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“A clarion call to arms”: Experts on why MAGA remains impervious to anti-Trump Republicans’ message

Salon

“A clarion call to arms”: Experts on why MAGA remains impervious to anti-Trump Republicans’ message

Chauncey DeVega – October 4, 2023

Trump Supporters Wally Skalij/Los Angeles Times via Getty Images

Trumpism is a public health crisis.

In his role as cult leader, Donald Trump’s direct threats and incitements of violence, terrorism, and mayhem – which include killing people – have encouraged the MAGA people and other members of the white right to engage in the same behavior. In the most recent high-profile example of right-wing violence and terrorism, last Thursday a Trump MAGA cultist went to a protest in a suburb of Albuquerque against the decision by the local government to reinstall a statue “honoring” a Spanish conquistador, Juan de Oñate. While there, the MAGA cultist attempted to provoke a fight and then pulled out his pistol and shot one of the protesters, who is an environmentalist and member of the Hopi tribe. The MAGA hat-wearing Trumpist reportedly laughed and smirked during his police interview.

On Monday, Trump threatened and raged at the judge presiding over his civil trial in New York for fraud and other financial crimes. Trump also verbally attacked and threatened New York Attorney General Letitia James, calling her a “racist” and “a horror show.” James is a Black woman. While in court, Trump scowled like an adult toddler and looked like he was having murderous thoughts of revenge and suffering. Trump’s performance was generally pompous and detached from reality, as the ex-president lied and claimed that he was being “persecuted” and is a type of victim-martyr for the MAGA cause. On Tuesday, the judge barred him from making personal attacks on court staff after the former president disparaged a law clerk. In all, Trump’s behavior was that of a cult leader and demagogue who is finally facing some type of serious accountability for his criminal behavior.

None of this really matters to Trump’s MAGA cultists and other followers. Trump’s hold over them remains very strong and appears to be largely immune to any outside intervention. Moreover, Trump’s power and control over the MAGA cult endures – despite and even more likely because of his criminal trials and escalating violence and other destructive and dangerous behavior.

To that point, last week New York Times political reporter Jonathan Swan highlighted an attempt by a group of anti-Trump conservatives to stop the ex-president by weakening his support among the MAGA cultists.Their efforts failed; Trump’s dark charism and cult-leader power is that great.

A well-funded group of anti-Trump conservatives has sent its donors a remarkably candid memo that reveals how resilient former President Donald J. Trump has been against millions of dollars of negative ads the group deployed against him in two early-voting states.
The political action committee, called Win It Back, has close ties to the influential fiscally conservative group Club for Growth. It has already spent more than $4 million trying to lower Mr. Trump’s support among Republican voters in Iowa and nearly $2 million more trying to damage him in South Carolina.
But in the memo — dated Thursday and obtained by The New York Times — the head of Win It Back PAC, David McIntosh, acknowledges to donors that after extensive testing of more than 40 anti-Trump television ads, “all attempts to undermine his conservative credentials on specific issues were ineffective.”
The memo will provide little reassurance to the rest of the field of Mr. Trump’s Republican rivals that there is any elusive message out there that can work to deflate his support.
“Even when you show video to Republican primary voters — with complete context — of President Trump saying something otherwise objectionable to primary voters, they find a way to rationalize and dismiss it,” Mr. McIntosh states in the “key learnings” section of the memo.

The article continues:

For the polling underpinning its analysis, Win It Back used WPA Intelligence — a firm that also works for the super PAC supporting Mr. Trump’s chief rival in the race for the presidential nomination, Gov. Ron DeSantis of Florida.
Examples of “failed” ads cited in the memo included attacks on Mr. Trump’s “handling of the pandemic, promotion of vaccines, praise of Dr. Fauci, insane government spending, failure to build the wall, recent attacks on pro-life legislation, refusal to fight woke issues, openness to gun control, and many others.” (Dr. Anthony S. Fauci led the national response to the Covid pandemic.)
The list of failed attacks is notable because it includes many of the arguments that Mr. DeSantis has tried against Mr. Trump. The former president leads Mr. DeSantis by more than 40 points in national polls and by around 30 points in Iowa, where Mr. DeSantis’s team believes he has the best shot of defeating Mr. Trump.
Mr. McIntosh, a former Indiana congressman who co-founded the Club for Growth and the Federalist Society, makes it clear in the memo that any anti-Trump messages need to be delivered with kid gloves. That might explain why Mr. DeSantis’s super PAC, Never Back Down, has treated Mr. Trump gingerly, even in ads meant to contrast his character and his record unfavorably against Mr. DeSantis’s accomplishments.

Swan’s reporting reinforces how Trumpism and American neofascism constitute a political, cultural, and moral crisis for the country and world. It is true that tens of millions of Americans correctly view Trump with contempt and understand that is an extreme threat to the country’s democracy and society. Unfortunately, tens of millions of other Americans view that same foul and evil behavior by Donald Trump as something admirable, evidence that he is “strong” and a “fighter” who is willing to break the law and undermine democracy to get things done for people like them. And perhaps even more troubling for what it reveals about the health of American society, there are tens of millions of other Americans who are indifferent to Trump’s evil and wrongdoing and the existential danger that he and the Republican fascists and MAGA movement represent to the country.

In an attempt to make better sense of the enduring power of the Trump MAGA cult, I asked a range of experts for their insights and reactions to this important new reporting by the New York Times.

Dr. Lance Dodes is a retired assistant clinical professor of psychiatry at Harvard Medical School and a training and supervising analyst emeritus at the Boston Psychoanalytic Society and Institute.

The recent finding that Trump supporters will rationalize and ignore even sophisticated ads produced by Republicans against Trump — ads showing him saying things that are opposed to the very values of the Republican audience — is strong evidence of the cult-like nature of at least the most committed of his followers. Cults have exactly this characteristic: unquestioning worship of a charismatic leader and inability to hear or consider opposing or even differing views, especially about the leader who must remain godlike. Trump’s personal primitive psychology, in which he believes himself to be godlike and has contempt for others as valuable human beings, makes him a perfect candidate to surround himself with a cult. In turn, members vulnerable to joining the cult seek just such a godlike figure in a regressive wish to be protected, cared for, and told how to think. The irony of course is that the leader, Trump in this case, cares only about his grandiosity and nothing at all about them or their welfare.

It’s been impossible to draw these regressed followers away from the cult not only because of their wishful belief in their charismatic god, but also because leaving the cult would mean the loss of support and identity from the other cult members who, like Trump himself, would condemn them as evil.

To enable cult members to leave they would have to have a significantly large enough number of others to create a new inclusive, protective group to which they could attach themselves. That might happen if a new charismatic leader arose to lead them away in large enough numbers to feel safe rebelling from the old leader. It would help for there to be a major event that a new leader within or outside the group could seize upon to redirect the members, like the honest child in the fable who finally spoke up to say the emperor had no clothes. There probably are figures within the Republican Party who could serve in that role, but it would require more moral and political courage than we have seen so far.

Jen Senko is the director of the documentary “The Brainwashing of My Dad.”

Yes, Trump COULD stand in the middle of Fifth Avenue and shoot someone, and they would still be devoted. Dare I say he could even claim he’s a woke lib and his followers wouldn’t even hear it. It no longer matters what he says.

