Posts

How the Concord Management Prosecution Fell Apart

The frothy right and anti-Trump left both politicized DOJ’s decision to dismiss the single count of conspiracy charged against Concord Management and Concord Catering in the Russian troll indictment that Mueller’s team obtained on February 16, 2018. The right — including the President — and the alt-Left are falsely claiming the prosecution against all the trolls fell apart and suggesting this undermines the claims Russia tampered in the 2016 election.

The mainstream left speculated, without any apparent basis, that Bill Barr deliberately undermined the prosecution by classifying some of the evidence needed to prove the case.

The politicization of the outcome is unfortunate, because the outcome raises important policy questions about DOJ’s recent efforts to name-and-shame nation-state activities in cyberspace.

The IRA indictment intersects with a number of important policy discussions

The decision to indict the Internet Research Agency, its owner Yevgeniy Prigozhin, two of the shell companies he used to fund Internet Research Agency (Concord Management and Concord Catering, the defendants against which charges were dropped), and twelve of the employees involved in his troll operations intersects with three policy approaches adopted in bipartisan fashion in recent years:

  • The use of indictments and criminal complaints to publicly attribute and expose the methods of nation-state hackers and the vehicles (including shell companies) they use.
  • A recent focus on Foreign Agents Registration Act compliance and prosecutions in an attempt to crack down on undisclosed foreign influence peddling.
  • An expansive view of US jurisdiction, facilitated but not limited to the role of the US banking system in global commerce.

There is — or should be — more debate about all of these policies. Some of the prosecutions the US has pursued (one that particularly rankles Russia is of their Erik Prince equivalent, Viktor Bout, who was caught in a DEA sting selling weapons to FARC) would instill outrage if other countries tried them with US citizens. Given the way Trump has squandered soft power, that is increasingly likely. While DOJ has obtained some guilty pleas in FARA cases (most notably from Paul Manafort, but Mike Flynn also included his FARA violations with Turkey in his Statement of the Offense), the FARA prosecutions of Greg Craig (which ended in acquittal) and Flynn’s partner Bijan Kian (which ended in a guilty verdict that Judge Anthony Trenga overturned) have thus far faced difficulties. Perhaps most problematic of all, the US has indicted official members of foreign state intelligence services for activities (hacking), though arguably not targets (private sector technology), that official members of our own military and intelligence services also hack. That’s what indictments (in 2014 for hacks targeting a bunch of victims, most of them in Pittsburgh and this year for hacking Equifax) against members of China’s People’s Liberation Army and Russia’s military intelligence GRU (both the July 2018 indictment for the hack-and-leak targeting the 2016 election and an October 2018 one for targeting anti-doping organizations) amount to. Those indictments have raised real concerns about our intelligence officers being similarly targeted or arrested without notice when they travel overseas.

The IRA indictment is different because, while Prigozhin runs numerous mercenary activities (including his Wagner paramilitary operation) that coordinate closely with the Russian state, his employees work for him, not the Russian state. But the Yahoo indictment from 2017 included both FSB officers and criminal hackers and a number of the hackers DOJ has otherwise indicted at times work for the Russian government. So even that is not unprecedented.

The indictment did serve an important messaging function. It laid out the stakes of the larger Russian investigation in ways that should have been nonpartisan (and largely were, until Concord made an appearance in the courts and started trolling the legal system). It asserted that IRA’s efforts to thwart our electoral and campaign finance functions amounted to a fraud against the United States. And it explained how the IRA effort succeeded in getting Americans to unwittingly assist the Russian effort. The latter two issues, however, may be central to the issues that undid the prosecution.

Make no mistake: the IRA indictment pushed new boundaries on FARA in ways that may raise concerns and are probably significant to the decision to drop charges against Concord. It did so at a time when DOJ’s newfound focus on FARA was not yet well-established, meaning DOJ might have done it differently with the benefit of the lessons learned since early 2018. Here’s a shorter and a longer version of an argument from Joshua Fattal on this interpretation of FARA. Though I think he misses something about DOJ’s argument that became clear (or, arguably, changed) last fall, that DOJ is not just arguing that the trolls themselves are unregistered foreign agents, but that they tricked innocent Americans into being agents. And DOJ surely assumed it would likely never prosecute any of those charged, unless one of the human targets foolishly decided to vacation in Prague or Spain or any other country with extradition treaties with the US. So the indictment was a calculated risk, a risk that may not have paid off.

But that’s why it’s worth understanding the decision to drop the prosecution based off the record, rather than presumptions about DOJ and the Russia investigation.

Just the funding side of the conspiracy to defraud indictment got dropped

The first step to understanding why DOJ dropped the charges is to understand what the two Concord entities were charged with. The indictment as a whole charged eight counts:

  • Conspiracy to defraud the United States for preventing DOJ and FEC from policing our campaign finance and election system (and State for issuing visas)
  • Conspiracy to commit wire fraud and bank fraud by using stolen identities to open financial accounts with which to evade PayPal’s security
  • Six counts of aggravated identity theft for stealing the identities of Americans used in the wire and bank fraud

The wire and bank fraud charges remain untouched by DOJ’s decision. If any of those defendants shows up in court, DOJ remains fully prepared to hold them accountable for stealing Americans’ identities to thwart PayPal’s security protocols so as to fool Americans into doing Russia’s work. Such an identity theft prosecution would not rely on the aggressive FARA theory the Concord charge does.

Even still, most of the conspiracy to defraud (ConFraudUS) charge remains.

The two Concord entities were only named in the ConFraudUS charge. The overt acts involving Concord entail funding the entire operation and hiding those payments by laundering them through fourteen different affiliates and calling the payments “software support.”

3. Beginning as early as 2014, Defendant ORGANIZATION began operations to interfere with the U.S. political system, including the 2016 U.S. presidential election. Defendant ORGANIZATION received funding for its operations from Defendant YEVGENIY VIKTOROVICH PRIGOZHIN and companies he controlled, including Defendants CONCORD MANAGEMENT AND CONSULTING LLC and CONCORD CATERING (collectively “CONCORD”). Defendants CONCORD and PRIGOZHIN spent significant funds to further the ORGANIZATION’s operations and to pay the remaining Defendants, along with other uncharged ORGANIZATION employees, salaries and bonuses for their work at the ORGANIZATION.

[snip]

11. Defendants CONCORD MANAGEMENT AND CONSULTING LLC (Конкорд Менеджмент и Консалтинг) and CONCORD CATERING are related Russian entities with various Russian government contracts. CONCORD was the ORGANIZATION’s primary source of funding for its interference operations. CONCORD controlled funding, recommended personnel, and oversaw ORGANIZATION activities through reporting and interaction with ORGANIZATION management.

a. CONCORD funded the ORGANIZATION as part of a larger CONCORD-funded interference operation that it referred to as “Project Lakhta.” Project Lakhta had multiple components, some involving domestic audiences within the Russian Federation and others targeting foreign audiences in various countries, including the United States.

b. By in or around September 2016, the ORGANIZATION’s monthly budget for Project Lakhta submitted to CONCORD exceeded 73 million Russian rubles (over 1,250,000 U.S. dollars), including approximately one million rubles in bonus payments.

c. To conceal its involvement, CONCORD labeled the monies paid to the ORGANIZATION for Project Lakhta as payments related to software support and development. To further conceal the source of funds, CONCORD distributed monies to the ORGANIZATION through approximately fourteen bank accounts held in the names of CONCORD affiliates, including Glavnaya Liniya LLC, Merkuriy LLC, Obshchepit LLC, Potentsial LLC, RSP LLC, ASP LLC, MTTs LLC, Kompleksservis LLC, SPb Kulinariya LLC, Almira LLC, Pishchevik LLC, Galant LLC, Rayteks LLC, and Standart LLC.

