EDNY Accuses Tom Barrack of “Harvesting Assets” by Crafting Policy to Help UAE in a Trump Presidency

DOJ has superseded Tom Barrack’s indictment. It did not charge any of his not-yet charged co-conspirators, though it added language pertaining to Paul Manafort’s role, making him US Person 1 and demoting Steve Bannon to US Person 2. Two new paragraphs about Manafort’s role describe him crafting Trump’s platform to take out a promise to release 28 pages of the 9/11 Report implicating the Saudis.

The big addition to the indictment, however, focuses on Barrack’s payoff: investment by UAE’s Sovereign Wealth Fund in Colony Capital (remember, Colony is paying for Barrack’s defense). In the two years after Barrack helped UAE craft Trump’s policies, Colony got commitments for $374 million in investments from the SWF.

According to records maintained by Company A, Company A raised no new capital from United Arab Emirates sovereign wealth funds between 2009 and 2016. However, in2017 and 2018, in part as a result of the efforts of the defendants THOMAS JOSEPH BARRACK and MATTHEW GRIMES and the assistance of the defendant RASHID SULTAN RASHID AL MALIK ALSHAHHI and United Arab Emirates officials, Company A raised approximately $374 million in capital commitments from United Arab Emirates sovereign wealth funds.

The superseding indictment describes how Colony set up a fund with the intent of “harvesting assets” that will benefit from a Trump presidency, garnering political credibility by contributing to Trump’s policies.

On or about December 13,2016, the defendant MATTHEW GRIMES emailed himself a document summarizing the structure of the proposed investment fund, which stated in relevant part that “[w]hile the primary purpose of the [investment fund] [will be] to achieve outsized financial returns, it will also accomplish a secondary mandate to garner political credibility for its contributions to the policies of [the President-Elect]. . . . We will do so by sourcing investing, financing, operationally improving, and harvesting assets in . . . those industries which will benefit most from a [President-Elect] Presidency.” [my emphasis]

There are no charges tied to “harvesting” the Trump policies that Barrack would push (though it makes the forfeiture allegations far meatier). It does, however, make it clear that’s what the Trump presidency was about: selling policy to rich autocrats around the world.

And particularly given the way Barrack ensured that Mohammed bin Salman would be treated as if he were already Crown Prince by the Trump administration, it makes Jared Kushner’s similar “harvesting” of Trump policies look all the more suspect.

Will KleptoCapture Catch John Durham, Along with the Russian Spies and Oligarchs?

I’ve been right about a lot of things regarding John Durham’s investigation (though not, apparently, that he would supersede the indictment against Michael Sussmann — maybe he was afraid of getting no-billed if he corrected the things in the indictment he has since discovered to be false?).

Perhaps the most prescient observation I’ve made, though, was that Durham had no fucking clue where to look for evidence related to his already-charged allegations.

I’ve seen reason to believe Durham doesn’t understand the full scope of where he needs to look to find evidence relevant to that case.

I said that in November. Since that time in the Sussmann case, Durham has had to publicly confess he had not:

Effectively, Durham spent most of three years speaking to those who would confirm his conspiracy theories, and not consulting the actual evidence. It took until six months after Durham charged Sussmann before Durham tested Sussmann’s sworn explanation for his Baker meeting — and when he checked, he found the evidence backed Sussmann’s explanation.

Six months after indicting Igor Danchenko, Durham asked to extend discovery another month

It’s that record that makes me so interested in Durham’s second bid to extend deadlines for classified discovery in the Igor Danchenko case.

After Danchenko argued he couldn’t be ready for an April 18 trial date, Durham proposed a March 29 deadline for prosecutors to meet classified discovery; that means Durham originally imagined he’d be done with classified discovery over six weeks ago. A week before that deadline, Durham asked for a six week delay — to what would have been Friday. Danchenko consented to the change and Judge Anthony Trenga granted it. Then on Monday, Durham asked for another extension, this time for another month.

When Durham asked for the first delay, he boasted they had provided Danchenko 60,000 unclassified documents and promised “a large volume” of classified discovery that week (that is, before the original deadline).

To date, the government has produced over 60,000 documents in unclassified discovery. A portion of these documents were originally marked “classified” and the government has worked with the appropriate declassification authorities to produce the documents in an unclassified format.

[snip]

Nevertheless, the government will produce a large volume of classified discovery this week

This more recent filing boasts of having provided just one thousand more unclassified documents and a mere 5,000 classified documents — for a case implicating two known FISA orders and several past and current counterintelligence investigations.

To date, the Government has produced to the defense over 5,000 documents in classified discovery and nearly 61,000 documents in unclassified discovery. The Government believes that the 5,000 classified documents produced to date represent the bulk of the classified discovery in this matter.

Danchenko waited six weeks and got almost nothing new.

See this post for an explanation of all the classified information that Danchenko should be able to demand and the onerous process that using it requires, called Classified Information Procedures Act. Even in November, I showed that Danchenko could likely make a case that he should get discovery from the FBI and NSA, and probably CIA and Treasury. There is no way Durham is getting through this case with just 5,000 classified documents.

As he noted in his opposition to this latest request for an extension, with each request, Durham’s proposed schedule was shrinking the time afforded Danchenko to review classified discovery before providing a list of the classified information he wanted to use at trial (called a CIPA 5 notice), first from 60 days to 40, and then from 40 days to 22.

On March 22, 2022, the Special Counsel filed a Consent Motion to Adjourn the Classified Discovery and CIPA Schedule. Dkt. 44. In his Motion, the Special Counsel sought to extend the deadline to produce classified discovery from March 29, 2022, to May 13, 2022. Id. at 2. The Special Counsel’s motion also sought to extend the dates for various CIPA filings and hearings. Id. Importantly, the Special Counsel’s proposed schedule reduced the amount of time within which Mr. Danchenko had to file his Section 5(a) written notice from approximately 60 days after the close of classified discovery to approximately 40 days.

[snip]

On May 9, 2022, the Special Counsel filed his Second Motion to Adjourn the Classified Discovery and CIPA Schedule. Dkt. 48. In his motion, the Special Counsel now tells the Court that he can provide the outstanding classified discovery by “no later than” June 13, 2022. See id. at 2. He also proposes a June 29, 2022, deadline for Defendant’s Section 5(a) written notice. Id. Therefore, the Special Counsel has essentially asked this Court to enter an Order that will now decrease Mr. Danchenko’s time within which to file his Section 5(a) written notice from approximately 40 days after the close of classified discovery to approximately 22 days.

[snip]

Mr. Danchenko would be substantially prejudiced by the Special Counsel’s proposed schedule because it significantly shortens the time period within which Mr. Danchenko can review any final classified productions and file his CIPA Section 5(a) notice. That is of particular concern to Mr. Danchenko because the Special Counsel has not provided sufficient notice of how much additional classified discovery may be forthcoming other than his “belie[f]” that the “bulk” of the classified discovery has already been produced.

Shrinking Danchenko’s deadlines would make the additional discovery that is still outstanding far less useful. In the Sussmann case, for example, it took over a month for Sussmann’s team to find the documents that disprove Durham’s case buried among 22,000 other documents provided on his extended deadline. So while Durham might be trying to comply with discovery obligations, arguing that the proper solution to his struggles fulfilling discovery is to shrink Danchenko’s own time to review the evidence suggests he’s not doing so in good faith.

Judge Trenga must have agreed. While he granted the government’s request for an extension, he gave Danchenko 42 days to submit his CIPA 5 notice.

A Russian dog named Putin ate Durham’s classified homework

I’ve noted how the post-invasion sanctions on Alfa Bank deprived John Durham of a second investigative team, Alfa Bank’s Skadden Arps lawyers, whose filings a judge observed seemed to be “written by the same people” as Durham’s.

But the aftermath of Putin’s attempt to overthrow Ukraine may be causing Durham even bigger problems in the Danchenko case.

When Durham asked for an extension of his CIPA deadline in the Sussmann case days after Russia extended its invasion of Ukraine, he explained that the people who had to write declarations in support of CIPA (usually agency heads like CIA Director William Burns or NSA Director Paul Nakasone) were busy dealing with the response to Ukraine.

However, the Government’s submission includes not only the Government’s memorandum but also one or more supporting declarations from officials of the U.S. intelligence community. The Government’s review of potentially discoverable material is ongoing, and these officials cannot finalize their declarations until that review is complete.

