Posts Tagged ‘Robert Mueller’

A Higher Sanctimony — Narcissism, inflated ego, revenge and vindication — The perils of the righteous prosecutor and the rule of law

April 18, 2018

Comey’s memoir shows he is more like Trump than he cares to admit.

Image result for George Stephanopoulos and comey, photos

Donald Trump was warned. Seven days before his inauguration, these columns advised the President-elect to replace James Comey as director of the Federal Bureau of Investigation. We had no knowledge of secret probes, but we did have long experience watching Mr. Comey. And we knew Mr. Trump, whose narcissism would cause him to believe he could charm or dominate the director.

Mr. Trump didn’t take that advice, firing Mr. Comey four months later when as President he was sure to pay a higher political price. He had ample cause to fire him, as a memo from Deputy Attorney General Rod Rosenstein laid out.

But Mr. Trump told an interviewer that he had fired Mr. Comey because the FBI chief wouldn’t say publicly that the FBI wasn’t investigating Mr. Trump. The President also threatened Mr. Comey with a false claim about Oval Office “tapes.” Mr. Comey responded by leaking documents that caused Mr. Rosenstein to name a special counsel, which has put Mr. Trump’s Presidency in mortal peril.


Now comes Mr. Comey’s memoir, “A Higher Loyalty,” which is an attempt at revenge and vindication. With the help of special counsel Robert Mueller, Mr. Comey may succeed at the former. He fails utterly at the latter. The main lesson from Mr. Comey’s book is that Mr. Trump’s abuse of political norms has driven his enemies to violate norms themselves.

The most notable fact in the book is how little we learn that is new about Mr. Trump. The tales of Mr. Comey’s meetings with the President were leaked long ago, and on the specific facts they are plausible. Mr. Trump is preoccupied with his critics and the validation of his presidential victory. He is clueless that his bullying and flattery would repel Mr. Comey, who thinks of himself as Eliot Ness as written by David Mamet in “The Untouchables.”

The book mainly adds Mr. Comey’s moral and aesthetic contempt for Mr. Trump. This may be catnip for the press, but it isn’t new and doesn’t amount to an impeachable offense. Mr. Comey’s comparison of Mr. Trump to a “mafia” boss is hilariously overstated. Don’t they call it “organized” crime? And what about that code of silence known as omerta? The Trump White House can’t keep anything secret.

The former director recoils that Mr. Trump once asked for his “loyalty” but within the law that is perfectly legitimate. As the Supreme Court said about executive officials in Myers v. U.S. (1926), “The moment that” a President “loses confidence in the intelligence, ability, judgment or loyalty of any of them, he must have the power to remove him without delay.”

Mr. Comey reveals in his excessive self-regard that he is more like Mr. Trump than he cares to admit. Mr. Trump’s narcissism is crude and focused on his personal “winning.” Mr. Comey’s is about vindicating his own higher morality and righteous belief.

That comes through most clearly in his defense of his handling of Hillary Clinton’s emails. Mr. Comey says he was put in an impossible situation: “I knew this was going to suck for me.” Yet he says he had to pre-empt his superiors at Justice in July 2016 to absolve Mrs. Clinton because only he could assure Americans that the probe was fair. He endorses following the chain of command, but then says he had to ignore it for the greater good.

He accuses Mr. Rosenstein of acting “dishonorably” by writing the memo describing how Mr. Comey mishandled the Clinton probe. Yet he barely engages Mr. Rosenstein’s arguments, which quoted from former Justice officials of both parties. Mr. Rosenstein wrote that Mr. Comey was “wrong to usurp” the authority of Attorney General Loretta Lynch and wrong to “hold press conferences to release derogatory information” about Mrs. Clinton.

That mistake made Mr. Comey feel obliged to intervene again in late October—this time to announce the reopening of the probe in a way that helped Mr. Trump. Had Mr. Comey followed Justice protocol in July, he would not have had to make himself the issue in October, damaging the reputation of the FBI and Justice in the bargain.

This has been the habit across Mr. Comey’s career, though you’ll find no mention in his memoir of Steven Hatfill, the government scientist he wrongly pursued for years as the anthrax terrorist; or Frank Quattrone, the Wall Street financier he prosecuted twice for obstruction of justice only to be rebuked by an appeals court; or Judith Miller’s recantation of her testimony against Scooter Libby.

Mr. Comey has also had little to say so far about the controversy over the Steele dossier and his handling of the Russian investigation of Mr. Trump. Did he know that the dossier was commissioned by Democrats for the Clinton campaign? He also has nothing to say about the dismissal of his former FBI deputy, Andrew McCabe, for “lack of candor.”


Mr. Comey is getting his moment of revenge as much of the press revels in the attacks on Mr. Trump. Yet his career, reinforced by his memoir, is a case study in the perils of the righteous prosecutor. It also shows why Mr. Comey’s view of the FBI as “independent” of supervisory authority is wrong and dangerous. A presidential bully who abuses power needs to be checked, but so does an FBI director who turns righteousness into zealotry.

Appeared in the April 18, 2018, print edition.



Republicans give eye-rolls and boos against James Comey during ABC interview

Some 23 Charleston Republicans booed, hissed and rolled their eyes Sunday night as they watched ousted FBI Director James Comey give his first TV interview since being fired last May.

“We all left with the impression that all he wants to do is sell books,” state Sen. Sandy Senn, R-Charleston, said Monday after taking part in a CNN focus group on Comey late Sunday night.

During an hour-long interview with ABC’s George Stephanopoulos, Comey said President Donald Trump was “morally unfit to be president” and compared the commander in chief to a “mob boss” in his repeated demands for loyalty.

