Jeb Hensarling, Chair of the House Financial Services Committee
Jeb Hensarling is the Republican Chair of the Financial Services Committee in the U.S. House of Representatives. Despite the seriousness of that job, Hensarling displays amazing ignorance of the inner workings of Wall Street at the hearings over which he presides. Unlike Senator Bernie Sanders who stumped around the country for more than a year during his primary campaign, reinforcing to Americans what they already suspected, that “the business model of Wall Street is fraud,” Hensarling wants to kill the few restraints on this criminal cartel that currently exist. He has been well financed by Wall Street to get the job done.
Among Hensarling’s largest donors for his 2016 re-election campaign were every major Wall Street bank, including two admitted criminal felons (JPMorgan Chase and Citigroup’s Citicorp) as well as those charged with market rigging and serial frauds against the investing public. Wall Street mega banks giving $10,000 or more to Hensarling’s campaign included: Bank of America, $15,000; JPMorgan Chase $14,700; Goldman Sachs $12,700; UBS $10,500; Citigroup $10,000; Credit Suisse $10,000; Morgan Stanley $10,000; Wells Fargo $10,000; and Wall Street’s trade association, the Securities Industry and Financial Markets Association (SIFMA), which gave Hensarling $10,000. (Our source is the Center for Responsive Politics which notes that “The organizations themselves did not donate, rather the money came from the organizations’ PACs, their individual members or employees or owners, and those individuals’ immediate families.” Corporations are not legally allowed to donate directly to campaigns.)
Over the past week, Hensarling has been on a public relations mission to portray the Wall Street-hated Consumer Financial Protection Bureau (CFPB) as a “rogue” federal agency and smear Senator Elizabeth Warren as its mastermind. Last night, this headline appeared over an opinion piece by Hensarling in the Wall Street Journal: “How We’ll Stop a Rogue Federal Agency: Congress can defund Elizabeth Warren’s unaccountable and unconstitutional CFPB.”
Millions of Americans understand that this is simply more of the new Trump-era Orwellian Reverse Speak. The danger is that big media is carrying Hensarling’s false propaganda to millions of uninformed Americans who are too busy struggling to feed their families to follow the Machiavellian plunderings by Wall Street. Hensarling has also been making the rounds of cable news shows repeating his attacks on the CFPB and calling for its courageous Director, Richard Cordray, to be fired by President Donald Trump.
In reality, the CFPB is the most consumer-friendly of the Wall Street watchdogs. It allows those who have been victimized by financial firms, even where small amounts of money are involved, to file a complaint and receive a response. Wall Street hates the fact that these complaints go into a permanent database, which can be mined by class-action attorneys and prosecutors looking for patterns of fraud and by media outlets like Wall Street On Parade to keep the public informed. (See our related articles below.)
Hensarling was a long time aide to the master of fronting for Wall Street deregulation – Senator Phil Gramm. Gramm served as Chair of the Senate Banking Committee from 1995 to 2000, which included the fateful year that the Gramm-Leach-Bliley Act was passed in 1999. That legislation repealed the Glass-Steagall Act which had protected the nation by separating banks holding insured deposits from the speculating investment banks of Wall Street. Just nine years after it was repealed, Wall Street crashed in epic fashion, taking the U.S. economy with it. Gramm’s blind march to the drumbeat of special interests was blamed by Time Magazine as a key contributor to the financial collapse in 2008. Time wrote:
“…Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.”
According to the database at the Center for Responsive Politics, Gramm’s largest campaign donors included the very same serially charged Wall Street banks that are now financing Hensarling. (See here.)
Gramm’s deregulation push was a family affair. His wife, Wendy Gramm, was the Chair of the Commodity Futures Trading Commission (CFTC) from 1988 to January 1993. Public Citizen reported on her tenure as follows:
“In 1992, as the first step in its business plan to profit on the speculation of energy, Enron petitioned the CFTC to make regulatory changes that would limit the scope of the commission’s authority over certain kinds of futures contracts. Immediately before leaving the CFTC, Gramm muscled through approval of an unusual draft regulation that would do just that – it narrowed the definition of futures contracts and excluded Enron’s energy future contracts and swaps from regulatory oversight. Although her actions were criticized by government officials who feared the change would have severe negative consequences (as, in fact, it did), Gramm was rewarded five weeks after she left the CFTC with a lucrative appointment to Enron’s Board of Directors. Between 1993 and 2001, when the company declared bankruptcy, Enron paid Gramm between $915,000 and $1.85 million in salary, attendance fees, stock option sales, and dividends.”
