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Stocks Gain With US Tax in Focus; Pound Rises: Markets Wrap

Stocks in Europe gained, following U.S. equities and most Asian benchmarks higher as optimism over U.S. tax reform overshadowed concerns about North Korea’s latest missile launch. The British pound strengthened after the U.K. cleared a major Brexit hurdle.

The Stoxx Europe 600 Index headed for a three-week high, with most industry sectors in the green. Banks outperformed following a rally in U.S. lenders after Federal Reserve chair nominee Jerome Powell signaled he isn’t inclined to add to financial regulations. Asian stocks were mixed earlier, with gauges in Tokyo and Australia advancing while equities in Seoul dropped. U.S. benchmarks rose on Tuesday as the Senate budget committee advanced the Republican tax bill.

Elsewhere, U.K. gilts fell, the FTSE 100 stock index dropped and sterling jumped to a two-month high after Brexit negotiators agreed to an outline divorce deal. The dollar weakened and core European bonds declined with U.S. Treasuries. The euro gained as data from Germany’s regions showed inflation accelerating. Crude oil fell for a third day as U.S. inventories expanded before OPEC meets to decide on prolonging supply cuts past the end of March. Industrial metals extended a slide.

In Asia, North Korean leader Kim Jong Un said his regime completed its nuclear program after firing a missile that put the entire U.S. in range. The launch shattered a two-month period of relative quiet in its first provocation since U.S. President Donald Trump’s decision this month to label the country a state sponsor of terrorism. Trump responded that “we will take care of that situation.”

Woman Tried to Dupe Washington Post With False Claim About Roy Moore, Paper Says

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Stephanie McCrummen, a Washington Post reporter, left, interviewed Jaime Phillips at a Greek restaurant in Alexandria, Va., on Wednesday.

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Dalton Bennett/The Washington Post

A woman with ties to a right-wing activist group falsely claimed to The Washington Post that she had conceived a child with Roy S. Moore, the Republican Senate candidate in Alabama, when she was 15, the newspaper reported on Monday afternoon.

The woman, identified by the paper as Jaime T. Phillips, claimed in recent interviews with reporters that she had an abortion after having sex with Mr. Moore in 1992. But The Post said that it had discovered inconsistencies in her account and evidence that the woman concocted the sensational claim to try to dupe reporters and coax them into discussing the political impact her story could have on Mr. Moore.

A reporter with The Post confronted the woman about the holes in her story on Wednesday and then Post journalists saw her on Monday morning entering the offices of Project Veritas, a conservative group that films undercover videos. The organization, led by the activist James O’Keefe, has recently targeted journalists, trying to goad them into revealing biases or unethical schemes to discredit the news media.

“The intent by Project Veritas clearly was to publicize the conversation if we fell for the trap,” Martin Baron, the executive editor at The Post, was quoted as saying. “Because of our customary journalistic rigor, we weren’t fooled.”

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James O’Keefe, of Project Veritas Action, in 2015.

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Stephen Crowley/The New York Times

A reporter and a videographer with The Post questioned Mr. O’Keefe on Monday outside his group’s office in Mamaroneck, N.Y., about Ms. Phillips’s apparent connections with Project Veritas.

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“I am not doing an interview right now, so I’m not going to say a word,” Mr. O’Keefe responded.

Ms. Phillips first contacted The Post in a mysterious email on Nov. 9, the newspaper reported. It was sent just hours after the newspaper had published a story about Leigh Corfman, who said she was 14 years old when Mr. Moore, then 32, engaged in a sexual encounter with her. “Roy Moore in Alabama,’’ the email to a Post reporter read, according to the story. “I might know something but I need to keep myself safe.”

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Michael Flynn’s lawyer meets with members of special counsel’s team, raising specter of plea deal

The lawyer for President Donald Trump’s former national security adviser Michael T. Flynn met Monday morning with members of special counsel Robert Mueller’s team — the latest indication that both sides are discussing a possible plea deal, ABC News has learned.

Trump’s legal team confirmed late last week that Flynn’s attorney Robert Kelner alerted the team that he could no longer engage in privileged discussions about defense strategy in the case — a sign Flynn is preparing to negotiate with prosecutors over a deal that could include his testimony against the president or senior White House officials.

That process would typically include a series of off-the-record discussions in which prosecutors lay out in detail for Flynn and his lawyers the fruits of their investigation into his activities. Prosecutors would also provide Flynn an opportunity to offer what’s called a proffer, detailing what information, if any, he has that could implicate others in wrongdoing.

When reached Monday, Kelner declined to comment on the nature of his morning visit to Mueller’s offices in Washington, D.C.

Sources familiar with the discussions between Flynn’s legal team and Trump’s attorneys told ABC News that while there was never a formal, signed joint defense agreement between Flynn’s defense counsel and other targets of the Mueller probe, the lawyers had engaged in privileged discussions for months.

Jay Sekulow, a member of Trump’s legal team, told ABC News last week that the break was “not entirely unexpected.”

“No one should draw the conclusion that this means anything about Gen. Flynn cooperating against the president,” Sekulow said.

The New York Times broke the news, calling it an indication that Flynn may be cooperating with prosecutors.

