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RSN: Mort Rosenblum | Trump Plunder by a Thousand Cuts

 



 

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28 January 21


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RSN: Mort Rosenblum | Trump Plunder by a Thousand Cuts
Former San Carlos Apache Tribe chairman Wendsler Noise Sr. speaks at the Save Oak Flat Rally at the US Capitol on March 11, 2020. (photo: Matthew Sobocinski/USA Today)
Mort Rosenblum, Reader Supported News
Rosenblum writes: "This will be short; we've all wasted enough words on Donald Trump. But as he sulks in defeat and disgrace, awaiting a second trial for treachery far more heinous than the last, we had best take stock of an America he so badly crippled."

The pandemic will eventually subside. Shocked by a bald coup attempt that might have crowned Trump king, voters may finally unite to rid Congress and statehouses of self-serving snakes. In time, the outside world may again believe in American values.

But headlong plunder of natural resources, Native American cultures and wild splendor – heritage that belongs to future generations – has caused irreparable devastation from Florida wetlands to the northern reaches of Alaska.

The big picture is achingly clear: the plague Trump let run wild has already killed more Americans than Hitler and Hirohito did in World War II. His inaction on testing, masks and vaccinations now causes 1,000 more deaths each day than terrorists did on 9/11.

A Harvard team calculated in October that Covid-19 had stolen 2.5 million years of Americans’ lives. That has since doubled. A lucky few pile up huge profits while the rest suffer. Jeff Bezos earned an extra $68 billion; perhaps 50 million others go hungry.

Damage from the Trump virus is incalculably pervasive. Beyond the fatalities after he ordered a lynch mob to the U.S. Capitol, at least 38 police officers overrun by unmasked insurrectionists have tested positive for Covid-19.

Yet a thumping majority of Republicans, ignorant of facts, or simply ignorant, still rally behind him. He likely won’t run in 2024, but someone else will, on a similar oligarchic, authoritarian platform based on lies and distortions.

Congress is now shot full of faithless partisans fixated on their ambitions. A smattering of conspiracy-theorist newcomers with their own twisted realities stretch the limits of abnormal psychology.

The roots of this American Nightmare run deep. Ronald Reagan set in motion income inequality that is now a yawning abyss between rich and desperate. He dumbed down schools, quashed labor unions, cut taxes at the top and gave big business free rein.

Barack Obama restored prosperity after George W. Bush’s $6 trillion wars in Iraq and Afghanistan. But factions hardened in Congress and statehouses. Mitch McConnell’s intransigence eroded a historic tradition of compromise.

And then Trump, the bad shepherd, flocked America, fleecing his sheep-like followers to within an inch of their lives. He used his one great talent – slinging bullshit – to create a base of zealots who politicians and tycoons exploited to their own advantage.

With repeated big lies, a mob-style crook with serial bankruptcies and dubious foreign loans claimed credit for his predecessors’ triumphs. His touted economic miracle doubled unemployment and left behind financial crises that recall the Great Depression.

Last year’s three-month growth spike was no more than clawing out of a hole he dug himself by ignoring the pandemic that, beyond the death toll, added losses and costs high in the trillions to the national economy.

Meantime, former lobbyists and industry insiders in the cabinet allowed big business to loot America for immediate profit as if there were no tomorrow.

Lasting damage is starkly evident in Arizona, from Sonoita, a crossroads near the now-fortified Mexican border, to sacred Indian sites and tourist meccas in copper country to the dwindling Colorado River through the Grand Canyon up north.

For much of a century, federal agencies have fought to protect waterways, forests and wilderness from big mining and petroleum companies while protecting tribal territory and national monuments. Rapacious “deregulation” reversed much of that.

Joe Biden’s executive orders seek to roll back environmental threats across America. But what is dead or dying, bulldozed or blasted, is gone forever. New last-minute permits will be hard to stop.

Arizona legislators and complacent governors have mostly sided with hard-rock miners since before 1912 statehood. They explore on public land, pay only token taxes, and an old federal law meant to develop the West exempts them from extraction royalties.

As a result, companies destroy priceless mountain majesty that returns substantial earnings from recreational use. And executives are generous with contributions to politicians who keep pesky conservationists and other opponents off their backs.

Resolution Copper and Rosemont Mine, projected multibillion-dollar foreign-owned copper mines, are now making the front pages when it may be too late. I profiled both in Harper’s two years ago.

The piece opened with an aerial view of the old Silver Bell Mine, just northwest of Tucson, shielded behind rocky hills and barbed wire from suburban homes nearby. Now, owned by a Mexican billionaire notorious for polluting and union busting, it is no longer pickaxes and burros:

Seen from above, it is an upside-down Machu Picchu: vast open pits terraced deep into the earth, some with bright turquoise toxic pools at the bottom. House-sized trucks haul copper ore under a ghostly dust haze to tin-sided structures for crushing. Waste rock piles high along the perimeter at a rate of 1.8 million tons a month. At 19,000 acres, the mine site is a third larger than Manhattan.

The magazine used coated paper for Samuel James’s stunning photos: panoramas of the Morenci Mine, an eight-mile gash along the Coronado Scenic Highway, and others across the state. Sam focused mainly on San Carlos Apaches at war with Resolution Copper. But the Harper’s display caused little stir over a sideshow in Trump’s circus.

Oak Flat, as holy to San Carlos Apaches as Mount Sinai is to Christians, may be weeks away from being the private property of Rio Tinto and BHP Billiton, an Anglo-Australian tandem. Trump approved the title transfer in January and shortened a final review period to 60 days.

The mine would drill down from Apache Leap, possibly collapsing its dramatic cliff face, and flooding Oak Flat, where Native Americans have settled for millennia. Huge waste heaps would mar spectacular land for miles around.

Hudbay Minerals of Canada is battling tribes and environmentalists in court to exploit Rosemont Mine in the Santa Ritas near here, a mile-wide open pit, with a looming crushed-rock mountain. It would devastate rare wetlands and an aquifer that feeds Tucson’s water supply.

Both mines would ship ore concentrate to Asia for smelting, with profits going to Australia, Britain and Canada. Executives and top managers would cycle in from abroad, with a limited local labor force to operate gigantic shovels and ore haulers.

The biggest player is Freeport-McMoRan, based in Phoenix, which owns five Arizona copper mines, including Morenci. Its stock price rose last year from $4.82 to $32.49.

State governments can oppose U.S. Forest Service and Army Corps of Engineers decisions if they threaten to pollute air, rivers or groundwater. But although Arizona voted for Biden and a second blue senator, its deeply red legislature is hostile to green.

Disputes work their way through the courts, which until Trump’s massive packing mostly kept destruction at bay. Now, despite years of testimony and damning reports by the Environmental Protection Agency, new judges take a different view.

Two Republican senators, John McCain and Jeff Flake, first cleared the way for Resolution Copper in a last-minute rider in an omnibus bill that Obama was forced to sign. Oak Flat had been protected since the Eisenhower administration. Ironically, Arizona Republicans are now hellbent on censuring McCain’s widow and drumming Flake out of the party as too liberal for their pro-plunder policies.

In Sonoita, green Border Guard trucks fill a vast parking yard, a base for the fortified barrier Trump erected at breakneck speed while the nation was focused on the pandemic. Wall construction tore up Indian burial sites and blocked wildlife migration.

To the east, developers plan a huge community that would deplete groundwater, likely drying up the San Pedro River, which attracts more than 400 of the 900 bird species in North America. Each year, they find less water in the internationally treasured wetlands habitat.

The outlook is bleak. McConnell, now minority leader, lost a fight to paralyze the Senate and retain his control. But he is still there. With so many urgent priorities, the environment and land use risk slipping behind on the Democrats’ crowded agenda.

