Today, Explained - Inauguration investigation

Episode Date: February 7, 2019

President Trump’s inaugural committee this week received a sweeping subpoena. Federal prosecutors in New York want to know where a record-breaking amount of money came from and where exactly it went. Learn more about your ad choices. Visit podcastchoices.com/adchoices

There's something about Quipy there must be. That's why over 1 million people have purchased the Quip electric toothbrush. You can find it at getquip.com slash explained. That's G-E-T-Q-U-I-P dot com slash explained where the Quip starts at $25 and your first set of refills is free. Please raise your right hand and repeat after me. I, Donald John Trump, do solemnly swear. I, Donald John Trump, do solemnly swear. That I will faithfully execute. That I will faithfully execute. The office of President of the United States.

The office of President of the United States. On January 20th, 2017, Donald Trump was inaugurated the 45th president of the United States. The affair was a bit of a dud. The vibe was kind of underwhelming. The crowd size was rather unimpressive. Not too many people turned out. And Trump really wanted a bunch of celebrities to do events on Inauguration Weekend, and very few of them agreed to do so because he was viewed as so controversial.

And so, you know, overall, it was kind of a disappointing event. Trump's speech was rather dark. And the crime and the gangs and the drugs that have stolen too many lives and robbed our country of so much unrealized potential. This American carnage stops right here and stops right now. Only later did we learn that the inauguration actually was stunningly impressive. In one sense, it raised an incredible amount of money. The previous record for a presidential inauguration's fundraising was $53 million, and that was set by Barack Obama's first inauguration in 2009. Trump basically doubled that record. He raised over $106 million for his inauguration,

an astounding, mind-boggling sum for one event. Andrew Prokop, you cover investigations into the president for Vox, and the president's inaugural committee got a big fat subpoena this week. Oh, yeah. Before we get to exactly what's in the subpoena this week. Oh, yeah. Before we get to exactly what's in the subpoena, why do presidents even need to raise money for their own inauguration? Doesn't the government pay for everything that happens down on the mall? Yeah, the swearing in event itself and all of the security and logistics around that are paid for by the federal government. But,

you know, that's just one part of what's become traditionally a big multi-day long festival of parties and events during inauguration weekend. So, you know, there's a concert on the National Mall beforehand. There's dinners and events for elite supporters. There's the balls on inauguration night. And, you know, the incoming president has to find the money for that himself. But it was really the amount of money that he raised that really raised some eyebrows. Who specifically was giving him that money? So the donor list to the inaugural committee is public. And, you know, a lot of the money came

from finance industry big shots, frequent conservative givers like Robert Mercer, Paul Singer. Then a lot of money came in from corporate America too, companies like Bank of America, Boeing, Dow Chemical, Pfizer, Exxon, a million dollars or $500,000 each from companies like this. There's an even more mysterious company called BH Group LLC. It seems to be tied to the conservative legal movement in some way, but again, gave a million dollars and have no idea who actually was behind that money. And I think the contributions that raised the most eyebrows eventually among investigators were donations from people or companies with foreign connections.

People basically soon began to wonder whether the money was in fact coming from foreign sources, which we should say would be illegal. And do we know where all of this money was going? There's a great report by Ilya Merits of ProPublica and WNYC earlier this year. He talked to people who had worked on previous inaugurations, one guy who worked on George W. Bush's inauguration named Greg Jenkins, and he said he was baffled. He said they had a third of the staff, a quarter of the events, as Bush did, and they raised at least twice as much as we did. So there's the obvious question.

Where did it go? I don't know. The inaugural committee was under no real obligation to disclose very much about where it went. One thing we do know about the inaugural committee's spending is that about a quarter of it in total, $25.8 million went to a firm called WIS Media Partners. It's an event production firm started by a now former advisor to Melania Trump. If you look at the forms that the inaugural committee filed, there was probably about over $30 million that we just knew nothing about where that money went. When exactly and how did all this start to catch the attention of investigators? By one account, the FBI started wondering about the inauguration while it was happening.