PHOTO: Michael Flynn Jr. is seen behind his father, retired Lt. Gen. Michael Flynn, as they arrive at Trump Tower in New York on Nov. 17, 2016. Eduardo Munoz Alvarez/AFP via Getty Images
Michael Flynn Jr. is seen behind his father, retired Lt. Gen. Michael Flynn, as they arrive at Trump Tower in New York on Nov. 17, 2016.

Sources familiar with the Flynn investigation have told ABC News the retired lieutenant general has felt increased pressure since prosecutors began focusing attention on his son, Michael G. Flynn, who worked as part of the Flynn Intel Group, the consulting firm founded by the elder Flynn, a former head of the Defense Intelligence Agency. Michael G. Flynn also traveled with his father to Russia in 2015 for his now famous appearance at a Moscow dinner where he sat next to Russian President Vladimir Putin.

Democrats in Congress have told ABC News they forwarded information to the Mueller team alleging that Michael T. Flynn illegally concealed more than a dozen foreign contacts and overseas trips during the process of renewing his security clearances.

“It appears that General Flynn violated federal law by omitting this trip and these foreign contacts from his security clearance renewal application in 2016 and concealing them from security clearance investigators who interviewed him as part of the background check process,” Reps. Elijah Cummings and Eliot L. Engel, both Democrats, wrote in a letter to Flynn’s attorney.

The letter highlights information House investigators collected from executives at three private companies advised by Flynn in 2015 and 2016. The companies were pursuing a joint venture with Russia to bring nuclear power to several Middle Eastern countries and secure the resulting nuclear fuel before Flynn joined then-candidate Trump on the campaign trail.

Flynn is a decorated military officer who served as director of the Defense Intelligence Agency from 2012 until his retirement in 2014. He was out of the spotlight only briefly. He joined the Trump campaign as an adviser in 2016, and Trump later named Flynn as his first national security adviser. He was forced to resign, however, after just 24 days on the job, when it was revealed that he misled Vice President Mike Pence about his conversations with Russian officials during the presidential transition.

PHOTO: Robert Mueller, special counsel on the Russian investigation, leaves the U.S. Capitol in Washington, D.C., June 21, 2017. Saul Loeb/AFP/Getty Images, FILE
Robert Mueller, special counsel on the Russian investigation, leaves the U.S. Capitol in Washington, D.C., June 21, 2017.

Cummings told ABC News that Flynn’s foreign contacts — which involved high-ranking foreign officials and business executives — were so numerous they could not have been inadvertent omissions or incidental contacts.

“He has, over and over again, omitted information that he should have disclosed,” Cummings said. “It’s not an aberration, and that’s clear.

Flynn’s lawyer has declined to comment on the letter, and when ABC News tracked down Flynn this summer at a beach in Newport, Rhode Island — his hometown — he didn’t say much more.

“I’m just having a great time with the family here,” Flynn said. “I’m doing good, [but] I’m not going to make any comments.”

The alleged omissions could be a serious matter — and not just for Flynn. While Cummings said intentionally omitting foreign contacts when applying for security clearance can carry a five-year prison term, he acknowledged that penalties are rarely so severe. The leverage the alleged transgressions provide, however, could prove useful to prosecutors seeking to use the threat of prosecution to compel Flynn’s assistance in the broader investigation into Russian interference in the 2016 presidential campaign.

Former FBI Director James Comey provided a window into that strategy during his three hours of testimony before the Senate Intelligence Committee earlier this year.

“There is always a possibility if you have a criminal case against someone and you bring them in, squeeze them, flip them, [that] they give you information about something else,” Comey said.

The alleged omissions are just the latest to make trouble for Flynn. He failed to declare a December 2015 trip to Russia, where he sat next to Putin and for which was paid $33,000. In March 2017, Flynn submitted a late filing with the Department of Justice under the Foreign Agent Registration Act, revealing that the Flynn Intel Group was paid $530,000 for three months of work on behalf of a Dutch firm owned by a Turkish businessman with close ties to the Turkish government.

PHOTO: President Donald Trump walks in front of National Security Adviser Michael Flynn and Joint Chiefs Chairman Gen. Joseph Dunford, left, and after arriving at MacDill Air Force Base in Tampa, Fla., Feb. 6, 2017. Susan Walsh/AP Photo, FILE
President Donald Trump walks in front of National Security Adviser Michael Flynn and Joint Chiefs Chairman Gen. Joseph Dunford, left, and after arriving at MacDill Air Force Base in Tampa, Fla., Feb. 6, 2017.

Flynn’s work for Turkey remains the subject of additional scrutiny. Of interest to federal agents, according to people interviewed by the FBI, is his alleged role in a bizarre, unrealized proposal first reported by The Wall Street Journal to kidnap Turkish dissident cleric Fethullah Gulen, who is living in exile in rural Pennsylvania and is suspected of involvement in a failed coup attempt.

Gulen, who has denied involvement in the coup attempt, has lived legally in the Pocono Mountains since 1999, and the Turkish government has been financing efforts to persuade the U.S. government to return him to Turkey for years.

Former CIA Director James Woolsey confirmed for ABC News he was at a meeting in which Flynn allegedly raised the idea.

“It became clear to me that they were seriously considering a kidnapping operation for Gulen, and I told them then that it was a bad idea, it was illegal,” Woolsey said. “I won’t say that they had firmly decided to do that. But they were seriously considering it.”

