Category: US

CNN
 — 

House Majority Leader Steve Scalise announced he was dropping out of the speaker’s race Thursday after House Republicans failed to coalesce behind him in the aftermath of Kevin McCarthy’s historic ouster.

“I just shared with my colleagues that I’m withdrawing my name as a candidate for the speaker designee,” the Louisiana Republican told reporters.

The swift downfall of Scalise’s speakership nomination came just a day after the GOP conference voted for him over Rep. Jim Jordan, 113-99. The withdrawal was as shocking as it was predictable, after a band of Republicans almost immediately blocked his path and said there was no way they would vote for Scalise as speaker. The move deepens the House GOP leadership crisis, with still no indication there is any viable candidate who could secure the 217 votes needed to win the gavel.

Republicans will now have to scramble to find a path forward as the House remains in a speakerless paralysis. The chaos has prompted some Republicans to call for expanding the powers of the interim speaker.

Many GOP lawmakers quickly urged the conference to support Jordan for speaker. But Republicans, divided and angry over their leadership fiasco, are not unified behind the Ohio Republican.

Several Republicans said they expected opposition to grow for a variety of reasons. One said Jordan will “never” become speaker.

Rep. Ann Wagner of Missouri told CNN Jordan is a non-starter for her. Rep. Austin Scott of Georgia stood up in the GOP conference meeting and said he would not support Jordan, a source familiar told CNN.

And Rep. Don Bacon of Nebraska said he’s worried about “rewarding bad behavior” after Jordan supporters helped tank Scalise’s bid.

“I think there’s enough people that would see what has happened and transpired over the last 40 hours to not support him that we’re going to have the same problem with Jordan that we had with Scalise,” said Rep. Mike Garcia of California, who said he is backing Jordan. “I think it’s a math problem, frankly.”

Jordan or any other candidate needs to win a majority of the entire House to be elected speaker, which is 217 votes, due to two vacancies. That means a GOP speaker nominee can only afford to lose four GOP Republican votes if there are no absences. Democrats are expected to uniformly back House Minority Leader Hakeem Jeffries.

House Republicans will hold another closed-door meeting Friday morning to regroup and discuss their path forward.

Jordan declined to say if he would launch a bid for the speakership Thursday evening. “Any type of announcement about what may or may not happen is best done tomorrow,” he told reporters following the conference meeting.

Scalise scrambled earlier Thursday to try to salvage his bid, seeking to address his critics’ concerns directly in a two-hour-plus conference meeting behind closed doors. He then invited his detractors to meet with him in his office, in an attempt to win over the holdouts.

But Scalise went the wrong direction, as the list of opponents in the GOP conference nearly doubled to around two dozen.

“If you look at where our conference is there’s still work to be done. Our conference still has to come together and is not there,” Scalise said as he announced his withdrawal. “There are still some people that have their own agendas, and I was very clear we have to have everybody put their agendas on the side and focus on what this country needs. This country is counting on us to come back together. This House of Representatives needs a speaker and we need to open up the House again, but clearly not everybody is there, and there’s still schisms that have to get resolved.”

Scalise, who announced he was withdrawing at a second members-only GOP conference meeting Thursday evening, did not endorse a candidate. He will remain House majority leader, the No. 2 Republican in the House.

McCarthy, who earlier Thursday publicly acknowledged Scalise’s difficult task, said after the withdrawal that the GOP conference has to solve its problem – after he was removed by eight Republicans in last week’s vote.

“I just think the conference as a whole has to figure out their problem, solve it and select their leader,” McCarthy said.

As the reality of the deadlock set in Thursday during the earlier conference meeting, the anger inside the conference kept rising.

“This is petty, and I’m getting freaking tired of it,” said Rep. Nicole Malliotakis, a New York Republican. “We’re all in there sharing our feelings, but the reality is we still need to get to 217.”

Late Wednesday, members of the conference had already began to weigh how they would handle the potential collapse of Scalise’s bid, with several GOP sources saying they believed they’d have to consider a new candidate who has yet to run for the speakership.

Many Republicans felt there may not be a candidate at this point who can receive the votes of nearly the entire fractured GOP conference.

“There is no Paul Ryan in this facility. These are the two most viable candidates,” Rep. Thomas Massie, a Kentucky Republican opposed to Scalise, said of Scalise and Jordan.

