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WASHINGTON — The JusticeDepartment appointed Robert S.Mueller III, a former F.B.I. direc-tor, as special counsel on Wednes-day to oversee the investigationinto ties between PresidentTrump’s campaign and Russianofficials, dramatically raising thelegal and political stakes in an af-fair that has threatened to engulfMr. Trump’s four-month-old presi-dency.

The decision by the deputy at-torney general, Rod J. Rosenstein,came after a cascade of damagingdevelopments for Mr. Trump in re-cent days, including his abruptdismissal of the F.B.I. director,James B. Comey, and the subse-quent disclosure that Mr. Trumpasked Mr. Comey to drop the in-vestigation of his former nationalsecurity adviser, Michael T. Flynn.

Mr. Rosenstein had been underescalating pressure fromDemocrats, and even some Re-publicans, to appoint a specialcounsel after he wrote a memothat the White House initiallycited as the rationale for Mr.Comey’s dismissal.

By appointing Mr. Mueller, aformer federal prosecutor with anunblemished reputation, Mr.Rosenstein could alleviate uncer-tainty about the government’sability to investigate the questionssurrounding the Trump campaignand the Russians.

Mr. Rosenstein said in a state-ment that he concluded that “it isin the public interest for me to ex-ercise my authorities and appointa special counsel to assume re-sponsibility for this matter.”

“My decision is not a findingthat crimes have been committedor that any prosecution is war-ranted,” Mr. Rosenstein added. “Ihave made no such determina-tion.”

In a statement, Mr. Trump said,

“As I have stated many times, athorough investigation will con-firm what we already know —there was no collusion betweenmy campaign and any foreign en-tity. I look forward to this matterconcluding quickly. In the mean-time, I will never stop fighting forthe people and the issues thatmatter most to the future of ourcountry.”

Mr. Mueller’s appointmentcapped a day in which a sense ofdeepening crisis swept over Re-publicans in Washington. Republi-can congressional leaders, nor-

mally reluctant to publicly discussWhite House political drama orthe Russia investigation, joinedcalls for Mr. Comey to share moreabout his encounters with Mr.Trump.

The Republican chairmen of theSenate Judiciary and Intelligencecommittees and the House Over-sight Committee all asked Mr.Comey to testify before theirpanels. They also requested thatthe F.B.I. turn over documenta-tion of Mr. Comey’s interactionswith his superiors in both the

SPECIAL COUNSELWILL INVESTIGATERUSSIA INFLUENCE

Choice Is Comey’s Predecessor at F.B.I.— Legal Risk Rises for President

By REBECCA R. RUIZ and MARK LANDLER

Robert S. Mueller III wasF.B.I. director for 12 years.

JONATHAN ERNST/REUTERS

Continued on Page A14

Confidence in PresidentTrump’s agenda to stoke eco-nomic growth was questionedWednesday, as stocks tumbledand the dollar weakened.

The sell-off was startling be-cause it followed months of asteadily climbing, tranquil stockmarket, a rally that came to beknown as the Trump bump. Anddomestic employment and corpo-rate profits have been strong,usually a boon for stocks.

Yet investors, who haveshrugged off previous turmoil inthe Trump administration, wereclearly rattled by the most recentepisode. Some on Wall Streetspeculated about whether theWhite House’s pro-businesspledges to cut taxes, lighten regu-lation and increase infrastructurewould be thwarted by the growingtumult in Washington. Some bankanalysts even discussed the prob-ability of impeachment.

And at a gathering of big moneymanagers in Las Vegas, the for-mer chairman of the Federal Re-serve, Ben Bernanke, said he wasworried about the stability of Mr.Trump’s leadership.

“I think it’s a reasonable con-cern, obviously,” Mr. Bernankesaid. He later added that afteryears of a strong economy, stat-istically speaking, it was time for aslowdown.

Capital DramaRattles Wall St.And Stocks Dive

By KATE KELLYand ALEXANDRA STEVENSON

Continued on Page A21

WASHINGTON — Enemiesfrom within have launched a“deep-state” smear campaign,news organizations are actingwith ulterior motives, and theworst attacks are yet to come.