Kelner, Flynn’s lawyer, took the rare step of publicly refuting those assertions, saying there was no such discussion and calling them categorically “false.” In mid-July at a press conference, the Turkish ambassador to the U.S. also denied the notion of a kidnapping plot.

“There’s no truth to that,” he said, adding that the Turkish government was following “traditional” procedures to have Gulen extradited “through the legal channels.”

ABC News’ John Santucci contributed to this report.

Senators Scramble to Advance Tax Bill That Increasingly Rewards Wealthy

At the heart of the debate is whether to more favorably treat small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Seventy percent of pass-through income flows to the top 1 percent of American earners, according to research by Owen Zidar, an economist at the University of Chicago’s Booth School of Business.

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Which Republican Senators Might Oppose the Tax Bill, and Why

Senate leaders would need to win over several Republican senators to pass a tax overhaul.


Two Republican senators, Ron Johnson of Wisconsin and Steve Daines of Montana, have said that they will vote against the plan if it does not do more to help the owners of those businesses, possibly by increasing the individual income tax deduction for such owners from the 17.4 percent rate currently in the Senate bill.

Republicans, who control the Senate 52 to 48, can afford to lose only two of their members if they hope to pass the bill on party lines in the upper chamber.

Mr. Johnson could stall the bill by himself on Tuesday, when it is scheduled for a vote in the Senate Budget Committee. Mr. Johnson sits on that committee, where Republicans have a single-vote majority. On Monday, he said he would vote “no” unless his concerns were addressed.

“I need a fix beforehand,” Mr. Johnson said.

Earlier in the day, Senator John Cornyn, Republican of Texas and the majority whip, said, “There’s no deal, but there’s been some discussions on how to address Senator Johnson and Senator Daines’s concerns.” He continued, “We’re trying to be responsive.”

Adding to the uncertainty, Senator Bob Corker of Tennessee also said on Monday that he could be a “no” vote in the Budget Committee if his concerns about the bill’s effect on the deficit were not adequately addressed.

Orrin G. Hatch, Republican of Utah, who leads the Senate Finance Committee, said that there was a strong desire to get a bill passed by Friday and that additional changes would most likely be made on the Senate floor. Despite speculation that the House will face pressure to quickly vote upon whatever passes in the Senate, Senator Rob Portman, Republican of Ohio, said he “fully expects” that there would be a conference to bridge differences between the House and Senate plans.

Republican Tax Plan: How to Make Sense of the Push in Congress

It’s virtually impossible to fully understand, let alone keep up with, the flood of proposals, amendments and analyses that continue to pour out. Here are some of the big-picture ideas to keep in mind as this political sausage is being made.


The pass-through fight is the first skirmish in what lawmakers and lobbyists expect will be a frenzied week, which Republican leaders hope will produce the first major legislative victory of the Trump-era for their party.

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The week is expected to be punctuated by behind-the-scenes arm twisting and deal making as party leaders work to allay senators’ worries without exceeding their self-imposed $1.5 trillion budget for tax cuts. At least a half-dozen senators have raised concerns about the bill, including its potential to add to the federal deficit and a provision that would eliminate the Affordable Care Act requirement that most Americans have health insurance or pay a penalty.

Many of those senators are in discussions with party leaders over how to tweak the bill to address their concerns. James Lankford, Republican of Oklahoma, said on Monday that he was in talks over a proposal meant to ensure the tax plan did not balloon the deficit. Mr. Lankford said the Senate was discussing inserting a provision that would lead to tax increases — as yet unspecified — after a period of years if federal revenues fell short of lawmakers’ projections.

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“To me,” Mr. Lankford said, “the big issue is how are we dealing with debt and deficit, do we have realistic numbers, and is there a backstop in the process just in case we don’t?”

Mr. Corker and Senator Jeff Flake of Arizona, who has also expressed concerns about the bill’s costs, said on Monday that they were similarly interested in some type of trigger or backstop.

Some other senators’ concerns appear less likely to be addressed. Mike Lee of Utah and Marco Rubio of Florida, for example, appear to be making little progress in persuading party leaders to expand access to the child tax credit for low-income families, by allowing the credit to be refundable against payroll tax liability. Such a move would allow working parents who do not currently face income tax liability to still benefit from the expanded credit envisioned in the bill.

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Several Senate Republicans loom as potential roadblocks to the tax bill, including Senators Bob Corker of Tennessee, center, Ron Johnson of Wisconsin, right, and Jeff Flake of Arizona.

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Pablo Martinez Monsivais/Associated Press

On Monday, several Republicans from the Senate Finance Committee, including Mr. Hatch, emerged from a lunch with President Trump at the White House saying that they were confident they would have the necessary votes to pass the package this week and would be able to resolve differences with the House version so that the bill could be signed into law in short order.

“We’re generally able to get together and solve these problems,” Mr. Hatch said of the House and Senate.

White House officials privately said that they hoped the two chambers could resolve their differences privately and informally to avoid a potentially lengthy and divisive formal conference that typically is needed to complete major legislation.

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Asked whether the legislation could be completed by Christmas, Mr. Hatch said, “I hope so.”

He added that Democrats should “get off their duffs” and support the plan. Mr. Trump, for his part, said later in the day that he was not interested in getting Democratic support.

