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By Anna Palmer, Jake Sherman and Daniel Lippman

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Listen to today's Audio Briefing
DRIVING THE DAY
JUST POSTED ... NYT MAGAZINE'S MARK LEIBOVICH on PAUL RYAN: "NOT GOING THERE: The strange end of Paul Ryan's speakership": "Ryan announced in April that he would not be seeking re-election, ending a 20-year run in Congress that, for most of it, seemed to be on a straight-up trajectory. Ryan's official reason for leaving was that his 'family clock was ticking'' and he no longer wanted to be a 'weekend dad.' But it's easy to suspect otherwise, and not just because that is a clichéd excuse:

"Ambitious 48-year-old politicians at the peak of their powers don't suddenly just decide to quit because they've discovered that their teenage children are growing up fast back in Wisconsin. Ryan should, by rights, be riding out of town at the pinnacle of his starlit Washington career. Yet he remains a distinctly awkward match to a moment - and president - that seem certain to define much of his legacy." The story ... A preview of the magazine pages

THE SPECIAL ... IT'S ELECTION DAY IN OHIO'S 12TH CONGRESSIONAL DISTRICT ...

SOMETHING INCREDIBLY predictable is beginning to happen ahead of the Ohio election tonight: Republicans are dumping on Troy Balderson, their candidate. They say he didn't raise enough money, he had high negatives and was kind of a dud.

WHY ARE THEY DOING THIS? Because this race is tight. Anything short of a five- to seven-point win for Balderson over Danny O'Connor is an embarrassment, and could portend disaster for the GOP. And Republicans think, if they win, they're going to just eke it out.

FOR ALL THE COMPLAINING House Republicans do about their candidates, they refuse to get involved in primaries. Earlier this year, they dumped all over Rick Saccone, the Republican who eventually lost a race to Conor Lamb in Pennsylvania.

WHEN SENATE REPUBLICANS GOT A STRING of candidates they didn't like, MITCH MCCONNELL is fond of saying that he changed the business model and started weighing in in primaries on behalf of candidates that could win. HOUSE REPUBLICANS just complain after their candidate loses.

-- FLUB FROM LAST NIGHT ... TROY BALDERSON said "We don't want somebody from Franklin County representing us." Franklin County is a big part of this district.

-- INTERESTING TIDBIT, via The Guardian's Ben Jacobs in Zanesville, Ohio: "Balderson's aversion to talking to national outlets has been so pronounced that he only did his first interview with Fox News on Sunday, 48 hours before polls closed with a reporter who happened to be in the state." The Guardian

HOW TO THINK OF TONIGHT'S RESULT: Specials are a tough gauge of the atmosphere, because turnout isn't always as it should be. But this appears to be a pretty clean test of the political atmosphere. PRESIDENT DONALD TRUMP won this district by 11 points. PAT TIBERI, the former congressman who resigned a few months ago, rarely dipped below 55 percent.

BOTTOM LINE: It almost doesn't matter who wins tonight. If the political climate allows Democrats to make R+7 districts competitive, the battlefield in November is something approaching 80 seats. That's what Democrats said it would be earlier this cycle. Steven Shepard and Elena Schneider break down what the special election will tell us about the midterms.

Good Tuesday morning. THE PRESIDENT is still up in Bedminster, New Jersey. He has nothing on his public schedule except a dinner tonight with business leaders.

-- THE PRESIDENT, at 5:31 a.m.: "The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!"

-- LOTS OF EUROPEAN NATIONS do business with Iran, so this will be interesting.

SPOTTED: Transportation Secretary Elaine Chao arriving at gate 22 at DCA from a Delta flight from Minneapolis/St. Paul at 6:45 p.m. last night with two aides and her security team in tow ... Indian Ambassador to the U.S. Navtej Sarna at the Lafayette Room in the Hay-Adams yesterday at lunch.

A message from AARP:

What role will Hispanic voters over 50 play in Arizona this fall? Read POLITICO Magazine's new series "The Deciders" which focuses on this powerful voting bloc that could be the determining factor in turning Arizona blue.

MANAFORT TRIAL -- DARREN SAMUELSOHN emailed us this dispatch: "We're back at 9:30 a.m. Tuesday for Day 6 of the Manafort trial. Rick Gates continues his testimony, with Mueller's prosecutors telling the judge they expect about three more hours of direct questioning. Then we'll go to the cross-examination, which should certainly be interesting. Unclear how long that'll take. We also don't know who the Mueller team will call next.

