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Trump, Inc.

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He’s the President, yet we’re still trying to answer basic questions about how his business works: What deals are happening, who they’re happening with, and if the President and his family are keeping their promise to separate the Trump Organization from the Trump White House. “Trump, Inc.” is a joint reporting project from WNYC Studios and ProPublica that digs deep into these questions. We’ll be layout out what we know, what we don’t and how you can help us fill in the gaps.
WNYC Studios is a listener-supported producer of other leading podcasts, including On the Media, Radiolab, Death, Sex & Money, Here’s the Thing with Alec Baldwin, Nancy and many others. ProPublica is a non-profit investigative newsroom.
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54 Episodes
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The impeachment inquiry focuses on whether or not there was a quid pro quo: Military aid in exchange for an investigation. But what if you look at the same events from a different vantage point? The business interests at play.This episode: How Rudy Giuliani's associates worked their connections to oust the U.S. Ambassador in Ukraine. How President Trump's personal interests came into alignment with the interests of an indicted foreign businessman. And how all of them have been working to discredit Joe Biden.Read more about the flow of money in the Ukraine scandal. Stay up to date with email updates about WNYC and ProPublica's investigations into the president's business practices.
All The President’s Memes

All The President’s Memes

2019-10-3000:31:267

President Trump's Doral resort has been in the news a lot lately. His chief of staff announced from the White House that America would host the next G-7 summit there. Then, Trump backed off. We're looking at a conference that did happen at Doral. A conference that attracted conspiracy theorists, where a violent video featuring a fake Trump massacring members of the media was shown. (The conference organizers say they "condemn political violence.")Trump, Inc. was there.So was the President’s son, Donald Trump, Jr.This week: The business of conspiracies.Read more about who makes money when a bunch of conspiracy theorists throw a party at Trump's hotel. Stay up to date with email updates about WNYC and ProPublica's investigations into the president's business practices.
The Numbers Don't Match

The Numbers Don't Match

2019-10-1600:31:4813

Donald Trump’s former campaign chairman, Paul Manafort, is serving prison time for understating his income to the IRS, and for overstating his income to banks. Trump's former executive vice president and special counsel, Michael Cohen, is also serving prison time, for, among other things, making false statements to a bank. And Donald Trump? A lot of people want to see his taxes: At least two congressional committees. The Manhattan District Attorney. Trump doesn’t want ANYONE to see them. He’s gone to court three times to make sure they stay secret. The court fight is ongoing. Trump's tax documents remain walled off.Heather Vogell of ProPublica found some anyway. She compared them to financial documents Trump filed with his lender — and discovered that certain key numbers don't match. Heather spoke with over a dozen experts in accounting, law, and real estate. Not a single one of them could explain the discrepancies away.
Ukraine

Ukraine

2019-10-0200:34:0420

In the past two weeks, we've heard a lot about efforts by President Donald Trump and his lawyer, Rudy Giuliani, to push officials in Ukraine to investigate Trump's opponents. As the news has unfolded, it has introduced us to a litany of unfamiliar characters in both Ukraine and the U.S., many of whom were working with Giuliani or, in some fashion, on behalf of the president.Trump, Inc. co-host Ilya Marritz was in Kiev last week following the trail of Giuliani in an effort to understand more about these obscure figures who have suddenly become so important. One thing that became clear during his travels: Giuliani's "anti-corruption" efforts involved working with men who have their own questionable histories. We reached out to Giuliani as well as the White House. We have not heard back. Here is a rundown of key players in Giuliani's efforts. The Former Prosecutor Fired for Not Going After Corruption…Viktor Shokin was Ukraine's general prosecutor in 2015, a position akin to attorney general. He was responsible for investigating corruption. But according to U.S. officials, NGOs and the International Monetary Fund, he was not actually doing this. Giuliani has claimed that then-Vice President Joe Biden improperly pushed for Shokin's removal to avoid an investigation into Biden's son Hunter, who was on the board of a Ukrainian energy company. There is no evidence that is true. According to the now-famous whistleblower's report, Shokin spoke with Giuliani over Skype late last year in a call arranged by two Giuliani associates. (More on them in a moment.) In response to our questions, Shokin declined comment, explaining that he’s out of the country.The Former Prosecutor Who Was Not a Lawyer… Yuriy Lutsenko took over the job of prosecutor general from Shokin in 2016. He got the job after allies in Parliament changed the law to allow the position to be filled by someone without a law degree. Lutsenko has no legal training. Lutsenko once told a reporter that the U.S. ambassador had given him "a list of people whom we should not prosecute." He later acknowledged that he was the one who asked for such a list. Lutsenko has said he's spoken with Giuliani "maybe 10 times." In the middle of one meeting in New York last January in which Giuliani and Lutsenko talked about investigating the Bidens, Giuliani reportedly called Trump to loop him in.  In the spring, Lutsenko told a reporter he "would be happy to have a conversation" about Hunter Biden with Attorney General William Barr. Then, last week, he told the Los Angeles Times that he hadn't found any evidence against the Bidens, and said he had told Giuliani that any investigation should be conducted "through prosecutors, not through presidents."In response to our questions, Lutsenko denied any wrongdoing. He was fired earlier this year. The Current Prosecutor Caught on Tape…Nazar Kholodnytsky is now Ukraine's top anti-corruption prosecutor. Audio tapes captured Kholodnytsky in unrelated cases coaching a witness to give false testimony and tipping off suspects to police raids. Kholodnytsky acknowledged the tapes were authentic, but said they were taken out of context. Earlier this year, the U.S.’s then-ambassador to Ukraine called for Kholodnytsky’s firing. She explained, "Nobody who has been recorded coaching suspects on how to avoid corruption charges can be trusted to prosecute those very same cases." (The ambassador, Marie Yovanovitch, was removed from her position shortly after.) Kholodnytsky and Giuliani met in Paris in May 2019. Kholodnytsky told The Washington Post the discussion was private, "prosecutor to a former prosecutor." Kholodnytsky told the Post that he had questions about the Bidens as well as the prosecution of former Trump campaign chair Paul Manafort.When the Post asked Giuliani about the meeting, he said, "I'm not going to tell you about that."Kholodnytsky told us he was too busy to answer our questions.Giuliani’s Special Envoys… Lev Parnas and Igor Fruman are two Ukrainian-American businessmen who have worked with Giuliani and introduced him to the Ukrainian prosecutors. Giuliani has described them as his clients. They went to Ukraine after Giuliani canceled a trip in the wake of a New York Times article that revealed his travel plans.  In a detailed story about their work with Giuliani, Parnas told Buzzfeed they did nothing wrong. "All we were doing was passing along information," Parnas said. He added, "We’re American citizens, we love our country, we love our president."Parnas was sued for allegedly defrauding investors in a movie he was involved with, "Anatomy of an Assassin." "He conned us from day one," one of the investors told the Miami Herald, adding, "He financially ruined us." Parnas lost the case but has denied wrongdoing. "The truth is going to come out about that judgment," he has said. Fruman is well-connected in Ukraine, where he owns a number of businesses, including Mafia Rave, a beach club in Odessa. Fruman and Parnas have been political contributors in the U.S. Last year, they set up a Delaware LLC that weeks later contributed $325,000 to a Trump-allied political group. Giuliani was subpoenaed by Congress this week regarding his communications with Parnas and Fruman. Parnas and Fruman did not respond to our requests for comment.
In August, at a campaign rally in Manchester, New Hampshire, a tall man with a Viking beard and an elegant gray suit walked out on a stage, carrying a stack of red Make America Great Again hats, tossing them to an adoring crowd, shouting "Four more years!"The man is Trump's campaign manager, Brad Parscale, who vaulted from a mid-level web designer to digital strategist for the 2016 Trump campaign and now manages the 2020 incarnation, Donald J. Trump for President Inc., which he claims will be America's first billion-dollar campaign. And as he's been doing this, Parscale has figured out ways to enrich himself and his firms, at various times collecting a salary from the Trump campaign, payments from the Republican National Committee and money from a super PAC, America First Action.Like Trump, Parscale is a man who's reinvented himself, from working for a family company that declared bankruptcy to being a middling businessman, to becoming a high-profile avatar for Donald Trump. ProPublica's Peter Elkind joined Trump, Inc. to talk about his in-depth profile of Parscale in ProPublica and the political juggernaut Parscale is assembling to re-elect the President.Here's what Elkind says about Parscale and the stories he tells about himself: "He changes dates. He rearranges facts. He omits conspicuous events. He basically rewrites his own life story to become a more romantic tale, to fit into the image that he's trying to convey. He is a promoter, he's a hustler, he's a marketer." In short, Brad Parscale is a lot like his boss. To find out more, listen to the episode.
The Family Business

