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PRESENTED BY

BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN

THE TOP

OK, a few details from yesterday’s infrastructure negotiating session between President Joe Biden and Sen. Shelley Moore Capito of West Virginia.

Senate Republicans may send the White House a new infrastructure offer by Friday, but the two sides remain hundreds of billions of dollars apart on the spending side, sources tell us. Biden is looking for roughly $1 trillion in new infrastructure spending, while Capito and Senate Republicans are currently in the $250 billion range (and they want to repurpose Covid relief funding). Biden is sticking by his call for his tax increases to pay for infrastructure improvements, Republicans have no interest in that at all.

Here’s the reality: This negotiation seems to be going backward. After an initial burst of apparently misplaced optimism when these talks started, the two sides haven’t really budged much on their positions. And the ideological divide is enormous. While Republicans don’t really have any ideology in the post-Donald Trump era, opposing tax increases is one thing they can get behind. Democrats are just as firmly convinced that raising taxes on rich folks and corporations is good policy and good politics.

Now comes the most important act in Washington — the art of walking away.

Biden and Capito are going to have to figure out sooner or later how to remove themselves from this negotiation with the least amount of political damage. Remember, the White House has set a deadline of next week to chart a path forward for infrastructure, so time is of the essence. Capito and Biden are set to talk tomorrow.

But there’s a path for both of them to save face here.

→ If you ask Democrats, Biden wasn’t elected to compromise, even though he campaigned on being almost post-partisan. With control of both the House and Senate, Democrats see Biden as having a unique opportunity to push through transformative change. Bipartisanship, they say, is a goal, not a requirement. So his exit from the talks looks like this: We did our best to bring Republicans along, but they wanted to go too small for us. Biden may even say that he’ll continue to talk to Republicans, but Democrats need to get their own process started on Capitol Hill. A

→ For Republicans, this entire episode was vintage Mitch McConnell.

The Senate minority leader first lambasted Biden’s American Jobs Plan and American Family Plan as too expensive and too full of liberal goals. 

McConnell then laid out what Republicans would be willing to do, which was very, very far from what Democrats had proposed. 

McConnell empowered Capito to cut a deal with Biden. Of course, part of Capito’s negotiating group was conservative Sen. John Barrasso (R-Wyo.), a member of the leadership who was always seen as extremely unlikely to agree with any sort of large spending deal. Sen. Pat Toomey (R-Pa.) also wasn’t going to agree to any hugely expensive initiative either.

McConnell also made clear Wednesday morning in Kentucky that he’d spoken to Capito before the meeting with Biden. The translation there: Capito isn’t freelancing.

Now the entire Senate Republican caucus has rallied around a slimmed-down infrastructure bill, leaving the two sides miles apart. McConnell has rallied his colleagues around where he wanted to go, giving them an alternative they can talk about back home. McConnell 101.

In a perfect world for Senate Republicans, they will now move away from the talks and hope to expose the fact that Majority Leader Chuck Schumer (D-N.Y.) will struggle to get 50 Democratic senators to vote for an infrastructure package. And if Dems can’t pass it on their own, they’ll come back to Republicans for help, and the minority leader will be empowered.

The coverage: 

→ NYT: “Biden Meets With Capito as Deadline for Infrastructure Deal Looms: President Biden and Senator Shelley Moore Capito, the top Republican negotiator, had no breakthroughs. But they agreed to speak again on Friday,” by Emily Cochrane

→ WaPo: “Time could be running out for infrastructure deal,” by Seung Min Kim and Tony Romm

THE ETHICS CORNER

Group files complaint against Texas Republican over call for donor​

Campaign for Accountability, a liberal watchdog group, is filing a complaint with the Office of Congressional Ethics against GOP Rep. Roger Williams of Texas. CFA alleges Williams may have violated House ethics rules “by abusing his position as a member of the House Financial Services Committee to attempt to influence the outcome of a pending bankruptcy case for the benefit of a long-time donor.”

You can read the CFA complaint here.

According to the complaint, Williams improperly acted on behalf of Gary Martin, a longtime friend and donor who’s given thousands of dollars to political committees that support Williams. Martin’s company, Repeat Precision LLC, was involved in a legal fight with Diamondback Industries, an oil and gas drilling equipment company that filed for bankruptcy in April 2020.

