Homeland Security whistle-blower says he was pressured to alter intelligence on Russia and white supremacists to match Trump preferences


Acting U.S. Secretary of Homeland Security Chad Wolf testifies during a hearing before Senate Homeland Security and Governmental Affairs Committee.


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WASHINGTON (AP) — An official at the Department of Homeland Security said in a whistle-blower complaint released Wednesday that he was pressured by agency leaders to suppress details in his intelligence reports that President Donald Trump might find objectionable, including intelligence on Russian interference in the election and the threat posed by white supremacists.

Brian Murphy says in a whistle-blower complaint filed with the agency’s inspector general that he was demoted for refusing to alter his intelligence reports in an “illegal and improper” manner.

The former FBI agent and Marine Corps veteran had served as principal deputy under secretary in the Office of Intelligence and Analysis.

In August, he was demoted to assistant to the deputy under secretary for DHS Management.

“Mr. Murphy is, put simply, a dedicated public servant who has had a laudable career prior to the recent events that have led to the submission of this package to the OIG,” his complaint states. “Prior to his current circumstances, he had never had so much as a negative fitness report in his professional career with the U.S. Government.”

In his complaint, he alleges that former DHS Secretary Kirstjen Nielsen, current acting Secretary Chad Wolf and his deputy, Ken Cuccinelli, repeatedly pressed him to change intelligence assessments in ways that would support administration policies or avoid offending the president.

In one example, he said Nielsen and her deputies pressed him to exaggerate the number of migrants with links to terrorism who have been detained at the Southwest border. Murphy said she falsely used a higher figure in testimony to Congress.

The complaint says Wolf, who has been nominated to be secretary by Trump, directed Murphy to cease providing intelligence assessments on the threat of Russian interference to the U.S. because it “made the President look bad.” Murphy said he declined because it would be a violation of his duties not to do it.

He said Cuccinelli directed him to modify a section of a report on white supremacy to make the threat appear less severe, and to include information on left-wing groups to echo administration talking points around civil unrest following the protests over the killing of George Floyd.

A copy of the complaint was released Wednesday by Rep. Adam Schiff of the House Intelligence Committee. Schiff says he has asked Murphy to testify to Congress.

DHS did not immediately respond to a request for comment by The Associated Press.



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Millennials to redistribute wealth from older generations to the young in new ‘age of disorder’, warns Deutsche strategist


It probably won’t take a great deal of persuasion to convince investors that there’s an “age of disorder.”

That’s the title of a new Deutsche Bank research note, which says the world is entering its sixth distinct era of modern times.

So say goodbye to the “era of globalisation” and brace yourself for the “age of disorder” where millennials, firmly established as the generation of ‘have nots’, take their revenge and redistribute wealth from the old to young. Millennials are usually defined as those between the ages of 22 and 38 years old in 2019, according to Nielsen Media Research .

The note by strategist Jim Reid warns the discussion of inequality within and between countries will not be limited to wealth and income.

“In fact, an issue that is quickly emerging as a political force is the intergenerational gap,” the report says. “Assuming life does not become more economically favourable for Millennials as they age (many find house prices increasingly out of reach), this could be a potential turning point for society and start to change election results and thus change policy.”

Read: Millennials’ shifting tastes are boosting sales of whiskey and tequila

The votes for Brexit in the U.K. and President Donald Trump in the U.S. in 2016 left many younger people feeling angry and alienated by political decisions that a sizable majority of them were against, the report says.

This could see the revenge of the millennials as they take more control and skew policies to redistribute wealth away from older generations to the young.

“Such a shift in the balance of power could include a harsher inheritance tax regime, less income protection for pensioners, more property taxes, along with greater income and corporates taxes . . . and all-round more redistributive policies”, the Deutsche Bank report said.

The ‘new’ generation might also be more tolerant of inflation insofar as it will erode the debt burden they are inheriting and put the pain on bond holders which tend to have a bias towards the pensioner generation and the more wealthy.

