Jack Abramoff Faces Prison Time With New Crypto-Currency Fraud Charges

Former superlobbyist Jack Abramoff has reportedly pleaded guilty to criminal charges and is facing a separate SEC complaint for an allegedly fraudulent crypto-currency scheme.

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READ: Cruz, Cornyn Demand Trump Admin Keep Supporting TX Testing Sites

Sens. Ted Cruz and John Cornyn (R-TX) demanded in a Thursday letter that the Trump administration keep supporting drive-through testing sites in their state, calling the sites “critical to Texas’ testing capacity.”

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Initial Attempt By Trump’s Brother To Block Niece’s Book Is Rejected In Court

A surrogate’s court in New York on Thursday dismissed a request by President Trump’s brother Robert Trump that sought to block the publication of a book by their niece Mary.

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Trump Pick To Replace Berman Won’t Vow To Recuse From POTUS-Linked Probes

President Trump’s nominee to replace U.S. Attorney Geoffrey Berman after his messy firing wouldn’t commit to recusing himself from pending investigations involving Trump’s interests and associates upon his potential confirmation. Continue reading “Trump Pick To Replace Berman Won’t Vow To Recuse From POTUS-Linked Probes” →

The Indian Health Service Wants To Return 1 Million KN95 Masks It Bought From A Former White House Official

This story first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

The Indian Health Service, which purchased Chinese-made KN95 masks from a former Trump White House official through a $3 million contract, is now trying to return the masks but facing resistance, the agency told ProPublica.

The contractor, former White House Deputy Chief of Staff Zach Fuentes, “refused this request and submitted a certified claim for payment” instead, the agency said.

A lawyer for Fuentes’ firm, Benjamin Keime, said in an email to ProPublica that the company is insisting on payment because it “fulfilled all of its obligations to IHS under the contract.”

Government agencies have been under intense pressure to buy protective equipment to guard employees against the coronavirus. In their haste, several agencies have spent millions of dollars on Chinese-made masks without knowing who made them. Without those details, it can be hard to assess whether the masks filter as many dangerous particles as advertised.

ProPublica reported last month that Fuentes received a contract to provide 1 million KN95 respirator masks just 11 days after he created his company, Zach Fuentes LLC. The IHS later told ProPublica that the masks it bought from Fuentes do not meet Food and Drug Administration standards for use in health care settings.

Fuentes previously told ProPublica that political connections to the Trump White House played no role in his company’s selection for the contract, which was granted with limited competitive bidding.

The U.S.-based agent originally listed for two of the Chinese companies from which Fuentes procured masks, CCTC Service Inc., is named as the representative for nearly 1,600 devices listed with the FDA this year. In a federal court complaint filed June 5 against another Chinese mask manufacturer, King Year Printing and Packaging Co. Ltd., by the Justice Department, an FDA special agent said that there is “probable cause to believe CCTC is a fictitious corporation.”

Several members of Congress have demanded investigations into the Fuentes contract, and the Government Accountability Office plans to review the deal, a spokesman said last week.

“After completing inspection of the product, the Indian Health Service sent a letter to the contractor proposing to return the masks through a no-cost termination,” the agency said in a statement on Wednesday evening. “The contractor refused this request and submitted a certified claim for payment. The Indian Health Service will continue to work with the contractor and the HHS Office of the General Counsel to resolve this issue.”

Keime said that IHS originally accepted all the masks in writing on May 22, the same day ProPublica published its first story on the contract, and did not try to return them until June 10. Fuentes’ firm has offered to replace any defective masks, Keime said.

“Yet, to date, almost two months after the first shipment was received, IHS has not identified a single defect or flaw in the masks,” Keime said. “Instead, it seeks to cancel the order for what appear to be political reasons.”

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Oyster, Air Fryer And Bicycle Companies Say Their Goods Are Essential To Fighting Coronavirus So They Can Get Tariff Relief

This story first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

What’s essential in a pandemic? Pretty much everything, if you read the tariff appeals of companies that import goods from China.

