The White House press corps is fed up with Karine Jean-Pierre’s stonewalling about the classified documents scandal that has enveloped the Biden administration, with some reporters calling the press secretary’s regular briefings a “painful waste of time.”
“She is arguably the least effective White House press secretary of the television era,” one correspondent told CNN’s “Reliable Sources” newsletter Wednesday, though the person added the pejorative did not apply to press secretaries for former President Donald Trump.
Since Jan. 9, when the White House confirmed that sensitive materials had been found at the Penn Biden Center think tank in Washington, and the president’s Wilmington, Del. home, Jean-Pierre has stuck to her talking points, and refused to let officials from the Justice Department or White House Counsel’s office face the press amid the ongoing special counsel investigation.
That hasn’t sat well with journalists, who have grilled Jean-Pierre day after day about the White House’s lack of transparency.
White House correspondents say they are at wit’s end with press secretary Karine Jean-Pierre’s evasions about the Biden classified documents. AFP via Getty ImagesWhite House correspondents are frustrated at the lack of details about the Biden classified documents at daily briefings by press secretary Karine Jean-Pierre. Getty Images
“You just get the feeling that you’re wasting your time and whatever is in front of her in the binder is all she is going to say, no matter how many times you ask the question,” another reporter told CNN. “It’s just a painful waste of time.”
Jean-Pierre, the first black person and first openly gay person to serve as the chief White House press rep, has been widely mocked online for appearing to refer exclusively to a thick binder for talking points in response to reporter questions.
But her ongoing evasions over the documents have drawn the open ire of reporters for outlets that span the political spectrum.
Classified documents were discovered at the Penn Biden Center in Washington, D.C., and at President Biden’s Delaware home where he parks his 1967 Corvette.Joe BidenWhite House press secretary Karine Jean-Pierre at the daily briefing on Wednesday.AFP via Getty Images
“I think you can tell the temperature has gone up a lot in the last few days,” one reporter told CNN.
At Wednesday’s briefing, Jacqui Heinrich of Fox News accused the administration of creating an “information blackout” — while Jean-Pierre tried to shut down another reporter’s line of questioning by attempting to call on someone else.
“I just commented. I just commented,” Jean-Pierre insisted to the reporter, Jon Decker of Gray Television, after she referred another of his questions to the Justice Department. “We’re moving on…. I already answered your question.”
“You really didn’t,” Decker said.
“Well, I — I did,” Jean-Pierre insisted.
“You didn’t,” Decker shot back, to which Jean-Pierre responded: “It’s your opinion. It’s your opinion. It’s your opinion. That is your opinion.”
Most galling, according to the CNN report, is that Jean-Pierre failed to notify the press corps last Friday that more classified documents had been recovered the night before at Biden’s home in Delaware.
The cover of the New York Post on Tuesday about how the White House won’t reveal visitors to President Biden’s Delaware home.
”On Friday, you stood here, though, and were asked about this documents issue, by our count, some 18 times,” ABC News’ Cecilia Vega pressed Jean-Pierre on Tuesday. “At that point, the president’s lawyers had found these five additional pages of classified documents. So, did you not know on Friday that those documents had been found when you were at the podium? Or are you being directed by someone to not be forthcoming on this issue?”
Jean-Pierre said she had been “forthcoming from this podium,” pointing out that she repeated what the White House counsel’s office said in a previously released statement.
“Right. And we had that statement, so we knew what was in it,” Vega said.
At Tuesday’s briefing, Jean-Pierre admitted that she was also unaware of the discovery of the documents at the Penn Biden Center on Nov. 2 and only learned about them when CBS News reported on the find Jan. 9.
”There is the expectation that when you say something, it’s going to be true,” one reporter told CNN. “That’s been the biggest credibility hit for her, it’s answering a question in a way that ends up not being true.”
“She is really liked, personally,” another reporter put it more bluntly, “but that shouldn’t be an excuse for her competence professionally.”
The White House defended Jean-Pierre, insisting to CNN she was restricted about what she can say because of the Justice Department probe, though NBC News reported this week the DOJ has not prevented the White House from talking about the probe’s underlying facts if it wishes.
An administration official said Jean-Pierre is acting in a manner that’s consistent with “prior White House press secretaries from both parties who have responsibly respected ongoing DOJ investigations and referred to the relevant authorities.”
The White House aide said the press secretary was ”wisely and appropriately affirming the White House’s position of total cooperation and being careful not to go further to respect the integrity of an investigation.”
”If reporters are concerned about substance and getting facts shared with them, they have had venues for that,” the official went on.
Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023.
Ed Jones | AFP | Getty Images
Sam Bankman-Fried pleaded not guilty in New York federal court Tuesday to eight charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research.
The onetime crypto billionaire was indicted on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations.
Bankman-Fried arrived outside the courthouse in a black SUV and was swarmed with cameras from the moment his car arrived. The scrum grew so thick that Bankman-Fried’s mother was unable to exit the vehicle, falling onto the wet pavement as cameras scrambled to catch a glimpse of her son.
Bankman-Fried was hauled by security through the throng and into the courthouse in a matter of moments, with photographers scrambling to get out of the way.
Earlier in the day, attorneys for Bankman-Fried filed a motion to seal the names of two individuals who had guaranteed Bankman-Fried’s good behavior with a bond. They claimed that the visibility of the case and the defendant had already posed a risk to Bankman-Fried’s parents, and that the guarantors should not be subject to the same scrutiny. Judge Lewis Kaplan approved the motion in court.
Bankman-Fried returned to the U.S. from the Bahamas on Dec. 21, and the next day was released on a $250 million recognizance bond, secured by his family home in California.
Federal prosecutors also announced the launch of a new task force to recover victim assets as part of an ongoing investigation into Bankman-Fried and the collapse of FTX.
“The Southern District of New York is working around the clock to respond to the implosion of FTX,” U.S. Attorney Damian Williams said in a statement Tuesday.
The U.S. Attorney’s Office for the SDNY had argued that Bankman-Fried used $8 billion worth of customer assets for extravagant real estate purchases and vanity projects, including stadium naming rights and millions in political donations.
Federal prosecutors built the indictment against Bankman-Fried with unusual speed, packaging together the criminal charges against the 30-year-old in a matter of weeks. The federal charges came alongside complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.
They were assisted by two of Bankman-Fried’s closest allies, Caroline Ellison, the former CEO of his hedge fund Alameda Research, and Gary Wang, who co-founded FTX with Bankman-Fried.
Ellison, 28, and Wang, 29, pleaded guilty on Dec. 21. Their plea deals with prosecutors came after rampant speculation that Ellison, Bankman-Fried’s onetime romantic partner, was cooperating with federal probes.
