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Medicaid’s Structure Actually Invites Waste and Fraud

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Recently, Minnesota and Governor Tim Walz have come under scrutiny for Medicaid Fraud. The debacle received renewed focus on December 1 when Treasury Secretary Scott Bessent posted on X that he had directed the US Treasury to investigate allegations of fraud and that taxpayer dollars were allegedly “diverted to the terrorist organization Al-Shabaab.”

Unfortunately, misuse of Medicaid funds is nothing new. In 2023, the Office of Minnesota Attorney General Keith Ellison charged three individuals as part of a scheme to defraud the Minnesota Medical Assistance (Medicaid) program out of nearly $11 million, the largest Medicaid fraud prosecution in that state’s history. These charges spurred a wider crackdown on Medicaid fraud in the Land of 10,000 Lakes.

What distinguishes the current scandal from background levels of fraud is abundant evidence that “someone was stealing money from the cookie jar and they [state officials] kept refilling it.” This quote, highlighted by Economist Michael F. Cannon, comes from one of the defense attorneys in the fraud case. Cannon then reiterated his insight from 2011: “The three most salient characteristics of Medicare and Medicaid fraud are: It’s brazen, it’s ubiquitous, and it’s other people’s money, so nobody cares.”

This comes at the cost of reducing quality of care and access to care for the poorest Americans. The solution comes from getting government out of healthcare, not by enlarging Medicaid’s “cookie jar,” or by refilling the jar more frequently.

Improper Payments? Fraud? Waste? What’s the Difference?

When federal officials discuss various errors in their program, they choose specific language. Understanding the distinctions in how each term is used helps decipher how a federal program is performing.

In its own findings, the Government Accountability Office (GAO) notes that Medicaid is highly susceptible to “improper payments” with an improper payment rate second only to Medicare. The GAO defines improper payment as “payments that should not have been made or that were made in the incorrect amount; typically they are overpayments.” This is distinct from their definition of fraud, which is “obtaining something of value through willful misrepresentation.” The GAO comments, “While all fraudulent payments are considered improper, not all improper payments are due to fraud.” An improper payment could be an honest mistake on the part of either the citizen receiving Medicaid or the public employees administering the program.

The GAO also distinguishes waste as “when individuals or organizations spend government resources carelessly, extravagantly, or without purpose” and abuse “when someone behaves improperly or unreasonably, or misuses a position or authority.”

Specific allegations or investigations regarding waste or abuse are beyond the scope of this author, but incentives suggest that both are present and widespread among state Medicaid programs.

The Bad News: Medicaid’s Design Makes It Susceptible to Error (Including Fraud)

Medicaid is a joint federal-state program that funds health insurance coverage for America’s poor. The federal government transfers funds to states, which then administer Medicaid programs, with some variations from state to state. 

This income threshold to be eligible for Medicaid increased under the expansion of The Affordable Care Act (also known as the ACA or Obamacare). Because ACA enrollees receive more federal dollars than traditional Medicaid, state policymakers are incentivized to prioritize serving more Medicaid expansion enrollees (the slightly less poor) over those in traditional Medicaid (the poorest Americans). 

The Centers for Medicare & Medicaid Services (CMS) estimates Medicaid’s improper payments within three categories:

  1. Managed care: Measured errors in payments states make to private insurance companies that are contracted to deliver Medicaid benefits (known as managed care organizations).
  2. Fee-for-service: Measured errors in payments states make directly to providers on behalf of fee-for-service beneficiaries, including payments made to ineligible providers.
  3. Eligibility: Measured errors in state eligibility determinations for both types of Medicaid beneficiaries.

In fiscal year 2024, improper payments in Medicaid were estimated at $31.1 billion — equal to five percent of total Medicaid spending. This highlights a major weakness in the program, whose size and complexity lead to clerical errors and procedural mistakes. Additionally, when states fail to collect the necessary documentation (such as up-to-date income verification), improper payments (including fraud) are more likely to occur.

Saul Zimet recently wrote in The Daily Economy:

The government bureaucrats who kept sending hundreds of millions of dollars to the fraudsters year after year had every indication of what they were enabling, but their incentives were to enable rather than prevent the theft.

Unfortunately, Medicaid’s design encourages state policymakers to maximize transfers. In some instances, that may mean lax oversight of where the money goes and who is eligible to enroll in Medicaid. COVID-19 stimulus funding required states to relax eligibility requirements and accelerate approvals to receive Medicaid: the environment was ripe for accidental improper payments as well as waste and fraud.

Since Medicaid’s inception, state policymakers have taken advantage of accounting gimmicks (such as provider taxes) to maximize the amount federal taxpayers shell out into state programs. The motivation for state officials is clear: increase your spending and have federal taxpayers in other states pay for it. Transfers to state and local governments often come with strings attached — the terms and conditions of receiving the transfers — allowing federal policymakers more influence over state and local spending. Whether or not the use of a provider tax loophole represents a misuse of Medicaid’s framework is the subject of debate. Research from the Paragon Institute highlights areas that, at the very least, require substantial investigation and reform to prevent states from shifting costs to federal taxpayers.