At an event in the Oval Office honoring Navajo code talkers from World War II, Mr. Trump boasted that the package would be “a tremendous tax cut, the biggest in the history of our country” and predicted that there would be “great receptivity” to it.

“If we win, we’ll get some Democratic senators joining us,” he said. “But I’m not so interested in that. We’re really interested just in getting it passed.”

Mr. Trump is expected to go to Capitol Hill on Tuesday to have lunch with Republican senators before meeting with the top congressional leaders from both parties in the afternoon.


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Congress Returns to Intense Pressure to End Secrecy Over Sex Harassment

The House is expected this week to adopt a bipartisan resolution mandating that all members and their staffs participate in anti-harassment and anti-discrimination training; the Senate has already adopted such a resolution. The more difficult task will be passing legislation that overhauls the way sexual harassment claims are handled.

In the House, a bipartisan group of lawmakers, led by Representative Jackie Speier, Democrat of California, and Representative Barbara Comstock, Republican of Virginia, is pushing for legislation that would require claims to be handled in public. In the Senate, Senator Kirstin Gillibrand, Democrat of New York, has put forth similar legislation.

“It was a system set up in 1995 to protect the harasser,” Ms. Speier said on the ABC program “This Week,” adding, “We say zero tolerance, but I don’t believe that we put our money where our mouths are.”

One major question, however, is whether the Speier-Comstock legislation should apply retroactively, meaning that those who have paid past settlements would now be identified. The legislation would cover any settlement reached since the beginning of this year.

While Mr. Portman said he would support retroactive releases, others, including Representative Nancy Pelosi, the House Democratic leader, were more cautious, saying that unmasking lawmakers could reveal the identity of victims who want to remain private.

“All of these nondisclosure agreements have to go,” Ms. Pelosi said on “Meet the Press.” But, she said, “if the victim wants to be private, she can be.”

Debra Katz, a lawyer who represents victims of sexual harassment, echoed those concerns.

“For a number of my clients, that’s the last thing in the world they would want and could have life-altering consequences,” Ms. Katz said in an interview on Sunday. “They settled their cases to be able to move on with their lives while protecting their privacy.”

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In the case of Mr. Conyers, the lawyer Lisa Bloom, who announced on Sunday that she was representing the woman who filed the complaint against him, said a confidentiality agreement was preventing the woman from telling her side of the story. Ms. Bloom urged Mr. Conyers to release her client from the agreement so she could speak publicly.

News of Mr. Conyers’s settlement was reported last week by BuzzFeed News, which published documents showing that he had settled a complaint in 2015 by a former employee who had said she was fired because she rejected his sexual advances. The news site said it had received documents about the case from Mike Cernovich, a right-wing online commentator.

BuzzFeed has since reported that a second woman has also accused Mr. Conyers, 88, of sexual harassment.

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“I deny these allegations, many of which were raised by documents reportedly paid for by a partisan alt-right blogger,” Mr. Conyers said in a statement on Sunday. “I very much look forward to vindicating myself and my family before the House Committee on Ethics.”

Mr. Conyers said that he would “like very much to remain as ranking member,” but had “come to believe that my presence as ranking member on the committee would not serve these efforts while the Ethics Committee investigation is pending.”

His lawyer, Arnold E. Reed, said in a phone interview on Sunday that Mr. Conyers had taken several days to decide to step aside from his committee post because he did not want to make an “off the cuff” move. Mr. Conyers spoke with several family members and deliberated during the Thanksgiving holiday before determining that the allegations had become too much of a distraction, the lawyer said.

“He wanted time to think about this and reach a conclusion that he was comfortable with. And it was the right thing to do in his mind,” Mr. Reed said. “He is maintaining that he did not do anything wrong. He is maintaining his innocence. This is a temporary stepping aside his position as ranking member so this can be a completely transparent and unfettered investigation.”

On Wednesday, Mr. Reed had said in an interview that Mr. Conyers believed that some of those suggesting that he step down, including fellow Democrats, had been scheming for years to push him out of his Judiciary post.

A senior House Democratic aide said the decision had come after days of effort by Ms. Pelosi, who was working with Mr. Conyers to find a way for him to step aside gracefully. Ms. Pelosi hinted at as much on “Meet the Press,” where she said, before Mr. Conyers’s announcement, that she expected him to “do the right thing.”

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The interview showed the delicate position that Ms. Pelosi is in. She declined to say that Mr. Conyers should step down, calling him an “icon in our country” who had done “a great deal to protect women.” Ms. Pelosi later came under some criticism on social media for those remarks.

On Sunday night, 12 women who once worked for Mr. Conyers released a statement in support of him. “Our experiences with Mr. Conyers were quite different than the image of him being portrayed in the media,” the women said, adding that he was “respectful” and “treated us as professionals.”

Former Franken aides have also been coordinating an effort to line up women in support of him. On Sunday, they released a statement signed by 65 women that expressed disappointment over the allegations but called him a “steadfast supporter of women’s rights.”

Representative Jamie Raskin, a Maryland Democrat who holds the recently created position of vice ranking member on the Judiciary Committee, praised Mr. Conyers for making a “wise decision,” adding, “The House is ready to clean house with respect to sexual harassment, and everybody agrees that we need to have a zero-tolerance policy.”

