THE BIG IDEA:
— EXCLUSIVE: Sen. Elizabeth Warren today takes her ongoing crusade against the outsized influence of the financial services industry to one of Washington’s most respected think tanks. The Massachusetts Democrat is questioning the independence of the Brookings Institution and one of its longtime scholars over a study that criticizes a proposed regulation aimed at reining in conflicts of interest among retirement advisers.
Post reporter Tom Hamburger obtained letters that Warren sent this week to Brookings and the Labor Department. The Massachusetts Democrat blasts a report by non-resident scholar, Robert Litan, which predicted high costs for a measure backed strongly by progressives, consumer groups and President Obama.
Citing the $85,000 combined fee that Litan and a co-author received from a leading investment firm, Warren calls their report “highly compensated and editorially compromised work on behalf of an industry player seeking a specific conclusion.”
Litan, who held senior positions in Bill Clinton’s administration, confirmed that the outline for his study was reviewed by its sole sponsor, The Capital Group, which offered some comments. The investment firm has more than $1.4 trillion under management in its American Funds and other products. The company, like others handling retirement investment assets, has made opposition to Labor’s rule one of its top priorities.
The scholar forcefully rejects Warren’s criticism, arguing that he disclosed the funding arrangement repeatedly, including in July testimony before a congressional committee on which Warren sits. He stressed that the funding did not influence his study or its conclusions.
But Litan acknowledges one mistake: His testimony overlooked a relatively new Brookings rule prohibiting non-resident scholars—who are generally not paid by the institution—from associating their congressional testimony with the think tank.
Industry says this is common practice: Capital Group spokesman Tom Joyce downplayed complaints about the company’s support of research by Litan and his colleague, Hal Singer. “It is typical for organizations to sponsor academic studies,” Joyce said, noting that in this case “no pre-conditions or pre-determined conclusions were imposed. … They were paid for their work as any professional should be. They clearly disclosed the source of this compensation and, as they have stated, their conclusions are their own.”
Brookings distanced itself from Litan’s work after Warren complained: A Brookings official says Litan’s study and testimony on the new rule are not connected with the institution. “His congressional testimony was in his private capacity, not connected with Brookings in any way,” said David Nassar, vice president for communications.
Warren is demanding more details from Brookings, including specific information about the institution’s rules for scholarship and testimony. Many think tanks, including Brookings, have faced growing questions about the extent to which their agenda-driven donors shape research priorities. (Read Tom’s story from last fall on this issue here).
Labor’s rule on retirement advisers is the subject of an increasingly intense lobbying campaign. A public comment period ended this past week, and the administration and its allies expressed new resolve to implement it. The central thrust is to require that investment advisers put consumers’ “best interest” first by acting as “fiduciaries.” Consumer advocates argue that without such a standard, financial-services providers routinely put themselves before their customers. “Some advisers and brokers recommend investments based on the free vacations, cars, bonuses, fees and other kickbacks that the adviser can earn from selling a lousy product,” Warren writes in her letter to Labor Secretary Thomas Perez.
House Republicans who want to kill or delay the rule have scheduled two hearings for this week. Former SEC Chairman Arthur Levitt told a convention of state securities regulators yesterday that the lack of congressional support for the rule is a “national disgrace” and urged attendees to “push back.”
There is a colossal gulf in estimates about the impact this rule would have, which is why the Warren-Brookings fight is so important:
- The White House Council of Economic Advisers says industry rewards to retirement advisers cut $17 billion from the annual potential retirement savings of middle-class families. They estimate that investors could save more than $200 billion over ten years with the rule.
- Litan’s study, touted by industry, estimates that the rule “could cost investors as much as $80 billion” during a future market downturn. He argues that advisers would raise fees and costs to comply, making it harder for lower-income people to get any personalized advice at all.
WHILE YOU WERE SLEEPING:
— Ed Gillespie plans to run for governor of Virginia, according to three people familiar with his plans. State Sen. Mark D. Obenshain made the surprise announcement yesterday that he will not run for the GOP nomination in 2017. Gillespie has said he defers to Mark, who played a leadership role on his Senate campaign against Mark Warner last year. Democrat Terry McAuliffe, like all Virginia governors, can only serve one term. Jenna Portnoy and Laura Vozzella have more from Richmond here.
— Joe Biden keeps signaling that he is serious about running.
