Cohn, a Wall Street veteran, tried to tamp down Trump’s strident nationalism regarding trade. According to Woodward, Cohn “stole a letter off Trump’s desk” that the president was intending to sign to formally withdraw the United States from a trade agreement with South Korea. Cohn later told an associate that he removed the letter to protect national security and that Trump did not notice that it was missing.
CNN has now posted the letter itself, dated September 5, 2017, as reproduced in Woodward’s book.
So, is this an example of Trump’s advisers saving him from unwittingly causing disaster and mayhem? Hardly.
For one, it’s been conflated with another Woodward anecdote, this one dating to January 19 (so the day before Trump’s inauguration?) at which Trump questioned the massive military presence in South Korea. “We’re doing this in order to prevent World War III,” Defense Secretary Jim Mattis reportedly told him.
Even in that case, Trump’s questioning, while ridiculed by Washington insider and “adult in the room” Mattis, is actually not ridiculous at all. Jeff Faux raised the same question in The Nation just last March in his article “Why Are US Troops Still in South Korea, Anyway?”
“Citizens of our democracy looking for an answer soon find themselves lost in a fog of babble about America’s ‘vital interests.’ ” Faux wrote. He concluded that the U.S. military presence isn’t needed to defend South Korea, and by posing a threat to North Korea heightens tensions rather than lowers them.
But back to the actual letter, formally withdrawing the United States from a trade agreement with South Korea.
You will note that it is labeled “Pre-decisional/Deliberative” — so it wasn’t the copy Trump would actually have signed. And it doesn’t claim to end the trade deal — it provides 180 days notice, and includes an offer to negotiate.
Indeed, Trump had, a few months earlier, proudly announced his intent to end the Korea trade agreement right away — with no notice. In an April 2017 interview with the Washington Post, Trump called it “a horrible deal” that has left America “destroyed.”
His expressions of concern were hyperbolic — no surprise — but not entirely inaccurate.
As Lori Wallach, Public Citizen’s trade guru, explained to CBS Marketwatch(right around the time Cohn was whisking the letter off Trump’s desk), “The Korea agreement is the most dramatically failed of the free-trade agreements based on the model started by NAFTA.”
The data is brutal. Despite promises from George W. Bush and Barack Obama about how amazing it would be for U.S. workers, the U.S. trade deficit with Korea almost doubled in the agreement’s first five years. U.S. agricultural exports actually declined while a deluge of Korean cars were sold on the U.S. market.
Wallach had warned as much five years earlier, calling the deal “a job-offshoring, unsafe-import-flooding, ‘Buy America’-killing, food-safety-undermining, drug-price-rising, foreign-corporate-treasury-raiding, financial-deregulating trade agreement” that benefited giant multinational corporations most of all.
Flash forward to six months after Cohn took the letter off Trump’s desk: The administration announces a series of revisions to the Korean trade agreement, calling it “a major win for American workers and American businesses.”
But their net effect is laughable. Renegotiations left key issues that might have made a difference unaddressed, such as the elimination of job outsourcing incentives and addition of serious labor and environmental standards.
Scrapping the deal entirely would have been better for American workers.
Donald Trump is manifestly unfit to be president. He is abusing executive power, violating norms that protect our democracy, and trying to divide and confuse the country.
But the only thing the members of the “resistance” inside the administration seems to care about is protecting themselves — “resisting” Trump’s attacks on the military and its contractors, multinational companies, and orthodox GOP principles Trump didn’t run on and doesn’t share.
In 2008, Brett Kavanaugh authored an extraordinary law review article specifically describing his views on the separation of powers – extraordinary because all of his suggestions expanded the power of the executive branch at the expense of the other two.
The executive branch has never been stronger and never been so unchecked by the other branches, but to Kavanaugh – and to the man who has nominated him to be a Supreme Court Justice – it’s never enough.
Kavanaugh and his fellow “unitarians” believe the Constitution vests the president with direct and unbridled control over every single instrument of executive power — including the Justice Department and law enforcement.
Unlike the justice he would replace, Anthony Kennedy, Kavanaugh would be the fifth solid vote providing Trump with the legal justification to exercise the monarch-like authority that his tweets so clearly show that he craves.
Kavanaugh made five suggestions in his 2008 article. The first one has already been widely discussed: “Provide sitting presidents with a temporary deferral of civil suits and of criminal prosecutions and investigations.”
Another was to “Ensure prompt Senate votes on executive and judicial nominations.” And in a further attempt to cripple Congress’s ability to advise and consent, he also declared that “the political ideology and policy views of judicial nominees are clearly unrelated to their fitness as judges, and those matters therefore appear to lie outside the Senate’s legitimate range of inquiry.”
Kavanaugh’s third suggestion was to “Streamline executive branch organization and ensure that officials in independent agencies are more accountable.” Their independence “may weaken the Executive and strengthen Congress’s hand in the Washington power game,” he wrote. It also has “clear costs in terms of democratic accountability”. And what Kavanaugh considers accountability is accountability to the president, not the public.