Another former FTX executive, Ryan Salame, apparently first alerted regulators to alleged wrongdoing inside FTX. Salame, a former co-CEO at FTX, flagged “possible mishandling of clients’ assets” to Bahamian regulators two days before the crypto exchange filed for bankruptcy protection, according to a filing from the Securities Commission of the Bahamas.
Bankman-Fried was accused by federal law enforcement and financial regulators of perpetrating what the SEC called one of the largest and most “brazen” frauds in recent memory. His stunning fall was precipitated by reporting that raised questions on the nature of his hedge fund’s balance sheet.
In the weeks since FTX’s Nov. 11 Delaware bankruptcy filing, the extent of corporate malfeasance has been exposed. Replacement CEO John J. Ray said there was a “complete failure of corporate control.”
Bankman-Fried was indicted in New York federal court on Dec. 9, and was arrested by Bahamas law enforcement at the request of U.S. prosecutors on Dec. 12. Following his indictment, Bankman-Fried’s legal team in the Bahamas flip-flopped on whether or not their client would consent to extradition.
This is a developing story. Check back for updates.
Plans from the House Jan. 6 committee to imminently release its list of criminal referrals is raising questions over how far the panel will go in implicating former President Trump and his allies in a plot that culminated in the deadly attack on the Capitol.
Chair Bennie Thompson (D-Miss.) told reporters Tuesday that the committee had come to a “general agreement” to send criminal referrals to the Justice Department.
It’s a move that would allow the panel to put a finer point on its more than yearlong investigation, naming names and detailing specific statutes that were violated in an effort they have repeatedly said was a lawless campaign to block the peaceful transfer of power.
And while it would still be up to the Justice Department to act on the recommendations, it could put pressure on a department that, at least publicly, has trailed the committee in its own review of Jan. 6.
“They stiffen the spine of state and federal prosecutors by encouraging them to act,” Norm Eisen, counsel for Democrats in Trump’s first impeachment, said of the referrals on a call with reporters.
Legal experts have for some time argued there are a number of statutes that could be used for a possible Trump prosecution, including conspiracy to defraud the U.S.
But a remaining question with respect to the committee is just how broad they will go in outlining possible illegal behavior among allies.
“This is what we’re discussing as we go into the last days of our work on this important investigation,” Rep. Adam Schiff (D-Calif.), one of the committee’s members, said in a Wednesday morning interview on NPR.
“And that is, what would the impact of our referrals be if we make referrals, against whom and for what offenses?”
Justice Department subpoenas
The Justice Department previewed the span of its investigation in a November request made public this week, sending subpoenas to local officials in three states — Arizona, Michigan and Wisconsin — asking for any communications with just under 20 Trump campaign officials and associates.
That group includes a wide array of lawyers working in different capacities on behalf of the campaign, like Rudy Giuliani as well as John Eastman, who crafted memos encouraging Vice President Mike Pence to buck his ceremonial duty to certify the election results. All were involved in efforts inseven key states where Trump lost to President Biden igniting a push by the campaign to send false slates of electors from each.
Others listed on the subpoena include campaign manager Bill Stepien, whose testimony critical of Trump’s efforts was shared by the panel, and Bernard Kerik, an aide to Giuliani in investigating the debunked claims of fraud being pushed by Trump.
How far could referrals go?
But a referral from the committee could cast a wider net, particularly in regard to those within government who assisted with Trump’s efforts. That includes then-chief of staff Mark Meadows as well as Jeffrey Clark, who Trump weighed installing as attorney general to force an investigation into his baseless claims of election fraud.
Some members of the committee have suggested the referrals could go beyond Trump alone.
“We’re all very mindful of who is responsible. We have laid out in our hearings the role that the former president played in Jan. 6, and in supporting and pointing to the U.S. Capitol and telling his supporters to come out here.…That’s not lost on any of us,” Rep. Pete Aguilar (D-Calif.), a member of the panel, said in an interview with CNN.
But getting it right, Aguilar went on to say, means “telling the truth and make sure that within the time that we have that we ask every available question and that we aren’t shy about making suggestions and recommendations, both to protect the United States Capitol as well as to hold people accountable.”
There are a bounty of statutes Justice Department lawyers could use to charge those involved in the plot to remain in power.
A federal judge in California has already determined that Trump, in coordination with Eastman, likely committed conspiracy to defraud the U.S. as well as another crime, obstruction of an official proceeding, triggered by the use of violence.
The ruling from Judge David Carter came in a civil case in which Eastman challenged his obligation to turn documents over to the committee.
Beyond federal crimes, the Trump effort could violate various state statutes – a dynamic already seen in Georgia as Fulton County District Attorney Fani Willis conducts her own investigation into a push there to “find” additional votes for Trump and challenge the election results with faulty claims of fraud.
Prosecuting Jan. 6 cases
But top of mind for prosecutors will be whether they can successfully win a guilty verdict in incredibly high-profile cases, a feat that could be more challenging for certain statutes that require demonstrating intent.
The Justice Department also has a mixed track record when it comes to taking the committee’s suggestions.
The panel, and later the full House, voted to censure four individuals subpoenaed by the committee who they say failed to comply with their subpoenas.
The Justice Department brought cases against two of the figures – one-time White House strategist Steve Bannon and Trump adviser Peter Navarro. But it declined to do so in the case of Meadows – who did provide some requested documents sought by the committee – or Dan Scavino, Trump’s communications guru.
DOJ may want more than referrals
The decision on referrals comes after the panel formed a subcommittee of its four lawyers to evaluate the decision and make specific recommendations.
Eisen said while any referrals would likely include legal analysis and statute-by-statute recommendations, the Justice Department may be more eager to get other intel from the committee.
“The roadmap, the evidence – that’s the most critical part. If I’m a prosecutor, I would much rather have the evidence than the legal analysis and conclusion that you should charge,” he said.
The committee has thus far resisted calls from DOJ to share its work, even after the panel agreed to share some 20 transcripts with investigators. Thompson said they were never turned over as the committee “just made a decision not to,” advising that DOJ would get the final report along with the public.
Schiff said that was a detail weighing on the committee.
“How much should we detail the evidence, knowing that the Justice Department has sources of evidence that we don’t, that it was able to enforce certain subpoenas and compel testimony that we have not been able to?” he said.
“So in some ways, I think the information we provide will exceed that of the department. In other areas, they have more evidence than we do.”
FTX CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on Friday, June 4, 2021.
