Ex-FBI Top Lawyer: Rosenstein Wasn’t Joking About Recording, Removing Trump

Deputy Attorney General Rod Rosenstein wasn’t joking when he told former FBI officials Andrew McCabe and Lisa Page that he wanted to secretly record President Trump and use the tapes to remove him from office, according to the FBI’s former top lawyer. 

Fox News reports that James Baker, who served as the FBI’s General Counsel before he was reassigned and then quit, told congressional investigators during a closed-door deposition last week that Page and McCabe relayed the same account of Rosenstein’s remarks – and that he was absolutely serious at the time. 

“As far as Baker was concerned, this was a real plan being discussed,” reports The Hill‘s John Solomon, citing a confidential source. 

“It was no laughing matter for the FBI,” the source added. 

Solomon points out that Rosenstein’s comments happened right around the time former FBI Director James Comey was fired. 

McCabe, Baker’s boss, was fired after the DOJ discovered that he had leaked self-serving information to the press and then lied to investigators about it. Baker, meanwhile, was central to the surveillance apparatus within the FBI during the counterintelligence operation on then-candidate Trump. 

As the former FBI general counsel, Baker was a senior figure with a pivotal position who had the ear of the FBI director.

Baker also is at the heart of surveillance abuse accusations, many from congressional Republicans. His deposition lays the groundwork for a planned closed-door House GOP interview with Rosenstein later this week.

Baker, formerly the FBI’s top lawyer, helped secure the Foreign Intelligence Surveillance Act (FISA) warrant on former Trump campaign adviser Carter Page, as well as three subsequent renewals. –Fox News

Meanwhile, the Times also notes that McCabe’s own memos attest to Rosenstein’s intentions to record Trump – which led to Rosenstein reportedly tendering a verbal resignation to White House chief of staff John Kelly. 

Rosenstein is set to be interviewed in private on Thursday by the House Judiciary Committee.

On September 21 the New York Times reported on Rosenstein’s alleged comments. The MSM – citing anonymous officials – immediately spread the narrative that he was simply joking. Rosenstein’s office has tried to downplay the comments as a joke, insisting that he never gave an order to record Trump, and that he doesn’t believe Trump should be removed from office. 

Let’s see if Rosenstein tells Congressional investigators the same thing on Thursday, under oath, under penalty of felony. 

Baker’s account to lawmakers this month clearly complicates an already complicated picture for Rosenstein before Congress, assuming he shows up for Thursday’s interview.

But even more so, Baker’s story lays bare an extraordinary conversation in which at least some senior FBI officials thought it within their purview to try to capture the president on tape and then go to the president’s own Cabinet secretaries, hoping to persuade the senior leaders of the administration to remove the president from power.

Even more extraordinary is the timing of such discussions: They occurred, according to Baker’s account, in the window around FBI Director James Comey’s firing. Could it be that the leaders of a wounded, stunned FBI were seeking retribution for their boss’ firing with a secret recording operation? –The Hill

Solomon points out that “This wasn’t a president who was incapacitated at the time. He was fully exercising his powers — but in a way the FBI leadership did not like.” 

Keep in mind, this is the same FBI that, a few months earlier during the 2016 election, had its top counterintelligence agent Peter Strzok talking to Page — his lover and the top lawyer to McCabe — about using their official powers to “stop” Trump in the election and having an “insurance policy” against the GOP nominee. That insurance policy increasingly looks like an unverified dossier created by British intelligence operative Christopher Steele — a Trump hater himself — that was bought and paid for by the Democratic Party and Hillary Clinton’s campaign through their mutual law firm. –The Hill

Let’s also recall that this is the same FBI which employed Stephan Halper – a Cambridge professor and longtime US spook – to infiltrate and perform espionage on the Trump campaign. 

“You walk away from the Baker interview with little doubt that the FBI leadership in that 2016-17 time-frame saw itself as far more than a neutral investigative agency but actually as a force to stop Trump’s election before it happened and then maybe reversing it after the election was over,” said Solomon’s source “directly familiar with the congressional investigation.” 

Baker’s other admissions

Solomon also reports that Baker told congressional investigators that a DNC attorney gave him information in the Russia investigation, and that he received a version of the infamous Steele Dossier from liberal journalist David Corn of Mother Jones magazine – which he then forwarded to Strzok’s team. Corn says this happened in November 2016, just after the election. 

