As Donald Trump tours the world, Saudi Arabia is in the midst of a political purge within the ranks of the royal family. This week on Intercepted: Trump doubles down on his support for the ruling faction in the House of Saud as its genocidal war in Yemen rages on and its public listing of oil company Saudi Aramco could be worth $2 trillion. Rep. Ro Khanna tells us that he is now calling for a complete end to all U.S. military assistance to Saudi Arabia. He also discusses the horrendous catastrophe in Yemen, charges of Russian interference in the U.S. election, and the state of the Democratic Party. The former chief prosecutor at Guantánamo Bay prison blasts Trump over his repeated interference in the case of Army Sgt. Bowe Bergdahl and the recent terror attack in New York. Col. Morris Davis fought the Bush administration, was fired under Obama, and now shares his views of the history and presidents of the past 17 years. As the Paradise Papers rock the world of the rich and the elite who use off shore banks and law firms, we get analysis from Nomi Prins, a former managing director of Goldman Sachs. Prins also lays out the bottom line on the GOP tax plan. And Jeremy offers a commentary on the value of “whataboutism.”
Tucker Carlson: Ivanka Trump cut out of her father’s Asia trip early to come back and make the case for the Republican Party’s tax reform plan. Here’s part of our conversation. Watch.
TC: If I ran into you in an elevator, and we had like two floors for you to make your pitch for the tax plan, what would it be?
Cher (Alicia Silverstone in Clueless): So, OK. Like, right now for example Haitians need to come to America. But some people are all, “What about the strain on our resources?” But it’s like, when I had this garden party for my father’s birthday, right? I said RSVP because it was a sit-down dinner. But people came to that like did not RSVP, so I was like totally buggin’.
I had to haul ass to the kitchen, redistribute the food, squish in extra place settings. But, by the end of the day it was like “the more the merrier.” And so, if the government could just get to the kitchen, rearrange some things, we could certainly party with the Haitians.
TC: That’s a pretty good pitch.
Cher: Thank you.
TC: We also sit down the treasury secretary, Steve Mnuchin.
TC: Mr. Secretary, thanks for joining us.
Steve Mnuchin: Thank you.
TC: How did this plan address the concerns of the American middle class?
SM: We’re cutting out the middle class in mostly every single part of this country. So, this is all about rich people, cutting business taxes, trillions of dollars and that’s what you’re going to see: $3 trillion at least. The president thinks it could be four or five.
TC: Mr. Secretary, thank you.
SM: Thank you.
[“Opportunities (Let’s Make Lots of Money)” by Pet Shop Boys]
Jeremy Scahill: This is Intercepted.
JS: I’m Jeremy Scahill coming to you from the offices of The Intercept in New York City and this is episode 35 of Intercepted.
DJT: What about the alt-left that came charging at the, as you say, the alt-right? Do they have any semblance of guilt?
JS: Before we get started with the program today, I want to address a line of argument that has become pervasive in today’s politics and it centers around this concept known as whataboutism. I am not talking about the terrible idiotic manner that Trump justifies neo-Nazis, mass-shootings —
DJT: We have a lot of mental health problems in our country as do other countries, but this isn’t a guns situation.
JS: — even the murderous history of Vladimir Putin.
DJT: Will I get along with him? I have no idea.
Bill O’Reilly: But he’s a killer though. Putin’s a killer.
DJT: Lot of killers. We’ve got a lot of killers. What? You think our country is so innocent?
JS: By the way, in this case, what Trump said about Putin and other world leaders? He’s right. But in general, Trump’s whataboutisms are more crass — a blunt attempt to literally change the subject. What Trump regularly does is basically just asking people to ignore whatever negative attention he is rightly being given, and instead focus on someone else’s controversies, both real and imagined. He is certainly doing that in responding to Robert Mueller’s investigation into his campaign by openly saying that “the FBI should really be investigating Hillary Clinton.” He’s not saying “Yeah investigate me and potential connections of my campaign staff to Russia and also investigate Hillary Clinton and the DNC and the Clinton Global Foundation. He is saying “don’t waste any time investigating me and this Russia stuff. Instead go after Hillary Clinton.
So that’s not what I want to actually talk about today. What I want to talk about is something different. It is how this allegation of whataboutism is used consistently these days by opponents of Donald Trump, particularly partisan Democrats, in an effort to shut down discussion of U.S. misdeeds or crimes throughout history or about the policies of President Obama, or Hillary Clinton when she was Secretary of State, and the Democrats writ large. Whataboutism is being portrayed as an old Soviet tactic and anyone caught using it is a suspected Bolshevik agent in today’s media climate. No doubt that the Soviets did in fact use this tactic, but so too has the U.S. Over and over and over. In fact, it is present in every war that the U.S. is involved with. Yes, we kill civilians, but we don’t mean to. We’re not like Russia in Chechnya. Yes, we invade countries and kill innocent people but what about the crimes of their leaders of those countries? Remember when Bush’s WMD argument fell apart?
GWB: The main reason we went into Iraq at the time was we thought he had weapons of mass destruction, turns out he didn’t but he had the capacity to make weapons of mass destruction — But I also talked about the human suffering in Iraq. And I also talked about the need to advance the freedom agenda. And so, my answer to your question is that imagine a world in which Saddam Hussein was there stirring up even more trouble in a part of the world that —
JS: He then shifted to, well, Saddam was a tyrant so it was good we overthrew him. Same with Qaddafi in Libya. And on and on and on. So, no, this is not simply a Soviet tactic and smearing people with that charge is disgraceful.
Now, for those of you who are lucky enough not to have been in a political argument recently, here is an example of what I am talking about: The Democrats allege that Donald Trump conspired with Russia and that the Russians used hacking in an effort to sway the U.S. elections in Trump’s favor. In response to this, I say, “Well yeah, I want all of that investigated and exposed. And I want anyone who was engaged in criminal conduct to be held responsible.” OK. Everything’s fine.
But then I also point out that the US often finances and supports so-called opposition politicians around the world, including those battling against Russian-preferred candidates, and that the U.S. also has a very long history of interfering in other countries’ elections, including overthrowing popularly elected governments, assassinating foreign leaders. That is where I cross the line. I can now be dismissed as engaging in whataboutism. End of discussion.
There are a lot of problems with this dynamic. First of all, I want the allegations about Russia and the Trump campaign investigated thoroughly. But just because I cite US history and the global context does not mean that I am excusing the actions of the Russian government. The point is to understand the context. The allegations about Russian interference are often presented today as though Russia invented electoral interference and launched its beta version with Donald Trump’s presidential campaign. That’s just false and it does a disservice to all of us, as a purportedly Democratic society, to act as though this is not how governments across the world do business, including the U.S. government. All the time.
When you look at this current scandal or investigation through the lens of the historical and geopolitical context, taking into account recent events with the US and Russian governments, and the proxy wars in places like Georgia and Ukraine, then Russia doesn’t appear as some outlier with its election interference. Instead, it rightly appears as what it is — a powerful nation wrongly interfering in the elections of its adversaries as part of a geopolitical war, just as the U.S. does. It is actually quite relevant to understanding why this will continue to happen in the U.S. and around the world over and over and over. As it has for many decades and in some cases, centuries. And here is perhaps the most important aspect of all of this: We have no credibility to condemn nations that seek to influence our elections or our affairs because we do it constantly on a global scale. We have no moral high ground. Yes, we should try to stop it, as other nations should do when we are the culprits. But facts are facts and not a KGB plot.
This smearing as an agent of whataboutism is constantly deployed these days when you try to point out that the Democrats either legislated or gave support to a whole range of policies that are in fact anti-democratic or racist or war mongering. That Trump did not appear out of a vacuum. Don’t mention Obama and drone strikes. Don’t mention Democrats and regime change. Don’t mention Obama’s sweeping terror watch-list. That’s whataboutism and, according to its critics, it is somehow helping Trump.
Consider this: Is it wrong to point out the hypocrisy of televangelists and right-wing fire and brimstone preachers or republican politicians who rail against women and gay people but secretly have sex with men, or cheat on their wives, or do drugs? Of course not. It is right to point out their utter hypocrisy of these people because it is relevant to their stated principles. The same is true in the foreign affairs of the U.S. government.
Also, this dismissive label of whataboutism: it’s not new. In fact, the famed arch conservative William F Buckley had a particular passion for using the charge of false moral equivalency to absolve the U.S. of all sorts of crimes. during the cold war. Buckley famously said:
“To say that the CIA and the KGB engage in similar practices is the equivalent of saying that the man who pushes an old lady into the path of a hurtling bus is not to be distinguished from the man who pushes an old lady out of the path of a hurtling bus: on the grounds that, after all, in both cases someone is pushing old ladies around.” Those are the words of William F Buckley.