Matias J. Ocner | Miami Herald | Tribune News Service | Getty Images
Sam Bankman-Fried, the disgraced former CEO of FTX — the bankrupt cryptocurrency exchange that was worth $32 billion a few weeks ago — has a real knack for self-promotional PR. For years, he cast himself in the likeness of a young boy genius turned business titan, capable of miraculously growing his crypto empire as other players got wiped out. Everyone from Silicon Valley’s top venture capitalists to A-list celebrities bought the act.
But during Bankman-Fried’s press junket of the last few weeks, the onetime wunderkind has spun a new narrative – one in which he was simply an inexperienced and novice businessman who was out of his depth, didn’t know what he was doing, and crucially, didn’t know what was happening at the businesses he founded.
It is quite the departure from the image he had carefully cultivated since launching his first crypto firm in 2017 – and according to former federal prosecutors, trial attorneys and legal experts speaking to CNBC, it recalls a classic legal defense dubbed the “bad businessman strategy.”
At least $8 billion in customer funds are missing, reportedly used to backstop billions in losses at Alameda Research, the hedge fund he also founded. Both of his companies are now bankrupt with billions of dollars worth of debt on the books. The CEO tapped to take over, John Ray III, said that “in his 40 years of legal and restructuring experience,” he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” This is the same Ray who presided over Enron’s liquidation in the 2000s.
In America, it is not a crime to be a lousy or careless CEO with poor judgement. During his recent press tour from a remote location in the Bahamas, Bankman-Fried really leaned into his own ineptitude, largely blaming FTX’s collapse on poor risk management.
At least a dozen times in a conversation with Andrew Ross Sorkin, he appeared to deflect blame to Caroline Ellison, his counterpart (and one-time girlfriend) at Alameda. He says didn’t know how extremely leveraged Alameda was, and that he just didn’t know about a lot of things going on at his vast empire.
Bankman-Fried admitted he had a “bad month,” but denied committing fraud at his crypto exchange.
Fraud is the kind of criminal charge that can put you behind bars for life. With Bankman-Fried, the question is whether he misled FTX customers to believe their money was available, and not being used as collateral for loans or for other purposes, according to Renato Mariotti, a former federal prosecutor and trial attorney who has represented clients in derivative-related claims and securities class actions.
“It sure looks like there’s a chargeable fraud case here,” said Mariotti. “If I represented Mr. Bankman-Fried, I would tell him he should be very concerned about prison time. That it should be an overriding concern for him.”
But for the moment, Bankman-Fried appears unconcerned with his personal legal exposure. When Sorkin asked him if he was concerned about criminal liability, he demurred.
“I don’t think that — obviously, I don’t personally think that I have — I think the real answer is it’s not — it sounds weird to say it, but I think the real answer is it’s not what I’m focusing on,” Bankman-Fried told Sorkin. “It’s — there’s going to be a time and a place for me to think about myself and my own future. But I don’t think this is it.”
Comments such as these, paired with the lack of apparent action by regulators or authorities, have helped inspire fury among many in the industry – not just those who lost their money. The spectacular collapse of FTX and SBF blindsided investors, customers, venture capitalists and Wall Street alike.
Bankman-Fried did not respond to a request for comment. Representatives for his former law firm, Paul, Weiss, did not immediately respond to comment. Semafor reported earlier that Bankman-Fried’s new attorney was Greg Joseph, a partner at Joseph Hage Aaronson.
Both of Bankman-Fried’s parents are highly respected Stanford Law School professors. Semafor also reported that another Stanford Law professor, David Mills, was advising Bankman-Fried.
Mills, Joseph and Bankman-Fried’s parents did not immediately respond to requests for comment.
What kind of legal trouble could he be in?
Bankman-Fried could face a host of potential charges – civil and criminal – as well as private lawsuits from millions of FTX creditors, legal experts told CNBC.
For now, this is all purely hypothetical. Bankman-Fried has not been charged, tried, nor convicted of any crime yet.
Richard Levin is a partner at Nelson Mullins Riley & Scarborough, where he chairs the fintech and regulation practice. He’s been involved in the fintech industry since the early 1990s, and has represented clients before the Securities and Exchange Commission, Commodity Futures Trading Commission and Congress. All three of those entities have begun probing Bankman-Fried.
There are three different, possibly simultaneous legal threats that Bankman-Fried faces in the United States alone, Levin told CNBC.
First is criminal action from the U.S. Department of Justice, for potential “criminal violations of securities laws, bank fraud laws, and wire fraud laws,” Levin said.
A spokesperson for the U.S. Attorney’s Office for the Southern District of New York declined to comment.
Securing a conviction is always challenging in a criminal case.
Mariotti, the former federal prosecutor is intricately familiar with how the government would build a case. He told CNBC, “prosecutors would have to prove beyond a reasonable doubt that Bankman-Fried or his associates committed criminal fraud.”
“The argument would be that Alameda was tricking these people into getting their money so they could use it to prop up a different business,” Mariotti said.
“If you’re a hedge fund and you’re accepting customer funds, you actually have a fiduciary duty [to the customer],” Mariotti said.
Prosecutors could argue that FTX breached that fiduciary duty by allegedly using customer funds to artificially stabilize the price of FTX’s own FTT coin, Mariotti said.
But intent is also a factor in fraud cases, and Bankman-Fried insists he didn’t know about potentially fraudulent activity. He told Sorkin that he “didn’t knowingly commingle funds.”
“I didn’t ever try to commit fraud,” Bankman-Fried said.
Beyond criminal charges, Bankman-Fried could also be facing civil enforcement action. “That could be brought by the Securities Exchange Commission, and the Commodity Futures Trading Commission, and by state banking and securities regulators,” Levin continued.
“On a third level, there’s also plenty of class actions that can be brought, so there are multiple levels of potential exposure for […] the executives involved with FTX,” Levin concluded.
Who is likely to go after him?
The Department of Justice is most likely to pursue criminal charges in the U.S. The Wall Street Journal reported that the DOJ and the SEC were both probing FTX’s collapse, and were in close contact with each other.
That kind of cooperation allows for criminal and civil probes to proceed simultaneously, and allows regulators and law enforcement to gather information more effectively.
But it isn’t clear whether the SEC or the CFTC will take the lead in securing civil damages.
An SEC spokesperson said the agency does not comment on the existence or nonexistence of a possible investigation. The CFTC did not immediately respond to a request for comment.
“The question of who would be taking the lead there, whether it be the SEC or CFTC, depends on whether or not there were securities involved,” Mariotti, the former federal prosecutor, told CNBC.
