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About the Oleg Deripaska Reference in the Mueller Memo

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As I promised in my general summary of the Mueller memo and my assertion that there are more memos from DAG Rosenstein authorizing expanded scope on Mueller’s investigation, I want to comment on the reference to Oleg Deripaska in the memo.

The memo, remember, ostensibly only needs to lay out how Mueller’s appointment “to investigate Russian interference with the 2016 presidential election and related matters” authorizes him to prosecute a bunch of money laundering used to hide the fact that Paul Manafort was lobbying for the interests of the Party of Regions, the Russian backed effort to keep its favored oligarchs in power in Ukraine, when he was pretending to represent an independent entity.

But at the end of a long paragraph explaining how Rosenstein’s appointment order alone would justify that prosecution — because Manafort played a key role in Trump’s campaign, and because Manafort resigned after his extensive ties to Yanukovych were exposed — Mueller drops in a reference to “open source reporting” tying Manafort to Deripaska.

The Appointment Order itself readily encompasses Manafort’s charged conduct. First, his conduct falls within the scope of paragraph (b)(i) of the Appointment Order, which authorizes investigation of “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump.” The basis for coverage of Manafort’s crimes under that authority is readily apparent. Manafort joined the Trump campaign as convention manager in March 2016 and served as campaign chairman from May 2016 until his resignation in August 2016, after reports surfaced of his financial activities in Ukraine. He thus constituted an “individual associated with the campaign of President Donald Trump.” Appointment Order ¶ (b) and (b)(i). He was, in addition, an individual with long ties to a Russia-backed Ukrainian politician. See Indictment, Doc. 202, ¶¶ 1-6, 9 (noting that between 2006 and 2015, Manafort acted as an unregistered agent of Ukraine, its former President, Victor Yanukovych—who fled to Russia after popular protests—and Yanukovych’s political party). Open-source reporting also has described business arrangements between Manafort and “a Russian oligarch, Oleg Deripaska, a close ally of President Vladimir V. Putin.”8 [my emphasis]

There’s no explicit reference to Deripaska in Manafort’s indictment. The only public references to him in the Manafort prosecution I’m aware of are instead to Deripaska’s crony, Konstantin Kilimnik, laying out his efforts to spin the indictment in an op-ed in the Kyiv Post, which Mueller’s prosecutors argued was an attempt to skirt the gag rule in the case. There’s admittedly more detailed reference to Kilimnik — referred to as Person A — in the same team’s sentencing memo for Alex Van der Zwaan, including the assertion that,

[T]he lies and withholding of documents were material to the Special Counsel’s Office’s investigation. That Gates and Person A were directly communicating in September and October 2016 was pertinent to the investigation. Federal Bureau of Investigation Special Agents assisting the Special Counsel’s Office assess that Person A has ties to a Russian intelligence service and had such ties in 2016. During his first interview with the Special Counsel’s Office, van der Zwaan admitted that he knew of that connection, stating that Gates told him Person A was a former Russian Intelligence Officer with the GRU.2

2 Person A worked with Manafort and Gates in connection with their Ukraine lobbying work. Person A is a foreign national and was a close business colleague of Manafort and Gates. He worked in Ukraine at Manafort’s company Davis Manafort International, LLC (DMI). Up until mid-August 2016, Person A lived in Kiev and Moscow

But thus far, nothing specifically relating to Deripaska or Kilimnik has been charged, even while a different open source report describing Manafort’s offer to give private briefings to Deripaska via Kilimnik laid out a much closer tie between Deripaska and election tampering, and another open source report described FBI scrutiny of Kilimnik’s role in changing the GOP platform.

As noted, instead of referencing those more damning open source reports, Mueller instead points to the August 15, 2016 NYT article that precipitated Manafort’s resignation from the Trump campaign. The report, sourced to investigators in “Ukraine’s newly formed National Anti-Corruption Bureau” laid out the secret ledgers showing that Manafort may have received $12.7 million in off-the-book payments for his consulting services that tampered with Ukraine’s electoral process.

The report goes on to lay out the general logic of the money laundering prosecution at issue — how Manafort’s money laundering prevented others from understanding how much he actually made for his services to Yanukovych and the Party of Regions.

Mr. Manafort never registered as a foreign agent with the United States Justice Department — as required of those seeking to influence American policy on behalf of foreign clients — although one of his subcontractors did.

It is unclear if Mr. Manafort’s activities necessitated registering. If they were limited to advising the Party of Regions in Ukraine, he probably would not have had to. But he also worked to burnish his client’s image in the West and helped Mr. Yanukovych’s administration draft a report defending its prosecution of his chief rival, Yulia V. Tymoshenko, in 2012.

Whatever the case, absent a registration — which requires disclosure of how much the registrant is being paid and by whom — Mr. Manafort’s compensation has remained a mystery.

From there, it turns to the Pericles Open Market fund that Manafort, Gates, and others got Deripaska to fund. The story doesn’t describe any direct tie between the secret ledgers at issue in the story and the Deripaska investments. Rather,the Deripaska lawsuit against Manafort made details of the fund available to Ukraine’s special prosecutor, who cited them as an example of how Yanukovych’s cronies laundered money.

In a recent interview, Serhiy V. Gorbatyuk, Ukraine’s special prosecutor for high-level corruption cases, pointed to an open file on his desk containing paperwork for one of the shell companies, Milltown Corporate Services Ltd., which played a central role in the state’s purchase of two oil derricks for $785 million, or about double what they were said to be worth.

“This,” he said, “was an offshore used often by Mr. Yanukovych’s entourage.”

[snip]

Mr. Deripaska agreed to commit as much as $100 million to Pericles so it could buy assets in Ukraine and Eastern Europe, including a regional cable television and communications company called Black Sea Cable. But corporate records and court filings show that it was hardly a straightforward transaction.

The Black Sea Cable assets were controlled by a rotating cast of offshore companies that led back to the Yanukovych network, including, at various times, Milltown Corporate Services and two other companies well known to law enforcement officials, Monohold A.G. and Intrahold A.G. Those two companies won inflated contracts with a state-run agricultural company, and also acquired a business center in Kiev with a helicopter pad on the roof that would ease Mr. Yanukovych’s commute from his country estate to the presidential offices.

The Deripaska reference in a memo describing why Mueller was authorized to prosecute Manafort for related (but not explicitly) money laundering would otherwise be a non-sequitur. Because it appears in an article that not only lays out the basis for the underlying charges, but does so in an article that had an impact on Manafort’s role in the campaign, it doesn’t seem so obviously tangential. Plus, it has the added benefit (unlike the open source reporting deriving from leaks from Congress or law enforcement) of being an on-the-record source from someone perfectly entitled to the talk to the press about Ukraine’s investigation into Manafort. This, then, was a legally permissible way to insert Deripaska into a filing where he otherwise might not have belonged.

Plus, that same open source report lays out that Ukraine’s National Anti-Corruption Bureau can’t prosecute suspects, but instead has to rely on entities like the FBI — with which it has an evidence sharing agreement — to do so.

The bureau, whose government funding is mandated under American and European Union aid programs and which has an evidence-sharing agreement with the F.B.I., has investigatory powers but cannot indict suspects. Only if it passes its findings to prosecutors — which has not happened with Mr. Manafort — does a subject of its inquiry become part of a criminal case.

During Jim Comey’s March 20, 2017 testimony (which is cited explicitly in the Mueller memo to lay out the initial unclassified scope of the investigation), Jim Himes tried to get the then FBI Director to admit that DOJ had not responded to seven requests for MLAT assistance to secure Manafort’s cooperation in their inquiry.

HIMES: And the reason I bring all this up with you is because the story also says and it appears to have been confirmed by the Department of Justice that the current Ukraine regime, hardly a friend of the Russians. And very much targeted by the Russians has made seven requests to the United States government’s — the United States government for assistance under the MLA treaty in securing the assistance of Paul Manafort as part of this on anti-corruption case. And in fact, the story says that you were presented personally with a letter asking for that assistance.

So my question Director Comey is, is that all true? Have you been asked to provide assistance to the current Ukrainian government with respect to Paul Manafort? And how do you intend to respond to that request?

COMEY: It’s not something I can comment on. I can say generally, we have a very strong relationship and cooperation in the criminal and national security areas with our Ukrainian partners, but I can’t talk about the particular matter.

Comey, while not confirming the report, instead suggested that the FBI continued to cooperate closely with Ukraine on this issue — a strong suggestion that Ukraine ultimately had asked an entity that could take prosecutorial action to do so.

To sum up thus far: this reference to Deripaska is, to the best of my knowledge, the first explicit reference to him anywhere in the Manafort docket. It has no obvious place in a memo explaining why Mueller is authorized to prosecute Manafort for money laundering tied to the Party of Regions. But there it is, in the middle of a paragraph explaining why Manafort’s prosecution follows logically even from the original grant of authority, to say nothing of any unredacted or redacted bullet points explicitly including Manafort’s alleged and documented ties to Deripaska in the scope of Mueller’s authority. By including it in the memo, Mueller effectively includes Deripaska in the ongoing discussions of the things Judge Amy Berman Jackson will likely soon agree Mueller has the authority to prosecute.

It is, then, the most telling line in the entire memo, and the most clever. It uses the opportunity of this memo to pre-authorize where Mueller is going, without having to reveal what evidence Mueller is sitting on to go there.

Of course, where he’s going — to this oligarch and his crony’s role in Trump’s election — is very obviously tied to the case in chief, the Russian tampering in the US election.

Update: Later today Mueller’s team requested permission to file one of the exhibits from their filing — which given Judge Berman Jackson’s description has to be the Rosenstein memo — under seal. Which suggests they want him to know what else he’s being investigated for, which is probably the Deripaska stuff.