Moreover, recent world events in Ukraine have further delayed the Government’s review and the officials’ preparation of the supporting declaration(s). As a result, the Government respectfully submits that a modest two-week adjournment request to its CIPA Section 4 filing deadline is appropriate and would not impact any other deadlines, to include the currently scheduled trial date

Effectively, this request moved the CIPA deadline from a week before Durham’s classified discovery deadline to a week after; yet Durham just committed, once again, to finalizing his CIPA 4 submission almost a week before his classified discovery deadline in the Danchenko case.

That’s important because Durham overpromised when he said he could finish a CIPA filing before the discovery deadline. Durham filed a supplement to his CIPA 4 notice on May 7 (nine days before trial) that, unless Judge Cooper ruled orally at a closed hearing last week, remains outstanding. That’s not entirely unusual in a case that relies on classified information, but if Cooper were to rule this classified information was necessary for Sussmann’s defense, it would give Sussmann no time to actually prepare to use it.

Durham cited the Ukraine response again on March 22, a month after Russia launched its failed attempt to take Kyiv, when he asked for an extension on his classified discovery deadline.

However, recent world events in Ukraine have contributed to delays in the production of classified discovery. The officials preparing and reviewing the documents at the FBI and intelligence agencies are heavily engaged in matters related to Ukraine.

Importantly, these people focusing on keeping us safe from Russian aggression rather than, as Durham is, making us safe for Russian aggression, are different than the people cited in the Sussmann case. These aren’t senior officials, but instead those “preparing and reviewing the documents at the FBI and intelligence agencies.” That’s not William Burns, that’s FBI counterintelligence agents, among others.

In last week’s request for an extension, Durham didn’t mention Ukraine, but his reference to “overseas activities” suggests the response to Ukraine remains the problem.

However, recent world events continue to contribute to delays in the processing and production of classified discovery. In particular, some of the officials preparing and reviewing the documents at the FBI and intelligence agencies continue to be heavily engaged in matters related to overseas activities.

Unsurprisingly, Danchenko asked Trenga to require Durham to provide some kind of explanation for why “overseas activities,” probably Ukraine, continue to delay classified discovery in a case criminalizing an attempt to fight Russia’s attack on democracy in 2016.

Moreover, the Special Counsel has failed to adequately explain how “recent world events” (Dkt. 48 at 2) have specifically made it impossible for him to meet his discovery obligations. While it seems unlikely that the same government officials charged with declassifying discovery are also responding to events overseas, it certainly is possible. But, even if that is the case, the Special Counsel must offer more explanation than he has, especially in light of the fact that his prior motion to extend the discovery deadline was based on the events in Ukraine, and the ongoing nature of that conflict must or should have been considered when he requested the May 13 deadline.

Sadly, Trenga didn’t order up an explanation for why this delay, probably Ukraine-related, is causing so many difficulties for Durham’s prosecution of Danchenko.

KleptoCapture threatens at least one and possibly up to three key Durham figures

One reason I would have liked Trenga to force Durham to explain how a dog named Putin ate his classified homework is because the public response to Russia’s attempt to conquer Ukraine has already implicated three figures who are key to Durham’s case. While I need to update it, this post attempts to capture everything that the US government and some partners have done since the expanded invasion.

Dmitry Peskov

Perhaps the response least damaging to Durham’s case — but one that will affect discovery — involves Dmitry Peskov. As I explained in this post, Durham made Peskov’s relationship with Chuck Dolan and Olga Galkina a key part of his indictment against Danchenko.

In his role as a public relations professional, [Dolan] spent much of his career interacting with Eurasian clients with a particular focus on Russia. For example, from in or about 2006 through in or about 2014, the Russian Federation retained [Dolan] and his then-employer to handle global public relations for the Russian government and a state-owned energy company. [Dolan] served as a lead consultant during that project and frequently interacted with senior Russian Federation leadership whose names would later appear in the Company Reports, including the Press Secretary of the Russian Presidential Administration (“Russian Press Secretary-I”), the Deputy Press Secretary (“Russian Deputy Press Secretary-I”), and others in the Russian Presidential Press Department.

[snip]

In anticipation of the June 2016 Planning Trip to Moscow, [Dolan] also communicated with [Peskov] and Russian Deputy Press Secretary-I, both of whom worked in the Kremlin and, as noted above, also appeared in the Company Reports.

[snip]

Additionally, on or about July 13, 2016, [Galkina] sent a message to a Russia-based associate and stated that [Dolan] had written a letter to Russian Press Secretary-1 in support of [Galkina]’s candidacy for a position in the Russian Presidential Administration.

On March 3, the State Department added Peskov to the sanctions list under a 2021 Executive Order President Biden signed, in part, to target those who (among other things), “undermine the conduct of free and fair democratic elections and democratic institutions in the United States and its allies and partners.” On March 11, Treasury added Peskov’s family members to the sanctions list. The package used to sanction Peskov would have been the product of intelligence reports circulated within the US government.

While the legal reason Peskov was sanctioned pertained to his official role in the Russian government (and the lavish lifestyles his family enjoys even with his civil service salary), State also described Peskov as “the chief propagandist of the Russian Federation.” That, by itself, would be unremarkable. But if — as even Durham alludes — Peskov had a role in feeding Galkina disinformation for the Steele dossier, particularly if he crafted disinformation to maximally exploit Michael Cohen’s secret call with Peskov’s office in January 2016, that could be a part of the sanctions package against Peskov. If it were, then it would be centrally important discovery for Danchenko.

Oleg Deripaska

Then there’s Oleg Deripaska. This post lays out in depth the reasons why Danchenko would have reason to demand information on Deripaska’s role in the dossier, including:

  • Evidence about whether Oleg Deripaska was Christopher Steele’s client for a project targeting Paul Manafort before the DNC one
  • All known details of Deripaska’s role in injecting disinformation into the dossier, up through current day
  • Details of all communications between Deripaska and Millian

Given his blissful ignorance of the actual results of the Mueller investigation and the DOJ IG Carter Page investigation, Durham was always going to have a nasty discovery surprise in complying with such requests. Plus, a search last October of two Deripaska-related properties made clear that the most likely source of disinformation in the dossier was under aggressive criminal investigation for sanctions violations.

A recent Bloomberg story reported that that criminal investigation has now been moved under and given the prioritization of the KleptoCapture initiative started in response to the Ukraine war.

Deripaska has been sanctioned since 2018 for his ties to Vladimir Putin, and the seizures at a Washington mansion and New York townhouse linked to him predate the invasion of Ukraine. But the investigation of Deripaska’s assets is now part of an escalating U.S. crackdown on ultra-rich Russians suspected of laundering money and hiding assets to help finance Putin’s regime.

The raids were key steps to unearth information that may determine whether — and how — Deripaska moved money around. Among the mishmash of items taken from the New York and Washington properties were half a dozen works of fine art, sunglasses, hiking boots, housewares, financial records, telephone bills and other documents, according to the people, who asked not to be identified because the investigation hasn’t been made public.

The Deripaska inquiry is now part of a special U.S. Department of Justice task force dubbed “KleptoCapture,” according to New York federal prosecutor Andrew Adams, who is heading up the group.

“As Russia and its aggression continues, we have our eyes on every piece of art and real estate purchased with dirty money,” Deputy Attorney General Lisa Monaco said at a recent news conference.

If DOJ plans on indicting Deripaska — for sanctions violations and anything else on which the statute of limitations has not expired — they might delay discovery cooperation with Durham until they do so. And if such a hypothetical indictment mentioned Deripaska’s role in facilitating the 2016 election interference and/or successful efforts to exploit the dossier to undermine the Russian investigation, it might make Durham’s charges against Danchenko unsustainable, even if he is able to otherwise fulfill his discovery requirements. Durham’s theory of prosecution is that Danchenko is the big villain that led to FBI confusion over the dossier, but Deripaska seems to have had a far bigger role in that.

Sergei Millian

Finally, there’s Sergei Millian, who happened to meet with Deripaska in 2016 at an event, the St. Petersburg International Economic Forum, that played a key role in the election operation.

In the same week Millian met Deripaska, a bunch of cybersecurity experts first started looking for evidence of Russian hacking in DNS data and Igor Danchenko was in Moscow meeting with Chuck Dolan and his other named Steele dossier sources.

As the DOJ IG Report and declassified footnotes make clear, FBI opened a counterintelligence investigation into Millian in October 2016. All the evidence indicates that the investigation did not arise from Crossfire Hurricane and, given that Millian’s ID was hidden in the dossier reports shared with NYFO on their way to HQ, and given that other information on Millian was fed into DC, not NY, was probably predicated completely independent of Crossfire Hurricane.

