August 2016: When Paulie’s Panic Set In

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. 

Back in June, Eric Trump made news when he claimed that, “My father’s life became exponentially worse the minute he decided to run for president.”

That’s not yet clear — though I think it possible that conspiring with Russians to get elected may yet bring down the Trump empire and put at least one of his family members in prison.

The case may be easier to make for Paul Manafort however. As evidence laid out in his trial has made clear this week, it is true that when Viktor Yanukovych was ousted in Ukraine, he started going broke. Yet somehow, he tried to trade up the oligarch ladder, to do for Donald Trump what he had done for his Russian client in Ukraine. In doing so, however, Manafort made himself far more vulnerable to having his influence peddling and corruption exposed.

In August 2016, things started to fall apart. That’s a story increasingly told in the collective legal proceedings revealed by the Mueller inquiry.

First, recall that the Mueller team appears to have the communications between Manafort and Konstantin Kilimnik since March 2016, as this spreadsheet that appears to show a parallel constructed source of such communications suggests.

That would suggest the government has a good deal of background on the two meetings Kilimnik and Manafort had during the campaign, including the one that took place on August 2.

In August, as tension mounted over Russia’s role in the U.S. presidential race, Donald Trump’s campaign chairman, Paul Manafort, sat down to dinner with a business associate from Ukraine who once served in the Russian army.

Konstantin Kilimnik, who learned English at a military school that some experts consider a training ground for Russian spies, had helped run the Ukraine office for Manafort’s international political consulting practice for 10 years.

At the Grand Havana Room, one of New York City’s most exclusive cigar bars, the longtime acquaintances “talked about bills unpaid by our clients, about [the] overall situation in Ukraine . . . and about the current news,” including the presidential campaign, according to a statement provided by Kilimnik, offering his most detailed account of his interactions with the former Trump adviser.

[snip]

Kilimnik said his meetings with Manafort were “private visits” that were “in no way related to politics or the presidential campaign in the U.S.” He said he did not meet with Trump or other campaign staff members, nor did he attend the Republican National Convention, which took place shortly before the Grand Havana Room session. However, he said the meetings with Manafort included discussions “related to the perception of the U.S. presidential campaign in Ukraine.”

Meanwhile, as much of the evidence presented in Manafort’s EDVA case last week makes clear, he was in deep financial trouble. That’s why, prosecutors allege, he submitted fraudulent numbers to get loans fromThe Federal Savings Bank of Chicago and Citizen’s Bank, among other banks. Next week, prosecutors will probably present exhibits 268 and 269, emails to an employee, Dennis Raico (who will be granted immunity if he testifies) of TFSBC asking for the professional details of his boss, Stephen Calk. (h/t pinc)

268 2016.08.03 Email D. Raico to P. Manafort re Need S. Calk Resume

269 2016.08.04 Email P. Manafort to S. Calk re S. Calk- Professional Bio

The next day, Trump named Calk to his financial advisory committee.

Last week, prosecutors showed that, on August 10, Manafort told his tax preparer, Cindy LaPorta, that she should claim he’d be paid $2.4 million for work in Ukraine in November. (h/t NYCSouthpaw for this observation)

Even as he was allegedly engaging in bank fraud to stay afloat, Manafort (and his daughter) would get what appear to be blackmail attempts — threats to release details of his corrupt actions in Ukraine — details of which were later leaked on the dark web.

A purported cyberhack of the daughter of political consultant Paul Manafort suggests that he was the victim of a blackmail attempt while he was serving as Donald Trump’s presidential campaign chairman last summer.

The undated communications, which areallegedly from the iPhone of Manafort’s daughter, include a text that appears to come from a Ukrainian parliamentarian named Serhiy Leshchenko, seeking to reach her father, in which he claims to have politically damaging information about both Manafort and Trump.

Attached to the text is a note to Paul Manafort referring to “bulletproof” evidence related to Manafort’s financial arrangement with Ukraine’s former president, the pro-Russian strongman Viktor Yanukovych, as well as an alleged 2012 meeting between Trump and a close Yanukovych associate named Serhiy Tulub.

[snip]

In a Tuesday interview, Manafort denied brokering a 2012 meeting between Trump and Tulub and also pointied out that he wasn’t working for Trump at the time.

However, Manafort did confirm the authenticity of the texts hacked from his daughter’s phone. And he added that, before the texts were sent to his daughter, he had received similar texts to his own phone number from the same address appearing to be affiliated with Leshchenko.

He said he did not respond directly to any of the texts, and instead passed them along to his lawyer. He declined to provide the texts to POLITICO.

[snip]

Manafort said that the first of the texts arrived shortly before The New York Times published an August exposé revealing that the National Anti-Corruption Bureau of Ukraine had obtained documents — which have since come under scrutiny — that appeared to show $12.7 million in cash payments earmarked for Manafort.

That NYT story came out on August 14, just 3 days after he promised a bank he had millions more coming from Ukraine around the same time as the presidential election. The very next day, the AP would pile on, asking for comment on a story about Manafort’s undisclosed lobbying for Yanukovych that it would publish on August 17. As prosecutors pointed out in a filing in the DC case, this exchange with the AP — and the Manafort-Gates effort to sustain a lie about their lobbying campaign — is a big part of the reason they lied when DOJ asked them to register under FARA that fall.

For example, on August 15, 2016, a member of the press e-mailed Manafort and copied a spokesperson for the Trump campaign to solicit a comment for a forthcoming story describing his lobbying. Gates corresponded with Manafort about this outreach and explained that he “provided” the journalist “information on background and then agreed that we would provide these answers to his questions on record.” He then proposed a series of answers to the journalist’s questions and asked Manafort to “review the below and let me know if anything else is needed,” to which Manafort replied, in part, “These answers look fine.” Gates sent a materially identical message to one of the principals of Company B approximately an hour later and “per our conversation.” The proposed answers Gates conveyed to Manafort, the press, and Company B are those excerpted in the indictment in paragraph 26.

