The Washington Post - 21.03.2020

A2 eZ re THE WASHINGTON POST.SATURDAy, MARCH 21 , 2020

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In CAse YoU mIsseD It

some reports that you may have missed. read more at washingtonpost.com.

F ormer congressman

s entenced to prison

Former congressman Duncan
D. Hunter, a Republican from
California, was sentenced
Tuesday to 11 months in federal
prison for misusing hundreds of
thousands of dollars in campaign
funds to pay for family vacations,
theater tickets and t o facilitate
extramarital affairs.
washingtonpost.com/national

5.7-magnitude quake

hits near S alt Lake City

A 5.7-magnitude earthquake
struck near Salt Lake City on
Wednesday, damaging buildings,
causing thousands of power
outages and upending
operations at the airport for
several hours. The quake struck
around 7 a.m. Its epicenter was
about four miles west-southwest
of Salt Lake City International
Airport. There were no reports of
serious injuries.
washingtonpost.com/national

Court backs move to

let Putin stay in power

Russia’s Constitutional Court
on Monday ruled it was legal to
change the country’s
constitution in a way that could
allow President Vladimir Putin
to remain in power until 2036,
less than a week after Putin
publicly backed the idea.
washingtonpost.com/world

India executes 4 men

in 2012 rape, murder

India executed four men
convicted in a brutal 2012 rape
and murder case early Friday,
closing a painful chapter in the
country’s history. Dozens
gathered outside the Delhi jail
where the hangings took place.
The executions marked the first
use of capital punishment in
India in five years.
washingtonpost.com/world

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BY SPENCER S. HSU

A federal judge froze a House lawsuit on Friday that seeks to enforce a subpoena for six years of President Trump’s federal tax records. The judge said he will wait at least until an appeals court rules on whether Congress, in a sepa- rate case related to former Trump White House counsel Donald Mc- Gahn, can sue t o compel e xecutive branch officials to testify. U.S. District Judge Trevor N. McFad- den of Washington indicated that the hold in the tax records case could go on longer if the McGahn case goes to the U.S. Supreme Court. The House sued the administration in July after Treasury Sec- retary Steven Mnuchin refused to

comply with a subpoena for Trump’s business and tax records issued in May. The Justice Department has sought to toss out the case for Trump’s tax records, based on White House claims of immunity from congressional oversight. McFadden wrote that both cas- es raise similar w eighty legal ques- tions about whether courts can weigh in on political fights between Congress and the White House or if the Constitution re- quires that judges stay out of such disputes. In a seven-page order, McFad- den noted that the full U.S. Circuit Court of Appeals for the District of Columbia Circuit voted last week to rehear a 2-to-1 panel decision overturning a trial judge’s order that McGahn must comply with a

House subpoena to testify in Con- gress’s impeachment probe. “The D.C. Circuit granted re- hearing en banc in McGahn, so all the reasons for a stay still hold,” McFadden wrote, saying the question of whether the House or Senate can go to courts to enforce subpoenas “is unsettled for now.” “Piecemeal litigation would be an inefficient use of resources,” said McFadden, who stayed the case indefinitely to “await further proceedings in McGahn.” The House has argued in the tax records case that it can go to court under a basis t hat was not an issue in the McGahn case. Namely that it may sue to enforce a 1924 law that gives the tax-writing committee authority to seek tax returns and other records in overseeing the effectiveness of the Internal