We all know by now; this is classic cult behavior. It’s all about the leader, not the ideology or what the person they follow represents—they might represent nothing. Cult followers abdicate their reasoning, and their own ideas of what is good or bad to a leader. Giving themselves over to a leader absolves them of any guilt or responsibility. If confused by all the stuff flooding the zone and the contradictions in the news, it’s almost a relief to just hand it over to a leader who says He Knows.

Marcel Danesi is Professor Emeritus of linguistic anthropology and semiotics at the University of Toronto. His new book is Politics, Lies and Conspiracy Theories: A Cognitive Linguistic Perspective.

Oppositional messaging in the case of a “culture war leader” will never work, because it is seen as the words of enemies against Trump and his followers. Trump’s lies are thus not interpreted as destructive words but as part of a clarion call to arms to overturn the deep state that must be defeated to restore America to its purported roots, which, incidentally, Trump has never specified what he means by them, in true Orwellian fashion. Any message against him is thus filtered out as an attack from opposing warring armies in the ongoing cultural war, and thus discarded as tactics. Trump’s lies are perceived to be verbal weapons in that war. There is nothing Trump could say or do that would erode support from his followers, because he is seen as the leader of the greater cause of taking down the enemies that he and his blind followers see as the source of America’s and their own troubles, and as eroding the fabric of American society. Outside of Trump’s influence, the same people can be compassionate, empathic, generous, but in their Trump-aligned echo chamber they become antisocial toward outsiders. It is somewhat ironic to observe that Trump and his followers portray their battle as a counterculture one, as did the hippies in the 1960s and 1970s, portraying the government as the “establishment” and the liberal democratic state—again quite ironically—as the enemy of freedom and true American values.

Dr. Justin Frank is a former clinical professor of psychiatry at the George Washington University Medical Center and the author of “Trump on the Couch: Inside the Mind of the President.”

I have always believed that an important part of psychic development is the ability to face, feel, and think about loss. Trump never had that capacity, nor was allowed to have it, growing up. He immediately transformed loss into blaming others, into triumphant denial (refusing to accept that he lost), or into acts of revenge. All three characteristics dominated the January 6 insurrection.

What I learned in my psychiatric residency – as well as in my own life – is that sorrow is the vitamin of growth. Does that make denial the vitamin of autocracy? During the 2016 election Trump said that if he lost, the entire campaign would have been a waste of time and energy. Denying and dismissing loss led us to January 6. Just remember Abe Lincoln’s statement after he lost an election: “I feel like a 16-year-old who stubbed his toe: I’m too old to cry but it hurts too much to laugh” Facing the painful process of renunciation leads also to emotional growth and maturity. So, how does the GOP win back MAGA followers? It seems impossible, even if Trump goes to prison and is completely discredited.

To me, the operative word is not “win,” but wean. Trump supporters are attached to him at the mouth, at the lips, at the heart and soul. He is their divine leader, much the way an evangelical preacher becomes more important to his congregation – as the personification of God’s power – than the scriptures they recite. Trump has a similar deep effect on his flock. The only way they could be brought back to the GOP hymnal is to gently, persistently, non-judgmentally help them discover for themselves Trump’s genuine contempt for them, our country and its health and wellbeing.

Rich Logis is a former right-wing pundit and high-ranking Trump supporter. He describes himself as “a remorseful ex-Trump, DeSantis and GOP voter”. Logis is the founder of Perfect Our Union, an organization that is dedicated to healing political traumatization; building diverse, pro-democracy alliances; and perfecting our Union.

I understand the fatigue from coverage of Trump; constant MAGA/Trump trauma is exhausting and soul-draining. But it remains necessary, because our nation must be continually reminded that there is nothing Trump could do, or say, to lose the support of most voters who identify as MAGA or Ultra-MAGA. And, as a one-time, zealously devout MAGA voter, I mean “nothing” literally, not figuratively. The country club conservatives, über-wealthy GOP donors and Ronald Reagan mythologizers haven’t accepted that they no longer run the party, as evidenced by myriad Republican focus groups — whose attendees affirm their commitment to voting Trump—and the millions spent in ads intended to weaken Trump — but have the opposite intended effect.

$1 trillion in anti-Trump would help—not hurt—Trump. Electorally defeating MAGA is non-negotiable; our democratic republic, almost certainly, would not survive a second Trump presidency (which I also fear could be a permanent presidency). It’s important to be candid with the American people: electorally winning, however, is the start—not the finish—of de-traumatizing our nation from MAGA.

Joe Walsh was a Republican congressman and a leading Tea Party conservative. He is now a prominent conservative voice against Donald Trump and the host of the podcast “White Flag with Joe Walsh.”

It is a cult. How many times must that be said. One of America’s two major political parties has become completely radicalized and has given up on democracy. Trump is their cult leader. Each and every evidence of his corruption and criminality only strengthens his support within his cult. Our only job now is to defeat them.

Russian rouble briefly returns to ‘laughing stock’ level that prompted emergency interest rate hikes last time

Fortune

Russian rouble briefly returns to ‘laughing stock’ level that prompted emergency interest rate hikes last time

Prarthana Prakash – October 3, 2023

The Russian rouble hit the skids after Russia’s invasion of Ukraine last February. Initially, the government took a hands-off approach to deal with the rollercoaster ride of exchange rates. Instead, they boasted about the nation’s economic resilience in the face of sanctions and shrinking exports. But come August, they had to step in as the rouble nosedived to a 16-month low, worth less than a penny.

A déjà vu moment played out on a recent Tuesday, with the rouble teetering just below the 100-mark against the U.S. dollar—a critical benchmark for Russia’s currency. Although the rouble managed a modest comeback, this embarrassing stumble highlighted its shaky footing and raised concerns of further depreciation.

The rouble’s value has taken a beating this year, shedding almost 30% of its worth against the greenback since January.

A number of things may have influenced the drop in exchange rates—from foreign currency outflows and declining trade activity to Russia’s waning current account surplus.

But some factors may still be working to Russia’s advantage, such as its budget.

The falling value of the rouble means more of the Russian currency for every dollar earned through the trade of oil or other products. This, in turn, has given the Kremlin more money to pour into the military or social schemes, for instance, to help offset the impact of sanctions.

Despite the seeming upside of a weak ruble and the Kremlin’s swift actions to stem any negative effects from it, the Russian currency’s value is not out of the woods yet.

The August slump

When the rouble weakened to more than 100 to the U.S. dollar in August, the Bank of Russia called an “extraordinary meeting”, subsequently hiking interest rates by 350 basis points to 12%. The bank also said it would halt foreign currency purchases on the domestic market until the end of the year in an effort to stabilize its financial markets.

Russia’s state media and senior officials were also rattled by the rouble’s tumble into three-digit territory. Vladimir Solovyov, a popular TV person in Russia and President Vladimir Putin’s ally, said the country had become a laughing stock, pointing to how dire the situation had gotten.

Putin’s economic advisor, Maxim Oreshkin, told state-owned news outlet TASS that “loose monetary policy” was causing the drop in the rouble’s exchange rate and exacerbating inflation.

“A weak ruble complicates the structural restructuring of the economy and negatively affects the real incomes of the population. A strong ruble is in the interests of the Russian economy,” Oreshkin said according to the translation of an August op-ed in TASS.