Phil Gramm also became a very wealthy man while the U.S. suffered the worst financial collapse since the Great Depression, in no small part because of his handiwork. In the same year that he left Congress, 2002, Gramm joined the large Wall Street bank, UBS – one of his largest campaign donors – as Vice Chairman. He remained in that post for a decade. According to the Wall Street Journal, in 2012 Gramm stepped down as Vice Chairman of UBS but remained on as a “consultant.”
The price of gold (see above chart) has been rising and its volume spiking since President Donald Trump signed his infamous Executive Order on immigration on January 27. That action ushered in a new U.S. era of uncertainty in which thousands of agreements, such as Lawful Permanent Resident status known as a green card, can be casually broken by one man in the Oval Office signing an Executive Order and setting off pandemonium in lives and airports around the globe. It raises the fear of what other established laws or rights the President might attempt to sign away.
Gold typically rises when there is fear in stock markets. But the stock market has not been following its typical relationship to gold by selling off. Since Trump’s presidential win in early November, the Standard and Poor’s 500 has been on a steady uptrend. We’ll analyze that further in a moment, but first some necessary background.
At the top of the list of what the stock market hates is uncertainty. Thus, one would have suspected that when the United States elected a President who had never before served in public office with a penchant for hurling insults at the country’s largest trading partners, and who promised radical changes in the oversight of Wall Street, there would have been a major selloff in stocks.
That didn’t happen because Trump quickly sent hand signals to the biggest traders on Wall Street: the big Wall Street banks (yes, despite the Volker Rule they’re still major traders) and the hedge funds. Trump quickly placed Goldman Sachs progeny in key spots in his administration. To make sure the SEC didn’t crack down on high frequency trading or Wall Street’s Dark Pools – the magical wings beneath the market’s buoyancy – someone whispered in Trump’s ear that Jay Clayton, an outside lawyer to Goldman Sachs at the powerful law firm, Sullivan & Cromwell, should become the nominee to Chair the Securities and Exchange Commission.
Having Clayton sitting atop the SEC will work especially well for Goldman as Clayton’s wife works for Goldman as one of its many Vice Presidents. Under Federal rules, the conflicts of the spouse become the conflicts of the government employee, meaning that Clayton will conveniently have to recuse himself from any decisions directly impacting Goldman. If Clayton proves to be as efficient as his predecessor, Mary Jo White, he’ll bring his enforcement chief along from his same law firm – so they are both on the same page when it comes to handing out minor fines and settling without an admission of guilt for Wall Street’s serial larcenies. And, of course, they’re both highly likely to return to Sullivan & Cromwell and get a nice pay bump when their government service has run its course. If they’re as lucky as Eric Holder, the former U.S. Attorney General who failed to prosecute even one top executive of a major Wall Street bank after the greatest financial frauds in U.S. history, their law firm might even have a corner office waiting for them. Holder also brought along Lanny Breuer from his law firm, Covington & Burling, and made him the head of the Justice Department’s Criminal Division. According to the PBS program Frontline, Breuer made sure there were “no subpoenas, no document reviews, no wiretaps” against the largest Wall Street banks. In other words, the typical criminal investigation techniques went missing at the Holder/Breuer Justice Department when it came to Wall Street.
Someone also whispered in Trump’s ear that any Wall Street uncertainty would be assuaged further by spreading the law partners of a big corporate law firm throughout his administration. On the very day of Trump’s inauguration, January 20, the Jones Day law firm announced that a cool dozen of its law partners were moving into the Trump administration. That roster included: Donald F. McGahn II, who had worked for Trump’s campaign, as Trump’s new White House Counsel; Noel Francisco, who was named Principal Deputy Solicitor General; and Chad Readler, named Principal Deputy Assistant Attorney General of the Civil Division of the U.S. Justice Department. We mention those three in particular since one would have expected the White House Counsel to have vetted a sweeping Executive Order like the one Trump signed on immigration on January 27. One would have further expected Francisco and Readler to be fully prepared to argue against any challenges in the courts.
But what happened instead was this: a young woman named Michelle Bennett from the Justice Department made the oral arguments on behalf of the government before the District Court on February 3. Francisco and Readler’s names did appear in first and second place on the government’s notice of appeal to the Ninth Circuit Court, but making the actual oral arguments yesterday was a career lawyer from the Justice Department, August E. Flentje, not Francisco or Readler.
