Category: Transparency

White House Accused of Blocking Information on Bank’s Trump-Russia Links

The White House has been accused of withholding information from Congress about whether Donald Trump or any of his campaign affiliates have ever received loans from a bank in Cyprus that is partly owned by a close ally of Russian president Vladimir Putin.

A group of Democratic senators have been waiting for two weeks for Wilbur Ross, a billionaire investor who has served as vice-chairman of the Bank of Cyprus since 2014, to answer a series of questions about possible links between the bank, Russian officials, and current and former Trump administration and campaign officials. Ross also received a second letter on Friday from Senator Cory Booker of New Jersey with more detailed questions about possible Russia links.

But in a speech on Monday night, just before the Senate voted to approve Ross’s nomination as secretary of the commerce department, Senator Bill Nelson of Florida said the White House “has chosen to sit on” a written response by Ross to some of those questions even though Ross told the senator he was eager to release his response.

Nelson, the top Democrat on the Senate commerce committee, said in a speech on the Senate floor that other senators were “troubled and frustrated” by the White House move. Nelson said it had been “verbally reiterated” to him by Ross that the commerce department nominee was not aware of any “loans or interactions” between the Bank of Cyprus and the Trump campaign or Trump Organization.

Ross, a private equity investor who has said he would step down from the bank after his final confirmation, had also been asked to provide more details about his own relationship with previous and current Russian investors in the bank, including Viktor Vekselberg, a longtime ally of the Russian president, and Vladimir Strzhalkovsky, the former vice-chairman of Bank of Cyprus who is also a former KGB agent with a close relationship to Putin.

Ross also told Nelson that he had one meeting that lasted about an hour with a Russian investor in the bank in 2014, but no other details were provided.

“I believe him in what he has told me, that it is true to his belief,” Nelson said in a speech on the Senate floor. “I want to say, at the same time, the White House and the way they have handled this matter is not doing Wilbur Ross any favors.”

An attorney for Ross said he was not handling the matter and referred questions about the issue to the commerce department, which declined to respond .

The senators’ scrutiny of Ross’s ties to Bank of Cyprus comes as the Trump administration faces several investigations, including by the FBI, into possible links between Trump campaign officials and Russia.

The first letter, sent on 16 February, was led by Senator Bill Nelson of Florida, the top Democrat on the Senate commerce committee, and was co-signed by Cory Booker of New Jersey, Ed Markey of Massachusetts, Tom Udall of New Mexico and Tammy Baldwin of Wisconsin.

Details of the letter were first reported by McClatchy, the US news organisation.

Among other questions, the letter asked Ross if he was “aware of any contacts between any individuals currently or formerly associated with the Bank of Cyprus and anyone affiliated with the Trump presidential campaign or the Trump Organization”. It also asked whether Ross was “aware of any loans made by the Bank of Cyprus to the Trump Organization, its directors or officers, or any affiliated individuals or entities”.

A second letter sent by New Jersey senator Cory Booker said the list of Russian businessmen with ties to both Putin and the Bank of Cyprus was “startling”.

“The American public deserve to know the full extent of your connections with Russia and your knowledge of any ties between the Trump administration, Trump campaign or Trump Organization and the Bank of Cyprus,” Booker wrote. “Americans must have confidence that high-level officials in the United States government are not influenced by, or beholden to, any foreign power.”

Among Booker’s list of 11 questions was a demand to know more about if – and when – Ross first learned about Strzhalkovsky’s ties to the KGB, and whether the former KGB official ever met Trump.

Booker also asked Ross whether he had any knowledge about the 2008 purchase of Trump’s Palm Beach home by Dmitry Rybolovlev, a Russian billionaire and investor in Bank of Cyprus. The beach house was reportedly sold for $95m.

Ross’s nomination to lead the commerce department has so far been relatively uncontroversial, in part because Ross is liked by Democrats and labour unions who credit the private equity investor with saving tens of thousand of jobs in the steel industry after buying up bankrupt steel companies in 2002.

But Ross’s 2014 investment in the Bank of Cyprus has received little public attention amid the broader concerns in Washington over the Trump administration’s potential ties to Russia.

During a nearly four-hour confirmation hearing in January before the Senate commerce committee, Ross was not asked any questions about his involvement in a €400m ($424m) investment in the bank in 2014, which gave Ross’s investment group an 18% stake in the bank.

Ross recruited a high-profile banker with close ties to Russia, former Deutsche Bank chief executive Josef Ackermann, to serve as chairman of the bank. In a 2015 interview with the New York Times, Ackermann suggested his work for the Bank of Cyprus was an effort to “give something back to the people”.

In his letter, Booker asked Ross to explain why he had appointed Ackermann as chairman of the bank, noting that Deutsche Bank is the Trump Organization’s largest creditor.

