Trump’s business of corruption

Adam Davidson writes: President Donald Trump’s attorney Jay Sekulow recently told me that the investigation being led by Robert Mueller, the special counsel appointed by the Justice Department, should focus on one question: whether there was “coördination between the Russian government and people on the Trump campaign.” Sekulow went on, “I want to be really specific. A real-estate deal would be outside the scope of legitimate inquiry.” If he senses “drift” in Mueller’s investigation, he said, he will warn the special counsel’s office that it is exceeding its mandate. The issue will first be raised “informally,” he noted. But if Mueller and his team persist, Sekulow said, he might lodge a formal objection with the Deputy Attorney General, Rod Rosenstein, who has the power to dismiss Mueller and end the inquiry. President Trump has been more blunt, hinting to the Times that he might fire Mueller if the investigation looks too closely at his business dealings.

Several news accounts have confirmed that Mueller has indeed begun to examine Trump’s real-estate deals and other business dealings, including some that have no obvious link to Russia. But this is hardly wayward. It would be impossible to gain a full understanding of the various points of contact between the Kremlin and the Trump campaign without scrutinizing many of the deals that Trump has made in the past decade. Trump-branded buildings in Toronto and the SoHo neighborhood of Manhattan were developed in association with people who have connections to the Kremlin. Other real-estate partners of the Trump Organization—in Brazil, India, Indonesia, and elsewhere—are now caught up in corruption probes, and, collectively, they suggest that the company had a pattern of working with partners who exploited their proximity to political power.

One foreign deal, a stalled 2011 plan to build a Trump Tower in Batumi, a city on the Black Sea in the Republic of Georgia, has not received much journalistic attention. But the deal, for which Trump was reportedly paid a million dollars, involved unorthodox financial practices that several experts described to me as “red flags” for bank fraud and money laundering; moreover, it intertwined his company with a Kazakh oligarch who has direct links to Russia’s President, Vladimir Putin. As a result, Putin and his security services have access to information that could put them in a position to blackmail Trump. (Sekulow said that “the Georgia real-estate deal is something we would consider out of scope,” adding, “Georgia is not Russia.”) [Continue reading…]

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Paul Manafort sought $850 million deal with Putin ally and alleged gangster

The Daily Beast reports: Paul Manafort partnered on an $850 million New York real-estate deal with an ally of Vladimir Putin and a Ukrainian moneyman whom the Justice Department recently described as an “organized-crime member.”

That’s according a 2008 memo written by Rick Gates, Manafort’s business partner and fellow alumnus of Donald Trump’s presidential campaign. In it, Gates enthused about finalizing with the financing necessary to acquire New York’s louche Drake Hotel.

Two former federal prosecutors told The Daily Beast that the hotel deal was likely to be an item of focus for special counsel Robert Mueller’s inquiry into ties between Trump associates and the Kremlin.

Some White House officials, who spoke to The Daily Beast on condition of anonymity, are also wary. They feel Manafort may have made President Trump more legally vulnerable through his decades of business deals with foreign governments and shady Eastern European power brokers. Those deals, these White House aides suspect, led federal investigators down a money trail that threatens to plunge the Trump White House further into legal jeopardy. [Continue reading…]

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How a conservative TV giant is ridding itself of regulation

The New York Times reports: The day before President Trump’s inauguration, the top executive of the Sinclair Broadcast Group, the nation’s largest owner of television stations, invited an important guest to the headquarters of the company’s Washington-area ABC affiliate.

The trip was, in the parlance of the business world, a deal closer.

The invitation from David D. Smith, the chairman of Sinclair, went to Ajit V. Pai, a commissioner on the Federal Communications Commission who was about to be named the broadcast industry’s chief regulator. Mr. Smith wanted Mr. Pai to ease up on efforts under President Barack Obama to crack down on media consolidation, which were threatening Sinclair’s ambitions to grow even bigger.

Mr. Smith did not have to wait long.

Within days of their meeting, Mr. Pai was named chairman of the F.C.C. And during his first 10 days on the job, he relaxed a restriction on television stations’ sharing of advertising revenue and other resources — the exact topic that Mr. Pai discussed with Mr. Smith and one of his business partners, according to records examined by The New York Times.

