Dearborn. An anonymous White House official said the advisers technically report to the head of each agency, but the White House would not discuss the matter on the record.

The advisers’ ostensible mission is to act as a go-between on policy issues for the White House and the agencies, but eight officials tell the Post their primary task is to make sure agency staffers are carrying out the president’s agenda. Concerns about the president’s authority over the executive branch are not unusual, but no recent president has had such an arrangement.

As New York’s Ed Kilgore noted last month, “People like that can be described as political commissars, to use the term made famous in the Soviet Union for the agents sent to impose ideological discipline, particularly in military units.” Sure enough, the former Marine and fighter pilot assigned to Defense Secretary Jim Mattis is privately referred to as “the commissar” within the Pentagon.

But the attitude toward the senior White House advisers varies by agency. Aides at the Departments of Transportation and the Interior described the advisers as part of their teams, and some advisers are picking up the slack in understaffed departments. However, Environmental Protection Agency administrator Scott Pruitt has reportedly banned former Washington state senator Don Benton, who ran Trump’s Washington state campaign, from meetings. Per the Post:

These officials said Benton piped up so frequently during policy discussions that he had been disinvited from many of them. One of the officials described the situation as akin to an episode of the HBO comedy series Veep.

Behaving like a member of Selina Meyer’s team doesn’t sound so bad when the alternative is an episode out of Soviet history.

Trump Winery Seeks Even More Foreign Workers This Season

Leave a comment

A Virginia winery owned by President Donald Trump’s son has applied to hire foreign workers to pick grapes after the company was unable to find U.S. citizens who want the job.

Trump Vineyard Estates, better known as Trump Winery, has asked to bring in 29 workers this season through the federal H-2A visa program, The Daily Progress reported.

The Charlottesville-area winery is owned by Eric Trump, whose father has called on businesses to hire Americans.

The H-2A program enables agricultural employers who anticipate a shortage of domestic workers to bring foreign workers to the U.S. to perform agricultural labor or other temporary or seasonal services. To apply, employers say they’ve been unable to find American citizens to fill the jobs. At least three other local vineyards also applied to hire foreign workers.

“It’s difficult to find people,” said Libby Whitley, an attorney who has worked with employers, including Trump Winery.

Trump Vineyard Estates had initially applied for six foreign workers in December. Two months later, the company applied for 23 more. Both job orders for Trump Vineyard Estates say the primary tasks include planting and cultivating vines, adding grow tubes and pruning grape vines.

H-2A workers and U.S. workers in corresponding employment must be paid a certain rate — $10.72 an hour for vineyard farm workers in Virginia this year.

Whitely said she assumed her company would be flooded with people applying for the jobs because of all the media coverage Trump Winery has received for using the H-2A program.

“Guess how many applicants we had? … 13,” she said. “And they were all from places like the Philippines, Indonesia, Kenya, Nigeria. We did not have one American worker apply on (the first job order).”

Several people have sent emails to show they are outraged that Trump winery is hiring foreigners, Whitley said.

“I qualify every one of those responses and I say, ‘Are you interested in the job? If you are, please get in touch with us immediately,’” Whitley said.

Trump Winery didn’t respond to a request for comment.

(h/t Denver Post)

Trump Tweets Suggest President (Still) Doesn’t Understand How NATO Works

Leave a comment

Less than 24 hours after a very awkward and frosty meeting with German Chancellor Angela Merkel, President Donald Trump took to Twitter to blast Germany for failing to pay enough to NATO and the United States for security. First though, the president began with a conciliatory message, writing that the meeting with Merkel went great. “Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel,” he wrote Saturday morning. But then the president added: “Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”

That statement echoed what Trump said during his joint news conference with Merkel on Friday, when he called on NATO members to contribute their “fair share,” saying that “many nations owe vast sums of money from past years and it is very unfair to the United States.” Although that could be open to interpretation, the commander in chief’s tweets on Saturday, though, seem to suggest Trump doesn’t really understand how NATO is funded. The New York Times explains:

The message was misleading because no nation actually “owes” money to NATO; its direct funding is calculated through a formula and paid by each of the 28 nations that are members.

