truthout--2020-06-02--This Treasury Official Is Running the Bailout. It’s Been Great for His Family.

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin have become the public faces of the $ 3 trillion federal coronavirus bailout .
Behind the scenes , however , the Treasury ’ s responsibilities have fallen largely to the 42-year-old deputy secretary , Justin Muzinich .
A major beneficiary of that bailout so far : Muzinich & Co. , the asset manager founded by his father where Justin served as president before joining the administration .
He reported owning a stake worth at least $ 60 million when he entered government in 2017 .
Today , Muzinich retains financial @ @ @ @ @ @ @ transaction in which he transferred his shares in the privately held company to his father .
Ethics experts say the arrangement is troubling because his father received the shares for no money up front , and it appears possible that Muzinich can simply get his stake back after leaving government .
When lockdowns decimated the economy in March , the Treasury and the Fed launched an unprecedented effort to buy up corporate debt to avert a freeze in lending at the exact moment businesses needed to borrow to keep running .
That effort @ @ @ @ @ @ @ with credit continuing to flow to companies over the last several weeks .
This policy also allowed those who were heavily invested in corporate loans to recoup huge losses .
Muzinich & Co. has long specialized in precisely this market , managing approximately $ 38 billion of clients ’ money , including in riskier instruments known as junk , or high-yield , bonds .
Since the Fed and the Treasury ’ s actions in late March , the bond market has roared back .
Muzinich & Co. has reversed billions in losses , @ @ @ @ @ @ @ , with 28 of the 29 funds tracked by the investor research service Morningstar Direct rising in that period .
The firm doesn ’ t publicly detail all of its holdings , so a precise figure can ’ t be calculated .
The Treasury is understaffed , and Muzinich was overseeing two-thirds of the department before the crisis hit .
He spent his first year as the Trump administration ’ s point man on its only major legislative achievement , the landmark $ 1.9 trillion tax cut that mainly benefited the wealthy and @ @ @ @ @ @ @ the economic impact of the coronavirus , Muzinich ’ s responsibilities expanded .
The Treasury worked with the Fed on the emergency lending programs , and the agency has ultimate power to sign off .
Muzinich was personally involved in crafting the programs , including the effort to bail out the junk bond market , The Wall Street Journal reported in April .
He communicates with Fed officials daily by phone , email or text , the paper said .
That effort has many skeptics .
The Fed has never bought corporate debt @ @ @ @ @ @ @ existence , much less that of the indebted and fragile companies that raise money through the sale of junk bonds .
Private equity firms , hedge funds and specialty investment firms like Muzinich & Co. dominate the market for junk-rated debt .
In effect , the Fed has swooped in to protect the most sophisticated investors from losses on some of their riskiest bets .
Muzinich & Co. Profited From the Government ’ s Actions Muzinich & Co. ’ s largest fund , with over $ 10 billion in assets , jumped in @ @ @ @ @ @ @ Reserve announced plans to buy bonds .
Justin Muzinich ’ s ongoing ties to the family firm present a thicket of potential conflicts of interest , ethics lawyers said .
Instead of immediately divesting his stake in the firm when he joined the Trump administration in early 2017 , Muzinich retained it until the end of that year .
But even then , he did not sell his stake and use the proceeds to buy broad-based securities such as index funds , as is common practice .
Instead , he transferred his piece @ @ @ @ @ @ @ who owns Muzinich & Co .
In exchange , he received what amounts to an IOU — a written agreement in which his father agreed to pay him for the shares , with interest , but with no principal due for nine years .
“ This is something akin to a fake divestiture , ” said Kathleen Clark , a law professor and ethics specialist at Washington University in St. Louis .
“ It sure looks like he is simply parking this asset with a relative , and he will likely get it @ @ @ @ @ @ @ A Treasury spokeswoman declined to say whether Muzinich has pledged not to take back the stake in the family firm once his public service ends .
Muzinich “ takes his ethics obligations very seriously ” and “ any suggestion to the contrary is completely baseless , ” she said .
She added the arrangement with his family firm was approved by the Office of Government Ethics and agency ethics lawyers , who recently reexamined the setup given Muzinich ’ s role in the economic crisis response .
They concluded that there is no @ @ @ @ @ @ @ make decisions as a government official that would affect his father ’ s ability to repay the money he owes under the IOU .
“ Treasury ’ s career Designated Agency Ethics Official has determined that there is no such conflict of interest , as there are no current or reasonably anticipated matters in which Deputy Secretary Muzinich would participate that would affect the note obligor ’ s ability or willingness to satisfy its financial obligations under the note , ” she said in a statement .
( The note obligor is Muzinich @ @ @ @ @ @ @ Co. did not respond to multiple requests for comment .
Muzinich ’ s relationship with the family firm also creates potential conflicts related to Muzinich & Co. ’ s clients .
The firm makes money by charging investment management fees to several dozen wealthy individuals , insurance companies , pension funds , as well as what filings describe as a “ quasi foreign government corporation.
” The client list is not public and it ’ s unclear whether Muzinich would know about clients that came on board since he left .
But any @ @ @ @ @ @ @ or lose , from decisions being made by the Treasury about the bailout policies .
“ The clients of this firm , I imagine , must be thrilled that Muzinich has this vitally important , powerful position with a huge amount of discretion and authority , ” Clark said .
The Treasury spokeswoman declined to answer a question about the firm ’ s clients .
Even as Justin Muzinich has presided over bailout policies criticized by some observers , Muzinich & Co. executives have praised the government ’ s actions in recent briefings @ @ @ @ @ @ @ “ as providing somewhat of a floor underneath the high yield market.
” Another Muzinich executive , David Bowen , who manages one of the firm ’ s high-yield bond portfolios , said during a May 20 webinar , “ The Fed has been about as supportive , helpful , accommodative — whatever word you want to use — as anyone could imagine.
” When Treasury Secretary Steven Mnuchin hired Justin Muzinich as counselor in early 2017 , in many ways he was selecting a younger version of himself .
Like Mnuchin , @ @ @ @ @ @ @ , the son of a wealthy finance executive .
Also like his boss , Muzinich spent years collecting a series of elite credentials : He attended Groton and holds degrees from Harvard College , the London School of Economics , Yale Law School and Harvard Business School .
He worked at Morgan Stanley and spent a few months at a hedge fund associated with billionaire Steven A. Cohen , followed by a few years at EMS Capital , which invests the money of the wealthy Safra family .
Colleagues praise Muzinich as hardworking @ @ @ @ @ @ @ relief that he isn ’ t as inflammatory as many other Trump appointees .
Powell , the Fed chair , called Muzinich “ creative and extremely capable ” in a statement to The Wall Street Journal in April .
In 2010 , he joined the family firm and became its president .
His father , George , founded the company in 1988 , specializing in handling portfolios of American high-yield bonds for European pension funds .
The company expanded to offer funds to other institutional investors and wealthy individuals , but it stuck @ @ @ @ @ @ @ particularly the riskier type that pays higher interest rates .
Headquartered in New York and London , the firm has eight offices across Europe and one in Singapore .
“ Talking about credit all the time might sound boring , I ’ m sure it does , ” Justin Muzinich said in a 2014 interview , “ but that is what makes you good.
” As he rose in the family business , Muzinich also launched himself into GOP policy circles , advising the presidential campaigns of Mitt Romney in 2012 and Jeb @ @ @ @ @ @ @ $ 20 million ultramodern beachfront house in the Hamptons and a $ 4.5 million Park Avenue apartment and commutes from New York City to work in Washington .
When Muzinich entered the Trump administration , he reported owning stock and stock options in the family firm collectively worth at least $ 60 million .
The true value could be much higher , but disclosure rules don ’ t require officials to give a specific figure for any asset worth more than $ 50 million .
The Treasury ’ s ethics officers are frequently @ @ @ @ @ @ @ , given that the department tends to attract people from careers on Wall Street who have large , complicated financial holdings — from ex-Goldman Sachs Chairman Hank Paulson to banker and Hollywood financier Mnuchin .
Stakes in individual companies can create conflicts of interest .
So incoming Treasury officials typically sell those stocks and invest in broad-based options like mutual funds .
Ownership in private investment funds can be particularly thorny because ethics rules treat each of the fund ’ s investments in specific companies as sources of potential conflicts .
Sarah Bloom @ @ @ @ @ @ @ secretary in the Obama administration , reported holding only a collection of index and mutual funds that either track the whole stock market or a large basket of companies .
But government ethics officials did not require Muzinich to sell his stake in the family firm through his first year in office as counselor to Mnuchin .
According to ethics filings , Muzinich said that he did not divest it until December 2017 , the month the tax law was signed .
( Several months later , in April 2018 , Trump nominated @ @ @ @ @ @ @ Muzinich did not receive cash for most of his stake in the family firm .
