Politics, et Cetera

A publication from The Political Forum, LLC

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Tuesday, July 25, 2017

They Said It:

If honest capitalism cannot be sustained in the United States, with its long history of respect for moral and ethical behavior and the rule of law, then it will disappear from the world.  And, therefore, it is incumbent on all Americans, but most especially the nation’s business community and its politicians, to be scrupulously honest in their dealings, both here and abroad.

Mark Melcher and Steve Soukup, in their first article written for Lehman Brothers’ “Washington Weekly” after joining the now-defunct firm, which they did a few months after having been fired from the now-defunct Prudential Securities.  The piece was entitled “Challenges Ahead for Capitalism,” and dated April 16, 2001.



As regular readers know, throughout the twenty years of our partnership, one of the overriding themes of our work has been that of corruption, which we have consistently described as one of the most pernicious and persistent threats to the financial markets and to the global economy in general.  Indeed, for the entirety of the Clinton administration, we warned our readers not only that corruption would, in time, devastate and undermine free markets and the authentic creation of wealth, but also that it would be self-sustaining, which is to say that it would build upon itself.  Ironically, our first piece after joining Lehman Brothers said just that.

Of course, Lehman didn’t get away with it.  But Bill did.  He got away with so much for so long that he changed how the American public sees and understands the intersection of politics and duplicity.  Once upon a time, we put it this way:

Newt Gingrich is, unquestionably, a great politician.  He wouldn’t be where he is if he weren’t.  But when it comes to taking on Bill Clinton, he is like a great college basketball star playing one-on-one with Michael Jordan.  He doesn’t have a chance.  And Gingrich is the best the Republicans have.  The other guys couldn’t even suit up against Clinton.

With enormous quantities of confidence, chutzpah, energy, and tactical skill, Bill has shown time and again that he can play the American public, the mainstream American media, and the Republican Congress like a fine violin.

Sometimes, the piece he chooses is so challenging that we think he surely won’t get away with it.  The strings on the old Stradivarius are going to pop this time, we think.  And then he turns in a flawless performance.  When he’s doing one of these numbers, we are reminded of what Beethoven is supposed to have said when a musician complained about how hard it was on his instrument to play his Opus 132, the A-minor String Quartet:  “What do I care about your damn fiddle.” . . .

If Bill Clinton were a member of the Flying Walendas he could, we believe, not only walk across Niagara Falls on a tight rope, without a balancing rod, blindfolded in a snow storm, but he could do it with a gerbil in his . . . pocket.

We often warned that the Clintons’ successful abuse of the system would lead others to borrow heavily from their largely triumphant strategic plan.  The fact that Hillary was the Democrats’ choice to lead their party last year and almost won the election is evidence of just how thoroughly the American political system has been habituated to corruption.

Of course, now the Democrats are consumed with the notion that Donald Trump is corrupt and that this is bad.   They insisted for the better part of the last year that Donald Trump and Vladimir Putin are friends and that Putin was doing everything in his power to help his buddy Trump get elected.  There has never been any evidence of a friendship between the two, and nor has there been proof that Putin wanted Trump in office more than he wanted simply to disrupt and delegitimize the election.  But as you also undoubtedly know, evidence, proof, and facts are not necessarily terribly important in this particular discussion.

Last November, after Hillary Clinton lost an unlosable election, the Democrats changed the focus of their obsession, away from Putin and toward Trump himself.  Trump, they insisted, actively “colluded” with the Russians to steal Hillary’s rightful throne.  He could never have won without foreign interference, and, as a result, he courted that interference hungrily.  The one problem with this narrative was that it too lacked anything approaching corroboration.  Months and months of allegations were supported by exactly zero proof.

…Until last week, that is.

Last week, as you undoubtedly know, various news sources reported that Donald Trump Jr. and his brother-in-law Jared Kushner attended a meeting with, among others, a Russian lawyer who promised dirt on Hillary Clinton.  As it turns out, the Russian lawyer is considered an agent of Russian influence, at least tenuously connected to the regime, and a onetime legal representative of the Russian intelligence service.

As the incomparable Andrew McCarthy points out, this meeting arranged by Trump Jr. and attended by him and Kushner is the first real evidence that anyone in the Trump campaign had any untoward contact with the Russian regime.  Up until last week, McCarthy had been one of the most articulate and effective critics of the “collusion” theory, repeatedly pointing out that no proof had ever been offered.  After the details of the meeting became clear, however, even he conceded that the younger Trumps had placed their candidate/father/father-in-law in serious jeopardy.  It doesn’t matter if what the Trumps did is a crime, McCarthy wrote.  What matters is that it may be impeachable.  If the old man knew about the meeting, if it can be proven that he knew that his surrogates were actively engaging foreign nationals to undermine the integrity of the election process, then he cannot be trusted with the massive powers of the state.  That, after all, is why the Founders left the terms for removal of office vague and did not tie them specifically to the commission of legal crimes.