Suggesting further uncertainty and disarray in the Trump administration, Francisco and Readler had to recuse themselves from representing the government because Jones Day, the law firm they had left just weeks before, was arguing in the same case for the opposition. Jones Day lawyers Meir Feder and Nicole Henning represented constitutional scholars in an Amicus brief opposing Trump’s Executive Order. The brief warned the court that there was “extensive evidence” that the “seven countries were selected because of the religion of their citizens” and that this raised “a host of constitutional questions as to the rationality of the Executive Order and as to its discriminatory impact. Further, the Executive Order has caused great disorder through its abrupt and dramatic disruption of the specific federal statutory scheme in place…The assertion of unfettered Executive authority, resting in part on congressional legislation from a 1952 statute, is breathtaking in its disruption of the procedures in place, and would authorize even what in the domestic context would be recognized as the most clearly unlawful invidious discrimination.”
Not to put too fine a point on it, but that comes from the law firm from which Trump has just hired 12 law partners and put them in key posts in his administration.
Wall Street’s favorite index for measuring fear in the market is known as the VIX, short for the Chicago Board of Options Exchange Volatility Index. The VIX measures the suggested volatility in the S&P 500 index options over a 30-day, forward-looking period. It has been as calm as a canoe trip on a ripple free lake.
Because mega Wall Street banks and hedge funds actively trade the VIX, our advice would be to keep an eye on the gold market to measure just how much fear and uncertainty there is in global markets about our new President.
While President Donald Trump is proving himself to be a divider not a uniter, the Attorneys General of Washington State and Minnesota are getting the unity job done. Their case against the President’s ban on immigrants entering the U.S. from seven majority Muslim nations – even those holding valid visas and, sporadically, legal permanent residents with valid green cards – has been a clarion call to fellow citizens to stop Trump now before his Executive Orders come for their own rights.
On Friday, Judge James Robart blocked Trump’s order nationwide. The case is now under appeal at the Ninth Circuit Court and the docket already has 92 entries. Constitutional scholars, law professors, more than a dozen nonprofits, almost 100 tech companies, and 16 Attorneys General from other states are asking the court to keep Judge Robart’s order in place. The public interest is so great that the court is making a live audio feed available to the public for the hearing that will take place today. (Go to bottom of court page under “Live Streaming Oral Arguments,” Washington v Trump. The hearing begins at 3 p.m. PST and 6 p.m. EST.)
Among those who have thus far filed Amicus (Friend of the Court) briefs is the Anti-Defamation League (ADL) which tells the court it is “a civil rights and human relations organization that seeks to stop the defamation of the Jewish people.” ADL has already expressed its nervousness about Stephen Bannon, Trump’s Chief White House Strategist and former head of Breitbart News. ADL writes on its web site that “Bannon essentially has established himself as the chief curator for the alt right. Under his stewardship, Breitbart has emerged as the leading source for the extreme views of a vocal minority who peddle bigotry and promote hate.”
ADL has written one of the more poignant Amici, telling the court the following:
“The promise of America has been manifest since before the American Revolution. John Winthrop, while still on his transatlantic voyage to the New World, admonished the future colonists of Massachusetts to always remember that their new community would be ‘as a city upon a hill,’ with the entire world watching. In fulfilling this vision, the country welcomed in its early years those disfavored and persecuted in their homelands based on their religious beliefs, including the Pilgrims, the Puritans and the Huguenots. Since then, our nation’s wisest leaders have been guided by Winthrop’s inspiring vision and have strived toward a more inclusive democracy.”
ADL’s writes further on how the First Amendment to the U.S. Constitution came about, noting:
“After the United States won its independence, it faced the challenge of designing laws that embodied the enlightened vision of the new nation. In 1785, James Madison published ‘Memorial and Remonstrance Against Religious Assessments’ in opposition to a bill proposed to Virginia’s General Assembly that would have levied a modest tax to support Christian education. Madison warned that any measure, no matter how slight, that gave a preference to one religion over another would constitute ‘a dangerous abuse of power’ and would betray the vision of ‘a city upon a hill…’
“Virginia recognized Madison’s wisdom. It rejected the establishment bill and instead adopted Thomas Jefferson’s ‘Statute for Religious Freedom,’ which firmly separated church from state and enshrined the principles of religious liberty for all. When Madison went to the Constitutional Convention in 1787, he fought for Jefferson’s view to become the law of the land, and it became a bedrock of the rights confirmed by the First Amendment.”
Joining in the passionate debate about what America has stood for since its founding, the following nonprofits jointly filed their own history lesson with the court: the American Immigration Council, National Immigration Project of the National Lawyers Guild, Northwest Immigrant Rights Project, Human Rights First, KIND (Kids in Need of Defense) and Tahirih Justice Center. The groups told the court:
“As President George Washington wrote to a religious minority community containing many immigrants in 1790, ‘the government of the United States . . . gives to bigotry no sanction, to persecution no assistance.’ From as early as the arrival of the Pilgrims, this land has been a haven for immigrants, regardless of their faith and country of birth. Freedom of religion and from the establishment of religion are, of course, enshrined in our First Amendment.
