Foreign Influence Archives

About Those Two Sealed Dockets Related to the Henry Cuellar Case…

May 9, 2024/2 Comments/in 2024 Election, Foreign Influence /by emptywheel

Remember when I noted that there were two sealed dockets that had been deemed “related” to the Henry Cuellar docket?

There are two cases related to this one, 4:24-cr-00089, 4:24-cr-00113, both of which were charged this year, both of which remain sealed. That means several other people involved in this scheme are also being prosecuted.

There are several key participants in this alleged scheme who might be candidates for either parallel prosecution or cooperation deals. For example, one of the Cuellars’ adult children has allegedly been getting a cut of these deals and, in 2021 (both schemes appear to have paused in 2020), took over the Azerbaijani scheme and got payments to close out the Mexican scheme. As noted below, absent that child’s involvement, at least the Azerbaijani side of the indictment would face timeliness problems.

The indictment also describes that a San Antonio associate of Cuellar’s served as middleman for the contract with Mexico, allegedly laundered through Cuellar’s former Chief of Staff; three paragraphs of the indictment describe conversations the San Antonio associate had with Cuellar back in 2015 that must arise from his direct testimony.

They’ve been unsealed.

They belong to the San Antonio associate, Florencio Rendon, and the former Chief of Staff, Mina Strother.

Both entered into cooperation plea deals in early March.

That news comes amid news that several other current Cuellar aides have quit.

Which leaves one thing to be resolved: How DOJ plans to rope the Cueller’s adult child into this, without whose inclusion this prosecution has timeliness problems (though it’s possible they’ll trade that child’s fate for quick pleas).

In other Cueller related news, DOJ filed to start the CIPA process today, doing so at a far earlier point in the prosecution than SDNY did in the Bob Menendez case. I had noted that there where dated, probably intercepted discussions among Azerbaijani officials about recruiting Cuellar. I would imagine DOJ hopes to protect more recent such intercepts via the CIPA process.

I said already, this prosecution is a lot more straightforward than the Menendez one. Particularly if DOJ can leverage the child, this thing may not go to trial.

The Cuellar Indictment: DOJ Moves to Make 219 FARA a Thing

May 4, 2024/30 Comments/in Foreign Influence /by emptywheel

DOJ indicted Henry Cuellar and his spouse Imelda last Monday on charges that they laundered almost $600K in bribes through sham consulting contracts to Imelda in return for policies favorable to a state-owned Azerbaijani oil company and a Mexican bank.

The case was charged in South Texas, but will be prosecuted by a bunch of DC-based prosecutors.

Acting Deputy Chief Marco A. Palmieri, Acting Deputy Chief Rosaleen O’Gara, and Trial Attorney Celia Choy of the Criminal Division’s Public Integrity Section and Trial Attorney Garrett Coyle of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

There are two cases related to this one, 4:24-cr-00089, 4:24-cr-00113, both of which were charged this year, both of which remain sealed. That means several other people involved in this scheme are also being prosecuted.

There are several key participants in this alleged scheme who might be candidates for either parallel prosecution or cooperation deals. For example, one of the Cuellars’ adult children has allegedly been getting a cut of these deals and, in 2021 (both schemes appear to have paused in 2020), took over the Azerbaijani scheme and got payments to close out the Mexican scheme. As noted below, absent that child’s involvement, at least the Azerbaijani side of the indictment would face timeliness problems.

The indictment also describes that a San Antonio associate of Cuellar’s served as middleman for the contract with Mexico, allegedly laundered through Cuellar’s former Chief of Staff; three paragraphs of the indictment describe conversations the San Antonio associate had with Cuellar back in 2015 that must arise from his direct testimony.

The alleged conduct in this indictment is dated. The Azerbaijani side started over a decade ago, after Cuellar was elevated to Appropriations shortly after the couple traveled to Baku.

22. Shortly after the CUELLARS returned to the United States, Azerbaijani officials discussed recruiting HENRY CUELLAR to promote Azerbaijan’s interests in the United States Congress. On January 23, 2013, an Azerbaijani diplomat emailed the director of Foreign Oil Company-1’s Washington, D.C. office, listing the newly announced membership of the Appropriations Committee’s Subcommittee on State, Foreign Operations, and Related Programs, which included HENRY CUELLAR. The diplomat wrote, “[t]he good news is that Cuellar was just in Baku.” The employee continued, “[w]e need to work with these offices to make sure we build an anti-[Representative-1] coalition.” Representative-1 was a member of the Congressional Armenian Caucus. The diplomat further wrote, “[i]n your Congressional outreach and engagement with [Individual-1] please keep in mind these folks as a top priority.”

The indictment alleges that by February of 2014, the Cuellars were setting up a consulting contract to receive funds.

Because these are dated allegations, there could be some vulnerability regarding statutes of limitation. For example, all the Azerbaijani payments to Imelda’s allegedly sham companies were more than five years ago.

All but two of the payments from Mexico to Imelda ended more than five years ago (and the Mexican side of the payment took place in January 2019, so outside that five years).

Three of the five individual money laundering charges happened more than five years ago — but just barely, a matter of weeks.

The couple’s child assumed — or perhaps resumed — the Azerbaijani relationship, but in 2021 (and specific details of payments are not provided). Three of 13 overt acts described as the payoff for bribes took place in 2020, when the indictment provides no evidence of payment (and the rest are all also more than five years old).

The same child was paid by the San Antonio associate the remainder of Mexican money owed in 2021.

So without including the child, this indictment would be barely viable, perhaps not viable at all with regards the Azerbaijani conduct.

The Cuellars are charged with a bunch of crimes: For both sides of the indictment, with conspiracy, bribery, and wire fraud, plus money laundering and money laundering conspiracy.

In addition, they’re charged with 18 USC 219 and 2, a public official acting as an agent of a foreign entity.

This is a FARA charge that was first used with Robert Menendez last year.

After his indictment was superseded a second time, he took to the Senate floor to describe how he has balanced criticism with support for the countries alleged to have bribed him, what he called diplomacy. He also argued that the government was trying to criminalize working to bring foreign contracts to New Jersey, something members of Congress do all the time.

But Menendez specifically took aim at that statute, 18 USC 219.

This is an unprecedented allegation. And it has never, ever been levied against a sitting member of Congress. Never. And for good reason.

It opens a dangerous door for the Justice Department to take the normal engagement of members of Congress with a foreign government and to transform those engagements into a charge of being a foreign agent for that government.

I want to address the accusations as they relate to me, but I don’t want you to lose sight of how dangerous this precedent will be to all of you. Let me start by describing my history of taking adverse positions to the government of Egypt. My defense of human rights, democracy, and the rule of law in that country, and my stinging criticism of the violation of human rights, democracy, and rule of law issues in Egypt. One fact is indisputable. Throughout my time in Congress, I have remained steadfast on the side of civil society and human rights defenders in Egypt and everywhere else in the world.

[snip]

Does any of this sound like I was on the take with Egypt? Of course not.

[snip]

But you can’t challenge the leader of an authoritarian state in public and among other members of Congress and take actions adverse to their interests and at the same time serve as an agent of that same foreign government.

Over my 30 years in engaging in foreign policy, I don’t know of any dictator or authoritarian leader who is willing to be publicly chastised, or regards someone who dares to do so, as his agent.

Which brings me to the danger of what the Justice Department has created by charging a sitting member of Congress with acting as a foreign agent.

The relevant FARA statute’s definition of agent is broad. It includes anyone who engages in political activities, publicity services, or other certain acts at the order, the request, or at the direction or control of an agent of a foreign principal. Applied to members of Congress, it covers anything that could in any way influence any official or agency of the United States or any section of the public within the United States as to public policy.

So, when members of the Senate from agricultural states went to Communist Cuba to sell rice or poultry or sugar or beef, and were told by the Castro regime they would consider doing so, but the Senators had to convince the US Administration to change US law and lift the embargo and permit credit to take place for such sales, and then came back to the United States and advocated for exactly that request, would that make them a foreign agent of Cuba? I think not.

[Reviews advocating for Iron Dome after a trip to Israel, advocating for Abraham Accords and civilian nuclear program and technology transfers after a trip to Saudi Arabia]

For the government, the sky is the limit if they want to pursue you.

Menendez went on to claim that DOJ’s allegations of giving of cash and gold bars were sensationalized, and that he would explain the real source of them.

It is a fair point, that often members of Congress will advocate for policies that either benefit their states or seem like sound policy even as those same policies may benefit a foreign power.

That said, Menendez did not, here, address the allegation that he gave sensitive information to Egypt and he spun his advocacy for Wael Hana to retain the halal contract for Egypt as someone protecting business in his district.

But he is right that, thus far, the government has not directly tied the cash and gold bars to specific official acts (and its claims about the purpose of the gold bars has evolved with each superseding indictment).