“The older generation may also have to be content with lower (or even negative) asset price growth if the younger generation does not have a sudden income boost. This will be a big break from the status quo and lead to far more disorder than in the prior era of globalisation.”

Read: Gen Z, Millennial Investors Embrace Risk Amid Covid: E*Trade

The report suggests 2020 may be the start of a new era, as the coronavirus pandemic brings the era of globalization since 1980 to a close.

“The era of globalisation to we are likely waving goodbye saw the best combined asset price growth of any era in history, with equity and bond returns very strong across the board. The Age of Disorder threatens the current high global valuations, especially in real terms,” said the report.

What will this new age bring?
• Deteriorating US/China relations and the reversal of unfettered
globalisation.
• A make-or-break decade for Europe, with muddle-through less likely
following the economic shock of COVID-19.
• Even higher debt.
• Inflation or deflation? As a minimum, it is unlikely it will calibrate as easily as we saw over the last few decades.
• Inequality worsening before a backlash and reversal takes place.
• The intergenerational divide also widening before millennials and younger voters soon start having the numbers to win elections and, in turn, reverse decades of policy.
• Linked to the above, the climate debate will build, with more voters
sympathetic and thus creating disorder.

We’re in the midst of a technology revolution with astonishing equity valuations reflecting expectations for a serious disruption to the status quo, the report says, questioning whether this is a revolution or bubble?
Much depends on whether working from home becomes more permanent, and if so it predicts it will cause major changes to societies and economies.

Tesla
TSLA,
-21.06%
,
Amazon
AMZN,
-4.39%

and Facebook
FB,
-4.09%

are all companies that have seen their valuations soar in recent times on Nasdaq
COMP,
-4.11%
.

Read: Opinion: China’s economy may be back on track, but problems plague it elsewhere

The most worrying prediction is an economic battle between the U.S. and China.

“The result of the US election in November is unlikely to change the direction of travel,” the report says. “Over the course of this decade, relations will likely deteriorate into a bipolar standoff as both the US and China seek to prevent encirclement by the other. Companies that have embraced globalisation will be stuck in the middle if relations sour as we fear.”

There have been 16 occasions over the last 500 years, when a rising power has challenged the ruling one, and on 12 occasions it ended with war. One piece of solace is the report notes that military conflict is unlikely.

Watch: Donald Trump suggests ‘decoupling’ US economy from China



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Trump is following the playbook of other antidemocratic strongmen— here’s how to stop him


BERLIN (Project Syndicate)—With November approaching, I am becoming ever more nervous about the U.S. presidential election. While my American friends focus on Joe Biden’s lead over President Donald Trump in opinion polls, believing deeply in U.S. democracy’s capacity for self-renewal, my own perspective as a British citizen and think-tank director has me worried.

As a Briton, I can remember watching a 20-point polling lead for “Remain” become a victory for “Leave” in the Brexit referendum four years ago. And as a think-tank director, I work closely with scholars who study how authoritarian leaders manipulate democratic systems to stay in power, as has happened in Turkey, Russia, Hungary, and Poland.


Like other authoritarian leaders, Trump is deploying a new antidemocratic politics that has yet to be fully comprehended.

In fact, it often seems as though Trump has studied the tactics pioneered by other aspiring strongmen more closely than anyone. Based on recent conversations with experts on each of these countries, I have compiled the following catalogue of dirty tricks that Trump seems to borrowing.

Weaponization of history

The first is the weaponization of history. Populist leaders promote their political platforms through polarization and social division. They do not mind alienating and insulting some voters if doing so will energize their own base. By posturing as the champions of national greatness, they want to determine who counts as authentic citizens and who does not. This practice inevitably brings history to the fore.

Whether it is Russian President Vladimir Putin invoking the Soviet victory in World War II, Turkish President Recep Tayyip Erdoğan harking back to the Ottoman Empire, Hungarian Prime Minister Viktor Orbán fixating on the Treaty of Trianon, or British Prime Minister Boris Johnson looking back to Pax Britannica, each leader has advanced a highly partisan historical narrative.

