What Has Mueller Really Done? Think.

Special counsel Robert Mueller has a lot to show for his two-year investigation. He's indicted some 37 individuals. Of those within his reach, most charged have pleaded guilty. Others have been convicted at trial. The remainder await trial.

The local gang have mainly been indicted for lying to investigators. Manafort added witness tampering to his caseload. There have also been indictments for tax evasion and other commercial crimes that surfaced through the investigations.

Two issues are conspicuous by their absence - obstruction of justice and Russian interference with the 2016 elections. There are a number of obvious offences there but they've never resulted in charges, at least not that we know.

Why has Mueller indicted no one for either of those issues? Not even one indictment. Why?

Part of the art of criminal law is identifying what's missing. For example the Crown may develop a theory of the crime and then it's up to defence counsel to scour all the discovery evidence and look not just at what has been produced but what has not, stuff that should be evident if the Crown's theory was valid. Prosecutors do the very same thing when it comes to dismantling alibis or other exculpatory evidence. In this way each side seeks to cast doubt on the other's case and, with the Crown bearing the onus of proof beyond a reasonable doubt, that's a powerful weapon.

What's missing in Mueller's case, the part that has already been aired in public? Pretty much everything dealing with obstruction or Russian interference in the 2016 election. Do you think he overlooked that, the very essence of his appointment?  The absence of that is hardly proof of its absence. That would be preposterous especially given Mueller and his team's stature. These are the 'Pros from Dover.'

Mueller spent two years doing more than sleuthing out amateurs like Papadopoulos, and middle-grade scoundrels such as Cohen, Manafort and Flynn. Most of those who pleaded guilty sang like canaries. Others, who escaped indictment, like David Pecker and Allen Weisselberg, also sang like canaries. Lesser characters who were grilled emerged saying that Team Mueller knew more about them than they did themselves.

So think. Think like a lawyer. Put this all together and what do you come up with?

Mueller was commissioned to investigate and report. He was not ordered to indict and prosecute.  When he did indict what was his purpose? That's obvious. He was doing what American prosecutors do in RICO cases. He was using the prospect of jail time, years in the Greybar Hotel, to loosen tongues. He wanted evidence going to the two foundational issues of his investigation, Russian meddling in the election and obstruction of justice.

Now, once again, think like a lawyer. Why do you think we've heard nothing about either of those matters?

Where There's Smoke... There's Wilbur

It's like dragging up a bucket of seawater and looking at all the tiny little critters swimming around inside. You're only getting the smallest of looks, a bare peep, into what's in the sea. A microcosm if you will.

The bucket of seawater in this case is being called the Paradise Papers, a massive media investigation into just two "offshore service providers and 19 tax haven's company registries." There are a bunch of critters, some of them tax cheats, who are being identified including Justin Trudeau's confidante and chief fundraiser, Stephen Bronfman.  Lorne has the rundown on Bronfman, here.

There's another, perhaps more interesting name, being splashed onto the pages of The Guardian, Wilbur Ross, Trump's commerce secretary, and it touches on the secretary's active business dealings with Vlad Putin's son-in-law, Kirill Shamalov, the husband of Putin’s daughter Katerina Tikhonova.

Leaked documents and public filings show Ross holds a stake in a shipping company, Navigator, through a chain of offshore investments. Navigator operates a lucrative partnership with Sibur, a Russian gas company part-owned by Kirill Shamalov.

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Analysts said the arrangement was troubling. Daniel Fried, an assistant secretary of state for European and Eurasian affairs under George W Bush, said Ross’s connection to “cronies of Putin” threatened to undermine US sanctions.

“I don’t understand why anybody would decide to maintain this kind of relationship going into a senior government position,” he said. “What is he thinking?”

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The disclosures come as inquiries intensify into Russian interference with the 2016 US election. Congress and Robert Mueller, the special counsel, are investigating possible collusion between Trump’s presidential campaign and Moscow. Ross has dismissed claims of collusion as “rumour and innuendo”.

The involvement of Ross and Shamalov in the shipping venture dates back to 2011. That year, Ross’s investment firm, WL Ross, began buying into Navigator with an investment that gave him two seats on the company’s board. Meanwhile, in Moscow, Shamalov began investing in Sibur, which was formerly state owned.

By January 2012, having built up his holding in the Russian company, Shamalov, then 29, was made its deputy chairman. That summer, WL Ross took control of Navigator by buying a further $110m stake from the collapsed Lehman Brothers bank.

Shamalov is the son of Nikolai Shamalov, one of Putin’s oldest friends from St Petersburg, where Putin worked in the mayor’s office. He married Katerina in a secret ceremony in February 2013.

Later that year, two ships from Ross’s company began transporting liquefied gas out of Russia for Putin’s son-in-law’s firm under a decade-long contract initially worth $226m.

