Christie off list of White House chief of staff candidates
By CATHERINE LUCEY, JONATHAN LEMIRE and ZEKE MILLER
Friday, December 14
WASHINGTON (AP) — Former New Jersey Gov. Chris Christie took himself out of contention for White House chief of staff on Friday as President Donald Trump’s chaotic search for a new chief inched forward with the feel of an unfolding reality TV show.
Christie cited family reasons in a statement saying that he was asking Trump to remove him from consideration. He had met with Trump on Thursday to discuss the job, according to a person familiar with the meeting who was not authorized to discuss it publicly.
Christie’s departure is the latest twist in a search triggered when Trump’s preferred candidate to replace John Kelly bowed out. With no leading name in sight, the void has quickly filled with Trump’s specialty: drama.
British journalist Piers Morgan suggested he would be a good fit in an op-ed for “The Daily Mail,” while former major league slugger Jose Canseco tweeted his interest to Trump. Speculation has swirled around an array of Trump associates, prompting some to distance themselves from the job.
When former House Speaker Newt Gingrich visited the White House this week, he insisted it was merely to see the Christmas decorations.
The wild process is hardly a novelty for the Trump administration, which has struggled with high staff turnover and attracting top talent, but it underscored the tumult of Trump’s Washington.
In past administrations, chief of staff was a sought-after job, typically awarded after a careful process. Now, many view the job as a risky proposition, given Trump’s propensity for disorder and his resistance to being managed.
For his part, Trump insisted Thursday that the process is moving along.
“We’re interviewing people now for chief of staff,” he said, adding that the short list is now “five people. Really good ones. Terrific people. Mostly well-known, but terrific people.”
Trump himself likes to feed the drama, dropping hints about the number of candidates in the running and bantering with journalists about who wants the job. The erratic search recalled the transition period before Trump took office, when prospective aides and television personalities paraded before a pack of journalists in the lobby of Trump Tower.
Author Chris Whipple, an expert on chiefs of staff, called the search process “sad to watch.”
“In his first two years, Trump devalued the position by failing to empower anyone to perform the job, and now he’s turned the search for a replacement into a reality show,” said Whipple, author of “The Gatekeepers,” a book on the subject. “The only thing more broken and dysfunctional than the White House itself seems to be the search for the new White House chief of staff.”
The president’s hunt for a new chief reverted to square one over the weekend when Nick Ayers, Vice President Mike Pence’s chief of staff, took himself out of the running and decided that he would instead leave the White House. The announcement surprised even senior staffers who believed that Ayers’ ascension was a done deal.
Trump then turned to a list of other candidates that was said to include Office of Management and Budget Director Mick Mulvaney and Rep. Mark Meadows, R-N.C., the chairman of the conservative House Freedom Caucus. Other possible options mentioned were U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, though both signaled they were happy in their current roles.
By Wednesday, Meadows was out of the running, with the White House saying Trump thinks he is needed in Congress.
Throughout the week, a number of other names were floated, including former Trump deputy campaign manager David Bossie, acting Attorney General Matthew Whitaker, White House communications director Bill Shine and press secretary Sarah Huckabee Sanders. It was not clear how many of those options were being taken seriously.
The breadth of speculation provided on-camera time for many to discuss the speculation. Bossie called it “humbling” to be considered while acknowledging that he did not know if it was a serious list of names. Former Pennsylvania Sen. Rick Santorum said on CNN that he would decline the job if offered, though it was never clear he was a serious contender.
Sanders responded Thursday to speculation that Trump’s aide and son-in-law, Jared Kushner, could be up for the job, saying that she was “not aware that he’s under consideration.” But she appeared to leave some wiggle room, adding, “He will be great in any role that the president chooses to put him in.”
According to a person familiar with the matter, people have been reaching out to the president to suggest the idea, but Kushner believes that he can serve the president best in his current role. The person spoke on condition of anonymity to discuss the internal discussions.
A time frame for a decision remained uncertain, with some speculation about the possibility of two people taking over the responsibilities of the chief of staff. And Trump made clear in an interview with Fox News on Thursday that he was still soliciting advice.
“Well, I want somebody that’s strong, but I want somebody that thinks like I do. It’s my vision — it is my vision, after all,” Trump said. “At the same time, I’m open to ideas.”
Associated Press writer Jill Colvin contributed to this report.
With New Strategic Plan, DriveOhio and the Ohio UAS Center Bring Smart Mobility to Every Altitude, Position Ohio as a Leader in Drone Technologies
When Dayton’s own Wright Brothers took their first flight in December 1903, they only reached about 10 feet off the ground. Today’s flights take us easily to 30,000 feet and above, as air traffic control monitors and guides planes safely across the sky.