Post-truth politics

Another, related approach is what might be called post-truth politics. These leaders prefer direct communication with voters through professional propaganda videos and social media, because this allows them to dismiss inconvenient facts offered by experts.

In this media ecosystem, fact-checking has little purchase, because the people who need to hear it are not listening, or refuse to believe anything the “liberal” media says. In many democracies, fake news is now most common at the local level, where political operatives have filled the vacuum left by the decline of traditional city and regional outlets.

Run against the Deep State

A third tactic is to run against one’s own government. The term “deep state” is said to have originated in Turkey in the 1990s, but now features prominently in the lexicon for Trump, Orbán, Erdoğan, Johnson, and Poland’s de facto ruler, Jarosław Kaczyński. By blaming nameless shadowy, faceless characters behind the curtain and shadowy cabals, all these leaders have a ready excuse for all of their own failures.


It often seems as though Trump has studied the tactics pioneered by other aspiring strongmen more closely than anyone.

A fourth element in the playbook is voter suppression. Like Erdoğan’s constant attempts to disempower Kurdish voters, Trump and the Republican Party are desperate to disenfranchise African-Americans. For an incumbent would-be strongman, the need to tip the electoral scales opens the door to all kinds of attacks on democratic processes.

Hence, before Poland’s general election in May, the ruling Law and Justice (PiS) party tried to limit all voting to mail-in ballots, effectively transferring control of the election from the independent National Electoral Commission to the PiS-controlled postal service. Though this plan ultimately ran into resistance, it showed that there are countless ways for authoritarians to meddle in or subvert the process.

Not surprisingly, mail-in voting and the politicization of the U.S. Postal Service have become major issues in the election, too.

Dirty tricks

Another related device is “political technology,” a term for the dirty tricks commonly associated with post-Soviet politics. Such methods include Russia’s covert backing of third-party candidates like Jill Stein in the 2016 U.S. presidential election; Kompromat, or compromising material (epitomized by the search for dirt on Biden in Ukraine); and simply declaring victory before the votes are counted.

In the case of the United States, if Trump declares victory before all postal mail-in ballots have arrived, Republican-controlled legislatures in key states could end the counting early to lock in that outcome.

An incumbent authoritarian can also engage in various forms of “lawfare,” using law enforcement or compliant courts to facilitate gerrymandering, voter suppression, coverups, and other violations of the democratic process.

Here, one of the biggest advantages is the ability to control the timing of events or the release of politically damaging information.

Many people still believe that then-FBI Director James Comey’s announcement of a new probe into Hillary Clinton just days before the 2016 election tipped the outcome in Trump’s favor. Now, the Department of Justice is run by Attorney General William Barr, a man who has shown no compunction about politicizing independent law-enforcement agencies on Trump’s behalf.

Law and order

Another common authoritarian tactic is to play the “law-and-order” card. By tarring the Black Lives Matter protests as an outpouring of violent “urban” hooliganism, Trump is reprising the racial politics used by former Republican presidents since Richard Nixon, but by Erdoğan more recently, during the Gezi Park protests in 2013.

The problem for the Democrats in the U.S., and democrats everywhere, is that all these techniques tend to become more effective the more they are called out.

Fact-checking fake news can inadvertently spread misinformation more widely. Warnings about voter suppression can become self-fulfilling prophecies if enough people conclude that the process is rigged and not worth participating in. Challenging violations through the courts creates the impression of an end run around democracy.

To avoid these effects, the project of corrupting democracy needs to be clearly identified, named, and analyzed through a new lens.

There is a world of difference between the political subterfuge outlined above and the outright falsification of election results, as happened last month in in Belarus. Nicu Popescu, a former Moldovan foreign minister who is now at the European Council on Foreign Relations, contends that autocracy is not the right term to describe the phenomenon. Rather, “it is the “degradation, corrosion, and deconsolidation of democracy.”

In any case, if Trump were Moldova’s president, one assumes that the European Union would be calling him out for his dirty tricks. Any such criticism from abroad would almost certainly be counterproductive. But it may help to put the current American experience in a wider context, so that democratic forces can see Trump more clearly.