“These are invaluable and effective tools, which were taken away by the commission,” according to a summary of their meeting filed with the F.C.C.

It was only the beginning. Since becoming chairman in January, Mr. Pai has undertaken a deregulatory blitz, enacting or proposing a wish list of fundamental policy changes advocated by Mr. Smith and his company. Hundreds of pages of emails and other documents obtained under the Freedom of Information Act reveal a rush of regulatory actions has been carefully aligned with Sinclair’s business objectives. [Continue reading…]

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Pressure mounts on Netanyahu as aide agrees to testify

The Washington Post reports: Israeli Prime Minister Benjamin Netanyahu is known for being a political survivor, but the revelation this week that a former top aide will testify against him has led to speculation that his indictment in relation to allegations of corruption is increasingly inevitable.

Ari Harow, who served as Netanyahu’s chief of staff, will turn state’s witness in two probes into the premier, Israeli police said Friday. Netanyahu has repeatedly denied any wrongdoing.

The details of the investigations — from the Cuban cigars and other lavish gifts Netanyahu is alleged to have received from prominent business executives to allegations of collusion with Israel’s dominant newspaper for favorable news coverage — have gripped Israel in recent months. Harow’s agreement to testify though, significantly ramps up pressure on the premier, now serving his fourth term. [Continue reading…]

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Kushner companies said to be under investigation over visa program

The New York Times reports: Federal prosecutors are investigating Kushner Companies, the real estate firm owned by the family of Jared Kushner, the president’s son-in-law and senior adviser, over its use of a program that grants visas to wealthy overseas investors.

The authorities, in part, are looking into the role of Mr. Kushner’s sister, Nicole Meyer, according to a person familiar with the matter who confirmed the inquiry.

The investigation centers on the real estate company’s use of the so-called EB-5 program, which offers visas to foreigners in exchange for a $500,000 investment. Critics say the program has weak oversight and lax rules.

At a marketing event in May, Ms. Meyer promoted the company’s connections to the Trump administration as she courted Chinese investors for a pair of luxury apartment towers being built by the Kushner Companies in New Jersey. The project “means a lot to me and my entire family,” she told prospective investors at the Ritz-Carlton Hotel in Beijing.

Mr. Kushner gave up his role running the family company in January. He still owns a significant piece of the business. [Continue reading…]

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Bill Browder’s testimony to the Senate Judiciary Committee

Bill Browder, the driving force behind the 2012 Magnitsky Act, writes: I had always thought Putin was a nationalist. It seemed inconceivable that he would approve of his officials stealing $230 million from the Russian state. Sergei [Magnitsky] and I were sure that this was a rogue operation and if we just brought it to the attention of the Russian authorities, the “good guys” would get the “bad guys” and that would be the end of the story.

We filed criminal complaints with every law enforcement agency in Russia, and Sergei gave sworn testimony to the Russian State Investigative Committee (Russia’s FBI) about the involvement of officials in this crime.

However, instead of arresting the people who committed the crime, Sergei was arrested. Who took him? The same officials he had testified against. On November 24, 2008, they came to his home, handcuffed him in front of his family, and threw him into pre-trial detention.

Sergei’s captors immediately started putting pressure on him to withdraw his testimony. They put him in cells with 14 inmates and eight beds, leaving the lights on 24 hours a day to impose sleep deprivation. They put him in cells with no heat and no windowpanes, and he nearly froze to death. They put him in cells with no toilet, just a hole in the floor and sewage bubbling up. They moved him from cell to cell in the middle of the night without any warning. During his 358 days in detention he was forcibly moved multiple times.

They did all of this because they wanted him to withdraw his testimony against the corrupt Interior Ministry officials, and to sign a false statement that he was the one who stole the $230 million—and that he had done so on my instruction.

Sergei refused. In spite of the grave pain they inflicted upon him, he would not perjure himself or bear false witness.

