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Showing posts with label WHISTLEBLOWERS. Show all posts
Showing posts with label WHISTLEBLOWERS. Show all posts

Monday, February 7, 2022

This may have flown under your radar

 

POGO Weekly Spotlight

February 7, 2022

Editor’s Note: We’re experiencing some technical difficulties, which forced us to postpone sending this newsletter until today. We’re sorry for the delay, and we hope to be back on our regular schedule later this week.

We saw some great news last week that may have flown under your radar. A key Senate committee has now approved three nominees to the Merit Systems Protection Board (MSPB), setting the nominees up for a vote in the full Senate. If all three are approved, the board will have a quorum for the first time in five years.

The MSPB is an agency that helps manage government whistleblowers’ claims that they have been retaliated against. And without a quorum, the MSPB is unable to grant those whistleblowers temporary relief or a final judgement on their claims of retaliation. It currently has a backlog of around 3,600 cases.

The board is finally very close to being able to function again and provide much needed aid for whistleblowers who have been retaliated against for telling the truth. We hope to have more updates soon on the full vote.

ANALYSIS

Disclosing Oversight Recommendations: How Are Agencies Doing?

New POGO research shows few federal agencies are fully compliant with requirements to disclose recommendations they receive from key government oversight offices.

Read More

LETTER

POGO Submits Second Comment on Creation of New Federal Beneficial Ownership Database

If set up well, a beneficial ownership database will help law enforcement agencies prevent bad actors from abusing the U.S. financial system.

Read More

QUOTE OF THE WEEK

“We’re in kind of a post-Watergate era right now in some ways and I think that’s exactly the time you want to do something like a reform of government ethics.”

Dylan Hedtler-Gaudette, Government Affairs Manager, in Government Executive

WATCHLIST

POGO’s own 
@Melissa_Wasser is here to give you the lowdown on the #MSPB, why it matters, and what it means for #whistleblowers. Make sure to watch:

Policy Counsel Melissa Wasser explains why we should care about the movement at the MSPB.

ONE LINERS

“All of this is stuff that is so insane, any person who has no interest in any of this would clearly say this should be against the rules, but then the people who get in the position to change the rules have these conflicts and they have no interest in solving them.”

Walt Shaub, Senior Ethics Fellow, in E&E News

 

“This kind of review should include looking at places where the Department is inappropriately captured by the defense industry, and these selections show an appalling lack of diversity in perspectives to meaningfully evaluate how these processes continue to result in runaway spending and less bang for the buck.”

Mandy Smithberger, Former Director of the Center for Defense Information, in Defense News

 

“It’s deeply troubling that a Justice of the Supreme Court would participate in something that’s kind of shrouded in secrecy that way.”

Sarah Turberville, Director of The Constitution Project at POGO, in Orlando Sentinel

 

“Even if [Sen. Pat Toomey] did nothing illegal, it just looks really sketchy and really corrupt.”

Dylan Hedtler-Gaudette, Government Affairs Manager, in the Philadelphia Inquirer


 

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Friday, December 24, 2021

Wall Street Has Deployed a Dirty Tricks Playbook Against Whistleblowers for Decades – Now the Secrets Are Spilling Out

 


Wall Street Has Deployed a Dirty Tricks Playbook Against Whistleblowers for Decades – Now the Secrets Are Spilling Out

By Pam Martens: November 29, 2021 ~

Carmen Segarra, a Bank Examiner, Was Fired by the New York Fed for Refusing to Change Her Negative Examination of Goldman Sachs

Carmen Segarra, an Attorney and Bank Examiner, Was Fired by the New York Fed after Refusing to Change Her Negative Examination of Goldman Sachs

For more than two decades, the general counsels of Wall Street’s mega banks have been meeting together secretly once a year at ritzy hotels and resorts around the world. This would appear to be a clear violation of anti-trust law but since Wall Street’s revolving door has compromised the U.S. Department of Justice over much of that time span, there has been no pushback from the Justice Department to shut down these clandestine meetings.

Wall Street insiders say that among the top agenda items at this annual confab are strategy sessions on how to keep Congress from enacting legislation that would bring an end to Wall Street’s privatized justice system called mandatory arbitration. This system allows the most serially corrupt industry in America to effectively lock the nation’s courthouse doors to claims of fraud from its workers and customers. This private justice system also keeps the details of many of Wall Street’s systemic crimes out of the press.

Wall Street’s McJustice system is just one element of a fully-loaded dirty tricks playbook that Wall Street uses to crush an honest worker who is intent on holding the firm to account. The playbook includes gaslighting; a campaign of ordered ostracizing by coworkers; demotion; an internal investigation with a preordained outcome to malign the reputation of the whistleblower; blackballing in the industry; and, frequently, the ultimate humiliation of being escorted out of the building by security guards. As the dirty campaign unfolds in front of colleagues, it achieves the intended additional goal of silencing any coworkers who might be thinking about reporting illegal activities.

