Jul. 09

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Where Will the Epstein Fallout Land?

The scandal involving well-connected billionaire and convicted sexual predator Jeffrey Epstein just continues to get more salacious. This weekend, he was charged with running a sex-trafficking network that utilized underage girls. On Monday, the indictment against him was unsealed, and it was revealed that when they searched his house, law enforcement officials uncovered a huge number of images that are almost certainly child pornography.

At the moment, it is unclear what the political impact of this story will be. The person in Washington who is most obviously exposed is Secretary of Labor Alex Acosta. This is the second time that Epstein has been indicted on felony-level sexual crimes, and the first time Acosta—who was then U.S. Attorney for the Southern District of Florida—signed off on a plea deal with Epstein that was dangerously close to a slap on the wrist. The Secretary has been criticized for that deal ever since, and now it's back in the headlines. Making things even worse is that the plea agreement was vague enough in its language that it may just allow Epstein to skate on the new round of charges. At the moment, GOP pooh bahs refuse to take shots at Acosta, and he retains Donald Trump's confidence. Fox News and Speaker Nancy Pelosi (D-CA), on the other hand, are calling for the Secretary to step down. Not often those two are on the same page. Anyhow, although Acosta appears safe for now, weeks and weeks of headlines that include some combination of "Acosta"/"Trump Administration" and "Sex Trafficking"/"Child Pornography" could easily put him out of a job.

Trump himself also has some exposure here, beyond his decision to hire Acosta. The President was (and is) friends with Epstein, and hosted him at Mar-a-Lago more than once. There is also some evidence that Epstein steered sexual partners toward the President, and may have helped cover up one or more acts of sexual violence by Trump. The woman who made these accusations ultimately withdrew them, saying she feared for her life, so it's not clear how truthful they are. However, it is within the realm of possibility that the 66-year-old Epstein knows one or more unsavory things about the President, and that if he is faced with spending the rest of his life in prison, may try to strike a deal. Only a few people know how probable this actually is, but it's worth keeping an eye on, just in case. Epstein has been charged by the feds, so Trump could make a deal with him: silence in exchange for a pardon. That would have a political cost for Trump, so he probably wouldn't do it before the 2020 election. And, of course, the New York State authorities would pick up the case within a millisecond of the pardon being issued, so a pardon probably wouldn't be a "Get Out of Jail Free" card, after all.

The other prominent politician whose name is linked to Epstein's is Bill Clinton. If you had to pick one Democrat, besides maybe Anthony Weiner, it had to be him, right? Clinton's office has already issued a statement in which the former president says he "knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York." That may or may not be true. On one hand, Clinton has a lot of people in his network, and some of them are going to be sleazy, just by random chance. On the other hand, Clinton and Epstein were pretty chummy, and the billionaire's predilections were an open secret. Wherever the truth lies, there have been no specific accusations against Clinton, in contrast to Trump. Further, as you may have noticed, Clinton has not been in office for nearly 20 years, so he's not quite the "big fish" that the current president is. Add it up, and #42's connection to the case may form the basis for some whataboutism, but he probably has less to be nervous about than #45 does. (Z)

Trump Says He Won't Deal with British Ambassador Anymore

This weekend, frank reports about Donald Trump from the pen of British Ambassador to the U.S. Kim Darroch were made public by the Daily Mail, courtesy of a leaker whose identity is currently unknown. Trump, as you may have heard, does not take criticism well. He reacted badly to the news on Sunday, and then doubled down on Monday:

I have been very critical about the way the U.K. and Prime Minister Theresa May handled Brexit. What a mess she and her representatives have created. I told her how it should be done, but she decided to go another way. I do not know the Ambassador, but he is not liked or well....

— Donald J. Trump (@realDonaldTrump) July 8, 2019

....thought of within the U.S. We will no longer deal with him. The good news for the wonderful United Kingdom is that they will soon have a new Prime Minister. While I thoroughly enjoyed the magnificent State Visit last month, it was the Queen who I was most impressed with!

— Donald J. Trump (@realDonaldTrump) July 8, 2019

Any other president would have taken the high road, but Trump doesn't even know where the high road is, much less how to travel it. If the goal was to show the world how wrong it was for Darroch to describe the President as "insecure," well, this was an interesting way to approach that problem.

