Trump is “married to the Mob”: literally, figuratively, or both?
“Married to the Mob: Investigative Journalist Craig Unger on What Trump Owes the Russian Mafia”
First Trump sold his name, at 18% commission. (I wouldn’t buy it for a penny.)
“In return for lending his name to the project, Trump would get 18 percent of the profits—without putting up any of his own money.”
Did he also sell his soul, his honor, and his country after this “first step”? For how much? Mr. Mueller, give us your estimate for this bottom line, please, for the legal accuracy and correctness. Not that these figures matter that much, it does not really make much of a difference in this instance, if he did it for $1 or $1B. What matters if he did it, which still is very hard to believe.
After denial and deception come confrontation, “bargaining”, and acceptance of this possibility. Which is also hard to do.
“If you’re in relations with the Russian mafia, they’re the boss, you’re the apprentice. They can say “fired.” And they have compromised him. And they are also an arm of the Russian government. Russia is a mafia state. And I think what’s extraordinary, what Putin’s greatest achievement is, that he has weaponized organized crime so that it’s effectively a powerful foreign policy tool, and they’ve compromised the man who happens to be president of the United States now.”
Dolly Lenz, a New York real estate broker, told USA Today that she sold some 65 units in Trump World Tower to Russians. “I had contacts in Moscow looking to invest in the United States,” Lenz said. “They all wanted to meet Donald.”
“Last October, an investigation by the Miami Herald found that at least 13 buyers in the Florida complex have been the target of government investigations, either personally or through their companies, including “members of a Russian-American organized crime group.” Two buyers in Sunny Isles, Anatoly Golubchik and Michael Sall, were convicted for taking part in a massive international gambling and money-laundering syndicate that was run out of Trump Tower in New York. The ring, according to the FBI, was operating under the protection of the Russian mafia…
In April 2013, a little more than two years before Trump rode the escalator to the ground floor of Trump Tower to kick off his presidential campaign, police burst into Unit 63A of the high-rise and rounded up 29 suspects in two gambling rings. The operation, which prosecutors called “the world’s largest sports book,” was run out of condos in Trump Tower—including the entire fifty-first floor of the building. In addition, unit 63A—a condo directly below one owned by Trump—served as the headquarters for a “sophisticated money-laundering scheme” that moved an estimated $100 million out of the former Soviet Union, through shell companies in Cyprus, and into investments in the United States. The entire operation, prosecutors say, was working under the protection of Alimzhan Tokhtakhounov, whom the FBI identified as a top Russian vor closely allied with Semion Mogilevich. In a single two-month stretch, according to the federal indictment, the money launderers paid Tokhtakhounov $10 million.”
Why Donald Trump and his circle were not investigated and prosecuted on money laundering charges earlier; before he started his election campaign and before he became a U.S. President?!
This is the great error of omission on the part of the FBI.
Investigate the FBI investigators! Reform the FBI! Prevent this scandal, this historical drama and political tragicomedy, this humiliation of the American political culture on the world stage, from happening ever again!
This quote is an example and an illustration of the FBI’s ineptness:
“The FBI also struggled to figure out where Ivankov lived. “We were looking around, looking around, looking around,” James Moody, chief of the bureau’s organized crime section, told Friedman. “We had to go out and really beat the bushes. And then we found out that he was living in a luxury condo in Trump Tower.””
FBI: think deeper, search better, including under your very noses, and very possible, among your own “valiant midst”.
Before the start of business, Just Security provides a curated summary of up-to-the-minute developments at home and abroad. Here’s today’s news.
TRUMP-RUSSIA INVESTIGATION
Ways to limit or weaken special counsel Robert Mueller’s Trump-Russia investigation are being explored by some of President Trump’s lawyers after Trump asked his advisers about his powers to pardon aides, family members and even himself in connection with the investigation, with Carol D. Leonnig, Ashley Parker, Rosalind S. Helderman and Tom Hamburger report at the Washington Post.
Trump’s legal team is also reportedly amassing allegations of conflicts of interest against Mueller, an allegation disputed by a source with knowledge of the discussion who spoke to Eli Watkins at CNN.
It would be “extremely disturbing” if President Trump were thinking of pardoning aides who could be implicated in the Trump-Russia investigation, the highest-ranking Democrat on the Senate Intelligence Committee Sen. Mark Warner (Va.) said yesterday following reports that the president was consulting with advisers on his pardoning powers in connection to the probe. The Guardian reports.
It would be a “mistake” to fire Mueller, Sen. Marco Rubio (R-Fla.) who sits on the Senate Intelligence Committee said yesterday, Olivia Beavers reporting at the Hill.
The spokesperson for President Trump’s legal team Mark Corallo resigned because he disagreed with its reported strategy of discrediting or limiting the team directing the Trump-Russia investigation, Josh Dawsey reports at POLITICO.
Trump’s lawyer Marc Kasowitz’ role is being reduced and he is no longer running the legal strategy, which will now be handled by internal White House lawyer Ty Cobb, according to two people familiar with the matter, who added that Kasowitz could leave the team altogether. Josh Dawsey reports at POLITICO.
Special counsel Robert Mueller is reportedly looking at transactions involving Trump’s businesses and those of his associates as part of the Russia probe despite the president’s warning earlier this week that he would cross the line by looking into his finances, Greg Farrell and Christian Berthelsen report at Bloomberg.