Interestingly, thanks to unmanned aircraft systems (UAS), known commonly as drone technology, there is now a need for an air traffic management system for altitudes below 2,000 feet. Why? Because drone technology has advanced rapidly the last few years and is now capable of transporting both packages and people, but there is no system in place to ensure drones can fly safely without colliding with other aircraft, objects or people. As a result, government regulations require drone operators to always be in view of their aircraft.
Thanks to a new strategic plan announced today, DriveOhio, the state’s center for smart mobility, and the Ohio UAS Center will undertake development of just such an unmanned air traffic management (UTM) system, as well as the continued support of UAS research and development, facilitating the state’s ongoing leadership position in this transformational technology.
With this plan, Ohio continues its storied history in aviation, and demonstrates its commitment to investing in the research and infrastructure needed to advance UAS technology in developing new jobs, business investment and economic growth.
“UAS technology is advancing just as quickly as autonomous and connected vehicle technology, and Ohio understands how both can work together across multiple smart mobility initiatives,” said Jim Barna, executive director of DriveOhio. “Companies operating new UAS technologies need opportunities to test and deploy them, and the nation needs a traffic management system that can make drone delivery and transportation safe and commercially viable. We aim to do all of this in Ohio.”
FlyOhio and Unmanned Traffic Management
To develop a low-altitude UTM system, the strategic plan introduces a new initiative called FlyOhio, which is researching SkyVision with the Air Force Research Laboratory (AFRL), a $5 million ground-based detect-and-avoid radar system at the Springfield-Beckley Municipal Airport. Additionally, FlyOhio will explore a second UTM solution along the 33 Smart Mobility Corridor, a 35-mile stretch of highway between Dublin and East Liberty, Ohio, which is already a testing ground for autonomous and connected vehicles and communications.
“If we can track and manage that airspace, we can open ourselves up to a whole host of new modes of transportation and commerce,” said Fred Judson, managing director of the UAS Center. The most immediate implication is parcel delivery, where near-future models include connected semi-trucks equipped with drones that are dispatched to deliver single packages, while the truck continues serving customers along its route.
In addition to FlyOhio, the strategic plan also introduces two other initiatives: Ohio UAS Center Operations to facilitate the use of the technology for a broad range of business services; and Workforce Development to educate and create the skills needed for smart mobility jobs around this technology.
“The Ohio UAS Center has been at the forefront of unmanned flight testing and operations, and this plan lays out our strategy to continue our leadership role in advancing this country’s smart mobility operations to the sky,” said Judson. “We’re excited to continue working with companies, government entities and local communities to develop unmanned traffic systems, promote UAS technologies and use cases and develop the workforce here in Ohio to fill the jobs these new technologies will present.”
Operating as part of DriveOhio, the UAS Center, located in Springfield, Ohio, serves as the state’s one-stop shop for those developing, testing and deploying UAS technology in Ohio. As both UAS and autonomous and connected vehicle technologies advance, these teams work collaboratively on air and ground-based smart mobility applications, leveraging resources to make smarter decisions and avoid duplicative efforts.
Senate bill supporting Boggs’ Reagan Tokes Act passes Ohio House
Legislation would ensure full rehabilitation, keep more Ohioans safe
COLUMBUS— State Rep. Kristin Boggs (D-Columbus) today (Dec. 13) announced the House passage of part of the Reagan Tokes Act, Senate Bill (SB) 201, which will provide indefinite sentencing for felony-one and two-level offenders. The bill is named for Reagan Tokes, a student at The Ohio State University who was brutally kidnapped, raped and killed after leaving work at a Columbus restaurant in 2017.
“This legislation is the first step to make Ohio safer by ensuring that the most violent offenders who have demonstrated while in prison that they continue to pose a danger to society, are not automatically released back into our neighborhoods,” said Boggs.
The additional provisions of the Reagan Tokes Act addressing post release control measures will be taken up next year. These criminal justice reforms include requiring the Ohio Department of Rehabilitation of Corrections to adopt caseload standards for parole officers and adopt guidelines for GPS monitoring.
“While Senate Bill 201 passed the House, we know there is still more work to be done,” said Boggs. “We will continue to pursue criminal justice reform in the new year to ensure we are doing everything we can to keep Ohioans safe.”
On February 8, 2017, Reagan Tokes was abducted and later found in a Grove City, Ohio metro park. She was killed by a convicted sex offender who had over fifty infractions while imprisoned and been released from prison homeless three months prior, while being monitored by a GPS. It was later discovered that in the months leading up to Reagan’s death, he had committed a series of armed robberies.
