On The Money: Bombshell NY Times report on Trump's taxes | Mulvaney backs official under fire for posts dismissing racism | Regulators pledge relief for mid-sized banks | Amazon raises minimum wage | Trump defends name of new trade deal

On The Money: Bombshell NY Times report on Trump's taxes | Mulvaney backs official under fire for posts dismissing racism | Regulators pledge relief for mid-sized banks | Amazon raises minimum wage | Trump defends name of new trade deal
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Happy Tuesday 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.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis.

 

THE BIG DEAL: Bombshell NYT report accuses Trump of tax fraud: President TrumpDonald John TrumpThe Memo: Ayers decision casts harsh light on Trump NASA offers to show Stephen Curry evidence from moon landings Freedom Caucus calls on leadership to include wall funding, end to 'catch and release' in funding bill MORE participated in "dubious" tax strategies in the 1990s that allowed him to accrue millions of dollars in additional wealth from his father's real estate empire, The New York Times reported Tuesday.

The newspaper reported that Trump and his siblings set up a "sham" corporation to help disguise otherwise taxable income that came from gifts from their parents.

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Trump's parents left more than $1 billion to their children, which would have resulted in a roughly $550 million tax bill at the time, The Times reported. However, the Trumps paid a total of $52.2 million on that source of income. The newspaper cited records that showed Trump helped undervalue his father's real estate holdings, which led to a lower tax bill when he and his siblings inherited the properties.

  • In total, The New York Times found that Trump received the equivalent of at least $413 million from his father's real-estate empire.
  • The Times interviewed former employees and advisers to Trump's father, and reviewed more than 100,000 pages of documents related to the Trump family business, including bank statements, financial audits and invoices.

Check out the whole stunning report here. And it's worth noting that the Times, of all papers, went there and directly accused the sitting president of perpetrating tax fraud. That's an insanely high standard to meet, which means the Times feels uniquely confident in its reporting.

Another thing to keep in mind: If Trump sues the Times for defamation, that could subject his tax returns and other financial records to discovery. That means they could end up public, which Trump has sought to avoid since launching his campaign.

What comes next: New York state tax officials have launched a review into allegations in the Times article. We'll see what that yields and how damaging it could be for Trump.

Trump lawyer denies: "The New York Times’ allegations of fraud and tax evasion are 100% false, and highly defamatory. There was no fraud or tax evasion by anyone. The facts upon which the Times bases its false allegations are extremely inaccurate," said Charles Harder, a lawyer for Trump, in a statement to the paper.

White House denies: "Fred Trump has been gone for nearly twenty years and it’s sad to witness this misleading attack against the Trump family by the failing New York Times," White House press secretary Sarah Huckabee Sanders said in a statement. " Many decades ago the IRS reviewed and signed off on these transactions. The New York Times’ and other media outlets‘ credibility with the American people is at an all time low because they are consumed with attacking the president and his family 24/7 instead of reporting the news."

 

ON TAP TOMORROW

 

LEADING THE DAY

SCOOP: Mulvaney backs CFPB official under fire for blog posts dismissing racism: The acting chief of the Consumer Financial Protection Bureau (CFPB) said Tuesday that an official under fire for blog posts dismissing racism will remain in charge of the agency's lending discrimination cases.

Acting CFPB Director Mick MulvaneyJohn (Mick) Michael MulvaneyThe Memo: Ayers decision casts harsh light on Trump Meadows looks to make his move Yankees president downplays interest in White House chief of staff job MORE told bureau employees in an email obtained by The Hill that Eric Blankenstein would not be fired or reassigned despite a growing revolt over his leadership of the bureau's office of supervision, enforcement and fair lending.

"I recognize that this is not the result that some of you may have wanted. But I stand by my decision and will proceed accordingly," Mulvaney wrote in a Tuesday evening email.

Blankenstein, director of CFPB's supervision division, admitted to writing anonymous blog posts in 2004 calling most hate crimes hoaxes and questioning whether using the n-word was inherently racist. He expressed regret for his language in a Monday email to CFPB employees, and insisted he was not racist.

 

The issue:

  • Mulvaney, who took control of the CFPB in November, hired Blankenstein to the bureau in December and elevated him to a senior position in February. Blankenstein currently oversees the CFPB's expansive supervision and prosecution of banks and lenders suspected of wrongdoing.
  • Mulvaney in February also proposed stripping the enforcement powers from the CFPB's office of fair lending and transferring them to Blankenstein's division.
  • Patrice Ficklin, director of the fair lending office, said Friday that Blankenstein could not be trusted to carry out its duties and asked Mulvaney to abandon the plan.

