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Authored by Sara Carter via SaraCarter.com,

• Had Horowitz not discovered the anti-Trump texts between Strzok and Page, they would still be investigating the Trump campaign

• IG confirms his office is handling investigation into Comey’s leaking of personal memos to his friend and the New York Times

• There was a clear breakdown in the FBI culture, with senior agents being wined and dined by reporters

Chairman Charles Grassley of the powerful Senate Judiciary Committee outlined the stark double standard at Monday’s much-anticipated hearing with the FBI’s handling of its investigations into Hillary Clinton’s use of a private server for government business and the bureau’s highly partisan investigation into alleged collusion between Russia and President Donald Trump’s campaign.

Grassley, R-Iowa, stated “justice should be blind” but contended that it was not in the case of FBI’s handling of the Clinton and Trump investigations. He noted that based on the evidence collected in the more than 500-page report released by Inspector General Michael Horowitz last week, along with information and evidence collected by numerous Congressional committees, evidence of bias against Trump was insurmountable.

Grassley stressed, “most of the time, evidence of political bias is not so explicit. The details in this report confirm what the American people have suspected all along. Hillary Clinton got the kid-glove treatment.”

“The contrast to the Russia probe is stark,” Grassley stated. “The biggest difference, of course, is the appointment of a Special Counsel. Attorney General (Loretta) Lynch refused to appoint one. The appearance of political influence was inevitable.”

Horowitz and FBI Director Christopher Wray were grilled by lawmakers during the hours-long hearing, which consisted of questioning regarding the use of FBI informants in investigations, the handling of the Clinton investigation and the extraordinary bias in the FBI by senior special agents in the field. Sen. Orin Hatch, R-Utah, said he was “disappointed” in Wray’s response last week, to Horowitz’s report telling Wray there was a “serious problem” within senior bureau leadership and that these cases appear not to be an aberration but a deep cultural breakdown within the FBI.

At the hearing Grassley laid out the extraordinary differences in the investigations and questioned Horowitz, asking him if “granting immunity is the only way to gain truthful testimony from witnesses,” referencing the highly unusual decision by the FBI to grant immunity to Clinton and her aides before they were interviewed. Both Wray and Horowitz noted that it was not the only way to extract information from witnesses but did not expand on why it was handled in such a manner. Horowitz also revealed that his office is handling an investigation into Comey’s leaking of personal memos to his friend and the New York Times, which initiated the opening of a Special Counsel to investigate Trump.

Horowitz sent a strong message to the FBI during his opening statement telling lawmakers, “as detailed in our report, we found that the inappropriate political messages cast a cloud over the Midyear investigation sowed doubt about the credibility of the FBI’s handling of it, and impacted the reputation of the FBI. Moreover, we found the implication that senior FBI employees would be willing to take official action to impact a presidential candidate’s electoral prospects to be deeply troubling and antithetical to the core values of the FBI and the Department of Justice.”

Grassley noted that had Horowitz not discovered the onslaught of anti-Trump texts between embattled FBI Special Agent Peter Strzok, who worked the Clinton investigation and headed the Russia investigation, and his paramour former FBI Attorney Lisa Page, “they would still be there today.”

If the evidence had not been discovered, the pair would “still be investigating the Trump campaign,” Grassley said. “They would still be texting about how they despised President Trump and everyone who voted for him. They would still be plotting about how to use their official positions to, “stop him.”

“We just wouldn’t know about it. Remember these facts every time you hear the press or my friends on the other side of the aisle claim that this report found “no bias.” You may hear that talking point a lot today, but don’t be fooled,” Grassley added.

“(Special Counsel) Robert Mueller removed these people from his team. Why? Obviously, because this kind of political bias has no place in law enforcement. When it was exposed so clearly, Mr. Mueller had no other choice.”

Under questioning, Horowitz admitted that the discovery of Strzok and Page texts were disturbing.

