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The House on Thursday voted to hold former Donald Trump aide Steven Bannon in criminal contempt of Congress, saying Bannon's refusal to comply with a subpoena from the House select committee investigating the riot by supporters of Donald Trump on January 6 should be prosecuted to the fullest extent of the law.
The vote was 229 to 202, with just nine GOP members voting with every Democrat in favor of holding Bannon in criminal contempt.
It's now up to House Speaker Nancy Pelosi to certify the vote and send it to the U.S. attorney for the District of Columbia, who is required to "bring the matter before the grand jury for its action," according to a CNN report. The Justice Department will also review the case separately following the referral from Pelosi.
Attorney General Merrick Garland said at a hearing Thursday, "The Department of Justice will do what it always does ... apply the facts and the law and make a decision consistent with the principles of prosecution."
Bannon could face up to 12 months in jail if he's charged and successfully prosecuted.
The House select committee had subpoenaed records of Bannon's communications with Trump and set a date for him of Oct. 14 to sit for a deposition to testify. A 26-page report, released by the January 6 select committee on October 18, lays out why it believes Bannon played an integral part in the planning of the "stop the steal" effort that preceded the insurrection that day.
Bannon refused to either testify or submit records, citing Trump's dubious claims of "executive privilege." But legal experts say that doesn't apply to Trump because he is no longer president, and Bannon couldn't claim it, as he was not in the administration at the time of the attack.
Rep. Liz Cheney (R-WY), one of two Republicans who sit on the January 6 select committee, said during a speech on Tuesday night, "I ask my colleagues, please consider the fundamental questions of right and wrong here. The American people must know what happened. They must know the truth. All of us who are elected officials must do our duty to prevent the dismantling of the rule of law, and to ensure nothing like that dark day in January ever happens again."
Seven other GOP lawmakers joined Rep. Adam Kinzinger of Illinois, the other Republican on the select committee, and Cheney to vote with the Democrats to hold Bannon in contempt.
The lawmakers who voted to join the Democrats were Reps. Nancy Mace (R-SC), Peter Meijer (R-MI), Anthony Gonzalez (R-OH), Fred Upton (R-MI), John Katko (R-NY), Jaime Herrera Beutler (R-WA), and Brian Fitzpatrick (R-PA).
In fact, GOP leadership urged all Republicans to vote against the contempt resolution, a move Cheney also called out on Wednesday, accusing House Minority Leader Kevin McCarthy of being "especially active in attempting to block the investigation of events of Jan. 6, despite the fact that he clearly called for such a commission the week after the attack."
Democrats in the House slammed their GOP colleagues for voting to shield Bannon from complying with a legal congressional subpoena, saying ahead of the vote that they "fear" Trump.
"He is so feared that my Republican colleagues are going to keep denying what happened that day," Rep. Jim McGovern (D-MA) said in a speech on the House floor. "And they keep trying to sweep it under the rug as if it never happened. As if it's no big deal."
Rep. Michelle Fischbach of Minnesota justified her decision not to refer Bannon for contempt proceedings by saying the vote is merely an attempt "to distract from the real issues that concern Americans."
"We are here going back and forth arguing of whether we should continue down a path of partisan investigation of questionable motivations and purpose," Fischbach said.
Published with permission of The American Independent Foundation.
Reprinted with permission from DailyKOsOn Wednesday evening, Donald Trump's get-around-the-ban surrogate on Twitter, Liz Harrington, issued a statement announcing the formation of the "Trump Media and Technology Group" (TMTG). Most of the attention focused on this missive has been centered around the announcement of something called "TRUTH Social"—also known as yet-another-Trump-focused-Twitter-clone.
But that's not the real point of TMTG. The real point is that this is a scheme through which Trump can collect several hundred million dollars, even if his new social platform never posts a tweet, or a toot, or a fart, or whatever they end up being called.
The truth behind TRUTH Social is right there in the first paragraph of the announcement, which is not focused on the technology behind the platform, or anything that Trump is bringing to the table. Instead, that paragraph is dedicated to explaining how the project has been given "an initial enterprise value of $875 million" and "a cumulative valuation up to $1.7 billion." Which is amazing, because what it seems to have is nothing more than a credit line and some highly generic code that was hacked within minutes of the beta address becoming known.
