Category: Donald Trump

Facebook, Jared Kushner and Russia

forbes-cover-12202016-final_1000x1311Call me skeptical.

I don’t believe that Facebook won the election for Donald Trump. That’s the claim put forth in this hagiographic profile of Jared Kushner in Forbes and in many other media outlets.

The traditional campaign is dead, another victim of the unfiltered democracy of the Web–and Kushner, more than anyone not named Donald Trump, killed it.

We see these stories every time a new president is elected. A while back it was Obama’s “data crunchers.” This time, the key to Trump’s victory, Kushner would like us to believe, were computer algorithms that targeted potential Trump supporters with social media to stunning effect.

Kushner takes credit for hiring Cambridge Analytica, a company owned by Robert Mercer who also happens to be a Trump supporter, Breitbart investor, and a reclusive hedge fund billionaire.

The secret weapon was Cambridge Analytica’s computer algorithms that figure out who you are based and what motivates you based on all the times you click Like on Facebook, as Cambridge Analytica’s Jack Hansom explains in this video:

These algorithms turned up some surprising findings. Liking the New Orleans Saints mean you’re less likely to be “conscientious,” i.e. do the right thing. And liking the Energizer Bunny means you’re more likely to be neurotic.

So what? Well, one or two of these things don’t tell you much, but the average person has hundreds of Facebook Likes which allows Hansom and his colleagues to build a surprisingly accurate picture of your personality. You can test this on yourself here.

Facebook allows you to drill down to the kind of person in the kind of place you want. (You can even reach “Jew haters” in Idaho if you wish.) Here’s Cambridge Analytica’s CEO Alexander Nix showing how his company’s model could be used to drill down to find every “persuadable” gun rights advocate in Iowa:

It’s very impressive (and very creepy), and it makes for a good story, one that Silicon Valley loves in an everybody-is-stupid-except-for-me way.

But the problem with the claim that Kushner and his machine learning wizardry won the election for Trump is that everybody was doing it. Hillary Clinton had a team of mathematicians and analysts crunching data. Ted Cruz had hired Cambridge Analytica as well, but then he ran into the Trump train.

I may be wrong, but I’d wager the $1.8 billion worth of free airtime that TV networks gave Trump every time he opened his trap probably had a lot more to do with him winning the election than Cambridge Analytica.

Trump knows how to get on TV: He is a promotional genius. What will he say next? He’s a modern day PT Barnum and Jeff Zucker‘s CNN couldn’t get enough.

Setting that aside, the Facebook/Jared Kushner story is still pretty important. And what’s important about it is that Special Counsel Robert Mueller thinks it’s pretty important. Facebook may not have won Trump the election, but it may seriously damage his presidency.

CNN reported Sunday that Mueller, who’s investigating Trump’s links to Russia, had served Facebook with a search warrant.  Mueller was interested in the $100,000 worth of ads purchased by bogus accounts that Facebook on Sept. 6 acknowledged had  “likely operated out of Russia.”

Mueller’s search warrant for Facebook is a big deal, a former federal prosecutor explains:

Mueller would have had to show the judge that there was reason to believe that one or more foreign individuals committed a crime and the evidence of the crime could be found on Facebook’s servers.

The crime is that foreign nationals are prohibited from contributing money “or other thing of value” (like $100,000 worth of Facebook ads) in connection with an election. It’s also against the law to solicit, accept, or receive such a contribution.  (Here is the statute.) And if someone on the Trump campaign knew about the Russian Facebook ads and did nothing to stop it, that is also a crime — aiding and abetting.

Did someone on the Trump campaign know about the Russian Facebook ads. We don’t know yet, but the answer lies in targeting. To put it in Watergate terms: Who targeted whom and when?

Were the Russian Facebook ads and the Trump campaign targeting the same people? And if so, how did a bunch of Russian trolls in St. Petersburg or Vladivostok or where ever know to target, say, black women in Milwaukee or rural voters in Michigan’s Upper Peninsula, for example?

