Federal investigators sought probe into Hillary Clinton email

Welcome to your Trail Guide, a daily run along the campaign trail led by the Los Angeles Times political team. It's Friday, July 24, and this is what we're watching:

O'Malley gets early backing from a California lawmaker

A California congressman has become the first Washington lawmaker to endorse former Maryland Gov. Martin O'Malley in the Democratic race for president, calling him the best choice for the millennial generation.

Second-term Rep. Eric Swalwell (D-Dublin), a native Iowan, will campaign for O'Malley in that key nominating state this weekend. In a Des Moines Register op-ed, the 34-year-old Swalwell wrote that O'Malley helped inspire his decision to enter public service.

“In 2012, I ran for Congress to bring new energy and ideas to Washington, D.C., and fight for millennial issues. But my efforts alone cannot pave the pathways to opportunity millennials need,” he writes. “Our generation needs Martin O'Malley in the White House.”

Swalwell's endorsement is not a total surprise. Last year, we reported that he had taken on a leadership role in O'Malley's political action committee as chairman of the Young Professional Leadership Council. At the time, he praised O'Malley, who is well behind Democratic front-runner Hillary Rodham Clinton in early polls, for helping raise money for Democrats in the House and said his “results-oriented, data-driven approach” to governing would appeal to younger voters.

On Wall Street, Clinton sees a 'system out of balance'

Hillary Rodham Clinton on Friday unveiled her proposal to address short-term profit-hunting on Wall Street. The Times' Mike Memoli has this report on Clinton's first major speech on corporate tax policy:

"The centerpiece of the plan ... was a revision to the capital gains tax that would implement a sliding scale, taxing gains from stock sales within two years at the same rate as incomes for those earning more than $465,000 a year, but returning to the current rate of 20% after six years."

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The ruling by the all-Republican, three-judge panel underlines the fact that the charges filed against Perry are not the result of a partisan witch hunt. Republican judges exclusively have moved this case forward.
Craig McDonald, director of Texans for Public Justice. The government watchdog group filed an ethics complaint that led to the indictment of former Texas Gov. Rick Perry for alleged abuse of office. A judicial panel in Austin on Friday threw out one of the charges but allowed a second to proceed to trial.

Cruz says he won't speak ill of Republicans, bashes McConnell

Sen. Ted Cruz savaged Majority Leader Mitch McConnell, a fellow Republican, on the Senate floor Friday in a surprising screed about honesty, trust, loyalty and the export credit agency known as the Ex-Im Bank.

Cruz's speech dived deeply into Senate deal-making gone sideways, and Cruz, who is seeking the Republican nomination for president, made it clear he feels burned by his colleague and party leader.

He accused McConnell of lying to him, of bowing to the "Washington cartel of the lobbyists on K street" and of being no more trustworthy than the man who preceded McConnell, Sen. Harry Reid of Nevada, a Democrat.

"It saddens me to say this. ... I cannot believe he would tell a flat-out lie, and I voted based on those assurances that he made to each and every one of us," Cruz said.

"What we just saw today was an absolute demonstration that not only what he told every Republican senator, but what he told the press over and over and over again, was a simple lie."

Calling another senator a liar on the Senate floor is a remarkable breach of decorum in an institution that likes its dusty traditions. But it's even more remarkable given what Cruz had to say less than a week ago about speaking ill of his fellow Republicans.

When asked Saturday whether he would condemn Republican presidential candidate Donald Trump for comments casting Mexican immigrants as "rapists" and saying Sen. John McCain was "not a war hero," Cruz demurred and declared he'd take the high road.

"Folks in the press love to see Republican-on-Republican violence, and so you want me to say something bad about Donald Trump, or bad about John McCain or bad about anyone else," he said. "I'm not going to do it."

Cruz's decision to blast McConnell and take a pass on Trump fits with his political positioning in the Senate and in the race for the nomination. The Texas conservative is aiming to make a name for himself as the rabble-rousing outsider in the race. But it's hard for Cruz to one-up Trump in the rabble-rousing outsider category. So he has essentially decided to join him, rather than try to beat him. In the Senate, Cruz has less competition. On Friday, he had the floor.

"There is a profound disappointment among the American people because we keep winning elections and then we keep getting leaders who don't do anything they promised," Cruz said.

