Posts

Konstantin Kilimnik Shared Stolen Data Laundered Through Bannon’s Propaganda with State Department

/15 Comments/in , /by

John Solomon is feeding the frothy right with faux scandals based off dubious propaganda again.

What John Solomon’s document really shows

“Konstantin Kilimnik Shared Stolen Data Laundered Through Bannon’s Propaganda with State Department.”

That’s what the title of an article based off a document propagandist John Solomon turned into the latest frothy right shiny object. After all, the fragment of the email exchange between Kilimnik and a guy at State named Eric Schultz that Solomon includes ends with Kilimnik attributing the narrative that Trump is dangerously close to Russia to Hillary solely because Ken Vogel, who wrote an article critical of Manafort, once shared an article critical of Hillary with her team before publishing it. He cites a Breitbart story that, the same day the DNC emails stolen by Russia were released, focused on Vogel.

First, it is definitely HRC and her HQ who launched this shitstorm trying to use construction of Putin=very bad, Putin=Manafort, Manafort=Trump, therefore Trump=Putin=very bad.” If you Google Ken Vogel who wrote the original BS piece — it turns out he is the same journalist who created a controversy a month or so ago by clearing his stories with the DNC prior to submission. http://www.breitbart.com/big-journalism/2016/07/22/ken-vogel-politico-dnc-emails/ .

Just twenty days before Kilimnik wrote this, he had snuck into a cigar bar to meet Paul Manafort and discuss how Manafort planned to win Michigan in the same meeting where they discussed carving up Ukraine. At the time, Manafort’s childhood buddy Roger Stone was wandering around claiming he had advance knowledge of what WikiLeaks had, claims he interspersed with Steve Bannon propaganda. In fact, just the day before Kilimnik wrote this, Stone correctly predicted that WikiLeaks would ultimately drop John Podesta’s emails, which for Stone meant that Trump would have opposition material to counter the attacks on Manafort at the time.

The Mueller Report shows that four days earlier, Kilimnik had told Schultz what Trump’s internal polling data looked like, which is one of the ways the government proved that Manafort lied when he claimed he had only been sharing public data with Kilimnik.

[redacted] with multiple emails that Kilimnik sent to U.S. associates and press contacts between late July and mid-August of 2016. Those emails referenced “internal polling,” described the status of the Trump Campaign and Manafort’s role in it, and assessed Trump’s prospects for victory. 895

895 8/18/16 Email, Kilimnik to Dirkse; 8/18/16 Email, Kilimnik to Schultz; 8/18/ 16 Email, Kilimnik to Marson; 7/27/16 Email, Kilimnik to Ash; 8/18/16 Email, Kilimnik to Ash; 8/ 18/ 16 Email, Kilimnik to Jackson; 8/18/16 Email, Kilimnik to Mendoza-Wilson; 8/19/16 Email, Kilimnik to Patten. [my emphasis]

So at a time when Kilimnik had recently been trading Ukraine for Michigan, he wrote someone at the State Department and offered him up Steven Bannon’s remarkably quick attack on Hillary based off emails stolen by GRU to help Trump (remember, Bannon ran Breitbart at the time).

The latest GOP spin about Kilimnik is that he did not have ties to GRU (even though his Oleg Deripaska contact was sanctioned last year with all the other GRU people behind the 2016 attack), because he was actually a State Department informant. So what Solomon is showing — again, using GOP standards for scandal — is that someone he claims was a State Department informant was stovepiping information from the stolen documents, via Bannon, to State, perhaps in an effort to ratchet up attention on Hillary.

But that’s not the story Solomon tells (nor does Solomon give us the entire document to see what else Kilimnik was stovepiping into State as an alleged informant).

Solomon’s propaganda laundry sources and methods

Before I describe what Solomon’s latest fiction does claim, let’s talk about his sources and methods, which are fairly well-established at this point. Solomon has consistently been used in the effort to undermine the investigation into Trump this way:

  1. Executive or Congressional sources dump documents to Solomon
  2. Solomon writes a logically ridiculous story based off documents, without releasing the entirety of the documents so he can be fact-checked
  3. Congressional sources use Solomon’s story to make claims unsubstantiated by the actual evidence he got leaked but about which they can nevertheless submit bogus legal complaints
  4. The frothy right goes nuts over the latest pseudo scandal

This particular pseudo-scandal is based off the cherry-picked document showing Kilimnik doing what the frothy right accuses Christopher Steele of doing and a misreading of two warrant applications. In addition to the cherry-picked fragment from the Kilimnik email to Schultz, Solomon relies on the following documents:

In recent iterations, Solomon’s modus operandi has also been to make claims about what Mueller didn’t use. To that end, this story relies on the assertion that Mueller’s office got the Kilimnik email, sourced to three “sources familiar with the documents.”

Special counsel Robert Mueller’s team and the FBI were given copies of Kilimnik’s warning, according to three sources familiar with the documents.

Those three sources sound awfully similar to the three sources Solomon based his earlier story claiming Kilimnik was a State informant on.

Three sources with direct knowledge of the inner workings of Mueller’s office confirmed to me that the special prosecutor’s team had all of the FBI interviews with State officials, as well as Kilimnik’s intelligence reports to the U.S. Embassy, well before they portrayed him as a Russian sympathizer tied to Moscow intelligence or charged Kilimnik with participating with Manafort in a scheme to obstruct the Russia investigation.

Manafort obtained all these documents in discovery, so it would be unsurprising if that discovery found its way to Solomon.

So this fits the John Solomon propaganda laundry pattern:

  1. Sources that may have access to Manafort’s discovery dump documents to Solomon
  2. Solomon writes a logically ridiculous story, in this case hiding part of a document that might show more of how Kilimnik himself was laundering documents stolen by Russia and magnified by Steve Bannon into the State Department
  3. According to an update to Solomon’s story, Mark Meadows, “is asking the Justice Department inspector general to investigate the FBI and prosecutors’ handling of the Manafort warrants, including any media leaks and evidence that the government knew the black ledger was potentially unreliable or suspect evidence”
  4. The frothy right goes nuts (and Don Jr. goes even more nuts) (Update: Matt Gaetz just entered this into the record)

Solomon’s illogical misreading

Now that we’ve established that this is yet another instance of Trump supporters using Solomon as a tool to launder illogical propaganda to fire up the frothy right, let’s look at how he misreads the evidence.

Solomon argues that the “Black Ledger” allegedly showing that Paul Manafort received illicit payments from his Ukrainian paymasters was the excuse the FBI used to “resurrect” the criminal case against him, and that they used it after having been “warned repeatedly” that it was fake.

In search warrant affidavits, the FBI portrayed the ledger as one reason it resurrected a criminal case against Manafort that was dropped in 2014 and needed search warrants in 2017 for bank records to prove he worked for the Russian-backed Party of Regions in Ukraine.

There’s just one problem: The FBI’s public reliance on the ledger came months after the feds were warned repeatedly that the document couldn’t be trusted and likely was a fake, according to documents and more than a dozen interviews with knowledgeable sources.

[snip]

For example, agents mentioned the ledger in an affidavit supporting a July 2017 search warrant for Manafort’s house, citing it as one of the reasons the FBI resurrected the criminal case against Manafort.

“On August 19, 2016, after public reports regarding connections between Manafort, Ukraine and Russia — including an alleged ‘black ledger’ of off-the-book payments from the Party of Regions to Manafort — Manafort left his post as chairman of the Trump Campaign,” the July 25, 2017, FBI agent’s affidavit stated.

So there are two steps to his argument:

  1. The ledger served as an important reason behind the “resurrection” of the investigation into Manafort
  2. FBI Agents knew the ledger was fake but used it anyway

In addition, Solomon recycles a claim the very Manafort-friendly TS Ellis found unpersuasive about an FBI/Andrew Weissmann role in the AP story cited in the warrant application.

The FBI did not claim that the ledger served as an important reason behind the “resurrection” of the investigation into Manafort

Logically, all the documents Solomon have been leaked only matter if it is true that the ledger was a key reason why the investigation into Manafort remained ongoing in 2017.

But neither of the warrants show that.

The July warrant is to search Manafort’s condo in conjunction with FBAR, FARA, bank fraud, money laundering, and foreign national donations (this is the first known warrant tied to the June 9 meeting). The reference to the Black Ledger stories comes in a paragraph specifically introduced as “by way of background.” It’s background — critical background for why Manafort still didn’t want to properly register under FARA — but not submitted as proof at all.

6. By way of background concerning Manafort, based on publicly available information, in March of 2016, Manafort officially joined Donald J. Trump for President, Inc. (the ‘Trunp) Campaign”), the presidential campaign of then candidate Trump, in order to, among other things, help.manage the delegate process for the Republican National Convention. In May of 2016, Manafort became chairman of the Trump Campaign. In June of 2016, Manafort reportedly became de facto manager for the Trun^ Campaign with the departure of prior campaign manager Corey Lewandowski. On August 19, 2016, after public reports regarding connections between Manafort, Ukraine, and Russia – including an alleged “black ledger” of off-the-book payments from the Party of Regions to Manafort – Manafort left his post as chairman of the Trump Campaign.

