--:-- John Bickley: This episode is brought to you by LifeLock. Between two-factor authentication, strong passwords, and a VPN, you try to be in control of how your info is protected. But many other places also have it, and they might not be as careful. That's why LifeLock monitors hundreds of millions of data points a second for threats. If your identity is stolen, they'll fix it. Guaranteed or your money back. Save up to 40% your first year. Visit LifeLock.com slash podcast for 40% off. Terms apply.
--:-- John Bickley: The Federal Trade Commission is facing accusations of political targeting against Twitter. 12 demand letters in 10 weeks. Over 350 separate requests you've demanded of Twitter. Why are you harassing them? What exactly is the agency accused of? And what proof does the company have for its claims? I'm Daily Wire Editor-in-Chief John Bickley with Georgia Howe. It's Friday, July 14th, and this is Morning Wire.
--:-- Georgia Howe: A new report reveals that the IRS and federal law enforcement may have targeted a bank owner based on his political views. We have the exclusive Daily Wire report. And California lawmakers made a surprising policy decision this week that sparked widespread blowback. Why did a child trafficking bill initially fail before lawmakers reversed course? Our children need to be safe and we need to make sure that we send that message to everyone that that's what we're going to do. Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know.
--:-- John Bickley: The House Judiciary Committee is grilling the Federal Trade Commission over claims that it's been harassing Twitter for political reasons. Meanwhile, Twitter is asking a federal court to end the FTC's investigation into the company. Daily Wire reporter Megan Basham is here now with more.
--:-- Megan Basham: So Twitter says it's being harassed by the FTC and that an investigation into its security practices is, quote, tainted by bias. The House Subcommittee on the Weaponization of the Federal Government says it has proof that those claims are true. Why is the FTC investigating Twitter and what evidence is there for claims of political bias?
--:-- Megan Basham: So the background here is that in 2011, the FTC found that Twitter had mishandled users' data. So Twitter's former leadership had made an agreement with the FTC that allowed it to oversee the company's security efforts. But then since 2021, the FTC has been run by Lena Kahn. And to give you a little background on her, Politico called her, quote, among the most activist figures in Biden's administration.
--:-- Megan Basham: So after Elon Musk bought the company with pledges, of course, that it was going to be this free speech platform, Kahn's oversight really began to ramp up. The FTC demanded all internal communications that mentioned Elon Musk, and they wanted all communications sent or received by Musk. They also wanted to know why Twitter fired former FBI official Jim Baker and then just a lot of other deep in the weeds stuff that would give the FTC some pretty far-reaching access into Twitter.
--:-- Megan Basham: Well, Twitter said it was being pummeled by FTC requests coming something like every other week. So as part of all of this, the FTC brought in the firm Ernst & Young. Ostensibly, its purpose was to carry out an independent assessment of Twitter security. But an Ernst executive testified in a deposition recently that FTC officials pressured them to reach particular conclusions.
--:-- Megan Basham: This Ernst employee said that the FTC seemed to be quote trying to influence the outcome of the engagement before it had started. And then maybe the most explosive allegation here, he also said that the FTC seemed to threaten Ernst and Young that if they resigned from this job, the agency was going to retaliate against them.
--:-- Megan Basham: So now what you have is the House Judiciary Committee holding hearings about this. Chair Jim Jordan in particular, really grilled Khan. He said that these are the kind of things that go on in banana republics. And he asked why the Biden administration is so afraid of free speech.
--:-- Megan Basham: So on the one hand, you're harassing Twitter. And then you're saying the guy we've selected, the entity we've selected, Ernst & Young, the accountant we've selected to be the fact finder, you better find what we want. And if you try to get out of it, we're going to retaliate against you. That is frightening.
--:-- Megan Basham: When we talk about the weaponization of government, this from the same agency that said, tell us all the journals you're talking to, that's what we're concerned about, Ms. Kahn.
--:-- Megan Basham: To all of that, Kahn said that the investigation and demands for internal information was necessary to protect user security. And she says that Twitter's privacy policies had become much more lax under Musk. Musk, in turn, tweeted that Kahn's testimony was, quoting, extremely concerning.