Of greater interest is Wilbur's relationship to the Kremlin through his ownership interest in the major Cypriot bank, the Bank of Cyprus, where he served as vice-chairman. Cyprus is considered the first stop in the laundering of dirty money from Russia. It's alleged Paul Manafort laundered tens of millions of dollars in rubles through Cyprus before transiting through Deutsche Bank en route to a new life as real estate and other investments in the US.

Back in March, The Guardian took a look at Wilbur's dealings with Moscow while at the Bank of Cyprus. 

In 2015, while [Ross] served as vice-chairman of the Bank of Cyprus, the bank’s Russia-based businesses were sold to a Russian banker and consultant, Artem Avetisyan, who had ties to both the Russian president and Russia’s largest bank, Sberbank. At the time, Sberbank was under US and EU sanctions following Russia’s annexation of Crimea. Avetisyan had earlier been selected by Putin to head a new business branch of the Russian president’s strategic initiative agency, which was tasked with improving business and government ties.

Avetisyan’s business partner, Oleg Gref, is the son of Herman Gref, Sberbank’s chief executive officer, and their consultancy has served as a “partner” to Sberbank, according to their website. Ross had described the Russian businesses – including 120 bank branches in Russia – as being worth “hundreds of millions of euros” in 2014 but they were sold with other assets to Avetisyan for €7m (£6m).

Ross has not been accused of wrongdoing and there is no indication the Russian deal violated US or EU sanctions. Ross resigned from the Bank of Cyprus board after he was confirmed as commerce secretary last month.

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In 2014, the Bank of Cyprus was still considered to be in a precarious state following a dramatic €10bn rescue of Cyprus’s banking sector by the ECB and the IMF. Under the terms of the deal, many of the bank’s wealthy Russian deposit holders lost their cash and became shareholders in the bank.

Ross, who had made billions of dollars years earlier by betting on bankrupt steel mills, was known for taking risky bets. But his decision to inject €400m into the bank with other investors encompassed a different kind of risk. It put him at the centre of the biggest financial institution in a country that was widely considered to be a tax haven for Russian oligarchs, even as the US and EU were imposing sanctions on Russia. In 2014, the year he made his investment, the US State Department considered Cyprus an area of “primary concern” for money laundering (pdf), according to its official assessment.

Meanwhile, the Paradise Papers scandal seems to have Ross working overtime to distance himself from the Russians and not very convincingly.

Rockas, Ross’s press secretary, tried to distance Ross from the Sibur deal with a series of statements that were contradicted by other sources. He said the Navigator-Sibur deal was signed in February 2012, before Ross joined the Navigator board. But Sibur’s annual report for that year said the deal was signed in March.

Rockas said Ross did not join Navigator’s board until 31 March 2012. But a press release filed to the Securities and Exchange Commission on 2 March that year said Ross was by then already on the board. In ethics forms filed this year, Ross estimated that his start date had been January 2012.

Rockas said: “No funds managed by WL Ross & Co ever owned a majority of Navigator shares.” But a press release issued by the company in August 2012 was titled “WL Ross Agrees To Acquire Majority Stake In Navigator”.

Navigator vessels also carried out extensive business with the Venezuelan state oil company PDVSA, records show, at a time when Venezuela’s government was cracking down on opposition. Trump imposed sanctions on PDVSA in August.

Rockas said Ross “has been generally supportive of the administration’s sanctions of Russian and Venezuelan entities.” He said Ross had never met Shamalov, Timchenko or Mikhelson.

It raises the question of why so many Trump administration principals have such close financial ties to Russian companies, Russian oligarchs, even Putin himself. Both Paul Manafort and Wilbur Ross were operating in Cyprus during the same period, Cyprus the first link in the money laundering trail leading out of Russia. Ross who was the vice-chairman of the Bank of Cyprus resigning only once he was confirmed to his appointment as Trump's commerce secretary.

What I want to know now is what does Robert Mueller know.

I Hope Bob Mueller Has a Sense of Humour

There are some things that just get better with age. That includes scandals. They need time to soak and simmer. Yesterday it was Manafort (plus one) and Papadopoulos.

Trump began yesterday running for cover, focused on distancing himself from Paul Manafort. His former campaign manager's foibles had nothing to do with Trump or his presidential campaign. Besides it all was old news by the time Trump decided to run. It was unconvincing but probably was just what Trump's base wanted to hear.

The George Papadopoulos guilty plea, well that caught Trump off guard. He had to hold fire until he could work out what to say. Today the Mango Mussolini lashed back, calling Papadopoulos a "liar." Hard to argue that one. The guy did plead guilty to lying to FBI investigators. He's a confessed liar. Only Trump needs to maintain that everything Papadopoulos told the FBI after he was caught lying, that's the real lie. Talk about reed thin.