Canned tuna, which an importer argues is a perfect food to stock up on during infrequent grocery trips. Dietary supplements like ginkgo biloba, needed to bolster immune systems. Fitness machines, now essential equipment for home workouts.

More than 900 businesses, trade associations and individuals have filed comments with the Office of the U.S. Trade Representative seeking relief from steep tariffs now in place for imports from China. The special comment period has been running throughout the coronavirus crisis and ends Thursday.

Plenty of the filers made their appeals based on medical reasons — hand sanitizers, surgical gloves and syringes that are critical to the public health crisis — but others took a more expansive view to convince the agency that their products are essential to the country’s well-being.

Skechers USA asked for an exemption for its Wascana-Athas tactical boots, describing them as ideal for first responders and law enforcement personnel. The Fragrance Creators Association requested exemptions for essential oils and other aromatic compounds, making the case that some are used in disinfectants (although they are also widely used in cosmetics and perfumes).

The duties are known as Section 301 tariffs, after the provision of the 1974 Trade Act that justifies them in retaliation for unfair trade practices. At the outset of the COVID-19 outbreak in late February, levies of 7.5% to 25% remained in place on about $330 billion worth of Chinese imports, including critically needed personal protective equipment.

A signature effort of the Trump administration designed to push businesses to reduce their dependence on Chinese imports, the tariffs have largely been absorbed by U.S. retailers and consumers in the form of lower margins and higher prices. Along with duties on steel and aluminum, they now cost consumers approximately $57 billion annually, according to one estimate.

Some companies have responded to the tariffs by moving production back to the U.S., but far more have simply found suppliers outside of China, in countries such as Vietnam and Mexico.

Over the past few years, USTR has undertaken an extensive and laborious process to evaluate individual requests for relief, assessing factors such as the difficulty of obtaining products from other countries. Through four rounds of tariffs, the agency has received nearly 53,000 submissions, of which about 6,400 were approved, with 8,600 still pending as of early June.

In early March, USTR issued narrow exclusions for items such as face masks and single-use stethoscope covers. But according to an analysis by the Peterson Institute for International Economics, tariffs remained on about $5 billion worth of medical goods needed to fight the pandemic. So, under pressure from the business community, USTR also put out a call for companies to make their case for items needed at a time when infection is everywhere, offices are virtual and America’s children are stuck at home indefinitely.

A flooring company called Cali Bamboo, for example, asked for exclusions on types of artificial wood planks that have been used in hospitals, but that it also markets on its website for general use. A chemical company called Lubrizol requested relief for a highly toxic compound called glutaraldehyde that it says could help disinfect potentially coronavirus-infected facilities, but which is also sold as an ingredient in fracking fluids.

In what could be one of the most lucrative exclusions, Pfizer asked for tariffs to go away on Phthalimidopropionaldehyde, an active ingredient in its blockbuster blood pressure drug Lipitor. Pfizer said that it was needed to help Americans maintain their cardiovascular health since heart conditions complicate COVID-19 cases — but Lipitor also happens to generate hundreds of millions of dollars a year even without a pandemic.

Some companies interpreted the request for COVID-19-related exclusions even more liberally.

City of Industry, California-based Crown Prince Oysters, for example, asked for an exemption for its smoked oysters from China. The sanitary and shelf-stable shellfish has been in high demand, Chief Financial Officer Chris Bruno wrote in an impassioned letter, but tariffs have sucked away profits and the 28-person company may fold by the end of the year.

“lf Crown Prince goes out of business, Americans will be losing a food source high in protein and undeniably safe to eat during the pandemic,” wrote Bruno, who declined to comment further.

Bumble Bee Foods — the same company that pled guilty to federal price fixing charges in 2017 and has since been acquired by a Taiwanese conglomerate — made a pitch for tuna loins to be considered a “necessary commodity.”