"Tensions are flaring in the courtroom. Judge Ellis and Mueller prosecutor Greg Andres went at it over Andres' efforts to question Gates about his foreign travels while using his passport as a visual aid. Ellis is trying to speed things along and wanted to know why they needed to go down this path. It got a bit ugly and uncomfortable to watch as Andres tried to speak over Ellis.

"Ellis, meantime, took issue with the media in the room when several reporters bolted for the exits upon the first word Gates would be testifying on Monday. The same thing happened last week - also related to Gates - and he found it 'disruptive and mildly amusing.' But Monday's scamper was 'not amusing and equally more disruptive.' And he warned that any similar commotion could lead to the offending reporter being 'excluded' from the courtroom."

-- MORE COURTROOM DRAMA: "How Rick Gates drew 'betrayed' Paul Manafort's icy stare," by Darren Samuelsohn and Theo Meyer: "As Rick Gates testified to a packed courtroom in Alexandria, Virginia, on Monday, he carefully avoided making eye contact with his former business partner and mentor, Paul Manafort.

"But as Gates implicated himself and Manafort in multiple criminal acts, Manafort - who could spend the rest of his life in prison - fixed the cooperating witness with an icy glare. It was the most dramatic moment yet in the criminal trial of Manafort, President Donald Trump's former campaign chairman.

"Gates's testimony, which is central to special counsel Robert Mueller's bank and tax fraud case against Manafort, made vivid the rupture of a relationship that once involved exotic foreign travel and huge profits - but now pits Gates against his longtime boss in what one of their mutual acquaintances called a betrayal." POLITICO

-- "Manafort prosecution's frustration with judge leads to fiery clashes," by Josh Gerstein: POLITICO

WAPO'S BOB COSTA: "Giuliani preparing letter to Mueller expressing 'real reluctance' over obstruction questions": "Rudolph W. Giuliani, President Trump's lead attorney for the ongoing special counsel investigation, said Monday that Trump's legal team is planning to send a letter to special counsel Robert S. Mueller III this week that will largely rebuff Mueller's latest offer of a presidential interview that would include questions about possible obstruction of justice.

"'We have a real reluctance about allowing any questions about obstruction,' Giuliani said in an interview with The Washington Post when asked about the overarching theme of the letter. He said he and other Trump lawyers have been discussing the details of a draft version of the letter in recent days and hope to send it to Mueller 'sometime on Tuesday or Wednesday.' Giuliani said he expects the letter to 'continue the negotiations' rather than formally decline Mueller's request. 'The president still hasn't made a decision, and we're not going to make a final decision just yet,' he said." WaPo

TRUMP'S DEFENDERS -- "How Judicial Watch became Trump's favorite Mueller attack dog," by Andrew Restuccia: "Tom Fitton, the head of conservative group Judicial Watch, has made a career of suing the federal government over suspected bureaucratic corruption, irritating every president since Bill Clinton.

"But in Donald Trump, Fitton has found an enthusiastic booster - a president who, rather than bristling at Judicial Watch's frequent accusations of malfeasance throughout the government he oversees, welcomes the group's efforts to hold the 'deep state' accountable. ...

"People close to the president say he's come to see Fitton as one of the most effective critics of the Mueller probe. The president, who increasingly feels under attack from all sides, finds validation in Fitton's attacks on the investigation and his insistence that the national security community is unfairly targeting Trump. One White House adviser called him a 'hero.'" POLITICO

-- "Trump allies back fund for aides' legal defense in Mueller probe," by Kyle Cheney and Lorraine Woellert: "A legal defense fund created for the benefit of White House aides has largely relied on contributions from a handful of President Donald Trump's longtime friends and political allies in the first five months of its existence. Phillip Ruffin, a billionaire casino mogul who has worked with Trump and accompanied him to Moscow for the Miss Universe Pageant in 2013, contributed $50,000 in April, the documents show.

"Continental Resources, an oil shale company whose CEO, Harold Hamm, has advised Trump on policy, kicked in $25,000 in May. The largest donation in the most recent quarter came from Geoffrey Palmer, a Los Angeles developer who has been a large political contributor of Trump's. He contributed $100,000 in late June." POLITICO

2018 WATCH -- "Meet the Vermont CEO vying to be the nation's first transgender governor," by Ben Schreckinger in Manchester, Vermont: "Christine Hallquist leaned back in her swivel chair inside a private room at the Northshire bookstore and dialed up potential donors, trash-talking the plummeting approval numbers of Vermont's incumbent Republican governor and touting her chances against her Democratic rivals. 'It's clear it's for us to lose, which I won't, 'cause I'm disciplined,' she assured one prospective contributor of the upcoming primary.

