Tag: conflict of interest

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

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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)

President Heads to Trump Golf Club in Virginia for “Meetings”

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President Trump went to Trump National Golf Club in Virginia on Saturday for meetings.

It was not immediately clear from pool reports who the president was planning to meet with.

It is the president’s eighth weekend in a row making a trip to a Trump-owned property.

Trump frequently criticized former President Obama for golfing on weekends and vacations during his presidency.

Trump’s visit to Virginia comes one day after House Republicans pulled legislation to repeal and replace ObamaCare moments before a planned vote. Repealing ObamaCare was a key campaign promise of Trump and most GOP lawmakers and candidates over the last few election cycles.

(h/t The Hill)

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

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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.”

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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)

Ivanka Trump’s Expanded White House Role Raises Ethical Issues

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After months of attending meetings of world leaders and visiting factories with her father, the role of first daughter Ivanka Trump is officially expanding – creating new ethical issues for an administration that has been heavily criticized over its potential conflicts of interest.

She will not have a specific title, but Trump will have an office in the West Wing, a government-issued phone and computer and security clearance to access classified information, and she will advise her father.

“While there is no modern precedent for an adult child of the president, I will voluntarily follow all of the ethics rules placed on government employees,” she told Politico in a statement.

But following the ethics guidelines should not be voluntary, said Richard Painter, a law professor at the University of Minnesota who served as chief ethics lawyer for George W Bush between 2005 and 2007.

“Given what she’s going to do, I don’t think she has any choice,” he said. “She has a West Wing office, she has equipment, she has a White House email address, she’s going to be doing policy work,” said Painter.

“For purposes of the conflict of interest statute, I believe she is a government employee,” he added.

Ivanka Trump’s lawyer, Jamie Gorelick, argues that since she will earn no salary and not be sworn in, she does not count as a government employee. There is no precedent for adult children whose father is president working in the White House, although two presidents – Andrew Jackson and James Buchanan – had their nieces serve in the role of first lady since Jackson was a widower and Buchanan a bachelor.

Trump has handed control over the day-to-day running of her eponymous clothing business to an executive and its assets are maintained by a trust managed by two of her husband’s siblings.

As part of the trust rules, outlined in the New York Times, Trump can veto any potential business deals for her clothing company that might create a conflict with her political work.

That means, points out Painter, that Trump has to know about any new deal that might put her at risk of breaking the statute, meaning she can be held responsible.

“She’s got accountability on that stuff. She can’t just blame the trustee,” he said.

Trump’s marriage to her father’s senior adviser, the real estate developer Jared Kushner, poses additional potential problems, because both could benefit financially from each other’s businesses.

Painter warned that the pair should avoid official political discussions involved with trade agreements regarding textiles, real estate and even bank deregulation, since that can affect real estate.

That means if the premier of China visits the White House – most of Ivanka Trump’s clothing line is made in China and Hong Kong – it is fine for her to attend the meeting, but she should not mention trade and if the discussion begins to focus on trade, she should excuse herself, says Painter.

The ethics expert noted approvingly that Ivanka Trump engaged Wilmer Cutler Pickering Hale and Dorr, the same legal services used by the secretary of state, Rex Tillerson, former head of ExxonMobil, to handle issues of conflict of interest. Kushner also used the DC-based lawyers to manage his potential conflicts of interest with his family business after taking the role of adviser in the Trump administration.

“It’s a criminal statute, so people better not mess up under it. But I think she’ll do the right thing,” said Painter.

(h/t The Guardian)

Betsy DeVos Hands Victory to Loan Firm Tied to Adviser Who Just Quit

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Americans who default on some of their federal student loans are likely to pay more after Education Secretary Betsy DeVos reversed an Obama administration directive limiting some fees. But it turns out the Trump administration decision has some beneficiaries—including the father of a key DeVos lieutenant who just quit.

DeVos’s decision, announced Thursday in a memorandum to the student loan industry, allows companies known as guaranty agencies to charge distressed student debtors fees equivalent to 16 percent of their total balance, even when borrowers agree within 60 days to make good on their bad debt.