The very next paragraph includes a transition marking the beginning of the guts of the proof of probable cause:

Portions of the information set forth below

In other words, the ledger reference only serves to explain why Manafort got fired, which is important background for why he was hiding his sleazy influence peddling. It is not part of the probable cause proof at all.

In any case, the reference is actually to both the NYT and AP’s stories, the latter of which only reported on the extent of Manafort’s undisclosed lobbying and didn’t reference the ledger at all. (Note, Vogel was not involved in any of this, which makes Kilimnik’s claim that all the ties of Trump to Putin came from him tough to understand.)

Notably, Solomon doesn’t mention the May 2017 affidavit to search Manafort’s storage unit, which, because it comes earlier, is a better read of how the government came to focus on Manafort (in significant part because it was not part of Mueller’s investigation), and which was incorporated by reference in the paragraph following the one mentioning Manafort’s resignation and attached to the July affidavit. That affidavit describes the ledger as something the FBI was actively investigating.

20. In addition, law enforcement agents are investigating whether or not all income received by Manafort and Gates was properly reported as required under U.S. law. In the summer of 2016, investigators from Ukraine’s National Anti-Corruption Bureau obtained a handwritten ledger said to belong to the Party of Regions (“ledger”). The ledger contains hundreds of pages of entries purporting to show payments made to numerous Ukrainians and other officials

21. The ledger contained entries indicating that Manafort had been paid $ 12.7 million by the Party of Regions in 22 separate payments that occurred between 2007 and 2012. U.S. law enforcement is investigating whether any of these sums we paid to Manafort or (jates or others for their benefit.

So when Theresa Buchanan approved the July warrant, she was reminded that she had already approved the May warrant describing the ledger as still under investigation.

The October warrant was to seize the bank accounts Manafort got from the Federal Savings Bank in Chicago — these are the loans that Manafort got by trading a Trump campaign position to Steve Calk. The passage in question appears in a section titled, “Evidence of DMI’s work on behalf of the Party of Regions in the United States in 2005,” following a discussion of how under the Bush Administration, Manafort secretly shared details from NSC discussions about Ukraine with Rinat Akhmetov to show that “Our strategy in the United States is working.”

As released, it’s not actually clear how the FBI Agent is using the April AP story, which confirms Manafort received a payment  in 2007 that may be associated with the 2005 and 2006 lobbying described in the section. The probable cause assertion remains redacted, which might mean it involved sensitive intelligence. The only thing unredacted, however, is that there are payments in the ledger that match known payments Manafort got in 2007 and 2009, which is a way to introduce Manafort’s claim, in 2017, that he got paid according to his clients’ wishes.

That quote comes from this non-denial denial that the ledger could be true based off the fact that Manafort never got paid in cash.

In a statement to the AP on Tuesday, Manafort did not deny that his firm received the money but said “any wire transactions received by my company are legitimate payments for political consulting work that was provided. I invoiced my clients and they paid via wire transfer, which I received through a U.S. bank.”

Manafort noted that he agreed to be paid according to his “clients’ preferred financial institutions and instructions.”

On Wednesday, Manafort’s spokesman Jason Maloni provided an additional statement to the AP, saying that Manafort received all of his payments via wire transfers conducted through the international banking system.

“Mr. Manafort’s work in Ukraine was totally open and appropriate, and wire transfers for international work are perfectly legal,” Maloni said.

He noted that Manafort had never been paid in cash. Instead, he said Manafort’s exclusive use of wire transfers for payment undermines the descriptions of the ledger last year given by Ukrainian anti-corruption authorities and a lawmaker that the ledger detailed cash payments.

Manafort has pled guilty to the two key details included in this passage in the affidavit: that he was lobbying for the Party of Regions as early as 2006, and that he was trying to hide that relationship (see ¶¶4, 6, and 7 for those admissions). So the assertion in question — that Manafort was lobbying for Akhmetov in 2006 and got paid for it in 2007 — was not faulty. Moreover, the AP story in question specifically said that it hard confirmed those two payments, which would seem to raise questions about 2016 claims that the ledger was totally unreliable.

So to sum up:

  • The May 2017 warrant Solomon doesn’t mention but which was incorporated by reference and attachment into the July one describes the FBI still investigating the ledger
  • The July 2017 warrant doesn’t rely on either the ledger or the story about it as proof; rather, the story about it (but not the ledger) is described as background that explains why Manafort continued to lie about his ties to Ukraine
  • What the FBI used the ledger for in October 2017 not only had been corroborated after the 2016 evidence claiming the ledger was totally bunk, but Manafort has since pled guilty to the substance it addresses

The key claim behind Solomon’s breathless propaganda is bullshit.

FBI Agents knew the ledger was fake but used it anyway

How the FBI actually used the ledger each of those three times is important to Solomon’s claim that the FBI “knew” the ledger was fake but used it anyway. Solomon claims that “documents and more than a dozen interviews with knowledgeable sources” prove that “the feds were warned repeatedly that the document couldn’t be trusted and likely was a fake.” But he only provides two pieces of evidence. First, he cites Nazar Kholodnytsky’s claims about the ledger (but not records of how those he spoke with responded).

Ukraine’s top anticorruption prosecutor, Nazar Kholodnytsky, told me he warned the U.S. State Department’s law enforcement liaison and multiple FBI agents in late summer 2016 that Ukrainian authorities who recovered the ledger believed it likely was a fraud.

“It was not to be considered a document of Manafort. It was not authenticated. And at that time it should not be used in any way to bring accusations against anybody,” Kholodnytsky said, recalling what he told FBI agents.

Kholodnytsky has been at the center of Trump-related and his own scandals in recent months, so I’m interested in when Solomon interviewed him (and whether Rudy Giuliani was involved). But assuming his representation of what he told the FBI is true and was confirmed (which, if true, Manafort would have gotten in discovery, but which Solomon doesn’t mention), it doesn’t change that the ledger was not used to bring accusations against anyone — though was still being investigated in 2017.

Nor does Solomon’s reliance on Kilimnik’s claims help. Kilimnik, after all, said, “I am pretty sure Paul is not vulnerable on either black cash or Fara stuff.” Not only was Kilimnik wrong about both Manafort and his other American partner Sam Patten’s vulnerability on FARA, but he took a number of actions over the course of the investigation into Manafort — working with Alex van der Zwaan to suppress evidence of FARA violations back in 2012 and reaching out to other consultants to hide their US lobbying for Manafort — that led to criminal charges for himself and others specifically on FARA. That is, Kilimnik made these claims during a period when he was involved in several crimes to try to save Manafort from FARA crimes, so there’s no reason to treat what he says as reliable.

Further, the same email makes claims about Ukraine — notably, that “nobody will do anything for Ukraine other than Ukrainians” — that are in striking contrast to the actions he had taken 3 weeks earlier to get both the US and Russia to impose a solution on Ukraine, with Manafort’s help.

And ultimately, Kilimnik makes the same non-denial denial that Manafort was still making the following year.

I know for a fact that he did not know about the black cash existence — he never focused on such things, and could not have possibly taken large amounts of cash across three borders. It was always a different arrangement — payments were in wire transfers to his companies, which is not a violation (sort of SuperPAC scheme) and then he took his personal fee and fully paid his taxes etc.

Denying that Manafort knew of any cash payments is meaningless, since he also tried to keep plausible deniability about his Cayman shell companies. But it’s also now proven (in part by Manafort’s guilty pleas) that the shell companies he used weren’t a SuperPAC, his transfer of funds for payment weren’t all legal, and he didn’t pay his taxes.

In short, the smoking gun document Solomon has the right wing all frothy over actually shows that Kilimnik was at best ignorant and more likely willfully lying.

Solomon makes claims that even TS Ellis found unpersuasive

But as is his wont, Solomon doesn’t stop there. He tries to resuscitate a claim Manafort tried as part of his EDVA trial that Manafort friendly judge TS Ellis already ruled was bogus, suggesting that FBI and DOJ illegally leaked to the AP reporters behind one of these stories.

There are two glaring problems with that assertion.

First, the agent failed to disclose that both FBI officials and Department of Justice (DOJ) prosecutor Andrew Weissmann, who later became Mueller’s deputy, met with those AP reporters one day before the story was published and assisted their reporting.

An FBI record of the April 11, 2017, meeting declared that the AP reporters “were advised that they appeared to have a good understanding of Manafort’s business dealings” in Ukraine.

So, essentially, the FBI cited a leak that the government had facilitated and then used it to support the black ledger evidence, even though it had been clearly warned about the document.

In April 2018, Manafort’s team tried to argue that prosecutors had been illegally leaking about him, based in part on the April 2017 AP story. The government noted that nothing in the stories reflected grand jury information, the accusation lodged by Manafort. On June 29, Judge Ellis held a motions hearing including testimony from one of the FBI agents involved in the meeting with the AP, Jeffrey Pfeiffer. Pfeiffer covered both the AP meeting and the search of the storage facility, meaning Judge TS Ellis heard his testimony on both these issues at once. Pfeiffer described that he and others at the AP meeting actually no commented most questions, but did get investigative information regarding the storage unit from the AP.