While there was some belief on Capitol Hill that the brutal assault on Israel over the weekend might prompt Republicans to quickly select a leader – House lawmakers were given a classified briefing on Israel on Wednesday before the conference vote for speaker – the deep divisions in the conference that led to McCarthy’s removal last week have now left the quest for a new speaker at a standstill.

Before Scalise withdrew, Republicans were already considering whether they should try to expand the powers of interim Speaker Patrick McHenry of North Carolina, so the House can pass legislation, like a resolution for Israel, multiple lawmakers told CNN.

“That is an option that we could pursue,” GOP Rep. Steve Womack of Arkansas told reporters.

A group of more centrist Republicans are circulating a letter asserting that McHenry should have more temporary power, sources told CNN – a sign of desperation as the GOP scrambles to coalesce around a speaker.

Separately, some House Democrats have started having preliminary conversations with some Republicans about who, aside from Scalise, would be interested in working with them, one source familiar with the conversations told CNN ahead of the withdrawal.

One of the Republicans Democrats would be interested in is House Rules Chairman Tom Cole of Oklahoma, the source added. But no deal with Republicans would come for free, and Democrats have said they would need major concessions for any talks to become real.

Scalise had hoped to turn his opponents one by one. But even the support Scalise won over proved fickle. On Wednesday, Rep. Anna Paulina Luna said after meeting with Scalise that she felt “comfortable” enough to support his speaker nomination, after he spoke to her about the Oversight Committee’s impeachment investigation into President Joe Biden.

But leaving Thursday’s afternoon meeting, Luna said she was no longer supporting Scalise. “As of right now we need someone who can unite the party and right now, there is no candidate that has 217,” the Florida Republican said.

While many of the Scalise holdouts say they’re backing Jordan, a number of Republicans don’t think that Jordan could be a viable alternative given that he lost to Scalise in the nominating contest, and some Republicans were irritated when he didn’t immediately close ranks behind Scalise

“If Scalise were not to make it, the next person got less votes,” Rep. Mario Diaz-Balart of Florida said of Jordan. “And by the way, I think, more controversial. So that would not be a good thing for this place.”

Before Scalise withdrew, Republican Rep. Erin Houchin of Indiana said she didn’t know if “it will be Jordan or Scalise or even someone else at this point.”

“I think we’re in uncharted territory,” she said, “and it’s gonna be very hard to predict.”

This story and headline have been updated to include additional developments.

CNN
 — 

Iran has loomed large as one of Hamas’ most generous financial backers, providing the militant group crucial resources it needs to carry out acts of terrorism. But investigators in the US and across the globe have identified another revenue source being exploited by Hamas: Far-flung online donors offering support in cryptocurrency.

Even before Hamas launched a surprise attack on Israel over the weekend, Justice Department officials in Washington, D.C. had been pursuing a criminal investigation into the militant group’s use of cryptocurrency through alleged money launderers, CNN has learned.

Justice Department lawyers have released scant details of its money laundering case – with most of the court filings sealed – but those that are public reveal it stems from Hamas-linked cryptocurrency accounts the US government seized three years ago. A court filing in May said the case was “ongoing” and a judge halted proceedings in a related civil matter until next month to allow the criminal case to continue without interference.

Separately, cryptocurrency addresses that Israel has seized for alleged links to Hamas and another Palestinian militant group have collectively been worth tens of millions of dollars, according to private analysts who spoke to CNN.

Hamas’ use of digital currency represents just one of the many ways the group – designated a terrorist organization by the United States and European Union – has sought to raise funds while evading sanctions.

“There’s not one financing method for Hamas or other terrorist organizations. They’re opportunistic and adaptive,” said former CIA analyst Yaya Fanusie, now an adjunct senior fellow with the Center for a New American Security. “Efforts to stop them are a constant game of cat-and-mouse.”

Still, some calls for donations have appeared in plain sight.

Hamas and other terrorist groups have used Facebook and X, formerly known as Twitter, to publicly post their crypto wallet addresses and tell people how to donate, according to a report released this year by the Department of Homeland Security.

