Saturday, February 17, 2018

Mueller's Russia Indictment - a condensed summary



Case 1:18-cr-00032-DLF Document 1 Filed 02/16/18 Page 1 of 37

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

[The following is a six page summary of highlights of the 37 page Mueller Indictment of  thirteen Russian nations and the organizations they worked for to interfere with our public elections. It was prepared by me, Brian T. Lynch, MSW, to condense the facts related to Russia's criminal interference in our elections. The full document is here: https://www.justice.gov/file/1035477/download ]



Defendant INTERNET RESEARCH AGENCY LLC (“ORGANIZATION”) is a Russian organization engaged in operations to interfere with elections and political processes.

3. Beginning as early as 2014, Defendant ORGANIZATION began operations to interfere with the U.S. political system, including the 2016 U.S. presidential election.

4. Defendants, posing as U.S. persons and creating false U.S. personas, operated social media pages and groups designed to attract U.S. audiences... Defendants also used the stolen identities of real U.S. persons to post on ORGANIZATION-controlled social media accounts.

6. Defendant ORGANIZATION had a strategic goal to sow discord in the U.S. political system, including the 2016 U.S. presidential election. Defendants posted derogatory information about a number of candidates, and by early to mid-2016, Defendants’ operations included supporting the presidential campaign of then-candidate Donald J. Trump (“Trump Campaign”) and disparaging Hillary Clinton... Defendants also staged political rallies inside the United States, and while posing as U.S. grassroots entities and U.S. persons, and without revealing their Russian identities and ORGANIZATION affiliation, solicited and compensated real U.S. persons to promote or disparage candidates. Some Defendants, posing as U.S. persons and without revealing their Russian association, communicated with unwitting individuals associated with the Trump Campaign and with other political activists to seek to coordinate political activities.

The ORGANIZATION employed hundreds of individuals for its online operations, ranging from creators of fictitious personas to technical and administrative support.

The ORGANIZATION’s annual budget totaled the equivalent of millions of U.S. dollars.

The ORGANIZATION was headed by a management group and organized into departments, including: a graphics department; a data analysis department; a search-engine optimization (“SEO”) department; an information-technology (“IT”) department to maintain the digital infrastructure used in the ORGANIZATION’s operations; and a finance department to budget and allocate funding.

The ORGANIZATION sought, in part, to conduct what it called “information warfare against the United States of America” through fictitious U.S. personas on social media platforms and other Internet-based media. (emphasis mine)

By in or around April 2014, the ORGANIZATION formed a department that went by various names but was at times referred to as the “translator project.” This project focused on the U.S. population and conducted operations on social media platforms such as YouTube, Facebook, Instagram, and Twitter.

By approximately July 2016, more than eighty ORGANIZATION employees were assigned to the translator project.

By in or around May 2014, the ORGANIZATION’s strategy included interfering with the 2016 U.S. presidential election, with the stated goal of “spread[ing] distrust towards the candidates and the political system in general.”

Defendants CONCORD MANAGEMENT AND CONSULTING LLC (Конкорд Менеджмент и Консалтинг) and CONCORD CATERING are related Russian entities with various Russian government contracts. CONCORD was the ORGANIZATION’s primary source of funding for its interference operations. CONCORD controlled funding, recommended personnel, and oversaw ORGANIZATION activities through reporting and interaction with ORGANIZATION management.

CONCORD funded the ORGANIZATION as part of a larger CONCORD-funded interference operation that it referred to as “Project Lakhta.” Project Lakhta had multiple components, some involving domestic audiences within the Russian Federation and others targeting foreign audiences in various countries, including the United States.

By in or around September 2016, the ORGANIZATION’s monthly budget for Project Lakhta submitted to CONCORD exceeded 73 million Russian rubles (over 1,250,000 U.S. dollars), including approximately one million rubles in bonus payments.

Starting at least in or around 2014, Defendants and their co-conspirators began to track and study groups on U.S. social media sites dedicated to U.S. politics and social issues. In order to gauge the performance of various groups on social media sites, the ORGANIZATION tracked certain metrics like the group’s size, the frequency of content placed by the group, and the level of audience engagement with that content, such as the average number of comments or responses to a post.

