Manafort trial, first in Mueller investigation

[seemslikeadream]

Manafort trial, first in Mueller investigation, set to get underway

Jose Luis Magana/AP, FILE
WATCH Trial for Paul Manafort starts today

The financial crimes trial of Donald Trump’s former campaign chairman, Paul Manafort, is expected to get underway in Alexandria, Virginia, Tuesday, the first trial in connection with the more than year-long investigation by special counsel Robert Mueller into possible collusion between Russia and then-candidate Donald Trump’s 2016 presidential campaign.

But collusion and Russia are not expected to come up during Manafort’s trial; rather, the white-collar crime case arose from the broader mandate given Mueller to probe matters arising directly out of the investigation into any campaign links to the Kremlin.

As part of that investigation, Mueller began exploring Manafort’s longtime work for Ukrainian politicians with ties to Moscow, which he began in 2006. Government investigators unearthed a raft of alleged financial crimes unrelated to the campaign and obtained multiple, related indictments against the veteran GOP lobbyist, including counts of tax evasion and bank fraud.

Manafort, who’s 69 and could spend the rest of his life in prison if convicted, has pleaded not guilty to all charges.

PHOTO: In this June 21, 2017, file photo, Special Counsel Robert Mueller departs after a closed-door meeting with members of the Senate Judiciary Committee about Russian meddling in the election at the Capitol in Washington.J. Scott Applewhite/AP
In this June 21, 2017, file photo, Special Counsel Robert Mueller departs after a closed-door meeting with members of the Senate Judiciary Committee about Russian meddling in the election at the Capitol in Washington.more +
Federal prosecutors allege Manafort funneled some $75 million through offshore accounts, using a complex scheme to hide income, buy posh real estate, make home improvements to his many houses from the affluent Hamptons to tony West Palm Beach, and generally to live a life of luxury.

The exhibits list for the prosecution at times reads like a script from the set of “Lifestyles of the Rich and Famous,” with photographs to be presented of pricey vehicles, opulent home furnishings and haute couture, including a watch from House of Bijan, which CNBC earlier this year labeled “the most expensive store in the world.”

In short, the prosecution is expected to attempt to paint Manafort as leading a criminal high-life to the jury of 12 men and women, along with four alternates, chosen from the Virginia suburb just outside the nation’s capital.

(MORE: Judge delays Manafort trial, grants immunity to 5 Mueller witnesses)
Former federal prosecutor Peter Zeidenberg, in an interview with ABC, called Manafort “particularly” unsympathetic “and completely unrelatable. He made a massive fortune working for a Russian stooge in the Ukraine. Hard to relate to that.”

But veteran white-collar defense attorney Shan Wu, said, “You make your client a sympathetic figure by showing him as a person – what they have done, what they have accomplished.

“In a high-profile case like this, I would emphasize the amount of resources the prosecution has expended against my client – that they have some other agenda in mind, because otherwise his crimes are not worth the amount of money, time and staff devoted to it. This makes the client a human being versus the government,” Wu said.

Making that last point might be hard for Manafort’s defense attorneys, Kevin Downing, Thomas Zehnle, and Richard Westling, who told federal judge T. S. Ellis last week that they do not intend to argue that their client was “selectively or vindictively prosecuted,” although the defense lawyers said they might raise the issue at a later date.

(MORE: After judge's order, Manafort arrives at new jail)
Manafort's overall defense strategy is unknown, largely due to a gag order on lawyers imposed by the judge in a separate case against Manafort in Washington, D.C. Manafort has maintained he had no contact with Russian President Vladimir Putin or other Russians.

One image the jury will not see is the defendant in his jail-issued dark green jumpsuit arriving from nearby Alexandria Detention Center, where he has been since June. He was sent there after the judge in his separate Washington, D.C., case ordered him held for alleged attempted witness-tampering. Instead, Manafort will appear in normal business attire.

Excluded at trial will be any mention of collusion and Russia, as decreed by the judge, but Manafort’s defense team was unsuccessful in efforts to exclude more than 50 government exhibits related to Manafort’s work in Ukraine. They had argued “strategy memos and PR don’t go to the financial crimes” their client allegedly committed.

Lead prosecutor Greg Andres took great exception, arguing that exhibits like photos of former Ukrainian President Viktor Yanukovych on a Manafort-produced photo-shoot for his client were at the “core” of the government’s case.

“These exhibits...go directly to how Mr. Manafort made his money,” Andres said, adding, “The point is to show how he made not hundreds of thousands but millions and millions.”

Judge Ellis urged prosecutors to “be cautious,” noting that “most people don’t distinguish between Ukrainians and Russians,” but said he would allow the government to proceed.

(MORE: Manafort says he’s being treated like a 'VIP' in jail: Court filing)
Zeidenberg, a former deputy special counsel in the perjury and obstruction of justice prosecution of Lewis “Scooter” Libby -- former top adviser to Vice President Dick Cheney -- said the prime task of the prosecution will be to keep it simple.

He cited a daunting paper trail from countless emails and documents from cooperating witnesses to boxes and file cabinets of bank records and other items seized in a May 2017 raid on Manafort’s storage unit and another raid - on his Alexandria condo - two months later.

“The government always wants to simplify these types of cases as much as possible and illustrate the vast wealth that Manafort accumulated but never accounted for,” Zeidenberg said. “This should not be a difficult case to prove, particularly given the use of a cooperating witness like Gates,” a reference to former longtime Manafort business partner Rick Gates, who pleaded guilty to reduced charges earlier this year and has been cooperating with the Mueller investigation for five months.

Zeidenberg said jurors in the eastern district of Virginia “are generally pretty sophisticated,” adding, “This isn’t that tough. failure to report his foreign bank accounts and the bank fraud should not be difficult concepts for the jurors.”

Still, Wu said much depends on the skill of the prosecutors.

“So the way you defend a white-collar case with a lot of records arrayed against your client is to take on the narrative of those documents and make the story either sympathetic to your client or punch it full of holes,” said Wu, who at one point briefly represented Gates.

