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The Pronk Pops Show 1374: December 13, 2019, Part 2 of 2: Story 1: Real Abuse of Power — 17 Major Errors, Mistakes and Omissions — Mislead The Foreign Intelligence Surveillance Act Court —  Clinton Obama Democrat Criminal Conspiracy Revealed — Big Lie Media Lied to American People and Still Lying —  Videos — Story 2: House Judiciary Committee Passes Two Articles of Impeachment Against President Trump — Abuse of Power and Obstruction of Congress in Partisan 23 Democrats Vote Yes and 17 Republican Vote No — No Crime — No Evidence — No Sense — Not Guilty Videos –Story 3: House Minority Leader McCarthy on Impeachment — Videos

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Story 1: Real Abuse of Power — 17 Major Errors, Mistakes and Omissions — Mislead The Foreign Intelligence Surveillance Act Court —  Clinton Obama Democrat Criminal Conspiracy Revealed — Big Lie Media Lied to American People and Still Lying —  Videos

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FISA ISSUES: IG Michael Horowitz Outlines BIAS Against President Trump

Lindsey Graham rips FBI over Russia probe: full video

FBI EXPOSED: Lindsey Graham DETAILS Massive FBI Bias Against President Trump

Full Interview: Barr Criticizes Inspector General Report On The Russia Investigation | NBC News

Cruz on spying: This wasn’t Jason Bourne, this was ‘Beavis and Butt-head

The Five’ breaks down IG report hearing’s biggest bombshells

Graham sends warning to FBI officials responsible for FISA abuse

Tucker: Media silent on the lies they spread

IG report hearing part 1: Lindsey Graham’s opening statement

IG report hearing part 2: Dianne Feinstein’s opening statement

IG report hearing part 3: Michael Horowitz’s opening statement

IG report hearing part 4: Lindsey Graham questions Michael Horowitz

IG report hearing part 5: Dianne Feinstein, Patrick Leahy question Michael Horowitz

IG report hearing part 6: Chuck Grassley, Patrick Leahy question Michael Horowitz

IG report hearing part 7: Senators question Michael Horowitz

IG report hearing part 8: Senators continue to question Michael Horowitz

PART 1: Inspector General FISA Investigation President Trump – Senate Hearing

PART 2: Inspector General FISA Investigation President Trump – Senate Hearing

Justice Department Inspector General Horowitz Testifies to Senate | NowThis

3 of the spies Obama used to set up Trump! 

Obama’s CIA chief and FBI director used spies (Joseph Mifsud, Alexander Downer, Stefan Halper) in an attempt to infiltrate Trump’s campaign through Papadopoulos and others to help set up the Russian collusion probe. Why wasn’t any of this mentioned in the Mueller Report?

Spy vs. Spy: Operation Boomerang has begun! 🕵 Pt 2 of 2 (5/3/2019)

Key source in Russia probe has Clinton connection

Australian diplomat that prompted Russia probe linked to Clintons

Mark Humphries reveals the Alexander Downer plot to bring down Donald Trump | 7.30

Alexander Downer has put Australia in a diabolical position’

IG’s Report Reveals 4 Spurious Allegations as Basis for FBI Spying on Trump Campaign Aide

Dec 12th, 2019

Commentary By

Hans A. von Spakovsky@HvonSpakovsky

Election Law Reform Initiative and Senior Legal Fellow

John Malcolm@malcolm_john

Vice President, Institute for Constitutional Government

Charles “Cully” Stimson@cullystimson

Senior Legal Fellow & Manager, National Security Law Program

KEY TAKEAWAYS

Horowitz’s report exposes 17 flagrant errors, omissions, and misstatements in the four FISA applications related to Page, any one of which is inexcusable.

The fact that the Foreign Intelligence Surveillance Act was apparently misused to target a presidential campaign is shocking.

It seems reasonable to conclude that this unprecedented FBI intelligence operation against a presidential campaign should never have been opened in the first place.

A shocking report by the Justice Department’s inspector general lays bare the FBI’s “serious performance failures” in conducting a counterintelligence operation in 2016 against the Trump campaign.

Inspector General Michael Horowitz’s 434-page report details numerous mistakes, errors, and omissions by FBI personnel in four applications for special warrants to spy on Trump campaign aide Carter Page under the Foreign Intelligence Surveillance Act.

Horowitz released his long-awaited report Monday on the FBI’s four applications for the FISA warrants to conduct electronic eavesdropping on Page as part of the bureau’s investigation into potential collusion between the Russian government and members of the Trump campaign.

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Horowitz’s report says he did not find any “documentary or testimonial evidence” that political bias influenced the FBI’s decision to seek authority to surveil Page in Operation Crossfire Hurricane, the code name the FBI gave to the investigation.

The Foreign Intelligence Surveillance Court considers applications by the U.S. government for approval of electronic surveillance, physical search, and other forms of investigative actions for foreign intelligence purposes. The court’s proceedings are secret, and the federal judges that sit on the court are appointed by the chief justice of the Supreme Court.

Because the Foreign Intelligence Surveillance Act is such a powerful tool and given the potential for abuse, FBI policy mandates that case agents ensure that all factual statements in an application for a FISA warrant be “scrupulously accurate”—an understandably high bar.

Yet Horowitz’s report exposes 17 flagrant errors, omissions, and misstatements in the four FISA applications related to Page, any one of which is inexcusable.

In fact, those mistakes, errors, and omissions were so serious that we have serious doubts as to whether any of the four FISA court judges would have approved any of the warrant applications in the first place, had they been provided the full and complete information in the hands of the FBI.

Flashback to Russia’s Meddling in 2016 Campaign

Before getting into the devastating findings of the IG report, it is important to step back and think about what was happening in 2016.

According to special counsel Robert Mueller’s report, the Russian government “interfered in the 2016 presidential election in sweeping and systemic fashion.”  By mid-2016, the Russian operations began to surface.

That June, the Democratic National Committee announced that Russian hackers had compromised the party’s computer network. Releases of hacked materials via WikiLeaks began that same month. WikiLeaks released additional materials in July, October, and November.

In July 2016, an official with a foreign government, reported to be Alexander Downer, the Australian high commissioner to the United Kingdom at the time, contacted the FBI about a conversation he had at a bar two months beforehand with Trump campaign adviser George Papadopoulos.

Downer claimed that Papadopoulos “suggested” that the Trump campaign had received “some kind of suggestions” from the Russian government that it could assist the Trump campaign by releasing damaging information against rival Hillary Clinton. Pretty vague stuff.

So in 2016, our government and our FBI knew that Russia was trying to interfere with our presidential election, and that, quite possibly, the Russians were in contact with a member of the Trump campaign. Rather than providing a defensive briefing to high-level members of the Trump campaign about this innuendo of an innuendo, the FBI opted to initiate a full-blown investigation of members of the campaign whom it thought might be implicated, including Page, who has said he never met Donald Trump.

Embarking down the path of investigating the campaign of a major party’s candidate for president is, of course, a momentous and potentially perilous undertaking. If there were ever a time for the FBI director, and senior members of his inner circle, to take personal ownership of a case and abide by and exceed the “scrupulously accurate” standard for FISA applications, that was the time.

But that didn’t happen. In fact, the opposite happened, as Horowitz makes clear in his report. This was a monumental failure by then-FBI Director James Comey and his subordinates.

The 4 Disputed ‘Facts’ in the Steele ‘Dossier’ Targeting Trump

At the center of the four FISA applications targeting Page was opposition research work done by Christopher Steele—a former British intelligence officer who had previously provided information to the FBI—at the behest of Fusion GPS, a research and intelligence company that was acting on behalf of the Clinton campaign.

The so-called Steele dossier was actually a series of reports provided directly to the FBI by Steele beginning in September 2016. After the FBI officially terminated Steele as an approved “confidential source,” the reports were provided through Bruce Ohr, a high-ranking Justice Department official, whose wife worked for Fusion GPS. Ohr continued to meet with Steele and pass along information from him to the FBI, in violation of departmental policy.

The information that Steele provided clearly implicated the Trump campaign in illegal activity with the Russians to interfere in the 2016 election. But was it accurate? According to the inspector general, the Steele dossier played a “central and essential role in the FBI’s and [Justice] Department’s decision to seek the FISA order.”  And it’s easy to see how.

Although the FBI considered filing an application after receiving the information from Downer in July, FBI attorneys declined to do so because they did not believe that the requisite “probable cause” existed to justify issuing a FISA warrant. According to FBI officials, the information they received from Steele in September “pushed [the FISA proposal] over the line,” and they applied for the warrant.

Critical to the application was the explosive allegation that Page was coordinating with the Russian government on 2016 presidential election activities, and was, therefore, acting as a foreign agent. For this, the FBI “relied entirely” on four “facts” that Steele had reported:

1. The Russians had been compiling information about Hillary Clinton for years and had been feeding that information to the Trump campaign for an extended period of time.

2. During a trip to Moscow in July 2016, Page met with the head of a Russian energy conglomerate (Igor Sechin) and a highly placed Russian official (Igor Divyekin) to discuss sharing derogatory information about Clinton with the Trump campaign in exchange for future cooperation and the lifting of Ukraine-related U.S. sanctions against Russia.

3. Page was an intermediary between Russia and Paul Manafort, chairman of the Trump campaign from June to August 2016, as part of a “well-developed conspiracy” of cooperation that led to Russia disclosing hacked Democratic National Committee emails via WikiLeaks and to the campaign’s decision to “sideline” Russian intervention in Ukraine as a campaign issue.

4. Russia’s release of the DNC emails was designed to help the Trump campaign and was “an objective conceived and promoted by Page.”

As it is, the FBI had in its possession, or would shortly obtain, information undercutting all four of these allegations, which the FBI never brought to the attention of the FISA court in its original application against Page or in any of the three applications to renew surveillance.

IG Identifies 7 ‘Significant Inaccuracies and Omissions’ by FBI

Horowitz’s report says he found seven “significant inaccuracies and omissions”—glaring errors, really—in the first FISA application to surveil Page.

First, the FBI failed to inform the FISA court that it had been notified by another government agency (presumably within the intelligence community) that Page had provided information to that agency (and to the FBI) about some of his contacts with Russian intelligence agents and had been approved to have “operational contact” with those Russian agents.

In other words, the very contacts that the FBI cited in the FISA application to establish that Page was really a clandestine foreign agent were known to and had been approved by another U.S. intelligence agency.  The IG report also states that an FBI lawyer—reported to be Kevin Clinesmith—subsequently altered a document he received from the other agency to indicate, falsely, that Page was not a source for that other agency.

Second, to bolster Steele’s credibility, the application stated that his prior reporting had been “corroborated and used in criminal proceedings.” But in fact, most of that information had not been corroborated, and none of it had  been used in a criminal proceeding.

Third, while Steele informed the FBI that the critical information he was reporting about Page came from a “sub-source,” the FISA application left out the fact that Steele described this source as a “boaster” and an “egoist” who “may engage in some embellishment.”

Fourth, to bolster Steele’s credibility, the FISA application stated that some of the information that Steele reported had appeared in an article in Yahoo News, and that Steele was not the source for that story. This implied that somebody else had the same information Steele had and could serve as independent corroboration. However, it turns out that Steele was the source for that story, and that the FBI either knew it or easily could have learned it.

Fifth, the FISA application included the information that the FBI had received from Downer about his conversation with Papadopoulos. But it did not include the fact that during a subsequent secretly recorded conversation in September with an FBI confidential source, Papadopoulos explicitly denied that anyone associated with the Trump campaign was collaborating with the Russians or any other outside group, including WikiLeaks, with respect to the disclosed DNC emails.

Sixth, although the FBI included the four allegations above, it did not include the fact that during a later secretly recorded conversation in August with an FBI confidential source, Page said that he never had met or spoken to Manafort and that Manafort had not responded to any of his emails.

And seventh, in another secretly recorded conversation with an FBI source in October, Page denied meeting the Russians Sechin and Divyekin, and denied even knowing who Divyekin was.

10 More Errors in FBI Applications to Spy on Carter Page 

The IG report also concludes that after the FISA court approved the first warrant application, the FBI learned more information—some of it from secretly recorded conversations by its own confidential informants—that cast serious doubt on the facts contained in that application.

Yet the FBI didn’t bring this information to the attention of the FISA court, and the errors were repeated in the three renewal applications to continue surveilling Page.

The 10 additional errors—17 in all—included these facts:

The FBI eventually interviewed Steele’s sub-source, who undercut many factual statements that Steele had attributed to him.

—The FBI spoke to some individuals who had professional dealings with Steele who said he demonstrated “poor judgment” and “pursued people with political risk but no intelligence value.”

—The individual (Joseph Mifsud) who allegedly told Papadopoulos that the Russians had dirt on Hillary Clinton denied having said that or having suggested that the Trump campaign received an offer of assistance from the Russians.

—Bruce Ohr, the high-ranking Justice Department official, had specifically informed the FBI that Steele’s information was being provided to the Clinton campaign, and that Steele was “desperate and passionate about [Trump] not being the U.S. President.”

Horowitz concluded that all of these “factual misstatements and omissions [when] taken together resulted in FISA applications that made it appear that the information supporting probable cause was stronger than was actually the case.”  

‘Basic Errors’ Raise Questions About FBI Chain of Command

Thus, it seems reasonable to conclude that this unprecedented FBI intelligence operation against a presidential campaign should never have been opened in the first place.

The IG report paints a damning picture of everyone involved in this case, from the FBI’s Crossfire Hurricane team to Comey, and everyone in between. The report notes:

That so many basic and fundamental errors were made by three separate, hand-picked teams on one of the most sensitive FBI investigations that was briefed to the highest levels within the FBI … raised significant questions regarding the FBI chain of command’s management and supervision of the FISA process.

Later, the report soberly concludes: “ … this was a failure of not only the operational team, but also of the managers and supervisors, including senior officials, in the chain of command.”

Those trying to minimize the shocking findings in this report have focused on the IG’s statement that he could not “find documentary or testimonial evidence of intentional misconduct,” or that “political bias or improper motivation” influenced the decision to open the investigation. But the IG also said he “did not receive satisfactory explanations for the errors or problems” that he identified in the FBI’s work.

Moreover, this may not be the last word on the subject. Horowitz candidly admits in the report that “[b]ecause the activities of other agencies were not within the scope of this review, we did not seek to obtain records from them that the FBI never received or reviewed, except for a limited amount of State Department records relating to Steele.”  

The IG says his office “did not seek to assess the actions taken by or information available to U.S. government agencies outside the Department of Justice, as those agencies are outside our jurisdiction.”

Attorney General Finds ‘Clear Abuse of the FISA Process’

Connecticut U.S. Attorney John Durham, who has been tasked by Attorney General William Barr to conduct a criminal investigation into the origins of the FBI’s Russia probe, is not similarly constrained.

Following release of the IG report Monday, Durham stated:

[O]ur investigation has included developing information from other persons and entities, both in the U.S. and outside of the U.S. Based on the evidence collected to date, and while our investigation is ongoing, last month we advised the Inspector General that we do not agree with some of the report’s conclusions as to predication and how the FBI case was opened.

Barr also weighed in on the IG’s findings. In a press release Monday, Barr said the IG report “makes clear the FBI launched an intrusive investigation of a U.S. presidential campaign on the thinnest of suspicions that, in my view, were insufficient to justify the steps taken.” In fact, from the very beginning, Barr added, “the evidence produced by the investigation was consistently exculpatory.”

In the strongest condemnation of the FBI in recent memory by an attorney general, Barr said that in their “rush to obtain and maintain FISA surveillance” of individuals involved in the Trump campaign, “FBI officials misled the FISA court, omitted critical exculpatory facts from their filings, and suppressed or ignored information negating the reliability of their principal source.”  

What happened, Barr said, “reflects a clear abuse of the FISA process.”

As the attorney general said, “FISA is an essential tool for the protection of the safety of the American people.” It is a tool we need for national security purposes to protect us from foreign espionage.

The fact that the Foreign Intelligence Surveillance Act was apparently misused to target a presidential campaign is shocking, and Barr promises that he will take “whatever steps are necessary to rectify the abuses that occurred and to ensure the integrity of the FISA process going forward.”

At the very least, Horowitz has uncovered a massive failure of leadership at all levels of the FBI with respect to one of the most important investigations in the agency’s history. Whether there is more to this story will depend, in part, on what Durham uncovers.

This piece originally appeared in The Daily Signal

https://www.heritage.org/crime-and-justice/commentary/igs-report-reveals-4-spurious-allegations-basis-fbi-spying-trump

Lindsey Graham unloads on James Comey’s FBI accusing it of a ‘vast criminal conspiracy’ for using Christopher Steele’s discredited dossier to get eavesdropping warrant during Trump-Russia probe

  • Sen. Lindsey Graham opened Judiciary hearing by tearing into the Dossier’s unproven claims
  • He says John McCain showed him the dossier after it was handed to him in 2016
  • Says he said ‘Oh my God’ and concluded either Russians have something on Trump or could be ‘disinformation’
  • Blasted FBI leadership and read through anti-Trump texts of FBI lovers
  • Said FBI director Wray: ‘You got a problem’  
  • ‘It is stunning it is damning it is salacious, and it’s a bunch of crap’
  • Sen. John Kennedy on IG report revelations: ‘It made me want to heave’

Judiciary Committee Chairman Sen. Lindsey Graham opened a high-stakes hearing with the Justice Department’s inspector general by blasting ex-British intelligence officer Christopher Steele’s ‘golden showers’ dossier and the FBI for using it.

Graham said when he first saw the dossier during the 2016 campaign, it initially confronted him with the possibility Russians ‘have something’ on Donald Trump. Otherwise, he said, there could have been a Russian ‘disinformation campaign’ going on.

The South Carolinian Republican also revealed that the late Sen. John McCain, who obtained the dossier during the campaign after attending a security conference in Canada, shared it with him. Graham ran for president in 2016 as one of a bevy of Republicans.

He accused the FBI of a ‘vast criminal conspiracy’ for its handling of the FISA warrant to monitor Carter Page, a one-time Trump campaign staffer.

‘What has been described as a few irregularities becomes a massive criminal conspiracy over time to defraud the FISA court, to illegally surveil an American citizen and keep an operation open against a sitting president of the United States — violating every norm known to the rule of law,’ he said.

He said the code name for the FBI investigation, ‘Crossfire Hurricane,’ was an apt title ‘because that’s what we ended up with – a “Crossfire Hurricane.”‘

‘What happened here is the system failed. People in the highest levels of government took the law into their own hands,’ said Graham, a close Trump ally.

Sen. Lindsey Graham blasted what he called the 'golden showers' dossier, and called it a bunch of 'crap'

Sen. Lindsey Graham blasted what he called the ‘golden showers’ dossier, and called it a bunch of ‘crap’

He said McCain learned about the dossier while attending a December 2016 conference.

‘John McCain puts it in his safe, he gives it to me and I read it,’ Graham said in an angry speech before IG Michael Horowitz, who testified on his report Wednesday.

‘And the first thing I thought of was, ‘Oh my god,’ said Graham. ‘This could be Russia disinformation and they may have something on Trump.’

Graham, who has become one of Trump’s closest GOP allies in the Senate, used the term ‘golden showers’ to reference an unproven allegation from Steele’s dossier, which cited ‘perverted’ conduct inside a Moscow hotel room during the 2013 Miss Universe Pageant.

Senate Judiciary Committee Chairman Lindsey Graham (R-SC) holds up the Steel dossier as Michael Horowitz, inspector general for the Justice Department, testifies before the Senate Judiciary Committee

U.S. Justice Department Inspector General Michael Horowitz arrives to testify before a Senate Judiciary Committee hearing "Examining the Inspector General's report on alleged abuses of the Foreign Intelligence Surveillance Act (FISA)" on Capitol Hill in Washington, U.S., December 11, 2019

U.S. Justice Department Inspector General Michael Horowitz arrives to testify before a Senate Judiciary Committee hearing ‘Examining the Inspector General’s report on alleged abuses of the Foreign Intelligence Surveillance Act (FISA)’ on Capitol Hill in Washington, U.S., December 11, 2019

Graham also tore into Christopher Steele, the former MI6 agent who wrote what became the dossier

Donald Trump and Olivia Culpo attend the red carpet at Miss Universe Pageant Competition 2013 on November 9, 2013 in Moscow, Russia. The IG found additional information that undermined Steele's sub-source who informed him about the unproven allegations against Trump

Donald Trump and Olivia Culpo attend the red carpet at Miss Universe Pageant Competition 2013 on November 9, 2013 in Moscow, Russia. The IG found additional information that undermined Steele’s sub-source who informed him about the unproven allegations against Trump

The DOJ's Inspector General included the information in his report

The DOJ’s Inspector General included the information in his report

President Donald Trump tweeted out a smiling photo of himself with Russian foreign minister Sergei Lavrov on Tuesday

Miss USA 2013 Erin Brady and Donald Trump (C), co-owner of the Miss Universe Organization, look on as Aras Agalarov, father of Russian singer Emin Agalarov, speaks during a news conference after the 2013 Miss USA pageant at the Planet Hollywood Resort and Casino in Las Vegas, Nevada June 16, 2013

Miss USA 2013 Erin Brady and Donald Trump (C), co-owner of the Miss Universe Organization, look on as Aras Agalarov, father of Russian singer Emin Agalarov, speaks during a news conference after the 2013 Miss USA pageant at the Planet Hollywood Resort and Casino in Las Vegas, Nevada June 16, 2013

Graham fumed: ‘It is stunning, it is damning, it is salacious, and it’s a bunch of crap.’

Russian President Vladimir Putin

Russian President Vladimir Putin

‘This is not normal. Don’t judge the FBI and the Department of Justice by these characters,’ Graham said, referencing FBI officials involved in the ‘Crossfire Hurricane’ probe who have come under scrutiny.

Graham spent a long stretch of his opening remarks tearing into the ‘FBI lovers’ Peter Strzrok and Lisa Page. He read through their anti-Trump texts, while the witness listened and C-span cameras rolled.

He blasted the decision to probe members of Trump’s foreign policy team who had had Russia contacts, even before Horowitz testified the probe was started ‘in compliance with Department and FBI policies’ and that he didn’t uncover evidence ‘that political bias or improper motivation’ influenced the decision.

‘This national security team was literally picked up off the street,’ Graham thundered.

He wanted to know why Trump didn’t get informed about the use of investigative techniques against his campaign. ‘Why didn’t they tell Trump? We’ll figure that out later. But I think it’s a question that needs to be asked,’ Graham said.

In addition to testifying that that probe was properly predicated under FBI procedures, Horowitz testified that the Russia probe team obtained information from Steele’s primary sub-source in January 2017 ‘that raised significant questions about the reliability of the Steele reporting that was used in the Carter Page’ surveillance warrant.

Graham accused James Comey's FBI of a 'vast criminal conspiracy'

Graham accused James Comey’s FBI of a ‘vast criminal conspiracy’

Horowitz’s testimony came during a political charged hearing, with lawmakers spit upon party lines on the same day the House Judiciary committee was taking up articles of impeachment against President Trump accusing him of abuse of power and obstruction of Congress.

‘I think the activities we found don´t vindicate anybody,’ said Horowitz.

Horowitz defended the need to keep whistle-blowers anonymous under questioning by Democratic Sen. Dianne Feinstein.

‘Whistle-blowers have a right to expect complete full confidentiality in all circumstances … and it’s a very important provision’, Horowitz said. He said it was a legal obligation set in statute.

Sen. John Kennedy of Louisiana used his usual home-spun language to express astonishment about what was uncovered about FBI conduct.

‘After about 15 per cent of the way through, it made me want to heave. After about 20 percent of the way through I thought I’d dropped acid. It’s surreal,’ he said.

Graham issued his pronouncements even while acknowledging the reality of Russian interference to hurt Democrat Hillary Clinton in 2016.

‘We know the Russians were screwing around with the Democrats, right?’ Graham said.

Democrats tried to get Horowitz to defend his 480-page probe from criticism by Attorney General Bill Barr, who blasted its conclusions in TV interviews but failed to take the traditional route of attaching written objections.

Horowitz tried not to play along. Asked about Barr’s trips abroad to assist a separate probe by prosecutor John Durham, he said: ‘I think you’d have to ask the attorney general about those meetings.’

 Federal prosecutor John Durham told Horowitz his view that the FBI should have opened a limited probe than the one it did open. Horowitz told lawmakers. he didn’t agree.

‘None of the discussions changed our findings,’ he said.

Republicans bashed the FBI for having a Crossfire Hurricane agent participate in a security briefing provided to the Trump campaign – then file notes on what participants including Mike Flynn said. Flynn, Trump’s national security advisor, later pleaded guilty to lying to investigators.

Sen. John Cornyn brought up Comey’s post-election briefing of Trump about the dossier in Trump tower, and asked if he told the president ‘anything he said can be used against him.’

Sen. Sheldon White House (D-R.I.) addressed one reason why the FBI resisted telling Trump officials. He said investigators ‘did not then now how far Russian penetration into the Trump campaign went.’

‘It raises significant policy questions,’ Horowitz said.

‘We are deeply concerned that so many basic and fundamental errors were made by three separate, hand-picked investigative teams, on one of the most sensitive FBI investigations, after the matter had been briefed to the highest levels within the FBI,’ Horowitz said.

Inspector General Michael Horowitz slams ‘failure’ by FBI leaders who used Christopher Steele’s anti-Trump dossier and tells Senate of ‘basic and fundamental errors’ in Russia probe

The Justice Department’s internal watchdog told Congress on Wednesday that he is concerned that ‘so many basic and fundamental errors’ were made by the FBI as it investigated ties between the Trump campaign and Russia.

Michael Horowitz’s testimony before the Senate Judiciary Committee comes two days after the release of a report that identified significant problems with applications to receive and renew warrants to eavesdrop on a former Trump campaign aide in 2016 and 2017.

Despite those problems, the report also found that the FBI’s actions were not motivated by partisan bias and that the investigation was opened for a proper cause.

Horowitz will tell senators that the FBI failed to follow its own standards for accuracy and completeness when it sought a warrant to monitor the communications of ex-campaign aide Carter Page.

Scathing: Michael Horowitz, the Judiciary Inspector General, outlined a series of criticisms of the FBI as he gave evidence on his report into the Trump-Russia probe, which was codenamed Crossfire Hurricane

Scathing: Michael Horowitz, the Judiciary Inspector General, outlined a series of criticisms of the FBI as he gave evidence on his report into the Trump-Russia probe, which was codenamed Crossfire Hurricane

Team: Michael Horowitz was flanked by investigators from the 18-month probe, which resulted in Monday's report, which ran to more than 400 pages

Team: Michael Horowitz was flanked by investigators from the 18-month probe, which resulted in Monday’s report, which ran to more than 400 pages
Concern: Senate Judiciary Committee chairman Lindsey Graham brandishes the Steele dossier, which Horowitz said FBI leaders relied on despite knowing about concerns over it

Concern: Senate Judiciary Committee chairman Lindsey Graham brandishes the Steele dossier, which Horowitz said FBI leaders relied on despite knowing about concerns over it

Horowitz’s statement largely echoed his scathing Monday report on the FBI’s handling of the Trump-Russia probe.

He told the committee that the FBI relied on Christopher Steele’s dossier to get a FISA warrant to monitor Carter Page, a one-time Donald Trump campaign aide.

But when it found out that the dossier was flawed and were advised of some of the flaws by a Department of Justice attorney, it did not tell the FISA court which issued the warrant.

‘We found that members of the Crossfire Hurricane team failed to meet the basic obligation to ensure that the Carter Page FISA applications were ”scrupulously accurate,” he said.

There were four applications for a warrant on Page.

But Horowitz said: ‘We identified significant inaccuracies and omissions in each of the four applications: 7 in the first FISA application and a total of 17 by the final renewal application.

‘For example, the Crossfire Hurricane team obtained information from Steele’s Primary Sub-source in January 2017 that raised significant questions about the reliability of the Steele reporting that was used in the Carter Page FISA applications.