Time will tell, obviously, but the unfortunate fact is that McCarthy could be right.  He usually is.  What interests us, however, is not so much what the Trumps did; that can and will be sorted out by the media, the Congress, and the special investigator.  We think that the far more interesting and disheartening aspect of the story is how the Trumps were enticed into doing what they did – and by whom.

Let us explain.

If you have paid much attention to this story, you likely have noticed that there are a few names that keep popping up repeatedly.  Among those is the Russian lawyer “Natalia Veselnitskaya.”

Veselnitskaya was the bait dangled in front of Donald Trump Jr.  She was the lawyer who supposedly had the goods on Hillary and would deliver it to the Trump campaign.  As luck would have it, she is also very well connected in Russia.  Among other things, she is a close associate of one of Putin’s favored oligarchs, Pyotr Katsyv, the vice president of the state-run Russian Railways.  She is also for and a trusted ally of Katsyv’s son, Denis, whose company was the defendant in a very important fraud and money laundering trial in New York.  Writing at National Review, the aforementioned Andrew McCarthy provided a few of the relevant details:

In 2013, the Justice Department filed an asset-forfeiture lawsuit that was sensitive because it focused on Russian corruption.  It arose out of a $230 million fraud orchestrated by the Putin regime, and involved the detention, torture, and murder of Sergei Magnitsky, the Russian investigator who exposed the scheme.  (I will have more to say about the case in a subsequent column.)  At the center of the case was Veselnitskaya’s client, Denis Katsyv . . .

Denis Katsyv owns a Cyprus-based investment company called Prevezon Holdings Ltd.  The company was the main defendant in the Justice Department’s lawsuit, in conjunction with which Justice froze about $14 million in property.  Katsyv was not a defendant personally (asset-forfeiture cases technically target the asset, not its owner).  But the case was highly significant to him and to Russia. . .

It was important to the Prevezon case that Denis Katsyv be deposed in New York.  Trying to do it in Moscow was out of the question, since lawyers, investigators, and witnesses in probes of Russian activities have a habit of ending up imprisoned, defenestrated, or dead there.  Evidently, Katsyv was willing to be deposed and otherwise cooperate, or at least feign cooperation.  If he was going to do that, though, he had a condition: He wanted the assistance of his Russian lawyer, Natalia Veselnitskaya, in addition to the top-flight American law firm, BakerHostetler, that was formally representing his company in the case.

Last week, a handful of media sources made a big deal about the fact that Veselnitskaya was allowed to the enter the country without a visa.  And she was allowed to do so by the Obama administration, presumably, by its Justice Department.  As McCarthy points out, however, Veselnitskaya’s unusual entry had nothing to with the Trump meeting and everything to do with the Prevezon trial.  He presumes that this, in and of itself, suggests that the Trump folks were not the victims of any domestic conspiracy.  He concedes that they may have been set up by Putin, but not by anyone in the United States.

For our part, we’re not so sure.  You see, the second important and recurring name in this tale is BakerHostetler, the American law firm that represented Katsyv.  As it turns out, BakerHostetler has represented Katsyv for some time.  And as part of its efforts to defend him, the law firm sought to discredit the Magnitsky Act.  That law was passed in 2012 and was designed to punish the Russian officials deemed responsible for the death of Sergei Magnitsky, a Russian lawyer who uncovered and reported massive Russian state corruption.  Needless to say, Putin and his oligarchs – including the Katsyvs – hate the law.  In a December, 2016 piece about the successor bill, the Global Magnitsky Act, Politico offered some juicy info:

Bill Browder, the American-born investor who employed Magnitsky and lobbied for the original sanctions law in his honor, has lodged a formal complaint with the Justice Department alleging that some of the anti-Magnitsky lobbyists violated disclosure requirements.  The office that oversees the Foreign Agents Registration Act declined to comment.

The lobbying effort was commissioned by Denis Katsyv, who owns a company that the Justice Department has accused of laundering money from a tax fraud that Magnitsky uncovered.  Katsyv and two other Russians organized the effort through a Delaware nonprofit and hired a lobbyist named Rinat Akhmetshin, disclosures show.  But other people tied to the effort never showed up in filings either with Congress or the Justice Department.

