Pras Michél
You may recognize the name - the hip-hop producer and rapper was a member of The Fugees in the 90s. He’s also facing up to twenty years in prison after his recent conviction for fraud, money laundering, and election interference. What happened?
Michel, along with a number of celebrities and well-connected Americans, got caught up in Jho Low’s orbit during the 1MBD scandal. The pair met in 2006 when Low was splashing his ill-gotten gains partying in New York and LA, spending profligate sums on nightclubs and parties.
In 2012, Michel established himself as a prominent fundraiser for the Obama campaign, and Low wanted in:
Federal prosecutors say [Low] sidestepped the law by sending more than $21 million to Michél, who then used his own accounts and various “straw donors” to contribute about $2 million to Obama’s reelection effort.
This is wildly illegal, of course, but it did gain Low access to the highest levels of American power, albeit briefly:
Despite his best efforts, the FBI and DOJ opened investigations into the 1MDB funds in 2015, and the pressure on Low ratcheted up. In 2016 the government began to seize assets:
The filings spoke to the lifestyle of astonishing glitz they’d built since 1MDB’s establishment in 2009: in New York, a penthouse in the Time Warner Center and luxury condos in Chelsea and SoHo; in Los Angeles, a boutique hotel and multiple mansions; a Bombardier Global 5000 jet; a material stake in EMI Music Publishing, the rights holder for songs by Drake, Queen and other artists. The rights to The Wolf of Wall Street were also the subject of a seizure complaint.
Low’s attempts to curry favor within the Obama administration had failed, but in 2017 a new target presented itself: the Trump administration and its many corrupt hangers-on, who’d surely be interested in helping an exiled billionaire for the right price.
Michel used his celebrity rolodex to get in touch with a TV producer friend, who introduced him to Elloitt Broidy, a Republican fundraiser with connections to Trump and his administration.
The Chinese government aligned itself with Low and the other beneficiaries of 1MDB, offering to help bail out Malaysia’s government in exchange for future investment deals. They cut deals for billions in assistance, and openly backed the corrupt prime minister, who was ousted in 2018 and is now serving a 12-year prison sentence for graft.
China was so tightly linked to Low - by now an international fugitive - that it empowered him to set up meetings with Michel and other Americans, urging the Trump administration to drop the DOJ probes into 1MBD in exchange for…extradition of a Chinese dissident. Who was it? Guo Wengui, the guy whose yacht Steven Bannon was arrested on, and an indicted criminal currently sitting in a US jail over a litany of financial crimes totaling hundreds of millions.
Basically, China wanted the US to extradite Guo so they could arrest him on home soil. The Trump administration, for reasons unknown, was resisting these appeals. Michel and Broidy, however, told Low they were making progress, and Low kept sending money to Michel through shell companies, tens of millions in total. Some went to Broidy, some went to other people involved, but most of it appears to have stayed in Michel’s accounts.
Then, Steve Wynn got involved for some reason?
Wynn took the matter directly to Trump, bringing up the case at a White House dinner with the president and dropping off a copy of Guo’s passport with Trump’s secretary. Wynn relayed an update to Broidy: “This is with the highest levels of the state department and defense department. They are working on this.”
Steve Wynn is, by all accounts, very rich, so I do not know why he stuck his neck out for the Chinese government on behalf of Jho Low, but there you go.
Michel also enlisted an old friend and current DOJ lawyer to go meet with Chinese officials at their embassy:
That afternoon, [George] Higginbotham walked to the Chinese Embassy off Connecticut Avenue. Michél had given him a number for one of the ambassador’s aides, and Higginbotham called as he approached, asking for directions to the entrance. He was escorted into a conference room decorated with pictures of Chinese leaders meeting US presidents.
[…]
“I’m here on behalf of my private client,” Higginbotham told Cui. “This has nothing to do with the Department of Justice, and I am here in absolutely no official capacity.”
I am not privy to the rules governing Justice Department lawyers walking into the embassy of a geopolitical adversary and discussing the extradition of a dissident with their ambassador (in an absolutely unofficial capacity), but I would hazard a guess it is at least frowned upon.
