Feb 28, 2019

Axios AM

☕ Good Thursday morning. It's the last day of February.

Situational awareness: "Beto O'Rourke has decided not to run for U.S. Senate next year against Texas Republican incumbent John Cornyn and likely will announce a campaign for president soon." (The Dallas Morning News)

1 big thing: The coming proctology exam
A check President Trump signed to Michael Cohen, while in office, is displayed during the hearing. (J. Scott Applewhite/AP)

Near the end of Michael Cohen's testimony yesterday, Rep. Alexandria Ocasio-Cortez asked the former fixer whether President Trump had ever run an insurance fraud, Jonathan Swan writes.

  • Cohen said yes.
  • She asked Cohen who else would have known. He named three Trump Organization executives: Allen Weisselberg, Ron Lieberman and Matthew Calamari.

Why it matters: Cohen offered no proof for this allegation — and given his record of lying, his claims can't be believed without evidence. But by making this allegation — and coughing up the names of the executives — Cohen gave House investigators and federal prosecutors yet another a trail to chase.

  • Unless you're a student of The Trump Organization — the thinly-staffed Trump family business — you may never have heard of Weisselberg, Lieberman or Calamari. 
  • But over the next year, these men and their colleagues may become household names as they endure a far-reaching, multi-armed investigation into Trump's family business and personal finances.

The bottom line: "This organization has never had a proctology exam like it's about to get," Bloomberg's Timothy O'Brien told Swan shortly after watching Cohen's testimony. "It's going to surface records that's going to become problematic for all of them to keep their stories straight." 

  • O'Brien is in a good position to know. In 2006, Trump tried — and failed — to sue O'Brien for $5 billion for writing that Trump had a much lower net worth than he claimed.
  • In the course of that litigation, because Trump went after O'Brien on financial grounds, O'Brien got his tax returns and financial records.

Here's what Trump's businesses face: 

  • Five House committees (Financial Services, Intel, Judiciary, Oversight, Ways and Means) plan to look at Trump's business deals and finances.
  • The state of Maryland and the District of Columbia are suing Trump, alleging he violated the Emoluments Clause of the Constitution by taking gifts from foreign governments through his properties.
  • The New York attorney general has a lawsuit against the Trump Foundation, alleging Trump misused his charitable foundation in a "shocking pattern of illegality." Cohen may have bolstered that case yesterday.
  • The Southern District of New York has dealt with Trump Organization executives in its investigation of Cohen.

By all accounts, Trump still has Weisselberg's loyalty. NBC reported yesterday that Weisselberg still works with The Trump Organization and has never been a cooperating witness against Trump.

  • "Any law enforcement person who's trying to build a case around insurance fraud, tax fraud, money laundering is going to have to wind up spending a lot of time [with] ... Allen Weisselberg," says O'Brien, who spent time with Weisselberg while writing his book "TrumpNation."
  • "It's the classic thing: Follow the money."

Axios reached out to senior Trump Organization executives Alan Garten and George Sorial for comment on Cohen's allegations against Weisselberg, Lieberman and Calamari. They didn't respond.

2. Stunning end: Summit collapses
Photo: Evan Vucci/AP

President Trump and North Korean leader Kim Jong-un "abruptly ended their second summit meeting [today] when negotiations collapsed after the two sides failed to agree on even the first steps on nuclear disarmament, a peace declaration or reducing sanctions on the North," writes the N.Y. Times' Edward Wong.

  • Trump said: "Basically they wanted the sanctions lifted in their entirety, but we couldn’t do that. ... Sometimes you have to walk."
  • Why it matters: "The premature end to the negotiations means the diplomacy between the United States and North Korea that has gone on for most of a year remains stalled, even as experts say North Korea continues to produce fissile material to make nuclear warheads."

P.S. ... "Testimony 8,300 miles away overshadows Hanoi meeting," the WashPost's Philip Rucker and Josh Dawsey write:

  • "Michael Cohen’s explosive testimony ... portrayed the president as an unreliable and dishonest man at the very moment he is conducting diplomacy with the world’s most erratic and untrusting dictator."
3. Companies battle online mobs

Illustration: Aïda Amer/Axios

Spooked by misinformation campaigns in the 2016 election, companies are hiring consultants to stave off coordinated Twitter and Facebook mobs, Axios' Kaveh Waddell writes:

  • Coordinated social media blitzes can quickly run down stock value.
  • Increasingly sophisticated tools are likely to mean more influence campaigns targeting companies.

Faux campaigns "create a mirage of consensus which ... becomes very persuasive to sincere, authentic citizens," says Robert Matney of Austin-based New Knowledge, one of several young companies pitching themselves to stem fraud.

  • Sneaky campaigns get blobs of social media accounts — run by humans or bots — to amplify a message, creating the façade of a widespread movement.

