Special counsel Bob Mueller has teamed up with the IRS. According to sources familiar with his investigation into alleged Russian election interference, his probe has enlisted the help of agents from the IRS’ Criminal Investigations unit.
This unit—known as CI—is one of the federal government’s most tight-knit, specialized, and secretive investigative entities. Its 2,500 agents focus exclusively on financial crime, including tax evasion and money laundering. A former colleague of Mueller’s said he always liked working with IRS’ special agents, especially when he was a U.S. Attorney.
And it goes without saying that the IRS has access to Trump’s tax returns—documents that the president has long resisted releasing to the public.
Potential financial crimes are a central part of Mueller’s probe. One of his top deputies, Andy Weissmann, formerly helmed the Justice Department’s Enron probe and has extensive experience working with investigative agents from the IRS.
“From the agents, I know everyone has the utmost respect for both Mueller and Weissmann,” said Martin Sheil, a retired IRS Criminal Investigations agent.
And he said Mueller and Weissmann are known admirers of those agents’ work.
“They view them with the highest regard,” Sheil said. “IRS special agents are the very best in the business of conducting financial investigations. They will quickly tell you that it took an accountant to nab Al Capone, and it’s true.”
“The FBI’s expertise is spread out over so many statutes—and particularly since 9/11, where they really focused on counterintelligence and counterterror—that they simply don’t have the financial investigative expertise that the CI agents have,” Sheil continued. “When CI brings a case to a U.S. Attorney, it is done. It’s wrapped up with a ribbon and a bow. It’s just comprehensive.”
But the team-up between the IRS and Mueller probe could come with political complications. Mueller has already taken some criticism for the number of Democratic donors on his team. Those critiques intensified yesterday, when word leaked that Mueller was coordinating some of his activities with New York State Attorney General Eric Schneiderman, a long-time Trump adversary.
The IRS, for its part, became a target of conservative ire during the Obama administration for its investigations into Tea Party groups—probes that Republicans called political witch hunts. The complaints about politicized taxmen could begin again, with the IRS joining forces with Mueller.
A spokesman for the special counsel’s office declined to comment for this story.
It’s been widely reported that the special counsel’s team is trying to “flip” Paul Manafort, the president’s former campaign CEO, in hopes he will provide evidence against his former colleagues. Former federal prosecutors tell The Daily Beast one of Manafort’s biggest legal liabilities could be to what’s called a “check the box” prosecution. Federal law requires that people who have money in foreign bank accounts check a box on their tax returns disclosing that. And there’s speculation that Manafort may have neglected to check that box, which would be a felony. This is exactly the kind of allegation the IRS would look into.
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These investigations, which are often extremely complex, can take a lot of time. That means the people involved sometimes have to spend significant amounts of money on legal fees. The Daily Beast previously reported that targets of Mueller’s probe—including Manafort—are facing financial strain because of the probe, and that Manafort recently parted ways with the law firm WilmerHale in part because of his financial troubles.
As special counsel, Mueller is subject to the same rules as U.S. Attorneys. That means that if he wants to bring charges against Trump associates related to violations of tax law, he will need approval from the Justice Department’s elite Tax Division. Trump hasn’t yet named his pick to run the division, which is a post that requires Senate confirmation. At the moment, career officials are helming the division.
One former Tax Division prosecutor told The Daily Beast that this could cause trouble for Trump.
“The fact that there is not a senate-confirmed Assistant Attorney General for the Tax Division, and that the Trump people have disregarded it despite warnings as far back as December that they needed to fill the AAG’s spot… shows what a self-created mess the Trump administration has found itself in,” said the former prosecutor, who requested anonymity to speak candidly. “They have no one to keep Mueller and his Brooklyn team honest. They should be concerned about that.”
The former prosecutor said it could have benefitted Trump if he had an appointee in the division as these proceedings unfold—and that he’s now missed that opportunity.
“They could have picked any two people in the world,” he added, “and they picked nobody.”