What to Know in Washington: Giuliani’s Ukraine Role Scrutinized

Rudy Giuliani’s role in back-channel efforts to pressure Ukraine will come under closer scrutiny today as the House impeachment investigation hears public testimony from a U.S. diplomat who was abruptly ousted following what she has described as a smear campaign that he directed.

Marie Yovanovitch, who was removed as U.S. ambassador to Ukraine in May, previously testified that she was a casualty of an effort orchestrated by President Donald Trump’s personal lawyer and his associates, some of whom “may well have believed that their personal financial ambitions were stymied by our anti-corruption policy in Ukraine.”

While Yovanovitch will be on camera before the Intelligence Committee, there will be high interest in a closed session later in the day where a staff member at the U.S. embassy in Kyiv will be questioned about the bombshell revelation from the first public hearing on Wednesday — that Trump on July 26 asked envoy Gordon Sondland about the status of “investigations” sought from Ukraine.

David Holmes, the U.S. political counselor in Ukraine, was with Sondland in Kyiv when the call took place. His testimony could be the most direct evidence yet that the president was focused on pressuring Kyiv to launch a politically motivated investigation of former Vice President Joe Biden’s role in Ukraine and that of his son, Hunter Biden.

Today’s hearing presents a challenge for Democrats, who are focusing their impeachment investigation on whether Trump abused his power by withholding nearly $400 million in U.S. security assistance as leverage to pressure new Ukrainian President Volodymyr Zelenskiy for commitments to conduct those probes. The money was later provided to Ukraine, without such a public commitment. Read more from Billy House.

Photographer: Alex Edelman/Bloomberg
Yovanovitch arrives at the Capitol on Oct. 11.

Giuliani Faces U.S. Probe: Meanwhile, Giuliani is being investigated by federal prosecutors for possible campaign finance violations and a failure to register as a foreign agent as part of an active investigation into his financial dealings, according to three U.S. officials. The probe of Giuliani, which one official said could also include possible charges on violating laws against bribing foreign officials or conspiracy, presents a serious threat to Trump’s presidency from a man that former national security adviser John Bolton has called a “hand grenade.” Read more from Chris Strohm and Jordan Fabian.

Trump Says Former Bolton Deputy Has ‘No Business’ in Court: Trump said his former deputy national security adviser has “no business” asking a federal judge whether he must comply with a congressional subpoena to testify at the impeachment hearings. Trump asked the judge to throw out Charles Kupperman’s lawsuit seeking direction from the court. The president claims to have absolute power to decide whether his advisers can testify. Read more from Edvard Pettersson.

Trump Shows Transcript to GOP: Trump showed a group of Republican senators a transcript of his April 21 call congratulating Zelenskiy on his election as the president of Ukraine. “It was a very nice congratulatory call,” Sen. Kevin Cramer (R-N.D.) told reporters yesterday after the president’s lunch meeting with about 10 GOP senators. “He just shuffled it across the table, I read it and gave it back, as did a few others,” Cramer said. “It was a very short read.” Trump said on Wednesday that he planned to release a summary of the call this week. Read more from Steven T. Dennis.

Trump Lawyer Takes Ukrainian Client: Trump’s longtime lawyer has a new client, a Ukrainian billionaire who launched the career of Zelinskiy. Marc Kasowitz, a New York lawyer who has frequently worked for Trump over the years and helped him coordinate his response to the U.S. special counsel’s Russia investigation, recently signed on to defend Igor Kolomoisky, according to a court filing in Delaware. Kasowitz is representing Kolomoisky to fight civil claims in the U.S. that he stole billions of dollars from a Ukrainian bank and used the money to buy office buildings and businesses in the U.S. Read more from Greg Farrell.

Happening on the Hill

Surprise Billing May Ride on Spending Bill: House and Senate committee leaders say they’re nearing a deal on a surprise medical billing package that likely could be added to a year-end spending bill. Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee, said he and his Democratic counterpart on the panel, Sen. Patty Murray (D-Wash.), have been meeting with House committee leaders to strike a deal between their legislation to combat surprise medical bills and the one approved earlier this year by the House Energy and Commerce Committee. Read more from Alex Ruoff.