Q. Now, you testified earlier that you searched the storage unit. How did you come to understand that Mr. Manafort used a storage unit?

A. I don’t recall exactly. It was either through my investigative efforts or through a meeting that occurred with reporters of the Associated Press.

[snip]

Q. And how did the Government representatives respond?

A. Generally, no comment as far as questions involving any sort of investigation.

Q. And based on the meeting, did it appear as though the reporters had conducted a substantial investigation with respect to Mr. Manafort?

A. They had.

Q. During that meeting, did one of the reporters mention a storage unit in Alexandria, Virginia, associated with Mr. Manafort?

A. He did.

Under cross-examination, Pfeiffer reiterated that the government mostly gave no comment to the AP, and he didn’t remember a comment that said the AP had a good understanding of Manafort’s business.

Q. So in reviewing some of the Jencks material that I was just provided, I wanted to ask you about a specific section, which is at the end of one of the memos that was written with respect to that meeting, and I want your comment on it. It says, “at the conclusion of the meeting, the AP reporters asked if we would be willing to tell them if they were off base or on the wrong track, and they were advised that they appear to have a good understanding of Manafort’s business dealings.” Now, you would agree that’s not “no comment,” correct?

A. Correct.

Q. Okay. And when it says, “they were advised,” who on the Government’s side was advising these AP reporters with respect to the nature of Mr. Manafort’s business dealings?

A. I don’t recall that being said, so I don’t — I wouldn’t be able to tell you who said it.

Solomon provides just one of the two Electronic Communications associated with that meeting. The one by Pfeiffer has a different focus than the one by Karen Greenaway that Solomon links, with much less focus on the ledger and much more on Manafort’s financial crimes. It describes the FBI giving no comment over and over. But both ECs make it clear that the AP came in with the ledger story. But the one Solomon does link shows the AP reporters raising two issues that show up in the warrant application: how Manafort first got introduced to Rinat Ahmetov and that Manafort shared a classified NSC document with Akhmetov.

The redaction shows that the FBI had some comment on the Brit who had introduced Akhmetov to Manafort, but didn’t tell the AP that. Nothing in these documents show that the FBI provided substantive information to the AP — they show the opposite, that AP provided information to the FBI and the FBI repeatedly offered no comment. They also definitively show that the AP came into the meeting with information about the ledger.

At the end of the hearing with Pfeiffer, TS Ellis took the leak issue under advisement, meaning he didn’t find Manafort’s case all that persuasive. A week later, Manafort tried to interest Ellis again, to no avail. In short, a very Manafort friendly judge has looked at both these questions and found them insufficiently persuasive to rule on. Solomon doesn’t mention that fact to his readers.

There’s abundant evidence to refute Solomon’s frothy claims. More importantly, there’s evidence that his smoking gun evidence, the email from Kilimnik to Schwartz, actually shows that Kilimnik was actively lying about both Ukraine and Manafort in the period when Republicans claim he was an honest informant to the State Department.

But it’s not John Solomon’s job to tell what the evidence actually shows.

As I disclosed last July, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post. 

Two Trajectories: Sleazy Influence Peddler Paul Manafort and Foreign Agent Prosecutor Brandon Van Grack

/127 Comments/in , , /by

Like many, while I expected TS Ellis to give Paul Manafort a light sentence, I’m shocked by just how light it was.

Ellis gave Manafort 47 months of prison time for crimes that the sentencing guidelines say should start at a 19 year sentence. Even if Amy Berman Jackson gives Manafort the stiffest sentence she can give him — 10 years — and makes it consecutive, he’ll still be facing less than the what sentencing guidelines recommend. Ellis even declined to fine Manafort beyond the $24 million he’ll have to pay in restitution (Zoe Tillman lays out the money issues here).

There are a number of reasons to be outraged by this.

Ellis explicitly suggested that Manafort’s crimes were less serious than similar organized crime that people of color would commit. In the wake of this sentence, any number of people (especially defense attorneys) have pointed to non-violent criminals facing more prison time than Manafort. That said, I agree with those who suggest we should aim to bring those other sentences down in line with what the civilized world imposes, and not instead bump white collar criminals up to the barbaric levels that come out of the drug war.

Ellis gave this sentence even though Manafort expressed no remorse. Ellis commented that “I was surprised that I did not hear you express regret for engaging in wrongful conduct. In other words, you didn’t say, ‘I really, really regret not doing what the law requires,'” but nevertheless sentenced him as if he had.

Perhaps most infuriating were the backflips Ellis did to spin Paul Manafort as a good man. He emphasized that Manafort was “not before the court for any allegation that he or anybody at his direction colluded with the Russian government to influence the 2016 presidential election,” which is true; but Ellis received the breach determination materials showing that at a time when Manafort was purportedly cooperating, he instead lied about sharing polling data with a suspected Russian asset while discussing a Ukrainian peace deal that he knew amounted to sanctions relief, a quid pro quo. Because those materials go to the issue of whether Manafort took responsibility and was a risk for recidivism, they were fair game for consideration, but Ellis didn’t consider them.

Indeed, because of time served, Ellis effectively sentenced Manafort to an equivalent sentence that Michael Cohen faces having committed an order of magnitude less financial fraud, pled guilty, and provided limited cooperation to the government. Effectively, then, Ellis has sanctioned Manafort’s successful effort to avoid cooperating in the case in chief, on how he and Trump conspired with Russia to exploit our democratic process.

Instead of referring to the materials on Manafort’s refusal to cooperate, Ellis instead just regurgitated defense materials and claimed that aside from stealing millions of dollars from taxpayers and whatever else went on before Amy Berman Jackson, Manafort had “lived an otherwise blameless life.”

And that’s where I step away from a generalized discussion of the barbaric nature of our criminal justice system to look specifically at the barbaric nature of what Paul Manafort has done with his life. I feel much the way Franklin Foer does.

In an otherwise blameless life, Paul Manafort lobbied on behalf of the tobacco industry and wangled millions in tax breaks for corporations.

In an otherwise blameless life, he helped Philippine President Ferdinand Marcos bolster his image in Washington after he assassinated his primary political opponent.

In an otherwise blameless life, he worked to keep arms flowing to the Angolan generalissimo Jonas Savimbi, a monstrous leader bankrolled by the apartheid government in South Africa. While Manafort helped portray his client as an anti-communist “freedom fighter,” Savimbi’s army planted millions of land mines in peasant fields, resulting in 15,000 amputees.

[snip]

In an otherwise blameless life, he spent a decade as the chief political adviser to a clique of former gangsters in Ukraine. This clique hoped to capture control of the state so that it could enrich itself with government contracts and privatization agreements. This was a group closely allied with the Kremlin, and Manafort masterminded its rise to power—thereby enabling Ukraine’s slide into Vladimir Putin’s orbit.

[snip]

In an otherwise blameless life, he produced a public-relations campaign to convince Washington that Ukrainian President Viktor Yanukovych was acting within his democratic rights and duties when he imprisoned his most compelling rival for power.

In an otherwise blameless life, he stood mute as Yanukovych’s police killed 130 protesters in the Maidan.

Paul Manafort invented the profession of sleazy influence peddler. His own daughter once acknowledged, “Don’t fool yourself. That money we have is blood money.” And our democracy, as well as more corrupt regimes around the globe where Manafort was happy to work, are much less just because of Manafort’s life’s work.

Which is why I take more solace in something that happened the night before Manafort’s sentencing: A CNN report that DOJ has put Brandon Van Grack — a prosecutor who, under Mueller, prosecuted Mike Flynn and his sleazy influence peddler business partners — in charge of a renewed effort to crack down on unregistered sleazy influence peddlers.

The initiative at the Justice Department to pursue violations of the Foreign Agents Registration Act, which requires that an entity representing a foreign political party or government file public reports detailing the relationship, will be overseen by Brandon Van Grack, who left Mueller’s team in recent months to rejoin the national security division.

Van Grack’s appointment to the newly created position and the Justice Department’s interest in expanding its pursuit of foreign influence cases stemmed largely from the impact of Russian operations on the 2016 presidential election, John Demers, the head of the national security division, said Wednesday at a conference on white-collar crime.

With Van Grack’s new role, the Justice Department will shift “from treating FARA as an administrative obligation and regulatory obligation to one that is increasingly an enforcement priority,” Demers said.

He also pointed to the impact of a recent settlement with one of the country’s highest-profile law firms — Skadden, Arps, Slate, Meagher & Flom LLP — on the department’s decision to escalate its enforcement in that area.

[snip]

Demers added that the Justice Department is considering seeking congressional authorization for administrative subpoena power to enforce the Foreign Agents Registration Act, which it currently lacks.

“That’s something that we’re taking a hard look at,” he said. Referencing Skadden, he added: “Do I think the firm would have behaved differently if they had received a subpoena versus they had just received a letter? Yes.”

This marks a decision to treat FARA violations — sleazy influence peddling that hides the ultimate foreign customer — as a real risk to our country. As I have laid out in my comparison of Manafort’s “otherwise blameless life” and Maria Butina’s efforts to infiltrate right wing politics, a venal insider with an already rich political network will be far more effective (and insidious) than even a beautiful woman backed by a mobbed up foreign government official and abetted by her own washed out Republican insider.