Now, Buckley’s apologetics for the CIA are well known and his point is based entirely on fiction. The CIA during the Cold War was assassinating people, overthrowing governments, spying domestically against U.S. citizens, running death squads, and illegal secret wars, and on, and on. I don’t know who was worse, the CIA or the KGB, but does anyone really believe that one was pure and the other evil incarnate? Come on. When it boils down to it, they were both legitimized assassination squads wrapped in the flags of their respective empires. And this has been the American argument for decades. America is the exception and is never like its enemies even when it gratuitously kills civilians, or invades countries. or tortures people, or drops atomic bombs or supports dictators. It is always with the best of intentions, “in the name of humanity” and therefore, somehow OK. That was Barack Obama’s argument as much as it was Dick Cheney’s. And today you can find it on MSNBC and from a host of liberal news organizations when discussing Trump and the 2016 elections.
Chuck Todd: The idea of doing something because it’s the morally the right thing to do, but there really is no — other than good will, or in that area, or there’s no tangible gain for the United States or for the Western world — what does that mean? That means never intervening in a humanitarian crisis?
Masha Gessen: Right unless we can take the oil.
JS: The Washington Post recently ran a story saying that whataboutism calling it a Soviet tactic from the Cold War that was thawed out by Putin and is now being used by Trump. Literally everything has to connect to Russia. It is really insane.
The other aspect of this is this idea that somehow George W Bush is all of a sudden a great friend of the #Resistance because he didn’t vote for Trump and has said a few critical things about Trump. Let’s be clear here: George W Bush presided over wars that killed hundreds of thousands of innocent people. They ran a global torture program. They said the Geneva conventions were quaint. They warehoused people at Guantanamo. But point this out online in response to someone praising George W Bush for not voting for trump and you are bound to get immediate pushback from someone saying “Hey, Trump is unprecedented, we need all hands on deck and we have to be able to see the utility of alliances even with people like Bush. It’s necessary to defeat this unprecedented threat posed by Trump.” Somehow David From and Bill Kristol and George Bush: they’re our friends. I reject that completely. You cannot erase the murderous past of George W Bush and his allies and act like all that matters is opposing Trump. Without a whataboutism in that conversation, it is a vapid, bankrupt embrace of a man who destroyed literally countless lives across this planet. I wouldn’t embrace Charles Manson as my ally if he published an op-ed calling for Trump’s impeachment. No thanks. The leader of the Democrats in the House, Nancy Pelosi, has said she prays that George W Bush was still president.
Nancy Pelosi: So sorry president Bush, I never thought I’d pray for the day that you were president again.
JS: Chuck Schumer said Bush’s response to 9/11 was worthy of praise. And Keith Olbermann, he’s one of the leading #Resistance generals, he actually went on TV, on the View, and apologized to Bush!
Keith Olbermann: Probably owe George W Bush an apology and I would happily take a third term of George W Bush rather than this —
JS: History matters. Context matters. Part of why the U.S. war machine keeps going unchecked at Mach speed is because of the mythology that has been aggressively promoted by Democrats and Republicans alike and that every child in this country is taught from the time they start going to school. That’s why we got the PATRIOT Act, that is how we got the 2001 Authorization for the Use of Military Force — that gave a blank check for global, borderless, unaccountable war — that is how we got the Iraq war. It was all bipartisan and done in the name of protecting our security and protecting our exceptionalism. That is why the US has constantly blocked the establishment of an International Criminal Court that would have jurisdiction over all nations, including the United States, when its forces commit war crimes. But Our lives are worth more, our crimes matter not at all. It all boils down to this demonstrably false notion of American exceptionalism. Donald Trump is a horrid president and has shown fascist and authoritarian intent in both his words and policy ideas.
But let’s not pretend that he is some alien who landed here speaking a different language. Mostly Donald Trump’s crimes consist of saying things out loud that a lot of right wingers prefer to be whispered in private. Or of trying to impose destructive policies by fiat that a lot of Republicans want but can’t exactly get through Congress. And Trump definitely acts as an oligarch and he certainly has aspects of his presidency that are unique just to him. But Trump has not yet killed anywhere close to the number of innocent people that Bush and Cheney killed. Now he may well surpass them, but he has a long way to go. Obama maintained a secret kill list and asserted the right to kill American citizens who had not even been charged with a crime. That is the epitome of acting like a king or an emperor. Trump is continuing a program Obama put on steroids for him. So, let’s stop with this revisionism. And I am perfectly fine with whatabouting anyone who tries to tell me that Bush is our ally. The correct answer is “what about all of the people he killed? What about the damage he did to our civil liberties and security? What about your own conscience getting into league with someone viewed by many across the globe as a war criminal?” Yeah, I’m guilty of whataboutism because facts matter, context matters. The truth matters.
If we, as a society, were actually honest about what happens in our wars, about who actually gets killed, how often we do the very things — albeit in our own American way — as those we condemn as despots or tyrants or terrorists, then the whole dialogue would change. We might actually learn from our own history. The same is true about the Democrats and their role in all of this. We should be talking about it all. So, let’s stop this bullshit of dismissing history and context from everything. Let’s have an honest conversation about the real policies and the real history of this country. Let’s talk about the wars, election interference, the way the U.S. economy functions — our health care, our schools, our housing, our guns, our prisons. From now on, when someone accuses you of engaging in whataboutism, just imagine that what they’re really saying is, “Shut up, I don’t want to hear inconvenient facts.” Imagine that is what they are saying because that is what they are really saying. And then decide how to respond.
Alright, on with the show.
JS: There is an intense situation unfolding in Saudi Arabia right now as Donald Trump continues his Asian tour. The Saudi crown prince, 32-year-old, Mohammed bin Salman, has led a campaign that’s ongoing to arrest, it appears, any potential rivals to his authority. At least 11 other princes and 38 other people have been arrested in recent days. And they are being held at a luxury hotel that recently had an image of Donald Trump projected onto it. That’s now become this makeshift five-star prison.
These arrests were all conducted by the Crown Prince’s anti-corruption force, the MBSs, but there’s little doubt about it that this is not actually about corruption. It’s about consolidating power and taking out potential enemies. It’s not just the five-star prison, but also the mysterious death in a helicopter crash of another prince.
For his part, Donald Trump has doubled down on supporting the House of Saud, saying they know what they’re doing. One of the princes currently in this hotel prison was a prominent critic of Donald Trump and a man who Trump, in 2015, called, “a dopey Prince trying to use Daddy’s money to control U.S. politicians.” Well, that guy is now out of your hair for the time being, president Trump.
Trump also has been lobbying the Saudis to list Aramco Oil Corporation on the New York Stock Exchange. It could result in the largest IPO in history, with estimates that the company could be valued at two trillion, with a T, dollars. Trump has also increased U.S. military sales to Saudi Arabia, he’s boasted about all the great weapons he is giving them. Saudi Arabia was the first country that Trump visited as president, remember that weird glowing orb incident?
But literally just months before that visit, and his chummy Lollapalooza of despots and kings, Trump was blaming the Saudis for 9/11:
Donald J. Trump: It wasn’t the Iraqis that knocked down the World Trade Center, we went after Iraq, we decimated the country, Iran’s taking over, okay — but it wasn’t the Iraqis. You will find out who really knocked down the World Trade Center, because they have papers that there that are very secret. You may find out it’s the Saudis, okay? But you will find out.
JS: And threatening to stop buying their oil. Now we see this total 180-turn from Trump, and he loves the Saudis and he trusts them, and he wants you to trust them, too.
There’s a whole debate right now in Saudi Arabia about modernization and issues like granting women the right to drive, and all of that is associated with this same young crown prince. But on the foreign policy side, this particular camp of powerful Saudis, they are the war-crime camp. They are the ones waging what can only be called a genocidal war in Yemen.
Juan Gonzalez: The number of cholera cases in that country has now topped 368,000, with 1,828 deaths. The World Health Organization estimates some 5,000 Yemenis are falling sick each day and Oxfam projects the number of suspected cases of cholera could rise to more than 600,000, making the epidemic, “the largest ever recorded in any country in a single year.”
JS: And that war has been aided and abetted by the U.S. and British governments. The Saudis have been a sort of sacred cow in U.S. politics, not unlike support for Israel. Democrats and Republicans have long bought into this notion that Saudi Arabia is a necessary ally in the war on terror. The great balancer against Iranian influence in the region, a key player in the fight against al Qaeda, but let’s be clear: if the Saudis were just producing a lot of olive oil instead of actual oil, they wouldn’t be important. They certainly wouldn’t be that important. Trump would not have visited Saudi Arabia first. Bush would not have held hands with Saudi officials, one of whom was actually nicknamed “Bandar Bush” because of how close he was to the Bush family. (And, as an aside, I’ve long said that I would not be shocked if we wake up one day to discover that there has been a coup or a revolution breaking out in Saudi Arabia. The place is locked down and ultra-secretive. Large parts of Saudi Arabia are like Albania under Enver Hoxha — nothing in, nothing out.)