Veterans Aid to For-Profit Colleges: Four senators released a bipartisan proposal yesterday that would restrict the amount of revenue for-profit colleges can generate from student veteran enrollment. For-profit colleges are limited to receiving no more than 90% of their revenue from federal student aid. But veterans benefits are exempted from the so-called 90/10 rule, which critics say makes those students targets for predatory colleges. The bill to be introduced by Sens. Tom Carper (D-Del.), James Lankford (R-Okla.), Bill Cassidy (R-La.), and Jon Tester (D-Mont.) would end the exemption for education benefits from the Veterans Affairs and Defense departments. Read more from Andrew Kreighbaum.

Cole Signs Onto Pell Grants Bill: Rep. Tom Cole (R-Okla.), the ranking member on the House Appropriations Labor-HHS-Education Subcommittee, signed on as a co-sponsor this week to legislation that would lift a quarter-century ban on federal student aid for incarcerated students. The REAL Act would make those students eligible for Pell Grants, the primary form of federal need-based aid for college students, Andrew Kreighbaum reports.

Ban on Predatory-Lending Tactic: A House committee approved a bill to protect small businesses from predatory lenders who seize their assets without warning using a legal instrument called a confession of judgment. The House Financial Services Committee voted yesterday 31 to 23 to advance the bill. The proposal, introduced by Rep. Nydia Velazquez (D-N.Y.) and Roger Marshall (R-Kan.), would ban confessions of judgment in business loans. Read more from Zeke Faux.

Warrantless Cell Data Collection: U.S. intelligence agencies stopped collecting historical cell tower and GPS information without a warrant because of a 2018 Supreme Court decision, the Office of the Director of National Intelligence told Sen. Ron Wyden (D-Ore.). The court raised “significant constitutional and statutory issues” about the practice in Carpenter v. United States, Benjamin T. Fallon, the office’s assistant director for legislative affairs, wrote in a letter to Wyden. The court ruled that holding such historical data for over seven days required a warrant under the Fourth Amendment. Intelligence officials can still obtain historical cell tower and GPS information if they get a probable cause-based warrant, Fallon said. Read more from Daniel R. Stoller.

Tlaib, Huizenga, Spano Probes: The House Ethics Committee said that it is investigating possible campaign finance violations by Reps. Rashida Tlaib (D-Mich.) and Rep. Bill Huizenga (R-Mich.). An investigation of possible campaign finance breaches by Rep. Ross Spano (R-Fla.) has been deferred at the request of the Justice Department, according to the committee. The panel usually defers to the department if DOJ is conducting a criminal investigation, Kenneth P. Doyle reports.

• The committee released reports from the independent Office of Congressional Ethics indicating that the probe of Tlaib involves payments to her by her campaign committee, which lawyers for Tlaib said are legal. The Huizenga matter involves possible impermissible campaign contributions. Spano’s investigation relates to possible impermissible loans to his campaign.

The committee is also investigating allegations related to a personal relationship between Rep. Alcee Hastings (D-Fla.) and an individual employed in his congressional office, according to a statement. The panel is gathering additional information regarding the allegations and notesthe fact it is investigating does not indicate any violation occurred, Megan Howard reports.

Elections, Politics & Policy

DNC Announces 10 Candidates for Next Debate: The Democratic National Committee yesterday announced the 10 candidates who will participate in the fifth Democratic primary debate in Atlanta on Wednesday. They are: Joe Biden, Cory Booker, Pete Buttigieg, Tulsi Gabbard, Kamala Harris, Amy Klobuchar, Bernie Sanders, Tom Steyer, Elizabeth Warren and Andrew Yang.

Biden Leads Warren in Nevada Poll: Biden tops a Fox News poll of Democratic Nevada caucus-goers with 24% support, while progressive Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) are tied at 18%. The poll is good news for Biden, who remains the front-runner, but has slipped in recent surveys of primary states, including Iowa and New Hampshire. Pete Buttigieg comes in fourth, at 8% in the Nevada poll, an improvement over the 4.8% he’s tallied in the RealClearPolitics average for the state. The poll of Nevada Democrats had a margin of error of 4 points. Read more from Bill Allison.

Patrick Sees ‘Opportunity’ for Big Change: Deval Patrick, the former Massachusetts governor who officially joined the presidential race yesterday, said on CNN that he sees “an opportunity to take big systematic change to bring us back together.” “It is about an ambitious agenda that engages people in it as their agenda,” Patrick said. “that’s the way I’ve campaigned in the past, that’s the way I am now.” Patrick said he waited to get into the race because when he was debating whether or not to run last year, his wife was diagnosed with uterine cancer. He said he had to focus on her “no matter how tempting” a run seemed. She is now cancer-free. Read more.

