Who Is Felix Sater?

Felix Sater is back. The Donald Trump business associate last month splashed down in the middle of a New York Times story about a freelanced Ukraine “peace proposal” hand-delivered to the White House by Mr. Trump’s longtime lawyer, Michael Cohen. Mr. Cohen dropped the proposal off in a sealed envelope at the office of then-National Security Adviser Michael Flynn. The deal outlined “a way for President Trump to lift sanctions against Russia” in exchange for a withdrawal of Kremlin-aligned forces from eastern Ukraine and a long-term lease of Crimea to Moscow, the Times reported. The government of Ukraine was not pleased. A spokesman called the deal a “gross violation of the [Ukraine] Constitution” by forces “covertly representing Russian interests.”

A Russian-American businessman with a colorful criminal past, Mr. Sater was the middleman for the Ukraine deal. He connected a possibly corrupt Ukrainian politician, the putative author of the proposal, to Mr. Cohen, the Trump confidant. Mr. Sater’s history with Mr. Trump fills in a few blanks about the president’s Russia links prior to the 2016 presidential campaign. The Ukraine case puts him in the here-and-now, at the center of the Trump universe, drawing a line from Mr. Trump’s past activities to his inner circle today.

Every president has sketchy characters in his past. Barack Obama and Tony Rezko, George W. Bush and James Bath, Bill Clinton and Dan Lasater, and David Edwards, and James McDougal, and…don’t get me started. But these figures are usually pushed to the margins of the administration—or right out the door. Mr. Trump has had several opportunities over the years to show Mr. Sater the door, but Mr. Sater keeps appearing in the middle of Mr. Trump’s business.

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Trump & The Anti-Semites

After days of mounting criticism, President Trump yesterday forcefully denounced the rise in anti-Semitic incidents across the country. Last week, not so much denouncing anti-Semitism, plenty of denouncing the press. History shows a connection between the two.

Following a tour of the National Museum of African American History & Culture, President Trump declared that the institution was “a meaningful reminder of why we have to fight bigotry, intolerance and hatred in all of its very ugly forms. The anti-Semitic threats targeting our Jewish community and community centers are horrible and are painful and a very sad reminder of the work that still must be done to root out hate and prejudice and evil.”

At last week’s press conference, the president took it personally when a reporter asked him about bomb threats called in to Jewish community centers. “So here’s the story, folks,” he said. “Number One, I am the least anti-Semitic person that you’ve ever seen in your entire life. Number Two, the least racist.”

When Jake Tur, the yarmulke-clad reporter from the Hasidic weekly Ami Magazine, began to protest that he had not, in fact, said the president was anti-Semitic, Mr. Trump silenced him. “Quiet, quiet, quiet,” he said, then he claimed the reporter “lied” about the question (he didn’t) and then added, “welcome to the world of the media.”

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The Flynn Edge Of The Wedge

So National Security Adviser Michael Flynn has become the first casualty of the Russian connection. Not counting Paul Manafort and Carter Page, thrown off the Trump Train during the presidential campaign. Not counting two Russian intelligence agents arrested for treason, who may or may not have been involved in hacking the U.S. election, who may or may not have been assisting the CIA. Not counting Christopher Steele, the former MI-6 agent and author of the notorious Russian dossier, currently in hiding.

So call Mike Flynn the first high-level casualty of the Russian connection. He’s likely the thin edge of the wedge. His Monday night resignation—ostensibly for misleading the vice president about conversations he had with a Russian official before Mr. Trump took office—has revved up the investigative axis in Washington. What did Mr. Trump and his aides know and when did they know it? Did Mike Flynn just take a bullet for the president?

Before the circus moves on from the spectacle of Flynn fallen in the arena, it’s worth noting that he served his country with honor and distinction for thirty-three years in the United States Army, rising to the rank of lieutenant general. He led dangerous intelligence missions in Afghanistan and Iraq. Later, apparently the same qualities that made him a successful battlefield intelligence leader got him in trouble as head of the Defense Intelligence Agency.

In the wake of the Flynn resignation, Democrats are calling for an “independent investigation” of the Russian connection. What they mean by that is not entirely clear, probably a specially charted commission, a special select committee or a special prosecutor. In any case, none of that is going to happen, at least not anytime soon.

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Putin’s Poisons

As America sets out on its long strange trip with President Trump, nothing seems stranger than his repeated defense of Russian strongman Vladimir Putin. “But he’s a killer,” Bill O’Reilly reminded the president in a weekend interview. “Putin’s a killer.”

“We’ve got a lot of killers,” the president responded. “What do you think—our country’s so innocent. You think our country’s so innocent?”

Meanwhile in Russia, real killers appear to have made another move to silence a critic of the Putin regime. Last week, the Russian dissident Vladimir Kara-Murza collapsed in Moscow and was placed in a medically induced coma. His wife said doctors had diagnosed “acute poisoning by an undetermined substance.”

