By Spencer S. Hsu August 28
Former Trump campaign manager Paul Manafort arrives for arraignment on a third superseding indictment against him by Special Counsel Robert Mueller on charges of witness tampering in Washington on June 15. (Jonathan Ernst/Reuters)
BREAKING: A federal judge in D.C. postponed Paul Manafort’s trial on conspiracy and money laundering charges related to his lobbying work until Sept. 24. It had been set to begin Sept. 17.
Prosecutors and attorneys for Paul Manafort are set to appear Tuesday morning in federal court in Washington to argue over whether evidence of his alleged past “bad acts” should be shown to a jurors at his September trial.
Special counsel Robert S. Mueller III’s prosecutors have asked U.S. District Judge Amy Berman Jackson to introduce such evidence, arguing it could help convince jurors that President Trump’s former campaign chairman knowingly committed charged crimes, including conspiring against the United States, money laundering and obstructing justice.
Manafort’s attorneys asked Jackson to reject the requests, saying the law bars prosecutors from using past acts simply to suggest a defendant is likely to commit crimes.
Manafort already faces prison time after he was convicted last week on eight of 18 tax- and bank-fraud charges in Alexandria federal court.
U.S. District Judge T.S. Ellis III of Alexandria declared a mistrial on the 10 remaining charges, giving the government until Wednesday to decide whether to retry Manafort.
In his case in Washington, Manafort, 69, has pleaded not guilty to charges related to his political work from 2006 to 2017. Prosecutors allege that during that time he laundered $30 million as a consultant for pro-Russian politicians in Ukraine.
On Tuesday, the sides are expected to clash over prosecutors’ request to introduce evidence that they say shows Manafort previously had the motive and knowledge to violate or circumvent financial and lobbying laws.
One government request seeks to show that Manafort for years falsely claimed tax deductions on a Trump Tower condo he bought in New York City in 2006 for $3.7 million, by saying it was used solely for business purposes. Prosecutors allege that in January 2015 Manafort sought to borrow on the unit and bolster his teetering finances by directing his tax preparer to tell the lender it was a personal residence.
Prosecutors also asked to introduce new evidence related to the Skadden, Arps, Slate, Meagher & Flom law firm, to which Manafort allegedly funneled $4 million from offshore accounts he controlled in Cyprus. The money, prosecutors say, was to pay for a 2012 report supporting the imprisonment by Manafort’s client, Ukrainian President Viktor Yanukovych, of his political rival, Yulia Tymoshenko.
Prosecutors want to argue that Manafort and others arranged for Skadden — where attorney Gregory B. Craig, former Obama White House counsel, was leading the project — to appear to be retained for $12,000, instead of for millions, to circumvent Ukrainian contracting rules.
They also want to show that Manafort and subordinates structured what they say were “sham loans” between Cyprus entities they controlled to hide income from the U.S. Treasury.
Finally, Mueller’s office asked to submit evidence of undisclosed lobbying by Manafort dating to 1986 to show that he had an insider expert’s knowledge of U.S. reporting requirements for agents of foreign governments.
Manafort’s prior Trump Tower condo “tax strategy” and loan effort show he knowingly manipulated his finances to deceive the Internal Revenue Service and the U.S. government, and procured bogus statements from lawyers, tax preparers and accountants, prosecutors said.
They say Manafort also resigned as a director of the U.S. Overseas Private Investment Corp. in May 1986 after Reagan White House and Justice Department officials criticized his positions both as a federal agency director and an undisclosed lobbyist for Saudi Arabia and other foreign governments, prosecutors said. They alleged Manafort attempted to hide his role, including by registering one of his companies, Black, Manafort, Stone & Kelly, as the lobbyist.
Manafort’s attorneys asked Jackson to toss out all requests, saying they are unrelated to his charged conduct and likely to confuse jurors and prolong a trial.
Manafort is charged with failing to report offshore income and foreign bank accounts, not overstating expenses or inflating deductions on his Trump Tower condo, they said.
He is not charged with violating Ukrainian law, so the Skadden evidence only serves to inappropriately lead to jurors to conclude that if he was willing to break the law there, he broke U.S. law, attorney Kevin M. Downing argued.
Similarly, Manafort’s defense said how loans were structured under Cypriot law “has little to do” with his charged offenses and would only suggest to a jury that “he must have had some nefarious intent when it came to his U.S. tax filing obligations.”
As for his past lobbyist disclosures, Manafort’s called them “ancient history” that never resulted in charges and would only bias jurors.
In a separate pending matter, both sides are set to debate a questionnaire for potential jurors.
Manafort is not expected to be present at the hearing. From a jail in Alexandria, he asked to waive his appearance and was granted permission to not appear until trial.