Peter Thiel Insider Picked to Oversee Donald Trump’s Defense Department Transition

Lee Fang
November 28 2016
1:27 p.m.


Trae Stephens, a principal at billionaire Peter Thiel’s venture capital firm Founders Fund, was appointed last week by Donald Trump to help lead the transition effort at the Defense Department.

Thiel, who made a $1,000,000 donation to a pro-Trump Super PAC, is Trump’s highest-profile supporter in Silicon Valley.

At Thiel’s Founder Fund, Stephens “focuses on startups operating in the government space,” according to his official biography. Before that, he worked at another Thiel-backed firm: Palantir, a highly controversial data analysis firm that is currently competing for Defense Department contracts.

“Trae was an early employee at Palantir Technologies, where he led teams focused on growth in intelligence and defense as well as international expansion,” says the biography.

Palantir gained notoriety in 2011 after the hacking collective LulzSec dumped thousands of hacked emails from HBGary Federal, a firm collaborating with Palantir to pitch clients, revealing plans to use Palantir’s data analysis tools on a project to spy on labor unions, journalists, and activist groups on behalf of business interests. The proposal detailed a variety of surveillance techniques, including a PowerPoint presentation calling for the use of malware to steal data from target computers.

Palantir and HBGary Federal denied that the plans were acted upon and said they were merely part of an ongoing discussion, though the hacked emails revealed that the chief executive and board of Palantir signed off on the proposal.

The controversy did not stem the growth of Palantir, which is now reportedly valued at over $20 billion, a valuation that would make Thiel’s stake in the company worth potentially $2 billion.

Last year, another leaked document from Palantir revealed that as of 2013, the firm counted over a dozen federal agencies as clients, including the FBI, NSA, CIA, Special Operations Command, and the Air Force.

Palantir has been engaged in a pitched lobbying battle to win over a $3 billion contract to develop battlefield intelligence systems. In October, Palantir secured a victory in court, allowing them to move forward with the bid. The firm has hired a number of political insiders to influence military contracting decisions, including retired Marine Corps Brig. Gen. Terry Paul.

But no amount of outside lobbying can compare to having a Palantir insider now shaping the entire future of the Defense Department.

Trump's conflicts of interest take White House into uncharted territory

With his children, and not a blind trust, running his company, little prevents the president-elect’s political and business careers from bleeding into each other

Sam Thielman in New York

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When President-elect Donald Trump enters the White House next year he will bring with him potential conflicts of interest across all areas of government that are unprecedented in American history.

Trump, who manages a sprawling, international network of businesses, has thus far refused to put his businesses into a blind trust the way his predecessors in the nation’s highest office have traditionally done. Instead he has said his businesses will be run by his own adult children.

Donald Trump Jr, Trump’s eldest child, has insisted that Trump’s holdings would go into a trust managed by him and his siblings Eric and Ivanka Trump.

“We’re not going to be involved in government,” Trump Jr told ABC’s George Stephanopoulos in September on Good Morning America. “He wants nothing to do with [the company]. He wants to fix this country.”

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Candace Smith  (@CandaceSmith_)
.@realDonaldTrump 3 eldest children + son-in-law are on his Presidential Transition Team Executive Committee: pic.twitter.com/SOXizI8rz7
November 11, 2016

Donald Jr, Eric and Ivanka Trump are all on the president-elect’s transition team executive committee, per ABC’s Candace Smith, as is Trump’s son-in-law Jared Kushner.

But according to regulators who have overseen potential conflicts of interests under two former presidents, Trump’s arrangements were unprecedented and present a host of issues.

This is in no way a blind trust, said Karl Sandstrom, former chairman of the Federal Election Commission (FEC), the regulatory body that oversees campaign finance, under Bill Clinton and George W Bush. “A blind trust is not anywhere near the same. You don’t still have access to the decision being made. That’s why you put assets in and don’t just have someone else manage the company,” he said. Trump’s assets will instead apparently remain united under his company, and operated under his name even if he is not directly in charge.