SEC Chairman Gary Gensler, who met with Bankman-Fried and FTX executives in spring 2022, has said publicly that “many crypto tokens are securities,” which would make his agency the primary regulator. But many exchanges, including FTX, have crypto derivatives platforms that sell financial products like futures and options, which fall under the CFTC’s jurisdiction.
“For selling unregistered securities without a registration or an exemption, you could be looking at the Securities Exchange Commission suing for disgorgement — monetary penalties,” said Levin, who’s represented clients before both agencies.
“They can also sue, possibly, claiming that FTX was operating an unregistered securities market,” Levin said.
Then there are the overseas regulators that oversaw any of the myriad FTX subsidiaries.
The Securities Commission of The Bahamas believes it has jurisdiction, and went as far as to file a separate case in New York bankruptcy court. That case has since been folded into FTX’s main bankruptcy protection proceedings, but Bahamian regulators continue to investigate FTX’s activities.
Court filings allege that Bahamian regulators have moved customer digital assets from FTX custody into their own. Bahamian regulators insist that they’re proceeding by the book, under the country’s groundbreaking crypto regulations — unlike many nations, the Bahamas has a robust legal framework for digital assets.
But crypto investors aren’t sold on their competence.
“The Bahamas clearly lack the institutional infrastructure to tackle a fraud this complex and have been completely derelict in their duty,” Castle Island Ventures partner Nic Carter told CNBC. (Carter was not an FTX investor, and told CNBC that his fund passed on early FTX rounds.)
“There is no question of standing. U.S. courts have obvious access points here and numerous parts of Sam’s empire touched the U.S. Every day the U.S. leaves this in the hands of the Bahamas is a lost opportunity,” he continued.
Investors who have lost their savings aren’t waiting. Class-action suits have already been filed against FTX endorsers, like comedian Larry David and football superstar Tom Brady. One suit excoriated the celebrity endorsers for allegedly failing to do their “due diligence prior to marketing [FTX] to the public.”
FTX’s industry peers are also filing suit against Bankman-Fried. BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the former billionaire provided for the crypto lending firm.
FTX and Bankman-Fried had previously rescued BlockFi from insolvency in June, but when FTX failed, BlockFi was left with a similar liquidity problem and filed for bankruptcy protection in New Jersey.
Bankman-Fried has also been sued in Florida and California federal courts. He faces class-action suits in both states over “one of the great frauds in history,” a California court filing said.
The largest securities class-action settlement was for $7.2 billion in the Enron accounting fraud case, according to Stanford research. The possibility of a multibillion-dollar settlement would come on top of civil and criminal fines that Bankman-Fried faces.
But the onus should be on the U.S. government to pursue Bankman-Fried, Carter told CNBC, not on private investors or overseas regulators.
“The U.S. isn’t shy about using foreign proxies to go after Assange — why in this case have they suddenly found their restraint?”
What penalties could he face?
Wire fraud is the most likely criminal charge Bankman-Fried would face. If the DOJ were able to secure a conviction, a judge would look to several factors to determine how long to sentence him.
Braden Perry was once a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator. He’s now a partner at Kennyhertz Perry, where he advises clients on anti-money laundering, compliance and enforcement issues.
Based on the size of the losses, if Bankman-Fried is convicted of fraud or other charges, he could be behind bars for years — potentially for the rest of his life, Perry said. But the length of any potential sentence is hard to predict.
“In the federal system, each crime always has a starting point,” Perry told CNBC.
Federal sentencing guidelines follow a numeric system to determine the maximum and minimum allowable sentence, but the system can be esoteric. The scale, or “offense level,” starts at one, and maxes out at 43.
A wire fraud conviction rates as a seven on the scale, with a minimum sentence ranging from zero to six months.
But mitigating factors and enhancements can alter that rating, Perry told CNBC.
“The dollar value of loss plays a significant role. Under the guidelines, any loss above $550 million adds 30 points to the base level offense,” Perry said. FTX customers have lost billions.
“Having 25 or more victims adds 6 points, [and] use of certain regulated markets adds 4,” Perry continued.
In this hypothetical scenario, Bankman-Fried would max out the scale at 43, based on those enhancements. That means Bankman-Fried could be facing life in federal prison, without the possibility of supervised release, if he’s convicted on a single wire fraud offense.
But that sentence can be reduced by mitigating factors – circumstances that would lessen the severity of any alleged crimes.
“In practice, many white-collar defendants are sentenced to lesser sentences than what the guidelines dictate,” Perry told CNBC, Even in large fraud cases, that 30-point enhancement previously mentioned can be considered punitive.
By way of comparison, Stefan Qin, the Australian founder of a $90 million cryptocurrency hedge fund, was sentenced to more than seven years in prison after he pleaded guilty to one count of securities fraud. Roger Nils-Jonas Karlsson, a Swedish national accused by the United States of defrauding over 3,500 victims of more than $16 million was sentenced to 15 years in prison for securities fraud, wire fraud and money laundering.
Bankman-Fried could also face massive civil fines. Bankman-Fried was once a multibillionaire, but claimed he was down to his last $100,000 in a conversation with CNBC’s Sorkin at the DealBook Summit last week.
“Depending on what is discovered as part of the investigations by law enforcement and the civil authorities, you could be looking at both heavy monetary penalties and potential incarceration for decades,” Levin told CNBC.
How long will it take?
Whatever happens won’t happen quickly.
In the most famous fraud case in recent years, Bernie Madoff was arrested within 24 hours of federal authorities learning of his multibillion-dollar Ponzi scheme. But Madoff was in New York and admitted to his crime on the spot.
The FTX founder is in the Bahamas and hasn’t admitted wrongdoing. Short of a voluntary return, any efforts to apprehend him would require extradition.
With hundreds of subsidiaries and bank accounts, and thousands of creditors, it’ll take prosecutors and regulators time to work through everything.
Similar cases “took years to put together,” said Mariotti. At FTX, where record keeping was spotty at best, collecting enough data to prosecute could be much harder. Expenses were reportedly handled through messaging software, for example, making it difficult to pinpoint how and when money flowed out for legitimate expenses.
In Enron’s bankruptcy, senior executives weren’t charged until nearly three years after the company went under. That kind of timeline infuriates some in the crypto community.
“The fact that Sam is still walking free and unencumbered, presumably able to cover his tracks and destroy evidence, is a travesty,” said Carter.
But just because law enforcement is tight-lipped, that doesn’t mean they’re standing down.
“People should not jump to the conclusion that something is not happening just because it has not been publicly disclosed,” Levin told CNBC.
Could he just disappear?