The premiere of “The Comey Show”

April 16, 2018

Expect James Comey to be on everyone’s mind with his Trump is “morally unfit to be president,” making it clear that, like a skilled political candidate, he’ll be repeating a specific message with fervor and discipline on a coast-to-coast book tour that includes a saturation schedule of interviews and audience events.

Image result for George Stephanopoulos and comey, photos

Photo credit ABC News

By Mike Allen

“The Trump Show,” which has produced two seasons’ worth of epic cliffhangers and plot twists, is getting a competitor: “The Comey Show,” which is scheduled to run for at least five weeks, and will needle and gall President Trump amid global, legal and political crises.

Why it matters: In both his prime-time interview with ABC’s George Stephanopoulos and an interview with USA Today, fired FBI Director James Comey argued that Trump is “morally unfit to be president,” making it clear that, like a skilled political candidate, he’ll be repeating a specific message with fervor and discipline on a coast-to-coast book tour that includes a saturation schedule of interviews and audience events.

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In his interview with ABC, fired Comey called President Trump a “person who sees moral equivalence in Charlottesville, who talks about and treats women like they’re pieces of meat, who lies constantly.”

  • Comey used almost identical wording in the interview in with USA Today, calling Trump “someone who is able to see moral equivalence in Charlottesville or to speak and treat women like they’re pieces of meat and to lie constantly.”
  • Adding to the campaign feel, Comey told ABC that Americans need to vote Trump out: “I think impeaching and removing Donald Trump from office would let the American people off the hook … People in this country need to stand up and go to the voting booth and vote their values.”
  • On Trump’s fitness for office: “I don’t buy this stuff about him being mentally incompetent or early stages of dementia. He strikes me as a person of above average intelligence who’s tracking conversations and knows what’s going on.”

Trump tweeted five times about Comey yesterday, before the broadcast: “Slimeball! … I hardly even knew this guy. … (he is not smart!), will go down as the WORST FBI Director in history, by far!”

Be smart … In texts, emails and calls, here’s what we’re hearing about “The Comey Show”:

  • A veteran of Bush 43’s White House: “Comey is far more morally credible than the others who’ve tried and failed to … have impact.”
  • One of D.C.’s top GOP operatives: “Comey matters a lot for 2 reasons: 1) right now is the last best chance to get a legislative agenda moving in a GOP-controlled Congress, and instead Trump & RNC is 100% focused on fighting a former aide who is irrelevant; and 2) Trump & the RNC focusing 100% on Comey will help Comey’s publisher sell a million+ books (just like they helped [Michael Wolff’s] Fire/Fury). That really matters because it raises the price that publishers will pay for other Trump tell-alls.”
  • A White House official: “[H]is comments show an implicit political bias during a time when he’s one of the most important figures in the Mueller and Congressional investigations. How can anyone take him seriously as a non-partisan figure from here on out?”

But keep your eye on the ball — the twin investigations in Washington and New York that are delving into Trump and his businesses:

  • Matt Miller, former Obama Justice Department official and MSNBC contributor, notes that special counsel Robert Mueller “doesn’t have anything like Comey’s flair for the dramatic … And he will make his decisions just on the facts. … [W]hat Comey laid out in his testimony to the [Senate] Intelligence Committee will be more important for Mueller’s decision-making than what is in his book and what he says in his interviews.”
  • And Jonathan Swan reminds us: “The main game for Trump — and the reason his agitation levels went through the roof the last two weeks — is what happened to Michael Cohen. Trump allies are exponentially more worried about the [New York feds’] probe and the prospect of investigators poring over Trump’s business dealings than they are anything Comey is saying.”

‘Trust but Verify’ Applies to the FBI

April 15, 2018

America’s premiere law enforcement agency suffers the consequences of self inflicted wrongdoing and failures….

We refute tyranny when we hold law enforcement accountable.

‘Trust but Verify’ Applies to the FBI

Federal law enforcement did not cover itself in glory—again—in the just-concluded trial of Noor Salman, wife of the Pulse nightclub mass murderer in Orlando, Fla.

A judge scolded prosecutors during the trial for withholding exculpatory evidence. At her original bail hearing, the FBI had relied on a confession, extracted from Ms. Salman in an 11-hour interrogation, that she had helped Omar Mateen scope out the gay nightclub in advance of the shooting. As was subsequently revealed, the FBI was already in possession of cellphone location data that contradicted her claim. Other evidence also cast doubt on the confession, which the FBI failed to record or sustain with circumstantial proof. Ms. Salman was acquitted.

Happily, the malpractice here was less consequential than in the thrown-out corruption conviction of the late Sen. Ted Stevens. It was less brazen than the Consumer Financial Protection Bureau’s manufacture of fake statistical evidence of racial bias in auto lending or the questionable federal and state asset seizures that keep coming to light.

The Noor outcome may not be flattering to the FBI, but it should be flattering to America. Holding law enforcement accountable is the best refutation of the authoritarian temptation, with its mocking of our insistence on due process, elections and respect for individual rights.

At the same time, not every culpable police action is motivated by careerism or dishonesty of purpose. Murders are down in New York City. Policing is a reason. Yet two of the city’s most productive detectives were recently charged with manufacturing evidence to support an otherwise legitimate seizure of an illegal gun. Now under way is a spreading crackdown on police “testilying” in court.

So skepticism, leavened with a certain understanding, is required in the clash between individual rights and the police. This is about to become especially true in the mother of all cases, the FBI’s role in the 2016 election.

We’ve already learned a few unsettling things. Trump associates Michael Flynn and George Papadopoulos were treated in unforgiving fashion for lies that may not have been lies, whereas the FBI practically conspired with Hillary Clinton and her aides to make sure their truth-shading was overlooked. The FBI’s use of evidence to win a Carter Page surveillance order appears to have been every bit as disingenuous as that used by prosecutors in the Noor Salman bail hearing.

