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Manafort Pleads Guilty, Agrees to Cooperate With Mueller

Bloomberg logo Bloomberg 9/14/2018 David Voreacos, Andrew Harris and Daniel Flatley
Paul Manafort: Court Hearing For Paul Manafort And Rick Gates Following Indictment © Bloomberg Court Hearing For Paul Manafort And Rick Gates Following Indictment

(Bloomberg) -- Special Counsel Robert Mueller’s team scored a significant victory as President Donald Trump’s former campaign chairman pleaded guilty to conspiring against the U.S. and agreed to cooperate in the investigation into Russian interference in the 2016 election.

The former campaign aide, Paul Manafort, admitted Friday to a decade of crimes related to his work as a consultant for pro-Russia politicians in Ukraine. While none of the charges relates to his work for the president, he was Trump’s campaign chairman for several months, and his links to Russian and Ukrainian oligarchs have been a focus of Mueller’s prosecutors. Manafort joins several other Trump aides who have pleaded guilty and are helping Mueller, including Trump’s former national security adviser, Michael Flynn, and Manafort’s former right-hand man, Rick Gates.

Manafort, 69, sat stoically with his head bowed in federal court in Washington as U.S. prosecutor Andrew Weissmann spent 33 minutes detailing two conspiracy charges. Manafort said he laundered more than $30 million, cheated the U.S. of $15 million in taxes and failed to tell U.S. authorities about a secret lobbying campaign on behalf of Ukraine that reached into the Oval Office. Manafort also admitted trying to tamper with witnesses, joining with a longtime associate who prosecutors said has ties to Russian intelligence.

“I plead guilty,” Manafort told U.S. District Judge Amy Berman Jackson. Manafort, who’s been in custody since June 15, mouthed a kiss to his wife, Kathleen, in the gallery as U.S. marshals led him into the courtroom.

Manafort agreed to brief prosecutors, produce documents and testify if asked. After Jackson asked if Manafort understood that he must cooperate “fully and truthfully,” Manafort replied: “I do.”

Last month, Manafort was convicted in a Virginia federal court of tax and bank fraud.

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Manafort will forfeit several New York properties, including a Trump Tower apartment and a sprawling estate in Bridgehampton, New York, along with other assets that fed a lavish lifestyle filled with custom suits and luxury cars. He gave up his right to appeal his conviction on eight counts last month in Virginia. In turn, prosecutors will drop 10 counts that led jurors to deadlock and the judge to declare a mistrial.

In return, he’ll avoid at least hundreds of thousands of dollars in legal bills and the prospect of additional charges, while potentially living as a free man in just a few years. Manafort won’t be sentenced until after his cooperation is complete, and only then will prosecutors dismiss the remaining charges against him in Virginia.

Read More: Manafort Plea Delivers Another Embarrassment for Law Firm Skadden

“Tough day for Mr. Manafort,” his lawyer, Kevin Downing, said outside the courthouse. “He’s accepted responsibility, and he wanted to make sure that his family was able to remain safe and live a good life. This is for conduct that dates back many years and everybody should remember that.”

Prosecutors will ask Manafort about his months running Trump’s campaign. In June 2016, he attended the meeting at Trump Tower in which Kremlin-backed attendees promised to offer damaging information about Trump’s 2016 opponent, Hillary Clinton. Trump’s eldest son, Donald Jr., and his son-in-law, Jared Kushner, also attended the meeting.

Mueller agreed to give the judge a status report on Manafort’s cooperation by Nov. 16. Congressional elections will take place on Nov. 6.

‘Totally Unrelated’

The White House, which has repeatedly played down Manafort’s role on the campaign, distanced Trump from his former aide. “This had absolutely nothing to do with the president or his victorious 2016 presidential campaign. It is totally unrelated,” said Sarah Sanders, the White House press secretary.

The president had previously praised Manafort for not cooperating in the face of financial and legal pressures. After Manafort’s conviction in August, Trump tweeted that he felt “very badly” for him and applauded his steadfastness.