“The Executive Order hews away at these foundations of our nation. If this Court reverses the TRO [Temporary Restraining Order], scores of refugees, students, professors, skilled workers, and many others who already have been approved to enter, or re-enter, the United States will be blocked from doing so solely based on their religion or national origin. For U.S. citizens and legal permanent residents (‘LPR’) who petitioned for immigrant visas for their family members and for the family members themselves, reversal of the TRO would cause them to lose their fundamental, constitutional right to live together as a family.”
The six nonprofits, represented by attorney Harrison Frahn of Simpson Thacher & Bartlett, also made this bold statement to the court, seriously undercutting Trump’s apocalyptic Tweets on what might happen if the court doesn’t reinstate his order: “Appellants have failed to demonstrate any harm by allowing those affected to enter the country. In the last 30 years, no individual from the seven affected countries has killed an American in a terrorist attack in the United States.”
Almost 100 tech companies, including monster global brands like Google, Microsoft, Facebook, and Intel filed an Amicus filled with eye-opening statistics – like these:
“The tremendous impact of immigrants on America — and on American business — is not happenstance. People who choose to leave everything that is familiar and journey to an unknown land to make a new life necessarily are endowed with drive, creativity, determination—and just plain guts. The energy they bring to America is a key reason why the American economy has been the greatest engine of prosperity and innovation in history.
“Immigrants are leading entrepreneurs. ‘The American economy stands apart because, more than any other place on earth, talented people from around the globe want to come here to start their businesses.” Partnership for a New American Economy, The ‘New American’ Fortune 500, (2011). Some of these businesses are large. Immigrants or their children founded more than 200 of the companies on the Fortune 500 list, including Apple, Kraft, Ford, General Electric, AT&T, Google, McDonald’s, Boeing, and Disney. Collectively, these companies generate annual revenue of $4.2 trillion, and employ millions of Americans.
“Many of these businesses are small. ‘While accounting for 16 percent of the labor force nationally and 18 percent of business owners, immigrants make up 28 percent of Main Street business owners.’ Americas Soc’y & Council of The Americas, Bringing Vitality To Main Street(2015).”
The tech companies also told the court that the order is already having a negative impact on their employees and their business, writing:
“The Order has had immediate, adverse effects on the employees of American businesses. Several major companies reported substantial disruptions from the Order, because their employees were ensnared in the Order’s travel restrictions.
“This instability and uncertainty will make it far more difficult and expensive for U.S. companies to hire some of the world’s best talent—and impede them from competing in the global marketplace. Businesses and employees have little incentive to go through the laborious process of sponsoring or obtaining a visa, and relocating to the United States, if an employee may be unexpectedly halted at the border. Skilled individuals will not wish to immigrate to the country if they may be cut off without warning from their spouses, grandparents, relatives, and friends — they will not pull up roots, incur significant economic risk, and subject their family to considerable uncertainty to immigrate to the United States in the face of this instability.”
At this point, you are no doubt wondering who vetted Trump’s Executive Order. It clearly wasn’t run by the largest and most profitable technology companies in the U.S. In a January 30 article at Mother Jones, Josh Harkinson provides the background of two of the men that have been widely credited with the crafting of the Executive Order: Stephen Bannon and Stephen Miller. Bannon is characterized as follows:
“For nearly a year before stepping down as the CEO of Breitbart News to lead the Trump campaign, Bannon hosted a SiriusXM radio show, Breitbart News Daily, where he conducted dozens of interviews with leading anti-Muslim extremists. Steeped in unfounded claims and conspiracy theories, the interviews paint a dark and paranoid picture of America’s 3.3 million Muslims and the world’s second-largest faith. Bannon often bookended the exchanges with full-throated praise for his guests, describing them as ‘top experts’ and urging his listeners to click on their websites and support them.”
But prior to joining Breitbart News, as Wall Street On Parade reported in November, Bannon was a right-wing propaganda filmmaker for a nonprofit called Citizens United. If that name rings a bell, it’s because that nonprofit was behind another famous Supreme Court case – the one that opened the spigots to unlimited corporate funding of political campaigns. In addition to Bannon, Citizens United sent two other top strategists to run the Trump campaign in its floundering days of 2016. One of those was its own President, David Bossie, who was named Trump’s Deputy Campaign Manager.