The reversal is almost certain to hand United Student Aid Funds Inc., the nation’s largest guaranty agency, a victory in its two-year legal battle against her department. The fees could translate into an additional $15 million in annual revenue for the company, filings in a related lawsuit suggest. Until Jan. 1, United Student Aid Funds was led by Bill Hansen, who served as Deputy Secretary of Education under President George W. Bush. His son, Taylor Hansen, a former for-profit college lobbyist, was until three days ago one of the few DeVos advisers with professional experience in higher education.

The younger Hansen resigned from the Education Department on Friday, department spokesman Jim Bradshaw said in an e-mail. Hansen couldn’t be immediately reached for comment on his departure.

Ben Miller, senior director for postsecondary education at the Center for American Progress, a persistent critic of the new Republican administration, said on Twitter the rule change was “an early Father’s Day gift in the Hansen household.” U.S. Senator Elizabeth Warren, a Massachusetts Democrat, was equally blunt: “There’s no question” that Taylor Hansen’s family ties posed a conflict of interest.

Tens of millions of dollars in revenue was at stake for companies such as United Student Aid Funds, which until 2015 had regularly charged borrowers the fee. A senior executive there last year warned in a court filing that the Obama administration’s decision to prohibit the fees—and to remind the industry that such fees had long been banned—generated “potentially massive retroactive liability” for companies such as United Student Aid Funds in the form of federal fines and lawsuits from aggrieved debtors. The company reckons it levied as much as $119 million in these fees from 2007 to 2015, or about $15 million annually.

Meanwhile, other companies active in student loan matters faced the prospect of having to reverse years of assessed fees and unravel tens of thousands of borrowers’ accounts to recalculate their balances, according to a legal filing last year by the National Council of Higher Education Resources, a Washington trade association. Had the Obama administration’s decision stood, a federal judge warned in 2015 that the entire student loan industry faced the prospect of being sued for allegedly violating anti-racketeering laws by imposing the fees.

DeVos’s decision is likely to put those concerns to rest.

With almost all senior positions at the Education Department vacant—and few political hires with professional experience in higher education—the younger Hansen may have wielded significant influence on DeVos’s policies. With his departure, the department has yet another post to fill.

“We have no idea what Betsy DeVos thinks about or wants to do on higher education policy. If one of the key people advising her is someone whose close family member is hoping to charge defaulted borrowers a lot more money, that’s not a good sign of her agenda,” Miller said before the department announced Taylor Hansen’s exit.

Both the Education Department and Bill Hansen’s current organization, of which he is chief executive, Strada Education Network (formerly known as USA Funds), said there’s no impropriety. Taylor Hansen recused himself from “all matters” related to United Student Aid Funds’ lawsuit challenging the Obama administration directive, Bradshaw said. “He served ably and without conflict and decided his service had run its course,” Bradshaw said Monday, declining further comment. But it’s unclear whether Taylor Hansen’s recusal extended to internal department discussions over the appropriateness of the fees. Bradshaw didn’t answer additional questions, and Taylor Hansen didn’t respond to emails, phone calls, and a message sent on social network LinkedIn seeking comment.

Bob Murray, a spokesman for Bill Hansen, said no one representing the company had asked Taylor Hansen to intervene on its behalf in its dispute with the department. Furthermore, he said, United Student Aid Funds is now owned by Great Lakes Higher Education Corp. Murray said that Bill Hansen declined to comment.

United Student Aid Funds said in court filings that the Obama administration unfairly changed longstanding Education Department policy when it announced in 2015 that fees added to quickly resolved defaulted loans were illegal. For example, according to industry lobby National Council of Higher Education Resources, the department had never flagged the fee as inappropriate in any of the more than 135 audits or reviews it conducted of companies such as United Student Aid Funds since 1992. The feds, the group said, “knowingly acquiesced for years.” In the eyes of the industry, DeVos is simply righting a wrong by reversing Obama’s move.

Bill Hansen nonetheless benefits from DeVos’s decision. Strada is still liable for potential costs stemming from United Student Aid Funds’ lawsuit against the Education Department, as well as a related class action lawsuit filed by borrowers over the same issue, said Richard George, chief executive of Great Lakes.