Charges filed against a New Jersey man in 2019 described how he posted on Instagram that he “just donated $100 to Hamas.” The man, also accused of sending about $20 in bitcoin to the group, later pleaded guilty to concealing his attempts to provide material support to Hamas.

As governments have sought to police such transactions, Hamas’ military wing – al-Qassam Brigades – announced in April that it would stop fundraising in bitcoin to protect its donors, Reuters reported.

But Hamas has apparently not stopped such efforts altogether. On Tuesday, Israeli authorities announced the freezing of additional cryptocurrency accounts that the group had allegedly used to collect donations during this week’s conflict.

And aside from bitcoin, crypto wallets that Israeli authorities have said are linked to Hamas have included the cryptocurrencies Ether, XRP, Tether and others, according to an Israeli government order.

It’s unclear how much money Hamas has received in cryptocurrency, but there’s evidence they have amassed significant amounts. According to Dmitry Machikhin, the CEO of crypto analytics software BitOK, cryptocurrency addresses linked to Hamas and seized by Israeli authorities received nearly $41 million between 2020 and 2023, as first reported by the Wall Street Journal. Another $94 million was allegedly held by the Palestinian Islamic Jihad, a militant partner of Hamas, according to Elliptic, another analytics firm. The company noted, however, that it was unclear what portion of those assets directly belonged to the group.

Hamas and its al-Qassam Brigades, are among the “most successful initiators of cryptoasset-based fundraising to date in terms of amount raised,” Arda Akartuna, a researcher with Elliptic, told CNN.

Akartuna noted that tracking cryptocurrency linked to al-Qassam Brigades has been complicated by the group’s reliance on “one-time-use” crypto addresses that are generated for each individual donor, and illicit money exchanges that anonymously convert cryptocurrency to cash without records.

“Criminals are always going to look for the next best alternative to continue their activities,” said Akartuna, explaining how new ways to raise funds pop up as enforcement actions shut down others.

A major benefactor for Hamas is Iran, which has provided up to $100 million annually to Palestinian terrorist groups, including Hamas and Palestine Islamic Jihad, according to a US State Department report from 2021. That report noted that Hamas has raised funds in other Gulf Arab countries and from its own charity organizations.

Disclosures from the US Treasury Department have outlined the way in which Hamas has at times received Iranian funds through financiers based in Turkey and Lebanon. For example, a Lebanon-based financial operative functioned as a “middle man” between Iran’s Islamic Revolutionary Guard Corps and Hamas and worked with the Lebanese group Hezbollah to ensure funds were transferred, according to a 2019 Treasury report.

Separately, the US Treasury sanctioned nine targets in 2018 for what the department described as involvement in a network through which Iran used Russian companies to provide oil to Syria in exchange for Syria sending funding to Iran’s Islamic Revolutionary Guard Corps that was then sent to Hamas and Hezbollah.

Iran has used various tactics to fund terrorist groups including Hamas, such as networks of shell companies, transactions masked by senior officials and the use of precious metals to evade sanctions, a 2018 US Treasury advisory stated.

Tehran has both commended Hamas’ recent incursion in Israel and denied involvement.

White House National Security Adviser Jake Sullivan said Tuesday that Iran “is complicit in a broad sense because they have provided the lion’s share of the funding for the military wing of Hamas” as well as other support. Sullivan added that no information currently suggests Iran helped plan or direct the attack.

Hamas additionally raises funds through informal taxes and smuggling, according to a Congressional Research Service report from May.

CNN attempted to reach Hamas representatives for a response to the allegations but received no reply.

Government investigators aren’t the only ones tracking Hamas’ finances.

Attorney Asher Perlin, who represents the family of Yitzchak Weinstock, a 19-year-old American who was murdered by Hamas terrorists outside Jerusalem in 1993, has also kept tabs on the group’s assets.

The Weinstock family obtained a legal judgment of nearly $80 million against Hamas in 2019 but had few conceivable paths to collect on that sum.

That changed in Perlin’s mind after the US Justice Department announced what officials described in 2020 as an unprecedented crackdown on three groups that relied on “cryptocurrency and social media to garner attention and raise funds for their terror campaigns.” Among them was Hamas’ al-Qassam Brigades.

Investigators were able to seize 150 cryptocurrency accounts “that laundered funds to and from” Hamas accounts, according to a DOJ news release.

