Matt McDaniel

8 minute read

Here are the four things you need to know before your coffee gets cold, the Valentine’s Day, 2017 edition:

 

Flynn Flop

The big news of the day is the resignation of National Security Adviser and retired Lieutenant General Michael Flynn following revelations that he may not have been entirely truthful with the President and Vice President about conversations he had with Russian government officials following the election. General Flynn, a lightning rod for criticism from both the hawks on the right and anti-Russian forces on the left, had been a close adviser of candidate Donald Trump. His close relationship with Russia was seen by allies of Flynn to be an asset to pursuing peaceful resolution of conflicts and a better relationship between the United States and Russia. However, this was also seen by opponents of both General Flynn and Mr. Trump as providing too much access to the Russian government and compromising national security.

There was a contention from anti-Flynn pundits that Flynn, in talking with the Russian government before Mr. Trump was inaugurated, had violated a centuries-old law called the Logan Act which would seem to prohibit ordinary citizens from negotiating with foreign powers. This was a non-starter. Not only was the alleged conversation taking place after the election, but it was also between the incoming national security adviser and his counterparts. We would certainly expect a conversation of this type to take place to preserve continuity in foreign relations.

The problem occurred when Flynn decided to, apparently, mis-remember (lie) to the Vice President about the nature of the calls with Russia. The calls came right after President Obama had slapped new sanctions on Moscow and expelled Russian diplomats/spies. Obviously, the optics of the call were bad enough. However, Flynn had, apparently, assured the Administration that the calls were vanilla, run-of-the-mill greetings and setting up calls between the President-Elect and President Putin.

The problem for General Flynn was that the United States’ clandestine services, whether the FBI, CIA, or NSA, were apparently listening in on his calls. This isn’t terribly surprising given that it was a call between a high ranking member of the Russian government and the incoming national security adviser. If anything, General Flynn should have been aware of the call. While, again, even talking about sanctions relief would not have been illegal, it would have been terrible optics for the incoming White House already seen as being too friendly towards Moscow.

Regardless, perhaps it was ego or perhaps it was embarrassment, General Flynn decided to tell the Vice President and other members of the Administration that the calls were not about sanctions relief for Russia. The Vice President and the White House Press Secretary both went out as faces of the Administration and vouched for General Flynn’s side of the story. Unfortunately, as it turns out, one of the clandestine services had a transcript of the call (or something like it), and Flynn had to backtrack his assurances. This, obviously, made the Vice President and other members of the Administration look foolish.

What became abundantly clear in the past 24 hours was that Flynn’s time in the White House was coming to a rapid end. The President was caught in a bind because of the situation: if he kept Flynn, it would be a constant stain on his foreign policy dealings and if he canned Flynn, it would be an apparent mark against the President’s judgment. In the end, Flynn’s resignation was accepted, much to the glee of Flynn’s adversaries in the press and both Parties.

 

New, New National Security Adviser

General Flynn’s departure as National Security Adviser leaves a vacuum that we can anticipate the President to immediately move to fill. The position does not require Senate confirmation. Currently, retired Lieutenant General Keith Kellogg is the interim National Security Adviser. Prior to being temporarily elevated, Kellogg has been the Chief of Staff of the National Security Council.

Along with General Kellogg, the Administration is considering retired CIA Director and four-star general David Petraeus and retired Vice Admiral Robert Harward for the position.

General Kellogg, before joining the Trump Administration, was in charge of the provisional government of Iraq following the toppling of Saddam Hussein in 2003. Following his term in the military, Kellogg led a technology defense contracting firm.

Admiral Harward was Deputy Commander of the United States Central Command (CENTCOM) under then-Commander James Mattis (who has been confirmed as the Secretary of Defense in the Trump Administration). Harward is a Navy SEAL and served on President Bush’s National Security Council and the National Counterterrorism Center. Following his service, he took an executive position with Lockheed Martin.