An article by this member of the press associating Manafort with undisclosed lobbying on behalf of Ukraine was published shortly after Gates circulated the Manafort-approved false narrative to Company B and the member of the press. Manafort, Gates, and an associate of Manafort’s corresponded about how to respond to this article, including the publication of an article to “punch back” that contended that Manafort had in fact pushed President Yanukovych to join the European Union. Gates responded to the punch-back article that “[w]e need to get this out to as many places as possible. I will see if I can get it to some people,” and Manafort thanked the author by writing “I love you! Thank you.” Manafort resigned his position as chairman of the Trump campaign within days of the press article disclosing his lobbying for Ukraine.

Manafort’s role with the Trump campaign is thus relevant to his motive for undertaking the charged scheme to conceal his lobbying activities on behalf of Ukraine. Here, it would be difficult for the jury to understand why Manafort and Gates began crafting and disseminating a false story regarding their Ukrainian lobbying work nearly two years after that work ceased—but before any inquiry by the FARA Unit—without being made aware of the reason why public scrutiny of Manafort’s work intensified in mid-2016. Nor would Manafort’s motives for continuing to convey that false information to the FARA Unit make sense: having disseminated a false narrative to the press while his position on the Trump campaign was in peril, Manafort either had to admit these falsehoods publicly or continue telling the lie.

The day the article came out, August 17, Trump gave Steve Bannon and Kellyanne Conway larger roles in the campaign. Two days later, Manafort would resign, though he would remain in the loop with Trump. Indeed, according to the hacked texts from his daughter, he remained involved and actually “hired [Bannon and Conway]. Interviewed them in trump towers.” (h/t ee)

But according to leaked texts allegedly hacked from the phone of his daughter Andrea Manafort Shand, Manafort’s resignation was all for show, and he continued to wield influence in the campaign.

On August 19, when Paul Manafort officially resigned, the allegedly hacked texts show that Manafort Shand wrote to one her contacts:

So I got to the bottom of it, as I suspected my dad resigned from being the public face of the campaign. But is still very much involved behind the scenes.

He felt he was becoming a distraction and that would ultimately take a toll on the campaign.

Several hours later, a different contact appears to have texted Andrea Manafort to say, “Thoughts go out to your pops—I can only imagine that he’s relieved, angry, hurting, a combination of a lot of emotions. Wishing you and your fam the best.” To which Andrea responded: “Hahaha you’re so silly. It’s all just pr.”

But — as the Mueller filing makes clear — the pushback on the AP and NYT stories didn’t end Manafort and Gates’ efforts to lie about their activities in Ukraine. A filing in the Alex van der Zwaan prosecution details that on September 12, 2016, in the wake of the Kyiv Post’s exposure of new details about this work (h/t ms), Kilimnik would contact van der Zwaan, leading to a series of communications between the two of them and Skadden Arps’ Greg Craig regarding how Manafort and Gates laundered money and its sources to pay Skadden for a report on Yulia Tymoshenko’s prosecution.

Instead of truthfully answering questions about his contacts with Gates and Person A, van der Zwaan lied. He denied having substantive conversations with Gates and Person A in 2016. When confronted with an email dated September 12, 2016, sent by Person A to van der Zwaan, the defendant again lied. The email was sent to the defendant’s email address at his law firm, though the Special Counsel’s Office had obtained the email from another source. The email said, in Russian, that Person A “would like to exchange a few words via WhatsApp or Telegram.” van der Zwaan lied and said he had no idea why that email had not been produced to the government, and further lied when he stated that he had not communicated with Person A in response to the email.

[snip]

Further, van der Zwaan in fact had a series of calls with Gates and Person A—as well as the lead partner on the matter—in September and October 2016. The conversations concerned potential criminal charges in Ukraine about the Tymoshenko report and how the firm was compensated for its work. The calls were memorable: van der Zwaan had taken the precaution of recording the conversations with Gates, Person A, and the senior partner who worked on the report. In van der Zwaan’s recorded conversation with Person A, in Russian, Person A suggested that “there were additional payments,” that “[t]he official contract was only a part of the iceberg,” and that the story may become a blow for “you and me personally.”

[snip]

Federal Bureau of Investigation Special Agents assisting the Special Counsel’s Office assess that Person A has ties to a Russian intelligence service and had such ties in 2016. During his first interview with the Special Counsel’s Office, van der Zwaan admitted that he knew of that connection, stating that Gates told him Person A was a former Russian Intelligence Officer with the GRU.

These are the contacts van der Zwaan hid, at first, from Mueller’s investigators. Van der Zwaan would claim he wasn’t hiding those contacts because he knew Kilimnik was a former GRU officer, but instead to hide that he recorded the conversation with Craig from the Skadden lawyers who represented him in the first interview with the FBI. But it’s still not clear why he made the recording. It sure feels like blackmail to me, though may also have been an effort to stay on track on his quest to make partner at Skadden (remember that van der Zwaan was being romanced into the family of Alfa Bank founder German Khan during 2016; he would marry Khan’s daughter in 2017).

Indeed, Paul Manafort’s life looks like a series of blackmail attempts during that period.

Which makes the stakes of the question Carrie Johnson asked in her Manafort trial round-up all the greater.

Left unanswered so far, Scott, is why Manafort joined the Trump campaign in 2016 for no money when he was bleeding. He was bleeding money and got no salary from that Trump campaign.

Why was Manafort, badly underwater at the time, willing to work for Trump for “free”? What was the $2.4 million he expected to be paid in November for?

And given all the publicly known things Manafort did out of desperation at the time, what kind of non-public desperate things could he also be coerced into doing?

Update: Added the Kyiv Post and Andrea Manafort details.

Update: Added Calk and TFSBC details.