Warren’s Number-Crunchers Out of Sync With Her: Warren is careful to cite economic experts to back up the costs of her multi-trillion-dollar policy plans. But even those experts disagree among themselves about how or whether those plans will work. University of California Berkeley economists Emmanuel Saez and Gabriel Zucman advised Warren on her wealth tax and say she could raise $2.75 trillion over a decade by imposing a 2% tax on wealth worth $50 million or more, going up to 3% for wealth of more than $1 billion. But Mark Zandi, chief economist at Moody’s Analytics who Warren’s campaign asked to review her separate Medicare-for-All funding plan, which includes an additional 3% tax on wealth over $1 billion among other levies, is skeptical it would bring in that much money. Read more from Sahil Kapur and Katia Dmitrieva.

Biden Blasts Inaction on Guns: Biden vented his frustration about the U.S. government’s failure to enact tougher gun restrictions after a shooting at a school in Southern California yesterday left at least two students dead, but added that he doesn’t envision any action as long as Trump is president. “I’m so tired of people talking about your prayers. Dammit, we have to protect these kids. We have to do it now,” the Democratic presidential candidate said at Los Angeles Trade-Technical College, about 45 miles south of Santa Clarita, where the shooting at Saugus High School took place. Read more from Jennifer Epstein.

Yang Proposes Tax on Digital Ads: Democratic presidential candidate Andrew Yang proposed a tax on digital ads that takes aim at the revenue models of companies such as Facebook and Google. Along with a proposal for a cabinet-level secretary of technology, the value-added tax was among a series of ideas for regulating privacy, antitrust issues and digital platforms’ impact on democracy released Thursday by the former tech entrepreneur. “Digital giants such as Facebook, Amazon, Google and Apple have scale and power that renders them more quasi-sovereign states than conventional companies,” said Yang, who founded Venture for America, a fellowship program for people who want to work in start-ups. Read more from Ben Brody.

Utilities’ Executive Bonuses: Bankrupt publicly-traded utilities would be barred from paying executive bonuses under legislation proposed by Democratic presidential candidate Sen. Kamala Harris (D-Calif.). The proposal comes after San Francisco-based PG&E asked the court to pay certain executives up to $16 million based on certain performance metrics. PG&E is in the midst of the largest utility bankruptcy in U.S. history, after regional wildfires tied to its equipment failure saddled the company with massive liabilities. Read more from Daniel Gill.

RNC to Hold Meeting at Trump Resort: The Republican National Committee plans to hold its annual winter meeting at Trump’s Doral resort in Miami, weeks after the White House reversed its decision to hold next year’s Group of Seven summit at the property. The RNC said it signed the contract for the January gathering before Trump reversed course last month over the location of the G-7 meeting. The president faced criticism that hosting the foreign leaders at his resort posed a conflict of interest. Read more from Justin Sink.

Around the Administration

DeVos to Release Documents on Student Loan Relief: Education Secretary Betsy DeVos agreed to release documents relating to her policies on loan relief for defrauded college students late yesterday, hours ahead of a planned subpoena by House Democrats. House Education and Labor Chairman Bobby Scott (D-Va.) had been seeking records on the Trump administration’s decision-making on loan relief for months without satisfactory responses from the Education Department.

Democrats are looking to find out why the Education Department has stopped approving loan relief claims from tens of thousands of students who attended for-profit college chains. Student borrowers are waiting for resolution of more than 200,000 “borrower defense” claims still pending at the department. Read more from Andrew Kreighbaum.

Amazon Plans JEDI Lawsuit: Amazon has given notice that it will file a lawsuit challenging the Defense Department’s decision to award Microsoft a cloud computing contract valued at up to $10 billion over a decade. The e-commerce giant plans to lodge its complaint against the contract in the U.S. Court of Federal Claims, Seattle-based Amazon confirmed. Oracle is also mounting a legal challenge to the cloud contract, known as the Joint Enterprise Defense Infrastructure. The project is designed to consolidate the Defense Department’s cloud computing infrastructure and modernize its technology systems. Read more from Naomi Nix.