The Worse News: Medicaid’s Errors May Be Worse Than Official Government Estimates

From 2015-2024, the GAO reported $543 billion in improper Medicaid payments. Unfortunately, that may be lower than the actual total. Research from economists Brian Blase and Rachel Greszler found that improper payments during that period are estimated to actually be $1.1 trillion, more than double the GAO’s estimates.

The discrepancy comes from Blase and Greszler’s inclusion of eligibility checks in the audits of improper Medicaid payments, which both the Obama and Biden administrations excluded. The halting of Medicaid enrollment audits is especially concerning because during this same period, many states expanded Medicaid under the ACA and Medicaid saw a record number of enrollees during the pandemic. Blase and Greszler comment, “Eligibility errors of this nature are particularly concerning as it can indicate that individuals are allowed to remain enrolled in the program during times in which they do not qualify, potentially diverting limited resources that could otherwise be invested in better serving vulnerable populations.”

Blase and Greszler’s research raises serious concerns about Minnesota. Is the fraud being investigated just the tip of the iceberg?

The Solution: Get Government Out of Healthcare

In addition to the improper payment rate of Medicare and Medicaid (and the disincentive to investigate what becomes of ‘other people’s money’): fraud risks are being investigated in the other portion of the ACA: the premium tax credits paid from the US Treasury to an insurance company to cover an enrollee of an ACA exchange health insurance plan. 

Healthcare is also the single largest category of the federal budget, with about 26 cents of every dollar spent going to various healthcare programs, which are also the single largest item on most state budgets. Not by accident is healthcare highly regulated at both the federal and state levels. Federal and state tax codes incentivize working Americans to purchase health insurance through an employer, leaving little room for insurance offered through civil society and voluntary contracting. There’s a lot unknown in health care, but one thing is clear: government encroachment is not helping.

Healthcare, nearly twenty percent of the US economy and growing, is in desperate need of reform. Rolling back regulations on insurance offerings, the healthcare profession, and innovation, as well as reforming the tax code and spending to encourage consumer-driven choice will encourage competition, lower costs, and empower patients. 

Greater consumer choice — and less reliance on distant federal programs — will help reduce the fraud endemic in government healthcare.

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The Regulatory Pendulum: Why Financial Rules Keep Missing the Mark

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Recently, two Federal Reserve governors delivered speeches with interesting differences. Michael Barr warned against weakening bank supervision, citing “growing pressures to scale back examiner coverage, to dilute ratings systems” that could lead to a crisis. Stephen Miran countered that “regulators went too far after the 2008 financial crisis, creating many rules that raised the cost of credit” and pushed activities into unregulated sectors.

Both governors make valid observations about their respective concerns. Yet neither addresses a more fundamental problem: the regulatory cycle itself may be the primary source of financial instability. Rather than preventing crises, financial regulation tends to shift risks to new areas, setting the stage for different—not fewer—failures.

The Regulatory Ratchet

Barr himself describes the pattern: “time and again, periods of relative financial calm have led to efforts to weaken regulation and supervision…often had dire consequences.” But this observation cuts both ways. Periods of crisis lead to regulatory overreach, which creates unintended consequences, which leads to calls for reform—and the cycle repeats.

The Savings and Loan crisis of the 1980s and early 1990s illustrates this dynamic clearly. Following widespread S&L failures, regulators imposed stricter capital requirements through the 1988 Basel Accord. Financial institutions responded by using securitization to reduce their regulatory capital requirements while maintaining risk exposure—creating the shadow banking system that would later amplify the 2008 crisis. The new regulations didn’t eliminate risk; they relocated it to where regulators couldn’t see it.

After 2008, the pattern repeated. Dodd-Frank increased capital requirements and restricted proprietary trading through the Volcker Rule. As Miran notes, “many traditional banking activities have migrated away from the regulated banking sector” because regulatory costs made these services unprofitable for banks. Credit migrated to private credit funds, collateralized loan obligations, and other non-bank lenders. 

Today, private credit markets exceed $1.5 trillion, largely outside regulatory oversight. When the next crisis arrives, it will likely originate in these sectors—not because markets failed, but because regulation distorted incentives and redirected risk to less efficient channels. “Shadow banking” now accounts for $250 trillion globally, nearly half of the world’s financial assets, with minimal regulatory oversight.

Managing Risk, Not Preventing It

This regulatory cycle reveals a deeper problem with how policymakers think about financial stability. Both prevention-focused regulation (Barr’s preference) and “peeling back regulations”
(Miran’s approach) assume regulators can outsmart markets. Neither addresses the knowledge problem at the heart of financial regulation: regulators are always fighting the last war while markets adapt faster than rules can be written.

