Russia Monitor: Bannon Bluster, Mafia Money & Coming Mid-Term Stink Bombs


By Dan Peak
The Commoner Call (1/18/18)

Dear Fellow Readers,

Congratulations to Democrat Patty Schachtner who won a special election to fill the Wisconsin State Senate Seat District 10 on Tuesday. Schachtner won her race 55-44 in a district won by Trump by 17 points.

Special election results bode well for Democrats. Recent Trump-Russia corruption news further tips events against Republicans and it is now expected Trump-Russia corruption will be headline news in the lead-up to 2018 mid-term elections. We’ll explain this once we cover the news.

Former Trump Chief Strategist Steve Bannon Is Subpoenaed … Twice

Tuesday, January 16, 2017 was a wild day – a Steve Bannon chaos kind of day.

Steve Bannon is Trump’s former chief strategist. He was on Capitol Hill to appear before the House Intelligence Committee. The meeting did not go well and the House Intelligence Committee subpoenaed Bannon on the spot.

While with the committee there was news that Bannon was subpoenaed by Special Counsel Robert Muellerso not one but two subpoenas on the same day!  Bannon Is Subpoenaed in Mueller’s Russia Investigation.

The subpoena was actually from a week prior but was unknown until this news report.

“The move marked the first time Mr. Mueller is known to have used a grand jury subpoena to seek information from a member of Trump’s inner circle. The special counsel’s office has used subpoenas before to seek information on Trump’s associates and their possible ties to Russia or other foreign governments.”

The New York Times  updated the article to acknowledge the second subpoena but at the time of the initial article there was only this first subpoena.

A short time later, Politico and other news media broke this news: Bannon Refused To Answer House Committee’s Questions About Time In White House.

Politico updated the article and it now appears as (through the same link): Lawmakers Vow To Force Answers From Bannon In Russia Probe After He Defies Subpoena.

Bannon said he would not discuss anything that happened during his time with the Trump transition or Trump White House. Bannon cited instructions from the White House. The committee recessed and informed the media. The committee issued a subpoena demanding Bannon’s cooperation, but as explained below, Bannon “doubled down” and continued to refuse to answer questions after confirming with the White House:

“Tensions flared early in the proceedings after Bannon informed the committee that he was refusing to answer any questions about his time in the White House or on the post-election transition, infuriating Democrats and Republicans on the panel, who subpoenaed him on the spot, according to a source familiar with the interview.

“According to Rep. Adam Schiff (D-Calif.), after the subpoena, Bannon’s attorney contacted the White House, which he said “doubled down” on its demand that he refuse to answer the committee’s questions.”

Amazingly, committee leadership including Rep. Devin Nunes (R-CA; chair), Rep. Adam Schiff (D-CA; co-chair) and Rep. Mike Conaway (R-TX; chair during Nunes’s recusal) were all in agreement for a change.

“”This was effectively a gag order by the White House,” Schiff said after the interview concluded. He said he expected Bannon to return to the committee soon, without any restrictions demanded by the White House.”

Bannon’s attorney had informed Republican members of the committee in advance of the interview that he would not be answering questions about anything other than his two-month tenure with the Trump campaign.

“A White House official defended its position, saying the lawmakers overlooked a standard practice of coordinating with the White House to get information.”

Here is a good statement of what to expect next between Bannon and the House Intelligence Committee:

“But Bannon also refused to discuss conversations he may have had with Trump even after he left the White House in August, Schiff said. And a source familiar with the interview added that lawmakers were perplexed at Bannon’s suggestion that the transition period — when Trump wasn’t yet in office — could be subject to executive privilege claims.

“The decision by Republicans and Democrats to subpoena Bannon represented unusual bipartisan pushback for a committee that has recently been mired in partisan discord. And Bannons appearance came just weeks after a falling-out with Trump over comments Bannon made in an explosive new book.”

Rep. Conaway said, “we’re going to get answers from Mr. Bannon”. Credit where due, Bannon may have actually managed to get the committee to carry forward in partisanship.

In keeping with the unpredictability of a legal ‘day in the life’ of Bannon, the Associated Press broke this news: Bannon’s Attorneys Related Questions To White House In Real Time.

“During the day-long interview Tuesday, Bannon’s attorney Bill Burck was asking the White House counsel’s office by phone whether his client could answer the questions. He was told by that office not to discuss his work on the transition or in the White House. 

“It’s unclear who Burck communicated with or whether it was top White House lawyer Don McGahn. Burk is also representing McGahn in special counsel Robert Mueller’s investigation into contacts between the Trump campaign and Russia.

“Committee member Rep. Trey Gowdy, R-South Carolina, said on Fox News Wednesday the White House shouldn’t exert executive privilege, and said Bannon began to answer one question before halting. Bannon began to address the comment he reportedly made that was published in Michale Wolff’s “Fire and Fury: Inside Trump’s White House,” claiming Donald Trump Jr.’s June 2016 meeting with a Russian lawyer was “treasonous.”

“”He answered it initially and then apparently his lawyer didn’t like the fact that he answered it, and then he clammed up,” Gowdy said.”