The Washington Post reported that counterintelligence officials at the FBI were concerned by an unusual presence of politically connected Russians in D.C. during the event, including some of the exact people who had already surfaced in the investigation of the Trump campaign's ties to Russia. But as we learn more about the inauguration's fundraising and more accounts got out of its spending, these questions have just kept piling up. What kind of questions are we talking about? So there are several different questions about specific donors, especially donors with connections to foreign nationals or foreign companies. That includes even if the foreign national gives the money to somebody else and then the other person who is American then gives it to the inaugural

committee. That's called a straw donor. And so investigators have really drilled down on this topic of straw donors for foreign nationals. And this is something that definitely caught special counsel Robert Mueller's eyes as he has tried to probe Trump world's ties to Russia generally. And what does Mueller do? It was reported in early April of 2018 by CNN that Mueller actually stopped and questioned two Russian oligarchs who were traveling to the U.S. to

ask about whether they had illegally funneled cash donations into the inauguration. Now, we know that investigators have recently targeted at least three oligarchs. And sources tell us that the FBI stopped one of them as he landed in his private jet at an airport in New York. There was another report by ABC that this went broader than just Russia, that Mueller was asking about donors with connections to Russia, Saudi Arabia, the United Arab Emirates, and Qatar. And then there was another report by ABC that stated that Mueller's investigators wanted to know why several billionaires with deep ties to Russia got access to exclusive invitation-only receptions during the inauguration. But looking not just at who attended the inauguration itself, but many events surrounding the inauguration. And specifically, sources tell us that they are looking at Russians.

This isn't just hypothetical. The Mueller investigation has already turned up one example. This Republican lobbyist Sam Patton, he was a longtime associate of Paul Manafort. And when the Trump inauguration took place, Patton had a client who was a Ukrainian oligarch who wanted tickets to the inauguration. So the oligarch sent $50,000 to Patton's company and then Patton gave that money to a U.S. citizen who bought the four tickets.

And so Patton admitted that in court as part of a plea deal. Patton agreed to cooperate with federal prosecutors in DC as well as special counsel Robert Mueller as part of his plea. And he also admits he made an illegal donation to President Trump's inauguration committee, acting as a straw donor for a Ukrainian businessman banned from making the contribution himself. To be clear here, it isn't illegal to raise a whole bunch of money for your inauguration as the incoming president. But what we have here is a record-setting amount of money raised, huge question marks as to where the money went exactly, and concrete evidence that some of this money

was being funneled in through these foreign nationals in these straw donations. In at least one case, yes, and several other potential cases that have been looked into. And we also know now that it's not just Mueller who's been looking into this. There is a separate investigation from the U.S. Attorney's Office in the Southern District of New York that seems to be heating up. And that's the big news this week. Live from New York, it's a subpoena for the Trump Inaugural Committee after the break on Today Explained.

Hi, this is Tim in Brooklyn. Hey, Tim in Brooklyn. Sean from Today Explained. Just wanted to check in and see if you got a quip yet. It's here. It's in my house. Tim from Brooklyn, I'm going to make a confession. Over one million people have the quip because, you know, it's been recommended by all sorts of dentistsists because it's a sensitive option, because it has this timer that pulses and all this stuff.

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None of these podcast hosts will respond to me, but you did. Tim from Brooklyn, have you used the Quip that one can purchase at getquip.com slash explain for $25 where your first set of refills is free? Have you used it yet? I have not used it yet. Tim from Brooklyn, when did you discover this Quip? Well, last night. I went out and saw the mail in my living room and it was there. Okay. I'll give you a pass on last night. What did you do this morning? I was working from home again this morning, so I didn't get up to go to work right away.

So I haven't actually brushed my teeth yet for the day. This is why people don't do nice things for each other anymore. Getquip.com slash explained. I give up. So, Andrew, this week, Trump's inaugural committee got a major subpoena, not from Robert Mueller, but from the U.S. Attorney's Office of the Southern District of New York. Federal prosecutors in New York issue subpoena seeking documents from Donald Trump's inaugural committee. What is in that subpoena? The subpoena specifically names several different offenses, criminal offenses, wire fraud, money laundering, disclosure violations, and violations of laws prohibiting contributions by foreign nations and contributions in the name of another

person, also known as straw donors. It's a remarkably broad demand for the inaugural committee to turn over a whole set of documents, basically anything involving money prosecutors want to see. Specifically listed in the subpoena are all documents related to the committee's donors and vendors, all records related to any benefits provided to donors. It's been reported that the inaugural committee had donors pay their vendors directly rather than giving money to the committee, or at least talked about doing so, and that would violate disclosure laws. Why exactly is New York filing this subpoena? So though Mueller has been looking into certain aspects of the inauguration's money for a while,

