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The Tea Leaves on Mueller’s Hand Off

As part of writing this post, I confirmed for the first time that the prosecutor I spoke with regarding the Russian attack is not and never has been part of the Mueller team (among other things, I think that means Peter Strzok never got within a mile of my testimony, which is why I asked). But a prosecutor who was involved in discussions setting up my interview is, and the Special Counsel’s Office certainly seemed to recognize my interview as part of the investigation when I alerted them I was going to publish that text. Given that the FBI agents I spoke with didn’t know what topics I cover for a living (and seemed to get wiser about the person we were discussing over two breaks), my guess is that DOJ assigned a team segmented off from the investigation to ensure that no one accidentally dropped hints about the investigation. That’s all just a wildarseguess, though. DOJ has gone to great lengths to ensure I don’t learn anything from the process, as is proper.

Having that tiny glimpse into how DOJ used a prosecutor uninvolved in the case in chief to talk to me about what may have become part of the case in chief is background to explain why I doubt some of the conclusions made in this piece, reporting that Mueller has divvied up tasks to career prosecutors from elsewhere in DOJ.

As Mueller pursues his probe, he’s making more use of career prosecutors from the offices of U.S. attorneys and from Justice Department headquarters, as well as FBI agents — a sign that he may be laying the groundwork to hand off parts of his investigation eventually, several current and former U.S. officials said.

Mueller and his team of 17 federal prosecutors are coping with a higher-then-expected volume of court challenges that has added complexity in recent months, but there’s no political appetite at this time to increase the size of his staff, the officials said.

[snip]

Investigators in New York; Alexandria, Virginia; Pittsburgh and elsewhere have been tapped to supplement the work of Mueller’s team, the officials said. Mueller has already handed off one major investigation — into Trump’s personal lawyer, Michael Cohen — to the Southern District of New York.

The only thing that is clearly new in this paragraph is that Mueller has involved prosecutors in Pittsburgh. As the paragraph itself notes, [part of] the investigation into Michael Cohen got handed off to SDNY. But that’s because it involves conduct — a hush money payment that Cohen arranged from Manhattan and taxi medallion fraud — that don’t clearly relate to Russian election interference. Other reports suggest that conduct more closely tied to the election, such as Cohen’s involvement in inauguration graft, remains in Mueller’s hands.

Similarly, we know of at least one EDVA prosecutor involved in Mueller’s investigation. Uzo Asonye got moved onto the team to placate TS Ellis. He will presumably present a good part of the trial that starts later this month, freeing up another member of that team to focus on the DC side of Manafort’s corruption. But that move was driven, in significant part, from Ellis’ direction.

With Michael Cohen and Paul Manafort, there’s plenty of corruption to spread across multiple districts! Heck, Manafort’s former son-in-law is cooperating against him based off a case in LA, and Dmitri Firtash, who is under indictment in Chicago, is one of four oligarchs explicitly named in Manafort’s search warrant.

And, frankly, I’m offended by this passage.

Mueller indicted 13 Russian individuals and three entities in February on charges of violating criminal laws with the intent to interfere with the U.S. election through the manipulation of social media.

None of the targets are in the U.S., but one of them, the Internet Research Agency, has forced Mueller into another legal fight in federal court. The two sides have been sparring most recently over how to protect sensitive investigative materials from disclosure. Mueller has enlisted prosecutors with the U.S. Attorney’s office in Washington to handle the case.

I’m offended not just because the passage is factually false: the entity mounting a defense is Concord Management, not Internet Research Agency. But because one should never label a defendant mounting a defense as “forc[ing the prosecutor] into another legal fight.” Yes, Concord’s defense is trollish lawfare aiming to discover intelligence. But that is the risk of using indictments to lay out nation-state information operations.

Also, as I suggested in this post and this post, commentators have made far too much of the technical requirements of the Concord case. The government will use no classified data in the trial, if the trial ever really happens. Which suggests the case will be a glorified call records case, showing that the people running certain accounts were operating from certain IP addresses. That’s not to minimize the import of call records in proving crimes. But it’s just not the most technically difficult case to prove.

Which brings us back to Pittsburgh. In fact, Pittsburgh has already been involved in this case — back when the investigation of the hack of the DNC lived there, as many nation-state hacking cases do. Now, it is definitely true that the hack investigation had, at some point, been moved under Mueller; I know of a witness to the hack who was interviewed at Mueller’s office. But if Mueller’s team of 17 were focused more closely on the “collusion” case, I could imagine them moving the hack case back to where it started.

If that’s actually what happened, it would amount to a hand off, of sorts. But it may not be all that momentous a development. Rather, it might reflect Mueller’s (and Rod Rosenstein’s) continued efforts to keep the matters he will prosecute (as distinct from investigate) closely related to the “collusion” case. That seems like a sound decision both form a resourcing perspective, but it’s a good way to rebut claims that he’s a runaway prosecutor.

Some Thoughts On The Manafort Indictment

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The first shoe has dropped in the big indictment watch initiated late Friday with the news that an indictment had been rendered in the Mueller investigation. Paul Manafort and his longtime business partner Rick Gates have been told to self surrender this morning. Manafort has already arrived at the field office for processing as the attached picture reflects. Here is the NYT story:

The charges against Mr. Manafort, President Trump’s former campaign chairman, were not immediately clear but represent a significant escalation in a special counsel investigation that has cast a shadow over the president’s first year in office. Also charged was Mr. Manafort’s former business associate Rick Gates, who was also told to surrender on Monday, the person said.

