Archive for April, 2018

This Is The End

Sunday, April 15th, 2018

This was the beginning of the end for the Nixon administration. One guy, Alexander Butterfield, decided to tell the truth that Nixon taped all of his Oval Office meetings. A year later Nixon resigned.

We are at that some point with the Trump administration.

The reason is that reports coming out of Cohen investigation indicate three things.

1. Cohen lied about this trip to Prague
2. Cohen kept extensive notes of his conversations with Trump including tapes of phone conversations.
3. The investigation has been going on for months. Emails, phone conversations, maybe even meetings were all captured.

In order to answer the WHY this might be the beginning of the end, we have to back up a little bit.

The Trump organization isn’t really all that it is cracked up to be. It was a small organization run mostly by his two children and Michael Cohen. If President Trump has shown anything, it is that he is not a good manager. He let his kids do it under the watchful eye of his most loyal employee, Cohen.

If you take a look at the sorts of deals that they were cutting, it was with shady characters that couldn’t find more reputable partners. Those who have taken a look at those deals also suggest that the Trump organization sold their brand for far less than they could have received for giving legitimacy to developers that had none.

Here are a few examples.

In Azerbaijan, Trump was part of a hotel project that may have been a money laundering front for oligarchs tied to Iran’s Revolutionary Guard. In the Republic of Georgia, Trump partnered with the group that is being investigated for the largest known bank-fraud/money-laundering case in history. In Indonesia, his development partner is up to his knees in dirty politics. His deals in Brazil are being investigated. The FBI is looking into his daughter’s role getting a Malaysian family who have already admitted to financial fraud to provide financial backing for a Vancouver Trump Hotel. The investigation into DTjr and Ivanka’s SoHo Trump Hotel was halted with no notice. His Taj Mahal Atlanta Casino was fined a record amount for money laundering.

As Adam Davidson pointed out in his New Yorker article.

It was not a company that built value over decades, accumulating assets and leveraging wealth. It burned through whatever good will and brand value it established as quickly as possible, then moved on to the next scheme.

The reason why we are near the end is that each of these shady business deals has its own set of risks and questions. But the questions boil down to the same set. How much did Trump and his kids know about the criminal backgrounds of their partners? Did that criminality have any effect on the price they were charging for the Trump “endorsement”? Cohen is the person who knows the answers. Those answers will determine who else besides Cohen goes to jail and for how long.

Some of the other things that the FBI are investigating include a business loan where Cohen used his three taxi companies as collateral. The license to operate a taxi in NY used to be a lucrative business. Cohen’s licenses at one time were worth over $1M. Their value has plummeted because of ride hailing services like Uber and Lyft. Cohen’s licenses may now only be worth $300,000. So there is interest in what he claimed they were worth when he took out the loan and what he used the loan money for.

They are also concerns about money laundering and campaign-finance violations.

The bottom line is that the authorized search had such a high bar for approval, that most informed observers believe that the NY prosecutor may already have had sufficient evidence to convict at least Cohen.

As I’ve said before, I don’t think that Trump will be indicted on a charge of collusion. First of all, it’s just hard to prove. Second, it is just doesn’t fit with the Trump organization culture. A complex plan with a long-term uncertain payoff. Many reports suggest that Trump wasn’t convinced himself that he could win the election. Why would he ask Russians for help unless there was something else in it for him? The fact that the FBI now says that Cohen DID go to Prague supports a key element of the Steele Dossier. It also indicates that there was a deal in the works, or else Cohen would not have been involved.

That’s what we are going to find out.

With all this as background, it is easy to see why Trump said Mueller would be crossing a red line if he started investigating Trump’s businesses. Mueller not only crossed that line. He obliterated it. Even worse, he turned the business investigation over to the NY federal prosecutor. So even if Trump manages to fire Mueller and Congress does nothing in response, this investigation will continue. Even if Trump manages to dissolve Mueller’s Grand Jury, this investigation will continue. Even if Trump pardon’s Cohen, the information that the Feds already have on Cohen can likely become the basis for charges against Trump’s kids.

It may take a long time for all of this information to become public. We give the President a lot of executive power. If he chooses to use it, and Congress doesn’t hold him accountable, he can fight a very effective rear guard action. Eventually, however, all of this information will come out and Trump will finally be revealed for who he really is – a cheat, a liar, and a thief.

Pinocchios As Far As The Eye Can See

Tuesday, April 10th, 2018

via GIPHY

Michael Cohen’s office, his home, and a hotel room were searched recently by the FBI.

Here are some of the responses from President Trump.

I just heard that they broke into the office of one of my personal attorneys

Attorney–client privilege is dead!