Tuesday morning Steve Bannon shows up for his meeting with the House Intelligence Committee. This meeting lasted ten hours. Over the next twenty-four hours we learn Bannon has been served with two subpoenas but as the dust settles there is apparently some agreement that there is a path forward to hear Bannon’s testimony.

While next steps for Bannon with the House Intelligence Committee are being decided, there is additional news about what to expect between Bannon and Special Counsel Robert Mueller: Steve Bannon Will Tell All to Robert Mueller, Source Says.

“”Trump’s one-time chief strategist and current frenemy may have been tight-lipped with Congress. He won’t be that way with the special counsel.” … Former White House chief strategist Steve Bannon broke some bad news to House investigators Tuesday, announcing that the White House had invoked executive privilege to keep him from answering many of their questions. But executive privilege—the president’s right to keep certain information from the public so he can have frank conversations with aides—will not keep Steve Bannon from sharing information with special counsel Robert Mueller’s team, according to a person familiar with the situation.”

Apparently the distinction being made by Bannon and the White House is based on Bannon appearing voluntarily. The House committee invited Bannon to appear, Mueller subpoenaed Bannon. If so, will this change now that the House committee has also subpoenaed Bannon? Will other White House staff also refuse to answer questions?

““This was characterized as a result of his being there voluntary; he’s there of his own volition and could refuse to answer questions based on what the White House instructed him to do,” Schiff added. “We then were able to be promptly provide him with a subpoena and they went back to the White House and got the same instruction back again, basically: We don’t care whether it’s under compulsory process or voluntary basis, we’re instructing you to effectively put in place a gag rule.”

“This situation has committee members concerned that other top White House officials will also refuse to answer their questions. Hope Hicks, the president’s communications director, is scheduled to testify before the committee this week. Given the White House’s current posture on executive privilege, it’s likely her responses to questions will be just as lacking as Bannon’s.”

We will see. But do also note, on Tuesday evening Axios reported on a critical point of exposure for Bannon as he goes forward: Inside The Room: What Steve Bannon Told Congress Yesterday.

“Steve Bannon made one conspicuous slip up in his closed-door hearing on Tuesday with the House Intelligence Committee, according to four sources with direct knowledge of the confidential proceedings. Bannon admitted that he’d had conversations with Reince Priebus, Sean Spicer and legal spokesman Mark Corallo about Don Junior’s infamous meeting with the Russians in Trump Tower in June 2016.”

It is a big disclosure – knowledge of the drafting of the misleading statement about the purpose of the Donnie Jr. (Trump’s son, Trump Corp Exec Officer) June 2016 meeting in Trump Tower with Russians while tying in Priebus, Spicer and Carallo (Trump’s former Chief of Staff, Trump’s former White House spokesperson, Trump’s former legal team spokesperson).


Should anyone be worried if Bannon fully cooperates with Mueller? Based on Michael Wolff’s book Fire and Fury about the inner workings of Trumpland, Trump’s son-in-law and senior adviser Jared Kushner should be worried. Very worried: Bannon Predicts Kushner Investigators Will ‘get down deep in his s–t’ On Russia, Kazakh Financing.

Wolff’s book offered a colorful version of what investigators of Kushner business dealings might find:

““He’s going crazy because they’re going to get down deep in his s–t about how he’s financed everything … The rabbis with the diamonds and all the s–t coming out of Israel … and all these guys coming out of Eastern Europe … all these Russian guys … and guys in Kazakhstan,” Bannon said.”

This article serves a dual purpose. While it highlights Bannon’s view of how Kushner might fare, it also introduces the issue of Kazakhstan money.

Kushner and Trump are both exposed, but let’s focus on Trump.


Trump: Money Laundering

It has been the position of the Russia Monitor that aside from any and all problems faced by Trump, money laundering has been a constant in his business for decades. Money laundering with Russians and businesses from former USSR countries, including Kazakhstan, have been a Trump business mainstay since the 2008 financial crisis or even before.

The thread here is money laundering – Russia and former USSR countries – for a variety of Trump projects like Bayrock and Trump Soho. Let’s focus on one Trump project – Trump Soho- and show how money laundering funded the project. Let’s begin with news from this week: Kazakhstan Is A ‘kleptocracy‘ Ruled By An Autocrat. It’s Also An Increasingly Important Strategic Ally.

Trump met with President Nursultan Nazarbayev at the White House on Tuesday. Nazarbayev is not your typical head of state by western standards:

“Nazarbayev is known as an autocrat, who uses sham elections to extend his nearly three decades in power. In 2015, for instance, he was “re-elected” with nearly 98 percent of the vote. Nazarbayev is also fabulously wealthy in a country where per capita GDP is just over $8,000 a year. In 2013, he reportedly paid rapper Kanye West $3 million to perform at his grandson’s wedding.”

Nazarbayev may be your typical autocrat – more specifically:

“And then there’s the corruption: By some estimates, around a quarter of Kazakhstan’s GDP flowed out of the country during the first decade after the fall of the Soviet Union. Top Kazakh businessmen have been accused of bribery and money laundering around the world.”

