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MORNING REPORT

Friday, May 5

by Alexis Simendinger & Kristina Karisch

In spotlight: Justice Thomas ethics, Proud Boys conspiracy

Supreme Court Associate Justice Clarence Thomas remained in the spotlight Thursday while accused of failing to be upfront about financial benefits he accepted from an influential Republican billionaire, reviving questions about judicial ethics and discrepancies.

GOP donor Harlan Crow paid the private-school tuition of Thomas's relative, whom the justice raised as "a son" from childhood. Thomas did not disclose Crow's tuition payments or gifts to his family as part of financial disclosures to the high court, ProPublica reported Thursday.

The publication previously reported that Thomas for two decades accepted resort and vacation arrangements paid by Crow, who also purchased the Savannah, Ga., home in which Thomas's mother was living and two vacant residential lots.

Mark Paoletta, a longtime friend of the justice who has also served as a lawyer for the justice's wife, Ginni Thomas, acknowledged Crow's tuition payments in a statement. Thomas assumed legal custody of grand nephew Mark Martin when he was a child and Martin lived with the Thomas family in Washington for a decade. The justice enrolled his relative as a teenager at Randolph Macon Academy and Hidden Lake Academy, a Georgia boarding school. Crow paid Martin's tuition for two years, according to Paoletta.

Defending Thomas, the lawyer called the ProPublica reporting "despicable" and argued the payments "did not constitute a reportable gift" (The Hill and The New York Times).

The Hill: Conservatives accuse liberals of hypocrisy over Thomas's financial dealings, pointing to decisions about recusals and disclosures by justices appointed by Democratic presidents, including Associate Justice Sonia Sotomayor.

Senate Judiciary Committee Chairman Dick Durbin (D-Ill.), who this week held a hearing about Supreme Court ethics and tried without success to get Chief Justice John Roberts to testify, said the latest report about Crow's tuition payments benefiting Thomas and his family was discouraging.

Durbin said Thomas's "failure to disclose is aggravating the situation."

Interviewed during a Thursday episode of SiriusXM's "The Briefing with Steve Scully," the chairman said he felt "sadness to think that this situation is getting worse by the day" (The Hill).

Thomas's problems on Capitol Hill and at the high court are multiplying, reports The Hill's Al Weaver, as some members back bipartisan legislation that would tighten disclosure and ethics requirements to cover the nine justices, while experts split over whether Congress has the power to legislate such restrictions.

A jury in the nation's capital on Thursday found Henry "Enrique" Tarrio and three other members of the Proud Boys guilty of seditious conspiracy in the Jan. 6 attack on the Capitol (The Hill and The Washington Post). It's among the most consequential convictions notched by Justice Department prosecutors among more than 1,000 cases arising from the 2021 riots on a day when Congress affirmed the 2020 Electoral College tally.

The verdict against the Proud Boys members as well as the Justice Department's conviction last year of Oath Keepers militia founder Stewart Rhodes and another member of the far-right group on seditious conspiracy charges are central to the government's case that extremists did not get tugged into a riot accidentally, but instead coordinated and plotted to stop the constitutional transfer of power certified by Congress following President Biden's victory. The Justice Department is investigating how former President Trump and his associates were involved in the events before, during and after Jan. 6.

Tarrio, 29, and his associates could be sentenced up to 20 years in prison. They were charged in a 10-count indictment of conspiring to oppose by force the lawful transition of power from Trump to Biden after the election, conspiring to obstruct Congress's confirmation of the election result, and obstructing a joint session of Congress.

Defendants Tarrio, Ethan Nordean and Joseph Biggs did not testify at trial. Zachary Rehl testified that the Proud Boys' preparations were strictly for self-defense after past violence in Washington, saying "there was nothing nefarious about it," the Post reported. Dominic Pezzola, who was not convicted of seditious conspiracy, was found guilty of lesser charges including stealing a police riot shield used to smash the first window breached by the rioters.

