His defense team, which said the U.S. attorney’s office in Manhattan had declined to pursue Craig, called the Trump Justice Department’s decision to move ahead with a prosecution in Washington “a disgrace.”
“The question you need to ask isn’t why this jury acquitted Craig, but why the Department of Justice brought this case against an innocent man in the first place,” Craig attorney William Taylor said, adding, “It’s a tragedy. It’s a disgrace; I’m glad it’s over.”
Craig was the first prominent Democrat charged in an investigation spun off from special counsel Robert S. Mueller III’s Russia probe, and his defenders have long complained he was prosecuted after blunt attacks by President Trump and his supporters that the Justice Department was unduly targeting Republicans.
But Justice Department officials have emphasized in recent years they are stepping up enforcement of a long-neglected foreign lobbying disclosure law, the Foreign Agents Registration Act (FARA), which requires Americans who are being paid by foreign governments or politicians to influence U.S. policy or opinion to register with the Justice Department.
In March, a prosecutor who had been detailed to the Mueller team was tapped to lead the department’s FARA enforcement unit, and the department’s “zero-tolerance” crackdown toward nondisclosure has triggered a 30 percent increase in registrations.
Spokesmen for the Justice Department and U.S. Attorney for the District of Columbia Jessie K. Liu did not immediately respond to requests for comment.
The acquittal marks a setback for the Justice Department’s crackdown on foreign lobbying in the United States, exposing flaws in a difficult prosecution of events from 2012 that was handed off among several investigative offices before Craig’s April indictment.
“While I am sure the government is not happy with the outcome given all of its work, it was a tough case to prove beyond a reasonable doubt,” said Thomas J. Spulak, a partner at the law firm King & Spalding who advises on lobbying compliance. But, he said, prosecutors put forward a strong case, adding, “Who would want to go through what Mr. Craig has experienced? And it may cause Congress to examine the statute and, where necessary, make changes to promote compliance.”
Before Craig’s trial began, a judge dismissed a charge alleging that Craig made false statements under FARA, citing a lack of clarity in the law. She allowed his trial to proceed on a general false statements charge.
Several Washington attorneys representing foreign governments and former Justice Department officials cautioned that even a slam-dunk acquittal did not mean the government acted recklessly or in bad faith — or that it would lead to a passive stance.
How those forces will play out remains to be seen.
In other work involving longtime political players, the Justice Department also has been investigating — but has not charged — Democratic lobbyist Tony Podesta and former Republican congressman Vin Weber for their work alongside Craig in Ukraine.
Neither Weber or Podesta responded to requests for comment on the Craig verdict. Representatives for both men have said in the past that the two cooperated with authorities investigating possible FARA violations and that both took pains to make sure they were following the rules mandating disclosure of their lobbying.
Craig’s trial revealed the involvement of a half-dozen powerful Washington public relations, lobbying, consulting and law firms in the project to rehabilitate Ukraine’s battered image in the West.
With the direct FARA charge dropped, Craig was left facing one felony count of making false statements to investigators trying to determine whether he and his law firm, Skadden, Arps, Slate, Meagher & Flom, should have registered under the law. The central issue was Craig’s outreach on Dec. 11, 2012, to the New York Times regarding coverage of the law firm’s upcoming report reviewing the jailing of Yulia Tymoshenko, a political rival to Ukrainian President Viktor Yanukovych.
The report was commissioned by the Ukrainian government in a project led by Paul Manafort, a political adviser to Yanukovych. A wealthy Ukrainian businessman, Viktor Pinchuk, secretly paid Skadden $4.15 million for work on the report, testimony showed.
The charge against Craig turned on whether Craig was a knowing and willful participant in the public relations effort directed by Manafort — a onetime chairman for Donald Trump’s 2016 campaign and longtime consultant — and tried to hide that from investigators.
Craig took the stand in his own defense, saying he did not lie to investigators because he had reached out to Times journalist David Sanger to try to push back against what Craig saw as Ukraine’s misleading spin on the Skadden report. Craig said that because he was pushing back against the Ukrainian government’s take, he didn’t regard himself as working in public relations on its behalf and hence did not need to register.
Ukraine’s spin was suggesting the Skadden report exonerated Ukraine’s treatment of Tymoshenko, Craig told jurors, which he could not abide.
Prosecutors asserted that Craig did not want to register because disclosure of his work with Ukraine could cast doubt on his and Skadden’s independence and impede the ability of him and his colleagues to quickly return to government service.
Two members of Craig’s jury said in interviews after the verdict that although a few jurors were “deeply disturbed” that Craig was not completely forthright in his actions and statements, the jury unanimously concluded there was insufficient evidence to support a conviction. They could not reach a conviction, according to the two jurors, because jury instructions limited them to consider only actions Craig took near the end of the FARA unit’s investigation, after Oct. 3, 2013, 10 months after Skadden issued its report.
Those actions came down to a letter written by Craig to the Justice Department’s FARA unit on Oct. 11, 2013, summarizing a 45-minute meeting — for which no notes exist, jurors were told — at which the government alleged Craig lied or omitted facts in successfully persuading FARA officials to reverse their position that he was required to register.
“There were several people who were very disturbed by his behavior prior to October 3, but there were a number of jurors, including several of the older jurors, who understand that life is a complicated thing,” said juror Michael G. Meyer, 60, who works with a federal contractor that supports medical and vaccine trials.
Meyer said he personally found Craig “a very credible witness,” and that while he never discussed the sentiment with others, he was “infuriated” that the government spent its resources prosecuting Craig instead of others scrutinized in the Mueller report.
However, juror Willie Wilson, 28, a commodities broker, said he initially thought Craig was guilty. “I was not of the opinion that he’s a bad person, but he walked up to the line and very well may have crossed it. There was evidence he did lie there prior to Oct. 3, 2013, however, that was not part of the specific charge”
Skadden in January reached a settlement with the Justice Department, admitting it should have registered for its work in 2012 and 2013, and agreed to turn over $4.6 million it made for its work with Ukraine in exchange for facing no criminal charges. In its settlement, Skadden agreed that an initial finding by the Justice Department in 2014 that the firm did not need to register came after the agency relied on “false and misleading oral and written statements” made by Craig.
The trial for Craig was “an unusual case with regard to the fact pattern,” said Josh Rosenstein, who advises clients on FARA compliance. “But if you pull back the lens a little, you see the latest in a string of enforcement activities, coupled with a restructuring of the FARA unit and a recommitment to using FARA as part of the Department of Justice’s national security apparatus. And I don’t see that changing.”
Craig, President Barack Obama’s first White House counsel and impeachment counsel for former Yale Law School classmate President Bill Clinton, began his career as a civil rights worker in Mississippi and tutor in Harlem. A longtime partner at the Williams & Connolly law firm as a protege of founder Edward Bennett Williams, he was close to the Clintons, and represented such global figures as Soviet dissident Aleksandr Solzhenitsyn and former U.N. secretary general Kofi Annan. After leaving the Obama administration, he joined Skadden in January 2010 before retiring last year.
Tom Hamburger contributed to this report.