(NEW YORK) — At least 26 states are under alerts for snow, ice and flooding as three winter storms cross the country over the next few days.
The first storm is moving into the Ohio River Valley on Tuesday with snow coming down from Paducah, Kentucky, to Evansville, Indiana; as well as in Louisville and Lexington, Kentucky.
A winter storm warning has been issued from Louisville to Atlantic City, New Jersey, including Washington, D.C. An ice storm warning is in effect for parts of West Virginia.
This winter storm will move out of Ohio Valley and into the Mid-Atlantic states by early afternoon Tuesday, reaching D.C. between noon and 1 p.m.
Total snow accumulation will be around 3 to 5 inches in Louisville and the Ohio River Valley, about 3 to 6 inches in Washington, D.C., proper and 4 to 8 inches possible south and west of D.C.
Snow will be light further north, with only 2 to 3 inches possible in Philadelphia and possibly 1 to 2 inches in New York City. New England should miss this storm system completely.
Further south, a flood watch has been issued from Texas to Georgia as heavy rain could cause flash flooding.
Second storm
The second storm will develop over the Rockies and the Plains later Tuesday, with a heavy swath of snow spreading north into the Great Lakes.
Snow is forecast from Denver all the way to Chicago and Detroit, where winter storm watches and warnings have been issued.
The snow will spread into Kansas City, Missouri, early Wednesday morning. The steady snow will reach Chicago late Wednesday morning into the afternoon.
The storm system will reach the East Coast by Wednesday evening with a wintry mix that will turn to rain from D.C. to New York City and Boston.
Further inland, several inches of snow are possible from the Catskill Mountains in New York to the Green and White mountains in New England.
This storm will also bring heavy rain across the South, with flash flooding possible from Louisiana to western North Carolina.
Third storm
The third storm is still in the Pacific Ocean, but it will begin to bring rain to the West Coast on Wednesday morning, including in Los Angeles and San Francisco.
The core of the storm will move into California on Wednesday night into Thursday morning with very heavy rain for the San Francisco Bay area.
The heaviest rain will begin to move into Los Angeles and Southern California starting Thursday morning and will last into Thursday evening.
A flood watch has been issued for California, including Los Angeles. Flash flooding, mudslides, landslides and rockslides are expected by Thursday and Friday.
The storm will cross the Rockies on Friday and will move into the Midwest with more heavy snow by Saturday morning.
By Saturday afternoon into Sunday morning, rain and snow will reach the East Coast. This storm looks more wet than white for the Interstate 95 corridor.
Bitter Cold
Ten states from Washington to Wisconsin are under cold weather alerts Tuesday morning, including an extreme cold warning from Montana to Minnesota — where wind chills could drop as low as 55 below zero through Thursday morning.
Record cold temperatures are forecast from Washington to Montana over the next few days.
The unseasonably cold weather will spill into the Northeast by early next week, with temperatures 10 to 15 degrees below normal.
(NEW YORK) — Steve Bannon, the confidante of President Donald Trump, pleaded guilty Tuesday to defrauding New Yorkers who donated to “We Build the Wall,” an online fundraiser for Trump’s signature project during his first term, in exchange for a sentence without prison time.
“The parties have worked out a plea agreement. Mr. Bannon will plead guilty to count 5 of the indictment, which is scheme to defraud in the indictment. He will receive a conditional discharge,” prosecutor Jeffrey Levinson said.
The guilty plea to the felony charge represents Bannon’s second criminal conviction after he served prison time for contempt of Congress.
Bannon showed up to court in a brown barn jacket, his brushed-back gray hair spilling over the upturned collar. He sat at the defense table signing papers before Judge April Newbauer affirmed that Bannon now wanted to plead guilty.
“Is that what you wish to do?” Newbauer asked.
“Yes, your honor,” Bannon replied, before acknowledging he acted to defraud multiple donors.
“Do you now plead guilty to count 5, scheme to defraud?” the court clerk asked. “Yes,” Bannon responded.
The judge imposed the agreed upon sentence of a three-year conditional discharge, during which time Bannon cannot serve as a director of a charity or fundraise for a nonprofit. He is also barred from using data gathered from “We Build the Wall” donors.
