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Archive for the ‘Obama administration’ Category

How the ICE is working to strip citizenship from naturalized citizens

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Eoin Higggins reports in The Intercept:

FOR 10 YEARS, U.S. Immigration and Customs Enforcement’s investigative office has worked to keep its internal handbook out of American courts. The handbook could have been used in court to show how ICE’s push to lead on denaturalization cases stands in contrast to the language of federal law governing the process, an immigration lawyer said. “We could have used it as an exhibit in a motion to dismiss” in previous denaturalization cases, said Philip Smith, an immigration attorney from Portland, Oregon, noting the contrast.

The handbook, which was issued on January 15, 2008, and published Wednesday by the independent media outlet Unicorn Riot, makes clear that the priority for ICE’s investigative division, Homeland Security Investigations, or HSI, in denaturalization proceedings is to use the most efficient means possible to fulfill a single-minded goal: leveraging the bureaucratic process to strip citizenship from naturalized Americans.

“It’s a manual for the worst outcome” with respect to investigation targets, said Alaska immigration lawyer Margaret Stock in an interview on Tuesday. That’s not unique to ICE, Stock added — it’s how the entire U.S. justice system operates. “Their objective is to inflict the most pain as possible, as efficiently as possible,” Stock said. “They feel they’re doing their job correctly if the government wins — not if justice is done.”

The 20-page manual instructs agents on the particulars of denaturalization investigations. Documents obtained by the Freedom of Information Act-driven clearinghouse Government Attic indicate that the denaturalization investigations handbook was used through at least 2016; the handbook appears in the table of contents for HSI’s 2016 Special Agent’s Manual, sandwiched between chapters on cybercrime and fraud. “There’s no reason to believe the document is not authentic,” said Matthew Bourke, a public affairs officer with ICE. “ICE-HSI does manage a special agent handbook on denaturalization investigations.”

Last year, The Intercept obtained and reported on HSI’s guidelines for asset forfeiture.

The denaturalization handbook shows how the federal government pursues denaturalization against naturalized citizens and has instructions on how to prosecute cases efficiently to strip citizenship as quickly as possible.

Smith, the immigration lawyer, said the language of the manual — where ICE plays a chief role in pushing denaturalization — stands in contrast to the civil statute that allows for stripping Americans’ citizenship. “It shall be the duty of the United States attorneys for the respective districts, upon affidavit showing good cause therefor, to institute proceedings in any district court of the United States in the judicial district in which the naturalized citizen may reside at the time of bringing suit,” the statute reads.

The handbook, said Smith, shows how ICE is taking the power of instituting procedures away from federal prosecutors assigned to those geographic areas. “We believe Congress meant to have the case evaluated by prosecutors in the jurisdiction, the community,” Smith said. ICE declined to respond on the purported disconnect between its manual’s emphasis on ICE-led denaturalization, and the statute’s emphasis on letting federal prosecutors take the lead.

DESPITE THE NATIONAL debates that have arisen with President Donald Trump’s approach to immigration, denaturalization receives scant attention. It’s one of the many tools available to the immigration enforcement bureaucracy, but because it strips citizenship through a slow and deliberative process — and not the surprise raids by armored law enforcement officers — denaturalization isn’t synonymous with much of the reporting around ICE’s behavior.

Foreign nationals can become naturalized citizens through processes defined by the Immigration and Nationality Act. The prerequisites include filling out a number of forms, proving good moral character, passing a citizenship test, and other requirements. “In general,” the U.S. Citizenship and Immigration Services’ Policy Manual Citizenship and Naturalization Guidance reads, “an applicant files a naturalization application and then USCIS grants citizenship after adjudicating the application.”

Denaturalization uses case law and the bureaucratic process to methodically take that citizenship away and then, when possible, deport those whose status has been reverted to that of a visa holder. As a tactic, denaturalization is often politically motivated, said Stock, and targeted toward particular nationalities. “You don’t see a lot of, say, Canadians or Brits being denaturalized,” said Stock.

