Overnight Regulation: Dems go on attack during EPA chief's hearing | Mnuchin promises more Russia sanctions | Regulators subpoena major bitcoin exchange | New lawsuit over FDA e-cig rule

View in your browser     Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It's Tuesday evening, where we're waiting for President Trump's State of the Union to begin. What to expect: Trump says he will deliver a message of unity, according to The Hill's White House reporter, Jordan Fabian. Click here our live blog of the speech.   THE BIG STORY: The EPA administrator testified before Congress, and Democrats quickly went into attack mode. Democratic senators wasted no time Tuesday hounding Scott Pruitt, the head of the Environmental Protection Agency (EPA), over his regulatory rollbacks and questioning what they see as potentially ulterior motives at the agency. Amid relentless questioning during the Senate Environment and Public Works Committee hearing, Democrats used all tools at their disposal, including audio, in an effort to challenge Pruitt on most of his policy decisions and promises since becoming administrator almost a year ago. Sen. Tom Carper, (D-Del.), the ranking member, set the tone early on by thanking Pruitt for making his first appearance at the committee, before critiquing him for taking so long to do so. "I'd note for the record that your immediate predecessor, Gina McCarthy, appeared before this committee six times in two years, while her predecessor, Lisa Jackson, appeared before us 14 times in six years. You can do better on this front and it's important that you do," Carper said. The questioning from the other side of the aisle was a stark contrast. Sen. James Inhofe (R-Okla.) greeted Pruitt by first saying: "I get the impression they don't like you." Inhofe then commended Pruitt's EPA for the economic benefits the agency created from cutting regulations. Miranda Green reports.   Carper used his opening statement to blast Pruitt. He criticized Pruitt for rolling back regulations, overlooking public health risks and critiquing former President Barack Obama's policies. Tuesday's hearing was Pruitt's second appearance before a congressional oversight panel and his first in front of the Senate committee since taking over at the EPA.   At the hearing, Pruitt also said... he supports a unified national vehicle fuel standard, stoking state fears that the agency may do away with waivers allowing states to implement stronger standards. Some states, including California and Massachusetts, currently set higher fuel emission standards than the federal standard, as allowed under a waiver program determined by former President Obama. But Pruitt said those states should not be able to dictate federal rules.   During the hearing, Sen. Tammy Duckworth (D-Ill.) had a question... "Can I assume that like all these other Americans, you did not find Morocco, a North African nation, to be a shithole when you visited?" Duckworth asked Pruitt. Duckworth was immediately cut off by committee Chairman John Barrasso (R-Wyo.) because her time for questioning Pruitt had expired. Duckworth criticized Pruitt for taking a trip to Morocco, saying it is not the responsibility of the EPA administrator to promote natural gas exports.   And Pruitt made news on the agency's decision to cut off federal funding to a newspaper that covers environmental issues related to the Chesapeake Bay, saying they are reconsidering the decision. Pruitt told senators Tuesday that he learned about the decision to end the Bay Journal's ongoing grant and disagreed with the way that it was done. "I think that was a decision that -- I learned of that decision after the fact and I think it was probably a decision that should not have been made in the way that it was. So it's under reconsideration already," Pruitt told Maryland Sen. Ben Cardin (D) during the hearing.   REG ROUNDUP Finance: Treasury Secretary Steven Mnuchin said Tuesday the Trump administration will impose financial sanctions on dozens of wealthy Russians despite the president declining a congressional deadline to do so. Mnuchin took heat from Republicans and Democrats on the Senate Banking Committee over the administration's decision to not impose sanctions by a Monday deadline. "This should in no way be interpreted as we're not putting sanctions on anyone in that report," Mnuchin said at a hearing. He added that the report issued Monday on suspected financiers of Russian government political efforts is not a substitute for financial restrictions Congress mandated in a bill passed last year. Sylvan Lane reports.   Tech: U.S. regulators are probing one of the world's largest cryptocurrency trading platforms with ties to a controversial digital currency. The U.S. Commodity Futures Trading Commission (CFTC) sent subpoena letters last month to Bitfinex, a cryptocurrency exchange, and Tether, a company that offers digital currency that it says is tied to the value of the U.S. dollar, Bloomberg reported Tuesday. Tether has long been a target of skepticism in the cryptocurrency community, with critics speculating that Tether doesn't actually hold enough dollar reserves to back up the claim that the cryptocurrency's value is tied to the dollar. Cryptocurrency markets sunk significantly on Tuesday in reaction to the news. Read the rest from Ali Breland here.   More tech: The employee who sent a false emergency alert of an incoming missile on Hawaii earlier this month did not realize it was a drill and thought the attack was real, Federal Communications Commission (FCC) investigators announced on Tuesday. The Jan. 13 cellphone message sent to residents on the island led to a state-wide panic, with many people believing they had moments to spare before a ballistic missile hit Hawaii. The message told them to "SHELTER IN PLACE" and that "THIS IS NOT A DRILL." The alert was not corrected for nearly 40 minutes. FCC investigators on Tuesday blamed the mistake on a miscommunication between the employee who issued it and supervisors who were announcing a drill.   