PROGRAMMING NOTE: We’ll be off for Thanksgiving this Thursday and Friday but back to our normal schedule on Monday, Nov. 27. With Daniel Lippman WHAT'S NEXT AFTER OPENAI WHIPLASH: Last week’s sudden sacking — and last night’s sudden rehiring — of OpenAI CEO Sam Altman has captivated Silicon Valley and Washington alike, but while many questions remain as to what the whiplash means for the push to craft a regulatory framework for artificial intelligence, the events of the past five days don’t have K Street feeling any additional urgency in their advocacy, lobbyists told PI. — “I'm not sure that radically upends any of the discussion around policy, it more affects the atmospherics around how that policy now is executed,” said one person who works in the industry, who was granted anonymity to discuss fluid developments. — Other lobbyists working on AI policy told your host that they expect policymakers to begin looking at the issue with more of an eye toward corporate governance considerations. Up until now, lawmakers “have been more focused on understanding AI, and then when they talked about governance and transparency and accountability, those were terms they used towards the [large language] models” AI companies are perfecting, one tech lobbyist told PI. — “Now, I think those same questions on governance, transparency, accountability, auditability are now going to be put more towards the AGI companies that are developing large language models,” they said. — In addition, the close relationship between OpenAI and investor Microsoft — which was only reaffirmed over the past week — may get a closer look by regulators, potentially as part of a broader focus on AI startups and their corporate partners, lobbyists said. While OpenAI and Microsoft have always sent separate representatives to AI forums on the Hill, the tech lobbyist noted, “I think they're gonna be viewed as much more intertwined in their relationship going forward.” — Industry lobbyists were torn, however, as to how Altman’s standing with lawmakers might be impacted by his short-lived ouster — with some suggesting that his new baggage might give some members new pause about their close embrace of the tech leader, while others pointed to Altman’s ultimate return to OpenAI as a series of events that may only strengthen his position as a leading voice in the debate over AI policy. — “He prevailed over his board and won the day” in terms of the philosophical argument at the center of his split with OpenAI’s board, “and remains as the face of one of the leading large language model companies,” the industry source said. “That doesn't project weakness to me,” they added, especially compared to constraints Altman may have faced if he remained with Microsoft. — “I think there will be a … different set of questions for him that he hasn't been asked before,” the tech lobbyist told PI. “But I think people respect the fact that he was seemingly transparent and honest about the process as it unfolded throughout this last week.” Happy Wednesday and welcome to PI. We’ll be off for the rest of the week for Thanksgiving, but send tips for me to chase down when we return: coprysko@politico.com. And be sure to follow me on X, the platform formerly known as Twitter: @caitlinoprysko. DEMAND JUSTICE REPORTS THEFT OF FUNDS: A former staffer at the liberal judicial advocacy group Demand Justice allegedly made off with potentially hundreds of thousands of dollars from the nonprofit before being fired last year, the group said. — The theft was disclosed in the group’s most recent tax filings, which were shared exclusively with PI. The filings are slim on details, but disclose $291,609 in expenses attributed to “loss.” Further down, the documents explain that “in 2022, the organization discovered misuse of organization funds by its former finance director.” — They go on to note that the staffer was terminated last October and that Demand Justice “brought aboard a new accounting firm and took steps to seek recovery of the funds,” but the filings don’t specify how much of the group’s losses are attributed to the theft by the former employee, who PI was not immediately able to identify. — “The matter has been referred to the U.S. Attorney’s Office, and Demand Justice is working to recover the funds,” said Colin Diersing, a spokesperson for Demand Justice. Diersing declined to comment further about the details of the incident, citing its referral to law enforcement. — The staffer’s alleged theft aside, Demand Justice and its charitable arm Demand Justice Initiative brought in nearly $8.5 million in 2022 between the two organizations, according to the tax filings. The groups both started out under the umbrella of one of the most deep-pocketed dark money networks on the left, but split off from the network in 2021. — Both nonprofits aim to serve as a counterweight to well-financed conservative judicial advocacy groups like the Federalist Society, and Demand Justice’s 2022 filings shed light on how much money the group spent pushing for the confirmation of President Joe Biden’s Supreme Court nominee Ketanji Brown Jackson. Demand Justice pledged to spend at least $1 million, but its tax returns show the group dumped much more than that — $1.8 million in all — into the campaign. — Demand Justice reported spending another $2.3 million on a program to push various judicial reforms, while both organizations reported running programs to improve diversity and develop diverse talent pipelines for the federal bench. — Demand Justice brought in the entirety of its revenues last year from just three anonymous donors, the filings show, including one donor who gave the group $3 million and another who contributed $1.4 million. Demand Justice Initiative took in its revenues from four anonymous donors, including two donations of around $1.5 million and two of around $250,000. FIRING BACK: The White House is taking a shot at congressional Republicans after your host and Megan Wilson reported yesterday that top pharmaceutical lobby PhRMA gave a record donation to a nonprofit group aligned with House GOP leadership last year. — According to tax filings, PhRMA cut a $7.5 million check in 2022 to the American Action Network, a dark money group that supports House Republicans and spent millions on ads opposing Democrats’ proposals to allow Medicare to negotiate the price of certain drugs for the first time. An analysis by the campaign finance reform group Issue One found the $7.5 million gift was PhRMA’s largest ever to AAN. — “For decades, Big Pharma spent millions in lobbying to stop Medicare from negotiating drug costs on behalf of the American people. That lobbying defeated efforts by previous administrations to let Medicare negotiate these costs,” White House deputy press secretary Andrew Bates said in a memo shared first with PI, noting that Biden's predecessor and likely 2024 rival Donald Trump backed away from the same drug pricing fight while in office. — Biden and congressional Democrats, Bates boasted, “finally broke Pharma’s lobbying blockade in an unprecedented win for Americans” — though the drug pricing provisions signed into law in last year’s Inflation Reduction Act were much narrower than Democrats’ original proposals, in part thanks to a select few Democratic lawmakers supported by PhRMA-financed groups. — “Big Pharma is lashing out with every tool they have to stop this relief for the American people dead in its tracks, including with lawsuits backed by House Republicans who have sided with Pharma over families at every turn on this crucial issue,” Bates argued, adding that Republicans had also sought to repeal the drug pricing law. — “This Thanksgiving, leaders should be doing everything they can to give middle class families relief on the kitchen table issues that matter most to them, not conspiring with rich special interests to sell them out,” he added. GOTHAM CUTS TIES WITH LOBBYIST OVER VIRAL VIDEO: “Gotham Government Relations, a D.C.-based lobbying firm, has reportedly cut ties with a former Obama administration adviser after a video surfaced of him making anti-Palestinian remarks,” The Hill’s Olafimihan Oshin reports. — “‘Gotham Government Relations has ended all affiliation with Stuart Seldowitz, an individual who hasn’t contributed to our work in years,’ the lobbying firm said Tuesday on X, the social media platform formerly known as Twitter. “ — “A series of videos that surfaced online Tuesday purported to show Seldowitz harassing a New York City food vendor and hurling a slew of anti-Palestine comments and insults at the unidentified vendor. In one of the videos, Seldowitz appears to call him a ‘terrorist’ and makes other claims about the vendor and the Israel-Hamas conflict.” — “The video of his actions is vile, racist, and beneath the dignity of the standards we practice at our firm,” the firm said of the comments by Seldowitz, who previously served as acting director for the National Security Council South Asia Directorate in the Obama administration and joined Gotham last year.
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