“In the current climate, where Americans are increasingly homebound and concerned with regular access to healthy, affordable food, a reliable and plentiful supply of canned tuna is crucial to the health of American communities,” wrote CEO Jan Tharp, who didn’t reply to a request for further comment.

Requests for goods needed during stay-at-home orders included Nautilus exercise machines, kitchen appliances such as air fryers, coloring books to keep fractious kids occupied and laptop stands to set up home-based workstations.

Carson Optical, based on Long Island, asked for an exemption for optical aids. “Our magnifying products are a lifeline for many people, especially in times like this when they are quarantined from people who may assist them with their daily needs,” wrote Sharon Barnhart, an employee.

The RV Industry Association also appealed for help, saying that more people are taking vacations on the road instead of renting hotel rooms, and that trailers are also needed for first responders.

The trade association for the elevator and escalator industry reasoned that money not spent on elevator tariffs could be spent instead on COVID-19 response. “If USTR removes these tariffs, the decrease in the cost to install and repair elevators and escalators and their associated parts encourages hospitals and other medical facilities to make investments into critical equipment and apply savings directly towards combatting COVID-19,” wrote Dylan Isenberg, director of government affairs for National Elevator Industry Inc.

Some companies didn’t attempt to make much of a COVID-19 connection, using the docket as a chance to make a more general case for clemency during an economic downturn. “China is not stealing our go-kart technology or doing anything wrong except supplying affordable parts as part of a globalized economy,” wrote a commenter using the name Carlie Laves, advocating for the tariff reduction on go-kart parts. “For an AMERICAN small business to pay 25% in tariffs to help kids enjoy everyday outdoor play is absolutely ridiculous.”

Sydney Mintzer, an attorney with Mayer Brown who handles tariff exclusion cases, said he doubts the Trump administration will look favorably upon the nonmedical, more tangentially COVID-19-related products.

“I think they probably will be less sensitive to those, and more sensitive to the more health related issues,” he said.

But for some importers, the comment period was also just a chance to make their case publicly and perhaps bolster their chances with still-pending exclusion requests.

A coalition of bicycle manufacturers and retailers has already won exemptions for children’s bikes, long made almost exclusively in China. Now it’s asking for broader relief for lower-end adult-sized bikes that are flying off shelves as commuters seek an alternative to public transportation, and because tariffs depressed bicycle imports last year, draining inventories.

“It’s an opportunity for our industry to explain what we think the effects of COVID-19 are going to be on our members,” Alex Logemann, PeopleForBikes’ policy counsel, told ProPublica. “That’s not a thing that’s underlined in the exclusion process very well, there’s not a lot of space to explain those factors.”

Many of the products had already been denied for exclusions earlier, such as truck chassis, which a company called CIE Manufacturing argued are necessary during the pandemic to move essential goods. (Federal statistics show that highway freight transportation has been saggingfor months.)

“Every container that sits idle as a result of a shortage of chassis products could delay lifesaving equipment, pharmaceuticals or other life necessities from reaching communities, first responders, medical professionals and other individuals who desperately need those shipments to be made,” wrote CIE’s attorney Ronnie Miller, who did not respond to an email seeking further explanation.

Some companies expressed renewed frustration with the exclusion process, which typically requires hiring expensive lawyers and often has arbitrary, unpredictable results.

Danaher, a holding company for medically focused businesses — such as IDT, which made the original COVID-19 test commissioned by the Centers for Disease Control and Prevention — complained that asking staff to beg for tariff relief drained precious time. Industry associations have advocated for blanket tariff relief on medical products, rather than forcing each company to formulate complex justifications.

“The vast majority of Danaher’s original petitions for diagnostic, medical and other life sciences equipment were denied in 2018 and 2019, which is particularly discouraging given products such as iPhones and salad spinners received approval,” the company wrote. “Danaher is concerned about the potentially unnecessary expenditure of additional resources on a petition process with such an uncertain outcome.”

