The US president’s former election campaign manager is in court in Virginia, charged with money-laundering. His ties to Russian oligarchs may prove revelatory, says Elizabeth Drew
AS the first criminal trial of a major figure in US president, Donald Trump’s 2016 election campaign began in Virginia last week, observers have wondered to what extent not only Paul Manafort, but also Trump himself is in the dock.
Manafort has been charged with tax fraud, money-laundering, and making false statements to investigators. Having earned many millions of dollars working for dictators and thugs around the world, including Ferdinand Marcos, in the Philippines, and Jonas Savimbi, in Angola, in recent decades he made much of his fortune working for Russian oligarchs and the Russian-backed former president of Ukraine, Viktor Yanukovych.
After Manafort and his minions helped Yanukovych defeat former prime minister Yuliya Tymoshenko in the 2010 presidential election, Yanukovych had her imprisoned on trumped-up charges, with help from a legal brief prepared — at Manafort’s bidding — by the prominent American law firm, Skadden Arps. The case was handled by one of the firm’s partners, Gregory B. Craig, who briefly served as former US president Barack Obama’s White House counsel. US special counsel, Robert Mueller, has referred Craig’s role to the US attorney for the southern district of New York for further investigation. Yanukovych was overthrown by a popular revolt in 2014 and fled to Russia.
The prosecutors on Mueller’s team in the Virginia case opened the trial with a description of Manafort’s extravagant tastes, including a custom-made, $15,000 ostrich-skin jacket (think leather that has caught the measles). He also paid $20,000 for a python jacket, but the ostrich jacket, with white-satin lining, caught the public’s imagination.
Manafort also maintained several expensive homes: in northern Virginia, Brooklyn, the Hamptons, Palm Beach Gardens, and Trump Tower. While the judge would not allow photos of all this magnificence to be shown in the court-room, the point about Manafort’s greed and ostentatiousness was made.
But the prosecutors’ real goal was to show that Manafort paid for these goods — nearly $1m in suits from the world’s most expensive tailors, high-priced antique rugs, lamps, and electronic equipment — by wire transfers from offshore bank accounts, such as one in Cyprus. At least one supplier said that Manafort was their only customer who operated that way.
Manafort’s attorneys, who appeared to have the weaker hand, tried to blame the suspicious transactions on his longtime deputy, Rick Gates, who, after being indicted, chose to co-operate with Mueller. But this defence — the adult equivalent of “the dog ate my homework” — quickly fell apart. Manafort’s former bookkeeper testified that he had been personally involved in these transactions, and an accountant testified that Manafort himself had altered his tax returns, hid income as loans (saving $500,000 one year), and failed to inform his accountants about his offshore accounts. Gates is to testify this week.
When Manafort went to work on Trump’s campaign in late March 2016, all appeared normal. He had worked for previous mainstream Republican candidates, such as Robert Dole, Gerald Ford, and Ronald Reagan; more important, he appeared to be the only traditional Republican operative willing to work for the candidate. He was also a former business partner of Republican operative, Roger Stone, who remained close to Trump. (Mueller’s spotlight is now moving toward Stone.) But the Trump campaign vetted its new chairman less diligently than most people do when hiring a house cleaner. Manafort offered to work for Trump for free — he eagerly sought the job — but it turns out that he was broke at the time.
There could be only one explanation: The Trump connection might turn out to be highly lucrative. Not only might Manafort attract future clients, but he could also help himself with his former wealthy Russian backers — most of them closely connected with the Kremlin — through the campaign itself.
When he took up the job, Manafort was indebted to Russian oligarch Oleg Deripaska (an aluminium tycoon close to Russian president Vladimir Putin) to the tune of $19m. Deripaska, who is subject to US sanctions, had previously maintained a $10m annual contract with Manafort.
Like other Russian oligarchs, Deripaska is not known to deal gently with people who displease him. After he took the job, Manafort emailed a Ukraine-based employee: “How do we use [this] to get whole?” Manafort also offered to brief Deripaska about what was going on in the Trump campaign.
Manafort’s role was to help Trump sew up the nomination and run the Republican Party convention, at which Trump’s victory would become official. One matter under investigation is the Trump campaign’s role in ensuring that the Republican platform contained no provisions backing arms supplies for Ukraine — which mainstream Republicans supported, but Russia, of course, opposed.
Manafort was forced out of the Trump campaign in August 2016. By this point, his relationship with Trump had unravelled (as most of Trump’s non-family relationships eventually do), the polls were moving against Trump amid internal chaos, and press reports pointed to off-the-books payments to him by pro-Russian Ukrainians.
While Manafort’s trial — the first of two he faces — does not directly involve Trump (at least not so far), it is believed to be one of the things agitating Trump, who has seemed even more unhinged than usual lately.
It has compounded Trump’s sense that Mueller is closing in on him. A report by Mueller on Trump’s attempts to obstruct the investigation is expected soon — timed to fall well ahead of the US midterm elections in November. (Mueller wants to avoid any perception of political meddling, like that created by former FBI director James Comey, who is widely seen as having hurt Hillary Clinton’s presidential campaign in 2016.) Under normal circumstances, an American politician would be in trouble for having employed a figure as compromised as Manafort. The ongoing Trump-Russia scandal ranks among the country’s most famous — including the Teapot Dome affair of the 1920s, the collapse of the energy giant, Enron, in the early 2000s, and Bernie Madoff’s Wall Street Ponzi scheme — and it is all the more menacing for involving a hostile power.
The current circumstances are anything but normal. So far, Trump is talking as if he had barely met Manafort. But as Manafort’s trial unfolds, Trump will almost certainly have to change his story.
Elizabeth Drew is a contributing editor to The New Republic and the author, most recently, of Washington Journal: Reporting Watergate and Richard Nixon’s Downfall. Project-syndicate.org