This is a sampling; the list is long. If a president who spent his time watching TV, tweeting twaddle, golfing and nursing an insatiable ego can devastate so much of America in four years, just imagine what a competent despot could do in the White House after 2024.



Mort Rosenblum has reported from seven continents as Associated Press special correspondent, edited the International Herald Tribune in Paris, and written 14 books on subjects ranging from global geopolitics to chocolate. He now runs MortReport.org.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.



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Voters cast their ballots in Cleveland on 3 November, 2020. (photo: David Maxwell/EPA)
Voters cast their ballots in Cleveland on 3 November, 2020. (photo: David Maxwell/EPA)


Ohio Nearly Purged 10,000 Voters Who Ended Up Casting 2020 Ballots
Sam Levine, Guardian UK
Levine writes: "More than 10,000 people who Ohio believed had 'abandoned' their voter registration cast ballots in the 2020 election, raising more concern that officials are using an unreliable and inaccurate method to identify ineligible voters on the state's rolls."

List of 116,000 people set to be removed from rolls after election included thousands of eligible voters


In August, Ohio’s Republican secretary of state, Frank LaRose, released a list of 115,816 people who were set to be purged after the November election because the election officials in each of Ohio’s 88 counties flagged them as inactive. Voters could remove their name from the list by taking a number of election-related actions, including voting, requesting an absentee ballot, or simply confirming their voter registration information.

Last week, LaRose’s office announced that nearly 18,000 people on the initial list did not have their voter registration canceled, including 10,000 people who voted in the November election. About 98,000 registrations were ultimately removed from the state’s rolls, LaRose’s office announced last month. There are more than 8 million registered voters in the state.

In a statement, LaRose said the fact that so many people prevented their voter registrations from being canceled is a success of the state’s unprecedented efforts to notify voters at risk of being purged. But voting rights groups say the fact that Ohio nearly purged thousands of eligible voters is deeply alarming and underscores the inaccurate and haphazard way the state goes about maintaining its voter rolls.

“If we have 10,000 people who on their own volition are voting, we know that there’s probably many more who are still living, breathing, eligible Ohioans, who also have not moved, who also have been removed from the rolls,” said Jen Miller, the executive director of the Ohio chapter of the League of Women Voters.

Federal law requires states to regularly review their voter lists for ineligible voters, but Ohio has one of the most aggressive processes for cancelling registrations in the United States. A voter can be removed from the rolls if they don’t vote or undertake any political activity for six consecutive years and fail to respond to a mailer asking to confirm their address after the first two.

Voting advocates argue Ohio’s process essentially removes people from the rolls because they don’t vote, which is prohibited under federal law, and is more likely to target minorities and the poor. The US supreme court upheld the Ohio process in a 5-4 decision in 2018.

Naila Awan, a lawyer at Demos, a civil rights thinktank that helped challenge the Ohio process at the US supreme court, said she wasn’t surprised that eligible voters were flagged on the August list of people at risk of being purged.

“Voting inactivity is a really poor proxy for identifying individuals who may have become ineligible by reason of having moved. The data across the board shows that this is fundamentally a flawed process and there has to be something better to use,” she said.

The recent purge marks the second time in recent memory that Ohio has nearly purged scores of eligible voters from its rolls. Months ahead of a scheduled purge in 2019, the state released a list of 235,000 people who were set to be removed from the rolls. Voting rights groups found more than 40,000 eligible voters included on it and were able to prevent them from being removed.

Democratic and Republican officials alike have overseen purging for years in Ohio, but a 2016 Reuters analysis illustrated the way the practice can disproportionally hurt Democrats. In the state’s three largest counties, voters in Democratic-leaning neighborhoods were struck from the rolls at twice the rate of those in GOP areas, the analysis found. In heavily Black areas of Cincinnati, more than 10% of voters were removed from the rolls between 2012 and 2016 because of inactivity, compared with just 4% in one of the city’s suburbs.

In the months before the 2020 election, Keizayla Fambro, an organizer with the Ohio Organizing Collaborative, a grassroots group that focuses on empowering people of color in the state, was focused on voter registration in counties that are home to some of Ohio’s biggest cities. She estimated her group encountered one to two people a week who were on the purge list and whom they urged to update their voter registration.

“We would check them on a name and we would be like, ‘Oh my God, your voter registration needs to be updated, you could have been purged,’” she said. “Honestly, it was coincidence.”

For those who move a lot, updating a voter registration was often the last thing they were thinking about, Fambro said. “You’re thinking about, ‘Oh, I have to get my kid in this school. I have to make sure we have somewhere to sleep,’” she said.

People of color, the poor, non-English speakers and minorities also tend to experience more severe barriers in getting to the polls, making them more likely to be flagged for purging under a system that relies on inactivity, Awan said.

“When you’re using something like the number of elections a person has missed, you’re going to, by necessity almost, be disproportionately targeting people who experience more barriers getting to the polling locations to begin with,” she said.

Miller and other voting advocates have praised LaRose for taking the unprecedented step of making the purge list public months ahead of the removals to give voters adequate time to check their voter registration. But simply making the list public isn’t adequate, they say, especially because the increased transparency has underscored the way Ohio’s process can flag eligible voters for potential cancellation.

“Before LaRose, we didn’t have any transparency, so we appreciate that. But what the transparency is doing is actually confirming that there are a lot of living, breathing Ohioans who are getting wrapped up in this process who shouldn’t be,” Miller said.

“It’s been frustrating because to me he’s gotten this false praise of, ‘Oh, he opened up the list for the first time,’ which is all fine and dandy. To me, opening up, being transparent, doesn’t mean anything if you don’t have accountability,” said Bride Rose Sweeney, a Democrat in the Ohio state house of representatives.

LaRose has called for more reform, focusing on centralizing and updating Ohio’s voter registration system. He has backed adopting automatic voter registration, which would help prevent wrongful purging by requiring state agencies to automatically update voter registration when they interact with eligible voters. Currently, counties are responsible for maintaining their voter rolls and compiling lists of people eligible to be purged, a system LaRose told USA Today last year was “prone to error” and “unacceptably messy”.

“The secretary believes there are improvements to be made to the process. I certainly hope you include them in your story,” Maggie Sheehan, a LaRose spokeswoman, told the Guardian.

Some changes are already in place. While the state used to only send voters one notice asking them to confirm their voter registration records, it recently started sending a second, final confirmation notice 30-45 days before the purge takes place. The state also announced in 2018 that voters at risk of being purged could confirm their addresses when they updated their driver’s licenses.

But the fact that Ohio flagged so many eligible voters for removal despite those reforms is still alarming, said Stuart Naifeh, another Demos lawyer involved in the 2018 supreme court case.

LaRose has insisted the purge process is outlined in state law, limiting any changes he can make. But advocates dispute that characterization, noting that LaRose has the authority to improve the process. State law does require officials to remove anyone who receives a confirmation mailer and doesn’t vote for four consecutive years from the rolls, but it doesn’t specify what triggers the confirmation notice. By relying on more reliable evidence that someone has moved, instead of two years of voting inactivity, LaRose could significantly improve the accuracy of the purge process, critics say.

“He is not required by law to do this ... State law allows it, it’s not barred,” said Sweeney, the Ohio state representative. “He is choosing to make this a more expansive process.”


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Proud Boy leader Enrique Tarrio was reportedly an FBI informant. (photo: Getty)
Proud Boy leader Enrique Tarrio was reportedly an FBI informant. (photo: Getty)


Report: Proud Boys Leader Was a 'Prolific' FBI Informant
Robert Hart, Forbes
Hart writes: "Enrique Tarrio, the leader of the far-right Proud Boys group, previously worked as an informer for local and federal law enforcement, according to court records obtained by Reuters that indicate he helped authorities prosecute 13 individuals on federal charges."