‘This was particularly noteworthy because the FISA applications relied entirely on information from the Steele reporting to support the allegation that Page was coordinating with the Russian government on 2016 U.S. presidential election activities.

‘However, members of the Crossfire Hurricane team failed to share the information about the Primary Sub-source’s information with the Department, and it was therefore omitted from the three renewal applications.’

Horowitz did not name any FBI leaders in his statement to senators, but had already outlined in his report that James Comey, the FBI director, Andrew McCabe, his deputy, and other senior FBI leaders were involved in supervising the Crossfire Hurricane probe

Key figures: James Comey's FBI opened the probe into one-time Trump campaign aide Carter Page. The FBI obtained a FISA warrant which relied on the Steele dossier

Key figures: James Comey's FBI opened the probe into one-time Trump campaign aide Carter Page. The FBI obtained a FISA warrant which relied on the Steele dossier

Key figures: James Comey’s FBI opened the probe into one-time Trump campaign aide Carter Page. The FBI obtained a FISA warrant which relied on the Steele dossier

‘FBI leadership supported relying on Steele’s reporting to seek a FISA order targeting Page after being advised of, and giving consideration to, concerns expressed by a Department attorney that Steele may have been hired by someone associated with a rival candidate or campaign,’ he said.

Horowitz also raised questions over the FBI’s policies on FISA use generally.

 ‘We also identified what we believe is an absence of sufficient policies to ensure appropriate Department oversight of significant investigative decisions that could affect constitutionally protected activity,’ Horowitz said, according to his prepared remarks as released by the committee before the hearing.

The report has produced sharp partisan divisions. Democrats seized on the finding that the probe was not tainted by political motivations. But Republicans say the findings show the investigation was fatally flawed. Attorney General William Barr, a vocal defender of President Donald Trump, said the FBI investigation was based on a ‘bogus narrative.’

Sen. Lindsey Graham of South Carolina, the top Republican on the committee and another ally of Trump, echoed that sentiment in his opening statement. He said the code name for the FBI investigation, ‘Crossfire Hurricane,’ was an apt title ‘because that’s what we ended up with – a `Crossfire Hurricane.”

‘What happened here is the system failed. People in the highest levels of government took the law into their own hands,’ Graham said.

MICHAEL HOROWITZ’S FULL SENATE STATEMENT ON HIS TRUMP-RUSSIA PROBE 

Mr. Chairman, Senator Feinstein, and Members of the Committee

Thank you for inviting me to testify at today’s hearing to examine the report that my office issued yesterday entitled, ‘Review of Four FISA Applications and Other Aspects of the FBI’s Crossfire Hurricane Investigation.’ 

In July 2016, three weeks after then FBI Director James Comey announced the conclusion of the Federal Bureau of Investigation’s (FBI) ‘Midyear Exam’ investigation into presidential candidate Hillary Clinton’s handling of government emails during her tenure as Secretary of State, the FBI received reporting from a Friendly Foreign Government (FFG) that, in a May 2016 meeting with the FFG, Trump campaign foreign policy advisor George Papadopoulos ‘suggested the Trump team had received some kind of a suggestion’ from Russia that it could assist in the election process with the anonymous release of information during the campaign that would be damaging to candidate Clinton and President Obama. 

Days later, on July 31, the FBI initiated the Crossfire Hurricane investigation that is the subject of our report. 

As we noted last year in our review of the Midyear investigation, the FBI has developed and earned a reputation as one of the world’s premier law enforcement agencies in significant part because of its tradition of professionalism, impartiality, non-political enforcement of the law, and adherence to detailed policies, practices, and norms. 

It was precisely these qualities that were required as the FBI initiated and conducted Crossfire Hurricane. 

However, as we describe in this report, our review identified significant concerns with how certain aspects of the investigation were conducted and supervised, particularly the FBI’s failure to adhere to its own standards of accuracy and completeness when filing applications for Foreign Intelligence Surveillance Act (FISA) authority to surveil Carter Page, a U.S. person who was connected to the Donald J. Trump for President Campaign. 

We also identified what we believe is an absence of sufficient policies to ensure appropriate Department oversight of significant investigative decisions that could affect constitutionally protected activity. 

In my statement today, I highlight some of the most significant findings in our report. 

A more detailed overview of our findings can be found in the report’s Executive Summary. 

Our findings are the product of a comprehensive review that examined more than one million documents in the Department’s and FBI’s possession, including documents that other U.S. and foreign government agencies provided the FBI during the Crossfire Hurricane investigation. 

Our team conducted over 170 interviews involving more than 100 witnesses, and we documented all of our findings in a 417-page report. 

I want to commend the work of our review team for conducting rigorous and effective oversight, and for producing a report and recommendations that we believe will improve the FBI’s ability to most effectively utilize the national security authorities analyzed in this review, while also striving to safeguard the civil liberties and privacy of impacted U.S. persons. 

The Opening of Crossfire Hurricane and the Use of Confidential Human Sources Following receipt of the FFG information, a decision was made by the FBI’s then Counterintelligence Division (CD) Assistant Director (AD), E.W. ‘Bill’ Priestap, to open Crossfire Hurricane and reflected a consensus reached after multiple days of discussions and meetings among senior FBI officials. 

We concluded that AD Priestap’s exercise of discretion in opening the investigation was in compliance with Department and FBI policies, and we did not find documentary or testimonial evidence that political bias or improper motivation influenced his decision. 

While the information in the FBI’s possession at the time was limited, in light of the low threshold established by Department and FBI predication policy, we found that Crossfire Hurricane was opened for an authorized investigative purpose and with sufficient factual predication. 

However, we also determined that, under Department and FBI policy, the decision whether to open the Crossfire Hurricane counterintelligence investigation, which involved the activities of individuals associated with a national major party campaign for president, was a discretionary judgment call left to the FBI.

There was no requirement that Department officials be consulted, or even notified, prior to the FBI making that decision. 

We further found that, consistent with this policy, the FBI advised supervisors in the Department’s National Security Division (NSD) of the investigation after it had been initiated. 

As we detail in Chapter Two, high level Department notice and approval is required in other circumstances where investigative activity could substantially impact certain civil liberties, and that notice allows senior Department officials to consider the potential constitutional and prudential implications in advance of these activities. 

We concluded that similar advance notice should be required in circumstances such as those that were present here. 

Shortly after the FBI opened the Crossfire Hurricane investigation, the FBI conducted several consensually monitored meetings between FBI confidential human sources (CHS) and individuals affiliated with the Trump campaign, including a high-level campaign official who was not a subject of the investigation. 

We found that the CHS operations received the necessary approvals under FBI policy; that an Assistant Director knew about and approved of each operation, even in circumstances where a first-level supervisory special agent could have approved the operations; and that the operations were permitted under Department and FBI policy because their use was not for the sole purpose of monitoring activities protected by the First Amendment or the lawful exercise of other rights secured by the Constitution or laws of the United States. 

We did not find any documentary or testimonial evidence that political bias or improper motivation influenced the FBI’s decision to conduct these operations. 

Additionally, we found no evidence that the FBI attempted to place any CHSs within the Trump campaign, recruit members of the Trump campaign as CHSs, or task CHSs to report on the Trump campaign. 

However, we are concerned that, under applicable Department and FBI policy, it would have been sufficient for a first-level FBI supervisor to authorize the sensitive domestic CHS operations undertaken in Crossfire Hurricane, and that there is no applicable Department or FBI policy requiring the FBI to notify Department officials of a decision to task CHSs to consensually monitor conversations with members of a presidential campaign. 

Specifically, in Crossfire Hurricane, where one of the CHS operations involved consensually monitoring a high-level official on the Trump campaign who was not a subject of the investigation, and all of the operations had the potential to gather sensitive information of the campaign about protected First Amendment activity, we found no evidence that the FBI consulted with any Department officials before conducting the CHS operations—and no policy requiring the FBI to do so.

We therefore believe that current Department and FBI policies are not sufficient to ensure appropriate oversight and accountability when such operations potentially implicate sensitive, constitutionally protected activity, and that requiring Department consultation, at a minimum, would be appropriate. 

The FISA Applications to Conduct Surveillance of Carter Page One investigative tool for which Department and FBI policy expressly require advance approval by a senior Department official is the seeking of a court order under the FISA. 

When the Crossfire Hurricane team first proposed seeking a FISA order targeting Carter Page in midAugust 2016, FBI attorneys assisting the investigation considered it a ‘close call’ whether they had developed the probable cause necessary to obtain the order, and a FISA order was not requested at that time.

However, in September 2016, immediately after the Crossfire Hurricane team received reporting from Christopher Steele concerning Page’s alleged recent activities with Russian officials, FBI attorneys advised the Department that the team was ready to move forward with a request to obtain FISA authority to surveil Page. 

FBI and Department officials told us the Steele reporting ‘pushed [the FISA proposal] over the line’ in terms of establishing probable cause, and we concluded that the Steele reporting played a central and essential role in the decision to seek a FISA order.

FBI leadership supported relying on Steele’s reporting to seek a FISA order targeting Page after being advised of, and giving consideration to, concerns expressed by a Department attorney that Steele may have been hired by someone associated with a rival candidate or campaign. 

The authority under FISA to conduct electronic surveillance and physical searches targeting individuals significantly assists the government’s efforts to combat terrorism, clandestine intelligence activity, and other threats to the national security. 

At the same time, the use of this authority unavoidably raises civil liberties concerns. 

FISA orders can be used to surveil U.S. persons, like Carter Page, and in some cases the surveillance will foreseeably collect information about the individual’s constitutionally protected activities, such as Page’s legitimate activities on behalf of a presidential campaign. 

Moreover, proceedings before the Foreign Intelligence Surveillance Court (FISC)—which is responsible for ruling on applications for FISA orders—are ex parte, meaning that unlike most court proceedings, the government is the only party present for the proceedings. 

In addition, unlike the use of other intrusive investigative techniques (such as wiretaps under Title III and traditional criminal search warrants) that are granted in ex parte hearings but can potentially be subject to later court challenge, FISA orders have not been subject to scrutiny through subsequent adversarial proceedings.

In light of these concerns, Congress through the FISA statute, and the Department and FBI through policies and procedures, have established important safeguards to protect the FISA application process from irregularities and abuse. 

Among the most important are the requirements in FBI policy that every FISA application must contain a ‘full and accurate’ presentation of the facts, and that agents must ensure that all factual statements in FISA applications are ‘scrupulously accurate.’ 

These are the standards for all FISA applications, regardless of the investigation’s sensitivity, and it is incumbent upon the FBI to meet them in every application. 

That said, in the context of an investigation involving persons associated with a presidential campaign, where the target of the FISA is a former campaign official and the goal of the FISA is to uncover, among other things, information about the individual’s allegedly illegal campaignrelated activities, members of the Crossfire Hurricane investigative team should have anticipated, and told us they in fact did anticipate, that these FISA applications would be subjected to especially close scrutiny. 

Nevertheless, we found that members of the Crossfire Hurricane team failed to meet the basic obligation to ensure that the Carter Page FISA applications were ‘scrupulously accurate.’ 

We identified significant inaccuracies and omissions in each of the four applications: 7 in the first FISA application and a total of 17 by the final renewal application. 

For example, the Crossfire Hurricane team obtained information from Steele’s Primary Sub-source in January 2017 that raised significant questions about the reliability of the Steele reporting that was used in the Carter Page FISA applications. 

This was particularly noteworthy because the FISA applications relied entirely on information from the Steele reporting to support the allegation that Page was coordinating with the Russian government on 2016 U.S. presidential election activities. 

However, members of the Crossfire Hurricane team failed to share the information about the Primary Sub-source’s information with the Department, and it was therefore omitted from the three renewal applications. 

All of the applications also omitted information the FBI had obtained from another U.S. government agency detailing its prior relationship with Page, including that Page had been approved as an operational contact for the other agency from 2008 to 2013, that Page had provided information to the other agency concerning his prior contacts with certain Russian intelligence officers (one of which overlapped with facts asserted in the FISA application), and that an employee of the other agency assessed that Page had been candid.

As a result of the 17 significant inaccuracies and omissions we identified, relevant information was not shared with, and consequently not considered by, important Department decision makers and the court, and the FISA applications made it appear as though the evidence supporting probable cause was stronger than was actually the case. 

We also found basic, fundamental, and serious errors during the completion of the FBl’s factual accuracy reviews, known as the Woods Procedures, which are designed to ensure that FISA applications contain a full and accurate presentation of the facts. 

We do not speculate whether the correction of any particular misstatement or omission, or some combination thereof, would have resulted in a different outcome. 

Nevertheless, the Department’s decision makers and the court should have been given complete and accurate information so that they could meaningfully evaluate probable cause before authorizing the surveillance of a U.S. person associated with a presidential campaign. 

That did not occur, and as a result, the surveillance of Carter Page continued even as the FBI gathered information that weakened the assessment of probable cause and made the FISA applications less accurate. 

We determined that the inaccuracies and omissions we identified in the applications resulted from case agents providing wrong or incomplete information to Department attorneys and failing to identify important issues for discussion. 

Moreover, we concluded that case agents and Supervisory Special Agents (SSA) did not give appropriate attention to facts that cut against probable cause, and that as the investigation progressed and more information tended to undermine or weaken the assertions in the FISA applications, the agents and SSAs did not reassess the information supporting probable cause. 

Further, the agents and SSAs did not follow, or even appear to know, certain basic requirements in the Woods Procedures.

Although we did not find documentary or testimonial evidence of intentional misconduct on the part of the case agents who assisted NSD’s Office of Intelligence (OI) in preparing the applications, or the agents and supervisors who performed the Woods Procedures, we also did not receive satisfactory explanations for the errors or missing information. 

We found that the offered explanations for these serious errors did not excuse them, or the repeated failures to ensure the accuracy of information presented to the FISC. 

We are deeply concerned that so many basic and fundamental errors were made by three separate, hand-picked investigative teams; on one of the most sensitive FBI investigations; after the matter had been briefed to the highest levels within the FBI; even though the information sought through use of FISA authority related so closely to an ongoing presidential campaign; and even though those involved with the investigation knew that their actions were likely to be subjected to close scrutiny. 

We believe this circumstance reflects a failure not just by those who prepared the FISA applications, but also by the managers and supervisors in the Crossfire Hurricane chain of command, including FBI senior officials who were briefed as the investigation progressed. 

We do not expect managers and supervisors to know every fact about an investigation, or senior leaders to know all the details of cases about which they are briefed. 

However, especially in the FBl’s most sensitive and high-priority matters, and especially when seeking court permission to use an intrusive tool such as a FISA order, it is incumbent upon the entire chain of command, including senior officials, to take the necessary steps to ensure that they are sufficiently familiar with the facts and circumstances supporting and potentially undermining a FISA application in order to provide effective oversight consistent with their level of supervisory responsibility.

Such oversight requires greater familiarity with the facts than we saw in this review, where time and again during OIG interviews FBI managers, supervisors, and senior officials displayed a lack of understanding or awareness of important information concerning many of the problems we identified. 

In the preparation of the FISA applications to surveil Carter Page, the Crossfire Hurricane team failed to comply with FBI policies, and in so doing fell short of what is rightfully expected from a premier law enforcement agency entrusted with such an intrusive surveillance tool. 

In light of the significant concerns identified with the Carter Page FISA applications and the other issues described in this report, the OIG has initiated an audit that will further examine the FBI’s compliance with the Woods Procedures in FISA applications that target U.S. persons in both counterintelligence and counterterrorism investigations. 

We also made the following recommendations to assist the Department and the FBI in avoiding similar failures in future investigations. 

Recommendations 

For the reasons fully described in our report, we recommend the following: 

1. The Department and the FBI should ensure that adequate procedures are in place for the Office of Intelligence (OI) to obtain all relevant and accurate information, including access to Confidential Human Source (CHS) information, needed to prepare FISA applications and renewal applications. This effort should include revising: 

a. the FISA Request Form: to ensure information is identified for OI: (i) that tends to disprove, does not support, or is inconsistent with a finding or an allegation that the target is a foreign power or an agent of a foreign power, or 

(ii) that bears on the reliability of every CHS whose information is relied upon in the FISA application, including all information from the derogatory information sub-file, recommended below; 

b. the Woods Form: (i) to emphasize to agents and their supervisors the obligation to re-verify factual assertions repeated from prior applications and to obtain written approval from CHS handling agents of all CHS source characterization statements in applications, and

(ii) to specify what steps must be taken and documented during the legal review performed by an FBI Office of General Counsel (OGC) line attorney and SES level supervisor before submitting the FISA application package to the FBI Director for certification; 

c. the FISA Procedures: to clarify which positions may serve as the supervisory reviewer for OGC; and d. taking any other steps deemed appropriate to ensure the accuracy and completeness of information provided to OI. 

2. The Department and FBI should evaluate which types of Sensitive Investigative Matters (SIM) require advance notification to a senior Department official, such as the Deputy Attorney General, in addition to the notifications currently required for SIMs, especially for case openings that implicate core First Amendment activity and raise policy considerations or heighten enterprise risk, and establish implementing policies and guidance, as necessary. 

3. The FBI should develop protocols and guidelines for staffing and administrating any future sensitive investigative matters from FBI Headquarters. 

4. The FBI should address the problems with the administration and assessment of CHS

s identified in this report and, at a minimum, should: a. revise its standard CHS admonishment form to include a prohibition on the disclosure of the CHS’s relationship with the FBI to third parties absent the FBI’s permission, and assess the need to include other admonishments in the standard CHS admonishments; 

b. develop enhanced procedures to ensure that CHS information is documented in Delta, including information generated from Headquarters- led investigations, substantive contacts with closed CHSs (directly or through third parties), and derogatory information. We renew our recommendation that the FBI create a derogatory information sub-file in Delta; 

c. assess VMU’s practices regarding reporting source validation findings and non-findings; 

d. establish guidance for sharing sensitive information with CHSs;

e. establish guidance to handling agents for inquiring whether their CHS participates in the types of groups or activities that would bring the CHS within the definition of a ‘sensitive source,’ and ensure handling agents document (and update as needed) those affiliations and any others voluntarily provided to them by the CHS in the Source Opening Communication, the ‘Sensitive Categories’ portion of each CHS’s Quarterly Supervisory Source Report, the ‘Life Changes’ portion of CHS Contact Reports, or as otherwise directed by the FBI so that the FBI can assess whether active CHSs are engaged in activities (such as political campaigns) at a level that might require re-designation as a ‘sensitive source’ or necessitate closure of the CHS; and 

f. revise its CHS policy to address the considerations that should be taken into account and the steps that should be followed before and after accepting information from a closed CHS indirectly through a third party.

5. The Department and FBI should clarify the following terms in their policies: a. assess the definition of a ‘Sensitive Monitoring Circumstance’ in the AG Guidelines and the FBI’s DIOG to determine whether to expand its scope to include consensual monitoring of a domestic political candidate or an individual prominent within a domestic political organization, or a subset of these persons, so that consensual monitoring of such individuals would require consultation with or advance notification to a senior Department official, such as the Deputy Attorney General; and 

b. establish guidance, and include examples in the DIOG, to better define the meaning of the phrase ‘prominent in a domestic political organization’ so that agents understand which campaign officials fall within that definition as it relates to ‘Sensitive Investigative Matters,’ ‘Sensitive UDP,’ and the designation of ‘sensitive sources.’ Further, if the Department expands the scope of ‘Sensitive Monitoring Circumstance,’ as recommended above, the FBI should apply the guidance on ‘prominent in a domestic political organization’ to ‘Sensitive Monitoring Circumstance’ as well.

6. The FBI should ensure that appropriate training on DIOG § 4 is provided to emphasize the constitutional implications of certain monitoring situations and to ensure that agents account for these concerns, both in the tasking of CHSs and in the way they document interactions with and tasking of CHSs. 

7. The FBI should establish a policy regarding the use of defensive and transition briefings for investigative purposes, including the factors to be considered and approval by senior leaders at the FBI with notice to a senior Department official, such as the Deputy Attorney General. 

8. The Department’s Office of Professional Responsibility should review our findings related to the conduct of Department attorney Bruce Ohr for any action it deems appropriate. Ohr’s current supervisors in the Department’s Criminal Division should also review our findings related to Ohr’s performance for any action they deem appropriate.

9. The FBI should review the performance of all employees who had responsibility for the preparation, Woods review, or approval of the FISA applications, as well as the managers, supervisors, and senior officials in the chain of command of the Carter Page investigation, for any action deemed appropriate. 

After reviewing a draft of this report and its recommendations, FBI Director Christopher Wray accepted each of the recommendations above, and we were told ordered more than 40 corrective actions to date to address our recommendations. 

However, more work remains to be done by both the FBI and the Department. 

As I noted above, we believe that implementation of these recommendations, including those that seek individual accountability for the failures identified in our report, will improve the FBI’s ability to more carefully and effectively utilize its important national security authorities like FISA, while also striving to safeguard the civil liberties and privacy of impacted U.S. persons.

The OIG will continue to conduct independent oversight on these matters in the months and years ahead. This concludes my prepared statement, and I am pleased to answer any questions the Committee may have.

https://www.dailymail.co.uk/news/article-7781435/Lindsey-Graham-opens-hearing-Inspector-General-bringing-golden-showers-allegations.html

 

Andrew McCarthy: DOJ vs. IG – Barr and Horowitz’s reported rift over FISA report is bogus spin by Democrats

At Wednesday’s Senate Judiciary Committee hearing about Justice Department Inspector General Michael Horowitz’s report on investigative abuses in the FBI’s Trump-Russia investigation (codenamed “Crossfire Hurricane”), Democrats continued an effort begun ten days ago to hoodwink the public into believing Horowitz is in a bitter dispute with Attorney General William Barr over a key finding in the report.

The dispute allegedly stems from what is portrayed as Barr’s dissent from the IG’s conclusion that the probe was properly predicated – i.e., that there were sufficient factual grounds to open an investigation of whether the Trump campaign was complicit in the Kremlin’s cyberespionage attack on Democratic party email accounts.

In point of fact, as discussed in my Fox News Opinion column on Wednesday, the two men have less a difference of opinion than a difference in focus – the distinction between what may be done and what should be done.

ANDREW MCCARTHY: THE FBI, THE IG REPORT, AND ATTORNEY GENERAL BARR – SEPARATING FACT FROM FICTION

I’m tempted to say there is no real dispute, but let’s leave it at saying the dispute is wildly overstated.

A cautionary note: People should be suspicious about media coverage of the attorney general. For decades, Bill Barr has enjoyed a well-earned reputation for legal acumen and personal integrity. But he is now working for Donald Trump.

Hence, there has for months been an energetic media-Democrat effort to discredit him – in particular, to undermine the investigation he has appointed Connecticut U.S. attorney John Durham to conduct into the origins of the Trump-Russia probe (not just Crossfire Hurricane, but the related investigations involving other domestic and foreign government agencies).

A transparent motivation fuels this effort: The Mueller probe found no evidence of a Trump-Russia conspiracy, notwithstanding the indefatigable “collusion” narrative (explored at length in my book “Ball of Collusion“).

Now the Horowitz IG report has found major abuses in the FBI’s investigation of Trump. The question naturally arises: Why did the Obama administration use the intelligence and law-enforcement apparatus of the government to investigate its political opposition?

Democrats and their media confederates are determined to protect Obama’s legacy from Nixonian taint. Barr, therefore, must be subjected to character assassination.

The specter of political spying, that bane of the Watergate era, is manifest. That is what Barr and Durham are exploring.

Democrats and their media confederates are determined to protect Obama’s legacy from Nixonian taint. Barr, therefore, must be subjected to character assassination.

You know the drill: He is Trump’s lawyer, not America’s. His investigation is politicized, not in good faith and so on.

Yes, the same people who lionized Mueller’s team of partisan Democrats, now feign outraged disbelief at the suggestion that the FBI could possibly have been just a tad political.

That would be the same Bureau that helped whitewash the Clinton emails caper; scorched the earth to find a non-existent conspiracy against Trump; brought us the charming Strzok-Page texts; and has, in just the last two years, been the subject of not one but two voluminous IG reports examining the anti-Trump animus of top investigators.

That is why the Barr-Horowitz contretemps must be exaggerated.

Typical of IG reports, Horowitz’s latest features admirably comprehensive fact-finding but conclusions framed in lawyerly gobbledygook that lend themselves to easy distortion.

As night follows day, the anti-Trump forces pounced: We’re to believe the IG concluded that the Trump-Russia investigation’s commencement was unimpeachable and that there was no political bias in the FBI’s decision-making.

That is not what Horowitz actually said. Since it is important that the public be given accurate information about the Justice Department’s position, the AG has spoken out to clarify what the IG concluded and how DOJ regards these conclusions.

In press coverage, this has been portrayed as a blistering attack on Horowitz.

At Wednesday’s hearing, Senate Judiciary Committee Democrats picked up the theme: Horowitz heroically struggles to uphold the rule of law and standards of impartial fact-finding, but Barr, that diabolical Trumpkin, is determined to bring him down for refusing to brand Crossfire Hurricane a hoax.

Even as this narrative first took wing, there was a clue that it was deceptive, though you had to dig a little to find it.

On December 2, a week before the IG report became public, the Washington Post kicked off the Barr vs. Horowitz tale with a story claiming, based on anonymous sources, that the AG was disputing the IG’s “key” finding that the FBI had enough information to justify launching the probe.

Seven paragraphs in, though, there was an on-the-record statement from a named official: Kerri Kupec, Barr’s spokeswoman. Far from conveying rancor, Ms. Kupec issued a gushing tribute to Horowitz. His investigation, she said: “Is a credit to the Department of Justice. His excellent work has uncovered significant information that the American people will soon be able to read for themselves. Rather than speculating, people should read the report for themselves next week, watch the Inspector General’s testimony before the Senate Judiciary Committee, and draw their own conclusions about these important matters.”

Yes, that’s right. In relating the supposedly intense infighting over the report between Barr and Horowitz, the Post was compelled to note that the only statement traceable to Barr was an enthusiastic endorsement of Horowitz’s work and an encouragement to Americans to read the report and watch the testimony.

What a scurrilous attack!

When Horowitz finally released the report on Monday, Barr himself made a statement. Relying on the IG’s work, rather than contradicting it, the AG observed that the FBI had, “launched an intrusive investigation of a U.S. presidential campaign on the thinnest of suspicions that, in my view, were insufficient to justify the steps taken. [Emphasis added.]

Barr did not disagree with Horowitz on the commencement of the investigation. Horowitz had found that the FBI’s written procedures provide a very low bar in terms of the suspicion that may justify the opening of an investigation.

Barr did not dispute this; he said the investigation was opened “on the thinnest of suspicions.” That is both true and, as Horowitz points out, sufficient.

More from Opinion

Barr thinks it was unwise to open so significant an investigation on such thin evidence. Horowitz is not claiming it was prudent; he is saying the regulations permitted it.

More to the point, Barr’s beef was less with the opening of the investigation than with “the steps taken” after the investigation was opened.

This, plainly, is a reference to the use of intrusive investigative techniques – in particular, confidential informants and FISA surveillance warrants.

Barr’s point is that, given the norm against permitting the incumbent government’s investigative powers to intrude on our political process, it was wrong to use such aggressive tactics given the threadbare basis for suspicion.

Horowitz is not disputing that. He is saying that it is not his place to second-guess discretionary judgment calls about investigative tactics as long as the probe is legitimately opened. And clearly, the IG report is a testament to the abuse of those tactics: the misrepresentations to the FISA court, and the fact that, although the use of informants generated exculpatory evidence, the Bureau inexplicably continued investigating a U.S. political campaign.