“Making complex evidence interesting and easy to understand is very much dependent on the courtroom skills of the lawyer. You have to know exactly how your evidence tells a story so you are presenting the story – not the evidence,” Wu said.

PHOTO: Rick Gates, business associate of Paul Manafort, departs Federal District Court, Feb. 14, 2018, in Washington, D.C. Alex Brandon/AP, FILE
Rick Gates, business associate of Paul Manafort, departs Federal District Court, Feb. 14, 2018, in Washington, D.C.
Perhaps the biggest day in court - and potentially the most damaging for Manafort - is when Gates, who also worked alongside his longtime colleague on the Trump campaign, takes the stand against him. The government’s exhibit list, alone, is littered with communications involving Gates.

The two were originally indicted in Washington, D.C., in October on conspiracy, false statements, and a slew of financial crimes related to their lobbying and political work on behalf of pro-Russia Ukrainian politicians.

Besides Gates, the list of 35 potential witnesses the government revealed Friday includes the former chief strategist to Sen. Bernie Sanders’ 2016 presidential campaign, who worked with Manafort eight years ago to help get Kremlin-backed Viktor Yanukovych elected.

Former bankers, tax accountants, bookkeepers, a real estate agent, even the CFO at the Alexandria Mercedes dealership where Manafort did business will possibly take the stand for the government.

Though none of the witnesses is a household name, a number are from high profile institutions, such as the director of ticket operations for the New York Yankees and AirBnB’s director of customer experience for North America -- all companies with which the government says Manafort did business.

Five individuals from financial institutions and bookkeeping firms have been granted limited “use” immunity to testify against their former client without fear of prosecution. They are free from legal jeopardy in this instance only – a one-time “use.”

It is unclear if Manafort will take the stand. Wu noted that the defense strategy of humanizing a client is “much harder to do if they do not testify, which most criminal defendants do not do as it exposes them to the dangers of cross-examination.”

One person who is not expected to show is Robert Mueller, according to the special counsel’s office.

A component of the expected three-week trial that’s sure to be unpredictable and anything but simple is the judge himself.

T.S. Ellis, at 78 years old, is slight, balding with bushy eyebrows, ever-irascible, unpredictable, and fond of stem-winding jaunts through history or down memory lane of his 30 years of experience on the bench.

Over the last five months, the Reagan appointee has shown himself to be sympathetic toward defendants, scholarly in his opinions, irritated by mandatory sentencing guidelines, a scourge of any unprepared lawyer, ready with verbal quips and tongue lashings, and a fan of fast-moving proceedings.

The Eastern District court – of which Ellis’ courtroom is a part - has a long reputation as the “rocket docket” – moving proceedings along without delay.

Prosecutors have been applying great pressure on Manafort for the past year to get him to cut some kind of deal, so much so that Judge Ellis even referred to it in one pre-trial hearing, saying the government was trying “to turn the screws” and really just wanted Manafort, “the vernacular is, to sing.”

And while President Trump is not expected to be a topic in the trial, politicos will certainly be watching for his reaction, either through tweets or at a political rally scheduled for Tuesday night, announced by his campaign just a little more than a week ago.

Manafort was brought onto the Trump campaign by one of the President’s closest friends and confidantes, California real estate mogul Tom Barrack, who also kept Gates on to help run the Inaugural Committee after Manafort departed the campaign early on. Barrack has been interviewed by the special counsel investigators.

Just two weeks ago, Trump - on Fox News’ Sean Hannity show - called Manafort “a really nice man” before comparing his former campaign manager to a mobster brought down by his tax returns, “You look at what’s going on with him, it’s like Al Capone.”

President Trump could always offer his former campaign manager a pardon.

Trump’s own lawyer, Rudy Giuliani, in June did not rule it out, though he was adamant that no pardons be issued until the investigation is complete.

"When it's over, hey, he's the President of the United States. He retains his pardon power. Nobody's taking that away from him," Giuliani said on CNN's "State of the Union.”

When asked last month if he was paying close attention to Manafort’s legal predicament, Trump said, “They went back 12 years to get things that he did 12 years ago? You know, Paul Manafort worked for me for a very short period of time. He worked for Ronald Reagan. He worked for Bob Dole … He worked for many other Republicans … I feel badly for some people because they’ve gone back 12 years to find things about somebody, and I don’t think it’s right.”
https://abcnews.go.com/Politics/manafor ... d=56910276

The trials of Paul Manafort, explained

They aren’t about Russian interference with the presidential campaign — and they are.

Andrew ProkopJul 31, 2018, 7:40am EDT

Former Trump campaign chair Paul Manafort leaves federal court in December 2017 in Washington, DC.
Brendan Smialowski/AFP/Getty Images
The first trial of special counsel Robert Mueller’s Russia investigation will kick off Tuesday, when former Trump campaign chair Paul Manafort faces a litany of charges related to financial crimes and money laundering in Virginia.

These alleged financial crimes are quite spectacular and could end up sending Manafort to prison for the rest of his life. But in a sense, they’re a sideshow. What’s really looming over all this is Mueller’s larger investigation into the Trump campaign and Russia.

Manafort’s Virginia trial — which is separate from another trial he will face in Washington, DC, in September — is about the enormous amount of money he made from years of work for Ukraine’s government and political leaders, and later hefty loans he got from US banks.

Mueller has alleged a years-long scheme of astonishing scope: that Manafort first laundered $30 million from a web of undeclared offshore accounts into the US without paying taxes on it, and then (after the Ukrainian money stopped coming in) defrauded several US banks to get more than $20 million in loans. Manafort has pleaded not guilty on all counts.

However, many observers — including the judge for the trial, T.S. Ellis III — think all this is really about something else. It’s widely believed that Mueller’s primary aim in charging Manafort is to put pressure on him so he’ll “flip” on President Donald Trump and provide information about Russian collusion with the Trump campaign.

Mueller has not confirmed any such strategy. But he has confirmed he’s been investigating Manafort regarding collusion, and Manafort’s past work for the Ukrainian political faction aligned with Russia (and other Russian ties) seems obviously relevant.

So as jurors hear arguments over Manafort’s offshore accounts, tax filings, and loan applications, the political world will wait with bated breath to see what the verdict could mean for the larger Russia investigation — and the future of Trump’s presidency.