The Family Business

2019-09-1800:35:1313

The Trump, Inc. podcast from WNYC and ProPublica is back. And we'll be bringing you new episodes every two weeks. When we started all the way back in early 2018, we laid out how we'd be digging into the mysteries around President Donald Trump's business. After all, by keeping ownership of that business, Trump has had dueling interests: the country and his pocketbook. We've done dozens of episodes over the past 18 months, detailing how predatory lenders are paying the president, how Trump has profited from his own inauguration and how Trump's friends have sought to use their access in pursuit of profit. We've noticed something along the way. It's not just that the president has mixed his business and governing. It's that the way Trump does business is spreading across the government. Trump's company isn't like most big businesses. It is accountable to only one man, it has broken the rules, and those promoting it have long engaged in what Trump has dubbed, ahem, "truthful hyperbole."Those traits are now popping up in the government. It may seem like the news from Washington is a cacophony of scandals. But they fit clear patterns — patterns that Trump has brought with him from his business.  
Perhaps you’ve heard: Special counsel Robert Mueller testified on Wednesday. There’s plenty of analysis about who won and who didn’t. We’re skipping that part. Instead, on a special, speedy episode of Trump, Inc. we’re focusing on the few tidbits that were actually revealing and how it came to be that there weren’t more. ProPublica’s Jesse Eisinger and Heather Vogell talk with WNYC’s Andrea Bernstein about the many things we didn’t learn and why. They discuss potential mistakes during the investigation, avenues Mueller didn’t explore and witnesses — like the president — he decided not to try to question in person.Mueller’s testimony is over. His report is done. And his office is closed. But there are plenty of critical yet unanswered questions remaining. And we’re still digging. Listen to the episode to hear what we still want to know.
Over the past two years, the Trump administration has been grappling with how to handle the transition to the next generation of mobile broadband technology. With spending expected to run into hundreds of billions of dollars, the administration views it as an ultra-high-stakes competition between U.S. and Chinese companies, with enormous implications both for technology and for national security. Top officials from a raft of departments have been meeting to hash out the best approach. But there’s been one person at some of the discussions who has a different background: He’s Donald Trump Jr.’s hunting buddy. Over the past two decades, the two have trained their sights on duck, pheasant and white-tailed deer on multiple continents. (An email from another Trump Jr. pal characterized one of their joint duck-hunting trips to Mexico years ago as “muy aggresivo.”) Tommy Hicks Jr., 41, isn’t a government official; he’s a wealthy private investor. And he has been a part of discussions related to China and technology with top officials from the Treasury Department, National Security Council, Commerce Department and others, according to emails and documents obtained by ProPublica. In one email, Hicks refers to a meeting at “Langley,” an apparent reference to the CIA’s headquarters.  Hicks’ financial interests, if any, in the matters he has discussed aren’t clear. The interests are much more apparent when it comes to at least one of his associates. Hicks used his connections to arrange for a hedge fund manager friend, Kyle Bass — who has  $143 million in investments that will pay off if China’s economy tanks — to present his views on the Chinese economy to high-level government officials at an interagency meeting at the Treasury Department, according to the documents.Hicks is hardly the first private-sector power broker to emerge in a presidential administration, but he may represent a new subspecies: The Friend of the President’s Kid.In fact, Hicks’ influence and career overwhelmingly hinge on two people: Trump Jr., his friend of about two decades, and, first and foremost, Hicks’ father. In a roughly 20-year career, Hicks has spent 17 of them working for investment funds and sports teams owned by his wealthy financier dad, Thomas Hicks Sr., and the other three working for a client of his father.The generally privileged life of the younger Hicks has been speckled with occasional instances of misbehavior, one of them serious. At age 18, he pleaded no contest to misdemeanor assault, reduced from an original charge of felony aggravated assault, after he and two others were arrested in the beating of a fellow high school student at a party. (The victim was also kicked in the face during the assault, according to people familiar with the case. He told police that one of the three assailants — he didn’t say which — asked him, “What is your name, faggot?”) The criminal conviction did not prevent Hicks from being admitted to the University of Texas, where his father was an alumnus, a member of the Board of Regents and soon thereafter the first chairman of the University of Texas Investment Management Company, which manages the school’s endowment and other assets.As an adult, friends say, Hicks’ carousing ways and occasional belligerent outbursts led some in his circle to bestow a heavily ironic nickname: “Senator Hicks.” His tenure as a director of the soccer team his father owned in Liverpool, England, a decade ago ended right after an email he sent to a heckling fan — “Blow me fuckface. Go to Hell. I’m sick of you.” — surfaced publicly.Friends say Hicks has matured, particularly since he married and had three daughters. He has risen quickly in recent years. Hicks leveraged his Dallas financial network to become a top Trump campaign fundraiser in 2016 and a vice chairman of the inaugural finance committee; in January, he was named co-chairman of the Republican National Committee. His friends say he is motivated by patriotism. Hicks also played a behind-the-scenes role, according to two people familiar with the matter and an account by a Turkish journalist, in the freeing last year of Andrew Brunson, an American pastor who was detained for two years by the Turkish government on what the U.S. government viewed as phony charges of spying and helping terrorists.Even before becoming the second highest-ranking GOP official, Hicks was a frequent White House guest. He liked to have lunch in the White House mess with his half sister, who worked for a time in the communications operation. (The family is not related to Hope Hicks, the former White House communications director.) Hicks would then stroll the halls, according to a former senior administration official, dropping in to offices for impromptu chats with various officials, including Jared Kushner.Those sorts of connections have given Hicks a convening power, the ability to call together multiple officials. “He basically opened the door for having a conversation with people who I didn’t know but needed to know,” said Robert Spalding, a former senior director for strategic planning at the National Security Council during the Trump administration. The efforts, detailed in hundreds of pages of government emails and other documents obtained under the Freedom of Information Act, show that Hicks had access to the highest levels of government to influence policymaking in ways that could lead to painful economic outcomes for the Chinese — and a potentially lucrative result for Hicks’ hedge fund friend, Bass.