In addition, we learned that [Millian] was at the time the subject of an open FBI counterintelligence investigation. 302 We also were concerned that the FISA application did not disclose to the court the FBI’s belief that this sub-source was, at the time of the application, the subject of such an investigation. We were told that the Department will usually share with the FISC the fact that a source is a subject in an open case. The OI Attorney told us he did not recall knowing this information at the time of the first application, even though NYFO opened the case after consulting with and notifying Case Agent 1 and SSA 1 prior to October 12, 2016, nine days before the FISA application was filed. Case Agent 1 said that he may have mentioned the case to the OI Attorney “in passing,” but he did not specifically recall doing so. 303

301 As discussed in Chapter Four, [Millian] [redacted]

302 According to a document circulated among Crossfire Hurricane team members and supervisors in early October 2016, [Millian] had historical contact with persons and entities suspected of being linked to RIS. The document described reporting [redacted] that [Millian] “was rumored to be a former KGB/SVR officer.” In addition, in late December 2016, Department Attorney Bruce Ohr told SSA 1 that he had met with Glenn Simpson and that Simpson had assessed that [Millian] was a RIS officer who was central in connecting Trump to Russia.

303 Although an email indicates that the OI Attorney learned in March 2017 that the FBI had an open case on [Millian], the subsequent renewal applications did not include this fact. According to the OI Attorney, and as reflected in Renewal Application Nos. 2 and 3, the FBI expressed uncertainty about whether this sub‐source was Person 1. However, other FBI documents in the same time period reflect that the ongoing assumption by the Crossfire Hurricane team was that this sub‐source was [Millian].

Plus, Mueller found plenty on Millian to raise separate issues of concern.

Given several other counterintelligence cases developed in NYFO, the predication likely had more to do with Russia’s effort to use cultural and other diaspora groups as a way to covertly extend Russian influence.

And in fact, Millian’s group — the Russian American Chamber of Commerce — has already made a cameo appearance in one such prosecution, that against Elena Branson, a complaint that was rolled out in the same week as the sanctions against Peskov.

a. On or about January 30, 2013, BRANSON received an email from an individual using an email address ending in “mail.ru.” Based on my review of publicly available information, I have learned that this individual was a Senior Vice President of the Russian American Chamber of Commerce in the USA. This email had the subject line “Problem.” and the text of the email included, among other things, a portion of the FARA Unit’s website with background on FARA. In response, BRANSON wrote, in part, “I am interested in the number of the law, its text in English[.]” The sender then responded with “Lena, read …” and copied into the email background on FARA and portions of the statute.

This awareness and flouting of registration requirements is the kind of thing that often features in prosecutions for 18 USC 951 violations. And, at least in the case of Branson, the statute of limitations can extend so long as the person in question continues to play a role in US politics, though in Branson’s case, she only fled the country 18 months ago.

If the FBI believed Millian was an unregistered foreign agent who fled to avoid an investigation in 2017, his ongoing involvement in efforts to gin up an investigation into the investigation — particularly claims that, even according to Durham, misinterpreted facts his own prosecutors filed and thereby contributed to death threats against witnesses in the investigation — then it wouldn’t rule out an investigation into Millian himself, an investigation that would have preceded Durham’s reckless reliance on him (or rather, Millian’s unvetted Twitter feed) as a star witness against Danchenko.

Even Millian’s public claim (albeit one offered by someone the FBI considers an embellisher) that he called the White House directly to elicit this investigation could be of interest.

We can now say with great certainty that Durham didn’t check the most obvious sources of evidence against key players involved in the Steele dossier, such as DOJ IG’s backup files in the Carter Page investigation that is the primary focus of Durham’s Danchenko indictment. That makes it highly likely he never bothered to see whether other parts of DOJ considered key players in the Steele dossier to be actual threats to democracy.

One of those key players is undoubtedly Oleg Deripaska. And the renewed focus on Russian influence operations may expand beyond that.

DOJ Claims a Key Witness against Tom Barrack Was Being Paid $15,000 a Month as Part of His Defense Team

With the exception of the epic conflicts that Jan 6 lawyer John Pierce has accumulated by representing dozens of Jan 6 defendants, most of the conflicts that come up in prosecutions are waivable. Prosecutors ask the defendant to be alerted to the conflict to ensure it doesn’t provide a way for the defendant to blow up the case later. Or, in the case of John Durham, he uses claimed conflicts to float a bunch of conspiracy theories that elicit death threats.

But a conflict notice in Tom Barrack’s case is something else. EDNY explains, first of all, that Colony Capital is paying for Barrack’s defense as part of an employment agreement finalized in October. That part is another waivable conflict, not that surprising.

Where things get more interesting, EDNY reveals that Barrack’s former Executive Secretary, who played a key role in some of the charged conduct, and who provided materials to the government in the period leading up to the June 2019 interview where (EDNY alleges) Barrack lied to cover up his relationship with the Emirates, was on the payroll of his defense team until April 29. She was being paid $15,000 a month.

For example, the Witness played a role with Barrack in the planning and execution of the Presidential Inauguration of President Trump, including an event (the Chairman’s Global Dinner) that is specifically mentioned in the Indictment. The Witness also assisted Barrack in the preparation of materials submitted as part of his background investigation when Barrack was being considered for a potential appointment in the Trump Administration during the relevant time period. The government anticipates that these events and materials will be presented to the jury at trial.

Prior to the unsealing of the Indictment in this case, an attorney at Paul Hastings LLP (and one of Barrack’s attorneys at that time) (the “Paul Hastings Attorney”), advised the government that he also represented the Witness, and requested the opportunity to voluntarily provide certain requested materials to the government. On or about May 2, 2019, the Paul Hastings Attorney produced records to the government, and in a letter indicated that the Witness was his “client,” though in the same letter, he also indicated that he was “Counsel to Thomas J. Barrack, Jr.” It is the government’s understanding that the Paul Hastings Attorney’s representation of the Witness was paid for by Barrack.

On or about July 16, 2021, the Indictment in this matter was unsealed and Barrack was arrested. Several weeks later, in early August 2021, Barrack’s then-counsel, Paul Hastings LLP (who, as noted above, also represented the Witness in this investigation), hired the Witness as a litigation consultant. 3 Paul Hastings hired the Witness as a litigation consultant notwithstanding that the Witness has no legal education, is not a lawyer, and has never previously worked as a litigation consultant. When [O’Melveny & Myers] became the defendant’s counsel, OMM also hired the Witness as a litigation consultant. It is the government’s understanding that the Witness was paid approximately $15,000 a month for the Witness’ services and that the only matter the Witness was working on for OMM is the instant case. OMM has included the payments for the Witness in invoices submitted to Company A as legal costs. Company A raised concerns to OMM about whether the Witness’ costs were reasonable and appropriate under the terms of the Advanced Fees Agreement but ultimately, after speaking with OMM, agreed to pay the Witness’ costs. OMM first advised the government that it had retained the Witness as a litigation consultant on or about March 31, 2022, a few days prior to a scheduled interview of the Witness by the government.

2 A potential conflict already compounded by the fact that Company A is a current client of OMM.

3 The Witness was no longer working with Barrack or at his company by this time, and instead was working at an unrelated business venture.

Particularly given that Barrack’s lawyer involved this person in an effort to stave off indictment in 2019 that the government claims was an attempt to obstruct the investigation, I’m wonder what she was being paid $15,000 a month to not remember … and whether that will change now that Colony has stopped paying those bills?

Update:  Pronoun changed per John Paul Jones’ note of the footnote referring to the person as “her.”

The timing of this all suggests what kind of more valuable information this witness might have. EDNY says OMM first told them she was part of the defense team on March 31, days before EDNY was to interview her.

Ten days earlier, OMM had included this question in an agenda for a status hearing on March 22:

Defense counsel respectfully request that the Court inquire of the government whether it presently intends to present a superseding indictment to the grand jury before trial and if so, any information the government can provide as to the timing of the superseder.

The answer EDNY provided was yes, they reserve the right to supersede the indictment and it might happen in June. Then on April 5, EDNY responded to a bunch of Barrack’s complaints about discovery by suggesting that several of Barrack’s not-yet charged co-conspirators (Bannon is the most obvious) might still be charged.

Additionally, the investigation related to this case is ongoing (we note that one of the charged defendants is a fugitive and the indictment alleges conduct by several unindicted co-conspirators).

In other words, at around the time that EDNY would have been arranging an interview with the former Executive Secretary as part of an investigation into Barrack’s not-yet charged co-conspirators, OMM figured out that EDNY might supersede this indictment.

