Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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Washington was riveted Thursday as Christine Blasey Ford offered gripping testimony before the Senate about allegations that Supreme Court nominee Brett Kavanaugh tried to rape her at a party in 1982. Kavanaugh later offered his own forceful defense, which appeared to boost Republican resolve to push ahead with his confirmation vote. But it wasn’t the only hearing detailing alleged sexual misconduct claims…
THE BIG DEAL–Mel Watt’s accuser describes sexual harassment claims in stunning testimony: A Federal Housing Finance Agency (FHFA) employee who has accused Director Mel Watt of sexual harassment described her allegations Thursday in gripping testimony before a House committee.
Simone Grimes, a special adviser at FHFA, told lawmakers that Watt made dozens of sexual advances toward her, withheld a promised pay raise over her refusal of his advances and was protected by senior agency officials charged with investigating her accusations.
{mosads}Grimes told the House Financial Services Committee that the FHFA’s Office of Inspector General responded to her claims with “hostility, intimidation, bullying, laden with gossip and public shaming” and sought to protect Watt throughout the process.
“Not only are you hurt by what has happened, but you quickly learn that all of the agency mechanisms that you hope have a sympathetic ear are not only slightly hostile, but make it clear that they’re not there to support you, but defend their client no matter what their client has done,” Grimes said.
I’ve got a recap of the hearing here.
Grimes’s allegations:
- Grimes alleged that Watt routinely sexually harassed her, starting in September 2015, with comments about her appearance and his attraction to her.
- Grimes had been seeking a pay raise that she said she was promised after taking on a new position, and that Watt regularly tied her compensation and advancement within FHFA to her refusal of his sexual advances.
- “There was a clear correlation between the two,” Grimes said, adding that Watt made her feel “uncomfortable,” “unsafe” and “diminished to just an object.”
- Grimes recorded audio from encounters with Watt in which he made inappropriate remarks, and has shared those tapes with reporters. Grimes said she informed Watt that he was being recorded, but that he appeared to not believe her.
Watt’s defense:
- Watt denied the allegations and refused to cooperate with an investigation conducted by the U.S. Postal Service into Grimes’s claims. He fiercely defended his conduct Wednesday and said Grimes had taken advantage of his innocent friendship and mentorship.
- Watt criticized lawmakers for allowing Grimes to testify despite a pending FHFA investigation and her lawsuit against the agency. He also accused Grimes of selectively leaking to the media excerpts of her recordings of their conversations in which Watt can be heard commenting on her appearances and his attraction to her.
How lawmakers weighed in:
- Lawmakers ripped Watt for refusing to be interviewed for the postal service investigation and claiming he was not subject to FHFA sexual harassment rules.
- “I don’t wish to make threats Mr. Watt, particularly to a former colleague,” Chairman Jeb Hensarling (R-Texas) said. “I will not hesitate to use my subpoena if we have any scintilla of evidence that you are not cooperating with this investigation.”
- Rep. Maxine Waters (D-Calif.), the panel’s ranking Democrat, said “There’s one lesson in all of this, maybe for you. It’s a new day, it’s new time and the old processes don’t work quite well anymore.”
LEADING THE DAY
SEC sues Elon Musk for fraud, seeks removal from Tesla: The Securities and Exchange Commission (SEC) is suing Tesla CEO Elon Musk over his controversial Twitter announcement of a non-existent deal to take the company private.
The suit alleges that Musk committed securities fraud. Shares of Tesla immediately dipped by roughly 4 percent after the news.
The SEC is seeking to remove Musk from Tesla and ban him from being an officer of a publicly traded company. The commission is also suing Musk to pay civil penalties for the alleged fraud and to forfeit any profit made from the actions stated in their charges.
Musk is one of the highest profile executives the agency has pursued fraud charges against.
The SEC along with the Department of Justice was investigating the company after Musk tweeted earlier in the year that he had secured funding to take Tesla private at $420 a share.
“Am considering taking Tesla private at $420. Funding secured.” Musk tweeted in August.
The SEC concluded in its investigation that “[t]his statement was false and misleading.”
The Hill’s Ali Breland tells us why here.
Mnuchin: GOP hasn’t lost the messaging war on tax law: Treasury Secretary Steven Mnuchin on Thursday pushed back on arguments that Republicans have failed to successfully sell President Trump’s tax law to the public, saying taxpayers are just now starting to see the effects of the 2017 measure.
“I don’t think we’ve lost the message war at all,” Mnuchin said at an event hosted by The Hill and sponsored by EJF Capital.
Mnuchin said the Federal Reserve has estimated that gross domestic product will exceed 3 percent for the year, and he touted elements of the tax law, such as a provision that allows businesses to immediately write off the cost of capital investments.
“We’re just beginning to see the beginning impact, and I think over the next few years we’ll see that continue on,” he said.
Mnuchin’s comments come as polls have shown a lack of widespread support for Trump’s tax law, which the president signed in December.
The Hill’s Naomi Jagoda tells us more about that dynamic and Mnuchin’s view of the economy here.
Analysis finds 77 percent of small firms in Puerto Rico suffered hurricane losses: An overwhelming majority of small businesses in Puerto Rico suffered quantifiable losses as a result of Hurricanes Maria and Irma last year, according to a new report by the Federal Reserve Bank of New York.
In its annual survey of Puerto Rico small businesses, the New York Fed found that 77 percent of businesses reported losses directly related to the 2017 hurricanes, and insurance coverage was insufficient in addressing those damages.
The New York Fed surveyed 407 companies, each with fewer than 500 employees, between March and May and found that only 4 percent of firms with insurance had their damages fully covered. Twenty three percent had their losses partially covered. The Hill’s Rafael Bernal breaks down the data here.
GOOD TO KNOW
- The House on Thursday passed two of the three bills in House Republicans’ second tax-cut package, with GOP lawmakers pushing to put attention on President Trump’s 2017 tax law and the economy in advance of the November midterm elections.
- Budget hawks are up in arms over congressional spending following the passage of government funding bills exceeding $1 trillion for fiscal year 2019.
- U.S. businesses and top Republicans on Capitol Hill expressed support for the U.S. and Japan to negotiate a bilateral trade agreement.
- For the latest chapter in The Hill’s series on the passage of the tax bill, we take a look at how bipartisanship was never a real chance.
- The future of electric cars is in Congress’s hands, with lawmakers divided over whether to extend a popular tax credit.
ODDS AND ENDS
- Salesforce has agreed to meet with activists to discuss its contracts with U.S. Border Patrol, according to Fight For the Future, a tech-focused advocacy group.
- European regulators probing Amazon over antitrust concerns are reportedly asking smaller merchants whether the internet giant has been copying their products and selling them under its own brand.