Donald Trump – The Art Of The Racketeer
Donald Trump is basically a racketeer, specializing in the crimes of extortion, bribery, money laundering, and now obstruction of justice. The people who knew this best, far more than the American people and press, were the corrupt foreign governments and oligarchs with whom Trump had engaged in his racket over the last few decades, whether through extortion, bribery, or money laundering. And these foreign entities knew better than anyone how to deal with Trump.
The most advantageous position to be in with Trump is to have enough leverage over him so he can not extort you, because that is his default option. Conversely, the least advantageous position is where Trump has all the leverage and can extort you. Bribery can strengthen or weaken your position depending on the situation, but, even then, bribery will only get you so far without leverage as bribery brings no loyalty from Trump. If you are not the law, the best way to fight back against a racketeer is to become a racketeer yourself.
It seems clear, based on Trump’s refusal to ever criticize Putin, that the Russians had plenty of leverage over Trump and were determined to use it. In addition, the Russians had been laundering money with Trump for over a decade. And they knew he could be bought. That leverage, combined with the Russian campaign to discredit Hillary, was designed to get the sanctions lifted in return for Trump becoming President. The Russians also knew that they could enhance their position with Trump with additional bribery, holding out the possibility of that chimerical Trump Tower in Moscow. The Russians were actually in prime position with Trump, apparently having enormous leverage over him and being able to bribe him with something he desperately wanted.
Saudi Arabia and the United Arab Emirates were in a somewhat similar position to the Russians but probably did not have the same level of leverage over Trump that the Russians did. They did have years of history dealing with Trump and knew he could be influenced by their money. Trump had done business with both the Saudis and the UAE for years. Trump already had two branded golf course in Dubai and his UAE partner promised to invest $2 billion more in Trump properties after Trump’s election. And Trump himself admitted that Saudis were currently buying apartments in his buildings, in addition to having helped bail Trump out way back in the 1980s.
We now know that the Saudis and the Emiratis were proposing a social media campaign to help the Trump election effort, led by Israeli Joel Zamel who had previously done work for Russian oligarch and one-time Paul Manafort benefactor, Oleg Deripaska. A meeting was set up by dual-national Emirati and convicted pedophile George Nader and Erik Prince, (who subsequently committed perjury in front of a Congressional committee about the meeting), with Donald Trump Jr. and representatives from the two countries. Nader and Prince were also set up the meeting in the Seychelles to set up a back channel with the Russians. According to the New York Times, Trump Jr. reacted positively to the idea, much as he had when meeting with the Russians. In fact, Nader met multiple times with Trump campaign officials including Kushner, Flynn, and Bannon in the last two months of the campaign.
After the election, Nader not only paid to produce a presentation about the effectiveness of the social media campaign but also paid Zamel a reported $2 million, although that payment can not currently be linked directly to the election disruption effort. Whether this Saudi effort, which began in August 2016, was in concert with Russia, especially after the Manafort connection to Deripaska was uncovered earlier that month, remains unknown.
Nader seems to been emboldened by this success, realizing that Trump could be bought and also that he now had a certain amount of leverage. And Nader was determined to capitalize on that, not only for himself but also for the Saudis and Emiratis. After Trump’s inauguration, Nader met with both Kushner and Bannon and began pushing a similar campaign against the Iranians, but using economic warfare as well as propaganda. He pitched this idea, as well as a proxy army to fight against the Iranians in Yemen in coordination with Erik Prince, to both the Americans and the Saudis.
Those specific plans don’t seem to have materialized but their outlines can be seen in subsequent actions by Trump, the Saudis, and the Emiratis. In May of 2017, Trump was in Saudi Arabia and signing a $110 billion deal to sell arms to Saudis to aid them in the proxy war with Iran. By June of 2017, the Saudi Arabia and the UAE accused Qatar, who they viewed as an ally of Iran, of supporting terrorism, cutting all trade and diplomatic relations, and instituting a blockade of the country. Despite the fact that Qatar housed the most important US base in the Middle East, Trump fully supported the Saudi and Emirati action, claiming Qatar was “a funder of terror at a very high level.”