Bannon said after the hearing that he would call on new Attorney General Pam Bondi to prosecute New York Attorney General Letitia James and investigate Manhattan district attorney Alvin Bragg, both of whom brought successful cases against Trump.
“Letitia James is the existential threat to the Trump administration,” Bannon said. Defense attorney Arthur Aidala said he counseled Bannon to plead out because he did not think Bannon could get a fair shake from jurors in Manhattan.
“This is a spectacular disposition with him,” Aidala said, noting the conditional discharge puts no real limitations on Bannon other than charitable work.
“We Build the Wall” promised 100% of donations would fund a wall along the U.S. southern border, but Bannon redirected money elsewhere.
Bannon, who served as a senior adviser to Trump during his first term, was indicted in September 2022. He previously pleaded not guilty and the trial was scheduled to begin on March 4.
Bannon was initially charged in federal court with three co-defendants. However, Trump pardoned Bannon, but not the co-defendants, whose asset forfeitures through prosecution recouped money for defrauded donors.
Bannon defrauded donors to the nonprofit by falsely promising that none of the money they donated would be used to pay the salary of “We Build the Wall” president Brian Kolfage, while secretly funneling hundreds of thousands of dollars to him by laundering it through third-party entities, prosecutors said.
The campaign represented that “We Build the Wall” would use the money to privately construct the border wall, and prosecutors said a “central piece of the public messaging in support of this fundraising effort was that Kolfage was not taking a penny of compensation.” Financial records show Kolfage was paid, according to a secret salary arrangement, an upfront payment of $100,000 and monthly payments of approximately $20,000.
(NEW YORK) — As part of his plan to cut alleged federal government waste, President Donald Trump is literally pinching pennies, ordering his Treasury Secretary to stop the U.S. Mint from producing new 1-cent coins.
In an announcement Sunday on his Truth Social platform, Trump said the cost of minting the coin featuring the profile of the country’s 16th president, Abraham Lincoln, is more than twice the currency’s face value.
“For far too long the United States has minted pennies, which literally cost us more than 2 cents. This is wasteful!” Trump wrote. “I have instructed my Secretary of Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time.”
According to the U.S. Mint, the cost of producing a single penny has more than doubled in recent years, from 1.76 cents in 2020 to 3.69 cents in 2024.
Printing a paper $1 bill is cheaper than producing a penny, which, according to the U.S. Mint, is comprised of 97.5% zinc and 2.5% copper and requires a smelting process to mold the metals. According to the Federal Reserve, it costs Treasury’s Bureau of Engraving and Printing 3.2 cents to print a $1 note – less than the cost of minting a penny.
The U.S. Mint reported losing $85.3 million on making pennies in fiscal year 2024, according to the Mint’s annual report to Congress.
Is it legal?
It remains unclear if Trump has the power to retire the coin, which has been part of the fabric of America for 233 years, 116 years with Lincoln’s portrait embossed on it.
The move would likely require the approval of Congress. Even though it’s part of the U.S. Treasury, “Congress authorizes every coin and most medals that the U.S. Mint manufactures and oversees the Mint’s operations under its Public Enterprise Fund,” according to the U.S. Mint’s website.
However, Laurence H. Tribe, the Carl M. Loeb University Professor of Constitutional Law Emeritus at Harvard Law School, told the Associated Press that the U.S. Code, a list of general and permanent federal statues, gives Trump’s Treasury Secretary, Scott Bessent, the authority to scrap the penny.
While the courts and others debate whether many of Trump’s executive orders pass legal muster, “this action seems to me entirely lawful and fully constitutional,” Tribe said.
If Trump gets his way, the penny will become the 12th U.S. currency denomination to be retired, joining the half-cent coin, the 2-cent coin, the 20-cent piece and the “trime” – a silver three-cent piece issued from 1851 to 1873, Caroline Turco, assistant curator of the Money Museum in Colorado Springs, Colorado, told ABC News.
“We retired them for multiple different reasons, but normally because they were not being used or they just became too expensive to produce,” said Turco.