Take the apparent outpouring of social media outrage directed at Nike after its support of Colin Kaepernick, which briefly affected the stock:

  • A Morpheus Security report describes a network of politically motivated actors tweeting from a cue card by a shadowy group, The New Movement.
  • When Axios called the number listed on the group’s site, a man who identified himself as Tony Valenzuela of Tucson, Ariz., said he and two other volunteers started The New Movement out of frustration with advertisers pulling money from conservative media.
  • The man said he has legitimate followers, and that his goal is to hit back against left-leaning groups like Sleeping Giants, which encouraged people to publicly shame advertisers into pulling their banners from Breitbart News.
4. Fears of spiraling Indian-Pakistan crisis
Fireworks in Karachi, Pakistan, celebrate the shooting down of Indian planes. (Muhammad Rizwan/AP)

Pakistan "acknowledged [today] receiving information from India regarding a suicide bombing in the contested region of Kashmir that sparked the latest wave of tensions between the two nuclear-armed neighbors," per the AP.

  • Why it matters: "The information exchanged on the Feb. 14 attack that killed over 40 Indian paramilitary personnel signaled tensions were easing slightly between Pakistan and India."

"Efforts by the U.S. and China could be critical to lowering tensions; with public opinion inflamed in both countries and the complicating factor of an Indian pilot in Pakistani hands, neither leadership will find it easy to back down," per The Wall Street Journal (subscription):

  • Tim Roemer, U.S. ambassador to India during the Obama administration, said the crisis "is something that the Trump administration and the world ... can’t be distracted from," because a "miscalculation, an error, a mistake on one side could quickly escalate up the chain to catastrophe."
Indian government and military forces inspect a crashed Indian Air Force aircraft near Srinagar, the summer capital of Indian-administered Kashmir. (Yawar Nazir/Getty Images)
5. Cover du jour
Courtesy N.Y. Post
6. Quotes for history
Screenshot via MSNBC

Michael Cohen in his opening statement to the House Oversight Committee: "I have lied, but I am not a liar."

  • "Mr. Trump called me a 'rat' for choosing to tell the truth — much like a mobster would do when one of his men decides to cooperate with the government."
  • Cohen, in response to an early question: "[T]here was nothing that happened at The Trump Organization ... that did not go through Mr. Trump with his approval and sign off, as in the case of the payments."

Rep. Jim Jordan of Ohio, the top Republican on the committee: "Certainly it’s the first time a convicted perjurer has been brought back to be a star witness."

  • Jon Meacham on "Morning Joe," with a parallel from the 1950s: "What if Roy Cohn turned on Joe McCarthy?"
N.Y. Times
L.A. Times
7. How our phone use could literally kill us
Expand chart
Data: IIHSNSC and GHSA; Chart: Naema Ahmed/Axios

The number of pedestrians killed on U.S. roads last year was the highest in 28 years — since 1990, AP reports.

  • The Governors Highway Safety Association estimates that 6,227 pedestrians died last year. up 4% from 2017 and 35% since 2008.

Why it matters: The group says factors include "the large growth in smartphone use over the past decade, which can be a significant source of distraction for all road users."

  • Other factors: more people walking to work, and more SUVs, which cause more severe injuries.
8. The world nears "peak car"
Courtesy Bloomberg Businessweek

"The automobile — once both a badge of success and the most convenient conveyance between points A and B — is falling out of favor in cities around the world as ride-hailing and other new transportation options proliferate and concerns over gridlock and pollution spark a re-evaluation of privately owned wheels," write Keith Naughton and David Welch for Bloomberg Businessweek.

  • "Worldwide, residents are migrating to megacities — expected to be home to two-thirds of the global population by midcentury — where an automobile can be an expensive inconvenience."
  • "Increasingly, major urban centers such as London, Madrid, and Mexico City are restricting cars’ access."

Why it matters: "Rather than signaling the end of the road for the automobile, peak car is a reflection that re-urbanization and the widespread adoption of mobile apps that can summon a vehicle on demand will lessen the need for many of the 1.3 billion vehicles now on the road."

9. Scoop: A new conservative media company

Jonah Goldberg is leaving National Review in the coming months to start a new conservative media company with Steve Hayes, who was editor-in-chief of The Weekly Standard when its owner shut it down in December.

  • Goldberg and Hayes tell me they plan a reporting-driven, Trump-skeptical company that will begin with newsletters as soon as this summer, then add a website in September, and perhaps ultimately a print magazine.
  • Hayes, the likely CEO, and Goldberg, likely the editor-in-chief, are the founders.
  • Hayes tells me about the startup, which doesn’t have a name now: "We believe there’s a great appetite on the center-right for an independent conservative media company that resists partisan boosterism and combines a focus on old-school reporting with interesting and provocative commentary and analysis."

Hayes and Goldberg are seeking investors.

  • Goldberg joined National Review in 1998 and was the founding editor of National Review Online. He'll continue as a fellow for the National Review Institute.
10. 1 fun thing
Courtesy TIME

Julia Louis-Dreyfus "has been portraying funny, self-centered women who are compelling despite often being ill-­behaved. ­Selina [Meyer], her capstone creation, pushes the envelope furthest: the accidental President’s megalomania, and her flamboyant vulgarity, have helped 'Veep' break awards records," writes Molly Ball for the new cover of TIME.

  • Dreyfus discusses politicians: "They’re just people, that’s all. Which is in one way comforting, and in another quite terrifying, given all the responsibility that they carry."
  • And Trump: "He’d be funny if he didn’t have the power he has. He’s sort of a pretend, fake president. He’s a complete moron, start to finish."