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ALEXANDRIA, VA —Delivering his opening statement at the Virginia trial of former Trump campaign chair Paul Manafort, his defense attorney targeted Manafort’s longtime business deputy Rick Gates for allegedly “abusing” Manafort’s trust and accused him of embezzling millions of dollars from his former employer.

“Rick Gates violated one of life’s most basic rules: when you’re in a hole, stop digging,” attorney Thomas Zehnle said.

His 30-minute opening statement painted Manafort as a successful but busy global consultant who trusted Gates and other outside professionals to handle the day-to-day operations of his business, including its finances.

“Unfortunately for Paul Manafort, his trust in Rick Gates was misplaced,” Zehnle told the jury.

Manafort is facing charges of bank fraud and tax fraud. He has pleaded not guilty. In his opening statement, prosecutor Uzo Asonye: “All of these charges boil down to one simple issue: Did Paul Manafort lie?”

Gates was originally a co-defendant in the case, until reaching a plea deal with special counsel Robert Mueller in February. He is expected to testify against Manafort in the trial.

Zehnle accused Gates of having an “evolving” story about his dealings with Manafort, and pointed out that as part of his plea agreement, he pleaded guilty to making a false statement to the prosecutors during plea negotiations.

“The foundation of the special counsel’s case rests squarely on this witness,” Zehnle said.

In Zehnle’s retelling it was Gates who was the point person for Manafort’s book-keepers and tax preparers.

“Little did Paul know that Rick was lining his own pockets,” Zehnle said.

Gates misled the outside accountants, Zehnle said, because “he had his hands in the cookie jar,” and couldn’t let anyone know.

Among the government’s allegations is that Manafort failed to disclose to the government foreign bank accounts, through which flowed money Manafort made doing lucrative consulting in Ukraine work. Zehnle said Manafort was not responsible for how or why those foreign bank accounts were set up, but was required by the Ukrainian backers paying his consulting bills that he be paid this way.

Of Manafort’s Ukraine endeavors, where he advised the pro-Russian Party of Regions and ex-President Victor Yanukovych, Zehnle said the “focus” of Manafort and his associates efforts “was to bring the country closer to western democracy.”

As for Mueller’s bank fraud allegations, Zehnle said that Manafort was “open” with the outside professionals who helped to facilitate loans, about why he was seeking the money and what he planned to spend it on. He said that Manafort was in the process of paying back the loans, before Mueller brought charges against him and his assets were seized.

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In the opening statement for the Virginia trial of former Trump campaign chair Paul Manafort, a federal prosecutor painted Manafort as a man who knowingly lied to the government and acted as though he were above the law.

“A man in this courtroom believed the law did not apply to him,” said Uzo Asonye, a member of special counsel Robert Mueller’s prosecution team, referring to Manafort.

Asonye told the jury that the special counsel’s case will prove that Manafort failed to report $15 million in income to the U.S. government by funneling money directly from foreign bank accounts to vendors, misleading his bookkeeper and tax preparers, and by claiming the income was a loan. Asonye said that the government’s case will also show that Manafort misled financial institutions in order to obtain loans after his work in Ukraine dried up.

“All of these charges boil down to one simple issue: Did Paul Manafort lie,” Asonye told the jury.

Manafort was indicted on multiple counts of bank and tax fraud arising from his work for the former pro-Russian regime in Ukraine. He has pleaded not guilty. Manafort is the first person to be tried as part of Mueller’s sprawling investigation of Russian interference in the 2016 elections.

Before laying out the government’s case in more detail, Asonye described Manafort’s lifestyle while he was working for Ukrainian political leaders until 2014, noting that Manafort spent the millions he earned on luxury items. Among the goods Manafort allegedly bought with this money, according to Asonye, was a $21,000 watch and a $15,000 jacket made out of ostrich.

At this point, U.S. District Judge T.S. Ellis jumped in to note that it’s not a crime to be rich and implored Asonye to focus on how Manafort allegedly broke the law.

Asonye then noted that Manafort did not “pay the taxes he owed” to the government by filing false tax returns and began to give the jury more detail on Manafort’s alleged actions.

“The evidence will show that Paul Manafort placed himself and his money above the law,” Asonye said.