Who is Paul Manafort?

Manafort (right), with Trump and Rick Gates (second from left) at the 2016 Republican convention
Manafort (right), with Trump and Rick Gates (second from left) at the 2016 Republican convention.
Brooks Kraft/Getty Images
Manafort is something of a legendary figure in Republican operative circles; you can think of his career in three major phases:

1) Decades of Republican campaign and lobbying work: Manafort rose to fame in the party through his work for Ford’s 1976 and Reagan’s 1980 presidential campaigns. After Reagan won, Manafort decided to cash in by starting a lobbying, consulting, and PR firm (alongside his campaign colleague Roger Stone).

The firm became infamous for representing controversial authoritarian regimes or opposition leaders abroad — clients like President Ferdinand Marcos of the Philippines and guerrilla leader Jonas Savimbi of Angola. Manafort also occasionally jumped back into US politics, such as to manage the Republican convention in 1996.

2) The Ukraine period: By around 2004, Manafort sought even grander paydays abroad, by advising fantastically rich oligarchs in the former Soviet Union on how to master tumultuous democratic politics. He advised a Russian billionaire, Oleg Deripaska, but eventually his efforts focused on Ukraine — where he landed a hefty contract to advise the country’s pro-Russian political party.

When Manafort got the gig, the Party of Regions and its leader Viktor Yanukovych were unpopular, and in the opposition. But over the next few years, he’d orchestrate the party’s return to power and Yanukovych’s 2010 election as president. Once Yanukovych was in office, Manafort became an enormously influential adviser to the regime — the Atlantic’s Franklin Foer writes that Manafort had “walk-in” privileges, and billed “outrageous amounts” while advising on both domestic politics and lobbying in the US. (Mueller claims Manafort earned more than $60 million in these years.)

But it all fell apart in 2014, when demonstrators forced Yanukovych out of power and he fled to Russia. Manafort and Deripaska, meanwhile, had a falling-out that ended in a lawsuit, with Deripaska claiming Manafort cheated him of millions. He’d lost his biggest client and had serious cash flow problems, and the FBI was now looking into his Ukrainian money.

3) The Trump campaign and afterward: Yet Manafort saw opportunity in the outsider presidential candidacy of Donald Trump. Trump needed someone with the expertise on party and convention rules who could lock down delegates for him. And two longtime Manafort associates who had Trump’s ear — Roger Stone, and wealthy real estate investor Tom Barrack — pitched Manafort for the job.

On March 28, 2016, Trump announced he’d hired Manafort. At first, Manafort’s job was merely to lead a delegate-wrangling operation, but his portfolio gradually expanded until he was effectively running the campaign. He was officially named campaign chair and chief strategist in May and ran the effort through the last few primaries and the Republican convention. (He worked for free.)

But by mid-August, Trump had sunk in the polls, and Manafort was dogged by damaging news reports questioning the legality of his Ukrainian payments. So Trump brought in Steve Bannon and Kellyanne Conway to take over, and Manafort was forced out. Then, as 2017 progressed, Manafort came under scrutiny in special counsel Robert Mueller’s investigation, leading to his indictment last October (and more charges being added in February, and again in June).

What is Paul Manafort on trial for this week?

Manafort’s trial in Virginia is about his money. The full indictment is at this link. He’s facing 18 counts, but we can think of them as part of two main batches.

The first set of charges, which Mueller calls “the tax scheme,” relate to Manafort’s flush years, when the Ukrainian money was pouring in to the tune of tens of millions of dollars. Mueller says Manafort set up a complex web of offshore shell companies and then spent $30 million of that offshore cash in the US between 2008 and 2014.

About $12 million of that cash was allegedly spent on “personal items” for Manafort and his family, spread across more than 200 different transactions. This included about $5.4 million to a home improvement company in the Hamptons, $1.3 million tied to an antique rug store in Virginia, $849,000 or so to a men’s clothing store in New York, $819,000 on landscaping, and payments related to several Range Rovers and a Mercedes-Benz.

Then another $6.4 million was allegedly wired from offshore for three real estate payments: $1.5 million for a condo in New York City, $3 million for a brownstone in Brooklyn, and $1.9 million for a house in Virginia. On top of that, Manafort allegedly sent another $13 million as “loans” to US companies he controlled — but the government calls these loans “shams” designed to fraudulently reduce his taxable income.

All this violated the law in two ways, Mueller says:

False income tax returns (5 counts): Manafort did not report any of this money on his income tax returns, or pay taxes on it. He also falsely said, on those tax returns, that he had no authority over any financial accounts in foreign countries. He faces one count for each tax year from 2010 to 2014.
Failure to report foreign bank or financial assets (four counts): Manafort also didn’t report any of his foreign accounts to the Treasury Department by filing what’s known as an FBAR form — a legally required disclosure. He faces one count for each year from 2011 to 2014.
Next, there’s a second set of charges that Mueller calls “the financial institution scheme.” Mueller says that after Yanukovych was deposed and the Ukrainian money stopped pouring in, Manafort was desperate for cash, and made a series of fraudulent declarations to banks to try to get hefty mortgage loans — “to have the benefits of liquid income without paying taxes on it.”

All the charges here are either bank fraud (four counts) or bank fraud conspiracy (five counts), relating to several different loans or attempts to get loans from 2015 through January 2017. The allegations are:

To get a $3.4 million loan on a New York City condo, Manafort falsely told a lender that the property was a second home when it was a rental property, failed to disclose previous mortgage debt, and, after the lender discovered that debt, falsely claimed it was forgiven.
In search of another loan, Manafort submitted a doctored profit and loss form to a different potential lender that overstated his consulting firm’s income by more than $4 million.
To get a $5.5 million loan on a Brooklyn brownstone, Manafort didn’t disclose that he already had a loan on that property, and got an associate to submit a form overstating his firm’s income by $2 million.
To get loans of $9.5 million and $6.5 million on two properties, Manafort again submitted doctored profit and loss forms overstating his firm’s income by millions. He also falsely claimed he had a $300,000 debt on his American Express card only because he had lent it to his former aide Rick Gates.
What should we expect to see at Manafort’s trial?

