ALEXANDRIA, Virginia -- The defense lawyer for President Donald Trump’s ex-campaign chairman Paul Manafort has sought in a searing cross-examination to undermine the credibility of the U.S. government’s star witness by accusing Rick Gates of stealing millions not only from Manafort but also possibly from Trump’s inauguration committee.
Kevin Downing’s cross-examination of Gates came on August 7, the second day of Gates' testimony in Manafort’s bank fraud and tax evasion trial, which is playing out in a U.S. district court in Alexandria, Virginia, just outside Washington.
Gates has testified that, while working as Manafort’s longtime deputy, he and Manafort committed various financial crimes, mostly stemming from the lucrative work Manafort did between 2010 and 2014 for Ukrainian politicians, including then-President Viktor Yanukovych.
Gates was charged along with Manafort in late 2017, the first charges to come out of Special Counsel Robert Mueller’s investigation into the interactions between Trump associates and Russian officials and agents.
He pleaded guilty earlier this year to conspiracy charges and has been cooperating with prosecutors in hopes of getting a reduced prison sentence.
The 18 charges against Manafort predate the time that he worked for Trump’s presidential election campaign between March and August 2016. Though the charges concern money earned from the work he did in Ukraine for Yanukovych, and his political party, the Party of the Regions, they do not directly deal with Russia, or with questions of Trump aides' dealings with Russian agents.
In his testimony on August 6 and 7, Gates described how he worked with Manafort to hide the amount of U.S. taxes he owed, mainly by classifying loans made from Cypriot shell companies as income.
Gates testified how in 2011, Manafort received payment for his consulting services in Ukraine from an oligarch named Serhiy Lyovochkin, who was closely affiliated with Yanukovych.
According to Gates, Manafort told his bookkeeper to classify Lyovochkin's payment as a loan, which would then reduce Manafort’s U.S. taxes. Gates said it in fact was not a loan and Lyovochkin never made any loans to Manafort.
'Separate, Secret Life'
During his cross-examination of Gates, Downing got Gates to admit that he had stolen hundreds of thousands of dollars from Manafort over the years, in some cases to fund an extramarital affair. Downing called it repeatedly "the separate, secret life of Rick Gates."
While admitting the affair and stealing from Manafort, Gates defended himself.
"After all the lies you’ve told and fraud you’ve committed, you expect this jury to believe you?" Downing asked Gates.
"I’m here to tell the truth. I’ve taken responsibility for my actions. Mr. Manafort had the same path. And I’m here," Gates told the court.
While Manafort helped Yanukovych get elected in 2010, Yanukovych was ousted from power in February 2014, following months of massive street protests. As a result, according to court documents, Manafort’s political work in Ukraine slowed.
Gates said Manafort did some work for Yanukovych’s successor, Petro Poroshenko, though he didn’t specify what, and Poroshenko's office denied that.
Manafort also tried to cobble together clients from a successor party to the Party of the Regions, the Opposition Bloc, he said.
But by 2015, his consulting company had no clients whatsoever, and Manafort was hard up for cash to fund what prosecutors described as a lavish lifestyle with at least six homes for him and his relatives, expensive landscaping, and fine tailored suits.
In August 2015, Manafort was complaining to Gates that his company hadn’t been paid for the political work it did for the Opposition Bloc. So Manafort’s Ukrainian point man, Konstantin Kilimnik, wrote an e-mail to Gates, detailing how he would be getting the Opposition Bloc to pay.
"This is to calm Paul down," Kilimnik wrote to Gates on August 25, 2015.
Manafort became Trump’s campaign manager in June 2016, but then was fired in August of that year, amid revelations of his off-the-books payments from the Ukrainian political figures.
Gates, meanwhile, whom Manafort had hired to work on Trump’s campaign, stayed with the campaign through Trump’s January 2017 inauguration. He was arrested and charged later that year.
Second Trial
Earlier in the trial, prosecutors called a series of witnesses -- including a suit tailor, a home renovator, a real estate agent, and a landscape designer -- seeking to demonstrate what they said was Manafort’s free-spending lifestyle.
Prosecutors have said they intend to complete their arguments as early as next week. Once that happens, Manafort's defense team will present its case to try and convince the jury of his innocence.
If the trial continues quickly, it could wrap up before a second, more consequential trial against Manafort is scheduled to begin in September.
That trial, in a U.S. district court in Washington, D.C., focuses on allegations that Manafort failed to register as a foreign agent when he was working for Yanukovych and his political party.
While Manafort's case is the first that Mueller has brought to trial, the special counsel has charged 31 other people with dozens of offenses, including conspiracy, failure to register as foreign agents, and lying to federal law enforcement.
In one major case, Mueller charged 12 Russian military intelligence officers with hacking and leaking Democratic Party documents in an attempt to sway the 2016 U.S. presidential election.
In addition to Gates, Trump's first national security adviser, Michael Flynn, has pleaded guilty to charges stemming from the Mueller investigation.
Trump has repeatedly attacked the investigation, denying any effort by him or his associates to collude with Russian officials to sway the election.