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The case towards Tom Barrack may draw categorized materials into courtroom

The case against Tom Barrack could draw classified material into court

Tom Barrack, chairman of Colony NorthStar Inc., speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, the United States, on Tuesday, May 1, 2018.

Patrick T. Fallon | Bloomberg | Getty Images

WASHINGTON – Tom Barrack’s attorneys have a big job given the volume and specificity of the evidence in the 45-page federal indictment filed against him last week.

Prosecutors allege that Barrack secretly took orders from the United Arab Emirates government and used his status as Trump’s informal White House advisor on Middle East strategy to enforce policies told by Emirati officials.

In a case where a co-defendant worked for the United Arab Emirates’ intelligence agency, and a sensitive issue like U.S. Middle East politics, experts say there could be several interesting avenues for defense.

For example, if Barrack’s lawyers argue that the White House knew he was working for the United Arab Emirates, the conversations Barrack had with US officials telling them who he worked for could contain classified information.

If so, chances are Barrack’s defenders are using a legal defense tactic called Graymail.

Graymail happens when the defense threatens to divulge government secret information during a trial in hopes of forcing the government to drop the case instead of risking disclosing potentially harmful state secrets.

Barrack’s lawyers did not respond to questions from CNBC about their strategy.

“It is entirely possible that the defense is threatening to divulge classified information in order to produce evidence [Barrack] did not act without the knowledge of anyone, “said a former top national security official who was granted anonymity to discuss how classified information is used.

To prevent defense lawyers from using graymail in national security cases, prosecutors typically tailor their strategy to avoid making classified information a relevant or necessary part of the defense.

Barrack, a longtime ally of former President Donald Trump, was charged along with Rashid Sultan Rashid Al Malik Alshahhi, an Emirati citizen with close ties to the royal family, and Matthew Grimes, a junior employee at Colony Capital, which founded Barrack.

Grimes and Barrack have pleaded not guilty. Al Malik is still at large.

Thomas Barrack, a billionaire friend of Donald Trump who ran the former President’s Inaugural Fund, stands next to his co-defendant and former employee Matthew Grimes and attorney Matt Herrington during their indictment at the Brooklyn Federal Courthouse in Brooklyn, New York, United States. July 26, 2021 in this court sketch.

Jane Rosenberg | Reuters

Odd timeline

The desire to avoid classified information could help explain a strange element of the formal indictment against Barrack: the timeline.

It appears to be carefully designed to keep suspected crimes within a certain time frame from April 2016 to October 2017.

After 18 months of almost constant communication between the three defendants, the last contact in the indictment was a text message on October 11, 2017.

The news suggests that at this point the three co-defendants were stepping up their efforts to influence the US response to a UAE-Saudi-led blockade of Qatar.

But whether Barrack and his co-defendants succeeded may never be publicly known, as the indictment ends abruptly with the October 11 news.

“It seems like they have some evidence afterward that they don’t want to surface because it may be relevant to these charges,” said the former National Security official.

According to the public prosecutor’s office, the entire conspiracy lasted two years, from April 2016 to April 2018.

However, the indictment does not describe what happened in the six months between October 2017 and April 2018.

However, even with careful planning by the prosecutor, there are still several defense strategies that could draw on classified information while staying within the current time window.

Back channels

Barrack’s attorneys could argue that he did not break the law prohibiting acting as a foreign agent in the United States without registering with the Justice Department because people in the Trump administration could know he was acting on orders from the UAE.

As Trump’s top campaign bundle and chairman of his founding committee, Barrack had access to key players in US Middle East politics. In the west wing, this was spearheaded by Trump’s son-in-law, Jared Kushner.

“Given Jared Kushner’s involvement in these and other high-level issues, it’s hard to believe that there was no conversation between Barrack and some people at that level about what he heard from the Emiratis,” said the former national Security guard.

If Barrack discussed his work on behalf of the United Arab Emirates with senior White House officials, his lawyers could argue that while Barrack did not officially register as an agent of the UAE as required by law, it was disclosed in a practical manner Has.

A spokesman for Kushner did not respond to questions about whether the two men had ever spoken about Barrack’s work.

However, the Trump administration’s preference to conduct foreign policy through informal back channels is well documented.

“I think the Trump administration has created new norms for communicating through the back rather than transparent and official channels,” said Michael Atkinson, inspector general of the intelligence community for 2018-20.