Following this psychological warfare inside the Wall Street firm, the honest whistleblower will be met with the next chapter of the sociopathic playbook: Wall Street’s star chamber (mandatory arbitration) tribunals if he or she attempts to get compensated for damages, lost compensation and so forth. The Wall Street firms frequently bring current employees who were friends with the fired whistleblower to testify to outrageous lies about the honest worker in an effort to inflict more emotional damage to ensure this individual will look for future employment anywhere but Wall Street.

In one particularly brazen example of how this private justice system functions outside of the law, JPMorgan Chase employees felt confident that they could get away with falsifying written customer complaints against an honest whistleblower, broker Johnny Burris, and enter them at his arbitration hearing before the industry’s self-regulator, FINRA. Burris had earned the wrath of the bank for having the temerity to tape-record his bosses pressuring him to sell the firm’s own mutual funds to his clients, which generated more profits for the bank, rather than being allowed to decide which mutual funds would properly serve his clients’ best interests.

Burris was not the only honest whistleblower to use tape recordings as a means of securing a factual archive of events against Wall Street’s retaliatory lies. Carmen Segarra was an attorney and bank examiner employed by the New York Fed, a thoroughly captured regulator. She was deployed at Goldman Sachs. After she was bullied by colleagues (aptly called “relationship managers”) to change her negative examination of Goldman, she went to the Spy Store in lower Manhattan and bought a tiny microphone and recorded 46 hours of audio that demonstrated just how compromised by Wall Street the New York Fed had become. Segarra was fired after she refused to change her negative examination of Goldman.

Because Segarra was a bank examiner, she filed a lawsuit in federal district court in Wall Street’s stomping ground, the Southern District of New York, asserting a violation of protected activity as a bank examiner under the Federal Deposit Insurance Act. The case was dismissed by Judge Ronnie Abrams, who was married to Greg Andres, a partner at law firm Davis Polk & Wardwell. The case was before the court from October 2013 until April 3, 2014 when Judge Abrams scheduled a telephone conference with both sides to share the pesky detail that “it had just come to her attention that her husband [wait for it] was representing Goldman Sachs in an advisory capacity.” The Judge did not recuse herself and dismissed Segarra’s case.

Segarra courageously served the public interest by taking those 46 hours of tapes and her story to investigative reporters at ProPublica and public radio’s This American Life. What has happened to Goldman Sachs since then? On October 22, 2020 the Justice Department charged Goldman Sachs and its Malaysian subsidiary each with one felony count for “engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials…” in order to secure business for Goldman Sachs.

Gary Aguirre Was Fired by the SEC for Pressing to Serve a Subpoena on a Powerful Wall Street Figure

Attorney Gary Aguirre Was Fired by the SEC for Pressing to Serve a Subpoena on a Powerful Wall Street Figure

Segarra has plenty of company when it comes to honest attorneys who have become the target when they push too hard to hold powerful Wall Street titans or firms accountable. Former SEC attorney Gary Aguirre testified before the U.S. Senate Committee on the Judiciary in June 2006 about how trying to do his job with honesty derailed his career at the SEC. During Aguirre’s tenure at the SEC he had pressured his superiors to serve a subpoena on John Mack, a powerful former official at Morgan Stanley. Aguirre wanted to take testimony about Mack’s potential involvement in insider trading. What happened instead was that Mack was protected and Aguirre was fired over the phone while on vacation. The termination looked particularly suspicious because just three days prior, Aguirre had contacted the Office of Special Counsel to discuss the SEC’s protection of Mack.

More sadistic shenanigans from Wall Street’s dirty tricks playbook have spilled out this year in two federal lawsuits filed against JPMorgan Chase. In an amended complaint filed on June 23 by Donald Turnbull, a 15-year employee of the bank who had risen to the rank of Managing Director, he told the court that he had been fired for “cooperating in good faith with a federal investigation into the Bank’s trading practices.”

According to Turnbull’s lawsuit, once JPMorgan Chase “learned the nature of the information Mr. Turnbull had shared with government prosecutors — JPMorgan launched a retaliatory campaign against Mr. Turnbull. Alarmed by the perception of its institutional culpability, JPMorgan hurried through a faux inquiry into Mr. Turnbull’s unimpeachable trading practices. Based on a pretextual narrative that the Bank had lost confidence in him, the Bank terminated him, cancelled his unvested stock, and threatened to claw back his prior compensation.”

Less than five months after Turnbull filed his federal lawsuit, Shaquala Williams, a female attorney who worked in compliance at JPMorgan Chase, filed her own lawsuit in the same federal district court in Manhattan for whistleblower retaliation for protected activities under the Sarbanes-Oxley Act of 2002. (Whistleblower retaliation claims can sometimes avoid the mandatory arbitration trap and be sustained in federal court.) Williams makes extremely serious charges, alleging that the bank was effectively keeping two sets of books so it could make “emergency” payments to third party intermediaries, one of whom was a former government official tied to Jamie Dimon, the bank’s Chairman and CEO. Williams also claims that the bank had set up sham controls that violated its non-prosecution agreement with the Justice Department. (See the full text of Williams’ federal complaint here.)

