Paul Manafort, President Trump’s onetime campaign chairman, is on trial in federal court in Alexandria on bank and tax fraud charges. Prosecutors allege he failed to pay taxes on millions he made from his work for a Russia-friendly Ukrainian political party, then lied to get loans when the cash stopped coming in.
The case is being prosecuted by the special counsel investigating Russian interference in the 2016 U.S. presidential election. Here is what happened on the trial’s first day.
- A jury of six men and six women was selected.
- The government presented its opening statement, accusing Manafort of failing to pay taxes on millions of dollars he earned working for a pro-Russia political candidate in Ukraine and using the money to fund a lavish lifestyle, including purchasing a $15,000 jacket “made from an ostrich.”
- Manafort’s defense sought to place the blame on his former business partner, Richard Gates, who they said embezzled money from Manafort.
- Prosecutors called their first witness, Tad Devine, who was Bernie Sanders’s chief strategist in the 2016 election.
5:47 p.m.: Day one of the trial concludes
Defense attorney Richard Westling began his cross examination of Tad Devine by asking what he thought of Paul Manafort. Devine said he thought highly of the work Manafort did as a political consultant. “Paul worked harder than anybody,” Devine testified. “There were emails sent through the night.”
Devine agreed with Westling that you could make a lot of money as a political consultant “sometimes.”
On what is known as a “redirect,” with prosecutors again asking the questions, Devine testified that he had no bank accounts in Cyprus. Prosecutor Greg Andres had asked the question to highlight the difference between the Democratic strategist and his boss in Ukraine.
Outside court, Devine declined to comment, saying “Paul deserves a fair trial.”
That concluded the first day of the trial. Prosecutors indicated the first witness Wednesday will be Daniel Rabin, another political consultant who worked with Manafort in Ukraine, and an unnamed FBI agent. The proceedings start at 9:30 a.m.
5:36 p.m.: Witness: Manafort sought work for current Ukrainian president after Yanukovych’s ouster
Tad Devine illuminated for jurors the work Manafort sought after then-President Victor Yanukovych fled to Russia in 2014 after widespread protests. He said that in 2014, Richard Gates asked him to come and meet with former Party of Regions members starting to start a new political party called the Party of Development. It was for those meetings, according to court exhibits, that Devine charged Manafort’s firm $10,000 a day.
That same year, Devine said Gates tried to recruit him to work for another politician, current President Petro Poroshenko. Poroshenko, who made billions in the chocolate industry, first won election as a pro-European, anti-corruption candidate, after Yanukovych’s outser in 2014.
It’s not clear whether Gates and Manafort were hired by Poroshenko. “They were trying to put it together,” Devine said. He added that he did not work on the project.
5:26 p.m.: Witness: Manafort’s team brought American-style politics to Ukraine
Tad Devine described to the jury how Paul Manafort’s team brought American politics to Ukraine, including professional polling and advertising, a team of advance staffers, and people to monitor the voting process itself. When Viktor Yanukovych won the presidential race in February 2010, it was Devine who wrote his victory night speech.
That night, Devine and Manafort exchanged congratulatory notes, with Devine offering especially complimentary comments on Manafort’s work. Devine said he told Manafort that he had brought “tremendous discipline” to Yanukovych’s effort. He explained to the jury that campaigns often go awry when they go off message. But the Ukrainian’s campaign “delivered the message with numbing repetition,” thanks to Manafort.
Devine testified that Manafort had explained to him where the money for the campaign had come from: Ukrainian businessman Rinat Akhmetov.
“They would call him an oligarch,” Devine said, explaining that his wealth totaled in the billions and that he was the Party of Regions’ primary supporter. Manafort, he said, knew Akhmetov well.
5:22 p.m.: ‘Paul was in charge’: Witness describes how Gates answered to Manafort during work in Ukraine
Tad Devine described the campaign operation he became a part for the 2009-2010 election. He said he was impressed with Paul Manafort’s operation and that Manafort maintained a good relationship with his patron, pro-Russia political candidate Viktor Yanukovych.
“It was a very close relationship,” Devine said.
Devine said he was brought on Yanukovych’s campaign to produce TV commercials and write speeches, among other activities. Devine was to be paid $500,000 and $100,000 if Yanukovych won the presidential election, which he ultimately did. Devine testified he was paid the full amount.
While working on the campaign, Devine met Richard Gates and other players around Manafort, including Konstantin Kilimnik, who worked as a translator. The special counsel said in court documents Kilimnik has ties to Russian intelligence.
Devine said Manafort was clearly the boss in his relationship with his partner, Gates.