--:-- Megan Basham: Now, what about the lawsuit that Twitter filed on Thursday? So as a result of the House report that the FTC had been engaged in this politically motivated investigation, Twitter asked a federal court to do three things. One, it wants it to throw out that 2011 agreement that allowed the FTC to oversee Twitter's security practices. Number two, it wants to block the agency from deposing Elon Musk because Twitter says the FTC request, quoting, derives from the same bad faith and improper conduct that has characterized the FTC's investigation to date.
--:-- Megan Basham: And then number three, it just wants the court to force the agency to drop this entire investigation.
--:-- Megan Basham: Now, what about Democrats? Do they have a response to this? Well, they're standing with the FTC. So New York Congressman Jerry Nadler, who is the top Democrat on the committee, he offered a pretty representative statement. He said, protecting user privacy is not political.
--:-- Megan Basham: Well, very concerning, if true. We're going to continue to monitor.
--:-- John Bickley: Megan, thanks for reporting.
--:-- Megan Basham: Anytime.
--:-- John Bickley: In an original investigation for The Daily Wire, investigative reporter Luke Rosiak uncovered apparent abuses by law enforcement in their attempt to target a conservative economist and accuse him and his bank of money laundering and tax evasion. Luke joins us now to discuss.
--:-- Luke Rosiak: Yeah, what we uncovered was pretty remarkable. So Peter Schiff is this well-known conservative economist who often goes on Fox News and talks about how low taxes make for good policy. In 2017, he opened a bank called Euro Pacific in Puerto Rico. He convinced quite a few people that actually moved to the island through appearances on Joe Rogan's podcast. You can't beat the tax breaks. It is part of the United States, but you remember, you know, from the revolution, no taxation without representation.
--:-- Luke Rosiak: So what happens is when you move to Puerto Rico, you no longer have to pay the federal income tax or the Obamacare tax. Soon after the IRS teamed up with four other countries to grant an international tax evasion and money laundering police force called the J5 their first action they launched the largest tax investigation in the world, quote, against Schiff and boasted that it was unprecedented.
--:-- Luke Rosiak: So this international force touted the investigation as something that hadn't been done before. Is that normal for a law enforcement agency to be bragging about an ongoing investigation? No, if you get a grand jury subpoena, you're told not to discuss it publicly. And law enforcement is also barred from discussing grand jury information.
--:-- Luke Rosiak: But after authorities served a California grand jury subpoena on the Puerto Rican bank seeking all of its records, four media outlets learned of it. Tonight, 60 Minutes, The Age newspaper, The Sydney Morning Herald, and The New York Times reveal how Schiff's bank and around 100 of its Australian customers are at the center of an enormous worldwide tax evasion investigation.
--:-- Luke Rosiak: So the implication here is that the IRS wasn't too happy with Schiff's politics and then put a target on him. But why did Australia's government factor in here? Well, lawmakers in Australia had just introduced a bill to give them increased powers to track people's money. But to pass, it needed a villain. And 60 Minutes Australia thought it found one in Schiff's bank.
--:-- Luke Rosiak: So what are the specific allegations? What did Schiff's bank supposedly do wrong? Money laundering and tax evasion. But the thing is, despite so many people scouring its records, nobody gave a single example of any customer using the bank for that, much less the bank doing it. It was just the fact that this police force said so and Schiff's conservative politics.
--:-- Luke Rosiak: An Australian court issued a defamation verdict against 60 Minutes Australia. The judge presiding over it happened to be actor Hugh Jackman's brother, by the way. The IRS never charged Schiff or even, as far as we know, any customers. The investigation seemed like an embarrassing failure. But in June 2022, the IRS's top criminal investigator, Jim Lee, flew to Puerto Rico to hold a press conference suggesting that the bank was being shut down because of its successful criminal probe.
--:-- Luke Rosiak: We've had some significant successes already in just the short time the organization has been together. In January of 2020, each of the J-5 countries participated in a global coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion and money laundering by a suspected bank in Puerto Rico. The operation from the J-5 was dubbed Operation Atlantis, and the bank was Euro-Pacific Bank.
--:-- Luke Rosiak: Newspapers ran with headlines like, IRS helped shut down bank for tax evasion. But this wasn't true. Paperwork showed that it was a Puerto Rican regulator closing the bank based on claims that it was, quote, critically insolvent. The regulator ordered it turned over to a trustee for liquidation. Yet the trustee soon found that the bank actually had all of its deposits, plus more.