"Beating her fellow Democrats and then defeating a sitting Vermont governor for the first time since 1962 are only the beginning. From there, Hallquist, a first-time candidate, plans to reverse the decline of rural Vermont and maybe even solve climate change." POLITICO

-- NYT'S DENISE LU and KATE ZERNIKE: "These Women Could Shatter Glass Ceilings in Governors' Races": NYT

-- WOMEN RULE: How will female candidates fare tonight? Elana Schor and Heather Caygle are tracking how well women are doing in the midterms. Send them your questions using #askPOLITICO on Twitter and they might answer them in a Q&A.

FOLLOW US -- on Facebook to get notified when we go live Wednesday around 2:30 p.m. and check out POLITICO's Women Rule Candidate Tracker for all the latest results.

SPY GAMES -- "A Top Syrian Rocket Scientist Is Blown Up, and Fingers Point at Mossad," by NYT's David M. Halbfinger and Ronen Bergman in Jerusalem: "Aziz Asbar was one of Syria's most important rocket scientists, bent on amassing an arsenal of precision-guided missiles that could be launched with pinpoint accuracy against Israeli cities hundreds of miles away. He had free access to the highest levels of the Syrian and Iranian governments, and his own security detail. He led a top-secret weapons-development unit called Sector 4 and was hard at work building an underground weapons factory to replace one destroyed by Israel last year.

"On Saturday, he was killed by a car bomb - apparently planted by Mossad, the Israeli spy agency. It was at least the fourth assassination mission by Israel in three years against an enemy weapons engineer on foreign soil, a senior official from a Middle Eastern intelligence agency confirmed on Monday." NYT

A message from AARP:


Social Security is the most important issue for voters over 50 in Arizona this fall. View the latest POLITICO/AARP poll results at politico.com/thedeciders

FACT CHECK ... "Trump wildfire tweets spark bewilderment about California water: The president has blamed 'bad environmental laws' for making California's fires worse," by Annie Snider, Carla Marinucci and Jeremy B. White: "[E]xperts who make their living studying California's water system reacted for the second consecutive day with a communal groan of exasperation. Peter Gleick of the Pacific Institute, one of the state's foremost experts on how the state manages its water, issued a tweet calling Trump's latest missive 'nuts' after labeling the president's initial tweet 'gobbledygook bullsh--.'

"In an email to POLITICO, Gleick noted that the water that flows from California's rivers into the ocean is what remains after cities and farms take their gulp - and that those flows are critical to shoring up ecosystems that, in some parts of the state, are teetering on the brink of collapse. 'Trump's tweets last night and today show a profound misunderstanding about water, fires, California environmental policy, and of course, climate change,' Gleick said, adding that the 'idea that somehow state water policies are leading to a shortage of water for fighting the fires is too stupid to rebut.'" POLITICO

-- "Mendocino Complex fire now largest in California history, capping destructive year," by LA Times' Joseph Serna, James Queally and Alene Tchekmedyian: LAT

COMING ATTRACTIONS -- Anna and Jake, along with California Playbooker Carla Marinucci, are heading to Los Angeles Aug. 16 at 8:30 a.m. for a Playbook Elections event featuring GAVIN NEWSOM, the Democratic candidate for governor, and California Republican Party Chairman JIM BRULTE. RSVP

TRANSITION -- JOHN SHINKLE, a photographer and one of the few remaining original POLITICOs, is leaving to join U.S. Senate Photographic Services.
PLAYBOOK READS


PHOTO DU JOUR: Firefighters battle a major blaze in Lake County, California, on Monday, one of several around the state. | Kent Porter/The Press Democrat via AP Photo

KNOWING ELI MILLER -- MNUCHIN'S RIGHT HAND -- Bloomberg's Saleha Mohsin: "Seven years ago, Eli Miller was an unpaid intern giving tours on Capitol Hill. Now, he's in the middle of an effort to avert a full-blown trade war between the world's two largest economies.

"As chief of staff and right-hand man to Treasury Secretary Steven Mnuchin, Miller's helping to work back-channels with Beijing in an effort to restart trade talks, two people familiar with the matter said.