That transaction is significant for two reasons. First, at the time Steele had just been fired from the FBI probe for leaking to the media and he wasn’t supposed to be further assisting the probe. So Corn essentially acted as a back door to allow information to continue to flow.

Secondly, the FBI was using the news media as an investigative source outside the normal chain of evidence. –The Hill

Rosenstein and Trump met for approximately 30 minutes aboard Air Force One. Prior to the flight, Trump told reporters that he has no plans to fire Rosenstein. 

“I actually have a good relationship — other than there’s been no collusion folks, no collusion,” Trump said. 

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Nikki Haley Resigns As UN Ambassador

Two weeks after President Trump issued another fiery rebuke of globalism, the United Nations and its attendant institutions during his second speech before the UN General Assembly, Axios is reporting that the president has accepted the resignation of UN Ambassador Nikki Haley.

Haley

Haley, the former governor of South Carolina who has been with the administration since the beginning, reportedly discussed her resignation with Trump during a visit to the White House last week. Her desire to leave her post apparently shocked several senior administration officials.

Haley refused to comment on reports of her resignation after walking by a group of reporters in the West Wing.

But in what appeared to be a confirmation of the report, Press Secretary Sarah Huckabee Sanders announced that Haley would make an appearance with Trump in the Oval Office at 10:30 am ET. The event will be open to the press pool.

Trump also teased the 10:30 meeting with a tweet.

Most recently, Haley oversaw the US’s withdrawal from a UN human rights council over its “chronic bias against Israel.”

“I want to make it crystal clear that this step is not a retreat from human rights commitments,” Haley said at the time. “On the contrary, we take this step because our commitment does not allow us to remain a part of a hypocritical and self-serving organization that makes a mockery of human rights.”

At one point, Haley was rumored to be a top pick to replace Rex Tillerson as Secretary of State – a job that ultimately went to Secretary Mike Pompeo.

As Axios pointed out, Haley wrote an op-ed last month challenging allegations in the infamous anonymous NYT op-ed alleging that a group of senior administration officials had formed an internal “resistance” movement against Trump to protect the nation from his most dangerous impulses.

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Socialism Fails Every Time: New at Reason

Socialism has become cool in America, under the nice name “democratic socialism.”

Gloria Álvarez ‏knows better, because she’s from Latin America and studied socialism there. She says: Watch out! Socialism has a clear track record of wrecking every country that implements it.

Click here for full text and downloadable versions.

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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Morgan Stanley: “Current Events Remind Us Of What Happened In Autumn 1987”

When one strips out the noise, to predict what will happen in capital markets one needs to know just two things: what happens to interest rates and company profits. And, in a time when central banks have injected $15 trillion in liquidity to paper over the fatals flaws from the great financial crisis, this means that the question ultimately reduces to just one variable: what happens to liquidity.

And while global liquidity is still generous, it is rapidly shrinking as one central bank after another either phase out QE or engage in all out tightening.

However, not all is well in the markets where “rolling bear markets” have now become the norm as one asset class after another experiences a sudden, sharp liquidity shortage, and as Morgan Stanley’s Hans Redeker writes this morning, often volatility divergence has been witnessed within late cycles. He recalls when liquidity concentrated in Japan from 1987-89, in the US during the 1999-2000 Nasdaq-boom, and then in the EMU just before the US subprime crisis in 2008: to Redeker, these liquidity concentrations were the result of tighter global liquidity conditions no longer covering all risk aspects.

One place where liquidity is scare this morning is the one-month CNH HIBOR rate, which jumped 79bp to 7.13% – the highest level since June 2017 – and the three-month CNH HIBOR rising 42bp to 6% is a second-round effect of liquidity concentration in the US, the Morgan Stanley strategist notes.

There is a reason for this artificial liquidity shortage: as the USDCNH has appreciated towards the previous high of 6.97, the PBoC is driving interbank rates higher to make it more expensive to short CNH in order to stabilize the currency. Rising interbank rates therefore suggest investors have increased expectations for USD strength, leading towards a possible liquidity squeeze.

