What to Know in Washington: Mulvaney Admits, Denies Quid Pro Quo

Mick Mulvaney set out to offer an impassioned defense of President Donald Trump’s dealings with Ukraine, but he may have only made matters worse for his boss — and himself.

Mulvaney, the acting White House chief of staff, yesterday seemed to admit what Trump had been denying for weeks: that the president offered Ukraine a quid pro quo for badly needed military aid in exchange for investigating his political opponents.

He later denied it, but his words from a press briefing — “get over it” and “there’s always going to be political influence in foreign policy” — belied his later statement.

Democrats quickly seized on Mulvaney’s comments at the briefing. One of Trump’s lawyers disowned them, people at the Justice Department expressed confusion and chagrin at what he said about its role, and Republicans expressed disquiet. House Intelligence Chairman Adam Schiff (D-Calif.), one of the leaders of the impeachment inquiry against Trump, tweeted, “Things just went from very, very bad to much, much worse.”

When Mulvaney was asked about Ukraine, he commented as a key player in a disputed chain of events: He suspended aid to the country shortly after a July phone call where Trump told Ukrainian President Volodymyr Zelenskiy that he wanted him “to do us a favor” and that “there’s a lot of talk” about Vice President Joe Biden’s son, and that Biden had stopped” a prosecution in Ukraine. The uproar over that phone call led to the impeachment inquiry.

In his news conference yesterday, Mulvaney insisted that he never held up U.S. aid to get Ukraine’s president to investigate Biden. But he was more forthright about another quid pro quo: that the president used the funds partly to force Ukraine to look into a conspiracy theory about Democrats plotting to manipulate the 2016 election and a missing computer server. “The look back to what happened in 2016 certainly was part of the thing that he was worried about in corruption with that nation,” Mulvaney told reporters. “And that is absolutely appropriate.”

Hours later, he denied his own remark. “Let me be clear, there was absolutely no quid pro quo between Ukrainian military aid and any investigation into the 2016 election,” Mulvaney said in a statement emailed by the White House. “The president never told me to withhold any money until the Ukrainians did anything related to the server. The only reasons we were holding the money was because of concern about lack of support from other nations and concerns over corruption.” Read more from Jennifer A. Dlouhy and Ben Brody.

Photographer: Andrew Harrer/Bloomberg
Mulvaney during a news conference in the White House press briefing room on Thursday.

Defense Official’s Testimony Is Postponed: Laura Cooper, a deputy assistant secretary for the Defense Department, who had been scheduled to speak to House impeachment investigators on Friday, will not appear, a person familiar with the matter said last night, Justin Sink reports. Cooper, the deputy assistant secretary for Russia, Ukraine and Eurasia, instead will testify on Oct. 24, added the person, who was granted anonymity to discuss the postponement.

Records Gathered in Probe of Giuliani Allies: U.S. authorities investigating an alleged effort by associates of Rudy Giuliani to funnel foreign money into U.S. election campaigns have collected records of financial transactions for more than 50 bank accounts as well as correspondence on 10 email addresses, a federal prosecutor said in a New York courtroom yesterday. The disclosure suggests an investigation potentially encompassing a vast array of people and money beyond what has been publicly disclosed since charges were first filed against four defendants last week, including two men close to Giuliani who were arrested by the FBI as they tried to leave the country with one-way plane tickets. The probe has been active for at least several months, before U.S. Attorney General William Barr assumed office, Bloomberg reported last week. Read more from Christian Berthelsen.

Congress Pushes Forward On Turkey Sanctions

Republican and Democratic lawmakers vowed to move ahead with sanctions on Turkey despite the announcement by Vice President Mike Pence that Turkish President Recep Tayyip Erdogan agreed to temporarily halt hostilities in northern Syria.

Sens. Lindsey Graham (R-S.C.) and Chris Van Hollen (D-Md.) said they welcomed the agreement but will continue urging their colleagues to sign on to the sanctions bill they introduced yesterday. That measure would sanction Turkish leaders, financial institutions and its energy sector, as well as prohibit any U.S. firms or individual from buying the country’s sovereign debt.

Senators of both parties said the deal Pence outlined doesn’t do enough to protect the Kurds who fought with the U.S. against the Islamic State and have been targeted by Turkish forces seeking to occupy Syrian territory south of Turkey’s border.