There was no question that Russia interfered in the 2016 election, President Trump’s homeland security adviser Thomas Bossert and C.I.A. Director Mike Pompeo said at the Aspen Security Forum in Colorado yesterday, Kevin Johnson reporting at USA Today.
Possible money laundering by former Trump campaign manager Paul Manafort is being investigated by special counsel Robert Mueller as part of his Russia probe, Erica Orden reports at the Wall Street Journal.
Paul Manafort’s request to retract an article reporting that the former Trump campaign manager was in debt to pro-Russia interests by up to $17 million before he joined the campaign last year was denied by the New York Times, Hadas Gold reports at POLITICO.
With the president’s son, son-in-law and former campaign manager due to testify July 26 before the Senate Judiciary Committee about Russian influence on the U.S. election, Michelle Ye Hee Lee provides a timeline of Donald Trump Jr.’s contradictory statements about his meeting with Russian lawyer Natalia Veselnitskaya at the Washington Post.
“Everything is fine because nothing happened between Trump and the Kremlin.” The New York Times’ Andrew Rosenthal sets out where things stand according to the wisdom President Trump imparted in his New York Times interview this week, concluding that the Trump team is not evil or corrupt but ignorant and poorly informed, which explains why they have “trouble making moral judgments that most children could make.”
Americans are in danger of forgetting how a president who respected his or her office and the Constitution and had nothing to hide would speak and behave. The Washington Post editorial boardimagines what an “ethical president” would have said in Trump’s interview this week.
It is paramount that the Trump administration follows through on the steps taken by its predecessor to make clear that the U.S. is united in opposition to Russian interference and that further attempts will not succeed. Denis McDonough, White House chief of staff from 2013-2017, describes the events that took place inside the Obama administration last fall at the Washington Post.
ATTORNEY GENERAL JEFF SESSIONS
Attorney General Jeff Sessions plans to remain in his role despite comments from the president that he would not have nominated him if he’d known he would recuse himself from the Trump-Russia investigation in an interview this week, Sessions said yesterday, Robert Costa, Sari Horwitz and Matt Zapotosky reporting at the Washington Post.
President Trump still has confidence in Sessions, White House spokesperson Sarah Huckerbee insisted yesterday, but reiterated that Trump was “disappointed” with Sessions’ decision to recuse himself from matters related to Russian interference. Niall Stanage reports at the Hill.
President Trump still has confidence in Sessions, but the better question is does Sessions still have confidence in the president? Trump needs Sessions now more than ever, and if he quits, it might be hard to find someone willing to replace him, writes the Wall Street Journal editorial board.
This is not the typical Trump administration feud. For Trump, Sessions’ decision to recuse himself from the Russia investigation triggered everything that has happened since, explain Glenn Thrush and Maggie Haberman at the New York Times.
RUSSIA
The Treasury Department imposed a $2 million fine on Secretary of State Rex Tillerson’s former company ExxonMobil for violating Ukraine-related sanction in May 2014 by “signing eight legal documents related to oil and gas projects in Russia with Igor Sechin,” a close ally of Prussian President Putin, according to Treasury’s Office of Foreign Assets Control. Robbie Gramer and Noah Buyon report at Foreign Policy.
Exxon filed a legal complaint against the Treasury Department that called the fine “unlawful” and “fundamentally unfair” yesterday, this latest confrontation demonstrating the flipside of Trump’s strategy of filling his cabinet with titans of industry in the hope that their corporate expertise would help them confront global issues, suggest Damian Paletta and Carol Morello at the Washington Post.
G.O.P. lawmakers gave their clearest indication yet yesterday that the Russia sanctions bill would ultimately move forward without the changes to language that would empower Congress to block President Trump from any attempt to ease or end sanctions sought by the White House, reports Elana Schor at POLITICO.
A resolution to the impasse stemming from procedural spats and policy objections over the Russia sanctions bill should be “more or less” reached “over the next 24 hours,” House Majority Leader Kevin McCarthy (R-Calif.) said during an exchange on the House floor with Minority Whip Steny Hoyer (D-Md.) yesterday, Cristina Marcos reports at the Hill.
SYRIA
Fighting has broken out between the al-Qaeda-linked Hay’at Tahrir al Sham (H.T.S.) and the ultraconservative Ahrar al-Sham in Syria’s rebel-held northwestern Idlib province, as H.T.S. attempt to capture a main border crossing point with Turkey, the AP reports in rolling coverage.
Syrian government forces and the Lebanese group Hezbollah launched an operation on the Syrian-Lebanese border to clear out fighters from the Arsal area, the Lebanese army deploying reinforcements on the outskirts of Arsal in anticipation of fighters fleeing into Lebanon, Al Jazeera reports.
Significant gains in the early stages of the Syrian-Lebanese operation were reported by Hezbollah’s media, Laila Bassam and Tom Perry report at Reuters.
Insurgents ambushed a Syrian military unit killing 28 government troops near the capital of Damascus yesterday, according to an opposition activist and the U.K.-based Syrian Observatory for Human Rights, the ambush taking place in the rebel-held village of Rihan. The AP reports.
“We definitely feel betrayed,” Gen. Tlass al-Salameh of Osoud al-Sharqiya, a group affiliated with the Free Syrian Army, said yesterday, commenting on President Trump’s decision to end the C.I.A. program supporting Syrian rebels, other rebel commanders stating that the decision would boost President Bashar al-Assad’s regime and strengthen Iran. Erin Cunningham and Heba Habib report at the Washington Post.