Peter Sivere

Peter Sivere Is Still Fighting a Battle with Barclays that Began a Decade Ago

An equally disturbing story comes from Peter Sivere, who spent the majority of his career as a compliance official at two mega banks on Wall Street attempting to get his superiors to acknowledge the internal misconduct he reported, first at JPMorgan Chase and then at Barclays. JPMorgan Chase, which has subsequently admitted to an unprecedented five felony counts brought by the Justice Department between 2014 and 2020, had security guards humiliate Sivere by escorting him out of the building. Barclays first demoted Sivere, then terminated him.

The Board of Directors of JPMorgan Chase appears to be an enabling component of the dirty tricks playbook. Since 2014, the Board members have been reading about unfathomable levels of crime inside the bank they oversee but they have kept the same Chairman and CEO, Jamie Dimon, at the helm of the bank throughout that period. Less than 10 months after the bank admitted to its fourth and fifth felony counts on September 29, 2020, JPMorgan’s Board handed Dimon not a pink slip but a $50 million bonus. That gives a whole new level of meaning to Senator Bernie Sanders’ oft repeated message that “the business model of Wall Street is fraud.”

Oliver Budde, Attorney Representing Peter Sivere

Oliver Budde, Attorney Representing Peter Sivere

Wall Street veteran and writer, William Cohan, has written extensively about Sivere’s dogged efforts in articles at Bloomberg News in 2012, the Financial Times in 2014 and the New York Times in 2015. One might think that this kind of media exposure would bring some kind of closure to Sivere. It hasn’t. That’s because both Sivere and his attorney, Oliver Budde, believe justice has been ill served in this matter.

We offered attorney Budde the opportunity to explain his theory of Sivere’s case for our readers. He provided us with the following statement:

“I see a conspiracy among Barclays, Sullivan & Cromwell and DOJ [Department of Justice] to bury the truth that in 2011, as a Barclays compliance officer, Peter Sivere blew the whistle on some Barclays employees misappropriating confidential information provided by client Hewlett-Packard in regard to foreign exchange — the very misconduct that seven years later became the basis for a 2018 letter agreement whereby DOJ declined to prosecute Barclays for the misconduct, in exchange for Barclays enhancing its compliance program, cooperating with DOJ and paying $12.9 million. Sullivan & Cromwell, Barclays’ outside counsel, also signed that letter. In it, DOJ with Sullivan & Cromwell’s endorsement gave Barclays special credit for ‘timely, voluntary self-disclosure’ in 2016 of precisely what Sivere had flagged to Barclays five years earlier in 2011. But in 2011, Barclays preferred to continue the wrongdoing rather than address it. So instead, Barclays decided essentially to ruin Sivere’s life, and so far, so good.

“The conspiracy appears quite daring, if not reckless, because Sivere is on record repeating his concerns to various audiences both inside and outside Barclays from 2013 to 2015, including to the New York Times in August 2015. We have abundant evidence that DOJ, Sullivan & Cromwell, the Barclays Board of Directors, CEO Antony Jenkins, Head of Compliance Hector Sants, and many others at Barclays all knew of Sivere’s 2011 whistleblowing by 2015. We have evidence that Sivere participated in a 2015 teleconference with DOJ and FBI personnel, and Sivere swears in an affidavit that he described his 2011 Hewlett-Packard concerns on that call. And finally, Alexander Willscher, the very Sullivan & Cromwell attorney who signed the 2018 DOJ letter, was one of four Sullivan & Cromwell recipients of dozens of emails Sivere sent in 2015 in which he again explained those concerns at length.

“Why bury the truth of Sivere’s 2011 whistleblowing? Simple: in June 2012 Barclays signed a similar letter agreement in which DOJ declined to prosecute LIBOR misconduct, which obliged Barclays to report ‘all potentially criminal conduct by Barclays or any of its employees that relates to fraud or violations of the laws governing securities and commodities markets.’ Likewise, in May 2015 Barclays signed a plea agreement with DOJ wherein DOJ declined to prosecute foreign exchange misconduct, but with no mention of Hewlett-Packard, which similarly obliged Barclays to report ‘all credible information regarding criminal violations of U.S. law concerning fraud, including securities or commodities fraud by the defendant or any of its employees as to which the defendant’s Board of Directors, management (that is, all supervisors within the bank), or legal and compliance personnel are aware.’

“If Barclays, Sullivan & Cromwell, or DOJ were ever to admit the validity of Sivere’s 2011 whistleblowing, then it would become clear that Barclays had violated the terms of both the 2012 DOJ letter agreement and the 2015 DOJ plea agreement, and nobody could credibly claim that Barclays deserved either the mild treatment or the special credit for ‘timely, voluntary self-disclosure’ afforded to it by the 2018 DOJ letter agreement.

