Tag: Donald Trump

Actual Malice in the Age of #fakenews

Public figures are fighting back against fake news.

In the most recent headline from the world of celebrity defamation cases, E. Jean Carroll is suing former President Trump for statements he made after she accused him of sexual assault. In a 2019 book and excerpt in New York magazine, Carroll, a longtime advice columnist for Elle magazine, accused Trump of sexual assault in the mid-1990s. Trump responded that Carroll was “totally lying” and not his “type.” Carroll sued Trump for defamation, claiming his statements had harmed her reputation. But Carroll—like all public figure defamation plaintiffs—has an uphill battle before her. To succeed, Carroll will have to prove that Trump’s statements were false, and—because Carroll is a public figure—she will also have to show that Trump acted with “actual malice.” The actual malice standard often proves to be too high a threshold for most public figures to cross, and most cases are lost on that prong—regardless of whether the statement was false. In fact, Johnny Depp was one of the few public figures in recent years to win a defamation suit.

So, what would it mean if the actual malice requirement was rescinded?

The seminal decision in New York Times Company v. Sullivan and its progeny are the backbone of defamation law in this country. These cases hold that public officials and public figures claiming defamation must prove that the allegedly defamatory statement was made, “with knowledge that it was false or with reckless disregard of whether it was false or not.” In other words, with “actual malice.” On the other hand, a private figure, or one who has not sought out the limelight, need only show the false statement was made negligently. Prior to Sullivan, all plaintiffs fell under the negligence standard.

Public figures who must meet this “actual malice” standard fall into two categories: (1) all-purpose public figures, with “pervasive fame or notoriety,” like Johnny Depp; and (2) limited-purpose public figures, like Carroll, who, in the words of Gertz v. Robert Welch, Inc., achieve their status by “thrust[ing] themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved.” The Court rationalized that both categories of public figures have “invite[d] attention and comment.” Moreover, because “public figures enjoy “greater access to the channels of effective communication” than private individuals, they are better able to “contradict the lie or correct the error.”

In today’s age of social media, do these justifications still hold true? When Sullivan and its progeny came down, there was a clear delineation between public and private figures. Typically, public figures had media access, and private figures did not. Today’s social media landscape muddles that line. We are all just one post, tweet, or TikTok away from becoming public figures.

In 2019, in a case strikingly similar to Carroll’s, the Supreme Court declined to review a defamation case filed by Kathrine McKee against Bill Cosby. In 2014, McKee publicly accused Cosby of forcibly raping her 40 years earlier. In response, Cosby’s attorney authored and subsequently leaked an allegedly defamatory letter. Excerpts of the letter were disseminated via the Internet and published by news outlets around the world. McKee argued that the letter deliberately distorted her personal background to “damage her reputation for truthfulness and honesty, and further to embarrass, harass, humiliate, intimidate, and shame” her. Applying Sullivan and its progeny, the Court concluded because McKee had “‘thrust’ herself to the ‘forefront’” of the public controversy over “sexual assault allegations implicating Cosby,” she was a “limited-purpose public figure” who needed to show actual malice—regardless of whether the statements about her were false.

In a lone dissent, Justice Clarence Thomas noted that “in an appropriate case, [the Court] should reconsider the precedents” requiring public figures to satisfy an actual-malice standard. Justice Thomas later double-downed on his proffer in his dissents in Berisha v. Lawson, and most recently in Coral Ridge Ministries Media, Inc. v. Southern Poverty Law Center. In Berisha, pointing to the shift in the media landscape since Sullivan, Justice Neil Gorsuch joined Justice Thomas in calling to review the Sullivan decision, noting our new media world “facilitates the spread of disinformation.”

According to these Justices, in recent years Sullivan has become less of a shield and more of a sword. The “actual malice” standard allows spreaders of conspiracy theories, false accusations, and fake news to be virtually untouchable. In an era where misinformation spreads like wildfire, has the actual malice standard allowed journalists to become sloppy and irresponsible? Under this legal standard a journalist is better off printing a story without fact-checking. In fact, failing to thoroughly investigate, standing alone, does not prove actual malice. If the Court abolished that standard, public figures would be like every other defamation plaintiff and would only need to show that the false statement was made carelessly. In other words, instead of the defendant knowingly printing misinformation, a plaintiff would only need to show that the defendant didn’t bother checking if the information was true or false before making it.

Under this precedent, for years reporters, and individuals alike have been shielded from consequences of publishing falsehoods about public figures. Removing the “actual malice” standard would have sweeping effects on journalists and news platforms, and would make reputable news organizations more vulnerable to attack and open to further scrutiny. But responsible journalists would still remain protected. Truth remains an absolute defense to a defamation claim.

Between 2018 and 2020 the number of defamation suits filed increased by 30%. With “fake news” on the rise, more individuals falling into the “public figure” category, and technology moving at warp speed, the Court may have no choice but to rethink Sullivan. While it is unlikely that that 50 years of settled precedent would be overturned, Sullivan just might, at the very least, be revisited.

Article By Melissa Sarsten Polito of Epstein Becker & Green, P.C.