The C.I.A. program in Syria was doomed from the beginning as it was “too late, too limited and too dependent on dubious partners,” and the program provided Russia with a pretext for military intervention in September 2015. David Ignatius suggests what could have been done differently at the Washington Post.
“I have no doubt we have the support of Congress,” Defense Secretary Jim Mattis told reporters yesterday following a briefing with lawmakers on the Trump administration’s strategy to combat the Islamic State in Syria and Iraq, with some expressing confidence and others concerned about the lack of an endgame. Rebecca Kheel reports at the Hill.
Israel’s “Operation Good Neighbor” has provided treatment and humanitarian aid for Syrian civilians, the project, which started in June 2016, demonstrating cooperation between Syrians and Israelis, providing security benefits for Israel on its border with Syria, and burnishing the reputation of Israel’s military. Isabel Kershner reports at the New York Times.
The Islamic State’s affiliates have successfully set up “provinces” across the world proving that despite the fall of the Islamic State’s “caliphate” in Syria and Iraq, the organization has transformed the political ideology of the insurgent groups that joined its caliphate project, Yaroslav Trofimov writes at the Wall Street Journal.
Once again President Trump has proved his subservience to Russia’s interests and worldview in cutting off aid to American proxies in Syria, and concessions without reciprocation made against the advice of foreign policy advisers “smacks more of payoff than outreach” with the result that America is strategically and morally disarmed, writes Michael Gerson at the Washington Post.
The KOREAN PENINSULA
The “most important” thing the Trump administration can do is “separate” North Korea from its “dangerous” leader, C.I.A. Director Mike Pompeo said yesterday in what CNN’s Eli Watkins cites as “some of the most aggressive comments yet” from the administration on North Korean leader Kim Jong-un.
North Korea was urged to respond to South Korea’s proposal to hold talks this week at the border truce village of Panmunjom by defense ministry spokesperson Moon Sang-Kyun after it ignored the original offer made Monday, Al Jazeera reports.
The U.S. will ban its citizens from traveling to North Korea, the ban due to take effect 30 days after its announcement on July 27, according to two tour agencies that operate there. The U.S. has not confirmed the claims, the BBC reports.
The U.K. stands “shoulder to shoulder” with Japan in putting an end to North Korea’s nuclear and missile programs, U.K. Foreign Secretary Boris Johnson said today after meeting his Japanese counterpart in Fumio Kishida, the AP reports.
Why hasn’t North Korea responded to the South’s offer of talks? The AP’s Hyung-Jin Kim and Kim Tong-Hyung offer some explanations, with the caveat that outside knowledge of decision-making under Kim Jong-un is limited.
GULF-ARAB DISPUTE
A decree amending provisions of a law on “combating terrorism” and providing definitions of terms such as “financing terrorism” was issued by Qatar’s Emir Sheikh Tamim bin Hamad Al Thani yesterday, coming soon after an agreement between Qatar and the U.S. on committing to efforts to tackle terrorism was signed by Secretary of State Rex Tillerson during a recent visit to Doha, Al Jazeerareports.
The cyberattack on Qatar’s official media originated from U.A.E., according to Qatar’s Ministry of Interior, stating that the sophistication of the hack, which attributed false quotes to Qatar’s Emir, was supported by “state resources.” Al Jazeera reports.
China’s Foreign Minister Wang Yi has called on Gulf countries to “continue face-to-face talks as soon as possible,” making the comments yesterday following a meeting with Qatar’s Foreign Minister and a day after meeting with a top U.A.E. official. Al Jazeera reports in rolling coverage.
IRAQ
An execution site has been discovered in the recently recaptured Iraqi city of Mosul, according to Human Rights Watch, the rights group raising concerns about allegations of ill-treatment and extrajudicial killings with the government in Baghdad, Al Jazeera reports.
Families accused of having relatives in the Islamic State group have been forcibly displaced to Shahama camp by the Popular Mobilization Forces (P.M.F.), which has been described as an “open-air prison” by Human Rights Watch, the head of the P.M.F. stating that they were being sent to the camp for their own protection. Al Jazeera reports.
The violence in Iraq will not end while perpetrators of abuse and extrajudicial killing act with impunityand the actions of some within the security services will lead to anger, mistrust and, inevitably, more violence and instability. Zaid al-Ali writes at Al Jazeera.
U.S.-led airstrikes continue. U.S. and coalition forces carried out 20 airstrikes against Islamic State targets in Syria on July 19. Separately, partner forces conducted six strikes against targets in Iraq. [Central Command]
ISRAEL & PALESTINE
Israeli police are prepared for disturbances and violence in Jerusalem today following the Israeli government’s decision to keep in place controversial security measures introduced Sunday after three Palestinian Israeli gunmen emerged from the al-Aqsa mosque – a contested holy site revered by Muslims and Jews – and killed two Israeli police officers on Friday, Ruth Eglash reports at the Washington Post.
Palestinian worshippers clashed with Israeli police near the contested site yesterday over the installation of metal detectors, and Muslim clerics have called for mass protests today, Aron Heller and Ilan Ben Zion report at the AP.
Metal detectors will remain in place at the contested holy site, Israeli police confirmed today, Palestinian Authority President Mahmoud Abbas asking the U.S. to “intervene urgently” to persuade Israel to remove the detectors, according to a senior Palestinian official. The AP reports in rolling coverage.
