Jan. 6 panel to release criminal referrals Monday

The committee investigating the Jan. 6, 2021, attack on the U.S. Capitol will hold its final event on Monday, during which it will release publicly its list of criminal referrals and vote to publish its final report two days later.

Chairman Bennie Thompson (D-Miss.) told reporters Tuesday that the committee has escalated its timeline for a public-facing event that will cap its more than yearlong investigation.

“We looked at the schedule, and it appears we can complete our work a little bit before that. So why not get it to the public as quick as we can,” he said.

Thompson said the panel has not finalized the referrals but is considering “five or six categories,” with the committee flagging behavior for entities such as the Justice Department, the House Ethics Committee and professional associations including bar associations.

“Some referrals go one place. Some go another,” he said.

While the committee’s final meeting was set to be Dec. 21, the panel will instead release its final report that day.

The criminal referrals are expected to walk through what laws the committee alleges were violated in the plot leading up to the attack by a group that could include former President Trump, White House leaders like chief of staff Mark Meadows, and attorneys advising Trump like Rudy Giuliani and John Eastman. Jeffrey Clark, a DOJ attorney Trump weighed installing as attorney general to forward his baseless claims into voter fraud, may also be on the list.

It would be up to the Justice Department to determine whether it wishes to pursue any prosecution based on the committee’s recommendations.

The panel has hinted the GOP lawmakers who rebuffed its subpoenas could be referred to the House Ethics Committee, often criticized for failing to do more aggressive policing of its members.

Still, it may be the only option for the panel to address the subpoenaes that were ignored by House Minority Leader Kevin McCarthy (Calif.) and Reps. Scott Perry (Pa.), Jim Jordan (Ohio), Andy Biggs (Ariz.) and Mo Brooks (Ala.). 

Rep. Jamie Raskin (D-Md.), one of the Jan. 6 panel’s members, previously said the constitution “makes it clear that Congress doesn’t hold members of Congress accountable in the judiciary or other places in the government.” 

The panel could also make referrals to bar associations for the numerous lawyers that aided Trump in challenging the outcome of the 2020 election, with some already facing penalties for making false claims in court about baseless allegations of voter fraud.

Giuliani earlier this month took the stand before the District of Columbia Bar in a disciplinary hearing before its Board on Professional Responsibility that could result in the loss of his law license. Giuliani has already has his New York law license suspended, which he is appealing.

Clark is likewise facing disciplinary action before the board.

And Sidney Powell, another attorney for the Trump campaign, is facing the loss of her law license in Texas.

Updated at 4:07 p.m.

Source: TEST FEED1

McConnell blames Trump for 'candidate quality' issues in midterms

window.loadAnvato({“mcp”:”LIN”,”width”:”100%”,”height”:”100%”,”video”:”8229137″,”autoplay”:false,”expect_preroll”:true,”pInstance”:”p1″,”plugins”:{“comscore”:{“clientId”:”6036439″,”c3″:”thehill.com”,”version”:”5.2.0″,”useDerivedMetadata”:true,”mapping”:{“c3″:”thehill.com”,”ns_st_st”:”hill”,”ns_st_pu”:”Nexstar”,”ns_st_ge”:”TheHill.com”,”cs_ucfr”:””}},”dfp”:{“adTagUrl”:”https://pubads.g.doubleclick.net/gampad/ads?sz=1×1000&iu=/5678/nx.thehill&ciu_szs=300×250&impl=s&gdfp_req=1&env=vp&output=vmap&unviewed_position_start=1&ad_rule=1&description_url=https://thehill.com/feed/&cust_params=vid%3D8229137%26pers_cid%3Dunknown%26bob_ck%3D[bob_ck_val]%26d_code%3D1%26pagetype%3Dnone%26hlmeta%3D%2Ffeed%2F%26aa%3Df”},”segmentCustom”:{“script”:”https://segment.psg.nexstardigital.net/anvato.js”,”writeKey”:”7pQqdpSKE8rc12w83fBiAoQVD4llInQJ”,”pluginsLoadingTimeout”:12}},”expectPrerollTimeout”:8,”accessKey”:”q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB”,”token”:”eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJ2aWQiOiI4MjI5MTM3IiwiaXNzIjoicTI2MVhBbU9NZHFxUmYxcDdlQ283SVltTzFreVBtTUIiLCJleHAiOjE2NzA5NjYxMjd9.ZmjsSBLNRLmeHIx8MX5C9PQAh14_VPPhgxH4bzoiwWg”,”nxs”:{“mp4Url”:”https://tkx.mp.lura.live/rest/v2/mcp/video/8229137?anvack=q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB&token=%7E5iq7eJIEakS%2BNCpRYVykWLloGseZvo70MQ%3D%3D”,”enableFloatingPlayer”:true},”disableMutedAutoplay”:false,”recommendations”:true,”expectPreroll”:true,”titleVisible”:false,”pauseOnClick”:true,”trackTimePeriod”:60,”isPermutiveEnabled”:true});

Senate Republican Leader Mitch McConnell (Ky.) on Tuesday blamed the power former President Trump exerted in GOP primaries for the “candidate quality” issues his party struggled with in key races.

Speaking to reporters a week after Republicans lost the Senate runoff in Georgia, which expanded the Senate Democratic majority to 51 seats, McConnell said his party was hampered by weak candidates in several battleground states.

“I never said there was a red wave, I said we had a bunch of close races,” McConnell told reporters, citing the caution flags he raised in August when some Republicans were predicting big GOP gains in Congress.

“We ended up having a candidate quality [issue,]” McConnell said. “Look at Arizona, look at New Hampshire, there was a challenging situation in Georgia as well.”

McConnell noted that his affiliated super PAC, the Senate Leadership Fund, did intervene in two primaries in Alabama and Missouri, but he argued there was little Senate GOP leaders could do in races where Trump endorsed MAGA-style candidates or Republicans who claimed the 2020 election was stolen.