There Are Almost Certainly Other DAG Rosenstein Memos

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As I noted in this post, Robert Mueller’s team of “Attorneys for the United States of America” responded to Paul Manafort’s claim that Rod Rosenstein’s grant of authority to the Special Counsel did not extend to the money laundering he is currently being prosecuted for by revealing an August 2, 2017 memo from Rosenstein authorizing Mueller to investigate, along with a bunch of redacted stuff,

Allegations that Paul Manafort:

  • Committed a crime or crimes by colluding with Russian government officials with respect to the Russian government’s efforts to interfere with the 2016 election for President of the United States, in violation of United States law;
  • Committed a crime or crimes arising out of payments he received from the Ukrainian government before and during the tenure of President Viktor Yanukovych.

As the filing notes, this memo has not been revealed before, neither to us nor to Manafort.

That’s all very interesting (and has the DC press corps running around claiming this is a big scoop, when it is instead predictable). More interesting, however, is the date, which strongly suggests that there are more of these memos out there.

Mueller is unlikely to have waited two and a half months to memorialize his scope

I say that, first of all, because Rosenstein wrote the August 2 memo two and a half months after he appointed Mueller. Given Trump’s raging attacks on the investigation, it’d be imprudent not to get memorialization of the scope of the investigation at each step. Indeed, as I’ve noted, in the filing Mueller points to the Libby precedent, arguing that this memo “has the same legal significance” as the two memos Jim Comey used to (publicly) memorialize the scope of Patrick Fitzgerald’s investigation.

The August 2 Scope Memorandum is precisely the type of material that has previously been considered in evaluating a Special Counsel’s jurisdiction. United States v. Libby, 429 F. Supp. 2d 27 (D.D.C. 2006), involved a statutory and constitutional challenge to the authority of a Special Counsel who was appointed outside the framework of 28 C.F.R. Part 600. In rejecting that challenge, Judge Walton considered similar materials that defined the scope of the Special Counsel’s authority. See id. at 28-29, 31-32, 39 (considering the Acting Attorney General’s letter of appointment and clarification of jurisdiction as “concrete evidence * * * that delineates the Special Counsel’s authority,” and “conclud[ing] that the Special Counsel’s delegated authority is described within the four corners of the December 30, 2003 and February 6, 2004 letters”). The August 2 Scope Memorandum has the same legal significance as the original Appointment Order on the question of scope.

The first of those Comey letters, dated December 30, 2003, authorized Fitz to investigate the leak of Valerie Plame’s identity. The second of those, dated February 6, 2004, memorialized that Fitz could also investigate,

federal crimes committed in the course of, and with intent to interfere with, your investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses; to conduct appeals arising out of the matter being investigated and/or prosecuted; and to pursue administrative remedies and civil sanctions (such as civil contempt) that are within the Attorney General’s authority to impose or pursue.

It’s the second memo that memorialized Fitz’ authority to prosecute Scooter Libby for protecting Dick Cheney’s role in outing Valerie Plame.

Mueller, then the acting FBI Director, would presumably have been in the loop of the Fitz investigation (as Christopher Wray is in Mueller’s) and would have known how these two letters proceeded. So it would stand to reason he’d ask for a memo from the start, particularly given that the investigation already included multiple known targets and that Trump is even more hostile to this investigation than George Bush and Dick Cheney were to Fitz’s.

Admittedly, unlike the Comey memo, which was designed for public release, there’s no obvious, unredacted reference to a prior memo. Though something that might imply a prior memo is redacted at the top of the released memo (though this is probably a classification marking).

And, given that this memo was designed to be secret, Rosenstein may have written the memo to obscure whether there are prior ones and if so how many.

The memo closely follows two key dates

That said, the date of the memo, August 2, is mighty curious. It is six days after the July 27 Papadopoulos arrest at Dulles airport. And seven days after the July 26 no knock search of Paul Manafort’s Alexandria home.

That timing might suggest any of several things. It’s certainly possible (though unlikely) the timing is unrelated.

It’s possible that Rosenstein wrote the memo to ensure those two recent steps were covered by his grant. That wouldn’t mean that the search and arrest wouldn’t have been authorized. The memo itself notes that Mueller would be obliged to inform Rosenstein before each major investigative step.

The Special Counsel has an explicit notification obligation to the Attorney General: he “shall notify the Attorney General of events in the course of his or her investigation in conformity with the Departmental guidelines with respect to Urgent Reports.” 28 C.F.R. § 600.8(b). Those reports cover “[m]ajor developments in significant investigations and litigation,” which may include commencing an investigation; filing criminal charges; executing a search warrant; interviewing an important witness; and arresting a defendant.

Both Papadopoulos’ arrest and that dramatic search would fit this criteria. So it’s virtually certain Rosenstein reviewed Urgent Memos on both these events before they happened. Plus, his memo makes it clear that the allegations included in his memo “were within the scope of the Investigation at the time of your appointment and are within the scope of the Order,” meaning that the inclusion of them in the memo would retroactively authorize any activities that had already taken place, such as the collection of evidence at Manafort’s home outside the scope of the election inquiry.

As I noted, the memo also asserts that Special Counsels’ investigative authority, generally, extends to investigating obstruction and crimes the prosecutor might use to flip witnesses.

The filing is perhaps most interesting for the other authorities casually asserted, which are not necessarily directly relevant in this prosecution, but are for others. First, Mueller includes this footnote, making it clear his authority includes obstruction, including witness tampering.

The Special Counsel also has “the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel’s investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses” and has the authority “to conduct appeals arising out of the matter being investigated and/or prosecuted.” 28 C.F.R. § 600.4(a). Those authorities are not at issue here.

Those authorities are not at issue here, but they are for the Flynn, Papadopoulos, Gates, and Van der Zwaan prosecutions, and for any obstruction the White House has been engaging in. But because it is relevant for the Gates and Van der Zwaan prosecutions, that mention should preempt any Manafort attempt to discredit their pleas for the way they expose him.

The filing includes a quotation from DOJ’s discussion of special counsels making it clear that it’s normal to investigate crimes that might lead someone to flip.

[I]n deciding when additional jurisdiction is needed, the Special Counsel can draw guidance from the Department’s discussion accompanying the issuance of the Special Counsel regulations. That discussion illustrated the type of “adjustments to jurisdiction” that fall within Section 600.4(b). “For example,” the discussion stated, “a Special Counsel assigned responsibility for an alleged false statement about a government program may request additional jurisdiction to investigate allegations of misconduct with respect to the administration of that program; [or] a Special Counsel may conclude that investigating otherwise unrelated allegations against a central witness in the matter is necessary to obtain cooperation.”

That one is technically relevant here — one thing Mueller is doing with the Manafort prosecution (and successfully did with the Gates one) is to flip witnesses against Trump. But it also makes it clear that Mueller could do so more generally.

Mueller used the false statements charges against Papadopoulos to flip him. He surely hopes to use the money laundering charges against Manafort to flip him, too. Both issues may have been at issue in any memo written to newly cover the events of late July.

Mueller may not have revealed the scope of the Manafort investigation at that time

Now consider this detail: the second bullet describing the extent of the investigation into Manafort has a semi-colon, not a period.

It’s possible Mueller used semi-colons after all these bullets (of which Manafort’s is the second or third entry). But that, plus the resumption of the redaction without a double space suggests there may be another bulleted allegation in the Manafort allegation.

There are two other (known) things that might merit a special bullet. First, while it would seem to fall under the general election collusion bullet, Rosenstein may have included a bullet describing collusion with Aras Agalarov and friends in the wake of learning about the June 9 Trump Tower meeting with his employees. More likely, Rosenstein may have included a bullet specifically authorizing an investigation of Manafort’s ties with Oleg Deripaska and Konstantin Kilimnik.

The Mueller memo actually includes a specific reference to that, which as I’ve noted I will return to.

Open-source reporting also has described business arrangements between Manafort and “a Russian oligarch, Oleg Deripaska, a close ally of President Vladimir V. Putin.”

The latter might be of particular import, given that we know a bunch of fall 2017 interviews focused on Manafort’s ties to Deripaska and the ongoing cover-up with Kilimnik regarding the Skadden Arps report on the Yulia Tymoshenko prosecution.

All of which is to say that this memo may reflect a new expansion of the Manafort investigation, perhaps pursuant to whatever the FBI discovered in that raid on Manafort’s home. If so, that should be apparent to him, as he and his lawyers know what was seized.

Still, I wouldn’t be surprised if he inquired about what authorized that July 26 raid, if for no other reason than to sustain his effort to make more information on Mueller’s investigation public.

The redactions almost certainly hide two expansions to the investigation as it existed in October 2016

Now let’s turn to what else (besides another possible Manafort bullet) the redactions might show, and what may have been added since.

The unredacted description of the Manafort investigation takes up very roughly about one fifth of the section describing allegations Mueller was pursuing.

The Schiff Memo revealed that DOJ had sub-investigations into four individuals in October 2016.

Endnote 7 made it clear that, in addition to Page, this included Flynn and Papadopoulos, probably not Rick Gates, and one other person, possibly Roger Stone.

In August 2017, all four of those would have been included in a Rosenstein memo, possibly with a bullet dedicated to Gates alone added. That said, not all of these would require two or more bullets (and therefore as much space as the Manafort description). Papadopoulos’ description might include two, one dedicated to the collusion and one to the lying about collusion, or just one encompassing both the collusion and the lying. Flynn’s might include three, one dedicated to the collusion, one to the lying about it, and one to the unregistered foreign agent work, including with Turkey, that we know Mueller to have been investigating; or, as with Papadopoulos, the lying about the collusion might be incorporated into that bullet. Stone’s bullet would likely have only reflected the collusion, an investigation that is currently very active. Carter Page’s suspected role as a foreign agent might be one bullet or two.

That suggests, though doesn’t confirm, that there are a few other things included in those redacted bullets, things not included in the investigation in October 2016 as reflected in the Schiff memo.