Ultimately, the only way to defeat Trump is through politics. The task for the Democrats is to remind Americans what democracy is for—and, one hopes, to counter Trump’s tactics effectively.

Mark Leonard is director of the European Council on Foreign Relations.

This article was published with permission of Project SyndicateTrump’s Dirty Tricks.



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The Trump administration wants to discourage your 401(k) from including ESG investment options


Two proposed rulemakings from the Labor Department in the past eight weeks would largely gut sustainable investing options and strategies in retirement plans. These proposals would reverse the Labor Department’s 2015 and 2016 guidance while ignoring the growing consensus among academics, retirement plan fiduciaries and professional money managers that responsible companies are likely to outperform over the long haul.

The first measure, “Financial Factors in Selecting Plan Investments,” now in the late stages of the approval process, would discourage 401(k) and other qualified retirement plans from offering funds from managers that consider environmental, social and governance (ESG) factors in their due diligence.

The proposal establishes burdensome requirements for analysis and documentation around inclusion of ESG options. The Labor Department currently has no such requirements for any other kinds of funds.

Support for the measure has been decidedly underwhelming. A group of investor organizations and financial firms analyzed the more than 8,700 public comments on the proposed rule and found that only 4% of comments expressed support. Some 95% of the comments — across individuals, investment-related groups and non-investment-related groups — were strongly opposed, and 1% expressed neutral views or didn’t clearly express support or opposition.

The 30-day public comment period ended on July 30 and the Labor Department is likely to implement the proposal before the end of the year.

The second proposal, “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights,” which was announced at the end of August, would restrict the ability of retirement plans to hold company leadership accountable through proxy voting. It alleges that proxy measures are onerous for public companies.

A fundamental misunderstanding

The reasoning betrays a fundamental misunderstanding of how financial professionals consider ESG criteria in their investments and how proxy voting practices enhance long-term value of investments. Because of inconsistent corporate disclosure rules, investors often file proxy proposals to receive relevant ESG information.

Both proposals represent a solution in search of a problem. They imply that investment managers and plan fiduciaries promote social goals over sound investment analysis, but proponents fail to cite a single instance that this has happened or any related enforcement actions they have taken.

Moreover, the agency doesn’t acknowledge any of the dozens of studies that demonstrate that consideration of ESG issues may lead to better investment outcomes. Morningstar found that during the stock collapse in the first quarter of 2020, all but two of 26 ESG indexes suffered fewer losses than their conventional counterparts. Studies of longer periods from Morgan Stanley and MSCI have found no financial trade-off in the returns delivered by ESG funds relative to traditional funds. Additionally, a 2018 report from the Government Accountability Office (GAO) reported that 88% of the academic studies it reviewed found a neutral or positive relationship between the use of ESG information and financial performance.

Setting aside the academic debates over ESG, the market has already spoken. As of 2018, more than one of every four dollars under professional management was invested using ESG criteria, according to the US SIF Foundation’s 2018 Report on U.S. Sustainable, Responsible and Impact Investing Trends. Morningstar has reported that in 2020, flows into sustainable funds outpaced traditional funds.

Read:Sustainable-investing flows have smashed records in 2020. What’s going on?

Far from making a concession to ESG, professional money managers increasingly analyze ESG factors precisely because of risk, return and fiduciary considerations. They know that bad policies and practices can harm companies’ reputations, affect consumers and lead to stock-price declines. Climate change is widely recognized as an environmental and financial risk for companies. Similarly, companies that fail to promote racial equity face real and meaningful challenges.

Investors are coming to recognize that companies with better policies and practices and more robust corporate governance will outperform over the long term. A 2018 US SIF Foundation survey of U.S. sustainable investment money managers with aggregated assets of more than $4 trillion found that three-quarters of the respondents employ ESG criteria to improve returns and minimize risk over time, and 58% cited their fiduciary duty as a motivation.