“Our ability to control primary outcomes was quite limited in ’22 because the support of the former president proved to be very decisive in these primaries so my view  was do the best with the cards you’re dealt,” he said of the Senate GOP strategy of coalescing behind weak candidates who had Trump’s support, such as Herschel Walker, who lost last week to Sen. Raphael Warnock (D-Ga.).

McConnell said that some Republicans has forgotten the lessons of the 2010 and 2012 elections, when the GOP fumbled good opportunities to win races in Delaware, Indiana and Missouri because extreme or controversial Republican candidates won those years’ primaries.

“I do think we had the opportunity to relearn one more time you have to have quality candidates to win competitive senate races,” he said. “We went through this in 2010, 2012.”

Source: TEST FEED1

Sexual abuse rampant in federal prisons, bipartisan investigation finds

Linda De La Rosa says her time at Federal Medical Center, a minimum security prison in Lexington, Ky., was a “living hell.”

In 2019, De La Rosa was one of three women to be sexually abused by a federal correctional officer at the facility. It took three years to arrest, prosecute and convict her attacker, who is now serving a 135-month sentence.

De La Rosa is one of hundreds of women in federal custody who have been sexually assaulted by Federal Bureau of Prisons (BOP) staff and officials, according to a new bipartisan report by the Permanent Subcommittee on Investigations released in a hearing on Tuesday. 

Over the course of an eight-month investigation, the subcommittee found BOP employees sexually abused female prisoners in at least two-thirds of federal prisons over the past decade. 

The Bureau has also failed to prevent, detect and stop recurring sexual abuse in at least four federal prisons. 

“Our findings are deeply disturbing and demonstrate, in my view, that the BOP is failing systemically to prevent, detect and address sexual abuse of prisoners by its own employees,” said Sen. Jon Ossoff (D-Ga.), chairman of the subcommittee. 

The committee found that out of more than 5,000 allegations of sexual abuse by BOP employees, at least 134 were substantiated by internal investigations or by criminal prosecutions. Multiple BOP employees who admitted in sworn statements to sexually abusing prisoners also avoided criminal prosecution. Several were allowed to retire with benefits.

Among the lists of agencies cited in the investigation, the report specifically mentions the Federal Correctional Institution in Dublin, Calif. At Dublin, the former warden and chaplain both sexually abused female prisoners. 

The facility became known as the “rape club,” and the warden was found guilty of eight charges of sexually abusing incarcerated women, forcing the women to pose naked and lying to the FBI about it, the Los Angeles Times reported last week. 

“Let me be absolutely clear: this situation is intolerable,” Ossoff said. “Sexual abuse of inmates is a gross abuse of human and Constitutional rights and cannot be tolerated by the United States Congress. It is cruel and unusual punishment that violates the Eighth Amendment to the United States Constitution and basic standards of human decency.”

The women who testified before the committee on Tuesday emphasized that they did not feel safe reporting the assault to officials. When they did, retaliation was swift. Women lost work privileges, personal belongings would go missing and access to families became limited. 

In 2003, then-President George W. Bush signed the Prison Rape Elimination Act (PREA) into law. The goal was to detect and prevent rape in all prisons and to punish those for sexually abusing those in custody. 

According to Brenda V. Smith, a professor at the American University Washington College of Law who was appointed to the Prison Rape Elimination commission in 1994, the standards should work if applied correctly. The problem, she said, is facilities often look for ways around complying with PREA. 

“Agencies complain that the standards are nitpicking and not consistent with their lived experience of people in custody or correctional settings. They also argue that women in custody are trying to game the system by claiming that they were abused,” Smith testified Tuesday. “They claim that it would be too expensive or take too much time to follow the standards that will protect these women. They also argue that the standards are there, but you really don’t have to pay attention until there’s an audit.”

But Smith said the findings of the report and the testimonies of the women at Tuesday’s hearing indicate the issue is systemic.

“What’s clear from these incidents is that staff had unfettered, uninterrupted access to women,” she said. “They abused with impunity and at will. They abused women in their offices, in quarters out of sight of cameras and in collusion with other staff.”

Michael E. Horowitz, inspector general for the Department of Justice, said one way the agency is working to limit and catch sexual assaults is through updated technology such as more cameras around facilities.

Horowitz added a bigger question that needs to be addressed is why other BOP employees aren’t coming forward to report assaults. 

“They’re the first ones there, the eyes and ears, along with the inmates,” Horowitz said. “They’re the ones who need to come forward. There needs to be that ability and accountability for people who are responsible and for people who should have come forward, including supervisors.”

Colette S. Peters, BOP director, said the bureau is in the process of assembling teams to perform cultural assessments of each facility.

“When it’s high-level officials engaging in these egregious criminal acts, there’s clearly a culture,” Peters said. “But also when you find those who are incarcerated, who openly tell our cultural assessment team that they don’t feel comfortable coming forward, they don’t feel like there are avenues to report in a way where they can report without fear of reprisal, it’s those sort of warning signs that we want to be able to find during these cultural assessments so that we don’t have a Dublin repeat again and so that those individuals in our care and custody are safe.” 

Smith offered three recommendations to the panel. 

First, reform the audit process for PREA to better identify problems or practices that affect the protection of people in custody from abuse, including the requirements to become an auditor. 

Second, rather than having auditors who already work for the current agencies, agencies should hire and pay outside ones to ensure independence and no conflict of interest. 

Lastly, Smith said, extend the timing for the auditing process. Currently, she said, the auditing process does not allow for the time to look closely at institutions or interview women and outside sources to be able to identify problems.

These solutions should be in addition to ongoing PREA training for all auditors, Smith added. 

Tuesday’s hearing comes after previous investigations found a multitude of mistreatment in federal facilities. 

In November, the subcommittee found women at a Georgia detention center were abused through “unnecessary gynecological procedures.” Meanwhile, in September, the subcommittee found the DOJ was underreporting deaths of those in custody. 

