Paul Manafort Trial: Gates Admits Having Affair as Defense Attacks Him

When one of the defense lawyers tried to suggest to Mr. Manafort’s tax accountant Monday that Mr. Gates had kept Mr. Manafort in the dark about his own finances, the accountant, Cynthia Laporta, pushed back.

“In most instances, it was clear that Mr. Manafort was aware what was going on,” she testified.

Mr. Gates’s statements reinforced that picture. He said that Mr. Manafort knew it was illegal not to report his foreign bank accounts to the Treasury Department but asked Mr. Gates to help him deceive his accountants so he could conceal income and pay less in taxes.

“I assisted Mr. Manafort in filing false tax returns,” Mr. Gates testified. “We didn’t report the income or the fact that the accounts existed.”

.. He said that some of Mr. Manafort’s income was disguised as loans from 15 shell companies that Mr. Manafort controlled, most of them in Cyprus.

..  Once that income dried up, the government alleges, Mr. Manafort, with Mr. Gates’s help, falsified financial records so he could obtain bank loans to maintain his opulent lifestyle.
..  Gates testified that Mr. Manafort also was paid $4 million a year to help Mr. Yanukovych govern after he was elected president in 2010.
.. while Mr. Yanukovych ran on a platform of integrating with the European Union, while also maintaining good relations with Russia, he eventually pivoted toward Moscow
.. Mr. Gates also said that two American lobbying firms — the Podesta Group and Mercury Public Affairs — assisted with their policy consulting efforts. Mr. Mueller’s team has referred cases related to the firms’ work to federal investigators in the Southern District of New York.
.. Mr. Manafort asked Mr. Gates to help arrange inauguration tickets and administration posts — including secretary of the Army — for a banker from whom Mr. Manafort is accused of fraudulently seeking loans, Mr. Gates testified.

.. Emails presented during Mr. Manafort’s trial showed that he sought the favors for Stephen M. Calk, the founder and chief executive of The Federal Savings Bank of Chicago. The bank began issuing loans that eventually totaled $16 million to Mr. Manafort in the days after Mr. Trump’s election based on false information provided by Mr. Manafort.

..  Mr. Gates said he was involved in discussions about nominating Mr. Calk to an economic advisory council.

.. Mr. Gates, 46, admitted Monday that he was guilty of a long list of crimes, including stealing hundreds of thousands of dollars from Mr. Manafort’s accounts by inflating his business expenses. He said that while he was helping Mr. Manafort hide income to evade taxes, and later to inflate his income to obtain bank loans, he was doing essentially the same on his own behalf.

..  In exchange for his cooperation, the government in February agreed to dismiss 22 criminal charges stemming from his involvement in the scheme for which Mr. Manafort is now on trial.

.. sentencing guidelines recommend a prison term of up to six years, he testified that prosecutors have agreed not to object if his defense attorney argues that he should receive probation.

Maria Butina is just the tip of the Russia iceberg

There is no right to bear arms in Russia, and under this regime there never will be. According to court papers, Butina nevertheless convinced some naive members of the National Rifle Associationthat she was a genuine activist. In doing so, she gained access to their world.

.. They were both seeking to assist political movements they believed to be pro-Kremlin (the Communist Party of the 1930s; the pro-gun wing of the Republican Party of the 2010s). They were both backed by Kremlin money, diverted through cutouts (the Communist International, in the former instance; a couple of Russian oligarchs, allegedly, in the latter).

.. Butina, even if considering only her role as an open, pro-Kremlin activist, also has many counterparts, agents of influence who are openly agitating for Russian interests, now on the far-right edge of Western politics instead of the far-left.

  • Gianluca Savoini, the leader of the enigmatic Lombardy-Russia Cultural Association, seems to perform a similar role in Italian politics, even showing up recently as a member of an official Italian government delegation to Moscow.
  • Bela Kovacs , a Hungarian member of the European Parliament, is on trial in Budapest on a charge of spying on European Union institutions on behalf of Russia.

.. they too are part of a long-term project, though it’s not a proletarian revolution. Instead, it’s a kleptocratic coup d’état: The modern Kremlin project seeks to undermine Western democracies, break up the E.U. and NATO, and put corrupt relationships rather than the rule of law at the center of international commerce.