After six months of this mistreatment, Sergei’s health seriously deteriorated. He developed severe abdominal pains, he lost 40 pounds, and he was diagnosed with pancreatitis and gallstones and prescribed an operation for August 2009. However, the operation never occurred. A week before he was due to have surgery, he was moved to a maximum security prison called Butyrka, which is considered to be one of the harshest prisons in Russia. Most significantly for Sergei, there were no medical facilities there to treat his medical conditions.

At Butyrka, his health completely broke down. He was in agonizing pain. He and his lawyers wrote 20 desperate requests for medical attention, filing them with every branch of the Russian criminal justice system. All of those requests were either ignored or explicitly denied in writing.

After more than three months of untreated pancreatitis and gallstones, Sergei Magnitsky went into critical condition. The Butyrka authorities did not want to have responsibility for him, so they put him in an ambulance and sent him to another prison that had medical facilities. But when he arrived there, instead of putting him in the emergency room, they put him in an isolation cell, chained him to a bed, and eight riot guards came in and beat him with rubber batons.

That night he was found dead on the cell floor.

Sergei Magnitsky died on November 16, 2009, at the age of 37, leaving a wife and two children. [Continue reading…]

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Secret donations are helping to boost Trump’s agenda, fights with investigators

USA Today reports: Groups spending millions in anonymous donations are leading the outside efforts to either defend President Trump or sell his agenda with voters and Congress, despite the president’s repeated calls to “drain the swamp” in Washington of special-interest money.

The political empire affiliated with billionaire Charles Koch has spent $2 million to date to advance Trump’s tax-cut blueprint and will hold events this week in Washington to kick off the next phase of its multimillion-dollar campaign to drive congressional support for a comprehensive tax plan to slice corporate tax rates and enact broader tax cuts.

Americans for Prosperity, the Koch network’s grass-roots arm, already has 50 events scheduled in August and September to help promote the tax plan.

The pro-Trump Great America Alliance is spending $450,000 on a TV and digital ad that casts special counsel Robert Mueller’s probe into possible collusion between Russia and Trump’s campaign as a “rigged game.”

The group already has pumped more than $3 million in advertising to advance Trump’s policies and has committed to spending $5 million more, said Eric Beach, a Republican strategist who helps run the group.

The Judicial Crisis Network, which spent $7 million to push Trump’s top judicial nominee, Supreme Court Justice Neil Gorsuch, is “prepared to spend whatever we need to spend to help President Trump fulfill his promise of restoring balance to our federal courts,” policy director Carrie Severino said in a statement.

Trump has more than 100 judicial vacancies to fill.

Another pro-Trump group, America First Policies, has spent $5 million push his agenda and to help a Trump-supported congressional candidate in Georgia.

All operate as nonprofits, can accept unlimited funds from virtually any source but are not required to disclose their donors publicly. [Continue reading…]

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Here’s the real reason Anthony Scaramucci hates Reince Priebus

HuffPost reports: In the public feud between Anthony Scaramucci and Reince Priebus, what hasn’t been fully explained is why Scaramucci so dislikes the president’s now-former chief of staff — a man he alternates between calling “Reince Penis” and “Rancid Penis,” according to an adviser to the White House.

The acrimony first surfaced during the presidential transition. The two men had been cordial before then. They met six years ago, when Scaramucci was a fundraiser for presidential candidate Mitt Romney and Priebus was chair of the Republican National Committee. They interacted peaceably during Donald Trump’s campaign as Scaramucci made the rounds on television and at donor events.

After Trump’s victory, Priebus was named chief of staff, and Scaramucci, according to someone close to the transition, was assured that he was also in line for a big position within the administration. (Sources for this story requested anonymity to discuss the details of sensitive conversations.)

While preparing for his move into government, Scaramucci struck a deal — which is still under regulatory scrutiny — to sell his stake in his hedge fund, SkyBridge Capital, to Chinese conglomerate HNA Group and another company. He assumed that he’d be put in charge of the public liaison office, a job that Valerie Jarrett held in the Obama administration. He had it all mapped out, according to the White House adviser. He identified 2,500 influential business leaders across the United States and had come up with a clever name for them: Trump Team 2,500. He believed these people would help pressure Congress into supporting the president’s agenda.

