We are thinking of everyone who was in the path of Hurricane Michael this week, and sending them our fiercest good wishes—and some of us are sending a few bucks, too. If you’d like to make a donation to relief efforts, Charity Navigator has assembled this list of trustworthy organizations.
In Washington, DC this week, the forecast called for strange. We were not invited to lunch at the White House on Thursday, when President Trump met with Kanye West and Jim Brown. Our own lunch meetings never make such compelling television.
Both the House and the Senate have left town for the elections, and will not return until November 13. Before the Senate recessed, Majority Leader Mitch McConnell (R-KY) filed cloture on the nomination of Michelle Bowman to serve on the Federal Reserve Board, so that will be one of the Senate’s first actions when it returns.
Barring unforeseen events, we won’t publish The Golden Apple next week, but will distribute Jim Ellis’s weekly campaign report on Friday, October 19.
Senate Commerce looks at GDPR, CCPA for guidance on data protection — “The next federal privacy law will not be written by industry,” Senate Commerce Committee Chairman John Thune (R-SD) said as he opened Wednesday’s hearing on consumer privacy and data protection. Dr. Andrea Jelinek, Chair of the European Data Protection Board, and Alastair Mactaggart, Board Chair of Californians for Consumer Privacy, described the implementation of the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Committee members agreed on the need for a bipartisan bill that would enforce and clarify consumers’ rights to control their own data.
Treasury endorses data privacy law, fintech charter — In remarks Tuesday at the Online Lending Policy Institute’s Third Annual Summit, Treasury counselor Craig Phillips urged Congress to pass a data breach notification bill, which “would be one major building block” for future action. Phillips also said that the Treasury strongly approves of the Office of the Comptroller of the Currency’s plans to issue a fintech charter to any company that meets the agency’s standards.
Senate Banking hears opposing views on cryptocurrency — Thursday’s Senate Banking Committee hearing on the cryptocurrency and blockchain ecosystem featured testimony from two witnesses with widely divergent views of the technology’s promise. Dr. Nouriel Roubini, a professor of economics at New York University known for his accuracy in predicting the 2008 financial crisis, called cryptocurrency “the mother of all scams,” and blockchain “the most over-hyped technology ever, no better than a spreadsheet or database.” Peter Van Valkenburgh, director of research for The Coin Center, acknowledged the similarities between the cryptocurrency boom-and-bust and historical crashes such as the South Sea Bubble and the dot-com boom, and admitted that most initial coin offerings (ICOs) have been scams. The SEC and CFTC’s willingness to create a regulatory and supervisory structure for these products, however, offers an opportunity for these markets to emerge as valuable alternatives to traditional financial networks, he said, and blockchain will ultimately be as significant an advance as the internet itself.
FinCEN, federal regulators agree that banks and credit unions can collaborate on BSA/AML compliance — Last week the Financial Crimes Enforcement Network (FinCEN), FDIC, OCC, Federal Reserve Board, and National Credit Union Administration issued a joint statement describing how banks and credit unions can share information and work together to manage their Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance activities. These arrangements would be most appropriate for community-based organizations, the regulators said, and might include developing internal controls, independent testing, training, and designation of a BSA compliance professional.
Treasury launches pilot program for CFIUS expansion — The Treasury Department, as head of the Committee on Foreign Investment in the United States (CFIUS), announced temporary regulations to a create a pilot program implementing the Foreign Investment Risk Review Modernization Act (FIRRMA), enacted earlier this year. The pilot program expands the scope of transactions subject to CFIUS review in an effort to protect critical technology related to specific industries. It will begin on November 10.
HSBC will pay $765 million to settle RMBS claims — The US Attorney for the District of Colorado announced Tuesday that HSBC will pay $765 million to settle claims related to its packaging, securitization and sale of residential mortgage-backed securities between 2005 and 2007. The $765 million will be a civil penalty, under the provisions of FIRREA. HSBC did not admit to the government’s charges that HSBC misrepresented its due diligence process for reviewing the mortgages to be securitized, and reviewed samples that were not as large nor as random as claimed. When HSBC got warnings about underlying loan quality, DOJ said, they ignored them.
Next Week in Washington:
The House of Representatives and the Senate are both in recess until November 13. The Senate Banking Committee has postponed the hearing on Fannie Mae and Freddie Mac’s pilot programs it had originally scheduled for next Thursday.
The Ellis Insight. Jim Ellis reports on political news:
Florida: A new Florida Southern College poll (10/1-5; 499 FL registered voters; 476 likely to vote in the 2018 election) finds Gov. Rick Scott (R) rebounding to again take a small 46-44% lead over Sen. Bill Nelson (D), reversing a previous trend. Florida Southern Governor’s race result seems to verify this poll’s reliability factor. According to the ballot test, Tallahassee Mayor Andrew Gillum (D) is leading resigned Rep. Ron DeSantis (R-Palm Coast/Daytona Beach) 47-44%, the exact margin that most other polls are finding within the statewide vote.
