The long-expected second hammer has fallen in the special counsel's investigation of Paul Manafort and Rick Gates's finances from their days of being political consultants in Ukraine.
On Thursday, special counsel Robert S. Mueller III filed an indictment against two top former Trump campaign officials accusing them of cheating on their taxes and falsifying their income to get bank loans. Prosecutors allege Manafort and Gates conducted a multiyear effort to avoid paying taxes on their millions earned from lobbying for a pro-Russian friendly government in Ukraine. They were also indicted in October on money-laundering charges and failing to disclose their work in Ukraine to the U.S. government.
Manafort and Gates pleaded not guilty to the first round of charges; Manafort's lawyer told The Post he's innocent of these second group of charges. And Manafort, President Trump's former campaign chairman, and Gates, his deputy, have also tried to argue: What has this to do with Russia meddling in the election, and whether Trump's campaign helped?
Possibly a lot. Here are three theories for what Manafort and Gates's latest legal troubles could mean for Mueller's broader investigation:
1. The special counsel was trying to pressure Gates to flip
One tactic Mueller appears to be applying is using legal pressure to get those in the know to talk. That's how Mueller got former Trump national security adviser Michael Flynn and former Trump campaign adviser George Papadopoulos to flip, by cutting plea deals where they pleaded guilty to just one charge of lying to the FBI about their Russia contacts in exchange for sharing what they know about whatever Mueller asks them. The implicit threat is that if they don't cooperate, more charges could be coming.
And in the case of Manafort and Gates, more charges did come. “Mueller is trying to maximize his leverage against Manafort and Gates by seeking the most comprehensive indictment possible," said Jens David Ohlin, the vice dean of Cornell Law.
It appears that strategy has worked with Gates. My colleagues at The Post have reported Gates was in plea negotiations with the special counsel before this second round of indictments. And on Friday morning, news broke Gates will indeed plead guilty to at least some of the charges, a sign he's willing to cooperate to give potentially incriminating information about Manafort or, potentially, the Trump campaign.
Mueller appears to have been ratcheting up pressure on Gates for some time. A lawyer who worked with Gates when in Ukraine recently pleaded guilty to lying to the FBI about when he talked to Gates during the campaign. (Why the focus on Gates? He stayed with the Trump campaign even after Manafort was forced out, and he served the president-elect during the transition. “Mueller would think Gates knows a lot,” said Jeffrey Jacobovitz, a white collar defense lawyer. “His cooperation would be helpful.")
2. Mueller could be sending a message to the White House that financial dealings are not off limits
Trump has tried to draw a red line with the steadily-advancing Mueller investigation, by warning the special counsel that his personal finances are off limits. But that ignores the reality that Mueller's team was given wide latitude by the Justice Department to investigate “any matters that arose or may arise directly from the investigation” of Russia meddling and the Trump campaign.
In putting his team together, Mueller rapidly built up a group of expert investigators for complex financial crimes. It's possible he did that precisely because of this case with Manafort and Gates. It's also possible there's more he's looking into. And by coming down hard, not once but twice, on two powerful members of the Trump campaign, he could be sending a signal to the White House that he sees no problem with investigating anyone's finances, said Jacobovitz.
3. This could simply be part two of a long-planned indictment
Another theory is that these taxes charges were planned all along and just landed on Thursday because that's when they were ready. The case is indeed complicated: While the first indictment came in Washington, D.C., these new tax fraud charges come out of Virginia, because that's where both men filed their taxes.
Ohlin, before news of Gates's guilty plea, said it's not clear why the special counsel brought these new charges now. What was going on behind the scenes between Gates and Mueller?
In the end, only Mueller and his team know what, precisely, to make of these latest indictments. “The rest of us,” Ohlin said, “are just guessing.”