“You don’t see a lot of, say, Canadians or Brits being denaturalized.”

Immigration attorney Lance Curtright, who practices in San Antonio, Texas, told The Intercept that denaturalization can take two forms: civil and criminal. Criminal denaturalization is usually reserved for those who committed fraud to obtain citizenship for criminal activity — crimes involving terror, drugs, and the like — and carry jail terms of up to 25 years. Civil denaturalization is based on a lower standard of proof and doesn’t result in incarceration. “They’re different methods,” said Curtright, who added that he had noticed that the government pursuing more civil cases in recent months.

The handbook runs through the duties of each agent and the different types of infractions that can result in denaturalization proceedings. And it’s nowhere clearer than in the section of the manual that deals with “Case Strategy.” In this section, ICE instructs its investigative officers to push for charges that will lead to automatic denaturalization, rather than those charges which would require a separate process.

“Case agents,” the manual reads, “should encourage the U.S. Attorney’s Office prosecuting a case involving naturalization fraud or illegality to include a charge of ‘Procurement of Citizenship or Naturalization Unlawfully’ under 18 U.S.C. § 1425 because, upon conviction, the court is required to revoke the defendant’s citizenship.”

“On the other hand,” the manual goes on, “a conviction for ‘False Statements’ under 18 U.S.C. § 1001 does not require the automatic revocation of a defendant’s citizenship and will result in the U.S. Government having to engage in a separate denaturalization prosecution.”

This centralization of the denaturalization process puts the onus for instituting proceedings on HSI agents. That’s indicative of a push to take away the authority provided for under the law to U.S. attorneys working in those jurisdictions, said Smith. He said that the way things are now, cases are put together by special agents in the HSI and then given to U.S. attorneys. “We don’t think it is in keeping with the statute,” said Smith.

The strategy section continues, warning agents that settling for civil infractions carries the risk that the targets of investigations may be able to retain citizenship. If the U.S. Attorney’s Office can’t be convinced to prosecute under criminal infractions, the handbook says, a settlement should be reached, if possible, with the defendant, including civil denaturalization — though that’s not ideal: “Civil denaturalization under 8 U.S.C. § 1451(a) may not result in a deportable charge against the defendant.”

Stock explained that by combining charges, the government was setting the case up to take care of everything all at once with the end goal of deportation. It’s brutal efficiency, she told The Intercept: “They want to go for the jugular.” . . .

Continue reading.

The US continues to move in what I consider to be a bad direction.

Written by LeisureGuy

18 February 2018 at 8:13 am

Life as a New York Times Reporter in the Shadow of the War on Terror

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James Risen writes in The Intercept:

I was sitting in the nearly empty restaurant of the Westin Hotel in Alexandria, Virginia, getting ready for a showdown with the federal government that I had been trying to avoid for more than seven years. The Obama administration was demanding that I reveal the confidential sources I had relied on for a chapter about a botched CIA operation in my 2006 book, “State of War.” I had also written about the CIA operation for the New York Times, but the paper’s editors had suppressed the story at the government’s request. It wasn’t the only time they had done so.

BUNDLED AGAINST THE freezing wind, my lawyers and I were about to reach the courthouse door when two news photographers launched into a perp-walk shoot. As a reporter, I had witnessed this classic scene dozens of times, watching in bemusement from the sidelines while frenetic photographers and TV crews did their business. I never thought I would be the perp, facing those whirring cameras.

As I walked past the photographers into the courthouse that morning in January 2015, I saw a group of reporters, some of whom I knew personally. They were here to cover my case, and now they were waiting and watching me. I felt isolated and alone.

My lawyers and I took over a cramped conference room just outside the courtroom of U.S. District Judge Leonie Brinkema, where we waited for her to begin the pretrial hearing that would determine my fate. My lawyers had been working with me on this case for so many years that they now felt more like friends. We often engaged in gallows humor about what it was going to be like for me once I went to jail. But they had used all their skills to make sure that didn’t happen and had even managed to keep me out of a courtroom and away from any questioning by federal prosecutors.