I don’t know what Mueller is doing with all the evidence of a conspiracy that he continues to protect. I don’t know that he’ll be able to deliver a prosecutorial conclusion that will deliver justice for the sleazy things that Trump did to win the election. Prosecuting very powerful people is very difficult, and we shouldn’t forget that.

But one other point of this entire investigative process was to learn lessons, to make it harder for hostile outsiders to hijack our democratic process going forward.

In letting Manafort off with a metaphorical wrist-slap, TS Ellis did nothing to deter others who, like Manafort, will sell out our country for an ostrich skin jacket. Even ABJ will face some difficult challenges in DC when she tries to sentence FARA crimes (particularly those of Sam Patten, who cooperated) without precedents to do so.

But the way to build those precedents — the way to establish a record that causes a Skadden Arps or a Rob Kelner to treat FARA registration as the official declaration to the government that it is — is to pursue more of these cases, against sleazy influence peddlers working for all foreign entities, not just the ones we despise.

So Manafort may get off easy for helping Russia interfere in our election in a bid to line up his next gig white-washing brutal oligarchs.

But along the way, our justice system may be adapting to the certainty that he did not live an otherwise blameless life

As I disclosed last July, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post. 

Manafort’s Bid for a Pardon: No Collusion No Collusion No Collusion No Collusion No Collusion No Collusion No Collusion No Collusion

/93 Comments/in , /by

Paul Manafort submitted his DC sentencing memo. I lay out some of his more ridiculous claims about wanting to serve public servants like Mobutu Sese Seko, Ferdinand Marcos and Jonas Savimbi and his use of “garden variety” to describe his epic corruption in this thread. Particularly given the way that parts of this memo will surely piss off Amy Berman Jackson (and probably even TS Ellis, his EDVA judge), the real substance of his argument is this:

Importantly, the defendant has not been charged with any crimes related to the primary focus of the Special Counsel’s investigation; i.e., “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump[,]” otherwise referred to as “Russian collusion” by the national media.

[snip]

As said at the beginning of the case, there is no evidence of Russian collusion.

[snip]

Shortly after Mr. Trump’s election, the Acting Attorney General appointed the Special Counsel in May 2017 to investigate allegations that his campaign colluded with the Russian government to influence the 2016 election. The scrutiny was (and remains) intense because the investigation involves a sitting U.S. president.

[snip]

Rousing the defendant and his wife from bed, the federal agents entered their home with guns drawn and searched high and low—not for evidence of Russia collusion—but rather for evidence of tax and financial crimes and Mr. Manafort’s failure to file forms under the obscure FARA statute.

[snip]

In October 2017, unable to establish that Mr. Manafort engaged in any Russia collusion, the Special Counsel’s Office charged Mr. Manafort in the District of Columbia with crimes that did not relate to Mr. Manafort’s work on the 2016 U.S. presidential campaign and generally involved his employment years ago by Ukrainian oligarchs, politicians and the Party of Regions. Several months later, in February 2018, the Special Counsel increased the pressure by charging Mr. Manafort in the Eastern District of Virginia (EDVA) with tax fraud, failing to report foreign bank accounts, and bank fraud—allegations, once again, that predated the 2016 campaign or that were unrelated to collusion between Mr. Trump’s campaign and the Russian government.5

5 As U.S. District Judge T.S. Ellis, III noted in the EDVA matter, the Special Counsel’s strategy in bringing charges against Mr. Manafort had nothing to do with the Special Counsel’s core mandate—Russian collusion—but was instead designed to “tighten the screws” to compel Mr. Manafort to cooperate and provide incriminating information about others. See United States v. Manafort, 18-CR-0083-TSE (EDVA), Tr. of May 4, 2018 Motions Hearing at 5

[snip]

The Special Counsel’s investigation and prosecution in this case (and the EDVA case) do not charge him with anything related to Russia collusion or to the presidential campaign. 34

34 As Judge Ellis noted in the EDVA case: “And so what is really going on … is that this indictment [was] used as a means of exerting pressure on the defendant to give you information that really is in [the Special Counsel’s] appointment, but itself has nothing whatever to do with it.” United States v. Manafort, 18-CR0083-TSE (E.D.Va. 2018), Tr. of May 4, 2018 Motions Hearing at 8.

[snip]

The sentences already imposed in other cases that have been investigated and/or prosecuted by the Special Counsel’s Office reflect the fact that courts recognize that these prosecutions bear little to no relation to the Special Counsel’s core mandate of investigating allegations that the Trump campaign colluded with the Russian government to influence the 2016 election.

Particularly given ABJ’s finding that Manafort lied about how he gave the Russian government polling data via Konstantin Kilimnik amid conversations about a sanctions-ending Ukraine “peace” plan, and given that the warrant to search his Alexandria condo explicitly including Russian conspiracy in the affidavit, the eight different claims Mueller wasn’t searching for and didn’t find “collusion” are false.

But that’s doesn’t matter. Manafort’s job — if he wants the pardon he has been playing for all this time — is to keep repeating that lie, just like the guy he’s speaking to.

As I disclosed last July, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post. 

Mueller Juggles Plea Agreement Housekeeping

/15 Comments/in , /by

In the last two days, both Rick Gates’ and Paul Manafort’s plea deals have made news.

In Gates’ case, his lawyers have filed an unopposed motion to liberate him from his GPS device and curfew, arguing that the leverage of the plea deal itself is enough to keep him on the straight and narrow.

The plea agreement contains very serious consequences for Mr. Gates should he violate any of its terms or conditions. The advantages that attach to strict compliance with that agreement, and the extraordinary disincentives to violating that agreement, alone guarantee Mr. Gates’s appearance at any scheduled Court proceeding. Over a substantial period of time, now approaching one year, Mr. Gates has demonstrated his resolve to comply with all conditions of his release. Removing the GPS monitor and allowing Mr. Gates to travel within the Eastern District of Virginia and District of Columbia without restriction will surely not increase the risk of flight or make it less likely that Mr. Gates will appear in Court when required to do so.

The more interesting bit comes when, in a bid to talk up Gates’ cooperation, his attorneys reveal he’s been meeting with other prosecutors.

Both before the entry of the plea, and for many weeks thereafter, Mr. Gates, whenever requested, traveled to Washington, D.C., to appear at the Office of Special Counsel to be interviewed as part of his cooperation agreement. Those sessions have been numerous and they continue to this day.

[snip]

These meetings with the Office of Special Counsel continued during the weeks preceding the trial of co-defendant Paul Manafort in the United States District Court for the Eastern District of Virginia.

[snip]

Following that trial, Mr. Gates has continued to cooperate with the Special Counsel and with other federal investigators by attending current meetings at which he provides additional information. [my emphasis]

Rick Gates met in March and he met in July and he met in September, Thomas Green says. It’s the “other federal investigators” that’s of interest, as it suggests his cooperation extends beyond Mueller’s case in chief.

But that may not mean all that much. After all, Gates’ cooperation would be useful for the three cases Mueller referred to SDNY (involving Tony Podesta, Vin Weber, and Greg Craig), as well as for Stephen Calk, the Chicago banker who gave Manafort a loan in hopes of getting an appointment with the Trump Administration. Gates would surely also have information that might corroborate Sam Patten’s cooperation.

Still, it’s possible those “other federal investigators” include some of the “garden variety” Trump corruption I keep suggesting might also get spun off, such as the non-Russian Inauguration pay-to-play.

Meanwhile, in EDVA, TS Ellis is being TS Ellis. Yesterday, he filed an order saying that the parties in Manafort’s EDVA prosecution can’t just defer resolution of the ten hung counts against him until after Mueller is done with his cooperation. He scheduled a hearing for a week from Friday, on October 19, so the process of sentencing can begin. At that hearing, Ellis expects the parties to “address dismissal of the outstanding counts on which the jury deadlocked.”

Dismissing the charges may be no big deal. Manafort is on the hook for 210 – 262 months if he breaches his plea agreement in DC, before any state charges, and some of the charges that Ellis would dismiss could be charged in VA, aided by Manafort’s admission of guilt in them in the plea. As Popehat notes, cleaning up these charges is consistent with good docket management.

The push for the government to move forward on cooperation is more interesting as it may require the government to weigh in on the value of Manafort’s cooperation while he’s still discussing things with Mueller’s team. Of particular interest, any discussion on cooperation may reveal how much Manafort has cooperated against the President.

I’m also interested in timing. Manafort’s lawyers submitted their notice that they won’t challenge anything that happened in that trial right on schedule, on September 20. The government filed their response just under the week later that they had under Ellis’ schedule, on September 26. But Ellis took two weeks before he issued this hurry up and wait order, setting a hearing for October 19, at which any sentencing schedule is likely to be after Manafort’s next status hearing in DC.

In any case, it’s not clear that Ellis’ haste will help Manafort much. Even if Ellis is perturbed that Mueller used his courtroom to flip a witness against Trump, the PSR will show that Manafort is an admitted criminal in the DC charges, meaning his sentence should be harsher than it would with any kind of cooperation assistance. And prosecutors can just defer any 5K statement, and instead account for cooperation with a Rule 35 motion submitted after the fact. In any case, the plea envisions concurrent sentencing, and if Manafort does’t cooperate willingly, he’ll face 10 years in the DC plea, which is longer than Ellis is likely to have sentenced him on anyway.