Manafort’s right-hand-man Rick Gates, shortly after pleading guilty to reduced charges in February 2018
Manafort’s right-hand man Rick Gates, shortly after pleading guilty to reduced charges in February 2018.
Mark Wilson/Getty Images
The Virginia trial is expected to last about two to three weeks. The government’s evidence exhibit list and witness list are both public, which gives us a pretty good idea of the prosecution’s plans. Mueller’s team will present a plethora of financial documents, emails, photos, and other evidence to document Manafort’s spending from offshore accounts and alleged false bank loan submissions.

As for witnesses, Mueller’s team will potentially call up to 35 people to testify, but they’re generally not big names — this is a case about money, so expect to hear from a lot of accountants, financial institution employees, and little-known former employees of Manafort’s firm.

However, there are two exceptions. First, the government’s star witness will likely be Rick Gates, Manafort’s longtime right-hand man who worked with him in Ukraine and then the Trump campaign. Gates was charged alongside Manafort in Mueller’s probe last October, but struck a plea deal with the special counsel in February. He was Manafort’s closest business associate through this period, so his testimony about what Manafort was saying or thinking could be important.

The only other big name on the government’s witness list is Tad Devine, a Democratic consultant most famous for advising Bernie Sanders’s 2016 presidential campaign. Before that, though, Devine had done work alongside Manafort in Ukraine.

As for Manafort’s strategy, that’s more of a mystery at this point — beyond publicly claiming to be innocent, his lawyers have given little indication about how they’ll argue the case at trial.

Judge Ellis has already said publicly that given “the apparent weight of the evidence against him,” Manafort “faces the very real possibility of spending the rest of his life in prison.” Indeed, many of the charges against him are considered “paper charges” — as in, they’re more about documented financial transactions and false filings or non-filings by Manafort than they are about proving his state of mind or anything like that. Anything can happen, though, and it’s always possible he’ll get lucky with the jury.

What’s Paul Manafort’s other trial about?

Former Ukrainian president Viktor Yanukovych, in Russia, shortly after his ouster in 2014
Former Ukrainian President Viktor Yanukovych in Russia, shortly after his ouster in 2014.
Sasha Mordovets/Getty Images
As sprawling as this all seems, it’s actually only the start of Manafort’s legal woes — because Mueller has indicted him on another seven charges in Washington, DC, for a trial scheduled to start after this one concludes, in September.

In general, the DC trial will focus more on Manafort’s actual work for Ukraine, rather than his finances. The charges include conspiracy to defraud the United States and making false Foreign Agent Registration Act (FARA) statements.

Additionally, just last month, Mueller brought two new charges related to attempted witness tampering. He said that earlier this year, Manafort and a Russian associate contacted witnesses and urged them to give a false story. After these new charges, Judge Amy Berman Jackson in DC sent Manafort to jail to await trial, arguing that he’d “abused the trust” placed in him by the court system.

Wait, why are there two Manafort trials, anyway?

Mueller originally indicted Manafort in Washington last October. But for unclear reasons, he wasn’t ready to bring the tax and bank fraud charges against Manafort at that time (perhaps because of a bureaucratic holdup, or perhaps because his team was still assembling evidence there).

By February of this year, Mueller was ready to file those tax and bank fraud charges. But there was a catch. The law required some of those counts to be charged where Manafort actually lived (Alexandria, Virginia) — unless Manafort specifically gave Mueller permission to charge him in DC.

This posed an interesting dilemma for Manafort. On the one hand, it’s easier and less expensive for the defendant to just prepare for one trial rather than two. Also, two separate trials would give the prosecution two separate opportunities, before different judges and different juries, to convict him — making it less likely a lucky break would get him off the hook entirely.

On the other hand, DC’s population is far more liberal and far more nonwhite than that of the Eastern District of Virginia — meaning Manafort likely thought he had a better chance of an acquittal in the latter venue. Furthermore, the specific charges that would be brought against him in Virginia likely played into his thinking. As compared to the DC charges, there are more of them, they’re generally viewed as tougher to beat, and they would mean a longer prison sentence — so why not get them before a Virginia jury rather than a DC one?

So Manafort did not give Mueller permission to file the new charges in DC, which meant two separate trials. But Manafort appears to have miscalculated. His team hoped that of the two trials, the Washington one would be first, since those charges were filed months earlier. But as Josh Gerstein has written, this Virginia district is known as a “rocket docket” for its speed in bringing cases to trial. So here we are.

But what about Trump and Russian collusion?

Xinhua News Agency/Getty Images
None of these many, many charges against Manafort have anything to do with the Russian government interfering in the 2016 election, the main thing Mueller is investigating.

But Manafort has long been a central figure in that aspect of the probe, for some pretty obvious reasons — he spent years working for pro-Russian politicians in Ukraine and was in debt to a Russian oligarch.

As far as specific allegations, there are two curious happenings during the campaign that Manafort has been tied to.

First, he attended Donald Trump Jr.’s infamous Trump Tower meeting with a Russian lawyer and other Russia-tied figures in June 2016. Attendees have claimed that even though the meeting was set up with the promise of dirt on Hillary Clinton from the Russian government, nothing much of importance happened there.

Second, there’s a set of surreptitious contacts Manafort had with two Russian nationals during the campaign. There’s the aforementioned oligarch and former client he was indebted to, Oleg Deripaska. Then there’s Konstantin Kilimnik, a former employee of Manafort’s who worked with him in Ukraine, and who Mueller has said is tied to Russian intelligence. (Kilimnik was indicted alongside Manafort for alleged witness tampering in June, but he remains in Russia and likely won’t face trial.)

Manafort and Kilimnik exchanged a series of cryptic emails during the campaign about Deripaska and, apparently, money. “How do we use to get whole. Has OVD operation seen?” Manafort asked in April. “He will be most likely looking for ways to reach out to you pretty soon,” Kilimnik wrote in July. “If he needs private briefings we can accommodate,” Manafort answered. At the end of the month, Kilimnik wrote that he had met with “the guy who gave you your biggest black caviar jar” and that “I have several important messages from him to you.” (Investigators reportedly believe “black caviar” is a reference to money.)

