The Outsider Perspective Issue 94

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Good Friday Morning! Between Iran and North Korea, it feels like American foreign policy under Trump will get defined what the Presidents actions in 2018. The Soviets defined Reagan. The aftermath of the USSR defined George H. W. Bush. Clinton by the Balkans. George W. Bush by 9/11. And Obama by Libya, Syria, ISIS, and Russia. Trump’s decision to pull out of the Iran Deal and plan a summit with North Korea will define the rest of his Presidency.

I have a column coming out today for the Conservative Institute on why pulling out of the Iran Deal was a good choice. Withdrawing frees the US up to contain Iran and gives us options in the region. And when Israel and Saudi Arabia are acting militarily against Iran, you need options.

I’m skipping North Korea this week. I think its too early to have any specific ideas on what will happen there until more details emerge. Details are scarce at the moment, and there’s no telling what will happen with Trump. The release of three hostages is terrific news, but at the same time, I don’t like the praise Trump is giving Kim on that point. I suspect the odds are high Trump cuts a deal with Kim, but I remain skeptical it will be a good deal, just because of the Kim regime’s bad dealings in the past. There are just too many variables at the moment to successfully analyze North Korea.

I am going to touch on two stories, the first an update on the Stormy Daniels/Michael Cohen case. If I’m right about Stormy Daniels lawyer, he’s acting unethically with bank records. Also in the legal news was the fall of New York Attorney General Eric Schneiderman, who is the latest person uncovered by the #MeToo movement. Links follow.

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New Israeli evidence exposes the many liars behind Iran Deal

When it comes to questioning whether or not we need the Iran Deal, we didn’t need new evidence saying it got sold on Iranian lies. We didn’t need more proof that the status quo before the deal was better than a lousy deal. And we didn’t need Israel to smuggle hard evidence out of Iran to know the full scope of Iran’s lies.

But we’ve been supplied more evidence, from Israeli spies operating in Iran. And that evidence underscores the lies and state-sponsored manipulation used to force the deal on the United States.

Population bombs don’t exist, for the Avengers or in reality

The last few weeks have marked the anniversaries of two infamous events. The world just witnessed the 200th birthday of Karl Marx, and all the destruction wrought from his utopian fantasies.

It’s also the 50th anniversary of the release of The Population Bomb, a book by Stanford biologist Paul Ehrlich. And while the brutalism done in the name of Marx is well-documented, less is said of the cruelty done in the name of Ehrlich.

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How did Michael Avenatti Get the Bank Reports?

Michael Avenatti is the lawyer for Stormy Daniels. You’ve probably seen him all over cable news lately. His most recent splash is two-fold. First, he claimed to have evidence that Michael Cohen, the former personal attorney for Trump, was operating a pay-to-play scheme, which also paid for the Stormy Daniels pay-off.

Avenatti’s assertions that Cohen’s side-business was explicitly built to pay for Daniels $130,000 seems far-fetched. Avenatti’s wants his client connected to this story. It seems more likely that Cohen was selling himself as a person with access to Trump and could provide information or lobbying expertise for a price. Several large companies admitted they used Cohen for this exact reason. It’s too early to tell if any of this was illegal at this stage because not enough evidence has surfaced.

Avenatti based his claims based on banking records that had been flagged with Suspicious Activity Report, or SAR. I deal with these as a lawyer all the time in discovery when banking records are involved. Under CFR 21.11, a SAR report is described:

[N]ational banks file a Suspicious Activity Report when they detect a known or suspected violation of Federal law or a suspicious transaction related to a money laundering activity or a violation of the Bank Secrecy Act.

Generally speaking, no one at a bank, employee, agent, or anyone connected can reveal the existence or non-existence of a SAR. The law is designed to help law enforcement track down suspicious deals, and the Feds don’t want potential suspects knowing that the government is monitoring suspicious transactions. There are severe penalties for those involved in banking if a SAR is made public, or if a person does not have a SAR report attached to their name.

I lay that groundwork, and underline that SAR is very serious, to highlight a Washington Post story that says the OIG of the Treasury Department has launched an investigation into potential leaks of the Cohen SAR:

The Treasury Department’s inspector general is investigating whether confidential banking information involving a company controlled by President Trump’s personal attorney Michael Cohen was leaked, a spokesman said.

Detailed claims about the company’s banking history were made public Tuesday by Michael Avenatti, an attorney for Stormy Daniels, the adult-film star who was paid $130,000 by Cohen’s company shortly before the 2016 election to keep quiet about her alleged affair with Trump.

Inspector General Eric Thorson, who operates independently of the agency’s political leadership, launched the probe in response to media reports, said counsel Rich Delmar. It might — or might not — answer a question that was the source of much speculation Wednesday: How did Avenatti come into hard-to-get information touching on some of the most sensitive issues before the White House, including the probe led by special counsel Robert S. Mueller III?

The million dollar question is how did Avenatti get SAR information to start blaring across TV and his website? If a bank employee did it, they would face legal penalties, no question. Avenatti shouldn’t fall under the SAR designations here, but his decision to blast SAR information across all media comes across as highly unethical. Caroline Court, a federal defense lawyer, thinks similarly along these lines and dug up the California Rules for Professional Conduct for lawyers:

As I read more and more about Avenatti and his theatrics, I harken back the Rules of Professional Conduct. Every state has its own set of rules that govern the conduct of lawyers and dispense discipline as appropriate. It’s not far-fetched to believe that Avenatti may have violated the state of California’s Rules of Professional Conduct.