Until now.

My case was part of a broader crackdown on reporters and whistleblowers that had begun during the presidency of George W. Bush and continued far more aggressively under the Obama administration, which had already prosecuted more leak cases than all previous administrations combined. Obama officials seemed determined to use criminal leak investigations to limit reporting on national security. But the crackdown on leaks only applied to low-level dissenters; top officials caught up in leak investigations, like former CIA Director David Petraeus, were still treated with kid gloves.

Initially, I had succeeded in the courts, surprising many legal experts. In the U.S. District Court for the Eastern District of Virginia, Brinkema had sided with me when the government repeatedly subpoenaed me to testify before a grand jury. She had ruled in my favor again by quashing a trial subpoena in the case of Jeffrey Sterling, a former CIA officer who the government accused of being a source for the story about the ill-fated CIA operation. In her rulings, Brinkema determined that there was a “reporter’s privilege” — at least a limited one — under the First Amendment that gave journalists the right to protect their sources, much as clients and patients can shield their private communications with lawyers and doctors.

But the Obama administration appealed her 2011 ruling quashing the trial subpoena, and in 2013, the 4th Circuit Court of Appeals, in a split decision, sided with the administration, ruling that there was no such thing as a reporter’s privilege. In 2014, the Supreme Court refused to hear my appeal, allowing the 4th Circuit ruling to stand. Now there was nothing legally stopping the Justice Department from forcing me to either reveal my sources or be jailed for contempt of court.

But even as I was losing in the courts, I was gaining ground in the court of public opinion. My decision to go to the Supreme Court had captured the attention of the nation’s political and media classes. Instead of ignoring the case, as they had for years, the national media now framed it as a major constitutional battle over press freedom.

That morning in Alexandria, my lawyers and I learned that the prosecutors were frustrated by my writing style. In “State of War: The Secret History of the CIA and the Bush Administration,” I didn’t include attribution for many passages. I didn’t explicitly say where I was getting my information, and I didn’t identify what information was classified and what wasn’t. That had been a conscious decision; I didn’t want to interrupt the narrative flow of the book with phrases explaining how I knew each fact, and I didn’t want to explicitly say how I had obtained so much sensitive information. If prosecutors couldn’t point to specific passages to prove I had relied on confidential sources who gave me classified information, their criminal case against Sterling might fall apart.

When I walked into the courtroom that morning, I thought the prosecutors might demand that I publicly identify specific passages in my book where I had relied on classified information and confidential sources. If I didn’t comply, they could ask the judge to hold me in contempt and send me to jail.

I was worried, but I felt certain that the hearing would somehow complete the long, strange arc I had been living as a national security investigative reporter for the past 20 years. As I took the stand, I thought about how I had ended up here, how much press freedom had been lost, and how drastically the job of national security reporting had changed in the post-9/11 era. . .

Continue reading.

There’s a lot more and it is intriguing.

Written by LeisureGuy

4 January 2018 at 11:30 am

Journalistic malpractice: Who got NATO members to contribute more?

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Journalists can be very lazy, and Kevin Drum has a great example. Susan Glasser in Politico credits Donald Trump with causing NATO members to increase their contributions. Susan Glasser is flat-out wrong. From Drum’s post:

There’s more. Read the whole thing.

Written by LeisureGuy

2 January 2018 at 2:06 pm

DEA agents say a huge opioid case ended in a whimper

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Lenny Bernstein and Scott Higham report in the Washington Post:

After two years of painstaking investigation, David Schiller and the rest of the Drug Enforcement Administration team he supervised were ready to move on the biggest opioid distribution case in U.S. history.

The team, based out of the DEA’s Denver field division, had been examining the operations of the nation’s largest drug company, McKesson Corp. By 2014, investigators said they could show that the company had failed to report suspicious orders involving millions of highly addictive painkillers sent to drugstores from Sacramento, Calif., to Lakeland, Fla. Some of those went to corrupt pharmacies that supplied drug rings.