Which is probably one of the reasons they were paying her $15,000 a month to consult on this case: to find out whether EDNY was onto other, more damning Barrack actions. Money well spent!

Meanwhile, somewhere along the way, Colony Capitol — which is itself represented by OMM — balked at paying $15,000 for her costs, but kept paying anyway.

A month after informing EDNY that she worked for them, on April 29 (so about two weeks ago) OMM told EDNY that she no longer does.

Presumably, whatever “cooperation” she gave to EDNY in 2019 was a limited hangout, designed to protect more damaging information. That information is probably related to the substance of the crimes that EDNY was investigating when they tried to get her interview in March.

Matryoshka Doll: The Aleksandr Babakov Indictment

I’ve been trying to track the US government’s efforts to rein in Russia via various kinds of lawfare.

The indictment unsealed yesterday against Aleksandr Babakov is a remarkable example of the form.

To understand why, let me first explain what I imagine the goals of US lawfare in response to the expanded Russian invasion of Ukraine.

Since the Russian invasion, a number of Western countries have been rolling up Russian intelligence networks and expelling people serving under diplomatic cover by declaring them persona non grata under suspicion of spying. Whereas normally spooks would let other spooks carry on their work so they could spook on other spooks, there seems to have been a decision among most US allies to roll up Russia’s networks, perhaps with twin goals of blinding Russia and cleansing their countries of Russia’s formidable influence networks, which persuaded many in Western countries to trade principle for cash.

That is happening at the same time the West has been trying to craft sanctions to target people powerful enough to influence Vladimir Putin’s thinking.

The series of indictments — variably charging influence-peddling crimes (Foreign Agent and/or FARA), violations of sanctions imposed in response to Russia’s 2014 invasion of Ukraine, and visa fraud — have exposed past influence peddling and raised the legal costs to Americans to continue to be a party. But the only American charged for providing cover for such operations so far — Jack Hanick — was actually charged in November and arrested before Russia expanded its invasion (though the indictment of Andrey Murviev was tied to already-existing charges against Lev Parnas and Igor Fruman).

So it might seem like these indictments are just speaking vehicles: a way for DOJ to make evidence against Russians public, without any real legal impact. But this Babakov indictment demonstrates that’s not the case. This indictment, and the campaign generally, does the following:

  • Continues to flesh out Russia’s efforts to use its diaspora networks to illegally exert political pressure in other countries
  • Charges Aleksandr Babakov, making it impossible for him to travel if Russians ever get the opportunity to travel again
  • Demonstrates the cultivation of specific members of Congress
  • Puts the American involved — identified here as CC-1 — on notice they have to register past lobbying under FARA

One more detail before I explain the indictment. Remember that there are two overlapping foreign influence peddling laws, which are often confused (because both Michael Horowitz and John Durham fucked this up, I picked a fight with Peter Strzok to call attention to the distinction last night, but Brandon Van Grack, under whom these cases were surely developed, agrees with me.). [Update: I should clarify. This indictment is charged as an 18 USC 371 conspiracy to get an American to commit 18 USC 951, not 951 directly.]

There’s 18 USC 951, acting as an unregistered Agent of a foreign country, which is what is charged here. To be charged, it requires the influence peddling to have been done on behalf of a foreign government. It does not require knowledge of the requirement to register with the Attorney General. By contrast, FARA (22 USC 611), does require that the person peddling foreign influence know they need to register. But it can apply more broadly, to include “foreign principals,” like an oligarch who is not a part of a foreign government. Prosecutions under FARA were rare before Robert Mueller discovered that foreigners were asking agents like Mike Flynn and Paul Manafort to lie to their lawyers about whom they were actually working for. But generally, before that, DOJ would just formally alert someone they needed to register, the person would back-date a FARA registration, and they’d carry on with their sleazy influence-peddling.

So (in addition to sanctions violations and visa fraud) this indictment charges Babakov and two staffers with conspiring to recruit an American — CC-1 — to serve as their unregistered proxy for influence-peddling. The reason I call this a matryoshka doll is because this is how the influence-peddling worked.

As the indictment lays out, Babakov has three jobs. The first is to be a member of the Duma — and he was a member of the Duma for the entire period covered by the indictment, which is why DOJ can charge this under 951. The second and third are serving as the head of two cover organizations, the Institute for International Integration Studies and the International Council of Russian Compatriots. The funding for the two European consultants (their nationality is unclear) involved in this scheme — CC-2 and CC-3 — was paid through IIIS. Babakov recruited CC-1, the American whose involvement allows 951 to be charged — through CC-2. And it was through CC-1 that Babakov attempted to forge ties with members of Congress.

The reason this matryoshka structure matters is because it’s possible CC-1 did not know the extent to which he was working on behalf of the Russian government. CC-1 is described as someone who lives in NYC and has experience “relating to international relations and media.” This could well be a journalist and I don’t rule out knowing him personally. A footnote describes that the communications in the indictment are translations, so CC-1 appears to communicate with CC-2 and CC-3 in a non-English language, but it is not necessarily Russian. CC-2 first solicited CC-1’s involvement on a “national campaign” tied to “human rights and the cause of Cuba.” So it was based on that — an interest in helping Cuba, not an interest in helping Russia — that CC-1 first started pitching meetings with one of two targets described as a “then-member of the U.S. House of Representatives.” From there, CC-3 started sucking CC-1 in with free trips to Europe and Russia.

Via that recruitment process, CC-1 came to be introduced to and serve as the instrument for Babakov’s own views — views that are still quite familiar on the horseshoe left, which may well be the politics this person holds.

At around this time, ALEKSANDR MIKHAYLOVICH BABAKOV, the defendant, publicly expressed his support for Russian President Vladimir Putin’s “approaches to building the country’s foreign policy priorities, including the prospects for developing relations with the United States,” blaming “instability” of the U.S.-Russia relationship on “well-known stereotypes and phobias, as well as the absence of a solid economic foundation,” and “destructive steps in the field of missile defense, NATO [North Atlantic Treaty Organization] expansion to the East.”

Years later, as they were ratcheting up this effort in 2017, the Russians would use CC-1 as an American cut-out.

[T]he defendants[] planned to deploy CC-1 to obtain meetings in the United States with individuals perceived to have political influence, and to use CC-1’s status as an American citizen to help them gain access to visas to travel to the United States for these meetings, all in furtherance of the defendants’ foreign influence operations.

In 2017, CC-1 helped draft some letters to a second then-member of Congress in an attempt to set up a meeting with Babakov, including to invite the Congressperson on an all-expenses paid trip to Crimea.

The lines they pushed in 2017 were the same ones we hear from the horseshoe left now: recognizing Russia’s annexation of Crimea, and,

elaboration of issues of further reduction of nuclear potentials and confidence-building measures in the military sphere, including with regard to NATO’s policy in Eastern Europe and the problem of building up conventional weapons near Russia’s borders.

Let me be clear: This pitch feels familiar to me because I’ve experienced it first-hand. From 2013 until 2018 — until the time I revealed I had gone to the FBI about someone — I would get such pitches. I’m sure the US government considers Snowden’s Freedom of the Press Foundation to be such a cover organization — indeed, Xeni Jardin quit its board over its ties to Russia — and I received funding from them for several years (though always with the understanding that I was being funded by a specific, named American). And a slew of my friends in the dissident left or civil liberties community would get such pitches, as well, many with travel and some with lucrative business opportunities attached. Some of my former associates who most loudly disputed the Russian attribution of the 2016 operation did so after getting such pitches. This happens all the time. And many of the people to whom it happens are the last people the US government would provide counterintelligence training or warnings to in advance. Many are also the kind of people who would ignore government warnings if they were given any. I probably would have when I was getting such pitches.

To be clear, CC-1 is not free from blame. When the person was pitching meetings with three members of Congress in 2012, he claimed to be the “‘President and CEO’ of a nonprofit organization” inviting the members to Europe. CC-1 remained involved after Russia’s puppet in Crimea, Sergey Aksyonov, was sanctioned in the 2014 Ukraine-related sanctions.

For example, on or about March 18, 2014, the day after Aksyonov’s OFAC designation, CC-1 posted a photo on a social media website of Aksyonov standing alongside Russian President Vladimir Putin, and directed the post to VOROBEV, CC-2, and CC-3. Several weeks later, CC-1 made another post referencing a news article regarding “the new US sanctions on Russia.”

After those sanctions, CC-1 continued to pitch Russia’s line on Ukraine — again, a view that is still familiar among the horseshoe left.

