Paul Manafort buttoning his suit as he exits a car.

Trump Former Campaign Chairman Paul Manafort Violated U.S. Criminal Laws By Failing to Register As a Foreign Agent of Russia and Ukraine

post by
Kenneth F. McCallion
May 3, 2017

On Friday, April 28, 2017, the global lobbying firm, Mercury LLC, filed an 87-page disclosure with the Justice Department under the Foreign Agents Registration Act (FARA). In this filing, Mercury disclosed that former Trump campaign chairman Paul Manafort had met with U.S. government officials in 2012 and 2013 on behalf of the Russia-aligned Ukrainian political party that he represented at the time. The goal of these lobbying efforts was to improve relations with the pro-Russian Ukrainian government and to lift U.S. economic and financial sanctions on Russia.

Inexplicably, neither Manafort nor his consulting firm – DMP International -- ever made a similar filing under FARA, and their failure to do so appears to have been a clear violation of federal law.

Along with Vin Weber, a partner at the Mercury lobbying firm, Manafort met with Rep. Dana Rohrabacher (R-Calif.), and others during this 2012-13 time-frame. (1) Manafort and Mercury had begun working together when Manafort introduced Mercury to a longstanding Manafort client, the European Centre for a Modern Ukraine, a Brussels-based think tank closely linked to Ukraine’s Party of Regions, which was headed at the time by then-President Viktor Yanukovich of Ukraine.

According to the recent filing disclosures, the Centre paid Mercury more than $1.2 million for lobbying work between May 2012 and May 2014. Manafort and his firm, DMP, have steadfastly refused to disclose the amount of money they received from the Centre and the Party of Regions for their lobbying work, despite promises by a Manafort spokesperson that DMP would retroactively register with FARA. To date, this has not been done.

FARA has been on the books since World War II when it was passed to combat foreign agents operating in the U.S. who were spreading Nazi propaganda. The disclosure requirements are more stringent than domestic lobbying forms and include more information, including details like itemized meetings and phone calls.

The legal conundrum faced by Manafort is that any filing at this point under FARA will be an admission by him that he should have – but did not – previously comply with the law and file as an agent of a foreign government. Even if he makes a belated disclosure of such lobbying work for the Ukraine government and the Party of Regions, this will not immunize him against a criminal prosecution for willfully failing to register and make the necessary disclosures.

Manafort’s legal counsel is now trying to obtain an immunity agreement with Department of Justice officials who are overseeing the FBI’s investigation of Manafort and the Trump Campaign’s dealings with Russian operatives. It is highly unlikely, however, that his immunity request will be granted. Manafort, as Trump’s former campaign chairman, is simply too high up in the food chain to be given immunity so quickly. If and when he is criminally prosecuted, then there will be plenty of opportunities for Manafort to cooperate with federal prosecutors in the hopes that he will get a reduced sentence.

For now, federal prosecutors have been seeking the cooperation of lower level operatives in the Trump Campaign, and have been entering into some immunity deals in return for full cooperation as to what they know about coordination between the Trump Campaign, Russian operatives, and WikiLeaks. Some of these lower-level personnel from the Trump campaign have knowledge about Manafort’s dealings with Russian and pro-Russian Ukrainian figures who were helping Manafort to steer the Trump campaign towards a more moderate and accommodating position towards Russia. Russia wanted Trump to acquiesce to its aggression in Crimea and eastern Ukraine, and to also turn a blind eye to aggressive moves towards NATO members among the Baltic States, such as Latvia, Lithuania, and Estonia. For example, Rick Gates, a long-time Manafort associate, also worked on the Trump Campaign and was in a senior enough position to know whether, and to what extent, Manafort discussed the coordination with Russian operatives with Trump himself and others in the Trump inner circle.

Indeed, what is currently known is that the entire Trump organization and campaign knew that Putin, and therefore Russia, hated Hillary Clinton with a vengeance for her perceived support for the Russian protesters in December 2011 who were calling for Putin to step down and to not run for re-election for the Russian presidency. Whether Clinton, as Secretary of State, actually played a key role in coordinating U.S. efforts to support the anti-Putin protesters who came close to toppling the Putin Regime is subject to debate. However, there is no question that once Putin and the full weight of the Russian police and security forces were brought to bear to break up those demonstrations in Moscow and other Russian cities, Clinton was one of the most outspoken western leader to denounce Putin’s crackdown. It was only a matter of time, therefore, that Putin would harness all of the cunning and the might of the Russian intelligence services to try to prevent Clinton from being elected as the next President of the United States. If he couldn’t stop her, at least he could try to so tarnish and undermine her image that her legitimacy would be called into question.