In September, the central bank once against raised rates to 13% to tackle the falling rouble value and stubborn inflation, which was at 5.33% at the time. Further rate hikes are expected in the next central bank meeting later this month.

The rouble has wavered a lot since 2022—shortly after Russia’s invasion of Ukraine it hit an all-time low of 120 roubles to the U.S. dollar, but by last June, the currency had recovered to nearly 50 roubles to the dollar when oil and gas prices soared.

“This level (100) is not a technical resistance, it’s an important psychological barrier,” said Russian investment group Alor Broker’s Alexei Antonov told Reuters. “For now, everything speaks in favour of the rouble continuing to get cheaper.”

The rouble’s current weakness could be temporary, but the Russian government faces pressures on its finances and more prolonged effects of a weaker currency. Plunging export volumes continue to weigh on the economy, as the current account surplus shrank 86% year-on-year to just $25.6 billion in January-August. Elevated consumer prices along with a depreciated rouble make it harder for the average Russian to afford basic goods.

As Moscow struggles to keep its currency strong while navigating other macroeconomic challenges, experts suggest that a drop in the rouble’s exchange rate is not quite an economic crisis, although it does ring alarm bells for the government.

“This is the closest we came to a real economic problem since the start of the war,” Janis Kluge, an expert in the Russian economy at the German Institute for International and Security Affairs told the Associated Press in August following the rouble’s drop to a 16-month low. “In Russia, the exchange rate is always seen as the most important indicator of the health of the economy.”

No, America is not seeing an unprecedented surge in immigration. New Census data prove it.

USA Today – Opinion

No, America is not seeing an unprecedented surge in immigration. New Census data prove it.

David Bier – October 3, 2023

The Census Bureau this month published its most robust estimate of the U.S. immigrant population, and it casts doubt on a central Republican criticism of President Joe Biden: that immigration has spiraled out of his control on his watch.

In fact, the new data – analyzed by our team at the Cato Institute – indicate that the number of immigrants is still 2 million below the Census Bureau’s 2017 predictions. The hyperbolic rhetoric should take a backseat to the verifiable data.

Take Stephen Miller, former adviser to President Donald Trump. By July 2022, he had already announced that President Biden had “eradicated his own nation’s borders.”

Of course, this is a goofy conspiracy theory. Borders divide governmental jurisdictions, which it should go without saying haven’t changed, and they have nothing to do with the number of people who cross them. But the new Census data make this claim risible for another reason: The immigrant population had only risen marginally.

Immigrant share of U.S. population is just 13.9%

According to the American Community Survey (the Census Bureau’s annual mini-census), the immigrant share of the U.S. population rose just 0.3 percentage points between July 2021 and July 2022, reaching 13.9%.

If a shift of 0.3 percentage points can eradicate the United States as a country, the Trump administration must have left the United States in worse shape than anyone thought. Fortunately, it is the political rhetoric that is in worse shape, not the country.

New U.S. citizens recite the Pledge of Allegiance at a naturalization ceremony on July 4, 2023, at George Washington's Mount Vernon in Northern Virginia.

The immigrant population did grow by nearly a million from July 2021 to July 2022. But consider the context. In 2017, the Census predicted that by last year, the immigrant population would have grown by 3.6 million. In reality, it grew 1.7 million – less than half the number the models predicted.

Just because the immigrant population isn’t shrinking like Miller wants doesn’t mean that America has ceased to exist.

Fix immigration loophole: I grew up an American – legally. Our broken immigration system forced me to deport.

On a longer timescale, it is apparent that the past decade has seen unusually slow growth in immigration. In fact, the period from 2012 to 2022 saw slower growth in the immigrant share of the population than the 2000s, 1990s, 1980s and 1970s. You have to go all the way back to the 1960s, when the immigrant population actually shrank, to find a lower growth rate.

Nor is America unusual compared with its peer nations. The United States also ranks in the bottom third of wealthy countries for its immigrant population share. America’s actually becoming less competitive for immigrant workers.

How worker shortage hurts the United States

The new Census data are much more important than other estimates of immigration. The American Community Survey collects information on a massive portion of the U.S. population, which prevents significant sampling errors, and it accounts not just for the number of immigrants coming in but also the numbers who are deported, leave on their own or die.

The new data dismantle the narrative that the United States is seeing an unprecedented surge in immigration. Moreover, as we face the lowest population growth in U.S. history, a decline largely attributed to Americans having fewer children, the immigrant share of the population should naturally have a larger impact. But even in these conditions, the immigrant share is growing at the slowest rate we’ve seen in a generation.

Of course, the number of immigrants has increased over the past year, too, but the new Census numbers show that we have plenty of room to grow.

US semiconductor production ramps up. But without STEM workforce, we’ll lose the race.

Regardless, the broader concern isn’t just about countering inflated rhetoric but addressing the very real economic challenges the United States faces due to slowing population growth. We’re staring at a massive worker shortage, a precipitous drop in the worker-to-retiree ratio and a worrying exodus of skilled workers to nations like China.

The solution? We need people. We need workers across all skill levels to drive our economy, support our aging population and maintain our global competitive edge. Immigrants have historically played, and can continue to play, a crucial role in filling these gaps.

While it is natural to engage in debates about immigration policy and its implications, it is essential to root these discussions in fact rather than fiction. Instead of raising alarms over exaggerated claims of border erasure, our focus should be on crafting policies that align with our national interests, values and the reality reflected in the data.

After all, America thrives when it welcomes, integrates and capitalizes on the diverse skills and perspectives that immigrants bring to our shores.

David Bier is the associate director of immigration studies at the Cato Institute.

The unsung hero behind Donald Trump’s crushing fraud case: Alexandria Ocasio-Cortez

Salon

The unsung hero behind Donald Trump’s crushing fraud case: Alexandria Ocasio-Cortez

Amanda Marcotte – October 3, 2023

Alexandria Ocasio-Cortez and Donald Trump Photo illustration by Salon/Getty Images

The main hero of the Donald Trump fraud trial that kicked off Monday is, of course, Letitia James. New York’s attorney general has worked tirelessly for years on investigating Trump’s decades of criminal and corrupt behavior, resulting in a $250 million lawsuit accusing Trump and his two grown sons of running a fraudulent business. Her case is so airtight, in fact, that New York Supreme Court Justice Arthur Engoron ruled Trump liable for fraud from the bench, rather than waste a jury’s time figuring out what was indisputable from the evidence. The ensuing trial — which drew Trump himself into the Manhattan courtroom this week — is entirely about how serious the penalities will be.

There are weeks, maybe months to go before we learn how much Trump will have to pay for defrauding investors, banks and insurance companies over several decades. So we’ll have to wait a bit for James to get her virtual ticker-tape parade for kicking the most hated man in New York real estate out of town. In the meantime, however, there’s another well-known New York City politician who is owed a debt of gratitude for bringing some accountability to Trump’s gold-painted front door: Rep. Alexandria Ocasio-Cortez.

In our era of 24/7 media onslaught, four years can seem like like four lifetimes, so it’s easy to forget that when Ocasio-Cortez arrived in Congress in January 2019, there was a lot of curiosity and outright skepticism about her among the Beltway press. She’d gotten there in improbable fashion, winning a 2018 primary against Rep. Joe Crowley — a power broker in Queens who chaired the House Democratic caucus and was seen as a possible successor to Nancy Pelosi. Before that, Ocasio-Cortez had been working as a bartender in a Manhattan taco joint. So the media was watching eagerly to see whether she’d rise to the occasion or fall flat on her face.