Mr. Manafort walked into the F.B.I.’s field office in Washington at about 8:15 a.m. with his lawyer.

Mr. Gates is a longtime protégé and junior partner of Mr. Manafort. His name appears on documents linked to companies that Mr. Manafort’s firm set up in Cyprus to receive payments from politicians and businesspeople in Eastern Europe, records reviewed by The New York Times show.

Mr. Manafort had been under investigation for violations of federal tax law, money laundering and whether he appropriately disclosed his foreign lobbying.

The indictment is here and contains twelve counts for conspiracy, conspiracy to launder money, failure to file as foreign agents, failure to file proper financial reports and false statements. Notable also is the notice of forfeiture of both real and personal property, and any derivative property tied thereto.

The fact that the first shoe is Manafort is no surprise. What is surprising, to me at least, is that it does not appear that Manafort’s wife Kathleen was named. This may be a reflection as to the nature of the charges … the charges may only be for activity she was not involved in. Or not. But, make no mistake, she is involved in many of the charges for tax fraud and money laundering; she has solid exposure. Perhaps Mueller and Andrew Weissmann have already discussed this with Manafort and his lawyer, or maybe that is being reserved as leverage in a potential superseding indictment. But it is extremely interesting that she does not appear to be named yet. Stunning actually.

Add into the status of Kathleen Manafort that she and her husband are reported to be near broke as to liquid funds, and their real estate is already heavily leveraged and now subject to civil seizure at this point. And given the fairly recent outing of Manafort having a very expensive mistress half his age, things cannot be too cozy on the Manafort home front. This is total chum in the water for an aggressive prosecutor like Weissmann. Why did he not take it??

NBC News is reporting that the current charges were brought now because of statute of limitation concerns on some of them, and that further charges are absolutely not ruled out. Which makes it even more curious that Kathleen Manafort is not named.

Manafort is a high value target for the Mueller shop. But so too is his lesser known business partner Rick Gates. Gates was not only with Manafort on the Trump Campaign and DNC Convention, but stayed on in a significant role with Trump throughout the campaign and transition, including the inaugural committee, even after Manafort left. Gates, like Manafort, has close foreign ties, including with Russia and Ukraine.

Two people to keep your eye on are Dmitri Firtash and Oleg Deripaska, Putin allies. As as Spencer Ackerman says
in the money “behind pro-Kremlin party in Ukraine that hired Manafort. He’s indicted in IL. Watch what Sessions does”. Spencer is right about that. Here is some bits from Spencer’s report on Manafort, Rick Gates and Firtash back in August:

Asked whether any Manafort deals seemed particularly troubling in retrospect, a senior administration official replied, “You mean like this one?” and appended a link to a 2016 story on Manafort’s alleged attempts to launder a Ukrainian oil and gas billionaire’s ill-gotten fortune through New York real estate—including the Drake.

The Justice Department is now seeking the extradition of that billionaire, Dmitry Firtash, so he can stand trial for a 2013 racketeering indictment in a Chicago federal court. Two weeks ago, in response to a legal filing from Firtash seeking dismissal of the case, the acting U.S. attorney in Chicago termed Firtash and a deputy as “two organized-crime members” and people “identified by United States law enforcement as two upper-echelon associates of Russian organized crime.” Years before the indictment, Firtash was a major moneyman for the Party of Regions in Ukraine, the pro-Kremlin political faction for which Manafort consulted.

Firtash’s alliance with Manafort to acquire the Drake has been reported before. But far less attention has gone to the involvement of another party: Oleg Deripaska, one of the wealthiest men in Russia—and a longtime Putin associate. In 2006, according to the Associated Press, Deripaska signed a $10 million annual contract with Manafort for what Manafort pitched as political and economic efforts inside the U.S. to “greatly benefit the Putin Government.”
But Manafort was more than Deripaska’s political operative. They were business partners, as well.

“When Paul met with Mr. D last month he told Paul to lock in the other financing elements and then come back to him for the final piece of investment,” Gates wrote to two longtime business associates of Deripaska, Anton Vishnevsky and Andrey Zagorskiy, on July 1, 2008.

According to ex-prosecutors, a business relationship between a Kremlin-tied oligarch, an accused gangster and the manager of Donald Trump’s campaign is the sort of arrangement currently occupying Mueller’s time.

“Any financial dealings with Russia and Ukraine would be considered within the scope of [Mueller’s] current mandate,” said Barbara McQuade, the U.S. attorney in Detroit until Trump fired her in March. “With the search warrant executed on Manafort’s home, looking for bank records, tax records, and the like, it seems like this is the kind of thing that Mueller would be interested in.”

To sum up, today’s indictment news is quite a big deal. The spokes that look likely to come out of it lead directly to the biggest Russian interests imaginable. Ones that very likely lead to Trump as well, whether financial or in relation to potential collaboration and conspiracy to influence the 2016 election.

Time will tell where this goes, but this is an extremely significant and rollicking start.