Surprise! It was:
Higginbotham didn’t know he’d triggered a diplomatic tripwire before setting foot inside the compound—the previous night, police officials from the Chinese Embassy had called their American counterparts to verify his identity. The matter soon landed with the DOJ’s Office of the Inspector General, the agency’s internal watchdog.
Despite all this, Michel and his crack team of weird quasi-celebs convinced the Chinese a deal was all but done, and a delegation showed up at the White House ready to talk:
Soon afterward, according to a DOJ interview with [John] Kelly last year, a Chinese delegation showed up at the White House, claiming they’d been told Trump had agreed to a meeting about Guo’s extradition. Kelly recalled that he blocked them from seeing the president, directing his staff to connect the group with the DOJ and the Department of State, which ultimately denied the request. He said the Chinese seemed stunned, because they were under the impression that the meeting was a “done deal.”
Diplomacy! Somehow - likely due to rank incompetence at the highest levels of the US government - we narrowly avoided Trump agreeing to turn over a fraudster in exchange for dropping an investigation that has led to dozens of indictments, convictions, and billions in seized assets.
Despite the setback, Low continued to pour money into Michel’s accounts. Michel was not only aware he was under FBI investigation, he had actually gone to the FBI to ask when they were going to extradite Guo:
Michél wanted to gather information for Low on the reasons for the government’s resistance, official documents show, and in late June he made a bold gambit: He contacted the FBI directly and asked for a meeting. Agents soon came to see him at a restaurant in Manhattan.
Michél told the agents he’d been working with a friend named “Jon”—a thinly veiled reference to Low—to help China get Guo back. According to an FBI summary of the conversation, he “probed the interviewing agents,” trying to understand whether Guo had some relationship with the bureau that would explain the government’s reluctance to deport him. Although they assured Michél that the FBI didn’t have any arrangement with Guo, he “did not believe the interviewing agents and repeatedly asked if the FBI was meeting” with the businessman. When the agents asked Michél why Chinese officials would be interested in his assistance, he said, “They believe that I can provide intelligence.” He also noted that he’d be reporting back to “Jon” on the discussion and said he’d be interested in keeping in touch about Guo.
Bro. Bro! A thing you probably do not want to do when you are secret quid pro quo deals is call the FBI and give them a hard time about deporting a guy they’ve probably never heard of. While confessing you’re working with an international fugitive and the Chinese government. To ‘provide intelligence’. Lord.
When the FBI caught up with Michel again, having flipped multiple members of the plot, the rapper still insisted he hadn’t done anything wrong. He really believed he was helping both the US government and his buddy Low, who happened to be sending him millions in cash. The feds tried to convince him he should cooperate:
…the government wanted Michél to plead guilty to a felony, forfeit the bulk of his wealth and agree to assist with other prosecutions to avoid a broader indictment.
Michél decided to reject the plea—for a number of reasons, Kenner says. “One of the most significant is that it would make him a felon by admitting to willful acts he didn’t believe were true.”
In late February, Heuchling wrote to another colleague to say that Michél’s then-attorney “pretty much told us he’s not comin back in.”
“Dang,” the colleague replied. “He knows what’s coming, right?”
What came was a trial featuring testimony from Leonardo DiCaprio and former AG Jeff Sessions, a long list of government witnesses who detailed all the criminal activity Michel had got himself up to. He’s awaiting sentencing, facing up to 20 years in federal prison. Low remains on the run, despite many of his co-conspirators and even Goldman Sachs being made to pay for enabling his embezzlement. He’s reportedly in China, which makes sense given, you know, everything.
Money makes people do strange things, like convince yourself the guy everyone says is a thief is not. It’s hardly a surprise the various crooks in the Trump orbit were eager to take bribes to assist a flashy con man (or two), but it’s remarkable just how close the mastermind of 1MDB came to getting the whole thing expunged from the US justice system.
National Parks
America has many beautiful national parks, a system we’ve spent a hundred years building and preserving. If you want to visit some parks, like Montana’s Glacier, you need a vehicle pass, which is free but comes with a two dollar booking fee. Where does that two bucks go?
