What to Know in Washington: Democrats Continue Trump Scrutiny

Congressional Democrats yesterday issued subpoenas to Deutsche Bank and other banks to obtain long-sought documents indicating whether foreign nations tried to influence U.S. politics, signaling an escalation of their probes into Trump’s finances and any dealings with Russians.

House Intelligence Chairman Adam Schiff (D-Calif.) said his panel made the requests yesterday in coordination with the House Financial Services Committee, according to a statement.

Both panels have been seeking Trump-related material from Deutsche Bank since Democrats took over the House majority in January. Schiff said the Frankfurt-based bank has been cooperative with the probe and yesterday’s request was a “friendly subpoena.” Such a subpoena is typically submitted when a firm is willing to hand over documents but wants a formal request first.

“Deutsche Bank is engaged in a productive dialogue with the House Financial Services and Intelligence Committees,” Deutsche Bank spokeswoman Kerrie McHugh said yesterday. “We remain committed to providing appropriate information to all authorized investigations in a manner consistent with our legal obligations. If you have questions concerning the investigative activities of the committees, we would refer you to the committees themselves.”

Eric Trump, the president’s son and executive vice president of the Trump Organization, said the subpoena set a “horrible precedent.”

“This subpoena is an unprecedented abuse of power and simply the latest attempt by House Democrats to attack the president and our family for political gain,” he said in a statement last night.

The House Financial Services Committee has long been in talks with Deutsche Bank about Trump-related records, including any tied to Russia. Chairwoman Maxine Waters (D-Calif.) signaled last week that her interest in Russia extended to other lenders as well. At an April 10 hearing where the chief executive officers of the biggest U.S. banks testified, she asked them about customer accounts linked to that country. Read more from Billy House.

Photographer: Andrew Harrer/Bloomberg
Schiff at a House Intelligence Committee hearing in March.

More Congressional Scrutiny

Mueller’s Report Likely Coming Thursday: Attorney General William Barr is expected to send Special Counsel Robert Mueller’s report to Congress and make it public on Thursday morning, an event two years in the making that could offer new revelations damaging to Trump or reinforce his claims of vindication. The likely timing was announced yesterday by Justice Department spokeswoman Kerri Kupec.

Those following Mueller’s investigation will examine the report’s almost 400 pages for any new disclosures of contacts between Trump’s 2016 campaign and Russian operatives who interfered in the election, as well as evidence that the president sought to obstruct justice by interfering in the probe. Read more from Chris Strohm.

Trump Says Migrants Will Go to Sanctuary Cities: Trump said that migrants caught crossing the southern border will be sent to “sanctuary cities” if they can no longer be legally detained. Trump announced the shift in policy on Twitter—along with a demand that “Congress must fix the laws and loopholes”—after he earlier said the policy shift was under consideration.

Before the president’s tweet, three House committee chairmen demanded to see internal White House and Homeland Security communications related to Trump’s plans for release of the migrants. “These reports are alarming,” wrote Judiciary Chairman Jerrold Nadler (D-N.Y.), Oversight and Reform Chairman Elijah Cummings (D-Md.) and Homeland Security Chairman Bennie Thompson (D-Miss.), in a letter to acting White House Chief of Staff Mick Mulvaney and acting Homeland Security Secretary Kevin McAleenan. Read more from Billy House.

The House last week threw its support behind a federal suit seeking to bar the administration from moving forward with construction of a wall along the U.S. border with Mexico. The House filed a friend of the court brief in federal court in California in support of Sierra Club’s request for a preliminary ban on spending funds on a wall. Read more from Peter Hayes.

Trump Lawyer Slams Democrats Over Tax Returns: Trump’s personal lawyer bashed House Ways and Means Chairman Richard Neal’s (D-Mass.) renewed demand for the president’s tax returns, suggesting his committee’s request could be unconstitutional. In a letter to the Treasury Department’s General Counsel Brent McIntosh, Trump attorney William Consovoy wrote that Neal was wrong in asserting that Treasury couldn’t “question or second-guess” Congress’s motives. Read more from Joe Light.

Trump Tops Cash Haul Heading Into 2020

Trump Leverages Incumbent Advantage: Fundraising totals for 2020 candidates show the advantage of being an incumbent president—and the challenge for Democrats, who are raising less money and still have to compete among themselves before taking on Trump.

The Trump campaign and joint fundraising committees ended the first quarter with $48.9 million in the bank, more than three times as much as any of the potential challengers in a crowded Democratic field, according to disclosures filed with the Federal Election Commission yesterday.

The first-quarter filings offer early evidence of who’s generating buzz among Democratic grassroots donors as the party distances itself from big money and instead woos those who give in small amounts online. Sen. Bernie Sanders (I-Vt.) led all Democratic contenders in fundraising, fueled by small-dollar donors, while Sens. Cory Booker (D-N.J.) and Kirsten Gillibrand (D-N.Y.) struggled to raise a significant share of their money that way. Read more from Bill Allison and John McCormick.

