Igor Danchenko, a Russian analyst who contributed to the so-called Steele dossier, has been arrested as part of the probe by special counsel John Durham. According to the indictment released on Thursday, Danchenko was charged with five counts of making false statements to the FBI.
Former British intelligence agent Christopher Steele had hired Danchenko as his primary researcher in compiling his famed dossier. Steele’s dossier broadly alleged that the Trump campaign had conspired with Russia in the 2016 election, but many of the specifics were unconfirmed and some were later debunked.
Danchenko’s arrest comes several months after Durham, who was appointed by Attorney General Bill Barr to investigate the origins of the FBI’s 2016 Russia probe, secured an indictment of cybersecurity attorney Michael Sussmann, whose firm has represented the Democratic National Committee. Sussman was indicted for allegedly lying to the FBI about not working for anyone when he told the feds about allegations of collusion between the Trump campaign and the Kremlin.
The new indictment alleges that Danchenko made false statements to the FBI in five separate interviews in 2017.
In Count 1, the indictment alleged that Danchenko was not truthful in an interview with the FBI on or about June 15, 2017 when he denied speaking to a person identified as “PR Executive-1” about the material in the dossier. PR Executive-1, who is not named in the indictment, had a long and ongoing involvement in Democratic politics which made their involvement in the dossier highly relevant and material, the indictment alleged.
Counts 2-5 allege that Danchenko lied to the FBI in four separate interviews – on March 16, May 18, Oct. 24 and Nov 16, 2017 – when he claimed to have had communications from ”Chamber President-1.” The indictment doesn’t name ”Chamber President-1,” but the Washington Post identified him as Sergei Millian, who was then the president of the Russian-American Chamber of Commerce.
Durham’s probe has long been controversial, seen as Barr’s politically motivated response to the repeated claims by President Donald Trump and his allies that the FBI’s Russia investigation was a politically motivated hit job to sabotage his campaign and his presidency.
Sen. Tom Carper (D-DE), who previously withheld support for gutting the notorious filibuster, signaled a significant shift on his stance in the face of persistent GOP obstruction, particularly with voting rights legislation.
As then-Vice President Mike Pence hid for his life during the Jan. 6 Capitol attack, the lawyer who’d been advising Donald Trump on his efforts to steal a second term denounced Pence in an email, saying that he should have used a 130-year-old law to reject the will of millions of voters.
A lot of things happened. Here are some of the things.
Pass The Popcorn
Smartmatic, the voting tech company at the center of Trumpland’s 2020 election fraud conspiracy theories, is now suing both OAN and Newsmax, two pro-Trump media outlets that gleefully trafficked in those conspiracy theories as the ex-president tried to steal the election.
Smartmatic is accusing the outlets of deliberately spreading misinformation about the company in pursuit of pro-Trump viewers who’d given up on Fox News (after all, Trump whined repeatedly how Fox wasn’t sufficiently sucking up to him during the election).
OAN was sued in federal court in Washington, D.C.; and Newsmax was sued in Delaware state court.
Newsmax claims the lawsuit is a “clear attempt to squelch the rights of a free press.”
The two new lawsuits add to the veritable avalanche of Smartmatic’s suits against various Trump cronies, including: Fox News, Fox Corporation, Rudy Giuliani, Sidney Powell, Maria Bartiromo, Lou Dobbs and Jeanine Pirro
Dominion Voting Systems has already filed defamation suits against OAN, Newsmax, Fox News, Giuliani and Powell.
Incumbent New Jersey Gov. Phil Murphy (D) has been declared the winner in his re-election bid against Republican challenger Jack Ciattarelli in a nailbiter of a race.
Murphy won 50.2 percent of the vote to Ciattarelli’s 49 percent with 90 percent of the votes counted, according to the Associated Press.
Murphy is the first Democratic governor in New Jersey to be reelected in 44 years.
Ciattarelli has not conceded.
Manchin’s Takeaway From Virginia
Sen. Joe Manchin (D-WV), one of the key holdouts on passing Biden’s Build Back Better plan, said yesterday that his takeaway from Democrats’ defeat in the Virginia gubernatorial race was–yet again–they need to pump the brakes on passing reconciliation.
