By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends much of her time in Asia and is currently working on a book about textile artisans.
On Monday, special counsel Robert Mueller indicted former Trump campaign chairman Paul Manafort and business partner Richard Gates on twelve counts, including conspiracy against the United States and conspiracy to launder money, and various charges of failure to file Reports of Foreign Bank and Financial Accounts (FBAR), and failure to register as a foreign agent, concerning activities in the Ukraine that ended in 2014. (Read the indictment here.)
I’m not alone in pointing out that absent Manafort’s involvement in Trump’s campaign, his failure to register as a foreign agent– would not have been targeted, as many lobbyists are not conscientious in fulfilling this reporting requirement. See, for example, this National Review account:
The offense of failing to register as a foreign agent (Count Ten) may be a slam-dunk, but it is a violation that the Justice Department rarely prosecutes criminally. There is often ambiguity about whether the person’s actions trigger the registration requirement, so the Justice Department’s practice is to encourage people to register, not indict them for failing to do so.
Much has been made of the absence of any tax charges in the present indictment, one which alleges conspiracy to commit money laundering. The lawyers I spoke to weren’t unduly concerned about such seemingly missing counts, pointing out that the indictment can be amended later to include tax charges, as investigations proceed.
In fact, this indictment should probably be read as a warning shot– the first step in a lengthy, wide-ranging investigation. I was reminded by one lawyer I spoke to yesterday that special prosecutors have virtually limitless powers, and certainly no major lobbyist could expect to survive unscathed the level of scrutiny that will be brought to bear in this investigation.
Unsurprisingly, the New York Times published a piece reinforcing that line, Andrew Weissmann, Mueller’s Legal Pit Bull, that reads like the work of a legal fanboy, and the message of which is Be Afraid, Be Very Afraid:
Two decades later, Mr. Weissmann has turned his attention to a more prominent set of prospective conspirators: He is a top lieutenant to Robert S. Mueller III on the special counsel investigation into Russian interference in the 2016 election and possible links to the Trump campaign. Significantly, Mr. Weissmann is an expert in converting defendants into collaborators — with either tactical brilliance or overzealousness, depending on one’s perspective.
It is not clear if President Trump and his charges fear Mr. Weissmann as they gird for the slog ahead. It is quite clear, former colleagues and opponents say, that they should.
The million dollar question: Will this implicate or threaten Trump? So far, I think no. But we must all stay tuned– and pass the popcorn.
Bottom Line for Trump
One goal in indicting Manafort was to force him to give up the goods on Trump regarding alleged Russian collusion in the election campaign. Yet the offenses alleged in the indictment concerned activities in the Ukraine during a specific time period ending before Manafort’s campaign involvement. (The indictment also include a charge of making false statements to prosecutors in 2016, concerning these earlier activities.)
As the Wall Street Journal opined:
The most striking news is that none of this involves the 2016 election campaign. The indictment makes clear that Mr. Manafort’s work for Ukraine and his money transfers ended in 2014. The 2016 charges are related to false statements Mr. Manafort made to the Justice Department.
There’s reason to think Manafort might not have such goods to deliver. Recall that Trump initially brought Manafort into his campaign in March 2016, elevated him to campaign manager in June, and tied him in August, according to The Washington Post.
Now, there’s no denying that Manafort kept some very sleazy company (see, for example, this September post from John Helmer). The Journal noted (drily): “Mr. Manafort has lobbied for a rogues gallery of dictators, with the occasional domestic scandal (HUD contracts).” But lobbying on behalf of unsavory foreign clients this isn’t per se illegal (reminding me of Michael Kinsley’s quip, “The scandal isn’t what’s illegal, the scandal is what’s legal”.)
The Journal further notes:
One popular theory is that Mr. Mueller is throwing the book at Mr. Manafort so he will cop a plea and tell what he knows about Russian-Trump campaign chicanery. But that assumes he knows something that to date no Congressional investigation has found. Prosecutors typically try to turn witnesses before they indict, and Messrs. Manafort and Gates pleaded not guilty on Monday.
Issues With Manafort Indictment
In the interests of keeping this post of readable length, I’m going to limit my focus.
The National Review account cited above is worth reading in full. I am of course aware of the ideological slant of that publication, but I found little to fault in its analysis– admittedly, making the case for the defense and summarized thus: “On first glance, Mueller’s case, at least in part, seems shaky and overcharged.” Since Manafort has pleaded not guilty, he can and will draw on high-priced legal talent that will certainly make these and similar arguments, zeroing in on weaknesses in he government’s case..
In particular, while even this National Review account concedes that the failure to register as a foreign agent seems to be a slam-dunk (leaving aside the clear political motivation of taking a particularly Javertian line on this lapse), whether this will result in a win for the government isn’t wholly clear, due to possible prosecutorial overreach:
Specifically, Congress considers false statements in the specific context of foreign-agent registration to be a misdemeanor calling for zero to six months’ imprisonment. (See Section 622(a)(2) of Title 22, U.S. Code.) That is the offense Mueller charges in Count Eleven. But then, for good measure, Mueller adds a second false-statement count (Count Twelve) for the same conduct — charged under the penal-code section (Section 1001 of Title 18, U.S. Code) that makes any falsity or material omission in a statement to government officials a felony punishable by up to five years’ imprisonment.
Obviously, one cannot make a false statement on the foreign-agent registration form without also making a false statement to the government. Consequently, expect Manafort to argue that Mueller has violated double-jeopardy principles by charging the same exact offense in two separate counts, and that the special counsel is undermining Congress’s intent that the offense of providing false information on a foreign-agent registration form be considered merely a misdemeanor.
Possible Fourth Amendment Violations Taint Manafort Evidence?