With court approval, law enforcement officials surreptitiously took control of Hamas fundraising websites, and donors who thought they were contributing to the terrorist organization were actually making deposits in bitcoin wallets controlled by the US government.

At the time, prosecutors filed paperwork asking a judge to issue a forfeiture order granting them legal ownership of what they had seized.

Perlin saw the government’s pending forfeiture case as an opportunity to collect the money his clients in the Weinstock family were owed.

But since filing a claim two years ago, Perlin said the case has been repeatedly delayed as government lawyers have asked the judge for more time to allow a related criminal investigation to proceed.

In May, the judge noted that the criminal investigation was for “alleged money laundering” for Hamas and issued a six month stay on proceedings in the forfeiture case. That stay is set to expire next month.

In a telephone interview from Israel, Perlin expressed frustration that the Justice Department has indicated to him that it will oppose allocating any of the forfeited assets to his clients.

The Justice Department did not immediately respond to a request for comment.

Perlin said the Weinstocks were the only people he is aware of who are trying collect on a judgment against Hamas.

“There’s no reason they shouldn’t be able to enforce their judgment against those assets,” he said.

Minneapolis
CNN
 — 

Inflation remained elevated in September as gas and rents kept prices high and heaped more pressure on consumers, according to new data released Thursday by the Bureau of Labor Statistics.

However, the latest Consumer Price Index also showed that certain inflation gauges are the lowest they’ve been in more than two years.

The Consumer Price Index rose 3.7% for the 12 months ended in September, holding steady with August’s annual gain and landing a touch above economists’ expectations for a 3.6% rise.

On a monthly basis, prices grew 0.4%, landing above Refinitiv estimates for a 0.3% gain.

Although the annual headline inflation rate held steady, Thursday’s CPI report also showed encouraging progress on areas critical to American households as well as the Federal Reserve.

Food price inflation is at its lowest rate since March 2021, matching overall inflation at 3.7%. It’s the first time since early 2022 that food prices did not outpace overall inflation, CPI data shows. And grocery price increases are even lower, at 2.4% annually.

Also, underlying inflation trends are moving in the desired direction of the Fed, which has been on an inflation-busting campaign of rate hikes since March 2022.

When stripping out gas and food, the core CPI cooled for the sixth month in a row and was up 4.1% annually off a 0.3% monthly gain.

It’s the lowest annual growth rate for core CPI in two years. The monthly increase in core held steady from what was seen in August.

Nagging, and lagging, rents

The shelter index, which is largely a measurement of rental leases as well as the implicit rental value of owner-occupied properties, accounted for 70% of the monthly core increase and more than half of the overall monthly increase.

Economists have said that shelter costs, as measured by the CPI, should eventually start to wane. That’s because the CPI rental calculations significantly lag what’s happening in real time and are not showing the recent declines.

“Market rents are flat across the country since the end of last year,” Mark Zandi, chief economist at Moody’s Analytics, told CNN. “So it’s only a matter of time — months — before we start to see much slower increases in shelter costs. And once that happens, we’ll be back within spitting distance of the Fed’s target.”

Taking shelter out of the equation, core CPI rose just 0.1% for the month and is up 2% year over year, according to the report. That’s the lowest annual increase that index has recorded since March 2021.

The Fed’s goal inflation rate is 2%, as measured by the core Personal Consumption Expenditures price index. That inflation gauge remains nearly double that target rate — it rose 3.9% for the 12 months ended in August — however, it’s been steadily cooling.

“The Fed will want to see at least six months of lower inflation before declaring victory,” said Julia Pollak, chief economist at online job marketplace ZipRecruiter. “In the meantime, higher borrowing costs are weighing on households, particularly those with credit card debt or subprime car loans; and on businesses, especially those with high levels of debt in variable-rate bonds. If rates stay higher for longer, as the Fed has signaled, that will likely drag down consumer spending and business spending — including on hiring — in the coming months.”

Adding to the consumer headwinds are a cooler labor market, the return of student loan payments and slowing wage growth.

While that’s not great news for Americans, it could help bring down inflation.

“When you look ahead, and you look at the broader picture, we’re still in an environment in which labor market conditions are going to be softening and continuing to loosen, we are also expecting to see more disinflation from reduced housing rents and just lower economic activity,” Lydia Boussour, EY’s senior economist, told CNN in an interview. “So we do think that this disinflation trend remains in place and will continue as we head into 2024.”

