MANAFORT ‘TURNED TO FRAUD’ AS LUXURY LIFESTYLE FELL APART
Former campaign chair for Trump goes from fancy jackets to renting his condo on Airbnb
Aday after describing in detail how millions of dollars in payments from Ukrainian oligarchs enabled Paul Manafort to live in luxury through 2014, federal prosecutors late last week outlined how his financial fortunes reversed so sharply in subsequent years that he made his Manhattan condominium available on Airbnb.
Witnesses for the prosecution in the fast-moving tax and fraud trial, which got underway on Tuesday, said Mr Manafort, a former campaign chairman for President Donald Trump, went from snapping up lizard- and ostrich-skin jackets worth at least US$15,000 (500,000 baht) to skipping payments on more than $1.1 million in bills. His solution, they said, was to seek bank loans based on financial statements that falsely showed his debt-ridden political consultancy firm was awash in cash.
The testimony fleshed out how Mr Manafort’s finances were altered by the loss of his main client, Viktor Yanukovych, the leader of Ukraine. Mr Yanukovych was ousted from power in 2014 after a popular uprising and fled to Russia. Mr Manafort, a veteran Republican operative and lobbyist, advised Mr Yanukovych for a decade, earning tens of millions of dollars in fees.
By 2016, when he re-entered US politics by joining Mr Trump’s campaign, his financial troubles had grown acute. During several hours of questioning, Heather Washkuhn, a bookkeeper who handled the bills for Mr Manafort’s company, Davis Manafort Partners International, said that it fell so deeply into the red that one insurance company was poised to suspend the firm’s medical coverage by early 2016.
“Please advise when funds will be transferred,” she wrote in an email that April to Mr Manafort, one of a series of increasingly urgent messages she sent asking how she was to pay his mounting debts. In dry but compelling testimony, she compared several financial statements that prosecutors say Mr Manafort used to persuade banks to mortgage some of his real estate with her own firm’s records that showed that his company was losing as much as $76,000 a month in late 2015.
Some statements that Mr Manafort submitted in hopes of obtaining real estate loans that would enable him to dig out of debt were littered with errors — evidence, prosecutors argued, of clumsy forgeries. One financial statement, which purported to have been prepared by Washkuhn’s firm, misspelled the name of the month as “Septembe” and the word “review” as “revmw.”
More important, Ms Washkuhn said, the documents that were presented to bank officials on Mr Manafort’s behalf falsely showed his company was thriving. One inflated the company’s income by about $4 million, claiming that at the end of 2015 it had nearly $4.5 million in cash, when her books showed a balance of only $400,000.
The trial is the first stemming from charges brought by the special counsel, Robert Mueller. While the charges against Mr Manafort do not touch on Mr Mueller’s main mission of uncovering Russia’s attempts to influence the 2016 presidential election, the testimony on Thursday about his financial troubles raised questions about Mr Manafort’s motivation in joining the Trump campaign in an unpaid role.
He was hired in March 2016 to manage delegates to the coming Republican convention and was quickly promoted to campaign manager. In mid-August 2016, he was forced out amid revelations about his work in Ukraine. But his right-hand man, Rick Gates, stayed on with Mr Trump as deputy campaign chairman through the election.
In July 2016, just before Mr Trump clinched the Republican nomination, Mr Manafort offered campaign briefings to Oleg Deripaska, a Russian oligarch close to President Vladimir Putin of Russia. Mr Deripaska was engaged in a business dispute with Mr Manafort, and documents filed in the case by Mr Mueller’s team show that Mr Deripaska had lent Mr Manafort $10 million.
Mr Manafort’s friends have said the overture was no more than a courtesy and was never accepted.
Kevin Downing, lawyer for Mr Manafort, 69, tried to suggest Mr Manafort took a back seat to Mr Gates when it came to both his business and personal finances.
Mr Gates worked for nearly a decade as Mr Manafort’s deputy, a job that paid him about $240,000 a year. The case continues.