The International League of Dark Money

Donald Trump and Vladimir Putin are bent on destroying the peaceful international order that the United States built after World War II. They're hostile to the World Trade Organization, NATO, you name it. But Trump is not the only complicit American here. Because Trump and Putin are champions are a very different, more lawless international order, which many wealthy Americans participate in and derive benefit from: the international league of dark money.

Whatever else does or doesn't bind Trump and Putin, they're united by their dependence upon international money laundering, which moves large amounts of cash across borders in disguised transactions. Putin's oligarchs routinely move their dirty money into the West through shady means, and Trump's real estate business has become heavily dependent on Russian customers whose money should not be examined too closely. The Trump Organization may not actually launder money, but they accept a lot of well-fluffed money straight out of the laundry room. Both Trump and Putin have strong vested interests in keeping the dark money flowing and keeping it out of sight.

They're not alone. There is a robust international infrastructure of shell companies, off-shore banks, and shady middlemen devoted to moving money around while disguising where it comes from. This is especially convenient for people who can't admit where how they got that money or even that they have it. Money laundering allows corrupt government officials in Russia or Nigeria to spend their graft in the West. It allows organized criminals to spend their profits from drugs, gun-running, and human trafficking. And it allows international terrorists to fund operations overseas. So there are strong reasons for the world community, working through the post-WWII international order, to close the flow of laundered money down.

Without access to money laundering, big-time criminals would not be able to use most of their ill-gotten money, because to spend it they would need to explain where they got it. Without access to money laundering, money stolen by corrupt officials could only be spent in the same country those officials help to impoverish. Without money laundering, terrorists could not support sleeper cells in foreign countries or fly volunteers to battle areas. A world where every bank transaction was transparent and on the level would be a better and safer place.

But the money-laundering infrastructure also enables tax evasion. (I mean, no one launders money so they can pay taxes on it.) And many wealthy and prominent people in America and the rest of the developed West use their legal resources to evade taxes. They use shelters and shell companies and foundations to avoid paying their full share of the tax burden, to pass on multi-million-dollar inheritances tax free, and to disguise some of the ways they spend their money. Take a look at the Panama Papers some time, which opens to a window on a single law firm's efforts to get around tax laws for its clients. You see both Russian oligarchs and Western celebrities and politicians, including a former British Prime Minister, in those pages. Lots of nominally law-abiding people rely on offshore accounts and tax havens and largely fictitious legal entities to keep from paying taxes like the rest of us. Closing down the money-laundering system on criminals and terrorists would also close down the tax-evasion system on otherwise legitimate rich people. After all, they're the same system.

Trump and Putin want a world where legal and financial accountability stops at every border, where moving money overseas moves it out of the authorities' sight forever. The existing maze of international loopholes, which already allows tens of billions of secret dollars to flow through anonymous bank accounts, is still too transparent for them. So they want to destroy any lawful international agencies which might have the tools to close down the dark money. They want a world without effective international institutions, because only international institutions can effectively fight money laundering.

But you will find plenty of well-placed Americans and Europeans who don't want international financial controls, either. They want their shell companies and make-believe charitable foundations and secret accounts in the Caymans. They might not care much for Putin. They might detest the jihadists or the Mafia or the Crips. But they won't support the steps necessary to close down Putin or the Crips, because that would mean closing down other businesses that they actually own. It is just one of the many ways that elements of our ruling class are complicit in Russia's attacks on this country.

cross-posted from Dagblog; please comment there, not here

On the

Presidential Pardons and Obstruction of Justice

One thing is finally clear about the Russia investigation, thanks to Donald Trump, Jr.'s decision to tweet his incriminating e-mails: someone is going to prison over this. All three principals who took that meeting looking for Russian oppo research, Manafort, Kushner, and Trump, Jr., are likely in serious criminal jeopardy. Other figures (like Flynn, Sessions, and peripheral creeps Eric Prince, Carter Page, and Roger Stone) may be in danger of prison as well. But the Trump Tower Three certainly are.

