Overnight Regulation: Court sides with Trump in consumer agency fight | High court wrestles with whistleblower protections | FCC chief slams ‘Hollywood celebrities’ over net neutrality | AT&T, Time Warner extend merger deadline
Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Tuesday evening, and the Senate Budget Committee voted to advance the chamber’s tax reform bill. But not without some drama — as Trump called Sen. Ron Johnson (R-Wis.) out by name twice in a Senate GOP closed-door lunch.
THE BIG STORY
A federal judge on Tuesday rejected a lawsuit from an official who claims that she, and not President Trump appointee Mick Mulvaney, is the rightful director of the Consumer Financial Protection Bureau (CFPB).
Judge Timothy Kelly of the U.S. District Court of the District of Columbia declined to grant Leandra English a restraining order to bar Mulvaney from serving as the CFPB’s acting director.
The ruling clears the way for Mulvaney to run the CFPB until a permanent director is sworn in or English successfully appeals the decision.
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Background: Trump last week appointed Mulvaney to temporarily lead the CFPB until the lawmakers confirm his pick to replace Richard Cordray, who resigned as the agency’s director on Friday.
The president was able to appoint Mulvaney to the role because he was already confirmed by the Senate for another position — director of the Office of Management and Budget.
The legal dispute arose because Cordray, in one of his final acts at the agency, promoted English, his former chief of staff, to the role of deputy director, making her acting director under the agency’s line of succession.
ON TAP FOR WEDNESDAY
The Senate Health Committee holds a confirmation hearing for HHS nominee Alex Azar.
House Oversight and Government Reform subcommittees will hear from regulatory reform task forces from the EPA, Interior Department and Energy Department.
Federal Reserve Chairwoman Janet Yellen testifies before the Joint Economic Committee.
The full House Natural Resources Committee will meet for a hearing on modernizing the National Environmental Policy Act (NEPA).
A House Energy and Commerce subcommittee holds a hearing on “How companies decisions about data and content impact consumers.”
A House Appropriations Committee subpanel looks at the U.S. Department of Agriculture’s role in disaster recovery.
The House Financial Services Subcommittee on Housing and Insurance looks at “Sustainable Housing Finance: The Role of Ginnie Mae in the Housing Finance System.”
LISTEN TO THE HILL’S NEW TWICE-DAILY PODCAST!
In today’s Hillcast PM View, the daily evening update on what went down in Washington: Democrats nix a scheduled White House meeting after a Trump tweet raised the specter of a shutdown; the GOP makes progress on some major tax obstacles; and a court prepares to rule on who really runs the Consumer Financial Protection Bureau. Host Niv Elis talks to The Hill’s Scott Wong, Naomi Jagoda, and Sylvan Lane about what happened today on Capitol Hill. Listen here.
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REGULATORY ROUNDUP:
Courts: The Supreme Court is wrestling with protections for whistleblowers.
On Tuesday, the high court seemed reluctant to give Dodd-Frank protections to whistleblowers who report stock and investment fraud to their employers but not the federal government.
Under the Dodd-Frank Act, the Securities and Exchange Commission (SEC) in 2011 issued new rules protecting employees from being retaliated against by their employers if they report fraud internally.
Paul Somers, a former employee for Digital Realty Trust Inc., was fired after he reported alleged securities violations to his senior management. Somers never reported the information to the SEC, but his attorney says his employment should have been protected as a result of the 2011 rule.
His former employer, a publicly traded real estate trust, disagrees. Digital Realty Trust argues that Dodd-Frank’s definition of a whistleblower explicitly excludes anyone who fails to report allegations to the SEC.
Justice Neil Gorsuch, a self-described textualist who seeks to follow the literal reading of statutes, noted that Dodd-Frank explicitly states that the incentives and protections for whistleblowers “shall apply” to anyone who provides information relating to a violation of securities laws to the SEC.
“How much clearer could they have possibly been?” Gorsuch said, referring to the language lawmakers put in the legislation.
Read more of what the justices said from Lydia Wheeler.
Tech: Federal Communications Commission (FCC) Chairman Ajit Pai on Tuesday hit back at critics of his plan to roll back Obama-era net neutrality rules, singling out celebrities and tech giants.