Disgraceful situation

It’s a total witch hunt

It’s an attack on our country,

It’s an attack on what we all stand for.

Let’s go through what actually happened and compare it to Trump’s response.

The FBI executed a search warrant obtained by federal prosecutors in the Southern District of New York. What that means is that a federal judge had to issue this search warrant. What that means is that the evidence that the federal prosecutor presented to this judge was sufficiently convincing that the judge agreed that whatever evidence they were looking for was at risk if an immediate search did not occur. What THAT means is that the judge and the prosecutor who are both very aware of the concept of attorney client privilege, determined that the possible criminal activity here was not protected by that privilege. According to the Wash Post.

Searches of an attorney’s office are extremely rare and are not favored, due to their potential to impinge on the attorney-client relationship. Prosecutors must jump through multiple hoops to get such a warrant approved, both within their own office and at the criminal division of Main Justice. (Notably, this would likely have included approval by Trump’s own guy, the new interim U.S. attorney for the Southern District, Geoffrey S. Berman, who was just appointed by Attorney General Jeff Sessions this past January.)

And

Approval of a search warrant suggests prosecutors were able to demonstrate not only the gravity of the potential case but also the risk that evidence might be destroyed or otherwise go missing if they pursued a less aggressive option.

Trump and the White House knew all of these facts. Yet Trump characterized it as a “break-in”. It was nothing of the sort. The FBI had a warrant.

As far as the attorney-client privilege, it does not protect communications used in committing either fraud or a crime. Also if Cohen acted on his own, as Trump claims he did in the Stormy Daniels payoff, that action isn’t protected because the “client” part of the conversation is missing. Finally, fraudulent or criminal documents are not protected just because they passed through an attorney’s hands.

Because of the sensitive nature of this investigation, prosecutors go through extraordinary lengths to shield those involved in the prosecution from those involved in the investigation. That protects the prosecution from any claims of bias that could develop during the investigation. This is evidence of the legal system working at a high level to insure that there is no taint of bias.

There are likely going to be legal wrangles on what documents actually end up being used in this case. That’s why it was important to secure them. The courts will ultimately decide which documents are admissible in Cohen’s trial.

Trump called this a disgrace and the end of attorney-client privilege. It is nothing of the sort. Instead it is the highest demonstration of how our legal system works to both protect the attorney-client privilege and prosecute those who seek to abuse it.

The New York Federal prosecutor was involved because of a referral from Mueller. What that means is that in the course of the Mueller investigation they came across evidence that implicated Cohen, but that evidence was not directly related to the Mueller investigation of Russian involvement in the 2016 election. As a result, Mueller did what he was supposed to do. Rather than go outside the limits of the investigation set by the Deputy AG, he turned his information over the Federal prosecutor in NY and let them decide what to do with it.

If this was the witch hunt that Trump has claimed, Mueller would have pursued this himself. He didn’t because it isn’t.

What’s likely going on here is that Mueller gained access to information regarding the Stormy Daniels payoff. That information probably didn’t implicate Trump, but did suggest that Cohen broke the law. Cohen will have an opportunity to defend himself in court. As a lawyer, however, Cohen knew what risks he was taking when he agreed to broker this payoff. He is now suffering the consequences.

So, is this an attack on our country?

I say yes, but not in the context that Trump meant it. Trump isn’t the victim. He is the attacker. He is actively undermining the public trust in our system of justice. A judge has decided that there was enough information to authorize searching an attorney’s office. It is HIGHLY likely that the information that the Federal prosecutor already has is sufficient to convict Cohen. It will be interesting to see if Cohen will make a deal in order to avoid jail time.

Is this an attack on what we all stand for?

Yes again. It is another example of authoritarianism at work. No one is above the law. What we all stand for is equal protection under the law.

Trump is claiming that he is being persecuted. But Cohen isn’t being investigated because of his relationship with Trump. He is being investigated because there is strong evidence that he broke the law. If Trump is to be believed, Cohen broke the law on his own. Cohen will have his day in court.

Similarly, Trump has only himself to blame for the Mueller investigation. He was the one who fired Comey. He was the one who lied about Russian involvement in the election. He is the one who has chosen to pick a fight with the media. He is the one broke his promise to release his taxes. He is the one who refused to divest himself of his investments. He is the one who ignored nepotism rules. He is the one who chose to seek the support of authoritarians. He is the one who continues to undermine our democracy with his words and action.

In the meantime, the foundations of Trump-world crumble as one after another of his allies resign, are fired, or are indicted. While Trump may retain political support, in a democracy there are unavoidable legal consequences to lying. Holding those accountable who break the law is what we all stand for.