“We saw it with Russia and Ukraine, and there were allegations that it was done with China.”

Shortly after Trump’s election in 2016, Kushner tried to open a return channel for Trump to communicate privately with Russian President Vladimir Putin.

A few months later, Kushner worked privately with China’s ambassador to arrange a summit meeting for Trump and Chinese President Xi Jinping at Trump’s Palm Beach Resort.

In 2019, Trump was charged with pressuring the President of Ukraine to open a mock investigation into Trump’s political rival, then-candidate Joe Biden.

The proliferation of these unofficial channels made it difficult to know exactly what the Trump administration was saying to allies and opponents overseas at all times.

But that confusion could feed into another possible defense strategy for Barrack, said Atkinson, now a partner at Crowell & Moring.

Barrack’s attorneys “could argue that it did no harm because the interests of the United States and the United Arab Emirates coincide on these matters. So no harm, no foul,” he said.

“You might even try to argue that what these defendants did was in the best interests of the United States,” he said.

This is the argument Al Malik’s attorney Bill Coffield made to The Intercept in 2019. Coffield denied that his client was a spy but declined to answer specific questions.

Al Malik “is a businessman who loves the United Arab Emirates and the US,” Coffield said at the time. “He has openly shared his belief that the best way to forge stronger bonds is through economic prosperity.”

However, Atkinson is skeptical that this defense would work.

“This is not a viable defense under the law,” he said.

“Even in cases where the United States and a foreign country are pursuing the same goals, the government does not want people to sit in such meetings and not know that they are at the behest or direction of a foreign government.”

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Biden Visits Pennsylvania to Promote Infrastructure Plan

Biden Visits Pennsylvania to Promote Infrastructure Plan

President Biden traveled to Lehigh Valley, Pa., to bolster support for his infrastructure package on the day of a critical breakthrough with Republicans on the Hill, who said they had resolved the biggest sticking points to a final agreement on a far-reaching infrastructure plan, and planned to vote to allow the package to advance.

After touring a plant that produces Mack trucks, Mr. Biden underscored the importance of American manufacturing and unveiled a new proposal to support domestic production by increasing the amount of U.S.-made products purchased by the federal government.

“In recent years, ‘Buy America’ has become a hollow promise,” Mr. Biden said. “My administration is going to make ‘Buy America’ a reality, and I’m putting the weight of the federal government behind that commitment.”

Standing in front of two Mack trucks and an oversized American flag, Mr. Biden said he was making the biggest enforcement changes in the “Buy America” law in 70 years, with the goal of funneling tens of billions of dollars into jobs in communities like Allentown.

The federal government procures about $600 billion of goods a year, including everything from helicopter blades to office furniture, according to the Office of Management and Budget. Mr. Biden announced on Wednesday that he was changing the “Buy American” rules related to purchases made with taxpayer dollars. The plan is to increase the percentage of component parts that need to be manufactured domestically from 55 percent to 60 percent, with a graduated increase to 75 percent.

“55 percent is not high enough,” Mr. Biden said, referring to the domestic content of products provided by contractors. “We got a new sheriff in town.”

He added: “if American companies know we’re going to be buying from them, they’re going to be more inclined to hire and make key investments in the future in their companies.”

Mr. Biden’s efforts to promote the economy and his infrastructure plan, however, came alongside concerning new data about the spread of the highly infectious Delta variant, and the possibility of variants to come. Anxiety about the pandemic has begun to rise again, and Mr. Biden was expected to announce on Thursday that civilian federal workers will be required to get vaccinated or get weekly tests.

Wearing a mask for part of his trip, Mr. Biden brushed aside reporters’ questions about the possibility of imposing vaccination requirements.

On Tuesday, the Centers for Disease Control and Prevention called for universal masking in schools and told vaccinated Americans that they should begin wearing masks again in the many counties in the country where the virus is surging. At the same time, officials in Congress and the White House reinstituted indoor mask requirements for staff to counter the surge.

The return to masking in the West Wing came just over two months after Mr. Biden and senior officials shed their face masks, in the biggest sign of a triumphant return toward normalcy since he took office.

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Biden would require federal staff to get the Covid vaccine or undergo testing

Biden will require federal workers to get the Covid vaccine or submit to testing

President Joe Biden is expected to announce this week that his government will vaccinate federal employees against the coronavirus or undergo rigorous testing, NBC News reported Wednesday.

