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Walking the Talk: A Speech for All Seasons

Rev. Jim Conn

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(Lawrence Jackson/White House)

When the President finished his inaugural speech the other week, I said to my wife Susan, “That was a great piece of rhetoric.” By that I did not mean a lot of flowery words strung together or a piece of political discourse from a particular party’s perspective. I meant it as high praise of a public address that transcends the immediate moment and inspires us as a people to live up to our nation’s principles. This one, unlike four years ago, felt like the caliber of speeches I had studied in college in a course on Rhetoric and Public Address.

At least that is what I thought I’d heard. The President talked about the unresolved problems that face us as a nation: immigration, gun reform, deficit control, climate change, economic inequality. He placed those within the context of this nation’s founding principles: life, liberty, the pursuit of happiness. Then the President reminded us how we Americans have always acted to resolve the issues that face us: from Seneca Falls to Selma to Stonewall – three locations that struck movements to expand democracy and make the pursuit of happiness more possible for more people. And he did it inside of 10 minutes.

But when I opened the newspapers the next day, I was shocked to discover I had heard a “liberal” speech. I discovered that I was hearing the President’s agenda for the term ahead, while I thought I had heard him list the problems that stand before us as a nation and which we must address to move forward as a society. Yes, I did hear him defend Social Security and Medicare, but as a platform from which people take risks, which is what I think entrepreneurism is about, whether someone is starting a new business or a new social service project. But I did not hear the partisan panting I recall from Bush in 2004 or Clinton, for that matter, in 1996.

Had this been a “liberal” speech it would have mentioned the problem of low-wage jobs, perhaps affirm the role of organized labor in pressing for middle-income pay checks, maybe throw in something about raising the minimum wage to a livable wage, perhaps a word about the fraying safety net. But the President didn’t include any mention of those issues except a brief reference to the waning middle class. Since the speech was labeled a “liberal speech,” I thought I must be so left of center that I didn’t even recognize the speech for what it was.

Then I got an email from a friend active in the arena of public policy in Los Angeles who defines himself as a “radical moderate.” He was on a plane back from the inauguration and a couple of side meetings while in Washington. He assured me that from what he was hearing “change” was going to come. He didn’t say what kind of change or in which areas, but it was on its way.

In the weeks that have followed, more thoughtful commentary has shifted toward this direction. The Republicans split over the fiscal cliff crisis, and then they backed away from a debt ceiling fight. Republicans in the House seem divided over which strategy they should take in the immediate near term – hard line hold ‘em or issue-by-issue pragmatism.

Perhaps the pundits and the papers couldn’t see outside their own lenses of either/or, us/them, this/that. It had to be a liberal speech unnerving to conservatives because it was surely not a speech that bowed to the powers of resistance — powers that would return us to the past. Apparently, there are and only can be two poles which must be in opposition. According to this view we must always be in a great conflict of some sort.

So, have the tectonic plates of polarization actually shifted in some way the press has missed? I have no idea, but the President we elected thinks we are a nation facing major issues that we must address for the health of the country and the continuation of this grand experiment we call democracy. At least, that’s what I heard him say, and I think my college Rhetoric and Public Address professor would have applauded.

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Politics & Government

A Law Ending Cash Bail Gives Judges Enormous Power Over Defendants

A recently signed bill was supposed to end the tyranny of money bail over low-income people in California’s jails. But critics say it is an example of good intentions becoming bad law.

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Politics & Government

Rick Scott Invested in the Same Financial Firms As Florida’s Pension System

Co-published by MapLight
For most of his time in office, Florida’s governor has shielded his investments from public view. A new disclosure shows Rick Scott and his wife have invested at least $18 million in financial firms managing money for the state’s pension system that he oversees.

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Former SEC Lawyer: “There needs to be an investigation into whether the state is subsidizing Rick Scott’s personal returns.”


Co-published by MapLight

 

Florida Gov. Rick Scott and his wife have invested at least $18 million in three financial firms managing money for the state’s pension system that Scott oversees — a situation that intertwines the governor’s personal finances with his responsibility for supervising state employees’ retirement savings.

The investments were first divulged in a federal financial disclosure form that Scott filed as part of his U.S. Senate campaign in July. For most of his time in office, Scott has shielded his investments from public view, and only reported their overall value in his blind trust.

The terms of Scott’s investments remain undisclosed. The firms’ own corporate documents say they can give certain investors special preferences not afforded to other investors — and experts have in recent years argued that hedge funds, private equity firms, and other “alternative investments” are giving such preferences to elite investors. One former Securities and Exchange Commission attorney told MapLight and Capital & Main that Scott must disclose whether he is being given such preferences.


Critics have raised questions about how blind the Scott family trusts really are.


Florida ethics laws are supposed to prohibit state officials from entering into contractual relationships with companies that do business with their agencies. However, after Scott became governor in 2011, state ethics officials said he and his family members could put their assets into a blind trust to avoid conflicts of interest and still maintain their investments in companies operating in Florida.

Critics have raised questions about how blind the Scott family trusts really are. Scott placed one of his longtime business associates in charge of managing his blind trust. The Tampa Bay Times reported that Scott’s blind trust has invested with a private equity firm tied to a high-speed rail project in Florida. The trust also had an indirect interest in a cancer treatment company that received tax breaks from Scott’s administration.


“The question is whether Rick Scott is being allowed to invest on better terms than the state pension fund.”


“When Governor Scott was elected, he put all of his assets in a blind trust, which is managed by an independent financial professional who decides what assets are bought, sold or changed,” said Scott campaign spokesperson Lauren Schenone. “The rules of the blind trust prevent any specific assets or the value of those assets within the trust from being disclosed to the governor, and those requirements have always been followed.”

Scott is one of three state officials who serve as trustees for the Florida State Board of Administration, which manages a $160 billion fund for roughly 400,000 retirees. Scott, Attorney General Pam Bondi, and Chief Financial Officer Jimmy Patronis oversee lucrative state investment deals granted to cash-hungry Wall Street firms.