Key Facts

Tarrio repeatedly worked undercover with the Federal Bureau of Investigation on cases involving drugs, human smuggling and gambling, his own lawyer, a federal prosecutor and an FBI agent all said during a 2014 court hearing, Reuters report.

The right-wing leader allegedly turned informant after he was arrested in 2012 for fraud.

Tarrio’s sentence — he pled guilty — was reduced from 30 months to 16, something he attributed to helping investigators resolve his own case, not others.

In an interview with Reuters, Tarrio denied helping authorities investigate anyone and said he did not recall the contents of the court transcript.

“I don’t recall any of this,” he said, flatly contradicting a statement from former federal prosecutor Vanessa Singh Johannes, who worked on Tarrio’s case, who confirmed Tarrio’s cooperation to Reuters.

“He cooperated with local and federal law enforcement, to aid in the prosecution of those running other, separate criminal enterprises, ranging from running marijuana grow houses in Miami to operating pharmaceutical fraud schemes,” Johannes said.

Forbes could not reach Tarrio for comment.

Crucial Quote

Tarrio’s then lawyer Jeffrey Feiler told the 2014 court that his client was a “prolific” cooperator who helped in numerous investigations. At the same hearing, an FBI agent said Tarrio was a “key component” in local police investigations.

Key Background

The right-wing Proud Boys, which were recently designated a “terrorist entity” in Canada, have clashed with racial justice protesters, and attended demonstrations seeking to overturn the election. In a presidential debate, then President Trump famously refused to condemn white supremacists and instead told the Proud Boys to “stand back and stand by.” Officials are investigating the role groups like the Proud Boys played in the Capitol riot and at least six members have been charged in connection with it. Tarrio was not present for the Capitol riot as he had been arrested in D.C. two days before and subsequently banned from attending protests in the area.

What To Watch For

With the group under investigation over allegations it orchestrated violence at the Capitol riot, Tarrio’s previous involvement with police will likely come under scrutiny. Reuters reports that in multiple interviews, Tarrio said that he would let police know of the Proud Boys’ plans before rallying in a number of different cities. This stopped in December when the police cracked down on the group and there is no evidence of Tarrio having collaborated with authorities since the 2014 case mentioned in court records.


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COVID-19 relief may cause problems for small, rural hospitals that struggled to stay open before 2020. (photo: Daniel Acker/Getty)
COVID-19 relief may cause problems for small, rural hospitals that struggled to stay open before 2020. (photo: Daniel Acker/Getty)



How the CARES Act Forgot America's Most Vulnerable Hospitals
Brianna Bailey, The Frontier
Bailey writes: "Over the past 10 months, the distribution of more than $100 billion in CARES Act funding for health care providers has been plagued by a dizzying rollout and, at times, contradictory guidelines for how to use the funding."


COVID-19 relief was meant to give a lifeline to hospitals, especially the small, rural facilities that struggled to stay open before 2020. But in states like Oklahoma, problems created by confusing guidelines could cause harm long after the pandemic.

 federal economic relief package passed by Congress in March promised to provide a lifeline for hospitals, particularly those in rural communities where many facilities struggled to survive even before the coronavirus pandemic.

But over the past 10 months, the distribution of more than $100 billion in CARES Act funding for health care providers has been plagued by a dizzying rollout and, at times, contradictory guidelines for how to use the funding.The result has been a patchwork of problems for rural hospitals, which were already at far greater risk of closure than other health care facilities and in dire need of help, The Frontier and ProPublica found. The scope of those problems is clearly visible in Oklahoma, which tied for the third-highest number of hospital closures in the country in the nine years before the pandemic.

One hospital used more than $1 million in federal aid to pay off its years-old debt to a management company that left before Oklahoma’s first coronavirus case was diagnosed, a potential violation of federal guidelines that could require the hospital to return the money, according to experts.

Three Oklahoma hospitals that were purchased last year after filing for bankruptcy were unable to access more than $6 million in funds deposited by the Department of Health and Human Services, the agency in charge of the rollout for health care providers. The money was instead deposited into accounts tied to the previous owners, leaving the new owners with few options as they tried to keep the facilities from becoming insolvent.

And administrators at yet other hospitals have left millions in relief aid untouched, spiraling deeper into debt for fear that the wrong decision could force them to return money.

“Every day we have new rules, new guidelines, and it’s a struggle,” said Shelly Dunham, CEO of Okeene Municipal Hospital in western Oklahoma. Dunham said she used only $50,000 of the $3 million the hospital received in April and May because of concerns that the facility would have to return the money. “I can't say we need more money right now. We just need to be able to keep what they've given us.”

Under the CARES Act, funding can be used to prevent, prepare for and respond to the coronavirus or to help with expenses or losses caused by COVID-19. The problem is in the details, which Congress left to HHS.

HHS has primarily managed concerns by publicly releasing responses to more than 100 frequently asked questions. Those responses have sometimes contradicted previous guidance from the agency, leaving health care providers confused about how money can be used and what the agency would seek to claw back. The whipsawing guidance has covered a range of topics, including how health care providers could calculate losses from the pandemic and whether they could use the money to pay for long-term capital improvement projects such as new heating, ventilating and air conditioning systems.

“Hospitals’ challenge right now is keeping their doors open and paying their debts,” said Carrie Cochran-McClain, vice president of government affairs and policy for the National Rural Health Association. “There is not enough flexibility to help providers really use the funds as Congress intended for the kinds of things that they need to address for COVID.”

Rural hospitals across Oklahoma and the country are disappearing at an alarming pace that could hasten without help from the federal government, Cochran-McClain said. In 2019, the year before the coronavirus pandemic, rural hospital closures reached a record high, with 18 nationwide. Texas led the country with three closures. Tennessee, Kansas and Oklahoma followed with two each.

Last year, despite the infusion of federal funding, another 17 rural hospitals shuttered, bringing the total number of closures since 2005 to 176.

Unlike larger, wealthier facilities, rural hospitals often have only a few weeks’ worth of cash on hand to operate with. Experts have warned that even with the federal relief aid, many hospitals would struggle. But without it, they would surely fail.

“There was a tussle between the desire early on to get funds out quickly into the hands of people and providers who need it first, and also a compelling need to have oversight of where the money is going,” said James Cosgrove, health care director for the Government Accountability Office. After the first distribution of $50 billion in April, the GAO found that the federal government had sent $558,000 to four closed hospitals that either declined or returned the money.

The Frontier and ProPublica found six other hospitals that closed in 2019 but received more than $3.2 million combined in federal relief payments. More than half of the money went to a hospital in Ellwood City, Pennsylvania, that closed in December 2019 after state inspectors found unsafe conditions for patients.

The relief money was being used for security and to respond to medical records requests until Ellwood City Medical Center could be sold, a bankruptcy trustee said in a December 2020 court filing. The trustee did not respond to requests for comment.

An HHS official said the agency is “in the process of recovering payments'' from hospitals that permanently closed before Jan. 31, 2020, but would not say how much it was pursuing or identify any closed facilities that had received aid. Officials said they could not comment specifically on the six hospitals identified by The Frontier and ProPublica because the agency does not release information on individual facilities.

The distribution of funding for health care providers is just one example of complications with the sweeping $2 trillion CARES Act. More than $174 billion in temporary tax breaks benefited mostly wealthy people and large companies. The Paycheck Protection Program, another effort aimed at helping small businesses stay afloat, drew widespread criticism after large companies, including the restaurant chains Ruth’s Chris and Shake Shack, qualified for loans, while smaller struggling businesses were shut out. Ruth’s Chris and Shake Shack later agreed to return the money.

