Manafort may be guilty of more than financial crimes against Ukraine
The indictments of U.S. political consultants Paul Manafort and Rick Gates reveal a $75 million binge on luxury lifestyles, allegedly stolen from Ukrainian taxpayers by the pair's bosses: President Viktor Yanukovych and the now-defunct Party of Regions.
“Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work,” reads the indictment, which charges the longtime advisers of Ukraine’s Party of Regions with money laundering, tax fraud and failing to register as foreign agents.
Oddly enough, Manafort and Gates still face no criminal charges in Ukraine.
Manafort’s name appears in text messages hacked from his daughter’s phone in connection with the murder of more than 100 protestors during the 2014 EuroMaidan Revolution that drove Yanukovych
out of power on Feb. 22, 2014.
“You know he has killed people in Ukraine? Knowingly,” wrote his daughter Andrea in a hacked text.
Ukrainian prosecutors say they are interested in questioning Manafort in two investigations, one related to embezzlement in the Justice Ministry that implicates ex-Justice Minister Oleksandr Lavrynovych. Manafort comes up as a potential recipient of $12.7 million of the $2 billion in allegedly illegal payments made by Yanukovych's party in the "Black Ledger." But his name has not come up in connection with the investigation of the murders of 100 EuroMaidan Revolution demonstrators.
The lavish lifestyles of Manafort and Gates — who are presumed innocent and who deny the charges — leap out from the U.S. indictment: $6.4 million on homes, $900,000 for antique rugs, $840,000 on men’s clothing and almost $200,000 on four Range Rovers.
Manafort's wealth contrasts with the finances of the voters he convinced to elect Yanukovych in 2010. In Ukraine, the average wageremains $300 a month and retirees live on $100 a month. Manafort now faces up to 80 years in prison, if convicted.
The indictments were brought by the team of U. S. Special Counsel Robert Mueller, who is investigating possible collusion between the 2016 presidential election campaign team of U. S. President Donald J. Trump and the Russian government. Manafort served as campaign manager for five months.
Trump campaign foreign policy adviser George Papadopoulos pleaded guilty to lying to FBI agents about his ties to Russian officials. The plea revealed that the Trump campaign knew the Russians possessed hacked emails from the Hillary Clinton campaign.
Anders Aslund, an economist and a senior fellow at the Atlantic Council, is disappointed that the Manafort indictment isn’t more detailed, however.
“I’m surprised that the U.S. hadn’t found out about this until now,” Aslund told the Kyiv Post. “But the indictment is only about economic crimes. There’s nothing about the harmful activities he did while in Ukraine.”
Even Manafort’s children were alarmed at his activities in Ukraine, according to phone texts hacked from Manafort’s daughter’s iPhone in late February and released on the dark web.
“His work and payment in Ukraine is legally questionable,” Manafort’s daughter Andrea wrote in one of the 300,000 texts leaked.
Trump "has now hired one of the world’s greatest manipulators,” she wrote in another text, while calling her father “abusive” and without a “moral or legal compass” in others.
Kevin Downing, Manafort’s attorney, maintained his client’s innocence in a statement, calling the money laundering allegations “ridiculous” and saying that his work for the Party of Regions “was seeking to further democracy and to help the Ukrainians come closer to the United States and to the" European Union.
Manafort and Gates are under house arrest in the U.S., awaiting trial. Manafort, who has applied for 10 passports in the last 10 years, has pleaded not guilty, along with Gates.
Accounts differ on the amount of power that Manafort wielded over Yanukovych.
The 67-year old political consultant entered Ukrainian politics in 2005 through a contract with System Capital Management, the firm belonging to billionaire oligarch Rinat Akhmetov, who backed Yanukovych. SCM spokesman Evgeny Buzikin said that Manafort “helped create the group’s corporate communications strategy.”
In 2007, at the Davos Economic Forum in Switzerland, Akhmetov called Manafort was not just a consultant, but his “great friend.”
One former top U.S. diplomat, who requested anonymity due to a lack of authorization to speak publicly, said that “Yanukovych got some advice from Manafort on his areas of expertise, which was not domestic Ukrainian politics. It was how to talk to and how to be heard by Western audiences and Western governments.”
Others contended that Manafort had more influence. Aslund argued that Manafort was “completely in charge of Yanukovych,” controlling key policy decisions like “advising Yanukovych to speak Ukrainian for the 2010 campaign.”
But the former U.S. diplomat said that while “people at senior levels in the Party of Regions listened to him on certain issues,” he was but one adviser in a team that included Ukrainians and Russians.
“He’s clearly good at what he does,” the ex-diplomat added. “He was clearly a smart man with a range of questionable clients.”
The texts reveal one exchange which suggests Manafort may have played a key role in the 2014 EuroMaidan Revolution by convincing Yanukovych to order police to massacre 100 demonstrators days before Yanukovych fled to Russia.
“Do you know whose strategy that was to cause that?” Manafort’s daughter Andrea wrote to her sister, Jessica, in March 2015.
She continued: “To send those people out and get them slaughtered, as a tactic to outrage the world and get focus on Ukraine.”
