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Dec 23, 2022 • 1h 21min

CD265: Policing FTX

FTX, at one point the world’s third largest cryptocurrency exchange, went bankrupt, causing the entire cryptocurrency industry to crash. In this episode, hear highlights from Congressional testimony that will explain how FTX was able to grow so large while committing blatant fraud, how it’s possible that the government didn’t know and didn’t do anything to stop it, and hear about a Senate bill that’s branded as a solution but has concerning flaws of it’s own. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes What is FTX? Timothy Smith. Dec 22, 2022. Investopedia. Crypto Regulation Kyle Barr. Dec 1, 2022. Gizmodo. David Dayen. Nov 23, 2022. The American Prospect. David Dayen. Nov 17, 2022. The American Prospect. David Dayen. Nov 10, 2022. The American Prospect. Tom Emmer et al. Mar 16, 2022. emmer.house.gov. Lead-up to FTX Collapse Elizabeth Napolitano. Nov 9, 2022. NBC News. Tom Wilson and Angus Berwick. Nov 8, 2022. Reuters. Tracy Wang and Oliver Knight. Nov 6, 2022. Tracy Wang and Oliver Knight. Nov 6, 2022. CoinDesk. Ian Allison. Nov 2, 2022. CoinDesk. Seth. P Rosebrock, Assistant General Counsel, Enforcement, FDIC. Aug 18, 2022. FDIC. Tom Emmer André Beganski. Dec 11, 2022. Decrypt. Tony Romm. Dec 8, 2022. The Washington Post. Emily Brooks and Mychael Schnell. Nov 15, 2022. The Hill. FTX Collapse Shane Shifflett, Rob Barry, and Coulter Jones. Dec 5, 2022. The Wall Street Journal. Alexander Osipovich. Dec 3, 2022. The Wall Street Journal. David Gura. Nov 23, 2022. NPR. Steven Zeitchik. Nov 20, 2022. The Washington Post. Nov 17, 2022. PACER. Angus Berwick. Nov 11, 2022. Reuters. Jacob Bogage and Tory Newmyer. Nov 11, 2022. The Washington Post. Vicky Ge Huang, Alexander Osipovich, and Patricia Kowsmann. Nov 11, 2022. The Wall Street Journal. Lobbying and Campaign Donations Tory Newmyer and Steven Zeitchik. Dec 1, 2022. The Washington Post. Tory Newmyer and Peter Whoriskey. Nov 28, 2022. The Washington Post. Tony Romm. Nov 17, 2022. The Washington Post. Paul Kiernan. Nov 14, 2022. The Wall Street Journal. Brian Schwartz. Nov 14, 2022. CNBC. Tory Newmyer. Nov 12, 2022. The Washington Post. Luis Melgar et al. Oct 24, 2022. The Washington Post. Freddy Brewster. Aug 12, 2022. Los Angeles Times. Aftermath of the FTX Collapse Dec 12, 2022. Reuters. Emily Flitter, David Yaffe-Bellany and Matthew Goldstein. Dec 7, 2022. The New York Times. Alexander Osipovich, Alexander Saeedy and Alexander Gladstone. Dec 4, 2022. Mar 10, 2022. Cryptopedia. December 13 Hearing Dec 8, 2022. House Financial Services Committee. House Financial Services Committee. Sam Bankman-Fried Indictment Dec 13, 2022. The New York Times. Bills Audio Sources December 13, 2022 House Committee on Financial Services Witness: John J. Ray III, CEO, FTX Group Clip Transcripts Rep. Emanuel Cleaver (D-MO): Have you read the full testimony that was planned by our missing guest [Sam Bankman-Fried]? John Ray I have not read his full testimony. Some pieces of it been relayed to me, but I've not read it. I've not read one word of it actually. Rep. Emanuel Cleaver (D-MO): Yeah, I don't know him personally and probably don't want to. But this testimony is so disrespectful. I mean, there's not a person up here would like to show this to their children. In line two of this message, he says, and I quote, "I would like to start out by firmly stating under oath...* And yeah, I can't even say it publicly. The next two words, absolutely insulting. This is the Congress of the United States. Rep. Warren Davidson (R-OH): So when when customers deposited funds into their FTX accounts, where did the cash go? John Ray: Well, sometimes the money wasn't deposited in the FTX account it was sent to Alameda to begin with. Rep. Warren Davidson (R-OH): It was misdirected from from the start straight to Alameda. John Ray: There was certainly some time period where there's no bank account at .com and then ultimately, if you look at the structure of this, Alameda is essentially a customer on that .com exchange, and effectively, you know, borrowed money from or just transferred money from FTX customers to take its own positions on the Alameda hedge fund. Rep. Patrick McHenry (R-NC): So Alameda research and the venture capital business, what did Alameda research do? John Ray: Essentially made crypto investments, engaged in margin trading, took long and short positions in crypto, essentially invested in crypto. But of course, we now know also invested in over $5 billion of other assets which are in a variety of sectors. Patrick McHenry (R-NC): Can you describe the differences between the FTX.com and FTX.us silos? John Ray: Yes. Very simply FTX.us was for US citizens who wanted to trade crypto; FTX.com, US citizens were not allowed to trade on that exchange. That's very simple. And I would make one other comment, which is separate apart from any of those two silos. It was ledger x, which is a regulated entity regulated by the CFTC, solvent and separate from the FTX.us silo. Patrick McHenry (R-NC): Okay, and that is a distinct silo, that's a distinct company? John Ray: That is a distinct company within the US silo, yes. Patrick McHenry (R-NC): Okay. Patrick McHenry (R-NC):: What was the relationship between FTX.com and FTX.us? Was is there a distinction between the two? John Ray: There was a public distinction between the two. What we're seeing now is that the crypto assets for both ftx.com and for FTX.us were housed in the same database. It's called the AWS system, which is just an acronym for Amazon Web Services. It was all housed in the same web format. Patrick McHenry (R-NC):: And is that distinct from Alameda's assets? John Ray: Yes, it is. John Ray: In essence you know, Alameda was a user, effectively a customer, of FTX.com. That's how it was essentially structured. John Ray: There was no audit at Alameda, no audit at the venture silo. There was audit at the US silo and also audit at the the .com silo. I can't speak to the integrity or quality of those audits. We're reviewing, obviously, the books and records. And as I've said earlier, you know, much of those books and records were maintained on a fairly unsophisticated ledger ledger which works workbooks. John Ray: It's an extensive list, it really crosses the entire spectrum of the company, from lack of lists of bank accounts, hundreds of bank accounts dispersed all over the world, lack of a complete list of employees and their functions by group or name, extensive use of independent contractors as opposed to employees, lack of insurance that you'd normally would see in certain businesses, either inadequate insurance or complete gaps in insurance. For example, the Alameda silo had no insurance whatsoever. So those are I mean, there's, the list goes on and on. You know, we could spend all day on them. John Ray: While many things are unknown at this stage, we're at a very preliminary stage, many questions remain, we know the following. First customer assets at ftx.com were commingled with assets from the Alameda trading platform. That much is clear. Second, Alameda used client funds to engage in margin trading, which exposed customer funds to massive losses. Third, the FTX group went on a spending binge in 2021 and 2022, during which $5 billion was spent on a myriad of businesses and investments, many of which may only be worth a fraction of what was paid for them. Fourth, loans and other payments were made to insiders in excess of $1.5 billion. Fifth, Alameda's business model as a market maker required funds to be deployed to various third party exchanges, which were inherently unsafe and further exacerbated by the limited protections offered in certain of those foreign jurisdictions. John Ray: I accepted the position of Chief Executive Officer of FTX in the early morning hours of November 11 [2022]. It immediately became clear to me that chapter 11 was the best course available to preserve any remaining value of FTX. Therefore, my first act as CEO was authorized the chapter 11 filings. John Ray: It's virtually unlimited in terms of the lack of controls: no centralized records on banking, no daily reconciliations of crypto assets, silos where there's no insurance, inadequate insurance, no independent board, no safeguards that limit, who controls and asset. So senior management literally could get access to any of the accounts in any of the silos. No separateness between customer money and other customer money or other other assets. It's virtually unlimited in terms of the lack of controls. And that's really the point of the unprecedent comment. I've just never seen anything like it in 40 years of doing restructuring work and corporate corporate legal work. It's just a dearth of of information. John Ray: But again, users had multiple accounts. For example, if they had a different trading position, they may have opened multiple accounts. We know it's a big number. It's in the millions on the customer accounts, and we know it's several billion dollars in losses. Assigning those losses to customer accounts will be our next challenge. John Ray: The FTX group's collapse appears to stem from absolute concentration of control in the hands of a small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company entrusted with other people's money or assets. Some of the unacceptable management practices identified so far include the use of computer infrastructure that gave individuals and senior management access to systems that stored customers' assets without security controls to prevent them from redirecting those assets; the storing of certain private keys to access hundreds of millions of dollars in crypto assets without effective security controls or encryption; the ability of Alameda to borrow funds held at FTX.com to be utilized for its own trading or investments without any effective limits whatsoever; the commingling of assets; the lack of complete documentation for transactions involving nearly 500 separate investments made with FTX group funds and assets. In the absence of audited or reliable financial statements, the lack of personnel and financial and risk management functions, and the absence of independent governance throughout the FTX group, a fundamental challenge we face is there in many respects we are starting from near zero in terms of the corporate infrastructure and record keeping that one would expect in a multibillion dollar corporation. John Ray: The FTX group is unusual in the sense that, you know, I've done probably a dozen large scale bankruptcies over my career, including Enron, of course. Every one of those entities had some financial problem or another, they have some characteristics that are in common. This one is unusual. And it's unusual in the sense that literally, you know, there's no record keeping whatsoever. It's the absence of record keeping. Employees would communicate, you know, invoicing and expenses on on Slack, which is essentially a way of communicating for chat rooms. They use QuickBooks, a multibillion dollar company using QuickBooks. Rep. Ann Wagner (R-MO): QuickBooks? John Ray: QuickBooks. Nothing against QuickBooks, it's very nice tool, just not for a multibillion dollar company. There's no independent board, right? We had one person really controlling this. No independent board. That's highly unusual in the size company this is. And it's made all the more complex because we're not dealing with, you know, widgets or, you know, something that's tangible. We're dealing with with with crypto, and the technological issues are made worse when you're dealing with an asset such as crypto. John Ray: I've just never seen an utter lack of record keeping. Absolutely no internal controls whatsoever. John Ray: The operation of Alameda really depended based on the way it was operated for the use of customer funds. That's the major breakdown here of funds from ftx.com, which was the exchange for non US citizens, those funds were used at Alameda to make investments and other disbursements. John Ray: There's no distinction whatsoever. The owners of the company could really run free reign across all four silos. John Ray: The loans that were given to Mr. Bankman-Fried, not just one loan it was numerous loans, some of which were documented by individual promissory notes. There's no description of what the purpose of the loan was. In one instance, he signed both as the issuer of the loan, as well as the recipient of the loan. But we have no information at this time as to what the purpose or the use of those funds were. And that is part of our investigation. John Ray: At the end of the day, we're not going to be able to recover all the losses here. Money was spent that we'll never get back. There will be losses on the international side. We're hopeful on the US side. He'll answer to others related to what happened here. Our job is just to find the assets and try to get customers their money back as quickly as possible. John Ray: Essentially, they had two exchanges that allowed users to trade crypto, and then there was the hedge fund. It's as simple as that. The users were allowed to make a variety of investments. They had a more expansive ability to trade crypto if you are a non-U.S. citizen on the .com exchange, but I know what's been described publicly is very complex. It is to some extent, but essentially, you had two exchanges, and you had a hedge fund. Inside both the US silos I've mentioned and inside the silos for .com there were regulated entities. We have regulated entities that are, for example, in Japan that are solvent, we had a regulated entity, ledger X, that was solvent. Those are sort of distinct from the other basic operations that we had, which are the two exchanges. John Ray: The principal issue that the company is facing in the crypto area, and from a technology perspective, it is different from the other bankruptcies because it's not a plane, not a boat. It's this crypto asset and it has inherently some difficulties. You know, the assets can be taken or lost. We have assets there in what are called Hot wallets, and those are in cold wallets. Hot wallets are very vulnerable to to hacking. If you've done any looking on the internet, you'll find that hacking is almost ordinary course in this business sector. They're very, lots of vulnerability to the wallets. So that's this company, unfortunately had a very, very challenging record here. You know, for some transfers there was no pathway for it. Our keys aren't stored in a centralized location. We don't know where all of our wallets are. Passwords were sometimes kept in just plain text format. So this company was sort of uniquely positioned to fail. John Ray: So funds were taken from customers, funds were invested, trading losses incurred in Alameda and then funds were deployed, that will never be valued at the same dollar amount. There was over $5 billion of investments made. Certainly, there's some value there and we'll try to get that value and sell those assets. But oftentimes, even when he made those sorts of investments, whether it was directly or through others in management, sometimes he would do that really without any pro forma or any valuation. Not really quite sure how some of the purchase price numbers were derived. So it gives you a sort of worry obviously, that the purchases were overvalued so there's a concern there as well. John Ray: Alameda was a customer, if you will, of the exchange and it's through that customer relationship, plus other arrangements, that allowed Alameda to borrow those funds, and