The beauty of American democracy is that anyone has a chance to become the U.S. President so long as you can raise a billion dollars to run a presidential campaign. If you were a billionaire or supported by a billionaire club, it would be a lot easier. The biggest challenge of being an American President is of course to face the second term re-election which very much depends on his or her performance in the first term. In a two party political system, the opposition party has four years to watch and plot against the incumbent President by obstructing his or her policies and raising a war chest to win the next election.

Trump, against quite big odds, won the Presidency beating many Republican candidates and his Democrat opponent. Trump is a conservative, running on a patriot line, wanting to make the America great again. The American citizens, frustrated with domestic issues and foreign relations, elected for a change and picked Trump for his strong conservative messages such as tax cut, stopping illegal immigrants, tough on drug trafficking, promising to make America great again. The liberal democrats and the media helped Trump’s campaign by portraying him as a dark horse and he successfully painted himself as a white knight. He won by 304 electoral votes but only 46% popular votes. Trump’s victory surprised many, but through his unique aggressive underdog campaign style with a strong conservative and patriotic message, he had amassed a core group of supporters. This core group though less than half of the voting population remained loyal to Trump, today, because of disappointment in America’s failing in economy, lost jobs, and degrading American image. Their blame on Obama Administration resonated with Trump’s sharp four ‘anti-messages’, anti-Obama, anti-Democrat, anti-media and anti-China campaign rhetoric.

Trump has maintained his core group’s support largely because he has been delivering his campaign promises as well as keeping up with his four ‘anti-messages’’. Of course, as Trump Administration began, the first two ‘anti’ messages lost some punch force while the world is watching his performance. Trump made his tax-cuts to induce American corporations to return home. He reversed course on immigration issue, tough on illegal immigrants and persistent on building a border wall. Trump’s foreign policy follows a conservative philosophy but seemingly impulsive after moving into the White House as exhibited by pulling out of the Trans-Pacific Partnership (PTT) and the Paris Climate Change Accord (PCC). Trump does place a high priority on Economy but seemingly focusing on making money for the U.S. Treasury (If America got rich, every problem could be solved) and using the stock market as his success indicator. In principle, the above notion is not wrong but how the Administration enacts policies and executes them are far more sophisticated than real estate investment or development project.

Trump had selected a conservative inner circle, about his age and speaking his language. There were significant personnel changes in the past three years. But now Trump has three key staff, John R. Bolton, National Security Advisor, Robert E. Lighthizer, U.S. Trade Representative and Peter K. Navarro, Director of Trade and Manufacturing Policies, who seemed to be the team shaping Trump’s national economic and security policies with a focus on the U.S. international trade. I wouldn’t be surprised that the team (BLN) was responsible for persuading Trump to dump TPP and PCCA, to launched trade wars, starting from steel and aluminum against US trade partners, to renegotiate NAFTA with Mexico and Canada into USMCA and to orchestrate the more than a year long trade war with China with BLN signatures. The confused media seemed to echo the White House official message: The U.S. is winning in her trade wars against Canada, Mexico, China and Europe. As a Republican citizen, I see a different picture; I am worried that Trump’s next term is vulnerable because of BLN’s harsh policy tying trade and security together without gaining concrete scores.

BLN are regarded as hawks, although all of them are lawyers never fought a war for the country. Bolton did have some years of government experience and served briefly as the US Ambassador to UN. He dodged the draft (for Vietnam War) by serving in the National Guard (in his defense, he claimed that he knew the Vietnam War was already lost hence did not want to serve the war). He was pro Iraq war and an advocate for regime change. At age of nearly 72 (born 11-20-1948), his political career is near the end. Whether or not Trump is getting a second term is probably not as important to him as to make a dent in the American history in his last position as National Security Advisor. But making a dent worries me since his hawkish view is not well grounded which may make Trump lose in 2020.

Robert E. Lighthizer (born 10-11-1947), was also a lawyer and served in the same law firm ( 1974-1978), Covington and Burlington in DC, with Bolton (1974-1981). Lighthizer served under President Reagan as Deputy Trade Representative (1983-1985) thus carried the halo of Trade Representative. However, the signing of Plaza Accord on 9-22-1985 (allowed currency intervention reducing US dollar value against yen by 51%) or the earlier US Local Content Legislation (about Japanese manufactured cars) did not balance trade deficit with Japan since Japan did not make structural (legislative) changes to favor US imports. The damage to Japan really was the currency effect on Japan’s assets, creating an asset bubble later causing deflation and depressed economical growth. (The international financial gurus helped it) Therefore, it is understandable how the US-China trade negotiation under Lighthizer wanted to shift from balancing trade to demanding China to enact laws to make structural change to favor US imports and investment. Why should China accept such demands Japan rejected? The BLN lawyers drove trade war to tie in with national security by applying technology sanction and restricting technology exchange. The BLN team, being non-technologists, do not understand the US-China mutual dependence in technology and its product supply/manufacturer chain. The American technology corporations’ opposition to this tie-up policy is a clear warning signal: Trump may lose his second term if he did not make a correction.