House Foreign Affairs Chairman Eliot Engel (D-N.Y.), who sponsored the bipartisan House sanctions bill, said his committee will continue with its work on penalties for Turkey. ”I am glad there is a cease fire, it’s a good sign, but let’s see if it lasts,” Engel said. ”Last time I had confidence in Turkey was a long time ago.”

Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) dismissed the deal with Turkey that Pence announced yesterday. “Next week, the House will pass a strong, bipartisan sanctions package to work to reverse the humanitarian disaster that President Trump unleashed in Syria,” they said. Read more from Daniel Flatley and Anna Edgerton.

Happening on the Hill

Senate Spending Bills Next Week: The Senate will take up and debate two packages of fiscal 2020 spending bills next week in order to jump-start the appropriations process, Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday. McConnell will first bring up a package of domestic spending bills. If work on that package is successful, McConnell said he plans to bring up another package focused on the defense measure. Read more from Nancy Ognanovich.

Big Tech Data Dominance: U.S. technology giants pose a threat to competition and innovation around the world through collection and control over massive amounts of consumer data, Federal Trade Commissioner Rohit Chopra will tell Congress today. Dominant tech companies have gained enormous competitive advantages from data, which deserves special attention from antitrust officials and lawmakers, Chopra, a Democrat on the Republican-led commission, will tell the House Judiciary’s antitrust subcommittee. Read more from Ben Brody and Daniel Stoller.

Hoyer Says No Action on Gun Bills: Gun control legislation including red flag bills, limits on magazine capacity and an assault weapons ban are unlikely to come to the House floor as long as the Senate doesn’t take up a gun control background check bill, House Majority Leader Steny Hoyer (D-Md.) said.

Democrats in the House and Senate have held a number of events highlighting a background check bill that passed the House with the support of nearly all Democrats and eight Republicans, Emily Wilkins reports.

“We don’t want to distract from that,” Hoyer said yesterday at a Bloomberg Government event. He added the other gun control bills could take attention away from the background checks bill. Hoyer said while the red flag and assault weapons bills were important, none of them would pass if the background checks bill couldn’t. “We want to put pressure on the Senate,” he said “Put it on the floor, and it will pass.”

Drug Bill Advances Second Panel: A House panel advanced a bill on a party-line vote to direct the government to negotiate the price of certain drugs. The House Energy and Commerce Committee voted 30-22 to approve H.R. 3, which would direct the government to negotiate the prices of the most expensive drugs that have little or no competitors on the market, capping them relative to their price in six other countries. Earlier yesterday, the bill also won House Education & Labor Committee approval by a 27-21 vote, which was also along party lines. The Ways and Means Committee is expected to mark it up next week, with the full House considering the measure the following week. Read more from Alex Ruoff.

Whistleblower Antitrust Protection: The Senate passed legislation that would provide protections for whistleblowers who report antitrust violations. The bill, sponsored by Senate Finance Chairman Chuck Grassley (R-Iowa), a strong proponent of whistleblower protections, was approved by unanimous consent. The bill would protect whistleblowers who disclose possible price-fixing, bid-rigging, and other antitrust violations by preventing employers from retaliating against employees. “Without the help of industry whistleblowers, these sorts of violations often fly under the radar,” Grassley said in introducing the bill in July, Nancy Ognanovich reports.

Disappearance of Saudi Nationals: The Senate passed legislation that would require the FBI to provide information on the disappearance of Saudi Arabian nationals accused of crimes in the U.S. The bill passed by unanimous consent after Sen. Ron Wyden (D-Ore.) outlined how many Saudi nationals charged in the U.S. with crimes, including manslaughter and sexual assault, have ended up back in their home country where they wouldn’t face trials. The measure would require the FBI to declassify all information on whether the Saudi government helped a citizen or Saudi national in departing the U.S. while they were awaiting trial or sentencing for crimes, Nancy Ognanovich reports.

House Approves SEC Investor Testing Bill: A Democratic bill requiring the SEC to study whether retail investors find disclosures to them useful passed the House without any Republican support. The House yesterday voted 229-186 along party lines in favor of the SEC Disclosure Effectiveness Testing Act. The measure from Rep. Sean Casten (D-Ill.) didn’t win over Republicans when the House Financial Services Committee advanced it in March, either. Read more from Andrew Ramonas.