then pick positions on the exchange like anyone, you know, who would hedge an asset in the market. He had unusually large positions, of course, and sometimes they were wrong in those positions, and they resulted in big losses. But ultimately, the commingling issue is the same in a different issue. He took the money from FTX to cover those positions and ultimately, when customers went to get their money back from .com there was a run on the bank. John Ray: The Alameda fund, well that's just the fund that drew resources from the exchanges, so it's really separate, it was not for customers per se, it was just simply a hedge fund. John Ray: For structural purposes and just for ease of presentation, we tried to take the over 100 entities and we put those in four silos. To demystify that, it's very simple. There was a U.S. silo, which was the FTX.us exchange for US investors. There was an international exchange called FTX.com. Again, for non-U.S. persons that invested in crypto. There was Alameda, which is purely a crypto hedge fund, which made other investments, venture capital type investments. Then there's a fourth entity which was purely investments. And although our investigation is not complete, those investments were most likely made with either Alameda money or money that originally came from ftx.com. But that fourth silo is just purely investments Rep. Patrick McHenry (R-NC): And who owned those four silos? John Ray: All those entities are owned or controlled by Sam Bankman-Fried. Rep. Brad Sherman (D-CA): Now I've heard from some on the other side criticizing the SEC and in July in this room I criticized the Head of Enforcement at the SEC for not going after crypto exchanges. But the fact is that without objection I'd like to put on the record a letter signed by 19 Republican members designed to push back on the SEC, a brushback pitch if you're familiar with baseball, attacking the SEC for paying attention to and I quote, "the purported risks of digital assets." And I'd like to put on the record without objection comments from eight members made in this room that were designed to attack the SEC as being Luddite and anti-innovation for their efforts. Rep. Nydia Velázquez (D-NY): Mr. Ray, a number of their debtors in the FTX group are located in offshore jurisdictions. Will this complicate the efforts to retrieve the assets of those there? If so why? John Ray: No, I don't think it will complicate it at all. The various jurisdictions, historically in bankruptcy, and I've been in a number of cross border situations, the jurisdictions will cooperate with each other. The regulators in all these jurisdictions, I think, realize that everyone's there for a common purpose, to protect the victims and recover assets for the victims of these situations. Rep. Nydia Velázquez (D-NY): How much have you been able to secure and where are most of these assets located? John Ray: We've been able to secure over a billion dollars of assets. We've secured those two cold wallets in a secure location. It's an ongoing process, though, which will take weeks and perhaps months to secure all the assets. Rep. Nydia Velázquez (D-NY): Are most creditors located in the US or foreign jurisdictions. John Ray: The majority of the creditors trade through the .com silo and are outside of this jurisdiction, although there are some foreign customers that are on the US silo, and vice versa. Rep. Ann Wagner (R-MO): Reports suggest that ftx.com transferred more than half of its customer funds, roughly $10 billion, to Alameda research. Is that accurate, sir? John Ray: Our work is not done, we don't have exact numbers for you today, but I will say it's several billion dollars, in that range, so we know that the size of the harm was significant. Rep. Maxine Waters (D-CA): Have you seen evidence of such a cover up? Have you seen evidence that there was any independent governance of Alameda separate and apart from that of the exchange? John Ray: The operations of the FTX group were not segregated. It was really operated as one company. As a result, there's no distinction virtually, between the operations of the company and who controlled those operations. Rep. Maxine Waters (D-CA): Did FTX have sufficient risk management systems and controls to appropriately monitor any leverage the business took on and the interconnections it had with businesses, like again, Alameda. John Ray: There were virtually no internal controls and no separateness whatsoever. December 1, 2022 Senate Committee on Agriculture, Nutrition, and Forestry Witness: Rostin Behnam, Chairman, Commodity Futures Trading Commission Clip Transcripts 18:30 Debbie Stabenow (D-MI): I've said this before and I'll say it again: the Digital Commodities Consumer Protection Act does not -- does not -- take authority away from other financial regulators. Nor does it make the CFTC the primary crypto regulator, because crypto assets can be used in many different ways. No single financial regulator has the expertise or the authority to regulate the entire industry. 24:30 John Boozman (R-AK): Many have asked why is the Ag Committee involved in this? The Ag Committee is involved because this committee and no other committee in the Senate is responsible for the oversight of the nation's commodity markets. Bitcoin, although a crypto currency, is a commodity. It's a commodity in the eyes of the federal courts and the opinion of the SEC Chairman, there is no dispute about this. If there are exchanges where commodities are traded, be it wheat, oil, or Bitcoin, then they must be regulated. It's simply that simple. 32:45 Rostin Behnam: I have asked Congress directly for clear authority to impose our traditional regulatory regime over the digital asset commodity market. 33:00 Rostin Behnam: I have not been shy about my encouragement of bills that contemplate shared responsibility for the CFTC and the Securities Exchange Commission, where the SEC would utilize its existing authority and reporting regime requirements for all security tokens, while the CFTC would apply its market based rules for the more limited subset of commodity tokens, which do not have the same characteristics of security tokens. 41:00 Rostin Behnam: I can though share with this committee with respect to me, my team and I have taken an initial review of my calendar and what we've observed is that my team and I met with Mr. Bankman-Fried and his team. Over the past 14 months, we met 10 times in the CFTC office at their request, all in relation to this DCO this Clearinghouse application. Nine out of the 10 times we were in Washington, one was at a widely held conference in Florida earlier this year. In addition, there were two phone calls, I believe, and a number of messages, all in relation to the DCO application, providing us updates suggesting that they were answering questions from different divisions, and trying as I said, to doggedly move the application along and to get it approved. 48:00 Sen. John Boozman (R-AK): If ftx.com had been a registered U.S. exchange, would the CFTC have been able to mitigate what happened. Rostin Behnam: Senator, you know, with our current authority, the answer is now. We need the authority to get into a CFTC registered exchange, as you point out. If we had that authority, and they were registered, given what we know from the facts about conflicts of interest, commingling funds, books and records, we would have been able to prohibit it. And I would point to what we're doing with Ledger X. On a daily basis our staff is in direct communication not only with Ledger X, but the custodians themselves, able to identify customer property, and customer money. Imagine that scenario with FTX.us if we had a daily lens into the location of customer money and customer property, you can imagine, given what we've learned about what's happened with FTX, we could have certainly prohibited many of the actions that we're hearing about. 1:16:00 Rostin Behnam: In terms of regulation of cash markets, right, the spot market, we simply do not have authority to register cash market exchanges or any intermediary broker dealer entity within that structure and that's what concerns me, this is the gap. 1:59:30 Rostin Behnam: Unfortunately, when we act, it's often after the fact because the information that allows us to bring an enforcement action in digital asset cash commodity markets, is only because information is coming to us from outsiders, from referrals, from tips, from whistleblowers, and this is in stark contrast to some of the surveillance tools and examination tools that we would have if we had a comprehensive regulatory framework over digital asset commodities. 2:07:00 Sen. Dick Durbin (D-IL): There'll be a reporter waiting in the hall -- I've already talked to her this morning -- who will ask you, "Did he ever contribute to your campaign?" I said "Oh, no, I never heard of the man." She said "You're wrong, Senator, he contributed to you." So the cryptocurrency people are active politically. And they are trying to achieve a political end here. It is their right as citizens of this country to do that. But it really calls on us to make sure that whatever we do is credible under those circumstances. 2:22:30 Rostin Behnam: I can't speak to what Mr. Bankman-Fried or anyone at FTX was thinking when they were advocating for regulation, but the remarkable thing is to think about it in the context of compliance and what we've learned about the FTX entities and just thinking about the bill that Senator Stabenow and Boozman introduced, they would have been so far out of compliance that it just wouldn't have even been possible. September 15, 2022 Senate Committee on Agriculture, Nutrition, and Forestry Witnesses: Rostin Behnam, Chairman, Commodity Futures Trading Commission Todd Phillips, Director, Financial Regulation and Corporate Governance, Center for American Progress Shelia Warren, Chief Executive Officer, Crypto Council for Innovation Christine Parker, Vice President, Deputy General Counsel, Coinbase Heath Tarbert, Chief Legal Officer, Citadel Securities Denelle Dixon, Chief Executive Officer, Stellar Development Foundation December 8, 2021 House Committee on Financial Services Witnesses: Jeremy Allaire, Co-Founder, Chairman and CEO, Circle Samuel Bankman-Fried, Founder and CEO, FTX Brian P. Brooks, CEO, Bitfury Group Charles Cascarilla, CEO and co-Founder, Paxos Trust Company Denelle Dixon, CEO and Executive Director, Stellar Development Foundation Alesia Jeanne Haas, CEO, Coinbase Inc. and CFO, Coinbase Global Inc. Clip Transcripts 23:30 Sam Bankman-Fried: We are already regulated and licensed. We have many licenses globally. Here in the United States, we are regulated by the states under the money service business and money transmitting regime, and we are regulated nationally by the CFTC where we have a DCO, a DCM, a swap execution facility, and other licensure. 1:13:30 Sam Bankman-Fried: One of the really innovative properties of cryptocurrency markets are 24/7 risk monitoring and engines. We do not have overnight risk or weekend risk or holiday risk in the same way traditional assets do, which allow risk monitoring and de risking of positions in real time to help mitigate volatility. We've been operating for a number of years with billions of dollars of open interest. We've never had customer losses, clawbacks or anything like that. Even going through periods of large movements in both directions. We store collateral from our users in a way which is not always done in the traditional financial ecosystem to backstop positions. And the last thing that I'll say is if you look at what precipitated some of the 2008 financial crisis, you saw a number of bilateral bespoke non-reported transactions happening between financial counterparties which then got repackaged and releveraged again and again and again, such that no one knew how much risk was in that system until it all fell apart. If you compare that to what happens on FTX or other major cryptocurrency venues today, there is complete transparency about the full open interest. There is complete transparency about the positions that are held. There is a robust, consistent risk framework. 1:34:00 Sam Bankman-Fried: In addition to a bunch of international licenses in the United States, we are participating in that system you referenced with the money transmitter and money service businesses license is in addition to that, however, we are also licensed by the CFTC. We have a DCO, a DCM, and other licensure from them through FTX.us derivatives and we look forward to continuing to work with them to build out our product suite. We just submitted a 800 page, I believe, proposal to them a few days ago, which we're excited to discuss and we're also happy to talk with other regulators about potential products in the United States. 2:37:00 Rep. Tom Emmer (R-MN): Now it's my understanding that FTX uses surveillance trade technology akin to the technology national Securities Exchanges use to protect investors and ensure sound spot markets. What does this technology and any other tools FTX uses to protect the spot market from fraud and manipulation look like? Sam Bankman-Fried: Yeah. So, you know, like other exchanges, we do have these technologies in addition to the, you know, new customer policies that we can identify individuals associated with trades. We have surveillance for unusual trading activity. We have manual inspections of anything that you know, gets flagged either by the automated surveillance or by manual inspection. And we do this with the trading activity with deposits and withdrawals and everything else. Rep. Tom Emmer (R-MN): Sounds like you're doing a lot to make sure there is no fraud or other manipulation. Thank you Mr. Bankman-Fried, again, for helping us understand the extensive guardrails a cryptocurrency exchange like FTX has in place to ensure sound crypto spot markets for investors. 2:52:30 Rep. Cindy Axne (D-Iowa): Mr. Bankman-Fried, I'd like to start by asking you the first question. FTX.us has a derivatives platform and recently bought ledger x as part of that. Is that correct? Sam Bankman-Fried: Yes. Rep. Cindy Axne (D-Iowa): Okay, thank you. And that platform is registered with the CFTC. Is that correct? Sam Bankman-Fried: Yep. Rep. Cindy Axne (D-Iowa): Okay, perfect. So I just want to clarify something. And this isn't to say anybody's doing any wrong. It's just to get the lay of the land. You also have an exchange for Bitcoin and other tokens, but that is not registered with either the CFTC or the SEC. Is that correct? Sam Bankman-Fried: That's correct. Currently, neither of them are primary markets regulated for spot Bitcoin to USD markets. Rep. Cindy Axne (D-Iowa): Okay, thank you. And I know you're registered as a money transmitter, but that's not the same kind of oversight that we'll see from a federal market regulator. I also sit on the Agriculture Committee, which oversees the CFTC, so a gap like this is especially concerning to me. And the big problem that I see here, from what I understand, is that the CFTC doesn't have regulatory authority for spot trading of commodities, just their derivatives. So that leaves consumers with inconsistent protections, which is a concern that I have. 2:55:00 Rep. Cindy Axne (D-Iowa): Bitcoin, which has almost a trillion dollars invested in it, has CFTC oversight for people who are trading futures and options, but not for people who are trading the currency itself. Is that right? Sam Bankman-Fried: That is essentially correct. Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Dec 11, 2022 • 1h 2min