West Virginia: It was always believed the West Virginia Senate race would become a toss-up despite Sen. Joe Manchin (D) pulling out to an early double-digit lead over Attorney General Patrick Morrisey (R). Last week, Mr. Morrisey released a survey showing the two tied, but that was quickly countered with Democratic data posting a comfortable lead for the Senator. Now, the Tarrance Group, polling for the Senate Leadership Fund (9/23-25; 612 “likely registered voters”), finds Sen. Manchin leading 47-43%, which is obviously within the polling margin of error.
AK-AL: Rep. Don Young (R-Ft. Yukon), the Dean of the US House, was first elected in a 1973 special election and has won 21 additional statewide elections. In recent campaigns, however, his margins have grown smaller. Now, pollster Ivan Moore of the Alaska Survey Research firm released a new study conducted the first week of this month (500 AK likely voters) that projects Rep. Young leading his Democratic challenger Alyse Galvin, an education reform activist, by just a 50-46% clip.
FL-15 & 16: Democrats believe they have upset chances in the adjoining Florida 15th and 16th Congressional Districts, which are normally safe Republican seats. Two new polls find the Republican nominees in both hovering in comfortable position, however.
In the open 15th CD (Rep. Dennis Ross (R-Lakeland) retiring), Republican state Rep. Ross Spano has developed a 46-39% advantage over Democratic nominee Kristen Carlson, this according to a WPA Intelligence poll (10/3-4; 418 FL-15 likely voters). In the Sarasota anchored 16th CD, Rep. Vern Buchanan (R) has a ten-point, 52-42%, margin over attorney David Shapiro (D). The Public Opinion Strategies firm (10/4-7; 400 FL-16 likely voters) conducted their survey for the Buchanan campaign.
NE-2: When Kara Eastman upset former Rep. Brad Ashford (D-Omaha) in the May Democratic primary, strategists on both sides downgraded the challenger’s chances of unseating freshman Rep. Don Bacon (R-Papillion) because she is too far left of the local electorate. A new Greenberg Quinlan Rosner Research poll for the Eastman campaign (9/27-30; 400 NE-2 likely voters) shows the race closing within the margin of error, however. The GQR results find Rep. Bacon leading Ms. Eastman 49-45%. It wouldn’t be surprising to see this race ends in a close vote because the 2nd District is politically marginal and has been bouncing back and forth between the parties for several election cycles, but in generally favors Republicans. Rep. Bacon still must be considered the favorite to hold the seat.
NJ-11: It appears that strategists in both parties have reached the conclusion that attorney and Naval Academy graduate Mikie Sherrill (D) is going to convert the northern New Jersey congressional seat from which veteran Rep. Rodney Frelinghuysen (R-Morristown) is retiring. But, we again see another released poll that shows the race closing to within the margin of error.
According to the new Monmouth University survey (10/3-7; 356 NJ-11 likely voters), Ms. Sherrill is leading Assemblyman Jay Webber (R) by a 48-44% spread under a standard midterm turnout model. Accounting for what many believe will be a Democratic “surge” turnout model, screening for such on this poll yields Sherrill a 50-43% margin. Under a “low turnout” model, which few believe will materialize, Sherrill’s advantage drops to 48-45%. With a month to go, this campaign, quiet for weeks, may begin to attract some outside involvement.
NY-27: In early September, Rep. Chris Collins (R-Clarence) was indicted for insider trading and immediately said he would end his congressional campaign. When it became evident that the Republican Party could not legally remove him from the ballot, Rep. Collins pledged to campaign to win. According to a new Tulchin Research poll, the Congressman still has work to do. The survey (10/6-8; 400 NY-27 likely voters) finds Rep. Collins and Democrat Nate McMurray tied at 42% apiece, with Reform Party candidate Larry Piegza drawing 6 percent. The 27th is a safe Republican seat, which the party can ill-afford to lose.
NC-9: The Siena College/New York Times House polling project continues, and a surprising result is coming from North Carolina. Most observers believe this open seat will flip to the Democrats in the person of businessman Dan McCready, but this survey suggests otherwise. In the poll (10/1-5; 502 NC-9 likely voters), Siena/NYT sees former Baptist pastor Mark Harris (R) holding a 47-42% advantage. Countering this poll, the conservative Civitas Institute released their Survey USA study (10/2-4; 556 NC-9 likely voters) that projects Mr. McCready to be holding a 45-41% edge. In any regard, this race is still very much alive and clearly not decided.
TX-23: At the beginning of this campaign cycle, one of the contests thought sure to be in toss-up mode all the way to the end was the challenge to sophomore Rep. Will Hurd (R-San Antonio). The 23rd District, that stretches from San Antonio all the way to El Paso, is commonly viewed as Texas’ lone swing district.
