Trump's Supreme Court Seat: The Art of the Steal

Andrew Kreig

(Andrew Kreig is the editor of the Justice Integrity Project and he was good enough to do this very relevant guest post for us)

Did U.S. Supreme Court Justice Anthony Kennedy's sudden resignation June 27 stem from corrupt motives?

That question looms even as most court watchers focus on the conventional analysis of evaluating Kennedy's proposed successor, U.S. District of Columbia Circuit Judge Brett Kavanaugh, 53, whom President Trump announced Monday evening on July 9.

No matter what hoopla, drama and distraction Trump planned around the selection the possibility of Deep State corruption deserves our attention-- and as thorough an investigation as society's (mostly) timid and toothless watchdogs can muster.

That's particularly so when the high stakes involve an activist ultra-right court majority likely to protect the current president and his cronies from an ongoing corruption probe, with stage apparently set for this appointment by relationships forged with hundreds of millions of dollars in suspicious money disbursed among the current players.

That kind of attack on democracy by corrupt elites, one of the definitions of a "Deep State," is as bad or worse than the court rulings and precedents that a new justice may help create. The intrigue is heightened because Republicans arguably "stole" a seat-- and their current majority-- by failing to schedule hearings on any Democratic nominee during the last year of President Obama's second term.

There are and will be many mainstream critiques of Kavanaugh and his worthiness for confirmation, with the basics already summarized before the announced by the specialist SCOTUSblog in a profile by its editor Edith Roberts entitled Potential nominee profile: Brett Kavanaugh.

But this column takes the scrutiny to a deeper level, given the high stakes of the process and the repeated gaming of the system by Republicans and their appointees who are typically described as "conservatives" but should be described instead as radical right activists who want a result-oriented federal court system to enact their agenda, no matter what bromides they utter during charade-like confirmation hearings.

The track record of this and other recent court appointments provides a solid basis for scrutiny, if not outrage.

In this instance, suspicions of the process arise in part because of the vast financial transitions between Deutsche Bank and LNR Property, entities associated with the Trump and Kennedy families, as well as the clear-cut benefit for Republicans and Trump by rousing their base with a new court appointment before the mid-term congressional elections in November. Kennedy had already hired court clerks for the coming term, suggesting that he did not expect to retire until recently.

Trump could also benefit in rulings from a younger and more partisan justice than Kennedy on what are likely to be increasingly serious legal actions by Special Counsel Robert Mueller III against Trump Administration players.

On Monday, Republican Justice Clarence Thomas' wife Virginia showed yet again her side's utter contempt for non-partisan judicial norms when she used her Twitter feed to defend U.S. Rep. Jim Jordan from accusations that Jordan, as Ohio State University's assistant wresting coach, had helped enable a team doctor's sexual predations on team members.

Jordan, an Ohio Freedom Caucus leader running to become House Speaker, is one of Trump's major GOP defenders against the corruption probe by Special Counsel Robert Mueller III. Virginia "Ginni" Thomas is a longtime hard-right Republican activist who years ago showed her corrupt proclivities (See the 2011 Los Angeles Times blockbuster, Clarence Thomas failed to report wife's income, watchdog says) by trying to start a consulting business in advance of her husband's (and Kennedy's) vote to destroy the nation's federal campaign financing system in the all-Republican 5-4 Citizens United v. Federal Election Commission decision.

Kennedy has been part of such presidential puppetry before, most obviously with his vote in the 5-4 Bush-v. Gore decision in 2000 that stopped that year's presidential vote recount in Florida. With court precedent to anyone but ultra-right partisans, Kennedy thus awarded the U.S. presidency (by an unprecedented court fiat enacted exclusively by Republicans) to GOP nominee George W. Bush, thus altering American history in enduring ways.

With that background, we explore more fully below the suspicious activity between the Trump and Kennedy families in this sequel to New GOP High Court Threatens Massive Public Pain, our previous analysis of recent court decisions and the potential civic harms stemming from Kennedy's resignation.

The Basic Suspicions

Public awareness of an unusually close relationship between the Trump and Kennedy families first arose from New York-region financial reporters more than a decade ago between Justice Kennedy's son, Justin, and his work with real estate entities owned by Trump and the family of his son-in-law Jared Kushner. Last year, the Capitol Hill publication Politico noted a brief, chummy and seemingly innocuous semi-private exchange in 2017 between Trump and the associate justice during Trump's presidential address to Congress in February of that year.

Kennedy's resignation last month prompted several bold reporters and commentators to revisit the multiple relationships involved and raise alarms. Meanwhile, partisans and apologists for conventional order have been quick to dismiss any concerns even though no one as yet from any viewpoint can produce definitive evidence of either corruption or innocence from what are complicated financial and personal relationships.