Political bias or simply toadying to the party in power may turn out to have been a factor, but we are likely to hear a great deal about what top law-enforcement officials believed, rather than knew, about Donald Trump.

The autobiography of FBI chief James Comey is due next week. The chances are nil that it will deal honestly and completely with the 2016 race, especially the role of U.S. intelligence agencies in influencing some of the FBI’s actions. But as leaks already reveal, the book is accurately redolent of the contempt and distrust top officials felt for Candidate Trump, leading to actions that are hard to defend in hindsight.

Coming next will be a Justice Department inspector general’s report on Mr. Comey’s anomalous exculpation of Mr. Trump’s Democratic rival in the 2016 race. If, as we suspect, Robert Mueller is framing his own investigation partly to justify the pre-election actions of the FBI, then we will doubly need the recently launched investigation by U.S. Attorney John Huber, which doesn’t start from the assumption that the one thing that doesn’t need investigating is the investigators.

Then there’s the Stormy Daniels matter, in which a seamy but not illegal payment might, in theory, be illegal under campaign-finance rules.

At least efforts at suppressing Mr. Trump’s sexual history are a gentlemanly improvement on those of the Bill Clinton campaign 24 years earlier. If Trump lawyer Michael Cohen made an “in-kind” donation by paying off Ms. Daniels, didn’t Ms. Daniels make an in-kind donation when she agreed not to speak? Weren’t those Clinton women who didn’t come forward because they didn’t want to be savaged by the Clinton machine making in-kind contributions to the Clinton campaign?

The questions are absurd because the law is absurd. What should be a personal and political embarrassment for Mr. Trump has become another superfluous legal jeopardy for the man 46% of American voters wanted for their president. When we metastasize laws for criminalizing politics, we become more like Vladimir Putin’s Russia, not less so. Witness the liberal group Common Cause, which can’t get enough campaign regulation, rushing out Stormy-related federal complaints against the Trump campaign on Thursday.

But another lesson also applies in such a world. All presidents face opponents who seek to make sure they deliver as little as possible even when delivering would be good for the country. Mr. Trump came to the presidency with too much baggage that his opposition could use against him. That’s something Mr. Trump’s voters and party should have thought about before nominating him.

Appeared in the April 14, 2018, print edition.

Trump Lawyer Michael Cohen Finds Finances Taken Apart by Prosecutors

April 12, 2018


By David Voreacos and Caleb Melby

  • Michael Cohen said to be probed for bank, campaign violations
  • FBI reported to seize records of taxi fleet that fueled wealth

Before he was known as Donald Trump’s pugnacious lawyer, Michael Cohen made a modest fortune assembling taxi fleets in New York and Chicago, with company names like Mad Dog Cab Corp., Smoochie Cab Corp. and NY Funky Taxi Corp.

From a declining taxi business to a portfolio of New York City apartments to the board of Eric Trump’s charity to a top fundraising post at the Republican Party, Cohen soared in prominence as he swatted away adversaries on Trump’s road to the White House.

Michael Cohen

Photographer: Tom Williams/CQ-Roll Call Group via Getty Images

Now he’s in the crosshairs of federal prosecutors. FBI agents raided his New York office, home and hotel room last week, reportedly hauling away documents to support an investigation into potential bank fraud, wire fraud and campaign finance violations.

It’s unclear precisely what prosecutors are pursuing, but they sought information about several embarrassing episodes in Trump’s private life that endangered his candidacy and now could imperil his presidency, according to the New York Times. They include a $130,000 payment Cohen said he made to a porn star who claimed to have had sex with Trump, another payment to a Playboy playmate, and the infamous “Access Hollywood” tape in which Trump bragged about grabbing women’s genitals. Agents also sought records on Cohen’s taxi business, CNN reported.

“You could imagine a search warrant that describes that Michael Cohen got a loan from a bank to make a payment on Trump’s behalf and made misrepresentations to the bank about how the money would be used,” said Renato Mariotti, a former federal prosecutor. “Investigators would want to know: did he get reimbursed by Trump, or did he discuss it with anybody?”

Cohen’s attorney, Stephen Ryan, has described the search, overseen by the U.S. Attorney’s Office in Manhattan, as “completely inappropriate and unnecessary.” He didn’t respond to a request for further comment.

Puzzling Arrangement

Among the questions is whether any of the payments or services constituted an improper campaign contribution. Trump has denied any knowledge of the payment to Daniels. Cohen has said he paid it out of his own pocket, tapping a home equity loan to cover the cost.

Prosecutors will closely scrutinize that puzzling arrangement. It raises questions about a man who has long served as Trump’s fixer, lawyer and confidante, and who made millions of dollars and endured downturns in two quintessential New York enterprises — owning real estate and taxi medallions.

Cohen, 51, worked for the Trump Organization for a decade and protected his boss with a blunt, in-your-face style during lawsuits, campaign appearances and media interviews.

After growing up on Long Island, he attended American University in Washington and went to law school at Western Michigan University. He returned to New York to practice law. He married into a Ukrainian family and soon bought taxi medallions, which allowed them to operate cabs on the congested streets of New York City.

In an unsuccessful campaign for City Council in 2003, he described himself as a “Businessman, Attorney and Community Activist” and said he had bought more than 200 taxis.

Legal filings in a dispute with his long-time partner, a polo-playing Ukrainian émigré named Simon Garber, show that Cohen and his wife made $90,000 a month from their medallions in 2011.

Bottom Line

But Cohen’s taxi fortunes appear to have waned. Municipal records show Cohen and his wife have 32 taxi medallions in New York City and at least 22 in Chicago.

While New York medallions were worth more than $1 million each as recently as 2014, their value has plunged with the rise of ride-sharing companies like Uber and Lyft. Medallions are now worth about $200,000.

