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Manafort has a new scapegoat in his defense against Mueller

Manafort’s decision to go directly after Rick Gates could throw a wrench in the Russia investigation.

by Greg Walters
Aug 1 2018, 2:15pm

Paul Manafort stands accused by prosecutors of overseeing a secret, criminal empire of undeclared riches, built during his days as a high-flying political consultant in Ukraine.

But rather than simply deny how he earned and moved his money, Manafort took a decidedly different defense in court on Tuesday: he blamed his former sidekick, Rick Gates.

Now, the blood-feud between these two men, who both held top jobs in President Trump’s campaign, and whose professional relationship spanned decades and at least three continents, has spilled into a Virginia courthouse. How this drama ends could have major effects on special counsel Robert Mueller’s vast Russian investigation and determine whether Manafort spends the rest of his life in prison.

“Those two men were as tight as you could be,” former Trump communications aide Michael Caputo, who’s known both for years, told VICE News. “They worked overseas for a decade-plus, and they were together for even longer than that. There’s a lot there.”

Manafort’s decision to go directly after Gates could not only alter the outcome of this trial, but throw a wrench in the larger Russia probe, observers told VICE News.

Gates is considered to be one of Mueller's most high-profile and well-informed witnesses. He stayed on at the Trump campaign for months after Manafort left in late summer 2016, and lingered close to the White House in early 2017. He pled guilty to conspiracy and lying to investigators in February. In exchange for leniency, he’s pledged to tell investigators everything he knows. But if Manafort succeeds in branding Gates a liar, his future usefulness to Mueller may be limited, Renato Mariotti, a former federal prosecutor, told VICE News.

“Those two men were as tight as you could be.”

“It’s clear that Gates’ testimony in this trial, for good or bad, will be used against him in subsequent trials,” Mariatti said. “And if the testimony doesn’t go well, not only will the greatest hits from his cross-examination be recycled in future trials, Mueller may even have to reevaluate his usefulness as a witness.”

Intern, Deputy, Enemy

As Manafort’s trial enters its second day in court, there’s little doubt that these two men have a long, rich history each can draw on to hurt the other.

They reportedly first met when Gates, in his early 20s, signed up to be an intern at Manafort’s powerhouse Washington consulting firm, Black, Manafort, Stone, Kelly.

The young Gates failed to make an impression on Roger Stone, the infamous GOP provocateur who partnered with Manafort in the firm before becoming, for a time, one of Trump’s closest advisors.

“If he worked at my firm as an intern in the 1990s, I don't remember him,” Stone told VICE News. “I did not meet Rick Gates until 2016” — when the Trump campaign was in full swing.

But that fateful internship apparently launched a deep partnership with Manafort. A decade later, Gates signed up with Manafort’s new consulting venture, Davis Manafort, and dove into consulting on Ukrainian elections and other projects. Their collaboration turned Ukrainian politics on its head by helping elect longshot presidential candidate Viktor Yanukovych. Their success in Ukraine is now the backdrop for their showdown in court this week.

“This is a classic defense — blame the other guy.”

To Caputo, breaking up that close Manafort-Gates alliance appears to be part of Mueller's plan to penetrate Trump’s inner circle to determine what they really know.

“It’s clear that one of the most important tactics to the investigators is destroying relationships to see what falls out,” Caputo said. “They believe that there is collusion, they suspect there’s evidence between Rick and Paul, so they destroy the relationship to see what falls out. From my perspective, if nothing falls out, they don’t care. And the destruction left in their wake is profound.”

He compared the pair’s falling out to Trump’s scorched-earth relationship with his own former attorney and “fixer,” Michael Cohen, who’s being investigated for possible crimes in the Southern District of New York.

“You see it emerging in the Cohen-Trump relationship now,” Caputo said. He added that he believes no proof of collusion will emerge.