SB 201 now moves back to the Senate for a final vote before its anticipated signature by Gov. Kasich.
Reports: Federal prosecutors probe Trump inaugural committee
NEW YORK (AP) — Federal prosecutors are reportedly investigating the finances of President Donald Trump’s inaugural committee and whether foreigners contributed to its events using straw donors.
The Wall Street Journal reported Thursday that prosecutors in New York are investigating whether some of the committee’s donors made contributions in exchange for political favors and access to the Trump administration— a potential violation of federal corruption laws. The inquiry, which the newspaper said is in its early stages, is also focused on whether the inauguration committee misspent some of the $107 million it raised to stage events celebrating Trump’s inauguration.
The New York Times reported that prosecutors are examining whether people from Qatar, Saudi Arabia and other Middle Eastern countries made illegal payments to the committee and a pro-Trump super political action committee in a bid to influence American policy. Foreign contributions to inaugural funds and PACs are prohibited under federal law.
Both newspapers cited anonymous sources familiar with the inquiry.
The U.S. attorney’s office in Manhattan did not respond to a request for comment Friday.
The inaugural committee said it has not been contacted by federal prosecutors and is not aware of any investigations.
The committee “staged a celebration of our democratic processes and did so in full compliance with all applicable laws and disclosure obligations,” it said Friday in a statement to The Associated Press.
“The inauguration’s accounting was provided both to the Federal Election Commission and the IRS in compliance with all laws and regulations,” it said. “These were funds raised from private individuals and were then spent in accordance with the law and the expectations of the donors.”
It added that the names of donors were given to the election commission and have been public for nearly two years. It said the donors were vetted and no improprieties were found.
White House spokesman Hogan Gidley was asked by reporters Friday if there were any “improprieties” with the inauguration funding.
“The president of the United States has one job at the inauguration. It’s to show up, to thank everyone for the service to get him elected, and then also dance with the first lady,” Gidley said in response. “He did all of those things. This charge has nothing to do with the president of the United States, and it has nothing to do with this administration.”
The investigation marks the latest potential threat to the president and people in his inner circle. The Times and Wall Street Journal reported that it stemmed in part from materials the FBI seized earlier this year while probing the business dealings of Michael Cohen, Trump’s longtime fixer and personal attorney. Cohen was sentenced to three years in federal prison this week for tax evasion and campaign-finance violations.
The newspapers reported that an FBI search of Cohen’s office and home last spring uncovered a recorded conversation between the lawyer and Stephanie Winston Wolkoff, a former adviser to Melania Trump who ran companies that were paid $26 million by the inaugural committee. On the recording, Winston Wolkoff reportedly criticized the president of the inaugural fund, Tom Barrack, over its management.
Spokesman Owen Blicksilver told The Times that Barrack “has never talked with any foreign individual or entity for the purposes of raising money for or obtaining donations related to either the campaign, the inauguration or any such political activity.”
Winston Wolkoff did not immediately return a voicemail left at her Manhattan home.
Prosecutors also are probing the finances of Rebuilding America Now, a pro-Trump super PAC that raised $23 million, according to The Times. The newspaper reported that federal prosecutors in New York and from the office of Special Counsel Robert Mueller have questioned witnesses over whether anyone from Middle Eastern countries contributed to the committee.
The Journal also reported that prosecutors have requested documents from a Tennessee developer relating to a $1 million contribution he made to the inaugural committee in December 2016. The developer, Franklin Haney, hired Cohen to help secure a $5 billion loan from the Energy Department for a nuclear-power project, the newspaper reported.
Attorneys for Haney and Cohen declined to comment.
The inquiry is not the first time prosecutors have scrutinized Trump’s inauguration. Earlier this year, Sam Patten, a well-known Republican lobbyist, pleaded guilty to failing to register as a foreign agent for a Ukrainian political party and admitted to lining up a straw purchaser to pay $50,000 for four tickets to the inauguration.
Patten is a business associate and co-defendant of former Trump campaign chairman Paul Manafort.
Information from: The Wall Street Journal, http://www.wsj.com
The debt threat: Business debt, and worries about it, are up
By STAN CHOE
AP Business Writer
NEW YORK (AP) — Homeowners appear to have learned the lesson of the Great Recession about not taking on too much debt. There is some concern that Corporate America didn’t get the message.
For much of the past decade, companies have borrowed at super-low interest rates and used the money to buy back stock, acquire other businesses and refinance old debt. The vast majority of companies are paying their bills on time, thanks in large part to profits that have surged since the economy emerged from the Great Recession nine and a half years ago.
