When it comes to Trump Jr scandal involving his Russian meetings to dig Hillary dirt, most media outlets have kept their focus on basic-non policy matters like “what did the President know and when did he know it?” or “just how many Russians attended Trump Jr’s meeting?” (FYI, CrookedDonald.com already knows the answer to that one: there were a helluva lot more Russians who showed up Jr’s meeting than there were Americans who attended Papa Trump’s inauguration.)
But this focus on the small details of these meeting may be overlooking potentially larger and more important issues, in particular a government decision two months age to drop a case involving illegal money laundering in the United States by Russian banks tied to Putin.
Before we go any further, you need to know the cast of characters: first is Sergei Magnitsky, a Russian attorney and auditor who, in 2007, exposed a quarter billion dollar money laundering and tax fraud operation allowing the Russian Mafia to seize the hedge fund bank where he worked. Magnitsky assumed the Moscow prosecutors would want to do something. Little did Magnitsky know, his former fund was soon in the hands the Katsyv family, who had close ties to Putin, so state prosecutors arrested Magnitsky instead. In 2009, prison guards beat Magnitsky to death but that didn’t stop Putin-backed prosecutors in Moscow from indicting, then convicting his corpse for fraud.
The story might have ended there but for the heroic (and dangerous) work of international journalism and human rights groups who, in 2012, were able to get Magnitsky’s documents out of Russia. These documents proved Putin’s government had ties to the Russian mob and how illegal Russian money found its way into big New York City real estate deals. As a consequence, Congress, with support from the Obama administration, passed the “Magnitsky Act,” an economic embargo of the Russian companies, bankers, officials and other individuals involved in the corruption. Putin responded by ending all U.S. adoptions of Russian children.
Next you need to be re-introduced to a woman who has been in the news a lot lately, Natalia Veselnitskaya. She worked for the Moscow prosecutor’s office until she was hired by the Katsyv family. By then the family was given control of Russia’s state-run railroad by Vladimir Putin. She is also licensed to practice law in the United States and had been working with the Katsyv’s and others to overturn the Magnitsky Act sanctions on grounds that she “wants to save the children.” Veselnitskaya even set up a non-profit in the U.S. for the purpose of “protecting Russian adoptions by American families.” Not surprisingly, Veselnitskaya’s foundation is likely violating U.S. tax law because it is doing nothing to reinstate adoptions, but has financed legal actions and lobbying efforts by foreign banks seeking to profit from overturning the Magnitsky Act.
Today, of course, you best know Veselnitskaya as the woman with the dirt on Hillary at the center of the meeting with Trump Jr, Jared Kushner and then-Trump campaign manager Paul Manafort.
Enter Preet Bharara: appointed by Obama as the federal prosecutor for region that includes New York City in 2009, Bharara would become famous for prosecuting Wall Street bankers and corrupt politicians of all parties. In 2013, Bharara announced he would indict 11 companies, lead by a corrupt Russian bank named Prevezon, that was involved in Magnitsky’s investigation and part of the scheme to launder $230 million in Russian. The companies fought the legal charges for years with a team that included Veselnitskaya and thanks to their legal maneuvers, the trial date was delayed to the summer of 2017.
Enter Donald Trump, Sr: in November 2016, Bharara leaked how then-President elect Trump invited him to Trump Tower to discuss his work and right after the meeting Bharara announced to the press that Trump promised he could stay on, a story that first the Trump transition team and later his White House has never denied.
However, things got sticky just a few weeks later when Trump’s nominee for HHS, then-Rep. Tom Price, was caught using inside information to purchase hundreds of thousands in stock shares while writing legislation that would have boosted the value of his holdings. A 2012 law made Congressional insider trading illegal, so Bharara began investigating. That act of independence rubbed Trump’s personal attorney, Marc Kasowitz, the wrong way and he sought to get Bharara removed.
In March 2017, Attorney General Jeff Sessions demanded all federal prosecutors resign so they could appoint their own team, which is standard procedure with a new administration. Bharara refused due to Trump’s personal promise and notified Sessions’ office he was staying on: not long after, according to Bharara, Trump tried to call him, but following mandatory ethics rules requiring federal prosecutors to communicate with the White House though the AG’s office, Bharara refused to take the call. The next day, Bharara was fired.
