Later On

A blog written for those whose interests more or less match mine.

Archive for September 25th, 2017

Holy mackerel! At least six of President Trump’s advisers, including Steve Bannon and Reince Priebus, used private email accounts for government business

leave a comment »

Lock ’em up! All of them! At least, that’s the punishment they recommended for Hillary Clinton. Matt Apuzzo and Maggie Haberman report in the NY Times:

At least six of President Trump’s closest advisers occasionally used private email addresses to discuss White House matters, current and former officials said on Monday.

The disclosures came a day after news surfaced that Jared Kushner, the president’s son-in-law and adviser, used a private email account to send or receive about 100 work-related emails during the administration’s first seven months. But Mr. Kushner was not alone. Stephen K. Bannon, the former chief White House strategist, and Reince Priebus, the former chief of staff, also occasionally used private email addresses. Other advisers, including Gary D. Cohn and Stephen Miller, sent or received at least a few emails on personal accounts, officials said.

Ivanka Trump, the president’s elder daughter, who is married to Mr. Kushner, used a private account when she acted as an unpaid adviser in the first months of the administration, Newsweek reported Monday. Administration officials acknowledged that she also occasionally did so when she formally became a White House adviser. The officials spoke on the condition of anonymity because they were not authorized to discuss the matter with reporters.

Officials are supposed to use government emails for their official duties so their conversations are available to the public and those conducting oversight. But it is not illegal for White House officials to use private email accounts as long as they forward work-related messages to their work accounts so they can be preserved.

During the 2016 presidential race, Mr. Trump repeatedly harped on Hillary Clinton’s use of a private account as secretary of state, making it a centerpiece of his campaign and using it to paint her as untrustworthy. “We must not let her take her criminal scheme into the Oval Office,” Mr. Trump said last year. His campaign rallies often boiled over with chants of “Lock her up!”

The F.B.I. closed its investigation into Mrs. Clinton’s handling of classified information and recommended no charges. But even after becoming president, Mr. Trump has prodded the Justice Department to reinvestigate.

While the private email accounts spurred accusations of hypocrisy from Democrats, there are differences. Mrs. Clinton stored classified information on a private server, and she exclusively used a private account for her government work, sending or receiving tens of thousands of emails. The content and frequency of the Trump advisers’ emails remain unknown, but Trump administration officials described the use of personal accounts as sporadic. The emails have not been made public.

“All White House personnel have been instructed to use official email to conduct all government related work,” Sarah Huckabee Sanders, the White House press secretary, said Monday in response to questions about the emails. “They are further instructed that if they receive work-related communication on personal accounts, they should be forwarded to official email accounts.”

The acknowledgment of private email use came as the White House is responding to a wide-ranging Justice Department request for documents and emails as part of the special counsel investigation into Russian election meddling. The use of private emails has the potential to complicate that effort, but the White House said it was confident in its process. . .

Continue reading.

Indeed the hypocrisy is stunning, but that’s the GOP for you.

Written by LeisureGuy

25 September 2017 at 5:38 pm

These Professors Make More Than a Thousand Bucks an Hour Peddling Mega-Mergers

leave a comment »

Jesse Eisinger and Justin Elliott report in ProPublica:

IF THE GOVERNMENT ENDS UP approving the $85 billion AT&T-Time Warner merger, credit won’t necessarily belong to the executives, bankers, lawyers, and lobbyists pushing for the deal. More likely, it will be due to the professors.

A serial acquirer, AT&T must persuade the government to allow every major deal. Again and again, the company has relied on economists from America’s top universities to make its case before the Justice Department or the Federal Trade Commission. Moonlighting for a consulting firm named Compass Lexecon, they represented AT&T when it bought Centennial, DirecTV, and Leap Wireless; and when it tried unsuccessfully to absorb T-Mobile. And now AT&T and Time Warner have hired three top Compass Lexecon economists to counter criticism that the giant deal would harm consumers and concentrate too much media power in one company.

Today, “in front of the government, in many cases the most important advocate is the economist and lawyers come second,” said James Denvir, an antitrust lawyer at Boies, Schiller.