Is it a good idea?
Mark Weller, executive director of Americans for Common Cents – a Washington, D.C., organization that provides research to Congress and the executive branch on the benefits of the penny – believes that eliminating the coin “is an absolutely horrible idea.”
“It would be bad for consumers and it would be bad for the economy,” Weller told ABC News. “It really would, in fact, not save money, but it would increase government losses and have some unintended economic consequences.”
Weller said doing away with the penny would prompt the U.S. Mint to increase production of the nickel. According to the U.S. Mint, the cost of minting a single nickel is nearly 14 cents, almost three times the coin’s face value and more than three-and-a-half times the cost of minting a penny.
“Without the penny, nickel production could nearly double, which would increase the Mint’s losses,” Weller said. “So, it’s just hard to understand how you could produce more nickels that are losing more money than the penny and say you’re going to save money.”
Weller further said that ditching the penny could lead to the cost of goods going up for American consumers.
“If there’s one thing most economists agree on is that private business has a profit motive. So, the assumption would be that they would price things in a way that they would round up, not round down,” Weller said.
Although digital payments are increasingly more common, Weller said cash remains a crucial tool, “especially for someone economically underserved and under-banked.”
“The majority of Americans want to keep the penny,” Weller said. “A very large number abhor the idea of rounding transactions.”
The U.S. Mint produced 3.2 billion pennies in fiscal year 2024, according to the Mint’s annual report to Congress, with an estimated 250 billion pennies currently in circulation.
History of the penny Turco, whose museum is the education branch of the American Numismatic Association, told ABC News that one big misconception about the penny is that, technically, it has never existed in the United States.
“The American system does not have a ‘penny.’ That is a misnomer,” Turco said. “We have a cent because when we rebelled against the British they had pennies and that is a British word.”
Turco said the 1-cent piece was first produced in the United States in 1793 and was originally the size of the present-day quarter.
Turco said Lincoln, whose likeness is also on the $5 bill, was added to the coin in 1909.
If Trump’s wishes are met, the United States wouldn’t be the first country to eliminate the coin, Turco said. Canada, for example, decided to phase out its penny in 2012. In the U.S., the Department of Defense stopped using pennies at its overseas bases in 1980 because it became too expensive to ship them.
Regardless of the penny’s fate, Turco said she believes it will always be a part of the United States, at least colloquially, adding that such phrases as “a lucky penny” and “a penny saved is a penny earned” will likely always be a part of the American lexicon. And, perhaps ironically, the penny’s value could increase if its discontinued.
“I think collectors will still enjoy having them,” Turco said. “But I don’t think that the value of a penny will just skyrocket overnight.”
(WASHINGTON) — Two weeks after the Department of Justice, now under new leadership following Donald Trump’s reelection, moved to dismiss their appeal of Trump’s classified documents case, a circuit court formally dismissed the appeal of a case that once accused the president of mishandling some of the nation’s most sensitive secrets.
The dismissal marks the end of a series of federal criminal cases that once dogged Trump’s political future.
“Appellant’s ‘Unopposed Motion to Dismiss Appeal’ is GRANTED. This appeal is DISMISSED,” said the one-page order issued by the U.S. Court of Appeals for the 11th Circuit.
Recently appointed Acting U.S. Attorney for the Southern District of Florida Hayden O’Bryne moved to dismiss the appeal against Trump’s former co-defendants on Jan. 29.
Trump previously faced 40 criminal counts — including violations of nine separate federal laws — for allegedly holding on to classified documents after leaving the White House in 2021 and thwarting investigators’ efforts to retrieve the documents from his Mar-a-Lago estate. He pleaded not guilty to all charges in 2023.
Trump, along with longtime aide Walt Nauta and Mar-a-Lago staffer Carlos De Oliveira, pleaded not guilty in a superseding indictment to allegedly attempting to delete surveillance footage at Trump’s Mar-a-Lago estate.
Last summer, U.S. District Judge Aileen Cannon — who Trump appointed to the bench during his first term — dismissed the indictments against Trump, bucking decades of legal precedent by finding that special counsel Jack Smith had been unconstitutionally appointed.