“Reagan spent some time in the private sector but he certainly wasn’t a CEO,” said Robert Lenhard, also a former FEC chair, appointed by George W Bush. “He wasn’t operating a set of companies like Trump is. Most of our presidents have come out of political careers – Eisenhower’s time out of office was mostly a hiatus between the military and the presidency.”

Trump owns hotels in Chicago, New York City, Las Vegas, Waikiki and, most recently, in Washington DC, just down Pennsylvania Avenue from the White House. As with any hotel chain, the Trump Organization will oversee power, water, maintenance, security, billing and any number of other logistical details that will now essentially be negotiated between the provider and the family of the president.

Abroad, Trump holds properties in Istanbul, where his election was met with satisfaction by that country’s president, Recep Tayyip Erdoğan, as well as Mumbai, Vancouver and Seoul, among many others. With Trump’s children running his businesses, there is also the matter of their bearing his name, and thus the name of the president, anywhere in the world when they arrive to negotiate leases and construction deals.

From his financial filings, the future US leader also appears to be a shareholder or beneficiary of several entities headquartered abroad, among them Excel Venture LLC in the French West Indies, and Caribusiness Investments SRL, based in the Dominican Republic. How Trump’s holdings in those countries will affect US relations with them remains to be seen; both are notable for their use in finance to avoid taxes. Trump has promised to cut the rate for repatriating cash into the US as an incentive for others who, like him, keep taxable funds overseas.

In Azerbaijan, Trump has a real estate project he said was “on hold” during the presidential campaign. His partner in the endeavor was Anar Mammadov, son of the Iranian transportation minister, Ziya Mammadov, who was accused in diplomatic cables released by WikiLeaks in 2010 of laundering money.

In Russia, where Trump’s election has been met with congratulations by President Vladimir Putin, Trump worked closely with the Russian-born American financier Felix H Sater, managing director of the New York-based firm Bayrock LLC. Sater and Bayrock founder Tevfik Arif worked closely with Trump and others in his organization. In a deposition, Trump said that he had discussed “numerous deals all over the world” with Arif, and that Arif had brought potential Russian investors to meet Trump at his office, according to a report in the New York Times.

Bayrock was examined closely during a lawsuit filed by its former finance director, Jody Kriss; the Times said the firm had “occasionally received unexplained infusions of cash from accounts in Kazakhstan and Russia”.

Also in Russia, there are Trump’s ties to Paul Manafort, who ran his campaign from March to August. Manafort, who helped to install Putin ally Viktor Yanukovych as president in Ukraine, was named in a corruption investigation by a Ukrainian authority working with the FBI.

Then there is the matter of the president-elect’s stock portfolio. Trump has holdings in Dakota Access pipeline company Energy Transfer Partners. In his first 100 days, Trump has pledged to remove every impediment to the pipeline, which has been the subject of protests violently suppressed by police in North Dakota. He also owns stock in Facebook, whose CEO Mark Zuckerberg posted that he was “feeling hopeful” on Wednesday, and in Bank of America – he has promised to deregulate the banking industry.

Michael Cohen, Trump’s attorney, defended Trump’s post-election business plans on Thursday. Speaking of Trump’s family, he said: “They’re really intelligent. They’re really qualified. That’s why he really didn’t run in 2012, because they were younger by four years,” he told CNN.

While conflicts of interest may cause scandals for the president, they are unlikely to add to his long list of legal woes. In 1982 the supreme court gave Richard Nixon “absolute immunity” to prosecution for most kinds of crimes committed while in office, setting a precedent for administrations to come. “The president’s absolute immunity is a functionally mandated incident of his unique office, rooted in the constitutional tradition of the separation of powers and supported by the Nation’s history,” wrote Justice Lewis Franklin Powell in the majority opinion, adding that “diversion of his energies by concern with private lawsuits would raise unique risks to the effective functioning of government”.

As checks on that immunity, Powell wrote, “There remains the constitutional remedy of impeachment, as well as the deterrent effects of constant scrutiny by the press and vigilant oversight by Congress. Other incentives to avoid misconduct may include a desire to earn re-election, the need to maintain prestige as an element of Presidential influence, and a President’s traditional concern for his historical stature.”