There may be some bumpiness on that path lower, Zandi said.

“But we’re on a line, and I think we’re going to get back to the target and something all Americans feel comfortable with by this time next year,” he said.

Dead Sea, Israel
CNN
 — 

People from Be’eri sometimes used to say the reason the Israeli kibbutz was so close to the Gaza Strip was because otherwise, it would be too perfect.

“It was a joke, something we used to say because Be’eri is so beautiful. It’s the place where you want your kids to grow up. The sunset is beautiful, the fields are green, it has everything you want from a vacation spot,” Lotan Pinyan told CNN on Wednesday.

Be’eri’s proximity to Gaza, which is only a few kilometers away, means the liberal community has been a frequent target of Hamas rockets fired from the enclave – usually intercepted by Israeli defenses. The rockets were the one downside of the otherwise idyllic spot, Pinyan and his friends would say. “It’s not a joke now,” he said.

Early on Saturday morning, Hamas militants stormed Be’eri and left behind a devastation of unimaginable scale.

They murdered more than 120 of its residents, including children, and kidnapped others. They set people’s homes on fire, then killed them when they tried to escape the heat and smoke. They looted, stole and destroyed what they could.

It all started with the sirens.

The community of about 1,100 people was woken up at 6:30 a.m., when the alarm indicating an imminent rocket attack went off.

“But it was not normal. We are used to the bombing, we know what is sounds like: ‘tat – tat – tat.’ But this was different. It didn’t stop. Tat – tat – tat – tat – tat – tat – tat,” Michal Pinyan, Lotan’s wife, told CNN. “And then some 45 minutes later, we started getting messages that there are terrorists in the kibbutz,” Lotan added.

The family’s WhatsApp group was flooded with anxious messages between Michal’s parents, Amir and Mati Weiss, and her three brothers.

9:25 a.m. Mati: gunshots in the balcony

9:26 a.m. Ran: also here there are gunshots outside the shelter window

9:30 a.m. Mati: I hear voices in Arabic outside the house

9:31 a.m. Dalit: do you also hear the security forces?

9:43 a.m. Amir: dad is injured they are in the house

9:43 a.m. Ran: what do you mean?

9:44 a.m. Dalit: they came inside?

9:44 a.m. Lotan: what? talk to us

9:47 a.m. Ran: limor spoke to racheli, sending you something

9:49 a.m. Michal: mom keep writing all the time

9:52 a.m. Eddie: When????

9:57 a.m. Limor: When, what’s happening with you?

10:01 a.m. Michal: mom

10:01 a.m. Michal: Answer

10:03 a.m. Mati: save us

10:04 a.m. Mati: Save us

10:00 a.m. Michal: are you in the shelter?

10:04 a.m. Mati: dad was shot and they are throwing grenades

10:04 a.m. Mati: They blew up the safe room

10:04 a.m. Michal: inside the house?

10:04 a.m. Mati: yes

That message was the last one that came from Mati, Michal’s mother. After that, silence.

“We knew they were probably dead. But there was still a small hope that maybe they weren’t, that they were kidnapped,” Lotan said.

Across the kibbutz, Tom Hand was getting the same terrifying messages about terrorists breaking into his neighbors’ houses. All he could think about was his eight-year-old daughter Emily – one of the tallest in her class, with honey blond hair and pale skin that tanned in the sun, a talented dancer and singer, a fun, bright girl, he said.

Hand came to Be’eri 30 years ago as a volunteer, planning to stay a few months, and never left. After his wife, Emily’s mother, died of cancer a few years ago, he and Emily have lived here on their own.

The community is close-knit; residents told CNN they eat meals together and share everything, including their salaries, which go into a communal treasury and are redistributed equally among all the families.

Politically, the kibbutz leans left. Many sees Gazans as their neighbors, Michal told CNN.

“There were people from Gaza who worked in the kibbutz and they were a part of the community, they’d bring their children to the kindergarten in the kibbutz. When they couldn’t come to work there anymore, we began collecting money from the community and there is now a fund that keeps them alive,” she said, adding that she is determined to keep sending the money to the family.

