In his attorney general confirmation hearings today, Sen. Jeff Sessions was asked by Sen. Richard Blumenthal, D-Conn., whether he would appoint a special prosecutor to administer the multiple Justice Department investigations against Deutsche Bank, given their financial ties to president-elect Trump. Sessions responded by saying he didn’t know how to respond, because “I’m not aware of that case.”
He should be.
Like practically every major financial institution, Deutsche Bank stands accused of peddling securities during the housing bubble backed by toxic mortgages, without telling investors about the risks. Other settlements over similar misconduct by Citigroup, Bank of America, and JPMorgan Chase have led to billions of dollars in fines.
But Deutsche Bank is notable, because it is Trump’s lender of last resort for his many real estate properties. Trump has borrowed at least $2.5 billion from Deutsche Bank since 1998, including $364 million in mortgages for four properties in the past few years. With not only the mortgage securities fraud investigation but other legal cases pending, it is natural to speculate whether Trump would use his powers as president to intervene. And a special prosecutor would at least grant nominal independence to the cases.
Perhaps because of the imminent conflict of interest, the Justice Department reached a tentative agreement with Deutsche Bank last month for $3.1 billion, far below the $14 billion prosecutors initially threatened to impose. Another $4.1 billion would be pledged to homeowners with struggling loan balances — but Deutsche Bank wants to pay that off through investing in private equity firms who then buy up distressed loans and renegotiate the mortgage balances. Since they could earn money investing in the private equity firms, it’s hard to call that a penalty.
The case is another example of the Obama Justice Department’s weak legacy on accountability for corporate crime, which usually involves settlements rather than individual prosecutions. But at least Attorney General Loretta Lynch is aware of the existence of Deutsche Bank, and its various instances of official misbehavior. Sessions would as attorney general not only finalize the mortgage securities fraud case, but also complete an investigation into the banks’ “mirror trades” that aided money laundering by Russian nationals, among others. His ignorance of the issues doesn’t bode well for an adequate resolution.
Moreover, Sessions’s breezy dismissal of a major corporate fraud case reveals his priorities more generally. Sessions covered many weighty discussions at the hearings in detail, from voting rights to immigration to torture to police brutality. Corporate fraud — even the kind that nearly brought down the global economy — was of lesser importance. For Americans seeking justice for these crimes, the transition from Obama to Trump will likely be one from disappointment in relatively light enforcement to anger at no enforcement at all.
As head of the Department of Homeland Security, retired Gen. John Kelly would have the authority to carry out some of Donald Trump’s most aggressive proposals. These include the erection of a massive wall along the southern border, the jailing and deportation of millions of immigrants, and the transfer of military-style technology to local police departments.
Sitting alongside him at today’s Senate confirmation hearing were some powerful allies: Sen. John McCain, Sen. Tom Carper, and Bob Gates, the former head of the Pentagon and CIA who is now principal of the consulting firm Rice Hadley Gates LLC, which was reportedly instrumental in the selection of Rex Tillerson, the CEO of Exxon, a Rice Hadley Gates client, as secretary of state.
The words “truth to power,” an endorsement of Kelly uttered by former CIA Director Leon Panetta to the New York Times yesterday, were repeated several times, including in Kelly’s written answers to the committee’s questions. Gates called Kelly a “straight-talking, candid, courageous leader” and “a man of great moral authority.” Carper said “he knows what is right” and will “use common sense.” Kelly assured the committee that “I believe in respect, tolerance, and diversity of opinion.”
While the word “Trump” was not mentioned in any of their opening remarks, the argument was clear: Kelly will push back on the crazier tendencies of the man he hopes to serve.
How does it feel to be called a racist? In today’s hearing on Jeff Sessions’s confirmation for the job of attorney general, his fellow senator, Lindsey Graham, commiserated with him about being a southern conservative and having to deal with the label. It was a sorry show of white fragility of the sort you usually see on Twitter.
In a hearing punctuated by sympathetic comments and softball questions, Graham’s question struck a particularly farcical note.
“I’m from South Carolina. So I know what it’s like sometimes to be accused of being a conservative from the South,” said Graham. “In your case, people have tried fairly promptly to label you as a racist or a bigot or whatever you want to say. How does that make you feel?”
Protesters answered that before Sessions could — shouting, as others had earlier in the hearing, “No Trump, no KKK, no fascist USA,” before being removed from the room. But after Graham chuckled a joke about “clearing the room” for Sessions, the nominee replied with complete tone deafness.