Muslim men under the age of 50 will not be allowed near the site, Israeli police said today, as tensions rise in Jerusalem and some Palestinians fear that Israel is trying to retake the site by stealth, Al Jazeera reports.
Hamas warned Israel against crossing a “red line” yesterday, the leader of Hamas Ismail Haniyeh stating Israel’s policy of “closure and collective punishment” of Palestinians “will not be tolerated,” Al Jazeera reports.
World leaders have raised concerns about the escalating tensions in Jerusalem and some countries, such as Turkey and Lebanon, have condemned Israel’s restrictions on access to the al-Aqsa Mosque, Al Jazeera reports.
THE PHILIPPINES
The Islamic State’s central command in Syria has sent tens of thousands of dollars to militants in the Philippines in the last year, most likely assisting their seizure of the city of Marawi, according to a report from the Jakarta-based Institute for Policy Analysis of Conflict released today, Jon Emont and Felipe Villamor report at the New York Times.
Warnings of further attacks by militants in Southeast Asia including on foreigners as the battle between Philippine forces and Islamic State-linked fighters in the southern city of Marawi are also contained in the report, Reuters’ Tom Allard reports.
TRUMP ADMINISTRATION FOREIGN POLICY
President Trump has offered the post of U.S. ambassador to Germany to Richard Grenell, a Republican diplomatic aide who served four U.S. ambassadors to the U.N. and worked closely with the George W. Bush administration, Maggie Haberman reports at the New York Times.
The U.S. warned South Sudan yesterday that it would review its “position and priorities on support for the [2015] peace agreement” if South Sudan’s leaders failed to participate in a high-level forum aimed at resolving the conflict between Sudan and South Sudan, Edith M. Lederer reports at the AP.
The U.S. should honor its wartime allies by expanding the special immigration visa program and giving Iraqi and Afghani immigrants the opportunity to thrive once in the U.S., Matt Zeller writes at the Washington Post.
OTHER DEVELOPMENTS
Air Force Gen. Paul Selva’s nomination to be the vice chairman of the Joint Chiefs of Staff for another two years was approved by voice vote by the Senate Armed Services Committee yesterday, while the panel by voice vote favorably reported several nominations for civilian Pentagon roles, all of which will now go to the full Senate for a vote. Ellen Mitchell reports at the Hill.
A Chinese flotilla is heading for the Baltic Sea where it will engage in military exercises with the Russian Navy, the first ever joint China-Russia operation in European waters, CNN’s Brad Lendon and Steve George report.
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Additionally, Mueller has asked White House staff to preserve all documents related to the June 2016 meeting between Donald Trump, Jr. and figures linked to the Kremlin, including the Russian attorney Natalia Veselnitskaya. Though Veselnitskaya has denied ever acting as an agent of the Russian government, Reuters reports that she represented the Russian FSB spy agency in a property dispute from 2005 through 2013.
Senate Judiciary Chairman Chuck Grassley (R-IA) has threatened to subpoena Donald Trump, Jr. and Paul Manafort if they refuse to testify before the committee voluntarily at its upcoming Wednesday hearing on the Trump Tower meeting, CNN reports. Manafort also attended the meeting with Veselnitskaya and Trump Jr. during his time as manager of the Trump campaign, along with the president’s son-in-law Jared Kushner.
Sean Spicer has resigned as White House press secretary, the Times reports. He allegedly cited his disagreement with Trump’s decision to appoint wealthy financier Anthony Scaramucci as the new communications director. Trump decided to shake up his legal and communications team in response to the Mueller probe and a stalling domestic agenda, the Post reports. Longtime personal attorney Marc Kasowitz will step back from leading the legal team, with Washington white-collar crime attorney John M. Dowd taking control. Spokesman for the outside legal team Mark Corallo resigned Thursday after just two months in the position. Trump brought attorney Ty Cobb onto the White House team last week to coordinate internal responses to the Russia probe.
Yesterday, the Department of Justice and Europol announced the largest-ever sting against dark web black markets in history, Wired reports. Dutch authorities had quietly taken over a dark web market called Hansa, but continued to allow it to operate. Once the FBI took down another popular market, AlphaBay, users flocked to Hansa. Authorities were then able to gather information on thousands of users, including postal addresses and messages.
In a highly unusual move, Trump met with his nominee for the U.S. Attorney for D.C. prior to her selection, CNN reports. Jessie K. Liu said in her disclosure to the Senate Judiciary Committee that she had met with the president during her interview process, but noted that no one had asked for a loyalty pledge such as Trump requested of former FBI Director James Comey, nor had she given one. Several former U.S. attorneys and law enforcement officials said such a meeting would have been unheard of in past administrations because it could undermine the insulation of U.S. attorneys from political influence. Others said the meeting was not a cause for concern given the importance of the position.
The Treasury Department has fined ExxonMobil $2 million for sanctions violations committed during now-Secretary of State Rex Tillerson’s tenure as CEO, Foreign Policy reports. The Department claims that Exxon showed “reckless disregard” for sanctions against Russia and also damaged Ukraine-related sanctions. The company is fighting the fine in federal court.
China dispatched a warship to the Baltic Sea to conduct the first-ever China-Russia joint naval exercises in European waters, CNN reports. Both the advanced technology of the warship and the decision to conduct the exercises so close to Europe has captured the attention of NATO. China experts say the move is an effort to demonstrate the country’s military strength and an increasingly global reach.
