Paychecks Stop at Podesta Group, New Operations Launch

Kimberly Fritts, has resigned and announced no more paychecks from the Podesta Group after Tony, the founder stepped down. Fleeing to other corners, other lobby groups are cherry picking to hire former Podesta Group employees.

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Podesta Group Unravels as CEO Plans to Take Clients to New Firm

Less than two weeks after Democratic mega-lobbyist Tony Podesta stepped down from his firm amid questions over its foreign work, one of Washington’s most prominent lobbying shops is unraveling as its employees try to reconstitute under new leadership.

Chief Executive Officer Kimberly Fritts told employees Thursday afternoon she is working on launching a new firm that would take many of Podesta’s staff and clients with her, said two people familiar with the meeting. She told employees they shouldn’t expect a paycheck past Nov. 15, the people said.

It was not an entirely unexpected moment for the 30-year-old firm after Podesta’s sudden resignation Oct. 31, when he announced he was stepping down following an indictment issued against Trump’s former campaign manager Paul Manafort by U.S. Justice Department Special Counsel Robert Mueller.

The charges detailed Manafort’s clandestine influence campaign on behalf of Ukraine’s deposed president Viktor Yanukovych, including work with two unidentified companies that “lobbied multiple members of Congress and their staff about Ukraine sanctions, the validity of Ukraine elections, and the propriety of Yanukovych’s imprisoning his presidential rival.”

Mueller’s indictment identified the firms as Company A and Company B and said they were allegedly paid by Manafort with more than $2 million in offshore funds. A person familiar with the matter confirmed that Company B is the Podesta Group, which disclosed in April that it had worked for the European Centre for a Modern Ukraine. Company A is Mercury Public Affairs LLC, said another person familiar with the matter.

The Podesta Group represents some of the the world’ biggest companies, including Alphabet Inc.’s Google, Altria Group Inc., Wells Fargo & Co., Lockheed Martin Corp., Pfizer Inc. and other representatives of some of the most active industries in Washington.

Podesta’s next steps were not discussed at the meeting, one person said. A spokeswoman for Tony Podesta and the Podesta Group declined to comment.

Podesta is the brother of John Podesta, the chairman of Hillary Clinton’s presidential campaign, who also served as White House chief of staff under President Bill Clinton and was counselor to Barack Obama.

*** 

Kimberley Fritts, the longtime chief executive of the Podesta Group, is leaving the firm to start her own lobbying shop, according to three Podesta Group staffers.

Paul Brathwaite, a Podesta Group principal, said last week that he was leaving to start his own shop, Federal Street Strategies.

Rival lobbying firms, meanwhile, see this is a prime moment to poach the Podesta Group’s top lobbyists. At least six other firms have reached out to Podesta Group staffers about leaving since Tony Podesta stepped down. More here.

*** It must be chaos as there are contracts with countless companies, organizations and foreign entities that must be either cancelled or completed under a new process. According to Open Secrets, the Podesta group has $15,780,000 in lobby income for 2017.

Tony Podesta’s lavish art collection is coming down off the walls at the Podesta Group, as the lobbying firm — among the largest and most powerful in Washington — prepares to close up shop.

Workers started removing dozens of pieces in Podesta’s collection of photography and other artworks from the walls of the firm on Thursday, the same day Kimberley Fritts, the firm’s longtime chief executive, abruptly resigned, according to a Podesta Group staffer.

“The firm as it existed is essentially over,” one Podesta Group staffer said. “The vast majority of people are going their own way.”

At an emotional staff meeting late Thursday afternoon, Fritts told staffers they could clear out their offices and said that Wednesday might be their last payday.

“We will try to compensate you on the 30th, but we can’t make any promises,” Fritts said, according to one staffer who was in the meeting.

Fritts had been expected to relaunch the Podesta Group under a new name in the days after Podesta stepped down. But she instead announced in the meeting on Thursday that she was leaving to start her own firm after negotiations with Podesta broke down. Her last day was Friday, according to Podesta Group staffers.

Fritts is now hustling to find new office space and get her new firm off the ground. Staffers, meanwhile, are struggling to figure out what will happen to the Podesta Group with Fritts gone and Podesta — an outsized presence in Washington known for his flamboyant ties and ubiquity at Democratic fundraisers — nowhere to be found.

Staffers are wondering why a firm that brought in $24 million last year suddenly can’t pay their salaries, and why Podesta and Fritts were unable to strike a deal to transfer ownership of the firm.

“There’s a lot of anger at Tony because of that,” one Podesta Group staffer said.

Some Podesta Group lobbyists are now planning to join Fritts at her new firm, which The New York Times reported on Friday would be named Cogent Strategies.

Others are considering joining rival lobbying firms or starting their own shops. One lobbyist, Paul Brathwaite, sent a note to clients last week announcing he was starting his own firm, Federal Street Strategies. More here.

Hey Harvey Weinstein, Tell us About Black Cube

So, Harvey has not been heard from in a while. Hey may still be in rehab and it is now reported that Kevin Spacey is there too….sheesh

The Meadows is an upscale addiction treatment centre located about an hour’s drive out of Phoenix, Arizona. The sprawling facility boasts an outdoor swimming pool, lush grounds and a fitness centre.

Treatment at the facility can cost around $AU50,000 per month, meaning it’s a favoured destination for the rich and famous — celebs including Tiger Woods, Selena Gomez and Elle Macpherson have all stayed at the centre for issues ranging from alcohol abuse to sex addiction. More here.

Meanwhile Weinstein has hired a team of lawyers in California and New York where investigations are underway and charges are pending. His California lawyer is Blair Berk who has previously represented Mel Gibson, Britney Spears and Kiefer Sutherland. His lawyer in New York is known as Benjamin Brafman. His client list included Martin Shkreli and Dominique Strauss Kahn.

There is also a lawyer of record on the Weinstein team named David Boies. This fella has a real interesting legal portfolio. He is in fact pretty shady himself. Read about him here.

So what is this about Black Cube?