CD264: Cryptocurrencies and Blockchain

FTX, a large cryptocurrency exchange, recently went bankrupt, leading to calls for government regulation of cryptocurrencies. But you might be wondering, what are cryptocurrencies? In part one of this two-part series, listen to expert testimony provided over a four-year period informing Congress about the cryptocurrency industry, the promise of blockchain, problems - both real and overblown - with this new technology, and how best to regulate this complicated industry. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes Proof of Work Jake Frankenfield. May 2, 2022. Investopedia. Initial Coin Offering (ICO) Jake Frankenfield. Aug 18, 2022. Investopedia. Sherwin Dowlat. Jul 11, 2018. Satis Group. Madison Cawthorn The Associated Press. Dec 7, 2022. NPR. Regulations Cheyenne Ligon. Dec 5, 2022. CoinDesk. Bills Sponsor: Sen. Debbie Stabenow Audio Sources January 20, 2022 House Committee on Energy & Commerce, Subcommittee on Oversight and Investigations Witnesses: , Weill Family Foundation and Joan and Sanford I. Weill Professor, Jacobs Technion-Cornell Institute, Cornell Tech , Chief Executive Officer, Soluna Computing, Inc. , Chief Executive Officer, BitFury , Former Chief Executive Officer, Chelan County Public Utility District and Bonneville Power Administration , Shareholder Jordan Ramis P.C. June 16, 2021 House Committee on Financial Services, Subcommittee on National Security, International Development and Monetary Policy Witnesses: , Global Head of Policy & Regulatory Affairs, Chainalysis , Senior Director, Center on Economic and Financial Power, Foundation for Defense of Democracies February 25, 2021 House Financial Services Committee, Subcommittee on National Security, International Development and Monetary Policy Witness , Former Assistant Secretary for Terrorist Financing and Financial Crimes, U.S. Department of the Treasury July 30, 2019 Senate Committee on Banking, Housing, and Urban Affairs Committee concluded a hearing to examine regulatory frameworks for digital currencies and blockchain, including S. 2243, to amend the Expedited Funds Availability Act to require that funds deposited be available for withdrawal in real-time. Witnesses: , Co-Founder, Chairman and Chief Executive Officer, Circle, on behalf of The Blockchain Association , Specialist in International Trade and Finance, Congressional Research Service , Professor of Law, University of California, Irvine School of Law October 11, 2018 Senate Committee on Banking, Housing, and Urban Affairs Committee concluded a hearing to examine the cryptocurrency and blockchain ecosystem, including S. 3179, to require the Comptroller General of the United States to carry out a study on how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking. Witnesses: , Professor of Economics and International Business, New York University Stern School of Business , Director of Research, Coin Center Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Nov 28, 2022 • 1h 33min

CD263: Republicans Take the House

The results are in: The Democrats will keep the Senate, the Republican will take the House. In this episode, in preparation for the 118th Congress, Jen analyzes the detailed policy documents released by the House Republicans to see what they could reasonably accomplish, who their policies would help or hurt, and how they will likely wield their power in a politically divided Congress. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes The Southern Border David J. Bier. Sep 14, 2022. Cato Institute. May 2022. The Healthy Future Task Force. Jul 2022. American Security Task Force. American Federation of Teachers. Sean Altekruse et al. January 17, 2020. PLOS One 15(1). Tiffany Stecker. Feb 20, 2019. Bloomberg Law. Censorship Sep 2022. China Sep 2022. China Task Force. Commitment to America Megan Loe. Oct 25, 2022. Verify. House Republicans. House Republicans. Sep 20, 2022. House Republicans. Sep 2022. Jobs and the Economy Task Force. Energy and the Environment August 9, 2022. The Energy, Climate, & Conservation Task Force. Mining Sep 2022. The Energy, Climate, & Conservation Task Force. John Emeigh. Jun 2, 2022. KXLF Butte. Betsy Smidinger. August 30, 2021. U.S. Environmental Protection Agency. U.S. Environmental Protection Agency. Ryan DeMars. 2012. Teach the Earth. Clark Fork Watershed Education Program. Dams Mar 2, 2021. MIT Climate Portal. Fossil Fuels Jun 17, 2022. The Energy, Climate, & Conservation Task Force. Jun 10, 2022. The Energy, Climate, & Conservation Task Force. Jeff Brady and Neela Banerjee. Jun 9, 2021. Gutting Environmental Law Jun 10, 2022. The Energy, Climate, & Conservation Task Force. Pesticides Jul 15, 2022. The Energy, Climate, & Conservation Task Force. Jul 8, 2021. Cancer Treatment Centers of America. Emily Dixon. Feb 15, 2019. CNN. Water May 11, 2015. NPR. Seth Siegel with Naty Barak. Jun 1, 2017. Real Assets Adviser 4(6). Healthcare Aug 2022. The Healthy Future Task Force. Jul 2022. The Healthy Future Task Force. Jun 2022. The Healthy Future Task Force. Jun 2022. The Healthy Future Task Force. Financial Regulations Sep 2022. Jobs & the Economy Task Force. Sep 2022. Jobs & the Economy Task Force. Jun 2022. The Energy, Climate, & Conservation Task Force. Parents Bill of Rights Committee on Education & Labor Republicans. Committee on Education & Labor Republicans. 2014 Government Funding 113th Congresss. 113th Congress. Oct 16, 2013. Clerk of the U.S. House of Representatives. Workforce Education Jul 2022. Jobs & the Economy Task Force. Speak Out Act 117th Congress. Emilie Shumway. Nov 16, 2022. Legal Dive. Respect for Marriage Act 117th Congress. Annie Karni. Nov 16, 2022. The New York Times. Maggie Astor. Nov 16, 2022. The New York Times. Al Weaver. Nov 16, 2022. The Hill. Soon-to-be Laws Audio Sources Sep 23, 2022 Kevin McCarthy on YouTube Clips Rep. Jim Jordan (R-OH): They told us so many things that turned out not to be accurate. I mean, just think about it, they told us this thing didn't come from a lab. Sure looks like it did. But they want us to believe it was a bat to a penguin to Joe Rogan. And then we all got, it right? I'm just a country boy from Ohio. But I kind of think it probably came from a lab. I asked Dr. Burks a question three months ago in a hearing. I said Dr. Burks, when the Biden administration told us that the vaccinated couldn't get it, were they guessing or lying? Interesting. She paused and said, Well, Congressman, I like to think they hoped. I said, so it was a guess, a lie, or a hope. I'm not against the vaccine. I'm just saying that we're big boys and girls, we can handle the truth. Give us the facts. We are committed to doing the investigations that need to be done. Rep. Kevin McCarthy (R-CA): On our very first bill we're going to repeal 87,000 IRS agents. Rep. Kevin McCarthy (R-CA): We believe in fairness. We should ensure women only compete in women's sports. Rep. Steve Scalise (R-LA): We will have oversight hearings on what happened. Who was responsible for opening up America's southern border? How many have come in? How many are on the terrorist watch list that we know of, and when will we start doing something about it? In our commitment to America, we talk about securing America's border and holding them accountable. We will give Secretary Mayorkas a reserved parking spot, he will be testifying so much about this. So that's the kind of oversight we're going to be doing. February 5, 2014 “Little fish” montage featuring Former Rep. Doc Hastings (R-WA), Former Rep. Devin Nunes (R-CA), and Rep. Kevin McCarthy (R-CA). October 8, 2013 Rep. Pete Sessions (R-TX): I am very proud of not only what our Speaker is doing but of our majority leader, ERIC CANTOR, and our whip, KEVIN MC CARTHY. October 1, 2013 Former Rep. Phil Gingrey (R-GA): In fact, House Republicans have passed three continuing resolutions, or temporary spending bills, to keep this government open and to either defund or to delay ObamaCare—which the majority of Americans support. They were against it 31⁄2 years ago; they are against it today; and they support what we are doing in the Republican House of Representatives. I praise and commend Speaker JOHN BOEHNER and the leadership of ERIC CANTOR and KEVIN MCCARTHY for the strength that they have had in regard to this and for being so inclusive for every single member of our caucus. 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Nov 12, 2022 • 1h 30min

CD262: Inside C-SPAN with Howard Mortman

As we wait for the final results of the midterm elections to determine which party will control the House, enjoy Jen's interview with C-SPAN Communications Director, Howard Mortman. Jen and Howard discuss all things C-SPAN, including what C-SPAN crews are and are not allowed to film and the network's funding sources and distribution, as well has Howard's podcast, the Weekly, and his book, When Rabbis Bless Congress. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Executive Producer Recommended Sources Background Sources Howard Mortman Jen on C-SPAN Alzheimer’s Testimony Seth Rogan's and Charity February 26, 2014. Senate Appropriations Subcommittee on Labor, Health, and Human Services. Origins of COVID-19 Katherine Eban and Jeff Kao. October 28, 2022. ProPublica. Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Oct 30, 2022 • 1h 45min