[O]n or about May 1, 2014, CC-1 contacted the head of an American internet publication via email and asserted that he had “access to Crimean officials and other pro-Russian officials in Eastern Ukraine willing to go on the record to denounce US interference in the region and to give specifics about it.” CC-1 cited his ties to “[Country-1] MPs and also members of the Russian Duma,” that is, ALEKSANDR MIKHAYLOVICH BABAKOV, the defendant.

The last overt act CC-1 took, at least as described in the indictment, was on April 10, 2017. And while this indictment was unsealed on April 14, 2022 (and so days beyond a five years statute of limitations) it was filed on April 7, a few days short of it.

So it’s unclear whether the government will use this indictment to force CC-1 to retroactively register his lobbying efforts in 2017 under FARA, or whether there was another indictment filed on April 7 we haven’t seen yet. There’s also no description of CC-1 receiving money or other benefits (such as free travel) after the time when these people started getting sanctioned, so it’s unclear whether CC-1 faces a sanctions violation himself.

DOJ is not revealing what legal impact this indictment will have on CC-1 (or a businessman the effort recruited in 2017, or other American targets alluded to in passing), which may have been done to permit for the possibility of cooperation.

What it will do is force CC-1, whoever he is, to account for the fact that his support for carving up Ukraine was not organic, but instead was part of an extended effort by Russia to turn him into a spokesperson for the Russian state.

Update: The June 2017 sanctions against Babakov and his aides are pretty interesting. He appears, without much explanation, along with Yevgeniy Prigozhin’s front companies.

Today’s action also targets six individuals and entities pursuant to E.O. 13661, which authorizes sanctions on, among others, any individual or entity that is owned or controlled by, or that has provided material or other support to, persons operating in the arms or related materiel sector in the Russian Federation, and officials of the Government of the Russian Federation.

Molot-Oruzhie, OOO manufactures ordnance and accessories and is located in the Russian Federation. In 2016, previously-designated Kalashnikov Concern advised a foreign company to use Molot-Oruzhie, OOO to falsify invoices in order to circumvent U.S. and EU sanctions. Molot-Oruzhie is being designated for operating in the arms or related material sector of the Russian Federation and for acting or purporting to act for on behalf of, directly or indirectly, Kalashnikov Concern.

Limited Liability Company Concord Management and Consulting and Concord Catering are being designated for being owned or controlled by Yevgeniy Prigozhin, who OFAC designated in December 2016.

Alexander Babakov is the Russian Federation’s Special Presidential Representative for Cooperation with Organizations representing Russians Living Abroad. Babakov was sanctioned in 2014 by the EU, which noted that he voted “yes” on a Russian bill for the annexation of Crimea. Alexander Babakov is being designated as an official of the Government of the Russian Federation.

Aleksandr Vorobev is Alexander Babakov’s Chief of Staff. Aleksandr Vorobev is being designated for acting or purporting to act for or on behalf of, directly or indirectly, Alexander Babakov.

Mikhail Plisyuk is a staffer to Alexander Babakov. Mikhail Plisyuk is being designated for acting or purporting to act for or on behalf of, directly or indirectly, Alexander Babakov.

It’s as if the US had already developed a pretty good sense that Babakov was running an information operation. And it makes me wonder if he had a role in 2016.

Tom Barrack Appears to Claim Trump Knew Barrack Was Catering US Foreign Policy to the Emirates

In this post, I described the import of the false statement and obstruction charges against Tom Barrack. While Barrack may have been honest about his ties to the Emirates in a 2017 interview with Robert Mueller’s prosecutors, he is accused of lying about those ties in 2019, which — if DOJ has the goods on those later lies — will make it clear he was affirmatively hiding his role at that point.

[A]ssuming the FBI didn’t charge a billionaire with false statements without having him dead to rights on the charges, by June 2019, the FBI foreclosed several of the defenses that Barrack might offer going forward: that he was doing all this as a legal commercial transaction (which is exempt from the foreign agent charges) or that he wasn’t really working for UAE, he just thought the alliance really served US interests and indulged the Emiratis by referring to MbZ as “boss.” By denying very basic things that the FBI appears to have records for, then, Barrack made it a lot harder to argue — in 2021 — that’s there’s an innocent explanation for all this.

[snip]

This case will sink or swim on the strength of the false statements charges, because if Barrack’s alleged lies in June 2019 were clearcut, when he presumably believed he would be protected by Barr and Trump, then it makes several likely defenses a lot harder to pull off now.

The government made the same argument in a filing last month responding to Barrack’s motion to dismiss: If Barrack did not know his back channel with the Emirates was a problem, why did he (allegedly) lie about it?

Although not dispositive to Barrack’s vagueness challenge, if Barrack actually believed that he had done nothing wrong, it is unclear why he allegedly lied to FBI special agents during his voluntary June 20, 2019 interview as set forth in Counts Three through Seven of the Indictment.

It’s now clear that Barrack’s alleged false statements are even more important than that.

That’s because Barrack is now arguing that, because the Trump Administration approved of how Barrack was peddling US policy to the Emirates, Barrack could not have been a secret foreign agent under 18 USC 951.

That revelation has slowly become clear over the course of a dispute over discovery (motion, response, reply) pertaining to Barrack’s demand, among other things, for, “all communications between Mr. Barrack and the Trump Campaign and Administration regarding the Middle East.”

In the government’s response, they note that 18 USC 951 requires notice to the Attorney General, not to members of a private political campaign.

The defendants argue that evidence of Barrack’s disclosure of his UAE connections to members of the Trump Campaign are exculpatory. But Section 951 requires notice to the Attorney General, not to private citizens affiliated with the Trump Campaign. See 18 U.S.C. § 951(a). This makes sense, since the Attorney General is the official charged with enforcing the law and the senior official in charge of the FBI, the agency responsible for investigating and responding to unlawful foreign government activity inside the United States. By contrast, members of the Trump Campaign have no such responsibilities with respect to the internal national security of the United States and had no authority to sanction or bless the defendants’ illegal conduct. They are not government officials, and even if they were, they are not the Attorney General or a representative thereof.

According to the indictment, Paul Manafort not only knew that Barrack was working for the Emirates, but was cooperating with Barrack’s efforts.

In Barrack’s reply, after a heavily redacted passage, he complains about DOJ’s claim — made in the press conference announcing his arrest — that he had deceived Trump about what he was doing.

The government’s position is particularly astonishing in light of its public claim at the time of Mr. Barrack’s arrest that he had deceived Mr. Trump and the administration. Specifically, the then-Acting Assistant Attorney General for the National Security Division announced that the “conduct alleged in the indictment is nothing short of a betrayal of those officials in the United States, including the former President,” and that this indictment was needed to deter such “undisclosed foreign influence.” [citation removed] In that same press release, the Assistant Director in Charge of the FBI NY Field Office asserted that the indictment was about “secret attempts to influence our highest officials.” Id. When Mr. Barrack raised concerns with the government about these false statements in the press release, the government responded that these statements were a fair representation of the conduct alleged in the indictment. [citation removed] Thus, in one breath the government claims that Mr. Barrack deceived Mr. Trump and the administration and that such evidence is part of its case, but in the next breath contends that contrary evidence is neither relevant nor exculpatory and apparently withheld such discovery on that basis.

Barrack’s lawyers include the 2021 comments about whether Trump knew of all this as exhibits, but more recent correspondence about it remains sealed.

In other words, Barrack seems to be arguing, he didn’t betray Trump; Trump wanted him to cater American foreign policy to rich Gulf Arab nations.

Barrack spends four pages of his reply making the same kinds of complaints about the documentation of his 2019 FBI interview that Mike Flynn made in 2020, even complaining that the fact that the AUSAs prosecuting the case were in the room makes them conflicted on the case. It’s clear why he did so: because if Barrack did lie to an FBI run by Trump’s appointed FBI Director and ultimately overseen by Bill Barr in 2019, then he was continuing to hide his influence-peddling from the one person that mattered under the law, Bill Barr (though given what we know of Barr’s interference in Ukraine investigations, I would be unsurprised if Barr knew that Trump knew of Barrack’s ties to the Emirates, which would explain why he swapped out US Attorneys in EDNY at the time).

Remember: Barrack is alleged to have been pursuing policies pushed by Mohammed bin Zayed. But among the things he is accused of doing for the Emirates was to “force” the White House to elevate Saudi Crown Prince Mohammed bin Salman (then just the Deputy Crown Prince) during a visit to DC in March 2017. At the time the FBI interviewed Barrack in June 2019, Trump was under significant pressure for his possible complicity in the Jamal Khashoggi assassination.