One of the propaganda films produced by Bannon for Citizens United was “Occupy Unmasked,” a documentary that names Bossie and David Horowitz in the credits. David Horowitz played a major role in promoting a propaganda film released in 2008, “Obsession: Radical Islam’s War Against the West,” an effort at fanning the flames of Islamophobia in the U.S. as 100 newspapers and magazines were paid to distribute millions of free DVDs of the film. Including a separate direct mail campaign, 28 million copies of the DVD flooded swing voter states in the waning weeks of the 2008 presidential election. In 2010, we traced the $17.7 million that went into the film to an organization affiliated with Charles Koch.
In other words, keeping fear of terrorists alive, Islamophobia alive, and Americans focused on their personal safety instead of billionaires buying off their democracy, has been a gambit in the shadows since at least 2008.
Now, on cue, Citizens United, together with other right-wing groups, has filed an Amicus with the Ninth Circuit arguing in favor of Trump’s Executive Order. Having succeeded in corrupting Washington with its Citizens United v FEC decision, it is now asking the court to give unprecedented power to a man distrusted by more than half of Americans. It tells the Ninth Circuit: “this is not a judicial question that is properly presented to a federal judge to resolve. That is why the Congress has given virtually plenary authority over immigration and the refugee program to the President of the United States.”
Ninth Circuit oral arguments are scheduled to be heard by Judges William C. Canby, Richard R. Clifton and Michelle T. Friedland.
Judge James Robart Hears Oral Arguments on Trump’s Executive Order to Ban Immigrants from Entry Into the U.S., February 3, 2017
In 2008, when corrupt and insolvent financial firms on Wall Street were being bailed out by the U.S. taxpayer after a vote by Congress, the firms were simultaneously funneling millions of those bailout dollars as bonuses to the very executives who had played a role in the firm’s demise. The American people were told by our government that the bonuses had to be paid because they were part of a legally binding contract between the company and the employee and contract law is sacrosanct in the U.S.
Now flash forward to President Donald Trump’s Executive Order of January 27, 2017. The President issued a wide-ranging travel ban that set off chaos at the nation’s airports; disrupted thousands of lives; and prevented lawful residents of the United States from returning to their families and homes after travel abroad. The President directed a 90-day suspension on entry to the U.S. by individuals from Iran, Iraq, Syria, Somalia, Sudan, Libya, and Yemen; a 120-day suspension on refugees from any country; and a permanent suspension of entry of Syrian nationals.
Like the bonus participants on Wall Street, tens of thousands of the affected individuals held legally binding contracts with our government – either green cards giving them permanent legal residence in the United States or legal visas. But the immigrants’ contractual agreements with the U.S. were trampled and ignored.
For those travelling outside the U.S. when the surprise order came, they were barred from re-entry, detained at airports or sent back to a foreign country. For those inside the United States from the seven countries when the order hit – even those with properly obtained visas and green cards – they now had been stripped of their ability to travel, to see family abroad, attend a funeral of a loved one abroad, take part in university research or lectures abroad.
According to the lawsuit filed against Trump’s actions by the Attorneys General of the States of Washington and Minnesota, this is what our government did to legal permanent residents of the United States:
“On January 28, 2017, a spokeswoman for DHS [Department of Homeland Security] stated that lawful permanent residents, or green card holders, would be barred from entry pursuant to the Executive Order…
“On January 29, 2017, DHS reversed its decision through a statement by Secretary Kelly that purported to exempt lawful permanent residents from the Executive Order…Two days later, however, on January 31, 2017, the U.S. Customs and Border Protection, a DHS sub-agency, issued a statement entitled ‘Protecting the Nation from Foreign Terrorist Entry into the United States.’ Although it repeated Secretary Kelly’s earlier statement, it also confirmed in its ‘Questions and Answers’ section that the Executive Order applies to lawful permanent residents and that their entry would depend on receipt of a ‘national interest waiver consistent with the provisions of the Executive Order.’ ”
Last Friday, Judge James L. Robart of the U.S. District Court for the Western District of Washington State held oral arguments on the case and issued a Temporary Restraining Order (TRO) which effectively blocked the President’s Executive Order. (See video of the oral arguments below.)
Representing the State of Washington at the oral arguments was the State’s Solicitor General, Noah Purcell. A key part of Judge Robart’s questions to Purcell pertained to a state having standing to bring a lawsuit against the U.S. government. Purcell argued these points brilliantly at both oral arguments and in the Amended Complaint filed with the Court. His points were also buttressed by an Amicus Brief filed by ten law professors from around the country, including Amy J. Wildermuth, Professor of Law at the University of Utah, who was counsel of record for multiple states who had previously filed an Amicus in the seminal case on state standing, Massachusetts v. EPA.