The three firms that have received $325 million worth of Florida pension investments have allowed the Scott family’s blind trusts to simultaneously invest their personal fortunes in these funds. Scott’s investments in the funds did not appear in a 2014 disclosure itemizing his holdings. His campaign did not say when the investments were made.

“There are no ethics rules that prohibit or limit a trustee from investing in funds also invested in by the SBA,” said SBA spokesperson John Kuczwanski, though he added that trustees are subject to Florida’s general code of ethics. Kuczwanski said that the governor has no involvement in specific pension investment decisions.

Don Hinkle, a Democratic lawyer, filed a lawsuit last year alleging that the governor has failed to comply with the state’s blind trust and financial disclosure laws. He said he was surprised by the news that Scott had invested in the same firms as the Florida pension system.

“I would think that he would have avoided investments where the state of Florida’s money is propping his up,” Hinkle told MapLight and Capital & Main.

In 2011, a few months after Scott became governor, the SBA committed $150 million to Highline Capital Partners, a New York-based hedge fund. Scott’s financial disclosure shows that his family’s trusts have invested at least $4 million in the same Highline fund as the state.

The SBA also committed $100 million in 2015 to a hedge fund managed by Canyon Capital Advisors, a Los Angeles-based firm created by veterans of the notorious investment bank Drexel Burnham Lambert, which was driven into bankruptcy as a result of illegal and unethical trading practices. Scott and his family have invested at least $12 million in Canyon funds, according to his financial disclosure.

Before Scott became governor, the SBA invested $75 million with VSS, a New York-based private equity firm that was launched by a co-founder of Psychology Today. Scott and his wife, Ann, have invested more than $2.2 million in another VSS fund. A spokesperson for VSS said the firm doesn’t comment on its investors.

All three firms’ SEC filings say they can offer certain investors special fee terms or other benefits not offered to other investors.

“Alternative investment funds have the ability to offer every investor different fees at a different rate of return, so the question is whether Rick Scott is being allowed to invest on better terms than the state pension fund,” said former SEC attorney Edward Siedle, whose Florida-based firm conducts forensic investigations of state pension systems.

“If you give one investor an advantage, another investor has to be disadvantaged,” Siedle said. “That means there needs to be an investigation into whether the state is actually subsidizing Rick Scott’s personal returns and whether the governor enjoys advantages that are harming the retirees.”

Schenone, Scott’s spokesperson, said that his blind trust has “been upheld multiple times by the State Commission on Ethics and the court system. Governor Scott has also followed the requirements of all state and federal financial filings.”

She noted that former Florida Republican Gov. Jeb Bush and Scott’s 2010 Democratic opponent Alex Sink had also used blind trusts, although Scott’s campaign attacked Sink for hers at the time.

“Blind trusts sound good but can run afoul of state laws requiring public officials to disclose their personal finances,” a Scott campaign ad said in 2010. “[But] simply moving large amounts of money into a blind trust does not magically erase the knowledge of what you own.”


This piece was reported by Andrew Perez of MapLight and David Sirota of Capital & Main, and published in partnership with the Florida Center for Investigative Reporting

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Politics & Government

Cuomo Kept Fossil Fuel Pipeline Alive, Then Hired Pipeline’s Lobbyist to Run Reelection Bid

Co-published by WNYC New York Governor Andrew Cuomo’s administration delayed — rather than blocked — a fracked-gas pipeline project just before Cuomo hired Maggie Moran, a registered lobbyist for the pipeline’s parent company, to run his reelection campaign.

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Despite questions about special interests and revolving doors, Cuomo decided to hire a registered lobbyist to run his campaign.



Co-published by WNYC

 

New York Governor Andrew Cuomo hired a lobbyist for a natural-gas pipeline company to run his re-election campaign at the same time his administration was throwing a potential lifeline to the company’s controversial New Jersey-New York pipeline project.

Less than three months before the administration postponed a decision on the project, the fossil fuel company in question also donated $100,000 to a Democratic Party governors’ organization that supports Cuomo, government records show.

Cuomo spokesperson Rich Azzopardi asserted that there was no link between the lobbying, the donations and the administration’s pipeline decisions.

“Protecting New Yorkers and our environment are this administration’s top priorities, which is why decisions on individual projects are made at the agency level by career public servants who conduct a rigorous review of the facts and the science,” Azzopardi said.

The company — Transco, a subsidiary of The Williams Companies, a Tulsa-based fossil fuel conglomerate — has been seeking permission from Cuomo administration regulators since June of 2017. The project is a 23-mile natural gas pipeline from Old Bridge, New Jersey to Rockaway, New York.


Cuomo touts his environmental record but has also declined to reject fossil fuel industry campaign cash.


As residential customers seek to switch from heating oil to natural gas, Williams has argued that the pipeline expansion is necessary to “help ensure that reliable gas supplies are available to support these conversions.” The company says the project will displace about 900,000 barrels of heating oil a year and reduce CO2 emissions in New York City and Long Island.

Critics say the location of the pipeline puts the waters and shores of Lower New York Bay at risk of contamination and other environmental damage, and that it will continue the region’s reliance on fossil fuels, thereby setting back the fight against climate change.

Just this week, New York City Comptroller Scott Stringer called for the project to be terminated — echoing local activists who have demanded a permanent halt to the project.

Cuomo’s Department of Environmental Conservation (DEC) temporarily denied a water quality certification for the pipeline in April. But the ruling also allowed the company to re-submit the proposal for approval “without prejudice” — a maneuver that keeps the embattled project alive. The company submitted a new application in May — and Cuomo has declined to answer questions about whether or not he agrees with Stringer that the proposal should be blocked.

Amid the intensifying battle over the pipeline, Williams hired lobbying firm Kivvit to advocate for its interests in Albany last fall, according to state ethics records. Among the lobbyists registered to represent Williams is Maggie Moran, a well-known operative who advised his gubernatorial campaign in 2010.

In June, while she was registered as a pipeline lobbyist, Cuomo hired her to take the reigns of this year’s campaign. Moran took over two months after Joe Percoco, who ran both of Cuomo’s previous campaigns, was convicted on federal corruption charges — one of several corruption scandals that have dogged the Cuomo administration in recent months. She took a leave of absence from Kivvit when she joined the campaign, a spokesman says.