The Hill: The Supreme Court on Thursday questioned the jurisdiction in a sweeping election law clash involving the North Carolina Supreme Court and the state's GOP-drawn voting maps.
CNN: Justice Department special counsel Jack Smith last week sat in on former Vice President Mike Pence's testimony to a federal grand jury. Smith is leading a criminal probe with a team of prosecutors into the aftermath of the 2020 election and efforts to overturn the results
The Hill: Trump will seek to move his 34-count Manhattan criminal indictment to federal court, his lawyer said on Thursday.
NBC News: Lawyers for E. Jean Carroll rested her civil case against Trump on Thursday, shortly after jurors viewed a video of the former president in a deposition confusing Carroll with his ex-wife Marla Maples. The rape trial may move to closing arguments on Monday. Trump's lawyers said Wednesday he will not testify and they will not put any defense witnesses on the stand.
The Guardian: An irate Trump, traveling in the U.K. on Thursday, said, "I'm going to go back, and I'm going to confront this woman. This woman is a disgrace and it shouldn't be allowed to happen in our country." He maintained that Carroll invented accusations dating from the 1990s. Trump's lawyer repeated that there are no plans for his client to testify.
The New York Times: Prosecutors investigating Trump's handling of classified material have issued a wave of new subpoenas and obtained the confidential cooperation of a witness who worked at Mar-a-Lago.
The Washington Post: Biden is expected to nominate Air Force Gen. Charles "CQ" Brown Jr. to be the next chairman of the Joint Chiefs of Staff, to succeed Gen. Mark Milley.

Leading the Day

➤ POLITICS

The killing of 30-year-old Jordan Neely on the New York City subway has kicked off a political firestorm. But, as The Hill's Niall Stanage writes in The Memo, rather than Republicans against Democrats, it's turning into a battle primarily between the left and center-left of the Democratic Party. Rep. Alexandria Ocasio-Cortez (D-N.Y.) has said Neely, who was homeless, died in a "murder" by the as-yet-unnamed man who put him in a chokehold. His death was ruled a homicide Thursday. Another progressive, City Comptroller Brad Landers has said that Neely was "choked to death by a vigilante without consequence."

But those comments have drawn pushback from Mayor Eric Adams, who has called them not "responsible." Meanwhile, a statement from Gov. Kathy Hochul (D) that included the assertion — aimed at the late Neely — that there are "consequences for behavior" has sparked further outrage from the left.

The Atlantic: A killing on a subway train and a country governed by fear.
The New York Times: There has been no arrest in Neely's death, and many want to know why.
USA Today: Subway chokehold death sparks outcry: "We've got a deep problem."
Curbed: "I was always in awe seeing him dance": Neely's life as a Michael Jackson impersonator.

Meanwhile, across the country, the California Reparations Task Force will vote on a series of proposals this weekend that could see descendants of slavery living in the state receive $1.2 million. In a series of documents published Monday, the task force indicated it will vote Saturday to recommend the state of California officially apologize for racism and slavery and offer "down payments" of varying amounts to eligible Black residents. The Hill's Cheyanne M. Daniels breaks down the most important parts of the proposal.

Politico: Florida Legislature votes to ban gender-affirming care for minors.
CNN: North Carolina advances likely veto-proof abortion ban to governor's desk.
The Washington Post: A map of states where abortion is legal, banned or under threat.

2024 watch: In Maryland, Rep. David Trone (D) launched a Senate campaign to succeed Sen. Ben Cardin (D), who announced this week he is not running for reelection (The New York Times). … Rep. Jamie Raskin (D-Md.) says he will "seriously investigate" over the next month whether to run for Cardin's Senate seat (The Hill). … Fired Fox News host Tucker Carlson would like to moderate an alternative televised GOP presidential primary debate with Trump and is willing to walk away from riches that Fox is contractually obligated to pay him in exchange for flexibility to have a free-agent media role in the 2024 election cycle, The Washington Post reports. … A top GOP recruit says the influence of an endorsement from Trump is overstated, according to a private recording (Politico). … Trump is looking to regain his 2016 magic by avoiding the word "Republican" (NBC News).

➤ BANKING

On Wednesday, Federal Reserve Chairman Jerome Powell told reporters that recent bank failures, liquidity issues and credit tightening will be weighed month by month by central bankers to try to assess the larger monetary repercussions tied to slaying inflation, adding, "That's really all we can do."

By Thursday, analysts and market watchers were more publicly critical of the Fed's bystander stance and its missed opportunities for bank supervision. Some lamented that the Fed's rapid hikes in interest rates, which continued Wednesday, were part of the undertow that contributed to the swamping of institutions such as Silicon Valley Bank. Those critics think Fed governors should stop raising rates, hold steady and then ease rates this summer.

The criticism is mixed with anxiety.

The Fed, government regulators and the nation's largest banks have no magic wands that can instantaneously halt a crisis of confidence when it grips depositors, investors and the complex economic web that depends on the financial system, analysts and experts said. Powell said Wednesday the Fed had been surprised in the digital age at the speed with which contagion can drain a bank's deposits, leaving it for dead — or simply drive down stock valuations based on rumors and fear.