So it seems like Mueller can still retain the breathtaking upper hand they have with Manafort, and defer any public statement on cooperation until later.

A Comparison of Rick Gates and Paul Manafort’s Plea Deals

/45 Comments/in , , /by

Because I wanted to get a sense of what Gates won by pleading guilty and cooperating with Mueller’s team earlier, I decided to compare the two plea deals. (Gates, Manafort)

Manafort’s a bigger criminal than Gates

Obviously, the biggest difference comes in recommended sentence. While the government got Gates for a lie to prosecutors and got Manfort for witness tampering, the rest of the conduct was largely the same. Nevertheless, for a variety of reasons (Manafort was the lead and Gates benefitted from being called a minor player, Manafort’s obstruction gets added on top whereas Gates’ lie does not, Manafort got way more money out of the deal) the sentence ranges end up dramatically different.

Manafort’s advisory sentencing range works out to 210-262 months, whereas Gates’ range is 57-71 months.

The government is intent on taking all of Manafort’s stuff

The Manafort plea includes over three pages laying out how the government is going to take his ill-gotten gains. Given my newfound obsession with Paul Manafort’s forfeitures, I’ll write that up separately (or better yet make bmaz, who actually knows something about how this works, do so). The short version, though, is the government is intent on making sure they’ll get it all.

The EDVA charges

While this plea only deals with the charges in DC, the plea is meant to work with the EDVA charges. So for example, Manafort’s plea required him to admit he was guilty of the 10 hung charges in EDVA and prohibits him to appeal that case in any way (and includes the one bank account he had saved from forfeiture in the EDVA trial in the forfeiture in this plea). Manafort’s plea notes that if he is sentenced in EDVA before DC, he will have a criminal history for the purposes of sentencing. The plea promises to recommend that both his EDVA and DC sentences run concurrently (which probably would have happened anyway), but notes that neither judge, Amy Berman Jackson nor TS Ellis, is bound by the plea.

Gates was gagged

Perhaps most interesting pertains to Section 8, the description of cooperation each man has to offer. This is mostly boilerplate, and for both includes a few things in boilerplate bullet points — most  notably the requirement to participate in undercover activities — that won’t apply to either men (though Gates likely did still have documents to turn over whereas Manafort likely doesn’t).

But Gates’ plea has a bullet point Manafort’s doesn’t.

The defendant agrees not to reveal his cooperation, or any information derived therefrom, to any third party without prior consent of the Office.

In other words, the prosecutors anticipated sharing secrets with Gates that might blow up their case. They appear to have no such concerns with Manafort. Possibly, he has already seen such details in the 302s he got from Gates; he would be bound to secrecy about those under the DC protective order.

Still, there would almost certainly be things that Manafort would be discussing going forward, and he doesn’t appear to be bound to keep that secret.

Update: Andrew Prokop notes one thing I missed: the language introducing what kind of cooperation will be required in Gates says he’ll be working with “this Office,” whereas Manafort’s says he’ll be cooperating with “the Government.” I agree with him that suggests Manafort may still be cooperating after the Mueller office has shifted all its prosecutions elsewhere and will be cooperating in other jurisdictions (for example, against Tony Podesta, Vin Weber, and Greg Craig in SDNY). Anybody who has ever broken the law with Manafort should be securing legal representation if they haven’t already.

A slightly larger obligation to Gates

There’s one sentence at the end of the Government’s Obligation section in the Gates plea. After it says he can argue for any sentence below the advisory guidelines, it says,

Depending on the precise nature of the defendant’s substantial assistance, the Office may not oppose defendant’s application.

I’m not sure what to make of the difference — perhaps it suggests the government expected Gates might have that kind of argument to make?

Note, too, that the 5K language in the Manafort plea is actually plural, meaning if he cooperates a lot he’ll be able to ask for a lesser sentence in EDVA too.

Pardon-proofing the statute of limitations

The statute of limitations paragraph, which allows the government to prosecute the underlying crimes and any other crimes not prosecuted if “any plea or conviction [is…] set aside or dismissed for any reason,” even after the statute of limitations toll includes this language in the Manafort plea that is not present in the Gates plea:

The Office and any other party will be free to use against your client, directly and indirectly, in any criminal or civil proceeding, all statements made by your client, including the Statement of the Offense, and any of the information or materials provided by your client, including such statements, information, and materials provided pursuant to this Agreement or during the course of debriefings conducted in anticipation of, or after entry of, this Agreement, whether or not the debriefings were previously a part of proffer-protected debriefings, and your client’s statements made during proceedings before the Court pursuant to Rule 11 of the Federal Rules of Criminal Procedure.

It also repeats that this language applies to the conduct described in the Statement of the Offense “or any other crimes that the Government has agreed not to prosecute.”

Some lawyers believe this language generally and the addition specifically provides further insurance against pardon. If Trump pardons Manafort for the crimes he has just pled guilty to, the government will then be able to go after him for the other crimes he just told the grand jury about, crimes which are probably worse and for which the President is a co-conspirator.

Gates can’t even write a story about Paul Manafort’s sleazy influence peddling

There are two slight differences under the section enumerating trial rights. Both are prohibited from profiting off their stories. But those prohibitions are described differently. Gates many not make money on stories about his:

work for Paul Manafort, the transactions alleged in the Indictment, or the investigation by the Office or prosecution of any criminal or civil cases against him.

Whereas Manafort may not make money on stories about,

the conduct encompassed by the Statement of the Offense, or the investigation by the Office or prosecution of any criminal or civil cases against him.

There’s also a really subtle difference about how proffer statements might be used. Gates waived the right to object “to the Government’s use” of his proffer statements (which started on January 29, almost a month before he pled). Manafort waived the right to object to “the use” of his proffer statements, suggesting Mueller’s team might know of other venues (or branches of government) besides the Federal government where those statements might be used.

Gates preserves two potential collateral attacks on his sentence

Gates preserved two additional rights in the collateral attacks section. First, if the sentencing range for his crimes gets lowered in the future, he can challenge that under 18 USC §3582(c)(2). Additionally, he could also challenge the sentence if newly discovered evidence comes available. Manafort has neither of these protections.

The government can declare Manafort in breach of agreement based on good faith

With Gates, the standard the government has to prove to argue he has breached his agreement is preponderance of the evidence or, in case of committing a crime, probable cause. With Manafort, the government only has to prove “good faith.”

Jeannie Rhee gets involved

This may be a minor (or huge) issue. But there’s one difference to the prosecutors who signed these pleas. Andrew Weissman, Greg Andres, and Kyle Freeny are on both. But whereas Brian Richardson signed Gates’ plea, Jeannie Rhee signed Manafort’s. That’s interesting because she has been heavily involved in the Roger Stone investigation, but she was also involved in the two Russian indictments.

The Objection that Made Mueller’s Case

/125 Comments/in , /by

This will be a grandiose statement, but what the fuck, it’s a crazy day.

The moment when Robert Mueller made his case came on August 7 when Greg Andres objected to a line of Kevin Downing’s cross-examination of Rick Gates.

The lawyers went into a sidebar with Judge Ellis. According to a successful prosecution motion to seal that part of the sidebar, the two sides argued about details of Mueller’s investigation.

On August 7, 2018, the Court held a sidebar conference to address a line of questioning pursued by the defense during their cross-examination of witness Richard Gates. During the sidebar conference, substantive evidence pertaining to an ongoing investigation was revealed.

Ultimately, Ellis ruled that Manafort’s team could not pursue that line of questioning. I believe that objection is what led to Manafort’s plea deal today, and with it, likely the final bits to the key conspiracy case against Trump and his spawn.

I say that for the following reasons.

Manafort got very little (that we can see) from his plea deal

Start with Manafort’s plea deal. When I was thinking of Mueller’s leverage the other day, I imagined Manafort might plead to the charges he did today, but that Mueller would also bracket off some of Manafort’s forfeitures — probably the $16 million that the holdout juror saved Manafort in the EDVA case. That didn’t happen — Mueller dumped the EDVA forfeiture into this deal, so that Manafort will lose all of his thus far identified ill-gotten gains (he’s apparently swapping his Trump Tower apartment for one of the financial accounts, which means that the US government will soon own a Trump Tower property it has unlimited discretion to decide what to do with).

And unless he gets a downward departure for significant cooperation, he’ll do ten years. Under some scenarios, that’s what he would have gotten had he gone to trial in DC and lost. So aside from saving him from a second (and possibly third, if the government pursued the 10 hung charges in EDVA) trial, Manafort got very little that we can see in his plea — just the legal fees associated with the trial(s), while losing the forfeiture he had won by going to trial in EDVA. And for that very little, he kisses away all hope he’ll get a pardon, as well as the (admittedly slim) chance that he might not be found guilty in DC. He also forgoes any appeals and any profits off telling his story. He basically commits to going to prison and coming out an old man to a vastly diminished fortune.

The possible plea benefits we don’t know about

That says the reasons behind Manafort’s decision to accept this plea are things we can’t see but he can.

