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Manafort Trial Holds Big Implications for Russia Probe

29 Jul 2018 11:00 am
By Aruna Viswanatha 

The first trial from Special Counsel Robert Mueller's investigation is set to begin Tuesday in Alexandria, Va., in what will serve as a major test of Mr. Mueller's 14-month effort that has overshadowed the Trump presidency.

While Mr. Mueller has been examining Russian interference in the 2016 election -- resulting in charges against 25 Russians and four former advisers to President Donald Trump -- the case against Paul Manafort, Mr. Trump's former campaign chief, will delve into Mr. Manafort's personal finances largely before his work on the campaign.

A conviction would provide Mr. Mueller momentum as he pushes to complete the investigation amid criticism from some Republicans that he is leading a partisan inquiry. An acquittal would give Mr. Mueller's critics ammunition to push for a quick end to the special counsel's operation.

Much is at stake for the president as well, since he has repeatedly dismissed the Russia probe as a "witch hunt." A successful jury trial could blunt such characterizations.

Mr. Manafort also faces a second, related criminal trial in Washington, D.C., after this one, and could face pressure to cooperate with Mr. Mueller, depending on the outcome of the first trial.

Mr. Manafort has pleaded not guilty and denies all of the charges, which include tax fraud, bank fraud and failing to file reports on foreign bank accounts.

Mr. Manafort has argued that he talked to the Federal Bureau of Investigation about many of the allegations in 2014, and believed prosecutors weren't interested in pursuing the case at the time.

Prosecutors have accused Mr. Manafort of not paying taxes on $30 million in income from his work for pro-Russian politicians in Ukraine in the early 2010s. Mr. Manafort is also accused of misleading banks to obtain millions in loans in 2015 and 2016 as his Ukraine income dried up.

A spokesman for Mr. Manafort declined to comment.

Mr. Manafort, who has been in prison since mid-June after prosecutors accused him of trying to influence witness testimony, appeared briefly in court last week in a green prison jumpsuit, blowing a kiss to his wife, who sat behind him.

In its list of exhibits, Mr. Mueller's team has identified 436 pieces of evidence they plan to introduce, including the defendant's emails, his company's financial statements, bank records and photos of purchases he allegedly made with the income at issue.

Prosecutors have said they plan to show the jury dozens of documents related to the purchases, including a $160,000 invoice of two silk rugs from 2010; documents from the Manafort family's 2012 purchases of a $2.8 million Manhattan apartment and a $1.9 million home in Arlington, Va.; and records from $503,500 in landscaping services at Mr. Manafort's Long Island home.

Prosecutor Greg Andres said last week that his team wouldn't mention during trial the question of whether Trump associates colluded with Russia to interfere in the 2016 election. But they would need to briefly address Mr. Manafort's role with the Trump campaign, Mr. Andres told the judge, because it is relevant to one of the alleged bank fraud schemes.

That is because the chairman of a bank that provided Mr. Manafort with $16 million in loans -- even though Mr. Manafort had submitted falsified documents -- extended the loan because he sought, though he didn't obtain, a position with the Trump administration, Mr. Andres said.

The Wall Street Journal has previously identified that individual as Steve Calk at Federal Savings Bank in Chicago. Mr. Calk didn't respond to a message seeking comment.

Mr. Manafort has asked the court to limit prosecutors' use of dozens of emails and other documents from Mr. Manafort's consulting work with former Ukrainian President Viktor Yanukovych and his political party. Mr. Manafort's legal team argued they weren't relevant to the tax and bank fraud charges, and would risk prejudicing and confusing the jury.

U.S. District Judge T.S. Ellis hasn't yet ruled on that request. But he said he would work to limit the trial to the facts at issue and not delve into what he termed as "theater," in what is expected to be one of the most closely watched criminal trials of the year.

"I'm not going to allow this trial to drag on," Judge Ellis said. He later told prospective jurors he expected the trial to last a total of three weeks.

Mr. Manafort joined the Trump campaign in March 2016 and had departed by August.

His longtime business deputy, Richard Gates, pleaded guilty earlier this year to charges related to the Ukraine work and is cooperating with Mr. Mueller. Mr. Gates is expected to testify against Mr. Manafort in what could be one of the more consequential moments of the trial.

Mr. Manafort's defense strategy is likely to revolve around pinning the blame on Mr. Gates and the accountants and attorneys who advised him, legal experts said. He faces more than a decade in prison if convicted.

When jury selection begins this week, Judge Ellis said he wouldn't allow either side to ask potential jurors whom they voted for.

Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
 

(END) Dow Jones Newswires

July 29, 2018 07:00 ET (11:00 GMT)

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