At least on their face, however, the allegations against Cuellar are more straightforward than those against Menendez, because in Cuellar’s case, there were contracts and efforts to create middlemen, contracts that Cuellar reviewed personally. A lot will depend, in the Cuellar case, on the government’s proof that Imelda did nothing in exchange for her contracts, something of which the government is only beginning to provide proof in the Menendez case (and because Menendez’ spouse Nadine is facing some kind of health crisis, she has been severed from the other defendants; her conduct will be presented as second-hand proof when the Menendez trial starts next week).

Menendez challenged the 219 charge against him, arguing that it put a jury in charge of evaluating advocacy that (Menendez argued) should be protected under Speech and Debate. In his challenge Menendez showed how quickly certain stances — advocating for the end to the embargo on Cuba, doing whatever Bibi Netanyahu asks, or funding Ukraine — could become retaliatory cudgels.

It is hard to imagine a criminal prosecution that is more flatly foreclosed by the Speech or Debate Clause.

To appreciate why, some background on FARA is needed. For most Americans, FARA is a disclosure statute: It requires those who meet its definition of “agent of a foreign principal” to register with the Department of Justice. FARA works differently for “public officials,” however, including “Member[s] of Congress.” 18 U.S.C. § 219(c). For them, FARA is not a disclosure obligation, but a criminal prohibition; it is a felony if any public official “is or acts” as an agent of a foreign principal. Id. § 219(a).

As to Members of Congress, the FARA analysis therefore turns exclusively on whether the legislator has acted as a foreign agent. And the definition of “agent” is broad: It includes anyone who (i) engages in “political activities,” “publicity” services, or certain other acts, (ii) “at the order, request, or under the direction or control, of a foreign principal.” 22 U.S.C. § 611(c)(1). The first element sweeps in most of what legislators do: Political activities include anything that will “in any way influence” the government or the public with respect to “domestic or foreign policies” or “the political or public interests, policies, or relations of a government of a foreign country.” Id. § 611(o). The second element, moreover, is so far-reaching that not even a “common law agency” relationship is required to satisfy its terms. Att’y Gen. of U.S. v. Irish N. Aid Comm., 668 F.2d 159, 161 (2d Cir. 1982).

As these elements reflect, § 219 thus operates differently than bribery statutes. The latter proscribe corrupt agreements by public officials. That is why it is possible to prosecute Members of Congress for agreeing to sell legislative acts, without proving or otherwise calling into question those acts themselves. Brewster, 408 U.S. at 526. By contrast, FARA targets actions. See 18 U.S.C. § 219(a) (prohibiting “act[ing]” as agent of a foreign principal). And if those action are legislative in nature, they are immunized as Speech or Debate.

[snip]

The Speech or Debate Clause forecloses the FARA count in this case. But there is a more fundamental constitutional problem with applying § 219 to any Member of Congress—which is perhaps why this has never before been done. For the Executive Branch to accuse an Article I legislator of a crime based on the way he performs his constitutional duties is an affront to the separation of powers and an infringement on the First Amendment. One branch cannot superintend another, let alone its advocacy, without posing serious dangers to the proper functioning of our democracy.

[snip]

Indeed, it takes little imagination to see what winds the government is sowing. Suppose a senator comes back from Israel, and says he will support whatever aid Prime Minister Netanyahu seeks. When he does so, is that at the “order” or “request” of a foreign power? Does it matter whether he would vote that way anyway? Is this really a question for a jury at trial? Now layer on top the risk of selective prosecution. Envision a future President hostile to Ukraine. Under § 219, that President could prosecute any legislative thorn in his side by charging a FARA violation for having promoted military aid at the behest of President Zelenskyy. As this case reveals, an indictment alone wreaks enormous political damage. This threat would produce a deep chill across Congress, freezing the ability of legislators to execute their functions. That is incompatible with our constitutional structure.

Judge Sidney Stein rejected the argument, because Congress itself applied Section 219 to itself and because Section 219 does not limit any constitutional power of Congress.

Menendez moves to dismiss Count Four based on a separation of powers argument. His central claim is that Section 219 violates the Constitution’s separation of powers doctrine when applied to Members of Congress by “delegating to the Executive and Judiciary the power to supervise the daily functioning of the Legislative.” (ECF No. 176 at 41.) According to Menendez, FARA’s language is broad enough to encompass nearly all activities of the Legislative Branch, so long as those activities are at the “order” or “request” of a foreign principal. Therefore, Menendez continues, Section 219 effectively—and impermissibly—tasks the Executive Branch and the Judiciary with supervising and prosecuting the day-to-day activities of legislators. Menendez emphasizes that this creates a significant risk of abuse by the Executive. For example, if Section 219 is applicable to Members of Congress, “a President could prosecute any legislative thorn in his side by charging a FARA violation for having promoted military aid at the behest” of the President of Ukraine (ECF No. 176 at 40), or could prosecute “the House Speaker for advocating a standalone aid-to-Israel bill at the request of Prime Minister Netanyahu.” (ECF No. 187 at 39.) Menendez urges that, under Section 219, “the only thing standing between a Senator on the Foreign Relations Committee and federal prison is a jury finding that he listened to one of the many foreign ‘requests’ or ‘directions’ that he hears out all the time.” (ECF No. 187 at 36.) This supervision of Congress by the Executive Branch, he contends, violates the Constitution’s separation of powers.

However, it is Congress itself that enacted Section 219, and explicitly provided in that statute that it applies to its Members as follows: “For the purpose of this section, ‘public official’ means Member of Congress.” 18 U.S.C. § 219(c). In other words, Congress specifically decided that its Members should be prohibited from acting as foreign agents and, if they do, should be fined or imprisoned. Indeed, far from being “an affront to congressional autonomy” (ECF No. 187 at 39), the decision to impose criminal sanctions on its Members who act as foreign agents was an expression of congressional autonomy. Moreover, while Section 219 may create an opportunity for abuse by the Executive, that risk is substantially mitigated by the fact that the Legislative Branch is uniquely positioned to amend the statute and exempt Members of Congress if it so chooses.

[snip]

[A]s in Rose and Menendez, Congress here has passed a law with a certain requirement for its Members—not to act as agents of a foreign government—and has explicitly empowered the Executive Branch to enforce that prohibition. And, as in Rose and Myers, the risks that any congressional work will be impaired or of presidential abuse are significantly mitigated by the fact that Congress can always amend the statute if it so chooses. These cases strongly support the Government’s position that enforcement of Section 219 against a Member of Congress is not barred by the separation of powers doctrine.

Again, I think Menendez’ case is at least more amorphous than Cuellar’s. It is, for example, easier to see how Menendez took actions that would benefit a businessperson in his district, though even Cuellar will be able to arguing that Azerbaijan was a crucial partner in the war on terror and that easy banking with Mexico is critical to his Laredo constituents.

I’m not saying DOJ is wrong to crack down when the spouses of members of Congress take payments from foreign countries directly affected by the policy choices their spouses make; they probably should be cracking down on such sham contracts more generally.

But DOJ is doing something new with these 219 prosecutions. We’ll see more clearly how that works in practice as Menendez goes on trial.

Three Things: No News Isn’t Good News

April 10, 2024/192 Comments/in Congress, Foreign Influence, Media /by Rayne

[NB: check the byline, thanks. /~Rayne]

This last several weeks have made the media look really bad. You’d think after several key stories broke there’d be more and deeper coverage but nope.

U.S. media, Congress, and the citizens who elected them each own some of the media fail. Why aren’t we demanding more protection of our personal data in order to protect our democracy?

~ 3 ~

The New York Times published a story on March 28 about the acquisition of the former LIFE magazine assets and the defunct magazine’s resuscitation.

Life Magazine Will Come Back to, Well, Life
The investor Josh Kushner and his wife, Karlie Kloss, have struck a deal with Barry Diller’s media company to revive it as a regular print title.
By Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni

Nowhere in this puff piece a mere 404-words long written by at least one of seven contributors on this byline mention that Josh Kushner is Jared Kushner’s brother.

Nowhere in this heavily-laden beat sweetener is it mentioned that Josh and Jared share ownership of a problematic real estate management company, and that both met with Saudi and Qatari officials during the Trump administration.

Nowhere in this fluff is financing mentioned. Apparently it never occurred to one or more of seven journalists to ask if brother Jared contributed financing or guidance in any way.

We, the readers, are apparently supposed be very happy an attractive model and her now-billionaire spouse are reviving an old American media institution. We’re supposed to assume Kushner and Kloss are wholly financing this project out of their own pockets through their Bedford Media holding out of an appreciation for LIFE.

Why ever would we want to know more? As if we’d expect news from NYT.

~ 2 ~

It’s as if the Ronna McDaniel scandal never happened. There’s been no reported news about her since NBC canned her after MSNBC personalities protested her hiring on air.

I’ve been watching for any news about separation from Creative Artists Agency, who dropped her the same time she was terminated at MSNBC. CAA didn’t keep her on, as if they felt there was no hope of future contracts for her at all, even with right-wing news media.