Biden will give a speech on Thursday to reveal the new rules following a review of the White House’s internal guidelines, two government officials told NBC. It is unclear when the changes will take effect.

Biden is also expected to announce new moves by his administration to increase the U.S. vaccination rate, which has slowed significantly in recent months and has fallen below the White House’s earlier targets, NBC reported.

The new measures come as the highly transmissible Delta variant spreads around the world, including the United States, where it represents a large proportion of new infections.

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Public health officials warn the US could face another surge in cases this fall. They also point out that the overwhelming majority of people hospitalized or killed by Covid are unvaccinated and that “breakthrough infections” tend to be milder among those vaccinated.

In preparation, the Centers for Disease Control and Prevention reversed their guidelines on wearing masks indoors on Tuesday. The CDC now recommends that fully vaccinated people and children wear masks indoors again in places with high Covid transmission rates and in schools.

On the same day, Biden said it was “being considered” whether the White House would require vaccination of all federal employees.

A government agency has already taken the plunge. On Monday, the Department of Veterans Affairs announced that it would order its health care workers to get vaccinated. VA Secretary Denis McDonough said it was “the best way to protect veterans”.

Biden also endorsed the CDC’s latest mask guidelines. And on Tuesday night, the White House Bureau of Management and Household Budget announced federal agencies that they must mandate masks for employees in all federal buildings in high-transmission areas, according to NBC.

The White House did not have to make a decision on compulsory vaccination until Tuesday night.

A source familiar with the considerations told CNBC at the time that a system of “vaccination certification” – which requires federal employees to confirm their vaccination status or follow safety measures such as wearing masks and regular tests – is “an option” under strong consideration. “

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Key Republicans Say They’re Able to Take Up an Infrastructure Deal

Key Republicans Say They're Ready to Take Up an Infrastructure Deal

The new agreement would save $50 billion by delaying a Medicare rebate rule passed under President Donald J. Trump and raise nearly $30 billion by applying tax information reporting requirements to cryptocurrency. It also proposes to recoup $50 billion in fraudulently paid unemployment benefits during the pandemic.

Republicans blocked the Senate from moving ahead with the plan last week, saying that too many issues remained unresolved. Mr. Portman’s comments and those of other Republicans in the group, who spoke after meeting with Senator Mitch McConnell of Kentucky, the minority leader, suggested that they would now allow it to move forward.

It remained unclear whether enough Republicans would join the five core negotiators in advancing the measure, although a handful of G.O.P. senators outside the group signaled that they would be open to doing so.

“It’s not perfect but it’s, I think, in a good place,” said Senator Thom Tillis, Republican of North Carolina, who said he would vote in favor of taking it up.

Some Senate Democrats, including at least one key committee chairman, said they were still reviewing the plan before deciding whether to support it.

But Senator Chuck Schumer, Democrat of New York, said he believed “we have the votes.”

If they do, Democrats would still have to maneuver the bill through the evenly divided Senate over a Republican filibuster, which will require the support of all 50 Democrats and independents and at least 10 Republicans. That could take at least a week, particularly if Republicans opposed to it opt to slow the process. Should the measure clear the Senate, it will also have to pass the House, where some liberal Democrats have balked at the emerging details.

The five Republicans who have spearheaded the deal with Democrats — Mr. Portman and Senators Susan Collins of Maine, Lisa Murkowski of Alaska, Bill Cassidy of Louisiana and Mitt Romney of Utah — urged their colleagues to support a measure they said would provide badly needed funding for infrastructure projects across the country.

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Schumer says Senate may vote to advance bipartisan invoice

Schumer says Senate could vote to advance bipartisan bill

Senate Majority Leader Chuck Schumer (D-NY) speaks after the Democratic policy luncheon on Capitol Hill in Washington, U.S., July 27, 2021.

Joshua Roberts | Reuters

The Senate could vote as soon as Wednesday to advance the bipartisan infrastructure bill, Majority Leader Chuck Schumer said.

“Senators continue to make good progress on both tracks of legislation,” the New York Democrat said, referencing both the physical infrastructure proposal and Democrats’ separate plan to invest $3.5 trillion in social programs.

