Why Manafort’s Money Laundering Matters
The Virginia trial of Paul Manafort on charges including bank fraud and tax evasion begins this week. Many observers may be wondering exactly what these charges are, why they were brought, and how this all relates to the Trump campaign.
Manafort is alleged to have committed these crimes to hide tens of millions of dollars he earned advising pro-Russian politicians in Ukraine from 2006 through 2017. He is also accused of fraudulently obtaining millions in loans from financial institutions, including while he worked for the Trump campaign. In a separate case filed in Washington DC, Manafort also faces charges of money-laundering, conspiracy, making false statements, and acting as an unregistered foreign agent for Ukrainian interests.
Both of these cases have come under heavy fire from the President in his effort to undermine the investigation of Robert Mueller into any ties between his campaign and Russian election interference. Objections to the charges against Manafort have been raised on several grounds, but the most popular lines seem to be that the charges are either “outside the scope” of Mueller’s investigation, or that they are “unrelated to the campaign”.
In raising the first of these objections, Manafort, his lawyers, and the President have repeatedly seized on the fact that none of the charges relate to allegations of Russian election interference and possible coordination with Trump associates, the main thrust of Mueller's mandate as established by the DOJ mandate setting forth his investigative scope. That document instructs Mueller to investigate “(i) any links and/or coordination between the Russian government and individuals associated with the campaign…and (ii) any matters that arose or may arise directly from the investigation”.
Fortunately, this question of investigative scope and authority has recently been decided by TS Ellis, the judge in the Virginia case, who issued a 31 page ruling concluding that “no interpretive gymnastics are necessary to determine that the investigation at issue here falls within this category of allegations”.
So yes, Mueller is well within his established scope and authority to bring these charges.
The notion that these charges are “unrelated to the campaign”, however, is much more murky and will be further illuminated as the proceedings move forward. However, there are some points and inferences to be drawn from established facts.
The charges against Manafort intersect with charges brought against his long time associate Rick Gates, who has pled guilty to conspiracy to defraud the US of the millions he and Manafort earned while working for a Ukrainian political party and to lying to the FBI. Gates is now cooperating with investigators. Mueller has also charged in absentia another Manafort associate, Konstantin Kilimnik. Born in Eastern Ukraine, Kilimnik took Russian citizenship after the fall of the Soviet Union and, after training at an academy sponsored by the Russian military, ultimately obtained work as an interpreter and facilitator for Manafort in his Ukrainian lobbying work. In other words, Kilimnik provides a direct link between Manafort and the GRU, several officers of which were also indicted by Mueller this month on charges including:
From in and around 2014 to the present, Defendants knowingly and intentionally conspired with each other (and with persons known and unknown to the Grand Jury) to defraud the United States by impairing, obstructing, and defeating the lawful functions of the government through fraud and deceit for the purpose of interfering with the U.S. political and electoral processes, including the presidential election of 2016.
The central premise Mueller is establishing with all of these charges against Manafort and his associates is the financial piece of the links between the Trump campaign and Russian operatives. He is setting out a very sweeping case to prove that during the Trump campaign and with the active cooperation of both foreign and domestic associates, its “chairman was actively running an ongoing criminal conspiracy” (Adam Davidson, New Yorker). And if the campaign chairman was actively laundering dirty money, had links to Russian military intelligence, and failed to register as a foreign agent, and there were also multiple other campaign staffers with illicit ties to Russia…it becomes increasingly difficult to take seriously any contention that these facts are mere coincidence.
However it is Manafort’s ties to Ukraine and pro-Russian Ukrainian politicians that may prove to be of most interest.
Manafort organized and directed the 2016 Republican National Convention during his time as Trump campaign chair. During this convention, the party typically revises its platforms on major current issues. And during the 2016 convention, the Trump campaign lobbied with force to soften the party stance on Russian involvement in Ukraine. Specifically, Trump campaign associates pushed the party that had held Russia to be the United States’ “number one geopolitical foe” under Romney’s 2012 campaign, to cease active support for the Ukrainian resistance to Russian occupation of Crimea.
Speculation that this platform shift, driven by the Trump campaign, at the convention organized and directed by Manafort, could be evidence of a quid pro quo delivered to Russia in exchange for election interference seems warranted, and may prove to be the intersection point at which these charges are very related to the campaign. If a sudden shift to pro-Russian stances in Ukraine meet a presidential campaign chair with a clear history of hiding illicit revenue…was he paid for the Republican party’s sudden change of heart? If so, did Donald Trump know? Did any other prominent Republicans? Perhaps any of those who are among the 44 Republican politicians retiring this year, midway through what they could otherwise assume to be their party’s first presidential term?
One of Donald Trump’s favorite refrains regarding the Mueller investigation seems to be “no collusion”. And that may well be the case. The proliferation of individuals associated with Russian intelligence and criminal activity within his campaign may be purely coincidental. But the questions raised by Manafort’s actions and connections, taken in conjunction with a high level view of facts in evidence, certainly raises questions. We await answers as the trial unfolds.