The hospital rescue program similarly helped wealthier facilities pad their bottom lines, while poorer hospitals struggled. In the first round of funding, wealthier hospitals received a larger share of the $50 billion than poor and rural hospitals, according to a report from the Kaiser Family Foundation, a health policy research organization. The report found that those hospitals with a larger share of revenue coming from private insurers received about $44,000 per bed, while poor, rural hospitals got about half that amount.

Subsequently, HHS set aside billions more for rural health care providers and for hospitals with a higher percentage of COVID-19 patients. But that wasn’t enough to make up for the inequities, said Karyn Schwartz, a senior fellow for Kaiser.

“I think they (HHS) were under a lot of pressure to do it quickly, and so they prioritized a quick and simple formula over really targeting the money towards the providers who might be most vulnerable,” Schwartz said.

HHS officials said they have repeatedly made improvements to the system in response to feedback from Congress and health care providers. The agency has changed the way it distributes money, seeking a formal application instead of releasing funding to all hospitals. A new $900 billion pandemic relief package passed in December also gave hospitals more flexibility in calculating revenue losses from the pandemic.

“HHS has balanced the need for flexibility in use of funds to stabilize the health care system with program integrity requirements and the responsible use of taxpayer dollars,” the agency said in a statement released before President Joe Biden took office.

“We’re Doomed”

As rural communities across Oklahoma began experiencing an uptick in COVID-19 cases, the new owner of the only hospital in the small Oklahoma town of Prague fought for access to part of $3.2 million in federal relief aid.

The Prague Community Hospital was one of three that in June asked U.S. Bankruptcy Court Judge Joseph Callaway to help them solve what appeared to be an intractable problem.

The facilities, which included the Fairfax Community Hospital and the Haskell County Community Hospital, were among 11 that entered bankruptcy in 2019 amid accusations that the company that owned them, EmpowerHMS, had engaged in fraud. In a federal indictment unsealed in June, prosecutors accused the company’s owner, Jorge Perez, and nine others of a scheme that allowed rural hospitals to bill at higher rates for blood and urine tests performed elsewhere. The case is set to go to trial in September 2021. Perez and eight other defendants have pleaded not guilty. A tenth defendant has not yet appeared in court.

Each Oklahoma hospital owned by the company was auctioned off by a bankruptcy trustee in charge of settling financial debts incurred under EmpowerHMS.

After unexpected revenue losses from the pandemic, the new owners banked on federal funding from the hospital relief package. But when the money was dispersed, they got nothing.

HHS had instead deposited a total of $6.4 million into accounts connected to the hospitals’ previous owners and managed by bankruptcy trustee Thomas Waldrep.

Since federal rules prevented the money from being transferred, it had to be returned to HHS, Department of Justice attorney Michael Quinn said during a June bankruptcy court hearing.

The new owners would have to wait for another round of relief, Quinn said. Even then, they may not qualify because the money was distributed using the hospitals’ 2019 tax identification numbers and none of the current owners controlled the facilities at the time.

“This is not specific to this case, this is a response to an enormous program of unprecedented size that rolled out billions of dollars on an emergency basis to provide relief and used estimated data to get the money out the door as fast as possible,” Quinn said during the court hearing. “As soon as that happens though, that creates an expectation that, in some cases, the money will not go and land in the correct place. And here, it happened to land in the middle of a corporate sale of an asset.”

Waldrep, the bankruptcy trustee, later said in an interview that he believed the new owners should get a portion of the relief aid but he was hamstrung by the federal rules. The trustee also wanted to use a portion of the money to pay some of the hospitals’ debts from before the sale, including his fee and charges from the management company that operated the facilities during the transition.

“This puts our clients in a very bad position in terms of the continued delivery of care in these very critical needed areas,” Hugh Robert, an attorney for Transcendental Union with Love and Spiritual Advancement, said during the hearing. The Tulsa-based nonprofit that purchased the Prague Community Hospital in May.

Attorneys for the new owners of the three hospitals and for Waldrep asked the judge to allow them to use the money despite objections from the federal government. During the hearing, Callaway grew increasingly irritated at what he viewed as the federal government’s failure to help the clearly struggling hospitals.

The lack of guidance and flexibility from the federal government endangered hospitals instead of helping communities keep them open, Callaway said.

“We don’t do things like this around here,” he said. “All I hear are reasons from the government of why it can't be done, instead of reasons why it can be done.”

The judge eventually allowed Waldrep to reach agreements with the hospitals. As part of the final plan, Waldrep could use about $750,000 to pay his fees and expenses for overseeing the bankruptcy cases. He would use another $1.4 million to pay Cohesive Healthcare Management and Consulting, which operated the hospitals in bankruptcy.

Some of the money would also go to expenses that were incurred before the sale but were directly related to COVID-19.

The Fairfax and Prague hospitals would each then receive a portion of the remaining $4 million. But because the federal government threatened to later take back money it determined was misused, the hospitals would have to obtain a line of credit that would protect the previous owner from any collection attempts.

Dr. Vishal Aggarwal, who founded the nonprofit that purchased the Prague hospital, said he was never able to secure the financing that would serve as collateral because of the facility’s poor financial state.

“If a second wave hits us, we are doomed,” Aggarwal said in an interview.

Coming to Collect

During the pandemic, hospitals were forced to forgo elective surgeries and other nonessential services that help drive the minimal revenue that rural facilities bring in annually. The losses, coupled with the added costs of preparing hospitals for the pandemic, heightened the urgency of obtaining federal relief.

Some Oklahoma rural hospitals received federal relief aid before the coronavirus pandemic spread to their small towns and immediately began using the money without considering how expenses could later be justified.

In May, Cimarron Memorial Hospital, in the Oklahoma Panhandle, was two weeks away from closing. It had fallen behind on state taxes and was working to settle a lawsuit filed months earlier by the electric company after the hospital failed to pay its several bills. It also owed $1.2 million in past-due fees to NewLight Healthcare, a management company that ran the hospital for nearly a decade before abruptly departing in January 2020.

The hospital received $3.5 million in federal relief payments and loans.

Tim Beard, Cimarron’s chief executive officer, used nearly a third of the relief aid to pay off NewLight Healthcare, a decision that experts say could force the hospital to repay the federal government. HHS has called it “highly unusual” that the relief aid could be used for expenses incurred before Jan. 1, 2020.

For nearly a decade, NewLight provided loans to the Cimarron hospital and deferred management fees, under a contract that allowed it to charge interest on the past-due amounts. The company then placed a lien on the hospital’s incoming payments. If NewLight chose to enforce the lien, as it had already done in another Oklahoma town, the hospital would be required to pay the company before it paid employees or covered bills for medical supplies.

Lee Hughes, an executive vice president for NewLight, declined an interview and did not respond to detailed written questions. In a statement, Hughes said that the company acted in good faith by settling for less than what it was owed.

“NewLight did this both to resolve all past indebtedness owed by the hospital, but also as a gesture of good will,” Hughes said.

The hospital had run out of options to settle its debts, said Beard, adding that he believed there were no restrictions on the coronavirus relief money.

“If I didn’t do things as I should have then we will pay the price for that but we got the community taken care of for eight months longer than we were looking at,” Beard said in an email.

Hospitals will be required to start reporting how they spent the federal relief aid, but HHS officials said no deadline has been set. Those that received at least $750,000 must undergo audits that HHS will use to determine whether money must be returned.

“I think there's probably many in the industry optimistic that the government doesn't want to recoup this money, and they're going to come up with a way to allow the hospitals to keep it,” said Eric Shell, a rural hospital finance expert with the health care consulting firm Stroudwater Associates.

By the time COVID-19 arrived in Cimarron County, the hospital had already used $2 million in federal funds. Aside from the payment to NewLight, Beard said he used $250,000 to replace the hospital’s broken CT scanner, $81,000 to settle its debt to the electric company and another $750,000 to cover payroll and other bills.