The war on Rick Gates

Manafort’s decision to lay the blame at the feet of a cooperating witness is a common strategy that can help create reasonable doubt in jurors’ minds about a defendant’s guilt, said Jens David Ohlin, Cornell Law Vice Dean and an expert in international criminal law.

“This is a classic defense — blame the other guy,” Ohlin said.

But the case against Manafort is also built on an extensive paper trail, and a list of 35 potential witnesses including people who worked closely with Gates and Manafort in Ukraine, their accountants, and others.

And if Manafort’s plan is to blame Rick Gates for everything, he’ll face awkward questions about his own apparent immense earnings. Prosecutors have introduced evidence suggesting Manafort oversaw transfers of funds directly from offshore accounts to vendors and merchants, and splashed out on flashy, big-ticket items like a $15,000 ostrich jacket and a $21,000 watch.

“The problem with the defense in this case is that it runs up against a very common-sense objection that’s likely to bother the jury: If Gates is the bad guy, why did Manafort get so rich?,” Ohlin said. “I think that’s one reason why the prosecutors want to put Manafort’s extravagant lifestyle — the house, the watch, the car — on display for the jury.”

Manafort’s legal team has responded by signaling a plan to nuke Gates’ credibility. On Tuesday, Manafort’s attorney argued that Gates abused his boss’s trust and fiddled with the firm’s books behind his back.

Manafort’s lawyer, Thomas Zehnle, claimed Gates was to blame for any financial misdeeds in their consulting practice. And he cast Manafort — a man famous in D.C. circles for his political cunning — as a distracted boss who’s tragic flaw was trusting Gates too much.

“We’re primarily here because of one man. That man is Rick Gates,” Zehnle told jurors in the defense’s opening statement, during which Manafort himself perked up from his earlier slouch. “Unfortunately for Mr. Manafort, his trust in Rick Gates was misplaced.”

Zehnle said that Manafort was only paid through offshore shell companies because the Ukrainian oligarchs footing the bill for his political work insisted things be handled that way.

“Rick Gates had his hand in the cookie jar,” Zehnle told the jury. Gates was “lining his pockets” and “paying himself fake bonuses,” he said. And it was Gates, Zehnle said, who had responsibility for coordinating with the bookkeeper and other financial professionals responsible for keeping track of the company’s finances.

The Gates question

Regardless of whom the jury decides to believe in this case, Gates’ name has continued to pop up in other parts of the Russia probe. Hints have emerged that he may hold puzzle pieces to the investigation, beyond the case against Manafort, that haven’t been fully revealed.

Mueller’s team has said Gates told an associate that he knew Konstantin Kilimnik, a translator who worked closely with both Manafort and Gates in Ukraine, had links to Russian military intelligence.

And in a series of recent bewildering statements, Trump’s lawyer, Rudy Giuliani, suggested Gates may have taken part in a meeting in mid-2016 to discuss the Trump campaign’s upcoming sit-down with a Russian lawyer billed as bringing dirt on Hillary Clinton. Giuliani then claimed no such meeting actually took place.

If Gates does have direct knowledge about that June 2016 Trump Tower meeting, or about Kilimnik’s ties to Russian intelligence and the Trump campaign, his use to Mueller could extend far beyond this week’s Manafort trial, observers said. As a result, Mueller's team might not want to let Manafort’s lawyers take a swing at his credibility in cross examination, especially if they don’t have to.

On Wednesday, Mueller’s prosecutors said they might not put Gates on the stand to testify against Manafort at all.

Asked pointedly by Judge T.S. Ellis whether they’ll question Gates, Asonye, the prosecutor, replied: “He may testify in this case — he may not.”

Cover image: Rick Gates, a former campaign official for U.S. President Donald Trump, departs U.S. District Court after he and Trump's former campaign manager Paul Manafort attended a hearing in the first charges stemming from a special counsel investigation of possible Russian meddling in the 2016 presidential election in Washington, U.S., October 30, 2017. REUTERS/Jim Urquhart