Ross’s investment followed a controversial 2013 bailout of the bank at the height of the European debt crisis that was agreed by the EU, IMF and European Central Bank. At the time, the deal was scrutinised by German politicians who expressed concern that taxpayer funds were being used to bail out a money laundering haven used by Russian oligarchs. A German intelligence report cited by Der Spiegel at the time suggested that Russian deposits in Cyprus banks were worth between €8 to €35bn ($8.5 to $37bn).

(h/t The Guardian)

Trump Told Weeks Ago That Michael Flynn Withheld Truth on Russia

President Trump was informed weeks ago that his national security adviser, Michael T. Flynn, had not told the truth about his interactions with Russia’s ambassador and asked for Mr. Flynn’s resignation after concluding he could not be trusted, the White House said on Tuesday.

At his daily briefing, Sean Spicer, the White House press secretary, said the president’s team has been “reviewing and evaluating this issue on a daily basis trying to ascertain the truth,” and ultimately concluded that while there was no violation of law, Mr. Flynn could no longer serve in his position.

“The evolving and eroding level of trust as a result of this situation and a series of other questionable incidents is what led the president to ask General Flynn for his resignation,” Mr. Spicer said.

(h/t The New York Times)

Trump Staffers Using App That Deletes Their Messages

Trump administration staffers are reportedly communicating by using an encrypted messaging app that erases messages shortly after they have been received.

The Washington Post reported on Tuesday that officials were using the app, called Confide, to avoid being caught talking to the media, as President Trump moves to crack down on leaks.

The Post report followed a report from Axios last week that reported Confide had become a favorite app for Republican staffers.

Staffers may also be concerned about being hacked after high-profile cyber attacks on Democratic groups during the election.

“We do see a spike in across the board metrics when there is a major news cycle about the vulnerability of digital communications,” Jon Brod, Confide’s president, told Axios.

The reports raise questions though about the possible violation of federal records keeping laws that require certain government employees to use their official email address for communications.

“The whole f—ing campaign was about Hillary’s emails and now Trump’s team is violating the Presidential Records Act by using Confide,” tweeted former Obama staffer Tommy Vietor.

A White House spokeswoman did not immediately respond when asked to comment on the reports.

(h/t The Hill)

Ivanka Trump’s Presence at Meeting With Japan’s Leader Raises Blind Trust Questions

President-elect Donald Trump has repeatedly said that there would be no conflicts of interest during his administration because his vast business empire would be in a “blind trust.” But White House ethics lawyers in both parties have criticized that, noting that having his children run the company means it would be neither blind nor a trust.

The very first meeting that the President-elect held with a world leader, Japanese Prime Minister Shinzo Abe, is prompting further criticism—even alarm. According to photographs taken at Trump Tower in New York City and published this week, the session was attended by Ivanka Trump, who has no government security clearance and is an executive at the Trump Organization.

“This is not the way we behave in the world’s leading constitutional democracy,” says Norman Eisen, special counsel and ethics adviser to President Barack Obama between 2009 and 2011. “It’s like something out of a tin-pot oligarchy.”

Members of the press were also barred from the meeting, adding to building criticism that a President Trump will not honor White House traditions of transparency. Ivanka Trump’s presence apparently only became public because the Japanese government released photos; it is not clear whether she was present for the entire meeting.

Meanwhile the New York Times reports that Jared Kushner, Trump’s trusted son-in-law, consulted a lawyer to find out how he could join Trump’s forthcoming administration without running afoul of federal laws prohibiting nepotism. Kushner was also present at the Abe meeting, according to another photo published by Reuters and the Japanese government. He too lacks government security clearance.

In an interview with Fortune, Eisen says Ivanka Trump and Kushner’s apparent presence at Trump’s first face-to-face meeting with the leader of one of our key allies was “shocking” and unprecedented. “If you’ve got one member of the power couple—Jared Kushner, whispering in the President[-elect]’s ear—and if you’ve got the other, the wife and daughter, who is running businesses, it merges the Trump Organization and the United States into one huge conglomerate managed by the Trumps for their own interests,” he says.

He adds that the fear is that their involvement will turn “our intelligence community into a management consulting firm for the Trump family business. That can’t be right. Ivanka must go, and Kushner can’t stay.”

Eisen and Richard Painter, White House ethics adviser to President George W. Bush between 2005 and 2007, on Tuesday wrote an op-ed in the Washington Post urging Trump to put his “conflict-generating assets in a true blind trust run by an independent trustee.”

Unlike most other federal employees, the President of the United States isn’t bound by the federal conflict of interest law. But Eisen tells Fortune that several lawyers, including those who are part of the Republican party, are “worried about this unprecedented blurring of lines” and President-elect Trump should “expect massive litigation if he proceeds on this collision course.”

(h/t Fortune)

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