Pushing back against the big-gest threat so far to DonaldTrump’s young presidency, hismost fervent supporters are build-ing alternative narratives to runalongside the “establishment”media account — from relativelybenign diversions to more bizarreconspiracies.

“They’re going to say that Don-ald Trump has Alzheimer’s,” saidthe president’s friend and long-time associate Roger Stone, whomade an online video laying outhow the president’s own cabinetcould trigger a never-used provi-sion of the Constitution’s 25thAmendment to stage a coup on thegrounds that Mr. Trump is men-tally unsound. “This is the gameplan. Watch carefully,” Mr. Stoneswore.

As Americans process a dizzy-ing week of damning revelationsabout the president — his firing ofthe F.B.I. director, James B.Comey; his disclosure of highlysensitive intelligence to the Rus-sians; and his plea to Mr. Comeyto drop the bureau’s investigationof his fired national security ad-viser, Michael T. Flynn — Mr.Trump has found shelter on the

Stalwarts BuildAlternate ViewOf Trump Woes

By JEREMY W. PETERS

SAN FRANCISCO — At a tech-nology conference in mid-2014, theGoogle co-founder Sergey Brinpresented the company’s firstprototype for a self-driving car.Watching in the audience wasTravis Kalanick, chief executive ofUber, the ride-hailing start-up.

Mr. Brin’s presentation in Ran-cho Palos Verdes, Calif. — includ-

ing a video of a compact two-seat-er autonomously doing lapsaround a parking lot — jolted Mr.Kalanick, according to two peoplewho spoke with him. Google, thesearch giant — long considered anUber ally — seemed to be turningon him. And even as Uber was agrowing force to be reckoned with,it was lacking in self-driving cartechnology, an important field ofstudy that might affect the futureof transportation.

So Mr. Kalanick spent much of2015 raiding Google’s engineeringcorps. To learn about the technol-ogy, he struck up a friendship withAnthony Levandowski, a top au-tonomous vehicle engineer at “G-co,” Mr. Kalanick’s pet name forGoogle.

The two men often spoke forhours about the future of driving,meeting at the Ferry Building inSan Francisco and walking fivemiles to the Golden Gate Bridge,

according to two people familiarwith the executives, who asked foranonymity because they were notauthorized to speak publicly.

The friendship developed into apartnership. Mr. Levandowski leftGoogle last year to form Otto, aself-driving trucking start-up.Uber acquired it months later fornearly $700 million. Mr. Kalanicksubsequently appointed Mr.Levandowski to run Uber’s auton-

Allies Turned Rivals in the Race to Build a Better Driverless CarBy MIKE ISAAC

Continued on Page A21

WASHINGTON — Michael T.Flynn told President Trump’stransition team weeks before theinauguration that he was underfederal investigation for secretlyworking as a paid lobbyist for Tur-key during the campaign, accord-ing to two people familiar with thecase.

Despite this warning, whichcame about a month after the Jus-tice Department notified Mr.Flynn of the inquiry, Mr. Trumpmade Mr. Flynn his national secu-rity adviser. The job gave Mr.Flynn access to the president andnearly every secret held by Amer-ican intelligence agencies.

Mr. Flynn’s disclosure, on Jan.4, was first made to the transitionteam’s chief lawyer, Donald F. Mc-Gahn II, who is now the WhiteHouse counsel. That conversa-tion, and another one two days lat-er between Mr. Flynn’s lawyer

and transition lawyers, showsthat the Trump team knew aboutthe investigation of Mr. Flynn farearlier than has been previouslyreported.

His legal issues have been aproblem for the White House fromthe beginning and are at the cen-ter of a growing political crisis forMr. Trump. Mr. Flynn, who wasfired after 24 days in the job, wasinitially kept on even after theacting attorney general, Sally Q.Yates, warned the White Housethat he might be subject to black-mail by the Russians for mislead-ing Vice President Mike Penceabout the nature of conversationshe had with the Russian ambassa-dor to Washington.