“Well it does not feel good,” Sessions said. “I didn’t prepare myself well in 1986,” when the Senate rejected his nomination to a federal judgeship on the grounds that he lacked racial sensitivity, “and there was an organized effort to characterize myself as something that wasn’t true. It was very painful.”
Sessions was doing what some people across the country can’t seem to stop doing either — getting more upset over the charge of racism than over racism itself. Racism is not a matter of how racists, or those accused of racism, feel — it’s about how the lives of those on the receiving end of racist views and systems are affected. It would be great if elected officials could focus on the actual impact of racism rather than the hurt feelings of those called out for their racism.
A future attorney general should be asked about whether he will be able to apply the law equally and fairly — not about how being called a racist makes him “feel.” While Sessions’s moral character is relevant, and supposedly under scrutiny in this hearing, his “feelings” are not.
Sessions’s next statement — which referred to discrimination as an evil of the past — was no less tone deaf. “I just want you to know that as a southerner, who actually saw discrimination and have no doubt it existed in a systematic and powerful and negative way to the people, great millions of people in the south particularly of our country,” he said. “I know that was wrong.”
Except, of course, it still is — something the man who will soon be tasked with fighting that discrimination can’t seem to comprehend.
As a part of the confirmation process, attorney general nominee Jeff Sessions was asked to fill out a Senate Judiciary Committee questionnaire that asked him, among other things, to list the 10 “most significant litigated matters which you personally handled.” Among the 10 he listed were four civil rights cases during his tenure as the U.S. attorney for Alabama — three dealing with voting rights and a fourth case about school desegregation.
Three former Department of Justice officials, who had handled three of those four cases, wrote an op-ed in the Washington Post on January 3 saying that Sessions had “no substantive involvement in any of them.”
In a tense exchange at today’s confirmation hearing with Minnesota Democratic Sen. Al Franken, D-Minn., Sessions struggled to define his role.
“I signed ’em. I supported cases and attempted to be as helpful as I could be in helping them be successful in these historic cases,” Sessions said. “If I’m in error I apologize to you. I don’t think I was.”
Franken was clearly not satisfied: “Our country needs an attorney general who doesn’t misrepresent or inflate his involvement on any issue,” he concluded.
Joe D. Rich, one of the former DOJ officials who wrote the Post op-ed, told The Intercept today that he had never met Sessions and that Sessions had no involvement in the case he handled, which dealt with school desegregation. That case revolved around a segregation complaint against a school district in Alabama that was originally filed in 1963 and was not resolved until 1997.
“I never even met Jeff Sessions, and clearly he didn’t have any input into the case when I was working on it,” Rich said.
Rich also forwarded a statement he provided to the committee in which he noted that in 1985 he filed a 39-page supplemental brief in the segregation case and that Sessions’s “name is not listed anywhere on this brief nor on the certificate of service and he had no input into the drafting or review of the brief. Nor did he advise or guide me in any way in the drafting of the brief or any other aspect of the case.”
With respect to Sessions’s name being on the other cases, Rich described it as simply routine — and not evidence that he was personally involved. “Typically — and often required by the local court — the U.S. attorney would often sign the complaint or his name would be on the complaint that was filed and then he would usually have his name on any subsequent briefs or pleadings that were filed on the case,” he said. “That was basically what he did in these cases.”
Gerald Hebert, another civil rights official at DOJ who co-wrote the Post op-ed, disputed Sessions’s claims on MSNBC. “He didn’t sign any papers in the Dallas case or the Marengo case,” Hebert said, pointing to two Alabama civil rights cases that Sessions listed in the questionnaire. “In fact, he questioned the theory and policy and said our cases in his view didn’t have merit.”
Donald Trump’s pick to lead the Department Homeland Security, retired Marine Corps Gen. John Kelly, quietly holds an adviser role at DynCorp International, a position that provided the bulk of his income over the last year, new disclosures show.
The DynCorp position is not listed on the company website and news archives show no information about Kelly’s work for the contractor.
DynCorp did not respond to a request for comment. Kelly’s financial disclosure form, published today by the Office of Government Ethics, shows that Kelly began working at the firm as an advisor in June 2016, only five months after retiring from his position as the commander of U.S. Southern Command.
Kelly is testifying this afternoon before the Senate Homeland Security and Government Affairs Committee.