Smith appealed Cannon’s decision but was ultimately forced to drop the appeal against Trump after Trump was reelected in November, due to a longstanding Department of Justice policy prohibiting the prosecution of a sitting president.
After O’Bryne moved to dismiss the appeal against Nauta and De Oliveira last month, Tuesday’s dismissal closes the book on the case.
(LONDON) — Kremlin spokesperson Dmitry Peskov riffed on President Donald Trump’s suggestion that Ukrainians “may be Russians some day,” as both Moscow and Kyiv maneuver for leverage in revived peace talks the White House hopes will end nearly three years of full-scale war.
Peskov told reporters at a Tuesday briefing that the situation in Ukraine “largely corresponds to President Trump’s words.”
President Vladimir Putin’s spokesperson was referring to remarks made by Trump during an interview with Fox News which aired on Monday. The president told Bret Baier of his plans to secure U.S. access to $500 billion worth of rare earth metals located in Ukraine in exchange for continued American backing.
“They have tremendously valuable land in terms of rare earth, in terms of oil and gas and other things,” Trump said. “I want to have our money secured because we’re spending hundreds of billions of dollars and, you know, they may make a deal. They may not make a deal.”
“They may be Russians some day or may not be Russians some day,” Trump then added.
On Tuesday morning, Peskov said Trump’s remarks indicated the situation on the ground in Ukraine — often referred to by Putin and other Russian officials as the “new territorial realities” of Russian military occupation.
“The fact that a significant part of Ukraine wants to become Russia, and has already, is a fact,” Peskov told reporters, referring to Moscow’s claimed 2022 annexation of four Ukrainian regions, not all of which Russian forces actually control.
Asked if Trump’s peace proposals had a chance of success, Peskov replied, “Any phenomenon can happen with a 50% probability — either yes or no.”
Oleksandr Merezhko, a member of the Ukrainian parliament and the chair of the body’s foreign affairs committee, told ABC News of Trump’s comments, “It will never happen.”
“We saw what life under Russia might look like for Ukrainians in Bucha and Irpin,” Merezhko added, referring to the Kyiv suburbs briefly occupied by Russian forces in 2022 and where evidence of executions, torture and other abuses against civilians were uncovered after Moscow’s retreat.
“Trump’s statement means that he needs to communicate more with [President Volodymyr] Zelenskyy to understand the real picture,” Merezhko said.
Zelenskyy has expressed openness to Trump’s rare earth metals proposal. “The Americans helped the most, and therefore the Americans should earn the most,” Zelenskyy said in an interview with Reuters last week.
Zelenskyy this weekend told ITV News he “would be ready for any format for talks” if there was “an understanding that America and Europe will not abandon us and they will support us and provide security guarantees.”
Trump said Monday that his Ukraine-Russia envoy Keith Kellogg would visit Ukraine this week as the White House formulates a peace plan.
Zelenskyy is also expected to meet with Vice President JD Vance at next weekend’s landmark Munich Security Conference in southern Germany.
Zelenskyy has repeatedly rejected any suggestion of territorial concessions to Russia in exchange for peace, though has acknowledged it may not be possible to free the occupied territories via military means.
ABC News’ Cheyenne Haslett contributed to this report.
The J. Edgar Hoover building, Federal Bureau of Investigation (FBI) headquarters/ Kent Nishimura/Getty Images
(WASHINGTON) — A federal judge has ordered that the FBI must release some records related to its investigation of President Donald Trump’s handling of presidential records that have been sought under the Freedom of Information Act (FOIA).
In a memorandum opinion issued Monday, Judge Beryl Howell wrote, “Given the current circumstances and legal landscape—including that President Trump now enjoys absolute and presumptive immunity from criminal liability, the government has dismissed criminal charges against President Trump and … and no pending or even contemplated criminal enforcement action within the applicable statute of limitations on the topics of responsive records is at all likely,” the exemptions the FBI cited to block the release of information no longer apply.
Exactly three years ago, on Feb. 10, 2022, Axios reported that New York Times correspondent Maggie Haberman’s then-upcoming book, “Confidence Man,” included a claim that White House staff “periodically discovered wads of printed paper clogging” the presidential toilet.