The investigators were ready to come down hard on the fifth-largest public corporation in America, according to a joint investigation by The Washington Post and “60 Minutes.”

The DEA team — nine field divisions working with 12 U.S. attorney’s offices across 11 states — wanted to revoke registrations to distribute controlled substances at some of McKesson’s 30 drug warehouses. Schiller and members of his team wanted to fine the company more than $1 billion. More than anything else, they wanted to bring the first-ever criminal case against a drug distribution company, maybe even walk an executive in handcuffs out of McKesson’s towering San Francisco headquarters to send a message to the rest of the industry.

“This is the best case we’ve ever had against a major distributor in the history of the Drug Enforcement Administration,” said Schiller, who recently retired as assistant special agent in charge of DEA’s Denver field division after a 30-year career with the agency. “I said, ‘How do we not go after the number one organization?’ ”

But it didn’t work out that way.

Instead, top attorneys at the DEA and the Justice Department struck a deal earlier this year with the corporation and its powerful lawyers, an agreement that was far more lenient than the field division wanted, according to interviews and internal government documents. Although the agents and investigators said they had plenty of evidence and wanted criminal charges, they were unable to convince the U.S. attorney in Denver that they had enough to bring a case.

Discussions about charges never became part of the negotiations between the government lawyers in Washington and the company.

“It was insulting,” Schiller said. “Morale has been broken because of it.”

The result illustrates the long-standing conflict between drug investigators, who have taken an aggressive approach to a prescription opioid epidemic that killed nearly 200,000 people between 2000 and 2016, and the government attorneys who handle those cases at the DEA and the Justice Department.

None of McKesson’s warehouses would lose their DEA registrations. The company, a second-time offender, had promised in 2008 to be more diligent about the diversion of its pills to the street. It ultimately agreed to temporarily suspend controlled substance shipments at four distribution centers and pay a $150 million fine.

“Within the ranks, we feel like our system was hijacked,” said Helen Kaupang, a DEA investigator and supervisor for 29 years who worked on the McKesson case in Denver before retiring in September.

While the fine set a record for drug distributors, it is only about $50 million more than the compensation last year for McKesson board chairman and chief executive John H. Hammergren, the nation’s third-highest-paid chief executive. McKesson has 76,000 employees and revenue of almost $200 billion a year, about the same as ExxonMobil.

The Justice Department declined repeated requests for comment.

“The McKesson settlement was a groundbreaking conclusion to a successful multi-district investigation into the role of a distributor’s failure to detect and report suspicious orders, many of which were tied to independent and small chain pharmacy customers ordering opioid medications,” the DEA said in a statement. “More importantly, McKesson accepted responsibility and accepted terms beyond the requirements of the [Controlled Substances Act].”

A senior agency official, who spoke on the condition of anonymity, said the fine was a significant penalty, the company agreed to an independent monitor, and the case prompted McKesson and other distributors to be more diligent about reporting suspicious orders.

“We could have fined them out of existence, or indicted the company and put them out of business,” the official said. “I’d rather have one of the largest drug distributors be the poster child for detection and reporting of suspicious orders.”

At the time of the settlement, McKesson said it had instituted “significant changes” to its program designed to flag suspicious orders of narcotics. “We continue to significantly enhance the procedures and safeguards across our distribution network to help curtail prescription drug diversion while ensuring patient access to needed medications,” Hammergren said in a statement.

The company also has said that addressing the opioid problem requires the cooperation of everyone involved — doctors, pharmacists, distributors and manufacturers. . .

Continue reading.

Written by LeisureGuy

17 December 2017 at 7:29 am

Google’s true origin partly lies in CIA and NSA research grants for mass surveillance

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Jeff Nesbit, former director of legislative and public affairs, National Science Foundation, writes in Quartz:

Two decades ago, the US intelligence community worked closely with Silicon Valley in an effort to track citizens in cyberspace. And Google is at the heart of that origin story. Some of the research that led to Google’s ambitious creation was funded and coordinated by a research group established by the intelligence community to find ways to track individuals and groups online.