In the last few years, Cuomo’s administration has faced multiple corruption scandals, fueling critics’ assertions that he is too close to Albany influence peddlers.


State records show that Moran, who declined an interview request, began lobbying on behalf of Williams in September 2017 — three months after Williams first submitted its pipeline proposal to Cuomo administration regulators. Those records also show that Moran’s lobbying has been specifically targeted at the executive branch that Cuomo heads. Kivvit’s website says Moran “oversees all aspects of Kivvit’s day-to-day operations” and Kivvit has continued to lobby for Williams in 2018. Kivvit’s managing director is former Cuomo communications director Rich Bamberger.

As Cuomo administration regulators were reviewing the pipeline, Williams made two donations totaling $100,000 to the Democratic Governors Association, which lists Cuomo as a member of its leadership team and which has provided the campaign with polling research.

Internal Revenue Service records show that in February, one $50,000 donation came from Williams Companies and another $50,000 contribution came from the “Williams Transcontinental Gas Pipeline Company” — which is the overseer of the pipeline project before Cuomo’s administration. The New York Times on Friday reported that in that same month, Cuomo traveled to a Washington, D.C. DGA event on a chartered plane — and the association paid $10,725 for his trip.

Soon after the Williams donations to the DGA and Cuomo’s trip to the DGA event, the DGA gave more than $20,000 to Cuomo’s campaign, according to state disclosure records.

A Cuomo campaign spokesperson, Abbey Collins, said the governor did not solicit Williams’ contribution to the DGA.

Azzopardi, the spokesman for the governor’s office, said: “At no point did the agency or the governor’s office get approached on this project by Kivvit — any suggestion otherwise would be a trip into tinfoil hat country.”

The company has given regularly to both the Democratic and Republican governors’ associations in the past.

Timeline

June 30, 2017 – Transco, a Williams subsidiary, submits an initial application to the New York Department of Environmental Conservation for a water permit for the NESE pipeline.

September, 2017 – The Williams Companies hires public-affairs firm Kivvit to represent the pipeline project to the Cuomo administration.

Feb. 13, 2018 – The Williams Companies make a $50,000 contribution to the Democratic Governors Association, which lists Andrew Cuomo on its leadership team.

Feb. 21, 2018 – Transco makes a separate $50,000 contribution to the DGA.

April 20, 2018 – Under pressure from environmental groups to permanently block the NESE, the state instead keeps the project alive by dismissing Transco’s application “without prejudice.”

May 17, 2018 – Transco resubmits the water permit application, effectively delaying a final decision on the project until 2019.

May-June, 2018 – New York State ethics records show that Maggie Moran, managing partner at public affairs firm Kivvit, was registered to lobby for Williams on “Energy Issues.”

June 13, 2018 – The DGA makes a $20,166.66 contribution to Cuomo’s reelection campaign.

June 15, 2018 – Cuomo hires Moran to run his campaign, according to Politico.

The 2018 donations appear to be among the company’s largest ever to the DGA. The DGA has said corporate donations to the group cannot be earmarked to specific campaigns or candidates, and therefore there is no link between donations and public-policy influence.

Williams spokesperson Keith Isbell declined to discuss the company’s lobbying activities, its relationship with Moran or its donations to the DGA on the record.

“New York’s energy demands continue to grow at a startling rate,” he said. “The Northeast Supply Enhancement project is a critical step toward ensuring New York has the infrastructure in place to meet that demand with a mix of energy sources that are reliable, affordable and clean.”

In the last few years, Cuomo has faced multiple corruption scandals, fueling critics’ assertions that he is too close to Albany influence peddlers. Percoco, one of his closest aides, was convicted in March on federal corruption charges, and in July several other top Cuomo allies were found guilty of perpetrating a massive bid-rigging scheme.

Despite questions about special interests and revolving doors, Cuomo decided to hire a registered lobbyist to run his campaign amid the corruption trials. That decision follows Cuomo’s 2015 hiring of lobbyist William Mulrow to serve as his top aide in Albany.

Cuomo appointed Mulrow chairman of his reelection campaign last year, and Mulrow returned to his job at Blackstone, a Wall Street colossus that also has had fossil fuel-related business before Cuomo’s administration.

Cuomo is now facing a spirited Democratic primary challenge from actress Cynthia Nixon, who has demanded an end to pipeline approvals. During the campaign, the governor has touted his environmental record, including his formation of the U.S. Climate Alliance with other blue-state governors following the Trump administration’s withdrawal from the Paris Agreement last year. The Cuomo administration has also rejected two other proposed pipeline projects.

But Cuomo has declined to reject fossil fuel industry campaign cash, and earlier this year affirmed his support for natural gas development — even as environmental groups continue to pressure his administration to block proposals for new gas-fired plants and pipeline projects around the state.

In the NESE pipeline fight, the Cuomo administration denied Williams’ subsidiary Transco a water quality certification, citing “potentially significant environmental impacts that raised serious concerns.”

“The construction of the project could have significant water quality impacts in New York State,” said Cuomo DEC appointee Thomas Berkman in a letter released just weeks after Nixon entered the primary race against the governor. “This includes potentially significant impacts from the resuspension of sediments and other contaminants, as well as to habitats due to the disturbance of shellfish beds and other benthic resources. In addition, the construction of the Project could potentially impact Atlantic sturgeon and other protected species.”

However, because state regulators rejected the application “without prejudice,” the state allowed Williams to resubmit its proposal in May. That has raised fears among environmental activists that Cuomo’s administration is delaying a decision on the pipeline until after next week’s gubernatorial primary and the general election in November.

According to bi-monthly reports filed with the state’s Joint Commission on Public Ethics, Moran was registered to lobby the executive branch of New York State government on behalf of Williams as recently as May and June of this year — just as the pipeline’s water quality permit was resubmitted, and just before she joined the Cuomo campaign as manager.