As Democrats wrestled with the allegations against Mr. Conyers and Mr. Franken, congressional Republicans on Sunday bemoaned President Trump’s support for Roy S. Moore, the Republican Senate candidate in Alabama who is accused of making unwanted advances on teenagers.

Many Republicans on Capitol Hill have called for Mr. Moore to step aside, but he has refused to do so. In a pair of tweets on Sunday, Mr. Trump warned that electing Mr. Moore’s Democratic opponent, Doug Jones, “would be a disaster!” Senator John Thune, Republican of South Dakota, issued his own warning, saying that a victory by Mr. Moore would hurt Republicans just as much as a loss.

“If Moore wins, there will immediately be an ethics investigation, and he will be working under a cloud. He is a distraction,” Mr. Thune, the No. 3 Republican in the Senate, said on “Fox News Sunday.” “I would like to see the president come out and do what we’ve done, saying Moore should step aside.”


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Battle for Control of Consumer Agency Heads to Court

The dispute has elevated Ms. English to a national spotlight. Before her appointment, she was a low-profile career civil servant who joined the agency in its infancy and rose steadily through its ranks, serving most recently as its chief of staff. She holds degrees from New York University and the London School of Economics, and previously held senior positions at the Office of Personnel Management and the Office of Management and Budget.

The Consumer Financial Protection Bureau was created six years ago to oversee a wide variety of financial products, including mortgages, credit cards, bank accounts and student loans.

Under the leadership of Richard Cordray, the departing director, the bureau aggressively used its powers to develop new rules and punish companies that broke existing ones. It targeted abusive debt collectors and bolstered protections for mortgage borrowers. Under Mr. Cordray, it won nearly $12 billion in refunds and canceled debts for 29 million consumers.

But that put it in the cross hairs of industry critics and many Republicans, who cried overreach.

“Wall Street hates it like the devil hates holy water,” Senator Dick Durbin, an Illinois Democrat, told CNN on Sunday.

Republicans have argued that the agency under Mr. Cordray has held back growth and innovation. They have criticized how he ran the agency in dozens of appearances on Capitol Hill.

To protect the agency from political interference, Congress gave it unusual independence and autonomy. The bureau’s leader, who serves a five-year term, is one of the few federal officials the president cannot fire at will.

The current standoff was triggered by the resignation of Mr. Cordray, who abruptly stepped down on Friday. His departure came eight months before his term was scheduled to end.

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Ms. English, an agency veteran, was appointed to the deputy director position hours later. In a letter, Mr. Cordray said the appointment would make her the agency’s acting director under the terms of the law that created the agency.

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But Mr. Trump is citing a different federal law in his effort to appoint Mr. Mulvaney. The dueling appointments left it unclear who would be running the agency on Monday.

Ms. English is looking to the United States District Court for the District of Columbia to resolve the dispute. The lawsuit she filed seeks a temporary injunction to halt Mr. Mulvaney’s appointment.

“The President’s attempt to appoint a still-serving White House staffer to displace the acting head of an independent agency is contrary to the overall statutory design and independence of the bureau,” Ms. English wrote in her lawsuit.

The White House and the consumer bureau did not respond to a request for comment.

Ms. English asked the court for an emergency restraining order to prevent Mr. Trump from naming an interim leader for the agency. She also asked it to declare that she, not Mr. Mulvaney, is the agency’s acting director.

Mr. Mulvaney would be a “wrecking ball” at the agency, said Lauren Saunders, the associate director of the National Consumer Law Center, an advocacy group.

As the fight between the White House and the consumer agency unfolded over the holiday weekend, many expected that it would end in court.

The legal grounds that the Trump administration cited for Mr. Mulvaney’s appointment — a law called the Federal Vacancies Reform Act — is “is at the very least contestable,” said Marty Lederman, a law professor at Georgetown formerly with the Justice Department.

Ms. English’s claim is based on the wording of the Dodd-Frank Act, the 2010 law that created the bureau. It specified that in the “absence or unavailability,” the bureau’s deputy director is to step in as its acting head.

The court will need to decide which law takes precedence.

“Everything about this situation is unusual,” said Deepak Gupta, Ms. English’s lawyer. Mr. Gupta is a former employee of the consumer bureau, who left in 2012 to start his own law firm.

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“All we’re asking for is a temporary restraining order to preserve the status quo,” he said. “We want to give the court time to consider the merits of both sides’ legal arguments. And while that happens, we think the appropriate thing is to leave Ms. English in place as the acting director.”


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White House consulted Justice Department before naming CFPB critic to lead agency, administration says

The White House is preparing for a showdown over who will be the next leader of the Consumer Financial Protection Bureau, a high-stakes battle that could end up in court and slow President Trump’s effort to roll back banking industry regulations.

Leadership of the agency, which Trump called a “total disaster” on Twitter Saturday, was thrown into doubt on an otherwise slow holiday weekend after the White House and the CFPB’s outgoing head both named acting directors to head the regulatory watchdog. On Friday, Trump named Mick Mulvaney, a longtime critic of the agency and the Office of Management and Budget director, while Richard Cordray promoted his chief of staff, Leandra English, to deputy director and said she would become acting director.

Both sides appeared to be preparing for a fight Saturday, including wading into the fine print of federal rules to bolster their position. The Justice Department’s Office of Legal Counsel issued an eight-page opinion late in the day supporting Mulvaney’s appointment as temporary head of the agency, while other legal analysts called the move illegal.

