Flynn Indicted

Special Counsel Robert Mueller indicted former NSA Michael Flynn on one count of lying to the FBI yesterday. Flynn went to court shortly thereafter and pleaded guilty. In theory he could get 5 years in prison for this, but Mueller asked the judge to delay sentencing until some later time. If Flynn sings like a canary, Mueller will undoubtedly ask the judge for leniency. That's how it works in cases like this. A good rundown of the facts from lawyers who understand this stuff can be found at Lawfare.

These are the very bare facts, but there is a lot more that is still unknown. First, there is a lot of low-hanging fruit that Mueller didn't put in his basket. He could have charged Flynn with violating the Foreign Agents Registration Act for working for Turkey and Russia without registering. That is a slam dunk. He could also have charged Flynn with violating the Logan Act, a 1799 law that says private citizens can't negotiate with foreign governments. In Dec. 2016, Flynn talked to Russian ambassador Sergey Kislyak in an effort to create foreign policy when he was still a private citizen. This is a clear violation of the Logan Act. The obvious reason that Mueller didn't charge Flynn with these offenses and others is that they made a plea bargain in which Mueller agreed to file just one charge and Flynn agreed to spill the beans on a bigger fish. Only five fish qualify as bigger than Flynn: Donald Trump, Donald Trump Jr., Jared Kushner, Paul Manafort, and Mike Pence. It is thought that Pence was out of the loop on much of what happened just before and after the inauguration concerning Russia, so the bigger fish is probably one of the first four, with Manafort a longshot.

It is known that Flynn talked with Kislyak on Dec. 28, 2016 (before Flynn became a government official), but it is not known what he talked to Kislyak about. That is very important. There are two possibilities (at least). One is that the bigger fish wanted Flynn to ask the Russians to veto or delay a resolution in the U.N. Security council condemning Israel for its settlement policy. Trump disagreed strongly with Barack Obama on that issue, but Obama was still President and Obama wanted to abstain rather than veto it. Bigger Fish might have been afraid that absent interference, the resolution would be a done deal by the time Trump was inaugurated.

The second possible subject of discussion was the sanctions that Obama slapped on Russia for meddling in the election. Flynn may have asked for Russia not to react for the moment. He may even had said (or implied) that after Jan. 20, the sanctions (including the old ones) might be lifted. Whatever he said, seems to have made an impression, since on Dec. 30, Russian President Vladimir Putin said that he wasn't going to respond to the new sanctions for the moment. Mueller presumably now knows which it is, but he is not talking quite yet.

Bloomberg is reporting that the Bigger Fish is likely Jared Kushner, claiming that he was the one to order Flynn to talk to the Russians. If Kushner was merely trying to affect the U.N. vote a few weeks before Trump was scheduled to take power, that might be a crime (conspiracy to violate the Logan Act) but it is certainly not a smoking gun related to Russian meddling in the election. If it was about rewarding Putin for helping Trump win the election, heaven help him.

There has long been speculation that Flynn would stonewall Mueller and bet on getting a pardon from Trump. Why didn't he do that? After all, Trump has gone to enormous lengths to defend his former NSA. For example:

Mike Flynn should ask for immunity in that this is a witch hunt (excuse for big election loss), by media & Dems, of historic proportion!

— Donald J. Trump (@realDonaldTrump) March 31, 2017

There are many more examples. Trump has never defended any other members of the White House staff who have left. Why Flynn? Most likely because he knows things that could incriminate Bigger Fish and maybe Biggest Fish.

So, again, why didn't Flynn just hold out for a pardon? The reason could be mundane or could be 3D chess. ABC News is reporting that Flynn is out of money due to mounting legal fees. He has hired some of the best in the business, but the downside is that these guys often want $1,000/hour. ABC is saying that Flynn plans to sell his house to help pay his lawyers. It is possible that he knew that a pardon might not be forthcoming for months, if ever, and he could run up a legal tab of hundreds of thousands of dollars, even if he avoided prison in the end. On the other hand, his fancy lawyers might have advised him that he could be indicted on state charges (e.g., failing to report income he got from Russia or Turkey when working as an unregistered foreign agent). In that case, a presidential pardon wouldn't help. Whatever the reason, he decided that cooperating with Mueller was a safer course of action knowing that while Trump is mercurial, Mueller is not. If Mueller promised him, say, 6 months in prison and a modest fine, he knew he could count on Mueller not double-crossing him. With Trump, no promise means anything. As a potential sign of good will, Mueller didn't insist that Flynn put up any bail, although Flynn has to check in once a week. In contrast, Paul Manafort had to put up $11 million in bail money.