Cuomo campaign spokeswoman Abbey Collins said “Maggie was not on the campaign when the decision was made by the governor’s administration.”

She said Moran’s firm handled media relations and advertising for the company but didn’t lobby the legislature or the executive branch. She said it was required to register as a lobbyist by new rules about companies that have contact with the press.

In a letter filed with state ethics regulators, an official from the Williams Companies said the conglomerate hired Moran’s firm to “engage in communications activities to the general public that spur communications to the executive and legislative branches of New York State government.”

Williams is not the only Moran client with business before Cuomo. State records show that as of June, Moran has also been registered to lobby “administrative branches of New York State government” on behalf of Vertex Pharmaceuticals, which is currently negotiating with the New York Department of Health over the price of its cystic fibrosis drug Orkambi. Records show that Vertex hired Kivvit in May of this year, immediately following a state panel’s recommendation that New York’s Medicaid program impose a price cap on Orkambi.

Another of Moran’s clients at Kivvit is Tesla. The electric carmaker is the parent company of SolarCity, whose state-funded RiverBend factory is at the center of the ongoing Buffalo Billion probe. That investigation has seen Percoco convicted in federal court on three counts of bribery and fraud, and another former Cuomo aide, Todd Howe, plead guilty on similar charges.

Kivvit clients have contributed at least $544,000 to Cuomo’s campaigns since 2014, according to state campaign finance disclosures. Moran herself has donated $10,000 to Cuomo since 2015, records show.

In addition to approval from the Cuomo administration, Williams’ NESE pipeline also needs approval from the Federal Energy Regulatory Commission (FERC), whose five commissioners — four of whom are appointees of President Trump — are expected to issue a ruling on whether the project can move forward later this month.

The agency in March issued a report finding that the project “would result in some adverse environmental impacts” including “long-term impacts on air quality and noise” from a compressor station. However, the same report also asserted that most of the “impacts would be temporary and occur during construction.”

A coalition of environmental and citizens groups, Stop the Williams Pipeline, submitted more than 6,000 comments in opposition to the pipeline to the FERC during its public comment period. The group is also collecting signatures on a petition its members plan to submit to Cuomo later this year.

In announcing his opposition to the pipeline this week, New York City Comptroller Scott Stringer said he was concerned about the impact on many of the region’s sensitive ecosystems.

“The 23-mile pipeline would extend from New Jersey, along the Staten Island coast, past Coney Island and into the Rockaways,” he said in a statement. “Allowing the construction of the pipeline risks damage to many of New York’s most precious habitats and natural assets, including New York Harbor, Jamaica Bay, and the Rockaways’ many beaches.”


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Judging Kavanaugh

Kavanaugh’s Artful Dodging Leaves Roe v. Wade and Other Questions Unanswered

Legal scholar Erwin Chemerinsky says the Supreme Court nominee “is going to move constitutional law very substantially to the right, and this will hurt a lot of people. I think he’s going to be the fifth vote to gut many federal civil rights laws.”

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Gabriel Thompson

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White House photo of Kavanaugh family with President Trump.

Throughout the Senate Judiciary Committee confirmation hearings on U. S. Supreme Court nominee Brett Kavanaugh, Capital & Main will discuss the proceedings with Erwin Chemerinsky, dean of the University of California, Berkeley School of Law. Below is an excerpt of an interview that followed Wednesday’s testimony.


Capital & Main: Kavanaugh has written extensively on the idea of precedent and, on Wednesday, when asked about Roe v. Wade, described it as “precedent upon precedent.” What does that mean? Is he saying anything of substance?

Erwin Chemerinsky: He’s saying nothing of substance. First, even if the court doesn’t explicitly overrule Roe v. Wade, they can kill it by a thousand cuts by upholding the myriad of laws that impose restrictions on abortion. Two years ago, the court struck down a Texas law that would have closed most of the facilities in the state where abortions were performed. It was 5-3, with Justice [Anthony] Kennedy in the majority. The court can uphold laws like that and basically undercut Roe v. Wade. But beyond that, the fact that he says it’s precedent upon precedent, or that he respects precedent, doesn’t tell us what he’s going to do when he’s a justice and he has the power to overrule Roe v. Wade.

You can respect precedent until you don’t.

Exactly. And that’s true of every justice. I wrote a piece in the National Law Journal a few weeks ago saying that I don’t think the senators should waste their time asking his views on precedent. Because what he’ll say is, “Of course I believe in precedent.” Except sometimes precedent has to be overruled.

Also Read: “Supreme Court Nominee Brett Kavanaugh Faces a Low Admissions Bar”

Earlier this week, the Brookings Institution released a report in which the authors argued that Kavanaugh, if confirmed, must recuse himself from any future cases that deal with criminal investigations personally involving Trump.

I read it. We’re in an unprecedented situation. I can’t think of another time when a president who was under such active criminal investigation and being subjected to so many civil suits was nominating somebody to the Supreme Court. In the context of Richard Nixon, his appointments were in 1969 and 1971, and the Watergate burglary wasn’t until June of 1972. But it’s got to be remembered that whether a justice is recused is entirely up to that justice. Ultimately, if Kavanaugh is confirmed, whether he’ll recuse himself is up to Kavanaugh.

You were also among hundreds of legal scholars who signed a letter opposing the nomination of Kavanaugh. The letter argued that he “reflects a backward-looking view of the Constitution” and that his record “reveals a predisposition to decide cases in order to achieve results that threaten fundamental rights and in some cases the very lives of Americans.” If he is confirmed, what might change?

I think he is going to move constitutional law very substantially to the right, and that this will hurt a lot of people. I think he will be the fifth vote to either effectively or explicitly overrule Roe v. Wade. I think he will be the fifth vote to find that all affirmative action is unconstitutional. I think he’s going to be the fifth vote to allow states much more latitude in imposing the death penalty and draconian punishments. I think he’s going to be the fifth vote to gut many federal civil rights laws. I think that no longer will the majority of the court protect gay and lesbian rights.

During the second day of the confirmation hearing, Kavanaugh was pressed by Democratic senators about his views on executive power—specifically about whether a president has the ability to pardon himself, or whether he can be forced to respond to a subpoena.