The hospital still has $1 million in provider relief funds, according to Beard, who did not provide detailed financial records requested by The Frontier and ProPublica. Beard said he hadn’t compiled the information because it doesn’t have to be reported to the federal government until this year.

“If they take back the money or what we have in savings, we won’t survive,” Beard said in an email to The Frontier and ProPublica.

Another Shot at Relief Funding

Despite vastly different problems with the rollout of the federal program, hospital administrators share a fear that money they thought would save them could now accelerate their closure.

This month, Dunham started using more of the $3 million she had been holding on to. The hospital, she said, needs the money. But Dunham said she hasn’t stopped worrying about the crushing financial situation the hospital will face if the federal government disagrees with how the money is spent and asks for it to be returned.

The Prague hospital has now changed hands. City officials who purchased the hospital this month for $1.3 million say they are not concerned about whether the government will claw back federal funds. Instead, they’re worried about getting access to the money in the first place.

The 25-bed hospital has been operating at or near capacity since Thanksgiving, when Oklahoma experienced a spike in COVID-19 cases that continues to grow. The city loaned the hospital $236,000 from its emergency reserves to pay employee salaries in November and December, according to city officials. And the hospital still needs to make various improvements, including replacing an antiquated system that supplies oxygen to patients.

Prague’s mayor, Cliff Bryant, acknowledged the risk the city took in buying the hospital, given the facility’s history of financial problems and the additional pressures from the ongoing pandemic. But, he said, the move was necessary to ensure residents had access to quality health care.

“It’s either that or shut it down, so it’s not a real good choice,” Bryant said.

Bryant said the city plans to apply for another round of relief money, probably early this year, but he worries about another denial. HHS has an estimated $24 billion left to allocate. The agency has not released details about which providers will qualify and how much they will receive.

Meanwhile, the $1.7 million in relief money intended to help the Prague hospital weather the pandemic is still sitting in a bank account controlled by the bankruptcy trustee. He’s unsure what will happen to the money.

“I think one possibility is that it would just get sent back to the government,” Waldrep said.

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Biden signed an executive order mandating the Federal Government not renew Department of Justice contracts with privately operated criminal detention facilities. (photo: WikiCommons)
Biden signed an executive order mandating the Federal Government not renew Department of Justice contracts with privately operated criminal detention facilities. (photo: WikiCommons


Biden Orders DOJ to End Private Prison Contracts as Part of Racial Equity Push
Kevin Breuninger, CNBC News
Breuninger writes: "President Joe Biden ordered his Department of Justice on Tuesday to phase out its contracts with private prisons, one of multiple new planks of Biden's broad-focused racial justice agenda." Biden signed four additional executive actions after laying out his racial equity plan at the White House. The actions are aimed at combating discriminatory housing practices, reforming the prison system, respecting sovereignty of Tribal governments and fighting xenophobia against Asian Americans, especially in light of the Covid pandemic.

“I ran for president because I believe we’re in a battle for the soul of this nation,” Biden said before signing the actions. “And the simple truth is, our soul will be troubled as long as systemic racism is allowed to persist.”

“I firmly believe the nation is ready to change, but government has to change as well,” he said.

The actions are the latest in a sweeping first-week flex of presidential powers. Here’s what Biden signed Tuesday afternoon, according to a preview provided by senior administration officials:

  • An executive order directing Biden’s attorney general to not renew DOJ contracts with privately operated criminal detention facilities;

  • A presidential memorandum directing the Department of Housing and Urban Development to examine the effects of the Trump administration’s regulatory actions that “undermined fair housing policies and laws.” Based on that analysis, the memo also directs HUD to take steps to fully implement the requirements of the Fair Housing Act.

  • An executive order pushing federal agencies to regularly and meaningfully engage with Tribal governments;

  • And an executive memorandum directing the Health and Human Services Department and Biden’s Covid health equity task force to consider issuing best practices for advancing “cultural competency” and sensitivity toward Asian Americans and Pacific Islanders as part of its Covid response efforts. The memo also directs the DOJ to partner with those communities to prevent hate crimes and harassment against them.

“For too many American families, systemic racism and inequality in our economy, laws and institutions, still put the American dream far out of reach,” domestic policy advisor Susan Rice said at a press briefing preceding Biden’s speech and signings.

“These are desperate times for so many Americans, and all Americans need urgent federal action to meet this moment,” Rice said.

“Building a more equitable economy is essential if Americans are going to compete and thrive in the 21st century.”

Rice noted in the briefing that Biden’s order to the DOJ does not apply to private-prison contracts with other agencies, such as Immigration and Customs Enforcement.

That order is “silent on what may or may not transpire with ICE facilities,” she said, while stressing that the latest actions are “just the beginning” of the administration’s racial equity push.

Biden put racial justice issues at the center of his winning campaign against former President Donald Trump. Shortly after being sworn into office, Biden signed an executive order that established his administration’s social-justice focus and revoked some of his predecessor’s policies.

Specifically, the Jan. 20 action canceled Trump’s order limiting federal contractors’ ability to hold workplace diversity and inclusion trainings, which was signed in September.

Biden also ended the Trump administration’s “1776 Commission,” which produced a report highly critical of progressive ideologies in the final days of Trump’s term.

Biden’s order put the Domestic Policy Council, led by Rice, in charge of coordinating “efforts to embed equity principles, policies, and approaches across the Federal Government.”

“This will include efforts to remove systemic barriers to and provide equal access to opportunities and benefits, identify communities the Federal Government has underserved, and develop policies designed to advance equity for those communities,” that order said.

Biden is scheduled to return to the State Dining Room at 4:45 p.m., when he will speak about his administration’s efforts to contain the Covid pandemic.

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Representatives of religious organizations file request for impeachment, Brasilia, Brazil, Jan. 27, 2021. (photo: Jornalistas Livres)
Representatives of religious organizations file request for impeachment, Brasilia, Brazil, Jan. 27, 2021. (photo: Jornalistas Livres)


Hundreds of Brazilian Religious Leaders Across Denominations Call for Bolsonaro's Impeachment
teleSUR
Excerpt: "Catholic and Evangelical religious leaders on Tuesday filed a petition for Congress to open an impeachment trial against Brazil's President Jair Bolsonaro due to his mismanagement of the COVID-19 pandemic."
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Drilling rigs on public land near Douglas, Wyoming. (photo: Leah Millis/AP)
Drilling rigs on public land near Douglas, Wyoming. (photo: Leah Millis/AP)


Joe Biden's 'Climate Day' of Executive Actions Signals Clean Break With Trump
Oliver Milman, Guardian UK
Milman writes: "Joe Biden is to instruct the US government to pause and review all oil and gas drilling on federal land, eliminate fossil fuel subsidies and transform the government's vast fleet of cars and trucks into electric vehicles, in a sweeping new set of climate executive orders."

The battery of executive actions, to be signed by the US president on Wednesday, will direct the Department of the Interior to pause new oil and gas leases on public lands and offshore waters and launch a “rigorous review of all existing leasing”, according to a White House planning document.

The directive opens up a path to the banning of all new drilling on federal land, a campaign promise made by Biden that has been widely praised by climate groups and caused outrage within the fossil fuel industry. Biden has called the climate crisis the “existential threat of our time” and the White House has said the new executive orders will help push the US towards a goal of net zero greenhouse gas emissions by 2050.

“President Biden and his administration are taking an important step in the right direction by limiting oil and gas development on federal lands,” said Robert Howarth, professor of ecology at Cornell University, who added that the world “must rapidly transition away from fossil fuels” to avoid disastrous climate change.

