RUTHFULLY YOURS

She is relentlessly described as a “Russian lawyer” in media reporting. It should not escape our notice, then, that Natalia Veselnitskaya is not an American lawyer. She is not admitted to practice law in the United States.

So why was she admitted into the United States when she was not qualified to do the job that was the rationale for her admission?

We’ll get to that. To cut to the chase, however, it had nothing to do with the Trump campaign.

Veselnitskaya’s arrival at Trump Tower on June 9, 2016, after being heralded in Donald Trump Jr.’s e-mails as a Putin-regime emissary bearing dirt on Hillary Clinton, is the first concrete indication of collusion between the Trump campaign and the Russian government. Collusion in what remains to be seen, there still being no evidence of the collusion scenario initially alleged: Trump’s complicity in Russia’s “cyberespionage” — the hacking by which Putin attempted to influence the 2016 election (and succeeded in paralyzing the U.S. government in the election’s aftermath).

This being politics, the Trump camp has attempted to deflect attention from the Trump Tower meeting by pointing out that it was the Obama administration that enabled Veselnitskaya’s admission into the country. At a press conference in Paris last week, President Trump himself claimed that Veselnitskaya’s entry had been “approved by Attorney General [Loretta] Lynch.”

Of course, the question of why Obama-administration officials permitted Veselnitskaya to enter is likely to be of less consequence than what Veselnitskaya did once she got here. But it is important. Obviously, the Trump camp is intimating that the June 9 meeting was a set-up and that the Obama administration may have been in on it.

I happen to think there is a good chance the Trump campaign was being played. If so, though, the playing was done by Vladimir Putin.

Veselnitskaya probably should not have been allowed into the country, though that is one of those criticisms conveniently offered in 20-20 hindsight. Either way, the Justice Department had nothing to do with Veselnitskaya’s meeting with the Trump campaign. It is unlikely that top Obama officials knew about it, either, much less that they consciously facilitated it.

I suspect the Justice Department — specifically, the U.S. attorney’s office in Manhattan — reluctantly green-lighted Veselnitskaya’s entry to appease the court in a hotly disputed case with significant foreign-relations ramifications. Prosecutors may have been wrong to do this — it’s a judgment call — but it was clearly unrelated to the Trump Tower meeting, which happened months later under a different visa authorization.

In 2013, the Justice Department filed an asset-forfeiture lawsuit that was sensitive because it focused on Russian corruption. It arose out of a $230 million fraud orchestrated by the Putin regime, and involved the detention, torture, and murder of Sergei Magnitsky, the Russian investigator who exposed the scheme. (I will have more to say about the case in a subsequent column.) At the center of the case was Veselnitskaya’s client, Denis Katsyv.

He is the son of Pyotr Katsyv, a powerful Putin crony — similar to Aras Agalarov, the billionaire Russian real-estate magnate who, according to Trump Jr.’s e-mails, arranged Veselnitskaya’s Trump Tower meeting. Pyotr Katsyv was a powerful transportation minister for many years, and he is now vice president of the regime-owned national railroad system. As related in this useful New York Times profile of Veselnitskaya, her rise in Russia owes to the ties she forged with Katsyv. I do not buy the Kremlin’s claim that Putin had never heard of Veselnitskaya prior to the Trump Jr. controversy, but his chum Katsyv appears to be her patron in any event.

Denis Katsyv owns a Cyprus-based investment company called Prevezon Holdings Ltd. The company was the main defendant in the Justice Department’s lawsuit, in conjunction with which Justice froze about $14 million in property. Katsyv was not a defendant personally (asset-forfeiture cases technically target the asset, not its owner). But the case was highly significant to him and to Russia.

An international litigation can be tricky because our government and its courts often lack jurisdiction to compel the testimony of critical foreign witnesses. In order to get the cooperation necessary to move the case along, accommodations must be made, especially when the foreign government involved is not being helpful. In this instance, Russia was downright hostile.