Concord was likely included because it tied Prigozhin into the conspiracy, and through him, Vladimir Putin. That tie has been cause for confusion and outright disinformation during the course of the prosecution, as during pretrial motions there were two legal fights over whether DOJ could or needed to say that the Russian state had a role in the operation. Since doing so was never necessary to legally prove the charges, DOJ didn’t fight that issue, which led certain useful idiots to declare, falsely, that DOJ had disclaimed any tie, which is either absurd misunderstanding of how trials work and/or an outright bad faith representation of the abundant public evidence about the ties between Prigozhin and Putin.

By including Concord, the government asserted that it had proof not just that IRA’s use of fake identities had prevented DOJ and the FEC from policing electoral transparency, but also that Putin’s go-to guy in the private sector had used a series of shell companies to fund that effort.

By dropping the charges against the shell companies, that link is partly broken, but the overall ConFraudUS charge (and the charge against Prigozhin) remains, and all but one of the defendants are now biological persons who, if they mounted a defense, would also face criminal penalties that might make prosecution worth it. (I believe the Internet Research Agency has folded as a legal institution, so it would not be able to replay this farce.)

Going to legal war with a shell company

As noted, the indictment included two shell companies — Concord Management and Concord Catering — among the defendants in a period when Russia has increasingly pursued lawfare to try to discredit our judicial system. That’s precisely what happened: Prigozhin hired lawyers who relished trolling the courts to try to make DOJ regret it had charged the case.

As ceded above, DOJ surely didn’t expect that anyone would affirmatively show up to defend against this prosecution. That doesn’t mean they didn’t have the evidence to prove the crimes — both the first level one that bots hid their identities to evade electoral protections, and the second level conspiracy that Prigozhin funded all that through some shell companies. But it likely means DOJ didn’t account for the difficulties of going to legal war against a shell company.

One of the two explanations the government offered for dropping the prosecution admits that the costs of  trying a shell company have come to outweigh any judicial benefits.

When defense counsel first appeared on behalf of Concord, counsel stated that they were “authorized” to appear and “to make representations on behalf” of Concord, and that Concord was fully subjecting itself to the Court’s jurisdiction. 5/9/18 Tr. 5 (ECF No. 9). Though skeptical of Concord’s (but not counsel’s) asserted commitments at the initial appearance, the government has proceeded in good faith—expending the resources of the Department of Justice and other government agencies; incurring the costs of disclosing sensitive non-public information in discovery that has gone to Russia; and, importantly, causing the Court to expend significant resources in resolving dozens of often-complex motions and otherwise ensuring that the litigation has proceeded fairly and efficiently. Throughout, the government’s intent has been to prosecute this matter consistent with the interests of justice. As this case has proceeded, however, it has become increasingly apparent to the government that Concord seeks to selectively enjoy the benefits of the American criminal process without subjecting itself to the concomitant obligations.

From the start, there were ongoing disputes about whether the shell company Concord Management was really showing up to defend against this conspiracy charge. On May 5, 2018, DOJ filed a motion aiming to make sure that — given the uncertainty that Concord had been properly served with a summons, since, “Acceptance of service is ordinarily an indispensable precondition providing assurance that a defendant will submit to the jurisdiction of the court, obey its orders, and comply with any judgment.” Concord’s lawyers responded by complaining that DOJ was stalling on extensive discovery requests Concord made immediately.

Next, an extended and recurrent fight over a protective order for discovery broke out. Prigozhin was personally charged in the indictment along with his shell company. The government tried to prevent defense attorneys from sharing discovery deemed “sensitive” with officers of Concord (Prighozhin formally made himself an officer just before this effort started) who were also defendants without prior approval or at least a requirement such access to take place in the United States, accompanied by a defense attorney lawyer. That fight evolved to include a dispute about whether “sensitive” discovery was limited to just Personally Identifiable Information or included law enforcement sensitive information, too (unsurprisingly, Concord said it only wanted the latter and even demanded that DOJ sift out the former). The two sides established a protective order at start. But in December, after the government had delivered 4 million documents, of which it deemed 3.2 million “sensitive,” Concord renewed their demand that Prighozhin have access to discovery. They trollishly argued that only Prigozhin could determine whether the proper translation of the phrase “Putin’s chef” meant he was the guy who cooked for Putin or actually Putin’s boss. At this point, the US started filing sealed motions opposing the discovery effort, but did not yet resort to the Classified Information Procedures Act, meaning they still seemed to believe they could prove this case with unclassified, albeit sensitive, evidence.

Shortly thereafter, DOJ revealed that nothing had changed to alter the terms of the original protective order, and in the interim, some of the non-sensitive discovery (that is, the stuff that could be shared with Prigozhn) had been altered and used in a disinformation campaign.

The subsequent investigation has revealed that certain non-sensitive discovery materials in the defense’s possession appear to have been altered and disseminated as part of a disinformation campaign aimed (apparently) at discrediting ongoing investigations into Russian interference in the U.S. political system. These facts establish a use of the non-sensitive discovery in this case in a manner inconsistent with the terms of the protective order and demonstrate the risks of permitting sensitive discovery to reside outside the confines of the United States.

With a biological defendant, such a stunt might have gotten the defendant thrown in jail (and arguably, this is one of two moments when Judge Dabney Friedrich should have considered a more forceful response to defiance of her authority). Here, though, the prosecution just chugged along.

Perhaps the best proof that Prigozhin was using Concord’s defense as an intelligence-collecting effort came when, late last year, Concord demanded all the underlying materials behind Treasury’s Office of Foreign Assets Control decision to sanction Prigozhin and his companies. As Friedrich noted in her short notation denying the request, OFAC’s decision to sanction Prigozhin had nothing to do with the criminal charges against Concord. Nevertheless, Prigozhin used the indictment of his shell companies in an attempt to obtain classified information on the decision leading to sanctions being imposed on him.

Prigozhin’s goal of using his defense as a means of learning the US government’s sources and methods was clear from the first discovery request. That — and his unwavering efforts to continue the trolling operations — likely significantly influenced the later classification determination that contributed to DOJ dropping the case.

The government intended to try this case with unclassified information

That’s the other cited reason the government dismissed this case: because a classification determination made some of the evidence collected during the investigation unavailable as unclassified information.

[A]s described in greater detail in the classified addendum to this motion, a classification determination bearing on the evidence the government properly gathered during the investigation, limits the unclassified proof now available to the government at trial. That forces the prosecutors to choose between a materially weaker case and the compromise of classified material.

At the beginning of this case, the government said that all its evidence was unclassified, but that much of it was sensitive, either for law enforcement reasons or the privacy of victims in the case.

As described further in the government’s ex parte affidavit, the discovery in this case contains unclassified but sensitive information that remains relevant to ongoing national security investigations and efforts to protect the integrity of future U.S. elections. At a high level, the sensitive-but-unclassified discovery in this case includes information describing the government’s investigative steps taken to identify foreign parties responsible for interfering in U.S. elections; the techniques used by foreign parties to mask their true identities while conducting operations online; the relationships of charged and uncharged parties to other uncharged foreign entities and governments; the government’s evidence-collection capabilities related to online conduct; and the identities of cooperating individuals and, or companies. Discovery in this case contains sensitive information about investigative techniques and cooperating witnesses that goes well beyond the information that will be disclosed at trial.

