Top Trump Donor Agreed to Pay Michael Cohen $10 Million for Nuclear Project Push

Consulting deal with Franklin L. Haney could have been among the most lucrative struck by president’s then-personal attorney

A major donor to President Trump agreed to pay $10 million to the president’s then-personal attorney if he successfully helped obtain funding for a nuclear-power project, including a $5 billion loan from the U.S. government, according to people familiar with the matter.

The donor, Franklin L. Haney, gave the contract to Trump attorney Michael Cohen in early April to assist his efforts to complete a pair of unfinished nuclear reactors in Alabama, known as the Bellefonte Nuclear Power Plant, these people said.

.. Authorities are investigating whether Mr. Cohen engaged in unregistered lobbying in connection with his consulting work for corporate clients

.. Mr. Cohen made several calls to officials at the Energy Department in the spring to inquire about the loan guarantee process, including what could be done to speed it up

.. James Thurber, a professor of government at American University, said success fees are “outside the ethical norms” among Washington lobbyists and are frowned upon.

Century-old court rulings deemed fees contingent on lobbyists obtaining public funds or killing legislation unenforceable and counter to public policy, saying they encouraged corruption, he said. Several lobbyists contacted by the Journal said $10 million was an unheard-of sum to pay a consultant for government-related work.

.. Mr. Cohen’s other consulting clients, including AT&T Inc. and Novartis AG , the Journal has previously reported, citing people familiar with the matter. Those companies said they paid Mr. Cohen a total of $1.8 million since Mr. Trump took office for his insights into the administration. Both have said he didn’t do any substantial work for them.

The Collapse of Complex Business Models

Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

.. In the mid-90s, I got a call from some friends at ATT, asking me to help them research the nascent web-hosting business. They thought ATT’s famous “five 9’s” reliability (services that work 99.999% of the time) would be valuable, but they couldn’t figure out how $20 a month, then the going rate, could cover the costs for good web hosting, much less leave a profit.

I started describing the web hosting I’d used, including the process of developing web sites locally, uploading them to the server, and then checking to see if anything had broken.

“But if you don’t have a staging server, you’d be changing things on the live site!” They explained this to me in the tone you’d use to explain to a small child why you don’t want to drink bleach. “Oh yeah, it was horrible”, I said. “Sometimes the servers would crash, and we’d just have to re-boot and start from scratch.” There was a long silence on the other end, the silence peculiar to conference calls when an entire group stops to think.

The ATT guys had correctly understood that the income from $20-a-month customers wouldn’t pay for good web hosting. What they hadn’t understood, were in fact professionally incapable of understanding, was that the industry solution, circa 1996, was to offer hosting that wasn’t very good.

This, for the ATT guys, wasn’t depressing so much as confusing. We finished up the call, and it was polite enough, but it was perfectly clear that there wasn’t going to be a consulting gig out of it, because it wasn’t a market they could get into, not because they didn’t want to, but because they couldn’t.

.. The web hosting business, because it followed the “Simplicity first, quality later” model, didn’t just present a new market, it required new cultural imperatives.

.. “If you want something to be 10 times cheaper, take out 90% of the materials.” Making media is like that now except, for “materials”, substitute “labor.”

“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”

… Bureaucracies temporarily suspend the Second Law of Thermodynamics. In a bureaucracy, it’s easier to make a process more complex than to make it simpler, and easier to create a new burden than kill an old one.

In spring of 2007, the web video comedy In the Motherhood made the move to TV. In the Motherhood started online as a series of short videos, with viewers contributing funny stories from their own lives and voting on their favorites. This tactic generated good ideas at low cost as well as endearing the show to its viewers; the show’s tag line was “By Moms, For Moms, About Moms.”

.. Once the show moved to television, the Writers Guild of America got involved. They were OK with For and About Moms, but By Moms violated Guild rules. The producers tried to negotiate, to no avail, so the idea of audience engagement was canned

.. The most watched minute of video made in the last five years shows baby Charlie biting his brother’s finger. (Twice!) That minute has been watched by more people than the viewership of American Idol, Dancing With The Stars, and the Superbowl combined. (174 million views and counting.)