It was important to the Prevezon case that Denis Katsyv be deposed in New York. Trying to do it in Moscow was out of the question, since lawyers, investigators, and witnesses in probes of Russian activities have a habit of ending up imprisoned, defenestrated, or dead there. Evidently, Katsyv was willing to be deposed and otherwise cooperate, or at least feign cooperation. If he was going to do that, though, he had a condition: He wanted the assistance of his Russian lawyer, Natalia Veselnitskaya, in addition to the top-flight American law firm, BakerHostetler, that was formally representing his company in the case.

In 2015, Veselnitskaya attempted to get a visa to come to the United States. The State Department denied her, and it is not farfetched to believe that one factor in the denial was a suspicion that she is a Putin-regime operative. Subsequently, however, the U.S. attorney’s office in Manhattan arranged for Veselnitskaya to be admitted through a rarely used immigration-law provision that allows aliens to be “paroled in” if they will perform some service of extraordinary benefit to our country.

It appears that this was done under pressure from the court. Indeed, according to a Daily Beast report, the Justice Department was even directed to reimburse Veselnitskaya’s expenses. The parole lasted just three months, from October 2015 through early January 2016 — meaning that the Justice Department parole had nothing to do with the Veselnitskaya–Trump Jr. meeting six months after the parole ended.

Readers know I am no Loretta Lynch fan, but Trump-camp suggestions that the then–attorney general had a meaningful role in Veselnitskaya’s entry are off base. The timeline does not work. Plus, while unusual, similar immigration complications do come up from time to time, and district U.S. attorneys’ offices generally resolve them without the personal involvement of the attorney general (even though the trial prosecutors may invoke “the attorney general,” “the Justice Department,” or “the United States” in exercising their legal authority).

Should the U.S. attorney’s office have made this accommodation for Katsyv and Veselnitskaya? Probably not.

By her own account, Veselnitskaya is not admitted to practice law in the United States. In a January 2015 declaration filed in the asset-forfeiture case, she claimed to have graduated from the Moscow State Legal Academy in 1998, and then to have worked as a regime prosecutor for a few years before moving “into private practice,” a laughable term as applied to Russia, where Putin’s circle of oligarchs runs the private sector . . . and the country.

Veselnitskaya purports to have extensive experience in Russian criminal, corporate, and property law. In the declaration, however, she did not even pretend to familiarity with American law, much less with the complexities of federal money-laundering and asset-forfeiture litigation. She did not attend an American law school. She is not a member of any state bar, let alone the bar of the United States District Court for the Southern District of New York. She would not have been eligible to appear in court as counsel for Prevezon Holdings, the Katsyv company in the case. And Prevezon, as already noted, was more than adequately represented by the BakerHostetler law firm.

Moreover, as we’ve also seen, the parole provision is supposed to be reserved for aliens whose presence will be beneficial to our country. Whatever positive effect Veselnitskaya may have portended for moving the case along was outweighed by the facts that (a) she was not qualified to perform the function that was the rationale for her admission; (b) there was reason to believe she was an agent of a hostile government that obstructed the investigation that led to the case; and (c) she was the spearhead of a Kremlin-backed lobbying campaign against the Magnitsky Act — the human-rights provision Congress enacted in response to Russia’s imprisonment, torture, and murder of Sergei Magnitsky.

When Veselnitskaya’s parole ended in January 2016, the U.S. attorney’s office refused to extend it. In explaining this position to the court, prosecutors recounted that she and others in Katsyv’s defense team had run up $50,000 in expenses in connection with his deposition. Veselnitskaya did not even attend the deposition, though she did bill U.S. taxpayers nearly $2,000 for a two-night stay at the Plaza the weekend after the deposition was concluded.

In light of Donald Trump Jr.’s changing story about meeting with a Russian “crown prosecutor” promising to give him damaging information about Hillary Clinton during the 2016 presidential campaign, many Democrat strategists and their liberal counterparts on Capitol Hill are once again overreacting. In the past week alone we’ve heard calls for treason charges, and one Democrat in the House has introduced an article of impeachment.

Because of the hysterical reaction, lets take a step back and look at the bigger picture. Were Trump campaign officials the only ones engaging in questionable behavior regarding Russia? Hardly. The Clintons are in the same category.
First, lets start with former Secretary of State Hillary Clinton’s use of a private email server in hostile countries around the world. After all, she repeatedly bragged about the miles she traveled on the campaign trail.