Nada, not a word has emerged about CAA’s rejection. Just a spattering of op-eds in favor or against McDaniel’s separation from NBC.

One thing which has gone utterly unnoticed by journalists covering U.S. politics and media: a French conglomerate acquired majority interest in CAA last September, with two other foreign firms retaining substantive interest in the firm.

The Pinault Group closed on the deal while Singapore-based Temasek and Shanghai-based CMC Capital retain minority interests.

There are plenty of reasons for McDaniel to have lost her gig on NBC as well as her representation by CAA, like being an unindicted co-conspirator in Trump’s effort to defraud the U.S. and deny U.S. voters their civil rights.

But it doesn’t hurt to ask if foreign interests played a role in her representation or loss thereof. Perhaps a French-owned company doesn’t care to keep a talent who supported a NATO-undermining former president’s attempt to overthrow the U.S. government.

~ 1 ~

For decades there have been restrictions on foreign ownership of broadcast media. It’s about time we began to ask why we don’t have similar restrictions on social media, when social media has become a primary source for news in the U.S. for nearly half of Americans.

Twitter’s acquisition by Elon Musk, funded substantially by foreign interests, is one example. Since its sale, the former Twitter has become one of if not the largest source of misinformation and disinformation in U.S. media consumption. It’s difficult not to assume this is the reason Musk’s financial backers ponied up the money for an otherwise money-losing business.

Grindr, a social media platform for gay and bisexual men, and transgender people, was launched in the US in 2009. A majority interest was sold to a Chinese gaming company, Kunlun Tech Co. Ltd. in January 2016. Kunlun sought a buyer for Grindr after Committee on Foreign Investment in the United States (CFIUS) notified Kunlun in March 2019 its foreign ownership of Grindr posed a national security threat.

Now many are watching stock price vacillations for Donald Trump’s Truth Social social media platform, owned by Trump Media & Technology Group Corp. (TMTG), the entity which succeeded the former special-acquisition corporation Digital World Acquisition Corp. (DWAC). DWAC had been associated with Chinese-owned ARC Capital and China Yunhong Holdings, both of which had some role in financing DWAC.

TMTG has been under investigation by the Department of Justice since 2022 for possible money laundering after TMTG had received a loan from Paxum Bank, partially owned by Russian Anton Postolnikov. It’s not clear why TMTG was able to list on a U.S. stock market exchange given the possibility this loan may have violated sanctions against Russian interests.

TikTok is owned by a Chinese firm and its users’ data is stored in China. It’s not the content but the location and control of U.S. users’ data which is and has been most problematic, though it’s easy for TikTok’s Chinese parent to manipulate what U.S. users will see including misinformation and disinformation. Trump’s former Treasury Secretary Steve Mnuchin has been trying to pull together a consortium to buy TikTok, but TikTok may have no interest in selling out, and it’s not clear if Mnuchin will end up seeking more foreign investors as Elon Musk did.

If Mnuchin – who met with Middle Eastern leaders during his stint as Treasury Secretary and departed with $1 billion in Saudi cash for his Liberty Strategic Capital fund — manages to pull off buying TikTok, what will he do with users’ data since the future business model is unclear at this time. Will he sell it to offshore buyers including hostile nation-states since there are few restrictions now preventing such sales? TikTok would be as much of threat under such a business model as it is now.

We need federal legislation to regulate not only users’ data privacy – all social media created by U.S. users should be kept inside the U.S. – but to limit control of social media firms by foreign owners, especially hostile nation-states.

Why was Grindr, of all the social media platforms which have been sold in whole or part to overseas parties, the one which drew attention from CFIUS? Especially after Twitter had been infiltrated by multiple Saudi spies, one of which were prosecuted before Musk made an offer to buy the platform? What foreign spies now have access to U.S. citizens and users’ personal data after Musk shit canned so many of Twitter’s pre-acquisition personnel?

This isn’t a First Amendment issue. It’s regulation of commerce, and commerce conducted inside the U.S. relying on U.S. citizens and residents as consumers and data sources shouldn’t pose a threat to national security.

~ 0 ~

This is an open thread. In addition to media criticism, bring your stray cat and dog topics here.

Weekly Nicole Sandler Podcast Appearance

January 8, 2024/44 Comments/in Foreign Influence /by emptywheel

In one of our threads, someone said they had not seen my weekly podcast appearance with Nicole Sandler. Which made me realize that I should start posting them. Here is Friday’s.

Rebuttals to Eric Trump’s Talking Points about His Daddy’s Corruption

January 5, 2024/65 Comments/in 2016 Presidential Election, Foreign Influence, Hunter Biden /by emptywheel

Yesterday, the Oversight Democrats released a report showing the fraction of foreign payments Donald Trump accepted from foreign governments while President that they were able to document before James Comer helped Trump cover it all up. The topline result is that while President, Trump was known to have received over $7 million from foreign entities, of which $5.5 came from China.

As I’ll show below, that’s a very partial number, but by itself it says that Trump made as much from foreign governments while President as the entirety of the funds that James Comer has spent a year lying about with respect to private citizen Hunter Biden over a longer period of time.

It’s not Hunter Biden who has been on the foreign take. It’s Donald Trump. And while this report mentions that Trump is basically an employee of Mohammed bin Salman through his LIV Golf relationship, that funding, and a number of other foreign payments Trump and his Oval Office employee family members received is not reflected in the topline of this report.

Thanks to some of my best trolls, I’ve had a flood of stupid MAGAts repeating the talking points fed them to make them comfortable with the fact that Donny was effectively for sale to a slew of foreign governments. So I wanted to talk about how silly those excuses for selling access are.

Start with Eric Trump’s supposed rebuttal, a claim that Trump Organization donated their foreign profits to the US Treasury.

First, Trump Org only did this for a subset of their properties.

[T]he policy substantially limited the scope of “profits” it covered to those (1) “generated from foreign governments’ patronage from wholly-owned Properties,” and (2) “generated from management fees earned from managed hotels and condominium-hotels attributed to foreign governments’ patronage.”71 By excluding non-wholly owned and non-hotel Trump properties, the policy omitted potentially significant sums from the already truncated category of emoluments that it covered. For example, this report identifies more than $1 million in foreign emoluments paid to Trump World Tower in New York which fall outside the scope of The Trump Organization’s policy.

But even ignoring Trump Organization’s famously dodgy accounting, it’s not enough to donate profits. That’s because the revenues permitted Trump to have a DC-based influence peddling shop.

Revenues paid to Trump International DC (which most trolls appear not to understand Trump leased the Old Post Office only from 2016 until 2022; it was not a pre-existing hotel that just happened to become inconvenient when Trump became President) effectively provided Trump a way to have foreign governments pay lease to the US government for a private influence peddling location for him during his Administration, which he then sold for a tidy profit.

A review of financial documents regarding the Trump International Hotel in Washington, D.C., provided by the General Services Administration (GSA) revealed that while President Trump claimed on required financial disclosures that he made $156 million in employment income from the hotel between 2016 and 2020, the hotel in fact lost more than $73 million during this period.74 Reflecting the serious financial problems at the Trump International Hotel in Washington, D.C., annual financial statements obtained by the Committee also reveal that one of President Trump’s holding companies, DJT Holdings LLC, injected tens of millions of dollars into the Trump International Hotel as loans, the vast majority of which were never repaid and were later converted to capital contributions. The hotel’s significant losses were due in part to the hotel’s fixed costs, including general and administrative expenses, sales and marketing expenses, and property operations and maintenance.75 Given that the hotel was operating at a significant loss, foreign government revenue would have helped to cover a portion of these fixed costs, even if alleged “profits” were donated.

Plus, there’s no transparency to how Trump Org decided something was a foreign payment. The report notes that Mazars had no accounting for what qualified as foreign payments — meaning, however Trump Org made this calculation, they didn’t share it with their accountants.

Mazars also indicated that it had no specific accounting of foreign government spending at Trump-owned properties. This is stunning in light of former President Trump’s pledge that Trump hotel properties would donate “all profits from foreign government payments” to the U.S. Treasury and the policy announced by The Trump Organization purportedly intended to effectuate that pledge.

And for the things that Oversight did get paperwork for, there were clear discrepancies. The Mazars documentation doesn’t cover all the known foreign spending at Trump International, for example.

Last Congress, based on records provided by GSA, former Committee Chairwoman Maloney estimated that total foreign government payments to just the Trump International Hotel in Washington, D.C., from 2017 through 2019 would have been $3,787,485.117 This estimate was based on the hotel’s representations that, for these three years, it had identified $355,687 in foreign government profits (which it had remitted to DJT Holdings LLC, another Trump-owned entity; which DJT Holdings LLC had remitted to the Trump Corporation; and which the Trump Corporation in turn had “donated” to the U.S. Treasury on behalf of The Trump Organization).118 However, only a fraction of this foreign government spending at the Trump International Hotel in Washington, D.C., is reflected in the documents provided by Mazars and discussed in this report.