“Fake News” is an overused and oft-abused term. In the case of the reported Barr vs. Horowitz controversy, however, it might just be apt.

https://www.foxnews.com/opinion/doj-ig-barr-horowitz-fisa-democrats-andrew-mccarthy

Andrew McCarthy: The FBI, the IG Report, and Attorney General Barr – Separating fact from fiction

 

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The Pronk Pops Show 1323, September 19, 2019, Story 1: Zuckerberg Meets President Trump and Senators — Regulating Big Tech Data Cartel: Internet Regulation, Data Privacy, Bias, Censorship, Filtering, Shadow Banning, Cryptocurrency, Control — Breakup The Big Tech Data Cartel or Threat of Changing Big Tech Platforms to Publishers — Internet Bill of Rights — Videos –Story 2: Department of Justice Charges Health Care Fraud Against 58 Individuals — Pill Mills — Videos —

Posted on September 24, 2019. Filed under: 2020 President Candidates, 2020 Republican Candidates, Addiction, Addiction, Addiction, American History, Blogroll, Breaking News, Bribery, Bribes, Budgetary Policy, Communications, Congress, Corruption, Countries, Crime, Diet, Diets, Diseases, Donald J. Trump, Donald J. Trump, Donald J. Trump, Donald Trump, Drugs, Eating, Economics, Education, Elections, Empires, Environment, European History, Exercise, Federal Government, Fifth Amendment, First Amendment, Fiscal Policy, Food, Fraud, Freedom of Speech, Government, Government Dependency, Government Spending, Hate Speech, Health, History, House of Representatives, Human, Human Behavior, Illegal Drugs, Independence, Killing, Law, Legal Drugs, Life, Media, Medicare, Mental Illness, Networking, News, Nutrition, People, Philosophy, Photos, Politics, Privacy, Private Sector Unions, Progressives, Public Sector Unions, Radio, Raymond Thomas Pronk, Regulation, Rule of Law, Scandals, Senate, Spying, Success, Supplemental Nutrition Assistance Program (SNAP_, Taxation, Taxes, Technology, Ted Cruz, Unions, United Kingdom, United States Constitution, United States of America, Videos, Wealth, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

 

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Story 1: Zuckerberg Meets President Trump and Senators — Regulating Big Tech Data Cartel: Internet Regulation, Data Privacy, Bias, Censorship, Filtering, Shadow Banning, Cryptocurrency, Control — Breakup The Big Tech Data Cartel or Threat of Changing Big Tech Platforms to Publishers — Internet Bill of Rights — Videos —

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Mark Zuckerberg meets with senators on Captiol Hill

Mark Zuckerberg doesn’t answer questions between meetings with senators

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Facebook CEO Mark Zuckerberg meets with President Trump and other lawmakers

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Politico’s Levine: The main issue with Big Tech is the financial relationship between publishers and

Design of the platform business | Paul von Gruben | TEDxTUBerlin

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Measuring Market Concentration

What is HERFINDAHL INDEX? What does HERFINDAHL INDEX mean? HERFINDAHL INDEX meaning & explanation

Market Concentration: Greg Werden on the difficulties in measuring concentration

In this video, Greg Werden, Senior Economic Counsel in the Antitrust Division of the US Department of Justice explains the difficulties in using US census bureau data to measure market concentration and what he thinks about the existing evidence on market power in the US. More materials on this discussion available at http://oe.cd/2gw

Regulations may not hurt big tech companies

Antitrust & Big Tech

Adam Ruins Everything – How the Government Created Tech Monopolies | truTV

States Targeting Big Tech Companies

Feds investigating major tech companies for antitrust violations

Watch out, Google, the U.S. government has an ‘ironclad’ antitrust case

Big Tech and Antitrust: Rethinking Competition Policy for the Digital Era

The Left Ruins Everything

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Ted Cruz’s Opening Statement on Big Tech Censorship

Dr. Robert Epstein on Big Tech Censorship

Ingraham: Big tech and the new corporate censorship

Dennis Prager and Google VP Testify Before the U.S. Senate on Tech Censorship

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In an unprecedented move, Youtube demonetized Steven Crowder after Vox Journalist Carlos “Gaywonk” Maza complained on Twitter about a few of Crowder’s jokes. Bowing to twitter mobs, Youtube demonetized Steven Crowder’s whole channel along with hundreds of other small creators on Youtube. Jon Miller breaks down the latest tech censorship drama in today’s episode of White House Brief.

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Dan Crenshaw Interrogates Social Media Execs on Silencing Conservatives

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Sen. Ted Cruz grills Mark Zuckerberg on political bias

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Zuckerberg meets Trump, senators; nixes breaking up Facebook

Facebook chief executive Mark Zuckerberg held private meetings with US lawmakers in Washington to discuss technology regulations and social media issues, including concerns about the social network's operations

Facebook chief executive Mark Zuckerberg held private meetings with US lawmakers in Washington to discuss technology regulations and social media issues, including concerns about the social network’s operations

Facebook chief executive Mark Zuckerberg met Thursday with US President Donald Trump and members of Congress on a political reconnaissance mission to Washington, where he rejected calls to break up the world’s biggest social network.

Zuckerberg’s visit comes as Facebook faces a myriad of regulatory and legal questions surrounding issues like competition, digital privacy, censorship and transparency in political advertising.

A Facebook spokesman said discussions were focusing in part on future internet regulation.

Senate Democrat Mark Warner, one of the lawmakers who has taken the lead in Washington on digital security, signalled they gave Zuckerberg an earful.

The visit, including a Wednesday night private dinner with Warner and other lawmakers, comes after his stormy appearance last year before Congress, where he was grilled on Facebook’s data protection and privacy missteps.

Senator Josh Hawley, a Republican freshman and one of the more outspoken critics of Facebook, said he had a “frank conversation” with Zuckerberg but remains concerned.

“Challenged him to do two things to show FB is serious about bias, privacy & competition. 1) Sell WhatsApp & Instagram 2) Submit to independent, third-party audit on censorship,” Hawley tweeted.

“He said no to both.”

Trump late Thursday posted a picture on Facebook and Twitter showing him shaking hands with Zuckerberg, but didn’t share details of their conversation.

“Nice meeting with Mark Zuckerberg of Facebook in the Oval Office today,” the president wrote.

Federal and state anti-trust enforcers are looking into potential anti-competitive actions by Facebook, and members of Congress are debating national privacy legislation.

The messaging product WhatsApp and picture-sharing giant Instagram are part of Facebook’s broad family of services that has made it a global online behemoth, but have also exposed the company to concerns about competition, data harvesting and sprawling digital control.

Warner said he was not prepared to call for Facebook’s dismantlement.

“I’m not yet with some of my friends who want to go straight to break up,” he told Fox Business Network.

“I am concerned. These are global companies, and I don’t want to transfer the leadership to Chinese companies,” he added.

“But I do think we need a lot more transparency. We need to have privacy rights protected. We need to increase competition with things like data portability and interoperability.”

Two months ago, the US Federal Trade Commission hit Facebook with a record $5 billion fine for data protection violations in a wide-ranging settlement that calls for revamping privacy controls and oversight at the social network.

Earlier Wednesday, executives from Facebook, Google and Twitter appeared before a Senate panel to answer questions on “digital responsibility” in the face of online violence and extremism.

https://www.dailymail.co.uk/wires/reuters/article-7484185/Saudi-led-coalition-launches-military-operation-north-Hodeidah-Yemen.html

Hawley Introduces Bill to Make Big Tech Embrace Free Speech

By Corinne Weaver | June 19, 2019 10:49 AM EDT

Republicans in the Senate plan on striking a blow for online free speech — by eradicating censorship of conservatives online.

Senator Josh Hawley (R-MO) introduced a new bill June 19, meant to tackle the problem of tech monopolies and their consistent censorship of conservatives and conservative ideology. The bill, called the Ending Support for Internet Censorship Act, looks to remove the immunity enjoyed by Big Tech companies from Section 230 of the Communications Decency Act. The bill would target companies with more than 30 million monthly users, such as Facebook, Google, Twitter, and YouTube.

Hawley wrote that the companies could earn their immunity back through a series of third-party external audits that provided “convincing evidence that their algorithms and content-removal practices are politically neutral.”

The legislation would exclude smaller companies. Hawley’s bill is more interested in going after the “tech monopolies” that present a greater threat through censorship. He stated in his press release:

There’s a growing list of evidence that shows big tech companies making editorial decisions to censor viewpoints they disagree with. Even worse, the entire process is shrouded in secrecy because these companies refuse to make their protocols public. This legislation simply states that if the tech giants want to keep their government-granted immunity, they must bring transparency and accountability to their editorial processes and prove that they don’t discriminate.”

In the bill itself, all acts of business were permitted except for those that favored or were biased against a specific ideology, political candidates, or political opinions.

The Free Speech Alliance, a coalition of more than 50 conservative organizations led by the Media Research Center, urged that tech companies “mirror the First Amendment.” This bill, if passed, would require Big Tech to do just that.

So far, major critics have gone after Hawley on Twitter. Americans for Prosperity called the bill “misguided legislation.” The group argued that the bill will prevent innovative startups from succeeding, even though it is clearly aimed at companies larger than 30 million monthly users.

Executive editor of Vox’s tech magazine, The Verge, Dieter Bohn, wrote that Hawley “doesn’t understand section 230.”

https://www.newsbusters.org/blogs/2019/06/19/hawley-introduces-bill-make-big-tech-embrace-free-speech

 

Mark Zuckerberg’s Call to Regulate Facebook, Explained

Here’s why the Facebook chief executive invited Congress to regulate his company in a post on Saturday.

Facebook's chief executive, Mark Zuckerberg, at Senate hearings last year. With the expectation that personal data handling and content restrictions are coming, Facebook tries in an op-ed piece to set the playing field.
CreditCreditTom Brenner/The New York Times

Facebook has faced months of scrutiny for a litany of ills, from spreading misinformation to not properly protecting its users’ data to allowing foreign meddling in elections.

Many at the Silicon Valley company now expect lawmakers and regulators to act to contain it — so the social network is trying to set its own terms for what any regulations should look like.

That helps explain why Mark Zuckerberg, Facebook’s chief executive, wrote an opinion piece for The Washington Post on Saturday laying out a case for how he believes his company should be treated.

In his post, Mr. Zuckerberg discussed four policy areas — harmful content, election integrity, privacy and data portability — which he said the government should focus attention on.

https://www.nytimes.com/2019/03/30/technology/mark-zuckerberg-facebook-regulation-explained.html

What Would Regulating Facebook Look Like?

In an interview with WIRED, Mark Zuckerberg seemed to accept the idea of some US regulation. Other countries could provide the blueprint.

In an interview with WIRED Mark Zuckberg seemed to accept the idea of some US regulation. Other countries could provide...
In an interview with WIRED, Mark Zuckberg seemed to accept the idea of some US regulation. Other countries could provide the blueprint .PHUC PHAM The drumbeat to regulate Big Tech began pounding long before the Cambridge Analytica scandal rocked Facebook—six long years ago, the Obama administration pushed a “Privacy Bill of Rights” that, like most other legislative attempts to safeguard your data online, went nowhere. But this time, as they say, feels different. Thanks to repeated lapses from not just Facebook but all corners of Silicon Valley, some sort of regulation seems not only plausible but imminent.

US politicians have called for Facebook CEO Mark Zuckerberg to appear in person before Congress. Some tech-focused legislation is currently wending its way through the Capitol’s corridors. And regulators in other countries have already clamped down on tech.

‘I think what tends to work well is transparency, which I think is an area where we need to do a lot better and are working on.’

FACEBOOK CEO MARK ZUCKERBERG

In an interview with WIRED editor-in-chief Nicholas Thompson Wednesday, Facebook CEO Mark Zuckberg seemed if not outright welcoming toward regulation, at least accepting of it. “There are some really nuanced questions though about how to regulate, which I think are extremely interesting intellectually,” says Zuckerberg, who points to the bipartisan Honest Ads Act, cosponsored by senators Mark Warner, Amy Klobuchar, and John McCain, as an example of the sort of bill his company can get behind.

The Honest Ads Act, legislation that calls for increased transparency behind who pays for political ads online, makes for a convenient example, though, in part because Facebook has already implemented many of its provisions. The bill, introduced last October, also appears to have languished, making it a non-substantive threat. Meanwhile, critics say it wouldn’t have stopped Russian propagandists from flooding Facebook in the first place.

Besides, even the Honest Ads Act’s sponsors have noted that it addresses a very small piece of a very large problem. And it does nothing to address the data privacy concerns that rightly create so much angst among anyone with any sort of presence online. Which is to say, everyone. For that, the US would need something much bigger.

“We do not have an omnibus privacy legislation at the federal level,” says David Vladeck, former director of the Federal Trade Commission’s Bureau of Consumer Protection. “We don’t have a statute that recognizes generally that privacy is a right that’s secured by federal law. And that puts us at the opposite end of the spectrum from some of the other major economies in the world.”

It’s not that living in the US puts you totally in the privacy hinterlands. The FTC has a modicum of authority, and has used it when companies grossly overreach—as it did against Facebook in 2011, when the company failed to keep its promises regarding how it treated their data. Facebook had made user information public, even if they’d previously had more restrictive privacy settings, and allowed third-party developers to mine the data not just of the Facebook users who downloaded their apps, but of all of those peoples’ friends. (If that sounds familiar, well, it’s precisely what allowed the Cambridge Analytica fiasco.)

Even then, though, Facebook got off with a scolding. It had to sign a consent decree, essentially a promise that it wouldn’t stray again. That’s gone unchecked until this week, when the FTC reportedly opened an investigation into the Cambridge Analytica scandal, and could fine Facebook up to $40,000 per violation—with 50 million people impacted, the potential fine hypothetically stretches into the trillions.

But the threat of retroactive fines clearly hasn’t done the trick. The FTC, meanwhile, can only work with the legislative tools it’s given. So what would it look like if Congress gave it better tools? Other countries might offer something like an outline, if not an outright blueprint.

In Finland, officials feel that their strong public education system and a coordinated government response have been enough to stave off Russia’s propaganda; Sri Lanka banned Facebook, WhatsApp, and Instagram entirely. Which is to say, it’s a wide gamut.

On the data privacy front, the most recent high-profile model comes from the European Union, where General Data Protection Regulation becomes the law of the land on May 25. GDPR focuses on ensuring that people who use online services know not only exactly what data those companies will take, but how they put it to use.

Zuckerberg, at least, seems supportive of those levels of transparency—although they’re also, since GDPR’s passage, an inevitability. “I think what tends to work well is transparency, which I think is an area where we need to do a lot better and are working on,” Zuckerberg tells WIRED. “I think guidelines are much better than dictating specific processes.”

‘We do not have an omnibus privacy legislation at the federal level.’

DAVID VLADECK FORMER BUREAU OF CONSUMER PROTECTION DIRECTOR

Rough guidelines also seem like a more plausible approach in the US due to both precedent and practicality. The EU approach to privacy law has long been highly detailed and prescriptive, says Vladeck, which sounds good in theory but can create issues in practice. “The implementation of it, in my view, is going to be ineffective, because it places an enormous regulatory burden on some parties, and worse, it places an enormous regulatory burden on the data protection authorities that need to enforce it,” says Vladeck. “I don’t think we could simply take the European regulation and simply adopt it in the United States. But I think there are a lot of elements in it that could provide guidance.”

One danger of an overly prescribed law is that technological solutions can outpace those mandates. Zuckerberg points to Germany, where hate speech laws require Facebook and other companies to remove offending posts within 24 hours. “The German model—you have to handle hate speech in this way—in some ways that’s actually backfired,” Zuckerberg says. “Because now we are handling hate speech in Germany in a specific way, for Germany, and our processes for the rest of the world have far surpassed our ability to handle that. But we’re still doing it in Germany the way that it’s mandated that we do it there. So I think guidelines are probably going to be a lot better.”

Zuckerberg also raises the question of the use of artificial intelligence in weeding out unwelcome uploads. “Now that companies increasingly over the next five to 10 years as AI tools get better and better will be able to proactively determine what might be offensive content or violate some rules, what therefore is the responsibility and legal responsibility of companies to do that,” Zuckerberg says.

Here, too, Facebook’s getting out ahead of any potential legal requirements; it already scans for nudity and terrorist content, and remains hard at work at AI that can spot what Zuckerberg calls “really nuanced hate speech and bullying.”

Eventually, though, Silicon Valley may run out of ways to appease regulators. By now there have been too many data breaches, too much negligence, whether by Facebook, Equifax, or the government itself. “I do think increasingly that there’s a sense that we need it,” says Vladeck.

At the very least, when regulation does come, Facebook has an open invite to help inform what happens, albeit in gruff terms. “Mr. Zuckerberg needs to testify before the Senate and answer some tough questions about Russian activity on the platform, and the way his company protects—or doesn’t—its users’ data,” said Senator Mark Warner in a email to WIRED Wednesday.

And if it doesn’t pitch in, Congress has a model for privacy protection waiting for it, at least philosophically, just an ocean away.

Facebook’s World

https://www.wired.com/story/what-would-regulating-facebook-look-like/

Section 230 of the Communications Decency Act

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Section 230 of the Communications Decency Act (CDA) of 1996 (a common name for Title V of the Telecommunications Act of 1996) is a landmark piece of Internet legislation in the United States, codified at 47 U.S.C. § 230. Section 230(c)(1) provides immunity from liability for providers and users of an “interactive computer service” who publish information provided by third-party users:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Section 230 was developed in response to a pair of lawsuits against Internet service providers in the early 1990s that had different interpretations of whether the services providers should be treated as publishers or distributors of content created by its users. It was also pushed by the tech industry and other experts that language in the proposed CDA making providers responsible for indecent content posted by users that could extend to other types of questionable free speech. After passage of the Telecommunications Act, the CDA was challenged in courts and ruled by the Supreme Court in Reno v. American Civil Liberties Union (1997) to be partially unconstitutional, leaving the Section 230 provisions in place. Since then, several legal challenges have validated the constitutionality of Section 230. Section 230 protects are not limitless, requiring providers to remove criminal material such as copyright infringement; more recently, Section 230 was amended by the Stop Enabling Sex Traffickers Act in 2018 to require the removal of material violating federal and state sex trafficking laws.

Passed at a time where Internet use was just starting to take off, Section 230 has frequently been referred as a key law that has allowed the Internet to flourish, often referred to as “The Twenty-Six Words That Created the Internet”.

Contents

History

Prior to the Internet, case law was clear that a liability line was drawn between publishers of content and distributors of content; publishers would be expected to have awareness of material it was publishing and thus should be held liable for any illegal content it published, while distributors would likely not be aware and thus would be immune. This was established in Smith v. California (1959), where the Supreme Court ruled that putting liability on the provider (a book store in this case) would have “a collateral effect of inhibiting the freedom of expression, by making the individual the more reluctant to exercise it.”[1]

In the early 1990s, the Internet became more widely adopted and created means for users to engage in forums and other user-generated content. While this helped to expand the use of the Internet, it also resulted in a number of legal cases putting service providers at fault for the content generated by its users. This concern was raised by legal challenges against CompuServe and Prodigy, early service providers at this time.[2] CompuServe stated they would not attempt to regulate what users posted on their services, while Prodigy had employed a team of moderators to validate content. Both faced legal challenges related to content posted by their users. In Cubby, Inc. v. CompuServe Inc., CompuServe was found not be at fault as, by its stance as allowing all content to go unmoderated, it was a distributor and thus not liable for libelous content posted by users. However, Stratton Oakmont, Inc. v. Prodigy Services Co. found that as Prodigy had taken an editorial role with regard to customer content, it was a publisher and legally responsible for libel committed by customers.[3][a]

Chris Cox
Ron Wyden
Chris Cox (left) and Ron Wyden, the framers of Section 230

Service providers made their Congresspersons aware of these cases, believing that if upheld across the nation, it would stifle the growth of the Internet. United States Representative Christopher Cox (R-CA) had read an article about the two cases and felt the decisions were backwards. “It struck me that if that rule was going to take hold then the internet would become the Wild West and nobody would have any incentive to keep the internet civil”, Cox stated.[4]

At the time, Congress was preparing the Communications Decency Act (CDA), part of the omnibus Telecommunications Act of 1996, which was designed to make knowingly sending indecent or obscene material to minors a criminal offense. A version of the CDA had passed through the Senate pushed by Senator J. James Exon.[5] A grassroots effort in the tech industry reacted to try to convince the House of Representatives to challenge Exon’s bill. Based on the Stratton Oakmont decision, Congress recognized that by requiring service providers to block indecent content would make them be treated as publishers in context of the First Amendment and thus become liable for other illegal content such as libel, not set out in the existing CDA.[2] Cox and fellow Representative Ron Wyden (D-OR) wrote the House bill’s section 509, titled the Internet Freedom and Family Empowerment Act, designed to override the decision from Stratton Oakmont, so that services providers could moderate content as necessary and did not have to act as a wholly neutral conduit. The new Act was added the section while the CDA was in conference within the House.

The overall Telecommunications Act, with both Exon’s CDA and Cox/Wyden’s provision, passed both Houses by near-unanimous votes and signed into law by President Bill Clinton by February 1996.[6] Cox/Wyden’s section was codified as Section 230 in Title 47 of the US Code. The anti-indecency portion of the CDA was immediately challenged on passage, resulting in the Supreme Court 1997 case, Reno v. American Civil Liberties Union, that ruled all of the anti-indecency sections of the CDA were unconstitutional, but left Section 230.[7]

One of the first legal challenges to Section 230 was the 1997 case Zeran v. America Online, Inc., in which a Federal court affirmed that the purpose of Section 230 as passed by Congress was “to remove the disincentives to self-regulation created by the Stratton Oakmont decision”.[8] Under that court’s holding, computer service providers who regulated the dissemination of offensive material on their services risked subjecting themselves to liability, because such regulation cast the service provider in the role of a publisher. Fearing that the specter of liability would therefore deter service providers from blocking and screening offensive material, Congress enacted § 230’s broad immunity “to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children’s access to objectionable or inappropriate online material.”[8] In addition, Zeran notes “the amount of information communicated via interactive computer services is . . . staggering. The specter of tort liability in an area of such prolific speech would have an obviously chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.”[8]

Application and limits

In analyzing the availability of the immunity offered by Section 230, courts generally apply a three-prong test. A defendant must satisfy each of the three prongs to gain the benefit of the immunity:[9]

  1. The defendant must be a “provider or user” of an “interactive computer service.”
  2. The cause of action asserted by the plaintiff must treat the defendant as the “publisher or speaker” of the harmful information at issue.
  3. The information must be “provided by another information content provider,” i.e., the defendant must not be the “information content provider” of the harmful information at issue.

Section 230 immunity is not unlimited. The statute specifically excepts federal criminal liability and intellectual property claims.[10] However, state criminal laws have been held preempted in cases such as Backpage.com, LLC v. McKenna[11] and Voicenet Commc’ns, Inc. v. Corbett[12] (agreeing “[T]he plain language of the CDA provides … immunity from inconsistent state criminal laws.”).

As of mid-2016, courts have issued conflicting decisions regarding the scope of the intellectual property exclusion set forth in 47 U.S.C. § 230(e)(2). For example, in Perfect 10, Inc. v. CCBill, LLC,[13] the 9th Circuit Court of Appeals ruled that the exception for intellectual property law applies only to federal intellectual property claims such as copyright infringement, trademark infringement, and patents, reversing a district court ruling that the exception applies to state-law right of publicity claims.[14] The 9th Circuit’s decision in Perfect 10 conflicts with conclusions from other courts including Doe v. Friendfinder. The Friendfinder court specifically discussed and rejected the lower court’s reading of “intellectual property law” in CCBill and held that the immunity does not reach state right of publicity claims.[15]

Additionally, with the passage of the Digital Millennium Copyright Act in 1998, services provides must comply with additional requirements for copyright infringement to maintain “safe harbor” protections from liability, as defined in the DMCA’s Title II, Online Copyright Infringement Liability Limitation Act.[16]

Controversies

The first major challenge to Section 230 was in Zeran v. AOL, a 1997 case decided at the Fourth Circuit. The case involved a person that sued America Online (AOL) for failing to remove, in a timely manner, libelous ads posted by AOL users that inappropriately connected his home phone number to the Oklahoma City bombing. The court found for AOL and upheld the constitutionality of Section 230, stating that Section 230 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.”[17] This rule, cementing Section 230’s liability protections, has been considered one of the most important case laws affecting the growth of the Internet, allowing websites to be able to incorporate user-generated content without fear of prosecution.[18] However, at the same time, this has led to Section 230 being used as a shield for some website owners as courts have ruled Section 230 provides complete immunity for ISPs with regard to the torts committed by their users over their systems.[19]

Sex trafficking

Around 2001, a University of Pennsylvania paper warned that “online sexual victimization of American children appears to have reached epidemic proportions” due to the allowances granted by Section 230.[20] Over the next decade, advocates against such exploitation such as the National Center for Missing and Exploited Children pressured major websites to block or remove content related to sex trafficking, leading to sites like FacebookMySpace, and Craigslist to pull such content. Because mainstream sites were blocking this content, those that engaged or profited from trafficking started to use more obscure sites, leading to the creation of sites like Backpage. In addition to removing these from the public eye, these new sites worked to obscure what trafficking was going on and who was behind it, limiting ability for law enforcement to take action.[20] Backpage and similar sites quickly came under numerous lawsuits from victims of the sex traffickers and exploiters for enabling this crime, but the court continually found in favor of Backpage due to Section 230,[21] and the Supreme Court let stand a Circuit Court decision in favor of Backpage due to Section 230 in January 2017.[22]

Due to numerous complaints from constituents, Congress began an investigation into Backpage and similar sites in January 2017, finding Backpage complicit in aiding and profiting from illegal sex trafficking.[23] Subsequently, Congress introduced the FOSTA-SESTA bills: the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) in the House of Representatives by Ann Wagner in April 2017, and the Stop Enabling Sex Traffickers Act (SESTA) U.S. Senate bill introduced by Rob Portman in August 2017. Combined, the FOSTA-SESTA bills modified Section 230 to exempt services providers from Section 230 immunity when dealing with civil or criminal crimes related to sex trafficking,[24] which removes section 230 safe harbors for services that knowingly facilitate or support sex trafficking.[25] The bill passed both Houses and was signed into law by President Donald Trump on April 11, 2018.[26][27]

The bills were criticized by pro-free speech and pro-Internet groups as a “disguised internet censorship bill” that weakens the section 230 safe harbors, places unnecessary burdens on Internet companies and intermediaries that handle user-generated content or communications with service providers required to proactively take action against sex trafficking activities, and requires a “team of lawyers” to evaluate all possible scenarios under state and federal law (which may be financially unfeasible for smaller companies).[28][29][30][31][32] Critics also argued that FOSTA-SESTA did not distinguish between consensual, legal sex offerings from non-consensual ones, and argued it would cause websites otherwise engaged in legal offerings of sex work would be threatened with liability charges.[23] Online sex workers argued that the bill would harm their safety, as the platforms they utilize for offering and discussing sexual services in a legal manner (as an alternative to street prostitution) had begun to reduce their services or shut down entirely due to the threat of liability under the bill.[33][34]

Social media

Many social media sites, notably Facebook and Twitter, came under scrutiny as a result of the alleged Russian interference in the 2016 United States elections, where it was alleged that Russian agents used the sites to spread propaganda and fake news to swing the election in favor of Donald Trump. These platforms also were criticized for not taking action against users that used the social media outlets for harassment and hate speech against others. Shortly after the passage of FOSTA-SESTA acts, some in Congress recognized that additional changes could be made to Section 230 to require service providers to deal with these bad actors, beyond what Section 230 already provided to them.[35] During 2019, there have been renewed calls for changes in Section 230 to address what are seen as growing problems across social media and the protections given to tech companies.

