Scoop: Trump frustration with Tillerson rising fast - Axios
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Scoop: Trump frustration with Tillerson rising fast

Pablo Martinez Monsivais / AP

There's a ticking problem with Rex Tillerson, and it's growing louder by the day, according to officials inside and close to the White House.

President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, "Rex just doesn't get it, he's totally establishment in his thinking."

Tillerson's jaw-dropping comments on TV today will likely only worsen their relationship.

Fox News Sunday moderator Chris Wallace asked Tillerson about Trump's response to the racist carnage in Charlottesville.

Tillerson replied: "I don't believe anyone doubts the American people's values or the commitment of the American government, or the government's agencies to advancing those values and defending those values."

Wallace asked the obvious follow-up question: "And the president's values?"

"The president speaks for himself," Tillerson said.

Wallace looked stunned.

Why this matters: We've been hearing for weeks, from sources who've spoken to the president, that Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency.

The Tillerson criticisms we keep hearing

  • Trump administration officials can't get their heads around why he still doesn't have political appointees in the top roles at the State Department. They know he's reorganizing the agency, but can't fathom why he's allowed these crucial jobs to remain in the hands of staff whose diplomatic stature is diminished because they're "acting" in the roles.
    • Tillerson's spokesman R.C. Hammond told Axios it's because "the system is busted. The Secretary sends over recommendations and they sit on the dock."
  • Tillerson hasn't put in the time to build goodwill with Washington's foreign policy community or with the media.
  • Numerous reports that Tillerson has destroyed morale at State, empowering only the tiniest inner circle.
  • Tillerson contradicted the president's response to the recent tensions over Qatar.
    • Trump attacked Qatar for funding terrorism "at a very high level", and supported the Saudi-led blockade. Tillerson muddied Trump's message, urging Qatar's neighbors to ease up on the blockade and engage in "calm and thoughtful dialogue."
    • Hammond's response: "On Qatar, progress will be measured in months and we are seeing it."
  • Tillerson argued against the White House's financial sanctions against the dictatorial regime in Venezuela, according to sources close to the White House. These sources pointed to the influence on Tillerson of Tom Shannon, a top State careerist who is an expert on Latin America.
    • Sources close to the president view Shannon as a rogue force who, in their view, naively puts too much faith in diplomacy at the expense of hardline actions like sanctions.
    • Shannon's recent meeting with Venezuela's then-foreign minister — at the same time the WH was contemplating tough action against Venezuela — raised eyebrows among Republican hawks.
    • Hammond's response: "Yes, diplomats do prefer diplomacy."
  • Tillerson keeps recommending to Trump that he re-certify Iran's compliance with the nuclear deal; whereas Trump has made clear he wants to cancel it.
    • Hammond's response: "This admin inherited a lousy deal. It's taking the circumstances created by the Deal and trying to build around it a policy that addresses all of the threats Iran offers the world."
  • White House officials frequently vent about Tillerson's Chief of Staff Margaret Peterlin. They say she's difficult to work with and isolatesthe secretary from the information and contacts he needs to do his job well.
    • Hammond's response: "It is Washington, you have to have your knives out for someone."
A White House official said, "Tillerson is a great representative for the administration and has confronted many diplomatic challenges well."
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Murkowski backs ACA individual mandate repeal

Photo: Jose Luis Magana / AP

Sen. Lisa Murkowski, a moderate Republican who broke ranks over the summer to vote against GOP plans to repeal the Affordable Care Act, has written an op-ed declaring her support for a repeal of the ACA's individual mandate. She writes, "I believe that the federal government should not force anyone to buy something they do not wish to buy in order to avoid being taxed."

Why it matters: The Senate tax plan includes a repeal of the mandate, which helps stabilize insurance markets by incentivizing healthy people to buy coverage. This may be a signal Murkowski intends to vote yes on the plan.

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Military personnel reassigned over conduct on Trump Asia trip

President Donald Trump, center, and Vietnamese President Tran Dai Quang. Photo: Andrew Harnik / AP

Three military personnel who worked for the White House Communications Agency are being reassigned for alleged "improper contact with foreign women" during President Trump's Asia trip, according to the Washington Post. The service members are responsible for providing "secure communications" to the president, vice president, and secret service.

Flashback: Four members of the same team faced similar allegations in August while in Panama ahead of Vice President Pence's arrival in the country.