Trump tweeted that Manafort had resisted “tremendous pressure,” and unlike the president’s former personal attorney, Michael Cohen, he “refused to ‘break’ -- make up stories in order to get a ‘deal.’” Cohen, Trump’s former fixer and lawyer, admitted financial crimes and is helping federal prosecutors in New York in a separate investigation.

Manafort’s decision to flip came just days before jury selection was set to begin in Washington. He faces as long as a decade in prison after the Virginia jury verdict, and an additional 10 years on the two conspiracy counts he admitted on Friday. If Mueller is satisfied with Manafort’s cooperation, he can recommend leniency to both judges.

Daughter’s Home

Among the properties Manafort will forfeit are a brownstone in Brooklyn, a condominium in New York’s Soho neighborhood and a house in Arlington, Virginia, where his daughter has lived, according to a court filing. He will also surrender a life insurance policy and bank accounts.

The court filing lays out much of the same evidence that led to his conviction in Alexandria, including how he earned millions of dollars as a consultant to former President Viktor Yanukovych of Ukraine and his pro-Russia Party of Regions and was paid by wealthy Ukrainian businessmen through Cyprus accounts. Prosecutors said he used that untaxed income to support a lavish lifestyle.

As part of his plea, Manafort admitted that he conspired against the U.S. by plotting to launder money, committing tax fraud, failing to file foreign bank account reports, violating the Foreign Agents Registration Act and lying to the Justice Department. He admitted that he conspired to obstruct justice by tampering with witnesses.

Weissmann spent most of his time describing Manafort’s secret $11 million lobbying campaign. That effort, involving prominent lobbying, public relations, and law firms, would have been the primary emphasis of Manafort’s trial in Washington.

“Manafort viewed secrecy for himself and for the action of his lobbyists as integral to the effectiveness of the lobbying offensive he orchestrated for Ukraine,” according to a 24-page statement of the offenses filed in court.

Lobbying Firms

The campaign was designed to improve the image of Yanukovych and his Party of Regions in Europe and the U.S. He hired lobbying firms like the Podesta Group and Mercury Public Affairs LLC to help him, along with several European former elected officials.

Manafort organized the European politicians, known as the Hapsburg Group, to lobby U.S. senators in a campaign to defeat a resolution that criticized Yanukovych’s treatment of former Prime Minister Yulia Tymoshenko, who was convicted and imprisoned. Manafort never told the senators that the lobbyists or Hapsburg Group members were paid by Ukraine.

He admitted that he concocted a political dirty trick that involved a “senior cabinet official” who had been a prominent critic of Yanukovych’s treatment of his rival. Manafort said the official was anti-Semitic, and he enlisted a “senior Israeli government official” to help spread the story. He also worked to plant the account in the U.S. media.

“I have someone pushing it on the NY Post,” Manafort wrote. “Bada bing bada boom.”

Manafort also wanted the Obama administration to understand that “the Jewish community will take this out on Obama on Election Day if he does nothing,” he said.

Obama Meeting

In May 2013, one Hapsburg Group member met with President Barack Obama and Vice President Joe Biden in the Oval Office. They also met with senior U.S. officials in the executive and legislative branches, according to the filing.

One of the potential witnesses against Manafort was Sam Patten, who pleaded guilty on Aug. 31 to failing to register as a Ukrainian agent. He also helped a pro-Russian Ukrainian oligarch gain access to Trump’s inauguration.

In a frenzy of pretrial maneuvering, Manafort’s legal team had repeatedly challenged Mueller’s authority to investigate business activities related to Ukraine before Manafort joined the Trump campaign. Prosecutors said they had to examine whether Russia-backed politicians and oligarchs served as a back channel to members of the Trump campaign.

MORE:

Why Talk of Pardons Is Intensifying in Washington: QuickTakeManafort Ally to Cooperate With U.S. After Guilty PleaManafort Faces 10 Years in Federal Prison, Legal Experts SayPaul Manafort Convicted of Bank Fraud in Victory for Mueller

To contact the reporters on this story: David Voreacos in Washington at dvoreacos@bloomberg.net;Andrew Harris in Washington at aharris16@bloomberg.net;Daniel Flatley in Washington at dflatley1@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, David S. Joachim, Joe Schneider

©2018 Bloomberg L.P.

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