The Value of Winning?

In the midst of a move to Albuquerque, I’ve been reading the Report on the Investigation into Russian Interference in the 2016 Presidential Election, or the “Mueller Report.” I have many more household boxes to unpack, and likewise, much more of the Report to “unpack” as I begin Volume 2.  But parts of Volume 1, I found entertaining. A section that is particularly interesting is Section V, C. 3, related to campaign-finance law. It explains why Mueller’s Office did not recommend that members of the Trump campaign be charged with committing a crime as a result of the June 2016 Trump Tower meeting, and the argument was based on a subject of particular interest to me: intangible assets. Intangible assets include things of value like knowledge and information and are commonly referred to as “intellectual capital,” whereas tangible assets include cash, buildings, and other “hard” assets. Before semi-retiring, I was an Intellectual Capital Manager for a major chemical company. I’ve written business articles (in IAM Magazine), a book chapter (in Cultures of Copyright), a blog (Long Shadows) and even a fiction novel (Incense Rising) related to intangible assets, exploring business, academic, or personal issues. So, I found the Mueller Report interesting because of its political application, and I found myself reading this section (Volume 1-V. C. 3.) several times in order to understand the logic and basis for the conclusion, which I had found at first to be surprising.

The reason why members of the Trump campaign could not be found guilty of campaign-finance violations as a result of their interactions with the Russians came down to the government’s likely inability to prove beyond any reasonable doubt not only the existence of specific knowledge, but also the value of the information gained. The existence of and the value of intangible assets like knowledge and information are problematic for any organization. In a corporate environment, our intangible assets were often highly valuable, yet many times difficult to identify and quantify. What exactly did we know? What value was it to us and to our partners? And what value might it have to others, particularly the competition? Coming from a corporate and later an academic environment, I had never considered the relevance of these questions to campaign-finance law. Mueller’s Office has!

According to the Report, the Office looked at two key events. One was the June 9, 2016, Trump Tower meeting. The other will remain unknown for the present because of redaction or “Harm to Ongoing Matter.” In the Report, Volume 1 Section V. C. 3.a. (p. 184) Overview of Governing Law  explains how “federal campaign-finance law broadly prohibits foreign nationals from making contributions, donations, expenditures, or other disbursements in connection with federal, state, or local candidate elections and prohibits anyone from soliciting, accepting, or receiving such contributions or donations.” It goes on to say that “contributions” can include “anything of value.” Violations fall into two categories: misdemeanors (>$2000 but <$25,000) and felonies (>$25,000). For someone to be convicted of violating campaign-finance law related to foreign influence, prosecutors would have to show that the defendant knew the law and willfully violated it, and that the value of the contribution was at least $2000.

Section V. C. 3b explains the relevance of the Trump Tower meeting. The events unfolded in this way. Donald Trump, Jr., received an email stating Russian representatives could provide documents and information that would be damaging to Hillary Clinton. Don Jr. replied, “if it’s what you say, I love it.” The report notes that the combination of the communications and the attendance of high-level campaign representatives, Donald Trump Jr., Paul Manafort, and Jared Kushner, infers that they expected to receive valuable information that could help Donald Trump win the election. Yet, given these circumstances, Mueller’s team concluded that government prosecutors would not be likely to prove “beyond a reasonable doubt” that Don Jr., Manafort, and Kushner knowingly and willfully did something that was against the law, and that the value of what was being offered was high enough to constitute a criminal violation.

At this point in my reading of the Report, I admit that I was shocked. They—including the campaign manager—didn’t know campaign-finance law? And the value of damaging information on Hillary Clinton in the middle of a U.S. presidential race can’t be proven to be higher than $2000? Really? Incredible. So here are some key points from the Mueller team’s arguments:

• Contributions under the campaign-finance law clearly include not only monetary contributions, but also any other thing of value, including information.
• Prior cases have considered a “thing of value” to include both tangibles and intangibles.
• Candidate opposition research falls under a contribution that is banned by campaign-finance law, and it could likely have a value higher than a contribution of money, but no prior ruling has addressed this situation. The consequences to general campaign-finance law and First Amendment rights of a ruling in this area complicate the situation (p. 187).
• “The Office would encounter difficulty establishing beyond a reasonable doubt that the promised documents and information exceeds the $2,000 threshold for a criminal violation, as well as the $25,000 threshold for a felony punishment.”
• The basis for the previous bullet is that the typical methods of valuing non-monetary contributions would be “unavailable or ineffective,” and “it appears that the information ultimately delivered in the meeting was not valuable.”

Based on the Report’s conclusions, the intangible nature of “dirt” on Hillary Clinton helped Don Jr., Kushner, and Manafort to avoid prosecution. Their most valuable asset may have been their ignorance of campaign-finance law or their lack of evidence that they knew the law. If knowledge can be an asset, then apparently the lack of knowledge can also be an asset—although I’ve always thought that “ignorance of the law is no excuse,” but I’m not an attorney. Apparently, this defense works in some instances. And secondly, the likely inability of prosecutors to establish a factual valuation for the information obtained means that no criminal charges will be brought specific to the Trump Tower meeting.

Interestingly, the next subsection of the report (3c) is titled, “Application to [Harm to Ongoing Matter] and is almost completely redacted. If it relates to Trump’s alleged payments to two porn stars, I suspect that prosecution may be more likely, considering 1) the secretive nature of the payments  surely implies willful knowledge that they were doing something wrong, and 2) if a money transaction occurred, there is a hard dollar value for that information. Only time will tell on the [Harm to Ongoing Matter] subject.

For me, the Volume 1, Section V. C. 3. provided a political example of how intellectual capital is highly context dependent. What value might Hillary Clinton’s campaign have placed on not having emails or other damaging information made public? I’m pretty sure that it would be more than $2000! And I don’t think it’s a stretch to speculate that her campaign managers would have had a harder time arguing that they didn’t know campaign finance law.