Schumer’s comments signal progress toward a final agreement on infrastructure legislation after disputes over issues including transit funding prevented a deal for days. The wrangling threatened to derail a core piece of President Joe Biden’s agenda.

A spokesman for Sen. Rob Portman of Ohio, the lead Republican negotiating the deal, did not immediately respond to a request to comment on how close the lawmakers are to agreement.

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The plan is expected to invest $579 billion in new money in transportation, broadband and utilities.

Schumer failed last week to start debate on the bipartisan plan. The Republican senators working on the bill with Democrats and the White House voted against advancing it as they tried to iron out disagreements.

The Democratic leader aims to pass the bipartisan plan and a budget resolution that would kickstart his party’s legislation before the Senate leaves Washington for its recess next month. Using budget reconciliation, Democrats can pass their bill without a Republican vote.

The bipartisan plan would need 60 votes to pass. It means at least 10 Republicans would have to back it if all Democrats sign off, or one more GOP senator would have to vote for it for every Democratic defection.

The vote to advance the bill would start a heavy lift for Democratic congressional leaders. They have to keep disparate wings of their party on board with both plans while navigating efforts by some Republicans to sink them.

House Speaker Nancy Pelosi, D-Calif., has stressed she will not take up either measure until the Senate passes both of them.

Democrats’ $3.5 trillion plan is expected to invest in child care, education, health care and efforts to curb climate change.

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L.G.B.T.Q. Elected Officers in U.S. Quantity Practically 1,000, Rising Quick

L.G.B.T.Q. Elected Officials in U.S. Number Nearly 1,000, Rising Fast

The number of elected gay, lesbian, bisexual and transgender officials has continued to rise, growing by about 17 percent last year to nearly 1,000 nationwide – more than double what it was four years ago, according to a new annual report.

Their ranks now include two governors, two U.S. senators, nine congressmen, 189 lawmakers, and 56 mayors, according to the report from the LGBTQ Victory Institute, which trains candidates for public office. In total, the group identified 986 elected LGBTQ officials.

“There are more LGBTQ people who take the plunge and choose to run for office,” said Annise Parker, president and chief executive officer of the institute. The 2010-2016 Mayoress of Houston, Ms. Parker, was one of the first openly gay mayors of a major American city.

This is the fifth year the institute has polled the nation, and the total representation of LGBTQ in elected offices has risen to 986 today, from 843 in 2020, 698 in 2019 and 448 in 2017, out of roughly half a million electoral positions .

Of all racial groups, elected Black LGBTQ officials grew the fastest over the past year, with a 75 percent increase in representation, the report said. The number of elected LGBTQ officials from various races rose 40 percent.

The institute prosecutes federal officials, state-wide civil servants, state legislators as well as local and judicial officials. Every state except Mississippi now has at least one elected incumbent who identifies as LGBTQ, the report said.

Ms. Parker said LGBTQ candidates could win across America now, citing Mauree Turner, who was elected to the state MP in Oklahoma last year and is black, Muslim and non-binary.

“The right candidate with the right message can be chosen anywhere,” said Ms. Parker. However, she said bias and discrimination continue to be of concern, especially against transgender candidates.

The partisan divide is one-sided: 73 percent of LGBTQ officials are Democrats and less than 3 percent are Republicans, according to the institute.

“There are more trans-elected officials than Republican elected officials,” Ms. Parker said.

She said former President Donald J. Trump was “probably the best Democratic recruiter you can have,” suggesting that general anti-Trump Democratic zeal fueled the rise in LGBTQ candidates win the office.

As of 2021, there will be at least one elected transgender officer in 23 states, according to the report. The surge in transgender representation last year came entirely from elected transgender women, who grew 71 percent from 21 to 36; there was no growth in the number of transgender men, which remained constant at five.

Ms. Parker said a key goal is to “fill the pipeline” of LGBTQ candidates from local to high office so that there is “a pool of potential presidential candidates from our community” in the future.

She praised Pete Buttigieg, the former mayor of South Bend, Indiana, who ran for president in 2020 and is now federal minister of transportation. But she said she hoped LGBTQ officials would continue to climb the ranks to become governors and senators – traditionally more realistic launch pads for a White House run than small town mayor’s office.

For the time being, however, town halls will remain one of the few political arenas in which LGBTQ officials are fairly represented by six mayors among the top 100 cities based on their proportion of the population. The most prominent is Mayor Lori Lightfoot of Chicago.