And now — at a time when EDNY is talking about indicting Barrack’s not-yet indicted co-conspirators — we learn that MbS invested $2 billion dollars in Jared Kushner’s brand new firm even in spite of all the reasons not to.

Six months after leaving the White House, Jared Kushner secured a $2 billion investment from a fund led by the Saudi crown prince, a close ally during the Trump administration, despite objections from the fund’s advisers about the merits of the deal.

A panel that screens investments for the main Saudi sovereign wealth fund cited concerns about the proposed deal with Mr. Kushner’s newly formed private equity firm, Affinity Partners, previously undisclosed documents show.

Those objections included: “the inexperience of the Affinity Fund management”;the possibility that the kingdom would be responsible for “the bulk of the investment and risk”; due diligence on the fledgling firm’s operations that found them “unsatisfactory in all aspects”; a proposed asset management fee that “seems excessive”; and “public relations risks” from Mr. Kushner’s prior role as a senior adviser to his father-in-law, former President Donald J. Trump, according to minutes of the panel’s meeting last June 30.

But days later the full board of the $620 billion Public Investment Fund — led by Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler and a beneficiary of Mr. Kushner’s support when he worked as a White House adviser — overruled the panel.

Barrack’s apparent claim that Trump knew exactly what he was doing does nothing to change his legal posture before Trump became President, and DOJ indicted this before the statute of limitation expired on that conduct.

But the apparent claim that Trump knew about this — and the possibility that Barr did too, at least after the fact — would change the kind of crime that happened in 2017, after Trump became President. And, possibly, the culprit.

On EDNY’s Ongoing Investigation into Tom Barrack and His Not-Yet Indicted Co-Conspirators

In a status hearing on March 21, prosecutors in the Tom Barrack case responded to a question Barrack had posed the day earlier — whether they planned to supersede his indictment — by saying they reserve the right to do so and that it might happen in June.

In a response to Barrack’s claims of discovery hold-ups yesterday, they elaborated on an ongoing investigation into Barrack — and “several” people identified as co-conspirators in the indictment but not yet charged.

The government has made several requests for materials from other executive components of the federal government, and upon receipt of these materials, will promptly disclose any additional items that are discoverable. Additionally, the investigation related to this case is ongoing (we note that one of the charged defendants is a fugitive and the indictment alleges conduct by several unindicted co-conspirators).

There’s at least one person (probably three) whose prior interviews with the FBI are described, but whose names are redacted.

On October 26, 2021, it advised the defendants of statements made by [redacted] during prior interviews with FBI special agents. The government made similar disclosures about statements by [redacted]. These disclosures were made on December 22, 2021, January 14, 2022, January 27, 2022, March 9, 2022 and April 5, 2022.

Defense counsel further requested the underlying notes and FD-302 reports related to the interviews of [redacted] whose discoverable information was previously disclosed to the defense.

It describes that DOJ obtained a good deal of new evidence in the last three months.

By early January 2022, less than six months since indictment, the government substantially completed the disclosure of discoverable material that was currently in its possession. The government has turned over additional material since that time— approximately 80,000 more files—but, with the exception of fewer than 20 files, all of that material came into the government’s possession after January 3, 2022

It describes evidence that, Barrack is sure, would be at Department of Commerce, State, and the White House.

The defendants note that the government “initially took the position that it had no obligation to search for discoverable materials from [other] federal agencies.” See Mot. at 3, 21. The government took and continues to take such a position, because it is legally correct. The defendants argue that the government has a legal obligation to obtain and review materials from other agencies3 because “this is a national security case” and Barrack has had contact with a number of different parts of the federal government. But a case’s status as “a national security case” is not a basis under any existing precedent to impute a duty to obtain and disclose materials held by other agencies.

3 The defendant fails to specify which agencies the prosecution team purportedly has a duty to search, other than to identify “the White House, State Department, Commerce Department and federal intelligence agencies” as examples that a duty to search should be “included but not limited to.” See Mot. at 22.

Even though the government doesn’t think they have to provide everything from those agencies and the White House, they are getting Trump White House documents from the Archives.

Accordingly, the government has requested White House materials from the National Archives and Records Administration and has also requested materials from the U.S. Department of State, U.S. Department of Treasury, U.S. Department of Energy, and U.S. Department of Commerce.5

5 As previously discussed, the prosecution team recently received and produced to defense counsel the responsive documents obtained from the U.S. Department of Commerce.

It describes that just because others received similar requests from the Emirates during the Transition or their time in the Administration as Barrack did, it does not make him less guilty.

Similarly, the defendants request information showing that the taskings Barrack carried out for the UAE “are common requests and were made to other members of the transition or administration.” Id. at 9 ¶ 12. This too is an argument, not an actual discovery request, and an irrelevant argument at that. Whether or not other individuals agreed to act at the direction or control of the UAE, or also met with U.S. officials on behalf of the UAE, does not make Barrack more or less guilty in agreeing to act as an unlawful agent of a foreign government.

In other words, since indicting Barrack, DOJ has continued the investigation, including by using materials that have become available since Trump left the White House.

Most of the people described as co-conspirators are Emiratis that the government wouldn’t risk charging.

But Trump officials are named too. Some of the people described in the indictment — most notably Paul Manafort, who recently found himself unable to fly to Dubai because his passport had been revoked — did things on which a 5-year statute of limitations has expired (though there’s a Barrack-related action Manafort took in 2017 that is not yet time-barred).

But that’s not true of the actions of Steve Bannon described in the indictment. The indictment describes this meeting US Person 1 had with MbZ.

On or about September 13, 2017, the defendant MATTHEW GRIMES sent a text message to the defendant RASHID SULTAN RASHID AL MALIK ALSHAHHI stating, “Heads up, [Emirati Official 1]is meeting with [a former United States goverment official (“U.S. Person 1), an individual whose identity is known to the Grand Jury on Friday. Please keep super confidential.” GRIMES furtheradvised ALSHAHHI that the defendant THOMAS JOSEPH BARRACK and GRIMES “worked hard to show [U.S Person 1] how strong of allies we are. Very hard… [BARRACK] spent lots of time.” AL SHAHHI then confirmed with GRIMES that U.S. Person | “was briefed by [BARRACK] a lot on [Emirati Official 1]and his vision.” GRIMES added that BARRACK “worked hard to show our friendship and alliance,” and that BARRACK had met with U.S. Person I many times in the past several weeks [about this meeting” with Emirati Official 1, in which BARRACK was “[c]hampioning [the] UAE.”

Here’s a contemporaneous report of that meeting.

On Monday, Bannon is scheduled to speak at a day-long conference in Washington organized by the Hudson Institute, a conservative think tank and paid for by multiple donors, entitled “Countering Violent Extremism: Qatar, Iran, and the Muslim Brotherhood.” The speech follows Bannon’s September meeting in the UAE with its crown prince, Sheikh Mohammed bin Zayed al-Nahyan. The two weren’t strangers: Bannon, Trump’s son-in-law Jared Kushner and ousted National Security Adviser Michael Flynn met with the crown prince at Trump Tower during the presidential transition in December. That meeting triggered controversy, as the UAE hadn’t notified the outgoing Obama administration about the visit as is customary.

The report goes on to report on Bannon’s sustained media campaign — the kind of thing you see in Foreign Agent indictments — attacking Emirate rival, Qatar.

Bannon, who through a spokesman declined to comment for this story, has said little publicly about Qatar. But Breitbart News, the far-right website he ran before going into the White House and where he is now once again ensconced, published more than 80 Qatar-related headlines since the blockade began, most of which were critical of the nation.

“Jihad-Friendly Qatar May Have Inspired Former Gitmo Detainees to Return to Terror,” declared a June 15 headline.

Another, 10 days later, read “Report: Qatari Ruling Family Importing Hezbollah Fighters for Protection.”

Bannon has said he is planning to start a global conference series through Breitbart. “We are in advance discussions about having Breitbart sponsor a major security conference in sub-Saharan Africa, the Persian Gulf, central Europe, and East Asia, in early to mid-2018,” he told Bloomberg recently.

This kind of media campaign is the stuff that can get you charged as an undisclosed foreign agent.

Bannon’s not the only one referred to as a not-yet charged co-conspirator. But he is clearly one of them.

DOJ Unseals 18-Month Old Indictment against Lev Parnas’ Financial Backer

Yesterday, SDNY unsealed an indictment against Andrey Muraviev, the Russian national who gave Lev Parnas and Igor Fruman $1 million to spend on pro-cannabis Republican politicians.

