Browsing the blog archives for December, 2017.

Mueller Subpoenas Deutsche Bank

Trump Maladministration

Shit’s getting real, fast. Mueller flipped Flynn and is now digging into Trump’s personal finances.

Russ Choma and Andy Kroll at Mother Jones:

Now it’s getting personal. On Tuesday, a German newspaper reported that Robert Mueller, the special counsel investigating the Trump-Russia scandal, has issued a subpoena to Deutsche Bank, which Trump owes hundreds of millions of dollars, making this financial behemoth Trump’s largest creditor. This summer, Trump said that he considered his family’s personal finances a “red line” that Mueller should not cross. But by targeting Deutsche Bank with a subpoena for more information about Trump’s accounts, Mueller may well be crossing that line. More important perhaps, he is digging into a massive Trump conflict of interest and one of the biggest questions regarding Trump’s business empire: why would this German bank lend him so much money when US banks wouldn’t?

I wouldn’t say Mueller “may well” be crossing that line; I’d say he definitely is. Deutsche Bank is not a “U.S.” bank, strictly speaking, but it does a lot of business in the U.S. and has a big headquarters in New York City. You know, where Trump used to live.

Deutsche Bank is important to Trump because U.S. banks won’t work with him. He’s a bad risk. If Deutsche Bank hadn’t extended a line of credit to him, he’d be washed up today. And today it’s said that Trump owes Deutsche Bank hundreds of millions of dollars. But the question is, why would Deutsche Bank lend him money? What’s in it for them?

Josh Marshall:

Why Deutsche Bank still works with Trump (they financed most of the DC Trump hotel project, for instance) is a basic question running through the Russia story. I’ve had a couple theories. One is simply this: that years ago Trump realized that he couldn’t be shut out by every major bank. He needed at least one major lender who would still do business with him and thus made sure not to cheat or gouge them as actively as he did the others. (This wasn’t terribly credible since he got in a legal tangle with DB a few years ago demanding that he be released from his debt to the bank and be reimbursed because of the banks role in the 2008 financial crisis. Yes, he sued saying he should be released from repaying a loan.) The other possibility is that there was some extra-economic factor that kept them lending.

Along those lines many have pointed out that lots of Russian money goes through Deutsche Bank and indeed the bank has been repeatedly fined for Russian money laundering. The Deutsche Bank subpoena is certainly about probing the President’s financial ties to Russia, which are as we know extensive.

A hypothesis that explains all of the known facts: Trump is personally in debt to Russians up to his comb-over. Putin could ruin him politically and financially just by giving the word, which means Trump as POTUS must tread carefully to not overly piss off Putin. And of course his power over Trump gave Putin incentive to try to manipulate the election in Trump’s favor.

We may learn eventually that something else is going on, but so far that’s where it all seems to be pointing. Even if my hypothesis is proved wrong, it’s a safe bet that Trump’s finances, including his taxes, won’t stand up to legal scrutiny.

Also, in other news: Now Southern California is on fire.

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How Can We Impeach Thee? Let Me Count the Ways

Trump Maladministration

A quick rundown …

Obstruction of Justice.  There’s a hell of an obstruction of justice case against Trump just based on what he’s done publicly. The obstruction of justice case was a slam dunk months ago, in fact. And he’s too stupid to stop digging that hole. So now it’s like a slam dunk and a whole bunch of free throws. One of his lawyers has put out the bizarre argument that presidents cannot obstruct justice. But Trump’s attorney general, Jeff “Stars and Bars” Sessions, is on record as having a different opinion. So good luck getting out of that one, Donny.

The Emoluments Clause. The Constitution says that U.S. officials may not may not accept money, gifts or titles of nobility from foreign governments, and that no monetary benefit (other than salary) should be derived by holding office.

But what happens when a president has businesses on the side with foreign governments? Trump had promised his business would not make new deals with foreign governments while he is in office, but he keeps breaking that promise. And we’re in new territory here.

Anita Kumar reported for McClatchy today that

A construction company owned in part by the governments of Saudi Arabia and South Korea plans to build a Trump-branded luxury resort development in Indonesia despite a vow from Donald Trump that his family business would not make any deals with foreign government entities while he serves as president. …

… McClatchy reported in September that a major construction company owned by the Chinese government was awarded a $32-million contract to build a six-lane road as part of the residential piece of the Trump World Golf Club Dubai project.