“Don’t fool yourself,” she wrote. “The money we have is blood money.”
The indictment alleges that Manafort and Gates failed to register as foreign agents, in part because they were operating on behalf of a Brusselsbased nongovernmental organization called the European Center for a Modern Ukraine.
Calling the center “a mouthpiece for Yanukovych and the Party of Regions,” prosecutors allege that Manafort and Gates had an “informal agreement” with the center to lobby on the Ukrainian government’s behalf.
Federal prosecutors allege that Manafort and Gates worked as agents of the Ukrainian government through the center but failed to register in the U.S. as such, a violation of the Foreign Agents Registration Act. The pair hired two D.C. lobbying firms — Mercury and the Podesta Group — to work on their behalf and allegedly under their supervision.
The center doesn't seem to have registered on the E.U.’s Transparency Register, which would deprive it of access to top EU officials, said Albi Alla, an attorney at Alber & Geiger in Brussels.
The center’s founder, former Ukrainian Foreign Minister Leonid Kozhara, declined to comment, but told 112 TV channel on Nov. 1 that the center was created “to tell the truth about Ukraine in the European Parliament and other E.U. institutions. And the center was quite successful."
One of the center’s apparent functions was to pay U.S. journalists and bloggers for favorable coverage.
A 2013 Buzzfeed investigation revealed that the center paid U.S. bloggers at the U.S. far-right website Breitbart News Network, among other outlets, for positive coverage of the ruling Party of Regions during the 2012 parliamentary elections.
Libertarian activist George Scoville allegedly oversaw the cash transfer and invited bloggers to a conference with former Central Election Chief Mikhail Okhendovskyy, who was later found to have received from the Party of Regions on the "Black Ledger."
Scoville did not reply to requests for comment. Breitbart editor Steve Bannon replaced Manafort as manager and chief strategist of the Trump campaign in August 2016.
The indictment tells a story in which
Manafort used the center to hire two U.S. lobbying firms to work on behalf of the Ukrainian government.
Some of that work caused a scandal in 2012, when U.S. law firm Skadden, Arps, Meagher, & Flom LLP sent a team of four lawyers to Kyiv to write a report on whether the Yanukovych government’s prosecution of political opponent Yulia Tymoshenko met European standards.
Skadden attorneys Gregory Craig and Cliff Sloan did not reply to emailed requests for comment for this story. Both attorneys held high level positions in the Obama Administration — Craig as the administration’s first White House counsel, and Sloan as the State Department’s envoy on closing Guantanamo.
The Skadden report led to a probe in Ukraine of former Justice Minister Oleksandr Lavrynovych on suspicion of embezzling Hr 8.5 million ($1.06 million at the 2012 exchange rate) to pay the firm.
Serhiy Vlasenko, Tymoshenko’s attorney, told the Kyiv Post in August 2016 that the first thing he told the Skadden team was that there was a “corrupt element in your work here.”
“They said, ‘we did everything legally, because their official honorarium was worth Hr 95,000. ($11,875 at the 2012 exchange rate),” Vlasenko said.
But the indictment alleges that the report was worth far more.
“Manafort and Gates used one of their offshore accounts to funnel $4 million to pay secretly for the report,” prosecutors allege.
Skadden returned $567,000 to the Ukrainian government in June, saying that the money was kept for “future work” that was never done.
The $75 million that Manafort and Gates allegedly got from the Party of Regions for their work afforded Manafort a lavish lifestyle in the U.S.
Manafort’s daughter's texts reveal that financial transactions detailed in the indictment are intertwined with some of the former campaign manager’s personal issues.
Arguments over a potential divorce led Manafort’s daughter to write that “he has too many skeletons, he can’t have a public divorce,” while calling his “work and payment” for the Party of Regions “legally questionable” in a subsequent text.
“I hope dad never gets paid,” she wrote in another text, referring to late payments from the deposed Yanukovych administration.
The indictment alleges that from 2008 to 2014 Manafort wired a total of $12 million to buy personal items without paying taxes on the income.
While still working with the Party of Regions in 2012, Manafort bought property worth $6.4 million.
One condominium at 377 Union Street in New York appears in the indictment as a money laundering concern. The property was first owned by Manafort and his son-inlaw, Jeffrey Yohai.
The hacked texts reveal panic within the Manafort family about financial dealings surrounding the property, as well as another in Lower Manhattan.
In one text, Manafort’s daughter writes of Yohai that it was “Disgusting that he is trying to leverage a property that’s not his.”
“Dad and Jeff are business partners,” she added. “There’s no sneaking $1 million past the other one.”
An attorney for Yohai did not reply to a request for comment.
Paul Manafort, ex- campaign manager for U.S. President Donald J. Trump and ex-adviser to Ukraine's Party of Regions under ex-President Viktor Yanukovych, leaves a Washington, D.C. federal courthouse on Oct. 30. Manafort is accused of multimillion-dollar money laundering and tax evasion. For a decade in Ukraine, he helped legitimize Yanukovych to Westerners. Yanukovych fled power during the EuroMaidan Revolution in 2014. (AFP)