“I am ready to defend my assertions in any appropriate forum.”

Let’s pause here to reflect for a moment. There is now an attorney whistleblower, Shaquala Williams, filing a lawsuit in federal district court in Manhattan in which she asserts that JPMorgan Chase is effectively making a monkey out of the Justice Department by issuing sham reports of its compliance with its non-prosecution agreement. Now we have another attorney, Oliver Budde, willing to put his name to a statement that there’s a conspiracy surrounding Barclays’ non-prosecution agreement with the Justice Department.

Maybe it’s time for an independent Special Counsel to be appointed to investigate these non-prosecution agreements. We learned through Frontline’s investigation about how Obama’s Justice Department was investigating Wall Street’s crimes from the 2008 financial crisis. Frontline reported that there were “no investigations going on. There were no subpoenas, no document reviews, no wiretaps.”

There are a number of additional reasons to take attorney Budde’s theory of the case seriously. First, the Justice Department, under both the Obama administration and the Trump administration, has been handing out non-prosecution agreements to serial lawbreakers on Wall Street like it’s a meter maid handing out parking tickets for failing to put enough quarters in the meter. Clearly, a recidivist lawbreaker does not deserve endless probation agreements.

Alexander Willscher, Partner, Sullivan & Cromwell

Alexander Willscher, Partner, Sullivan & Cromwell

Secondly, one of the attorneys who signed the 2018 non-prosecution agreement on behalf of Barclays was Andrew Willscher, a Sullivan & Cromwell partner who brags on the law firm’s website about persuading the Justice Department in the 2018 deal “not to bring criminal charges against Barclays relating to allegations that bank employees used confidential merger information to front-run trades and enable the bank to profit at a client’s expense.” Willscher also brags about the 2015 non-prosecution agreement where he represented Barclays “in the investigation and resolution with the DOJ and other regulators relating to a criminal conspiracy to manipulate the price of currency exchanged in the global FX Spot Market.” The 2015 case included evidence of a Barclays trader stating in a chat room “…if you ain’t cheating, you ain’t trying.”

Should Willscher, an attorney, be bragging on his law firm’s website about getting a serial repeat offender off the hook for prosecution?

Steven Peikin Went through the SEC's Revolving Door, Returning to Sullivan & Cromwell to Defend Wall Street Firms

Steven Peikin Went Through the SEC’s Revolving Door, Returning to Sullivan & Cromwell to Defend Wall Street Firms

While Willscher was settling the 2018 Foreign Exchange trading/front running matter with the Justice Department, a Sullivan & Cromwell law partner, Jay Clayton, was sitting as the Chairman of the Securities and Exchange Commission (SEC), thanks to his nomination by President Donald Trump. Another Sullivan & Cromwell law partner, Steven Peikin, was serving as Co-Director of the SEC’s Division of Enforcement.

Peikin is the Sullivan & Cromwell partner who had negotiated the Barclays non-prosecution agreement in 2012 for Barclays’ involvement in rigging the interest rate benchmarks, LIBOR and EURIBOR, and the amended agreement of 2014. Peikin’s name appears on both agreements.

As we reported when Clayton was nominated to be SEC Chair, he had represented 8 of the 10 largest Wall Street banks in the prior three years at Sullivan & Cromwell. Clayton was too deeply conflicted to be nominated, and yet, he was confirmed anyway.

Tom Mueller, Author of Crisis of Conscience -- Whistleblowing in an Age of Fraud

Tom Mueller, Author of Crisis of Conscience: Whistleblowing in an Age of Fraud

We asked Tom Mueller, author of the seminal work on corporate whistleblowers, Crisis of Conscience: Whistleblowing in an Age of Fraud, what he thought of the regulatory situation on Wall Street today. Mueller responded:

“The line of goods we’ve all been sold, that lawyers who regulate Wall Street can freely leave their posts to join Wall Street banks or their white-shoe defenders – that cops can morph into robbers without impairing their will to police – is the single most toxic characteristic of Good ol’ Boy financial pseudo-regulation in America. The revolving door acts like a cup of polonium-laced tea on the professional ethics of attorneys in the financial services.”

When Bloomberg News reported in 2016 about the General Counsels of Wall Street mega banks meeting in secret annually for two decades, we noted that attendees at the clandestine 2016 meeting included Stephen Cutler of JPMorgan Chase (a former Director of Enforcement at the Securities and Exchange Commission); Gary Lynch of Bank of America (a former Director of Enforcement at the SEC); and Richard Walker of Deutsche Bank (also a former Director of Enforcement at the SEC).