Indeed, we should expect two more things to be included in the bullet points: First, the name of any suspect, including the President, associated with the obstruction of justice. Rosenstein himself had already been interviewed with respect to that aspect of the investigation by August 2, so surely Rosenstein had already authorized that aspect of the investigation.

The redactions most likely also include the names of Don Jr and Jared Kushner (and Paul Manafort), for their suspected collusion with Russia as reflected in the June 9 meeting. At least according to public reporting, Mueller may have first learned of this in June when Manafort and Kushner confirmed it in turning over evidence to Congress and Mueller. The first revelations that Mueller was obtaining subpoenas from a dedicated grand jury were on August 3, just one day after this memo. That same day, reports described Mueller issuing subpoenas related to the June 9 meeting.

Indeed, it’s quite possible Rosenstein issued this memo to memorialize the inclusion of the President’s spawn among the suspects of the investigation.

Rosenstein has almost certainly updated this memo since August 2

All that said, there’s not enough redacted space to include the known expanded current scope of the investigation, and given that the newly expanded scope gets closer to the President, Rosenstein has surely issued an update to this memo since then. These things are all definitively included in the current scope of the investigation and might warrant special mention in any update to Rosenstein’s authorizing memo:

Many of these — particularly the ones that affect only Russians — might be included under a generic “collusion with Russia” bullet. The closer scrutiny on Jared, however, surely would get an update, as would any special focus on the Attorney General.

More importantly, to the extent Mueller really is investigating Trump’s business interests (whether that investigation is limited just to Russian business, or more broadly) — the red line the NYT helpfully set for the President — that would necessarily be included in the most up-to-date memo authorizing Mueller’s activities. There is no way Mueller would take actions involving the President personally without having the authorization to do so in writing.

Which is why we can be virtually certain the August 2 memo is not the last memo Rosenstein has written to authorize Mueller’s actions.

Mind you, Mueller probably wouldn’t want to release a memo with several pages of redacted allegations. Which may be why we’re looking at the redacted version of an almost certainly superseded memo.

Updated: Later today Mueller’s team asked to file a copy of an exhibit–which given Judge Berman Jackson’s description of it as released in redacted form, has to be the Rosenstein memo–under seal. Which suggests they’re going to show Manafort what else they’re investigating (which I bet is the Deripaska stuff).

The Mueller Filing

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Robert Mueller’s team has submitted its response to Paul Manafort’s motion to dismiss his indictment based on a claim Mueller isn’t authorized to prosecute crimes like the money laundering he is accused of. As I predicted, this filing lays out some theory of his case — but much of it is redacted, in the form of a memo Rod Rosenstein wrote last August laying out the parameters of the investigation at that time. As the filing makes clear, that memo (and any unmentioned predecessors or successors) form the same function as the public memos Jim Comey gave Patrick Fitzgerald to memorialize any seeming expansions of his authority in the CIA leak case, which the DC Circuit relied on to determine that the Libby prosecution was clearly authorized by Fitzgerald’s mandate.

Nevertheless, midway through the legal description, the filing lays out what I have — Manafort’s Ukrainian entanglements are part of this investigation because 1) he was a key player in the campaign and 2) had long ties to Russian backed politicians and (this is a bit trickier) Russians like Oleg Deripaska.

The Appointment Order itself readily encompasses Manafort’s charged conduct. First, his conduct falls within the scope of paragraph (b)(i) of the Appointment Order, which authorizes investigation of “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump.” The basis for coverage of Manafort’s crimes under that authority is readily apparent. Manafort joined the Trump campaign as convention manager in March 2016 and served as campaign chairman from May 2016 until his resignation in August 2016, after reports surfaced of his financial activities in Ukraine. He thus constituted an “individual associated with the campaign of President Donald Trump.” Appointment Order ¶ (b) and (b)(i). He was, in addition, an individual with long ties to a Russia-backed Ukrainian politician. See Indictment, Doc. 202, ¶¶ 1-6, 9 (noting that between 2006 and 2015, Manafort acted as an unregistered agent of Ukraine, its former President, Victor Yanukovych—who fled to Russia after popular protests—and Yanukovych’s political party). Open-source reporting also has described business arrangements between Manafort and “a Russian oligarch, Oleg Deripaska, a close ally of President Vladimir V. Putin.”

[snip]

The Appointment Order is not a statute, but an instrument for providing public notice of the general nature of a Special Counsel’s investigation and a framework for consultation between the Acting Attorney General and the Special Counsel. Given that Manafort’s receipt of payments from the Ukrainian government has factual links to Russian persons and Russian-associated political actors, and that exploration of those activities furthers a complete and thorough investigation of the Russian government’s efforts to interfere in the 2016 election and any links and/or coordination with the President’s campaign, the conduct charged in the Indictment comes within the Special Counsel’s authority to investigate “any matter that arose or may arise directly from the investigation.”

I’ll do a follow-up on why the Deripaska reference is a bit tricky. It’s tricky in execution, not in fact.

The “Attorneys for the United States of America”

I’ll refer to the author of this memo as Mueller for convenience sake, but because I obsess about how Mueller’s team deploys, it’s worth noting how the memo is signed.

The memo is signed by Andrew Weissman, the lead in the Manafort prosecution and (as the memo notes) a career AUSA in his own right. Greg Andres, who has also been on all the Manafort filings, includes his DC district license, making any continuity there clear. Adam Jed, an appellate specialist who has been deployed to this team in the past, is included. But before all them is Michael Dreeben, the Solicitor General’s killer attorney on appeals.

Aside from Mueller himself, Andres is the only lawyer listed who was not a DOJ employee when Jim Comey got fired, which is relevant given the memo’s argument that these attorneys could have prosecuted this with or without Mueller present.

Notably, Kyle Freeny, who has been on all the other Manafort filings, is not listed.

I’m unsure whether the filing uses the title, “Attorneys for the United States of America” because it underscores the argument of the memo — all their authority derives directly from Rosenstein — or if it signifies someone (probably Dreeben, who maintains his day job at the Solicitor General’s office) isn’t actually a formal member of Mueller’s team. But it is a departure from the norm, which since at least the roll-out of Brian Richardson as a “Assistant Special Counsel” with the Van der Zwaan plea, has used the titles “Senior” and “Assistant Special Counsel” to sign their filings.

Update: Christian Farias notes that this Attorneys for the US is not unique to this filing.

Manafort is especially screwed because Rosenstein is so closely involved

The memo starts by laying out what its presents as the history of the investigation. It includes the following events:

  • Jeff Sessions March 2, 2017 recusal
  • Jim Comey’s March 20, 2017 public confirmation of an investigation into “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 an coordination between the campaign and Russia’s efforts.”
  • Rod Rosenstein’s May 17, 2017 order appointing Mueller Special Counsel “to investigate Russian interference with the 2016 presidential election and related matters”

It then lays out the regulatory framework governing Mueller’s appointment. While this generally maps what Rosenstein included in his appointment order — which cites 28 USC §§ 509, 510, 515, and 600.4 through 600.10 — Mueller also cites to the basis of the Attorney General’s authority, including 28 USC §§ 503, 516, and all of 600. The latter citation is of particular interest, as it notes that the AG (Rosenstein, in this case) ” is not required to invoke the Special Counsel regulations” (which the filing backs by citing some historical examples). The filing then asserts that the Special Counsel regulations serve as ” a helpful framework for the Attorney General to use in establishing the Special Counsel’s role.”

Mueller then describes what the filing implies has been the process by which Mueller has informed Rosenstein of major actions he’s about to take. This consists of “‘providing Urgent Reports’ to Department leadership on ‘major developments.'” By doing it this way, Mueller implies a process without providing a basis to FOIA these Urgent Reports.

Then, the filing lays out how the scope of his authority has evolved. Initially, he notes, that was based on his appointing order. On August 2 — two and a half months after his appointment, almost a week after George Papadopoulos’ arrest, and the day after Andres joined Mueller’s team — Rosenstein wrote a memo describing the scope of Mueller’s investigation and authority.  That memo (which is included in heavily redacted form) authorizes Mueller to investigate,

Allegations that Paul Manafort:

  • Committed a crime or crimes by colluding with Russian government officials with respect to the Russian government’s efforts to interfere with the 2016 election for President of the United States, in violation of United States law;
  • Committed a crime or crimes arising out of payments he received from the Ukrainian government before and during the tenure of President Viktor Yanukovych.

In other words, by August 2 (if not before) Rosenstein had authorized Mueller to prosecute Manafort for the money laundering of his payments from Yanukovych.

Significantly, the filing notes that the August 2 memo told Mueller to come back if anything else arises.

For additional matters that otherwise may have arisen or may arise directly from the Investigation, you should consult my office for a determination of whether such matters should be within the scope of your authority. If you determine that additional jurisdiction is necessary in order to fully investigate and resolve the matters assigned, or to investigate new matters that come to light in the course of your investigation, you should follow the procedures set forth in 28 C.F.R. § 600.4(b).

The filing then lays out Manafort’s DC indictments and his challenge to Mueller’s authority. The summary of that argument looks like this:

Manafort’s motion to dismiss the Indictment should be rejected for four reasons. First, the Acting Attorney General and the Special Counsel have acted fully in accordance with the relevant statutes and regulations. The Acting Attorney General properly established the Special Counsel’s jurisdiction at the outset and clarified its scope as the investigation proceeded. The Acting Attorney General and Special Counsel have engaged in the consultation envisioned by the regulations, and the Special Counsel has ensured that the Acting Attorney General was aware of and approved the Special Counsel’s investigatory and prosecutorial steps. Second, Manafort’s contrary reading of the regulations—implying rigid limits and artificial boundaries on the Acting Attorney General’s actions—misunderstands the purpose, framework, and operation of the regulations. Properly understood, the regulations provide guidance for an intra-Executive Branch determination, within the Department of Justice, of how to allocate investigatory and prosecutorial authority. They provide the foundation for an effective and independent Special Counsel investigation, while ensuring that major actions and jurisdictional issues come to the Acting Attorney General’s attention, thus permitting him to fulfill his supervisory role. Accountability exists for all phases of the Special Counsel’s actions. Third, that understanding of the regulatory scheme demonstrates why the Special Counsel regulations create no judicially enforceable rights. Unlike the former statutory scheme that authorized court-appointed independent counsels, the definition of the Special Counsel’s authority remains within the Executive Branch and is subject to ongoing dialogue based on sensitive prosecutorial considerations. A defendant cannot challenge the internal allocation of prosecutorial authority under Department of Justice regulations. Finally, Manafort’s remedial claims fail for many of the same reasons: the Special Counsel has a valid statutory appointment; this Court’s jurisdiction is secure; no violation of the Federal Rules of Criminal Procedure occurred; and any rule-based violation was harmless. [my emphasis]

The bolded bit is the key part: Mueller is treating Manafort’s challenge as a challenge to Article II authority, making the appointment even more sound than previous Ken Starr-type Independent Counsel appointments were, because they don’t present a constitutional appointments clause problem. Mueller returns to that argument several times later in the filing.