For more litigation and legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

CEQ Reverses First Set of Trump-Era NEPA Regulatory Reforms

On April 20, 2022, the White House Council on Environmental Quality (CEQ) published a final rule rolling back minor regulatory changes to the National Environmental Policy Act (NEPA) review process that it had promulgated in 2020. The new rule reverts to the language of CEQ’s original 1978 NEPA regulations but otherwise does not substantially alter the regulatory landscape. This is the first of an anticipated two-step process as identified in CEQ’s October proposed rule. The next regulatory proposal is expected to “more broadly revisit” the 2020 regulations and propose further changes to promote environmental justice, climate change, and other Biden administration “objectives.”

The Phase 1 final rule attracted significant public comment and media coverage, but in practice, it should not meaningfully affect NEPA reviews. The regulatory changes themselves are very confined. The final rule features three main components:

Purpose & Need/Alternatives

NEPA reviews of proposed federal agency actions begin by defining a statement of purpose and need and identifying a reasonable range of alternatives. In doing so, agencies routinely give substantial weight to the project proponent’s objectives, rather than reinventing what is proposed. The 2020 rule had codified that longstanding policy by adding language expressly directing federal agencies to consider their statutory authority and the goals of the project proponent when formulating statements of purpose and need and identifying a reasonable range of alternatives that could meet the purpose and need. The new final rule deletes reference to the applicant’s goals to avoid perceived “bias” and restore “flexibility.” Yet, the final rule does not prohibit agencies from considering the applicant’s goals, and instead recognizes they remain “important.” The final rule also retains the fundamental NEPA concept that a “reasonable” alternative must “meet the purpose and need for the proposed action.”

Individual Agency NEPA Regulations

While CEQ’s regulations apply across the federal government, individual federal departments and agencies also have their own rules and procedures for implementing NEPA specific to the particular types of actions they typically undertake. CEQ oversees these agency efforts. To promote consistency in agency NEPA reviews, including those involving multiple agencies, the 2020 rule sought to restrict agencies from adopting requirements stricter than CEQ’s rules. The new Phase I rule removes this ceiling. To be clear, this change does not allow agency-specific NEPA rules and procedures to conflict with CEQ’s regulations, but it does increase the potential for inconsistencies in the application of NEPA procedures across federal agencies. That said, many federal agencies developed their own NEPA regulations and procedures years ago, did not amend those regulations and procedures in response to the 2020 rule, and are not expected to substantially alter their procedures at least while CEQ is still developing its future Phase 2 rule.

Effects

The 2020 rule simplified the regulatory definition of “effects” or “impacts” of the proposed action and alternatives to eliminate separate terms for “direct,” “indirect,” and “cumulative” effects, and to clarify which effects are “reasonably foreseeable.” It specifically provided that a “but for” causal relationship is insufficient to attribute an effect to a proposed project, while excluding potential effects from analysis “if they are remote in time, geographically remote, or the product of a lengthy causal chain” or if they are beyond the agency’s control. But the 2020 rule did not preclude consideration of cumulative impacts or climate change and allowed for their incorporation as part of the baseline for the “no action” alternative. The new Phase 1 rule simply reverses those minor changes including restoring the separate “effects” definitions. This reversion may foster more expansive indirect and cumulative impacts analysis in NEPA documents akin to the analyses developed before the 2020 rule. However, particularly because the 2020 rule did not overrule case law overwhelmingly requiring consideration of cumulative impacts and climate change, the practical implication of these changes should be minimal.

© 2022 Beveridge & Diamond PC
For more regulatory updates, visit the NLR Administrative & Regulatory section.

Reactions to the U.S. Supreme Court’s Rulings in Trump v. Vance & Trump v. Mazars

In Trump v. Vance and Trump v. Mazars the Supreme Court issued opinions in two cases concerning the release of President Trump’s financial records.  Reactions to the July 9th rulings have varied, with opinions differing on whether or not Trump’s reputation and presidency will be significantly impacted by what his financial records may reveal.

Below, we outline the details of each case and the reactions to the Supreme Court’s decisions.

Background Trump v. Vance

In Trump v. Vance, the court stated that Trump had no absolute right to block the Manhattan District attorney’s access to Trump’s financial records for the purposes of a grand jury investigation. The court held in a 7-2 decision that “Article II and the Supremacy Clause do not categorically preclude, or require a heightened standard for, the issuance of a state criminal subpoena to a sitting President.” The court’s opinion was written by Chief Justice John Roberts for the majority including Justices Ginsburg, Breyer, Sotomayor and Kagan with Justice Kavanaugh filing a concurring opinion joined by Justice Gorsuch, and Justice Thomas and Justice Alito writing separate dissenting opinions.

Trump v. Vance involves a state criminal grand jury subpoena not served on President Trump, but on two banks and an accounting firm that were custodians of the records. The subpoenaed records are for eight years of Trump’s personal and business tax returns and other banking documents in the years leading up to the 2016 election served on behalf of New York District Attorney Cyrus Vance., Jr. Vance’s investigation centered around payments made to two women — Karen McDougal and Stormy Daniels — who alleged they had affairs with Trump before he entered office.