CD261: Inflation Reduction Act

The Inflation Reduction Act is a new law designed to hasten the United States’ energy transition (and do nothing about inflation). In the last episode before the midterm election, learn about the energy path the Democratic Party has plotted for us and learn how this new law can possibly save you tens of thousands of dollars. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Jen Podcast Appearances The Living Numbers Podcast with Tony Rambles. A Word with Tom Merritt. Background Sources Recommended Congressional Dish Episodes Tax Credits and Refunds Home Energy Efficiency Tax Credits eFile. Rocky Mengle. Sept 16, 2022. Kiplinger. Updated Aug 18, 2022. Energy Star. Electric Appliance Rebates U.S. Census Bureau. Electric Car Tax Credit Cornell Law School Legal Information Institute. Alternative Fuels Data Center. U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. Kelley R. Taylor. Oct 18, 2022. Kiplinger. Greg Iacurci. Oct 15, 2022. CNBC. John Bozzella. Aug 5, 2022. Alliance for Automotive Innovation. John Bogna. Jun 22, 2022. PCMag. U.S. Geological Survey. U.S. Department of the Interior. Princeton University Research & Project Administration. Alternative Fuel vehicle refueling property credit Kelley R. Taylor. Sept 14, 2022. Kiplinger. Cornell Law School Legal Information Institute. Hydrogen Catherine Clifford. Sep 8, 2022. CNBC. Emma Ochu et al. Jun 17, 2021. Columbia University School of International and Public Affairs, Center on Global Energy Policy. Open Secrets. Jay Bartlett and Alan Krupnick. December 2020. Resources for the Future. 24/7 Wall St. Feb 16, 2020. Market Watch. Health Care Oct 5, 2022. Centers for Medicare & Medicaid Services. 2022. Centers for Medicare & Medicaid Services. Carbon Capture Angela C. Jones and Ashley J. Lawson. Oct 5, 2022. Congressional Research Service. Emily Pontecorvo. Aug 22, 2022. Grist. 2021. Global CCS Institute. Nov 17, 2011. European Environment Agency. Offshore Wind Leases Abby Husselbee and Hannah Oakes. Aug 25, 2022. Harvard University Environmental & Energy Law Program. Sept 8, 2020. The White House. Fossil Fuels David Jordan. Oct 6, 2022. Roll Call. Aug 18, 2022. Enersection. Cornell Law School Legal Information Institute. The Associated Press. Apr 16, 2022. NPR. Taxes Kelley R. Taylor. Oct 10, 2022. Kiplinger. August 16, 2022. EY. Jacob Bogage. Aug 12, 2022. The Washington Post. Peter Warren. Aug 11, 2022. Empire Center. Open Secrets. November 13, 2017. Congressional Budget Office. The Law Revised August 5, 2022. Congressional Budget Office. Audio Sources September 22, 2022 Senate Committee on Energy and Natural Resources Witnesses: Tim Hemstreet, Managing Director for Renewable Energy Development, PacifiCorp Spencer Nelson, Managing Director, Research and New Initiatives, ClearPath Ted Wiley, President and Chief Operating Officer, Form Energy 19:19 Sen. Joe Manchin (D-WV): When it comes to storage, there has rightly been a focus on the supply chain, particularly for lithium ion batteries that power electric vehicles and phones in our pockets and many other modern technologies. While we have benefited from the use of this important battery chemistry, the fact that China is responsible for 75% of global lithium ion battery production, including 60% of the world's cathode production and 80% of the world's anode production, should give everyone pause. That is why I was proud to champion Inflation Reduction Act which incentivized the onshoring of the entire battery supply chain, from the production and processing of raw materials, to the battery pack assembly and everything in between. March 31, 2022 Senate Committee on Energy and Natural Resources Witnesses: Dr. Steve Fortier, Director, USGS National Minerals Information Center, U.S. Department of the Interior Scott Melbye, President, Uranium Producers of America Julie Padilla, Chief Regulatory Officer, Twin Metals Minnesota Abigail Wulf, Vice President, Critical Minerals Strategy and Director of the Center for Critical Minerals Strategy, Securing America's Future Energy Dr. Paul Ziemkiewicz, Director, West Virginia Water Research Institute, West Virginia University 24:14 Sen. Joe Manchin (D-WV): It makes no sense to remain beholden to bad actors when we have abundant resources in manufacturing know-how here in the United States. And make no mistake, we are beholden, particularly when it comes to many of the minerals that go into clean energy technologies. That is why I've sounded the alarm about going down the path of EVs alone and advocated for equal treatment for hydrogen 45:08 Abigail Wulf: As things stand, without some significant course corrections on America's critical minerals enterprise, the leading automobile power won't be the United States. It will be China. Not because of superior design or technology, but because of their massive head start and established market power, if not utter dominance, in all aspects of the supply chain that powers these [electric] vehicles. But simply mining alone does not begin to address the fundamentals of America's mineral supply chain challenge. Where we are most lacking and where China is most dominant is in that crucial but largely hidden processing phase and midstream component production. We simply can't dig up a rock and stick it in a Tesla. You have to crush it, smelt it, and refine it into precursor material that has been sold to somebody else to turn it into battery guts, namely cathodes, anodes and electrolytes. Today, the United States has less than 4% of all minerals processing capacity and makes 0% of the world's cathodes and anodes. By contrast, China is the world's largest processor of copper, nickel, cobalt, lithium and rare earth elements, and they control 60% of anode production and 40% of global cathode production. Consider that in 2019, about 70% of the world's cobalt supply was mined in the Democratic Republic of Congo, but more than 70% of that cobalt was refined in or controlled by China. February 2, 2022 Senate Committee on Energy and Natural Resources Witnesses Dr. Sunita Satyapal, Director, Hydrogen and Fuel Cell Technologies Office, Hydrogen Program Coordinator, U.S. Department of Energy Dr. Glen Richard Murrell, Executive Director, Wyoming Energy Authority Jonathan Lewis, Senior Counsel and Director of Transportation Decarbonization, Clean Air Task Force Michael J. Graff, Chairman & Chief Executive Officer, American Air Liquide Holdings, Inc. Brian Hlavinka, Vice President, New Energy Ventures, Corporate Strategic Development, Williams 21:07 Sen. Joe Manchin (D-WV): However, we have some challenges to tackle in order to build a clean hydrogen economy. Producing hydrogen without emissions is two to six times the cost of current production methods. Also, retrofitting end-use applications to use hydrogen as a feedstock, from chemical plants to cars and trucks, will take huge investments from both public and private sectors. This is the demand that we need to develop hydrogen markets that can sustain themselves. The other big challenge is the safe and efficient transport and storage of large volumes of hydrogen, given its physical properties. There's a lot of promising work being done in this space and will allow us to leverage our vast natural gas pipeline network to transport hydrogen to market. 22:00 Sen. Joe Manchin (D-WV): That is why I made research, development, and demonstration of these technologies a central part of the Energy Infrastructure Act, which this committee reported with bipartisan support last year, and which was subsequently included in the recently enacted Bipartisan Infrastructure Law. In that bill, we fund $9.5 billion in research, development and demonstration of clean hydrogen, and we tasked the Department of Energy to develop a national strategy and a roadmap to get us to a clean hydrogen economy. 27:25 Sen. James Lankford (R-OK): I'm concerned that the conversation around green versus blue hydrogen will pit technologies against each other rather than working together to establish a robust hydrogen marketplace. The simple truth right now is that 95% of hydrogen produced in the United States is made from natural gas. 1:42:00 Sen. Lisa Murkowski (R-AK): Can you share what the administration's policy is with regards to converting natural gas to hydrogen? We recognize that there are some within the [Biden] administration, certainly some groups that may have influence on the administration, who are very firm about not using fuel sources like natural gas. So the question is, is there a role for conversion to play? And what might we anticipate with regards to support and funding that might come with it? Dr. Sunita Satyapal: Thank you again for the question. And as mentioned, with hydrogen shot, we're really looking at all of the pathways. It's really about clean hydrogen. So whether it's natural gas, carbon feedstocks, nuclear renewables, you know, any pathway to get to the low carbon intensity, we're really pivoting away from the colors. There's a lot of complexity: green, blue, purple, turquoise….Pyrolysis is another approach. In fact, our loan program office just announced financing of $1 billion solid carbon, which is another value added product, no need for the CCS portion. So definitely an all-of-the-above strategy needed to meet all of our goals. July 28, 2020 Senate Committee on Energy and Natural Resources Witnesses: Steven Winberg, (Former) Assistant Secretary for Fossil Energy at the US Department of Energy Shannon Angielski, Executive Director of the Carbon Utilization Research Council Dr. Julio Friedmann, Center on Global Energy Policy, Columbia University 25:06 Dr. Julio Friedmann: Net zero means that any residual emissions must be balanced by removal, as Secretary Moniz said. It means that reduction of co2 emissions and removal of co2 emissions are complementary but distinct actions and that both are necessary. The National Academies and the IPCC find that this must be done at enormous scale exceeding the size of the global oil and gas industry today. We are not where we need to be to make this real. 48:35 Shannon Angielski: In addition, the International Energy Agency modelled the contributions of different technologies to meet that mid-century 2 degree scenario. And it shows that CCUS accounts for approximately 100 Giga tons of needed global co2 emissions reductions by 2060. To put this into perspective, this would be achieved by the operation of 1100 carbon capture systems on the equivalent of 500 megawatt coal fired units, or 3200 natural gas combined cycle units, which would need to be operating for the next 30 years. 1:59:00 Steven Winberg: The rest of the world is going to continue using fossil energy, whether it's coal or oil or natural gas. And that's why we have moved forward quickly on the coal first program, because it offers the opportunity for what I think of as 21st century coal. Right now the Chinese own the space in power generation — coal fired power generation. We have an opportunity to take technology and springboard over what the Chinese are building, which is basically 1970s vintage technology that we built, and they now have improved slightly, but they're selling it around the world, to countries that have coal under their feet, and they're going to continue using that coal. But with the coal first program, we can move into power generation, and we can move into hydrogen production, because these countries also, as they build out their transport sector, may not do it the same way that developed countries, they may move more swiftly into hydrogen. And so there's an opportunity there to take our technology using their natural resources that are under their feet, and produce zero emitting power generation and zero emitting hydrogen and perhaps even net negative hydrogen and net negative electricity and they can use that hydrogen in the transportation sector as well as the industrial sector. Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Oct 10, 2022 • 1h 33min

CD260: Failure to Fund with Graham Elwood

Congress has failed to fund the government on time again. In this episode, Graham Elwood joins Jen as she geeks out on all the dingleberries attached to the new law extending Congress’s funding deadline until December 16th. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Executive Producer Recommended Sources August 8, 2022. The Peter Collins Show. Background Sources Recommended Congressional Dish Episodes FDA User Fees Katie Hobbins. Oct 3, 2022. Medical Device + Diagnostic Industry (MD+DI). New Mexico Fire Ryan Boetel. Sept 29, 2022. Albuquerque Journal. Associated Press. Jun 21, 2022. The Guardian. Elizabeth Miller and Jason Samenow. May 5, 2022. The Washington Post. Republicans and Disaster Relief Funding Sharon Zhang. Oct 3, 2022. Truthout. Zach Schonfeld. Oct 3, 2022. Lauren Book. Oct 3, 2022. Sanjana Karanth. Oct 2, 2022. HuffPost. Anna Skinner. Sept 30, 2022. Newsweek. Sergio Bustos. Sept 30, 2022. Tallahassee Democrat. Patrick Leahy. Sept 9, 2022. Vermont Biz. Jackson Water Crisis Anthony Warren. Sept 30, 2022. Jackson WLBT. Michael Goldberg. Sept 27, 2022. Yahoo News. Annie Snider and Lara Priluck. Sept 21, 2022. Politico. James Brasuell. Aug 20, 2022. Planetizen. Continuing Resolution Aidan Quigley. Sept 30, 2022. Roll Call. David Hawkings. Sept 7, 2016. Roll Call. Ukraine James Bradley. Oct 4, 2022. Emily Cochrane. Sept 29, 2022. The New York Times. Chelsey Cox. Sept 29, 2022. CNBC. Jackie Walorski Crash Marek Mazurek. Sept 16, 2022. Appropriations Congressional Research Service. Jeff Sachs Jeff Sachs on Bloomberg Global Financial News LIVE. Oct 3, 2022. Bono. Apr 18, 2005. TIME. Peter Passell. Jun 27, 1993. The New York Times. Campaign Contributions from the Defense Industry Open Secrets. Afghanistan Craig Whitlock. The Afghanistan Papers: A Secret History of the War. Simon & Schuster: 2021. Spencer Ackerman. Apr 29, 2013. U.S. Infrastructure and Global Rankings Contaminated Water in the United States Gloria Oladipo. Sep 6, 2022. The Guardian. Emily Holden et. al. Feb 26, 2021. The Guardian. Maura Allaire. Feb 12, 2018. The Proceedings of the National Academy of Sciences (PNAS) 115(9). Paul Pelosi Chip Stock Caroline Vakil. Jul 27, 2022. The Hill. Starbucks Unionization Union Election Data. Laws and Treaties Audio Sources Oct 3, 2022 Jeff Sachs: The main fact is that the European economy is getting hammered by this by the sudden cut off of energy. And now to make it definitive the destruction of the Nord Stream pipeline, which I would bet was a US action, perhaps the US and Poland. This is a speculation — Bloomberg Host: That's quite a statement. Why do you feel that that was a US action? What evidence do you have of that? Jeff Sachs: Well, first of all, there's direct radar evidence that US helicopters, military helicopters that are normally based in Gdansk, we're circling over this area. We also had the threats from the United States earlier in this year that one way or another, we are going to end Nord Stream. We also have a remarkable statement by Secretary Blinken, last Friday in a press conference, he says this is also a tremendous opportunity. It's a strange way to talk if you're worried about piracy on international infrastructure of vital significance. I know this runs counter to our narrative, that you're not allowed to say these things in the West, but the fact of the matter is, all over the world, when I talk to people, they think the US did it. And by the way, even reporters on our papers that are involved tell me privately, “Well, of course,” but it doesn't show up in our media. September 30, 2022 September 29, 2022 April 30, 1998 Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Sep 23, 2022 • 1h 24min