For example, starting in or around June 2016, Defendants and their co-conspirators, posing online as U.S. persons, communicated with a real U.S. person affiliated with a Texas-based grassroots organization. During the exchange, Defendants and their co-conspirators learned from the real U.S. person that they should focus their activities on “purple states like Colorado, Virginia & Florida.” After that exchange, Defendants and their co-conspirators commonly referred to targeting “purple states” in directing their efforts.

32. Defendants and their co-conspirators, through fraud and deceit, created hundreds of social media accounts and used them to develop certain fictitious U.S. personas into “leader[s] of public opinion” in the United States.

33. ORGANIZATION employees, referred to as “specialists,” were tasked to create social media accounts that appeared to be operated by U.S. persons... Specialists were instructed to write about topics germane to the United States such as U.S. foreign policy and U.S. economic issues. Specialists were directed to create “political intensity through supporting radical groups, users dissatisfied with [the] social and economic situation and oppositional social movements.”

34. Defendants and their co-conspirators also created thematic group pages on social media sites, particularly on the social media platforms Facebook and Instagram. ORGANIZATIONcontrolled pages addressed a range of issues, including: immigration (with group names including “Secured Borders”); the Black Lives Matter movement (with group names including “Blacktivist”); religion (with group names including “United Muslims of America” and “Army of Jesus”); and certain geographic regions within the United States (with group names including “South United” and “Heart of Texas”). By 2016, the size of many ORGANIZATION-controlled groups had grown to hundreds of thousands of online followers.

35. Starting at least in or around 2015, Defendants and their co-conspirators began to purchase advertisements on online social media sites to promote ORGANIZATION-controlled social media groups, spending thousands of U.S. dollars every month.

36. Defendants and their co-conspirators also created and controlled numerous Twitter accounts designed to appear as if U.S. persons or groups controlled them. For example, the ORGANIZATION created and controlled the Twitter account “Tennessee GOP,” which used the handle @TEN_GOP. The @TEN_GOP account falsely claimed to be controlled by a U.S. state political party. Over time, the @TEN_GOP account attracted more than 100,000 online followers.

39. To hide their Russian identities and ORGANIZATION affiliation, Defendants and their coconspirators—particularly POLOZOV and the ORGANIZATION’s IT department—purchased space on computer servers located inside the United States in order to set up virtual private networks (“VPNs”).

40. Defendants and their co-conspirators also registered and controlled hundreds of web-based email accounts hosted by U.S. email providers under false names so as to appear to be U.S. persons and groups.

41. In or around 2016, Defendants and their co-conspirators also used, possessed, and transferred, without lawful authority, the social security numbers and dates of birth of real U.S. persons without those persons’ knowledge or consent. Using these means of identification, Defendants and their co-conspirators opened accounts at PayPal, a digital payment service provider; created false means of identification, including fake driver’s licenses; and posted on ORGANIZATION-controlled social media accounts using the identities of these U.S. victims.

42. By approximately May 2014, Defendants and their co-conspirators discussed efforts to interfere in the 2016 U.S. presidential election. Defendants and their co-conspirators began to monitor U.S. social media accounts and other sources of information about the 2016 U.S. presidential election. [Humm, who were these co-conspirators?]

43. By 2016, Defendants and their co-conspirators used their fictitious online personas to interfere with the 2016 U.S. presidential election. They engaged in operations primarily intended to communicate derogatory information about Hillary Clinton, to denigrate other candidates such as Ted Cruz and Marco Rubio, and to support Bernie Sanders and then-candidate Donald Trump.

44. Certain ORGANIZATION-produced materials about the 2016 U.S. presidential election used election-related hashtags, including: “#Trump2016,” “#TrumpTrain,” “#MAGA,” “#IWontProtectHillary,” and “#Hillary4Prison.” Defendants and their co-conspirators also established additional online social media accounts dedicated to the 2016 U.S. presidential election, including the Twitter account “March for Trump” and Facebook accounts “Clinton FRAUDation” and “Trumpsters United.”

