Oct. 31

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Former Trump Campaign Adviser Lied to the FBI and is Now Cooperating with Mueller

Most of the news yesterday was about the indictment of Paul Manafort (see below), but it is possible that the George Papadopoulos story may prove more important down the road. Papadopoulos was a foreign policy adviser to President Donald Trump's campaign from March 2016 to Jan 2017. Before that, he advised Ben Carson, and before that he worked at a conservative think tank in Croton-on-Hudson, NY. According to his LinkedIn page, Papadopoulos claims to be an oil, gas, and policy consultant. That may be why Trump hired him, even though he got his masters degree only 7 years ago.

Here is a brief time line of some of the facts related to Papadopoulos. They are taken from the guilty plea special counsel Robert Mueller released yesterday:

For whatever reason, the meeting never took place. It is possible that the meeting between Russian lawyer Natalia Veselnitskaya, Manafort, Donald Trump Jr, and Jared Kushner made it redundant. It is also possible that neither the professor nor the woman had high contacts in Russia and they were stringing Papadopoulos along.

Also noteworthy is that Papadopoulos didn't keep his activities secret from the campaign. He constantly peppered campaign officials, high and low, with progress reports. Not once did anyone stop and say: "Whoa! You shouldn't talking to the Russians. That's illegal!" In fact, at some point Papadopoulos learned that the Russians and Wikileaks were in possession of hacked e-mails from the Democratic Party well in advance of the messages' public unveiling, and may well have shared that information with members of the campaign. That would certainly explain the multiple references that friend-of-Trump Roger Stone made about forthcoming dirt on Hillary Clinton in the days before the e-mails leaked. It is also possible that Stone and others had their own back channels into Russia or Wikileaks, independent of Papadopoulos.

Papadopoulos has been charged with lying to the FBI, a federal crime. In short, Papadopoulos changed the time line above, claiming that all the contact with the Russians happened before he joined the campaign, rather than after. The FBI probably didn't believe it, because why would the Russians offer dirt on Clinton to someone not affiliated with the campaign? He also lied about some other things. On July 27, 2017 Papadopoulos was arrested. On Oct. 5, 2017, he formally agreed to plead guilty. He is cooperating with Mueller, presumably in return for a lighter sentence.

One thing seems very strange in all this: Why did the Papadopoulos story break yesterday? We don't know, but could it be that Mueller is trying to communicate with Manafort through the media. The message could be: "Hi Paul, this is Bob. You didn't know about this whole Papadopoulos thing, did you? Guess what, I've got more stuff you don't know about, and if you lie to the FBI when they start asking you questions, we're going to nail you on that, too." Patrick Cotter, a former federal prosecutor who once worked with Andrew Weissmann (who signed off on the Papadopoulos plea), said that it wasn't just a message to Manafort, but to the next five guys as well, and it reads: "We are coming, and we are not playing, and we are not bluffing." Cotter said that the message wouldn't have been any clearer if they'd rented a revolving neon sign in Times Square.

The guilty plea references many unnamed campaign officials who received e-mails and calls from Papadopoulos. Mueller would be guilty of malpractice if he didn't interview all of them under oath. That could lead to all kinds of new information.

The long-term consequences of the Papadopoulos story aren't clear yet, but Trump has long said that no one in the campaign had contact with the Russians. Now we know that at least one person in the campaign spent months in contact with Russians and kept the campaign informed about it on an almost daily basis. In other words, the President has been caught in a whopper. This new information brings up a whole raft of new questions, such as these: Was the woman who was introduced as Putin's niece Natalia Veselnitskaya? Was her meeting in Trump Tower with Junior, Manafort, and Kushner related to any of this? How did the professor know to contact Papadopoulos before his appointment was announced? Did they have a mole in the campaign or was their meeting in Italy simply dumb luck? Why did Papadopoulos lie to the FBI? Did he just panic or was he trying to hide something? These are undoubtedly questions Mueller is quite curious about.

All in all, this bit of news seems very important. Trump can hardly claim that allegations of his campaign's colluding with the Russians are "fake news" when a member of his own team has pleaded guilty to precisely that and repeatedly told the whole campaign what he was up to and nobody told him to stop.

