Mystery Proceeding In Mueller Investigation At Least Partly Solved
The mystery surrounding a secret proceeding in Robert Mueller's Russia investigation has at least partly been solved.
The mystery surrounding the secret proceeding in connection with Special Counsel Robert Mueller’s Russia investigation has at least been partly solved, but many questions remain:
A secret court case apparently about a grand jury subpoena from special counsel Robert Mueller’s investigation gained a little more clarity Tuesday night after a court ruling revealed the subpoena challenger is an unnamed company owned by a foreign country.
The Justice Department had asked the company to turn over “information” about its commercial activity in a criminal investigation and a federal appeals court is forcing the unnamed company to comply with the subpoena.
The ruling came four days after lawyers argued in secret for more than an hour before a panel of three appellate judges on the US Court of Appeals for the District of Columbia Circuit. The lawyers involved were never seen going into or out of that hearing on Friday, because the court security locked down an entire floor of the federal courthouse in DC for it.
But CNN had spotted attorneys from Mueller’s team returning to their office shortly after the hearing ended, and previous CNN reporting on court activity found that Mueller’s team had fought with an unknown opponent in September and October over the grand jury matter, which led to the appeal. Politico also previously reported that it had learned the sealed grand jury case had a filing in it from Mueller’s team.
The judgment from the appeals court on Tuesday carries possible fines for each day the company doesn’t comply with the subpoena.
The appeals court offered few clues in its judgment about the company and its country of origin, or what Mueller’s team sought.
In one short passage in the three-page decision, the judges describe how they had learned confidentially from prosecutors that they had “reasonable probability” the records requested involved actions that took place outside of the US but directly affected the US. Even the company was not informed of what prosecutors had on this, because revealing it to the company would have violated the secrecy of the grand jury investigation, the judges said.
The company had tried to argue to the US panel of judges that its country’s laws prohibited it from turning over the information. But the judges said that wasn’t true.
“We are unconvinced that Country A’s law truly prohibits the Corporation from complying with the subpoena,” the judges wrote.
The company was not immune from the subpoena under the Foreign Sovereign Immunities Act, the judges said.
More from The New York Times:
WASHINGTON — A mystery witness fighting a secret fight over a sealed subpoena with a prosecutor who may be Robert S. Mueller III, the special counsel investigating the Trump-Russia affair, turns out to be a corporation owned by a foreign government, according to a federal appeals court ruling on Tuesday.
The three-page ruling by a panel of the United States Court of Appeals for the District of Columbia Circuit described the unnamed witness in those terms, but it did not identify it any further, nor did it confirm whether the prosecutor is the special counsel, as has been widely speculated.
During closed-door oral arguments before the panel last week, court security officers took the unusual step not only of closing the courtroom, but also of clearing the entire floor of the courthouse so that reporters could not see who the lawyers were as they went in and exited.
But the new details about the witness’s identity offered some tantalizing clues to a mystery that has riveted Washington journalists and legal insiders who are closely watching Mr. Mueller’s investigation, eliminating some theories about whom it may be while opening the door to new a new round of guessing.
The judgment by the panel, released on Tuesday evening, offered a glimpse into the nature of the witness and the underlying legal dispute: A prosecutor has obtained a grand-jury subpoena for information from a corporation that is owned by a foreign government about some action abroad connected with commercial activity that caused a direct effect in the United States.
After receiving the subpoena, the corporation asked Chief Judge Beryl Howell of United States District Court for the District of Columbia, who oversees grand juries in the district, to quash the subpoena for several reasons, including that the country that owns it — identified only as Country A in the ruling — has sovereign immunity and that disclosing the information would be illegal under that country’s domestic laws.
But Judge Howell ruled against the corporation — and began imposing a $5,000-a-week fine for contempt over its failure to comply with the subpoena. And after hearing arguments on Friday, the three-judge appeals court panel — Judges David S. Tatel, Thomas B. Griffith, and Stephen F. Williams — unanimously affirmed her ruling.
