They've got muck; we've got rakes. TPM Muckraker

A banker who lent Paul Manafort $16 million — after serving on Trump’s campaign and while seeking a job in the incoming Trump administration — knew that the loan was fraudulent, a prosecutor for special counsel Robert Mueller’s team told a federal judge Monday.

The bank is called “Lender D” in the court documents that led up to the Monday afternoon hearing. But based on corroborating details, it is the Chicago-based Federal Savings Bank, whose founder and CEO Steve Calk.

Calk served on the Trump campaign’s economic advisory team, and, according to the Wall Street Journal, wanted to be Trump’s Army secretary. His bank issued Manafort and his family two loans, of $9.5 million and $6.5 million, in late 2016 and early 2017 respectively, after Manafort allegedly made “several materially inconsistent representations during the process of negotiating” the loan, according to a search warrant partially unsealed last month.

The accusation of the banker’s knowledge of the allegedly fraudulent loan came in questioning by U.S. District Judge T.S. Ellis, who is presiding over the case against Manafort in Virginia, where trial will begin next week. Ellis was hearing a request from Manafort that evidence and arguments about Manafort’s affiliation with the Trump campaign be excluded from the trial.

Mueller’s team, represented by Greg Andres at the hearing, had indicated that the only mention of the Trump campaign would be in the context of those particular loans, which Andres said would take a small part of the trial. Andres alleged that the banker’s motivations in extending the loan included his seeking and obtaining a position on the campaign, as well as seeking (though eventually not getting) a job in the administration.

Ellis asked if the banker knew if the information on Manafort loan application was inaccurate.

“He did,” Andres said.

Manafort is facing charges of bank fraud and tax fraud, mostly stemming from his consulting work  for pro-Russian then-president of Ukraine, Victor Yanukovych. Manafort has pleaded not guilty. Earlier in the day, Ellis moved the start of Manafort’s trial from Wednesday to July 31.

Ellis on Monday heard other requests by both the prosecutors and Manafort that certain evidence be excluded. The requests are routine in the run-up to a criminal trial, but in a closely watched case each pre-trial decision by the judge can take on outsize importance.

Many of the requests heard Monday were denied from the bench as moot, after the other side indicated that they did not plan to introduce the evidence in question.

Among the requests was one filed by Manafort just on Friday, after Mueller released his exhibits list, seeking that certain evidence from Manafort’s consulting work in Ukraine — which gave rise to the bulk of the charges he’s facing — be excluded. His attorney Thomas Zehnle expressed concern on Monday about certain items referenced in the exhibit, including a photo ex-President Yanukovych.

The judge asked Manafort’s attorneys to follow up with his specific list of the items on the exhibit list that they objected, while ordering Mueller’s team to respond to that list as to why they should be included.

Ellis said that if they are photos of them at a cocktail party with scantily-clad women, that such evidence would not be allowed, apparently speaking hypothetically.

“There will be no pictures of scantily-clothed woman,” Andres said.

Read More →

Federal prosecutors were granted access on Friday to 12 audio recordings seized from President Trump’s former fixer Michael Cohen.

That development was formalized in a Monday letter by Barbara Jones, the special master overseeing the document review in Cohen’s criminal case. She announced that “the parties” involved no longer wanted to designate the recordings as protected by attorney-client privilege.

“On July 20, 2018, the parties withdrew their designations of ‘privileged’ as to 12 audio items that were under consideration by the special master,” Jones wrote. “Based upon those de-designations, the special master released the 12 items to the government that day.”

Cohen reportedly had a habit of secretly taping conversations. One such chat was a 2016 conversation between Cohen and Trump about hush money payments made to a former Playboy model who claimed to have an affair with Trump, as the New York Times first reported Friday.

Trump’s attorney, Rudy Giuliani, confirmed the report, but said the recording was “exculpatory” and showed no wrongdoing on Trump’s part.

Per CNN, Trump’s attorneys waived attorney-client privilege on his behalf on the recording about ex-Playboy model Karen McDougal, and that it is among the 12 now in the government’s possession. CNN reported that it is the only tape of the 12 that features Trump.

The President appeared to be incensed that his onetime ally recorded their conversation, tweeting that it was “totally unheard of & perhaps illegal” for Cohen to do so.

New York is a “one-party state” that legally permits a person to record someone else without first obtaining consent.

Read More →

ALEXANDRIA, Va. – The federal judge presiding over Paul Manafort’s trial in Virginia delayed the start of the trial until July 31. It was scheduled to start Wednesday.

He heard arguments on the delay Monday morning and issued his ruling from the bench Monday afternoon. The judge, U.S. District Judge T.S. Ellis, said that written jury questionnaire would still be distributed to potential jurors on Tuesday, July 24, but that jury selection would not begin until a week later.