Kavanaugh’s fourth suggestion was that everyone “Recognize that both the legislative and executive branches have legitimate and sometimes overlapping roles in war and national security.” But he only advocated limits on Congress
Kavanaugh endorsed the late Justice Robert Jackson’s framework for determining the legality of national security decisions: Category One is when Congress has authorized the president’s actions and his authority is “at its maximum”. Category Two is when Congress has neither authorized nor prohibited the action and presidents operate in a “zone of twilight”. Category Three is when Congress has prohibited an action and the president’s power is “at its lowest ebb.”
But Kavanaugh wrote that the courts shouldn’t take anything other than explicit, specific Congressional prohibition as triggering Category Three. “As a matter of judicial restraint and proper statutory interpretation, courts should be careful about finding a commander-in-chief case in Category Three based on implied prohibitions alone,” he warned – taking an obvious swipe at the high court’s landmark 2006 Hamdan ruling, which curbed the Bush/Cheney White House’s assertion of nearly unlimited executive power in a time of war.
Kavanaugh did not quote Jackson’s language about how in Category Three, “what is at stake is the equilibrium established by our constitutional system.” Instead, he described that condition as when “the President asserts his preclusive and exclusive commander-in-chief authority.”
Civil libertarians like David Cole, national director of the ACLU, think Kavanaugh has it exactly wrong. “If courts do not enforce constitutional and legislative limits on the executive branch’s broad invocations of national security, the president will have a blank check to violate fundamental individual rights,” Cole wrote in the New York Review of Books.
(Kavanaugh doesn’t believe a president’s war powers are limited by international law, either. He wrote in a 2010 case that for the courts to limit the president’s war powers based on international law “contravenes bedrock tenets of judicial restraint and separation of powers.”)
Kavanaugh’s final suggestion regarding separation of powers was to “Consider the possible benefits of a single, six-year presidential term.”
He argued that worrying about re-election is a distraction, and “makes it harder for presidents to tackle difficult but necessary issues in their first terms.” So while Kavanaugh stresses accountability for everyone else, he argues for removing any form of presidential accountability other than impeachment.
The framers of the Constitution established checks and balances between the branches of government to protect us from tyranny. But after one and a half years of Donald Trump, it is clearer than ever that that those checks and balances have given the president too much power.
There seems to be no way to effectively restrain Trump even when he’s acting irrationally, recklessly, cruelly or out of bigotry — whether he’s imprisoning migrant children, banning Muslims from entering the country, unilaterally sending missiles and troops into Syria and Yemen with no apparent strategy, turning regulatory agencies against themselves, using pardons for political purposes, threatening the media, and meeting alone with Vladimir Putin.
And that’s what we know about. Trump inherited hugely expanded national-security powers from the past two presidents that allow him to unilaterally and secretly conduct surveillance and order targeted killings abroad.
A Congress with any institutional pride at all would reject out of hand a judicial nominee who would cement a Supreme Court majority intent on giving yet more power to the executive branch, at the expense of the legislative and judicial branches.
But Brett Kavanaugh, who Trump has nominated to replace Justice Anthony Kennedy on the Supreme Court, would do precisely that.
Kavanaugh’s views on absolute presidential immunity from civil suits, criminal prosecution and even being interviewed as part of a criminal investigation are well established by now. And of course they are particularly convenient for Trump given the current circumstance.
But that’s only one element of a broader argument Kavanaugh has made in more than two decades of speeches and jurisprudence: that the Constitution vests the president with so much power that in some cases he is above the law as written by Congress and interpreted by the courts.
As Norm Eisen and Ryan Goodman recently wrote for Slate, “Judge Kavanaugh helped pioneer a maximalist theory of presidential power associated with the notion of a ‘unitary executive.’ ”
Being a “unitarian” is not exactly the same as being an “originalist” — although they overlap when it comes to their contempt for the Supreme Court’s history of asserting constitutional protection for rights not explicitly identified in a text written by white men 229 years ago and not significantly amended since 1971.
For instance, in a talk he gave in 2017 about the William Rehnquist, Kavanaugh lauded the late chief justice’s belief “that fundamental rights must either be enumerated in the Constitution (like free speech) or deeply rooted in history and tradition. Abortion was neither an enumerated right nor deeply rooted in history and tradition.”
Kavanaugh, rather, is an originalist with a very expansive reading of Article II. That’s the one that vests executive power in the president – or, as unitarians insist, “all” executive power.
The once-mighty Los Angeles Times Washington bureau is a shade of its former self. A total of 15 reporters and editors toil where not so long ago there were 60.
The bloodsuckers in suits at tronc (formerly Tribune) were about to close the DC office entirely to pay the rent in LA when a little-known biotech billionaire swept in to save the bureau — and the rest of the paper.
New owner Patrick Soon-Shiong has pledged to make Washington reporting a priority, compete with the New York Times and the Washington Post and “make a major impact on the nation.”
His goals may sound grandiose, but the LA Times has a real opening when it comes to covering Washington. That’s because the New York Times and Washington Post daily coverage of what Trump is saying and doing is selling their readers short.