Source: TEST FEED1

Schumer: Omnibus expected to include Electoral Count Act, Ukraine funding

window.loadAnvato({“mcp”:”LIN”,”width”:”100%”,”height”:”100%”,”video”:”8229137″,”autoplay”:false,”expect_preroll”:true,”pInstance”:”p3″,”plugins”:{“comscore”:{“clientId”:”6036439″,”c3″:”thehill.com”,”version”:”5.2.0″,”useDerivedMetadata”:true,”mapping”:{“c3″:”thehill.com”,”ns_st_st”:”hill”,”ns_st_pu”:”Nexstar”,”ns_st_ge”:”TheHill.com”,”cs_ucfr”:””}},”dfp”:{“adTagUrl”:”https://pubads.g.doubleclick.net/gampad/ads?sz=1×1000&iu=/5678/nx.thehill&ciu_szs=300×250&impl=s&gdfp_req=1&env=vp&output=vmap&unviewed_position_start=1&ad_rule=1&description_url=https://thehill.com/feed/&cust_params=vid%3D8229137%26pers_cid%3Dunknown%26bob_ck%3D[bob_ck_val]%26d_code%3D1%26pagetype%3Dnone%26hlmeta%3D%2Ffeed%2F%26aa%3Df”},”segmentCustom”:{“script”:”https://segment.psg.nexstardigital.net/anvato.js”,”writeKey”:”7pQqdpSKE8rc12w83fBiAoQVD4llInQJ”,”pluginsLoadingTimeout”:12}},”expectPrerollTimeout”:8,”accessKey”:”q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB”,”token”:”eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJ2aWQiOiI4MjI5MTM3IiwiaXNzIjoicTI2MVhBbU9NZHFxUmYxcDdlQ283SVltTzFreVBtTUIiLCJleHAiOjE2NzA5NTUzMzh9.Q02iLxcNCx2ts_6_RvB894mqw3tFWNf3NMVfr2ftYZ4″,”nxs”:{“mp4Url”:”https://tkx.mp.lura.live/rest/v2/mcp/video/8229137?anvack=q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB&token=%7E5iq7eJIEakS%2BNCpRYVykWLloGseZvo70MQ%3D%3D”,”enableFloatingPlayer”:true},”disableMutedAutoplay”:false,”recommendations”:true,”expectPreroll”:true,”titleVisible”:false,”pauseOnClick”:true,”trackTimePeriod”:60,”isPermutiveEnabled”:true});

Senate Majority Leader Charles Schumer (D-N.Y.) said Tuesday that he expects a year-end omnibus spending package to include the Electoral Count Act, which clarifies the vice president’s role in certifying a presidential election as ministerial, and more funding for Ukraine.

Congressional negotiators have been deadlocked for weeks over the top-line defense and non-defense discretionary spending numbers, but Schumer on Tuesday said he is optimistic a deal will be reached soon.  

“I expect an omnibus will contain priorities both sides want to see passed into law, including more funding for Ukraine and the Electoral Count Act, which my colleagues in the Rules Committee have done great work on. It will be great to get that done,” Schumer said.  

The Electoral Count Act would clarify that the constitutional role of the vice president is solely ministerial when Congress convenes in a joint session every four years to certify the results of a presidential election.  

The language is intended to resolve any ambiguity about whether the vice president has the power to overturn the vote of the Electoral College, something that former President Trump claimed was possible after losing the 2020 presidential election.  

The legislation also provides for expedited judicial review of legal challenges to a state’s slate of electors, allowing such claims to go to a three-judge panel with a direct appeal to the Supreme Court.  

Senate Republican Leader Mitch McConnell (Ky.) stood up on the floor after Schumer spoke on Tuesday to endorse more funding for Ukraine.  

“Every day Russia spends on the back foot and Ukraine and degrades the ability to wage further wars and diminishes the calculus for others who might contemplate similar violence,” McConnell said. “Continuing support for Ukraine is the popular mainstream view that stretches across the ideological spectrum.” 

He noted that former Director of National Intelligence John Ratcliffe said that supporting Ukraine fully and completely is in the best interest of the United States.  

Senate negotiators haven’t confirmed what amount of funding for Ukraine will be included in the omnibus. The Biden administration last month requested an additional $37.7 billion to continue military and economic support to Ukraine in its war against Russia.  

Source: TEST FEED1

Paul Whelan's family defends Biden efforts amid criticism from Trump

Securing the release of Paul Whelan from Russian imprisonment is a high priority for President Biden, Whelan’s family said in a statement on Tuesday.

The statement, released in an email by Whelan’s brother David, comes as critics have slammed the Biden administration for freeing convicted Russian arms dealer Viktor Bout to secure Russia’s release of Brittney Griner, a professional basketball player and Olympic medalist who was held for 10 months after a conviction on a minor drug charges that the U.S. rejected as unjust. 

Staff at the White House held a virtual meeting with Elizabeth Whelan, Paul Whelan’s sister, on Monday, according to the statement from the family.

They said that meeting gave them confidence that the administration is “not letting grass grow under their feet.”

“The announcement of imminent discussions with the Russian Federation is also positive news,” the family said.

“These initial steps give us hope that the third time is the charm,” the family continued, referring to both Griner’s release and the release in April of Trevor Reed, a former U.S. marine that was detained in Russia in 2019 and exchanged in a prisoner swap with Moscow.

White House National Security Advisor Jake Sullivan told reporters on Monday that the U.S. will have “an engagement” with Russian officials this week. 

“We have had regular engagement of course along the way and the next conversation at a high level will take place this week,” he said.

Whelan was arrested in December 2018 after he traveled to Russia to attend the wedding of a friend, his family said at the time. The Russians convicted Whelan of espionage in 2020 and sentenced him to 16 years in prison, charges that Whelan, his family, and the U.S. government have rejected as a sham. 

The White House said the Russians rejected including Whelan in the Bout deal that secure the release of Griner, saying they are holding him to a higher standard because of the espionage conviction.

The Whelan family said in a statement last week that the administration “made the right decision” to secure Griner’s freedom. 