The lists of takeaways have already started. Here is a list composed by Harry Litman, a former U.S. attorney and deputy assistant attorney general in Bill Clinton's administration.

• This is not a compromise between Flynn and Mueller; it is unconditional surrender by Flynn
• Flynn is a bigger deal than Manfort or Papadopoulos because Flynn was in the inner circle
• Flynn just became the prosecution's star witness
• The charge Flynn pleaded guilty to is itself stunning
• If Trump is the one who told Flynn to contact the Russians, that could be an impeachable offense
• Did Trump or Kushner (illegally) ask him to violate the Logan Act on behalf of Israel?
• Trying to undermine U.S. foreign policy before becoming NSA is even worse than lying to the FBI
• If Flynn tells Mueller all he knows, Kushner and Trump are probably in very deep doo doo
• If Flynn knows anything about Trump's firing of James Comey, that could bolster an obstruction of justice case
• If Flynn has flipped completely and knows where the skeletons are, Trump has fewer and fewer options

Probably the biggest unknown as of the moment is what Flynn knows that is so damaging to Trump that Trump defended him endlessly after reluctantly firing him. It is unlikely related to the U.N. resolution on Israel. That's small potatoes for Trump. Flynn must know much more. If is about collusion with Russia during the election campaign, Trump's goose is cooked and will be served for Christmas dinner. (V)

Senate Passes Tax Bill

On any other day, this would be the big story. Today, however, it gets pushed down the page because of the Michael Flynn news. That's certainly not a coincidence—Friday and Saturday night have always been the best times to bury a story; if there's some other big news to provide an additional distraction, all the better. In any case, Senate Republicans managed to pass a tax bill in the wee hours of the morning on Friday/Saturday (depending on your time zone), squeezing it through the chamber by a razor-thin 51-49 margin.

If the GOP bills become law in anything close to their current form—still a big 'if'—then it would be the largest tax cut since the Reagan years. And, in some very important ways, the House and Senate bills are love letters to St. Ronnie. They are based on the dubious trickle-down thinking that the Gipper so loved, they will give much money back to corporations, and they will explode the deficit and the national debt.

On the other hand, there are things about the Senate bill in particular that surely have Reagan spinning in his grave. He was, first of all, a believer in bipartisanship—not only because it was the right thing to do, but also because it was the politic thing to do. It's much harder for the other party to run against your bill if they voted for it too. Consequently, his 1981 tax bill was passed by a voice vote (making it de facto unanimous), while his 1986 tax bill was passed 97-3, with only Democrats Paul Simon, Carl Levin, and John Melcher voting 'nay.' Friday's vote, by contrast, was strictly party line, excepting that Bob Corker (R-TN) crossed the aisle to vote 'nay' with the 46 Democrats and 2 Independents.

Further, Reagan was also a believer in process (which goes hand-in-hand with bipartisanship, since it takes time to herd cats). With both of his big tax cuts, it took over a year to make the sausage—time that involved lots of public hearings, and economists' reports, and markups, and the like. By contrast, it is nearly impossible to imagine a process more haphazard and amateurish than the one that produced Friday's bill, as Senate Majority Leader Mitch McConnell (R-KY) & Co. rushed the process to the finish line while the Michael Flynn news was still hot. The senators did not get a copy of the nearly-500-page-long final bill until after 5:00 p.m. EST on Friday, and in that version, key changes were literally handwritten into the margins. Some of those were illegible by dint of terrible handwriting; others because the photocopy machine cropped the page wrong. So, even if some members would have liked to, you know, actually read the bill, that was literally not possible.

Now the Senate and House bills will be sent to conference committee, where Republicans from each chamber will try to iron out the still significant differences between the two. This being the case, we cannot be entirely certain as to potential impact until the final draft is ready. However, the Washington Post's Heather Long has a pretty good rundown of how things are shaping up, in terms of winners and losers:

Winners

• Donald Trump: If the bill passes, he will be able to declare victory on one of his campaign promises (maybe two, if the Senate's de facto repeal of Obamacare sticks). That will gloss over all the other campaign promises he has failed to deliver upon. Further, the GOP tax bill is likely to cause a short-term spike in the economy (then a long-term recession). Trump will take credit for the former, and then will hope to be out of town by the time the latter hits.
  
