Epstein Charges Cast Shadow Over Trump’s Team

(Bloomberg) --

The fallout from fund manager Jeffrey Epstein’s indictment on sex trafficking charges is entangling a member of Donald Trump’s cabinet and raising questions about the U.S. president’s ties to a man who used his mysteriously garnered wealth to wine and dine celebrities and politicians.

The allegations — which include sex acts with girls as young as 14 — have cast a fresh spotlight on Labor Secretary Alex Acosta’s role as the federal prosecutor who brokered a plea deal a decade ago for the financier that yielded a minimal sentence. And as Bloomberg’s reporters in Washington explain, Acosta’s standing in the Trump administration was already in peril.

Epstein, famous for ferrying prominent figures including Trump and Bill Clinton to his Florida compound on a private jet nicknamed “the Lolita Express” by tabloids, was taken into custody Saturday after years of accusations of child molestation and the 2008 conviction for prostitution involving a minor. Epstein denies the charges. Clinton said he “knows nothing” about the alleged crimes.

With the #MeToo movement ensnaring powerful men from Hollywood and Silicon Valley to Washington and Wall Street, any connection to Epstein would in theory be a major liability for almost any politician as the 2020 campaign heats up.

But Trump has weathered similar storms before, a sign his base’s support isn’t necessarily eroded by allegations of sexual impropriety. And there’s not a lot of reason to think — yet — this time will be different.

Global Headlines

Kill bill | Hong Kong leader Carrie Lam said extradition legislation that sparked mass marches was “dead,” but protest leaders rejected the announcement and said they’d continue demonstrating until it’s formally withdrawn. The movement has escalated to include demands for electoral reform, setting the stage for a standoff between the protesters and Beijing-backed Lam.

Short honeymoon | Euro-area officials greeted Greece’s new government with a warning that it needs to stick to its post-bailout budget commitments, setting up a potential clash with Prime Minister Kyriakos Mitsotakis, who said one of his priorities is to reduce the targets calling for big surpluses through 2022. Any plans to loosen fiscal policy could throw Greece’s debt sustainability projections off course, raising new doubts about its finances.

Regular Joe? | Democratic presidential front-runner Joe Biden has long told voters he was just an average guy who shared their struggles. But the expected release of his most recent financial disclosures today could paint a very different picture of “Middle Class Joe.” The filings will give some details of how much the former vice president has earned since leaving office after four decades of public service.

Doubling down | The Indian billionaire behind the controversial Carmichael coal mine in Australia has hit back at criticism that the endeavor will be unprofitable and too dirty. Amid dire warnings from scientists about the need to cut carbon emissions, Gautam Adani told Bloomberg the project is viable. He’s found a friendly host country in Australia, where the resource industry just helped re-elect a pro-coal federal government.

Jilting Johnson | With Brexiteer Boris Johnson on the verge of becoming U.K. prime minister, Conservative lawmakers are seeking ways to prevent him from suspending Parliament to force through a no-deal split from the European Union. They’re pushing for a vote today on legislation requiring Parliament to be in session over the Oct. 31 Brexit deadline. Meanwhile, the opposition Labour Party inched closer to formally opposing Brexit, as the trade unions that help fund it agreed to back a second referendum.

What to Watch

• The next head of the International Monetary Fund should be a European, the finance ministers of France and Spain said yesterday, as governments started talks on Christine Lagarde’s successor.
• The U.S. State Department has approved the possible sale of tanks, Stinger missiles and other armaments to Taiwan, a decision certain to irritate China, which regards Taiwan as part of its territory.
• Congress has been acting like it has months to raise the U.S. debt limit, but lower tax-revenue projections mean lawmakers could face a tighter deadline: early September.

And finally... A technology-focused meeting that Trump has called for Thursday at the White House is missing two seemingly key invitees: Facebook and Twitter. The White House has said the session will “bring together digital leaders for a robust conversation on the opportunities and challenges of today’s online environment.” Conservative tech critics have already confirmed their attendance at the event, which is shaping up to be a “social media summit” without social media.

--With assistance from Stuart Biggs, Karen Leigh, Michael Winfrey and Anthony Halpin.

To contact the editor responsible for this story: Ruth Pollard at rpollard2@bloomberg.net

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