And this is a problem because …

Walter Shaub, who served as the director of the Office of Government Ethics until July, said it was a “foregone conclusion” that Trump would have numerous conflicts of interests after he made the decision to retain his business. “Just about every decision he makes puts him under cloud of suspicion,” Shaub said. “It became inevitable because he didn’t sell. It’s precisely why he should have divested.”

Now every time his company does business in a foreign country or with a foreign entity, Trump faces a fresh set of questions: Is a foreign government gaining access to him because of his business? Is the business deal a factor in U.S. foreign policy? Is a foreign government building goodwill with him because of his company? …

…Ethics experts, including those involved in three separate lawsuits accusing Trump of violating the so-called emoluments clause of the Constitution, say the latest agreements with Posco could violate the law depending on what kind of influence the foreign governments have on the company and whether the Trump Organization is receiving a benefit.

The Logan Act. No one has ever been prosecuted under the Logan Act, but it’s been on the books since 1799.

The Logan Act makes it a crime for a United States citizen, “without authority” from the federal government, to communicate with foreign officials in order to “influence the measures or conduct of any foreign government” in a dispute with the United States or “to defeat the measures of the United States.” A conviction can result in a prison sentence of up to three years. …

… The statute applies squarely to Mr. Flynn. According to court filings, a “very senior member” of the Trump transition team told Mr. Flynn on or about Dec. 22, 2016, to contact officials from Russia and other foreign governments regarding a resolution pending before the United Nations Security Council that condemned Israeli settlement activity. Mr. Flynn then asked the Russian ambassador, Sergey I. Kislyak, to delay a vote on the resolution or use Russia’s veto to prevent it from passing.

There appears to be a broad consensus now that the “very senior member” was Jared “Back Channel” Kushner, who has his own problems with Russians. But were other members of the transition team in the dark about what Kushner and Flynn were up to? That’s extremely doubtful.

Collusion. And, finally, we get to the old “did Russia help Trump win the election” question. Brian Beutler writes,

There is more than enough evidence to say definitively that the Trump administration colluded with Russia, and there is every reason to believe the plot encompassed criminal activity, even if that activity remains invisible for now. …

…We know that Russian spies approached the Trump campaign offering assistance in the election multiple times. At least twice, Russians dangled the lure of “dirt” on Hillary Clinton, including stolen emails, and both times, Trump campaign officials (George Papadopoulos and Donald Trump, Jr.) expressed interest. Trump, Jr. was particularly enthusiastic about the idea of cooperating with the Russians, and shortly after he welcomed Russian spies to Trump tower for a meeting about “dirt” on Hillary Clinton, he coordinated messaging with Wikileaks, which operated last summer and fall as a cutout for Russian hackers.

After repeatedly communicating to Russia (in public and in private) that they welcomed interference in the election, Trump and his aides cast public doubt on whether the saboteurs were Russians at all. When Trump went on to win the election after benefiting from this interference, members of his inner circle, through Michael Flynn, secretly connived with Russia to subvert the countermeasures the American government had undertaken as penalties for Russia’s interference. …

… Meanwhile, Trump’s pretense that Flynn did no wrong but to lie to Vice President Mike Pence is falling apart, as it becomes increasingly clear that Flynn was honest with the entire team about his communication with Russian agents, and they all agreed to tell lies about it to the public. Trump admitted on Saturday that he knew Flynn had repeated those lies to the FBI at the time he ousted Flynn, and at the time he beseeched FBI Director James Comey to let Flynn off the hook. The president is for this and a myriad other reasons the subject of an obstruction investigation.

At this point, to say collusion allegations remain unproven is materially misleading. Collusion has been conclusively proven; we are in the process of learning how extensive it was, and whether, in the course of it, American conspirators committed federal crimes.

I have argued several times that we don’t know if whatever the Russians did had any measurable effect on the election, but just attempting to use the help of a foreign government to win a presidential election is, um, bad.

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Is the Republican Party Committing Suicide?

Trump Maladministration

It’s been an interesting few hours.

In a truly wild and dizzying Friday night and Saturday morning in Washington, Senate Republicans committed collective political suicide by passing a deeply detested tax bill they were still writing seemingly moments before they jammed it through on a party-line vote with no hearings and no meaningful input from a public that hasn’t even seen the text of the legislation.