Instead , his more recent financial disclosures show that the stake , held in a family trust , was replaced with an opaque asset described as a “ receivable from family , ” valued at over $ 50 million .
Muzinich ’ s disclosure filings don ’ t reveal much about this asset at all .
They don ’ t say who the family member is or explain the arrangement .
They don ’ t say how the @ @ @ @ @ @ @ the valuation of the deal was vetted by an independent third party .
It turns out that Muzinich transferred his stake to his father .
But his father didn ’ t have to pay him right away .
According to a Senate Finance Committee memo obtained by ProPublica , Justin received two promissory notes from his father in return for the shares .
The notes pay Justin between $ 1 million and $ 5 million in interest over a year , at a rate of 2.11 % .
Moreover , his father does @ @ @ @ @ @ @ the loan for nine years .
Neither the financial disclosure forms nor the Senate memo say how long the agreement is supposed to last .
Neither addresses the possibility of his getting the shares back after he leaves the government .
The Treasury says the transaction is “ not reversible ” but did not elaborate .
In other words , Justin still has an ongoing long-term stake in the financial well-being of Muzinich & Co. , since his father now owes him more than $ 50 million .
If the company were to @ @ @ @ @ @ @ , it could cost Justin .
Actions the Treasury and the Fed take can either enhance the chances he gets his money back or lower them .
The Treasury defended the IOU transaction as an appropriate remedy for any conflicts of interest .
The agency provided a statement from Elizabeth Horton , an ethics attorney who left the agency in 2019 and who worked with Muzinich on the divestiture from his family business .
Horton said that when Muzinich first joined the agency , “ the Treasury ethics office correctly advised him that @ @ @ @ @ @ @ holdings in his family business because of the generalized nature of his work on tax reform legislation.
” She said that when his duties changed , “ I advised Mr. Muzinich that an exchange for a fixed value note was an appropriate way to divest.
” Horton said that advice was “ consistent with practice in previous administrations ” — though the Treasury declined to cite similar cases .
“ Muzinich worked very closely with the ethics office and was extremely attentive to his ethics obligations , ” Horton said .
ProPublica reached @ @ @ @ @ @ @ two former Treasury ethics lawyers .
None could recall a similar divestment transaction .
Three of the four disagreed that it resolved Muzinich ’ s conflicts , while one said that turning it into an asset with a value that doesn ’ t fluctuate with future developments should shield him from any allegations of impropriety .
The deal does not look like an arms-length transaction , said Virginia Canter , who served as a career ethics attorney at Treasury during the George W. Bush administration and is now at the watchdog group Citizens @ @ @ @ @ @ @ “ The terms of the loan suggest something less than a bona fide transaction , ” she said .
“ Once he leaves office , nothing in the arrangement appears to preclude Muzinich from forgiving the debt owed to him by his father so they can amicably agree on returning to Muzinich the interest in the Muzinich family business.
” As ranking member of the Finance Committee , Sen. Ron Wyden opposed Muzinich ’ s nomination as deputy secretary because of his role in crafting the tax bill .
Although he would have @ @ @ @ @ @ @ & Co. stock , Wyden said in a statement that in July 2018 Muzinich had agreed to “ strengthen his recusal commitments to include matters where his family ’ s company is a party.
” That satisfied Wyden at the time , but it is a very narrow restriction .
A vast range of issues before the Treasury could affect Muzinich & Co. regardless of whether the firm was directly a party to any of them .
How Justin Muzinich treated the transaction for tax purposes could reveal whether it was a true @ @ @ @ @ @ @ , a sale of an asset such as equity in a company would trigger a capital gains tax bill .
In Muzinich ’ s case , that could run into the tens of millions of dollars , even though his father paid him no cash upfront .
But there is an exception if the asset in question is merely transferred with a commitment to have it returned , said Steve Rosenthal , a tax law expert at the Urban-Brookings Tax Policy Center .
“ If you are merely parking or pledging securities , @ @ @ @ @ @ @ back , that ’ s not viewed as a taxable transaction , ” he said .
It is not clear how he reported the transaction to the IRS , and whether he was left with a huge tax bill .
The Treasury declined to comment on the tax issues .
Through his first year in the administration , even as Muzinich continued to own his stake in the family firm , he met with a wide range of business executives to hash out major tax provisions that would affect them , according to @ @ @ @ @ @ @ suing the Treasury last year under the Freedom of Information Act .
Others were obtained by the watchdog group American Oversight .
The Treasury redacted large sections of the calendars , saying that they required consultation with the White House before they could be released .
One of the most important principles in the federal government ethics rules covers whether an official is dealing with a “ particular matter ” that would affect a discrete group of people with specific interests or a “ general matter ” that affects a larger and more @ @ @ @ @ @ @ the tax reform bill was to affect a very large and diverse group , so ethics rules did not prevent Muzinich from working on it .
He was allowed to keep his equity in the company while working on the tax bill because his “ duties did not include particular matters that required divestiture of certain assets.
” But many industries had specific interests in the tax bill that they lobbied on — industries that may include clients of Muzinich & Co. Insurance companies , for example , featured prominently .
Muzinich met @ @ @ @ @ @ @ as Liberty Mutual , The Hartford , Zurich and Blue Cross Blue Shield .
In the final tax bill , property and casualty insurers fared particularly well by dodging new limitations on deductions that applied to other companies .
Insurance companies invest their premiums in order to increase their profits .
In its regulatory filings , Muzinich & Co. reports that 17 of its 89 clients are insurance companies , which have given the firm more than $ 1.4 billion to invest .
Muzinich & Co. did not provide a list of its @ @ @ @ @ @ @ & Co. has stakes in also have been lobbying the Treasury on their own behalf .
For example , Muzinich & Co. helps its clients invest in business development companies , a type of investment fund that enjoys lower taxes in exchange for providing capital to medium-sized companies .
The firm itself owns stock in BDCs , many of them run by private equity companies such as Ares Capital Corporation , which has paid millions of dollars to lobby for looser rules governing the BDC industry .
Even beyond any overlap with the @ @ @ @ @ @ @ ’ s calendars , which cover the period from February to September of 2017 , reflect the administration ’ s priorities in negotiating the tax deal .
Muzinich spent long days in meetings with private equity titans , energy company CEOs and heavy-hitting interest groups like the Business Roundtable and the anti-tax group Americans for Prosperity .
His calendar shows no meetings with labor unions or progressive groups .
Muzinich did meet often with the Treasury ’ s in-house tax experts but frequently didn ’ t follow their recommendations .
Richard Prisinzano , @ @ @ @ @ @ @ tax analysis office until August 2017 , recalled trying to tell Mnuchin and Muzinich that drastically lowering corporate tax rates would likely prompt businesses to transform into C corporations , which often pay lower rates under the new law .
He argued that such a change would further reduce tax revenues .
Muzinich disagreed , Prisinzano said , protesting that businesses wouldn ’ t change their corporate form just to lower their taxes .
“ He really pushed back , ” Prisinzano recalled .
“ He said to me , ‘ The secretary @ @ @ @ @ @ @ numbers don ’ t make sense to him.
’ ” “ ‘ I ’ m a numbers person , and they make perfect sense to me , ’ ” Prisinzano said he responded .
“ That was not an answer that they liked.
” In the following two years , many large businesses did indeed convert into C corporations , including private equity giants Ares , Blackstone and KKR .
The government hasn ’ t produced an estimate of how big a hit taxpayers took from these conversions .
During his confirmation hearing @ @ @ @ @ @ @ Democratic senators pressed Muzinich on whether he agreed with the White House that the tax bill would “ pay for itself , ” despite the dire projections of independent forecasters such as the nonpartisan Congressional Budget Office .
“ Yes , ” Muzinich responded .
It has not come close , as corporate tax collections plunged and left the national debt at historic levels on the eve of the pandemic .
As the economic response to the novel coronavirus consumed Washington in March , Mnuchin turned again to Muzinich to negotiate with Congress @ @ @ @ @ @ @ to sustain companies as they weathered the worst part of the crisis .
Ultimately , Trump administration officials and lawmakers settled on a package worth more than $ 2 trillion , divided into aid regimens for different sectors of the economy .
While setting general parameters , the Coronavirus Aid , Relief and Economic Security Act gives the Treasury wide latitude over how the money is to be distributed .
It calls for $ 50 billion in grants and loans for the airline industry , for example , with few rules on who @ @ @ @ @ @ @ potential intersection with Muzinich ’ s Treasury work , Muzinich & Co. started a new business line to loan money to airlines to buy planes in February . )
Perhaps the greatest power the Treasury now has is the authority to sign off on Fed loan programs funded with CARES Act money .
The Fed has said it will leverage that money to lend up to several trillion dollars .