“Paul was in charge,” Devine said. “Rick worked for Paul.” That is important because Manafort’s defense attorneys have sought to put the blame on Gates for what prosecutors say was fraud directed by Manafort.
Devine said Manafort hired a range of other campaign consultants from the United States, including pollster Tony Fabrizio, who also worked on Donald Trump’s presidential campaign.
5:04 p.m.: Devine describes how he came to work with Manafort in Ukraine
Tad Devine, who was Bernie Sanders’s chief strategist in the 2016 election, explained to jurors how he came to work with Paul Manafort in Ukraine. He said his then-partner, Mike Donilon, was contacted by Manafort’s then-partner, Richard Gates, in 2005 about working for the Party of Regions, a pro-Russia political party in Ukraine.
Devine said he has done work in nine countries, and at the time was coming off an international campaign. Donilon, Devine said, was busy with a domestic project, so Devine took the lead and went to Kiev.
“Even though I’m not familiar with the culture or other things in a country, I’m very familiar with campaigns,” Devine said, adding that he specialized in television ads.
Devine said he worked in Ukraine from 2005 to 2010 and returned briefly for a project in 2014. “It was an incredible operation,” he said of his first campaign there. Manafort had hired great people, he said, and had “substantial resources … I was really impressed by him.”
On the importance of financial backing, he said, “If you don’t have a lot of resources, how can you win?”
Devine said he learned from talking to people on his first trip that there had been “a lot of controversy” in Ukraine, including a revolution that forced Viktor Yanukovych, who was part of the Party of Regions, from power.
But he said people “believed Yanukovych had moved on and lost a lot of the people with him” who were controversial, that it was “a new election and a new time.” Yanukovych’s “standing was low,” Devine said, and he was seen as “part of the past.”
Yanukovych became “part of the future” — he was elected prime minister in 2006 — because of the “excellent campaign that Paul ran,” Devine said.
Devine described his relationship with Manafort as “friendly” and said he handed over many documents earlier this year in response to a subpoena. Devine’s testimony is important because it is the work in Ukraine that prosecutors say funded Manafort’s lavish lifestyle. They say Manafort did not appropriately report or pay taxes what he earned overseas, and when Yanukovych was forced from power, Manafort’s money flow was cut off, prompting some of his later bank fraud.
The government has called its first witness: Tad Devine, the architect of Bernie Sanders’s presidential campaign. Devine also worked closely with Paul Manafort as a political consultant in Ukraine, a striking demonstration of how U.S. political consultants from across the spectrum take their expertise overseas, where they earn big bucks advising foreign candidates.
He is likely to lay out exactly what Manafort was doing during his years in Ukraine.
4:24 p.m.: Defense finishes opening statement
Zehnle returned to Gates in the final section of his opening statement, re-emphasizing many of the same themes he already had tried to convey to jurors. Manafort misplaced his trust in Gates, Zehnle said, and Manafort’s partner essentially cheated Manafort, who was busy running political campaigns and doing consulting work in Ukraine.
Gates was supposed to be keeping track of the money that was flowing in and working with professionals to ensure the income was reported correctly, but instead manipulated the situation to “line his own pockets,” Zehnle said.
“Rick Gates kept his name on the Cyprus account so he could control the money,” Zehnle said.
Zehnle said that prosecutors would try to make their case by trotting out the luxurious lifestyle that Manafort’s work had afforded him, but that was not proof that a crime had actually occurred.
“Paul Manafort travels in circles many people will never know and got handsomely rewarded for it,” Zehnle said.
He said his client lived a life “most people could only dream of,” Zehnle added.
Zehnle implored the jury not to be dazzled by expensive tailored suits, Range Rovers, sports tickets and other luxury items, saying they had seem them before. He then returned one final time to Gates.
“Money is coming in fast, and it was a lot,” Zehnle said. “Paul Manafort was trusting Rick Gates was keeping track of it.”
Zehnle said Manafort was open with the banks about why he was seeking loans. Despite what prosecutors said about Manafort falsifying information, Zehnle said the banks were ultimately given all the documentation they requested before they made the loans.
4:11 p.m.: Defense accuses Gates of embezzling from Manafort
Defense attorney Thomas Zehnle returned to the topic of Richard Gates repeatedly, saying Manafort’s one time protege and partner had made a deal to lie about Manafort’s actions to hide his own wrongdoing. Zehnle said Gates had even lied to federal investigators in the process of negotiating his plea deal.
Notably, Zehnle also for the first time accused Gates of embezzling millions of dollars from Manafort’s business and then working to hide the income.