But another poll finds Rep. Hurd pulling away from his opponent, former assistant to the US Trade Representative, Gina Ortiz Jones (D). The new GS Strategy Group poll for the Congressional Leadership Fund (10/2-4; 400 TX-23 likely voters) finds Rep. Hurd holding a commanding 55-30% lead over Ms. Jones. Though this poll is better for Mr. Hurd than others that have been recently released, all show him with leads extending well beyond the margin of error.
VA-10: Earlier in the week, the Washington Post released its Schnar poll of Virginia’s 10th Congressional District, which found Democratic challenger Jennifer Wexton (D), a Loudoun County state Senator, leading Rep. Barbara Comstock (R-McLean) by a substantial twelve-point margin, 55-43%. But, this poll was conducted with major methodological flaws. First, the sampling period took 16 days to complete (9/19-10/5), and the 866 respondents were sent written invitations to participate in their online survey. Therefore, the reliability factor is suspect.
Countering the publicity, Rep. Comstock, who clearly faces political headwinds, just released her campaign’s internal McLaughlin & Associates survey. According to this poll (10/6-8; 400 VA-10 likely voters), the Congresswoman is clinging to a 48-47% edge with her pollster indicating that she is in better re-election position today than she was at the commensurate time in 2016. In that election, the Ms. Comstock won a 53-47% victory despite President Trump losing the district by ten points.
WA-8: Seattle-based Elway Research just released their new poll of the open congressional campaign between former state Senator and statewide nominee Dino Rossi (R) and pediatrician Kim Shrier (D). The two are running to replace retiring Rep. Dave Reichert (R-Auburn) in the Seattle suburban district. The results are a bit surprising when considering previous polling that found the candidates tied.
According to Elway (10/5-9; 400 WA-8 registered voters), Mr. Rossi has now built a 49-39% advantage. The Elway researchers claim the lunge toward the Republican is a result of the Kavanaugh confirmation process. Additionally, a NRCC ad showing that Dr. Shrier, while calling for Medicare expansion to cover more individuals, doesn’t accept Medicaid patients in her own practice, which has cast her as a hypocrite. More data is needed to determine if this poll is an outlier or has staying power.
Alaska: Polling continues to suggest that the nation’s lone Independent Governor, Alaska’s Bill Walker, likely will not win a second term. A new Alaska Survey Research firm poll (10/1-6; 500 AK registered voters) projects Republican former state Senator Mike Dunleavy to be holding a commanding 47-27-23% lead over Gov. Walker and former US Senator Mark Begich, the Democratic nominee. It was believed at the time he entered the race that ex-Sen. Begich’s presence in the contest would likely tip the balance toward the eventual Republican nominee. Such appears to be happening.
Georgia: The new Georgia Survey USA poll (10/3-8; 655 GA likely voters) confirms other data that suggests the contest between Republican Secretary of State Brian Kemp and Democratic former state House Minority Leader Stacey Abrams is a dead heat. The S-USA numbers find Mr. Kemp clinging to a two-point edge, 47-45%. Most of the research studies find the GOP nominee just slightly ahead, but none project him beyond the polling margin of error.
Illinois: Gubernatorial challenger J.B. Pritzker (D) has been leading Gov. Bruce Rauner (R) by large margins and the latest poll, now within a month of the election, is no exception. From Victory Research (9/27-10/2; 1,208 IL likely voters), Mr. Pritzker has opened a 47-32% lead over Gov. Rauner, which is consistent with other polling. Clearly, Illinois is the Democrats’ most favorable gubernatorial conversion opportunity in the nation. Republican strategists fear that an unfavorable turnout model could result in a Democratic sweep in the Land of Lincoln and possibly cost the GOP several US House seats.
Kansas: Remington Research tested the three-way Kansas gubernatorial campaign in early October. The new survey (9/30-10/1; 1,680 KS likely voters) finds state Sen. Laura Kelly (D-Topeka) to be suspended in a virtual tie with Secretary of State Kris Kobach (R), 42-41%, with Independent candidate Greg Orman taking 10%.
Rhode Island: First term Gov. Gina Raimondo (D) looked to be in a vulnerable position as she began seeking a second term, but a new University of New Hampshire poll (9/27-10/6; 561 RI registered voters; 503 likely voters) finds the Governor leading Cranston Mayor Allan Fung (R) by a substantial 48-34% margin. On the other hand, the UNH polls have routinely been among the most inaccurate within the public polling sector. Therefore, this race could still be relatively close. It is evident that Ms. Raimondo is leading the campaign, whatever the margin, and must be considered at least a slight favorite for re-election.
South Carolina: A new Trafalgar Group survey (9/24-10/2; 2,962 registered voters) finds Gov. Henry McMaster (R) leading state Rep. James Smith (D-Columbia) by a 51-37% count, which is about what one would expect for a South Carolina statewide race a month before the election. Mr. McMaster, who ascended to the Governorship when then-Gov. Nikki Haley (R) resigned to accept President Trump’s appointment as US Ambassador to the United Nations, is running for his first full term. He was forced into a run-off for the Republican nomination but won a comfortable 54-46% victory over businessman John Warren in the secondary election.