We examine these matters below, with an extensive appendix of relevant news reports.

Kennedy Family's Background

Justice Anthony Kennedy is a native Californian who attended Stanford University as an undergraduate and earned his law degree from Harvard. He won confirmation to the Supreme Court on a 97-0 vote and took his seat 31 years ago.

At first glance, he would not seem likely to have developed any kind of personal relationship with the brash New York entrepreneur and celebrity-turned-politico Donald Trump before the latter's election to the presidency in 2016.

But children of the wealthy and well-connected have a way of finding each other in a country increasingly divided into the haves and have-nots. The most notable relationships arose between Kennedy's son who entered the banking business and those businesses in the Trump-Kushner circle that needed money for their far-flung and often over-extended plans.

New York Times reporter Maggie Haberman, whose mother has worked at a public relations company representing the Trump Organization, was one of the first to suggest the relevancy of these relationships in the context of Kennedy's resignation.

Her front-page story co-authored with Times Supreme Court reporter Adam Liptak on the day of Kennedy's resignation June 28 was headlined Inside the White House’s Quiet Campaign to Create a Supreme Court Opening. Its subtitle was "President Trump singled him out for praise even while attacking other members of the Supreme Court."

The story chronicled how "The White House nominated people close to him to important judicial posts. And members of the Trump family forged personal connections." Fairly far down, their story contained this intriguing paragraph about one of Justice Kennedy's sons, Justin, a high-level executive of a Germany-based bank:

During Mr. Kennedy’s tenure, Deutsche Bank became Mr. Trump’s most important lender, dispensing well over $1 billion in loans to him for the renovation and construction of skyscrapers in New York and Chicago at a time other mainstream banks were wary of doing business with him because of his troubled business history.

That same day, on June 28, investigative reporter and public affairs commentator Wayne Madsen was one of the first to take suggest dark suspicions. Before getting to that we'll draw (with his permission) from his introduction of the players, which is drawn from his column Reports of Trump collusion with Gorsuch and Kennedy to pack the Supreme Court  on the Wayne Madsen Report, a subscription-only investigative site.

"There are multiple reports coming out of congressional and media circles in Washington, DC," Madsen wrote, "that Donald Trump colluded with Supreme Court Associate Justice Neil Gorsuch and the sons of Associate Justice Anthony Kennedy to convince Justice Kennedy to retire. Kennedy's announcement that he is retiring sent shock waves through the country, with fears that Trump's replacement will provide a solid 5-4 court majority that will help Trump roll back several fundamental constitutional rights.

More importantly, a 5-4 Republican majority on the court is seen by Trump as protecting him from any indictment or recommendation for impeachment arising from the Justice Department investigation of Trump and his associates being conducted by special counsel Robert Mueller.

Madsen continued:

If Trump colluded with Gorsuch and Kennedy to "pack the court" in Trump's favor, that would represent impeachable offenses by both Trump and Gorsuch. The Supreme Court's independence from interference by the other two branches of the federal government-- executive and legislative-- is sacrosanct under the Constitution.

The 81-year old Kennedy was not only pressured to retire by his Trump-appointed court colleague, Gorsuch, but also by his son, Justin Kennedy, a personal friend of Donald Trump, Jr.

Madsen, a former Navy intelligence officer, NSA analyst and Chief Scientist at the defense contractor Computer Sciences Corp., is more familiar than most political reporters with high technology and its uses in intelligence and related fields. He continued:

Justice Kennedy also saw pressure to step down from his other son, Gregory Kennedy, a Stanford Law School classmate of Peter Thiel, Donald Trump's high-tech adviser.

Thiel's Palantir Technology, which has several U.S. intelligence and law enforcement contracts-- including one with Immigration and Customs Enforcement (ICE) for identifying immigrants in the United States for deportation-- is partnered with Gregory Kennedy's former firm, which is ominously called Disruptive Technology Advisers, LLC and which is billed as a "merchant bank" in Los Angeles.

Disruptive Technology was founded by Alexander Davis, the son of oil billionaire Marvin Davis. Marvin Davis once owned 20th Century Fox and was a partner of Marc Rich, the international sanctions buster who lived in Switzerland until his death in 2013. Gregory Kennedy is now the managing partner for Advection Growth Capital in New York that is involved in the privatization of several operations of the National Aeronautics and Space Administration (NASA).

Gregory Kennedy also was on the Trump Administration Transition Team that evaluated personnel and policies for NASA after the Trump Team's 2016 election victory, yet another of the huge conflicts of interest in Washington politics that are presumptively legal in our system.

Kennedy Son Excused?