Of particular concern, Mazars didn’t turn over guest ledgers for Trump’s Inauguration, a period when the hotel was wildly inflating prices and hosting any number of foreign visitors.

Also, James Comer intervened in Mazars’ compliance before they had provided “any documents relating to Russia, South Korea, South Africa, and Brazil.”

There are other big gaps. For example, Mazars didn’t turn over any documentation of other properties that hosted significant numbers of foreign visitors.

Mazars also did not provide any ledgers before the subpoena was terminated for properties which reportedly received a large number of foreign government visitors, including: Trump Turnberry Hotel and Resort in Scotland; Trump International Hotel and Tower in Chicago, Illinois; and Trump International Hotel in New York, New York.

And Mazars didn’t provide any documentation pertaining to 80% of Trump’s properties.

The Committee did not receive from Mazars any documents regarding at least 80% of Donald Trump’s business entities. For many other entities, Mazars produced only a single document.

Finally there were two specific expenses that Mazars claimed to have no record of. Mazars claimed to have no do documentation of ICBC’s nearly two-million dollar a year lease in Trump Tower.

Counsel for Mazars informed the Committee that following a comprehensive search of its records, the firm identified no responsive documents in its database relating to the “Industrial and Commercial Bank of China” or “ICBC.” The absence of these records from Mazars’s files raises troubling concerns about The Trump Organization’s candor with its accounting firm.179

As noted above, this was included in the report, based on other publicly available sources.

Mazars similarly claimed to have no documentation of a $20 million loan from Daewoo.

Spreadsheets prepared by Jeffrey McConney, The Trump Organization’s former controller, reflect that former President Trump’s “LOANS PAYABLE” included a loan for $19,760,000 owed to “L/P Daewoo” as of June 30, 2015.113 This loan remained outstanding until Daewoo was “bought out of its position on July 5, 2017.”114 Critically, as Forbes reported: “Although the debt appeared on The Trump Organization’s internal paperwork, it did not show up on Trump’s public financial disclosure reports, documents he was required to submit to federal officials while running for president and after taking office.”115 Yet Mazars informed the Committee’s Democratic staff it had no records to produce regarding the Daewoo loan.

I believe this payment was not included in this report. But its an instance where Trump’s disclosures covered up a key financial tie.

Finally, there are a number of things that this report did not include in its top line conclusion. Along with the LIV partnership mentioned above, Jared Kushner’s financial entanglements, and Ivanka’s trademarks, this report didn’t include Huwaei or CEFC in its emoluments accounting.

Finally, the documents provided by Mazars also record expenditures at Trump-owned properties by two Chinese companies that are closely aligned with the P.R.C.: Huawei; and Hongkong Huaxin Petroleum Unlimited, a subsidiary of CEFC China Energy (CEFC). While the government of the P.R.C. has been linked with both Huawei and CEFC, given the opacity and convoluted ownership and financing arrangements of these companies, this report does not classify their expenditures among the emoluments paid by the P.R.C. to Trump-owned businesses. However, the receipt by former President Trump’s businesses of expenditures from these entities while Mr. Trump was in office created conflicts of interest.

The Huawei payment (for a conference in Las Vegas) was minor, but CEFC maintained a property in Trump Tower for the entirety of Trump’s term.

In 2012, Hong Kong Huaxin Petroleum Company Limited—a wholly owned subsidiary of CEFC—bought an apartment in Trump World Tower for $5.25 million dollars.235 Hong Kong Huaxin Petroleum Company Limited maintained this property throughout the Trump presidency.236 Records provided to the Committee by Mazars and court documents indicate that Hong Kong Huaxin Petroleum Limited paid a standard common charge of $3,177.20 every month in 2018.237 CEFC listed its apartment at Trump World Tower for sale on October 20, 2020.238 On January 26, 2022, CEFC sold the unit to an anonymous LLC named “845UN 78B LLC” for $4.625 million.239

Assuming that the base charges did not change during the four years of the Trump presidency, Hong Kong Huaxin Petroleum Limited paid Trump World Tower at least $152,505 during the four years of the Trump presidency.240

James Comer has falsely claimed that because Joe Biden’s brother and son paid back personal loans to the then ex-VP with money they were paid by CEFC-associated businesses, it amounts to being paid by CEFC directly (again, during a period when Biden was a private citizen). But meanwhile, by halting Mazars’ compliance with a Congressional subpoena before it was done, Comer may, himself, be covering up details of Trump’s own payments from CEFC-related funds.

In Rudy Giuliani Affidavit, SDNY Hung Up the Perfect Phone Call

January 4, 2024/77 Comments/in 2020 Presidential Election, emptywheel, Foreign Influence, Hunter Biden /by emptywheel

Consider this: The April 21, 2021 warrant affidavit showing probable cause for the search of Rudy Giuliani’s home, office, and devices did not mention the Perfect Phone Call between Donald Trump and Volodymyr Zelenskyy.

It could have done so. Earlier warrant affidavits targeting Lev Parnas and Igor Fruman, starting with a bunch obtained on October 21, 2019, included it.

On July 25, 2019, President Trump spoke to Ukrainian President [Zelenskyy]. According to a memorandum of the call, which the White House released publicly, President Trump noted that “[t]he former ambassador from the United States, the woman, was bad news and the people she was dealing with in the Ukraine were bad news.” He also praised a “very good prosecutor,” which appears to be a reference to [Lutsenko,] who was still in place at that time following [Zelenskyy’s] election but subsequently removed from office, or possibly [Shokin,] the former prosecutor.

While SDNY did not release the affidavit for a December 10, 2019 warrant focused exclusively on the Foreign Agent charges, this same reference did appear in an affidavit to obtain the contents of Lev Parnas’ Instagram account the same day.

In context of the potential FARA charges tied exclusively to the firing of Marie Yovanovitch, the paragraph showed that Trump had been persuaded by Rudy Giuliani’s lobbying not just that Yovanovitch “was bad news,” but that the prosecutors behind the effort to oust her, Yuriy Lutsenko and/or Viktor Shokin, were “very good.”

Moreover, the paragraph is particularly relevant evidence in the affidavit targeting Rudy. Far more specifically than the (much earlier) affidavits targeting Lev Parnas, the Rudy affidavit describes that Rudy lobbied Trump to fire Yovanovitch at least three times (the affidavit clearly identifies two instances: once on February 16, 2019, and again on March 22) and lobbied Mike Pompeo at least twice (once on February 8 and again when the White House forwarded his packet of disinformation in March) before he and Parnas turned to a press campaign involving John Solomon to get her ousted.

Yet the only public affidavit targeting Rudy, unlike several targeting Lev Parnas, excluded the paragraph showing the extent of Rudy’s influence.

There may be a perfectly banal explanation, such as an attempt, relatively early in Merrick Garland’s tenure, to minimize the extent to which this was about Trump personally. Or, the Perfect Phone Call might embody some of the uncertainty, noted explicitly in the affidavit, about whether Rudy was targeting Yovanovitch to get contracts with Lutsenko, or whether he was doing it only to get disinformation, to benefit Trump, on Hunter Biden. Given the high likelihood that data seized in this search was also used in other, undisclosed investigations into Rudy — DOJ may not yet have had a January 6 warrant targeting Rudy, but in June 2021, DOJ took overt steps in the investigation into an anti-Hunter Biden film that Rudy plotted — the silence about the Perfect Phone Call may simply reflect the boundary line between investigative prongs. That is, maybe the Perfect Phone Call appears in another affidavit.

The anti-Hunter film was, reportedly, an investigation into possible foreign support. As this table, which compares the scope of investigation in three warrants for substantially the same Foreign Agent investigation, shows, the funding of Rudy’s shenanigans shifted focus over the course of the investigation.

The warrants include:

October 21, 2019, 19 MJ 9832, obtained days after Parnas’ arrest, as SDNY obtained warrants to expand the scope of the investigation to incorporate its expanding Foreign Agent focus
December 10, 2019, 19 MJ 11500, obtained days after Rudy met with Andrii Derkach, which would have been a natural follow-on investigation to the Parnas investigation, but which Barr moved to EDNY to protect Rudy’s ability to solicit dirt from Russian agents to help Trump’s 2020 campaign
April 21, 2021, 21 MJ 4335, obtained on Lisa Monaco’s first day as Deputy Attorney General, when SDNY finally obtained approval for warrants targeting Rudy’s home and devices

In October 2019, DOJ wasn’t looking closely at how the Ukraine caper was funded. In December 2019, it made up two bullets of the warrants, permitting the seizure of:

Evidence of any funds sent into any account controlled by or associated with [redacted] or Giuliani, or any instructions to send such funds. (c)
Evidence of money, actions, or information requested by, or offered or provided to Parnas, Fruman, Giuliani, or [Toensing] by any Ukrainian national in connection with efforts to remove [Yovanovitch], including but not limited to any Ukrainian investigation of [Burisma Holdings] Ltd., [Hunter Biden], or potential interference in the 2016 U.S. presidential election. (e)

That December 2019 focus on funding may have reflected details about Lev Parnas that SDNY had only just discovered. In an unsuccessful bid to have Parnas detained pretrial submitted the day after DOJ obtained that December 10 warrant targeting Lev Parnas, SDNY laid out what it had learned about the funding of the Ukraine caper.