Continuing with another potential defense argument, I’ll mention another possible problem with the government’s case, discussed in a Rachel Stockman opinion piece published by LawNewz. Again, lest I be accused of pro-Manafort or– shudder– pro-Trump bias, I want to emphasize if I can spot these issues and develop such arguments, based on on-line research, assorted back and forth email exchanges, and telephone calls conducted over the last couple of days, certainly Manafort’s defense team will do this and more– so please do not shoot your humble messenger.
While calling the indictment “very detailed and well-documented” Stockman continued:
there is one area that could hurt Mueller’s investigation. Mueller’s team may have obtained evidence in the raid of Paul Manafort’s home that was not covered by the search warrant. That could be problematic.
In a surprise raid on July 26th, FBI agents busted into Manafort’s home in Alexandria, Virginia to collect documents and other materials related to the FBI probe into whether the Trump campaign colluded with the Russians. At the time, Manafort’s attorney raised concerns about how the raid was conducted. In order for the feds to obtain a warrant, a federal judge would have to determine that probable cause existed that a crime was committed. As part of the warrant, investigators attached an affidavit which contained a list of items that FBI agents hoped to collect. That’s where the trouble appears to be in Manafort’s case.
The key issue is whether this constituted an illegal search, and exactly what was seized. Here, the Stockman piece relies on a September CNN report:
During that raid, Mueller’s investigators took documents considered to be covered by attorney-client privilege, sources told CNN.
Lawyers from the WilmerHale law firm, representing Manafort at the time, warned Mueller’s office that their search warrant didn’t allow access to attorney materials. The documents in question have now been returned, the sources say.
The episode raised questions about whether investigators have seen materials they weren’t entitled to obtain.
“You can’t unsee something,” one source said.
It’s not an uncommon problem in FBI investigations. US attorneys typically have separate document-review teams to prevent investigators from handling materials they aren’t allowed to have. It’s not clear what procedures Mueller’s office uses.
I’m not taking a position on this issue one way or another, but merely flagging this as a potential problem for the government’s case.
Attorney-Client Privilege Pierced
Finally, I’d like to mention a another LawNewz opinion piece, this by Elura Nanos, which spotlights a potential problem for the defense. The piece discusses a Memorandum Opinion, unsealed at the end of October, in which D.C. federal district court chief judge Beryl A. Howell compelled grand jury testimony from a lawyer representing Manafort and Gates under the crime-fraud exception to attorney-client privilege. The attorney-client privilege isn’t absolute, and judges can order an attorney’s testimony if it falls within certain exceptions.
Over to Nanos:
Now we know that the grand jury proceedings culminated in indictments, and Judge Howell’s ruling on the this motion to compel testimony is more than a little foreshadowing. The Court’s opinion on this issue allows us to peek into the generally secret grand jury proceedings, and that peek isn’t looking so good for the defendants.
Now, frustratingly, Judge Howell’s opinions was heavily redacted– interested readers may wish to click the link above to see just how extensively for themselves. I’ll again rely on the Nanos account which lays out the key concern:
The court’s memorandum was heavily redacted, so at this point, it’s unclear which statements the judge meant, but this portion of the document sure sounds bad for the defendants:
“… the above statement is false, a half-truth, or at least misleading because evidence shows that Target 1 and Target 2 were intimately involved in significant outreach in the United States on behalf of the ECFMU, the Party of Regions and/or the Ukrainian government.”
Yeah, things can change at trial, but even at a preliminary phase, it’s not good for a judge to make a finding that you’re “intimately involved” in sinister foreign misdealings. Oh, and there was also this:
“Through its ex parte production of evidence, the [Special Counsel’s Office] has clearly met its burden of making a prima facie showing that the crime-fraud exception applies by showing that the Targets were “engaged in or planning a criminal or fraudulent scheme when [they] sought the advice of counsel to further the scheme.”
Those seven little letters should strike fear in the hearts of Manafort, Gates, and their lawyers. The SCO hasn’t just met its burden – it’s done so clearly. Allow me to translate from judge-to-English: “You guys are screwed. Take a plea or watch everyone around you– even your own lawyers — go down.”
For more in a similar vein lauding Mueller’s “serious, deliberative, and far-sighted inquiry”, see this Atlantic account, which extensively discusses the plea agreement of Trump foreign policy adviser George Papadopoulus– and which I lack space to discuss further in this Manafort indictment post.
I’d like to point to a New York Times piece, headlined In Call With Times Reporter, Trump Projects Air of Calm Over Charges that suggests that Trump is managing to keep it together, and dare I say it, respond to the Manafort indictment in a ‘presidential’ way– in the traditional pre-Trumpian sense of that word.
Permit me to quote from the Grey Lady’s account at length:
President Trump projected an air of calm on Wednesday after charges against his former campaign chief and a foreign policy aide roiled Washington, insisting to The New York Times that he was not “angry at anybody” and that investigations into his campaign’s links to Russia had not come near him personally.
“I’m not under investigation, as you know,” Mr. Trump said in a brief telephone call late Wednesday afternoon. Pointing to the indictment of his former campaign chief, Paul Manafort, the president said, “And even if you look at that, there’s not even a mention of Trump in there.”
“It has nothing to do with us,” Mr. Trump said.
He also pushed back against a report published Monday night by The Washington Post, which the president said described him as “angry at everybody.”
“I’m actually not angry at anybody,” Mr. Trump told The Times.
The phone call seemed intended to dispel the impression of a president and a White House under siege. The indictment of Mr. Manafort and his longtime deputy, Rick Gates, on Monday came as little surprise to Mr. Trump or his team, and they were relieved that the charges were not directly related to last year’s campaign. Instead, both were indicted on charges including money laundering, tax evasion and failing to properly disclose lobbying on behalf of foreign governments.