That drop would have affected Cohen, who has refinanced his New York medallions an average of every 1.4 years, records show. His last round came in December 2014, with Sterling National Bank. Those loans are due in December 2019, unless he refinances again. Records don’t reflect how much he actually borrowed.

Cohen also owns lots of New York City real estate. He said last year he owned 115 apartments in the city. And he has a history of buying units in Trump buildings.

In 2001, he bought a 15th-floor unit in Trump World Tower, across from the United Nations. The building, which opened in the wake of historic capital flight from Russia, became a magnet for funds from the former Soviet Union. Among those who moved in were a Russian accused of mob ties and extortion by an oligarch, an Uzbek jeweler investigated for money laundering who was later shot and killed on the street in Manhattan, and a pro-Moscow Ukrainian politician.

Cohen’s in-laws, who are from Ukraine, followed him into the building, spending almost $8 million on three units in the building between 2003 and 2005. Cohen bought a $5 million unit at Trump Park Avenue, around the corner from Trump Tower in Manhattan.

Trump’s Circle

In classic Trump fashion, Cohen’s devotion to the brand earned him entree into Trump’s circle. In 2007, the New York Post chronicled Cohen’s purchases in Trump buildings.

“Trump properties are solid investments,” Cohen told the paper. “Michael Cohen has a great insight into the real-estate market,” Trump said in the same article. “He has invested in my buildings because he likes to make money – and he does.”

Trump hired Cohen three months later.

As Cohen became ensconced in Trump’s world, he took on his own development projects. From 2011 through 2013, limited liability companies affiliated with Cohen purchased four walk-up buildings in lower Manhattan, paying $11.4 million in cash, before taking out another $13.9 million to pursue an aggressive flipping effort, replacing boilers, updating plumbing, and adding partitions to create more bedrooms.

The quick work drew ire from residents, who filed formal complaints about burst water pipes, and work being done without proper permits.

But the plan proved lucrative. In late 2014, Cohen’s companies doubled their initial investment when they sold the buildings to companies affiliated with the descendants of Clarence Seid, a Brooklyn-born lawyer and ham-radio enthusiast. The family, including Herbert Chaves, who married Seid’s daughter Jane, was looking to reinvest its gains from the $38 million sale of a Brooklyn development site to a partnership of SL Green and Kushner Cos., then run by Jared Kushner, Trump’s son-in-law.

The Seid-Chaves family partnered with Cohen again a few months later, to purchase an Upper East Side apartment building for $58 million, taking out a $17 million mortgage to do so. Cohen’s companies control 38 percent of the property, public records show.

In October of last year, Cohen sold his unit in Trump World Tower for $3.3 million. His in-laws still have units there.

— With assistance by Andrew Martin, Dune Lawrence, and Shahien Nasiripour

DOJ gives House Intel original document that prompted Russia investigation

April 12, 2018

The Hill


The Justice Department has provided House lawmakers with access to a two-page document that the FBI used as the basis for initiating its original counterintelligence probe into the Trump campaign’s ties to Russia.

All members of the House Intelligence Committee received access to the document, a Justice Department official confirmed to The Hill on Wednesday.

Committee Chair Devin Nunes (R-Calif.) had requested access to the unredacted document, complaining that previous “heavily” redacted versions were not adequate for committee Republicans’ investigation into alleged abuses at the Justice Department.

Image result for Trey Gowdy, photos

Trey Gowdy

According to Nunes, he and House Oversight and Government Reform Committee Chairman Trey Gowdy (R-S.C.) met with Deputy Attorney General Rod Rosenstein on Wednesday afternoon—one day after Nunes threatened to hold both Rosenstein and FBI Director Christopher Wray in contempt and initiate impeachment proceedings against them if they did not comply with the request for the unredacted document.
“During the meeting, we were finally given access to a version of the [Electronic Communication] that contained the information necessary to advance the Committee’s ongoing investigation of the Department of Justice and FBI,” Nunes said in a statement.

“Although the subpoenas issued by this Committee in August 2017 remain in effect, I’d like to thank Deputy Attorney General Rosenstein for his cooperation today,” he added.

According to a Justice Department official, the remaining redactions in the document are “narrowly tailored to protect the name of a foreign country and the name of a foreign agent.” Specifics have been replaced with identifiers like “foreign official” and “foreign government,” the official said.

“These words must remain redacted after determining that revealing the words could harm the national security of the American people by undermining the trust we have with this foreign nation,” the official continued, adding that they appear “only a limited number of times, and do not obstruct the underlying meaning of the document.”

A handful of conservatives are investigating what they say is evidence that the department’s decisionmaking during the 2016 election was riddled with bias—allegations that Democrats see as a transparent effort to muddy the waters around Mueller, or provide a pretext to shut him down.

“We’re not going to just hold in contempt. We will have a plan to hold in contempt and impeach,” Nunes said of the two Trump-appointed officials on Fox News on Tuesday.

Nunes told Fox’s Laura Ingraham that the document will confirm why the FBI opened its original investigation into the Trump campaign.

The New York Times reported in December that the federal probe—now in the hands of special counsel Robert Mueller—was initiated after the FBI received a tip that Trump campaign adviser George Papadopoulos had claimed to an Australian diplomat that he had dirt on Hillary Clinton.

A memo authored by staff for Nunes that was declassified in February affirmed that the bureau opened the probe after receiving the tip regarding Papadopoulos.

But on Tuesday, Nunes appeared to cast doubt on that narrative.

“We haven’t been able to see the EC to confirm that,” Nunes told Fox, referring to the two-page document that he viewed Wednesday.

The revelation about Papadopoulos’ role ran counter to claims by some Republicans that the FBI used information from an unverified dossier of opposition research into Trump that was partially funded by Hillary Clinton and the Democratic National Committee to open the probe.