Jesse Prentice-Dunn, policy director at the Center for Western Priorities, added that “Hitting pause on oil and gas leasing is a crucial first step toward reforming a rigged and broken system that for too long has put oil and gas lobbyists ahead of the American people.”

Around a quarter of the US’s planet-heating emissions comes from fossil fuel production on public lands and it is estimated a national ban on leasing would reduce carbon emissions by 280m tons a year. Donald Trump’s administration opened up almost all federally owned land to drilling, a move cheered as a job creator by industry but decried by environmentalists and Native American tribes.

“There has to be a balance point: people over money,” said Daniel Tso, a member of the Navajo Nation.”I welcome an end to federal fossil fuel leasing and the necessary transitions to more sustainable economies for the Navajo Nation.”

Kathleen Sgamma, president of the Western Energy Alliance, which represents oil and gas drillers in western states, has said her group will challenge the moratorium in court. “The environmental left is leading the agenda at the White House when it comes to energy and environment issues,” she said.

Biden’s new set of executive orders, dubbed “climate day” by environmental campaigners, adds up to one of the most wide-ranging efforts ever taken by a US president to tackle the climate crisis, building upon his decision last week to re-enter the Paris climate agreement.

Alongside the review of public lands, the Biden administration will install climate as an “essential element” of US foreign policy and national security, craft a strengthened national emissions reduction target and will set a new goal of conserving 30% of American land and oceans by 2030. The new emissions goal may well be presented at an international climate summit that Biden is planning for Earth Day, on 22 April.

The White House, for the first time, will have an office of domestic climate policy to coordinate Biden’s climate agenda alongside a national climate taskforce that will comprise of 21 government agency leaders to adopt a “whole of government” approach to reducing emissions. A review of scientific integrity practices will roll out.

The orders also establish an environmental justice interagency council to address the racial and economic inequities exacerbated by climate change and air and water pollution. Biden hopes to pass a $2tn clean energy package through Congress and he will direct that 40% of investments will be aimed at disadvantaged communities.

In all, the climate package is a strong repudiation of the Trump administration, which consistently sidelined or derided climate science, dismantled policies designed to lower emissions and withdrew from the Paris climate deal.

“This is the single biggest day for climate action in more than a decade, and what makes it all the better is that President Biden and Vice-President Harris are just getting started,” said Gene Karpinski, president of the League of Conservation Voters.

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RSN: FOCUS: Bess Levin | Just Wait Until Marjorie Taylor Greene Finds the Person Who Used Her Facebook Account to Like a Post About Executing Nancy Pelosi!

 


 

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FOCUS: Bess Levin | Just Wait Until Marjorie Taylor Greene Finds the Person Who Used Her Facebook Account to Like a Post About Executing Nancy Pelosi!
Marjorie Taylor Greene. (photo: Getty Images)
Bess Levin, Vanity Fair
Levin writes: "That person, who is definitely not Greene, is going to be in big trouble!"


arjorie Taylor Greene has only been representing Georgia’s 14th congressional district in Washington for a few weeks but she’s already made a big name for herself…as one of the most batshit fucking crazy elected officials in recent history, a title for which there is major competition these days. After voicing her support on the campaign trail for such conspiracies as QAnon, Pizzagate, and one about the Pentagon not actually being hit by a plane on 9/11, Greene has wasted no time making it as clear as possible that she is a dangerous lunatic who should not be allowed anywhere near the halls of power. On her first day in office, which took place on January 3, she wore a mask that read, “Trump Won.” Days later, during the certification of Joe Biden’s win, she objected to counting Michigan’s electoral votes. While sheltering in place during the riot that occurred shortly thereafter, she refused to wear a mask, despite being in close proximity with other people. During the House debate to remove Trump from office, she tweeted: “Democrats must be held accountable for the political violence inspired by their rhetoric.” And speaking of literal violence, she’s got some thoughts on that too, like that prominent Democrats, including the House Speaker, should be executed.

CNN’s KFile reports that in a Facebook post from January 2019, Greene liked a comment that read, “a bullet to the head would be quicker” to remove House Speaker Nancy Pelosi. In April 2018, on a post she wrote about the Obama administration’s Iran deal, a commenter asked her, “Now do we get to hang them ?? Meaning H & O ???,” meaning Barack Obama and Hillary Clinton. To which Greene responded: “Stage is being set. Players are being put in place. We must be patient. This must be done perfectly or liberal judges would let them off.” She also liked a comment about Pelosi being taken out of the House “through removal or death, doesn’t matter, as long as she goes,” and another that told her to “beat Pelosi’s ass.”

After KFile reached out to Greene for comment, the congresswoman posted a statement on Twitter claiming, “Over the years, I’ve had teams of people manage my pages. Many posts have been liked. Many posts have been shared. Some did not represent my views. Especially the ones that CNN is about to spread across the internet.” Strangely, she didn’t say if somehow her “team” was responsible for the February 2019 Facebook Live video that KFile uncovered in which Greene suggested that Pelosi would “suffer death or she’ll be in prison” for “treason,” or one from later the same day in which she suggested Representative Maxine Waters was “just as guilty of treason as Nancy Pelosi.”

Greene also chose not to directly comment on the petition she created in January 2019 to impeach Pelosi for “crimes of treason” for not supporting Trump’s immigration policies and border wall, or the speech she gave regarding the petition in which she said, “[Pelosi is] a traitor to our country, she’s guilty of treason. She took an oath to protect American citizens and uphold our laws. And she gives aid and comfort to our enemies who illegally invade our land. That’s what treason is. And by our law representatives and senators can be kicked out and no longer serve in our government. And it’s, uh, it’s a crime punishable by death is what treason is. Nancy Pelosi is guilty of treason.”

Earlier this month, survivors of the Parkland shooting called for Greene to resign after reports emerged that she’d called the 2018 school shooting a “false flag” operation, and KFile also found that she called survivor and activist David Hogg #littleHitler, claiming he was a “bought and paid little pawn” and actor.

Last week, Greene filed articles of impeachment against Biden, which somehow only makes the Top 25 of the craziest things she’s ever done.



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POLITICO NIGHTLY: The climate is hot. So is GameStop. Biden’s working on one of them.



 
POLITICO Nightly logo

BY MICHAEL GRUNWALD

Presented by Facebook

With help from Renuka Rayasam

HERE’S THE GREEN DEAL — Today was Climate Day in the Biden White House. The unmistakable message was that every day will be Climate Day in the Biden White House.

With a flurry of sweeping executive orders, lofty presidential rhetoric and written promises to “Take a Whole-of-Government Approach to the Climate Crisis,” President Joe Biden and his green advisers made it clear they plan to weave climate policy into foreign policy, domestic policy and everything else their administration does. Biden set ambitious campaign goals of a carbon-free electric sector by 2035 and a carbon-neutral nation by 2050. Now that he’s in power and the U.S. is back in the Paris accord, he said, “it’s time to act.”

Nightly video player of President Joe Biden speaking on climate change

What Biden didn’t say is that with only 50 Democrats in the Senate — including Joe Manchin of West Virginia, who doesn’t share his climate goals — action is unlikely to take the form of aggressive legislation like the cap-and-trade bill that died in Congress in 2010. Biden might be able to slip green policies into must-pass budget bills or even an infrastructure bill, but one takeaway from Climate Day was that the administration understands it needs to act on its own.

Then again, there are limits on Biden’s options to act unilaterally, especially with a 6-3 conservative majority on the Supreme Court. So what could he do to address a crisis that’s already weirding the weather and upending lives? After four years of denial under President Donald Trump, what would a whole-of-government approach to the climate look like?