Mr. Trump may have been referring to the fact that Germany, like most NATO countries, falls short of the alliance’s guideline that each member should allocate 2 percent of its gross domestic product to military spending, but that money is not intended to be paid to NATO or to the United States.

Ivo Daalder, the former U.S. permanent representative on NATO, called out Trump’s seeming mistake in a series of tweets that begin, “Sorry Mr President, that’s not how NATO works.”

“The US decides for itself how much it contributes to defending Nato. This is not a financial transaction, where Nato countries pay the US to defend them,” Daalder wrote. Although it’s true that only five of 28 NATO countries spend 2 percent of their GDP on defense, many are now increasing their defense budgets. “That’s a good thing,” he added. But even when they do increase their defense budgets, “no funds will be paid to the US … Europe must spend more on defense, but not as favor (or payment) to the US. But because their security requires it.”

These mistakes on Trump’s end are hardly new. During the presidential campaign, Trump frequently talked about NATO in a confusing way that left his statements open to interpretation.

(h/t Slate)

 

 

Trump to Spend 7th Consecutive Weekend at Trump-Branded Property, at Enormous Cost to Taxpayers

Leave a comment

President Trump doesn’t want to spend federal dollars on after-school programs, meals for poor people, or heating assistance that helps keep folks alive.

But he has no problem wasting more than $3 million a pop to spend weekends at his private Mar-a-Lago club in Florida. Trump has already made four trips there since becoming president on January 20, and on Friday he confirmed he’s headed there this weekend for the fifth time.

Despite vowing during his campaign that he “would rarely leave the White House because there’s so much work to be done” and “would not be a president who took vacations” because “you don’t have time to take time off,” Trump has visited Trump-branded properties each of the past six weekends. That streak will hit seven when Trump lands at Mar-a-Lago later Friday.

In fact, Trump has spent time at Trump-branded property every weekend of his presidency other than the very first, when he created chaos throughout the country by signing a Muslim ban executive order that was later stayed by a federal court.

As Quartz reported on Friday, after this weekend, Trump will have already spent about $16.5 million on trips to Mar-a-Lago. For that amount, Meals on Wheels could feed 5,967 seniors for a year and after school programs could feed 114,583 children for a year.

On Thursday, Office of Management and Budget director Mick Mulvaney defended the draconian cuts included in the Trump administration’s proposed budget by arguing that the federal government can’t ask “a coal miner in West Virginia or a single mom in Detroit to pay for” programs like the Corporation for Public Broadcasting. But one wonders whether those struggling Americans would rather have public radio or dole out their share of the $3.3 million a self-proclaimed billionaire is spending each weekend to mingle with his ludicrously wealthy club members down in Florida.

(h/t ThinkProgress)

Media

Trump Administration Rescinds Obama Guidance on Student Loan Defaults

Leave a comment

The Trump administration on Thursday rolled back Obama-era guidance that forbade student loan debt collectors from charging high fees to defaulted borrowers, The Washington Post reported.

In a “Dear Colleague” letter, the administration tells agencies that collect on defaulted loan debt to disregard guidance prohibiting them from charging borrowers who default on their payments fees of as much as 16 percent of the loan’s principal and accrued interest.

It also says that the initial guidance handed down by the Obama administration in 2015 should have been subjected to public comment before it was issued.

“The Department thinks that the position set forth in the [Obama administration guidance] would have benefitted from public input on the issues discussed in the [guidance letter],” the Trump administration’s directive reads.

“The department will not require compliance with the interpretations set forth … without providing prior notice and an opportunity for public comment on the issues,” it continues.

The decision to rescind the guidance came two days after the Consumer Federation of America issued a report that finds that the number of people defaulting on their student loan payments is on the rise.

The Trump’s administration’s letter affects 7 million people with loans through the Federal Family Education Loan Program that are held by guaranty agencies. Individuals whose debt is held by the Department of Education are not impacted by the decision.

The amount owed in student loan debt has surpassed that of credit card debt — about $1.2 trillion.