Timeline

August 2: Manafort has an in-person meeting with Kilimnik where they discussed “the perception of the U.S. presidential campaign in Ukraine”

August 3: Manafort asks Dennis Raico for the resume of his boss, Stephen Calk

August 4: Manafort asks Raico for Calk’s professional biography

August 5: Trump named Calk to his financial advisory committee

August 10: To obtain a fraudulent bank loan, Manafort tells his tax preparer to claim $2.4 million in payments from Ukraine for which he had no documentation

Before August 14: Manafort is blackmailed, allegedly by Ukrainian politician Serhiy Leshchenko

August 14: NYT publishes “Secret Ledger in Ukraine Lists Cash for Donald Trump’s Campaign Chief”

August 15: In advance of an AP story on their undisclosed lobbying, Manafort and Gates work out a false story with Mercury Consulting and the Podesta Group

August 17: AP publishes “Paul Manafort helped a pro-Russia political party in Ukraine secretly route at least $2.2M to DC lobbyists”; Trump gives Bannon and Conway larger roles in the campaign

August 19: Manafort resigns from campaign

September 12: Kilimnik contacts van der Zwaan regarding cover-up regarding payments to Skadden Arps

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84 replies
  1. pseudonymous in nc says:

    Supplementary to the front end of the timeline:

    August 3: “Need S. Calk Resume”
    August 4: “S. Calk- Professional Bio”
    August 5: Calk named to campaign’s economic advisory council.

    And next week in the trial is likely to have TFSB’s Dennis Raico on the witness stand to talk about what happened there — that by August, fiddling the books wasn’t enough, and Paulie the Rug was using what was left of his campaign clout to offer a position to a bank CEO as collateral.

  2. Peterr says:

    But it’s still not clear why he made the recording.

    This could also be said of Cohen and I wonder how many others in the Trump orbit. The two most obvious answers are blackmail or defense against blackmail, depending on whether they are playing offense or defense.

    When word of Cohen’s tapes came out, there was general “what kind of lawyer tapes their conversations like this?” which struck me as a subtle way to throw Cohen under the bus as a bad apple. Add Van der Zwann to the list of lawyers running tape, and you have to wonder what it is about Trump and his campaign that attract bad apples.

    • Bob Conyers says:

      There was an article (I’ve since forgotten where) claiming recording Trump was a defense method for people doing business with him to protect themselves when he lied and weaseled out of agreements in future meetings.

      I’m not sure how that would work. I’m sure confronting him with a recording would mean a burnt earth strategy that could cost as much as was gained.

      It’s possible having a recording would let you circle back to other meeting participants and nail down a common understanding of key points before memories faded and became susceptible to future BS from Trump.

      It’s also possible they were useful in constructing a parallel record – “I’m sure you said on March 1 to make the payoff, not April 1, and I have the emails to the accountant and cancelled check to back this up”

      • bmaz says:

        Technically, maybe in most circumstances. But licensed attorneys have other obligations and rules, and surreptitiously taping a client and disclosing it against their interests is highly unethical. It is not just what is “legal” for most people.

        • NorskieFlamethrower says:

          I still wonder about why in this case and under these circumstances we clutch our pearls about the “ethics” of the taping and disclosure when it’s legal in NY and disclosure should be covered anyway by the crime fraud exception.

        • earlofhuntingdon says:

          The disclosure is the bigger ethical problem, since it involves client confidentiality.  But simply taping a conversation without the client’s knowledge would irritate most clients and end a lot of relationships.

          Mickey and Donny, though, had a curious arrangement, and much of Mickey’s work, and their conversations, would not have been about obtaining legal advice – which removes it from the protection of client confidentiality anyway.

          The taping goes more toward the crap that Mickey routinely appears to have done for the Don, the terrible costs the Don imposed on most people who worked for him, and the questionable things he had them do.

          • NorskieFlamethrower says:

            Yes yes, of course breaching confidentiality by taping would certainly irritate most clients and laws circumscribing taping  conversations are a good thing. But, in fact, the continuing discussion of the legality and ethics of both the taping and the release of the tapes are a waste of time and a distraction from discussion and analysis of what is going on in this case. The taping is legal in this case and the disclosure does not compromise the use of the tape(s) in legal proceedings or process. I just get impatient with rehashing the process issues over and over again but I’m old and get impatient easily.

            • earlofhuntingdon says:

              The taping is Not disclosure.  It does not breach confidentiality, but its unauthorized disclosure would.

              Most clients would want to know about it or would say no to being taped, rather like Father Brown saying during confessional, hold one minute while I change the tape.

              These things are not either or.  They are cumulative.  They all matter and they all have to be dealt with or we do not return to near normal.  In the case of Cohen and Trump, a common theme in their behavior would be cruel abuse of power.  Whether in Manhattan or the middle of flyover country, they would not have a monopoly on that.

              • SpaceLifeForm says:

                Wondering about a technicality.

                Do we really know if the ‘client’ was really a ‘client’?
                (at time of any recordings)

                What really makes someone a ‘client’?

                Normally, the client authorizes legal representation via a signed contract.

                Attorney-client privilege can not exist before that act.

                One can always fire their lawyer. And the lawyer can always quit also. As we have seen.

                How would that compare to a ‘joint defense agreement’?

                Can any Attorney-client privilege just evaporate?

                https://corporate.findlaw.com/litigation-disputes/joint-defense-agreements-hidden-dangers.html

                Later, well into litigation, you learn that one of the law firm members failed to perform an adequate conflict check. Indeed, the other firm had a past representation of an adverse party in a substantially related matter. Under these facts, the firm’s disqualification is a serious risk. In fact, if tainted information was shared within the joint-defense group, disqualification of the entire group may be mandatory.

                IMPLIED ATTORNEY-CLIENT RELATIONSHIPS & PRIVILEGE WAIVER

                But what happens if your client and another member of joint-defense group become adverse in litigation? One concern is potential waiver of the attorney-client privilege.

            • Peterr says:

              My observation was not so much aimed at the legality or lack thereof in this case, but noting that at least two of the folks involved on Team Trump seemed fine with easing right up to (if not over) this line.

              When a client (Trump) attracts multiple lawyers who feel like this is something they need to do, that says something not just about the lawyers but also about the client.

              And that something is not good.

  3. Bob Conyers says:

    So to clarify, Sergei Leshchenko and/or the other Ukranians behind the leaks were most probably the anti-Russian side of Ukranian politics, right?

    I’ve lost track – have they been working with US investigators over he past couple of years in any significant role that we know of?

    • SpaceLifeForm says:

      Which leaks?

      And, do not assume that there is no ongoing Russian IC cooperation happening.