Economists who specialize in antitrust — affiliated with Chicago, Harvard, Princeton, the University of California, Berkeley, and other prestigious universities — reshaped their field through scholarly work showing that mergers create efficiencies of scale that benefit consumers. But they reap their most lucrative paydays by lending their academic authority to mergers their corporate clients propose. Corporate lawyers hire them from Compass Lexecon and half a dozen other firms to sway the government by documenting that a merger won’t be “anti-competitive”: in other words, that it won’t raise retail prices, stifle innovation, or restrict product offerings. Their optimistic forecasts, though, often turn out to be wrong, and the mergers they champion may be hurting the economy.

Some of the professors earn more than top partners at major law firms. Dennis Carlton, a self-effacing economist at the University of Chicago’s Booth School of Business and one of Compass Lexecon’s experts on the AT&T-Time Warner merger, charges at least $1,350 an hour. In his career, he has made about $100 million, including equity stakes and non-compete payments, ProPublica estimates. Carlton has written reports or testified in favor of dozens of mergers, including those between AT&T-SBC Communications and Comcast-Time Warner, and three airline deals: United-Continental, Southwest-Airtran, and American-US Airways.

American industry is more highly concentrated than at any time since the gilded age. Need a pharmacy? Americans have two main choices. A plane ticket? Four major airlines. They have four choices to buy cell phone service. Soon one company will sell more than a quarter of the quaffs of beer around the world.

Mergers peaked last year at $2 trillion in the U.S. The top 50 companies in a majority of American industries gained share between 1997 and 2012, and “competition may be decreasing in many economic sectors,” President Obama’s Council of Economic Advisers warned in April.

While the impact of this wave of mergers is much debated, prominent economists such as Lawrence Summers and Joseph Stiglitz suggest that it is one important reason why, even as corporate profits hit records, economic growth is slow, wages are stagnant, business formation is halting, and productivity is lagging. “Only the monopoly-power story can convincingly account” for high business profits and low corporate investment, Summers wrote earlier this year.

In addition, politicians such as U.S. Senator Elizabeth Warren have criticized big mergers for giving a handful of companies too much clout. President-elect Trump said in October that his administration would not approve the AT&T-Time Warner merger “because it’s too much concentration of power in the hands of too few.”

During the campaign, Trump didn’t signal what his broader approach to mergers would be. But the early signs are that his administration will weaken antitrust enforcement and strengthen the hand of economists. He selected Joshua Wright, an economist and professor at George Mason’s Antonin Scalia Law School, to lead his transition on antitrust matters. Wright, himself a former consultant for Boston-based Charles River Associates, regularly celebrates mergers in speeches and articles and has supported increasing the influence of economists in assessing monopoly power. “Mergers between competitors do not often lead to market power but do often generate significant benefits for consumers,” he wrote in The New York Times this week.

A late Obama administration push to scrutinize major deals notwithstanding, the government over the past several decades has pulled back on merger enforcement. In part, this shift reflects the influence of Carlton and other economists. Today, lawyers still write the briefs, make the arguments and conduct the trials, but the core arguments are over economists’ models of what will happen if the merger goes ahead.

These complex mathematical formulations carry weight with the government because they purport to be objective. But a ProPublica examination of several marquee deals found that economists sometimes salt away inconvenient data in footnotes and suppress negative findings, stretching the standards of intellectual honesty to promote their clients’ interests.

Earlier this year, a top Justice Department official criticized Compass Lexecon for using “junk science.” ProPublica sent a detailed series of questions to Compass Lexecon for this story. The firm declined to comment on the record.

Even some academic specialists worry that the research companies buy is slanted. “This is not the scientific method,” said Orley Ashenfelter, a Princeton economist known for analyzing the effects of mergers. Referring to one Compass study of an appliance industry deal, he said, “The answer is known in advance, either because you created what the client wanted or the client selected you as the most favorable from whatever group was considered.”

In contrast to their scholarship, the economists’ paid work for corporations rests almost entirely out of the public eye. Even other academics cannot see what they produce on behalf of clients. Their algorithms are shared only with government economists, many of whom have backgrounds in academia and private consulting, and hope to return there. At least seven professors on Compass’s payroll, including Carlton, have served as the top antitrust economist at the Department of Justice. Charles River Associates boasts at least three.