Among other things, the panel said in an unsigned opinion that sovereign immunity was about barring civil lawsuits, not criminal investigations. The panel also said its reading of the plain text of the foreign statute in question left it “unconvinced that Country A’s law truly prohibits the Corporation from complying with the subpoena.”
Observers have been tracking the unusual court fight over a sealed subpoena since September, but hard facts have been scarce.’
As I noted when I first wrote about this mystery proceeding back in October and then again earlier this week, when the reports about this mystery proceeding first started becoming news there was a ton of speculation about the identity of the person or entity that might be subject of the subpoena. One writer, writing at Politico, made a somewhat convincing but still hypothetical argument that the subject of the subpoena was the President himself or someone very close to the office of the President. This made sense at the time because it came around the same time that the President’s attorneys and the office of Special Counsel Robert Mueller were negotiating back and forth over whether or not President Trump would sit for an interview with Mueller and his investigators. During the course of those negotiations, there were those who speculated that Mueller would seek to subpoena the President to appear before the Grand Jury if he refused to sit for less formal questioning. That’s obviously not what the mystery subpoena is about, but that doesn’t make the proceeding any less interesting.
Lawfare has some insight on what to make of all this:
So the court’s ruling in In re Grand Jury Subpoena is effectively the first peek at a very secret case. The court outlines the contours of the case in the judgment’s first paragraph: the appellant is a corporate entity (“the Corporation”) that is owned by a foreign country (“Country A”) and is seeking to quash a subpoena it received from a grand jury in an undisclosed criminal matter. The Corporation made two arguments in support of this effort before the district court: first, that it is entitled to sovereign immunity; and second, that complying would place it in violation of Country A’s own laws. The district court rejected both arguments and—when the Corporation still refused to comply—held the Corporation in contempt, imposing a fixed monetary penalty on it so long as it refuses to comply. The Corporation then appealed to the D.C. Circuit, where it also argued that the district court lacked subject-matter jurisdiction over the issue. In today’s judgment, the D.C. Circuit rejects all three arguments and affirms the district court’s decision.
What more does the judgment say about the identity of Country A? Only a bit. The court asserts that “there is no question” that the Corporation falls within the definition of a “foreign state” under the Foreign Sovereign Immunities Act (FSIA) for the purposes of sovereign immunity. It specifically cites 28 U.S.C. § 1603(b)(2), which addresses agencies and instrumentalities of foreign states and includes within that definition corporations that are majority-owned by foreign sovereigns. This almost certainly means that the Corporation is majority-owned by Country A, an inference with which the Corporation’s own arguments are consistent: as the court describes them, the Corporation’s argument would “completely insulate corporations majority owned by foreign governments from all criminal liability.” And under relevant case law, this ownership is almost certain to be direct, not through subsidiaries or other arrangements.
Finally, the judgment may give some tiny hints about the Corporation’s activities. In concluding that the Corporation falls within the FSIA’s commercial activity exception to sovereign immunity, the court—quoting the FSIA—notes that the government has shown that there is a reasonable probability that “the action underlying the motion relates to “an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere” with “a direct effect in the United States.” This appears to mean that the testimony or documents that the grand jury is interested in relate to some overseas commercial activity of the Corporation, not acts or activities within the United States.
Beyond this, as the author notes, we really don’t know much of anything and the decision does not offer many clues about the identity of either the company or what foreign country may be involved in this matter. It could be a nation already involved in the imbroglio of the Russia investigation, or it could be something entirely out of left field that has come to the attention of the Special Counsel and his investigators. In the hours immediately after the release of the opinion, speculation on the matter was all over the map and included everything from an entity related to a German or Swiss Bank or perhaps something arising out of the Middle East. Whatever it might be, it seems to be yet another indication that Robert Mueller’s investigation continues to move forward regardless of what the President may have to say about it on Twitter.
Here’s the opinion:
In Re Grand Jury Subpoena by on Scribd