Ahead of a major address in New York City, the Democratic hopeful is wrapping her campaign in an anticorruption pitch to Democratic primary voters
Sen. Elizabeth Warren is proposing a federal ban on all fundraising activities hosted by lobbyists as part of a new, broad set of anticorruption proposals, adding weight to a theme that has underpinned her White House bid.
The plan, outlined Monday morning on the blog site Medium, builds on anticorruption legislation Ms. Warren announced last year. It adds the new lobbying prohibitions, as well as a ban to prevent senior executive branch officials and members of Congress from serving on for-profit boards—whether or not they receive compensation from such positions. Ms. Warren, a Massachusetts Democrat, unveiled the proposal ahead of one of the splashiest events of her presidential campaign: an evening speech at New York City’s Washington Square Park.
The ideas are unlikely to become law while Republicans control the Senate and the White House. GOP lawmakers have generally lined up against similar proposals, citing constitutional concerns.
Typically, new restrictions on registered lobbyists lead to more Washington operatives deciding not to register, instead referring to themselves as consultants or strategic advisers. Ms. Warren says her plan would close that workaround by expanding the definition of lobbyist to include “all individuals paid to influence government.”
Such appeals to the idea that Washington is corrupt could pay off at the ballot box in 2020. In a WSJ/NBC News poll conducted last fall ahead of the midterm elections, 77% of all respondents said reducing the influence of special interests and corruption in Washington ranked as either the most important or a very important factor in deciding which candidate should get their vote. The only issue that ranked higher was the economy. Many Democrats who won House seats in 2018 campaigned on decreasing the influence of money in politics.
“Look closely, and you’ll see—on issue after issue, widely popular policies are stymied because giant corporations and billionaires who don’t want to pay taxes or follow any rules use their money and influence to stand in the way of big, structural change,” Ms. Warren wrote Monday.
Ms. Warren is also pushing to alter the definition of a “thing of value” in campaign finance laws to include tangible benefits made for campaign purposes, in what appeared to be a nod to President Trump.
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The Wall Street Journal reported in November 2018 that Mr. Trump intervened to suppress stories about alleged sexual encounters with women, including the former Playboy model Karen McDougal and the former adult-film star known professionally as Stormy Daniels, citing interviews with three dozen people, court papers, corporate records and other documents. The president’s former personal attorney, Michael Cohen, told a federal judge that Mr. Trump had directed him during the 2016 campaign to buy the silence of two women who said they had affairs with Mr. Trump.
Mr. Cohen pleaded guilty in August 2018 to eight criminal charges, including campaign-finance violations. Mr. Trump has denied the encounters.
Ms. Warren is additionally proposing making it harder for corporations to seal settlements of product liability litigation, something Democrats have called for in the past, notably in 2014 following a faulty ignition switch installed on 2.6 million General Motors vehicles.
Heath Tarbert and two other commissioners must answer questions about a provision in a settlement with Kraft Foods and Mondelez Global, judge says
A federal judge in Chicago has made an unusual demand of the new chairman of the Commodity Futures Trading Commission: Testify in front of—and perhaps be cross-examined by—lawyers for two companies that were recently penalized by the regulator.
U.S. District Judge John Robert Blakey this week ordered Chairman Heath Tarbert to testify about statements he and his agency made following a $16 million agreement with Kraft Foods Group Inc. and Mondelez Global LLC to settle wheat price-rigging allegations.
Heads of regulatory agencies aren’t typically called upon to testify in court. Lawyers who specialize in CFTC cases called the move by Judge Blakey surreal and unprecedented.
The order, which also requires two other CFTC commissioners to testify at the hearing in Chicago, is an early setback for Mr. Tarbert, who took the helm July 15. The hearing could delve into the agency’s sensitive internal deliberations, and Judge Blakey on Monday raised the possibility he could make a referral for criminal contempt of court. Mr. Tarbert didn’t respond to a request for comment.
The hearing, scheduled for Sept. 12, follows a motion by Kraft and Mondelez alleging that the statements by the CFTC, Mr. Tarbert and the two other commissioners violated an unconventional provision of the settlement. The provision prohibited parties to the settlement from making public comments about the deal, beyond referring to information in public records or the terms of a consent order approved by Judge Blakey.