By now, George Nader had hooked up with Elliot Broidy, the deputy finance chair of the Republican National Committee, and they continued to try to build anti-Qatar sentiment in Congress and in the White House in hopes of getting major business deals with the Saudi and Emiratis, including potentially moving the important US base from Qatar to one of those countries.
In early December, Broidy made the first of his $1.6 million hush money payments to a Playboy model whom he apparently got pregnant and paid for her abortion in a deal setup by Michael Cohen. There is circumstantial evidence that Trump was actually the one who had the affair with the model and got her pregnant and that Broidy was simply paying her off on Trump’s behalf. That evidence includes the fact that the same pseudonym for Trump in the Stormy Daniels case was used in Broidy’s supposed NDA with the model. That theory is also bolstered by the fact that, on the very next day after that initial payment was made, Broidy had a personal meeting with Trump in New York. And by the end of the month, Broidy and Nader had signed over $1 billion in deals, primarily with the UAE, as well as receiving nearly $1 million in US defense contracts over the course of 2017. Nader himself subsequently donated nearly $200,000 to the RNC in order to get his picture taken with Trump.
The Saudis, the Emiratis, George Nader, and Elliot Broidy all saw how to deal with Trump. The Saudis and Emiratis gained leverage by helping Trump get elected. They collected with a huge arms deal and support in their proxy war with the Iranians. Nader and Broidy tried to exploit that situation and found their way in to Trump by paying off the Playboy model for him.
The Qataris were apparently unable or unwilling to play the same game as the Saudis and the Emiratis. For Trump, Qatar had been a wasteland. The Trump Organization investigated potential opportunities on Doha at the beginning of this decade, with Ivanka pursuing deals as late as 2015, but none of it came to fruition. Apparently, the only business relationship Qatar had with Trump at the time of his election was a lease for a space in Trump Tower for Qatari Airlines.
At the same time that the Saudis and the Emiratis were pushing to interfere in the election, possibly in coordination with the Russians, the Kushner family was negotiating unsuccessfully with the Qataris to help bail them out of the fiasco of 666 Fifth Avenue. In addition, it seems likely that the Qataris were also angling to be the middlemen in the deal to sell the Russian oil giant Rosneft, the commission on which had been promised to Carter Page in return for the lifting of sanctions on Russia. That potential deal probably led to the Qatari foreign minister to a Trump Tower meeting with Michael Flynn in December, 2016.
It appears the Qataris were caught holding the bag, which turned out to be a mythical 50% stake in Rosneft, when it became clear in early 2017 that the Russian sanctions would not be lifted anytime soon. By April of 2017, whether related to the collapse of Rosneft deal or not, the Qatari deal to bail out the Kushners also fell apart.
As 2017 progressed and the blockade was instituted and continued, the Qataris, having realized the error of turning down the Kushners and badly underestimating the efforts of the Saudis and Emiratis, were desperately trying to get back in Trump’s good graces. In January of 2018, the Qataris bought a $6.5 million apartment in Trump Tower with the purported purpose of getting back in Trump’s good favor. Around the same time, they refused to provide Mueller with information about meetings that the aforementioned Nader and Broidy had with Jared Kushner and other Trump officials back in 2017. In addition, according to a declaration in a bizarre lawsuit involving basketball and Ice Cube, the Qataris had previously paid off Flynn and were attempting to bribe Steve Bannon with the intentions of getting access to Trump.
In April, 2018, Trump totally reversed his position on Qatar, welcoming the Emir of Qatar to the White House and praising him as “valued partner and longtime friend”. That same month, Michael Cohen hooked up with a major Trump inauguration donor and pitched the Qataris on investing in a pair of unfinished Alabama nuclear power plants. Then, just a few days ago, it was reported that Brookfield Asset Management had agreed to bail out the Kushners by investing in the 666 Fifth Avenue debacle. Brookfield is partially owned by the Qatari sovereign wealth fund but claims that no Qatari money will be going to the Kushner. Due to the fungibility of money, that assurance is virtually meaningless.