For the sake of avoiding “opinion,” those two newsrooms are routinely leaving out essential context. Every day, Trump is dividing the country, spreading disinformation, embracing authoritarianism, fomenting chaos, discrediting the press — and departing from reality. Leaving out that context normalizes his presidency — when any rational assessment is that there is nothing remotely normal about it.
Case in point, hours after the national disgrace that was Trump’s news conference with Putin on July 16, neitherpaper’s main stories had come anywhere near capturing the gravity of the situation.
Sure, the Post and the New York Times have engaged in slugfests over scooplets from Bob Mueller’s investigation of possible Trump collusion with the Russians. They’ve both done some extraordinary investigative work uncovering the corruption that infests the Trump administration from the top down. And their analyses are increasingly blunt.
But that’s the exception, not the rule. As Washington Post media writer Margaret Sullivan put it after the first year of Trump coverage, “There’s been great accountability journalism, but a very poor signal-to-noise ratio.”
The reason: When it comes to daily coverage of Washington, the reporters and editors at both papers — along with the major wire services — are stubbornly clinging to political-reporting conventions and rituals that, to put it kindly, Trump has rendered anachronistic.
These journalists are still trying to stuff Trump’s lies, fantasies, nonsense and overtly cruel behavior into the traditional, value-neutral president-said-yesterday format, obligingly quoting his words, leaving characterizations to critics, and allowing each new distraction to exist in a contextless vacuum, as if they weren’t each part of an ongoing dystopian narrative in which the president is constantly assaulting core American values.
Long before Trump, Jay Rosen, the New York University journalism professor who keenly observes the political media, was regularly trying to call attention to the major structural problem that Trump has now exploited so effectively.
“Somewhere along the way, truthtelling was surpassed by other priorities the mainstream press felt a stronger duty to,” he wrote — way back in 2010. “These include such things as ‘maintaining objectivity,’ ‘not imposing a judgment,’ ‘refusing to take sides’ and sticking to what I have called the View from Nowhere.” (More recently, Rosen has called for the press to suspend normal relations with the Trump presidency.)
The partial self-lobotomization that the View from Nowhere requires from its devotees is not a new problem (nothardly). But in a time of Trump, taking the View from Nowhere is fundamentally dishonest and a profound disservice to readers everywhere.
THE VIEW FROM CALIFORNIA
The way the LA Times DC bureau can make the most dramatic and most positive “major impact” is to chuck the View from Nowhere — and proudly and publicly replace it with a View from California.
A supermajority of Californians see Trump for what he is. California is future-focused — in distinct contrast to Trump’s fantastical visions of a mythological past that he wants to return to. California is leading the state-level resistanceto Trump initiatives in areas such as environmental deregulation, health care, immigration and voting rights. Its people are multicultural and pluralistic. They take seriously their role as stewards of the earth.
So from California, the view is clear: Trump is a profoundly regressive force whose actions and statements are dangerous. And he’s being enabled. Congress has abdicated its role as a check to presidential power. The Supreme Court is no longer committed to protecting minority rights. The result: an irrational and unrestrained president threatens the future of our country as a pluralistic constitutional democracy.
A bureau that openly embraces this view as a baseline, and is unafraid to call out assaults on pluralism, for instance, would cover Trump very differently from more typical DC reporters, who censor themselves for fear of appearing to take sides.
It would operate almost like a foreign bureau. That means no undue deference to authority and no allegiance to stifling local conventions.
There’s a near-precedent for that in the form of the Knight-Ridder Washington bureau, particularly in the run-up to the war in Iraq. Its staff prioritized mid-level expertise over high-level access, refused to bend to big-media corporate pressure not to appear out of step with the country, and almost uniquely reported that the war was being undertaken under false pretenses. (And guess what? A movie about them just came out.)
Kyle Pope, editor in chief of the Columbia Journalism Review, looked back on the first year of Trump coverage and called it “a disappointment, for those of us who expected a new attitude, a new approach, by the US press.”
Trump still controls the conversation, Pope wrote. “I fear that all of our words, and all of our rightful outrage, are not getting at that bigger truth, the deep, personal, soulful anxiety of Donald Trump or life in Donald Trump’s America. That requires a new journalistic enterprise, more creativity in terms of what form that journalism would take, a rethinking of how we tell our stories.”
The LA Times DC bureau could show the way.
COVERING THE LYING, NOT THE LIES
A California-representing DC bureau wouldn’t feel obliged to report the content of Trump’s lies, but rather their context: his pathology, their propagation, and the courtiers who praise him for them.
Norman Pearlstine, the grizzled and hardly radical mainstream-media veteran that Soon-Shiong hired as a caretaker editor, recently discussed his thoughts about covering DC with the Columbia Journalism Review.
“You have to keep trying to cover him and his administration as best you can, on your terms when you can,” he said. “Sometimes you’ll have to do it on his terms. We don’t have the luxury of saying we’re going to skip this story.”