Parnas poses a significant risk of flight for several reasons, the chief among which are his considerable ties abroad and access to seemingly limitless sources of foreign funding. Parnas has extensive and significant international ties, particularly in Ukraine, the country of his birth. Over the past two years, Parnas traveled repeatedly to Ukraine, and met with numerous Ukrainian government officials, including officials at the very highest level of government. More broadly, Parnas has traveled abroad more than twenty times over the past four years, including on a nearly monthly basis in 2019. Parnas took circuitous travel routes that obscured his final destination, such as by departing the U.S. for one country, but returning from a different country on a different airline. Parnas traveled internationally by private jet as recently as this year; bank account records from Account-1 show that Parnas spent more than $70,000 on private air travel in September 2019 alone.

[snip]

In addition, Parnas’s close ties abroad include connections to Russian and Ukrainian nationals of nearly limitless means, including [Andrey Muraviev] and a Ukrainian oligarch [Dmitry Firtash] living in Vienna who is currently fighting extradition to this country. Parnas has proven adept at gaining access to foreign funding: in the last three years, Parnas received in excess of $1.5 million from Ukrainian and Russian sources. In sum, given Parnas’s significant, high-level connections to powerful and wealthy Ukrainians and at least one Russian national, he could quickly and easily flee the United States for Ukraine or another foreign country, and recoup the security posted to his bond. It is difficult to overstate the extreme flight risk that Parnas poses.

[snip]

Between August and October 2019, Parnas received $200,000—not $50,000, as he told Pretrial Services—from the Law Firm into Account-1, which was held in Svetlana Parnas’s name, in what appears to be an attempt to ensure that any assets were held in Svetlana’s, rather than Lev’s, name.5 A portion of this money existed in Account-1 at the time that Parnas submitted his financial affidavit, and, to the Government’s knowledge, does so today, underscoring that Parnas continues to mislead the Government and the Court about his financial condition.

Parnas failed to disclose, in describing his income to the Government and Pretrial Services, the fact that in September 2019, he received $1 million from a bank account in Russia into Account-1. While the majority of that money appears to have been used on personal expenses and to purchase a home, as discussed below, some portion of that money existed in Account-1 at the time Parnas submitted his financial affidavit.

At the time of his arrest, Parnas had at least $200,000 in an escrow account, in connection with his intended purchase of a property located in Boca Raton, Florida, which was listed for sale at approximately $4.5 million. The escrow account was funded with $200,000 from Account-1 in September 2019. Parnas did not disclose this asset (either the property or the funds in the escrow account) to either Pretrial Services or the Government. It is unclear whether Parnas proceeded with this real estate purchase or received the funds back from the escrow account.

In an appearance on Michael Cohen’s podcast last month, Parnas addressed how various Ukrainian, Russian, and American oligarchs were funding his and Rudy’s efforts; he says it’ll also appear in his forthcoming book.

The warrant targeting Rudy 17 months later doesn’t reveal what SDNY had learned about the funding in the interim, nor does it sustain the focus on how this was all funded. It states with some certainty that in spite of two rounds of discussions of retainer agreements with Lutsenko and others, Rudy never got any money from them.

Based on my involvement in this investigation and my review of text messages, it appears that Giuliani was referring to the execution of [redaction] retainer agreement and the wiring of funds. However, based on my review of bank records, it does not appear that [redacted] wired funds to Giuliani at that time, or any subsequent time.

As NYT emphasized in their report on these warrants, the later warrant does describe that Rudy needed the money.

6 Based on my review of a financial analysis prepared based on bank records and public reports, it appears that around this time, Giuliani had a financial interest in receiving a retainer agreement from [redacted] Specifically, in May 2018, Giuliani left his former law firm and its substantial compensation package. Based on my review of a financial analysis of bank records that have been collected to date (which may not include all of Giuliani’s checking and credit card accounts), on or around January 25, 2018, Giuliani had approximately $1.2 million cash on hand, and approximately $40,000 in credit card debt. By contrast, on or around January 25, 2019, right before he met with [redacted] Giuliani had approximately $400,000 cash on hand in those same accounts and approximately $110,000 in credit card debt. By on or around February 16, 2019, his account balances had dropped to approximately $288,000 and his credit card debt remained over $110,000.

Perhaps because of what SDNY claimed were Parnas’ efforts to obscure his travel, the December 2019 warrant (for which, remember, it did not release the affidavit) added a bullet point, seemingly an afterthought unmarked by a letter, authorizing seizure of evidence that the men were hiding meetings with Ukrainians.

Evidence of efforts or attempts to conceal meetings with individuals acting on behalf of or associated with any Ukrainian national or government official. (no letter)

By contrast, the April 2021 affidavit targeting Rudy was interested in one single trip: His February 2019 trip, with Parnas, to Warsaw.

Evidence relating to a trip by Rudolph Giuliani to Poland in February 2019.(5)

As the affidavit describes, there was good reason to believe Rudy’s public claims about the trip — made in the days after the Perfect Phone Call was released — were lies, because immediately after the meeting, Rudy drafted a retainer shortly after the meeting and started lobbying Trump and Pompeo.

7 Based on my review of public reporting, I have learned that according to an article published on September 29, 2019 in Reuters, Giuliani admitted that he met [Lutsenko] in Warsaw in February 2019 after first meeting him in New York in January, but that the meeting with [redacted] in Warsaw was “really social . . . I think it was either dinner or cigars after dinner. Not opportune for substantive discussion.” However, this does not appear to be accurate, as described herein, Giuliani circulated a draft retainer agreement between [2 words redacted] and [redacted] (a firm owned by [Toensing] and her husband, [Joe DiGenova]) only five days after meeting with [redacted] and communicated with Parnas and [redacted] about lobbying [Pompeo] and Trump to remove [Yovanovitch] on the same day, and in the days following, his meeting with [redacted].

The reference to Lutsenko in that Reuters story is minor; far more of the story focuses on who paid for Rudy’s galivanting — again, a topic dropped in the later known warrant.

One of the key questions is who financed Giuliani’s globe-trotting as he pursued unsubstantiated allegations that Biden had tried to fire Ukraine’s then chief prosecutor, Viktor Shokin, to stop him investigating an energy company on which his son Hunter served as a director.

“Nobody pays my expenses,” Giuliani said in an interview with Reuters on Friday. “What does it matter if I’m getting paid for it. Isn’t the real story whether he (Biden) sold out the vice presidency of the United States, not whether I got paid for it?”

The singular focus on that Warsaw meeting — a meeting that took place at an event designed to undermine Obama’s Iran Deal, which Rudy attended in conjunction with MEK (former NJ Senator, Robert Torricelli, with whom John Solomon has a past, also attended with MEK) — is all the more interesting given the temporal scope of the warrant.

The other two warrants I adress here were dictated by dates of collection. Because the October 21 warrant authorized an expanded search of materials obtained months earlier, its temporal scope necessarily ended at the collection date, May 16, 2019. Because the December 10 warrant authorized an expanded search of materials seized from the search of Parnas and Fruman’s residences (primarily Parnas’ — by this point, SDNY seemed to be scrutinizing Parnas far more closely than it did Fruman), its temporal scope necessarily ended on that collection date, October 9, 2019.

But the Rudy warrant extended long past the last overt act, the firing of Yovanovitch, described in the warrant, to December 31, 2019. Here’s how the FBI justified that:

To the extent materials are dated, this warrant is limited to materials created, modified, sent, or received between August 1, 2018, and December 31, 2019. Materials going back to approximately August 2018 are relevant to understand Giuliani’s relationship with Parnas and information he was provided in the fall of 2018 relating to, among other things, Ambassador [Yovanovitch] and Ukraine. Materials created, modified, sent, or received after approximately May 2019, when the Ambassador was removed from her post, through the end of December 2019, during which time Giuliani traveled to Europe to meet [Lutsenko] with are relevant because based on my review of the Prior Search Warrant Returns, it appears that Giuliani continued to make public statements about Ukraine and the Ambassador.

Thus, it rationalized extending the warrant’s temporal scope through December 2019 — a temporal scope that would include the trip for the anti-Hunter Biden documentary, on which Rudy again met Lutsenko, but also met known Russian asset Andrii Derkach and others who would later be deemed Russian assets — based on Rudy’s continued focus, vaguely, on Ukraine (as well as Yovanovitch).

