Some Thoughts On The Manafort Indictment

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The first shoe has dropped in the big indictment watch initiated late Friday with the news that an indictment had been rendered in the Mueller investigation. Paul Manafort and his longtime business partner Rick Gates have been told to self surrender this morning. Manafort has already arrived at the field office for processing as the attached picture reflects. Here is the NYT story:

The charges against Mr. Manafort, President Trump’s former campaign chairman, were not immediately clear but represent a significant escalation in a special counsel investigation that has cast a shadow over the president’s first year in office. Also charged was Mr. Manafort’s former business associate Rick Gates, who was also told to surrender on Monday, the person said.

Mr. Manafort walked into the F.B.I.’s field office in Washington at about 8:15 a.m. with his lawyer.

Mr. Gates is a longtime protégé and junior partner of Mr. Manafort. His name appears on documents linked to companies that Mr. Manafort’s firm set up in Cyprus to receive payments from politicians and businesspeople in Eastern Europe, records reviewed by The New York Times show.

Mr. Manafort had been under investigation for violations of federal tax law, money laundering and whether he appropriately disclosed his foreign lobbying.

The indictment is here and contains twelve counts for conspiracy, conspiracy to launder money, failure to file as foreign agents, failure to file proper financial reports and false statements. Notable also is the notice of forfeiture of both real and personal property, and any derivative property tied thereto.

The fact that the first shoe is Manafort is no surprise. What is surprising, to me at least, is that it does not appear that Manafort’s wife Kathleen was named. This may be a reflection as to the nature of the charges … the charges may only be for activity she was not involved in. Or not. But, make no mistake, she is involved in many of the charges for tax fraud and money laundering; she has solid exposure. Perhaps Mueller and Andrew Weissmann have already discussed this with Manafort and his lawyer, or maybe that is being reserved as leverage in a potential superseding indictment. But it is extremely interesting that she does not appear to be named yet. Stunning actually.

Add into the status of Kathleen Manafort that she and her husband are reported to be near broke as to liquid funds, and their real estate is already heavily leveraged and now subject to civil seizure at this point. And given the fairly recent outing of Manafort having a very expensive mistress half his age, things cannot be too cozy on the Manafort home front. This is total chum in the water for an aggressive prosecutor like Weissmann. Why did he not take it??

NBC News is reporting that the current charges were brought now because of statute of limitation concerns on some of them, and that further charges are absolutely not ruled out. Which makes it even more curious that Kathleen Manafort is not named.

Manafort is a high value target for the Mueller shop. But so too is his lesser known business partner Rick Gates. Gates was not only with Manafort on the Trump Campaign and DNC Convention, but stayed on in a significant role with Trump throughout the campaign and transition, including the inaugural committee, even after Manafort left. Gates, like Manafort, has close foreign ties, including with Russia and Ukraine.

Two people to keep your eye on are Dmitri Firtash and Oleg Deripaska, Putin allies. As as Spencer Ackerman says
in the money “behind pro-Kremlin party in Ukraine that hired Manafort. He’s indicted in IL. Watch what Sessions does”. Spencer is right about that. Here is some bits from Spencer’s report on Manafort, Rick Gates and Firtash back in August:

Asked whether any Manafort deals seemed particularly troubling in retrospect, a senior administration official replied, “You mean like this one?” and appended a link to a 2016 story on Manafort’s alleged attempts to launder a Ukrainian oil and gas billionaire’s ill-gotten fortune through New York real estate—including the Drake.

The Justice Department is now seeking the extradition of that billionaire, Dmitry Firtash, so he can stand trial for a 2013 racketeering indictment in a Chicago federal court. Two weeks ago, in response to a legal filing from Firtash seeking dismissal of the case, the acting U.S. attorney in Chicago termed Firtash and a deputy as “two organized-crime members” and people “identified by United States law enforcement as two upper-echelon associates of Russian organized crime.” Years before the indictment, Firtash was a major moneyman for the Party of Regions in Ukraine, the pro-Kremlin political faction for which Manafort consulted.

Firtash’s alliance with Manafort to acquire the Drake has been reported before. But far less attention has gone to the involvement of another party: Oleg Deripaska, one of the wealthiest men in Russia—and a longtime Putin associate. In 2006, according to the Associated Press, Deripaska signed a $10 million annual contract with Manafort for what Manafort pitched as political and economic efforts inside the U.S. to “greatly benefit the Putin Government.”
But Manafort was more than Deripaska’s political operative. They were business partners, as well.

“When Paul met with Mr. D last month he told Paul to lock in the other financing elements and then come back to him for the final piece of investment,” Gates wrote to two longtime business associates of Deripaska, Anton Vishnevsky and Andrey Zagorskiy, on July 1, 2008.

According to ex-prosecutors, a business relationship between a Kremlin-tied oligarch, an accused gangster and the manager of Donald Trump’s campaign is the sort of arrangement currently occupying Mueller’s time.

“Any financial dealings with Russia and Ukraine would be considered within the scope of [Mueller’s] current mandate,” said Barbara McQuade, the U.S. attorney in Detroit until Trump fired her in March. “With the search warrant executed on Manafort’s home, looking for bank records, tax records, and the like, it seems like this is the kind of thing that Mueller would be interested in.”

To sum up, today’s indictment news is quite a big deal. The spokes that look likely to come out of it lead directly to the biggest Russian interests imaginable. Ones that very likely lead to Trump as well, whether financial or in relation to potential collaboration and conspiracy to influence the 2016 election.

Time will tell where this goes, but this is an extremely significant and rollicking start.

Bmaz is a rather large saguaro cactus in the Southwestern Sonoran desert. A lover of the Constitution, law, family, sports, food and spirits. As you might imagine, a bit prickly occasionally. Bmaz has attended all three state universities in Arizona, with both undergraduate and graduate degrees from Arizona State University, and with significant post-graduate work (in physics and organic chemistry, go figure) at both the University of Colorado in Boulder and the University of Arizona. Married, with both a lovely child and a giant Sasquatch dog. Bmaz has been a participant on the internet since the early 2000’s, including active participation in the precursor to Emptywheel, The Next Hurrah. Formally joined the Emptywheel blog as an original contributing member at its founding in 2007. Bmaz grew up around politics, education, sports and, most significantly, cars; notably around Formula One racing and Concours de Elegance automobile restoration and showing. Currently lives in the Cactus Patch with his lovely wife and beast of a dog, and practices both criminal and civil trial law.

18 replies
  1. Kevin Hayden says:

    On the first charge, it says ‘Together with others.’

    Does the omission of Kathleen suggest she’s ‘flipped’ ?

  2. earlofhuntingdon says:

    Thanks very much.  Reads like a John le Carre novel, which would not bode well for anyone involved.

  3. Bay State Librul says:

    Good.

    To continue the novel, we need to give credit to CNN and find out who their sources are, since we want a “heads up” for the next shoe….

  4. Pete says:

    Thanks as well. Fairly ignorant of the process from here on out.

    Jail or bail if at all?

    Care to speculate how these things might go if to trial – timings, etc?

    Pete

  5. Peterr says:

    this is an extremely significant and rollicking start

    Indeed. The question being asked at the WH is not so much “when will the other shoe drop” as “which shoe will drop next?” Trump has Imelda Marcos-level numbers of shoes, and there’s an earthquake building quietly, underground and out of sight.

    This was a helluva foreshock, but it’s only a foreshock and not The Big One.

  6. Peterr says:

    I also wonder how Michael Flynn is feeling this morning.

    After the leaks came out on Friday, I suspect Flynn didn’t sleep very well this weekend, even if his lawyers told him that they were sure the FBI wasn’t going to bust down his door on Monday morning.

    • TGuerrant says:

      Flynn Junior deleted his Twitter account Sunday evening.  I presumed he was preparing for a time away from home but perhaps he’d just broken up with Jordan-the-not-what-she-seems tweetster.

  7. orionATL says:

    a guy has a wife deeply involved in what a prosecutor might consider criminal activity, and he goes out and starts dicking around with a mistress? is manafort super-confident or self-destructive? sounds to me like he’s been walking down a path of marbles for some time now and finally lost his balance.

    what will bail cost him?

    • What Constitution? says:

      Wait for it — Trump will tweet something about Bill Clinton introducing Manafort to a “Ms. Lewinsky”, who bought her dresses for their affair with money from Obama and the DNC.  Dress colors chosen by Hillary.

      • TGuerrant says:

        Too complicated for Donnie.  Hillary is GUILTY.  Lock her up!  Don’t get bogged down in details like guilty of what, evidence, shit like that.  Be modern presidential!

  8. Rugger9 says:

    There is also the announcement this morning about Papadopoulus’ guilty plea of October 5, TPM has the charges admitted to embedded here:

    http://talkingpointsmemo.com/muckraker/george-papadopoulos-pleads-guilty-lying-to-fbi

    DC Court, Case 1-17-cr-00182-RPM Document 19.

    MSNBC’s observation that the main charges against Manafort and Gates were not directly campaign related is why the Kaiser was tweeting that there is no collusion and that Manafort was on his own.  However, GP’s charges are definitely campaign related, and would expect this is merely the first step on closing the circle around the Kaiser.  MSNBC reported that the Manafort and Gates  indictments were issued now due to statute of limitations issues for some of the charges, but they seemed dubious about that idea.