“Rick Gates had his hand in the cookie jar and he couldn’t take the risk that his boss might find out,” Zehnle said.
Other people involved in Manafort’s finances — bookkeepers and accountants — were not talking to one another as they should have, Zehnle said, because Gates kept them from doing so.
A attorney for Gates did not return messages seeking comment.
Zehnle said government witnesses would back up Manafort’s account. Amanda Metzler, for example, was the in-house bookkeeper at Manafort’s company and gave information to their tax accountants. “She knew about offshore companies; none of this was hidden from her,” Zehnle said. “It was open and it was transparent.”
Zehnle said the business was composed of “a very small staff generating large revenues,” and the finances were “complicated.” He said Gates handled “income, expenses, loans and the like … Rick Gates was the contact employee for all the day to day.”
The firm reported $92 million in income from 2005 to 2015, Zehnle said, and Manafort alone reported $30 million in that time period.
4 p.m.: Defense says Manafort never intentionally deceived the IRS
Defense attorney Thomas Zehnle said Paul Manfort’s unusual financial arrangements, including bank accounts in Cyprus, came at the behest of the people in Ukraine who were funding Manafort’s work. Zehnle said Manafort never intentionally deceived the IRS about his income, but instead did not realize he needed to file certain forms and make certain declarations.
“This is not a case where someone flew to Switzerland and stashed money in an account,” Zehnle said.
Zehnle said that, four years ago, Manafort willingly sat down with FBI agents who were investigating the misuse of funds in Ukraine. He said the real reason the special counsel was pursuing the case was because of Manafort’s former business partner.
“We are primarily here because of one man: Rick Gates,” Zehnle.
For months we have heard pieces of the government’s case against Paul Manafort. Now we know his defense: Blame Richard Gates, his former business partner and deputy.
“This case is about taxes and trust,” defense attorney Thomas Zehnle told the jury. “Mr. Manafort placed his trust in the wrong person … Rick Gates.”
Gates, Zehnle noted, has already pleaded guilty to lying to the U.S. government, yet prosecutors are now telling a jury to believe his testimony.
“There are two sides to every story; it’s an old adage but it’s true,” Zehnle said.
Zehnle sought to humanize Manafort, asking him to stand and saying he was “proud” to represent him.
He said Manafort was a “talented political consultant” and second-generation immigrant and the first in his family to go to college. He has been “at the pinnacle of U.S. politics for forty years,” Zehnle said, and a “driving force in the candidacy of multiple U.S. presidents.”
For that, he said, “Paul Manafort has rendered a valuable service to our system of government.”
At that point Judge T.S. Ellis III interrupted Zehnle as he had Assistant U.S. Attorney Uzo Asonye, asking, “I take it you plan to offer evidence?” Ellis told the defense attorney to stick to what would be shown.
Zehnle said Manafort built “one of the most successful political consulting and government relations shops in Washington,” while also working on “the global stage.”
That work was not partisan, Zehnle said, pointing out that Tad Devine, a former strategist for Sen. Bernie Sanders (I-Vt.), will also testify about working in Ukraine.
Manafort’s work for Yanukovych was to “bring the country closer to Western democracies after decades of Soviet rule” — toward the European Union and away from Russia, Zehnle said. That comment was met with audible sneers from a few of those seated in the courtroom.
3:47 p.m.: Prosecution finishes opening statement
Assistant U.S. Attorney Uzo Asonye noted that Paul Manafort’s defense team may try to attack the credibility of key witnesses, notably his ex-business partner Richard Gates, who served as deputy chairman of Trump’s campaign. But Asonye noted these witnesses are the people with whom Manafort chose to surround himself.
To close, Asonye introduced other members of the special counsel’s team. At the end of the trial, he said, they will ask the jury to send Paul Manafort a message: “To make clear he is not above the law, that the rules apply to him.”
With that, Asonye sat and Manafort’s defense counsel began.
3:45 p.m.: ‘He created cash out of thin air’: What prosecutors say Manafort did when his Ukrainian benefactor fell from power
Assistant U.S. Attorney Uzo Asonye said Paul Manafort not only misled his tax preparer, but a bookkeeper too. Manafort hid millions of dollars in bills and transactions from the bookkeeper to keep his financial dealings under wraps, Asonye said. He said some of Manafort’s wealth remains hidden and untaxed to this day.
Manafort also created sham loans to himself from offshore accounts, Asonye said. The loans totaled millions of dollars and many came from accounts in Cyprus. Asonye said Manafort never made a single loan payment on these loans. All told, between 2010 and 2014, Manafort failed to report $15 million in income to the IRS, Asonye said.