Platform neutrality

Some politicians, including Republican senators Ted Cruz and Josh Hawley, have accused major social networks of displaying a bias against conservative perspectives when moderating content (such as Twitter suspensions).[36][36][37][38] In a Fox News op-ed, Cruz argued that section 230 should only apply to providers that are politically “neutral”, suggesting that a provider “should be considered to be a [liable] ‘publisher or speaker’ of user content if they pick and choose what gets published or spoke.”[39] Section 230 does not contain any requirements that moderation decisions be neutral.[39] Hawley alleged that section 230 safe harbors were a “sweetheart deal between big tech and big government”.[40][41]

In December 2018, Republican house representative Louie Gohmert introduced the Biased Algorithm Deterrence Act (H.R.492), which would remove all section 230 protections for any provider that used filters or any other type of algorithms to display user content when otherwise not directed by a user.[42][43]

In June 2019, Hawley introduced the Ending Support for Internet Censorship Act (S. 1914), that would remove section 230 protections from companies whose services have more than 30 million active monthly users in the U.S. and more than 300 million worldwide, or have over $500 million in annual global revenue, unless they receive a certification from the majority of the Federal Trade Commission that they do not moderate against any political viewpoint, and have not done so in the past 2 years.[44][45]

There has been criticism—and support—of the proposed bill from various points on the political spectrum. A poll of more than 1,000 voters gave Senator Hawley’s bill a net favorability rating of 29 points among Republicans (53% favor, 24% oppose) and 26 points among Democrats (46% favor, 20% oppose).[46] Some Republicans feared that by adding FTC oversight, the bill would continue to fuel fears of a big government with excessive oversight powers.[47] Democrat Speaker Nancy Pelosi has indicated support for the same approach Hawley has taken.[48] The chairman of the Senate Judiciary Committee, Senator Graham, has also indicated support for the same approach Hawley has taken, saying “he is considering legislation that would require companies to uphold ‘best business practices’ to maintain their liability shield, subject to periodic review by federal regulators.” [49]

Legal experts have criticized the Republicans’ push to make Section 230 encompass platform neutrality. Wyden stated in response to potential law changes that “Section 230 is not about neutrality. Period. Full stop. 230 is all about letting private companies make their own decisions to leave up some content and take other content down.”[50] Law professor Jeff Kosseff, who has written extensively on Section 230, has stated that the Republican intentions are based on a “fundamental misunderstanding” of Section 230’s purpose, as platform neutrality was not one of the considerations made at the time of passage.[51] Kosseff stated that political neutrality was not the intent of Section 230 according to the framers, but rather making sure providers had the ability to make content-removal judgement without fear of liability.[2] There have been concerns that any attempt to weaken Section 230 could actually cause an increase in censorship when services lose their liability.[41][52]

Hate speech

In the wake of the 2019 shootings in Christchurch, New ZealandEl Paso, Texas and Dayton, Ohio, the impact on Section 230 and liability towards online hate speech has been raised. In both the Christchurch and El Paso shootings, the perpetrator posted hate speech manifestos to 8chan, a moderated imageboard known to be favorable for the posting of extreme views. Concerned politicians and citizens raised calls at large tech companies for the need for hate speech to be removed from the Internet; however, hate speech is generally protected speech under the First Amendment, and Section 230 removes the liability for these tech companies to moderate such content as long as it is not illegal. This has given the appearance that tech companies do not need to be proactive against hateful content, thus allowing the hate content to fester online and lead to such incidents.[53][5]

Notable articles on this concerns were published after the El Paso shooting by The New York Times,[53] The Wall Street Journal,[54] and Bloomberg Businessweek,[5] among other outlets, but which were criticized by legal experts including Mike GodwinMark Lemley, and David Kaye, as the articles implied that hate speech was protected by Section 230, when it is in fact protected by the First Amendment. In the case of The New York Times, the paper issued a correction to affirm that the First Amendment protected hate speech, and not Section 230.[55][56][57]

Members of Congress have indicated they may pass a law that changes how Section 230 would apply to hate speed as to make tech companies liable for this. Wyden, now a Senator, stated that he intended for Section 230 to be both “a sword and a shield” for Internet companies, the “sword” allowing them to remove content they deem inappropriate for their service, and the shield to help keep offensive content their from sites without liability. However, Wyden argued that become tech companies have not been willing to use the sword to remove content, it is necessary to take away that shield.[53][5] Some have compared Section 230 to the Protection of Lawful Commerce in Arms Act, a law that grants gun manufacturers immunity from certain types of lawsuits when their weapons are used in criminal acts. According to law professor Mary Anne Franks, “They have not only let a lot of bad stuff happen on their platforms, but they’ve actually decided to profit off of people’s bad behavior.”[5] Representative Beto O’Rourke has stated his intent for his 2020 presidential campaign to introduce sweeping changes to Section 230 to make Internet companies liable for not being proactive in taking down hate speech.[58]

Terrorism-related content

In the aftermath of the Backpage trial and subsequent passage of FOSTA-SESTA, others have found that Section 230 appears to protect tech companies from content that is otherwise illegal under United States law. Professor Danielle Citron and journalist Benjamin Wittes found that as late as 2018, several groups deemed as terrorist organizations by the United States had been able to maintain social media accounts on services run by American companies, despite federal laws that make providing material support to terrorist groups subject to civil and criminal charges.[59] However, case law from the Second Circuit has ruled that under Section 230, technology companies are not liable for civil claims based on terrorism-related content.[60]

Case law

Defamatory information

Immunity was upheld against claims that AOL unreasonably delayed in removing defamatory messages posted by third party, failed to post retractions, and failed to screen for similar postings.

  • Blumenthal v. Drudge, 992 F. Supp. 44, 49-53 (D.D.C. 1998).[62]

The court upheld AOL’s immunity from liability for defamation. AOL’s agreement with the contractor allowing AOL to modify or remove such content did not make AOL the “information content provider” because the content was created by an independent contractor. The Court noted that Congress made a policy choice by “providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others.”

The court upheld immunity for an Internet dating service provider from liability stemming from third party’s submission of a false profile. The plaintiff, Carafano, claimed the false profile defamed her, but because the content was created by a third party, the website was immune, even though it had provided multiple choice selections to aid profile creation.

  • Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003).[64]

Immunity was upheld for a website operator for distributing an email to a listserv where the plaintiff claimed the email was defamatory. Though there was a question as to whether the information provider intended to send the email to the listserv, the Court decided that for determining the liability of the service provider, “the focus should be not on the information provider’s intentions or knowledge when transmitting content but, instead, on the service provider’s or user’s reasonable perception of those intentions or knowledge.” The Court found immunity proper “under circumstances in which a reasonable person in the position of the service provider or user would conclude that the information was provided for publication on the Internet or other ‘interactive computer service’.”

  • Green v. AOL, 318 F.3d 465 (3rd Cir. 2003).[65]

The court upheld immunity for AOL against allegations of negligence. Green claimed AOL failed to adequately police its services and allowed third parties to defame him and inflict intentional emotional distress. The court rejected these arguments because holding AOL negligent in promulgating harmful content would be equivalent to holding AOL “liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher’s role.”

Immunity was upheld for an individual internet user from liability for republication of defamatory statements on a listserv. The court found the defendant to be a “user of interactive computer services” and thus immune from liability for posting information passed to her by the author.

  • MCW, Inc. v. badbusinessbureau.com(RipOff Report/Ed Magedson/XCENTRIC Ventures LLC) 2004 WL 833595, No. Civ.A.3:02-CV-2727-G (N.D. Tex. April 19, 2004).[67]

The court rejected the defendant’s motion to dismiss on the grounds of Section 230 immunity, ruling that the plaintiff’s allegations that the defendants wrote disparaging report titles and headings, and themselves wrote disparaging editorial messages about the plaintiff, rendered them information content providers. The Web site, http://www.badbusinessbureau.com, allows users to upload “reports” containing complaints about businesses they have dealt with.

  • Hy Cite Corp. v. badbusinessbureau.com (RipOff Report/Ed Magedson/XCENTRIC Ventures LLC), 418 F. Supp. 2d 1142 (D. Ariz. 2005).[68]

The court rejected immunity and found the defendant was an “information content provider” under Section 230 using much of the same reasoning as the MCW case.

False information

  • Gentry v. eBay, Inc., 99 Cal. App. 4th 816, 830 (2002).[69]

eBay‘s immunity was upheld for claims based on forged autograph sports items purchased on the auction site.

  • Ben Ezra, Weinstein & Co. v. America Online, 206 F.3d 980, 984-985 (10th Cir. 2000), cert. denied, 531 U.S. 824 (2000).[70]

Immunity for AOL was upheld against liability for a user’s posting of incorrect stock information.

Immunity was upheld against claims of fraud and money laundering. Google was not responsible for misleading advertising created by third parties who bought space on Google’s pages. The court found the creative pleading of money laundering did not cause the case to fall into the crime exception to Section 230 immunity.

Immunity for Orbitz and CheapTickets was upheld for claims based on fraudulent ticket listings entered by third parties on ticket resale marketplaces.

  • Herrick v. Grindr, 18-396

The Second Circuit upheld immunity for the Grindr dating app for LGBT persons under Section 230 in regards to the misuse of false profiles created in the names of a real person. The plaintiff had broken up with a boyfriend, who later went onto Grindr to create multiple false profiles that presented the real-life identity and address of the plaintiff and as being available for sexual encounters, as well as having illegal drugs for sale. The plaintiff reported that over a thousand men had come to his house for sex and drugs, based on the communications with the fake profile, and he began to fear for his safety. He sued Grindr for not taking actions to block the false profiles after multiple requests. Grindr asserted Section 230 did not make them liable for the actions of the ex-boyfriend. This was agreed by the district court and the Second Circuit.[73][74]

Sexually explicit content and minors

  • Doe v. America Online, 783 So. 2d 1010, 1013-1017 (Fl. 2001),[75] cert. denied, 122 S.Ct. 208 (2000).

The court upheld immunity against state claims of negligence based on “chat room marketing” of obscene photographs of minor by a third party.

  • Kathleen R. v. City of Livermore, 87 Cal. App. 4th 684, 692 (2001).[76]

The California Court of Appeal upheld the immunity of a city from claims of waste of public funds, nuisance, premises liability, and denial of substantive due process. The plaintiff’s child downloaded pornography from a public library’s computers, which did not restrict access to minors. The court found the library was not responsible for the content of the internet and explicitly found that section 230(c)(1) immunity covers governmental entities and taxpayer causes of action.

The court upheld immunity for a social networking site from negligence and gross negligence liability for failing to institute safety measures to protect minors and failure to institute policies relating to age verification. The Does’ daughter had lied about her age and communicated over MySpace with a man who later sexually assaulted her. In the court’s view, the Does’ allegations were “merely another way of claiming that MySpace was liable for publishing the communications.”

The court upheld immunity for Craigslist against a county sheriff’s claims that its “erotic services” section constituted a public nuisance because it caused or induced prostitution.

  • Backpage.com v. McKenna, et al., CASE NO. C12-954-RSM[79]
  • Backpage.com LLC v Cooper, Case #: 12-cv-00654[SS1][80]
  • Backpage.com LLC v Hoffman et al., Civil Action No. 13-cv-03952 (DMC) (JAD)[81]

The court upheld immunity for Backpage in contesting a Washington state law (SB6251)[82] that would have made providers of third-party content online liable for any crimes related to a minor in Washington state.[83] The states of Tennessee and New Jersey later passed similar legislation. Backpage argued that the laws violated Section 230, the Commerce Clause of the United States Constitution, and the First and Fifth Amendments.[82] In all three cases the courts granted Backpage permanent injunctive relief and awarded them attorney’s fees.[80][84][85][86][87]

The court ruled in favor of Backpage after Sheriff Tom Dart of Cook County IL, a frequent critic of Backpage and its adult postings section, sent a letter on his official stationary to Visa and MasterCard demanding that these firms “immediately cease and desist” allowing the use of their credit cards to purchase ads on Backpage. Within two days both companies withdrew their services from Backpage.[89] Backpage filed a lawsuit asking for a temporary restraining order and preliminary injunction against Dart granting Backpage relief and return to the status quo prior to Dart sending the letter. Backpage alleged that Dart’s actions were unconstitutional, violating the First and Fourteenth Amendments to the US Constitution as well as Section 230 of the CDA. Backpage asked for Dart to retract his “cease and desist” letters.[90] After initially being denied the injunctive relief by a lower court,[91][92] the Seventh Circuit U.S. Court of Appeals reversed that decision and directed that a permanent injunction be issued enjoining Dart and his office from taking any actions “to coerce or threaten credit card companies…with sanctions intended to ban credit card or other financial services from being provided to Backpage.com.”[93] The court cited section 230 as part of its decision.

Discriminatory housing ads

The court upheld immunity for Craigslist against Fair Housing Act claims based on discriminatory statements in postings on the classifieds website by third party users.

The Ninth Circuit Court of Appeals rejected immunity for the Roommates.com roommate matching service for claims brought under the federal Fair Housing Act[96] and California housing discrimination laws.[97] The court concluded that the manner in which the service elicited information from users concerning their roommate preferences (by having dropdowns specifying gender, presence of children, and sexual orientation), and the manner in which it utilized that information in generating roommate matches (by eliminating profiles that did not match user specifications), the matching service created or developed the information claimed to violate the FHA, and thus was responsible for it as an “information content provider.” The court upheld immunity for the descriptions posted by users in the “Additional Comments” section because these were entirely created by users.

Threats

  • Delfino v. Agilent Technologies, 145 Cal. App. 4th 790 (2006), cert denied, 128 S. Ct. 98 (2007).

A California Appellate Court unanimously upheld immunity from state tort claims arising from an employee’s use of the employer’s e-mail system to send threatening messages. The court concluded that an employer that provides Internet access to its employees qualifies as a “provider . . . of an interactive service.”

Failure to warn

The Ninth Circuit Court of Appeals rejected immunity for claims of negligence under California law. Doe filed a complaint against Internet Brands which alleged a “failure to warn” her of a known rape scheme, despite her relationship to them as a ModelMayhem.com member. They also had requisite knowledge to avoid future victimization of ModelMayhem.com users by warning users of online sexual predators. The Ninth Circuit Court of Appeals concluded that the Communications Decency Act did not bar the claim and remanded the case to the district court for further proceedings.

In February 2015, the Ninth Circuit panel set aside its 2014 opinion and set the case for reargument. In May 2016, the panel again held that Doe’s case could proceed.[98][99]

Terrorism

  • Force v. Facebook, Inc., No. 18-397 (2d Cir. July 31, 2019)

The Second Circuit upheld immunity in civil claims for service providers for hosting terrorism-related content created by users. Families, friends, and associates of several killed in Hamas-attacks filed suit against Facebook under the United State’s Anti-Terrorism Act, asserting that since Hamas members used Facebook to coordinate activities, Facebook was liable for its content. While previous rules at federal District and Circuit level have generally ruled against such cases, this decision in the Second Circuit was first to assert that Section 230’s safe harbor provisions do apply even to acts related to terrorism that may be posted by users of service providers, thus dismissing the suit against Facebook. The Second Circuit ruled that the various algorithms Facebook uses to recommend content remains as part of the role of the distributor of the content and not the publisher, since these automated tools were essentially neutral.[60]

Similar legislation in other countries]

European Union

Directive 2000/31/EC[100] establishes a safe haven regime for hosting providers:

  • Article 14 establishes that hosting providers are not responsible for the content they host as long as (1) the acts in question are neutral intermediary acts of a mere technical, automatic and passive capacity; (2) they are not informed of its illegal character, and (3) they act promptly to remove or disable access to the material when informed of it.
  • Article 15 precludes member states from imposing general obligations to monitor hosted content for potential illegal activities.

The updated Directive on Copyright in the Digital Single Market (Directive 2019/790) Article 17 makes providers liable if they fail to take “effective and proportionate measures” to prevent users from uploading certain copyright violations and do not response immediately to takedown requests.[101]

Australia

In Dow Jones & Company Inc v Gutnick,[102] the High Court of Australia treated defamatory material on a server outside Australia as having been published in Australia when it is downloaded or read by someone in Australia.

Gorton v Australian Broadcasting Commission & Anor (1973) 1 ACTR 6

Under the Defamation Act 2005 (NSW),[103] s 32, a defence to defamation is that the defendant neither knew, nor ought reasonably to have known of the defamation, and the lack of knowledge was not due to the defendant’s negligence.

New Zealandcause of the material CompuServe’s network was carrying into Germany. He was convicted and sentenced to two years probation on May 28, 1998.[104][105] He was cleared on appeal on November 17, 1999.[106][107]

The Oberlandesgericht (OLG) Cologne, an appellate court, found that an online auctioneer does not have an active duty to check for counterfeit goods (Az 6 U 12/01).[108]

In one example, the first-instance district court of Hamburg issued a temporary restraining order requiring message board operator Universal Boards to review all comments before they can be posted to prevent the publication of messages inciting others to download harmful files. The court reasoned that “the publishing house must be held liable for spreading such material in the forum, regardless of whether it was aware of the content.”[109]

United Kingdom

Also see: Defamation Act 2013.

The laws of libel and defamation will treat a disseminator of information as having “published” material posted by a user, and the onus will then be on a defendant to prove that it did not know the publication was defamatory and was not negligent in failing to know: Goldsmith v Sperrings Ltd (1977) 2 All ER 566; Vizetelly v Mudie’s Select Library Ltd (1900) 2 QB 170; Emmens v Pottle & Ors (1885) 16 QBD 354.

In an action against a website operator, on a statement posted on the website, it is a defence to show that it was not the operator who posted the statement on the website. The defence is defeated if it was not possible for the claimant to identify the person who posted the statement, or the claimant gave the operator a notice of complaint and the operator failed to respond in accordance with regulations.

Notes

  1. ^ The details of the Stratton Oakmont case would later serve as the basis for the book and its film The Wolf of Wall Street

References …

External links

https://en.wikipedia.org/wiki/Section_230_of_the_Communications_Decency_Act

 

United States antitrust law

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“The Bosses of the Senate”, a cartoon by Joseph Keppler depicting corporate interests—from steel, copper, oil, iron, sugar, tin, and coal to paper bags, envelopes, and salt—as giant money bags looming over the tiny senators at their desks in the Chamber of the United States Senate.[1]

In the United States, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. (The concept is called competition law in other English-speaking countries.) The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price-fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that would likely substantially lessen competition. Third, Section 2 of the Sherman Act prohibits the abuse of monopoly power.[2]

The Federal Trade Commission, the U.S. Department of Justice, state governments and private parties who are sufficiently affected may all bring actions in the courts to enforce the antitrust laws. The scope of antitrust laws, and the degree to which they should interfere in an enterprise’s freedom to conduct business, or to protect smaller businesses, communities and consumers, are strongly debated. One view, mostly closely associated with the “Chicago School of economics” suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest.[3]

Contents

History

Although “trust” has a specific legal meaning (where one person holds property for the benefit of another), in the late 19th century the word was commonly used to denote big business, because that legal instrument was frequently used to effect a combination of companies.[4] Large manufacturing conglomerates emerged in great numbers in the 1880s and 1890s, and were perceived to have excessive economic power.[5] The Interstate Commerce Act of 1887 began a shift towards federal rather than state regulation of big business.[6] It was followed by the Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914 and the Federal Trade Commission Act of 1914, the Robinson–Patman Act of 1936, and the Celler–Kefauver Act of 1950.

In the 1880s, hundreds of small short-line railroads were being bought up and consolidated into giant systems. (Separate laws and policies emerged regarding railroads and financial concerns such as banks and insurance companies.) People for strong antitrust laws argued that, in order for the American economy to be successful, it would require free competition and the opportunity for individual Americans to build their own businesses. As Senator John Sherman put it, “If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” Congress passed the Sherman Antitrust Act almost unanimously in 1890, and it remains the core of antitrust policy. The Act prohibits agreements in restraint of trade and abuse of monopoly power. It gives the Justice Department the mandate to go to federal court for orders to stop illegal behavior or to impose remedies.[7][original research?]

Public officials during the Progressive Era put passing and enforcing strong antitrust high on their agenda. President Theodore Roosevelt sued 45 companies under the Sherman Act, while William Howard Taft sued 75. In 1902, Roosevelt stopped the formation of the Northern Securities Company, which threatened to monopolize transportation in the Northwest (see Northern Securities Co. v. United States).

Standard Oil (Refinery No. 1 in ClevelandOhio, pictured) was a major company broken up under United States antitrust laws.

One of the better-known trusts was the Standard Oil CompanyJohn D. Rockefeller in the 1870s and 1880s had used economic threats against competitors and secret rebate deals with railroads to build what was called a monopoly in the oil business, though some minor competitors remained in business. In 1911 the Supreme Court agreed that in recent years (1900–1904) Standard had violated the Sherman Act (see Standard Oil Co. of New Jersey v. United States). It broke the monopoly into three dozen separate companies that competed with one another, including Standard Oil of New Jersey (later known as Exxon and now ExxonMobil), Standard Oil of Indiana (Amoco), Standard Oil Company of New York (Mobil, again, later merged with Exxon to form ExxonMobil), of California (Chevron), and so on. In approving the breakup the Supreme Court added the “rule of reason”: not all big companies, and not all monopolies, are evil; and the courts (not the executive branch) are to make that decision. To be harmful, a trust had to somehow damage the economic environment of its competitors.[citation needed]

United States Steel Corporation, which was much larger than Standard Oil, won its antitrust suit in 1920 despite never having delivered the benefits to consumers that Standard Oil did.[citation needed] In fact, it lobbied for tariff protection that reduced competition, and so contending that it was one of the “good trusts” that benefited the economy is somewhat doubtful.[citation needed] Likewise International Harvester survived its court test, while other monopolies were broken up in tobacco, meatpacking, and bathtub fixtures. Over the years hundreds of executives of competing companies who met together illegally to fix prices went to federal prison.[citation needed]

In 1914 Congress passed the Clayton Act, which prohibited specific business actions (such as price discrimination and tying) if they substantially lessened competition. At the same time Congress established the Federal Trade Commission (FTC), whose legal and business experts could force business to agree to “consent decrees“, which provided an alternative mechanism to police antitrust.[citation needed]

American hostility to big business began to decrease after the Progressive Era.[citation needed] For example, Ford Motor Company dominated auto manufacturing, built millions of cheap cars that put America on wheels, and at the same time lowered prices, raised wages, and promoted manufacturing efficiency. Welfare capitalism made large companies an attractive place to work; new career paths opened up in middle management; local suppliers discovered that big corporations were big purchasers.[citation needed] Talk of trust busting faded away. Under the leadership of Herbert Hoover, the government in the 1920s promoted business cooperation, fostered the creation of self-policing trade associations, and made the FTC an ally of “respectable business”.[citation needed]

The printing equipment company ATF explicitly states in its 1923 manual that its goal is to ‘discourage unhealthy competition’ in the printing industry.

During the New Deal, attempts were made to stop cutthroat competition. The National Industrial Recovery Act (NIRA) was a short-lived program in 1933–35 designed to strengthen trade associations, and raise prices, profits and wages at the same time. The Robinson-Patman Act of 1936 sought to protect local retailers against the onslaught of the more efficient chain stores, by making it illegal to discount prices. To control big business, the New Deal policymakers preferred federal and state regulation —controlling the rates and telephone services provided by AT&T, for example— and by building up countervailing power in the form of labor unions.[citation needed]

The antitrust environment of the 70’s was dominated by the case United States v. IBM, which was filed by the U.S. Justice Department in 1969. IBM at the time dominated the computer market through alleged bundling of software and hardware as well as sabotage at the sales level and false product announcements. It was one of the largest and certainly the lengthiest antitrust case the DoJ brought against a company. In 1982, the Reagan administration dismissed the case, and the costs and wasted resources were heavily criticized. However, contemporary economists argue that the legal pressure on IBM during that period allowed for the development of an independent software and personal computer industry with major importance for the national economy.[8]

In 1982 the Reagan administration used the Sherman Act to break up AT&T into one long-distance company and seven regional “Baby Bells“, arguing that competition should replace monopoly for the benefit of consumers and the economy as a whole. The pace of business takeovers quickened in the 1990s, but whenever one large corporation sought to acquire another, it first had to obtain the approval of either the FTC or the Justice Department. Often the government demanded that certain subsidiaries be sold so that the new company would not monopolize a particular geographical market.[citation needed]

In 1999 a coalition of 19 states and the federal Justice Department sued Microsoft.[9] A highly publicized trial found that Microsoft had strong-armed many companies in an attempt to prevent competition from the Netscape browser.[10] In 2000, the trial court ordered Microsoft to split in two, preventing it from future misbehavior.[11][9] The Court of Appeals affirmed in part and reversed in part. In addition, it removed the judge from the case for discussing the case with the media while it was still pending.[12] With the case in front of a new judge, Microsoft and the government settled, with the government dropping the case in return for Microsoft agreeing to cease many of the practices the government challenged.[13] In his defense, CEO Bill Gates argued that Microsoft always worked on behalf of the consumer and that splitting the company would diminish efficiency and slow the pace of software development.[citation needed]

Cartels and collusion

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Sherman Act 1890 §1

Preventing collusion and cartels that act in restraint of trade is an essential task of antitrust law. It reflects the view that each business has a duty to act independently on the market, and so earn its profits solely by providing better priced and quality products than its competitors. The Sherman Act §1 prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce.”[14] This targets two or more distinct enterprises acting together in a way that harms third parties. It does not capture the decisions of a single enterprise, or a single economic entity, even though the form of an entity may be two or more separate legal persons or companies. In Copperweld Corp. v. Independence Tube Corp.[15] it was held an agreement between a parent company and a wholly owned subsidiary could not be subject to antitrust law, because the decision took place within a single economic entity.[16] This reflects the view that if the enterprise (as an economic entity) has not acquired a monopoly position, or has significant market power, then no harm is done. The same rationale has been extended to joint ventures, where corporate shareholders make a decision through a new company they form. In Texaco Inc. v. Dagher[17] the Supreme Court held unanimously that a price set by a joint venture between Texaco and Shell Oil did not count as making an unlawful agreement. Thus the law draws a “basic distinction between concerted and independent action”.[18] Multi-firm conduct tends to be seen as more likely than single-firm conduct to have an unambiguously negative effect and “is judged more sternly”.[19] Generally the law identifies four main categories of agreement. First, some agreements such as price fixing or sharing markets are automatically unlawful, or illegal per se. Second, because the law does not seek to prohibit every kind of agreement that hinders freedom of contract, it developed a “rule of reason” where a practice might restrict trade in a way that is seen as positive or beneficial for consumers or society. Third, significant problems of proof and identification of wrongdoing arise where businesses make no overt contact, or simply share information, but appear to act in concert. Tacit collusion, particularly in concentrated markets with a small number of competitors or oligopolists, have led to significant controversy over whether or not antitrust authorities should intervene. Fourth, vertical agreements between a business and a supplier or purchaser “up” or “downstream” raise concerns about the exercise of market power, however they are generally subject to a more relaxed standard under the “rule of reason”.

Restrictive practices

Some practices are deemed by the courts to be so obviously detrimental that they are categorized as being automatically unlawful, or illegal per se. The simplest and central case of this is price fixing. This involves an agreement by businesses to set the price or consideration of a good or service which they buy or sell from others at a specific level. If the agreement is durable, the general term for these businesses is a cartel. It is irrelevant whether or not the businesses succeed in increasing their profits, or whether together they reach the level of having market power as might a monopoly. Such collusion is illegal per se.

Bid rigging is a form of price fixing and market allocation that involves an agreement in which one party of a group of bidders will be designated to win the bid. Geographic market allocation is an agreement between competitors not to compete within each other’s geographic territories.