Among their biggest decisions : Which firms to include in the $ 600 billion Main Street Lending Program , which will lend directly @ @ @ @ @ @ @ structure two programs that will purchase up to $ 750 billion in corporate bonds .
The Main Street program , which has yet to launch , changed substantially after it was first announced to sweep in bigger companies and those with heavier debt loads .
Offering a glimpse into how the Treasury directly shaped the Fed programs , Energy Secretary Dan Brouillette told Bloomberg the change was made in part to make sure beleaguered oil companies had access to the program ’ s favorable terms .
Muzinich & Co. ’ s U.S.-based funds @ @ @ @ @ @ @ also deputized Muzinich to fix problems that arose during the first round of funding for the Paycheck Protection Program , which offers forgivable loans to small businesses .
The government hasn ’ t said who got money through the program , but Muzinich & Co. ’ s portfolio includes many companies that are small enough to be eligible .
The Fed ’ s bond purchasing programs will go even further to help companies with poorly rated credit .
On March 23 , the Fed and the Treasury announced a sweeping stimulus program that @ @ @ @ @ @ @ dollars of investment-grade bonds .
Selling bonds is a way for large companies like Boeing or PepsiCo to raise money for new investments , to fund day-to-day operations or to pay back older loans .
Companies that are strong and profitable are expected to be able to pay back the borrowed money .
Their bonds are deemed “ investment grade ” and come with lower interest rates .
The news of the Fed program on its own heralded a dramatic recovery in the bond market , which in three weeks recovered nearly all @ @ @ @ @ @ @ since the plunge began on March 6 , according to one index .
Then , on April 9 , the Fed announced , with the Treasury ’ s approval , that it would expand its efforts to buy some junk bonds .
These carry higher interest rates because the borrowing companies are viewed as riskier and may already be heavily in debt .
One index tracking that market segment surged nearly 8 % on the news , the most in a decade .
This risker category of bonds has expanded dramatically in recent @ @ @ @ @ @ @ burdens to do things like acquire competitors and buy back stock .
These are the bonds in which Muzinich & Co. has long specialized .
At the end of 2019 , Muzinich & Co. reported it had $ 2.8 billion of assets under management in its U.S. high-yield bond strategy .
A Muzinich fund that focuses specifically on those bonds took significant losses in March , as companies like oilfield services provider Targa Resources and Caesars Entertainment saw the price of their bonds fall 30 % and 35 % respectively .
The government @ @ @ @ @ @ @ ’ s high-yield holdings along with everyone else ’ s .
The portfolio manager for the firm ’ s U.S. high-yield offering also praised CARES Act ’ s tax provisions that would “ help high yield companies.
” In a separate development in May , the Fed expanded another Treasury-backed lending program in a way that could help Muzinich & Co. ’ s portfolio .
The central bank said May 12 it would support “ syndicated loans , ” another form of corporate debt often in which riskier firms borrow money from multiple @ @ @ @ @ @ @ than $ 3 billion in assets under management in U.S. and European syndicated loans at the end of last year .
The good news for Muzinich & Co. keeps coming .
As the firm ’ s head of investment strategy , Erick Muller , told investors in a May 13 webcast about the junk bond market : “ The recovery is pretty spectacular .
”

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin have become the public faces of the $3 trillion federal coronavirus bailout. Behind the scenes, however, the Treasury’s responsibilities have fallen largely to the 42-year-old deputy secretary, Justin Muzinich.
A major beneficiary of that bailout so far: Muzinich & Co., the asset manager founded by his father where Justin served as president before joining the administration. He reported owning a stake worth at least $60 million when he entered government in 2017.
Today, Muzinich retains financial ties to the firm through an opaque transaction in which he transferred his shares in the privately held company to his father. Ethics experts say the arrangement is troubling because his father received the shares for no money up front, and it appears possible that Muzinich can simply get his stake back after leaving government.
When lockdowns decimated the economy in March, the Treasury and the Fed launched an unprecedented effort to buy up corporate debt to avert a freeze in lending at the exact moment businesses needed to borrow to keep running. That effort has succeeded, at least temporarily, with credit continuing to flow to companies over the last several weeks. This policy also allowed those who were heavily invested in corporate loans to recoup huge losses.
Muzinich & Co. has long specialized in precisely this market, managing approximately $38 billion of clients’ money, including in riskier instruments known as junk, or high-yield, bonds. Since the Fed and the Treasury’s actions in late March, the bond market has roared back. Muzinich & Co. has reversed billions in losses, according to a review of its holdings, with 28 of the 29 funds tracked by the investor research service Morningstar Direct rising in that period. The firm doesn’t publicly detail all of its holdings, so a precise figure can’t be calculated.
The Treasury is understaffed, and Muzinich was overseeing two-thirds of the department before the crisis hit. He spent his first year as the Trump administration’s point man on its only major legislative achievement, the landmark $1.9 trillion tax cut that mainly benefited the wealthy and corporations.
As the markets panicked about the economic impact of the coronavirus, Muzinich’s responsibilities expanded. The Treasury worked with the Fed on the emergency lending programs, and the agency has ultimate power to sign off. Muzinich was personally involved in crafting the programs, including the effort to bail out the junk bond market, The Wall Street Journal reported in April. He communicates with Fed officials daily by phone, email or text, the paper said.
That effort has many skeptics. The Fed has never bought corporate debt in its more than 100 years of existence, much less that of the indebted and fragile companies that raise money through the sale of junk bonds. Private equity firms, hedge funds and specialty investment firms like Muzinich & Co. dominate the market for junk-rated debt. In effect, the Fed has swooped in to protect the most sophisticated investors from losses on some of their riskiest bets.
Muzinich & Co. Profited From the Government’s Actions
Muzinich & Co.’s largest fund, with over $10 billion in assets, jumped in value when the Treasury and the Federal Reserve announced plans to buy bonds.
Justin Muzinich’s ongoing ties to the family firm present a thicket of potential conflicts of interest, ethics lawyers said. Instead of immediately divesting his stake in the firm when he joined the Trump administration in early 2017, Muzinich retained it until the end of that year. But even then, he did not sell his stake and use the proceeds to buy broad-based securities such as index funds, as is common practice. Instead, he transferred his piece of the company to his father, who owns Muzinich & Co. In exchange, he received what amounts to an IOU — a written agreement in which his father agreed to pay him for the shares, with interest, but with no principal due for nine years.
“This is something akin to a fake divestiture,” said Kathleen Clark, a law professor and ethics specialist at Washington University in St. Louis. “It sure looks like he is simply parking this asset with a relative, and he will likely get it back after he leaves the government.”
A Treasury spokeswoman declined to say whether Muzinich has pledged not to take back the stake in the family firm once his public service ends. Muzinich “takes his ethics obligations very seriously” and “any suggestion to the contrary is completely baseless,” she said.
She added the arrangement with his family firm was approved by the Office of Government Ethics and agency ethics lawyers, who recently reexamined the setup given Muzinich’s role in the economic crisis response. They concluded that there is no currently envisaged scenario in which Muzinich would make decisions as a government official that would affect his father’s ability to repay the money he owes under the IOU.
“Treasury’s career Designated Agency Ethics Official has determined that there is no such conflict of interest, as there are no current or reasonably anticipated matters in which Deputy Secretary Muzinich would participate that would affect the note obligor’s ability or willingness to satisfy its financial obligations under the note,” she said in a statement. (The note obligor is Muzinich’s father.)
Muzinich & Co. did not respond to multiple requests for comment.
Muzinich’s relationship with the family firm also creates potential conflicts related to Muzinich & Co.’s clients. The firm makes money by charging investment management fees to several dozen wealthy individuals, insurance companies, pension funds, as well as what filings describe as a “quasi foreign government corporation.” The client list is not public and it’s unclear whether Muzinich would know about clients that came on board since he left. But any large investor has much to gain, or lose, from decisions being made by the Treasury about the bailout policies.
“The clients of this firm, I imagine, must be thrilled that Muzinich has this vitally important, powerful position with a huge amount of discretion and authority,” Clark said.
The Treasury spokeswoman declined to answer a question about the firm’s clients.
Even as Justin Muzinich has presided over bailout policies criticized by some observers, Muzinich & Co. executives have praised the government’s actions in recent briefings for investors. One described the interventions “as providing somewhat of a floor underneath the high yield market.”
Another Muzinich executive, David Bowen, who manages one of the firm’s high-yield bond portfolios, said during a May 20 webinar, “The Fed has been about as supportive, helpful, accommodative — whatever word you want to use — as anyone could imagine.”
Untangling the Financial Relationship
When Treasury Secretary Steven Mnuchin hired Justin Muzinich as counselor in early 2017, in many ways he was selecting a younger version of himself.