“That should not be downplayed by anybody,” Horowitz said. “I cannot think of anything more concerning than law enforcement officer suggesting that they may use their powers to effect a presidential election.”

Grassley Notes Stark Differences in Trump Clinton Investigation:

• Under Lynch, Comey drafted a public exoneration of Clinton before 17 key witnesses were interviewed.

• Under Rosenstein, no one seriously thinks Robert Mueller would plan a press conference to exonerate Trump before his investigators’ work is done.

• Under Lynch, a low-level IT worker lied to the FBI twice about destroying records under subpoena and got immunity.

• Under Rosenstein, a low-level Trump campaign associate provided the wrong date for a conversation with a professor and got charged with lying to the FBI.

• Under Lynch, Clinton’s lawyers and aides who improperly held classified information got carefully crafted agreements to limit searches of their computers by consent.

• Under Rosenstein, Trump’s lawyers and former aides got raided and hauled before grand juries.

Grassley also stressed the breakdown in the culture at the FBI and Horowitz’s discovery that numerous senior FBI agents were being wined and dined by reporters against FBI protocol.

“The FBI has managed to promote a culture that winks at unauthorized disclosures to the press but punishes legally-protected whistleblowing. It stiff-arms Congressional oversight to hide embarrassing facts, while it leaks self-serving tidbits to friendly reporters bearing gifts. Director Wray has quite a mess to clean up,” Grassley stated.

IG Diagram of FBI contacts with reporters

Sen. John Cornyn, R-Texas, chided the FBI’s leadership team under Comey and questioned Horowitz about the IG report’s finding regarding the lack of documentary evidence of bias in the FBI.  Cornyn said it was a “fair inference to draw that Comey was worried about his future during the Clinton investigation” and changed ‘grossly negligent” to “extremely careless” and asked Horowitz if he was also surprised that Comey was using a private Gmail account at the same time he was investigating Clinton for using a private email server.

Horowitz said he was surprised Comey was using a private account and that he couldn’t judge whether or not Comey made his decision based on his belief that Clinton was going to become president.

Sen. Lindsey Graham, R-South Carolina, also demanded Horowitz open an investigation to find out whether former FBI Director Andrew McCabe attended a meeting with Strzok and Page, which they discussed in a text an “insurance policy” against Trump if he were to become president.

“I want to believe the path you threw out for consideration in Andy’s office – that there’s no way he gets elected – but I’m afraid we can’t take that risk,” Strzok texted on Aug. 15, 2016. “It’s like an insurance policy in the unlikely event you die before you’re 40.”

Horowitz said he believes “Andy” is in reference to McCabe. Horowitz noted that Strzok said McCabe was at a meeting with him but McCabe said he could not recall the meeting.

Graham, in apparent frustration, asked Wray, “have you ever prosecuted a case based on circumstantial evidence, Mr. Wray?”

Director Wray, said, “yes, I have.”

“If you’re on our side of the aisle this really hits you hard,” Graham added.

 “I’m not buying that the Clinton email investigation is on the up and up.”

Wray noted that the FBI’s Office of Professional Responsibility, responsible for investigating agents, is in the process of investigating agents and once it is complete “will hold every person accountable,” Wray said.

Grassley pointed out that Lynch, Former FBI Director James Comey, and former Deputy Director Andrew McCabe declined to testify.  

According to Grassley,

“McCabe’s lawyer wrote that his client would rely on his Fifth Amendment right against self-incrimination to avoid answering any questions here today.”

“Mr. Comey’s attorney tells us he is out of the country, although I saw he was in Iowa over the weekend,” Grassley stated in his opening statement.

“According to his twitter feed, he seems to be having a wonderful time. This is the second time since he was fired that Mr. Comey refused an invitation to testify here voluntarily. He has time for book tours and television interviews, but apparently no time to assist this Committee, which has primary jurisdiction over the Justice Department.”

