AT&T and Novartis Admit Paying Michael Cohen Was a Big Mistake

Both AT&T and Novartis are now in damage-control mode as a result of Michael Avenatti's telling the world that they dumped serious money on Donald Trump's all-purpose fixer Michael Cohen. People are starting to put 1 and 1 together and getting something not far from 2. AT&T wants the administration to approve its merger with Time Warner. Novartis does not want to negotiate prices with Medicare. What better way than to hire the fixer to put in the fix?

Only they didn't get anything for their money and it looks bad, to boot. AT&T CEO Randall Stephenson told his employees yesterday: "There is no other way to say it—AT&T hiring Michael Cohen as a political consultant was a big mistake." Novartis CEO Vasant Naraimhan put it in slightly different words: "We made a mistake in entering into this engagement and, as a consequence, are being criticized by a world that expects more from us." Both companies now face public relations nightmares as a lot of people now think they were trying to use what look a lot like bribes (even if they don't fit the exact legal definition) to get what they want. If anyone needed a lesson in how swamp creatures operate, thanks to Avenatti, we now have a pretty clear view.

Cohen was disappointed when he didn't get a job in Trump's White House, something he wanted and expected. So he began freelancing. He went to these companies (and probably others) and bluntly told them that he might be able to help them by sprinkling fairy dust in the right places. AT&T bought the story and coughed up $600,000. Novartis went for it hook, line, and sinker, and gave Cohen $1.2 million. Both firms knew very well that Cohen has exactly zero expertise in telecommunications and health care, but they thought (incorrectly, as it turns out), that he did have something more valuable: Trump's ear. Turns out it was more like Vincent Van Gogh's ear. Both companies claimed they didn't actually break any laws in making the payments.

Sarah Huckabee Sanders tried to salvage what she could from the whole mess by saying the incident shows that Trump can't be bought. Actually, it doesn't show that at all. It merely shows that Trump has no use for Cohen any more and that AT&T and Novartis bet on the wrong horse. (V)

Trump Announces "Plan" to Lower Drug Prices

Donald Trump is pretty good at identifying things that aggravate voters. Of course, that's the easy part. The hard part is coming up with solutions that will improve upon the situation. And solutions are not exactly the President's forte. Hence his pattern of making big announcements—infrastructure, opioid abuse, reforming NAFTA, abandoning the Iran deal—and then accomplishing very little.

The latest entry for the list: lower prescription drug prices. Not only is this a real, substantive issue (unlike, say, the need for border walls), but it's a potential big winner, politically. Lots of people have prescriptions, lots of people pay more than they think is fair, and lots of those people vote. It's even an issue that crosses party lines, which is why the two people talking most loudly about the matter during the 2016 campaign were Trump and Sen. Bernie Sanders (I-VT).

In fact, not only were Trump and Sanders talking about the same issue, they were loudly saying many of the same things. For example, that Medicare should be allowed to directly negotiate with pharmaceutical manufacturers, and that Americans should be allowed to import drugs from abroad. However, in the 44-page "plan" that Trump unveiled on Friday, neither of these ideas was included. The document does include a number of very grandiose statements, and a lot of finger-pointing (as did Trump's remarks on unveiling it). However, it is essentially a collection of half-measures and suggestions, like possibly requiring drug ads to include prices, and slightly easing the process for approving new drugs. Health and Human Services Secretary Alex Azar admitted that the proposal was just a starting point. "This is not one and done," he said. "This doesn't get solved tomorrow. It's going to take years of restructuring the system."

In case there were any doubts that the new proposal is just a paper tiger, those doubts should be erased by the fact that pharmaceutical executives were dancing in the streets once they heard what the President had to say. Securities analyst Ronny Gal said the proposal is "very, very positive to pharma," and added, "They've confirmed this administration was and will remain very pro-pharma." "Lots of diagnosis, but no treatment," declared Gerard Anderson, an expert on pharmaceutical policies at Johns Hopkins' Bloomberg School of Public Health. Shares of many drug and biotech companies rose immediately after the speech, and the Nasdaq Biotechnology Index rose 2.7 percent on Friday.

Democrats, of course, were disdainful. "President Trump offered little more than window dressing to combat the rising cost of drugs—a problem that is pinching the pocketbook of far too many Americans," said Senate Minority Leader Chuck Schumer (D-NY). "Instead of putting forth a bold initiative, the president pulled his punch," House Minority Leader Nancy Pelosi (D-CA) added. "The president should work with Democrats to offer real solutions for struggling families, not waste their time bragging about meager, window-dressing policies." Given the rather similar nature of their verbiage, one suspects coordination between the ranking Democrats in the two chambers of Congress.