- The Vice President will spend today at the U.N., underscoring his foreign policy experience. He has one-on-one meetings with the leaders of Cyprus, Ukraine, Japan, Afghanistan and Iraq. He’ll also chair a summit on countering the Islamic State.
- “It feels each and every day that it’s getting closer” to him running, Democratic fundraiser Robert Wolf said on Bloomberg TV last night. “It seems like he’s leaning forward to eventually run.” Wolf met with Biden in New York earlier this month and said he’ll remain a Hillary supporter. But he added that, “A lot of people want to see a real Democratic race.”
- CNN announced that he would qualify for the first Democratic debate it is hosting in two weeks, and that they would leave space for him to announce as late as the day of the debate.
- The latest NBC/Wall Street Journal poll finds Biden viewed favorably by 40 percent and unfavorably by 28 percent. Contrast that to Hillary, who is underwater at 39/47.
- The Union Leader, New Hampshire’s biggest paper, urges Biden to get in. The paper’s conservative editorial board calls him the closest thing Democrats have to a grownup and praise him for having bedrock beliefs that they say Hillary lacks.
— Jeb Bush is rolling out an energy plan that will call for lifting restrictions on producing and exporting oil and gas. It’s part of his larger pitch for achieving 4 percent economic growth. His plan includes three other general components: approving construction of the Keystone XL pipeline; stripping away some environmental regulations; and urging the federal government to yield to the energy desires of state and tribes. (Ed O’Keefe)
— The MacArthur “Genius” grants were awarded last night. Among the 24 winners are journalist Ta-Nehisi Coates and Lin-Manuel Miranda, who composed and stars in the Broadway show “Hamilton.” The $625,000 award is paid out in four installments over five years. (Full list is here.)
GET SMART FAST:
- Audi confessed that 2.1 million of its cars around the world were outfitted with software that enabled them to cheat emissions standards. (Thad Moore)
- The top watchdog at DHS is allowing Secret Service agents to work alongside his agents as they investigate leaks from the agency, an unorthodox move that raises lots of red flags. (Jerry Markon)
- A federal judge in Arizona sanctioned the U.S. Border Patrol over destruction of evidence the agency was required to keep during an ongoing civil lawsuit. (AP)
- The FBI will collect additional information about shootings involving law enforcement and will begin publishing a report with more details on how police use deadly force. (Mark Berman)
- Six House Democrats called on the State Department’s Inspector General to investigate the removal of Malaysia from a list of the worst offenders in human trafficking. (Reuters)
- The female prison employee who helped two convicted murderers escape from a maximum security prison in upstate New York, leading to that epic manhunt, was sentenced to up to 7 years.
- President Obama pledged to increase support for U.N. peacekeeping. Although the U.S. already chips in more than any other country for the program, we only contribute 42 police, six military experts and 34 troops. Obama signed a directive to double the number of military officers. (Karen DeYoung)
- Brown University revoked Bill Cosby’s honorary degree. (USA Today)
POWER PLAYERS IN THE NEWS:
- Trump will go back on Fox News, appearing tonight on the “O’Reilly Factor,” after boycotting the cable channel last week. (NYT)
- The company that owns the bus Trump has been using in Iowa put it up for sale on Craigslist for $15,000 but took down the ad a few hours later. But a mechanic told the Des Moines Register it is still for sale.
- Ben Carson is on the verge of raising $20 million in the fundraising quarter that ends tomorrow. His campaign said it has raised $10 million in September. (CNN)
- Lawyers for Dennis Hastert are in plea negotiations with federal prosecutors. (Chicago Tribune)
- Hillary went up with an ad attacking a pharmaceutical company for gouging customers and saying she will fight for lower prices. Congressional Democrats issued a subpoena to the company in question as well. (Watch here.)
- The House Ethics Committee has extended its review of Rep. Blake Farenthold (R-Tex.) and his congressional office over allegations by a former staffer of harassment and a hostile work environment. Though it’s worth noting that the independent Office of Congressional Ethics recommended in June that the member-led ethics panel dismiss the investigation. (Colby Itkowitz)
- Arizona Republican Rep. David Schweikert is hinting to local press that he may wage a primary challenge against John McCain.
- Dave Matthews told Rolling Stone that he supports Bernie Sanders.
- Alabama Gov. Robert Bentley’s spokesman said he and the first lady have reached an agreement to end their 50-year marriage. “Bentley said he had asked for the records of the divorce case to be unsealed, though it remained off-limits as of Monday afternoon,” the Montgomery Advertiser reports.