Trump Asks to Block Tax Subpoena: Trump asked the U.S. Supreme Court to prevent his tax returns from being turned over to a New York prosecutor, filing a high-stakes appeal that aims to give the president broad immunity from criminal investigations while in office. The appeal, which Trump’s personal lawyer said was filed yesterday, marks the first time the Supreme Court has been drawn into an investigation of the president’s personal conduct and business dealings. Trump’s lawyers also plan to seek high court review of a separate ruling that would give Congress access to his financial records. Read more from Greg Stohr.

N.Y. Demands Quick Restitution Payment: New York wants Trump to quickly pay $2 million in court-ordered restitution after he admitted misusing his personal charitable foundation by raising money for political purposes during the 2016 campaign and other violations. In a court filing this week, New York Attorney General Letitia James asked a judge to give Trump 10 days to make the payment and resolve New York’s 2018 lawsuit over violations of state nonprofit rules. The state asked for a Nov. 20 hearing on the request in Manhattan. Read more from Erik Larson.

Kavanaugh Says He Went Through Ugly Process: U.S. Supreme Court Justice Brett Kavanaugh told an influential conservative group he went through an “ugly process” during his divisive Senate confirmation fight, as he made his first major speech since taking his seat 13 months ago. Kavanaugh was greeted enthusiastically yesterday by most of the 2,000-plus people attending the annual Washington dinner of the Federalist Society, a group whose members helped put him on the court. A handful of demonstrators blew rape whistles at the start of his speech, alluding to the sexual assault allegations that nearly derailed his confirmation. ”I signed up for what I knew would be an ugly process — maybe not that ugly,” said Kavanaugh, Trump’s second Supreme Court appointee. Read more from Greg Stohr.

Foreign Affairs

North Korea Masters Sanctions Evasion: North Korea is poking holes through a global web of sanctions and generating enough cash to keep its nuclear weapons program moving along as a year-end deadline Kim Jong Un set to reach a deal with the U.S. approaches — with little progress in sight. Instead of “concrete, verifiable steps toward denuclearization” — a mantra of Trump’s policy toward Pyongyang — Kim has yet to make any concessions on his nation’s nuclear program. The ability of the North Korean leader to find ways around United Nations sanctions is making it difficult for America’s “maximum pressure” campaign to deliver on what the Trump administration has promised. Read more from David Wainer.

Esper Presses South Korea for Troop Funding Boost: Defense Secretary Mark Esper said during a visit to South Korea that Seoul needed to contribute more to host U.S. troops, after Trump has asked one of America’s most important military allies to quintuple its current payment. Esper made the comments during a high-stakes visit to South Korea as part of an eight-day trip through Asia. Its results could determine how well the Trump administration can keep allies Japan and South Korea together as they face threats from the likes of North Korea, and whether other countries hosting U.S. troops will face Trump’s pressure to pay far more to keep them. Read more from Glen Carey and Kanga Kong.

China Deal Down to the ‘Short Strokes’: White House economic adviser Larry Kudlow said negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in close contact. Speaking after an event at the Council on Foreign Relations late yesterday in Washington, Kudlow told reporters that a deal was close though “not done yet.” Trump’s top trade advisers met last night to discuss the China talks, said Kudlow, who heads Trump’s National Economic Council. “We are coming down to the short strokes,” Kudlow said. “We are in communication with them every single day right now.” Read more from Shawn Donnan.

NASA Faulted for Boeing Payment: NASA paid Boeing an “unnecessary” $287.2 million premium for work on a new space vehicle, a payment meant to compensate for scheduling delays caused by the company, a government audit found. The additional compensation, disclosed yesterday in a NASA inspector general report, was intended to mitigate the effects of a delay in four planned flights to ferry astronauts to the space station, according to the audit. But NASA postponed the flights because Boeing had missed its own deadlines, the report said. Read more from Justin Bachman.

U.S. Warns Egypt of Sanctions: The U.S. sent a letter to Egypt’s government warning of possible sanctions over Cairo’s decision to move forward with plans to buy Russian jets, according to an official familiar with the decision. According to the person, the letter said that any major new arms deal with Russia would “complicate” future U.S. defense transactions with and security assistance to Egypt. The letter, sent by Secretary of State Michael Pompeo and Esper, is an unusual rebuke of a close Middle Eastern ally. The Trump administration has worked to build close ties with Egyptian President Abdel-Fattah El-Sisi. Read more from Nick Wadhams.

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