--:-- Luke Rosiak: Nonetheless, the regulator said Schiff couldn't own the bank because of, quote, negative press. All right, so the government investigated someone, found nothing, leaked their investigation, then cited the resulting news coverage to spin it as a success and then punished them anyway.
--:-- Luke Rosiak: Exactly. The bank's top staffer died of a heart attack shortly after that press conference. Schiff lost more than $10 million. And a year later, the liquidator hasn't returned any of the $65 million in deposits to bank customers.
--:-- Luke Rosiak: Lawyers for Schiff say criminal and ethical rules may have been violated by law enforcement. But the IRS won't answer any of my questions.
--:-- Luke Rosiak: All right, so 65 million in people's money is still being held. Let's hope we get some answers soon.
--:-- John Bickley: That Daily Wire investigative reporter Luke Rosiak. You can read his full story on dailywire.com.
--:-- John Bickley: California lawmakers made a policy move this week that prompted severe backlash, and now they're reversing course. After public outcry and involvement from Governor Newsom, lawmakers called an emergency session on Thursday and advanced a bill that would designate child trafficking as a serious felony. Here to bring us the details on what prompted the about-face by lawmakers is Daily Wire's Amanda Prestigiacomo.
--:-- Amanda Prestigiacomo: So last week, California Democrats in the state assembly chose not to advance a bill that would have made human trafficking of minors a, quote, serious felony in the state. That designation would have meant the crime of trafficking children would trigger California's three strikes law, which essentially forces the courts to make felons serve 25 years to life in prison if they have committed two previous serious or violent felonies.
--:-- Amanda Prestigiacomo: It's interesting because Democrats on the California Assembly Public Safety Committee initially chose not to advance this bill, even though it passed the Senate on a bipartisan 40 to zero vote. The reaction was immediate. People who had testified before the vote were seen crying, and some shouted cowards.
--:-- Amanda Prestigiacomo: After public outcry and even condemnation from California Governor Gavin Newsom, the Assembly held an emergency session on Thursday and the bill moved forward, though two Democrats abstained. Senator Shannon Grove, who authored the bill, subsequently released a statement saying that the bill has strong bipartisan support, protects victims of child sex trafficking, and should not be a partisan issue.
--:-- Amanda Prestigiacomo: Grove added, quote, today is a victory for every survivor. Now, this seems like a somewhat non-controversial bill. Like you said, it got unanimous support in the state Senate. Why did Democrats on the Public Safety Committee initially vote against it?
--:-- Amanda Prestigiacomo: Well, Assemblyman Reggie Jones-Sawyer, a Democrat from South Los Angeles, who was the chairman of the Public Safety Committee, he put out a statement in part explaining the thumbs-down vote. He said that the bill, quote, makes no new corrective actions or enhancements to laws already in place.
--:-- Amanda Prestigiacomo: He went on to say that he would not build on the current three strikes model that he claims does not work to deter crime and only ends up incarcerating more disadvantaged people. I'll add that California is already one of the worst states in the nation when it comes to human trafficking. A controversial bill, SB 357, was signed into law last summer by Governor Newsom, and critics say that law effectively decriminalized prostitution in the state.
--:-- Amanda Prestigiacomo: Law enforcement officials have told us this has unfortunately kept their hands tied while allowing human trafficking to spike. Now, we know that Governor Newsom was disappointed when the bill didn't advance. What was his role in the emergency session and this turnaround?
--:-- Amanda Prestigiacomo: Well, he said he was surprised that the bill did not pass initially. And though he doesn't usually involve himself in these types of disputes, he did take the side of Grove, the GOP state senator who authored this bill, rather than the far-left progressives on the Public Safety Committee.
--:-- Amanda Prestigiacomo: Well, the optics of voting against this bill were really bad, especially in light of Sound of Freedom this week.
--:-- John Bickley: Amanda, thanks for reporting.
--:-- Amanda Prestigiacomo: Anytime.
--:-- John Bickley: Thanks for waking up with us. We'll be back this afternoon with more of the news you need to know.
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