New Senate: DEM 48 GOP 52
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What Does Mueller's Grand Jury Mean?
Special counsel Robert Mueller has impaneled a grand jury. What does this actually mean? For starters, it is important to understand the difference between what Mueller is doing and what the Senate and House Intelligence Committees are doing. Mueller is a prosecutor and he is looking to see if any federal crimes were committed related to Russian interference with the election or other things stemming from it. The congressional committees are merely trying to understand what happened, and are not looking for crimes. Under the Constitution's Fifth Amendment, no one outside of the military can be accused of a crime unless indicted by a grand jury, so Mueller needs one to get indictments. Does this mean he is close to indicting someone, then? No. The grand jury can also issue subpoenas, which is what he needs right now. That said, prosecutors rarely convene a grand jury unless they are convinced that they have evidence that a crime has been committed.
Politico has a nice article on how grand juries work (or you can watch this). They work in secret—sort of. The grand jurors, between 16 and 23 ordinary citizens selected by a court, are forbidden from making their work public. Same for the prosecutor. However, witnesses are free to call a press conference as soon as they leave the grand jury room. When a witness testifies under oath, normally only the judge and a court reporter, the witness, the prosecutor, and the grand jurors are present. Witnesses do not have a right to bring a lawyer. However, a witness' lawyer can make a deal in which the lawyer is present, along with an FBI agent. The trade-off is that the lawyer can object to questions he thinks are inappropriate, but since the witness is now giving information to an FBI agent and lying to an FBI agent is a crime, it raises the stakes for the witness. Lying to the grand jury itself is also a crime, of course (perjury), so even without a G-man there, a witness has to watch their p's and q's. (V)
This Is the Kind of Thing Mueller Is Looking For
Given the hires that he has made, Robert Mueller clearly suspects that Donald Trump has engaged in some sort of financial malfeasance in his past. Given the President's great wealth and dubious integrity, Mueller is almost certainly right about that. With the information currently available, those of us who are not special counselors cannot be certain, but even we can see some decided problem areas for the Donald. For example, an April 2016 transaction in which Trump sold two apartments to his son Eric for a price that appears to be far below their market value.
The Washington Post asked a pair of tax attorneys, David Herzig and Bridget Crawford, to examine the available evidence, and they do not like what they see. The pair considers all of the possible permutations, in the event that the transaction might have been legitimate. The apartments may have been badly damaged, for example, and so not worth the usual market value that real estate in that area would command. Except that they were listed for sale two months before the Trump-to-Trump transaction for more than twice their Trump-to-Trump sale price.
It's also possible that on his federal returns, the President counted the difference in sale value vs. actual value of the properties towards the $5.49 million in gifts he's allowed to give to his son over the course of his lifetime, or else that Trump Sr. paid gift tax on the transaction. Either of these things would be entirely legal. However, on the real estate forms the Trumps filed in New York State (which are a matter of public record), the transaction was handled as if it was a sale between strangers. None of the "this is a transaction between relatives" boxes were checked, nor were any "this is a transaction between relatives" deductions claimed. While it is theoretically possible for the President to handle the transaction as being "between strangers" on the state paperwork, and "between relatives" on the federal paperwork, it would be very strange to do so, since that would be tantamount to throwing away money. The two authors of the WaPo piece have not seen that done in 40 years of combined experience.
Adding it all up, the evidence is very strong that Donald Trump stiffed the government out of about $350,000 in taxes. The penalty for merely filing an incorrect return is a fine of up to $25,000, up to a year in prison, or both. However, if the court finds that the failure to file was fraudulent—that is, a deliberate attempt to avoid paying taxes—the possible penalties jump to $100,000 and 5 years in prison. And the transaction in question here is, by TrumpWorld standards, relative peanuts. Who knows what Mueller might find when he looks at the transactions where the real money was changing hands, particularly when those hands are in different countries? (Z)
House Republican Staffers Made a Secret Trip to London to Try to Contact Steele
It has now come out that two House Republican staffers made a secret trip to London earlier this summer in an attempt to locate Christopher Steele, who wrote a 35-page dossier on Donald Trump last year. The House Republicans didn't tell the Democrats about their plan. The trip also increased tensions between the House and Senate committees investigating Russiagate, not to mention Robert Mueller. The chairman of the Senate Committee, Richard Burr (R-NC), has accused the House of getting in its way. The House Committee is far more partisan than the Senate one, and sending a couple of spies to spy on the spy fits the pattern. The two committees are looking at the same documents and interviewing the same witnesses, but are not cooperating.