In the midst of all of this and the ongoing Saudi carpet bombing of Yemen, a first-term U.S. Congress member has been spearheading an effort on Capitol Hill to ban any weapon sales or military support for Saudi Arabia that is going to be used in Yemen. That congressman is California Democrat Ro Khanna. And in an Intercepted exclusive, representative Khanna tells me that he is now calling for an end to all military assistance to Saudi Arabia. Period.
I began by asking him to lay out his case against U.S. military aid to Saudi Arabia.
Ro Khanna: Well it starts with recognizing that the greatest humanitarian crisis in the world right now is in Yemen. Almost a million people are suffering from cholera. Almost seven million may be exposed to the risk of famine. The largest port has been blocked by the Saudis and they’re not letting food and medicine to people who need them. So, it should stir the moral conscience of the world, and almost every person I’ve talked to in my district, or ordinary Americans when they find out about the crisis, want something done.
And one of the things the United States should do is stop refueling Saudi planes or assisting the Saudis with bombing the Yemeni civilians or strangle holding the port that’s preventing medicine and food from going there. So we should not in any way be aiding the Saudi efforts at bombing civilians there and we should work towards a political solution. And that’s really what our resolution does — it says we have no authorization of being involved in Yemen’s civil war and we should not be providing aid to the Saudis.
JS: I’ve spent a lot of time on the ground in Yemen and did a lot of reporting on various strikes under President Barack Obama, and so I wanted to ask you about this narrowing language in your resolution, saying you want to just target the strikes against al Qaeda in the Arabian Peninsula. When President Obama initiated this air war, both through drones and cruise missile attacks and also supporting the Saudis, it began in December of 2009, and there were several incidents where large numbers of civilians were killed during operations authorized by President Obama.
Are you concerned that, as you try to limit this to al Qaeda in the Arabian Peninsula, that it’s also going to leave the door open for more civilian deaths in the name of fighting Al Qaeda in the Arabian Peninsula?
RK: Right now, we are engaged in activities that has no authorization of force by Congress. So, you can make an argument that the 2001 authorization of force allows the United States to engage in counterterrorism operations. Right now, we’re engaged in helping the Saudis in their fight against the Houthis, which clearly doesn’t fall within the 2001 authorization.
Second point is my understanding of the situation is it’s really the Saudi campaign against the Houthis that has led to a large part of the civilian casualties and that the Saudis are not nearly as careful in their standards as we are in trying to take into account civilians, and making sure that we don’t have a civilian loss of life.
If the question is: “Do we as a nation need to do even more to make sure when we are engaged in counterterrorism operations around the world and engaged in drone strikes that we are sensitive to civilian casualties and really sensitive to not perpetuating cycles of violence?” Absolutely we do. And that’s a broader debate. But right now, this resolution is focused on making sure we don’t engage even further in Yemen and increase civilian casualties by aiding Saudi Arabia.
JS: Have you asked Secretary Mattis or other U.S. military or diplomatic officials about this U.S. campaign of supporting what is ultimately a Saudi destruction of Yemen?
RK: I have and they have acknowledged that we have, in the past, engaged in refueling. We had a huge breakthrough in the House where the military briefed the leadership staff. And, for the first time, the leadership staff on both parties is acknowledging, in a compromise resolution, that the United States is involved in refueling Saudi planes and in providing assistance in targeting.
The compromise resolution has problematic clauses with regard to Iran. It, in my view, overstates Iran’s influence in Yemen and I don’t agree with a number of those provisions. That said, it’s the first time, we’re going to get a debate probably in the week of November 13th on Yemen, and it’s the first time there is actually an acknowledgement and understanding here in the body, that we have been involved with aiding the Saudi bombing.
JS: I think you’re making a point that almost no one else on Capitol Hill is making regarding Iran which is that anyone who has studied the Houthi movement in Yemen and also looked at the cables that were published by WikiLeaks going back to the Bush era, the Bush diplomats and the Obama diplomats really rejected this notion that the Houthis were a full-on proxy of the Iranians.
But it seems as though U.S. military action has kind of created a self-fulfilling prophecy, where now Iran does actually want to get involved in Yemen.
RK: I think it’s pretty well documented that we aided Saudi Arabia, in part because Saudis were upset about the Iran deal and so we said, “OK we’ll provide you aid in your efforts in Yemen.”
Well, first, the Yemeni people are not a bargaining chip in the geopolitics. I mean we have to have a basic regard for human rights and what has gotten us in trouble in the past is this idea of balance of power politics, where we disregard human rights, disregard the aspirations of people in other parts of the world, and then we wonder why there is cycles of hatred against some of our actions. And so, we’re making the same mistake here.
Secondly, Iran wasn’t very involved in aiding the Houthis in overthrowing the previous government. The Houthis aren’t blameless. I’m sure they have committed actions that have taken lives and one should call them out for that, but it wasn’t at Iran’s instigation. The compromise resolution that we have gotten, which finally allows the debate, unfortunately perpetuates this narrative of Iranian involvement in Yemen, but it at least gives us a debate in the House of Representatives — that’s the first time it’s ever going to happen — and it at least finally acknowledge is that we have been playing a role in Saudi Arabia, which is, probably seems like common sense and obvious to your listeners, but is a huge step here in the Capitol that we’re acknowledging the role we’ve been playing.
JS: I know this would never pass, probably either house of Congress, but do you believe that the United States should stop entirely selling weapons to and giving military assistance to Saudi Arabia?
RK: Yes, I do. I don’t think the Saudis’ human rights record or their record in military conflicts are consistent with our values. I don’t think that we should be engaged in interventionism in the Middle East. I guess my view is we should have a policy of first doing no harm. As you know arming Saddam Hussein to check Iran ended up hurting us. Our overthrow most of Mossadegh back in ’53 ended up hurting us. Our arming the mujahedeen ended up hurting us. So, we have this record of interventionism that has not made us any safer. And I view our pragmatic, or expedient, alliance with Saudi Arabia in the same way.
JS: It appears as though the number-two Democrat in the House, Representative Steny Hoyer, has been quietly trying to urge members not to support your resolution, Resolution 81, and one of the people that’s been lobbying in support of your resolution is the former chief of staff to Secretary of State Colin Powell, Colonel Lawrence Wilkerson, and he told Lee Fang, “I’ve been making the rounds on the Hill, and I’ve heard from Hill offices that behind the scenes, House Democrats are being urged by Congressman Hoyer’s office not to sign on to H.Con.Res.81.” What can you tell us about that opposition coming from a very powerful Democrat in the Congress?
RK: Not everyone agrees on every part of our strategy in the Middle East, and I’m sure I have differences of opinion on what we should do in the Middle East than Steny Hoyer. And I don’t know his position on the resolution, but in terms of getting the compromise he was genuinely helpful.
JS: And as you acknowledge, I mean the compromise was not your preferred version of it, but you’re playing the game on Capitol Hill to try to get what you think is the greater good accomplished. Is that correct?
RK: That is correct. I mean look, there are two ways of going about it — I could have walked, we could have blown up the War Powers Act. I would have, you know, been on MSNBC for fifteen minutes talking about the issue. Different people have different judgments. My view is I rather play for the long run, I rather assume that people are of decent and good faith, and in the long run, if you make the case, that they will end up doing the right thing.
And I saw that firsthand in this process, where after people really paid attention and were briefed by the military, they realized that, “Wow, we are involved in aiding Saudi Arabia. We ought to acknowledge that.” And I think over time, working within the institutions, giving people credit for coming around and compromising is a more effective strategy to build support, rather than just having the 30 strong progressives who share my perspective beating the drums and then not expanding that coalition.
JS: Had you been in the Congress, what is your position on what the United States should have done in Libya? Because you’ve been very critical of what has happened as a result of that intervention and the way that the uprising was handled.
RK: Well I don’t think we should have gotten rid of Qaddafi. I mean, we don’t have, in my view, right now the credibility in the Middle East to be engaged in regime-change enterprises. When they look at the history going back to the overthrow of Mossadegh, it’s not clear to me why we think that our going into the Middle East is going to be received in a positive way.
And so I, what I would say is we should obviously give voice to regimes respecting human rights. We should be willing to meet with dissidents. We should be willing to ask and encourage regimes to change and adopt democratic norms. But we shouldn’t be going in militarily to depose regimes and we shouldn’t be calling for regime change. I mean, I believe one of the strategic mistakes we made was in 2011, when we called for regime change in Syria — Assad is a brutal dictator, his father was a brutal dictator, but what that regime change did is create a vacuum and a void and a lot of other groups came into Syria. And we made a situation there worse. And I think the same thing with Libya.