  
• Corporations: By the numbers, they will get a big tax cut. In reality, they will get a smaller—but still substantial—cut. They will also be able to repatriate money from abroad at a very favorable rate, and then pay substantially lower taxes on international profits going forward.
  
  
• Stock Market Investors: The benefits for corporations will, in the short term at least, mean bigger profits and thus higher stock prices and bigger dividends. Investors who know their history, however, will want to think about liquidating their holdings in about 18 months.
  
  
• The Middle Class: Generally speaking, the middle class will pay a little less in taxes, at least for a little while. That effect will go away unless key provisions of the current tax bills are extended by future Congresses. GOP leaders say that is surely going to happen, but if they can't get it done now, how will it get done once the debt explodes?
  
  
• Mitch McConnell, Speaker Paul Ryan (R-WI), Sen. Pat Toomey (R-PA): All of them invested a great deal of political capital in getting to this point, and all three will look very bad if they don't get something done. They are now getting close to "salvaging" 2017 for the GOP.
  
  
• Rich kids: It's going to be a lot easier for the children of the ultra-wealthy to inherit every bit of mummy and daddy's wealth, since the estate tax is either going to be killed (the House bill) or pared back (the Senate bill).
  
  

Losers

• The Democrats: In the short term, at least, the Democrats are set to suffer a major defeat. In the long term, they are going to run on this issue, presenting it (with justification) as taking money out of the pockets of the non-rich, and the Americans of future generations, so that corporations and the wealthy can have more money right now. Time will tell if this messaging serves the Party.
  
  
• Bob Corker: He's leaving the Senate next year, and until that time, he's going to be something of an apostate.
  
  
• People who care about the debt: There is no credible economic analysis that does not foresee the GOP tax bills adding at least $1 trillion to the national debt (over and above the amount that would have been added anyhow). Anyone who is concerned about this had a bad day on Friday. Note that does not include the House Freedom Caucus, which clearly cares about the debt only when it's Democrats who are doing the spending.
  
  
• Poor people: Millions of them are going to lose their health insurance if the GOP succeeds in killing the Obamacare mandate. Meanwhile, once the Republicans recover from their post-celebration hangovers, they are going to realize that they've got to do something to try and balance the books a little better. Programs that benefit poor people—WIC, for example, or SNAP—are likely targets.
  
  
• Puerto Rico: The changes to the corporate tax code will effectively kill the loophole-type benefits that come from incorporating in Puerto Rico. Between that and the hurricane devastation, the big corporations that do business there—Quest Nutrition, Reliant Asset Management, Medtronic, etc.—are likely to flee.
  
  
• The Ivies: A clause in both tax bills would tax the endowments of some universities. The terms are such that it would apply only to schools that have fairly small enrollments and very large piles of money in the bank. In other words, most of the Ivy League schools (and Stanford).
  
  

Too Early to Tell

• College students: Graduate students generally work as research assistants or teaching assistants, and in exchange for this are paid a modest salary and are given a waiver on their tuition. The House wants to start taxing those tuition waivers, despite the fact that the money involved is never actually in the hands of the grad students. This change would make grad school non-viable for a great many students. The House also wants to kill the deduction for interest on student loans, which would affect both grads and undergrads. The Senate bill has neither of these provisions.
  
  
• People with big medical expenses: Currently, major medical expenses are deductible. The House wants to stop that, the Senate does not.
  
  
• The Dreamers: Reportedly, Sen. Jeff Flake (R-AZ) only voted for the current bill because he got a promise that some protection for the Dreamers would be adopted. If he sticks to his guns, he might be a position to single-handedly make sure that happens.
  
  

Again, all of this is tentative. Paul Ryan squeezed his bill through the House with nine votes to spare, McConnell squeezed his through the Senate with just one. Now they have to try and find a middle ground between the two within these razor-thin margins of error. It's true that the GOP really wants and needs to get this done, but it is also true that the differences between the House and Senate bills reflect real and substantive distinctions in the political realities faced by the officeholders in each chamber. For example, there are plenty of Representatives who don't need to worry much about elderly voters, or student voters. Every senator has to think about those folks, though. And every time one chamber or the other backs down off of one of their key provisions, then an agreement also has to be reached on some sort of counter-balance. For example, if the House backs off its student loan provision, then the Senate has to agree to some other source from which that money can be raised. Already, the members are pushing their luck with the financial limits allowed by the reconciliation process; they can't just take on a few hundred billion more in debt to smooth over their differences.