46. In or around the latter half of 2016, Defendants and their co-conspirators, through their ORGANIZATION-controlled personas, began to encourage U.S. minority groups not to vote in the 2016 U.S. presidential election or to vote for a third-party U.S. presidential candidate.

47. Starting in or around the summer of 2016, Defendants and their co-conspirators also began to promote allegations of voter fraud by the Democratic Party through their fictitious U.S. personas and groups on social media. Defendants and their co-conspirators purchased advertisements on Facebook to further promote the allegations...

On or about August 11, 2016, Defendants and their co-conspirators posted that allegations of voter fraud were being investigated in North Carolina on the ORGANIZATION-controlled Twitter account @TEN_GOP. ..

On or about November 2, 2016, Defendants and their co-conspirators used the same account to post allegations of “#VoterFraud by counting tens of thousands of ineligible mail in Hillary votes being reported in Broward County, Florida.”

48. From at least April 2016 through November 2016, Defendants and their co-conspirators, while concealing their Russian identities and ORGANIZATION affiliation through false personas, began to produce, purchase, and post advertisements on U.S. social media and other online sites expressly advocating for the election of then-candidate Trump or expressly opposing Clinton.

51. Starting in approximately June 2016, Defendants and their co-conspirators organized and coordinated political rallies in the United States.

53. In or around late June 2016, Defendants and their co-conspirators used the Facebook group “United Muslims of America” to promote a rally called “Support Hillary. Save American Muslims” held on July 9, 2016 in the District of Columbia.

54. In or around June and July 2016, Defendants and their co-conspirators used the Facebook group “Being Patriotic,” the Twitter account @March_for_Trump, and other ORGANIZATION accounts to organize two political rallies in New York. The first rally was called “March for Trump” and held on June 25, 2016. The second rally was called “Down with Hillary” and held on July 23, 2016.

55. In or around late July 2016, Defendants and their co-conspirators used the Facebook group “Being Patriotic,” the Twitter account @March_for_Trump, and other false U.S. personas to organize a series of coordinated rallies in Florida. The rallies were collectively referred to as “Florida Goes Trump” and held on August 20, 2016.

57. After the election of Donald Trump in or around November 2016, Defendants and their coconspirators used false U.S. personas to organize and coordinate U.S. political rallies in support of then president-elect Trump, while simultaneously using other false U.S. personas to organize and coordinate U.S. political rallies protesting the results of the 2016 U.S. presidential election.

58. In order to avoid detection and impede investigation by U.S. authorities of Defendants’ operations, Defendants and their co-conspirators deleted and destroyed data, including emails, social media accounts, and other evidence of their activities.

76. On or about August 18, 2016, the real “Florida for Trump” Facebook account responded to the false U.S. persona “Matt Skiber” account with instructions to contact a member of the Trump Campaign (“Campaign Official 1”) involved in the campaign’s Florida operations and provided 27 Case 1:18-cr-00032-DLF Document 1 Filed 02/16/18 Page 28 of 37 Campaign Official 1’s email address at the campaign domain donaldtrump.com. On approximately the same day, Defendants and their co-conspirators used the email address of a false U.S. persona, joshmilton024@gmail.com, to send an email to Campaign Official 1 at that donaldtrump.com email account, which read in part:

Hello [Campaign Official 1], [w]e are organizing a state-wide event in Florida on August, 20 to support Mr. Trump. Let us introduce ourselves first. “Being Patriotic” is a grassroots conservative online movement trying to unite people offline. . . . [W]e gained a huge lot of followers and decided to somehow help Mr. Trump get elected. You know, simple yelling on the Internet is not enough. There should be real action. We organized rallies in New York before. Now we’re focusing on purple states such as Florida. The email also identified thirteen “confirmed locations” in Florida for the rallies and requested the campaign provide “assistance in each location.”

85. On or about September 22, 2016, Defendants and their co-conspirators created and purchased Facebook advertisements for a series of rallies they organized in Pennsylvania called “Miners for Trump” and scheduled for October 2, 2016. All in violation of Title 18, United States Code, Section 371.

88. The conspiracy had as its object the opening of accounts under false names at U.S. financial institutions and a digital payments company in order to receive and send money into and out of the United States to support the ORGANIZATION’s operations in the United States and for selfenrichment.