Ocasio-Cortez’s first big test came in February 2019, when Trump’s former personal attorney and “fixer,” Michael Cohen, testified before the House Oversight Committee. Cohen was about to go to prison for a campaign finance crime committed at Trump’s behest, and told a genuinely moving story of crime and betrayal. But most of the Democrats on the committee whiffed this opportunity to ask questions of a guy who had been nestled within the Trump gang for years. Instead, they devoted their time to grandstanding for the cameras, rather than learning any new information about Trump’s illegal dealings.

Except, of course, for the young congresswoman from a working-class, multiracial district in Queens and the Bronx. Much to the surprise and delight of mainstream journalists, Ocasio-Cortez was all business. She showed up with a long list of questions about how much Cohen knew about Trump’s business dealings and whether the man currently in the White House had spent his previous career defrauding creditors and investors. Cohen’s answer: Trump was criming all the time. The transcript is worth re-reading and relishing:

Ocasio-Cortez: To your knowledge, did the president ever provide inflated assets to an insurance company?
Cohen: Yes.
Ocasio-Cortez: Who else knows that the president did this?
Cohen: Allen Weisselberg, Ron Lieberman and Matthew Calamari.
Ocasio-Cortez: And where would the committee find more information on this? Do you think we need to review his financial statements and his tax returns in order to compare them?
Cohen: Yes, and you would find it at the Trump Org.

That line of questioning, in which Cohen confirmed that Trump routinely manipulated numbers to evade taxes while defrauding banks and insurance companies, was the first step on the long road to Trump making a stink-face in court on Monday morning. New York state regulators started to sniff around Trump’s business. James had already been dealing with a smaller case involving Trump’s charitable foundation, but Cohen’s testimony opened the door to a much bigger investigation.

Three years later, James came out with the stunning — and largely irrefutable — accusations she’s presenting in court this week: Trump’s wealth is built on a sandcastle of lies. He doubles, triples or quadruples the valuations of his assets in order to get loans from creditors, and drastically undervalues them to evade taxes. With this shell game, the four-times-indicted ex-president lives like a rich man despite his proven inability to make much money from his business ventures. Everything Cohen said before that committee has pretty much proven true, and only AOC even thought to ask him about it.

The near-certainty that Trump’s allegedly enormous wealth is an illusion has already been documented in reporting on his tax documents showing that he is deep in debt — perhaps as much $1 billion — even though inherited nearly half a billion from his father and earned another $427 million from his reality-TV star turn on “The Apprentice.” All available evidence suggests Trump blew through that money and kept digging, creating a money pit so enormous that banks likely had given up hope of seeing any of it repaid. Yet Trump has kept up the illusion of immense wealth with his private jets and entourages, all paid for through dozens of opaque shell companies — and, as James’ evidence suggests, through massive fraud.

He might have gotten away with it, too, if not for that nosy congresswoman from the outer boroughs. I’m a little surprised that almost no one seems to remember the crucial role Ocasio-Cortez played in this. At the time of the hearing, after all, she got an avalanche of good coverage for her showing, especially from journalists who were sick of listening to politicians bloviate rather than perform their constitutional duties of legislative oversight. Her willingness to do her actual job, however, didn’t just make her look good by comparison. It got a very big ball rolling that could eventually demollish Trump’s “business” in New York.

One reason AOC’s role has been forgotten, I suspect, is that the Beltway press tends to think of “progressives” as entirely distinct from the people who really want to see Trump go to jail. Turn on MSNBC or CNN, after all, and the people talking on the Trump crime-and-punishment beat are often centrist Democrats and never-Trump Republicans, your Claire McCaskills and George Conways and the like. Progressive Democrats are usually called upon to talk about policy issues: health care, climate change, jobs programs and so on. So there’s this unspoken assumption that progressives don’t much care about corruption and accountability.

In fact, there’s substantial evidence that progressives may put an even higher value on opposing corruption than their more moderate colleagues. For instance, progressives like Ocasio-Cortez and Sen. John Fetterman of Pennsylvania were among the first to call for the resignation of Sen. Bob Menendez, D-N.J., after his recent indictment on bribery and corruption charges. This isn’t just about political progressives also being people of conscience. I think they understand how intertwined corruption and authoritarian politics are, and understand you can’t fight one without fighting the other.

Authoritarians like Trump gain power by exploiting public cynicism. The more that voters believe that all politicians cheat the system, the more decent citizens will give up engaging meaningfully in politics at all. Eventually, the only people left in politics are the ones with no vision of a better world beyond a bitter desire to stick it to racial minorities, LGBTQ people and women. Getting people to believe in equal justice and functional government is a necessary prerequisite if folks like Fetterman and Ocasio-Cortez are to make any progress on the social and economic issues that matter most to them.

It makes sense that AOC opened the door for the massive lawsuit that may bring Donald Trump’s business empire crashing down. Maybe the main reason she’s not taking more credit for that is that in the here and now she’s busy trying to expose the corruption of House Republicans.

Arizona moves to end Saudi firm Fondomonte’s groundwater deals to grow, export alfalfa

AZ Central – The Arizona Republic

Arizona moves to end Saudi firm Fondomonte’s groundwater deals to grow, export alfalfa

Stacey Barchenger, Arizona Republic – October 2, 2023

Gov. Katie Hobbs’ administration on Monday announced two steps to stop a controversial Saudi Arabian company from using groundwater beneath state land in western Arizona to grow and export alfalfa.

Hobbs said in a statement that the Arizona State Land Department had canceled one of its leases to Fondomonte Arizona, and would not renew three others that are set to expire in February.

Those four account for all of Fondomonte’s leases in the Butler Valley near Bouse, though the company leases other state land elsewhere, according to the Governor’s Office.

The company farmed about 3,5000 acres of state land in Butler Valley to grow feed for dairy cows in Saudi Arabia and is allowed to pump groundwater for that purpose entirely unchecked and unpaid for.

The issue was brought to light last year by The Arizona Republic, which highlighted Fondomonte as an example of companies that get below-market-rate leases on Arizona’s vast stretches of state land. Fondomonte was unique in that its leases allowed it to draw water from a groundwater supply earmarked as a possible future source for Phoenix and other metro areas.

Fondomonte’s presence in western Arizona became a political lightning rod as policymakers grappled with a megadrought, a decreasing supply from the Colorado River and increasing demand for water in the form of a growing population.

“I’m not afraid to do what my predecessors refused to do — hold people accountable, maximize value for the state land trust, and protect Arizona’s water future,” Hobbs said in a statement. “It’s unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease.”

While leases of state land carry penalties for early termination, the Governor’s Office said the first Fondomonte lease was canceled because the company was in default on “numerous items,” including failing to properly store fuel and diesel exhaust fluid. Fondomonte was given notice of those issues in November 2016, and nearly seven years later, a mid-August inspection showed the company had not fixed those problems, according to Hobbs’ office.

Ground water is pumped into a canal to irrigate a field, February 25, 2022, at Fondomonte's Butler Valley Ranch near Bouse.

The other leases would not be renewed because of Fondomonte’s draw on “excessive amounts of water” in the Butler Valley, one of five water transportation basins that allow water to be moved around the state and that has been earmarked as a possible future water supply for Phoenix and other metro areas.