What exactly was going on here remains unknown. Was this where the action on Trump-Russia collusion happened? Or was Manafort just going rogue in an effort to get himself paid (while in theory working for Trump’s campaign for free)? It remains a loose end.

But Mueller has made clear that he was specifically investigating Manafort for collusion-related crimes, as he revealed in a court filing:


From Rod Rosenstein’s memo on Mueller’s authority
No charges, however, have yet resulted from that part of the investigation, and the current status of it is unclear.

Big picture, what’s really going on here?

Robert Mueller
Robert Mueller.
Tom Williams/CQ Roll Call/Getty
Publicly, more of the special counsel’s activity has been focused on Manafort than on any other single person involved in the Russia investigation, even though none of the 25 charges brought against him so far are about interference with the election.

The most common proposed explanation is that Mueller believes Manafort has important information for the collusion probe — and that he’s brought so many other charges against Manafort to put pressure on him, in hopes he’ll “flip” and spill what he knows.

Mueller has been tight-lipped about his true intentions, and it’s also possible that he’s trying to send Manafort to prison for what he views as repeated violations of the law and doesn’t much care whether he flips or not.

Still, given how Mueller charged Rick Gates with past Ukraine-related crimes and withdrew nearly all of those charges as soon as he agreed to cooperate, it would make sense if he’s pursuing a similar strategy with Manafort.

If he is, though, it hasn’t worked. Even though Manafort is facing 25 charges that could easily put him in prison for the rest of his life — and even though the evidence for many if not most of these charges appears quite strong — he’s pleaded not guilty to everything, and has given no public indication he’s considering flipping.

Why? One possible explanation is he just has nothing to flip with. Either he wasn’t involved in collusion or he has nothing on Trump or anybody else Mueller cares about. Alternatively, maybe Manafort is just holding out hope that he can beat the charges. A darker possibility is that, given an apparent series of Russia-linked assassinations in the West, Manafort fears violent reprisals against himself or his family should he give information implicating Russians.

But perhaps most likely is that Manafort is just holding out for Trump to pardon him. The New York Times has reported that last year, Trump’s then-lawyer John Dowd discussed a possible presidential pardon with Manafort’s lawyer. Rudy Giuliani has more recently floated the idea too.

Yet even a pardon may not entirely be a get-out-of-jail-free card. There are a host of complications involved, from potential state charges against him (the president can’t pardon state charges) to the prospect that Manafort would no longer be able to avoid testimony by pleading the Fifth Amendment on certain matters.

That all lies ahead, though. For now, Manafort will have his day in court.
https://www.vox.com/2018/7/31/17590846/ ... ump-russia

[seemslikeadream]

BREAKING FROM THE ROCKET DOCKET: Jury of 6 men and 6 women selected for Manafort VA trial. Opening arguments expected this afternoon

Jury selection underway in Manafort trial

By JOSH GERSTEIN and DARREN SAMUELSOHN
07/31/2018 01:02 PM EDT

Outside of the Alexandria court house. | Getty
People wait in line to enter the Albert V. Bryan United States Courthouse to attend the trial of former Trump campaign manager Paul Manafort on Tuesday in Alexandria, Virginia. | Mark Wilson/Getty Images
The usually sleepy plaza outside the federal courthouse in Alexandria, Virginia came alive Tuesday morning with the buzz of satellite trucks, a snaking line of journalists jockeying for seats and a throng of raucous anti-Trump protesters cheering the onset of former Trump campaign chairman Paul Manafort's trial on bank- and tax-fraud charges.

Despite the modern trappings, a snare drum played by one demonstrator gave the scene a martial, 18th-century flair. Some protesters were simply taunting Manafort, who sits in custody and was driven in through an entrance in the back of the building. Others seemed to be pleading with the veteran political consultant to turn on President Donald Trump.

"Trump won't do time for you," one sign said.

"Those laundering skills will be helpful in prison," another declared.

Inside, Manafort — clad not in a jail jumpsuit but a black business suit and blue-and-white patterned tie — looked on glumly as a federal judge kicked off live questioning of potential jurors for the case. About 65 people were summoned to the ninth floor courtroom for possible jury service after several dozen were weeded out based on answers to a written questionnaire.

Following a brief, pre-trial hearing Tuesday morning, U.S. District Court Judge T.S. Ellis III directed spectators to vacate most of the gallery, causing a mad scramble for few remaining seats. At one point, Manafort's wife Kathleen and Manafort spokesman Jason Maloni were ousted from their seats by a marshal.

As the defendant's bewildered wife was filing out, a man offered her his seat in the back of the courtroom. She took it and was eventually accommodated in seats just behind her husband's defense team.

The potential jurors soon found themselves face-to-face with the defendant and a phalanx of lawyers involved in the case, who somewhat dramatically swiveled their chairs to face the audience and look for hints about the jurors' demeanor and leanings. The Manafort attorneys flanking him — five in all — outnumbered the three prosecutors taking lead roles in the case: Greg Andres and Brandon Von Grack from Mueller's team, along with Uzo Asonye from the U.S. Attorney's Office in Alexandria.

Jurors also were briefly introduced to the lead FBI agent for the trial, Sherine Ebadi, a corporate fraud specialist who sat with the prosecutors. Mueller's top deputy, Andrew Weissmann, sat in a row of staff seats on the prosecution side of the courtroom but was not introduced to the jury.

During the judge's initial round of questions, about 10 potential jurors indicated some social or work connection to the Justice Department.

One woman said she'd spent two years as a "trainer" in the Justice Department's Civil Division and had dealings with Justice's tax attorneys as well. A man who worked for the Energy Department said he'd dealt with DOJ in connection with lawsuits that states had brought over the federal government's failure to collect spent nuclear fuel. A couple of women described themselves as "recovering" attorneys, prompting laughter from the courtroom.

All said they could decide the case on the merits if selected. Ellis said he plans to impanel 12 jurors and four alternates. Later in jury selection, the defense will have the chance to shape the jury by striking up to 12 potential jurors, while prosecutors will get eight strikes, the judge said.