“When somebody comes in like this, a hedge fund manager who has an interest in the viability of China’s economy, you’re giving them an opportunity to influence policy,” said Virginia Canter, a former ethics lawyer at the Treasury Department who now serves as chief ethics counsel for Citizens for Responsibility and Ethics in Washington, a watchdog group. (CREW has sued Donald Trump for accepting emoluments from foreign governments.) “The question is why?” Hicks’ unusual role as a nongovernment employee who opened doors on behalf of both industry and others, Canter said, put him in a gray zone of ethics and lobbying regulations. “He’s acting in a lobbyist role when he may fall outside the lobbyist disclosure rules, and it’s not clear how he benefits financially,” she said. “So the question is: What’s he getting out of it? What are his friends getting out of it? And is the government processing it in a way that ensures the public benefits?”Bass presented his views on China’s banking system in the office of Heath Tarbert, an assistant secretary at Treasury in charge of international markets and investment policy and a powerful intergovernmental committee that reviews foreign investments in the U.S. for national security concerns. Among the officials at the meeting with Tarbert were Bill Hinman, the director of the division of corporation finance at the Securities and Exchange Commission, and Ray Washburne, a wealthy Dallas restaurant owner and family friend of Hicks’ who was nominated by Trump to head the Overseas Private Investment Corporation.Hicks and Bass, both Dallas residents and longtime denizens of the financial community there, have invested together since at least 2011, according to securities filings and court records. They’ve owned shares of a publicly traded communications-technology manufacturer. And they were among the biggest creditors to the bankrupt law enforcement contracting company run by Chris Kyle, the ex-Navy SEAL portrayed by Bradley Cooper in “American Sniper.” The managing director of a new investment fund started by Hicks had previously advised Bass on the successful stock-shorting of a Texas real estate lender, according to corporate filings and court papers from a lawsuit in state court in Dallas.But it’s not clear if Hicks or his family have an investment in Bass’ China-related funds. Reached twice on his cellphone, Hicks declined to be interviewed by ProPublica. In the second call, in June, Hicks didn’t dispute that he and his family have invested in Bass’ funds. But when asked to detail their business relationship, he cut the conversation short. “I’ve got to run. Let me see if I can get back to you,” Hicks said before hanging up. He didn’t call back.Weeks later, after ProPublica followed up with questions to the RNC, a spokesman responded by emailing a “statement attributed to Tommy Hicks.” It read: “As a businessman, I passionately supported causes I believed in and, if appropriate, would sometimes meet with government officials to promote them. There is nothing wrong with that. I have taken every precaution during my time as Co-Chair of the RNC to ensure there is no conflict of interest between my job here and any personal businesses.” (The spokesperson also emailed a statement on behalf of the RNC: “Tommy has done an outstanding job working on behalf of President Trump and his agenda.”)Bass, who made his name and fortune by betting against subprime mortgages before the crash and is known for large bets that economies or certain macro trends will turn downward, declined to comment. “I’m not interested in talking with you about my friends or any meetings I have or haven’t had privately with anyone,” he wrote in an email. In a subsequent message, Bass wrote that any suggestion “that we had corrupt intentions in meeting with Treasury officials... is categorically false and defamatory and could negatively affect our business.” An administration official briefed on the Bass meeting at the Treasury downplayed it as “strictly a listening session.” He said Bass did not ask the attendees to take any actions, nor did the attendees divulge anything about U.S.-China policy. Government ethics officers vetted the federal employees for any conflicts and found none, the official said. He acknowledged that the review didn’t include an examination of any financial relationship between Hicks and Bass.Spalding said the conversation centered primarily on Bass’ analysis of publicly available records on the Chinese financial system. “I think the thing that I’ve discovered over the past years is that the information in the private sector is better than anything we have in government,” Spalding said of Bass’ presentation. “You have to reach out to where the expertise is. In our country, that’s where the talent is.”An SEC spokeswoman declined to comment. Washburne, now out of government, didn’t respond to emails seeking comment.Bass has become a vocal advocate for an aggressive U.S. policy toward China. On Twitter and on cable business channels he’s denounced everything from the country’s Communist Party government to its business practices. Securities filings show Bass raised $143 million from about 81 investors in two funds — investments that would benefit if China’s currency were devalued or the country faced credit or banking crises. In April, in a letter to his investors, Bass wrote that his company, Hayman Capital Management, was positioned for coming problems in Hong Kong and was set up to “maintain a massive asymmetry to a negative outcome in Hong Kong and/or China.”Hicks’ work on the 5G initiative was extensive.Over just a few months in late 2017 and 2018,  records show, he was part of an informal group led by then NSC official Spalding, that advocated for a strategy in which the federal government would plan out a national policy for 5G. One memo described their goal as the “equivalent of the Eisenhower National Highway System — a single, inherently protected, information transportation superhighway.” The group conducted multiple meetings and briefings. For example, Hicks, Spalding and others traveled to Samsung Electronics’ Dallas-area offices for one meeting in January 2018.That same month Hicks attended a 5G meeting that he’d arranged with Commerce Secretary Wilbur Ross. Commerce plays a key role in the future of 5G since a division within the agency manages government spectrum and another maintains a list of companies the government believes are, or will become, national security threats. Companies that end up on that list can be effectively shut out from global deal-making. The meeting with Ross focused heavily on the threat of China, said Ira Greenstein, who served as a White House aide and was part of Spalding’s 5G crew.Hicks was one of a dozen nongovernment employees, including executives from Wells Fargo, Nokia, Ericsson and Google, that Spalding sent reading materials to ahead of a 5G discussion in the Eisenhower Executive Office Building. Copied on the email were top Commerce Department officials, a Booz Allen Hamilton contractor and a senior adviser for cybersecurity and IT modernization at the White House Office of Science and Technology. On the agenda? “Mid Band vs High Band” spectrum, “security,” “supply chain,” “financing” and other critical issues.Hicks wasn’t just a passive observer. On Jan. 2, 2018, the managing director of OPIC, which provides financial backing to American companies expanding into foreign markets, emailed Spalding and others to say that the CEO of a satellite company called OneWeb had a plan to provide worldwide 5G coverage by 2027. Hicks fired back a note from his iPhone. “2027 is too late,” he wrote. “Let’s discuss as a smaller group tomorrow.”Spalding was forced out of the West Wing in early 2018 after a draft 20-page briefing memo he authored proposing a government-organized national 5G network was leaked, then panned as an attempt to nationalize the wireless broadband industry. Trump has not pursued such an initiative, ultimately deferring to wireless carriers to bid on publicly maintained spectrum and develop their own networks as has traditionally been the case.Still, the administration has made significant efforts to counter Chinese influence in 5G and related technologies, which are said to be critical for industries such as driverless cars, artificial intelligence, machine learning and much more. In May the Commerce Department barred Chinese telecom equipment manufacturer Huawei from doing business in the U.S. for national security reasons. And the top Department of Defense official in charge of acquisitions also recently announced the creation of a government-approved private marketplace to pair American private equity firms with U.S. technology companies producing products with national security applications to keep Chinese money out of 5G.It isn’t clear what influence, if any, Hicks had in those decisions. But his profile is only rising. In April, he led a Republican delegation to Taiwan alongside a U.S. government delegation. Hicks met with the country’s president, Tsai Ing-wen, who has lately been positioning her country’s corporations as safer providers of 5G equipment than those in China. Tsai thanked the U.S. for selling arms to Taiwan. She asked Hicks to convey her regards to the Trumps.
An Opportunity for the Rich