Fondomonte said through a spokesperson it was reviewing the notifications from Hobbs and the State Land Department but that it believed “the state is mistaken that the company is in breach of its lease.”

“Fondomonte will work with the Governor’s Office to highlight these factual errors,” spokesperson Barrett Marson said. “Fondomonte is adhering to all the conditions of the lease, and thus we have done everything required of us under these conditions.

“As for the other leases the state intends to not renew, this would set a dangerous precedent for all farmers on state land leases, including being extremely costly to the state and Arizona taxpayers. Fondomonte will explore all avenues to ensure there is no discrimination or unfair treatment.”

The original story: Arizona provides sweet deal to Saudi farm to pump water from Phoenix’s backup supply

Hobbs began criticizing the sweetheart deals to Fondomonte on the campaign trail last year during her run for governor. Her administration has this year revoked well permits for the company and paused renewals and applications to lease state-owned lands in groundwater transportation basins.

Arizona leases vast stretches of its publicly owned land to private companies, turning a profit that funds the State Land Trust and its various beneficiaries, the largest of which is K-12 education. In 2021, the state received $4.3 million for its about 160,000 acres of leased land for agriculture, according to the department.

The Republic’s reporting highlighted other shortcomings of those leases, including agricultural rental rates that haven’t changed in more than 15 years.

Republican La Paz County Supervisor Holly Irwin has been raising concerns for eight years about such leases and their toll on the state’s water supply.

“I’m just so glad we have leadership in this current administration that listened to La Paz County’s voice,” she told The Republic. “For the first time, I feel like there’s real hope in dealing with the water issues here.”

Irwin commended Hobbs, as well as Democratic Attorney General Kris Mayes and U.S. Rep. Ruben Gallego, D-Ariz., for their work on the state’s water issues.

Mayes has taken aim at well drilling permits given to Fondomonte and criticized the state Department of Water Resources, which she has said is not following groundwater management laws.

Gallego, who is running for U.S. Senate next year, introduced a bill in Congress that would levy a 300% tax on the sale and export of any water-intensive crop by a foreign company or government.

“For all of our leaders to come together to take a look at this issue and realize it’s wrong, it shouldn’t matter what side of the aisle you’re on,” Irwin said. “It demonstrates how government should work.”

Mayes, however, suggested the government’s response didn’t happen fast enough or reach to systemic issues with state land leases.

“This decision to protect Arizona’s precious groundwater resources and uphold the integrity of our state land trust is a good step in the right direction for the future of Arizona,” Mayes said in a statement. She said while the announcement was “commendable, it should have been taken by state government much earlier.”

“The failure to act sooner underscores the need for greater oversight and accountability in the management of our state’s most vital resource. … The decision by the prior administration to allow foreign corporations to stick straws in the ground and pump unlimited amounts of groundwater to export alfalfa is scandalous.”

Hobbs was sworn in as governor on Jan. 2, following former Gov. Doug Ducey, a Republican, who served two four-year terms in office.

“Crooked as a barrel of fish hooks”: Whistleblower accuses Sarah Huckabee Sanders of ethics scandal

Salon

“Crooked as a barrel of fish hooks”: Whistleblower accuses Sarah Huckabee Sanders of ethics scandal

Gabriella Ferrigine – October 2, 2023

Sarah Huckabee Sanders Tom Williams/CQ-Roll Call, Inc via Getty Images

The lawyer for an anonymous whistleblower has renewed his client’s claim that Arkansas Gov. Sarah Huckabee Sanders altered and withheld public records in connection to her office’s spending habits. Attorney Tom Mars, in a letter sent to state Sen. Jimmy Hickey, provided client testimony and supporting documents for a request for a legislative audit. Hickey last month asked the Legislative Joint Auditing Committee to investigate the purchase of a $19,000 lectern by Sanders’ office. He also asked the committee to scrutinize the “retroactive shielding of several government records after Sanders signed additional Freedom of Information Act exemptions into law this month after a special legislative session,” according to The Arkansas Advocate. “I have seen a copy of the letter you sent to Sen. Wallace and Rep. Gazaway, Chairpersons of the Legislative Joint Audit Committee,” Mars wrote, “requesting an audit of the following matters: (1) the purchase of a podium or lectern from Beckett Events LLC for the use of the Governor’s Office; and (2) all matters, involving the Governor or the Governor’s Office, made confidential by Section 4(a) of Act 7 of the First Extraordinary Session of 2023.”

“Does item (2) in your request encompass any documents that were: (a) altered by the Governor’s Office before being produced in response to a request for copies of public records made pursuant to the Arkansas Freedom of Information Act (“FOIA”) and (b) non-exempt documents that were knowingly withheld from production under the FOIA at the direction of the Governor’s office?” The letter adds that Mars’ client, a “witness with firsthand knowledge of these matters,” can “provide clear and convincing evidence of those occurrences to the Legislative Joint Audit Committee.”

Democratic National Committee Chair Jaime Harrison blasted Sanders and her father, Mike Huckabee — the former governor of Arkansas — over the alleged scandal. “Her daddy is Mike Huckabee,” Harrison wrote on X, formerly Twitter. “She lied every day to the press on behalf of Trump … who on this spinning blue ball called Earth is surprised that Sarah is as crooked as a barrel of fish hooks?!”

Republican blockade of Ukraine aid and Slovakia’s election play into Putin’s hands

CNN

Republican blockade of Ukraine aid and Slovakia’s election play into Putin’s hands

Analysis by Stephen Collinson, CNN – October 2, 2023

Tom Brenner for The Washington Post/Getty Images

Republicans opposed to the US funding Ukraine’s lifeline against Russia scored their first major success when House Speaker Kevin McCarthy didn’t include a $6 billion request for aid in a stopgap bill that averted a government shutdown.

The result, which left President Joe Biden demanding swift action to fulfill Kyiv’s needs, made for a good weekend for Russian President Vladimir Putin. But it left Ukrainian President Volodymyr Zelensky with plenty more to worry about after shifts elsewhere in global politics played into Moscow’s push to outlast the West in Russia’s war in Ukraine. Biden suggested he had a “deal” with McCarthy on moving assistance for Ukraine in a separate measure, but the Republican speaker’s office declined to confirm any such agreement.

Drama in the US coincided with another development this weekend that will cause concern in Ukraine. In neighboring Slovakia, former pro-Russia Prime Minister Robert Fico’s populist party won parliamentary elections. Fico anchored his campaign on his anti-US rhetoric, vows to stop sending weapons to Ukraine and a pledge to thwart Kyiv’s NATO ambitions.

Blows to Ukraine in the US and Slovakia came on top of its spat over grain exports with Poland – one of Kyiv’s earliest and most staunch allies – which led Warsaw to warn it could stop arms shipments to its neighbor.

Each of these developments stresses a rising danger for Ukraine – that the arms and aid it needs to sustain its fight against Russia’s onslaught are increasingly getting dragged into the bitter politics of national elections in the West.

Any sign of weakening resolve for arming Ukraine among Western leaders and legislatures is an added incentive for Putin to try to extend the conflict into a war of attrition in the hope that Western publics will tire of the fight and that leaders like ex-President Donald Trump might win power next year and ditch Kyiv.