There are two related possibilities: First, that Manafort came to the conclusion that he’d never get the pardon he had been working towards. That might stem from justified distrust that Trump will ever keep his word, but I doubt it. A pardon was always Manafort’s best way out, and up to a point, it made sense for him to take his chances with Trump.

Which suggests that, for some reason, Manafort came to believe Trump wouldn’t be able to pardon him, probably because he came to understand it would be politically impossible or legally improbable.

Couple that with the other thing that might convince Manafort he’d be better off taking this plea now than continuing to fight his charges: that he knew the next thing he was going to be charged with would be far worse. Just as one example, I’ve suggested that once you’re working for the government of Ukraine (as Manafort was, in the charges settled today) or the government of Russia (as might be established if you showed Konstantin Kilimnik is a Russian intelligence officer, as Mueller has already alleged), very little separates a FARA charge (what he pled to today) from a 18 USC 951 charge, spying. It’s a lot harder to pardon someone for spying than to pardon him for obstruction and financial crimes.

It’s also possible that Manafort came to understand the scope of the conspiracy prosecutors are now pursuing. If he knew they already had the evidence to charge Trump as a co-conspirator in that conspiracy, it would also make it a lot harder for the President to pardon his co-conspirators.

In any case, whatever it is, it’s likely that Manafort had figured out where the prosecutors were heading, and he recognized he was far better off with this painful cooperation deal than being included in the next indictments. Losing his ostrich skin shirt (and five homes and $46 million) and trying to cooperate into a lesser sentence beats facing down a spying charge as part of a conspiracy with both the Russians and a president with severely curtailed pardon abilities, as it turns out.

The Rick Gates details he tried — but failed — to put into the public record

Which brings me back to that Andres objection on August 7.

Just before the EDVA trial, the government would have had to provide Manafort all their 302s from Rick Gates, so he could use that information to damage Gates’ credibility on the stand. And damage his credibility he did, among other things, by revealing that Gates stole money from the Trump transition.

But in addition to looking at those 302s for impeachment evidence, Manafort also surely looked at it to see what Gates had already provided to Mueller’s prosecutors. I’m guessing (based off what a number of people have said about the role Gates played on the campaign) that Gates got Mueller 90% of the way to a conspiracy involving the President, leaving just some meetings attended only by Manafort and Trump as gaps in the evidentiary record.

And that’s what I believe Downing was trying to do back on August 7: Elicit testimony from Gates that would lay out some of the evidence he had provided Mueller in such a way that didn’t violate the protective order he signed in the DC case (there’s not one in the EDVA case, but the DC one basically covers that, not least because the discovery significantly overlaps). So Downing was trying to put into the public record something about what Gates had told Mueller.

Had he succeeded, perhaps Trump would have recognized the jeopardy that put Manfort (and, presumably, himself) in. Perhaps he would have taken that moment to pardon Manafort, and save him from that jeopardy.

But Greg Andres piped up to object, Mueller’s team won the still sealed sidebar discussion, and Manafort failed to introduce whatever evidence into the public record for Trump and his other co-conspirators to see.

Which left Trump and his legal team, even as Manafort had his first proffer discussion with Mueller on Monday, still claiming that Manafort remained in a Joint Defense Agreement four days later, apparently blissfully unaware that Manafort had seen enough to decide it was time to flip.

Downing’s ploy probably wouldn’t have worked anyway. Pardoning Manafort might have helped Manafort, but if Mueller got 90% of the way to the conspiracy with the witnesses he has (including Sam Patten, whose plea surely contributed to Manafort’s certainty he was fucked going forward), then it wouldn’t have helped Trump and probably would have gotten us closer to when Republicans realize Trump has become an anvil rather than an electoral plus.

But I suspect that was the moment when Manafort’s cooperation, with whatever last little bits implicating Trump, became inevitable.

As I disclosed July, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post. 

The Trump Team Strategic Errors: Rockets Instead Bursting In Air

/104 Comments/in , , /by

During the winter, when the government was threatening and then did charge Paul Manafort with a bunch of tax fraud charges, he chose not to waive venue, forcing himself into two trials, one in EDVA and one in DC. (Raising the perennial question, who is paying for his legal representation?)

At the time, Josh Gerstein suggested might be seeking to avail himself of EDVA’s famed “rocket docket” which pushes trials through quickly. The thought was perhaps Manafort would have a better result with EDVA’s more conservative jury pool before his DC trial started, which in turn might be a way to discredit the Mueller investigation (something that has always seemed key to any strategy pursuing a pardon).

Manafort’s attorneys’ decision to effectively force some — but not all — of special counsel Robert Mueller’s case against him to northern Virginia baffled many lawyers, since it puts Manafort at risk of two separate trials rather than one. To some, it’s akin to choosing to play Russian Roulette with two bullets in the gun instead of one.

However, because the Alexandria-based federal court’s “rocket docket” is known for providing quick trials, there’s a possibility that Manafort could get to trial on bank and tax fraud charges in Virginia before the Sept. 17 trial date set Wednesday by Judge Amy Berman Jackson in Washington in the original case, now scaled back to focus on money laundering and failure to register as a foreign agent.

That means Manafort has a chance of getting his case before a northern Virginia jury first — a panel more likely to include Trump supporters who may be skeptical of Mueller’s enterprise. Such jurors are likely to be a rarity in Washington.

[snip]

If Manafort could pull off an acquittal in Alexandria or even a hung jury, it could fuel President Donald Trump’s view of the Mueller probe as a prolonged “witch hunt” that is more persecution than prosecution. That would seem certain to lead to calls for Mueller to abandon the D.C. case and might prompt a pardon from Trump or some action to shut down the special counsel’s office altogether.

Even if nothing so dramatic happened, a stumble for Mueller’s team in Virginia and in its first contested trial could raise pressure for prosecutors to be more flexible in negotiating a plea deal.

Not long after at Manafort’s EDVA arraignment before the cantankerous TS Ellis, however, his attorney Kevin Downing admitted that they would prefer either everything move to EDVA, or the EDVA trial go second, after the DC trial still scheduled to start on September 17.

MR. DOWNING: We’re actually thinking trying to get the conspiracy to come here. We’re happy to be here.

[snip]

MR. DOWNING: In this perfect world where I have my rosy glasses on, we were envisioning that we would be trying this case in November following the case in D.C.

THE COURT: You need to go back to the optometrist, because that isn’t going to happen.

MR. DOWNING: Okay.

THE COURT: You’ve got a trial date in September in the District? Mr. Weissmann, this case seems — maybe I’m not familiar with the indictment in D.C., but this case seems less complex than the one in D.C.

MR. WEISSMANN: That’s our view as well. The tax charges, as we mentioned, do largely overlap. But unlike the D.C. case, there are no Foreign Agents Registration Act charges before this Court. And those involve quite an extensive array of evidence and different theories of liability. Here we have what I think are five bank frauds and they are discrete over a two-year period and the discovery has been produced.

THE COURT: All right. Mr. Downing, I’m going to set this matter in July. Now, if in the course of your preparation something comes up that suggests to you that you now have a more persuasive basis for me to consider on a later trial date, I’ll consider it. But for now, 12th of — or not 12th — 10th of July at 10 a.m. with a jury. Also having that earlier deadline is an important — it will focus your minds, everyone’s minds on it and get this matter done.

In July, Manafort used his jailing by Amy Berman Jackson as an excuse to ask for a delay in the EDVA trial.

In a response, the government demonstrated to Ellis that Manafort was still trying to have his desired outcome, to have the DC trial go first.

Manafort can hardly now complain about the order of the trials: he was on notice from the Honorable Amy Berman Jackson, when he elected last winter not to have the proposed tax and bank fraud charges all brought in the D.C. Case, that his decision would likely result in his going to trial in Virginia first. D.C. Case Status Hr’g Tr. (Jan. 16, 2018). That other reasons may account for this application is strongly suggested by a prison call in which Manafort discusses going to trial first in the D.C. Case and contends to the listener (who did not believe the D.C. venue was favorable) that the listener should “think about how it’ll play elsewhere….There is a strategy to it, even in failure, but there’s a hope in it.” Phone Call of Manafort (June 20, 2018), at 4:02-4:39.

The trial went off in July as scheduled, meaning Manafort faced the more traditional of charges first.

Still, getting one trial in EDVA almost worked, with a holdout juror that hung the jury on 10 of 18 charges (though that won’t have that big an effect on sentencing) and lots of good press stemming from Ellis beating up the prosecution, both during Manafort’s challenge to Mueller’s authority and during the trial in general.

Add in the fact that Manafort (again, with his seemingly endless supply of funds to pay defense attorneys) got two bites at key challenges to Mueller’s case in chief — his authority generally, and the search of Manafort’s condo for things including evidence about the June 9 meeting — and the dual trial strategy probably wasn’t a total flop (unless, of course, it means Manafort is running out of money). Along the way, he also got full discovery on what Rick Gates has provided Mueller, presumably including the real goods Gates gave Mueller on the conspiracy with Russia.

