Friday, August 14, 2020
'Emergency Was a Sham': Top Democrat Says IG Report on Saudi Arms Deal 'Deeply Damning' for Pompeo
"What sort of emergency makes itself known a few months in advance and can be resolved with weapons delivered years later?"
by
Andrea Germanos, staff writer
https://www.commondreams.org/news/2020/08/12/emergency-was-sham-top-democrat-says-ig-report-saudi-arms-deal-deeply-damning-pompeo
Rep. Eliot Engel, Democratic chair of the House Foreign Affairs Committee, said Tuesday that an inspector general report revealed the State Department's claim last year of an "emergency" to sell billions of dollars in arms to Saudi Arabia and the United Arab Emirates "was a sham" and accused the department of deploying "scare tactics to try to keep a lid on the report."
"This report is deeply damning for Secretary Pompeo and the administration. The lengths to which the State Department has gone in the last day to spin and obscure the facts show how desperate they are to hide the truth," Engel said in a statement.
The comments follow the release of an Office of Inspector General report (pdf) into the 2019 weapons transfer, for which the Trump administration dodged congressional oversight by invoking a provision in the Arms Export Control Act that allows the president to take such action if "an emergency exists which requires the proposed sale in the national security interest of the United States."
The sale prompted swift ire from lawmakers who'd blocked similar sales over justified concerns such weapons were being used to kill civilians in Yemen.
The OIG review of the matter began under IG Steve Linick, who was ousted in May by Pompeo and who told lawmakers State Department Undersecretary Brian Bulatao tried to bully him into dropping the probe.
A redacted version of the watchdog's report was published online Tuesday, with acting IG Diana Shaw noting in an accompanying memo that the document reflects redactions requested by the State Department.
Shaw wrote, in part:
Although the Department withheld relatively little information in the unclassified portion of the report, it withheld significant information in the classified annex necessary to understand OIG's finding and recommendation. The Department asserted that the redactions made to the classified annex should be withheld from Congress because the underlying information implicates "executive branch confidentiality interests, including executive privilege." While OIG continues to favor release to the greatest extent possible, the privilege belongs to the Department and OIG is not in a position to overrule the assertion but must instead rely on the good faith of the Department. Accordingly, OIG will make available to Congress a version of its classified annex with the Department's redactions applied.
As detailed by Politico on Tuesday,
The inspector general determined that, on a technical level, Pompeo carried out his use of emergency authorities in accordance with the legal regulations, which give him considerable discretion in, among other things, determining what counts as an emergency.
Yet the IG also said the department "did not fully assess risks and implement mitigation measures to reduce civilian casualties and legal concerns."
In his statement, Engel said the report suggested that Pompeo overreached in his authority.
"No one ever doubted that the law provides for the authority to expedite the sale of weapons in the case of an emergency. The question was always, 'Did the administration abuse that authority in order to ram through more than $8 billion in sales to Gulf countries?' The IG didn't offer an opinion on that. But the report's details signal a resounding, 'Yes.'"
The lawmaker said that was likely behind the Department's insistence "on redacting the most salient information and trying to tell us what the report said before it was out," similar to Attorney General Bill Barr's public take on the Mueller report ahead of its release.
What's more, Politico reported that the differing timelines of events between the redacted and unredacted versions of the report were telling, writing that the uncensored version gives "a fuller picture of the timelines involved and rais[es] questions as to whether an emergency existed."
From the outlet:
For instance, an unredacted timeline shows that State Department staffers proposed using emergency authorities on April 3, 2019, that drafts of the emergency certification were circulated 20 days later, and that it wasn’t until May 4 that Pompeo directed that the emergency be certified by May 24.
The report released online, however, said Pompeo briefed Congress on Iranian threats on May 21, approved the paperwork two days later and then certified that the emergency authorization was transmitted to Congress the next day.
In essence, the public version gives the impression that Pompeo moved quickly on an urgent issue, whereas the unredacted version shows a much longer timeframe of deliberation and action, undermining the argument that an emergency existed at all.
The differing timelines were seized upon by Engel as well.
"Beneath those pesky redactions, we find that nearly two months went by from when the Department first began considering an emergency declaration until Mr. Pompeo signed it. The draft emergency certification circulated more than a month before its actual declaration. And Mr. Pompeo decided on the exact date to declare an emergency 20 days ahead of time," said Engel.