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With just months left until the global central bank liqiudity supernova finally ends, and turns into a drain of cash …

… Bank of America has published its latest Quantitative Tightening analysis, writing that whereas Quantitative easing was mostly characterized as an environment with too much money chasing too few bonds, lower interest rates, tighter credit spreads and volatility was suppressed, “there is no doubt that quantitative tightening (QT) at times will lead to the opposite – i.e. higher interest rates, wider credit spreads and very volatile market conditions (Figure 1).”

However, the reason why all hell has not yet broken loose, is that we are still in this “intermediate phase” – i.e. on the road from QE to QT – where things remain orderly although as the BofA credit team writes, “technicals of the high grade credit market have weakened notably this year due to less demand (Figure 2).

Hence, as we slowly make the transition from QE to QT, we have already witnessed higher interest rates, wider credit spreads (Figure 3) and more volatility (Figure 4). And this is just the beginning.

Of course, it will hardly come as a surprise to anyone paying attention that the reason why the markets haven’t i mploded yet, and the reason why we are not yet experiencing the full effect of QT is that foreign central banks – the ECB and BOJ in particular – are still providing tremendous monetary policy accommodation via QE and negative interest rates (Figure 5), even if these two risk-boosting stimuli are gradually fading.

This push-pull equilibrium as defined last week by Jeff Gundlach, allows the system to persist in this unstable state indefinitely, because every time US yields rose too much due to QT and rate hikes, there would be large foreign inflows. “Hence, US yields would not increase too much and fixed income volatility remains moderate” according to BofA’s Hans Mikkelsen. Preventing an out of control collapse in risk assets, whereas last week the ECB announced the end to QE, it also came out unexpectedly dovish by returning explicit calendar guidance and promising continued negative interest rates (NIRP) for a long period of time (Figure 6).

At the end of the day, the dovishness prevailed, sending the EUR plunging, as NIRP in the Eurozone works much like QE, as it encourages companies and individuals to take risk way out the maturity curve or down in quality.

But while NIRP controls the short end doesn’t the ECB needs QE to infludence the back end of the curve? Not really: with persistent negative interest rates, European investors are forced to either take a lot of interest risk or credit risk to earn even a small positive yield of 0.50% for example (Figure 9). That asserts bull flattening pressure on both rates and quality curves.

And this is where things get interesting, or as BofA notes, “we have not seen this movie before”, because as Mikkelsen writes, “while QT in itself is a rare occurrence we have never been in an environment of QT with a backdrop of major foreign QE/NIRP. Given the clear failure of the ECB and BOJ to meet their policy goals of near 2% inflation (Figure 8) the road from QE to QT may be very long – certainly years.”

What does all this mean in terms of practical credit trades? Here BofA is growing skeptical that a bullish credit trade will be appropriate as we continue to shift away from QE and closer to full-blown QT.

While we consider high grade credit spreads this year range bound – and in fact presently are at the wide end of the range due to supply pressures that will ease and Italian risks we will increasingly decouple from (although they remain severe a bit further out) – we continue to believe that the end to ECB QE means moderately wider spreads next year and in 2020.

This is because the ECB presently buys about $400bn of bonds annually, which pushes investors into the US market. Without that we get less inflow from Europe and technicals deteriorate further. Partially offsetting this will be less supply as the relative after-tax cost of debt has risen due to higher interest rates and a lower corporate rate.

The only question is when will the algos, buybacks and occasional central bank intervention in stocks (mostly the SNB  and BOJ) that set the daily trading mood, finally concede what is coming, and let fundamentals and market logic finally reassert themselves.

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Stormy Daniels’s lawyer Michael Avenatti has found his new gig – offering to represent illegal immigrants separated from their children at the U.S. border, according to a Sunday night tweet followed by an appearance on MSNBC’s “AM Joy.”