89. Beginning in at least 2016, Defendants and their co-conspirators used, without lawful authority, the social security numbers, home addresses, and birth dates of real U.S. persons without their knowledge or consent. Using these means of stolen identification, Defendants and their coconspirators opened accounts at a federally insured U.S. financial institution (“Bank 1”), including the following accounts: [snip]

92. On or about the dates identified below, Defendants and their co-conspirators obtained and used the following fraudulent bank account numbers for the purpose of evading PayPal’s security measures: [snip]

93. Additionally, and in order to maintain their accounts at PayPal and elsewhere, including online cryptocurrency exchanges, Defendants and their co-conspirators purchased and obtained false identification documents, including fake U.S. driver’s licenses. Some false identification documents obtained by Defendants and their co-conspirators used the stolen identities of real U.S. persons, including U.S. persons T.W. and J.W.



95. Defendants and their co-conspirators also used the accounts to receive money from real U.S. persons in exchange for posting promotions and advertisements on the ORGANIZATION controlled social media pages. Defendants and their co-conspirators typically charged certain U.S. merchants and U.S. social media sites between 25 and 50 U.S. dollars per post for promotional content on their popular false U.S. persona accounts, including Being Patriotic, Defend the 2nd, and Blacktivist. All in violation of Title 18, United States Code, Section 1349.

Wednesday, January 17, 2018

"The Post", A Tribute to the Fourth Estate

by Brian T. Lynch, MSW

The Post. What a fantastic movie on so many levels!

I saw it recently with my family and, except for someone who kept falling asleep and snoring behind us, we really enjoyed this truly inspiring movie. The actual events surrounding the Pentagon Papers and the Vietnam conflicts here at home all flooded back to mind (yes, I am that old). But the movie brought in more detail and information than I ever knew. It filled the theater with suspense despite knowing the ultimate outcome. It reminded me again of just how vulnerable our First Amendment rights are, and how easy it is for an administration of government to take them away.

The U.S. Constitution doesn’t actually grant us our rights, it is just a slip of paper. Rather, it challenges us to physically inhabit those rights for ourselves. It lays the framework for an active civic process. Each generation must secure their rights anew under our Constitutional framework.

It was twice said in the movie that the right to publish the news is secured by publishing it, not by arguing about it. Our rights can wither in debate but can only strengthen when exercised. That is a lesson we must pass along to every generation.

Two present day examples of this principle come to mind. NFL players kneeling during the National Anthem is an actual exercise of our First Amendment rights, while the ensuing debate did little to strengthen our right to protest. A second example comes from a local news story of a lawyer who was stopped in her car by a police officer. The officer asked her if she knew why he had stopped her. She said she refused to answer the question, but otherwise cooperated and gave him her documents. The officer was so upset that she wouldn't answer his question that he arrested her for not following a "legal" command. As he put her in the back of his police car he read her that familiar Miranda warning, which says in part, "You have a right to remain silent..." She remained under arrest for hours before being released. She later won a modest settlement in a suit brought against the Department for her unlawful arrest. The story generated a lot of debate while her actions helped secure our actual rights.

But back to the movie. I also came away with a profound appreciation for the incredible heroine depicted so well by Meryl Streep.

Katharine Graham was a socialite and heiress to the Washington Post, which was a local newspaper at that time. Her father founded the paper and left her husband in charge. Then her husband died suddenly leaving all of this crushing responsibility for the newspaper on her.

Ms. Graham was ill prepared for her role as publisher in most aspects. But she had an incredibly noble character and somehow managed to summon enormous strength to do the right thing under threats of disaster. She was a woman alone in a man's world, yet she rose to meet the challenges. Her courage saved the Post and helped save the First Amendment for a generation to come. Her decision to publish the stolen, top secret Pentagon Papers exposed decades of government lies about Vietnam and helped bring that war to an end. The Supreme Court's decision to uphold the freedom of the press in publishing that information set the stage for journalism's victory in holding the Nixon administration accountable to the rule of law following the Watergate break in.

