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| Menendez to face corruption charges |
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In responding to the news that he will face corruption charges, Sen. Bob Menendez (D-N.J.) pointed out on Friday that the gifts in question came from Salomon Melgen, who is not just a regular donor to Menendez's political campaigns but also an old friend.
"Everyone knows he and his family, and me and my family, have been real friends for more than two decades," Menendez said in a statement, as Mike DeBonis reported for The Washington Post. "We celebrate holidays together, have been there for family weddings and funerals, and have given each other birthday, holiday, and wedding presents — just as friends do."
If Menendez is charged with corruption, he could try to clear his name by arguing that he did Melgen favors not specifically in exchange for those gifts, but just because friends do nice things for each other now and then. And that reveals thestrangeness of our laws on corruption.
Legal scholar and New York gubernatorial candidate Zephyr Teachout put the problem succinctly in The New York Times a few weeks ago. "Under current law, campaign contributions are illegal if there is an explicit quid pro quo, and legal if there isn’t. But legal campaign contributions can be as bad as bribes," she wrote. "In our private financing system, candidates are trained to respond to campaign cash and serve donors’ interests. Politicians are expected to spend half their time talking to funders and to keep them happy. Given this context, it’s not hard to see how a bribery charge can feel like a technical argument instead of a moral one."
What's in Wonkbook: 1) Charges against Menendez 2) Opinions, including Krugman on the 90's 3) D.C.'s streetcar is a mess, and more
Number of the day: 2 percent. That's the increase in wages over the past year, according to the monthly report from the Bureau of Labor Statistics released Friday. Matt O'Brien in The Washington Post.
Federal prosecutors will claim Menendez used the power of his office in exchange for gifts. "People briefed on the case say Attorney General Eric Holder has signed off on prosecutors' request to proceed with charges, CNN first reported. An announcement could come within weeks. Prosecutors are under pressure in part because of the statute of limitation on some of the allegations. ... The government's case centers on Menendez's relationship with Salomon Melgen, a Florida ophthalmologist who the senator has called a friend and political supporter. Melgen and his family have been generous donors to the senator and various committees the senator is associated with." Evan Perez and Shimon Prokupecz for CNN.
They'll have a difficult case, as they'd have to prove that Menendez did something more than take campaign contributions from a friend. "One issue that's likely to be included was Menendez's advocacy for Melgen's contract providing port security systems in the Dominican Republic. If Menendez believed that Melgen and his partners were best suited to manage that security -- even if it's because of the relationship fostered through Melgen's generosity -- that's not necessarily criminal." Philip Bump in The Washington Post.
Sen. Ted Cruz (R-Texas) thinks the Obama administration is retaliating against Menendez for his position on Iran. "Cruz made the allegations to a throng of reporters jammed into the corner of a tent outside the Iowa Ag Summit in Des Moines without even having been asked about the Menendez criminal charges. ... Menendez has been a vocal critic of the White House as the Obama administration has sought to wrap up delicate talks with Iranian leaders over the future of their nuclear program. The issue came to a head on Capitol Hill last week when Israeli prime minister Benjamin Netanyahu rebuked the Obama administration in front of Congress for its strategy on Iran." Jonathan Easley in The Hill.
KRUGMAN: Party like it's 1995. "Recent job gains have brought the Fed to a fork in the road very much like the situation it faced circa 1995. Now, as then, job growth has taken the official unemployment rate down to a level at which, according to conventional wisdom, the economy should be overheating and inflation should be rising. But now, as then, there is no sign of the predicted inflation in the actual data. ... Don’t yank away that punch bowl, don’t pull that rate-hike trigger, until you see the whites of inflation’s eyes. If it turns out that the Fed has waited a bit too long, inflation might overshoot 2 percent for a while, but that wouldn’t be a great tragedy. But if the Fed moves too soon, we might end up losing millions of jobs we could have had — and in the worst case, we might end up sliding into a Japanese-style deflationary trap, which has already happened in Sweden and possibly in the eurozone." The New York Times.