United Student Aid Funds reached a proposed settlement in January to resolve the proposed class action, filed by Minnesota resident Bryana Bible in 2013 on behalf of borrowers charged what she alleged to be illegal fees. The deal calls for 35,516 borrowers, and their lawyers, to split $23 million to partially reimburse them for as much as $119.1 million in fees assessed over eight years that, under Obama administration guidelines, they shouldn’t have been charged. A federal judge is due to decide on the proposed settlement in June.

The now-permissible fees could also beneficially impact Strada’s future revenue under an agreement that calls for Great Lakes to give Strada grants partly based on how United Student Aid Funds’ loans perform, a person familiar with the matter said. When annualized, the fees represent about 13 percent of United Student Aid Funds’ average annual income over the past five years, according to its financial reports.

For struggling borrowers, said Rohit Chopra, a senior fellow at the Consumer Federation of America who previously advised Obama’s Education Department and was the top student loan official at the federal Consumer Financial Protection Bureau, “this just adds insult to injury.”

(h/t Bloomberg)

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

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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)

 

Ethics Documents Suggest Conflict Of Interest By Trump Adviser

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Federal records indicate that a key adviser to President Trump held substantial investments in 18 companies when he joined Trump in meetings with their CEOs.

The investments of Christopher Liddell, the president’s director of strategic initiatives, totaled between $3 million and $4 million. Among the companies in Liddell’s portfolio, and whose CEOs were in the meetings: Dell Technologies, Dow Chemical, Johnson & Johnson, JPMorgan Chase, Lockheed Martin and Wal-Mart.

When Trump conferred with the chiefs of Ford, General Motors and Fiat-Chrysler last month, Liddell attended the session. He was invested in all three companies at the time.

Details of Liddell’s investments are contained in documents he filed with the White House ethics officer in preparation for divesting his holdings. He was seeking certificates of divestiture, which allow federal appointees to defer paying capital-gains taxes by reinvesting in a blind trust or similar arrangement.

The watchdog group Citizens for Responsibility and Ethics in Washington filed a complaint Tuesday with White House Counsel Donald McGahn, raising concerns that Liddell may have violated the federal conflict of interest law, a criminal statute.

The complaint states: “If Mr. Liddell personally participated in meetings with companies in which he held significant amounts of stock, he may have violated these rules.”

The White House responded with this statement: “Mr. Liddell has been working with the Office of the White House Counsel to ensure he is fully compliant with his legal and ethical obligations in connection with his holdings and his duties in the White House.”

Liddell was born in New Zealand and is a U.S. citizen. In the past he has worked as chief financial officer of Ford Motors, International Paper and Microsoft.

It’s not clear whether Liddell now has sold off his investments, but he apparently had not done so before the meetings in question. The meetings were held on Jan. 23, Jan. 24 and Feb. 3. On Feb. 9, the Office of Government Ethics issued four certificates of divestiture for Liddell and his wife. They would be worthless if the assets had already been sold.

The complaint is one of several actions by CREW on White House ethics issues. The group says in a lawsuit that Trump is violating the Constitution’s ban on foreign emoluments (gifts); it has questioned the ethics of presidential counselor Kellyanne Conway after she urged TV viewers to buy Ivanka Trump’s fashion merchandise; and it challenged the lack of transparency of two White House advisory committees.

CREW Director Noah Bookbinder said of the White House, “It seems nobody is concerned about people making decisions based on their personal interests and not the interests of the American people.”

(h/t NPR)

Flynn Attended Intel Briefings While Taking Money To Lobby for Turkey

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Former National Security Advisor Michael Flynn was attending secret intelligence briefings with then-candidate Donald Trump while he was being paid more than half a million dollars to lobby on behalf of the Turkish government, federal records show.

Flynn stopped lobbying after he became national security advisor, but he then played a role in formulating policy toward Turkey, working for a president who has promised to curb the role of lobbyists in Washington.

White House spokesman Sean Spicer on Friday defended the Trump administration’s handling of the matter, even as he acknowledged to reporters that the White House was aware of the potential that Flynn might need to register as a foreign agent.

When his firm was hired by a Turkish businessman last year, Flynn did not register as a foreign lobbyist, and only did so a few days ago under pressure from the Justice Department, the businessman told The Associated Press this week.

