The Golden Apple – December 23, 2020

Barring unforeseen major events, this will be our last issue of The Golden Apple for 2020. We hope that your holidays are merry and bright, and that 2021 is a happy and healthy year for all of us.


COVID relief/omnibus spending legislation passes, veto watch begins 
You should already have received our summary of the massive bill Congress passed on Monday night: $900 billion in COVID-19 relief, $1.4 trillion to fund government operations for FY 2021, and dozens of unrelated authorizations added to a must-pass piece of legislation. Congress went home with the assumption that they’d have to return next week to override the President’s anticipated veto of the National Defense Authorization Act (NDAA). Last night President Trump said he would veto the COVID/omnibus bill as well, calling the planned $600 direct payments “a disgrace.”
 
The President did indeed veto the NDAA this afternoon. The COVID/omnibus veto cannot happen until the President receives the final enrolled copy of that 5,500-page bill, which won’t be until sometime next week. Both bills passed both houses with veto-proof majorities, and it seems likely that any vetoes will be overridden.
 
Meanwhile, Speaker of the House Nancy Pelosi (D-CA) circulated a “dear colleague” letter to House Democrats today proposing that the House act under unanimous consent (UC) to raise the direct payments to $2,000, as the President wants. The House is scheduled to go into a pro forma session tomorrow at 9:00 a.m., and House Majority Leader Steny Hoyer (D-MD) has asked Minority Leader Kevin McCarthy (D-CA) whether Republicans will consent to the UC motion. (Spoiler: they won’t.)


SEC issues statement, seeks comment on best practices for custody of digital asset securities 
The Securities and Exchange Commission (SEC) issued a statement today “to encourage innovation around the application of the Customer Protection Rule to digital asset securities.” The SEC assumes that broker-dealers will provide their full range of services for digital asset securities, tailoring them to these instruments’ “unique attributes.” For five years after the statement’s publication, the SEC will not take enforcement actions against broker-dealers on the basis under which the broker-dealer considers itself to have obtained and maintained physical possession of a customer’s digital asset securities, as long as the broker-dealer has access to the assets and the ability to transfer them, limits its services to transactions and custody, and maintains “reasonably designed written policies and procedures” governing its handling of digital assets. The SEC is asking for comments about how these standards should evolve, and what best practices would be; the comment period is open for 60 days.  
 

CFPB finalizes debt collection disclosure rule
The Consumer Financial Protection Bureau issued a final rule on Debt Collection Practices (Regulation F) last week, after more than an 18-month rulemaking process. The revised Regulation F clarifies the information a debt collector must provide to a consumer at the beginning of the debt collection process, and provides a model notice. It also prohibits debt collectors from threatening to sue or suing consumers to collect time-barred debt, and sets minimum requirements for debt collectors’ actions before reporting delinquencies to a credit reporting agency.
 

State regulators challenge OCC national bank charter for nonbanks
Yesterday the Conference of State Bank Supervisors filed a complaint in U.S. District Court to challenge the Office of the Comptroller of the Currency’s authority to issue a nonbank charter to Figure Technologies, a state-regulated fintech company. The complaint is the latest action in a long-running dispute over the OCC’s plans to grant special-purpose charters, which it laid out in a December 2016 paper. The OCC began accepting applications for national bank charters from nondepository financial technology companies in July 2018.
 