Mexico Tries to Entice Democrats: Mexico’s President Andres Manuel Lopez Obrador is pledging close to $1 billion to implement a law to improve labor conditions that U.S. Democrats say is key to passing a stalled North American trade accord. Mexico’s Finance Ministry will ask lawmakers to boost the budget that was already presented to Congress by $69 million next year, Lopez Obrador said in a letter sent to House Ways and Means Chairman Richard Neal (D-Mass.). He promised another $830 million over the following three years to fund the labor overhaul. Read more from Nacha Cattan.

Truck Mileage Tax: Imposing a 7.5-cent tax for every mile a commercial trucker drives would generate enough new revenue to replace the Highway Trust Fund taxes that truck owners now pay and may also cover the industry’s share of the fund’s current shortfall, a Congressional Budget Office report found yesterday. But that revenue boost would come at a higher cost to the federal government than the administrative costs of collecting the current diesel fuel tax, the report states. It could also hurt trucking companies such as XPO Logistics LLC and Old Dominion Freight Line. Read more from Courtney Rozen.

Elections & Policy

Trump Raises $5.5 Million in Fort Worth: Trump raised $5.5 million at a fundraiser for deep-pocketed donors in an afternoon stopover before his rally last night at the American Airlines Center in Dallas, a GOP official said. Trump met with supporters at the tony City Club of Fort Worth, holding a round-table meeting with bigger contributors and addressing a larger group of donors during a luncheon. The money raised will go to Trump Victory, a joint fundraising committee that supports his campaign and the Republican National Committee. Read more from Bill Allison.

Warren Makes Pitch for More Women to Be Elected: Sen. Elizabeth Warren (D-Mass.) said yesterday the time had come to “change the face of power” by electing more women to all levels of government, as she made a pitch to become the first female U.S. president. “Let’s elect more women so we can create the America of our highest ideals,” Warren said during the Democratic National Committee’s Women Will Vote Gala in Washington. “We are the fighters who know better than anyone that we must change the face of power, not just in our economy, not just in our government, but in our democracy.” Read more from Misyrlena Egkolfopoulou.

Trump Has a New Punching Bag at Fox News: Last Sunday, Chris Wallace, the host of “Fox News Sunday,” grilled Secretary of Defense Mark Esper about the administration’s response to the growing Ukraine scandal. That night, Trump jumped on Twitter and compared Wallace unfavorably to his late father. “Somebody please explain to Chris Wallace of Fox, who will never be his father (and my friend), Mike Wallace, that the Phone Conversation I had with the President of Ukraine was a congenial & good one,” Trump tweeted. Expect much more of the same to follow. Read more from Gerry Smith.

What Else to Know Today

Perry Tells Trump He Plans to Leave Post This Year: Energy Secretary Rick Perry notified Trump yesterday that he’ll leave the post this year. Perry, one of the administration’s original cabinet secretaries, enjoyed good rapport with Trump. The former Texas governor has recently come under scrutiny in the House impeachment inquiry over his discussions with Ukraine. In a letter, Perry told the president that Americans would benefit from his policies for “years to come.” He went on to say: “Please accept this letter as my official notification that I plan to resign at a date later this year.”

Trump praised Perry during a trip to Texas yesterday and said a replacement would be announced soon. “It’s a man that we’re going to be putting in Rick’s place,” without elaborating. Read more from Jennifer Jacobs, Jenny Leonard and Ari Natter.

U.S.-Russia Deal Prospects Clouded: A key hurdle to extending a landmark nuclear treaty between the U.S. and Russia isn’t Trump or Vladimir Putin. It’s China. The New START treaty, the last major arms control accord between the world’s two nuclear superpowers, is set to expire in early 2021. Like another key treaty covering intermediate-range nuclear missiles, which collapsed this year after the U.S. quit that accord, Trump administration officials say the agreement may not be worth extending if China isn’t brought into the fold.

A failure to renew or extend the accord would mark the effective end of decades of agreements aimed at limiting the proliferation of nuclear weapons. Experts say it would also send a worrisome signal to other nations — from Saudi Arabia to North Korea — already pursuing or seeking to pursue nuclear programs. Read more from David Wainer.

Policy Makers Seeking Perfection Risk Recession: Global economic policy makers may risk making the perfect the enemy of the good. From the Federal Reserve and the German Finance Ministry, to the People’s Bank of China, economic authorities have reacted with restraint to signs of spreading weakness worldwide. As officials gather in Washington for the annual International Monetary Fund meeting, the danger on minds is that they will misjudge the severity of the slowdown — as they seek to calibrate policy just right — and allow the risk of a recession to morph into reality. Read more from Rich Miller and Enda Curran.

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

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