Principals

The fallout from Southwest’s holiday travel debacle continues — this time, complete with receipts. Bloomberg, citing internal company memos, detailed on Wednesday how the logistical meltdown that led to thousands of canceled flights began on Dec. 21, when an executive issued a “state of operational emergency” in Denver due to an employee shortage. From there, the crisis quickly worsened thanks to factors like fog in San Diego and too many planes parking in Dallas. The airline’s apparently antiquated systems (which pilot and flight attendant unions spent years warning about) became so “overmatched,” as its chief operating officer put it, that crew scheduling was being done manually.

The crisis continues to affect travelers: At least 62% of Southwest flights were canceled Wednesday and 58% have already been dropped for Thursday. It’s also attracting more attention in Washington: Transportation Secretary Pete Buttigieg said Wednesday morning that Southwest’s issues have moved beyond being “weather-driven,” and the president of a union representing Southwest ground workers spoke to members of Congress, ABC7 News reported. Senate Democrats are already promising hearings and calling on the airline to compensate customers for their dashed holiday plans.

Travelers from China will soon have to present proof of a negative COVID test before flying to the U.S.. The Biden administration announced the new initiative, which will take effect Jan. 5, on Wednesday amid a surge of cases in the People’s Republic following the government’s decision to relax its zero-COVID policies (exact infection numbers are hard to pinpoint).

Rep. Jamie Raskin (D-MD) has been diagnosed with Diffuse Large B Cell Lymphoma, he announced in a press release Wednesday afternoon. Raskin noted that this form of cancer is “serious but curable” and quipped that he’s “holding out hope for the kind [of chemotherapy] that causes hair gain and weight loss.” Raskin added that he was diagnosed early, and plans to continue working as he undergoes treatment.

The Republican senator on a crusade against crypto

THE FACTS

Sen. Roger Marshall, R-Kan., isn’t graded yet on the cryptocurrency industry’s big scorecard. But at this point, he’d be happy to flunk it.

“Even when you talk to the crypto people, people who support it readily admit that more than half of the cryptocurrencies out there are bad actors that take advantage of people,” Marshall told Semafor in a recent interview.

“The deeper I dive into this rabbit hole, the more concerns I have,” he added.

THE VIEW FROM ROGER MARSHALL

Comments like those have set Marshall apart from the rest of his party when it comes to the issue of crypto. While several Democrats have taken to openly savaging the industry in the wake of its recent scandals, the deeply conservative Kansan is the first GOP senator to have openly joined the ranks of crypto skeptics.

In what’s perhaps the unlikeliest duo on crypto legislation so far, Marshall and Sen. Elizabeth Warren, D-Mass. rolled out a bill on Dec. 16 designed to crack down on digital assets that are used for money laundering. It would also require crypto exchanges to verify client information in a similar manner as banks, and impose other rules the financial industry already plays by.

Marshall told Semafor that Warren called shortly after he assailed crypto as a national security threat and unexpectedly said the government should impose a moratorium on all trading during a Senate Agriculture hearing on Dec 2. Warren pitched her plan afterward, and they drafted the legislation together. Thus was born the chamber’s latest legislative odd-couple.

His views have been shaped in part by conversations with national security officials at U.S. embassies during overseas trips with Congressional delegations. Marshall said they’re increasingly sounding the alarm about the use of digital tokens to facilitate sanctions evasion by rogue nations, human trafficking, and drug trafficking.

“Every one of them brings this issue up within a matter of minutes,” he said.

As for other Republicans? Marshall thinks some of his GOP colleagues quietly share his concerns — but wouldn’t name names. “Anybody that’s spoken to any national security folks realize what a huge concern this is,” he said.

THE VIEW FROM ELIZABETH WARREN

Warren is certainly trying to bring more of them out of the woodwork. “[Marshall] may be the first, but I’m sure he’s not the last to say out loud how risky unregulated crypto is,” she told Semafor. During a recent Capitol Hill train ride, she seized an opportunity to make a 60-second elevator pitch about her work with Marshall to Sen. Tim Scott, R-SC., the incoming ranking member of the powerful Senate Banking Committee. She stressed it’s all about ensuring “everyone plays by the same rules.”

“I look forward to seeing y’all’s work,” Scott replied. He currently has a B on the industry’s scorecard.

The George Santos saga continues: Now prosecutors are involved

The scandal surrounding George Santos took its first official legal turn on Wednesday, when the district attorney of Long Island’s Nassau County announced that she was opening an investigation into newly the elected rep. “The numerous fabrications and inconsistencies associated with Congressman-elect Santos are nothing short of stunning,” District Attorney Anne Donnelly, a Republican, said in a statement to Newsday. “No one is above the law and if a crime was committed in this county, we will prosecute it.”

Separately, Rep. Ritchie Torres, D-N.Y., in a letter seen by Semafor, is asking the Federal Election Commission to investigate whether Santos lied on his candidate filings about the source of more than $700,000 that he lent to his own campaign. “The only remaining question, which the F.E.C can answer, is whether Mr. Santos, while lying, also broke the law,” Torres wrote to the agency.

Journalists are also digging into Santos’ mysterious finances. He claims to have earned millions of dollars in less than two years while running the Devolder Organization, a “capital introduction” firm he founded in 2021. Democrats have questioned whether the company was a front for illegal campaign contributions. On Wednesday, the Daily Beast managed to identify four of Santos’ clients at Devolder, and found several of them were also campaign donors with significant ties to New York state politics.

And finally: Wednesday, CNN’s KFile reported that Santos had fabricated several additional pieces of his life story. The findings:

• He said that he was forced to leave an expensive New York private school, Horace Mann, after his family fell on hard times. There are no records of him attending the school.
• He said that while working for Goldman Sachs, he attended Anthony Scaramucci’s annual SALT conference and “berated” his employer for investing in renewable energy during a panel discussion. There are no records of him working for Goldman or attending the conference.
• He claimed that his supposed Jewish ancestors who fled the Holocaust went by the name “Zabrovsky.” A professional genealogist found there was nobody by that name anywhere in his family tree.
• In separate interviews, he claimed his mother was an immigrant from Belgium and that she left Europe to “flee socialism.” She appears to have been born in Brazil.

All of this should be a lesson for aspiring members of Congress: If you’re inevitably going to become embroiled in a baroque scandal about your biography and finances, pray it doesn’t break during the holidays when there’s nothing else happening in Washington and every news national organization in America can throw half its reporters at the story.

— Kadia Goba and Jordan Weissmann

One Good Text ... with Sen. Rick Scott

Stories that are being shared less widely across left-leaning or right-leaning outlets, according to data from our partners at Ground News.

WHAT THE LEFT ISN’T READING: Children in school during the COVID-19 pandemic could lose out on $70,000 in lifetime earnings and grow into less productive and educated adults because of learning loss, according to a new study by Stanford economist Eric A. Hanushek.

WHAT THE RIGHT ISN’T READING: One of Florida Gov. Ron DeSantis’s top aides used a private email address complete with a Hannibal Lecter-themed alias to help an ex-client win a high-paying bid to fly migrants to Democratic states for Florida, according to public records.

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— Steve Clemons