“That’s always a possibility with the money that someone has,” Perry said, although Bankman-Fried claims he’s down to one working credit card. But Perry doesn’t think it’s likely. “I believe that there has been likely some negotiation with his attorneys, and the prosecutors and other regulators that are looking into this, to ensure them that when the time comes […] he’s not fleeing somewhere,” Perry told CNBC.
In the meantime, Bankman-Fried won’t be resting easy as he waits for the hammer to drop. Rep. Maxine Waters extended a Twitter invitation for him to appear before a Dec. 13 hearing.
Bankman-Fried responded on Twitter, telling Waters that if he understands what happened at FTX by then, he’d appear.
Correction: Caroline Ellison is Bankman-Fried’s counterpart at Alameda. An earlier version misspelled her name.
appointed a former federal and international war-crimes prosecutor as special counsel on Friday to oversee Justice Department investigations into former President
Donald Trump.
Jack Smith, who once led the Justice Department unit that investigates public corruption and since 2018 was the chief prosecutor at The Hague investigating war crimes in Kosovo, will be the third special counsel in five years to examine issues involving Mr. Trump.
He will lead both the probe into the handling of classified documents at Mr. Trump’s Mar-a-Lago resort in Florida and oversee key aspects of the sprawling Justice Department investigation into efforts by Mr. Trump and his allies to overturn his 2020 election loss.
“The Special Counsel is authorized to prosecute federal crimes arising from the investigation of these matters,” Mr. Garland said in a brief memo naming Mr. Smith to the post. The memo said Mr. Smith’s remit doesn’t include cases against those who were physically present at the Jan. 6, 2021, riot at the Capitol.
The appointment comes three days after Mr. Trump announced another bid for the presidency and would mark the naming of the third independent prosecutor in five years to examine issues involving Mr. Trump.
Jack Smith previously led the Justice Department unit that investigates public corruption.
Photo:
U.S. Department of Justice
The move reflects the sensitivity of Mr. Garland overseeing any investigation into Mr. Trump now that he is a declared presidential candidate. President Biden, who has said he intends to run for re-election in 2024, nominated Mr. Garland to head the Justice Department in part for the former judge’s promise to insulate the agency from political influence.
Some legal experts have anticipated such an appointment. Regulations governing special counsels provide for the attorney general to name an outsider if he determines that the investigation or prosecution presents a conflict of interest for the department and recusals of certain officials wouldn’t be enough to overcome the concerns.
Some former Justice Department officials and prosecutors have said such an appointment wouldn’t do much to allay criticism of the FBI and Justice Department by Mr. Trump and his supporters. There are few people with the necessary prosecutorial experience and nonpartisan reputation who would be willing to take on the post, those people say.
A special-counsel appointment won’t entirely eliminate the appearance of a conflict, as Mr. Garland and other senior Justice Department officials are still likely to be involved in some decision-making related to the probe, according to people familiar with past special counsels.
The House committee investigating the Jan. 6, 2021, attack on the Capitol voted in mid-October to issue a subpoena for relevant documents and testimony under oath from former President Donald Trump. Photo: Elizabeth Frantz/Reuters
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com and Sadie Gurman at sadie.gurman@wsj.com
The Kremlin is threatening retaliatory action after authorities arrested Artyom Uss, the son of a top Russian official, at the United States’ request, for allegedly participating in a sanctions evasion and money laundering scheme.
Uss, who was detained in Milan, was charged in relation to a scheme to unlawfully obtain U.S. military technology and sanctioned Venezuelan oil in order to support Russia’s war effort in Ukraine, according to charges unsealed by the U.S. Department of Justice this week.
“We are categorically against this and we condemn the practice of these kinds of arrests of Russian citizens,” Kremlin spokesman Dmitry Peskov said.
Uss’ father, the governor of Russia’s Krasnoyarsk Krai region, Alexander Uss, has suggested the arrest is politically motivated, according to TASS.
Another Russian government spokesperson, Maria Zakharova, said Moscow would not leave the United States’ search for Russians “unanswered” and accused the U.S. of “taking hostages for “political purposes,” TASS reported.
Uss wasn’t the only one charged in the money laundering and smuggling scheme. Uss co-owned a trading company called Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH) which he and co-conspirators allegedly used as a front to ship U.S. defense technology to Russia.
Uss and co-conspirators are accused of using NDA GmbH to ship advanced semiconductors and microprocessors for fighter aircraft, missile systems, smart munitions, radar, and satellites in Russia—some of which have been found in weapons used in the war in Ukraine.
“Some of the same electronic components obtained through the criminal scheme have been found in Russian weapons platforms seized on the battlefield in Ukraine,” the Department of Justice said in an announcement, adding that the accused developed a “sophisticated network” of schemes that “undermined security, economic stability and rule of law around the world.”
The group of co-conspirators also allegedly shipped hundreds of millions of barrels of oil from Venezuela to Russian and Chinese entities, including at least one sanctioned oligarch.
The 12-count indictment charged five Russian nationals in total, including Yury Orekhov, Svetlana Kuzurgasheva, Timofey Telegin, and Sergey Tulyakov. Juan Fernando Serrano Ponce and Juan Carlos Soto were also charged with setting up illegal oil deals for Venezuelan state oil company Petroleos de Venezuela S.A.
One of the co-conspirators openly acknowledged that NDA GmbH was working for a sanctioned oligarch, according to court documents.
“He [the oligarch] is under sanctions as well,” Orekhov said. “That’s why we [are] acting from this company [NDA GmbH]. As fronting.”
Russia has long helped Venezuela evade sanctions around the globe. But the latest charges expose the multiple layers of sanctions the United States has imposed on both Russia and Venezuela.
The United States has been sanctioning Venezuela for more than 15 years, and in recent years has imposed restrictions on Venezuela’s state oil company and other entities in order to try to pressure Venezuelan dictator Nicolás Maduro to leave power.
Sanctions on Russian banks in recent months, which the United States and other nations have levied in an attempt to try to isolate Moscow on the world stage while it assaults Ukraine, have likely hurt Venezuela’s ability to access its assets, according to the Congressional Research Service. But higher oil prices from Russia’s invasion of Ukraine appear to be driving a semblance of economic recovery for Venezuela, according to the CRS.
Task Force KleptoCapture, the Department of Justice group established earlier this year with the aim of punishing Russia for the war in Ukraine and enforcing sanctions on Russian oligarchs, announced the charges alongside other DOJ entities.
“Stamping out evasion of export controls on military technology is among the Task Force’s highest priorities,” Andrew Adams, the director of Task Force KleptoCapture, said in a statement. “Webs of shell companies, cryptocurrency and an international network of fraudsters failed to shield Orekhov and his cronies from apprehension by U.S. law enforcement.”