Despite the rapid growth, the institute estimates that LGBTQ individuals still make up 0.19 percent of the country’s elected officials, compared to an estimated 5.6 percent of the population.

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Biden will put on masks indoors, calls on U.S. to do the identical

Biden to sign $1.9 trillion relief bill

WASHINGTON – President Joe Biden and White House officials will resume wearing masks indoors when traveling to parts of the nation with high rates of covid transmission, according to updated guidelines from the Centers for Disease Control and Prevention, which include full Vaccinated individuals are encouraged to put face covers on in vulnerable areas.

“I hope all Americans living in the areas covered by the CDC guidelines will follow them; I will definitely do it when I travel to these areas, ”Biden said in a statement after the CDC issued its guidelines.

The CDC on Tuesday recommended that fully vaccinated people wear masks indoors in public places as new data shows that vaccinated people – although well protected from serious illness – can still transmit the virus to people who are sometimes not vaccinated.

“In areas of significant and high transmission, CDC recommends that fully vaccinated individuals wear masks in public, indoors, to prevent the spread of the Delta variant and to protect others. This includes schools, ”said CDC director Rochelle Walensky.

The CDC also recommended that everyone in elementary schools wear masks indoors “including teachers, staff, students and visitors regardless of vaccination status.”

Two months ago, the CDC announced to fully vaccinated people that they would no longer need to wear masks in most environments, and the White House had dubbed July 4 a “Summer of Freedom” to see progress in the fight against the Celebrating Virus.

However, the highly transmissible Delta variant has since developed into the dominant strain, which has led to a nationwide increase in infections, especially in areas with low vaccination rates. After great strides in its vaccination campaign in winter and spring, the Biden government struggled to increase vaccination rates in summer.

According to a CNBC analysis of Johns Hopkins University data, the weekly average of daily new Covid infections in the US is more than 57,000, a 65% increase from the previous week. On July 5, the seven-day average of the country’s daily new infections was just below 12,000.

In his statement on Tuesday, Biden encouraged Americans to get vaccinated.

“Today’s announcement also makes it clear that the most important protection we have against the Delta variant is vaccination. While most US adults are vaccinated, too many aren’t. Although we have seen an increase in vaccinations over the past few days, we still have to do better, ”said the President.

Biden told reporters that his government is also considering whether to give federal employees the Covid-19 vaccine, a move that comes a day after the Department of Veterans Affairs implemented such a mandate.

“That is being considered right now,” Biden said, adding that unvaccinated people are contributing to the ongoing pandemic.

“If those other 100 million people were vaccinated, we would be in a completely different world. So get vaccinated, ”said the President.

White House press secretary Jen Psaki told reporters that on Tuesday morning, Dr. Anthony Fauci, the government’s medical advisor for the coronavirus, has been briefed on the CDC’s updated guidance.

“We will of course adhere to every aspect of the CDC guidelines on masking that they are providing this afternoon,” Psaki said during a press conference.

“That means we will be ready to wear masks again if necessary,” she said.

When asked if the White House was disappointed with CDC guidelines, Psaki noted the severity of the nascent Delta variant.

“We are all dealing with an evolving virus for which there is no playbook or historical precedent,” said Psaki. “The American people should feel confident that we will continue to be guided by science and look at public health data to provide new guidance.”

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U.S. Declines to Defend Trump Ally in Lawsuit Over Jan. 6 Riot

U.S. Declines to Defend Trump Ally in Lawsuit Over Jan. 6 Riot

WASHINGTON – The Justice Department declined Tuesday to defend a congressional ally of former President Donald J. Trump in a lawsuit accusing both of them of rallying supporters in the hours leading up to the January 6 storm of the Capitol to have instigated.

Law enforcement officials determined that Alabama Republican Representative Mo Brooks, in an incendiary speech shortly before the attack, acted outside his mandate, according to a court file. Mr. Brooks had asked the Department to confirm that he was acting as a government employee during the rally; Had they agreed to defend him, he would have been dismissed from the lawsuit and the United States would have been represented as a defendant.

“The records indicate that Brooks ‘appearance at the January 6 rally was campaign activity and it is not part of the United States’ business to choose between candidates in the federal election,” the Justice Department wrote.

“Members of Congress are subject to a variety of restrictions that carefully distinguish between their official functions on the one hand and campaign functions on the other.”