I tried to ask Alex Stamos, Facebook’s chief security officer, but didn’t get a reply.

This question intrigues Sen. Mark Warner, the leading Democrat on the Senate intelligence committee, as he said on the Pod Save America podcast:

Warner: When you see some of the explanation and some of the fact that it appears that, for example, women and African Americans were targeted in places like Wisconsin and Michigan, where the Democrats were too brain dead to realize those states were even in play … It was interesting that those states seem to be targeted where the bots — where they could could create a lot of these fake Twitter and Facebook accounts, could in fact overwhelm the targeted search engines that would end up saying on your news feed, you suddenly got stuff that “Hillary Clinton’s sick” or “Hillary Clinton’s stealing money from the State Department.”

I get the fact that the Russian intel services could figure out how to manipulate and use the bots. Whether they could know how to target states and levels of voters that the Democrats weren’t even aware really raises some questions. I think that’s a worthwhile area of inquiry.

How did they know to go to that level of detail in those kinds of jurisdictions?

Vietor : I wonder if they just asked Jared [Kushner] like Trump does with all of his questions. We’ll find out.

Warner : We’ll find out. More to come on that.

Sen. Warner thinks it’s a worthwhile line of inquiry, and it’s a good bet Mueller does too. The information Facebook handed over to Mueller included the targeting criteria the bogus Russian accounts used, The Wall Street Journal reported.

An unnamed Trump campaign staffer told CNN that the key to the whole inquiry may be found on Facebook’s servers.

Only Facebook can answer three critical questions: were the same databases used by the Trump campaign and Russian operatives to coordinate targeting of voters; was money used to promote pro-Trump posts, and, if so, how much was spent and by whom; and will Facebook reveal if bots were successfully used to push fake news posts?

Hopefully, Robert Mueller knows the answers.

Exclusive: Felix Sater’s 2010 White House Visit

Felix Sater

Felix Sater, a former senior business advisor to Donald Trump, was granted access to visit the Obama White House in 2010 as part of a delegation of Hasidic Jews.

Sater’s name appears on the list of 100 White House visitors associated with American Friends of Lubavitch, which represents the international Chabad-Lubavitch movement in Washington.

The Obama administration released logs of White House visitors, a practice that the Trump administration has discontinued.

Sater has come under scrutiny for his relationship to Donald Trump. Sater worked for Bayrock, a development firm with offices in Trump Tower that partnered to build Trump SoHo. For six months in 2010, Sater went to work for Trump directly, carrying a Trump Organization business card that described him as a “senior advisor to Donald Trump.”

According to the White House visitor log, Sater’s 100-member delegation visited the Old Executive Office Building in the White House complex on June 17th. The group gathered in the South Court Auditorium where Sater and the rest of the delegation were addressed by Vice President Joe Biden.

Sater’s attorney, Robert S. Wolf, did not return a phone call seeking comment.


The decision by the Secret Service to grant Sater access to the White House grounds is noteworthy. Every visitor to the White House Complex undergoes a comprehensive security check, and Sater’s criminal past would surely have raised red flags.

Other ex-convicts have reported that they were denied access to the Obama White House. Even those who received a formal invitation were handed pink badges that read “Needs Escort” and were not allowed to move freely around the White House grounds. (See Glenn E. Martin’s open letter to President Obama.)

However, Sater was  a prized government informant. He helped the FBI thwart attempts by the Mafia to muscle in on Wall Street and also aided in the hunt for terrorists overseas. As a result prosecutors took the highly unusual step of requesting that Sater’s entire federal racketeering case be sealed.

Former U.S. Attorney General Loretta Lynch, whose oversaw Sater’s case in her previous role as the U.S. Attorney for the Eastern District of New York, told Congress that he provided valuable and sensitive information.  Sater’s cooperation led to the conviction of 20 individuals, including members of the Mafia. In addition, Lynch said, Sater provided information “crucial to the national security.”

The White House visitor log shows Sater’s appointment was made June 15th, two days before his visit.