Set-up: Black Cube says that they had no idea what Harvey Weinstein wanted when they were contracted and wouldn’t have accepted it if they did. Well…hold on here… (Boies signed the contract with Black Cube, plausible deniability in play)

Farrow: In the fall of 2016, Harvey Weinstein set out to suppress allegations that he had sexually harassed or assaulted numerous women. He began to hire private security agencies to collect information on the women and the journalists trying to expose the allegations. According to dozens of pages of documents, and seven people directly involved in the effort, the firms that Weinstein hired included Kroll, which is one of the world’s largest corporate-intelligence companies, and Black Cube, an enterprise run largely by former officers of Mossad and other Israeli intelligence agencies. Black Cube, which has branches in Tel Aviv, London, and Paris, offers its clients the skills of operatives “highly experienced and trained in Israel’s elite military and governmental intelligence units,” according to its literature.

Two private investigators from Black Cube, using false identities, met with the actress Rose McGowan, who eventually publicly accused Weinstein of rape, to extract information from her. One of the investigators pretended to be a women’s-rights advocate and secretly recorded at least four meetings with McGowan. The same operative, using a different false identity and implying that she had an allegation against Weinstein, met twice with a journalist to find out which women were talking to the press. In other cases, journalists directed by Weinstein or the private investigators interviewed women and reported back the details.

The explicit goal of the investigations, laid out in one contract with Black Cube, signed in July, was to stop the publication of the abuse allegations against Weinstein that eventually emerged in the New York Times and The New Yorker. Over the course of a year, Weinstein had the agencies “target,” or collect information on, dozens of individuals, and compile psychological profiles that sometimes focussed on their personal or sexual histories. Weinstein monitored the progress of the investigations personally. He also enlisted former employees from his film enterprises to join in the effort, collecting names and placing calls that, according to some sources who received them, felt intimidating.

In some cases, the investigative effort was run through Weinstein’s lawyers, including David Boies, a celebrated attorney who represented Al Gore in the 2000 Presidential-election dispute and argued for marriage equality before the U.S. Supreme Court. Boies personally signed the contract directing Black Cube to attempt to uncover information that would stop the publication of a Times story about Weinstein’s abuses, while his firm was also representing the Times, including in a libel case.

Boies confirmed that his firm contracted with and paid two of the agencies and that investigators from one of them sent him reports, which were then passed on to Weinstein. He said that he did not select the firms or direct the investigators’ work. He also denied that the work regarding the Times story represented a conflict of interest. Boies said that his firm’s involvement with the investigators was a mistake. “We should not have been contracting with and paying investigators that we did not select and direct,” he told me. “At the time, it seemed a reasonable accommodation for a client, but it was not thought through, and that was my mistake. It was a mistake at the time.”

Techniques like the ones used by the agencies on Weinstein’s behalf are almost always kept secret, and, because such relationships are often run through law firms, the investigations are theoretically protected by attorney-client privilege, which could prevent them from being disclosed in court. The documents and sources reveal the tools and tactics available to powerful individuals to suppress negative stories and, in some cases, forestall criminal investigations.

In a statement, Weinstein’s spokesperson, Sallie Hofmeister, said, “It is a fiction to suggest that any individuals were targeted or suppressed at any time.”

In May, 2017, McGowan received an e-mail from a literary agency introducing her to a woman who identified herself as Diana Filip, the deputy head of sustainable and responsible investments at Reuben Capital Partners, a London-based wealth-management firm. Filip told McGowan that she was launching an initiative to combat discrimination against women in the workplace, and asked McGowan, a vocal women’s-rights advocate, to speak at a gala kickoff event later that year. Filip offered McGowan a fee of sixty thousand dollars. “I understand that we have a lot in common,” Filip wrote to McGowan before their first meeting, in May, at the Peninsula Hotel in Beverly Hills. Filip had a U.K. cell-phone number, and she spoke with what McGowan took to be a German accent. Over the following months, the two women met at least three more times at hotel bars in Los Angeles and New York and other locations. “I took her to the Venice boardwalk and we had ice cream while we strolled,” McGowan told me, adding that Filip was “very kind.” The two talked at length about issues relating to women’s empowerment. Filip also repeatedly told McGowan that she wanted to make a significant investment in McGowan’s production company.

Filip was persistent. In one e-mail, she suggested meeting in Los Angeles and then, when McGowan said she would be in New York, Filip said she could meet there just as easily. She also began pressing McGowan for information. In a conversation in July, McGowan revealed to Filip that she had spoken to me as part of my reporting on Weinstein. A week later, I received an e-mail from Filip asking for a meeting and suggesting that I join her campaign to end professional discrimination against women. “I am very impressed with your work as a male advocate for gender equality, and believe that you would make an invaluable addition to our activities,” she wrote, using her wealth-management firm’s e-mail address. Unsure of who she was, I did not respond.

Filip continued to meet with McGowan. In one meeting in September, Filip was joined by another Black Cube operative, who used the name Paul and claimed to be a colleague at Reuben Capital Partners. The goal, according to two sources with knowledge of the effort, was to pass McGowan to another operative to extract more information. On October 10th, the day The New Yorker published my story about Weinstein, Filip reached out to McGowan in an e-mail. “Hi Love,” she wrote. “How are you feeling? . . . Just wanted to tell you how brave I think you are.” She signed off with an “xx.” Filip e-mailed McGowan as recently as October 23rd.

In fact, “Diana Filip” was an alias for a former officer in the Israeli Defense Forces who originally hailed from Eastern Europe and was working for Black Cube, according to three individuals with knowledge of the situation. When I sent McGowan photos of the Black Cube agent, she recognized her instantly. “Oh my God,” she wrote back. “Reuben Capital. Diana Filip. No fucking way.”

Ben Wallace, a reporter at New York who was pursuing a story on Weinstein, said that the same woman met with him twice last fall. She identified herself only as Anna and suggested that she had an allegation against Weinstein. When I presented Wallace with the same photographs of Black Cube’s undercover operative, Wallace recalled her vividly. “That’s her,” he said. Like McGowan, Wallace said that the woman had what he assumed to be a German accent, as well as a U.K. cell-phone number. Wallace told me that Anna first contacted him on October 28, 2016, when he had been working on the Weinstein story for about a month and a half. Anna declined to disclose who had given her Wallace’s information. Over the course of the two meetings, Wallace grew increasingly suspicious of her motives. Anna seemed to be pushing him for information, he recalled, “about the status and scope of my inquiry, and about who I might be talking to, without giving me any meaningful help or information.” During their second meeting, Anna requested that they sit close together, leading Wallace to suspect that she might be recording the exchange. When she recounted her experiences with Weinstein, Wallace said, “it seemed like soap-opera acting.” Wallace wasn’t the only journalist the woman contacted. In addition to her e-mails to me, Filip also e-mailed Jodi Kantor, of the Times, according to sources involved in the effort.