"The Office of Inspector General also found that at the time of its review, the foreign countries had completely received only four of 22 arms packages that were part of the deal and that five of the weapons packages wouldn't even begin delivery until this year or later," he said, adding that "some of the agreements weren't even signed by the time the IG issued his report."
"What sort of emergency makes itself known a few months in advance and can be resolved with weapons delivered years later?" Engel said.
The evidence of the administration's wrongdoing regarding the weapons sale is now clear, the congressman said.
"This report tells us everything we suspected: the emergency was a sham," he said. "It was cooked up to get around congressional review of a bad policy choice. And ever since Mr. Pompeo declared that 'emergency,' he and his top lieutenants have worked to bury the truth."
The State Department, for its part, said the OIG report "confirms no wrongdoing" by Pompeo.
'A Conspiracy to Steal the Election, Folks': Alarms Sound After Postal Worker Reports Removal of Sorting Machines
The removal of key equipment from Post Offices should be viewed as nothing less than "sabotage," said one observer.
by
Jake Johnson, staff writer
https://www.commondreams.org/news/2020/08/12/conspiracy-steal-election-folks-alarms-sound-after-postal-worker-reports-removal
The head of the Iowa Postal Workers Union alleged Tuesday that mail sorting machines are "being removed" from Post Offices in her state due to new policies imposed by Postmaster General Louis DeJoy, a major GOP donor to President Donald Trump whose operational changes have resulted in dramatic mail slowdowns across the nation.
Asked by NPR's Noel King whether she has felt the impact of DeJoy's changes, Iowa Postal Workers Union President Kimberly Karol—a 30-year Postal Service veteran—answered in the affirmative, saying "mail is beginning to pile up in our offices, and we're seeing equipment being removed."
"In Iowa, we are losing machines. And they already in Waterloo were losing one of those machines. So that also hinders our ability to process mail in the way that we had in the past," added Karol, who said she is "not a fan" of the postmaster general. Washington state election officials have also raised concerns about the removal of mail sorting machines.Karol went on to specify that "equipment that we use to process mail for delivery"—including sorting machines—is being removed from Postal Service facilities in Iowa as DeJoy rushes ahead with policies that, according to critics, are sabotaging the Postal Service's day-to-day operations less than 90 days before an election that could hinge on mail-in ballots.
"I grew up in a culture of service, where every piece was to be delivered every day. And his policies, although they've only been in place for a few weeks, are now affecting the way that we do business and not allowing us to deliver every piece every day, as we've done in the past," said Karol. "I don't see this as cost-saving measures. I see this as a way to undermine the public confidence in the mail service. It's not saving costs. We're spending more time trying to implement these policy changes. And it's, in our offices, costing more over time."
Observers reacted with alarm to Karol's comments, viewing them as further confirmation that DeJoy is deliberately attempting to damage the Postal Service with the goal of helping Trump win reelection in November.
"It's a conspiracy to steal the election, folks," tweeted The Week's political columnist Ryan Cooper.
Freelance journalist Erin Biba said there's "absolutely no way to see" the removal of mail sorting machines from Post Offices as anything other than "sabotage" of the most popular government institution in the U.S.
"It's so blatant," added Biba.
Listen to Karol's interview:
Karol's remarks come as members of Congress and hundreds of thousands of ordinary Americans are demanding DeJoy's immediate resignation or removal in the wake of his displacement of nearly two dozen top Postal Service officials late last week—a major leadership overhaul that critics dubbed a "Friday Night Massacre."
According to internal Postal Service memos obtained by Reuters, DeJoy—a former logistics executive with tens of millions invested in USPS competitors—was aware his operational changes would lead to mail delays. As Reuters reported:
The reorganization, introduced in July, has resulted in thousands of delayed letters in southern Maine, as delivery drivers follow a new directive to leave on time, even if the mail has not been loaded.
Delays have also been reported in at least 18 other states, according to media reports.
"One aspect of these changes that may be difficult for employees is that—temporarily—we may see mail left behind or mail on the workroom floor or docks," says one memo, dated July 10. The plan hopes to eliminate 64 million working hours nationally to reduce personnel costs, according to another memo.