The Supreme Court considered state criminal subpoenas could threaten “the independence and effectiveness” of the president as well as undermining the president’s leadership and reputation, weighing Trump’s circumstances against those in Clinton v. Jones, the 1997 case where President Bill Clinton sought to have a civil suit filed against him by Paula Corbin Jones dismissed on the grounds of presidential immunity, and that the case would be a distraction to his presidency.

Trump argued that the burden state criminal subpoenas would put on his presidency would be even greater than in Clinton because “criminal litigation poses unique burdens on the President’s time and will generate a considerable if not overwhelming degree of mental preoccupation” and would make him a target for harassment.

The Court addressed Trump’s argument, stating that they “rejected a nearly identical argument in Clinton, concluding that the risk posed by harassing civil litigation was not ‘serious’ because federal courts have the tools to deter and dismiss vexatious lawsuits. Harassing state criminal subpoenas could, under certain circumstances, threaten the independence or effectiveness of the Executive. But here again the law already seeks to protect against such abuse … Grand juries are prohibited from engaging in ‘arbitrary fishing expeditions’ or initiating investigations ‘out of malice or an intent to harass.’”

The Court also considered that Vance is a case addressing state law issues where Clinton was a case addressing federal law issues. Trump argued that the Supremacy Clause gives a sitting president absolute immunity from state criminal proceedings because compliance with subpoenas would impair his performance of his Article II functions. Arguing on behalf of the United States, the Solicitor General claimed state grand jury subpoenas should fulfill a higher need standard.  In response, the Court ruled, “A state grand jury subpoena seeking a President’s private papers need not satisfy a heightened need standard … there has been no showing here that heightened protection against state subpoenas is necessary for the Executive to fulfill his Article II functions.”

Notably, the Supreme Court decision does not allow for public access to Trump’s tax returns; they will be part of a Grand Jury investigation, which is confidential.  However, many took away the message that the majority’s decision–bolstered by Gorsuch and Kavanaugh, Trump appointees, who concurred–that the law applies to everyone.

Reactions to SCOTUS Decision from Jay Sekulow and Cyrus Vance, Jr.

Both Vance and Trump’s attorney Jay Sekulow expressed they were content with the Court’s ruling, albeit for different reasons.

“We are pleased that in the decisions issued today, the Supreme Court has temporarily blocked both Congress and New York prosecutors from obtaining the President’s financial records. We will now proceed to raise additional Constitutional and legal issues in the lower courts,” Sekulow tweeted.

“This is a tremendous victory for our nation’s system of justice and its founding principle that no one – not even a president – is above the law. Our investigation, which was delayed for almost a year by this lawsuit, will resume, guided as always by the grand jury’s solemn obligation to follow the law and the facts, wherever they may lead,” Vance said in a statement.

Other Reactions to the Supreme Court’s Trump v. Vance Ruling

Following the Supreme Court’s arguments in Vance, lawyers and legal scholars commented about what the decision could mean for the presidency.

In a C-SPAN interview with National Constitution Center President and CEO Jeffrey Rosen, Columbia Law School Professor Gillian Metzger spoke about the issue of burden on the president in Vance, “A lot of what is being shown in these cases is who bears the burden when. Clinton v. Jones said that first, you have to show the burden on the presidency…already the Solicitor General is trying to move us beyond where we had been in Clinton vs. Jones. Among the justices on the court, my sense is that they are really trying to figure out what the standards should be…I didn’t get the sense of a stark ideological divide on this.”

In agreement with seeing the ruling as a victory for the rule of law, David Cole, the ACLU National Legal Director said: “The Supreme Court today confirmed that the president is not above the law. The court ruled that President Trump must follow the law, like the rest of us. And that includes responding to subpoenas for his tax records.”

Harvard Law professor Laurence Tribe, a frequent Trump critic, highlighted the victory on Twitter, saying: “No absolute immunity from state and local grand jury subpoenas for Trump’s financial records to investigate his crimes as a private citizen. Being president doesn’t confer the kind of categorical shield Trump claimed.”

Of a practical matter, though, Mark Zaid, the Washington attorney who represented the whistleblower who set the stage for Trump’s impeachment proceedings, tweeted:

 

“Even if Trump’s tax returns reveal fraud, I find it doubtful that this fact would finally be straw that broke his supporters’ back on election day.  But importance of ruling is that criminal investigation continues & will exist past expiration of Trump’s presidential immunity.” (Should we embed the tweet?)

Background for the Supreme Court’s Ruling in Trump v. Mazars

The Supreme Court remanded back to the lower courts the second case, Trump v. Mazars in a 7-2 decision. The Mazars case involved three committees of the U. S. House of Representatives attempting to secure Trump’s financial documents, and the financial documents of his children and affiliated businesses for investigative purposes. Each of the committees sought overlapping sets of financial documents, supplying different justifications for the requests, explaining that the information would help guide legislative reform in areas ranging from money laundering and terrorism to foreign involvement in U. S. elections.

Additionally, the President in his personal capacity, along with his children and affiliated businesses—contested subpoenas issued by the House Financial Services and Intelligence Committees in the Southern District of New York.  Trump and the other petitioners argued in the United States Court of Appeals for the Second Circuit that the subpoenas violated separation of powers. The President did not, however, argue that any of the requested records were protected by executive privilege.  Justice Roberts wrote the majority opinion, with Thomas and Alito filing dissenting opinions.