The clause was unusual because federal regulators often issue press releases following high-profile settlements. Such statements allow regulators to highlight their efforts to deter wrongdoers, explain why an enforcement action is warranted and reinforce policies.
On Aug. 15, a day after the settlement was finalized, the CFTC did just that: It issued a press release announcing the settlement with Kraft and Mondelez, which were one corporate entity when the agency announced its civil charges in 2015.
“America is the breadbasket of the world; wheat markets are its heart,” Mr. Tarbert said in the release. “Market manipulation inflicts real pain on farmers by denying them the fair value of their hard work and crops.”
The commission and its two Democratic commissioners, Rostin Behnam and Dan Berkovitz, also released separate statements touting the settlement and noting the restriction on public statements. The statement from Messrs. Behnam and Berkovitz took particular issue with the provision but said it didn’t restrict them from speaking individually about the settlement.
The press release and statements prompted Kraft and Mondelez to accuse the CFTC of violating the terms of the settlement. The companies have asked Judge Blakey to impose a monetary penalty on the agency.
CFTC lawyers argue that the statements didn’t violate the provision because they largely summarized information already in the public record. And individual commissioners can’t be prohibited from issuing their own opinions as a matter of law, they say. Nonetheless, the CFTC agreed Monday to temporarily remove the three statements from its website.
At a hearing Monday, Judge Blakey ordered Messrs. Tarbert, Behnam and Berkovitz to appear in court to answer questions about the statements. Lawyers for the CFTC, including its enforcement division director, and counsel for Kraft and Mondelez also are expected to testify.
Messrs. Behnam and Berkovitz didn’t respond to requests for comment left with their offices at the CFTC. A lawyer for Kraft and Mondelez also didn’t respond to a request for comment.
The legal protections enjoyed by the CFTC could make it difficult for the judge, or for Kraft and Mondelez lawyers, to question the commissioners closely about internal decision-making at the regulator.
But a decision by the court that the agency had violated the settlement would be a bad outcome for the agency and its chairman, said Matt Kluchenek, a lawyer specializing in CFTC cases at Mayer Brown LLP.
The CFTC is concerned about its reputation and maintaining confidentiality, Mr. Kluchenek said. “If the court disagrees” with the agency’s arguments, he said, “it’s embarrassing, frankly, for all concerned.”
Agreements negotiated by the CFTC also normally include a detailed summary of factual and legal findings explaining how a company violated a particular law. Those findings, which typically appear in a settlement agreement, provide guidance to the public about the agency’s interpretation of its laws.
The CFTC’s settlement with Kraft and Mondelez didn’t include such a summary, which was another anomaly of the agreement, said Elizabeth Davis, a former CFTC lawyer who now works at Murphy & McGonigle PC.
The civil complaint filed against Kraft and Mondelez was based in part on an anti-manipulation statute in the Dodd-Frank Act, a 2010 law designed to boost regulation of the financial sector after the 2008 economic crisis. Other companies had been looking to the case for guidance on the anti-manipulation statute, Ms. Davis said.
”The fact that the settlement happened without legal conclusions means those questions are unanswered,” she said.
The change, which affects about 47 million accounts, including those for Chase’s popular Sapphire cards, reflects a broader effort by Wall Street firms to prevent customers and employees from engaging in class-action lawsuits that can result in large settlements and bad publicity. Unlike court cases, arbitration cases do not leave a trail of public documents and they cannot be brought by groups of aggrieved customers.
JPMorgan — the country’s largest bank — is far from alone in increasing the use of arbitration clauses. Seventy-two percent of banks used such clauses in 2016, up from 59 percent in 2013, according to a report from the Pew Charitable Trusts.
The notifications said the arbitration agreement would apply not just to the customers’ current accounts but “all claims or disputes between you and us,” including “any prior account.”
The policy change turns back the clock in another way by bringing back the kind of arbitration clauses the bank and others agreed to temporarily drop in 2009 as part of a class-action lawsuit. The bank agreed to remove such provisions for three and a half years, starting in 2010, to settle a lawsuit that alleged large banks were working together to push customers into arbitration.