The Justice Department’s decision shows that it is also likely to refuse to provide legal protection to Mr Trump in the lawsuit. Legal experts have been closely monitoring the case because the Biden Justice Department continued to fight to grant immunity to Mr Trump in a 2019 defamation lawsuit in which he denied allegations of raping writer E. Jean Carroll and said he accused her him to attract attention.

Such substitution provides full protection for government officials and is generally reserved for government employees who are being sued for acts arising out of their work. In the Carroll case, the Department cited other defamation lawsuits as precedent.

The Brooks decision also contradicted the Justice Department’s long-standing broad view of actions taken in the context of the employment of a federal employee, which has made it difficult to use the courts to hold government employees accountable for wrongdoing.

House attorneys also said Tuesday that they refused to defend Mr. Brooks on the lawsuit. Since it “does not question institutional actions by the House of Representatives,” a House attorney wrote in a court filing, “it is not appropriate for it to participate in the lawsuit.”

The Justice Department and the House filed their pleadings Tuesday, the deadline set by Judge Amit P. Mehta of the District Court for the District of Columbia. The lawsuit, filed in March by Rep. Eric Swalwell, a Democrat of California, accuses Mr. Brooks of inciting a riot and preventing a person from holding office or performing official duties.

Mr. Swalwell accused Mr. Brooks, Mr. Trump, his son Donald Trump Jr. and his former personal attorney Rudolph W. Giuliani of key roles in instigating the January 6 attack during a rally near the White House in the Having played Storming the Capitol hours earlier.

Citing excerpts from their speeches, Mr Swalwell accused the men of breaking federal law by conspiring to prevent an elected official from holding office or performing official duties, arguing that their speeches attracted supporters led Mr. Trump to believe that they were acting on orders to attack the Capitol.

Mr Swalwell alleged that their speeches encouraged Mr Trump’s supporters to unlawfully force members of Congress out of their chambers and destroy parts of the Capitol to deter lawmakers from performing their duties.

During the rally, Mr. Brooks told attendees that the United States is “at risk unlike in decades and perhaps centuries.” He said that their ancestors sacrificed “their blood, sweat, tears, wealth, and sometimes their lives” for the land.

“Are you ready to do the same?” He asked the crowd. “Are you ready to do anything to fight for America?”

Mr Swalwell said the defendants in his lawsuit incited the mob and continued to generate false beliefs that the election had been stolen.

“As a direct and predictable consequence of the defendants ‘false and inflammatory allegations of fraud and theft, and in direct response to the defendants’ explicit calls for violence at the rally, a violent mob attacked the US Capitol,” Swalwell said in his complaint. “Many participants in the attack have since revealed that they were acting on the orders of former President Trump in the service of their country.”

In June, Mr. Brooks asked the Justice Department to defend him on the case. He cited the Westfall Act, which essentially replaces the Justice Department as a defendant when federal employees are sued for acts in the course of their employment, a court document said.

Describing his January 6 speech as part of his job, he said his responsibilities include making speeches, making policy statements and convincing lawmakers.

Mr Trump has not sought the government to replace him as a defendant in the Westfall Act lawsuit. But he has argued in court records that the statements he made on Jan. 6 are backed by broad immunity, that he could not be sued for it, and that the lawsuit violates his right to freedom of expression.

Should a judge deny Mr. Trump’s allegations, he could ask the Justice Department to intervene on his behalf. But its decision in Mr. Brooks’ case reduced the chances that it will comply.

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Biden says vaccine mandate for all federal workers is into consideration following VA order

Biden says vaccine mandate for all federal employees is under consideration following VA order

U.S. President Joe Biden will hold a

Kevin Lamarque | Reuters

President Joe Biden said Tuesday his administration was considering whether to vaccinate federal employees against the coronavirus as the highly contagious Delta variant spreads in the United States

“This is being considered,” Biden told reporters when asked if he would impose a vaccine mandate on all government employees.

The Biden administration had previously advised federal agencies not to require vaccinations for field work.

But on Monday the Department of Veterans Affairs announced it would order its health care workers to get vaccinated, making it the first federal agency to issue such a mandate.

Veteran Affairs Secretary Denis McDonough described the new measure as “the best way to protect veterans”.

This is the latest news. Please check again for updates.