It’s not clear what Russia will be doing in response to Uss’ arrest.
When asked Thursday if Uss’ arrest is related at all to the negotiations to release Brittney Griner from Russia, White House Press Secretary Karine Jean-Pierre declined to speculate.
“The President is willing… to take extraordinary lengths to bring Americans home,” Jean-Pierre said in a briefing with reporters.
U.S. District Judge Carl Nichols ruled for the companies in an opinion that he kept under seal for now because he said it “may contain competitively sensitive information.” The judge said he would release a redacted public version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request to block the companies from completing the deal.
The court ruling represents an early blow to stepped-up antitrust enforcement by the Biden administration, which sued in February to block the deal. The Justice Department’s top antitrust official,
Jonathan Kanter,
said the department disagreed with the decision and was considering its next steps.
“Protecting competition and access to affordable healthcare is of the utmost importance to the antitrust division and the Department of Justice,” Mr. Kanter said.
The decision is a triumph for UnitedHealth, which owns the largest U.S. health insurer and a healthcare operation that comprises thousands of doctors as well as clinics, surgery centers and other assets, along with a powerful conglomeration of health data.
In a statement, a UnitedHealth spokesman said, “We are pleased with the decision and look forward to combining with Change Healthcare as quickly as possible so that together we can continue our work to make the health system work better for everyone.”
Change provides services related to payment processes for healthcare systems, analytics for financing and billing and tools that help hospitals make decisions about patient care.
UnitedHealth had agreed to divest business assets related to claims-processing to address competition concerns, an offer the Justice Department had dismissed as insufficient.
Judge Nichols in his order required UnitedHealth to make that divestiture.
UnitedHealth’s deal for Change, announced in January 2021, will bring the health-technology company under the company’s Optum health-services arm. UnitedHealth had argued that its combination with Change could help improve care by getting better information to doctors, and reduce waste. It agreed to pay nearly $8 billion for Change and assume about $5 billion in debt.
The Justice Department had argued that the deal would give UnitedHealth a virtual monopoly on an important tool that health insurers use to determine when a claim should be paid. And it said the company shouldn’t be allowed to own Change Healthcare’s data clearinghouse, which rival insurers use to compete with UnitedHealth.
The judge, an appointee of former President
Donald Trump,
signaled his skepticism of the lawsuit in a hearing earlier this month. A trial took place in August.
The lawsuit was part of an early batch of antitrust cases brought by the Justice Department under President Biden, a Democrat, that were designed to take a harder line on corporate deal activity. Among other cases, the department is waiting on a ruling in its challenge to a major publishing industry deal, Penguin Random House’s planned acquisition of Simon & Schuster. And it is preparing to go to trial next week in its lawsuit challenging a partnership between
American Airlines Group Inc.
and
JetBlue Airways Corp.
The current crop of antitrust officials, backed by calls from Democrats for a more aggressive approach, have sought to set new court precedents that would steer the law in a broader direction, after years of rulings in which the judiciary has tended to read the antitrust laws more narrowly than a generation ago. Monday’s decision served as a reminder that the Justice Department’s goals are dependent on proving their cases in front of a judge.
The Federal Trade Commission, which shares antitrust authority with the department, also is facing hurdles. It recently lost a ruling from its own in-house administrative law judge, in a case where it was challenging
Illumina Inc.’s
acquisition of cancer-testing developer Grail Inc.
Monday’s decision comes as UnitedHealth and its rivals have continued to move more deeply into vertical integration of health assets, spanning insurance and healthcare provider businesses, as well as pulling together ever-larger troves of health data.
Even after the Justice Department filed suit to block the Change deal, UnitedHealth moved ahead with other acquisitions, including a $5.4 billion takeover of home-health company
LHC Group Inc.
announced last March.
Earlier this month,
CVS Health Corp.
—the parent of health insurer Aetna, a pharmacy-benefit operation and its eponymous drugstores—announced an $8 billion deal to take over home-healthcare company Signify Health Inc. CVS has said it wants to get deeper into the business of primary care.
Write to Anna Wilde Mathews at anna.mathews@wsj.com and Brent Kendall at brent.kendall@wsj.com
The Justice Department late Friday asked a federal appeals court to allow prosecutors to resume reviewing the roughly 100 documents marked classified that were recovered in the extraordinary search last month of former President
Donald Trump’s
Mar-a-Lago home and to bar a special master from reviewing them.
The department told the 11th Circuit U.S. Court of Appeals in Atlanta that a judge’s order temporarily stopping prosecutors from reviewing the documents marked classified “impedes the government’s efforts to protect the nation’s security” and hinders its ongoing investigation into the government records at the former president’s sprawling resort.
Late Thursday, U.S. District Judge Aileen Cannon appointed a former chief federal judge to independently review the documents. But over the objection of prosecutors, she included the roughly 100 documents marked classified that were recovered in the search and ordered the Justice Department to provide Mr. Trump’s legal team with access to those materials.
FBI agents searched Mr. Trump’s sprawling Florida resort on Aug. 8 and removed 33 boxes with thousands of presidential records and news clippings mixed with classified materials. Afterward, prosecutors said they were investigating, among other issues, potential violations of the Espionage Act, which relates to the misuse of classified information.
Prosecutors had argued that Mr. Trump had no right to those sensitive national security documents, and some legal experts said the order to share the classified documents with Mr. Trump’s team was unprecedented.
“There are considerations that would weigh in favor of Trump’s lawyers not being able to have access to these documents,” said Jessica Levinson, a professor at Loyola Law School in Los Angeles. “There’s national security concerns on the table here, and Trump himself seemingly had access for 18 months to these documents. Why they suddenly need access now makes very little sense to me.”
Mr. Trump’s legal team has disputed the status of the documents marked as classified.
“The government has not proven these records remain classified. That issue is to be determined later,” Mr. Trump’s lawyers wrote in a Monday filing to Judge Cannon.
Mr. Trump has called the Aug. 8 search prosecutorial misconduct and an attempt to keep him from running for president in 2024.
Lawyers whose clients have been charged with crimes related to classified information have been allowed to view those highly sensitive documents in order to prepare for a defense, experts said. But prosecutors have filed no such charges in relation to the FBI search.
U.S. District Judge Aileen Cannon appointed a retired judge to independently review classified documents found in Mar-a-Lago.
Photo:
Senate Judiciary Committee
“This is not a criminal case, this is an investigation,” said Stephen A. Saltzburg, a former Justice Department official and law professor at George Washington University. Mr. Saltzburg, who served as associate independent counsel in the Iran-Contra probe in the 1980s, noted that Retired Lt. Col.