Another smoking gun from the 2018 non-prosecution agreement between Barclays and the Justice Department is that the investigation into the foreign currency frontrunning at Barclays was not handled by the Commodity Futures Trading Commission (CFTC), which states on his website that it is “the Federal agency with the primary responsibility for overseeing the commodities markets, including foreign currency trading.” Nor was the investigation overseen by the Securities and Exchange Commission, which could have investigated Sivere’s allegation that Hewlett-Packard’s confidential information was improperly shared at Barclays to financially benefit Barclays’ proprietary trading.

Instead, bizarrely, the Inspector General of the Federal Deposit Insurance Corporation (FDIC) conducted the investigation. The last paragraph of the press release announcing an indictment in the matter reads as follows:

“The investigation is being conducted by the FDIC’s Office of Inspector General. Assistant Chief Brian Young and Trial Attorney Justin Weitz of the Criminal Division’s Fraud Section are prosecuting the case. The U.S. Attorney’s Office for the Northern District of California provided substantial assistance in this matter.”

The FDIC Office of Inspector General acknowledges on its website that it has “broad jurisdiction to investigate crimes involving FDIC-regulated and insured banks and FDIC activities.” An indictment in the case was brought against an employee of Barclays Capital Inc., a brokerage firm (broker-dealer) that has nothing to do with the insured deposits overseen by the FDIC.

The story gets even stranger. We emailed the FDIC OIG’s Media Relations contact three times attempting to learn how the FDIC OIG became involved in this trading matter that would properly belong with the CFTC and SEC. We simplified our question in our third attempt to this: “Under what circumstances would the FDIC OIG be authorized to conduct an investigation involving a broker-dealer’s Foreign Exchange Trading, when its public mandate is to investigate matters pertaining to federally-insured banks?”

The media relations person provided no responsive answer, just a link to the FDIC OIG’s main website.

Barclays may now be in hot water with Wall Street’s self-regulator, FINRA. According to Sivere, the separation agreement he signed with Barclays required him to arbitrate any future claims he might have against Barclays before a private arbitration forum known as JAMS. This appears to be another page from the dirty tricks playbook.

Sivere worked for Barclays Capital, a brokerage firm (broker-dealer). As a compliance official, he fell into the category of what Wall Street’s self-regulator, FINRA, defines as an “Associated Person.”

We asked FINRA via email if a broker-dealer is allowed to use a private arbitration forum rather than FINRA’s forum for disputes between an Associated Person and his firm. We let FINRA know that we were specifically speaking about a compliance official at Barclays whose separation agreement called for the exclusive use of JAMS.

Unlike the FDIC OIG, which went into hiding when we posed a question, we promptly received a detailed response from FINRA. It included this rather stark assessment of the substitution of JAMS instead of FINRA Dispute Resolution:

“Thus, FINRA considers actions by member firms that require associated persons to waive their right under the Industry Code to arbitration of disputes at FINRA in a predispute agreement as a violation of FINRA Rule 13200 and as conduct inconsistent with just and equitable principles of trade and a violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade).

“FINRA notes that it has a statutory obligation under the Exchange Act to ‘enforce compliance by its members and persons associated with its members, with the provisions’ of, among other things, the Exchange Act and FINRA’s rules, which include the requirement to arbitrate before FINRA. Furthermore, FINRA may sanction its members or associated persons for violating any of its rules by ‘expulsion, suspension, limitation of activities, functions, and operations, fine, censure, being suspended or barred from being associated with a member, or any other fitting sanction.’ ”

We contacted Barclays seeking a response to FINRA’s interpretation of what Barclays had done by substituting JAMS. We also asked how many other separation agreements Barclays had written that exclusively designated JAMS as the arbitral forum. We received this response: “We will decline to comment on this.”

According to an article in the Los Angeles Business Journal in July of last year, JAMS’ structure works like this: it is owned by 125 of its arbitrators/mediators who are considered independent contractors and can set their own rates, “which range from about $6,000 to $15,000 a day, with an average of about $10,000 to $11,000 a day, according to one industry executive.” The article also reported that JAMS’ retired judges account for about 75 percent of JAMS arbitrators/mediators and they can take home 70 to 75 percent of their fees.

We contacted JAMS via email asking if there was anything inaccurate in the above information that has been published on the website of the Los Angeles Business Journal for more than a year. We received no response.

Carolyn Demarest, JAMS Arbitrator

Carolyn Demarest, JAMS Arbitrator

Last September, Sivere filed an arbitration with JAMS, essentially on the basis of the theory outlined above by his current attorney Budde. Sivere had a single arbitrator for his case, Carolyn Demarest, a former Presiding Justice of the Commercial Division of the Supreme Court of Kings County, New York. Demarest billed at $775 an hour, rivaling the lawyers at Wall Street’s Big Law firms. Sivere provided us the invoice, indicating that he paid in excess of $10,500 while Barclays paid a similar, but smaller, amount. Demarest dismissed the case on a Motion for Dismissal from Barclays.