Contrast that with how the government is acting in the Edward Snowden matter today, for example, consider the public good Snowden has done in exposing illegal, unconstitutional government activities. His decision to selectively reveal classified information to the press has lead to strong government reforms designed to protect our privacy rights, yet he is considered a criminal, just as Daniel Ellsberg was a generation ago.

At a time when our current President openly lies to us, disparages the free press, calls it "fake news" and encourages citizens to distrust not only legitimate journalism but many trusted government institutions, this story about Publisher Katharine Graham, her Editor-in-Chief, Ben Bradley and the Washington Post is a timely tale of caution and inspiration for us all.

Sunday, January 14, 2018

Race, Social Divisions Sap Our Strength, but We Shall Overcome!

by Brian T. Lynch, MSW

 I liked this humorous bit (below) because it reminds us that racism is used by the powerful to maintain their wealth and status. If poor whites and poor  minorities joined in common cause it would spell trouble for wealthy elite. They would be forced to share more of their wealth.

Dr. ML King came to understand this before he was murdered. He was never a greater threat to the established order than when he began his work to unite the races in a fight against poverty and the wealthy elite who structure societies to favor themselves.

Click Here to see the brief video of Dave Chappelle: https://www.facebook.com/OfficialChopShop702/videos/936060313225131/ 

There is only one source of social power in human society, and that is the power of coordinated actions. Whether you are building a house, a business, a movement or a government, it is the coordinated actions of people that get things done. 

The converse is true when powerful interests want to block the competing interests of others. They block others by disrupting their ability to communicate and organize. They disrupt our efforts to coordinate the actions of others. They diminish us through subversion or by distorting or hiding the facts. They create and exploit divisions among us. They create distractions, sow confusion, disparage dissent, arrest organizers, isolate factions and restrict access to resources. They use force if all else fails.

President John F. Kennedy once said, "Those that make peaceful revolution impossible, will make violent revolution inevitable." 

The tendency to form social divisions is part of our human nature, but so is forming alliances and overcoming differences for mutual benefit.  If our capacity to work together was not greater than our urge to only "take  care of our own," we would still be a society of hunter gatherers. Powerful people use their power to stay in power. They thwart our efforts to organize, to unionize, to communicate, to affiliate, to overcome our differences and even to vote in this republic.

And now a new layer has been added. A hostile foreign power has infiltrated our government at the highest levels. It is using its military to conduct mass media propaganda attacks against us, attacks designed to disunite us as a nation. It is compromising our politicians with illegal campaign cash. Its goal is to establish a global kleptocracy with unlimited powers to extract our wealth and control our culture.

Against these coordinated attacks on America we must come together, unite in common cause and overcome the differences between us that they magnifying and exploit.  It's time to unite against all odds and move in unison against the forces that are pulling us apart. 

Here, on Martin Luther King Day, are a few quotes  and an excerpt of his last major address before being assassinated.

“God never intended for one group of people to live in superfluous inordinate wealth, while others live in abject deadening poverty.”
“A second evil which plagues the modern world is that of poverty. Like a monstrous octopus, it projects its nagging, prehensile tentacles in lands and villages all over the world. Almost two-thirds of the peoples of the world go to bed hungry at night. They are undernourished, ill-housed, and shabbily clad. Many of them have no houses or beds to sleep in. Their only beds are the sidewalks of the cities and the dusty roads of the villages. Most of these poverty-stricken children of God have never seen a physician or a dentist.”
 “The rich nations must use their vast resources of wealth to develop the underdeveloped, school the unschooled, and feed the unfed. Ultimately a great nation is a compassionate nation. No individual or nation can be great if it does not have a concern for ‘the least of these.’”
Most people think about Dr. King's "I have a dream" speech today, but I want to leave you with another speech of his. Watch Lin Manuel deliver Dr. King's "Beyond Vietnam" speech:

https://twitter.com/twitter/statuses/952931323424907264



Tuesday, December 12, 2017

Restoring Democracy in the Democratic Party is Necessary to Save Our Republic

by Brian T. Lynch, MSW

Not long ago, Deborah Wassermann Shultz and the DNC boasted that Democratic super delegates buffer the Democratic Party leadership from capricious grassroots influence. Make no mistake, this was a boast, not an admission. Behind it is a fear that popular movement activists might upset the balance between wealthy donors who fund the Party and the needs of middle-class Americans, which is the largest voting bloc. But representing the middle-class leaves a lot of worthy American's without political representation.