As a longstanding pro-Russian political operative on behalf of both the pro-Russian regime in Ukraine as well as on behalf of Russia itself, Manafort’s lobbying effort in the U.S. were financed by and coordinated through the Brussels Centre, which has had secret but longstanding financial ties with Yanukovich’s pro-Russian Party of Regions. Manafort, however, assured the Mercury lobbying firm that the Centre was completely independent, thus misleading them into believing that no FARA filing was required. Manafort also introduced the Centre to another Washington firm, the Podesta Group, which is owned by Tony Podesta, the brother of John Podesta, Hillary Clinton’s former campaign chairman. The Podesta Group filed its own retroactive foreign lobbying disclosures earlier this month.

Even after Manafort had been tapped by the Trump campaign to handle its efforts leading up to the Republican National Convention in Cleveland during the spring and summer of 2016, Manafort continued to maintain an office just off Independence Square in Kiev, Ukraine. This space was used to conduct Manafort’s consulting work for Yanukovich and his pro-Russian Party of Regions.Furniture and personal items were reported to still remain in the office as ofMay 2016. (2) Inside a vault in the office, papers were found showing that Manafort disguised one of the$12.7 in undisclosed cash payments to him by Yanukovich during the 2007 to 2012 period as the bogus bulk sale of computers.

The handwritten ledgers, which were part of an illegal “off-the-books” system of payments to consultants and bribes of public officials, had been discovered earlier after Yanukovich had been deposed in early March 2014 by Ukraine’sNationalAnti-Corruption Bureau. This 400-page ledger, handwritten in Cyrillic, were taken from books once kept in at hird-floor room in the former Party of Regions headquarters on Lipskaya Street in Kiev. (3) The room held two safes stuffed with $100 bills. Manafort’s name appeared 22 times in the documents over five years, with payments totaling $12.7 million. (4)

The decision by Manafort and the two lobbying firms – Mercury and Podesta – to belatedly file retroactive disclosure forms under FARA several years after the lobbying work had been performed appears to have been triggered by a series of AP reports. These reports included details about how Manafort and his associate Rick Gates directed strategy while operating as advisers for the Party of Regions.

In addition to lobbying for former Ukraine President Yanukovich and his Party of Regions, Manafort also secretly represented Oleg Deripaska, the billionaire Russian “aluminum king” and close Putin protégé. As part of this representation, Manafort formulated a secret strategy plan “to greatly benefit the Putin Government.”5 In return, Manafort received $10 million per year, starting in 2006 and continuing until at least 2009. "We are now of the belief that this model can greatly benefit the Putin Government if employed at the correct levels with the appropriate commitment to success," Manafort wrote in a 2005 memo to Deripaska. Manafort further promised that, if retained, his firm "will be offering a great service that can re-focus, both internally and externally, the policies of the Putin government."

According to the documents, Manafort told Deripaska in 2005 that he was pushing policies as part of his work in Ukraine "at the highest levels of the U.S. government — the White House, Capitol Hill and the State Department,". He also said he had hired a "leading international law firm with close ties to President Bush to support our client's interests," but he did not identify the firm. Manafort said he was employing unidentified legal experts for the effort at leading universities and think tanks, including Duke University, New York University, and theCenter for Strategic and International Studies. (6)

Manafort worked for years for Deripaska and Russian interests, until they apparently had a falling out in 2014 in a Cayman Islands bankruptcy court. During that time it was disclosed that Deripaska had given Manafort nearly $19 million to invest in a Ukrainian TV company called Black Sea Cable, only to have Manafort and his associates take the money for their own or other uses, without giving any accounting. The Black Sea Cable assets were controlled by a series of offshore companies that were part of the Yanukovich network. These businesses included Milltown Corporate Services, MonololdA.G.,and Intrahold A.G. (7) The last two companies were cash rich due to the bloatedcontracts they held with a state-run agricultural company. The companies also acquired a business center in Kiev with a helicopter pad on the roof that was used by Yanukovich to commute between his country estate and his presidential palace in Kiev.

The Treasury Department's Financial Crimes Enforcement Network – known as FinCEN --has been requesting banking records from the Attorney General of Cyprus regarding Manafort’s routing of his financial transactions with Yanukovich, Deripaska and others through Cyprus. Cyprus has long been considered by international law enforcement to be one of the primary money-laundering capitals of the world, especially when it comes to the transfer and laundering of massive amounts of cash being moved offshore by Russian and Ukrainian oligarchs and corrupt government officials. Evidence of Manafort’s transfer of funds through Cyprus banks surfaced in among public documents filed in Manafort’s 2014 legal dispute in the Cayman Islands with Russian billionaire Oleg Deripaska.