Repeat Precision had won a $40 million judgment against Diamondback in a patent lawsuit. However, before filing for bankruptcy, Diamondback secured a $40 million loan from UMB Bank in Dec. 2019. “Prior to this, Diamondback’s assets were relatively unencumbered by liens,” the CFA complaint notes. “Under the terms of the loan agreement, UMB’s loan was secured by all of Diamondback’s assets and UMB was repaid $20 million before the bankruptcy.”

According to his own testimony in this case, Martin was angered by UMB’s loan to Diamondback and tried to get a meeting with UMB’s chair and CEO, Mariner Kemper. Kemper refused to meet.

So Martin asked Williams — who sits on the House Financial Services Committee, which has jurisdiction over the banking industry — to set up a meeting with Kemper. According to an official at the bank who spoke to Willams on June, 11, 2020, “The Congressman said that his constituent would get on a plane and fly to meet with Mr. Kemper, [Williams] mentioned that he was on the House Financial Services Committee as part of his duties, and he just mentioned that he was — it was in reference to a Repeat Precision and Diamondback Industries, and that was it.”

This incident was first reported by the Houston Chronicle in Oct. 2020, and you can read that report here.

However, the CFA complaint also states that Williams introduced Martin to Rep. Emanuel Cleaver (D-Mo.), another member of the Financial Services Committee. Martin met with Cleaver and asked him to contract UMB as well. Cleaver, however, refused to do so.

A federal judge overseeing Diamondback’s bankruptcy case later ruled that Martin didn’t tell Williams why he wanted the meeting with Kemper.

But the court also said this: “In introducing himself, Representative Williams identified himself as a member of the House Committee on Financial Services, which has oversight of federally-insured banking institutions such as UMB. While Mr. Garner himself [the UMB employee who spoke to Williams] did not feel threatened by the call, when the information was passed up the line and ultimately reached UMB’s outside counsel . . . Kyle Hirsch, [who] took issue with the outreach and communicated his displeasure with the same to lead counsel for Repeat, Davor Rukavina, informing Mr. Rukavina that he viewed the outreach as being improper and designed to pressure the bank.”

CFA’s Executive Director Michelle Kuppersmith said Williams’ actions warranted a full investigation by the House Ethics Committee. OCE can ask the Ethics Committee to do an investigation following its own review.

“Rep. Williams intervened in a pending court action at the request of his longtime donor. This goes well beyond typical constituent service and likely violates House rules,” Kuppersmith said. “It appears that Rep. Williams has regularly abused his position as a member of Congress to advance Gary Martin’s interests. The Office of Congressional Ethics should immediately investigate and refer the matter to the House Ethics Committee for further action.”

In response to the CFA complaint, Williams’ office released a statement from Colby Hale, a Williams’ spokesperson.

“This complaint was filed by a Democrat front group that has paid nearly $1 million to Fusion GPS, which is responsible for the discredited anti-Trump dossier that led to the Russia hoax investigation,” the statement said. “Of course these liberal hacks are quick to ignore the fact that, like many bankruptcies, the Diamondback dispute was highly contentious and Congressman Williams was unjustifiably dragged into their mess by a lawyer’s misstatements. That lawyer’s own client had to set the record straight with the court and the judge called out the reckless assertions being made in the case, thereby affirming that the Congressman’s actions were appropriate and consistent with his obligation to assist constituents and businesses in his district.”

This isn’t the first time Williams has faced ethics issues. In 2017, the House Ethics Committee dropped an investigation into whether an amendment Williams offered could benefit car dealerships like the ones he owns. Williams denied any wrongdoing but the Ethics Committee found he didn’t check with the panel before offering an amendment. Members are barred from taking any official action that benefits themselves personally.

IS THE REIGN OVER?

Benjamin Netanyahu is against the wall

Benjamin Netanyahu has been Israel’s prime minister for 12 consecutive years, and 15 years total, and in that time, has become a major figure in American politics. Two politicians — Yair Lapid and Naftali Bennett — have built a coalition to oust Netanyahu from the premiership. Netanyahu has roughly one week to try to peel right-leaning members of the Knesset away from that coalition — and the newspaper Israel Hayom, which is funded by the Adelson family, says that’s exactly what Netanyahu’s Likud party plans to do.