The U.K. cell-phone numbers that Filip provided to Wallace and McGowan have been disconnected. Calls to Reuben Capital Partners’ number in London went unanswered. As recently as Friday, the firm had a bare-bones Web site, with stock photos and generic text passages about asset management and an initiative called Women in Focus. The site, which has now been taken down, listed an address near Piccadilly Circus, operated by a company specializing in shared office space. That company said that it had never heard of Reuben Capital Partners. Two sources with knowledge of Weinstein’s work with Black Cube said that the firm creates fictional companies to provide cover for its operatives, and that Filip’s firm was one of them.

Black Cube declined to comment on the specifics of any work it did for Weinstein. The agency said in a statement, “It is Black Cube’s policy to never discuss its clients with any third party, and to never confirm or deny any speculation made with regard to the company’s work. Black Cube supports the work of many leading law firms around the world, especially in the US, gathering evidence for complex legal processes, involving commercial disputes, among them uncovering negative campaigns. . . . It should be highlighted that Black Cube applies high moral standards to its work, and operates in full compliance with the law of any jurisdiction in which it operates—strictly following the guidance and legal opinions provided by leading law firms from around the world.” The contract with the firm also specified that all of its work would be obtained “by legal means and in compliance with all applicable laws and regulations.”

Last fall, Weinstein began mentioning Black Cube by name in conversations with his associates and attorneys. The agency had made a name for itself digging up information for companies in Israel, Europe, and the U.S. that led to successful legal judgments against business rivals. But the firm has also faced legal questions about its employees’ use of fake identities and other tactics. Last year, two of its investigators were arrested in Romania on hacking charges. In the end, the company reached an agreement with the Romanian authorities, under which the operatives admitted to hacking and were released. Two sources familiar with the agency defended its decision to work for Weinstein, saying that they originally believed that the assignment focussed on his business rivals. But even the earliest lists of names that Weinstein provided to Black Cube included actresses and journalists.

On October 28, 2016, Boies’s law firm, Boies Schiller Flexner, wired to Black Cube the first hundred thousand dollars, toward what would ultimately be a six-hundred-thousand-dollar invoice. (The documents do not make clear how much of the invoice was paid.) The law firm and Black Cube signed a contract that month and several others later. One, dated July 11, 2017, and bearing Boies’s signature, states that the project’s “primary objectives” are to “provide intelligence which will help the Client’s efforts to completely stop the publication of a new negative article in a leading NY newspaper” and to “obtain additional content of a book which currently being written and includes harmful negative information on and about the Client,” who is identified as Weinstein in multiple documents. (In one e-mail, a Black Cube executive asks lawyers retained by the agency to refer to Weinstein as “the end client” or “Mr. X,” noting that referring to him by name “will make him extremely angry.”) The article mentioned in the contract was, according to three sources, the story that ultimately ran in the Times on October 5th. The book was “Brave,” a memoir by McGowan, scheduled for publication by HarperCollins in January. The documents show that, in the end, the agency delivered to Weinstein more than a hundred pages of transcripts and descriptions of the book, based on tens of hours of recorded conversations between McGowan and the female private investigator.

Weinstein’s spokesperson, Hofmeister, called “the assertion that Mr. Weinstein secured any portion of a book . . . false and among the many inaccuracies and wild conspiracy theories promoted in this article.”

The July agreement included several “success fees” if Black Cube met its goals. The firm would receive an additional three hundred thousand dollars if the agency “provides intelligence which will directly contribute to the efforts to completely stop the Article from being published at all in any shape or form.” Black Cube would also be paid fifty thousand dollars if it secured “the other half” of McGowan’s book “in readable book and legally admissible format.”

The contracts also show some of the techniques that Black Cube employs. The agency promised “a dedicated team of expert intelligence officers that will operate in the USA and any other necessary country,” including a project manager, intelligence analysts, linguists, and “Avatar Operators” specifically hired to create fake identities on social media, as well as “operations experts with extensive experience in social engineering.” The agency also said that it would provide “a full time agent by the name of ‘Anna’ (hereinafter ‘the Agent’), who will be based in New York and Los Angeles as per the Client’s instructions and who will be available full time to assist the Client and his attorneys for the next four months.” Four sources with knowledge of Weinstein’s work with Black Cube confirmed that this was the same woman who met with McGowan and Wallace.

Black Cube also agreed to hire “an investigative journalist, as per the Client request,” who would be required to conduct ten interviews a month for four months and be paid forty thousand dollars. Black Cube agreed to “promptly report to the Client the results of such interviews by the Journalist.”

In January, 2017, a freelance journalist called McGowan and had a lengthy conversation with her that he recorded without telling her; he subsequently communicated with Black Cube about the interviews, though he denied he was reporting back to them in a formal capacity. He contacted at least two other women with allegations against Weinstein, including the actress Annabella Sciorra, who later went public in The New Yorker with a rape allegation against Weinstein. Sciorra, whom he called in August, said that she found the conversation suspicious and got off the phone as quickly as possible. “It struck me as B.S.,” she told me. “And it scared me that Harvey was testing to see if I would talk.” The freelancer also placed calls to Wallace, the New York reporter, and to me.

Two sources close to the effort and several documents show that the same freelancer received contact information for actresses, journalists, and business rivals of Weinstein from Black Cube, and that the agency ultimately passed summaries of those interviews to Weinstein’s lawyers. When contacted about his role, the freelancer, who spoke on condition of anonymity, said that he had been working on his own story about Weinstein, using contact information fed to him by Black Cube. The freelancer said that he reached out to other reporters, one of whom used material from his interviews, in the hopes of helping to expose Weinstein. He denied that he was paid by Black Cube or Weinstein.

Weinstein also enlisted other journalists to uncover information that he could use to undermine women with allegations. A December, 2016, e-mail exchange between Weinstein and Dylan Howard, the chief content officer of American Media Inc., which publishes the National Enquirer, shows that Howard shared with Weinstein material obtained by one of his reporters, as part of an effort to help Weinstein disprove McGowan’s allegation of rape. In one e-mail, Howard sent Weinstein a list of contacts. “Let’s discuss next steps on each,” he wrote. After Weinstein thanked him, Howard described a call that one of his reporters made to Elizabeth Avellan, the ex-wife of the director Robert Rodriguez, whom Rodriguez left to have a relationship with McGowan.