Under the Independent Counsel Act, constitutional concerns mandated limitations on the judiciary’s ability to assign prosecutorial jurisdiction. In the wholly Executive-Branch regime created by the Special Counsel regulations, those constitutional concerns do not exist.

[snip]

[T]he court contrasted [limitations on Independent Counsels] with the Attorney General’s “broader” authority to make referrals to the independent counsel: the Attorney General “is not similarly subject to the ‘demonstrably related’ limitation” because the Attorney General’s power “is not constrained by separation of powers concerns.” Id.; see also United States v. Tucker, 78 F.3d 1313, 1321 (8th Cir.), cert. denied, 519 U.S. 820 (1996). That is because the Attorney General’s referral decision exercises solely executive power and does not threaten to impair Executive Branch functions or impose improper duties on another branch.

[snip]

It is especially notable that Manafort, while relying on principles of political accountability, does not invoke the Appointments Clause as a basis for his challenge, despite the Clause’s “design[] to preserve political accountability relative to important Government assignments.” E

From there, the memo goes into the legal analysis which is unsurprising. The courts, including the DC Circuit in the Libby case, have approved this authority. That’s a point the filing makes explicit by comparing the August 2 memo with the two memos Jim Comey wrote to document the scope of Patrick Fitzgerald’s authority in the CIA leak investigation.

The August 2 Scope Memorandum is precisely the type of material that has previously been considered in evaluating a Special Counsel’s jurisdiction. United States v. Libby, 429 F. Supp. 2d 27 (D.D.C. 2006), involved a statutory and constitutional challenge to the authority of a Special Counsel who was appointed outside the framework of 28 C.F.R. Part 600. In rejecting that challenge, Judge Walton considered similar materials that defined the scope of the Special Counsel’s authority. See id. at 28-29, 31-32, 39 (considering the Acting Attorney General’s letter of appointment and clarification of jurisdiction as “concrete evidence * * * that delineates the Special Counsel’s authority,” and “conclud[ing] that the Special Counsel’s delegated authority is described within the four corners of the December 30, 2003 and February 6, 2004 letters”). The August 2 Scope Memorandum has the same legal significance as the original Appointment Order on the question of scope. Both documents record the Acting Attorney General’s determination on the scope of the Special Counsel’s jurisdiction. Nothing in the regulations restricts the Acting Attorney General’s authority to issue such clarifications.

Having laid out (with the Rosenstein memo) that this investigation operates in equivalent fashion to the Libby prosecution, the case is fairly well made. Effectively Manafort is all the more screwed because the Acting AG has been personally involved and approved each step.

The other authorities cover other prosecutions Mueller has laid out

The filing is perhaps most interesting for the other authorities casually asserted, which are not necessarily directly relevant in this prosecution, but are for others. First, Mueller includes this footnote, making it clear his authority includes obstruction, including witness tampering.

The Special Counsel also has “the authority to investigate and prosecute federal crimes committed in the course of, and with intent to interfere with, the Special Counsel’s investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses” and has the authority “to conduct appeals arising out of the matter being investigated and/or prosecuted.” 28 C.F.R. § 600.4(a). Those authorities are not at issue here.

Those authorities are not at issue here, but they are for the Flynn, Papadopoulos, Gates, and Van der Zwaan prosecutions, and for any obstruction the White House has been engaging in. But because it is relevant for the Gates and Van der Zwaan prosecutions, that mention should preempt any Manafort attempt to discredit their pleas for the way they expose him.

The filing includes a quotation from DOJ’s discussion of special counsels making it clear that it’s normal to investigate crimes that might lead someone to flip.

[I]n deciding when additional jurisdiction is needed, the Special Counsel can draw guidance from the Department’s discussion accompanying the issuance of the Special Counsel regulations. That discussion illustrated the type of “adjustments to jurisdiction” that fall within Section 600.4(b). “For example,” the discussion stated, “a Special Counsel assigned responsibility for an alleged false statement about a government program may request additional jurisdiction to investigate allegations of misconduct with respect to the administration of that program; [or] a Special Counsel may conclude that investigating otherwise unrelated allegations against a central witness in the matter is necessary to obtain cooperation.”

That one is technically relevant here — one thing Mueller is doing with the Manafort prosecution (and successfully did with the Gates one) is to flip witnesses against Trump. But it also makes it clear that Mueller could do so more generally.

I’ll comment more on the memo tomorrow. But for now, understand this is a solid memo that puts the Manafort prosecution squarely on the same footing that the Libby one was.

 

Mueller Prepares to Reveal the First Cards in the Hack-and-Leak Conspiracy

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For weeks, I’ve been having a persistent exchange with people, including editors. They say there’s no evidence of collusion between Trump and Russians. I say it wouldn’t be collusion anyway, but conspiracy. They say there’s no evidence of conspiracy either. Then I point to Rick Gates’ guilty plea on conspiracy to defraud the US. I note that Gates effectively pled guilty to hiding the fact that he and Paul Manafort were working for pro-Russian Ukrainians while pretending to be engaging in politics for independent reasons. My interlocutors always say, in spite of the fact that Mueller has always insisted this went through the election period, that that doesn’t have anything to do with the election.

Yesterday’s news that Rick Gates and Alex Van Der Zwaan believed that Konstantin Kilimnik, the Oleg Deripaska crony with whom they were engaging through the entire period Manafort and Gates were working on the Trump campaign, was a current or former Russian military intelligence agent, should put that canard to rest. As the government sentencing memo in Van Der Zwaan’s plea explains,

That Gates and Person A were directly communicating in September and October 2016 was pertinent to the investigation. Federal Bureau of Investigation Special Agents assisting the Special Counsel’s Office assess that Person A has ties to a Russian intelligence service and had such ties in 2016. During his first interview with the Special Counsel’s Office, van der Zwaan admitted that he knew of that connection, stating that Gates told him Person A was a former Russian Intelligence Officer with the GRU.

Worse still, and less commented on in the coverage of this, at some point, Kilimnik actually worked for Manafort’s company!

Person A worked with Manafort and Gates in connection with their Ukraine lobbying work. Person A is a foreign national and was a close business colleague of Manafort and Gates. He worked in Ukraine at Manafort’s company Davis Manafort International, LLC (DMI).

So Manafort either still was or had employed a person that the FBI believes still works for the intelligence agency behind the hack-and-leak of Hillary Clinton’s emails (the same agency, as I keep pointing out, that Sergei Skripal shared secrets about with the Brits), and that’s one of the things Manafort and Gates were hiding all the way through their election work by not disclosing who they were really working for on the Ukrainian lobbying.

That seems like pretty significant evidence in the hack-and-leak conspiracy.

Still, commentators seem to miss some of what is going on with this disclosure, made to ensure that Van Der Zwaan gets prison time for actions that (as I’ll return to, probably next week) make Van Der Zwaan look far sketchier than even his plea does.

Mueller’s team (effectively, the same prosecutors who are prosecuting Manafort, with one junior prosecutor added) filed this sentencing memo on March 27. Last week, the same folks filed a request for extra time to respond to Manafort’s various challenges to his prosecution so far: a challenge to Mueller’s jurisdiction in this matter (arguing it’s outside the scope of what Rod Rosenstein appointed Mueller to do), as well as two challenges to the way he was charged. In their motion (which Manafort did not oppose), they asked for an extension from March 28 — yesterday — to April 2 for their response to Manafort’s challenge to Mueller’s authority, and two more days for the challenge to how he was charged. Significantly, they asked for the extension because 1) they were busy with other matters preparing this case for trial and 2) they needed to sit down with Deputy Attorney General Rod Rosenstein to work out how they were going to respond to the challenge to Mueller’s authority.

Under that schedule, the government’s response to [the challenge to Mueller’s authority] would be due on April 2 and the government’s response to [the challenge to how he was charged] would be due on April 4, 2018. The additional time is needed because the government is preparing its responses while conducting other matters to prepare this case for trial and because one of the responses—involving the challenge to the Special Counsel’s authority to conduct this prosecution—requires the Special Counsel to coordinate closely with other interested components of the Department of Justice, including the Office of the Deputy Attorney General, who is the Acting Attorney General for this case.

Understand, while these are totally valid challenges in their own right, the special counsel challenge, especially, is unlikely to succeed, not least because of the strong precedent in the Scooter Libby case, so long as Mueller shows how Rosenstein approved his actions and agreed they were related to the hack-and-leak case. That said — and the real reason Manafort’s team challenged Mueller’s authority — by laying out how Manafort’s efforts to hide who he’s actually working for and the overwhelming debt that led Manafort to trade influence with Trump to obtain loans to stave off bankruptcy relate to the hack-and-leak and therefore legitimately arose out of that investigation, Mueller will have to disclose a significant part of his theory of the case.

Effectively, Manafort is doing this in significant part to understood how much Mueller understands about the conspiracy as it pertains to the hack-and-leak.