In 2014, Asonye said, Manafort’s “cash spigot” was turned off when Ukrainian political candidate Viktor Yanukovych, who had been paying Manafort for political work, fled that country for Russia. Asonye said Yanukovych had been Manafort’s “golden goose.”
Manafort then turned his attention to falsifying records to get loans from various banks. Asonye said Manafort misstated his income and hid debt in order to get the banks to approve the loans. In fact, Manafort’s company reported no profits in 2016.
“He created cash out of thin air,” Asonye said.
Asonye said that Manafort was an active participant in his financial fraud, paying close attention to the filing of his financial documents, issuing orders to associates and subordinates.
“Shell companies do not create themselves,” Asonye said.
3:33 p.m.: A $15,000 jacket ‘made from an ostrich’
Assistant U.S. Attorney Uzo Asonye offered some new numbers and details on Paul Manafort’s income and spending, saying the $60 million he made in Ukraine was only between 2010 and 2014. He had thirty bank accounts in three foreign countries, Asonye said, paid by Ukrainian oligarchs who would create shell companies.
Manafort signed papers and wrote emails making clear he controlled those accounts, Asonye said, and used them on spending that was “purely personal.” He said Manafort paid his tax accountants $10,000 a year while misreporting his income.
“All of this was willful,” Asonye said. “Paul Manafort knew about the law.”
But the most peculiar new detail he offered was on Manafort’s spending, explaining how the lobbyist spent so much on menswear. He had a $15,000 jacket, Asonye said, “made from an ostrich.”
3:22 p.m.: Judge admonishes prosecutor to stick to evidence in opening statement
Twice as Assistant U.S. Attorney Uzo Asonye got going, he was admonished by Judge T.S. Ellis III not to argue in his opening statement, but instead to explain to the jury only what the evidence will show.
At one point, as Asonye rattled off Manafort’s expensive spending habits, Ellis jumped in to chide, “It isn’t a crime to be profligate in your spending.” He asked the prosecutor to stick to evidence of criminal wrongdoing.
But Asonye quickly got his feet under him and began to lay out for the jury what he said the evidence will show in Paul Manafort’s case.
The evidence, Asonye said, will show that Manafort earned millions and millions but failed to use that money to do “what Americans do every year — pay the taxes he owed.” He said Manafort lied to the Internal Revenue Service about what he owed, then lied about whether he had foreign bank accounts and finally lied to banks to get loans when his consulting income in Ukraine dried up, starting in 2015. Asonye said all the charges in the case boil down to “one simple issue: Paul Manafort lied.”
Assistant U.S. Attorney Uzo Asonye began opening statements around 3 p.m. by highlighting what he described as Paul Manafort’s extravagance and indifference to the law.
“A man in this courtroom believed the law did not apply to him,” Asonye said. “Not tax law, not banking law.”
Without using Manafort’s name, Asonye said the former Trump campaign chairman “collected over 60 million dollars” and used “shell companies and foreign bank accounts, concealing it from U.S. authorities and bankrolling his extravagant lifestyle.” He listed Manafort’s properties, which he said included “a 2-million dollar house just a stone’s throw away from this courtroom in Northern Virginia.”
“He got whatever he wanted,” Asonye added.
By now, most everyone knows the man on trial: Paul Manafort, who served as President Trump’s campaign chairman from May to August of 2016. Manafort is a veteran of Washington political circles, and his work for Trump seemed to be an effort to thrust himself back into that scene. He helped Gerald Ford win the Republican nomination for president in 1976, and he later worked as a convention adviser to the presidential campaign of Ronald Reagan. He led convention operations for GOP presidential nominee Robert J. Dole in the mid-1990s.
At Manafort’s trial, though, many others will take on leading roles. Here is a look at some of the key players in the unfolding courtroom drama, and if you’re interested in a more complete list, you can find that here.
Judge T.S. Ellis III — Ellis is the federal judge in the Eastern District of Virginia presiding over Manafort’s case. Appointed by President Ronald Reagan in the 1980s, Ellis is no stranger to high-profile cases. He oversaw the plea and sentencing of American Taliban supporter John Walker Lindh as well as a case involving government secrets leaked to a pro-Israel lobbying group and an Israeli official. He is well known in the Alexandria courthouse for telling colorful personal stories from the bench and asking probing questions of all those who appear before him.
Richard Gates — Gates is Manafort’s former business partner and right-hand man who avoided going to trial himself by pleading guilty to conspiracy and lying to the FBI. He will be one of prosecutors’ star witnesses, as he was at the center of much of what prosecutors say was Manafort’s fraudulent conduct.