The intelligence community hoped that the nation’s leading computer scientists could take non-classified information and user data, combine it with what would become known as the internet, and begin to create for-profit, commercial enterprises to suit the needs of both the intelligence community and the public. They hoped to direct the supercomputing revolution from the start in order to make sense of what millions of human beings did inside this digital information network. That collaboration has made a comprehensive public-private mass surveillance state possible today.

The story of the deliberate creation of the modern mass-surveillance state includes elements of Google’s surprising, and largely unknown, origin. It is a somewhat different creation story than the one the public has heard, and explains what Google cofounders Sergey Brin and Larry Page set out to build, and why.

But this isn’t just the origin story of Google: It’s the origin story of the mass-surveillance state, and the government money that funded it.

Backstory: The intelligence community and Silicon Valley

In the mid 1990s, the intelligence community in America began to realize that they had an opportunity. The supercomputing community was just beginning to migrate from university settings into the private sector, led by investments from a place that would come to be known as Silicon Valley.

A digital revolution was underway: one that would transform the world of data gathering and how we make sense of massive amounts of information. The intelligence community wanted to shape Silicon Valley’s supercomputing efforts at their inception so they would be useful for both military and homeland security purposes. Could this supercomputing network, which would become capable of storing terabytes of information, make intelligent sense of the digital trail that human beings leave behind?

Answering this question was of great interest to the intelligence community.

Intelligence-gathering may have been their world, but the Central Intelligence Agency (CIA) and the National Security Agency (NSA) had come to realize that their future was likely to be profoundly shaped outside the government. It was at a time when military and intelligence budgets within the Clinton administration were in jeopardy, and the private sector had vast resources at their disposal. If the intelligence community wanted to conduct mass surveillance for national security purposes, it would require cooperation between the government and the emerging supercomputing companies.

To do this, they began reaching out to the scientists at American universities who were creating this supercomputing revolution. These scientists were developing ways to do what no single group of human beings sitting at work stations in the NSA and the CIA could ever hope to do: gather huge amounts of data and make intelligent sense of it.

A rich history of the governments science funding

There was already a long history of collaboration between America’s best scientists and the intelligence community, from the creation of the atomic bomb and satellite technology to efforts to put a man on the moon.

In fact, the internet itself was created because of an intelligence effort: In the 1970s, the agency responsible for developing emerging technologies for military, intelligence, and national security purposes—the Defense Advanced Research Projects Agency (DARPA)—linked four supercomputers to handle massive data transfers. It handed the operations off to the National Science Foundation (NSF) a decade or so later, which proliferated the network across thousands of universities and, eventually, the public, thus creating the architecture and scaffolding of the World Wide Web.

Silicon Valley was no different. By the mid 1990s, the intelligence community was seeding funding to the most promising supercomputing efforts across academia, guiding the creation of efforts to make massive amounts of information useful for both the private sector as well as the intelligence community.

They funded these computer scientists through an unclassified, highly compartmentalized program that was managed for the CIA and the NSA by large military and intelligence contractors. It was called the Massive Digital Data Systems (MDDS) project. . .

Continue reading. There’s a lot more, and it is both interesting and disturbing.

Written by LeisureGuy

15 December 2017 at 10:17 am

NSA Secretly Helped Convict Defendants In U.S. Courts, Classified Documents Reveal

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Trevor Aaronson reports in The Intercept:

Fazliddin Kurbanov is a barrel-chested man from Uzbekistan who came to the United States in 2009, when he was in his late 20s. A Christian who had converted from Islam, Kurbanov arrived as a refugee and spoke little English. Resettled in Boise, Idaho, he rented an apartment, worked odd jobs, and was studying to be a truck driver.

