Embattled EPA Administrator Scott Pruitt Resigns

After facing more scandals than any other cabinet officer in recent memory—and probably in American history—EPA Administrator Scott Pruitt resigned yesterday. The sheer number of scandals he was caught up in is truly staggering, especially in an administration whose head campaigned on draining the swamp, not feeding the alligators. Among other things, Pruitt:

• Ordered raises for aides, despite the White House rejecting his request
• Spent $3 million on his security detail, 3x larger than his predecessor
• Installed $5,700 biometric locks on his office
• Rented a room from a lobbyist with business before the EPA at a below-market rate
• Installed a $43,000 soundproof booth in his office
• Spent over $100,000 on first class airfare
• Used sirens and flashing lights to speed himself through D.C. traffic
• Took a $100,000 trip to Morocco (where the EPA has no actions planned) paid for by a lobbyist
• Accepted free tickets to sports events from coal executives
• Bought $1,500 worth of pens (apparently in case his computer went down)
• Told an aide to go get him a used mattress from Trump International Hotel
• Tried to shoot down the job prospects of a staffer
• Tried to use his position to land his wife a Chick-fil-A franchise
• Had his security detail find him moisturizing lotion and pick up his laundry
• Sent employees out to fetch snacks and yogurt for him
• Told an aide to find his wife a job paying at least $200,000
• Put the treasurer of his PAC in charge of overseeing FOIA requests
• Fired or demoted employees who questioned the legality of his actions

Just looking over the list, something interesting jumps out. Each of these things is, to a greater or lesser extent, kosher in the private sector. For example, taking gifts from clients, or charging the company big bucks for fringe benefits, or treating underlings like gofers, or firing employees who don't do what they are told—the folks on Wall Street wouldn't bat an eye. For government agencies, however, they are the stuff of which scandals are made. Getting elected on a "let's run the government like a business" platform is all good and well, but when an administration actually tries it out—and this one has done so more fully than any other in American history—it becomes clear that it is not what people actually want.

Maybe the fact that these behaviors are de rigueur in the business world is part of the reason that Trump was basically unfazed by Pruitt's behavior and supported him until the bitter end. Everyone else in the White House, on the other hand, saw him as a distraction and nothing but trouble. Trump said on Tuesday that there was no "final straw" that sealed Pruitt's fate, but insiders report that the President blew his top when it leaked on Wednesday that the Administrator made a play for AG Jeff Sessions' job. Trump didn't go for it, of course, and is very unlikely to do so now. He sent Pruitt on his way with a couple of polite tweets:

I have accepted the resignation of Scott Pruitt as the Administrator of the Environmental Protection Agency. Within the Agency Scott has done an outstanding job, and I will always be thankful to him for this. The Senate confirmed Deputy at EPA, Andrew Wheeler, will...

— Donald J. Trump (@realDonaldTrump) July 5, 2018

...on Monday assume duties as the acting Administrator of the EPA. I have no doubt that Andy will continue on with our great and lasting EPA agenda. We have made tremendous progress and the future of the EPA is very bright!

— Donald J. Trump (@realDonaldTrump) July 5, 2018

If Pruitt does make a return to Washington anytime soon, it is not likely to be in any sort of government job. Either it will be as a lobbyist, or to try to defend himself in the 13 ongoing federal investigations concerning him. He may well have broken multiple laws, so he might not end up merely defending himself, he could well end up as a defendant.

With Pruitt out, as Trump noted, former coal lobbyist and Deputy Administrator Andrew Wheeler is now in charge. While he is likely to be a bit more circumspect in spending government money and using his staff as personal servants, the direction of the agency won't change. All the regulations relating to cleaner air and water—the agency's core business—will continue to be under constant attack. Wheeler will be much more subtle about his assault on the environment, since he is a long-time Washington insider and knows how things work. Trump may or may not nominate him to run the agency, as there are many lobbyists and corporate executives available who would love to gut environmental regulations.

Pruitt has already achieved some goals that will be difficult for future administrations to change, most notably pulling out of the Paris climate agreement. On the other hand, some of his personal goals are going to be a bit harder to achieve now, such as running for statewide office in Oklahoma in 2020 and then for president in 2024. (V & Z)

Trade War Will Heat Up Starting Today

The first phase of Donald Trump's tariffs on Chinese products goes into effect at 12:01 a.m. Washington time today. They target $34 billion worth of goods. China has said that it plans to reply in kind, with tariffs on $34 billion worth of American products. Trump has said that if they do that, he will levy more tariffs. Before long, we could have a full-blown trade war with China, and maybe other countries.

