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Sorry, insurers — House isn't dropping the Obamacare subsidies lawsuit

J. Scott Applewhite / AP

House Speaker Paul Ryan says the House Republican lawsuit against Obamacare's cost-sharing reduction subsidies will go forward, but that the Trump administration can use its "discretion" to keep paying the subsidies until the lawsuit is resolved. "We don't want to drop the lawsuit because we believe in the separation of powers," Ryan told reporters this morning at his weekly press briefing.

Why it matters: Insurers say they need those payments — which cover subsidies for low-income Obamacare customers — to stay in the marketplaces for next year. Ryan said that's up to the Trump administration: "While the lawsuit is being litigated, then the administration funds these benefits. That's how they've been doing it, and I don't see any change in that."

When might that change? Ryan said it could take "months." The Trump administration still has to decide whether to stop fighting the lawsuit. The ideal way to address the payments, Ryan said, is "to repeal and replace Obamacare, and have that transition occur where these markets are stabilized." And where is that? Nowhere, per Jonathan Swan.

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Calls to "follow the money" mount at Russia hearing

Andrew Harnik / AP

Senators at the Senate Intel Committee hearing about Russia's influence in the 2016 presidential election are increasing the pressure to see Trump's taxes to root out the Trump-Russia connection.

Sen. Ron Wyden (D-OR): "I wrote a letter to the Chairman to look at Trump associates and — also taking this issue on as member of Finance Committee — to obtain and review Donald Trump's tax returns...I believe that a key to a successful investigation is following the money...There is a "history of money laundering in Russia...Russia's corruption problem might also be our corruption problem."

Sen. Martin Heinrich (D-NM): It's "critical…that we follow the money."

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Ryan on Trump's Freedom Caucus attacks: he's just frustrated

speaker.gov / YouTube

Paul Ryan's addressed President Trump's controversial tweets, the continuing saga of Trumpcare, and Russia in his weekly press conference:

On Trump's tweet calling for a fight against the Freedom Caucus: "He is just expressing his frustration, you all know that he does that in various forms, including Twitter." Ryan later said he understood and shared Trump's frustration.

On another Trumpcare vote: "[The Democrats] are not going to help us repeal Obamacare, that's my point…I'm not going to commit to when and what the vote is going to look like."

On the House's Russia investigation: "The Russians clearly are trying to meddle in other elections…We need to do more to help our allies guard against this invasion into their democracies from Russia."

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For-profit law school owners take the 5th

The American Bar Association this week announced that it was putting Arizona Summit Law School on probation due to egregiously low bar exam passage rates. This makes ASLS only the country's second law school on ABA probation ― the first of which, Charlotte School of Law, subsequently was shut off from the federal student loan spigot by the U.S. Department of Education.

The connection? These are two of three for-profit law schools owned and operated by Infilaw, which in turn is owned by private equity firms Sterling Partners and ABRY Partners, alongside a bit of debt and equity co-invest from publicly-traded Ares Capital Corp.

How bad is it? Last year, ASLS students taking the bar exam for the first time passed at just a 24.6% rate. The national average was 64.2%, while local rival Arizona State University came in at 78.8%. In Charlotte, things got so bad that the school secretly paid "at risk" graduates to delay taking the bar exam until after taking a third-party prep course. And before you think this is some cut-rate program, one year of attendance at ASLS runs over $67,000.

What went wrong? Who knows? Seriously, I mean that. A spokeswoman for Sterling Partners said that the Chicago-based firm does "not comment on matters related to InfiLaw." When I pointed out that Sterling has actually commented plenty in the past, extolling the virtues of for-profit education, she said she'd get back to me. Never happened. I also called the Sterling managing director currently responsible for Infilaw, but his EA said he'd need "permission" to speak with me. Permission from whom? No comment, and apparently it wasn't forthcoming since he never called back. Also silent was minority equity-holder ABRY Partners, which actually wiped all references to Infilaw from its website last summer. As for Infilaw itself or Ares Capital.... well, you guessed it.

One would hope one of these folks would feel some obligation to explain why they are charging so much for such ineffective services, particularly when the likely results include taxpayers being on the hook for loans that are either: (1) Unlikely to be repaid, since the students don't become lawyers; or (2) Personal bankruptcies in order to repay the loans since, again, the students didn't become lawyers.

Oh, and this is hardly the first time that Abry has run into for-profit education trouble. The Boston-based investment firm also owned a piece of Marinello Schools of Beauty, which closed last spring after also losing federal student aid access for around half of its campuses.