In Mazars, the District Court for the District of Columbia upheld the Congressional subpoenas, indicating the investigations served a “legislative purpose” as they could provide insight on reforming presidential candidate’s financial disclosure requirements.  However, Roberts writes: “the courts below did not take adequate account of the significant separation of powers concerns implicated by congressional subpoenas for the President’s information.”

In the opinion, Roberts sets out a list of items the lower courts need to consider involving Congress’s powers of investigation and subpoena, noting that previously these disagreements had been settled via arbitration, and not litigation.  Additionally, Roberts summarizes the argument before the court, drawing on the Watergate era Senate Select Committee D. C. Circuit  made by the President and the Solicitor General, saying the House must demonstrate the information sought is “demonstrably critical” to its legislative purpose did not apply here.  Roberts, stated that this standard applies to Executive privilege, which, while crucial, does not extend to “nonprivileged, private information.”  He writes: “We decline to transplant that protection root and branch to cases involving nonprivileged, private information, which by definition does not implicate sensitive Executive Branch deliberations.”

However, Roberts detailed that earlier legal analysis ignored the “significant separation of powers issues raised by congressional subpoenas” and that congressional subpoenas “for the President’s information unavoidably pit the political branches against one another.” With these constraints in mind, Roberts charged the lower court to consider the following in regards to congressional investigations and subpoenas:

  1. Does the legislative purpose warrant the involvement of the President and his papers?
  2. Is the subpoena appropriately narrow to accomplish the congressional objective?
  3. Does the evidence requested by Congress in the subpoena further a valid legislative aim?
  4. Is the burden on the president justified?

Reactions to Trump v. Mazars

Nikolas Bowie, an assistant Harvard Law Professor, turning to Robert’s analysis in the opinion on Congressional investigations opinion discussing Congressional investigations indicated the decision “introduces new limits on Congress’s power to obtain the information that it needs to legislate effectively on behalf of the American people . . . the Supreme Court authorized federal courts to block future subpoenas using a balancing test that weighs ‘the asserted legislative purpose’ of the subpoenas against amorphous burdens they might impose on the President.”

Additionally, Bowie points out, “it seems unlikely that the American people will see the information Congress requested until after the November election.”

Writing for the nonprofit public policy organization, The Brookings Institution, Richard Lempert, Eric Stein Distinguished University Professor of Law and Sociology Emeritus at the University of Michigan, concurs with Bowie’s point, writing that the Mazars decision may set a new standard for Congressional subpoenas moving forward:

“The genius of Robert’s opinion in Mazars is that while endorsing the longstanding precedent that congressional subpoenas must have a legislative purpose and without repudiating the notion that courts should not render judgments based on motives they impute to Congress, the opinion lays down principles which form a more or less objective test for determining whether material Congress seeks from a president is essential to a legislative task Congress is engaged in … Congress should be able to spell out in a subpoena why it needs the documents it seeks.”

Looking Ahead to What’s Next

There is a lot of information in these decisions to unpack, especially in relation to Congressional investigations and subpoenas.  Additionally, questions remain on how the lower courts may interpret Roberts’ directive to examine “congressional legislative purpose and whether it rises to the step of involving the President’s documents” and how Congress will “assess the burdens imposed on the President by a subpoena.”

 

Copyright ©2020 National Law Forum, LLC

 

ARTICLE BY Rachel Popa, Eilene Spear and Jennifer Schaller at The National Law Review / The National Law Forum LLC.

White House Eliminates Top Cybersecurity Position

On May 15, the White House announced that it was eliminating the position of Cybersecurity Coordinator at the National Security Council, the highest position at the White House devoted to Cybersecurity. While not unexpected, this move is significant.

Symbolically, eliminating this senior position arguably send a signal that this Administration is less focused on cybersecurity as a priority.

Functionally, it means there will be no single person in the White House accountable to the President and the National Security Advisor on cyber issues.

Administratively, and perhaps most significantly, the White House’s ability to coordinate cybersecurity among the agencies, arbitrate disputes, and set direction for policy initiatives government-wide will likely be degraded.

While the White House is explaining the move by saying it will streamline management, increase efficiency, reduce bureaucracy and raise accountability, in the short run at least it seems likely to sow some confusion and increase the criticism of federal cybersecurity policy that has already gone on for several years.

Putting it Into Practice: Any hopes companies harbored for increased clarity and leadership from the Administration on cybersecurity seem to be fading. Companies will have to spend more time monitoring the cybersecurity initiatives and requirements of individual agencies, which will likely become less coordinated going forward.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

Why does it Matter if the NRA Used Russian Money to help Donald Trump’s Election?

The old saying goes, that “when you have a hammer, everything looks like a nail.” And as a campaign finance lawyer, I have to remind myself that not every story is a money in politics story. But the more I look at the 2016 election and what transpired, campaign finance is at the heart of the scandal.

To wit, this January, McClatchy reported that the FBI is allegedly investigating whether a Russian banker named Aleksander Torshin (who’s also wanted on criminal charges in Spain for unrelated matters) may have funneled money into the National Rifle Association (NRA) for the benefit of the candidacy of Donald Trump in 2016. At this point, all this is just a press report. We don’t have confirmation of this investigation.