He alleged that Manafort had more than 30 foreign bank accounts but knowingly lied to the government about the accounts. Asonye said that the jury will hear from vendors who received wire transfers directly from the foreign accounts and from Manafort’s bookkeeper who allegedly did not receive the correct information on Manafort’s finances.

The prosecutor accused Manafort of disguising his income as if it were loans. These “sham” or “bogus” loans helped Manafort avoid paying taxes on it, Asonye said.

After laying out the government’s case for tax fraud, Asonye moved on to the bank fraud charges, alleging that Manafort lied on loan applications when he started running out of cash.

“He literally created cash out of thin air,” Asonye said, referring to Manafort’s loan applications and allegedly doctored financial statements.

Asonye emphasized that while Manafort delegated much of the work in furthering this alleged scheme to his associates, Manafort gave constant directions and received regular updates.

“None of this happened by accident,” Asonye said, adding that the government’s evidence “will establish that Paul Manafort” lied to his bookkeeper, his tax preparer, the IRS, and financial institutions.

Jury selection in the case began Tuesday morning and moved swiftly. By early afternoon, a jury was seated and opening statements began. The prosecution is now expected to begin putting on its case before the end of the day.

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ALEXANDRIA, VA — Jury selection finished early Tuesday afternoon in the Paul Manafort trial in Alexandria, Virginia. After the jury of six women and six men — plus an alternate jury of one man and three women — was chosen, U.S. District Judge T.S. Ellis announced at recess until 2:45 p.m. ET. After jury instructions are given, opening statements are expected later Tuesday afternoon.

Manafort is facing charges of bank fraud and tax fraud as part of special counsel Robert Mueller’s investigation. He has pleaded not guilty. The allegations stem mostly from his consulting work in Ukraine.

Manafort, in a black suit, was present in the courthouse Tuesday, as was his wife, Kathleen.

Before starting the jury selection process, Judge Ellis commented briefly on a request from Manafort to exclude from the trial nearly 500 pages of the prosecutors’ evidence related to his Ukraine work. Ellis said he would not resolve the issue quite yet, but offered a set of conditions for the evidence to be considered admissible. He said he hoped the prosecutors would take into account these conditions and reduce the amount of evidence they plan to introduce. He said that he agreed with the prosecutors and thought they were correct in arguing that evidence from the Ukraine work was relevant to show that Manafort earned income that he should have reported.

But, “the fact that documents are relevant is not the end of the inquiry,” the judge said, warning against evidence that is confusing or prejudicial. He instructed the government to elicit testimony to show the relevance of evidence before it is introduced.

Ellis said he did not want “a data dump” into the record on the assumption that the jury is going to look at it without any testimony.

The jury “voir dire” — as the process of orally questioning the jurors is called — moved much more quickly than many observers were expecting. The judge asked the potential jurors if they had relationships or affiliations with Mueller’s team, with the Justice Department more broadly, with Manafort’s attorneys, or with the attorneys’ private law firms. A handful of the potential jurors said they had a relationship with the Justice Department, though none ended up on the jury or among the alternates.

The bulk of the morning and early afternoon was spent with more than two dozen potential jurors answering the judge’s questions at his bench, where the press and the public could not hear the discussion.

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Here we go again.

Facebook announced on Tuesday that it has identified an ongoing political influence campaign on its platform ahead of the November midterm elections, and has removed 32 pages and accounts “involved in coordinated inauthentic behavior.”

The social media giant’s announcement came minutes after the New York Times reported that Facebook officials have been briefing lawmakers on this activity in a series of meetings on Capitol Hill this week.

As in 2016, this year’s effort is centered around divisive social issues. Among the most influential accounts nixed from the platform were “Aztlan Warriors,” “Black Elevation,” “Mindful Being,” and “Resisters,” according to Facebook. The Resisters page partnered with five authentic U.S. progressive groups to organize an Aug. 10 rally marking the one-year anniversary of the deadly white nationalist “Unite the Rally” in Charlottesville, Virginia, Facebook announced.

These so-called “bad actors” also shared memes criticizing colonialism and sexism, and paid third parties to run ads on their behalf, according to Facebook.