The headlines are alarming for Ukraine. And while the realities of international politics suggest that time is not yet running out for the remarkable pipeline of arms and aid that fueled its heroic resistance to Russia’s onslaught, the political ground could be shifting and augur serious long-term concerns for Kyiv.

A potential propaganda coup for Putin

In Slovakia, Fico’s SMER party won Saturday’s parliamentary elections in a swing of the political pendulum back toward the populism and nationalism that delivered Trump, Brexit and gains by far-right parties in France and Germany in recent years. In the glow of victory, Fico warned, “Slovakia and people in Slovakia have bigger problems than Ukraine,” and added he would push for peace talks.

Slovakia, a member of NATO, was previously a vocal ally of Ukraine, and a turn against its neighbor would hand Putin valuable propaganda openings. Yet on its own, Slovakia has no power to push negotiations to start. In any case, there’s no sign Ukraine is ready to talk as its offensive grinds on, or that Putin has any political or strategic motivations to do so either. And Fico has to worry about his own coalition-building before he starts deciding Ukraine policy.

And a Slovakian halt to arms shipments is unlikely to tilt the battlefield toward Russia. It did send Kyiv old Soviet MiG jets and other equipment for which it was compensated by the European Union. But its contributions are dwarfed by those of larger European powers and the United States.

A threat to block Ukraine’s entry into NATO sounds alarming. But the NATO summit this year showed that there is no prospect of Kyiv joining the Western alliance soon anyhow. And even before the Slovakian election, getting all alliance members to back its eventual membership was already a struggle. Turkey, for instance, is still blocking the accession of Sweden, a far less controversial new member of the self-defense club.

Slovakia might be home to many voters sympathetic to Moscow given its decades as part of the former Czechoslovakia in the Warsaw Pact under the iron grip of the Soviet Union. But as a NATO member, it is still dependent on the group – and, ultimately, the US – for its defense. And its economy is reliant on its European Union membership. This gives the West substantial leverage in Bratislava.

Geopolitical realities may also be decisive in Poland’s dispute with Ukraine. Many analysts believe temperatures will cool after a tense election later this month. Poland’s antipathy to Russia and desire to prevent it from winning a victory in Ukraine are borne out of decades of bitter political history unlikely to be diluted by shifting political winds. And its posture is also critical to its rising importance to the United States as one of Washington’s most important European allies.

The GOP tide against Ukraine gathers strength

Zelensky’s visit to Washington to shore up Ukraine aid last month looks prescient. But after a wild week, it’s clear that future tranches of US assistance will be far harder for the Biden administration to drive through Congress.

McCarthy, whose speakership is wobbling, pushed through a stopgap spending bill to keep the government open through mid-November, without $6 billion in Ukraine funding the Senate hoped to add to the package – which in itself represented only about a quarter of Biden’s latest Ukraine aid request. The move will not immediately imperil Ukraine on the battlefield, but a longer delay could have serious consequences. And politically, it could embolden Putin and fuel doubts about US staying power in the war among allied European leaders who are standing firm but also need to manage public opinion.

Some of Ukraine’s loudest supporters in Congress were deeply disappointed. “Putin is celebrating,” Democratic Rep. Mike Quigley of Illinois told CNN. “I don’t see how the dynamics change in 45 days.” The co-chair of the Congressional Ukraine Caucus was the only House Democrat to vote against the stopgap measure.

House Republican rebels, some of whom are threatening to topple McCarthy after he used Democratic votes to temporarily keep the government open at current spending levels, are largely opposed to more aid for Ukraine. They include Rep. Matt Gaetz of Florida and pro-Trump Georgia Rep. Marjorie Taylor Greene, who wrote on social media Saturday that “Joe Biden treats Ukraine as the 51st state” after previously warning that more funds for Kyiv would be “blood money.”

Ukraine refused to panic over the interruption to its latest injection of aid in a multi-billion-dollar initiative on which its war effort largely depends, at least in its current scale. Foreign Minister Dmytro Kuleba said his country is working with the US Congress on the issue.

“We do not feel that US support has been shattered, because the US understands that what is at stake in Ukraine is much bigger than just Ukraine. It’s about the stability and predictability of the world, and therefore I believe that we will be able to find the necessary solutions,” Kuleba said.

The danger for Zelensky is that such rhetoric solidifies into a sense among voters that American interests and Ukraine’s interests are opposite. At Republican campaign events, voters often voice antipathy to sending billions of dollars to Ukraine, and polls show rising public skepticism.

Still, for now, there is a bipartisan Washington majority in favor of Ukraine aid, although the chaos in the GOP raises questions about how it will be delivered. Biden on Sunday seemed to indicate he had a deal with McCarthy on moving the funds in a separate bill, although the speaker may be too weak to deliver on any promises. “I fully expect the speaker to keep his commitment to secure the passage and support needed to help Ukraine as they defend themselves against aggression and brutality,” the president said.

McCarthy suggested that a framework that also sends more money to secure the southern US border might open the way for Ukraine funds. “They’re not going to get some package if the border is not secure,” the speaker said on CBS’ “Face the Nation” on Sunday. “I support being able to make sure Ukraine has the weapons that they need. But I firmly support the border first. So we’ve got to find a way that we can do this together.”

But if McCarthy is toppled and replaced by a more radical speaker, Ukraine could run out of luck.

Longer term, the US elections in November 2024 are critical. Trump, the Republican front-runner, has vowed to end the war in 24 hours if elected president, presumably on terms that would favor Putin, whom he has called a “genius” and before whom he has often genuflected.

And Ukraine’s would not be the only future on the line. A second Trump term could pose an existential threat to NATO and the entire post-World War II and Cold War concept of the West.

Putin’s Next Target: U.S. Support for Ukraine, Officials Say

The New York Times

Putin’s Next Target: U.S. Support for Ukraine, Officials Say

Julian E. Barnes – October 2, 2023

Marines of the Ukrainian Armed Forces during training exercises in Donetsk Region, Ukraine on Aug. 28, 2023. (Tyler Hicks/The New York Times)

WASHINGTON — Russia’s strategy to win the war in Ukraine is to outlast the West.

But how does President Vladimir Putin plan to do that?

U.S. officials said they are convinced that Putin intends to try to end U.S. and European support for Ukraine by using his spy agencies to push propaganda supporting pro-Russian political parties and by stoking conspiracy theories with new technologies.

The Russia disinformation aims to increase support for candidates opposing Ukraine aid with the ultimate goal of stopping international military assistance to Ukraine.

Russia has been frustrated that the United States and Europe have largely remained united on continued military and economic support for Ukraine, U.S. officials said.

That military aid has kept Ukraine in the fight, put Russia’s original goals of taking Kyiv, the capital, and Odesa out of reach and even halted its more modest objective to control all of the Donbas region, in eastern Ukraine.

But Putin believes he can influence American politics to weaken support for Ukraine and potentially restore his battlefield advantage, U.S. officials said.

Putin, the officials said, appears to be closely watching U.S. political debates over Ukraine assistance. Republican opposition to sending more money to Ukraine forced congressional leaders to pass a stopgap spending bill Saturday that did not include additional aid for the country.

Moscow is also likely to try to boost pro-Russian candidates in Europe, seeing potential fertile ground with recent results. A pro-Russian candidate won Slovakia’s parliamentary elections Sunday. In addition to national elections, Russia could seek to influence the European parliamentary vote next year, officials said.