But it’s not clear whether FBI would be able to access details of Rudy’s meeting with Derkach, as opposed to Lutsenko, with this warrant. The long redaction in this bullet point shields who else, in addition to Parnas and Lutsenko, was included in the scope of the known warrant.

In other words, though the temporal scope of the warrant would permit FBI to review information about Rudy’s later meetings with Lutsenko, in association with which trip Rudy also met a series of Russian assets, nothing unredacted in the warrant permitted FBI to seize information about that later meeting (or about the anti-Hunter Biden documentary).

For that matter, nothing unredacted in the April 2021 warrant explicitly permits the FBI to seize information about Rudy’s attempts to dig up disinformation targeting Hunter Biden and his father, even though the warrant affidavit likely mentions such efforts at more than twelve times (one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve).

Still, as I’ve noted repeatedly, by the time Judge Oetken approved the Special Master process that Rudy himself had demanded, Special Master Barbara Jones was instructed to review all content post-dating January 1, 2018, a temporal scope significantly broader than the one laid out in the warrant. And according to her reports, while for some devices she focused more nearly on the timeframe of the Ukraine caper, those she reviewed first, she reviewed through the date of seizure.

We still know just a fraction of the story about how Bill Barr obstructed the investigation into Rudy Giuliani’s Ukrainian influence peddling — and the degree to which that let Rudy get rid of phones before the investigation would have otherwise developed (for example, the warrant describes that Rudy replaced a phone used with his main phone number on the date the House started subpoenaing records in advance of impeachment). That is, even though SDNY took aggressive investigative steps on Lisa Monaco’s first day as Deputy Attorney General, it was likely already too late.

Update: Back in real time, I posited that the first time Rudy pitched Mike Pompeo on firing Marie Yovanovitch was done while in Trump’s presence.

Timeline

Below, every bullet is a known warrant. The ones not linked were described in a passage that failed to be fully redacted in a Lev Parnas filing.

January 18, 2019, 19 MJ 1729: Yahoo and Google content

May 15, 2019: Marie Yovanovitch firing public

May 16, 2019, 19 MJ 4784: iCloud content
August 14, 2019, 19 MJ 7593: Yahoo and Google content since January, with expanded focus
August 14, 2019, 19 MJ 7594: Unknown warrant
August 14, 2019, 19 MJ 7595: Existing Yahoo and Google content, with expanded focus

September 25, 2019: Disclosure of Perfect Phone call

October 9, 2019: Lev Parnas and Igor Fruman arrested

October 17, 2019, 19 MJ 7595: Actual authorization of the warrant approved in August
October 21, 2019, 19 MJ 9829: iCloud content since May
October 21, 2019, 19 MJ 9830: Unknown warrant
October 21, 2019, 19 MJ 9831: Devices from Dulles
October 21, 2019, 19 MJ 9832: Existing iCloud content for expanded focus
November 4, 2019: Warrant for Rudy’s iCloud
November 4, 2019: Warrant for Rudy’s email
November 4, 2019: Warrant for Victoria Toensing’s iCloud
November 6, 2019: Warrant for Yuriy Lutsenko’s email

December 5, 2019: Rudy meets with known Russian asset, Andrii Derkach

December 10, 2019, 19 MJ 11500: Stuff seized from residences for foreign agent focus
December 10, 2019, 19 MJ 11501: Instagram
December 10, 2019, Warrant for Roman Nasirov’s email
December 13, 2019, Warrant for Victoria Toensing’s email

December 14, 2019: Barr aide texts him: “Laptop on way to you”

January 3, 2020: Barr establishes dedicated channel to ingest Rudy’s dirt

January 17, 2020: Jeffrey Rosen makes Richard Donoghue a gatekeeper for all Ukraine-related investigations

February 28, 2020: iPhone of Alexander Levin
March 3, 2020: iPad of Alexander Levin
March 20, 2020, 20 MJ 3074: Fruman iCloud content obtained with October 21, 2019 warrant to cover earlier periods

June 20, 2020: Barr fires Geoffrey Berman

November 2020: SDNY denied authority to seek devices of Rudy Giuliani

January 2021: SDNY denied authority to seek devices of Rudy Giuliani

April 13, 2021: Cell site data for Rudy and Toensing

April 21, 2021: Lisa Monaco sworn in

April 21, 2021, 21 MJ 4335: Rudy’s office, residence, and devices
April 21, 2021: Victoria Toensing iPhone

Rudy’s Seized Devices Were More Useful for Investigating January 6 than Marie Yovanovitch’s Firing

December 21, 2023/39 Comments/in 2020 Presidential Election, Foreign Influence, Impeachment, January 6 Insurrection /by emptywheel

On April 28, 2021, the FBI seized up to 18 devices from Rudy Giuliani. On Tuesday, DOJ unsealed the affidavit behind that seizure.

The affidavit, read in conjunction with Barbara Jones’ Special Master reports, Rudy’s privilege log from the Ruby Freeman lawsuit, and a filing he submitted in that suit provide abundant evidence that the devices FBI seized on April 28, 2021 were more useful for investigating January 6 than any suspected FARA violations involved in the firing of Marie Yovanovitch.

And this goes well beyond Robert Costello’s claim that a number of the devices seized from Rudy were corrupted.

The affidavit, as written, was narrow: it only covered FARA violations tied to the role of Yuriy Lutsenko and other Ukranians in the firing of Ambassador Yovanovitch in spring 2019. While there is evidence cited in the affidavit from a broad period of time (for example, describing Rudy’s public admissions that he did certain things in early 2019 later that year), the last overt act described in the affidavit is of someone — probably Victoria Toensing — texting Rudy on May 9, 2019, complaining that people were asking about whether she had registered under FARA and denying that she had a client.

Remarkably, then, the affidavit asked for — and Judge Paul Oetken authorized — the authority to seize “any and all” devices at Rudy’s office and home almost two years after that last overt act.

Judge Oetken authorized that search and seizure even though one of the phones described in the affidavit — an Apple iPhone X that Rudy first started using on January 20, 2021 — could not possibly have been used in the suspected crime described in the affidavit. And three more of the devices described in it, including another iPhone, were only put in use later in 2019.

I’ve long argued that by September 2021, DOJ at least contemplated obtaining other warrants to access that content (because SDNY successfully argued to do the privilege review on all content that post-dated January 1, 2018). But given the scope of those devices, it looks likely that there was at least one other affidavit presented to Oetken in April 2021, one that would justify seizing those later devices.

This table shows (on the vertical axis) the devices that Rudy says were seized and (on the horizontal axis) the devices that FBI thought they’d find.

While Rudy’s own description of these devices (including the model number of the MacBook used in planning January 6, here listed as A22251) is as unreliable as everything else about him, the FBI didn’t find the two iPhone Xes — one used between January 8, 2018 and August 13, 2019, the other used between April 5 2018 and August 27, 2019, both marked in yellow above — that would have been Rudy’s primary phones during the events described in the affidavit.

Just three devices — two iPads and one iPhone 11 — clearly match the description of what the FBI expected to find.

All of them were, according to Rudy’s description (marked in the vertical “January 6 column”), among those used in planning January 6.

Whichever iPhone 11 they did find is almost certainly device that Special Master Jones labeled as device 1B05, the privilege review of which she described this way:

I next assigned for review the chats and messages that post-dated January 1, 2018 on Device 1B05, which is a cell phone. There were originally 25,481 such items, which later increased to 25,629 after a technical issue involving document attachments was identified. An initial release of non-designated items was made to the Government’s investigative team on November 11, 2021.1

Of the total documents assigned for review, Mr. Giuliani designated 96 items as privileged and/or highly personal. Of those 96 designated items, I agreed that 40 were privileged, Mr. Giuliani’s counsel withdrew the privilege designation over 19, and I found that 37 were not privileged. I shared these determinations with Mr. Giuliani’s counsel, and they indicated that they would not challenge my determination that the 37 items are not privileged. The 40 privileged documents have been withheld from the Government’s investigative team and the remaining 56 were released on January 19, 2022.

1 Additional non-designated items were released on January 19, 2022.

Those 25,000 chats were easily the most voluminous content turned over from any one device to the FBI. Of all the chats that Rudy attempted to withhold from that phone, he ultimately only succeeded in withholding 40 items. 40 chats or texts out of 25,000 total.

262 items in Rudy’s privilege log come from that phone. Another 127 come from a device, 1B09, also used to text about January 6 (including with Mark Meadows), which — given the date scope — must have been among the first devices Jones reviewed. That’s one possible source of a Ken Chesebro document included in the indictment but not identified in the January 6 Report.

And while Rudy withheld those documents from Ruby Freeman, since Jones only permitted Rudy to withhold 43 items total from DOJ, those must have been deemed non-privileged in the Special Master review. (I’ve noted before that there are easily 40 items that clearly relate to Rudy’s own lawyers.)

They were all turned over to DOJ, for use with whatever investigative teams had obtained warrants to access them, no later than January 21, 2022.