A day later, on June 29, MSNBC morning anchor and NBC correspondent Stephanie Ruhle (shown at right in a file photo) drew on her eight years work at the German-based Deutsche Bank to address reports that Justin Kennedy had been involved in the bank's massive loans to Trump companies more than a decade ago. "I worked I worked with Justin Kennedy," Ruhle wrote on Twitter. "I read the stories-- reached out to some former colleagues for their reaction Here’s some broader context/perspective-- Neither of which fit in 240 characters."

She then published on Twitter two brief videos, Part I and Part II, that quoted three senior Deutsche bank officials (albeit not by name) as saying the younger Kennedy was not involved in the Trump loans, which reportedly totaled some $600 million. A number of reader comments argued, by contrast, that the readers were generally familiar with that kind of financing and that the story deserved far more in-depth digging.

Deutsche Bank's Little-Reported History

The Deutsche Bank relationship with the Trump companies carries several rare if not unique characteristics that could be relevant to a Supreme Court confirmation at this time:

• The huge amounts, particularly because the six-time bankrupt Trump (who still keeps his tax returns secret) was not regarded as a good credit risk;
• Illegal conduct by bank employees generating some $425 million in New York State fines and penalties for illegally laundering an estimated $10 billion via Russian, United Kingdom and other European sources;
• Suspicions, not fully documented, that Deutsche Bank crimes included widespread money laundering money from Eastern European sources;
• Deutsche Bank's special history, which includes acquisition of the historic Alex. Brown investment bank whose relationships through the decades (including with the affiliated firm Brown Brothers Harriman, home to Bush Family patriarch Prescott Bush) had made it a key part of the American financial elite or, as some might say, "Deep State." Alex. Brown CEO and Board Chairman A.B. "Buzzy" Krongard, for example, went from running Alex. Brown and to becoming executive director of the Central Intelligence Agency in March 2001 before the 9/11 attacks.

To mention this history, much of it virtually unknown to Americans in the current run-up to the Supreme Court confirmation process, is not to suggest that any of it can be proven relevant to that process-- at this point. The importance for now is merely to show that high-level banking at the Deutsche Bank and Trump levels is an elite endeavor and not at all like getting a home mortgage at a Main Street bank.

Blunt Commentary

On July 2, Jesse Kornbluth published on the liberal site Salon a report entitled Donald Trump, Anthony Kennedy and the “boy” at Deutsche Bank: Not just about the money. He is a well-connected editor of the cultural concierge site HeadButler.com, a frequent columnist for the Brookings Institution and a former contributing editor for Vanity Fair and New York magazines.

His column began: "There’s a tangled web linking the Trump and Kennedy families. But financial corruption isn’t the whole story."

Kornbluth, author of a book about the disgraced junk bond financier Michael Milken, bluntly described potential collusion before Kennedy's resignation and the possible consequences for the main players. Most legal commentators report about the court and its decisions from deferential academic, political or advocacy standpoints that give every benefit of the doubt to potentially sinister actions by the justices.

Instead, Kornbluth wrote:

As a way of looking at a presidency that is enamored of every possible felony-- self-dealing, conflicts of interest, emoluments, collusion with foreign governments and domestic corporations-- crime-breeds-crime is a reasonable way to look at any Trump-related event.

But the resignation of a Supreme Court justice? Because Trump cares so much about money, that’s been suggested. And there’s smoke: the links between Trump, Kennedy and Kennedy’s son Justin. In years past we’d call that the League of White Men, taking care of their own, behind the scenes, The Way It Is. Today we tend to call it something else: collusion...

But let’s consider the bottom line: For Donald Trump, the only real issue of interest is... himself. If a 4-4 Court had to rule on a difficult question-- Does the president have the power to pardon himself?-- it might not go well for Trump.

'Dirty Money'

Kornbluth, who once held the title of editorial director at AOL among other accomplishments, was just getting started. He continued:

What started the speculation about dirty money connecting Trump, Kennedy and his son is the revelation that Kennedy and Trump have had a longstanding relationship through their children and their children’s success. We knew about Trump’s dealings with Deutsche Bank, the only bank willing to do business with him. (It’s also, perhaps not coincidentally, the bank that seems to have the longest illegal relationship with laundered Russian money.

In January 2017, it was fined $425 million by New York regulators to settle allegations that it helped Russian investors launder as much as $10 billion through its branches in Moscow, New York and London.) But we’re just finding out about the Trump relationship with Justin Kennedy, the justice’s son, who worked at Deutsche Bank for a decade, rising to the post of Managing Director and Global Head of CMBS [Commercial mortgage-backed securities] Trading and Structuring of Deutsche Bank Securities Inc.