Russia has long used its intelligence services to influence democratic politics around the world.

U.S. intelligence assessments in 2017 and 2021 concluded that Russia had tried to influence elections in favor of Donald Trump. In 2016, Russia hacked and leaked Democratic National Committee emails that hurt Hillary Rodham Clinton’s campaign and pushed divisive messages on social media. In 2020, Russia sought to spread information denigrating Joe Biden — but many Republicans in Congress argued Russia’s goal was to intensify political fights, not to support Trump.

For the 2024 presidential election, U.S. intelligence agencies believe the stakes for Putin are even higher.

Biden has sent billions of dollars of aid to Ukraine and pledged that the United States and its allies would support the country for “as long as it takes.” Trump, far ahead in the polls for the Republican nomination, has said supporting Ukraine is not a vital U.S. interest.

Russia, according to U.S. officials, is constantly running information operations aimed at denigrating NATO and U.S. policies and is likely to ramp up efforts in the months to come. The U.S. officials spoke on the condition their names not be reported so they could discuss sensitive intelligence.

The ultimate goal of Russia would be to help undermine candidates who support Ukraine and to change U.S. policy. Some U.S. officials doubt Russia would be able to do that.

But even if Moscow cannot influence the final election result, Russians may believe they can stir up enough debate over Ukraine aid that a future Congress could find it more difficult to pass additional support, U.S. officials said.

Beth Sanner, a former senior intelligence official, says artificial intelligence and other new technologies will change how Russia conducts influence campaigns. Russia is also likely to conduct influence laundering efforts, sending messages to the American public through allies inside nominally independent organizations, according to a recent declassified analysis.

“Russia will not give up on disinformation campaigns,” Sanner said. “But we don’t know what it is going to look like. We should assume the Russians are getting smarter.”

It is easy to overstate Russia’s ability to influence U.S. politics. Some American officials and social media executives have questioned how effective Russia’s troll farms and influence operations were in 2016, as opposed to hack and dump operations targeting Clinton’s emails.

And the media landscape has shifted dramatically since then. U.S. and European consumers are more skeptical of what they see on social media. Russian state television, a source of Kremlin narratives, has been pushed off Google’s YouTube. Meta, the parent company of Facebook, has bolstered its search for disinformation and de-emphasized news on its platforms.

But for every development making life harder for Russia’s online trolls, there are trends pushing in the opposite direction. The X platform, formerly known as Twitter, has dismantled teams that were hunting for election interference efforts. And the most influential platform among young people is now TikTok, a Chinese company. China has been stepping up its own influence operations, modeled after Moscow’s operations.

U.S. intelligence agencies have warned that several countries are seeking to influence American politics. In 2020, intelligence agencies outlined an Iranian scheme to influence voting in Florida. Cuba also conducted low-level intelligence operations, and Venezuela had the intent, but not the capabilities, to influence the vote.

But Russia is better than any other country at combining state media, private troll farms and intelligence service operations to attack in the digital space, U.S. officials said.

And it has continued to refine its efforts. Many of the disinformation experts who once worked for the Internet Research Agency, the Russian troll farm active in American elections in 2016 and 2018, have migrated to new firms or joined Russian military intelligence. And the internet, one U.S. official said, is the one place Russia will never run out of ammunition.

Shifting the debate in Europe and America is so important to Putin that if those influence operations fail to gain traction, Russia could decide to escalate.

U.S. officials say that escalation could include additional financial support for pro-Russian political parties in Europe or even covert operations in Europe aimed at weakening support for the war in Ukraine.

As a result, underestimating Russia’s ability to conduct influence operations would be a mistake, U.S. officials said.

Russian disinformation that falsely claimed America had bioweapons labs in Ukraine continues to reverberate around the world, for example.

Russia used the accusations to justify its invasion of Ukraine and has repeatedly requested United Nations’ investigations of its false claims. But far-right groups, including QAnon, have picked up, expanded and amplified the Russian bioweapons accusations.

In a world divided by polarized politics, conspiracy theories and disinformation have proved more resilient than ever.

Supreme Court Weighs Fate of Consumer Agency That Vexes Banks, Riles GOP

Bloomberg

Supreme Court Weighs Fate of Consumer Agency That Vexes Banks, Riles GOP

Greg Stohr – October 2, 2023

Thirteen years after a Democratic-controlled Congress created the CFPB to regulate mortgages and other consumer-finance products, the high court on Tuesday will weigh a novel constitutional argument that the bureau’s supporters say could leave it decimated.

The clash will shape the future of an agency that critics see as the ultimate symbol of an unaccountable and overreaching federal bureaucracy – but that backers including President Joe Biden’s administration say has provided crucial safeguards and an independent check against corporate power in the years since the 2008 financial crisis.

“The CFPB is under attack because it’s good at what it does,” Senator Elizabeth Warren, the Massachusetts Democrat who spearheaded the bureau’s creation, said last week.

The justices, who open their new term Monday, are reviewing a ruling that said the agency’s funding system violates a constitutional provision requiring a congressional appropriation for government spending. The CFPB isn’t subject to the year-to-year congressional appropriation process and instead draws as much money as it needs – up to a cap it has never hit – from the Federal Reserve. In fiscal 2022, the agency received $641.5 million in funding, short of its $734 million cap.

“It’s not about the merits of CFPB,” said Michael Pepson, a lawyer with the conservative Americans for Prosperity Foundation. “It’s about ensuring that Congress doesn’t shirk its duties by passing off its exclusive funding authority to unelected officials.”

The case comes at a time when the CFPB under Biden-appointed Director Rohit Chopra is taking an especially aggressive tack. The agency has sought to stamp out abuses in the mortgage-lending market, scrutinize the use of artificial intelligence in credit underwriting and rein in so-called junk fees, a catch-all term that include charges for bounced checks and late credit-card payments.

The bureau last year reached a $3.7 billion settlement with Wells Fargo & Co. to resolve allegations that it mistreated its customers for years by illegally repossessing cars, bungling record-keeping on payments and improperly charging fees and interest. Beyond banks, the CFPB under Biden has sought to probe “buy-now-pay-later” firms and penalize student lending servicers and credit reporting agencies.

Since the CFPB was created in 2010, its enforcement actions have returned $20.2 billion in compensation, principal reductions, canceled debts, and other relief to consumers, agency spokesperson Samuel Gilford said.

The activity is only fueling longstanding Republican complaints that the agency is too powerful. At a hearing in June, GOP Representative Andy Ogles of Tennessee told Chopra the bureau “should die a painful death.”

Mortgage Worries

Although the high court case centers on a never-enforced payday-lending rule, the impact is potentially far broader. In urging the justices to take up the case, the bureau said the ruling from the 5th US Circuit Court of Appeals cast a legal cloud over every action the agency has taken since its creation, providing an argument for re-opening even long-finalized rules and enforcement cases.

That’s a worry shared in part by the mortgage-banking industry, which filed a brief urging the court to limit any ruling against the CFPB. The bureau has issued dozens of rules affecting consumer mortgages and the industry has invested billions of dollars toward compliance, according to three trade groups led by the Mortgage Bankers Association.

A decision calling those rules into question “could set off a wave of challenges and the housing market could descend into chaos, to the detriment of all mortgage borrowers,” the groups argued.