.. “Charlie Bit My Finger” was made by amateurs, in one take, with a lousy camera. No professionals were involved in selecting or editing or distributing it. Not one dime changed hands anywhere between creator, host, and viewers.

.. it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

Google’s true origin partly lies in CIA and NSA research grants for mass surveillance

Two decades ago, the US intelligence community worked closely with Silicon Valley in an effort to track citizens in cyberspace. And Google is at the heart of that origin story. Some of the research that led to Google’s ambitious creation was funded and coordinated by a research group established by the intelligence community to find ways to track individuals and groups online.

The intelligence community hoped that the nation’s leading computer scientists could take non-classified information and user data, combine it with what would become known as the internet, and begin to create for-profit, commercial enterprises to suit the needs of both the intelligence community and the public. They hoped to direct the supercomputing revolution from the start in order to make sense of what millions of human beings did inside this digital information network. That collaboration has made a comprehensive public-private mass surveillance state possible today.

.. It is a somewhat different creation story than the one the public has heard, and explains what Google cofounders Sergey Brin and Larry Page set out to build, and why.

.. The intelligence community wanted to shape Silicon Valley’s supercomputing efforts at their inception so they would be useful for both military and homeland security purposes. Could this supercomputing network, which would become capable of storing terabytes of information, make intelligent sense of the digital trail that human beings leave behind?

.. the Central Intelligence Agency (CIA) and the National Security Agency (NSA) had come to realize that their future was likely to be profoundly shaped outside the government. It was at a time when military and intelligence budgets within the Clinton administration were in jeopardy, and the private sector had vast resources at their disposal. If the intelligence community wanted to conduct mass surveillance for national security purposes, it would require cooperation between the government and the emerging supercomputing companies.

.. To do this, they began reaching out to the scientists at American universities

.. There was already a long history of collaboration between America’s best scientists and the intelligence community, from the creation of the atomic bomb and satellite technology to efforts to put a man on the moon.

.. Silicon Valley was no different. By the mid 1990s, the intelligence community was seeding funding to the most promising supercomputing efforts across academia, guiding the creation of efforts to make massive amounts of information useful for both the private sector as well as the intelligence community.
They funded these computer scientists through an unclassified, highly compartmentalized program that was managed for the CIA and the NSA by large military and intelligence contractors. It was called the Massive Digital Data Systems (MDDS) project.

.. MDDS was introduced to several dozen leading computer scientists at Stanford, CalTech, MIT, Carnegie Mellon, Harvard, and others in a white paper that described what the CIA, NSA, DARPA, and other agencies hoped to achieve.

.. the program’s stated aim was to provide more than a dozen grants of several million dollars each to advance this research concept. The grants were to be directed largely through the NSF so that the most promising, successful efforts could be captured as intellectual property and form the basis of companies attracting investments from Silicon Valley.

.. Today, the NSF provides nearly 90% of all federal funding for university-based computer-science research.

.. The research arms of the CIA and NSA hoped that the best computer-science minds in academia could identify what they called “birds of a feather:” Just as geese fly together in large V shapes, or flocks of sparrows make sudden movements together in harmony, they predicted that like-minded groups of humans would move together online.

.. Their research aim was to track digital fingerprints inside the rapidly expanding global information network, which was then known as the World Wide Web. Could an entire world of digital information be organized so that the requests humans made inside such a network be tracked and sorted? Could their queries be linked and ranked in order of importance? Could “birds of a feather” be identified inside this sea of information so that communities and groups could be tracked in an organized way?

.. The primary objective of this grant was “query optimization of very complex queries that are described using the ‘query flocks’ approach.” A second grant—the DARPA-NSF grant most closely associated with Google’s origin—was part of a coordinated effort to build a massive digital library using the internet as its backbone.

.. Human beings and like-minded groups who might pose a threat to national security can be uniquely identified online before they do harm. This explains why the intelligence community found Brin’s and Page’s research efforts so appealing

.. The two intelligence-community managers charged with leading the program met regularly with Brin as his research progressed, and he was an author on several other research papers that resulted from this MDDS grant before he and Page left to form Google.