And while the PBOC believes it is protecting its currency, it is unwittingly releasing adverse second-order effects such as rising volatility, which is a function of liquidity and with bond volatility breaking higher, it seems that US liquidity conditions have finally rolled over.

Redeker notes that the bank’s liquidity indicator (consisting of G4 central bank balance sheets, global FX reserves and EMU, Japan and China’s current account balances) has broken lower, which could explain the recent surge in US bond yields and the steepening US yield curve.

Here one should note that QE disconnected bond yields from liquidity indications, but with QE now in the rear view mirror, weakening global liquidity conditions have to increase the cost of capital, driving bond volatility higher.

The most direct confirmation of the growing liquidity scarcity is that US equity markets have finally come under selling pressure, and are showing early symptoms of more weakness as investors have shifted aggressively from cyclicals into defensives.

Meanwhile, despite broadly weaker share prices, gold has stayed offered, supporting the view that the current market setback is driven by tighter liquidity pushing capital costs and thus asset funding costs higher. Higher funding costs affect gold and shares likewise. US 10-year real yield has reached its highest level since 2011.

Piggybacking on what Morgan Stanley chief equity strategist Michael Wilson said yesterday, when he noted that the “tipping point” has finally arrived, Redeker then concedes that the bank’s August risk-off call came two months too early:

We wrongly assumed that EM weakness would spill over into the US, following the 2015/16 playbook. There are two differences to 2015/16. First, the US economy deployed an output gap in February 2016 when the Fed pulled markets away from pricing in aggressive Fed rate hikes. Second, there was no fiscal stimulus in 2016 increasing the resilience of the US economy to negative global spillover effects. Hence, the risk-negative effect has to come out from a different direction, namely higher capital costs gradually undermining the funding position of risky assets. This is why we put emphasis on the recent rise in US bond volatility.

And speaking of rising bond volatility, Redeker notes that all eyes are on bond volatility, i.e., the MOVE Index, for one reason: while rising FX and equity volatility can remain isolated events, rising bond market volatility tends to steer other volatility indices too. Hence, rising bond volatility makes a difference when volatility for risky assets diverged on the back of liquidity concentration in the US. Concretely, FX and non-US equity volatility – notably EM – broke away from lower US volatility readings previously.

Putting this all together, Morgan Stanley ominously observes that this is all reminiscent of “The 1987 playbook”:

In many aspects, the current constellation reminds us of what happened in autumn 1987.

And for those traders who were not even born in 1987, this is what happened in the days that led to the historic Black Monday crash:

The Fed was hiking rates, deploying a hawkish tone. Chair Greenspan had just taken office, providing hawkish rhetoric, and the global economy seemed to trail the better US performance supported by the second Reagan tax package kicking in in 1986. The consensus assumed the rest of the world (RoW) – notably Europe – was running wider output gaps and hence was surprised when the Bundesbank withdrew liquidity in September 1987. In this sense, we would not dismiss hawkish remarks from ECB’s Knot, who said that ECB rate hikes could come earlier than markets are expecting.

With just ten days left until October 19, will central banks pull the rug from under the market once again?

Finally, as to what the future may bring to US yields, even Morgan Stanley – which only yesterday admitted its call for lower yields and a flatter yield curve were wrong – is now surprisingly bearish on rates, and referencing the chart below…

… highlights the impact of easy ECB and BoJ policies on yield differentials since 2013. Specifically, easy ECB and BoJ policies helped keep US yields lower for longer. Now this anchor may be removed as ECB and BoJ policies are set to turn more hawkish.

Redeker’s conclusion: “Risky asset markets may head towards troubled waters and currencies should be traded accordingly.

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As Kavanaugh Takes the Bench, SCOTUS to Hear Arguments on Mandatory Minimums for Gun Offenses and Indefinite Immigrant Detention: Reason Roundup

Newly confirmed Justice Brett Kavanaugh will take his seat on the Supreme Court bench today, just in time to hear important cases concerning criminal sentencing and immigrant detention.

The latter case, Nielsen v. Preap—scheduled for oral arguments before the Court tomorrow—could “determine whether thousands of longtime residents of the U.S. face indefinite detention without a hearing,” notes constitutional law professor Garrett Epps. It was filed as a class action suit by current and formerly detained immigrants and turns on the meaning of the word when:

Does it mean “any time the government decides after a stated event, whether days, weeks, or years later” or “immediately upon the happening of the event”?