SDNY presented the indictment as part of an effort to protect US politics, and it was.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment against ANDREY MURAVIEV, a/k/a “Andrey Muravyov,” a Russian citizen, charging him with making illegal political contributions as a foreign national, and conspiring to make illegal political contributions as a foreign national in the names of straw donors. Muraviev is charged with conspiring with Lev Parnas, Andrey Kukushkin, and Igor Fruman, and others, who were convicted at trial or have pleaded guilty to these crimes.

U.S. Attorney Damian Williams said: “As alleged, Andrey Muraviev, a Russian national, attempted to influence the 2018 elections by conspiring to push a million dollars of his foreign funds to candidates and campaigns. He attempted to corrupt our political system to advance his business interests. The Southern District of New York is committed to rooting out efforts by foreigners to interfere with our elections.”

FBI Assistant Director-in-Charge Michael J. Driscoll said: “As alleged, Muraviev, a Russian foreign national, made illegal political contributions and conspired with Parnas, Kukushkin and Fruman to obscure their true source. The money Muraviev injected into our political system, as alleged, was directed to politicians with views favorable to his business interests and those of his co-conspirators. As today’s action demonstrates, we will continue to aggressively pursue all those who seek to illegally effect [sic] our nation’s elections.”

But I’m still not sure what explains the unsealing of the indictment yesterday. It’s actually exactly the same as S1 — obtained the same day on September 17, 2020 — only with Muraviev charged rather than described as Foreign National-1.

Indictment: October 9, 2019

S1 Indictment: September 17, 2020

S2 Indictment: September 17, 2020 (unsealed March 14, 2022)

s3 Indictment: August 26, 2021

It may be just part of the effort to roll out charges against as many people — along with Jack Hanick and Elena Branson — for Russian influence peddling as possible right now. It may relate to Lev Parnas’ plans to plead guilty to the remaining charged charge against him (the Marie Yovanovitch related charge from the original indictment was removed in S1 to await Rudy’s inclusion).

Or perhaps DOJ unsealed it to make it easier to share with some other entity, such as Federal prosecutors in Florida who are investigating some of the pro-cannabis politicians who received Muraviev’s laundered campaign money.

The Timing of the Jack Hanick Prosecution

Yesterday, SDNY announced the arrest of a former Fox director, Jack Hanick, for continuing to work with Russian oligarch Konstantin Malofeyev after sanctions were imposed on Malofeyev in 2014. Starting in 2013 and continuing through 2017, Hanick had help Malofeyev set up Orthodox TV stations in Russia, Bulgaria, and Greece.

At first glance, this prosecution was pitched as part of DOJ’s response to Russia’s (further) invasion of Ukraine.

U.S. Attorney Damian Williams said: “Konstantin Malofeyev is closely tied to Russian aggression in Ukraine, having been determined by OFAC to have been one of the main sources of financing for the promotion of Russia-aligned separatist groups operating in the sovereign nation of Ukraine. The United States sanctions on Malofeyev prohibit United States citizens from working for or doing business with Malofeyev but as alleged, Hanick violated those sanctions by working directly for Malofeyev on multiple television projects over the course of several years. The Indictment unsealed today shows this Office’s commitment to the enforcement of laws intended to hamstring those who would use their wealth to undermine fundamental democratic processes. This Office will continue to be a leader in the Justice Department’s work to hold accountable actors who would support flagrant and unjustified acts of war.”

“The Justice Department will do everything it can to stamp out Russian aggression and interference,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “As alleged in the indictment, the Russian oligarch Konstantin Malofeyev was previously sanctioned for threatening Ukraine and providing financial support to the Donetsk separatist region. The defendant Hanick knowingly chose to  help Malofeyev spread his destabilizing messages by establishing, or attempting to establish, TV networks in Russia, Bulgaria, and Greece, in violation of those sanctions.”

[snip]

On March 2, 2022, the Attorney General announced the launch of Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.  The task force will leverage all the Department’s tools and authorities against efforts to evade or undermine the economic actions taken by the U.S. government in response to Russian military aggression.

The DOJ press release does acknowledge that Hanick was actually arrested before the Russian invasion started.

Pursuant to the request of the United States, HANICK was provisionally arrested on February 3, 2022, in London, the United Kingdom, with a view toward extradition.

Other details about this case are still more interesting.

The station for which Hanick kept working, TsargradTV, was banned from YouTube in July 2020 — about the same time that the FBI put out a reward for Konstantin Kilimnik’s arrest. Tsargrad challenged Google for the removal, resulting in fines that would have been onerous before the rouble’s crash in the wake of the invasion (though Google likely could not legally pay the fine in any case).

A Russian businessman on a U.S. sanctions list claimed victory over Google (GOOGL.O) in a court case on Thursday and said the U.S. tech giant now faced a potentially heavy fine.

Alphabet’s Google had appealed a Russian court order that it unblock the YouTube account of Tsargrad TV, a Christian Orthodox channel owned by businessman Konstantin Malofeev, or face a daily 100,000 rouble ($1,358) fine that would double each week Google failed to comply.

Tsargrad said the Ninth Moscow Arbitration Court of Appeal upheld the fine. Malofeev also confirmed the verdict to Reuters, but the court could not be reached for comment despite repeated attempts by phone and email.

Google did not respond to a request for comment.

The case reflects Russia’s waning tolerance of foreign technology giants, several of which it has fined this year for failing to delete content Moscow deems illegal.

Tsargrad said the fine would stop compounding when it reached 1 billion roubles ($13.6 million), which it estimated would happen in mid-March next year. After nine months, the 1 billion rouble limit would be removed, it said.

The two parties have engaged in talks since the case first came to light in mid-2020, but Tsargrad said in August it had abandoned talks for a settlement and accused Google of dragging its feet in negotiations.

Only in the wake of Google’s seeming attempt to comply with the 2014 Ukraine sanctions by keeping Tsargrad off YouTube did the FBI interview Hanick. Literally 12 days after Biden’s inauguration, the FBI interviewed Hanick (his indictment doesn’t say where the interview took place).

DOJ obtained the indictment itself on November 4, 2021 — just short of five years after the 2016 election. The indictment was sitting there, sealed, it seems, until Hanick could be arrested in London.

What happened yesterday, then, was not a new response to the Russian invasion. It was, instead, an unveiling of a prior effort to crack down on Ukrainian-based influence peddling, one newly relevant because of the invasion.

The Single-Legged Stool of the Horseshoe Left’s Apology for Putin

All too often, both the Putin-apologist horseshoe left and some good faith members of the anti-war left have adopted a single frame to think of Vladimir Putin’s decision to invade Ukraine: NATO.

In the sloppiest versions, the idea is that Bill Clinton provided “guarantees” to Putin that NATO would not expand, and since NATO has expanded, the US bears all the responsibility for Putin’s invasion of Ukraine.

NATO is undoubtedly a big part of Putin’s grievance. Fiona Hill describes that this moment has been coming since 2007.

Hill: I think there’s been a logical, methodical plan that goes back a very long way, at least to 2007 when he put the world, and certainly Europe, on notice that Moscow would not accept the further expansion of NATO. And then within a year in 2008 NATO gave an open door to Georgia and Ukraine. It absolutely goes back to that juncture.

Back then I was a national intelligence officer, and the National Intelligence Council was analyzing what Russia was likely to do in response to the NATO Open Door declaration. One of our assessments was that there was a real, genuine risk of some kind of preemptive Russian military action, not just confined to the annexation of Crimea, but some much larger action taken against Ukraine along with Georgia. And of course, four months after NATO’s Bucharest Summit, there was the invasion of Georgia. There wasn’t an invasion of Ukraine then because the Ukrainian government pulled back from seeking NATO membership. But we should have seriously addressed how we were going to deal with this potential outcome and our relations with Russia.

But it’s not just NATO. For years, Putin has portrayed any popular uprising for democracy as a CIA plot, a claim that many anti-imperialists championed, thereby denying those calling for democracy any agency. And the 2014 ouster of Viktor Yanukovych (which more complicit members of the horseshoe left claim was simply a coup led by Nazis) set off a concerted plan that incorporated support for Brexit, an attack on US elections in 2016, all conducted in parallel with relentless targeting of Ukraine.

This invasion is the continuation of not just the annexation of Crimea and persistent war in Ukraine’s East, but also the hybrid attacks on Ukraine’s power grid and, via NotPetya, on anyone paying taxes in Ukraine and therefore any international business doing business with it.