It’s a diagnosis that has FSB—the Russian intelligence service—written all over it. And it’s not the first time someone tried to whack Mr. Kara-Murza. In May 2015, he suffered multiple organ failure, fell into a coma and was hospitalized for two months. Mr. Kara-Murza believed he was deliberately poisoned for his political activities. His Moscow doctors thought maybe he took the wrong anti-depressant. Oh.

Mr. Kara-Murza was a close associate of Boris Nemtsov, the Russian opposition leader gunned down on a bridge near the Kremlin in February, 2015. In an amazing coincidence, all the security cameras on the bridge had been turned off for maintenance. At the time of his murder, Mr. Nemtsov was battling Putin regime corruption and organizing resistance to the war in Ukraine.

Russian intelligence uses the full tool kit against its opponents, but it has a particularly long association with poisons.

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Rex & The Resource Curse

The Trump Presidency has opened with a bang. Death to ObamaCare, a new SCOTUS nominee, a Muslim ban, a Mexican wall, various conspiracies—the Russians and the dossier, the electoral tally, the inauguration crowd size—attacks on the media, on Boeing, Lockheed Martin, General Motors, Toyota, Hollywood actors, John Lewis, John Brennan, alternative facts, the global gag rule, the death of the Trans-Pacific Partnership, the rebirth of the Keystone and Dakota Access pipelines. The president is tweeting. The president has kept his campaign promises. The president has lost his mind. The town is in tumult. The opposition is aghast. Critics have assigned the president his own Robespierre. Grievances mount. “I haven’t slept in a month,” Kellyanne Conway tells Fox News Sunday. “If you are part of Team Trump, you walk around with these gaping, seeping wounds every single day, and that’s fine.”

Thirteen days into the new administration, the spectacle continues, delicious and appalling and mesmerizing. But in Congress real business is starting to get done. Follow the money. Cui bono? Who benefits? The answers to that timeless investigative question will tell us a lot about Mr. Trump’s Washington.

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The EB-5 Test

In 2008, the director of the Zhoukou Municipal Grain Reserve in China’s agricultural Henan Province began moving money overseas. Qiao Jianjun sent $4 million to U.S. banks. $2 million went to Canada. Another $6 million went elsewhere: Singapore, Switzerland, St. Kitts. Mr. Qiao’s wife obtained a U.S. visa and moved to Seattle and bought a four-bedroom home. In 2011, Mr. Qiao skipped town, flying out of Zhoukou City and joining his wife in the United States. The law caught up with Mrs. Qiao in 2015, arresting her for fraud and money laundering. She’ll do five years. Mr. Qiao is in the wind.

The story of the Qiaos should be of some interest to the new Trump Administration because they arrived in the United States thanks to the controversial EB-5 visa program, which is up for renewal in April. The Obama Administration proposed changes to the program on its way out the door. How the Trump Administration handles the proposed changes will provide an early test of its approach to real-world corruption issues.

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The Curtain Goes Up

UnknownAs the curtain goes up on the Trump Era, here’s what I’m looking at as some of the major investigative stories of 2017:

Age of the Oligarchs? Is Mr. Trump a passing historical hiccup or does he signal something bigger? Around the globe, influential oligarchies appear to be entering an assertive new era. Vladimir Putin’s Russia is Exhibit #1. In Saudi Arabia, the longstanding oligarchy remains a forceful player in world oil markets and increasingly militant in its own neighborhood. In China, elements of the leadership are engaged in a pitched battle against oligarchic corruption while making bold military moves in the region. Iran, Turkey and North Korea are all on the oligarchic path. Meanwhile, international structures—NATO, the EU, global trade agreements, the Clinton Global Initiative (kidding)—are under threat. In the U.S., the Trump White House has arrived on the scene with oligarchic atmospherics: the swaggering leader with little patience for traditional politics, close relatives installed as key advisers, a cabinet of ultra-rich financiers and generals, etc. A terrific recent New York Times deep-dive, “Jared Kushner, a Trump In-Law and Adviser, Chases a Chinese Deal,” demonstrated the mutual interests of the Trump family and Chinese oligarchs. Comrade, all this is no accident, as the Marxists used to say. Or is it? Is Mr. Trump ushering in a new oligarchic era? Merely bringing some conservative creative destruction to Washington? Or mostly just huffing and puffing? We’ll know a lot more in a year.

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The Gathering Storm

micahs-mastheadIt’s all over but the shouting and the presidency of Donald J. Trump is upon us. In nine days, Mr. Trump will be sworn in as the 45th president of the United States. Billionaire businessman, celebrity, tweetmaster, Mr. Trump has changed American politics even before taking office, rewriting the political playbook and sending shock waves through Washington.

Fasten seat belts, it’s looking like a rough ride. On the Russian front, in particular, several recent developments point to a gathering storm for the Trump presidency.