The Chinese are, not surprisingly, very unhappy about all of this. Their trade ministry has already denounced Trump for starting "the biggest trade war in economic history," and warned that, "China is forced to strike back to safeguard core national interests and the interests of its people." Since 12:01 a.m. Washington time is 12:01 p.m. Beijing time, it won't take long, and it won't be pretty.

China is planning to target products that will cause the maximum amount of pain to Trump's base, including pork, soybeans, and corn, all of which hit red states in the Midwest the hardest. In addition, China is almost certainly going to step up enforcement of existing rules. For example, currently about 2% of all American cars imported into China are given safety inspections. That could soon rise to 100%, basically causing the Chinese market to dry up completely for American car manufacturers even without a tariff. Many U.S. companies depend on supply chains that are partly in China. They could take tremendous hits if Chinese inspectors were to descend upon their factories and find all manner of health and safety violations requiring the factory to be shut down for a few weeks. Trump could back down, of course, but this is apparently an area he actually cares about, so that seems unlikely.

The mystery, to some extent, is why Trump is so committed to the tariffs. Yes, he ran on an "America First" platform, but with most other things of that sort—Muslim travel bans, Mexican walls, etc.—he has contented himself with rhetoric and dramatic (but somewhat limited) gestures. In theory, he should be able to do the same here—wave his sword in the direction of China or Mexico or Canada, get a concession or two, and declare victory. But here, he seems to be determined to move beyond symbolic victories. One clue as to his mindset might be provided by a tweet he sent out on Wednesday:

The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!

— Donald J. Trump (@realDonaldTrump) July 4, 2018

This is, of course, nonsense. First of all, OPEC is a cartel, not a monopoly. Second, as a cartel, its very purpose is to drive petroleum prices up. Its job is most certainly not to be worried about the fact that American gas prices are too high. And yet, Trump really seems to think that the member nations should be delighted to kowtow to him (and to the United States). And, for that matter, so should China, and the EU, and congressional Democrats. This mindset seems inconceivable for a president, but it's par for the course for a billionaire businessman. That is to say, Trump has spent the better part of the last half-century dealing with people who were honored (or, at least, pretended to be honored) to do business with him: construction firms, banks, televison networks, and—particularly in the last 10 years—branding partners. It is well-established by now that Trump makes no distinction between personal disputes and political/international disputes. Perhaps this whole trade war situation is basically personal, a response to his irritation at the lack of kowtowing.

There's another possibility that we will throw out there, also (somewhat) supported by the above tweet. Note that there is zero publicly-available evidence that directly supports this theory, and even if it's correct, it's hard to imagine when such evidence will become available. Nonetheless, let us note three things:

1. The GOP's tax bill blew a giant hole in the budget.
2. New taxes are anathema to the Republican base, as George H. W. Bush learned the hard way.
3. A tariff is a tax on Americans, but it is—as the Brits say—a stealth tax. First of all, because the word "tariff" is not the word "tax," and in a world where Americans' knowledge of civics is not so great, most of the base may not be aware that it's the same thing. Second, because tariffs are generally blended into the price of goods, as opposed to being broken out as a separate cost. Consequently, even if folks are aware they are paying a tax, it's not nearly as clear how much they're paying—in contrast to, say, an income tax or a sales tax.

Anyhow, you can see where we're going with this: Perhaps Trump has persuaded himself (or has been persuaded) that the tariffs are a politically viable way to (partly) subsidize the tax cut. And what does this have to do with his OPEC tweet? Only this: The tweet is the latest item for the large pile of evidence that Trump has a very poor understanding of macroeconomics, fiscal policy, and international trade. Only someone like that could plausibly believe that a trade war will substantially increase federal revenues. While it's true that the government might collect higher duties, they will also collect fewer of them as trade slows down, thus canceling out any gains. Put another way, no serious economist would embrace a scheme like this, but it's at least possible that Trump and his team of teleconomists might buy into it. (V & Z)

Mueller Is Now Looking Closely at Trump's Inauguration

No, not whether he won the election fairly, that has been going on for a long time. Special Counsel Robert Mueller is now specifically interested in the financing of the inaugural parties. Donald Trump raised over $100 million for the parties—possibly quite a bit of it from Russian oligarchs. Now, it is well known that Russian oligarchs love parties, but many of them were promised meetings with Trump as part of the deal. Mueller would like to know if this interest was just because they hate to miss a good party or if there was perhaps some kind of ongoing relationship between the oligarchs and Trump. Also, it turns out that it is illegal for foreigners to contribute to the president's inaugural committee.