He wouldn’t say a word.

So if we’re not going to get any new information from Kavanaugh during the hearing, what does a look at his past tell us about his views on executive power?

He’s got a paper trail on that. He wrote a law review article saying that he doesn’t believe that a sitting president should be subject to criminal or civil investigations. He gave a speech in which he said the case he most wants to see overruled in the Supreme Court is a case called Morrison v. Olson. That was a 1988 case that was 7-1, and which upheld the constitutionality of the independent counsel. He gave a speech where he said that the United States v. Nixon was likely wrongly decided. This was the unanimous Supreme Court case that said President Nixon had to release the Watergate tapes. This is something that makes Kavanaugh very troubling at this moment in history. Now more than ever, we need the courts to enforce the Constitution and check the president. This is a president who shows no understanding of the Constitution at all, who shows enormous autocratic impulses, and we have a Congress that so far has been unwilling to check the president. That means it’s the courts or nothing.


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Judging Kavanaugh

Supreme Court Nominee Brett Kavanaugh Faces a Low Admissions Bar

“Kavanaugh,” says UC Berkeley law school dean Erwin Chemerinsky, “doesn’t have to say any more than is needed to make sure he doesn’t lose the Republican vote, and he knows that.”

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Photo by Drew Angerer/Getty Images

Throughout the Senate Judiciary Committee confirmation hearings on U. S. Supreme Court nominee Brett Kavanaugh, Capital & Main will discuss the proceedings with Erwin Chemerinsky, dean of the University of California, Berkeley School of Law. Below is an excerpt of an interview that followed Tuesday’s testimony.


Capital & Main: The first day saw more than 70 arrests of protesters, along with an attempt by Democrats to delay Kavanaugh’s hearing. How unusual are these sorts of tactics?

Erwin Chemerinsky: It was very unusual for the Democrats to, in such a coordinated way, say that the hearing should be postponed until they have access to documents. Their point is: There’s no hurry. What’s the rush? Why not give us a chance to look at the documents? The problem is, of course, that the Republicans have the majority of the committee, and there’s nothing the minority party can do about it.

What might these documents reveal?

They could contain information that is very relevant to evaluating Brett Kavanaugh. As an example, the memos regarding Jay Bybee, the judge on the Ninth Circuit of Appeals, didn’t come out until after [Bybee] was already confirmed. Among the documents that came out was [his approval of] the so-called torture memos. [Bybee was confirmed by the Senate in 2003; his role in the torture memos wasn’t revealed until the following year.] Bybee would not have been confirmed if those documents had been known prior to his confirmation. So what the Democrats are saying is, “We should have access to all these documents—and we just got 42,000 of them last night. We need time to process them.”

Overall, did the American public learn anything new Tuesday?

No, not anything that we didn’t know before. We knew that Kavanaugh was going to give an opening statement filled with platitudes. And that’s what we got.

Supreme Court confirmation hearings can feel like a public performance in which very little, by design, is actually revealed.

In January 2006, I testified against the confirmation of Samuel Alito. At a break in the proceeding, then-Senator Joe Biden came up to me and said, “This is all an exercise in Kabuki theater.” He said that everyone knew that Samuel Alito was going to be a very conservative Supreme Court justice. The Republicans were all pretending he had no ideology, and the Democrats were all trying to ask him a question to trip him up, and he was too smart for that. I think that’s what we’re seeing again. Kavanaugh doesn’t have to say any more than is needed to make sure he doesn’t lose the Republican vote, and he knows that. I’m guessing that’s what we’re going to see this week.

It’s a low bar.

Right, exactly. What he knows is that he doesn’t have to actually answer questions.


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Labor & Economy

Ohio, NJ and California Pension Funds Invested $885 Million in Hedge Fund That Controls National Enquirer Parent

Co-published by MapLight and Fast Company
Under Republican governors, two states pumped hundreds of millions of dollars of pension cash into a high-risk hedge fund that took control of the National Enquirer’s parent company, American Media Inc.

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Co-published by MapLight and Fast Company

During the last five years, taxpayers in New Jersey, Ohio and California  have owned large financial stakes in the owner of the media company that allegedly helped the Trump campaign bury negative stories, according to documents reviewed by Capital & Main and MapLight.

Under Republican governors, New Jersey and Ohio committed at least $650 million of pension cash into Chatham Asset Management, a high-risk hedge fund that has taken control of the National Enquirer’s parent company, American Media Inc., which is at the center of the federal investigation into President Donald Trump’s 2016 campaign. California’s pension fund also has a $235 million stake in a Chatham fund.

The hedge fund is run by Anthony Melchiorre, a GOP donor who reportedly met with the president and AMI CEO David Pecker at the White House soon after Trump took office. Melchiorre and his wife have donated more than $100,000 to Republican candidates and party committees since 2010.

Trump’s former attorney, Michael Cohen, recently pleaded guilty to breaking campaign finance laws stemming from payments he made to women to hide affairs with the former reality TV star and real estate magnate. AMI executives helped Cohen purchase stories that could have hurt Trump’s presidential bid, according to the Wall Street Journal.

AMI has denied it helped Trump’s campaign, although Pecker was recently granted immunity as part of the Cohen probe. Former FEC commissioner Trevor Potter, the head of the nonprofit Campaign Legal Center, last week said the situation “presents a serious legal problem for AMI.” If those legal troubles end up depressing the market value of AMI, teachers, firefighters, cops and other public employees also could potentially suffer losses at a time when their pension funds are already facing shortfalls.

A New Jersey Treasury Department spokesperson said in an email that its Division of Investment “is in regular contact with its investment partners regarding underlying portfolio companies and provides feedback when appropriate. While DOI plays no role in the management of a fund’s portfolio companies, it expects the funds to invest in good businesses with strong management teams that follow all applicable laws.”

“I am personally appalled by the Enquirer being an accessory to Cohen’s criminal behavior on behalf of the candidate,” said Tom Bruno, a state union representative who is the chairman of the pension’s board of trustees and serves on New Jersey’s State Investment Council, which oversees the pension system’s investments.