Biden names additional Cabinet members
President-elect Joe Biden continues to assemble his Cabinet and executive office. Intended nominees announced in the past week include:Pete Buttigieg, formerly Mayor of South Bend, IN, to be Secretary of TransportationDr. Miguel Cardona, currently Connecticut Education Commissioner, to be Secretary of EducationJennifer Granholm, formerly Governor of Michigan, to be Secretary of EnergyRep. Deb Haaland (D-NM) to be Secretary of the InteriorMichael Regan as Administrator of the Environmental Protection AgencyBrenda Mallory as Chair of the Council on Environmental QualityGina McCarthy, formerly Administrator of the Environmental Protection Agency, to be National Climate Advisor, a new positionAli Zaidi to be Deputy National Climate AdvisorJonathan Cedarbaum as Deputy Counsel to the President and National Security Council Legal AdvisorDanielle Conley as Deputy Counsel to the PresidentStuart Delery as Deputy Counsel to the PresidentJonathan Su as Deputy Counsel to the PresidentAnne Filipic, White House Director of Management & AdministrationRyan Montoya, White House Director of Scheduling & AdvanceGautam Raghavan, Deputy Director of the Office of Presidential PersonnelVinay Reddy, Director of SpeechwritingBruce Reed, Deputy Chief of StaffElizabeth Wilkins, Senior Advisor to the Chief of StaffJoelle Gamble, Special Assistant to the President for Economic PolicyDavid Kamin, Deputy Director of the National Economic CouncilBharat Ramamurti, Deputy Director of the National Economic Council for Economic Reform and Consumer Protection; Ramamurti is currently Senate Minority Leader Chuck Schumer’s appointee on the Congressional Oversight Commission for the CARES ActMegan Apper, White House Director of ResearchKate Berner, White House Deputy Communications DirectorRosemary Boeglin, Assistant Press SecretaryAmanda Finney, Chief of Staff for the White House Press Office and Special Assistant to the Press SecretaryMike Gwin, Director of Rapid ResponseMeghan Hays, Director of Message PlanningPaige Hill, Senior Regional Communications DirectorMichael Kikukawa, Press AssistantJennifer Molina, Senior Director of Coalitions MediaKevin Munoz, Assistant Press SecretaryVedant Patel, Assistant Press SecretaryAngela Dela Cruz Perez, Press SecretaryEmma Riley, Chief of Staff, Office of CommunicationsMariel Saez, Director of Broadcast MediaAmijah Townsend-Holmes, Press AssistantRemi Yamamoto, Senior Advisor for Communications to the Chief of Staff
Confirmations, Nominations, Departures
California Governor Gavin Newsom named California Secretary of State Alex Padilla to succeed Vice President-elect Kamala Harris as the state’s junior U.S. Senator.​​​Our friend and former colleague Catherine Kuerbitz has been named Chief of Staff to Rep. David Scott (D-GA), incoming Chairman of the House Agriculture Committee. ​ ​​The Consumer Financial Protection Bureau has named Ann Epstein as Assistant Director of the Office of Innovation and Jocelyn Sutton as Deputy Chief of Staff for the Bureau. ​Securities and Exchange Commission Chief of Staff Sean Memon, SEC Chief Economist S.P. Kothari, and SEC Director of the Division of Investment Management Dalia Blass announced that they will leave those positions in January.
The Week Ahead
This Thursday (Christmas Eve) and Friday (Christmas Day) are federal holidays, as is Friday, January 1.
 
January 4  U.S. House of Representatives meets to begin the 117th Congress.
 
January 5  Last day of voting in the Georgia run-off elections for Senate between Senator David Perdue (R-GA) and Jon Ossoff, and Senator Kelly Loeffler (R-GA) and the Rev. Raphael Warnock.
 
January 6  117th Congress meets to affirm the Electoral College’s vote for President and Vice President.
The Ellis Insight – Jim Ellis on Political News
PRESIDENT
 Electoral College: The Electoral College members met on December 14th in the 50 state capitals and officially made Democrat Joe Biden President-Elect of the United States. Unlike in many years – 2016, for example, when seven electors did not support the candidate of their state – the total was exactly 306-232 electoral votes, properly reflecting the split among the eligible voting electorates.
 
In 29 states and the District of Columbia, the electors are bound by state law to cast the electoral vote at the direction of the voters. In 21 states, however, the electors are free to stray from the state mandate. Next in the electoral process, the totals will be reported to the Congress on January 6th, at which point, Mr. Biden will be officially elected.
 
2024: McLaughlin & Associates has already posted a survey to test the potential 2024 Republican and Democratic presidential nomination fields. The poll was conducted during the December 9-13 period of 1,000 likely voters through live interviews.
 
The McLaughlin results find President Trump dominating the Republican field at 56%, followed by Vice President Mike Pence recording 11%. In single-digits are Sens. Ted Cruz (R-TX) with 5% support, Mitt Romney (R-UT) 4%, and former UN Ambassador and South Carolina Governor Nikki Haley at 3% preference.
 
For the Democrats, assuming President-Elect Joe Biden does not seek a second term, former First Lady Michelle Obama leads Vice-President-Elect Kamala Harris, 29-25%, with Rep. Alexandria Ocasio-Cortez (D-NY) attracting 7% support.
 
On a radio program earlier this week, former New Jersey Gov. Chris Christie (R) indicated that he could well become a presidential candidate in 2024, further saying he would consider running even if President Trump again enters the field. Mr. Christie also left the door open to supporting Maryland Gov. Larry Hogan if he were to decide to become a presidential contender as intimated.
 