Akhmetshin recruited Lanny Wiles, a McCain campaign hand who has known [Congressman Dana] Rohrabacher since their Reagan days.  Wiles said he told Akhmetshin he didn’t want to work for a foreign entity, which would require registering under FARA.  Akhmetshin told Wiles he wouldn’t have to register because he would be working for the law firm BakerHostetler, according to Wiles . . .

BakerHostetler represented Katsyv in the money-laundering case at the time…

BakerHostetler hired the private research firm Fusion GPS led by Glenn Simpson, a former Wall Street Journal reporter . . . Simpson and his firm found records on Browder’s property and finances and tracked down potential witnesses, the company said in a statement to POLITICO.  Fusion GPS also discussed the case record with several reporters, according to the statement.

Why do you care about that?  Well . . . for two reasons.  First of all, the Magnitsky Act was the real agenda of the Veselnitskaya-Trump Jr.-Kushner meeting.  The Russians want the Act rescinded and Veselnitskaya was really at Trump Tower to make that pitch.  Second, and more importantly, this bit above from Politico brings up another one of the recurrent names, perhaps the most important one of them all, Fusion GPS, the firm hired by BakerHostetler to . . . uh . . . look up “property and finance” information on its client’s principal nemesis.

And here’s where things get really interesting.

Who is Fusion GPS, you ask?  Why does that name sound familiar?  It probably sounds familiar to you for a couple of reasons.  Two years ago, Fusion GPS was commissioned by Planned Parenthood to examine the infamous undercover videos that showed the abortion-provider’s officials casually and cavalierly discussing the “sale” of aborted fetus parts.  And while Fusion found no evidence that dialogue had been falsified or created or that the videos had been doctored, it nevertheless “reported” that the videos were manipulated.  And the media dutifully agreed.

A second reason you might have heard of Fusion GPS is because it was rather dubiously involved in the 2012 presidential election.  In a May 2012 editorial, The Wall Street Journal summarized the reporting by its own Kimberly Strassel, which featured Fusion GPS prominently.  To wit:

As Ms. Strassel has reported in recent columns, Idaho businessman Frank VanderSloot has become the target of a smear campaign since it was disclosed earlier this year that he had donated $1 million to a super PAC supporting Mr. Romney.  President Obama’s campaign website teed him up in April as one of eight “less than reputable” Romney donors and a “bitter foe of the gay rights movement.”  One sin: His wife donated to an anti-gay-marriage campaign, of the kind that have passed in 30 or so states.

Now we learn that little more than a week after that Presidential posting, a former Democratic Senate staffer called the courthouse in Mr. VanderSloot’s home town of Idaho Falls seeking his divorce records.  Ms. Strassel traced the operative, Michael Wolf, to a Washington, D.C. outfit called Fusion GPS that says it is “a commercial research firm.”

Fusion GPS is run by a former Wall Street Journal reporter, Glenn Simpson, who wouldn’t say who is paying him for this high-minded slumming but said in an email that Mr. VanderSloot was a “legitimate” target because of “his record on gay issues.”  If Mr. Simpson and Democrats really favor disclosure, then surely Mr. Simpson should disclose who is paying him to rummage through the personal lives of opposition donors.

Of course, the most likely reason you have heard of Fusion GPS is the fact that it is at the heart of the Trump-Russia controversy.  Fusion GPS both commissioned and marketed the now-infamous and always ridiculous “Orbis Dossier” that contained salacious allegations about Trump’s relationship with the Putin regime and with…uh…”others” in Russia.  In an amazingly detailed (and well sourced) article on Fusion, Heavy.com summarized what is publicly known about the “dossier” and Fusion’s role in putting it together:

Fusion GPS was behind the colorful and controversial Christopher Steele dossier that emerged as one of the most bizarre moments in an already bizarre presidential campaign.  The dossier contained a listing of unverified, almost unspeakable allegations about President Donald Trump, and it emerged in news reports on January 10, 2017, just 10 days before Trump was inaugurated as president.

The company’s efforts were funded first by a Republican and, once Steele came on board and the primary was over, a Democrat.  Neither donor’s name is known . . .