The Qatari story is the flip side of the Saudi story. To begin with, the Qataris had virtually no leverage with Trump and, for whatever reason, they did not pay the bribes necessary to sway Trump. Without any leverage, they were subject to his whims which isolated them tremendously. The situation could only be ameliorated by paying off Trump and his family.
The Chinese had to confront this issue even before Trump was inaugurated. Trump’s anti-China rhetoric during the campaign surely upset the Chinese but, like everyone else, they expected Clinton to get elected. So they were already on their heels when Trump made a call to the new Taiwanese leader in early December, 2016 and proposed to use the US relationship with Taiwan and the so-called “one China” policy as a bargaining chip in resetting our relationship with China. This was a typical Trump opening extortion gambit.
That call broke the agreement of the “one China” policy that accepted Taiwan as being part of China and the Chinese government as the legitimate government of all China. It reversed decades of US policy and, as China made clear, threatened to put the US and China on a path toward a potential military confrontation over Taiwan, especially if the new Taiwanese leader decided to declare independence.
Days before Trump’s inauguration, a Chinese foreign ministry spokesman warned, “Not everything in the world can be bargained or traded off. Whoever attempts to harm the one-China principle out of any motive or uses the principle as a bargaining chip will definitely be facing broad and strong opposition from the Chinese government and people, as well as the international community”, with state-owned media warning that Trump was “playing with fire” and China would “take off the gloves”.
In early February, Trump had his first call with President Xi of China in which Trump totally capitulated, walking back his earlier comments about Taiwan and fully recommitting to the “one China” policy. This prompted a reaction and realization from the Chinese that was best summed up by former head of the American Chamber of Commerce in China who said the incident “confirmed to the world that he is a paper tiger … someone that seems threatening but is wholly ineffectual and unable to stomach a challenge.” Two months later, Xi, was having a summit in Mar-a-lago with Trump and providing important Chinese trademark approvals for Ivanka Trump’s line of business. China had the economic and military might to confront Trump over the “one China” policy but it also quickly figured out he could be bribed and flattered. And they have been using that combination on Trump ever since.
The other day, Steve Mnuchin admitted that the US was “putting the trade war on hold” when it came to China, adding that the $50 billion in threatened tariffs are suspended for the moment. The aluminum and steel tariffs will presumably remain in place.
Looking back over the last few weeks, it is easy to see the original Chinese playbook being trotted out again. China responded to the Trump tariffs forcefully, imposing their own duties on US sorghum and pork and refusing to buy American soybeans altogether. These targeted actions struck at the heart of Trump’s rural Midwestern base. Then the Chinese government backed a $500 million loan to a Trump-licensed Indonesian theme park. Three days later, Trump rescinded the sanctions on the Chinese telecom giant ZTE, remarkably worrying about their impact on Chinese jobs by tweeting, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” And now, less than a week after that, the trade war gets put on hold. China wins and Trump folds, but not before banking some more money for the Trump Organization. And the strategy of essentially extorting Trump back, combined with some personal bribery, has worked again for the Chinese.
We can see this process of extortion and bribery play out in a slightly different way with the Korean crisis. It is unclear whether the genesis of the ratcheting up of pressure on the North Koreans was a valid response to the increasing nuclear capability, or simply Trump listening to his hawkish advisers, or part of the plan to try and squeeze China. But it was always clear that Kim Jong-un was able to respond to Trump’s threats by showing that he had the capability of delivering a nuclear warhead not only to Hawaii but the American mainland. He showed he had enough leverage to rebuff Trump’s aggressiveness. But Trump’s tactics against the North Koreans actually had a far greater effect on the South Koreans.
Shortly after he came into office, Trump threatened to terminate the US trade deal with South Korea. At the time, Trump’s overly aggressive rhetoric was actually frightening the South Koreans more than the North. In May of 2017, South Korean President Moon was elected on a platform of improving relations with the North, with just 40% of the vote. His approval rating has shot up to over 80%, largely as result of his attempts to defuse the crisis on the peninsula.