The jurors were not publicly referred to by name Tuesday and were instead addressed by a four-digit number. Their names "will remain under seal for the time being," Ellis said, without elaborating.

Ellis did not issue a clear ruling Tuesday on the last pending pretrial motion: a defense request to prevent prosecutors from introducing hundreds of pages of documents detailing Manafort's work for former Ukrainian president Viktor Yanukovych. The judge suggested he didn't believe jurors needed to see all that material, but he accepted prosecutors' basic argument that they are entitled to show jurors something about what Manafort did to earn what the prosecution contends was $60 million for his Ukraine-related work.

"Documents that tend to show the nature of the funds Mr. Manafort received as income that had to be reported — those documents are relevant," Ellis declared. He also cautioned prosecutors that they'd need to explain any records they introduce and not just enter them for jurors to mull over during deliberations.

"I don't expect these 400 pages of documents to be simply dumped into the record," the judge said.

As the proceedings were getting started Tuesday, Manafort's team scored a pyrrhic victory of sorts at the D.C. Circuit federal appeals court. Judges considering an appeal Manafort filed in an effort to get sprung from jail for his trial said the judge who jailed him erred by finding that he violated an order to stay away from witnesses in the Virginia case.

However, the three-judge appellate panel declined to order Manafort's release, holding that the error was not significant enough to undermine U.S. District Court Judge Amy Berman Jackson's decision to revoke his release on house arrest.

Jackson is handling a related but separate criminal case Mueller's team brought against Manafort in Washington, charging him with failing to register as a foreign agent and with money laundering. In June, she ordered Manafort jailed after prosecutors added charges that he attempted to tamper with the testimony of two men who worked with him on Ukraine-related lobbying.

D.C. Circuit Judge Robert Wilkins, writing for Judges David Tatel and Thomas Griffith, said Jackson went too far in finding that Manafort's interactions with the two men violated Ellis' order that Manafort stay away from witnesses.

The order's language "is at the very least ambiguous with respect to whether the prohibition on contact with 'any person who is a victim or witness in the investigation or prosecution' prohibits contact with potential witnesses" in Manafort's other case, Wilkins wrote.

The appeals court's 16-page opinion also admonished Jackson for failing to indicate what standard of proof she applied in deciding to revoke Manafort's bail due to the danger he presented to the community. Ultimately, though, the appeals judges did nothing to help the once-high-flying lobbyist get out of the Alexandria jail that is now his home.

"We do not find clear error after reviewing the entirety of the District Court record," Wilkins wrote. "The District Court’s treatment of the .... Stay-Away Order was merely part of the icing; the cake had already been baked."

Manafort remains set for trial in the D.C. case beginning Sept. 17. In a separate order Tuesday, Jackson said she's "opposed" to any effort to delay that trial. The Virginia case is expected to last about three weeks.
https://www.politico.com/story/2018/07/ ... ion-751925

Shimon Prokupecz
‏
Manafort's defense attorney laid out his side of the case, shifting much of the blame to the Ukrainian oligarchs Manafort worked for.
"This is the way that they required it to be done," his attorney said, explaining why oligarchs paid Manafort through secret foreign accounts.
https://twitter.com/ShimonPro/status/10 ... 2289805312

emptywheel
‏
Waiting for this opening speech to be used as evidence in the ultimate conspiracy trial.

"Oleg Deripaska required electing Trump to be done in a certain way and I was stuck following his orders."
https://twitter.com/emptywheel

[seemslikeadream]

This Is So Much Bigger Than Paul Manafort

With Donald Trump’s former campaign chairman on trial, America is reckoning with its very serious kleptocracy problem.

Franklin Foer is a national correspondent for The Atlantic. He is the author of World Without Mind and How Soccer Explains the World: An Unlikely Theory of Globalization. He is the former editor of The New Republic
Jul 31, 2018
Paul Manafort is photographed smiling as he leaves the E. Barrett Prettyman United States Court House after being charged on October 30, 2017
Brendan Smialowski / AFP / Getty Images
On the eve of the Paul Manafort trial, Treasury Secretary Steve Mnuchin casually announced that the Trump administration was considering a fresh $100 billion tax cut for the wealthy. The two events—the trial and the tax cut—should be considered plot points in the very same narrative. Manafort had grown very rich by looting public monies, and Mnuchin was proposing an arguably legal version of the same.

Unlike past Trump tax cuts, this proposed cut would be implemented by executive fiat, without a congressional vote—a highly unusual and highly undemocratic act of plunder that would redirect money from the state to further enrich the American elite, not to mention Mnuchin himself.

The trial of Paul Manafort is not merely an episode in a larger scandal that will unfold over many chapters. It is a warning not to be ignored. It’s an occasion for the United States to awaken from its collective slumber about the creeping dangers of kleptocracy.

So much about the American view of itself resists accepting a disturbing reality. Conventional wisdom long held that America’s free market would never tolerate the sort of clientelism, nepotism, and outright theft that prevailed in places like Brazil and Italy. Americans thought that globalization would export the hygienic habits of this nation’s financial system and its values of good government to the rest of the world. But over the past three decades, the opposite transpired: America has become the sanctuary of choice for laundered money, a bastion of shell companies and anonymously purchased real estate. American elites have learned to plant money offshore with acumen that comes close to matching their crooked counterparts abroad.

Manafort is one of the architects of this new world order. During the 1980s and 1990s, he provided strategic advice to the thuggish dictators who served as proxies for the Reagan administration’s anti-Communist foreign policy. With his mastery of American media, he helped sanitize crooks like the former Philippine President Ferdinand Marcos and his wife Imelda—the symbol of their rule, the 3,000 pairs of shoes she owned, was still fewer than the number of people by killed by the regime. These dictators (also Angola’s Jonas Savimbi, the Congo’s Mobutu Sese Seko, and Kenya’s Daniel arap Moi) should never have been respectable figures in Washington. But Manafort reinvented them as latter-day Thomas Jeffersons, allies in the cause of democracy, and successfully lobbied for them to receive arms and aid from the U.S. government.

