Aug. 23



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Takeaways about Cohen and Manafort

The twin stories of Michael Cohen and Paul Manafort's pleas/convictions are dominating the news, so naturally there are some "takeaway" stories. Here are a few of them:

New York Times

• The Stormy Daniels cover-up almost fell apart when it wasn't done 2 weeks before the election
• Cohen didn't destroy evidence of the Stormy deal as instructed by the National Enquirer's owner, David Pecker
• Cohen frequently lied to banks going back years
• Cohen actually ran a successful business leasing taxi medallions, but hid his income from the IRS
• He also hid income from consulting and property sales
• Cohen might yet turn state's witness in the Russiagate affair

Washington Post

• Did Trump commit a crime?
• How is Trump's company implicated in all this?
• What else does Cohen know about Trump?
• Will Manafort flip?
• Will Trump pardon Manafort?
• Will Trump get impeached?

CNN

• Tuesday could mark the beginning of the end of Trump's presidency
• Manafort's trial sheds light on Mueller's potential collusion case
• Trump's Teflon may not be so durable
• The prosecution would be wise not to get greedy (i.e., don't retry Manafort on the mistrial counts)
• Manafort's only hope is a pardon
• Manafort's guilty, but his fate is uncertain (judge could be lenient, appeals, pardon)
• Mueller and the jury were winners; Trump, Ellis, Manafort, and Gates were losers

NPR

• This was a potentially consequential day in the Trump presidency
• Yesterday proved how dangerous Mueller is for Trump
• In the Trump era, hard, incontrovertible evidence is the key to winning public opinion
• Will another shoe drop before the 60-day "no-bombshells-before-elections" rule cuts in?
• Tuesday gave the Democrats lots of ammo that Republicans are corrupt
• Trump says that when he is hit, he hits back harder? Will he? How?

The Federalist

• Nothing that happened on Tuesday relates to Russiagate
• Fraud is bad and Manafort and Cohen are corrupt individuals
• How come shady Democrat Tony Podesta got away with it and Manafort paid the full price?
• Adultery is wrong and infidelity is destructive
• Campaign finance law violations might or might not implicate Trump
• The elite establishment may overreach and try to hang Trump for crimes committed by two minor crooks

In short, most observers think Tuesday could mark the beginning of a new era in Trump's presidency, and it might not be a good one for him. However, right-wing media like The Federalist just see a couple of sleazy crooks who got caught while other sleazy crooks get away with it. It's not fair. (V)

Manafort Juror Dishes on Deliberations

It took a little longer than expected, but one of the Paul Manafort jurors gave an interview to the media (specifically, Fox News) on Wednesday about the jury's deliberations. Her name is Paula Duncan, and she told Fox that she is a loyal Trump supporter. The main revelations:

• Duncan very much wanted to find Manafort not guilty, but the evidence was too overwhelming.
• The jury ignored the testimony of Rick Gates, because they felt he was compromised by his plea bargain.
• The 10 counts that were hung were all due to a single holdout juror.
• The deliberations often got heated, and there were tears more than once.
• The named of Donald Trump and Jared Kushner came up a number of times, because they are referenced in documents related to the case. However, Duncan does not think that their involvement was significant to the jurors' conclusions.

This is pretty much all bad news for Manafort as he (presumably) preps for his next trial, for several reasons: (1) Of the 216 votes the prosecution needed for conviction on all 18 counts, they got 206 of them, (2) The evidence was so good, it even won over Trump loyalists, and (3) The evidence was so good, Rick Gates' devastating testimony wasn't even necessary. If the Washington, D.C. trial actually goes forward, Manafort's lawyers are going to have to dig deep for motivation. (Z)

Cohen Will Refuse a Pardon

Talk about burning your bridges behind you. Yesterday, former fixer and current felon Michael Cohen announced to the world through his lawyer that if Donald Trump pardoned him, he would not accept the pardon (English translation: Mueller, hurry up and call my lawyer. I don't have all day, you know.). It was unlikely that Donald Trump would pardon Michael Cohen because he is clearly a loser, facing years in prison, but just in case he was thinking of it, Cohen's not interested. He is betting his life on making a deal with special counsel Robert Mueller, who so far is playing coy about whether he is interested in talking to Cohen. In the end, Mueller will probably talk to Cohen and ask what he has of interest to offer. From Mueller's perspective, he has nothing to lose and Cohen might have information he doesn't know anything about (more extramarital affairs, money laundering, collusion, etc.)