Revenue Service’s a udit programs. McFadden in January announced he would delay ruling on the Trump administration’s request to toss out t he lawsuit until a ruling in McGahn’s case. McFad- den lifted the stay when the federal appeals court in Washington said Feb. 28 that McGahn can defy a congressional subpoena. It remains unclear whether appeals in the McGahn case can be resolved before the House request for Trump’s tax returns expires when this term of Congress ends after November’s election. At oral arguments in the tax case last fall, McFadden said he was “dubious” about the department’s claim that Congress cannot go to court to enforce its legal demand for information because doing so would “supplant the cen-

turies-old process of political ne- gotiation” between the executive and legislative branches. The judge acknowledged arguments that such an absolute posi- tion could stymie any congressional investigation of the executive branch. Trump is the first president since the 1970s not to release his tax records. Mnuchin has said the subpoena “lacks a legitimate legislative purpose,” according to Trump’s court filing. House Democrats sued in July, citing investigative reports that allege Trump has engaged in ag- gressive, decades-long tax avoid- ance schemes. House Democrats said they seek to determine if he took inappropriate advantage of tax laws. [email protected]

U.S. judge freezes House lawsuit that seeks years of Trump’s tax records

BY JOHN WAGNER, MICHELLE YE HEE LEE, JON SWAINE AND KAROUN DEMIRJIAN

Sen. Richard Burr (R-N.C.) sought an ethics review Friday of his recent sale of more than $1.7 million in stocks as he and other lawmakers faced a bipartisan uproar over whether they had used information gleaned from private congressional briefings to guide transactions before the market plummeted because of the coronavirus outbreak. The Senate Intelligence Com- mittee chairman, who had publicly expressed confidence in the country’s preparedness for the pandemic, sold a significant por- tion of his stocks last month, according to public disclosures. Burr said he relied solely on public news reports for the sales but asked the Senate Ethics C om- mittee for a review. “Understanding the assump- tion many could make in hind- sight however, I spoke this morn- ing with the Chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency,” Burr said in a statement. The sales included stocks in some of the industries that were later hardest hit by the pandemic, including those in hotels, restaurants, shipping, drug man- ufacturing and health care, records show. In his statement, Burr s aid h e had relied specifical- ly on “CNBC’s daily health and science reporting out of its Asia bureaus.” Until about a week ago, Presi- dent Trump a nd GOP leaders h ad projected optimism about the country’s ability to manage the global outbreak of the coronavirus. Burr’s actions prompted wide- spread criticism, including from some conservative commenta- tors, as well as calls for his

resignation from Democrats in his home state, among others. Even some of his GOP colleagues said scrutiny of his stock sales was appropriate. Sen. Thom Tillis, Burr’s Re- publican colleague from the Ta r Heel State, said in a tweet Friday that “given the circumstances, Senator Burr owes North Caro- linians an explanation” and that an Ethics Committee review could provide a “professional and bipartisan inquiry into this matter.” As h ead of the powerful Intelli- gence Committee, Burr was re- ceiving frequent briefings and reports on the threat of the virus. He also sits on the Senate Health, Education, Labor and Pensions Committee, w hich received briefings on the pandemic. In mid-February, Burr sold 33 stocks held by him and his spouse, estimated at between $628,033 and $1.7 million, Sen- ate financial disclosures show. It was the largest number of stocks he had sold in one day since at least 2016, records show. Burr, who spent a decade in the House before his election to the Senate in 2004, has said that

his current term will be his last and that he will not seek reelec- tion when his seat is up in 202 2. The recent stock sales of several other lawmakers have also drawn scrutiny in light of ques- tions about whether they acted on information that was not broadly available at the time. Citizens for R esponsibility a nd Ethics in Washington, a federal watchdog group, announced Fri- day that it was filing complaints with the Senate Ethics Commit- tee against Burr and Sen. Kelly Loeffler (R-Ga.), another law- maker whose recent stock sales have prompted media scrutiny. In the weeks after a closed Senate briefing, Loeffler sold holdings valued at between $1.28 million and $3.1 million in companies like ExxonMobil and Auto Zone, which have seen their stock prices fall significantly, while she purchased shares in a company that sells teleworking software. Loeffler also sits on the Senate Health panel. Common Cause, another advo- cacy group, announced that it was filing complaints with the Justice Department and the Se- curities and Exchange Commis-

