Dec. 06

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New Senate: DEM 48             GOP 52

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Dem pickups: (None)
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Report: Mueller Subpoenaed Deutsche Bank for Trump Financial Records

Bloomberg News is reporting that special counsel Robert Mueller has subpoenaed Deutsche Bank and demanded records relating to the hundreds of millions of dollars it has loaned Donald Trump. The bank said that it always cooperates with investigators in all countries but never releases any of the details. Trump's lawyer, Jay Sekulow, denied the report, saying no subpoenas have been issued. Mueller isn't talking.

However, a U.S. official with knowledge of Mueller's probe told Reuters that Mueller wants to know if Deutsche Bank sold some of Trump's loans to the Russian state development bank VEB or any other Russian banks under U.S. sanctions. If that happened, then Trump might owe as much as $300 million to banks run by cronies of Russian President Vladimir Putin, which would give Putin great leverage over Trump, especially if Trump was having trouble coming up with interest and payments of principal. It is not hard to imagine a deal in which Trump cancels the sanctions against Russia and Putin forgives Trump's loan, something the Constitution's emoluments clause frowns upon.

Trump has previously said that if Mueller starts looking at his personal finances, that would be a red line for him and give him the right to fire Mueller. If Mueller's hunch that Trump owes a lot of money to banks run by Putin's cronies is right, one can see why Trump might get antsy. It's also very possible that it's more than a "hunch," and that Mueller has very good reason to bark up this tree—more than one person has argued that the special prosecutor may already have Trump's tax returns. That's legal, with a judge's permission—which might well have been granted at the same hearing as the one where Paul Manafort's papers were subpoenaed. Or the hearing where the (supposed) Deutsche Bank subpoenas were issued.

There is another piece of the puzzle that might be relevant here, although that is still very speculative. Why did Jared Kushner try to set up a secret channel to Russia in Dec. 2016? Why couldn't Kushner and Trump just wait another month and then use the secure hotline in the Oval Office that has existed for decades? A possible answer is that the CIA undoubtedly monitors the official hotline, types up a transcript of every word said on it, and circulates it within the agency so Russia experts can try to pick up useful tidbits. If Trump needed the secret backchannel to discuss loans, he couldn't very well let the CIA know he was doing business with sanctioned banks, something that is illegal.

So far, we don't know for sure if Mueller has actually issued those subpoenas, which would mean the leaker is correct and Sekulow is lying. We also don't know if Deutsche Bank has complied with any possible subpoenas. We do know that Trump and Deutsche Bank had a falling out in 2008 when Trump sued the bank for $3 billion in damages, claiming it broke an agreement relating to the financing of a Chicago hotel. Matters could be accelerating on this front fairly soon. (V)

Russiagate Plot Thickens Some More

Thus far, the Mueller investigation news has ebbed end flowed—some weeks, Paul Manafort and Rick Gates are arrested, and other weeks, there isn't much news at all. This week appears to be in the former category, as the Trump Deutsche Bank story was far from the only news on the Russiagate front on Tuesday.

To start, former NSA Mike Flynn's right-hand woman K.T. McFarland was supposed to be confirmed as the U.S. ambassador to Singapore this week. Not any more, though, as Congressional Democrats have questions about exactly what she knew about the Trump campaign's contacts with Russia. She said, under oath, that she was completely unaware of what was going on. That is somewhat hard to believe, and the court documents made available last week—due to Flynn's guilty plea—directly contradict her sworn testimony. Not only is McFarland's nomination as ambassador in jeopardy, but she may now have a little perjury problem. And a little conspiracy problem, as well.

Of course, McFarland is small potatoes compared to Vice President Mike Pence, who is looking more and more like he could be elevated to President Pence some day. The same set of documents that implicated McFarland also makes clear that knowledge of Flynn's activities was widespread among senior members of Team Trump. The result of this is renewed scrutiny of the Vice President. The Flynn documents do not directly implicate him, as they do McFarland, but skeptics wonder how he could possibly have been completely in the dark on this subject. Pence's defenders, mostly his personal staffers, argue that his job was personnel, and did not extend to the things Flynn was working on. Plus, he was more of an "outsider" than others were, and was thus less likely to be looped in on shady business. That might be the first time that a person's supporters have defended him by pointing out that his colleagues didn't really like him or trust him, but that's where we are these days. In any event, it may end up being difficult to prove Pence's complicity in Russiagate (if it happened), but if there's even the whiff of involvement, it could undermine his legitimacy if he were to be elevated to the Oval Office. This is a big part of the reason that Richard Nixon chose a member of Congress as his vice president and ultimate replacement—it was crystal clear that Jerry Ford had nothing to do with Watergate.