JS: Now regarding Africa policy you’ve been speaking out in the aftermath of the public learning about the killing of four U.S. Special Forces troops in the African nation of Niger. And, you know, the public still has not been given a full accounting of what happened there. And, as you pointed out, 99 percent of Americans had no idea — I think actually maybe that’s too low of a number — 99.9-infinity percent of Americans had no idea that there were 800 or so U.S. troops on the ground in Niger.
What are you doing as a member of the Armed Services Committee to bring to public light what on earth we are doing militarily in all of these nations in Africa?
RK: We have combat troops in almost 17 countries around the world. Our troops are in harm’s way in 13 of those countries. We’ve got, you know, this perpetual war on terrorism. And it hasn’t been debated in the United States Congress. The American people are in the dark of where we have these troops. The blame is not on our military. The blame is with the elected leaders who are asking our military to be stretched thin around the world.
What we ought to do — there is a biannual report that the president has to submit in June and in December detailing where we have combat troops and where troops are in harm’s way. I’ve heard some of the senators and congressman say, “Well, we didn’t know that we had troops in Niger.” Well, there is not a single member of Congress or a senator who has any reason not to be aware of where we have troops.
My hope is that this next report in December, that should be a major national debate. Every media station and every newspaper should cover that report. Every member of Congress should discuss that report. And so, we have had this extension overseas, this interventionism that really has made us less safe, that’s perpetuated a cycle of violence. And I think that many Americans are weary of this interventionism. And we need to have this debate in this country, and I believe we need to offer a progressive foreign policy alternative to the neoliberal, neocon vision that has dominated in this war on terror the last 20 years.
JS: I give you great credit for the positions that you’re staking out here and I hope you’re not a one-term congressman for taking those positions. Final question, Representative Ro Khanna, the issue of the investigation into potential collusion between the Trump campaign and either the Russian government or people acting on behalf of Russia. I mean clearly this needs to be investigated, clearly we need to get to the bottom of it. Do you believe that the leadership of your party is assigning this the level of importance that it deserves or is it being assigned too much importance? Where do you fall on this?
RK: Of course it’s a very serious matter. It needs to be investigated. We need to make sure that we don’t have foreign interference in our elections going forward. And my bigger concern is sort of the sense that the president could fire the FBI director or try to restrict the special prosecutor. That is as corrosive to our Constitution as the original interference.
But I have said this before: I believe that there is not anything anyone can say in the United States Congress that is going to change an American voter’s mind about Donald Trump. The economists talk about perfect information, I believe the American electorate has perfect information about Donald Trump. They are going to make a judgment one way or the other.
I think what we can do is offer a vision of where we stand. Obviously, the election was a rejection of both parties. There was probably a rejection of foreign policy interventionism. It was a rejection of an economic system that people felt didn’t include them. It was a rejection of a status quo they thought was too dominated by special interests. So, what we should say is, “We heard you. And here is what we’re responding, here is our positive vision. So that if you reject Donald Trump, if you come to the conclusion that he is not the person that he said, that the promises he made on the campaign trail is not what he is living by, here is our vision of what we want to do.” I hope we can spend more time articulating our positive vision.
JS: I fear you have an uphill battle, within your own party, trying to convince others of that narrative. But I give you tremendous credit for fighting the good fight. Representative Ro Khanna, thank you very much for joining us on Intercepted.
RK: Thank you for having me on.
JS: Representative Ro Khanna represents California’s 17th Congressional District. This is his first term in office.
JS: Over the past week, President Donald Trump has intervened in the judicial process of two high-profile cases. In one instance, Trump called for the death penalty or the execution of the Uzbek immigrant who plowed into a crowded bike path on New York City’s West Side Highway, killing eight people and wounding more than two dozen others. Trump called for his execution before he was actually officially charged with a crime.
And in the second instance, Trump denounced a U.S. military judge who sentenced U.S. Army deserter Bowe Bergdahl to no time in jail. Bergdahl had abandoned his base in Afghanistan and was ultimately captured by the Taliban and held in what he described as a metal cage for about five years. Bergdahl was also dishonorably discharged and fined.
Trump, throughout his entire campaign for president, used Bergdahl as a kind of talking point.
DJT: So, we get a traitor named Bergdahl, a dirty, rotten traitor.
JS: And said things like, “He should be shot as a traitor. Not even given a trial.” Trump, at one point, suggested Bergdahl should be “thrown from a plane with no parachute.”
After Bergdahl’s sentence, Trump tweeted from Air Force One, about to take off for his trip to Asia, “The decision on Sergeant Bergdahl is a complete and total disgrace to our Country and to our Military.”
To discuss Trump’s intervention in criminal and military cases, I’m joined now by Colonel Morris Davis. He is the former chief prosecutor at the Guantanamo prison. He resigned in protest over the way prosecutions were being handled there and his opposition to what he believed was improper political pressure being put on him and his colleagues. Davis also recently won a First Amendment case after he was fired from a different military position after writing an op-ed criticizing Guantanamo and the military commissions process. Colonel Morris Davis, welcome to Intercepted.
Colonel Morris Davis: Oh, thank you for having me.
JS: What is your response to that reaction from a sitting president of the United States to a terror case that happens on U.S. soil?
MD: You know, the prosecution would appear to have a very, very solid case and have the president complicate that by injecting in the military, what we call command influence, would just make it that much more difficult to seat a jury in the event the individual receives the death penalty, potentially creating an appellate issue, that, you know, was influenced or biased by the president’s comments, and it just makes the process more difficult than it needs to be.
In the grand scheme of things, they’re murder cases, and to try to make them more complicated than they have to be just really serves no useful purpose.
JS: The United States does a very effective job of prosecuting terror cases in its own court system. In fact, just based on the numbers, a far more successful job post-9/11, actually getting justice or prosecuting terrorists than what has occurred at Guantanamo. Is that correct in your assessment?
MD: Yeah, absolutely. It was, I guess a little bit encouraging to hear the president kind of make that acknowledgement himself, you know where he admitted that this person should be prosecuted in federal court in New York City, because it would be a lot faster and more effective than sending him to Guantanamo where he could potentially sit for years, and I think the president’s basing that on the ongoing 9/11 — Khalid Shaikh Mohammed. and his group.
Khalid Shaikh Mohammed and fourteen high-value detainees arrived during my tenure as chief prosecutor. They landed, coming from the CIA black sites in September of 2006, so it’s been more than eleven years since they got to Guantanamo, and they still don’t have a trial date.
So, you know, I give credit, I guess, to president Trump for recognizing that the military commissions have largely been a failure and that the federal courts have been very effective in dealing with these kinds of cases.
JS: And yet, at the same time, Trump campaigned in part on this sort of reverse Obama, this sort of pledge to fill Guantanamo back up again and has said things like:
DJT: Torture works. Okay, folks. I have these guys, “Torture doesn’t work.” Believe me, it works.
JS: And —
DJT: I guess your definition of what I do, I’m going to leave that to your imagination. But I will tell you, I would be very tough on the families, because the families know what’s happening.
JS: He may have made a statement that you rightly give him credit for that we should do this in federal courts, but that flies in the face of a lot of other things that he’s said.
DJT: Well I guess fortunately so far a lot of what he’s said, particularly on the campaign trail and even continuing now that he’s in office, you know has proven to be bluster. With filling up Guantanamo, and torture, and military commissions, and I don’t know what the, perhaps the moderating, influence has been on him.
But, you know, the record so far has shown that you know Guantanamo has been a failure. You know, the most recent person to be found guilty and sentenced at Guantanamo was a one star Marine Corps general.
Back in September 2006, when the plane landed and fourteen guys got off the airplane, there’s only one who’s been tried, convicted, sentenced, the case has been through the appellate process, all the way to the Supreme Court, who denied cert, it’s over and done and that was Ahmed Ghailani, who was the only Guantanamo detainee ever brought to the U.S. and he was prosecuted in federal court.
And you compare him to the other thirteen men that got off the plane with him that day and they’re still waiting on a court date at Guantanamo.
JS: How many successful prosecutions that resulted in a conviction or acquittal actually took place at Guantanamo from the beginning.
MD: Since President Bush authorized military commissions in November 2001, there have been a total of eight cases that have been through a finding of guilty and a sentence that has been imposed. A number of those were overturned on appeal.