Those checks and balances are likely to be tested when the business mogul-turned-president takes office. Public officials below the president and vice-president are subject to conflict of interest rules. “The standards of conduct are government-wide with respect to conflicts of interest, and they are to be found in the code of federal regulations, and whether those basic rules are going to apply throughout from the top down,” Sandstrom said. “How do you enforce rules on others that you don’t abide?”

Glenn Greenwald: Trump will have vast powers. He can thank Democrats for them.

Liberals liked executive authority as long as Obama wielded it. Now they've set a precedent.

Liberals are understandably panicked about what Donald Trump can carry out. “We have a president-elect with authoritarian tendencies assuming a presidency that has never been more powerful ,” Franklin Foer wrote this past week in Slate. Trump will command not only a massive nuclear arsenal and the most robust military in history, but also the ability to wage numerous wars in secret and without congressional authorization; a ubiquitous system of electronic surveillance that can reach most forms of human communication and activity; and countless methods for shielding himself from judicial accountability, congressional oversight and the rule of law — exactly what the Constitution was created to prevent. Trump assumes the presidency “at the peak of its imperial powers,” as Foer put it.

Sen. Barack Obama certainly saw it that way when he first ran for president in 2008. Limiting executive-power abuses and protecting civil liberties were central themes of his campaign. The former law professor repeatedly railed against the Bush-Cheney template of vesting the president with unchecked authorities in the name of fighting terrorism or achieving other policy objectives. “This administration also puts forward a false choice between the liberties we cherish and the security we provide,” he said in 2007. Listing an array of controversial Bush-Cheney policies, from warrantless domestic surveillance to due-process-free investigations and imprisonment, he vowed: “We will again set an example for the world that the law is not subject to the whims of stubborn rulers.”

Yet, beginning in his first month in office and continuing through today, Obama not only continued many of the most extreme executive-power policies he once condemned, but in many cases strengthened and extended them. His administration detained terrorism suspects without due process, proposed new frameworks to keep them locked up without trial, targeted thousands of individuals (including a U.S. citizen) for execution by drone, invoked secrecy doctrines to shield torture and eavesdropping programs from judicial review, and covertly expanded the nation’s mass electronic surveillance.

Blinded by the belief that Obama was too benevolent and benign to abuse his office, and drowning in partisan loyalties at the expense of political principles, Democrats consecrated this framework with their acquiescence and, often, their explicit approval. This is the unrestrained set of powers Trump will inherit. The president-elect frightens them, so they are now alarmed. But if they want to know whom to blame, they should look in the mirror.

Obama’s approach to executive power flipped so quickly and diametrically that’s it is impossible to say if he ever believed his campaign-era professions of restraint. As early as May 2009, Jack Goldsmith, a Justice Department official under George W. Bush, celebrated Obama’s abandonment of his promises to rein in these authorities, writing that “the new administration has copied most of the Bush program, has expanded some of it, and has narrowed only a bit.” He added that the “Obama practices will be much closer to late Bush practices than almost anyone expected in January 2009.”

By putting a prettier liberal face on these policies, and transforming them from a symbol of GOP radicalism into one of bipartisan security consensus, the president entrenched them as permanent fixtures of the American presidency. As Goldsmith put it, Obama’s actions were “designed to fortify the bulk of the Bush program for the long-run.”

Liberals vehemently denounced these abuses during the Bush presidency. From 2001 through 2008, Democrats called them the embodiment of tyranny, an existential threat to democracy, a menacing expression of right-wing radicalism. “America’s Constitution is in grave danger,” Al Gore warned in a widely praised 2006 speech on civil liberties. Bush had become “the central threat that the founders sought to nullify in the Constitution, an all-powerful executive, too reminiscent of the king from whom they had broken free.” In one 2007 poll, 57 percent of Democrats said they wanted the Guantanamo Bay prison camp to be closed.

