Michael Flynn’s ties to Russia under investigation

The Wall Street Journal reports: U.S. counterintelligence agents have investigated communications that President Donald Trump’s national security adviser had with Russian officials, according to people familiar with the matter.

Michael Flynn is the first person inside the White House under Mr. Trump whose communications are known to have faced scrutiny as part of investigations by the Federal Bureau of Investigation, Central Intelligence Agency, National Security Agency and Treasury Department to determine the extent of Russian government contacts with people close to Mr. Trump.

It isn’t clear when the counterintelligence inquiry began, whether it produced any incriminating evidence or if it is continuing. Mr. Flynn, a retired general who became national security adviser with Mr. Trump’s inauguration, plays a key role in setting U.S. policy toward Russia.

The counterintelligence inquiry aimed to determine the nature of Mr. Flynn’s contact with Russian officials and whether such contacts may have violated laws, people familiar with the matter said.

A key issue in the investigation is a series of telephone calls Mr. Flynn made to Sergey Kislyak, the Russian ambassador to the U.S., on Dec. 29. That day, the Obama administration announced sanctions and other measures against Russia in retaliation for its alleged use of cyberattacks to interfere with the 2016 U.S. election. U.S. intelligence officials have said Russian President Vladimir Putin ordered the hacks on Democratic Party officials to try to harm Hillary Clinton’s presidential bid.

Officials also have examined earlier conversations between Mr. Flynn and Russian figures, the people familiar with the matter said. Russia has previously denied involvement in election-related hacking.

In a statement Sunday night, White House spokeswoman Sarah Sanders said: “We have absolutely no knowledge of any investigation or even a basis for such an investigation.” [Continue reading…]

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FBI, CIA, NSA, Justice, and Treasury departments probe possible covert Kremlin aid to Trump

McClatchy reports: The FBI and five other law enforcement and intelligence agencies have collaborated for months in an investigation into Russian attempts to influence the November election, including whether money from the Kremlin covertly aided President-elect Donald Trump, two people familiar with the matter said.

The agencies involved in the inquiry are the FBI, the CIA, the National Security Agency, the Justice Department, the Treasury Department’s Financial Crimes Enforcement Network and representatives of the director of national intelligence, the sources said.

Investigators are examining how money may have moved from the Kremlin to covertly help Trump win, the two sources said. One of the allegations involves whether a system for routinely paying thousands of Russian-American pensioners may have been used to pay some email hackers in the United States or to supply money to intermediaries who would then pay the hackers, the two sources said.

The informal, inter-agency working group began to explore possible Russian interference last spring, long before the FBI received information from a former British spy hired to develop politically damaging and unverified research about Trump, according to the sources, who spoke on the condition of anonymity because of the sensitive nature of the inquiry. [Continue reading…]

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To avoid a 2016 crash, the major powers need to pull in the same direction

By Anton Muscatelli, University of Glasgow

It looks already as if 2016 will be a pivotal year for the world economy. RBS has advised investors to “sell everything except for high-quality bonds” as turmoil has returned to stock markets. The Dow Jones and S&P indices have fallen by more than 6% since the start of the year, which is the worst ever yearly start. There is a similar story in other major markets, with the FTSE leading companies losing some £72bn of value in the same period.

These declines have come on the back of a major shock to the Chinese stock market. China’s stock exchange is very different from that of other major economies, as Chinese companies don’t rely on it to fund themselves to the same extent, using debt instead. All the same, the repeated suspensions of trading as the Chinese circuit-breakers came into operation (as they do when share prices fall too sharply) spooked investors around the world.

On top of that we are seeing commodity prices continuing to retreat. Oil prices have dropped towards $30 per barrel and don’t look likely to increase soon, with Iranian and Saudi oil production continuing to sustain supply. We are seeing many emerging economies dependent on petroleum revenues suffering (Brazil, Russia), and there is speculation that many oil producers (and perhaps even Saudi Arabia) are having to abandon their currencies’ link with the US dollar.

[Read more…]

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The $7 trillion secret loan program. The government and big banks should be punished

Eliot Spitzer writes: Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.

Yet this is exactly what the major American banks have done to the public. During the deepest, darkest period of the financial cataclysm, the CEOs of major banks maintained in statements to the public, to the market at large, and to their own shareholders that the banks were in good financial shape, didn’t want to take TARP funds, and that the regulatory framework governing our banking system should not be altered. Trust us, they said. Yet, unknown to the public and the Congress, these same banks had been borrowing massive amounts from the government to remain afloat. The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone — without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending. And although it has since been repaid, it is clear why the banks didn’t want us to know about it: They didn’t want to admit the magnitude of their financial distress.

The banks’ claims of financial stability and solvency appear at a minimum to have been misleading—and may have been worse. Misleading statements and deception of this sort would ordinarily put a small-market player or borrower on the wrong end of a criminal investigation.

So where are the inquiries into the false statements made by the bank CEOs? And where are the inquiries about the Fed and Treasury officials who stood by silently as bank representatives made claims that were false, misleading, or worse?

Only now, because of superb analysis done by Bloomberg reporters — who litigated against the Fed and the banks for years to get the information — are we getting a full picture of the Fed and Treasury lending. The reporters also calculated that recipient banks and other borrowers benefited by approximately $13 billion simply by taking advantage of the “spread” between their cost of capital in these almost interest-free loans and their ability to lend the capital.

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