The problem that South Korea had was that, not only did they have no leverage over Trump, they also had nothing to really offer Trump in order to pay him off. Yes, the Korean Aerospace Industries did pay Michael Cohen $150,000 in late 2017 in an attempt to shepherd through a defense contract in partnership with Lockheed. But that was hardly going to be enough.
Moon’s strategy, it appears, was to play to the President’s vanity in order to save his country from potential annihilation. It was the South Koreans who convinced Trump that his brilliant diplomacy was bringing Kim to the negotiating table and it was the South Koreans who first floated the idea of a Nobel Peace Prize for Trump. And Trump fell for Moon’s flattery hook, line, and sinker.
Kim was only to happy to play along with this fiction as it offered the chance to stand on equal footing with an American President as well as offering the remote possibility of eliminating US forces from South Korea. At worst, it would drive a wedge between the US and South Koreans, ultimately benefitting Kim and the Chinese.
Moon is desperate to keep these negotiations going but at the same time must live in fear of the what will happen when they inevitably end in failure. Somehow, he still managed to stroke Trump’s ego enough to convince him to cancel US-South Korean military exercises that Kim objected to. But now the rubber is meeting the road. Trump is finally realizing that Kim has already gotten much of what he wanted, namely the invitation to sit down with the President as an equal. And, despite what Moon says, Kim will never unilaterally denuclearize, leaving Trump to head into the summit with virtually no leverage at all as well as knowing that North and South Korea have little capacity to personally bribe him. For Trump, that’s a lose/lose proposition. Moon will be hung out to dry and China will once again have outflanked Trump.
The stories with Russia, Saudi Arabia, UAE, Qatar, China, and the Koreas are all complicated and complex. But the reason for examining them in detail is to show just how much Trump is driven by his racketeering mindset, how it explains so much of what would normally be seen as irrational decisions, and how so many curious actions by foreign powers are also explained by realizing they understand his racketeering mindset and penchant for extortion and bribery.
The racketeering approach to international diplomacy creates another problem that is reflected not only in the lack of preparation for the Kim summit but also in the complete disarray among the team sent to China to negotiate on trade. The racketeer wants to ensure that the fewest number of people are in on the extortion or bribery. That means that often times his top advisers are intentionally kept in the dark about what Trump’s real policy is. In an administration filled with already outsized egos, that approach exacerbates the discord among his advisers as they each try to outdo each other to implement what they want the President’s policy to be, since the President himself never establishes a policy. That racketeering approach also explains Trump’s penchant for bilateral negotiations rather than multilateral. It is far easier to extort/bribe in one-on-one situations than it is in a roomful of participants.
Some will say that you always go into any negotiation by staking out the maximum position, especially in the area of international diplomacy. And you can certainly make that case for many of Trump’s actions. But far too often, it seems, that Trump takes a maximalist position that ends up benefitting himself and his family. And far too often, Trump immediately retreats from his maximalist position after he and his family have received those benefits.
In fact, Trump’s actions are almost always best explained by thing of him as a racketeer. And the people who know him best, like Michael Cohen, the people that work for him, like Scott Pruitt, and the people who most successfully interact with him, like the Russians, Saudis, Emiratis, and Chinese, approach him with that racketeering mindset.
This creates a serious problem for virtually everyone else who can not or will not approach Trump in this way. For our allies in the West, especially those who abide by the laws, it makes the task of dealing with Trump especially difficult. Because of the stricter corruption laws in those countries, Trump rarely did business there, so they have virtually no direct leverage over Trump. With the possible exception of the EU, none of our allies has the economic strength to threaten Trump’s base in the way that China is able. In addition, those stricter corruption laws make it far more difficult for those countries to personally bribe Trump and his family.
In our domestic politics, we encounter the same issue. Often, Trump’s maximalist positions bleed right into outright extortion. AT&T and Jeff Bezos are essentially being extorted by Trump over the independence of the media outlets CNN and Washington Post, respectively. Trump specifically threatened the AT&T merger with Time Warner because of CNN’s coverage. And Trump has tried on multiple occasions to get the Post Office to raise the rates on Amazon deliveries. These are pure and simple extortion attempts. AT&T attempted to resolve this problem by adopting the racketeering mindset, paying Michael Cohen $600,000 to advise on the merger. So far, apparently, Bezos has resisted going down that path.