Meanwhile, Manafort and Gates are back in the news. There is much whispering, first of all, that more charges against the two men are coming. Not helping Manafort's position, nor his chances of being freed on bail, is that he chose to join with a Russian friend to ghost-write an op-ed on Ukraine just last week. It's hard to guess what Manafort could possibly have been thinking, given that he is, you know, under scrutiny for associating with Russians and then hiding it. The op-ed was not actually published, but Robert Mueller found out about it and is not happy. The prosecutors have already submitted the spiked op-ed to the court, and Manafort will be asked to explain himself to a judge tomorrow.

And finally, this isn't a news development per se, but Michael D'Antonio has an interesting op-ed for CNN in which he points out that the person who tried hardest to save Donald Trump from himself was, ironically enough, Barack Obama. Despite all the nastiness of the campaign, and the birther conspiracy theories, Obama specifically warned Trump about the danger of hiring Michael Flynn. Trump, of course, ignored that advice. The charitable (and probably correct) interpretation, and the one that D'Antonio favors, is that Obama may dislike Trump personally, but his sense of duty to the United States prevailed, and he did his very best to hand his successor the healthiest government he could. The less charitable interpretation is that Obama knew that Trump would do the opposite of whatever he said, and so #44 set #45 up for a fall. Either way, Trump is probably wishing right now he could go back to that day, and heed that piece of advice. And he is not the only one. (Z)

Tax Bill Looks to Be an Albatross around the Republicans' Neck in 2018

The tax bill hasn't even been formally passed yet, but it is already clear that it will be a big problem for Republicans in 2018. Two polls on it were released yesterday. A Gallup poll shows 29% supporting it and 56% disapproving. A Quinnipiac University poll has 29% approving and 53% disapproving. Generally, Republicans like it and Democrats didn't, but independents don't like it by a margin of 2 to 1. That spells trouble for the Republicans in 2018. To make it worse, few people understand what is in it (and that includes the members of Congress who voted for it). When the final bill is announced and people begin to understand its consequences for them, it is only going to get less popular. Democrats are going to use it like a baseball bat to hit the 35 Republican representatives in California, Illinois, New Jersey, and New York over the head.

FiveThirtyEight has looked up the popularity of past tax bills and noted that this tax-cut bill is less popular than previous tax increases. The approve/disapprove for the 1993 Bill Clinton tax increase scored 34%/44% and the George H.W. Bush tax hike of 1990 was 41%/52%. For a tax cut to be less popular than a tax increase is unprecedented. No tax cut in the past 35 years has been underwater, and certainly not under water by 20 points. The Republicans may make their donors happy if the final bill passes, but at the same time they will be giving the Democrats a powerful weapon to use in 2018.

If the Democrats campaign in 2018 by attacking the tax bill, saying the Republicans have raised taxes on the middle class to (partially) pay for big tax cuts for the rich and corporations, the Republicans will scream "class warfare." Veteran Democratic strategist John Lapp said: "Bring it on." J.B. Poersch, president of a Democratic PAC, put it this way: "Republicans have failed to defend working families both in terms of health care and in this awful tax bill. 2018 is about holding them accountable for making the promise." A "class warfare" approach to the midterms is likely to energize the Bernie Sanders/Elizabeth Warren wing of the Democratic Party without offending the centrists, making it the ideal strategy. (V)

Conyers Resigns Effectively Immediately

Rep. John Conyers (D-MI) announced yesterday that he is "retiring" from Congress effective immediately. Conyers has been under fire for a week for sexually harassing a staffer and then using government funds to pay her to keep quiet about it.

Some members of the Congressional Black Caucus are very unhappy with the pressure that has been exerted on Conyers to step down. They note that white politicians who face accusations similar to Conyers, such as Rep. Blake Farenthold (R-TX), Sen. Al Franken (DFL-MN), Roy Moore, and Donald Trump get the benefit of the doubt that black politicians don't. However, there is another factor present here other than possible racism: ageism. Conyers is 88 and some members of Congress aren't sure he still has all his marbles. Further complicating the situation is the role of Conyers' wife, Monica Conyers, in his decision. According to lawmakers and aides, a deal had been worked out last week to let Conyers "retire" rathan than "resign" to preserve his last shred of dignity, and then Mrs. Conyers killed the deal, leading CBC members to be absolutely furious with her.

What happens next is up to Gov. Rick Snyder (R-MI). Michigan law calls for a special election, but leaves the date up to the governor. He could call an election just to replace Conyers, or he could wait until May 7, 2018, when local elections are scheduled. Until then, the seat will remain vacant, as there is no provision for appointing a temporary replacement. Conyers suggested that people vote for his son, but in any case, since the PVI of the district is D+33, some Democrat will win. (V)

God's Plan for Mike Pence

The Atlantic has a long story on how Vice President Mike Pence is trying his best to serve two masters (God and Donald Trump) despite the Bible telling him this is a losing proposition. In particular, Trump has humiliated him many times, most recently when he was instructed to fly across the country to attend an NFL game—up to the moment the national anthem was played. He was instructed to wait until the players kneeled, then to walk out and not even watch the game. The religious right is very happy to have him in the White House, even if it is just doing Trump's dirty work. They know that someday, just maybe, he'll be occupying a different office at 1600 Pennsylvania Avenue, and then all their dreams will come true.