Booz Allen runs Recreation.gov, the website and app where people book campsites, hikes and permits on U.S. public land. The company has a five-year contract that is up for renewal this year. In its bid for the work, Booz Allen used data provided by the government to estimate that over the first five years of the contract, it would receive $87 million, and a total of about $182 million over 10 years.
That’s right, a consulting firm is making tens of millions of dollars ‘running’ a government website that does things like book vehicle passes for people to go see glaciers before they disappear. America!
The pandemic created a surge in national park visits as people sought outdoor vacation activities. Many parks decided they needed reservation systems to better manage crowds, and the Booz Allen partnership flourished. The company doesn’t keep all of the transaction fees, but how much it does receive is…a trade secret, apparently?
In the invoices obtained by the Journal, the per-transaction amounts paid to Booz Allen were redacted, due to what the government says are trade secrets. Booz Allen has made a similar claim about these amounts in response to the recent suit.
The examples the Journal did find do not paint a pretty picture:
Applying to the lottery for a chance to visit the Wave, which can accommodate 64 people each day, costs $9, whether the application is successful or not.
Of the $9, $5 ultimately goes to Booz Allen and $4 goes to the Bureau of Land Management, which manages the site, a BLM spokesman said.
Recreation.gov users submitted about 130,000 applications for permits to hike the Wave last year, generating about $648,200 for Booz Allen and $518,600 for the BLM, a BLM spokesman says. The BLM also collected about $35,500 in permit fees from successful applicants, he says.
If Booz is making more than the park management orgs on these fees, that is pretty egregious. Booz is being sued, because that’s how we enforce laws here:
The lawsuit filed in January in Virginia by seven outdoor enthusiasts claims the fees deceive visitors into thinking that the money goes directly to aid public lands. The complaint says Booz Allen is charging fees similar to ambiguous entertainment and travel surcharges President Biden labeled “junk fees” in his February State of the Union address.
The company insists their stewardship of the reservation dot gov has added value to the park service, though whether building and running a reservation website is worth tens of millions’ of dollars a year is certainly worth debating. If the government is lacking web designers and engineers to build a booking platform, I know a bunch of them who are currently looking for work.
Carbon Capture
One thing you can do if you are an oil company and are worried that the last hundred years you spent cooking the planet might cause governments to force you to stop extracting oil is spend a bunch of money to assure them that yes, you are committed to helping prevent climate change. You are very worried and will spend some small fraction of your record profits to help the planet.
If you wanted to, say, take advantage of a big green energy funding bill that passed in the US last year, you could build a giant, expensive, elaborate carbon capture facility at your oil drilling site and get the government to cover half the costs:
The company behind this environmental moonshot is Occidental Petroleum Corp. , one of the country’s most successful oil-and-gas producers. It hopes the enterprise will give it license to keep operating as a driller decades into the future.
It is spending more than $1 billion to build the first in a planned fleet of plants using direct-air capture to pull the CO2 out of the air, a budding technology with fuzzy economics. Bolstering the move are generous tax incentives included in the climate package President Biden signed into law last year that cover up to 45% of Occidental’s expected initial costs per metric ton.
The ‘fuzzy economics’ are fuzzy in the sense that they describe technology that hasn’t been proven to work, has never been implemented at this scale, and may come with unpredictable side effects:
Removing CO2 from the atmosphere at this scale has never been done before, and the enterprise comes with abundant commercial and scientific uncertainties. It is unclear what the appetite for carbon removal will be, how much the service will eventually cost or how massive volumes of buried carbon dioxide will affect the subsurface in the long term.
Hell yeah. Sounds great! I am excited our government is going to hand one of the world’s worst polluters $450 million dollars to build a system of fans that may channel CO2 deep into the Earth which may or may not fuck up some subterranean ecosystems. Let’s fuckin go!
The fuzzy economics also include selling the carbon credits from its removal process to other big polluters:
Occidental plans to make money with the CO2 removal plant by selling carbon-dioxide removal credits to companies such as airlines, trucking and marine companies that can’t currently switch to clean energy without breaking their business models. It also plans to turn some of the carbon dioxide into products to sell, including synthetic jet fuel, or use it in the process of pumping what the company calls net-zero oil from its own wells that it hopes to sell at a premium.