Under the U.S. Immigration and Nationality Act, “criminal aliens” slated for deportation are to be taken into federal custody “when [they are] released” from criminal custody (emphasis mine). They may challenge their deportation but in the interim, they’re stuck in federal detention with no possibility of getting out on bond—even if immigration agents don’t pick them up for years after their criminal offense and completion of subsequent punishment for it.

“There is no question that [ICE] agents can show up at their homes, arrest them, and hold them for removal proceedings,” writes Epps.

But does the “when” language mean they don’t get a bond hearing? If a non-citizen has left prison and established a new life, did Congress in writing the statute really mean to deny that person the chance to show an immigration court that he or she will show up for a removal hearing, the way other “noncriminal” aliens can?

In Tuesday arguments, meanwhile, SCOTUS will consider three cases involving mandatory sentencing enhancements prescribed by the Armed Career Criminal Act (ACCT)—a piece of crime-panic era legislation about which questions have long “plagued the Supreme Court,” points out Rory Little at SCOTUSblog. The 1984 law imposes a mandatory 15-year prison sentence on anyone convicted on federal firearms charges if they’ve previously been convicted of three “serious” drug crimes or “violent” felonies under state or federal law. Problems arise, writes Little, because “there is a remarkable variety among the 50 states regarding precisely how state criminal statutes are written, and how exactly those statutes are then interpreted by state courts across the nation.”

Arguments in the first case, Stokeling v. United States, involve Denard Stokeling, who was convicted of an unarmed (felony) robbery in Florida more than 20 years ago after he attempted to steal necklaces from around a woman’s neck. Two years ago, he was caught with a firearm, which meant a federal charges. Now, “the court will consider whether a state-law robbery offense meets the ACCA’s definition of a violent felony” and counts towards Stokeling’s three-strikes under it, explains Edith Roberts at SCOTUSblog.

“If Stokeling’s 1997 prior robbery conviction counts as a “violent felony,” then his federal prison sentence in the current case would increase dramatically, from a 10-year maximum to the ACCA’s 15-year minimum,” notes Little, adding that “the question presented in Stokeling is nationally important, and will affect the administration of the ACCA in federal courts around the country.”

The second arguments today involve a pair of consolidated cases, United States v. Stitt and United States v. Sims, both of which concern the definition of burglary for ACCA purposes. The law stipulates that some state crimes—includig burglary—always meet the definition of serious or violent, even if the statutory language in those states doesn’t say so.

The Supreme Court’s generic definition of burglary is “any crime, regardless of its exact definition or label” under local laws, that involves the invasion of a building or structure. Yet “states vary wildly as to what sort of ‘structure’ qualifies for ‘burglary,'” explains Little in a preview of today’s arguments. And in the two cases before the court today, both offenders were convicted of robbing motor vehicles.

In some states, cars and mobiles homes count under the definition of burglary and in some they do not. The government argues that sentencing enhancements should apply regardless, and complains that Congress wants to treat homes “differently solely because one has wheels” and one does not.

Kavanaugh’s presence on the court could make a difference here, according to Little. Previously, Justices Alito, Thomas, and Gorsuch have suggested discontent with the way the current approach is applied.

“The justices’ discontent with ACCA, and the many circuit splits it produces due to state-law disuniformity, has been growing,” wrote Little last week. “Thus, if only eight justices are on the bench to hear argument on October 9, I think there is a possibility of a 4-4 tie here.”

“If Congress were listening – a big if these days – revisiting that statute might seem, post-argument, to be a necessary and worthwhile legislative task,” he concludes.

As the new kid on the court, Kavanaugh will be responsible for answering the door at private conferences “if someone knocks to deliver something such as a justice’s coffee or forgotten glasses” and “he’ll also sit on the committee that oversees the court’s cafeteria,” notes NBC New York.