That document—known as a the “Steele” dossier after its principle author, former MI6 agent Christopher Steele—made a series of allegations about the business mogul’s ties to Moscow. President Trump, who has repeatedly blasted the Russia probe as a “witch hunt,” has also described the dossier as fiction and its role in the federal investigation has become a flashpoint on the right.

While Rosenstein’s willingness to let Nunes view the document appears to have succeeded in keeping the peace for now, Republican lawmakers on a separate committee are also fuming at what they say is an department foot-dragging on many of their attempts to obtain and review records.

Rep. Jim Jordan (R-Ohio), a House Judiciary Committee member, said if his panel does not receive the documents they’ve requested as part of his panel’s investigation into FBI decision-making during the election, then all options are on the table.

“Our patience has run out because the American people’s patience have run out so I think if they don’t change things in a dramatic fashion in a short period of time — I’m talking days, not weeks or months — then I think everything is on the table,” Jordan told The Hill on Wednesday.

He said this includes contempt and impeachment proceedings as well as calling for resignations.

Image result for Adam Schiff, photos

Rep. Adam Schiff (D-Calif.), the top Democrat on the House Intelligence Committee, defended the two officials after Nunes publicly voiced his impeachment threat.

“Both Rosenstein and Wray have already made available to the Intelligence Committee scores of highly sensitive documents related to ongoing investigations — including Foreign Intelligence Surveillance Act (FISA) applications — the details of which the majority proceeded to disclose in a deliberately misleading manner which the department rightly called ‘extraordinarily reckless,’” Schiff said in a statement.

“The chairman’s rhetoric is a shocking and irresponsible escalation of the GOP’s attacks on the FBI and DOJ,” he added, claiming it is intended to undermine Mueller’s probe.

Updated at 9:51 p.m.

When it comes to Mueller — Trump needs to play the long game

April 11, 2018

New York Post

Senators Tell Facebook CEO the Days of Self-Regulation May End — “Your user agreement sucks,” Senator John Kennedy says

April 11, 2018


By Todd Shields, Steven T. Dennis , and Sarah Frier

  • Data leak brings Facebook’s Zuckerberg before Senate panels
  • Democrats lean in toward regulation of online privacy
Watch the Highlights from Mark Zuckerberg’s Marathon Congressional Testimony


Senators grilling Facebook Inc.’s co-founder Mark Zuckerberg over a data leak signaled they may move to rein in the social media giant, which has thrived as part of an online industry that’s largely escaped regulation.

“Your user agreement sucks,” Senator John Kennedy, a Louisiana Republican, told the 33-year-old CEO on Tuesday. “I don’t want to vote to have to regulate Facebook, but by God I will. A lot of that depends on you.”

Mark Zuckerberg on April 10

Photographer: Andrew Harrer/Bloomberg

Zuckerberg spent hours as the sole witness before a joint hearing of two committees mustering almost half of the U.S. Senate members. The appearance followed the revelation that data from as many as 87 million users was siphoned to Cambridge Analytica, a British firm with ties to the 2016 campaign of President Donald Trump.

Facebook shares jumped to their highest level in more than two weeks, and closed up 4.5 percent Tuesday. The stock was down 0.40 percent Wednesday premarket.

Zuckerberg is to testify Wednesday before the House Energy and Commerce Committee, rounding out a Capitol Hill tour that’s part apology and part defense of the company that’s grown to encompass 2 billion users worldwide since being founded in a Harvard University dorm room in 2004. On Tuesday, Zuckerberg said he was willing to consider new restrictions, and agreed to send suggestions to Congress.

“My position is not that there should be no regulation,” Zuckerberg said. “The real question, as the internet becomes more important in people’s lives, is what is the right regulation.”

Understanding the Facebook-Cambridge Analytica Story: QuickTake

Facebook, fending off the Cambridge Analytica furor, has promised steps to improve transparency, saying, for instance, that it would create a searchable archive for federal election ads. Some lawmakers said they didn’t view Facebook’s recent steps as enough. Senators said there will be more hearings. Some greeted Zuckerberg with thinly disguised belligerence.

‘Dark Side’

Senator Lindsey Graham, in a statement after questioning Zuckerberg, said there is ”a dark side to Facebook.”

“Facebook is a virtual monopoly and monopolies need to be regulated,” said Graham, a South Carolina Republican.

“The status quo no longer works,” said Senator Chuck Grassley of Iowa, the chairman of the Judiciary Committee. “Congress must determine if and how we need to strengthen privacy standards.”

Republicans hold majorities in both houses of Congress, and the party has historically been averse to regulating industry, so their statements envisioning regulation carry significance. At Tuesday’s hearing GOP senators including Roger Wicker, of Mississippi, and Orrin Hatch, of Utah, cautioned against regulation.

Democrats are ready to lean in, casting the Cambridge Analytica scandal as a watershed.

“Oh sure, I think we’re going to have to do privacy legislation now,” Senator Amy Klobuchar, a Minnesota Democrat, said in an interview during the hearing.

‘Day of Reckoning’

“The day of reckoning for American privacy has arrived,” said Senator Ed Markey, of Massachusetts. “Facebook now has to deal with how much people understand about how vulnerable all their information is and how few protections are on the books. So I do think this is a legislating moment.”

Markey said he introduced a privacy bill Tuesday, co-sponsored with Connecticut’s Richard Blumenthal, a fellow Democrat, that offers a suite of new protections for consumers.

How Russia Meddling Became Social Media’s Problem: QuickTake Q&A

The leading legislative vehicle, the Honest Ads Act, introduced last year, would put online companies under disclosure rules like those in place for political ads on TV, where information is disclosed about who paid for the ad.