Like Mnuchin, Muzinich grew up in New York City, the son of a wealthy finance executive. Also like his boss, Muzinich spent years collecting a series of elite credentials: He attended Groton and holds degrees from Harvard College, the London School of Economics, Yale Law School and Harvard Business School. He worked at Morgan Stanley and spent a few months at a hedge fund associated with billionaire Steven A. Cohen, followed by a few years at EMS Capital, which invests the money of the wealthy Safra family.
Colleagues praise Muzinich as hardworking and serious, and Democrats have expressed relief that he isn’t as inflammatory as many other Trump appointees. Powell, the Fed chair, called Muzinich “creative and extremely capable” in a statement to The Wall Street Journal in April.
In 2010, he joined the family firm and became its president. His father, George, founded the company in 1988, specializing in handling portfolios of American high-yield bonds for European pension funds. The company expanded to offer funds to other institutional investors and wealthy individuals, but it stuck to its focus on corporate credit — particularly the riskier type that pays higher interest rates. Headquartered in New York and London, the firm has eight offices across Europe and one in Singapore.
“Talking about credit all the time might sound boring, I’m sure it does,” Justin Muzinich said in a 2014 interview, “but that is what makes you good.”
As he rose in the family business, Muzinich also launched himself into GOP policy circles, advising the presidential campaigns of Mitt Romney in 2012 and Jeb Bush in 2016. He owns a $20 million ultramodern beachfront house in the Hamptons and a $4.5 million Park Avenue apartment and commutes from New York City to work in Washington.
When Muzinich entered the Trump administration, he reported owning stock and stock options in the family firm collectively worth at least $60 million. The true value could be much higher, but disclosure rules don’t require officials to give a specific figure for any asset worth more than $50 million.
The Treasury’s ethics officers are frequently called on to rule on complex questions, given that the department tends to attract people from careers on Wall Street who have large, complicated financial holdings — from ex-Goldman Sachs Chairman Hank Paulson to banker and Hollywood financier Mnuchin.
Stakes in individual companies can create conflicts of interest. So incoming Treasury officials typically sell those stocks and invest in broad-based options like mutual funds. Ownership in private investment funds can be particularly thorny because ethics rules treat each of the fund’s investments in specific companies as sources of potential conflicts. Sarah Bloom Raskin, who preceded Muzinich as deputy secretary in the Obama administration, reported holding only a collection of index and mutual funds that either track the whole stock market or a large basket of companies.
But government ethics officials did not require Muzinich to sell his stake in the family firm through his first year in office as counselor to Mnuchin.
According to ethics filings, Muzinich said that he did not divest it until December 2017, the month the tax law was signed. (Several months later, in April 2018, Trump nominated him to be deputy secretary.)
Muzinich did not receive cash for most of his stake in the family firm. Instead, his more recent financial disclosures show that the stake, held in a family trust, was replaced with an opaque asset described as a “receivable from family,” valued at over $50 million.
Muzinich’s disclosure filings don’t reveal much about this asset at all. They don’t say who the family member is or explain the arrangement. They don’t say how the terms were negotiated, or even if the valuation of the deal was vetted by an independent third party.
It turns out that Muzinich transferred his stake to his father. But his father didn’t have to pay him right away. According to a Senate Finance Committee memo obtained by ProPublica, Justin received two promissory notes from his father in return for the shares. The notes pay Justin between $1 million and $5 million in interest over a year, at a rate of 2.11%. Moreover, his father does not have to pay any principal on the loan for nine years.
Neither the financial disclosure forms nor the Senate memo say how long the agreement is supposed to last. Neither addresses the possibility of his getting the shares back after he leaves the government. The Treasury says the transaction is “not reversible” but did not elaborate.
In other words, Justin still has an ongoing long-term stake in the financial well-being of Muzinich & Co., since his father now owes him more than $50 million. If the company were to plummet in value or even go under, it could cost Justin. Actions the Treasury and the Fed take can either enhance the chances he gets his money back or lower them.
The Treasury defended the IOU transaction as an appropriate remedy for any conflicts of interest. The agency provided a statement from Elizabeth Horton, an ethics attorney who left the agency in 2019 and who worked with Muzinich on the divestiture from his family business. Horton said that when Muzinich first joined the agency, “the Treasury ethics office correctly advised him that he did not need to divest his holdings in his family business because of the generalized nature of his work on tax reform legislation.” She said that when his duties changed, “I advised Mr. Muzinich that an exchange for a fixed value note was an appropriate way to divest.”
Horton said that advice was “consistent with practice in previous administrations” — though the Treasury declined to cite similar cases. “Muzinich worked very closely with the ethics office and was extremely attentive to his ethics obligations,” Horton said.
ProPublica reached out to four ethics officials, including two former Treasury ethics lawyers. None could recall a similar divestment transaction. Three of the four disagreed that it resolved Muzinich’s conflicts, while one said that turning it into an asset with a value that doesn’t fluctuate with future developments should shield him from any allegations of impropriety.
The deal does not look like an arms-length transaction, said Virginia Canter, who served as a career ethics attorney at Treasury during the George W. Bush administration and is now at the watchdog group Citizens for Responsibility and Ethics in Washington.
“The terms of the loan suggest something less than a bona fide transaction,” she said. “Once he leaves office, nothing in the arrangement appears to preclude Muzinich from forgiving the debt owed to him by his father so they can amicably agree on returning to Muzinich the interest in the Muzinich family business.”
As ranking member of the Finance Committee, Sen. Ron Wyden opposed Muzinich’s nomination as deputy secretary because of his role in crafting the tax bill. Although he would have preferred a cash sale of the Muzinich & Co. stock, Wyden said in a statement that in July 2018 Muzinich had agreed to “strengthen his recusal commitments to include matters where his family’s company is a party.”
That satisfied Wyden at the time, but it is a very narrow restriction. A vast range of issues before the Treasury could affect Muzinich & Co. regardless of whether the firm was directly a party to any of them.
How Justin Muzinich treated the transaction for tax purposes could reveal whether it was a true and final sale or not.
Ordinarily, a sale of an asset such as equity in a company would trigger a capital gains tax bill. In Muzinich’s case, that could run into the tens of millions of dollars, even though his father paid him no cash upfront. But there is an exception if the asset in question is merely transferred with a commitment to have it returned, said Steve Rosenthal, a tax law expert at the Urban-Brookings Tax Policy Center.
“If you are merely parking or pledging securities, and you are going to get them back, that’s not viewed as a taxable transaction,” he said.
It is not clear how he reported the transaction to the IRS, and whether he was left with a huge tax bill. The Treasury declined to comment on the tax issues.
Tax Reform — for Friends and Family
Through his first year in the administration, even as Muzinich continued to own his stake in the family firm, he met with a wide range of business executives to hash out major tax provisions that would affect them, according to his 2017 calendars that ProPublica obtained after suing the Treasury last year under the Freedom of Information Act. Others were obtained by the watchdog group American Oversight. The Treasury redacted large sections of the calendars, saying that they required consultation with the White House before they could be released.
One of the most important principles in the federal government ethics rules covers whether an official is dealing with a “particular matter” that would affect a discrete group of people with specific interests or a “general matter” that affects a larger and more diverse group.
The Treasury spokeswoman said the tax reform bill was to affect a very large and diverse group, so ethics rules did not prevent Muzinich from working on it. He was allowed to keep his equity in the company while working on the tax bill because his “duties did not include particular matters that required divestiture of certain assets.”
But many industries had specific interests in the tax bill that they lobbied on — industries that may include clients of Muzinich & Co. Insurance companies, for example, featured prominently. Muzinich met with trade groups representing insurers as well as Liberty Mutual, The Hartford, Zurich and Blue Cross Blue Shield. In the final tax bill, property and casualty insurers fared particularly well by dodging new limitations on deductions that applied to other companies.
Insurance companies invest their premiums in order to increase their profits. In its regulatory filings, Muzinich & Co. reports that 17 of its 89 clients are insurance companies, which have given the firm more than $1.4 billion to invest. Muzinich & Co. did not provide a list of its clients.
Some of the companies Muzinich & Co. has stakes in also have been lobbying the Treasury on their own behalf. For example, Muzinich & Co. helps its clients invest in business development companies, a type of investment fund that enjoys lower taxes in exchange for providing capital to medium-sized companies. The firm itself owns stock in BDCs, many of them run by private equity companies such as Ares Capital Corporation, which has paid millions of dollars to lobby for looser rules governing the BDC industry.
Even beyond any overlap with the family firm’s interests, Muzinich’s calendars, which cover the period from February to September of 2017, reflect the administration’s priorities in negotiating the tax deal. Muzinich spent long days in meetings with private equity titans, energy company CEOs and heavy-hitting interest groups like the Business Roundtable and the anti-tax group Americans for Prosperity. His calendar shows no meetings with labor unions or progressive groups.