The thing has been revised so many times it may take a few days to sort out what’s in it. Since there are still significant differences between the Senate and House bills there’s still a slim chance it will die in reconciliation, but it seems the entire GOP is in a what the hell let’s set our hair on fire and see what happens mood. I think it’s going to get done, unfortunately.

Whatever adjustments Republicans made to pass the bill, the basics of this atrocity are pretty straightforward: It will permanently slash the corporate tax rate, even though American companies are swimming in record rivulets of cash profits. That rate may go up over time to satisfy the deficit hawks, but it will ultimately end up at a much lower endpoint than it’s at today. The bill will eliminate the inheritance tax, allowing denizens of Richistan to reproduce the Trump family dynamic of billionaire thieves passing their ill-gotten largesse in gigantic lump sums to their own shiftless children. To pay for this pointless handout to people with third homes in Jackson Hole, Republicans also eliminated or reduced a series of popular tax deductions and incentives almost exclusively for people that voted against them. The tax code has been weaponized.

And of course, Senate Republicans included a gratuitous repeal of ObamaCare’s individual mandate, something that will save the government billions by ultimately pushing about 13 million people out of the insurance market altogether and will spike premiums for everyone else in the exchange markets. The whole sordid thing will add roughly $1 trillion or more to the deficit over the next decade, according to the Fake News Congressional Budget Office and the Failing Non-Partisan Joint Committee on Taxation. I could bore you with a thousand quotes from GOP leaders during the Obama administration about how the national debt is the dingo that will eat your baby for breakfast, the demon that will possess your grandchildren and rob them of their prosperity, but do I really have to? All you need to know is that if these Republicans saw a balanced budget drowning in an icy river, they would whistle while they walked right by it. They literally never cared.

The only thing that might save the Republican Party is the inability of Democrats to make a big enough noise about this monster.

But 2018 is likely to be an interesting election year. If the tax bill is signed into law, sooner or later the American people will notice how it is impacting their lives. People will lose health care and see premiums go up.

And in 2019, as folks are preparing their 2018 taxes, a lot of them are going to notice that their taxes actually went up.

Meanwhile, Trump is going to have to fight to keep is job. At Vanity Fair, T.A. Frank has an interesting theory on what might happen next:

Now we get to the main point, which is that passage of this bill marks the end of Trump’s presidency. Trump (along with his supporters) seems to feel that triumphing on taxes will give him the momentum to move onto other great things. It won’t. It will offer Republicans the chance to abandon him. More than anything, this piece of legislation is what Republicans needed from the president. Trump has been a building fire that Republicans wouldn’t put out because they needed it to light their cigars. But now the G.O.P. has got what it wanted. It can puff and move along.

Trump might think what comes next is his wall or maybe even—who knows how much he dreams?—an infrastructure bill. These won’t happen. His leverage with his party will be spent. Even minor reforms to immigration policy are unlikely to happen. Trump is reportedly set to appoint Tom Cotton, the lone immigration wonk among Republicans in the Senate, to the C.I.A., where Cotton will abandon domestic legislation in favor of foreign-threat assessments. With his reputation for hawkishness, Cotton will, as the joke goes, fill a much-needed void.

With Senate Majority Leader Mitch McConnell, nothing is brash or loud. He won’t denounce Trump in fiery orations. We’ll just notice that Trump’s enemies seem to be having easier time circling in on him. The car that was parked in the path of the fire truck yesterday will have moved mysteriously to the side. McConnell will clear his throat and look the other way as Trump’s foes charge through. Trump might have no choice but to push through this bill, and he no doubt likes what it does. But tax cuts were also Trump’s bargaining chip in dealing with the G.O.P. He’s about to let that chip go, just as the G.O.P. is about to let Trump go.

If it were all up to the Senate, I’d agree. But bills of impeachment must originate in the House, and I don’t think Republicans in the House are there yet. But that could change now that the Mueller investigation is tightening the noose. If House Republicans decide Trump is a liability as the midterms approach, all bets are off.

The tax bill is a horror that will damage a lot of people, not to mention the the nation. But maybe, like Prohibition, the GOP’s obsession with tax cuts may be something that won’t go away until it goes into effect and utterly fails.

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Is Mueller Closing In?

