On Mon., Oct. 30, 2017 the United States Department of Justice indicted Paul Manafort Jr., the former presidential campaign chairman for Donald Trump, and his business partner, Richard Gates III, on 12 counts, including money laundering and conspiracy against the U.S. Despite being the first indictment under special counsel Robert Mueller, the charges do not directly relate to Russian meddling in the 2016 presidential election. Mueller’s investigation is meant to examine Russian meddling and any possible collusion between the Trump campaign and Russia. In the larger scheme of the investigation, the indictment is likely to have little to no effect other than possibly pressuring Manafort into becoming a witness for Mueller. The indictment centers on charges relating to Manafort and Gates’s lobbying for a pro-Russian government in Ukraine.
The charges filed against Manfort and Gates are conspiracy against the U.S.; conspiracy to launder money; failure to file reports of foreign bank and financial accounts for calendar years 2011-2014 for Manafort and 2011-2013 for Gates; unregistered agent of a foreign principal; false and misleading Foreign Agents Registration Act (FARA) statements; and false statements.
Manafort and Gates were political activists and lobbyists. The indictment states they “acted as unregistered agents of the Government of Ukraine, the Party of Regions (a Ukrainian political party whose leader Victor Yanukovych was President from 2010 to 2014), Yanukovych, and the Opposition Bloc (a successor to the Party of Regions that formed in 2014 when Yanukovych fled to Russia)” from about 2006 to 2014.
To hide the many millions of dollars generated through this work, Gates and Manafort laundered money through several offshore shell companies. They used this money to fund their lavish lifestyles and avoided paying taxes on this additional income. Manafort bought several multi-million dollar properties and Gates funded interior decorating, his child’s tuition and his mortgage. In all, over $75 million went through the offshore accounts. Manafort laundered $18 million, and Gates transferred more than $3 million from offshore accounts to other accounts he controlled.
Manafort and Gates hired two lobbying companies, Company A and Company B, to lobby on behalf of the Ukraine in the U.S. When asked about their potential relationships in Ukraine in late 2016 and early 2017, Manafort and Gates released false and misleading statements about the lobbying companies and their aims in an attempt to “distance themselves and the Government of Ukraine, Yanukovych, and the Party of Regions from the Centre, Company A, and Company B.”
Manafort, Gates and one of Manafort’s companies, the Davis Manafort Companies International, LLC, allowed for false letters to be submitted to the Department of Justice. The misleading letters were a further attempt to distance Companies A and B from Manfort and Gates.
Manafort and Gates surrendered to the Federal Bureau of Investigation and pleaded not guilty to the charges. The charges carry potential for up to 20 years in prison. However, it is suspected that, in the case of conviction, Mueller will attempt to pressure Manafort into providing information regarding the investigation into Russia in exchange for leniency.
Manafort’s lawyer, Kevin Dowering, called the charges in the indictment “ridiculous” and proceeded to point out the rarity of prosecutors filing charges for disregarding foreign lobbying laws. He also highlighted the fact that the lobbying the charges are related to ended in 2014, two years before Manafort began working on the Trump campaign.