In case Mueller didn't get the message, Cohen's lawyer Lanny Davis said out loud yesterday: "Michael Cohen knows information that would be of interest to the special counsel." Sounds like Cohen and Davis would like to chat with Mueller, but maybe Mueller is holding off to make them sweat a bit. It would be malpractice for Mueller to ignore repeated statements from one of Trump's closest associates for years that he has dirt on Trump and he is willing to share it. Maybe Cohen wants to talk only about Russian adoptions, but Mueller will have to talk to him to find out what, if anything, he has that could be useful. (V)

Trump Loves Manafort, Dings Cohen

Donald Trump didn't react to the Manafort trial or Cohen plea on Tuesday very much, but yesterday he let his views be known (spoiler: He likes Manafort, doesn't like Cohen). Here is what he had to say:

I feel very badly for Paul Manafort and his wonderful family. “Justice” took a 12 year old tax case, among other things, applied tremendous pressure on him and, unlike Michael Cohen, he refused to “break” - make up stories in order to get a “deal.” Such respect for a brave man!

— Donald J. Trump (@realDonaldTrump) August 22, 2018

And about Cohen, he got a bit snarky:

If anyone is looking for a good lawyer, I would strongly suggest that you don’t retain the services of Michael Cohen!

— Donald J. Trump (@realDonaldTrump) August 22, 2018

The tweets are hardly surprising, except maybe that Trump didn't smash Cohen harder and just settled for a wisecrack. Most likely Trump is disappointed in Cohen more than he is angry. He went off on a pardoning spree earlier this year as a not-so-subtle message that he is fully aware of the power of the pardon and is willing to use it to help people he likes. Cohen is clearly out now, but Manafort has a shot at one. However, top Republicans are telling Trump that pardoning Manafort would be a terrible idea. Senate Republican Whip John Cornyn (R-TX) said that a pardon "would be a mistake." Sen. Susan Collins (R-ME) said: "It would be an enormous mistake and misuse of his power to pardon." Sen. John Thune (R-SD) said he is not aware of any circumstances that would warrant pardoning Manafort. Sen. Lindsey Graham (R-SC) put it this way: "You've got to earn a pardon. I think it would be seen as a bridge too far."

What all these senators mean is that the political fallout from a pardon would be disastrous for Republicans. Democrats would be outraged and vote in large numbers. They want to avoid that at all costs. But they may not get their way. Trump is famous for ignoring outside advice and rewarding or punishing people based entirely on their perceived loyalty to him personally. In that respect, Manafort passes the test. (V)

Pardons are No Panacea

There is no doubt that Donald Trump regards the pardon power as his anti-Mueller kryptonite. And regardless of the advice that he gets from Republican insiders (see above), he will use it as soon as he decides that the benefits outweigh the political fallout. However, as revealed in conversations that Vox had with a dozen legal experts, there are several other major problems that Trump may or may not be aware of:

• Obstruction: While Trump certainly has the right to issue pardons, he cannot do so in order to facilitate his own criminal behavior—for example, obstruction of justice. Julie O'Sullivan, a professor of law at Georgetown University, observes that, "[If] the president is shown to have pardoned [Jared Kushner, Michael Cohen, Michael FLynn, or Paul Manafort] to avoid his own personal exposure in the Russia investigation, that in and of itself could constitute obstruction of justice."
  
  
• The Fifth Amendment: While there are some circumstances in which this would not hold, generally speaking, someone who is pardoned is no longer covered by the Fifth Amendment, since they can no longer incriminate themselves. Asha Rangappa, an associate dean at Yale Law School, says, "If President Trump pardons subjects of Mueller's investigation, they will be unable to claim their Fifth Amendment rights if they are asked to testify under oath. In theory, this would then facilitate Mueller's investigation, as these individuals would have to tell Mueller everything they know."
  
