By Spencer S. Hsu
The Justice Department on Monday dropped its two-year-long prosecution of a Russian company charged with conspiring to defraud the U.S. government by orchestrating a social media campaign to interfere in the 2016 presidential election.
The stunning reversal came a few weeks before the case — a spinoff of special counsel Robert S. Mueller III’s probe — was set to go to trial.
Assistants to U.S. Attorney Timothy Shea of Washington and Assistant Attorney General for National Security John C. Demers cited an unspecified “change in the balance of the government’s proof due to a classification determination,” according to a nine-page filing accompanied by facts under seal.
Prosecutors also cited the failure of the company, Concord Management and Consulting, to comply with trial subpoenas and the submission of a “misleading, at best” affidavit by Yevgeniy Prigozhin, a co-defendant and the company’s founder.
Prigozhin is a catering magnate and military contractor known as “Putin’s chef” because of his ties to Russian President Vladimir Putin.
“Upon careful consideration of all of the circumstances, and particularly in light of recent events . . . the government has concluded that further proceedings as to Concord . . . promotes neither the interests of justice nor the nation’s security,” federal prosecutors wrote.
“The better course is to cease litigation” against Concord and a sister catering company, also owned by Prigozhin, the prosecutors said. The government added that Concord enjoys “immunity from just punishment” even if found guilty, since it has no business presence in the United States.
The after-business-hours government request to dismiss — granted by U.S. District Judge Dabney L. Friedrich — brings an abrupt end to a case that was set to go to trial April 6.
The Concord companies were among 13 individuals and three businesses indicted in the special counsel’s investigation in February 2018 for allegedly carrying out a long-running scheme to criminally interfere with the 2016 election.
Concord Management, accused of funding the effort, is the only defendant to appear in U.S. court.
Concord lead attorney Eric A. Dubelier said that the United States sought an indictment “to make a political statement regarding the outcome of the 2016 election that was grossly overstated.”
“The government’s evidence was completely devoid of any information that could establish that the defendants knew what they were doing was in violation of highly complex U.S. laws and regulations,” Dubelier said. “This was a make-believe charge to fit the facts solely for political purposes.”
The Internet Research Agency, based in St. Petersburg, was named in the indictment as the hub of efforts to allegedly trick Americans online into following and promoting Russian-fed propaganda.
The material, prosecutors said, pushed voters toward then-Republican candidate Donald Trump and away from Democratic rival Hillary Clinton.
Facebook’s former chief security officer, Alex Stamos, who oversaw the social media giant’s investigation of the disinformation campaign, said he was disappointed by the Justice Department’s decision.
“The unclassified evidence I have seen with my own eyes, and that Facebook provided to DOJ in 2017, demonstrates that the Internet Research Agency conducted an influence operation aimed at driving political divisions in the U.S.,” said Stamos, who now heads a research group that studies disinformation, the Stanford Internet Observatory. “If this activity is illegal, then I don’t understand why the prosecution would turn on a classification decision.”
As the operation progressed, prosecutors said, the defendants engaged in extensive online conversations with Americans who became unwitting tools of the Russian efforts — pushing misinformation online about divisive political issues such as race relations, immigration and gun control.
The Justice Department in October 2018 announced that it had also charged Concord’s accountant and Prigozhin’s bookkeeper, Elena Khusyaynova. The government alleged that the conspiracy was ongoing in that year’s midterm congressional elections and seeking to sow “discord in the U.S. political system.”
Mueller’s office also charged a dozen Russian military intelligence officers in July 2018 with hacking the Democratic National Committee’s computers, stealing data and publishing files to disrupt the 2016 election.
Prigozhin and Concord have been hit repeatedly by U.S. sanctions over Russia’s occupation of Crimea and military actions in Ukraine in 2016, based on alleged “malicious cyber-enabled activities.”
Legal analysts from the outset viewed the Internet Research Agency indictments as partly a “name and shame” action by the special counsel’s office, since Russia does not allow its citizens to be extradited to the United States.
In Monday’s filing, U.S. prosecutors accused Concord of appearing in the case to force the government to turn over trial evidence that might expose or undermine the broader investigation.
Prosecutors accused Prigozhin of submitting a declaration that officials believe “contains false and misleading statements” about why the company was unable to produce emails, Internet protocol addresses it used or other corporate information in response to subpoena.
“The United States will continue its efforts to apprehend the individual defendants and bring them before this Court to face the pending charges,” prosecutors said, but wrote, “It is no longer in the best interests of justice or the country’s national security to continue this prosecution.”
The Justice Department’s retreat comes after several controversies over Attorney General William P. Barr and top aides’ handling of Mueller-related cases.
The top federal prosecutor’s office in Washington took over the Mueller cases after the special counsel’s office closed last March.
Before President Trump’s longtime political confidant Roger Stone was sentenced last month to more than three years in prison for lying to the House Intelligence Committee’s investigation of Russian interference, four career prosecutors withdrew in apparent protest of Barr’s decision to water down Stone’s sentencing recommendation.
The ensuing storm was intensified after Barr replaced former U.S. attorney Jessie K. Liu with his counselor Timothy Shea.
Critics said the department’s top political appointees appeared to be intervening in cases involving the president’s friends and aides.
That perception was fed when the Justice Department tasked five outside prosecutors to review the criminal case against former Trump national security adviser Michael Flynn and other politically sensitive prosecutions in the office.
Such concerns were not immediately apparent Monday in the Concord case. The filing in the case was signed by one former Mueller team member, Adam C. Jed, one of the four line prosecutors who withdrew from Stone’s case.
Craig Timberg contributed to this report.
Spencer S. Hsu is an investigative reporter, two-time Pulitzer finalist and national Emmy Award nominee. Hsu has covered homeland security, immigration, Virginia politics and Congress.