In a federal court case, both the Judge and the jury are provided at no cost to the plaintiff and are paid for by the U.S. taxpayer. Wall Street has convinced federal courts across America that mandatory arbitration is “fair, fast and cheap.”

The American Association for Justice released a study on October 27, which analyzed the consumer and employee win rate at private arbitration forums JAMS and a similar group, the American Arbitration Association (AAA). The study found the following:

“In years past, consumers were more likely to be struck by lightning than win a monetary award in forced arbitration. In 2020, that win rate dropped even further. Just 577 Americans won a monetary award in forced arbitration in 2020, a win rate of 4.1% — below the five-year-average win rate of 5.3%. For employees forced into arbitration, the likelihood of winning was even lower. Despite roughly 60 million workers being subject to forced arbitration provisions at their place of employment, just 82 employees won a monetary award in forced arbitration in 2020.”

The five-year average win rate for employees going before JAMS and AAA arbitrations was 1.9 percent.





Thursday, December 9, 2021

POLITICO NIGHTLY: How to spot the next Omicron

 



 
POLITICO Nightly logo

BY MYAH WARD

Presented by

UnitedHealth Group

With help from Tyler Weyant

People wait in line to get tested for Covid-19 at a testing facility in Times Square in New York City.

People wait in line to get tested for Covid-19 at a testing facility in Times Square in New York City. | Spencer Platt/Getty Images

CONNECT THE DOTS — It’s been two weeks since South African scientists alerted the world of a new Covid variant on Friday, Nov. 26. Two weeks is also the amount of time the president’s top health adviser, Anthony Fauci, said it would take to get a better idea of what we’re dealing with when it comes to Omicron.

On cue, new info has been trickling out of South Africa this week, suggesting that while the variant is spreading like wildfire in the country, it’s possible the disease it causes is less severe — though it’s still way too early to really tell.

As for how Omicron will affect the U.S., figuring that out in two weeks was a “little optimistic,” Charles Chiu, an infectious diseases researcher at the University of California San Francisco, told Nightly.

We have the genomic sequencing data and capabilities, Chiu said. The problem is the U.S. lacks the infrastructure to quickly turn this information into action.

Unlike South Africa, the U.S. has a fractured virus surveillance system, with some states sequencing Covid cases at high percentages and others just examining a small number of samples. There’s no national standard for genomic virus sequencing, he said, and the result is an incomplete and biased picture of the current state of the virus — one that tends to ignore rural and minority populations.

It took U.S. health officials an extra five days — until Dec. 1  to detect Omicron, meaning we’re about a week behind South Africa, which has one of the world’s most robust national surveillance systems, Chiu pointed out. Once a country has access to a variant, it can take scientists up to two weeks to grow enough of a virus like Omicron for widespread distribution to labs, Chiu said. After that, scientists can conduct studies on the variant’s transmissibility, severity and ability to evade vaccines. Results from these studies in the U.S. will continue to roll out in the coming days and weeks.

There are a few reasons the U.S. was slow to identify a case from the new variant. Factors like population size and Omicron’s origin across the Atlantic Ocean, either in Europe or Africa, put us behind. But so did the U.S. system of public health, Chiu said.

Time is important — many U.S. labs don’t sequence a sample until two weeks after it’s collected, he said. This means the data is almost useless for contact tracing and other public health measures.

And U.S. labs are also not sharing the right data. The genome itself is virtually useless, Chiu said. You also need metadata attached to the sample, which would include valuable information such as the demographics of the person infected, whether they had symptoms, the severity of disease, and vaccination status. “We don’t have this sort of sample-to-answer-to-action pipeline that’s really needed to provide information as soon as possible,” Chiu said.

In the U.K., sequencing labs are processing hundreds to thousands of samples a day, Chiu said, tagging and annotating them with clinical metadata that’s then fed to hospitals and the country’s public health agency, so the information can immediately be applied in both clinical and public health decision making. Nothing like that happens in the U.S.

States like California have set goals to sequence 20 percent of Covid cases. But these samples aren’t linked to any clinical metadata, which Chiu blames on the lack of a national health care system in the U.S., as well as privacy and confidentiality concerns.

“On a national level, in some cases, we were unable to even release the ZIP code of where the sequence came from. Much less identifying information like potentially age or sex, or gender,” he said.

Finding a way to address this information-sharing blockade will be key to preventing future pandemics, he said. The U.S. can’t necessarily overhaul its entire health care system, Chiu said, but he thinks it should be possible to set new standards for how we collect and share public health data.

“We know that it’s only a matter of time before we’re going to see another virus or even a relative of this virus emerge and become the next pandemic,” Chiu said. “The next critical step that needs to be made is that we need to more tightly integrate our national surveillance system.”

Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at mward@politico.com, or on Twitter at @MyahWard.

A message from UnitedHealth Group:

UnitedHealth Group recognizes the environment is a key part of what makes the communities in which we live and work sustainable, viable and healthy. We are doing our part by committing to achieve operational net zero emissions by 2035 and working towards a paperless consumer and provider experience in the next 2 to 3 years. Learn more.

