RUTHFULLY YOURS

Over the past nine months, Donald Trump’s cage match with the Washington press corps has turned into an unedifying national spectacle. Too often, the serious business of the nation has been pushed aside so that the press and Mr. Trump could go tit for tat, like children on a schoolyard. On Thursday, an adult finally stepped into the room.

John Kelly, Mr. Trump’s chief of staff and a retired four-star general, addressed White House reporters on this week’s dispute between the press and the President. That is the controversy around Mr. Trump’s call to the mother of a U.S. soldier who was killed during an ambush in Niger recently.

As anyone who follows media reports knows, the President’s call to this mother grew into a personal feud between Mr. Trump and a Democratic Congresswoman who disclosed what the President said. It then produced long newspaper reports examining the President’s relationship with every identifiable Gold Star family during his term.

It took awhile for Mr. Kelly to get around to talking about that phone call. Instead, he spent some time offering what we in journalism—or anyone purporting to be engaged in a serious line of work—would call context. Mr. Kelly described what happens when a U.S. soldier or Marine—“the best 1% this country produces”—gets killed in action. What he described was a military process that is graphic, emotionally intense and, most of all, untouchable.

Untouchable, as Mr. Kelly made clear, in the sense that what has happened is so grave, so personal and so difficult that the reality of pushing through it comes down to an encounter between the fallen soldier’s family, the officer who informs them and, in time, support from those who served alongside their son or daughter.

Mr. Kelly explained that a personal call from the President is in fact not what families expect or want. But it has become something of a presidential tradition, and Mr. Trump asked Mr. Kelly what he should say.

Mr. Kelly related what his friend and “my casualty officer,” Marine General Joseph Dunford, told him when relating that Mr. Kelly’s own son had been killed in Afghanistan: “He said, Kel, he was doing exactly what he wanted to do when he was killed. He knew what he was getting into by joining that 1%. He knew what the possibilities were because we’re at war.”

That, essentially, is what Mr. Trump said to the Gold Star mother, no doubt less eloquently. Standing in the White House press room, reflecting on a political spat over a dead soldier, Mr. Kelly said, “I thought at least that was sacred.” His remarks are a rebuke to the Congresswoman for politicizing a private phone call, and to the press corps for attempting to turn grief and sacrifice into a hammer against Donald Trump—who, as usual, made things worse by lashing out in response.

John Kelly made a lot of people look small Thursday. The man who led soldiers in combat in Iraq described spending an hour this week walking in Arlington Cemetery, collecting his thoughts and looking at headstones, some with names of Marines who Mr. Kelly said were there because they did what he had told them to do.

Surely there is a sense in which the continuing political life of Washington is possible because of that sacrifice. That was John Kelly’s point. It would be nice to think the rest of the city could get it.

The largest proxy battle in U.S. history ended last week in a near tie, leaving Procter & Gamble without the clear support of its shareholders and activist shareholder Nelson Peltz without a board seat.

P&G’s three largest shareholders split their votes: Vanguard sided with P&G, while State Street and BlackRock voted almost all their shares for Mr. Peltz. The stakes held by these giant index funds were so large that had any of them voted differently it would have changed the outcome—either a clear victory for Mr. Peltz or a clear mandate for P&G management.

This power dynamic illustrates the enormous influence that the three largest index-fund firms (together with other passive institutional investors) have acquired over such contests—and helps explain an intensifying debate over where their allegiances should lie. On one side is a small class of legal, banking and public relations professionals who advise underperforming corporations. On the other are the activist investors who seek to hold those corporations accountable.

There is a fair debate to be had about the appropriate balance of power between public corporations and their shareholders. But the debate has been badly skewed by a false narrative. “Anti-activist” advisers have attempted to drive a wedge between activist investors and index funds by suggesting that activists are interested only in short-term gains at the expense of long-term value. This divisive framing is objectively false and has done harm to the goal of generating sustainable returns for all investors.

For starters, all of a company’s shareholders are more aligned with each other than they are, say, with a group paid to defend corporations from shareholder challenges. Index funds and activist investors share the goal of generating returns for their investors, even if they go about it in different ways.

The primary idea behind passive index-fund investing is the efficient-market hypothesis: Markets are said to be efficient because millions of informed investors continuously think about, research and analyze companies, markets and securities. Thus, all possible information and insight is said to be always contained in securities’ prices at all times.

But passive investing is reducing the percentage of active managers to the point where they may actually become the minority in a few years. So who is going to do the work that theoretically creates efficient markets?

Activist investing provides one possible answer. Equity activism means using your voice and voting rights to improve companies in ways that maximize value for all shareholders. Seen in that light, index funds should consider activist investors to be natural allies.

Some index-fund firms have begun to focus on voting, governance and the potential benefits of activism. They’ve deployed teams of smart, honest professionals to promote best practices across their firms’ entire holdings. Certain aspects of corporate governance as a whole have improved—in some cases meaningfully—thanks in part to these initiatives.

On a company-specific level, however, with thousands of companies to be evaluated, it is impossible for these teams to do the kind of comprehensive financial and operational analysis required to identify corporate situations in need of change.

Activist investors can play this critical role, so long as the governance teams at large passive investing firms are willing and able to evaluate activists’ ideas on their merits. Unfortunately, as soon as an activist shows up at an underperforming company with an idea for creating value, the company’s advisers frequently seek to make the debate about time horizons. Index-fund firms are encouraged to look with suspicion at any idea whose benefits would crystallize in the near term—regardless of whether the idea represents the best possible alternative for shareholders in the long run as well. CONTINUE AT SITE

Washington is obsessed with the word “collusion” but has little understanding of its true meaning. The confusion might explain why D.C. has missed the big story of collusion between Fusion GPS and the Democratic Party.