Trump issued a statement calling the story “another fake story, that I flushed papers and documents down a White House toilet, is categorically untrue and simply made up by a reporter in order to get publicity for a mostly fictitious book.” (A footnote in Howell’s opinion notes, “In August of 2022, Haberman released photos of notes at the bottom of two toilets, and, according to her sources, one photo was allegedly of a White House toilet while the other toilet was overseas.”)
Eight days later, on Feb. 18, 2022, a letter from the National Archives described how President Trump allegedly brought classified records to his personal residence at Mar-a-Lago after losing the 2020 election.
This kicked off a high-stakes legal fight to return the records to government control and would eventually lead to an FBI search of Trump’s residence. What came next were felony charges and a series of stunning legal and political victories that would propel Trump back into office and make the charges he faced effectively disappear.
But as questions swirled around the February 2022 allegations of mishandling of records by Trump, Bloomberg News reporter Jason Leopold filed a FOIA request for six categories of documents. The first five categories pertained to documents stored at Mar-a-Lago, but the sixth category requested information about any records mentioning “Presidential Records from the Trump White House that were destroyed and … allegedly flushed down the toilet.”
The FBI argued they were exempt from responding to the request about the Mar-a-Lago investigation citing possible harm that could come to a prosecution and issued a so-called “Glomar” response to part six of the request, meaning the FBI would not confirm or deny the existence of records about alleged toilet documents.
The term Glomar is a reference to a secret CIA operation during the Cold War to raise a lost Soviet submarine from the ocean floor — when details of the operation began to leak the government provided a response that neither confirmed nor denied the existence of the operation.
Some of the information from the Mar-a-Lago investigation files was eventually released but the sixth category has remained secret.
The landmark Trump immunity case that held a president is presumptively immune from criminal prosecution for official acts and his election victory which brought a dismissal to the case had the effect of wiping away the constraints that had permitted the FBI to withhold records under FOIA.
Howell writes, “somewhat ironically, the constitutional and procedural safeguards attached to the criminal process include significant confidentiality mechanisms,” but for an immune president, such protections, “may simply be unavailable, as it is here.”
“The FBI’s Glomar response is improper, and the categorical withholding of the responsive records contained within the Mar-a-Lago investigative file is insupportable where, as here, no pending law enforcement proceeding exists, or can be reasonably anticipated, and the Mar-a-Lago investigation has been iced,” Howell writes.
No records were released immediately in the case, but the parties must submit a joint status report in 10 days to propose a schedule to conclude this case. It is unclear if the government will seek an appeal to block any further release.
(PALM BEACH, Fla.) — An off-duty corrections officer in Florida was shot and killed in a “targeted attack,” according to police.
The incident occurred at 7:32 p.m. when deputies from the Palm Beach Sheriff’s Office in Florida were dispatched to reports of gunfire in the 1400 block of NW Avenue D, in Belle Glade, according to a statement from the Palm Beach Sheriff’s Office on Tuesday
“The victim is an off-duty PBSO Corrections Deputy, who was taken to St. Mary’s Hospital, but unfortunately was pronounced dead shortly after arriving,” authorities said. “Further investigation determined that this incident was targeted.”
Officials have not yet named the deputy but did confirm that the officer killed was 39-years-old and had been with the agency for three years, police said.
Authorities also did not release any information on their investigation or why they were able to conclude that the attack was targeted at the officer involved.
A ceremonial escort took place on Tuesday evening in honor of the slain offifer from St. Mary’s Hospital to the Medical Examiner’s Office.
“We are distraught to say the least,” said the Palm Beach Sheriff’s Office.
Authorities said that additional information will be provided as it becomes available.
(WASHINGTON) — The Trump administration is gearing up for potentially contentious meetings with Arab power players this week as President Donald Trump continues to press his plan for what he calls U.S. “ownership” of Gaza, going so far as to threaten cutting off U.S. aid to Jordan and Egypt if they don’t go along.