this appears to be a different investigation that grew out of the Southern District of New York's probe. That's the U.S. Attorney's Office based in Manhattan. They have been investigating Michael Cohen for a while. So back in April, the FBI has raided the office of Donald Trump's longtime lawyer, Michael Cohen. Reportedly, that is how this particular probe of the inauguration got started. They found certain documents. They found a recording Cohen had that led them to start investigating in more detail the inauguration's money. So all of this that's ongoing with Cohen and the inauguration from the Southern District of New York is completely separate from the Mueller investigation. This began as a separate investigation.

It's not clear what happened to Mueller's investigation, whether he's still looking into it or whether he may have handed it off elsewhere. And to complicate things even more, there's another U.S. attorney's office in Brooklyn that's reportedly looking into the straw donor matter. Wow. So basically there's a lot of investigations of this going on right now. Is all of this happening because of Michael Cohen and what was found in his office? It seems like it's broader than that.

What's interesting is that Cohen's role in this investigation isn't clear. You'll remember that he pleaded guilty to financial crimes and campaign finance crimes back in August and struck a plea deal with Mueller admitting lying to Congress about the Trump Tower Moscow deal back in November. However, Cohen specifically declined to commit to a cooperation requirement. He agreed to provide some information to investigators voluntarily, but he didn't want to be compelled

to commit to give the government any information he had on any potential crimes. And the Southern District of New York was very annoyed at that. They chided him. They said that he specifically did not want to do this, so he shouldn't get credit for being a full cooperator. I think perhaps more important than Cohen in this investigation is Rick Gates.

He is another former Trump campaign aide, longtime right hand man for Paul Manafort. And he was indicted alongside Manafort in October 2017. And he flipped and cut a plea deal with Mueller in February 2018. Rick Gates, under pressure from Robert Mueller, the special counsel, has pled guilty to two counts, one for conspiracy against the United States that refers to tax evasion and money laundering related crimes, and secondly, to making false statements to the special counsel. That occurred just three weeks ago. And Gates was heavily involved in the inauguration planning. He was probably the guy right under Tom Barrack, the chairman, who was handling fundraising, handling planning, and all that. And it has been reported that Gates has been providing information on investigations into the inauguration too.

So Gates could be pretty important here. Where does all of this lead? I mean does it lead right up to the president or is he insulated from this because he had this entire committee dealing with all the money that was coming in? That's always the question. You know, how many of these decisions went to Trump? How many did he know about and how well documented is all this? And we don't really know. A lot of it might depend on what Rick Gates says and what other witnesses say to investigators. But I think the bigger takeaway is that, you know, this is just another investigation or several more investigations that Trump now has to deal

with and worry about in addition to this huge swath of investigations he was already dealing with. The Mueller investigation is already huge enough in itself, touching on all sorts of different topics. Then there was the investigation into hush money payments to women who alleged affairs with Trump. There's investigations into his foundation, his business. There's all sorts of congressional subpoenas that are going to start flying from the new House Democrats. They're trying to get a hold of his tax returns. And now there's the inauguration, too. So it seems like, you know, everything that Trump is involved in is under investigation right now.

And, you know, maybe all those will turn up nothing that implicates him personally or maybe not. It does feel like this ultimate irony that the very first thing he basically was involved with as president is part of this sprawling investigation with multiple offices and agencies now. Yeah, I think that the Trump inauguration is really so much like the quintessential Trump organization project. Like there's eye-popping sums of money. There's opulence. But then there's eye-popping sums of money, there's opulence, but then there's also questions of financial mismanagement, corruption, shady foreign influence. And now, investigations galore.

Andrew Prokop is a senior correspondent at Vox. I'm Sean Ramos for him. This is Today Explained. Thanks again to Quip Electric Toothbrushes for supporting the show today. No thanks to Tim from Brooklyn who hasn't even used the Quip I got him yet. You can find your own Quip Electric Toothbrush at getquip.com slash explained. G-E-T-Q-U-I-P dot com slash explained. The Quip starts got him yet. You can find your own Quip Elective Toothbrush at getquip.com slash explained G-E-T-Q-U-I-P dot com slash explained.

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