But after Obama took office, many liberals often tolerated — and even praised — his aggressive assertions of executive authority. It is hard to overstate how complete the Democrats’ about-face on these questions was once their own leader controlled the levers of power. According to a 2012 Washington Post-ABC News poll, 53 percent of self-identified liberal Democrats and 67 percent of moderate or conservative ones now supported keeping Guantanamo Bay open. After just three years of the Obama presidency, liberals sanctioned a system that allowed the president to imprison people without any trial or an ounce of due process.

In fact, a new Democratic Party orthodoxy took hold under Obama: the right of a president to detain people, or even assassinate them, without charges or a whiff of judicial oversight. This included even American citizens. “We do not believe that [Anwar] al-Aulaqi’s U.S. citizenship imposes constitutional limitations that would preclude the contemplated lethal action” by the military or the CIA, a Justice Department memo proclaimed in 2010.

Democrats (who had bitterly complained in 2005 about mere eavesdropping without court approval) not only failed to contest this assassination program but ultimately expressed their support for it. “Fully 77 percent of liberal Democrats endorse the use of drones,” according to the write-up of that 2012 Post-ABC poll. Support drops “only somewhat when respondents are asked specifically about targeting American citizens living overseas, as was the case with Anwar al-Awlaki, the Yemeni American killed in September in a drone strike in northern Yemen.”

This same dynamic — Democrats endorsing vast expansions of executive powers — repeated itself time and again, both within the national security realm and outside it. Obama issued numerous signing statements purporting to nullify legal obligations, invoked radical secrecy privileges to avoid lawsuits, eroded long-standing Miranda rights for terrorism suspects, waged a war in Libya even after Congress voted against its authorization and pioneered novel means of using executive orders to circumvent congressional (i.e. democratic) approval in a wide array of domestic policy arenas.

And of course, Obama aggressively expanded the system of mass surveillance, including on U.S. soil, that had been secretly implemented by the National Security Agency after 9/11. Once Edward Snowden showed the world what had been created, many Democrats became the leaders in protecting this spying system from meaningful limits, reform or oversight. When, in the immediate aftermath of the Snowden revelations, a bipartisan coalition of House members headed by Reps. John Conyers (D-Mich.) and Justin Amash (R-Mich.) sought to impose serious limits on the NSA’s domestic spying, the White House turned to then-Minority Leader Nancy Pelosi (D-Calif.) to lead the successful effort to stop them.

Civil liberties advocates and proponents of limited executive authority tried everything they could think of to persuade and cajole Democrats to rediscover their concerns about these abuses and once again become allies in the battle to constrain government power. But those efforts were largely futile. Partisan loyalties easily subordinated any commitment to the principles that they had purported, in the Bush years, to support.

The problem such advocates encountered was the same one they’d faced during the Bush presidency when trying (and failing) to persuade putatively small-government conservatives to oppose these expansions of presidential power: namely, many people are perfectly content to have such authority vested in leaders they trust, and fear them only when a politician from the opposing party wields them.

As such, the tactic of last resort to induce Democrats and liberals to oppose such policies was to ask them to think about how, one day, these powers could be in the hands of someone other than a benevolent, kind-hearted, trustworthy progressive like Barack Obama. Instead, Democrats were urged, imagine that a right-wing authoritarian, or a lawless demagogue, or a petty, vindictive tyrant won the presidency and inherited the framework of unrestrained, unchecked powers that Republicans implemented and Democrats expanded.

That day has arrived. With Trump looming, there is much talk of uniting across ideological and partisan lines to impose meaningful limits on executive authority, and those efforts are justified. But, as progressives were repeatedly warned, a matrix of power that has been defended and legitimized for 15 years by both parties will be very difficult to uproot.

Donald Trump Will Have His Eye on You

Edward Snowden warned us about the abuses of our national security state. Now look who's in charge of it.

By Graham Vyse

Edward Snowden was right. Glenn Greenwald was right. The American Civil Liberties Union was right.

Throughout the Obama administration and indeed long beforehand, critics of the nation’s ever-expanding national security state have been grabbing Americans by the lapels and shaking them, trying to raise consciousness about the dangers. Their efforts too often have been in vain. Now, with president-elect Donald Trump readying for power, those dangers are more immediate than ever.