But with interest rates rising and U.S. economic growth expected to slow next year, worries are building from Washington to Wall Street that corporate debt is approaching potentially dangerous levels. U.S. corporate debt has grown by nearly two-thirds since 2008 to more than $9 trillion and, along with government debt, has ballooned much faster than other parts of the bond market. Investors are most concerned about companies at the weaker end of the financial-strength scale — those considered most likely to default or to get downgraded to “junk” status should a recession hit.
“I’ve been more worried about the bond market than the equity market,” said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. “I think at some point, all the leverage in the system is going to rear its ugly head.”
Consider General Electric, which said in early October it would record a big charge related to its struggling power unit, one that ended up totaling $22 billion. Both Moody’s and Standard & Poor’s subsequently downgraded GE’s credit rating to three notches above “speculative” grade, which indicates a higher risk of default.
GE, with about $115 billion in total borrowings, is part of a growing group of companies concentrated at the lower end of investment-grade. Other high-profile names in this area within a few notches of junk grade include General Motors and Verizon Communications. They make up nearly 45 percent of the Bloomberg Barclays Credit index, more than quadruple their proportion during the early 1970s.
Credit-rating agencies say downgrades for GE, GM or Verizon aren’t imminent. But the concern for them, and broadly for this swelling group of businesses, is if profits start falling or the economy hits a recession.
If those companies do drop below investment grade, they’d be what investors call “fallen angels,” and they can trigger waves of selling. Many mutual funds and other investors are required to own only high-quality, investment-grade bonds — so they would have to sell any bonds that get cut to junk.
The forced selling would lead to a drop in bond prices, which could result in higher borrowing costs for companies, which hurts their ability to repay their debts, which could lead to even more selling.
Even the chairman of the Federal Reserve has taken notice of the rise in corporate debt. Jerome Powell said in a recent speech that business borrowing usually rises when the economy is growing. But he said it’s concerning that, over the last year, the companies increasing their borrowing the most are those already with high debt and interest burdens.
To be sure, many bond fund managers say companies were smart to borrow hefty sums at low rates. And at the moment, there are no outward signs of danger. The default rate for junk-rated corporate bonds was 2.6 percent last month, which is lower than the historical average, and S&P Global Fixed Income Research expects it to fall in upcoming months.
Even if the economy does fall into a recession, fund managers say losses won’t be to the same scale as 2008 when the financial crisis sent the S&P 500 to a drop of nearly 37 percent and the most popular category of bond funds to an average loss of 4.7 percent.
In his speech, Powell said he doesn’t see the weaker parts of the corporate debt market undermining the financial system in the event of an economic downturn, at least “for now.”
Other investors see the market’s growing worries as premature. Companies are still making record profits, which allow them to repay their debts, and consumer confidence is still high.
“There is a story out there that there’s a recession coming very soon, and you had better head for the hills,” said Warren Pierson, deputy chief investment officer at Baird Advisors. “We think that’s a pretty early call. We don’t see recession on the horizon.”
That’s why he and Mary Ellen Stanek, who run bond mutual funds at Baird, haven’t given up on corporate bonds, even if they’ve moderated how much they own.
But critics see some echoes of the financial crisis in today’s loosening lending standards. Consider leveraged loans, a section of the market that makes loans to companies with lots of debt or relatively weak finances. These loans have been popular with investors in recent years because they often have what are called floating rates, so they pay more in interest when rates are rising.
Paul Massaro, portfolio manager for floating-rate strategies at T. Rowe Price, says he’s still positive about this market in general. But his team of analysts has been finding more warning flags in offerings, where the terms of the deal may be overly friendly to borrowers and allow them to amass more debt than they should.
It’s gotten to the point where Massaro is participating in about 15 percent of all offerings today, down from 30 percent a few years ago.
Investors have largely been willing to stomach higher risk because they’ve been starved for income following years of very low interest rates.
As a result, some bonds that by many accounts look like risky junk bonds are trading at prices and yields that should be reserved for higher-quality bonds, say Tom McCauley and Yoav Sharon, who run the $976.3 million Driehaus Active Income fund. To take advantage, they’re increasingly “shorting” corporate bonds, which are trades that pay off if the bonds’ prices fall.
They recently began shorting bonds of a packaged goods company with a “BBB” rating that borrowed to help pay for a large acquisition, for example. A “BBB” rating is at the lower end of investment grade, and a drop to “BB” would send it into junk status.
With so much debt, McCauley and Sharon believe that it’s at risk of getting downgraded to junk and is not paying enough in yield to compensate for its risk.
“As we get into the later stages of the cycle, the sins of the early stages of the cycle tend to start showing up,” said Sharon. “We think that’s where we are today.”