  • Addyston Pipe and Steel Co. v. United States[20] pipe manufacturers had agreed among themselves to designate one lowest bidder for government contracts. This was held to be an unlawful restraint of trade contrary to the Sherman Act. However, following the reasoning of Justice Taft in the Court of Appeals, the Supreme Court held that implicit in the Sherman Act §1 there was a rule of reason, so that not every agreement which restrained the freedom of contract of the parties would count as an anti-competitive violation.
  • Hartford Fire Insurance Co. v. California, 113 S.Ct. 2891 (1993) 5 to 4, a group of reinsurance companies acting in London were successfully sued by California for conspiring to make U.S. insurance companies abandon policies beneficial to consumers, but costly to reinsure. The Sherman Act was held to have extraterritorial application, to agreements outside U.S. territory.
Group boycotts of competitors, customers or distributors

Rule of reason

If an antitrust claim does not fall within a per se illegal category, the plaintiff must show the conduct causes harm in “restraint of trade” under the Sherman Act §1 according to “the facts peculiar to the business to which the restraint is applied”.[21] This essentially means that unless a plaintiff can point to a clear precedent, to which the situation is analogous, proof of an anti-competitive effect is more difficult. The reason for this is that the courts have endeavoured to draw a line between practices that restrain trade in a “good” compared to a “bad” way. In the first case, United States v. Trans-Missouri Freight Association,[22] the Supreme Court found that railroad companies had acted unlawfully by setting up an organisation to fix transport prices. The railroads had protested that their intention was to keep prices low, not high. The court found that this was not true, but stated that not every “restraint of trade” in a literal sense could be unlawful. Just as under the common law, the restraint of trade had to be “unreasonable”. In Chicago Board of Trade v. United States the Supreme Court found a “good” restraint of trade.[23] The Chicago Board of Trade had a rule that commodities traders were not allowed to privately agree to sell or buy after the market’s closing time (and then finalise the deals when it opened the next day). The reason for the Board of Trade having this rule was to ensure that all traders had an equal chance to trade at a transparent market price. It plainly restricted trading, but the Chicago Board of Trade argued this was beneficial. Brandeis J., giving judgment for a unanimous Supreme Court, held the rule to be pro-competitive, and comply with the rule of reason. It did not violate the Sherman Act §1. As he put it,

Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question, the court must ordinarily consider the facts peculiar to the business to which the restraint is applied, its condition before and after the restraint was imposed, the nature of the restraint, and its effect, actual or probable.[24]

Tacit collusion and oligopoly

Vertical restraints

Resale price maintenance
  • Dr. Miles Medical Co. v. John D. Park and Sons, 220 U.S. 373 (1911) affirmed a lower court’s holding that a massive minimum resale price maintenance scheme was unreasonable and thus offended Section 1 of the Sherman Antitrust Act.
  • Kiefer-Stewart Co. v. Seagram & Sons, Inc., 340 U.S. 211 (1951) it was unlawful for private liquor dealers to require that their products only be resold up to a maximum price. It unduly restrained the freedom of businesses and was per se illegal.
  • Albrecht v. Herald Co., 390 U.S. 145 (1968) setting a fixed price, minimum or maximum, held to violate section 1 of the Sherman Act
  • State Oil Co. v. Khan, 522 U.S. 3 (1997) vertical maximum price fixing had to be adjudged according to a rule of reason
  • Leegin Creative Leather Products, Inc. v. PSKS, Inc. 551 U.S. 877 (2007) 5 to 4 decision that vertical price restraints were not per se illegal. A leather manufacturer therefore did not violate the Sherman Act by stopping delivery of goods to a retailer after the retailer refused to raise its prices to the leather manufacturer’s standards.
Outlet, territory or customer limitations
  • Packard Motor Car Co. v. Webster Motor Car Co., 243 F.2d 418, 420 (D.C. Cir.), cert, denied, 355 U.S. 822 (1957)
  • Continental Television v. GTE Sylvania, 433 U.S. 36 (1977) 6 to 2, held that it was not an antitrust violation, and it fell within the rule of reason, for a seller to limit the number of franchises and require the franchisees only sell goods within its area
  • United States v. Colgate & Co.250 U.S. 300 (1919) there is no unlawful action by a manufacturer or seller, who publicly announces a price policy, and then refuses to deal with businesses who do not subsequently comply with the policy. This is in contrast to agreements to maintain a certain price.
  • United States v. Parke, Davis & Co.362 U.S. 29 (1960) under Sherman Act §4
  • Monsanto Co. v. Spray-Rite Service Corp.465 U.S. 752 (1984), stating that, “under Colgate, the manufacturer can announce its re-sale prices in advance and refuse to deal with those who fail to comply, and a distributor is free to acquiesce to the manufacturer’s demand in order to avoid termination”. Monsanto, an agricultural chemical, terminated its distributorship agreement with Spray-Rite on the ground that it failed to hire trained salesmen and promote sales to dealers adequately. Held, not per se illegal, because the restriction related to non-price matters, and so was to be judged under the rule of reason.
  • Business Electronics Corp. v. Sharp Electronics Corp.485 U.S. 717 (1988) electronic calculators; “a vertical restraint is not illegal per se unless it includes some agreement on price or price levels. … [T]here is a presumption in favor of a rule-of-reason standard; [and] departure from that standard must be justified by demonstrable economic effect, such as the facilitation of cartelizing … “

Mergers

No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.

Clayton Act 1914 §7

Although the Sherman Act 1890 initially dealt, in general, with cartels (where businesses combined their activities to the detriment of others) and monopolies (where one business was so large it could use its power to the detriment of others alone) it was recognized that this left a gap. Instead of forming a cartel, businesses could simply merge into one entity. The period between 1895 and 1904 saw a “great merger movement” as business competitors combined into ever more giant corporations.[25] However upon a literal reading of Sherman Act, no remedy could be granted until a monopoly had already formed. The Clayton Act 1914 attempted to fill this gap by giving jurisdiction to prevent mergers in the first place if they would “substantially lessen competition”.

Dual antitrust enforcement by the Department of Justice and Federal Trade Commission has long elicited concerns about disparate treatment of mergers. In response, in September 2014, the House Judiciary Committee approved the Standard Merger and Acquisition Reviews Through Equal Rules Act (“SMARTER Act”).[26]

Horizontal mergers

Vertical mergers

Conglomerate mergers

Monopoly and power

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Sherman Act 1890 §2

The law’s treatment of monopolies is potentially the strongest in the field of antitrust law. Judicial remedies can force large organizations to be broken up, be run subject to positive obligations, massive penalties may be imposed, and/or the people involved can be sentenced to jail. Under §2 of the Sherman Act 1890 every “person who shall monopolize, or attempt to monopolize … any part of the trade or commerce among the several States” commits an offence.[27] The courts have interpreted this to mean that monopoly is not unlawful per se, but only if acquired through prohibited conduct.[28] Historically, where the ability of judicial remedies to combat market power have ended, the legislature of states or the Federal government have still intervened by taking public ownership of an enterprise, or subjecting the industry to sector specific regulation (frequently done, for example, in the cases watereducationenergy or health care). The law on public services and administration goes significantly beyond the realm of antitrust law’s treatment of monopolies. When enterprises are not under public ownership, and where regulation does not foreclose the application of antitrust law, two requirements must be shown for the offense of monopolization. First, the alleged monopolist must possess sufficient power in an accurately defined market for its products or services. Second, the monopolist must have used its power in a prohibited way. The categories of prohibited conduct are not closed, and are contested in theory. Historically they have been held to include exclusive dealingprice discrimination, refusing to supply an essential facilityproduct tying and predatory pricing.

Monopolization

  • Northern Securities Co. v. United States, 193 U.S. 197 (1904) 5 to 4, a railway monopoly, formed through a merger of 3 corporations was ordered to be dissolved. The owner, James Jerome Hill was forced to manage his ownership stake in each independently.
  • Swift & Co. v. United States, 196 U.S. 375 (1905) the antitrust laws entitled the federal government to regulate monopolies that had a direct impact on commerce
  • Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911) Standard Oil was dismantled into geographical entities given its size, and that it was too much of a monopoly
  • United States v. American Tobacco Company, 221 U.S. 106 (1911) found to have monopolized the trade.
  • United States v. Alcoa, 148 F.2d 416 (2d Cir. 1945) a monopoly can be deemed to exist depending on the size of the market. It was generally irrelevant how the monopoly was achieved since the fact of being dominant on the market was negative for competition. (Criticised by Alan Greenspan.)
  • United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377 (1956), illustrates the cellophane paradox of defining the relevant market. If a monopolist has set a price very high, there may now be many substitutable goods at similar prices, which could lead to a conclusion that the market share is small, and there is no monopoly. However, if a competitive price were charged, there would be a lower price, and so very few substitutes, whereupon the market share would be very high, and a monopoly established.
  • United States v. Syufy Enterprises, 903 F.2d 659 (9th Cir. 1990) necessity of barriers to entry
  • Lorain Journal Co. v. United States, 342 U.S. 143 (1951) attempted monopolization
  • United States v. American Airlines, Inc., 743 F.2d 1114 (1985)
  • Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993) in order for monopolies to be found to have acted unlawfully, action must have actually been taken. The threat of abusive behavior is insufficient.
  • Fraser v. Major League Soccer, 284 F.3d 47 (1st Cir. 2002) there could be no unlawful monopolization of the soccer market by MLS where no market previously existed
  • United States v. Griffith 334 U.S. 100 (1948) four cinema corporations secured exclusive rights from distributors, foreclosing competitors. Specific intent to monopolize is not required, violating the Sherman Act §§1 and 2.
  • United Shoe Machinery Corp v. U.S., 347 U.S. 521 (1954) exclusionary behavior
  • United States v. Grinnell Corp., 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.

Exclusive dealing

  • Standard Oil Co. v. United States (Standard Stations), 337 U.S. 293 (1949): oil supply contracts affected a gross business of $58 million, comprising 6.7% of the total in a seven-state area, in the context of many similar arrangements, held to be contrary to Clayton Act §3.
  • Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320 (1961): Tampa Electric Co contracted to buy coal for 20 years to provide power in Florida, and Nashville Coal Co later attempted to end the contract on the basis that it was an exclusive supply agreement contrary to the Clayton Act § 3 or the Sherman Act §§ 1 or 2. Held, no violation because foreclosed share of market was insignificant this did not affect competition sufficiently.
  • US v. Delta Dental of Rhode Island, 943 F. Supp. 172 (1996)

Price discrimination

Essential facilities

Tying products

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

Clayton Act 1914 §3

Predatory pricing

In theory, which is hotly contested, predatory pricing happens when large companies with huge cash reserves and large lines of credit stifle competition by selling their products and services at a loss for a time, to force their smaller competitors out of business. With no competition, they are then free to consolidate control of the industry and charge whatever prices they wish. At this point, there is also little motivation for investing in further technological research, since there are no competitors left to gain an advantage over. High barriers to entry such as large upfront investment, notably named sunk costs, requirements in infrastructure and exclusive agreements with distributors, customers, and wholesalers ensure that it will be difficult for any new competitors to enter the market, and that if any do, the trust will have ample advance warning and time in which to either buy the competitor out, or engage in its own research and return to predatory pricing long enough to force the competitor out of business. Critics argue that the empirical evidence shows that “predatory pricing” does not work in practice and is better defeated by a truly free market than by antitrust laws (see Criticism of the theory of predatory pricing).

Intellectual property

Scope of antitrust law

Antitrust laws do not apply to, or are modified in, several specific categories of enterprise (including sports, media, utilities, health careinsurancebanks, and financial markets) and for several kinds of actor (such as employees or consumers taking collective action).[29]

Collective actions

First, since the Clayton Act 1914 §6, there is no application of antitrust laws to agreements between employees to form or act in labor unions. This was seen as the “Bill of Rights” for labor, as the Act laid down that the “labor of a human being is not a commodity or article of commerce”. The purpose was to ensure that employees with unequal bargaining power were not prevented from combining in the same way that their employers could combine in corporations,[30] subject to the restrictions on mergers that the Clayton Act set out. However, sufficiently autonomous workers, such as professional sports players have been held to fall within antitrust provisions.[31]

Pro sports exemptions and the NFL cartel

Since 1922 the courts and Congress have left Major League Baseball, as played at Chicago‘s Wrigley Field, unrestrained by antitrust laws.

Second, professional sports leagues enjoy a number of exemptions. Mergers and joint agreements of professional football, hockey, baseball, and basketball leagues are exempt.[32] Major League Baseball was held to be broadly exempt from antitrust law in Federal Baseball Club v. National League.[33] Holmes J held that the baseball league’s organization meant that there was no commerce between the states taking place, even though teams traveled across state lines to put on the games. That travel was merely incidental to a business which took place in each state. It was subsequently held in 1952 in Toolson v. New York Yankees,[34] and then again in 1972 Flood v. Kuhn,[35] that the baseball league’s exemption was an “aberration”. However Congress had accepted it, and favored it, so retroactively overruling the exemption was no longer a matter for the courts, but the legislature. In United States v. International Boxing Club of New York,[36] it was held that, unlike baseball, boxing was not exempt, and in Radovich v. National Football League (NFL),[37] professional football is generally subject to antitrust laws. As a result of the AFL-NFL merger, the National Football League was also given exemptions in exchange for certain conditions, such as not directly competing with college or high school football.[38] However, the 2010 Supreme Court ruling in American Needle Inc. v. NFL characterised the NFL as a “cartel” of 32 independent businesses subject to antitrust law, not a single entity.

Media

Third, antitrust laws are modified where they are perceived to encroach upon the media and free speech, or are not strong enough. Newspapers under joint operating agreements are allowed limited antitrust immunity under the Newspaper Preservation Act of 1970.[39] More generally, and partly because of concerns about media cross-ownership in the United States, regulation of media is subject to specific statutes, chiefly the Communications Act of 1934 and the Telecommunications Act of 1996, under the guidance of the Federal Communications Commission. The historical policy has been to use the state’s licensing powers over the airwaves to promote plurality. Antitrust laws do not prevent companies from using the legal system or political process to attempt to reduce competition. Most of these activities are considered legal under the Noerr-Pennington doctrine. Also, regulations by states may be immune under the Parker immunity doctrine.[40]

  • Professional Real Estate Investors, Inc., v. Columbia Pictures, 508 U.S. 49 (1993)
  • Allied Tube v. Indian Head, Inc., 486 U.S. 492 (1988)
  • FTC v. Superior Ct. TLA, 493 U.S. 411 (1990)

Other

Fourth, the government may grant monopolies in certain industries such as utilities and infrastructure where multiple players are seen as unfeasible or impractical.[41]

Fifth, insurance is allowed limited antitrust exemptions as provided by the McCarran-Ferguson Act of 1945.[42]

Sixth, M&A transactions in the defense sector are often subject to greater antitrust scrutiny from the Department of Justice and the Federal Trade Commission.[43]

Remedies and enforcement

The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 1 to 7 of this title; and it shall be the duty of the several United States attorneys, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.

Sherman Act 1890 §4

The remedies for violations of U.S. antitrust laws are as broad as any equitable remedy that a court has the power to make, as well as being able to impose penalties. When private parties have suffered an actionable loss, they may claim compensation. Under the Sherman Act 1890 §7, these may be trebled, a measure to encourage private litigation to enforce the laws and act as a deterrent. The courts may award penalties under §§1 and 2, which are measured according to the size of the company or the business. In their inherent jurisdiction to prevent violations in future, the courts have additionally exercised the power to break up businesses into competing parts under different owners, although this remedy has rarely been exercised (examples include Standard OilNorthern Securities CompanyAmerican Tobacco CompanyAT&T Corporation and, although reversed on appeal, Microsoft). Three levels of enforcement come from the Federal government, primarily through the Department of Justice and the Federal Trade Commission, the governments of states, and private parties. Public enforcement of antitrust laws is seen as important, given the cost, complexity and daunting task for private parties to bring litigation, particularly against large corporations.

Federal government

Along with the Federal Trade Commission the Department of Justice in Washington, D.C. is the public enforcer of antitrust law.

Federal Trade Commission building, view from southeast

The federal government, via both the Antitrust Division of the United States Department of Justice and the Federal Trade Commission, can bring civil lawsuits enforcing the laws. The United States Department of Justice alone may bring criminal antitrust suits under federal antitrust laws.[44] Perhaps the most famous antitrust enforcement actions brought by the federal government were the break-up of AT&T’s local telephone service monopoly in the early 1980s[45] and its actions against Microsoft in the late 1990s.

Additionally, the federal government also reviews potential mergers to attempt to prevent market concentration. As outlined by the Hart-Scott-Rodino Antitrust Improvements Act, larger companies attempting to merge must first notify the Federal Trade Commission and the Department of Justice’s Antitrust Division prior to consummating a merger.[46] These agencies then review the proposed merger first by defining what the market is and then determining the market concentration using the Herfindahl-Hirschman Index (HHI) and each company’s market share.[46] The government looks to avoid allowing a company to develop market power, which if left unchecked could lead to monopoly power.[46]

The United States Department of Justice and Federal Trade Commission target nonreportable mergers for enforcement as well. Notably, between 2009 and 2013, 20% of all merger investigations conducted by the United States Department of Justice involved nonreportable transactions.[47]

  • FTC v. Sperry & Hutchinson Trading Stamp Co., 405 U.S. 233 (1972). Case held that the FTC is entitled to bring enforcement action against businesses that act unfairly, as where supermarket trading stamps company injured consumers by prohibiting them from exchanging trading stamps. The FTC could prevent the restrictive practice as unfair, even though there was no specific antitrust violation.

International cooperation

Despite considerable effort by the Clinton administration, the Federal government attempted to extend antitrust cooperation with other countries for mutual detection, prosecution and enforcement. A bill was unanimously passed by the US Congress;[48] however by 2000 only one treaty has been signed[49] with Australia.[50] On 3 July 2017 the Australian Competition and Consumer Commission announced it was seeking explanations from a US company, Apple Inc. In relation to potentially anticompetitive behaviour against an Australian bank in possible relation to Apple Pay.[51] It is not known whether the treaty could influence the enquiry or outcome.

In many cases large US companies tend to deal with overseas antitrust within the overseas jurisdiction, autonomous of US laws, such as in Microsoft Corp v Commission and more recently, Google v European Union where the companies were heavily fined.[52] Questions have been raised with regards to the consistency of antitrust between jurisdictions where the same antitrust corporate behaviour, and similar antitrust legal environment, is prosecuted in one jurisdiction but not another.[53]

State governments

State attorneys general may file suits to enforce both state and federal antitrust laws.

Private suits]

Private civil suits may be brought, in both state and federal court, against violators of state and federal antitrust law. Federal antitrust laws, as well as most state laws, provide for triple damages against antitrust violators in order to encourage private lawsuit enforcement of antitrust law. Thus, if a company is sued for monopolizing a market and the jury concludes the conduct resulted in consumers’ being overcharged $200,000, that amount will automatically be tripled, so the injured consumers will receive $600,000. The United States Supreme Court summarized why Congress authorized private antitrust lawsuits in the case Hawaii v. Standard Oil Co. of Cal., 405 U.S. 251, 262 (1972):

Every violation of the antitrust laws is a blow to the free-enterprise system envisaged by Congress. This system depends on strong competition for its health and vigor, and strong competition depends, in turn, on compliance with antitrust legislation. In enacting these laws, Congress had many means at its disposal to penalize violators. It could have, for example, required violators to compensate federal, state, and local governments for the estimated damage to their respective economies caused by the violations. But, this remedy was not selected. Instead, Congress chose to permit all persons to sue to recover three times their actual damages every time they were injured in their business or property by an antitrust violation. By offering potential litigants the prospect of a recovery in three times the amount of their damages, Congress encouraged these persons to serve as “private attorneys general”.

  • Pfizer, Inc. v. Government of India, 434 U.S. 308 (1978) foreign governments have standing to sue in private actions in the U.S. courts.
  • Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251 (1946) treble damages awarded under the Clayton Act §4 needed not to be mathematically precise, but based on a reasonable estimate of loss, and not speculative. This meant a jury could set a higher estimate of how much movie theaters lost, when the film distributors conspired with other theaters to let them show films first.
  • Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) indirect purchasers of goods where prices have been raised have no standing to sue. Only the direct contractors of cartel members may, to avoid double or multiple recovery.
  • Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) on arbitration

Theory

The Supreme Court calls the Sherman Antitrust Act a “charter of freedom”, designed to protect free enterprise in America.[54] One view of the statutory purpose, urged for example by Justice Douglas, was that the goal was not only to protect consumers, but at least as importantly to prohibit the use of power to control the marketplace.[55]

We have here the problem of bigness. Its lesson should by now have been burned into our memory by Brandeis. The Curse of Bigness shows how size can become a menace–both industrial and social. It can be an industrial menace because it creates gross inequalities against existing or putative competitors. It can be a social menace … In final analysis, size in steel is the measure of the power of a handful of men over our economy … The philosophy of the Sherman Act is that it should not exist … Industrial power should be decentralized. It should be scattered into many hands so that the fortunes of the people will not be dependent on the whim or caprice, the political prejudices, the emotional stability of a few self-appointed men … That is the philosophy and the command of the Sherman Act. It is founded on a theory of hostility to the concentration in private hands of power so great that only a government of the people should have it.

— Dissenting opinion of Justice Douglas in United States v. Columbia Steel Co.[55]

By contrast, efficiency argue that antitrust legislation should be changed to primarily benefit consumers, and have no other purpose. Free market economist Milton Friedman states that he initially agreed with the underlying principles of antitrust laws (breaking up monopolies and oligopolies and promoting more competition), but that he came to the conclusion that they do more harm than good.[56] Thomas Sowell argues that, even if a superior business drives out a competitor, it does not follow that competition has ended:

In short, the financial demise of a competitor is not the same as getting rid of competition. The courts have long paid lip service to the distinction that economists make between competition—a set of economic conditions—and existing competitors, though it is hard to see how much difference that has made in judicial decisions. Too often, it seems, if you have hurt competitors, then you have hurt competition, as far as the judges are concerned.[57]

Alan Greenspan argues that the very existence of antitrust laws discourages businessmen from some activities that might be socially useful out of fear that their business actions will be determined illegal and dismantled by government. In his essay entitled Antitrust, he says: “No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible.” Those, like Greenspan, who oppose antitrust tend not to support competition as an end in itself but for its results—low prices. As long as a monopoly is not a coercive monopoly where a firm is securely insulated from potential competition, it is argued that the firm must keep prices low in order to discourage competition from arising. Hence, legal action is uncalled for and wrongly harms the firm and consumers.[58]

Thomas DiLorenzo, an adherent of the Austrian School of economics, found that the “trusts” of the late 19th century were dropping their prices faster than the rest of the economy, and he holds that they were not monopolists at all.[59] Ayn Rand, the American writer, provides a moral argument against antitrust laws. She holds that these laws in principle criminalize any person engaged in making a business successful, and, thus, are gross violations of their individual expectations.[60] Such laissez faire advocates suggest that only a coercive monopoly should be broken up, that is the persistent, exclusive control of a vitally needed resource, good, or service such that the community is at the mercy of the controller, and where there are no suppliers of the same or substitute goods to which the consumer can turn. In such a monopoly, the monopolist is able to make pricing and production decisions without an eye on competitive market forces and is able to curtail production to price-gouge consumers. Laissez-faire advocates argue that such a monopoly can only come about through the use of physical coercion or fraudulent means by the corporation or by government intervention and that there is no case of a coercive monopoly ever existing that was not the result of government policies.

Judge Robert Bork‘s writings on antitrust law (particularly The Antitrust Paradox), along with those of Richard Posner and other law and economics thinkers, were heavily influential in causing a shift in the U.S. Supreme Court’s approach to antitrust laws since the 1970s, to be focused solely on what is best for the consumer rather than the company’s practices.[45]

See also[

Notes …

References

Texts
  • ET Sullivan, H Hovenkamp and HA Shlanski, Antitrust Law, Policy and Procedure: Cases, Materials, Problems (6th edn 2009)
  • CJ Goetz, FS McChesney and TA Lambert, Antitrust Law, Interpretation and Implementation (5th edn 2012)
  • P Areeda and L Kaplow, Antitrust Analysis: Problems, Texts, Cases (1997)
Theory
  • W Adams and JW Brock, Antitrust Economics on Trial: Dialogue in New Learning (Princeton 1991) ISBN 0-691-00391-2.
  • O Black, Conceptual Foundations of Antitrust (2005)
  • RH BorkThe Antitrust Paradox (Free Press 1993) ISBN 0-02-904456-1.
  • Choi, Jay Pil (ed.) (2007). Recent Developments in Antitrust: Theory and EvidenceThe MIT PressISBN978-0-262-03356-5.
  • Antonio Cucinotta, ed. Post-Chicago Developments in Antitrust Law (2003)
  • David S Evans. Microsoft, Antitrust and the New Economy: Selected Essays (2002)
  • John E Kwoka and Lawrence J White, eds. The Antitrust Revolution: Economics, Competition, and Policy (2003)
  • RA PosnerAntitrust Law: An Economic Perspective (1976)
Articles
Historical
  • Adolf Berle and Gardiner MeansThe Modern Corporation and Private Property (1932)
  • Louis BrandeisThe Curse of Bigness (1934)
  • Alfred ChandlerThe Visible Hand: The Managerial Revolution in American Business (1977)
  • J Dirlam and A Kahn, Fair Competition: The Law and Economics of Antitrust Policy (1954)
  • J Dorfman, The Economic Mind in American Civilization 1865–1918 (1949)
  • T Freyer, Regulating Big Business: Antitrust in Great Britain and America, 1880–1990 (1992)
  • W Hamilton & I Till, Antitrust in Action (U.S. Government Printing Office, 1940)
  • W Letwin, Law and Economic Policy in America: The Evolution of the Sherman Antitrust Act (1965)
  • E Rozwenc, ed. Roosevelt, Wilson and The Trusts. (1950)
  • George StiglerThe Organization of Industry (1968)
  • G Stocking and M Watkins, Monopoly and Free Enterprise (1951).
  • H Thorelli, The Federal Antitrust Policy: Origination of an American Tradition (1955)
  • S Webb and B WebbIndustrial Democracy (9th edn 926) Part III, ch 2

External links

https://en.wikipedia.org/wiki/United_States_antitrust_law

Industrial Concentration


Industrial concentration” refers to a structural characteristic of the business sector. It is the degree to which production in an industry—or in the economy as a whole—is dominated by a few large firms. Once assumed to be a symptom of “market failure,” concentration is, for the most part, seen nowadays as an indicator of superior economic performance. In the early 1970s, Yale Brozen, a key contributor to the new thinking, called the profession’s about-face on this issue “a revolution in economics.” Industrial concentration remains a matter of public policy concern even so.

The Measurement of Industrial Concentration

Industrial concentration was traditionally summarized by the concentration ratio, which simply adds the market shares of an industry’s four, eight, twenty, or fifty largest companies. In 1982, when new federal merger guidelines were issued, the Herfindahl-Hirschman Index (HHI) became the standard measure of industrial concentration. Suppose that an industry contains ten firms that individually account for 25, 15, 12, 10, 10, 8, 7, 5, 5, and 3 percent of total sales. The four-firm concentration ratio for this industry—the most widely used number—is 25 + 15 + 12 + 10 = 62, meaning that the top four firms account for 62 percent of the industry’s sales. The HHI, by contrast, is calculated by summing the squared market shares of all of the firms in the industry: 252 + 152 + 122 + 102 + 102 + 82 + 72 + 52 + 52 + 32 = 1,366. The HHI has two distinct advantages over the concentration ratio. It uses information about the relative sizes of all of an industry’s members, not just some arbitrary subset of the leading companies, and it weights the market shares of the largest enterprises more heavily.

In general, the fewer the firms and the more unequal the distribution of market shares among them, the larger the HHI. Two four-firm industries, one containing equalsized firms each accounting for 25 percent of total sales, the other with market shares of 97, 1, 1, and 1, have the same four-firm concentration ratio (100) but very different HHIs (2,500 versus 9,412). An industry controlled by a single firm has an HHI of 1002 = 10,000, while the HHI for an industry populated by a very large number of very small firms would approach the index’s theoretical minimum value of zero.

Concentration in the U.S. Economy

According to the U.S. Department of Justice’s merger guidelines, an industry is considered “concentrated” if the HHI exceeds 1,800; it is “unconcentrated” if the HHI is below 1,000. Since 1982, HHIs based on the value of shipments of the fifty largest companies have been calculated and reported in the manufacturing series of the Economic Census.1 Concentration levels exceeding 1,800 are rare. The exceptions include glass containers (HHI = 2,959.9 in 1997), motor vehicles (2,505.8), and breakfast cereals (2,445.9). Cigarette manufacturing also is highly concentrated, but its HHI is not reported owing to the small number of firms in that industry, the largest four of which accounted for 89 percent of shipments in 1997. At the other extreme, the HHI for machine shops was 1.9 the same year.

