Overnight Regulation: Obama-era harassment guidance held up at WH | Sentencing reform bill advances over Sessions’s objection | FCC watchdog investigates chairman over Sinclair | Court tells feds to implement energy efficiency rules

Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Thursday evening here in Washington where the Senate voted down an immigration plan backed by President Trump, and other rival proposals. The votes leave an unclear path for lawmakers looking to so-called Dreamers, young immigrants facing the threat of deportation. Read about it here. 

 

THE BIG STORY

The White House is reviewing an Obama-era proposal from the Equal Employment Opportunity Commission (EEOC) that would update federal guidance for employers on preventing harassment in the workplace.

Released before the “Me Too” movement, and just 10 days before President Trump took office, the proposal most notably extends the EEOC’s interpretation of sex-based harassment to include harassment based on gender identity and sexual orientation, among other things.

Here’s why this is a big deal: The language is at odds with the way Cabinet officials in the Trump administration have viewed and carried out the laws governing discrimination, which can include harassment, when it comes to LGBT people.

Background: But this isn’t the first time the EEOC has interpreted the civil rights law this way.

Tasked with investigating charges of discrimination against employers, the commission held in 2012 that intentional discrimination against a transgender individual because of that person’s gender identity is, by definition, discrimination based on sex and therefore violates Title VII. And under that precedent, the agency held in 2015 that an employer’s restrictions on a transgender woman’s ability to use a common female restroom facility constituted disparate treatment.

What’s unusual, former EEOC Commissioner Jenny Yang said, is that the guidance is under review by the White House Office of Information and Regulatory Affairs (OIRA) and has been since November.

Yang, who left the EEOC on Jan. 3, said the proposal is sub-regulatory guidance, which is not typically reviewed by the White House because it’s only an expression of the agency’s policy.

“It’s our view of the law,” she said. “There’s no binding effect on employers. It never says you must do that or have to do this. It’s our interpretation of the law and it’s meant to be a resource for employers as opposed to a directive.”

Opponents meanwhile are saying the EEOC has overstepped its regulatory authority. 

While the Employment Law Alliance agrees that transgender people should be protected from discrimination, New York member Ginger Schröder said the current law can’t be extended to accomplish that goal.

“It’s a slippery slope when you allow an agency to legislatively rulemake without going through the appropriate process,” she said. “We’re set up as a nation of laws. We have a procedure in place for the passage of laws and the interpretation of laws and it should not be the case that EEOC is expanding the scope of a statute without going through that proper process.” 

Read the full story here. 

 

REG ROUNDUP

Criminal justice: Legislation to reduce mandatory minimum prison sentences for certain nonviolent drug offenders advanced in the Senate Thursday despite Attorney General Jeff Sessions strongly urging the committee to vote it down.

In a 16-5 vote, the Senate Judiciary Committee approved the Sentencing Reform and Corrections Act.

The bill has bipartisan support and was also approved by the committee in the last Congress, but failed to get to the floor for a vote. 

Sessions objected to the bill in a letter to committee Chairman Chuck Grassley (R-Iowa) on Wednesday.

In the letter, obtained by The Hill, Sessions said the bill “would reduce sentences” for a “highly dangerous cohort of criminals,” and that passing it “would be a grave error.”

Grassley admonished Sessions during the markup, saying the former Alabama senator should have run for his old job if he wanted to legislate.

“Certainly we value input from the Department of Justice, but if [Attorney] General Sessions wanted to be involved in marking up this legislation, maybe he should have quit his job and run for the Republican Senate seat in Alabama,” said Grassley, who broke from his prepared comments to note that the Sessions seat is now held by a Democrat.

Read the story here. 

 

Tech: The Republican chairman of the Federal Communications Commission is being investigated by the agency’s inspector general.

The inspector general wants to know whether Ajit Pai improperly pushed through rules in an effort to benefit the Sinclair Broadcast Group, according to The New York Times on Thursday.

Rep. Frank Pallone Jr. (D-N.J.), the top Democrat on House Commerce Committee and an outspoken critic of Pai, confirmed the report in a statement and praised the move.

“For months I have been trying to get to the bottom of the allegations about Chairman Pai’s relationship with Sinclair Broadcasting,” Pallone said.

Conservative-leaning Sinclair is proposing a takeover of Tribune Media. The combined local television stations would be able to reach more than two-thirds of the country’s television audience. Broadcasters are currently capped at 39 percent.

Pai’s critics have noted that he has pushed through a number of deregulatory proposals that appear to clear obstacles from Sinclair’s proposed expansion.

Pai’s office declined to comment on the report, but the chairman has denied his deregulatory agenda was intended to benefit any one company.

Read the story here.

 

Finance: The sole insurance company subject to stricter federal oversight under the Dodd-Frank Act is pushing Washington to set it loose.

Prudential Financial is asking an interagency group of regulators to strip its designation as a “systemically important” nonbank financial institution. The insurance company insists it should have never been grouped in with the banks and financial firms that helped tank the economy in 2008, and says its business has only grown safer and stronger.

Prudential has enlisted a team of Washington lobbyists to push the company’s case as the Trump administration takes aim at the rules the company is fighting.

“We have and continue to maintain that we do not meet the standard for designation and that flaws in the designation process led to this outcome,” the company said in a statement.

Prudential manages more than $1.3 trillion in assets and $3.7 trillion in life insurance policies, making it one of the largest insurance companies in the U.S. The company says it employs 50,000 people, serving 40 countries through a slew of subsidiaries.

