Here are excerpts from the indictment followed by analysis by New York Times reporters.
WASHINGTON — In the first charges brought by Robert Mueller, the special counsel, in his investigation into Russia’s interference in the 2016 election, President Donald Trump’s former campaign manager Paul Manafort and his business partner, Rick Gates, have been indicted.
Separately, George Papadopoulos, a former foreign-policy adviser to the campaign, has pleaded guilty to lying to federal investigators about meetings in March and April 2016 with a Russian agent who promised “dirt” on Hillary Clinton.
The charges against Manafort and Gates center on a series of criminal allegations related to their lobbying for a pro-Russia government of Ukraine, not to Trump or the campaign. It is widely believed that Mueller is hoping to pressure Manafort into providing information about the central subject of his investigation.
Here are excerpts from the indictment followed by analysis by New York Times reporters.
Summary of alleged scheme
More on the Russia investigation
- With first charges, Mueller sends warning to Trump, aides
- Lawmakers to Trump: Leave Mueller alone
- Trump blasts former aide Papadopoulos as 'liar'
- Tech companies find more evidence of Russian activity
- Fact check: Trump plays defense in investigation
- Analysis: Mueller's moves send a powerful message
- Court documents show Manafort’s spending on fancy suits, cars and decor
- Read the indictment »
- Read Papadopoulos' statement of offense »
“Defendants PAUL J. MANAFORT, JR., (MANAFORT) and RICHARD W. GATES III (GATES) served for years as political consultants and lobbyists. Between at least 2006 and 2015, MANAFORT and GATES acted as unregistered agents of the Government of Ukraine, the Party of Regions (a Ukrainian political party whose leader Viktor Yanukovych was President from 2010 to 2014), Yanukovych, and the Opposition Bloc (a successor to the Party of Regions that formed in 2014 when Yanukovych fled to Russia). MANAFORT and GATES generated tens of millions of dollars in income as a result of their Ukraine work. In order to hide Ukraine payments from United States authorities, from approximately 2006 through at least 2016, MANAFORT and GATES laundered the money through scores of United States and foreign corporations, partnerships and bank accounts.”
Analysis: The opening paragraph of the indictment lays out a narrative framework for understanding the complex details subsequent pages delve into. In brief, prosecutors contend that Manafort and Gates violated a law that requires Americans to register and disclose activities undertaken as agents of a foreign power, and then that they took steps to launder tens of millions of dollars in income from that work and to evade paying taxes on it.
“In fact, MANAFORT and GATES had: selected Company A and Company B; engaged in weekly scheduled calls and frequent emails with Company A and Company B to provide them directions as to specific lobbying steps that should be taken; sought and received detailed oral and written reports from these firms on the lobbying work they had performed; communicated with Yanukovych to brief him on their lobbying efforts; both congratulated and reprimanded Company A and Company B on their lobbying work; communicated directly with United States officials in connection with this work; and paid the lobbying firms over $2 million from offshore accounts they controlled, among other things. In addition, court-authorized searches of MANAFORT and GATES’ DMI email accounts and MANAFORT’S Virginia residence in July 2017 revealed numerous documents, including documents related to lobbying, which were more than thirty-days old at the time of the November 2016 letter to the Department of Justice.”
Analysis: In July, Mueller’s team and the FBI executed an unusual search warrant at Manafort’s home in Virginia in which, rather than knocking on his front door, they picked the lock and burst inside, seizing documents and copying computer files. Such an unannounced intrusion is permitted only when prosecutors convince a judge that a defendant may destroy evidence if given any warning.
The indictment suggests what was behind the raid. After questions arose about whether Manafort had failed to register as a foreign agent for Ukraine, his firm denied the allegations but also told federal investigators in November 2016 that they had no records about the work because their policy is to destroy emails after 30 days.
This line in the indictment shows what prosecutors found in that raid: documents related to his lobbying for Ukraine that Manafort’s lobbying company had told federal investigators did not exist — one of the bases for charges of making false statements.