Avellan told me that she remembered the interview. Howard’s reporter “kept calling and calling and calling,” she said, and also contacted others close to her. Avellan finally called back, because “I was afraid people might start calling my kids.” In a long phone call, the reporter pressed her for unflattering statements about McGowan. She insisted that the call be off the record, and the reporter agreed. The reporter recorded the call, and subsequently passed the audio to Howard.

In subsequent e-mails to Weinstein, Howard said, “I have something AMAZING . . . eventually she laid into Rose pretty hard.” Weinstein replied, “This is the killer. Especially if my fingerprints r not on this.” Howard then reassured Weinstein, “They are not. And the conversation . . . is RECORDED.” The next day, Howard added, in another e-mail, “Audio file to follow.” (Howard denied sending the audio to Weinstein.) Avellan told me that she would not have agreed to coöperate in efforts to discredit McGowan. “I don’t want to shame people,” she said. “I wasn’t interested. Women should stand together.”

In a statement, Howard said that, in addition to his role as the chief content officer at American Media Inc., the National Enquirer’s publisher, he oversaw a television-production agreement with Weinstein, which has since been terminated. He said that, at the time of the e-mails, “absent a corporate decision to terminate the agreement with The Weinstein Company, I had an obligation to protect AMI’s interests by seeking out—but not publishing—truthful information about people who Mr. Weinstein insisted were making false claims against him. To the extent I provided ‘off the record’ information to Mr. Weinstein about one of his accusers—at a time when Mr. Weinstein was denying any harassment of any woman—it was information which I would never have allowed AMI to publish on the internet or in its magazines.” Although at least one of Howard’s reporters made calls related to Weinstein’s investigations, Howard insisted that he strictly divided his work with Weinstein from his work as a journalist. “I always separated those two roles carefully and completely—and resisted Mr. Weinstein’s repeated efforts to have AMI titles publish favorable stories about him or negative articles about his accusers,” Howard said. An A.M.I. representative noted that, at the time, Weinstein insisted that the encounter was consensual, and that the allegations were untrue.

Hofmeister, Weinstein’s spokesperson, added, “In regard to Mr. Howard, he has served as the point person for American Media’s long-standing business relationship with The Weinstein Company. Earlier this year, Mr. Weinstein gave Mr. Howard a news tip that Mr. Howard agreed might make a good story. Mr. Howard pursued the tip and followed up with Mr. Weinstein as a courtesy, but declined to publish any story.”

Weinstein’s relationship with Kroll, one of the other agencies he contracted with, dates back years. After Ambra Battilana Gutierrez, an Italian model, accused Weinstein of sexually assaulting her, in 2015, she reached a settlement with Weinstein that required her to surrender all her personal devices to Kroll, so that they could be wiped of evidence of a conversation in which Weinstein admitted to groping her. A recording of that exchange, captured during a police sting operation, was released by The New Yorker last month.

During the more recent effort to shut down emerging stories, Kroll again played a central role. E-mails show that Dan Karson, the chairman of Kroll Americas’ Investigations and Disputes practice, contacted Weinstein at his personal e-mail address with information about women with allegations. In one October, 2016, e-mail, Karson sent Weinstein eleven photographs of McGowan and Weinstein together at different events in the years after he allegedly assaulted her. Three hours later, Weinstein forwarded Karson’s e-mail to Boies and Weinstein’s criminal-defense attorney, Blair Berk, and told them to “scroll thru the extra ones.” The next morning, Berk replied that one photo, which showed McGowan warmly talking with Weinstein, “is the money shot.”

Berk defended her actions. “Any criminal-defense lawyer worth her salt would investigate unproven allegations to determine if they are credible,” she said. “And it would be dereliction of duty not to conduct a public-records search for photographs of the accuser embracing the accused taken after the time of the alleged assault.”

Another firm, the Los Angeles-based PSOPS, and its lead private investigator, Jack Palladino, as well as another one of its investigators, Sara Ness, produced detailed profiles of various individuals in the saga, sometimes of a personal nature, which included information that could be used to undermine their credibility. One report on McGowan that Ness sent to Weinstein last December ran for more than a hundred pages and featured McGowan’s address and other personal information, along with sections labelled “Lies/Exaggerations/Contradictions,” “Hypocrisy,” and “Potential Negative Character Wits,” an apparent abbreviation of “witnesses.” One subhead read “Past Lovers.” The section included details of acrimonious breakups, mentioning Avellan, and discussed Facebook posts expressing negative sentiments about McGowan. (Palladino and Ness did not respond to multiple requests for comment.)

Other firms were also involved in assembling such profiles, including ones that focussed on factors that, in theory, might make women likely to speak out against sexual abuse. One of the other firm’s profiles was of Rosanna Arquette, an actress who later, in The New Yorker, accused Weinstein of sexual harassment. The file mentions Arquette’s friendship with McGowan, social-media posts about sexual abuse, and the fact that a family member had gone public with an allegation that she had been molested as a child.

All of the security firms that Weinstein hired were also involved in trying to ferret out reporters’ sources and probe their backgrounds. Wallace, the reporter for New York, said that he was suspicious when he received the call from the Black Cube operative using the pseudonym Anna, because Weinstein had already requested a meeting with Wallace; Adam Moss, the editor-in-chief of New York; David Boies; and a representative from Kroll. The intention, Wallace assumed, was to “come in with dossiers slagging various women and me.” Moss declined the meeting.

In a series of e-mails sent in the weeks before Wallace received the call from Anna, Dan Karson, of Kroll, sent Weinstein preliminary background information on Wallace and Moss. “No adverse information about Adam Moss so far (no libel/defamation cases, no court records or judgments/liens/UCC, etc.),” Karson wrote in one e-mail. Two months later, Palladino, the PSOPS investigator, sent Weinstein a detailed profile of Moss. It stated, “Our research did not yield any promising avenues for the personal impeachment of Moss.”

Similar e-mail exchanges occurred regarding Wallace. Kroll sent Weinstein a list of public criticisms of Wallace’s previous reporting and a detailed description of a U.K. libel suit filed in response to a book he wrote, in 2008, about the rare-wine market. PSOPS also profiled Wallace’s ex-wife, noting that she “might prove relevant to considerations of our response strategy when Wallace’s article on our client is finally published.”