That's not the only problem, though. The members who voted 'nay' on the current versions of the bills are almost certainly going to remain 'nays.' If they were gettable, they would already have been gotten. The ones who voted 'yea,' on the other hand, are not guaranteed to remain 'yeas.' The fence-sitters are going to get an earful from constituents and from various lobbyists over the next week or two, and could grow skittish. Further, a lot of tentative promises have been made to get a Jeff Flake or a Susan Collins (R-ME) or a Lisa Murkowski (R-AK) on board; if those promises do not come to fruition pronto, they may jump ship. Perhaps most importantly, the individuals who voted for the House or the Senate bills did so knowing that they would not become law. Some of those folks may well have voted 'yea' just to keep the process moving along, knowing they would still have time before needing to make a final decision. Sen. John McCain (R-AZ) or Sen. Ron Johnson (R-WI) may well have been thinking in this way. It's also possible that some members were hedging their bets, setting themselves up to say something like, "I gave my vote to tax cuts, but then the final version of the bill was just a bridge too far."

Point is, this story hasn't reached its end yet. And the Republicans have roughly two weeks left to try to write the happy ending that they envision. It won't be easy, given how much sausage remains to be made. (Z)

Today's Congressional Sexual Harassment News

Treating women in the boorish ways that many members of Congress apparently did is both morally reprehensible and politically foolish. But if one insists on behaving in that matter, and then one gets caught, well, one should try to make sure that happens on a day when there are two other major news stories.

The two highest-profile members to be ensnared in the current wave of accusations, Rep. John Conyers (D-MI) and Sen. Al Franken (DFL-MN) both remain under great pressure to resign. Conyers, for his part, says he will make a decision in the next several days. He's been having health problems, which could provide cover and/or extra reason for him to throw in the towel. If he does go, meanwhile, members of the Congressional Black Caucus are going to start asking some very pointed questions about why he was pushed out while Al Franken was not. Those optics alone may leave the Minnesota Senator with no option but to resign.

Two other members of the House may also have sown what they reaped on Friday. Rep. Ruben Kihuen (D-NV) was accused of sexually harassing a female campaign worker back in 2008. House Minority Leader Nancy Pelosi (D-CA) and the leaders of the DCCC have called on Kihuen to resign. He says he will not do so, but Pelosi & Co. have a way of making junior members change their minds about things like this.

Also in hot water is Rep. Blake Farenthold (R-TX). For several days, it was known that an unnamed member of the House made crude sexual overtures to a female staffer, was rebuffed, fired the staffer, was sued, and used $84,000 of the government's money to make the problem go away. It was revealed on Friday that, of course, Farenthold was the guy. He's surely going to be compelled to return the $84,000. And while Republicans can't do much about the serial abuser in the White House, or the one that may soon be representing Alabama in the Senate, they are going to work very hard to force Farenthold into retirement so they can say they take sexual harassment seriously, too. The red team will have to hurry, though, because the deadline for a possible replacement candidate to get on the 2018 ballot in Texas is December 11. (Z)

Gowdy Used Government Money to Settle Lawsuit

It turns out that Blake Farenthold isn't the only Republican to get himself into trouble and then to use government money to buy his way out. Rep. Trey Gowdy (R-SC) did it too, it was revealed on Friday.

In Gowdy's case, it is not about his attitude toward women in general, but his views on one specific woman. He pursued Hillary Clinton in relation to Benghazi with a fervor that would have made Tomás de Torquemada blanch. He also expected the same level of commitment from his staffers. One of them, Bradley Podliska, was unwilling to devote all of his time to Clinton-related matters. He also took time off from work to fulfill his legal obligations as an Air Force reservist. For these reasons, he says, he was fired. It would seem that there was merit in the claim, because Gowdy used $150,000 of the government's money to settle the claim.

Gowdy is pretty powerful, so he is likely to be able to resist any pressure that might be applied to him to resign or to pay the money back. Indeed, he might make this something to campaign on—"Sometimes I get myself into trouble because I'm just so committed to fighting the Democrats and the Clintons." That said, he's probably fortunate that this story is going to get very little attention today, in view of all the other big Friday news. (Z)

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---The Votemaster and Zenger