Russia’s efforts to cultivate Tories in the UK, populists in the EU, and the Trumpist right, including a good deal of disinformation capitalizing on Trump’s narcissism, was always closely connected to Russia’s closer goals in Ukraine (and, indeed, involved the participation of some of Trump’s closest allies, starting with Paul Manafort and Rudy Giuliani. in Ukraine).

The horseshoe left can’t acknowledge this, of course, because it would amount to admitting that they have been lying in Russia’s service since 2016, conflating their own manufactured “RussiaGate” for Russia’s real attack on US democracy in 2016 and afterwards, debunking the former while repeating Russia’s lies about the latter. Because the horseshoe left can’t admit they were duped into being mouthpieces gleefully attacking democracy, they have real incentive to ignore the ways the Ukrainian invasion is not just a reaction against NATO, but also an attack on democracy, on a rules-based order, on the European project that always aspired (however imperfectly) to improve on the hypocritical liberal aspirations of the United States.

The thing I don’t understand, though, is how little of the horseshoe left’s criticism is about Neoliberalism. If you’re going to attack Bill Clinton, why not attack the way the US pushed shock therapy on former Soviet states, including Russia?

To be sure, Putin is not unhappy with the results of that, and so is not complaining about the imposition of a form of capitalism that allowed Oligarchs to loot the state, and through them, Putin to accumulate power. Putin has made the most of the organized crime that filled the vacuum of the state.

But as the EU has moved with remarkable (though selective) swiftness to pressure Putin through those networks of Oligarchs, as Germany, Italy, and Cyprus took steps it wasn’t clear they would take, a critique of American-led failures of capitalism is especially important, not just to ensure that the Oligarchs do get sanctioned and in hopes that the UK begins to wean itself of Russian dirty money.

Ukraine, with Europe, needs to survive this attack, find a way to rebut the invasion and build a path forward.

But whatever else this moment has done, it has made it clear how easy it was for Russia to pervert democracy in the places proudly claiming to practice it with the least little bit of Oligarch cash. Having ripped off the bandaid of Russian influence, Europe (at least) has the opportunity to formalize protections against purchased influence.

Such lessons, of course, extend beyond Russia to America’s own failed imperial catastrophes, most notably in Afghanistan, where US-backed corruption made it easy for the Taliban to regain credibility by comparison. US hegemony is on the wane because of Green Zone thinking about capitalism, which fostered the kind of corruption that made Putin powerful.

Such lessons extend, as well, to America’s own fragile democracy, subjugated in recent years to endless supplies of corporate cash, which led in 2016 to the election of a man who aspired to impose a kleptocracy every bit as corrupt as Putin’s.

Vladimir Putin has gotten a large swath of anti-imperialist American leftists to parrot a claim that he invaded Ukraine because of NATO, and only because of NATO. Not only has that made them willful apologists for the kind of imperialism they claim to abhor, even while ignoring the direct assault on democracy and the greater aspirations to human rights adopted by Europe. But it has led them to ignore an obvious critique of US and Russian power that would be a necessary component of building a new, more resilient order if we survive this war.

EDNY Notes that Tom Barrack Won’t Explain the Tactical Advantage of Waiting to Charge Him

I continue to follow Tom Barrack’s prosecution with interest, not least because it is the single example of a case that arose out of the Mueller investigation, was largely completed while Trump remained in office, yet was only charged after Merrick Garland took over.

As I noted last month, Barrack filed a motion to dismiss based, in significant part, on the two year delay between the time he interviewed with the FBI and when he was charged.

The government has submitted an omnibus response to Barrack’s filing as well as one from his alleged co-conspirator, Matthew Grimes (whose motion to dismiss focused more closely on the Foreign Agent statute under which they were charged).

The motion shoots down Barrack’s claims that the delays — and the treatment of his interview just like all other non-custodial FBI interviews — will make it harder for him to defend against the false statement charges, noting in part that he had a room full of lawyers with him making their own record of what he said.

Barrack claims that because of the purported delay, he is unable to obtain (1) “critical proof to establish what he was asked and how he answered” questions when he was interviewed in 2019; and (2) evidence of records from others of communications he may have had. Id. Neither has merit.

First, Barrack was represented by multiple attorneys who took notes during the 2019 interview, presumably with the intent of creating the “critical proof to establish what he was asked and how he answered” of which defendant claims he has been deprived. Barrack Mot. at 38. Barrack fails to articulate how these notes would have been more helpful to the defendant if the charges were brought earlier. And Barrack identifies no other proof that he could have gathered regarding his statements at his interview, had he been indicted earlier. As a result, Barrack not only fails to establish a substantial, actual, non-speculative prejudice, but fails to establish any prejudice at all. See Birney, 686 F.2d at 105-06.

More coyly, however, DOJ notes that Barrack has not tried to obtain any records from the Trump administration that might undermine the charges against him nor has he identified any witnesses who would have testified in his favor two years ago who cannot now.

Second, Barrack does not provide a single concrete example of attempts that he has made to obtain documents or offer examples about how these attempts have been thwarted by the passage of time. See Barrack Mot. at 38. He does not specify what documents he could have obtained, from whom he would have obtained them, or make any claims that this evidence would have been admissible. He merely speculates that the evidence could have helped his defense.

[snip]

Finally, Barrack makes a general claim about a loss of memories, without identifying a single witness who is now unavailable due to loss of memory. See Barrack Mot. at 39. “Faded memories or unavailable witnesses are inherent in any delay, even if justifiable.

[snip]

Even were Barrack to provide the names of witnesses with failing memories, this in and of itself would still be insufficient.

[snip]

He must also show that the witness would have testified, withstood cross-examination, and that the jury would have found the witness credible.” (citations omitted)); see also United States v. Valona, 834 F.2d 1334, 1339 (7th Cir. 1987) (noting that prejudice analysis must consider whether the missing witness “would have withstood cross-examination,” whether the jury would have found him a “credible witness,” and whether the testimony, when compared to other trial evidence “would affect the trial outcome” (internal quotation marks and citations omitted)).

Here, Barrack has not alleged that anyone would have been available to testify in the first instance, much less that he or she would have voluntarily agreed to testify at his trial in a way that would help, rather than hurt, Barrack.

There are, surely, witnesses who would have testified in favor of Barrack if they expected their own testimony would be immune from consequences or that they’d be receiving a pardon. Paul Manafort, for example, is a key witness to Barrack’s actions.

The government’s filing reveals more details about the circumstances of his interview in 2019 at which he allegedly lied. After he was alerted to the investigation, he asked for the interview and then — the government claims — he told a number of blatant lies about his own conduct.

After Barrack subsequently became aware that he was being investigated by the FBI for his actions at the behest of the UAE, Barrack, through counsel, contacted the government and affirmatively requested an interview. After the government consented to the request, the interview was scheduled for June 20, 2019, at the law firm offices of Barrack’s counsel in Washington, D.C. FBI special agents traveled from New York to Washington, D.C. to attend the interview. During the interview, Barrack was represented by multiple attorneys and was advised that the interview was entirely voluntary and that he was free to end the interview at any time. During the interview, an FBI special agent took detailed, contemporaneous notes, totaling more than 50 pages. Barrack’s counsel also took contemporaneous notes during the interview, but did not electronically record or transcribe the interview, nor did Barrack ever request that the interview be so recorded or transcribed, despite being the party that requested the interview and set its date, time, and location.

During the interview, Barrack repeatedly and materially lied about the events and activities that underlie Count One and Count Two of the Indictment, including, but not limited to, making misstatements about whether Al Malik proffered policies or requests to Barrack on behalf of the UAE, whether he was ever asked to download a messaging application or acquire a dedicated telephone to communicate with UAE officials, whether he facilitated communications between President-Elect Donald Trump and UAE officials after the 2016 Presidential Election, and whether he provided any guidance or input in arranging a former U.S. official’s meeting with a senior UAE official. Indictment ¶¶ 91-92, 98-107.

As I described, these alleged lies will make the core 18 USC 951 charges far more durable. Indeed, the government makes precisely that point: if Barrack was not intentionally hiding his ties to the Emirates, then why would he tell blatant lies about it?

Although not dispositive to Barrack’s vagueness challenge, if Barrack actually believed that he had done nothing wrong, it is unclear why he allegedly lied to FBI special agents during his voluntary June 20, 2019 interview as set forth in Counts Three through Seven of the Indictment.

But the circumstances of his charges raise questions about how he learned he was under investigation and whether he had any belief that if he lied to protect himself (and Trump) — as so many other Trump associates were prosecuted for doing — he could expect impunity.

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