In January, 2017, Wallace, Moss, and other editors at New York decided to shelve the story. Wallace had assembled a detailed list of women with allegations, but he lacked on-the-record statements from any victims. Wallace said that the decision not to run a story was made for legitimate journalistic reasons. Nevertheless, he said, “There was much more static and distraction than I’ve encountered on any other story.”

Other reporters were investigated as well. In April, 2017, Ness, of PSOPS, sent Weinstein an assessment of my own interactions with “persons of interest”—a list largely consisting of women with allegations, or those connected to them. Later, PSOPS submitted a detailed report focussing jointly on me and Jodi Kantor, of the Times. Some of the observations in the report are mundane. “Kantor is NOT following Ronan Farrow,” it notes, referring to relationships on Twitter. At other times, the report reflects a detailed effort to uncover sources. One individual I interviewed, and another whom Kantor spoke to in her separate endeavor, were listed as having reported the details of the conversations back to Weinstein.

For years, Weinstein had used private security agencies to investigate reporters. In the early aughts, as the journalist David Carr, who died in 2015, worked on a report on Weinstein for New York, Weinstein assigned Kroll to dig up unflattering information about him, according to a source close to the matter. Carr’s widow, Jill Rooney Carr, told me that her husband believed that he was being surveilled, though he didn’t know by whom. “He thought he was being followed,” she recalled. In one document, Weinstein’s investigators wrote that Carr had learned of McGowan’s allegation in the course of his reporting. Carr “wrote a number of critical/unflattering articles about HW over the years,” the document says, “none of which touched on the topic of women (due to fear of HW’s retaliation, according to HW).”

Weinstein’s relationships with the private investigators were often routed through law firms that represented him. This is designed to place investigative materials under the aegis of attorney-client privilege, which can prevent the disclosure of communications, even in court.

David Boies, who was involved in the relationships with Black Cube and PSOPS, was initially reluctant to speak with The New Yorker, out of concern that he might be “misinterpreted either as trying to deny or minimize mistakes that were made, or as agreeing with criticisms that I don’t agree are valid.”

But Boies did feel the need to respond to what he considered “fair and important” questions about his hiring of investigators. He said that he did not consider the contractual provisions directing Black Cube to stop the publication of the Times story to be a conflict of interest, because his firm was also representing the newspaper in a libel suit. From the beginning, he said, he advised Weinstein “that the story could not be stopped by threats or influence and that the only way the story could be stopped was by convincing the Times that there was no rape.” Boies told me he never pressured any news outlet. “If evidence could be uncovered to convince the Times the charges should not be published, I did not believe, and do not believe, that that would be averse to the Times’ interest.”

He conceded, however, that any efforts to profile and undermine reporters, at the Times and elsewhere, were problematic. “In general, I don’t think it’s appropriate to try to pressure reporters,” he said. “If that did happen here, it would not have been appropriate.”

Although the agencies paid by his firm focussed on many women with allegations, Boies said that he had only been aware of their work related to McGowan, whose allegations Weinstein denied. “Given what was known at the time, I thought it was entirely appropriate to investigate precisely what he was accused of doing, and to investigate whether there were facts that would rebut those accusations,” he said.

Of his representation of Weinstein in general, he said, “I don’t believe former lawyers should criticize former clients.” But he expressed regrets. “Although he vigorously denies using physical force, Mr. Weinstein has himself recognized that his contact with women was indefensible and incredibly hurtful,” Boies told me. “In retrospect, I knew enough in 2015 that I believe I should have been on notice of a problem, and done something about it. I don’t know what, if anything, happened after 2015, but to the extent it did, I think I have some responsibility. I also think that if people had taken action earlier it would have been better for Mr. Weinstein.”

Weinstein also drafted individuals around him into his efforts—willingly and not. In December, 2016, Weinstein asked the actress Asia Argento, who ultimately went public in The New Yorker with her allegation of rape against Weinstein, to meet in Italy with his private investigators to give testimony on his behalf. Argento, who felt pressure to say yes, declined after her partner, the chef and television personality Anthony Bourdain, advised her to avoid the meeting. Another actress, who declined to be named in this story, said that Weinstein asked her to meet with reporters to extract information about other sources.

Weinstein also enlisted two former employees, Denise Doyle Chambers and Pamela Lubell, in what turned out to be an effort to identify and call people who might speak to the press about their own, or others’, allegations. Weinstein secretly shared the lists they compiled with Black Cube.

Hofmeister, speaking on Weinstein’s behalf, said, “Any ‘lists’ that were prepared included names of former employees and others who were relevant to the research and preparation of a book about Miramax. Former employees conducting interviews for the book reported receiving unwanted contacts from the media.”

Doyle Chambers declined an interview request. But Lubell, a producer who worked for Weinstein at Miramax decades ago, told me that she was manipulated into participating. In July, 2017, Lubell visited Weinstein’s offices to pitch him on an app that she was developing. In the middle of the meeting, Weinstein asked Lubell if they could have a private conversation in his office. Lubell told me that a lawyer working with Weinstein was already there, along with Doyle Chambers. Weinstein asked if Lubell and Doyle Chambers could write a “fun book on the old times, the heyday, of Miramax.” “Pam,” she recalled him saying, “write down all the employees that you know, and can you get in touch with them?”

A few weeks later, in August, after they had made the list, Weinstein “called us back into the office,” Lubell recalled. “And he said, ‘You know what, we’re going to put a hold on the book.’ ” He asked Doyle Chambers and Lubell to “call some of your friends from the list and see if they got calls from the press.” In early September, Weinstein summoned Lubell and Doyle Chambers to his office and asked them to start making calls to people connected to several actresses. “It got kind of intense,” Lubell recalled. “We didn’t know these people, and all of a sudden this was something very different from what we signed up for.” Several of the targeted women said that they felt the calls they received from Lubell and Doyle Chambers, and from Weinstein himself, were frightening.

Lubell told me that hours before the first Times story broke, on October 5th, Weinstein summoned her, Doyle Chambers, and others on his team, including the attorney Lisa Bloom, who has since resigned, to his office. “He was in a panic,” Lubell recalled. “He starts screaming, ‘Get so-and-so on the phone.’ ” After the story was published, the team scrambled to respond to it. Bloom and others pored over pictures that, like the ones featured in the Kroll e-mails, showed ongoing contact between Weinstein and women who made allegations. “He was screaming at us, ‘Send these to the board members,’ ” Lubell recalled. She e-mailed the photographs to the board ahead of the crisis meeting at which Weinstein’s position at his company began unravelling.

