Overnight Regulation: SEC chief grilled over hack | Dems urge Labor chief to keep Obama overtime rule | Russia threatens Facebook over data storage law

Overnight Regulation: SEC chief grilled over hack | Dems urge Labor chief to keep Obama overtime rule | Russia threatens Facebook over data storage law
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Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It's Tuesdays evening here in Washington where Republicans have decided not to vote on their latest ObamaCare repeal legislation. Read about it here.

 

THE BIG STORY 

Securities and Exchange Commission Chairman Jay Clayton told members of the Senate Banking Committee Tuesday that it will take a "substantial" amount of time to uncover the full scope of the 2016 cybersecurity breach that may have allowed hackers to profit from insider trading. 

As Sylvan Lane reports, lawmakers wanted to know why it took the SEC more than a year to realize and reveal the breach of the agency's electronic filing system where publicly traded companies make private and public financial disclosures. 

"We understand the breach happened under your predecessor, but the disclosure -- or lack thereof -- is all yours," Sen. Sherrod BrownSherrod Campbell BrownElection Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls Overnight Health Care: Senators target surprise medical bills | Group looks to allow Medicaid funds for substance abuse programs | FDA launches anti-vaping campaign for teens Bipartisan group wants to lift Medicaid restriction on substance abuse treatment MORE (Ohio), the committee's ranking Democrat, said. 

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"How can you expect companies to do the right thing when your agency is not?"

Clayton did not reveal who was behind the attack, which companies were targeted and what effect it had on markets. 

He said that the SEC still has much to discover about the breach and its potential impact, much of which won't be made public.

"Our review and investigation of these matters, however, as well as the extent and impact of the intrusion and related illicit activity, is ongoing and may take substantial time to complete," Clayton said.

Read the full story here

 

REG ROUNDUP 

Labor: Congressional Democrats are urging Labor Secretary Alexander AcostaRene (Alex) Alexander AcostaHow private sector can fight opioid epidemic Federal mine safety official accused Trump of illegally putting miners in danger Here are the administration officials who have denied they wrote the anonymous NYT op-ed MORE to maintain the salary limit set under the Obama administration when it rewrites the department's overtime rule. 

In a letter Monday led by Rep. Bobby ScottRobert (Bobby) Cortez ScottHealthy business vs healthy people — how will this administration address the two? Washington turns focus to child nutrition The Hill's Morning Report — Sponsored by Better Medicare Alliance — McConnell warns of GOP `knife fight’ to keep Senate control MORE (D-Va.) and Sen. Patty MurrayPatricia (Patty) Lynn MurrayJudiciary Democrat calls for additional witnesses to testify on Kavanaugh Kavanaugh allegations set stage for Anita Hill sequel Time for action to improve government data analysis MORE (D-Wash), more than 80 Democrats said the $47,476 a year salary threshold would make one-third of full-time, salaried workers eligible for overtime pay. 

Earlier this month, the Department of Justice dropped the appeal it filed in December to defend the rule after it was blocked by a lower court. Days earlier, a federal judge in Texas struck down the rule, claiming the administration had focused too heavily on employee pay instead of job duties. 

The Labor Department put out a request for public comment in July on whether the salary level set by the 2016 was reasonable or should be lowered, signaling plans to overhaul the regulation.

Comments were due on Monday. 

Industry groups have long claimed the increase from the current cutoff, which now stands at $23,660, was too much too fast. 

In comments to the agency, the National Restaurant Association said the minimum salary threshold should be $32,000.

Read the Democrats' letter here.

 

Tech: Russia is threatening to block Facebook unless the company complies with the country's data storage laws, according to reports Tuesday.

A law requires data on the country's citizens be stored on Russian servers.

"The law is mandatory for everyone, and therefore there is no doubt -- in any case, we will either achieve the law to be implemented, or the company will stop working in Russia, as, unfortunately, happened with LinkedIn," said Alexander Zharov, the head of the Federal Service for Supervision in the Sphere of Telecom, Information Technology, and Mass Communications, known in Russia as Roskomnadzor.

"There are no exceptions," he added.

Ali Breland has the story here

 

Energy: California regulators are exploring ways to eventually ban the sale of vehicles powered by internal-combustion engines, a top official told Bloomberg News.

California Air Resources Board Chair Mary Nichols said the state, led by Democratic Gov. Jerry Brown, is interested in following the example set by China, which said earlier this month that it would move toward banning internal-combustion engines in the country.

"I've gotten messages from the governor asking, 'Why haven't we done something already?'" Nichols said, adding that any potential ban would be a decade or more away.

"The governor has certainly indicated an interest in why China can do this and not California."

Chinese officials said this month that they would try to end the sale of polluting vehicles by 2030. France and the United Kingdom are aiming to institute similar bans by 2040.

A similar ban in California would likely garner opposition from automakers and even federal regulators.

Devin Henry has the story here.

 

Energy: Two Senate Democrats are seeking more information on mine safety violations at a company owned by President Trump's nominee to head the Mine Safety and Health Administration (MSHA).

David Zatezalo was an executive at coal-mining company Rhino Resources from 2007 to 2014, a time when the company frequently clashed with the MSHA.