CD259: CHIPS: A State Subsidization of Industry

A new law, known as the CHIPS Act, provides over $50 billion to existing, profitable companies to fund new semiconductor production facilities in the United States. In this episode, we examine why Congress decided to gift these companies our tax money now and explore the geopolitical implications of this funding decision. Beyond semiconductors, the law provides further corporate welfare for the creation of things that many of us tax payers likely support. This law is complicated; let's get nuanced. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes Semiconductor Industry July 2022. Semiconductor Industry Association. February 2022. Semiconductor Industry Association. September 2021. Semiconductor Industry Association. Taiwan Bansari Mayur Kamdar and Medha Singh. Aug 2, 2022. Reuters. Karen M. Sutter. Mar 7, 2022. Congressional Research Service. Yimou Lee, Norihiko Shirouzu and David Lague. Dec 27, 2021. Reuters. PRISM Program Derek B. Johnson. Aug 27, 2018. FCW. Wealthy Shareholders Juliana Kaplan and Andy Kiersz. Oct 19, 2021. Insider. National Endowment for Democracy National Endowment for Democracy. National Science Foundation Directorate Mitch Ambrose. Mar 17, 2022. American Institute of Physics. Mar 17, 2022. House Committee on Science, Space, and Technology. Fusion Research Diffen. Open Secrets. Open Secrets. K&L Gates. American Exception Book Aaron Good. 2022. Skyhorse Publishing. The Law Bills Later Added to the CHIPS Act Audio Sources Sept 18, 2022 60 Minutes Scott Pelley: What should Chinese President Xi know about your commitment to Taiwan? President Joe Biden: We agree with what we signed on to a long time ago, that there's a One China policy and Taiwan makes their own judgments about their independence. We are not moving, we're not encouraging their being independent. That's their decision. Scott Pelley: But would US forces defend the island? President Joe Biden: Yes, if in fact, there was an unprecedented attack. Scott Pelley: [overdub] After our interview, a White House official told us US policy has not changed. Officially, the US will not say whether American forces would defend Taiwan. But the Commander in Chief had a view of his own. [interview] So unlike Ukraine, to be clear, sir, US forces, US men and women would defend Taiwan in the event of a Chinese invasion? President Joe Biden: Yes. Jul 27, 2022 Dec 8, 2021 Senate Committee on Foreign Affairs 30:45 Sen. James Risch (R-ID): A unilateral change in the status quo regarding Taiwan would not only threaten the security and liberty of 23 million Taiwanese, but also significantly damage vital US interests and alliances in the Indo Pacific. We would lose a model of democracy at a time of creeping authoritarianism. It would give China a platform in the first island chain to dominate the Western Pacific and threaten, indeed, US homeland. The consequences for Japan security, and therefore, the US-Japan alliance, are hard to overstate. Semiconductor supply chains would fall into China's hands, and it would emboldened China in other territorial disputes, including with India, and in the South China Sea. November 17, 2021 House Committee on Science, Space, and Technology, Subcommittee on Energy Witnesses: Dr. Troy Carter, Director, Plasma Science and Technology Institute, University of California, Los Angeles and Chair, Fusion Energy Sciences Advisory Committee Long Range Planning Subcommittee Dr. Tammy Ma, Program Element Leader for High Energy Density Science, Lawrence Livermore National Laboratory Dr. Robert Mumgaard, CEO, Commonwealth Fusion Systems Dr. Kathryn McCarthy, Director, U.S. ITER Project Office Dr. Steven Cowley, Director, Princeton Plasma Physics Laboratory Clips Robert Mumgaard: However, from where I sit, I see three reasons why I'm very optimistic the US can create a definitive lead in this new industry. First, the growth of the private sector. Over $2.4 billion in private capital has been invested in the fusion companies that now number nearly 30. This is a similar amount of capital as in all the nuclear fission small modular reactor companies. This is coming from a large range of investors across venture capitalists, to university endowments, to large energy companies. And they're putting capital at risk in fusion because they understand that the world needs a fundamentally new source of clean energy if we are going to meet our decarbonization goals. And these companies are highly ambitious, with a recent survey stating that 84% of them believe that fusion will be on the grid in the 2030s or earlier. Robert Mumgaard: We will proceed with the commercialization of our first fusion pilot plant called ARC. We hope to have that online in the early 2030s. Robert Mumgaard: The second reason I'm optimistic is that the public program has produced a consensus plan. Detailed in the National Academies and FESAC (Fusion Energy Sciences Advisory Committee) Recommendations is a transition of the public funded program towards the US developing commercial energy. We need to stop some activities and transition to others. But the researchers are enthusiastic and they are ready. We have a new generation of leaders at national laboratories and universities hungry to develop that technology. And that plan has been authorized but has not yet been implemented. Robert Mumgaard: And we're not alone. The other companies like TAE and General Fusion, Helion, Tokamak Energy, are looking at similar timeframes and experiencing similar growth. All these companies are looking to see which governments are going to be the best partners. And unfortunately, we are already seeing defections, with a major facility that could have been built in the US, instead being built in the UK. It'd be much better if the US public program leveraged the private sector, aligning with the technical goals and timelines to keep it happening here. Robert Mumgaard: The third reason I'm hopeful is the movement towards public private partnerships and we know that when the public and private sectors work together and recognize what each side is good at, we create vibrant ecosystems. We saw this in commercial space, with NASA and SpaceX. We saw it even more recently with the COVID-19 vaccine October 1, 2020 Senate Committee on Armed Services, Subcommittee on Readiness and Management Support Witness: Ellen M. Lord, Under Secretary of Defense for Acquisition and Sustainment 1:22:10 Ellen Lord: I believe there may well be a lot of this, frankly: not continuing to engage with these Chinese companies on sensitive issues, but in turn, developing industrial bases here that makes us not reliant on that back and forth. There's quite a bit of discussion within the inner agency right now about constraining Chinese involvement from everything from investments to specific commodities. But again, I think one of the areas where we could have the most impact on China broadly, is reshoring microelectronics. And right now, my team is working very closely across DOD, as well as the inner agency to come up with a very specific recommendation for some public-private partnerships in order to develop the capability here domestically. We at DOD are only about 1% of the overall microelectronics market, however, we have some critical needs. July 16, 2020 15:20 Attorney General Bill Barr: “Made in China 2025” is the latest iteration of the PRC’s state-led, mercantilist economic model. For American companies in the global marketplace, free and fair competition with China has long been a fantasy. To tilt the playing field to its advantage, China’s communist government has perfected a wide array of predatory and often unlawful tactics: currency manipulation, tariffs, quotas, state-led strategic investment and acquisitions, theft and forced transfer of intellectual property, state subsidies, dumping, cyberattacks, and industrial espionage. Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Sep 18, 2022 • 1h 5min

CD258: Gain of Function Research

On August 3rd, Senate Republicans held a hearing examining gain of function research: its possible role in creating the COVID-19 pandemic; the problems with oversight of this dangerous research; and recommendations to Congress for how to fix those problems. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Gain-of-function Research Talha Burki. Feb 1, 2018. The Lancet Infectious Diseases 18(2): pp 148-149. 2017. U.S. Department of Health and Human Services. Michael J. Selgelid. Aug 8, 2016. Science and Engineering Ethics 22(4): pp 923-964. Sara Reardon. October 22, 2014. Nature 514: pp 411-412. Oct 17, 2014. The White House Blog. Board on Life Sciences; Division on Earth and Life Studies; Committee on Science, Technology, and Law; Policy and Global Affairs; Board on Health Sciences Policy; National Research Council; Institute of Medicine. April 13, 2015. National Academies Press. Marc Lipsitch. Jun 29, 2014. The New York Times. COVID-19 Origin Theories Gary Ruskin. Sep 14, 2022. U.S. Right to Know. Alina Chan. Jul 30, 2022. Medium. Maria Cheng and Janey Keaten. Jun 9, 2022. AP News. Jun 9, 2022. World Health Organization. Carl Zimmer and James Gorman. Updated Oct 13, 2021. The New York Times. Richard Muller and Steven Quay. Oct 5, 2021. The Wall Street Journal. Steven Quay and Richard Muller. Jun 6, 2021. The Wall Street Journal. May 30, 2021. This Week in Virology [Podcast]. Glenn Kessler. May 25, 2021. The Washington Post. Jorge Casesmeiro Roger. Mar 24, 2021. Independent Science News. Josh Rogin. Mar 8, 2021. Politico. Jane Qiu. Jun 1, 2020. Scientific American. EcoHealth Alliance and Funding for Coronavirus Research Katherine Eban. March 31, 2022. Vanity Fair. Sharon Lerner and Maia Hibbett. Sep, 23 2021. The Intercept. Glenn Kessler. May 18, 2021. The Washington Post. Meredith Wadman and Jon Cohen. Apr 30, 2020. Science. National Institutes of Health. May 27, 2014. NIH RePORTER. NIH Database Data Removal Amy Dockser Marcus. Jun 23, 2021. The Hearing August 3, 2022 Senate Committee on Homeland Security and Governmental Affairs: Subcommittee on Emerging Threats and Spending Oversight Witnesses: Richard H. Ebright, Professor of Chemistry and Chemical Biology and Laboratory Director, Rutgers University Waksman Institute of Microbiology Steven Quay, CEO and Founder, Atossa Therapeutics, Inc. Kevin M. Esvelt, Associate Professor of Media Arts and Sciences, Massachusetts Institute of Technology Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Aug 21, 2022 • 1h 47min