But Scaramucci’s plans were foiled in early January. That’s when Priebus, according to a confidant of both Scaramucci and the president, told Trump, “He played you.”

“How’s that?” Trump asked Priebus, according to the same source, who has spoken to several people within the White House about the conversation.

Priebus then told Trump that he felt Scaramucci had been offered too much for SkyBridge by HNA Group. The deal, he implied, smelled bad — as if the Chinese might expect favors from within the administration for that inflated price. The source also said that Priebus mentioned there was email traffic between Scaramucci and the Chinese proving this. [Continue reading…]

The Washington Post reports: Allies to Priebus said he told them he had resigned on Thursday, concluding that the internal chaos would only escalate. One Priebus friend said the chief of staff had described the situation as “unsustainable,” saying he felt demeaned by the president’s treatment of him and was frustrated that he could not assert control over basic White House functions, such as policy development, communications and even White House announcements — which sometimes were made impulsively by the president, such as this week’s announcement to ban transgender people from serving in the military.

But some White House officials said the decision for Priebus to depart was made by Trump — a decision that had been a couple weeks in the making — and that the president forced him on Friday. These officials noted that Priebus presided over the morning senior staff meeting and accompanied Trump to a law enforcement event in New York.

Regardless, his final departure was a humiliating coda for what had been a largely demeaning tenure during which Priebus endured regular belittling and emasculation from rival advisers — and even, at times, the president himself.

When Air Force One touched down Friday afternoon at Andrew’s Air Force Base, Priebus, senior policy adviser Stephen Miller and social media director Dan Scavino all loaded into a Suburban. But moments later, Miller and Scavino hopped out of the vehicle, and as word trickled out about the chief of staff’s ouster, reporters inched close to snap photos of Priebus, who sat alone on the rain-soaked tarmac. Priebus’ vehicle then pulled out of the presidential motorcade, which proceeded along to the White House without him.

“I think any observer — including one that did not speak English and knew nothing about politics and came from another planet and solar system — could, after observing the situation in the White House, realize the White House is failing,” said one informal White House adviser, who spoke on the condition of anonymity to share a candid assessment. “And when the White House is failing, you can’t replace the president.” [Continue reading…]

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U.S. investigators seek to turn Manafort in Russia probe

Reuters reports: U.S. investigators examining money laundering accusations against President Donald Trump’s former campaign manager Paul Manafort hope to push him to cooperate with their probe into possible collusion between Trump’s campaign and Russia, two sources with direct knowledge of the investigation said.

Special Counsel Robert Mueller’s team is examining Manafort’s financial and real estate records in New York as well as his involvement in Ukrainian politics, the officials said.

Between 2006 and 2013, Manafort bought three New York properties, including one in Trump Tower in Manhattan. He paid for them in full and later took out mortgages against them. A former senior U.S. law enforcement official said that tactic is often used as a means to hide the origin of funds gained illegally. Reuters has no independent evidence that Manafort did this.

The sources also did not say whether Mueller has uncovered any evidence to charge Manafort with money laundering, but they said doing so is seen by investigators as critical in getting his full cooperation in their investigation. [Continue reading…]

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Mueller investigating possible money laundering by Paul Manafort

The Wall Street Journal reports: Special Counsel Robert Mueller is investigating possible money laundering by Paul Manafort, Donald Trump’s former campaign manager, as part of his criminal investigation into what U.S. intelligence agencies say was a Kremlin-backed campaign to meddle in the 2016 presidential election, according to a person familiar with the matter.

The inquiry into the issue by Mr. Mueller, a former director of the Federal Bureau of Investigation, and his team began several weeks ago, this person said. A spokesman for Mr. Manafort, Jason Maloni, declined to comment, as did a spokesman for Mr. Mueller. [Continue reading…]

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Mueller expands probe to Trump business transactions

Bloomberg reports: The U.S. special counsel investigating possible ties between the Donald Trump campaign and Russia in last year’s election is examining a broad range of transactions involving Trump’s businesses as well as those of his associates, according to a person familiar with the probe.

