Trump Says US Will Take Over the Strait of Hormuz, Charge 20% Toll

Trump in front of a flag
Reuters
By Yuval Rosenberg and Michael Rainey

Good evening. South Carolina Gov. Henry McMaster announced today that he picked Sen. Lindsey Graham's sister, Darline Graham Nordone, to serve out the remaining months of her late brother's term in the Senate after he died over the weekend. Nardone is reportedly set to be sworn in on Wednesday and would serve until early January.

Here's what else is happening on this busy Monday.

Trump Says US Will Guard the Strait of Hormuz, Charge 20% Toll

President Trump announced Monday that the United States is "reinstating" the naval blockade on Iranian ports following days of renewed attacks by both sides and continued disputes over control of the Strait of Hormuz.

In a morning interview on Fox News and a post on social media, Trump said that the United States will become the "guardian" of the strait and will seek to be "reimbursed" for that. He said that countries besides Iran will have "fair and open use" of the critical waterway, but that the U.S. would impose a 20% fee on cargo going through the strait.

"The U.S.A. will be, from this point forward, known as 'THE GUARDIAN OF THE HORMUZ STRAIT,' but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World," Trump wrote. "The process and formation will begin immediately."

Trump told Fox News that the United States is "taking over" the strait and is "going to get paid for guarding it, a lot of money."

The proposed toll would reportedly violate a long-time principle of maritime trade and runs counter to previous U.S. insistence that the strait should remain toll-free, as it had been before the war started.

The International Maritime Organization, a United Nations agency that seeks to ensure the safety of international shipping, said Monday that passage through the Strait of Hormuz should remain free of any tolls and charges.

"We have always been consistent on its stance on fees - IMO stands firmly against charging fees for passage through straits used for international navigation," the group said in a statement reported by the Associated Press. "There is no legal basis through which to introduce mandatory tolls simply to transit through a strait."

What's next: Trump reportedly notified Congress in a letter dated July 10 that the United States is again at war with Iran, a move that follows a notification he sent lawmakers in May that the war had "terminated." The letter may start a new 60-day clock before combat operations would have to be halted without congressional authorization - or it may just complicate efforts by opponents of the war to argue that the war never ended.

In any case, as the war with Iran reintensifies, Trump said Monday that he will deliver a speech to the nation at 9 p.m. EDT on Thursday - though that address will reportedly have to do with the president's oft-repeated claims that the 2020 election was rigged.

Judge Blasts Trump's 'Improper' $10 Billion Lawsuit Against IRS

A federal judge on Monday ruled that President Trump's $10 billion lawsuit against the IRS over the illegal release of his personal tax records was an improper attempt to manipulate the legal process to his own advantage.

The lawsuit was never formally litigated and instead resulted in a highly unusual agreement between Trump and the federal government that purported to create a $1.776 billion "anti-weaponization" fund dedicated to paying off Trump's allies who had been prosecuted by the federal government, though the effort to create that fund was abandoned by the White House following stiff pushback by Congress.

A separate order signed by Acting Attorney General Todd Blanche bars the IRS from investigating Trump, his family and his businesses. That so-called "settlement agreement" could be worth more than $100 million to Trump, who was embroiled in an ongoing investigation into his tax returns and facing a potentially massive fine, should the IRS have ruled against him.

In a 56-page filing, U.S. District Judge Kathleen Williams said that Trump's lawsuit against the IRS "was an attempt to use the Court to provide some legitimacy to an agreement to confer immunity to people and entities affiliated with the President and to earmark billions of dollars from American taxpayers to redress grievances not defined in the law."

No 'adverseness': The judge ruled that the lawsuit brought by Trump against an agency of the government that he controlled lacked true adversity between the parties, a fundamental requirement for legitimate jurisdiction.

Trump, who initiated the suit along with his sons and their family businesses, controlled both the Department of Justice and the IRS. As a result, "there was never adverseness between the Parties; there was never a case or controversy; and there was never a question as to who would prevail," Williams wrote. "The Lead Plaintiff and the Government are one, a fully realized unitary interest."

Williams said the plaintiffs sought billions of dollars but did not explain why they would be entitled to the specific sum. The judge noted that the $1.776 billion dedicated to the "anti-weaponization" fund had no connection to any specific harm, and instead "speaks of a 'branding' effort rather than a deliberate and thoughtful calculation of damages."

Trump's protection from the IRS: The judge said that since the pledge from the federal government to provide Trump immunity from IRS investigations hadn't been filed in court, she has no jurisdiction over it. But she did bar Trump and his family from referring to the agreement as a "settlement" in any official proceeding, likely weakening the power of the agreement considerably, if not voiding it entirely.

Trouble for Blanche? The scathing ruling against Trump's lawsuit will likely come up this week when Blanche is scheduled to appear before the Senate Judiciary Committee for a confirmation hearing on his nomination to be attorney general. Blanche, who was once the president's personal lawyer and is the sole signatory on the IRS immunity order, was nominated last month by Trump to serve as the chief law enforcement officer of the federal government.

In her ruling, Williams referred one of Trump's lawyers in the IRS suit, Alejandro Brito, to the Florida Bar for potential disciplinary action for his role in the improper lawsuit and limited the ability of another lawyer, Daniel Epstein, to practice in the Southern District of Florida. She also ordered that a copy of her ruling be sent to the New York State Bar, where Blanche is a member, and to the District of Columbia Bar, where Associate Attorney General Stanley Woodward is a member.

