Lost in the Sauce: Trump Org seeks financial aid from the Trump admin

Welcome to Lost in the Sauce, keeping you caught up on political and legal news that often gets buried in distractions and theater… or a global health crisis.

TLDR (a short-ish summary) is included at the bottom of this post.

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Let’s dig in!


The next CARES?

Last week, Congress passed a $484 bill coronavirus relief package, $321 billion of which replenished the small business aid program (aka “PPP”), $60 billion for economic disaster loans for small businesses, $75 billion for hospitals, and $25 billion for increased coronavirus testing. Republicans originally tried to push through PPP-rescue-only legislation, but Democrats insisted on additional funds.

The bill passed unanimously in the Senate and 388-5 in the House; Reps. Ocasio-Cortez, Massie, Hice, Buck, and Biggs voted against it. Alexandria Ocasio-Cortez gave an impassioned plea for more assistance:

“We have to fight to fund hospitals, fighting to fund testing. That is what we’re fighting for in this bill,” she said. “It is unconscionable. If you had urgency, you would legislate like rent was due on May 1 and make sure we include rent and mortgage relief for our constituents.” (video)

Conspicuously absent from the most recent bill: aid for state and local governments. The Center on Budget and Policy Priorities estimates that “states still face shortfalls of as much as $360 billion, not including the substantial new costs they face to combat the COVID-19 virus.”

On Friday, Speaker Nancy Pelosi insisted the next round of coronavirus legislation must include state and local aid. Her remarks are in direct contrast to those of Senate Majority Leader Mitch McConnell, who said in an interview last week that he prefers “states use the bankruptcy route,” citing concern over the growing deficit:

“My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.”

A press release from McConnell’s office called state aid “a blue state bailout.” New York Gov. Andrew Cuomo accurately pointed out that red states are more federally dependent than blue states:

“His state, the state of Kentucky, takes out $138 billion more than they put in,” Cuomo said. “New York puts in more money to the federal pot than it takes out . . . Senator McConnell, who’s getting bailed out here? . . . Your state is getting bailed out — not my state.” (video)

Why bankruptcy?

This is important: The “wealthiest and most productive states are overwhelmingly blue… because of the Republican hold on the Senate, the federal judiciary has likewise shifted in conservative and Republican directions. A state bankruptcy process would thus enable a Republican Party based in the poorer states to use its federal ascendancy to impose its priorities upon the budgets of the richer states.”

The GOP represents wealthy individuals and interest groups across the country, not just in their home states. “A federal bankruptcy process for state finances could thus enable wealthy individuals and interest groups in rich states to leverage their clout in the anti-majoritarian federal system to reverse political defeats in the more majoritarian political systems of big, rich states like California, New York, and Illinois.”

Secret to get aid: Rich and connected to Trump

Meanwhile, we’re learning more about the consequences of the previous rescue package – the CARES Act – and how corporations and the wealthy are benefiting. Part of the CARES Act was the creation of a small business loan program, designed to keep merchants afloat during the COVID-19 crisis. The program quickly ran out of money as large publicly traded companies with thousands of employees scooped up millions, leaving the real small businesses struggling to stay open.

In the past week, we’ve learned more about the companies that obtained these low-interest, taxpayer-backed loans. It appears that a key to success is to (1) have ties to the Trump administration, and/or (2) already have lots of money.

Trump properties

One of my favorite headlines last week: “Trump (the Company) Asks Trump (the Administration) for Hotel Relief.” It perfectly encapsulates the conflicts of interest that have defined Trump’s entire presidency – which, by the way, have totaled 3,142 in the 1,193 days Trump has been in office according to CREW.

Trump International Hotel, just a few blocks from the White House… [wants to change] its lease payments, according to people familiar with the matter, which the federal government has reported amount to nearly $268,000 per month.