Nevertheless, after the very long and serial dispute about how information could be shared with the defendant noted above (especially Prigozhin, as an officer of Concord), later in the process, something either became classified or the government decided they needed to present evidence they hadn’t originally planned on needing.

This is one way, Barr critics suggest, that the Attorney General may have sabotaged the prosecution: by deeming information prosecutors had planned to rely on classified, and therefore making key evidence inaccessible for use at trial.

That’s certainly possible! I don’t rule out any kind of maliciousness on Barr’s part. But I think the available record suggests that the government made a good faith classification decision, possibly in December 2019 or January 2020, that ended up posing new difficulties for proving the case at trial. One possibility is that, in the process of applying a very novel interpretation of FARA to this prosecution, the types of evidence the government needed to rely on may have changed. It’s also possible that Prigozhin’s continued trolling efforts — and maybe even evidence that his trolling operations had integrated lessons learned from discovery to evade detection — made sharing heretofore sensitive unclassified information far more damaging to US national security (raising its classification level).

As discussed below, the record also suggests that the government tried to access some evidence via other means, by subpoenaing it from Concord. But Concord’s ability to defy subpoenas without punishment (which gets back to trying to prosecute a shell company) prevented that approach.

The fight over what criminalizes a troll conspiring to fool DOJ (and FEC)

Over the course of the prosecution, the theory of the ConFraudUS conspiracy either got more detailed (and thereby required more specific kinds of evidence to prove) or changed. That may have contributed to changing evidentiary requirements.

Even as the dispute about whether Concord was really present in the court fighting these charges, Concord’s lawyers challenged the very novel application of FARA by attacking the conspiracy charge against it. This is precisely what you’d expect any good defense attorney to do, and our judicial system guarantees any defendant, even obnoxious Russian trolls who refuse to actually show up in court, a vigorous defense, which is one of the risks of indicting foreign corporate persons.

To be clear: the way Concord challenged the conspiracy charge was often frivolous (particularly in the way that Concord’s Reed Smith lawyers, led by Eric Dubelier, argued it). The government can charge a conspiracy under 18 USC § 371 without proving that the defendant violated the underlying crimes the implementation of which the conspiracy thwarted (as Friedrich agreed in one of the rulings on Concord’s efforts). And on one of the charged overt acts — the conspiracy to hide the real purpose of two reconnaissance trips to the US on visa applications — Concord offered only a half-hearted defense; at trial DOJ would likely have easily proven that when IRA employees came to the US in advance of the operation, they lied about the purpose of their travel to get a visa.

That said, while Concord never succeeded in getting the charges against it dismissed, it forced DOJ to clarify (and possibly even alter) its theory of the crime.

That started as part of a motion to dismiss the indictment based on a variety of claims about the application of FARA to conspiracy, arguing in part that DOJ had to allege that Concord willfully failed to comply with FECA and FARA. The government argued that that’s not how a ConFraudUS charge works — that the defendants don’t have to be shown to be guilty of the underlying crimes. Concord replied by claiming that its poor trolls had no knowledge of the government functions that their secrecy thwarted. Friedrich posed two questions about how this worked.

Should the Court assume for purposes of this motion that neither Concord nor its coconspirators had any legal duty to report expenditures or to register as a foreign agent?

Specifically, should the Court assume for purposes of this motion that neither Concord nor its co-conspirators knowingly or unknowingly violated any provision, civil or criminal, of FECA or FARA by failing to report expenditures or by failing to register as a foreign agent?

The government responded by arguing that whether or not the Russian trolls had a legal duty to register, their deception meant that regulatory agencies were still thwarted.

As the government argued in its opposition and at the motions hearing, the Court need not decide whether the defendants had a legal duty to file reports with the FEC or to register under FARA because “the impairment or obstruction of a governmental function contemplated by section 371’s ban on conspiracies to defraud need not involve the violation of a separate statute.” United States v. Rosengarten, 857 F.2d 76, 78 (2d Cir. 1988); Dkt. No. 56, at 9-13. Moreover, the indictment alleges numerous coordinated, structured, and organized acts of deception in addition to the failure to report under FECA or to register under FARA, including the use of false social media accounts, Dkt. No. 1 ¶¶ 32-34, 36, the creation and use of U.S.- based virtual computer infrastructure to “mask[] the Russian origin and control” of those false online identities, id. ¶¶ 5, 39, and the use of email accounts under false names, id. ¶ 40. The indictment alleges that a purpose of these manifold acts of deception was to frustrate the lawful government functions of the United States. Id. ¶ 9; see also id. ¶ 5 (alleging that U.S.-based computer infrastructure was used “to avoid detection by U.S. regulators and law enforcement”); id. ¶ 58 (alleging later obstructive acts that reflect knowledge of U.S. regulation of conspirators’ conduct). Those allegations are sufficient to support the charge of conspiracy to defraud the United States regardless of whether the defendants agreed to engage in conduct that violated FECA or FARA because the “defraud clause does not depend on allegations of other offenses.”

Friedrich ruled against the trolls, except in doing so stated strongly that the government had conceded that they had to have been acting to impair lawful government functions, though not which specific relevant laws were at issue.

Although the § 371 conspiracy alleged does not require willfulness, the parties’ disagreement may be narrower than it first appears. The government concedes that § 371 requires the specific intent to carry out the unlawful object of the agreement—in this case, the obstruction of lawful government functions. Gov’t’s Opp’n at 16 (“Because Concord is charged with conspiring to defraud the United States, . . . the requisite mental state is the intent of impairing, obstructing, or defeating the lawful function of any department of government through deception.” (internal quotation marks omitted)). Further, the government agrees that to form the intent to impair or obstruct a government function, one must first be aware of that function. See Hr’g Tr. at 40 (“[Y]ou can’t act with an intent to impair a lawful government function if you don’t know about the lawful government function.”). Thus, Concord is correct—and the government does not dispute—that the government “must, at a minimum, show that Concord knew what ‘lawful governmental functions’ it was allegedly impeding or obstructing.” Def.’s Mot. to Dismiss at 22; Def.’s Reply at 5. Here, as alleged in the indictment, the government must show that Concord knew that it was impairing the “lawful functions” of the FEC, DOJ, or DOS “in administering federal requirements for disclosure of foreign involvement in certain domestic activities.” Indictment ¶ 9. But Concord goes too far in asserting that the Special Counsel must also show that Concord knew with specificity “how the relevant laws described those functions.” Def.’s Mot. to Dismiss at 22; Def.’s Reply at 5. A general knowledge that U.S. agencies are tasked with collecting the kinds of information the defendants agreed to withhold and conceal would suffice.

Then Concord shifted its efforts with a demand for a Bill of Particulars. The demand itself — and the government’s opposition — included a demand for information about co-conspirators and VPNs, yet another attempt to get intelligence rather than discovery. But Friedrich granted the motion with respect to the application of FECA and FARA.

In other words, it will be difficult for the government to establish that the defendants intended to use deceptive tactics to conceal their Russian identities and affiliations from the United States if the defendants had no duty to disclose that information to the United States in the first place. For that reason, the specific laws—and underlying conduct—that triggered such a duty are critical for Concord to know well in advance of trial so it can prepare its defense.