I bet this all sounds amazing in an investor deck. Bill Gates would be drooling over these claims. And let’s not allow skeptics to spoil the mood with their doubts and objections:
Many industry experts doubt that direct-air capture can be done economically because the amounts of air that need to be scrubbed are so large. Operating the plants themselves will require massive amounts of energy, which will need to be emission-free to avoid defeating the purpose of the effort, they say.
Occidental executives said it would power the Permian plant with solar energy and additional renewable power from the grid, and it has also looked into potentially powering its plants with mini-nuclear reactors, according to people familiar with the matter. The company also said it is exploring using energy from natural-gas powered plants that capture their own CO2, an early-stages technology in which it has invested.
Why don’t we power the fans with unicorns and fairy dust? Both are unproven, sure, but with enough investment they might be economically viable.
With the billions in green energy grants floating around, it’s a good bet a lot of it will end up at the companies who set our planet alight, provided they hide the matchbook and greenwash their moonshot projects with credible-sounding economic analyses.
Magic: The Gathering
If you are reading this newsletter, you are probably Online enough to be familiar with the trading card game Magic: The Gathering. Unlike other popular fantasy games like D&D which have struggled to find continued financial success, Magic has been a cash cow for its parent company Wizards of the Coast and its corporate daddy Hasbro for years.
Sometimes, when you are running a multibillion dollar corporation, journalists or enthusiasts will get their hands on an unreleased product and leak it - we see it happen all the time with new cell phone tech. A leak of an exciting new product could, if looked at a certain way, be good PR for a company, getting users excited about what’s to come and fueling the hype cycle.
So, when a M:TG YouTuber named Dan Cannon got his hands on some boosters for the upcoming expansion in May, Wizards reacted in a totally chill and normal way and sent Pinktertons to his house:
Within a week, Cannon says, Pinkerton Agents knocked on Cannon’s door and demanded he turn over all the cards from the unreleased set. He had released videos on Wednesday, Thursday, and Friday. The agents arrived on Saturday morning, he says.
[…]
According to Cannon, the agents continued to claim that he was in possession of “stolen property,” and said that if Cannon didn’t hand over the product “immediately” they would escalate the situation to the local law enforcement. “They claimed copyright infringement and said I would face between one and 10 years in jail,” Cannon said. They also allegedly threatened that this incident could result in “up to $200,000 in fines plus all legal fees.”
Cool! When you are running a business that relies on the good will of its fans, it is definitely the right move to send a bunch of goons to a guy’s house and threaten him and his wife with jail time for talking about some trading cards. All extremely good and normal stuff your fans will love to read about:
“A simple email or phone call from Wizards of the Coast and I would have cooperated,” Cannon says. “There was absolutely no need to send such a notorious agency to my house to frighten my wife and threaten us.”
It’s a good reminder that the corporate behemoths who make some of your favorite hobby products are not your friends, and also that the Pinkterton agency still exists for enforcing capital’s more unsavory tasks like trying to shove their way into a YouTuber’s house for the crime of talking about a game he enjoys.
Short Cons
Global News - “A private security and protection company was coordinating the shipment of the $20 million container of gold and other high value items that was reported stolen from Toronto Pearson International Airport last week.”
Daily Mail - “A Rhode Island fugitive who faked his own death and fled to Scotland steamed his glasses up with rage while angrily insisting he is a British man called Arthur Knight.”
Insider - “The presence of the salt boy is classic Gökçe: ridiculous, performative, and all in service of the meat maestro's image. Glitz and showmanship are the lifeblood of his empire.”
Daily Beast - “Pennsylvania mom Libby Leonard had been dead for a year and a half when her Facebook page began attacking another mother.”
NYT - “There isn’t much assistance for people getting out of prison. We get $40 and a one-way bus ticket. Many of us head to the Port Authority in New York City. I say us, because I, too, am in prison.”
NYT - “Mr. Reid’s wrongful arrest appears to be the result of a cascade of technologies — beginning with a bad facial recognition match — that are intended to make policing more effective and efficient but can also make it far too easy to apprehend the wrong person for a crime.”
Know someone thinking of aiding an international fugitive in exchange for millions in stolen funds? Send them this newsletter!