“There are few government functions outside the CIA that are so secretive as the merger review process,” said Seth Bloom, the former general counsel of the Senate Antitrust Subcommittee.

ONE EVENING IN 1977, University of Chicago law professor Richard Posner hosted a colleague from the economics department and a young law student named Andrew Rosenfield at his apartment in Hyde Park. The leading scholar of the “Law and Economics” movement, Posner wanted to apply rigorous math and economics concepts to the real world. “Why not see if there are some consulting opportunities?” he mused. The three of them agreed to form a firm, throwing in $700 for a third each. They called it “Lexecon,” combining the Latin for law with “econ.”

The trio then shopped their services to a dozen law firms, which all turned them down. “If you had to value the firm at the end of the tour, you’d have to say it was zero,” said Rosenfield.

They went back to their academic work. Not too long after, AT&T called Posner to ask if he could consult on its antitrust defense. The government was trying to break up Ma Bell. Posner agreed. So began a long and mutually beneficial relationship between AT&T and Lexecon.

Soon after its founding, Lexecon hired one of Chicago’s most promising young economists: Dennis Carlton. He had grown up in Brighton, Mass., earning degrees from a trifecta of elite local institutions: Boston Latin High School, Harvard, and MIT, where he would later endow a chair. He played basketball in his spare time. “Backaches have temporarily sidelined me from embarking on my second career as a basketball player in the NBA,” he joked in a 40th reunion report to his Harvard classmates in 2012. (After a short interview with ProPublica, Carlton subsequently declined comment, citing client confidentiality.)

Ronald Reagan appointed Posner to the federal bench in 1981. Posner left Lexecon. “Andy and I were young,” Carlton said. “Gee, we wondered: Is the firm going to survive? Not only did it survive, but it did very well.”

Lexecon capitalized on the Eighties merger explosion. M&A was rising to cultural prominence as the domain of swashbucklers. Corporate raiders enlisted renegade lawyers and brash investment bankers to take on stalwart names of American industry.

Behind the scenes, the less-flamboyant economists gained influence. From the time antitrust laws began to be passed, in the late 19th century, until the 1970s, courts and the government had presumed a merger was bad for customers if it resulted in high concentration, measured at thresholds much lower than the market shares for the dominant companies in many sectors today.

Led by University of Chicago theorists, a new group of scholars argued that this approach was overly simplistic. Even if a company dominated its industry, it might lower prices or create offsetting efficiencies, allowing customers more choice or higher quality products. In 1982, William Baxter, Reagan’s first head of the Justice Department antitrust division, codified the requirement that the government use economic models and principles to forecast the effect of mergers.

Lexecon seized the opportunity. “We were not just going to talk about economic theory but show with data that what we were saying could be justified,” Carlton said. By the late 1980s, the top four Lexecon officers were each making $1.5 million a year, according to a Wall Street Journal article.


ANY MERGER OVER a certain dollar size — currently, $78 million — requires government approval. The government passes most mergers without question. On rare occasions, it requests more data from the merging parties. Then the companies often hire consulting firms to produce economic analyses supporting the deal. (Sometimes the government hires its own outside academic.) Even less frequently, the government concludes it can’t approve the merger as proposed. In such cases, the government typically settles with the two companies, requiring some concession, such as sale of a division or product line. Just a handful of times a year, the government will sue to block a merger. Recently, the Obama administration has filed several major suits to block mergers, as companies in already concentrated industries propose bigger and bigger deals. According to a tally from the law firm Dechert, the government challenged a record seven mergers last year out of a total of 10,250.

Recent research supports the classic view that large mergers, by reducing competition, hurt consumers. The 2008 merger between Miller and Coors spurred “an abrupt increase” in beer prices, an academic analysis found this year. . .

Continue reading. There’s a lot more.

The process is broken, Congress is too corrupt to act, and the US is being looted.