Nondisclosure agreements are routinely employed in the business world, but experts say that there is little comprehensive data on how they are used by Presidential campaigns. Hillary Clinton’s 2016 campaign reportedly required paid staff to sign such agreements, but Trump’s campaign seemed to use the agreements more widely, and even required unpaid volunteers to sign them. The practice has carried over to the Trump White House. The Washington Post reported last year that dozens of White House aides had signed N.D.A.s, a break in tradition from previous Administrations, which used the contracts more sparingly. White House interns have also reportedly been asked to sign the agreements as part of their mandatory “ethics training.”
Two former Trump advisers who had senior roles in the campaign said that workers were pressured into signing such agreements. Internal e-mails received by one of the former advisers repeatedly insist that “we must have that NDA.” The second adviser told me that Corey Lewandowski, the campaign manager, “was tasked by Mr. Trump to insure that anyone and everyone working with the campaign, whether salaried employee, volunteer, surrogate, or otherwise, execute a nondisclosure agreement or they would be terminated immediately. They strong-armed people to sign.”
The first adviser, who went on to hold a position in the White House, recalled that Stefan Passantino, the deputy White House counsel in charge of overseeing ethics, personally demanded a signature on an N.D.A. “They would not allow me to take the document off campus, would not allow me to e-mail the document to my attorneys. That’s where the red flags started,” the adviser told me. The adviser declined to sign, and felt that the decision had a negative impact on the adviser’s standing in the Administration. (Passantino did not respond to a request for comment.) A third former campaign official called the reports of workers being pressured to sign the agreements exaggerated. He said that staffers who declined to sign were not terminated, and noted that there were “always concerns” within the campaign about the enforceability of the agreements.
Johnson’s lawsuit will almost certainly face intense scrutiny, both because of her claims and because of the nature of the incident at the heart of the lawsuit. The complaint acknowledges that “forcible kissing might appear at first glance to be on the lesser extreme” of misconduct, but it argues that the interaction meets common-law definitions of battery, a legal term referring to harmful or offensive contact.
The lawsuit says that Johnson joined the Trump campaign in January, 2016, as the director of outreach and coalitions in Alabama, and that she held various positions in the ensuing months, eventually working as the administrative field-operations director in Florida. Johnson, who is African-American, asserts in her lawsuit that she was paid “substantially less” than other staff members with similar responsibilities because of her race and gender, and that campaign staffers made comments about race that made her uncomfortable. (One of those staffers disputed Johnson’s account, accusing her of having an “agenda.”) An analysis by the Boston Globe in June, 2016, found that female staffers on the Trump campaign were paid, on average, three-quarters what their male counterparts received.3
The incident in which Johnson said that Trump kissed her occurredduring an event that she had helped organize in Tampa in August, 2016, according to the complaint. In an R.V. before Trump’s speech at the event, the complaint alleges, Trump took Johnson by the hand and leaned in to kiss her; she attempted to turn away, but, she claims, his mouth made contact with the corner of hers.
In her statement, Sarah Sanders said, “This accusation is absurd on its face. This never happened and is directly contradicted by multiple highly credible eyewitness accounts.” The two people who disputed Johnson’s account, Karen Giorno, a staffer, and Pam Bondi, a campaign surrogate, said that they had been close enough that they would likely have witnessed the incident. “I don’t even recall Alva being on the R.V.,” Giorno told me. (Photographs from the rally place Johnson inside the R.V.) Bondi, who said that she travelled with Trump extensively and never witnessed inappropriate behavior, added, “Had it happened, I feel I would have seen it, because I was there the entire time.”
Three of Johnson’s family members—her partner, her mother, and her stepfather—said that she told them about the incident immediately afterward, and recalled that she was in tears. Johnson said that at first she continued to go to work. In October, 2016, the Washington Postreleased audio of Trump saying, “I just start kissing them. It’s like a magnet. Just kiss. I don’t even wait.” At that point, Johnson said, she saw the incident with Trump as part of a pattern. She said that she took several sick days and consulted an attorney, whom she told in a text message that Trump had kissed her. She also spoke with a therapist, whose notes state that “she was having nightmares because of what happened.” The attorney, Adam Horowitz, advised Johnson to notify the campaign that she was resigning. Shortly afterward, the campaign sent Johnson a termination letter.