No sooner had the first test invites been handed out than someone spoofed Trump's account and posted, well, as Daily Beast contributor Steven Monacelli accurately puts it, "a photo of a pig defecating on its own scrotum." Two hours after it first went up, the whole site came down.
However, it doesn't matter if the site ever sticks its head above the waste pool again. Because that's not the point. Donald Trump is potentially walking about with $340 million, even if it fails completely. That's the point.
What Trump is attempting here is something called a SPAC, or Special Purpose Acquisition Companies. It's also known as a "reverse merger" or a "blank check company." It's a scheme in which some low-value shell company that's already listed on a stock market "buys" a private company, then relists itself under the name of that new company. In almost all cases, what's really going on is that the private company is just taking over the empty husk of that shell company—a company that may have existed for no other purpose than to serve as a placeholder for some future SPAC.
Why go through these steps? Because getting listed on a stock exchange generally requires clearing a number of hurdles, including meeting requirements from the Securities and Exchange Commission. SPACS can just pop into existence, taking a fast track to a stock listing while dodging almost every qualifying step.
The whole idea of the SPAC is relatively new, and in the last year they've really taken off. In some cases, these schemes have allowed start ups to jump immediately to market, capitalizing on interest in new technology or rising industries. Among others, several small electric car companies made a sudden appearance on NASDAQ last year after taking over the corpses of fading corporations.
But there's one particular kind of SPAC that's described in this article from Mergers and Acquisitions. A kind known as the "celebrity SPAC."
First, a "celebrity" or another notable person (the "Sponsor") raises capital by taking an empty holding company (the SPAC) public in an IPO. This SPAC then uses the cash proceeds from the IPO and a large stock issuance to acquire a private company, making it public.
That's exactly what's happening with TMTG. Teenage Mutant Turtle Gropers—sorry, that's Trump Media and Technology Group—doesn't have to rival Twitter. It doesn't even have to threaten whatever "conservative social media platforms" are still limping along out there. It just has to collect investors. Because this:
Unlike IPOs, however, the Sponsor gets a 20 percent stake, called a "Promote," and there's much less regulatory scrutiny. Oh, and this "Sponsor" invests almost nothing in exchange for this 20 percent stake.
Remember the numbers on how this was being "valued" in Trump's announcement? That's right. This is an attempt by Trump to scam between $175 million and $340 million with essentially no investment and no effort. As the article explains, the "sponsor" can walk away with a bundle, "even if the SPAC performs horribly and the share price plummets, while normal investors will lose everything."
Trump already has a good idea how this works, because, as CNBC noted in 2020, former Trump adviser Gary Cohn put together a SPAC worth a potential $600 million (and $120 million directly to Cohn) when it formed a "blank check" holding company whose entire purpose seems to be simply to get people to buy into shares. A SPAC of this variety is nothing more than a exchange-based Ponzi scheme in which the original Ponzi is guaranteed to walk away with a mountain of cash.
TMTG isn't a social media platform. It's a scam. Trump doesn't need another social media platform. He needs suckers willing to buy stock. And Trump has always been very, very good at locating suckers.
So while it's fun to point out that TRUTH Social has some of the most restrictive rules of any platform, including rules that prohibit criticizing TRUTH Social, it doesn't really matter. The whole platform can be sh#t pigs all the way down. It can collapse under its own incompetence. None of that means a thing. What matters to Trump is that he gets to walk away with a bundle.
Not every SPAC is a scam. They really can be a means of quickly connecting investors to rising companies that aren't yet at a stage that would allow them to get onto the exchange through more traditional means. But of the $82 billion raised through SPACS in 2020, a large amount is either super speculative investment or an outright scam. Which lead the Harvard Business Review to note last February that the SPAC bubble was looking very fragile. Once it became clear that this was a way to drub investors for ready cash, everyone wanted in.
Trump isn't being innovative in his technology. He's not even being innovative in his scam. In a lot of ways, he's late to the SPAC party. But it's way past time for the SEC to put some serious restrictions on these backdoor listing schemes and blank check companies.