But Manafort’s still facing another trial in a less friendly venue before a no-nonsense judge, a trial he seems to have done nothing to prepare for. (WSJ reports the two sides did consider a plea on the DC charges while waiting for the EDVA verdict, to no avail.) And all of Rudy’s squealing about how indictments or even further investigation during the campaign season might be a distraction, Manafort’s trial (one that’s sexier than the EDVA one) will remain a constant focus in the last six weeks before the election.

To be fair, it’s hard to measure how Manafort’s strategy is playing, as it’s not clear what — besides a full pardon — his goals are. Plus, he’s got a shitty hand, no matter how you look at it (except for the seemingly endless supply of defense fund dollars).

But Manafort’s bid for a second trial seems like an even worse strategic decision than Michael Cohen’s bid for a Special Master (which I now admit at least gave Trump and his company an opportunity to undercut any Cohen bid for a plea deal) not least because he’ll be a felon in his DC trial which will in turn make sentencing worse if he is found guilty there.

At least the defense bar is making money.

The Sealed Sidebar: Kevin Downing’s Attempt to Share Information on the Case in Chief Fails

/129 Comments/in , /by

As I disclosed last month, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post.

Yesterday, the Manafort prosecutors sought and obtained an order sealing a sidebar discussion they had during the prosecution on Tuesday.

On August 7, 2018, the Court held a sidebar conference to address a line of questioning pursued by the defense during their cross-examination of witness Richard Gates. During the sidebar conference, substantive evidence pertaining to an ongoing investigation was revealed. The following portions of the sidebar conference transcript identifies that evidence or
reveals details about that evidence: Aug. 7, 2018 Tr. at 1399: 14-19; 1402:1-2, 14-17; 1403: 12-15.

Disclosing the identified transcript portions would reveal substantive evidence pertaining to an ongoing investigation. The government’s interest in protecting the confidentiality of its ongoing investigations is compelling and justifies sealing the limited portion of the sidebar conference at issue here. In addition, sealing will minimize any risk of prejudice from the disclosure of new information relating to that ongoing investigation.

Because all things about this trial get hyped, there was a silly report reading this as big tea leaves proving that Rick Gates is cooperating in the case in chief against Trump.

Of course he is. You don’t get to work off of this amount of money laundering just to rat out your boss!

The exchange might better be analyzed for what Manafort was probably trying to do with it.

Both sides agreed that they weren’t going to focus on the campaign, aside for the way Manafort was trading positions on an eventual Trump campaign to obtain fraudulent loans. Manafort didn’t want to talk about going from electing corrupt Russian pawn Viktor Yanukovych to electing corrupt Russian pawn Donald Trump.

So better to understand what Manafort was likely trying to achieve here — why Kevin Downing even thought he might get away with raising it.

A tactical reason is to prove that Rick Gates is a liar — which is one of the only defense approaches Manafort is taking here. So the topic is likely something Gates originally lied about and then told Mueller a different story. In the DC case, for example, we know that Gates lied to the AP about his and Manafort’s lobbying in an effort to remain on the campaign.

The strategic goal here may be far more interesting, though. I’ve argued that the entire point of taking this and the DC case to trial is to inflict as much damage on the Mueller investigation as possible, to make two futile attempts to suppress evidence seized in his condo (including those 8 iPods I obsess about), and to learn and share as much information about the larger investigation. I’m sure something like that was the expectation set when Trump discussed pardoning Manafort. He does damage to the Russian conspiracy case and Trump will pay him off — assuming he can be trusted — by pardoning him after this all blows over.

Mueller would have had to give Manafort everything Gates had said to prosecutors before he testified, meaning they’d learn a good deal about the case in chief. But information in the case in chief would be protected from release.

So, in the guise of asking Gates something about which his testimony to Mueller may have changed over time, Downing was likely trying to make public information that would be of use to Manafort’s co-conspirators in the case in chief.

It didn’t work.

A Warning about Hype Surrounding the Manafort Tax Evasion Trial

/115 Comments/in , /by

As I laid out a few weeks ago, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post.

Because Mueller has already obtained the testimony of chatty Trump allies who promptly leaked the content of their interviews to the press, the constant stream of easy updates on the Mueller inquiry has dried up. No outlet has thus far invested in the critical thinking to figure out the publicly available side of what I reported to the FBI that subsequently got moved under Mueller. No one has thought about why Michael Cohen’s very competent attorney is letting him leak to the press rather than (or, at best, in parallel with) offering a proffer to the Feds. Instead, outlets are dedicating front page space to recycled stories they first reported three months earlier. We actually spent half the day Friday getting our fix from the news that Don Jr and Robert Mueller not only had reason to fly out of National Airport’s shitty 35X gate, but were doing so at the same time (for the record, I would have been in the 35X terminal with Trey Gowdy Thursday, but he apparently got rebooked from a badly delayed Greenville flight onto an on-time Charlotte one across from 35X; he wore shades right up to boarding the plane to avoid detection but that didn’t thwart my powers of observation).

We’ve hit the summer doldrums of the non-stop Mueller inquiry news addiction and things are getting bleak.

Perhaps because of that, news outlets are hugely hyping the Paul Manafort trial, due to start on Tuesday. Here’s Politico reporting “Risks pile up for Trump as Manafort heads to trial.” And here’s WSJ claiming “Manafort Trial Holds Big Implications for Russia Probe.” [Update: Here’s the WaPo contribution to the hype; I make some specific compliments and criticisms of it in this thread.]

Yes, it is true that (as both Politico and WSJ point out) there will be a small campaign angle to the trial: Mueller’s team wants to explain how Manafort got a $16 million loan from Chicago’s Federal Savings Bank by promising its Chairman, Stephen Calk, a position in the Trump Administration. But that’s garden variety sleaze, not conspiring with Russia.

It’s also true we’ll get salacious new details on the luxury goods Manafort used to launder money. But most of that, including details of a bizarre arrangement with the local antique rug shop, have already been stipulated in pre-trial filings. Manafort is even trying to get details of his ties to Viktor Yanukovych excluded from the trial, but in doing so, he released a ton of documents that the press has already mined for worthwhile reporting.

It’s also possible that Manafort will decide, between today and Tuesday, to cooperate with Mueller rather than face a fairly straightforward trial, or that a guilty verdict in four weeks time will induce him to cooperate. Thus far, there’s little sign of that, and a guilty verdict will have no immediate change on his jailhouse conditions that might persuade him to cooperate. Any federal sentence will ultimately be served in conditions better than the ones he currently is in at Alexandria jail.

Barring some unexpected jury intransigence or judicial rulings, it still looks like Manafort’s best shot to avoid spending the rest of his life in prison is a pardon, and he looks to be operating accordingly, imposing as much reputational damage to Mueller as possible, without budging on his willingness to stay the course in apparent expectation he’ll be rewarded at some point in the future.

Aside from Rick Gates — who is sure to be beat up by Manafort’s attorneys — the most interesting witness who might testify at trial is Bernie Sanders’ former campaign manager Tad Devine, who would testify about PR work done before 2014. We’ll have to wait to see Tony Podesta and Vin Webber and similarly illustrious people testify for the DC trial, if it happens. This trial is just the appetizer course for the feast on sleazy DC influence peddling we’ll get in September, if the DC trial actually happens.

The newsworthiness of the trial will be limited further still by the outdated policies of the courthouse, EDVA. No devices are permitted in the courthouse, which means there will be no real time coverage. To break news, you have to leave the courthouse, and go to your (meter parked) car or the cafe where you’ve left your device across the square to report out. As a result, any “breaking” scoops will likely come from less responsible journalists with less grasp of both how trials and Judge TS Ellis works (as we saw earlier this year, when Daily Caller led everyone to believe one of Ellis’ typical rants indicated trouble for Mueller). Responsible journalists (Josh Gerstein and Zoe Tillman are particularly good bets for this trial) will sit through the entire proceeding before reporting out something more measured.

This is a tax trial, not a spy trial. Financial experts call it a “paper trial,” meaning the jurors will weigh dry documentary evidence rather than the reliability of unreliable witnesses (like Gates), which makes the outcome more predictable, though in no way guaranteed.

One of a slew of reasons why I declined an offer to cover this trial is I expect any interesting Mueller news to happen elsewhere — perhaps in his apparent relentless pursuit of testimony from Roger Stone’s allies, perhaps in the negotiations over Julian Assange’s continued residence in Ecuador’s embassy, perhaps even in fallout from Mariia Butina’s arrest (though Butina is not a Mueller case, in spite of what some outlets will tell you). I didn’t want to miss such news because I was stuck in a court room watching witnesses talking about financial documents.

Undoubtedly, the trial will be well-watched and in some outlets well-reported. It will teach a lot of people about how white collar trials of privileged defendants work. It may well be the rare moment when a white collar criminal faces consequences for his acts.

But don’t rest your hopes for continued Mueller disclosures on the Manafort trial.

Judge Ellis Compares Paul Manafort to Domestic and Foreign Terrorists and Spies and Traitors in Pulling his VIP Privileges

/131 Comments/in , /by

As I laid out last week, I provided information to the FBI on issues related to the Mueller investigation, so I’m going to include disclosure statements on Mueller investigation posts from here on out. I will include the disclosure whether or not the stuff I shared with the FBI pertains to the subject of the post. 

