The secret offshore money trail Manafort allegedly used to con Washington

Manafort is currently in jail, awaiting sentencing.
Manafort is currently in jail, awaiting sentencing.
Image: AP Photo/Susan Walsh
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Paul Manafort secretly paid a former chancellor of a European country to lobby US politicians for the Ukrainian government, special counsel Robert Mueller’s latest indictment charges (pdf).

The accusations against the onetime manager of Donald Trump’s presidential campaign and his number two Rick Gates give a thorough account of what anti-corruption experts call “reputation laundering.”

Prosecutors say the scheme’s aim was seemingly to clean up the reputation of the government of Ukrainian president Viktor Yanukovych, particularly following his jailing of political rival and former prime minister Yulia Timoshenko.

Here is how Mueller’s team lays out the case, according to the indictment:

First, two Washington-based firms hired by Manafort and Gates in 2012 to act as lobbyists were told they would be “representing the government of Ukraine.” The indictment doesn’t name the firms, though previous reporting suggests these are likely to be the Podesta Group and Mercury. The firms set about lobbying members of Congress on issues such as sanctions against Ukraine, the validity of the country’s elections, and Timoshenko’s imprisonment.

Those who are paid to do that kind of lobbying by a foreign power must register with the US government as “foreign agents,” under a system designed to reveal any paid political motivations. Instead, the firms allegedly acted as if they were representing the Brussels-based Center for a Modern Ukraine, a bogus organization set up by Yanukovych’s regime in 2012. To pay the firms, Manafort and his number two Rick Gates wired them more than $2 million from offshore shell companies in noted money-laundering hubs Cyprus and St. Vincent and the Grenadines. Neither Mercury nor Podesta has been charged in the probe.

Barack Obama’s State department had condemned Timoshenko’s imprisonment, so Manafort and Gates hired a law firm to write a report on whether the case was legitimate. The law firm is unnamed in the indictment but would seem to be top New York outfit Skadden Arps, which allegedly wrote a “whitewash” of the imprisonment. The indictment says Manafort and Gates secretly wired the law firm $4 million from an offshore account—money that allegedly wasn’t disclosed in the report. Manafort and Gates then hired a third lobbying firm to roll out the report, paying them $1 million from an offshore account.

Finally, they hired a former chancellor of a European country to lead what they called the “Hapsburg group.” This was a “SUPER VIP” cabal of top European ex-politicians, who headed to the US to lobby more members of Congress and the executive branch. Manafort created a nongovernment agency that they would nominally work for, while acting at his “quiet direction.” He allegedly paid these politicians more than 2 million euros via four offshore accounts.

Manafort has pleaded not guilty to all previous charges made by Mueller’s team. Gates today (Feb. 23) pleaded guilty to charges of a “conspiracy against the United States” and lying to the FBI. He has been cooperating with Mueller’s probe, the judge in the case said.