Manafort made a similar (and equally justifiable) demand yesterday for unredacted versions of the search warrants against him, again, to understand more about the investigation and case against him.

Manafort is likely doing this for two reasons. First, to weigh whether he wants to flip on Trump, while he still can. And relatedly, to reveal to Trump where Mueller is going, and how much it implicates things Trump and his family members have done. This is Manafort’s bid to change the momentum in this case, which is now all working against him. 

It has been clear for some time that Mueller has been trying to line up as many cooperating witnesses as he can and obtain evidence in the case in chief without revealing to Trump details that will make Trump do something rash, like firing Mueller and/or pardoning Manafort and all his spawn. Manafort has, unsurprisingly, employed various tactics to undermine Mueller’s ability to implement his timing strategy unchallenged. This one is a legitimate tactic bolstered by his trial schedule.

So faced with the deadline to lay out how the Ukrainian lobbying relates to Manafort’s involvement in the hack-and-leak, Mueller asked for a slight delay. One thing he did in that slight delay was reveal that he knows that Rick Gates knows that Konstanin Kilimnik — who was working with Gates to try to delay the disclosure of how Gates and Manafort had screwed over Ukraine before the election, and was trying to help Manafort spin his prosecution as recently as November — is or was part of the same intelligence agency behind the hack-and-leak conspiracy.

Surely Mueller’s team knew they were going reveal this detail in the sentencing memo, and the certainty that Mueller would provide such details may be why Manafort agreed to the delay.

Mueller just revealed that at the same time GRU was implementing a hack-and-leak campaign designed to hurt or defeat Ukrainian hawk Hillary Clinton, a current or former GRU official was also conspiring to prevent or delay (until after the election) full disclosure of how GRU and Russia conspired with Trump’s campaign manager and his deputy to tamper in Ukrainian affairs.

At the same time GRU was tampering in our election, GRU was conspiring with Trump’s campaign manager to hide how they had conspired to tamper in Ukrainian democracy as well.  

The other thing Mueller did with the delay is win one more day before the grand jury.

I’m vacationing in an undisclosed location right now, writing this while the spouse sleeps so he doesn’t accuse me of failing vacation, hoping to hell none of this breaks while I’m still supposed to be relaxing. But it seems like a whole lot is going to start breaking on Monday.

Oleg Deripaska Gets Ahead of His Own Fusion Dossier (and Manafort Prosecution?) Disclosures

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Sometime Paul Manafort client and owner Oleg Deripaska just did a column in the Daily Caller insinuating the Mueller investigation is a Deep State attack on good aluminum smelters like him — though the column seems as much an effort to get ahead of disclosures about his own tie to the Steele dossier or Manafort trial as anything else. 

Chuck Grassley throws breadcrumbs about others tied to the Steele dossier, including Oleg Deripaska

For weeks, I’ve been waiting to learn why Chuck Grassley asked Democrats about the role of a number of people in the Fusion dossier, including Victoria Nuland, former SSCI staffer Dan Jones, and Oleg Deripaska.

Look, now, at this detail from the letters Chuck Grassley sent out to the DNC, its top officials, and the Hillary campaign, and its top officials, trying to find out how much they knew about and used the dossier. Grassley also asks for any communications to, from, or relating to the following (I’ve rearranged and classified them).

Fusion and its formal employees: Fusion GPS; Bean LLC; Glenn Simpson; Mary Jacoby; Peter Fritsch; Tom Catan; Jason Felch; Neil King; David Michaels; Taylor Sears; Patrick Corcoran; Laura Sego; Jay Bagwell; Erica Castro; Nellie Ohr;

Fusion researcher who worked on both the Prevezon and Democratic projects:Edward Baumgartner;

Anti-Magnitsky lobbyists: Rinat Akhmetshin; Ed Lieberman;

Christopher Steele’s business and colleagues: Orbis Business Intelligence Limited; Orbis Business International Limited.; Walsingham Training Limited; Walsingham Partners Limited; Christopher Steele; Christopher Burrows; Sir Andrew Wood,

Hillary-related intelligence and policy types: Cody Shearer; Sidney Blumenthal; Jon Winer; Kathleen Kavalec; Victoria Nuland; Daniel Jones;

DOJ and FBI: Bruce Ohr; Peter Strzok; Andrew McCabe; James Baker; Sally Yates; Loretta Lynch;

Grassley, like me, doesn’t believe Brennan was out of the loop either: John Brennan

Oleg Deripaska and his lawyer: Oleg Deripaska; Paul Hauser;

It’s the last reference I’m particularly interested in.

When Simpson talked about how the dossier got leaked to BuzzFeed, he complains that, “I was very upset. I thought it was a very dangerous thing and that someone had violated my confidences, in any event.” The presumed story is that John McCain and his aide David Kramer were briefed by Andrew Wood at an event that Rinat Akhmetshin also attended, later obtained the memo (I’m still not convinced this was the full memo yet), McCain shared it, again, with the FBI, and Kramer leaked it to Buzzfeed.

But Grassley seems to think Russian oligarch Oleg Deripaska was in on the loop of this. Deripaska is important to this story not just for because he owns Paul Manafort (he figures heavily in this worthwhile profile of Manafort). But also because he’s got ties, through Rick Davis, to John McCain. This was just rehashed last year by Circa, which has been running interference on this story.

There is a report that Manafort laid out precisely the strategy focusing on the dossier that is still the main focus of GOP pushback on the charges against Trump and his campaign (and Manafort).

It was about a week before Trump’s inauguration, and Manafort wanted to brief Trump’s team on alleged inaccuracies in a recently released dossier of memos written by a former British spy for Trump’s opponents that alleged compromising ties among Russia, Trump and Trump’s associates, including Manafort.

“On the day that the dossier came out in the press, Paul called Reince, as a responsible ally of the president would do, and said this story about me is garbage, and a bunch of the other stuff in there seems implausible,” said a personclose to Manafort.

[snip]

According to a GOP operative familiar with Manafort’s conversation with Priebus, Manafort suggested the errors in the dossier discredited it, as well as the FBI investigation, since the bureau had reached a tentative (but later aborted) agreement to pay the former British spy to continue his research and had briefed both Trump and then-President Barack Obama on the dossier.

Manafort told Priebus that the dossier was tainted by inaccuracies and by the motivations of the people who initiated it, whom he alleged were Democratic activists and donors working in cahoots with Ukrainian government officials, according to the operative.

If Deripaska learned of the dossier — and obtained a copy from McCain or someone close to him — it would make it very easy to lay out the strategy we’re currently seeing.

Victoria Nuland gets ahead of the narrative by explaining her own role in the dossier

Shortly after I asked that question, Nuland (in about the first move that Democrats made to get ahead of the dossier) explained her own role. She had received reports he had done for other people, but when she heard of the Trump dossier, she (wary of Hatch Act violations) said the FBI should take the lead.

Glasser: And so, around this period is also when the famous dossier is starting to circulate. And it’s been reported that you were familiar already—and others were—with the work of Christopher Steele, that he had been a helpful source of information, of analysis and insight over the previous few years. Did you know him personally, or just his work?

Nuland: I did not know him personally. He had—’13, ’14, ’15, he had a number of corporate clients who were interested in who was in the decision-making loop on Ukraine issues in the Kremlin, who was in the—who the back channels were between Ukraine and Russia, and he was generous enough, as many people were in that period, to share their findings and their work with us, and all of us who were trying to understand it as a policy matter were taking all kinds of information. We never—

Glasser: But you weren’t personally debriefing?

Nuland: No, we never worked with him directly. We never tasked him. We never had an official association. His information on Russia and Ukraine was one of hundreds of sources that we were using at the time.

Glasser: When did you first hear about his dossier?

Nuland: I first heard—and I didn’t know who his client was until much later, until 2017, I think, when it came out. I first heard that he had done work for a client asserting these linkages—I think it was late July, something like that.

Glasser: That’s very interesting. And you would have taken him seriously just because you knew that he knew what he was talking about on Russia.

Nuland: What I did was say that this is about U.S. politics, and not the work of—not the business of the State Department, and certainly not the business of a career employee who is subject to the Hatch Act, which requires that you stay out of politics. So, my advice to those who were interfacing with him was that he should get this information to the FBI, and that they could evaluate whether they thought it was credible.

Jones and Deripaska’s roles remain unexplained, even in spite of Jane Mayer’s reporting on the latter

We still hadn’t heard about Jones or Deripaska’s role; Jane Mayer didn’t even clarify the latter in her 15,000 word Steele profile.

Orbis promises confidentiality, and releases no information on its clientele. Some of its purported clients, such as a major Western oil company, are conventional corporations. Others are controversial, including a London law firm representing the interests of Oleg Deripaska, the billionaire victor of Russia’s aluminum wars, a notoriously violent battle. He has been described as Putin’s favorite oligarch. Steele’s possible financial ties to Deripaska recently prompted Senator Grassley to demand more information from the London law firm. If a financial trail between Deripaska and Orbis can be established, it is likely to raise even more questions about Steele, because Deripaska has already figured in the Russia investigation, in an unsavory light. Paul Manafort, Trump’s former campaign manager, has been accused of defrauding Deripaska’s company while working for it in Ukraine. (Manafort has been indicted by Special Counsel Robert Mueller on charges of money laundering and other financial crimes. He has pleaded not guilty.) Even if Steele’s rumored work for Deripaska is aboveboard, it illustrates the transition that he has made from the world of government service to the ethically gray world of commerce. Oligarchs battling other oligarchs provide some of the most lucrative work for investigators with expertise in Russia. Orbis maintains that, as long as its activities are limited to providing litigation support for Western law firms acting in Western courts, it is helping to settle disputes in a more civilized way than they would be in Russia.