If anyone knows of a parent that has had their child taken from them at the border and not returned, please have them contact me as I am entering this fight. This outrageous conduct must be brought to an immediate end. #Basta

— Michael Avenatti (@MichaelAvenatti) June 17, 2018

Avenatti – whose estranged wife testified that he threatened to have them both arrested so their son would be placed in child protective services – is now a full-fledged social justice warrior. We’re sure he can point us to all the separated migrant families he helped under Obama when the kids were put in actual cages, and that this isn’t some shameless publicity stunt to land more face time on CNN. 

#1 pic Obama’s Migrant shelter with cage/fence vs #2 pic Trump’s actual Migrant shelter without. pic.twitter.com/NDpCk0STUa

— 1776 🇺🇸 III%er (@WestPointIII) June 16, 2018

Avenatti directed his newfound humanitarian outrage at Trump aide Stephen Miller – who is widely credited with Trump’s “zero tolerance” immigration policy, tweeting to Miller, who is Jewish, “Stephen Miller: Congrats, the separation policy that you sold to your boss Mr. Trump will result in images that will crater you both. We will ensure you will never escape them. In your fascist zeal, you forgot that mothers are mothers first, regardless of their politics.”

Stephen Miller: Congrats, the separation policy that you sold to your boss Mr. Trump will result in images that will crater you both. We will ensure you will never escape them. In your fascist zeal, you forgot that mothers are mothers first, regardless of their politics. #Basta

— Michael Avenatti (@MichaelAvenatti) June 17, 2018

“No nation can have the policy that whole classes of people are immune from immigration law or enforcement,” Miller told the New York Times. “It was a simple decision by the administration to have a zero tolerance policy for illegal entry, period. The message is that no one is exempt from immigration law.”

Avenatti, whose company fired a woman for being pregnant, clearly cares about families – as we’re sure he’ll let us know on his next CNN junket. 

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

When I was in Congress and had to regularly fly between DC and Texas, I was routinely subjected to invasive “pat-downs” (physical assaults) by the Transportation Security Administration (TSA). One time, exasperated with the constant insults to my privacy and dignity, I asked a TSA agent if he was proud to assault innocent Americans for a living.

I thought of this incident after learning that the TSA has been compiling a “troublesome passengers” list. The list includes those who have engaged in conduct judged to be “offensive and without legal justification” or disruptive of the “safe and effective completion of screening.” Libertarian journalist James Bovard recently pointed out that any woman who pushed a screener’s hands away from her breasts could be accused of disrupting the “safe and effective completion of screening.” Passengers like me who have expressed offense at TSA screeners are likely on the troublesome passengers list.

Perhaps airline passengers should start keeping a list of troublesome TSA agents. The list could include those who forced nursing mothers to drink their own breast milk, those who forced sick passengers to dispose of cough medicine, and those who forced women they found attractive to go through a body scanner multiple times. The list would certainly include the agents who confiscated a wheelchair-bound three-year-old’s beloved stuffed lamb at an airport and threatened to subject her to a pat-down. The girl, who was at the airport with her family to take a trip to Disney World, was filmed crying that she no longer wanted to go to Disney World.

The TSA is effective at violating our liberty, but it is ineffective at protecting our security. Last year, the TSA’s parent agency, the Department of Homeland Security (DHS), conducted undercover tests of the TSA’s ability or detect security threats at airports across the country. The results showed the TSA staff and equipment failed to uncover threats 80 percent of the time. This is not the first time the TSA has been revealed to be incompetent. An earlier DHS study fund TSA screenings and even the invasive pat-downs were utterly ineffective at finding hidden weapons.

The TSA’s “security theater” of treating every passenger as a criminal suspect while doing nothing to stop real threats is a rational response to the incentives the TSA faces as a government agency. If the TSA puts up an appearance of diligently working to prevent another 9/11 by inconveniencing and even assaulting as many travelers as possible, Congress will assume the agency is doing its job and keep increasing the TSA’s budget. Because the TSA gets its revenue from Congress, not from airline passengers, the agency has no reason to concern itself with customer satisfaction and feels free to harass and assault people, as well as to make lists of people who stand up for their rights.