Typical autocrat, typical corruption and money laundering – even more specifically:

“For Trump, whose sprawling real estate company has come under scrutiny for potential money laundering, Kazakh corruption issues hit very close to home. According to Bloomberg News, millions of dollars from a Kazakh mineral company flowed into a development company that partnered with Trump to build the Trump SoHo hotel and condominiums in New York.”

So just consider the optics here: Former soviet bloc country, run by an autocrat, known for corruption and money laundering and the money benefits Trump, specifically the Trump Soho project.

This connection was detailed by the Wall Street Journal, but it is also behind a paywall.

Bloomberg posed an important question: Was Trump SoHo Used To Hide Part Of A Kazakh Bank’s Missing Billions?

In a nutshell, the chairman of BTA bank, Mukhtar Ablyazov, is accused on embezzling $4 billion, some of which ended up in Trump properties.

“Ablyazov enlisted his son-in-law, Iliyas Khrapunov, to help him conceal his assets, according to sworn statements from former associates of the fugitive financier. The previously reported purchases in Trump SoHo, developed by Bayrock Group LLC in partnership with the Trump Organization, were made by members of Khrapunov’s family, the bank has alleged in court documents. Khrapunov also worked on a separate deal with Felix Sater, a former Bayrock executive and onetime adviser to Trump.”

We’ve linked to articles about Bayrock and Felix Sater before and it’s easy to use the links in the above article to dig into more detail. Here’s an excellent, concise review: Donald Trump’s Many, Many, Many, Many Ties to Russia.

Both Mueller and Trump anticipate further investigation into Trump’s many complex business relationships, including with Felix Sater. Should Trump be questioned by Mueller, Politico offered this line of preparation for Trump: This Is How Trump’s Lawyers Are Probably Prepping Him For The Mueller Showdown.

“… He needs to be able to explain more clearly the motivation for his decision to fire Comey. And he needs to be able to address succinctly his past associations with individuals with questionable backgrounds and alleged ties to the Russian government, such as Russian-born real estate developer Felix Sater.”

Thomas Frank writing for Buzzfeed did an excellent review of Trump properties and the exposure they represent to money laundering: Secret Money: How Trump Made Millions Selling Condos To Unknown Buyers.

Frank notes that in summary:

“Trump condo sales that match Treasury’s characteristics of possible money laundering totaled $1.5 billion, BuzzFeed News calculated. They accounted for 21% of the 6,400 Trump condos sold in the US.”

But Trump Soho, the property developed in conjunction with Felix Sater and Bayrock, and sales with possible money laundering represent 77% of the sales.

Glenn Simpson, co-founder of Fusion GPS and responsible for hiring Christopher Steele, author of the Steele dossier, noted in his Senate Judiciary Committee hearing the relationship between Kazakhstan, money laundering, BTA Bank, Felix Sater and Trump. This starts on page 296 of the testimony transcript.

Simpson says his concerns included not only Sater, Trump and Trump Soho, but adds that also linked to Trump Soho is Tevfik Arif and ties to organized crime.

Rachel Maddow on January 15 did a segment on Kazakhstan money laundering, Bayrock, Felix Sater and Trump Soho. She references a New YorkTimes article suggesting Ablyazov’s embezzlement to be more like $8 to $12 billion: Sketchy Kazakh Money Finds Its Way Into Trump Dealings.

A key point raised Rachel Maddow – the President of Kazakhstan, Nursultan Nazarbayev, appointed his son-in-law as head of BTA Bank. If there is an investigation of money laundering and embezzlement, how better to control the outcome? Trump must be envious.

And Trump should be very, very worried.


We’ll end with one final note as promised at the beginning of the column. Looking ahead, Politico predicts Trump-Russia corruption could be a backdrop to mid-term elections. This cannot be good for Trump or the GOP. The trial of indicted former campaign manager Paul Manafort is now scheduled for September and would result in a consistent parade of negative Trump press: Bad News For GOP: Mueller Probe Could Collide With Midterms.

The Politico article teases: Campaign stink bombs loom as judge signals possible September start for Manafort-Gates trial.

“The timing of the Manafort-Gates trial will dictate major coverage going into early voting,” said veteran Republican strategist John Weaver. “And this is without knowing for certain how many more indictments and how much closer this Siberian political cancer gets near the Oval Office.”

“It’s mood music that doesn’t help,” agreed a senior Republican campaign strategist working on several midterm races. “Every day the party is talking about this investigation is a day they’re not talking about the economy and the tax cuts they provided and jobs and things that are successfully happening.”


Final, final note. What is Trump hiding? We can only imagine what Mueller knows.

Through the course of the Trump-Russia corruption investigation we now have at least three persons who are close to Trump who have asserted fake privileges to avoid answering questions. The three are Steve Bannon, Donald Trump Jr., and Jeffrey Beauregard Sessions III. In the three instances each has asserted some right while refusing to answer questions. In each instance there has been no legal basis but in each case there are many, many unanswered questions.

(Commoner Call cartoon by Mark L. Taylor, 2017. Open source and free to use with link to )