The payday-lending trade group pressing the challenge, the Community Financial Services Association, calls those concerns overblown. Judges have a variety of tools to prevent disruption of the mortgage market, including the six-year statute of limitations that applies to CFPB rules, the group says.

“Lacking any viable legal argument, the bureau resorts to fear-mongering about significant disruption if all the CFPB’s past actions are vacated,” the trade group argued. “But the bureau grossly exaggerates the effects and implications of setting aside this rule.”

Delay Suggested

At a minimum, a decision striking down the payday-lending rule could provide a potent new argument for companies currently battling the CFPB, according to Bloomberg Intelligence analyst Elliot Stein. Navient Corp., which is fighting a complaint over its student-loan servicing practices, could have an especially strong case because it has already raised the issue in its defense, Stein said.

Some industry groups – including the US Chamber of Commerce and the American Bankers Association – have suggested the court could take the unusual step of ruling against the agency but delaying the decision’s effective date to give Congress time to set up a different funding system.

The 5th Circuit ruling marked the first time a federal appeals court had ever used the appropriations clause to strike down part of a federal statute. The Supreme Court has never interpreted the clause as a check on Congress, so far invoking it only as a limitation on the executive branch.

The case is part of a Supreme Court term that could put new constraints on federal administrative agencies. The justices are also considering restricting the use of in-house judges to handle cases at the Securities and Exchange Commission. And the court has agreed to revisit an important 1984 ruling that gives agencies latitude in interpreting ambiguous federal statutes.

The Supreme Court in 2020 gave the president broad power to fire the CFPB’s director, striking down job protections Congress had enacted. At the same time, the court stopped short of abolishing the agency altogether, as critics had sought.

The case is Consumer Financial Protection Bureau v. Community Financial Services Association, 22-448.

With assistance from Katanga Johnson.

Democrats tried to protect the CFPB from politics. The Supreme Court may blow up that plan.

Politico

Democrats tried to protect the CFPB from politics. The Supreme Court may blow up that plan.

Katy O’Donnell – October 2, 2023

Democrats who created the Consumer Financial Protection Bureau a decade ago thought they could shield the agency from political pressure by funding it through the Federal Reserve instead of Congress.

That decision, which drew condemnation from GOP lawmakers and has helped make the regulator a lightning rod for attacks ever since, is facing its biggest test Tuesday when the Supreme Court hears arguments on its constitutionality.

The case is highly anticipated since it could not only result in curbing the agency’s power and throwing its rules into question but potentially affect other regulators throughout the government — including the Fed and the FDIC — that are also not funded by annual congressional spending bills.

“The CFPB has returned $17 billion directly to Americans cheated by financial institutions,” Sen. Elizabeth Warren (D-Mass.) told POLITICO. “If the Supreme Court disregards over a century of legal precedent, it risks undermining banking regulators safeguarding our economy, as well as Social Security and Medicare.”

Warren, who is credited with conceiving the agency that was created in the wake of the 2008 financial crisis before she became a senator, said the CFPB’s political independence was critical to its formation. Republicans and financial industry critics, many of whom have opposed the bureau since its inception, argue that the funding scheme allows the agency to escape accountability.

Many Democrats see the case as part of a broad-based attack on the regulatory state by Republicans eager to bring challenges before the Supreme Court, whose conservative majority has proved willing to curtail the power of agencies.

In a 2022 ruling limiting the Environmental Protection Agency’s authority to regulate greenhouse gases, the high court’s six GOP-appointed justices invoked the so-called major questions doctrine, saying that agencies like the EPA need congressional approval before “asserting highly consequential power.” The court has also taken up a case this term challenging the constitutionality of the Securities and Exchange Commission’s in-house enforcement proceedings.

The CFPB was created by the Dodd-Frank Act, the landmark 2010 law that rewrote the rules of finance. The funding mechanism set up by Obama-era Democrats allows the bureau to request the amount of money it needs each year from the Fed, which, in turn, is funded by fees it levies on financial institutions and interest on the securities it holds. The CFPB automatically receives the requested amount, subject to a cap set by Congress.

Among the options the Supreme Court has when it makes its ruling, probably next year, is kicking the matter back to Congress to overhaul the way the bureau is financed — a move that would open the door for other reforms to the agency in an election year.

The case was brought by small-dollar lenders challenging a 2017 CFPB rule restricting their activity. An appellate court ruled last year that the current funding system violates the Constitution’s separation of powers doctrine.

The court scrapped the 2017 rule on the grounds that the CFPB was unconstitutionally funded when it adopted the regulation. The ruling held that the agency’s self-determined budget drawn from an agency that is itself not funded by appropriations marked a “double insulation from Congress’ purse strings,” a unique setup even among financial regulators.

The government maintains that Congress’s decision to authorize the Fed to fund the agency up to a fixed level amounts to “a standing, capped lump-sum appropriation,” as Solicitor General Elizabeth Prelogar wrote in an August brief.

Counsel for the payday lender groups, meanwhile, argued that “Congress does not possess unfettered discretion to authorize executive spending, let alone the power to cede virtually unfettered discretion to an agency to determine the size of its own purse in perpetuity,” in their brief to the high court.

If the Supreme Court does decide the funding stream is unconstitutional, the government is urging the justices to “sever” the funding provision from the rest of the law that created the agency.

“A decision invalidating the CFPB’s past actions would be deeply destabilizing” and “threaten profound disruption for consumers, regulated businesses, and the nation’s financial markets,” Prelogar said in the brief.

Housing industry representatives have also called on the high court to preserve existing CFPB regulations. They warned of “potentially catastrophic consequences that a decision drawing those rules into doubt could have on the mortgage and real-estate markets,” in an amicus brief submitted by three of the industry’s most powerful trade groups.

The Chamber of Commerce and nine other industry groups, meanwhile, urged the court to “avoid disruptions in consumer financial markets” in their own amicus brief. But the groups, which include the major banking trades, also stated that they “believe they are entitled to” the invalidation of CFPB actions they have challenged in pending lawsuits related to the agency’s funding mechanism. They also said CFPB “enforcement actions should be paused” until Congress resolves its funding.

Court watchers say wholesale invalidation of past CFPB actions is a remote possibility.

“Nobody wants a remedy where they throw every regulation out the window, and I doubt very much if they would do that,” said Alan Kaplinsky, former chair of the consumer financial services group at Ballard Spahr. “If they get to the point where they’ve got to decide the remedy, I think the conservatives and the liberals on that court would prefer to kick the ball over to Congress and let them try to deal with that.”’

The Supreme Court has already ruled that “the Dodd-Frank Act contains an express severability clause” in a 2020 decision holding that another part of the CFPB’s structure, a single director who could only be fired for cause, violated the separation of powers. While that decision eroded some of the bureau’s political insulation, separating out the removal clause from the rest of the law preserved the agency.

Both bureau backers and critics say a key question is whether a ruling against the agency could apply only to the CFPB and not to other regulators with independent funding.

“I think philosophically there are going to be five to six votes that probably would like to decide against the CFPB,” Kaplinsky said. “What they’re not going to want to do is decide the case and in doing that put a big cloud over the constitutionality of the Fed, FDIC and [the Office of the Comptroller of the Currency] — that would be a horrendous result. I don’t think any of them would want that, it would create economic chaos.”