But I disagree with Pearlstine about that second part. In normal times, it wouldn’t be such an issue. But the fact that the American public is being lied to continuously is the biggest story of the moment, and disseminating each lie is just contributing to the problem.
Similarly, reporters need to recognize that the Trump presidency has been an unending series of minor dramas, ultimately distracting them from the overall narrative arc, which is way more disturbing.
Without the right context, incremental news stories simply become so much Trumpian white noise.
Pearlstine also said: “To the degree you can, especially with a limited staff, you want to dig into the issues of substance where there are very real changes taking place that show the power of the chief executive and where it can be implemented.”
And that’s more promising. Jay Rosen is right: send the interns to the White House briefing room. (And if you do write about the briefing itself, don’t quote the non-answers from Sarah Sanders; write about how she doesn’t answer the questions.)
And it’s wonderful that major news organizations — goosed along by Politifactand FactCheck.org — are increasingly following up on major fabrications and falsehoods with articles disputing them. But calling out falsehoods can’t be an afterthought any more. The LA Times DC bureau would make the fact-check the main story, instead of the sidebar.
And the bureau would also avoid the kind of stilted euphemisms our top reporters too often use to describe Trump and his behavior. No, he is not “earthy and direct”; he is anti-intellectual and explosive. No, he is not “unorthodox” and “combative” when it comes to Europe and Russia; he is irrational, impulsive, hostile to pluralistic democracies and fond of autocrats. And yes, he lies all the time.
Similarly, the next time Trump calls a group of non-white countries “shitholes” or refers to immigrants as “animals” who “infest” the United States, it’s not enough for journalists just to point to what he said. The LA Times DC reporters would bluntly explain that these are unmistakably and horrifyingly racist comments that dehumanize people and denigrate entire populations and cultures — and that by any reasonable standard for a president of the United States, they are contemptible.
THE INEVITABLE CRITIQUE
There are, of course, many reasons not to do this. They’re just not very good reasons.
Reason №1: Opinion doesn’t belong in news stories. Our job is to report the facts and let the readers reach their own conclusions.
There are always a lot of judgment calls involved when a reporter constructs a news story; what’s important, what’s unusual, what’s scary, what’s not worth putting in. Reporters and editors make those calls based on journalistic values.
Things American journalists traditionally value include the truth, fair play, transparency, civil liberties, free speech, peace in the world, humane treatment of others, a connection with reality.
You could call all of those “opinions” but without “opinions” like that what possible good is journalism?
There’s a reason that not one of the top 50 American newspapers endorsed Trump for president. It was not a matter of partisanship; many of them traditionally side with Republicans. Those editorial boards recognized that Trump’s values are antithetical to journalism. And although the news and editorial sides of a newsroom operate by different standards, they share core values.
When I think of the sort of opinion that doesn’t belong in straight news stories, I think of advocating for a cause, or sharing a personal viewpoint, or telling people how to vote. Telling people the truth is not opinion, it’s reporting.
When a newsmaker says something untrue, or cruel, or dangerous, stenography with a bit of “critics say” at the end isn’t enough. Without judgment and context, readers don’t have enough to make an informed decision.
Reason №2: We’ll lose readers who support Trump.
The difference between Trump dead-enders and the rest of us is increasingly that they live in their own news bubbles and are averse to facts that don’t support their worldview.
Most of the fact-averse are probably not reading newspapers much anymore. Others are — but is this likely to be the final straw?
Using euphemisms and avoiding hard truths so those readers aren’t offended isn’t fair to anyone.
On the plus side, the potential to gain readers locally, nationally, and internationally, by standing firm on principle and telling it like it is, is enormous.
Reason №3: We want a chance to influence the Trump voters, so we modulate our tone.
See the answer to №2.
Also: As it happens there is a coherent and true storyline reporters can and should tell that would serve the non-racist Trump voters well — better than simply trying to be inoffensive.
That storyline is that they weren’t wrong to want to support someone who promised to bring more benefits to American workers; but they were conned. They were understandably fed up with elites; but they were conned. They wanted to drain the swamp; but they were conned. They wanted to stop spending money on useless wars; but they were conned. And they never imagined they were being conned by the Russians; but they were.
Reason №4: We don’t want to be a divisive force in our communities.
That’s a pretty compelling reason for local newspapers, many of which have a long tradition of maximizing circulation by not pissing any subscribers off.
But on the state, national and international level, “not pissing people off” is not a great business model.
Reason №5: We’re afraid of other journalists calling us liberal.
That will happen. So what? And keep in mind that history will be on your side.
Reason №6: We just want to do what everyone else does, but do it better, with fewer resources.
Good luck with that.
The LA Times Washington bureau would try to understand Trumpism, but not the way the New York Times does — which is largely by asking people if they still support Trump and then quoting them.
Instead, the LA Times could help the nation grapple with the essential questions that the mainstream media has never really answered: What happened to us? Why did so many Americans fall for him? Why do so many still support him, and with such fervor? How did so many people become susceptible to disinformation and conspiracy theories? Has all this hatred been there all along? Can these people be reached?