HUNT: Republicans can show their seriousness by addressing crony capitalism. "A good place to start would be the tax break for so-called carried interest, which enables private equity and hedge-fund executives to treat what really is a performance fee as capital gains and thus pay taxes at a lower rate. Critics such as Warren Buffett have suggested this is indefensible. There's not much money there, but if Republicans could kill a dubious tax loophole, almost all of which goes to the wealthy -- and one that Democrats refused to change -- it'd give real bragging rights. ... There's low-hanging fruit on the spending side, too, starting with agriculture. The cost of the federal crop insurance program has soared over the last decade, mostly to the benefit of wealthy operations. Several years ago, more than two dozen farms reportedly received more than $1 million in subsidies."Bloomberg View.
LUCE: Former Secretary of State Hillary Rodham Clinton has to listen to her critics if she runs for president. "Mrs Clinton’s distrust of the media is self-fulfilling. She has solid grounds for concern. As First Lady, she was the target of more scurrilous journalism than any figure in recent memory. ... But there was also plenty of legitimate critical journalism. After a while, Mrs Clinton did not seem to know the difference. She shrouded her healthcare reform effort in secrecy, then saw the product picked apart by supposed allies. The wrong lesson was drawn. Mrs Clinton withdrew even further into her circle of trust. Sticking with inveterate loyalists undid her campaign in 2008. It could do so again. To win, she must engage people openly, including the media." The Financial Times.
EASTERBROOK: The United States doesn't need a larger navy. "The Navy has 10 nuclear-powered supercarriers — 10 more than the rest of the world. No other nation is even contemplating anything like the advanced nuclear supercarriers that the United States has under construction. China possesses one outdated, conventionally powered carrier, and is believed to be building two other carriers, neither of which is a nuclear supercarrier capable of contesting the “blue water,” or deep open oceans, where the United States Navy dominates. In aircraft carriers, nuclear submarines, naval aviation, surface firepower, assault ships, missiles and logistics, the United States Navy is more powerful than all other navies of the world combined." The New York Times.
The Supreme Court strikes a blow for the free market, write law professors Rebecca Haw Allensworth and Aaron Edlin. "A little-noticed dental cartel in the U.S. received a long-deserved legal root canal on Feb. 25. In North Carolina State Board of Dental Examiners v. Federal Trade Commission, the Supreme Court affirmed the FTC’s position that state licensing boards controlled by 'active market participants'—those who practice the profession—are exempt from antitrust lawsuits only if they are also supervised by the state government. ... The upshot is simple: Many professional boards in the U.S. will be vulnerable to antitrust suits for anticompetitive regulations. ... Boards run by people who practice the profession have become the norm. In Florida, 38 of the state’s 41 boards are required by statute to be staffed by a majority of active market participants. These boards set the terms of competition within the profession and control who is allowed to compete in the first place." The Wall Street Journal.
Chart of the day: Blacks are nearly as likely to complete high school as whites, a major change since the era of Bloody Sunday in Selma, which was 50 years ago last week. Yet blacks are still far less likely to own a home and far more likely to live below the poverty line, according to the Pew Research Center. Ana Swanson in The Washington Post.
The credit reporting agencies have agreed to an overhaul. "The three biggest companies that collect and disseminate credit information on more than 200 million Americans will change the way they handle errors and list unpaid medical bills as part of the broadest industry overhaul in more than a decade. ... The credit-reporting firms will be required to use trained employees to review the documentation consumers submit when they believe there is an error in their files. If a creditor says its information is correct, an employee at the credit-reporting firm must still look into it and resolve the dispute. ... The settlement comes after more than a year of talks between the companies and New York State Attorney General Eric Schneiderman . His office began investigating their practices in 2012 after receiving complaints about errors on state residents’ credit reports and the onerous process to fix them." Annamaria Andriotis in The Wall Street Journal.
Federal regulators approve the first in a new class of cheaper, "biosimilar" drugs. "The FDA approved Novartis AG's copycat version of Neupogen, a biologic cancer drug that recorded $1.2 billion in worldwide sales last year. Novartis already sells biosimilar versions of the drug in more than 40 countries, but Friday's announcement will allow the company to start selling the drug in the United States. Biologics are more complex than traditional drugs made from synthetic chemicals. They're made from living organisms, so they can't be exactly replicated by another product. Instead, the biosimilar manufacturer has to prove that its copycat product is similar enough in safety and effectiveness." Jason Millman inThe Washington Post.