Manchin told Fox News last night that the lesson from Virginia was that his Democratic colleagues need to “kind of slow down and take a breath,” which was essentially the same take he’d offered earlier yesterday.
Manchin was using the Virginia results to double down on his repeated push for a “strategic pause” on reconciliation.
More Than Half A Dozen Jan. 6 Rally Attendees Were Just Elected
At least eight Republicans who went to the pro-Trump Jan. 6 rally on the Ellipse were elected to office on Tuesday.
Three of them won seats in the Virginia House of Delegates. The other five were elected to local positions, including city and town council, in Idaho, New Jersey, Connecticut and Massachusetts.
On the other hand, at least five candidates who went to the rally lost on Tuesday.
At least 57 Republican state and local officials were at the pre-insurrection rally at the Capitol, according to the Huffington Post.
The Senate Foreign Relations Committee on Wednesday approved former Chicago Mayor Rahm Emanuel’s nomination as ambassador to Japan, but Sens. Jeff Merkley (D-OR) and Ed Markey (D-MA) voted against him.
Progressives have slammed Emanuel’s nomination, pointing to his handling of Black teen Laquan McDonald’s death–specifically the fact that the then-mayor refused to released footage of white police Officer Jason Van Dyke fatally shooting McDonald.
Merkley hinted at Emanuel’s shoddy civil rights record as the reason for his “no” vote.
But Emanuel’s nomination isn’t dead thanks to the public support of a handful of Republican senators.
Disgraced Papa John’s founder John Schnatter told Bloomberg that he’s eaten 800 Papa John’s pizzas in the past 18 months to prove the quality of the pies has dropped after what he called the “progressive elite left” pushed for his ouster as the company’s chair.
In case you forgot, Schnatter resigned in 2018 after using the N-word during a conference call.
I live in Madison County in Central Virginia, about 80 miles southwest of DC. Charlottesville and Albemarle County excepted, this is industrial-strength Trump country. … Yesterday’s election unsettled me, a lot. Despite decisive wins across the board a palpable, consuming rage drives Republican energy here, a rage that mere victory will not sate.
Like clockwork, the takes are rolling in after Democratic candidate Terry McAuliffe lost the Virginia governor’s race to Republican Glenn Youngkin. People’s hypotheses for why McAuliffe lost vary from Youngkin’s dressing up of white grievance to Democrats sucking at messaging to congressional gridlock to historical precedent to schooling amid a pandemic and beyond. But a general conclusion among pundits, bolstered by the extremely tight governor’s race in New Jersey is: this was a bellwether, and Democrats are screwed.
The biggest threat to Democrats in the immediate aftermath of this election is not that these doom-and-gloom predictions about the 2022 midterms will come true. It’s that congressional moderates, imbued with huge power due to slight margins in both chambers, will be shaken by the takes and distance themselves from the party. If they decide to throw up new roadblocks to passing Democrats’ two-pronged legislative agenda, they have the power to sink it — ironically, probably robbing Democrats of their best weapon against the political headwinds, President Biden’s dismal approval numbers and the omnipresent COVID-19 pandemic that threaten their future elections.
Some congressional Democrats are using the loss as further evidence that they need to pass the two bills as soon as possible to staunch the bleeding. Some are hoping that the grim night will light a fire under the slow-moving Sen. Joe Manchin (D-WV). We’re watching it all.
In a blow to Arizona’s Gov. Doug Ducey and Attorney General Mark Brnovich, the state’s Supreme Court ruled Tuesday that the method through which bans on mask mandates and other coronavirus-related mitigation measures were passed in the state was illegal.
Senate Republicans on Wednesday blocked an attempt to move forward with the John Lewis Voting Rights Advancement Act. Like other attempts to pass voting rights legislation this year, even a formal debate on the bill could not pass Republicans’ use of the filibuster.
This story first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
In March 2020, as the first wave of coronavirus infections all but shut down the U.S. economy, Congress responded with rare speed, passing a $2.2 trillion relief package called the CARES Act. The centerpiece of the law was an emergency payment to over 150 million American households that needed help.
Congress used a simple filter to determine who was eligible for assistance: The full $1,200 was limited to single taxpayers who’d reported $75,000 a year or less in income on their previous tax return. Married couples got $2,400 if they had reported less than $150,000 in income. Money was sent automatically to those who qualified.