On Tuesday, Jordan’s King Abdullah is scheduled to meet with Trump at the White House, becoming the first Arab leader to do since he returned to power last month.
Jordan has served as a humanitarian lifeline for civilians in Gaza throughout the Israel-Hamas conflict and already hosts millions of registered Palestinian refugees.
But Trump’s plan for rebuilding Gaza calls for the country, as well as Egypt, to take in close to 2 million more Palestinians he says can be removed from Gaza so that the war-torn land can be transformed into what he calls “the Riviera of the Middle East” under his watch.
Trump’s proposal to “clean out” Gaza has ignited a sharp wave of backlash from Middle Eastern leaders, including from Abdullah.
“His Majesty King Abdullah II stresses the need to put a stop to (Israeli) settlement expansion, expressing rejection of any attempts to annex land and displace the Palestinians,” the Jordanian royal court said in a statement posted to X on Wednesday, in the wake of Trump’s stunning announcement last week.
In the days since, Abdullah has also engaged in a flurry of calls and meetings with the U.N. and other countries that have historically supported the creation of a Palestinian homeland — a possible effort to present a united front aimed at pushing back against Trump’s designs for Gaza.
But the opposition appears to have done little to deter Trump. In a clip from his weekend interview with Fox News released on Monday, Trump said that under his scheme, Palestinians removed from Gaza would not have the right to return to the land after reconstruction was completed.
“No, they wouldn’t, because they’re going to have much better housing, much better,” he said. “I’m talking about building a permanent place for them.”
The president has also brushed off opposition from Jordan and Egypt to taking in large numbers of Palestinians, suggesting he would pressure their governments to get on board.
“If they don’t agree, I would conceivably withhold aid,” he told reporters Monday night.
Trump is also dispatching his top diplomat, Secretary of State Marco Rubio, to the Middle East at the end of this week.
Rubio is slated to visit Israel, the United Arab Emirates, Qatar and Saudi Arabia. He also met with the Egypt’s foreign minister at the State Department on Monday. However, it’s unclear whether he is on the same page as the president.
During his tour through Central America last week, Rubio was asked multiple times if Palestinians would be allowed to return to Gaza post-reconstruction under Trump’s plan; on each occasion, the secretary did not fully answer the question, but said Gazans would have to live somewhere else “in the interim.”
Asked how Rubio would resolve similar concerns raised by Arab leader’s during his tour through the Middle East, a senior State Department official replied “I don’t know what his plans are. I’m not a mind-reader.”
In a radio interview broadcast on Monday, the secretary said he would be the one putting questions to Middle Eastern officials –asking them how they aim to resolve the conflict.
“The only one who’s stood up and said I’m willing to help do it is Donald Trump. All these other leaders, they’re going to have to step up. If they’ve got a better idea, then now is the time,” Rubio said.
However, the foreign ministers from the Arab countries Rubio will visit already sent a letter to him earlier this month detailing their willingness to work with the Trump administration on a two-state solution, which the secretary has all but dismissed.
Some analysts have characterized Trump’s proposal for Gaza as a negotiating ploy. If that’s the case, Ahmed Aboudouh, an associate fellow at Chatham House’s Middle East and North Africa Programme, argues it has already done more harm than good.
“If Trump’s eye-popping intervention was a bargaining tactic, as some searching for logic in the proposal claim, it has already failed. Enormous damage has been done to the fragile peace process and US prestige,” Aboudouh said.
Others, like Thomas S. Warrick — a nonresident senior fellow at the Scowcroft Middle East Security Initiative and former Department of Homeland Security official — see some value in Trump’s proposal.
“No one predicted that Trump would push the United States to engage more on what postwar Gaza should look like in one month than the Biden team did in fifteen months,” Warrick said.
However, Warrick said Trump’s strategy “will need to be dialed back to what is workable,” and that he’s likely to come face to face with one tall hurdle when he meets with Abdullah: Jordan’s unwillingness to accept Palestinian refugees from Gaza.
“There is quite literally no tool in the US toolbox that could persuade the leaders of Egypt or Jordan to change their minds on this point,” he said. “Trump’s advisors know this, but they would likely rather have Trump hear this directly from Jordanian King Abdullah.”