Consider this, the U.N. is investigating poverty and civil right violations in areas of the United States that are on par with what can be found seen in 3rd world nations. Extremely insensitive GOP policies and attitudes are among the root causes of extreme systemic poverty. No where are the consequences more dire than in some red states in the South dominated by extreme conservative politics. In one poor neighborhood in Alabama under investigation by the United Nations, for example, ringworm is epidemic from contaminated drinking water. The reason is that waste water is being carried away in above ground PVC pipes that empty into open sewerage pits and even fields where children play. The Republican leaders don't seem to care about sanitation for these folks. In the eyes of many conservative politicians the poor have only themselves to blame. Leaders there allocate no money to help those who have no money to fix their septic tanks. These are the unworthy poor.



It is the GOP that does most of the dirty work of stripping the social safety nets and public services of government funding. The money saved pays for tax cuts and sweetheart deals to wealthy corporations and their owners. These perks for business are rewarded with campaign donations and sometimes other, more corrupt, remunerations.

Democratic leaders are mostly silent about the poverty conditions in red states, and have been for years. These poor people aren't registered Democrats. They can't help Democrats get elected and can't donate to the Party. This is how Democratic leaders feel about the poor in general. Party leaders have become ever more focused on races where the Party has the best chances of winning, and corporate donations are all that is needed to secure a victory. But these corporate donations also come with strings attached. Business interests must be served. Regulations and consumer protections must be rescinded to boost corporate profits. Tax breaks for the wealthy must be provided in exchange for their support, and government services must be cut to make up for lost revenue.

This is an aspect of party over people. It is neoloberalism in action. Neoliberalism is devoid of any compassion or social justice for those who cannot compete in the market place. Neoliberals ascribe human rights to business entities and work to free corporations from restrictive government rules designed to protect and empower actual human beings. Neoliberal Democrats have given lip service to the needs of the middle-class for decades without ever mentioning the deteriorating conditions of the poor and the working class over the past 30 years. They run on prosperity platforms that emphasize job creation rather than wealth creation for middle-class families. They stress ways to boost business profits to create good paying jobs, but then don't hold businesses accountable when those jobs never materialize. They turn a blind eye when the wealthy hide their profits in off shore tax havens, and the list goes on. Neoliberals in both parties continue to promote failed policy ideas because they can't offend their business donors. So for all of us, silence is consent! Our hands are just as dirty if we aren't willing to speak out and advocate for ourselves and for those who have no voice in government.

Right now, the Republican Party is a lost cause while the Democratic Party is too focused on the tic tock of strategic planning to hear the cries of the needy. Both parties are badly in need of reform. The over representation of business interests (ownership class) over civil interests is at the core of the destructive neoliberal philosophy shared by leadership in both parties. I am a life-long Democrat. It is clear that the DNC and the State Democratic Parties must come to accept that populism IS what democracy looks like. If you do right by all the people you have nothing to fear from populist activism. Don't just cut the number of super-delegates, eliminate them and restore democracy.

Wednesday, November 22, 2017

The Promise Makers of Wall Street

by Brian T. Lynch, MSW

Not long ago a dollar was backed by the promise that it could be exchanged for gold or silver. To back up that promise the US gold reserve was established at Fort Knox in Tennessee, for example. The confidence of our people, and of the rest of the world, in our currency was far less certain than it is today.  The gold standard was perhaps a necessary step towards establishing the good faith of the US Government.

Look at a dollar bill and you will see that it is a Federal Reserve Note. Before the creation of the Federal Reserve Bank, many banks issued their own currency, or "bank notes".  The worthiness of those bank notes wasn't consistent. The Federal Reserve Bank standardized and stabilized our national currency. It's important to remember that the word "note" is another word for an I.O.U.  A bank note is a promise that a coin or a paper document  can be exchanged for a stated amount of tangible value.