Facebook said it wasn’t clear if Russian intelligence officers were behind these efforts, but that “whoever set up these accounts went to much greater lengths to obscure their true identities than the Russian-based Internet Research Agency (IRA) has in the past.”

As part of Special Counsel Robert Mueller’s Russia probe, a federal grand jury in Washington D.C., in February indicted 13 Russian nationals and three Russian entities for a systematic effort to interfere with the 2016 presidential election in support of Donald Trump. The IRA’s campaign involved creating hundreds of bogus social media accounts, some of which promoted false claims that Democrats committed voter fraud.

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On Tuesday morning, not long before jury selection began in former Trump campaign chair Paul Manafort’s Virginia trial, lawyers for special counsel Robert Mueller filed an updated exhibit list.

The list of more than 400 exhibits remains largely unchanged from the original list filed earlier in July, and Mueller’s team will likely not use all of the exhibits listed, but the special counsel’s lawyers added new exhibits for a few of the key storylines laid out in the lead-up to the trial.

Mueller’s team added a few new items related to the loan Manafort allegedly obtained from Federal Savings Bank, run by Steve Calk, the banker interested in a Trump administration position. Those items include the journal of a former bank employee granted immunity to testify and an email with the subject line “Nervousness is setting in.”

The exhibit list also includes new documents related to the purchase of Yankees season tickets, a photograph of the outdoor kitchen at one of Manafort’s homes, and an email from Manafort to his longtime deputy Rick Gates about “DOD Service secretaries.”

Read the new exhibit list:

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The federal investigation into alleged Russian agent Mariia Butina stemmed from a series of suspicious, high-dollar money transfers to limited liability companies tied to Butina and her onetime boyfriend, South Dakota-based GOP operative Paul Erickson, according to a new report.

The Tuesday report by McClatchy laid out the origins of the probe into possible Russian attempts to infiltrate and channel money to the National Rifle Association. According to McClatchy, the NRA probe predates President Trump’s January 2017 inauguration, and is being overseen by the U.S. attorney’s office for the District of Columbia, rather than Special Counsel Robert Mueller.

Butina was charged in July with conspiracy against the United States and serving as an unregistered agent for Russia who worked to infiltrate the NRA, among other conservative groups. She pleaded not guilty and is in a Washington, D.C. jail awaiting trial. Erickson has not been charged, but is believed to be the individual described in court documents as “U.S. Person 1” who helped Butina coordinate her activities.

Republican operative Paul Erickson also was involved in the financial dealings that drew investigators’ interest – transfers of money exceeding $10,000 to limited liability corporations, including two created in Erickson’s home state of South Dakota, the sources said. Both of these people, including one of the sources and a third individual, also spoke on condition of anonymity because of the confidential nature of the investigation.

Per McClatchy, the interest of investigators at the Treasury Department was first piqued after they received a number of Suspicious Activity Reports related to LLCs linked to the couple, including some funds transfers that “appear to have come from Russia.”

At a July 18 court hearing, both federal prosecutors and Butina’s lawyer, Robert Driscoll, suggested that there was a federal fraud investigation ongoing into Erickson in South Dakota. Both parties said Butina offered to assist in that probe.

Driscoll confirmed to McClatchy that some $20,000 passed through Bridges LLC, one of the South Dakota entities that the couple incorporated in 2016. The money consisted of four $5,000 payments that Butina received from the Outdoor Channel for consulting work on a segment about bear hunting in Russia, according to Driscoll.

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He’s been called Paul Manafort’s “right-hand-man,” his “protegé,” and even Manafort’s “rabbi.” Now Rick Gates — who, at one time, was also Manafort’s co-defendant — is expected to be the key witness against his old business partner and mentor in his trial on bank and tax fraud charges.

After a rocky road to cooperating with special counsel Robert Mueller’s Russia probe, Gates is expected to provide critical testimony against Manafort, whose own attorney has called Gates the “heart” of the government’s case.

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When the news broke last week that the Trump Organization’s chief financial officer was subpoenaed to provide testimony in Michael Cohen’s criminal investigation, the company resorted to one of Trump’s favored tactics: minimization.

CFO Allen Weisselberg was a “bookkeeper who simply carries out directions from others,” Trump Organization attorney Alan Garten said.