Steele is a former British spy who wrote the unverified report on Donald Trump’s alleged activities and connections in Russia.  A former intelligence officer who was based in Russia in the 1990s, Steele now runs an intelligence firm in London.  The dossier contained lurid allegations involving Trump’s supposed activities in Russia that are all unverified and hotly contested.  Steele has acknowledged in a defamation case in England that information in one of his memos “needed to be analyzed and further investigated/verified.”  All the same, he shared the dossier with the FBI and, reports CNN, the Justice Department relied on parts of it to obtain a FISA warrant to “to conduct surveillance on Trump associate Carter Page.” . . .

The 35-page dossier was written by Steele based on memos he compiled from June through December 2016. . .

According to the BBC, “the opposition research firm that commissioned the report had worked first for an anti-Trump Super Pac – political action committee – during the Republican primaries.  Then during the general election, it was funded by an anonymous Democratic Party supporter.”  The BBC and other British news outlets had initially reported that the PAC supported Jeb Bush’s campaign, but Bush has adamantly denied having anything to do with the dossier or Steele, and the BBC amended its reports. . .

Fusion marketed the dossier to various left-wing media outlets before the election, obliging Steele to meet with and discuss his work with select reporters.  According to media reports, the dossier formed the foundation for both the Clinton campaign’s collusion narrative and American intelligence agencies’ efforts to monitor Donald Trump and his associates.  These intelligence agencies shared the information with members of the Obama administration, some of whom are presumed to have leaked them to the media as “facts.”  BuzzFeed, of course, published the full dossier in January.  For months, the Senate Judiciary Committee has been trying to understand Fusion’s role in the election  and the funding behind the dossier.  Chuck Grassley and Diane Feinstein, the Committee’s top Republican and top Democrat respectively, have repeatedly asked the firm’s founder, Glenn Simpson, to appear voluntarily before it and to explain the sources of funding for its research.  Simpson declined.  And then last week, according to Feinstein, “a subpoena has been issued to compel his attendance.  Simpson’s attorney has asserted that his client will invoke his Fifth Amendment rights in response to the subpoena.”

Now, given all of this, one would certainly have the right to be suspicious.  The lawyer, the meeting, the opposition research, the intelligence agencies, the monitoring and “unmasking” of Trump officials, pleading the Fifth, etc. are all connected and all indicative of a setup.  But that’s not even the worst of it.  In a June 28 piece for The Federalist, the political activist Ned Ryun insisted that “Americans need to know more about Fusion GPS, stat!”  Unfortunately, today, less than a month later, Americans do know more.  And what we know is not pretty.

Last week, Tablet magazine, a generally left-leaning Jewish publication, ran a story by Lee Smith detailing Fusion GPS’s place in the current media-political structure.  It is both devastating and disheartening.  Smith explains just what Fusion GPS is, just what it does, and just how and why it undermines the public’s conceptualization of “news.”  He writes:

Fusion GPS was founded in 2009 — before the social media wave destroyed most of the remaining structures of 20th-century American journalism — by two Wall Street Journal reporters, Glenn Simpson and Peter Fritsch.  They picked up former colleagues from the Journal, Tom Catan, and Neil King, Jr., who were also well-respected by their peers.  When the social media wave hit two years later, print media’s last hopes for profitability vanished, and Facebook became the actual publisher of most of the news that Americans consumed.  Opposition research and comms shops like Fusion GPS became the news-rooms — with investigative teams and foreign bureaus — that newspapers could no longer afford.

As top reporters themselves, the principals of Fusion GPS knew exactly what their former colleagues needed in order to package and sell stories to their editors and bosses.  “Simpson was one of the top terror-finance investigative reporters in the field,” says one Washington-based journalist, who knows Simpson professionally and personally, and who asked for anonymity in discussing a former reporter.  “He got disillusioned when Rupert Murdoch took over the Journal because there was less room for the kind of long-form investigative journalism he thrived on.”

And now, says the journalist, “they’re guns for hire.” . . .

Besides Russia, Fusion GPS has also worked with other foreign countries, organizing campaigns and creating news that furthers the aims of the people who pay for their services — using the fractured playing field of “news” to extend old-fashioned lobbying efforts in a way that news consumers have been slow to understand.

Fusion GPS, according to the company’s website, offers “a cross-disciplinary approach with expertise in media, politics, regulation, national security, and global markets.”  What does that mean, exactly?  “They were hired by a sheikh in the UAE after he was toppled in a coup and waged an information war against his brother,” one well-respected reporter who has had dealings with the company told me.  “I believe they seeded the New Yorker story about the Trump Hotel in Azerbaijan with alleged connections to the IRGC.  They may have been hired to look into Carlos Slim.  It’s amazing how much copy they generate.  They’re really effective.”…

Yet it is rare to read stories about comms shops like Fusion GPS because traditional news organizations are reluctant to bite the hands that feed them.  But they are the news behind the news—well known to every D.C. beat reporter as the sources who set the table and provide the sources for their big “scoops.” . . .