The important point for this discussion is that all currency is a form of debt. A U.S. Dollar is a government backed loan. Our trust in its worthiness has become an intrinsic faith in our government's ability to guarantee its face value. (Which is why the Congressional Freedom Coalition's talk of not raising the national debt ceiling is so dangerous.)

I recently saw "Junk" on Broadway. It is a play partially based on the story of Wall Street financier Michael Milken.  It is a cautionary tale of money and corruption. Milken's new approach to finance made him a billion dollars over just four years in the 1980's. He was like a god on Wall Street and all the normal rules didn't seem to apply to him, until he got caught breaking the laws he ignored.

More than that, Junk is the story of the paradigm shift Milken pioneered in how modern bankers and business leaders have come to understand wealth and power.  It is a view of wealth that can be summed up by the slogan, "debt is an asset".  Specifically, any financial instrument that reliably conveys the promise of value to another person or entity can be used as a form of currency.

Government regulated Federal Reserve Notes are no longer central to the exchange of wealth. Nor is any physical collateral or real estate necessary. It seems almost any promise of payment for money owed is sufficient to make financial transactions on Wall Street. These creative financial instruments often have cleaver names and deceptive structures. They are increasingly complex and difficult to understand or regulate. But they all have one thing in common, they are all based on debt. They all create wealth on a promise.

In  Milken's case, he began with generating cash by selling very  high risk, but high yield bonds and then using those bonds as collateral to finance corporate takeovers. These "junk bonds" (as they are still called) were used like currency to finance "leveraged buyouts" of other businesses. Whole divisions within companies purchased in these buyouts often had to be chopped up and sold off to pay back these high interest bonds.

The charges brought against Milken were ordinary financial crimes, such as insider trading. But his creative financing lead to a whole new banking culture that upended how business was conducted around the world. It has lead to an economic environment where new methods for wealth extraction competes against more conventional methods of wealth creation on a global scale.

The growing methods and culture of wealth extraction transfers wealth but doesn't create new wealth. It doesn't grow or manufacture anything. It only creates more opportunities for the wealthy to grow richer while disadvantaging mid-sized businesses and manufacturers. It is one of the drivers leading us into the next gilded age, but it hard to see just where it is taking us. It is harder still to know what we can do make our economy work for everyone again.

Wednesday, November 15, 2017

Uranium One Hype a Big "Nothing Burger"

by Brian T. Lynch, MSW

President Trump and some Republicans in Congress want the Department of Justice to investigate Trumps political opponent, Hillary Clinton. Specifically they want a Special Counsel appointed to investigate her ties to the sale of US uranium to Russia. Attorney General Jeff Sessions squirmed under pressure to act from a GOP congressmen at a hearing on November 14, 2017.

A President calling for criminal investigations of his political opponents is abhorrent in any modern democracy. In this particular case a second Special Counsel investigation would also give Trump political leverage to further obstruct the efforts of Robert Mueller's investigation of Trump's ties to Russia. But I suspect the biggest reason Jeff Sessions squirmed when pressed to appoint a Special Counsel was because there is simply no basis to investigate anything connecting Hillary to Uranium One sales. Here are the essential facts in a timeline format.

2005 - Bill Clinton and Frank Giustra, a Canadian mining financier with an interest in the UrAsia Mining Company, visit Kazakhstan. Kazakhstan is an independent country that was once under the control of the former Soviet Union. Not long after the Guistra visit, UrAsia Mining receives a lucrative mining contract in Kazakhstan.

2006 - Frank Giustra donates $31.3 million to the Clinton Foundation.
2007 - UrAsia Mining Company merges with South Africa Mining Company to become the Uranium One Company. Frank Giustra sells his financial interests in the company.
2008-2010 - During this period several active investors with an interest in Uranium One Company and a former investor (Giustra ) donate more than $8 million to the Clinton Foundation. Donation from just the active investors totaled just over $4 million. The Clinton Foundation omitted these active donors' names in a US Government filing document, later admitting that information was omitted by mistake.
2009 - Hillary Clinton becomes Secretary of State. Later that same year, Rosetom, a Russian mining company, begins buying a stake in Uranium One.