In 2020, flows into sustainable funds outpaced those into traditional funds.

The Labor Department’s proposals would largely supplant an existing regulatory regime that was already working. In 2015 and 2016, President Obama’s Labor Department carefully considered these issues and issued Interpretive Bulletins clarifying that fiduciaries of ERISA-governed retirement plans “do not need to treat commercially reasonable investments as inherently suspect or in need of special scrutiny merely because they take into consideration environmental, social, or other such factors.” The second Interpretive Bulletin recognized that shareholder rights, including voting proxies, are important to long-term shareholder value and consistent with fiduciary duty.

These new proposals are not taking place in a vacuum. They are part of the Trump administration’s broader effort to generate barriers to investment practices that have a focus on environmental, social or governance issues. The Securities and Exchange Commission is currently seeking to create its own barriers on this topic, including the role of proxy voting firms, fund names and shareholder rights.

By tipping the scales against consideration of ESG criteria when selecting investments and against the use of proxies to encourage better governance and better disclosure, the Labor Department proposals prevent plan sponsors from fulfilling their fiduciary obligation. It should retain current practices related to the utilization of ESG criteria and proxy voting.

Lisa Woll is CEO of US SIF: The Forum for Sustainable and Responsible Investment. Follow her @LisaWoll_USSIF. Judy Mares is former deputy assistant secretary in the Labor Department.





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Trump administration weighs blacklisting China’s chipmaker SMIC By Reuters


© Reuters.

By Idrees Ali, Alexandra Alper and Karen Freifeld

WASHINGTON (Reuters) – The Trump administration is considering whether to add China’s top chipmaker SMIC to a trade blacklist, a Defense Department official said, as the United States escalates its crackdown on Chinese companies. A Pentagon spokeswoman said the Defense Department was working with other agencies to determine whether to make the move against Semiconductor Manufacturing International Corporation (HK:), which would force U.S. suppliers to seek a difficult-to-obtain license before shipping to the company.

SMIC said in a statement on Saturday it was “in complete shock” over the news but was open to communication with U.S. government agencies in hopes of resolving any misunderstandings. The Chinese Embassy in Washington did not respond to requests for comment.

Earlier this week, the Pentagon made a proposal to place SMIC on the entity list to the End User Committee, a panel led by the Commerce Department that also includes the State and Energy Departments and makes decisions about entity listings, a person familiar with the matter said. It was not clear whether the other agencies supported the plan.

The Trump administration has often used the entity list – which now includes more than 275 China-based firms – to hit key Chinese industries, from telecoms equipment giants Huawei Technologies [HWT.UL] and ZTE (SZ:) over sanction violations, to surveillance camera maker Hikvision (SZ:) over suppression of China’s Uighur minority.

SMIC is the largest Chinese chip manufacturer but is second-tier to rival Taiwan Semiconductor Manufacturing Co Ltd (TW:), the industry’s market leader. It has sought to build out foundries for the manufacture of computer chips that can compete with TSMC.

But it is also facing new restrictions from Commerce that require Huawei’s chip manufacturers to seek U.S. licenses before producing chips for the telecoms giant, if they rely on U.S. chipmaking technology. SMIC is one of Huawei’s manufacturers.

U.S. companies including Lam Research (O:), KLA Corp (O:) and Applied Materials (O:), which supply key chipmaking equipment, could be impacted by a potential entity listing, industry sources said.

While the Pentagon official did not outline the reasons for the action, SMIC’s relationship to the Chinese military is under scrutiny, another U.S. official and two former officials briefed on the matter said.

In Saturday’s statement, SMIC said it had no ties to the Chinese military.

The administration has increasingly trained its focus on Chinese companies that bolster Beijing’s military. Last month, the United States blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military actions in the South China Sea, its first such sanctions against Beijing over the disputed strategic waterway.

The Defense Department has released two lists of Chinese companies in the past few months that it claims are owned or controlled by the People’s Liberation Army. The designation gives President Donald Trump the authority to place them on an even tougher blacklist but so far no action has been taken.

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