"The China talks are a test for Miller, 35, a political insider who channels President Donald Trump's instincts but lacks experience in diplomacy, business and the inner workings of Treasury. His performance will contribute to the outcome of a confrontation that may shape the future of many of America's key industries, not to mention his own career; one predecessor, Sheryl Sandberg, is now chief operating officer at Facebook Inc." Bloomberg

BUSINESS BURST -- WSJ: "DOJ Says Judge Ignored 'Economics, Common Sense' in Allowing AT&T-Time Warner Deal," by Brent Kendall: WSJ

K-FILE -- "Mike Pence's moral case for removing a president from office," by CNN's Andrew Kaczynski: "Vice President Mike Pence once argued the president of the United States should be held to the highest moral standards to determine whether he should resign or be removed from office. Pence made the argument in two columns in the late 1990s, where he wrote that then-President Bill Clinton's admission of an affair with a White House intern and prior lies to the public about the matter, possibly under oath, meant Clinton should be removed from office. Yet Pence also moved beyond the specifics of the Clinton case: He made a far-reaching argument about the importance of morality and integrity
to the office of the presidency." CNN

REMEMBERING PAUL LAXALT -- Steve Tetreault in the Las Vegas Review-Journal: "Paul Dominique Laxalt, a sheepherder's son who became Nevada governor, achieved national prominence as a U.S. senator, modernized the state's gaming industry and helped redefine the Republican Party, died Monday. He was 96. ... The son of Basque immigrants who settled in Carson City early in the 1900s, Laxalt served as governor from 1967 to 1971, was a U.S. senator from 1974 to 1986 and supported establishment of Nevada's first community colleges and its first medical school. ... Paul Laxalt is the grandfather of current Nevada governor candidate Adam Paul Laxalt." Review-Journal

REMEMBERING MARGARET HECKLER -- WaPo's Matt Schudel: "Margaret M. Heckler, an eight-term Republican congresswoman from Massachusetts who later became an embattled secretary of the Department of Health and Human Services under President Ronald Reagan before serving as U.S. ambassador to Ireland, died Aug. 6 at a hospital in Arlington, Va. She was 87. The cause was cardiac arrest, said her daughter-in-law, Kim Heckler. Throughout much of her career, Ms. Heckler was a groundbreaking figure who often forged her way in law and politics as one of the few women in the male-dominated fields." WaPo

A message from AARP:


Will voters over 50 decide the 2018 midterm elections? Visit politico.com/thedeciders to learn more!

MEDIAWATCH -- "Fox News addresses host's response to racist comments," by Jason Schwartz: "It was not a drill. Saturday night on Jesse Watters' show was the moment Fox News CEO Suzanne Scott had instructed her top producers to be prepared for, in hopes of stemming the damage caused by any obviously racist or offensive comments made on-air. Watters was discussing the controversy that had developed around old tweets by a recent New York Times editorial board hire, Sarah Jeong, with his 'Watters World' guest, the comedian and social commentator Terrence K. Williams. During the conversation, Williams made a series of racist comments, criticizing The Times and Jeong. ...

"The episode came not long after a mid-June meeting in which Scott assembled her top producers and told them that they would be held accountable for any inflammatory comments made by hosts or panelists, and that it was their job to head off inappropriate remarks.

"Scott emphasized in the meeting that if something offensive was said on-air, the producers needed to get in the host's ear and make sure it was addressed immediately. In this case, that did not happen with Watters. A Fox News spokesperson said on Monday that the issue was being addressed with the producers and talent involved. The spokesperson declined to offer further details on what that entailed." POLITICO

-- BUZZFEED'S STEVEN PERLBERG: "Jared Kushner Used To Personally Order The Deletion Of Stories At His Newspaper": "Jared Kushner personally ordered a software developer at his newspaper to remove stories that were critical of his friends and real estate peers. Now a senior White House adviser and son-in-law to President Donald Trump, Kushner in 2012 went around the editorial leaders at the New York Observer - the newspaper he owned and operated - to mandate the removal of a handful of articles from the website, according to emails obtained by BuzzFeed News.

"Kushner requested the removal of a 2010 story about a settlement between then-New York attorney general Andrew Cuomo and real estate firm Vantage Properties regarding allegations that the company had illegally forced tenants out of their apartments to raise rents.