SENATE 
 California: Gov. Gavin Newsom (D) announced that Democratic Secretary of State Alex Padilla will be named as Sen. Kamala Harris’s (D-CA) replacement upon her resigning to become Vice President of the United States.
 
Mr. Padilla was elected Secretary of State in 2014 and re-elected in 2018. Prior to his statewide service, Alex Padilla served in the California State Senate, and on the Los Angeles City Council, a body for which he was President. He will become California’s first Hispanic Senator, and the first individual from southern California to serve in the body since 1992.
 
Georgia: Survey USA released their latest Georgia Senate study (12/16-20; 600 GA likely voters; live interview; weighted responses) that finds Democrats Jon Ossoff and Raphael Warnock expanding leads over previous polls. The S-USA data finds Mr. Ossoff leading Sen. David Perdue (R), 51-46%, while Rev. Warnock has a 52-45% advantage over appointed Sen. Kelly Loeffler (R).
 
These numbers, and especially the crosstabs that suggest Ossoff and Warnock have 27 and 25 point leads among those reporting as voting early, does not track with reported early vote numbers, however. According to the Target Smart statistical organization, the Democrats have filed 47.5% of the early and mail ballots versus 46.2% for Republicans among the 1,669,675 votes recorded as being received.
 
A wild card are the 105,997 votes from unaffiliated voters. Unlike in the regular general election when these voters could have supported a minor party candidate, in the runoff, all of these votes will have been cast for one of the major party candidates in both Senate races.  Election Day is January 5th. Clearly, a close finish is expected.
 
Kentucky: State Rep. Charles Booker (D-Louisville), who lost a 45-43% Democratic Senate primary bid to retired Marine Corps helicopter pilot Amy McGrath earlier in the year, is apparently not closing the door on potentially entering the 2022 Senate field to challenge Sen. Rand Paul (R). He recently told political news reporters to “stay tuned,” with regard to his future statewide electoral plans.

  HOUSE  
 CA-21: Weeks after losing his congressional seat, freshman Rep. T.J. Cox (D-Fresno) said this week that he will run again in 2022. Mr. Cox lost to former US Rep. David Valadao (R-Hanford/Bakersfield) in November by 1,522 votes, or one full percentage point.  In 2018, Mr. Cox unseated Rep. Valadao by 862 votes.
 
The two regular political combatants, however, are already not alone in the 2022 candidate field. Former state Assemblywoman Nicole Parra (D-Hanford), who served a three-term stint in the legislature more than a decade ago when the term limits law only allowed her a six-year service period, has already announced that she will be also become a congressional candidate in the next election cycle.
 
CA-29: Fresh from a November 57-43% defeat at the hands of Rep. Tony Cardenas (D-Pacoima/Los Angeles) in a double-Democratic general election, Human Resources executive Angelica Duenas (D) says she will make another run for the House in 2022. Ms. Duenas raised only $80,839 for her 2020 campaign, so her political apparatus must substantially improve if she is to become a serious intra-party challenger to the five-term Congressman.
 
CA-39: Outgoing California Rep. Gil Cisneros (D-Yorba Linda) is already contemplating a re-match with Rep-Elect Young Kim (R), who defeated him in November. In public remarks during the week, Mr. Cisneros said that “everything is on the table” for the future while acknowledging that he could run again in what is now an Orange, San Bernardino, and Los Angeles County district. Redistricting, of course, will play a large role for all potential incumbents and candidates, which adds even more uncertainty to the 2022 pre-candidate filing periods.
 
IA-2: Iowa Democratic congressional candidate Rita Hart, as expected, has filed an official challenge to her defeat at the hands of Republican Representative-Elect Mariannette Miller-Meeks (R-Ottumwa). The Iowa Secretary of State has certified Ms. Miller-Meeks as the race winner by six votes. Ms. Hart is disputing the disqualification of 22 ballots that would flip the election her way. County authorities rejected the ballots for different reasons, and Ms. Hart is asking the House Administration Committee to review and accept them.
 
It is unclear when the committee will review the ballots, but it is probable that the action will delay Ms. Miller-Meeks seating as an official member on January 4th. Rep. Zoe Lofgren (D-CA) is the committee chair. Rep. Rodney Davis (R-IL) is the Ranking Minority Member. Democrats hold a 6-3 majority on the committee.  
 