The Department of Defense blocked the disbursement to Pakistan of $300 million initially designated to reimburse the country for its fight against terrorist groups, Foreign Policy reports. The Pentagon said that Defense Secretary James Mattis could not adequately certify that Pakistan had taken “sufficient action” against the Haqqani Network terrorist organization. A report released by the Pentagon last week came to a similar conclusion, criticizing Pakistan’s failure to take substantial action against the Haqqani Network and the Afghan Taliban and for failing to limit the threat that the groups pose to U.S. interests in Afghanistan.
The Navy has its first female candidates for two elite special operations positions previously closed to women, NPR reports. One candidate is in the pipeline to become a SEAL officer, while the other will attempt to become a special warfare combatant crewman. The two will need to complete extremely rigorous training programs with high attrition rates before landing the positions.
ICYMI: Yesterday, on Lawfare
Lawfare published a chapter from Charles Black Jr.’s 1974 Impeachment: A Handbook exploring the parameters of what constitutes an impeachable offense.
Jane Chong applied Black’s guide to the issues surrounding the Trump administration.
Benjamin Wittes discussed Trump’s attack on federal law enforcement in his Times interview.
Jack Goldsmith examined the interview’s implications for the independence of the Justice Department.
Bob Bauer considered what the interview revealed about Trump’s legal position and potential difficulties.
Murray Scot Tanner analyzed the offensive shift in China’s new National Intelligence Law.
Email the Roundup Team noteworthy law and security-related articles to include, and follow us on Twitter and Facebook for additional commentary on these issues. Sign up to receive Lawfare in your inbox. Visit our Events Calendar to learn about upcoming national security events, and check out relevant job openings on our Job Board.
Trump’s Russian Laundromat
New Republic August/September Issue: Trump’s Russian Laundromat
Mueller is now looking into ties between Russia and Trump’s …
Married to the Mob: Investigative Journalist Craig Unger on What …
Reports that President Donald Trump’s former campaign manager, Paul Manafort, is under investigation for possible money laundering are putting a fresh spotlight on the crime, which is thought to touch trillions of dollars in assets each year.
As a term, money laundering covers a broad range of techniques to hide ill-gotten gains from criminal activities. While governments and banks have developed new technology for tracking dirty money, money-launderers are also taking advantage of tech, relying on strategies such as online gaming and digital currency to “clean” their assets.
As much as $2 trillion in assets are estimated to be money-laundered annually, according to the United Nations Office on Drugs and Crime, although the inter-governmental Financial Action Task Force (FATF) says it’s difficult to accurately assess the scope of the problem given its illicit nature.
Money laundering doesn’t just affect criminals. The FATF notes that it can allow organized crime to take control of portions of a country’s economy or, through bribery, gain influence over public officials.
Following are five things to know about money laundering:
How is technology changing money laundering? The anonymity of the internet and digital currencies are creating new outlets for money launderers. “Dirty” money can be put into online marketplaces, such as gaming platforms, and cashed out as “clean” money, according to a paper from cybersecurity expert Jean-Loup Richet. Some of those methods are simply updated versions of older techniques, such as a “mule” scam, where unwitting consumers are asked to do a favor for a stranger who sometimes claims to be a high-ranking official. Those favors can include transferring assets, which allows the criminal to clean their profits through their victim’s accounts. Others are newer, such as relying on digital currencies and online games such as World of Warcraft, where scammers can open accounts, send digital money to associates in other countries who then cash it out.
How do criminals launder money through real estate? Illicit funds can be made to seem legitimate through real estate by by being funneled through limited liability companies that then purchase real estate, according to the U.S. Treasury’s Financial Crimes Enforcement Network, or FinCEN. Criminals also rely on shell companies to buy real estate in all-cash transactions, often for luxury real estate in New York City and Miami, according to the agency.
Aren’t only shady organizations involved in money laundering? Actually, no. Some large banks and corporations have been charged with the crime, such as in the case of Wachovia Bank, which settled allegations of money laundering for $150 million in 2010. The bank admitted a “failure to identify, detect and report suspicious transactions.” Other well-known banks that have been accused of money laundering include HSBC, Bank of China and Credit Suisse, among others.
What type of money laundering is tied to Russia? One of the biggest scams was the so-called “Russian Laundromat,” a scheme uncovered by the Organized Crime and Corruption Reporting Project, an investigative reporting group. The Russian Laundromat funneled at least $20 billion out of Russia and into dozens of other countries through shell companies, with the group noting the money may have been diverted from the Russian treasury using methods ranging from fraud to tax evasion, the group found.
In a more recent case, the Department of Justice settled a $230 million money-laundering case earlier this year just days before the trial. The case involved Russian executive Denis Katsyv, the owner of Prevezon Holdings, with U.S. officials seeking to seize Manhattan real estate and other assets they alleged were used to launder money through a fraudulent tax refund scheme.
What are the major money-laundering countries? According to the U.S. State Department’s assessment of countries of “primary concern,” there are dozens of nations whose financial firms are said to launder money for drug traffickers, including the United Kingdom, Russia and China. Another study of developing countries found that China and Russia are the No. 1 and No. 2 countries involved in illicit money outflows.
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U.S. Special Counsel Robert Mueller has widened his investigation into possible collusion between Russia and Donald Trump’s presidential campaign. Mueller is looking into Trump’s financial dealings with with unsavory Russian businessman, including mobsters and corrupt Kremlin officials.