The 53-year-old Steele, a former MI6 agent, has said nothing since his dossier became public and has gone into hiding. Donald Trump has denounced the dossier as fake, but a few (minor) parts have already been shown to be true. Since he is a British citizen living in the U.K., he can't be forced to testify before the Senate or House committees or before Mueller's grand jury. (V)
Trump Claims Credit for Jobs Report
The U.S. added 209,000 jobs in July and the unemployment rate dropped from 4.4% to 4.3%. Donald Trump immediately claimed credit for the improvement, even though during the campaign he said that the monthly jobs reports were fake. He said that his economic plan is boosting growth, even though he hasn't even presented an economic plan yet, let alone gotten it through Congress.
He also trumpeted the 9% gain in the stock market as his doing, failing to note that in the first 6 months of Barack Obama's term the market went up 23%. In the first 6 months of George H.W. Bush's term, it went up 20%. But Trump should be careful taking ownership of good economic news. If things head south later—and with the current bull market over 8 years old it is likely to do so before long—he is going to have a hard time explaining why when the market goes up it is due to him but when it goes down, it is not. (V)
Polls Have Bad, Worse, and Worst News for Trump
Donald Trump couldn't wait to get onto Twitter to share the latest jobs report, so much so that he violated a federal rule that requires him to wait an hour after the report's release (the second time he's broken that rule). He's not going to be so eager to share the latest polls, though. He's doing dismally in all surveys; even the GOP-friendly Rasumussen Reports has him at 39% approve, 59% disapprove. Meanwhile, the latest Quinnipiac poll produced his worst result to date, 33% approve, 61% disapprove. That's a staggering 28 points underwater.
The news gets even worse for Trump when we look more closely at the numbers. As CNN's Ryan Struyk and the Washington Post's Philip Bump both point out, the data suggest strongly that Trump's base is losing enthusiasm for him. His "strongly approve" numbers have dropped by about 10 points, so too have his "optimistic about the future" numbers among Republicans. The President is also going backwards among Republican voters in their assessment of every personality trait that matters. In Quinnipiac's polls since taking office, he's dropped 5 points on the question of "the president cares about me," and slipped even worse on "intelligent" (down 6 points), "strong" and "honest" (each down 8 points), "shares my values" (down 10 points), "level-headed" (down 14 points) and "is a leader" (down 22 points).
And finally, we get to the worst news of all for Trump: The economy's good right now. The stock market's up and there is effectively full employment. It's a rare feat to have an economy so strong, and approval numbers so weak. And what will happen if a downturn comes, as is likely? It won't be pretty. (Z)
The Obama-Trump Voters Were Actually Republicans
A number of analyses of the 2016 election have noted that there were a substantial number of voters who supported Barack Obama but also voted for Trump in 2016. They assumed these were Democrats who were deserting their party. A new analysis shows something quite different. To start with, people often forget whom they voted for last time. The nonpartisan Democracy Fund Voter Study Group contacted the same voters in 2016 as in 2012, so they really know how many Obama-Trump voters there were. They say the number is 9%, and not the 13% often reported.
But they found something even more notable: Most of those voters were actually Republicans. In other words, the anomaly is not that Democrats voted for Trump in 2016, but that Republicans voted for Obama in 2012. They are really Bush-Obama-Trump voters, which changes the picture considerably. This means that if the Democrats change their policies to be more like Trump, they probably won't win these voters next time, since they are fundamentally Republicans, not Democrats who simply disliked Hillary Clinton. (V)
Did Heller Make a Deal with McConnell?