CD257: PACT Act - Health Care for Poisoned Veterans

After decades of our government denying healthcare to veterans they exposed to poisonous toxins, the PACT Act - which will eventually provide this hard-fought-for care - is now law. In this episode, learn exactly who qualifies for these new benefits and when, discover the shocking but little-known events that led to their poisonings, and find out what exactly happened during those 6 days when Senate Republicans delayed the passage of the PACT Act. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Background Sources Recommended Congressional Dish Episodes What the PACT Does and Doesn’t Do Aug 10, 2022. VA Claims Insider. Abraham Mahshie. Aug 10, 2022. Air Force Magazine. Leo Shane III. Aug 4, 2022. Military Times. U.S. Department of Veterans Affairs. The VA Sidath Viranga Panangal, Jared S. Sussma, and Heather M. Salaza. Jun 28, 2022. Congressional Research Service. U.S. Department of Veterans Affairs. U.S. Department of Veterans Affairs. U.S. Department of Veterans Affairs. Toxic Exposures Burn Pits November 20th, 2014. VAntage Point. Feb 8, 2010. Military Times. U.S. Army Center of Military History. U.S. Army Center of Military History. Agent Orange Donnie La Curan. April 1, 2021. Veterans Resources. Charles Dunst. Jul 20, 2019. The Atlantic. Patricia Kime. May 11, 2020. Military.com. May 11, 2020. Yale Law School. Vietnam Security Police Association. Susan E. Davis. Apr 9, 1991. The Washington Post. Enewetak Atoll Chris Shearer. Dec 28, 2020. Vice. March 2018. U.S. Defense Threat Reduction Agency. Dave Philipps. Jan 28, 2017. The New York Times. Palomares, Spain Nuclear Accident November 1, 2021. Yale Law School Today. Dave Philipps. June 19, 2016. The New York Times. April 2001. United States Air Force. U.S. Department of Energy. February 1966 U.S. Department of Energy Archives. Thule, Greenland Nuclear Accident Robert Mitchell. Jan 21, 2018. The Washington Post. 897 F.Supp. 1098 (1995). United States District Court, N.D. Illinois, Eastern Division. June 1982. History and Research Division, Headquarters, Strategic Air Command. Captain Robert E. McElwee. U.S. Defense Technical Information Center. South Carolina Nuclear “Storage” Doug Pardue. May 21, 2017 (Updated Jun 28, 2021). The Post & Courier. Gulf War Illness Johns Hopkins Medicine. May 11, 2022. UT Southwestern Medical Center Newsroom. Camp Lejeune Water Contamination The Carlson Law Firm on YouTube. Agency for Toxic Substances and Disease Registry. Agency for Toxic Substances and Disease Registry. Agency for Toxic Substances and Disease Registry. Oct 18, 2009. St. Lawrence County Government. St. Louis Area Nuclear Contamination Chris Hayes. Jul 27, 2022. Fox 2 Now - St. Louis. Jim Salter. Mar 19, 2022. St. Louis Post-Dispatch. Jesse Bogan. Dec 20, 2021. St. Louis Post-Dispatch. Apr 30, 2019. U.S. Agency for Toxic Substances and Disease Registry. Robert Alvarez. February 11, 2016. Bulletin of the Atomic Scientists. U.S. Environmental Protection Agency. HBO Documentaries. Hanford Waste Management Site Jul 26, 2019. The International Campaign to Abolish Nuclear Weapons. Biden Drone Bombing Aug 7, 2022. The Express Tribune. Jon Stewart People Staff. August 11, 2022. People. Republican F*ckery Ryan Cooper. Aug 3, 2022. The American Prospect. Jordain Carney and Anthony Adragna. August 1, 2022. Politico. Oct 10, 2022. Clerk of the U.S. House of Representatives. U.S. Foreign Wars No One Talks About Ellen Knickmeyer. Jun, 16 2022. Military.com. Joseph R. Biden. June 08, 2022. The White House. Muhammad Fraser-Rahim. Oct 16, 2017. Newsweek. Overseas Contingency Operations Emily M. Morgenstern. Updated August 13, 2021. Congressional Research Service. Todd Harrison. Jan 11, 2017. Center for Strategic and International Studies The Law Timeline of Votes and Changes July 12, 2022. U.S. House of Representatives. August 1, 2022. Congressional Record -- Senate. Audio Sources August 10, 2022 PBS NewsHour on YouTube August 1, 2022 Global News on YouTube The Carlson Law Firm on YouTube July 31, 2022 CNN Clips 7:00 Sen. Pat Toomey (R-PA): Here's what you need to keep in mind, Jake. First of all, this is the oldest trick in Washington. People take a sympathetic group of Americans — it could be children with an illness, it could be victims of crime, it could be veterans who have been exposed to toxic chemicals — craft a bill to address their problems, and then sneak in something completely unrelated that they know could never pass on its own and dare Republicans to do anything about it because they know they'll unleash their allies in the media and maybe a pseudo-celebrity to make up false accusations to try to get us to just swallow what shouldn't be there. That's what's happening here, Jake. 10:40 Jake Tapper: So one of the questions that I think people have about what you're claiming is a budgetary gimmick is, the VA budgets will always remain subject to congressional oversight, they can't just spend this money any way they want. And from how I read this legislation, it says that this money has to be spent on health care for veterans who suffered exposure from toxic burned pits. Sen. Pat Toomey (R-PA): This is why they do this sort of thing, Jake, because it gets very deep in the weeds and very confusing for people very quickly. It's not really about veteran spending. It's about what category of government bookkeeping, they put the veterans spending in. My change, the honest people acknowledge it will have no effect on the amount of money or the circumstances under which the money for veterans is being spent. But what I want to do is treat it, for government accounting purposes, the way we've always treated it for government accounting purposes. Because if we change it to the way that the Democrats want, it creates room in future budgets for $400 billion of totally unrelated, extraneous spending on other matters. July 31, 2022 CBS News Clips 4:10 John Dickerson: 123 Republicans in the House voted for this, 34 Senate Republicans voted for it. Same bill. This week, the bill didn't change but the Republican votes did. Why? Sen. Pat Toomey (R-PA): Now, the Republican votes didn't change on the substance of the bill. Republicans have said we want an amendment to change a provision that has nothing to do with veterans health care. The Republicans support this. The Democrats added a provision that has nothing to do with veterans health care, and it's designed to change government accounting rules so that they can have a $400 billion spending spree. 6:25 Sen. Pat Toomey (R-PA): Honest Democrats evaluating this will tell you: if my amendment passes, not a dime change in spending on veterans programs. What changes is how the government accounts for it. John Dickerson: I understand, but the accounting change, as you know, is a result — the reason they put it in that other bucket is that it doesn't subject it to the normal triage of budgeting. And the argument is that the values at stake here are more important than leaving it to the normal cut and thrust of budgeting. July 29, 2022 The Problem with Jon Stewart on Youtube Clips 00:20 Sen. Ted Cruz (R-TX): What the dispute is about is the Democrats played a budgetary trick, which is they took $400 billion in discretionary spending and they shifted it to a mandatory one. Jon Stewart: What Ted Cruz is describing is inaccurate, not true, bulls ** t. This is no trick. Everything in the government is either mandatory or discretionary spending depending on which bucket they feel like putting it in. The whole place is basically a f * ing shell game. And he's pretending that this is some new thing that the Democrats pulled out, stuck into the bill, and snuck it past one Ted Cruz. Now I'm not a big-city Harvard educated lawyer, but I can read. It's always been mandatory spending so that the government can't just cut off their funding at any point. No trick, no gimmick, [it’s] been there the whole f**king time. 1:50 Sen. Ted Cruz (R-TX): What's the Republicans made clear is, if we leave that spending as discretionary — don't play the budgetary trick — the bill will pass with 80 or 90 votes. Jon Stewart: I don't know how many other ways to say this, but there was no budgetary trick and it was always mandatory. And when they voted in the Senate on June 16, they actually got 84 votes. And you know who voted for that? Ted f*cking Cruz and every other one of those Republicans that switched their votes. There was no reason for them to switch the votes. The bill that passed the Senate 84 to 14 on June 16 has not had one word added to it by Democrats, or spending fairies, or anybody else. It's the same f*cking bill. July 28, 2022 The Problem with John Stewart on YouTube Clips 3:20 Jon Stewart: June 16, they passed the PACT Act 84 to 14. You don't even see those scores in the Senate anymore. They passed it. Every one of these individuals that has been fighting for years, standing on the shoulders of Vietnam veterans who have been fighting for years, standing on the shoulders of Persian Gulf War veterans fighting for years, Desert Storm veterans, to just get the health care and benefits that they earn from their service. And I don't care if they were fighting for our freedom. I don't care if they were fighting for the flag. I don't care if they were fighting because they wanted to get out of a drug treatment center, or it was jail or the army. I don't give a shit. They lived up to their oath. And yesterday, they spit on it in abject cruelty. These people thought they could finally breathe. You think their struggles end because the PACT Act passes? All it means is they don't have to decide between their cancer drugs and their house. Their struggle continues. From the crowd: This bill does a lot more than just give us health care. Jon Stewart: It gives them health care, gives them benefits, lets them live. From the crowd: Keeps veterans from going homeless keeps veterans from become an addict, keeps veterans from committing suicide. Jon Stewart: Senator Toomey is not going to hear that because he won't sit down with this man. Because he is a fucking coward. You hear me? A coward. 5:15 Jon Stewart: Pat Toomey stood up there — Patriot Pat Toomey, excuse me, I'm sorry. I want to give him his propers, I want to make sure that I give him his propers. Patriot Pat Toomey stood on the floor and said “this is a slush fund, they're gonna use $400 billion to spend on whatever they want.” That's nonsense. I call bullshit. This isn't a slush fund. You know, what's a slush fund? The OSO, the Overseas Contingency Operations Fund. $60 billion, $70 billion every year on top of $500 billion, $600 billion, $700 billion of a defense budget. That's a slush fund, unaccountable. No guardrails? Did Pat Toomey stand up and say, this is irresponsible. The guard rails? No, not one of them. Did they vote for it year after year after year? You don't support the troops. You support the war machine. 7:10 Jon Stewart: And now they say, “Well, this will get done. Maybe after we get back from our summer recess, maybe during the lame duck…” because they're on Senate time. Do you understand? You live around here. Senate time is ridiculous. These motherfuckers live to 200 — they’re tortoises. They live forever and they never lose their jobs and they never lose their benefits and they never lose all those things. Well, [sick veterans are] not on Senate time. They're on human time. Cancer time. 8:20 Jon Stewart: I honestly don't even know what to say anymore. But we need your help, because we're not leaving. These people cannot go away. I don't know if you know this, you know, obviously, I'm not a military expert. I didn't serve in the military, but from what I understand, you're not allowed to just leave your post when the mission isn't completed. Apparently you take an oath, you swear an oath, and you can't leave, that these folks can leave because they're on Senate time. Go ahead, go home, spend time with your families, because these people can't do it anymore. So they can't leave until this gets done. July 26, 2022 Senate Session July 13, 2022 House Session 3:38:20 **Rep. Mark Takano (D-CA): The way this country has dealt with toxic exposure has been piecemeal and inadequate. President Biden recognizes this, too. Shortly after he was sworn in, I met with the President about our shared priorities for veterans. Upon learning of my goal to pass comprehensive legislation to help toxic-exposed veterans, the President leaned over to me and talked about his son, Beau, who served near burn pits in Iraq and Kosovo. It might be hard for most Americans to imagine what a burn pit looks like because they are illegal in the United States. Picture walking next to and breathing fumes from a burning pit the size of a football field. This pit contained everything from household trash, plastics, and human waste to jet fuel and discarded equipment burning day and night. Beau Biden lived near these burn pits and breathed the fumes that emanated from them. President Biden believes that con- stant exposure to these burn pits, and the toxic fumes they emitted, led to Beau’s cancer and early death. It was during that meeting when I knew I had a partner in President Biden. 2017 HBO Documentaries November 27, 2017 Australian Broadcasting Corporation - Foreign Correspondent Cover Art Design by Only Child Imaginations Music Presented in This Episode by
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Jul 30, 2022 • 1h 22min