Ira Rennert, worth $3.7 billion according to Forbes, did not appear to need the cash infusion offered by the CARES Act. After all, his 62,000-square-foot Hamptons home is one of the largest in the country, so he was unlikely to get cabin fever during lockdown, let alone have trouble buying food. Nevertheless, Rennert, who made his fortune as a corporate raider in the ’80s and ’90s, got a $2,400 check from the government.
George Soros, the prominent hedge fund manager and philanthropist who’s worth $8.6 billion, didn’t need the CARES cash, either. Neither did his son, Robert, himself worth hundreds of millions. But they, too, both got checks. (Both returned the checks, according to their representatives.)
ProPublica, using its trove of IRS records, identified at least 18 billionaires who received stimulus payments, which were funded by U.S. taxpayers, in the spring of 2020. Hundreds of other ultrawealthy taxpayers also got checks.
The wealthy taxpayers who received the stimulus checks got them because they came in under the government’s income threshold. In fact, they reported way less taxable income than that — even hundreds of millions less — after they used business write-offs to wipe out their gains.
ProPublica found 270 taxpayers who collectively disclosed $5.7 billion in income, according to their previous tax return, but who were able to deploy deductions at such a massive scale that they qualified for stimulus checks. All listed negative net incomes on tax returns.
Consider two stimulus recipients with similarly huge incomes in 2018. Timothy Headington is an oil mogul, real estate developer and executive producer of such films as “Argo” and “World War Z,” and he’sworth $1.4 billion. He had $62 million in income in 2018, but after $342 million in write-offs, his final result was negative $280 million. The same was true of Rennert, whose $64 million in income that year was erased by $355 million in deductions, for a final total of negative $291 million.
Figures like these reveal a basic truth about the U.S. income tax system. Most people earn the overwhelming majority of their income via wages and take deductions where they can. But the income of the ultrawealthy as revealed on their taxes tells, at best, a partial story. As ProPublica reported earlier this year, the wealthiest taxpayers often have great flexibility in when and how they take taxable income, allowing them to pay a minuscule portion of their wealth growth in taxes. For the ultrawealthy, wages are to be avoided, carrying as they do the burden of not only income tax but also of payroll taxes.
Wages rarely made up a significant portion of income for the 270 wealthy stimulus check recipients identified by ProPublica. In total, only $82 million, or 1.4%, of the $5.7 billion in income taken in by the group came in the form of wages.
The ultrawealthy have other tax advantages. Many can tap a particularly generous vein of deductions: businesses they own. These can wipe out all of their income, even for years to come, unlike other deductions, like those for charitable giving. Certain industries, like real estate or oil and gas, are a well-known source of tax benefits that can generate paper losses even for a successful business.
The amount of stimulus aid that went to ultrawealthy taxpayers was a negligible piece of the trillions spent via the CARES Act. But the fact that billionaires were able to qualify shows that when legislators rely on income tax returns to determine eligibility for aid, there can be surprising results. Asked what he thought about billionaires receiving stimulus checks, Senate Finance Committee chair Ron Wyden, D-Ore., responded, “The tax code is simply not equipped to tax billionaires fairly, or even ensure they pay anything at all.”
ProPublica reached out to every stimulus-check recipient mentioned in this article. Rennert and Headington did not respond to requests for comment. A spokesman for George Soros, who has advocated for higher taxes for the wealthy, said, “George returned his stimulus check. He certainly didn’t request one!” Robert Soros did the same, a spokesperson said. (The Soros-funded Open Society Foundations have donated to ProPublica.)
Billionaires often reap sizable tax deductions from owning sports teams, as a ProPublica story this year detailed. A number of sports team owners were among the recipients of stimulus payments. Terrence Pegula, who is worth $5.7 billion and owns both the NFL’s Buffalo Bills and the NHL’s Buffalo Sabres, was one. Also getting a check was Glen Taylor, worth $2.8 billion, who earlier this year struck a deal to sell Minnesota’s NBA and WNBA teams for $1.5 billion. Pegula and Taylor did not respond to requests for comment.