A big element of all this, of course, is flat-out racism. But a corrolary of the View from Nowhere seems to be that you can’t say people are racist unless they tell you so themselves — and that the entire topic of racism, in fact, is too fraught to really address except anecdotally and only once in a while. A bureau that sees demographic issues more clearly would dig into this element of the story, not avoid it.
Reporters who really want to “understand” Trump voters — rather than just give them free space in the paper — would explore not just what they say and feel, but why they feel that way. For instance: What makes them different from people who have empathy for Dreamers and undocumented children? Was it a personal experience? The way they were raised? Something they saw on TV? Do they generally lack empathy? What do they think of legal immigrants? How do they feel about Latinos and African-Americans? Do they fraternize with brown people? How long have they felt that way? Do they have friends who feel differently?
In the absence of coherent answers from the news side, opinion writers alone are putting forth hypotheses. For instance, New York Times op-ed columnist Charles M. Blow recently wrote that Trump’s “supporters have become rage-junkies for whom he can do no wrong,” and that “Trump has vented an American racial anxiety, giving it power and a perch, giving it permission to be vocal and even violent.”
That sounds about right. But hypotheses like this are testable, and reporters should be testing them.
THE GOAL IS ANTI-PARTISANSHIP
A rational observer can hardly escape the fact that the modern Republican Party is unhinged from reality, traffics in deception, favors policies that are radically cruel, and is led by a megalomaniac.
But I’m not advocating that the LA Times Washington bureau be partisan — quite the opposite. And I’m not talking about being bipartisan, either.
I’m talking about being anti-partisan. Anyone coming to Washington who is not blinded by political ambition can see that both parties have failed and are corrupt and are out of step with most Americans.
That doesn’t mean they are similarly culpable. Other than sharing the Republican Party’s slavish devotion to money, the Democratic Party has an entirely different set of failings. Its leaders remain the same elitist career politicians who brought you Hillary Clinton and managed to lose to Trump. They are inconstant, hedging, observably insincere, and prone to seeing the least-popular political positions as pragmatic.
In spite of this, mainstream reporters continue to craft their articles to reflect the presumption that there are exactly two sides to each issue — one Democratic and one Republican — that they are facially equally valid, and that people with alternate views are extremists. This is what The Atlantic’s James Fallows and others have so aptly called “false equivalence.”
But in reality, the American common ground may actually lie outside the current Democratic-Republican axis, rather than at its middle, which opens up a world of interesting political-journalism avenues.
Similarly, mainstream reporters tend to ignore the background noise of profound corruption that permeates Washington and makes policies that have overwhelming popular support — like universal healthcare, background checks for gun owners, increasing taxes on corporations and the rich, a campaign finance overhaul — dead on arrival in the capital.
Reporters fresh from California would see that more clearly, and recognize its significance on a daily basis.
They would also see how Washington’s elite journalists often get intimately and seamlessly bound to the other members of Washington’s ruling elite, laughing with liars and torturers over champagne and passed food, and too often identifying with their sources more than their readers.
A MAJOR IMPACT ON THE NATION AND THE WORLD
The Los Angeles Times Washington bureau has an incredible history of great editors, bold coverage, and independence.
It first became a force to be reckoned with in 1963 under editor Robert Donovan, and the legendary Jack Nelson led it for 21 years, from 1975 to 1996.
Ronald Ostrow, an investigative reporter who worked side by side with Nelson in the early 1970s, said the bureau back then “was unmatchable.” Nelson, for instance, landed the first story that brought Watergate right to the heart of the Nixon reelection campaign.
The bureau thrived for decades. By the late 1980s, the LA Times/Washington Post news service had 650 newspaper clients worldwide, far surpassing the New York Times service.
At its peak, in 2004, the bureau had grown to 60 staffers.
Doyle McManus, the bureau chief from 1996 to 2008, recalls that gradual staff cuts began in 2005, several years after the LA Times was bought by the Tribune Company. But when Chicago billionaire Sam Zell took control of Tribune, he “cut the bureau by more than half in 2008,” McManus wrote me in an email.
More recently, several top reporters fled the bureau when tronc threatened to close it, leaving 15 staffers in all.
So now it’s time for a revival.
As it happens, LA Times reporters Eli Stokols and Sabra Ayres put a refreshingly non-neutered look at the Helsinki summit from the get-go, calling it stunning and noting that Trump blamed the U.S. for the poor state of U.S.-Russian relations. So that’s promising.
Imagine what could happen next.
The Los Angeles Times would get the best reporters in the country banging down the door of their DC bureau if it offered them an opportunity they can’t get anywhere else: To relentlessly tell the truth about Trump — and Washington — for a major news organization.
For California-based reporters, it would be a chance to take on the most important stories in the world. And surely some veteran DC reporters are eager to be able to use all their brainpower to report and write rather than having to twist what they know into a form that won’t raise the ire of editors on the lookout for attitude.
The work these reporters would produce could have huge appeal to a national and international audience.
And it could change everything about Washington journalism.