While FBI investigators say there is no evidence hackers infiltrated the server, they also admit good hackers could have gotten in, taken important information and left without a trail. Further, because Clinton failed to turn over all 13 devices she used to access her private server (after claiming she only used one), the FBI could not conduct a full examination of possible intrusions.

According to an FBI report produced last year, the server was attacked by bad actors multiple times. Foreign spy agencies and enemies of the United States, including Russia, quickly became aware Clinton was using an open, unprotected system and did their best to access it. At one point, the server was attacked 10 times in just two days. When Clinton received emails from aides with details about attacks, she brushed them off and didn’t call for an increase in security on the network. Hackers were notably successful in obtaining emails containing sensitive foreign policy discussions between Clinton and her political allies such as Sidney Blumenthal.

When Clinton traveled to Russia, known for its hackers and cyber warfare against the United States and other democracies, she didn’t bother to tap into the government-protected email system provided by the State Department. Instead, she continued to communicate through her personal, home-brewed and unsecured server. Essentially, she left classified U.S. secrets wide open for access.

While the White House was busy getting its latest Russia story straight, and congressional Republicans were inventing another new way to not pass health-care reform, few noticed the latest double-barreled dose of bad budgetary news. But anyone who cares about the long-term economic health of the country should be paying careful attention.

First, the Congressional Budget Office reported that this year’s budget deficit will hit $693 billion. That’s $134 billion higher than the CBO predicted just six months ago, and $100 billion higher than last year’s shortfall. Under current baselines, deficits are soon expected to hit $1 trillion per year. All this deficit spending will add more than $10 trillion to the national debt over the next decade, bringing it to more than $30 trillion.

Of course, those projections are based on current policies. President Trump has proposed deep cuts in domestic spending. Assuming the president gets everything he wants, the debt will increase to only $27 trillion. Hurray? Of course, after the health-care debacle, and given the president’s other distractions, does anyone really believe that all those cuts are going to happen?

But as frightening as those numbers are, most budget observers know that the real problems come farther down the road, when the true cost of entitlement programs, Social Security, Medicare, and Medicaid kick in. (Before legions of outraged seniors attack, let me simply point out that “entitlement” is simply a budgetary term for programs that are not subject to annual appropriation.) And it is these programs that are responsible for the second dose of bad news.

According to the latest report of Social Security’s trustees, the program’s unfunded future liabilities now exceed $34.2 trillion (in discounted present-value terms). True, the program can maintain technical solvency until 2034 (cold comfort to anyone 50 or younger today). But that number is largely an accounting fiction that assumes that the Social Security Trust Fund is an asset that can be used to pay benefits. In reality, of course, the Trust Fund is just a claim against general revenues. On the far more important cash-flow basis, Social Security is already spending more on benefits than it brings in through tax revenue.

Big numbers like $34 trillion tend to make the eyes glaze over, so consider this: Restoring Social Security to permanent sustainable solvency would require immediately a roughly one-third increase in the payroll tax (or an equivalent in other taxes), or a permanent reduction in benefits for all current and future beneficiaries of about 25 percent.

Meanwhile, Medicare is in even worse shape. For the record, the Trust Fund for Medicare Part A will be technically exhausted by 2029, but like Social Security, the program is already running a cash-flow deficit. The big Medicare shortfalls, however, will be in Part B and the prescription-drug program, both of which are funded largely out of general revenues. Taken as a whole, Medicare’s unfunded liabilities are nearly $49 trillion, a slight improvement from previous forecasts.

Those projections may, however, be overly optimistic. They assume that Medicare’s rising costs will probably trigger automatic spending cuts through Obamacare’s Independent Payment Advisory Board (IPAB), starting next year. But those cuts, which almost exclusively fall on doctors and hospitals, are potentially devastating. In fact, Medicare’s trustees warn in their report that payments to doctors would “fall increasingly below providers’ costs.” As a result, as many as half the nation’s hospitals, 70 percent of skilled nursing facilities and more than 80 percent of home health agencies would be losing money. More and more doctors will be driven to abandon the program.