“We think the clear legal authority is that the president does have this authority. We’ll find out based on how Ms. English decides to act at the appropriate time,” a senior administration official said in a call with reporters.

In a brief interview Saturday, Cordray disagreed. “The law authorized me to appoint a deputy director, and I did so. My understanding of the law is that the deputy director serves as the acting director upon my resignation. If there are disagreements about these issues, the appropriate place to settle them would be in the courts,” he said.

The battle, should it wind up in court, could turn into a roadblock to the Trump administration’s efforts to roll back financial regulations. While Trump has installed new leadership at the top of several other regulatory agencies, many of which have already taken a more business-friendly tone, the CFPB has continued to aggressively push rules that irked Wall Street. The agency has broad powers to regulate financial firms, from banks, credit card companies to payday lenders, and impose fines for wrongdoing.

The agency has often run afoul of conservatives for what the banking industry has complained is overly aggressive rulemaking. But it has been cheered by consumer advocates and Democrats for taking on big banks, including Wells Fargo, which it fined a record $100 million for opening millions of fake accounts customers didn’t ask for.

“The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick. Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!,” Trump said of the six-year old agency Saturday. In another tweet, he referred to a Wall Street Journal editorial critical of the agency, and said Cordray had “just quit.”

Still, the agency’s fate remained unclear. “It appears that both Deputy Director English and OMB Director Mulvaney will walk in the door on Monday morning with the expectation of running the CFPB. We haven’t the faintest clue how that specific interaction will unfold, but our sense is that it could be a muddled mess,” Isaac Boltansky, a Washington policy analyst for the investment firm Compass Point Research Trading, said in a research note Saturday.

The White House has not spoken to English but expects her to show up to work Monday — as deputy director, said administration officials, who spoke on the condition of anonymity to discuss internal deliberations. Mulvaney is working on a transition plan and will serve as the CFPB’s acting director until the Senate confirms a permanent replacement, they said. At the same time, he would remain as budget director.

“We don’t have any reason to think that anything out of the ordinary course will happen,” one senior administration said. “We think [Mulvaney] will show up Monday, and he will go into the office and start working.”

The White House hopes to avoid a legal battle, but is confident that its appointment of Mulvaney will stand up to scrutiny, senior administration officials said in a call with reporters Saturday morning.

“We have gone out of our way to avoid an unnecessary legal battle with Mr. Cordray,” a senior administration official said. “His actions clearly indicate that he is trying to provoke one.”

The tug-of-war over the leadership of the agency is likely to linger for some time. Democrats and consumer advocates say Mulvaney’s appointment is illegal and are calling on the Trump administration to allow English to serve until a permanent replacement is confirmed by the Senate.

Trump “can nominate the next @CFPB Director — but until that nominee is confirmed by the Senate, Leandra English is the Acting Director under the Dodd-Frank Act,” Sen. Elizabeth Warren (D-Mass.), who helped establish the bureau and is one of its biggest supporters, said on Twitter.

Installing Mulvaney, even on a temporary basis, to lead the agency would quickly change its course. As a Republican congressman, Mulvaney called the CFPB a “joke . . . in a sick, sad way” and said it should be dissolved. Mulvaney’s experience running a large agency and time serving on the House Financial Services Committee qualified him for job, administration officials said.

Mulvaney’s appointment has already set off a wave of protest from consumer advocates who fear the former Republican House lawmaker would dismantle the agency. Lauren Saunders, associate director of the National Consumer Law Center, compared Mulvaney’s potential leadership of the agency to installing a “wrecking ball.”

“It is no joke to ordinary families to attempt to defang the one agency in Washington with the tools and independence to take on the Wall Street banks, giant credit reporting agencies, and predatory lenders that abuse the American public,” she said in a statement.

The fight over the agency’s future began Friday when Cordray announced that he was stepping down at midnight, a week earlier than expected, and promoted English to deputy director. In a letter announcing his decision, Cordray cited a section of 2010s Dodd-Frank Act that states a deputy director will “serve as acting director in the absence or unavailability of the director.”

In addition to serving as CFPB’s chief of staff, English has been the agency’s deputy chief operating officer, the principal deputy chief of staff at the Office of Personnel Management, chief of staff and senior adviser to the deputy director for management at the Office of Management and Budget. Her appointment will “ensure a smooth transition and operational stability at the agency,” Rep. Maxine Waters (Calif.), the ranking Democrat on the Financial Services Committee, said in a statement.

The announcement was seen as a maneuver to delay a Trump administration takeover of the agency and a few hours later the White House named Mulvaney acting director. The president’s authority under the Federal Vacancies Reform Act supersedes the language in the Dodd-Frank legislation, administration officials said. “The fact that the Deputy Director may serve as Acting Director by operation of the state, however, does not displace the President’s authority under the Vacancies Reform Act,” Steven Engel, assistant attorney general, said in a letter released Saturday supporting the decision.

But one of the authors of Dodd-Frank, former congressman Barney Frank (D-Mass.), disputed that the administration’s reading of the law. “It is obvious,” Frank said in an interview. Lawmakers would not have included the succession language in the Dodd-Frank legislation if they intended for the Federal Vacancies Reform Act to supersede it, he said.