“Furthermore, in each of MANAFORT’s tax filings for 2008 through 2014, MANAFORT represented falsely that he did not have authority over any foreign bank accounts. MANAFORT and GATES had repeatedly and falsely represented in writing to MANAFORT’s tax preparer that MANAFORT had no authority over foreign bank accounts, knowing that such false representations would result in false MANAFORT tax filings. For instance, on October 4, 2011, MANAFORT’S tax preparer asked MANAFORT in writing: ‘At any time during 2010, did you (or your wife or children) have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account or other financial account?’ On the same day, MANAFORT falsely responded ‘NO.’ MANAFORT responded the same way as recently as October 3, 2016, when MANAFORT’S tax preparer again emailed the question in connection with the preparation of MANAFORT’s tax returns: ‘Foreign bank accounts etc.?’ MANAFORT responded on or about the same day: ‘NONE.’”
Analysis: Americans who hold assets in offshore bank accounts are required to disclose information about those holdings to the federal government, including for tax purposes. The indictment alleges that Manafort and Gates violated those laws.
“After MANAFORT used his offshore accounts to purchase real estate in the United States, he took out mortgages on the properties, thereby allowing MANAFORT to have the benefits of liquid income without paying taxes on it. Further, MANAFORT defrauded the banks that loaned him the money so that he could withdraw more money at a cheaper rate than he otherwise would have been permitted.”
Analysis: The indictment shows how the investigators’ scrutiny of Manafort’s financial dealings helped them uncover additional alleged offenses that resulted in charges. For example, Manafort “used his hidden overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income,” according to the indictment, by having his overseas entities buy real estate and then taking out mortgages on those properties, freeing up cash.
The indictment details several such transactions in which Manafort is accused of falsely telling the bank he was either living in the properties or was using the borrowed funds for construction, thereby gaining access to a lower interest rate.
“From in or about and between 2006 and 2017, both dates being approximate and inclusive, in the District of Columbia and elsewhere, the defendants PAUL J. MANAFORT JR., and RICHARD W. GATES III, together with others, knowingly and intentionally conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions of a government agency, namely the Department of Justice and the Department of the Treasury, and to commit offenses against the United States, to wit, the violations of law charged in Counts Three through Six and Ten through Twelve.”
Analysis: The first charge against Manafort and Gates is conspiracy, a powerful tool used by prosecutors. Two people are guilty of the crime of conspiracy if they agreed to commit a crime and took any step toward that goal. Conspiracy charges also permit prosecutors to hold each defendant responsible for the actions of the others within a plot.
“(a) transport, transmit, and transfer monetary instruments and funds from places outside the United States to and through places in the United States and from places in the United States to and through places outside the United States, with the intent to promote the carrying on of specified unlawful activity, to wit: a felony violation of the FARA, in violation of Title 22, United States Code, Sections 612 and 618 (the ‘Specified Unlawful Activity’), contrary to Title 18, United States Code, Section 1956(a) (2)(A); and
(b) conduct financial transactions, affecting interstate and foreign commerce, knowing that the property involved in the financial transactions would represent the proceeds of some form of unlawful activity, and the transactions in fact would involve the proceeds of Specified Unlawful Activity, knowing that such financial transactions were designed in whole and in part (i) to engage in conduct constituting a violation of sections 7201 and 7206 of the Internal Revenue Code of 1986, and (ii) to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the Specified Unlawful Activity, contrary to Title 18, United States Code, Section 1956(a) (1)(A) (ii) and 1956(a) (1)(B)(i).”
Analysis: Money-laundering charges require that the financial transactions involved be designed to conceal that funds came from an underlying unlawful activity. Typically, such charges are pegged to a crime like drug trafficking. Here, prosecutors say, the underlying activity is the failure by Manafort and Gates to register as a foreign agent while conducting lobbying activities for Ukraine that were otherwise lawful in and of themselves. That is an aggressive move by Mueller’s team.
“52. Pursuant to Fed. R. Crim, P. 32.2, notice is hereby given to the defendants that the United States will seek forfeiture as part of any sentence in accordance with Title 18, United States Code, Sections 981(a) (1)(C) and 982(a) (1) and(a) (2), and Title 28, United States Code, Section 2461(c), in the event of the defendants’ convictions under Count Two of this Indictment.”
Analysis: As part of the pressure Mueller and his team are putting on Manafort, they are signaling in this indictment that if he is convicted of various charges, the government will seek to seize various properties and a life-insurance policy linked to those charges — or any other assets he may have, if those are no longer available. This gives Manafort an additional incentive to cooperate as part of a plea deal that could allow his family to keep some of those assets.