On Thursday, the Department of Justice unsealed an indictment of Eric Adams, making him New York City’s first sitting mayor to be indicted while in office. He is scheduled to be arraigned on Friday.

The first-term Democrat stands accused of wire fraud, in violation of Title 18, United States Code, Section 1343; soliciting, accepting, and receiving a campaign contribution by a foreign national, in violation of Title 52, U.S. Code, Section 30121(a)(2); and bribery, in violation of Title 18, U.S. Code, Section 666(a)(1)(B). The mayor declares he is innocent and vows to vigorously fight the charges relating to foreign travel, hotels, and other benefits totaling more than $100,000.

What myriad news accounts aren’t emphasizing—and should—is that New York City’s admirable public finance system for city offices laid the groundwork for the federal indictment. Adams, who insists he will not resign, intimated, without proof, that he was a target of the investigation because he had stood up to the Joe Biden administration’s policies toward migrants.

Campaign finance irregularities in Adams’s mayoral campaign 2021 were flagged by New York City’s Campaign Finance Board (CFB), which administers the city’s excellent public finance system. In 2021, Adams, a police officer for much of his career and an elected official, including Brooklyn borough president, ran and won his first campaign for the city’s highest office using public funding. That meant he was subject to CFB’s notoriously rigorous post-election audits to ensure taxpayer funds were appropriately used.

As a publicly funded candidate, Adams needed to account for every cent going into and out of his mayoral campaign. Simply put, the numbers did not add up, with a $2.3 million gap, which is a huge red flag. As the New York Times reported of the audit, Adams’s campaign seemed to have “secret bundlers [and] sham donations.” The Justice Department, in its indictment, accuses Adams of violating the wire fraud statute by getting public matching funds through fraudulent means. While Adams received over $10 million in public financing in his 2021 mayoral bid, only a small portion of that is allegedly connected to straw donor scheme outlined in the indictment.

The DOJ’s investigation of Adams was no surprise, even if the indictment was, given that the feds had seized his iPad and phones last year. In late 2023, the FBI searched the home of an Adams fundraiser named Brianna Suggs. On Thursday, FBI agents searched Gracie Mansion, the Mayor of New York’s official residence, and earlier this year, the FBI took his cell phone and other devices.

The laws Adams stands accused of breaking may sound familiar to those who followed Robert Mueller, the former FBI Director and special counsel who investigated foreign efforts to influence Donald Trump’s 2016 presidential campaign. Likewise, those glued to the trials and tribulations of rapper Pras Michel have heard these charges. As I explained in my book Corporatocracy, Michel was found guilty of violating campaign finance laws during Barack Obama’s administration by helping to funnel foreign funds into the 2012 federal election. Michel has yet to be sentenced.

The ban on foreign nationals making contributions or expenditures is a mainstay of American politics and something every candidate knows. It can be found at 52 U.S.C. § 30121. There is an exception for green card holders who spend money in American elections. However, foreign nationals abroad or those just in the U.S. on a visa cannot lawfully spend money in a U.S. election. Full stop.

The Supreme Court upheld the ban on foreign nationals spending money in American elections in Bluman v. FEC in 2012, involving a Canadian who wanted to spend on independent expenditures. The Bluman case at the D.C. Circuit level was authored by then-Court of Appeals Judge Brett Kavanaugh, who, of course, would be nominated to the Supreme Court by Trump and confirmed by the Senate. Kavanaugh wrote in Bluman:

“The Supreme Court has long held that the government (federal, state, and local) may exclude foreign citizens from activities that are part of democratic self-government in the United States. For example, the Supreme Court has ruled that the government may bar aliens from voting, serving as jurors, working as police or probation officers, or teaching at public schools. Under those precedents, the federal ban at issue here readily passes constitutional muster.”

Kavanaugh’s Court of Appeals ruling was affirmed by the Supreme Court 9-0. Thus, if Adams wants to argue that the foreign ban is unconstitutional, the case law is not on his side.

Adams is also accused of accepting bribes from a Turkish official. (The New York Post headline on Friday was “Grand Theft Ottoman.”) The recent example of Democratic ex-U.S. Senator Bob Menendez shows the potency of these anti-corruption laws. Menendez was convicted of taking bribes from Egypt, including in the form of gold bars, no less.

Like any defendant, Adams is innocent until proven guilty. But make no mistake: These charges are as serious as a heart attack. Keeping foreign money out of American politics is a bright line that politicians cross at their own risk. Public financing, with its rigorous accounting, makes such behavior even riskier.

The post The Intriguing Role Public Financing of Campaigns Played in the Eric Adams Indictments appeared first on Washington Monthly.

Now that former President Donald Trump has been convicted of 34 counts of falsifying business records, his supporters are making wild claims: Trump couldn’t call witnesses (he could and did), or Trump couldn’t testify because of a gag order (he could have if he wanted to), or the underlying theory of the case was novel.

This final claim has some substance but misconstrues the conspiracy to evade federal campaign finance laws. Business and campaign finance crimes can overlap, a crossroads I’ve examined for nearly 20 years. So, let me explain why the Manhattan DA’s approach comports with American anti-corruption laws.