FREE MINDS

More on the disappearance of journalist Jamal Khashoggi and its possible implications here. In other Saudi-related news:

QUICK HITS

  • Hollywood golden-age actress Olivia de Havilland, age 102, is petitioning the U.S. Supreme Court to hear her lawsuit against FX and Ryan Murphy over their portrayal of her in the TV show Feud.
  • The Internet Archive is truly our greatest national resource.
  • “Sex-work was key to the early adoption, growth and progress of the internet,” writes Cory Doctorow, “but the internet has a short memory.”
  • How prisoners’ free speech rights are suppressed.
  • “There are a lot of people who simply do not understand what’s about to happen here”: Salt Lake City busybodies freak out over the possibility of legalizing so-called mother-in-law units on private property.
  • Huh—a non-government employee would get charged with child pornography crimes for this, not just statutory rape.
  • Gender quotas for corporate boards are “clearly unconstitutional under current Supreme Court precedent,” writes Ilya Somin at The Volokh Conspiracy. “If it survives the nearly inevitable legal challenges, it is also likely to cause more harm than good.”
  • Just in time to compete with the choir of “how the liberals lost me to Trump” performances, writer and former Republican policy adviser Max Boot has a new book on how he learned to stop ignoring racism and leave the right.
  • Why are state foster care programs so terrible at keeping kids safe?

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Media Baffled By Trump’s Claim That Some ‘Paid’ Protesters “Haven’t Gotten Their Checks”

In what was likely a response to a Fox News interview with a Vice News editor who admitted that some professional protesters were paid to organize the demonstrations outside Capitol Hill and the Supreme Court over the weekend…

…President Trump fired off a tweet Tuesday morning that was seemingly crafted specifically to elicit howls of outrage among liberals who have repeatedly insisted that Trump’s claims that some of the individuals protesting Judge Brett Kavanaugh’s confirmation vote had been paid by a nonprofit funded by George Soros. Trump said that the protesters are about to “REALLY protest because they haven’t gotten their checks – in other words they weren’t paid!”

While it was unclear from where Trump was getting his information, the tweet was possibly a reference to Vice News editor Shawna Thomas’ clarification that ‘some’ organizers were paid to help organize the protests, suggesting that a large portion of those who participated weren’t paid.

Trump’s tweet elicited a flurry of pedantic responses from unimaginative mainstream journalists, who apparently felt compelled to point out the extremely obvious fact that, if the demonstrators weren’t paid, then they shouldn’t be considered “paid” protesters.

We wonder: what exactly is it about this concept that is so difficult to grasp?

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Gorsuch and Sotomayor Fault Congress for Giving ‘a Blank Check to the Attorney General’

Article I, Section 1 of the Constitution vests “all legislative powers” in the hands of Congress. Last week, the U.S. Supreme Court heard oral arguments in an important case that asks whether Congress violated this fundamental rule by unconstitutionally delegating its lawmaking authority to the executive branch.

The case is Gundy v. United States. At issue is the Sex Offender Registration and Notification Act of 2006 (SORNA), which, among other things, requires convicted sex offenders to register, check in periodically in-person, and share various personal information with the authorities. SORNA imposes various sanctions on those who fail to comply with its terms.

The law also contains this provision: “The Attorney General shall have the authority to specify the applicability of the requirements of this subchapter to sex offenders convicted before the enactment of this chapter…and to prescribe rules for the registration of any such sex offenders.” In other words, Congress left it up to the attorney general to determine how to proceed with respect to the estimated 500,000 individuals whose sex crime convictions pre-date SORNA’s 2006 passage. Gundy v. U.S. centers on whether that delegation of power is constitutional.

“SORNA’s delegation provision grants unguided power to the nation’s top prosecutor to expand the scope of criminal laws and to impose burdensome, sometimes lifetime registration requirements on hundreds of thousands of individuals,” attorney Sarah Baumgartel told the Supreme Court last week. Her client, a convicted sex offender named Herman Avery Gundy, is one such individual. SORNA’s delegation of power to the attorney general, Baumgartel maintained, “combines criminal law-making and executive power in precisely the way that the Constitution was designed to prohibit.”

Judging by the oral arguments, at least one member of the Supreme Court seemed quite ready to rule in favor of Baumgartel’s position.

“The specific statutory section dealing with pre-enactment offenders says unambiguously that the Attorney General decides whether, how, when, and who, even who. So you don’t even know if you’re going to be subject to this law,” observed Justice Neil Gorsuch. “We say that vague criminal laws must be stricken,” Gorsuch continued. “What’s vaguer than a blank check to the Attorney General of the United States to determine who he’s going to prosecute?”

