News Brief: Election Night Results, Rick Gates Testifies, Puerto Rico's Finances
RACHEL MARTIN, HOST:
Ohio voters went to the polls yesterday in the last special congressional election before the 2018 midterms. And David, it has turned out to be a bit of a nail-biter.
DAVID GREENE, HOST:
It sure has. And the outcome of this is going to determine whether a House district outside Columbus, Ohio, will stay in Republican hands for the rest of this year - which sounds like it's not the biggest deal in the world. But this race has been drawing a whole lot of national attention because of what it might signal about how the parties are going to fare come November's midterm elections. As things stand right now, Republican Troy Balderson leads Democrat Danny O'Connor by less than 1 percentage point, about 1,800 votes or so, not great for Republicans considering this is a district that President Trump carried in 2016 by 11 percent. Now, The Associated Press says this race is still too close to call. There are about 8,000 provisional or absentee ballots that still have to be counted.
MARTIN: All right, let's talk with NPR's Domenico Montanaro. Domenico, Republicans obviously did not want this to be a close race. And yet, this is where we're at right now.
DOMENICO MONTANARO, BYLINE: Well, look. That's why Republicans spent millions of dollars to try to win this race. It appears that Balderson, at this point, is at least in the lead. He's ahead by some 1,754 votes, as David noted, some 0.9 percentage points ahead. Now, that's important because if the gap closes to within 0.5 percentage points, it would trigger an automatic recount. There are some 3,400 provisional ballots that are out. So O'Connor's team hoping that he can make up a difference, needing a little over 700 votes, or about 60 percent of the remaining provisionals and absentee ballots.
But regardless, this was a lot closer...
MONTANARO: ...Than Republicans would have wanted it to be. The Congressional Leadership Fund, for example, warning this morning - they're the group that kind of helps these guys win in some of these places, outside group - said that while they won tonight, it remains a very tough political environment and that they can't expect to win tough races when their candidate's being outraised.
MARTIN: Right. So Democrats, even if they lose this seat, clearly, that'll be a loss that will hurt them. But the bigger picture is they're competitive in places they didn't think they'd be.
MONTANARO: Absolutely. Look. There are 69 Republican-held districts that Trump carried in 2016 by less than the margin that he won in this area or that Hillary Clinton won outright. So that expands the map significantly...
MONTANARO: ...When Democrats only need 23 seats to take back the House.
MARTIN: OK. There's another close race in Kansas that we're watching in the GOP primary for governor. What happened there?
MONTANARO: Well, so far, for governor, you have Kris Kobach, who's the attorney general, running for governor who has the backing of President Trump. With about 95 percent of the votes in, Kobach is slightly ahead by only about 600 votes over the incumbent. Now, remember, Trump endorsed Kobach. He's the guy who ran Trump's Election Integrity Commission - so someone that Trump has some loyalty to.
MARTIN: And a major upset in Missouri, a major win for organized labor in that state, right?
MONTANARO: Right. With the right-to-work law that had been - looked like it was going to go into place and - unions pushed, spent millions of dollars and were able to get it removed.
MARTIN: NPR senior political editor Domenico Montanaro. Thanks so much, Domenico. We appreciate it.
MONTANARO: You're welcome.
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MARTIN: OK. Paul Manafort's lawyers got their chance to cross-examine Manafort's former business partner Rick Gates, and they pressured him to admit his own wrongdoings.
GREENE: Which he did. He detailed all of his own crimes, years of embezzlement and the possibility that he might have stolen money from President Trump's inaugural committee. Plus, he was forced to reveal an extramarital affair. It was not all about him, though. Gates also testified that Paul Manafort personally directed the creation of false financial statements and hid income in order to evade taxes.
MARTIN: NPR's Ryan Lucas has been covering the trial and joins us now. Hey, Ryan.
RYAN LUCAS, BYLINE: Good morning.
MARTIN: So all this admitted wrongdoing by Rick Gates gave Manafort's defense attorneys an avenue of attack that has been anticipated. Right? They are going after Rick Gates' credibility.
LUCAS: Absolutely. Manafort attorney Kevin Downing took Gates and the jury yesterday through, really, a lengthy list of wrongdoing that Gates has acknowledged as well as new allegations that Downing threw at him. So Gates was forced to explain to the jury how he embezzled hundreds of thousands of dollars from his former business partner Paul Manafort. Downing also brought up fraud allegations as well as what Downing repeatedly referred to as Gates' secret life. So that forced Gates to acknowledge, on the stand, to having an affair with a woman in London around a decade ago. Downing also dinged Gates on lies that he told the special counsel Robert Mueller's investigators. And Gates struggled with this question, even though he's pleaded guilty to lying to the FBI.