In March, Politico reported that the Federal Election Commission (FEC) is investigating whether there really was any Russian money running through the NRA in the 2016 presidential election. This comes on the heels of Oregon Democratic Senator Ron Wyden asking similar questions to the NRA.

Illegal Political Sources

But why would this be so significant if the story of rubles flowing through the NRA is correct? For one, such spending by a foreigner in an American election is totally illegal under American law. Indeed foreign electoral spending has been barred since 1966 amendments to the Foreign Agents Registration Act (FARA). And with a Special Counsel actively indicting people for their roles in the 2016 election, this could become part of that criminal probe.

We Were Warned

Second, if the NRA-Russia-Trump nexus is borne out by the facts, then it will vindicate warnings from Supreme Court Justices and campaign finance reformers who said inviting secretive corporate money into our politics would provide cover for illegal foreign spending in American elections.

This caution was part of Justice John Paul Stevens’ dissent in Citizens United. He was leery of the possibility that inviting corporations into U.S. elections could invite foreign influence. As he wrote, “[u]nlike voters in U.S. elections, corporations may be foreign controlled.” He also noted the absurdity of giving equal protection to foreign speakers in this context: it would be like “accord[ing] the propaganda broadcasts to our troops by ‘Tokyo Rose’ during World War II the same protection as speech by Allied commanders.”

This warning that dark money could hide foreign money was particularly pronounced from transparency advocates among campaign finance reformers. In 2016, the FEC tried to promulgate new rules to clarify reporting requirements. But the FEC deadlocked and no new rules were finalized.

Without Clear Transparency Rules Dark Money Flourished

In the absence of new clear rules from the FEC, or Congress for that matter, dark money has increased. As I described in the law review article Dark Money As a Political Sovereignty Problem, since 2010, over $800 million in “dark money” has been spent in federal elections. Because of the dark money problem, often we don’t know what we don’t know about corporate money in politics—including whether it is from an illegal foreign source.

There is a data chart showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

The growth of dark money is often blamed on the Supreme Court’s 2010 decision, Citizens United v. FEC. Paradoxically, Citizens United upheld the constitutionality of disclosure of the underlying sources of money in politics by a vote of 8 to 1. But regulators did not take up the Supreme Court’s open invitation to improve disclosure laws after Citizens United, thereby allowing dark money to metastasize like a cancer on our democracy.

How Dark Money Gets Dark

Here’s how dark political money works. Say you have a company that wants to exercise its Citizens United rights, but it doesn’t want to tell the public. That company gives the money to a politically active 501(c)(4) social welfare organization or 501(c)(6) trade association. Then that nonprofit buys political ads in a federal election. The FEC doesn’t require the nonprofit to reveal where it got the money. Even if the company is publicly traded, there is no SEC rule that requires the company to tell investors that they are spending money in politics. For even more secrecy, money can also be routed through a shell corporation like an LLC to make tracing the money even more difficult.

The Allegation

The reporting by McClatchy (and others) alleges that NRA’s Institute for Legislative Action (ILA), a 501(c)(4) arm of the NRA, that does not disclose its donors, received money from the Russian banker Torshin. We don’t know if that happened.

We do know how the NRA spent its money. In 2016, the NRA expended $54,398,558 in outside political spending. The NRA spent $31 million of that money to support Mr. Trump’s candidacy. According to Open Secrets.org, showing $183.8 million in dark money in 2016; $177.7 million in dark money in 2014; $308.6 million in dark money in 2012 and $135.6 million in dark money in 2010.

It is outlandish to think that the NRA would wittingly or unwittingly violate American campaign finance law? At this point we don’t know if they have done anything wrong. However, the NRA has a long history of fighting campaign finance regulations. In 2010 when the Congress was on the verge of passing the DISCLOSE Act which would have brought transparency to money in politics post-Citizens United, lobbyists for the NRA got a legislative carve out so that new disclosure would not apply to them.

The NRA was also center stage in litigation against the last big federal campaign law, the Bipartisan Campaign Reform Act (better known as BRCA or McCain-Feingold). In 2002, the NRA and one its PACs, National Rifle Association Political Victory Fund were plaintiffs challenging the constitutionality of BRCA. This case was consolidated into the case that became McConnell v. FEC, a case that ended up upholding the constitutionality of BRCA, including its campaign finance disclosure requirements. Moreover, in 2001 the NRA was held liable for campaign finance violations from the 1978 and 1982 elections.

Conclusion

Like so many aspects of the multiple investigations into what really happened in the 2016 election, the public has no idea what will ultimately be revealed. Reading the news has become like a live action spy novel. It is possible further investigation will only exonerate the NRA and the Russian banker. But one strain to keep an eye on is whether any foreign money helped elect a U.S. president. Did I mention that’s completely illegal?

 

© Copyright 2018 Brennan Center for Justice at New York University School of Law

White House Issues Presidential Proclamations Imposing Section 232 Tariffs on Steel and Aluminum Imports

President Trump, on March 8, 2018, issued two presidential proclamations imposing global tariffs of 25 percent on steel imports and 10 percent on aluminum imports in connection with the Section 232 investigations recently concluded by the Department of Commerce. The effective date of the tariffs for both Section 232 actions is March 23, 2018; their duration has not been specified at this time.

