July 28, 2017

No Red Line: Mueller Will Follow the Money

Barbara McQuade Professor from Practice, University of Michigan Law School, and Former U.S. Attorney for the Eastern District of Michigan


President Trump recently said that Special Counsel Robert S. Mueller, III, would be crossing a “red line” if he were to investigate Trump’s finances. Does Mueller have legal authority to probe Trump’s finances? Absolutely. In fact, Mueller would be failing his assignment if he did not.

In May, Deputy Attorney General Rod. J. Rosenstein appointed Mueller as Special Counsel. Rosenstein did so as the Acting Attorney General, following the recusal of Jeff Sessions in any matters relating to the 2016 presidential campaign.  President Trump has expressed his anger with Sessions for his recusal decision.

As outlined in the appointment order, Mueller’s mission is to probe three things: (1) “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump,” (2) “any matters that arose or may arise directly from the investigation,” and (3) “any other matters within the scope of 28 CFR 600.4(a).”

Under this broad language, Mueller and his team may absolutely investigate Trump’s finances without crossing any “red line.” Since the days of Watergate, every prosecutor in a public corruption case has repeated the mantra to “follow the money.” This case should be no exception. Following the money helps investigators discern connections between people and organizations, identify witnesses and subjects, determine motives for conduct, understand the timing of events, and learn many other facts about a case.

It is standard practice in white collar cases to use grand jury subpoenas to obtain bank records, credit card records and corporate documents that are held by third parties, such as banks, financial services companies, corporations and government offices. In an investigation of coordination between the Russian government and the Trump campaign, obtaining these kinds of financial transactions would be essential to understanding any connections.

And this investigation will likely also permit Mueller and his team to see at long last what has been concealed from the American public – Trump’s tax returns. Tax records are routinely obtained in white collar investigations. Tax returns can show sources and amounts of income. Inconsistencies between tax returns and other financial records can also be a basis for a separate criminal charge of tax evasion.  Because of the sensitive nature of tax records, however, they cannot be obtained with a simple grand jury subpoena. Instead, a court order is needed to obtain tax records. This order, known as an “i” order because of the subsection of the tax code that authorizes it, requires a showing of reasonable cause to believe that a crime has been committed, that the return may relate to the commission of the crime, that the return information is for use in a federal criminal investigation, and that the information cannot be reasonably obtained from another source.

While not every financial transaction Trump has ever engaged in is fair game, Mueller and his team may seek any documents or question any witnesses about anything that is reasonably designed to lead to the discovery of admissible evidence showing links between the Russian government and Trump’s campaign.  And as the investigation progresses, and Mueller learns more about the facts, he may also seek evidence relating to any matter that arose “or may arise directly” from the investigation. That means that if in the course of investigating connections to Russia, Mueller discovers another crime, he may pursue that as well.

And then there is that third category in Mueller’s mandate. The regulation cited there provides that he may investigate and prosecute federal crimes committed to interfere with the investigation, such as perjury or obstruction of justice.  This section could certainly be used to investigate Trump and members of his family, such as Donald Trump, Jr., and Jared Kushner, who are likely already subjects of the investigation based on their meeting with Russians to obtain derogatory information on Hillary Clinton during the campaign. Even if their attendance at the meeting alone does not constitute an offense, any false statements written in security clearance forms or made to federal agents or Congress regarding this meeting could amount to a crime of false statements or obstruction of justice.

And the really interesting part of the regulation is that it further provides for “additional jurisdiction” if the special counsel concludes that a broader scope is necessary “to fully investigate and resolve the matters assigned, or to investigate new matters that come to light” in the course of his investigation. This “additional jurisdiction” may only be granted by the Attorney General after consultation.  Or, in this case, Rosenstein, because of the recusal of Sessions. The broad language of the order would permit Mueller to keep going after any crime he discovers and anyone who committed it.

Maybe this broad mandate is why Trump is so concerned that he lacks a loyal leader at the Department of Justice.

Criminal Justice, Russia Probe, White-Collar Crime