 
AROUND THE NATION

New York Attorney General Letitia James presents the findings of an independent investigation into then-New York Gov. Andrew Cuomo in August in New York City.

New York Attorney General Letitia James presents the findings of an independent investigation into then-New York Gov. Andrew Cuomo in August in New York City. | David Dee Delgado/Getty Images

THE DISH ON TISH — In a year that’s seen plenty of shocks in Albany, New York’s capital got another big stunner today: Tish James announced she would end her gubernatorial campaign and instead run for reelection as attorney general.

To find out more about what drove James’ decision, and how the Democratic field for governor is shaping up now, Nightly’s Tyler Weyant chatted with New York Playbook co-author Anna Gronewold. This conversation has been edited.

In the AG race James is headed to, does she clear the field with this move? And do folks in Albany expect her office will be making big moves as we head in 2022?

Good questions. Another dynamic at play is that a couple of politicians who were clearly interested in becoming AG hadn’t declared their candidacies yet, making us wonder if they were suspecting James wasn’t catching fire.

Running in an open field was one thing, but running against a popular incumbent and the first Black woman to hold the office? “I’m not trying to commit political suicide,” one of the potential, but undeclared, candidates told me.

But at least five Democrats had already declared their campaigns. At least one has already dropped out, at least one has said they are absolutely not dropping out, and the rest haven’t answered our calls yet.

There will be a primary, but Tish has an extreme advantage and should be pretty solid on fundraising for an incumbent AG campaign.

Continuing the work as AG is the reason she’s putting forth to suspend her gubernatorial campaign, and shortly before she made that announcement today, several news outlets reported that she is continuing to pursue her office’s high-profile probes into former president Donald Trump. A source familiar with the matter told us James is seeking a deposition from Trump on Jan. 7 at her New York offices as part of her investigation into potential fraud inside the Trump Organization. Funny the timing on that news!

James’ announcement seemed to take New York politicos by surprise. Did you have any indication at all this was coming?

Tish James seems to be fond of surprising everyone with timing, but I will offer my gratitude that it’s rarely at 5 p.m. on a Friday.

There have been tea leaves, especially in the past few weeks. Candidates aren’t required to report their fundraising until January, but several sources suggested hers wasn’t going to come even close to Gov. Kathy Hochul’s, who has raised more than $10 million for her reelection campaign since announcing in August.

And there was hardly any momentum in the early days when she announced. That seemed to slow even more in the past few weeks, as Bill Mahoney reported just this week . Her public and media fronts have been extremely limited, this from a seasoned politician who is employing seasoned consultants to run her campaign.

But if she dropped out, most people I speak with were predicting some time after the holidays but before the state party convention around February.

With James out, how do you see the governor’s race changing the next few months? Is Hochul the person to beat? Will we see a splashy Bill de Blasio entry soon?

Yes, Hochul was already the frontrunner. Polling from earlier this week showed that she was ahead of James (her closest opponent) with 36 percent of Democrats’ support, compared to 18 percent backing James. Other contenders weren’t in great spots: 10 percent supported New York City Public Advocate Jumaane Williams, and 6 percent each backed Rep. Tom Suozzi and New York City Mayor Bill de Blasio. De Blasio, we should note, remains clearly interested, but has not declared candidacy yet.

But most of James’ support would likely go to Hochul. For instance, Brooklyn party chair Assemblymember Rodneyse Bichotte Hermelyn endorsed Hochul just minutes after James announced she was dropping out. Bichotte Hermelyn was someone who had publicly expressed strong support for James’ campaign as a Black woman and Brooklyn native. And Brooklyn would be a pretty big get for any Dem these days in a primary.

Obviously there’s a lot of time before the primary and polling has more recently … not been the valuable source of information we'd like. But, pending any wacky circumstances or political missteps, Hochul’s in an extremely strong position with her incumbency, and the support and cash she’s already gathered.

The historic nature of her being there also adds an edge — in September, 74 percent of voters — 84 percent of Democrats — said they felt excited to have the first woman governor in office. There would need to be a new political lane opened for someone to try and oust the state’s first woman governor who has had less than a year in office to prove herself.

And what Bill de Blasio decides is between him and God.

 

JOIN TUESDAY FOR A WOMEN RULE 2021 REWIND AND A LOOK AHEAD AT 2022: Congress is sprinting to get through a lengthy and challenging legislative to-do list before the end of the year that has major implications for women’s rights. Join Women Rule editor Elizabeth Ralph and POLITICO journalists Laura Barrón-LópezEleanor MuellerElena Schneider and Elana Schor for a virtual roundtable that will explore the biggest legislative and policy shifts in 2021 affecting women and what lies ahead in 2022. REGISTER HERE.

 
 
WHAT'D I MISS?