The indictment alleges that the defendants agreed to a course of conduct that would violate FECA’s and FARA’s disclosure requirements, see Indictment ¶¶ 7, 25–26, 48, 51, and provides specific examples of the kinds of expenditures and activities that required disclosure, see id. ¶¶ 48– 57. Concord, 347 F. Supp. 3d at 50. But the indictment does not cite the specific statutory and regulatory disclosure requirements that the defendants violated. Nor does it clearly identify which expenditures and activities violated which disclosure requirements. Accordingly, the Court will order the government to:

  • Identify any statutory or regulatory disclosure requirements whose administration the defendants allegedly conspired to impair, along with supporting citations to the U.S. Code, Code of Federal Regulations, or comparable authority.
  • With respect to FECA, identify each category of expenditures that the government intends to establish required disclosure to the FEC. See, e.g., Indictment ¶ 48 (alleging that the defendants or their co-conspirators “produce[d], purchase[d], and post[ed] advertisements on U.S. social media and other online sites expressly advocating for the election of then-candidate Trump or expressly opposing Clinton”) (emphasis added)). The government must also identify for each category of expenditures which disclosure provisions the defendants or their co-conspirators allegedly violated.
  • With respect to FARA, identify each category of activities that the government intends to establish triggered a duty to register as a foreign agent under FARA. See, e.g., id. ¶ 48 (same); id. ¶ 51 (alleging that the defendants or their coconspirators “organized and coordinated political rallies in the United States” (emphasis added)). The government must also identify for each category of activities which disclosure provisions the defendants or their co-conspirators allegedly violated.

In a supplemental motion for a bill of particulars, Concord asked which defendants were obliged to file with DOJ and FEC.

That came to a head last fall. In a September 16, 2019 hearing, both sides and Friedrich discussed at length precisely what the legal theory behind the conspiracy was. On Friedrich’s order, the government provided Concord a list of people (whose names were redacted) that,

the defendants conspired to cause some or all of the following individuals or organizations to act as agents of a foreign principal while concealing from those individuals that they were acting as agents of a foreign principal [who should register under FARA].

That is, whether or not this was the original theory of the case, by last fall the government made it clear that it wasn’t (just) Prigozhin or his trolls who needed to register; rather, it was (also) the Americans who were duped into acting and spending money on their behalf. But because they didn’t know they were working on behalf of a foreign principal, they did not register.

Meanwhile, in a motion for clarification, the government argued that it had always intended to include foreigners spending money in the indictment. Friedrich held that that had not actually been included in the original indictment.

These two issues — the claim that duped Americans would have had to register if they knew they were working with a foreign agent, and the need to strengthen the assertion about foreign campaign expenditures — forced the government to go back and supersede the original indictment.

DOJ obtains a superseding indictment with more specific (and potentially new) theories of the case

On November 8, 2019, the government obtained a superseding indictment to include language about foreign donations that Friedrich had ruled was not in the original indictment and language covering the duped Americans who had unknowingly acted as agents of Russian trolls.

New language in the superseding indictment provided more detail of reporting requirements.

¶1 U.S. law also requires reporting of certain election-related expenditures to the Federal Election Commission.

[snip]

U.S. also imposes an ongoing requirement for such foreign agents to register with the Attorney General.

The paragraph explaining the means of the ConFraudUS added detail about what FEC, DOJ, and State functions the trolls’ deceit had thwarted.

¶7 In order to carry out their activities to interfere in the U.S. political and electoral processes without detection of their Russian affiliation, Defendants conspired to obstruct through fraud and deceit lawful functions of the United States government in monitoring, regulating, and enforcing laws concerning foreign influence on and involvement in U.S. elections and the U.S. political system. These functions include (a) the enforcement of the statutory prohibition on certain election-related expenditures by foreign nationals; (b) the enforcement of the statutory requirements for filing reports in connection with certain election-related expenditures; (c) the enforcement of the statutory ban on acting as an unregistered agent of a foreign principal in the United States; (d) the enforcement of the statutory requirements for registration as an agent of a foreign principal (e) the enforcement of the requirement that foreign national seeking entry into the United States provide truthful and accurate information to the government. The defendants conspired to do so by obtaining visas through false and fraudulent statements, camouflaging their activities by foreign nationals as being conducted by U.S. persons, making unlawful expenditures and failing to report expenditures in connection with the 2016 U.S. presidential election, and failing to register as foreign agents carrying out political activities within the United States, and by causing others to take these actions.

These allegations were repeated in ¶9 in the section laying out the ConFraudUs count.

The superseding indictment added a section describing what FEC and DOJ do.

¶25 One of the lawful functions of the Federal Election Commission is to monitor and enforce this prohibition. FECA also requires that individuals or entities who make certain independent expenditures in federal elections report those expenditures to the Federal Election Commission. Another lawful government function of the Federal Election Commission is to monitor and enforce this reporting requirement.

[snip]

¶26 The U.S. Department of Justice enforces the Foreign Agent Registration Act (“FARA”), which makes it illegal to act in the United States as an “agent of a foreign principal,” as defined at Title 22, United States Code, Section 661(c), without following certain registration, reporting, and disclosure requirements established by the Act. Under FARA, the term “foreign principal” includes foreign non-government individuals and entities. FARA requires, among other things, that persons subject to its requirements submit periodic registration statements containing truthful information about their activities and income earned from them. One of the lawful government functions of the Department of Justice is to monitor and enforce this registration, reporting, and disclosure regime.

In perhaps the most interesting addition, the superseding indictment also added language to include the actions of unwitting Americans.

¶48 …and caused unwitting persons to produce, purchase, and post advertisements on U.S. social media and other online sites expressly advocating for the election of then-candidate Trump or expressly opposing Clinton. Defendants and their co-conspirators did not report these expenditures to the Federal Election Commission, or register as foreign agents with the U.S. Department of Justice, nor did any of the unwitting persons they caused to engage in such activities.

The superseding indictment repeated this “unwitting” language in ¶51.

This superseding indictment is significant for two reasons, given the dismissal of the count against the two Concord defendants. First, the possibly changed theory of the conspiracy may have changed what evidence the government needed to prove the crime. For example, it may be that DOJ has evidence of IRA employees acknowledging, for the period of this indictment, that spending money on these activities was illegal, whether or not they knew they had to report such expenditures. It may be that DOJ has evidence of communications between the trolls and actual Americans they otherwise wouldn’t have had to rely on. It may be that DOJ has evidence about the regulatory knowledge of those same Americans about their own reporting obligations. Some of this evidence might well be classified.

Just as importantly, if Bill Barr wanted to jettison this prosecution, he could have done so last November by refusing to permit the superseding indictment. That likely would have undermined the case just as surely (and might have led Friedrich to dismiss it herself), and would have been far better for Trump’s messaging. Moreover, from that point in time, it would have been clear that trial might introduce evidence of how three Trump campaign officials coordinated (unknowingly) with the Russian trolls, something bound to embarrass Trump even if it posed no legal hazard. If Barr had wanted to undermine the prosecution to benefit Trump, November would have been the optimal time to do that, not February and March.

While it’s not clear whether this superseding indictment changed certain evidentiary challenges or not, three key strands of activity that seem to have resulted in the dismissal started only after the superseding: an effort to authenticate digital evidence on social media activity, an effort to subpoena some of that same evidence, and the CIPA process to try to substitute for classified information.

The government goes to some lengths to try to pre-approve normally routine evidence

The last of those efforts, chronologically, may hint at some of the evidentiary issues that led DOJ to drop the case.

In a motion submitted on February 17, the government sought to admit a great deal of the social media and related forensic data in the case. In many trials, this kind of evidence is stipulated into evidence, but here, Concord had been making it clear it would challenge the evidence at trial. So the government submitted a motion in limine to try to make sure it could get that evidence admitted in advance.