The President's threat is mostly him venting, along with a little posturing for the benefit of the base. Darroch was going to be recalled soon, one way or another, and if Trump really felt the need to hasten that process, the way to do it was through channels, not tweets. That said, it will be interesting to see if this affects the competition to be the next prime minister. At the moment, there are two fellows in contention. One of those is Jeremy Hunt, who has tried to distance himself from Darroch, but who has nonetheless been damaged by this story, since—as Foreign Secretary—he bears some small responsibility for the leak. That would seem to work to the benefit of the other contender, namely the Trump-like Boris Johnson. In fact, one wonders if Trump's loud complaints are not, in part, an effort to aid Johnson's PM bid. For what it is worth, the 160,000 Conservative Party members who will make the decision have to have their ballots in the mail sometime in the next week or so.

But as usual, be careful what you wish for. You might get it. Johnson is probably willing to go for a no-deal Brexit, which could freak out the European stock markets. Since all the stock markets are intertwined, a freakout there could affect the U.S. markets in due course of time, which given electronic trading is maybe 10 milliseconds. (Z)

Cuomo Signs Tax Return Law

After several weeks of indicating that he would do so, Gov. Andrew Cuomo (D-NY) has signed New York State Senate bill S5072A into law. This bill, called the "Trust Act" allows the same members of Congress who are (supposed to be) allowed to look at anyone's federal tax returns to also request copies of anyone's New York state returns.

There are, of course, no names contained within the text of the bill, but the members of the New York legislature definitely had one particular New York resident in mind, and one particular member of Congress in mind. House Ways and Means Chairman Richard Neal (D-MA) has shown absolutely no interest in invoking his newly-granted powers, primarily because what he really wants to get is Donald Trump's federal returns, which have considerably more information within. The argument that Neal put forth in last week's court filings on this subject is that he's not on a fishing expedition, and that he and his committee want to review the process by which presidential returns are audited. If he acquires a copy of Trump's New York returns, it will undermine that argument, and make it look like he is indeed on a fishing expedition. That said, Neal will certainly keep this option in his back pocket, if his court case against Trump (well, technically, against IRS Commissioner Charles P. Rettig and Treasury Secretary Steven Mnuchin) does not proceed according to plan. (Z)

Steyer Will Enter the Democratic Presidential Race...

Tom Steyer has no experience serving in elective office, but he's a billionaire, and that's qualification enough for the presidency, right? Like Howard Schultz, he thinks so, because he plans to officially announce his candidacy sometime this week. This despite the fact that he previously said he would not run.

Obviously, Steyer has a tall mountain to climb, given how late he's declaring and how many other Democrats there are. Though having $1.6 billion in his checking account helps, he's a longshot to make the second debate, an even longer shot to make the third, and unless he somehow catches lightning in a bottle, he has little chance to affect the race. He seems to know this, and appears to be primarily interested in attracting attention to his pet issues. That means the "need to impeach," primarily, though he says he also wants to talk about how the economy is not doing as well as it seems. The latter message is actually a pretty good one; for too long, people have improperly equated the performance of the Dow Jones and other stock market indices with the overall health of the economy and the economic well-being of Americans.

Since Steyer opted out before we could get to him, we don't have a profile of him, but we will do one this week. (Z)

...And Swalwell Will Exit

Depending on how seriously one takes the candidacies of folks like Mike Gravel, Wayne Messam, and Marianne Williamson, the Democratic presidential field includes anywhere from 22 to 26 candidates. At roughly the same time it grows by one (Tom Steyer), however, it's also going to shrink by one, because Rep. Eric Swalwell (D-CA) has dropped out. Could this be a new principle: the law of conservation of foolish politicians?

The timing is a little surprising, perhaps, since the second Democratic debate is only a few weeks away. Swalwell never had any real chance of landing the nomination (or the VP slot); one might think that he would wait for one last chance to give himself and his ideas a bit more national attention before bailing out. However, running for president is hard work, and maybe the Congressman just didn't have three more weeks of it in him when the reward is only 3-4 minutes of camera time. Alternatively, he may have decided his House reelection bid needs his attention (and he did officially announce his reelection bid on Monday). Or, Swalwell may have realized that someone is likely to lose their seat for debate round two, now that Gov. Steve Bullock (D-MT) has qualified, and he didn't want the embarrassment of being that guy. For readers more interested in religion than the laws of physics, the Lord giveth Democratic presidential candidates, and he taketh away Democratic presidential candidates. (Z)

Warren's Q2 Take: $19.1 million

Sen. Elizabeth Warren (D-MA) has announced her fundraising total for Q2, and it's solid: $19.2 million. That's more than triple her Q1 total of $6 million, and is made a bit more impressive by the fact that she did not hold any actual fundraisers, relying instead on small donations made via the Internet or phone. Her average donation was $28, and more than 300,000 of her 384,000 donors were first-timers, which means that she's expanding her fundraising base dramatically.