But the comments weren’t all from importers. The docket also includes vehement objections from some domestic producers, such as manufacturers of cotton swabs and washing machines, which argue that USTR shouldn’t let COVID-19 be used as an excuse to abandon its stated goal of pushing companies to restore supply chains in the U.S.

Scott Paul, who as head of the Alliance for American Manufacturing has supported some tariffs, hopes that USTR will stick to the plan and send consistent signals that critical products should be American-made — especially with so many people still out of work.

“I don’t believe that enough businesses have made good faith efforts to try to realign their supply chains,” Paul said. “There’s a lot of capacity in the U.S. to make products. If these importers wanted to help spur an economic recovery, they should take a look domestically.”

More Than 1 Million Stimulus Payments Issued To Deceased, Watchdog Finds

The federal government sent coronavirus stimulus payments to nearly 1.1 million deceased people totaling close to $1.4 billion, Congress’ independent watchdog said Thursday in revelations first reported by The Washington Post.

The U.S. Government Accountability Office, an independent agency that conducts investigations and reports to Congress, submitted the finding as part of a nearly 400-page report on the nearly $3 trillion in coronavirus relief spending that was approved by Congress in March and April.

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Dixie Chicks Rename Band As Movement To Remove Confederate Statues Grows

The Dixie Chicks are ready to make nice.

The platinum-selling, Grammy-winning country trio is dropping the “dixie” in their name after facing criticism over the term — a commonly used nickname to describe the Civil War-era South. The group announced the move as nationwide protests emerged in the wake of George Floyd’s death, prompting a movement to remove Confederate statues and memorials of other historical figures linked to racism.

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Stop Seizing Paychecks, Senators Write To Capital One And Other Debt Collectors

This story first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

The nation’s largest debt collectors should suspend seizing wages “immediately,” two prominent senators demanded in letters sent Wednesday.

The letters came in response to a ProPublica story this month that focused on how the most prolific filers of debt collection lawsuits, Capital One and large debt buying companies, continue to garnish paychecks amid the COVID-19 pandemic. While most courts shut down to new hearings in March, wage seizure orders obtained before then were allowed to continue in most places. That left some essential workers and others desperately searching for relief amid the economic downturn.

“Filing collection lawsuits and garnishing the wages of consumers already struggling to pay for basic necessities will only exacerbate the economic and public health crisis,” Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, wrote.

Brown and Warren sit on the Senate Banking Committee, which oversees financial services companies. Brown is the ranking member.

Capital One largely stopped filing new suits after mid-March, but other large collectors did not stop filing new suits. Warren and Brown alsowrote to Encore Capital Group and Portfolio Recovery Associates, two of the largest debt buyers in the country. Both of them continued to file suits into April and May, according to ProPublica’s review of online court databases.

In the letters, the senators also request an accounting from the companies of how many suits and wage garnishments they’ve filed this year. Because collection suits are filed in state and local courts, it’s impossible to arrive at a full accounting of such suits (although ProPublica has tried to shed light on the practice by rounding up data from various states). This makes an aggressive form of collection that affects millions of people each year largely invisible to the public. Answers from the companies may help to reveal the scope of the biggest plaintiffs’ activity.

In a statement in response to the letter, a Capital One spokesperson said: “Since the pandemic first began, we have been committed to working with all of our customers who are experiencing financial hardship as a result of COVID-19. In addition to deferring payments, offering tailored payment plans and waiving fees, we have stopped the filing of all new bank garnishments and lawsuits and have taken action to prevent the garnishment of any stimulus funds. We recognize that these are exceptional times and our policy is to work with any customer who needs help and is impacted by COVID-19.”

A spokesperson for Portfolio Recovery declined to comment, saying the company was reviewing the letter and preparing its response. ProPublica also contacted Encore for comment and will update this story if it responds.

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