Among the issues raised in the motion was how the government planned to authenticate the IP addresses that tied the IRA trolls to specific Facebook and Twitter accounts and other members of the conspiracy (Prigozhin, Concord, and the interim shell companies) to each other. The government redacted significant sections of the filing describing how it intended to authenticate these ties (see, for example, the redaction on page 8, which by reference must discuss subscriber information and IP addresses, and footnote 7 on page 9, the redaction pertaining to how they were going to authenticate emails on page 16, the very long redaction on how they would authenticate emails between IRA and Concord starting on page 17, and the very long redaction on how they were going to authenticate Prigozhin to the IRA starting on page 21).

Concord got special permission to write an overly long 56-page response. Some of it makes it clear they’re undermining the government’s efforts to assert just that, for example on IP addresses.

IP addresses, subscriber information, and cookie data are not self-authenticating. The first link in the government’s authentication argument is that IP addresses,6 subscriber information, and cookie data are self-authenticating business records under Rules 803(6) and 902(11). But the cases the government cites are easily distinguishable and undercut its argument.

6 The IP addresses do not link an account to a specific location or fixed address. For example, for the Russian IP addresses the government indicates that they were somewhere within the city of St. Petersburg, Russia.

[snip]

It should come as no surprise then, given the lack of reliability and untrustworthiness in social media evidence such as that the government seeks to introduce, that the case law forecloses the government’s facile effort at authentication of content here. Unlike Browne, Lewisbey, and the other cases cited above, the government has offered no social media accounts bearing the name of any alleged conspirator and no pictures appearing to be a conspirator adorning such page.7 Nor has the government pointed to a single witness who can testify that she saw a conspirator sign up for the various social media accounts or send an email, or who can describe patterns of consistency across the various digital communications to indicate they come from the same source.

7 The government has indicated to Concord that it intends to introduce at trial Fed. R. Evid. 1006 summaries of IP address records, apparently to create the link between the social media accounts and IRA that is not addressed in the motion. See Ex. B, Jan. 6, 2020 letter. Despite repeated requests from undersigned counsel, the government has identified the 40 social media accounts for it intends to summarize but has not provided the summaries or indicated when it will do so.

Some of this is obviously bullshit, particularly given the government’s contention, elsewhere, that Concord (or IRA, if it was a typo) had dedicated IP addresses. Mostly, though, it appears to have been an attempt to put sand in the wheels of normal criminal prosecution by challenging stuff that is normally routine. That doesn’t mean it’s improper, from a defense standpoint. But given how often DOJ’s nation-state indictments rely on such forensic evidence, it’s a warning about potential pitfalls to them.

The government resorts to CIPA

Even while the government had originally set out to prove this case using only unclassified information, late in the process, it decided it needed to use the Classified Information Procedures Act. That process is where one would look for any evidence that Barr sabotaged the prosecution by classifying necessary evidence (though normally the approval for CIPA could come from Assistant Attorney General for National Security Division John Demers, who is not the hack that Barr is).

In October 2019, Friedrich had imposed a deadline for CIPA if the government were going to use it, of January 20, 2020.

On December 17, the government asked for a two week delay, “to ensure appropriate coordination within the Executive Branch that must occur prior to the filing of the motion,” a request Friedrich denied (even though Concord did not oppose it). This was likely when the classification determination referenced in the motion to withdraw was debated, given that such determinations would dictate what prosecutors had to do via CIPA.

On January 10, 2020, the government filed its first motion under CIPA Section 4, asking to substitute classified information for discovery and use at trial. According to the docket, Friedrich discussed CIPA issues at a hearing on January 24. Then on January 29 and February 10, she posted classified orders to the court security officer, presumably as part of the CIPA discussion.

On February 13, the government asked for and obtained a one-day extension to file a follow-up CIPA filing, from February 17 to February 18, “to complete necessary consultation within the Executive Branch regarding the filing and to ensure proper supervisory review.” If Barr intervened on classification issues, that’s almost certainly when he did, because this happened days after Barr intervened on February 11 in Roger Stone’s sentencing and after Jonathan Kravis, who had been one of the lead prosecutors in this case as well, quit in protest over Barr’s Stone intervention. At the very least, in the wake of that fiasco, Timothy Shea made damn sure he ran his decision by Barr. But the phrase, “consultation within the Executive Branch,” certainly entertains consultation with whatever agency owned the classified information prosecutors were deciding whether they could declassify (and parallels the language used in the earlier request for a filing extension). And Adam Jed, who had been part of the Mueller team, was added to the team not long before this and remained on it through the dismissal, suggesting nothing akin to what happened with Stone happened here.

The government submitted its CIPA filing on the new deadline of February 18, Friedrich issued an order the next day, the government filed another CIPA filing on February 20, Friedrich issued another order on February 28.

Under CIPA, if a judge rules that evidence cannot be substituted, the government can either choose not to use that evidence in trial or drop the prosecution. It’s likely that Friedrich ruled that, if the government wanted to use the evidence in question, they had to disclose it to Concord, including Prigozhin, and at trial. In other words, that decision — and the two earlier consultations (from December to early January, and then again in mid-February) within the Executive Branch — are likely where classification issues helped sink the prosecution.

It’s certainly possible Bill Barr had a key role in that. But there’s no explicit evidence of it. And there’s abundant reason to believe that Prigozhin’s extensive efforts to use the prosecution as an intelligence-gathering exercise both for ongoing disinformation efforts and to optimize ongoing trolling efforts was a more important consideration. Barr may be an asshole, but there’s no evidence in the public record to think that in this case, Prigozhin wasn’t the key asshole behind a decision.

DOJ attempts to treat Concord as a legit party to the court’s authority

Even before that CIPA process started playing out, beginning on December 3, the government pursued an ultimately unsuccessful effort to subpoena Concord. This may have been an attempt to obtain via other means evidence that either had been obtained using means that DOJ had since decided to classify or the routine authentication of which Concord planned to challenge.

DOJ asked to subpoena a number of things that would provide details of how Concord and Prigozhin personally interacted with the trolls. Among other requests, the government asked to subpoena Concord for the IP addresses it used during the period of the indictment (precisely the kind of evidence that Concord would later challenge).

3. Documents sufficient to identify any Internet Protocol address used by Concord Management and Consulting LLC from January 1, 2014 to February 1, 2018.

Concord responded with a load of absolute bullshit about why, under Russian law, Concord could not comply with a subpoena. Judge Friedrich granted the some of the government’s request (including for IP addresses), but directed the government to more narrowly tailor its other subpoena requests.

On December 20, the government renewed its request for other materials, providing some evidence of why it was sure Concord had responsive materials. Concord quickly objected again, again wailing mightily. In its reply, the government reminded Friedrich that she had the ability to order Concord to comply with the subpoena — and indeed, had gotten Concord’s assurances it would comply with orders of the court when it first decided to defend against the charges. It even included a declaration from an expert on Russian law, Paul Stephan, debunking many of the claims Concord had made about Russian law. Concord wailed, again. On January 24, Friedrich approved the 3 categories of the subpoena she had already approved. On January 29, the government tried again, narrowing the request even to — in one example — specific days.

Calendar entries reflecting meetings between Prigozhin and “Misha Lakhta” on or about January 27, 2016, February 1, 2016, February 2, 2016, February 14, 2016, February 23, 2016, February 29, 2016, May 22, 2016, May 23, 2016, May 28, 2016, May 29, 2016, June 7, 2016, June 27, 2016, July 1, 2016, September 22, 2016, October 5, 2016, October 23, 2016, October 30, 2016, November 6, 2016, November 13, 2016, November 26, 2016, December 3, 2016, December 5, 2016, December 29, 2016, January 19, 2017, and February 1, 2017.