DynCorp is a major player in the federal contracting industry with a controversial history. The Special Inspector General for Iraq Reconstruction found that DynCorp mishandled funds used in Baghdad. DynCorp also managed a police training program in Afghanistan that was caught hiring “dancing boys” to entertain tribal leaders, a scandal revealed in part by Wikileaks.
The firm also has business before the agency Kelly hopes to lead. In August of last year, DynCorp was awarded a contract to provide training services to the Department of Homeland Security and other affiliated agencies, including Immigration and Customs Enforcement.
DynCorp paid Kelley $166,666 in the six months since hiring him, providing about two-thirds of his overall income over the last 12 months. The financial disclosure form shows that Kelly also receives a salary from Beacon Global Strategies, a consulting firm that advising defense contractors, and receives fees via board positions at DC Capital Partners, a private equity investment firm. He has also been paid by Flatter & Associates, a government contractor.
“Upon confirmation, I will resign from my positions with the following entities: DynCorp; DC Capital Partners; Flatter & Associates; and Beacon Global Strategies,” Kelly wrote last week to ethics officials at Homeland Security.
Kelly joins other Trump officials with deep ties to the homeland security contracting industry. As we’ve reported, Lora Ries, a former lobbyist for surveillance firms, was named by the Trump’s team to help guide the transition at the Department of Homeland Security.
Departing from Donald Trump’s campaign promise to bring back “a hell of a lot worse than waterboarding,” Sen. Jeff Sessions acknowledged the 2015 law that Congressed passed that prohibits it and other forms of torture.
“Congress has taken an action now that makes it absolutely improper and illegal to use waterboarding or any other form of torture in the United by our military and by all our other departments and agencies,” Sessions said during his confirmation hearing as attorney general.
Sessions voted against the measure, which passed the Senate 78-21.
Sessions maintained that “there was a dispute” about whether waterboarding constituted torture, a claim that rights groups passionately dispute.
Sessions also argued that waterboarding was conducted by the intelligence agencies, not the military, and that the military’s “rules were maintained” — overlooking prisoner abuse at military bases in Bagram, Afghanistan, and the Abu Ghraib prison in Iraq, where prisoners were beaten, stripped naked, intimidated by dogs, and raped.
Law enforcement lobbyists back the nomination of Jeff Sessions as attorney general in part because they want to seize more cash and property from criminal suspects and they want military hardware.
The Major County Sheriffs’ Association, a lobby group representing elected sheriffs, wrote to the Senate Judiciary Committee to endorse Sessions as a “uniquely qualified candidate” in part on account of his views on issues including military surplus equipment and asset forfeiture. Jonathan Thompson, the chief executive of the National Sheriffs Association, was even more blunt. Sessions “understands the importance of the 1033 Program that provides excess, protective resources and equipment law enforcement needs to carry out their duty,” Thompson wrote, strongly endorsing the Alabama senator’s nomination.
Police and law enforcement groups are hoping that Donald Trump’s administration rolls back some of the reforms in these areas during the last few years.
The Obama administration ended the transfer of some categories of military equipment to local police, including grenade launchers and bayonets. The administration also attempted a partial reform of the controversial “Equitable Sharing” program under the Department of Justice, by which the federal government partners with state and local police agencies to seize cash and property believed to be used in association with a crime. The program, which has been criticized for creating unjust monetary incentives for law enforcement, has netted over $3 billion worth of assets since 2008. Asset forfeiture programs have not ended, and there are still circumstances that allow the Equitable Sharing program to continue.
Despite relatively small-scale reforms, the changes have enraged law enforcement lobbyists, who now are hoping that Sessions will take a new approach. Sessions has spoke out in defense of asset forfeiture, and is believed to share Trump’s support of the 1033 program.
During his confirmation hearing Tuesday, Sen. Jeff Sessions was asked by fellow Republican Sen. Lindsey Graham about President Obama’s Deferred Action for Childhood Arrivals executive order, or DACA, which allowed 750,000 undocumented immigrants who were brought to the U.S. as children to apply for relief from deportation and obtain work permits.
“It would certainly be constitutional, I believe, to end that order,” said Sessions, who has fiercely opposed immigration reform throughout his Senate career.
No surprises there — but Sessions dodged Graham’s followup question: What about the 800,000 kids that “came out of the shadows” as a result of it? Sessions hemmed and hawed and declared that “We’ve been placed in a bad situation.”
He dodged the question again when Sen. Dick Durbin noted he hadn’t answered Graham, and asked: “What is going to happen to them? What is the humane, legal answer to that?”