An Opportunity for the Rich

2019-06-1900:30:2613

Under a six-lane span of freeway leading into downtown Baltimore sits what may be the most valuable parking spaces in America.Lying near a development project controlled by Under Armour’s billionaire CEO Kevin Plank, one of Maryland’s richest men, and Goldman Sachs, the little sliver of land will allow Plank and the other investors to claim what could amount to millions in tax breaks for the project, known as Port Covington.They have President Donald Trump’s 2017 tax overhaul law to thank. The new law has a provision meant to spur investment into underdeveloped areas, called “opportunity zones.” The idea is to grant lucrative tax breaks to encourage new investment in poor areas around the country, carefully selected by each state’s governor.But Port Covington, an ambitious development geared to millennials to feature offices, a hotel, apartments, and shopping, is not in a census tract that is poor. It’s not a new investment. And the census tract only became eligible to be an opportunity zone thanks to a mapping error.As the selection process was underway, a deputy chief of staff to Maryland's governor wrote in an email that “Port Covington does not qualify” as an opportunity zone.Maryland's governor chose the area for the program anyway — after his aides met with the lobbyists for Plank, who owns about 40% of the zone.“This is a classic example of a windfall benefit,” said Robert Stoker, a George Washington University professor who has studied economic development in Baltimore for decades. “A major investment was already planned and now is in a zone where they are going to qualify for all kinds of beneficial tax treatment.”In selecting Port Covington, the governor had to exclude another Maryland community from the opportunity zone program. In Baltimore, for example, the governor dropped part of a neighborhood that city officials recommended for the program — Brooklyn — with a median family income one-fifth that of Port Covington. Brooklyn sits just across the Patapsco river from Port Covington, in an area that suffers from one of the highest drug and alcohol death rates in Baltimore, which in turn has one of the highest drug fatality rates nationwide.In a statement, Marc Weller, a developer who is Plank’s partner in the project, defended the opportunity zone designation. “Port Covington being part of an Opportunity Zone will attract more investors, foster more economic growth in a neglected area of the City, and directly benefit all of the surrounding communities for decades to come,” Weller said. Supporters say the Port Covington development could help several nearby struggling south Baltimore neighborhoods.An official in the administration of Maryland’s Republican governor, Larry Hogan, said, “The success of that project is really going to go a long way to providing benefits for the whole city of Baltimore.” The official added: “The governor is a huge supporter of the development.”A spokesperson for the state’s Department of Housing and Community Development, which was involved in the selection process, said that “due to the time limits of the federal tax incentive, the state of Maryland did purposefully select census tracts where projects were beginning to increase the odds of attracting additional private sector investment to Maryland's opportunity zones in the near term.”The Birth of a New Tax BreakIn December 2017, Trump signed the Tax Cuts and Jobs Act, his signature legislative achievement. Much criticized as a giveaway to the rich, the law includes one headline provision that backers promised would help the poor: opportunity zones.Supporters of the program argued it would unleash economic development in otherwise overlooked communities. “Our goal is to rebuild homes, schools, businesses and communities that need it the most,“ Trump declared at a recent event, adding, “To revitalize these areas, we’ve lowered the capital gains tax for long-term investment in opportunity zones all the way down to a very big, fat, beautiful number of zero.”The provision has bipartisan support. “These cities are gold mines,” New Jersey Sen. Cory Booker, a 2020 presidential hopeful and main Democratic architect of the program, told real estate investors in October. “They’re domestic emerging markets that are more exciting than anything you’ll see overseas.”Here’s how the program works. Say you’re a hedge fund manager, you purchased Google stock years ago, and are sitting on $1 billion in gains. If you sell, you’d send the IRS about $240 million, a lot less than ordinary income tax but still annoying. To avoid paying that much, you can sell the shares and put the $1 billion into an opportunity zone. That comes with three generous breaks. The first is that you defer that $240 million in capital gains tax, allowing you to invest more money up front. But if that’s not enough for you, you can hold the investment for several years and you’ll get a significant reduction in those taxes. What’s more, any additional gains from the new investment are tax-free after 10 years.It’s impossible to predict how much the tax break will be worth to individual investors because it depends on several variables, not least whether the underlying project gains in value. But one investment pitch projected 10-year returns would jump to 91% from 29% on a hypothetical $1 million investment. That includes $284,000 in tax breaks — money the federal government would have collected from taxpayers with capital gains but for the program.The tax code already favored real estate developers like Trump, and his overhaul made it even friendlier. Investors can put money into a range of projects in opportunity zones, but so far most of the publicly announced deals are in real estate. The tax break has led to a marketing boom, with Wall Street pitching investors to raise funds to invest in the zones. Critics argue that the program is flawed, pointing out that there’s no guarantee that the capital investment will help community residents, that the selection process was vulnerable to outside influence, and that it could be a giveaway for projects that were going to happen anyway. In a case in Chicago uncovered by the Real Deal, two tracts already slated for a major development project were selected by the governor as opportunity zones even though city officials hadn’t initially recommended them.Under the new law, areas of the country deemed to be “low-income communities” would be eligible to be named opportunity zones. The Treasury Department determined which census tracts qualified. Then governors of each state could select one quarter of those tracts to get the tax benefit.That governor prerogative turned out to be very useful to Kevin Plank.  Plank’s DreamIn 2012, Plank-connected entities quietly began buying up waterfront property on a largely vacant and isolated peninsula south of downtown Baltimore. Often using shell companies to shield the identity of the true buyer, they ultimately spent more than $100 million acquiring much of the peninsula. Plank’s privately held Sagamore Development now controls roughly 40% of the area that would later be named an opportunity zone.In early 2015, more than two and a half years before Trump’s tax law passed, Plank revealed himself as the money behind the purchases. He planned a new development and headquarters for Under Armour, the sports apparel company he started after coming up with the idea as a University of Maryland football player. Today, Under Armour employs 15,000 people. Plank has a net worth of around $2 billion.Though the Port Covington area was cut off from downtown by I-95, Plank said he likes the location because of the visibility. “When people drive through Baltimore [on I-95] I literally want them to drive through and go, 'There's Baltimore on the right. There's Under Armour on the left,’” he told The Baltimore Sun.A year later, Plank’s firm took his vision to the general public, running TV and print ads touting the new project. One of the ads, reminiscent of the Democratic presidential primary spots airing at that time, was filled with a diverse cast sharing their dreams for a new city within a city.