A Washington Post story describing how special counsel Robert Mueller intends to release reports of his findings “to answer the public’s questions” confirms what some Justice Department veterans have long maintained: That criminal indictments are not Mueller’s only goal — or even his primary goal. What he’s really after, these observers say, is the whole story. And then he intends to tell it.
In a typical criminal investigation, prosecutors are limited to only disclosing investigative details directly relevant to prosecutable crimes. That’s why special counsel Patrick Fitzgerald never disclosed the vast majority of the incriminating evidence he discovered about the leak of Valerie Plame’s identity by the Bush/Cheney White House; the only case he felt he could make was against Cheney aide Scooter Libby, for obstruction.
But some veterans of the Justice Department realized early on that Mueller’s remit went well beyond simply investigating prosecutable crimes. The most obvious thing Deputy Attorney General Rod Rosenstein did in Mueller’s May 2017 appointment letter, was give the special counsel the authority to prosecute crimes arising from his investigation. But Rosenstein also wrote that Mueller is “authorized to conduct the investigation confirmed by then-FBI Director James B. Comey” to the House Intelligence Committee in March 2017.
I have been authorized by the Department of Justice to confirm that the FBI, as part of our counterintelligence mission, is investigating the Russian government’s efforts to interfere in the 2016 presidential election and that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia’s efforts. As with any counterintelligence investigation, this will also include an assessment of whether any crimes were committed.
“This was and is, first and foremost, a counterintelligence investigation, designed to examine the exact scope of what Russia did with respect to the 2016 election and, most importantly, what the Russian threat is with respect to future operations” said Martin Lederman, a Georgetown Law professor and former deputy assistant attorney general in the Department of Justice’s Office of Legal Counsel
Prosecution was literally an afterthought.
“Many people are obsessed with the question of who is going to be indicted and for what — which is only a part, and not the most important part, of what Mueller was tasked to do,” Lederman said.
Mueller’s central task, Lederman said, “is to get to the bottom of all this — thereby to help Congress and the intelligence community prevent Russian involvement in future elections.”
Indeed, criminal investigations and counterintelligence investigations are two entirely different – almost antithetical – exercises.
“Counterintelligence investigators are rarely thinking about building a criminal case,” said Mary McCord, who, as acting head of the National Security Division, oversaw the Justice Department’s Russia probe until just before Mueller’s appointment. After more than 20 years at the Justice Department, McCord resigned last May and now oversees litigation at Georgetown University’s Institute for Constitutional Advocacy and Protection.
Counterintelligence investigators focus almost single-mindedly on two questions, she said: “What are the intelligence threats to the U.S.? And how do we counter those threats?”
Even clear criminal action may never be prosecuted because “you’d have to reveal such sensitive and classified information in court, it’s just not worth it,” she said.
The central work product of a counterintelligence investigation, by contrast, is reports, distributed through intelligence channels. “There is a very robust amount of writing and reporting that takes place on a daily basis by members of the intelligence community,” McCord said.
Fully understanding an intelligence threat also requires a much more rapacious attitude toward gathering information than just trying to build a criminal case against a defendant.
“Information becomes an end to itself in a counterintelligence investigation,” said Frank Figliuzzi, a 25-year FBI veteran who, as assistant director for counterintelligence, led FBI counterintelligence investigations worldwide.
Counterintelligence investigators, Figliuzzi said, aren’t just interested in a possible foreign target’s illegal activities. “You want to know everything about the waking hours of this intelligence officer. You want to know how he lives and breathes. You want to know how he thinks. And why is that important? Because every bit of data you learn about him may help you to counter him, to recruit him, and to understand strategies,” he said.
Figliuzzi wouldn’t say how this approach might translate to American suspects. But just last week, when FBI agents stopped American lawyer Ted Malloch at Boston’s Logan airport and questioned him about his involvement in the Trump campaign, Malloch complained to the Guardian that the federal agents “seemed to know everything about me” and warned him that lying to the FBI was a felony.
Balancing secrecy with the public’s need to know
The results of counterintelligence investigations are typically among the least likely things to ever be discussed in public. The theory is that the less said, the less the enemy knows. But every party that could possibly do something to avoid it happening again is fully briefed.
In this case, those parties are the U.S. Congress and the American people.
Figliuzzi said he is convinced that Mueller will issue a report. But, he said, Mueller has “quite the dilemma on his hands”.
Typically, when counterintelligence investigations reach a conclusion, “there’s a lengthy report, generally called an LHM, or letterhead memo,” Figliuzzi said. But they are highly classified.
So Figliuzzi wondered how Mueller will tell his story without disclosing extremely sensitive sources, methods and techniques.
“Let’s say you’ve got an NSA intercept where Trump’s on the phone with Putin, clearly indicating conspiracy to commit a crime. If you need to write that up for Congress for impeachment proceedings, how the hell do you do that?”
In that case, declassifying and going public would mean “giving up the microphone in Putin’s office.”
The Washington Post report said that Mueller “told Trump’s lawyers that he is preparing a report about the president’s actions while in office and potential obstruction of justice, according to two people with knowledge of the conversations.”