After his firing, Marc Kasowitz bragged to friends with clients Bharara had prosecuted that he was responsible for “pushing him out” because he told Trump, Bharara wasn’t independent, rather he was “out to get hiim.” Not long afterwards Kasowitz would justify Trump’s firing of FBI director James Comey because he and anyone else who believed there were ties to Russia were only out to “get Trump.”
But there was a problem, by firing Bharara, the DoJ office in New York City was now being run by an acting prosecutor reporting to the DoJ and several of Bharara’s high profile cases still needed to be resolved, like the Russian money-laundering for New York real estate case which was about to go to trial.
But on May 12th, that problem was solved when the U.S. government quit the case and announced a settlement in favor of the banks and the Russians. Instead of a tens or even hundreds of millions in fines, the government settled for just $5.9 million (less the taxpayers dollars DoJ reimbursed Prevezon for “legal expenses”) and didn’t even ask the accused for an admission of guilt or even facts. The defendants and their attorneys (especially Veselnitskaya) were stunned at first, but soon they declared victory and insisted in the Russian press they got “an apology” from the U.S. government for false prosecution.
Actually it was a victory for the Russian money launderers: because as there was no trial, there would be no discovery, no release of embarrassing information and no fully documenting Russian efforts to gobble New York real estate.
And if there was any link between these Russian criminals and Trump’s New York real estate activities, we may never know. While the story was well covered in the financial and legal press, the regular media largely skipped over the story of Russians escaping justice and in any case, no one in the media made any connection between this case and Trump.
After all, the case long predated the Trump campaign and since July 2016, Trump, his family and his legal have vehemently denied any contact with Russia. On May 9th, three days before the case was tossed, another Trump attorney, Jay Sekulow, appeared on national television denouncing fired FBI James Comey for leading a “witch hunt” against trump using Russia as an excuse. Sekulow insisted there was no evidence Trump or members of his family even met with Russians, much less cooperated with them.
When the New York Times exposed Trump Jr’s meetings, the Trump camp first responded with false or incomplete details, so no one at first realized the tie between Veselnitskaya’s meeting where she promised the dirt on Hillary and Trump Jr. and Sessions killing the trail that would have revealed all. But eventually investigators caught on.
On July 12th, House Democrats sent a letter to AG Sessions demanding answers to why, after four years of work, the case was settled without documentation, an admission of facts or guilt and with a penalty that is the corporate equivalent of a traffic ticket—you can read their letter here.
Problem is, Sessions and Trump will try to ignore the letter: the Trump administration has instituted a policy that defines “Congress” as “the Republican majority,” so it won’t respond to any Congressional requests except those made Republicans. Legal experts say Trump’s interpretation of refusing to acknowledge any request with a “D” by it is strictly unconstitutional, but even if the courts agree, team Trump has made it clear they will barely respond to Republican requests and it likely wouldn’t matter because members of the Republicans Congressional leadership are also tied to Veselnitskaya and her work to whitewash Magnitsky’s murder.
But the finger-pointing has already begun: Sessions and DoJ aren’t publicly commenting but have leaked that acting prosecutor Joon Kim made the decision to settle without consulting Washington (even if that claim is remotely true, Kim is still the attorney Sessions’ picked to run the office. It is also no secret Sessions is in Trump’s dog house for recusing—instead of killing—the Russia investigation and he may be trying to get back in Crooked Donald’s good graces.)
In the meantime, Trump’s team still controls the fate of a few other Bharara’s cases, such as his prosecution of Deutsche Bank. The German bank has had a pretty rough 2016 at the hands of both Bharara and German prosecutors. Just last December, the bank agreed to DoJ’s demand for $9.7 billion in fines and low-interest home loans as a result of their illegal housing activity during the 2008 financial meltdown.
Working together, U.S. and German prosecutors uncovered how Deutsche Bank was involved in $10 billion in illegal trades and money laundering for Russian banks. In January of this year, the Obama administration secured a $630 million fine in a settlement related to part of that scheme (though because of the transition, it was Trump’s DoJ that announced the deal.)
But here’s the kicker—that isn’t the last of Bharara’s work against Deutsche Bank as there is some follow up from their Russian laundering activity.
And any more digging into those activities could get sticky, because, since 2012, Deutsche Bank holds a $300 million personal note from Donald Trump and the bank has every intention of getting their money back, so stay tuned.