“We will build it. Together,” the ad begins, before running through a glittering digital rendering of contemporary urban design features. Office towers, shops, transit, parks, jobs — all of it to be anchored by a new world headquarters of the city’s most visible brand name, Under Armour. Sagamore would spearhead the project and sell land to others who would build businesses and housing.Even before qualifying for the opportunity zone break, taxpayers were going to subsidize the development. Days after the ads touting togetherness, Plank proposed that the city float $660 million in bonds to help build what the company has said would be a $5.5 billion development. Opponents contended Plank’s proposal amounted to corporate welfare that would exacerbate the city’s stark economic and racial divides. But the company agreed to provide millions of dollars to the city and a group of nearby low-income neighborhoods to gain support for the project, and the City Council passed the measure that fall.As Under Armour’s stock plummeted in 2017 amid slowing sales growth and progress on the Port Covington project lagged. That September, Goldman Sachs stepped in to commit $233 million from its Urban Investment Group. Hogan, himself a real estate developer, personally spoke with the then-CEO of Goldman, Lloyd Blankfein, about the deal.Meeting With the Governor’s OfficeIn the weeks after the 2017 federal tax overhaul passed, Plank’s team spotted an opportunity.Nick Manis, a veteran Annapolis lobbyist who has also represented the Baltimore Ravens, reached out to Hogan’s chief of staff about Port Covington, according to emails obtained by ProPublica through a public records request. The developers and their lobbyists had given at least $15,000 to Hogan’s campaigns in recent years. A meeting was set for early February.But the developers had a problem.The Friday before the meeting, a deputy chief of staff to the governor wrote in an email that “Port Covington does not qualify” for the coveted tax breaks.The Port Covington tract, which includes a gentrified corner of South Baltimore north of the largely empty peninsula, was too wealthy to be an opportunity zone. There is a second provision of the law for wealthier tracts: A tract can qualify if it is adjacent to a low-income area. But Port Covington failed that test, too. Its median family income — nearly 160% of Maryland’s — exceeded the income cap even for that provision.Port Covington was out — unless the tract could somehow be considered low-income in its own right.On Feb. 5, the Port Covington development team arrived at the second floor of the statehouse in the opulent governor’s reception room to meet with top Hogan aides. The agenda for the meeting included opportunity zones, as well as transit and infrastructure issues. The developer’s team requested that the Port Covington tract be made an opportunity zone. The state officials “acknowledged their interest in receiving that designation,” a Hogan administration official said.Bank Error in Your FavorThree days after that meeting, Plank and the Port Covington developers got bad news. The Treasury Department released a list of census tracts across the country that were sufficiently poor to be included in the program. Port Covington was not included in that list.Three weeks later, however, things turned around. The Treasury Department issued a revised list. The agency said it had left out some tracts in error. The revised list included 168 new areas across the country defined by the agency as “low-income communities.”This time, Port Covington made the cut.It couldn’t have qualified because its residents were poor. It couldn’t qualify because it was next to some place that was poor. But the tract could qualify under yet another provision of the law. Some tracts could make the cut if they had fewer than 2,000 people and if they were “within” what’s known as an empowerment zone. That was a Clinton-era redevelopment initiative also aimed at low-income areas.Port Covington wasn’t actually within an empowerment zone, but it is next to one. So how did it qualify? The area met the definition of “within” because the digital map files the Treasury Department used showed that Port Covington overlapped with a neighboring tract that was designated an empowerment zone, Treasury officials told ProPublica.That overlap: the sliver of parking lot beneath I-395. That piece of the lot is about one one-thousandth of a square mile.(ProPublica)(ProPublica)There are no regulations or guidance on how to interpret the tax law’s use of “within,” said a spokesman for the Treasury Department’s Community Development Financial Institutions Fund, which compiled the maps. The agency made what it called a “technical decision” that any partial overlap with an Empowerment Zone would count as being “within” that zone — no matter how small the area, or if anyone lived there.Or, if the overlap was even real.Turns out, no part of Port Covington actually overlapped with the empowerment zone.Treasury’s decision ignored a well-known problem in geographic analysis known as misalignment, mapping experts said.Misalignment happens when the lines on digital maps made by two sources differ slightly about where things like roads and buildings lie, according to Henry Luan, a professor of geography at the University of Oregon.For example, if a tract ends at a highway, one file might show the border on the near side of the highway while another — when zoomed all the way in — might show it a few feet away on the far side. When laid on top of each other, the two files end up with minuscule differences that don’t mean anything in the real world.Except in this case, it had big real world consequences for Port Covington. The mapping error allowed the entire tract to qualify as an opportunity zone.“That area of overlap is a complete artifact of” the map files Treasury used, said David Van Riper, director of spatial analysis at the Minnesota Population Center. “It’s not an actual overlap.”Sometime in the mid-2000s, the Census Bureau used GPS devices to make its map files more accurately represent the country’s roads. One of the maps used by Treasury appeared to be based on the older, less accurate Census maps, Van Riper said.Even accepting Treasury’s misaligned maps, the entire Port Covington tract receives tax benefits, even though less than 0.3% of it overlaps with the neighboring tract.“Only a minimal overlap, but you make the whole Census tract benefit from the policy?” Luan said. “That doesn’t make sense to me.”Port Covington is one of just a handful of tracts in the country that ProPublica identified that qualified through similar flaws in Treasury’s process.Taking the BreakThere is no evidence that Plank or the Port Covington developers influenced the Treasury Department’s revision.But the lobbying of the governor before the Treasury change appears to have paid off.As they were lobbying, Baltimore officials were working out which parts of the city would benefit most from being opportunity zones. They petitioned the governor to pick 41 low-income city neighborhoods to get the tax break, all of them well below the program’s maximum income requirements.The city’s list remained largely intact when the governor made his selections in April. Hogan made just four changes, three of which qualified under the main criteria without the benefit of the mapping error. But the fourth didn’t: Port Covington.Plank’s team cheered the revision. The very thing that made Port Covington a poor candidate to be an opportunity zone — that it wasn’t a low-income area — could make it exceptionally attractive to investors. In January, they convened an opportunity zone conference at their Port Covington incubator called City Garage featuring state officials and executives from Goldman, Deloitte and other firms.“Port Covington kind of fits all the needs,” said Marc Weller, Plank’s partner, at the conference. “It has all the entitlements, and it has a financial partner in place as well. It’s probably the most premier piece of land in the United States that’s in an opportunity zone.”The opportunity zone program has restrictions intended to prevent already-planned developments from benefitting. But the Port Covington developers told Bloomberg that the firm will be able to reap the benefits of the tax break because it has found new investors. Among the potential new investors who might take advantage of the tax break are Plank’s own family, one of the developers told the Baltimore Business Journal. A Port Covington spokesman denied that Plank’s family members are potential investors.To get the maximum benefit, investments need to be made in 2019, though investments made through 2026 can take advantage of growth tax-free. Only a portion of the Port Covington project is expected to be underway by then.A Goldman spokesman said it is “likely” that the firm will take advantage of the opportunity zone benefits in Port Covington, adding that it has “made no firm decisions about how each component will be financed.”             Margaret Anadu, the head of Goldman’s Urban Investment Group and the lead on the Port Covington investment, recently said of the opportunity zone program: “These are the same neighborhoods that have been suffering since redline started decades and decades ago, pretty much eliminating private investment. … And so we simply have to reverse that. And the only way to reverse that is to start to bring that private capital back into these neighborhoods.”The Port Covington tract is just 4% black. For it to be included in the program, another community somewhere in Maryland had to be excluded. The ones that the city suggested that were excluded by the governor, for example, are 68% black and have a poverty rate three times higher than Port Covington’s.There is some evidence suggesting being named an opportunity zone has already been a boon for property owners. An analysis by Zillow found that sale price gains in opportunity zones significantly outpaced gains in eligible tracts that weren’t selected. Real Capital Analytics found that sales of developable sites in the zones rose 24% in the year after the law passed.Under Armour has said it’s still committed to building its new headquarters on the peninsula, but it’s not clear when that will happen.Still, other aspects of the once-stalled project finally started moving forward in recent months. After presenting plans for the first section inside the opportunity zone this winter, the project finally got underway on a rainy day in early May of this year."The project is real,” Weller said at the kickoff event, which included Anadu, the Goldman Sachs executive, and city and state officials. “The project is starting. We're open for business."
Pay Day at the Trump Doral