Steel

Product Scope

The presidential proclamation covers steel imports entered under HTSUS 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS classifications.

Remedy

This trade action imposes a 25 percent tariff on steel imports from all countries, with the exception of Canada and Mexico.

Aluminum

Product Scope

The presidential proclamation covers the following aluminum imports: (a) unwrought aluminum (HTS 7601); (b) aluminum bars, rods, and profiles (HTS 7604); (c) aluminum wire (HTS 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70), including any subsequent revisions to these HTS classifications.

Remedy

This trade action imposes a 10 percent tariff on aluminum imports from all countries, with the exception of Canada and Mexico.

Product Exclusions

There will also be a mechanism for U.S. parties to apply for the exclusion of specific products based on unmet demand or specific national security considerations. The Secretary of Commerce shall issue procedures for exclusion requests within 10 days of March 8, 2018.

Country Exclusions

Canada and Mexico will be temporarily exempt from these measures due to their security relationship with the United States. Other countries may be able to qualify for a modification or removal of the tariffs if they come up with “alternate ways to address the threatened impairment of national security caused by imports.” The United States Trade Representative will be responsible for negotiations regarding such alternative arrangements. According to a White House official, the tariff rate for other countries may increase if Canada and Mexico secure a permanent exemption.

 

©2018 Drinker Biddle & Reath LLP. All Rights Reserved
This post was written by Nate Bolin, Douglas J. Heffner and Richard P. Ferrin of Drinker Biddle.
Check out the National Law Review’s Global Page for more insights.

Kushner’s Bad Week: Losing Clearance, Suspicious Business Activities, and the Looming Russia Investigation

This week at the Trump White House was a cornucopia of news developments including a gun control meeting that quickly went off the rails, news of Trump confidant and stalwart Hope Hicks’s resignation, and Jared Kushner, First Son-in-Law, being stripped of his Security clearance for failure to complete paperwork in a timely manner, quickly followed by disturbing reports of Kushner’s business interests benefiting from his position in the White House and Kushner influence prompting possible backlash from the White House for parties who refused to support the Kushner Companies.

The Democratic National Committee says:

This week very clearly shows why Jared Kushner should lose his job at the White House. Kushner has never been qualified for his role . . . Kushner has repeatedly made critical omissions on his background check forms and has had to make dozens of revisions to his financial disclosure . . . multiple recent stories have further shown that the corruption Kushner brings to the White House is matched only by Trump himself …

Backing the DNC’s assertions, Kushner has amended and changed his financial filings on security documents 39 times, omitting significant financial disclosures.

Kushner’s Undisclosed Meetings with Foreign Nationals on Behalf of Kushner Cos.

 The Washington Post reported this week, that in December 2016, Kushner had meetings with the chairman of China’s Anbang insurance company, a Russian banker and a former prime minister of Qatar in the Kushner company’s efforts to get funding for the Kushner company’s $1.2 billion debt. The Washington Post revealed:

“Officials in at least four countries have privately discussed ways they can manipulate Jared Kushner, the president’s son-in-law and senior adviser, by taking advantage of his complex business arrangements, financial difficulties and lack of foreign policy experience, according to current and former U.S. officials familiar with intelligence reports on the matter.”

National Security advisor H.R. McMaster, later learned that Kushner’s contacts with foreign officials were not coordinated through the National Security Council nor did he officially report them.

NBC reported yesterday that special counsel Mueller is investigating if Kushner’s meetings with foreign officials during the presidential transition, impacted White House policy, specifically noting that the White House last year backed an economic blockade of Qatar in the weeks after Qatari officials declined to provide loans to the Kushner Companies.

SEC’s Decision to End an Investigation of Kushner Related to Apollo Loan

The AP is reporting on the SEC’s 2017 decision to end a Kushner Co. loan investigation. The SEC investigation was prompted after Apollo Global Management gave the Kushner Cos. a $180 million Real Estate loan.  Apollo’s loan to the Kushner Cos. followed several meetings at the White House with Jared Kushner and Apollo Global Management’s founder, reported by the New York Times this week.

Currently, there is no evidence that Kushner’s White House role or anyone else in the Trump administration played a role in the SEC’s decision to drop the Apollo inquiry.  ‘I suppose the best case for Kushner is that this looks absolutely terrible,’ said Rob Weissman, president of Public Citizen.

 ‘Without presuming that there is any kind of quid pro quo … there are a lot of ways that the fact of Apollo’s engagement with Kushner and the Kushner businesses in a public and private context might cast a shadow over what the SEC is doing and influence consciously or unconsciously how the agency acted.’

In its 2018 annual report, Apollo disclosed that the SEC had halted its inquiry into the firm’s financial reporting and how Apollo reported the results of its private equity funds.