…The Trump Organization owns and operates the luxury hotel, but it is in a federally owned building on Pennsylvania Avenue. As part of its deal to open the 263-room hotel, the company signed a 60-year lease in 2013 that requires the monthly payments to the General Services Administration… The president still owns the company, but his eldest sons run the day-to-day operations. (NYT)

Sen. Chris Van Hollen (D-MY) sent a letter to GSA Administrator Emily Murphy seeking more information on the Trump Organization’s plea for relief: “the potential for undue influence and special treatment is obvious,” the senator writes.

  • Reminder: A report last year by the GSA’s inspector general found that the agency chose to “ignore” the U.S. Constitution and other legal precedents when they allowed the Trump International Hotel to maintain its lease on the Old Post Office building even after Donald Trump became president

The Trump Organization is also seeking financial assistance for its overseas properties in the U.K. and Ireland. “In the U.K. and Ireland, where Trump owns three money-losing golf resorts, companies can tap enough government cash to pay most of their workers’ salaries,” Bloomberg reports.

Martin Ford, an elected official in Aberdeenshire, Scotland, where one of the resorts is located: “If what he says about his personal wealth is true, Trump doesn’t need the money, and I don’t see why U.K. taxpayers of the future should be helping him out.”

Meanwhile, in the U.S., Trump properties have collectively furloughed nearly 2,000 employees across several states. Many of these employees staffed Trump’s golf courses, which are not currently allowed to collect low-interest, taxpayer-funded emergency loans. An influential lobby is trying to change that:

The Trump Organization, like other golf businesses, is too large to qualify for the emergency small business loans, known as PPP loans. But the lobbying group, We Are Golf, floated the idea of allowing each golf course to apply individually, even if its owner is too big

…Trump’s golf holdings accounted for roughly half of his reported 2018 income of $440 million, and the crisis is costing his properties an estimated $1 million a day in lost revenue.

Promotion during coronavirus briefings

President Trump managed to work in not one, but two plugs for his businesses at last Sunday’s coronavirus task force briefing.

First, he was asked about the mayor of Las Vegas being against the shut down orders in the state, to which he replied: “Well they shut one of my hotels down, too, okay. So you know. I’m not involved in that, I could be if I wanted to, I just chose not to be.” That is misleading – Trump still owns and profits from his properties. “They closed a very big hotel that I have in Nevada, in Las Vegas. It’s a very severe step he [the governor] took.” (video)

Then he said: “I read where my wonderful place in Florida, in Miami – Doral – they had to let a lot of the employees go. Because it’s essentially closed. You can’t use it, you can’t have the restaurants, so you have to close it down. That’s an example. Many many hotels are closing down across the country and hopefully they’re gonna be able to open up relatively quickly.” (video)

Trump & China

After praising China’s response to the coronavirus for months, then quickly flip-flopping to blaming the country, Trump and the Republicans have settled on shifting responsibility for America’s entire response to the crisis onto China.

Two weeks ago, the Trump campaign released a misleading ad trying to give the impression that Joe Biden is too soft on the Chinese regime. To do so, the ad shows an image of Biden appearing to bow before an individual of Asian descent before a Chinese flag. However, that individual is actually Gary Locke, former Washington governor and U.S. ambassador to China, and not a Chinese official.

  • More: WaPo “Trump’s new ad attacking Biden on China is a complete and utter mess” and Factcheck “Trump Campaign’s Misleading Ad Attacking Biden on China.”

A little over a week ago, the National Republican Senatorial Committee sent Republican campaigns a detailed strategy to shift blame to Democratic candidates by tying them to the Chinese government.

It stresses three main lines of assault: That China caused the virus “by covering it up,” that Democrats are “soft on China,” and that Republicans will “push for sanctions on China for its role in spreading this pandemic.” … “Don’t defend Trump, other than the China Travel Ban — attack China,” the memo states.

Trump’s attack on Biden and Democrats has only highlighted his own dealings with China. Most recently, we learned that Trump owes $211 million to the state-owned Bank of China for a 2012 commercial mortgage loan on his New York building. The bank claims it no longer owns a share, but another public document “lists Bank of China as a creditor on 1290 Avenue of the Americas even after the bank said it was no longer involved in the property.”