“If you look at the CFPB language it is very specific and it was designed to protect an agency that we knew would be under a lot of pressure,” said Frank. “This is an agency that enforces the rules against some of the most powerful financial interests in the country. Everything was structured for its independence.”

The shrinking profile of Jared Kushner


White House senior adviser Jared Kushner listens as President Trump speaks during a Cabinet meeting at the White House on Nov. 1. (Jabin Botsford/The Washington Post)

A month ago, Jared Kushner — President Trump’s son-in-law and senior adviser — made a surprise trip to Riyadh to meet with Saudi Crown Prince Mohammed bin Salman, the son of a world leader who is making waves with crackdowns and modernization efforts.

Kushner, 36, flew commercial, and the White House only announced the visit once he was already on the ground. There were no news releases touting the specifics of his meetings, which included two days of one-on-one and small private audiences with Salman, 32. White House officials said the trip was part of Kushner’s effort as Trump’s adviser to build regional support for peace between Israelis and Palestinians.

Just days after Kushner landed back in Washington, Salman launched a purge of allegedly corrupt Saudi officials also seen as rivals to the prince and his father, King Salman. Kushner had no knowledge or advance warning of the move, and the topic was not natural for the two to discuss, a White House official close to him said. “Jared’s portfolio is Israeli-Palestinian peace, and he respects what his lane is,” the official said.

The journey revealed Kushner as a figure who seems both near the center of power and increasingly marginalized at the same time. His once-sprawling White House portfolio, which came with walk-in privileges to the Oval Office, has been diminished to its original scope under Chief of Staff John F. Kelly, and he has notably receded from public view.

His still-evolving role in the investigations of Russian election interference and possible obstruction of justice also make him a potential risk to President Trump, even as he enjoys the special status of being married to the boss’s daughter, Ivanka, and serving as one of the president’s senior confidants. Kushner’s family faces additional pressures over a troubled New York skyscraper at 666 Fifth Ave., which he purchased in his role as head of his family’s real estate business but from which he has divested since entering the administration.

In a rare interview in his West Wing office earlier this month — a silver bowl of Halloween candy still on the table — Kushner offered his own version of the fable of the fox, who knows many things, and the hedgehog, who knows one important thing.

“During the campaign, I was more like a fox than a hedgehog. I was more of a generalist having to learn about and master a lot of skills quickly,” he said. “When I got to D.C., I came with an understanding that the problems here are so complex — and if they were easy problems, they would have been fixed before — and so I became more like the hedgehog, where it was more taking issues you care deeply about, going deep and devoting the time, energy and resources to trying to drive change.”

This portrait of Kushner comes from interviews with Kushner himself, as well as 12 senior administration officials, aides, outside advisers and confidants, some of them speaking on the condition of anonymity to offer a more candid assessment. 


Kushner arrives before Trump and Singapore’s Prime Minister Lee Hsien Loong speak at a news conference in the Rose Garden at the White House on Oct. 23. (Jabin Botsford/The Washington Post)

Allies say Kushner’s subtle shift into the background of the West Wing reflects his natural inclination to work hard and eschew the limelight. His enemies gloat that it stems from avoidable missteps that resulted from his political naivete.

Following recent reports, which the White House denied, that the president privately blames Kushner for special counsel Robert S. Mueller III’s widening probe, ­Breitbart, the conservative website, snarkily dubbed him “Mr. Perfect.” The nickname originated from promotional material Kushner’s own family used, when trying to lure Chinese investors to their New Jersey real estate projects.

Some aides scoff at the notion that Kushner isn’t still whispering to the president about official business. But one of Kelly’s conditions for taking the job was that everyone, including Kushner and his wife, had to go through him to reach the president, and Kelly has made clear that Kushner reports to him, aides said. 

The new hierarchy is part of Kelly’s effort to sideline Kushner, said one Republican in frequent contact with the White House. Others say the order Kelly imposed has simply liberated Kushner to focus on his own portfolio — and eased some of the animosity his colleagues felt toward him. 

Kushner said he welcomes the change. “The order allows this place to function,” Kushner said. “My number one priority is a high-functioning White House because I believe in the president’s agenda, and I think it should get executed.” 

He still maintains the broad portfolio he took on at the beginning of the administration that made him a punchline among aides on Capitol Hill: peace in the Middle East; matters regarding Canada, Mexico and China; and the Office of American Innovation, an in-house group that focuses on tackling longer-term government challenges.

He attends meetings of his innovation group once a week, often on a Tuesday or Wednesday for an hour-long check-in and progress update. The innovation office launched with great fanfare in March, but some aides recently said they could not pinpoint exactly what it has accomplished.


Ivanka Trump and husband Kushner listen as Trump speaks during a Cabinet meeting at the White House on Oct. 16. (Jabin Botsford/The Washington Post)

Kushner and his allies reject that assessment, saying the office is focused on long-term projects. They say, for example, that the group helped the Department of Veterans Affairs launch their electronic medical records initiative in June, with Kushner expediting the process by calling Defense Secretary Jim Mattis and asking him to send people from his department to help.

“If I ever get into a roadblock, we just elevate it to Jared,” said Chris Liddell, a senior White House official who works in the innovation office. “He’s great at saying, ‘Can’t we get so-and-so to come over?’ And we get it done on the spot.”