MD-5: Local Greenbelt, Maryland Mayor Colin Byrd announced that he will challenge House Majority Leader and 21-term incumbent Representative Steny Hoyer (D-Mechanicsville) in the 2022 Democratic primary. Mayor Byrd, who was elected to his position when just 27 years of age, said that Mr. Hoyer “can no longer represent adequately more diverse places like Prince George’s County and Charles County.” In 2020, Mr. Hoyer also faced a Democratic primary challenge and was re-nominated with a 64-27% margin.
 
Though he is not likely to unseat the veteran congressional leader, Mayor Byrd has the potential of becoming a credible challenger, so this situation merits watching.
 
NM-1: New Mexico US Rep. Deb Haaland (D-Albuquerque), the former chair of the New Mexico Democratic Party and one of the first Native American females to be elected to the House of Representatives, has been nominated as President-Elect Joe Biden’s Secretary of the Interior. Upon confirmation and resignation from the House, a special election will be scheduled to replace her in the New Mexico congressional delegation.
 
Rep. Haaland will be the third Democratic House member to join the Biden Administration.  She will join Reps. Cedric Richmond (D-LA) and Marcia Fudge (D-OH). Mr. Richmond has been appointed as the director of the White House Office of Public Engagement, while Ms. Fudge is slated to become Secretary of the Department of Housing and Urban Development.
 
Though Rep. Haaland is weeks away from being confirmed as Interior Secretary and resigning from the House of Representatives, candidates for the all-but-certain special election sometime early next year are already filing campaign committees with the Federal Election Commission.
 
State Sen. Antoinette Sedillo Lopez (D-Albuquerque), a retired law professor, and state Rep. Melanie Stansbury (D-Albuquerque), a consultant, have filed congressional committees. So has former state Land Commissioner Aubrey Dunn, the Republican-turned-Libertarian. He will run as an Independent candidate.  Democrats will have the clear advantage to retain this seat, but a competitive special general election could occur.
 
NY-22: The judge hearing the post-election dispute between US House candidates Anthony Brindisi (D-Utica), the freshman incumbent, and former Rep. Claudia Tenney (R), says the election will not be decided for several more days after he and attorneys for the parties held a private meeting last Friday. All but two of the eight counties have finalized their counts.
 
There are, however, over 2,400 challenged ballots that must be researched and a final decision over each of them rendered before the final vote is certified. Currently, Ms. Tenney continues to maintain her 12-vote lead. The judge, Oswego County Supreme Court Justice Scott DelConte, says he hopes to have a final certification before the House convenes on January 4th.

  GOVERNOR/STATES 
 Georgia: It appears the 2022 Georgia gubernatorial election will be a re-match between Gov. Brian Kemp (R) and former state House Minority Leader Stacey Abrams (D).  It also appears, however, that they will have some company.  Shane Hazel, who scored a 2.3% vote share in the 2020 regular Senate election on the Libertarian Party ballot line, thus forcing the runoff election between Sen. David Perdue (R) and Democrat Jon Ossoff, said at the end of last week that he will seek his party’s gubernatorial nomination in 2022.  
 
His vote could conceivably again force the major party candidates into a runoff election if the battle is again as close as the 2018 election.  Libertarian Ted Metz was on the gubernatorial ballot in that year but only attracted 0.95% of the vote.  That total was not enough to deny Gov. Kemp majority support.  Should no candidate reach 50% in the 2022 regular general election, a runoff would be scheduled between the top two finishers.
 
Kansas: Rumors were beginning to surface suggesting that first-term Kansas Democratic Gov. Laura Kelly would not seek a second term in 2022. This week, she put all doubt aside and announced that she will run for re-election in the next voting cycle.
 
Gov. Kelly would not expect a major Democratic primary challenge, but local Republicans, buoyed by President Trump and Senator-Elect Roger Marshall’s (R) showing this past November, suggest that a strong GOP nominee will face her in the next general election.  Already mentioned as possible Republican candidates are US Secretary of State Mike Pompeo, former Governor and Lt. Governor Jeff Colyer, and state Attorney General Derek Schmidt.
 
Maryland: Maryland Gov. Larry Hogan (R) is ineligible to seek a third term in 2022, and already potential open seat candidates are beginning to stir. There is clear reason to believe this Governor’s mansion will return to the Democratic column after the 2022 election since Maryland is one of the bluest states in the country.
 
Three names surfacing this week as potential Democratic candidates are State Comptroller Peter Franchot, US Rep. Kweisi Mfume (D-Baltimore), and Baltimore County Executive Johnny Olszewski. Former Lt. Governor and Republican National Committee chairman Michael Steele is the only prominent Republican so far being discussed.
 