Peter K. Navarro (born 7-15-1949 and a graduate of Harvard John F Kennedy School) is principally an author more than an economist. He is called a ‘heterodox economist’ obviously for his outside-of-mainstream economics views. He is a prolific writer with over a dozen books to his name, including Death by China (2011) which was made into a movie and The Coming of China Wars (2006). However, world has changed rapidly especially in the past decade, China has been going through rapid transformations faster than any author can keep up. Even Kissinger will agree with me on this statement. Navarro’s view on China is outdated and lack of first hand interaction with China prior to his current role as Director of Trade and Manufacturing. At age 70, Navarro’s political career is also limited. Perhaps, he will write a new book after his service to the White House. I am worried that Navarro, as a member of BLN team, is more an echoer than a deep thinker to understand the US-China paradigm shift and how it may affect Trump’s chance for second term and Trump’s legacy.

At seventeen months before the Presidential election, I am worried about the BLN team. I would like to see the Trump Administration taking a serious ‘retreat session’ reflecting on the current events and the Administration’s current policies. Put the BLN team on the podium, drill them these questions: Is China Threat or Death by China a real scenario today? Is pro-war and regime change a feasible or correct policy towards a transforming China? What did we really learn from the Plaza Accord and Louvre Accord? To make America Great Again is a noble objective, but it will take more than one term of Presidency to accomplish something concrete. I see problems with the BLN China policy and why the trade war is at an impasse. I think a revision with the following objectives will help Trump win the next election and a healthy US-China relation: 1. Deal with China realistically to first focus on scoring a win on the North Korea nuclear issue, even possibly a new Iran deal. 2. Settle a trade agreement with China to gain some obvious concessions from China improving the trade imbalance. 3. Plot a long-term plan to work with China on the Belt and Road Initiative (BRI), an obvious world accepted project now, to project a win-win outcome for both the U.S. and China.

Any positive sign of the above actions with a stable economy will likely assure a second term for Trump to continue the ‘Make America Great Again’ objective.

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‘Legal Corruption’ in this article means corruptions protected by law under a politically correct banner. This type of corruption often involves the legal system in the U.S. with lawyers, legal professionals and judges corrupting the legal system and vice versa. Therefore, legal corruption may be interpreted in a narrower sense as corruptions happening in the legal system, applying law to protect corruption. In either definition, the legal corruption in the U.S. is growing tremendously hurting individual citizens, corporations, foreign nations and the U.S. reputation. This type of corruptions is usually well protected by law and cleverly executed by the legal system from law enforcement to court system involving lawyers, consultants, law enforcement agencies and courts (judges). These people involved in the corruptions generally keep a low profile and hide behind laws.

We may start with a small case to illustrate a ‘legal corruption’. First example is the traffic law which has been used by law enforcement and court system to generate revenues for the local government, court system and law enforcement benefits. Speed traps are well known in certain area and certain times being set up mainly to catch the out-of-jurisdiction travelers. The travelers often cannot come to the local court to defend their cases thus willingly paying a fine which can be an unreasonable amount. Many citizens had this type of experience which might be blamed on the speeders’ own fault. But when certain small towns with highways passing through their township use speed traps to generate income to fund their entire police department or to pay overtime or bonuses to their court system and law enforcement force, this borders on corruption. When electronic device is used to catch speeders, it is very easy to catch them even just with a fraction of mile per hour over the speed limit, say, 40 miles/hr. When the speed trap is overused or eagerly applied to generate money for the benefit of a small number of people, it is legal corruption. Similarly, when the law enforcement is given right to confiscate valuables and large amount of cash from a traveler under suspicion of drug or illegal activity, possible corruption may occur. The out of town owner often gives up the confiscated money out of fear or inconvenience to go through a lengthy legal process. Then the confiscated money benefits the court or a small number of individuals. These types of laws give incentive to corruptions and they do happen indeed in our country.