What now: The big question going forward will be if the Department of Education ― now under new management ― gives ASLS the same treatment that it gave Charlotte. It seems like a fairly cut-and-dry case, but new Education Secretary Betsy DeVos is a well-known proponent of for-profit education, to the point that she even hired an advisor whose last job was as a lawyer for a for-profit education company under federal investigation. It's also worth noting that DeVos has personal exposure to some Ares-related CLOs, but there is no indication that they are invested in InfiLaw.

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Expert: Paul Ryan targeted with Russian bots last week

J. Scott Applewhite / AP

Clinton Watts, a senior fellow with the Foreign Policy Research Institute's program on national security, told the Senate Intelligence Committee's public hearing today that his group had observed suspected Russian interference in the U.S. presidential election, with ongoing efforts aimed at discrediting American politicians:

This past week we observed social media accounts discrediting Speaker of the House Paul Ryan, hoping to further foment unrest inside US democratic institutions.

Today's hearing is in two parts — two hours this morning to examine the history of Russian interference in elections, and two hours this afternoon to examine the cyber elements of those interferences.

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Russian foreign minister: Obama team had "superiority complex"

AP Photo, File

Sergey Lavrov goes off on the Obama administration in an interview with The National Interest, responding to what Russia considers "normal:"

"''Normal' is to treat your partners with respect, not to try to impose some of your ideas on others without taking into account their own views and their concerns, always to try to listen and to hear, and hopefully not to rely on a superiority complex, which was obviously the case with the Obama administration. They were obsessed with their exceptionality, with their leadership."
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Trump suggestion: "change libel laws"

President Trump continued his attack against the "failing" New York Times this morning, firing off another tweet:

Coincidentally, the Times has pertinent experience with libel law — it likely knows that the only possible libel law at play here is the United States Constitution. Per the holding of the Supreme Court in its 1964 decision in New York Times Co. v. Sullivan:

"A State cannot, under the First and Fourteenth Amendments, award damages to a public official for defamatory falsehood relating to his official conduct unless he proves "actual malice" — that the statement was made with knowledge of its falsity or with reckless disregard of whether it was true or false."
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AT&T will build mobile network for first responders

Alan Diaz / AP

Federal officials said Thursday that AT&T will build a major wireless broadband network for first responders. The contract is worth $6.5 billion dollars, and billions more are expected to be spent on building out and operating the network.

This is a big step for the network, called FirstNet, which grew out of concerns on 9/11 about the inability of first responders to communicate with each other in an emergency. But the project has been troubled.

Why it matters: AT&T gets 20 megahertz of wireless spectrum to deploy as part of the project. That's primarily meant to be used for first responders, but the company can use excess network capacity to serve its customers — a boon given demand for wireless data has been on the rise. States are allowed to opt-out of the network, however, and develop their own systems.

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Facebook adds personal fundraising tools and donate buttons

Facebook

Facebook announced today that it's adding to its set of online fundraising tools to include personal fundraisers, as well as providing more options for users to raise money for nonprofits. The tools enable people to invite friends, share the campaign, or donate to the cause in the click of a button — all without leaving the site.

The personal fundraisers, similar to competitor GoFundMe, raise money to cover costs in 6 key areas: education, medical, pet medical, emergencies, crisis relief, and funerals and loss. Facebook said it hopes to expand the category list over time.

In addition to personal fundraisers, Facebook Pages will also be able to include "Donate" buttons on their live video broadcasts. This will allow public figures, brands, businesses, and other organizations beyond non-profits to fundraise, too.

Why it matters: This is just another example of Facebook taking a step toward realizing CEO Mark Zuckerberg's social infrastructure vision that he preached in his manifesto earlier this year.

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Startup raises $50 million to fight Duchenne muscular dystrophy

Charles Williams / Flickr Creative Commons

Solid Biosciences, a Cambridge, Mass.-based drug developer focused on Duchenne muscular dystrophy, has raised $50 million in Series C funding co-led by RA Capital Management and Bain Capital Life Sciences. The company was founded by a former J.P. Morgan banker, after his son was diagnosed with DMD.

Why it's a big deal: DMD is a fairly rare genetic disorder, reportedly affecting around 1 out of every 3,500 young boys in the U.S., but that hasn't slowed down the pharma interest. In addition to Solid Biosciences, there has been work by both Sarepta Therapeutics (Nasdaq: SRPT) and Marathon Pharma. If that last one sounds familiar, that's because Marathon is a private equity-backed company accused of price-gouging on its DMD drug (we discussed it here). Within the past few weeks, Marathon agreed to sell its treatment to PTC Therapeutics (Nasdaq: PTCT) for a reported $140 million in cash and stock.

Bottom line: "Gene therapy—a method of using a virus to shepherd genetic instructions into the body—has been tried for Duchenne before, though never successfully. But Solid's program is one of a new group of emerging gene therapy and gene editing programs being advanced by academic groups, startups, and larger companies." ― Ben Fidler