Written by LeisureGuy

25 September 2017 at 5:06 pm

How Airline Execs and Politicians Have Made Flying Even More Miserable

leave a comment »

Justin Elliott reports in ProPublica:

Three years ago, the Obama administration unleashed its might on behalf of beleaguered American air travelers, filing suit to block a mega-merger between American Airlines and US Airways. The Justice Department laid out a case that went well beyond one merger.

“Increasing consolidation among large airlines has hurt passengers,” the lawsuit said. “The major airlines have copied each other in raising fares, imposing new fees on travelers, reducing or eliminating service on a number of city pairs, and downgrading amenities.”

The Obama administration itself had helped create that reality by approving two previous mergers in the industry, which had seen nine major players shrink to five in a decade. In the lawsuit, the government was effectively admitting it had been wrong. It was now making a stand.

Then a mere three months later, the government stunned observers by backing down.

It announced a settlement that allowed American and US Airways to form the world’s largest airline in exchange for modest concessions that fell far short of addressing the concerns outlined in the lawsuit.

The Justice Department’s abrupt reversal came after the airlines tapped former Obama administration officials and other well-connected Democrats to launch an intense lobbying campaign, the full extent of which has never been reported.

They used their pull in the administration, including at the White House, and with a high-level friend at the Justice Department, going over the heads of staff prosecutors. And just days after the suit was announced, the airlines turned to Chicago Mayor Rahm Emanuel, Obama’s first White House chief of staff, to help push back against the Justice Department.

Some lawyers and officials who worked on the American-US Airways case now say they were “appalled” by the decision to settle, as one put it.

“It was a gross miscarriage of justice that that case was dropped and an outrage and an example of how our system should not work,” said Tom Horne, the former state attorney general of Arizona, one of seven states that were co-plaintiffs with the federal government.

As a candidate in 2007, President Obama pledged to “reinvigorate antitrust enforcement,” calling that the “American way to make capitalism work for consumers.” Hillary Clinton has recently made similar promises.

But the reversal in the American-US Airways case was part of what antitrust observers see as a string of disappointing decisions by the Obama administration.

“I hoped they would be much more aggressive and much more concerned about increasing concentration and ongoing predatory conduct,” said Thomas Horton, a former Justice Department antitrust attorney now at University of South Dakota law school. “Too often they really took the business side.”

Obama’s antitrust enforcers have been somewhat more aggressive than the Bush administration in challenging mergers. But that has come in the face of a record-breakingwave of often audacious deals. Nor has the Obama administration brought any major cases challenging companies that abuse their monopoly power. It approved three major airline mergers, for example, leaving four companies in control of more than 80 percent of the market.

In the American-US Airways case, Emanuel emerged as one of the deal’s biggest champions. He was in regular contact with the CEOs and lobbyists for both airlines.

“The combination of American Airlines and US Airways creates a better network than either carrier could build on its own,” Emanuel wrote in an October 2013 letter to the Justice Department that other mayors signed onto. “American’s substantial operations throughout the central United States provide critical coverage where US Airways is underdeveloped.”

The letter was an uncanny echo of the airlines’ arguments – for good reason: It was actually written by an American Airlines lobbyist, emails obtained by ProPublica show.

The day after sending the missive, as government lawyers were racing to prepare for trial, Emanuel lunched with the CEOs of American and US Airways at a suite in the St. Regis hotel in Washington. The next stop on his schedule: the White House, for meetings with President Obama and Chief of Staff Denis McDonough. Later that day, Emanuel met with Secretary of Transportation Anthony Foxx, whose agency also had a hand in reviewing the merger. (The White House and Department of Transportation declined to comment on the meetings.)

Meanwhile, the airlines dispatched another valuable asset: An adviser on the deal, Jim Millstein, was both a former high-level Obama administration official at Treasury and a friend of Deputy Attorney General James Cole, the No. 2 at the Justice Department.

Millstein said Cole told him that the government was open to settling the case – a position at odds with the Justice Department’s public stance. The two spoke about the case on social occasions, such as “after finishing a round of golf,” Millstein said in an interview.

The five meetings and phone calls between Millstein and Cole – all within two months in late 2013 – shocked Justice Department staff attorneys who worked on the case, with one describing them as a sign of “raw pressure and political influence.” Cole declined to comment in detail, but said in a statement that “nothing inappropriate occurred.”