“If the allegations are true, I would vote and argue for full divestiture,” he said. “I cannot talk on behalf of the entire SIC, but I will be doing everything in my power to convince a majority to vote the same way.”

Chatham did not respond to questions about how exposed taxpayers and pension systems might be to AMI and any financial consequences of its legal entanglements. A spokesman for the Ohio pension system said Thursday that the state asked for its money to be withdrawn from the Chatham fund in 2015; the money was redeemed in 2017.

“State officials are well-positioned and duty-bound to investigate allegations of potential wrongdoing in hedge fund portfolios,” said former Securities and Exchange Commission attorney Edward Siedle.

In 2013, former New Jersey Gov. Chris Christie’s administration moved $300 million of pension cash into the Chatham Fund, LP, which has owned a stake in AMI, according to SEC records. Last year, barely three months before Christie left office, his administration steered another $200 million to another Chatham vehicle.

In 2013 and 2014, an Ohio pension system partially controlled by Gov. John Kasich’s appointees committed $150 million to Chatham. The hedge fund finalized its deal to buy an ownership stake in AMI in the summer of 2014.

The Christie administration’s shift of $500 million into Chatham makes New Jersey retirees a substantial investor in the hedge fund, which manages $3.2 billion in assets, according to state records. Those records show the original $500 million investments are now worth as much as $692 million.

Best known for its lurid Enquirer headlines (“Aliens Are Living in My Toilet”), AMI has been beset by a difficult environment for print publications. Chatham has warned that its investments are risky and that a client “may lose its entire investment in a troubled company.” In early 2018, private equity giant Blackstone removed Chatham from one of its major investment funds.

Along with the public pension funds, four other private pension funds — including those for Ford and Toyota Motors employees — have had investments with Chatham, according to financial research firm Preqin.

AMI represents a large portion of Chatham’s portfolio. Internal hedge fund records from late 2017 show that AMI investments comprised 23 percent of the Chatham Asset Partners High Yield Fund’s portfolio. The hedge fund also has officials who serve as directors at AMI.

Attorney Jay Youngdahl, a former Harvard researcher who has served as a steelworkers pension trustee, said state officials may be able to take action to try to protect retiree investments.

“There are often clauses in agreements between pension funds and hedge funds that give states certain rights and recourse if they believe retirees’ money has been invested in companies engaging in criminal activity,” he said.


This story has been updated from its original version.

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Cuomo Received $25,000 From Weinstein Lawyer’s Firm as He Suspended Probe

Co-published by Sludge
New York Governor Andrew Cuomo halted an investigation into the Manhattan DA’s handling of the Harvey Weinstein case just as the law firm representing the Hollywood producer gave Cuomo’s campaign $25,000.

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Andrew Cuomo photo by Diana Robinson.

Co-published by Sludge

Last year, a political firestorm erupted when journalists revealed that Hollywood producer Harvey Weinstein’s lawyer David Boies gave $10,000 to Manhattan District Attorney Cyrus Vance Jr. in the months after Vance declined to prosecute the movie producer on sexual assault charges. Now, less than a year later, New York Gov. Andrew Cuomo has halted an investigation into the handling of the Weinstein case just as Boies’ law firm gave Cuomo’s campaign $25,000, according to state records reviewed by Capital & Main and Sludge.

The controversies spotlight ongoing questions about whether law enforcement actions in New York are being inappropriately influenced by campaign donations.

Amid explosive headlines about Boies’ donations to Vance and the district attorney’s decision not to prosecute Weinstein, Cuomo in March called for the New York Attorney General’s office to investigate the handling of the case, which revolved around accusations that Weinstein groped an Italian model.

While Vance in May opted to reverse course and charge the Hollywood producer, Cuomo declared that an investigation into Vance’s original decision to not prosecute Weinstein was necessary because, the governor said, “it is critical not only that these cases are given the utmost attention but also that there is public confidence in the handling of these cases.”

However, BuzzFeed on Tuesday reported that Cuomo reversed himself in June, sending a letter to New York Attorney General Barbara Underwood asking her to suspend the investigation for six months. The suspension effectively shields Boies from scrutiny of any potential relationship between his 2015 donation to Vance and Vance’s decision not to prosecute Weinstein.

Cuomo’s June order came six days  after Boies, Schiller & Flexner gave $25,000 to Cuomo’s reelection campaign, according to New York campaign finance records. In all, Boies and his law firm have given Cuomo’s gubernatorial campaigns more than $245,000 since 2009.

“Neither Mr. Boies, nor anyone from his firm, ever discussed Harvey Weinstein or Mr. Vance with Mr. Cuomo, or anyone from his office, at any time,” a spokesperson for Boies Schiller & Flexner said in an emailed statement. “Mr. Boies is a longtime supporter of Mr. Cuomo and his contribution in June was consistent with his contributions to Mr. Cuomo over years past.”

Boies has since severed his ties to Weinstein in the wake of a report that he personally hired the private intelligence company Black Cube to collect information on Weinstein’s accusers and the reporters investigating those allegations.

Cuomo’s spokesperson said the investigation was suspended temporarily in order to avoid interfering with Vance’s ongoing prosecution of Weinstein.

“As we said when the Governor directed the Attorney General to investigate the Manhattan DA’s Office, it should not interfere with the DA’s ongoing criminal case,” Cuomo press secretary Dani Lever told Buzzfeed. “Given the recent indictment and prosecution of Harvey Weinstein by the district attorney, the attorney general’s investigation has been postponed for six months.”

However, Buzzfeed’s report pointed out that as criminal proceedings against Weinstein could drag on for years, the attorney general’s investigation may effectively be suspended indefinitely.


Update: After this article was published, a state official responded, saying that suspending the investigation had nothing to do with Boies’ campaign contributions: “The attorney general’s investigation was suspended to avoid situations in which Weinstein’s defense attorneys would be able to constantly petition the attorney general’s office for information about what they uncovered and undermine a criminal prosecution.”