— Obama v. Putin: There was a lot of the expected awkwardness in New York yesterday. Check out these two pictures of President Obama with Vladimir Putin. The first was taken during a toast at a luncheon to celebrate the UN’s anniversary, and the second was shot at the pool spray before their 95-minute sit-down, at which they argued about Syria and Ukraine. It’s not hard to see the president’s disdain. It would be fun to know exactly what was in POTUS’ head during these two moments. Hopefully he writes about Putin candidly in his memoir. David Petraeus explains how Putin uses provocations around the globe to protect his own interests, via Walter Pincus‘ column today.
— “After Boehner, conservatives must answer crucial question: Who’s next?” by Robert Costa and Mike DeBonis: “Hard-line conservative Republicans, emboldened by their role in the resignation of House Speaker John A. Boehner, are struggling to recruit a candidate with enough political capital and grass-roots support to challenge Boehner’s heir apparent. That contender, House Majority Leader Kevin McCarthy (Calif.), announced his bid for speaker Monday, but by sharing Boehner’s relaxed personality and center-right Republican politics, he would almost certainly face similar problems from the conservative wing from the start and skepticism about whether he can truly give voice to the base’s frustrations…McCarthy’s notice came hours after two potential rivals took themselves out of the running. Both Financial Services Committee Chairman Jeb Hensarling (Tex.), a prominent conservative who has clashed with Boehner, and Rep. Peter J. Roskam (Ill.), a former chief deputy whip who has taken a leading role in calling for party unity, announced that they would not seek the speaker’s post…And there are signs that conservatives see a better opportunity to shape the contest to replace McCarthy as majority leader, should he win the speaker’s gavel.”
Here are some notable developments on the leadership fight–
- House Republicans will meet behind closed-doors tonight to discuss their options, per The Hill.
- Elections could be on Oct. 7, per Politico’s John Bresnahan, but leadership aides say nothing has been finalized.
- Tom Price announced he is running for majority leader with the support of Paul Ryan and Hensarling.
- Conference chair Cathy McMorris Rodgers said she won’t run for majority leader last night, per Politico, meaning the race will probably pit Price against just Steve Scalise, the current whip.
- Mia Love, the freshman from Utah, this morning put out a press release endorsing Trey Gowdy for Majority Leader.
— “In smog battle, industry gets help from unlikely source: black business group,” by Joby Warrick: “For years, the air over central Pittsburgh has ranked among the country’s dirtiest, with haze and soot that regularly trigger spikes in asthma attacks, especially among the urban poor. So it might have seemed odd that a black business group would choose this spot to denounce proposed restrictions on smog. But that’s exactly what the head of the National Black Chamber of Commerce did this month. Chamber President Harry C. Alford appeared before some of Pittsburgh’s African American leaders to urge opposition to a White House plan for tougher limits on air pollution. Then he went on radio to deliver the same appeal….. Since early summer, Alford has delivered the same pitch in multiple cities…The National Black Chamber of Commerce, which acknowledges receiving strong financial backing from Exxon Mobil and other fossil-fuel interests, has specifically tailored its message to African American audiences.”
— “Taliban storms into northern Afghan city in major blow for security forces,” by Tim Craig and Sayed Salahuddin: “Taliban insurgents fought their way into a major city in northern Afghanistan on Monday, driving back stunned security forces in a multi-pronged attack that also sent Afghan officials and U.N. personnel fleeing for safety. The fall of Kunduz would be a huge blow to the Western-backed government in Kabul and would give Taliban insurgents a critical base of operations beyond their traditional strongholds in Afghanistan’s south. Afghan government leaders and the U.S.-led coalition here view the battle for Kunduz as a key test of the Afghan security forces in their continuing fight with the Taliban.” A new offensive began this morning.