But about three years after entering the U.S., around the time he converted back to Islam, Kurbanov was placed under FBI surveillance. According to emails and internet chat logs obtained by the government, Kurbanov was disgusted by having seen Americans burn the Quran and by reports that an American soldier had tried to rape a Muslim girl. “My entire life, everything, changed,” Kurbanov wrote in a July 31, 2012 email.

After the FBI assigned one informant to live with him and another informant to attend his truck-driving school, Kurbanov was arrested in May 2013. Prosecutors accused him of providing material support to the Islamic Movement of Uzbekistan and possessing bomb-making materials.

During Kurbanov’s trial, the government notified him that his conversations with an alleged Islamic Movement of Uzbekistan associate based in Pakistan had been intercepted. The spying, federal prosecutors said, had been authorized under the Foreign Intelligence Surveillance Act of 1978, which regulates the monitoring of agents of foreign governments and terrorist organizations. Kurbanov was convicted at trial and sentenced to 25 years in prison, after which he’ll be deported to Uzbekistan. He is an apparent success story for U.S. counterterrorism officials. If there was any doubt about Kurbanov’s propensity for violence, he eliminated it by stabbing a prison warden in California, an act for which he is now facing additional charges.

But Justice Department lawyers gained their conviction against Kurbanov after failing to disclose a legally significant fact: Kurbanov’s conversations with his alleged terrorist associate had been captured through PRISM, a National Security Agency mass surveillance program whose existence was revealed in documents provided by whistleblower Edward Snowden. Under PRISM, the government obtains communications directly from at least eight large technology companies without the need for warrants, a type of practice authorized in 2008, when Congress provided new surveillance powers under FISA.

While traditional FISA authority permits spying on a particular person or group through warrants issued by the secret Foreign Intelligence Surveillance Court, under the new powers, codified in FISA Section 702, monitoring is approved in bulk by the court through what is essentially a recipe for mass surveillance. Once approved, such a recipe can be used against thousands of targets. Under Section 702 authority, the NSA is currently monitoring digital communications of more than 100,000 people; it swept up an estimated 250 million internet communications each year as of a 2011 Foreign Intelligence Surveillance Court opinion. The FBI frequently searches Section 702 databases when it opens national security and domestic criminal “assessments,” precursors to full investigations.

According to a slide in an NSA presentation, provided by Snowden and published for the first time today by The Intercept, the interception of Kurbanov’s conversations was a “Reporting Highlight” for PRISM. The document indicates that the NSA captured Kurbanov’s Skype conversations from October 2012 through April 2013, roughly the same period the FBI was investigating him with undercover informants. It further details how an NSA unit in April 2013 issued a report describing “how Kurbanov believed he was under surveillance (which he is by the FBI) but was cautiously continuing his work, which was not specified — could be raising money for the IMU or explosive testing.” The alleged terrorist associate with whom Kurbanov was communicating “wanted Kurbanov to set this work in motion, probably related to sending money back to the IMU,” the document added.

The government is obligated to disclose to criminal defendants when information against them originates from Section 702 reporting, but federal prosecutors did not do so in Kurbanov’s case. In fact, when Kurbanov’s lawyers demanded disclosure of FISA-related evidence and the suppression of that evidence, Attorney General Eric Holder asserted national security privilege, claiming in a declaration that disclosure of FISA information would “harm the national security of the United States.” Kurbanov’s lawyer, Chuck Peterson, declined to comment about the government’s use of Section 702 surveillance against his client.

Kurbanov does not appear to be the only defendant kept in the dark about how warrantless surveillance was used against him. A nationwide review of federal court records by The Intercept found that of 75 terrorism defendants notified of some type of FISA spying since Section 702 became law, just 10 received notice of Section 702 surveillance. And yet Section 702 was credited with “well over 100 arrests on terrorism-related offenses” in a July 2014 report from the Privacy and Civil Liberties Oversight Board, the federal entity created to oversee intelligence authorities granted in the wake of the 9/11 attacks. Additional documents from Snowden, previously unpublished and dated before the Kurbanov case, provide further examples of how NSA intelligence repeatedly played an undisclosed role in bringing accused terrorists to trial in U.S. courts over the past decade and a half. They also reveal an instance in which the NSA incorrectly identified a U.S. citizen as a foreign target of a FISA warrant.