The grants allowed Brin and Page to do their work and contributed to their breakthroughs in web-page ranking and tracking user queries. Brin didn’t work for the intelligence community—or for anyone else. Google had not yet been incorporated. He was just a Stanford researcher taking advantage of the grant provided by the NSA and CIA through the unclassified MDDS program.

.. The MDDS research effort has never been part of Google’s origin story, even though the principal investigator for the MDDS grant specifically named Google as directly resulting from their research: “Its core technology, which allows it to find pages far more accurately than other search engines, was partially supported by this grant,” he wrote. In a published research paper that includes some of Brin’s pivotal work, the authors also reference the NSF grant that was created by the MDDS program.

NSF likewise only references the digital libraries grant, not the MDDS grant as well, in its own history of Google’s origin.

.. But the grant from the intelligence community’s MDDS program—specifically designed for the breakthrough that Google was built upon—has faded into obscurity.

Google has said in the past that it was not funded or created by the CIA. For instance, when stories circulated in 2006 that Google had received funding from the intelligence community for years to assist in counter-terrorism efforts, the company told Wired magazine founder John Battelle, “The statements related to Google are completely untrue.”

Did the CIA directly fund the work of Brin and Page, and therefore create Google? No. But were Brin and Page researching precisely what the NSA, the CIA, and the intelligence community hoped for, assisted by their grants? Absolutely.

.. Brin’s breakthrough research on page ranking by tracking user queries and linking them to the many searches conducted—essentially identifying “birds of a feather”—was largely the aim of the intelligence community’s MDDS program. And Google succeeded beyond their wildest dreams.

.. most people still don’t understand the degree to which the intelligence community relies on the world’s biggest science and tech companies for its counter-terrorism and national-security work.

.. in the most recent reporting period between 2016 and 2017, local, state and federal government authorities seeking information related to national security, counter-terrorism or criminal concerns issued more than 260,000 subpoenas, court orders, warrants, and other legal requests to Verizon, more than 250,000 such requests to AT&T, and nearly 24,000 subpoenas, search warrants, or court orders to Google. 

.. the Patriot Act legal process has now become so routinized that the companies each have a group of employees who simply take care of the stream of requests.

.. In this way, the collaboration between the intelligence community and big, commercial science and tech companies has been wildly successful. When national security agencies need to identify and track people and groups, they know where to turn – and do so frequently. That was the goal in the beginning. It has succeeded perhaps more than anyone could have imagined at the time.

How two decisions in Washington could turn AT&T into a uniquely powerful company

The future of AT&T could be shaped by two big decisions in Washington this week, with the Justice Department suing the telecom giant on Monday to block its $85 billion purchase of Time Warner and the Federal Communications Commission announcing a plan Tuesday to roll back net neutrality rules, handing a big win to Internet providers.

.. If it wins its antitrust case against the DOJ, AT&T could buy Time Warner without offering any concessions to the government. It could then benefit from the repeal of the government’s net neutrality rules, allowing it to leverage Time Warner’s massive library of shows, television stations and films like few other companies.

  • Some, such as May, argued that the loosened regulations would allow AT&T to market Time Warner’s content in new and different ways that could theoretically help Americans.
  • Others argue that the combination of a bigger AT&T with a more relaxed regulatory environment could simply increase the firm’s incentives to harm competitors in the marketplace.

.. “One can’t imagine that there are any broadband providers who would be eager to test the limits of what is now allowable under this regulatory regime, given the enormous risk of popular and/or regulatory or legislative backlash,” said Moffett.

.. the combined company could use its newfound control over HBO, CNN and TNT

.. AT&T’s chief executive Randall Stephenson has said that the goal of purchasing Time Warner is to build an advertising behemoth that can compete with Google and Facebook.

.. “The problem from the point of view of DOJ is that if the deal is approved, it will be very hard to police any commitment

.. “The record of such commitments is very poor. The companies do whatever they want. And that’s well understood by everybody.”