Sen. Kamala Harris’s (D-Calif.) campaign ended the first quarter of 2019 with $9 million cash on hand after raising $12 million and transferring $1.2 million from her Senate committee, Bill Allison reports. And South Bend, Ind., Mayor Pete Buttigieg (D) cracked the top tier of Democrats with $7.1 million, Allison reports.

Weld Makes 2020 Bid as Republican: Former Massachusetts Gov. Bill Weld (R) said he will run for the Republican presidential nomination for 2020, challenging Trump. “In these times of great political strife, when both major parties are entrenched in their ‘win at all cost’ battles, the voices of the American people are being ignored and our nation is suffering,” Weld said in a statement, Ben Livesey reports.

Trump Touts Tax Cuts in Minnesota: Trump touted tax cuts passed two years ago by his party, even as it’s swelled the deficit and failed to gain traction with voters in last year’s midterm elections. “We’re getting historic tax relief,” Trump said yesterday. The visit to Minnesota, a potential swing state in 2020, is part of a week of events designed to promote the tax law’s effects on the economy as he turns to his re-election campaign. Read more from Alyza Sebenius.

Related: Trump’s Tax Reform Curbs Housing Activity, Fed Researchers Say

Sanders Pitches Progressivism on Fox: Sanders asked Rust Belt voters to embrace his most progressive ideas at a Pennsylvania town hall aired on Fox News as he tries to make inroads with the working-class voters who were drawn to Trump in 2016. Sanders promoted his proposals for free public college tuition and a “Medicare for All” government-run health program and defended democratic socialism as a system to create a government and economy “that works for all.” Read more from Laura Litvan.

Warren Lays Out Public Lands Agenda: Sen. Elizabeth Warren (D-Mass.) released her plan for managing U.S. public lands, saying she would on day one as president “sign an executive order that says no more drilling – a total moratorium on all new fossil fuel leases, including for drilling offshore and on public lands.” She said she’ll set a 10 percent goal for U.S. electricity generation from renewable sources offshore or on public lands.

Broadly speaking, the plan seeks to pivot toward conservation, recreation and renewables, and away from fossil energy production. Among other proposals include making entry to U.S. national parks free and labeling Land and Water Conservation Fund as mandatory spending. Read more from Derek Wallbank and Sahil Kapur.

Democrats Unveil Tax Returns

Sanders Earned Half-Million Last Year: Sen. Sanders released a decade’s worth of his tax returns after years of resisting disclosure as he makes a second run at the presidency against Democratic Party rivals who made financial transparency a litmus test for the campaign.

The returns show that Sanders and his wife, Jane, earned more than $1 million in total income in 2016 and 2017. They earned $519,529 of taxable income in 2018, paying $145,840 in federal taxes for an effective rate of 28 percent. He reported income from his job in the Senate and more than $381,000 in income from book royalties in 2018. His books earned him $875,000 in royalties in 2017.

In 2017, when the Sanders earned nearly $1.2 million, they paid an effective rate of nearly 32 percent. Read more from Laura Davison, Joe Light and Lynnley Browning.

Klobuchar Tax Returns Show $338,483: Sen. Amy Klobuchar (D-Minn.) released her most recent tax return, showing a total income of $338,483. Klobuchar and her husband filed jointly and paid $65,927 in federal income taxes. In addition to her Senate salary, Klobuchar reported $27,000 of profit from her book “The Senator Next Door: A Memoir.” Read more from Laura Davison.
O’Rourke Tax Returns Show $370,412: Former Rep. Beto O’Rourke (D-Texas) released a decade’s worth of tax returns showing that in 2017, he and his wife, Amy, made $370,412 from his salary, investments and other income. O’Rourke paid $81,019 in taxes on $288,786 in taxable income, paying an effective tax rate of 28 percent. Read more from Laura Davison and Joe Light.

Movers & Shakeups

Ex-Trump Aides Bring Baggage to Job Market: The job market for former Trump administration officials has been varied at best, as former Homeland Security Secretary Kirstjen Nielsen and others soon leaving the administration are about to learn. She’s one of more than 60 high-ranking White House and executive branch officials who have stepped down in the last three years.

“This isn’t the usual kind of partisan crowd that goes through the revolving door, this is something completely different,” said Ivan Adler, a K Street headhunter at The McCormick Group. “It’s been challenging because corporations are really conservative on hiring in general,” Adler said. “The corporate world is afraid of the potential negatives that come with hiring people that have been part of this administration.” Read more from Megan R. Wilson.

Interior Watchdog Probing Bernhardt: The Interior Department’s inspector general has opened an investigation into Secretary David Bernhardt, the agency watchdog confirmed in letters to congressional Democrats and ethics groups that requested the probe. Bernhardt, a former energy and natural resources lobbyist who was confirmed to lead the Interior Department last week, has been accused of using his position to help former clients of his firm Brownstein Hyatt Farber Schreck LLP.

Government watchdog groups and lawmakers alleged that Bernhardt may have violated federal ethics rules by participating in matters he lobbied on in the two years before his appointment, specifically by participating in an evaluation of water diversion in California’s Central Valley. Bernhardt previously represented the Westlands Water District in California. Read more from Ari Natter.