Muzinich did meet often with the Treasury’s in-house tax experts but frequently didn’t follow their recommendations. Richard Prisinzano, who served in the agency’s tax analysis office until August 2017, recalled trying to tell Mnuchin and Muzinich that drastically lowering corporate tax rates would likely prompt businesses to transform into C corporations, which often pay lower rates under the new law.
He argued that such a change would further reduce tax revenues. Muzinich disagreed, Prisinzano said, protesting that businesses wouldn’t change their corporate form just to lower their taxes. “He really pushed back,” Prisinzano recalled. “He said to me, ‘The secretary is a numbers person, and the numbers don’t make sense to him.’”
“‘I’m a numbers person, and they make perfect sense to me,’” Prisinzano said he responded. “That was not an answer that they liked.”
In the following two years, many large businesses did indeed convert into C corporations, including private equity giants Ares, Blackstone and KKR. The government hasn’t produced an estimate of how big a hit taxpayers took from these conversions.
During his confirmation hearing as deputy secretary in July 2018, Democratic senators pressed Muzinich on whether he agreed with the White House that the tax bill would “pay for itself,” despite the dire projections of independent forecasters such as the nonpartisan Congressional Budget Office. “Yes,” Muzinich responded.
It has not come close, as corporate tax collections plunged and left the national debt at historic levels on the eve of the pandemic.
Muzinich Takes on the COVID-19 Crisis
As the economic response to the novel coronavirus consumed Washington in March, Mnuchin turned again to Muzinich to negotiate with Congress over the shape of a bailout intended to sustain companies as they weathered the worst part of the crisis.
Ultimately, Trump administration officials and lawmakers settled on a package worth more than $2 trillion, divided into aid regimens for different sectors of the economy. While setting general parameters, the Coronavirus Aid, Relief and Economic Security Act gives the Treasury wide latitude over how the money is to be distributed. It calls for $50 billion in grants and loans for the airline industry, for example, with few rules on who should get what. (In another potential intersection with Muzinich’s Treasury work, Muzinich & Co. started a new business line to loan money to airlines to buy planes in February.)
Perhaps the greatest power the Treasury now has is the authority to sign off on Fed loan programs funded with CARES Act money. The Fed has said it will leverage that money to lend up to several trillion dollars.
Among their biggest decisions: Which firms to include in the $600 billion Main Street Lending Program, which will lend directly to mid-sized businesses, and how to structure two programs that will purchase up to $750 billion in corporate bonds.
The Main Street program, which has yet to launch, changed substantially after it was first announced to sweep in bigger companies and those with heavier debt loads. Offering a glimpse into how the Treasury directly shaped the Fed programs, Energy Secretary Dan Brouillette told Bloomberg the change was made in part to make sure beleaguered oil companies had access to the program’s favorable terms. Muzinich & Co.’s U.S.-based funds include dozens of energy companies.
Mnuchin also deputized Muzinich to fix problems that arose during the first round of funding for the Paycheck Protection Program, which offers forgivable loans to small businesses. The government hasn’t said who got money through the program, but Muzinich & Co.’s portfolio includes many companies that are small enough to be eligible.
The Fed’s bond purchasing programs will go even further to help companies with poorly rated credit.
On March 23, the Fed and the Treasury announced a sweeping stimulus program that would involve buying hundreds of billions of dollars of investment-grade bonds. Selling bonds is a way for large companies like Boeing or PepsiCo to raise money for new investments, to fund day-to-day operations or to pay back older loans. Companies that are strong and profitable are expected to be able to pay back the borrowed money. Their bonds are deemed “investment grade” and come with lower interest rates. The news of the Fed program on its own heralded a dramatic recovery in the bond market, which in three weeks recovered nearly all of the 13.6% it had lost since the plunge began on March 6, according to one index.
Then, on April 9, the Fed announced, with the Treasury’s approval, that it would expand its efforts to buy some junk bonds. These carry higher interest rates because the borrowing companies are viewed as riskier and may already be heavily in debt. One index tracking that market segment surged nearly 8% on the news, the most in a decade. This risker category of bonds has expanded dramatically in recent years as companies took on higher debt burdens to do things like acquire competitors and buy back stock. These are the bonds in which Muzinich & Co. has long specialized.
At the end of 2019, Muzinich & Co. reported it had $2.8 billion of assets under management in its U.S. high-yield bond strategy. A Muzinich fund that focuses specifically on those bonds took significant losses in March, as companies like oilfield services provider Targa Resources and Caesars Entertainment saw the price of their bonds fall 30% and 35% respectively.
The government’s announcement buoyed Muzinich & Co.’s high-yield holdings along with everyone else’s. The portfolio manager for the firm’s U.S. high-yield offering also praised CARES Act’s tax provisions that would “help high yield companies.”
In a separate development in May, the Fed expanded another Treasury-backed lending program in a way that could help Muzinich & Co.’s portfolio. The central bank said May 12 it would support “syndicated loans,” another form of corporate debt often in which riskier firms borrow money from multiple lenders. Muzinich & Co. had more than $3 billion in assets under management in U.S. and European syndicated loans at the end of last year.
The good news for Muzinich & Co. keeps coming. As the firm’s head of investment strategy, Erick Muller, told investors in a May 13 webcast about the junk bond market: “The recovery is pretty spectacular.”
Doris Burke and Hannah Fresques contributed reporting.
Tired of reading the same old news from the same old sources? So are we! That’s why we’re on a mission to shake things up and bring you the stories and perspectives that often go untold in mainstream media. But being a radically, unapologetically independent news site isn’t easy (or cheap), and we rely on reader support to keep the lights on.
If you like what you’re reading, please consider making a tax-deductible donation today. We’re not asking for a handout, we’re asking for an investment: Invest in a nonprofit news site that’s not afraid to ruffle a few feathers, not afraid to stand up for what’s right, and not afraid to tell it like it is.
This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.


truthout--2020-06-02--Trump’s Anti-Blackness Is Overt in Protest Response and Covert in Policymaking

Over the weekend , President Trump used his bully pulpit to openly fantasize about the Secret Service siccing “ vicious dogs ” on demonstrators outside the White House who were protesting police brutality following the killing of George Floyd in Minnesota last week .
Trump ’ s calls for violence against protesters reflect the anti-Blackness of economic policies he and the GOP have relentlessly pursued since 2016 , including recent attempts to destroy public sector jobs and to make discrimination in lending nearly impossible to catch .
One in five Black Americans work in the public sector , where they @ @ @ @ @ @ @ than in the private sector .
The United States Postal Service ( USPS ) is one public sector employer that ’ s long been a center of Black labor organizing , and , subsequently , a target for privatization .
In 2006 , George W. Bush signed a law that forced the USPS to pre-fund its pensions 75 years into the future .
Trump has tried to go even further , threatening back in March to veto the CARES Act should it contain any aid for the USPS , even as it faces @ @ @ @ @ @ @ CARES Act contained a $ 10 billion loan for the postal service , to be administered by the Treasury Department , which is reportedly planning to use it as leverage to force changes .
The Trump administration ’ s determination to let the post office fail is an attack on Black workers .
As Thomas Kennedy wrote for Truthout , Black workers shut out of many jobs due to systemic racism have “ traditionally found well-paid and stable employment through the post office.
” A 2000 study by the Government Accountability Office found @ @ @ @ @ @ @ of USPS employees were Black , compared to the 11 percent of the overall country ’ s civilian labor force .
As of 2011 , about 25 percent of the USPS ’ s workers were Black .
Black workers also made up 14.3 percent of the Post Office ’ s executive management .
Like many frontline workers , USPS employees are especially at risk during the pandemic .
According to the National Postal Mail Handlers Union , 1,100 postal workers have tested positive for coronavirus and 54 have died .
During the Great @ @ @ @ @ @ @ hit Black workers hardest , as they lost their jobs at twice the rate of whites .
When Senate Majority Leader Mitch McConnell suggests that blue states should simply go bankrupt during the pandemic , he is expressing his determination to decimate Black employment .
With state and local budgets staring down massive shortfalls , this all but guarantees that the loss in public sector work that Black Americans saw after the last recession will repeat in this one .
The Trump administration has also been busy creating new barriers to housing for @ @ @ @ @ @ @ Community Reinvestment Act ( CRA ) was enacted in 1977 in response to racist , government-created redlining to ensure banks are not discriminatory in their lending .
Many banks ran afoul of the CRA during the last financial crisis , including OneWest , which is why advocacy groups cried foul when Trump chose former OneWest executive Joseph Otting to run the Office of the Comptroller of the Currency , a banking regulator .
Otting oversaw a dramatic overhaul of the CRA , allowing banks to reduce their lending to low-income communities , a @ @ @ @ @ @ @ rights groups .