All oligarchs are equal, but some oligarchs are more equal, and Mueller has a special interest in those. In particular, Viktor Vekselberg is in Mueller's sights. He and his cousin Andrew Intrater attended a candlelight dinner the night before the inauguration and sat next to Trump's fixer, Michael Cohen. Later in 2017, Intrater, a U.S. citizen, paid Cohen's shell company, Essential Consultants, $500,000 for real estate advice, a subject Cohen knows little about. Any documentation on Cohen's computer—which the feds now have—probably would not qualify as privileged attorney-client communications.

Another oligarch who showed up to party is Leonard Blavatnik, who is now a U.S. citizen, so his $1 million donation to the inaugural committee is legal, assuming there was no quid pro quo. Blavatnik has ties to Vekselberg and also to Oleg Deripaska, who has had various business ventures with Cohen. All of these connections to wealthy Russians has piqued Mueller's curiosity.

Also in town for the partying was Natalia Veselnitskaya, she of the famous Trump Tower meeting in July 2016 in which Donald Trump Jr. was expecting dirt on Hillary Clinton.

That is a run down of the input side. What about the output side? Where did the $100 million go? Well, $26 million went to WIS Media Partners, an event production firm run by one of Melania Trump's former aides. Another $25 million went to Hargrove, Inc. What the firms did with all this money is unknown, but Mueller clearly understands the famous line from the Watergate investigation: "Follow the money." Where the rest of the $100 million went is mostly a mystery. It didn't go to the actual inauguration event or its security. The government paid for that.

One small footnote to all this is that Tom Barrack, who has financial interests all over the Middle East, was the chair of the inaugural committee, but the "shadow chair" was Rick Gates, who has flipped, so everything he knows—and that could be quite a bit—Mueller also knows. This might be part of the reason Mueller has suddenly become interested in the inauguration.

Checking out all these new leads requires a lot of investigators, so Mueller is making much heavier use now of career prosecutors in the U.S. attorneys' offices in Virginia, Pennsylvania, New York, and elsewhere. He finds this easier than increasing his own staff. Also, he was probably surprised by the decision of former Trump campaign manager, Paul Manafort, to fight his indictments, rather than turn state's evidence, so he needs his own staff to prepare for both of Manafort's upcoming trials. (V)

Cohen Should Probably Shut Up

Speaking of Michael Cohen, Donald Trump's now-former lawyer/fixer is very clearly angling for a plea bargain. He's spoken to reporters, made comments on social media, and his interview with "This Week's" George Stephanopoulos was essentially a "let's strike a deal" commercial. On Thursday, Cohen made sure that everyone knows he's not expecting a pardon from Donald Trump. Translation: "We've had a falling out, and I'm definitely not loyal to him any more."

There are two major barriers to Cohen's getting his plea bargain. The first is that, depending on what the feds got from his computer, office, hotel room, etc., they may not actually need him. There's not much he can do about that at this point. The second is that he keeps talking too much in public. This does not please the folks at the Southern District of New York, who are handling the investigation (and potential prosecution). In part, because they don't like publicity and prefer to work under the radar, and in part because every public utterance is potential ammunition for a defense lawyer to use in an effort to undermine Cohen as a witness. Needless to say, shutting his mouth is something that is well within Cohen's power. Indeed, his well-respected lawyer—Guy Petrillo, who used to work for the SDNY—will likely remind him very soon that loose lips sink ships (and former fixers). (Z)

Trump Rallies in Montana

Donald Trump is in the revenge business. And while his rally on Thursday night was held partly because he likes rallies, it was held primarily to punish Sen. Jon Tester (D-MT) for playing a leading role in sinking the nomination of Ronny Jackson to lead the VA.