Since the allegations against Weinstein became public, Lubell hasn’t slept well. She told me that, although she knew that Weinstein “was a bully and a cheater,” she “never thought he was a predator.” Lubell has wondered if she should have known more, sooner.

After a year of concerted effort, Weinstein’s campaign to track and silence his accusers crumbled. Several of the women targeted, however, said that Weinstein’s use of private security agencies deepened the challenge of speaking out. “It scared me,” Sciorra said, “because I knew what it meant to be threatened by Harvey. I was in fear of him finding me.” McGowan said that the agencies and law firms enabled Weinstein’s behavior. As she was targeted, she felt a growing sense of paranoia. “It was like the movie ‘Gaslight,’ ” she told me. “Everyone lied to me all the time.” For the past year, she said, “I’ve lived inside a mirrored fun house.”

 

 

Testimony: Hezbollah, the Illicit Networks Global Reach

Place of Origin: Lebanon

Year of Origin: 1982

Founder(s): Ali Akbar Mohtashemi—Iran’s then-ambassador to Syria; Imad Fayez Mughniyeh; Grand Ayatollah Muhammad Hussein Fadlallah; Abbas al-Musawi

Places of Operation: Lebanon, Syria, Germany, Mexico, Paraguay, Argentina, Brazil, Iran, United Arab Emirates

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*** Related reading: Egypt’s Sisi against idea of strikes on Iran, Hezbollah

Emanuele Ottolenghi
House Committee on Foreign Affairs, Western Hemisphere Subcommittee
8 November 2017

Chairman Cook, allow me first to congratulate you on your recent appointment as the new chairman of this subcommittee. Mr. Chairman, Ranking Member Sires, members of the subcommittee, thank you for the opportunity to testify on behalf of the Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance.

In 2011, the U.S. Drug Enforcement Administration (DEA) indicted Ayman Saied Joumaa, a Lebanese-Colombian dual national whose global network of companies operating out of Latin America, West Africa, and Lebanon laundered money for Mexican and Colombian cartels to the tune of $200 million a month of drug proceeds.[1] Joumaa worked with Hezbollah as the kingpin in one of many networks Hezbollah runs globally to sustain its financial needs. When his case came to light, the New York Times quoted a DEA official as saying that Hezbollah operated like “the Gambinos on steroids.”[2]

The United States cannot continue to combat a threat of such magnitude unless it leverages all its tools of statecraft in a combined, sustained, and coordinated fashion. Over the past decade, Hezbollah’s terror finance outside Lebanon has evolved from a relatively small fundraising operation involving trade-based money laundering and charitable donations into a multi-billion dollar global criminal enterprise.

Increasing quantities of Schedule 2 drugs like cocaine invade the U.S. from Latin America, adding fuel to the opioid pandemic that has already cost so many lives.[3] Cocaine consumption is as much a national epidemic as opioids, Mr. Chairman, and Hezbollah helps make it available to U.S. consumers.

This makes Hezbollah, its senior leadership, and its numerous operatives involved in running illicit drug-trafficking and money-laundering operations on a global scale the perfect candidates for Kingpin and Transnational Crime Organization designations, in addition to the terrorism and terror finance designations already in place.

The U.S. government has, over the years, developed remarkably sharp and effective tools to counteract Hezbollah’s terror finance threat, but is not using them as vigorously as it should. The Kingpin Act is one such instrument. But like all other instruments of statecraft, its impact would be much greater if used consistently and in conjunction with other tools. The challenge for Congress, the executive branch, the intelligence community, and law enforcement agencies is to leverage these tools in a manner that will outsmart Hezbollah and disrupt its cash flows enough to inflict irreparable damage to the terror group’s finances.

In pursuit of this goal, America needs to better coordinate the application and enforcement of all instruments available from the formidable toolbox created over the past two decades by legislation and executive orders, including leveraging Executive Orders 13581 and 13773 on combating transnational organized crime, Executive Order 13224 on combating sources of terror finance, the 1999 Foreign Narcotics Kingpin Designation Act, the 2015 Hezbollah International Financing Prevention Act (HIFPA), the Global Magnitsky Human Rights Accountability Act of 2016, and soon the Hezbollah International Financing Prevention Act Amendment of 2017, which is now awaiting reconciliation between its House and Senate versions and which will, once approved, expand on HIFPA.

In doing so, it should focus significantly on the Western Hemisphere, where Hezbollah’s global footprint, especially in Latin America, is most menacing.

Hezbollah’s regional operations are part of a global network of illicit financial and commercial enterprises whose goal is to fund Hezbollah’s activities in the Middle East. Where and when needed, these networks can also be activated to provide logistical support to operatives engaged in planning terror attacks. The United States therefore needs to think and act globally to disrupt Hezbollah’s illicit finance networks. Latin America is a very good place to start doing that.

In the remainder of my testimony, I will discuss evidence demonstrating the magnitude of the threat posed by Hezbollah’s terror finance to the national security of the United States. I will also provide evidence of the high-ranking nature of Hezbollah’s operatives in Latin America – a sure sign of the importance of Hezbollah’s Latin American networks to the organization’s budget. And I will discuss the impact of U.S. policy and actions on disrupting Hezbollah’s terror finance activities. The evidence I am presenting today, hopefully, will highlight both strengths and weaknesses of present U.S. policy and offer ways to improve results.

Download the full testimony here.

[1] U.S. Department of the Treasury, Press Release, “Treasury Targets Major Lebanese-Based Drug Trafficking and Money Laundering Network,” January 26, 2011. (https://www.treasury.gov/press-center/press-releases/Pagés/tg1035.aspx); see also: U.S. Department of the Treasury, Press Release, “U.S. Charges Alleged Lebanese Drug Kingpin with Laundering Drug Proceeds for Mexican and Colombian Drug Cartels,” December 13, 2011. (https://www.justice.gov/archive/usao/vae/news/2011/12/20111213joumaanr.html)

[2] Jo Becker, “Beirut Bank Seen as a Hub of Hezbollah’s Financing,” The New York Times, December 13, 2011. (http://www.nytimes.com/2011/12/14/world/middleeast/beirut-bank-seen-as-a-hub-of-hezbollahs-financing.html)

[3] Nick Miroff, “American cocaine use is way up. Colombia’s coca boom may be why,” The Washington Post, March 4, 2017. (https://www.washingtonpost.com/news/worldviews/wp/2017/03/04/colombias-coca-boom-is-showing-up-on-u-s-streets/?utm_term=.d370be3ebe9c)

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*** A short briefing from the State Department on October 10, 2017 by National Counter-terrorism Center Director, Nick Rasmussen:

Hizballah’s use of terrorism across the globe, which has persisted for several decades; second, the group’s continued effort to advance terrorism acts worldwide; and third, the fact that the organization is, in fact, focused on U.S. interests, including here in the homeland. And that is part of the reason why we are here today.

