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From six homes to a city jail: Paul Manafort, who redefined lobbying, faces trial

Before he joined the Trump campaign, Paul Manafort made a name for himself in the D.C. lobbying world, but his past caught up with him. (Video: Dalton Bennett, Jon Gerberg, Jesse Mesner-Hage/The Washington Post)

Two years ago, Paul Manafort was on top of the world.

He could stay in condos at Manhattan’s Trump Tower or along Alexandria’s waterfront, at his Hamptons compound or his mansion inside a gated Palm Beach, Fla., country club. His suits were custom-made by expensive tailors. He was leading the campaign of the next president of the United States.

The Manafort trial: What you need to know

Now, he wears a green jumpsuit and sleeps on a bed of concrete in Alexandria’s jail. The lights come on at 5 a.m.; it’s always cold and the food is bland. He is mostly alone, in protective custody.

On Tuesday, when his trial on bank and tax fraud charges begins in federal court in Alexandria, prosecutors working with special counsel Robert S. Mueller III will seek to keep him behind bars.

For the first time, an investigation into Russian election interference that has operated largely behind closed doors will reveal some of its work. A conviction on the 18 counts brought against Manafort would add credibility to Mueller’s ongoing inquiry. Failure would underline the criticism he has received from President Trump and others who suggest that Mueller’s operation is a partisan “witch hunt.”

Since he was appointed in May 2017, Mueller has charged 32 people, including 26 Russians and several people involved in the Trump campaign. Five people, including Manafort’s onetime business partner Richard Gates, have pleaded guilty. Manafort is the first to go to trial, and he faces a second court battle on related charges in D.C. federal court this fall.

Even the presiding judge in Virginia, T.S. Ellis III, has said the special counsel is interested in Manafort only for how he might incriminate Trump.

Who has been charged in the Russia probe and why

The case against Manafort is, at its core, about work he did years before the Trump campaign for a Russia-friendly Ukrainian political party. He is accused of failing to pay taxes on millions he made from that work, then lying to get loans when the cash stopped coming in.

But prosecutors plan to expose Manafort’s extensive dealing with Russia-linked Ukrainian oligarchs and political personalities, some of whom stayed in touch with him during his work with the Trump campaign.

Manafort is seeking to limit such evidence, which he fears will turn jurors against him.

Over a 40-year career, Manafort, 69, redefined and expanded Washington’s influence industry both domestically and internationally, parlaying successful campaigns into lobbying opportunities.

He gained respect early in his career by helping Gerald R. Ford survive the contested 1976 Republican National Convention — and then a reputation for cunning when he quickly shifted his loyalty to the president’s ascendant challenger, Ronald Reagan.

In 1980, his newly formed lobbying firm, with partners Charlie Black and Roger Stone, made its mark consulting for Reagan.

Manafort handled most of the firm’s foreign clients, and some leaders had reputations so dubious that one nonprofit group cited the firm as part of a “torturers’ lobby” for taking on violent dictators in Nigeria, the Philippines and Angola.

With his power suits, carefully coifed hair and membership in opulent clubs, such as the exclusive Grand Havana Room in New York, Manafort presented a carefully curated picture of wealth, power and, as his former French political and military clients might say, “savoir faire.”

But by the mid-2000s, there were signs that his consulting ­career had slumped, and at times his finances appeared to be shaky. It was in Ukraine that he revived both — in ways prosecutors say violated the law. Out of $75 million that flowed to Manafort-controlled offshore accounts over 10 years, more than $18 million was “laundered,” prosecutors allege, with income concealed from the U.S. government that they say was used to pay for the former lobbyist’s extravagant tastes.

Prosecutors said in court documents that they plan to prove more than $60 million came to Manafort as payment for his Ukraine work.

“I know Paul is a very good guy. And during the years I worked with him . . . an honest person. And a person who was a good friend to people,” Black said in a recent interview. He said he hasn’t followed Manafort’s business activities closely since 1995. “So I do not know if the charges against him are true,” he said. “I hope he’s innocent. But I don’t know.”