Civil liberties advocates have long suspected that the Justice Department is underreporting Section 702 cases in order to limit court challenges to the controversial law. . .

Continue reading.

This article is the seventh in a series that The Intercept has been publishing. The full list to date:

Part 1: More Than 400 People Convicted of Terrorism in the U.S. Have Been Released Since 9/11

Part 2: Terrorism Defendants With Concrete Ties to Violent Extremists Leverage Their Connections to Avoid Prison

Part 3: FBI Stings Zero In on ISIS Sympathizers. Few Have Terrorist Links.

Part 4: The Government’s Own Data Shows Country of Origin Is a Poor Predictor of Terrorist Threat

Part 5: The U.S. Has Released 417 Alleged Terrorists Since 9/11. The Latest Owned an Islamic Bookstore.

Part 6: The FBI Pressured a Lonely Young Man Into a Bomb Plot. He Tried to Back Out. Now He’s Serving Life in Prison.

Part 7: NSA Secretly Helped Convict Defendants in U.S. Courts, Classified Documents Reveal

Written by LeisureGuy

2 December 2017 at 11:05 am

No Protection for Protectors: The GOP effort to kill the Consumer Financial Protection Bureau

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Gary Rivlin and Susan Antilla report in The Intercept:

Shortly after 10:00 p.m. on a Tuesday in late October, Vice President Mike Pence was summoned to the Senate floor. The Consumer Financial Protection Bureau had finalized a landmark new rule in July banning the forced arbitration provisions that banks and credit card companies commonly tuck into the fine print of agreements, barring their customers from joining class-action suits. House Republicans quickly voted to nullify the new rule, but weeks later, with a deadline looming, it was still unclear if the Senate would act in time. After intense pressure from industry and the Trump administration, Majority Leader Mitch McConnell was finally able to muster 50 votes, and Pence was parachuted in to break a 50-50 tie. Politico called the vote “a blow to the Consumer Financial Protection Bureau” and “Republicans’ most far-reaching victory yet this year in their effort to roll back financial regulations.” CFPB Director Richard Cordray was even more blunt: “Wall Street won and ordinary people lost.”

The rule’s spectacular defeat marked a rare Wall Street victory over an agency created by Dodd-Frank, the sweeping financial reform law Barack Obama signed in 2010. The CFPB was barely five years old when Donald Trump was elected, promising to “do a number” on financial regulations. Just weeks into the new presidency, Sen. Ted Cruz declared the CFPB “an out-of-control bureaucracy” and introduced a one-page bill to abolish it outright. McConnell, then minority leader, had told a gathering of bankers in 2013, “If I had my way, we wouldn’t have the agency at all.” A dead or severely injured CFPB seemed a certainty in those early days. If nothing else, surely Cordray would get pink-slipped. “It’s time to fire King Richard,” exclaimed Sen. Ben Sasse, R-Neb., shortly before Trump’s inauguration.

Yet Cordray is departing on his own terms, amid speculation that he will run for governor of Ohio. He announced on Wednesday that he expects to step down before the end of the month, and when he does, he’ll leave behind a vibrant, if profoundly embattled, agency.

His departure will be “a huge loss,” said Lisa Donner, executive director of Americans for Financial Reform. If Trump appoints a new director who is indifferent, or even hostile, to consumer issues, she said, “It will be incredibly costly to the American public.”

This past summer, Cheklist, a trade magazine for check cashers and payday lenders, published a cover story about the frustration roiling fringe financial players. The CFPB was still a “nettlesome bureau,” its editor wrote, and not a single bill aimed at weakening the bureau had reached the president’s desk. Meanwhile, its aggressive enforcement actions against debt collectorscredit repair companies, and online payday lenders were continuing unabated. Just three weeks before Congress reversed the arbitration rule, the CFPB finalized another new rule that tightened restrictions around high-interest, small-dollar loans to stop what Cordray called “payday debt traps.”