After pushing through these changes that will almost certainly further widen the racial wealth gap and exacerbate the problems of banking while Black , Otting resigned mid-pandemic , telling staff he planned to play lots of golf and tennis .
Otting ’ s lasting legacy will be his efforts to make discrimination in mortgages and bank lending more likely — hopefully it won ’ t be a lasting legacy ; the National Community Reinvestment Coalition has already announced it will sue to block the rule .
Like most kinds of @ @ @ @ @ @ @ to even notice , as prospective landlords have a variety of excuses to blame rejections on , from credit scores to lack of references .
As Ta-Nehisi Coates has written , “ Housing discrimination is hard to detect , hard to prove , and hard to prosecute.
” Under Trump , the Department of Housing and Urban Development ( HUD ) has been working to make detecting and prosecuting it even harder .
Following the last financial crisis , the Justice Department prosecuted Wells Fargo for disproportionately giving Black and Latinx borrowers subprime @ @ @ @ @ @ @ when their credit scores and incomes were the same .
Wells Fargo , in this case , did not explicitly say it aimed to discriminate , but the outcomes of its lending was discriminatory because there was a “ pattern or practice of discrimination.
” The Obama administration formalized this legal standard with its 2013 Disparate Impact rule , which clarified that it is a violation of the Fair Housing Act when practices lead to discrimination even if there was no explicit , provable intent to discriminate .
HUD has not just moved @ @ @ @ @ @ @ went even further , saying that lenders aren ’ t responsible if they use an algorithm from a third party that results in discrimination , effectively allowing lenders to dodge blame .
Enforcing all but the most egregious , naked discrimination would be all but impossible under HUD ’ s proposed rule — which is the point .
Trump is living up well to the legacy of his father , who routinely denied housing to Black people .
But he ’ s also bringing back the same discriminatory political targeting used by white @ @ @ @ @ @ @ E. Headley .
Trump evoked Connor ’ s methods of sending police dogs to attack civil rights protesters in the 1960s when he threatened on May 30 that if protesters outside the White House breached the fence , they would be “ greeted with the most vicious dogs , and most ominous weapons.
” Connor was the Commissioner of Public Safety in Birmingham , Alabama , who aimed fire hoses and released dogs on civil rights protesters in 1963 .
The day before , Trump labeled the Minneapolis protesters “ THUGS ” and @ @ @ @ @ @ @ when the looting starts , the shooting starts ” in a tweet that was later censored by Twitter for “ glorifying violence.
” Headley was Miami ’ s police chief from 1948-1968 , overseeing two decades of anti-Black violence in Miami including the use of guns , dogs and stop-and-frisk .
And like many lawmakers today , Headley dismissed the protesters ’ demands , calling them “ hoodlums who took advantage of the civil rights campaign.
” Trump continues to celebrate brutality in his response to the uprisings following the police murder of @ @ @ @ @ @ @ use overwhelming force.
” His policymaking and those he ’ s deputized in his administration use similar force to perpetuate violence through anti-Black policies .

Part of the Series Despair and Disparity: The Uneven Burdens of COVID-19
Over the weekend, President Trump used his bully pulpit to openly fantasize about the Secret Service siccing “vicious dogs” on demonstrators outside the White House who were protesting police brutality following the killing of George Floyd in Minnesota last week. Trump’s calls for violence against protesters reflect the anti-Blackness of economic policies he and the GOP have relentlessly pursued since 2016, including recent attempts to destroy public sector jobs and to make discrimination in lending nearly impossible to catch.
One in five Black Americans work in the public sector, where they earn more and face less wage disparities than in the private sector. The United States Postal Service (USPS) is one public sector employer that’s long been a center of Black labor organizing, and, subsequently, a target for privatization. In 2006, George W. Bush signed a law that forced the USPS to pre-fund its pensions 75 years into the future. Trump has tried to go even further, threatening back in March to veto the CARES Act should it contain any aid for the USPS, even as it faces bankruptcy. Despite this threat, the CARES Act contained a $10 billion loan for the postal service, to be administered by the Treasury Department, which is reportedly planning to use it as leverage to force changes. The Trump administration’s determination to let the post office fail is an attack on Black workers. As Thomas Kennedy wrote for Truthout, Black workers shut out of many jobs due to systemic racism have “traditionally found well-paid and stable employment through the post office.” A 2000 study by the Government Accountability Office found that as of 1999, 21 percent of USPS employees were Black, compared to the 11 percent of the overall country’s civilian labor force. As of 2011, about 25 percent of the USPS’s workers were Black. Black workers also made up 14.3 percent of the Post Office’s executive management. Like many frontline workers, USPS employees are especially at risk during the pandemic. According to the National Postal Mail Handlers Union, 1,100 postal workers have tested positive for coronavirus and 54 have died.
During the Great Recession, losses in public sector jobs hit Black workers hardest, as they lost their jobs at twice the rate of whites. When Senate Majority Leader Mitch McConnell suggests that blue states should simply go bankrupt during the pandemic, he is expressing his determination to decimate Black employment. With state and local budgets staring down massive shortfalls, this all but guarantees that the loss in public sector work that Black Americans saw after the last recession will repeat in this one.
The Trump administration has also been busy creating new barriers to housing for Black and Brown U.S. residents. The Community Reinvestment Act (CRA) was enacted in 1977 in response to racist, government-created redlining to ensure banks are not discriminatory in their lending. Many banks ran afoul of the CRA during the last financial crisis, including OneWest, which is why advocacy groups cried foul when Trump chose former OneWest executive Joseph Otting to run the Office of the Comptroller of the Currency, a banking regulator. Otting oversaw a dramatic overhaul of the CRA, allowing banks to reduce their lending to low-income communities, a move that faced wide condemnation by civil rights groups. After pushing through these changes that will almost certainly further widen the racial wealth gap and exacerbate the problems of banking while Black, Otting resigned mid-pandemic, telling staff he planned to play lots of golf and tennis. Otting’s lasting legacy will be his efforts to make discrimination in mortgages and bank lending more likely — hopefully it won’t be a lasting legacy; the National Community Reinvestment Coalition has already announced it will sue to block the rule.
Like most kinds of discrimination, housing discrimination can be difficult to even notice, as prospective landlords have a variety of excuses to blame rejections on, from credit scores to lack of references. As Ta-Nehisi Coates has written, “Housing discrimination is hard to detect, hard to prove, and hard to prosecute.” Under Trump, the Department of Housing and Urban Development (HUD) has been working to make detecting and prosecuting it even harder. Following the last financial crisis, the Justice Department prosecuted Wells Fargo for disproportionately giving Black and Latinx borrowers subprime loans and whites prime loans, even when their credit scores and incomes were the same. Wells Fargo, in this case, did not explicitly say it aimed to discriminate, but the outcomes of its lending was discriminatory because there was a “pattern or practice of discrimination.” The Obama administration formalized this legal standard with its 2013 Disparate Impact rule, which clarified that it is a violation of the Fair Housing Act when practices lead to discrimination even if there was no explicit, provable intent to discriminate. HUD has not just moved to gut this rule, the agency went even further, saying that lenders aren’t responsible if they use an algorithm from a third party that results in discrimination, effectively allowing lenders to dodge blame. Enforcing all but the most egregious, naked discrimination would be all but impossible under HUD’s proposed rule — which is the point.
Trump is living up well to the legacy of his father, who routinely denied housing to Black people. But he’s also bringing back the same discriminatory political targeting used by white supremacist politicians like Bull Connor and Walter E. Headley. Trump evoked Connor’s methods of sending police dogs to attack civil rights protesters in the 1960s when he threatened on May 30 that if protesters outside the White House breached the fence, they would be “greeted with the most vicious dogs, and most ominous weapons.” Connor was the Commissioner of Public Safety in Birmingham, Alabama, who aimed fire hoses and released dogs on civil rights protesters in 1963. The day before, Trump labeled the Minneapolis protesters “THUGS” and quoted Headley’s statement that “when the looting starts, the shooting starts” in a tweet that was later censored by Twitter for “glorifying violence.” Headley was Miami’s police chief from 1948-1968, overseeing two decades of anti-Black violence in Miami including the use of guns, dogs and stop-and-frisk. And like many lawmakers today, Headley dismissed the protesters’ demands, calling them “hoodlums who took advantage of the civil rights campaign.” Trump continues to celebrate brutality in his response to the uprisings following the police murder of George Floyd — retweeting calls to “use overwhelming force.” His policymaking and those he’s deputized in his administration use similar force to perpetuate violence through anti-Black policies.
Tired of reading the same old news from the same old sources? So are we! That’s why we’re on a mission to shake things up and bring you the stories and perspectives that often go untold in mainstream media. But being a radically, unapologetically independent news site isn’t easy (or cheap), and we rely on reader support to keep the lights on.