The closest Sessions came to answering was to say that “We’re not able to seek out and remove everyone who’s in the country illegally” and that deporting criminals is a higher priority.
“That does not answer the question,” Durbin fired back.
“Well I thought it did answer it pretty closely,” Sessions told Durbin.
The question is one that DACA recipients across the country have been agonizing over since Donald Trump’s election. “We really don’t know how to prepare,” said Carlos Vargas, who came to the U.S. when he was 4 and in 2012 jumped at the chance to get a driver’s license, a work permit, and a social security number. “We feel like our hands are tied behind our backs.”
It’s unclear what canceling DACA would mean to, as President Obama has said, “what for all practical purposes are American kids.” They could lose work authorization, driver’s licenses, and other protections that came with the order.
But many also fear the government will now use the information it has compiled to track them down and deport them.
“They know how to reach them if they really want to,” Juan Cartagena, president of the civil rights group Latino Justice, told The Intercept. “The real question now is one of constitutional rights. To what extent would a court ever permit people who in good faith relied upon the government to defer deportation and willingly gave information, to now turn around and take those people and remove them forcibly, to rely on the federal government to protect you and then for them to turn around and use that against you?”
Sessions wouldn’t say.
Sen. Jeff Sessions — whose confirmation hearing as attorney general is underway before the Senate Judiciary Committee — has made one thing clear: he doesn’t believe the Department of Justice should “intrude” on local authority and impose change through consent decrees, which in 2008 he called “an end run around the democratic process.”
But that’s exactly what the DOJ has been doing for the past eight years: pushing police reform by investigating police departments across the country, calling them out on their systemic bias and abuse, and forcing them to agree to change or face suit.
Under the Obama administration, the consent decree process, which as The Intercept reported before, has many limitations and has involved communities into police reform efforts more than ever before.
It has also angered “law and order” proponents like Sessions — leaving civil rights advocates fearing that the next attorney general will be unwilling to “police the police.”
Read The Intercept’s report on the DOJ’s police reform work over the last year, and on the investigations and consent decrees that remain pending, including in Chicago and Baltimore.
Sen. Jeff Sessions flatly prioritized law and order and support for police over civil rights in his opening statement before the Senate Judiciary Committee, which today considers confirming him as the next attorney general.
In fact, the first civil right he mentioned is not a civil right at all. “It is a fundamental civil right to be safe in your home and your community,” he said.
Much of his statement echoed statements by his would-be boss, Donald Trump, positing the police as victims.
He explained: “If we are to be more effective in dealing with rising crime, we will have to rely heavily on local law enforcement to lead the way. To do that, they must know that they are supported. If I am so fortunate as to be confirmed as attorney general, they can be assured that they will have my support.”
His only nod to prosecuting police misconduct was a line that was apparently a late addition — it was not in his prepared text. “When police fail in their duties, they must be held accountable,” he said, after also throwing in an acknowledgement of “minority communities.”
Sessions did note the importance of voting rights: “The Department of Justice must never falter in its obligation to protect the civil rights of every American, particularly those who are most vulnerable. A special priority for me in this regard will be aggressive enforcement of our laws to ensure access to the ballot for every eligible American voter, without hindrance or discrimination, and to ensure the integrity of the electoral process.”
But he immediately followed that with even more vigorous language about the need to protect the United States Treasury from waste, fraud, and abuse. “We cannot afford to lose a single dollar to corruption and you can be sure that if I am confirmed, I will make it a high priority of the department to root out and prosecute fraud in federal programs and to recover any monies lost due to fraud or false claims.”
He eventually got to a grudging and unenthusiastic endorsement of other civil rights — after again mentioning crime: “You can be absolutely sure that I understand the immense responsibility I would have. I am not naïve. I know the threat that our rising crime and addiction rates pose to the health and safety of our country. I know the threat of terrorism. I deeply understand the history of civil rights and the horrendous impact that relentless and systemic discrimination and the denial of voting rights has had on our African-American brothers and sisters. I have witnessed it. I understand the demands for justice and fairness made by the LGBT community. I understand the lifelong scars born by women who are victims of assault and abuse.”
And the penultimate paragraph of his opening statement restates his major theme: “While all humans must recognize the limits of their abilities — and I do — I am ready for this job. We will do it right. Your input will be valued. Local law enforcement will be our partners. My many friends in federal law enforcement will be respected.”