The Post said that “Mueller’s investigators have indicated to the president’s legal team that they are considering writing reports on their findings in stages — with the first report focused on the obstruction issue, according to two people briefed on the discussions.”
And the Post quoted a person “familiar with the discussions” saying that Mueller’s team “said they want to write a report on this — to answer the public’s questions — and they need the president’s interview as the last step.”
One of the Post reporters, Robert Costa, told MSNBC Mueller’s team wants that report to come out in June or July.
McCord said there is precedent for the government declassifying and disclosing what would otherwise be considered secret or sensitive counterintelligence information when the benefit of that disclosure outweighs the harm.
For instance, she noted that President Obama insisted on the release of some information about Russian hacking, just before Trump took office. And after the November 2014 hacking of data from Sony Pictures, the FBI disclosed a great deal of information, both to encourage people to improve their cybersecurity practices — and to point the finger of blame very clearly at North Korea. “[W]hen we can’t lay hands on people, as often as possible, we’re going to call out the conduct,” then-FBI Director Comey said at the time. “And as often as we possibly can we’re going to say here’s what happened and who did it.”
“Those are things the government rightly thought the American people should know,” McCord said. “There are times, when even though it’s of interest for counterintelligence purposes, the need for the public to know about it becomes obvious to people in government.”
And in this case, McCord said, “It’s not just a national security issue, it’s an issue that is tied to a fundamental tenet of our democracy: Elections.”
Some concerns have been raised that Mueller would be handcuffed by Federal Rule of Criminal Procedure 6(e), which imposes strict limits on the disclosure of grand jury materials. Special counsel Kenneth Starr, for instance, had to get a court order allowing him to disclose grand jury materials in his eponymous report.
McCord said that Mueller would obviously “have to be aware of that in making any kind of report.” But, she said, “it’s possible that some of what he might include comes from things that aren’t 6(e) privileged as well.”
Mueller’s first report – on obstruction of justice – could avoid many of the thorny disclosure issues. Emptywheel blogger Marcy Wheeler, who has been rigorously analyzing the Mueller investigation, has pointed out that the obstruction investigation involved a lot of volunteered information, rather than grand jury testimony and subpoenas.
And it most likely doesn’t involve the “crown jewels” of the intelligence community: signals intelligence, or SIGINT, gathered through surveillance and intercepts.
The real action is behind the curtain
So far, the clues that have emerged directly from Mueller or his office have all been in the form of documents related to criminal indictments, so that is where much of the public speculation has centered.
But as Asha Rangappa, a former special agent in the Counterintelligence Division of the FBI field office in New York City, wrote in The Hill in January, “trying to make sense of a counterintelligence storyline by looking only at the criminal charges that stem from it is like trying to make sense of a full-length movie by watching only a few scenes: The full story will not be apparent, because key characters and events and plot lines are missing.”
The ultra-high-end real estate business, where Donald Trump made a lot of his money, is the easiest place for oligarchs and others to launder large amounts of illicit cash.
And because several of the lawyers on special counsel Robert Mueller’s team investigating Russian connections with the Trump presidential campaign are specialists in money-laundering and other financial crimes, some observers are speculating that he may be looking into Trump’s past business dealings to see if any of those connections are relevant to the matter at hand.
The fact that money-launderers flock to luxury real estate is nothing new, and isn’t much of a mystery either. It’s the direct result of a major loophole in U.S. government rules that require banks to report cash deposits over $10,000 — but allow property owners to accept $10 million in cash for a condo without divulging who gave it to them.
When it comes to the real estate business, the anti-money-laundering rules only apply to banks and other financial institutions. So when buyers take out a mortgage from a lender, they are extensively scrutinized and unusual amounts of cash are reported to the government.
But by paying all cash – behavior that would reasonably raise the most suspicion – real estate buyers actually avoid setting off any alarm bells. The real estate agents and owners pocketing huge sums are under no legal obligation to report that to anyone.
For fraudsters, drug cartels, oligarchs and corrupt foreign government officials looking for a way to launder huge sums of illicit cash — and park it somewhere safe — high-end real estate is the investment of choice. “You can put a lot of money in one place at one time, without raising any eyebrows,” says Heather Lowe, legal counsel for the dirty-money watchdog group Global Financial Integrity.
The Treasury Department explains it this way: “The real estate market can be an attractive vehicle for laundering illicit gains because of the manner in which it appreciates in value, ‘cleans’ large sums of money in a single transaction, and shields ill-gotten gains from market instability and exchange-rate fluctuations.”
A New York Times series in 2015 found that more than half of the $8 billion spent each year on New York residences that cost more than $5 million comes from shell corporations that mask the real owners’ identities, one possible sign of money-laundering.
Under pressure after the New York Times series, Treasury Department officials in early 2016decided to try an experiment in Miami-Dade County and Manhattan, ordering title insurance companies there to identify the individuals who owned the shell companies making all-cash purchases — and requiring them to send copies of the buyers’ IDs to the Treasury’s Financial Crimes Enforcement Network (FINCEN).