SOCIAL MEDIA SPEED READ:
— ZIGNAL VISUAL: Warren getting more buzz again. Since July 1, our analytics partners at Zignal Labs have tracked more than 337,000 mentions of the Massachusetts senator across traditional and social media. That’s somewhere between Lindsey Graham and Rick Santorum, if you’re comparing her to presidential candidates, and far behind fellow non-candidate Joe Biden. Her speech on race this week was her busiest day, media-wise, since her staunch defense of Planned Parenthood on the Senate floor in August. Since Feb. 1, she has been mentioned 1.2 million times on Twitter. Compare that to 9.5 million mentions of Hillary and 6.1 million mentions of Bernie. Here’s a chart of her mentions this month:
— Pictures of the day:
“Trump Hat Lady” was the unexpected star of Trump’s press conference to unveil his tax plan:
The Internet loved her. Here is one more shot:
“I win”! This is a screen grab from Trump’s tax plan:
Ben Carson met NASCAR great Richard Petty during a stop in North Carolina:
At Hillary headquarters, former Olympic diver Greg Louganis posted a photo with Jesse Jackson Sr. and Michelle Kwan:
Trump and Sanders will be at the same event together in two weeks:
— Tweets of the day:
House Majority Leader Kevin McCarthy (R-Calif.) rolled out his campaign for Speaker with quotes from conservative validators on Twitter:
George Pataki proclaimed his belief in climate change as a way to get some attention (and money) at the bottom of the GOP pack:
Chuck Schumer, a New Yorker who is much better at generating media coverage, used the Mets clinching a spot in the playoffs to promote a bill cracking down against online ticket sales:
Speaking of baseball, Rep. Xavier Becerra (D-Calif.) met with the commissioner:
— Instagrams of the day:
Rep. Tulsi Gabbard (D-Hawaii) and colleagues welcomed Indian Prime Minister Narendra Modi to San Jose, Calif.:
First lady Michelle Obama is posting photos on Instagram for the “62 Million Girls” education initiative. This one comes from actress and comedy writer Mindy Kaling, who wrote: “I was all smiles because I got to go to school and be myself. #62MillionGirls don’t have that chance. Let’s end that”:
The Post’s Bob Costa found a long-shot candidate for Speaker wandering Capitol Hill:
GOOD READS FROM ELSEWHERE:
— Politico, “Planned Parenthood chief to offer spirited defense,” by Jennifer Haberkorn: “Planned Parenthood President Cecile Richards will tell lawmakers on Tuesday that other health care centers cannot pick up the slack if they strip her organization of federal funding. … In her first testimony to Congress since a series of Planned Parenthood sting videos went viral this summer, Richards will argue that defunding the group would leave thousands of women without care. ‘As many as 650,000 women could face reduced access and 390,000 women would loss access to preventive health care in the first year alone,’ she will argue, citing Congressional Budget Office estimates on the impact of defunding. … Richards will also tell the House Committee on Oversight and Government Reform that she is proud of the organization’s ‘limited role’ in collecting fetal tissue and organs from aborted fetuses. She will assert that only 1 percent of Planned Parenthood’s 59 affiliates currently harvest fetal tissue, according to the testimony.”
— Yahoo Politics, “Carly Fiorina defends Bush-era torture and spying, calls for more transparency,” by Michael Isikoff: “Positioning herself as a steely advocate of aggressive counterterrorism programs, Republican presidential candidate Carly Fiorina offered a vigorous defense of CIA waterboarding as a tactic that helped ‘keep our nation safe’ in the aftermath of 9/11. ‘I believe that all of the evidence is very clear — that waterboarding was used in a very small handful of cases [and] was supervised by medical personnel in every one of those cases,’ Fiorina said. ‘And I also believe that waterboarding was used when there was no other way to get information that was necessary.’ … Fiorina’s relationship with the U.S. intelligence community dates back to the weeks after the Sept. 11, 2001, terror attacks, when she got an urgent phone call from then NSA director Michael Hayden asking her to quickly provide his agency with HP computer servers for expanded surveillance.
While he did not tell Fiorina the details, Hayden confirmed to Yahoo News last week that he needed the HP servers so the NSA could implement ‘Stellar Wind’ — the controversial warrantless wiretapping program, including the bulk collection of American citizens’ phone records and emails, that had been secretly ordered by the Bush White House. ‘Carly, I need stuff and I need it now,’ Hayden recalled telling Fiorina. Fiorina acknowledged she complied with Hayden’s request, redirecting trucks of HP computer servers that were on their way to retail stores from a warehouse in Tennessee to the Washington Beltway, where they were escorted by NSA security to the gates of agency headquarters in Fort Meade, Md.”
— New York Times Magazine, “Donald Trump is not going anywhere,” by Mark Leibovich, “I encountered the phenomenon up close at the first Republican debate…I positioned myself in the post-debate ‘spin room’…The candidates themselves almost never venture in. But suddenly, at the end of the night, a literal stampede was rumbling toward a far corner of the room, where Trump had crashed this assembly of polite company. I have seen many press scrums, but never like this. It was scary. ..In the months since, Trump has grown into a kind of one-man chaos theory at the center of a primary campaign in disarray…Where does this end? I kept asking Trump this as we sat around his office and rode around in limousines and airplanes. ‘I have no idea,’ he always said, sometimes modifying the noun with a big, unclassy profanity. ‘But I’m here now. And it’s beautiful.'”