Graham's Death May Complicate GOP Agenda

Sen. Lindsey Graham's sudden death this weekend at age 71 has shocked official Washington and, combined with the prolonged absence of fellow Republican Sen. Mitch McConnell due to health problems, could scramble some Republican legislative priorities, adding to what was already expected to be a difficult stretch leading up to the November elections.

Graham leaves a complicated legacy, marked by a famously hawkish foreign policy, bursts of influential bipartisanship and, most notably, an opportunistic transition from close friend and ally of Sen. John McCain and fierce critic of Donald Trump to one of President Trump's staunchest supporters. His death complicates several items on the congressional agenda as the House and Senate return this week from a two-week recess, with another recess looming in August.

Let's look at several areas where Graham's absence may be felt.

Budget reconciliation bill: Graham chaired the Senate Budget Committee and was set to play a key role as Republicans sought to enact a third party-line reconciliation bill this Congress. The bill would provide a $350 billion boost in defense spending but was already seen as a long shot given the challenges Republicans face in agreeing on legislative details and offsetting spending cuts.

Speaker Mike Johnson reportedly said Monday that Republicans in his chamber will look to advance a budget framework, the first step toward a reconciliation package, through the House Budget Committee on Wednesday.

But the outlook in the Senate remains unclear. Sen. Ron Johnson of Wisconsin is in line to take over for Graham as chair of the Senate Budget Committee, and he brings a different emphasis. "The Wisconsin Republican is a vocal fiscal hawk who's demanded that Republicans make massive cuts to federal spending, especially social programs," Punchbowl News noted this morning. "Johnson told us in June that if Republicans do a third reconciliation bill, he'll be 'far more stalwart in insisting that we return to a reasonable pre-pandemic level of spending.'"

NDAA and defense supplemental funding bill: Senate Republicans are expected to bring the National Defense Authorization Act, the annual defense policy bill, to a floor vote this week. The end of the ceasefire in the Iran war has renewed the pressure on lawmakers to have their say on the conflict, and Senate Democrats are threatening to oppose the NDAA - an extraordinary move for a bill that usually sails through Congress with strong bipartisan support.

In a letter to colleagues Monday, Senate Minority Leader Chuck Schumer said that Republicans "are pushing to advance the annual NDAA while refusing to negotiate on the President's bloated, partisan topline budget request that would dump billions more into the defense industry while long-overdue investments in American communities wait."

Confirmation hearings: The Senate Judiciary Committee will be holding a confirmation hearing this week for Todd Blanche, the acting attorney general who is Trump's pick to lead the Justice Department on a permanent basis. "GOP leaders had been counting on Graham to help rally support for the nominee in committee and on the floor with a handful of fellow Republicans at risk of withholding their votes," Politico reports. (The Senate Intelligence Committee is also scheduled to hold a confirmation hearing for Jay Clayton, the president's choice to be director of national intelligence.)

Russia sanctions: Graham headed a bipartisan push to impose stiffer sanctions on Russia and countries that buy Russian oil and gas. His death may add to the momentum behind the effort, which saw Graham work with Republican Sen. Roger Wicker and Democratic Sens. Richard Blumenthal and Jeanne Shaheen.

"On Friday, Senators Graham, Blumenthal, Wicker and I announced White House support for our Russia sanctions legislation to help finally achieve peace for Ukraine, which Lindsey described as one of his most consequential efforts," Shaheen said in a statement Sunday. "There can be no more fitting memorial to Lindsey, his legacy or the causes he fought for than to pass this legislation and realize his long-held dream of an independent and secure Ukraine."

Congressman Calls for Investigation of the VFW

Rep. Mike Bost, an Illinois Republican who serves as the chairman of the House Veterans Affairs Committee, called for an investigation of the Veterans of Foreign Wars after the group released a cartoon portraying a firing squad made up of men representing "bureaucrats" and the "media" lining up to shoot soldiers dressed in combat gear.

As CNN reports, the cartoon, which appears on T-shirts sold on behalf of the group, is intended as a protest against funding cuts for veterans' benefits. The VFW, which was founded in 1899 and has roughly 1.3 million members, says it has used similar images for similar purposes for decades.

In a statement released on July 1, Bost said: "The recent inflammatory, fearmongering, and dangerous political rhetoric from the Veterans of Foreign Wars is inappropriate and must end immediately." Bost noted that the VFW is chartered by Congress, which means it has "a responsibility to promote patriotism, civic responsibility, and respectful public discourse while advocating on behalf of veterans."

Bost added that while he respects the First Amendment rights of all Americans, "suggestions that VA's dedicated workforce - or the media - or anyone else are actively shooting and punishing servicemembers and veterans is unacceptable and creates a dangerous, politically charged environment that can put lives at risk."

In a letter written with Michigan Republican Rep. Jack Bergman, Bost asked the Veterans Administration to review the VFW's accreditation and to look into how it raises money through merchandise sales.

Protesting cuts: The VFW has come out against a bill sponsored by Bost and Republican Sen. Jerry Moran, who leads the Senate Veterans' Affairs Committee, that would cut billions of dollars in funding for veterans suffering from some specific symptoms, including tinnitus and sleep apnea. The Take Care of America's Veterans bill would use the money saved by those cuts to allow veterans to receive both retirement and injury benefits without offsets.

The VFW said the T-shirts are not aimed specifically at the Bost legislation, but it will fight Bost's effort to rein in the organization nevertheless.

"The letter identifies no allegation that the VFW or any of our accredited representatives violated VA accreditation standards, acted unethically, or failed a single veteran," the VFW said in a statement. "Instead, it seeks to question our fitness because we disagreed with pending legislation. ... That should concern every veteran."

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