As Millstein and Emanuel pressed the administration, the airlines spent $13 million on a phalanx of super-lobbyists, including Heather and Tony Podesta, to marshal support in Washington, records show. Another Democratic lobbyist, Hilary Rosen, also reached out to the White House.

There’s no direct evidence that the lobbying worked. The Justice Department denies the pressure affected its decision-making and the White House said it was not involved. “DOJ enforcement decisions are made independently,” a White House spokesperson said in a statement. “The White House does not play a role in those decisions.”

But the abrupt move to settle was met with a backlash among the team building the case, according to interviews with four lawyers and officials who worked on the case. . .

Continue reading.

Things have gone badly wrong.

Written by LeisureGuy

25 September 2017 at 4:57 pm

Russian operatives used Facebook ads to exploit divisions over black political activism and Muslims

leave a comment »

And you know who fell for it, hook, line, and sinker.

Adam Entous, Craig Timberg, and Elizabeth Dwoskin write in the Washington Post:

The batch of more than 3,000 Russian-bought ads that Facebook is preparing to turn over to Congress shows a deep understanding of social divides in American society, with some ads promoting African-American rights groups including Black Lives Matter and others suggesting that these same groups pose a rising political threat, say people familiar with the covert influence campaign.

The Russian campaign — taking advantage of Facebook’s ability to simultaneously send contrary messages to different groups of users based on their political and demographic characteristics — also sought to sow discord among religious groups. Other ads highlighted support for Democrat Hillary Clinton among Muslim women.

These targeted messages, along with others that have surfaced in recent days, highlight the sophistication of an influence campaign slickly crafted to mimic and infiltrate U.S. political discourse while also seeking to heighten tensions between groups already wary of one another.

The nature and detail of these ads has troubled investigators at Facebook, on Capitol Hill and at the U.S. Justice Department, say people familiar with the advertisements who spoke on the condition of anonymity to share matters still under investigation.

The House and Senate Intelligence committees plan to begin reviewing the Facebook ads in coming weeks as they attempt to untangle the operation and other matters related to Russia’s bid to help elect Trump in 2016.

“Their aim was to sow chaos,” said Sen. Mark R. Warner (D-Va.), vice-chairman of the Senate Intelligence Committee. “In many cases, it was more about voter suppression rather than increasing turnout.”

The top Democrat on the House Intelligence Committee, Rep. Adam Schiff of California, said he hoped the public would be able to review the ad campaign.

“I think the American people should see a representative sample of these ads to see how cynical the Russian were using these ads to sow division within our society,” he said, noting that he had not yet seen the ads but had been briefed on them, including the ones mentioning “things like Black Lives Matter.”

The ads which Facebook found raise troubling questions for a social networking and advertising platform that reaches two billion people each month and offer a rare window into how Russian operatives carried out their information operations during an especially tumultuous period in U.S. politics.

Investigators at Facebook discovered the Russian ads in recent weeks, the company has said, after months of trying in vain to trace disinformation efforts back to Russia. The company has said it had identified at least $100,000 in ads purchased through 470 phony Facebook pages and accounts. Facebook has said this spending represented a tiny fraction of the political advertising on the platform for the 2016 campaign. . .

Continue reading.

Written by LeisureGuy

25 September 2017 at 2:47 pm

Posted in Election, Technology

Jared and Ivanka both used private email servers for official business

leave a comment »

Lock ’em up!!

Jared. Ivanka.

Written by LeisureGuy

25 September 2017 at 2:42 pm

Mueller haunts the West Wing

leave a comment »

Mike Allen and Jonathan Swan write at Axios:

Steve Bannon provoked lots of chatter for telling Charlie Rose on “60 Minutes” that President Trump’s firing of FBI Director James Comey may have been the worst mistake in “modern political history.”

What’s intriguing is the reason he said it: the belief of some close White House allies that special counsel Bob Mueller, whose appointment was triggered by Comey’s ouster, could use events surrounding the firing to make an obstruction of justice case against Trump.