Attempts by NBC News to reach the Turkish businessman, Ekim Alptekin, were unsuccessful Friday.

Price Floyd, a spokesman for Flynn, said the retired general would have no comment.

Flynn was fired last month after it was determined he misled Vice President Mike Pence about Flynn’s conversations with the Russian ambassador to the United States. His security clearance was suspended.

When NBC News spoke to Alptekin in November, he said he had no affiliation with the Turkish government and that his hiring of Flynn’s company, the Flynn Intel Group, had nothing to do with the Turkish government.

But documents filed this week by Flynn with the Department of Justice paint a different picture. The documents say Alptekin “introduced officials of the Republic of Turkey to Flynn Intel Group officials at a meeting on September 19, 2016, in New York.”

In the documents, the Flynn Intel Group asserts that it changed its filings to register as a foreign lobbyist “to eliminate any potential doubt.”

“Although the Flynn Intel Group was engaged by a private firm, Inovo BV, and not by a foreign government, because of the subject matter of the engagement, Flynn Intel Group’s work for Inovo could be construed to have principally benefited the Republic of Turkey,” the filing said.

The firm was paid a total of $530,000 as part of a $600,000 contract that ended the day after the election, when Flynn stepped away from his private work, the documents say.

During the summer and fall, Flynn, the former director of the Defense Intelligence Agency, was sitting in on classified intelligence briefings given to Trump.

Spicer acknowledged Friday that Flynn’s lawyer called the Trump transition team inquiring about whether Flynn should amend his filing to register as a foreign agent.

“That wasn’t the role for the transition,” Spicer said. “This was a personal matter, it’s a business matter.”

He did not explain whether anyone in the Trump operation dug into Flynn’s lobbying work.

It was well known that on Election Day, Flynn authored an op-ed in the Hill, a Washington newspaper, in which he lambasted Fethullah Gülen, a Turkish cleric residing in Pennsylvania who is blamed by the Turkish government for fomenting a July coup attempt there.

Previously, Flynn had seemed to praise the coup attempt.

According to the Justice Department filing, Flynn’s firm was hired to gather information about Gülen, and to produce a short film about its investigation.

“Flynn Intel Group was tasked to perform investigative research for a specified scope of work using its laboratory team of senior defense, diplomacy, development, and intelligence professionals over a three-month period,” the filing said. “Flynn Intel Group was to retain an experienced filming and production crew in order to develop a short film piece on the results of its investigation, and a public affairs firm to utilize for public affairs as needed. Flynn Intel Group held weekly calls with the client to report engagement progress.”

Even some Republicans were wondering how the White House allowed Flynn to take one of the most sensitive jobs in the government.

“Makes you wonder if an adequate background check has been done,” Rep. Steve King of Iowa said on MSNBC. “I think we need to know a lot more.”

Ethics experts say more information is needed to know whether Flynn may have run afoul of any conflict of interest rules. His receipt of a large sum of money on behalf of the Turkish government may have meant he should have avoided specific decisions regarding Turkey, but the details would be crucial.

It wasn’t immediately clear Friday whether Flynn recused himself from any matter while he was national security advisor, or whether he directly participated in decisions that had an impact on Turkey.

(h/t NBC News)

China Approves 38 New Trump Trademarks for His Businesses

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China has granted preliminary approval for 38 new Trump trademarks, paving the way for President Donald Trump and his family to develop a host of branded businesses from hotels to insurance to bodyguard and escort services, public documents show.

Trump’s lawyers in China applied for the marks in April 2016, as Trump railed against China at campaign rallies, accusing it of currency manipulation and stealing U.S. jobs. Critics maintain that Trump’s swelling portfolio of China trademarks raises serious conflict of interest questions.

China’s Trademark Office published the provisional approvals on Feb. 27 and Monday.

If no one objects, they will be formally registered after 90 days. All but three are in the president’s own name. China already registered one trademark to the president, for Trump-branded construction services, on Feb. 14.