A more effective approach recognizes that financial risk cannot be eliminated—it can only be managed when it materializes. Financial regulation, if there is going to be any, should focus on crisis resolution rather than crisis prevention. This means three things:

First, establish clear rules about who bears losses when failures occur. Uninsured creditors, not taxpayers, should absorb losses. The FDIC’s resolution authority works precisely because it allows banks to fail in an orderly way, with clear priorities for claims. Extending this principle—making “too big to fail” institutions write “living wills” that detail how they would be unwound—creates market discipline without micromanaging risk-taking.

Second, eliminate implicit guarantees that encourage excessive risk-taking. When creditors believe regulators will intervene to prevent losses, they stop monitoring risk carefully. The 2008 bailouts reinforced expectations of government support, which may explain why risk-taking continued despite stricter regulations. A credible commitment to let failures happen—even of large institutions—would do more to encourage prudent lending than any capital requirement.

Third, simplify the regulatory framework itself. Complex rules create opportunities for regulatory arbitrage and make it harder for market participants to understand their actual risk exposure. Miran identifies one such complexity: leverage ratios that penalize holding safe assets like Treasury securities, creating “contradictory incentives” that distort markets rather than stabilizing them.

Canada’s experience offers a useful contrast. Canadian banks weathered the 2008 crisis better than their American counterparts, despite having less stringent capital requirements and a more concentrated banking sector. The key difference? Canadian regulators focused on ensuring orderly resolution of failures rather than preventing all risk-taking. Banks faced real consequences for poor decisions, which encouraged more conservative behavior than any amount of supervision could mandate. Since 1840, the United States has experienced at least 12 systemic banking crises—Canada has had zero. During 2008, Canadian banks maintained an average leverage ratio of 18:1 compared to over 25:1 for many US banks. The US bailed out hundreds of banks; Canada bailed out zero.

Breaking the Cycle

The debate between Barr and Miran represents the latest turn in the regulatory cycle. Both assume their preferred approach will prevent the next crisis. History suggests otherwise. Until policymakers recognize that financial regulation shifts rather than eliminates risk, we will continue cycling between crisis, overreaction, unintended consequences, and the next crisis.

The alternative is clear bankruptcy procedures and eliminating implicit guarantees. Let markets—not regulators—price risk. Let banks—not bureaucrats—manage portfolios. And most importantly, let failures happen to those who take excessive risks, ensuring that profits and losses remain where they belong: with the institutions that make the decisions.

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Lithium Market Forecast: Top Trends for Lithium in 2026

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The lithium market heads into 2026 after one of its most punishing years in recent memory, shaped by deep oversupply, weaker-than-expected electric vehicle (EV) demand and sustained price pressure.

In 2025, lithium carbonate prices in North Asia sank to four year lows, forcing production cuts and project delays as the industry grappled with the consequences of years of aggressive supply growth.

The second half of the year saw a rebound as lithium carbonate began a slow ascent. By December 29, prices had risen 56 percent from their January start position of US$10,798.54 per metric ton to US$16,882.63.

While volatility and brief price rallies highlighted the market’s sensitivity to sentiment and policy signals, analysts increasingly see the sector’s first-half downturn as an inflection point. With high-cost supply under strain and inventories gradually tightening, expectations are building that 2026 could mark the start of a rebalancing phase, supported by long-term demand tied to electrification, energy storage and the broader energy transition.

Battery energy storage systems to drive lithium growth

Energy storage is emerging as the fastest-growing pillar of battery demand, with major implications for the lithium market heading into 2026. Indeed, according to Benchmark Mineral Intelligence’s Iola Hughes, growth in this segment is accelerating well ahead of the broader battery market.

“We’re expecting about 44 percent growth (in 2025),” she said. That’s compared with roughly 25 percent growth across total battery demand. As a result, energy storage is set to account for about a quarter of total global battery demand in 2025, a share that is rising rapidly. The shift is even more pronounced in the US, where Hughes expects storage to make up a significant “35 to 40 percent of battery demand in the next few years.”

That growth is being driven by falling costs and the growing role of lithium iron phosphate (LFP) chemistry, which Hughes described as the dominant technology in stationary storage.

“It very much is the story of LFP right now,” she said, pointing to recent innovation and lower costs, which have helped to make LFP “the best chemistry” for most storage applications.

Globally, deployment remains highly concentrated. China and the US account for roughly 87 percent of cumulative grid-scale storage installations, but new markets are emerging quickly.

Saudi Arabia, Hughes noted, has surged from effectively zero to the world’s third largest market in a matter of months, deploying around 11 gigawatt-hours in the first quarter alone. “That really goes to show just how early this market is in its story,” she said; it also indicates how quickly new sources of battery demand can materialize.

Cost declines sit at the core of the expansion. Fully integrated storage systems in China are now approaching, and in some cases falling below, US$100 per kilowatt-hour. Hughes said this has fundamentally changed the economics of storage, making deployments viable even as policy support tightens. “The prices are so much cheaper, the economics are a lot stronger, even in a normal, unsubsidized environment,” she said.