But that characterization of Weisselberg is belied by years of reporting, court documents and even Trump’s own words.

“Allen has been with me for thirty years and knows how to get things done,” Trump wrote in his 2004 book “Think Like A Billionaire.”

Weisselberg was hired straight out of college to serve as Fred Trump’s personal accountant. He quickly rose through the ranks, becoming company controller and, ultimately, the Trump Organization’s top moneyman. The CFO and executive vice president was dispatched to give reporters tours of the Trump family’s properties, sat for daily meetings with Trump, prepared Trump’s own tax returns for a time and was heavily involved in side projects like Trump University and the Trump Foundation.

As a former Trump Organization employee told NBC’s Katy Tur, Weisselberg “knows where all financial bodies are buried.”

Managing the Trump Organization’s books

Along with Donald Trump, Jr., Weisselberg now manages the trust in which President Trump placed his businesses after entering the White House. Per ProPublica, those two are “the only people who know the details of the Trump trust’s finances.”

Weisselberg’s official duties, according to Trump’s descriptions in “Think Like A Billionaire,” included negotiating with financial institutions, tracking sales and acquisition of properties, and arranging for checks for Trump to sign.

Trump commended Weisselberg as “one of the toughest people in business when it comes to money” who helped him secure cash flows when his company was caught up in bankruptcy proceedings in the 1990s.

“When I was having some financial problems in the early 1990s, I called Allen into my office and told him there would be tough times ahead,” Trump wrote. “The banks were about to cut off our funding. Allen said, ‘No problem,’ and went back to his office, where he proceeded to renegotiate almost every payment from that point forward. He did whatever was necessary to protect the bottom line—and refused to succumb to the pressures of risk.”

“Now he’s negotiating with bankers on deals worth hundreds of millions of dollars, and he’s so tough that most banks would rather I negotiate the deal than him. He’s a loyal employee, and he’s the ultimate master at playing the cards of business,” he continued.

An anecdote in a 2016 New York Times story illustrates Weisselberg’s ability to play hardball. Lawyer Y. David Scharf told the Times that in the mid-2000s he contacted the company seeking payment for $470,000 in legal bills, and accidentally included one page of a bill intended for another client. An irate Weisselberg threatened to divulge the error to that other client unless the firm agreed to a 50 percent discount on the outstanding legal bills, per the account. The firm reportedly informed Weisselberg that his threat “smack[ed] of extortion,” and the parties resolved the matter.

Personal affairs and payouts to women

Weisselberg’s role as CFO involved handling some personal matters for Trump as well.

That included overseeing household expenses and personal purchases and, for a time, preparing Trump’s own tax returns.

More controversially, they also allegedly involved handling payments to women who claim to have carried out affairs with Trump. Weisselberg arranged for the Trump Organization to reimburse Cohen for the $130,000 hush money payment made out to adult film star Stormy Daniels. Though a source close to Weisselberg told the Wall Street Journal that he didn’t know about the payout to Daniels, Weisselberg personally approved a $35,000 monthly retainer to Cohen.

On a secret 2016 recording made public last week, Cohen also assures Trump that he “spoke to Allen” about financing a deal with American Media Inc. to buy the rights to former Playboy model Karen McDougal’s account of her alleged affair with Trump.
“I’ve spoken to Allen Weisselberg about how to set the whole thing up,” Cohen said.

Signing checks for the “sham” Trump University

Weisselberg was intimately involved in handling the finances for Trump University, the defunct for-profit real estate seminar that was forced to pay out $25 million to former students who claimed they were defrauded.

In a Saturday CNN op-ed, Tristan Snell, the former New York assistant attorney general who helped oversee a state fraud investigation into the university, wrote that his probe “revealed that amid the sprawling tentacles of the Trump Organization, everything leads back to two people: Allen Weisselberg and Donald Trump.”

Along with Trump’s three eldest children and Trump himself, Weisselberg was one of five authorized signatories for the Trump University bank account. He “personally reviewed all of the finances” of the organization monthly, and was the only individual permitted to issue payments or transfer money, according to Snell.