Needless to say, reporters asked Sarah Huckabee Sanders about Papadopoulos yesterday. She said he was a small-time volunteer and not terribly important. When the subject came up again, she repeatedly downplayed it. What else could she do? She's a nice young lady from Arkansas, but dealing with stuff like this is way above her pay grade. (V)

Manafort Indicted for Money Laundering, Tax Evasion, and Conspiracy

As expected, Donald Trump's former campaign chairman Paul Manafort has been formally indicted for a raft of crimes including money laundering and tax evasion. His longtime business partner, Rick Gates, was indicted along with him. In a 31-page indictment prosecutors accuse Manafort of earning over $12 million from lobbying and public relations work for Ukraine, divvying it up over a number of shell companies, and then making over 200 wire transfers to a home improvement company, a home entertainment company, an antique rug store, a men's clothing store, a landscaper, a contractor, a car dealer, a property management company, and more in order to hide the origin of the money and avoid paying income taxes on it. Manafort also bought three houses for a total of $6.4 million with this money.

The indictment has 12 counts against the pair. The first is conspiracy against the United States to evade taxes. The second is conspiracy to commit money laundering. The next four charge Manafort with failing to report his foreign bank accounts for four years on the FBAR form, as required by law. The next three charge Gates with the same thing. Count 10 accuses both of them of being unregistered foreign agents and 11 and 12 say they filed false statements concerning their work as foreign agents. The whole thing is quite a mouthful, but very detailed.

While Mueller didn't accuse Manafort—who is really the main target here—of violating any state laws, both Virginia and New York, where he has homes, have state income taxes. No doubt the attorneys general of those states are going to be thinking about whether to charge him with evading state income taxes, a crime that Donald Trump has no power to pardon.

If he hadn't gotten greedy, Manafort could have registered as a foreign agent and paid the 39.6% income tax on his earnings and he wouldn't have been under indictment now. Working for a foreign government is perfectly legal as long as you register as such. But he was greedy and arrogant and thought he could get away with it. Also, if he hadn't joined the Trump campaign and gotten into the national spotlight, he probably would have. Icarus learned about flying too close to the sun the hard way as well, but Manafort apparently never read that story as a child.

Former prosecutors and defense lawyers who have read the indictment say that Mueller is following a tried and true strategy here. First go after the little fish and get them to sing like canaries (and yes, fish do sing.) Then use what they say to work your way up the tree (OK, most fish don't climb trees, but some do).

In court yesterday, the Manafort and Gates pled not guilty to all the charges. Manafort's bail was set at $10 million; Gates' was set at $5 million. Given all their ties to foreign countries, they had to turn in their passports to prevent them from fleeing the United States. They will be allowed to remain at home until they can raise bail.

Some of the charges are going to be nearly impossible to refute. For example, the pair received money for doing work for a foreign government and didn't register as foreign agents as required by law. "We forgot" is probably not going to impress a jury. Also, they are not going to defend "forgetting" to file the forms about foreign bank accounts by saying they didn't know about them, because their accountants specifically asked if they had foreign accounts and they lied and said no. If they had said yes, the accountants would immediately have informed them of their duty to fill out the forms listing their foreign accounts.

Gates is a small-player in all this and may flip first, unless he and Manafort have a deal to protect each other. He knows that Mueller really has no interest in him and if he tells Mueller everything he knows, he'll probably get off with a big fine but no jail time. Manafort is in a real pickle. He undoubtedly knows a huge amount about Trump's connections to Russia, as well his business dealings. Should he stonewall Mueller in hopes Trump pardons him, or should he squeal and try to get a good deal with not too much jail time? Trump's unpredictability and tendency to look out for only Trump make the former approach risky. Further, as noted above, Manafort could then be charged with a state-level crime, and then he'd be right back where he started. Manafort's lawyers are surely going to tell him that beating the charges is going to be well nigh impossible, so realistically, he is going to have to make a deal with either Trump or Mueller, and only one of the two has influence with the attorneys general of New York and Virginia. Plan C is just keep quiet, be found guilty, and spend years in federal prison, but that is probably not high on his list. G. Gordon Liddy he is not. (V)

Trump Responds As Expected

There are really two Donald Trumps: the public one and the private one. And both Trumps responded precisely as one would expect on Monday.

Publicly, Trump continued to lash out, to try to discredit Mueller and his investigation, and to redirect the attention to Hillary Clinton and the Democrats. Monday's tweets rehashed the same talking points that have been standard fare for Trump over the past few days:

Sorry, but this is years ago, before Paul Manafort was part of the Trump campaign. But why aren't Crooked Hillary & the Dems the focus?????

— Donald J. Trump (@realDonaldTrump) October 30, 2017

....Also, there is NO COLLUSION!

— Donald J. Trump (@realDonaldTrump) October 30, 2017

Not a few commentators have observed that the five question marks come off as a tad bit desperate.