The bill picked up Zuckerberg’s endorsement last week as the Facebook leader began his contrition tour. The measure, sponsored by Democrats and one Republican — Senator John McCain, of Arizona — picked up more industry backing on Tuesday, as Twitter Inc. said the bill “provides an appropriate framework.” The company said it would work to “refine and advance” the proposal.

Silent Google

Klobuchar, a co-sponsor of the act, welcomed Twitter’s stance and called for Alphabet Inc.’s Google to support the bill. Google declined to comment.

“Whether it’s on Facebook, Twitter, Google, or another site, Americans have a right to know who is paying to influence public discourse regardless of where ads are sold — and a standard across platforms is crucial,” Klobuchar said in a statement.

Zuckerberg under questioning refused to offer a blanket endorsement of legislation to ensure that users’ information is shared only after they give specific permission — a regime known as “opt-in.” Now, Facebook users may have little knowledge of what applications are seeking their data. Zuckerberg said he would support requiring opt-in “as a principle” but when it comes to laws, “the details matter a lot.”

Senator Dan Sullivan, an Alaska Republican, observed that legislation could end up cementing a dominant power. “Do you think that’s a risk,” he asked Zuckerberg, who replied, “That certainly wouldn’t be our approach.”

Honest Ads

The Honest Ads proposal, centered on disclosure, is an important step but more needs to be done, said Fred Wertheimer, president of Democracy21, a Washington-based group that seeks to eliminate what it calls “the undue influence of big money in American politics.”

Congress should strengthen prohibitions against foreign spending on political ads, Wertheimer said. Current law didn’t anticipate circumstances like Russian groups pushing campaign-related ads online, he said.

Facebook has disclosed that posts from a Russian company known for pushing Kremlin propaganda had reached the news feeds of 126 million users.

How Russia Meddling Became Social Media’s Problem: QuickTake Q&A

Whether Washington acts or not, Facebook needs to step forward and “fix the problems,” Wertheimer said.

“They can’t humble their way out of this,” he added. “Apologies are fine but they don’t solve the problem.”

The Honest Ads Act “is dealing with the tip of an iceberg,” said Meredith McGehee, executive director at Issue One, a policy group that promotes transparency and disclosure. “There’s a lot of things that are on social media, that are on these platforms, that would not be captured by the Honest Ads Act.”

There’s a galaxy of manipulators that U.S. regulation doesn’t touch — “the fake personas, the bots,” that sow disinformation, McGehee said. She said hearings are needed to illuminate the issue.

In response to the Cambridge Analytica leak, the Federal Trade Commission has opened a probe that could result in millions of dollars of fines for Facebook. Separately, the Federal Election Commission is moving toward requiring online political ads to show details of sponsorship — a proposal that even commission members characterize as a narrow reform.

— With assistance by Bill Allison, and Arit John

Includes video:


  (Includes links to our Facebook archive)

The Zuckerberg Effigy

April 11, 2018

A Silicon Valley CEO sticks up for a culture of trying new things and learning by doing.

Facebook CEO Mark Zuckerberg testifying before a joint hearing of the Senate Judiciary and Commerce committees, April 10.
Facebook CEO Mark Zuckerberg testifying before a joint hearing of the Senate Judiciary and Commerce committees, April 10. PHOTO: LEAH MILLIS/REUTERS


“Senator, we run ads.”

So declared Mark Zuckerberg in answer to Orrin Hatch about how the company makes money if it doesn’t charge users of its service. And then he cracked his first smile of the day.

Tuesday’s was a good hearing for the Facebook founder, as demonstrated by Facebook’s stock price, which the business channels tracked during his testimony.

The famously casual CEO donned a suit, if not the white wig and black robes that probably still wouldn’t have satisfied those who criticize him for a lack of gravitas. (When the old criticize the young for looking young, a whole lot of baggage is on display.)

His friends may want to send a donation to Ted Cruz for showing up. The Texas Republican would make an aardvark look simpatico in comparison.

Mr. Zuckerberg ably swatted down the casual slur that his company “sells” consumer data. It doesn’t. It keeps control of user data and leverages it to help advertisers target potential customers.

Unrelated complaints were dragged in: Facebook is addicting. It’s a monopolist. The Russians use it. Liberals work there.

Apple CEO Tim Cook a few weeks ago snootily alluded to Facebook’s advertising-based business model (also a basis for the news and entertainment businesses for a couple of centuries). That theme was repeatedly summoned in quasi-pejorative fashion during the hearing. But notice that it wasn’t Facebook that recently had a problem with theft of private, intimate celebrity home videos. Apple did.

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Facebook CEO Mark Zuckerberg listens to a question while testifying at a Joint Senate Judiciary and Commerce Committee hearing on Facebook, social media privacy, and the use and abuse of data, on Capitol Hill in Washington, D.C. on Tuesday. Photo by Kevin Dietsch/UPI

And notice why: Facebook is for information that people want to broadcast about themselves. They sign up “friends” willy-nilly to increase the audience for their revelations.

Facebook never asks for my credit-card number, though plenty of websites do, and plenty have suffered data breaches of real consequence that make the Facebook “breach” look even more overblown. Facebook users don’t post their bank-account numbers. If they mention their incomes, it’s probably a lie. The result, if any, of the alleged Facebook breach was indistinguishable from the daily routine: Facebook users saw ads.

If you are worried about somebody turning your deepest secrets into advertising, that’s not Facebook—it’s the search engine Google. Mr. Zuckerberg conceded that probably all two billion users have had their data “scraped” from the site. No kidding. Google is the biggest scraper: Google is often how you find an acquaintance has a Facebook page in the first place. But this is information that Facebook posters wanted others to find.