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Russia-friendly Congressman under scrutiny

Rep. Dana Rohrabacher, R-Calif. Photo: Paul Holston / AP

California Congressman Dana Rohrabacher has come under scrutiny in recent months from special counsel Robert Mueller and the Senate Intelligence Committee for his close ties to the Kremlin, according to the New York Times. One eye-catching line: "the F.B.I. warned him in 2012 that Russia regarded him as an intelligence source worthy of a Kremlin code name."

Why it matters: Rohrabacher, a Republican, had no role in President Trump's election, but there have been several instances of him "showing up" at moments relevant to the Russia investigation, per the Times. His position as chairman of the House Foreign Affairs subcommittee on Europe, Eurasia and Emerging Threats is also a point of concern for some.

  • He accepted a "confidential" memo including accusations against Democratic donors in April 2016 in Moscow, which later resurfaced in the Trump Tower meeting between Donald Trump Jr. and Russian lawyer Natalia V. Veselnitskaya.
  • He met with last August at the Ecuadorean Embassy with Julian Assange , who is believed to have "acted as a conduit for Russian operatives seeking to release a trove of hacked Democratic emails."
  • He had dinner with Alexander Torshin, the deputy governor of a Russian central bank that tried to set up a "backdoor" meeting with then-candidate Trump and Vladimir Putin.
Rohrabacher said "none of the meetings were untoward or inappropriate," per the Times: "I want to treat Russia as if it is a nation state that deserves to be judged as all other nation states are judged."
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Apple reportedly bought a VR headset maker

Photo: Marcio Jose Sanchez / AP

Apple has acquired Canadian VR headset maker Vrvana (whose product was praised but never shipped) for about $30 million, according to TechCrunch.

Between the lines: The acquisition adds to the growing rumors that Apple is planning to develop more augmented and virtual reality products in the future. The release this year of its ARKit showed the company's interest in augmented reality using smartphones, but it's hard to believe Apple isn't interested in adding new devices to its lineup. Also in June, it confirmed it acquired a small German maker of eye-tracking glasses.

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Report: Mueller probing Kushner contacts with foreign leaders

Kushner arrives on Capitol Hill in July to meet behind closed doors before the Senate Intelligence Committee. Photo: Andrew Harnik / AP

Special Counsel Robert Mueller and his team are looking into contacts Jared Kushner had with foreign leaders, including over a December UN resolution condemning Israeli settlements, before President Trump took office, the Wall Street Journal reports.

Why it matters: It's illegal under the Logan Act for a private citizen to communicate with a foreign government to attempt to influence U.S. policy, but no one has been convicted under that law and it's unclear whether that's what Mueller is investigating. What is clear is that the Mueller investigation is going far beyond collusion with Russia to influence the election.

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Court files show allegation of "daily" harassment by Conyers

U.S. Rep. John Conyers, D-Mich. Photo: Carlos Osorio / AP

A former scheduler in Rep. John Conyers' office said she was the victim of "unwanted touching 'repeatedly and daily'" according to court documents from this February, BuzzFeed reports.

Why it matters: This woman was not a part of the sexual harassment settlement made in 2015, which Conyers admitted to making on Tuesday while denying claims of sexual harassment. The victim of the new incident sued Conyers for over $100,000, but later withdrew the lawsuit after the court denied her request to keep the complaint private.

  • According to BuzzFeed, the staffer describes daily harassment by Conyers from May to July 2016, including "rubbing on her shoulders, kissing her forehead, covering and attempting to hold her hand," and more.
  • She said this caused "insomnia, anxiety, depression and chest pains," which was made worse after Conyers' wife Monica called her a "whore."
  • The staffer "eventually became so unwell" that she attempted to take sick leave in 2016, and was fired after Conyers' chief of staff Raymond Plowden "demanded" proof that she was sick.
  • She filed a motion in February to file a lawsuit kept private from the public because she wanted to avoid "irreparably [harming]" the Congressman. It was ultimately rejected, and she "sought to withdraw her lawsuit with prejudice," which would keep her from re-filing later, per BuzzFeed.
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A new obstacle to Mideast peace talks

President Trump meets with Palestinian leader Mahmoud Abbas at the White House in May. Photo: Evan Vucci / AP

The Jerusalem Post reports: "Palestinians have frozen ties with the U.S. Consulate in Jerusalem and American officials visiting the West Bank ... If Jared Kushner, President Donald Trump's senior adviser, or Jason Greenblatt, the administration's main peace envoy came to the West Bank, PA officials would not be able to meet with them."
Why it matters: A senior adviser to Palestinian leader Mahmoud Abbas said they're freezing communications because the State Department won't renew the certification of the Palestinian Liberation Organization's representative office in Washington, D.C. If the office is forced to close, it would almost certainly derail the Israeli-Palestinian peace negotiations being brokered by the Trump administration.

