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Blog Post | November 2, 2018

Want Transparent Government? Answer These Questions

Ethics in GovernmentRevolving Door

At first glance, the contentious Brett Kavanaugh confirmation process and the Trump Administration’s response to the apparent brutal assassination of Jamal Khashoggi have very little in common.

But there is one disturbing commonality — a shocking lack of transparency into the motivations of key players.

Senator Jon Kyl was appointed in September to fill out the term of the late Senator John McCain (R-AZ). Kyl refused to recuse himself from providing a key vote to confirm Kavanaugh after having served as Kavanaugh’s de facto lead lobbyist while working as a highly paid influence broker and lobbyist at Covington & Burling.

If Kyl had recused himself from this vote — as he should have — then 49 Democrats and Senator Lisa Murkowski (R-AL) would have been sufficient to defeat Kavanaugh’s nomination. While we will never know what Senator Joe Manchin (D-WV) would have done had his vote been decisive (he waited to announce support for Kavanaugh until Susan Collins’ provided Kavanaugh his clinching 50th Senator), many have speculated that Manchin would have opposed Kavanaugh, had he had the opportunity to be on the winning side.

Thus, Jon Kyl’s decision to vote in favor of a confirmation for which he had been the lead professional lobbyist may have altered the trajectory of the US Supreme Court. What were the financial implications of that decision for Kyl? Did he have financial as well as personal commitments to the pro-Kavanaugh cause?

We may never know; but we have now learned that Jon Kyl has been given an extension on making his personal financial disclosure until January of 2019. What makes that extension so egregious is that it is widely speculated that by that date, Kyl may be out of the Senate. If Kyl is out of the Senate, it is extremely unlikely that he will comply with the lapsed disclosure requirement.

Politico’s jaded Playbook team summed up Kyl’s audacious opacity and the fact that “we might never know” his arrangements in 2018 at Covington as belonging to the “DEPARTMENT OF YA CAN’T MAKE IT UP.”

What was the complete list of Jon Kyl’s clients at Covington in 2018? How much money was he making? In what financial products or real estate is he invested?

We may never know!

While Kavanaugh may not have technically been Kyl’s “paying client,” did he receive paid speaking gigs from pro-Kavanaugh groups like the Federalist Society or Chamber of Commerce? Is he going to receive a bonus for having successfully served as Kavanaugh’s “sherpa,” both while a lobbyist and a Senator? In what manner will his successful stewardship of an extraordinarily controversial appointment be rewarded?

Again, we may never know!

Similar opacity surrounds the much criticized decision of Treasury Secretary Mnuchin to meet with a wide swath of leading Saudi officials in the aftermath of the Khashoggi murder and dismemberment.

Does the US Treasury Secretary have a history of business dealings with members of the Saudi royal family? We do not know!

Secretary Mnuchin is one of only a handful of senior administration officials who failed to file a personal financial disclosure for 2017. Mnuchin’s form was due May 15th, and the maximum of two extensions would have only taken him to mid-August. There is no good explanation for why Mnuchin is failing to shed light on his financial holdings as required under federal law.

Mnuchin’s financial disclosure for 2017 is likely to be opaque. As with Trump’s tax returns, it is likely that Mnuchin’s disclosure is but a first step into understanding his web of business relationships (and a financial disclosure reveals even less than a tax return).

Yet it is very likely, based on past behavior, that Mnuchin is hiding something.

Indeed, Mnuchin’s financial disclosure forms have been unreliable in the past. At the outset of his confirmation hearing in 2017, Mnuchin was forced to “revise” his questionnaire to reveal “several additional financial assets, including $95 million worth of real estate — a co-op in New York City, a residence in Southampton, New York, a residence in Los Angeles, California, and $15 million in real estate holdings in Mexico.”

Additionally, “Mr. Mnuchin also initially failed to disclose that he is the director of Dune Capital International, an investment fund incorporated in the Cayman Islands, along with management posts in seven other investment funds” and “he belatedly disclosed that his children own nearly $1 million in artwork.”

Given that we may be on the cusp of a fight in January between a newly constituted Democratic majority in the House of Representatives and Trump over Trump’s tax returns, Mnuchin’s fealty to the law and the Constitution, as well the absence of conflicts of interests, is likely to be front and center. As former IRS Commissioner John Koskinen told the New York Times, “The buffer between the I.R.S. and politics and the I.R.S. and the White House is always an important one to maintain. The Treasury secretary, who will be on the front lines of that, will be in the middle of a very interesting question.”

Mnuchin is ill-suited to defend the independence of the IRS given that he served as Trump’s 2016 National Finance Chairman. Mnuchin and Trump’s fortunes are deeply intertwined; Mnuchin’s improbable ascent from little-known second generation financier to Treasury Secretary was only made possible by Trump’s surprising 2016 victory.

That elevation has left Mnuchin in charge of two law enforcement agencies, the IRS and the Financial Crimes Enforcement Network (FinCEN), critical to Mueller’s investigation into Trump’s 2016 presidential campaign in which Mnuchin was a key leader. That alone was sufficient for five organizations to join the Revolving Door Project in calling for Mnuchin’s recusal from investigations into Trump-Russia.

But, there are additional questions about Mnuchin’s biases beyond his personal ties to the Trump campaign. Consider, for example, the interconnection between Mnuchin’s interests and a controversial investor, Len Blavatnik. Mnuchin was Trump’s National Finance Chairman during the time “that Blavatnik’s political profile changed dramatically.”

Blavatnik’s “campaign contributions dating back to 2009-10 were fairly balanced across party lines and relatively modest for a billionaire.” And yet, “In 2015-16, everything changed. Blavatnik’s political contributions soared and made a hard right turn as he pumped $6.35 million into GOP political action committees, with millions of dollars going to top Republican leaders including Sens. Mitch McConnell, Marco Rubio and Lindsey Graham.”

According to the Hollywood Reporter, Mnuchin sold his considerable Hollywood interests to Len Blavatnik, an American billionaire who made the bulk of his fortune in Russia in conjunction with politically connected Russian oligarchs. Mnuchin rejected that story but offered no proof to the contrary (and did not sue the Hollywood Reporter for libel, as might be expected if they had been irresponsible in their reporting)

Note that “special counsel investigators have also asked witnesses about specific inauguration donors, including American businessmen Leonard Blavatnik, and Andrew Intrater, according to sources familiar with the Mueller sessions.”

The House Financial Services Committee should consider subpoenaing Mnuchin’s financial records to determine whether he is tied to either the Saudi royals or Russian oligarchs while the Treasury Department is charged with enforcing the “Global Magnitsky Act” against “human rights abuses or corrupt acts anywhere in the world.”

In other words, Mnuchin gets to determine whether and how to sanction international billionaires with whom he might have done business in the recent past (and might plan to do again shortly, and with whom he might have financial connections even now).

Just as with Senator Jon Kyl’s seemingly decisive vote to confirm Brett Kavanaugh to a lifetime appointment to the Supreme Court, it is unacceptable that the public lacks full insight into what might motivate Mnuchin’s future actions. Given his dishonest financial disclosures during his confirmation process, there is good reason to question his integrity. Without greater insight into Mnuchin’s business dealings, the public has no reason to trust Mnuchin’s management of the Treasury Department.

Ethics in GovernmentRevolving Door

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