“In order for Trump University LLC vendors to be paid, Trump University checks had to be sent from Trump University LLC at 40 Wall Street to Trump Organization Chief Financial Officer Allen Weisselberg at the Trump Tower on Fifth Avenue, for his review and signature,” the New York attorney general’s office noted in court documents.

Helping Trump pay himself through the Trump Foundation

Weisselberg served as treasurer for the Donald J. Trump Foundation, which was sued by the New York attorney general’s office in June for engaging in “a pattern of persistent illegal conduct.”

Though he was not named as a defendant, Weisselberg sat for a deposition in that investigation and admitted to engaging in various activities that violated state and federal non-profit laws against self-dealing.

One incident involved a $100,000 donation that the foundation made to settle a suit brought by the city of Palm Beach against Trump’s Mar-a-Lago estate. A handwritten note from Trump included in the petition directs “Allen W” to use the charity’s funds to resolve the suit.

Weisselberg also helped handle a series of payments the foundation made to veterans’ groups during the 2016 presidential campaign, violating laws that prevent non-profits from engaging in explicitly political activity. In his deposition, he described flying to Iowa in January 2016 with the foundation’s checkbook for a campaign event held shortly before the caucuses there.

“He’s my boss. I went,” Weisselberg told prosecutors in explaining his last-minute trip.

Overseeing Trump’s troubled Atlantic City empire

Weisselberg was named vice president of Trump’s Atlantic City, New Jersey casino empire in 2000, according to the Wall Street Journal. His appointment at Trump Hotels & Casino Resorts, which in 2004 changed its name to Trump Entertainment Resorts, came after years of financial troubles and accounting scandals.

As the Journal reported, the company was forced to agree to a Securities and Exchange Commission cease-and-desist order, and filed for multiple corporate bankruptcies before becoming a subsidiary of Icahn Enterprises in 2016.

Serving on the board at Miss Universe

Weisselberg served on the board of the Miss Universe Organization after Trump purchased the pageant in 1996. Though little has been reported on Weisselberg’s involvement with the company, Trump’s 2013 trip to Moscow for the Miss Universe pageant there has come under scrutiny as part of investigations into the links between Russia and the President’s associates. Cohen traveled along on that trip, where Trump met with various Russian oligarchs to discuss possible business ventures.

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Prosecutors believe former Trump campaign chairman Paul Manafort made $60 million doing consulting work in Ukraine — a “significant percentage” of which he allegedly did not report on his tax returns — according a Monday court filing by special counsel Robert Mueller.

The filing was opposing the move by Manafort’s attorneys to exclude from trial a wide swath of evidence related to his Ukraine work, which began around 2005 and started to die down in 2014. The Virginia trial starts on Tuesday.

Manafort has been charged with bank fraud and tax fraud. Prosecutors argue that the ouster of his top Ukrainian client, ex-President Victor Yanukovch, from the country in 2014 led to a significant drop in Manafort’s income, and that “is relevant to the bank frauds that he later committed.”

The prosecutors argued in Monday’s filing that Manafort’s attorney had not followed U.S. District Judge T.S. Ellis’ directions in seeking to exclude the evidence. The prosecutors said the evidence was need to prove the extent of the work Manafort performed to earn the allegedly unreported income, and to show in particular the oligarchs who allegedly paid Manafort through foreign accounts. Among the charges Manafort is facing is failure to register foreign bank accounts with the government.

Prosecutors pointed to documents that Manafort is seeking to throw out that show his relationship with the oligarchs, includung Sergei Lyovochkin, Andriy Klyuyev, Borys Kolesnikov and Rinat Akhmetov, according to the Mueller filing.

Manafort has pleaded not guilty.

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In an August 2017 email exchange with a top aide about adding a citizenship citizenship question to the census form, Commerce Secretary Wilbur Ross said he would call Attorney General Jeff Sessions if the Justice Department had not “come to a conclusion” in its “analysis.”

The email, among the thousands of pages of documents released late last week as part of the litigation over the addition of the citizenship question to decennial form, was just one of a number showing Ross’ eagerness to see the question included on the 2020 survey — even before the Trump administration finished formulating the ostensible reason for why it was needed.

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LiveWire

It's Lonely In The Minority

Now that they’re in the minority, this is the press corps covering House Republicans…