Trump Maladministration

It sure seems so

President Trump’s former national security adviser, Michael T. Flynn, pleaded guilty on Friday to lying to the F.B.I. about conversations with the Russian ambassador last December, becoming the first senior White House official to pledge cooperation in the special counsel’s wide-ranging inquiry of election meddling.

Documents released as part of Mr. Flynn’s plea agreement show that his pre-inauguration discussions with Sergey I. Kislyak, the Russian ambassador, about foreign policy were part of a coordinated effort by aides running Mr. Trump’s transition into the White House. In at least one instance, federal prosecutors say, Mr. Flynn was directed by a “very senior member” of Mr. Trump’s presidential transition team.

So what exactly did Flynn lie about?

He’s charged with lying about conversations he had with Russian Ambassador Sergey Kislyak on December 22nd, 2016 and on December 29th, 2016.

In the first set of conversations, Flynn apparently asked that Russia either delay or defeat a resolution in the United Nations Security Council. Flynn lied to the FBI about whether Russia ever described their response to this request to him, claiming that they did not.

In the second set of conversations, Flynn requested and received assurances that Russia would not respond strongly to President Obama’s announcement that he was placing new sanctions on Russia in retaliation for their meddling in our election. He dishonestly claimed not to remember that Russia had made these assurances to him.

In return for pleading guilty to these charges, Flynn will be expected to cooperate with the investigation. If he doesn’t do so satisfactorily those other charges, including the kidnapping charge which also implicates his son, could be reintroduced.

 Flynn did not make these contacts on his own initiative.

Flynn’s stipulation of the facts underlying his December 2016 conversations with then-Russian ambassador Sergey Kislyak. At least one of those two conversations Flynn undertook at the direction of a “very senior” transition official, the stipulation says.

The documents do not say who directed Flynn to discuss sanctions with Kislyak — a conversation Flynn later reportedly lied about to Vice President Mike Pence, a lie that was the stated reason that Trump fired Flynn in February. But Flynn’s statement, following his Friday guilty plea and agreement to cooperate with Mueller’s probe, shows that the transition team, at Trump’s Mar-a-Lago resort, was informed at every stage of his discussions with Kislyak.

Who was this “very senior” transition official who gave the order? Nobody really knows. Bloomberg speculates that it was Jared Kushner. Others are reporting that it was Trump himself.

Former national security adviser Michael Flynn is expected to testify that President Trump instructed him to contact Russian officials during the 2016 campaign, according to a report by ABC News.

Flynn is saying that Trump “directed him to make contact with the Russians,” ABC’s Brian Ross said Friday, just moments after Flynn entered a guilty plea for lying about his contact with Russians during the presidential transition period.

Oh, let it be true, please …

Or, it could have been Pence. Josh Marshall:

The first point to note is that Flynn was the person running the Trump foreign policy operation. That is what a modern National Security Advisor does. From everything we know, it’s what Flynn was doing in the latter months of the campaign and certainly during the transition. In other words, it’s not clear that there was anyone in the campaign who outranked Flynn on foreign policy matters. Other than the President-Elect or conceivably the Vice President-Elect, Flynn is the guy who would do the directing rather than getting direction.

Let’s walk through this again.

The “senior official” is the one who talked with Flynn about how to handle his discussions with Kislyak about the sanctions. It was the “very senior member” of the transition who specifically told Flynn to contact foreign governments about the Israel resolution at the UN. The language is very specific about the direction. “On or about December 22, 2016, a very senior member of the Presidential Transition Team directed FLYNN to contact officials from foreign governments…”

The ‘very’ in “very senior member” seems like an almost over the top effort to convey just who it was the prosecutors are talking about. It’s hard to see that that is not either Pence or President Trump, though it also strikes me as perhaps a bit too coy to refer to the incoming President as a member of transition team.

See also Mother Jones. And there’s more …

Flynn clearly kept the President’s team in Mar-A-Lago fully up to date about his conversations with Kislyak, in more or less real time. There were repeated calls with the “senior official” about Kislyak. Critically, after the full round of calls with Kislyak, Flynn “spoke with senior members [note the plural] of the Presidential Transition Team” about his conversations with Kislyak. …

… The clear takeaway is that basically all of Trump’s top advisors, including the President and almost certainly Vice President Pence, were in the loop about these calls even if they did not themselves speak to Flynn directly.

All this may account for why Trump’s behavior has been more erratic than usual lately.

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