To read the headlines, a poor, beleaguered opposition-research firm was humiliated and constitutionally abused this week by partisan Republicans on the House Intelligence Committee. Fusion’s lawyers sent a 17-page letter to the committee’s chairman, Rep. Devin Nunes, accusing him of misdeeds, declaring his subpoenas invalid, and invoking a supposed First Amendment right to silence. Yet the firm’s founders, the story went, were hauled in nonetheless and forced to plead the Fifth. “No American should experience the indignity that occurred today,” Fusion’s lawyer, Joshua Levy, declared.

Fusion is known as a ruthless firm that excels in smear jobs, but few have noticed the operation it’s conducting against the lawmakers investigating it. The false accusations against Mr. Nunes—that he’s acting unethically and extralegally, that he’s sabotaging the Russia probe—are classic.

This is a firm that in 2012 was paid to dig through the divorce records of a Mitt Romney donor. It’s a firm that human-rights activist Thor Halvorssen testified was hired to spread malicious rumors about him. It’s a firm that financier Bill Browder testified worked to delegitimize his efforts to get justice for Sergei Magnitsky, a lawyer beaten to death in a Russian prison.

It’s the firm behind the infamous “dossier” accusing Donald Trump of not just unbecoming behavior but also colluding with Russia. Republicans are investigating whether the Fusion dossier was influenced by Russians, and whether American law enforcement relied on that disinformation for its own probe.

But Fusion’s secret weapon in its latest operation is the Democratic Party, whose most powerful members have made protecting Fusion’s secrets their highest priority. Senate Democrats invoked a parliamentary maneuver in July to block temporarily Mr. Browder’s public testimony. Rep. Adam Schiff, the Democratic ranking member on the Intelligence Committee, has been engineering flaps to undercut and obstruct Mr. Nunes’s investigation. Democrats on the House Ethics Committee have deep-sixed what was meant to be a brief inquiry to clear Mr. Nunes so as to keep him sidelined.

Then there is the intel committee’s meeting this week. Despite the spin, forcing Fusion to appear was Republicans’ only recourse after months of stonewalling. Fusion’s letter ludicrously claimed that Mr. Nunes’s subpoenas were invalid, which essentially forced the committee to show otherwise. It was a question of authority.

Florida Rep. Tom Rooney put the Fusion attendees through a series of questions not out of spite but to clarify finally just what topics the firm is refusing to talk about. The Fifth Amendment doesn’t provide protection against answering all questions. It only protects against providing self-incriminating evidence. It is therefore revealing that Fusion took the Fifth on every topic—from its relationship with British spook Christopher Steele, to the history of its work, to its role in the dossier.

The untold story is the Democrats’ unprecedented behavior. Mr. Rooney had barely started when committee staffers for Mr. Schiff interrupted, accused him of badgering witnesses, and suggested he was acting unethically. Jaws dropped. Staff do not interrupt congressmen. They do not accuse them of misbehavior. And they certainly do not act as defense attorneys for witnesses. No Democratic lawmakers had bothered to come to the hearing to police this circus, and Mr. Rooney told me that he “won’t be doing any more interviews without a member from the minority present.”

Private-sector lawyers also tend not to accuse congressmen of unethical behavior, as Mr. Levy did in his letter to Mr. Nunes. But Fusion’s legal eagle must feel safe. He’s former general counsel to the Senate’s minority leader, Chuck Schumer. He has also, I’m told by people familiar with the committee’s activities, more than once possessed information that he would have had no earthly means of knowing, since it was secret committee business. Consider that: Democratic members of Congress or their staff providing sensitive details of an investigation to a company to which the committee has given subpoenas. CONTINUE AT SITE

As he prepared to collect a $500,000 payday in Moscow in 2010, Bill Clinton sought clearance from the State Department to meet with a key board director of the Russian nuclear energy firm Rosatom — which at the time needed the Obama administration’s approval for a controversial uranium deal, government records show.

Arkady Dvorkovich, a top aide to then-Russian President Dmitri Medvedev and one of the highest-ranking government officials to serve on Rosatom’s board of supervisors, was listed on a May 14, 2010, email as one of 15 Russians the former president wanted to meet during a late June 2010 trip, the documents show.
“In the context of a possible trip to Russia at the end of June, WJC is being asked to see the business/government folks below. Would State have concerns about WJC seeing any of these folks,” Clinton Foundation foreign policy adviser Amitabh Desai wrote the State Department on May 14, 2010, using the former president’s initials and forwarding the list of names to former Secretary of State Hillary Clinton’s team.

The email went to two of Hillary Clinton’s most senior advisers, Jake Sullivan and Cheryl Mills.

The approval question, however, sat inside State for nearly two weeks without an answer, prompting Desai to make multiple pleas for a decision.

“Dear Jake, we urgently need feedback on this. Thanks, Ami,” the former president’s aide wrote in early June.

Sullivan finally responded on June 7, 2010, asking a fellow State official “What’s the deal w this?”

The documents don’t indicate what decision the State Department finally made. But current and former aides to both Clintons told The Hill on Thursday the request to meet the various Russians came from other people, and the ex-president’s aides and State decided in the end not to hold any of the meetings with the Russians on the list.

Bill Clinton instead got together with Vladimir Putin at the Russian leader’s private homestead.

“Requests of this type were run by the State Department as a matter of course. This was yet another one of those instances. Ultimately, President Clinton did not meet with these people,” Angel Urena, the official spokesperson for the former president, told The Hill.