New CBP Head: John Sanders, the COO of U.S. Customs and Border Protection, has been named temporarily to lead the agency, acting Homeland Security Secretary Kevin McAleenan said in a statement.

What Else to Know Today

BGOV Podcast—USMCA Faces Intricate Political Path: A report coming this week on the economic effects of the new U.S.-Mexico-Canada Agreement could set congressional consideration of the USMCA in motion this spring. On this episode of the “Suspending the Rules” podcast from Bloomberg Government, legislative analyst Sarah Babbage highlights Democrats’ critiques of the deal and its path forward in the three trading partners’ legislatures.

Once the Trump administration submits the deal to Congress, it will be considered under expedited fast-track procedures with no opportunity for amendments. Before House Democrats consider it, they’re calling for changes to the deal’s labor and environment enforcement, pharmaceutical protections, and more. Listen here.

Trump’s New Rules Chief to Oversee Big Rollbacks: Trump is counting on Paul Ray, a lawyer with a history of representing oil and gas interests among others, to lead his regulatory affairs office. The easy cutbacks on rules are long gone, leaving agencies to slash at Obama-era rules that took years of data and lobbying to put in place. Carmakers are rebelling against plans to ease emission standards, while environmentalists are shredding the analysis supporting less stringent air-pollution rules.

At the same time, Trump agencies are losing legal challenges to their initial rule delays about 95 percent of the time, according to a tracker maintained by the New York University School of Law. Read more from Cheryl Bolen.

Calabria Vows Urgency in Overhaul: The new regulator for Fannie Mae and Freddie Mac says he takes the role with a “great sense of urgency” to address the biggest piece of unfinished business from the 2008 financial crisis: U.S. control of the mortgage-finance giants. “The mortgage market was at the center of the last crisis, as it has been for many past financial crises,” Federal Housing Finance Agency Director Mark Calabria said in his first official remarks as head of the office. “I believe the foundations of our current mortgage finance system remain vulnerable.” Read more from Austin Weinstein.

Microsoft Backs Carbon Tax: Microsoft is joining a climate advocacy group backed by big energy corporations and high-profile Republicans, an effort by the software giant to find middle ground on environmental issues that have polarized U.S. politics. The company said it will back the Climate Leadership Council to push for a carbon tax, while accelerating a pledge to use more green energy in its data centers. The Climate Leadership Council has pitched a tax on carbon emissions to the White House, selling the plan as an economic win that could drive job growth while yielding environmental benefits. Read more from Dina Bass.

Ex-Obama Lawyer Faces August Trial: Gregory Craig, a former Obama White House lawyer who was swept up in Special Counsel Robert Mueller’s investigation, faces a two-week trial in August on charges he lied to the government and concealed work he did for a pro-Russian Ukrainian regime. U.S. District Judge Amy Berman Jackson at a hearing in Washington yesterday set a tight schedule of pre-trial deadlines to accommodate Craig’s and the government’s stated desire to wrap up the case quickly. Jackson, who has overseen several cases stemming from Mueller’s probe, denied Craig’s request to keep his passport after prosecutors said that allowing him to keep the document would amount to “special treatment.” Read more from Erik Larson.

Guns, Violence, Gorsuch in Spotlight: The government wants violent criminals off the street. Defendants want laws that make clear what’s illegal. Arguments at the U.S. Supreme Court in a consequential criminal case tomorrow could give clues about which side will win the dispute implicating those arguably competing ends. It could turn on a contentious 5-4 decision from last term in which Justice Neil Gorsuch cast the tie-breaking vote for an immigrant the government wanted to deport. Gorsuch could again be the deciding vote here, but it’s unclear which way he and a majority of the court will go. A decision is expected by late June. Read more from Jordan S. Rubin.

Rap Lyrics Case: Rap lyrics and the First Amendment won’t be in the spotlight at the U.S. Supreme Court next term. The justices denied review in a rap artist’s appeal of convictions for terroristic threats and witness intimidation based on one of his songs that allegedly threatened to kill police. Jamal Knox performs under the stage name “Mayhem Mal.” He wanted the justices to settle “once and for all” whether, to establish that a statement is a true threat unprotected by the First Amendment, the government must show that a “reasonable person” would regard the statement as a sincere threat of violence, or whether it is enough to show only the speaker’s subjective intent to threaten. Read more from Jordan S. Rubin.

France Vows to Rebuild Notre Dame: It took more than 12 hours to fully extinguish the flames that ripped through Notre-Dame Cathedral. It will take many years for a shocked nation to restore one of its defining icons. After the blaze was finally extinguished, authorities were left scrambling to assess the stability of the seriously damaged structure, and counting how many of the ancient relics housed in the monument had been saved. “We will rebuild Notre-Dame because that’s what the French people want,” President Emmanuel Macron vowed late last night. “That’s what our history deserves, because that is our destiny.” Read more from William Horobin and Melissa Pozsgay.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com