Oleg Deripaska’s bid to get ahead of Deripaska disclosures

Which brings us to Deripaska’s column in the (!?!?!) Daily Caller. Deripaska describes himself — in a column released even as Trump rolls out aluminum sanctions and just weeks after he stepped down as President — as “the founder of UC Rusal, the world’s leading producer of aluminum using clean, renewable hydropower.” The column drops a load of American cultural and historical references: Wag the Dog, Teddy Roosevelt, “World War II hero and former U.S. Sen. Daniel Inouye,” and George Soros.

The most remarkable passage, seemingly an attempt to leak where Grassley and Nunes might otherwise go, is this attack on Dan Jones and Nuland.

Yet on March 16, 2017, Daniel Jones — himself a team member of Fusion GPS, self-described former FBI agent and, as we now know from the media, an ex-Feinstein staffer — met with my lawyer, Adam Waldman, and described Fusion as a “shadow media organization helping the government,” funded by a “group of Silicon Valley billionaires and George Soros.” My lawyer testified these facts to the Senate Intelligence Committee on Nov. 3. Mr. Soros is, not coincidentally, also the funder of two “ethics watchdog” NGOs (Democracy 21 and CREW) attacking Rep. Nunes’ committee memo.

A former Obama State Department official, Nuland, has been recently outed as another shadow player, reviewing and disseminating Fusion’s dossier, and reportedly, hundreds of other dossiers over a period of years. “Deep State-proud loyalists” apparently was a Freudian slip, not a joke.

Deripaska names Jones as a “self-described former FBI agent,” as if FBI agents here are as thuggish and secretive as FSB agents in Russia. He suggests “we now know from the media” that Jones is “an ex-Feinstein staffer,” as if we don’t know in large part because of the Republican fight against the Torture report in (this is important!) the Senate Intelligence Committee. Then, after explaining on what authority he is sharing all this information — “My lawyer testified these facts to the Senate Intelligence Committee on Nov. 3,” — Deripaska claims third hand that Jones told his lawyer that Fusion is a “shadow media organization helping the government,” funded by a “group of Silicon Valley billionaires and George Soros.”

Among other things then, this is a very crafty attempt to get information submitted to the close-lipped SSCI, but probably not to SJC or HPSCI where everything leaks, into the public.

So Deripaska, presumably using one hell of a ghost writer, manages to spin a Paul Singer funded effort as a Soros cabal.

As noted above, there’s good reason to believe that Deripaska is the mastermind of the entire strategy of discrediting the dossier as a way to discredit the Mueller investigation. The last time he tried to discredit the investigation directly, prosecutors dinged Paul Manafort for violating the gag rule in the DC case; any bets they have the red line of this effort? Yet the name Manafort doesn’t appear here, so perhaps (especially as Manafort is officially on the clock in EDVA after his arraignment today as well as DC) Deripaska’s just getting around the gag.

As you read this work of art (really!), keep the following in mind: for all that Deripaska puts the focus on Jones and Nuland, he never gets around to explaining why Chuck Grassley thinks he had a role in the dissemination of the dossier, too. Or why he demanded immunity to testify to SSCI. At that level this may be an attempt to get ahead of disclosures about his role in the dossier.

Then, on February 14, Alex Van der Zwaan pled guilty to lying about communications with Deripaska’s flunkie Konstantin Kilimnik, making it clear (if it wasn’t already) that Kilimnik and through him Deripaska are a key focus of Mueller’s investigation.

February 14: Alex Van der Zwaan got caught and pled guilty to lying about communications he had with Rick Gates, Konstantin Kilimnik, and Greg Craig in September 2016. On top of whatever he had to say to prosecutors between his second interview on December 1 and his plea on February 14, both Craig and Skadden Arps have surely provided a great deal of cooperation before and since September 2016.

In addition, some currently sealed transcripts will soon be unsealed in the DC case that may name Kilimnik or Deripaska in more detail.

Oleg Deripaska was the key figure behind the larger conspiracy to defraud the US that Paul Manafort currently serves as the figurehead for. That will become increasingly clear in upcoming days (even assuming jailed sex worker Nastya Rybka’s claims to have recordings on election interference and Deripaska’s role in it never get substantiated), whether through additional Mueller indictments, Steele related disclosures, or reporting that finally explains the latter.

2018 Senate Intelligence Global Threat Hearing Takeaways

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Today was the annual Senate Intelligence Committee Global Threat Hearing, traditionally the hearing where Ron Wyden gets an Agency head to lie on the record.

That didn’t happen this time.

Instead, Wyden gave FBI Director Christopher Wray the opportunity to lay out the warnings the FBI had given the White House about Rob Porter’s spousal abuse problems, which should have led to Porter’s termination or at least loss of access to classified information.

The FBI submitted a partial report on the investigation in question in March. And then a completed background investigation in late July. That, soon thereafter, we received request for follow-up inquiry. And we did that follow-up and provided that information in November. Then we administratively closed the file in January. And then earlier this month we received some additional information and we passed that on as well.

That, of course, is the big takeaway the press got from the hearing.

A follow-up from Martin Heinrich shortly after Wyden’s question suggested he had reason to know of similar “areas of concern” involving Jared Kushner (which, considering the President’s son-in-law is under investigation in the Russian investigation, is not that surprising). Wray deferred that answer to closed session, so the committee will presumably learn some details of Kushner’s clearance woes by the end of the day.

Wray twice described the increasing reliance on “non-traditional collectors” in spying against the US, the second time in response to a Marco Rubio question about the role of Chinese graduate students in universities. Rubio thought the risk was from the Confucius centers that China uses to spin Chinese culture in universities. But not only did Wray say universities are showing less enthusiasm for Confucius centers of late, but made it clear he was talking about “professors, scientists, and students.” This is one of the reasons I keep pointing to the disproportionate impact of Section 702 on Chinese-Americans, because of this focus on academics from the FBI.

Susan Collins asked Mike Pompeo about the reports in The Intercept and NYT on CIA’s attempts to buy back Shadow Brokers tools. Pompeo claimed that James Risen and Matt Rosenberg were “swindled” when they got proffered the story, but along the way confirmed that the CIA was trying to buy stuff that “might have been stolen from the US government,” but that “it was unrelated to this idea of kompromat that appears in each of those two articles.” That’s actually a confirmation of the stories, not a refutation of them.

There was a fascinating exchange between Pompeo and Angus King, after the latter complained that, “until we have some deterrent capacity we are going to continue to be attacked” and then said right now there are now repercussions for Russia’s attack on the US.

Pompeo: I can’t say much in this setting I would argue that your statement that we have done nothing does not reflect the responses that, frankly, some of us at this table have engaged in or that this government has been engaged in both before and after, excuse me, both during and before this Administration.

King: But deterrence doesn’t work unless the other side knows it. The Doomsday Machine in Dr. Strangelove didn’t work because the Russians hadn’t told us about it.

Pompeo: It’s true. It’s important that the adversary know. It is not a requirement that the whole world know it.

King: And the adversary does know it, in your view?

Pompeo: I’d prefer to save that for another forum.

Pompeo later interjected himself into a Kamala Harris discussion about the Trump Administration’s refusal to impose sanctions by suggesting that the issue is Russia’s response to cumulative responses. He definitely went to some effort to spin the Administration’s response to Russia as more credible than it looks.

Tom Cotton made two comments about the dossier that Director Wray deferred answering to closed session.

First, he asked about Christopher Steele’s ties to Oleg Deripaska, something I first raised here and laid out in more detail in this Chuck Grassley letter to Deripaska’s British lawyer Paul Hauser. When Cotton asked if Steele worked for Deripaska, Wray said, “that’s not something I can answer.” When asked if they could discuss it in a classified setting, Wray said, “there might be more we could say there.”

Cotton then asked if the FBI position on the Steele dossier remains that it is “salacious and unverified” as he (misleadingly) quoted Comey as saying last year. Wray responded, “I think there’s maybe more we can talk about this afternoon on that.” It’s an interesting answer given that, in Chuck Grassley’s January 4 referral, he describes a “lack of corroboration for [Steele’s dossier] claims, at least at the time they were included in the FISA applications,” suggesting that Grassley might know of corroboration since. Yet in an interview by the even better informed Mark Warner published 25 days later, Warner mused that “so little of that dossier has either been fully proven or conversely, disproven.” Yesterday, FP reported that BuzzFeed had hired a former FBI cybersecurity official Anthony Ferrante to try to chase down the dossier in support of the Webzilla and Alfa bank suits against the outlet, so it’s possible that focused attention (and subpoena power tied to the lawsuit) may have netted some confirmation.

Finally, Richard Burr ended the hearing by describing what the committee was doing with regards to the Russian investigation. He (and Warner) described an effort to bring out an overview on ways to make elections more secure. But Burr also explained that SSCI will release a review of the ICA report on the 2016 hacks.

In addition to that, our review of the ICA, the Intel Committee Assessment, which was done in the F–December of 06, 16–we have reviewed in great detail, and we hope to report on what we found to support the findings where it’s appropriate, to be critical if in fact we found areas where we found came up short. We intend to make that public. Overview to begin with, none of this would be without a declassification process but we will have a public version as quickly as we can.

Finally, in the last dregs of the hearing, Burr suggested they would report on who colluded during the election.

We will continue to work towards conclusions  on any cooperation or collusion by any individual, campaign, or company with efforts to influence elections or create societal chaos in the United States.

My impression during the hearing was that this might refer to Cambridge Analytica, which tried to help Wikileaks organize hacked emails — and it might well refer to that. But I wonder if there’s not another company he has in mind.

On Disinformation and the Dossier

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By all accounts, the House will vote to release the Nunes memo tonight, even while Adam Schiff pushes to release his countering memo at the same time. Perhaps in advance of that, Andrew McCabe either chose to or was told to take leave today until such time as his pension kicks in in mid-March, ending his FBI career.