(h/t The Hill)

Top Trump Aide Sebastian Gorka is a Sworn Member of a Nazi Group

Leave a comment

Sebastian Gorka, President Trump’s top counter-terrorism adviser, is a formal member of a Hungarian far-right group that is listed by the U.S. State Department as having been “under the direction of the Nazi Government of Germany” during World War II, leaders of the organization have told the Forward.

The elite order, known as the Vitézi Rend, was established as a loyalist group by Admiral Miklos Horthy, who ruled Hungary as a staunch nationalist from 1920 to October 1944. A self-confessed anti-Semite, Horthy imposed restrictive Jewish laws prior to World War II and collaborated with Hitler during the conflict. His cooperation with the Nazi regime included the deportation of hundreds of thousands of Jews into Nazi hands.

Gorka’s membership in the organization — if these Vitézi Rend leaders are correct, and if Gorka did not disclose this when he entered the United States as an immigrant — could have implications for his immigration status. The State Department’s Foreign Affairs Manual specifies that members of the Vitézi Rend “are presumed to be inadmissible” to the country under the Immigration and Nationality Act.

Gorka — who Vitézi Rend leaders say took a lifelong oath of loyalty to their group — did not respond to multiple emails sent to his work and personal accounts, asking whether he is a member of the Vitézi Rend and, if so, whether he disclosed this on his immigration application and on his application to be naturalized as a U.S. citizen in 2012. The White House also did not respond to a request for comment.

But Bruce Einhorn, a retired immigration judge who now teaches nationality law at Pepperdine University, said of this, “His silence speaks volumes.”

The group to which Gorka reportedly belongs is a reconstitution of the original group on the State Department list, which was banned in Hungary until the fall of Communism in 1989. There are now two organizations in Hungary that claim to be the heirs of the original Vitézi Rend, with Gorka, according to fellow members, belonging to the so-called “Historical Vitézi Rend.” Though it is not known to engage in violence, the Historical Vitézi Rend upholds all the nationalist and oftentimes racial principles of the original group as established by Horthy.

Einhorn said these nuances did not relieve Gorka of the obligation, if he’s a member, to disclose his affiliation when applying for his visa or his citizenship.

“This is a group that advocates racialist nativism,” said Einhorn. If Gorka did not disclose his affiliation with it, he said, this would constitute “failure to disclose a material fact,” which could undermine the validity of both his immigration status and claim to citizenship.

“It’s a material fact that, if disclosed, would have provoked a significant inquiry into the specific post-war role of this organization and Gorka’s activities in it,” he said.

Before serving 17 years as an immigration judge, Einhorn was deputy chief at the Justice Department’s Office of Special Investigations. The unit, which has since been disbanded, was charged with finding and deporting Nazis and members of other extremist groups who entered America illegally by lying about or hiding their background. He noted that individuals who apply for both visas and citizenship are specifically asked to name all organizations they belong to due to the government’s interest in scrutinizing those affiliated with extremist groups, and in particular those on the State Department’s list.

If Gorka did not disclose his Vitézi Rend affiliation, said Einhorn, he thereby “foreclosed the opportunity for U.S. officials to pursue that inquiry with him.” No statute of limitations exists for such violations, he noted.

Einhorn stressed that Gorka would have defenses in such a case; he might argue the chances were small that immigration and naturalization officials — who are not extremism experts or historians — would have recognized the nature of the group and questioned him even if he disclosed his affiliation. “There would have to be clear and convincing evidence that had he told the truth… it would have led to a meaningful inquiry that could have kept him out of the country.”

But Einhorn stressed: “My view is that it would be a legitimate case — difficult and challenging, but I believe winnable.”

Gorka, who is a deputy assistant to the president, first provoked questions about his relationship to the Vitézi Rend after he publicly brandished its medal on his lapel at a presidential inauguration ball January 20. When questions were raised about this in February on the news website Lobelog and elsewhere, he explained it as a gesture of honor to his late father.

“In 1979 my father was awarded a declaration for his resistance to a dictatorship,” he told Breitbart News then. “Although he passed away 14 years ago, I wear that medal in remembrance of what my family went through and what it represents today, to me, as an American.”