The bank’s initial financing of the property stands out because Trump and his campaign have repeatedly highlighted the same bank’s role in a $1.5 billion deal announced in 2013 by partners of Joe Biden’s son, Hunter Biden.

Additionally: a Chinese state-owned construction company is helping build the Trump World Golf Club in Dubai, and Beijing has awarded trademarks to the president’s daughter, Ivanka. In the past, Ivanka’s husband (and a White House adviser), Jared Kushner, has sought Chinese finance for at least one major real estate deal.

As the New Yorker accurately sums up: Whether Trump’s businesses received more loans from state-owned Chinese banks—or other investors with ties to foreign governments—is unknown because Trump refuses to release his complete tax returns and other financial records.

Interlude: SCOTUS-Trump update

The Supreme Court is scheduled to hear arguments in three cases involving Trump’s finances on May 12. This morning, the high court asked all parties for a supplemental briefing about whether the battle over Trump’s financial records presents “political question” that courts should stay out of.

This hints that the Supreme Court may not rule either way in the cases, essentially punting the matter until after the election. Former U.S. federal attorney Scott Turow wrote in Vanity Fair last week that he believes Chief Justice Roberts will avoid choosing either side in the cases:

The Supreme Court is very good at finding reasons why it doesn’t have to decide a case, and I expect Justice Roberts to do that with the House committees’ cases, forcing them to be returned to a lower court or requiring the subpoenas to be reissued, which will keep the committees from getting the records before November.

So that’s my prediction. The Supreme Court, politicized as never before in modern American history, will effectively declare that Donald Trump is not above the law. But only on his own political timetable.

Turow notes that SCOTUS may be more likely to issue a decisive ruling against Trump on the New York state subpoena for Trump’s financial records because “any ruling against the president would send Trump and his lawyers back to court, appealing through the New York State system and then trying to involve the federal courts again, all to the point of preventing disclosure until after the election.”

Transition planning

Federal law requires that the current president begin planning for a possible transition to power with his/her opponent this Sunday. Meaning: the Trump administration must coordinate with the apparent Democratic presidential nominee, Joe Biden, for a possible transition to power after the November election. This is normal and happens every election cycle.

However, there are doubts that Trump’s White House will comply with the law. Various agencies have said they plan to follow to law and start the process on schedule. The White House, though “declined to comment on whether officials in the West Wing who are responsible for coordinating with Biden’s team have plans to do so by the May 3 deadline.”

There are concerns among Democrats, however, that President Donald Trump might try to impede preparations for potentially handing over the office after serving one term, given his distrust of career government officials who would be critical to the process and his past musings that election results could be rigged against him.

“They’re a ‘let’s burn the house down on the way out’ kind of crowd. I’d like to think it was different, but there’s nothing to indicate that they would play it straight,” said John Podesta, who was a co-chair of Barack Obama’s transition in 2008 and chair of Hillary Clinton’s presidential campaign in 2016.

Post Office

On Friday, Trump confirmed that he intends to block an emergency loan to shore up the U.S. Postal Service unless it dramatically raised shipping prices on online retailers like Amazon, run by frequent Trump-target Jeff Bezos (who also owns the Washington Post). Several administration officials report that Trump blames Bezos for the newspaper’s “unfair” coverage of him.

“The Postal Service is a joke … the Post Office should raise the price of a package by approximately four times … for some reason they’re very cozy with some of these companies … they don’t want to raise it because they don’t want to insult Amazon,” Trump said. (video)

Criticism of the USPS for not turning a profit ignores that it isn’t a business; it is a government service so important that its formation was included in the U.S. Constitution. We don’t expect other government services to turn a profit. For instance, there aren’t accompanying calls for FEMA to rake in the cash for its services.