Former President Trump has also been involved in the controversy, as the Whelan family has criticized him for failing to prioritize Paul Whelan’s release.

Trump and some of his allies have criticized Biden for releasing Bout — who served 15 years of a 25-year sentence in U.S. federal prison.

The Whelan family said that increased attention on Paul Whelan’s detention have led to an outpouring of support from “all political perspectives sending Paul their best wishes and hope for a speedy return home. Americans pulling together for an American.”

“If he ever worried that he’d been forgotten, I think this will provide Paul reassurance that he remains in people’s prayers,” the family statement read. 

Source: TEST FEED1

Consumers may feel relief after inflation slowed in November

A November slowdown in inflation could give consumers relief both from rising prices and rapidly rising interest rates.

Consumer price index (CPI) data released Tuesday by the Labor Department still showed inflation near 40-year highs. But a slower pace of price growth may help Americans catch a break from more than a year of rapid inflation, all while giving the Federal Reserve room to hike interest rates at a slower pace.

The annual inflation rate fell to 7.1 percent in November, down from 7.7 percent in October and in line with economist estimates of a 7.3 percent annual inflation rate. Prices rose just 0.1 percent in November alone, down from a 0.4 percent monthly inflation rate in October.

The November dip in inflation is a promising, if early, sign that the worst of rapid price growth may be behind the U.S. After peaking at 9.1 percent in June, the annual inflation rate as measured by the CPI has fallen steadily over the fall and is expected to fall even further into winter.

While prices are still rising at a historically brisk pace, a steady decline in inflation is the first step toward prices staying flat and giving consumers a chance to catch up. The November inflation decline will also keep the Fed on track to raise interest rates at a slower pace, which could give Americans relief from quickly rising mortgage rates, car payments and other debts.

The Federal Open Market Committee (FOMC), the panel of Fed officials responsible for setting interest rates, is set to begin a two-day meeting Tuesday and announce a 0.5 percentage point interest rate hike on Wednesday afternoon. The November inflation report will keep the Fed on track to hike rates by a relatively smaller amount after four increases of 0.75 percentage points in consecutive meetings since June.

Developing

Source: TEST FEED1

DeSantis tops Trump by 23 points among Republicans in new poll

window.loadAnvato({“mcp”:”LIN”,”width”:”100%”,”height”:”100%”,”video”:”8221236″,”autoplay”:false,”expect_preroll”:true,”pInstance”:”p3″,”plugins”:{“comscore”:{“clientId”:”6036439″,”c3″:”thehill.com”,”version”:”5.2.0″,”useDerivedMetadata”:true,”mapping”:{“c3″:”thehill.com”,”ns_st_st”:”hill”,”ns_st_pu”:”Nexstar”,”ns_st_ge”:”Hill.TV”,”cs_ucfr”:””}},”dfp”:{“adTagUrl”:”https://pubads.g.doubleclick.net/gampad/ads?sz=1×1000&iu=/5678/nx.thehill&ciu_szs=300×250&impl=s&gdfp_req=1&env=vp&output=vmap&unviewed_position_start=1&ad_rule=1&description_url=https://thehill.com/feed/&cust_params=vid%3D8221236%26pers_cid%3Dunknown%26bob_ck%3D[bob_ck_val]%26d_code%3D310%2C270%2C271%2C272%2C273%2C275%2C253%2C278%2C176%2C256%2C257%2C288%2C281%2C283%2C282%2C284%2C287%2C286%2C300%2C301%2C245%2C260%2C240%2C242%2C268%2C249%2C263%2C270%2C271%2C272%2C273%2C275%2C279%2C278%2C253%2C256%2C257%2C283%2C282%2C284%2C286%2C245%2C260%2C240%2C242%2C268%2C249%2C263%2C906%2C904%2C905%2C906%2C904%2C905%2C298%2C279%2C294%2C292%2C290%2C291%26pagetype%3Dnone%26hlmeta%3D%2Ffeed%2F%26aa%3Df”},”segmentCustom”:{“script”:”https://segment.psg.nexstardigital.net/anvato.js”,”writeKey”:”7pQqdpSKE8rc12w83fBiAoQVD4llInQJ”,”pluginsLoadingTimeout”:12}},”expectPrerollTimeout”:8,”accessKey”:”q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB”,”token”:”eyJ0eXAiOiJKV1QiLCJhbGciOiJIUzI1NiJ9.eyJ2aWQiOiI4MjIxMjM2IiwiaXNzIjoicTI2MVhBbU9NZHFxUmYxcDdlQ283SVltTzFreVBtTUIiLCJleHAiOjE2NzA5NjIzMDV9.rZOWzDTlu9gagESpKRcC4xZRulgLFSRxQONHHXPU_Bo”,”nxs”:{“mp4Url”:”https://tkx.mp.lura.live/rest/v2/mcp/video/8221236?anvack=q261XAmOMdqqRf1p7eCo7IYmO1kyPmMB&token=%7E5iq7cJEEa0S%2BNCpXZ1ajW7loGseZvo70MQ%3D%3D”,”enableFloatingPlayer”:true},”disableMutedAutoplay”:false,”recommendations”:true,”expectPreroll”:true,”titleVisible”:false,”pauseOnClick”:true,”trackTimePeriod”:60,”isPermutiveEnabled”:true});

Florida Gov. Ron DeSantis (R) leads former President Trump by 23 points among Republicans in a hypothetical GOP presidential primary, according to a poll released Tuesday. 

The USA Today-Suffolk University poll found that 56 percent of Republican and Republican-leaning voters prefer DeSantis, while only 33 percent would support Trump. More than 60 percent said they want a nominee who will continue Trump’s policies but is not Trump, while 31 percent want the former president to run. 

“Republicans and conservative independents increasingly want Trumpism without Trump,” said David Paleologos, the director of the Suffolk University Political Research Center. 

Trump became the first major candidate to jump in the race for the White House in 2024 last month, but some signs have indicated his control over the GOP may be weakening. 