If President Trump receives any special treatment in securing trademark rights, it would violate the U.S. Constitution, which bans public servants from accepting anything of value from foreign governments unless approved by Congress, ethics lawyers from across the political spectrum say. Concerns about potential conflicts of interest are particularly sharp in China, where the courts and bureaucracy are designed to reflect the will of the ruling Communist Party.

Dan Plane, a director at Simone IP Services, a Hong Kong intellectual property consultancy, said he had never seen so many applications approved so quickly. “For all these marks to sail through so quickly and cleanly, with no similar marks, no identical marks, no issues with specifications – boy, it’s weird,” he said.

The trademarks are for businesses including branded spas, massage parlors, golf clubs, hotels, insurance, finance and real estate companies, retail shops, restaurants, bars, and private bodyguard and escort services.

Spring Chang, a founding partner at Chang Tsi & Partners, a Beijing law firm that has represented the Trump Organization, declined to comment specifically on Trump’s trademarks. But she did say that she advises clients to take out marks defensively, even in categories or subcategories of goods and services they may not aim to develop.

“I don’t see any special treatment to the cases of my clients so far,” she added. “I think they’re very fair and the examination standard is very equal for every applicant.”

Richard Painter, who served as chief ethics lawyer for President George W. Bush, said the volume of new approvals raised red flags.

“A routine trademark, patent or copyright from a foreign government is likely not an unconstitutional emolument, but with so many trademarks being granted over such a short time period, the question arises as to whether there is an accommodation in at least some of them,” he said.

Painter is involved in a lawsuit alleging that Trump’s foreign business ties violate the U.S. Constitution. Trump has dismissed the lawsuit as “totally without merit.”

China’s State Administration for Industry and Commerce, which oversees the Trademark Office, and Trump Organization general counsel Alan Garten did not immediately respond to requests for comment.

(h/t NBC News)

White House Caught Copying From ExxonMobil Press Release

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Rex Tillerson, the new Secretary of State, was the former head of fossil fuel giant ExxonMobil and close friend to Russian President Vladimir Putin. Both of these factors were enough to cause massive concern amongst both Democrats and Republicans alike, but Tillerson squeezed through the vetting process and is now the top American diplomat in the land.

People worrying about conflicts of interest still have good reasons to be concerned. The Trump administration’s push for more coal and oil in America’s energy mix is made all the easier with the former Exxon CEO in the Cabinet, and it appears that the President himself has recently taken to openly praising the company on Twitter.

Rex Tillerson, the new Secretary of State, was the former head of fossil fuel giant ExxonMobil and close friend to Russian President Vladimir Putin. Both of these factors were enough to cause massive concern amongst both Democrats and Republicans alike, but Tillerson squeezed through the vetting process and is now the top American diplomat in the land.

People worrying about conflicts of interest still have good reasons to be concerned. The Trump administration’s push for more coal and oil in America’s energy mix is made all the easier with the former Exxon CEO in the Cabinet, and it appears that the President himself has recently taken to openly praising the company on Twitter.

In a statement dated March 6, the White House noted that “President Donald J. Trump today congratulated Exxon Mobil Corporation on its ambitious $20 billion investment program that is creating more than 45,000 construction and manufacturing jobs in the United States Gulf Coast region.”

“This is a true American success story,” Trump said. Indeed, this was the initiative that he recently spoke about on Twitter.

However, there’s a problem with this – a good chunk of this press release was lifted ad verbatim from an official ExxonMobil press release. For some reason, the White House and ExxonMobil decided to release statements, focusing on precisely the same topic of discourse, at exactly the same time.

It is extremely likely, of course, that this is not a coincidence. The White House could have at least tried to rewrite the paragraph to make it their own a little, but they were too lazy even to do that. Or does ExxonMobil now tell the White House what to say?

We shouldn’t even be too happy with the investment either. There are plenty more jobs waiting to be taken in the booming renewable energy sector than there is in the fossil fuel industry, but instead, the focus is on occupations that will help change the climate for the worse.

And yes, new jobs are a good thing, but this ExxonMobil program has been running since 2013, so it’s got nothing to do with Trump at all.

Some might say that he’s highlighting it now to make it look like jobs are on the up under his watch – when in fact, the record streak of job creation America is currently experiencing is down to the hard work of his predecessor.

(h/t IFL Science)

 

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