  
• State Prosecutions: We've pointed this out many times, but it bears repeating: The President can only pardon people for federal offenses. Manafort and Cohen (not that Cohen is likely to get a pardon; see above) have both done many things that might run afoul of state law. Presumably, Robert Mueller needs only place a single phone call to New York AG Barbara Underwood or Virginia AG Mark Herring to get the ball rolling. Or, a state-level law enforcement official might move forward of their own volition. In fact, the New York State Department of Taxation and Finance has already subpoenaed Cohen, so they can have a chat about the Trump Foundation's charitable (sic) activities. Also, although she is a longshot, Zephyr Teachout, a Fordham University law professor, is running for the Democrat nomination for NY AG and her platform consists primarily of indicting Trump for all the New York state laws he broke. The New York Times endorsed here today, although newspaper endorsements are not worth much any more.

In short, for those who are accused (or convicted), a pardon does not really solve their problems, as they can still be nailed for state-level crimes, and they can still be compelled to tell what they know about Trump. The only path forward, if the goal is to minimize prison time/fines, is to play ball with Mueller. And for Trump, pardons not only do not guarantee that his associates won't flip, they arguably make it more likely, while at the same time deepening his exposure on obstruction of justice (and, possibly, other crimes). (Z)

Trump's Next Problem: Michael Avenatti

Stormy Daniels (nee Stephanie Clifford) has sued Donald Trump to get out of a nondisclosure agreement relating to the $130,000 in hush money Michael Cohen paid her. The judge in that case, S. James Otero, put the trial on hold pending the outcome of Cohen's case. It can now go forward. Daniels' media-wise lawyer, Michael Avenatti, is champing at the bit to subpoena Trump and get him to answer a few questions in court, under oath. He also now believes that his case has been greatly strengthened by Cohen's plea. If indeed the purpose of the payoff to Daniels was to help win the election, then the NDA itself is part of a criminal conspiracy, and a contract whose purpose is to break the law cannot be enforced. He is certainly going to make that point forcefully to the judge.

If the judge issues a subpoena for Trump to testify, the Supreme Court will certainly back it up since it voted 9 to 0 in the Paula Jones case that a sitting president must testify in a civil case against him. The circumstances here are very similar. If Avenatti, who is a very sharp cookie, gets to examine Trump on the witness stand, he will make mincemeat of Trump. For example, imagine this exchange:

Avenatti: Do you believe in the Ten Commandmants?
Trump: Yes, absolutely
Avenatti: All 10 of them?
Trump: Yes
Avenatti: Have you ever committed adultery?
Trump: No

Bingo, perjury. This is what got Bill Clinton impeached and Clinton is a lawyer and far more crafty than Trump. However, the deposition is not going to take place this week and probably not even before the midterms. Otero has made it clear that he does not want his courtroom to be turned into a political circus, and holding discovery before the midterms would do precisely that, so Trump probably will get some breathing room here. On the other hand, if the Democrats win the House and Trump commits perjury in December or January, well, Katy bar the door. (V)

Maybe Trump Should Resign

If the pardon power is not Donald Trump's "Get out of Jail Free" card (and it's likely not; see above), then what can he do to save himself, if push comes to shove? Writing for Forbes, Laurence Kotlikoff argues that Trump should seriously consider a Full Nixon—resign, and as soon as possible. He suggests that looking at it in terms of a cost-benefit analysis, Trump would enjoy mostly benefits from saying "You're fired!" to himself. Specifically:

• Trump could, presumably, negotiate forgiveness for himself and his family for all crimes committed (or possibly committed) from the beginning of time up to the present day. Given that there is a real risk of impeachment and conviction at some point, and an even greater risk of criminal prosecution when Trump leaves office (for conspiracy, or obstruction, or money laundering, or who knows what else), this may be his best (and possibly only) way to avoid prison time.
  
  
• It is clear, to anyone who listens Trump speak or reads his Twitter account, that the pressure of this situation is weighing heavily upon him. That kind of stress is not good for anyone, but it's particularly problematic for a 72-year-old whose cardiovascular health is questionable.
  
  
• Now that Trump has set the GOP agenda for the foreseeable future (walls, trade wars, etc.), more of his program might actually get implemented if he leaves office, and lets the grown-ups (i.e., Mike Pence) do the politicking of the sort Trump has no patience for.
  
  
• At some point, and that point may have arrived on Tuesday (or maybe even before that), Trump is going to do the GOP more harm than good at the polls. If he leaves office, he can cancel that effect out, to some extent.
  
  
• Trump does not like being president, and he does like playing golf, and making business deals, and going on TV shows and giving wild interviews, and the like. If he quits, he can go back to the life he enjoys.
  
  
• If Trump leaves office (with pardon in hand), he can spend the rest of his days talking about how much he achieved in just two years in office, and how he was never convicted of anything, and how he never lost an election.

There are, of course, some downsides to resigning—no more rallies, no more having the whole world watching for his every tweet, no more hobnobbing with world leaders. However, these may be a small price to pay for all the (potential) benefits. Implicit in the argument is that the clock is ticking; every day that Trump hangs on, the risks to him get greater, and the chances he can resign his way out of trouble get smaller. And, of course, if he runs for re-election and loses, then all bets are definitely off. (Z)

Untrained Teenager Shows How to Wipe Out a Voting Machine in 5 Minutes

We keep running stories about kids hacking elections because there are so many of them. Politico has a first-person account by high-school senior River O'Connor about how he brought down a replica of a state voting machine in under 5 minutes, and O'Connor admits that he is not an expert hacker. He just spent a bit of time using Google to find instructions on how to do it. Most likely, Russian hackers working for the FSB or GRU can skip that step.

What O'Connor did was not change vote totals, like some of the other hackers at the DEFCON conference in Las Vegas. He wiped out the voting machine, causing all the votes it had previously recorded to be lost forever. He made the point in his article that if someone who has as little computer background as he has can do this, it would be child's play to a pro. A Russian hacker armed with a map could probably figure out which counties to attack to wipe out votes in order to help the desired candidate in a statewide election, such as one for president, senator, or governor.

O'Connor concludes his piece with the statement: "Unfortunately, the people who have the power to do something about this issue are in denial." He's hardly the first one to point this out, of course, but when we get a stream of untrained children and teenagers who can wreak havoc with elections, perhaps it is time for the grown-ups to pay attention and do something? The reality, of course, is that the only thing that will light a fire under congressional Republicans is someone who hacks a voting machine and has it record 100% of the votes for the Democrat. But as long as Republicans expect the Russians to help them, securing elections is a low-priority item. (V)

New Tariffs Kick in Today

This story has flown under the radar a bit. Perhaps there have been other things going on vis-a-vis Donald Trump; we'll have to have our staff researcher check into that. Anyhow, the latest wave of tariffs on China kicked in today at 12:01 a.m EDT. Another $16 billion in imports, mostly industrial chemicals and transportation-related goods, will be hit with a 25% assessment. The Chinese, as they said they would, responded instantly with 25% levies on $16 billion in American imports, focused particularly on certain agricultural commodities, industrial chemicals, and diesel fuel.

The tariffs will likely have a fairly small impact on the nation as a whole. $16 billion is a fairly small slice of the overall trade between the two nations, and Wall Street has gotten to the point of tuning out most of what the administration does. "The market has known there's a political circus in DC for the entire time of the Trump presidency," observed stock analyst Nicholas Colas. The tariffs will, of course, have a palpable impact on certain industries and communities—where, thanks to the choices made by the Chinese, Trump voters are disproportionately represented. It will be very interesting, once there is time to crunch the midterm voting data, to see if voters in places targeted by the Chinese (say, Iowa) express their displeasure with their ballots (or by staying home). (Z)

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