Read more here.

 

Energy: The Federal Energy Regulatory Commission (FERC) voted Thursday to implement rules that are designed to remove barriers to grid-level batteries that store electricity.

The new regulation requires that electric grid operators pay and treat storage operations similarly to how they treat power plants.

“This order will enhance competition and promote greater efficiency in the nation’s electric wholesale markets, and will help support the resilience of the bulk power system,” the commission said in a statement after its vote.

All five of the commissioners — three Republicans and two Democrats — voted in favor of the proposal.

Read more here.

 

Environment: The Environmental Protection Agency retracted its claim on Wednesday that Administrator Scott Pruitt has a “blanket waiver” to fly first class on flights whenever he wants.

The EPA originally said that Pruitt had obtained a waiver of federal standards that limit officials’ ability to book first-class flights with taxpayer funds.

“As such, for every trip Administrator Pruitt submits a waiver to fly in either first or business class,” an EPA spokesman said on Wednesday.

But the spokesman originally said on Tuesday that Pruitt had been granted more leeway in flying business class or first class — an exception that doesn’t exist in federal rules.

The agency changed the statement after garnering criticism from lawmakers from both parties.

Pruitt is under scrutiny for a number of first-class flights. He says his security detail dictated the travel decisions.

Read more here.

 

Energy: The Trump administration must carry out the implementation of four energy efficiency regulations that it has delayed for more than a year, a federal court ruled Thursday.

The Department of Energy (DOE) wrote the rules and made them public in December 2016, under the Obama administration.

But when President Trump took office Jan. 20, 2017, his administration took advantage of a 45-day window for error corrections to review the rules and potentially scuttle them. The DOE still has not published the rules in Federal Register, the final step to implement them.

The ruling stands as a setback in the Trump administration’s ongoing efforts to delay, weaken or undo major parts of Obama’s aggressive environmental agenda.

Read more here.

 

Environment: The Environmental Protection Agency (EPA) reached a $1.2 million settlement with Amazon on Thursday over charges that third parties had used the website to sell thousands of illegal pesticides.

“This agreement will dramatically reduce the online sale of illegal pesticides, which pose serious threats to public health in communities across America,” Chris Hladick, the EPA administrator for several northwestern states, said in a statement. “Amazon is committed to closely monitoring and removing illegal pesticides from its website, and EPA will continue to work hard to ensure these harmful products never reach the marketplace.”

The EPA said that it had found nearly 4,000 violations of the Federal Insecticide, Fungicide and Rodenticide Act on the site in an investigation that began in 2014. Investigators found that third-party vendors had been illegally selling foreign and mislabeled pesticides within the U.S.

Read more here.

 

Finance: Treasury Secretary Steven Mnuchin said Thursday that the IRS plans to release a new calculator next week to help people figure out if they need to adjust their tax withholding in light of the new tax law.

“The IRS will put up a calculator that will allow families to go and double check their withholding based upon the new tax law and update their forms if necessary,” he said at a House Ways and Means Committee hearing. “We’re very pleased at the work that’s being done at the IRS on this.”

Employers have already started to adopt new withholding tables, leading many to see boosts in their paychecks that Republicans have been highlighting. But Democrats have expressed concerns that some taxpayers who expected refunds may end up having to pay the IRS next year.

Naomi Jagoda has the story here. 

 

Court: A Virginia-based federal court of appeals on Thursday ruled the latest version of President Trump’s travel ban unconstitutional, arguing that it unlawfully discriminates against Muslims.

In a 9-4 decision, a majority of the judges on the 4th Circuit Court of Appeals said it examined official statements from Trump and other executive branch officials, along with the proclamation itself, and found it “unconstitutionally tainted with animus toward Islam.”

The court is the second federal appeals court to rule against the ban.

Read the story here. 

 

Environment: The amount of civil penalties charged to polluters by the Environmental Protection Agency (EPA) dropped by nearly half under President Trump, according to a new study released Thursday.

The report by the Environmental Integrity Project (EIP) found that in the year since Trump’s inauguration, the penalties companies were forced to pay for violating regulations dropped by 49 percent compared to in President Obama’s first year.

The report also found the number of cases filed against polluters by the Trump administration dropped drastically. There were 44 percent fewer cases opened under Trump than Obama in the first year of their administrations.

Miranda Green has the story here.

 

Banking: U.S Bancorp, the parent company of U.S. Bank, will pay more than $613 million in fines and penalties to federal regulators over a failure to comply with anti-money laundering (AML) laws.

U.S. Bancorp is paying for a lack of sufficient checks to ensure the bank was adhering to the Bank Secrecy Act and laws meant to weed out illicit finance.

The company will forfeit $528 million in profits and pay fines to three federal agencies: $15 million to the Federal Reserve Board, $75 million to the Office of the Comptroller of the Currency (OCC) and $185 million to the Treasury Department’s Financial Crimes Enforcement Network.

Sylvan Lane has the story here. 

 

IN OTHER NEWS

VA secretary says he’ll reimburse U.S. for disputed European travel costs – The Wall Street Journal

House passes changes to Americans with Disabilities Act over activists’ objections – The Washington Post 

Trump focuses on mental health over gun control – The New York Times 

The CFPB’s Declaration of Dependence – ProPublica 

School safety money would be slashed in Trump budget – Politico