A superseding criminal information was filed in the case against Paul J. Manafort, Jr. (see Download Manafort DC_Superseding Criminal Information). Commentary to follow later today.
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Category: Prosecutions
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Yesterday was a crucial day for Special Counsel Mueller's Investigation in that Paul Manafort was convicted on eight counts. The fact that the remaining counts were "hung" is inconsequential as the sting of these eight convictions sends a strong message and a possible heavy sentence. To make matters worse for Manafort, he still has an upcoming trial in DC on other charges. One could argue that there is always the possibility of success on appeal or a presidential pardon. But one has to wonder whether Manafort's time in negotiating a plea with the Special Counsel may be running out. And is there now competition in who will get the best cooperation agreement or favorable statement at sentencing from the government.
Further north, it was an important day in that within the same hour as Manafort's conviction, Attorney Michael Cohen entered a guilty plea to eight counts. Many in the media are noting that in the plea hearing Cohen said that his actions were "at the direction of a candidate for federal office." Was Michael Cohen sending a message to Mueller's team that he is ready to talk?
These two cases are not currently connected –two different prosecutors, two different offices, two different courts, two different matters.
But how many cooperators does Mueller need, and will Manafort (if he decides to cooperate) be up against Cohen's desire to offer evidence, assuming that he might have an interest in cooperation.
It may be a stretch to say that the clock is ticking for potential cooperators. It may also be that Mueller is someone who says "the more the better." Bottom line we just don't know. But yesterday's count of 8 will go down as a memorable day, not because of the matching 8s, but because of what is happening to individuals who had been associated with the President.
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Can we talk about the law here? Title 52 U.S.C. §30121, subsection (a), makes it unlawful, among other things, for "(1) a foreign national, directly or indirectly, to make…(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election." Section 30121 also makes it unlawful for a person to solicit, accept, or receive a contribution or donation described in subparagraph (A)…of paragraph (1) from a foreign national." If something is unlawful, it is against the law.
Clearly, if Donald John Trump, Donald Trump Jr. or anyone else associated with the Trump campaign knowingly solicited, accepted, or received money or a thing of value from a Russian national, that person has violated this provision of the Federal Election Campaign Act, as amended. And the same is true for Hillary Rodham Clinton and persons associated with her campaign.
But not every violation of law is a crime. To be guilty of criminally violating Section 30121 a person must do so knowingly and willfully. See 52 U.S.C. § 30109. In the context of the Federal Election Campaign Act, this means that an individual, to be guilty, must know that he is acting in violation of the law. In other words, here, as in certain other federal criminal statutes, ignorance of the law is an excuse.
In legally examining what we know about the infamous Trump Tower meeting of 2016, we should keep these realities in mind. I am speaking here of the meeting, and what led up to it, alone, and not what may or may not have later transpired. Based on what we currently know it seems extremely unlikely that any reasonable prosecutor could make a criminal case under the Federal Election Campaign Act against Donald Trump Jr. And that includes a case alleging any a conspiracy or attempt to willfully violate the statute. There just isn't enough.
Here are the statutes in question. 52 U.S. Code Section 30121, 52 U.S. Code Section 30109.
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For all of you Manafort junkies out there, here is Judge T.S. Ellis, III's July 24 2018 Order, resolving most of the outstanding prosecution and defense motions in limine in U.S. v. Manafort, due to be tried next week in Alexandria.
It is abundantly clear, based on these rulings and the charges in the EDVA Superseding Indictment, that this case will be presented to the jury by the government, as much as possible, as a relatively straightforward bank fraud, concocted by the defendant in order to hide the amount and source of improperly derived offshore income. Manafort and Rick Gates (now a cooperating witness) allegedly created phony loans from offshore nominee entities in order to conceal lobbying income derived from their work as unregistered agents on behalf of, among others, the Government of Ukraine and former Ukrainian President Victor Yanukovych. Later, when Yanukovych lost power and the money source dried up, Manafort and Gates allegedly inflated the value of Manafort's real estate holdings (and/or lied about the nature and use of said real estate) in order to obtain new loans and maintain a lavish lifestyle. The jury will hear and see evidence regarding Manafort's lavish lifestyle, his failure to register as a foreign agent, and his failure to disclose foreign bank accounts that he controlled. But the jury will not see or hear anything pertaining to the Trump campaign's purported collusion or interaction with Russia.
It is becoming fairly obvious to me that Mueller has no criminal collusion case to bring against the President or anyone in the President's entourage absent: 1) bombshell disclosures from Michael Cohen; 2) Manafort flipping after conviction; or 3) Manafort testifying through a post-conviction compelled immunity order issued by a federal court pursuant to 18 U.S.C. §§ 6002 and 6003. The Manafort case was never about Manafort. It was always about Trump. The law unquestionably allows Mueller to operate in this manner. It is what it is.
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For all of you Manafort trial junkies, here is the Government Exhibit List, recently filed in U.S. v. Paul J. Manafort, Jr., set to start soon in U.S. District Judge T.S. Ellis, III's Alexandria courtroom.