    • Cenphx says:

      Weren’t Ukrainian prosecutors cooperating with Mueller at first and then they stopped, nearly at the same time the Trump regime agreed to sell the Ukraine some weapons? I’ll see if I can dig up the story…

      • NorskieFlamethrower says:

        You’re correct Cenphx but I’m not certain about the status of the arms payoff or whether it happened.

      • earlofhuntingdon says:

        Correct.

        Just to help the Russians, though, the shoulder-fired weapons were stored over a hundred miles from the proverbial Russian front, at a facility under American control, negating their exchange value.

        Mr. Trump, however, persuaded the Ukrainians to stop cooperating with his Department of Justice in order to make nice with the White House.  Another example of how Not Normal is this presidency.  Mr. Trump has been at war with his own government since he took office.

      • Bob Conyers says:

        Yes, I forgot about that, thanks.

        Leshchenko is said to be an independent journalist, so it’s possible he’s outside of any official agreements, but I’m not at all sure what that would mean here.

      • Allison Holland says:

        is it blackmail when the trump administration withholds defense weapons promised by the obama administration unless the ukrainian government stops all cooperation with the mueller investigation. ?  is that collusion ?

  4. earlofhuntingdon says:

    Manafort claimed a US$2.4 million income item, apparently from the Ukraine, in 2016. It’s not obvious he did any work in the Ukraine in 2016. Does he keep his accounts on a cash-basis and book it when received rather than when earned? Or did he receive the money in an earlier tax year, keep it in Cyprus, and only bring it to the US in 2016. If he did the latter, that sounds like an income shifting problem.

    I heard about an exec once who worked for a year and required that his final $500K of comp be delivered to him, local time midnight, December 31st, when he was in mid-Pacific at 40,000 feet. In his mind, that meant he would have been paid nowhere. He was paid as requested.

    He claimed to reside in a jurisdiction that does not tax foreign-source income, but he lived and earned that income in a jurisdiction where it would have been taxable.

    That’s one reason they say that the difference between tax planning and tax avoidance used to be five to ten in the federal pen. Now, it’s whether the accountant makes partner.

    • pseudonymous in nc says:

      Does he keep his accounts on a cash-basis and book it when received rather than when earned?

      His bookkeeper testified (with contemporary email evidence) that DMP’s accounting was cash basis, and that she couldn’t switch to accrual when asked to do so.

      • Bob Conyers says:

        Is there an accounting expert here who can clear this up for me? My understanding is that in some instances it’s possible to switch from cash to accrual, or vice versa, but you have to go through a big reconciliation process, and Manafort didn’t want to do that.

        My vague recollection is that a lot of government entities combine cash and accrual accounting, except they count revenues on a cash basis and expenditures on an accrual basis, which is the opposite of what Manafort was trying to get away with.

        • earlofhuntingdon says:

          Accounting is a complex business.  But I don’t think the ins and outs of properly converting a small personal service business from cash to accrual basis accounting are relevant here, except as a stumbling block to an always on the edge businessman – and apparent money launderer – trying to stay in the black.  A guy who owed seven or eight figures to unpleasant creditors.

          • Peterr says:

            Failing to tell your accountant about your foreign bank accounts is a problem, regardless of whether you do you accounting on a cash or accrual basis.

            • earlofhuntingdon says:

              Got it.  Thanks.

              Like Kris Kobach, Sullivan’s judgment seems inversely proportional to his superlative academic credentials.  Kobach seems hapless, a state sec’y of state who needed to be schooled by a judge in evidence and courtroom procedure 101.

              I don’t agree with Sullivan’s politics, but more than that, he just seems to be a mean shit.  More elegantly, a misanthrope.  The same seems to apply to Brett Kavanaugh.  Perhaps it’s the combination of arrogance, superiority, brains, and callousness.  Hoi polloi don’t count; they are to be managed, not worked with toward some end.

          • pseudonymous in nc says:

            Yeah, the basic point is that the strategy that worked during the time when Paulie and Rick were rolling in dirty money — minimise the official profits and use wire transfers and bullshit loans from offshore companies to repatriate cash in the form of rugs, home improvements and dubious tailoring — didn’t work when the money dried up and they had to look like business was humming along in exchange for short-term loans.

            Theoretically, Paulie could have treated Yanukovich’s ouster as time to hang up his bespoke shoes, retire from dirty politics, and come up with a plan to launder his offshore booty back into the US. Except that seems to be the cue for Deripaska to belatedly go after him over the Black Sea Cable deal, with the December 2014 Caymans bankruptcy petition and the Virginia fraud lawsuit in 2015. The money at stake is a rounding error for Deripaska, but it’s enough to put Paulie and Rick in deep shit, and also creates an incentive for them to keep their loot hidden.

  5. Tracy says:

    On a tangentially-related topic: just read that Rand Paul is going to Russia… Why??

    He was reportedly the one who suggested that the Orange in Chief revoke security clearances after previous directors spoke out against his performance in Helsinki; and Paul was one of just 5 lawmakers to oppose Russian sanctions.

    Does anyone know what is going on b/t Paul and Trump? And why is Paul going to Russia now, what does it serve? since the optics are pretty bad! (Like the group of Repub senators that went to Russia before Helsinki, flouting all diplomatic norms and protocols… I don’t think we ever learned what that was all about, either!)

    Does this just illustrate the seeming Repub belief that they can act with impunity in all things – do anything to keep hold of power, without consequence to themselves – that they can continue to conspire with the WH with immunity from repercussions?

    And that collusion, when done openly and in plain sight, is just fine??

  6. Tracy says:

    On a tangentially-related topic: just read that Rand Paul is going to Russia… Why??

    He was reportedly the one who suggested that the Orange in Chief revoke security clearances after previous directors spoke out against his performance in Helsinki; and Paul was one of just 5 lawmakers to oppose Russian sanctions.

    Does anyone know what is going on b/t Paul and Trump? And why is Paul going to Russia now? since the optics are pretty bad! (Like the group of Repub senators that went to Russia before Helsinki, flouting all diplomatic norms and protocols… I don’t think we ever learned what that was about!)

    Does this just illustrate the seeming Repub belief that they can act with impunity – do anything to keep hold of power, without consequence – that they can continue to conspire with the WH, immune from repercussions? And that collusion, when done openly and in plain sight, is not a crime??