In a statement over the weekend, Rep. Peter DeFazio (D-Ore.) warned that Dejoy's "nefarious collective efforts will suppress millions of mail-in ballots and threaten the voting rights of millions of Americans, setting the stage for breach of our Constitution."
"It is imperative that we remove him from his post," said DeFazio, "and immediately replace him with an experienced leader who is committed to sustaining a critical service for all Americans."
TRUMP’S CFPB DEPLOYS PREDATORY LENDERS AS FIRST RESPONDERS TO PANDEMIC
The agency deregulated small-dollar lending by repealing key consumer protections on payday and auto title loans.
Terri Friedline
August 12 2020, 5:00 a.m.
https://theintercept.com/2020/08/12/cfpb-coronavirus-predatory-payday-loans/
ON JULY 30, Chair Maxine Waters opened the House Committee on Financial Services hearing with a frustrate and ominous message: “I would like to welcome Director Kraninger to what I hope will be her last appearance before this committee as CFPB director.”
Kathy Kraninger was being called to account for the Consumer Financial Protection Bureau’s failure to protect consumers during the coronavirus pandemic. In separate House and Senate hearings, committee members levied their sharpest criticisms against the agency’s plan to deregulate small-dollar lending by repealing key consumer protections on predatory products like payday and auto title loans. The final rule decided on by the agency tore out the heart of the policy by rescinding provisions that required lenders to assess a borrower’s ability to repay their loan.
Small-dollar lenders, such as Speedy Cash and TitleMax, intentionally design high-cost, low-quality products to make it almost impossible for borrowers to repay their loans under the original terms. Finance fees and average annual interest rates of 400 percent prevent most borrowers from repaying payday loans in full, with borrowers ending up in debt five months out of the year for what was deceptively marketed as a two-week loan. Other loans within this industry are just as harmful. Ninety percent of auto title loans are re-borrowed, and 20 percent of borrowers have their vehicles repossessed. This rule makes it easier for lenders to trap borrowers in cycles of debt.
Payday lenders are well known for taking advantage of the precarious conditions experienced by working-class and poor people — and which disproportionately affect Black and brown people. The average loan amount borrowed from a storefront payday lender is about $1,000. Contradicting the assumption that these lenders profit primarily from unpredictable crises such as a pay cut or medical emergency, a majority of borrowers — 69 percent — rely on payday loans to cover recurring expenses. People use these higher-cost loans to live day-to-day: buying groceries, paying bills, and making their rent or mortgage payments.
The CFPB’s rule makes this form of racial capitalism even more punishing by paving the way for predatory lenders to prey on marginalized borrowers and extract lucrative profits. The economic stimulus payments that Congress approved under the CARES Act appeared to help people make it through the early months of the pandemic, and new applications for small-dollar loans declined during March and April. Now, with Congress’s failure to extend benefits, loan applications are rising steadily along with eviction fears, job losses, and coronavirus infection and death rates. In one survey, 36 percent of lower-income households applied for some type of small-dollar loan in June and July. Black and brown households applied for these loans at a rate three times higher than did white households.
Near the end of the House Committee on Financial Services hearing, Illinois Rep. Jesús “Chuy” García described CFPB’s final rule as a scary example of how the agency is working on behalf of predatory lenders instead of consumers. “I represent a working-class, immigrant district. There are a lot of payday lenders in my district,” said García. “My community was hit hard by the last crisis and many people never recovered. … That’s why the CFPB was established during the last crisis to give ordinary people, like my neighbors in Chicago, their own voice. … But that’s not what we see from watching the bureau today.”
THE CFPB first revealed its proposed rule to regulate the small-dollar lending industry at a 2016 field hearing in Kansas City, Missouri. Up to that point, regulators had allowed the industry to escape federal oversight. Then-Director Richard Cordray, an Obama appointee, had led the agency in conducting extensive research on the industry’s harms to borrowers.
The CFPB’s decision to reveal its proposed rule in Kansas City was far from random. Kansas City and its white, wealthy suburbs were swimming with payday and other small-dollar lenders hungry for people’s money. Lenders sold payday loans with 1,000-percent interest rates nationwide out of their call center based in Overland Park, and local investors helped bankroll these lenders.