The U.S. passed a law, called Foreign Corruption Prevention Act (FCPA), which is meant to punish American corporations doing business with foreign country involving bribery or receiving kickback. This is a law well-intended to discourage American companies to commit corruption. However, under this law, many foreign corporations having branches in the U.S. are subject to the jurisdiction of this law, thus the Economist magazine termed it “the American Law with a long arm”. Foreign companies having business branches have become the major targets of the FCPA law. A recent case is revealed because the victim, Frederic Pierucci, an executive of Alston (French Company) was arrested while on a business trip to the U.S. and jailed for many months in cells for serious criminals simply because Alston had committed bribery when doing business with Indonesia. Pierucci was not involved in the Indonesia business but his name appeared as a recipient on one of the corporate emails discussing the Indonesian deal. The U.S. court under FCPA pursued him and others relentlessly seeking a huge fine. He was released after reluctantly admitted wrong doing. Then, Alston sold its natural gas burning turbine to GE along with this legal hot potato hoping GE will take care of this mess, but FCPA court demanded a fine of $0.775B from Alston, refused GE intervention and rearrested Pierucci again. The case was finally terminated after Alston agreed to the fine. Of course this fine does not include tons of money paid to lawyers, consultants and court fees and the misery Mr. Pierucci endured. He wrote a book in French to vent his grief.

According to a Chinese language blogger, this type of legal pursuant has grown bigger and bigger in penalty size and more and more in frequency on foreign companies because the process generates such a huge monetary reward benefitting the few specialized lawyers, consultants and court judges involved with FCPA. The blogger was afraid of reprimand from the people in this FCPA “business chain”, he never published anything in English and never wanted to be named. He also claimed that a small number of people in the FCPA “business chain” always keep a low profile not wishing to be in the limelight to spoil their good business but their zest for FCPA target is growing with the size of the fines they have succeeded in obtaining. According to a list of FCPA cases the Stanford Law School tabulated, eight of the ten top cases were all foreign companies having business in the U.S. The ten with their final fine are shown as follows: Petrobas (Brazil, $1B), Siemens (Germany, $0.8B), Alston (France, $0.775B), KBR (US, $0.58B), Society General (France, $0.57B), Teva Pharmaceutical (Israel, $0.51B), Telia ($0.47B), Dch-Zeffirelli’s (US, $0.4B), BAE Systems (Britain, $0.4B), and Total (France, $0.4B). These huge fines of course do not include the costs of hiring and paying lawyers, consultants and court fees.

The U.S. Congress enacted the Iran and Libya Sanction Act in 1996 (ILSA, effective August, 5th). Apparently, an “ILSA business chain” had formed closely patterning the “FCPA business chain” behavior seeking foreign targets to pay huge fines using a long legal arm. The recent case of Chinese companies ZTE and Huawei smell like the same cookie came out of the same cookie cutter and baking oven used by FCPA, except it is a different team wearing ILSA chef hat. Interestingly, these ‘legal’ people associated with the U.S. justice system armed with politically correct banners, such as anti-corruption under FCPA and endangering national security under ILSA, can extend their arms extremely long to target foreign companies. They can successfully evade the executive branch’s notice, because they are shielded by the ‘political correct’ banners. Therefore, it was not surprising, the ZTE and Huawei cases occurred during the US-China trade negotiation appearing totally uncoordinated even astonished the White House trade negotiation team and the President himself.

The arrest of Huawei CFO, Ms Meng Wanzhou, draws such similarity with the Alston case except this time the ILSA business chain extended its arm even longer invoking extradition agreement with Canada. The Canadians probably acted hastily without investigating the facts or studying the practices of the FCPA and ILSA legal teams, thus aroused the diplomatic objection from China and the White House’s attention. Was the Economist correct in characterizing these legal teams having too long arms in handling their cases? Very recently, countries (for example, Myanmar) have announced that they shall use other currencies (RMB) rather than the US dollars to settle their trades, obviously designed to avoid the U.S. long legal arms. Applying the U.S. laws to foreign countries and foreign companies beyond their branches and personnel in the U.S. is definitely stretching our legal arms too long. When our legal procedure uses coercion, threat, and illegal procedures such as jailing foreign executives excessively (for unproven crime and for purpose of extracting big fine) while American executives are rarely putting in jail (for real white-collar crime committed), it makes our legal system and nation looking very unfair and bad.

It is time for us to pay attention and to clean up ‘Legal Corruptions’ in our country!


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