    What is happening here??!!…

  7. I Never Lie and am Always Right says:

    I’m a hard core tax litigation attorney.  I’ve dealt with unreported income issues and method of accounting issues for a long time. I’ve also represented tax professionals who were in positions similar to the tax professionals who testified in the Manafort trial last week.  I’ve even seen situations where someone is accused of tax fraud and loan fraud based on the same tax return.

    Method of accounting issues are not involved in Manafort’s trial. He must report his income when he gets actual or constructive possession of that income. Don’t take your eye off of the bouncing ball, which is the money going into and out of the foreign bank accounts, the failure to file FBARs, and false documents submitted to lenders.

    • Bob Conyers says:

      I don’t disagree that the accounting methods are a sideshow. I was curious whether there was an irony occuring whether Manafort, in his eagerness to start counting the money had been promised, but had not yet been paid, as income for the sake of his loan application, was now opening himself to new tax obligations that wouldn’t have otherwise existed.

      Again, a sideshow, since the fact that he was altering documents all by itself is pretty damning, I’m just wondering what other wrinkles there are.

  8. Bay State Librul says:

    Thanks,

    In your experience. How many plead guilty? How many are found innocent? What is the average prison time? How much $$$ does the treasury get back through liens, etc? Do the CPA’s lose their licenses?

     

    • Bob Conyers says:

      To add to these questions, how often does the IRS or state agencies actually investigate, find and launch enforcement activities?

      I have to assume part of Trump’s anxiety is that he sees a lot of mirrors in the Manafort tax/fraud investigation and his own finances. Based on the Trump Foundation mess, it seems like the Trump Co. could easily be equally fast and loose with the rules, but on a much bigger scale.

    • Anura says:

      I find it interesting to see how so-called Libertarians like Rand Paul gush over authoritarians. It just goes to show that their beliefs have absolutely jack shit to do with freedom and everything to do with justifying why they deserve to be so much better off than others.

      • Trip says:

        Thank you. I despise Rand Paul. I didn’t always because he had some decent points on privacy, but he has demonstrated himself to be a lying selfish fascist like Trump. No wonder his neighbor kicked his ass.

        • Tracy says:

          Definitely seems up to no good… I hope that the Repub party is getting investigated for their obstruction/ conspiracy/ collusion w/ another branch of govt, the exec. Seems like the Nunes late night run to do bidding of WH, the strzok grilling, the rose nstein impeachment malarkey, and all these Repub-Russian meetings are suspect, if not a flagrant mid-use of power and poss criminal activity.

          • Charlie says:

            Quote from DailyKos on Rand Paul in Russia
            In a meeting at Russia’s upper house of parliament, Paul also invited Russian lawmakers to meet with U.S. Congress members, in Washington or elsewhere, Interfax news agency reported him as saying. “I think this is in­cred­ibly important,” Paul said after the high-profile sit-down.

            • harpie says:

              Julia Davis:

              #Russia’s state TV is pretty specific as to why they consider Rand Paul “a loyalist“: **Voted against Russia sanctions **Voted against Montenegro joining NATO **Supported Trump’s performance at the #HelsinkiSummit 
               

          • Bob Conyers says:

            Prosecuting members of Congress for any actions even vaguely connected to official duties is extremely hard for constitutional reasons, and that includes for things like holding hearings, meeting with foreign officials, and threatening Rosenstein with impeachment.

            For that matter, the Supreme Court has severely constricted bribery and campaign finance laws, the Federal Election Committee has been rendered largely ineffective, and the IRS has been hamstrung in many areas. Oh, and the House and Senate Ethics Committees are pretty toothless too.

            There are tremendous opportunties for the Dems to campaign on reform in 2020, if they have the willpower and foresight.

        • Anura says:

          The privacy part is why I couldn’t despise him in the past, and assumed he was principled but misguided. I’ve since realized that in practice he would allow unlimited corporate surveillance with no restrictions on what can be done with your data, including selling it to military and law enforcement (especially if they are privatized). It’s not libertarianism that they are seeking, it’s feudalism where the decrees of the king have simply been replaced by immutable private property laws.

  9. Gary Siegel says:

    If Manafort continues to be in great legal jeopardy, and Trump does pardon him, could the pardon itself be considered obstruction?

  10. Trip says:

    From Marcy’s retweet:
    Jane Coaston‏Verified account @cjane87 27m27 minutes ago
    Unite the Right 2 is happening. It’ll be outside of the White House. But between shambolic planning and what happened last year, a lot of white supremacists aren’t exactly jazzed about it.

    https://twitter.com/cjane87/status/1026487181878222849

    Also, FYI: ProPublica and Frontline tomorrow:
    “Documenting Hate: Charlottesville” – Preview
    https://www.pbs.org/video/documenting-hate-charlottesville-preview-wbuk3a/

  11. harpie says:

    Story of Russian scientist, Viktor Kudryavtsev, from webradius

    This adds a bit more about the case against a Russian scientist accused of providing a NATO intel service (not the USA) with data re hypersonic weapon systems. / “Kudryavtsev gave this data under the guise of scientific cooperation with the Belgian von Karman Institute of Fluid Dynamics to the special services of the NATO countries.” / The data was evidently shared among NATO allies, leading to someone in the US govt leaking info to a reporter [CNBC report in May-see 7/25 thread below]. The subsequent US news report spawned an FSB investigation resulting in arrest of Viktor Kudryavtsev on charges of High Treason.
    7/25 THREAD>>> 8:34 AM – 25 Jul 2018 Free Beacon  / While Western intelligence services are said to be monitoring the progress of the FSB’s investigation into Kudryavtsev, there is no sign as yet that the United States is seeking to identify the American who leaked info and that person’s motives for doing so.

    I wonder which American could have known and “leaked” this information, and when, to the detriment of this Russian scientist and our NATO allies?

  12. Tim Schreier says:

    When I look at the picture from Manafort’s perspective, he is trying to survive. What awaits him “on the outside” is a Financial Junkyard. He is done and will be forced to liquidate all of his remaining assets to pay enormous legal fees racked up in the Trial. He has lost all professional credibility and is basically useless to any of his former Clients. He has no incentive to turn on Trump, regardless of guilt.  He has every incentive to remain loyal to Trump and Trump knows this. Trump holds both access to “bail out” money for Manafort and the promise of a Federal Pardon.