If you like what you’re reading, please consider making a tax-deductible donation today. We’re not asking for a handout, we’re asking for an investment: Invest in a nonprofit news site that’s not afraid to ruffle a few feathers, not afraid to stand up for what’s right, and not afraid to tell it like it is.
Copyright © Truthout. May not be reprinted without permission.


truthout--2020-06-02--Demands for Trump’s Removal Grow as Fascist Speech Condemned

President Donald Trump ’ s pledge Monday evening to deploy the full force of the U.S. military against demonstrators protesting the killing of George Floyd — and the president ’ s authorization of police violence against peaceful protesters to clear the way for a photo-op — amounted in the eyes of lawmakers , rights groups , and commentators to “ declaration of war ” against the U.S. public that must result in Trump ’ s removal from office .
Sen. Ron Wyden ( D-Ore. ) characterized Trump ’ s remarks from the Rose Garden of the White House as a @ @ @ @ @ @ @ on a declaration of war against American citizens ” who have taken to the streets across the nation to condemn police brutality and racial injustice .
“ I fear for our country tonight and will not stop defending America against Trump ’ s assault , ” Wyden tweeted .
Other progressive lawmakers similarly condemned Trump ’ s address , during which the president vowed to deploy ” thousands and thousands of heavily armed soldiers , military personnel , and law enforcement officers , ” to the streets of the nation ’ s capital @ @ @ @ @ @ @ walked from the White House to St. John ’ s Episcopal Church as police officers swinging batons and hurling tear gas canisters cleared the streets of peaceful demonstrators .
The ACLU demanded an immediate investigation into the president ’ s approval of “ politically-motivated and life-threatening use of indiscriminate weapons ” against the crowds of protesters .
After police officers and military personnel forcefully removed demonstrators from his path , Trump arrived at the church and hoisted a Bible for the cameras .
The White House Monday night posted an edited video of @ @ @ @ @ @ @ which includes zero indication that , as Trump casually strolled to St. John ’ s , protesters were being brutally attacked for his benefit .
“ The president of the United States tear-gassed peaceful protestors in order to clear the way for a useless photo-op outside the White House — just after vowing to activate the military against our own people , ” tweeted Sen. Elizabeth Warren ( D-Mass. )
.
“ Lives and our democracy are in danger.
” “ This is not a dictatorship , ” tweeted Sanders .
“ This @ @ @ @ @ @ @ Our citizens have a constitutional right to peacefully protest .
It ’ s called the First Amendment.
” Will Bunch of the Philadelphia Inquirer wrote in a column late Monday that Trump ’ s speech in the Rose Garden represented “ the moment we ’ ve been dreading since that escalator ride down Trump Tower five years ago this month — that ’ s been slowly building brick by brick as Donald Trump tore down the rule of law , abused the presidency to enrich himself , and grabbed the bully pulpit of @ @ @ @ @ @ @ racism , sexism and xenophobia.
” “ Backed into a corner after his incompetence and distrust in science was trampled by a virus that ’ s killed 105,000 Americans , compounded by 40 million unemployed , and now massive , chaotic protests over the police brutality and racism that he has nurtured instead of combating , the president of the United States declared war on the American people , ” Bunch wrote .
“ Donald Trump needs to go , and we can ’ t wait until even November 3 , let alone @ @ @ @ @ @ @ s Ben Mathis-Lilley also made the case for Trump ’ s speedy removal from office , warning in a column Monday that “ there is not much more room for the president ’ s program of violence to keep escalating.
” “ Trump needs to be removed now , ” wrote Mathis Lilley , “ because after the massacre it will be too late .
”

Trump’s pledge to deploy the full force of the U.S. military against demonstrators sparked immediate condemnation.
President Donald Trump’s pledge Monday evening to deploy the full force of the U.S. military against demonstrators protesting the killing of George Floyd — and the president’s authorization of police violence against peaceful protesters to clear the way for a photo-op — amounted in the eyes of lawmakers, rights groups, and commentators to “declaration of war” against the U.S. public that must result in Trump’s removal from office.
Sen. Ron Wyden (D-Ore.) characterized Trump’s remarks from the Rose Garden of the White House as a “fascist speech” that “verged on a declaration of war against American citizens” who have taken to the streets across the nation to condemn police brutality and racial injustice.
“I fear for our country tonight and will not stop defending America against Trump’s assault,” Wyden tweeted.
Other progressive lawmakers similarly condemned Trump’s address, during which the president vowed to deploy ” thousands and thousands of heavily armed soldiers, military personnel, and law enforcement officers,” to the streets of the nation’s capital.
Following his speech, the president walked from the White House to St. John’s Episcopal Church as police officers swinging batons and hurling tear gas canisters cleared the streets of peaceful demonstrators. The ACLU demanded an immediate investigation into the president’s approval of “politically-motivated and life-threatening use of indiscriminate weapons” against the crowds of protesters.
After police officers and military personnel forcefully removed demonstrators from his path, Trump arrived at the church and hoisted a Bible for the cameras. The White House Monday night posted an edited video of the president’s walk on Twitter which includes zero indication that, as Trump casually strolled to St. John’s, protesters were being brutally attacked for his benefit.
“The president of the United States tear-gassed peaceful protestors in order to clear the way for a useless photo-op outside the White House — just after vowing to activate the military against our own people,” tweeted Sen. Elizabeth Warren (D-Mass.). “Lives and our democracy are in danger.”
Sen. Bernie Sanders (I-Vt.) slammed Trump for having “peaceful demonstrators viciously attacked.”
“This is not a dictatorship,” tweeted Sanders. “This is the United States of America. Our citizens have a constitutional right to peacefully protest. It’s called the First Amendment.”
Donald Trump is a liar and a racist and he behaves like a dictator. He just tear gassed protesters for a photo op, endangering their health during a global pandemic. He must be stopped and we must stand with all those fighting for racial justice. — Ed Markey (@EdMarkey) June 2, 2020
The President just declared war on millions of Americans and the 1st Amendment. He is the greatest threat to the American way of life in our history. — Rep. John Yarmuth (@RepJohnYarmuth) June 1, 2020
Will Bunch of the Philadelphia Inquirer wrote in a column late Monday that Trump’s speech in the Rose Garden represented “the moment we’ve been dreading since that escalator ride down Trump Tower five years ago this month — that’s been slowly building brick by brick as Donald Trump tore down the rule of law, abused the presidency to enrich himself, and grabbed the bully pulpit of the White House to divide America with racism, sexism and xenophobia.”
“Backed into a corner after his incompetence and distrust in science was trampled by a virus that’s killed 105,000 Americans, compounded by 40 million unemployed, and now massive, chaotic protests over the police brutality and racism that he has nurtured instead of combating, the president of the United States declared war on the American people,” Bunch wrote. “Donald Trump needs to go, and we can’t wait until even November 3, let alone January 20, 2021.”
Slate’s Ben Mathis-Lilley also made the case for Trump’s speedy removal from office, warning in a column Monday that “there is not much more room for the president’s program of violence to keep escalating.”
“Trump needs to be removed now,” wrote Mathis Lilley, “because after the massacre it will be too late.”
Tired of reading the same old news from the same old sources? So are we! That’s why we’re on a mission to shake things up and bring you the stories and perspectives that often go untold in mainstream media. But being a radically, unapologetically independent news site isn’t easy (or cheap), and we rely on reader support to keep the lights on.
If you like what you’re reading, please consider making a tax-deductible donation today. We’re not asking for a handout, we’re asking for an investment: Invest in a nonprofit news site that’s not afraid to ruffle a few feathers, not afraid to stand up for what’s right, and not afraid to tell it like it is.
This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.


truthout--2020-06-02--To Become Safer Amid Pandemic We Must Explore Our Responses to Abuse More Deeply

Becoming safe from an abusive partner has most often been defined by the act of leaving the relationship .
Leaving can cause hardship , including financial struggles , and is more difficult for survivors who are marginalized by race , gender identity , disability , language or immigration status .
While leaving an abuser has been shown to increase danger in the short-term , it is still considered the gold standard for getting safe from abuse .
The COVID-19 pandemic has brought about stay-at-home orders , the shut-down of courts , slow-downs in obtaining orders of protection , and domestic @ @ @ @ @ @ @ due to social distancing health measures for residents and staff .
Advocates working with survivors of domestic violence are faced with having to re-think long-held safety-planning strategies , and consider more fully what many survivors have always known : leaving is not the only option .
Safety planning in close quarters requires thinking about how to be , if not safe , then safer .
Living under a global pandemic is traumatizing , and puts many couples and families at risk of heightened conflict .