Reportedly, Trump personally pressed Gorsuch, who once clerked for Kennedy, to ask the associate justice to retire. Whether or not Trump told Gorsuch that the move was to ensure that the president would remain immune to the court upholding any moves by Mueller, Gorsuch, as a constitutional expert with experience working at the court, would have known what the request meant.

Gorsuch would have also known that by cajoling him to pressure a Supreme Court justice to retire, Trump's actions were not only unconstitutional and illegal, but also exposed himself to charges of judicial malfeasance and potential impeachment.

However, the columnist Kornbluth accepted at face value the reporting of MSNBC's Stephanie Ruhle that Justin Kennedy had nothing to do with the huge Deutsche Bank loans to Trump years ago, despite several comments on Ruhle's site from readers who claimed expertise and who predicted that only an investigation could sort out the facts.

Yet Kornbluth stressed that Justin Kennedy went from Deutsche Bank to lead as a co-CEO a boutique investment company called LNR Property that provided a huge bail out to Trump's son-in-law Jared Kushner and his family in their ruinous investment in 666 Fifth Avenue. He cited a 2012 New York Times column:

The Kushners' purchase in 2007 of 666 Fifth Avenue for a record price of $1.8 billion is considered a classic example of reckless underwriting. The transaction was so highly leveraged that the cash flow from rents amounted to only 65 percent of the debt service.

As many real estate specialists predicted, the deal ran into trouble. Instead of rising, rents declined as the recession took hold, and new leases were scarce. In 2010, the loan was transferred to a special servicer on the assumption that a default would occur once reserve funds being used to subsidize the shortfall were bled dry.

Instead of foreclosing on the 39-story building, which stretches from 52nd Street to 53rd Street, the lenders agreed last month to reduce the principal and defer some of the interest payments on the interest-only loan and extend its maturity for two years, until February 2019.

Kornbluth cited two other writers, C'Zar Bernstein and Gabe Rusk, writing in The Medium in March 2017 about the deal:

• There was a direct business relationship between LNR and Kushner Companies at the time Justin Kennedy and Jared Kushner were both CEOs. Even the future President was aware of the deal and commented on its respective merits.
• In 2011, the year in which some of these negotiations took place, Justin Kennedy for the first time was ranked on the New York Observer’s 100 Most Powerful People in New York Real Estate at #36. Donald Trump clocked in at #12. At that time, the New York Observer was owned by Jared Kushner.

Kushner's 666 Fifth Ave:'All-Time Stinker'

"The 666 Fifth Avenue deal," Kornbluth continued, "is generally regarded as the all-time stinker in New York commercial real estate. What did LNR see as the upside? Better question: Was there any upside? As we know, 666 Fifth Avenue went badly for the Kushners, so badly that they were scrambling for a partner. Where might one be?

These transactions, their history and their implication are far beyond the scope of one column to document, even one that draws on many others. Additionally, we can in no way summarize here the history, even the recent history, of self-dealing by Supreme Court justices, especially when the recipients of jobs and benefits are their spouses, children and cronies.

The Justice Integrity Project, among others, has attempted to do so on occasion as in the case of Clarence Thomas and his wife even after a their 2011 scandal that began this way with a report in the Los Angeles Times: Clarence Thomas failed to report wife's income, watchdog says, Supreme Court Justice Clarence Thomas failed to report his wife's income from a conservative think tank on financial disclosure forms for at least five years, the watchdog group Common Cause said Friday.

But, at least up to now, the Supreme Court and other establishment institutions have protected the system from scrutiny and other accountability in the name of privacy and constitutionalism.

Next Steps

Tonight, most of relevant public attention will focus on the identity of Trump's nominee and the political battles over confirmation. Yet those angered by the overall system and particularly by the apparent conflicts of interest by the Kennedy and Trump families might want to take the confirmation to the public with a much broader critique than simply this nominee.

We shall certainly continue to do so with our reporting at the Justice Integrity Project, a non-partisan site that opposed the confirmation of Obama's Democratic nominee Elena Kagan because of her obvious conflicts, most notably in seeking to enforce as Solicitor General the Justice Department's frame-up on corruption charges of former Alabama Gov. Don Siegelman.

We conclude with a last quotation from Kornbluth, who had traced out financial conflicts of the Kennedy and Trump clans in his long July 2 column in Salon:

"Although there’s clearly more to this story than an 81-year-old justice who was ready to retire," he wrote. "I’m thinking Anthony Kennedy’s farewell gift to Trump isn’t just right-wing control of the Supreme Court for the rest of most of our lives. For once, it may not be about the money. The real prize here may be a gold-plated Get Out of Jail Free card."