    I hope Mueller and Team recognize this and are leaving room for States (NYS Barbara Underwood) to Prosecute him of Crimes committed in their domain of duty. Federal intimidation may not work for Manafort because he believes in the Loyalty Oath to Trump and it’s value propositions of Pardons and Bailouts.  States, on the other hand, provide a real threat to Manafort. I believe if Mueller wants Manafort to turn, it will find a path through Attica, not “Club Fed”.

    • SpaceLifeForm says:

      Someone is paying Manafort’s legal fees.

      If you can find some dots, that would be UI (useful information).

      I’m pretty certain the lawyers are *not* working for rugs.

      • Avattoir says:

        Someone with an interest in the Trump administration agreeing to offset tariffs against aluminum imported from Canada, Germany & Japan, against replacement produced imported from Russia?

        A lousy 2o million or so is, as suggested above, a mere rounding error in multi-billion dollars of aluminum production delivery contracts. Also, if it mattered, a deductible business expense.

  13. Watson says:

    IMHO Manafort’s primary motivation comes from the fact that he and Trump have spent their careers doing business with the kind of people who say: ‘Your daughter is very beautiful. It would be a shame if something happened to her.’ I think he sees an eventual pardon as his only out.

  14. I Never Lie and am Always Right says:

    I’m replying to posts above here, since the reply button is not working. I don’t have time now to go into details on the statistics related to federal criminal tax prosecutions, etc., other than to state that the publicized conviction rate for tax crimes exceeds 90%; but this figure includes guilty pleas. The conviction rate for those very few defendants who go to trial in tax-related criminal prosecutions is lower, but I don’t think that DOJ Tax publishes that figure. Answers to many of your questions can be found at the USDOJ Tax Division’s website. But the best place to start is Jack Townsend’s Criminal Tax Blog. Jack is one of the most knowledgeable attorneys in the country in this area. His site, in addition to containing many useful posts, also has links to the Tax Division’s website and many other informative websites relating to criminal tax enforcement.

    As for the “sideshow,” the IRS, in audits, can use documents given to lenders, which reflect income higher than the income shown on tax returns, as an “admission” by the taxpayer that their income was higher than stated on the tax return. The usefulness of such an “admission” is severely limited, however, if the “admission” forms the basis of a conviction for loan fraud. The same can be said for other evidence which supports a conviction for loan fraud based on what appear to be “inflated” income figures.

    • Bob Conyers says:

      Thanks for the reference to the Jack Townsend blog, that looks like a great reference. The first entry I read was this one:

      http://federaltaxcrimes.blogspot.com/2017/07/klein-conspiracy-in-nontax-crimes-news.html

      which over a year ago seems to be anticipating a number of issues regarding the potential conspiracy chatrges.

      My big question, and I don’t know if you have an answer, is this: If Trump is a serious tax cheat, at a felony level, how likely is it that the IRS, acting in a routine way, would have found out and gone after him?

      I am guessing Manafort’s pretty sketchy and sloppy activity may well have been undetected for a long time – if Trump has done comparable things, how likely would anyone in a government have known?

      Or stating it another way, is the apparent lack of any serious tax prosecution in the past a sign that Trump is probably free of Manafort style problems? Or there a good chance that any issues just went undetected?

      • earlofhuntingdon says:

        The wealthy are rarely audited as much as they should be, and can afford better tax counsel than the IRS has, like the companies they own.

        Moreover, a lot of their tax avoidance games have been made legal – making them tax planning games – by their minions in legislatures.  The executive has chimed in by gutting the IRS’s budget and its staffing.

  15. Frank Probst says:

    @bmaz and the other trial lawyers:

    Lots of buzz in the last two days about Trump’s tweet saying that the Trump Tower meeting was to get dirt from the Russians (as opposed to adoptions).  Most of the focus has been on the legal jeopardy this just put his son in (although I think Jr’s e-mails already made the purpose of the meeting pretty clear).  Even “The Judge” on Fox News is saying that Jr could get hit with conspiracy charges for this.

    Manafort was also at that meeting, and is presumably on the hook for the same set of potential crimes.  Is there any real chance that all of this news coverage could affect this trial?  Five of the counts in this trial are for conspiracy (albeit for a completely different set of crimes) , and the media (smelling blood in the water now) is saying that Manafort (by extension) appears to be guilty of conspiracy regarding the Trump Tower meeting.  Can the defense use this in any way to claim that the news is tainting the jury?

    (Usual disclosure:  I have absolutely no idea if this is truly relevant or if it’s well off into the weeds.  I’m sincerely asking the questions.  My expertise is medicine and genetics, and as an example, I’ve seen that doctor/patient privilege has vastly different rules than attorney/client privilege, so I’m mostly just trying to understand what the hell is going on here.)

    • Trip says:

      Media coverage versus a presidential tweet?  Both public.

      Manafort is on trial now for the money/taxes issues. The jury was instructed not to read/watch/listen to anything about Manafort. The tweet was about Jr. The prosecutors aren’t going to bring up the meeting. (Also not a lawyer)

    • Avattoir says:

      You mean, bring all that up NOW as some sort of tactic, in anticipation of the upcoming trial in D.C.?

      Awfully risky; extremely susceptible to massive backfire. Unless of course the defendant has given up on the normal relationship among trial procedure, evidence and burdens of proof, and instead has available some morally righteous cause he thinks he can connect with the conduct the government is criminalizing.

      And apart from that, it’d be an awfully BOLD tactic – akin to Chicago 7: turning a formal trial into political performance theater.

      Moreover, bold tactics are particularly dicey to pursue in trials presided over by Cranky Old School Seen-It-All-Before Know-It-All judges.

      Finally, IMO it’s not something that would sit well with this client – someone with whom classic mob tactics (witness tampering, funny business with the judge, juror outreaches) would seem to sit more comfortably.