Some taxpayers had enough in deductions to wipe out even hundreds of millions in income. Robert Dart is a scion of the Dart family, which owns Dart Container Corp., the maker of the iconic red Solo cup. In 2018, he reported income exceeding $300 million, but deductions left him with a final result of negative $39 million.
Dart and his brother renounced their U.S. citizenship decades ago to take advantage of a then-existing tax break available for expatriates. Dart filed his U.S. tax return from an address in the Cayman Islands, but got a stimulus payment just the same. (The IRS declined to comment.)
In response to questions, the general counsel for Dart Container wrote, “Mr. Dart believes that people in his position should not have received COVID stimulus funds. Mr. Dart did not request any COVID stimulus funds. Instead, those funds were directly deposited into his account by the U.S. Treasury without his consent as Congress determined that taxpayers with resident alien status were eligible for such payments. Mr. Dart has returned the COVID stimulus funds he received to the U.S. Treasury pursuant to instructions provided by the IRS.”
Some of the ultrawealthy have received government benefits on more than one occasion. Take Joseph DiMenna, a partner in Zweig-DiMenna, a pioneering hedge fund. An art collector and polo aficionado, he owns a club that holds charity polo matches for anti-poverty causes. In 2017, he received a special payout from his fund of $1.1 billion. But in 2018, without such a massive payout, business deductions swung his income back to where it had been in the years before his big payday: less than $0. That entitled him to a stimulus check. In both 2015 and 2016, DiMenna’s negative income also entitled him to $2,000 in refundable child tax credits, meant to support middle-class families with child care expenses. DiMenna did not respond to a request seeking comment.
Others among the superrich also received stimulus payments the last time Congress offered them when millions of Americans were struggling. The 2009 American Recovery and Reinvestment Act offered a $400 tax credit for individuals and $800 for married couples. It was called “Making Work Pay.”
Forrest Preston, the founder of Life Care Centers of America, one of the largest long-term care companies in the U.S., is worth $1.2 billion. In 2009, he got his $400 boost. The next year, he posted an income of $112 million. By 2018, however, his income had gone negative again, entitling him to a $1,200 payment in 2020.
The same year he received his stimulus check, Preston’s company successfully lobbied to win a tax break for the nursing home industry. Preston did not respond to a request for comment.
Taylor, the Minnesota Timberwolves owner, is another two-time stimulus recipient, in 2009 and again in 2020. So was Woodley Hunt, the senior chairman of Hunt Companies, a family-owned firm that is one of the country’s largest owners of multifamily properties. Hunt did not respond to a request seeking comment.
For former Lehman Brothers CEO Richard Fuld, a big salary was a key part of the $400 million he earned in the five years before the firm’s historic collapse in 2008. But in recent years, he’s been running a company called Matrix Investment Partners that he set up to invest his own money. The tax losses generated by that company were one reason he got a stimulus check. Reached by phone and asked whether he wanted to comment, Fuld said, “I’m not interested. Thank you.”
Another CARES Act beneficiary was Erik Prince, who, before deductions, had $5.3 million in income in 2018. Prince founded Blackwater, a private military company that received hundreds of millions in government contracts. He has denounced excess government spending, saying we are being “bled dry by debt.” Prince didn’t respond to a request for comment.
A proposal in the Democrats’ (once $3.5 trillion, now under $2 trillion) Build Back Better legislation, currently the subject of fevered negotiations, would curb the ability of wealthy taxpayers to report negative income. It would do so by restricting the ability to use business losses to wipe out other types of income, like capital gains or dividends. Instead, business deductions would only offset business income.
The idea, which builds on a provision of the 2017 Trump tax bill, is one of the few tax provisions to have survived the recent negotiations — at least, for now. First proposed by House Democrats in September, it was then projected to produce $167 billion in revenue over the next 10 years. The provision was also included in a version of the legislation released on Oct. 28.
Not included in last week’s draft was a provision that would have directly affected the ability of billionaires to manipulate their incomes. A number of the billionaires who received stimulus checks were able to report negative incomes to the IRS despite getting richer. A “billionaire income tax” proposed by Wyden, would tax increases in wealth. Under the current system, gains are taxed only when they are “realized,” such as when someone sells stock.