There can't be many politicians who played their hand worse during the health care fiasco than Sen. Dean Heller (R-NV). Facing a tough re-election campaign as the only GOP senator running in 2018 in a state that Hillary Clinton won, he came out against Senate Majority Leader Mitch McConnell's (R-KY) original bill, and was pilloried on television by Donald Trump. Those things will not leave a good taste in the mouths of Republican voters. At the same time, Heller ended up voting for the failed "skinny repeal," which will not leave a good taste in the mouths of independents and Democrats. These developments may have a little something to do with the tumble that Heller's approval rating has taken. It's down to 22%, while his disapproval is at 55%, leaving him 33 points underwater. That's almost Chris Christie territory.
Now, there's more bad news for the Senator, as it's become public knowledge that McConnell's super PAC will spend at least $1 million to help Heller keep his seat. This may not have been a total quid pro quo—$1 million in exchange for a "yes" vote—but it was surely part of the broader discussion. And the optics are very, very bad—it's only a matter of time until Nevadans are seeing commercials about how their senator was willing to sacrifice their health care for a million bucks. (Z)
Manchin Is Now Isolated
When Gov. Jim Justice (R-WV), the richest man in West Virginia and owner of many coal mines, got elected in November as a Democrat, Sen. Joe. Manchin (D-WV) thought he had an ally and surrogate. With Justice's switch to the GOP, Manchin lost his only ally in the state and may have acquired an election opponent in his 2018 reelection race.
Immediately after Justice's announcement, the state GOP got to work. It put together a video showing Justice close to Donald Trump as well as Manchin praising Hillary Clinton—clearly damaging material in a state Trump won by 40 points.
West Virginia, one of the poorest states in the country, used to be solidly Democratic, but has become solidly Republican practically overnight. Republicans gained control of the state legislature in 2014 for the first time in 83 years. Furthermore, when Shelley Moore Capito was elected to the Senate in 2014, she was the first Republican senator from West Virginia in 55 years.
Are these new developments going to cause trouble for Manchin? Certainly, but whether they will be fatal remains to be seen. Manchin's approval remains at a healthy 57% and he has close to universal name recognition in the state as a result of his two terms as governor. Manchin's biggest problems may not come from Republicans, but from Democrats. Progressive Democrats are constantly attacking him for his pro-coal, pro-gun positions. Republicans are surely going to use some of that material in 2018. However, given the views of West Virginia voters, a video clip with some well-known progressive Democrat yelling: "I hate Joe Manchin. He's anti-environment and pro-coal. He's not even a real Democrat" could surface. Come to think of it, maybe Manchin could ask Sen. Elizabeth Warren (D-MA) to make the clip for him. (V)
Kid Rock Outpolls Stabenow
There is a chance that rap-rocker Kid Rock's announcement that he is running for the U.S. Senate was made just to get some publicity and sell some t-shirts. It's possible it was serious. It's also possible that it was for publicity, but that it will get serious if it seems he might win. That latter scenario might be called the Trump maneuver. And if Rock is indeed following the Trump template, his chances of actually running just got a little better, since a poll released Friday has him leading Sen. Debbie Stabenow (D-MI) by 4 points.
Now, this result comes with all kinds of grains of salt. More like boulders of salt, actually. To start, the pollster has only been in business for a few months. It has no track record, and at the same time has motivation to garner some attention with, say, some surprising news about a rock-star-turned-politician. On top of that, while Rock did outpoll Stabenow 30-26, 40% of the respondents were in the "undecided" category. Finally, while the good people of Michigan are well aware of their Senator's shortcomings, whatever they may be, the Democrats have not yet had a chance to make them aware of the singer's shortcomings. So, Rock should probably hold off on picking out new office furniture for now. And yet, even a still-too-early poll by an unknown pollster reminds us that we are now in an era where there's no such thing as "not qualified for political office." (Z)
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