More: “I asked whether he had ever experienced self-doubt. The question seemed to catch Trump off guard, and he flashed a split second of, if not vulnerability, maybe nonswagger. ‘’Yes, I think more than people would think,’ he told me. When? ‘I don’t want to talk about it’…’Our country needs to be glamorized,’ Trump said, turning to me…The idea of a president as Everyman stands at odds with his glamorized vision for the nation. The president should be a man apart, exceptional and resplendent in every way. ‘Jimmy Carter used to get off Air Force One carrying his luggage,’ Trump said. ‘I used to say, ‘I don’t want a president carrying his luggage’…’Some people think this will be good for my brand,’ Trump concluded, as deep as he probes. ‘’I think it’s irrelevant for my brand.'”
HOT ON THE LEFT
John Oliver lays into Fox News over anti-Muslim refugee warning. From Salon: “John Oliver took on the heartbreaking stories of the Syrian refugee crisis Sunday night on ‘Last Week Tonight.’ Oliver began with an all out assault on Fox News for showing what they said was a new video online that ‘some’ say makes people nervous about taking in refugees. The footage featured a packed public transit train with the crowd chanting ‘Allahu akbar’ … The caption below the video reads ‘Terrorists Inbound?'” Watch the full 18-minute package here.
HOT ON THE RIGHT
Grover Norquist blesses Trump’s tax plan. From the Washington Examiner: The nation’s biggest anti-tax advocate, Grover Norquist, said it would produce “jobs, jobs, jobs.” Americans for Tax Reform said Trump’s plan is “consistent” with the advocacy group’s “Taxpayer Protection Pledge.”
–What’s happening today on the campaign trail: Jeb Bush gives an energy policy speech in Canonsburg, Pa., while Carly Fiorina holds a town hall with the Oklahoma Independent Petroleum Association in Oklahoma City. John Kasich greets voters in Chicago. Lindsey Graham appears on “The View.” Ben Carson campaigns in Winston Salem, N.C. In Iowa, Chris Christie holds his aforementioned press conference in Des Moines and Bobby Jindal makes stops in Fairfield and Keokuk.
–On the Hill: The Senate reconvenes at 10 a.m., and is expected to approve a bill to fund the government through Dec. 11. The House meets at 12 p.m. for legislative business. Members will vote on two suspension bills and a measure allowing states to exclude organizations that provide abortions from their Medicaid programs.
–At the White House: President Obama is in New York City for morning events at the United Nations, including a bilateral meeting with Cuban President Raul Castro. He returns to Washington in the afternoon.
QUOTE OF THE DAY: “The true answer is I used to be until I saw how many calories are in them.” – Hillary Clinton responds to a question about whether she likes Pumpkin Spice Lattes at Starbucks during a Facebook chat
NEWS YOU CAN USE IF YOU LIVE IN D.C.:
— Clouds, clouds and more clouds dominate today. The chance of rain increases by afternoon, especially north and west of the city. “Most of the day should be dry, though, despite the near-constant cloudiness. Temperatures range from the upper 70s to the low 80s, but humidity runs slightly higher than yesterday (dew points in the low 70s!), which offers a summery feel,” the Capital Weather Gang forecasts.
— The Nationals beat the Cincinnati Reds, 5-1, in their final home game of the season. But the victory was overshadowed by pitcher Jonathan Papelbon’s suspension for four games (effectively the rest of the season) after he grabbed Bryce Harper’s neck in a Sunday dugout fight. But Papelbon is still under contract and could be on the roster next season.
VIDEOS OF THE DAY:
— Trevor Noah made his debut as host of “The Daily Show” last night. He opened by lamenting Boehner’s retirement: “I just got here! I’ve got fancy suits and a new set and I just learned how to pronounce your name!” See the blow-by-blow here. Read Hank Stuever’s review. Watch the full debut episode here.
— A bid to confront Trump about his views on immigration didn’t go so well for Estefani Mercedes. Mercedes brought 1,000 yellow dahlias — the national flower of Mexico — to Trump Tower, along with notes from immigrants, as a protest. The problem was, she couldn’t make it through the front door. TMZ likens it to an episode of “I love Lucy.”