During the Oral Arguments, Judge Robart noted that there had been no fatal terrorist attacks within the United States that were carried out by immigrants from the seven countries singled out by Trump’s Executive Order.
If this case makes it to the U.S. Supreme Court, it has the potential to dramatically broaden or narrow, depending on the outcome, the ability of a State Attorney General to sue the Federal government for harming the citizens or residents of the State, its government institutions like state-run universities and colleges, or even the corporate employers within the state who add to overall financial well being of residents by paying taxes and providing jobs.
Washington State offered the following evidence of how it is being harmed in its Amended Complaint:
“According to the most current American Community Survey data from the U.S. Census Bureau, as of 2015, approximately 7,280 non-citizen immigrants from Iran, Iraq, Syria, Somalia, Sudan, Libya, and Yemen reside in Washington—1,409 Iranian immigrants, 2,275 Iraqi immigrants, 360 Libyan immigrants, 2,883 Somalian immigrants, 165 Sudanese immigrants, and 187 Syrian immigrants.
“Immigration is an important economic driver in Washington. Many workers in Washington’s technology industry are immigrants, and many of those immigrant workers are from Muslim-majority countries. Immigrant and refugee-owned businesses employ 140,000 people in Washington. Many companies in Washington are dependent on foreign workers to operate and grow their businesses. The technology industry relies heavily on the H-1B visa program, through which highly skilled workers like software engineers are permitted to work in the United States. Washington ranks ninth in the U.S. by number of applications for high-tech visas. Microsoft, a corporation headquartered in Redmond, Washington, is the State’s top employer of H-1B visa holders and employs nearly 5,000 people through the program. Other Washington-based companies, including Amazon, Expedia, and Starbucks, employ thousands of H-1B visa holders.
“Microsoft’s U.S. workforce is heavily dependent on immigrants and guest workers. At least 76 employees at Microsoft are citizens of Iran, Iraq, Syria, Somalia, Sudan, Libya, or Yemen and hold U.S. temporary work visas. There may be other employees with permanent-resident status or green cards. These employees may be banned from re-entering the U.S. if they travel overseas or to the company’s offices in Vancouver, British Columbia.
“Seattle-based company Amazon also employs workers from every corner of the world. Amazon’s employees, dependents of employees, and candidates for employment with Amazon have been impacted by the Executive Order that is the subject of this First Amended Complaint. Amazon has advised such employees currently in the United States to refrain from travel outside the United States.
“Bellevue-based company Expedia operates a domestic and foreign travel business. At the time of the filing of the Complaint, Expedia had approximately 1,000 customers with existing flight reservations in or out of the United States who hold passports from Iran, Iraq, Syria, Somalia, Sudan, Libya, or Yemen. The Executive Order will restrict business, increase business costs, and impact current employees and customers.
“As a result of the Executive Order, Washington residents have been separated from their families. One Somali refugee, who has lived in Seattle for 12 years, went to Sea-Tac Airport to pick up her husband who was flying from Somalia through Vienna, but never saw him before he was sent back on a flight to Vienna. Another individual who was detained is related to a Sea-Tac Airport worker. A third detainee, the sister of a blind Iraqi man who lives in Seattle, was prevented from seeing him after 15 years apart. Other Washington residents will be unable to travel to Canada to visit family. An Iraqi-born software engineer, who works in Facebook’s Seattle office and was in Canada watching his little brother perform in a high school play, received a phone call from his immigration attorney shortly before the Executive Order took effect, advising him to rush back across the border.
“Still other Washington residents will be prevented from being reunited with family members. One Syrian family who recently resettled in Seattle is waiting for an older child still in a refugee camp who was set to arrive next week, but for the Executive Order.
“In addition to affecting Washington residents, families, and businesses, the Executive Order harms Washington’s proprietary interests. In 2015, travelers from the Middle East spent approximately $96 million in Washington. This spending generated more than $6 million in State tax revenue and more than $2 million in local tax revenue. Washington also has a proprietary interest in securing the best possible employees…
“The University of Washington and Washington State University are the two largest public universities in the State. More than 95 students from Iran, Iraq, Syria, Somalia, Sudan, Libya, and Yemen attend the University of Washington, based in Seattle. More than 135 students from those countries attend Washington State University, based in Pullman. Affected students also attend Washington colleges, community colleges, and technical colleges. The Executive Order prohibits these students from traveling abroad for research or scholarship, and may cause some to leave the universities. Future students from these countries may be prevented from enrolling. These harms damage the educational mission of Washington’s institutions of higher education.”