He has received blame from members of his own party for the GOP’s disappointing performance in the midterm elections. Many of the candidates he endorsed in key races lost after defeating primary opponents who were seen as more electable but less loyal to Trump. 

Trump has also received backlash from some Republicans over his dinner with rapper Ye, formerly known as Kanye West, and white nationalist Nick Fuentes, both of whom have espoused antisemitic conspiracy theories. 

Trump said he did not know about Fuentes’s views before meeting with him. 

The poll also found Trump’s favorable rating among Republicans dropping from 75 percent in October to 64 percent in December. His unfavorable rating has also risen from 18 percent to 23 percent in that time. 

Pollsters found President Biden leading a hypothetical head-to-head match-up with Trump, 47 percent to 40 percent. DeSantis led Biden in the poll by about 4 points, 47 percent to 43 percent. 

Almost two-thirds of GOP and GOP-leaning voters want DeSantis to run for president in 2024, while only 24 percent do not want him to.

Source: TEST FEED1

SEC charges former FTX CEO with defrauding investors in 'house of cards’

The Securities and Exchange Commission (SEC) has charged former FTX CEO Sam Bankman-Fried with organizing a scheme to defraud investors after he was arrested in the Bahamas on Monday ahead of expected charges being filed. 

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler in a release

The SEC said in its complaint filed Tuesday that Bankman-Fried raised more than $1.8 billion from investors since May 2019 by promoting FTX as a “safe, responsible” cryptocurrency trading platform. 

But officials allege that he orchestrated a years-long fraud to conceal that the money was being diverted to a privately held cryptocurrency hedge fund called Alameda Research. Bankman-Fried also allegedly did not disclose to investors that Alameda Research was receiving special treatment on the FTX platform, including having an unlimited “line of credit,” and the increased risk coming from Alameda’s holdings in FTX. 

The complaint charges Bankman-Fried with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. 

Bankman-Fried was arrested in the Bahamas, where he lives and where FTX was based until its collapse last month, after U.S. officials notified local authorities that criminal charges would be filed against him and the U.S. would “likely” request his extradition. 

The SEC complaint seeks a civil penalty and prohibition of Bankman-Fried from participating in the issuance, purchase, offer or sale of securities among other actions. But the U.S. attorney’s office for the Southern District of New York is unexpected to unseal criminal charges against Bankman-Fried also on Tuesday. 

“The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws,” Gensler said. 

The House Financial Services Committee is set to hold a hearing on Tuesday on FTX. Bankman-Fried was supposed to testify but had signaled before his arrest that he did not intend to comply with a subpoena.

Source: TEST FEED1

SEC charges former FTX CEO with defrauding crypto investors

NEW YORK (AP) — The U.S. Securities and Exchange Commission has charged the former CEO of failed cryptocurrency firm FTX with orchestrating a scheme to defraud investors.

An SEC complaint filed Tuesday alleges that Sam Bankman-Fried raised more than $1.8 billion from equity investors since May 2019 by promoting FTX as a safe, responsible platform for trading crypto assets.

The civil complaint says Bankman-Fried diverted customer funds to Alameda Research LLC, his privately-held crypto fund, without telling them. The complaint also says Bankman-Fried commingled FTX customers’ funds at Alameda to make undisclosed venture investments, lavish real estate purchases, and large political donations.

“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”

Bankman-Fried was arrested Monday in the Bahamas at the request of the U.S. government, U.S. and Bahamian authorities said.

The arrest was made after the U.S. filed criminal charges that are expected to be unsealed Tuesday, according to U.S. Attorney Damian Williams. Bankman-Fried had been under criminal investigation by U.S. and Bahamian authorities following the collapse last month of FTX, which filed for bankruptcy on Nov. 11, when it ran out of money after the cryptocurrency equivalent of a bank run.

The SEC charges are separate from the criminal charges expected to be unsealed later Tuesday.

A spokesman for Bankman-Fried had no comment Monday evening. Bankman-Fried has a right to contest his extradition, which could delay but not likely stop his transfer to the U.S.

Bankman-Fried’s arrest comes just a day before he was due to testify in front of the House Financial Services Committee. Rep. Maxine Waters, D-Calif., chairwoman of the committee, said she was “disappointed” that the American public, and FTX’s customers, would not get to see Bankman-Fried testify under oath.

That hearing, however, will be held Tuesday despite the arrest of Bankman-Fried.

Bankman-Fried was one of the world’s wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world.

That all unraveled quickly last month, when reports called into question the strength of FTX’s balance sheet. Customers moved to withdraw billions of dollars, but FTX could not meet all the requests because it apparently used its customers deposits to cover bad bets at Bankman-Fried’s investment arm, Alameda Research.

Bankman-Fried said recently that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.

The SEC challenged that assertion Tuesday in its complaint.

“FTX operated behind a veneer of legitimacy Mr. Bankman-Fried created by, among other things, touting its best-in-class controls, including a proprietary ‘risk engine,’ and FTX’s adherence to specific investor protection principles and detailed terms of service. But as we allege in our complaint, that veneer wasn’t just thin, it was fraudulent,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike.”

Source: TEST FEED1

The Hill's Morning Report — Lawmakers inch forward on spending deal

Editor’s note: The Hill’s Morning Report is our daily newsletter that dives deep into Washington’s agenda. To subscribe, click here or fill out the box below.


The race to fund the government ahead of a Friday deadline continues, and lawmakers on Monday still appeared to have a long way to go before passing an omnibus spending package before Christmas.

Senate Majority Leader Charles Schumer (D-N.Y) said from the chamber floor on Monday that Congress is headed for a short-term spending bill, known as a continuing resolution (CR), in the coming days, which would give negotiators an extra week to try to hash out a bigger compromise on billions in spending, writes The Hill’s Aris Folley.

“Members should be prepared to take quick action on a CR, a one-week CR, so we can give appropriators more time to finish a full funding bill before the holidays,” Schumer said on Monday afternoon.