Not that there isn’t a real privacy menace related to social media. To our pleasant surprise, it was alluded to briefly by Sen. John Thune in his opening comment.

It’s already been five years since researchers showed that a tiny sample of “anonymized” cellphone location data was sufficient to identify individual users with 95% accuracy by comparing it to publicly available social-media data.

You’d be surprised how much government data about you (tax, health care) is being distributed by the government to outsiders for research or commercial purposes, supposedly “de-identified.” Not to mention the information about you collected by businesses. To show your face in public these days is to create data. To drive your car is to create data. The concern has even been extended to blood and tissue samples compiled by hospitals, which have routinely been widely distributed for research purposes.

Now consider that you voluntarily fill the world with tweets, Facebook posts, web comments, etc. that a re-identification industry can use as a resource to tie your name to what was supposed to be anonymized statistical data.

We would have welcomed further discussion of this matter from this week’s Zuckerberg waterboarding, which instead was all about congressmen being seen barking at a Silicon Valley kingpin. Fortunately there’s also learning going on. New forms of social media are being invented every day. Users are already making increasingly subtle decisions about whether to communicate by voice, text, Facebook, a message app, a tweet or an email, depending on the nature of the message and intended audience.

Such learning is likely to be a better solution to social-media quandaries than any Congress might come up with.

This column has had doubts about Facebook’s business model from the beginning, which we won’t repeat here. But Mr. Zuckerberg’s rather healthy attitude of trying things and seeing what happens, then correcting course as he goes along, has innate appeal. This week, alas, it came up against people who prosper by being on all sides of every issue, for whom admitting a mistake is the final, desperate recourse only when a career is going down the tubes.

What is most sad is to see the ethos of Washington finally subsuming what, for a time at least, was Silicon Valley’s bright and cheerful sense of possibility. Mr. Zuckerberg’s performance Tuesday did not stop a steamroller that’s been building up momentum for months, but he ably represented what Silicon Valley has always had to offer.

Appeared in the April 11, 2018, print edition.


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How Facebook and Google threaten public health – and democracy

Zuckerberg talks Facebook’s next steps with senators

April 11, 2018

By Sara Shayanian and Sam Howard  |  Updated April 10, 2018 at 8:46 PM

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Facebook CEO Mark Zuckerberg testifies during a Joint Senate Judiciary and Commerce Committee hearing on Facebook, social media privacy, and the use and abuse of data, on Capitol Hill in Washington, D.C. on Tuesday. Photo by Kevin Dietsch/UPI

April 10 (UPI) — In testimony Tuesday on Capitol Hill, Facebook CEO Mark Zuckerberg told lawmakers he’s “committed to getting this right” after millions of the site’s users possibly fell victim to a data breach.

Lawmakers summoned Zuckerberg for more than five hours to ask him about the Cambridge Analytica data breach that resulted in possibly 87 million people unwittingly disclosing their personal information.

Zuckerberg defended his company’s response to the data breach, but said its actions didn’t go far enough.

“We took down the app, and we demanded that both the app developer and Cambridge Analytica delete and stop using any data that they had,” he said. “They told us that they did this. In retrospect, it was clearly a mistake to believe them.”

In the future, Zuckerberg pledged to “conduct a full audit” of Facebook apps the company determines to be suspicious.

“If we find that they’re doing anything improper, we’ll ban them from Facebook and we will tell everyone affected,” he said.

Facebook has taken steps to make it easier for users to control what they share and delete collected data. Monday, the site began allowing users to see if their information was shared.

Sen. Joe Kennedy, R-La., added a suggestion for further improvement, telling Zuckerberg that Facebook’s current user agreement “sucks.”

“The purpose of that user agreement is to cover Facebook’s rear-end,” Kennedy said. “It’s not to inform your users about their rights. Now, you know that and I know that. I am going to suggest to you that you go back home and you rewrite it.”

Zuckerberg also said Facebook employees were cooperating with special counsel Robert Mueller‘s probe into Russian meddling in the 2016 election. He confirmed Mueller’s team has interviewed Facebook employees while speaking to members of the Senate’s judiciary and commerce committees.

“I want to clarify, I’m not sure we have subpoenas,” Zuckerberg said. “I know we’re working with them.”

He added that one of his “greatest regrets” is his company’s slow response to pinpoint Russian bad actors on Facebook during that election cycle.

By the end of the trading day on the New York Stock Exchange, Facebook stock was up about 4.5 percent.

On Wednesday, Zuckerberg will testify before the House Energy and Commerce Committee at 10 a.m.

Russian Olagarch Oleg Deripaska — Pursued one of the few things he couldn’t buy: American acceptance — Now faces financial meltdown

April 11, 2018

By Stephanie Baker

Oleg DeripaskaPhotographer: Andrey Rudakov/Bloomberg

For two decades, Oleg Deripaska pursued one of the few things he couldn’t buy—American acceptance—with all the tenacity you’d expect from a man who built what was once the world’s ninth-largest fortune.

The Russian billionaire hired Wall Street lawyers and K Street lobbyists, bought a Washington mansion on Embassy Row and even offered to help find a missing American spy in Iran. But each attempt to obtain a basic U.S. travel visa was ultimately rejected over his alleged brutality in amassing the wealth that opened so many doors elsewhere, including to Vladimir Putin’s Kremlin.

The U.S. on Friday hit Deripaska with what may end up being the most costly sanctions ever imposed on a businessman and his publicly traded companies. He was singled out probably because he tried to get a visa so many times that U.S. officials have investigated him more deeply than any other Russian tycoon, according to Anders Aslund, a senior fellow who studies the Russian economy at the Atlantic Council in Washington.

“He had too high a profile,” Aslund said. “The higher your profile, the more likely you are to get caught in the crossfire.”