FBI investigators and others are looking at Russian purchases of apartments in Trump buildings, Trump’s involvement in a controversial SoHo development in New York with Russian associates, the 2013 Miss Universe pageant in Moscow and Trump’s sale of a Florida mansion to a Russian oligarch in 2008, the person said.

The investigation also has absorbed a money-laundering probe begun by federal prosecutors in New York into Trump’s former campaign chairman Paul Manafort.

John Dowd, one of Trump’s lawyers, said on Thursday that he was unaware of the inquiry into Trump’s businesses by the two-months-old investigation and considered it beyond the scope of what Special Counsel Robert Mueller should be examining.

“Those transactions are in my view well beyond the mandate of the Special counsel; are unrelated to the election of 2016 or any alleged collusion between the Trump campaign and Russia and most importantly, are well beyond any Statute of Limitation imposed by the United States Code,” he wrote in an email. [Continue reading…]

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Exxon sues U.S. over fine levied for Russia deal under Tillerson

Reuters reports: Exxon Mobil Corp sued the U.S. government on Thursday, blasting as “unlawful” and “capricious” a $2 million fine levied against it for a three-year-old oil joint venture with Russia’s Rosneft.

The U.S. Treasury Department on Thursday morning slapped the world’s largest publicly traded oil producer with the fine for “reckless disregard” of U.S. sanctions in dealings with Russia in 2014 when Secretary of State Rex Tillerson was Exxon’s chief executive.

The lawsuit and the Treasury’s unusually detailed statement on Exxon’s conduct represented an extraordinary confrontation between a major American company and the U.S. government, made all the more striking because Exxon’s former CEO is now in President Donald Trump’s Cabinet.

Exxon took the government to court despite the fact that the fine, the maximum allowed, would have a minor impact on the company, which made $7.84 billion in profit last year.

The fine came after a U.S. review of deals Exxon signed with Rosneft, Russia’s largest oil producer, weeks after Washington imposed sanctions on Moscow for annexing Ukraine’s Crimea region. [Continue reading…]

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Manafort was in debt to pro-Russia interests, Cyprus records show

The New York Times reports: Financial records filed last year in the secretive tax haven of Cyprus, where Paul J. Manafort kept bank accounts during his years working in Ukraine and investing with a Russian oligarch, indicate that he had been in debt to pro-Russia interests by as much as $17 million before he joined Donald J. Trump’s presidential campaign in March 2016.

The money appears to have been owed by shell companies connected to Mr. Manafort’s business activities in Ukraine when he worked as a consultant to the pro-Russia Party of Regions. The Cyprus documents obtained by The New York Times include audited financial statements for the companies, which were part of a complex web of more than a dozen entities that transferred millions of dollars among them in the form of loans, payments and fees.

The records, which include details for numerous loans, were certified as accurate by an accounting firm as of December 2015, several months before Mr. Manafort joined the Trump campaign, and were filed with Cyprus government authorities in 2016. The notion of indebtedness on the part of Mr. Manafort also aligns with assertions made in a court complaint filed in Virginia in 2015 by the Russian oligarch, Oleg V. Deripaska, who claimed Mr. Manafort and his partners owed him $19 million related to a failed investment in a Ukrainian cable television business.

After The Times shared some of the documents with representatives of Mr. Manafort, a spokesman, Jason Maloni, did not address whether the debts might have existed at one time. But he maintained that the Cyprus records were “stale and do not purport to reflect any current financial arrangements.”

“Manafort is not indebted to Mr. Deripaska or the Party of Regions, nor was he at the time he began working for the Trump campaign,” Mr. Maloni said. “The broader point, which Mr. Manafort has maintained from the beginning, is that he did not collude with the Russian government to influence the 2016 election.” (Mr. Manafort resigned as campaign manager last August amid questions about his past work in Ukraine.)

Still, the Cyprus documents offer the most detailed view yet into the murky financial world inhabited by Mr. Manafort in the years before he joined the Trump campaign. [Continue reading…]

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Deutsche Bank, key to Trump’s finances, faces new scrutiny

The New York Times reports: During the presidential campaign, Donald J. Trump pointed to his relationship with Deutsche Bank to counter reports that big banks were skeptical of doing business with him.