Sen. John Boozman (R-Ark.), an appropriator, said last week that one of the biggest holdups preventing an agreement between Republicans and Democrats is a roughly $25 billion gap between what the parties want allocated for discretionary spending. The clashes come as Democrats fight to seize what could be their last opportunity to shape government funding before they lose control of the House in January.

While Democrats are unified in pushing for an omnibus bill by the end of the month, Republicans remain divided. Last week, Sen. Ted Cruz (R-Texas) said Congress should pass a stopgap spending bill that runs “until early next year” so the newly elected Congress can “enact the priorities that the voters elected them to enact.” But even Republicans who have expressed support for an omnibus are pushing hard for Democrats to lower their demands for domestic spending.

“Both sides know what it would take for the Senate to pass a full-year government funding bill into law,” Senate Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor on Monday. 

Roll Call: Signs of life for the omnibus deal as negotiators make headway.

Vox: Why Congress’s failure to pass permitting reform could come back to haunt Democrats — and the climate.

A narrow House GOP majority in divided government could be an opportunity for moderate and pragmatic House Republicans to prove the value of their style and philosophy of trying to work in earnest across party lines on legislative priorities, writes The Hill’s Emily Brooks. The kinds of Republicans who won in tough districts are the party’s “majority makers,” some say, and have the potential to band together to direct priorities and actions. 

But ideological polarization and the confrontational tactics of the House GOP’s right wing, as well as House Minority Leader Kevin McCarthy (R-Calif.), who is walking a careful line in hopes of keeping its support, could complicate moderate hopes of acting on any middle ground.

McCarthy is being dragged into the firestorm set off by Rep. Marjorie Taylor Greene’s (R-Ga.) comments that the Jan. 6, 2021, Capitol riot would have been armed if she had organized it, writes The Hill’s Mychael Schnell, with Democrats tying the remarks to McCarthy’s Speaker bid as the firebrand Republican emerges as one of his fiercest advocates.

“I simply think that Kevin McCarthy and the Republican conference need to decide which side of the insurrection they’re on,” Rep. Jamie Raskin (D-Md.), a member of the House Jan. 6 select committee, told The Hill. “The side of the officers and the Constitution or the side of Marjorie Taylor Greene and Donald Trump?”

The select committee is set to release its final report on Dec. 21 and is set to begin with a lengthy executive summary describing former President Trump’s “culpability for his extensive and baseless effort to subvert the 2020 election,” Politico reports. The complete report is expected to include findings from all of the select committee’s investigative teams, which probed the mob, Trump’s actions, the role of extremism in the attack, the money trail behind Trump’s Jan. 6 rally and law enforcement failures on the day of the attack.

The Washington Post: Special counsel Jack Smith sends Trump subpoena to Georgia Secretary of State Brad Raffensperger.


Related Articles

Politico: Why one rising GOP senator is tapping out for a governor’s race instead.

Axios: Democrats aim to steal GOP playbook on patriotism and freedom.

The 19th: Why the 2022 election was historic for Muslim women’s representation.

USA Today: More than just “firsts,” LGBTQ elected officials carve space for a future generation of politicians.

The Hill: House Oversight Committee to hold hearing on surging anti-LGBTQ violence.


LEADING THE DAY

POLITICS

The rising animosity between pro-Trump and anti-Trump or establishment forces is creating the prospect of something no Republican wants: a GOP civil war that could split the party in two and leave the path clear for Democrats to win big in 2024. The Hill’s Al Weaver writes that former Speaker Newt Gingrich (R-Ga.) raised that possibility last week, but some Republicans are not yet ready to hit the panic button and don’t believe that is what will ultimately happen, even as Trump and other possible 2024 candidates stake out ground. 

“You’ve got tensions in the Democratic Party. You’ve got tensions here, but no,” said Sen. Lindsey Graham (R-S.C.) “Dysfunctional political parties is the norm. It’s not the exception on both sides.”

The list of alternatives to Trump on the GOP ticket in 2024 is growing as Republicans express their excitement about the possibility of Sen. Tim Scott (R-S.C.) throwing his hat in the ring. Scott, who handily won reelection in the midterms, has not publicly stated his intentions to run.

But Scott would “bring something to the table on day one,” according to Graham, who said his South Carolina colleague has “one of the most compelling stories of any Republican out there” (Politico).

The Washington Post: Kari Lake was unflinchingly loyal to Trump. Then her campaign unraveled.

Politico: Inside the secret $32 million effort to stop “Stop the Steal.”

The Washington Post: How a Trump-allied group fighting “anti-white bigotry” beats Biden in court.

The Hill’s Julia Manchester outlines five challenges facing Republicans as they try to take back the Senate in 2024: GOP skepticism on mail-in voting, Trump, securing the support of young voters and Black voters, as well as abortion rights.

Senate Democrats are still digesting the bombshell news that Sen. Kyrsten Sinema (I-Ariz.) is leaving their party, The Hill’s Alexander Bolton reports. Lawmakers are still trying to understand the impact on day-to-day business and more importantly, the 2024 Senate map. Sinema has voted reliably for President Biden’s nominees and she believes becoming an Independent frees her up to work on more bipartisan deals, but little legislating is expected with a GOP-controlled House, and it’s not clear what Sinema will focus on. Some Democratic senators felt frustrated and baffled by Sinema’s moves during the 117th Congress and don’t think the affiliation as Independent changes much, but Schumer has a tough call to make on backing her reelection.

The Hill: Sen. Joe Manchin (D-W.Va.) says he has no intention of leaving the Democratic Party.

Politico: Minority Leader-elect Hakeem Jeffries (D-N.Y.) faces decision as House Dems’ next campaign chair still a mystery.

ADMINISTRATION

The White House has privately signaled to Democrats that it would support a compromise deal to revive the expanded child tax credit, Politico reports. It’s a significant shift for an administration that has resisted applying work requirements to anti-poverty programs. 