The best advice any lawyer could give Donald Trump, Jr. is to flip, to make a deal with the prosecutors (immediately, right now) and agree to testify against someone higher up. But that is never going to happen, because it would mean turning on his own father, Donald Senior. Trump Junior is clearly unequipped for that. It would be hard for anyone to turn evidence on your mother or father, and Donald Junior isn't able to stand up to his father about much more trivial things. Not going to happen.

On the other hand, Donald Senior is not about to see his own son, or his favorite son-in-law Kushner, go to federal prison. So at some point President Trump may find himself overwhelmingly tempted to use his presidential pardon power. Pardoning people for crimes that helped put Trump himself in office would, under any of the usual American standards, be political suicide, but that does not mean Trump won't do it. He can't resist the temptation to tweet nasty things at cable TV personalities; he has nothing like the willpower or integrity to stay out of a Trump Junior prosecution. Trump does not believe the rules apply to him, which is what makes him so dangerous to the republic as a leader, but he also genuinely does not understand how rules, laws, or the Constitution actually work.

So Trump may trigger a genuine Constitutional crisis, triggering an unresolved problem in the Constitution itself: the danger that the President will use his pardon authority to carry out crimes against the Constitutional order, giving his accomplices impunity. Yes, the President would still be subject to impeachment and removal, but there would be no remedy short of that.

My (admittedly quick) glance at The Federalist (#69 and #74), doesn't help much. In #69, Hamilton concerns himself with plots for a military seizure of power, which is no longer necessary in an executive that commands a powerful standing army and security establishment. In #74, Hamilton is more concerned with Shays's Rebellion, which had after all helped prompt the Constitutional Convention, and focuses on the President's authority to pardon rebels as a tool for restoring domestic peace. (Hamilton is responding to the argument that the President should need at least one house of Congress to confirm pardons, and points to the Shays's Rebellion pardons as evidence for the benefits of the power to assure a speedy pardon.) You can say that the Framers did not quite plan for this situation, or perhaps more accurately you can say that the Framers gave Congress impeachment power to deal with it. But only the impeachment power.

So what happens if Trump decides to pardon his own confederates who are facing criminal charges for their work on his campaign? What if he pardons Kushner? Or what if he pardons Flynn and Manafort (both of whom are more likely to turn cooperating witness, because they're not related to Trump and might be looking at serious prison time)? Does he have the legal power to do that? The most likely answer is that he has the power, because it's one of the powers of his office, but using it would be a crime.

How can this be? Because doing something that is otherwise perfectly legal can become a crime when it is done to obstruct justice. Trump has the legal right to fire the FBI Director; firing the FBI Director to stop an investigation into his own advisers is obstruction of justice. Trump has the right to pardon federal criminals; pardoning one of his own flunkies to keep the flunky from testifying against Trump is criminal obstruction.

Put it this way: it is legal for me to buy a house. It is legal for me to pay more than asking price for a house (in fact, in some housing markets you have to). And it is legal to buy the District Attorney's house if he's selling it; public servants have to be allowed to sell their homes, too.

BUT, if I am under investigation by the District Attorneys office and I then offer to buy his house for, say, $100,000 more than the asking price (this is Cleveland; in San Francisco say a million over asking price) then it's attempted bribery and obstruction. Everything I did was legal, but I did it in order to obtain an illegal result. That is how the pardon power works, too. Chris Christie has the legal power to pardon criminal offenses in New Jersey; if he pardoned all of his own aides involved in Bridgegate, that's a new crime, because he would obviously be obstructing justice.

So if Donald Trump tries to squelch the Russia investigation by firing more investigators, or by pardoning his personal aides who are under investigation, that is obstruction and pretty clearly illegal. But the only remedy would be for Congress to impeach him.

cross-posted from, and all comments welcome at, Dagblog