Yet it’s not just smaller financial players who have felt cheated over the past year. Richard Hunt, who has been paid more than $1 million a year  by the Consumer Bankers Association, a trade group representing the country’s largest banks, including Wells Fargo, Bank of America, and JPMorgan Chase, expressed delight after the Senate killed the “ill-conceived” ban on mandatory arbitration clauses. But mostly, his organization has been left expressing disappointment. Thoughts of halting the CFPB have been replaced by angry pronouncements about its unregulated powers. “It’s a fact,” Hunt said in an interview. “It’s the most unaccountable agency in our government, period.”

In fact, the CFPB has emerged as that rare beast — a fast-moving agency that actually chalks up wins for average Americans. By the end of 2016, shortly before Trump took office, the 5 1/2 -year-old bureau’s enforcement actions against everyone from the country’s biggest banks to small-time debt collectors had already returned $11.9 billion to 29 million consumers. The CFPB had created a public database of consumer complaints against banks and other lenders, and had issued new rules governing everything from mortgages to student loans to the prepaid cards that millions of “unbanked” Americans carry in their wallets. A year ago, the bureau finalized new rules giving prepaid customers some of the same protections enjoyed by those who use credit cards. Pressure from the bureau also resulted in the end of several onerous practices by lenders, such as demanding full repayment on student loans if the parent who co-signed the loan died.

Through its complaint database, the CFPB has secured redress for more than 160,000 individual complainants, such as Gene DeSantis, a former TD Bank customer near Albany, New York. DeSantis, a consumer lawyer himself, nevertheless registered one of the 800,000-plus complaints the CFPB has received. While he was away for the winter, DeSantis had mail forwarded to his Utah home. But TD, he found, does not forward its bills unless a customer contacts the bank directly, even when a customer like DeSantis has arranged for the post office to do so, and so he missed a payment. After a surprise call from a debt collector, DeSantis said he called customer service but “never got anywhere.” Meanwhile, his late charges ballooned to $235 on his $136 missed payment. “If a person like me is rendered helpless, God forbid what the average person faces,” DeSantis said. Within a week of filing his CFPB complaint, TD dropped interest and penalties. (A TD spokesperson declined to comment on the bank’s refusal to waive the fees until the CFPB got involved.)

“Because of the bureau,” said Mike Calhoun, president of the Center for Responsible Lending, “we’ve gone from, ‘Where does it say I can’t do that?’ to ‘You have a duty to treat customers fairly.’”

Even without Cordray at the helm, the problem that confronts Hunt and his frenemies running other financial industry trade associations is that the CFPB is simply too popular to eliminate. A 2017 poll by Americans for Financial Reform and the Center for Responsible Lending showed that 78 percent of likely voters believe we need tough rules and enforcement to prevent another financial crisis. Even among Republicans the ratio was 2-to-1. A poll conducted at the end of 2016 showed that, by that same 2-to-1 margin, Trump voters want the bureau left alone or strengthened. Its popularity seems to be one reason the White House has not waged the frontal war on the CFPB that its allies so sorely wanted. With Wells Fargo and Equifax exploding in scandal and their CEOs marched before Congress, anger toward Wall Street is almost as strong on the right as it is on the left. How, in that context, do you shut down an agency called the Consumer Financial Protection Bureau?

Industry’s answer has been a multimillion dollar, multi-front battle to discredit and defang the bureau, a war declared even before the enemy officially existed. Almost immediately after Dodd-Frank became law, a  . . .

Continue reading. There’s a lot more. It’s a lengthy and well-written article giving a history of the effort, strongly resisted by the GOP, to protect consumers.

Written by LeisureGuy

18 November 2017 at 8:51 am

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