CD256: Poisonous Pet Collars

Seresto Flea and Tick Collars for dogs and cats have been sold to Americans since 2013. During that time, the EPA has received approximately 100,000 reports of illnesses and 2,500 reports of deaths of animals that wore a Seresto Flea and Tick collar, by far the most reports received about any flea and tick treatment on the market. In this episode, hear testimony from scientists about the Environmental Protection Agency’s disturbingly lax review processes for pesticides in pet products and learn why your vote in November is likely to determine if these popular but dangerous products will stay on American shelves. Please Support Congressional Dish – Quick Links Contribute monthly or a lump sum via Support Congressional Dish via (donations per episode) Send Zelle payments to: Donation@congressionaldish.com Send Venmo payments to: @Jennifer-Briney Send Cash App payments to: $CongressionalDish or Donation@congressionaldish.com Use your bank’s online bill pay function to mail contributions to: Please make checks payable to Congressional Dish Thank you for supporting truly independent media! Listen to the latest episode of Jen's new podcast with Andrew Heaton and Justin Robert Young — We're Not Wrong Episode 12: To report an incident directly to the EPA via email Report.Pesticide.Incident@epa.gov Executive Producer Recommended Sources Bruce Bueno de Mesquita and Alastair Smith. Public Affairs: 2011. Background Sources Recommended Congressional Dish Episodes Reports on Seresto and Pesticides Jun 15, 2022. House Committee on Oversight and Reform. House Committee on Oversight and Reform, Subcommittee on Economic and Consumer Policy. June 2022. Lauretta Joseph. May 19, 2022. Johnathan Hettinger. Sept. 24, 2021. USA Today. Jordan Liles. Mar 8, 2021. Snopes. Johnathan Hettinger. Mar 2, 2021. USA Today. Lawrence J. Dyckman et al. July 1995. U.S. Government Accountability Office. Lobbying 2022. Open Secrets. Open Secrets. Open Secrets. The Hearing June 15, 2022 Witnesses: Faye Hemsley & Omarion Hemsley, Owners of Deceased Pet Thomas Maiorino, Owner of Deceased Pet Jeffrey Simmons, President and Chief Executive Officer, Elanco Animal Health Incorporated Nathan Donley, Ph.D, Environmental Health Science Director, Center for Biological Diversity Karen McCormack, Former Scientist, Policy Analyst, and Communications Officer (ret.), Office of Pesticide Programs, Environmental Protection Agency Carrie Sheffield (minority witness), Senior Policy Analyst, Independent Women’s Voice Clips 1:20 Rep. Raja Krishnamoorthi (D-IL): As early as 2015, just a few years after the collar entered the US market, an EPA investigation found that among similar products, the Seresto collar “ranked number one” by a wide margin in terms of total incidents, major incidents and deaths, even after factoring in companies’ relative sales. Those findings weren't enough to drive the makers of Seresto collar or the EPA to act. 1:50 Rep. Raja Krishnamoorthi (D-IL): In 2016, Canada's equivalent of the EPA known as the PMRA, concluded based on a review of the same American data available to the EPA that the collar posed too great a risk to pets and their owners to be ever sold in Canada. 2:10 Rep. Raja Krishnamoorthi (D-IL): Even as the death count rose, the EPA allowed Seresto to remain on the market here without even so much as requiring additional warning labels that regulators mandated in places ranging from Australia to Colombia to the European Union. 2:30 Rep. Raja Krishnamoorthi (D-IL): The companies that manufactured the Seresto collar first Bayer animal health and then later Elanco were also aware of the risks, the incidents and the deaths, but they too failed to act. Instead, they hired third party industry insiders to conduct so-called independent reviews of the incident data, which ended up protecting their $300 million a year market but ended up endangering pets. So the Seresto collar stayed the same and so did the consequences. 4:15 Rep. Raja Krishnamoorthi (D-IL): This particular collar has caused 100,000 incidents reported to the EPA and over 2500 pet deaths reported to the EPA. 4:30 Rep. Raja Krishnamoorthi (D-IL): The steps that we are asking for today are crucial, because it's important to protect our pets and our families, too. I now call upon my distinguished colleague, Mr. Cloud for his opening statement. Rep. Michael Cloud (R-TX): Thank you, Chairman. This is the first hearing of the Economic and Consumer Policy Subcommittee this year, and we've been in session for 52 days this year. And our first hearing is on pet collars. And I do realize that our pets are a huge part of our lives, they enrich our families, they provide companionship for my kids, they've helped foster responsibility and compassion and care, important ethics we need in our society. Just recently, our family mourned the loss of our guinea pig, biscuit. And so pets are a huge part of our family lives. But I have to admit that when I saw that this was going to be on the agenda for this week, I cannot help but be concerned, especially coming from South Texas about the 1000s 10s of 1000s of human lives that have passed away due to fentanyl and due to an open border and due to the policies of this administration to continue to aid and abet cartels. And I realized that this is the economic and Consumer Policy Subcommittee. And so I think about economic policy happening right now and where the minds of the American people are. Gas is now averaging $5 A gallon nationwide. For the first time in history. We have not had a hearing. Inflation is at a 40 year high. We have not had a hearing, the American people cannot find baby formula. We still haven't had a hearing. I've mentioned fentanyl is killing Americans, especially our teens at unprecedented rates. We have not had a hearing. Biden's systemic elimination of the safe and secure border he inherited has led to the worst humanitarian and national security crisis in this country's history. We have not had a hearing this term, we could talk about how inflation is affecting the cost of owning a pet, including the increased cost of food, toys, accessories, but we're not talking about that either. Instead, we're holding a hearing on the pet collar, which fights fleas and ticks. And as any pet owner knows fleas and tick management is an essential part of pet care. But I'm not sure it's an essential part of congressional oversight, especially when we take in mind where the American people are at. And frankly, I've talked to a number of people in my district and others who live in other parts of the country and they are really surprised that this has risen to one of the top priorities of commerce at this time in juncture. The subcommittee Republicans would rather explore efforts to help American consumers during these trying times, we would gladly have joined the chairman in holding a hearing on the shortage of baby formula. Moreover, we have welcomed the chance to explore TikTok’s troubling practice of showing dangerous content to minors, an investigation you all started last year. In fact, it's now come to light that teenagers are using tick tock and other social media platforms to purchase illicit drugs including unknowingly in many cases, in most cases, fentanyl. Social media platforms are also using it to recruit young people into the gig economy of human trafficking. A hearing on that crisis could be incredibly important. And on the subject of our nation's youth, CDC bureaucrats have actively pursued an agenda to close schools during the pandemic instead of following the science damaging our children's financial, mental, physical, emotional, and also their learning for years to come. But we still have not had a hearing. Americans are facing incredible economic issues which require us as elected officials to listen and to respond. I do appreciate the fact that our pets play an important part of our lives. We should be kind to animals and we should teach our children to do the same. But I do care immensely more about the human lives that we were elected to serve. 10:20 Rep. Raja Krishnamoorthi (D-IL): A recorded vote has been requested — we will pause while the we will get the clerk out. 12:00 Rep. Byron Donalds (R-FL): Mr. Chairman, it's already been about what? A minute and a half. Where's the clerk? Is the clerk on lunch and not here today? Rep. Krishnamoorthi (D-IL): I think the clerk is on the way Mr. Donalds, thank you. Rep. Donalds: Is the clerk sitting in the side office just hanging out? I mean, come on, Mr. Chairman. 21:20 Clerk: Mr. Cloud? Rep. Michael Cloud (R-TX): Yes Clerk: Mr. Cloud votes yes. Mr. Keller? Rep. Fred Keller (R-PA): Yes Clerk: Mr. Keller votes yes. Mr. Franklin? Rep. C. Scott Franklin (R-FL): Yes Clerk: Mr. Franklin votes yes. Mr. Clyde? Rep. Andrew Clyde (R-GA): Yes. Clerk: Mr. Clyde votes yes. Mr. Donalds? Rep. Byron Donalds (R-FL): Yes Clerk: Mr. Donalds votes yes. 26:31 Thomas Maiorino: My name is Thomas Maiorina. I reside in Mount Laurel, New Jersey with my wife Monica. I am the father of three boys. My youngest son, Robert turned 12 in 2011. After years of asking for a dog, he wore us down and we decided to rescue a dog from a southern shelter for my son's birthday. After researching online, we adopted a mixed breed mutt that Robbie and his two other brothers named Rooney. Rooney swiftly became a loved member of our family. A bit rambunctious, she was just what a 12 year old boy needed. She loved the run and chase anything the move in the yard. By all measures, we took great care to ensure Rooney had a healthy and happy life. We took her on daily walks, sometimes three a day, hikes on park trails. We monitor her diet and made sure she was seen by the veterinarian as needed, and she received all of her shots. Because she was a bit rambunctious and we lived in a wooded area where there's a lot of wildlife, we were constantly concerned about the problems of fleas and ticks. We consulted with a veterinarian after getting Rooney to determine the best way to protect her against this. We use a variety of prevention methods for the first few years and when we changed veterinarians in approximately 2013 or 14, the new veterinarian strongly recommended that we use the Seresto flea and tick collar, based on all of our options. We heeded that advice and purchased Seresto collars from our local PetSmart. The collars were intended to provide protection for up to eight months. We noticed that after fixing a collar to Rooney’s neck, she began to itch and first had that treated and tested for allergies. We took her to the vet several times during 2018 seeking to find the cause for the ever increasing itching. After several visits and multielement medications, they were unable to determine the cause and we switched to a specialist in 2019 to seek further assistance, where they provided allergy shots and other medications to address the worsening itching and related symptoms. Rooney's behavior then became more erratic as the months wore on she began linking her paws so feverishly they would bleed. She also developed bleeding patches on her stomach. Ultimately, in October 2020, Rooney suffered horrendous grand mal seizure in the presence of myself and my wife. The damage done by the seizure was irreversible. She was a shell of her former self and ultimately, the family decided the most humane thing would be to put Rooney to sleep at the age of nine. In early March 2021, I read an article online about Seresto pet collars resulting in the deaths of 1700 Pets without any warnings from the EPA or the manufacturer. I sought out legal representation not because I wanted financial compensation, but because I took great pains to care for Rooney. The final 18 months of her life were agonizing to watch if I could help prevent another family from going through what my family went through. I wanted to act. I'm here today in furtherance of that effort. I appreciate the committee taking the time to investigate this matter. And thank you for your time. 33:30 Jeffrey Simmons: There are a few points I'd like to emphasize upfront. First, the EPA approved Seresto following more than 80 safety and toxicity studies, all of which show that Seresto and its ingredients have a strong safety profile. Second, more than 80 regulatory bodies around the world have approved Seresto. Seresto is widely used and more than 80 million collars worn over the past decade to protect dogs and cats from fleas and ticks around the world. 34:00 Jeffrey Simmons: Third, adverse event reports are not intended to be, and in fact are absolutely not, proof of causation. Reports require further investigation and analysis to determine cause. And after years of review, our pharmacovigilance team made up of veterinarians and other experts who study adverse event reports has not identified a single death caused by the active ingredients in the collar. 36:45 Jeffrey Simmons: No product is without risk. What matters is whether those risks are reasonable. And in light of the benefits and numerous studies and the incident report data for Seresto demonstrate the product does not pose an unreasonable risk and has a strong safety profile, which is why the American Veterinary Medical Association opposed canceling Seresto’s EPA registration. 38:05 Nathan Donley: My name is Dr. Nathan Donley. I'm the science director for the Environmental Health Program at the Center for Biological Diversity. I have a PhD in Cell and Developmental Biology from Oregon Health and Sciences University. The last seven years of my professional life have been spent researching how pesticides impact people and the environment and the regulatory failures that can actually facilitate harm rather than prevent it. I published three peer reviewed scientific articles and five technical reports on this subject. I've authored over 100 technical scientific comments to the EPA on pesticide documents, including flumethrin and imidacloprid, the two active ingredients in the Seresto collar. I've read through 1000s of pages of FOIA documents I requested on matters related to the approval and continued use of Seresto. 