Manafort first started working for Viktor Yanukovich after the popular uprising in the winter of 2004-2005, known as the Orange Revolution. Yanukovich, then Prime Minister of Ukraine, was declared the winner of the 2004 presidential election, which was crippled by fraud and overturned by Ukraine’s highest court after weeks of protests for the pro-Western candidate, Viktor A. Yushchenko. (8)

In his frustration, Yanukovich turned to Manafort as one of the leading American experts on “re-packaging” authoritarian despots around the world to make them more media-savvy and press-friendly. Manafort had been working at the time for Ukrainian oligarch and billionaire, Rinat Akhmetov, helping improve the image of his companies as well as the image of the Party of Regions, the pro-Russian political party that Akhmetov sponsored and which was headed by Yanukovich. Manafort quickly turned this staid former Soviet administrator and local trucking director into a western-style candidate who had a much easier going and informal style with the press. Under Manafort’s tutelage, Yanukovich made a political comeback, with his Party of Regions winning a large bloc in the 2006 parliamentary elections and returning him once again to the post of prime minister in 2007.

In 2010, Yanukovich – under Manafort’s watchful eye -- defeated the twice former prime minister Yulia Tymoshenko in a close and sharply contested election for Ukraine President. Yanukovich promptly opened a politically biased and unfounded investigation and prosecution of Tymoshenko for having cut-out the lucrative middleman – Dimitri Firtash and his company, RUG – in the natural gas deals between Gazprom, Russia’s huge gas company, and Ukraine’s Naftogaz.

The Yanukovich Administration eventually jailed Tymoshenko on various trumped up charges, and she languished in jail until March of 2014, when she was finally released following the popular uprising known as “Maidan” in February- March of 2014. The uprising forced Yanukovich and his cronies to flee Kiev and to take up residence in Moscow under the protection of Vladimir Putin and the Russian government. During her imprisonment, and despite years of outcries for her release by U.S. and Western European leaders and human rights organizations, Tymoshenko was denied competent medical treatment for a chronic and painful back problem that required special surgery offered by the German government in Berlin.

Stung by the barrage of criticism related to the imprisonment and mistreatment of Tymoshenko, the Yanukovich Administration, at the suggestion of Manafort, hired the large and well-connected law firm of Skadden Arps, Slate, Meagher & Flom to conduct an investigation of the allegations that the prosecution of Tymoshenko was purely politically motivated. Unfortunately, for Skadden Arps and Yanukovich, some key secret documents were discovered in early 2014 in a sauna in Kiev belonging to a former senior Ukrainian official. These documents – which were analyzed by the McCallion & Associates law firm (“M&A”) and other legal experts and reporters – called into question the the representations by the Yanukovich Administration and Skadden Arps that the investigation had been completely objective and unbiased. These memos and other documents disclosed, for example, that Manafort had carefully coordinated with the Skadden Arps lawyers and investigators, and it appears that Manafort steered them towards their anticipated conclusions, which were generally favorable to Yanukovich.

In fact, the investigation by M&A and various investigative journalists revealed that the disinformation campaign and politically-motivated charges brought against Tymoshenko and other incarcerated oppostion leaders in Ukraine had been financed, at least in part, through an elaborate global money laundering scheme masterminded by Manafort and some of his financial and political allies in Ukraine and Russia. Most of the tainted funds that were laundered by Manafort & Company originated in Russia and Ukraine through the organized crime organization run by Ukrainian oligarch Dimitri Firtash and Seymeon Mogilevich, the godfather of Russian organized crime.

Manafort was introduced to Firtash by Yanukovich and his pro-Russian allies in Ukraine, and they quickly reached an agreement to launder millions of Firtash’s ill-gotten gains through New York and offshore banks. In order to facilitate this racketeering scheme, Manafort and Firtash opened a real estate company “front” in New York at 1250 Broadway, known as ZMC Partners (sometimes referred to as “CMZ Parners”). Brad Zackson, a former broker with the Trump Organization, was the “Z” in the organization; Manafort provided the “M;” and Arthur Cohen, a New York real estate developer, was the third named partner. It was agreed between Manafort and Firtash that if Firtash provided the millions of dollars needed to finance the organization, then he and Mogilevich would be a “silent partners” in the deal. As part of this ZMC money-laundering scheme, Manafort was assisted by Rick Gates, who later went on to serve as Manafort’s deputy in the Trump Campaign, and who remained on with the campaign even after Manafort was forced to official sever his ties with the campaign in August 2016. In order to appear to be a legitimate real estate development company, ZMC Partners went through the process of obtaining a contract on the Drake Hotel site and other sites in Manhattan. To secure these contracts, millions of dollars were transferred to New York and offshore bank accounts for the ostensible purpose of closing on these transactions. Remarkably, after the money was laundered through these accounts and disappeared back into a labyrinth of corporate entities controlled by Firtash and Mogilevich, ZMC quietly canceled or reneged on their real estate contracts and never actually closed any of the deals. Along the way, however, Manafort and Zackson were paid handsomely for their troubles on behalf of these international money laundering criminals, and Manafort used some of his proceeds to buy an apartment in Trump Towers and other New York real estate.