The White House visit was the highlight of the annual “Living Legacy” conference organized by American Friends of Lubavitch. The conference is held to mark the anniversary of the passing of Rabbi Menachem M. Schneerson, the former leader of the Chabad-Lubavitch movement and one of the most influential Jewish leaders of the 20th century.

Sater belongs to the Port Washington Chabad house and told Politico that he is on the board of Chabad organizations in the U.S. and abroad, though none in Russia.  Rabbi Shalom Palatiel, the director of the Port Washington Chabad house, also visited the White House along with Sater. Palatiel did not immediately respond to an email message left seeking comment.

More than 190 names were submitted to the White House, but the logs show that only 100 entered the grounds.

According to a report in the Jewish Telegraphic Agency, Biden spent 40 minutes with Sater and the rest of the Lubavitch delegation.

The vice president reviewed Chabad teachings he had acquired over the years, including the necessity of combining “wisdom, knowledge and understanding,” and related them to the administration’s handling of the Middle East.

Biden suggested that the threat posed by Iran necessitated intensive peacemaking and it was important for the Jewish community to understand that context.

“As you’ve always taught me, the rebbe said, what we do for one day isn’t enough for the next day,” Biden said.

Felix Sater’s Wall Street Days


Felix Sater

Once upon a time, Felix Sater had a promising career on Wall Street.

Beginning in 1983 as an assistant cold-caller, Sater worked his way up the Wall Street food chain, ending up at Lehman Brothers in 1993, which is where his finance career, at least the reputable part of it, came to an end.

That was the year he went to prison for stabbing a commodities trader in the face with the broken stem of a margarita glass.  Then he got out and joined a Mafia-linked boiler room operation. He got caught, became a government informant, and partnered with Donald Trump to build Trump SoHo and become a figure of endless speculation and fascination.

Long before all of that, here’s what Sater was up to, taken from his employment record with FINRA:

Screen Shot 2017-09-01 at 4.22.07 PM

After doing a bit of reading, it seems that Felix Sater’s Wall Street career amounted to making cold calls. Lehman Brothers and Gruntal, the two firms on the top of the list, were famous for their cold-calling.

A junior broker like Sater probably would have spent most of his time on the phone trying to rustle up new clients.  Lehman Brothers had a cold-calling script that was legendary on Wall Street. I couldn’t find a copy but here is a sample of another firm’s scripts that was obtained by Buzzfeed.

Prospective Client:  ”I have to talk to my wife.”

Wall Street Guy: “I’m calling you because you are a successful individual. Your success is the result of years of making the right calls in business. Am I right? Lets be real. You don‘t confer with your wife on your day-to-day business decisions and I’m sure your wife respects your investment decisions.”

It was mind-numbing, soul-crushing work — a white-collar sweatshop. But it was effective. According to Fortune, in the late 1980s, half of new accounts for Lehman’s brokers came from cold-calling. (The numbers dropped after Lehman got censured and fined.) But here’s how it used to work:

At these sites, the initial ”dials” are often made by young kids, many right out of college, who get $5 an hour and lunch for spending their day on the blower intoning, say, ”I’m calling for Martin Shafiroff, a managing director of Lehman Brothers.” Usually the dialers get rebuffed in seconds by the prospect or his secretary. But once in a while they get a live mark and then the dialer hands off the call by yelling to a ”qualifier” to pick it up (”I’ve got Henry Longfellow on line 4”). The qualifier, who is an assistant somewhat higher on the pay scale, collects what information he can about Henry and, if Henry acquiesces, assures him that Martin Shafiroff, say, will be calling him shortly with an idea.

Sater dropped out of college to work at Bear Stearns at age 18 as an assistant cold caller. Several months later, Sater got his broker licenses and then moved jobs to Ladenburg Thalmann, one of Wall Street’s oldest firms. (Bear Stearns and Ladenburg don’t show up on Felix’s official FINRA record, but he testified about them in a 2010 deposition.)