39:40 Nathan Donley: While other agencies like the FDA have robust systems in place to surveil harms from products under their purview, EPA only requires minimal information be submitted four times a year and they delegate this responsibility to the pesticide industry itself. The limited information that is collected includes only the pesticide product name, where the incident occurred, and the severity of the incident. That's it. Oftentimes, the agency doesn't even know if the incident involves a dog or a cat. Even though the EPA determines what incident information it collects, it then turns around and laments that the incident data are insufficient to take regulatory action to protect public health, the environment and our pets. It's a system designed to achieve nothing other than maintaining the status quo. Worse yet, reported incidents significantly underestimate the true scope of harm. The EPA recently estimated that only one in 25 pesticide incidents involving another pesticide called Kamba was actually reported to the authorities. That's only a 4% reporting rate. Given that 100,000 people have reported their concerns about Seresto, this is very alarming because the true number of harmful incidents to pets could be potentially far higher. 41:05 Nathan Donley: The EPA’s counterpart in Canada was so concerned about Seresto incidents and harms of pets and humans that it denied Seresto approval in 2016. Canada analyzed U incident data and determined that Seresto collars had an incident rate 50 times greater than the average flea collar and 36 times greater than Canada's trigger for review. 41:25 Nathan Donley: EPA has no trigger for review of any pesticide product, no matter how much harm is being reported. And because the agency has no mandated trigger for reviewing pesticides like Seresto, rather than choosing to use incident reporting data to inform a robust regulatory process and take dangerous products off the market, EPA routinely chooses to do nothing at all. And that's especially troubling when you consider that Seresto is just one of 18,000 pesticide products currently approved by the EPA. 42:40 Karen McCormack: My name is Karen McCormack. At the present time I am a retired government employee after working over 40 years at the Environmental Protection Agency. During my career at EPA, I first worked in an EPA laboratory as a research coordinator. And in that capacity, I conducted research on numerous pesticides. Later I transferred to EPA headquarters in Washington DC, and worked in various positions in the pesticide program as a scientist, policy analyst, and a communications officer. I also worked in a number of offices at EPA including the Office of the Assistant Administrator for Pesticides and Toxins. Although I'm retired from EPA, I'm still closely following a number of environmental topics and one of those topics of interest to me has been the impact of flea and tick pet products on cats and dogs. 43:30 Karen McCormack: The US Environmental Protection Agency is charged with regulating products that contain pesticides and in ensuring that all pesticide products are safe to use. Before 1996, EPA did not consistently require manufacturers to conduct animal safety studies for pet products containing pesticides. Because pet products with pesticides were available readily in commercial stores, consumers thought they must be safe. This is not necessarily the case. Flea and tick products are designed to kill insects, and they often contain poisonous chemicals. When combined with pesticides that are used outside the home and in the water and food that people drink and eat, the aggregate risks from all these sources of pesticides can be high, especially for children who are vulnerable to toxic chemicals -- much more vulnerable than adults. And it wasn't until the passage of the 1996 Food Quality Protection Act that EPA began to examine the risks from sources other than food, including risks from pet products containing pesticides. After the passage of FQPA, pesticide manufacturers were required to submit to EPA animal safety studies and incident reports showing harm to animals and humans exposed to pesticides and pet products. Between 2012 and the present time the EPA received an increasing number of incident reports related to the use of flea and tick pet collars for dogs and cats. The toxic effects that were described in these many incident reports from the use of certain pet collars ranged from mild effects, such as skin irritation to more severe effects such as intense tremors, seizures, paralysis, organ failure and death. The largest number of incident rate counts that EPA received during this period were from the use of pet collar called Seresto. 45:35 Karen McCormack: Between January 2012 and the present time, EPA has received over 100,000 incident reports, and these incident reports include human incidents as well as pet incidents. These reports also include at least 2300 reports of pet deaths. The number is most likely a very low estimate of the actual number of incidents that are occurring since many pet owners do not know that they can report incidents to EPA and they may not know how to correlate the adverse effects in their pets with a particular pet product. 46:30 Karen McCormack: There are no independent organizations that rank the safety of pet products. And the sales data which is needed to rank the safety of pet products is considered confidential business information by the manufacturers. EPA’s risk assessments also do not tell the full story of what pet products are safe, as they rely heavily on industry generated studies that were conducted on mice and rats rather than dogs and cats. And EPA’s risk assessments also are based mainly on studies that were conducted with only one pesticide in Seresto rather than the combined pesticides in this pet product. 47:10 Karen McCormack: Although the original manufacturers of Seresto, Bayer, did conduct a number of efficacy and safety studies in dogs and cats treated with Seresto, the company did not conduct two very critical studies that are important for determining the safety of a pet product. These tests include a pet transferable residue study, a petting study, to determine the exposure of humans to Seresto. And they did not conduct a study that measures the amount of pesticide that gets in the blood of treated dogs and cats. 48:45 Carrie Sheffield: My name is Carrie Sheffield and I'm a senior policy analyst at the Center for Economic Opportunity at Independent Women's Forum. We are a nonprofit organization committed to increasing the number of women who value free markets and personal liberty. 2:44:20 Rep. Raja Krishnamoorthi (D-IL): Let me just show you some analysis that was conducted by Elanco, which we would just refer to as well as the EPA, as well as the Canadian equivalent of the EPA, which is called the PMRA. Essentially, we look at this chart here, and we see that at the top Elanco computed that 0.51% of pet deaths were “possibly or probably” caused by the Seresto collar. The PMRA in Canada, looking at a sample of pet deaths concluded that 33% of those pet deaths were possibly or probably caused by Seresto collars. And the EPA here, concluded that 45% were possibly or probably caused by pet by the Seresto collar. Now, sir, I think originally, you said that there is no scientific evidence, no evidence of a causal link, this is clearly evidence, it was so compelling that the Canadian equivalent of the EPA never allowed for Seresto collars to be sold in Canada, correct? Jeffrey Simmons: Yes, I'm aware of that decision. I would also add that 80 other countries have approved this product, we've had over 80 million collars actually used. I'm not familiar with this data comparison, but what I can say is following the EPA regulatory process around the oversight, that we have pharmacovigilance, close to 200 veterinarians and staff on our team, looking at the data through the way the EPA wants us to we have not seen a linkage from the active ingredients. Rep. Krishnamoorthi: I understand that sir, I understand you haven't seen the linkage, although other authorities have and their scientists who are not paid by you have done so. 2:46:25 Nathan Donley: This is what we commonly see, quite frankly, when the regulated industry is doing their own research. It commonly finds that their products are safer than when government agencies or academic scientists take on a similar analysis. 2:46:55 Rep. Raja Krishnamoorthi (D-IL): We have FOIA documents from the EPA, and emails internal to the EPA talking about the Seresto collar. Here's just one of them. This is from an employee who basically voiced their opinion about recent coverage of the Seresto controversy, he said, “looks like the sh*t has hit the fan….will be interesting seeing where this goes. I hope there is a FOIA for all communications on this so that our emails are made public. We have been screaming about Seresto for many years.” I presume that you've heard some of these screams and concerns, correct, Ms. McCormack? Karen McCormack: That's correct. A number of EPA employees have contacted me and given me detailed descriptions about what's happening with Seresto and they were very upset that EPA refused to do anything about it. 2:48:25 Karen McCormack: A number of the scientists, and this is not unusual, feel that the decision makers are not considering the science and they're making decisions based on political reasons. I don't know if I have time to talk about this, but I did look at the science that the Canadian government did, the causality analysis. They looked at the consistency and toxicity of effects from exposure of pets to Seresto. And what they found was very disturbing. It was so disturbing that they decided the risks were too high to approve Seresto and they could not be mitigated by putting a label statement on the product or by issuing warning labels, so they refused to approve Seresto. 2:49:25 Rep. Michael Cloud (R-TX): Thank you, Ms. McCormack, for acknowledging that the EPA sometimes makes political decisions, so that's something we'll definitely be coming back to next term. 2:55:05 Rep. Katie Porter (D-CA): Are the active ingredients for Seresto in the United States different from the active ingredients for Seresto collars in other countries? Jeffrey Simmons: No, I do not believe they're any different than the other 80 countries. Rep. Porter: In other countries like in Colombia and Australia, the warning labels for Seresto collars classify the collar as highly toxic and as poison. 2:55:50 Rep. Katie Porter (D-CA): Does the label in the United States have language? Like highly toxic or poison? Yes or no? Jeffrey Simmons: It does not. Rep. Porter: Okay. So the warning label here in the United States, though does say that mild reactions may occur and mentions hair loss, scratching and redness. The most severe symptoms listed are eczema and lesions. This is the warning label: does it mention the potential for death? Jeffrey Simmons: It does not. Rep. Porter: So a pet owner looking at this label that we're looking at would have absolutely no reason, no way to know that Seresto may have caused roughly 100 pet deaths. That's what both the Canadian Pest Management Agency, the PMRA, and the EPA found. Will you change this label, so that it includes deaths as a possible side effect? Jeffrey Simmons: Congresswoman, we do not believe the scientific data warrants a label change. And again, that is not just the 80 studies were submitted. There's been 20 additional added studies since and all of the oversight data that's been done on the 33 million pets over the 10 years. So again, following an EPA regulated process, we're always open if a data warranted, some need for a change, we would do that. 2:57:30 Rep. Katie Porter (D-CA): The EPA encouraged both your predecessor, Bayer, and your company, Elanco, to update the warning label. Yet, you just said that you never have. So the federal government did in fact advise you to update the label and you failed to do so. Is that correct? Jeffrey Simmons: I do not believe that is correct. We are in regular engagement with EPA. We have not received any formal…there's no data that warrants that and there's been no formal engagement on that. 2:58:15 Rep. Katie Porter (D-CA): The EPA asked Bayer, the predecessor here, in 2019 to help the agency collect data on adverse incidents for cats and dogs using the Seresto collar. EPA asked Bayer to split the registration for cats and dogs, so the agency could better understand and evaluate the risks for each type of pet. They refused, saying that change might have, “an adverse impact on sales” and they also said, “it would be a substantial increase in work.” Mr. Simmons, are you willing to make that change and split the registration for cats and dogs as the EPA requested? Or do you believe it's too much work? Jeffrey Simmons: I am willing to engage with the EPA on anything that the scientific data and the engagement under the regulatory body of the EPA merits the right thing to do. We believe the 80 studies and all of the pharmacovigilance data that we've submitted to them stands that this is a safe product. 3:00:10 Rep. Andrew Clyde (R-GA): I feel obligated to begin by stating the obvious this afternoon. Today's hearing is a colossal waste of time and resources. 3:13:25 Rep. Henry Johnson (D-GA): And the only reason that the public knew about the harm caused by this pesticide is because the Center for Biological Diversity publicly petitioned the EPA to cancel registration for Seresto flea collars. If they had not bought this to light, do you think we would even know of the dangers presented by these collars? Nathan Donley: No, we wouldn't. You know, the investigation that came out in USA Today in 2021 really brought this to the public attention. And if there wasn't that amount of pressure from the public, this would just still be completely unknown. EPA, for the last 10 years, has not done anything to alert consumers to the harms associated with this product or any other pesticide products where there are a very high number of incidents. 3:15:10 Karen McCormack: I think some of the people at EPA are programmed to go along with whatever industry says. It makes life easier for you, you can go home earlier and you can also get promoted easier if you go along with what industry says. It's unfortunate a problem there. And I've seen it over the years and it's very hard to do something about it. 3:15:40 Karen McCormack: Canada's analysis was very scientific. It was not only based on incident data and sales data, it was based on the toxicity of the two pesticides in Seresto. And they looked at the consistency and what happened eventually with the pets that were exposed to Seresto. 3:19:20 Rep. Raja Krishnamoorthi (D-IL): And so because of the tremendous number of pet incidents, the tremendous number of deaths, even when factoring in sales, I sadly have no choice but to recommend that the EPA commence a notice of intent to cancel proceedings and to fully investigate what's going on with the Seresto collar, and I respectfully request Elanco to voluntarily recall these collars at this time, pending this further investigation. Cover Art Design by Only Child Imaginations Music Presented in This Episode by

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