The move comes amid efforts in Congress to include an expansion to the credit in the year-end spending package while Democrats still control both chambers. It also reflects a growing urgency within the administration to salvage a policy that’s among Biden’s signature achievements. The enhancement of the child tax credit was rolled out during his first months in office, delivering up to $3,600 to parents. According to Census Bureau data, the increase resulted in a historic drop in child poverty, cutting the national rate nearly in half.

But the benefits ran out last December in the face of opposition from Republicans and Manchin, who said he would not support an extension over concerns that the policy was fueling inflation.

Then-Vice President Biden stood at a podium in the South Court Auditorium of the White House nearly a decade ago and spoke about the need for action after a gunman killed 20 children and six teachers at Sandy Hook Elementary School in Newtown, Conn., write The Hill’s Alex Gangitano and Brett Samuels

“We are starting here today and we’re going to resolve to continue this fight,” Biden, who has been at the center of debates over gun laws for the last 30 years, said at the time after leading a task force to form proposals in the wake of the shooting. Wednesday will mark 10 years since the Sandy Hook massacre, but the president is still preaching much the same message. 

Perhaps more than any other issue, Biden has used his pulpit as president to push Congress to address gun violence, calling repeatedly for lawmakers to reimpose a ban on assault weapons.

The New York Times: Biden is bringing Africa’s leaders to Washington, hoping to impress. China, Russia, Turkey and the United Arab Emirates are all vying for influence in Africa. What will the administration offer at a summit that starts Tuesday in Washington?

The Hill: Paul Whelan’s family meets with Biden officials amid fresh calls for his release from Russia.

The Hill: Bidens participate in the 75th annual Toys for Tots event in Virginia.


IN FOCUS/SHARP TAKES

INTERNATIONAL

The European Union is being rocked by allegations that World Cup host Qatar bribed current and former officials in the European Parliament in the hopes of influencing decisions at the highest levels. Since Friday morning, Belgian authorities have confiscated more than $1 million in cash, frozen the tech assets of 10 parliamentary officials and held six people for questioning over the course of 20 raids across Brussels. Four of them on Sunday were charged by a Belgian judge, who said they are “suspected of money laundering, corruption and taking part in a criminal organization on behalf of a ‘Gulf State,’” according to The Washington Post.

While EU authorities have yet to confirm the implicated country, Belgian media identified it as Qatar. According to media reports, those charged include Eva Kaili, a European Parliament vice president; and her partner, parliamentary assistant Francesco Giorgi; and Pier Antonio Panzeri, a former member of the European Parliament. On Monday, Kaili was stripped of her role (Reuters).

“This is about the credibility of Europe, so this has to trigger consequences in various areas,” said German Foreign Minister Annalena Baerbock (The Guardian).

The Group of Seven promised to “meet Ukraine’s urgent requirements” for defense aid after Ukrainian President Volodymyr Zelensky appealed to the group for modern tanks, artillery firepower and long-range weapons against Russia’s devastating invasion. EU foreign ministers also agreed to put another $2.1 billion into a fund to pay for military support for Ukraine, after it was largely depleted during almost 10 months of war (Reuters). The U.S. on Tuesday sent its first shipment of power gear to Ukraine as the country continues experiencing attacks on its grid heading into the coldest parts of winter (Reuters).

Russia is using old Ukrainian missiles against Ukraine, intelligence officials have discovered. The missiles, which were returned to Russia in the 1990s under an agreement aimed at assuring Ukraine’s territorial integrity and sovereignty, have now shown up in rubble (The New York Times). 

The Hill: Russian President Vladimir Putin skips annual news conference as his war in Ukraine falters.

The New York Times: In a wary Arctic, Norway starts to see Russian spies everywhere.

Iran on Monday hanged a man in public who had been convicted of killing two members of the security forces, according to state media. It marked the second execution in less than a week of people involved in anti-regime protests. Nationwide demonstrations erupted three months ago after 22-year-old Mahsa Amini died in custody after being arrested by the morality police enforcing mandatory dress code laws (The Hill).

Vox: Why the protests in Iran are so hard to understand.

As China drops some of its harsh “zero COVID” restrictions, the government is on a mission to get older adults vaccinated against COVID-19. This messaging is critical as the government braces for a surge in cases that could overwhelm its medical resources. The outbreaks in the coming weeks and months — and how deadly they will be — depend in part on whether older adults are willing to be inoculated (The New York Times).

Bloomberg News: China postpones key economic policy meeting due to COVID-19 spike.


OPINION

■ Elon Musk is ruining Trump’s presidential campaign, by Joshua Green, national correspondent, Bloomberg Opinion. https://bloom.bg/3BpkQkL 

■ The end of the new peace, by Yuval Noah Harari, contributor, The Atlantic. https://bit.ly/3iLVVS4


WHERE AND WHEN

👉 The Hill: Share a news query tied to an expert journalist’s insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

INVITATION: Join a newsmaker event hosted by The Hill and the Bipartisan Policy Center on Tuesday, Dec. 13, 10 a.m. ET (hybrid), “Risk to Resilience: Cyber & Climate Solutions to Bolster America’s Power Grid,” with Rep. Jim Himes (D-Conn.), Rep. Cathy McMorris Rodgers (R-Wash.), Energy Department Cybersecurity, Energy Security and Emergency Response Director Puesh Kumar and more. Information for in-person and online participation is HERE.

The House will convene at 10 a.m.

The Senate will convene at 10 a.m. and resume consideration of the nomination of Dana M. Douglas to be a U.S. circuit judge for the 5th Circuit.

The president will receive the President’s Daily Brief at 9 a.m. At 3:30 p.m., he will sign the Respect for Marriage Act into law on the South Lawn, with Vice President Harris, first lady Jill Biden and second gentleman Doug Emhoff in attendance.

The vice president will speak at the U.S.-Africa Leaders Summit’s African and Diaspora Young Leaders Forum at 1:20 p.m., and at 3:30 p.m. will attend the signing ceremony for the Respect for Marriage Act.

The first lady will attend the signing ceremony for the Respect for Marriage Act.