Congressional oversight of the intelligence community has hardly scratched the surface. "The same committee that looked deeply into torture has never taken a similar look at what is now the premier counterterrorism effort, the CIA's drone program, say congressional officials who were not authorized to discuss the matter. ... Nor have the intelligence committees been able to examine cables, emails and raw reporting to investigate recent perceived intelligence lapses, such as why the CIA failed to predict the swift fall of Arab governments, Russia's move into Ukraine or the rapid military advance of the Islamic State group." Ken Dilanian for theAssociated Press.
The streetcar in the nation's capital might not be worth saving, says the city's new transit chief. "Leif A. Dormsjo, a former top transportation official in Maryland, has spent a couple of months probing the project with a notable lack of sentimentality or defensiveness. ... Dormsjo says streetcar backers have lacked 'orderly thinking' about a program that was pieced together under three previous mayors without the needed discipline, data or strategy." Michael Laris in The Washington Post.
"Everyone knows he and his family, and me and my family, have been real friends for more than two decades," Menendez said in a statement, as Mike DeBonis reported for The Washington Post. "We celebrate holidays together, have been there for family weddings and funerals, and have given each other birthday, holiday, and wedding presents — just as friends do."
If Menendez is charged with corruption, he could try to clear his name by arguing that he did Melgen favors not specifically in exchange for those gifts, but just because friends do nice things for each other now and then. And that reveals thestrangeness of our laws on corruption.
Legal scholar and New York gubernatorial candidate Zephyr Teachout put the problem succinctly in The New York Times a few weeks ago. "Under current law, campaign contributions are illegal if there is an explicit quid pro quo, and legal if there isn’t. But legal campaign contributions can be as bad as bribes," she wrote. "In our private financing system, candidates are trained to respond to campaign cash and serve donors’ interests. Politicians are expected to spend half their time talking to funders and to keep them happy. Given this context, it’s not hard to see how a bribery charge can feel like a technical argument instead of a moral one."
What's in Wonkbook: 1) Charges against Menendez 2) Opinions, including Krugman on the 90's 3) D.C.'s streetcar is a mess, and more
Number of the day: 2 percent. That's the increase in wages over the past year, according to the monthly report from the Bureau of Labor Statistics released Friday. Matt O'Brien in The Washington Post.
1. Top story: Senator will face corruption charges
They'll have a difficult case, as they'd have to prove that Menendez did something more than take campaign contributions from a friend. "One issue that's likely to be included was Menendez's advocacy for Melgen's contract providing port security systems in the Dominican Republic. If Menendez believed that Melgen and his partners were best suited to manage that security -- even if it's because of the relationship fostered through Melgen's generosity -- that's not necessarily criminal." Philip Bump in The Washington Post.
Sen. Ted Cruz (R-Texas) thinks the Obama administration is retaliating against Menendez for his position on Iran. "Cruz made the allegations to a throng of reporters jammed into the corner of a tent outside the Iowa Ag Summit in Des Moines without even having been asked about the Menendez criminal charges. ... Menendez has been a vocal critic of the White House as the Obama administration has sought to wrap up delicate talks with Iranian leaders over the future of their nuclear program. The issue came to a head on Capitol Hill last week when Israeli prime minister Benjamin Netanyahu rebuked the Obama administration in front of Congress for its strategy on Iran." Jonathan Easley in The Hill.
2. Top opinions
HUNT: Republicans can show their seriousness by addressing crony capitalism. "A good place to start would be the tax break for so-called carried interest, which enables private equity and hedge-fund executives to treat what really is a performance fee as capital gains and thus pay taxes at a lower rate. Critics such as Warren Buffett have suggested this is indefensible. There's not much money there, but if Republicans could kill a dubious tax loophole, almost all of which goes to the wealthy -- and one that Democrats refused to change -- it'd give real bragging rights. ... There's low-hanging fruit on the spending side, too, starting with agriculture. The cost of the federal crop insurance program has soared over the last decade, mostly to the benefit of wealthy operations. Several years ago, more than two dozen farms reportedly received more than $1 million in subsidies."Bloomberg View.