— Appeals court denies Trump effort to block White House records from Jan. 6 investigators: A federal appeals court panel has rejected former Trump’s effort to stop congressional Jan. 6 investigators from obtaining his White House records . “On the record before us, former President Trump has provided no basis for this court to override President Biden’s judgment and the agreement and accommodations worked out between the Political Branches over these documents,” wrote Judge Patricia Millett of the U.S. Circuit Court of Appeals for the District of Columbia, joined by Judges Robert Wilkins and Ketanji Brown Jackson. The court delayed the effect of its order for two weeks, allowing Trump’s attorneys time to either ask the full bench of the D.C. Circuit to consider the issue or take it to the Supreme Court.

— Senate passes Schumer-McConnell debt limit pact: The Senate passed a one-time loophole tonight to empower Democrats to raise the debt limit on their own , a major step toward warding off mid-December economic fallout. The chamber cleared the bill in a 59-35 vote, sending it on to President Joe Biden. Once signed into law, the measure would give Senate Democrats a free pass to raise the U.S. borrowing limit in a simple-majority vote, rather than facing the usual 60-vote hurdle to move legislation forward.

— Biden reaffirms Ukrainian sovereignty support in Zelensky call: Biden today reassured Ukrainian President Volodymyr Zelensky of the United States’ support for Ukraine’s sovereignty, as the country steels itself for a potential Russian invasion on its eastern frontier. “President Biden voiced the deep concerns of the United States and our European Allies about Russia’s aggressive actions towards Ukraine and made clear that the U.S. and our Allies would respond with strong economic and other measures in the event of a further military intervention,” according to a White House readout of the call, which lasted more than an hour.

 

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— FDA authorizes Pfizer Covid booster for 16-, 17-year-olds: The Food and Drug Administration authorized a booster dose of the Pfizer-BioNTech Covid-19 vaccine for 16- and 17-year-olds today, giving those teens access to the shots as the Omicron variant spreads worldwide. The decision comes just over a week after the companies first sought the expansion of their emergency use authorization for the vaccine as a booster. Eligible teens will be able to get the shot once they are at least six months past their second dose.

— Biden calls summit ‘inflection point’ for democracies: Biden invoked the late civil rights leader Rep. John Lewis and pledged that he would continue to push for the passage of federal voting rights legislation when he commenced his administration’s first Summit for Democracy today. In his opening remarks at the outset of the two-day virtual event, Biden hailed Lewis — the Georgia Democrat who served in Congress for more than three decades and was the youngest leader of the 1963 March on Washington — as “a great champion of American democracy and for civil rights around the world.”

— Lawyer: Capitol Police whistleblowers face retaliation: Multiple people who worked in the Capitol Police intelligence division on Jan. 6 raised concerns about the department before and after the insurrection and have since faced retaliation , according to an employment lawyer representing the whistleblowers. “I represent a group of U.S. Capitol Police whistleblowers who worked in IICD [Intelligence and Interagency Coordination Division] on January 6, 2021,” Dan Gebhardt of the Solomon Law Firm, PLLC told POLITICO in a statement. “They have made a multitude of internal complaints regarding gross mismanagement and intelligence failures by certain IICD managers that contributed to the events of January 6, 2021. As a result, there have been multiple retaliatory actions against the whistleblowers, including two proposed removals.”

NIGHTLY NUMBER

52 years

The length of time since the number of Americans applying for unemployment benefits was as low as today’s numbers, according to Labor Department data. Unemployment claims dropped by 43,000 to 184,000 last week, the lowest since September 1969.

 

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

 
 
PARTING WORDS

SYSTEM FAILURE  It’s been 20 years since China entered the global trade body, the World Trade Organization, a move that gave it access to the international trade system.

Was it worth it? Some officials and lawmakers have regrets, arguing that China’s gains from WTO entry on Dec. 11, 2001, came at an unfair cost to the U.S. economyPhelim Kine writes.

Most U.S. lawmakers who paved the way for China’s accession to the WTO by agreeing to normalize trade relations with China through approval of Permanent Normal Trade Relations in May 2000 would rather not talk about their vote.

POLITICO canvassed eight senators still in the chamber who voted in favor of the bipartisan move, as well as one former senator who is now a state governor. The only one to respond, Sen. Chuck Grassley (R-Iowa), said in a statement that China’s WTO accession helped reduce poverty in China and benefited U.S. agriculture, but that “clearly the arrangement hasn’t lived up to our hopes of 20 years ago.”

A message from UnitedHealth Group:

The U.S. health care sector is responsible for 8.5% of U.S. emissions. Decarbonizing the health system can help limit the harmful effects of climate change and its impact on marginalized communities.

UnitedHealth Group is partnering with the National Academy of Medicine to meaningfully reduce the carbon footprint of the U.S. health care system.

See how we’re working to minimize our impact on the environment and help create more sustainable, viable and healthy communities.

 


 

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