But the Forward’s inquiry into Gorka’s relationship with the Vitézi Rend suggests that Gorka’s explanation is, at best, incomplete:

Gorka, who pledged his loyalty to the United States when he took American citizenship in 2012, is himself a sworn member of the Vitézi Rend, according to both Gyula Soltész — a high-ranking member of the Vitézi Rend’s central apparatus — and Kornél Pintér — a leader of the Vitézi Rend in Western Hungary who befriended Gorka’s father through their activities in the Vitézi Rend.

Soltész, who holds a national-level leadership position at the Vitézi Rend, confirmed to the Forward in a phone conversation that Gorka is a full member of the organization.

“Of course he was sworn in,” Pintér said, in a phone interview. “I met with him in Sopron [a city near Hungary’s border with Austria]. His father introduced him.”

“In today’s world it is rare to meet anyone as well-bred as Sebastian or his father, Pali,” he added.

If correct, Gorka’s membership in the order is notable because, as Pintér and other members explained, affiliation is possible only via a solemn initiation rite in which new members take an oath swearing undying allegiance to the Hungarian nation and the Vitézi Rend’s goals:

“I, Vitez [name], swear on the Holy Crown that I know the Order’s goals and code, and based on the orders of the Captain and Order Superiors will follow them for the rest of my life. I never betrayed my Hungarianness, and was never and am not currently a member of an anti-national or secret organization. So help me God.”

Several commentators also noted that in his 2008 doctoral dissertation at Hungary’s Corvinus University, Gorka presented his name as Sebastian L. v. Gorka. The “v.” is an initial used by members of the Vitézi Rend.

But Gorka did not use the initial only in academic papers.

In June 2011, Gorka testified in front of the House Armed Services Committee. His official testimony did not list his name as Sebastian L. Gorka, but rather as Dr. Sebastian L. v. Gorka.

“Of course, only after the oath,” György Kerekes, a current member of the Vitézi Rend, told the Forward when asked if anyone may use the initial “v.” without going through the Vitézi Rend’s application process and an elaborate swearing-in ceremony.

As the son of a member of the Vitézi Rend, Gorka is eligible to apply for membership. But membership is not bestowed automatically, and he cannot use the initial in his name without actively applying for membership and taking the formal oath to the organization.

Gorka’s self-identification to a congressional committee as Dr. Sebastian L. v. Gorka thus indicates that Gorka either misrepresented his identity to Congress in 2011 or is currently misrepresenting his affiliation with the Vitézi Rend, potentially having taken an oath to Hungarian nationalist and racist principles.

The Vitézi Rend, which was established in 1920 for Horthy’s loyal followers, is listed by the State Department as one of many groups in Germany and the countries it occupied as collaborationist “criminal organizations” with the Nazis as determined by the post-war International Military Tribunal at Nuremberg. The group was among those Horthy rewarded with real estate taken from hundreds of thousands of Jews his government deported to Nazi concentration camps.

Dissolved in Hungary after World War II under the terms of the Allies’ armistice with Hungary, it was reconstituted by veterans’ groups in exile, including prewar members of the group appointed by Horthy. It was re-established inside Hungary after communism’s collapse in 1989. According to State Department guidelines, while Vitézi Rend membership “does not automatically render the alien ineligible for a visa, the applicant has the burden of establishing that, despite being a member of a designated criminal organization, he or she did not participate in activities that would fall within the purview of the Immigration and Nationality Act. The guidelines cite a provision of the act barring entry to the United States to “participants in Nazi persecution, genocide, or the commission of any act of torture or extrajudicial killing.”

Gorka, who is 46, could not have been part of any World War II killings. But the provisions reflect the State Department’s understanding of the Vitézi Rend’s historical nature.

The group’s mission emphasized not only loyalty to Hungary and nationalist ideas, but also an ideology of racial superiority. One of the original aims of the Vitézi Rend was to “ensure such might to the Hungarian race, which with tremendous power strikes every subversive state and anti-national movement,” Horthy said in a speech to new members in 1921.

The Hungarian dictator, whom Vitézi Rend members still lionize on their websites as the order’s founding leader and ideological guide, added, “Let the Vitézi Rend be the pride of the Turan race and our homeland, but if necessary, its sharp cutting sword.” “The Turan race” refers to Turanism, a theory popular among the country’s far-right and fascist groups whereby Hungarians are thought to be a race descended from tribes that migrated from Asia.