As I noted in this post, last Friday Paul Manafort requested to continue his VA trial until after the other one and (in a really craptastic argument effectively claiming a jury of Manafort’s influence peddling peers wouldn’t give him a fair trial) to move the trial to Roanoake, VA. In response, Judge TS Ellis (who likes being dicked around even less than your average judge, which is generally not at all) issued an order to have him moved to the Alexandria jail (which is where Judy Miller waited out the aspens turning). Manafort’s lawyers responded to that saying, effectively, “psyche, we’d rather leave him where we’ve just claimed he can’t prepare for trial.”

Have I mentioned how TS Ellis really, really doesn’t appreciate being dicked around? Here’s the order he issued refusing Manafort’s effort to stay in Northern Neck. In the middle of a bunch of language calling bullshit, Ellis strings the bolded words together.

At 5:00 p.m. this evening, however, defense counsel filed a motion opposing defendant’s transfer from Northern Neck to Alexandria, despite having just complained about defendant being housed at Northern Neck.1 In the motion, defense counsel states that “issues of distance and inconvenience must yield to concerns about [defendant’s] safety and, more importantly, the challenges he will face in adjusting to a new place of confinement and the changing circumstances.” [citation omitted] However, defense counsel has not identified any general or specific threat to defendant’s safety at the Alexandria Detention Center. They have not done so, because the professionals at the Alexandria Detention Center are very familiar with housing high-profile defendants including foreign and domestic terrorists, spies and traitors. All these defendants were housed safely in Alexandria pending their respective trials and defendant’s experience at the Alexandria Detention Center will presumably be no different. Moreover, defendant’s access to counsel and his ability to prepare for trial trumps his personal comfort.

1 It is surprising and confusing when counsel identifies a problem and then opposes the most logical solution to that problem. The dissonance between defendant’s motion to continue and motion opposing transfer to Alexandria Detention Center cannot be easily explained or resolved. [my emphasis]

Meanwhile, the government (as I predicted) submitted a really cranky response to the motion to delay the trial. They provided a list of what discovery they gave to Manafort when, proving his wails about getting large dumps of information to be bullshit, noting among other things that, “The vast bulk of [the documents recently provided to Manafort are] documents from a bookkeeping service (NKSFB) that works for Manafort, who has had access to this material long before the government did.” (The device from which Manafort obtained discovery last week was Rick Gates laptop; Manafort received the rest back in June.) They also pointed out, in a number of different ways, that Manafort not only knew the trial was coming, but had brought all this on himself by refusing to waive venue in the EDVA charges, thus creating a second “rocket docket” trial he had to prepare for. They even quote from a Manafort jailhouse conversation a point Josh Gerstein made (which I quoted): that Manafort has always wanted the DC trial to go first.

That other reasons may account for this application is strongly suggested by a prison call in which Manafort discusses going to trial first in the D.C. Case and contends to the listener (who did not believe the D.C. venue was favorable) that the listener should “think about how it’ll play elsewhere….There is a strategy to it, even in failure, but there’s a hope in it.” Phone Call of Manafort (June 20, 2018), at 4:02-4:39.

Mostly, though, they call bullshit on his claims of duress in jail he had been in, citing liberally from his jail phone calls (made from his private phone).

Nor are the conditions of his incarceration since June 15, which he has not challenged, more restrictive than for other inmates (and in various ways less restrictive, as noted below), or unduly interfering with his ability to prepare for trial. It is incorrect that Manafort has “very limited access to his attorneys and the records.” Dkt. 110 at 6. In fact, Manafort has reported, in a taped prison call, that he has reviewed all discovery: Just days before filing his motion for a continuance, Manafort told the person on the call that, “I’ve gone through all the discovery now.” And he has had extensive access to his counsel and materials: On July 4, 2018, Manafort remarked in a taped prison call that he is able to visit with his lawyers every day, and that he has “all my files like I would at home.”

Specifically, contrary to Manafort’s assertions about his jail conditions, Manafort is in a private unit in which he can review materials and prepare for trial.3 Moreover, he is not confined to a cell. Between the hours of 8:30am to 10:00pm, Manafort has access to a separate workroom at the jail to meet with his attorneys and legal team. Visitor logs from the prison indicate that each week Manafort has had multiple visits with his legal team.

Manafort also has a personal telephone in his unit, which he can use over twelve hours a day to speak with his attorneys.4 According to prison telephone logs, in the last three weeks Manafort has had over 100 phone calls with his attorneys, and another 200 calls with other persons. Those telephone logs indicate Manafort has spoken to his attorneys every day, and often multiple times a day. Manafort also possesses a personal laptop that he is permitted to use in his unit to review materials and prepare for trial. The jail has made extra accommodations for Manafort’s use of the laptop, including providing him an extension cord to ensure the laptop can be used in his unit and not just in the separate workroom.5

3 Among the unique privileges Manafort enjoys at the jail are a private, self-contained living unit, which is larger than other inmates’ units, his own bathroom and shower facility, his own personal telephone, and his own workspace to prepare for trial. Manafort is also not required to wear a prison uniform. On the monitored prison phone calls, Manafort has mentioned that he is being treated like a “VIP.”

4 The defense representation that telephonic communication “is restricted to ten (10) minutes per call” is incorrect. Dkt. 110 at 3. Each phone call session is limited to fifteen minutes, but there is no restriction on the number of phone call sessions, meaning that Manafort immediately can reconnect with his attorneys whenever the fifteen minutes expires. For example, according to telephone logs, Manafort has had successive phone call sessions with his attorneys that have lasted over forty minutes. The attorney calls are not monitored.

The government even claims Manafort is still engaging in foldering, with the help of his lawyers.

5 Although the jail does not allow prisoners to send or receive emails, Manafort appears to have developed a workaround. Manafort has revealed on the monitored phone calls that in order to exchange emails, he reads and composes emails on a second laptop that is shuttled in and out of the facility by his team. When the team takes the laptop from the jail, it reconnects to the internet and Manafort’s emails are transmitted

In response, Manafort has written a filing that is not only cranky, but basically devoid of real argument. There’s the boo hoo hoo about the plight of poor white collar criminal defendants who have a phone in their own VIP jail unit (with what I expect we’ll learn is a bogus rebuttal of the claim he continues to folder messages to others).

In its opposition, the Special Counsel goes to great lengths to describe Mr. Manafort’s conditions of confinement and to contend that these have not had an adverse impact upon his preparation for trial. The Special Counsel’s opposition is self-serving and inaccurate. While the opposition does not generally misrepresent the confinement conditions,1 its cavalier dismissal of the challenges of preparing for back-to-back complex white collar criminal trials while the defendant is in custody shows a lack of concern with fairness or due process.

1 In at least one respect, the description of conditions is inaccurate. With regard to alleged email workaround, the Special Counsel is wrong. While it is possible for Mr. Manafort to provide counsel with information he would like communicated, any communication is then sent by counsel in a manner that is consistent with the rules of the detention facility.

There’s the laughable claim — which Manafort’s lawyers absolutely know is rank bullshit — that all jail phone calls are monitored by the private vendor who provides the service, even those to family members.

Moreover, the Special Counsel’s opposition further demonstrates its unlimited resources. Apparently, but unsurprisingly, the Special Counsel has taken the time to assign personnel to listen to all of the non-privileged phone calls Mr. Manafort makes from jail. Armed with personal conversations between Mr. Manafort and his family, the Special Counsel selects snippets to support its version of events. The Special Counsel does not pause to consider the reasons a detained defendant might have to make his situation sound better when speaking with concerned friends and family.

And there’s the sheepishness in being caught in asking for what they wanted from the start anyway.

The Special Counsel complains that Mr. Manafort is seeking a “months-long adjournment” suggesting that such a delay is not warranted by the situation. According to the Special Counsel, if additional time were needed, Mr. Manafort would have sought a delay of both trials. This utterly misreads the situation. The two months between now and the District of Columbia trial date would allow sufficient time to prepare for that case and simultaneously to prepare for the Virginia matter. Such a schedule would allow the District of Columbia trial to proceed as scheduled on September 17 and the Virginia case to follow with only a short period between the two. This would require only a single continuance of the Virginia trial and it would be defendant’s first (and only) such request. The defendant viewed this request as a reasonable accommodation under the circumstances.

After reading this reply, I came to realize that Manafort’s legal team is arguing as trollishly as the lawyers for troll king Yevgeniy Prigozhin, making arguments in bad faith in an attempt to cough up more discovery. Which may suggest the legal strategies are the same: to discredit the Mueller investigation and obtain as much sensitive discovery as possible.

I mean, can you be cited as a lawyer for pretending not to know that all jailhouse conversations are monitored?

Ellis has scheduled a hearing for next Tuesday to address the continuance and location change. But given that he’s thinking of Manafort in the same breath as he thinks of “foreign and domestic terrorists, spies and traitors,” I’m guessing he’s done with Manafort’s bullshit.

It all seems like this is coming to a head even more quickly than Manafort’s upcoming trial date. But given Manafort lawyer Kevin Downing’s insolence, I’m not sure that’s a good thing.