Oct 18, 2018

Axios AM

Mike Allen

☕️ Good Thursday morning ...

Situational awareness: Don McGahn "departed as White House counsel on Wednesday, ending a tumultuous 21-month tenure during which he spearheaded some of President Trump’s most significant political accomplishments, including two appointments to the Supreme Court, but also became a chief witness against him in the special counsel investigation." (N.Y. Times)

1 big thing: A private prod to the Saudis

A Turkish police officer searches inside the residence of Saudi consul General Mohammed al-Otaibi in Istanbul. (Emrah Gurel/AP)

While President Trump took a soft stance, Secretary of State Mike Pompeo told Saudi Crown Prince Mohammed bin Salman he had 72 hours to complete his "investigation" into the murder of journalist Jamal Khashoggi, or risk wrecking the kingdom's place on the world stage, Axios Jonathan Swan reports.

  • A source with knowledge of the conversation told Axios that Pompeo told MBS, in their Tuesday meeting, that he needs to "own" the situation.
  • Pompeo stressed the timeline for dealing with the situation is "limited" because global pressure is mounting.
  • The State Department declined to comment on the remarks, some of which were first reported by CNN. A Saudi spokeswoman acknowledged receipt of Axios’ email but did not comment by deadline. 

Why this matters: Defending the Saudis is becoming less tenable for Trump by the day, as a flood of reporting supports that Khashoggi was gruesomely murdered inside the Saudi consulate in Istanbul.

  • MBS has sought to distance himself from the murder, and President Trump, eager to keep doing business with the Saudis, has amplified the Saudi denials and even volunteered the theory that "rogue" killers might have done it. 
  • At the same time, the N.Y. Times reports, "American intelligence officials are increasingly convinced that [the crown prince] is culpable in the killing."

Our thought bubble: Despite the all-smiles photos, it seems like Pompeo had a fairly tense conversation with MBS.

  • Pompeo wanted to stress that this wasn’t something the Saudis could brush past, and to make clear to MBS that the facts are going to come out whether the crown prince likes it or not — so he should act quickly against the perpetrators.
  • Trump’s public rhetoric has been, for the most part, exactly what the Saudis want to hear and provides them with plenty of cover.

Be smart: It’s very likely MBS will find some scapegoats, and claim he knew nothing. And Trump’s public signals have suggested he’s eager to accept Saudi denials, and try to move back to business as usual.

  • The latest ... N.Y. Times lead story: "Saudi agents were waiting when Jamal Khashoggi walked into their country’s consulate in Istanbul two weeks ago. Mr. Khashoggi was dead within minutes, beheaded, dismembered, his fingers severed, and within two hours the killers were gone, according to details from audio recordings described by a senior Turkish official."
2. Khashoggi warned of Arab world "Iron Curtain"
Courtesy The Washington Post

The Washington Post today devotes a full page to Jamal Khashoggi's last column before his disappearance:

  • "Arab governments have been given free rein to continue silencing the media at an increasing rate."
  • "The Arab world is facing its own version of an Iron Curtain, imposed not by external actors but through domestic forces vying for power. During the Cold War, Radio Free Europe, which grew over the years into a critical institution, played an important role in fostering and sustaining the hope of freedom. Arabs need something similar."

Covering the coverage ... Vanity Fair's Joe Pompeo: The Post "finds itself at the center of a dizzyingly complex international crisis that it is both covering and mourning in real time."

  • "The Istanbul crew has been working around the clock given the time difference. The video team pulled an all-nighter last week producing a segment about key surveillance footage that the Post obtained, purporting to show a chain of events leading up to Khashoggi’s disappearance."
  • "The editorial page editor, Fred Hiatt, and Khashoggi’s editor, Karen Attiah, have essentially become the Post’s spokespeople for communicating in public about how the organization is grappling with Khashoggi’s disappearance."
  • "They and several others have given about 100 interviews over the past two weeks."
3. The $2 billion midterms
Expand chart
Adapted from The Washington Post. Note: Data from 2018 are for general election candidates only; previous years are for all candidates. Chart: Harry Stevens/Axios

Democratic candidates running for Congress this year have raised more than $1 billion, while Republicans took in $709 million through September, according to a Washington Post analysis by Michelle Ye Hee Lee and Anu Narayanswamy.

  • Why it matters: Democrats' record-shattering sum "highlights the party’s zeal to retake the House and Senate and underscores the enormous amount of money flowing into the midterm races."

"The $1.06 billion raised through the end of September surpasses the nearly $900 million collected by Republican candidates for Congress in 2012 — previously the largest haul registered by a single party by this point in the election cycle."

  • "And it is the first time since 2008 — when Democrats swept the White House and both chambers of Congress — that Democratic candidates for House and Senate have outraised Republicans in direct contributions to candidates’ committees."
4. Pic du jour

Arindam Shivaani/NurPhoto via Getty Images

Canada's Cannabis Day 1: Canada yesterday became the world’s second country (after Uruguay) to legalize recreational marijuana. (Toronto Globe and Mail)

N.Y. Times Quote of the Day ... Marco Bealieu, 29, who waited with friends outside a cannabis retailer in Montreal:

  • "Canada is once again a progressive global leader. We have gay rights, feminism, abortion rights, and now we can smoke pot without worrying police are going to arrest us."
5. Facebook ramps up D.C. outreach for midterms

Facebook has stepped up its efforts to assure a wary Washington that it can protect elections, Axios' David McCabe writes.

  • Why it matters: Outreach that Facebook detailed to Axios is part of a broader push by the company to convince policymakers, the media and the public that it won’t allow a recurrence of the kind of election meddling that occurred in 2016 and is still under investigation today.