(NEW YORK) — An Elon Musk ally hired to overhaul the U.S. Department of Treasury has a lengthy record of undertaking hardline reforms in the private sector that demoralized staff and made them fear for their jobs, according to interviews with several former employees at his tech firm.
Tom Krause, the CEO of Silicon Valley-based Cloud Software Group, oversaw layoffs at his company in each of the last three years while instituting a return-to-office mandate, rigid performance ratings, and a request that weekly updates be sent from workers directly to Krause, the former employees told ABC News — echoing the sort of reforms that Musk’s new Department of Government Efficiency has begun undertaking within government agencies.
One former Cloud Software Group employee said she hid her pregnancy for fear it could make her a target of layoffs. An ex-manager said they dreaded filing performance reviews of subordinates, knowing some workers may fall victim to the next cycle of cuts. Another former employee said they avoided expressing unease in company emails or in the messaging app Slack out of concern that it could jeopardize their job.
“They’re taking business practices popular in boardrooms and on golf clubs, and they’re taking them into government,” Kathleen Roan, a former senior content designer at Cloud Software Group who retired in 2024, told ABC News.
Krause in recent days has vaulted into a key position at the Treasury Department, overseeing its $5 trillion payment system, which sends funds to tens of millions of Americans for programs like Medicare and Social Security, the agency’s website says.
In a press release, the agency said Krause brings decades of experience “managing balance sheets” to the agency’s effort to “maximize payment integrity.”
Neither Krause nor Cloud Software Group responded to a request for comment from ABC News.
A ‘hatchet man’
Several former employees ABC spoke with praised Krause as a savvy business leader, and one said they enjoyed their tenure at the company. But most of them requested that they not be identified due to concerns about reprisals.
“There was a whittling away of the things that made you feel like you were a valued employee and then finally ‘Oh, now we’re going to start eliminating jobs,'” Roan said of her time at the company under Krause. “They saw people as expendable.”
Cloud Software Group company was established in 2022 through the acquisition of enterprise software firm Citrix in a private equity-backed $16.5 billion deal, followed by a merger with TIBCO Software.
Krause, who had previously served as president of software at Palo Alto-based Broadcom, was named CEO of the new firm.
Within months, in January 2023, the company cut 15% of its workforce.
“The feeling was that he was there to cut expenses down and be a hatchet man, similar to what’s happening now in the government,” a former human resources employee said. “Everyone was on edge.”
Some of the cost-cutting measures at Cloud Software Group under Krause were first reported by The American Prospect.
Within months of Krause’s arrival, the company also requested that employees return to the office, multiple former employees said.
At the same time, the company closed some offices in an effort to reduce overhead costs, multiple former employees told ABC News. The closures left some workers without an office nearby, making them exempt from the return-to-office requirement, a former employee said.
On Inauguration Day, Trump signed an executive order calling on federal agency heads to mandate in-office work. Musk backed that policy in an op-ed he co-authored in the Wall Street Journal, predicting that mandatory return to work “would result in a wave of voluntary terminations that we welcome.”
‘A much higher level of business discipline’
Employees at Cloud Software Group lost some perks, too.
David Morgan, a former client support provider at Cloud Software Group, said the firm ended his quarterly bonuses, which amounted to $16,000 each year. Workers also stopped receiving “thank you” days, an extra allotment of paid time off, Morgan said.
“Everything we were told would be benefits at the time of hiring was slowly removed,” Morgan said. An Air Force veteran with a disability, Morgan said he received one day of notice before he lost his job as part of a round of layoffs in January 2024, after having been assured that his position had been safe over the months prior.
In a post on LinkedIn that month, Krause said the company had improved but still required personnel changes.
“Our focus on adding value for our long-standing customers while driving a much higher level of business discipline and accountability is bearing fruit — with customer retention and financial results for our first fiscal year as Cloud Software Group coming in ahead of plan,” Krause said.
“But change often means difficult decisions,” he wrote. “While we have a number of areas of the business where our plans involve additional hiring to support our goals, they also mean a pragmatic look at those places where we simply need fewer or different resources.”