Massachusetts: Former Massachusetts state Representative Geoff Diehl (R-Plymouth), who was the Republican US Senate nominee against incumbent Elizabeth Warren (D) in 2018, is making political noises suggesting he is considering challenging Gov. Charlie Baker (R) for re-nomination. Gov. Baker continues to be rated as one of the most liked Governors in the nation, often placing first in such polling among the 50 state chief executives, but those strong numbers largely come from the state’s Democratic voters. His standing within his own Republican Party is much weaker.
 
There are also several Massachusetts Democratic names coming to the forefront. Already announced for Governor is Harvard University political theorist Danielle Allen. Media reports suggest that Somerville Mayor Joe Curtatone (D) is also testing the waters for a statewide run.
 
Additionally, they mention top Democratic politicos such as Attorney General Maura Healey, Boston Mayor Marty Walsh, and former state Senator Ben Downing as possible candidates, but there is no evidence that any of them will launch a campaign. Despite Massachusetts’ strong Democratic foundation, Gov. Baker appears well positioned to win a third term.
 
One individual who immediately said he won’t challenge Mr. Baker is outgoing Rep. Joseph P. Kennedy III (D-Newton). Mr. Kennedy, just coming off a long US Senate primary campaign that he lost to Sen. Ed Markey (D), said this week that he is looking forward to “taking a breather from elective politics,” but holding a position within the new Biden Administration would be of interest.
 
Minnesota: Political blog reports in Minnesota indicate that two-term Rep. Pete Stauber (R-Hermantown/Duluth) is assessing his viability as a potential 2022 challenger to Gov. Tim Walz (D).
 
The potential political move makes sense for Rep. Stauber since Minnesota is likely to lose a congressional seat in reapportionment. With less population in the northern part of the state, there is a good chance that Rep. Stauber and incoming Rep. Michelle Fischbach (R), who just unseated 30-year congressional veteran Collin Peterson (D), could conceivably be paired in one large northern Minnesota congressional district.
 
North Carolina: Last Saturday, North Carolina State Supreme Court Chief Justice Cheri Beasley conceded her statewide judicial election to Republican Paul Newby, an Associate Justice of the court. After a full recount and the beginning of a hand sampling recount, Ms. Beasley ended the race, losing with a margin of just 413 votes from more than 5.4 million ballots cast.
 
Because the North Carolina Supreme Court Chief Justice appoints special judicial panels, the new Republican chief justice will have the power to set the three-judge panels who will eventually hear redistricting challenges once the legislature enacts post reapportionment maps. North Carolina will receive at least one new congressional seat when the 2020 census apportionment is announced sometime after the first of the year.
 
Ohio: Former US Rep. Jim Renacci (R), who held Sen. Sherrod Brown (D) to a 53-47% win in 2018, again made statements suggesting he will soon launch a primary campaign effort against Gov. Mike DeWine (R). Mr. Renacci was quoted on Twitter saying, “I will be either supporting candidates who are taking [Gov DeWine] on or running against him myself.” 
 
The Governor has come under fire in Republican circles for his strong anti-COVID economic shutdown measures. Therefore, whether Mr. Renacci eventually enters the race remains a question, but it does appear that Gov. DeWine is likely to face GOP primary opposition in 2022.
 
South Dakota: Gov. Kristi Noem (R), pushing aside some calls for her to challenge Sen. John Thune in the 2022 Republican US Senate primary, announced just before the Christmas break that she will seek a second term as Governor. Ms. Noem, a former at-large US Representative, was first elected the state’s chief executive in 2018.

 CITIES 
 New York City: Rep. Max Rose (D-Staten Island), who lost his congressional seat to state Assemblywoman Nicole Malliotakis (R) in November, has filed a campaign committee for the 2021 New York City Mayor’s race. Mr. Rose, however, stopped short of officially announcing his candidacy.
 
Former presidential candidate Andrew Yang was quoted as saying that he won’t make a decision about the Mayor’s race until after the Georgia Senate runoff elections are completed since he is working to help the Democratic candidates. Reports suggest, however, that he is making moves to establish a campaign and will join the burgeoning field of 11 candidates, including Rep. Rose, who are vying to replace term-limited Mayor Bill de Blasio.
 
According to Public Policy Polling (12/16-17; 775 NYC likely 2021 Democratic primary voters; interactive response system), surveying for the Education Reform Now Advocacy New York organization, Andrew Yang would lead the group with 17% preference followed closely by Brooklyn Borough President Eric Adams, who has 16% support. All other contenders were below the 8% threshold.