The original indictment charged Trump with “FALSIFYING BUSINESS RECORDS IN THE FIRST DEGREE … with intent to defraud and intent to commit another crime and aid and conceal the commission thereof, made and caused a false entry in the business records of an enterprise…”

As Just Security explained last year, “New York firms are required to ‘keep correct and complete books and records of account’ for the purposes of state regulators and tax authorities.”

When a corporation participates in an election law crime, it often violates business laws. Sloppy bookkeeping can be at the heart of both problems. In my forthcoming book, Corporatocracy, I write about the campaign finance crimes to which Ryan Salame and Nisad Singh, executives at the crypto financial firm FTX, pleaded guilty last year, including straw donor schemes using $100 million in illegal corporate funds in the 2020 and 2022 elections. How could that happen? The overseer of FTX’s bankruptcy, John Ray III, later testified before Congress that “there was literally no record keeping” at the once-lauded company during the years Sam Bankman-Fried, the former CEO, was running it. In March, a federal district court sentenced Bankman-Fried to 25 years in prison for an admixture of securities frauds. The same court sentenced Salame to 7.5 years for his campaign finance crimes and for running an unlicensed money-transmitting business.

There’s a whole history of interlinked corporate and campaign finance crimes. As I described in my first book, Corporate Citizen, back in the 1970s, Watergate investigations revealed that hundreds of corporations had donated to U.S. campaigns. This was a legal problem because when a publicly traded company illegally gave to President Richard Nixon’s campaign (the Committee to Re-Elect the President or CREEP), the company and the committee broke campaign finance laws. When it submitted inaccurate financials to the investing public, it violated securities laws, too.

This Watergate revelation about illegal corporate political spending prompted a Securities and Exchange Commission investigation. Stanley Sporkin, then-director of SEC Enforcement and later a titan of the Washington legal community, wanted to know how corporate payments could end up in a presidential campaign when such donations violated the Tillman Act. Sporkin told an interviewer for PBS Frontline:

How does Gulf Oil record a transaction of a $50,000 cash payment? I wanted to know, what account did they charge? Do they have an account called “Bribery”? And so, I decided to ask one of my investigators to go out and find out how they did it…. When we looked into these funds, we found out they were not only being used domestically in the United States for illegal campaign contributions, but we found that the same monies were being used to bribe officials overseas in connection with the companies’ business.

As the SEC reported to Congress in 1976: “Millions of dollars . . . have been inaccurately recorded in corporate books and records to facilitate the making of questionable payments.”

One post-Watergate reform was the Foreign Corrupt Practices Act of 1977 (FCPA). If a corporation commits a foreign bribe and misrepresents it as a legitimate business expense, then the firm has, under the FCPA, committed what is called “a book and records” offense. The statute’s structure is thus similar to the structure of the state-law charges against Trump for his inaccurate corporate records.

When Trump was charged with 34 counts of falsifying business records to cover up a conspiracy in the 2016 election—the hush money scheme to silence Stormy Daniels—the electoral conspiracy elevated the crime from 34 misdemeanors to 34 felonies.

The contribution limits during the 2016 election only allowed Michael Cohen to donate $2700 to the Trump campaign. The $130,000 hush money he paid Daniels for the campaign’s benefit was about 50 times that.

Like the missing financial records at crypto giant FTX or the sleight-of-hand accounting revealed in the Watergate investigations, the business records at the Trump Organization were shoddy. The plans to repay Cohen for the Stormy Daniels payment are scrawled in Trump CFO Allen Weisselberg’s handwriting to “gross up” the payment to cover taxes Cohen would owe. This is no way to run a business or, as it turns out, to run a campaign. And now ex-President Trump, the beneficiary of this 2016 election conspiracy, is a convicted felon for not keeping honest books and records. He’s hardly alone, and the charges against him were hardly unfair.

The post The Business Records Case Against Trump Wasn’t Some Legal Confection appeared first on Washington Monthly.

Lawyers on fictional TV dramas are often up to no good: burglarizing buildings, tampering with documents, telling clients to lie on the stand. In real life, if lawyers lie to judges, ask clients to lie to a court, or otherwise break the law, they can lose their license to practice law or face costly sanctions. Indeed, lawyers who peddled the Big Lie—the outlandish claim that some form of “voter fraud” changed the result of the 2020 presidential election—in court are learning this lesson the hard way.

Ex-President Donald Trump’s personal lawyer Rudy Giuliani has already had his New York State law license and his D.C. law license suspended for lying to courts and the public that dead people voted in Pennsylvania and minors voted in Arizona, as well as propagating other tall tales of voter fraud in the 2020 presidential election.

The New York court reviewing Giuliani’s law license concluded that he deserved to lose the ability to practice law for his role in spreading the Big Lie, stating:

There is uncontroverted evidence that [Giuliani] communicated demonstrably false and misleading statements to courts, lawmakers and the public at large in his capacity as lawyer for former President Donald J. Trump … These false statements were made to improperly bolster respondent’s narrative that due to widespread voter fraud, victory in the 2020 United States presidential election was stolen from his client. We conclude that respondent’s conduct … warrants interim suspension from the practice of law.