In the US, growth remains concentrated in a handful of states — led by California and Texas — but Hughes stressed how early stage the market still is. New Mexico, now the fifth largest storage market, is built on just a few projects.

At the same time, the scale of energy storage projects is increasing rapidly. Giga-scale installations, defined as projects larger than 1 gigawatt-hour, are moving from novelty to norm.

Hughes said nine such projects are expected to come online this year, accounting for about 20 percent of battery demand, with more than 20 in the pipeline for next year, representing close to 40 percent.

Policy remains a key variable. While investment tax credits for storage remain in place in the US, Hughes warned that tighter sourcing and eligibility rules are reshaping supply chains, particularly for LFP. The pipeline of announced LFP gigafactories has grown sharply this year — up more than 60 percent — led largely by Korean manufacturers.

“We’re in a much better position when it comes to sourcing of cells for energy storage than we were even three months ago,” she said, though challenges remain around production tax credits and heavy reliance on Chinese cathode supply.

Underlying the storage boom is a broader shift in electricity demand.

After more than a decade of stagnation, US power demand is rising again, driven by data centers, AI, electrification and reshoring of manufacturing. Hughes said estimates now point to electricity demand rising 20 to 30 percent by 2030, placing energy storage at the center of energy security planning. “Storage has become a central topic in the energy security conversation,” she said, adding that its role will only grow.

Looking ahead, Hughes said LFP is likely to dominate shorter-duration storage, while sodium-ion and other battery technologies compete in longer-duration segments.

For the lithium market, the message is clear: as storage scales up in size, geography and strategic importance, it is becoming one of the most powerful demand drivers shaping the sector’s outlook for 2026 and beyond.

Lower costs driving LFP adoption

Howard Klein, RK Equity co-founder and partner, argued that falling costs remain a central driver of LFP battery adoption, reflecting a familiar economic dynamic: as prices decline, demand accelerates.

While lithium is a key input, he suggested that ongoing manufacturing efficiencies and economies of scale are likely to continue pushing LFP battery costs lower over time, potentially offsetting upward pressure from higher lithium prices.

Klein emphasized that even if LFP costs rise modestly, battery storage will remain highly competitive as a source of grid power. Compared with conventional generation options such as gas or coal, storage already offers a compelling cost and performance proposition, he said, and does not rely solely on subsidies to remain economically viable.

Geopolitical instability on the rise

Critical minerals are increasingly at the center of US foreign policy, and that shift is set to reshape the lithium value chain through 2026, according to Klein. He noted that geopolitics now underpins many of Washington’s strategic priorities, from Eastern Europe to Africa and the Arctic.

“The entire foreign policy agenda is largely being driven by critical minerals,” Klein said, citing regions including Ukraine, Russia, the Democratic Republic of Congo, Greenland and Canada.

China’s willingness to weaponize its dominance in key supply chains has sharpened that focus.

On that note, Klein pointed to Beijing’s renewed rare earths export restrictions in October, noting that these measures were applied globally, not just against the US.

“They showed that they wield a significant negotiating stick, and they’re willing to use it,” he said.

In Klein’s view, that move has triggered a forceful response from western governments. “I think they’ve overplayed their hand to some degree, because now you’ve had this very big reaction from the US.”

That reaction is translating into a renewed push to localize and reshore critical mineral supply chains — an effort that has gained rare bipartisan backing in Washington.

“Unlike so many other things in America, which are hyper-partisan, both sides agree we need to resolve this,” Klein said, adding that the policy momentum will continue to shape the lithium industry.

While rare earths remain the immediate pressure point, Klein said the policy lens is widening. The US recently added 10 minerals to its critical minerals list, which now stands at a total of 60. Lithium, he said, sits high on that agenda, not out of enthusiasm for the metal itself, but because of its role in batteries.

“It’s an understanding by the government that batteries and battery technology are very, very important, and the entire battery supply chain needs to be supported,” Klein said. That support extends beyond lithium to graphite, manganese, nickel, cobalt and battery components such as anodes and cathodes.

The approach is increasingly coordinated across western economies. Klein described it as “a G7 effort,” with the EU and Canada aligned alongside the US through a mix of bilateral and multilateral initiatives.

That coordination is already translating into capital flows. He pointed to US-backed progress at Thacker Pass, EU funding for Vulcan Energy Resources (ASX:VUL,OTC Pink:VULNF) and a 360 million euro grant for European Metals Holdings (LSE:EMH,ASX:EMH,OTCQB:EMHLF) as early examples. Canada, he added, is also ramping up support.

“Canada announced C$6 billion over 26 investments,” Klein said, adding that more announcements are likely by the time the Prospectors & Developers Association of Canada convention rolls around in March.

Klein sees geopolitics, industrial policy and supply chain security converging into powerful lithium tailwinds. “This is a super hot topic,” he said, and one that is likely to drive increased lithium-related activity well into 2026.

Should the US build a strategic lithium reserve?