There were still some laughably large loopholes, chief among them the exemption of sales made with wire transfers, which are arguably the most common method of moving cash these days, especially from foreign sources.
But it helped: FINCEN reported on August 22 that a whopping 30 percent of the all-cash high-end real estate deals reported under the new program involved people who were already under government scrutiny due to potential money laundering — including a little rogue’s gallery of bribe-takers and drug smugglers.
And in a shock to Trump cynics, FINCEN officials simultaneously announced that they are not just re-upping the experiment, but expanding it to Honolulu – and including those ever-important wire transfers.
Yet even so, the new rules remain almost laughably easy to avoid: Just don’t get title insurance. That’s not an option for those of us who get a mortgage, because lenders require title insurance for their own protection. But otherwise, it’s totally optional and arguably a waste of money for the all-cash buyer.
The Russians Are Buying
Stories about money laundering in real estate – particularly by Russians and others in the former Soviet bloc – are legion.
One article in the Times series focused on apartments in the super-luxury Time Warner Center as an archetype, and “found a growing proportion of wealthy foreigners, at least 16 of whom have been the subject of government inquiries around the world, either personally or as heads of companies.” That “included government officials and close associates of officials from Russia, Colombia, Malaysia, China, Kazakhstan and Mexico.
Another Times article concluded that “the flight of wealth accrued in the chaotic capitalism of post-Soviet Russia has been a powerful force behind the luxury condominium boom reordering New York City’s skyline.”
Jennifer Shasky Calvery, then the direct of FINCEN, said last year that in her previous job — prosecuting Russian organized crime — she often found members “based outside of the United States were laundering their funds through the U.S. financial system. Often, this involved the suspected purchase of personal residences with criminal proceeds.”
The Miami Herald reported last year that “Trump helped local developers sell condos to buyers from Latin America and Russia, including people allegedly involved in corruption and wrongdoing, as well as to dozens of anonymous offshore companies.” Buyers included “members of a Russian-American organized crime group, a Venezuelan oilman convicted in a bribery scheme and a Mexican banker accused of robbing investors of their life savings.”
McClatchy reported in May about “fugitive oligarchs and their kin accused of laundering Kazakh money in posh U.S. real estate — including Trump Organization properties.”
The U.S. Attorney’s office in Manhattan abruptly and controversially settled a major money-laundering prosecution in May that had targeted Russian businessman Denis Katsyv, the owner of Prevezon Holdings. He was accused of laundering some of the $230 million he obtained through Russian tax fraud in luxury New York apartments.
None of those apartments were in Trump buildings – but there was a connection to the Trump campaign: One of Kastyv’s lawyers was Natalia Veselnitskaya, the Russian attorney who held a secret meeting in June 2016 with Trump’s son, son-in-law and then-campaign manager, offering them Russian government information on Hillary Clinton.
And once the laundered money is invested in real estate, the people who control the shell company are truly home free. It’s just that simple.
They can use the property as collateral for a loan. They can charge rent and put the money in a domestic bank account. Ownership of shell companies can be shifted at any time, with no indication in property records. And the owner of the shell company can simply turn around and sell the property — walking away with clean money. Depositing rental income or the proceeds of a real estate sale into U.S. financial institution sets off no automatic alarm bells.
“There’s really no impediment” to accessing the money after it’s been put into U.S. real estate, said Peter D. Hardy, a partner at the Ballard Spahr law firm and contributor to the Money Laundering Watch blog.
There may be some tax issues related to income or capital gains. But, Hardy said, “lots of money-laundering schemes don’t really involve tax fraud per se, in terms of hiding the income. It’s really more about being able to use it.”
Lowe said if Treasury wanted to seriously crack down on money laundering through real estate, it would require real estate agents to adopt the same kind of due-diligence, know-your-customer standards as financial institutions.
No Regrets From Trump
Neither his campaign nor his presidency have led Trump to shy away from selling real estate to shell companies – one of the possible indicators of money-laundering. In fact, a USA Today investigation published in June found that since Trump won the Republican nomination, “the majority of his companies’ real estate sales are to secretive shell companies that obscure the buyers’ identities.”
That’s a much larger proportion than the two prior years, USA Today found, but to be fair, the main concern is not so much money-laundering anymore as “that the secretive sales create an extraordinary and unprecedented potential for people, corporations or foreign interests to try to influence a President.”
Meanwhile, Trump is welcoming a major figure in luxury U.S. real estate money-laundering to the White House on September 12: Malaysian Prime Minister Najib Razak.
The Justice Department last year began the process of seizing more than $1 billion in assets of the 1Malaysia Development Berhad, the government-owned investment fund founded by Najib. Then-Attorney General Loretta E. Lynch called it “the largest single action ever brought under the Kleptocracy Asset Recovery Initiative.”
Those assets include a $30.6 million penthouse at the Time Warner Center in Manhattan and a $39 million mansion in the Los Angeles hills, both bought by shell corporations.
Najeeb might even bring this up in conversation with Trump: The assets are currently frozen, but they haven’t actually been seized yet.