Rule 5-120 covers “Trial Publicity.” In layman’s terms, a lawyer can make general statements about a case, but cannot make statements outside of court that may be detrimental or cause harm to a pending litigation. (For the lawyers reading this, the language is “substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”)

I have a hard time believing that Avenatti’s three-ring circus and personal and professional attacks on Cohen do not violate this rule. Notably, one of the considerations is whether the statements made outside of court include information the attorney knows is false or deceptive. California’s Business and Professions Code also provides that it is a lawyer’s duty to maintain the respect due to the courts of justice and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he or she is charged

Here’s the thing, a SAR report is a notification to the government that something may require investigation. And if the government was investigating this SAR report, Avenatti’s blasting of the information affects the probe. If he went a step further and encouraged some bank employee to violate the law in the process, that’s beyond the pale.

I don’t know what he did to procure the information. He’s suggesting that a bank employee risked their careers to reveal highly sensitive SAR material to a porn star’s lawyer. That doesn’t seem likely.

So how did Avenatti get the information? We don’t know. We don’t understand why the government had these reports marked as SAR. But that will come out because the government is highly protective of SAR laws. Watch for an OIG report.

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#MeToo Takes Down New York’s Attorney General

Ronan Farrow broke the initial story on Harvey Weinstein that set off the #MeToo movement. His latest story is titled: “Four Women Accuse New York’s Attorney General of Physical Abuse. Eric Schneiderman has raised his profile as a voice against sexual misconduct. Now, after suing Harvey Weinstein, he faces a #MeToo reckoning of his own.”

Three hours after Ronan Farrow and Jane Meyer broke that story, Schneiderman resigned in disgrace.

It’s weird that the person tasked with prosecuting people like Harvey Weinstein also had multiple skeletons in his closet. Not only is the #MeToo movement cleaning out culture and society, but it’s even wiping out the people tasked with enforcing the laws of the nation.

On a recent podcast of The Editors, put out by National Review, Michael Brendan Dougherty made an astute observation. He pointed out how in culture, it’s long been the practice for comedians and others to point to the hypocrisy of evangelicalism on topics like sexuality or homosexuality. Secular culture likes to claim that the loudest proponents of traditional values are also the ones most likely to fall into hypocritical behavior.

In the same way, we’re witnessing a similar trend in the #MeToo movement. Those who are the loudest and most prominent parts of the progressive feminist movement are also among the darkest monsters. One victim in Farrow’s story describes that dynamic:

Schneiderman’s activism on behalf of feminist causes has increasingly won him praise from women’s groups. On May 1st, the New York-based National Institute for Reproductive Health honored him as one of three “Champions of Choice” at its annual fund-raising luncheon. Accepting the award, Schneiderman said, “If a woman cannot control her body, she is not truly equal.” But, as Manning Barish sees it, “you cannot be a champion of women when you are hitting them and choking them in bed, and saying to them, ‘You’re a fucking whore.’ ” She says of Schneiderman’s involvement in the Weinstein investigation, “How can you put a perpetrator in charge of the country’s most important sexual-assault case?” Selvaratnam describes Schneiderman as “a Dr. Jekyll and Mr. Hyde” figure, and says that seeing him lauded as a supporter of women has made her “feel sick,” adding, “This is a man who has staked his entire career, his personal narrative, on being a champion for women publicly. But he abuses them privately. He needs to be called out.”

And another said:

After the former girlfriend ended the relationship, she told several friends about the abuse. A number of them advised her to keep the story to herself, arguing that Schneiderman was too valuable a politician for the Democrats to lose. She described this response as heartbreaking. And when Schneiderman heard that she had turned against him, she said, he warned her that politics was a tough and personal business and that she’d better be careful. She told Selvaratnam that she had taken this as a threat.

The former girlfriend told Selvaratnam she found it “shameless” that Schneiderman was casting himself as a leading supporter of the #MeToo movement. She promised to support Selvaratnam if she spoke out, but she wasn’t sure that she could risk joining her. The former girlfriend told Selvaratnam she’d once been so afraid of Schneiderman that she’d written down an extensive account of the abuse, locked the document in a safe-deposit box, and given keys to two friends.

Note the language and description, people who knew of Schneiderman’s abuse viewed his as indispensable in politics. That should destroy any remaining illusions on what is essential for many of these groups — power and access.

In a related note, having people with clear conflicts of interest investigation these #MeToo cases is a bad idea. I don’t know how you ultimately clean everything up, but it does require cleanup. An example of the worst way to do that is NBC, who decided they did nothing wrong with Matt Lauer:

An internal investigation by NBCUniversal has found no evidence that NBC News executives or senior management knew of any misconduct by “Today” show anchor Matt Lauer prior to a complaint in November of inappropriate behavior with a female colleague that led to his firing.

The report, a summary of which was released Wednesday morning, also determined that there isn’t believed to be a systemic culture of inappropriate behavior and sexual harassment at NBC News. The internal probe was conducted by NBCUniversal’s general counsel, Kim Harris.