New Revelations about Citibank Loan to Kushner Co. after White House Visit

Shortly after Citigroup’s CEO Michael Corbat visited Kushner’s White House office, Citigroup made a $325 million loan to the Kushner Companies, the New York Times reported this week.    “This is exactly why senior government officials…don’t maintain any active outside business interests,” per Don Fox, former Acting Director and General Counsel of the Office of Government Ethics during the Obama administration. “The appearance of conflicts of interests is simply too great.”

In spite of White House ethics rules, Kushner continues to own “as much as $761 million” of the Kushner Companies according to a New York Times estimate and the Times also notes that while Kushner is the point man for Middle East policy “his family company continues to do deals with Israeli investors.”

Separate Ongoing Federal and State Investigations of Kushner

Separately from the Mueller probe, Kushner is being investigated by federal prosecutors in Brooklyn for the Eastern District of New York.  Investigators have requested records related to a $285 million loan Deutsche Bank gave Jared Kushner’s family real estate company in October 2016, one month before election day. Kushner was the Kushner Companies’ CEO until January 2017 and still owns part of the Kushner Cos. after selling off part of his stake. The Kushner Companies have a long-term relationship with Deutsche Bank according to financial disclosure forms.

The New York State Department of Financial Services asked Deutsche Bank, Signature Bank and New York Community Bank for information about their relationships with Jared Kushner and his finances, The Wall Street Journal and ABC News reported this week. Responses to the New York State inquiry are due March 5.

Abbe Lowell, Kushner’s attorney, says Kushner has behaved “appropriately” in meetings with foreign officials and that he “has taken no part of any business, loans or projects with or for” Kushner Companies since joining the White House.”  In a statement provided to NPR, Lowell says, “Mr. Kushner has done more than what is expected of him in this [Security clearance] process.”

 

Copyright ©2018 National Law Forum, LLC
This post was written by Jennifer Schaller and Eilene Spear of the National Law Forum, LLC.

The Four Pillars: Trump’s Immigration Plan

In his first State of the Union address, President Trump described four “pillars” to his immigration plan, with mixed reception. The pillars reinforce his campaign slogan to “Buy American, Hire American” and track with the immigration policy priorities he has previously outlined. These priorities include border security, interior enforcement and a merit-based immigration system.

The first two pillars address building a wall along the Southern border as well as a pathway to citizenship for certain undocumented foreign nationals presently in the United States, including about 800,000 young people (Dreamers) who were granted temporary status through the Deferred Action for Childhood Arrivals (DACA) program, now rescinded by President Trump.

The third pillar would end the diversity visa lottery (DV lottery). This program was established by Congress in 1990 and allocates 50,000 green cards to foreign nationals of countries with historically low U.S. immigration rates. Which countries are eligible can vary from year to year based on government-collected statistics as to how many foreign nationals have immigrated from those countries through other non-DV lottery programs. For example, in FY2018, most African countries were eligible, as were most European countries, except Great Britain. Countries that were not eligible included Pakistan, the Philippines, India, Mexico, Brazil, El Salvador, and Peru. The odds of being chosen are poor. Past data reveals about 14.5 million apply annually.

A common misconception, indeed one articulated by President Trump, is that the DV lottery program “randomly hands out green cards without any regard for skill, merit, or the safety of our people”. In fact, however, DV lottery participants must demonstrate that they meet certain educational or skilled work experience requirements in addition to clearing robust government background and security checks. Those selected in the DV lottery must be screened just like any other green card applicant – including family- and employment-based green card applicants. The process is arduous and can take months to complete. Security screenings include biometrics as well as name and fingerprint checks through multiple interagency government databases to identify potential criminal, national security, terrorism, organized crime, gang and other related issues. Applicants also must attend an in-person interview where they are again screened for potential red flags affecting admissibility.

The fourth pillar addresses family-based immigration and would limit it to immediate family members which include spouses and minor children. Referring to “chain migration”, President Trump stated that “a single immigrant can bring in virtually unlimited numbers of distant relatives.” This misconstrues current immigration law. The United States already limits family-based immigration. Family-based green cards are only available to spouses, children, parents and siblings (for U.S. citizens). Grandparents, aunts, uncles, cousins and other extended family members are ineligible. The number of family-based green cards are limited by annual quotas. For example, siblings of U.S. citizens who filed family-based petitions between 1994 and 2004 are only now current. In other words, the wait is long. Furthermore, sponsors of family-based green card applicants must also demonstrate that they have the financial means to support the intended beneficiary by signing a contract with the government agreeing to reimburse for any means-tested public benefit the beneficiary should receive, until the beneficiary has worked 10 years, becomes a US. citizen, dies or leaves the United States permanently.

U.S. immigration law is complex and a challenge to understand for those who aren’t regularly walking its trenches. For those curious about the Administration’s regulatory agenda, https://resources.regulations.gov/public/custom/jsp/navigation/main.jsp is a good place to start. Those interested in learning more about U.S. immigration facts can also access the American Immigration Council’s resources available at https://americanimmigration council.org/.

 

Copyright © 2018 Womble Bond Dickinson (US) LLP All Rights Reserved.
This post was written by Jennifer Cory of Womble Bond Dickinson.
More on Immigration at the National Law Review Immigration Page.

Trump Administration Releases Framework for Immigration Deal

The Trump Administration has released a new framework containing components of proposed immigration reform.