There’s a good reason that Vice President Pence has hired a lawyer, Bannon freaked out about the decision, and Mueller plans to interview a slew of current and former West Wing aides: They were with Trump during those frantic days, and know what he was saying and what was on his mind.

White House aides with legal exposure to these events have quickly reached four conclusions, according to conversations with Jonathan Swan and me:

  1. Mueller is burrowing in hard on the obstruction of justice angle.
  2. The “angry, meandering” draft White House justification for firing Comey — which was never released, but obtained by Mueller — could be used as evidence of Trump’s unvarnished thinking when venting to staff.
  3. Legal fees, with white-collar attorneys charging $1,000 an hour, get cripplingly expensive pretty quick. Watch for outside legal defense funds to pop up quickly.
  4. The investigation’s financial dimensions are worrisome. The focus on Michael Cohen, a Trump lawyer and confidant whose business dealings are intertwined with the president’s, has been particularly troubling for those in Trump’s close orbit. Cohen dealt with some colorful characters. And when plans for the Trump Tower in Moscow are fully picked apart, other questionable Russian characters may be drawn in.

Republicans close to the White House say every sign by Mueller — from his hiring of Mafia and money-laundering experts to his aggressive pursuit of witnesses and evidence — is that he’s going for the kill.

  • The Wall Street Journal reports on the front page today that outside Trump lawyers “earlier this summer concluded that Jared Kushner should step down … because of possible legal complications … and aired concerns about him to the president.” Kushner has since defended himself on Capitol Hill.

Be smart: Trump allies fret that . . .

Continue reading.

Written by LeisureGuy

25 September 2017 at 1:00 pm

The story behind the lyrics of “The Star-Spangled Banner”

leave a comment »

Full disclosure: Francis Scott Key, who wrote the lyrics, is like me an alumnus of St. John’s College in Annapolis MD.

Meg Fairfax Fielding posts on Facebook:

To everyone sharing the video about the national anthem, please be aware that there are numerous inaccuracies in it. Actually, most of the main facts are flat out wrong.

1. It was the War of 1812, not the Revolutionary War — there were 15 states, not 13 colonies.

2. There was no ultimatum to Baltimore, nor to the U.S., as this fellow describes it.

3. Key negotiated for the release of one man, Dr. Beanes. There was no brig full of U.S. prisoners.

4. It’s Fort McHenry, not “Henry.” The fort was named after James McHenry, a physician who was one of the foreign-born signers of the Constitution, who had assisted Generals Washington and Lafayette during the American Revolution, and who had served as Secretary of War to Presidents Washington and Adams.

5. Fort McHenry was a military institution, a fort defending Baltimore Harbor. It was not a refuge for women and children.

6. The nation would not have reverted to British rule had Fort McHenry fallen.

7. There were 50 ships, not hundreds. Most of them were rafts with guns on them. Baltimore Harbor is an arm of Chesapeake Bay; Fort McHenry is not on the ocean.

8. The battle started in daylight.

9. Bogus quote: George Washington never said “What sets the American Christian apart from all other people in this world is he will die on his feet before he will live on his knees.” Tough words. Spanish Civil War. Not George Washington. I particularly hate it when people make up stuff to put in the mouths of great men. Washington left his diaries and considerably more — we don’t have to make up inspiring stuff, and when we do, we get it wrong.

10. The battle was not over the flag; the British were trying to take Baltimore, one of America’s great ports. At this point, they rather needed to since the Baltimore militia had stunned and stopped the ground troops east of the city. There’s enough American bravery and pluck in this part of the story to merit no exaggerations.

11. To the best of our knowledge, the British did not specifically target the flag.

12. There were about 28 American casualties. Bodies of the dead were not used to hold up the flag pole — a 42 by 30 foot flag has to be on a well-anchored pole, not held up by a few dead bodies stacked around it.

And note that the lyrics explicitly celebrate the “free” (i.e., not slaves), and includes the lines:

No refuge could save the hireling and slave
From the terror of flight or the gloom of the grave . . .

Written by LeisureGuy

25 September 2017 at 12:30 pm

Posted in Daily life

Tagged with

%d bloggers like this: