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A Tale of Two Rats
Donald Trump's former campaign manager, Paul Manafort, and Trump's former all-purpose fixer, Michael Cohen, both decided to switch sides and rat out their former boss. However, the way the stories about the two rats have played out and the paths they chose to follow couldn't have been more different.
Manafort, who was convicted on eight counts of tax fraud, bank fraud, and failure to disclose a foreign bank account in Virginia and then pleaded guilty to another charge in D.C. involving financial crimes, finally decided to cooperate with special counsel Robert Mueller to get his sentence reduced. Or so everyone thought.
On Monday, Mueller revealed that Manafort had violated his plea agreement by lying under oath, a federal felony. The special counsel went back to court and wants Manafort sentenced right now, probably with the maximum sentence, which would mean decades for the 69-year-old admitted criminal.
But the real bombshell came a bit later when it came out that Manafort's lawyer, Kevin Downing, has been briefing Trump's legal team all along on what Mueller knows. This is certainly unethical and probably illegal. If it is true, then Manafort's plea bargain was in bad faith and his strategy was to be a mole within Mueller's team with the intention of feeding information about where Mueller is and what he knows to Trump in hopes of showing his loyalty to Trump (the one thing Trump truly respects). The end game here for Manafort would be a pardon for any and all federal crimes he committed. Sure enough, right on cue, Trump responded to questions about a possible pardon with: "Why would I take it off the table?" So it might have been Manafort's intention all along to dupe Mueller and pretend to cooperate (while lying through his teeth) but to really be engaged in helping Trump get valuable information and be rewarded with a pardon. Smart guy!
But maybe not smart enough. As FBI director for 12 years, Mueller has dealt with rats before and knows all too well that some of them are not very trustworthy. It is entirely possible he suspected from the beginning that Manafort was up to no good. After all, if Manafort just wanted a good deal for himself, he would never have demanded a trial in Virginia. Instead, he should have made a deal with Mueller immediately and told him everything in return for a big fine and 6-month sentence. Given this rather sizable clue, Mueller might well have been playing a little game of double-agent himself, and may have fed Manafort misleading or incomplete information. Trump may then have answered Mueller's written questions based on this information. As a consequence, Trump may have committed perjury in his answers. His agitation this week could well be due to his slowly realizing that he may have been had.
And Manafort clearly wasn't thinking this through carefully. He earned tens of millions of dollars helping miscellaneous sleazy authoritarians all over the world. He hid that money in off-shore bank accounts that he did not report to the Treasury Dept., as required by law. Also, he didn't mention any of this loot to the IRS or state authorities on his tax returns (returns that Mueller probably has).
We bring this up because evading state income tax is a state crime, which only the governor of the relevant state can pardon, not the president. If Trump pardons Manafort for his federal crimes, Virginia AG Mark Herring (D) and/or New York AG-elect Letitia James (D) could indict Manafort on charges of evading state income tax or falsifying financial records. Mueller is well aware of this, of course, and is working with the state AGs. Furthermore, Manafort's admission that he committed various crimes is admissable as evidence in a state trial. The Fifth Amendment's protection against double jeopardy does not protect a defendant from successive federal and state prosecutions, only from two prosecutions from the same entity. Some states (including New York) have a broader definition of double jeopardy than the federal one, but in 2011, New York amended its double jeopardy law to allow successive prosecutions for federal and state tax evasions. In addition, Manafort's trial produced a hung jury on four counts of bank fraud charges relating to his dealings with the Federal Savings Bank in Illinois. Illinois law specifically allows a retrial under state law after a mistrial. So Manafort could end up on trial in New York and/or Virginia for tax evasion and in Illinois for bank fraud. Finally, a pardon would not protect Manafort from civil litigation and civil asset forfeiture at the state level. In short, a pardon would not solve all of Manafort's problems.
Now on to the second of our rats, Michael Cohen. Yesterday he dropped his own bombshell in a federal court in Manhattan. He admitted that he had lied to Congress when he said Trump's attempt to build a Trump Tower in Moscow ended in January 2016. He further stated that negotiations with the Russians continued into the summer of 2016, even after Trump had won the Republican nomination and had said repeatedly that he had no business dealings with Russia. Not only were the Russians interested in continuing the discussions, but they suggested that Cohen come to Russia to meet either Vladimir Putin or one of his close associates, presumably to work out the details. The trip didn't happen and the deal ultimately fell through. Clearly, Putin would have loved a deal since it would have given him leverage over Trump in the event that he won the election. It is not known why it fell through, but doing business with Putin invariably means giving him and/or his cronies a big cut of the profits and the price he was demanding might have been too much for Trump to accept.
There is no reason to think that Cohen is trying (badly) to play 3D chess. There is every reason to think he is cooperating fully with Mueller in the hopes of getting a light sentence rather than a pardon. So the strategies of the two rats appear to be as different as can be. Manafort appears to be on Team Trump hoping for a pardon. Cohen appears to be on Team Mueller hoping for a lenient sentence.
From Trump's point of view, he would have preferred that Cohen was playing for the pardon and Manafort was playing for the light sentence. The reason is that Manafort was never close to Trump and knows little about his business dealings. Cohen probably knows close to everything, including money laundering and heaven-only-knows what other crimes Trump may have committed (like paying hush money to various women). And remember, Mueller's first hire was Andrew Weissmann, an extremely aggressive prosecutor whose specialty is putting money launderers in prison. Mueller probably smelled the scent of dirty money from the start, which is why he hired Weissmann to go find it. If Cohen has spilled all the beans already and is truly fully cooperating, he may have forced Mueller to go out and place a bulk order for 4-TB disk drives to store all the evidence.
Monday's guilty plea from Cohen may further enrage Trump for another reason. Mueller works under the authority of acting AG Matthew Whitaker and is required to get permission from him before doing anything major, such as taking Cohen to court and having him enter a plea. A source has told the Washington Post that Mueller duly informed Whitaker, who at the very least didn't stop him. It can't make Trump happy that his newly installed toady could have blocked the Monday bombshell and didn't. Why Whitaker let Mueller do what he wanted is not at all clear, but at this point Whitaker may have realized that any attempt to block Mueller might later result in his being charged with obstruction of justice.
Finally, there is Congress to consider. Rep. Adam Schiff (D-CA), who will be chairman of the House Intelligence Committee in 5 weeks, said yesterday that he will subpoena Cohen in order to ask him whether Trump did any money laundering for the Russians. Manafort probably doesn't know that, but Cohen most likely does. Not to be upstaged by Schiff, Rep. Jerrold Nadler (D-NY), the incoming chairman of the House Judiciary Committee, yesterday told CNN: "He [Cohen] lied to Congress apparently about dealings between Trump and Russia, that leads me to suspect that there are more dealings that the president wanted hidden." Looks like California and New York are going to duke it out about who gets to dismember Cohen first. The news in January is probably going to be about more than snowstorms. (V)
Trump in Meltdown Mode
Donald Trump is having another one of his bad weeks. Not only has the news been bad (see above), but it's never been more clear that the biggest target is on his own back. Most presidents would probably avoid chatting with the media during a week like that, but not Trump. He sat for another wild interview on Thursday, this one with the New York Post. And the President was definitely teetering on the brink of Defcon 1 status.
Some of what Trump said was his standard raging against the machine. He smeared Robert Mueller's probe as "McCarthyism," moaned about the witch hunt, and said that people like Jerome Corsi and Roger Stone are being railroaded. However, the President also came up with a few new ones. Doubling down on a tweet from the other day, Trump declared that Deputy AG Rod Rosenstein "belongs behind bars," because "he should have never picked a Special Counsel." He also threatened to declassify "devastating documents" if Mueller and the Democrats don't leave him alone. His exact words:
If they go down the presidential harassment track, if they want go and harass the president and the administration, I think that would be the best thing that would happen to me. I'm a counter-puncher and I will hit them so hard they'd never been hit like that.
Trump made clear that he was talking about FISA warrant applications and other materials related to Mueller's probe. He suggested they would prove the existence of a grand conspiracy against him between the FBI, the Justice Dept., and the Clinton campaign. Of course, this raises an obvious question: If Trump has such proof, why has he sat on it for two years? After all, he's not been shy when it comes to kvetching about the alleged conspiracy.
It's entirely possible that Trump was just venting and that this, too, shall pass. On the other hand, he could hardly have made it clearer that he regards the law and the powers of the presidency as things that exist to serve him, and not the public good. So, this could be prelude to...who knows what? And if Trump thinks he's going down anyhow, he's certainly going to do it with guns blazing. (Z)
Deutsche Bank Headquarters Raided
On Thursday, 170 German police officers and tax investigators raided the headquarters of financial titan Deutsche Bank as well as several other buildings. The operation is large enough that it not only took nearly 200 people, but it's stretching into a second day today. The raid is related to the Panama Papers, which document the bank's international money laundering activities on behalf of nearly 1,000 clients.
Let us be clear that, at the moment, absolutely nobody has this as political news. However, it is worth pointing out a few things. First, there is much suspicion that Donald Trump has been participating in money laundering for years or decades (see above). Second, it is known that he's done business with Deutsche Bank, particularly after other banks became unwilling to touch him with a ten-foot-pole. Trump is not named in the Panama Papers, but with 170 folks looking through Deutsche Bank's paperwork with a fine-toothed comb, who knows what they may find? So this may become a political story very soon. (Z)
No Meeting with Putin
In the next several days, Donald Trump will be participating in this year's G20 summit. Tomorrow, he was supposed to meet with Russian president Vladimir Putin. However, on Thursday he abruptly canceled the confab, giving Russia's seizure of three Ukrainian ships as his reason.
While it is possible that the muckety-mucks at Defense and State persuaded Trump that Putin was testing him, the President's new-found sense of right and wrong rings a little hollow. He has shown no interest in punishing Saudi Arabia for killing Jamal Khashoggi, nor for punishing Putin for seizing actual parts of Ukraine. At least two alternative explanations present themselves. The first is that it would not be great to be pictured rubbing elbows with Vlad just 48 hours after the news about Trump's ongoing business negotiations with Russia (see above) broke. The second is that the last time Trump met with Putin, it was a PR disaster. Maybe the President just can't cope with that risk right now, politically or personally. (Z)
House Democrats Elect Cheri Bustos to Head the DCCC
This may be a little bit of inside baseball, but yesterday the House Democrats elected Rep. Cheri Bustos (D-IL) to be the chairwoman of the DCCC, giving her the responsibility for keeping the newly elected House Democrats in office in 2020 and maybe bringing in a bunch of new colleagues. She got 117 votes, beating Reps. Denny Heck (WA, 83 votes) and Suzan DelBene (WA, 32 votes). A fourth candidate, Rep. Sean Maloney (D-NY), was in the hospital with a serious bacterial infection and couldn't attend the vote.
The choice is significant. Bustos is a moderate from the Midwest. Trump won her district in 2016, but she was reelected in 2018 by a 24-point margin, larger than any other Democrat in a Trumpian district. Her pitch is that Democrats must do better in Republican areas in general and the Midwest in particular, and since she was born and raised in downstate Illinois, she knows how to do it. She thinks the way for Democrats to win over Republicans is to stop talking all day and night about impeaching Trump and to talk about jobs, wages, and health care and how the Democrats want to help people on these issues. Could it be that the House Democrats have seen the light, putting a Midwestern moderate in charge of the 2020 House election rather than one of two very liberal members from deep blue Washington (or a gay man from equally blue New York)? And could this have implications for how the party will go into 2020 generally? (V)
Tim Scott Shoots Down Farr
Donald Trump nominated Thomas Farr to be a federal judge in spite of (or maybe on account of) his history as a prime architect of North Carolina's voter suppression and racial gerrymandering laws. Senate Majority Leader Mitch McConnell (R-KY) was planning to ram his confirmation through the Senate yesterday, but Sen. Tim Scott (R-SC), the Senate's only black Republican, threw a wrench into the works and said he was going to vote "no." Sen. Jeff Flake (R-AZ) earlier said he would vote "no" on every judicial nomination unless McConnell allows a vote on a bill to protect Mueller, something McConnell refuses to do. With two Republican and 49 Democratic "no" votes, Farr is not going to become a judge this year. In theory, Trump could renominate him in January when the Republicans have a larger caucus, but Trump probably has enough on his plate right now to not pick another fight he might well lose again. Ah, Farr, you were so near! (V)
Comey Sues to Quash Subpoena
Last week, outgoing House Judiciary Committee Chairman Bob Goodlatte (R-VA) issued a subpoena to former FBI director James Comey to testify again before Congress, this time in secret. Comey is willing to testify, but only in public, so he sued the committee. In his suit, his lawyers wrote: "Mr. Comey asks this Court's intervention not to avoid giving testimony but to prevent the Joint Committee from using the pretext of a closed interview to peddle a distorted, partisan political narrative about the Clinton and Russia investigations through selective leaks." Courts make rulings within a few days only under extenuating circumstances, such as a last-minute appeal from someone about to be executed. While the Republicans may imagine the circumstances to be extenuating (they are going to lose control of all the House committee chairmanships on January 3rd), the courts are unlikely to agree. Comey may ultimately win or lose, but by January, the issue will be moot as incoming chairman Jerrold Nadler has other fish to fry (see above) and if he wants to hear from Comey, it will certainly be in public. (V)
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