Mueller has his work cut out for him — the August/September issue of The New Republic has an in-depth article about Trump’s “decades-long ties to Russian mafia.” Only someone brainwashed by ideology could read this article and not think Trump has been up to no good for a very long time.
From The New Republic’s press release:
In “Trump’s Russian Laundromat,” veteran journalist Craig Unger details how the Russian mafia has used the president’s properties—including Trump Tower and the Trump Taj Majal—as a way to launder money and hide assets. “Whether Trump knew it or not,” writes Unger, “Russian mobsters and corrupt oligarchs used his properties not only to launder vast sums of money from extortion, drugs, gambling, and racketeering, but even as a base of operations for their criminal activities. In the process, they propped up Trump’s business and enabled him to reinvent his image. Without the Russian mafia, it is fair to say, Donald Trump would not be president of the United States.”
Based entirely on the extensive public record, the piece offers the most comprehensive overview of the deep debt that the president owes the Russian mafia. “The extent of Trump’s ties to the Russian mafia—and the degree to which he relied on them for his entire business model—is striking,” says Eric Bates, editor of the New Republic. “After reading this story, it should come as no surprise to anyone that the president continues to exhibit a deep loyalty to the world of shady Russian operatives who have invested vast sums in his properties.”
Trump’s lawyer says the new direction Mueller is moving leads to a forbidden zone. From Bloomberg:
John Dowd, one of Trump’s lawyers, said on Thursday that he was unaware of the inquiry into Trump’s businesses by the two-months-old investigation and considered it beyond the scope of what Special Counsel Robert Mueller should be examining.
“Those transactions are in my view well beyond the mandate of the Special counsel; are unrelated to the election of 2016 or any alleged collusion between the Trump campaign and Russia and most importantly, are well beyond any Statute of Limitation imposed by the United States Code,” he wrote in an email.
Married to the Mob: Investigative Journalist Craig Unger on What …
Mueller is now looking into ties between Russia and Trump’s …
New Republic August/September Issue: Trump’s Russian Laundromat
Married to the Mob: Investigative Journalist Craig Unger on What …
Trump’s Russian Laundromat
45 Watch III: Russian Edition!
Revealed: Donald Trump’s Network Of Russian Sleaze & Mob …
Former Ukrainian President Viktor Yanukovych (left) and Dmitry Firtash (right)
As we noted earlier here and here, among the many dictators, despots, and shady foreigners who called Trump Tower home were members of the Russian Mafia with connections to Semion Mogilevich, said to be the most dangerous Mobster in the world.
Robert Mueller, the special counsel appointed to investigate Trump’s links to Russia, may also be taking an interest in Trump’s ties to Mogilevich, a man the FBI says is involved in weapons trafficking, contract murders, extortion, drug trafficking, and prostitution on an international scale.
As described in Wired, among the prosecutors and investigators hired by Mueller, is one Lisa Page:
Also, while the Special Counsel’s office has yet to make any formal announcements about Mueller’s team, it appears he has recruited an experienced Justice Department trial attorney, Lisa Page, a little-known figure outside the halls of Main Justice but one whose résumé boasts intriguing hints about where Mueller’s Russia investigation might lead. Page has deep experience with money laundering and organized crime cases, including investigations where she’s partnered with an FBI task force in Budapest, Hungary, that focuses on eastern European organized crime. That Budapest task force helped put together the still-unfolding money laundering case against Ukrainian oligarch Dmitry Firtash…
The hiring of Page, which was confirmed by a Mueller spokesman in The New York Times, gives the special counsel a team member with knowledge of not only Dmitry Firtash, but of the man who is believed to stand behind him: Semion Mogilevich.
Full disclosure: Firtash hired the Washington law firm Akin Gump to clear him of links to Mogilevich. I profiled Akin Gump partner Mark MacDougall in this 2008 piece.
Firtash, pictured above, made his fortune in the 2000s in the natural gas sector. In 2004, Firtash and a minority partner emerged with 50 percent ownership of a murky Swiss company called RosUkrEnergo (RUE). RUE extracts gas from Central Asia and acts an intermediary between Russia and Ukraine for the delivery of gas. The other half of RUE is held by Gazprom, the gas giant controlled by the Russian government, which shows that Firtash has close ties with the Kremlin.
Billions of dollars flowed through RUE and some of that money was allegedly siphoned off by Semion Mogilevich, who U.S. government officials say (see here) is the man behind the curtain at the gas company. One of the few willing to say this publicly was Ukraine’s former prime minister, Yulia Tymoshenko, a political enemy of Firtash, who got thrown in jail for her troubles. Notably, Firtash’s stake in RUE remained a secret for two years.
Intelligence Online, a Paris-based news organization with deep sources in the spy world, published this handy chart of the Firtash/Mogilevich connections, under the headline “The Tip of the Mogilevich Iceberg:”
Firtash admitted to William Taylor, the US ambassador to the Ukraine, that he has had dealings with Mogilevich, according to a 2008 State Department cable leaked by Wikileaks:
(S) The Ambassador asked Firtash to address his alleged ties to Russian organized crime bosses like Semyon Mogilievich. Firtash answered that many Westerners do not understand what Ukraine was like after the break up of the Soviet Union, adding that when a government cannot rule effectively, the country is ruled by “the laws of the streets.” He noted that it was impossible to approach a government official for any reason without also meeting with an organized crime member at the same time. Firtash acknowledged that he needed, and received, permission from Mogilievich when he established various businesses, but he denied any close relationship to him.