LUCE: Former Secretary of State Hillary Rodham Clinton has to listen to her critics if she runs for president. "Mrs Clinton’s distrust of the media is self-fulfilling. She has solid grounds for concern. As First Lady, she was the target of more scurrilous journalism than any figure in recent memory. ... But there was also plenty of legitimate critical journalism. After a while, Mrs Clinton did not seem to know the difference. She shrouded her healthcare reform effort in secrecy, then saw the product picked apart by supposed allies. The wrong lesson was drawn. Mrs Clinton withdrew even further into her circle of trust. Sticking with inveterate loyalists undid her campaign in 2008. It could do so again. To win, she must engage people openly, including the media." The Financial Times.
EASTERBROOK: The United States doesn't need a larger navy. "The Navy has 10 nuclear-powered supercarriers — 10 more than the rest of the world. No other nation is even contemplating anything like the advanced nuclear supercarriers that the United States has under construction. China possesses one outdated, conventionally powered carrier, and is believed to be building two other carriers, neither of which is a nuclear supercarrier capable of contesting the “blue water,” or deep open oceans, where the United States Navy dominates. In aircraft carriers, nuclear submarines, naval aviation, surface firepower, assault ships, missiles and logistics, the United States Navy is more powerful than all other navies of the world combined." The New York Times.
The Supreme Court strikes a blow for the free market, write law professors Rebecca Haw Allensworth and Aaron Edlin. "A little-noticed dental cartel in the U.S. received a long-deserved legal root canal on Feb. 25. In North Carolina State Board of Dental Examiners v. Federal Trade Commission, the Supreme Court affirmed the FTC’s position that state licensing boards controlled by 'active market participants'—those who practice the profession—are exempt from antitrust lawsuits only if they are also supervised by the state government. ... The upshot is simple: Many professional boards in the U.S. will be vulnerable to antitrust suits for anticompetitive regulations. ... Boards run by people who practice the profession have become the norm. In Florida, 38 of the state’s 41 boards are required by statute to be staffed by a majority of active market participants. These boards set the terms of competition within the profession and control who is allowed to compete in the first place." The Wall Street Journal.
Chart of the day: Blacks are nearly as likely to complete high school as whites, a major change since the era of Bloody Sunday in Selma, which was 50 years ago last week. Yet blacks are still far less likely to own a home and far more likely to live below the poverty line, according to the Pew Research Center. Ana Swanson in The Washington Post.
3. In case you missed it
Federal regulators approve the first in a new class of cheaper, "biosimilar" drugs. "The FDA approved Novartis AG's copycat version of Neupogen, a biologic cancer drug that recorded $1.2 billion in worldwide sales last year. Novartis already sells biosimilar versions of the drug in more than 40 countries, but Friday's announcement will allow the company to start selling the drug in the United States. Biologics are more complex than traditional drugs made from synthetic chemicals. They're made from living organisms, so they can't be exactly replicated by another product. Instead, the biosimilar manufacturer has to prove that its copycat product is similar enough in safety and effectiveness." Jason Millman inThe Washington Post.
Congressional oversight of the intelligence community has hardly scratched the surface. "The same committee that looked deeply into torture has never taken a similar look at what is now the premier counterterrorism effort, the CIA's drone program, say congressional officials who were not authorized to discuss the matter. ... Nor have the intelligence committees been able to examine cables, emails and raw reporting to investigate recent perceived intelligence lapses, such as why the CIA failed to predict the swift fall of Arab governments, Russia's move into Ukraine or the rapid military advance of the Islamic State group." Ken Dilanian for theAssociated Press.
The streetcar in the nation's capital might not be worth saving, says the city's new transit chief. "Leif A. Dormsjo, a former top transportation official in Maryland, has spent a couple of months probing the project with a notable lack of sentimentality or defensiveness. ... Dormsjo says streetcar backers have lacked 'orderly thinking' about a program that was pieced together under three previous mayors without the needed discipline, data or strategy." Michael Laris in The Washington Post.
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