As Wired worried last month in a piece titled, “Imagine if Donald Trump Controlled the NSA”:

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America has watched Donald Trump praise foreign dictators from Kim Jong Un to Vladimir Putin, vow to appoint a special prosecutor to investigate his opponent, Hillary Clinton, if he’s elected, and call for Russian hackers to dig up Clinton’s emails. “I wish I had that power,” he later said in a campaign speech. “Man, that would be power.” If that statement didn’t sufficiently reveal Trump’s lust for surveillance capabilities, he reportedly listened in on phone calls between staff and guests at his Mar-a-Lago resort in Palm Beach in the mid-2000s.

This expansion intensified under President George W. Bush, with warrantless wiretaps, secret kidnappings, and torture, but much of it continued under President Barack Obama, tainting a generally progressive eight years in the White House. As Greenwald—the investigative journalist who helped Snowden blow the whistle on National Security Agency wrongdoing—wrote at The Intercept on Wednesday:

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Both political parties have joined to construct a frightening and unprecedentedly invasive and destructive system of authoritarian power, accompanied by the unbridled authority vested in the executive branch to use it.

As a result, the president of the United States commands a vast nuclear arsenal that can destroy the planet many times over; the deadliest and most expensive military ever developed in human history; legal authorities that allow him to prosecute numerous secret wars at the same time, imprison people with no due process, and target people (including U.S. citizens) for assassination with no oversight; domestic law enforcement agencies that are constructed to appear and act as standing, para-militarized armies; a sprawling penal state that allows imprisonment far more easily than most Western countries; and a system of electronic surveillance purposely designed to be ubiquitous and limitless, including on U.S. soil.

After the experience of the Bush years, it’s shameful that Democrats didn’t hold Obama to a higher standard on these issues. His unprecedented war on whistleblowers should have been a red flag, and Democrats should have pressured him to make more than modest NSA reforms after Snowden’s disclosures. The surest way to defend civil rights and civil liberties is to structure the government apparatus so that it can’t easily violate them.

In fact, it’s not too late for Democrats to do something about this. The Atlantic’s Conor Friedersdorf, another voice in the wilderness on this issue, has called on lame-duck Obama to act now, and the nonprofit Fight for the Future made three specific requests of the president for his final weeks in office:

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1. Disclose mass surveillance programs, their plans for expansion, and their legal justification. America needs to know what we’re up against.

2. Delete the data stored on Americans, and demolish the physical infrastructure needed to collect this data. If Trump wants to spy on hundreds of millions of Americans, make him build this capacity from scratch.

3. Pardon Edward Snowden, to encourage more whistleblowers to come forward if these systems continue growing out of control. Wired asked former NSA counsel Susan Hennessey what exactly Trump could do as president. She said he could, in the magazine’s words, “rescind the executive actions of President Obama aimed at reforming the NSA after Snowden’s revelations,” and he could also “refocus American spying efforts to take the agency’s eyes off Russia and instead target that country’s adversaries, like Georgia, Ukraine, or even the European Union.”

“We shouldn’t underestimate the importance of the intelligence community’s high level priorities,” Hennessey told Wired, “and the ability of the president to shift them.”

The impending Trump presidency is also setting off alarm bells for civil libertarians, and they’re gearing up to fight back. The ACLU released a report on July on why Trump represents “a one-man constitutional crisis,” and after Trump’s election the group slapped his face on their homepage with the words “SEE YOU IN COURT” (next to a “DONATE” button).

Anthony Romero, the group’s executive director, warned Trump against pursuing his unconstitutional campaign promises, including the Muslim ban, the immigrant deportation force, bringing back torture and “opening up” libel laws to sue the press.

“If you do not reverse course and instead endeavor to make these campaign promises a reality, you will have to contend with the full firepower of the ACLU at every step,” he said in a statement. “Our staff of litigators and activists in every state, thousands of volunteers, and millions of card-carrying supporters are ready to fight against any encroachment on our cherished freedoms and rights.”
The question is whether it will be enough.

“Broadly speaking,” Hennessey told Wired, “the only way to tyrant-proof the White House is to not elect a tyrant.”

All available evidence suggests it’s too late for that.