Curiously enough the Russians got into it too. A Russian government spokesperson is arguing that Mueller's case is "cooked up."   Really, how so?


...the spokeswoman for Russia's foreign ministry, Maria Zakharova, pointed out that the 31-page indictment wrongly describes Yulia Tymoshenko as a former president of Ukraine.

In fact, Tymoshenko twice served as the country's prime minister, before being jailed in 2011 on embezzlement charges that the U.S. and others said were politically motivated.

"I liked a lot the bit that, it turns out, according to the recent findings of American enforcers, the Ukrainian president before [Viktor] Yanukovych was Yulia Tymoshenko," Zakharova told the state-owned Russia 1 television station Monday. "We did not know that, but there you go."

She suggested that the mistake undermined the rest of the indictment.

"This is a very important moment showing the way how, once again, this document had been made, cooked up," Zakharova added. "You understand when you talk about serious investigation one cannot allow things like that."

Why am I suddenly thinking Rocky and Bullwinkle, Boris and Natasha? Why did Team Putin even decide to air such a stupid argument?

If this is what we're getting on Day 2 you can only imagine what awaits in the coming weeks as more information comes out of the investigation. It does sound as though Mueller has Putin as rattled as Trump.

There's plenty of new speculation that Papadopoulos, described by the FBI as a "proactive cooperator" probably spent a good bit of time since July meeting with Trump's people while wearing a wire.

Harry Litman, a former US attorney and deputy assistant attorney general, wrote in the New York Times that Papadopoulos' guilty plea is far more immediately ominous to the president and his inner circle than the charges against Manafort and Gates.

A paragraph in the plea agreement indicates that Papadopoulos pleaded guilty on October 5 to lying to the FBI about his contact with the professor and the plea was sealed so that he could act as a "proactive cooperator".

"The meaning of that phrase is unclear," Litman wrote. "But one nerve-racking possible implication is that Mr Papadopoulos has recently worn a wire in conversations with other former campaign officials. This will surely have members of Mr Trump's inner circle agonising about the possibility and wondering who else might have been similarly cooperating with the investigation."

Former public defender and professor Seth Abramson explained on Twitter why the term "proactive cooperator" is probably bad news for others in Trump's orbit.

"Prosecutors often require a defendant to perform cooperative services for the government well in advance of his or her formal plea," he tweeted.

Former US attorney Preet Bharara, who Trump fired earlier this year, told Politico Magazine: "Hard to tell, but the George Papadopoulos guilty plea tells us (a) Mueller is moving fast (b) the Mueller team keeps secrets well (c) more charges should be expected and (d) this team takes obstruction and lying very, very seriously. That should be of concern to some people."

There's a powerful psychological game in play here and, providing you're the one asking rather than answering the questions, it can be immensely fun to play.

Manafort Told to Turn Himself In

And so it begins. Special counsel Robert Mueller has called on former Trump campaign manager, Paul Manafort, to surrender himself to authorities for arrest on money laundering and tax evasion charges.  The Bill of Indictment can be read in its entirety here.

Apparently Mueller went after Manafort and his co-conspirator, Gates, first as there was a limitations issue. The boys were very nearly off the hook.

There's nothing in the indictment that ties the alleged crimes to Trump or the Trump campaign. There's also no smoking gun that leads to Moscow or Putin.

There is plenty of information linking Manafort's activities to Cyprus, a hotbed for dirty Russian money and the former stomping grounds of Wilbur Ross, Trump's Commerce Secretary. Ross, a legendary vulture capitalist who earned the moniker, "The King of Bankruptcy," was also vice-chairman of the Bank of Cyprus, the island state's largest bank.

There have been various accounts suggesting that questionable money went to Cyprus from Russia and then onto Deutsche Bank before the funds were transmitted to the United States for laundering into real estate assets, especially the pricey stuff in Manhattan.

The indictment seems pretty damning and puts Manafort under a lot of pressure. He'll lose his assets and quite possibly face a really long stretch in the Greybar Hotel. It will also put a lot of people who were involved in the day to day activities of this web of companies and Manafort's transactions in a rather awkward and uncomfortable position. This may be their collective "Come to Jesus" moment where little people and mid-level types become very cooperative with investigators.

The path that appears to me goes from Manafort to Wilbur Ross to Trump with a lot of secondary sweeps along the way.  My hunch is that Trump needed money to keep his real estate 'empire' from cratering and bringing down him and his clan. When Trump's access to conventional financing dried up, another source turned up, one that worked best when no questions were asked.

That's the money-laundering part of Mueller's investigation, the bricks and mortar stuff. The glitz, if it can be proved, goes to Russian interference in the 2016 election and whether the Trump campaign colluded with Moscow. To get at that, Mueller needs to get Trump's associates to start rolling over on each other. I'm pretty sure that's behind today's arrests and others we may see in the near future.