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Top Republican on Tax Subcommittee Received Yacht Loan From Foreign Bank Lobbying on 2017 Tax Bill

Federal records show that one of Rep. Vern Buchanan’s LLCs financed foreign bank loans to purchase a yacht and a private luxury jet.

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Vern Buchanan, center. (Photo by Alex Wong/Getty Images)

Co-published by Maplight and the Florida Center for Investigative Reporting

As Republicans were finalizing tax cut legislation in late 2017, a foreign-owned bank seeking to shape the bill gave a seven-figure yacht loan to a top GOP lawmaker on the committee writing the measure, according to documents reviewed by Capital & Main and MapLight.

Representative Vern Buchanan (R-FL), who sits on the House Ways and Means Committee and leads its tax policy subcommittee, has been under fire in recent weeks for purchasing a yacht on the same day he voted for the GOP tax package. Buchanan registered a 73-foot Ocean Alexander vessel named Entrepreneur with the U.S. Coast Guard a month later, according to federal records.

Although Buchanan is one of the wealthiest members of Congress — worth at least $80 million — federal records show one of his limited liability companies financed the purchase with a BMO Harris Bank loan worth as much as $5 million. Since 2016, Buchanan’s companies have received three loans worth as much as $35 million from BMO Harris, which is the American subsidiary of the Bank of Montreal. In total, since he was appointed to the Ways and Means Committee in 2010, Buchanan and his companies have received between $17 million and $85 million worth of loans from four lenders.

At the time Buchanan’s company received the 2017 yacht loan, BMO Harris was lobbying congressional lawmakers on tax policy overseen by the Ways and Means Committee, according to federal records. Buchanan received a separate BMO Harris loan for a plane in 2016. Records show that loan, worth between $5 million and $25 million, was made around the same time that the bank began lobbying lawmakers on “tax reform proposals.”

In all, BMO spent $760,000 lobbying lawmakers in 2017, and records show the bank paid for tax reform lobbying from Tony Podesta, whose firm is being investigated for potential violations of foreign lobbying laws.

In recent years, lending to lawmakers has been a source of controversy, with some critics alleging that politically connected banks can use favorable loan terms as a stealth conduit of political influence. Buchanan did not list the terms of the BMO Harris loans in his 2017 financial disclosure report, which was filed in May, and his office did not respond to questions about the deal.

“For privacy reasons we do not disclose information about specific loans,” said BMO Harris spokesperson Patrick O’Herlihy. “We do not provide services or products to public officials that are not also available to the general public.”

Craig Holman, an ethics advocate at Public Citizen, said that the bank’s loans to Buchanan’s company pose a “particularly egregious” conflict of interest.

“It isn’t just business for Buchanan,” he said. “The loans grant Buchanan the luxuries of a personal jet and a yacht. It is very reasonable to assume those luxuries could well influence Buchanan’s official actions.”

Both BMO Harris and Buchanan could reap a financial windfall from the tax legislation.

The bank’s first annual report after the passage of the GOP measure said corporate tax cuts in the bill are “expected to increase our annual net income from what it would have otherwise been.” In late May, shortly after its report was published, the company announced record U.S. profits. BMO Harris had publicly celebrated the bill in January and said it would increase its minimum wage to $15 per hour as a result of the tax cut. Both the Trump administration and House Republicans touted BMO Harris as an example of the tax cut’s success.

The bank also announced a plan to repurchase as many as 20 million shares of its own stock — providing ammunition to critics who predicted that companies would use the tax cut windfall to enrich executives and shareholders, rather than to create new jobs.

For his part, Buchanan has promoted the tax cut as a boon to working families.

“The sweeping tax reform bill signed into law last month is already producing results,” he said in a statement posted on his website soon after the tax bill passed. “As the son of a factory worker who grew up in the blue-collar suburbs of Detroit, I know firsthand how important a bonus or pay raise can be for a family struggling to make ends meet.”

The tax bill could also boost Buchanan’s earnings from various corporate entities that he controls, which include real estate holdings and an auto dealership. The legislation slashed rates on “pass-through” income that flows to individuals through businesses that include limited liability corporations, S-corporations and partnerships.

In the case of Buchanan’s new yacht, the Republican’s financial disclosure forms show that the BMO Harris loan for the vessel — as well as the earlier loan for the purchase of an Embraer luxury jet airplane that can seat 10 people — were made to Buchanan’s company, Aircraft Holding and Leasing, LLC.

Buchanan’s financial disclosure forms report that he has collected as much as $5 million in pass-through income from Aircraft Holding and Leasing since being elected to Congress in 2006. Buchanan’s 2017 disclosure forms report that he had between $1.5 million and $3.3 million of assets in a BMO Harris investment account.

The House Ethics Committee says that it is a violation of congressional gift rules if a lawmaker “is given a loan at a below-market interest rate,” though members of Congress aren’t required to publicly disclose the terms of loans they receive.

In 2012, congressional investigators found that mortgage lender Countrywide Financial Corp. had a special unit that made discounted loans and gave preferential treatment to lawmakers, congressional staff and other high-ranking government officials. A 2016 Institute for New Economic Thinking study by researchers at the London Business School found that lawmakers who join financial oversight committees receive larger, more favorable loans than other lawmakers.


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Proposed Los Angeles Law Would Give Tenants Access to Attorneys

The City Council is considering a ‘right to counsel’ program that could help curb evictions and homelessness.

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Photo by B-A Graphix

An estimated 30,000 eviction cases are filed in court each year against Los Angeles city residents. Many more tenants do not show up in court since they know “they have limited legal rights and they have limited access to legal representation,” according to a recent report by Tenants Together, a renter advocacy organization.

Urged on by renter advocates, a Los Angeles City Council housing committee voted August 8 to support the creation of a ‘right to counsel’ law similar to ones that have been adopted by San Francisco and New York.

The committee approved a motion, authored by L.A. City Councilman Paul Koretz, which directs staff to craft a program that would give more tenants facing eviction access to attorneys.