“I’d like to cut through the hot air and the hysteria,” Pai said at an event at the conservative R Street Institute in Washington, D.C..
He went on to specifically address tweets from celebrities such as comedian and actor Kumail Nanjiani, from HBO’s “Silicon Valley,” actor Mark Ruffalo, and musician Cher criticizing his plans.
Pai scolded the “Hollywood celebrities, whose large online followings give them outsized influence in shaping the public debate.”
Finance: President Trump’s nominee to head the Federal Reserve, Jerome Powell, on Tuesday indicated that he would bring a moderate approach to the central bank that would largely leave monetary policy on its present course.
Powell, a Republican Fed governor, testified before the Senate Banking Committee, which will vote whether to recommend his confirmation to lead the Fed. He was first nominated to the bank’s board in 2012 by President Obama, and as a member has voted in step with current Fed Chairwoman Janet Yellen.
Republican lawmakers have expressed some concerns about Powell’s moderate stance on financial regulation, while some Democrats have called on him to back stricter rules for the financial sector. But it appears he’s on a smooth path to confirmation.
More on the consumer agency fight: Before the court weighed in Tuesday afternoon, the war over who was at the helm of the Consumer Financial Protection Bureau was still raging.
White House budget chief Mick Mulvaney again directed staff to disregard instructions from the agency’s deputy director, Leandra English, his second such memo telling employees to ignore communications from the top official.
“Consistent with my email from yesterday, please disregard any email sent by, or instructions you receive from, Ms. English when she is purporting to act as the Acting Director,” Mulvaney wrote in an email to CFPB staff on Tuesday, according to Reuters.
Environment: President Trump plans to travel to Utah next week and announce he will shrink at least two national monuments, The Salt Lake Tribune reported Tuesday.
Trump will visit Salt Lake City to detail plans to shrink the Bears Ears and Grand Staircase-Escalante national monuments, according to the report, which added that he will not visit the monuments or stay overnight in the state.
The White House told The Hill it did not have an update on Trump’s schedule for next week.
Tech: AT&T and Time Warner are extending the termination date of their merger to April 22, 2018, according to a Securities and Exchange Commission filing, now that the Department of Justice (DOJ) is suing to block their deal.
Despite the DOJ’s move to stop the merger, both companies are hopeful they’ll still be able to complete the $85 billion deal if they beat the agency’s lawsuit.
“AT&T intends to vigorously contest the DOJ’s allegations and is confident that the Court will reject the DOJ’s challenge to the merger,” the company wrote in its SEC filing.
Energy: The head of the Federal Energy Regulatory Commission (FERC) on Tuesday denied that there is a “conspiracy” to delay the addition of two new members on the five-person board.
Chairman Neil Chatterjee told reporters that he is not trying to delay Republican Kevin McIntyre and Democrat Richard Glick from being sworn in.
McIntyre — who is slated to be the new chairman of the body — and Glick were confirmed by the Senate Nov. 2, and President Trump recently processed their paperwork for ascension to the commission. But they have not been sworn in.
Cyber: A limited government advocacy group claims in a lawsuit filed Tuesday that the Environmental Protection Agency (EPA) has failed to respond to open records requests for documents related to employee use of encrypted messaging.
Politico first reported in early February that EPA employees were using the encrypted messaging app Signal to determine how to respond to a feared purge of climate science from the then-new Trump administration. Depending on the content of the conversations, those chats may run afoul of record-keeping laws.
The Cause of Action Institute — a group aligned with GOP mega-donors Charles and David Koch — filed several Freedom of Information Act requests for documents relating to the Signal messages, including ones in August and September, for records from software that could detect the Signal app on phones. According to the group, the EPA has not responded either of those requests.
IN CASE YOU MISSED IT
AT&T-Justice Department clash puts outspoken judge back in spotlight (The Wall Street Journal)
Illinois sues Uber, senators ask for answers (The Wall Street Journal)
Casting Wall Street as victim, Trump leads deregulatory charge (The New York Times)
ETP seeks US drilling permission on pipeline after Ohio orders pause (Reuters)
NY regulator grants bitFlyer a virtual currency license (Reuters)
Germany hints at compromise over reform of banking regulations (Financial Times)
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