Not surprisingly, border security is at the top of the list and includes the following components:

  • New $25 billion trust fund for the (southern) border wall system
  • Funds for hiring more enforcement personnel
  • Immigration court reforms
  • Ending the “catch-and-release” policy and establishing an emphasis on the prompt removal of illegal border crossers
  • Ensuring the removal of criminal aliens, gang members, violent offenders and aggravated felons
  • Expedited removal for visa overstays

Legalization for DACA recipients and other DACA-eligible illegal immigrants is next:

  • Increase in the number of eligible individuals to 1.8 million (from 800,000)
  • Provision of a 10-12 year path to citizenship

Ending so-called “Chain Migration”:

  • Limit family sponsorship to spouses and minor children for U.S. citizens and Legal Permanent Resident sponsors
  • Exclude parents and other non-nuclear family members from sponsorship

Ending the Diversity Visa Lottery:

  • Reallocate the 50,000 diversity lottery visas to the family-based and employment-based backlogs. As of November 1, 2017, there were approximately 4 million applicants waiting for green cards, 112,000 are employment-based applicants.

This framework increases the number of “DACA-like” recipients but is otherwise similar to the principles that the Administration offered in October 2017 in exchange for DACA relief. The new proposal, however, does not include all of the earlier proposals such as requiring the use of E-Verify and eliminating federal aid to sanctuary cities.

It is reported that the Administration believes this framework could reach 60 votes in the Senate although its fate in the House is likely more uncertain. Due to the Administration’s DACA rescission in September 2017, Congress has only until March 2018 to find a solution for the future of the “Dreamers.”  More details about the framework are expected from the Administration soon.

Jackson Lewis P.C. © 2018
This post was written by Forrest G. Read IV of Jackson Lewis P.C.
Read more immigration news at the National Law Review’s Immigration page.

BREAKING NEWS: Congress Sends Tax Cuts and Jobs Act to President Trump’s Desk for Signing

The Tax Cuts and Jobs Act (TCJA) has been passed by both houses of Congress and is now set to be signed into law by President Trump. The vote was 224-201 in the House with all the Democrats joined by twelve Republicans voting “no” and 51-48 in the Senate along party lines. Although the TCJA isn’t exactly great news for the renewable energy industry, it is far better than what was originally proposed in the House and Senate bills. Here are the main takeaways:

  • PTC Inflation Adjustment – The TCJA preserves the current 2.4¢/kWh PTC amount for wind with an annual inflation adjustment. The House bill would have reduced the PTC to 1.5¢/kWh with no annual inflation adjustment.

  • ITC Phase-out Schedule – The TCJA does not eliminate the permanent 10% solar ITC beginning 2023.

  • Continuous Construction Requirement – The TCJA does not include the statutory continuous construction requirement that was included in the House bill. Despite clarification from the House there was some concern as to whether the House bill would eliminate the four-year safe harbor that wind developers rely on under IRS guidance.

  • Orphaned Technologies – The TCJA does not include the ITC extension for orphaned technologies (e.g., fuel cell, small wind, micro turbine, CHP, and thermal energy) that were left out of the 2015 PATH Act. However, the Senate Finance Committee is proposing to include an extension for these technologies in its tax extenders package.

  • 100% Bonus Depreciation – The TCJA provides 100% bonus depreciation through 2022 for both new and used property. 100% bonus applies to property acquired and placed in service after September 27, 2017 with a transition rule permitting taxpayers to elect 50% bonus instead during the taxpayer’s first taxable year ending after September 27, 2017. This provides a big incentive to place projects in service this year in order to take advantage of depreciation deductions at the current 35% corporate tax rate.

  • BEAT Provision – The TCJA provides a Base Erosion Anti-Abuse Tax (BEAT) whereby a bank that makes 2% (or 3% for companies) of its deductible payments to a foreign affiliate is subject to the BEAT when those payments reduce its U.S. tax liability to less than 10% (12.5% beginning in 2025). The good news is that the TCJA provides that tax equity investors can use the PTC and ITC to off-set up to 80% of their tax liability under the BEAT. The bad news is that the 80% offset expires in 2025, so tax-equity investors in wind projects that generate PTCs over a 10-year time horizon could potentially have all of their credits clawed-back in the future.

  • Interest Deductibility – The TCJA generally limits the amount of interest that can be deducted to 30% of the business’s adjusted taxable income. In the case of partnerships, this limitation would apply at the entity level. Deductions that are disallowed are carried forward and used as a deduction in subsequent years. As we discussed in our blog post here on the House bill, this limitation could have an adverse impact on back leveraged transactions, which developers utilize to reduce their cost of capital and free up cash to invest in new projects.

  •  Corporate Tax Rate/AMT – The TCJA slashes the corporate tax rate from 35% to 21%, effective for tax years beginning after 2017, with no sunset. The TCJA does not include the corporate AMT that was in the Senate bill and which would have had a negative impact on projects generating PTCs after four years in operation. It remains to be seen whether the lower corporate rate will reduce demand for renewable energy credits among tax-equity investors in the market, which now have less tax liability to offset with credits.

© 2017 Foley & Lardner LLP
For more on Tax, go to the Tax Practice Group page.