Climate Day provided a glimpse of what a president can do on his own. Biden paused oil and gas leases on public lands. He ordered federal agencies to buy clean electricity and electric vehicles. He created a White House climate office, an environmental justice council and a new President’s Council of Advisors on Science and Technology to replace the one Trump scrapped. He set a new goal of conserving 30 percent of America’s lands and oceans by 2030. He launched bureaucratic processes to promote “climate-smart agricultural practices” and the revitalization of communities with shuttered fossil-fuel plants.

None of those moves will do much to reduce emissions in the short term. But there’s still quite a bit Biden can try to do to work around a divided Congress and a hostile Court.

He could ratchet up enforcement of existing regulations of fossil-fuel pollution, even if he can’t get new carbon rules past the Court. He’s vowed to tighten longstanding fuel-efficiency standards for vehicles that the Court might be less likely to strike down, and he could do the same for energy-efficiency standards for appliances. He could try to accelerate the deployment of budget-friendly technologies like solar power, wind power and LED lighting that pay for themselves within a few years. He could use trade policy, diplomatic policy and his bully pulpit to bolster climate-friendly industries and encourage the rest of the world to do the same.

Biden has already stocked his administration with a flock of committed climate hawks — transportation officials focused on transit rather than highways, energy officials focused on renewables rather than fossil fuels, housing and commerce and budget officials with public climate records. These hawks will squawk if the president doesn’t follow through. They’re not the people you hire if you don’t want to act.

Clearly, Biden does want to act. Climate Day formalized his commitment to take the climate seriously. It was a boat-burning ceremony, no turning back. It sent a message to 2 million federal employees that they ought to take the climate seriously, too. That won’t always happen, of course. But Climate Day also sent a message to the news media that when it doesn’t happen, the administration will be breaking a promise. That’s how bureaucracies change.

Welcome to POLITICO Nightly. Reach out at mgrunwald@politico.com and rrayasam@politico.com or on Twitter at @mikegrunwald and @renurayasam.

 

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FIRST IN NIGHTLY

A CASH ADVANCE FOR YOUR KIDS — In the past year, the government has sent stimulus checks to half the country — twice. Now, Democrats want to do something even more ambitious: Send cash each month to tens of millions of low-income people with children.

As part of their latest coronavirus stimulus plan, Democrats are drafting a proposal to expand and transform a long-standing tax credit for children — normally taken once a year at tax time — into a monthly payment, tax reporter Brian Faler writes. They aim to send $250 each month per child — $300 for kids under the age of six — in what would be the country’s first-ever child allowance.

It’s designed to substantially reduce the number of children living in poverty by getting money into their parents’ pockets quickly and steadily. Democrats say if the government can send stimulus checks to 150 million people, then it can do this too.

“Families wait all year for tax filing season because their earned income and child tax credits cover critical needs like overdue bills or medical care,” Ron Wyden, the Senate’s top Democratic tax writer said in a statement. “Making at least the child tax credit payable in advance would help lessen the constant financial pressure on these families.”

But the proposal is still in its early stages, and it’s likely to be much more difficult to implement than cutting stimulus checks. Democrats still need to confer with the Treasury Department about how it could work, and it’s unclear how quickly the department might be able to set up such a program.

 

TRACK THE FIRST 100 DAYS OF THE BIDEN ADMINISTRATION: A new president occupies the White House and he is already making changes. What are some of the key moments from Biden's first week in office? Find out in Transition Playbook, our scoop-filled newsletter tracking the appointments, people, and emerging power centers of the first 100 days of the new administration. Subscribe today.

 
 
TALKING TO THE EXPERTS

People walk past a GameStop store in New York City. Stock shares of videogame retailer GameStop Corp has increased 700 percent in the past two weeks due to amateur investors.

People walk past a GameStop store in New York City. Stock shares of videogame retailer GameStop Corp has increased 700 percent in the past two weeks due to amateur investors. | Getty Images

SQUEEZE PLAY — At the moment it’s not the vaccine rollout or Covid cases that has Wall Street worried, Renu writes. Instead it’s a handful of individual investors organizing themselves on Reddit forums. A bunch of people on message boards, some who have been out of jobs for nearly a year or are using their gains to pay off student loans, are exploiting the bets that big hedge funds have taken against companies facing existential threats, like GameStop, BlackBerry and AMC. Hedge funds are having to either sell stocks or borrow billions of dollars to cover their bets that certain stock prices will fall. If enough go down, they could take the market with them.

Here’s our favorite explainer of the GameStop squeeze. The stock closed at $347.51 today, up 135 percent. On Jan. 1, the price was $17.25. Sen. Elizabeth Warren called on financial regulators today to step in, and White House press secretary Jen Psaki said the Biden administration was monitoring the situation.

Nightly reached out to experts and asked whether the SEC or Congress should intervene.

“The price spike in GameStop demonstrates both a minor and major blemish in our equity markets. This is not the first time we have seen such spikes. A stock price that is too high does not do anyone any good, because it locks in future losses for investors as the stock eventually finds the correct level. There are some technical issues with respect to SEC Rules 204 and 15c3-3 that contributed to the spike. Obviously the SEC needs to investigate what happened, and see if its new Consolidated Audit Trail (CAT) is up to the task. However, the SEC is drastically underfunded, and does not have the resources to do the job it needs to do. If you add up all of the dollars spent on the SEC since its founding in 1934, it is less than the investor losses from one Bernie Madoff. Congress needs to fully fund the SEC.

“However, the real problem is the completely dysfunctional structure of our financial regulatory system. We literally have hundreds of different financial regulatory agencies at the state and federal levels, and they don’t always play nicely with each other. Too many things fall in between the cracks. Dodd-Frank in 2010 patched up some of the cracks but did not deal with the convoluted structure we have. The changes brought about by the changes in our economy and our financial markets indicate it is time to update our regulation. Congress needs to seriously rethink and re-engineer how we regulate our financial system (banking, securities, commodities, insurance, payments, etc.). This is not an easy lift, and probably not one that can be completed in this Congress, but we need to start the conversation now.” — James Angel, a financial markets expert at Georgetown University

“It’s a good reminder of how complex and interconnected markets are — from equities, derivatives, to lending markets. The SEC and FINRA should examine the incentives of brokers to act as gatekeepers in areas such as options markets, and whether their rules can be strengthened to protect investors and maintain market integrity. There are two areas specifically in options markets: 1. The diligence that broker firms have to do of new investors and whether options are suitable investment vehicles for them. 2. Whether the payment for order flow rates in options markets (~2X higher than equities) distorts the incentives to do this screening.

“I should caveat that I’m not convinced that options trading (and hedging) are necessarily the majority cause of this rally, but it is certainly one potential cause, and an area where the SEC and FINRA have clear authority but very old rules (e.g., FINRA Rule 2360).” — Edwin Hu, a research fellow at the NYU School of Law’s Institute for Corporate Governance & Finance and former chief economist and counsel at the SEC

 

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ON THE HILL

MCCARTHY TO HOUSE REPUBLICANS: PLAY NICE. I MEAN IT — House GOP Leader Kevin McCarthy today implored Republicans to stop publicly attacking each other after GOP in-fighting over the deadly Jan. 6 Capitol riot, which has created simmering tensions inside the conference, Melanie Zanona writes.

During a private conference call, McCarthy told members that they should be spending more time countering the Biden agenda than chastising each other, adding he would no longer have any tolerance for such behavior, according to multiple sources on the call. McCarthy also reminded House Republicans that they will have an opportunity to air their grievances during a closed-door meeting in the Capitol next week, where a conservative-led push to oust Rep. Liz Cheney (R-Wyo.) over her vote to impeach Trump is expected to come to a head.

“If you’re not focused on what you’re doing and what the Democrats are doing wrong, and you’re focused on talking about one another, I’m not putting up with that anymore,” McCarthy said on the call, according to a source familiar with the conversation. “But, if you continue to do that, there won’t be a place for you. I want to be very clear to each and every one of you. … It is not a way we’re going to win the majority.”