 

Mulvaney on Tuesday told CFPB employees that "the merits of the changes" he proposed "remain the same as they did when I announced the reorganization several months ago."

"I will not be undoing the changes," Mulvaney said. I've got more on the latest here.

 

CFPB union chief says official should be fired over racism blog posts: The union for Consumer Financial Protection Bureau (CFPB) employees has called on the agency's acting chief to ax a senior official who wrote blog posts in 2004 dismissing racism, calling him "unfit for any leadership position in the federal government."

The National Treasury Employees Union (NTEU), which also represents CFPB employees, asked Acting CFPB Director Mick Mulvaney to remove Eric Blankenstein from his senior position overseeing racial discrimination and fair lending cases in a Monday letter shared with reporters on Tuesday.

"There should be zero tolerance for comments that Blankenstein has admitted authoring and nothing else than swift and decisive action is called for," NTEU President Anthony Reardon writes in the letter.

"The frontlines employees of the Bureau have always displayed dedication to America's consumers and they deserve to have leadership that reflects and supports their work."

Gail Wisely, president of NTEU's CFPB chapter, called for Blankstein's firing in a Monday email to colleagues. She said that minority employees under him "are now working in a hostile environment which is something the union cannot tolerate."

"No one who holds his views should be in the position of enforcing fair lending practices," Wisely wrote. "It is an affront to all CFPB employees, and especially those in fair lending, as well as to the public we serve." I'll get you caught up on the latest consumer bureau chaos right here.

 

Recap:

  • Sept. 28: Top consumer bureau official blasts colleague over blog posts dismissing racism
  • Oct. 1: Consumer bureau official says he regrets blog posts dismissing racism

 

Waters proposes bill to reverse Mulvaney's moves at CFPB: Rep. Maxine WatersMaxine Moore WatersBlack Caucus huddles as talk of term limits heats up On The Money: Markets roiled by trade tensions | Rally on hopes of Fed pause on rate hikes | Senate sends two-week spending measure to Trump | Consumer bureau pick confirmed | Trade deficit at highest level since 2008 Black Caucus chairman pushes back against committee term limits MORE (D-Calif.) on Tuesday introduced a bill meant to undo many of Mulvaney's proposed and finalized changes to the structure of the CFPB. Waters' bill would:

  • Maintain the office of fair lending's full enforcement powers
  • Keep a dedicated CFPB office for student loans and young consumers
  • Mandate adequate staffing in the CFPB's enforcement and supervisory departments
  • Change the agency's official name to the "Consumer Financial Protection Bureau" from the "Bureau of Consumer Financial Protection" (which didn't matter before 2018)
  • Restrict the number of political appointees allowed at CFPB
  • Reinstate the original consumer advisory boards
  • Ensure the consumer complaint database will remain public.

 

Waters is poised to take control of the House Financial Services Committee if Democrats flip the House in November, meaning this bill or a similar version would likely see action in the lower chamber. While a GOP-controlled Senate or White House won't clear it, the bill is still a useful window into Waters' priorities for the CFPB next year.

 

The financial services industry, of course, would rather the CFPB be turned into a bipartisan commission.

"Members of Congress have taken issue with past Directors, the current Acting Director and I guarantee will complain about future Directors," said Richard Hunt, president and CEO of the Consumer Bankers Association.

"If you do not like what the Director de jour decides and want to give consumers certainty, then support the bipartisan bill before the House Financial Services Committee to create a bipartisan commission so one person no longer unilaterally decides all the rules and call all the shots."

 

GOOD TO KNOW

  • The Federal Reserve's top regulator told U.S. lawmakers on Tuesday that his "highest priority" is enacting simpler rules for banks with between $100 billion and $250 billion in assets, though Republicans pressed for a more drastic easing, Reuters reports.
  • More from Reuters: Wells Fargo has not convinced U.S. regulators it is doing enough to repay 600,000 drivers who were wrongly pushed into buying auto insurance, said Comptroller of the Currency Joseph Otting.
  • Federal Reserve Chairman Jerome Powell said Tuesday that recent federal tax cuts and spending increases could limit the U.S. government's ability to combat a future economic downturn, The Wall Street Journal reports.
  • Companies are more likely to say they're using savings from President Trump's tax cut law to boost capital investments and worker training than to raise salaries, according to a survey released Tuesday.
  • President Trump on Tuesday evening sent news clips, a two-line letter and a giant signature to the legislative directors of every member of Congress, touting the strength of the new North American trade deal completed over the weekend. 
  • Congress approved $2.4 trillion in debt during fiscal year 2018, according to an analysis published this week by the watchdog group Committee for a Responsible Federal Budget (CFRB).

 

ODDS AND ENDS