On Friday night, Emily went to her friend’s home for a sleepover. “They were having a girly night,” Hand said.

When the sirens went off at 6:30 on Saturday, Hand was not particularly worried; the alarms are not uncommon in the kibbutz. Emily was sleeping over at a friend’s house, and he was sure both children would be safe.

“Until I heard the shots. And it was already too late. If I had known … I could have maybe ran, got her, got her friend, got the mother, brought them back to my place. But by the time I realized what was happening, it was already too late,” he said.

He was not able to get in touch with them, and he was not able to go out because the kibbutz was by then overrun by swarms of heavily armed militants.

“I had to think of Emily. She already lost her mother, I couldn’t risk her losing her father too,” he said.

Meanwhile, the Pinyans, in shock from what they understood to be happening in their parents’ house, were bracing for the possibility that their home could be the terrorists’ next target.

They were inside their safe room, but faced a problem. Its door is not lockable from the inside. While all Israeli homes built after 1993 must have a shelter, these safe rooms are designed to withstand a blast, not an armed incursion.

“We knew we had to keep the door closed, so we took anything we found in the safe room and wrapped it to the handle … we tied it to the window and then put a chair inside it and kept it tight with a baseball bat,” Lotan said.

He spent the next many hours sitting by the door, wrenching the bat against it, waiting for the military to come and rescue them.

The kibbutz has its own volunteer emergency squad, about 15 people who are supposed to protect the community from danger until the army comes. With an army base just a few minutes away, everyone thought that the Israel Defense Forces would come any moment. But that did not happen.

“We were waiting for about 20 hours, with no food, no water, no toilet,” Lotan said. “And the children, they never asked for anything. Not once,” Michal added.

The IDF told CNN that it took them days of intense battle to gain control of the kibbutz. To rescue the Pinyans, 15 soldiers stormed the house, formed a tight circle around the family and walked them to a safe place – while battle still raged in the kibbutz, the family said.

As they left, Lotan said, he covered the kids’ eyes so that they wouldn’t see the dead bodies.

“We saw them, all of them, soldiers, kibbutz members and terrorists. It was like someone sprinkled sesame on a bunny, spread all over the kibbutz, everywhere we went, there were bodies,” Lotan said.

Many of those eventually rescued from Be’eri by the military were evacuated to a hotel on the shores of the Dead Sea. Among them was Tom Hand, who spent the next few days waiting to hear anything about Emily.

Then, the news came.

“Two people from the kibbutz, a team of doctors, psychiatrists, social workers … and they tell you. Softly, but quickly, because they have a lot people to get through,” he said, adding he felt relieved.

Of all the horrible possibilities, death seemed the least painful.

“She was dead. I knew she wasn’t alone, she wasn’t in Gaza, she wasn’t in a dark room filled with Christ knows how many people, pushed around … terrified every minute of every day, possibly for years to come. So death was a blessing,” he told CNN, his voice broken, tears streaming down his tired, ashen face.

“In this crazy world, here is me hoping my daughter is dead,” he said.

Many of the people rescued from Be’eri are staying in the same hotel as Hand, which means he is surrounded by love – but also constant reminders of Emily. Many of her friends who survived the massacre are at the hotel.

“Emily’s friends know that she’s not here with me. So they ask me what happened to her … they look up at me and I say I don’t know yet,” he said. “But then they see their parents hugging me, crying … kids are not stupid, even at that age, so just by seeing that I’m sure they realize.”

The community is holding onto itself, trying to keep going, Michal Pinyan said. Every few minutes, someone comes by to give her a hug, have a chat, share a memory of her parents.

She told CNN that she knows her parents have died, because their bodies were identified by people who knew them personally. However, she has been asked to provide a DNA sample for official identification, which may take some time.

She has no idea what will happen next. “Nobody talks about funerals. We don’t have a place to go to. The kibbutz is a closed army space now,” she said.

Still, she believes Be’eri will be rebuilt in some form. “We will need lots and lots and lots of strength, physical and emotional, to go back. But we will go back it’s not a question,” she said.

When their children question going back to a place where such horrors happened, the Pinyans say they must.

“We explained to them that we don’t leave the ship sinking. We need to go and repair the place, repair the community. And after that, we can decide, as a family, what we will do next,” Lotan said.