Pay Day at the Trump Doral

2019-06-0500:35:1213

In mid-March, the payday lending industry held its annual convention at the Trump National Doral hotel outside Miami. Payday lenders offer loans on the order of a few hundred dollars, typically to low-income borrowers, who have to pay them back in a matter of weeks. The industry has been long been reviled by critics for charging stratospheric interest rates — typically 400% on an annual basis — that leave customers trapped in cycles of debt.The industry had felt under siege during the Obama administration, as the federal government moved to clamp down. A government study found that a majority of payday loans are made to people who pay more in interest and fees than they initially borrow. Google and Facebook refuse to take the industry’s ads.On the edge of the Doral’s grounds, as the payday convention began, a group of ministers held a protest “pray-in,” denouncing the lenders for having a “feast” while their borrowers “suffer and starve.”But inside the hotel, in a wood-paneled bar under golden chandeliers, the mood was celebratory. Payday lenders, many dressed in golf shirts and khakis, enjoyed an open bar and mingled over bites of steak and coconut shrimp.They had plenty to be elated about. A month earlier, Kathleen Kraninger, who had just finished her second month as director of the federal Consumer Financial Protection Bureau, had delivered what the lenders consider an epochal victory: Kraninger announced a proposal to gut a crucial rule that had been passed under her Obama-era predecessor.Payday lenders viewed that rule as a potential death sentence for many in their industry. It would require payday lenders and others to make sure borrowers could afford to pay back their loans while also covering basic living expenses. Banks and mortgage lenders view such a step as a basic prerequisite. But the notion struck terror in the payday lenders. Their business model relies on customers — 12 million Americans take out payday loans every year, according to Pew Charitable Trusts —  getting stuck in a long-term cycle of debt, experts say. A CFPB study found that three out of four payday loans go to borrowers who take out 10 or more loans a year.Now, the industry was taking credit for the CFPB’s retreat. As salespeople, executives and vendors picked up lanyards and programs at the registration desk by the Doral’s lobby, they saw a message on the first page of the program from Dennis Shaul, CEO of the industry’s trade group, the Community Financial Services Association of America, which was hosting the convention. “We should not forget that we have had some good fortune through recent regulatory and legal developments,” Shaul wrote. “These events did not occur by accident, but rather are due in large part to the unity and participation of CFSA members and a commitment to fight back against regulatory overreach by the CFPB.”This year was the second in a row that the CFSA held its convention at the Doral. In the eight years before 2018 (the extent for which records could be found), the organization never held an event at a Trump property.Asked whether the choice of venue had anything to do with the fact that its owner is president of the United States and the man who appointed Kraninger as his organization’s chief regulator, Shaul assured ProPublica and WNYC that the answer was no. “We returned because the venue is popular with our members and meets our needs,” he said in a written statement. The statement noted that the CFSA held its first annual convention at the Doral hotel more than 16 years ago. Trump didn’t own the property at the time.The CFSA and its members have poured a total of about $1 million into the Trump Organization’s coffers through the two annual conferences, according to detailed estimates prepared by a corporate event planner in Miami and an executive at a competing hotel that books similar events. Those estimates are consistent with the CFSA’s most recent available tax filing, which reveals that it spent $644,656 on its annual conference the year before the first gathering at the Trump property. (The Doral and the CFSA declined to comment.)“It’s a way of keeping themselves on the list, reminding the president and the people close to him that they are among those who are generous to him with the profits that they earn from a business that’s in severedanger of regulation unless the Trump administration acts,” said Lisa Donner, executive director of consumer group Americans for Financial Reform.The money the CFSA spent at the Doral is only part of the ante to lobby during the Trump administration. The payday lenders also did a bevy of things that interest groups have always done: They contributed to the president’s inauguration and earned face time with the president after donating to a Trump ally.But it’s the payment to the president’s business that is a stark reminder that the Trump administration is like none before it. If the industry had written a $1 million check directly to the president's campaign, both the CFSA and campaign could have faced fines or even criminal charges — and Trump couldn’t have used the money to enrich himself. But paying $1 million directly to the president’s business? That’s perfectly legal.***The inauguration of Donald Trump was a watershed for the payday lending industry. It had been feeling beleaguered since the launch of the CFPB in 2011. For the first time, the industry had come under federal supervision. Payday lending companies were suddenly subject to exams conducted by the bureau’s supervision division, which could, and sometimes did, lead to enforcement cases.Before the bureau was created, payday lenders had been overseen mostly by state authorities. That left a patchwork: 15 states in which payday loans were banned outright, a handful of states with strong enforcement — and large swaths of the country in which payday lending was mostly unregulated.Then, almost as suddenly as an aggressive CFPB emerged, the Trump administration arrived with an agenda of undoing regulations. “There was a resurgence of hope in the industry, which seems to be justified, at this point,” said Jeremy Rosenblum, a partner at law firm Ballard Spahr, who represents payday lenders. Rosenblum spoke to ProPublica and WNYC in a conference room at the Doral — filled with notepads, pens and little bowls of candy marked with the Trump name and family crest — where he had just led a session on compliance with federal and state laws. “There was a profound sense of relief, or hope, for the first time.” (Ballard Spahr occasionally represents ProPublica in legal matters.)  In Mick Mulvaney, who Trump appointed as interim chief of the CFPB in 2017, the industry got exactly the kind of person it had hoped for. As a congressman, Mulvaney had famously derided the agency as a “sad, sick” joke.If anything, that phrase undersold Mulvaney’s attempts to hamstring the agency as its chief. He froze new investigations, dropped enforcement actions en masse, requested a budget of $0 and seemed to mock the agency by attempting to officially re-order the words in the organization’s name.But Mulvaney’s rhetoric sometimes exceeded his impact. His budget request was ignored, for example; the CFPB’s name change was only fleeting. And besides, Mulvaney was always a part-timer, fitting in a few days a week at the CFPB while also heading the Office of Management and Budget, and then moving to the White House as acting chief of staff.It’s Mulvaney’s successor, Kraninger, whom the financial industry is now counting on — and the early signs suggest she’ll deliver. In addition to easing rules on payday lenders, she has continued Mulvaney’s policy of ending supervisory exams on outfits that specialize in lending to the members of the military, claiming that the CFPB can do so only if Congress passes a new law granting those powers (which isn’t likely to happen anytime soon). She has also proposed a new regulation that will allow debt collectors to text and email debtors an unlimited number of times as long as there’s an option to unsubscribe.Enforcement activity at the bureau has plunged under Trump. The amount of monetary relief going to consumers has fallen from $43 million per week under Richard Cordray, the director appointed by Barack Obama, to $6.4 million per week under Mulvaney and is now $464,039, according to an updated analysis conducted by the Consumer Federation of America’s Christopher Peterson, a former special adviser to the bureau.Kraninger’s disposition seems almost the inverse of Mulvaney’s. If he’s the self-styled “right wing nutjob”  willing to blow up the institution and everything near it, Kraninger offers positive rhetoric — she says she wants to “empower” consumers — and comes across as an amiable technocrat. At 44, she’s a former political science major — with degrees from Marquette University and Georgetown Law School — and has spent her career in the federal bureaucracy, with a series of jobs in the Transportation and Homeland Security departments and finally in OMB, where she worked under Mulvaney. (In an interview with her college alumni association, she hailed her Jesuit education and cited Pope Francis as her “dream dinner guest.”) In her previous jobs, Kraninger had extensive budgeting experience, but none in consumer finance. The CFPB declined multiple requests to make Kraninger available for an interview and directed ProPublica and WNYC to her public comments and speeches.Kraninger is new to public testimony, but she already seems to have developed the politician’s skill of refusing to answer difficult questions. At a hearing in March just weeks before the Doral conference, Democratic Rep. Katie Porter repeatedly asked Kraninger to calculate the annual percentage rate on a hypothetical $200 two-week payday loan that costs $10 per $100 borrowed plus a $20 fee. The exchange went viral on Twitter. In a bit of congressional theater, Porter even had an aide deliver a calculator to Kraninger’s side to help her. But Kraninger would not engage. She emphasized that she wanted to conduct a policy discussion rather than a “math exercise.” The answer, by the way: That’s a 521% APR.A while later, the session recessed and Kraninger and a handful of her aides repaired to the women’s room. A ProPublica reporter was there, too. The group lingered, seeming to relish what they considered a triumph in the hearing room. “I stole that calculator, Kathy,” one of the aides said. “It’s ours! It’s ours now!” Kraninger and her team laughed.  ***Triple-digit interest rates are no laughing matter for those who take out payday loans. A sum as little as $100, combined with such rates, can lead a borrower into long-term financial dependency.That’s what happened to Maria Dichter. Now 73, retired from the insurance industry and living in Palm Beach County, Florida, Dichter first took out a payday loan in 2011. Both she and her husband had gotten knee replacements, and he was about to get a pacemaker. She needed $100 to cover the co-pay on their medication. As is required, Dichter brought identification and her Social Security number and gave the lender a postdated check to pay what she owed. (All of this is standard for payday loans; borrowers either postdate a check or grant the lender access to their bank account.) What nobody asked her to do was show that she had the means to repay the loan. Dichter got the $100 the same day.The relief was only temporary. Dichter soon needed to pay for more doctors’ appointments and prescriptions. She went back and got a new loan for $300 to cover the first one and provide some more cash. A few months later, she paid that off with a new $500 loan.Dichter collects a Social Security check each month, but she has never been able to catch up. For almost eight years now, she has renewed her $500 loan every month. Each time she is charged $54 in fees and interest. That means Dichter has paid about $5,000 in interest and fees since 2011 on what is effectively one loan for $500.Today, Dichter said, she is “trapped.” She and her husband subsist on eggs and Special K cereal. “Now I’m worried,” Dichter said, “because if that pacemaker goes and he can’t replace the battery, he’s dead.”Payday loans are marketed as a quick fix for people who are facing a financial emergency like a broken-down car or an unexpected medical bill. But studies show that most borrowers use the loans to cover everyday expenses. “We have a lot of clients who come regularly,” said Marco (he asked us to use only his first name), a clerk at one of Advance America’s 1,900 stores, this one in a suburban strip mall not far from the Doral hotel. “We have customers that come two times every month. We’ve had them consecutively for three years.”These types of lenders rely on repeat borrowers. “The average store only has 500 unique customers a year, but they have the overhead of a conventional retail store,” said Alex Horowitz, a senior research officer at Pew Charitable Trusts, who has spent years studying payday lending. “If people just used one or two loans, then lenders wouldn’t be profitable.”It was years of stories like Dichter’s that led the CFPB to draft a rule that would require that lenders ascertain the borrower’s ability to repay their loans. “We determined that these loans were very problematic for a large number of consumers who got stuck in what was supposed to be a short-term loan,” said Cordray, the first director of the CFPB, in an interview with ProPublica and WNYC. Finishing the ability-to-pay rule was one of the reasons he stayed on even after the Trump administration began. (Cordray left in November 2017 for what became an unsuccessful run for governor of Ohio.)The ability-to-pay rule was announced in October 2017. The industry erupted in outrage. Here’s how CFSA’s chief, Shaul, described it in his statement to us: “The CFPB’s original rule, as written by unelected Washington bureaucrats, was motivated by a deeply paternalistic view that small-dollar loan customers cannot be trusted with the freedom to make their own financial decisions. The original rule stood to remove access to legal, licensed small-dollar loans for millions of Americans.” The statement cited an analysis that “found that the rule would push a staggering 82 percent of small storefront lenders to close.” The CFPB estimated that payday and auto title lenders — the latter allow people to borrow for short periods at ultra-high annual rates using their cars as collateral —  would lose around $7.5 billion as a result of the rule.