Since we’re going to be obsessing about the dossier for the next while again, I want to return to a question I’ve repeatedly raised: the possibility that some or even much of the Christopher Steele dossier could be the product of Russian disinformation. Certainly, at least by the time Fusion and Steele were pitching the dossier to the press in September 2016, the Russians might have gotten wind of the project and started to feed Steele’s sources disinformation. But there’s at least some reason to believe it could have happened much sooner.

Former CIA officer Daniel Hoffman argues the near misses are a mark of Russian disinformation

A number of spooks had advanced this idea in brief comments in the past. Today, former CIA officer Daniel Hoffman makes the arguement at more length at WSJ.

There is a third possibility, namely that the dossier was part of a Russian espionage disinformation plot targeting both parties and America’s political process. This is what seems most likely to me, having spent much of my 30-year government career, including with the CIA, observing Soviet and then Russian intelligence operations. If there is one thing I have learned, it’s that Vladimir Putin continues in the Soviet tradition of using disinformation and espionage as foreign-policy tools.

Hoffman points to what I consider the dossier’s abundance of near-misses (such as events involving the correct person in the wrong place or time) on correct information to back his case.

The pattern of such Russian operations is to sprinkle false information, designed to degrade the enemy’s social and political infrastructure, among true statements that enhance the veracity of the overall report. In 2009 the FSB wanted to soil the reputation of a U.S. diplomat responsible for reporting on human rights. So it fabricated a video, in part using real surveillance footage of the diplomat, that purported to show him with a prostitute in Moscow.

Similarly, some of the information in the Steele dossier is true. Carter Page, a Trump campaign adviser, did travel to Moscow in the summer of 2016. But he insists that the secret meetings the dossier alleges never happened. This is exactly what you’d expect if the Kremlin followed its usual playbook: accurate basic facts provided as bait to convince Americans that the fake info is real.

John Sipher, in our joint interview with Jeremy Scahill admitted such a thing was possible, though that the dossier still tied the hack to “collusion.”

The Russians are the best in the world at this disinformation and deception. I don’t think, based on what we saw in the June, the first of his reports, that the Russians would have controlled all of those sources and controlled that whole narrative. It just doesn’t seem to make sense to me. And if in fact they did control the information that was given to Mr. Steele at that time, you have to wonder what was the point. If they were trying to send a message that they had compromising information on Mr. Trump, that might be that they wanted Mr. Trump to know what they had so he would act accordingly. In terms of using kompromat you don’t have to go to the person and make the quid pro quo, you just have to let them know that you have the information and they’ll do the right thing. So, I do agree, as time went by, and as she mentioned, for example, that what GPS Fusion information had in the connections they had there’s, it’s certainly possible that the Russians could have come across some of these sources and provided disinformation especially as time went by. I don’t think that that’s out of the realm of possibility.

Nevertheless Sipher argued in response to Hoffman that the content of the dossier would rule against it being disinformation.

[Hoffman] did not address the content. If was disinformation, it was designed to hurt Trump.

The content of the dossier would have led Democrats to be complacent about the hacking

But I can think of several ways the information in the dossier, if it was disinformation, would help Trump. I have already noted how, if Democrats had used the intelligence provided by Steele in the very earliest reports in the dossier to gauge the risk posed by the hack, they would have been lulled into complacency, because Steele’s first reports clearly said any kompromat the Russians wanted to dump was old intercepts from Hillary’s trips to Russia, and even Steele’s first report after the WikiLeaks dump would not only not confirm Russia was behind the release, but would also contradict a year of public reporting on APT29 to claim that Russia had not had success breaching targets like the State Department and Hillary.

On June 20, Perkins Coie would have learned from a Steele report that the dirt Russia had on Hillary consisted of “bugged conversations she had on various visits to Russia and intercepted phone calls rather than any embarrassing conduct.” It would also have learned that “the dossier however had not yet been made available abroad, including to TRUMP or his campaign team.”

On July 19, Perkins Coie would have learned from a Steele report that at a meeting with a Kremlin official named Diyevkin which Carter Page insists didn’t take place, Diyevkin “rais[ed] a dossier of ‘kompromat’ the Kremlin possessed on TRUMP’s Democratic presidential rival, Hillary CLINTON, and its possible release to the Republican’s campaign team.” At that point in time, the reference to kompromat would still be to intercepted messages, not email.

On July 22, Wikileaks released the first trove of DNC emails.

On July 26 — days after Russian-supplied emails were being released to the press — Perkins Coie would receive a Steele report (based on June reporting) that claimed FSB had the lead on hacking in Russia. And the report would claim — counter to a great deal of publicly known evidence — that “there had been only limited success in penetrating the ‘first tier’ foreign targets.” That is, even after the Russian hacked emails got released to the public, Steele would still be providing information to the Democrats suggesting there was no risk of emails getting released because Russians just weren’t that good at hacking.

In fact, in his testimony to the House Intelligence Committee, in one of the few instances in either congressional appearance where he admitted that Steele was hired at almost precisely the same moment the Democrats were trying to get the FBI to make a public statement attributing the hack to Russia, Glenn Simpson explained that the Democrats did use Steele’s intelligence to “manage” the aftermath of the hack.

MR. SIMPSON: Well, this was a very unusual situation, because right around the time that the work started, it became public that the FBI suspected the Russians of hacking the DNC. And so there was sort of an extraordinary coincidence. It wasn’t really a coincidence but, you know, our own interest in Russia coincided with a lot of public disclosures that there was something going on with Russia.

And so what was originally envisioned as an original — as just a sort of a survey, a first cut of what might be — whether there might be something interesting about Donald Trump and Russia quickly became more of an effort to help my client manage a, you know, exceptional situation and understand what the heck was going on.

I also think it’s creepy that Guccifer 2.0 promised what he called a dossier on Hillary on the same day Steele delivered his first report, June 20, and delivered documents he claimed to be that dossier the next day.

There are multiple ways the Russians may have learned of the Steele dossier

Hoffman lays out a number of the reasons I believe Steele’s production process might have been uniquely susceptible to discovery.

There are three reasons the Kremlin would have detected Mr. Steele’s information gathering and seen an opportunity to intervene. First, Mr. Steele did not travel to Russia to acquire his information and instead relied on intermediaries. That is a weak link, since Russia’s internal police service, the FSB, devotes significant technical and human resources to blanket surveillance of Western private citizens and government officials, with a particular focus on uncovering their Russian contacts.

Second, Mr. Steele was an especially likely target for such surveillance given that he had retired from MI-6, the British spy agency, after serving in Moscow. Russians are fond of saying that there is no such thing as a “former” intelligence officer. The FSB would have had its eye on him.

Third, the Kremlin successfully hacked into the Democratic National Committee. Emails there could have tipped it off that the Clinton campaign was collecting information on Mr. Trump’s dealings in Russia.

I’d flesh out another, one the Republicans have been dancing close to for the last year. Because Fusion GPS did business with both the Democrats and, via Baker Hostetler, anti-Magnitsky lobbyists Natalia Veselnitskaya and Rinat Akhmetshin at the same time, it created a second source via which the Russians might learn that Hillary had a dossier. In addition to Simpson himself,  Fusion researcher Edward Baumgartner also worked with both Baker Hostetler and the Democrats at the same time. Simpson tried to minimize the overlap and the possibility for revealing the dossier, especially in his Senate testimony.

Q. We had talked about work for multiple clients. What steps were taken, if any, to make sure that the work that Mr. Baumgartner was doing for Prevezon was not shared across to the clients you were working for with regard to the presidential election?

A. He didn’t deal with them. He didn’t deal with the clients.

But the publicly released financial data shows a clear overlap in those projects and Baumgartner’s comments to BI show he worked quite closely with Veselnitskaya.

Baumgartner, a fluent Russian speaker, said he was hired by Fusion to serve as “an interface” with Veselnitskaya, who does not speak much English. They worked “very closely” together in Washington and Moscow, Baumgartner said, reviewing documents and finding witnesses who could bolster Prevezon’s case.

Simpson attended a dinner in DC on June 10, attended by both Veselnitskaya and Akhmetshin, in the aftermath of the Trump Tower meeting at which (per Simpson) “we had drinks before;” Baumgartner’s vague memory suggests he did too. When asked if Baumgartner knew Akhmetshin, which is virtually certain, Simpson said, “I don’t know.” So there were at least opportunities where people working on both campaigns might have disclosed details about the project for the Democrats (though both Simpson and Baumgartner said Baumgartner didn’t know about the Steele part of the project).

One other detail makes it more likely that Russians succeeded in planting at least some disinformation: both Luke Harding (who worked closely with Steele on his book) and Simpson describe Steele’s sources drying up as the focus on Trump’s ties to Russia grew. Simpson’s statement on this grossly understates (as he often does) how much focus there already publicly was on the Russian hack by the time he hired Steele.

So, you know, when Chris started asking around in Moscow about this the information was sitting there. It wasn’t a giant secret. People were talking about it freely. It was only, you know, later that it became a subject of great controversy and people clammed up, and at that time the whole issue of the hacking was also, you know, not really focused on Russia. So these things eventually converged into, you know, a major issue, but at the time it wasn’t one.

So if Steele’s regular sources were drying up, it makes it far more likely any new ones would be easy to compromised.

Russians seem to have planned to use the dossier to discredit the investigation — just as they are using it

Finally, I want to turn to another reason why I think parts of this may be disinformation. At least two of the reports — the Alfa Bank report (which was pretty clearly a feedback loop on another dodgy story) and the depiction of what should have been the Internet Research Association but was instead targeted at Webzilla, seem custom made to prepare the kind of lawfare that has discredited the dossier. Indeed, Alfa Bank and Webzilla’s owners both sued, suggesting they feel like they can survive discovery.

Look, now, at this detail from the letters Chuck Grassley sent out to the DNC, its top officials, and the Hillary campaign, and its top officials, trying to find out how much they knew about and used the dossier. Grassley also asks for any communications to, from, or relating to the following (I’ve rearranged and classified them).