There are some pretty significant barriers to actual, substantive change in this area. To start, as the Michael Cohen story reminds us (see above), the pharmaceutical industry spends just a little bit of money on lobbyists. They've got a member of Congress or two in their pockets, not to mention many of the movers and shakers at HHS. Beyond that, developing drugs costs a lot of money, and that's where a fair portion of those billions goes. Nevertheless, there are possible ways to reduce costs. For example, the government could give universities large grants to do drug research and development in return for their licensing the resulting patents to pharmaceutical companies at a modest cost, but that requires more government spending for research. Hard to do when paying for a mega tax cut. The upshot is that if this was as easy a problem to solve as Trump says, it would have already been solved. And anyone who expects big things to come of today's announcement—well, they are going to have a big headache soon. But fortunately, the cost of two aspirins isn't much. (Z)

So Much for that Trump-Schumer Bromance

Six months ago, there appeared to be some deal-making going on between Donald Trump and Chuck Schumer. Although they are ostensibly from different parties, commentators made sense of it all by pointing out that they're both straight-shooting, tough-talking New Yorkers who "understand" each other. Which, in turn, meant that a Trump-Schumer bromance made more sense than one between Trump and the country bumpkin Southerner Mitch McConnell (R-KY).

So much for that. Trump and McConnell don't have a great relationship these days, but at least they tolerate each other. Schumer, on the other hand, is the go-to guy whenever a critical comment about Trump is needed (as with the prescription drugs, above). Trump does not like to be criticized, and he does like to deliver payback via Twitter, so he decided to slam the Minority Leader on Friday:

Senator Cryin’ Chuck Schumer fought hard against the Bad Iran Deal, even going at it with President Obama, & then Voted AGAINST it! Now he says I should not have terminated the deal - but he doesn’t really believe that! Same with Comey. Thought he was terrible until I fired him!

— Donald J. Trump (@realDonaldTrump) May 10, 2018

This was one of about a dozen "lashing out" tweets that the President produced this week, which is about par for him.

Of course, we are still in the same week in which the First Lady declared her intention to combat cyberbullying, with her husband sitting just feet away. The Donald's tweets would certainly seem to run contrary to that goal. Among the folks who thinks so is Schumer, who feels no need to take insults lying down. And so, he responded to Friday's tweet thusly:

#BeBest https://t.co/tJD74gSiin

— Chuck Schumer (@SenSchumer) May 10, 2018

If you view the tweet on Twitter, it renders in orange. Nice touch, Mr. Senator. And your move, Mr. President. (Z)

The Battle to Replace Schneiderman Is Complicated

Under New York State law, the state legislature elects a new interim attorney general when the position becomes vacant, as it is now, following the resignation of Eric Schneiderman. Each legislator gets one vote. The Democratic caucus in the Assembly has almost enough votes to pick the winner all by itself, so Assembly Speaker Carl Heastie, a Bronx Democrat, is the kingmaker.

However, Gov. Andrew Cuomo (D-NY) has a lot of sway here, even if he has no power. To start with, he appointed an interim successor, Barbara Underwood, to the job until the legislature elects someone. Everyone agrees that she is competent and experienced, having argued 20 cases before the U.S. Supreme Court. But she has already stated that she will not run in the November special election to be the permanent AG.

Heastie wanted to pick New York City Public Advocate Tish James, but she took herself out of the running yesterday. This being Albany, which borders on the northern extension of the D.C. swamp, it isn't that Heastie thinks James would be the best AG (although there is nothing wrong with her). No, he wants to prevent her from running for NYC mayor in 2021, to clear the way for his buddies, Bronx Borough President Ruben Diaz Jr. and Brooklyn Borough President Eric Adams.

Cuomo then stuck his finger in the pie again yesterday by pointing out that the law does not tell the legislature how fast it has to make its choice. Legally, it could wait until the day before the AG elected in November is to be sworn in. In other words, he wants the legislature to buzz off and leave Underwood in the AG's chair until a new one is elected in the fall. To be continued. (V)

Nielsen May Go Even if She Wants to Stay

The big news on Thursday was that Donald Trump screamed at Sec. of Homeland Security Kirstjen Nielsen during a cabinet meeting, prompting her to draft a letter of resignation. She didn't submit it, but reportedly that is still a possibility.