The measures imposed amount to what Treasury officials refer to privately as the nuclear option—shutting Deripaska and his companies out of the dollar economy, which halved the market value of his aluminum giant United Co. Rusal overnight. The sanctions were a response to Putin’s “malign activity” in general and Deripaska’s alleged crimes specifically, Treasury said.

Deripaska’s ties to Putin and dealings with Paul Manafort, the former Trump campaign chairman who was indicted for money laundering as part of Special Counsel Robert Mueller’s investigation into election meddling, only add to concerns about the billionaire’s actions and intentions, according to Dan Fried, sanctions coordinator at the State Department during the Obama administration.

“Deripaska had it coming,” Fried said. “It wasn’t only the long-standing corruption allegations. It felt like he was messing with our system too much.”

Donald Trump
Photographer: Andrew Harrer/Bloomberg

While the Obama administration considered adding Deripaska, 50, to the first round of Russian sanctions, imposed over Ukraine in 2014, it opted to squeeze individuals and entities more directly tied to the government or personally to Putin. Now, though, President Donald Trump, whose relations with Russia are being scrutinized by Mueller, has political reasons to turn the Putin ally into a pariah.

The penalties slapped on Rusal and other Deripaska companies effectively ban aluminum imports from Russia, which account for 14 percent of U.S. consumption. The move comes as Trump introduces tariffs on aluminum and other products from abroad to honor protectionist pledges. Alcoa Corp., Rusal’s largest U.S. competitor, jumped 6.7 percent Monday, the most in a year.

Fried said “some knowledgeable people” in the Trump administration are referring to the decision to punish both a close Putin associate and the largest aluminum supplier outside of China as a “twofer.” Aslund said it’s clear that the drafters of the sanctions at Treasury knew they’d be “taking out” Rusal and therefore about 7 percent of the world’s aluminum production.

While the U.S. included six other so-called oligarchs in the latest round of penalties, it reserved its harshest words for Deripaska. A former Red Army conscript with a physics degree, he got his start in business scooping up newly issued worker shares in Siberian smelters in the 1990s and emerged victorious from the bloody and gangster-ridden aluminum wars.

“Deripaska has been investigated for money laundering and has been accused of threatening the lives of business rivals, illegally wiretapping a government official and taking part in extortion and racketeering,” Treasury said. “There are allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organized crime group.”

Deripaska said the allegations were “groundless, ridiculous and absurd.” In an interview with Bloomberg in Moscow in 2011, he spoke with pride of centralizing the bulk of the Soviet Union’s aluminum sector. “Rusal is not a company, it’s an industry in Russia,” he said at the time.

Other Russians added to the list include Kirill Shamalov, who married Putin’s youngest daughter about five years ago, and Viktor Vekselberg, a minority Rusal shareholder who attended Trump’s inauguration, but those penalties pale in comparison, according to Adam Smith, a former Treasury official who’s now a partner at Gibson Dunn & Crutcher in Washington.

“It’s pretty rare” to blacklist two public companies—Hong Kong-listed Rusal and EN+, which trades in London, Smith said. “This is an escalation that’s important to recognize.”

David Kramer, a State Department official under President George W. Bush, said he was surprised by the exclusion of two billionaires close to Putin in particular—Alisher Usmanov, who controls Russia’s largest iron ore producer, and Roman Abramovich, the largest shareholder in steelmaker Evraz.

Oleg Deripaska with Alisher Usmanov in Davos, Switzerland, on Wednesday, Jan. 23, 2013.
Photographer: Chris Ratcliffe/Bloomberg

“Still, it was a great list that took some swings at oligarchs close to Putin,” said Kramer, now a senior fellow at Florida International University in Miami. “They clearly wanted to leave room for adding more names.”

Abramovich, a former Deripaska partner, told a London court in 2011 that the aluminum wars were a bloody chapter in corporate Russian history in which “every three days, someone was being murdered.”

Deripaska has admitted in court documents to paying $254 million in protection money back then to a man he alleged was part of a criminal group that extorted money. The events of that period continued to be cited as reasons for rejecting Deripaska’s visa overtures in the U.S. more than a decade later.

The FBI angered the State Department in 2009 by allowing Deripaska to enter the U.S. twice after he offered to help locate a retired agent, Robert Levinson, who had disappeared in Iran. The FBI ended the special arrangement after concluding that Deripaska was bluffing, further eroding his relations with U.S. officials, according to two people familiar with the matter.

Even an unusually personal request to help Deripaska from Russian Foreign Minister Sergei Lavrov was rejected in 2010. Since then, Deripaska has entered the U.S. almost a dozen times on a Russian diplomatic passport, court filings show. He’s also acquired citizenship in Cyprus, a European Union member.

Last year, Deripaska offered to testify to congressional panels investigating Russian election interference about his relationship with Manafort in exchange for immunity—and a visa.

Paul Manafort exits court in Washington, D.C. on Oct. 30, 2017.
Photographer: Zach Gibson/Bloomberg

His ties to Manafort are still being scrutinized by Mueller. The former partners had a falling out over $18.9 million that Deripaska invested with Manafort in a Ukrainian company in 2007. After years of squabbling, Deripaska filed a lawsuit in January in New York, claiming Manafort defrauded him.

Manafort offered through an intermediary to provide briefings on the Trump campaign to Deripaska in an effort to resolve their dispute. Both men deny the briefings ever occurred.

What matters now from the U.S. perspective is that Deripaska is made to suffer financially to demonstrate resolve and reach, according to George Voloshin, who runs the Paris office of Aperio Intelligence Ltd., a financial crimes and business intelligence firm.

“The ultimate goal is to strike his empire and wreak havoc,” Voloshin said. “It sends a signal to other oligarchs that they could be next.”

— With assistance by Alan Katz, and Yuliya Fedorinova