Whether an industry is concentrated hinges on how narrowly or broadly it is defined, both in terms of the product it produces and the extent of the geographic area it serves. The U.S. footwear manufacturing industry as a whole is very unconcentrated (HHI = 317 in 1997); the level of concentration among house slipper manufacturers is considerably higher, though (HHI = 2,053.4). Similarly, although the national ready-mix concrete industry is unconcentrated (HHI = 29.4), concentration in that industry undoubtedly is much higher in specific cities and towns that typically are served by only a handful of such firms.

These examples suggest that concentration varies substantially across U.S. industries. Trends in concentration vary from industry to industry, but most changes in concentration proceed at a glacial pace. So, too, does aggregate concentration: the fifty largest U.S. companies accounted for 24 percent of manufacturing value added (revenue minus the costs of fuel, power, and raw materials) in 1997, the same percentage as in 1992 (and as in 1954, for that matter). On some measures—the percentages of total employment and total assets controlled by the nation’s 50, 100, or 200 largest firms—industrial concentration in the United States actually has declined since World War II.

Concentration indexes calculated for a particular year conceal the identities of the industry’s members. In reality, turnover among the nation’s leading firms is fairly regular over long time horizons, averaging between 2 and 5 percent annually. Success at one point in time does not guarantee survival: only three of the ten largest U.S. companies in 1909 made the top one hundred list in 1987. Available concentration indexes, which are based solely on domestic manufacturing data, also ignore the global dimensions of industrial production.

The Causes and Consequences of Industrial Concentration

Some industries are more concentrated than others because of technical properties of their production technologies or unique characteristics of the markets they serve. Economies of scale, which allow firms to reduce their average costs as they increase their rates of output, favor large-scale production over small-scale production. Thus, industries for which scale economies are important (e.g., auto manufacturing and petroleum refining) are expected to be more concentrated than others in which costs do not fall as rapidly as output expands (e.g., cut-and-sew apparel manufacturing). Similarly, concentration tends to be higher in industries, such as aircraft and semiconductor manufacturing, where learning curves generate substantial production-cost savings as additional units of the original model or design are made.

Owing to so-called network effects, some goods increase in value as more people use them. Computer operating systems, word-processing software, and video recorder-players are examples of such goods, as are literal networks such as railroads, commercial air transportation, and wire line telephony. Because standard technologies and protocols that provide compatible interconnections are critical to the realization of network effects— allowing faxes to be sent and received or computer users easily to exchange files—consumers rationally favor large networks over small ones. The necessity of building networks that accommodate critical masses of users means that only a few providers will achieve dominant positions, and therefore the industry will tend to be highly concentrated. Such domination is likely to be temporary, however, since consumers will switch networks when benefits outweigh costs, as illustrated by the replacement of Betaformatted video tapes by VHS formatted ones, which in turn are being replaced by DVDs.

Industrial concentration also is promoted by barriers to entry, which make it difficult for new firms to displace established firms. Barriers to entry are erected by government-conferred privileges such as patents, copyrights and trademarks, exclusive franchises, and licensing requirements. Existing firms may possess other advantages over newcomers, including lower costs and brand loyalty, which make entry more difficult.

The fundamental public policy question posed by industrial concentration is this: Are concentrated industries somehow less competitive than unconcentrated ones? Concentration would have adverse effects if it bred market power—the ability to charge prices in excess of costs—thereby increasing industry profits at consumers’ expense. In theory, industrial concentration can facilitate the exercise of market power if the members of the industry agree to cooperate rather than compete, or if the industry’s dominant firm takes the lead in setting prices that rivals follow. And, indeed, the evidence generated by hundreds of econometric studies suggests that concentrated industries are more profitable than unconcentrated ones. But that evidence begs the question. It does not tell us whether profits are higher in concentrated industries because of market power effects or because the firms in those industries use resources more efficiently (i.e., have lower costs).

Some economists have found that concentration leads to higher prices, but the link observed typically is both small (prices elevated by 1–5 percent) and statistically weak. A detailed econometric study by Sam Peltzman (1977) reaches the opposite conclusion. He reports that profits are higher in concentrated industries not because prices are higher, but because they do not decline as much as costs do as efficient firms expand their scales of operation. Analyses by Yale Brozen (1982), Harold Demsetz (1974), and others have found that the positive relation between industrial concentration and profits disappears altogether when firm size is taken into account. These results are consistent with the hypothesis that some industries are more concentrated than others because large firms have significant cost advantages over small firms. There is, in short, little unequivocal evidence that industrial concentration per se is worrisome. Just the reverse seems to be true.

Public Policies Toward Industrial Concentration

Consolidating production in the hands of fewer firms through mergers and acquisitions obviously is the most direct route to industrial concentration. Preventing transactions that, by eliminating one or more competitors, would lead to undue increases in concentration and the possible exercise of market power by the remaining firms is the mandate of the two federal antitrust agencies—the U.S. Department of Justice and the Federal Trade Commission—under section 7 of the Clayton Act (1914). That mandate was strengthened considerably by the Hart-Scott-Rodino Act (1978), which requires firms to notify the antitrust authorities of their intention to merge and then to hold the transaction in abeyance until it has been reviewed. Most transactions with summed firm values of fifteen million dollars or more had to file premerger notifications initially; in February 2001 that threshold was raised to fifty million dollars and indexed for inflation.

Two important factors that antitrust authorities consider in deciding whether to allow a proposed merger to proceed are the level of market concentration if the merger is consummated and the change in market concentration from its premerger level. (Note that the “market” considered relevant for merger analysis hardly ever corresponds to the “industry” defined by the Economic Census; antitrust markets may be defined more broadly or more narrowly; in practice, the definition of the relevant market usually is the key to whether a merger is lawful or not.) Concentration thresholds are laid out in the Justice Department’s merger guidelines, first promulgated in 1968, revised substantially in 1982, and amended several times since.

The guidelines state that proposed mergers are unlikely to be challenged if the postmerger market is unconcentrated (HHI remains below 1,000). However, mergers generally will not be approved if, following consummation, market concentration falls within the 1,000–1,800 range, and the HHI increases by more than 100 points or, if the postmerger HHI is 1,800 or more, concentration increases by more than 50 points.2 Exceptions are provided when the merging firms can demonstrate significant cost savings, when barriers to entry are low, or when one of the merger’s partners would fail otherwise. (In the European Union, by contrast, competition policy, including merger law enforcement, is shaped principally by fears of possible “abuses of dominant market positions” by large firms.)

Studies examining the enforcement of section 7 under the merger guidelines have found that they are not always followed closely. Mergers are, indeed, more likely to be challenged the greater the level of market concentration and the higher the barriers to entry are thought to be. But law enforcement also is found to be influenced significantly by political pressures on the antitrust authorities from groups that stand to lose if a merger is approved, including rivals worried that the transaction will create a more effective competitor. In fact, studies of stock-market reactions to news that a merger is likely to be challenged typically find competitors to be the main beneficiaries of such decisions.


About the Author

William F. Shughart II is F. A. P. Barnard Distinguished Professor of Economics at the University of Mississippi. He was special assistant to the director of the Federal Trade Commission’s Bureau of Economics during the Reagan administration and currently is editor in chief of Public Choice and associate editor of the Southern Economic Journal.


Further Reading

Introductory

Adams, Walter, and James Brock. The Structure of American Industry. 11th ed. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2005.
Cabral, Luís M. B. Introduction to Industrial Organization. Cambridge: MIT Press, 2000.
Kwoka, John E. Jr., and Lawrence J. White. The Antitrust Revolution: Economics, Competition, and Policy. 4th ed. New York: Oxford University Press, 2004.
Pautler, Paul A. “Evidence on Mergers and Acquisitions.” Antitrust Bulletin 48 (Spring 2003): 119–221.
Shughart, William F. II. Antitrust Policy and Interest-Group Politics. New York: Quorum Books, 1990.
Shughart, William F. II. “Regulation and Antitrust.” In Charles K. Rowley and Friedrich Schneider, eds., The Encyclopedia of Public Choice. Vol. 1. Boston: Kluwer, 2004. Pp. 263–283.

 

Advanced

Brozen, Yale. Concentration, Mergers, and Public Policy. New York: Macmillan, 1982.
Carlton, Dennis W., and Jeffrey M. Perloff. Modern Industrial Organization. 3d ed. Reading, Mass.: Addison-Wesley, 2000.
Coate, Malcolm B., Richard S. Higgins, and Fred S. Mc-Chesney. “Bureaucracy and Politics in FTC Merger Challenges.” Journal of Law and Economics 33 (October 1990): 463–482.
Demsetz, Harold. “Two Systems of Belief About Monopoly.” In Harvey J. Goldschmid, H. Michael Mann, and J. Fred Weston, eds., Industrial Concentration: The New Learning. Boston: Little, Brown, 1974.
Goldschmid, Harvey J., H. Michael Mann, and J. Fred Weston, eds. Industrial Concentration: The New Learning. Boston: Little, Brown, 1974.
McChesney, Fred S., and William F. Shughart II, eds. The Causes and Consequences of Antitrust: The Public-Choice Perspective. Chicago: University of Chicago Press, 1995.
Peltzman, Sam. “The Gains and Losses from Industrial Concentration.” Journal of Law and Economics 20 (April 1977): 229–263.
Shy, Oz. The Economics of Network Industries. Cambridge: Cambridge University Press, 2001.
Stiglitz, Joseph E., and G. Frank Mathewson, eds. New Developments in the Analysis of Market Structure. Cambridge: MIT Press, 1986.

Footnotes

The Economic Census has been conducted every five years since 1967, and before that for 1954, 1958, and 1963. Prior to 1997, it was known as the Census of Manufactures. That same year, industries began being categorized according to the North American Industry Classification System (NAICS), which replaced the Standard Industrial Classification (SIC) codes used until 1992. Industrial concentration also is reported by the Economic Census on the basis of value added. Industry concentration ratios and HHIs for the 1992 and 1997 economic censuses can be accessed online at: http://www.census.gov/epcd/www/concentration.html. Information on industrial concentration is not readily available for sectors of the economy other than manufacturing.

When firms with market shares of s1 and s2 merge, the HHI increases by (s1 + s2)2 − s12 − s22 = 2s1s2. So, for example, if a merger is proposed between the two largest firms in the hypothetical ten-firm industry described earlier, the HHI would increase by 2 × 25 × 15 = 750 points (from 1,366 to 2,116). According to the guidelines, that merger would in all likelihood be challenged.

 

Cryptocurrency

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Various cryptocurrency logos.

cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.[1][2][3] Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.[4]

The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.[5]

Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency.[6] Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.

Contents

History

In 1983, the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash.[7][8] Later, in 1995, he implemented it through Digicash,[9] an early form of cryptographic electronic payments which required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party.

In 1996, the NSA published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, describing a Cryptocurrency system first publishing it in a MIT mailing list[10] and later in 1997, in The American Law Review (Vol. 46, Issue 4).[11]

In 1998, Wei Dai published a description of “b-money”, characterized as an anonymous, distributed electronic cash system.[12] Shortly thereafter, Nick Szabo described bit gold.[13] Like bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange, BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published. A currency system based on a reusable proof of work was later created by Hal Finney who followed the work of Dai and Szabo.[citation needed]

The first decentralized cryptocurrency, bitcoin, was created in 2009 by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, as its proof-of-work scheme.[14][15] In April 2011, Namecoin was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult. Soon after, in October 2011, Litecoin was released. It was the first successful cryptocurrency to use scrypt as its hash function instead of SHA-256. Another notable cryptocurrency, Peercoin was the first to use a proof-of-work/proof-of-stake hybrid.[16]

On 6 August 2014, the UK announced its Treasury had been commissioned to do a study of cryptocurrencies, and what role, if any, they can play in the UK economy. The study was also to report on whether regulation should be considered.[17]

Formal definition

According to Jan Lansky, a cryptocurrency is a system that meets six conditions:[18]

  1. The system does not require a central authority, its state is maintained through distributed consensus.
  2. The system keeps an overview of cryptocurrency units and their ownership.
  3. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  4. Ownership of cryptocurrency units can be proved exclusively cryptographically.
  5. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  6. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.[19]

Altcoin

The term altcoin has various similar definitions. Stephanie Yang of The Wall Street Journal defined altcoins as “alternative digital currencies,”[20] while Paul Vigna, also of The Wall Street Journal, described altcoins as alternative versions of bitcoin.[21] Aaron Hankins of the MarketWatch refers to any cryptocurrencies other than bitcoin as altcoins.[22]

Crypto token

blockchain account can provide functions other than making payments, for example in decentralized applications or smart contracts. In this case, the units or coins are sometimes referred to as crypto tokens (or cryptotokens).

Architecture

Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.[23]

As of May 2018, over 1,800 cryptocurrency specifications existed.[24] Within a cryptocurrency system, the safety, integrity and balance of ledgers is maintained by a community of mutually distrustful parties referred to as miners: who use their computers to help validate and timestamp transactions, adding them to the ledger in accordance with a particular timestamping scheme.[14]

Most cryptocurrencies are designed to gradually decrease production of that currency, placing a cap on the total amount of that currency that will ever be in circulation.[25] Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies can be more difficult for seizure by law enforcement.[1] This difficulty is derived from leveraging cryptographic technologies.

Blockchain

The validity of each cryptocurrency’s coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.[23][26] Each block typically contains a hash pointer as a link to a previous block,[26] a timestamp and transaction data.[27] By design, blockchains are inherently resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[28] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault toleranceDecentralized consensus has therefore been achieved with a blockchain.[29] Blockchains solve the double-spending problem without the need of a trusted authority or central server, assuming no 51% attack (that has worked against several cryptocurrencies).

Timestamping

Cryptocurrencies use various timestamping schemes to “prove” the validity of transactions added to the blockchain ledger without the need for a trusted third party.

The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256 and scrypt.[16]

Some other hashing algorithms that are used for proof-of-work include CryptoNightBlakeSHA-3, and X11.

The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there’s currently no standard form of it. Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme.[16]

Mining

Hashcoin mine

In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt.[30] This arms race for cheaper-yet-efficient machines has been on since the day the first cryptocurrency, bitcoin, was introduced in 2009.[30] With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest large sums of money on employing multiple high performance ASICs. Thus the value of the currency obtained for finding a hash often does not justify the amount of money spent on setting up the machines, the cooling facilities to overcome the enormous amount of heat they produce, and the electricity required to run them.[30][31]

Some miners pool resources, sharing their processing power over a network to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A “share” is awarded to members of the mining pool who present a valid partial proof-of-work.

As of February 2018, the Chinese Government halted trading of virtual currency, banned initial coin offerings and shut down mining. Some Chinese miners have since relocated to Canada.[32] One company is operating data centers for mining operations at Canadian oil and gas field sites, due to low gas prices.[33] In June 2018, Hydro Quebec proposed to the provincial government to allocate 500 MW to crypto companies for mining.[34] According to a February 2018 report from Fortune,[35] Iceland has become a haven for cryptocurrency miners in part because of its cheap electricity. Prices are contained because nearly all of the country’s energy comes from renewable sources, prompting more mining companies to consider opening operations in Iceland.[citation needed]

In March 2018, a town in Upstate New York put an 18-month moratorium on all cryptocurrency mining in an effort to preserve natural resources and the “character and direction” of the city.[36]

GPU price rise

An increase in cryptocurrency mining increased the demand of graphics cards (GPU) in 2017.[37] Popular favorites of cryptocurrency miners such as Nvidia’s GTX 1060 and GTX 1070 graphics cards, as well as AMD’s RX 570 and RX 580 GPUs, doubled or tripled in price – or were out of stock.[38] A GTX 1070 Ti which was released at a price of $450 sold for as much as $1100. Another popular card GTX 1060’s 6 GB model was released at an MSRP of $250, sold for almost $500. RX 570 and RX 580 cards from AMD were out of stock for almost a year. Miners regularly buy up the entire stock of new GPU’s as soon as they are available.[39]

Nvidia has asked retailers to do what they can when it comes to selling GPUs to gamers instead of miners. “Gamers come first for Nvidia,” said Boris Böhles, PR manager for Nvidia in the German region.[40]

Wallets

An example paper printable bitcoin wallet consisting of one bitcoin address for receiving and the corresponding private key for spending

cryptocurrency wallet stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet.

Anonymity

Bitcoin is pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys (or “addresses”).[41] Thereby, bitcoin owners are not identifiable, but all transactions are publicly available in the blockchain. Still, cryptocurrency exchanges are often required by law to collect the personal information of their users.[citation needed]

Additions such as Zerocoin, Zerocash and CryptoNote have been suggested, which would allow for additional anonymity and fungibility.[42][43]

Fungibility

Most cryptocurrency tokens are fungible and interchangeable. However, unique non-fungible tokens also exist. Such tokens can serve as assets in games like CryptoKitties.

Economics

Cryptocurrencies are used primarily outside existing banking and governmental institutions and are exchanged over the Internet.

Transaction fees

Transaction fees for cryptocurrency depend mainly on the supply of network capacity at the time, versus the demand from the currency holder for a faster transaction. The currency holder can choose a specific transaction fee, while network entities process transactions in order of highest offered fee to lowest. Cryptocurrency exchanges can simplify the process for currency holders by offering priority alternatives and thereby determine which fee will likely cause the transaction to be processed in the requested time.

For ether, transaction fees differ by computational complexity, bandwidth use, and storage needs, while bitcoin transaction fees differ by transaction size and whether the transaction uses SegWit. In September 2018, the median transaction fee for ether corresponded to $0.017,[44] while for bitcoin it corresponded to $0.55.[45]

Exchanges

Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies.

Atomic swaps

Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange.

ATMs

Jordan Kelley, founder of Robocoin, launched the first bitcoin ATM in the United States on 20 February 2014. The kiosk installed in Austin, Texas is similar to bank ATMs but has scanners to read government-issued identification such as a driver’s license or a passport to confirm users’ identities.[46]

Initial coin offerings

An initial coin offering (ICO) is a controversial means of raising funds for a new cryptocurrency venture. An ICO may be used by startups with the intention of avoiding regulation. However, securities regulators in many jurisdictions, including in the U.S., and Canada have indicated that if a coin or token is an “investment contract” (e.g., under the Howey test, i.e., an investment of money with a reasonable expectation of profit based significantly on the entrepreneurial or managerial efforts of others), it is a security and is subject to securities regulation. In an ICO campaign, a percentage of the cryptocurrency (usually in the form of “tokens”) is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, often bitcoin or ether.[47][48][49]

According to PricewaterhouseCoopers, four of the 10 biggest proposed initial coin offerings have used Switzerland as a base, where they are frequently registered as non-profit foundations. The Swiss regulatory agency FINMA stated that it would take a “balanced approach” to ICO projects and would allow “legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with national laws protecting investors and the integrity of the financial system.” In response to numerous requests by industry representatives, a legislative ICO working group began to issue legal guidelines in 2018, which are intended to remove uncertainty from cryptocurrency offerings and to establish sustainable business practices.[50]

Legality

The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed their use and trade,[51] others have banned or restricted it. According to the Library of Congress, an “absolute ban” on trading or using cryptocurrencies applies in eight countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, and the United Arab Emirates. An “implicit ban” applies in another 15 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan.[52] In the United States and Canada, state and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating “bitcoin scams” and ICOs in 40 jurisdictions.[53]

Various government agencies, departments, and courts have classified bitcoin differently. China Central Bank banned the handling of bitcoins by financial institutions in China in early 2014.

In Russia, though cryptocurrencies are legal, it is illegal to actually purchase goods with any currency other than the Russian ruble.[54] Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.[55]

Cryptocurrencies are a potential tool to evade economic sanctions for example against RussiaIran, or Venezuela. Russia also secretly supported Venezuela with the creation of the petro (El Petro), a national cryptocurrency initiated by the Maduro government to obtain valuable oil revenues by circumventing US sanctions.[citation needed]

In August 2018, the Bank of Thailand announced its plans to create its own cryptocurrency, the Central Bank Digital Currency (CBDC).[56]

Advertising bans

Bitcoin and other cryptocurrency advertisements were temporarily banned on Facebook,[57] GoogleTwitter,[58] Bing,[59] SnapchatLinkedIn and MailChimp.[60] Chinese internet platforms BaiduTencent, and Weibo have also prohibited bitcoin advertisements. The Japanese platform Line and the Russian platform Yandex have similar prohibitions.[61]

U.S. tax status

On 25 March 2014, the United States Internal Revenue Service (IRS) ruled that bitcoin will be treated as property for tax purposes. This means bitcoin will be subject to capital gains tax.[62] In a paper published by researchers from Oxford and Warwick, it was shown that bitcoin has some characteristics more like the precious metals market than traditional currencies, hence in agreement with the IRS decision even if based on different reasons.[63]

In July 2019, the IRS started sending letters to cryptocurrency owners warning them to amend their returns and pay taxes.[64]

The legal concern of an unregulated global economy

As the popularity of and demand for online currencies has increased since the inception of bitcoin in 2009,[65] so have concerns that such an unregulated person to person global economy that cryptocurrencies offer may become a threat to society. Concerns abound that altcoins may become tools for anonymous web criminals.[66]

Cryptocurrency networks display a lack of regulation that has been criticized as enabling criminals who seek to evade taxes and launder money.

Transactions that occur through the use and exchange of these altcoins are independent from formal banking systems, and therefore can make tax evasion simpler for individuals. Since charting taxable income is based upon what a recipient reports to the revenue service, it becomes extremely difficult to account for transactions made using existing cryptocurrencies, a mode of exchange that is complex and difficult to track.[66]

Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions.[66]

Loss, theft, and fraud

In February 2014 the world’s largest bitcoin exchange, Mt. Gox, declared bankruptcy. The company stated that it had lost nearly $473 million of their customers’ bitcoins likely due to theft. This was equivalent to approximately 750,000 bitcoins, or about 7% of all the bitcoins in existence. The price of a bitcoin fell from a high of about $1,160 in December to under $400 in February.[67]

Two members of the Silk Road Task Force—a multi-agency federal task force that carried out the U.S. investigation of Silk Road—seized bitcoins for their own use in the course of the investigation.[68] DEA agent Carl Mark Force IV, who attempted to extort Silk Road founder Ross Ulbricht (“Dread Pirate Roberts”), pleaded guilty to money laundering, obstruction of justice, and extortion under color of official right, and was sentenced to 6.5 years in federal prison.[68] U.S. Secret Service agent Shaun Bridges pleaded guilty to crimes relating to his diversion of $800,000 worth of bitcoins to his personal account during the investigation, and also separately pleaded guilty to money laundering in connection with another cryptocurrency theft; he was sentenced to nearly eight years in federal prison.[69]

Homero Josh Garza, who founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC’s complaint stated that Garza, through his companies, had fraudulently sold “investment contracts representing shares in the profits they claimed would be generated” from mining.[70]

On 21 November 2017, the Tether cryptocurrency announced they were hacked, losing $31 million in USDT from their primary wallet.[71] The company has ‘tagged’ the stolen currency, hoping to ‘lock’ them in the hacker’s wallet (making them unspendable). Tether indicates that it is building a new core for its primary wallet in response to the attack in order to prevent the stolen coins from being used.

In May 2018, Bitcoin Gold (and two other cryptocurrencies) were hit by a successful 51% hashing attack by an unknown actor, in which exchanges lost estimated $18m.[citation needed] In June 2018, Korean exchange Coinrail was hacked, losing US$37 million worth of altcoin. Fear surrounding the hack was blamed for a $42 billion cryptocurrency market selloff.[72] On 9 July 2018 the exchange Bancor had $23.5 million in cryptocurrency stolen.[73]

The French regulator Autorité des marchés financiers (AMF) lists 15 websites of companies that solicit investment in cryptocurrency without being authorised to do so in France.[74]

Darknet markets

Properties of cryptocurrencies gave them popularity in applications such as a safe haven in banking crises and means of payment, which also led to the cryptocurrency use in controversial settings in the form of online black markets, such as Silk Road.[66] The original Silk Road was shut down in October 2013 and there have been two more versions in use since then. In the year following the initial shutdown of Silk Road, the number of prominent dark markets increased from four to twelve, while the amount of drug listings increased from 18,000 to 32,000.[66]

Darknet markets present challenges in regard to legality. Bitcoins and other forms of cryptocurrency used in dark markets are not clearly or legally classified in almost all parts of the world. In the U.S., bitcoins are labelled as “virtual assets”. This type of ambiguous classification puts pressure on law enforcement agencies around the world to adapt to the shifting drug trade of dark markets.[75]

Reception

Cryptocurrencies have been compared to Ponzi schemespyramid schemes[76] and economic bubbles,[77] such as housing market bubbles.[78] Howard Marks of Oaktree Capital Management stated in 2017 that digital currencies were “nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it”, and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999).[79] The New Yorker has explained the debate based on interviews with blockchain founders in an article about the “argument over whether Bitcoin, Ethereum, and the blockchain are transforming the world”.[80]

While cryptocurrencies are digital currencies that are managed through advanced encryption techniques, many governments have taken a cautious approach toward them, fearing their lack of central control and the effects they could have on financial security.[81] Regulators in several countries have warned against cryptocurrency and some have taken concrete regulatory measures to dissuade users.[82] Additionally, many banks do not offer services for cryptocurrencies and can refuse to offer services to virtual-currency companies.[83] Gareth Murphy, a senior central banking officer has stated “widespread use [of cryptocurrency] would also make it more difficult for statistical agencies to gather data on economic activity, which are used by governments to steer the economy”. He cautioned that virtual currencies pose a new challenge to central banks’ control over the important functions of monetary and exchange rate policy.[84] While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if bitcoins are lost or stolen.[85] One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks.

An enormous amount of energy goes into proof-of-work cryptocurrency mining, although cryptocurrency proponents claim it is important to compare it to the consumption of the traditional financial system.[86]

There are also purely technical elements to consider. For example, technological advancement in cryptocurrencies such as bitcoin result in high up-front costs to miners in the form of specialized hardware and software.[87] Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. Additionally, cryptocurrency private keys can be permanently lost from local storage due to malware, data loss or the destruction of the physical media. This prevents the cryptocurrency from being spent, resulting in its effective removal from the markets.[88]

The cryptocurrency community refers to pre-mining, hidden launches, ICO or extreme rewards for the altcoin founders as a deceptive practice.[89] It can also be used as an inherent part of a cryptocurrency’s design.[90] Pre-mining means currency is generated by the currency’s founders prior to being released to the public.[91]

Paul KrugmanNobel Memorial Prize in Economic Sciences winner does not like bitcoin, has repeated numerous times that it is a bubble that will not last[92] and links it to Tulip mania.[93] American business magnate Warren Buffett thinks that cryptocurrency will come to a bad ending.[94] In October 2017, BlackRock CEO Laurence D. Fink called bitcoin an ‘index of money laundering‘.[95] “Bitcoin just shows you how much demand for money laundering there is in the world,” he said.

Academic studies

In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.[96]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[97][98]

See also

References …

https://en.wikipedia.org/wiki/Cryptocurrency

 

 

Story 2: Department of Justice Charges Health Care Fraud Against 58 Individuals — Pill Mills — Videos

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See the source image

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58 charged in health care fraud across Texas

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4 NYC area doctors among 20 charged in massive health care fraud scheme

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DOJ Announces Major Crackdown On Healthcare Fraud; 301 Arrested

Investigators warn of Medicaid fraud and home care abuse

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Medicare/Medicaid Fraud Waste and Abuse Training

Texas Health Care Fraud and Opioid Takedown Results in Charges Against 58

HOUSTON – The Justice Department has announced a coordinated health care fraud enforcement operation across the state of Texas involving charges against a total of 58 individuals, several of which are charged in Houston. They were allegedly involved in Medicare fraud schemes and networks of “pill mill” clinics resulting in $66 million in loss and 6.2 million pills. Of those charged, 16 were doctors or medical professionals, while 20 were charged for their role in diverting opioids.

The Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF) partners led the enforcement actions. The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, FBI, Department of Health and Human Services – Office of Inspector General (HHS-OIG) and Drug Enforcement Administration. In addition, the operation includes the participation of the Veterans Affairs – OIG and the Department of Labor (DOL), various other federal law enforcement agencies and Texas State Medicaid Fraud Control Units.

The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), DOL – Office of Worker’s Compensation Programs and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.

According to the Centers for Disease Control, approximately 115 Americans die every day of an opioid-related overdose.

Today’s arrests come three weeks after the Department announced that the Health Care Fraud Unit’s Houston Strike Force coordinated the filing of charges against dozens in a trafficking network responsible for diverting over 23 million oxycodone, hydrocodone and carisoprodol pills.

“Sadly, opioid proliferation is nothing new to Americans,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “What is new, is the reinforced fight being taken to dirty doctors and shady pharmacists. Texas may have four U.S. Attorneys, but we are focused on one health care mission: shutting down pills mills and rooting out corruption in health care. From Lufkin to Laredo and Dallas to Del Rio, one of us will shut these operations down.”

“Today’s charges highlight the amazing work being done by the Department’s Medicare Fraud Strike Force and our partners in Texas,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “As we continue to dedicate resources to battle healthcare and opioid fraud schemes in Texas and elsewhere, we are shining an inescapable light on dirty doctors, clinic owners, pharmacists and others who may have long believed they could perpetrate their frauds behind closed doors.”

“These arrests across multiple investigations and jurisdictions is further proof that successful teamwork exemplifies Texas law enforcement,” said DEA Houston Special Agent in Charge Will R. Glaspy. “Today’s operation affirms both our commitment to targeting those individuals who illegally divert opioids in our communities, and our collective will to bring those individuals to justice.”

“Health care fraud undermines our country by driving up medical costs, wasting taxpayer dollars, and often harming patients,” said Special Agent in Charge C.J. Porter of HHS-OIG. “Today’s takedown shows that we are fighting hard to protect Medicare and Medicaid and the patients served by those programs. Working closely with our law enforcement partners, our agents are determined to ensure fraudsters pay for their crimes.”

“Today’s announcement demonstrates the close collaboration between the FBI and its law enforcement partners in North Texas,” said Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office. “The enormous economic damage caused by those who defraud crucial public health programs, as well as the ever-increasing loss of life caused by illicit and illegitimate pill schemes cannot be overstated. The public can rest assured the FBI will continue to make these investigations a top priority moving forward.”

Among those charged in the Southern District of Texas are:

Diana Hernandez, Kathy Hernandez, Hieu Troung R.P.H., Clint Randall, Prince White, Charles Walton and Cedric Milbrurn were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through S&S Pharmacy of Houston.

Franklin Nwabugwu R.P.H. was charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through Golden Pharmacy of Houston.

Steven Inbody M.D. and Hoai-Huong Truong were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose.

Ashley McCain, John Sims, Gregory Comer, Kesia Banks and Jacqueline Hill were charged for their alleged participation in a scheme to unlawfully distribute and dispense a controlled substance without a legitimate medical purpose through Continuous Medical Care and Rehabilitation.

Trial Attorneys Devon Helfmeyer and Catherine Wagner and Assistant Deputy Chief Aleza Remi, all of the Fraud Section, are prosecuting the respective cases.

Several others were also charged in the Northern District of Texas (NDTX), Eastern District of Texas (EDTX) and Eastern District of Texas (EDTX).

“Healthcare should revolve around patients’ well-being – not providers’ personal interests,” said NDTX U.S. Attorney Erin Nealy Cox.  “When medical professionals line their own pockets by submitting false insurance claims or prescribing unnecessary medications, equipment or treatments, it not only drains taxpayer coffers – but it makes healthcare more expensive for everyone else. We cannot allow the healthcare industry to become bloated by fraud.”

“Every dollar stolen from Medicare through fraud comes out of the pocket of taxpayers,” said EDTXU.S. Attorney Joseph D. Brown of the “These are real costs that help drive up the cost of medical services for everyone. It is important that there be real consequences for those who cheat the system.”

“I am proud to fight healthcare fraud in Texas alongside Ryan Patrick, Erin Nealy Cox and Joe Brown,” said WDTX U.S. Attorney John Bash. “These crimes drive up the cost of health insurance, waste tax revenue and threaten the well-being of Texans.”

The Fraud Section leads the MFSF, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. MFSF maintains 15 strike forces operating in 24 districts. Since its inception in March 2007, MFSF has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

Medicaid Fraud and Abuse

Overview

Fraud, abuse and waste in Medicaid cost states billions of dollars every year, diverting funds that could otherwise be used for legitimate health care services. Not only do fraudulent and abusive practices increase the cost of Medicaid without adding value – they increase risk and potential harm to patients who are exposed to unnecessary procedures. In 2015, improper payments alone—which include things like payment for non-covered services or for services that were billed but not provided—totaled more than $29 billion according to the Government Accountability Office.

While Medicaid fraud involves knowingly misrepresenting the truth to obtain unauthorized benefit, abuse includes any practice that is inconsistent with acceptable fiscal, business or medical practices that unnecessarily increase costs. Waste encompasses overutilization of resources and inaccurate payments for services, such as unintentional duplicate payments. As states look for innovative ways to contain burgeoning Medicaid costs and promote the program’s integrity, fighting fraud and abuse offers one approach that everyone can support.

Program Integrity Initiatives. The federal government and states have adopted a variety of steps to combat Medicaid fraud, waste and abuse and to ensure that public funds are used to promote Medicaid enrollees’ health. According to the Medicaid and CHIP Payment Access Commission (MACPAC), these include data mining, audits, investigations, enforcement actions, technical assistance to help state agencies detect fraud and abuse, and provider and enrollee outreach and education. Well-designed program integrity initiatives ensure that:

  • Eligibility decisions are made correctly;
  • Prospective and enrolled providers meet federal and state participation requirements;
  • Delivered services are medically necessary and appropriate; and
  • Provider payments are made in the right amount and for appropriate services.

A 2013 Pew Charitable Trusts’ report found that states utilized three types of Medicaid fraud prevention strategies, including: provider screening; prior authorization and pre-payment reviews; and post-payment review and recovery. While states have traditionally relied upon the latter, “pay and chase” model in which they pay Medicaid claims and then try to recover improper payments, they are increasingly focusing on preventing and detecting fraudulent activities early on. New York, for example has integrated targeted data mining and risk analysis into its fraud-fighting tool box. In Texas, a few simple process changes and new pattern analysis and recognition efforts moved the state closer to ‘real–time analysis’ and significantly increased the amount of fraud identified.  For more on what these states have done to fight Medicaid fraud and abuse, check out this Webinar archive.

Federal Medicaid Integrity Provisions. The Affordable Care Act (ACA) introduced various requirements aimed at improving Medicaid program integrity. For example, the law created a web-based portal, enabling states to compare information on providers that have been terminated (and whose billing privileges have been revoked). An overview of the law’s provisions related to improving Medicaid program integrity is available here.

Common Examples of Medicaid Fraud

Provider Fraud

Patient Fraud

Insurer Fraud

  • Billing for services not performed
  • Billing duplicate times for one service
  • Falsifying a diagnosis
  • Billing for a more costly service than performed
  • Accepting kickbacks for patient referrals
  • Billing for a covered service when a noncovered service was provided
  • Ordering excessive or inappropriate tests
  •  Prescribing medicines that are not medically necessary or for use by people other than the patient
  • Filing a claim for services or products not received
  • Forging or altering receipts
  • Obtaining medications or products that are not needed and selling them on the black market
  • Providing false information to apply for services
  • Doctor shopping to get multiple prescriptions
  • Using someone else’s insurance coverage for services
  • Overstating the insurer’s cost in paying claims
  • Misleading enrollees about health plan benefits
  • Undervaluing the amount owed by the insurer to a health care provider under the terms of its contract
  • Denying valid claims

Additional NCSL Resources

 

Other Recent Medicaid Program Integrity and Fraud Prevention Resources

http://www.ncsl.org/research/health/medicaid-fraud-and-abuse.aspx

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The Pronk Pops Show 1248, May 1, 2019, Story 1: Desperate Delusional Democrats of Lying Lunatic Left Losers Finally Realize Attorney General Barr Is Going After The Clinton Obama Democratic Criminal Conspirators — Videos — Story 2: Attorney General Barr Will Not Testify Before House Judiciary Committee on May 2, 2019 — Videos — Story 3: Fired Former FBI Director Comey Is One of The Conspirators in The Clinton Obama Democratic Criminal Conspiracy Getting Nervous — New York Times Editorial — Videos

Posted on May 2, 2019. Filed under: 2020 Democrat Candidates, 2020 President Candidates, 2020 Republican Candidates, Addiction, American History, Banking System, Barack H. Obama, Bill Clinton, Blogroll, Breaking News, Bribery, Bribes, Budgetary Policy, Cartoons, Central Intelligence Agency, Clinton Obama Democrat Criminal Conspiracy, Communications, Congress, Constitutional Law, Corruption, Countries, Crime, Culture, Deep State, Donald J. Trump, Donald J. Trump, Donald J. Trump, Donald Trump, Economics, Education, Elections, Empires, Employment, Federal Bureau of Investigation (FBI), Federal Government, First Amendment, Fiscal Policy, Freedom of Speech, Government, Government Dependency, Government Spending, Hillary Clinton, History, House of Representatives, Human, Human Behavior, Illegal Immigration, Immigration, Impeachment, Independence, James Comey, Killing, Language, Law, Legal Immigration, Life, Lying, Media, National Security Agency, News, People, Philosophy, Photos, Politics, Polls, President Trump, Progressives, Public Corruption, Raymond Thomas Pronk, Regulation, Robert S. Mueller III, Rule of Law, Scandals, Second Amendment, Security, Senate, Subversion, Success, Surveillance and Spying On American People, Surveillance/Spying, Tax Policy, Taxation, Taxes, Technology, Ted Cruz, Trump Surveillance/Spying, Unemployment, United States Constitution, United States of America, United States Supreme Court, Videos, War, Wealth, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

 

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Story 1: Desperate Delusional Democrats of Lying Lunatic Left Losers Finally Realize Attorney General Barr Is Going After The Clinton Obama Democratic Criminal Conspirators — Videos

Sen. Graham presents full Mueller report at Senate hearing

Graham Questions Attorney General Barr at Senate Judiciary Committee Hearing

WATCH: Barr says Mueller did not suggest he had ‘misrepresented’ the special counsel’s report

Lindsey Graham’s real focus in Barr’s hearing: Hillary Clinton

Cruz rips Senate Democrats’ ‘weak argument’ at Barr hearing

WATCH: Barr says DOJ couldn’t show Trump’s instructions to McGahn were corrupt

Barr hearing gets heated: ‘You just slandered this man!’

Watch: Attorney General William Barr testifies before the Senate Judiciary Committee

Complete exchange between Sen. Kamala Harris and Attorney General William Barr (C-SPAN)

WATCH: Normalizing Trump campaign’s behavior erodes American democracy, Booker says

AG Barr faces Senate in contentious Mueller report hearing

Lou Dobbs Tonight 4/30/19 [FULL| Lou Dobbs Breaking Fox News Today April 30, 2019

PBS NewsHour live show May 1, 2019

Barr will make members of Congress look unprepared: Lewandowski

 

Barr defends clearing Trump on obstruction, chides ‘snitty’ Mueller letter

WASHINGTON (Reuters) – Attorney General William Barr on Wednesday fended off Democratic criticism of his decision to clear U.S. President Donald Trump of criminal obstruction of justice in the Russia inquiry and faulted Special Counsel Robert Mueller for not reaching a conclusion of his own on the issue.

In his first congressional testimony since releasing a redacted version of the report on April 18, Barr also dismissed Mueller’s complaints that he initially disclosed the special counsel’s conclusions on March 24 in an incomplete way that caused public confusion about critical aspects of the inquiry.

Illustrating tensions between the two men, Barr referred to as “a bit snitty” a March 27 letter from Mueller in which the special counsel urged him to release broader summaries of the findings to provide a fuller account – a step Barr rejected. Trump seized on Barr’s March 24 letter to declare that he had been fully exonerated.

Barr, the top U.S. law enforcement official and a Trump appointee, tangled with Democratic members of the Senate Judiciary Committee during roughly four hours of testimony at a sometimes testy hearing, with several Democrats calling for his resignation after the attorney general stoutly defended Trump.

“I don’t think the government had a prosecutable case,” said Barr, the first Trump administration official to testify about the contents of Mueller’s report.

The report detailed extensive contacts between Trump’s 2016 presidential campaign and Moscow and the campaign’s expectation that it would benefit from Russia’s actions, which included hacking and propaganda to boost Trump and harm Democratic candidate Hillary Clinton. The report also detailed a series of actions Trump took to try to impede the investigation.

Mueller, a former FBI director, concluded there was insufficient evidence to show a criminal conspiracy. Mueller opted not to make a conclusion on whether Trump committed obstruction of justice, but pointedly did not exonerate him. Barr has said he and Rod Rosenstein, the Justice Department’s No. 2 official, then determined based on Mueller’s findings there was insufficient evidence to establish that Trump committed criminal obstruction.

 

Barr often appeared to excuse or rationalize Trump’s conduct, asserting that the president’s motives fell short of trying to derail Mueller’s investigation.

“You’ve chosen to be the president’s lawyer and side with him over the interests of the American people,” Democratic Senator Mazie Hirono told Barr, calling him a person who has sacrificed a “once-decent reputation for the grifter and liar that sits in the Oval Office.”

Senator Lindsey Graham, the committee’s Republican chairman, rushed to Barr’s defense, telling Hirono, “You’ve slandered this man.”

Trump has been unfairly smeared, Barr said, by suspicions he had collaborated with Russia in the election. “Two years of his administration have been dominated by the allegations that have now been proven false. To listen to some of the rhetoric, you would think that the Mueller report had found the opposite,” Barr said.

Barr was critical of Mueller for not reaching a conclusion himself on whether Trump obstructed the probe.

U.S. Attorney General William Barr returns to a Senate Judiciary Committee hearing entitled “The Justice Department’s Investigation of Russian Interference with the 2016 Presidential Election.” on Capitol Hill in Washington, U.S., May 1, 2019. REUTERS/Aaron P. Bernstein

“I think that if he felt that he shouldn’t go down the path of making a traditional prosecutorial decision, then he shouldn’t have investigated,” Barr said.

Barr was asked about the report’s finding that in June 2017 Trump directed White House counsel Don McGahn to tell Rosenstein that Mueller had conflicts of interest and must be removed. McGahn did not carry out the order. Rosenstein had appointed Mueller the prior month.

Barr, appointed by Trump after the president fired his predecessor Jeff Sessions, seemed to minimize the incident and said Trump believed “he never outright directed the firing of Mueller.”

“We did not think in this case that the government could show corrupt intent,” Barr said.

Barr told Senator Dianne Feinstein, the committee’s top Democrat, “There is a distinction between saying to someone, ‘Go fire him, go fire Mueller,’ and saying, ‘Have him removed based on conflict.’ … The difference between them is if you remove someone for a conflict of interest, then there would be – presumably – another person appointed.”

Feinstein, sounding unconvinced, responded, “Wouldn’t you have to have in this situation an identifiable conflict that makes sense, or else doesn’t it just become a fabrication?”

‘INTENTION WAS VERY CLEAR’

Democratic Senator Dick Durbin was more blunt.

“I think the president’s intention was very clear. He wanted this to end,” Durbin said, referring to Mueller’s investigation.

Under questioning by Democratic Senator Kamala Harris, Barr acknowledged he did not review the investigation’s underlying evidence before deciding to clear Trump of obstruction.

Barr disputed the view that Mueller was handing the baton to Congress for possible impeachment proceedings. “That would be very inappropriate,” Barr said. “That’s not what the Justice Department does.”

Democrats control the House of Representatives, which would start any such impeachment effort, while Trump’s fellow Republicans control the Senate, which would have to vote to remove the president.

Democrats asked Barr about Mueller’s March 27 letter complaining that Barr’s March 24 letter to lawmakers stating the inquiry’s main conclusions did not “fully capture the context, nature and substance of this Office’s work.” Barr testified Mueller was unhappy with the way the conclusions were being characterized in the media, not his account of the conclusions, though Mueller’s letter does not mention media coverage.

“The letter is a bit snitty,” Barr said, using a word meaning disagreeably ill-tempered, “and I think it was probably written by a member of his staff.”

Democratic Senator Patrick Leahy said Barr misled Congress when he testified in April he did not know whether Mueller was happy with his initial characterization of his findings.

Several Democrats demanded that Mueller testify before the committee, but Graham ruled that out.

Barr told the panel he believed Russia and other countries were still a threat to interfere in U.S. elections.

Committee Republicans did not focus on Trump’s conduct but rather on what they saw as the FBI’s improper surveillance during the 2016 race of Trump aides they suspected of being Russian agents, as well as on the Kremlin’s election meddling.

To that end, Barr defended his accusation in a previous congressional hearing this month that American intelligence agencies engaged in “spying” on Trump campaign figures. He said “spying” is “a good English word” without a pejorative meaning and that he would not back off his language, which echoed Trump’s complaints that the Justice Department had engaged in wrongdoing toward his campaign.

Barr indicated that to him, the matter was closed.

“The report is now in the hands of the American people,” he said. “We’re out of it. We have to stop using the criminal justice system as a political weapon.”

The Democratic-led House Judiciary Committee voted to adopt an aggressive questioning format for a hearing set for Thursday with Barr, and a Democratic lawmaker said the panel would subpoena Barr if he does not appear. The committee’s subpoena deadline for Barr’s department to hand over an unredacted copy of Mueller’s report and the underlying evidence expired on Wednesday.

Reporting by Andy Sullivan, Sarah N. Lynch and David Morgan; Writing by Andy Sullivan and James Oliphant; Editing by Will Dunham

https://www.reuters.com/article/us-usa-trump-barr/barr-defends-clearing-trump-on-obstruction-chides-snitty-mueller-letter-idUSKCN1S73HF

 

 

Mueller complained that Barr’s letter did not capture ‘context’ of Trump probe

By Devlin Barrett and

Matt Zapotosky

April 30 at 8:21 PM

Special counsel Robert S. Mueller III wrote a letter in late March complaining to Attorney General William P. Barr that a four-page memo to Congress describing the principal conclusions of the investigation into President Trump “did not fully capture the context, nature, and substance” of Mueller’s work, according to a copy of the letter reviewed Tuesday by The Washington Post.

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The letter and a subsequent phone call between the two men reveal the degree to which the longtime colleagues and friends disagreed as they handled the legally and politically fraught task of investigating the president. Democrats in Congress are likely to scrutinize Mueller’s complaints to Barr as they contemplate the prospect of opening impeachment proceedings and mull how hard to press for Mueller himself to testify publicly.

At the time Mueller’s letter was sent to Barr on March 27, Barr had days prior announced that Mueller did not find a conspiracy between the Trump campaign and Russian officials seeking to interfere in the 2016 presidential election. In his memo to Congress, Barr also said that Mueller had not reached a conclusion about whether Trump had tried to obstruct justice, but that Barr reviewed the evidence and found it insufficient to support such a charge.

Days after Barr’s announcement, Mueller wrote the previously undisclosed private letter to the Justice Department, laying out his concerns in stark terms that shocked senior Justice Department officials, according to people familiar with the discussions.

[Justice Dept., House Democrats at impasse over Barr hearing]

“The summary letter the Department sent to Congress and released to the public late in the afternoon of March 24 did not fully capture the context, nature, and substance of this office’s work and conclusions,” Mueller wrote. “There is now public confusion about critical aspects of the results of our investigation. This threatens to undermine a central purpose for which the Department appointed the Special Counsel: to assure full public confidence in the outcome of the investigations.”

The letter made a key request: that Barr release the 448-page report’s introductions and executive summaries, and it made initial suggested redactions for doing so, according to Justice Department officials. The officials spoke on the condition of anonymity to discuss sensitive internal deliberations.

A spokesman for Mueller declined to comment.

[The Mueller report, annotated]

Justice Department officials said Tuesday that they were taken aback by the tone of Mueller’s letter and that it came as a surprise to them that he had such concerns. Until they received the letter, they believed Mueller was in agreement with them on the process of reviewing the report and redacting certain types of information, a process that took several weeks. Barr has testified to Congress previously that Mueller declined the opportunity to review his four-page memo to lawmakers that distilled the essence of the special counsel’s findings.

[Read: Attorney General Barr’s letter on the Mueller report’s principal conclusions]

In his letter to Barr, Mueller wrote that the redaction process “need not delay release of the enclosed materials. Release at this time would alleviate the misunderstandings that have arisen and would answer congressional and public questions about the nature and outcome of our investigation.”

Barr is scheduled to appear Wednesday morning before the Senate Judiciary Committee — a much-anticipated public confrontation between the nation’s top law enforcement official and Democratic lawmakers, where he is likely to be questioned at length about his interactions with Mueller.

A day after Mueller sent his letter to Barr, the two men spoke by phone for about 15 minutes, according to law enforcement officials.

In that call, Mueller said he was concerned that media coverage of the obstruction probe was misguided and creating public misunderstandings about the office’s work, according to Justice Department officials. Mueller did not express similar concerns about the public discussion of the investigation of Russia’s election interference, the officials said. Barr has testified previously that he did not know whether Mueller supported his conclusion on obstruction.

When Barr pressed Mueller on whether he thought Barr’s memo to Congress was inaccurate, Mueller said he did not but felt that the media coverage of it was misinterpreting the investigation, officials said.

In their call, Barr also took issue with Mueller calling his memo a “summary,” saying he had never intended to summarize the voluminous report, but instead provide an account of its top conclusions, officials said.

Justice Department officials said that, in some ways, the phone conversation was more cordial than the letter that preceded it, but that the two men did express some differences of opinion about how to proceed.

Barr said he did not want to put out pieces of the report, but rather issue the document all at once with redactions, and that he didn’t want to change course, according to officials.

In prepared written remarks for Wednesday’s hearing, Barr said he “did not believe that it was in the public interest to release additional portions of the report in piecemeal fashion, leading to public debate over incomplete information.”

Barr also gave Mueller his personal phone number and told him to call if he had future concerns, officials said.

Throughout the conversation, Mueller’s main worry was that the public was not getting an accurate understanding of the obstruction investigation, officials said.

“After the Attorney General received Special Counsel Mueller’s letter, he called him to discuss it,” a Justice Department spokeswoman said Tuesday evening in a statement. “In a cordial and professional conversation, the Special Counsel emphasized that nothing in the Attorney General’s March 24 letter was inaccurate or misleading. But, he expressed frustration over the lack of context and the resulting media coverage regarding the Special Counsel’s obstruction analysis. They then discussed whether additional context from the report would be helpful and could be quickly released.

“However, the Attorney General ultimately determined that it would not be productive to release the report in piecemeal fashion,” the spokeswoman said. “The Attorney General and the Special Counsel agreed to get the full report out with necessary redactions as expeditiously as possible. The next day, the Attorney General sent a letter to Congress reiterating that his March 24 letter was not intended to be a summary of the report, but instead only stated the Special Counsel’s principal conclusions, and volunteered to testify before both Senate and House Judiciary Committees on May 1 and 2.”

Some senior Justice Department officials were frustrated by Mueller’s complaints because they had expected that the report would reach them with proposed redactions, but it did not. Even when Mueller sent along his suggested redactions, those covered only a few areas of protected information, and the documents required further review, these people said.

The Washington Post and the New York Times had previously reported some members of Mueller’s team were frustrated with Barr’s characterization of their work, though Mueller’s own attitude was unknown before now.

In some team members’ view, the evidence they had gathered — especially on obstruction — was far more alarming and significant than how Barr had described it. That was perhaps to be expected, given that Barr had distilled a 448-page report into a terse, four-page memo to Congress.

Wednesday’s hearing will be the first time lawmakers question Barr since the Mueller report was released on April 18, and he is expected to face a raft of tough questions from Democrats.

[Attorney general says he believes ‘spying did occur’ in probe of Trump campaign associates]

Republicans on the committee are expected to question Barr about an assertion he made earlier in April that government officials had engaged in “spying” on the Trump campaign — a comment that was seized on by the president’s supporters as evidence the investigation into the president was biased.

Barr is also scheduled to testify Thursday before the House Judiciary Committee, but that hearing could be canceled or postponed amid a dispute about whether committee staff lawyers will question the attorney general. Rep. Jerrold Nadler (D-N.Y.), the panel’s chairman, called for a copy of the Mueller letter to be delivered to his committee by Wednesday morning.

Democrats have accused Barr of downplaying the seriousness of the evidence against the president. Mueller’s report described 10 significant episodes of possible obstruction of justice but said that because of long-standing Justice Department policy that says a sitting president cannot be indicted and because of Justice Department practice regarding fairness toward those under investigation, his team did not reach a conclusion about whether the president had committed a crime.

Devlin BarrettDevlin Barrett writes about national security and law enforcement for The Washington Post. He has previously worked at the Wall Street Journal, the Associated Press and the New York Post, where he started as a copy boy. Follow 

Matt ZapotoskyMatt Zapotosky covers the Justice Department for The Washington Post’s national security team. He has previously worked covering the federal courthouse in Alexandria and local law enforcement in Prince George’s County and Southern Maryland. Follow 

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Harris fundraises off Barr testimony: Americans ‘deserve truth and integrity’

Democratic presidential hopefuls Sens. Kamala Harris (Calif.) and Cory Booker (N.J.) sent out fundraising blasts Wednesday afternoon following their questioning of Attorney General William Barr on Capitol Hill.

Harris and Booker, who both sit on the Senate Judiciary Committee, joined other Democrats on the panel in pressing Barr about his handling of special counsel Robert Mueller‘s report about his investigation into Russia’s interference in the 2016 election.

A former federal prosecutor, Harris made headlines Wednesday when Barr admitted in response to her questioning that he did not review Mueller’s underlying evidence before concluding that President Trump did not obstruct probes into Russia’s election meddling.

“Bill Barr is acting more like the President’s personal attorney than the Attorney General of the United States. His job is to defend the rule of law and serve the American people, not shield the President from justice. He made something very clear today: he must resign,” Harris wrote in her email to supporters.

“I’m running for president because the American people deserve truth and integrity from their elected leaders. That’s not what we’re getting right now. If you’re with me in this fight, I need you now,” she added.

“William Barr has shown with actions in his handling of the Mueller Report’s release and with words in his testimony to Congress today that he’s put his political loyalty to Donald Trump before his duty to our country,” Booker said in his email to supporters while also calling for Barr to resign.

The attorney general has emerged as a top target of Democratic presidential contenders after it was revealed Tuesday that Mueller expressed frustration to Barr about the attorney general’s four-page summary of the Russia probe sent to Congress in late March.

Mueller said in a letter to Barr that the summary of the special counsel probe “did not fully capture the context, nature, and substance of this office’s work and conclusions.”

https://thehill.com/homenews/campaign/441677-harris-fundraises-off-barr-testimony-americans-deserve-truth-and-integrity

 

Story 2: Attorney General Barr Will Not Testify Before House Judiciary Committee on May 2, 2019 — Videos

CONGRESS

Barr won’t testify before House panel Thursday

The attorney general is boycotting the hearing amid a fight with Democrats over the ground rules for his testimony.

Updated 

The Justice Department issued a double-barreled rebuff to Democrats Wednesday, informing the House Judiciary Committee that Attorney General William Barr would not show up for his scheduled testimony before the panel and that the department would not comply with a subpoena for special counsel Robert Mueller’s full report.