One possibly important clue to what might lie ahead is an anecdote about how the second couple responded to the Access Hollywood video during the campaign—you know, the one in which Trump bragged about grabbing women by the p***y. This is not Pence's style. Remember, he won't dine alone with any woman who is not his wife, let alone grab them by any body part. When Pence's wife Karen saw the video, she was disgusted. An aide described her feelings about Trump like this: "She finds him reprehensible—just totally vile." This might play an important role down the line. Just imagine that somehow Robert Mueller delivers a bombshell of a report implicating Trump in multiple illegal activities and the House Judiciary Committee votes for a bill of impeachment. Then, mimicking the role of then-Arizona senator Barry Goldwater in 1974, when he told Richard Nixon the jig was up, Sen. John McCain (R-AZ) tells Trump he is about to be impeached and convicted. Then Trump asks Pence if he will issue a pardon if he resigns and Pence says: "You are vile and disgusting, so no pardon." If that ever happens, we will be in uncharted waters. Of course, if Pence is also implicated in Russiagate (see above), next in the line of succession is Speaker Paul Ryan (R-WI). Of course, he doesn't like Trump, either. Or, if after the midterms, it could be Nancy Pelosi (D-CA). For Trump, same problem. (V)

Trump Will Move Forward on Jerusalem

Speaking of God, Donald Trump is expected to move forward today with an announcement that was hinted at over the weekend: that the United States will recognize Jerusalem as the capital of Israel. He will also instruct the State Department to begin preparations to move the U.S. embassy there from its current location in Tel Aviv. Of course, given how understaffed they are, it could be a while before it gets done.

The White House says that the move is just a "recognition of reality." This is pure nonsense. 82 nations have embassies in Israel, and zero of those are in Jerusalem. There used to be a few, but the last two—the embassies of the Netherlands and Costa Rica—moved locations in 1980. No, the only reality that is being recognized is that Trump likes to keep the base (and megadonor Sheldon Adelson) happy, and this is a good way to do it. Nobody else, and nothing else, matters.

Foreign policy experts are remarkably unified in their view that this is a very bad move. The use of this poker chip might have gotten some concessions out of Israel during the Trump administration's efforts to bring peace to the Middle East. But now Trump, supposedly the world's greatest negotiatior, has given this away in exchange for nothing. Meanwhile, the announcement and the move of the embassy are going to inflame anti-American tensions in Palestine and among the nations of the Middle East. There will be, at the very least, massive protests. There's also a likelihood of violence of one sort or another that leaves some Americans dead. Recall that the most expensive investigation ever conducted by Congress looked into the deaths of the four Americans who died in Benghazi. If we end up with Benghazi v2.0—probably not in Israel, which is too secure, but maybe at some other U.S. embassy or consulate in the region—what will the Republicans do with that? Whatever it is, don't hold your breath waiting for a two-year-long investigation. (Z)

Polls Say Moore, Jones Are Leading in Alabama

Two new polls of the race for Alabama's open Senate seat were released on Tuesday, and they say very different things. One, by Gravis Marketing, has Doug Jones (D) leading Roy Moore (R) by four points, 48% to 44%. The other, by Strategy Research, has Moore leading Jones, 50% to 43%. That is a spread of 11 points between the two polls, which is well outside the margin of error. So, one or the other is wrong.

The polling for this race thus continues to be all over the place. Here are the numbers for the last 10 surveys taken (all of them in the last three weeks): Moore +7, Jones +4, Moore +3, Moore +6, Jones +3, Moore +5, Moore +6, Moore +2, Jones +5, Jones +8. There's no particular rhyme or reason here; Moore may be "bouncing back" a little bit, but that doesn't explain how Jones prevailed in a poll that was conducted just this weekend. If there were a difference between human polls and robopolls, that might be instructive, but there is not. Both of the new polls released today, for example, were robopolls.

What it boils down to is this: Projecting the makeup of the actual electorate is tough under the best of circumstances. Projecting the makeup for an off-year special election is even tougher. And projecting the makeup when one of the candidates has been hit by virtually unparalleled revelations of misconduct is tougher still. Point is, polls of this race are just interesting trivia at this point. We're not going to be able to say confidently who the winner will be until the voting takes place. And given that it's Alabama, we may not be all that confident even then. (Z)

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