General David Petraeus is the best-known on the shortlist to replace General Flynn. Petraeus was commander of CENTCOM and led forces in both Iraq and Afghanistan. He was also Director of the CIA until it came to light that he had mishandled classified information with his biographer-turned-mistress. He took a plea and was given probation. It’s important to note that his biographer did have clearance, but apparently not for the information she was given. Petraeus was rumored to be on Mr. Trump’s shortlist for several positions including Secretary of Defense and Secretary of Homeland Security. There has been some criticism from the left that Petraeus’ mishandling of information should be a bar to his future consideration for sensitive positions.

The easy choice for the Administration would be to confirm General Kellogg in the role and move forward. Only 25 days into governing, it would provide a seamless transition and help the fledgling Administration move beyond its first crisis. However, General Petraeus would bring a wealth of information and contacts (especially with the CIA with whom the President has not had the smoothest relationship). Expect the decision imminently.

 

Palace Intrigue

The resignation of General Flynn as National Security Adviser shed some light on the allegations of factionalism and palace intrigue taking place in the West Wing. The joke is, for almost any political office, that if there are members of the staff who have to say that “things are fine,” then things are most assuredly not fine.

There are allegations in the press, incessantly, of leaks from “top sources.” Most of these have proven to be falsehoods. While this hasn’t stopped the political press from gleefully rushing to print with allegations of scandal, they’ve seemed, more-likely-than-not, to be the taboo “fake news.” However, when “top sources” are rushing to spill their guts to reporters, even when they’re wrong, it belies a bit of a problem for the Administration.

Some of the palace intrigue was confirmed yesterday in the Flynn resignation. In short, the allegations are that there is rampant factionalism within the upper-echelon of the White House with competing groups trying to sway the President to adopt certain policies and ideas. While stories and anecdotes differ, it’s something like this: establishment (Priebus) versus populist (Bannon) and then the Communications Team (Spicer) versus Talkers (Conway). There are a whole host of other allegations, but, in the Flynn drama, the Priebus-Pence-Spicer wing overcame the Bannon-Flynn-Conway wing in a very public way.

White House senior counselor KellyAnne Conway had come out in the afternoon, yesterday, with a statement that the President retained full confidence in General Flynn. Less than two hours later, the Press Secretary, who speaks for the Administration, was out with a statement saying that the President was “evaluating the situation.” Note, when the President went from “full confidence” to “evaluating the situation,” you could be sure that General Flynn’s resignation was going to be accepted.

The public drama did seem to be a repudiation of KellyAnne Conway who has had several, high-profile, unforced errors in the nascent days of the Administration (“alternative facts,” Buy Ivanka, Bowling Green Massacre, etc.). The events of yesterday show that either the President is telling different people different things about his decision-making or that KellyAnne is not part of the President’s inner-circle deliberating on important matters. There’s also the possibility that KellyAnne Conway was simply coordinating with the President to float a trial balloon about how keeping Flynn would be received by the press, but it seems that this reading of the events isn’t supported by the timing.

It’s important not to impute significance to everything that people do in the White House, but the apparent lack of message control could, adequately, be explained by compartmentalization of information at the top of the Administration and a struggle for power. If, and it’s important to stress that word, reports are true, then the “Bannon Group” has lost a big battle with Flynn’s departure and we would expect to see a more establishment-turn for the President and his team.

 

Money Matters

Janet Yellen, Chair of the Federal Reserve, will testify before Congress today on the current economic outlook for the country. This is a fairly common practice, but it is the first since Mr. Trump has been in office. The policies adopted by the Federal Reserve are still holdovers of the Obama Administration and have the hallmarks of attempting to rebound from the financial crisis in 2008. The President will have a few positions on the Federal Reserve Board to fill in his term and will have the chance to replace Yellen in 2018. Currently, the Fed operates with almost complete autonomy and has not been audited, despite pressure from Senator Rand Paul and others.

It is also the first day on the job for Steven Mnuchin, the newly-minted (get it?!) Treasury Secretary. He will likely set about regulatory reforms that the President has noted to be one of his top priorities for the Treasury.

 

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Of course, there are more things going on in the world, but these should be enough to get your day started.