After a string of bankruptcies in his casino and hotel businesses in the 1990s, Mr. Trump became somewhat of an outsider on Wall Street, leaving the giant German bank among the few major financial institutions willing to lend him money.

Now that two-decades-long relationship is coming under scrutiny.

Banking regulators are reviewing hundreds of millions of dollars in loans made to Mr. Trump’s businesses through Deutsche Bank’s private wealth management unit, which caters to an ultrarich clientele, according to three people briefed on the review who were not authorized to speak publicly. The regulators want to know if the loans might expose the bank to heightened risks.

Separately, Deutsche Bank has been in contact with federal investigators about the Trump accounts, according to two people briefed on the matter. And the bank is expecting to eventually have to provide information to Robert S. Mueller III, the special counsel overseeing the federal investigation into the Trump campaign’s ties to Russia.

It was not clear what information the bank might ultimately provide. Generally, the bank is seen as central to understanding Mr. Trump’s finances since it is the only major financial institution that continues to conduct sizable business with him. Deutsche Bank has also lent money to Jared Kushner, the president’s son-in-law and senior adviser, and to his family real estate business.

Although Deutsche Bank recently landed in legal trouble for laundering money for Russian entities — paying more than $600 million in penalties to New York and British regulators — there is no indication of a Russian connection to Mr. Trump’s loans or accounts at Deutsche Bank, people briefed on the matter said. The bank, which declined to comment, scrutinizes its accounts for problematic ties as part of so-called “know your customer” banking rules and other requirements.

And with one of its most famous clients headed to the White House, the bank designed a plan for overseeing the accounts of Mr. Trump and Mr. Kushner and presented it to regulators at the New York State Department of Financial Services early this year. The plan essentially called for monitoring the accounts for red flags such as exceptionally favorable loan terms or unusual partners. [Continue reading…]

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Bill Browder on past dealings with Russian lawyer in Trump Jr. meeting

 

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Trump Tower rental space leased to White House military office for $2.39 million, far above market value

The Wall Street Journal reports: The U.S. government is paying more than $130,000 a month to lease space in Trump Tower for the military office that supports the White House, even though Donald Trump hasn’t spent a night at the New York skyscraper since becoming president.

The government signed a $2.39 million lease to rent a 3,475 sq. ft. space in the building for the military from Apr. 11, 2017 to Sept. 30, 2018, nearly 18 months in total, according to lease documents that The Wall Street Journal obtained through a freedom of information request.

The government agreed to pay $180,000 for the last 20 days of April 2017 and $130,000 a month thereafter, according to the contract released by the General Services Administration, the agency that negotiates office space agreements for the government.

The GSA redacted large portions of the lease, including the name of the person who owns the Trump Tower space the government is renting. A Pentagon official wrote in a letter seen by the Journal that the space is owned privately by someone unaffiliated with the Trump Organization and that the department sees no way in which Mr. Trump can benefit from the rent money.

The military’s lease in Trump Tower puts the space far above market rate for similarly sized apartments in the luxury high rise market and makes it one of the most expensive residential rentals in Manhattan. [Continue reading…]

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Outgoing ethics chief: U.S. is ‘close to a laughingstock’

The New York Times reports: Actions by President Trump and his administration have created a historic ethics crisis, the departing head of the Office of Government Ethics said. He called for major changes in federal law to expand the power and reach of the oversight office and combat the threat.

Walter M. Shaub Jr., who is resigning as the federal government’s top ethics watchdog on Tuesday, said the Trump administration had flouted or directly challenged long-accepted norms in a way that threatened to undermine the United States’ ethical standards, which have been admired around the world.

“It’s hard for the United States to pursue international anticorruption and ethics initiatives when we’re not even keeping our own side of the street clean. It affects our credibility,” Mr. Shaub said in a two-hour interview this past weekend — a weekend Mr. Trump let the world know he was spending at a family-owned golf club that was being paid to host the U.S. Women’s Open tournament. “I think we are pretty close to a laughingstock at this point.” [Continue reading…]

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