After Mr. Flynn’s dismissal, Mr.Trump tried to get James B.Comey, the F.B.I. director, to drop

Trump Transition Said to KnowOf Flynn Inquiry Before Hiring

By MATTHEW ROSENBERG and MARK MAZZETTI

Continued on Page A16

WASHINGTON — On Day 118of the Trump administration, aspecial counsel was appointed.The word impeachment wasuttered on the floor of the Houseof Representatives. And thepresident of the United Statescontemplated how to go forwardwith the next 1,343 days.

The notion that PresidentTrump will actually be im-peached seemed like liberalwishful thinking, but a new pros-ecutor represented a seriousthreat and Washington wasabuzz on Wednesday with thesurround sound of scandal. Law-makers demanded documents.The Dow Jones average fell bymore than 370 points. Watergatetalking heads flooded cable newsshows.

For a president who in most

polls has never commanded thesupport of a majority of his pub-lic, the accumulated toll of self-inflicted wounds has been achallenge from the start. Now hefaces perhaps the most dauntingmoment of his young administra-tion after his decision to fire theF.B.I. director, his disclosure ofsensitive information to theRussians and a report that hetried to shut down an investiga-tion into a former aide.

Like other presidents beforehim who felt under siege, Mr.Trump expressed resentmentrather than remorse, insistentthat he has done nothing wrongand convinced that he has beenpersecuted. “No politician inhistory — and I say this withgreat surety — has been treated

In the Corridors of Power, FearsOf a Presidency Out of Control

By PETER BAKER

President Trump said during a Coast Guard Academy commencement address on Wednesday that he had been treated “unfairly.”DOUG MILLS/THE NEW YORK TIMES

Continued on Page A18

WASHINGTON MEMO

DMITRY KOSTYUKOV FOR THE NEW YORK TIMES

Planned as a Mediterranean utopia, Castel Volturno has instead become a stew of southern Italy’s abiding troubles. Page A6.Where Dreams Died by the Sea

Continued on Page A13

North Korea’s history of erratic behav-ior has embarrassed Beijing, but Chi-nese leaders remain stoic. PAGE A8

China Takes Ally in Stride

The hard-liner Ebrahim Raisi might oneday become the supreme leader. Butcan he win the presidency? PAGE A10

INTERNATIONAL A4-11

Iran’s Ascendant Long Shot

Americans are borrowing more thanever, $12.7 trillion in all, signaling op-timism as well as risks. PAGE B1

BUSINESS DAY B1-9

New Peak for Household Debt

In the first three months of the Trumpadministration, immigration arrestsshot up 38 percent compared with thesame period last year. PAGE A22

NATIONAL A12-22

Immigration Arrests Soar

The task of convincing a jury that BillCosby is a sexual predator will largelyfall to just one woman. PAGE C1

Linchpin of the Cosby Trial

Sixteen Jean-Michel Basquiat works,including “Untitled,” will headline thisweek’s evening auctions. PAGE C1

ARTS C1-10

An Artist Seems Everywhere

Nicholas Kristof PAGE A26

EDITORIAL, OP-ED A26-27

The California-educated executive whomade Liga Mahasiswa into his nation’slargest college league has goals that gobeyond the field of play. PAGE B10

SPORTSTHURSDAY B10-15

Selling Sports in Indonesia

Each claims to be the No. 3 fashion cityin the United States. Our reporter ex-plored the scene in both places in orderto settle the rivalry. PAGE D1

THURSDAY STYLES D1-8

Nashville vs. Columbus

The Puerto Rican Day Parade willhonor Oscar López Rivera, who spentover 30 years in prison. PAGE A24

NEW YORK A23-25

Parade Stirs a Political DebateA jury found a white police officer notguilty of manslaughter in the shootingof an unarmed black driver. PAGE A22

Officer Acquitted in Tulsa

Late Edition

VOL. CLXVI . . . No. 57,601 © 2017 The New York Times Company NEW YORK, THURSDAY, MAY 18, 2017

Today, sunny, record-breaking heat,humid, high 92. Tonight, mostlyclear, humid, low 72. Tomorrow, af-ternoon showers or storms, high 88.Weather map appears on Page B13.

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