Manafort claimed that he had “no interaction with oligarchs for business” while taking millions from businessmen involved in a suspect Ukrainian political party, according to law enforcement documents. He funneled some of that money through accounts in Cyprus to hide it from the U.S. government, prosecutors say.

One of Manafort’s first contacts in the region was a Russian aluminum magnate with ties to the Kremlin, Oleg Deripaska. Deripaska introduced Manafort to Rinat Akhmetov, a coal and steel baron funding Ukraine’s Russia-backed Party of Regions.

Party leader Viktor Yanukovych’s victory in a 2004 election was deemed fraudulent, street protests ensued and he lost a redo of the election. Manafort’s firm was among those from the West hired to give Yanukovych and the party, in the words of a U.S. ambassador, an “extreme makeover.”

Manafort told Akhmetov in a 2005 memo included in court files that Yanukovych “must be replaced. He is an impenetrable obstacle to success.” The Party of Regions, he said, was supported only by people of Russian ethnicity and only because of patronage: “It has never been held together by an ideological philosophy. It has always been opportunistic.”

Yet Manafort managed to, in his own words, “out-reform the reformers” and rebrand Yanukovych as an anti-corruption, pro-Western politician. Meanwhile, he sought to do business with Yanukovych’s wealthy allies.

Deripaska paid millions to Manafort’s firm for what were billed as private-equity investments in Russia and Ukraine. In 2014, the oligarch tried to get his money back, suing Manafort and his partners.

Manafort tried to develop a 65-story Manhattan luxury apartment building in 2008 with financial support from another Ukrainian businessman, Dmitry Firtash, according to court papers.

In the end, the apartment project fell through as Firtash withdrew and the economy plunged into recession.

Each year from 2009 to 2014, Manafort reported less than $200,000 and sometimes less than $50,000 in income from foreign sources, according to court documents. In reality, prosecutors say, he was raking in millions. He claimed to have no foreign bank accounts; prosecutors say he controlled 16 offshore accounts, mostly in Cyprus, that he used to pay his bills.

Those bills were substantial.

He spent $6.4 million on real estate in New York and Virginia, an additional $7.3 million on home renovations and $820,000 on landscaping, prosecutors said in court documents. They said he paid $2 million for rugs in Virginia and antiques in New York. Nearly $1.4 million went to clothes at New York custom suitmaker Alan Couture and Beverly Hills designer House of Bijan, including a $21,000 Bijan “Royal Way” watch. (Bijan’s slogan: “The most expensive in the world.”) For three Range Rovers and a ­Mercedes-Benz, $300,000.

Prosecutors are planning to ­display photos of many of his extravagant purchases at trial, including the waterfall at one home and the putting green at another. Their potential witnesses include a ­Mercedes-Benz dealer and New York Yankees season ticket salesman.

Even as the millions came in, prosecutors say Manafort was desperately shuffling loans to keep his properties out of foreclosure. They are prepared to display a dizzying parade of financial documents and email conversations about Manafort’s loans and mortgages.

One lender’s employee told FBI agents that she thought it was strange that her firm was willing to lend Manafort $3.5 million, given his debts and past default. He got a $16 million loan only because the bank’s chairman, Steve Calk, wanted a job with Trump, according to the special counsel.

Manafort was hired by the Trump campaign in March 2016, promoted to chairman in May and stepped down in August after reports about his Ukraine work surfaced.

“With Paul Manafort, who really is a nice man, you look at what’s going on, it’s like Al Capone,” the president said in a recent Fox News interview, comparing the prosecution strategy to the one used to take down the murderous gangster on tax evasion charges.

“It’s just a sad thing,” Trump added.

Matt Zapotosky, Jon Gerberg and Jesse Mesner-Hage contributed to this report.

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