.. it’s worth remembering why Golos and his network failed. In large part,

  • it was because the center-left — especially the anti-Soviet wing of the American trade union movement — rejected Soviet-style communism in the United States. It’s also because,
  • in the 1940s and 1950s, the American political establishment, Democratic and Republican, unified around the need to defeat Soviet-style communism in Europe. And it’s because,
  • even in the depths of the Depression, the majority of Americans were never beguiled by the appeal of authoritarianism.

.. A wing of the Republican Party is preparing to double down and support the Russian autocracy, which it believes, mistakenly, is “Christian.” 

.. To push back against them, as well as their equivalents from the rest of the autocratic world, we will need not only to catch the odd agent but also to

  • make our political funding systems more transparent, to
  • write new laws banning shell companies and money laundering, and to
  • end the manipulation of social media.

It took more than a generation for Americans to reject the temptations of communist authoritarianism; it will take more than a generation before we have defeated kleptocratic authoritarianism too — if we still can.

 

 

Hitting Putin Where It Hurts

But the prime minister should have gone in harder. If she really wanted to teach Russia a lesson, she should have announced measures allowing her government to scrutinize the billions of dollars invested in Britain by Russian oligarchs and their associates, some of whom have criminal or intelligence backgrounds. This kind of transparency would hit President Vladimir Putin and his allies where it hurts most: their bank accounts.

To this day, anybody from Mexican cartels to Saudi arms dealers to Russian oligarchs (and even American real estate magnates) can invest money in Britain through anonymous companies registered in Crown Overseas Territories like the British Virgin Islands. In London’s central borough of Westminster alone, some 10,000 apartments and houses are owned by companies whose proprietors are entirely unknown to the government.

.. In 2016, Mrs. May’s predecessor, David Cameron, was preparing legislationto force anonymous companies to reveal their real owners. Then he lost the referendum on Britain’s membership in the European Union.

.. Mrs. May probably has her reasons for not going forward with the law. She is the country’s weakest prime minister to assume office since World War II. Brexit has not only polarized public opinion but also created bitter divisions in her cabinet, and several ministers are open about their desire to take her place.

Because of this, she has had to handle the relationship with Russia after the murder attempt with great care. If she gets it wrong, her already enfeebled administration could collapse.

.. Mr. Putin may have realized how weak Mrs. May is, which is why he would decide to act now to take revenge on a man he sees as a traitor and to cause Britain new headaches.
Russia’s motivation is understandable. Its economy faces serious structural problems, including a dangerous overreliance on oil and gas. At the same time, business leaders are worried about the country’s long-term demographic decline. Mr. Putin seeks to bolster his domestic popularity by looking powerful as he sows discord with the West.
.. The government is reaping the dubious rewards of having opened the City of London since the late 1990s to foreign capital with no questions asked about its origin.
 The initial aim of this permissive approach was to persuade investors that London — rather than New York — was best suited to be the world’s financial capital. Among the many to take advantage of the light-touch regulations were oligarchs, spies and gangsters.
.. Russian oligarchs have made an indelible mark on London. Some own newspapers, others our most successful soccer clubs, while many more own huge chunks of high-end property in the most fashionable parts of the capital.
.. And some of those characters are close collaborators and friends of President Putin.
.. If Mrs. May is convinced that Russia is behind this attack, then she needs to devise a way of getting to President Putin’s friends and collaborators. And that means great transparency. She should reintroduce the stalled proposal to force anonymous companies to reveal the sources of their cash.

Banks Seek Government Help to Track Money Laundering

Industry, anticorruption groups support creating a Treasury-run database of corporations and their owners

Efforts to overhaul U.S. anti-money-laundering laws are gathering steam, as large banks, anticorruption groups and law-enforcement authorities coalesce around the idea of creating a national database of corporations and their true owners.

.. The financial industry’s support for the plan, which would require new and existing corporations to register with the Treasury Department’s Financial Crimes Enforcement Network, could be pivotal.

.. Treasury in 2016 issued a long-awaited rule mandating banks to identify the true owners of companies they take on as clients. It also urged Congress to create a national database of those owners, a step that proponents said would stymie the creation of shell companies by bad actors.

.. Instead of just applying to suspected money-laundering or terrorism-financing activity, the measure would include a long list of criminal activities, including food-stamp fraud, the smuggling of counterfeit goods and environmental crimes.

.. “What you don’t want is a situation where the [government] is able to get private and sensitive information without having to go through that normal process,” she added, citing requests for a warrant or court order.