As an example, during my tenure, there were three people that I personally charged prior to the time I resigned. And that was David Hicks, Omar Khadr and Salim Hamdan. All three of them were ultimately convicted and sentenced, but when their cases came up on appeal to the D.C. circuit, you know, which is generally viewed as one of the more conservative circuit courts of appeal, they found that the offense to which they’d been found guilty of providing material support for terrorism was not a legitimate law of war offense at the time of their conduct. So, their findings and sentences were set aside.
That’s been kind of typical, you know, it seems like there’s a step forward, two steps back. I guess really the only case you could say has been a successful prosecution was the al Bahlul case, which the Supreme Court recently denied cert.
But again, it’s a relative term calling that success, al Bahlul boycotted his trial and refused to participate, so it’s kind of a forfeit. But he was convicted and sentenced to life and the Supreme Court has refused to hear his case, so I suppose you could say that’s been the one success in the 16 years of effort in Guantanamo.
JS: And this is, out of my understanding, a total of 775 prisoners held at Guantanamo since Bush first opened it in the context of the war on terror.
MD: Right and I’m sure you recall back in the day when we were told that all these men were the worst of the worst and the kind of people that would, you know, “chew through the hydraulic lines on the airplane flying to Guantanamo just to kill Americans.” And I believe the total I saw was 778. Out of that number there are currently 41 that are still there. A number of those have been cleared to be repatriated, if there’s a country that will take them. And just unfortunately the Obama Administration wasn’t able to complete that effort before leaving office. But there’s probably less than two dozen that will ultimately be tried and prosecuted and have their day in court, out of a total of 778, they were all supposed to be the “worst of the worst.” So, I think that pretty much shows that what we were told was not truthful.
JS: Do you believe that incidents such as the one that occurred recently in New York, would you categorize those as acts of terrorism?
MD: To me terrorism is an act that’s committed with an objective of achieving some type of political purpose, you know, is using fear and terror and intimidation to try to bend the public or elected officials to the will of the party that it is carrying an act. The shooting in Texas appears to be motivated by, you know, a domestic dispute and hatred towards the family of an ex-spouse or something to that effect, where the act in New York appears to be more, you know, based on ideology than some type of criminal intent.
But I think we get too hung up on that label of terrorism, and, at the end of the day does it really matter? And I guess one of the cases where it really came to light was Major Nidal.
JS: You’re referring to Nidal Hasan who was a U.S. Army psychiatrist that then opened fire on his colleagues in the military at the U.S. military base at Fort Hood in Texas.
MD: Correct and Major Hasan, if you recall, there was a big debate on whether this was an act of domestic terrorism, and why wouldn’t President Obama call it terrorism, and it doesn’t matter. It’s murder. The elements of murder are what they are whether you call it terrorism or not. So, I think in a lot of these cases, whether we put the terrorism label on it is largely driven by politics and not the practicality of the law. At the end of the day, for the law, it’s, you know, murder is murder, whether you call it terrorism or not.
JS: The reason I’m asking if you consider this attack in New York to be terrorism is because there is a distinctly different way that the president, as well as many people in both parties, but more so in the Republican Party, when a Muslim is doing the shooting, it’s immediately designated as terrorism.
We now see this emerging pattern that when white people conduct mass shootings, the reaction of the president in one case is to say, “Well, he seemed like a very smart guy, but clearly something went wrong. He was deranged.” The president called this guy who did the attack in New York:
DJT: This animal who did the attack.
JS: The shooter in Las Vegas was:
DJT: A sick person but probably smart.
JS: This shooting in Texas is about:
DJT: Mental health is your problem here.
JS: But when it’s a Muslim, Trump calls for the death penalty right away, which he certainly hasn’t done for any of these mass shooter incidents where white people were the culprit. Is it actually any different in your view as to how we as a society should react to it or the judicial system should handle it when we’re talking about white men who are mass shooters versus Muslims who are killing because they’ve pledged their allegiance to al Baghdadi and ISIS.
MD: It seems that, you know, the case of this shooting in Texas or the shooting in Las Vegas, that the response is “thoughts and prayers” and if it’s someone like the individual in New York City then it’s a radical change in policy that’s required.
The public, even though we like to say that we never forget, we forget pretty quick. And if they can, you know, drag this out for a week or two it will fade out of public memory and we will move on to the next mass shooting. Where, when you have an incident like in New York City, instantly, you know, we’ve got to build a wall, we’ve got to ban people coming to this country and take some really radical steps that are contrary to what have been longstanding American values
I was looking at the numbers the other day, if you look at this century, count 9/11 in there, there were roughly 3,000 people killed there, there’s been another 100, 200 people in the U.S. that have been victims of what would I think legitimately be characterized as a terrorist attack, and you compare that with, on average, 32,000 people a year that have died by gunshot wound. As an American, your risk of being killed by gunshot versus act of terrorism is 185 to 1. And we’ll do nothing about the greater risk, we can’t even talk about it, and we’ll set aside our values to get rid of or try to mitigate the lesser risk.
And I think that this clearly shows that this is based on politics and not on practical solutions that keep America safe.
JS: I wanted to get your reaction to the resolution of the Bowe Bergdahl case. Ultimately, the judge decided not to sentence him to any additional time in custody and he had his rank reduced and then he has to pay 1,000 a month in restitution. What’s your reaction to that sentence?
MD: Unfortunately, this case got wrapped up more in politics and injustice and I think the sentence that was handed down does a lot to maintain confidence in the military justice system.
And I was in the system for 25 years and it’s an outstanding system and I’m proud of it and I think what the judge did helps to maintain that high standard of military justice. You know, unfortunately in the Bergdahl case, president Obama had the Bergdahl family in the Rose Garden. And people like John McCain used to say we need to do everything possible to get Bergdahl back and then when Obama did what he did, suddenly the people on the conservative side just, you know, went nuts about the case.
I think for the public they’re under the impression that Bergdahl was the only person that ever deserted. There are hundreds of service members that desert every year. He was in Taliban confinement for five years, and I don’t think there’s any disputing that, you know, he was mistreated during that period. So he, you know, he was punished in a way in the dishonorable discharge certainly, you know, is tantamount to a federal felony conviction on his record. So, I think it’s about right.
You know, one of the reasons for imposing a sentence as a deterrent effect and I don’t know any service member that looks at what Bowe Bergdahl went through that says, “Gee, I wish that was me!”
I did an op-ed in The New York Times in August of 2016 when you had John McCain railing about Bowe Bergdahl.
Senator John McCain: The problem that I have and many others have is what we paid for that release and that is releasing five of the most hardened, anti-American killers, brutal killers.
MD: At the time, candidate Trump had made him a standard feature of his campaign events.
DJT: We’re tired of Sergeant Bergdahl, who is a traitor. He’s a traitor — a no good trader — who should’ve been executed.
MD: Trump who went on to be president is now the commander-in-chief and when they’re stating that a person is prejudged as guilty and should be subject to severe punishment, that’s command influence and I think the judge did a good job of insulating military justice from command influence and imposing a punishment that struck the balance about right.
JS: Can you recall any time when a sitting commander-in-chief intervened in the way that we’ve witnessed Trump intervening in this Bergdahl case while president?
MD: No, not at all. It’s unprecedented. When he was a candidate it was one thing, once he was sworn in, he is the commander-in-chief, and he is at the very tip top of the military justice system. He has authority as president. He can mitigate sentences. He can set aside findings. I mean ultimately the military justice system, you know, where the buck stops is on his desk and for someone with that kind of power to inject themselves and predetermine guilt and a sentence is really detrimental to the military justice system.
JS: You know it’s clear that the President Trump has a track record of not taking kindly to people not doing what he says they ought to do. And so, for the military judge to stand up to the commander-in-chief and say, “I hear you but I’m not doing it” really says a lot about the courage and integrity of the judge. I know that you’re not any kind of a rabid partisan. My sense of you is that you sort of call it like you see it. In recent days, though, on Twitter you very passionately have gone after the president and you have also criticized left-wing opponents of Hillary Clinton. And I’m wondering where you fall on the spectrum of the kind of #resistance embrace of people like George W. Bush and David Frum and others who were key players in the Iraq war and implementing the sort of borderless global war just because they happen to say some critical things about Donald Trump or, in the case of George W. Bush said, “I didn’t vote. I voted for none of the above.”
Given your opposition to Trump, do you view George Bush and David Frum as your allies in this?
MD: No, and I guess it’s by way of comparison. You know, you don’t realize how good or bad something is until you have another object to compare it to. And I guess by comparison they look better than they did back then. But you can’t rewrite history. And the facts are what they are, you know, what we did during the Bush Administration after 9/11, you know, engaging in torture. And we led the effort to create the Geneva Conventions in the wake of World War II, after we saw the atrocities that were committed in, you know, with an objective to bring the world up to a certain standard.