Manafort has sought a longer delay, but the judge granted a delay of only six days.

At the hearing, Manafort’s attorney Kevin Downing said 120,000 pages of documents had been produced in recent weeks that his team needed more time to review.

In previous court filings, Manafort had also pointed to the mid-June decision by the judge in the D.C. case, where special counsel Robert Mueller has also brought charges, to put Manafort in jail for alleged witness tampering. Manafort’s attorneys argued that Manafort’s detention, at a rural jail some two hours away from the D.C.-metropolitan area, was impeding his trial prep. Ellis responded to that issue by moving Manafort to a jail closer to the Alexandria courthouse — a decision Manafort unsuccessfully sought to reverse.

After announcing his decision Monday to delay jury selection, Ellis outlined his process for questioning the potential jurors. He said a “good deal” of his oral questioning of jurors will take place at the bench,  with both parties having the opportunity to ask the judge to bring the potential jurors back for more questioning.

“We are not going to inquire into how people voted,” Ellis said. He said he would seat 16 jurors for the case, four them as alternates.

Manafort is facing charges of bank fraud and tax fraud in Virginia. He has pleaded not guilty in that case, and to the charges brought against him in D.C.

Read More →

A federal judge Monday unsealed the names of five witnesses granted immunity by special counsel Robert Mueller to testify at the upcoming trial of former Trump campaign chairman Paul Manafort.

The witnesses, who Mueller’s team had sought to keep from public view until they were called to testify, are:

  1. James Brennan
  2. Donna Duggan
  3. Conor O’Brien
  4. Cindy Laporta
  5. Dennis Raico

The unsealed court documents do not provide details about what the witnesses may be expected to testify about. None of the newly revealed witnesses have figured prominently in the case or the coverage of the case to this point.

A person named Dennis Raico was previously affiliated with Federal Savings Bank (FSB), a small Chicago bank that provided Manafort with $16 million in loans shortly after Manafort left the Trump campaign. FSB founder Steve Calk served as an economic adviser to the Trump campaign. NBC has reported that Mueller is investigating whether Manafort promised to secure Calk an administration position in exchange for the loans.

An individual identified as “J. Brennan” was allegedly included in several email chains that Mueller’s team plans to submit for the trial, according to their exhibit list. Brennan is allegedly included on chains with Raico and Laporta about tax returns and a loan agreement. A LinkedIn profile for a James Brennan lists him as vice president commercial and construction loan manager at the Federal Savings Bank.

“Both O’Brien and Laporta work for the accounting firm of Kositzka, Wicks and Company, according to the firm’s website. KWC was Manafort’s accounting firm, according to a person familiar with the matter,” Bloomberg reported.

A “D. Duggan” appeared several times on a list of exhibits filed by prosecutors in the case last week. Duggan was allegedly part of email chains involving proof of insurance for a property at 377 Union St. in Brooklyn, which is known to be a brownstone owned by Manafort that is referenced in his indictment.

Two possible prominent witnesses in the case – Washington lobbyists Tony Podesta and Vin Weber, whose firms allegedly participated with Manafort in a PR campaign campaign for Ukraine without registering a foreign agents – did not appear among the list of five immunized witnesses.

Typically under immunity deals such as this one, the witness will provide relevant testimony with the agreement that it will not be used to prosecute them.

Manafort faces charges of tax fraud and bank fraud related to his decade-plus of consulting work for pro-Russian political forces in Ukraine. He has pleaded not guilty. He faces trial on similar charges in DC later this year.

Mueller has secured five guilty pleas and dozen of indictments in his wide-ranging probe of Russian interference in the 2016 election, but Manafort’s case is set to be the first to come to trial. The judge in the case has opined that Mueller is only interested in Manafort as a possible witness against President Trump, and has called the prosecution’s tactic “distasteful.” Manafort has shown no signs so far of being willing to cooperate with Mueller’s probe.


Read More →

ALEXANDRIA, Va. – With the criminal trial of former Trump campaign chairman Paul Manafort just two days away, the judge in the case ordered the testimony of five witnesses granted immunity by special Counsel Robert Mueller’s team.

U.S. District Judge T.S. Ellis at a hearing Monday morning said he would unseal the documents that would reveal the identities of the immunized witnesses.

Ellis also heard arguments over Manafort’s request to delay Wednesday’s start of the trial. He said he would issue a ruling from the bench on the continuance as early as this afternoon when the hearing resumes after a short recess.

The judge had already denied Manafort’s request to move the trial to Roanoke, Virginia, to escape the widespread publicity about the case in the metro Washington area.

