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Paul Manafort’s Defense Team Opens Trial by Blaming Associates

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By SHARON LaFRANIERE and EMILY BAUMGAERTNERUPDATED 2:17 PM


Protesters were outside as Paul Manafort’s trial began in Alexandria, Va., on Tuesday. Credit Gabriella Demczuk for The New York Times

ALEXANDRIA, Va. — Paul Manafort’s trial on financial fraud charges opened on Tuesday with an effort by his defense team to deflect blame to the government’s star witness in the case, Rick Gates, Mr. Manafort’s longtime political consulting partner.

The defense strategy pits the credibility of Mr. Manafort, a former campaign chairman for President Trump, against that of Mr. Gates, who has pleaded guilty to charges in the same case and is cooperating in the inquiry led by the special counsel, Robert S. Mueller III. And it sets up a dramatic courtroom showdown between Mr. Gates, who is scheduled to take the stand for the prosecution, and Mr. Manafort, who worked closely with him in aiding pro-Russia politicians in Ukraine for a decade and also in 2016 on Mr. Trump’s campaign.

The trial, over charges that Mr. Manafort hid tens of millions of dollars he received for his work in Ukraine and then engaged in bank fraud when those funds dried up, got underway at a rapid clip.

A jury of six men and six women was seated hours after the proceedings began in United States District Court in Alexandria, Va. By midafternoon, the prosecutors and the defense team were making their opening statements, laying out the contours of the case they intend to make to the jury.

In his opening statement, Thomas Zehnle, one of Mr. Manafort’s five defense lawyers, said Mr. Gates embezzled millions from Mr. Manafort and then, fearing prison time for his own misdeeds, turned on him under pressure from Mr. Mueller.

“Rick Gates is their foundation,” Mr. Zehnle said.

Even though Mr. Gates has pleaded guilty to lying to the federal authorities and conspiracy to engage in financial fraud, Mr. Zehnle said, “the government is going to ask you to trust him.”

The trial is the first stemming from charges brought by Mr. Mueller in his investigation of Russia’s interference in the 2016 presidential election. Although the charges against Mr. Manafort involve neither Mr. Trump nor allegations of collusion with Russia, the trial is the first courtroom test of Mr. Mueller’s work and the likelihood of it being focused on two former senior Trump advisers savaging each others’ honesty will only draw more attention to it. Mr. Gates was Mr. Trump’s campaign chairman under Mr. Manafort, and after Mr. Manafort was forced out in August 2016 over revelations about his Ukraine work.

He is one of about 35 prosecution witnesses scheduled to testify about what the government calls a shrewdly crafted multiyear scheme by Mr. Manafort to evade taxes on $15 million in income he earned while working to promote the political fortunes of Viktor F. Yanukovych, a former leader of Ukraine.

Uzo Asonye, an assistant United States attorney on the prosecution’s team, told the jury that Mr. Yanukovych was Mr. Manafort’s “golden goose” and that Ukrainian oligarchs who ran entire industries in Ukraine paid Mr. Manafort $60 million over a decade to bolster Mr. Yanukovych’s fortunes.

Mr. Manafort hid most of his income, and roped bookkeepers, tax accountants and bank officials into his scheme “in order to get and keep money,” Mr. Asonye said. “He even lied about where he was living.”

Although it was only the first day of what is expected to be a three-week trial, it seemed clear that the central argument would be whether Mr. Manafort directed the various fraudulent financial schemes, or was duped or directed by others, including Mr. Gates.


Mr. Manafort is the first American charged in the inquiry by the special counsel whose case is going to trial. Credit Alexandria Sheriff's Office

Mr. Zehnle said Mr. Manafort was too busy as a highly paid political consultant working overseas to keep track of his finances, and relied on a staff of professionals, including Mr. Gates.

“Mr. Gates was the point man,” he said.

If Mr. Manafort’s payments for his Ukraine work were made in an unorthodox fashion through accounts in Cyprus, he said, it was because his financial patrons insisted that is how he should be paid, not because Mr. Manafort was trying to hide his income.

“That is the way the client wanted it to be done,” he told the jurors. “His Ukrainian patrons set up the accounts, not Paul Manafort.”

But the prosecutors said Mr. Manafort deliberately hid the money he made so he could indulge his taste for luxury, paying millions in cash for homes in the United States, driving a Mercedes-Benz convertible and splurging on purchases like a $21,000 watch and a $15,000 jacket made from an ostrich.

“He got whatever he wanted,” Mr. Asonye said. “His homes, his renovations, his jewelry, his clothing.”

When his Ukrainian patrons quit paying, he said, Mr. Manafort filed false documents with banks to keep up his cash flow. “All of this was willful,” he said.

Mr. Manafort, in a black suit with a silver tie, took an active part in his defense. He consulted with his lawyers during the selection of the jurors, putting on his glasses to pore over his notes.

His defense team was clearly wary of how the jurors would respond to tales of their client’s extravagant spending, and argued that he had earned his wealth through his talents as a political consultant.

“Paul Manafort travels in circles that most people would never know,” his lawyer, Mr. Zehnle, said. “He lived a lifestyle that most people can only dream of.”

Thomas A. Devine, a Democratic political consultant who was hired by Mr. Manafort to develop media strategy for Mr. Yanukovych, was the only witness to testify. Called by the prosecution, he said that Mr. Manafort ran an “incredible” operation to resurrect Mr. Yanukovych’s political career. Written off as a political loser in 2005, Mr. Yanukovych was elected president of Ukraine in 2010, then ousted in 2014 amid a political uprising. Mr. Devine, known as Tad, worked for Bernie Sanders as his chief strategist in the 2016 election.

Mr. Manafort’s lawyers tried to scrutinize Mr. Devine’s politics — possibly seeking to show that he was biased against Republicans like Mr. Manafort. Prosecutors objected, arguing that the judge had ordered that political references be left out of the trial.

Mr. Manafort, 69, is the only American charged by Mr. Mueller’s team so far to force the prosecutors to present their evidence at trial. The other four Americans who have been indicted all pleaded guilty, including Michael T. Flynn, a campaign adviser who became Mr. Trump’s national security adviser .. https://www.nytimes.com/2017/12/01/us/politics/michael-flynn-guilty-russia-investigation.html , and George Papadopoulos, an unpaid campaign adviser who was targeted by emissaries .. https://www.nytimes.com/2017/10/30/us/politics/george-papadopoulos-russia-trump.html .. who have been linked to Russian intelligence.

Mr. Trump has repeatedly suggested that he was surprised at how harshly Mr. Manafort had been treated. In an interview with Fox News two weeks ago, he said the indictments against his former aides, including Mr. Manafort, were a “very sad thing for our country.”

Related Coverage

Manafort’s Trial Isn’t About Russia, but It Will Be in the Air JULY 30, 2018
https://www.nytimes.com/2018/07/30/us/politics/paul-manafort-trial.html

Paul Manafort’s Trial Starts Tuesday. Here Are the Charges and the Stakes. JULY 29, 2018
https://www.nytimes.com/2018/07/29/us/politics/paul-manafort-trial.html

https://www.nytimes.com/2018/07/31/us/politics/paul-manafort-trial.html