      • Frank Probst says:

        I don’t think Trump is tweeting in order to help Manafort.  But I think what Trump is doing will have the unintended side effect of putting Manafort’s name back into the news as a co-conspirator in the Russia investigation.  I think Trump is just trying (badly) to save Jr.  But any discussion of the infamous Trump Tower meeting usually involves stating who was there, and it’s hard to gloss over the fact that one of the participants is currently on trial RIGHT NOW for unrelated conspiracy charges.

        • Trip says:

          He’s NOT trying to save Junior. He wants Junior to take the blame and not name him as aware and approving of the meeting, as I mentioned yesterday. He’s throwing Junior under the bus, while fluffing him with the “wonderful” flattery. He added “I did not know”. Psychological mindfuck for his kid.

          He has done this with every other single person caught up in the conspiracy. Say what a great guy someone is and then distance himself.

          • earlofhuntingdon says:

            And every other person he’s ever met.

            Trump’s principal parenting skill seems to be blaming and humiliating his children for existing, and especially for demanding that he take time away from himself, the height of irresponsibility.  You’d think a guy that misanthropic would know what birth control is.

  16. Tracy says:

    Replies:

    @SpaceLifeForm – I appreciated the amazingnature cow tweet!! :-)

    @Avattoir – re: Russian aluminum interests, are you referencing the recent Deripaska/ Rusal sanctions relief proposed “by” Steve Mnuchin…?

    @Bob Conyers, re: holding Congress accountable for co-obstruction/ co-conspiracy – I hear that there are a lot of things against this, and I’m all for reform if we see a blue wave in 2018 and 2020. I’m no lawyer, what do you think of Jennifer Rubin’s argument (she references in this WaPo opinion the view of three others who also make the case) :

    https://www.washingtonpost.com/blogs/right-turn/wp/2018/07/29/house-republicans-cannot-be-allowed-to-obstruct-justice/

    (excerpted:)

    “Congressional votes and committee work, speeches on the floor and other action directly relating to the legislative process may be protected by the ‘speech or debate’ clause. The constitutional provision protects members of Congress from being sued or prosecuted for carrying out their official duties. However, there is nothing official in sneaking over to the White House to review classified materials and then publicly misrepresenting them. There is nothing official in outing a confidential source.

    Moreover, one doesn’t have to be a mystery writer to surmise that Nunes and members of the Freedom Caucus may have been working in concert and consultation with Trump lawyers and/or aides. In particular, the crafting of the Nunes memo and its release by the White House was a joint operation, if you will, requiring congressmen to piece together a misleading account and the White House to sign off on it, authorizing its release. Congressmen, Trump lawyers and White House aides conferring with intent to mislead investigators and the public, to disable the inquiry and/or to discredit law enforcement sounds an awful lot like obstruction of justice. Conversations or documents relating to that sort of conspiracy are in no way privileged.”

    As for others: I couldn’t reply to all, but lots of interesting ideas/ links here, thanks!!

  17. Avattoir says:

    Storytime. This goes back some decades:

    I prosecuted a break-in at a large local of a national union that aimed to ‘liberate’ a safe containing a LOT of cash (If I recall correctly it was election season.). The heist was masterminded by a Boss, his trusted Hench, and a typically-late-added Wheel Man whose job was, if & when cops showed up, to draw them off & away from the 2 principals as they worked to load & escape with the safe.

    Alarms went off and cops were called; but their pursuit smelled out a rat’s feint so they feigned pursuit, pretending to lose Wheel Man while in fact tailing him. Wheel Man, concluding himself brilliant for  having evaded the cops, went home for the night, then in the morning drove out of town to his employers’ trailer.

    Then the plot twisted back onto itself: during the raid, both Boss & Hench escaped in the night, leaving behind the safe they’d been working to open for some time, & Wheel Man.

    In their first go at Wheel Man, the investigating agents managed to get out of him something more or less like the messy, contrived story Verbal told in The Usual Suspects – except not nearly so consistent, convincing or entertaining. Wheel Man’s story was so shot thru, it didn’t survive the second go, and what resulted was just enough verifiable info to constitute a confession by Wheel Man.

    Wheel man signed both statements: his first transparently contrived effort at exoneration, and his second, a whole new set of lies that yet provided just enough detail about himself that he was caught in a trap of his own devising.

    By happenstance,  a few nights later Boss & Hench were encountered by some private security, including an ex-cop, apparently casing another union hq, and in plain view in the back of their pick-up was a big old tool bag that clanked something ferocious. Security filed an incident report, that got picked up on by the investigators who’d dealt with Wheel Man, and next thing you know there’s a search warrant on the truck.

    What warrant yielded the bag of tools, at least a couple of which looked like they’d bee used recently, & those seemed to fit marks left on the recovered safe.

    But Boss & Hench came in fully lawyered up, so the investigators chose to take a third go at Wheel Man. This time he plainly confessed his own role, but did so framed within a brand new pack of lies, quite obviously designed to lead away from Boss & Hench. Which, to us on the government side, mostly presented quite a fun technical problem, once we received a superficially compelling expert’s report tying the marks on the safe to the tools seized from Boss and Hench’s truck.

    So what we saw was some guilty pleas from Wheel Man and a pretty darn good circumstantial case against Boss and Hench based on that expert in tool markings, plus calling Wheel Man. Wheel Man by then had plead out and was awaiting sentencing. All we needed him for as a witness was confirm his own involvement, that he knew the other 2 and that he recognized their truck. Then we expected him to refuse to testify against them (totally unsurprising given they were scary violent mobbed-up dudes with histories of issuing threats and meaning them), but not tell any new pack of lies given how he was already up the creek due to doing just that 3 times already.

    No one involved in this little drama was in custody going into the trial of Boss & Hench. During a break in the trial before we were to call Wheel Man to the stand, he approached our lead investigator & whatever they discussed resulted in a short meeting of witness, investigator & prosecutor.

    In that short meeting, Wheel Man said he’d just minutes before received a death threat from Hench & now was just incensed, given all the trouble he’d caused for himself by lying his ass off repeatedly to keep them out of his problem. So, he’d decided (so he told us), Screw this: Imma tell the truth, the whole etc.

    We were decidedly What Ever over that. If he embarked on either a new pack of lies, or went back to one of his earlier versions, even in chief we could wreck his cred on that pretty easily.