Clinton responds to reports of possible email investigation

Before delivering a speech about corporate culture on Wall Street, Hillary Rodham Clinton on Friday addressed reports that the Justice Department had been asked to investigate whether classified material passed through her private email account during her time as secretary of State.

Clinton suggested the news reports were inaccurate and that "maybe the heat is getting to everybody."

"We all have a responsibly to get this right. I have released 55,000 pages of emails. I have said repeatedly that I will answer questions before the House committee," she said.

"We are all accountable to the American people to get the facts right. And I will do my part. But I'm also going to remain focused on the big issues. Particularly the big issues that really matter to American families.”

Draft Biden campaign ramps up

Vice President Joe Biden may still be weeks away from deciding whether to join the 2016 presidential race, but a group seeking to nudge him off the fence is ramping up its push.

Draft Biden 2016 is holding a "National Day of Action" on Saturday with 20 events across the country, a potential sign of whether there is appetite for more candidates -- and this candidate specifically -- in the Democratic field. The group's executive director will be speaking in New York, while other events are planned in early nominating states like New Hampshire and South Carolina, and five in California alone.

On Friday, the group also launched its first video on YouTube -- icalled "Ridin' with Biden" -- seeking to gin up support for the idea. It's hardly the most polished video, but it features unnamed advocates touting his credentials on LGBT rights and his work to stop domestic violence.

The Chicago-based group says it has gathered 150,000 signatures for its petition to encourage Biden to enter the race.

Biden has said little publicly about the possibility of making a third presidential run since the death of his eldest son, Beau, in late May. A final decision could come in September.

When it comes to the state fair, I'm looking forward to that. But I have one rule, which I won't violate: No food on a stick. I mean, I'll eat the fried Oreos, but no food on a stick.”
Republican presidential candidate Carly Fiorina speaking Friday to the Rotary Club of Des Moines

Court dismisses one of two criminal counts in case against Rick Perry

Former Texas Gov. Rick Perry won a partial legal victory Friday when a judicial panel dismissed one of two criminal counts accusing the Republican presidential hopeful of abusing his power while in office.

The Texas 3rd Court of Appeals, seated in Austin, said Perry's 2014 indictment for coercion of a public official violated his free speech rights. The court ruled that a second charge, alleging misuse of the governor's office, could proceed to trial.

The case revolves around Travis County Dist. Atty. Rosemary Lehmberg and stems from her April 2013 arrest on drunken driving charges.

Lehmberg pleaded guilty to a misdemeanor, paid a $4,000 fine and served about half of a 45-day jail sentence. She said she would not seek reelection in 2016. But she refused Perry's demand that she immediately resign; he, in turn, followed through on a veto threat and slashed $7.5 million in funding for the state's public integrity unit, which is housed in the Travis County district attorney's office.

The office has a history of tense relations with Republicans who run the state -- Lehmberg is a Democrat -- and a number of politically sensitive investigations were eventually dropped for lack of funding.

A government watchdog group, Texans for Public Justice, filed a complaint, and an independent prosecutor was appointed to investigate. Perry was indicted in August on charges of abuse of official power and coercion of a public servant.

The former governor has failed in repeated attempts to have the case dismissed.

An attorney for Perry said Friday's decision was “a clear step towards victory for the rule of law.”

“The remaining charge is hanging by a thread,” said Tony Buzbee, Perry's lead counsel, “and we are comfortable that once it is put before the court, it will be dismissed on its face.”

The ruling Friday could be appealed to Texas' highest court, the Court of Criminal Appeals.

Clinton and allies say emails were made classified retroactively

The Times' Evan Halper and Paul Richter tell of a possible Justice Department investigation into how classified information was handled in Hillary Clinton's private email account during her time at the State Department.

The Justice Department has been asked to open an investigation into whether classified information may have been mishandled, U.S. officials told Halper and Richter.

The Clinton campaign is arguing that any classified information disclosed as part of a trove of Clinton emails was made secret retroactively, and thus Clinton violated no laws.

Rep. Elijah Cummings, ranking Democrat on the Benghazi Select Committee, issued a statement Friday morning, apparently backing up the Clinton camp's claims.