Even before the COVID-19 pandemic that has caused a one-third decline in mail volume, the USPS faced nonsensical demands like the Republican-imposed 2006 mandate that it must fund upfront its future retiree health care benefits, a requirement no other public or private entity is expected to meet.

Finally, Trump’s claim isn’t even true: The Washington Post pointed out two years ago that e-commerce shipping “has been a bright spot in recent years, with revenue increasing by $2.1 billion, to $19.5 billion, in fiscal 2017.”

Immigration

  • NBC News: President Donald Trump signed an executive order Wednesday to “pause” the issuance of green cards for 60 days…The order is effectively a restriction on entry that applies to people outside the U.S. seeking lawful permanent residency, which grants people the right to live and work in the U.S. and is a mandatory stepping stone to citizenship for all types of immigrants.
  • WaPo: Trump senior policy adviser Stephen Miller told White House supporters in a private call this week that the president’s new executive order curbing immigration will usher in the kind of broader long-term changes to American society he has advocated for years, even though the 60-day measures were publicly characterized as a “pause” during the coronavirus pandemic.
  • Daily Beast: MAGA-friendly Fisher Sand & Gravel of North Dakota… got $7,633,085 to build a mere “800 linear feet” of bollard barrier—that slatted design Trump favors—for the wall in Yuma, Ariz… Last December, after Fisher finally won a $400 million border contract, something the House Homeland Security Committee chairman blasted as egregious, the Pentagon IG opened an ongoing audit of the contract over what amounts to corruption.
  • AP: The Trump administration has been quietly adding mobile surveillance cameras at the U.S.-Mexico border in response to the coronavirus pandemic, though fewer people appear to be crossing illegally. It’s the latest move as operations at the U.S.-Mexico border have become increasingly militarized and secretive.
  • WaPo: A federal judge on Monday ordered immigration authorities to begin considering for release all detained immigrants at higher risk of complications from covid-19, admonishing U.S. Immigration and Customs Enforcement in stark terms for a slow, insufficient response to the pandemic which he said has put lives in jeopardy.
  • Politico: …employees in the DOJ office handling those immigration appeals said many suspect it’s because the department prioritizes high deportation numbers over worker safety [during the coronavirus]. “I feel like half the time, I’m working on Trump’s reelection,” said an employee in the office who spoke anonymously because of concerns about retaliation. “This is just a piece for him to tout when reelection time comes up about how much he’s getting done.”
  • Bloomberg: …the court system that handles the removal of immigrants is projected to issue nearly 60% more deportation orders than last year… [despite] criticism from advocacy groups and a union representing most of the nation’s 460 immigration judges, who say the pace is putting people at risk of infection. “The deportation machine has not stopped,” said Florida immigration lawyer Ira Kurzban.
  • The Hill: The Trump administration is facing a lawsuit filed Friday over a provision in the $2.2 trillion coronavirus relief package that denies stimulus checks to more than 1 million U.S. citizens married to undocumented immigrants.

What else?

  • AP: A bipartisan Senate report released Tuesday affirms the U.S. intelligence community’s conclusions that Russia interfered in the 2016 presidential election in a far-ranging influence campaign approved by Russian President Vladimir Putin and aimed at helping Donald Trump win the White House.
    • President Trump and Russian President Vladimir Putin issued a symbolic joint statement on Saturday calling for renewed cooperation to “build trust, and cooperate”

Note: Trump has lauded the delivery of Russian supplies on numerous occasions and has promised to send ventilators to the country. What he has never mentioned: Ukraine is using its cargo planes — the biggest in the world — to ferry crucial personal protective equipment (PPE) from Asia to medical professionals on the front line of the health crisis in the US. At least 11 trips are planned.