To dilute China’s grip on the sector, Klein is advocating for a strategic lithium reserve in the US as a more effective and market-neutral alternative to company-specific subsidies. He argues that the industry’s core challenge is not demand, but extreme price volatility caused by global oversupply and what he describes as non-market behavior, which has driven prices below sustainable levels and distorted investment signals across the sector.

“The problem in lithium is volatile prices — prices below the marginal cost, catastrophically low prices that put companies out of business,” he said, pointing to persistent oversupply as the primary distortion.

In Klein’s view, a reserve would act as a counterweight by creating steady, large-scale demand that stabilizes prices within a sustainable range. “The main focus is to stabilize price … not at a super high level, but at a level where companies can make an economic return,” he said. That stability, he added, is essential to incentivize investment in mines, processing and conversion facilities across the US, Canada and allied jurisdictions.

Unlike targeted government support, Klein said a reserve would allow the market to determine which projects succeed.

“I want the market to decide which projects and companies are the best, not necessarily the government,” he said, noting the diversity of competing lithium resources, from US clay and brine projects to Canadian hard-rock deposits.

A more predictable price environment with fewer large swings would lower the cost of capital and give private investors greater confidence to finance viable projects.

Klein stressed that a lithium reserve should not be confused with a stockpile.

“People use ‘stockpile’ and ‘reserve’ like they’re the same thing, and they’re not,” he said. While a stockpile focuses on availability for emergencies, a reserve is designed as a market-stabilizing mechanism that can buy and sell material to smooth volatility. Availability, he said, is a secondary benefit.

He sees the concept as most relevant for mid-sized, fast-growing markets like lithium, graphite and other battery materials that lack deep futures markets and long-term hedging tools.

“Those are the markets that could be amenable to a reserve,” he said, contrasting them with large, liquid commodities like copper or very small, niche minerals tied mainly to military use.

Looking longer term, Klein said a lithium reserve aligns closely with the growth of EVs, energy storage, data centers and grid electrification, as well as geopolitical efforts to diversify supply chains away from China.

“This is no longer just a renewables or EV thing — this is national security, clean energy and building an electro-state,” he said, arguing that reducing volatility would make it easier for automakers, utilities and manufacturers to commit capital without fear of being caught on the wrong side of wild price swings.

North American cooperation key for lithium

Gerardo Del Real, publisher at Digest Publishing, also highlighted the impact of geopolitics on the lithium value chain, emphasizing the need for North American coordination to reduce reliance on dominant producers like China.

“I think this is the path towards that. It has to happen,” he said, noting that collaboration between the US, Canada and potentially Mexico could strengthen regional supply security and reduce vulnerability to global disruptions.

Del Real framed the issue in broader energy terms, pointing to the strategic value of domestic resources: “If we are serious as a country and as a region in being somewhat independent from China and from the Russians … we have a luxury of resources in the US, in Canada … there could be a very powerful path forward.”

On market dynamics, he suggested investors are focused on timing and catalysts, with policy shifts, demand surprises or supply disruptions likely to drive sentiment in 2026.

He also warned that the market may be underestimating the importance of coordinated regional supply initiatives as a factor shaping pricing and project economics.

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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GREGG JARRETT: No, Trump’s order to snatch Maduro was not illegal or unconstitutional

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To the surprise of no one, Democrats reflexively denounced Trump’s daring middle-of-the-night grab of Venezuelan dictator Nicolas Maduro and his wife.  

If Joe Biden, who offered a $25 million reward for Maduro’s arrest, had done what Trump did, these same politicians would be organizing a ticker-tape parade.  

Their condemnation of Trump has nothing to do with the law, although they pretend that it does. Instead, it is transparently driven by their contempt for a president that they despise.

Bereft of reason, they oppose whatever Trump does even if it conforms to their previously expressed beliefs.

Almost in unison, Democrats decried Trump’s action as ‘illegal,’ ‘unjustified’ and ‘unconstitutional.’ Many insisted that he was required to seek permission from Congress.  

None of that happens to be true. 

Inherent Constitutional Authority

The president is empowered by the U.S. Constitution as commander in chief of the armed forces to direct military action to protect Americans, fortify U.S. interests and defend our national security.  

The scourge of drugs emanating from Venezuela has long been poisoning our citizens. Our government estimates that roughly 200 to 250 metric tons of cocaine is shipped out of the Latin American country annually. America, by virtue of its prosperity, is a favored destination.  

On this basis alone, the incursion into Caracas was legal, justified, and legitimate.

For years, Maduro has led the notorious Cartel de los Soles, a violent drug cartel that is designated by the U.S. as a foreign terrorist organization responsible for murders, torture and crimes against humanity so egregious that even the United Nations recognized it.

Article II, Section 2 of our Constitution vests inherent powers in the president to unilaterally order armed forces into military actions. His command authority is supreme, and he may conduct campaigns and deploy operations by his own judgment.  