In most ways, Thursday's rally followed the usual script, including many of Trump's standard targets: ungrateful NFL players, evil Democrats, undocumented immigrants, MS-13, Sen. John McCain (R-AZ), the Bush family, and so forth. That said, there were a few noteworthy things. The one that will get the most attention, far and away, is his attack on Sen. Elizabeth Warren (D-MA). It's true that he pretty much always attacks her, since he's convinced himself she'll be his 2020 opponent, but he took it to a new level Thursday night:

I want to apologize. Pocahontas, I apologize to you. I apologize to you. To you I apologize. To the fake Pocahontas, I won't apologize...We'll take that little [ancestry.com DNA] kit and say, we have to go it gently because we are in the Me Too generation, and we will very gently take that kit, slowly toss it" to her.

Just in case Trump wanted to remind anyone that he's not really sorry about pu**ygate, and that he didn't actually learn anything from that fiasco, he managed to do it on Thursday. And the Senator, of course, was not pleased:

Hey, @realDonaldTrump: While you obsess over my genes, your Admin is conducting DNA tests on little kids because you ripped them from their mamas & you are too incompetent to reunite them in time to meet a court order. Maybe you should focus on fixing the lives you're destroying.

— Elizabeth Warren (@elizabethforma) July 5, 2018

Warren was not the only woman to end up in Trump's sights on Thursday. He also attacked Rep. Maxine Waters (D-CA), speculating that her IQ is "somewhere in the mid-60s." House Minority Leader Nancy Pelosi (D-CA) has already fired back on that one:

.@realDonaldTrump, instead of making despicable attacks on @RepMaxineWaters, why don’t you focus on reuniting the children you put into cages back with their families? It’s been 9 days since a federal judge ordered you to. #FamiliesBelongTogether https://t.co/YO1tTFg6gM

— Nancy Pelosi (@NancyPelosi) July 5, 2018

One might note certain similarities between the two tweets, like maybe the Democrats have already decided what issue is going to be the centerpiece of their midterm campaign.

Also lambasted by the President on Thursday was the female protester who scaled the Statue of Liberty on Wednesday, whom Trump described as a "clown." "You saw that clown yesterday on the Statue of Liberty, you saw those clowns that went up there," he declared. Trump's use of "clown" as a slur is a little bit interesting. While it was once a standard part of his vocabulary, he hasn't used it—at least on Twitter—since he became president. What might have put that back into his head? Maybe it was the July 4 cover of the New York Daily News:

Apparently, and unusually for him, Trump decided not to blast the Daily News directly. But it's surely not a coincidence that clowns were on his mind, and he appears to have unwittingly confirmed that he saw the cover, and that it bothered him. Anyhow, the President's next rally is scheduled to take place in sunny Califorina, where he will undoubtedly get a warm reception. (Z)

Next Week, the British Get Their Turn

Before Donald Trump can visit California, however, he will have to complete the lengthy trip of Europe he has scheduled, which will include a meeting with the other leaders of NATO, a summit with Vlad Putin, and a "working visit" to the United Kingdom.

Londoners, in particular, are already working hard in preparation for Trump's arrival. And when he gets to the city, well, he's going to get a preview of the kind of response that likely awaits him in California. The centerpiece of the Londoners' protests, which got official approval on Thursday, will be an 18-foot-tall Trump "baby" balloon floating above the city:

Publicly, Mayor Sidiq Khan—who was responsible for signing off on the permit for the balloon—said that he "supports the right to peaceful protest and understands that this can take many different forms." Privately, given the insults that Trump has hurled in his direction, and against Muslims in general, Khan was undoubtedly tickled pink. The President will arrive in the British capital next Friday. (Z)

Nobody Wants Don Jr.'s Book

Apparently, running the Trump Organization is only a part-time job, because Donald Trump Jr. is peddling a book around New York. After all the "insider" books that have already come out, all of them less-than-flattering, Don Jr. wants to "set the record straight" with what he is reportedly calling a "defense of daddy."

Don Jr.'s problem is that everyone is turning him down. There are, of course, big bucks in right-wing political screeds (ask Ann Coulter), and a Trump Jr. book would bring in millions for an industry that, these days, is looking under rocks for cash. However, publishers are very skittish about the possibility he could be indicted. An indictment actually presents two problems; the first is that a publisher could give him a juicy advance and then see it disappear when and if he goes to the hoosegow, and the second is that a publisher could find itself enmeshed in the actual prosecution, with editors called as witnesses as to what Trump Jr. did or did not tell them. So, the only answer Junior has heard so far is, "Thanks, but no thanks." Perhaps this will awaken him to how very badly exposed he is in this whole Russiagate mess. (Z)

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---The Votemaster and Zenger