"I spoke personally to the State Department Inspector General on Thursday, and he said he never asked the Justice Department to launch a criminal investigation of Secretary Clinton's email usage," Cummings said. "The Benghazi Select Committee has obtained zero evidence that any emails to or from Secretary Clinton were marked as classified at the time they were transmitted."

Later Friday, the Justice Department issued a statement saying the referral could not be characterized as criminal. The statement left several questions unanswered.

UPDATE 10:55 a.m.: This post was updated to include the Justice Department statement.

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Warren weighs in ahead of Clinton Wall Street speech

On the eve of Hillary Rodham Clinton's first major speech on Wall Street, progressive favorite Sen. Elizabeth Warren offered a not-so-subtle hint about what she'd like to hear.

San Francisco slaying scrambles immigration politics

A photo of Kathryn Steinle is displayed at a Senate Judiciary Committee hearing in Washington. Steinle was shot and killed on San Francisco's Pier 14 on July 1. The immigrant felon charged in her death had been deported five times to his native Mexico.

A photo of Kathryn Steinle is displayed at a Senate Judiciary Committee hearing in Washington. Steinle was shot and killed on San Francisco’s Pier 14 on July 1. The immigrant felon charged in her death had been deported five times to his native Mexico.

(Michael Reynolds / European Pressphoto Agency)

The Times' Seema Mehta took a close look at how Kathryn Steinle's killing, allegedly by an immigrant in the U.S. illegally, has scrambled immigration politics on the campaign trail.

The tragedy is "throwing immigration reform advocates on the defensive, fueling the anger of hard-liners and causing even supporters of San Francisco's liberal politics to pause and consider its status as a 'sanctuary city,'" Mehta wrote, quoting GOP consultant Rob Stutzman. "It's a powder keg."

On the Hill, the House passed legislation Thursday cutting off funding for cities that won't comply with federal immigration laws. The "sanctuary city" bill was approved over opposition from Democrats, who labeled it the "Donald Trump Act," after the man who first seized on the case as a flashpoint, noted The Times' Mary Ann Toman-Miller.

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Jeb Bush: Saying 'all lives matter' should not lead to an apology

(Kurtis Lee)

Questions about the Black Lives Matter movement again made their way into the presidential campaign Thursday, with Jeb Bush saying former Maryland Gov. Martin O'Malley should not have apologized for saying, “All lives matter.”

“We're so uptight and so politically correct now that you apologize for saying lives matter?” said Bush, a former Florida governor, who is polling near the top of the crowded Republican presidential field. “Life is precious. It's a gift from God. I frankly think it's one of the most important values we have. I know in the political context it's a slogan, I guess.”

At a meeting of the progressive organization Netroots Nation last weekend in Arizona, O'Malley, who is seeking the Democratic nomination, was interrupted by protesters. Some chanted, “Black Lives Matter,” and protest leaders took the stage for about 20 minutes. When O'Malley got the floor, he said, “Black lives matter. White lives matter. All lives matter.” That triggered boos, with some protesters viewing his comments as racially insensitive.

O'Malley offered an apology hours later.

While speaking Thursday in New Hampshire, Bush added that “if he [O'Malley] believes that white lives matter, which I hope he does, then he shouldn't apologize to a group that seem to disagree with it.”

Video of Bush's comments was circulated by the Democratic group American Bridge.

In South Carolina earlier in the day another Democrat, Hillary Rodham Clinton, proclaimed it's "essential that we all stand up and say loudly and clearly, yes, black lives matter."

“This is not just a slogan. This should be a guiding principle,” she said while talking to local elected officials.

GOP candidates use hearing to test drive arguments against Iran deal

The first congressional hearing on the Obama administration's nuclear deal with Iran became a platform for Republican candidates to try out their best arguments against the deal. In his reporting on Thursday's hearing, The Times' Paul Richter captures this volley between Sen. Marco Rubio of Florida and Secretary of State John F. Kerry:

"The next president is under no legal or moral obligation to live up to it," Rubio said, adding that the agreement "could go away on the day President Obama leaves office."

Kerry responded that if the U.S. repudiated the deal now or under a new president, it would mean the end of diplomacy with Iran.

"If you think the ayatollah is going to come back to negotiate again with an American" if the U.S. renounced the current deal, "that's fantasy," Kerry said.

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