The details:

  • The PLO office is the de facto Palestinian embassy to the U.S. and was an important symbol for Palestinian diplomatic achievements.
  • The Palestinians say closing the office would be the equivalent to cutting diplomatic ties between the U.S. and the Palestinian Authority, and would be a proof the Trump administration can't be an honest broker in future peace talks.

Between the lines: There's been speculation that the Trump administration's refusal to certify the Palestinian office was a tactic to gain leverage over the Palestinians in the peace talks. That's false. Secretary of State Rex Tillerson had to sign a letter of decertification regarding the PLO office because the law obliged him to notify Congress if the Palestinians are encouraging the International Criminal Court to prosecute Israel for alleged war crimes (which Palestinian President Abbas did in his UN speech in September).

  • Until now, the Palestinian actions and rhetoric regarding their relations with the U.S. had been mostly symbolic.
What we're hearing: Both sides are still talking to each other, and the office is still open — for now. Relations are not suspended yet. State Department officials tell us they're still in contact with Palestinian officials about the status of the PLO office, as well as about the administration's larger efforts to advance a lasting and comprehensive peace.

The bottom line: The Trump administration is sorting through its political and legal options to navigate this tense — and potentially disastrous — situation.

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How Macy's lost $11 billion in value in 3 years

Photo: Bebeto Matthews / AP

Former Macy's CEO Terry Lundgren takes in on the chin in a new feature in Bloomberg Businessweek, which quotes one retail consultant as saying that Lundgren's 2005 decision to double Macy's size with the purchase of May Department Stores, was "one of the top 5 worst decisions in retail history."

Why it matters: Amazon aside, Macy's has made numerous mistakes — like doubling down on department stores the same year Amazon Prime debuted — which have hastened the retailer's decline and put it in a position to see its profits halved over the past three years.

Macy's existential test, per Bloomberg: "The premise of a department store—to be able to buy a mattress and pajamas in the same place — is still valuable. But today that place is called Amazon, and there you can buy toothpaste, too, and have it all delivered in two days. So the question is, What do department stores have that Amazon doesn't?"

  • New CEO Jeff Gennette is a Macy's lifer who believes the answer to that question is Macy's sales staff.
  • "Macy's needs to turn its associates into Apple geniuses who can engage and have personal information about their customers on their iPads," Robin Lewis, who publishes a retail strategy newsletter, tells Businessweek. "If Gennette can get personal profiles on the 10 percent of his customers who account for over 50 percent of his business, he can market to people individually, as Amazon does."
Even if Macy's executes, more closures are likely ahead: If Macy's is to succeed by selling to its core base of shoppers, that will still require the firm to shrink.
  • There are more than 660 Macy's stores in America, but CFO Karen Hoguet says that only 245 would be "critical" assets if the company were to start over today.
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Uber concealed 2016 hack affecting 50 million customers

Photo: Jaap Arriens / Getty Images

Uber has parted ways with chief security officer Joe Sullivan and one of his deputies, over their handling of an October 2016 data breach in which hackers stole account information of 50 million customers and 7 million drivers, the company told Bloomberg.

The big deal: Instead of immediately disclosing the incident to customers and relevant government agencies, Uber paid the hackers $100,000 to delete the data and keep the incident quiet. Ex-Uber CEO Travis Kalanick, who was ousted in June, learned of the incident one month after it happened. The attack was discovered recently by an outside law firm hired by Uber's board to investigate the activities of Sullivan's security team.

New order: This is the latest attempt by new CEO Dara Khosrowshahi to set a new tone for the company, which has long been known to skirt regulations.

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Trump: AT&T merger "not good for the country"

Photo: Manuel Balce Ceneta / AP

President Trump reiterated his stance against AT&T's merger with Time Warner on Tuesday, the day after the Justice Department sued to block the deal. While he didn't wade into litigation, he added, "personally, I've always felt that that was a deal that's not good for the country."

What's next: AT&T is expected to request an expedited trial to fight the Justice Department's lawsuit. The case has been assigned to Judge Richard Leon, a senior judge on the District of Columbia District Court, who was appointed by President George W. Bush, Reuters reports. Some observers see that as a good sign for the deal, as Republican-appointed judges are typically more business-friendly.