Fusion and its formal employees: Fusion GPS; Bean LLC; Glenn Simpson; Mary Jacoby; Peter Fritsch; Tom Catan; Jason Felch; Neil King; David Michaels; Taylor Sears; Patrick Corcoran; Laura Sego; Jay Bagwell; Erica Castro; Nellie Ohr;

Fusion researcher who worked on both the Prevezon and Democratic projects: Edward Baumgartner;

Anti-Magnitsky lobbyists: Rinat Akhmetshin; Ed Lieberman;

Christopher Steele’s business and colleagues: Orbis Business Intelligence Limited; Orbis Business International Limited.; Walsingham Training Limited; Walsingham Partners Limited; Christopher Steele; Christopher Burrows; Sir Andrew Wood,

Hillary-related intelligence and policy types: Cody Shearer; Sidney Blumenthal; Jon Winer; Kathleen Kavalec; Victoria Nuland; Daniel Jones;

DOJ and FBI: Bruce Ohr; Peter Strzok; Andrew McCabe; James Baker; Sally Yates; Loretta Lynch;

Grassley, like me, doesn’t believe Brennan was out of the loop either: John Brennan

Oleg Deripaska and his lawyer: Oleg Deripaska; Paul Hauser;

It’s the last reference I’m particularly interested in.

When Simpson talked about how the dossier got leaked to BuzzFeed, he complains that, “I was very upset. I thought it was a very dangerous thing and that someone had violated my confidences, in any event.” The presumed story is that John McCain and his aide David Kramer were briefed by Andrew Wood at an event that Rinat Akhmetshin also attended, later obtained the memo (I’m still not convinced this was the full memo yet), McCain shared it, again, with the FBI, and Kramer leaked it to Buzzfeed.

But Grassley seems to think Russian oligarch Oleg Deripaska was in on the loop of this. Deripaska is important to this story not just for because he owns Paul Manafort (he figures heavily in this worthwhile profile of Manafort). But also because he’s got ties, through Rick Davis, to John McCain. This was just rehashed last year by Circa, which has been running interference on this story.

There is a report that Manafort laid out precisely the strategy focusing on the dossier that is still the main focus of GOP pushback on the charges against Trump and his campaign (and Manafort).

It was about a week before Trump’s inauguration, and Manafort wanted to brief Trump’s team on alleged inaccuracies in a recently released dossier of memos written by a former British spy for Trump’s opponents that alleged compromising ties among Russia, Trump and Trump’s associates, including Manafort.

“On the day that the dossier came out in the press, Paul called Reince, as a responsible ally of the president would do, and said this story about me is garbage, and a bunch of the other stuff in there seems implausible,” said a personclose to Manafort.

[snip]

According to a GOP operative familiar with Manafort’s conversation with Priebus, Manafort suggested the errors in the dossier discredited it, as well as the FBI investigation, since the bureau had reached a tentative (but later aborted) agreement to pay the former British spy to continue his research and had briefed both Trump and then-President Barack Obama on the dossier.

Manafort told Priebus that the dossier was tainted by inaccuracies and by the motivations of the people who initiated it, whom he alleged were Democratic activists and donors working in cahoots with Ukrainian government officials, according to the operative.

If Deripaska learned of the dossier — and obtained a copy from McCain or someone close to him — it would make it very easy to lay out the strategy we’re currently seeing.

Update: Welp, here’s why Grassley wants to know who among the Democrats spoke with Cody Shearer.

The FBI inquiry into alleged Russian collusion in the 2016 US presidential election has been given a second memo that independently set out many of the same allegations made in a dossier by Christopher Steele, the British former spy.

The second memo was written by Cody Shearer, a controversial political activist and former journalist who was close to the Clinton White House in the 1990s.

[snip]

The Shearer memo was provided to the FBI in October 2016.

It was handed to them by Steele – who had been given it by an American contact – after the FBI requested the former MI6 agent provide any documents or evidence that could be useful in its investigation, according to multiple sources.

The Guardian was told Steele warned the FBI he could not vouch for the veracity of the Shearer memo, but that he was providing a copy because it corresponded with what he had separately heard from his own independent sources.

Among other things, both documents allege Donald Trump was compromised during a 2013 trip to Moscow that involved lewd acts in a five-star hotel.

Paul Manafort Has Conducted His Oleg Deripaska Dalliance on PRISM Provider Google’s Servers

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The government just docketed this declaration pertaining to its accusation that Paul Manafort contributed to an op-ed defending his actions in violation of the judge’s prohibition on trying his case in public.

The substance of the declaration (and another copy of the op-ed showing track changes) is interesting enough. But I’m most interested in this:

While Manafort is using a company email (DMP International, LLC), his interlocutor, Konstantin Kilimnik, the guy through whom Manafort was offering to provide private briefings on the Trump campaign to Russian oligarch (and former Manafort client to whom he still owed millions) Oleg Deripaska, is using GMail.

Particularly once the government developed counterintelligence concerns about Paul Manafort (but probably his ties to powerful Russians are sufficient in any case), Kilimnik is easily targetable under Section 702. While I’m sure they’ve got Deripaska wired up in a slew of other ways, NSA can collect this email just by asking Google nicely. And once it opened a full investigation into Manafort, the FBI has been able to get whatever NSA gets in raw form.

That means, among other things, that Kilimnik (and, I assume, Deripaska) want this to be discovered. Perhaps that’s arrogance, a belief that somehow Manafort will remain untouchable by Mueller for the more substantive coordination between him and Russia. Or perhaps Deripaska is just happy to let Manafort be exposed for what he is.

Whatever it is, when obvious Russian targets use PRISM providers, they’re just inviting easy scrutiny.

What Explains Trump’s Focus on Manafort?

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As I noted yesterday on Twitter, the transcript of NYT’s interview with Donald Trump reads like this:

collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion collusion

23 times Trump either denied any evidence of collusion between his campaign and Russia or alleged collusion between Hillary and … I’m not entirely clear who she was supposed to have colluded with.

Whatever else this interview was, it was also a testament to Trump’s continued obsession with trying to deny any guilt.

Which is why I’m so interested in both the form and the singular focus on Trump’s denial of Paul Manafort.

SCHMIDT: What’s your expectation on Mueller? When do you —

TRUMP: I have no expectation. I can only tell you that there is absolutely no collusion. Everybody knows it. And you know who knows it better than anybody? The Democrats. They walk around blinking at each other.

SCHMIDT: But when do you think he’ll be done in regards to you —

TRUMP: I don’t know.

SCHMIDT: But does that bother you?

TRUMP: No, it doesn’t bother me because I hope that he’s going to be fair. I think that he’s going to be fair. And based on that [inaudible]. There’s been no collusion. But I think he’s going to be fair. And if he’s fair — because everybody knows the answer already, Michael. I want you to treat me fairly. O.K.?

SCHMIDT: Believe me. This is —

TRUMP: Everybody knows the answer already. There was no collusion. None whatsoever.

_________

TRUMP: Maybe I’ll just say a little bit of a [inaudible]. I’ve always found Paul Manafort to be a very nice man. And I found him to be an honorable person. Paul only worked for me for a few months. Paul worked for Ronald Reagan. His firm worked for John McCain, worked for Bob Dole, worked for many Republicans for far longer than he worked for me. And you’re talking about what Paul was many years ago before I ever heard of him. He worked for me for — what was it, three and a half months?

SCHMIDT: A very short period of time.

TRUMP: Three and a half months. [Inaudible] So, that’s that. Let’s just say — I think that Bob Mueller will be fair, and everybody knows that there was no collusion.

The interview started with a discussion of Jeff Sessions’ recusal, which led Trump to claim he won because he campaigned better than Hillary, but then Mike Schmidt returned to Russia, which returned Trump to his “no collusion” line.

Then Schmidt permits Trump to go off the record about … something. Then the interview goes back on the record with Trump apparently deciding to offer up details after all. He offers the following defense of Manafort:

  • He’s a nice, honorable man
  • Manafort worked for other Republicans too
  • Manafort didn’t work (on the campaign) for Trump long at all
  • Trump never heard of the man who lived in Trump Tower and had had a firm with Trump’s buddy Roger Stone

Having already had two people flip on him and agree to cooperate with prosecutors, Trump starts by flattering Manafort. He rightly reminds that Manafort has long been tolerated in the Republican party, even after Manafort’s fondness for working with thugs became widely known.

Trump then dismisses any Manafort taint based on time associated with the campaign (three and a half key months of the campaign, during the period when Russians were reaching out to provide dirt), not based on his actions for the campaign.

Finally, by falsely claiming he didn’t know Manafort, Trump absolves himself of any prior taint the lobbyist had.

As I said, I’m interested in this passage not just for Trump’s lame attempt at defending himself, but also that he did so. It’s only Manafort Trump feels the need to defend himself against, not Flynn (whom Trump reportedly is preparing to accuse of lying), not Papadopoulos, and not even Rick Gates (who, after all, hung around the campaign through the transition).

The Daily Beast did do an uninteresting piece suggesting Mueller’s team may get a superseding indictment against Manafort, but it doesn’t even imagine Mueller getting to the guts of the case, perhaps by indicting Manafort based on his ongoing reporting on the campaign to Oleg Deripaska via Konstantin Kilimnik, the latter of whom also served as a go-between in an effort to help Manafort write a self-defensive op-ed. Instead, it imagines only that Manafort will get a superseding indictment on tax charges.

Alternately, Schmidt may have said something during that off the record section that directly raised Manafort. Schmidt’s regular beat is the FBI, not Mar a Lago, so he may know something far more interesting than the Daily Beast does about where Mueller is going.

Whatever the reason, Trump seems far more worried about damage Manafort can do to him right now than any damage Flynn can.

Some Thoughts On The Manafort Indictment

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In response to yesterday’s server hiccups and in anticipation that Mueller is nowhere near done, we expanded our server capacity overnight. If you think you’ll rely on emptywheel reporting on the Mueller probe, please consider a donation to support the site. 

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.