And in this October 2009 press release, the FBI took note of Mogilevich’s control of natural gas supplies. “Through his extensive international criminal network, Mogilevich controls extensive natural gas pipelines in Eastern Europe,” the bureau wrote in a veiled reference to RUE.
The question is what is the nature of the relationship between Firtash and Mogilevich. Is it a thing of the past, as Firtash insists? Or is Firtash a front man for Mogilevich?
Presumably, the FBI — and, by extension, Lisa Page — knows the answer. The bureau has been investigating Firtash since 2006, according to The New York Times. A year before that, the FBI passed their counterparts in the Austrian police a confidential report naming Firtash as a “senior member” of the Semion Mogilevich Organization, according to a 2008 report by Roman Kupchinsky, an analyst with Radio Free Europe.
Page’s work in Budapest involved her deeply in the Firtash/Mogilevich world. The Wired article suggests she worked on the case that led to Firtash’s arrest in Vienna in 2014. Firtash was indicted by a federal grand jury in Chicago on charges of plotting a bribery scheme to set up a $500 million titanium business in India. He remains free after a Russian billionaire friend posted bail of $174 million but cannot leave Austria.
And Budapest is also a home of sorts for Mogilevich. He resided in Budapest when he ran a pump-and-dump scheme through a publicly traded front company called YBM Magnex Inc. Mogilevich was indicted in 2003 on charges of fraud, racketeering and money laundering in YBM Magnex.
So, what does this have to do with President Trump?
Firtash was a business partner of Trump’s former campaign manager, Paul Manafort, who was deeply involved in Ukrainian politics. Manafort advised Viktor Yanukovych on his successful 2010 campaign for the presidency of Ukraine. He resigned from the Trump campaign after The New York Times found a handwritten ledger showing that Yanukovych paid Manfort $12.7 million in cash.
While he was assisting Yanukovych, Manafort became business partners with Firtash. The two men explored developing a 65-floor tower on the site of the Drake Hotel in Midtown Manhattan.
A 2011 lawsuit filed in New York by Tymoshenko, the former Ukrainian prime minister, called this partnership between Firtash and Manafort a means of laundering the proceeds of gas deals between the Ukraine and Russia. Firtash says that the lawsuit was full of lies, but he confirmed to Bloomberg Businessweek that he did put $25 million in an escrow account for the developers of the Drake project that Manafort helped him set up. The deal collapsed and the tower was never built.
It’s a good bet to say that we only know a little of this story, which is buried in the files of the FBI and the US intelligence community. But Trump Tower’s role as a home away from home for Russian mobsters with Mogilevich and his unhinged, self-destructive reactions to anyone probing into Russia suggests that there is more, much more to come. Stay tuned.
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Trump has asked his advisers about his power to pardon aides, family members and even himself in connection with the probe, according to one of those people. A second person said Trump’s lawyers have been discussing the president’s pardoning powers among themselves.
One adviser said the president has simply expressed a curiosity in understanding the reach of his pardoning authority, as well as the limits of Mueller’s investigation.
“This is not in the context of, ‘I can’t wait to pardon myself,’ ” a close adviser said.
(Meg Kelly/The Washington Post)
With the Russia investigation continuing to widen, Trump’s lawyers are working to corral the probe and question the propriety of the special counsel’s work. They are actively compiling a list of Mueller’s alleged potential conflicts of interest, which they say could serve as a way to stymie his work, according to several of Trump’s legal advisers.
A conflict of interest is one of the possible grounds that can be cited by an attorney general to remove a special counsel from office under Justice Department regulations that set rules for the job.
Responding to this story on Friday after it was published late Thursday, one of Trump’s attorneys, John Dowd, said it was “not true” and “nonsense.”
“The President’s lawyers are cooperating with special counsel Robert Mueller on behalf of the President,” he said.
Other advisers said the president is also irritated by the notion that Mueller’s probe could reach into his and his family’s finances.
Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. His primary frustration centers on why allegations that his campaign coordinated with Russia should spread into scrutinizing many years of Trump dealmaking. He has told aides he was especially disturbed after learning Mueller would be able to access several years of his tax returns.
Trump has repeatedly refused to make his tax returns public after first claiming he could not do so because he was under audit or after promising to release them after an IRS audit was completed. All presidents since Jimmy Carter have released their tax returns.
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[Analysis: Asking about a pardon for himself is a quintessentially Trumpian move]
Further adding to the challenges facing Trump’s outside lawyers, the team’s spokesman, Mark Corallo, resigned on Thursday, according to two people familiar with his departure. Corallo did not respond to immediate requests for comment.
“If you’re looking at Russian collusion, the president’s tax returns would be outside that investigation,” said a close adviser to the president.
Jay Sekulow, one of the president’s private lawyers, said in an interview Thursday that the president and his legal team are intent on making sure Mueller stays within the boundaries of his assignment as special counsel. He said they will complain directly to Mueller if necessary.
“The fact is that the president is concerned about conflicts that exist within the special counsel’s office and any changes in the scope of the investigation,” Sekulow said. “The scope is going to have to stay within his mandate. If there’s drifting, we’re going to object.”
Sekulow cited Bloomberg News reports that Mueller is scrutinizing some of Trump’s business dealings, including with a Russian oligarch who purchased a Palm Beach mansion from Trump for $95 million in 2008.