And after 9/11, when that standard was viewed as an impediment, then we just tossed it aside. We like to say that we’re the home of the brave, but we became the cowardly after 9/11 and set our values aside. So, the fact that they’re saying things now that I may tend to agree with does not erase the past history.
You may have seen last week the former Attorney General Holder was bragging that, you know, “I was right, you know, these cases should have been tried in federal court and not in military commission.” Well, you know, I got fired for writing an op-ed that said that in 2009, and it was his Justice Department that spent six and a half years doing everything possible to shut me up in federal court. So, I don’t have a warm fuzzy feeling from either of the prior Administrations for some of the things they did.
But, again, I think by comparison they look better than they did at the time.
JS: We should never forget the scope of the destruction, not only around the world, but to our own purported values in this country that took place during those eight years of Bush and Cheney. And, also, a lot of liberals looking the other way or openly supporting Obama policies that were largely lifted from the Bush-Cheney playbook. So I really do appreciate your principle on this matter.
MD: Oh, thanks. Unfortunately, not much has changed over the past decade and I think one of the big mistakes that was made was when president Obama early on said, “We’re going to look forward and not back.” And basically has had a policy of impunity for torture, which leaves the door open for people like candidate Trump, you know, to go out and say the things he did about, you know, “we’ll do waterboarding and worse.” You know, there’s no excuse for some of the things that we did and there needs to be an accounting for what we did and we need to own up to it to where we leave the door open for us to repeat it and we sanction other countries to engage in that kind of behavior. So, I guess I’m still optimistic that at some point, you know, we’ll look back at what we did and take account of it and acknowledge what we did was wrong.
JS: Why is Guantanamo still open today and how could we actually realize an aim of closing the place?
MD: Well, I think Guantanamo’s open today because president Obama said he wanted to close it. Had he said in January of 2009, “I love Guantanamo and I’ll keep it open forever,” then Mitch McConnell and the Republicans would have done everything possible to shut it down by the end of the month.
It became a political issue. You know, if you recall back during 2008, during the campaign, John McCain and Barack Obama both said they wanted to close Guantanamo. So, there was a point in time where closing it was a nonpartisan issue. I don’t think anyone can give you an honest list of positive things that Guantanamo has done. It’s been, I think we’ve spent $5.5 billion on the detention operations alone at Guantanamo, which held 778 men over its history and only 41 that are there now. It’s just an enormous waste of money. It’s a black eye for America around the world. It’s, you know, when you see ISIS, when they were executing people, they put them in orange jumpsuits and they did that for a reason, because that represented Guantanamo, so to me, there are no positive things you can say about Guantanamo. There’s a whole long list of negative.
Maybe I’m wrong. It at least seems that president Trump has recognized maybe some of the shortcomings of military commissions and Guantanamo itself and no one has been sent there in recent years and hopefully that trend will continue because it’s a chapter in our history that I’m confident that at some point we’ll look back on with regret. And I’m hopeful still at some point, when I’m talking about Guantanamo, I’ll be talking about it in the past tense rather than the present.
JS: Colonel Morris Davis, thank you very much for joining us on Intercepted.
MD: Thank you Jeremy. Thanks for having me.
JS: Colonel Morris Davis spent 25 years working in the U.S. military justice system. He’s the former chief prosecutor at Guantanamo Bay prison in Cuba.
JS: This week the International Consortium of Investigative Journalists, along with 95 international news outlets, published a massive trove of documents that they labeled, the Paradise Papers. The more than 13 million documents are from a leading offshore law firm Appleby. And they paint a picture of the global elite, shielding themselves from taxes, from accountability, public scrutiny of their financial dealings. The documents also reveal relationships of powerful individuals to a variety of governments, shell companies and shady individuals.
Included in this dump are files related to more than 120 political figures or world leaders, including Queen Elizabeth. They also contain information about more than a dozen people connected to Donald Trump, including his commerce secretary Wilbur Ross.
These documents being published comes as the GOP is engaged in a major push of its tax reform plan, that many economists say is going to bring the greatest benefit for the already wealthy in America, and for large corporations.
To discuss the Paradise papers and the GOP tax plan, I’m joined now by Nomi Prins. She is a former managing director at Goldman Sachs, she also worked for Bear Stearns. More recently she’s become an author and a journalist, and her latest book is “All the President’s Bankers: The Hidden Alliances That Drive American Power.” She also has a new book coming out next year called, “Collusion: How Central Bankers Rigged the World.”
Nomi Prins, welcome to Intercepted.
Nomi Prins: Thank you so much for having me today.
JS: So, Nomi, let’s begin. Your reaction to the importance of this massive amount of information that’s been published under the banner of the Paradise Papers.
NP: You know, first of all I think that all of this research all these investigations into the details that we don’t get to see from the companies involved, from the sort of individually elite involved are so important to keep going. This particular one, the leak of 13.4 million or so files that went into offshore tax shelters is really just another important delving into. There are so many legalities that are a component of allowing wealthy individuals, powerful individuals, powerful companies to avoid paying taxes that that gray line between legal and illegal almost doesn’t matter. The net result is that they have ways of keeping money that should be counted for government and other types of revenue, away from government and types of other revenue. And that means that for the shortfall, for the gap involved, people have to make up the difference. People don’t have the luxury of hiring companies like Appleby to hide their money, which was the law firm itself that was at the center of this particular leak that was exposed through the Paradise Papers.
The other takeaway from this is that it just underscores the level of complicity in tax avoidance that our president currently has with respect to the individuals he’s chosen as either cabinet members or as advisers. And that, that’s another aspect. So, you look at a cabinet member, which is Wilbur Ross, which is our commerce secretary, or you look at an adviser such as Gary Cohn, who’s the chief economic adviser to the Trump Administration, and you realize that these people have for years sheltered their money from being used for the public good or the public revenue that the government needs to function.
DJT: And I love all people: rich or poor. But in those particular positions, I just don’t want a poor person. Does that make sense? Does that sense? [laughter and applause] If you insist, I’ll do it. But I like it better this way. Right?
NP: The other main thing about this is it shows yet another component, because there’s been many analysis on this including from the Office of Accountability in Washington, that there’s a tremendous amount of tax avoidance from the largest multinational companies, including, in this particular trove, Nike and Apple, but, I’m sure there are others that will come out in the data, that routinely not just look at one type of tax shelter or hire one law firm or one accountancy firm to help with tax avoidance, but have that on record is the way in which they do business on a multi-year, multi-billion type of basis.
JS: And, specifically about Wilbur Ross, one of the facts that’s emerged in the early stages of this reporting is that Wilbur Ross, who is the Commerce Secretary, has a stake in a shipping company that has gotten up almost $70 million in revenue since 2014 from an energy company in Russia that’s co-owned by a son-in-law of Vladimir Putin. And, of course, with everything happening now with the Mueller investigation into Russia that seems to be the initial story that sort of grabbing headlines right now as regards Trump’s inner circle.
NP: Right, and part of that is because the relationships weren’t fully disclosed. Ross is talking about how he’s been taking money out of that company, he’s been definancing in or whatever as a result of him having become commerce secretary, and he was going to do that anyway, even without disclosures of those relationships of his companies. But the reality is he probably wasn’t, we can’t know, but usually these things are hidden for a reason. And they’re not disclosed for a reason, which is because they are set in place, they make money for both sides, and they’re easy to keep from transparency. In the case of Wilbur Ross’ company that has gotten payments from Vladimir Putin’s son in law’s company, which is the equivalent of Jared Kushner effectively paying someone in Russia for the same thing or one of his companies doing the same thing, so it’s, it’s kind of a pretty tight connection except for the fact that Putin’s son-in-law isn’t one of the advisers in Putin’s government, whereas Jared Kushner is one of the advisers in Trump’s government, but I digress.
But the point is that this is — this is important, yes, because of the investigations and because a lot of the investigations that Mueller is doing relate to the trail of money. People that he’s indicted so far, he’s indicted on various counts of money laundering and other things that involve moving money through channels that are offshore, that are between countries, that sort of culminate offshore between individuals that keep that secret. And for Wilbur Ross to have that as well and to not disclose that, is only another point of contact within the Trump Administration where there is that connection into Russia which is being investigated and there’s a real train of money.
Now it might not be illegal in his case, it just looks bad, which is also apropos of a lot of what happens in the Trump Administration, that line of legality and that line of immorality and unethical behavior is very blurred, in general, with people in sort of the elite sect, but in particular in the Trump Administration, and that’s where Wilbur Ross comes in. This is the guy who is in charge effectively of the relationships of major companies including things like shipping companies by running commerce with international counterparts. That’s his job inside of Washington and that’s where it all culminates together. It’s the Russia connection, it’s the lack of disclosure, it’s the fact that he enriches himself by doing so, he enriches himself by not having appropriate disclosure channels. And it is related ultimately to some kind of money flows going to and from the Trump Administration. And people in sort of the Russian government or the Russian elite companies or individuals.