On Friday, we learned that she may not get to make that decision. Trump really does blame her for the situation at the border, whether it's Nielsen's fault or not . He's not happy that the Cabinet screaming/resignation letter became public knowledge, whether it's Nielsen's fault or not. Furthermore, the sharks are circling, badmouthing the Secretary behind her back as a closeted "never Trumper" who does not actually support the President's agenda. Not helping things is that Nielsen has a reputation for being brusque, and has few allies beyond Chief of Staff John Kelly, who is himself on the wane, influence-wise.

According to insiders, nothing is imminent on the termination/resignation front. That said, Nielsen wouldn't tell people she was resigning until she had actually decided to do it, and Trump famously changes directions on a dime. So, anything from "another two days" to "another two years" is plausible when it comes to the Secretary, although the "two days" is probably closer to being correct. If she does go, Kelly might well follow—either of his volition, or not. (Z)

Ohio Just Got Harder to Gerrymander

With so much other news about the primaries on Tuesday, one important item got buried: Ohio voters made it harder to gerrymander congressional districts. By a 3 to 1 margin, the voters amended the state constitution to change the way the district lines are drawn, so a party with a one-vote majority in each chamber of the state legislature plus the governor's mansion can't just draw up a map to minimize the number of seats the other party gets. Oddly enough, the Republican-controlled legislature and Republican governor were in favor of the amendment, even though it limits their power. The amendment defines a potentially three-phase process for drawing the map:

• Phase 1: The legislature gets the first whack at the piñata. It can draw any map it wants, but the map must be approved by at least 60% of each chamber and have at least 50% of the minority party approve it. A map that is radically gerrymandered will never pass this test; if one party or the other tries, then we go to...
  
  
• Phase 2: A seven-person redistricting commission gets to draw the map, but at least two members of the minority party have to approve it, otherwise we move on to...
  
  
• Phase 3: The legislature gets another shot at it. If one-third or more of the minority-party members vote for the new map, the map is approved and it lasts for a full 10 years. Failing that, a simple majority vote is enough to draw the map. However, that map lasts only for 4 years, after which the process is repeated. Furthermore, the majority has to explain why its map is fair, providing ammo for the minority to sue it in the courts.

In addition, similar anti-gerrymandering proposals will be on the ballot in November in Colorado, Michigan, Missouri, Utah and possibly other states. (V)

National Democratic Party at Odds with the California Democratic Party

California's jungle primary could potentially prevent Democrats from winning House districts even when the majority of voters favor a Democrat. The problem is that there are so many Democrats running in several districts that they could fragment the vote very badly, and allow two Republicans (and zero Democrats) to advance to the general election. One district where this is a real threat is CA-48, represented by Dana Rohrabacher (R). The district is R+4, so the Democrats have a serious shot at it.

In an attempt to prevent the Democratic vote from being divided more-or-less equally among many candidates, the DCCC has now officially backed wealthy real-estate entrepreneur Harley Rouda. The local chapter of Indivisible is on board with the endorsement, so this won't be Hillary vs. Bernie, the sequel. However, the California Democratic Party has endorsed stem cell researcher Hans Keirstead. So, the national and state Democrats are now at loggerheads.

Rohrabacher is expected to come in first in the primary, so the battle between Rouda and Keirstead is for second place. But if they split the Democratic vote, former Orange County GOP Chairman Scott Baugh could come in second, leading to a Rohrabacher (R) vs. Baugh (R) general election. A recent poll put it at Rohrabacher (30%), with Baugh, Rouda, and Keirstead tied for second place with 13% each. So basically, the Democrats have failed to do what they needed to do, namely, unite behind a single candidate. The same problem could play out in other districts, including CA-39 and CA-49. The problem, of course, is California's decision to pretend it is Louisiana and have a jungle primary, instead of normal partisan primaries, like most other states. (V)

Blankenship Plans to Sabotage Morrisey

Coal baron and ex-con Don Blankenship is not what you would call a good sport. He could have accepted his loss in the Republican senatorial primary in West Virginia and just moved on. But he didn't. He is now planning to kneecap winner Patrick Morrisey because Morrisey ran for Congress in New Jersey 15 years ago and Blankenship, who currently lives in Nevada, hates carpetbaggers. Blankenship hasn't said what he is planning to do, but an independent run is on the table. (V)

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---The Votemaster and Zenger