In the 30-minute hearing, Kevin Downing, an attorney for Manafort, argued that this team needed more time to review 120,000 pages of documents they had received in document production in the last few weeks, some as recently as last Friday.

Forty-nine thousand pages of those documents were of financial records kept by Manafort’s bookkeeping company, NKSFB, which were produced for the defense team on July 6.

The attorney representing Mueller’s team, Uzo Asonye, said that prosecutors had been under the impression that Manafort was already in possession of the financial records, and that the prosecutors had included them in the production out of an “abundance of caution.”

Asonye said that last summer, Manafort’s attorneys at the time had sorted through the financial records for documents covered by attorney-client privilege.

Downing, who took over Manafort’s defense in September 2017, revealed that Manafort’s previous law firm Wilmer Cutler Pickering had not turned over the records to the new defense team. He also said that the bookkeeping company refused to give him the records unless Manafort reimbursed the company for the subpoena production, which Manafort did not do.

“Go to court and get the documents,” Ellis scolded Downing. “They belong to your client.”

“We thought we’d get them in discovery, your honor,” Downing responded. “It’s a lot cheaper.”

Tens of thousands of pages of discovery materials that Downing pointed to in requesting a delay in the trial were from devices owned by Rick Gates, Manafort’s longtime business deputy who pleaded guilty this spring and is cooperating with Mueller’s investigation.

Asonye said those materials were images from Gates’ devices and were not among the items on the government’s exhibit list. Downing said that they expected Gates to be a witness and thus the “heart” of the case, so they were entitled time to review all of the materials from his devices.

Manafort faces bank fraud and tax fraud charges related to his consulting work in the Ukraine for then-President Viktor Yanukovych and his pro-Russian Party of Regions. Manafort has pleaded not guilty to these charges and related charges in DC.

Monday’s hearing was the first time that Manafort has been seen publicly since he was thrown in jail in mid-June by the judge in the D.C. case for alleged witness tampering. He wore a forest green jumpsuit with a rumpled collar. The gray roots of his hair were visible, but his hair  was tidier and his shave cleaner since the mug shot taken of him earlier this month, when he moved to a jail closer to the Alexandria courthouse.

Manafort’s trial is the first arising from special counsel Robert Mueller’s sprawling investigation of Russian interference in the 2016 election, which has yielded dozens of indictments and five guilty pleas.

Read More →

Lordy, there are (lots of) tapes.

CNN reported Friday that President Trump’s longtime attorney Michael Cohen secretly recorded multiple conversations between the two, including one about a payment made to a former Playboy model who says she slept with Trump.

According to CNN, the President had no idea the calls were being recorded. When he learned this week about the tapes, which are now in the possession of the FBI, he reportedly said, “I can’t believe Michael would do this to me.”

The New York Times broke the news earlier Friday that Cohen had recorded a fall 2016 call in which he and Trump discussed paying Karen McDougal to keep her quiet about her alleged 2006 affair with the president.

All of the recordings were seized in April when the FBI executed search warrants on Cohen’s premises as part of a criminal investigation into his finances. Trump’s attorney Rudy Giuliani confirmed the existence of the McDougal tape, but said the two-minute call showed no wrongdoing on Trump’s behalf and was actually “powerful exculpatory evidence.”

The McDougal tape appears to be the only Trump-Cohen recording “of substance,” according to a source of CNN’s Dana Bash.

But Bash noted on air that Cohen apparently recorded his calls not just with Trump but with “people around the president” and other “significant individuals.” CNN did not name any of those other individuals.

In addition to working as a longtime fixer for Trump and the Trump Organization, Cohen arranged a hush money deal for powerful GOP donor Elliott Broidy and did legal work for Fox News host Sean Hannity.

Read More →

A statement by the Trump campaign, just before the 2016 election, that it was unaware of payments to a Playboy model claiming to have had an affair with Donald Trump was blown up Friday with the revelation of a tape recording of a conversation between Trump and his attorney discussing paying the woman.

When the Wall Street Journal reported on November 4, 2016 that National Enquirer had sought to quiet the model, Karen McDougal, by buying the rights to her story and never running it, Trump campaign spokeswoman Hope Hicks denied both Trump’s affair and his knowledge about the payments.

Read More →

Michael Cohen secretly recorded a 2016 conversation in which he and President Trump discussed paying hush money to a former Playboy model who claims she slept with Trump, the New York Times reported Friday. The FBI is in possession of the recording.

Trump’s attorney, Rudy Giuliani, confirmed that the taped conversation about the payments to Karen McDougal occurred. Giuliani told the Times that the brief recording contained no suggestion that Trump has “any knowledge of it in advance” and said it was actually “powerful exculpatory evidence.”

Giuliani also said that the recording is interrupted twice because “someone brings soda in for them,” suggesting the conversation happened in person rather than over the phone.

