The indictment against Donald Trump's former campaign chief, Paul Manafort, and a longtime business associate alleged the two carried out an elaborate scheme that involved the use of a little-known outfit to mask years of lobbying on behalf of Ukraine's former president, his pro-Russia political party, and the Ukrainian government.
Manafort and his former business partner, Rick Gates, are charged in a 12-count indictment including conspiracy, money laundering, and making false statements. The two could faces decades in prison if convicted, and both have pleaded not guilty to all charges.
The allegations do not include collusion with Russia during the presidential campaign.
The indictment was approved by a federal grand jury on Friday and unsealed after Manafort and his right-hand man and former Trump campaign adviser, Gates, turned themselves in to the FBI. It represents the first charges brought by Special Counsel Robert Mueller, who is looking into allegations of Russian meddling in the 2016 U.S. presidential election.
Manafort's consulting work for Ukraine started in 2006 when the Republican political strategist was retained by Ukraine's pro-Russian Party of Regions to "advance its interests" in Ukraine. In 2010, Viktor Yanukovych, the party's candidate, was elected president. Four years later, he fled to Russia following popular protests.
Eight-year lobbying campaign
The indictment alleges that during the eight-year period, Manafort and Gates "engaged in a multimillion-dollar lobbying campaign" in the U.S. on behalf of Yanukovych, the Party of Regions, and the Ukrainian government. The two hid their activities from U.S. authorities and used offshore accounts to launder millions of dollars in Ukrainian payments.
As part of their effort to mask their lobbying from U.S. authorities, the pair used a little-known outfit called the European Center for Modern Ukraine. The Brussels-based outfit called itself "an advocate for enhancing EU-Ukrainian relations" but in reality served as "a mouthpiece" for Yanukovych and his Party of Regions, according to the indictment. Manafort and Gates used the nonprofit to carry out lobbying and public relations campaigns, according to court records.
Manafort and Gates then hired two Washington, D.C., firms to lobby members of Congress about Ukrainian sanctions, the "validity" of Ukraine elections, and the "propriety" of Yanukovych's imprisonment of his political rival, former prime minister Yulia Tymoshenko.
"Manafort and Gates did so without registering and providing the disclosures required by law," the indictment alleges.
The two lobbying firms are Podesta Group Inc. and Mercury LLC, the Associated Press reported last year. The Podesta Group is headed by Tony Podesta, the brother of John Podesta, who was campaign chairman for Hillary Clinton. Politico reported on Monday that Tony Podesta was stepping down from the firm.
To conceal the lobbying effort, Manafort and Gates allegedly arranged for the two lobbying firms to be ostensibly working for the European Center for Modern Ukraine, which in fact was "under the ultimate direction" of Yanukovych, the Ukrainian government and the Party of the Regions, according to the indictment.
Manafort and Gates are also accused of using their offshore accounts to secretly pay $4 million for a report about Tymoshenko's trial commissioned by the Ukrainian government.
Ties to Trump
Manafort and Gates joined the Trump campaign in March 2006. Gates was later promoted as deputy campaign manager and Manafort served as campaign chairman. He was fired in August after reports of his lobbying for pro-Russia interests in Ukraine.
The Department of Justice began looking into Manafort's and Gates' lobbying for Ukraine last year. The indictment says the two partners told investigators in 2016 that they merely "provided an introduction" between the Brussels center and the Washington lobbying firms, and that their efforts "did not include meetings and outreach within the United States."
In fact, according to the indictment, Manafort and Gates were deeply involved in the scheme. They had weekly phone calls and email communications with officials of the two companies, directed them on "specific lobbying steps," received regular reports from them, and updated Yanukovych about the lobbying activities. For their efforts between 2012 and 2014, the firms were paid $2 million.
The charges against Manafort and Gates include conspiracy to defraud the United States, money laundering, failure to report foreign bank holdings to the U.S. Treasury Department, lobbying for a foreign government without registering with the Justice Department, and making false statements about their lobbying efforts.
Manafort and Gates are accused of serving as unregistered foreign agents of Ukrainian interests in violation of Department of Justice registration requirements.
Between them, Manafort and Gates controlled 17 domestic entities, 12 Cyprus-based entities and 3 other foreign entities, according to the indictment. In all, $75 million passed through the offshore accounts. Manafort is alleged to have laundered more than $18 million. Gates is accused of laundering more than $3 million from offshore accounts.