What happened to Giuliani could be just the start of consequences for the lawyers who spread the egregious falsehood that Trump won the 2020 election.

In August 2021, a federal judge overseeing the so-called Kraken lawsuit, which tried to decertify Michigan’s Electoral College vote for Joe Biden, sanctioned all nine lawyers involved with bringing the meritless case, including Sidney Powell and Lin Wood. Among the sanctions imposed were continuing legal education classes in election law; payment of Michigan’s and Detroit’s legal fees, totaling $175,000; and referral of all nine lawyers to their home state bars for investigation for possible suspension or disbarment.

Wood already had a 1,600-page complaint filed against him pending at the Georgia State Bar. The Georgia Bar asked Wood to undergo a mental health evaluation as part of its investigation of his post-2020 election behavior. Meanwhile, in Texas, the State Bar on November 4, 2021, held an investigatory hearing on a complaint against Sidney Powell, filed by Michigan’s attorney general, Dana Nessel.

In Colorado, the lawyers Gary Fielder and Ernest Walker in December 2020 filed a pro-Trump case “on behalf” of 160 million American voters, alleging a convoluted plot to steal the 2020 election. This lawsuit, which was based on nothing, went nowhere. In November 2021, a federal judge ordered Fielder and Walker to pay nearly $187,000 to defray the legal fees of groups they sued, including Facebook and Dominion Voting Systems. In his sanctions opinion, the judge called the lawyers’ 2020 election lawsuit “one enormous conspiracy theory.”

Then there’s the matter of the lawyer John Eastman. Eastman abruptly retired from Chapman University Law School after he was a speaker at the “Stop the Steal” rally in front of the White House that preceded the Capitol insurrection on January 6. Later, Eastman was revealed as an author of a legal memo arguing that Vice President Mike Pence could reject the nation’s Electoral College votes and thereby unilaterally throw the presidential election to the House. (Pence, to his credit, did not act as the memo suggested.) The California State Bar has received complaints about Eastman that ask it to discipline him. Two weeks ago, the advocacy group States United Democracy Center (whose leadership includes former New Jersey Governor Christine Todd Whitman and the former Obama White House ethics counsel Norm Eisen), filed a 35-page supplement to its original complaint, incorporating new revelations about Eastman’s conduct before and during the insurrection—and the deceptive nature of his descriptions of it after the insurgency failed.

Could the high-ranking lawyers inside Trump’s administration face similar sanctions? This past October, a group of 34 lawyers—including one former acting attorney general and the current inspector general of the Justice Department—filed a complaint against Jeffrey Clark, the former acting chief of the DOJ’s Civil Division. In a December 28 memo to his superiors, Clark proposed that the DOJ claim “various irregularities” in voting in swing states, and urge the legislatures of those states to convene and appoint a Republican slate of electors to replace those chosen by the voters.

Clark’s legal problems are metastasizing. On December 1, the House January 6 committee unanimously voted to refer Clark for criminal contempt of Congress for not answering its questions. The full House has yet to vote on this referral. And complicating his fate, Clark informed the committee that he plans to invoke his Fifth Amendment rights against self-incrimination when he next appears to testify.

All of these lawyers should have known better.

Many of the lawyers who promulgated the Big Lie in and out of court clearly did not learn the lesson of Watergate: State bars care about ethics. Lawyers involved in the Watergate scandal, which involved illegality in the 1972 presidential election, were all disbarred, including G. Gordon Liddy, Charles Colson, John Ehrlichman, John Mitchell (an attorney general), John Dean, and even ex-President Richard Nixon. Herbert Kalmbach, Nixon’s personal lawyer, had his law license suspended and then reinstated. Richard Kleindienst (another attorney general) also had his law license suspended and reinstated.

The fact that so many lawyers were involved in the Nixon White House scandals was an embarrassment for the legal profession. In the wake of Watergate, the American Bar Association beefed up ethical standards through the work of the prominent lawyer Robert J. Kutak, who chaired a committee in 1977 that drafted a new ethical code for the profession. Since the ABA does not license lawyers, Kutak campaigned around the county to convince each state bar to adopt new ethical standards. Forty-nine states improved their ethical rules for lawyers.

Another post-Watergate reform was that ABA-accredited law schools require mandatory professional responsibility classes to train the next generation of attorneys to act more ethically than some their worst predecessors.

Like lemmings falling off a cliff, Trump’s lawyers committed many of the same ethical lapses as Nixon’s lawyers. Now, they are finding out just as the Nixon lawyers did that sanctions and suspended law licenses may be the price for awful behavior. Rudy might be the first to lose his ability to practice law, but he’s unlikely to be the last. This isn’t a partisan matter for the state bars: It’s a matter of maintaining the public’s respect for lawyers and their veracity.

The post Lawyers Risk Their Law Licenses Helping Smarmy Politicians appeared first on Washington Monthly.