Good morning. Here’s your Early Warning for Thursday, 23 August 2018. (All times Eastern.)
White House
The President is scheduled to hold a roundtable discussion on the Foreign Investment Risk Review Modernization Act (which is likely targeted towards closing loopholes and restricting opportunities for China to invest in U.S. companies who own or have access to critical infrastructure).
NOTES: While the Left is celebrating something they feel can finally sink the president, there is some debate about exactly what will happen as the result of Michael Cohen’s testimony and guilty pleas. Yesterday, the president’s long-time attorney said in federal court that he made illegal payments “at the direction of the candidate,” referring to President Trump. So what happens next?
Pending any other accusations of wrong-doing that carry with them more significant implications, this is now in the hands of the Congress. Specifically, we could be talking about impeachment proceedings since the Department of Justice cannot indict a sitting president.
Last night, Mark Levin was on Hannity explaining that this isn’t as bad as it sounds. Levin, an attorney himself, said that the $130,000 payment to Stormy Daniels (and another payment to a second woman) was a private contract and, since the money didn’t come out of the Trump campaign, there was no violation of the law. Furthermore, he stated that because no law was broken, Cohen pleaded guilty to non-crimes.
“The general counsel for the Clinton mob family, Lanny Davis, he had his client plead to two counts of criminality that don’t exist… A campaign expenditure under our federal campaign laws is an expenditure solely for campaign activity. A candidate who spends his own money or even corporate money for an event that occurred not as a result of the campaign, it is not a campaign expenditure.” – Attorney Mark Levin
But Cohen claimed in his testimony that the payments were made to influence the election; specifically, to keep Stormy Daniels and another woman from speaking out and harming candidate Trump’s chances in the election. That’s where the campaign finance debate begins: was this a private payment or a campaign payment? Levin says that it doesn’t matter because the payment didn’t come from campaign funds. Levin continues:
“So he says to his private lawyer, you pay them, I’ll reimburse you, get it done. Is that illegal? It’s perfectly legal.” [source]
But other legal scholars say that if the payment was campaign-related then, at the very least, the amount exceeded campaign finance limitations. Also campaign expenditure report should have been filed. Based only on what’s come out so far — at most –Trump could be named an unindicted co-conspirator to break campaign finance laws. The case would go to the House to determine whether or not this is an impeachable offense, and they could begin impeachment proceedings if there’s enough support. There clearly isn’t right now, so get ready for this to drag out into next year if the Democrats win back the House. Earlier this week, former White House advisor Steve Bannon described November’s election as a referendum on impeachment. Tuesday, 06 November could determine whether or not the president is impeached.
Cohen is scheduled to be sentenced in December and this plea deal doesn’t require him to cooperate with special counsel Mueller. That could change when Cohen is sentenced, if Mueller tries to strike a deal to reduce Cohen’s sentence in return for cooperation in the investigation into the president. This could get even worse if the attorneys at the Southern District of New York try to get Cohen’s sentence reduced in return for Cohen’s cooperation in uncovering potential crimes by Trump and/or the Trump Organization. Preet Bharara, the fired U.S. attorney who was critical of President Trump, worked at the Southern District of New York, and I imagine there could be a bit of political gamesmanship and bad blood against President Trump.
To recap, nothing so far indicates or suggests collusion with Russia. As we look at the sentencing coming up for Paul Manafort, there’s time for the Mueller team to strike a deal. Mike Flynn’s sentencing has been delayed four times, suggesting to me that Mueller is still trying to work out a deal. And George Papadapoulos is still embroiled in his own legal battle — so there’s still opportunity for Mueller to exploit former Trump officials who are clearly in a tight space.
The concern going forward is two-fold. The first is that despite 30 hours of interviews with a White House attorney, the Mueller team subpoenas the president to seek a “perjury trap”. In this scenario, Mueller wants to get the president on the record and ask him questions in a way that the team can say that the president contradicted earlier statements and then refer the president for impeachment over perjury. The second scenario going forward is that the Mueller report finds that President Trump “conspired” to influence the election, either with Russia or through the Cohen payments, because conspiracy is what you charge the president with when you don’t have enough evidence to convict him on a specific act. Ultimately, President Trump’s future comes down to which party holds the House and Senate after January 2019. It’s entirely possible that impeachment proceedings are brought against the President if the Democrats hold the House and it will be made worse by a report from Mueller that paints the worst picture possible. Two-thirds of the Senate could then vote to remove the president from office, which is something I don’t see happening as long as the GOP holds the Senate in November.
State Department
Secretary Pompeo: Nothing significant to report.
Of note: The Under Secretary of State for Arms Control and International Security is on travel from 12-26 August to Indonesia, Vietnam, and Australia. In Indonesia, U.S. officials will meet to discuss expanding defense trade and regional security issues. All three meetings are likely central to the U.S. Indo-Pacific security strategy to prevent China’s dominance of the entire region.
Defense Department
Defense Secretary Mattis: Nothing significant to report.
SECDEF is scheduled to be in the Indo-Pacific in September and will then travel to Europe.
The Carl Vinson (CVN-70) was last reported as having returned to port in San Diego.
The John Stennis (CVN-74) was last reported back as participating in an exercise off the coast of southern California.
The Harry S. Truman (CVN-75) was last reported in port at Norfolk.
The Ronald Reagan (CVN-76) was last reported as taking part in a bilateral exercise with the Japanese navy.
The George H.W. Bush (CVN-77) was last reported as having returned to port in Norfolk.
Conflict requiring a Carrier Strike Group does not appear imminent.
Congress
Significant House Activity:
- Nothing significant to report.
Significant Senate Activity:
- Nothing significant to report.
* Reporting will appear in the Strategic Intelligence Summary or National Intelligence Bulletin.
Economy/Finance
– At the start of the Federal Reserve’s annual symposium in Jackson Hole today, the Fed still has $4 trillion on its balance sheet. In last month’s meeting, the Fed decided to stay on course with the policy of raising interest rates, to which the White House objected. The federal funds rate today stands at 1.92 percent, and analysts expect another rate hike next month.
– Mexico’s chief negotiator in the NAFTA update is optimistic that he and his U.S. counterpart will soon have a deal. A successful NAFTA re-work is a top priority for Mexican president-elect Lopez Obrador, and President Trump wants to walk away with a win for the U.S. economy as well. Watchers expect a deal in the next couple days.
Weather
The National Hurricane Center has nothing significant to report, however, Hurricane Lane is a Category 4 hurricane threatening the Hawaiian islands from Thursday to Sunday. (Projected path below; heading northwest and then east to west.)
REMINDER: This hurricane watch section will remain in this report through the end of the season. I check the latest from the National Hurricane Center each morning and will provide details as necessary.
Drought conditions persist across much of the Southwest. This map is updated every Thursday.
What I’m Looking at this Morning
ACLU: Alex Jones banning sets dangerous precedent
President declares Hawaii an emergency
Notable Quotable
“Distrust [between U.S. and North Korea] is still a dominant factor in the situation…Misperception is yet another—the actions taken by one party are not understood the way they were intended to be by the actor.” – Gen. Vincent Brooks, Commanding, U.S. Forces – Korea