“They’re talking about real estate transactions in Palm Beach several years ago,” Sekulow said. “In our view, this is far outside the scope of a legitimate investigation.”
The president has long called the FBI investigation into his campaign’s possible coordination with the Russians a “witch hunt.” But now, Trump is coming face-to-face with a powerful investigative team that is able to study evidence of any crime it encounters in the probe — including tax fraud, lying to federal agents and interference in the investigation.
“This is Ken Starr times 1,000,” said one lawyer involved in the case, referring to the independent counsel who oversaw an investigation that eventually led to House impeachment proceedings against President Bill Clinton. “Of course, it’s going to go into his finances.”
Following Trump’s decision to fire FBI Director James B. Comey — in part because of his displeasure with the FBI’s Russia investigation — Deputy Attorney General Rod J. Rosenstein appointed Mueller as special counsel in a written order. That order gave Mueller broad authority to investigate links between the Russian government and the Trump campaign, as well as “any matters that arose or may arise directly from the investigation” and any crimes committed in response to the investigation, such as perjury or obstruction of justice.
Mueller’s probe has already expanded to include an examination of whether Trump obstructed justice in his dealings with Comey, as well as the business activities of Jared Kushner, Trump’s son-in-law.
Trump’s team could potentially challenge whether a broad probe of Trump’s finances prior to his candidacy could be considered a matter that arose “directly” from an inquiry into possible collusion with a foreign government.
The president’s legal representatives have also identified what they allege are several conflicts of interest facing Mueller, such as donations to Democrats by some of his prosecutors.
Another potential conflict claim is an allegation that Mueller and Trump National Golf Club in Northern Virginia had a dispute over membership fees when Mueller resigned as a member in 2011, two White House advisers said. A spokesman for Mueller said there was no dispute when Mueller, who was FBI director at the time, left the club.
Trump also took public aim on Wednesday at Attorney General Jeff Sessions and Rosenstein, whose actions led to Mueller’s appointment. In an interview with the New York Times Wednesday, the president said he never would have nominated Sessions if he knew he was going to recuse himself from the case.
[Sessions learns loyalty can be a one-way street with Trump]
Some Republicans in frequent touch with the White House said they viewed the president’s decision to publicly air his disappointment with Sessions as a warning sign that the attorney general’s days were numbered. Several senior aides were described as “stunned” when Sessions announced Thursday morning he would stay on at the Justice Department.
Another Republican in touch with the administration described the public steps as part of a broader effort aimed at “laying the groundwork to fire” Mueller.
“Who attacks their entire Justice Department?” this person said. “It’s insane.”
Law enforcement officials described Sessions as increasingly distant from the White House and the FBI because of the strains of the Russia investigation.
Traditionally, Justice Department leaders have sought to maintain a certain degree of autonomy from the White House as a means of ensuring prosecutorial independence.
But Sessions’s situation is more unusual, law enforcement officials said, because he has angered the president for apparently being too independent while also angering many at the FBI for his role in the president’s firing of Comey.
As a result, there is far less communication among those three key parts of the government than in years past, several officials said.
Currently, the discussions of pardoning authority by Trump’s legal team are purely theoretical, according to two people familiar with the ongoing conversations. But if Trump pardoned himself in the face of the ongoing Mueller investigation, it would set off a legal and political firestorm, first around the question of whether a president can use the constitutional pardon power in that way.
“This is a fiercely debated but unresolved legal question,” said Brian C. Kalt, a constitutional law expert at Michigan State University who has written extensively on the question.
The power to pardon is granted to the president in Article II, Section 2, of the Constitution, which gives the commander in chief the power to “grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.” That means pardon authority extends to federal criminal prosecution but not to state level or impeachment inquiries.
No president has sought to pardon himself, so no courts have reviewed it. Although Kalt says the weight of the law argues against a president pardoning himself, he says the question is open and predicts such an action would move through the courts all the way to the Supreme Court.
“There is no predicting what would happen,” said Kalt, author of the book, “Constitutional Cliffhangers: A Legal Guide for Presidents and Their Enemies.” It includes chapters on the ongoing debate over whether presidents can be prosecuted while in office and on whether a president can issue a pardon to himself.
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Other White House advisers have tried to temper Trump, urging him to simply cooperate with the probe and stay silent on his feelings about the investigation.
On Monday, lawyer Ty Cobb, newly brought into the White House to handle responses to the Russian probe, convened a meeting with the president and his team of lawyers, according to two people briefed on the meeting. Cobb, who is not yet on the White House payroll, was described as attempting to instill some discipline in how the White House handles queries about the case. But Trump surprised many of his aides by speaking at length about the probe to the New York Times two days later. Cobb, who officially joins the White House team at the end of the month, declined to comment for this article.
Some note that the Constitution does not explicitly prohibit a president from pardoning himself. On the other side, experts say that by definition a pardon is something you can only give to someone else. There is also a common-law canon that prohibits individuals from serving as a judge in their own case. “For example, we would not allow a judge to preside over his or her own trial,” Kalt said.
A president can pardon an individual at any point, including before the person is charged with a crime, and the scope of a presidential pardon can be very broad. President Gerald Ford pardoned former president Richard M. Nixon preemptively for offenses he “committed or may have committed” while in office.
Devlin Barrett and Sari Horwitz contributed to this report.