WTF

Selected Election Results:  There were several elections yesterday but two stand out.  The first is the special election in Ohio for the Congressional seat formerly held by Pat Tiberi, a seat that he won by 37 points in a district that Trump won by 11 points in 2016.  The seat has been held by Republicans for 30 years and though results are still too close to call, it looks like it will stay in Republican hands, at least through this November when the same two candidates will again face off in the general election. Troy Balderson, the Republican candidate is currently leading Danny O’Connor, the Democratic candidate, by .85% or 1754 votes.  Though it is likely that Balderson will be the ultimate victor, the results won’t be certain for a while since 3435 provisional ballots and 5048 absentee ballots have not yet been counted and won’t be counted until August 18 and to the extent that Balderson’s lead goes below .5%, under Ohio law a recount will be required.  Trump tweeted out congratulations to Balderson last night, claiming that his support and his Ohio rally changed the tide of the election, saying that before he showed up Balderson was down 64% to 36% in early voting.  Balderson was down in early voting but only because the early voting was, as usual, dominated by Democrats.  The reality is that the results are a disaster for Republicans, an indication that the much discussed blue wave may really be coming and that the Trump magic no longer works in suburbia or among white women. Moreover,  a Democrat closing most of Trump’s 11% gap in a historically Republican district provides a very strong sign that Republicans in districts where Trump won by far less are in for a bigly amount of trouble.  Republicans know this and are now in panic mode.  They pulled out all stops for this election, significantly outspent the Democratic candidate and went into full nasty mode when merely bragging about the economy and tax cuts didn’t work.  They attacked the middle of the road O’Connor as a pro-immigrant, pro-open borders, anti-wall, anti-INS, pro-Pelosi, pro-tax candidate and still only managed to lead by such a small margin which explains why despite his apparent loss, O’Connor sounded much happier last night than Balderson.  In another notable election, the race for the Republican candidate for Kansas Governor is still too tight to call. Trump’s candidate of choice, Kris Kobach, is running neck and neck with current Governor Jeff Kolyer, a more mainstream Republican. Despite warnings from Republican leadership that a Kobach primary victory could put the Kansas governorship in jeopardy, providing an opening to Democrats in a usually safe Republican state, Trump threw his weight behind Kobach because like Trump, Kobach firmly believes that millions of voters cast fraudulent votes during the 2016 elections.  Kobach served as Trump’s handpicked chair of the commission on voter fraud, the commission that despite Kobach’s best efforts, ultimately found no fraud because there wasn’t any to find.  Trump’s endorsement most certainly helped Kobach but may in the end hurt the party, not that he cares.      

Manafort’s Morass:  Yesterday, Manafort’s one time protégé, long time business associate, and current turncoat, Rick Gates, testified that in 2014 Manafort was so freaked out when he learned how much he owed in taxes that he emailed “WTF” to Gates, directing him to figure out a way to lower the tax liability.  Among other things, they then decided to recharacterize $900,000 in income as non-taxable loan proceeds, a strategy that raised concerns with at least one of their accountants.  Though he did a pretty good job detailing their devious activities, Gates withered under defense counsel cross examination when he was forced to admit that he had funded an extramarital affair with money that he stole from Manafort by inflating expenses.  Defense counsel also seems to be getting a boost from presiding Judge Ellis who among other things questioned Gates’ assertion that Manafort kept a close eye on all financial matters by pointing out that Manafort couldn’t have been on top of everything if he missed the millions that Gates stole from him.  That interjection from Judge Ellis was odd at best and has raised concerns by some observers that the judge’s obvious snark and skepticism could influence jurors. The judge is right about one thing, there are no innocents here,  both Gates and Manafort are sleazy characters; at the end of the day the question for jurors will be which of the two sleazy guys is to be believed.  Also, for the first time, the Manafort-Gates-Trump connection came up during testimony in the context of a series of atypically large loans that Manafort obtained from Federal Savings Bank, a Chicago based institution whose CEO, Stephen Calk, appears to have authorized the loans to Manafort in the hopes of obtaining a high position in the Trump administration.  Gates testified that after Manafort left the Trump team, he prevailed upon Gates, who was still employed by team Trump, to get Calk into the running for the Secretary of the Army position.  Calk never became the Secretary of the Army but he did get invited to the inauguration and was invited onto an economic panel.  Some of the details of his relationship with Manafort and Trump also made it into his subsequent divorce proceedings.  To the extent that they didn’t know already, the jury now knows that Manafort and Gates worked for the Trump campaign.  While most of the focus this week has been on Manafort and Gates, Trump lawyer/fixer Michael Cohen’s problems continue to grow.  Yesterday, the Wall Street Journal reported that Cohen is under investigation for possible tax fraud.  The Journal reports that authorities are also examining Cohen's relationship with Sterling National Bank, the institution that financed his once lucrative taxi medallion business, and looking closely at whether Cohen lied or misrepresented information on loan applications.  When asked for comments, Cohen’s usually loquacious PR lawyer Lanny Davis had nothing to say. On the Roger Stone front, Kristin Davis, the Wall Street madam who met with Mueller’s team last week has been called to testify in front of the Grand Jury.  Apparently she said something notable enough that Mueller wants it repeated under oath.  All of this is twisting Trump in knots. Senator Lindsay Graham who, though he vacillates between being one of Trump’s biggest supporters to being one of his occasional critics, always finds time to join Trump on the links, reports that Trump discussed the possibility of firing Special Counsel Mueller at least twenty times during their weekend golf game.

Other News:  Reports are that sometime soon the Trump administration will issue an executive order that will make it difficult if not impossible for legal immigrants, including green card holders,  to become citizens if they or any member of their immediate family have benefited from one or more social assistance programs. Among others, disqualifying programs are expected to include insurance under the Medicaid expansion part of the Affordable Care Act, food stamps under SNAP and any benefits under the Child Health Insurance Program.  This is just another one of those policy ideas ginned up by Trump aide Stephen Miller who must have been dropped on his head as a baby, the only way to explain his utter disdain for immigrants as well as his lack of understanding of the vital role that immigration has played in this country and how it contributes to the US economic engine.