    I’ll leave the analysis to the lawyers here about Manafort’s wife, but it would seem as noted above that she helped the FBI either to save her own skin and / or to get back at Paul for the side action.  I’m not sure how charging her would help move the process along.  I would suspect that she has been told she is next if she doesn’t sing, and perhaps if anyone can find out what her deal / offer will be we might get some clarity.  It seems from the post that she’s about as unconnected to Paul’s financial dealings as Imelda Marcos was with Ferdinand’s corruption.  “Hell hath no fury as a woman scorned”

    However, since Manafort was in the infamous June 9 meeting as a key player (indeed, the Russian connection is probably why he was part of the campaign in the first place, otherwise let him orbit outside like Roger Stone) Kaiser Donnie shouldn’t get too smug about no collusion being proven.  Collusion with the Russians wasn’t discussed in the indictments, which gives more time to Mueller to build the case for that while not under timeliness constraints for acting upon an indictment (6th Amendment “speedy trial” as litigated over the years).  This detail is why GP’s confession should scare the WH because it looks to me like a quid has been offered by George to get the pro quo.  Was the WH tipped off about GP?  I don’t think so, since IIRC the twitter storms did not peak anywhere around 10/5 and not really any unexplained tweetstorms since then not tied to already known events.  Perhaps someone can check on that.  Mueller can always add to the charge list later for anyone.

    IMHO Flynn and Page will follow shortly for charges as unregistered foreign agents (unless they are already singing) since that has been documented thoroughly in the press.  Since these particular indictments can be crafted to not include colluding for Russia during the campaign (Flynn worked for Turkey, Page for Russia but long before the campaign) Mueller can keep his cards hidden about the campaign until he is ready to play them.

    In some not too distant future, Jared and Junior will get their indictments if for no other reason than the June 9 meeting.  Jared in the mean time gets to fend off his slumlord problems in addition to bringing peace to the Middle East.

    Kaiser Donnie’s going to Asia, so we have plenty of distraction opportunities there.  I’m sure that Kelly knows quite well that this is a shot across the bow.  Also, depending upon what George has told the prosecution team regarding how the information was spread and used, McTurtle, LyinRyan and Pence cannot be too sanguine either.  I’d like to see Iron Stache’s ad versus LyinRyan if anything really interesting comes up.  Ryan has another year to sweat it out.

    I still think these indictments function as an insurance policy.

  9. Avattoir says:

    bmaz – I don’t know how drive ‘reply’ to particular comments, so I’ll just barf out my few thoughts here.
    First, as Ms. Wheeler noted on her Twitter feed, it was difficult getting to this website today, which is my excuse for not having noted this earlier post by you.
    In the comments thread of the first post in time today by Ms. Wheeler, I mentioned Rick Davis, the fact that many of the items listed on the Manafort / Gates indictment display “Davis-Manafort”, the reason for which Davis is most widely known (campaign manager for McCain 2000 and again, for a time, for McCain 2008, and raised his connection with Oleg Deripaska. As it turns out, both show up in this post or comments. If I’d been able to see that, I’d have raised here rather than there.
    It seems obvious Mueller’s team has interviewed Davis, because money trails are not the sort of thing a money-laundering investigation would leave a loose thread (or cannon) like Davis unaccounted-for.

    Several comments raised the status of Manafort’s wife (now his cuckquean, tho there’s a suggestion that term was invented to describe something more salacious). I’m sure you’ve seen this, and I certainly have: spouses being interviewed & testifying in relation to things THEY did & know about, not impinging directly on any husband-wife communication privilege.
    But as to testimonial privilege, you and I would both know, tho non-attorneys might not yet wish to, that federal law treats the privilege as solely that of the testifying or “witness” spouse, not the indicted or “party” spouse. What causes a lot of confusion is that most states grant to the party spouse the right to raise the privilege by way of objection.

    • bmaz says:

      Ooof, yes, we had some real access issues today. Sorry about that. As a result even I could not access this post most of the time. Yeah, I did not address any potential testimonial privilege issues. Frankly, didn’t think it pertinent….at least not yet. For reasons you noted. Also don’t think it matters. The leverage is placing her in the same criminal posture as her husband, irrespective of testimony. That, in and of itself, is the hammer.

      It is not a huge deal, but I am really perplexed that did not occur. Weismann is smart. He was not at a loss for my advice on this blog. So, why?? It is a weird little niche of the scenario, but it interests me.

      Great questions about Davis. He is untethered from any power right now. He could be in play.

    • harpie says:

      bmaz – I don’t know how drive ‘reply’ to particular comments, so I’ll just barf out my few thoughts here.

      How I get comment section to work (including this comment which would not “reply” and did not have B, I, etc…(brain is blank right now on word for these, arrrgh!):

      1] Type a word into the comment space at the bottom of the post, fill in the info and hit “Post Comment”

      2] I couldn’t explain it at all, but that usually makes everything work.

      3] Type your comment where you want it to be.

      4] Delete the original comment 1].

       

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