In a direct message to Krause over LinkedIn days later, Morgan wrote, “It’s challenging to reconcile my dedication and commitment to the company with the feeling of being let go in a way that seemed to lack empathy.” It does not appear that Krause responded, according to a screenshot of the conversation reviewed by ABC News.
Another policy shift under Krause brought the implementation of employee-performance ratings on a scale of one to three, multiple former employees said.
The ratings took a toll on one former manager, who said the company required them to label at least one subordinate as a low performer. “I had to give one person a low score, even if I thought they didn’t really deserve a low score,” they said. “It was miserable.”
Rating systems have reportedly been deployed as part of the Trump administration’s recent push to cut staff. Senior staff across the Department of Health and Human Services were told to rank thousands of employees in probationary periods, with as much as 40% to be deemed non-mission critical, the Washington Post reported.
‘It’s very alarming’
Daniel Keum, a professor of management at Columbia University Business School, said the apparent overlap between cost-cutting initiatives at Cloud Software Group and some federal agencies exemplifies the Trump administration’s use of tactics borrowed from the private sector.
“In tech, there’s a mentality that you have to break things to make them a lot better,” Keum told ABC News. “When transposed into federal agencies, that mentality becomes very dicey.”
Nearly all former employees who spoke to ABC News expressed shock or concern about the role at the Treasury taken up by Krause, though one expressed indifference and another voiced support.
“It’s very alarming,” said Roan, the former Cloud Software Group design architect.
“He should absolutely not have anything to do with the U.S. Treasury Department,” said Morgan.
In contrast, a former account executive at the company applauded the choice of Krause for the Treasury role, citing his financial acumen.
“I don’t think you can find a better person to swim in the weeds [and] sit in the edifice of the Treasury Department,” the person said.
In January, Cloud Software Group conducted another round of layoffs. That same month, Krause sent an email to all employees asking them to voluntarily send him a message at the end of each week “telling me what you accomplished,” according to a copy of the email reviewed by ABC News.
The approach draws on best practices from “two great entrepreneurs and CEOs that lead the most valuable companies in the world,” Krause wrote, naming Musk and Nvidia CEO Jensen Huang.
In a separate email in recent days, Krause told employees that he plans to continue in his role at the company during his time at the Treasury, according to a copy of the email reviewed by ABC News that was first reported by CRN.
“I am honored to serve our country,” Krause wrote. “Let me be clear — as CEO of Cloud Software Group, I am committed to our company and to you, our employees.”
Airplanes sit parked at gates at Terminal A at Newark Liberty International Airport/Gary Hershorn/Getty Images
(MIAMI) — A New Jersey man was charged with threatening flight passengers, attendants and crew members on a flight from Miami, Florida, to Newark, New Jersey.
According to the complaint, Luis Vaquero made “threats of physical violence against a disabled minor and mocking a group of Jewish passengers.”
It said that he also threatened a flight attendant when they refused to serve him more alcohol. When the plane arrived at Newark Liberty International Airport on Sunday, the captain made an announcement that law enforcement would be removing a passenger, according to the complaint.
It said that Vaquero then left his seat and began banging on the flight deck door and cursing at the captain while the plane was taxiing.
When the plane arrived at the gate, the complaint said the captain emerged from the flight deck and Vaquero approached him, screaming in his face and threatening him until law enforcement officers boarded the plane and escorted Vaquero off.
“The defendant is charged with threatening flight crew members and passengers while traveling to Newark,” Acting United States Attorney Vikas Khanna said in a press release. “We are committed to keeping the skies safe for flying and will prosecute those who criminally interfere with the professionals responsible for ensuring passenger safety.”
“It all culminated in a terrifying attack and attempted breach of the flight deck when witnesses say he banged on the cockpit door and confronted the pilot,” Acting Special Agent in Charge Terence G. Reilly said in the release.
“The harrowing flight and other similar incidents onboard airplanes recently are creating tension and fear for fliers and crew members,” Reilly added. “FBI Newark has a warning for those who think it may not be a big deal—they’re breaking federal law, and they will be brought to justice.”