Lebanese Hizballah has repeatedly demonstrated for the world its true character. It is an organization that relies on terrorism as well as other forms of violence and coercion to achieve its goals. And this takes place in spite of the group’s attempts to portray itself as a legitimate political party. Prior to September 11th, I think everybody knows Hizballah was responsible for the terrorism-related deaths of more U.S. citizens than any other foreign terrorist organization.

Now, for many Americans, their introduction to the threat posed by this group came after Hizballah’s attack on the U.S. embassy in Beirut in April of 1983. That horrific attack killed 63 and wounded an additional 120 individuals, and it was followed by an even more deadly attack on our Marine barracks in October of 1983 which killed 241 Americans and wounded an additional 128 Americans.

So Hizballah’s penchant for violence has not changed over the last three decades. We’ve seen time and time again with its international terrorism unit, the External Security Organization, also known as the IJO, the Islamic Jihad Organization, and Unit 910, 9-1-0. But its deployment of operatives to nearly every corner of the globe continues to engage in terrorism-related activity.

In 2012 the group carried out a bomb attack in Bulgaria that killed five Israeli tourists and one Bulgarian national, and a number of Hizballah operatives have been caught laying the groundwork for attacks in places like Azerbaijan, in Egypt, in Thailand, in Cyprus, and in Peru. And there are other instances of Hizballah-related arrests and disruptions around the world that are at this point unpublicized and remain classified.

But all of this together shows us that the group seeks to develop and maintain a global capability to carry out acts of terror. I can assure you that the conversation today would be much different had some of these disrupted plots actually succeeded. Casualty counts would be higher and many innocent lives would have been forever altered. The group is also known to focus on areas populated by tourists, almost guaranteeing that with their attacks innocent victims – innocent civilians will be victims.

Now, with respect to the homeland here in the United States, let me say this. While much of our work in the government since 9/11 has focused on al-Qaida and more recently on ISIS, in the 20 years since Hizballah’s designation as a foreign terrorist organization, we have never taken our focus off of Hizballah and on the threat it represents to the homeland.

***

Syria, ISIS, and the Broader Middle East
As an Iranian proxy, Hezbollah has taken up arms alongside Syrian and Iranian forces in defense of the Syrian regime in that country’s civil war. In 2012, the U.S. Treasury levied additional sanctions on Hezbollah for its support of Syrian President Bashar al-Assad’s regime. According to Treasury, since the beginning of the Syrian civil war in early 2011,
Hezbollah provided “training, advice and extensive logistical support to the Government of Syria’s increasingly ruthless efforts to fight against the opposition.” 45
As of October 2016, Hezbollah and Syrian forces were reportedly besieging some 40,000 Syrians in three towns, preventing them access to medical treatment. 46
During an October 2016 rally in Beirut, Nasrallah promised that Hezbollah
would “continue to bear our great responsibilities of jihad” in Syria. 47
In January 2015, in response to Israeli airstrikes on alleged weapons shipments to Hezbollah in Syria, Nasrallah called the strikes an aggression against Syria’s regional allies.
As such, Syria’s allies have the right to retaliate, according to Nasrallah. 48
Hezbollah’s activity in Syria has its domestic detractors as well. Subhi al-Tufayli, Hezbollah’s first secretary-general from 1989 to 1991, has accused Hezbollah of being
a “partner in the killing of the Syrian people.” He denounced Hezbollah members who fight alongside Russians, and called on the Hezbollah leadership to heed Lebanese opposition to the group’s involvement in Syria. 49
Hezbollah’s role in Syria is not limited to fighting anti-government rebels. Under Iranian direction, Hezbollah has also fought against ISIS, which Nasrallah described as a growing threat to the region and an existential threat to Lebanon in an August 2014 interview with the Lebanese newspaper Al-Akhbar. 50
Hezbollah has also fought against the Nusra Front (Jabhat Fateh al-Sham).51
On October 19, 2016, Qassem told Hezbollah’s Al-Manar TV that Hezbollah “will not leave Syria as long as there is a need to confront takfiri groups.” 52
In November 2016, Hezbollah held a public parade in the Syrian city of Qusair to highlight its role in the conflict. The terror group showcased U.S. and Russian armored personnel carriers and tanks. The U.S. State Department issued a statement that it was “gravely concerned” and investigating how Hezbollah acquired U.S. equipment. 53
The United States provides aid to the Lebanese military, which denied that U.S.-provided weaponry had been transferred to Hezbollah 54. Read the full report here.

Anyone Paying Attention to Wilbur Ross, Commerce Sec?

What is Wilbur Ross worth? The answer is a slippery one when you ask Wilbur to respond. There is a dispute when it comes to his financials in the ranger of a billion or two. Further, where did his wealth come from you ask? Well there were allegedly family trusts, hotels, shipping companies, steel, banking in Cyprus and even those Rothschilds. More here from Forbes.

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Wilbur Ross’ company has been moving LPG for a Russian gas giant.

But now, in what might seem almost an echo of the Red Scare that lasted in America for generations, this business relationship is seen as tainted, an ominous connection to a country that unleashed cyberwar against American democracy and the 2016 election that put Trump in the White House.

Are all connections to Russia now suspect? Or are they sometimes merely an inconvenient consequence of doing business in a country where major corporations often are controlled by the Kremlin?

The latest tie between Russia, Trump and his campaign and administration officials came to light Sunday with news that the U.S. commerce secretary is a part owner of Navigator Holdings, a shipping company that transports LPG produced by Sibur, a big Russian company with ties to the Kremlin.

Some shipping business experts who follow the company are shrugging off the news.