Vast swaths of the motion (and five exhibits) explaining why the government was sure that Concord had the requested records are sealed. Concord responded, wailing less, but providing a helpful geography lesson to offer some alternative explanation for the moniker “Lakhta,” which the government has long claimed was the global term for Prigozhin’s information war against the US and other countries.

But the government fails to inform the Court that “Lakhta” actually means a multitude of other things, including: Lake Lakhta, a lake in the St. Petersburg area, and Lakhta Center, the tallest building in Europe, which is located in an area within St. Petersburg called the Lakhta-Olgino Municipal Okrug.

On February 7, Friedrich largely granted the government’s subpoena request, approving subpoenas to get communications involving Prigozhin and alleged co-conspirators, as well as records of payments and emails discussing them.  That same day and again on February 21, Concord claimed that it had communicated with the government with regards to the subpoenas, but what would soon be clear was non-responsive.

On February 27, the government moved to show cause for why Concord should not be held in contempt for blowing off the subpoenas, including the request for IP addresses and the entirety of the second subpoena (for meetings involving Prigozhin and records of payments to IRA). Concord wailed in response. The government responded by summarizing Concord’s response:

Concord’s 18-page pleading can be distilled to three material points: Concord’s attorneys will not make any representations about compliance; Concord will not otherwise make any representations about compliance; and Concord will not comply with a court order to send a representative to answer for its production. The Court should therefore enter a contempt order and impose an appropriate sanction to compel compliance.

Friedrich issued an order that subpoena really does mean subpoena, demanding some kind of representation from Concord explaining its compliance.  In response, Prigozhin sent a declaration partly stating that his businesses had deleted all available records, partly disclaiming an ability to comply because he had played games with corporate structure.

With respect to category one in the February 10, 2020 trial subpoena, Concord never had any calendar entries for me during the period before I became General Director, and I became General Director after February 1, 2018, so no searches were able to be performed in Concord’s documents. Concord did not and does not have access to the previous General Director’s telephone from which the prosecution claims to have obtained photographs of calendars and other documents, so Concord is unable to confirm the origin of such photographs.

He claimed to be unable to comply with the request for IP addresses because his contractors “cannot” provide them.

In order to comply with category three in the trial subpoena dated January 24, 2020, in Concord’s records I found contracts between Concord and Severen-Telecom JSC and Unitel LLC, the two internet service providers with which Concord contracted between January 1, 2014 and February 1, 2018. Because these contracts do not identify the internet protocol (“IP”) addresses used by Concord during that period, on January 7, 2020 I sent letters on behalf of Concord to Severen-Telecom JSC and Unitel LLC transmitting copies of these contracts and requesting that the companies advise as to which IP addresses were provided to or used by Concord during that period. Copies of these letters and English translations, as well as the attached contracts, are attached as Exhibits 2 and 3. Severen-Telecom JSC responded in writing that the requested information cannot be provided. A copy of Severen-Telecom JSC’s letter and an English translation are attached as Exhibit 2. Unitel LLC responded that information regarding IP addresses cannot be provided. A copy of Unitel LLC’s letter and an English translation of is attached as Exhibit 3. Accordingly, Concord does not have any documents that could be provided in response to category three (3) of the January 24, 2020 subpoena.

The government responded by pointing out how bogus Prigozhin’s declaration was, not least his insistence that any oligarch like him would really be the person in charge of his companies’ record-keeping. It also described evidence — which is redacted — that Concord had an in-house IT provider at the time (though notes that “as the Court knows, it appears that Concord [sic; this is probably IRA] registered and maintained multiple dedicated IP addresses during the relevant time period”). It further noted that the date that Prigozhin claimed his company started destroying records after 3 months perfectly coincided to cover the start date of this subpoena. In short, it provided fairly compelling evidence that Prigozhin, after agreeing that his company would be subject to the authority of the court when it first filed an appearance in the case, was trolling the court from the safety of Russia.

On March 5, Judge Friedrich nevertheless allowed that bullshit response in her court and declined to hold Concord in contempt. Eleven days later, the government moved to dismiss the case.

The government files the motion to dismiss before the evidentiary dispute finishes but after the subpoena and CIPA fail

On March 16 — 17 days after what appears to be the final CIPA order and 11 days after Friedrich declined to hold Concord or Prigozhin in contempt, and one day before the government was due to file a follow-up to its motion in limine to authenticate normally routine evidence in the case — the government moved to dismiss the case.

While it’s unclear what evidence was deemed to be classified late in the prosecution (likely in December), it seems fairly clear that it affected (and possibly was a source or method used to collect) key forensic proof in the case. It’s also unclear whether an honest response to the government’s trial subpoenas would have replaced that evidence.

What is clear, however, is that there is sufficient explanation in the public record to support the government’s explanation — that Prigozhin was using the prosecution to reap benefits of obtaining information about US government efforts to thwart his activities without risking anything himself. And whether or not the government would be able to prove its case with the classification and CIPA decisions reflected in the docket, the trial itself would shift more evidence into the category of information that would get shared with Prigozhin.

None of that disproves that Barr sabotaged the case. But it does provide sufficient evidence to explain why DOJ dismissed the case, without assuming that Barr sabotaged it.

Other cases of interest

As noted above, not only do the identity theft related charges remain, but so does the ConFraudUS case for all the biological defendants, including Prigozhin. It may be that, given the opportunity to imprison Prigozhin in the highly unlikely event that he ever showed up in the US for trial, the classification trade-offs would be very different.

But there are three other legal issues of interest, given this outcome.

First, there’s one more unsurprising detail about the superseding indictment: It also included an end-date, January 2018. That’s not surprising because adding later activities probably would presented all sorts of problems given how advanced the trial was last November. But it’s also significant because it means double jeopardy would not attach for later activities. So the government could, if the calculus on classification ever changed, simply charge all the things Prigozhin and his trolls have been doing since January 2018 in an indictment charged under its revised theory.

That’s particularly significant given that, in September 2018, prosecutors in EDVA charged Prigozhin’s accountant, Elena Alekseevna Khusyaynova. Even at the time, I imagined it might be a vehicle to move the IRA prosecution if anything happened to it in DC. Unsurprisingly, given that she’s the accountant at the center of all this, the Khusyaynova complaint focused more closely on the money laundering part of the prosecution. Plus, that complaint incorporated evidence of Prigozhin’s trolls reveling in their own indictment, providing easy proof of knowledge of the legal claims DOJ made that didn’t exist for the earlier indictment. None of that would change the calculus around classified evidence (indeed, some of the overt acts described in the Khusyaynova complaint seem like the kind of evidence that Prigozhin would have turned over had he complied with the Concord subpoena. So there is another vehicle for such a prosecution, if DOJ wanted to pursue it.

Finally, Prigozhin has not succeeded with all his attempts to wage lawfare in support of his disinformation efforts. In January, he lost his bid to force Facebook to reinstate his fake news site, Federal Agency of News, based off an argument that because Facebook worked so closely with the government, it cannot exercise its own discretion on its private site. As I laid out here, the suit intersected with both the IRA indictment and Khusyaynova complaint, and engaged in similar kinds of corporate laundry and trollish bullshit. The decision was a no-brainer decision based on Section 230 grounds, giving providers immunity when they boot entities from their services. But the decision also confirms what is already evident: when it comes to shell companies in the business of trolling, thus far whack-a-mole removals have worked more consistently than seemingly symbolic prosecution.

