Which rhetorical device is this?

While it could be colloquially considered wordplay or a pun, this is an example of antanaclasis (Silva Rhetoricae), or repeating a word or phrase in a different sense:

• defy in the idiom defy belief, meaning that it is difficult to believe the subject (politicians) acts that way (Merriam-Webster)
• defies in defies politicians, meaning that the newspaper confronts, resists, or withstands politicians (Merriam-Webster)

It’s called the “reversible raincoat” device. A more formal term is antimetabole.

Politicians eager to keep up with the latest fad need more than a flag pin this election season; the hottest accessory of the 2008 campaign is the reversible raincoat. That’s the nickname speechwriters have given to the rhetorical device in which words are repeated in transposed order, as with Churchill’s famous line: “Let us preach what we practice—let us practice what we preach.” The fancy Greek name for the trick is antimetabole, and it’s been cropping up in speeches by Democrats and Republicans alike.

https://slate.com/human-interest/2008/09/the-hottest-rhetorical-device-of-campaign-2008.html

It was also used by John F. Kennedy in his inaugural address several times.