***The industry fought back. The charge was led by Advance America, the biggest brick-and-mortar payday lender in the United States. Its CEO until December, Patrick O’Shaughnessy, was the chairman of the CFSA’s board of directors and head of its federal affairs committee. The company had already been wooing the administration, starting with a $250,000 donation to the Trump inaugural committee. (Advance America contributes to both Democratic and Republican candidates, according to spokesperson Jamie Fulmer. He points out that, at the time of the $250,000 donation, the CFPB was still headed by Cordray, the Obama appointee.)Payday and auto title lenders collectively donated $1.3 million to the inauguration. Rod and Leslie Aycox from Select Management Resources, a Georgia-based title lending company, attended the Chairman’s Global Dinner, an exclusive inauguration week event organized by Tom Barrack, the inaugural chairman, according to documents obtained by “Trump, Inc.” President-elect Trump spoke at the dinner.In October 2017, Rod Aycox and O’Shaughnessy met with Trump when he traveled to Greenville, South Carolina, to speak at a fundraiser for the state’s governor, Henry McMaster. They were among 30 people who were invited to discuss economic development after donating to the campaign, according to the The Post and Courier. (“This event was only about 20 minutes long,” said the spokesperson for O’Shaughnessy’s company, and the group was large. “Any interaction with the President would have been brief.” The Aycoxes did not respond to requests for comment.) In 2017, the CFSA spent $4.3 million advocating for its agenda at the federal and state level, according to its IRS filing. That included developing “strategies and policies,” providing a “link between the industry and regulatory decision makers” and efforts to “educate various state policy makers” and “support legislative efforts which are beneficial to the industry and the public.”The ability-to-pay rule technically went into effect in January 2018, but the more meaningful date was August 2019. That’s when payday lenders could be penalized if they hadn’t implemented key parts of the rulePayday lenders looked to Mulvaney for help. He had historically been sympathetic to the industry and open to lobbyists who contribute money. (Jaws dropped in Washington, not about Mulvaney’s practices in this regard, but about his candor. “We had a hierarchy in my office in Congress,” he told bankers in 2018. “If you were a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”)But Mulvaney couldn’t overturn the ability-to-pay rule. Since it had been finalized, he didn’t have the legal authority to reverse it on his own. Mulvaney announced that the bureau would begin reconsidering the rule, a complicated and potentially lengthy process. The CFPB, under Cordray, had spent five years researching and preparing it.Meanwhile, the payday lenders turned to Congress. Under the Congressional Review Act, lawmakers can nix federal rules during their first 60 days in effect. In the House, a bipartisan group of representatives filed a joint resolution to abolish the ability-to-pay rule. Lindsey Graham, R-S.C., led the charge in the Senate. But supporters couldn’t muster a decisive vote in time, in part because opposition to payday lenders crosses party lines.By April 2018, the CFSA members were growing  impatient. But the Trump administration was willing to listen. The CFSA’s Shaul was granted access to a top Mulvaney lieutenant, according to “Mick Mulvaney’s Master Class in Destroying a Bureaucracy From Within” in The New York Times Magazine, which offers a detailed description of the behind-the scenes maneuvering. Shaul told the lieutenant that the CFSA had been preparing to sue the CFPB to stop the ability-to-pay rule “but now believed that it would be better to work with the bureau to write a new one.” Cautious about appearing to coordinate with industry, according to the article, the CFPB was non-committal.Days later, the CFSA sued the bureau. The organization’s lawyers argued in court filings that the bureau’s rules “defied common sense and basic economic analysis.” The suit claimed the bureau was unconstitutional and lacked the authority to impose rules.A month later, Mulvaney took a rare step, at least, for most administrations: He sided with the plaintiffs suing his agency. Mulvaney filed a joint motion asking the judge to delay the ability-to-pay rule until the lawsuit is resolved.By February of this year, Kraninger had taken charge of the CFPB and proposed to rescind the ability-to-pay rule. Her official announcement asserted that there was “insufficient evidence and legal support” for the rule and expressed concern that it “would reduce access to credit and competition.”  Kraninger’s announcement sparked euphoria in the industry. One industry blog proclaimed, “It’s party time, baby!” with a GIF of President Trump bobbing his head.Kraninger’s decision made the lawsuit largely moot. But the suit, which has been stayed, has still served a purpose: This spring, a federal judge agreed to freeze another provision of the regulation, one that limits the number of times a lender can debit a borrower’s bank account, until the fate of the overall rule is determined.As the wrangling over the federal regulation plays out, payday lenders have continued to lobby statehouses across the country. For example, a company called Amscot pushed for a new state law in Florida last year. Amscot courted African American pastors and leaders located in the districts of dozens of Democratic lawmakers and chartered private jets to fly them to Florida’s capital to testify, according to the Tampa Bay Times. The lawmakers subsequently passed legislation creating a new type of payday loan, one that can be paid in installments, that lets consumers borrow a maximum $1,000 loan versus the $500 maximum for regular payday loans. Amscot CEO Ian MacKechnie asserts that the new loans reduce fees (consumer advocates disagree). He added, in an email to ProPublica and WNYC: “We have always worked with leaders in the communities that we serve: both to understand the experiences of their constituents with regard to financial products; and to be a resource to make sure everyone understands the law and consumer protections. Educated consumers are in everyone’s interest.” For their part, the leaders denied that Amscot’s contributions affected their opinions. As one of them told the Tampa Bay Times, the company is a “great community partner.”***Kraninger spent her first three months in office embarking on a “listening tour.” She traveled the country and met with more than 400 consumer groups, government officials and financial institutions. Finally, in mid-April, she gave her first public speech at the Bipartisan Policy Center in Washington, D.C. The CFPB billed it as the moment she would lay out her vision for the agency.Kraninger said she hoped to use the CFPB’s enforcement powers “less often.” She alluded to a report by the Federal Reserve that 40% of Americans would not be able to cover an emergency expense of $400. Her suggestion for addressing that: educational videos and a booklet. “To promote effective approaches to savings and particularly emergency savings,” Kraninger explained, “the Bureau recently launched our Start Small, Save Up initiative. It offers tips, tools and information to help consumers build a basic savings cushion and develop a savings habit. Later this year, we will be launching a savings ‘boot camp,’ a series of videos, and a very readable, informative booklet that serves as a roadmap to a savings plan.”Having laid out what sounded like a plan to hand out self-help brochures at an agency invented to pursue predatory financial institutions, she then said, “Let me be clear, however, the ultimate goal for the bureau is not to produce booklets and great content on our website. The ultimate goal is to move the needle on the number of Americans in this country who can cover a financial shock, like a $400 emergency.”Back at the Doral the month before her speech, $400 might not have seemed like much of an emergency to the payday lenders. Some attendees seemed most upset by a torrential downpour on the second day that caused the cancellation of the conference’s golf tournament.Inside the Donald J. Trump Ballroom, the conference buzzed with activity. The Bush-era political adviser Karl Rove was the celebrity speaker after the breakfast buffet. And the practical sessions continued apace. One was called “The Power of the Pen.” It was aimed at helping attendees submit comments on the ability-to-pay rule to the government. It was clearly a matter of importance to the CFSA. In his statement to ProPublica and WNYC, Shaul noted that “more than one million customers submitted comments opposing the CFPB’s original small-dollar loan rule — hundreds of thousands of whom sent handwritten letters telling personal stories of how small-dollar loans helped them and their families.”A couple of months after the Doral conference, Allied Progress, a consumer advocacy group, analyzed the new round of comments that were submitted to the CFPB in response to Kraninger’s plans. Because, the group said, the industry had been accused of submitting “duplicative comments” in the past, it searched for such repetitions in the latest round. In one sample of 26,000 comments, the group discovered that 27% of the statements submitted by purportedly independent individuals contained duplicative passages, all of which supported the industry’s position, and also included identical personal anecdotes. (Payday opponents have encouraged people to submit preprinted comments to the CFPB, but there’s no indication that they include matching personal details.) For example, Allied Progress reported that 221 of the comments stated that “I have a long commute to work and it’s better for me financially to borrow from Cash Connection so that I can still make it to work than to not take care of my car and lose my job because of absences.” There were 201 asserting that “I now take care of my parents and my children” and I “want to be able to enjoy life and not feel burdened by the additional expenses that are piling up.” Allied Progress said it doesn’t know “if these are fake people, fake stories, or form letters intentionally designed to read as personal anecdotes.” (Cash Connection couldn’t be reached for comment.)Taking account of public comments is the final task before Kraninger officially determines whether to put the ability-to-pay rule to death. Whatever she decides, it’s a likely bet that decision will be challenged in court, the CFSA will weigh in and the payday lenders will still be talking about it at next year’s annual conference. A spokesperson for the CFSA declined to say whether the event will be held at a Trump hotel. Clarification: This article has been updated to clarify the methodology Allied Progress used in searching for duplicative comments to the CFPB and to explain how duplicative pro-payday-lender comments differed from efforts by anti-payday-loan advocates to encourage people to submit prewritten comments. 
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Comments (120)