Members of the Vitézi Rend should practice “love of their race,” Horthy said in 1926, in a speech during a swearing-in ceremony for new members.

“Whoever lets another take his place is committing a crime against his race,” Horthy emphasized eight years later, in a June 1934 speech to members of the Vitézi Rend.

Nearly a century later, the Vitézi Rend has not left its legacy of racism behind. Horthy is revered among the organization’s members. His speeches are quoted on Vitézi Rend websites, and his original goals for the organization are highlighted.

As historian Eva S. Balogh notes, the organization’s formal slogan — “I believe in one God, I believe in one country, I believe in the divine everlasting truth, I believe in the resurrection of Hungary” — advocates a return to Hungary’s pre-World War I borders; a territory that includes parts of modern-day Romania, Ukraine, Slovakia and Serbia.

Today, the organization presents itself as a “conservative, right-wing” group independent of party politics. But some of the organization’s newer members also openly embrace racist and anti-Semitic views. Footage on YouTube of a 2012 swearing-in ceremony of new members reveals Zsolt Bayer, a publicist and writer known as one of Hungary’s most outspoken anti-Semites, being initiated as a member.

In 2013, Hungary’s highest court formally ruled that one of Bayer’s articles was anti-Semitic. In a 2016 article that earned the protest of Israel’s ambassador to Hungary, the Vitézi Rend member asked, “Why are we surprised that the simple peasant” didn’t interfere with the deportation of Hungarian Jews to Nazi concentration camps “when the ‘Jews’ broke into his village and beat the priests to death or hung them from lamp posts, the judge and everyone they didn’t like…?”

Though Gorka did not respond to inquiries about his relationship to the Vitézi Rend, when the Forward revealed in February that he had co-founded a political party together with former members of the Hungarian far-right Jobbik party and wrote articles for a Hungarian paper known for its anti-Semitism, the White House aide responded on Twitter by quoting a friend: “Sharing a room w Helen Keller does not make 1 blind; sharing a subway car w Albert Einstein does not make 1 a genius.”

But Einhorn, the immigration expert, stressed a larger moral principle was at stake.

“Gorka is part of an administration issuing travel bans against countries and people as a whole,” he said. “For someone who is part of this effort to not answer your question [about his membership] and yet support what’s gong on in the West Wing where he works is the height of hypocrisy. The administration that makes so much of protecting us from extremists while looping the guilty in with the innocent should at least require its officials tell the truth.”

Gorka’s inconsistent record on his affiliation with the Vitézi Rend is one of several ways in which the deputy assistant to the president may be misconstruing his past.

Adrian Weale, who served as a British Intelligence Corps officer in the 1980s, traced how Gorka’s claims to have worked on counter-terror issues for British Military Intelligence in Northern Ireland and on collecting evidence for the war crimes tribunal set up after the collapse of Yugoslavia are unlikely to be true. According to Weale, Gorka “has never been an operational practitioner of counter-terrorism.”

At the same time, Gorka’s credentials as an academic expert in terrorism have been widely questioned. His doctoral dissertation has been dissected by various academics who say he is not an expert in their field, has never lived in a Muslim-majority country, does not speak Arabic and has avoided publishing any serious, peer-reviewed academic research.

Gorka’s doctoral supervisor in Hungary, András Lánczi, is an expert on political philosophy and Hungarian politics, but has never worked on terrorism, counter-terror or Islam-related research.

Writing in Foreign Policy, Colin Kahl, a deputy assistant to former President Obama and national security adviser to his vice president, Joe Biden, noted that it appears Gorka does not currently possess Top Secret or a Top Secret/Sensitive Compartmented Information security clearance. Nevertheless, in his frequent appearances in the media Gorka presents himself as having insight into decision making and threat intelligence to which only someone with a clearance would legally have access.

Gorka, who worked in Hungary’s Ministry of Defense and served in the British military, became a U.S. citizen only five years ago.

Others before Gorka have become American naturalized citizens and have quickly taken on senior government roles. One example is Martin Indyk, who was born in London and raised in Australia but nevertheless became a special assistant to President Clinton and served on the National Security Council before becoming the U.S. ambassador to Israel.