CNBC: Americans haven't been this worried about their bank deposits since the 2008 financial crisis.
Reuters: Pressure grows for regulatory intervention as U.S. bank rout deepens.

Investors wonder how much further the problems in regional banking could spread and whether the turmoil will spill over to the broader economy (The Wall Street Journal). Some analysts said the decline in valuations for PacWest Bancorp and other banks reflect the market's tendency to view news as categorically good or bad, rather than formulating a reaction to actual conditions inside PacWest or Western Alliance, the Journal reported.

Regional bank stocks tumbled Thursday despite assurances from the Fed that the banking system is on solid footing. The continued pressure suggested how hard it might be to stop the downward spiral in regional bank stocks, regardless of how the companies may be faring. Many banks enjoyed solid profits in the first quarter, for example.

"That's where it becomes dangerous," Christopher McGratty, head of U.S. bank research at Keefe, Bruyette and Woods, told the Journal. "When they see this chain of events happen, the natural question becomes, 'am I good, am I covered?'"

Regional banks, as major lenders to businesses and families across the U.S., also tend to fall when investors are expecting a recession. Powell took a sunny view of that hazard, suggesting to reporters on Wednesday that his own assessment is more upbeat than Fed staff forecasts.

The New York Times: Small banks rush to reassure investors as shares plunge.
Barron's and Bloomberg News: PacWest stock dropped to a new low on Thursday before rebounding a bit today. First Horizon and TD Bank on Thursday called off a potential merger.
Financial Times: U.S. banks under fresh pressure as activist investor Nelson Peltz called for Washington to stem the crisis and raise the federal deposit insurance cap.

In Focus / Sharp Takes

➤ INTERNATIONAL

Ukrainian President Volodymyr Zelensky made an unannounced visit to The Hague and the International Criminal Court Thursday to proclaim that his country will win against Russia in its ongoing war and that President Vladimir Putin will face court justice. The ICC has issued an arrest warrant for Putin for alleged war crimes in Ukraine, relating to the abduction of children (The Associated Press and The Hill).

"We all want to see a different Vladimir here in The Hague, the one who deserves to be sentenced for these criminal actions right here in the capital of the international law," Zelensky said. "And I'm sure we will see that happen when we win, and we will win."

NBC News: Russia claims the U.S. is behind the alleged Ukrainian drone attack on the Kremlin. Both Kyiv and Washington strongly denied involvement in what Moscow said, without citing evidence, was an attempt to assassinate Putin.
The New York Times: The Kremlin blasts were real. The rest is hazy, maybe intentionally.
Reuters: Kremlin drone incident gives Putin a cover to deepen the Ukraine war.

The European Central Bank raised its key interest rates by 25 basis points Thursday because price pressures "remain strong." Chairwoman Christine Lagarde said high energy prices and supply bottlenecks remain factors stoking inflationary conditions experienced in April (CNBC).

Saudi Arabia: Biden national security adviser Jake Sullivan will travel there next week to meet with counterparts from the Kingdom, the United Arab Emirates and India. He'll also meet with Saudi Crown Prince Mohammed bin Salman. Secretary of State Antony Blinken will visit Saudi Arabia in June for a meeting of the Global Coalition to Defeat ISIS (Al Aribiya). The flurry of U.S. diplomatic attention is viewed as an effort to ease frosty relations over shared interests, including oil, Iran, Sudan and investments.

Fighting in Sudan continues to intensify as warring factions seek to secure strategic locations across the country. Fierce battles continued Thursday between the Sudanese Army and its paramilitary opponents, the Rapid Support Forces (RSF), and pressure is growing from international powers to end hostilities and allow humanitarian assistance to reach millions of desperate civilians.

The continuing failure of combatants to respect successive ceasefires prompted Biden to threaten new sanctions Thursday against those responsible for "threatening the peace, security, and stability of Sudan; undermining Sudan's democratic transition; using violence against civilians; or committing serious human rights abuses" (The Guardian).

"The violence taking place in Sudan is a tragedy — and it is a betrayal of the Sudanese people's clear demand for civilian government and a transition to democracy," Biden said. "It must end."

The Economist: Sudan's spiraling war, in maps.
The New York Times: How U.S. efforts to guide Sudan to democracy ended in war.
The Associated Press: King's coronation draws apathy, criticism in former colonies.
The Hill: At CPAC, Hungary's populist Prime Minister Viktor Orbán decries LGBTQ rights, migration.
The Washington Post: At least eight dead in Serbia's second mass killing in two days.