Here also is Judge Ellis's Order Denying Paul Manafort's Motion for Change of Venue. Judge Ellis ruled last week that Manafort is not entitled to a presumption that any Alexandria federal trial jury would be partial to the government. If Manafort can establish actual prejudicial partiality through voir dire, a herculean task under current federal criminal law, Judge Ellis will revisit the issue.
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Special Counsel Robert Mueller's Office has clearly been working to get to the bottom of the alleged Russian interference with U.S. elections. Today a D.C. federal grand jury handed down an Indictment against "12 Russian nationals for their alleged roles in computer hacking conspiracies aimed at interfering in the 2016 U.S. elections." The special counsel's website notes that "the indictment charges 11 of the defendants with conspiracy to commit computer crimes, eight counts of aggravated identity theft, and conspiracy to launder money. Two defendants are charged with a separate conspiracy to commit computer crimes." The Indictment is here.
There are some interesting lines in the Indictment including: "The Conspirators, posing as Guccifer 2.0, also shared stolen documents with certain individuals." It states,
"On or about August 15, 2016, the Conspirators, posing as Guccifer 2.0, received a request for stolen documents from a candidate for the U.S. Congress. The Conspirators responded using the Guccifer 2.0 persona and sent the candidate stolen documents related to the candidate's opponent."
The indictment speaks about how "[t]he conspirators, posing as Guccifer 2.0, also communicated with U.S. persons about the release of stolen documents." It notes how the conspirators "wrote to a person who was in regular contact with senior members of the presidential campaign of Donald J. Trump …"
The Indictment states that "[i]n order to expand their interference in the 2016 U.S. presidential election, the Conspirators transferred many of the documents they stole from the DNC and the chairman of the Clinton Campaign to Organization 1."
One thing is clear in reading this indictment – Mueller is running a legitimate and important investigation and it needs to continue.
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If Congressman Trey Gowdy is to be believed, and I see no reason not to believe him, this should be an interesting week in Washington. According to Gowdy, Speaker Paul Ryan read the riot act to the DOJ and FBI on Friday night about the Bureau's stonewalling and foot dragging in the face of longstanding subpoenas issued by the House Judiciary and Intelligence Committees. If the subpoenas are not complied with, Gowdy warned that the full constitutional powers of the House will be employed by week's end. It is clear that Gowdy was not just talking about holding people in contempt. Gowdy's comments are significant, because he has been one of the few House Republicans to consistently support the work of Bob Mueller and to give the benefit of the doubt to the Bureau regarding the origins of the Russian investigation. This has often put him on the outs with the many Trump shills on the GOP side. What apparently pushed Gowdy over the edge was the Horowitz Report's revelation of Peter Strzok's text response to Lisa Page that "we'll stop" Trump from being elected President. Astonishingly, it appears that this text had not been provided to the House prior to the release of the Horowitz Report. I suspect as well that Gowdy was enraged to read in the Report that the Bureau, with the active involvement of Deputy Director McCabe, sat on its knowledge of the Weiner laptop materials, even keeping it from the DOJ prosecutors who had been involved in the Clinton email server investigation (dubbed "Midyear Exam"), until alarmed officials in the SDNY U.S. Attorney's Office tipped off an attorney at Main Justice. It is clear that at the time Strzok was leading and ramping up the Russia investigation, he and a large group of DC FBI officials were suppressing the discovery of 347,000 potentially relevant emails on Weiner's laptop. This is why even the rather tame Horowitz Report "did not have confidence that Strzok's decision to prioritize the Russia investigation over following up on the Midyear-related investigative lead discovered on the Weiner laptop was free from bias." But make no mistake about it, Strzok did not act alone. As many as 39 FBI officials were likely to have participated in a September 28, 2016 secure video teleconference (SVTC) in which the discovery of 141,000 emails potentially relevant to Midyear Exam was discussed. (McCabe was informed of the 347,000 figure later that evening.) This was an FBI conspiracy of silence. The irony is that the FBI's attempt to suppress the Weiner emails almost certainly aided Trump's electoral victory. If the emails had been processed in a timely fashion, without publicity, their ultimate irrelevance would have been established prior to the election and Comey would not have needed to make the damaging announcement that he was reopening the Midyear investigation. It will be doubly ironic if there were wholly legitimate reasons to open the Russia investigation, but the FBI's misguided efforts to hide its own mistakes ends up tainting and derailing the entire project. Byron York reports here on the growing House GOP suspicion that the FBI is hiding even bigger bombshells.
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Special Counsel Mueller added two counts to Paul J. Manafort Jr.'s Indictment and charged Konstantin Kilimnik with these same two counts (Counts 6 and 7) - (see Third Superseding Indictment here). The new counts and new charges allege Obstruction of Justice (Count 6) and Conspiracy to Obstruct Justice (Count 7). Both of these alleged offenses come from the same statute – 18 U.S.C. 1512, with the conspiracy using subsection (k) of section 1512.
The charges are intriguing in that the special counsel elected not to charge using the general conspiracy statute, section 371, a statute he did use in count 1 against Manafort. The use of the conspiracy provision within a substantive offense is charged in count 2 (conspiracy to launder money), but here there is no charge of money laundering against Manafort.