More from Harper Neidig.   The head of Hawaii's Emergency Management Agency has also resigned and the employee responsible for the alert was fired on Friday. More on that here.   Health: The Food and Drug Administration (FDA) is facing a new wave of legal challenges over its rules for electronic cigarettes. The Pacific Legal Foundation filed lawsuits on behalf of vaping businesses in district courts in the District of Columbia, Minnesota and Texas on Tuesday. In the lawsuits, the foundation argues the FDA's so-called deeming rule, which brings e-cigarettes under the same regulatory scheme as traditional cigarettes, violates the First Amendment by allowing the agency to treat many nontobacco vaping products as if they were tobacco products regulated by the Tobacco Control Act. "Thanks to the Deeming Rule, anyone who manufactures or sells a vaping product must obtain FDA's preapproval before engaging in truthful speech concerning that product's health and related effects," attorneys for the legal group argue in court documents. Lydia Wheeler has the story.   Technology: The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are investigating tech giant Apple over its admission that it released an update designed to slow down older iPhones to improve performance, Bloomberg News reported on Tuesday. The investigation reportedly centers around whether the company violated securities laws concerning disclosures on the software update to consumers and investors. A request for comment from Apple was not immediately answered. Apple apologized in late December for the update, which slows older iPhones to compensate for decaying batteries, and announced that it would slash the fee for replacing a phone's battery. John Bowden reports.   Opioids: The Drug Enforcement Agency (DEA) plans to target the nation's pharmacies and prescribers in a nationwide crackdown against opioid abuse, Attorney General Jeff Sessions announced Tuesday. Sessions told agents in Louisville, Ky., that over the next six weeks the DEA will begin a nationwide investigation of pharmacies and drug prescribers that are issuing "unusual or disproportionate" numbers of opioid prescriptions. "DEA collects some 80 million transaction reports every year from manufacturers and distributors of prescription drugs. These reports contain information like distribution figures and inventory. DEA will aggregate these numbers to find patterns, trends, statistical outliers--and put them into targeting packages," Sessions said, according to a transcript of the speech. Read more from John Bowden here.   Tech (again): The Federal Communications Commission (FCC) on Tuesday voted to require wireless providers to deliver more geographically precise emergency alerts after a string of natural disasters. Wireless services will now be required to deliver alerts to an entire geographic area designated by government officials that overlaps with their coverage networks. They will also be restricted from sending alerts more than 0.1 miles outside that area. Officials say delivering more precise alerts will make them more effective because cell phone users will likely only see warnings that apply to them and take them more seriously. Supporters of the change say it will also encourage local authorities to use the alert system. Harper reports again.   Transportation: Airline executives and labor unions on Tuesday praised at agreement between the Trump administration and Qatar aimed at settling a fight over airline subsidies. Delta CEO Ed Bastian called the agreement "a strong first step in a process for commercial transparency and accountability" while saying the airline will continuing working with the Trump administration "to address the harmful trade violations by the United Arab Emirates." The CEOs of both American Airlines and United also applauded the agreement, arguing it will protect both U.S. workers and jobs. The State Department announced Tuesday that it had reached an agreement with Qatar to address an ongoing dispute about airline subsidies. Under the arrangement, Qatar will publicly disclose its financial transactions and participate in an external audit in an effort to promote transparency. The U.S. aviation industry has argued for years that Qatar's subsidies to state-owned Qatar Airways undercuts the international Open Skies Agreement and creates unfair competition. Mallory Shelbourne has more here.   Environment: A coalition of conservation groups sued the Trump administration Tuesday, saying its protection plan for Mexican wolves is inadequate. The greens say the Interior Department's Fish and Wildlife Service (FWS) violated the Endangered Species Act and ignored sound scientific findings in its November plan to increase Mexican wolf populations in the Southwest. "Mexican wolves urgently need more room to roam, protection from killing, and more releases of wolves into the wild to improve genetic diversity, but the Mexican wolf recovery plan provides none of these things," Elizabeth Forsyth, an Earthjustice attorney representing the group, said in a statement. "The wolves will face an ongoing threat to their survival unless major changes are made." Timothy Cama has the story.   IN OTHER NEWS Wells Fargo names new regulatory executive -- The Wall Street Journal New cryptocurrency rules just came into effect in South Korea -- CNBC A major US court case will decide whether bitcoin can be regulated like stocks and bonds -- Money European banks to pay $46.6M to settle US 'spoofing' charges -- Reuters FDA asks drugmakers to limit amount of opioid drug in packaging -- Reuters   FROM THE HILL'S OPINION PAGE Scott Pruitt's words don't match his actions on dangers of methane pollution Send tips and thoughts to your Tuesday regs host at rroubein@thehill.com and follow me on Twitter at @rachel_roubein.         Did a friend forward you this email? Sign up for Regulation Newsletters     Forward Regulation Newsletters       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.