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Manafort’s capitulation leaves a wide-open field for Mueller’s team

Paul Manafort surrendered in his long battle with the special counsel’s office yesterday, pleading guilty in a Washington, D.C., courtroom to two counts of “conspiracy against the United States,” admitting his culpability to charges on which a jury in Virginia had not been able to reach a verdict, forfeiting tens of millions of dollars in real estate and other assets, and, crucially, agreeing to cooperate with prosecutors. The collapse of Manafort’s defensive line appears to leave exposed flanks in elite lobbying circles, in the boardrooms of Manafort’s lenders, at one of the world’s largest law firms, and, perhaps most importantly, at the White House.

Since his Virginia home was searched in July 2017, Manafort had put up the most determined resistance of any publicly identified subject of special counsel Robert Mueller’s investigation. Manafort did not bend when the FBI searched his home; when he was indicted for the first time last October (on charges of money laundering and secret lobbying on behalf of Ukraine); when he was indicted for the second time this February (on charges of tax fraud, bank fraud and concealing foreign bank accounts); when his business partner and co-defendant, Richard Gates, pleaded guilty and agreed to testify against him; when he was indicted a third time this June (on charges of conspiring with a foreign associate to tamper with witnesses), or when he was tried and convicted this summer on eight of 18 charges in federal court in Virginia. A looming second trial in Washington, D.C., and the expense of putting on a defense seem to have prompted Manafort’s capitulation on Friday, which sent shock waves through the administration and the nation’s political elite.

Manafort’s guilty plea ended the prospect of the second trial and a potential retrial on the remaining counts in Virginia, on which the jury deadlocked 11-1 for conviction, and to which Manafort has now admitted his guilt. By pleading guilty, Manafort avoided the ordeal of additional trials, obtained a commitment that the rest of the charges against him would be dismissed after he completes his “successful cooperation,” and an agreement not to prosecute him for any other criminal activity he might have disclosed up until now. In return for those benefits, Manafort has agreed to pay a heavy price.

The charges Manafort admitted to in Friday’s plea agreement may send him to prison for ten years (or more, when he is sentenced for his conviction in Virginia). If Manafort’s cooperation is deemed successful, however, prosecutors may formally recommend a reduced sentence. Manafort agreed to forfeit assets estimated to be worth almost $50 million, including his residences in Manhattan (one of them in Trump Tower), Brooklyn, the Hamptons and Virginia, and he has promised to cooperate with prosecutors “in any and all matters as to which the Government deems the cooperation relevant.” Manafort also agreed not to accept compensation for telling his story about the crimes he has admitted or his knowledge of the Mueller investigation. Friday’s plea deal is almost certainly much more punitive than the deal Manafort could have obtained had he agreed to cooperate earlier in the process.

Former Trump campaign manager Paul Manafort arrives at the Albert V. Bryan U.S. Courthouse for an arraignment hearing in  March 2018 in Alexandria, Va. (Photo: Alex Wong/Getty Images)

For Manafort and his family, the lengthy prison sentence and asset forfeitures will impose the most severe consequences. But for Manafort’s professional associates — including President Trump and his administration, and other Washington figures Manafort dealt with during his years as a lobbyist and fixer for shady foreign governments, including Ukraine’s deposed pro-Russian president — the cooperation he has agreed to provide to Mueller’s team and other prosecutors looms the largest.

The deal immediately led to speculation that Trump might pardon Manafort, who he praised just last month for his toughness in refusing “to make up stories in order to get a ‘deal.’” A pardon would wipe out the incentive for Manafort to continue his cooperation, but much of the substantive cooperation that Mueller’s investigators were seeking from Manafort may already have been obtained just in the last week. The plea agreement discloses that Manafort began talking to investigators on Sept. 10, 2018, and signed a proffer agreement the following day. (A proffer agreement is a formal agreement that facilitates prosecutors and a defendant discussing the substance of a guilty plea.) In other words, the plea agreement strongly implies that Manafort sat down with FBI agents and prosecutors for several “proffer sessions” over the four days that preceded his appearance in court on Friday. A defendant has no incentive to hide the truth in proffer sessions because prosecutors cannot use truthful statements during the sessions to bring new charges, while — as Manafort’s erstwhile partner Gates experienced firsthand — lying to prosecutors in a proffer session may lead to new felony charges. While much more testimony and interrogation lie ahead for Manafort, both to the special counsel and other U.S. attorney offices, there is a good chance that Mueller’s investigators have already learned much of what they needed from him.

On several occasions since Manafort was first indicted, Trump and members of his legal team have offered heavy hints that Manafort might be in line to receive a presidential pardon. Trump contrasted Manafort favorably with other targets of the prosecutors, such as Michael Cohen and Gates, who “flipped” and provided information to investigators. Trump and his lawyers have been heavily criticized for these statements by some observers, who noted that these comments at least skirted the line of obstruction of justice, and Senate Republicans have warned that a move by Trump to pardon a potential witness against him could lead to a showdown on Capitol Hill. But the revelation that Manafort has been talking to investigators for days would make a politically explosive pardon less attractive to the White House.