So basically you have one conspiracy to defraud charge, two conspiracy charges coming from specific offenses but not charged under the specific offense provision of the general conspiracy statute, and one of the conspiracy charges coming from the same statute as the specific offense that is charged.
So some questions to ponder:
- did the special counsel only want one conspiracy charge under 371 and did not want to combine the specific acts?
- did the special counsel not want to confuse the conspiracy to defraud the government charge with specific offense charges?
- did the special counsel want to leave more room to split the charges if one of the two people now charged decides to cooperate?
There are probably some out there who will argue that this is all to get cooperation. And whether that is true is not the question being asked here. Special Counsel Mueller has a professional and skilled team and learning their thoughts on why things were charged in a certain way will hopefully be a talk he gives years from now to some bar association. In the interim, please continue to work as diligently as you have been.
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Congratulations to my old friend and colleague William T. Reid IV (aka Bill Reid) of Reid Collins & Tsai (see Bill's bio here) who recently won a complete acquittal for his client Olga Hernandez in San Antonio federal court. Hernandez, a longtime San Antonio Independent School District ("SAISD") Trustee, had been charged with conspiracy to commit honest services wire fraud and conspiracy to violate 18 U.S.C. 666–the infamous mark of the beast statute. The case was brought by the U.S. Attorney's Office for the Western District of Texas, which happens to be my old district and Bill's as well. The government maintained that Hernandez received an excessive and inappropriate amount of travel and entertainment ("T&E") from several people involved in insurance bid rigging. Its theory was that these bid riggers in essence bought Ms. Hernandez’s vote through the excessive T&E. The government, as is par for the course, offered 5K1.1 deals to the alleged co- conspirators in exchange for their testimony against Olga Hernandez. There was ample proof of the gifts and each of the alleged co-conspirators testified against Hernandez.
The defense theory of the case was that Ms. Hernandez was in fact friends with the conspirators and their wives. She accepted substantial gifts of T&E from the conspirators, but she did so out of friendship. With respect to the rewarding of insurance contracts by SAISD, Hernandez simply voted (along with all other trustees) consistent with staff recommendations by SAISD's Risk Management director. Olga had no idea that bribes were being paid and never got involved in the RFP Process that led to the various insurance contracts in question.
As often happens in honest services cases, the government relied heavily on Olga's purported violation of SAISD's conflict of interest/gift disclosure policy. Although violation of such policies is not in itself a crime, the government loves to merge or bootstrap such violations into the charged offense. The argument goes like this: "If the defendant is really innocent, why didn't she disclose these gifts in accordance with the school district's policy?" But the prosecutors had a problem in Olga's case.
According to Reid, "the biggest mistake the government made was using the wrong, inapplicable gift/conflict policy (that post-dated the conduct in question) to argue that Olga’s failure to disclose the T&E was evidence of her culpability. When, though a great deal of effort, we located the truly applicable policy we were able to prove that none of the gifts required disclosure. The government looked stupid. "
Reid now a high-end, high-stakes civil attorney who splits his time between Austin and Manhattan had not tried a criminal case since he left the U.S. Attorney's Office in 2000. Perhaps the most impressive thing about Bill's victory is that he took and tried the case pro bono, as a favor to his old friend (and mine), legendary San Antonio criminal defense attorney Alan Brown. (See Alan's bio here.) Bill tried the case with his partner Brandon Lewis and with Alan.
He told me that the case, "was by far the most rewarding case of my career. We were successful in defending Olga because of the hard work that our team put in to understand the evidence and hold the government accountable for trying to use the wrong gift disclosure policy. We also, explored the details of the process that led to the insurance contracts in question very closely so that we could demonstrate how minimally involved Olga was and thereby break the connection between gifts and any official act. This case was a stark example of how the government can obtain a wrongful conviction if defense counsel does not do his or her homework. "
Reid's Closing Argument, which focused on confirmation bias, was outstanding. Here are some additional stories on the case from the San Antonio Express-News, Law Dragon, and the Rivard Report.
http://www.lawdragon.com/2017/12/24/lawyers-christmas-story/
https://therivardreport.com/former-saisd-trustee-found-not-guilty-of-federal-bribery-charges/
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Judge Amy Berman Jackson's Memorandum Opinion and Order gives a green light to Special Counsel Robert S. Mueller III proceeding with the case against Paul J. Manafort, Jr. (see here and here). Her straightforward Order dissects the authority provided to the Special Counsel and rejects Manfort's claims that this was beyond the Special Counsel's appointment and if not, that he overstepped his appointment. Taking the allegations in the Indictment, she demonstrates how the Supereding Indictment clearly falls within the realm allowed of the Special Counsel. One interesting side note in this Order is the discussion of the role of internal agency regulations. She states, "internal agency regulations do not create rights that an individual under investigation may enforce in court." Judge Jackson, while allowing this case to proceed, does include an important point that should be noted when reviewing documents of anyone accused of crimes. She states that, "[i]t bears emphasizing at this stage that Manafort is presumed to be innocent of these charges, and it will be the prosecution's burden to prove him guilty beyond a reasonable doubt." But the bottom line is that Special Counsel Mueller may continue, as he should.
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