The State of Minnesota told the Court in the amended complaint that 30,000 of its residents came from six of the impacted countries: Somalia, Sudan, Iran, Iraq, Syria, and Yemen. The State cited the horrific example of a 4-year old Somali girl “who was separated from her mother and two sisters shortly after being born in a refugee camp in Uganda, was scheduled to arrive on January 30, 2017. Her mother had received visas for herself and her other two daughters, but she was pregnant when they were approved, so her newborn was not covered. She was told that her whole family would have to start the visa process over if she tried to get one for her youngest daughter or she could move to the United States and apply for reunification which would take less than one year. Four years later, the youngest daughter finally received a visa to come to the United States. The young girl was at the airport in Uganda on January 30, 2017, ready to board the plane, but she was not allowed due to the Executive Order.” (After intervention by members of Congress, the child has been reunited with her mother and sisters in the U.S.)
The State Attorneys General are also making the case that this is a thinly veiled effort to ban Muslims and thus also violates the First Amendment’s guarantee of religious freedom. (The seven targeted countries are majority Muslim nations.) The Attorneys General offer the following chronology of events in their amended complaint:
“Prior to his election, Donald Trump campaigned on the promise that he would ban Muslims from entering the United States. On December 7, 2015, candidate Trump issued a press release calling for ‘a total and complete shutdown of Muslims entering the United States…’
“On June 14, 2016, candidate Trump reiterated his promise to ban all Muslims entering this country until ‘we as a nation are in a position to properly and perfectly screen those people coming into our country…’
“In a January 27, 2017, interview with the Christian Broadcasting Network, President Trump confirmed his intent to prioritize Christians in the Middle East for admission as refugees…”
The U.S. government quickly appealed Judge Robart’s ruling to the Ninth Circuit Appellate Court over the weekend, arguing that “The injunction immediately harms the public by thwarting enforcement of an Executive Order issued by the President, based on his national security judgment.”
In fact, the President had been in office just seven days when he signed the Executive Order; had no previous service in any government post; had no prior experience in national security matters. According to numerous media reports, he constructed the Executive Order in a vacuum without consulting with the Federal agencies with expertise in this area, thus creating bedlam at the nation’s airports and disrupting lives around the globe.
The Ninth Circuit left the Temporary Restraining Order in place while setting up a briefing schedule for the two sides that ends today.
As protests against Trump’s authoritarian practices created renewed protests in the U.S. over the weekend, the President was featured on the front covers of respected magazines as a frightening rogue. The cover of the most popular magazine in Germany, Der Spiegel, depicted Trump lopping off the head of the Statue of Liberty while holding a bloody knife in his hand. The Economist, based in the U.K., showed Trump throwing a Molotov cocktail and opining that “Promises that sounded like hyperbole in the campaign now amount to a deadly serious revolt aimed at shaking up Washington and the world.”
Also over the weekend, Gallup reported that only 42 percent of Americans approve of the job Trump is doing – representing a new low for any president at this time in his tenure.
With Congressional Republicans showing little backbone in reining in their rogue President, Americans now look to the Courts. A disappointment there could be fatal to the future of the United States.
On the campaign stump in Charlotte, North Carolina last October 26, Donald Trump promised to bring back a 21st Century version of the Glass-Steagall Act as a means of reforming Wall Street’s casino culture. At around noon today, Trump will continue the Orwellian reverse-speak of his campaign promises and do the opposite of what he promised. According to leaks to the financial media, Trump will today sign executive actions ordering swift reviews aimed at rolling back the feeble safeguards on Wall Street that currently exist while replacing them with — nothing. There has been no further word from Trump on bringing back the core principles of Glass-Steagall which would force the formal separation of banks holding taxpayer-backstopped insured deposits from the high-risk, derivatives-peddling, hedge-fund-financing investment banks.
Trump is expected to sign one executive action today ordering financial regulators to review rolling back parts of the Dodd-Frank financial reform legislation that was passed by Congress in 2010. Another executive memorandum is expected to order the Labor Department not to implement the Fiduciary Rule that was set to take effect in April. The Fiduciary Rule, hated by Wall Street and its lobbyists, would force Wall Street firms to put the interests of clients owning retirement accounts above the interests of the firm. For example, it would mean that Wall Street would have to offer the client the best mutual fund at the lowest fee rather than one of its own in-house concoctions laden with far more onerous, self-serving fees and investments. Wall Street has had the gall to say the Fiduciary Rule is bad because it would limit opportunities for investors. Apparently, Wall Street means it would limit the opportunity for investors to be fleeced, thus limiting profits on Wall Street.