Some of the fruits of Manafort’s cooperation are apparent in the statement of the offense he signed, which provides prosecutors with new ammunition to pursue several related cases.

Manafort admitted he knew that the law firm Skadden, Arps, Slate, Meagher & Flom had concealed material facts about a report it prepared for public consumption in the West on Ukraine’s 2012 trial of its former prime minister Yulia Tymoshenko. The report was widely regarded as an attempt to whitewash the prosecution by then President Viktor Yanukovych’s government of a political figure viewed as hostile to Russia. Then Skadden partner Greg Craig, a former senior official in the Obama administration, led that effort. Skadden and Craig are not named in the plea documents, but their involvement with the report is widely known. In the statement of the offense, Manafort admitted he knew that the law firm had failed to disclose that it represented Ukraine on matters directly material to the impartiality of the report, including providing “training to the trial team prosecuting Tymoshenko,” and had allowed the Ukrainian government to vastly understate the amount Skadden had been paid for the report. The government of Ukraine “falsely claimed” that the cost of the report was only $12,000, but Skadden was actually paid $4.6 million, including $4 million funneled through Manafort’s offshore accounts, per the statement of the offense. According to a CNN report, prosecutors in New York are weighing criminal charges against Craig and Skadden in connection with the work on the report and related lobbying.

Manafort also admitted to conspiring with his long-time associate Konstantin Kilimnik to tamper with witnesses against him in the Washington, D.C., case. Kilimnik is under indictment for the alleged witness tampering, but has not come to the U.S. to face charges. Manafort’s admissions also provide evidence against the lobbyists and politicians he hired to work secretly on Ukraine’s behalf and the bankers who assisted him in fraudulently obtaining loans.

Then-Trump campaign manager Paul Manafort, right, then-Republican presidential candidate Donald Trump and Manafort’s chief deputy, Rick Gates, center, with Ivanka Trump as she rehearses for the Republican National Convention in Cleveland on July 21, 2016. (Photo: Evan Vucci/AP)

However, for all the investigative avenues that the statement of the offense illuminates, it does not shed any light on any cooperation that Manafort may provide in connection with Mueller’s central investigative mission — links and coordination between Trump, his associates and the Russian government related to Russia’s interference in the 2016 election. The charges Manafort has faced thus far have generally avoided addressing his work on the Trump campaign, and the statement of the offense reflects that same approach. It doesn’t mention the one known overlap between the public charges and Manafort’s work on the campaign, concerning an executive at the Federal Savings Bank in Chicago named Steve Calk. At the trial in Virginia, prosecutors introduced evidence that Manafort arranged a place for Calk on a Trump campaign advisory board and floated his name for a top administration job during the presidential transition, while Calk was shepherding Manafort’s fraudulent loan applications through his bank to approval. While Manafort admits guilt in the bank fraud charges related to those loans, the statement of the offense does not revisit the allegations there was a quid pro quo of an offer of a  government job — which, if true, could constitute a felony.

Even though Trump’s lawyers are claiming Manafort has no relevant information to provide and Manafort’s plea documents are silent on any Trump campaign or Russia-related subjects, there are two good reasons to believe that the campaign and election meddling are very important aspects of Manafort’s anticipated cooperation.

First, an important moment from Manafort’s trial in Virginia suggests that an ongoing investigation of the Trump campaign is very much underway. During the trial, a defense attorney cross-examining Gates, Manafort’s partner, asked whether Mueller’s investigators had posed questions to him about his time on Trump’s campaign.  That cross-examination question prompted an immediate objection from Greg Andres, the lead prosecutor in the Virginia trial, which brought lawyers into a confidential sidebar conference with the judge. The government later filed a motion to seal that sidebar conference on the grounds that “substantive evidence pertaining to an ongoing investigation was revealed,” and the judge agreed. An ongoing investigation touching Gates’s involvement with the campaign would almost certainly include Manafort, as they joined the campaign together and worked closely with one another.

Second, Mueller’s office has by now established a track record of referring cases that do not clearly relate to his central investigative mission to other jurisdictions, even when they involve Trump and his campaign. The special counsel’s office referred Michael Cohen’s case to prosecutors in New York, even though it involved a campaign finance violation to aid the Trump campaign that Cohen later admitted Trump directed himself. Mueller’s office also referred the case of Samuel Patten, who pleaded guilty to unregistered lobbying on behalf of Ukraine in connection with Trump’s inauguration, to other prosecutors in Washington, D.C. So why did the Special Counsel’s Office keep the prosecution of Manafort (and Gates) for itself? The best answer is because Manafort (and Gates) have important but not yet public roles in Mueller’s Russia investigation as it will play out in coming weeks and months.

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