As Communism fell, the former Soviet Union became the scene of one of the biggest heists in history, and the opportunity of a lifetime for Paul Manafort. In Russia, the KGB steered billions into offshore accounts during the dying days of the regime, the beginning of a pattern of plunder best described by the late Karen Dawisha in her instant classic, Putin’s Kleptocracy. These funds became the basis for some of the fortunes of those who now appear as characters in the Russiagate scandal. Vladimir Putin himself amassed wealth that totaled more than $40 billion, when Dawisha calculated his haul several years ago. Russians who invested in Trump real estate over the years had many motives. But everything we know about kleptocracy suggests that they were likely attempting to relocate their money to a place where it would both disappear from public view and have the protections that come with the American rule of law.

An important part of this story is Ukraine. Paul Manafort went to work there in 2004—and the country’s ruling party remained his primary client until 2014. During those years, the country hemorrhaged more than $118 billion in illicit financial flows, according to the Kleptocracy Initiative, a think tank that has published invaluable reports about the scourge of corruption. (To set that number in relief, the country’s entire gross domestic product in 2013 was $181 billion.) Stealing this money wasn’t a victimless crime: It came at the expense of Ukraine’s development as a market economy; it sucked funds away from public investment; it eroded faith in democracy and Western institutions. The West hypocritically lectured Ukraine about good government while it profited from Ukrainian oligarchs parking cash in Vienna, London, and New York.

Russian and Ukrainian oligarchs stole these vast fortunes, but they couldn’t accomplish the feat on their own. They needed enablers, and in the course of Mueller’s prosecution of Manafort, we’ve come to see how pillars of the American establishment filled this role.

The longtime Manafort aide who was a pawn of Russian intelligence.

Barack Obama’s White House counsel Greg Craig and his top-drawer law firm Skadden Arps abetted former Ukrainian President Viktor Yanukovych’s efforts to smash the political opponents who might get in the way of his thievery. Manafort arranged for the firm to publish a report justifying the arrest of a former Ukrainian prime minister, who had been denied counsel at crucial moments of her trial. (Last April, Craig retired from the firm under a cloud of scandal. Another Skadden associate who worked with Manafort has pled guilty to misleading Mueller’s investigators.) Tony Podesta, a leading Democratic lobbyist of his generation, has watched his own power firm collapse after Mueller revealed his complicity in Manafort’s efforts. These are not stray villains, but representative figures: American law firms play an essential role in protecting global kleptocracy and helping it relocate money to the United States.

Manafort was, of course, the most important enabler of them all. During the decade he spent in Ukraine, he helped a clique of former gangsters seize control of the country’s governmental machinery, a feat he achieved by bringing state-of-the-art campaign strategy to a barely developed democracy. He hired a network of former European politicians to apologize for the regime, to whitewash its history of corruption and illiberalism. Back in Washington, Manafort would escort oligarchs around town, taking them to think tanks and meetings with politicians, helping them achieve the legitimacy that they hoped would protect their ill-gotten fortunes.

It doesn’t require any imagination to see how money stolen from Ukrainian coffers, money won in rigged privatizations and crony contracts, money obtained after the brutal murder of rivals, ended up with Paul Manafort. Clean money doesn’t need to travel through shell companies in Cyprus, like the millions that Manafort poured into accounts there. And Manafort allegedly used the same techniques of his dodgy clients to repatriate the money in the United States, taking advantage of gaps in the enforcement of anti-money-laundering laws to sneak cash into the country through real estate, expensive rugs, and tailored suits.

What’s increasingly clear is that Manafort also attempted to exploit the Trump campaign with similarly kleptocratic aims. Take the story of Stephen Calk that has emerged in the course of Mueller’s pretrial filings. Calk owns a small Chicago bank. In the summer of 2016, Manafort applied for a loan from the bank—and the claims in Manafort’s loan applications were obviously shaky. According to Mueller, officials in the bank were quite adamant in expressing their reservations about Manafort’s application. But there was apparently a backstory that these officials didn’t know. Calk had won a place on Trump’s board of economic advisors, one of 13. Mueller’s lawyers have said that they plan to prove that Calk only landed this official title after promising Manafort loans. So, even as Manafort departed the campaign amid widespread allegations of misdeeds, Calk extended him loan after loan, $16 million in total. (The loans represented 22 percent of the bank’s total equity capital.)

This small tale is just one instance of a larger genre repeated across this administration—the hints that foreign countries are financing deals that profit the president’s own family; the long list of officials (see also: Scott Pruitt, Tom Price) abusing the perquisites of their office. And those stories are just a subset of an even larger narrative still, of an American elite increasingly at home in the ranks of international kleptocracy. Thanks to Robert Mueller, that racket is now on trial.
https://www.theatlantic.com/politics/ar ... rt/566501/

[seemslikeadream]

Manafort’s bookkeeper testifies against him, alleging efforts to inflate income

by Rachel Weiner, Justin Jouvenal and Devlin Barrett
August 2 at 7:08 PM
Paul Manafort’s longtime bookkeeper testified against him Thursday, telling a Virginia jury that his seven-figure lifestyle lasted until about 2015 when the cash ran out, the bills piled up and he and his business partner began trying to fudge numbers to secure loans.

The dry but potentially damaging testimony from the bookkeeper, Heather Washkuhn, appeared to undercut Manafort’s defense against bank and tax charges, which is that his business partner is responsible for any financial misdeeds. But Washkuhn testified that Manafort approved “every penny.”

Washkuhn spent hours on the witness stand, describing account balances, bills received and payments. Her testimony is critical to the case being heard by a six-man, six-woman jury in Alexandria, Va., as Manafort, who was then-candidate Donald Trump’s campaign chairman for a period in 2016, is charged with running a years-long scheme to hide millions of dollars from the Internal Revenue Service, and then, when his income dried up, lying to get bank loans so he could continue living the good life.

[The spectacular rise and fall of Paul Manafort]

Washkuhn characterized Manafort as a “very knowledgeable” client. “He was very detail-oriented. He approved every penny of everything we paid,” she said.