A multibillion-dollar payday lending enterprise overseen by a man named Scott Tucker was located just a few miles away in Leawood, with businesses that had names like Cash Advance and OneClickCash. Tucker put together the seed funding for his payday lending business in the 1990s, about the same time as the industry’s rapid nationwide expansion. By his early 30s, he had already developed several financial schemes and defrauded investors out of $100,000 — credentials he used to pitch investors.
Tucker grew his payday lending business into a nationwide enterprise over the next few decades. He worked hard to keep his illegal enterprise under the radar, including paying off local officials through campaign donations, creating a near-impenetrable multistate maze of shell companies, using the internet to expand his business, and exploiting Native tribes for sovereign immunity. His relationships with payday lenders were hard to pin down. Tucker had succeeded in keeping his name out of states’ earlier lawsuits against the payday lenders from which he was profiting, including in Colorado, Kansas, Nevada, North Carolina, Oklahoma, and Washington.
A 2011 investigative report revealed the sources of Tucker’s wealth, publicly chaining him to the payday lenders whose affiliations he had worked so hard to suppress. The Federal Trade Commission filed suit against Tucker in 2012, and Tucker and his attorney were arrested on racketeering and other charges in 2016. Tucker was sentenced to 16 years in prison, and the FTC won their largest penalty at the time with a judgment for $1.3 billion in 2018. The FTC returned $505 million to the people Tucker had defrauded. The judge presiding over the decision estimated that Tucker had victimized 1 percent of the U.S. population through predatory loans and fraudulent activity.
Tucker wasn’t even the only person from Kansas City running a payday loan enterprise. Numerous Kansas City-area moguls have been sued in recent years, including Timothy Coppinger, Frampton T. Rowland, Richard Moseley Sr., Richard Moseley Jr., and Josh Landy. The initial rule stopped them from abusive practices, such as charging unaffordable payments that forced repeat borrowing and created debt traps.
Trump was elected to the presidency a few months after the Kansas City field hearing. Since that time, his appointees, Interim Director Mick Mulvaney and current Director Kathy Kraninger, have hacked away at rule-making and used bureaucratic malaise to whittle away at the agency’s commitments to oversight and enforcement. One of Mulvaney’s first actions as interim director was to announce that the agency would reconsider the small-dollar lending rule. The Trump appointees even manipulated the agency’s research to make payday lenders appear less harmful. When the CFPB announced its final rule in July of this year, it hammered a nail into the coffin of the Cordray-era rule-making that steadfastly sought justice for borrowers defrauded by lenders like Tucker.
The CFPB announced the rule’s final fate as eviction moratoriums and expanded unemployment benefits were expiring — along with any remaining hope that America could rally the collective spirit needed to fight the coronavirus. Other federal regulators followed in lock step with the CFPB. The Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation subsequently announced proposed rules that would allow payday lenders to circumvent state interest rate caps. Moreover, Trump’s executive orders on payroll taxes and student loans defer payments instead of canceling them. By extending these payments into the future, Trump’s executive orders actually operate a lot like payday loans: taking advantage of people’s precarious conditions by offering immediate relief while their debts accumulate with no way of repaying them. Mutually reinforcing policy decisions effectively deploy predatory lenders and their 400-percent interest rates as first responders to the pandemic. Not willing to throw out life vests, Trump’s government encourages people to drown in debt.
Congress must act with urgency to protect borrowers from predatory lenders and to stave the flow of Black and brown income into white pockets, like Tucker’s. The Democrats’ HEROES Act, if passed, would initiate another round of economic stimulus payments that would likely reduce reliance on payday loans by giving people the money they need to live. Some states are stepping up in the CFPB’s absence. Policymakers in Virginia recently passed legislation to cap interest rates at 36 percent and ensure that borrowers can repay their loans. Wisconsin issued emergency guidance warning payday lenders not to raise interest rates and threatening to revoke licenses.
The House and Senate hearings provided a necessary public accounting of the CPFB. However, without federal intervention, people will have little choice but to rely on predatory lenders and their high-cost debt for surviving the pandemic. And they’ll have fewer protections, thanks to the CFPB’s final rule that promises to widen racial economic inequality during a pandemic instead of narrowing it.
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