And bribery is always an option, with the various Trump properties as perfect vehicles for delivering boatloads of cash to Trump. For those with foresight and greater ambition, a $1 million donation to the Trump inauguration run through a shell company would buy multiple federal judgeships and a Supreme Court justice.
But by far the biggest problem with a racketeer as President is the degradation and erosion of the rule of law. Prosecutors and judges are used to dealing with racketeers who bribe witnesses and obstruct justice. They are used to having the defense team undermine the credibility of witnesses. They are familiar with massive public corruption. They are totally unprepared for a racketeer who has the power to investigate the prosecutors, pressure them to turn over evidence, and potentially and actually fire them. Unfortunately, so far, the DOJ has paid every extortion demand that Trump and his co-conspirators in the House Republican caucus have made.
There was no evidence or reason to indicate that the inspector general needed to investigate how the FISA warrant was obtained on Carter Page. There was no reason to allow those member of Congress to review the FISA application for Page. There was no reason to provide the classified document that launched the Russia investigation and set its parameters. There was even no reason to provide the personal texts between two FBI agents. And there was no reason to fire McCabe just hours before his retirement, denying him his full pension.
Many of these demands were made by Trump’s co-conspirators in the Republican House Caucus. But now Trump himself is demanding an investigation of the investigation in order to determine whether FBI “imbedded” someone in his campaign. That “spy” was simply a confidential informant who was reporting on the Trump campaign officials’ contacts with the Russians as part of the investigation into the Russian interference in our election. That informant’s cover has now been blown, probably damaging US intelligence agencies’ ability to get information in the future.
As Matt Miller notes, “Trump’s demand crossed every institutional norm that has long safeguarded the Justice Department’s independence.” And Rosenstein basically capitulated, not only adding this to the inspector general’s ongoing investigation but also allowing only Republican members of Congress to view highly classified information about the Russian investigation. That information will immediately be passed on to Trump to help him prepare his defense and attack the prosecution further. The fact that Democrats are apparently not invited to this review of classified documents makes it an especially egregious capitulation, one that former Deputy Attorney General Harry Litman has called an “abomination”.
A few weeks ago, Rosenstein himself made a strongly worded statement, saying, “I can tell you that there have been people who have been making threats privately and publicly against me for quite some time. I think they should understand by now that the Department of Justice is not going to get extorted. We’re going to do what’s required by the rule of law, and any kind of threats that anybody makes are not going to affect the way we do our job.” His repeated caves to Trump and GOP demands regarding the Russia investigation show that this is clearly not the case. As Miller says, “Trump was clearly testing the limits of the system that constrains presidential interference with the Justice Department. And the response so far…shows that the system is failing.”
Yes, Rosenstein is between a rock and a hard place. But he must know the extortion will never stop and his repeated capitulations will bring ever more demands. That is the way of the racketeer and extortionist. David Frum made an especially cogent point on Last Word the other night when he said Rosenstein must stop thinking like a lawyer and more like a politician and “choose the maximally damaging time” to say no to the President and this may have been that time. In other words, the most effective way to stand up to a racketeer is to become one too.
Rosenstein’s resignation would not create a constitutional crisis simply because we have clearly been in a slow moving constitutional crisis since we inaugurated a racketeer as President. The crisis began when the President refused to give up his business interests. It continued with firing of Comey. It continues with the Congressional lack of action regarding Trump’s brazen Emoluments Clause violations. And now it continues with Trump’s and his Republican co-conspirators’ demands for confidential details about an investigation into himself.
Donald Trump is entirely ignorant and uninterested in policy or policy details. He has no “beliefs” other than personal enrichment and adulation. Because of that, it is often difficult to discern whether his actions are driven by the beliefs of others or simply attempts to garner praise. But approaching everything he does as an extension of his racketeering enterprise, as a result of extortion or bribery, explains so many of his seemingly inexplicable actions. And that approach also needs to color how we as a country respond to him.