sion against Burr and Loeffler, as well as against Sens. James M. Inhofe (R-Okla.) and Dianne Feinstein (D-Calif.). During an appearance Friday on CNBC, Loeffler said that sales by her and her husband, Jeffrey Sprecher, the chairman of the New Yo rk Stock Exchange, were made “at the decision of our investment managers” and that she didn’t learn of them until well after the fact. “Certainly I had no involve- ment,” Loeffler said, adding that she would welcome any scrutiny that is appropriate and that she has always adhered “to the letter and the spirit of the law.” Loeffer pointed to a nonpublic disclosure made to the Senate Ethics Committee, stating that her financial transactions are “notified to filer on or after” the date they are made. But the disclosure, a copy of which her staff provided t o The Washington Post, does not c larify w hether she had any role in directing the transactions. Inhofe said he did not even attend a closed Senate briefing on the coronavirus that could have helped inform stock decisions. He said the sale of stocks worth up to $400,000 on Jan. 27 was carried out by a financial manager and part of a long-term plan to cash out holdings. Feinstein said that she was not at the briefing, either, and that her husband oversees the portfo- lio. S en. David Perdue (R-Ga.) and his wife made dozens of stock sales in January and February, selling up to $165,000 in shares of casino company Caesars En- tertainment, whose value has been b adly hit, l ike those of many other leisure businesses. He and his wife also made dozens of purchases, including investing up to $260,000 in Pfizer, the pharmaceutical corporation, in late February. Perdue told reporters that he

would be “very happy for some- body to take a look at” his transactions. Federal officials are barred by law from using the nonpublic information they learn in their positions for their private financial gain. Experts said that given the global fears at the time of these stock sales and purchases, it is not unusual that people would make significant decisions about selling or buying stocks. But the question at hand is whether specific information provided to these senators during private briefings informed their judgments of which industries would fare better or worse as a result of the disease’s spread to the United States, said Mat- thew Nielsen, a white-collar de- fense partner and expert at laws governing insider trading, who works at the law firm Bracewell LLP. For example, Burr sold stocks in the hospitality industry, and Loeffler purchased stocks in Cit- rix, which p rovides remote-working technology. “This comes down to... whether there was specific, classified information that would have been something unavail- able to the public, that led someone to conclude that there was going to be significantly more impact” on that industry, Nielsen said. Insider-trading prohibitions apply to all members of Con- gress, congressional staffers and other federal officials, under the Stop Trading on Congressional Knowledge (Stock) Act of 2012. Burr was among three senators who voted against the legislation at the time. [email protected] [email protected] [email protected] [email protected]

mike deBonis and Paul Kane contributed to this report.

Burr seeks Senate Ethics Committee review of his stock sales

AmAndA VoIsArd for tHe WAsHIngton Post Sen. Richard Burr (R-N.C.) at the C apitol last month. His sales of stocks in industries hit by the coronavirus are under scrutiny.

BY MICHAEL SCHERER AND MICHELLE YE HEE LEE

Former New York mayor Mike Bloomberg has decided to donate significant components of his shuttered presidential campaign to the Democratic Party, a historic bequest that includes an $18 million cash infusion to organize for the general election in swing states. The decision, which exploits a provision in campaign finance law available only to federal candidates, amounts to a shift in strategy for the billionaire political activist, who had previously promised to personally fund ground staff and offices in six states through an independent expenditure effort. He n ow hopes that much of the same operation will be run through the state and national Democratic Party, which would allow for it to directly coordinate with the Democratic nominee, whom he expects to be former vice president Joe Biden. An independent expenditure campaign is barred from such coordination. “While we considered creating our own independent entity to support the nominee and hold the President accountable, this race is too important to have many competing groups with good intentions but that are not coordinated and united in strategy and execution,” Bloomberg’s campaign wrote in a memo Fri-