Privately, meanwhile, Trump ensconced himself in his bunker—er, the private quarters of the White House—surrounded only by a few trusted insiders, particularly his lawyers. He watched the day's news unfold on TV, and seethed as Ty Cobb, John Dowd, and Jay Sekulow translated for him. Reportedly, Trump was stunned that Papadopoulos was the "star" of Monday's revelations, repeatedly declaring, "This is the guy?" Apparently, the President also took solace in the fact that none of the charges in Mueller's indictments involved his presidential campaign. As is always the case on days where the special prosecutor makes headlines, Trump also toyed around with the idea of firing him, but decided against it. Of course, that could change at any time.

Given that Trump's public and private responses have much in common, it appears that he does not fully grasp how bad a day he had on Monday. To start, Mueller's mandate involves Trump and Russia, and has nothing to do with Hillary Clinton. Unlike virtually everyone else in Washington, Mueller isn't impressed or shocked by what Trump has to say on Twitter, although he probably reads it carefully in case Trump tweets something incriminating. Beyond that, Manafort's shady activities were well known in Washington long before he joined the Trump campaign. That means that Trump either didn't care, or didn't bother to do due diligence; neither option reflects well on the President or his other high-level picks, particularly since you could write the same basic sentence about 14-day NSA Michael Flynn. And finally, Mueller is playing 3-D chess, but The Donald appears to be playing checkers. If he really is going to sleep better tonight because Manafort's bad behavior predates the campaign, and because Papadopoulos is just a lackey, then Cobb & Co. have done a pretty poor job of communicating what it all means. Perhaps they were afraid to be 100% frank, for fear of being fired. They're going to have to explain it one of these days, though. (Z)

What Do Yesterday's Events All Mean?

Yesterday's news was extraordinary, but what does it all mean for Robert Mueller's investigation and especially for Donald Trump? To get an idea, Politico talked to a number of top legal experts. Here is a brief summary of what they had to say:

There you have it. This is a complex case and this is only Mueller's opening move. What is also noteworthy here is that a number of the experts believe the real story is about Papadopoulos, not about Manafort and Gates. (V)

Is the Papadopoulos Story Really That Important?

Everyone knows about the "fog of war," but there is also a kind of "fog of news" in which early reports of breaking news sometimes are confused and miss the real story. An article published in the New York Times later in the day on Monday sheds some light on the George Papadopoulos story, which may be important. In short, early in the primary campaign, no serious foreign policy experts wanted to work for Donald Trump. They either were already signed up by the many governors and senators running, or else thought he was a fool and wanted nothing to do with him. So Trump was desperate and ended up putting George Papadopoulos on his foreign policy team, even though he was still wet behind the ears.

Papadopoulos met an academic in the U.K., later identified by Senate aides as Joseph Mifsud, a professor of international relations at Stirling University in Scotland. When Mifsud met Papadopoulos and learned he was on Trump's team, he told him that he had contacts in Russia (true) and that one of them was Vladimir Putin's niece (not true). Papadopoulos got all excited and spent months trying to arrange a meeting between the campaign and Putin, but that never came off.

One interpretation of this story is that Papadopoulos is a complete greenhorn and was in way over his depth. Senior campaign aides realized this and basically ignored him, despite his endless stream of emails to everyone about a possible meeting with Putin (who probably knew nothing about all this). Since there were no heavyweights on the foreign policy team, there was no one who could go to Papadopoulos and say: "Shut up, kid." But his activities may have been entirely peripheral to the campaign and ultimately had no effect.

When the FBI got wind of Papadopoulos trying to contact the Russians, they interviewed him and he probably panicked and lied to them. The FBI figured this out immediately and he was arrested, which led to his guilty plea. Mueller is now using this story to freak everybody out and to warn other witnesses not to lie, even though this may be more of a water pistol than a smoking gun.

Lost in all of yesterday's stories is a crucial item: Mueller is a prosecutor and is focused on finding people who committed crimes and then prosecuting them. That is the nature of the beast. But from a larger perspective, what if the Russians hacked the election in a huge way and affected the result, but there was only minor contact between the campaign and the Russians (e.g., Papadopoulos, Veselnitskaya, etc.)? Then there may not have been a crime in the sense of some U.S. law being broken, but a hostile foreign government subverted U.S. democracy more or less on its own. That is even worse, but seems to have been forgotten in the rush to find "collusion." (V)

John Kelly is All-In; Other Republicans, Not So Much

For his first month or so in office, White House Chief of Staff John Kelly was pretty clearly holding Donald Trump close, but not too close. However, he waded right into the middle of the President's fray with Rep. Frederica Wilson (D-FL) and the widow of Sgt. La David Johnson. It was rather reminiscent of the moment in the movie The Godfather, when the previously non-criminal Michael Corleone conspires to save his mafioso father Vito from being murdered, and afterwards whispers, "I'm with you now, pop. I'm with you." If there were any lingering doubts that Kelly has embraced Trumpism lock, stock, and barrel, they were certainly put to rest on Monday, as the Chief of Staff worked hard to provide a distraction from the day's bad news, issuing forth with a number of controversial statements that were positively Donald-esque.