Rich Berry

it's great to have you back guys.

Sep 19th
Reply

Shawn Fehr

Until it costs as much as michelle's trip to India, idgaf.

Aug 1st
Reply (3)

jersey2777

these "opportunity zones" sound just like a tax shelter, yet another for the uber rich..

Jul 21st
Reply (2)

Mel Vis

It's become increasingly difficult to listen to anything Trump, especially corruption-related stories, while Daddy T does his clown routine to keep us all distracted. Please god, make the madness stop.

Jun 19th
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Caleb Shuler Sr

ignoramus they all seem

Jun 3rd
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Caleb Shuler Sr

well, if that's the case, President Trump has done a lot for us then

Jun 3rd
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F L Gibson Jr

Mirror trades

May 23rd
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GraWsA

aww I wanted someone to tell that last caller that the Mueller investigation actually made something like 52 million from Manafort, just to put to rest the last little bit of her argument.

Mar 28th
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Nonya Bizness

i don't know if the podcast producers read these comments, but since you report that technically, the president can give his permission to for private entities to use (and profit from) the presidential seal, and that he has apparently given only one private entity, the trump org, that permission, i say we inundate the president with requests to use the seal. a bar, a barber shop, a band, birthday parties, bed and breakfast decor, etc... if the sole permission for AMERICA'S presidential seal to be used for profit by a private company goes to trump org, we have clear evidence that trump is, at minimum, using the office of the president to pillage the american people.

Mar 24th
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SMSimon

Phenomenal reporting here everyone. Thanks for breaking it down for us.

Feb 28th
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Luke Strain

This channel is trash.. pulling at straws and where the respect for office of the presidency??

Dec 16th
Reply (1)

Scott McWilliams

I appreciate your passion for finding the wrong doing of the current president. where was this podcast or info on the last president. government is corrupt on both sides.

Dec 9th
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Rich Berry

great work everyone! so enlightening. so depressing.

Sep 27th
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Minnich

For a year now, the news is dominated by what the president is doing, is tweeting, is saying. When will the media and capitol hill refocus on the important issues plaguing our country, and have since long before Trump? Quit giving a bully what he wants. He craves national attention. Stop giving it to him. He thrives on it. I agree that he is not fit to lead. I also believe that he will shoot himself in the foot. He will bring himself down. So, let's focus on the real issues. Let's hope, the country, being we the people, might have a real voice in Congress and not the voices of special interests. Our two party system is a failure to the general public. The working class has no real representation. Reality has won me over. Trump is an awful leader, and should not be allowed to continue, but we have so many other issues to fix. One man is keeping us from progress because HE controls the media coverage.

Aug 13th
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Michelle T Usher

I don't understand how come it is so hard to get government records? aside from them not sending them. you can still research agency spending per the USASPENDING.GOV WEBSITE. THEY HAVE CENSORED THE TRUMP FAMILY EXPENDITURES. BUT HE HAS LOTS OF CONTRACTS PAYMENTS FOR RENTALS, THRU Homeland Security. I mean the fact us tax dollars were used to bribe Guatamala to also move their embassy. BL HARBERT LLC HAS RECIEVED HUNDREDS OF MILLIONS TO BUILD guatamala embassy in US. THEIR LEADER IS A DEVOUT EVANGELICAL.

Aug 6th
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BnB 44901

where have you gone?! been waiting super patiently!

Aug 1st
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Michael Haworth

Found out something extremely disturbing on Sunday. it appears that lobbyists for the baby formula industries have been funneling money to the Trump organization. This weekend a mandate went out from Trump that organizatios that deal with women and baby's both here and overseas are instructed to stop advising new mother's on the benefits of breast milk and instead telling them to start formula immediately after birth. I am a nurse and am appalled at this Revelation. Breast milk is absolutely essential to the health of a newborn. In the mother's breast milk is a substance called colostrum which hold all if the mother's natural antibodies the baby needs to develop a strong immune response. To advise new mother's to ignore this is not only immoral but devious and extremely unhealthy. To accept money to make baby's sickly is evil simply evil. No moral being on this earth would do this.

Jul 9th
Reply (1)

Loyal R

What you gonna do when President Donald J. Trump is awarded the Noble Prize? Take heart...there are psychotropic drugs that can help you overcome, or at least lessen your delusions.

May 14th
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Ryan O

this is to the producers, examine the land records and deeds filed and the LLCs involved with in Albemarle County, Virginia. This is when he purchased Trump wineries. I grew up right next to this Winery and I'm also a real estate paralegal so I can tell you anything and everything you want to know and I'm telling you now nothing involving this sale is on the up-and-up or is it clear cut like all other large over 5 million dollar sales in this area

May 11th
Reply

Victoria Green

excellent reporting! keep up the good work

May 7th
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