Now, Downing remarked at one point that Gates had excellent recall when questioned by prosecutors but can't remember much now when he's confronted with his own wrongdoing by the defense. Now, this line of questioning came to a head several hours into the afternoon when Downing asked Gates how, after all the lies that Gates has told and the fraud he's committed, how can he expect the jury to believe him? And Gates said the jury can believe him. And he said because...
MARTIN: Can or can't?
LUCAS: They should...
LUCAS: ...because, he said, I'm here to tell the truth and take responsibility for my actions. Mr. Manafort, he said, had the same path. I'm trying to change.
MARTIN: Right. Also, he loses whatever grace he's been granted by the feds when it comes to his own prison sentence if he lies on the stand.
LUCAS: That's exactly right. The plea agreement was something that Downing dug into as well. Gates' plea agreement - he acknowledged actually under questioning - Gates did - that he could face decades in prison if convicted. And he did acknowledge that under his deal, he could receive a shorter sentence in exchange for his testimony. If he lies, though, as you said, that's out the door.
MARTIN: So what happens now, Ryan? What happens today?
LUCAS: Well, the defense has another hour or so of cross-examination of Gates this morning. We expect them to continue to really dig in on him. They have - really, their whole case is based around Rick Gates and trying to convince the jury that Gates is responsible for much of the trouble that Manafort finds himself in. After that, prosecutors will have another chance to question Gates to undo any damage that may have been done to his credibility in the eyes of the jury. And after that, we hear to expect from maybe a few more government witnesses, including an FBI agent. But we do appear to be coming closer at least to the end of the case. We expect the government to wrap up its case by the end of this week for sure.
MARTIN: OK. NPR's Ryan Lucas. Thanks so much, Ryan.
LUCAS: Thank you.
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MARTIN: Puerto Rico no longer has control of its fiscal future.
GREENE: That's right. A federal court has ruled that Puerto Rico has to cede some powers to a fiscal oversight board, which was created by Congress two years ago, to try and manage the U.S. territory's tenuous financial situation. So you really have to ask what this all means for the island as it continues to try and rebuild after Hurricane Maria.
MARTIN: All right. OK. NPR's Adrian Florido is joining us now from San Juan, Puerto Rico. Adrian, first, just start off by explaining what this fiscal oversight board is.
ADRIAN FLORIDO, BYLINE: Well, it's seven people in charge of fixing the island's finances. Remember that Puerto Rico owes bondholders more than $70 billion, money which it cannot pay.
MARTIN: We should say, it had a lot of debt even before the storm happened.
FLORIDO: Yeah, yeah. I mean, this is an ongoing problem. It's been years in the making. And so two years ago, Congress allowed Puerto Rico to effectively declare bankruptcy, to restructure this debt. But it also created this board with huge power to make decisions about the island's finances in order to get it out of this debt.
FLORIDO: And so one way this board is trying to do that is by, essentially, trying to get the government to implement all kinds of spending cuts and reforms, something that is causing some tension - a significant amount of tension in Puerto Rico with the elected government there.
MARTIN: So the government basically got frustrated and then sued over this. What were they arguing?
FLORIDO: Well, they argued that the fiscal board has the authority to recommend fiscal policy and budget changes but not to force the government to implement some of these austerity measures. So one example - in Puerto Rico, public workers are entitled by law to a Christmas bonus. The board wants that bonus eliminated. So in its budget for the government, it didn't include enough money for it. And that's something the government has argued, you know, they can't do.
And so the fundamental question - right? - is when it comes to fiscal policy, to fiscal reform, to the budget, who has the final say? And you know, yesterday, this federal judge ruled that it is this appointed board, not the elected government of Puerto Rico - that this appointed board has the power to overrule Puerto Rico's government.
MARTIN: Wow. So you know, I can't imagine that the government in Puerto Rico is very pleased with this decision.
FLORIDO: No. No, it's not. The governor, Ricardo Rossello, said it was proof that Puerto Rico, which is a U.S. territory, is in fact more like a U.S. colony. He called it a, quote, "undignified relationship." On the other hand, you have members of this oversight board, some of whom, I should mention, are from Puerto Rico. But others are from the mainland U.S. They welcome the ruling. They said it was time for the governor to start implementing these cuts and austerity reforms that he's been resisting. And they called these cuts and reforms a roadmap for a better future for Puerto Rico.
MARTIN: What are the practical implications of this for Puerto Ricans?
FLORIDO: Well, there are the implications for governance on the island and also for people's lives, right? So in terms of governance, it obviously means that the island's elected governor and its legislature now have much less authority than they've been claiming to have. And in terms of people's lives, it means that, you know, people on the island can expect more cuts to services, benefits, even pensions possibly. Some of these cuts have already begun, like, to public education and to health benefits. And on an island, Rachel, where about half of its 3.4 million people live in poverty, these cuts can slice really deep.
MARTIN: Right. NPR's Adrian Florido reporting from San Juan, Puerto Rico. Adrian, thanks so much. We appreciate it.
FLORIDO: Thank you.
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