But Gorka’s position is distinguished by his past work for foreign governments, involvement with nationalist and far-right groups and figures, and, perhaps most important, for security investigators, inconsistencies in how he portrays his own past.

(h/t Forward)

Mike Flynn Was Paid By Russia’s Top Cybersecurity Firm While He Still Had Top-Secret-Level Security Clearance

Leave a comment

Retired Gen. Michael Flynn was paid $11,250 by Russia’s top cybersecurity firm, Kaspersky, in 2015, according to new documents obtained and published by the House Committee on Oversight and Government Reform on Thursday. Flynn was also paid $11,250 by the Russian charter cargo airline Volga-Dnepr Airlines, according to the documents.

Flynn was paid for his work with both companies while he still had top-secret-level security clearance, a year after he was fired as head of the Defense Intelligence Agency, The Wall Street Journal’s Shane Harris reported.

Kaspersky said in a statement provided to Business Insider that the company had “paid Gen. Flynn a speaker fee for remarks at the 2015 Government Cybersecurity Forum in Washington, DC.”

Another keynote speaker, Rep. Michael McCaul, was not paid by Kaspersky to speak at the event, his representative confirmed to Business Insider on Thursday. Kaspersky said that was because Flynn was a member of a speakers bureau that required a speaking fee, whereas McCaul was not.

Chris Haddad, another keynote speaker at the forum, told Business Insider he can’t remember if Kaspersky paid him to speak at the event.

Flynn — who was forced to resign as national security adviser in early February after he misled Vice President Mike Pence about his phone calls with the Russian ambassador to the US, Sergey Kislyak — was also paid $33,750 to speak at a gala celebrating the 10th anniversary of Russia’s state-sponsored news agency, Russia Today, in December 2015.

The oversight committee received the documents earlier this month from Flynn’s speakers bureau, Leading Authorities, after requesting information from the bureau relating to Flynn’s speaking engagements or appearances “in connection with RT, any agent or affiliate of RT, or any agent or instrumentality of the Russian government.”

Leading Authorities redacted information about Flynn’s other speaking engagements in 2015 that were presumably not connected to Russia.

The oversight committee had previously called on the Defense Department to investigate whether Flynn had run afoul of the US Constitution by being paid to speak at the RT gala. The lawmakers pointed to a report released in January by the US intelligence community concluding that RT, as part of Russia’s “state-run propaganda machine,” served as “a platform for Kremlin messaging to Russian and international audiences.”

The conclusion was in the community’s report about Russia’s attempt to influence the US election.

Flynn told The Washington Post last year that he had been paid to speak at the gala, but he would not disclose the amount. He also did not disclose the paid work he had done for Kaspersky and Volga-Dnepr Airlines, which transports military aircraft, in the summer of 2015.

Email correspondences between RT employees and Leading Authorities reveal that RT wanted Flynn to talk about the “decision-making process in the White House — and the role of the intelligence community in it” with regard to US policy in the Middle East over the last decade.

An RT official wrote in an email on November 20, 2015, that RT wanted Flynn to speak about “the decision-making process in the White House” when it came to the “Middle East security situation.”

Russia intervened in the Syrian civil war on behalf of Syrian President Bashar Assad, who the Obama administration had said should step down, in the months before the gala.

The oversight committee’s findings come just over a week after Flynn registered as a foreign agent with the Justice Department for his lobbying work in the latter half of 2016 on behalf of a Turkish businessman connected to the Turkish government.

“I cannot recall any time in our nation’s history when the president selected as his national security advisor someone who violated the Constitution by accepting tens of thousands of dollars from an agent of a global adversary that attacked our democracy,” Rep. Elijah Cummings, the ranking member of the House Committee on Oversight and Government Reform, wrote in a letter to President Donald Trump on Thursday.

“I also cannot recall a time when the president and his top advisers seemed so disinterested in the truth about that individual’s work on behalf of foreign nations — whether due to willful ignorance or knowing indifference.”

The White House did not immediately respond to request for comment.

(h/t Business Insider)

 

1 … 202 203 204 205 206 … 239