Federal Government Weekly Update: The Elevator Speech Overview

To simplify a complicated story, a former very senior MI-6 agent named Christopher Steele was hired by a group of former journalists, including Glenn Simpson of the Wall Street Journal, to monitor and investigate Russian involvement in the U.S. elections and connections to Donald Trump.  The result was a rolling compilation of detailed and salacious reports regarding the President-elect and his dealings with Russia. Most explosively, these reports included the details that the Russian government has what they call “kompromat” or compromising information, on Trump in the form of recordings (audio and visual) of Trump enjoying some… irregular entertainments at the Ritz-Carlton during a 2013 trip to Moscow. Compiling this sort of compromising or embarrassing material is, according to intelligence experts, a common tactic of the Russian government, especially under the leadership of Vladimir Putin. This report has been one of the worst kept secrets in Washington since it was made about a week before the election, but this week it was finally published in full by Buzzfeed News. While Buzzfeed is quick to point out that these reports were unverified, the intelligence community – including the unanimous heads of the CIA, NSA, CIA, and FBI — conducted their own review and determined they were credible enough to brief President Obama (POTUS), President-elect Trump (PE-OTUS) and certain members of Congress on the content.  The most senior briefings received the full treatment and the report drafted by Steele was attached to the full briefs for review.  Beyond the compromising materials, the report also alleges that representatives of the Trump campaign met with Russian operatives to discuss the Russians’ hacking and leaking of emails and documents from the Democratic National Committee and from Mrs. Clinton’s campaign chairman, John D. Podesta. While Trump was briefed by top intelligence officials on the existence of these reports, he has both denied their authenticity and, strangely, that he was ever informed of their existence.  It probably goes without saying that if even a small portion of these reports become verified, it would be an unprecedented scandal and likely a constitutional crisis that a winning Presidential campaign conspired with a foreign government to change the outcome of the election, possibly under the duress of blackmail. While the details have caused snickers in the cloakroom, the ramifications are causing sleepless nights for some on both sides of the aisle. 

On Wednesday, Donald Trump gave his first press conference since being elected president. In standard fashion, the President-Elect spent seemingly as much time attacking press outlets as he did answering questions about the policies his administration will pursue once sworn in. Much of that anger was directed toward Buzzfeed for publishing the already-mentioned memos on their website. Aside from calling the news site a “failing pile of garbage,” and shouting down a CNN reporter by calling the respected cable news broadcaster “fake news”, Trump defended himself from the claims in the memos by saying that he is a “germaphobe,” presumably meaning that he would not have participated in the activities described in the report. Aside from this lurid detail, Trump also outlined his plan for avoiding conflicts of interest and possible violations of Article 1, Section 6, Clause 2 of the Constitution (Ineligibility or “Emoluments” Clause) stemming from ownership of his company while he serves as President. The plan, however, does not include divesting from his business interests, only handing over management to his adult sons and a Trump corporation paid “ethics adviser.” This remedy to the massive conflicts he will face once inaugurated, including what the preponderance of experts consider to be a violation on the Emoluments Clause on day one, was immediately panned by every ethics expert available for comment, including the sitting, non-partisan director of the US Office of Government Ethics and the former chief White House ethics lawyer for President George W. Bush. Trump seems unconcerned with this obvious trouble spot, however, and even used the fact that he was offered (but turned down) a $2 billion deal in Dubai just last week as evidence of his moral rectitude. “I turned it down,” Trump said. “I didn’t have to turn it down.”   Which it should be pointed out is exactly the point of the Emoluments Clause – that a foreign government should not be able to offer private benefit to the President of the United States that could compromise duties in office or gain favor.  But, hey, what a win-win for Dubai, right?  They now clearly have Trump’s favor, and even got to keep their $2BB.  Huge.

Meanwhile, on the Hill, hearings for a number of Trump’s cabinet picks got underway this week. During his hearings for Attorney General, Senator Jeff Sessions of Alabama appeared to acquit himself well in front of a panel of his pears. Sessions went into these hearings knowing that Democratic members would be looking very closely at his record on civil rights, the issue that lead to his not being confirmed as a federal judge by the same body back in 1986. Sessions said he did not support the bans on Muslims that Trump has floated and said he would resign “before ultimately agreeing to execute a policy the attorney general believes to be unlawful and unconstitutional.” He also acknowledged the mounting and seemingly indisputable evidence that Russia was behind the hacks on the DNC and they did so to help Trump’s candidacy. Despite breaking with Trump a number of times during his testimony (something that was a bit of a motif during hearings this week), Sessions was clearly prepared for the event and, even if he had not been, Senatorial courtesy likely means that he would have sailed through any confirmation vote regardless. One matter of note on Senatorial courtesy however, was that sitting U.S. Senator Corey Booker (D-NJ) broke from tradition, along with sitting Congressman and civil rights icon Rep. John Lewis (D-GA), by giving testimony against Sessions.  Booker and Lewis, both made their decision to provide testimony on their deep fear of an erosion of hard fought civil rights for individuals who are not Caucasian, male, or of Christian faith.

Former Exxon CEO Rex Tillerson, on the other hand, does not enjoy the same leg up and did not do himself many favors during his hearing. To many, he seemed ill-prepared for the questions from many Senators, but none more so than Florida Republican Marco Rubio. Tillerson hedged on Rubio’s question on whether Russia was behind the hacks, declined to characterize Putin a war criminal, and did not commit to supporting sanctions on Russia. Tillerson also denied having lobbied against the sanctions on Russia during his time running Exxon, despite the clear evidence that he had. He even went a step further, saying “to my knowledge, Exxon never directly lobbied against sanctions.” This lead to a strange exchange as Senator Bob Corker from Tennessee, chairman of the committee, commented that “I think you called me at the time [Russia sanctions were being debated].” Publicly available lobbying disclosure reports from Exxon clearly show that they did lobby congress on the sanctions, so I am not sure what Tillerson was trying to do at this point. Under Tillerson, Exxon had struck about 10 deals with Putin’s government to explore Russian oil, valued at hundreds of millions of dollars. With Rubio clearly skeptical about Tillerson, his nomination is clearly in jeopardy. Senators John McCain and Lindsay Graham have already expressed their reservations on the pick, and just those three will be enough to sink him if they chose to do so. 

Legislatively, the House and Senate began their process to repeal the Affordable Care Act (Obamacare) by using the budget process known as reconciliation.  The first step was to actually pass a 2017 budget with instructions to authorizing committees to report legislation that would repeal their respective portions of the ACA.  Consider this Act I, Scene II of a very long play about to unfold.  There continues to be growing turmoil among rank and file GOP Members about the timing and content of the “Repeal and Replace” strategy, especially on the details of what the “Replace” part might look like.  It appears those pages of the GOP plan continue to be relatively blank and, as noted last week, impacts close to one-third of the entire U.S. economy.