That point could prove vital in jury deliberations because Manafort’s lawyers have made clear they aim to place blame on the case’s star witness, former Manafort right-hand man Rick Gates, portraying Gates as a liar and embezzler who is responsible for any financial chicanery the FBI uncovered.


Paul Manafort’s former bookkeeper, Heather Washkuhn, enters the federal courthouse in Alexandria, Va., on Aug. 2, 2018, to testify at Manafort’s trial in U.S. District Court on charges of tax evasion and bank fraud. Washkuhn testified that Manafort kept her in the dark about the foreign bank accounts he was using to pay for millions of dollars worth of luxury items and personal expenses. (Win McNamee/Getty Images)
On the witness stand, Washkuhn said she prepared ledgers for Manafort’s finances, which she would eventually hand off to his accountants to file his tax returns. She said she sometimes saw transactions in those accounts from other accounts to which she did not have access.

Critically, Washkuhn testified that she did not have any records of foreign accounts controlled by Manafort and had not been aware of such accounts. Prosecutors have introduced evidence that Manafort used foreign accounts to pay millions of dollars for clothes, cars, real estate and home remodeling.

Prosecutors allege that Manafort made $60 million between 2010 and 2014 while working for various interests in Ukraine and used foreign accounts to hide millions of dollars from the IRS.

[Prosecutors say Manafort’s wealth fueled by lies]

Washkuhn said Manafort’s consulting firm, Davis Manafort Partners, took in millions of dollars a year before its revenue cratered in 2015. The firm reported only $338,542 in income in 2015 and a $1.2 million loss in 2016.

Prosecutors say that is because Manafort’s biggest client — what one associate called his “golden goose,” Ukrainian President Viktor Yanukovych — fled for Russia in 2014 amid massive protests against his government.

As his business was gasping, Manafort was tapped to run Trump’s campaign in mid-2016. He received no pay for the job, even though his firm was losing hundreds of thousands of dollars a month, according to election filings and evidence presented to the jury.

Trying to pay Manafort’s bills became a problem, Washkuhn testified, and he needed more than $1.1 million to pay off credit cards and other expenses.

“$120K is urgently needed for your personal bills,” Washkuhn wrote to Manafort in one email presented in court. Manafort’s company also was struggling to pay its bills. In an email to Gates in April 2016, Washkuhn warned that the firm’s health insurance was going to be canceled because the bill had not been paid.

Washkuhn’s testimony is important not just for the tax charges against Manafort but also for the bank-fraud counts as well.

Prosecutors allege that Manafort engaged in a scheme to doctor documents submitted to banks, wildly overstating his firm’s 2015 revenue.

After being shown paperwork submitted to two banks indicating Davis Manafort Partners made $4.5 million that year, Washkuhn testified that was “four million more than what was reported on the documents that we created.”

Prosecutors allege that Gates altered the document before it was sent to banks, and they showed jurors messages they said detailed an effort to inflate income.

According to the messages, early in the morning of March 16, 2016, Gates asked Washkuhn to send him a Microsoft Word document version of the previous year’s financial records, rather than a scanned PDF. Word documents can be edited; scanned PDFs cannot be so easily changed. Washkuhn replied to Gates that she could not comply with his request.

After a back-and-forth, Gates then asked her to add $2.6 million in “accrued revenue” for 2015, something he said in a previous email Manafort had requested. She said she could not because the firm operates on a cash basis, recording money when it comes in rather than when it is earned.

Gates then emailed another employee at the bookkeeping firm, Laura Tanner, and, “per email with Heather,” told her to add the $2.6 million to the 2015 income.

It is unclear what Tanner did. But prosecutors showed jurors an attachment Gates sent to Banc of California. “It is similar in some respects” to the Davis Manafort Partners financial statement prepared by the bookkeeping firm, Washkuhn testified, but she said the disclaimer was missing, the font was different, and “the numbers are different.”

Manafort’s lawyer Thomas Zehnle tried to show that Gates played an important part in any financial misdeeds, getting Washkuhn to concede that Gates had authority to direct wire transfers from overseas.

Gates “handled a lot of the business affairs,” Washkuhn said.

But later, the line of questioning seemed to backfire on the defense. In response to questioning, Washkuhn said Manafort kept a tight grip on financial decisions for the firm and himself.

“He approved every expenditure on the personal and business side,” Washkuhn said.

Before the bookkeeper’s testimony, jurors heard more details of Manafort’s expensive tastes.

The owner of a landscaping company in the Hamptons testified that he charged Manafort about $450,000 for landscaping over the years, to maintain the grounds of a one-acre property in Bridgehampton. The lawn featured red flowers in the shape of the letter “M.”

Manafort also spent $20,339 for a video and karaoke system at that house, but that cost was dwarfed by his bills for television and home entertainment systems for his homes on the East Coast, which totaled more than $2.2 million, according to a witness, Joel Maxwell, who said the work was paid for with wire transfers from foreign financial accounts.

On Wednesday, witnesses testified that Manafort spent more than $1 million on business suits and luxury clothes over five years.

The testimony about Manafort’s high-priced purchases has angered the trial judge, T.S. Ellis III, who said Thursday morning that he would not let prosecutors “gild the lily” by asking witnesses to explain in detail Manafort’s spending.

“All the evidence of the fancy suits really is irrelevant and besmirches the defendant,” Ellis said. “It engenders some resentment.”

Prosecutors had filed a motion in the morning asking to be given more leeway in explaining Manafort’s purchases, arguing that doing so was essential to showing the jury evidence that the foreign accounts used to pay for those luxury items were under Manafort’s control. They also said they needed to show Manafort’s profligacy to explain why he would resort to bank fraud when his business foundered.

Although he has been tough on prosecutors at the trial, the judge has been pleasant to the jurors, giving them permission to take a cake to the jury room Friday for what apparently is the birthday of a juror.

Prosecutors also said Gates, the key witness in the case, could testify as early as Friday.

Gates pleaded guilty this year to lying to the FBI and conspiring against the United States, and he agreed to cooperate against his former boss and partner in hopes of receiving a lighter sentence.

Matt Zapotosky contributed to this report.
https://www.washingtonpost.com/world/na ... d289d309b8