➤ CONGRESS

Senate Health Committee Chairman Bernie Sanders (I-Vt.) is stoking a divisive fight within the Democratic caucus over the minimum wage by planning to mark up a bill to raise the nation's wage floor to $17 an hour. The Hill's Alexander Bolton reports the issue may be tough-going, as eight Senate Democrats voted against raising the minimum wage to $15 in 2021. Several of them are running for reelection or pondering 2024 campaigns, including Sens. Joe Manchin (D-W.Va.), Kyrsten Sinema (I-Ariz.) and Jon Tester (D-Mont.).

For his part, Senate Majority Leader Chuck Schumer (D-N.Y.) wants to avoid a minimum wage showdown, but Sanders says he's going to push a bill "as quickly and hard as we can."

Sinema, meanwhile, is teaming up with Republican Sen. Thom Tillis (N.C.) on legislation that would grant a temporary two-year authority to expel migrants from the United States similar to what is currently allowed under the Trump-era Title 42 — a law that permits the U.S. to deny asylum and migration claims for public health reasons — which expires next week.

Department of Homeland Security Secretary Alejandro Mayorkas is at the border today ahead of the May 11 end of Title 42 (NewsNation).

The key distinction of the senators' proposal, first reported by Politico, is that it does not rely on a public health order, making it functionally different that the pandemic-era Trump program that Biden retained.

"Despite our repeated calls, the Biden administration failed to plan ahead and implement a realistic, workable plan; our legislation gives them more time to put a plan in place that will secure our border, protect Arizona communities on the frontlines of this crisis, and ensure migrants are treated fairly and humanely," Sinema, who has not announced whether she plans to seek another term, said in a statement.

The Hill: Office of Management and Budget director says a short-term debt ceiling extension is possible.
Roll Call: Who are you going to call? The Senate Finance Committee hopes not ghost networks.

EVENT INVITE:

Expanding Access to Alzheimer's Care & Treatment, May 11, 2 p.m. ET

About 1 in 9 Americans over 65 suffers from Alzheimer's disease. Unfortunately, treatment options are still limited. Why is CMS declining coverage, and where are we in terms of new treatments on the horizon? The Hill brings together Sens. Ed Markey (D-Mass.), Shelley Moore Capito (R-W.Va.); Reps. Anna Eshoo (D-Calif.), Darin LaHood (R-Ill.) and Nanette Barragan (D-Calif.); along with researchers, doctors, caregivers and patients to explore the latest treatments and roadblocks and discuss what more needs to be done.

Click Here to Register

Opinion

Yes, you should be worried about a potential bank crisis. Here's why, by Amit Seru, guest essayist, The New York Times. https://nyti.ms/3AWaRms
Profitability was the next shoe to drop at banks like PacWest, by Paul J. Davies, columnist, Bloomberg Opinion. https://bloom.bg/3B2ehE9

Where and When

📲 Ask The Hill: Share a news query tied to an expert journalist's insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

The House will convene at 11 a.m. Members are scheduled to return from a district work period on Tuesday.

The Senate meets at 9:30 a.m. in a pro forma session.

The president will receive the President's Daily Brief at 9 a.m. He will hold a Cabinet meeting in the Roosevelt Room with agency heads who are part of the administration's "Investing in America" policy agenda.

Vice President Harris at 11:45 a.m. will join Biden's "Investing in America" Cabinet meeting in the Roosevelt Room.

Treasury Secretary Janet Yellen will attend the president's "Investing in America" Cabinet meeting at 11:45 a.m.

Secretary of State Antony Blinken will speak at 9 a.m. to the American Foreign Service Association during a ceremony at the State Department. The secretary will be in Atlanta this afternoon to tour the Centers for Disease Control and Prevention's Emergency Operations Center as well as the CDC museum. Blinken will speak to the press in Atlanta at 2:55 p.m. and meet at 3:30 p.m. with staff from the Atlanta Passport Agency.

Economic indicator: The Bureau of Labor Statistics will report at 8:30 a.m. on U.S. employment in April.

The first lady is in London for the coronation of King Charles III. At 12:45 p.m. GMT, she will meet with Akshata Murty, wife of Prime Minister Rishi Sunak, at 10 Downing St. They will meet with veterans participating in a health and wellness program at 1:20 p.m. GMT, and visit a local primary school hosting a Coronation fair at 1:45 p.m. GMT. At 3 p.m. GMT, the first lady will meet with staff and families at the U.S. Embassy, before attending a reception at Buckingham Palace at 5 p.m. GMT.