“Basic fairness dictates that if one side of an eviction proceeding has legal representation, the other side should have representation, too, and that equality before the law shouldn’t depend on income level,” said Jerry Jones, director of public policy at the Inner City Law Center. Jones joined about a dozen speakers at the committee meeting.

Compared to the high cost of addressing the homeless crisis, eviction defense is a relatively inexpensive means to prevent people from becoming homeless, according to Jones.

County and city officials are struggling to find temporary and permanent housing for the tens of thousands of residents who become homeless every year. And while there has been a slight decrease in the county’s homeless population since last year, the number of homeless – 53,000 – is still staggering, according to the last count. In addition, more people were homeless for the first time this year than last, suggesting unaffordable rents may be pushing people onto the street.

At the hearing, Janet Gagnon, a representative of the Apartment Association of Greater Los Angeles, complained that a right-to-counsel program would “simply give money to defense attorneys.” She said that public money would be better spent on vouchers “so that the people can avoid the eviction process entirely.”

But a 2017 analysis of pilot programs that offered free legal service to tenants concluded that providing counsel does have benefits. Eviction cases involving represented tenants are more likely to end in settlement, and most of those settlements reduced back-owed rent or helped protect tenants’ credit by keeping eviction notices off the public record.

The study, which was conducted by the Judicial Council of California, also found that 67 percent of cases involving represented tenants settled, as compared to 34 percent of cases in which people represented themselves. While all clients in the study received eviction notices, only 6 percent were ultimately evicted from their homes.

Jim Bickhart, a representative of Councilman Paul Koretz, said that the intent of the proposed measure was to expand the capacity of the current network of legal services, which currently serves “several thousand clients a year.”

“There is no way this proposal could provide free legal service to every tenant faced with eviction, but we should start somewhere,” he added. The motion is scheduled to be voted on by the full City Council on August 17.

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Cuomo’s Cable Company War Could Enrich His Campaign Donors

Last week New York Governor Andrew Cuomo’s Public Service Commission revoked the authorization of the state’s largest cable TV provider to operate. The action could enrich other cable industry giants that, together, rank among Cuomo’s largest campaign donors.

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David Sirota

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Andrew Cuomo photo by Diana Robinson.

When New York Governor Andrew Cuomo’s administration recently moved to shut down New York City’s largest cable television provider, Cuomo cast the maneuver as an initiative to defend consumers from a company he claimed had failed to build out service to rural customers. He did not mention that the action could end up enriching other cable industry giants that are together among Cuomo’s largest campaign donors — and that have delivered large contributions to Cuomo’s campaign in the year leading up to the decision.

Cuomo, a Democrat, is facing a primary battle against progressive actress Cynthia Nixon, who has accused him of shaping policy to benefit his largest campaign contributors.

In the current battle over New York’s telecommunication regulation, Cuomo’s Public Service Commission (PSC) last week revoked Charter Spectrum’s authorization to operate in the state. The commission’s order said the company — which is the largest cable provider in New York — had failed to build out high-speed Internet service to rural areas, as required in its 2016 merger agreement with Time Warner. Cuomo declared that the company “has been executing fraud on the people of this state.”

Cuomo aired his criticism after a reporter from a Charter-owned news outlet had asked him about corruption scandals engulfing his administration. Later, Nixon asserted that the governor was employing a Donald Trump-esque tactic to try to intimidate journalists. Whether that was in fact Cuomo’s motive, there is little doubt that his administration’s move could also open up a rare — and highly lucrative — expansion opportunity for well-positioned telecom industry competitors such as Comcast or Altice, which have delivered big money to Cuomo.

Campaign finance records reviewed by Capital & Main show that Comcast and Cablevision — the latter of which is owned by Altice and operates in New York — have together given Cuomo more than $830,000 during his career as New York attorney general and then governor – a sum that dwarfs the $191,000 that Charter subsidiary Time Warner gave to Cuomo in the same time period. Nearly $200,000 of the cash from Comcast and Cablevision was delivered to Cuomo in the last year – while Time Warner made no contributions to the governor in that period.

Meanwhile, a Cuomo aide was recently hired by a lobbying firm that represents Altice, and Cuomo’s PSC in 2015 approved the company’s merger with Cablevision over the objections of the Communications Workers of America, which argued to the Federal Communications Commission that the deal would “starve Cablevision of resources needed for service, network investment and jobs.”

Altice and Comcast did not comment in response to questions from Capital & Main. A statement from Richard Azzopardi, a spokesman for Governor Cuomo, read in part:

“If your theory were correct and anyone was influenced by contributions, Charter would not have been granted the franchise in the first place‎. Rather than serve the people of New York, for the past two years Charter has sought to advance its own interests at their expense. In addition to its failure to expand broadband service to rural, poor, and underserved communities that is at the heart of the PSC’s action, Charter misled New Yorkers through advertisements on its stations that they took down only yesterday.  At every turn they have put their own interest first, rather than keep the promises to New Yorkers they made in exchange for their exclusivity and the PSC rightly exercised its authority as a regulator.”

Potential Charter replacements like Altice “would arguably be very happy to expand their footprint in New York,” said Harold Feld, vice president of the consumer group Public Knowledge.

Altice reportedly has about three million customers in New York — and has in recent years been aiming to expand its Internet service in New York City. Comcast does not operate in New York, but does operate in neighboring New Jersey and Pennsylvania.

“For them, this would be an opportunity that is adjacent to their existing operations,” Feld told Capital & Main. “There are just so few opportunities to add a significant expansion of cable systems, and this one in particular includes New York City, which is a very significant and profitable market.”

The PSC’s order revolves around conditions Charter agreed to as part of its merger with Time-Warner. According to PSC documents, that deal required Charter to expand broadband service to “an additional 145,000 homes and businesses in less densely populated areas across the state” — an obligation that Cuomo administration officials say the company did not follow through on.

For its part, Charter denies the allegations.

“We believe we’re in compliance with the plain reading and the buildout requirements that the state imposed on us in merger conditions, and we have a very strong legal case and ability to defend ourselves,” Charter CEO Thomas Rutledge said this week during an earnings call. “And it could play out over a lengthy period of time if required.”


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