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Elizabeth Warren presses Janet Yellen to deal with crypto market threats

Elizabeth Warren presses Janet Yellen to address crypto market threats

Senator Elizabeth Warren, D-Mass., Holds a press conference outside of the Capitol on Tuesday, April 27, 2021 to reinstate the Universal Childcare and Early Education Act.

Tom Williams | CQ Roll Call, Inc. | Getty Images

Senator Elizabeth Warren called on Treasury Secretary Janet Yellen Tuesday to identify and address cryptocurrency risks and create a “comprehensive and coordinated” framework through which federal agencies can continuously regulate virtual coins.

Warren, a member of the Senate Banking Committee and longtime critic of the country’s largest banks, urged the Treasury Secretary to use her powers on the Financial Stability Oversight Council to create a more secure crypto market.

“The FSOC must act quickly to use its legal powers to address the risks of cryptocurrencies and regulate the market to ensure the safety and stability of consumers and our financial system,” the Massachusetts Democrat wrote in a letter to Yellen .

“As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment and our financial system are exposed to increasing threats,” she added.

Warren named five risks posed by an under-regulated crypto market. In her words it is:

  • Exposure to hedge funds and other investment vehicles with no transparency
  • Risks for banks
  • Unique threats from stablecoins
  • Used in cyber attacks that can disrupt the financial system
  • Risks from decentralized financing

A Treasury Department spokesman did not immediately respond to CNBC’s request for comment.

Warren’s letter also came as she and other lawmakers held a hearing on the Senate Banking Committee entitled “Cryptocurrencies: What Are They Good For?”

Senators will grill Coin Center Executive Director Jerry Brito, Filecoin Foundation Chair Marta Belcher, and Angela Walch, a research fellow at University College London’s Center for Blockchain Technologies, during Tuesday’s hearing.

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“Cryptocurrencies and other digital assets present significant risks right now, and the risks they pose are increasing as they permeate the traditional financial system and more and more people are investing,” Walch told lawmakers in a written statement. Her Twitter bio advises readers “not to own crypto”.

Warren’s letter is the latest in a series of calls from Capitol Hill for tighter market regulation.

Perhaps the most prominent example came in February when lawmakers on both sides of the political aisle pecked executives at brokerage firm Robinhood, social media website Reddit, market maker Citadel Securities, and video game retailer GameStop about “gamifying” stock trading.

However, regulating crypto markets has proven to be a more difficult task given the sheer number of different assets as well as the novelty of the technology behind digital currencies. To date, it is unclear which body – the FSOC, the Securities and Exchange Commission, or Congress itself – will ultimately be responsible for the day-to-day oversight of crypto trading.

That’s probably why Warren addressed her letter to Yellen in her role at FSOC.

Established after the 2008 financial crisis, the FSOC is headed by the Treasury Secretary and brings together 10 state financial regulators, including the Federal Reserve, the Securities and Exchange Commission, and the Commodities Future Trading Commission.

The council’s role is to identify risks to the financial industry and coordinate a regulatory response between cabinet departments and other agencies, as no single regulator is responsible for overseeing and addressing global risks to financial stability.

The SEC, under the new leadership of Chairman Gary Gensler, is currently considering approving exchange-traded funds that track Bitcoin’s performance. Many investors say that given the recent rally in Bitcoin and the extensive amount of futures and other derivatives trading in the space, the decision cannot come soon enough.

So far, Gensler has said investor protection should apply to crypto exchanges, and the Federal Reserve is considering issuing central bank digital currency.

Republicans on the Senate Banking Committee, including ranking member Pat Toomey of Pennsylvania and Cynthia Lummis of Wyoming, argue that Congress should better understand the potential uses of cryptocurrencies while keeping illegal activity at bay.

Toomey and Lummis are investigating the value and possible uses of so-called stablecoins or digital currencies that are linked to national currencies such as the US dollar.

“It’s important to note that people have raised legitimate issues with cryptocurrencies,” Toomey said in prepared remarks on Tuesday morning. “But we shouldn’t lose sight of the enormous potential benefits that distributed ledger technology offers.”

“We should also keep in mind that private innovation has made most of these developments possible,” he added. “We shouldn’t suppress the concepts of individual entrepreneurship and empowerment that made this innovation possible.”

– CNBC’s Stephanie Dhue contributed to this article.