Oliver North’s
attorneys were granted access to classified documents in order to prepare his defense on charges emanating from that scandal.
“The judge’s ruling is extraordinarily unusual,” Mr. Saltzburg said.
When the Florida-based Judge Cannon ordered the appointment of an independent arbiter last week, she had temporarily blocked criminal investigators from using the materials, describing it as “a brief pause to allow for neutral, third-party review to ensure a just process with adequate safeguards.”
Days later, prosecutors asked Judge Cannon to revisit that pause specifically as it related to the 100 classified documents at the heart of the probe, arguing that Mr. Trump had no basis to claim attorney-client or executive privileges over those documents. They said they would set aside the other roughly 11,000 documents seized and provide Mr. Trump with copies of them, but said that if the judge didn’t grant their request to resume reviewing the classified documents by Sept. 15, they would go to the appeals court with the same request.
Legal experts also said at the time the prospect of having someone outside government—rather than the executive branch itself—help determine what could be covered by executive privilege was legally flawed.
At the heart of the FBI’s investigation into former President Donald Trump is the handling of classified documents. WSJ explains the government’s classification and declassification procedure and what authority the president has—and doesn’t have. Illustration: Adele Morgan
In denying the government’s request, Judge Cannon said she found the Justice Department’s request premature and didn’t want to accept on its face the government’s premise that the 100 documents are classified government records, and that Mr. Trump had no plausible claim of privilege as to any of those documents.
Judge Cannon’s order pertained only to documents seized during the Aug. 8 FBI search and not to any documents that Mr. Trump had previously handed over to the government.
Justice Department lawyers likely spent Friday seeking to determine the scope and tone of their appeal, Ms. Levinson said. They could appeal the entire order, or focus more narrowly on the provisions related to the classified materials, which could let investigators move forward on aspects of the probe, she said.
Prosecutors could seek to put the special master’s work on hold while they appeal her ruling, or could ask for a narrow delay on the classified materials and proceed with the review of the other materials, experts said.
Judge Cannon gave Raymond J. Dearie, a longtime judge in federal court in Brooklyn, until Nov. 30 to complete work that former special masters described as potentially tedious and time-consuming. And given the classified status of some of the documents Mr. Dearie may review, he will likely need to work in a special, secure area to view them, Mr. Saltzburg said.
In her order, Judge Cannon told prosecutors to provide Mr. Trump’s legal team with copies of the nonclassified documents, and instructed Mr. Trump’s legal team to identify those materials it believes to be personal documents, privileged presidential records, or other presidential records. If the government disagrees with any characterizations, the special master is expected to review the dispute and make a recommendation for Judge Cannon’s determination.
He can ask for more evidence from both sides, and seek the guidance of the National Archives in making recommendations.
“It may feel like a long time to some,” said Todd Presnell, an attorney who has served as a special master. “But in this arena, that is a short amount of time. It can be a tedious, difficult task.”
Write to Sadie Gurman at sadie.gurman@wsj.com and Aruna Viswanatha at Aruna.Viswanatha@wsj.com
U.S. District Judge Aileen Cannon has ruled in favor of one of former President Donald Trump’s special master picks, appointing Raymond Dearie to review the trove of documents seized by the FBI at Trump’s Mar-a-Lago home.
The judge also denied the Department of Justice’s motion for a partial stay to allow DOJ continued access to the documents.
“The Court remains firmly of the view that appointment of a special master to conduct a review of the seized materials, accompanied by a temporary injunction to avoid unwarranted use and disclosure of potentially privileged and/or personal materials, is fully consonant with the foregoing principles and with the need to ensure at least the appearance of fairness and integrity under unprecedented circumstances,” Judge Cannon, who was appointed by Trump, writes.
Last month, Trump’s team asked that an independent third party be placed in charge of reviewing the 11,000 seized documents to ascertain whether any were protected by executive privilege or attorney-client privilege when removed in the Aug. 8 search.
The Justice Department opposed the request, but when Judge Cannon ruled in favor of a special master, it agreed to Trump’s pick, Dearie, as an appropriate choice.
Judge Dearie is a former U.S. attorney for the Eastern District of New York and served as chief judge of the court from 2007 to 2011. He was appointed as a judge by Ronald Reagan in 1986.
He previously approved a warrant for the FBI to surveil former Trump campaign aide Carter Page during the Russia investigation, though he is understood to have a stellar reputation and is highly regarded by Trump and his team.
Cannon gave the special master a Nov. 30 deadline to finish his review of the potentially privileged documents, which is more than a month after the DOJ’s request for an Oct. 17 deadline.
The Justice Department has indicated it will appeal, which could see the case taken to the United States Court of Appeals for the Eleventh Circuit and as high as the U.S. Supreme Court.
In her ruling, Judge Cannon disagrees with the DOJ’s claims that the records it is attempting to review—in particular, 100 documents “marked as classified”—contain such sensitive information and requests further review from the special master.
Cannon denied the DOJ’s request to exempt the 100 documents from the review and to lift restrictions on DOJ from using the classified materials seized during the search to further its criminal investigation into the handling of sensitive documents at Mar-a-Lago.
She said she would not accept the DOJ’s brief that the documents remain classified as fact without a review from the special master.
“First, there has been no actual suggestion by the Government of any identifiable emergency or imminent disclosure of classified information arising from Plaintiff’s allegedly unlawful retention of the seized property,” Cannon wrote.
Trump has asserted publicly that he declassified all the records before the FBI search.
“The Court does not find it appropriate to accept the Government’s conclusions on these important and disputed issues without further review by a neutral third party in an expedited and orderly fashion,” Cannon writes, noting “there are documented instances giving rise to concerns about the Government’s ability to properly categorize and screen materials.”
Though Cannon directed the special master to “prioritize review of the approximately 100 documents marked as classified (and papers physically attached thereto), and thereafter consider prompt adjustments to the Court’s Orders as necessary.”
Cannon also ordered Trump to pay the full cost of the review, despite a plea from his lawyer’s to split the bill.
Dearie has already accepted the role in a signed filing.
Mar-a-Lago home Monday removed 11 sets of classified documents, including some marked as top secret and meant to be only available in special government facilities, according to a search warrant released by a Florida court Friday.
The Federal Bureau of Investigation agents took around 20 boxes of items, binders of photos, a handwritten note and the executive grant of clemency for Mr. Trump’s ally
Roger Stone,
a list of items removed from the property shows. Also included in the list was information about the “President of France,” according to the three-page list. The list is contained in a seven-page document that also includes the warrant to search the premises which was granted by a federal magistrate judge in Florida.