Short of a formal declaration of war, a president does not need prior authorization from Congress to act. That principle is embedded in our Constitution and has been upheld by the U.S. Supreme Court since the early founding of our Republic.

In more modern times, the president’s authority over armed action has only expanded. Cases involving Truman, Clinton and Obama solidified presidential power to direct military operations without congressional consent. 

Trump had every legal and constitutional right to defend the United States against the transport of deadly illicit drugs and to arrest the man most responsible, who has been federally indicted for numerous crimes. 

And no, Trump did not violate the War Powers Act as some of his critics have alleged. The resolution that was passed in 1973 stipulates a reporting requirement to Congress within 48 hours of deploying forces into hostilities. It is not a prohibition to act.

Indeed, it implicitly recognizes a president’s inherent power to use military force without specific congressional approval. Every single American president has done so since the end of World War II.  Trump is no exception.  

The ‘Take Care Clause’

The president has another authority at his disposal. The ‘Take Care Clause’ in Article II, Section 3 of the Constitution mandates that the president ‘shall take Care that the Laws be faithfully executed.’

To put it simply, Trump is duty-bound to ensure that all federal statutes are enforced. This includes the apprehension, arrest, and prosecution of wanted fugitives who are criminally charged with U.S. crimes and must be brought to justice.

Effectuating the arrest of Maduro qualifies as enforcing all laws. Just because the accused is the de facto head of state in another country does not afford him protection or immunity from the long arm of American law. That is written nowhere. 

U.S. Secretary of State Marco Rubio described Maduro as ‘a fugitive of American justice.’ Given his armed protection, military troops were necessary to accomplish his arrest. According to Trump, the ‘operation was done in conjunction with U.S. law enforcement.’

This was also the case in 1990 under nearly identical circumstances.    

Then-President George H. W. Bush ordered the military to capture Manuel Noriega, the corrupt dictator of Panama who was indicted on drug trafficking charges and endangering U.S. citizens. After a surprise military operation in the country’s capital, he was taken into custody and spirited back to the U.S. for trial.

Noriega’s legal team of defense attorneys vigorously challenged both his arrest and America’s legal authority to try him. Those maneuvers failed, along with his various claims of immunity. He was convicted and imprisoned.

So, we’ve seen this movie before. Maduro’s lawyers will mount the same legal challenges. But if the past is prologue, there is little reason to believe that the ending will be any different.  

This leaves the rather vacant claim by Trump adversaries that his actions somehow violated the norms and customs of international law. It is a common accusation that is often lacking in substance.  

Some point to Article 2(4) of the United Nations Charter, which prohibits member nations from ‘the use of force against the territorial integrity’ of any state. However, the Charter provides an exception for self-defense.

As evidenced by the charges stated in Madura’s indictment, his actions as a narco-terrorist flooding the U.S. with deadly drugs fully justifies Trump’s actions as defensive in nature. Continued drug trafficking posed an imminent threat to the lives of American citizens.

If a conflict of American versus international law exists, our president’s obligations under Article II of the Constitution takes precedence and priority over Article 2 of the U.N. Charter. Members of the United Nations can complain all they want, but the U.S. has veto power in the UN Security Council.           

Most Venezuelans seem relieved that the long nightmare of tyranny, oppression and death at the hands Hugo Chavez and Nicolas Maduro is finally over. Their land is rich with the world’s largest oil reserves.

If free and fair elections are held, as they should be, the impoverished citizens of this proud nation can share in a brighter future of freedom, economic recovery and financial prosperity.

They will have President Trump to thank for that.


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Trump issues direct warning to Venezuela’s new leader Delcy Rodríguez following Maduro capture

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President Donald Trump issued a pointed warning to Venezuela’s new leader on Sunday, suggesting severe consequences if she continues to resist U.S. demands following the American-led operation that resulted in the capture of Venezuelan President Nicolás Maduro.

In an interview with The Atlantic, Trump said Delcy Rodríguez would ‘pay a very big price, probably bigger than Maduro’ if she fails to ‘do what’s right,’ adding that his administration would not tolerate what he described as her defiant rejection of the U.S. intervention.

Defending that approach, Trump said, ‘Rebuilding there and regime change, anything you want to call it, is better than what you have right now. Can’t get any worse,’ he added.

The White House did not immediately respond to Fox News Digital’s request for comment. 

Trump’s remarks followed a stunning predawn announcement Saturday that U.S. operators had carried out a mission to capture Venezuelan President Nicolás Maduro and his wife.

Speaking at a news conference at Mar-a-Lago, Trump said a U.S.-appointed team would ‘run Venezuela’ until the country’s political leadership was stabilized.

He also pledged a return of U.S. energy investment to the cash-strapped Latin American country which sits atop the world’s largest oil reserves. 

Trump framed his foreign policy approach, according to The Atlantic, through what he described as a modernized version of the Monroe Doctrine, the 19th-century policy opposing European colonial influence in the Western Hemisphere. 

Trump referred to his approach as the ‘Donroe Doctrine.’