“The administration has the nerve to dictate our procedures. It’s simply part of the administration’s complete stonewalling of Congress — period,” Chairman Jerry Nadler (D-N.Y.) told reporters.

“Given his lack of candor in describing the work of the special counsel, our members were right to insist that staff counsel be permitted to question the attorney general,” Nadler told reporters, referring to Barr’s Senate Judiciary Committee testimony earlier Wednesday.

“I understand why he wants to avoid that kind of scrutiny,” Nadler added. “He is terrified of having to face a skilled attorney.”

Justice Department spokeswoman Kerri Kupec countered that Nadler had established “unprecedented and unnecessary“ conditions on the hearing, adding, “Congress and the executive branch are co-equal branches of government, and each have a constitutional obligation to respect and accommodate one another’s legitimate interests.”

The moves by the Justice Department are sure to intensify the ongoing war between the Trump administration and Capitol Hill over House Democrats’ various investigations and oversight demands.

Nadler said he would seek to hold Barr in contempt of Congress if the department doesn’t turn over the unredacted Mueller report and all of the underlying evidence “in the next day or two.” The chairman also said he could issue a subpoena to compel Barr’s attendance at a future hearing.

The committee had teed up the clash earlier Wednesday after a tense party-line vote on establishing the ground rules for Thursday’s hearing. Under the motion adopted by the committee, the attorneys for the Democratic and Republican sides of the panel would have had an hour, equally divided, to question Barr, who had threatened to back out of the hearing if that was the arrangement.

Democrats said that despite DOJ claims, there is ample precedent to use staff attorneys. Republicans, meanwhile, have jumped to Barr’s defense, asserting that it would be “disrespectful” to have anyone but lawmakers question the attorney general.

Rep. Doug Collins of Georgia, the top Republican on the Judiciary Committee, accused Nadler of “torpedoing” the hearing over an unnecessary demand.

“By rejecting the chance to question Attorney General Barr or read the materials he’s provided, Democrats are trying to prolong an investigation the special counsel completed,” Collins said in a statement.

“What we have here is simply another opportunity to sidetrack and have a serial sideshow,” Collins said earlier Wednesday in opposing the Democrats’ ground rules for the hearing. “This has become nothing but theatre.”

Indeed, the committee’s meeting devolved into a shouting match at times, with Republicans haranguing Democrats with demands that it be adjourned.

Barr testified earlier Wednesday before the Senate Judiciary Committee, just hours after it was revealed that Mueller expressed concerns to Barr that his four-page summary of the special counsel’s findings “did not fully capture the context, nature, and substance” of the investigation.

In his March 27 letter to Barr, Mueller also said the attorney general sowed “public confusion” about the investigation, undermining public confidence in the probe into Russian interference in the 2016 election and possible obstruction of justice by President Donald Trump.

“I think there are great difficulties with the attorney general at this point. He seems — besides the fact that he clearly misled the American people, he seems to have testified non-truthfully to the Senate and to the House, which raises major questions,” Nadler said Wednesday.

During his Senate testimony, Barr consistently challenged Mueller’s legal theories and appeared to undercut many aspects of the special counsel’s report, rankling Democrats who accused the attorney general of seeking to protect the president.

The revelation about Mueller’s letter prompted even more Democratic lawmakers to call for Barr’s resignation, including some Judiciary Committee members as well as House Intelligence Committee Chairman Adam Schiff (D-Calif.).

Nadler also said on Wednesday that the committee is eyeing May 15 as the date for Mueller himself to testify before the committee. Barr has said he does not oppose allowing Mueller to testify, but Nadler told reporters that the committee is still negotiating with the Justice Department.

https://www.politico.com/story/2019/05/01/barr-testimony-house-democrats-1296377

Story 3: Fired Former FBI Director Comey Is One of The Conspirators in The Clinton Obama Democratic Criminal Conspracy Getting Nervious — Videos

James Comey: How Trump Co-opts Leaders Like Bill Barr

Accomplished people lacking inner strength can’t resist the compromises necessary to survive this president.

By James Comey

Mr. Comey is the former F.B.I. director.

CreditSarah Silbiger/The New York Times
Image
CreditCreditSarah Silbiger/The New York Times

People have been asking me hard questions. What happened to the leaders in the Trump administration, especially the attorney general, Bill Barr, who I have said was due the benefit of the doubt?

How could Mr. Barr, a bright and accomplished lawyer, start channeling the president in using words like “no collusion” and F.B.I. “spying”? And downplaying acts of obstruction of justice as products of the president’s being “frustrated and angry,” something he would never say to justify the thousands of crimes prosecuted every day that are the product of frustration and anger?

How could he write and say things about the report by Robert Mueller, the special counsel, that were apparently so misleading that they prompted written protest from the special counsel himself?

How could Mr. Barr go before the Senate Judiciary Committee on Wednesday and downplay President Trump’s attempt to fire Mr. Mueller before he completed his work?

 

And how could Rod Rosenstein, the deputy attorney general, after the release of Mr. Mueller’s report that detailed Mr. Trump’s determined efforts to obstruct justice, give a speech quoting the president on the importance of the rule of law? Or on resigning, thank a president who relentlessly attacked both him and the Department of Justice he led for “the courtesy and humor you often display in our personal conversations”?

What happened to these people?

I don’t know for sure. People are complicated, so the answer is most likely complicated. But I have some idea from four months of working close to Mr. Trump and many more months of watching him shape others.

Amoral leaders have a way of revealing the character of those around them. Sometimes what they reveal is inspiring. For example, James Mattis, the former secretary of defense, resigned over principle, a concept so alien to Mr. Trump that it took days for the president to realize what had happened, before he could start lying about the man.

But more often, proximity to an amoral leader reveals something depressing. I think that’s at least part of what we’ve seen with Bill Barr and Rod Rosenstein. Accomplished people lacking inner strength can’t resist the compromises necessary to survive Mr. Trump and that adds up to something they will never recover from. It takes character like Mr. Mattis’s to avoid the damage, because Mr. Trump eats your soul in small bites.

It starts with your sitting silent while he lies, both in public and private, making you complicit by your silence. In meetings with him, his assertions about what “everyone thinks” and what is “obviously true” wash over you, unchallenged, as they did at our private dinner on Jan. 27, 2017, because he’s the president and he rarely stops talking. As a result, Mr. Trump pulls all of those present into a silent circle of assent.

Speaking rapid-fire with no spot for others to jump into the conversation, Mr. Trump makes everyone a co-conspirator to his preferred set of facts, or delusions. I have felt it — this president building with his words a web of alternative reality and busily wrapping it around all of us in the room.

I must have agreed that he had the largest inauguration crowd in history because I didn’t challenge that. Everyone must agree that he has been treated very unfairly. The web building never stops.

From the private circle of assent, it moves to public displays of personal fealty at places like cabinet meetings. While the entire world is watching, you do what everyone else around the table does — you talk about how amazing the leader is and what an honor it is to be associated with him.

Sure, you notice that Mr. Mattis never actually praises the president, always speaking instead of the honor of representing the men and women of our military. But he’s a special case, right? Former Marine general and all. No way the rest of us could get away with that. So you praise, while the world watches, and the web gets tighter.

Next comes Mr. Trump attacking institutions and values you hold dear — things you have always said must be protected and which you criticized past leaders for not supporting strongly enough. Yet you are silent. Because, after all, what are you supposed to say? He’s the president of the United States.

You feel this happening. It bothers you, at least to some extent. But his outrageous conduct convinces you that you simply must stay, to preserve and protect the people and institutions and values you hold dear. Along with Republican members of Congress, you tell yourself you are too important for this nation to lose, especially now.

You can’t say this out loud — maybe not even to your family — but in a time of emergency, with the nation led by a deeply unethical person, this will be your contribution, your personal sacrifice for America. You are smarter than Donald Trump, and you are playing a long game for your country, so you can pull it off where lesser leaders have failed and gotten fired by tweet.

And then you are lost. He has eaten your soul.

James Comey is the former F.B.I. director and author of “A Higher Loyalty: Truth, Lies, and Leadership.”

 

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The Pronk Pops Show 1160, October 22, 2018, Story 1: President Trump Houston Rally For Senator Ted Cruz — Attacks The Radical Democrat Mob For Open Borders — Videos — Story 2: Mob of 5000 Hondurans Head North Through Middle of Mexico Headed To United States — Videos — Story 3: Medicare For All — Socialized Medicine — American People Like The Medical Plans Paid For My Employers — Videos

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Pronk Pops Show 1160 October 22, 2018

Pronk Pops Show 1159 October 19, 2018

Pronk Pops Show 1158 October 18, 2018

Pronk Pops Show 1157 October 16, 2018

Pronk Pops Show 1156 October 15, 2018

Pronk Pops Show 1155 October 12, 2018

Pronk Pops Show 1154 October 11, 2018

Pronk Pops Show 1153 October 10, 2018

Pronk Pops Show 1152 October 5, 2018

Pronk Pops Show 1151 October 4, 2018

Pronk Pops Show 1150 October 3, 2018

Pronk Pops Show 1149, October 1, 2018

Pronk Pops Show 1148, September 28, 2018

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Pronk Pops Show 1146, September 25, 2018

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Pronk Pops Show 1139, September 13, 2018

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Pronk Pops Show 1133, August 29, 2018

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Pronk Pops Show 1130, August 22, 2018

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Pronk Pops Show 1128, August 20, 2018

Pronk Pops Show 1127, August 17, 2018

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Pronk Pops Show 1123, August 13, 2018

Pronk Pops Show 1122, August 9, 2018

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Pronk Pops Show 1120, August 6, 2018

Pronk Pops Show 1119, August 2, 2018

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Pronk Pops Show 1117, July 31, 2018

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Pronk Pops Show 1112, July 23, 2018

Pronk Pops Show 1111, July 19, 2018

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Pronk Pops Show 1109, July 17, 2018

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Pronk Pops Show 1107, July 12, 2018

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Pronk Pops Show 1101, July 2, 2018

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Story 1: President Trump Houston Rally For Senator Ted Cruz — Attacks The Radical Democrat Mob For Open Borders –Videos

Trump, Cruz hold ‘MAGA’ rally in Houston, Texas

 

President Trump heads to Texas to stump for old foe Sen. Ted Cruz

Trump fans, along with supporters of Texas Republican Senator Ted Cruz, started waiting in line at Houston’s Toyota Center in Houston as early as Sunday for a Monday evening rally. (Oct. 22) AP

LINKEDINCOMMENTMORE

WASHINGTON – One of the political world’s most fractious couples gets together again Monday in Texas.

President Donald Trump heads to Houston to stump for embattled incumbent Sen. Ted Cruz, the latest phase in a political relationship that has gone from warm to bad to tolerable.

“Ted Cruz has become a friend of mine,” Trump said during a political rally over the weekend in Missoula, Montana – never mind that Trump once nicknamed him “Lyin’ Ted,” insulted his wife, and suggested his rival’s father was somehow involved in the John F. Kennedy assassination.

For his part, Cruz has expressed his support for the president, though he recently declined to describe Trump as either friend or foe.

“He’s the president,” Cruz said Sunday on ABC’s “This Week.” “I work with the president in delivering on our promises.”

Donald J. Trump

@realDonaldTrump

Big Night In Texas!!!!

Perhaps Cruz still remembers describing Trump as a “pathological liar.”

The two men are apt to be all smiles Monday night at the Toyota Center in Houston. They have a common interest in holding the Texas Senate seat for Republicans, as Cruz faces a well-funded challenge from his Democratic opponent, Rep. Beto O’Rourke.

“He’s not Lyin’ Ted anymore,” Trump said as he departed for Texas. “He’s beautiful Ted.”

With Cruz moving up in polls – Real Clear Politics’ average of recent surveys gives him a 7 percentage point lead – many political analysts have suggested Trump is traveling to Texas in order to take credit for Cruz’s expected victory on Nov. 6.

Many Republicans criticized Trump during his rise to the presidency in 2016 – Cruz included – but in 2018, many have welcomed him back to the campaign trail as the GOP struggles to keep control of Congress.

Trump, ever the campaigner, is happy to help as he loads up his schedule with rally after rally. He needs all the Republican lawmakers he can get to move his agenda.

And candidates like Cruz need votes from Trump supporters who might be inclined to stay home for the midterms because the president himself is not on the ballot.

“This is a marvelous example of how principles in politics last only until the next election,” said Jeffrey Engel, director of the Center for Presidential History at Southern Methodist University in Dallas.

The pair have periodically made a show of friendship. In March 2017, the Texas senator, his wife Heidi and their two daughters had dinner at the White House.

But there are indications, however, that the two aren’t particularly close, and that memories of the 2016 bloodletting linger.

Early in the race for the 2016 Republican presidential nomination, Cruz passed up repeated opportunities to criticize Trump as the New York businessman led all pre-primary polls. Aides at the time noted that Trump was busy attacking all of their other mutual opponents.

Trump, too, declined to attack Cruz – at first. But that changed as Cruz began moving up in polls ahead of the Iowa caucuses, the first contest on the Republican nomination calendar.

At that point, Trump began questioning whether Cruz, born in Canada, was eligible to be president and to note that other senators didn’t like him. “Lyin’ Ted” became part of the campaign lexicon.

Cruz responded by hitting Trump for “New York values” and describing him as a liberal on social issues like abortion.

The Republican race boiled down mainly to a contest between Trump and Cruz, upping their rhetoric and rivalry. While Trump won most of the GOP primaries, Cruz defeated him in Iowa and Wisconsin, and became the challenger with the best chance of denying Trump a majority of delegates headed into the Republican National Convention.

At that point, Trump unleashed some of his most vicious attacks of the campaign on Cruz. At one point, he cited a highly questionable National Enquirer story suggesting that Cruz’s father Rafael was part of a JFK assassination plot.

In March 2016, Trump tweeted out an unflattering photo of Cruz’s wife, Heidi, beside a glamour shot of Melania Trump, a former professional model.

“The images are worth 1,000 words,” the tweet said.

Cruz lashed back with equally harsh comments about Trump.

“This man is a pathological liar,” he said at one point. “A narcissist at a level I don’t think this country’s ever seen.”

Just for good measure, Cruz described Trump as “utterly amoral” and “a serial philanderer.”

When Cruz withdrew from the race after a crushing loss to Trump in the Indiana primary in May 2016, he refused to endorse his rival. Even at the July convention in Cleveland, as boos from Trump delegates rained down, Cruz urged Republicans to vote their conscience.

By September, Cruz offered a tepid endorsement of Trump via Facebook page.

During his ABC interview on Sunday, Cruz said “2016 was an election unlike any other,” but there is no point in taking things personally when it comes to dealing with Trump.

“If I put my own personal hurt feelings ahead of representing Texas,” Cruz said, “that would be abdicating my responsibility.”

https://www.usatoday.com/story/news/politics/2018/10/22/donald-trump-ted-cruz-texas-rally/1694688002/

 

Story 2: Mob of 5000 Hondurans Head North Through Middle of Mexico Headed To United States — Videos

Migrant caravan lurches toward U.S.

President Trump Using The Migrant Caravan To Rile Up Base Ahead Of Midterms? | Deadline | MSNBC

‘The Five’ reacts to growing migrant caravan crisis

What can US do to stop migrant caravans?

Migrant Caravan Shrinks After Trump’s Warning

The U.S. Helped Destabilize Honduras. Now Honduran Migrants Are Fleeing Political & Economic Crisis

Gingrich: Caravan is an attack on US sovereignty

Thousands Of Migrants Stopped At Guatemala-Mexico Border | NBC Nightly News

Trump issues threats over immigrant caravan heading to U.S.

Tucker: Should America help caravan migrants?

 

Migrant caravan could prompt a wider confrontation between Mexico, US

Published 

TAPACHULA, Mexico — As thousands of Central American migrants continue their long walk to the U.S. border, prompting daily condemnations from President Donald Trump, the Mexican government has had to decide: Are Trump’s threats enough to prompt an intervention?

For now, Mexican police have merely stepped aside as the caravan has passed, watching first as migrants took rafts across the river that separates the country from Guatemala, and then as they continued by foot along the main highway, chanting, “Si, se pudo,” or “Yes, we did it.”

That response appears to have been conveyed to the White House, and now, once again, Mexico’s most important bilateral relationship appears to be on shaky ground.

“Sadly, it looks like Mexico’s Police and Military are unable to stop the Caravan heading to the Southern Border of the United States,” Trump tweeted. He later said on Fox News, “I don’t know what’s going on with Mexico. It looks like the people are walking right through the middle of Mexico. So I’m not exactly thrilled there either!”

The caravan has marked another chapter in Mexico’s complicated effort to balance American threats with the country’s own domestic politics. Detaining or deporting the caravan’s members would certainly please Trump, but it would flout the country’s own immigration laws and further the impression that the Mexican government is taking orders from a hostile White House.

So far, the Mexican police appear to be conscious of that tension,and the optics of their presence. Riot police have stopped to pose for pictures in their gear, as if ready to combat the migrants, letting international television crews film them before retreating.

The caravan risks a wider confrontation with Washington if Trump threatens to cut off aid to Mexico, as he has threatened Central America, or attempts to seal the border with the U.S. military. Every day, billions of dollars of trade crosses the U.S.-Mexico border, and any attempt to block those flows could inflict serious economic harm on Mexico. The newly renegotiated North American trade agreement is also hanging in the balance as it has yet to be ratified by legislatures.

The dilemma for the Mexican government is worsened by the fact that the incoming government of Andrés Manuel López Obrador has campaigned on a gentler approach to migration, saying it would not hunt down migrants as if they were criminals.

“You have Trump’s government pressing Mr. Peña Nieto’s government to deter or stop the flows, but on the other hand, you have the pressure of public opinion and the new government saying you should treat the newcomers with dignity,” said Daniel Millan, a former spokesman in President Enrique Peña Nieto’s government who is now a political consultant. “They are walking a tightrope.”

Mexico’s incoming foreign minister, Marcelo Ebrard, said Monday on Mexican radio that it would be a “big mistake” for the Mexican government to use its own armed forces to try to stop the caravan.

“It would be inadmissible in Mexico to use the army against these people,” he said, adding that he didn’t think Peña Nieto’s government was considering that step. “We would not be in agreement with that at all.”

After a meeting with Canadian Foreign Minister Chrystia Freeland in Ottawa on Monday, he added that his administration would offer more work visas for Central Americans. “We are going to invest in Honduras, Guatemala and El Salvador,” he said.

Peña Nieto addressed the caravan on Friday when he said, “Mexico does not allow people to enter our territory illegally and much less so violently.”

That day, on the bridge connecting Mexico and Guatemala, Mexican police fired tear gas at the migrants, closing the official border as film crews and photographers captured their actions. But just next to the bridge, police watched as thousands of migrants crossed the border illegally by raft, settling for the night in the main plaza of the border city of Ciudad Hidalgo.

Still, the images on the bridge, at least for that moment, appeared to impress conservatives in the United States.

“I want to thank the Mexican officials and the Mexican police for putting their lives on the line,” said conservative commentator Laura Ingraham on Fox News on Friday night.

“I think this is the best Mexico has ever been,” said former congressman and Trump supporter Newt Gingrich on Ingraham’s show.

But in Mexico, the images were seen differently.

Mexican political analyst Carlos Bravo Regidor captured the reaction of many here, tweeting sarcastically: “The wall already exists. It’s called Mexico. Congratulations, Mr. Trump.”

On Sunday afternoon, there was yet another test. A convoy of police officers, wearing riot gear and carrying shields, headed for the migrant caravan, ready to form a barricade that would block the more than 5,000 Central Americans headed north.

“We’re here to enforce the laws of Mexico,” one police officer said. “You can’t just pass through our country without permission.”

When the migrants approached the police checkpoint, officers pleaded with them to apply for legal status in Mexico. There were empty buses ready to take them for processing. A police helicopter swooped overhead. The caravan paused briefly as the migrants talked among themselves. Maybe Mexican authorities would give them temporary visas, they thought, or maybe it was a trick, a sneaky way for Mexico to deport the migrants en masse.

“Vamos!” several migrants yelled, and they walked through the police checkpoint. The police did not stop them. Instead, officers threw their riot shields in a bus and drove away. The caravan continued, undeterred.

Mexico is by no means lax on undocumented Central American migrants. Last year, according to its Interior Ministry, it deported 82,000 migrants from the region. It’s possible that, at any moment, the Mexican government could decide to take a harsher stance with the migrant caravan.

“We know they can decide to stop us at any time, and it scares me,” said Alside Caseres, a member of the caravan from Honduras, who is traveling with his wife and son.

It was Monday morning, and Caseres and his family were packing their bags, preparing for another day of walking in the heat. They had slept on ground of the concrete plaza last night, eating noodles and tortillas donated by local residents.

“Viva Mexico!” yelled some of the other migrants who had already started walking.

On Sunday, Trump tweeted, “People have to apply for asylum in Mexico first, and if they fail to do that, the U.S. will turn them away.”

Indeed, Mexican authorities have repeatedly encouraged the Central American migrants to apply for legal status here, but it was unclear what that status would yield: asylum in Mexico, a temporary visa that would allow enough time for migrants to traverse the country, or something else. Several hundred members of the caravan have agreed to be processed legally, and over the weekend they were taken to a shelter in southern Mexico, which is currently closed to journalists.

On Monday morning, organizers of the caravan expressed skepticism toward Mexican immigration authorities and their offer of legal status.

“Humanitarian assistance has been predicated on detention,” said Irineo Mujica, the director of Pueblo Sin Fronteras

https://www.thehour.com/news/article/Migrant-caravan-could-prompt-a-wider-13327884.php

Story 3: Medicare For All — Socialized Medicine — American People Like The Medical Plans Paid For My Employers — Videos

Government Can’t Fix Healthcare

Bernie Sanders Shreds Trump’s Anti-Medicare for All Fear-Mongering

Trump criticizes Democrats’ Medicare for All plan in op-ed

 

 

Democrats back Medicare for all in about half of House races they’re contesting

LINKEDINCOMMENTMORE

WASHINGTON – Democratic candidates for the House are backing a Medicare for all approach to the nation’s health care system in just over half the races in which a Democrat is on the ballot, according to a new survey provided first to USA TODAY.

The tally by National Nurses United, which supports a government-run, single-payer system, shows how the idea has risen in popularity even as Republicans attack the plan as socialized medicine.

“This is historic,” said Ken Zinn, the group’s political director. “The campaign has really picked up steam.”

But polls show the public is still fuzzy on the details of “Medicare for all,” and support drops when they’re given more information. The nonpartisan Kaiser Family Foundation defines the program as one that would replace virtually all other sources of private health coverage and most public programs.

“When you talk about policy details, that whole discussion is something different,” said Mollyann Brodie, senior vice president of public opinion and survey research at Kaiser Family Foundation. “And we don’t know entirely how things will play out.”

House Minority Leader Nancy Pelosi, who is not a co-sponsor, said in June that Medicare for all will be one of the proposals considered if Democrats take the House. But, noting that she has always been for a “public option,” Pelosi said all proposals would “have to be evaluated in terms of the access that they give, the affordability of it and how we pay for it.”

“It’s all on the table,” she said.

Democrats have made health care one of their top campaign issues this cycle after many Republicans voted for failed legislation last year that would have removed millions of Americans from the rolls of the insured. Many are pledging to fix the flaws in Obamacare while targeting GOP attempts to “sabotage” it. But Republicans in battleground districts are trying to tie Democrats to Medicare for all, even in some cases where the candidates say they don’t support the approach.

“Voters have and will continue to reject a complete government takeover of the health care system,” said Jesse Hunt, national press secretary at the National Republican Congressional Committee.

In an op-ed for USA TODAY, President Donald Trump ripped apart Medicare for all as “just the beginning” of a socialist agenda for Democrats. He said the program would cost an “astonishing” $32.6 trillion during its first 10 years, a reference to a study by the Mercatus Center of George Mason University of a health care plan proposed by Sen. Bernie Sanders, I-Vt., a 2016 Democratic presidential candidate who may run in 2020.

Politifact found that Americans in the aggregate would pay more to the government to fund health care but less overall than they pay now. The fact-checking site also noted the study forecast that total health care spending would drop by about $2 trillion over 10 years.

Sanders, in an interview with USA TODAY, said the president is “a pathological liar” who can’t be trusted.

“This is a president who, by sabotaging the Affordable Care Act, has driven premiums up in many parts of the country,” he said. “So when he talks about my bill – Medicare for all – people, I think, should be highly dubious about what he says.”

Medicare for all is one of the top issues at the heart of a divide between its progressive advocates and centrist Democrats who say the proposal is a political loser and who would rather focus on shoring up the Affordable Care Act.

The division played out in the red state of Indiana last week with two Democratic candidates campaigning on opposite sides of the issue. While 9th district congressional candidate Liz Watson campaigned with Sanders in favor of it, Democratic Sen. Joe Donnelly cut an ad saying “socialists” will turn health care over to the government “over my dead body.”

Tracking polls from the Kaiser Family Foundation show a modest increase in support for the idea of a national health plan since Sanders made it part of his rallying cry during the 2016 presidential campaign.

About 6 in 10 adults favor a national health plan or Medicare for all system. Less than half did a decade ago.

Progressives say they have polling on their side.

“This is a solution that resonates with the American people,” said Zinn, with National Nurses United. “But it is also a reflection of the absolute crisis that so many are facing (with health care).”

But the surveys also show that support erodes when people hear the arguments that the plan could increase taxes or government control. And nearly half of adults surveyed last October falsely assumed they could keep their current insurance under a single-payer plan.

“The notion that it’s popular is premised upon people knowing almost nothing about it,” said Matt Bennett, co-founder of the centrist Democratic think tank Third Way. “That’s a problem for a very complicated thing that would transform one-fifth of our entire economy.”

In the National Nurses United survey, candidates were not counted in support of Medicare for all if they merely said they were open to considering the idea or that they support “universal health care,” which may still include private insurers. They also were not included if they backed a scaled-back version, such as expanding Medicare to those over 49 or allowing it as a “public option” that would still have to compete against private plans.

By that definition, the group found Democratic candidates supporting Medicare for all in 223 of the 431 House contests in which a Democratic candidate is running. But Republicans are likely to win 79 of those races, according to the nonpartisan Cook Political Report. Democrats are expected to win 127. The remaining 17 are highly competitive.

There are 123 co-sponsors of the pending Medicare for all legislation in the House. In July, Democrats in July launched a Medicare for all congressional caucus with 70 founding members.

But even caucus members like New Jersey Rep. Bonnie Watson Coleman say the process for achieving such a program may be gradual, such as first allowing Medicare as an option.

“I don’t know who’s actually running on just Medicare for all as the be-all end-all,” Watson Coleman told the USA TODAY Network. “Even if we are pursuing it, it may be a bit of a journey to get there.”

Bennett said a single-payer health care system certainly won’t happen while Trump is president, and it’s unlikely that a Democratic president would attempt such “a radical transformation” of the system.

In the Senate, however, Sanders’ bill has 16 Democratic co-sponsors, including other potential 2020 presidential candidates: Sens. Elizabeth Warren of Massachusetts, Kirsten Gillibrand of New York, Kamala Harris of California and Cory Booker of New Jersey.

“That’s not a coincidence,” Zinn said. “They understand that to be viable in a Democratic primary, they have to be on the right side of this issue.”

https://www.usatoday.com/story/news/politics/elections/2018/10/23/democrats-back-medicare-all-half-contested-house-races/1732966002/

 

 

 

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The Pronk Pops Show 1144, September 20, 2018, Story 1: President Trump Rocks at Make America Great Again Rally in Las Vegas Nevada —  Build The Wall With $25 Billion in Funding and Balance The Budget — We Need More Republicans — Videos — Story 2: Dow Jones Industrial Average and S&P 500 Hits An All Time High — Videos — Story 3: Free U.S.-Led Uncensored Internet and Authoritarian Chinese-Led Censored Internet — Breaking Up Is Hard To Do — Videos — Story 4: American People’s Right To Privacy — National Privacy Law? — Videos

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