Kushner is one of the advisers helping on negotiations over the North American Free Trade Agreement, and he accompanied Trump on the first half of his Asia trip earlier this month.

But the main focus for Kushner, an Orthodox Jew, is working to bring peace to the Middle East — a task that has bedeviled negotiators far more experienced in the region for generations. What Kushner brings to the effort, say several senior White House officials, is personal relationships with players on all sides and a willingness to bet on long-shot outcomes.

Before Palestinian Authority President Mahmoud Abbas met with Trump at the White House in September, Kushner and Middle East envoy Jason Greenblatt met him at the Mandarin Oriental for a two-hour breakfast. More recently, on Halloween, Kushner suggested that he and Greenblatt visit Saeb Erekat, the lead Palestinian peace negotiator, at the apartment in Virginia where he is recuperating from a lung transplant. After briefly considering, and then nixing, wine — Erekat is Muslim — Kushner ultimately brought chocolate.


Kushner flies over Baghdad with military personnel in April. (Reuters)

“This is very much a human conflict and a human-to-human relationship,” Greenblatt said. “When you’re able to touch somebody and talk about it, it’s a meaningful engagement. It takes a certain personality, and Jared has that touch.”

Yet snags persist. A week ago, the Palestinians threatened to freeze all contact with the Trump administration after the State Department said the Palestine Liberation Organization’s office in Washington could not remain open — a decision it backtracked on Friday.

And Kushner’s friendship with Mohammed bin Salman raised questions after the crown prince’s anti-corruption campaign — which critics paint as an attempt to consolidate power but devotees say is part of his efforts as a reformer — as well as concerns from some that Saudi Arabia now feels further emboldened within the region. 

The Mueller probe, meanwhile, is entering a new phase, with the special counsel announcing three indictments at the end of last month — including for Trump’s former campaign chairman Paul Manafort — while investigators begin to interview people close to the president’s inner circle. Kushner has turned over documents to the House and Senate committees investigating possible collusion between Russia and Trump’s campaign, although in a letter, the Senate Judiciary Committee recently complained that Kushner had not been fully forthcoming — a charge his lawyer denies. 

So far, Mueller has filed no court documents to suggest Kushner is in legal jeopardy, but people close to the case say investigators have been looking at his meetings with Russians before and after the election, as well as his role in discussions that led to the firing of FBI Director James B. Comey.

The news on Thanksgiving that former national security adviser Michael Flynn’s lawyers notified Trump’s legal team that they could no longer share information about the Russia probe prompted speculation that Flynn may now be cooperating with Mueller — a potentially perilous sign for the president and his associates.

But friends say Kushner is even-keeled about the investigations. For him, they said, the most stressful moments came in May, amid news reports that he had tried to establish a secret back channel with Russia during the transition and that the FBI was probing his actions. He was frustrated, a White House official said, that he couldn’t respond to the allegations until he went to be interviewed by Congress.  

“Jared is an extraordinarily calm person,” said H.R. McMaster, the White House national security adviser. “I have never seen him distracted.”

He huddled with his lawyers for hours in the run-up to his testimony before Congress but is in less frequent daily contact now unless something from Mueller’s probe specifically requires his attention, one White House official said. 


Kushner and national security adviser H.R. McMaster wait for Trump and Chinese President Xi Jinping to arrive for a Chinese opera performance at the Forbidden City on Nov. 8 in Beijing. (Andrew Harnik/AP)

Kushner’s detractors point to his role in the Russia probe as another sign of his poor political skills and continued risk to the president. A Republican close to the White House said Kushner “has no judgment — never has and never will.”

But in some ways, Kushner appears more protected from the daily sniping that plagued the early months of Trump’s presidency. Over the summer, a trio of advisers who were rivals to Kushner were pushed out of the West Wing: Stephen K. Bannon, then the president’s chief strategist, who now runs Breitbart; Reince Priebus, the chief of staff; and Sean Spicer, the press secretary. 

“He no longer is in an environment where he has an actual predator,” said one White House official, likening Kushner to Bannon’s regular prey. “That has probably helped his working environment some.” 

Kushner, with his whispery voice, has also proved one of the few people adept at absorbing Trump’s anger. He can speak to Trump in a shared language of transaction from their days in the New York real estate world. 

“I don’t try to manage him,” Kushner said. “I try to give him my honest feedback. If he asks my advice on something, sometimes I’ll give it, sometimes I’ll say, ‘Let me go call a few people,’ and then I’ll give it.” 

McMaster said Kushner sometimes acts as a translator between the president and his senior advisers. “He helped a lot of us learn faster what’s important to the president,” McMaster said. “His relationship with the president makes Jared valuable as an adviser to the president, and also as an adviser to the president’s advisers.”

When Kushner’s family first arrived in Washington, they agreed they would assess after six months whether they intended to stay. Trump himself has mused privately about the hit his daughter and son-in-law’s reputation is taking because of their White House roles and about what a great and easy life they had back in New York. Others have questioned why someone like Kushner would put himself in Mueller’s crosshairs by remaining in government. 

But when the couple reassessed in July, they reached a decision. “We’re here to stay,” Kushner said. “At the current moment, we’re charging forward.”

He added, “My wife asked me the other day if we should be looking at new houses, so that’s a good sign.”