Trump also hinted that Venezuela would not be the last nation to face U.S. pressure, raising the prospect of additional interventions beyond Latin America.

As an example, he reiterated his long-standing interest in Greenland, a semiautonomous territory of Denmark, a NATO ally.

‘We do need Greenland, absolutely,’ Trump told the magazine, citing U.S. national security interests and strategic location.


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Trump and Musk share ‘lovely dinner’ at Mar-a-Lago after public feuding

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President Donald Trump and Elon Musk appear to have repaired their once-strained relationship, according to a post shared by the billionaire Tesla founder on X.

In a post shared Sunday, Musk wrote, ‘Had a lovely dinner last night with @POTUS and @FLOTUS,’ before adding, ‘2026 is going to be amazing!’

The photo, taken from a Saturday evening event at Mar-a-Lago in Florida, sparked speculation that the pair’s bromance may be back on after more than a year of tension.

After the 2024 campaign, Musk became one of the Republican Party’s biggest political donors, contributing hundreds of millions of dollars, according to Reuters.

Trump later tapped Musk to advise the government efficiency effort and set up DOGE, focused on reducing federal spending and streamlining operations – but Musk stepped back from the role in mid-2025 amid mounting criticism. 

Tensions also resurfaced when Musk publicly criticized Trump-backed spending proposals and raised concerns about the size of federal outlays.

‘I’m sorry, but I just can’t stand it anymore,’ Musk said in a June 3 post about Trump’s Big Beautiful Bill.

‘This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,’ Musk complained.

Trump shot back that he was ‘very disappointed’ in Musk’s criticism of his bill at the time before adding, ‘Elon and I had a great relationship. I don’t know if we will anymore.’

Musk shot back on X saying, ‘Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.’

At one point, Musk suggested he could form a new political party. But by late 2025, both sides appeared to strike a more conciliatory tone.

In September, the two were seen shaking hands at Charlie Kirk’s memorial service in a box at State Farm Stadium in Glendale, Arizona.

Musk was also seen at a White House dinner in November as Trump hosted Saudi Crown Prince Mohammed bin Salman. 

Elon Musk seen at black-tie White House dinner

FOX Business’ Edward Lawrence also asked Trump at a cabinet meeting on Dec. 2 if Musk was ‘back in [his] circle of friends’ after their falling out.

‘Well, I really don’t know. I mean, I like Elon a lot,’ Trump replied.

Fox News Digital has reached out to the White House for comment.


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Venezuela still owes US energy companies billions as Trump calls for new investment

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As President Donald Trump  vows to return U.S. energy investment to Venezuela, the Latin American country remains on the hook for billions of dollars owed to American energy companies following years-old legal battles over oil contracts.

Once a key supplier to global oil markets, Venezuela reshaped its relationship with international energy companies in the mid-2000s, as then-President Hugo Chávez tightened state control over the oil industry.

Between 2004 and 2007, Chávez effectively forced foreign companies to renegotiate their contracts with the government. The new terms sharply reduced the role and profits of private firms while strengthening Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA).

The move drove some of the world’s largest oil companies out of the country.

ExxonMobil and ConocoPhillips exited Venezuela in 2007 and later filed claims against the government in international arbitration courts. Those courts ultimately ruled in favor of the companies, ordering Venezuela to pay ConocoPhillips more than $10 billion and ExxonMobil more than $1 billion.

While precise figures are difficult to verify since Venezuela has not published comprehensive debt statistics in years, the International Monetary Fund estimates the country’s economy will total about $82.8 billion in 2025. 

Debt levels, however, stand at nearly 200% of that total, meaning Venezuela owes nearly two dollars for every dollar it produces. 

On top of that, Venezuela has failed to repay about $60 billion in bonds, with total foreign debt rising to roughly $150 billion when loans from its top financial bankers, including Russia and China, are included.

PDVSA also issued a bond that was supposed to be repaid in 2020, backed by a majority ownership stake in U.S.-based refiner Citgo as collateral. The state-run oil company later defaulted on that payment, putting Citgo in the legal crosshairs of creditors seeking to recover billions they are owed.

The cash-strapped country, which sits atop of the globe’s largest oil reserves, has paid only a fraction of those awards.

Chevron, however, remained in the country, becoming the only U.S. energy company still operating in Venezuela amid years of sanctions, economic collapse and political turmoil.

In a statement to Fox News Digital, Chevron said the firm was following ‘relevant laws and regulations’ but declined to comment on future investment plans in Venezuela.

‘Chevron remains focused on the safety and well-being of our employees, as well as the integrity of our assets,’ the statement added.

On Saturday, Trump told reporters at Mar-a-Lago that he wanted U.S. oil companies to ‘spend billions of dollars, fix the badly broken oil infrastructure and start making money for the country.’

He added that the United States ‘built Venezuela’s oil industry with American talent, drive and skill,’ and said that once the country’s energy sector is revived, the U.S. would sell that oil to markets around the world.