day to Democratic Party Chair- man To m Perez. “Since Mike suspended his campaign and endorsed Joe Biden, the former vice president now controls the race. It is criti- cally important that we all do everything we can to support our eventual nominee and scale the Democratic Party’s general election efforts.” To accomplish the goal, Bloomberg will transfer cash re- maining in his presidential campaign account, which he donated, to the Democratic National Com- mittee’s Battleground Build-Up 2020 effort for use in the general election. The money will allow the party to hire hundreds of additional organizers, party officials say. Bloomberg also will transfer the long-term leases he has signed on some offices in some swing states to state Demo- cratic parties. Bloomberg’s advisers plan to work with the DNC on shifting

staff from his payroll to the party. All personnel would have to reap- ply for their jobs, and those hired by the party will be paid at DNC salary levels, according to a party official. Bloomberg was previously paying $6,000 a month for organizers, well above the market rates offered for other campaigns. “Our country is in crisis, and a change in presidential leadership is more important now than ever to protect our families, our com- munities and our economy,” Perez said in a statement. “With this transfer from the Bloomberg campaign, Mayor Bloomberg and his team are making good on their commitment to beating Donald Trump.” But the transition will be dis- ruptive for hundreds of Bloomberg organizers in swing states. They were previously told their jobs would continue through the general election, but they now find themselves facing

the prospect of unemployment amid an economic crisis brought about by the novel coronavirus pandemic. Organizers received an email Friday saying their jobs would end that day, though they will continue to receive pay through April 7 and health benefits through April 30. “A s a token of our appreciation, we are offering you the opportu- nity to keep your laptop and iPhone,” said one email from the Bloomberg campaign to organizers. The email also noted that the value of the devices, $1,400 or $1,700, depending on the laptop, will be counted as taxable in- come. Under normal circumstances, federal rules allow individuals to give a maximum of $355,000 per year to the DNC. The party h as set up a Democratic Grassroots Vic- tory Fund, a joint fundraising committee with state parties, that allows wealthy individuals to give $865,000 in one year. Bloomberg has already donated the maximum allowed to this account. But the new shift of resources means he is able to give more than 20 times the maximum a donor can give to the national party in one year, because of provisions that allow federal candidates to donate unlimited amounts of leftover money to national and state parties as they wind down their campaigns. This has effectively given Bloomberg a super-donor status because he self-funded his White House bid. Campaign finance experts said such a mass transfer of personal money was uncharted territory. “This has never, to my knowledge, been an issue before, because anybody other than some-

body worth multiple billions would want their money back even if they self-funded,” said Charlie Spies, a campaign finance lawyer. If someone mounted a self- funded bid solely to evade the individual contribution limit and donate leftover campaign funds to the party, that would be considered a straw donation scheme, experts said. But Bloomberg is shuttering a real campaign effort, and his decisions point to a loophole in the federal law that wealthy self- funded candidates can exploit, experts said. “I think it’d be absolutely wrong to suggest t hat it’s a ploy to get around the limits.... But it does suggest you could do that,” said Beth Kingsley, a campaign finance lawyer. “It does seem that there ought to be limits the same way there’s an individual [contribution] limit.” Although Bloomberg’s plans to establish a new independent expenditure campaign have been put on hold, his advisers continue to look at possible vehicles for a media campaign to support the Democratic nominee later this year. A super PAC he used in 2018 to support House candidates, In- dependence USA, still exists, and he still has the capability to form a new group. Since leaving the race earlier this month, Bloomberg has announced a broad range of dona- tions to the larger Democratic cause, including $2 million for black voter registration and $2 million to Swing Left, which is working to elect Democrats to Republican-held seats in 2020. [email protected] [email protected]

Bloomberg transfers campaign assets to party

tonI L. sAndys/tHe WAsHIngton Post Mike Bloomberg had previously promised to fund ground staff and offices in six states through an independent expenditure effort

Former mayor wants to help Democrats fight Trump in swing states

The Washington Post - 21.03.2020

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