During that time, the company received two rare "pattern of violations" letters from the regulator, a miner was killed in a company mine, the MSHA fined and cited the company. The agency also sought a court injunction after employees allegedly gave colleagues advance notice of inspections, according to the Charleston Gazette-Mail.

Zatezalo has since retired from Rhino and Trump nominated him earlier this month to lead the agency, alarming Sens. Sheldon WhitehouseSheldon WhitehouseSenate Dems sue Archives to try to force release of Kavanaugh documents Dems call on Senate to postpone Kavanaugh vote Dems play waiting game with Collins and Murkowski MORE (D-R.I.) and Bob CaseyRobert (Bob) Patrick CaseyObama to hit campaign trail in Pa. for gubernatorial, Senate candidates Trump is wrong, Dems are fighting to save Medicare and Social Security Five biggest surprises in midterm fight MORE Jr. (D-Pa.).

They sent a letter late Monday to MSHA, a part of the Labor Department, seeking more information about Rhino's record under Zatezalo.

Timothy Cama has more here.

 

Environment: The Environmental Protection Agency (EPA) is spending nearly $25,000 to build a soundproof phone booth for Administrator Scott PruittEdward (Scott) Scott PruittGovernment watchdog probing EPA’s handling of Hurricane Harvey response Wheeler won’t stop America’s addiction to fossil fuels Overnight Energy: Trump rolls back methane pollution rule | EPA watchdog to step down | China puts tariffs on US gas MORE.

The Washington Post reported Tuesday that the agency entered into a $24,570 contract last month for a "privacy booth for the administrator" with Acoustical Solutions, a company that specializes in sound-dampening technology for hearing tests.

EPA spokeswoman Liz Bowman told the Post that the booth will be "a secured communication area in the administrator's office so secured calls can be received and made."

"Federal agencies need to have one of these so that secured communications, not subject to hacking from the outside, can be held," she continued. "It's called a Sensitive Compartmented Information Facility (SCIF). This is something which a number, if not all, Cabinet offices have and EPA needs to have updated."

The EPA already has a SCIF in a separate area of the building, the Post reported, and it's unclear if Pruitt believes that it is out of date or somehow insufficient.

Timothy Cama has the details.

 

Tech: Google will create a separate unit for its comparison shopping tool to satisfy European Union regulators who hit the tech giant with a $2.8 billion antitrust fine this summer, Bloomberg reports.

According to the report, the comparison shopping service will still be a part of Google but will be housed in a new department apart from the company's internet search business. The unit will be required to bid against rival services for top spots in Google's search results.

Google's comparison shopping service will be run separately and the company won't be allowed to subsidize its bids for search result placement.

The EU fined Google in June for favoring its own comparison shopping service in search algorithms. Authorities gave the company a Sept. 28 deadline to change their practices to give competitors a level playing field.

Harper Neidig explains here.

 

Finance: The Trump administration on Tuesday hit North Korea with fresh sanctions.

The sanctions target eight banks in the country and 26 North Korean nationals operating out of China, Russia, Libya and the United Arab Emirates.

"This further advances our strategy to fully isolate North Korea in order to achieve our broader objectives of a peaceful and denuclearized Korean peninsula," Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump announces tariffs on 0B in Chinese goods Trump: China tariff announcement to come Monday afternoon Trump could hit China with tariffs of 0 billion as soon as Monday MORE said in a statement. "This action is also consistent with UN Security Council Resolutions."

The new sanctions come a day after North Korea's foreign minister said a tweet by President Trump saying that the North "won't be around much longer" amounted to a declaration of war. The minister threatened to shoot down U.S. aircraft in international airspace.

The White House rejected the notion the U.S. has declared war, calling the claim "absurd."

Sylvan Lane has the story here.

  

Free speech: Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsTrump attack on Sessions may point to his departure Hillicon Valley: Trump's exclusive interview with Hill.TV | Trump, intel officials clash over Russia docs | EU investigating Amazon | Military gets new cyber authority | Flynn sentencing sparks new questions about Mueller probe Sessions in Chicago: If you want more shootings, listen to ACLU, Antifa, Black Lives Matter MORE's remarks on the First Amendment were met with protests at Georgetown University's law school on Tuesday, with students and faculty criticizing the event for being announced late and difficult to get into.

Ravan Austin, a second-year law student, was among the more than 100 students protesting on the steps of McDonough Hall while Sessions spoke in the basement auditorium.

She claimed the student body wasn't notified of the event, which was coordinated by the school's Center for the Constitution, until Monday morning and that only select groups were invited to the speech.  

Some students claimed they had been disinvited, The Washington Post reported. 

"How can you hold an event for free speech and curate who you want in the audience?" Austin asked. 

Randy Barnett, a law professor and director of the Georgetown Center for the Constitution, said those students who claimed to be disinvited were never invited to begin with. 

"People RSVP'd or they got access to the RSVP link on a Facebook page, but they were never on the invitation list," he said.

Read the full story here

 

IN OTHER NEWS 

 

College basketball coaches charged with accepting bribes in federal corruption case - The Washington Post  

Saudi women just won the right to drive – Vox 

Netflix is offering its bandwidth technology to airlines – USA Today 

 

Got a tip? Send it to your Overnight host at lwheeler@thehill.com and follow her on Twitter @wheelerlydia.