JS: Why would these wealthy individuals or these companies, like, what is the ultimate point of using these offshore accounts?
NP: Well there’s two ways and two reasons for using offshore accounts. The major way is to avoid paying taxes on gains. They could be actual cash, they could be assets, they could be real estate deals, they could be, you know, options on various types of bonuses.
For example, and I haven’t seen this in these documents because it would be a sort of very detailed kind of line item, but some of the organizations, the banks, major corporations that pay people in options occasionally use or often use offshore tax shelters to finagle what’s actually ultimately going to be a cash payment from the options on their shares in the company, or not. And so there’s ways to basically take the complexity of some financial instrument, and mix it with the complexity of a tax shelter, and mask it with a lack of a transparent trail to the IRS. And the reason anybody would use that, any company or individual would use that, is to avoid disclosing their net wealth or their net profits or their net revenues.
The other reason to do it, and this is less so, right now, because there is so much sort of cash fusing about the world in the last ten years since the crisis — particularly for the wealthier individuals who have been able to invest it because they’ve had more access to it and the corporations have used it to do things like buy back their own shares and other types of things that don’t necessarily involve actual development or, you know, or really creating jobs or increasing wages — but is to hide losses.
Often, and this happened back, and this goes back to some the scandals of Enron and so forth, you know, that these companies, and even Citigroup more recently, have multiple tax shelters where they can effectively stash things that might be losing money and so it doesn’t look as bad on their main books.
And that’s more for corporations and individuals, and so that they can appear healthier, to investors to shareholders, to analysts from Wall Street or what have you, and that’s another reason to use them.
So, the biggest reason that we know about and we see, and that detracts most obviously from money that comes into the different governments that house these wealthy individuals or corporations that avoid their taxes is that not enough money goes in that should be going in.
There are certain levels of taxation, for example, in the United States, corporations are technically supposed to pay 35 percent taxes on the profitability that they incur on an annual basis. But if they hide that profitability in various companies that they create or various tax shelters that then connect to those companies, and other tax shelters that connect to those tax shelters, because normally it’s not just a direct chain, and that’s why this analysis is so important and the research is so intense and you need so many journalists and people on it is, because there’s multiple levels of sheltering within a shelter, there’s almost never just one shelter. But all of that is done to really protect the knowledge of profitability to individuals of their assets, of their money and to corporations for the same things. And that, again, keeps it from the various governments that are connected to them under which they operate or hire people, whatever, on a regular basis and that’s why they’re used. And again, the other thing is to hide losses to also make themselves look better and they can use different, you know, sort of shelters for different purposes.
JS: Now, Nomi, you yourself, at a different point in your life, were a managing director at Goldman Sachs, you also were at Bear Stearns. Part of the reason why I wanted to talk to you because, for all of Donald Trump’s attacks on Hillary Clinton during the campaign and the speeches that she gave at Goldman Sachs, Trump has had more Goldman Sachs alums in his Administration at this point than any other president in history in terms of just the number this early on in his time in office. And you have a piece this week about the treasury secretary Steve Mnuchin, and one of the things that Mnuchin has been doing for the Administration is sort of threatening the public with financial disaster if a tax reform plan is not pushed through. And he’s done this on national television, he’s also done it in various summits where he’s saying, look:
Steve Mnuchin: I think to the extent that we get the tax deal done, the stock market will go up higher but there’s no question in my mind if we don’t get it done, you’re going to see a reversal of a significant amount of these gains.
JS: What is your analysis of what is happening right now on Wall Street under Donald Trump where Trump himself says you know, “Every single day we break a new record, 65 records since I became president on the Dow alone.”
NP: I think that there’s a couple ways to consider what Mnuchin is doing. On the one hand, it’s completely out of the playbook of a former Goldman Sachs alum, who is the CEO and chairman of Goldman Sachs before he became Treasury Secretary for George Bush, and that was during the time of the financial crisis where he sort of got down on one knee in front of Nancy Pelosi, who was speaker of the House, and said, “If you guys don’t pass,” i.e. Congress, “this bailout bill for the banks all the ATMs are going to cease to give money to people and there’s going to be Armageddon and so forth.”
Hank Paulson: We must do so in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families’ financial well-being, the viability of businesses both small, and large, and the very health of our economy.
NP: And that was a way of basically tying Congress or at least threatening.
JS: You’re referring of course to the former Goldman Sachs CEO Hank Paulson.
NP: That’s correct, who is also the former treasury secretary. And of course Steve Mnuchin, who was only a former partner at Goldman Sachs and not the CEO, but still pretty high — actually he left when I left so he’s done a lot of other things since then — but the point is that the way in which both Hank Paulson back at the times of the bailouts in the beginning of the crisis, and Steve Mnuchin, who’s kind of using the same tactic to threaten the sort of health and level of the stock market if these tax cuts for corporations, which is mostly what he’s talking about when he makes that threat, don’t go through, it’s really the same thing — it’s really this instilling fear in Congress and perhaps the greater public to sort of be quiet about it with respect to Congress, that if certain things aren’t done to effectively help companies in the beginning of the crisis, it was to specifically help the banking industry from getting out of their own, the messes that they created, many of which, much of which was created illegally. And now with respect to corporations, what Steve Mnuchin was talking about and is talking about an is stumping about, is a 42 percent tax slash in the actual substantive rate of taxation for corporations. And that is a substantial, going from 35 percent to 20 percent, which is in the GOP bill.
And his reasoning for that, and for connecting it to the stock market, and why Trump connects everything to the stock market, is because it is the one thing that you can objectively look at that has a number that has gone up. You can’t do that with wages. You can’t do that with job quality. You can’t do that job longevity. You can’t do that with your health coverage. You can’t do that with lots of other things that most people count on for their day-to-day lives and to make the day to day payments and money that they need to survive them. But what the stock market shows is not, not the expectation that there was going to be a tax cut. What the stock — which is what he’s saying, what the stock market shows is that for all of this period, and it happened during Obama as well, and yes it’s continued under Trump, there’s been a situation where companies have been able to receive very cheap money, because our rates are close to zero and they have been since the financial crisis, in order to subsidize the money that was lacking at the time for the banking system, that money has gone to banks, banks have bought back their own shares, banks pay themselves dividends on their own shares that they bought. That pumps the stock market up. That’s a significant set of buyers for their own stock.
The same thing in companies throughout all of the different industries spectrums. They get the ability to issue cheap debt, or basically to borrow money cheaply because rates are so low, they use that money not necessarily to expand. Some of it they hide, as we were talking about earlier, some of it they use to buy back their own stock which enriches the top level of those firms, and it also pushes the stock market up, and then they also get dividends on their own stock.
So all of that is more why the stock market has continued to rise throughout Obama’s administration as well as with Trump in there now. Because nothing has been done to effectively change that.
Mnuchin and Trump have added onto that, sort of taken credit for it, by saying, “Well, because of us, because of these plans, because of expectations on these plans things are going up.”
No! Banks don’t buy stock on expectations of plans. They buy stock because they have the money to do it and they’re not, they don’t have to do anything else with it. Like, let’s say reserve it in case we have another emergency crisis and they, you know, need to go back to the government for additional subsidies. That’s not what they’re doing.
They’re also, because of Mnuchin, and Trump, which he doesn’t talk about in the scare tactics, is looking forward to more deregulation in terms of the rules under which they provide their services. So rather than doing what Trump promised he would do, he promised a lot of things that he’s not doing, but one of the things he promised to do was to actually break up banks, to bring back Glass-Steagall, the real one, from 1933, not some pseudo, weird one that Mnuchin talks about that would actually require banks to split up, to use their deposits and their loans for real banking services, to bet when they need to on the side, and knock down the subsidies from the Federal Reserve or the government. That’s not what’s happening.
So if anything, if there’s any modicum of rising that can be attributed to policies that this Administration is pushing and to which Mnuchin in particular is pressing, it’s the level of deregulation. It’s not necessarily a taxation expectation because that hasn’t really been baked in, where certain deregulation movements have already been baked in.
JS: I’m not an economist and I really struggle sometimes to understand, when you go to the RNC, for instance, the Republican National Convention, where they anoint their nominee and you talk to people that are there as delegates from around the country, there are a lot of working class people that are there, there are people who are struggling with a small business, and this is sort of the bread and butter of who you meet at the Republican National Convention. It’s not — yes you have the elite, high-end donors that are in the suites and all of that stuff is going on.