To start, despite the fact that Kelly was caught telling a baldfaced lie about Wilson—as was proven by irrefutable video evidence—he declared he will "absolutely not" apologize for what he said. Then, he called for the appointment of a second special counsel, one charged with looking into the Obama-era uranium deal with Russia and the notorious Trump dossier. Later, while talking to Fox's Laura Ingraham, Kelly held forth on the Civil War and the Confederacy, sharing his opinions that Robert E. Lee was an "honorable man" and that the Civil War was due to the failure of 1850s politicians to compromise. The former observation means that Kelly is embracing an unabashed white supremacist, while the latter tells us that the former four-star Marine general apparently hasn't read the books on the Commandant's required list for professional development, since several volumes on that list debunk that nonsensical thesis. Not a single one of these remarks would have been out of place in the President's Twitter feed.

While Kelly fully hitched his wagon to the President, however, Senate Republicans spent Monday doing the only thing they could do: keep silent. They don't want to take sides against the President while they need him for purposes of changing the tax code, but they don't want to take sides with him for fear of acquiring some of the stench that's currently emanating from 1600 Pennsylvania Avenue. Sen. John Cornyn (R-TX) deflected questions from reporters, while Sen. Chuck Grassley (R-IA) and Majority Leader Mitch McConnell (R-KY) both snuck out a back door of the capitol building to avoid the press. If Trump thinks that Republicans who don't work directly for him are going to have his back, he's going to suffer a lot of disappointments in upcoming weeks and months. (Z)

Trump's Approval Rating Hits Historic Low

Lots of media outlets and polling firms track presidential approval ratings these days, but the first to do it, and the gold standard, is the Gallup poll. They released their latest on Monday, and it was more unhappy news for Donald Trump. He's dropped to a 33% approval rating, which is the lowest number ever recorded for a president in his first year.

If that is not bad enough, however, there are two things that throw a bit more salt into The Donald's wounds. The first is that he's bleeding support very badly among independents and non-college white males. The second, of course, is that the latest poll was taken before Monday's Manafort and Papadopoulos revelations. When Gallup produces its next poll, next week, the 20s are a distinct possibility. (Z)

Northam Leads Gillespie by 17 Points in Virginia Gubernatorial Race

Next Tuesday, Virginia voters go to the polls to elect a governor and attorney general. This will be the first statewide election in the Trump era and will be watched very closely. New Jersey also elects a governor next week, but the Republican candidate is so compromised that a Democratic win won't be much of an indicator. A new Quinnipiac University poll out yesterday puts Lt. Gov Ralph Northam (D-VA) at 53% and Ed Gillespie (R) at 36%. If Northam wins by anything like that in what is still a swing state, every Republican in the country is going to be wetting his or her pants.

Also on the ballot is the attorney general's race, pitting incumbent Mark Herring (D) against John Adams (R). Normally, that race wouldn't be so important outside Virginia, but this year it is very important. If Herring wins, there is a fairly good chance that he will indict Paul Manafort for evading Virginia's income tax. If he is convicted, Donald Trump can't pardon him, only the governor of Virginia could do that, and if Northam becomes governor, that's not going to happen. If Adams is elected attorney general, he could easily just not bring charges against Manafort, saying he has other priorities. Of course, that doesn't help Manafort in New York, home to Gov. Andrew Cuomo (D) and AG Eric Schneiderman (D). (V)

Facebook Tries to Save Its Bacon

Donald Trump & Co. aren't the only ones suffering from Russia-induced headaches. Facebook is facing some uncomfortable scrutiny after serving as unwilling dupes (a.k.a. useful idiots) while the Russians tried to meddle in the 2016 election. On Monday, they were compelled to admit that the number of users exposed to Russian propaganda was much, much larger than they previously said—instead of 12 or 13 million, it was more like 126 million. But, they say, they have "taken steps" to make sure it doesn't happen again. They've announced new guidelines for advertisements, and have tweaked their algorithms to make it more difficult to spread salacious content.

Very likely, this is too little, too late for the social media platform. Congress is considering the passage of the Honest Ads Act, a measure that would require Facebook to create a public database of who purchased each political ad, and for how much. The Act apparently has bipartisan support, and is likely to pass both houses of Congress. Of course, once the government is regulating Facebook in one way, other fingers in the pie are likely to follow. So, social media's wild, wild West days are likely drawing to an end, no matter how much Mark Zuckerberg might wish otherwise. (Z)

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