This is one thing Rudy accomplished by defaulting on discovery: Withholding from Ruby Freeman, and therefore from a public trial that would precede Republican primaries, documents that were turned over to DOJ in January 2022.

By April 2021 when — using warrants approved on Lisa Monaco’s first day on the job, but nevertheless a year after Bill Barr started obstructing this investigation — the FBI came looking for devices involved in Rudy’s suspected FARA violations tied to getting Marie Yovanovitch, they didn’t find the devices he would have been using at the time.

They did, however, find three devices on which Rudy planned January 6. And because of the way DOJ did the privilege review on those devices, those records would have been made available to any investigators with a lawful warrant no later than January 21, 2022.

Perjury Trapped: Rudy Giuliani’s Sync Sink

December 20, 2023/27 Comments/in 2020 Presidential Election, Foreign Influence, January 6 Insurrection /by emptywheel

As I noted here, I’m just beginning to go through the warrants from SDNY’s Lev Parnas and Rudy Giuliani investigation the NYT liberated.

I want to start with a very minor point about the apparent inconsistencies between what SDNY found when they conducted searches on Rudy’s cloud and what Rudy claimed — purportedly under penalty of perjury — before Beryl Howell.

In the Ruby Freeman case — the first one, not her renewed suit to enjoin him from continued lies about her — Rudy claimed that he didn’t need to separately search his messaging accounts, because his phones were all synced to his iCloud.

All of my [redacted]@icloud.com iCloud data would have also been included in the TrustPoint data because I synced my iCloud to my devices.

But SDNY, when they searched his iCloud back in 2019, discovered that known messages were not there.

On or about November 4, 2019, the USAO and FBI sought and obtained from the Honorable J. Paul Oetken, United States District Judge for the Southern District of New York, a warrant (the “November 4 Warrant”) for records in iCloud accounts belonging to Giuliani and [Victoria Toensing].

[snip]

As discussed above, on November 4, 2019, the FBI and USAO sought and obtained a search warrant for, among other things, Giuliani’s iCloud account. However, the iCloud did not contain many of the text messages outlined above with Parnas and [Fruman] during the December 2018 to April 2019 time frame. Based on my training and experience, as well as my review of records provided by Apple, I believe the iCloud account did not contain text communications from early 2019 because Giuliani did not backup that content, or removed it from the backup, and not because it does not exist. Indeed, for the reasons set forth below, including Giuliani’s public statement that he has retained potentially relevant communications on his cellphones, there is probable cause to believe that, unlike the iCloud account, evidence of the Subject Offenses continue to be maintained on the Subject Devices.

But, according to Robert Costello, in a declaration that — unlike Rudy’s — was actually notarized and so worth something if you ignore the obvious spin in his representations of what SDNY told him — when SDNY reviewed at least seven of those devices, they were corrupted.

Rudy’s messaging wasn’t in his iCloud when SDNY looked in 2019. And it wasn’t in his phones when SDNY looked in 2021. And yet this year, he claimed the content in both places would be the same.

SDNY Adds FARA Charges to Menendez Indictment

October 12, 2023/119 Comments/in Foreign Influence /by emptywheel

SDNY just superseded the Robert Menendez indictment to add a Foreign Agent charge.

There’s not much new to the indictment. It lays out FARA. It establishes Menendez’ awareness of FARA’s requirements by pointing to two letters he sent asking for someone else to be investigated for FARA violations. It speaks of an agreement to deliver benefits to Egypt. It describes that the gold and cash found at the Menendez residence was in exchange for favors to Egypt. And it charges Menendez, Nadine, Wael Hana — but not Fred Daibes, the guy who dealt most of the cash — with FARA violations.

I assume much of the evidence may remain classified. But I also wonder whether this was charged now because Menendez hasn’t yet resigned — or because the Israeli war raises the stakes on US relations with Egypt.

Update: On closer read of the indictment, I see a few other key differences.

First, there’s far more detail about this meeting, in which — as with Egypt’s role in the Jamal Khashoggi assassination — Menendez seems to have interceded to protect Egypt.

21. Onorabout May 21,2019, ROBERT MENENDEZ, NADINE MENENDEZ, aa “Nadine Arslanian,” and WAEL HANA, a/k/a “Will Hana,” the defendants, met with an Egyptian intelligence official (“Egyptian Official-3”) at MENENDEZ’s Senate office in ‘Washington, D.C. During this meting, the group discussed a human rights matter pertaining to the resolution ofa claim involving the serious injuries suffered by an American citizen, who was. injured in a 2015 airstrike by the Egyptian military using a U.S -manufactured Apache helicopter. The incident leading to the citizen’s injuries and the perception of certain Members of Congress that the Government of Egypt was not willing to provide fair compensation to the injured citizen for the attack resulted in objections by some Members of Congress to the ‘awardingof certain military aid to Egypt. Shortly after the meeting with Egyptian Offical-3, MENENDEZ conducted a web search for the nameof that American citizen and visited a website that contained an article about the citizen’s claim. Approximately a week later, using an encrypted messaging application, Egyptian Official-3 texted HANA in Arabic regarding this |human rights matter, writing, in part, that if MENENDEZ helped resolve the matter, “he will sit very comfortably,”to which HANA replied, “orders, consider it done.” Egyptian Official then texted HANA screenshots of a statement from the American citizen’s attorney pertaining to the claim, which HANA then forwarded a few days ater to NADINE MENENDEZ, who in turn forwarded it to MENENDEZ. NADINE MENENDEZ subsequently deleted her text messages with HANA about this matter.

One other difference is investigative. To the existing paragraph about the search of Wael Hana’s phone in 2019, the superseding indictment notes that the search also found his encrypted texts, texts that Nadine had deleted.

That search also revealed thousands of text messages, many via an encrypted application, with Egyptian military and intelligence officials, pertaining to various topics, including MENENDEZ, and including requests and directives for HANA to act upon.

They obviously have had those for years, but decided to indict, first, without including them.

Finally, there are a few more pictures of meetings, such as this one taken in Menendez’ office and another taken from the May 21, 2019 dinner.

While this indictment may reflect more cooperation from Menendez’ staffers, much of it was all baked into the prosecution when they first indicted a month ago.

Update: The 2015 airstrike was on April Corley and her boyfriend.

Update: The indictment establishes Menendez’ knowledge of FARA — which is required for FARA but not for 951 — by pointing to two letters he wrote asking for DOJ to investigate a former Congressman under FARA. As Phil Bump lays out, that former Congressman is David Rivera; he has since been charged as an Agent of Venezuela.

The Still Ongoing Investigation into Where that Robert Menendez Cash Came From

September 27, 2023/24 Comments/in emptywheel, Financial Fraud, Foreign Influence /by emptywheel

Among the most interesting stories I’ve read on Robert Menendez since his indictment is this story, from the day before the indictment.

I find it interesting for how much of the story NBC already had — but more importantly, details from NBC that don’t show up in the indictment. The story reports on two of three prongs that appear in the indictment: It provides passing coverage of the IS EG Halal financing (though offers few specifics of the Egyptian favors) and extensive coverage of the Fred Daibes relationship.

The NBC story actually attributes the Mercedes, which the indictment directly ties to Menendez’ intervention in the state prosecution of a Jose Uribe associate, to IS EG Halal (Uribe does have ties to Wael Hana’s company). NBC doesn’t mention Menendez’s alleged intervention in the state prosecution of Uribe’s associate. Of more interest, it also describes a “a luxury D.C. apartment” that may have come from Hana’s company which is not mentioned at all in the indictment.

The story notes IRS-CI’s involvement in the case (as did Damian Williams at his presser announcing the charges); there’s no sign of tax charges, yet, in the indictment, or for that matter, of campaign disclosure violations (something the NYT reporter who has followed this closely is focused on).

As noted, however, the NBC story focuses much more closely on the Daibes prong of the investigation. It describes witnesses being asked if Menendez offered Daibes to interfere in the federal prosecution against him.

Sources say witnesses are now testifying before that federal grand jury. Part of the investigation centers on the senator’s ties to Fred Daibes, a New Jersey developer and one-time bank chairman. Officials with the FBI and IRS Criminal Investigation want to know if Daibes or his associates gave gold bars to the senator’s wife, Nadine Arslanian — gold bars worth as much as $400,000.

At the time of the gift handoff, Daibes was facing federal bank fraud charges that could have landed him up to a decade in federal prison.

Sources familiar with the matter say federal prosecutors have been asking if Menendez offered to help support Daibes with his criminal case by contacting Justice Department officials about the case. If the senator did offer to act in exchange for expensive gifts, legal experts say that could be a crime.

“For purposes of the Federal Extortion Act, it makes no difference if the senator took an official act so long as he accepted the money and there was knowledge the money was in exchange for that official influence, even if he never carried out what he had promised he would do,” NBC Legal Analyst Danny Cevallos said.