Second gentleman Doug Emhoff at 10 a.m. will host a traditional Buddhist candle-lighting ceremony with guests from schools of Buddhism who will deliver blessings at the Eisenhower Executive Office Building as part of a Vesak celebration, a traditional holiday.

Elsewhere

➤ HEALTH & WELLBEING

Though the spread of COVID-19 has been slowing, the virus remained the fourth leading cause of death for Americans in 2022. Among nearly 3.3 million fatalities reported to the Centers for Disease Control and Prevention's National Center for Health Statistics in 2022, COVID-19 was the underlying cause listed on 186,702 death certificates, substantially down from 416,893 in 2021. The virus now ranks behind heart disease, cancer, and unintentional injuries — a category largely driven by drug overdoses. The death rate from the virus remained the worst last year among people who are Black or are American Indian or Alaska Native (CBS News).

"If it was a really bad, huge surge, maybe there would have been a change," said Farida Ahmad, the mortality surveillance lead for NCHS and an author of the report. "But COVID deaths, after last February or March, really kind of changed. And a lot of the characteristics of those deaths changed."

The Washington Post: What the May 11 end of the COVID-19 public health emergency means for you.
The Atlantic: Do drug overdoses look different now?
The New York Times: The longer a person's telomeres — chains of short, repeated segments of DNA — the greater the risk of cancer and other disorders, challenging a popular hypothesis about the chromosomal roots of vitality, researchers found.
The Hill: Health and Human Services Secretary Xavier Becerra on Thursday declared U.S. gun violence a "public health crisis."

➤ ROYAL MANIA

👑 King Charles III will celebrate his official coronation at Westminster Abbey on Saturday. Representing the United States, first lady Jill Biden is leading a delegation.

But let's focus for a minute on how Charles's subjects and royal watchers are celebrating. It apparently involves an estimated $306 million in swag, memorabilia, trinkets, collectibles, keepsakes and a good deal of royal crafting. Brilliant.

If you want a one-stop shop for everything coronation, People magazine has rounded up a gift guide of items that can be shipped across the pond. The Telegraph has written the local counterpart, which features everything from commemorative medals to special stamps and a spirits decanter.

Some are going a bit more niche with their souvenirs: Imran Haq, a surgeon in Sheffield, England, designs commemorative cereal boxes. The boxes of his "Coronation Flakes" feature a cartoon of the king on the front, along with the tagline: "They taste royally good." On the back, there are puzzles and a cutout mask of his majesty's face.

Others, including Janet Crinion, a retired nurse in Cloughey, Northern Ireland, are turning to wool. Crinion sells her knits on Etsy, where she has listed various tea cozies, including styles depicting Charles, ahead of the coronation (The New York Times). And then there are the Hurst Hookers, a group of "yarn bombers" from Hurst, a village west of London. The phenomenon describes guerrilla knitters and crochet enthusiasts who celebrate holidays and royal occasions by covering the country's iconic red post boxes and other public spaces with their handiwork.

The Hurst Hookers decorated their local town with woolen likenesses of Charles, wearing a crown and a cape fashioned from an old Christmas stocking, and Camilla, with a flash of unruly blond hair, the Archbishop of Canterbury and finally, the red-coated guardsmen (The Associated Press).

👉 For royally minded Morning Report readers, CBS (and many news outlets) will cover the event live starting at 5 a.m. ET tomorrow; HERE is a schedule of events and tips about how to watch.

The Closer

And finally … 👏👏👏 Bravo to this week's Morning Report Quiz winners! 🐾 We asked for smart guesses about presidential pets and readers delivered.

Here are champion puzzlers who went 4/4 with some White House trivia: Mary Anne McEnery, Bob McLellan, Patrick Kavanagh, Paul Harris, Bill Grieshober, Jeff Steindorf, Harry Strulovici, Ki Harvey, Amanda Fisher, Pam Manges, Jaina Mehta, Vicki Hurwitz, Jose Ramos, Steve James, Robert Bradley, Lori Benso and Luther Berg.

They knew that James K. Polk, Andrew Johnson and Donald Trump did not have pets while serving as president, which means "all of the above" was the correct answer.

President Calvin Coolidge kept an eclectic mix of "pets" (cared for in and out of the White House residence), including a raccoon, a bobcat, a pygmy hippopotamus, a wallaby and a black bear.

The Marquis de Lafayette gave President John Quincy Adams an alligator, which resided for months in an unfinished East Room bathroom, according to legend.

The Bidens adopted tabby cat Willow as a White House newcomer after she jumped on stage at a 2020 campaign event in Pennsylvania. 🐈