- Thomson Reuters
FBI special counsel Robert Mueller has reportedly enlisted New York Attorney General Eric Schneiderman to help investigate President Donald Trump’s former campaign chairman Paul Manafort for possible financial crimes and money laundering.
The clearest implication of the powerhouse merger, first reported by Politico, is that Manafort wouldn’t be immune from criminal prosecution even with the possibility of a pardon from Trump.
It is unclear whether Schneiderman is investigating any other New York-based Trump associates under scrutiny by the FBI, such as Trump’s son Donald Jr. or his son-in-law, Jared Kushner. But Trump has tweeted in the past that he has complete pardon power, which he would likely use on his family and loyal political allies – as he did with former Arizona Sheriff Joe Arpaio – before anyone else.
Mueller seems to be preparing for that possibility by lining up “potential state prosecutions in states where these folks may have violated state law,” former FBI agent Asha Rangappa, now an associate dean at Yale Law School, wrote on Wednesday night.
“There’s a legal principle called ‘dual sovereignty’ [which] means that for purposes of criminal prosecution, the state and federal government are separate sovereigns and concurrent jurisdiction,” Rangappa said. “Technically speaking, BOTH the federal government and a state (or multiple states) can prosecute on the same set of facts if those facts would constitute a crime in their respective jurisdictions.”
Rangappa also said the “bulk of criminal law belongs to the states,” which have “broad power to criminalize behavior.”
Jens David Ohlin, a professor at Cornell Law School, said in an email Wednesday that state and local convictions can only be pardoned by a governor, not the president. “So the possibility of a state criminal prosecution may turn out to be the best way of constraining this administration,” Ohlin said.
- Mike Segar/Reuters
Former New York Attorney General Bob Abrams, a key member of Scheiderman’s transition team after his election, described the partnership as “a very significant development.”
“It is always noteworthy and positive when federal and state regulators cooperate with one another,” said Abrams, who served between 1979 and 1993. “I don’t know whether this is specifically an attempt to shield the investigation from the presidents pardon power, but I believe that if there are potential crimes to be pursued under New York state law, it is perfectly appropriate for the attorney general to be investigating and cooperating with federal investigators.”
One precedent for this kind of arrangement, Abrams said, was his own partnership with Rudy Giuliani when Giuliani was the US attorney for the Southern District of New York. Abrams teamed up with Giuliani in the late 1980s to investigate Harry and Leona Helmsley for tax evasion.
Mueller and Schneiderman are reportedly examining how much Manafort was paid for his decade-long role as a top adviser to Ukraine’s pro-Russia Party of Regions and its ousted leader, Viktor Yanukovych. His tendency to form shell companies – while not illegal – to purchase real estate has also raised questions about the source of his cash and where he is putting it.
Manafort was associated with at least 15 bank accounts and 10 companies in Cyprus, dating back to 2007, NBC reported in March. One of those companies, PEM Advisors Limited, was paid nearly $20 million by Russian billionaire Oleg Deripaska as part of a business partnership between Deripaska and Manafort that ultimately fell through.
Manafort has insisted that he has never received any illicit cash payments. But he has a “pattern” of using shell companies to purchase homes “in all-cash deals,” as WNYC has reported, and then transferring those properties into his own name for no money and taking out large mortgages against them.
Those include his Trump Tower apartment in Manhattan, which he bought in 2006 via “John Hannah LLC”; a condo in lower Manhattan that he bought in 2012 via “MC Soho Holdings LLC”; and a Brooklyn townhouse that he bought in 2013 via “MC Brooklyn Holdings.” The loan for the townhouse at 377 Union St. was personally guaranteed by his son-in-law, Jeff Yohai, and his daughter, Jessica.
“Much of what is alleged happened in New York, so [Mueller] is coordinating with NY law enforcement,” said longtime federal prosecutor Renato Mariotti, who argued that it was “not surprising” to see Mueller and Schneiderman teaming up.
“As special counsel, Mueller has the powers of a ‘United States Attorney’ – the chief federal prosecutor in a jurisdiction,” he said.
Federal prosecutors “routinely communicate” with their state counterparts, Mariotti said, and the US attorney’s manual outlines the proper procedure for disclosing grand-jury evidence to state and local law enforcement.