The coverage … NYT: 

→ “Netanyahu Rivals Agree on Israeli Coalition to Oust Him,” by Patrick Kingsley in Jerusalem

→ “How Naftali Bennett, Head of a Small Right-Wing Party in Israel, Rose to the Top,” by Isabel Kershner in Jerusalem: “Mr. Bennett, a former ally of Mr. Netanyahu often described as more right wing than the prime minister, is the independently wealthy son of American immigrants. He first entered the Israeli Parliament eight years ago and is relatively unknown and inexperienced on the international stage, leaving much of the world — not to mention many Israelis — wondering what kind of leader he might be.”

FT’s Mehul Srivastava in Tel Aviv: “The so-called change government will be supported by Ra’am, an Islamist party that is playing the role of a tiebreaker after four elections in two years failed to deliver a clear result. It is only the second time in Israeli history that an Arab party will play a role in a Zionist government, and the first time one has officially joined a coalition.”

MONEY IN POLITICS

Two key campaign finance watchdogs merge​

If you’re like us, you spend a lot of time looking at campaign-finance reports. Which means you’re familiar with the Center for Responsive Politics and the National Institute on Money in Politics, two of the leading campaign finance watchdog groups.

Well, these two groups are now merging to form “Open Secrets,” which they say will lead to “a new one-stop shop for integrated federal, state and local data on campaign finance, lobbying and more, that is both unprecedented and easy to use.”

“This merger brings together decades of expertise, massive data sets, and the kind of analysis that researchers, journalists, advocates and individuals rely on to understand the influence of spending on politics,” Sheila Krumholz said in a statement. The well-respected Krumholz ran CRP and will become the executive director of Open Secrets. “At a time when our country is being tested, this is a good day for democracy.”

The new organization will officially debut later this year. For now, you can continue to use the existing CRP and NIMP websites, which you can find here and here.

MOMENTS

President Joe Biden is in Rehoboth Beach, Del., for the first lady’s birthday and has no public events. … Energy Secretary Jennifer Granholm will be in West Virginia with Sen. Joe Manchin (D-W.Va.) today. This comes days after Biden called Manchin out — albeit not by name — for not sticking with Democrats enough.

11 a.m.: The Covid response team will brief the press.

11:30 a.m.: Secretary of State Tony Blinken will meet with Israeli Defense Minister Benny Gantz at the State Department. … VP Kamala Harris “will deliver remarks on the importance of investing in broadband to ensure affordable, accessible high-speed internet for all Americans, in the South Court Auditorium. Secretary of the Interior Deb Haaland and Secretary of Commerce Gina Raimondo will also deliver remarks.”

12:30 p.m.: Jen Psaki will brief reporters.

CLIP FILE

NYT

→ “Biden, Facing July 4 Deadline, Rallies Nation With Vaccination Incentives,” by Sheryl Gay Stolberg

→ “Trump shuts down his blog, frustrated by its low readership.” by Annie Karni

→ “Old-Guard Senators Defy Changes in How Military Treats Sex Assault Cases,” by Jennifer Steinhauer

→ Ira Shapiro: “How Joe Manchin Could Make the Senate Great Again”

WaPo

→ “Trump has grown increasingly consumed with ballot audits as he pushes falsehood that election was stolen,” by Josh Dawsey and Ros Helderman

→ “Justice Dept. secretly obtained New York Times reporters’ phone records during Trump administration,” by Matt Zapotosky

→ “With voting rights role, Harris takes on weightiest challenge yet as vice president,” by Cleve R. Wootson Jr., Mike DeBonis and Sean Sullivan

WSJ

→ “Activist Likely to Gain Third Seat on Exxon Board,” by Christopher M. Matthews

AP

→ “Talk of Trump 2024 run builds as legal pressure intensifies,” by Jill Colvin

Politico

→ “Federal prosecutors looking into whether Gaetz obstructed justice,” by Marc Caputo

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