"Kushner also ordered another 2010 article deleted about Vantage's top executive Neil Rubler. That story's URL suggests that Rubler had appeared on some sort of '10 worst landlords' list. The disappearing act included more mundane fare: a 2012 story about NBA Commissioner Adam Silver purchasing a $6.75 million apartment in a tony New York City building, the kind of item that privacy-conscious famous people often try to keep out of the real estate press. Silver and Kushner are friends, and the NBA commissioner praised Kushner in a 2016 New Yorker article for helping the league find space for a retail store." BuzzFeed
PLAYBOOKERS
BIRTHWEEK (was yesterday): Rebecca Kelly Slaughter, current F.T.C. commissioner and former chief counsel to Sen. Chuck Schumer (D-N.Y.), who was profiled in May in the NYT (h/t Annie Hall) ... (was Sunday): Kathy Rust

BIRTHDAY OF THE DAY: Mary Kathryn Covert Steel, director of corporate comms at AbbVie. A fun fact about MK: "I met my husband at the Starbucks on Capitol Hill. I had just moved to D.C. from Atlanta where I was working at The Coca-Cola Company, and fellow Southerner Amos Snead introduced me to a friend of his, Michael Steel. Our Starbucks meeting was very quick, and Michael was on his BlackBerry almost the entire time. A few months later, I ran into him at Capitol Lounge. Excited to see a familiar face, I ran up to him and said hello.

"He looked at me and said, 'I'm sorry, have we met?' Crushed, I swore to my mother that I was never going to date a man in Washington. A few months later, Michael asked me out on a group date (!), and with the encouragement of then-Minority Leader Boehner, asked me out on a real date a few weeks later ... and that was 10 years ago!" Playbook Plus Q&A

BIRTHDAYS: Special counsel Robert Mueller is 74 ... Jonathan Swan, national political reporter at Axios, is 33 ... Reason's Nick Gillespie is 55 ... Ron Christie is 49 (hat tip: Carol Danko) ... Matt Dornic, VP of comms and digital partnerships at CNN ... CNN's Dan Merica is 3-0 (h/t Monica Alba) ... Andrew Gradison ... John Mayo ... Maggie Goodspeed ... Ray Washburne, president of the Overseas Private Investment Corporation ... Axios media reporter Sara Fischer is 28 ... Politico's James Whitlock ... Elizabeth Brandler ... Alan Keyes is 68 ... Scott Stossel, editor of The Atlantic (h/t Annie Linskey) ... Dan Groch ... Kristin Leary ... Politico Europe's Hans von der Burchard ... Alisa
Wolking is 3-0 ... Kimberly Ellis, principal at Monument Policy Group ... Hollie Tracz of MSNBC media relations ... Jordan Heiliczer, gov't affairs director for AAHOA (h/t sister Zoe) ... Edelman's Jenn Lore London ... Susan Feeney, partner at GMMB ... Caitlin Legacki, VP of comms for corporate responsibility at JPMorgan Chase ...

... Brian Steel, EVP of PR for CNBC (h/t brother Patrick) ... Matt Mazonkey, government relations at Airbus (h/t Mitchell Rivard) ... Meredith Beaton Didier, COS at UNC ... Caroline Huddleston Haley ... Felicia Knight ... Daniel Lerner ... George Kelemen, CEO/president of the Texas Retailers Association (h/t Angela Shipp) ... Bruce Friedrich, co-founder and executive director of The Good Food Institute ... UT historian H.W. Brands is 65 ... Breanne Deppisch of WaPo's Daily 202 (h/ts Riley Brands) ... Côte d'Ivoire turns 58 on its Independence Day ... Eric Dinallo is 55 ... George Kelemen ... Andrew DeSouza ... Chad Phillips (h/t Eli Yokley) ... TJ Londagin ... Alexis Glick ... Kirsten
Borman ... Matt Lehner ... former Louisiana Gov. Edwin Edwards is 91 ... Ryan Pettit ... Anthony Ratekin ... Daryn Frischknecht ... Tim Foster ... Aissa Canchola ... Tamika Day ... Kimberly Willingham Hubbard ... Meredith Griffanti ... Allyn Brooks-LaSure ... Bill Lawrence ... Juven Jacob ... Cynthia Wieland-Meyer ... Kim Rogers ... Kim Molstre (h/ts Teresa Vilmain)

A message from AARP:

Democrats have been expecting Barry Goldwater's home state of Arizona to flip blue for years, yet it remains red. Will 2018 be the election cycle that tips the scales? The latest issue of POLITICO Magazine's new series "The Deciders," takes a deep dive into Maricopa County Arizona to understand the power of Hispanic voters over 50. With two crucial Arizona races in play, will it be voter turnout in this group, or identity politics that decides the day and what issues matter most to this influential voting bloc? Visit politico.com/thedeciders to read the latest editorial package.

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