AROUND THE NATION

SNAP SPENDING BOOM — Federal spending on the country’s largest nutrition assistance program increased by nearly 50 percent in 2020 from the economic shock of the pandemic, according to newly released data from the Agriculture Department.

The Supplemental Nutrition Assistance Program, still known to many as food stamps, cost nearly $90 billion in fiscal 2020, USDA said today. That’s a jump from just over $60 billion in 2019, senior agriculture reporter Helena Bottemiller Evich writes. The massive increase in cost is a result of two major factors: Some 8 million more Americans are getting aid, and benefit levels were increased by Congress on an emergency basis last spring to help blunt the effects of widespread business and school shutdowns.

 

GET THE SCOOP ON CONGRESS IN 2021 : Get the inside scoop on the Schumer/McConnell dynamic, the new Senate Bipartisan Group, and what is really happening inside the House Democratic Caucus and Republican Conference. From Schumer to Pelosi, McConnell to McCarthy and everyone in between, our new Huddle author Olivia Beavers brings the latest from Capitol Hill with assists from POLITICO's deeply sourced Congress team. Subscribe to Huddle, the indispensable guide to Congress.

 
 
ASK THE AUDIENCE

DEAR NIGHTLY — Curious about safer ways to shake up your pandemic routine? Or how to navigate daily life before you can get a vaccine? Do you have a question about the pandemic or the virus that hasn’t been answered? We’ll try to answer it. Send your thoughts to nightly@politico.com, and we’ll publish answers to select ones later this week.

THE GLOBAL FIGHT

GROWTH NOT INVOLVING GAMESTOP — The German economy will likely grow 3 percent this year despite the impact of Covid-19, Economy Minister Peter Altmaier said today.

“The good news is that the upswing that has been observed since September and October 2020 will continue in 2021, albeit with less momentum than we had hoped,” Altmaier said while presenting the government’s Annual Economic Report at a press conference in Berlin. “That means we have to do everything we can to sustain this upswing,” he added.

Altmaier said he expects “the economy to return to the level seen before the outbreak of the corona crisis by the second half of next year.”

NIGHTLY NUMBER

514,000

The number of deaths CDC Director Rochelle Walensky said were possible from Covid by Feb. 20 based on current projections.

PARTING WORDS

A warning sign is displayed on the shoreline near the Olympic Rings in Tokyo.

A warning sign is displayed on the shoreline near the Olympic Rings in Tokyo. | Getty Images

HIGHER, FASTER, CANCELED? Organizers calling for Biden’s support for the Tokyo Olympics have largely gotten silence from his administration, after speculation that the Summer Games could be called off because of the coronavirus pandemic.

Psaki has been asked multiple times whether the president thinks the Olympics, slated to start in July, would be safe, but she hasn’t given an answer. After saying on Friday that she hadn’t talked to Biden about it, Psaki said the same again today.

Haruyuki Takahashi, a member of Japan’s Olympic organizing executive board, said that Biden’s coming out with “a positive statement about the Olympics going ahead” would bring “strong momentum,” The Wall Street Journal reported today.

“It’s up to the U.S.,” Takahashi said. “I hate to say it, but Thomas Bach and the IOC are not the ones who are able to make the decision about the Games. They don’t have that level of leadership,” he said, referring to the International Olympic Committee and its president.

 

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RSN: FOCUS: Jesse Jackson | Our System Is Rigged so the Minority Can Rule

 

 

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FOCUS: Jesse Jackson | Our System Is Rigged so the Minority Can Rule
On Jan. 7, Vice President Mike Pence (C) walks back from the House Chamber followed by a Senate procession carrying boxes of electoral votes at the Capitol. (photo: Olivier Douliery/Getty)
Jesse Jackson, The Chicago Sun-Times
Jackson writes: "The Electoral College, Republican gerrymandering and the filibuster are all examples of how American democracy is at risk."

he majority does not rule in the United States. The foundation of any democracy — one person, one vote — is mocked by institutionalized impediments that allow the minority to win even when they lose at the ballot box. In this era, even when Democrats win, they lose. And the will of the majority of the people is frustrated by a system rigged to empower the minority.

Consider: Democratic candidates have won the popular vote in seven of the last eight presidential elections but have become president only five times. Trump became president four years ago despite losing the popular vote by nearly 3 million votes. Presidents who lost the majority of the votes have nominated five of the nine Supreme Court justices. The reason, of course, is the Electoral College, which tallies votes by state, not by voter. This institution is a legacy of slavery, designed by the founders to ensure that the less populated slave states would be able to balance the free states that had nearly three times the population.

In frustrating the popular vote, the Electoral College puts the democracy at risk. Because of the Electoral College, Trump’s margin of defeat wasn’t 7 million across the nation, but about 65,000 votes in three states and the 2nd District of Nebraska. That helped empower him to mislead millions by claiming the election was stolen, despite Biden’s landslide popular vote victory.

In the Senate, Democrats and Republicans each have 50 senators (with Vice President Kamala Harris the tie-breaking vote). The 50 Democrats represent 41 million more voters than the 50 Republicans. Smaller, more rural states with few people, like Wyoming or Idaho, have as many senators as large populous states like California and New York. To add insult to injury, the District of Columbia and Puerto Rico, which have more voters than several states, are denied statehood with no final vote on any legislation.

That means, among other things, that three Supreme Court justices — Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett — were all nominated by a president who lost the popular vote and confirmed by a bloc of senators who represent less than half the country.

In the House, Democrats have a small majority. But to win a majority, it is estimated that they must win 6 percent to 7 percent more votes than Republicans across the country, because Republican gerrymandering — drawing districts to pack Democratic voters in a few districts (usually disproportionately people of color) while giving Republicans an edge in many — has rigged the system against the party that represents the majority. And worse, Supreme Court judges nominated by minority presidents have ruled that the federal courts will do nothing to protect against grotesquely distorted gerrymandering.

The same distortions exist in state legislatures, where gerrymandered districts help the party with the minority of votes gain the majority. That majority then has the power to redraw the districts to rig the system even more. More than 59 million Americans live under minority rule in a state where the party with fewer votes controls a majority of the legislative seats. In Wisconsin, 44.7% of voters cast ballots for Republican Assembly candidates, but the GOP won 64.6% of the seats. With gerrymandering, voters aren’t choosing their representatives; representatives are choosing their voters.

The right-wing Supreme Court majority has ruled that money is speech and that corporations are citizens, so their ability to throw money into elections cannot be limited. The result, not surprisingly, is that American elections get more costly and big money and entrenched interests grow more powerful.

The fix is in — and the results are ruinous. Today, Senate Republican leader Mitch McConnell is refusing to agree to rules to govern the Senate unless Democrats agree to sustain the filibuster. The filibuster — the requirement that virtually any legislation receive not a majority of the vote but a supermajority of 60 votes — is the instrument McConnell used to obstruct virtually everything President Obama sought to do, with the stated purpose of making him a one-term president. The result is a Senate that is frozen in the midst of cumulating crises. Even Joe Biden’s pandemic emergency rescue package is stalled. America becomes more and more dysfunctional as it becomes less and less democratic.

The Democratic majority in the House has passed legislation — HR 1 in the last session of Congress — that would remedy some of these inequities. The 51-vote majority in the new Senate wants this to be its first act. But, of course, if the filibuster is sustained the minority will block even these common-sense reforms.

The sacking of the Capitol sent a message around the world that America’s democracy is literally under siege. The reality is worse: our system is rigged so that the minority can rule. The disconnect — the frustration of the will of the majority — is a clear and present danger.

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