It’s worth noting that Howard Lorber, a friend of Trump’s who brought him to Russia in 1996, became chairman of Ladenberg in 2001 and holds the post of vice chairman today. Lorber is a member of Trump’s Council of Economic Advisers.

Gennady Klotsman, one of Sater’s longtime friends, soon joined him on Wall Street. They both worked at Rooney Pace, although Sater left after a few weeks to join Lehman Brothers, then known as Shearson Lehman following its acquisition by American Express. Klotsman and Sater worked together at Shearson Lehman in 1987.

The following year, Sater made his jump to Gruntal, one of the oldest stock brokerages in America. It traced its roots back to 1880. Gruntal not only survived the Crash of 1929, but when Sater joined the firm’s offices on 14 Wall Street at 605 Third Avenue in Manhattan, Gruntal was approaching its zenith as the country’s 14th-largest brokerage firm, fielding an army of brokers with phones glued to their ears.

But Gruntal was no staid brokerage. Far from it. It was a place for people who “weren’t presentable enough” to work for the big houses, Don Jans, one of the firm’s top earners, told Fortune.

“One of our biggest producers was bipolar,” Jans said. “My old sales assistant is a punk rocker with tattoos and piercings. Who would hire this guy? But he was the best salesman I ever had. Gruntal was the Island of the Misfit Toys. But they didn’t care what was going on in our sick, dysfunctional office as long as we were making money. We had no manager, and it’s illegal not to supervise brokers. I remember doing cartwheels down the hall, drinking beer at my desk, smoking pot, having sex in the stairwell. Whatever!”

Gruntal’s cold callers were, shall we say, a bit loose with the truth. Fortune reported that at one Gruntal office in Manhattan cold callers said they were with the firm’s ”executive services group.”

Sal Lauria, another of Sater’s good friends, joined at Gruntal in 1991 and lasted less than a year. After Sater lost his job at Lehman in the bar stabbing, he and Lauria took their cold-calling scripts and went to work at a boiler room operation involving four Mafia families. The two were prosecuted for their roles in a $40 million pump-and-dump stock scheme .

Gruntal, however, was more than a cold-calling shop. It a powerhouse of analytical talent.

The best example was Stephen A. Cohen, one of the greatest stock traders of all time whose tenure at Gruntal overlapped with Sater.


Steve Cohen

Cohen landed a job trading options at Gruntal in 1978 made $8,000 on his first day and eventually  managed a $75 million portfolio and six traders. Cohen left Gruntal in 1992 to start his own hedge fund, SAC Capital Advisors, which made him into one of the richest men in America.


Steve Feinberg

Stephen A. Feinberg was another Gruntal veteran who worked at the firm at the same time as Sater.

Feinberg joined the firm in 1985 after a stint at Mike Miliken’s Drexel, Burnham & Lambert. He managed separate pools of capital and other accounts until he left in 1992 to start Cerebus Capital Management, which today is one of the country’s biggest private investment firms.

Feinberg is also a member of Trump’s Council of Economic Advisers. In February, Feinberg was reportedly being considered for a post in the Trump Administration, overseeing a shakeup of the United States intelligence community.

Another Gruntal alumnus with ties to the Trump administration is billionaire investor Carl Icahn, who worked at the firm from 1964 to 1968.  A few weeks ago, Icahn announced that he was leaving his position as Trump’s special adviser on regulatory reform. Just a few hours after the announcement, The New Yorker published an article showing how Icahn used his influence to attack regulations that hurt his business interests at oil refineries. 

Update:  Wall Street firms like Gruntal had a practice then of advancing money to their brokers.  Sater had apparently failed to pay back his loan for Gruntal obtained a judgement against Sater for more than $137,000 in 1995.  By that time, Sater was in prison for his margarita glass bar assault.