    But once on the stand, he apparently did as he promised us: now his FOURTH version of the heist tale, for the first time, fit all the proven facts on which we’d built the case for the prosecution.

    Plus, he readily – and with such an openness that it must have seemed almost a joyous exercise for him – offered up in advance of cross-examination even began, that he had a long record of fraud, theft, and, most intriguing, perjury (His record, or jacket, included, to borrow from Kenny Mars in The Producers, “Two coats!”).

    So it shouldn’t be hard to imagine what a hugely self-congratulatory and self-entertaining time the defending attorneys proceeded to have with this witness. It was like watching a pair of ravenous lions devour a succulent baby gazelle.

    And their final talks to the jury featured especially soaring language reaching back to the Magna freaking Carta and utterly unconcealed delight at their own brilliance in confronting Wheel Man.

    Adding to that extravagant display, the judge went out of his way to give an extra defense-favorable jury instruction about caution in considering accomplice testimony, larded up with a luxurious repetition of Wheel Man’s record of dishonesty, lying, perjury & 3 prior “clearly perjured” statements “just in the context of this case!”, then went on to repeat his accomplice instructions TWICE MORE.

    The jury was back in under an hour: Guilty on both Boss & Hench.

    Our side’s first reaction was to credit the verdict to the tool marks & our own evidently brilliant expiation on how that withstood all witness shenanigans.

    But then we learned that a TV reporting crew following the trial (due to the union angle) had interviewed the foreman and at least some of the other jurors, who were shown on screen eager to tell the world they’d started out by considering all of Wheel Man’s horrible past record, his unforgivable fraud and obstruction in the context of just this case, and the judge’s repeated instructions, then found that every one on the jury figured Wheel Man had told the absolute 100% truth on the stand, took a perfunctory vote, and told the bailiff they had a unanimous verdict.

    It wasn’t clear any member of the jury even CONSIDERED the expert tool mark evidence; according to what at least some of them had told the TV crew, they’d already voted unanimously to convict before even getting to all that.

     

    Not to beat this dead horse longer, this True Crime anecdote kept coming back to me as I read and heard described the defense attacks on Rick Gates and Judge Ellis’ scurrilous dissent into the arena on Manafort’s behalf.

     

    • it's complicated says:

      Avattoir, this gave me some direly needed comic relief, thank you very much!

      I second what Trip said, hey, I would even minute it if possible.

      • Avattoir says:

        Tool marks indeed: showing my extreme seniority there, bmaz. Per James Brown, There Was A Time.

        Nowadays, of course, the profession’s treatment of such jiggery pokery is substantially more nuanced. Not even fingerprint evidence has escaped the march of actual science and statistical sunlight. I myself tend to blame the popularization of sabermetric ‘trufinness’ and the advanced metrification of pro sport, for this trend against what was once genuflected upon as Science, now so open to attack as Grift (which it largely is).

        Ah but we were so more trusting then / We’re over all that now 

    • Avattoir says:

      Your friend Ken White is also very much in StoryTime Faerie mode: https://twitter.com/Popehat/status/1027220309902938113

      Not sure I can top that one, but I’ve got several that match it. Here’s one topical to the season and this website’s impending annual attention diversion to the National Frontal Lobe sport; briefly:

      While still a Legal Assistance Clinician back east before my persecution daze, I caught a bank robber client. Defendant, not technically an immigrant but being born & raised in St. Thomas he might just as well have been one, entered a local bank & attempted to pass off a withdrawal slip on a cheque/save account of a young QB of recent celebrity for the NFL Stillers, who he’d read a lot about in local sports pages and increasingly strongly identified with, both of them being black and unique to the context (Black NFL qubes were extremely rare then: he was the FIRST ever to start in an NFL game.).

      Problem was the teller wasn’t buying it. This frustrated the client, who then gave into improv, theatrically placing one hand in a pants pocket and saying something like, What if I have a gun? Which he did not, but his act was compelling enough to inspire the teller to press the alarm, startling client so badly he just stood there awaiting the cops.

      The first defect in his plan was that he’d attempted withdrawal from the account of one “Terry Paxton Bradshaw”,  client having apparently got himself confused in the blanket local press coverage of the latter’s Stiller starting QB contest with “Joseph Wiley Gilliam, Jr.” (to whom client bore a notable physical resemblance, including in the face).

      It being Legal Assistance and me being so fresh, I had very little time with client and didn’t listen nearly so closely as the story deserved and experience would have cautioned. I led him with all due haste to plead out immediately to a reduced charge of fraud, to avoid the relative world of nasty hell associated with a guilty finding on robbery with threatened weapon violence, and being a first offender, it wasn’t hard to convince the judge to order a sentencing background report.

      But it took the system weeks – might have been months – to get to that report, and by the time it was complete, client now suffered from the delusion that he was actually and indeed “Terry Paxton Bradshaw, first ever black to start an NFL game” (not a lot of newspapers or TVs in the mental wing of the local lock-up – nor much a wing, for that matter: this was 1974-5).

      So then I panicked, set aside all other work for several days and noted up ALL the shit on withdrawing a guilty plea, including getting another idealistic young idiot attorney to agree to argue me as incompetent, based in part – and, on reflection, compellingly so – on my own draft affidavit attesting to my self-assessment as Out of My own League.

      I was talked out of all that by an incredibly generous understanding bank robbery specialist with DoJ who, AOT, pointed out that, if my application ‘succeeded’ – which it stood a good chance of doing – I’d likely also succeed in getting the client locked up in a federal pen for the criminally insane for years if not ever, and to add a cherry to that, find myself not only spending many quality months before a bar licensing inquiry, but have that affidavit – if sworn – follow me around to the end of time like a yapping dog at my heels.

      (She’s also who inspired me to apply to work for the feds: even gave me a recommendation praising my “idealism” and especially “the high quality of [my] legal draftsmanship”.)

      • bmaz says:

        Yeah saw Mr. Hat’s story. It is a good one. One of my very first trials ever was seconding on an armed robbery trial. I will never, ever, forget the feeling of standing and receiving 18 or 19 guilty counts. There should have been a mercy rule after maybe four or five. Just brutal.

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