The company held briefings for House and Senate staff members at the end of September. A spokesperson added that it had met one-on-one with  "hundreds of Congressional offices to discuss election integrity and ads transparency."

  • Facebook distributed a 6-page handout on its efforts to offices on Capitol Hill, detailing work like its crackdown on fake accounts, the hiring of additional security staffers, and the effort to limit the reach of false news stories — steps that are also outlined on the site Facebook uses to interface with politicians.
  • Multiple sections include the header "Facebook is taking action."

The issue of election security was on the agenda at four events the social giant held at its downtown Washington office over the past two months for the association of Senate press secretaries, congressional staff members, political operatives and outside groups.

  • Reporters were invited this week to tour the company’s election "war room" at its Menlo Park, Calif., headquarters.
6. Amazon, Walmart spend billions in India
Courtesy Bloomberg Businessweek

"Reaching customers in India isn’t easy," Brad Stone and Saritha Rai write in the Bloomberg Businessweek cover story:

  • "No country is more colorfully, anachronistically chaotic. Local roads are rutted with potholes and cluttered with motorcycles, auto rickshaws, and stray dogs. Making deliveries requires Mad Max-level driving skills."
  • "Four out of five Indians earn wages in cash; credit cards are rare, and trust in transacting online has to be earned."
  • "A quarter of the population lives in poverty, and a similar proportion is illiterate."
  • "Still, the country’s middle class is growing, which is why risk-tolerant retail giants want in."

The strategies:

  • "Amazon’s goal is to 'transform the way India buys and sells,' according to its local mission statement. ... [T]his is a massive undertaking that, as usual with ­early-stage Jeff Bezos projects, is massively unprofitable. ... In one initiative, Amazon turned 14,000 local shipping offices into e-commerce training centers, called Easy Stores, where counselors are available to escort buyers through the virtual mall. Orders are delivered to the stores a day or two later, and buyers can pay cash when they pick them up."
  • "Walmart Inc. in May spent $16 billion to acquire Amazon’s primary rival in India, the homegrown online retailer Flipkart. ... Flipkart has sent researchers into towns and ­villages to study what people want and how they use their smartphones, while preparing versions of its service in five local languages. It also recently introduced 2Gud, a mobile website targeting lower-income buyers that offers a selection of used and refurbished consumer electronics and appliances."
7. Uber for secrecy

Uber "has found a way to tap debt markets when burning through billions of dollars of cash: Keep financial details closely guarded and hire former Goldman Sachs bankers to oversee the deals," Bloomberg's Sally Bakewell and Davide Scigliuzzo report:

  • "The ride-hailing company this week sold $2 billion of bonds in what’s known as a private placement."
  • "The secretive approach, bypassing Wall Street’s broader bond market, allowed Uber to limit the financial information it disclosed — and then only to a small and select group of buyers."
  • Why it matters: "That kept prying eyes away from the books of a firm that is still losing money as it expands globally."

Be smart: "Uber’s privacy stands out even in contrast to other cash-burning technology companies that are tapping credit markets."

8. Why 2020 Dem may be a surprise
Courtesy TIME

If Democrats retake one or both houses of Congress, it'll be partly because of
an "emerging national network of progressive organizers ... nominating a historic number of women and people of color and repopulating state and local races with energetic young candidates," TIME's Charlotte Alter writes.

  • "The result is not only a new class of candidates to run in 2018, 2020 and beyond. It could also change the structure of the Democratic Party itself. ... Nobody plans to give up after Nov. 7."
  • Why it matters: "Democrats will be heading into a 2020 presidential election in which local grassroots organizers will have more power than ever."

Be smart: "Strategists say this new political landscape is likely to favor a surprise contender over the D.C. creatures who have been plotting a run for years."

9. "A delighted incredulity when faced with the modern world"
Courtesy The New York Times

In a profile by Taffy Brodesser-Akner on the cover of this weekend's New York Times Magazine, actress and comedienne Melissa McCarthy is indoor skydiving while talking about "trying to keep comedy alive at a moment when Hollywood — and its audience — can’t seem to crack a smile":

  • "If aliens landed and you wanted them to understand the toll of the recent years on the American psyche, you could easily do so by explaining that in 2018, the same comic supernova who gave us 'Spy' and 'Heat' and Megan from 'Bridesmaids' and Sean Spicer on 'S.N.L.' was making a serious drama, just her second starring dramatic role since 2014’s 'St. Vincent.'"
  • "Can You Ever Forgive Me?" ( opening tomorrow), the big fall movie from the most bankable comic star on this planet, "is a drama that will leave you in tears."
  • Keep reading. ... Trailer.
10. 1 tip thing

"You Want 20% for Handing Me a Muffin? The Awkward Etiquette of iPad Tipping ... Countertop payment tablets turn gratuities into a public ordeal; ‘It guilts you into it'" ... Wall Street Journal A-hed by Jennifer Levitz:

  • "Consumers face that disconcerting ritual at bakeries, coffee shops, food trucks and other businesses that use tablet credit-card readers such as Square."
  • "The devices often ask customers to make tipping decisions on the fly — with the person who just served them looking on."
  • "Tip jars have long sat on counters, but consumers have all sorts of viable excuses for avoiding them or tossing in just a few coins, such as not having the right change."

How it works: "The Square system has default tip options. For transactions under $10, the screen shows 'no tip,' $1, $2 or $3. For purchases over $10, the defaults are no tip, 15%, 20% or 25%."

  • "Proprietors decide whether to turn on the tip prompt, and they can customize the suggested tip amounts."

Square has built "a dual-screen register that doesn’t need to be flipped around."

  • I haven't seen this yet. Have you?
Mike Allen