Since I’m writing about this topic, I feel obliged to point out that if you search around for Sater and Gruntal on the Internet, you’ll run into theories of a giant Wall Street/Mafia conspiracy. The curious can check out the website was the subject of a libel trial in Vancouver, Canada. In 2016, a judge found the website was not only libelous but had engaged in a “calculated and ruthless campaign” against an investor, Altaf Nazerali (supposedly a friend of Sater’s, according to Nazerali was awarded him damages of more than $750,000. (The ruling can be found here.)

This would normally be the death knell of any conspiracy website. Not It is backed by the deep pockets of Patrick Byrne, the CEO of Byrne saw the whole libel case as a lark. The ruling quotes Byrne as saying “It looks like Ali Nazerali wants to go a few rounds. Happy to oblige.”

Byrne has been a critic of stock market practices such as naked short selling. He may have a valid point, but, unfortunately, he has given full voice to garbage reporting on his website. That garbage reporting has found a receptive ear because legions of Trump haters want to believe the worst about him and the kind of people with whom he associated.

The truth was far more mundane.

Felix Sater and Michael Cohen: Childhood Friends.

Somehow I missed this. Buried deep in this excellent New York magazine piece on Felix Sater is this tidbit:

Cohen, one of Trump’s personal attorneys, had known Sater since they were teenagers.

I’m curious how these two met. Sater was born in Russia and grew up in the Russian enclave of Brighton Beach as a Mobster’s son. Cohen grew up on Long Island as a doctor’s son. About the only thing the two seem to have in common is that they are both Jewish and roughly the same age.

Update: Sater told Talking Points Memo he knew Cohen through Cohen’s wife, Laura Shusterman:

Sater said he most clearly remembers the beginning of his relationship with Cohen from the time the former Trump Organization attorney began dating his now-wife, whom Sater describes as a girl from his neighborhood of Jewish Soviet expatriates. Cohen told TPM the pair had known each other before then, in their teenage years, and that he hadn’t yet begun dating his wife, reportedly a Ukrainian émigré, when he was in his teens.

Their friendship puts a different light of the chummy emails between the two men in 2015, after Trump announced he was running for president. In the emails, obtained by The New York Times, Sater promised to use his contacts in Russia to help Trump win.

“Our boy can become president of the USA and we can engineer it,” Sater wrote in an email. “I will get all of Putins team to buy in on this, I will manage this process.”

Cohen had been in negotiations with Sater and foreign investors to build a Trump Tower in Moscow from September 2015 through the end of January 2016. Trump announced he was running for president in June 2015.

In January 2016, when negotiations stalled, Cohen wrote to Putin’s spokesman, Dmitri S. asking for help.  But Mr. Cohen did not appear to have Peskov’s direct email.

That’s really strange. Why would he do this? As an attorney, he knows how important records are. It’s almost as if Cohen didn’t really expect a reply, but wanted to leave a trail.

And the White House has been referring questions about this whole matter to Cohen’s attorney, suggesting that this was Cohen’s deal, not the Trump Organization’s.

Trump’s Russian Deposit Boxes


The Baltschug Hotel is one of Moscow’s most venerable hotels. Overlooking the Moskva River, across from the Kremlin, the Baltschug dates back to the reign of Czar Nicholas II. After the Russian Revolution, it became a dormitory, but the collapse of  the Soviet Union saw the Baltschug restored to its former glory as a five-star hotel

And it was here on a Tuesday evening in September 2002, that Donald Trump arrived to sell apartments in New York to newly-wealthy Russians.

Trump wanted to make it easy for Russians to buy one of his New York apartments without even leaving the country. His real estate agent, Sotheby’s International Realty, had partnered with Kirsanova Realty to open an office in Moscow to sell his condos and apartments to Russians who were interested in buying abroad.

Trump is such a spectacle that we often forget to ask the interesting questions. What was interesting about the Baltschug event was not Trump himself. The interesting question to ask was who was buying. And the answer to that question is, well, we don’t know.

Guests at this event did not want to give their names, a reporter from the respected Russian business newspaper Vedemosti found:

However, potential customers present at yesterday’s presentation of New York real estate not only refused to reveal themselves, but also did not admit that they were interested in this real estate, insisting that they simply went in for “pies to eat”.