Viktor Yanukovych — Yanukovych is the pro-Russia political candidate in Ukraine for whom Manafort worked and made tens of millions of dollars. It’s that money that prosecutors say Manafort used to engage in a variety of fraud.
Konstantin Kilimnik — Kilimnik ran Manafort’s office in Kiev, Ukraine, during the 10 years Manafort did consulting work there. He also served in the Russian army and learned English at a military school that some experts consider a training ground for Russian spies. Prosecutors say he has ties to Russian intelligence, according to court documents, something Kilimnik has denied. His name appears on many emails prosecutors hope to show at trial detailing Manafort’s work in Ukraine from 2005 to 2014.
Tad Devine — Devine is a Democratic strategist who worked with Manafort on Yanukovych’s rehabilitation and election as president in 2010. He is expected to testify against as part of prosecutors’ case against Manafort.
2:18 p.m.: How the jurors were picked
The six men and six women who will decide whether President Trump’s former campaign chairman is guilty of several felonies were chosen from roughly 60 potential jurors from Northern Virginia who showed up to court Tuesday. The group among a larger pool of potential jurors who had answered written questions regarding their knowledge of the case and their ability to set that knowledge aside. Judge T.S. Ellis III already had rejected more than three dozen people because they had competing obligations or indicated they could not be impartial.
Ellis inquired about the possible jurors’ knowledge of and opinions on the case, as well as any personal experiences that might color their thinking. One of the first indications of the composition of the jury pool came as Ellis asked the assembled group if anyone knew anyone from the Justice Department or had business with the department. Nine hands shot up.
“Oh, my goodness,” the judge joked at one point. “I’m not going to ask that question again.”
The jurors who raised their hands took turns explaining their connections to the Justice Department. Not surprisingly for Northern Virginia, many said they worked in government or had connections to it. One woman she worked in the civil section of the department for two years. Another man told the judge he was a Department of Energy employee who had dealings with Justice Department attorneys. Another woman said she was a Federal Communications Commission attorney for 31 years who also had dealings with the department.
All nine of the people who said they had connections to the department said it would not affect their ability to be fair or impartial in deciding the case.
In addition to the 12 people selected to be on the jury, the parties selected three women and one man to serve as alternates.
2:02 p.m.: Opening statements are set to begin
Prosecutors and defense attorneys will present opening statements in the case at 2:45 p.m. Assistant U.S. Attorney Uzo Asonye, a fraud prosecutor in the Eastern District of Virginia who was brought on to help the special counsel team with the prosecution there, will speak for the government. He is known for putting Norfolk’s treasurer behind bars, along with a top official at the General Services Administration and a former staffer for a state senator.
Thomas Zehnle, who worked as a federal tax prosecutor before going into white-collar defense law, will speak for Paul Manafort’s defense. He won an acquittal in 2013 for an attorney in a tax shelter conspiracy case involving KPMG.
Each statement is expected to take half an hour.
Just before 2 p.m., prosecutors and defense attorneys finalized the 12 men and women who will serve as jurors, as well as four alternates. The jury is composed of six men and six women. The alternates are three women and one man.
1:50 p.m.: What you need to know as the trial begins
Paul Manafort, who served as President Trump’s campaign chairman from May to August of 2016, is the first person to go to trial in a case handled by prosecutors working with special counsel Robert S. Mueller III as he probes Russian interference in the 2016 presidential election.
Manafort is accused of taking the money he made working for a Russia-backed Ukrainian political party and hiding it in foreign bank accounts to avoid paying taxes, then turning to bank fraud when the party collapsed.
The special counsel does not allege Manafort played a role in Russian interference in the 2016 election. But many of the businessmen and politicians they said he worked with have deep ties to Russia and to Russian President Vladimir Putin.
Prosecutors want to show memos, campaign ad scripts, political rally plans and other work Manafort did in an effort to prove that he made over $60 million off the Party of Regions and its leader, Viktor Yanukovych, between 2005 and 2014.
That ended with a wave of demonstrations against Yanukovych and his rejection of an association agreement with the European Union in favor of a closer relationship with Russia. He was ousted and fled over the border to Russia, where he remains in exile.
Starting in 2014, Manafort lied about his income and debt to obtain multimillion-dollar loans, according to prosecutors, including one loan from a Chicago banker who wanted a job in the Trump campaign and administration.
There are 18 counts against Manafort, who also faces related charges in Washington, D.C. His former business partner Richard Gates, originally accused of helping Manafort commit fraud, has pleaded guilty in D.C. and plans to testify for the prosecution.