“Russia has a lot of commodities that need to go somewhere else,” said Benjamin J. Nolan, a financial analyst who covers Navigator for Stifel, Nicolaus & Co. He added, “Odds are, they are going to have long term contracts with Western shipping companies.”

The Russian government is a powerful factor in almost every part of the country’s economy. Some of Russia’s biggest banks, such as Sberbank and VTB are state-controlled, with their management answering directly or indirectly to the Kremlin.

Then there is Gazprom, a big gas supplier to Europe, and Rosneft, the oil producer. Both are majority state owned.

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Two people associated with Siber are under U.S. sanctions

***

How about Venezuela? Yup…

Despite U.S. sanctions on Venezuela’s bond transactions in international markets and other restrictions against top officials, the Paradise Papers show that Secretary of Commerce Wilbur Ross has an important stake in multi-million dollar businesses related with state-oil giant Petróleos de Venezuela (PDVSA).

As reported by Newsweek on Sunday, Ross still retains interest in Navigator Holdings, a shipping company incorporated in the Marshall Islands in the South Pacific that maintains a close relationship with Russia’s energy company SIBUR, which is run by President Vladimir Putin’s son-in-law Kirill Shamalov and other individuals who have been sanctioned by the U.S. Navigator Holdings has received millions of dollars every year in earnings due to coastal shipping services provided to PDVSA.

PDVSA is no small client of Navigator Holdings. The state-oil company contributed to 10.7 percent of Navigator’s earnings during fiscal year 2014 and 11.7 percent in fiscal year 2015, according to Venezuelan newspaper El Nacional. The company’s earnings translate into $33.7 million and $36.7 million for each fiscal year thanks to PDVSA’s use of the Navigator’s 29 tankers to carry liquefied petroleum gas during those years.

As he was awaiting confirmation, Ross failed to disclose any business interests with Putin’s family and his stake in the maritime industry. James Rockas, Ross’s spokesman, told the New York Times that the secretary of commerce “recuses himself from any matters focused on transoceanic shipping vessels, but has been generally supportive of the [Trump] administration’s sanctions of Russian and Venezuelan entities.”

But Ross’s businesses pose a potential conflict of interest, ICIJ reported. Ross has “the power to influence U.S. trade, sanctions and other matters that could affect SIBUR’s owners,” the Paradise Papers report added. More here from Newsweek.

 

Here Comes Eric Holder, Again Marc Elias Right Behind Him

Holder’s a Democrat, but it wasn’t Northam’s tax plans or social views or life story that brought him there. It was the National Democratic Redistricting Committee (NDRC), the Obama-backed group he chairs, which decided months ago that the most important way this year to shape the future of gerrymandering was ensuring a Democrat is in the Virginia governor’s mansion when the next set of House and state legislative maps get drawn after the 2020 Census.

The $1.2 million that the NDRC has put behind Northam, some direct to his campaign and some through its own digital ad program, is nothing compared to the group’s plan for 2018: a goal of raising over $30 million, to be deployed largely into governors’ races—with a focus on large states where substantially shifting the legislature is out of reach, like Ohio, Pennsylvania and Wisconsin. Where recapturing the statehouse is within reach, or where there’s a chance to bust up a GOP supermajority—as in Colorado, Minnesota, Nevada and North Carolina—they will back and help direct Democrats’ efforts.

So far, a majority of NDRC money and attention is going to legal challenges, and though the group is currently hiring a litigation director, most of the work is being handled by well-known Democratic elections lawyer Marc Elias. Already this year, they’ve been pursuing cases in Georgia, North Carolina and Virginia, and expect that this will be an even bigger part of their role in off years ahead, and in challenging maps drawn in states where they don’t do well in elections. The whole summary is here.

Now on to that cat, Marc Elias…Holder, Hillary and Barack’s friend.

Big questions are being asked on The Hill about how journalists were paid to spread the news about the slimy dossier.

Rep. Devin Nunes, California Republican and chairman of the House Permanent Select Committee on Intelligence, signed a subpoena to force a bank to turn over Fusion’s financial records. He wants to know who paid for the dossier, which was written in a series of 18 memos by former British spy Christopher Steele. He relied almost exclusively on unidentified Kremlin sources.

Fusion went to federal court to block the move, but the law firm Perkins Coie LLP, whose partner Marc E. Elias is the Clinton’s campaign’s general counsel, intervened. It filed a letter acknowledging it had paid Fusion for the dossier on behalf of Democrats. Fusion and Mr. Nunes then worked out an agreement on access to some of the firm’s financial records. The rest of the story here.

*** Marc Elias is the ‘go-to’ legal fixer guy for almost every Democrat in DC… 1-800 Call Marc

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Remember Obama’s White House lawyer, Bob Bauer? He is the founder of the law firm Perkins Coie.

The firm was founded by attorney Bob Bauer, who has been a close legal adviser to President Barack Obama ever since he decided to run for Senate in 2005. Bauer was the chief counsel for the Obama White House from Jan. 2010 to Jun. 2011.

Elias was called on for Claire McCaskill and Mary Landrieu….Harry Reid and even John Kerry dialed him up over the whole ‘Swift Boat’ thing. More here.

Roll Call profiles Marc Elias, a partner at Perkins Cole and the go-to election lawyer for Democrats. “Over the past decade, since Kerry hired him as his campaign counsel, Elias has risen to become an indispensable figure in the party. He has a second office in the Democratic Senatorial Campaign Committee headquarters, where he’ll spend most of Election Day “pacing around” Executive Director Guy Cecil’s office “and driving him nuts for most of the day.”.. As chairman of the political law practice at Perkins Coie, Elias oversees 18 attorneys and represents nearly every Democratic senator. The firm’s client list also includes the Democratic Congressional Campaign Committee, the Democratic National Committee and the Democratic Governors Association.

The 45-year-old was born in New York City, grew up on Long Island and attended high school in Suffern, a small town in suburban Rockland County. He’s one of two sons to a stay-at-home-mom and a father who worked on Wall Street before becoming a small-business owner. They were “New Deal Democrats, Jews from New York,” Elias said, laughing. He graduated from Hamilton College in 1990 with a degree in government before going to Duke, where he earned both a law degree and a master’s in political science in 1993. He joined Perkins Coie and quickly moved into the political law practice under Bob Bauer, who would go on to become campaign and White House counsel to Barack Obama, and Judy Corley, who became in-house counsel to Richard Gephardt after Republicans won the House majority in 1994.” [RollCall]