DOJ may well revisit how it charged this to try to attach a FARA liability onto online disinformation. But ultimately the biological humans, not the corporation shells or the bots, need to be targeted.

The President’s Conspiracy Theories Get More Whacko than George Papadopoulos’

Perhaps because the entire legal establishment is pushing back against Bill Barr’s wholesale politicization of DOJ, the President is disturbed on Twitter. After launching a 3-tweet tirade against juror Tameka Hart and Judge Amy Berman Jackson based off a Judge Andrew Napolitano appearance on Fox on Friends (that perhaps unsurprisingly neglects to remind his followers that Napolitano made a case in favor of Trump’s removal by the Senate). he then launched a 3-tweet tirade against the Stone prosecution more generally.

I’m interested in it because of the way Trump attempts to deploy all the other conspiracy theories he has against the Russian investigation to the Stone prosecution, to which they simply don’t apply.

Start with the way Trump claims that 1) the Mueller investigation was “illegally set up” based on the Steele dossier and 2) “forging documents to the FISA Court.”

This is a conceit that has worked well since Paul Manafort, fresh off a meeting with an Oleg Deripaska deputy, suggested Trump could use attacks on the dossier to attack the Mueller Report.

Except one glaring fault of the dossier is that Roger Stone, who had already made comments that suggested he had a direct role in the operation by the time FBI opened investigations on the four initial subjects of it, doesn’t appear in the Steele dossier.

Moreover, whatever else the DOJ IG Report on the Carter Page FISA applications showed, it also showed that the predication of the investigation had nothing to do with the Steele dossier; in fact, Steele’s reports didn’t make it to the investigative team until about six weeks after opening the investigation.

Further, the suggestion that Kevin Clinesmith’s alteration of an email in June 2017 to claim that Page was “not a source” for CIA had anything to do with Roger Stone’s investigation falls flat given that Mueller’s team obtained the first warrant targeting Roger Stone on August 4, 2017, and there’s no insinuation anywhere that Stone ever spoke with Carter Page. (Indeed, in spring 2016, Stone was bitching to Rick Gates that he was not in the loop of foreign policy discussions.) In fact, had Roger Stone been more closely associated with Trump’s freebie foreign policy team, than both Page and George Papadopoulos’ claims to know nothing of campaign efforts to optimize WikiLeaks’ releases would be anything but exculpatory, as DOJ IG treated them, since Stone was doing just that in the time period when they were asked by informants.

Plus, Robert Mueller testified under oath that his team didn’t have anything to do with the Carter Page FISA order. And the investigative record shows that the investigation into Page was largely done by the time Mueller took over.

There’s simply no tie between either the Steele dossier or the Page FISA warrants and Roger Stone’s prosecution.

Trump continues to claim that Mueller interviewed to be FBI Director, even after evidence showing that Steve Bannon, Reince Priebus, and Don McGahn debunked this in real time, not to mention Rod Rosenstein’s 302 that shows that Mueller specifically said he did not want to be interviewed before he met with Trump about Jim Comey’s replacement. That is, a bunch of witnesses — all Republicans — say Trump is wrong.

The most interesting accusation is that the prosecutors who won a conviction against Stone “were Mueller prosecutors.”

Two were: Aaron Zelinsky and Adam Jed.

But two weren’t. Jonathan Kravis (the sole prosecutor who quit DOJ entirely) and Michael Marando were career DC prosecutors brought in to prosecute the case after Mueller shut down. These were, pointedly, not Mueller prosecutors, and the case still went off without a hitch.

In fact, in his interview the other day, Bill Barr made quite clear that this prosecution happened on his watch, and he believes it’s a righteous prosecution.

BARR: Well, as you know, the Stone case was prosecuted while I was attorney general. And I supported it. I think it was established, he was convicted of obstructing Congress and witness tampering. And I thought that was a righteous prosecution. And I was happy that he was convicted.

If Trump has a problem with the guy who prosecuted the case against Roger Stone, he has a problem with his Attorney General Bill Barr.

Which may be why Trump — who shouldn’t be affected by mere lies by Roger Stone to Congress — is threatening to “sue everyone all over the place.” Of course, he is affected by Stone — Stone is going to prison to protect the President, to avoid describing the multiple conversations they had about optimizing the WikiLeaks releases. And suing (whom?!?!) won’t help Trump suppress that.

The President sounds crazier than George Papadopoulos in this rant, and his conspiracy theories are just as unhinged. Which is, I guess, what happens when all the conspiracy theories you’ve been using to undermine the prosecution implicating you turn out to be utterly irrelevant to the most important firewall to protect.

The Timeline Suggests Bill Barr Removed Jesse Liu to Intervene for Trump’s Rat-Fucker

Far be it for me to doubt Bill Barr’s ability to manufacture a cover-up. He’s damn good at it, that’s why he was hired, and he’s got a lot of power to use to execute one.

But it’ll be harder this time around than it was for Poppy Bush, in part because Barr’s principal has the propensity to go off half-cocked, the frothy right doesn’t think rationally, and Barr himself may believe what he sees on Fox News more than what he sees in court dockets, to the extent he even reviews court dockets.

That’s particularly true given the timeline leading up to the Tuesday Night Massacre, because it appears to show that Bill Barr removed Jessie Liu — and then Trump withdrew her nomination excusing that removal — mostly (at least as far as what is visible thus far) to intervene for Trump’s rat-fucker, Roger Stone.

At least as the timing of the DOJ filings reflect, Barr intervened with the strategy he claimed to Pierre Thomas to apply with Roger Stone with Mike Flynn, providing reasons for Judge Emmet Sullivan to sentence lightly, but leaving it up him. Importantly, Jessie Liu proved willing to do that on January 29; she signed the softened Flynn sentencing memo (though it’s possible Trump submitted her nomination on January 6 in response to the discussions around the initial, harsher memo).

The next day, per dates included in the Roger Stone sentencing memo, DOJ submitted an objection to the January 16 Presentence Investigation Report.

Probation and the Government, however, incorrectly maintain that the following offense level increases are applicable:

Specific Offense Characteristics U.S.S.G. §2J1.2(b)(1)(B) 8 level increase ¶76 1

Specific Offense Characteristics U.S.S.G. §2J1.2(b)(1)(2) 3 level increase ¶77

Obstruction of Justice U.S.S.G. §3C1.1 2 level increase ¶80

Obstruction of Justice 2 U.S.S.G. §2J1.2(b)(3)(C) 2 level increase ¶77

1 Paragraph references are to the Presentence Investigation Report, dated January 16, 2020, (“PSR”). [Dkt. #272].

2 Government’s Objection to Presentence Investigation Report, dated January 30, 2020.

Possibly, given footnote 2, they added language to substantiate the extent to which Stone went to sustain his cover-up.

Pursuant to U.S.S.G. § 2B1.2(b)(3)(C), two levels are added because the offense was otherwise extensive in scope, planning, or preparation. Stone engaged in a multi-year scheme involving (1) false statements in sworn testimony; (2) the concealment of important documentary evidence; (3) further lies in a written submission to Congress; and (4) a relentless and elaborate campaign to silence Credico that involved cajoling, flattering, crafting forged documents, badgering, and threatening Credico’s reputation, friend, life, and dog. Stone’s efforts were as extensive, if not more extensive, than those of other defendants who received this two-level enhancement at sentencing.