As every other President has found in the past two decades, pleasing Wall Street and its billionaires is what it takes to get reelected. Trump is apparently already focused on marketing and building his brand from White House Inc. for a full eight years. According to filings made at the Federal Election Commission, the Donald J. Trump for President committee raised $9.6 million from November 29, 2016 through December 31, 2016 toward Trump’s next run.
One Wall Street firm that will be essential to Trump’s tenure in the Oval Office is his largest contributor to date. According to the Center for Responsive Politics, Renaissance Technologies – a hedge fund investigated by the U.S. Senate Permanent Subcommittee on Investigations for playing fast and loose with tax law and securities law – gave $15.5 million to Trump’s first run. (The Center for Responsive Politics notes that the political contributions came from the firm’s PACs; their individual members, employees or owners; and those individuals’ immediate families.)
In 2014, the Senate’s Permanent Subcommittee on Investigations determined that Renaissance Technologies had avoided $6.8 billion in taxes through a scheme with Wall Street banks. The gambit worked like this: the hedge fund would make a deposit of cash into an account at the bank which had been established to facilitate the hedge fund engaging in the high frequency trading of stocks. The account was not registered in the hedge fund’s name (the beneficial owner as required by law) but in the bank’s name. The bank would then deposit $9 for every one dollar the hedge fund deposited into the same account. At times, the leverage could reach the astronomical level of 20 to 1.
The hedge fund would then generate tens of thousands of trades a day using their own high frequency trading program and algorithms. Many of the trades lasted no more than minutes. The bank charged the hedge fund fees for the trade executions and interest on the money loaned.
The trading was based on a written side agreement referred to as a “basket option.” Under the agreement, the hedge fund would collect all the profits made in the account in the bank’s name after a year or longer and then characterize millions of trades which were held for less than a year, many for just minutes, as long-term capital gains (which by law require a holding period of a year or longer). Long term capital gains are taxed at approximately half the tax rate of the top rate on short term gains.
The 2014 Senate Subcommittee hearing heard testimony from Steven M. Rosenthal, a Senior Fellow at the Urban-Brookings Tax Policy Center in Washington, D.C. Rosenthal explained what Renaissance had done as follows:
“I have been asked to evaluate the character of the gains of the Renaissance hedge funds based on my review of materials provided by the Subcommittee staff. The Renaissance hedge funds traded often, more than 100,000 trades a day, more than 30 million trades a year, and they traded quickly, turning over their portfolio almost completely every 3 months. Because the hedge funds adopted a short-term trading strategy, we would expect their gains to be short term. But the hedge funds, with the help of Barclays and Deutsche Bank, wrapped derivatives around their trading strategy in order to transform their short- term trading profits into long-term capital gains. This tax alchemy purported to reduce the tax rate on the gains from 35 percent to 15 percent and reduced taxes paid to the Treasury by approximately $6.8 billion. I believe the hedge funds stretched the derivatives beyond recognition for tax purposes and mischaracterized their profits as long-term gains.”
The owners of Renaissance Technologies got obscenely rich through practices like these and are now throwing that money around the world of Washington.
In January and March of 2016, the founder of Renaissance Technologies, James Simons, took out his checkbook and wrote two separate checks to Hillary Clinton’s SuperPac, Priorities USA, for $3.5 million each for a cool $7 million in a three-month span.
But curiously (or not) the Co-CEO of Renaissance Technologies, Robert Mercer, his wife, Diana, and his daughter, Rebekah, have given millions to Trump and Republican coffers.
Whether Hillary won or Trump won, Renaissance Technologies was guaranteed to have backed a winner seated in the Oval Office signing Executive Orders.
Mercer money touches far more than just Trump’s political campaign committees. Ken Vogel of Politico reported last year that the Mercer family has invested $5 million or more in Cambridge Analytica, a digital data mining firm that was a major adviser to the Trump campaign, “as well as a reported $10 million investment in the pro-Trump website Breitbart News,” reports Vogel. Trump’s Chief White House Strategist, Stephen Bannon, came from Breitbart News.
On her August 25, 2016 show, Rachel Maddow reported yet another Trump connection to Mercer. Kellyanne Conway ran the Keep the Promise 1 Super Pac which was initially supporting Ted Cruz and running millions of dollars in anti-Trump campaign ads. Almost all of that money, according to Maddow, came from Robert Mercer. But once Cruz dropped out of the race, they changed the name of the Pac and started running anti-Clinton ads to help Trump.
Maddow also reported that when the Trump campaign decided to fire Paul Manafort, they put two Mercer-related people in charge: Kellyanne Conway as Campaign Manager and Stephen Bannon as Campaign CEO.