Venezuela’s heavy financial liabilities underscore the hurdles U.S. energy companies would face in committing new investment, despite Trump’s pledge to reengage.


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JONATHAN TURLEY: Why Trump went off script on Venezuela and why it won’t matter

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It can fairly be said that the most precarious jobs in the world are those of a golf ball collector at a driving range, a mascot at a Chuck E. Cheese and a Trump administration lawyer.

That was evident at the press conference yesterday as President Donald Trump blew apart the carefully constructed narrative presented earlier for the seizure of Venezuelan President Nicolás Maduro and his wife, Cilia Flores. Some of us had written that Trump had a winning legal argument by focusing on the operation as the seizure of two indicted individuals in reliance on past judicial rulings, including the decisions in the case of former Panamanian dictator Manuel Noriega.

Secretary of State Marco Rubio and Air Force Gen. Dan Caine, chairman of the Joint Chiefs of Staff, stayed on script and reinforced this narrative. Both repeatedly noted that this was an operation intended to bring two individuals to justice and that law enforcement personnel were part of the extraction team to place them in legal custody. Rubio was, again, particularly effective in emphasizing that Maduro was not the head of state but a criminal dictator who took control after losing democratic elections.

However, while noting the purpose of the capture, Trump proceeded to declare that the United States would engage in nation-building to achieve lasting regime change. He stated that they would be running Venezuela to ensure a friendly government and the repayment of seized U.S. property dating back to the government of Maduro’s mentor and predecessor, Hugo Chávez.

This city is full of self-proclaimed Trump whisperers who rarely score above random selection in their predictions. However, there are certain pronounced elements in Trump’s approach to such matters. First, he is the most transparent president in my lifetime, with prolonged (at times excruciatingly long) press conferences and a brutal frankness about his motivations. Second, he is unabashedly and undeniably transactional in most of his dealings. He is not ashamed to state what he wants the country to get out of the deal.

In Venezuela, he wants a stable partner, and he wants oil.

Chávez and Maduro had implemented moronic socialist policies that reduced one of the most prosperous nations to an economic basket case. They brought in Cuban security thugs to help keep the population under repressive conditions, as a third fled to the United States and other countries.

After an extraordinary operation to capture Maduro, Trump was faced with socialist Maduro allies on every level of the government. He is not willing to allow those same regressive elements to reassert themselves.

The problem is that, if the purpose was regime change, this attack was an act of war, which is why Rubio struggled to bring the presser back to the law enforcement purpose. I have long criticized the erosion of the war declaration powers of Congress, including my representation of members of Congress in opposition to Obama’s Libyan war effort.

The fact, however, is that we lost that case. Trump knows that. Courts have routinely dismissed challenges to undeclared military offensives against other nations. In fairness to Trump, most Democrats were as quiet as church mice when Obama and Hillary Clinton attacked Libya’s capital and military sites to achieve regime change without any authorization from Congress. They were also silent when Obama vaporized an American under this ‘kill list’ policy without even a criminal charge. So please spare me the outrage now.

My strong preferences for congressional authorization and consultation are immaterial. The question I am asked as a legal analyst is whether this operation would be viewed as lawful. The answer remains yes.

The courts have previously upheld the authority of presidents to seize individuals abroad, including the purported heads of state. This case is actually stronger in many respects than the one involving Noriega. Maduro will now make the same failed arguments that Noriega raised. He should lose those challenges under existing precedent. If courts apply the same standards to Trump (which is often an uncertain proposition), Trump will win on the right to seize Maduro and bring him to justice.

Maduro

But then, how about the other rationales rattled off at Mar-a-Lago? In my view, it will not matter. Here is why:

The immediate purpose and result of the operation was to capture Maduro and to bring him to face his indictment in New York. That is Noriega 2.0. The administration put him into custody at the time of extraction with law enforcement personnel and handed him over to the Justice Department for prosecution.

The Trump administration can then argue that it had to deal with the aftermath of that operation and would not simply leave the country without a leader or stable government. Trump emphasized, ‘We’re going to run the country until such time as we can do a safe, proper and judicious transition.’

I still do not like the import of those statements. Venezuelans must be in charge of their own country and our role, if any, must be to help them establish a democratic and stable government. Trump added, ‘We can’t take a chance that somebody else takes over Venezuela that doesn’t have the good of the Venezuelan people in mind.’

The devil is in the details. Venezuelans must decide who has their best interests in mind, not the United States.

However, returning to the legal elements, I do not see how a court could free Maduro simply because it disapproves of nation-building. Presidents have engaged in such policies for years. The aftermath of the operation is distinct from its immediate purpose. Trump can argue that, absent countervailing action from Congress, he has the authority under Article II of the Constitution to lay the foundation for a constitutional and economic revival in Venezuela.

He will leave it to his lawyers to make that case. It is not the case that some of us preferred, but it is the case that he wants to be made. He is not someone who can be scripted. It is his script and he is still likely to prevail in holding Maduro and his wife for trial.


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