The Moscow Times, an English-language newspaper, also sent a reporter and noted the same thing:

When asked about the prospect of acquiring property through Sotheby’s and Kirsanova Realty, guests at Tuesday’s reception shied away from saying directly whether they were interested in the super expensive apartments. One guest said most were there to see “how the other side lives.”

Why would a Russian be embarrassed to admit they were interested in buying Trump property?  That’s the interesting question.

The reason why the buyers at the event were embarrassed to give their names is because they didn’t want anybody doing exactly what these reporters from Vedemosti and The Moscow Times were doing: Asking questions.

Phllip Bogdanov of Kirsanova Realty said he didn’t consider his potential clients oligarchs, but rather owners of sustainable businesses. But that’s nonsense.

One of the few who wasn’t  afraid to introduce himself to Vedemosti’s reporter was Pavel Syutkin, then the head of the investment department of the Presidential Administration of the Russian Federation.  Today, Pavel Skyutkin is a food historian and author of an English-language cookbook about Russian cuisine.

The Russians who could afford a million-dollar apartment in New York were a special class of people who owed their wealth to their political connections, not their business skills. People get outrageously rich in Russia because the Kremlin allows it.  The Kremlin lets them get rich; the Kremlin could take everything away.  If you’re wealthy in Russia, your money is never secure. Your money was only safe if and when it moved out of the country, beyond the reach of the Kremlin.

Trump had spent a lot of time trying to put his name on something in Moscow in the 1990s. We’ve looked at his efforts to build a tower in Moscow and develop a pair of run-down Moscow hotels. At some point, Trump realized that building a tower in Moscow was the wrong way to go about it.

The Russians didn’t want to keep their money in Russia. The wealthiest of Russians weren’t interested in a Trump Tower in Moscow, but a tower in New York, now, that was something that interested them.  Why not build luxury towers that served as deposit boxes for wealthy Russians and other foreigners who wanted to stash their money away? What if Trump could build right here in New York for Russian money? 

This was Trump’s sales pitch. Come to New York. You can enjoy your money, no questions asked.

“Now, Russian connoisseurs of high-class housing will have the opportunity to become neighbors of well-known politicians, businessmen and Hollywood stars,” said SIR vice-president Mika Sakamoto.

Trump’s towers in New York were really safe deposit boxes for foreign money. Trump World Tower (pictured above), the 72-story skyscraper that opened in 2001, was a giant deposit box of Russian money.

Bloomberg found that Sam Kislin, a Ukrainian immigrant, issued mortgages to buyers of multimillion-dollar apartments in World Tower. An individual issuing mortgages for luxury homes is highly unusual.

One of the people Kislin provided mortgages to was Vasily Salygin, a future official of the Ukrainian Party of Regions. The Party of Regions is the Putin-linked party whose best known member is Viktor Yanykovych, the man who former Trump campaign manager Paul Manafort helped win the presidency of the Ukraine before he fled to Russia.

Kislin was business partners with Tamir Sapir, who would later partner with Trump to build the scandal-plagued Trump SoHo condo hotel.

Bloomberg also turned up another person who bought in Trump World Tower. It was Eduard Nektalov, an Uzbekistan-born diamond dealer, who purchased a $1.6 million apartment in July 2003. He was being investigated by federal agents for a money-laundering scheme. Nektalov sold his unit a month after he bought it for a $500,000 profit. He was gunned down on Manhattan’s Sixth Avenue in 2004.

Kellyanne Conway and Michael Cohen, Trump’s consigliere, bought units in Trump World Tower. Cohen also persuaded his Ukrainian in-laws and a business partner to buy in the tower as well.  Cohen also helped Trump take back control of the tower’s board from a group of apartment owners upset over the way the building was being run.

What began in 2002 was the steady influx of Russian money into the Trump Organization. The same Russian money that kept him afloat during the financial crisis and the same money that is now the subject of an investigation by Special Counsel Robert Mueller.