In February 2017, Federal Savings Bank, whose chief executive was an economic advisor to Trump’s presidential campaign, made $6.5 million in loans to Manafort and his wife for a Brooklyn brownstone property at 377 Union Street. Federal Savings made a prior loan of $9.5 million to Summerbreeze LLC, a company controlled by Manafort. These two transactions were disclosed by a website named “377 Union,” reflecting the address of the property in Brooklyn purchased by Manafort.

According to the Dossier, which was researched and written by the former MI-6 British agent Christopher Steele, one of the quid pro quos promised by the Trump Campaign for all the assistance that was being provided to it by the Russian state-sponsored hackers in coordination with WikiLeaks was that they would water down the Republican National Platform. Russia wanted any references to providing the beleaguered country of Ukraine with defensive weapons eliminated.Manafort and his associates made sure that the Trump campaign made good on this promise during the Republican National Convention when over the strong objection of some Republican delegates on the platform drafting committee, all references condemning Russia’s occupation and de facto annexation of Crimea and aggression in eastern Ukraine were deleted. Also removed were all references supporting the provision of the Ukraine government with defensive military weaponry.

One of Manafort’s longstanding aides who worked at Manafort’s Kiev office was Konstantin V. Kilimnik, a dual Russian and Ukrainian national who had trained at Russia’s equivalent to West Point and worked for many years as a translator/intelligence agent for the GRU, the Russian military intelligence unit. Kilimnik had been fired from a Moscow-based not-for-profit organization financed by the U.S. upon suspicion that he was a Russian spy. Manafort used Kilimnik and his connections to maintain a back-door connection with Russian intelligence operatives who were close to Putin and his inner circle.

More recently, evidence has emerged that Manafort played a key role in the coordination between the Trump Campaign, Russian intelligence operatives and WikiLeaks with regard to the hacked materials from the DNC and the Clinton Campaign during the 2016 Presidential election. Trump’s nearly immediate use of critical data hidden among the tens of thousands of pages dumped by WikiLeaks has led government investigators to believe that there was some degree of coordination between Trump campaign operatives and Russia/WikiLeaks before the public disclosure of the hacked documents by WikiLeaks. It is suspected that either key documents among the WikiLeaks treasure trove of documents were leaked to the Trump campaign in advance, or that they were given advance notice of the keyword searches that would immediately focus the Trump campaign on the documents that were most damaging to the Clinton campaign.

In fact, the Trump campaign ran a serious risk of using some of the keyWikiLeaks material even before it was publicly released by WikiLeaks. If that had happened, it would have created a huge problem for Trump and his campaign since such an error would have constituted a virtual admission that the campaign had been given advance notice of at least some to the WikiLeaks material. Manafort played a central role as Trump’s campaign chairman during the critical March through August 2016 time-frame by laying the groundwork for the intricate network of contacts that bound the Trump campaign, Russian intelligence operatives and WikiLeaks’ Julian Assange into formidable propaganda and disinformation machine. The network sufficiently threw the 2016 Presidential election campaign of Hillary Clinton into disarray and ultimately contributed significantly to Trump’s election win.

In short, Manafort has much more to worry about than an airtight case for failure to properly disclose his activities as a foreign agent under FARA. He also may be facing charges of treason, for knowingly colluding and conspiring with Russian agents to undermine the U.S. democratic processes and to improperly influence a Presidential election in favor of a pro-Russian candidate (i.e., Donald J. Trump). Although not used very often, 18 U.S.C. 2381 provides as follows: “Whoever, owing allegiance to the United States, levies war against them or adheres to their enemies, giving them aid and comfort within the United States or elsewhere, is guilty of treason and shall suffer death ….”

Given the seriousness of the matters under investigation and the high stakes involved, the only prudent way to proceed is for a Special Prosecutor to be appointed to independently investigate these matters. The integrity and even the survival of our democratic processes may depend on it.

(1) Politico, 04 28 17, Isaac Arnsdorf, “Disclosures show Manafort participated in Ukraine lobbying.”

(2) New York Times, August 14, 2016, “Secret Ledger in Ukraine ListsCash for Donald Trump’s Campaign Chief,Andrew Kramer et al.3NYT, 08 14 16.4Id. 5AP, March 22, 2017, Jeff Horwitz, Chad Day, et al.

(3) NYT, 08 14 16.

(4) Id.

(5) Ap March 22, 2017, Jeff Horwits, Chad Day, Et al.

(6) Id.

(7) NYT, 08 14 16.

(8) New York Times, 07 31 16, Steven Lee Myers and Andrew E. Kramer.

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