The blockbuster was last week’s “Assessing Russian Activities and Intentions in the Recent U.S. Elections,” from the Office of the Director of National Intelligence. It is short and you should read it here, but in case you’ve been living in a cave, the main conclusion was that Russian President Vladimir Putin executed a sweeping “influence campaign” aimed at the 2016 election, which morphed from an effort to “denigrate” Hillary Clinton into an aspiration to “help” Mr. Trump. Russian military intelligence was a key player in the effort, which “reflected years of investment” by the Kremlin. The Russians stole emails and other data from “both major U.S. political parties” and passed it on to WikiLeaks and other sources.

Mr. Trump’s team has been swinging hard against any notion that the Russians tilted the election. (The IC report did not go there, stating that it “did not make an assessment of the impact that Russian activities had on the outcome of the 2016 election.”) After a classified briefing on the Russian activities, Mr. Trump released a statement saying “there was absolutely no effect on the outcome of the election, including the fact that there was no tampering whatsoever with voting machines.”

From London, WikiLeaks founder Julian Assange echoed the Trump pushback. He denied the leaked documents came from “a state party” (Russia) and called the IC report “a political attack” against Mr. Trump and an effort to “delegitimize the election.”

Mr. Assange has a starring role in an important new book just out from legendary investigative writer Edward Jay Epstein, “How America Lost Its Secrets: Edward Snowden, The Man and the Theft.” A sweeping chronicle of espionage and betrayal in the Putin era, Mr. Epstein’s book should be required reading at the Trump White House.

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Rex & The Russian Swamp

micahs-mastheadAmid controversy over the extent of Kremlin penetration into the American electoral system (detailed last week in Investigative Bulletin), Donald Trump has doubled down on the Russian connection with his nomination of ExxonMobil CEO Rex Tillerson to become the next secretary of state.

Mr. Trump has been signaling a new Russia tilt for months and Mr. Tillerson seems an excellent candidate to carry it out. Whether this is sound policy or sheer folly remains to be seen, but from an anti-corruption perspective—taking Mr. Trump at his pledge to “drain the swamp”—the Tillerson nomination is strange indeed.

Mr. Tillerson is up to his eyeballs in Russian oil deals with Vladimir Putin, whose kleptocratic regime makes the Washington swamp look like the pool at Mar-a-Lago. Last week, U.S. intelligence leaked a new estimate of Mr. Putin’s personal wealth: $85 billion.

His Kremlin salary: $144,444.

You lie down with dogs, you get up with fleas. Mr. Tillerson’s role in the Rosneft oil deal is a case in point. Rosneft is a Russian energy giant closely allied with Mr. Putin. Mr. Tillerson negotiated a deal with Rosneft giving ExxonMobil access to vast Russian oil reserves in the Arctic and Black Sea. ExxonMobil pledged millions to provide the technology and expertise for exploration and drilling. In return, it received a one-third stake in the venture. Successful exploitation of the oil fields could bring more than $100 billion into ExxonMobil coffers.

Rosneft was formerly known as the Yukos Oil Company, Russia’s largest energy enterprise. In 2003, Mr. Putin decided he wanted it.

Yukos’s founder, the oligarch Mikhail Khodorkovsky, was becoming a threat to Mr. Putin. He jailed Mr. Khodorkovsky on bogus fraud charges, seized Yukos assets and bankrupted the company. Mr. Khodorkovsky served ten years behind bars. Other Yukos officials were jailed or fled the country. American and Russian investors were robbed. The Permanent Court of Arbitration at The Hague awarded investors $50 billion in damages, but the decision was later overturned.

Some might say Mr. Khodorkovsky got off easy. Here’s a list of Putin critics who ended up dead.

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The Russian Connection

A bombshell Washington Post report Friday cast new light on the 2016 presidential campaign. According to the Post, the CIA in a secret assessment has concluded that “Russia intervened in the 2016 election to help Donald Trump win the presidency.”

Intelligence agencies identified “individuals with connections to the Russian government” who gave thousands of hacked Democratic National Committee emails to Wikileaks as part of “a wider Russian operation to boost Trump and hurt Clinton’s chances,” the paper reported. The next day, the New York Times added another piece to the puzzle, reporting that the Russians had also hacked into the Republican National Committee’s computer system, “but did not release whatever information they gleaned.” In other words, Moscow released only information that would help, not hurt, Mr. Trump.

The RNC denied its system was hacked and the president-elect’s transition office issued a blistering Trumpian attack on the CIA findings: “These are the same people that said Saddam Hussein had weapons of mass destruction. The election ended a long time ago in one of the biggest electoral victories in American history. It’s now time to move on and ‘Make America Great Again.’” Later, Mr. Trump told Fox News that the CIA assessment was “ridiculous” and an “excuse” by Democrats for losing to him.

And while my friends at the Wall Street Journal editorial page are right that the “new information in these latest stories is less about new intelligence than it is a judgment about Russian motives,” this latest shock wave rolling out of Trump Tower has a different feel to it. The case of the Russian connection could spell real trouble for Mr. Trump. That’s largely because Congress is not going to roll over and play dead. Several influential Republicans are pushing for an investigation. There will be hearings. There will be new details. There will be leaks. The intelligence community now has its back against the wall, thanks to Mr. Trump’s attacks.

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