Using tools like negotiation and boundary-setting can help @ @ @ @ @ @ @ like Impact in Boston are offering free educational webinars for building these skills .
Conflict is different from abuse , the hallmark of which is coercion and control , but could de-escalation , conflict management and avoidance strategies also hold potential for survivors ?
We think of abuse in terms of crisis , but the day-to-day reality often means managing low-level and chronic risk .
Simple strategies , such as time spent in different rooms , walks or exercising outside , keeping to a schedule , and calm activities like working on puzzles @ @ @ @ @ @ @ .
And while the burden of pandemic living might increase the risk of abuse , relational skill-building may offer options and resources to reduce such vulnerability .
In some cases , it may be important for survivors to learn skills regarding setting assertive boundaries and even physically protecting themselves from abuse .
The topic of self-defense has always been controversial .
Women , people of color and queer people in particular learn that confronting danger can result in escalation and blame and are conditioned instead to avoid or cooperate — which may be @ @ @ @ @ @ @ should ever feel responsible for an abuser ’ s behavior , and accountability for abuse should remain squarely on the perpetrator .
But there is no one-size-fits-all safety plan , and in this time of increased isolation and reduced options , self-defense strategies and skills may be able to make a difference in managing contact with an abuser .
The Center for Anti-Violence Education in Brooklyn , New York , offers virtual workshops about empowerment self-defense training , including verbal boundary-setting , evasive techniques , blocking blows and striking primary bodily targets .
@ @ @ @ @ @ @ can be fundamentally empowering and communicates unequivocally that they have a right to protect themselves from harm .
What if safety planning included coordinated public messaging aimed at those who might harm their partners , especially under the stress and uncertainty of a global pandemic ?
What if such messaging included online , accessible and free resources for those who are at risk of abusing ?
Historically , intervention with abusers has been tied to court systems , mandated and fee-based .
With such systems less operational , what would happen if nonpunitive @ @ @ @ @ @ @ available for anyone who felt themselves at risk of over-controlling , threatening , or taking fear and frustration out on partners ?
Educational intervention and support for those who cause harm must be made more widely available and destigmatized .
An example is She Is Not Your Rehab in New Zealand , which approaches violence prevention from a cultural and relational standpoint , encouraging those who might abuse to seek support and learn new strategies for coping and for having safer , healthy relationships .
When accessible resources for those at risk of @ @ @ @ @ @ @ stigma of seeking support decreases , there may be a rise in a survivor ’ s ability to access support as well , increasing safety overall .
This is a key time to explore such responses more deeply .
Considering how to maintain contact with survivors is vital in this time of isolation and distance .
Points of access already available to families can help survivors make plans that include regular calls with trusted others , and having someone who cares about safety stay in close contact with the abuser .
Creating a @ @ @ @ @ @ @ two others who are managing the pandemic in mutually agreed upon ways is another option , especially considering child care and home-schooling needs .
Contact and connection has always helped to reduce isolation and increase safety , but under pandemic restrictions and distancing that has become harder .
Local agencies and communities wanting to support survivors can think about ways to increase access to technology for survivors and their families .
This might include making smart phones and tablets ( which are portable and more easily concealed ) widely available for free or @ @ @ @ @ @ @ information and education about safety tools , as well as to advocates and peer supports .
Tech access for children , in the form of child-friendly tablets , allows families to create space at home for everyone to be appropriately occupied and engaged with the outside world .
Stable Wi-Fi , encrypted platforms that meet privacy and confidentiality standards , and clear information about tech safety , including how to log out of sites , delete history and protect passwords , might well be the most critical safety tools under lockdown .
The @ @ @ @ @ @ @ information about both the risks and benefits of technology use for survivors of domestic violence .
Mainstream safety options , though impacted , are still available in most localities .
Orders of protection are being managed remotely , courts are hearing emergency cases and domestic violence shelters have moved to scattered-site models in order to maintain social distancing needs .
Nonetheless , considering safety options outside of these institutionalized responses is long overdue .
Let ’ s not miss the opportunity , for it may serve us well even beyond this catastrophic moment @

Part of the Series Despair and Disparity: The Uneven Burdens of COVID-19
Becoming safe from an abusive partner has most often been defined by the act of leaving the relationship. Leaving can cause hardship, including financial struggles, and is more difficult for survivors who are marginalized by race, gender identity, disability, language or immigration status. While leaving an abuser has been shown to increase danger in the short-term, it is still considered the gold standard for getting safe from abuse.
The COVID-19 pandemic has brought about stay-at-home orders, the shut-down of courts, slow-downs in obtaining orders of protection, and domestic violence shelters that cannot fill beds due to social distancing health measures for residents and staff. Advocates working with survivors of domestic violence are faced with having to re-think long-held safety-planning strategies, and consider more fully what many survivors have always known: leaving is not the only option. Safety planning in close quarters requires thinking about how to be, if not safe, then safer.
Living under a global pandemic is traumatizing, and puts many couples and families at risk of heightened conflict. Using tools like negotiation and boundary-setting can help meet the added stress, and organizations like Impact in Boston are offering free educational webinars for building these skills. Conflict is different from abuse, the hallmark of which is coercion and control, but could de-escalation, conflict management and avoidance strategies also hold potential for survivors? We think of abuse in terms of crisis, but the day-to-day reality often means managing low-level and chronic risk. Simple strategies, such as time spent in different rooms, walks or exercising outside, keeping to a schedule, and calm activities like working on puzzles can decrease tension and create more space. And while the burden of pandemic living might increase the risk of abuse, relational skill-building may offer options and resources to reduce such vulnerability.
In some cases, it may be important for survivors to learn skills regarding setting assertive boundaries and even physically protecting themselves from abuse. The topic of self-defense has always been controversial. Women, people of color and queer people in particular learn that confronting danger can result in escalation and blame and are conditioned instead to avoid or cooperate — which may be prudent. No one who is targeted should ever feel responsible for an abuser’s behavior, and accountability for abuse should remain squarely on the perpetrator. But there is no one-size-fits-all safety plan, and in this time of increased isolation and reduced options, self-defense strategies and skills may be able to make a difference in managing contact with an abuser. The Center for Anti-Violence Education in Brooklyn, New York, offers virtual workshops about empowerment self-defense training, including verbal boundary-setting, evasive techniques, blocking blows and striking primary bodily targets. Helping survivors gain access to such information can be fundamentally empowering and communicates unequivocally that they have a right to protect themselves from harm.
What if safety planning included coordinated public messaging aimed at those who might harm their partners, especially under the stress and uncertainty of a global pandemic? What if such messaging included online, accessible and free resources for those who are at risk of abusing? Historically, intervention with abusers has been tied to court systems, mandated and fee-based. With such systems less operational, what would happen if nonpunitive, non-mandated and free support became widely available for anyone who felt themselves at risk of over-controlling, threatening, or taking fear and frustration out on partners? Educational intervention and support for those who cause harm must be made more widely available and destigmatized. An example is She Is Not Your Rehab in New Zealand, which approaches violence prevention from a cultural and relational standpoint, encouraging those who might abuse to seek support and learn new strategies for coping and for having safer, healthy relationships. When accessible resources for those at risk of abusing become more available, and the stigma of seeking support decreases, there may be a rise in a survivor’s ability to access support as well, increasing safety overall. This is a key time to explore such responses more deeply.
Considering how to maintain contact with survivors is vital in this time of isolation and distance. Points of access already available to families can help survivors make plans that include regular calls with trusted others, and having someone who cares about safety stay in close contact with the abuser. Creating a safe “pod” with one or two others who are managing the pandemic in mutually agreed upon ways is another option, especially considering child care and home-schooling needs. Contact and connection has always helped to reduce isolation and increase safety, but under pandemic restrictions and distancing that has become harder.
Local agencies and communities wanting to support survivors can think about ways to increase access to technology for survivors and their families. This might include making smart phones and tablets (which are portable and more easily concealed) widely available for free or low-cost to allow survivors to connect to information and education about safety tools, as well as to advocates and peer supports. Tech access for children, in the form of child-friendly tablets, allows families to create space at home for everyone to be appropriately occupied and engaged with the outside world. Stable Wi-Fi, encrypted platforms that meet privacy and confidentiality standards, and clear information about tech safety, including how to log out of sites, delete history and protect passwords, might well be the most critical safety tools under lockdown. The National Network to End Domestic Violence provides information about both the risks and benefits of technology use for survivors of domestic violence.
Mainstream safety options, though impacted, are still available in most localities. Orders of protection are being managed remotely, courts are hearing emergency cases and domestic violence shelters have moved to scattered-site models in order to maintain social distancing needs. Nonetheless, considering safety options outside of these institutionalized responses is long overdue. Let’s not miss the opportunity, for it may serve us well even beyond this catastrophic moment.
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