The list includes references to one set of documents marked as “Various classified/TS/SCI documents,” an abbreviation that refers to top-secret/sensitive compartmented information. It also says agents collected four sets of top secret documents, three sets of secret documents, and three sets of confidential documents. The list didn’t provide any more details about the substance of the documents.
Mr. Trump’s lawyers argue that the former president used his authority to declassify the material before he left office. While a president has the power to declassify documents, there are federal regulations that lay out a process for doing so.
Former President Donald Trump said FBI agents “raided” his Mar-a-Lago home in Florida on Monday and broke into a safe. The search was part of an investigation into his handling of classified information, said people familiar with the matter. Photo: Cristobal Herrera-Ulashkevich/Shutterstock
“They could have had it anytime they wanted—and that includes long ago. All they had to do was ask,” Mr. Trump said in a statement issued Friday.
On Friday afternoon, U.S. Magistrate Judge Bruce Reinhart issued an order making the warrant and inventory list public, after the Justice Department said in a court filing that Mr. Trump’s lawyers told federal prosecutors they didn’t object to the government’s request to unseal the information.
The search and seizure warrant, signed by Judge Reinhart, shows that FBI agents sought to search “the 45 Office,” as well as “all storage rooms and all other rooms or areas within the premises used or available to be used by [the former president] and his staff and in which boxes or documents could be stored, including all structures or buildings on the estate.”
They didn’t seek access to search private guest rooms, such as those of Mar-a-Lago members, according to the document.
The former president and his team don’t have the affidavit, which would provide more detail about the FBI’s investigation, according to people familiar with the process. An affidavit would explain what evidence, including witnesses, the government had collected and describe why investigators believe that a crime may have been committed. Mr. Trump’s lawyers have asked for a more specific account of what was removed from Mar-a-Lago.
The disclosure of the warrant and the inventory marks the culmination of an extraordinary week, which began last Friday at 12:12 p.m., when the judge signed off on the unprecedented warrant to search a former president’s home. Three days later, at 6:19 p.m., a lawyer for Mr. Trump, Christina Bobb, signed a receipt for the items the FBI took that day.
Former President Donald Trump, departing Trump Tower in New York Wednesday, has said he wouldn’t oppose releasing the search warrant.
Photo:
Julia Nikhinson/Associated Press
To the Justice Department, the search was the result of a monthslong effort to get the classified documents remaining in Mr. Trump’s possession after at least two prior attempts. They were at first primarily interested in securing the documents, but pursued a criminal investigation as they began to doubt that Mr. Trump’s team was being forthright about the documents still in their possession, people familiar with the matter said.
To Mr. Trump’s allies, the search was a heavy-handed approach to obtaining documents they say Mr. Trump was willing to return and was in the process of negotiating the return.
It is unclear how the investigation may progress and whether prosecutors are considering bringing any charges against Mr. Trump or others in connection with the investigation now that the documents have been recovered.
Rep. Markwayne Mullin (R., Okla.)—who sits on the House Intelligence Committee and has questioned the need for the search by federal agents—said Attorney General
Merrick Garland
should brief the Intelligence Committee. “It’s a high threshold to say it was an immediate national security threat, if it wasn’t an immediate national security threat then I think there’s a lot of questions that need to be answered,” he said.
The warrant said investigators were seeking all records that could be evidence of violations of laws governing the gathering, transmitting or losing of classified information; the removal of official government records; and the destruction of records in a federal investigation.
Attorney General Merrick Garland in a briefing said the Department of Justice is asking a Florida judge to unseal the warrant FBI agents used to search former President Donald Trump’s Mar-a-Lago estate. Photo: Evelyn Hockstein/Reuters
The U.S. government has three main levels of classification. In ascending order, the levels are confidential, secret and top secret. They are designed to reflect how sensitive a document’s underlying contents are considered, meaning that a breach of a higher classification level could potentially cause more damage to national security.
SCI documents are typically reserved for military, civilians with special clearance, and contractor personnel who work in a Sensitive Compartmented Information Facility, or SCIF, including those who are responsible for the security of a SCIF.
As the investigation progressed, someone familiar with the stored papers told investigators there may still be more sensitive documents on the premises beyond what they had already received in January and June, people familiar with the matter have said.
It is not known when the documents stored at Mar-a-Lago arrived there, during Mr. Trump’s presidency or as he left office.
Mr. Stone didn’t immediately respond for comment.
Mr. Trump, while in office, would regularly feud publicly with French President
Emmanuel Macron
over
Twitter
about various policy disagreements, particularly trade and Mr. Trump’s decision to withdraw from the Iran nuclear agreement. Privately, Mr. Trump used to tell aides that he believed Mr. Macron to be a “leaker” and untrustworthy, according to several former officials. The French embassy didn’t immediately respond for comment.
The search, while Mr. Trump was in New York, stoked a political firestorm with Republican lawmakers demanding an explanation for the unprecedented search of a former president’s home. The showdown began after the National Archives in January retrieved more than a dozen boxes of White House documents from the resort earlier this year, some of which officials deemed classified national-security information.
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Mr. Garland and FBI officials deliberated for days about whether to respond to the criticism of the search and how much to say, people familiar with discussions said. The attorney general ultimately decided to let the Justice Department’s work speak for itself and directed the agency to request the warrant be unsealed.
Millions of people in the U.S. hold some level of clearance that grants them access to classified documents, though far fewer have access to the highest levels. While intelligence agencies can declassify information and release it to the public, the process for doing so is often slow and may require multiple intelligence agencies to sign off.
A list of documents recovered from former President Donald Trump’s Mar-a-Lago resort in Palm Beach, Fla., cites 20 boxes of items, binders of photos and a handwritten note.
Photo:
giorgio viera/Agence France-Presse/Getty Images
A sitting president generally has the authority to unilaterally declassify any material of his or her choosing, but such a privilege is rarely used. Mr. Trump at times did disclose classified information during his time in office, including when he tweeted a surveillance satellite image showing damage at an Iranian space facility.
While a president has the power to declassify documents, federal regulations lay out a process for doing so. Those rules must be followed for a declassification to become legally effective, said Dan Meyer, a national-security lawyer at Tully Rinckey in Washington.
Once Mr. Trump left office on Jan. 20, 2021, he became bound by the same rules as other private citizens, Mr. Meyer said.
—Vivian Salama and Dustin Volz contributed to this article.
Write to Alex Leary at alex.leary@wsj.com, Aruna Viswanatha at Aruna.Viswanatha@wsj.com and Sadie Gurman at sadie.gurman@wsj.com