“That’s your argument stated very, very concisely,” interjected Justice Ruth Bader Ginsburg, speaking to Baumgartel. Indeed it was.

Gorsuch made a related point several minutes later while questioning Principal Deputy Solicitor General Jeffrey Wall, who was then at the lectern defending SORNA’s constitutionality. “Is there something unusual,” Gorsuch asked Wall, “about the Attorney General’s presence in this case as the chief prosecutor and kind of a conflict of interest?” Put differently, doesn’t SORNA violate the separation of powers because it lets a prosecutor act as a lawmaker?

A few minutes after that, Justice Sonia Sotomayor stepped in to support Gorsuch’s line of questioning. “I think a fundamental issue that Justice Gorsuch has been aiming at is—especially in criminal law—is it just to delegate to the Attorney General a fundamental question about who gets covered or doesn’t get covered by a statute? That,” she told the principal deputy solicitor general, “seems like at the core of what a law is.”

It remains to be seen whether or not a majority of the Supreme Court will see this case in the same light as Gorsuch and Sotomayor seem to see it. If the Court does, it will be a significant win both for criminal justice reformers and for critics of executive overreach.

An opinion in Gundy v. U.S. is expected by June 2019.

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Kanye West To Meet Trump At White House Later This Week

In a report that’s bound to provoke more outrage and disbelief from Kanye West’s shocked fans, West is heading to the White House later this week to meet with President Trump and senior advisor Jared Kushner for the second time since Trump’s upset win in the 2016 election. During the Thursday visit, West reportedly expects to discuss job opportunities for ex-cons, as well as strategies to bring more manufacturing jobs back to West’s hometown of Chicago and the surrounding area, the New York Times reported.

West is expected to have lunch with the president in a meeting that closely follows his latest controversial performance on Saturday Night Live, as well as a tense interview with TMZ where West was repeatedly asked to remove his MAGA hat by interviewer Harvey Levin.

Trump

West’s meeting comes a few months after West’s wife, Kim Kardashian West, met with Trump and Kushner in the Oval Office to discuss a pardon for Alice Johnson, a grandmother serving a life sentence for a nonviolent drug offense. Johnson later granted clemency to Johnson after she had spent more than 20 years in prison.

Trump has touted West’s support, and mentioned the rapper’s SNL appearance during a rally in Tennessee last week. Some of West’s fans have criticized him for supporting Trump even after the president’s negative remarks about Colin Kaepernick, the former San Francisco 49ers quarterback who triggered a controversial wave of protests by kneeling during the national anthem to protest treatment of black criminal suspects by the police. West has said that he would like to introduce Kaepernick and Trump.

West famously took a photo with Trump in the lobby of Trump Tower during the transition. While some have written it off as a joke, polling has found that support for Trump among black men has doubled since West first expressed his support for the president, declaring that “we are both dragon energy.”

 

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Mahmoud Ahmadinejad, Free Speech Warrior?: New at Reason

|||POOL New/REUTERS/NewscomWhen Mahmoud Ahmadinejad was president of Iran, he banned Twitter. Now he is the platform’s No. 1 fan. “Any type of restrictions on ideas and beliefs especially on #SocialMedia will lead to chaos and dictatorship. #FreedomOfSpeech,” he tweeted in September.

Since leaving office in 2013, the infamously repressive Ahmadinejad has become a vocal critic of current President Hassan Rouhani. Like many politicians around the world, Ahmadinejad in opposition has become a proponent of freedoms he was unwilling to extend to his own critics while in office.

Ahmadinejad has developed a vocal presence on the internet since creating his Twitter in March 2017. In English, he’s weighed in on everything from the gold standard (under the hashtag #DictatorshipOfDollar) to NFL player Colin Kaepernick’s protest against police brutality, sparking a brief flame war with Ted Cruz. The tweets are meant to establish “a reputation as an anti-imperialist supporter of the ‘oppressed’ globally,” says Sina Toosi, a researcher at the National Iranian-American Council..

But in Persian, Ahmadinejad has largely used the site to attack the current government, writes Matthew Petti in his latest post at Reason.

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