The indictment does not describe such an offer. The closest thing it describes is this exchange, after the prosecution of Fred Daibes was continued, when Nadine told Daibes that Menendez was “fixated” on Daibes’ fate:

On or about December 23, 2021, the trial of DAIBES, which had previously been scheduled for January 2022, was adjourned for reasons related to the COVID-19 pandemic. Later that day, DAIBES texted NADINE MENENDEZ, a/k/a “Nadine Arslanian,” the defendant, and asked how ROBERT MENENDEZ, the defendant, who had recently sustained a shoulder injury, was doing. NADINE MENENDEZ responded that MENENDEZ was doing better having heard that the trial date was adjourned, and that MENENDEZ was “FIXATED on it.” DAIBES responded, “Good I don’t want him to be upset over it. This is not his fault he was amazing in all he did he’s an amazing friend and as loyal as they come. How is the shoulder is he sleeping. Let me know if I can get him a recliner it helped me sleep.” DAIBES thereafter provided a recliner to MENENDEZ.

There’s also an incident where Daibes and Menendez, together, yell at Daibes’ attorney for not being aggressive enough; that’s not a crime, and in fact Menendez will use it to claim he intervened because he cared, not because he was paid.

NBC’s description of Menendez’ contact with US Attorney Phil Sellinger’s office differs in fairly significant ways from the indictment. It cites sources claiming that Menendez never contacted Sellinger or his office.

Sources told News 4 there is no indication U.S. Attorney Philip Sellinger or his office were ever contacted by the senator — but the two men had been close, with Sellinger appointed to the position with the senator’s support, and Sellinger previously serving as a campaign fundraiser for Menendez.

According to the indictment, Menendez did. The indictment alleges that Menendez raised Daibes before supporting Sellinger for the nomination.

In that meeting, MENENDEZ criticized the U.S. Attorney’s Office for the District of New Jersey’s prosecution of FRED DAIBES, the defendant, and said that he hoped that the Candidate would look into DAIBES’s case if the Candidate became the U.S. Attorney. MENENDEZ did not mention any other case in the meeting. After the meeting, the Candidate informed MENENDEZ that he might have to recuse himself from the DAIBES prosecution as a result of a matter he had handled in private practice involving DAIBES. MENENDEZ subsequently informed the Candidate that MENENDEZ would not put forward the Candidate’s name to the White House for a recommendation to be nominated by the President for the position of U.S. Attorney.

And Menendez allegedly called Sellinger’s First AUSA, Vikas Khanna.

b. On or about January 21, 2022, MENENDEZ called Official-3 and asked the identity of Official-3’s First Assistant U.S. Attorney (“Official-4”). As a result of Official3’s recusal, Official-4 had supervisory responsibility over the prosecution of DAIBES.

[snip]

d. On or about January 24, 2022, DAIBES’s Driver exchanged two brief calls with NADINE MENENDEZ. NADINE MENENDEZ then texted DAIBES, writing, “Thank you. Christmas in January.” DAIBES’s Driver’s fingerprints were later found on an envelope containing thousands of dollars of cash recovered from the residence of MENENDEZ and NADINE MENENDEZ in New Jersey. This envelope also bore DAIBES’s DNA and was marked with DAIBES’s return address. In or about the early afternoon of January 24, 2022— i.e., approximately two hours after NADINE MENENDEZ had texted DAIBES thanking him and writing “Christmas in January”—MENENDEZ called Official-4, in a call lasting for approximately 15 seconds. This was MENENDEZ’s first phone call to Official-4. On or about January 29, 2022—i.e., several days after NADINE MENENDEZ had texted DAIBES, thanking him and writing “Christmas in January”—MENENDEZ performed a Google search for “kilo of gold price.”

[snip]

45. Official-3 and Official-4 did not pass on to the prosecution team the fact that ROBERT MENENDEZ, the defendant, had contacted them as described in the above paragraphs, and they did not treat the case differently as a result of the above-described contacts. In or about April 2022, FRED DAIBES, the defendant, pled guilty pursuant to a plea agreement that provided for a probationary sentence.

Frankly, I find this part of the indictment unpersuasive, not just because the evidence presented only ever ties Daibes’ payments to proximate acts, not to a specific quid pro quo, but also because it is not explained how this case went from imminent trial to a sweet plea deal in four months.

A cooperation agreement in this investigation might explain it, but there’s no hint of that, though NBC seems to agree with me that that would explain what we’re looking at.

So one reason I find the NBC piece interesting is it portrays that prosecutors were still trying to obtain proof that this interference was a quid pro quo on the eve of the indictment. And SDNY didn’t provide that evidence in the indictment.

Couple that with two other details.

First, there’s the widely mocked line in the Menendez presser, attempting to explain the large amounts of cash found at his home:

For thirty years, I have withdrawn thousands of dollars of cash from my personal savings account, which I have kept for emergencies, and because of the history of my family facing confiscation in Cuba. Now this may seem old-fashioned. But these were monies drawn from my personal savings account based on the income that I have lawfully derived over those thirty years.

This story is at best a partial explanation for the cash shown in the indictment, much less the checks from Daibes and the gold bars (though Menendez has treated some, if not all, of the gold bars as Nadine’s property).

But consider the utility of it. Most reporters didn’t note Menendez’ silence about the gold bars (Menendez said he’d address other issues at trial). And for less credulous supporters of Menendez, such an explanation is all you need to offer to win their continued support. As with Trump, for the kind of political support you need to try to fight this out, the explanation doesn’t have to be plausible, it just needs to exist.

More interestingly, there’s probably enough truth in the statement — some of the cash the FBI seized in the search last year likely did come from Menendez’ bank account, regardless of why he withdrew it — that if prosecutors attempt to use this video at trial, it could backfire. Prosecutors have called to seize all this cash in forfeiture.

Over $480,000 in cash—much of it stuffed into envelopes and hidden in clothing, closets, and a safe—was discovered in the home, along with over $70,000 in NADINE MENENDEZ’s safe deposit box. Some of the envelopes contained the fingerprints and/or DNA of DAIBES or his driver. Other of the envelopes were found inside jackets bearing MENENDEZ’s name and hanging in his closet, as depicted below.

[snip]

A sum of $486,461 in U.S. currency seized from the Englewood Cliffs Premises on or about June 16, 2022.

But there’s not a shred of evidence that they have the ability to tie all of it — or even most of it — to the specific quid pro quos alleged in the indictment, for which it has better evidence of gold bars as payment. It may come from crime, but if it does, it may not come from this crime.

Prosecutors alleged that all of this $486,000 ties to the crimes alleged in the indictment. If Menendez can prove that some of it doesn’t, then he can use that overreach to discredit the prosecution.

As such, the statement — as ridiculous as it has justifiably been treated — seems partly a taunt. Menendez seems quite confident that prosecutors can’t trace a good deal of this cash, certainly not to these specific crimes, even if they can trace it to Daibes.

Note that Menendez’ claims to care about Egyptian human rights includes a similar taunt, referencing a meeting he had directly with Abdel Fattah El-Sisi. Whether and how and which Egyptians, including Sisi, have evidence to support Menendez’s defense will be a topic of extended litigation. Imagine trying to litigate testimony from the Egyptian President? Similarly, Menendez may demand testimony from his (still) fellow Senators, who witnessed another interaction he had with Sisi.

Which brings me to Damian Williams’ presser.

One reason I’m struck by the NBC story is it suggested there was still some work before prosecutors would be ready to indict, and yet they obtained an indictment — an indictment that doesn’t map the Daibes corruption as closely as I assume they would like — the very next day. Since then, we’ve learned that SDNY unsealed the indictment without first waiting to arrest Wael Hana at the airport, as they did yesterday. It’s highly unusual to indict someone in a way that maximizes their opportunity to flee the country, unless you have good reason to believe they won’t do that.

Hana didn’t take that opportunity to flee.

The whole thing seems either rushed, perhaps in response to disclosures like NBC’s, or tactical, an effort to advance a larger investigation.

As Williams said in his presser,

This investigation is very much ongoing. We are not done. And I want to encourage anyone with information to come forward and to come forward quickly.

That’s a version of the statement Williams made (though nowhere near as forceful) in his first presser on the Sam Bankman-Fried arrest — “come see us before we come see you” — which preceded the announcement of cooperation pleas from two key SBF associaties the following week, at which Williams again invited cooperators to come foward: “we are moving quickly and our patience is not eternal.”

I may be alone in this judgement, but I don’t think SDNY has the Daibes side of these alleged corruption — by far the bulk of the money — at all locked down. The Daibes corruption was the topic of Menendez’ taunt about cash; he may be confident that prosecutors won’t succeed in doing so.

But Damian Williams, at least, seems to believe more is coming.

Update: I didn’t see this NBC report on an ongoing counterintelligence investigation until after I posted. Note that statutes of limitation on some of the allegations in the indictment (which started more than five years ago) would have expired.