Here are the takes of those candidates who have already announced (the remainder have about a week left):

Candidate Total
Donald Trump $54 million
Pete Buttigieg $24.8 million
Joe Biden $21.5 million
Elizabeth Warren $19.1 million
Bernie Sanders $18 million
Kamala Harris $12 million
Michael Bennet $2.8 million
Steve Bullock $2 million
John Hickenlooper $1 million
Democratic Candidates' Total $101.2 million

The candidate who has to be a little dismayed at Warren's total is, of course, Bernie Sanders. He's not only competing for the same voters (to a large extent), he's also utilizing the same "no-fundraisers" approach. But despite the fact that he had a national fundraising base in place at the start of the campaign, and Warren did not, he still trailed her by more than $1 million. Further, in contrast to the other frontrunners, the Sanders campaign neglected to reveal how many individual donors it had gotten funds from, noting only that it had a little over 1 million different donations. This implies that the Senator is putting up his totals by tapping the same donors over and over again, as opposed to attracting new donors, as Warren is doing. That is not a great model, long-term. (Z)

Another Way to Look at the Debates

Let us start here with the obvious caveats: all data like this has a margin of error, it's just one debate, and it's a long time until the primaries. With all of that said, FiveThirtyEight (in cooperation with Morning Consult) has parsed things in an interesting way, looking at how the supporters of each candidate rated the performances of each of the frontrunners. Here's their heat chart:

Debate Heat Map

Let's take note of some of the more interesting things:

Again, it's just one set of very early data. But when it comes to 2020, these are the tea leaves that are available work with, and so work with them we shall. (Z)

Kobach Launches Senate Bid

When it comes to their own candidates for the U.S. Senate, 2019 has been a mixed bag so far for the Democrats. They did get Mark Kelly (and only Mark Kelly) in Arizona and State Rep. Sara Gideon (D) in Maine, and there's scuttlebutt that Amy McGrath is about to declare in Kentucky. However, the blue team would really like John Hickenlooper in Colorado, Gov. Steve Bullock (D-MT) in Montana, Beto O'Rourke in Texas, Stacey Abrams in Georgia, and AG Josh Stein (D) in North Carolina. So far, 60% of those folks are insisting on waging longshot campaigns for the White House, and the other 40% say they are not interested.

When it comes to the candidates that the GOP is running, by contrast, everything is coming up roses for the blue team. The decision by Roy Moore to throw his (cowboy) hat into the Alabama race means that Sen. Doug Jones (D-AL) may just keep his job. And on Monday, former Kansas secretary of state Kris Kobach declared a run for the Senate seat that is about to be vacated by Sen. Pat Roberts (R-KS).

Kansas has not elected a Democrat to the Senate since the 1930s, and that fellow (George McGill) was a very different kind of Democrat from the ones who roam the landscape today. This fact alone makes clear that Roberts' seat has no business being in play, whether the incumbent is running or not. However, Kobach is exactly the kind of candidate that makes his political party cringe. His overt nativism, efforts to suppress minority votes, laissez-faire attitude about high-powered guns, and Obama birtherism have won him a large and very loyal following; just enough voters to win, say, a primary. But those same positions, not to mention his dubious competence, are bothersome to virtually all independents, and even to some moderate Republicans. When Kobach ran for governor last year, he lost to then-State Sen. Laura Kelly, and it wasn't especially close. Kelly prevailed by 5 points (48% to 43%), and would likely have extended that lead even more if independent candidate Greg Orman (6%) wasn't on the ballot, giving Kobach-hating Republicans a non-Democrat to vote for.

Consistent with all of this, Republican leaders were not happy at the news of a Kobach run, and spent the day on Monday pointing out that Kobach tends to lose un-losable races, and that it sure would be swell if Secretary of State Mike Pompeo launched a bid. Pompeo is alternately said to be interested (but leery of offending Donald Trump), or to be not all that interested. If Pompeo does run, he'll have the enthusiastic backing of the GOP establishment, and he will presumably have the endorsement of Trump, whose approval is currently 2 points above water in the Sunflower State (50% to 48%). That said, it's not a guarantee that Kobach would lose to the Secretary; Kobach has won a statewide election in Kansas while Pompeo has not.

If Kobach does survive the primary, his chances at avoiding the same fate he suffered in 2018 will hinge on two things: (1) presidential coattails, and (2) the strength of the Democratic candidate. Thus far, the only declared candidate for the blue team is former U.S. Attorney Barry Grissom, but if the seat appears to be legitimately in play, then Kathleen Sebelius might be coaxed into entering the race. As a former governor and a cabinet secretary, she would be a formidable opponent for Kobach (or Pompeo, for that matter). (Z)

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