Congress should end the TSA’s monopoly on security by abolishing the agency and returning responsibility for security to the airlines. The airline companies can contract with private firms that provide real security without treating every passenger as a criminal suspect. A private security firm that assaults its customers while failing to detect real dangers would soon go out of business, whereas the TSA would likely have its budget and power increased if there was another attack on the US.

If shutting down the TSA is too “radical” a step, Congress should at least allow individuals to sue TSA agents for assault. Anyone who has suffered unfair treatment by the TSA as a result of being put on the “troublesome passengers” list should also be able to seek redress in court. Making TSA agents subject to the rule of law is an important step toward protecting our liberty and security.

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Tesla is trying to silence former employees from speaking out about workplace safety issues, it appears from language being included in new severance packages.

Bloomberg reported today that Tesla is trying to curb former employees from speaking out about safety issues that they may have incurred on the job, and it is doing so by including new language in severance packages that it is issuing to 9% of its employee workforce that it is laying off.

Those employees who are accepting severance packages are being asked to give up certain rights as it relates to speaking publicly about workplace safety issues. The Bloomberg article noted:

Language in a confidential severance agreement Tesla Inc. is using as part of the biggest job cut in its history is likely to deter dismissed employees from going public with worker safety concerns, according to employment-law experts.

A proposed severance agreement Tesla presented to one of the more than 3,000 workers dismissed last week required acknowledgment that the employee “had the opportunity to raise any safety concerns, safety complaints, or whistleblower activities against the company, and that if any safety concerns, safety complaints, or whistleblower activities were raised during your employment, they were addressed to your satisfaction.”

The document obtained and reviewed by Bloomberg News also barred the former worker from sharing “business-related” information; required that the ex-employee assist Tesla’s defense against claims; released any claims made against Tesla; and dictated that any disputes under the agreement will be handled in individual arbitration.

The article continued with Tesla’s response. Apparently the company has stated that the “language about safety matters to ensure that issues get addressed, according to a spokesman, who added that employees who don’t believe those words apply to their case should come forward and share their concerns.”

Experts consulted by Bloomberg seem to agree that regardless of whether or not the language is the industry standard or not, it’s likely being done to help absolve Tesla of any legal liabilities:

“I do think the agreement will chill valid employee complaints,” said Brishen Rogers, a law professor at Temple University. “A reasonable worker would just keep their mouth shut, rather than risk losing their severance pay.”

…

Some employment lawyers say the language offered by Tesla doesn’t depart much from what’s become standard in such situations. The agreement probably goes into greater detail about safety issues because they’ve been a subject of controversy for the company, said Paul Secunda, who directs Marquette University’s Labor & Employment Law Program.

“It might be — because of some history with safety issues — that they want to make sure that they’re not leaving unresolved safety issues with severed employees to be resolved later — they’re trying to make this as final as possible,” said Secunda, who previously worked on severance agreements as an attorney for companies.

“When you’re an attorney working for a company like Tesla, what you’re trying to figure out is what kind of legal exposure does Tesla have, and what kind of certainty, predictability, and closure are you seeking to buy through these severance agreements,” he said. “Because you don’t want to have to deal with these in the future.”

This development comes after a  lawsuit was filed just two weeks ago by the former Safety Director of Tesla. We reported on that development here.

That lawsuit accuses Tesla of “unsafe and unhealthy working conditions and work practices,” including chemical and oil spills, chemical fires, workplace injury rate discrepancies and inaccuracies, and a failure to report or document workplace injuries.”

Questions and concerns about workplace safety incidents at Tesla continue, with the latest chapter in the story coming from the company’s former safety director who is suing the company. In a lawsuit that was first reported by Jalopnik, the company’s former safety director alleges that he was fired in retaliation for bringing up concerns about safety and incident reporting – the same types of concerns that were detailed in a Reveal expose that was published in April. The Reveal expose prompted a safety investigation from California regulators. 