That’s when Barr appointed Timothy Shea as interim US Attorney, effective just two business days later, the one way to take Jessie Liu out of the command structure immediately.

According to Barr’s interview, Shea started asking questions about Stone’s sentencing a week before the memo got submitted. That means Shea spent his first day focused on the Stone sentencing. That makes it hard to believe he was installed for any other reason but to help Stone out.

The first Trump-related motions — basically to remove Flynn’s attorney-client privilege so Covington’s lawyers can expound on how many lies Flynn told them about Russia and his work for Turkey — showed no discernible Barr influence (though Flynn’s reversal on continuing these discussions may have).

Barr provided several somewhat contradictory explanations for what happened on February 10 to Thomas. He claims that Shea “came by” DOJ and alerted Barr that line prosecutors still wanted to recommend the 7-9 year sentence calculated by the Probation Office. Then Barr suggested that he got involved here because line prosecutors who have decades of experience are too junior to make “life or death” decisions.

What other industry allows life or death decisions to be made by the most junior level of the business.

Not long later, however, Barr denied intervening in a case.

Most cases don’t come up to the Attorney General because people are doing a good job.

Some people saying AG intervening in a case. That’s preposterous! We have an escalation system that tries to get the difficult issues that are, you know, people are arguing about, to get them up for resolution and it’s the Attorney General’s decision to decide it.

But here’s the key: Barr claims he only got involved in Stone’s sentencing memo because “difficult issues” got escalated.

Except they only got escalated because he had just installed his hand-picked flunky to oversee this. This wouldn’t have been escalated if Liu were still in place.

All the evidence suggests that Bill Barr replaced Jessie Liu to give himself an excuse to intervene personally in Stone’s sentencing.

And what will it get him? I suspect Judge Amy Berman Jackson would never have sentenced Stone to 7 to 9 years —  the harsher sentence — in any case (especially given that she only gave Paul Manafort 7.5 years). She probably would have given Stone 4-5 years and might still, a slight enhancement for the threat against Randy Credico, but not much. But this drama about sentencing is likely not the big question, given that Stone is likely to have his sentence commuted, one way or another, on November 4, the day after election day. So the real question is how much of the next nine months he serves in prison, which ABJ has some control over, especially given Stone’s propensity to make threats when he’s not in prison or gagged. If ABJ sentences Stone to 4-5 years — close to what Barr has now signed off on in very public and intrusive fashion — but sends him to prison right away, it’s less likely Trump will do something immediate, like pardon him. Whereas, had Barr not intervened, it would have had the same effect but without Barr’s tacit approval for a 3-4 year sentence.

I can’t decide whether the plan here is to make judges look unreasonable — which could happen when Sullivan sentences Flynn to prison, except for the really atrocious details about how Flynn was secretly working for a frenemy government while purportedly advising Trump on national security issues. Or whether it’s to minimize sentence time — which Barr hasn’t done by endorsing a sentence just a year or so less than what ABJ might be inclined to give anyway.

Meanwhile, after inventing a way to remove Jessie Liu immediately, Lou Dobbs and a bunch of other frothers convinced the President to withdraw her nomination, possibly encouraged by the threat of questions about all this in her confirmation hearing, which was scheduled for yesterday. She resigned yesterday from whatever desk Trump parked her at to make way for Shea. She’s a pretty loyal Trumpster, so it’s unclear whether she’ll go quietly. But if she chooses, as a private citizen she’s now entitled to respond to subpoenas from Congress, and between her and Jonathan Kravis (who also resigned entirely from DOJ), she can explain what is really going on.

Meanwhile, Shea is now on the clock: he has until June 2 to complete shutting down any investigations into Trump. Unless the Senate confirms a successor that has not yet been confirmed, then Chief Judge Beryl Howell will be able to pick his replacement. And she was none too happy about this week’s drama.


December 10, 2019: Trump announces intent to nominate Jessie Liu to Treasury

January 4: DOJ asks for one more day to submit Flynn supplemental sentencing memorandum; signed by Liu

January 6: Trump nominates Liu to Treasury

January 7: DOJ submits harsh sentencing memo that nevertheless asks for guidelines sentence; signed by Liu

January 16: Probation Office completes Stone PSI recommending 7-9 years

January 22: DOJ notices court that they’ve provided the last of the Flynn 302s; signed by Liu

January 29: DOJ submits reply sentencing memo, with probation recommendation; signed by Liu

January 30: DOJ submits objection to Stone PSI; Barr appoints Timothy Shea DC US Attorney, effective February 3

February 3: Shea starts; per ABC interview, starts asking questions about the sentencing

February 5: Senate acquits Trump

February 9: DOJ files motion to continue briefing schedule and motion to confirm waiver of attorney-client privilege; signed by Jocelyn Ballentine; Brandon Van Grack not on motions, but probably in preparation for hearing

February 10: Shea “comes by” DOJ and tells Barr the team wanted to recommend 7-9 recommendation; Barr “under the impression” that “what was going to happen was what I had suggested;” DOJ files sentencing memo recommending 7-9 years; Barr claims he decided at night to amend recommendation

February 11:

3:07: Aaron Zelinsky withdrawal

3:56: Jonathan Kravis withdrawal

4:34: John Crabb Jr. files appearance

4:40: Supplemental sentencing memo created, signed by John Crabb Jr

5:27: Adam Jed withdrawal

5:39: Michael Marando withdrawal

6:10: Supplemental sentencing memo finalized

February 12: Trump withdraws Liu’s nomination; DOJ submits response to motion to dismiss; signed by Brandon Van Grack; Jessie Liu resigns from Treasury desk she was parked at to make way for Shea

February 13: Bill Barr does staged interview where he dodges any real explanation for his interference

June 2: Timothy Shea’s interim appointment expires

In Addition to Mueller, Six People Are Prosecuting Paul Manafort … and Trump Has No Appropriate Defense Attorney

Because I’ve been obsessing about how Robert Mueller is using his 17 prosecutors, I wanted to note that three different collections of people have signed the responses to Paul Manafort’s challenges to his indictment. On Monday’s response to the challenge to Mueller’s authority generally, Michael Dreeben and Adam Jed appeared, but Kyle Freeny, who has been a member of this team, did not.

On the response to Manafort’s challenge of a money laundering charge and its forfeiture allegation, Freeny is included, as well as Scott Meisler, but not the other two appellate specialists.

On the response to Manafort’s bid to dismiss one of his two false statements charges, just Weissmann, Andres, and Meisler appear.

So even the prosecution of just one defendant, Mueller has now deployed three primary prosecutors and three different appellate specialists.

Meanwhile, the President can’t even find one competent defense attorney to represent him.

Update: Not fucking around.

The Mueller Filing

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

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

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

[snip]

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

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

The “Attorneys for the United States of America”

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

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

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

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

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

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

Manafort is especially screwed because Rosenstein is so closely involved

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

  • Jeff Sessions March 2, 2017 recusal
  • Jim Comey’s March 20, 2017 public confirmation of an investigation into “the Russian government’s efforts to interfere in the 2016 presidential election, and that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was an coordination between the campaign and Russia’s efforts.”
  • Rod Rosenstein’s May 17, 2017 order appointing Mueller Special Counsel “to investigate Russian interference with the 2016 presidential election and related matters”

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

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

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

Allegations that Paul Manafort:

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

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

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

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

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

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

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

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

[snip]

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

[snip]

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

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

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

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

The other authorities cover other prosecutions Mueller has laid out

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

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

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

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

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

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

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