2009-2013 - During this time Rosetom completes three separate transactions to gain a controlling interest in Uranium One. Announcement of plans to take over Uranium One invokes the need for the Uranium One sale to be approved by the Committee on Foreign Investment in the United States (CFIUS). (Note: This sale of Uranium One only involved product mined in the US and sold only to private nuclear power generation companies within the US. CFIUS is an advisory committee. Only the President of the United States can stop the sale of this company to a foreign business entity.)
2010 - The CFIUS committee, comprised of the Secretary of the US Treasury Department and department heads at the Justice Department, Homeland Security, Consumer Affairs, the Defense Department, The State Department, the Energy Department, The office of US Trade Representatives and the Science and Technology Policy group, approve the sale a controlling interest in the Uranium One Company to the Rosetom company. At the time of the approval, the State Department's CFIUS representative was the Assistant Secretary of State, Jose Fernando (not Hillary Clinton). Had any one of these agency heads objected to the sale the matter would have gone to the President to decide. The purchase of a controlling interest in Uranium One by Rosetom did not involve or allow the export of uranium to Russia.
2017 - President Donald Trump and Republican members of Congress call for a criminal Investigation of Hillary Clinton's connections to this uranium sale that took place seven years prior. 

That's it. If there was a quid pro quo arrangement between Hillary Clinton and Uranium One or Rosetom it isn't apparent from the facts, as least not to me. There are other facts that advocates of a Hillary prosecution toss into the mix (speakers fees, etc.), but they have little apparent relationship to the essential accusation the Republicans are making. If Hillary Clinton could no, and did not, contribute anything of value to the parties involved in the sale of financial interests in Uranium One, then there was no quid pro quo, no bribery to investigate.

Even FoxNews' Sheppard Smith called out his own company and the President on this one. https://youtu.be/f8wuFDs7xSA



CORRECTION: The prior version of this post mistakenly stated that it was the sale of uranium that was approved by CIFUS when it was the sale of a financial interest in the company, Uranium One, by Rosetom that was reviewed and approved by CIFUS. Changes have been made to correct this error.

Wednesday, November 1, 2017

Let's Talk!

by Brian T. Lynch, MSW

I don't mean to offend anyone who enjoys sports, but professional sports have become a primary distraction keeping us from our due diligence to be well informed and actively engaged in the level of civil discourse our democracy requires.(This doesn't apply to everyone who likes sports). So when folks are upset that politics is infringing on sports, they affirm the role of sport as a means to avoid uncomfortable conversations.
Most Americans have developed a superficial relationship to politics (Including many in the media who cover it like a sport). Politics as sport is all process and insider intrigue. It is devoid of real substance or depth behind the reported facts. We lose sight of the real world consequences that bad policy decisions have on our lives.
Current events are forcing us to confront politics as we haven't done in years. It's a good development, but it will take time to get use to talking about politics with our neighbors again. It will take time to gather the essential facts we should have, facts that have been missing or withheld from us for years. And it will test our patience and tolerance as we begin to bridge the gaps that have come to divided us. So let's hang in there and keep talking.

Sunday, October 29, 2017

Taking Offense to NFL Counter Protests

by Brian T. Lynch, MSW

[Below is a letter to the editor I sent to my hometown newspaper. Feel free to use it as a template for your own letter if you wish and feel the same way I do on the issues.]

In 2015, when police homicides in America first gained national attention, there were 59 civilians shot dead in the first 24 days of that year.  By contrast, in England and Wales there were a total of 55 civilians killed in police shootings during  the prior 24 YEARS.  Accounting for population differences we might expect  12 civilians killed by police here per year, not ten time that number.

We have too many police homicides and the problem is compounded when a disproportionate number killed are African-Americans. It may just be rogue cops and a few tainted police department behind most shootings, yet little is being done to correct the problem.

So when I see an NFL player kneeling at the National Anthem, I'm reminded we have to work harder  to overcome racial bias and improve our national policing. 

When fans, and especially Legionnaires burn NFL jerseys to protest the players calling our attention to this problem, I feel a disconnect. Don't they know they're dehumanizing the dead and trivializing the trauma of their loved ones?  Which is the greater offence, kneeling at the anthem or ignoring these needless killings? 


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