According to Jalopnik, Director of Environmental Health, Safety and Sustainability Carlos Ramirez – who had previously worked as Vice President of Safety for SolarCity – was fired in June 2017. Allegedly, in order to embrace his new job as director of safety at Tesla, he needed to audit the company’s incident reporting system, which is essentially a database of accidents and injuries.

As he details in the lawsuit, once he looked into this incident reporting system that he found “numerous instances of lack of treatment of Tesla employees that suffered workplace injuries, recordkeeping violations, and improper classification of workplace injuries to avoid treating and reporting workplace injuries.”

He then reported all this to Tesla, who subsequently fired him weeks later in order to shut him up. He also alleges in the lawsuit that Tesla simply made untrue statements to the state and the public regarding safety at their Fremont plant.

As Jalopnik adds, workplace safety issues came to light after Reveal’s expose in April:

Issues surrounding Tesla’s workplace records came to light in April, after the nonprofit Center for Investigative Reporting’s publication Reveal put out a story that said Tesla improperly classifies injuries on the OSHA 300 report—paperwork by the government required to log serious work-related injuries and illnesses—which effectively bolstered its safety record.

California regulators launched an investigation the next day, without saying whether it was in response to Reveal’s report. Tesla vehemently denied the allegations and insisted its workplace injury rate is better than the auto industry’s average. (Incredibly, the automaker went so far as to label Reveal, a Pulitzer Prize-winning nonprofit news outlet, of being an “extremist organization.”)

Among other things, the Reveal article questioned the lack of the color yellow – used to mark risky areas or hazards in a factory setting. Reveal was told that this was because “Elon does not like the color yellow.” Photos in the Reveal expose show plenty of red…

…but no little yellow.

The new Jalopnik article notes that Ramirez seemed to be front and center in noticing these very same issues, as well as questionable incident reporting standards. For instance, it was reported that during May he attended a workplace meeting where he reported unsafe working conditions. Weeks after that, according to the lawsuit, he was fired.

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Authored by Simon Black via SovereignMan.com,

On January 23, 1995, President Bill Clinton signed into law a piece of legislation that had been almost unanimously approved by both the United States Senate and the House of Representatives.

It was called the Congressional Accountability Act of 1995 – CAA.

The idea behind the CAA was to force Congress to abide by the same rules of workplace health and safety that private companies have to follow.

And one notable example was sexual harrassment; until the CAA was passed, sexual harrassment rules didn’t really apply to Congress.

Here’s where it gets crazy, though: the CAA established an agency called the Office of Compliance to adjudicate various workplace complaints.

And the law further directed the Treasury Department to allocate taxpayer funds to pay claims and damages resulting from such workplace complaints.

In other words, for nearly a quarter of a century, taxpayers have been footing the bill to settle monetary damages every time a member of Congress was caught groping an intern.

What’s more, section 416 of the CAA requires that all mediation, hearings, and deliberation in sexual harrassment claims (or any other workplace complaint) be kept strictly confidential, i.e. NOT disclosed to the public.

Plus a lot of the settlements come with strings attached. In one case of sexual harrassment against former Congressman John Conyers, the legal settlement required the complainant sign an agreement with strict non-disparagement clauses:

“Complainant agrees that she will not disseminate or publish, or cause anyone else to disseminate or publish, in any manner, disparaging or defamatory remarks or comments adverse to the interests of Representative John Conyers . . .”

They’re finally in the midst of passing a law to change this.

There’s a new bill that was recently introduced in the Senate called the CAA Reform Act which aims to heavily revise the originaly 1995 bill.

Among other provisions, section 111 of the CAA Reform Act will require members of Congress to pay their own damn legal settlements… so they’ll no longer be able to grope interns on the taxpayer’s dime.

It’s amazing that this was actually the law of the land for more than two decades.

The United States fancies itself as having the most advanced republican democracy in the world. But this is banana republic stuff, plain and simple.

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