But just sort of rank and file, and I’ve gone to most of them since 1996, I’m astonished. It feels like you’re at like a used car salesman convention, and I can’t for the life of me understand how the Republican tax plan or the Trump presidency ultimately is going to benefit any of those people. Like what, what am I missing here? Who is this actually going to help?
NP: If tax cuts go through for companies, it will help those people who are already stashing money, not to bring it back, and to basically enrich themselves. It will help, you know, people with wealthy estates preserve it for their families. It will not help —
JS: But these are not small business owners. Like, small business owners are not, you know, camping their assets in an island somewhere.
NP: No. And that’s the whole point. It is expensive. You know? I don’t know if this is, this is somewhere with the documents, or in these documents, but I mean, there are some significant fees per hour that are being paid to the types of accountants and service providers that hide, or allow, these companies and these individuals to hide their money. This is not something a small business can afford. It’s not something an actual person can afford for the most part. You know, these are things that to begin with that require significant amounts of capital in order to make them happen. So just from the sheer standpoint of setup, there’s a lot of costs. And so, no, it doesn’t impact small businesses. And the idea that somewhere along the line the tax cuts that are being proposed can put an extra $1,100 in the middle class pocket, well, maybe, but if you look at all the things that they want to remove from middle class benefits, whether that’s sort of dependents, it’s medical expense deductions, it’s student loan expense deductions, I mean it’s things that really hurt, when they get out of whack, individuals and that if you have a middle class income you can kind of deduct these things against it and if you can’t deduct them that could be the difference. It could be way over $1,100 per person or per filing unit. And so, it doesn’t really help anyone.
It only helps people — well, it actually doesn’t help the people that come to those conventions unless they’re really rich. And, the point is, those are the people that are actually affecting the tax code and are in the offices and are in the dinners and are in the meetings and are at the golf courses with the individuals who are trying to push on to everybody else the idea that their plans will be beneficial to them.
And they’re actually not! We have seen that. I mean the whole reason that there’s been so much — that there was such dissatisfaction into this particular election and it’s split between Trump and I think Bernie Sanders. And it kind of got missed by, by the Clinton camp. But the reality is there’s a lot of economic uncertainty here and that is because people don’t have the ability to pay for regular things they need, whether that is health care, whether that’s education whether that’s just ordinary bills. And so, the idea of a minor tax cut to them, I think is just a bone relative to everything it contributes to anyone who already has money.
JS: And you, of course, have been an adviser to Senator Bernie Sanders both as a senator and when he was running his presidential campaign through his Federal Reserve Reform Advisory Council. I mean we’re hammering away on Trump and the Republicans here, as we should, they’re in control right now, but are the Democrats institutionally all that much better than what Trump and the Republicans are offering?
NP: No, they’re less specific about some of the things that won’t be beneficial to everyone. They certainly, as a group, take a lot of money from Wall Street. I mean we know that president Obama’s major donors in his original campaign included, three of five of them were major banks including Goldman Sachs, as is his number two one. Hillary Clinton’s connections to Goldman Sachs and Bill Clinton’s connections to Goldman Sachs are legendary. And, you know, we could we could talk about that for a really long time.
But the reality is that the elite structure that catapults many people into politics, particularly from a generational or family or sort of connection basis relative to people running individually on their own sort of from outside that, and when you look at the level of wealth that they have going into that, it is not necessarily better in the Democratic Party than the Republican Party. I mean look at Nancy Pelosi’s wealth. But the point is, you know, how you use it and the Democrats I think have been guilty certainly since the financial crisis, and this is less Bernie Sanders, but not pushing for, say, breaking up banks, and not pushing for a better health care system that’s more on the order of a single payer. And so, I think that many of the Democrats have been guilty of that as well.
With respect to Bernie Sanders, he’s been a big advocate for all of those things. And so there’s a faction of the Democratic party that gets that. When I say get that, I mean that gets that things have to be significantly changed, not just changed a little bit. Not just Dodd-Frank, for example, which is one of the regulations that came out against banking in the wake of the financial crisis, but didn’t really break up the banks. You know, not that kind of half-done sort of stuff but actually going full throttle and really fighting for major kind of FDR types of changes, but also considering that their constituents from the business side and the Wall Street side, yeah, they’re not going to like that.
But the way I look at politics is, you know, you’re in there. You can do a tremendous amount of good for a greater number of people, or not, or you can continue to do it for, you know, so the comfortable group that you come from that support you on a more, you know, sort of acute basis.
But, yeah, the Democrats are equally responsible, when they were in control, of not pushing through more inequality-reducing, more economically stabilizing types of measures.
JS: You know as we wrap up here, I want to sort of just ask you a question I think a lot of particularly young people who have very little savings, there’s almost no such thing as a pension anymore in this country. You’ve got the 401k match, you know, and if your employer is decent, they give you a decent match, and they contribute to it, you know, dollar for dollar, up to a certain point. But in reality, all of our futures are being gambled with by the very people that you’re talking about.
What would like a just system look like in terms of securing your retirement, and not having your money gambled with, and the rules that we actually should be embracing in our society? Like, in your view, what makes sense for how we save up for our retirements or how we protect our families or how we don’t lose our homes? Like, what should be happening at an institutional level to change the reality, particularly that a lot of young people are going to be facing, but also people that are retiring right now are facing?
NP: Again, going back to the beginning of our conversation about the Paradise Papers, there’s major things that need to be done, for example, if a public official does not disclose their financials, they should not be allowed to be a public official. That should be a thing. That should be a law. We shouldn’t have to wonder about Trump’s tax returns and spend multiple investigations trying to figure out where his companies are and who’s buying what within the various, you know, multiple levels of non-transparency of them. That shouldn’t be a thing. That would be something that levels the playing field.
Not having a Citizen’s United aggregate, of where money can come into politics, would be something that levels the playing field. Breaking up banks would be something that levels the playing field for many reasons that are beyond bringing back Glass-Steagall. It would encourage banks to work at the level of taking deposits and giving loans, which would mean they would probably want to have a higher interest rate environment so that people would be able to give them deposits and they would be able to keep them in order to give out loans, it would be much of an easier type of business.
And also that would mean that from a trading perspective, from the standpoint of derivatives, from the standpoint of buying back their own stock, from creating all sorts of complex securities that don’t look like they’re buying back their own stock but in fact mean that they’re buying back their own stock, that all of those things would have to be separated so that they, on their own dime, have to take risks, which would require them to significantly reduce their risk. I think those things are important. I think actually having a raise in corporate taxes, rather than a reduction in corporate taxes, that would be something that would also level the stability because you would have more of a way to quantify money coming in versus having to chase it later and all sorts of promises to get it back from these tax shelters which, which aren’t going to come to fruition. I think we have term limits for the House and not have people there for you 20, 30 years, but have, you know, a certain sort of period of time so they actually have to be more in touch with the people that elect them on a more regular basis, so that they don’t get as comfortable with the types of companies that push their policies and push, therefore, legislation that isn’t as stabilizing for the majority of the population, certainly destabilizes the financial markets. I think that needs to happen.
So, I mean it’s really a holistic way of stepping back, and maybe it’s utopian, but, you know, if you’re talking about a new generation coming in and being concerned about their future financial stability, how it’s handled from a from a legislative or law or regulatory perspective, and how the government functions from a sort of ethical or moral perspective matters. And you’re not going to change everybody’s behavior by any sort of means overnight or even over decades. But I think these are important things to, to enact and to get moving on.
JS: Well, Nomi, it sounds like you’re ready to start your campaign for public office. No, no. But folks, listen, I mean, Nomi was at some of the big villainous corporations — Goldman Sachs, Lehman Brothers, Chase Manhattan, and others — and, you know, I give you a tremendous amount of credit for taking all of that experience and translating it into information that ordinary people can use to make informed decisions about what policies to support, what policies to oppose. I give you a tremendous amount of credit for the work that you’ve done. Nomi, thank you so much for joining us on Intercepted.
NP: Thank you, Jeremy.
JS: Nomi Prins is a former managing director at Goldman Sachs. She’s now a journalist and author. Her latest book is “All the President’s Bankers: The Hidden Alliances That Drive American Power.”
JS: That does it for this week’s show. I want to thank everyone who contributed to our recent fundraising drive here on Intercepted. It was a great success and we have all been very humbled by the support from our listeners. Our honorary producers are Cam Cowan and Natalie Holme Elsberg. Many thanks to you both for making this show possible.
Intercepted a production of First Look Media and The Intercept. We’re distributed by Panoply. Our producer is Jack D’Isidoro and our executive producer is Leital Molad. Laura Flynn is associate producer. Rick Kwan mixed the show. Elise Swain is our production assistant and graphic designer. Our music, as always, was composed by DJ Spooky.
Until next week, I’m Jeremy Scahill.