Secretary of State Antony Blinken will participate in the U.S.-Africa Leaders Summit in Washington.

The White House daily press briefing is scheduled at 2:15 p.m. 


ELSEWHERE

➤ TECH 

The disgraced founder of the collapsed cryptocurrency exchange FTX, Sam Bankman-Fried, was arrested in the Bahamas on Monday after U.S. prosecutors filed criminal charges, according to the government of the Bahamas, which added that the U.S. is likely to request his extradition.

Bankman-Fried has been under investigation by the Justice Department over the sudden implosion of FTX, a $32 billion company that filed for bankruptcy on Nov. 11 (The New York Times). Earlier Monday, leaders of the Senate Banking Committee, before which Bankman-Fried was set to testify, said the CEO and his lawyers had refused to accept a subpoena to appear before the committee.

In a Monday statement, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and ranking Republican Sen. Pat Toomey (Pa.) blasted Bankman-Fried for “an unprecedented abdication of accountability” after rejecting several requests to testify at hearings about the collapse of FTX.

“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon – that is how congressional oversight works,” Brown and Toomey said (The Hill).

Big questions remain after FTX’s collapse. The Hill’s Sylvan Lane tackles five of the biggest, including when Bankman-Fried will face charges and what he knew before the collapse. He also asks where the Securities and Exchange Commission was in all this, if the collapse could have been prevented — and if the debacle will lead to changes in cryptocurrency rules.

Kristin Smith, executive director of the Blockchain Association, one of the largest crypto lobbying groups, knows it won’t be easy to rebuild the industry’s reputation, writes The Hill’s Karl Evers-Hillstrom. The high-profile FTX failure — which follows several other crypto collapses this year — casts a shadow over an industry that had been making inroads with lawmakers and will only spur more scrutiny from crypto’s most vocal skeptics. 

“I’m outraged too,” Smith told The Hill. “This is just a pattern of really egregious behavior and if you look at some of the reporting that’s been out there, there’s a very good case that this could be fraud.”

The Wall Street Journal: Bankman-Fried’s parents were there for FTX’s rise, and now its fall.

Vox: How effective altruism let Bankman-Fried happen. Profound philosophical errors enabled the FTX collapse.

The Federal Reserve is hoping to slow its interest rate hikes and give Americans some relief from rising mortgage and car payments, writes The Hill’s Sylvan Lane, but a crucial inflation report could make or break those plans. The Labor Department is set to release new inflation data for November today, a day before the Fed is expected to hike rates for the final time this year. 

While Fed leaders say they are planning to slow down rate hikes to limit the risk of a recession, a surprise price surge could force the bank to abandon those plans. 

Bloomberg News: What to expect in the last Consumer Price Inflation report of the year, and what’s ahead.

Quartz: Elon Musk’s Twitter won’t take any more advice from its Trust and Safety Council.

PANDEMIC & HEALTH 

A crackdown by drug wholesalers in response to the opioid crisis is preventing some pharmacists from dispensing a combination of stimulants and sedatives routinely prescribed to help patients manage conditions like anxiety and attention deficit hyperactivity disorder (ADHD).

As part of a $21 billion nationwide opioid settlement with attorneys general from 46 states, the District of Columbia and five territories, the three main U.S. pharmaceutical wholesalers tightened monitoring of suspicious orders from pharmacies in July. Five independent pharmacists in five different states told Reuters they were notified that they would be cut off from the distribution of all controlled substances after filling prescriptions for psychiatric drugs such as the stimulant Adderall — used to treat ADHD — and anti-anxiety drug Xanax.

“This is detrimental potentially to many patients who have comorbid anxieties along with ADHD, or sleep issues along with ADHD,” Matthew Goldenberg, president-elect of the Southern California Psychiatric Society, a chapter of the American Psychiatric Association, told Reuters. “I think it’s a trickle-down effect from the opiates.”

The Washington Post: Cause of death: Washington faltered as fentanyl gripped America.

NPR: How Medicare Advantage plans dodged auditors and overcharged taxpayers by millions.

Reuters: It’s too soon to call an end to the COVID-19 emergency, GAVI chief says.

Concerns are growing nationwide for rapidly increasing cases of what health officials have deemed a tripledemic: the flu, respiratory syncytial virus and COVID-19, and the Centers for Disease Control and Prevention (CDC) is once again urging the public to wear face masks indoors (The Hill).

Information about COVID-19 vaccine and booster shot availability can be found at Vaccines.gov.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,084,651. Current U.S. COVID-19 deaths are 2,981 for the week, according to the Centers for Disease Control and Prevention. (The CDC shifted its tally of available data from daily to weekly, now reported on Fridays.)


THE CLOSER

And finally … ⚽ It’s the World Cup semifinals in Doha, Qatar. Argentina faces off against Croatia today, and tomorrow France will play against Morocco. 

Both games will follow a similar template, pitting a team that arrived as an established contender against one of the tournament’s outsiders. As for what happens next? Given the upsets that have underscored the World Cup so far, it’s anyone’s guess.

As French coach Didier Deschamps told The New York Times, “Any of the four teams can win it.”

Argentinian fans’ enthusiasm is driven by the belief that winning this World Cup is star player Lionel Messi’s destiny, resulting in a spectrum of emotion, “ranging from the caterwauling after an opening defeat to Saudi Arabia to the belligerence of a narrow victory over the Netherlands, taking in relief, hope, euphoria and pride along the way.”

France, meanwhile, is seeking to become the first team since Brazil in 1962 to mount a successful defense of its World Cup title. Their hopes are bolstered by forward Kylian Mbappé — the World Cup’s leading scorer, and arguably one of the most gifted players in the game — as well as “an enviable array of attacking threats, a well-balanced midfield and a redoubtable defense.” 


Stay Engaged

We want to hear from you! Email: Alexis Simendinger and Kristina Karisch. Follow us on Twitter (@asimendinger and @kristinakarisch) and suggest this newsletter to friends!


Source: TEST FEED1