The news media is dead broke.  Print advertising is washed up and all the digital advertising that was supposed to replace lost revenue from print ads and subscribers has been swallowed up by Facebook and Google.  But the good news is that people will still pay for stories, and it’s an awful lot easier to bill one customer than invoicing the 1,500 readers of your blog.  The top customers for these stories are political operations.

There is no accurate accounting of how many of the stories you read in the news are the fruit of opposition research, because no journalist wants to admit how many of their top “sources” are just information packagers — which is why the blinding success of Fusion GPS is the least-covered media story in America right now.

Smith also alleges that the seeds of the this arrangement were, ironically, enough, sown by the experience of Watergate.  “Mark Felt—aka ‘Deep Throat’— was a whistleblower,” Smith writes, “a man of conscience serving the people he protected for decades as a federal agent.  But he was also a man who wanted to become Director of the FBI, and became furious at Nixon for snubbing him for the top job.”  All of which, is to say that “the hero of this epic tale was an embittered law enforcement official who instead of going public with what he knew about a crime, manipulated a vital American institution, the free press, to pay back his boss, while the reporters manfully withheld that information from their readers.”

Because of Watergate, reporters learned that the easiest way to a story is to have an unhappy bureaucrat or political official “leak” it to you.  Indeed, Bob Woodward practically quit reporting after Watergate and made his living retelling the tales that his sources sent him.  And as Smith points out, that dynamic didn’t change when the bottom fell out of the news business.  The only thing different was the addition of middlemen, people like the folks Fusion GPS, who seed various stories for fun and (big) profit.

In the end, then, what we have here is an incredibly convoluted, incredibly deceptive, and incredibly opaque relationship, fashioned between two professions that haughtily pride themselves on their precision, their honesty, and their transparency:  government and journalism.  Practitioners of the former feed stories for their own personal and partisan ends to the new, highly paid specialists of the latter, who then plant them as “legitimate news” to be consumed by unknowing and therefore trusting readers (viewers, listeners, etc.).  This relationship is well developed and hardly a secret to those in power.  Various Republican and Democratic operatives, possibly the former president of the United States, and untold numbers of foreign actors have utilized the relationship repeatedly and successfully.  And for the most part, no one is the wiser.

Did we mention that the real corruption problem is so deep and so systemic that it will make you weep for the future of the country?

Back in the 1990s, when we were writing about political corruption almost weekly, we read and heard countless conspiracy theories, some exonerating Bill and Hillary Clinton, most indicting them for a variety of wild and heinous crimes.   Back then, we figured that both the corruption and the conspiracy business would continue indefinitely into the future.

What we didn’t know, what we could not possibly have imagined, is that within a quarter century, the corruption would be so severe and so extensive that it would be perpetrated almost continuously by virtually the entirety of the ruling class against the very people whom it purports to serve.  The President of the United States – a man who promised to stand up for the country class and to neuter the supercilious ruling class – may well be impeached and removed from office, specifically because he dared to challenge those who have no compunction about fabricating for him a hostile reality, since fabricating reality is what they do all day every day.

Again, this is not to say that Donald Trump is a victim here.  He’s not.  If he and his surrogates had been more scrupulous, then the broader ruling class attempts to compromise him would have failed spectacularly.  It is hard to imagine that such setups would have yielded much if they had been perpetrated against, for example, Ted Cruz.  But they weren’t.  They were perpetrated against Trump and his family, who appear to have played along too convincingly.

It is hard for us to express just how problematic we find all of this.  Individual instances of corruption we could handle.  Even wider, more extensive corruption, we could withstand.  But this . . . this is something else altogether.  This is beyond extensive.  This is all-consuming, all-encompassing.  This is cause – legitimate, eminently justifiable cause – to distrust the picture of reality painted by our so-called betters in Washington.

Good night and good luck indeed.

Copyright 2017. The Political Forum. 3350 Longview Ct., Lincoln NE  68506, tel. 402-261-3175, fax 402-261-3175. All rights reserved. Information contained herein is based on data obtained from recognized services, issuer reports or communications, or other sources believed to be reliable. However, such information has not been verified by us, and we do not make any representations as to its accuracy or completeness, and we are not responsible for typographical errors. Any statements nonfactual in nature constitute only current opinions which are subject to change without notice.