  • NYT: Durham Inquiry Includes Scrutiny of a Media Leak. The attorney general has suggested that the Justice Department review of the Russia investigation has uncovered “troubling” findings without going into details.
  • WaPo: Michael Flynn’s defense claims, without offering specifics, that material from Justice Dept. review includes ‘stunning’ evidence of FBI misconduct

Deregulation, harmful actions

  • CNBC: President Donald Trump on Tuesday ordered Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin to put together a plan to get funding to the struggling U.S. oil and gas industry as a historic sell-off in crude continued.
  • WaPo: The Supreme Court on Thursday rejected the Trump administration’s reading of a key part of the Clean Water Act as creating an “obvious loophole” in its enforcement, and gave a partial win to environmentalists in a case from Hawaii. The court ruled 6 to 3 that a wastewater treatment plant in Hawaii could not avoid provisions of the act…
  • Politico: The Trump administration is moving to scrap an Obama-era policy that protected LGBTQ patients from discrimination, alarming health experts who warn that the regulatory rollback could harm vulnerable people during a pandemic. The health department is close to finalizing its long-developing rewrite of Obamacare’s Section 1557 provision, which barred health care discrimination based on sex and gender identity.

Coronavirus-related

  • WUWM (local Milwaukee news): Forty people in Milwaukee County may have become infected with the coronavirus as a result of participating in Wisconsin elections on April 7.
  • New Republic: Coronavirus Emergency Aid Has Become Its Own Disaster in Indian Country.. The Trump administration turned scarce funding and a growing crisis among Native communities into an existential fight over sovereignty.
  • CNN: This is where all 50 states stand on reopening
  • Trump abruptly announced that he would be speaking at West Point. That was news to everyone, including officials at West Point. They are now summoning 1,000 cadets scattered across the country to return to campus in New York, the center of the outbreak.
    • NYT: General Williams said in a telephone interview that returning seniors would be tested off-campus for the coronavirus. Those who test negative will then be sent to the school, where they will be monitored for 14 days before graduation.
  • CNN: 26 US Navy ships currently have coronavirus cases
  • WaPo: Nearly 650 prisoners in a Michigan prison test positive for coronavirus
  • Local Indiana news: Out of 137 prisoners tested for COVID-19 at the Westville Correctional facility, 126 received a positive result for the virus.

TLDR (as short as possible):

  • House Speaker Pelosi says no more aid will be passed without aid for states and local governments
  • McConnell said no aid for states – calling it a blue state bailout
  • Why McConnell prefers bankruptcy: “A state bankruptcy process would thus enable a Republican Party based in the poorer states to use its federal ascendancy to impose its priorities upon the budgets of the richer states.”
  • Trump-connected firms obtained large low interest, taxpayer-funded loans through the paycheck protection program meant for small businesses
  • The Trump Org is seeking reductions in its lease payments for the Trump International Hotel in DC. The president leases the building from the General Services Administration, part of the Trump administration
  • In the U.S., Trump properties have collectively furloughed nearly 2,000 employees across several states… an influential golf course lobby is seeking to allow golf courses like Trump’s apply for small business aid
  • The Trump Organization is also seeking financial assistance for its overseas properties in the U.K. and Ireland
  • The National Republican Senatorial Committee sent Republican campaigns a detailed strategy to shift blame to Democratic candidates by tying them to the Chinese government
  • Trump owed (and possibly still owes) $211 million to the state-owned Bank of China for a 2012 commercial mortgage loan on his New York building.
  • By this Sunday, the Trump administration is required by law to begin planning with the Biden camp for a possible transition of power after the November election. However, many worry Trump will be disruptive & fail to comply.
  • Trump confirmed that he intends to block an emergency loan to shore up the U.S. Postal Service unless it dramatically raised shipping prices on online retailers like Amazon
  • Trump halted immigration for 60 days, but Stephen Miller hints that it may be permanent
  • A company owned by a Trump-donor was given another multi-million dollar contract to build a portion of the border wall. The company is currently under investigation for receiving a previous lucrative contract under dubious circumstances.
  • The court system that handles the removal of immigrants is projected to issue nearly 60% more deportation orders than last year
  • The Trump administration is moving to scrap an Obama-era policy that protected LGBTQ patients from discrimination
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