The Times reported that the conversation reportedly focused on the $150,000 that the National Enquirer’s parent company, American Media Inc., gave to McDougal to “catch and kill” her story about her alleged yearlong 2006 affair with Trump, as well as an additional payment that Cohen planned to make directly to McDougal.

Maggie Haberman, one of the Times reporters who broke the story, said on CNN that Giuliani was trying to argue that Trump instructed Cohen to send the money by check “so that it was done properly, as opposed to cash,” which would not be traceable. That additional payment was never actually sent, Haberman said.

The Washington Post subsequently published a notably different account by a “person familiar with the recording.” That individual said that the pair discussed a plan for Cohen to try to purchase the rights to McDougal’s story from AMI for $150,000.

These differing accounts leave it not yet clear whether Trump and Cohen discussed sending an additional payment to McDougal, or instead reimbursing AMI the $150,000 it spent on McDougal’s story in order to take control of her rights.

The recording was among the huge trove of materials that the FBI seized from Cohen’s Manhattan office in an April raid. Cohen is under criminal investigation in New York for a host of financial dealings, including the payments he doled out during the 2016 campaign to silence women who claimed to have had sexual relationships with Trump.

Those payments could violate federal finance laws.

“Three people briefed on the matter” told the Times that Cohen’s lawyers discovered the recording when reviewing the seized materials for anything covered by attorney-client privilege, and shared it with Trump’s attorneys.

Cohen’s lawyer Lanny Davis told the Times he had “nothing to say on this matter.”

Later Friday afternoon, Davis sent a tweet saying the recording “will not hurt” Cohen.

The story of McDougal’s alleged affair with Trump came to light in March, when the former Playboy model sued AMI for an alleged breach of contract. McDougal said she sold the story of her affair to the tabloid, but that the publication, which is owned by Trump’s friend David Pecker, declined to publish it to protect Trump.

Former adult film star Stormy Daniels also received funds from Trump, via Cohen, to keep her silent about her own alleged affair with the president.

Rumors about Cohen’s habit of recording phone conversations first circulated when the FBI raided his office, apartment and hotel room in April. Friday’s revelation leaves open the possibility that the feds may have seized recordings of other conversations between Cohen and Trump.

This post has been updated.

Read More →

A court-appointed special master has shut down many of the latest requests by former Trump attorney Michael Cohen to keep hundreds of documents out of the hands of federal investigators.

Cohen’s lawyers have consistently argued that much of the material seized from his hotel room, office and apartment by the FBI is either protected by attorney-client privilege or highly personal.

But in a report filed Thursday, special master Barbara Jones determined that 1,452 of the 4,085 documents designated as privileged by Cohen’s legal team did not actually fit that designation. Jones agreed that the other 2,633 were either fully or partially privileged.

The non-privileged items will “promptly be released” to prosecutors in the Manhattan U.S. Attorney’s Office for use in their criminal investigation into Cohen’s business and financial dealings, according to the filing. This is the second report Jones has issued on the trove of materials that federal agents seized from Cohen’s premises in an April raid.

Cohen recently shook up his legal team, replacing the attorneys at McDermott Will & Emery who assisted with the document review with former Manhattan prosecutor Guy Petrillo and former White House lawyer Lanny Davis. Since then, he has displayed a new willingness to cooperate with the federal investigation, telling the press that his loyalty is to his country and family rather than Trump.

Read More →

Alleged Russian agent Mariia Butina was indicted this week on two very serious charges: conspiring against the U.S. and acting as an unregistered foreign agent.

But the influence campaign Butina allegedly carried out over the past few years was so brazen that it was almost comical. The 29-year-old essentially made her very own “Where’s Waldo?” series out of the 2016 GOP presidential campaign.

Butina was captured on camera at a 2015 Las Vegas libertarian convention asking then-candidate Donald Trump about U.S. sanctions. She popped up at NRA events throughout the Midwest and at the National Prayer Breakfast in D.C. On the day of President Trump’s inauguration, Butina even sent a selfie to her alleged handler, Russian Central Bank official Alexander Torshin, of her beaming near the U.S. Capitol building.

Many of those interactions, like her run-ins with short-lived GOP candidates Bobby Jindal and Rick Santorum, were just embarrassing photo ops for those politicians she was allegedly targeting. But some of the connections—like her intimate relationship with GOP operative Paul Erickson and her association with former NRA president David Keene—were involved and forged over years.

As the Washington Post and others have documented, Russia used religion and guns to make inroads with the American conservative community. According to court documents, Butina also used sexual favors as a lure, allegedly offering sex for a position at a special interest organization.

View full-sized version

Infographic by Christine Frapech

Read More →