Dozens of interviews, court filings and other documents show Mr. Kilimnik to be an operator who moved easily between Russian, Ukrainian and American patrons, playing one off the other while leaving a jumble of conflicting suspicions in his wake. The effort to disentangle the mysteries surrounding him seems likely to leave questions even after the conclusion of the special counsel’s work.
To American diplomats in Washington and Kiev, he has been a well-known character for nearly a decade, developing a reputation as a broker of valuable information like the alliances of Ukraine’s oligarchs and the country’s handling of foreign investment and sensitive criminal cases.
.. Prosecutors have also scrutinized the effort by Mr. Manafort and Mr. Kilimnik to drum up political consulting business with Kremlin-aligned political figures in Ukraine and Russia who were pushing plans to end the simmering conflict between the countries.
Those so-called peace plans could have resulted in the easing of sanctions imposed on Russia by the United States — a policy shift to which Mr. Trump had signaled an openness during the campaign and one that would have been a major foreign policy victory for the Kremlin.
.. To some of those he encountered, he was an impish, 5-foot-tall cynic whose American associates nicknamed him “Carry-on” or “KK” and who was rejected for a job with an oil company in Moscow in late 2003 or early 2004 because he was seen as too meek.
At the same time, he did little to defuse long-running suspicions that he was a Russian agent. And his involvement in discussions related to back-channel peace negotiations between Ukraine and Russia attracted attention from President Barack Obama’s National Security Council, which saw him as a functionary for oligarchs working to sell out Ukraine to Moscow’s benefit, a former United States official said.
Mr. Kilimnik, 49, who has Russian citizenship, now lives in Moscow. He is unlikely to ever face obstruction of justice charges that the special counsel brought against him and Mr. Manafort. And the once chatty operative — who was known for kibitzing with reporters, diplomats and political consultants over WhatsApp and in the bar of the Hyatt hotel in Kiev — has gone dark.
Mr. Kilimnik quickly made himself indispensable to Mr. Manafort, who spoke neither Ukrainian nor Russian. At the time, Mr. Manafort worked as a political and business consultant to the Ukrainian steel and coal oligarch Rinat L. Akhmetov, as well as the Russian aluminum oligarch Oleg V. Deripaska.
Mr. Kilimnik traveled extensively with Mr. Manafort, accompanying him to all his meetings and eventually becoming known as “Manafort’s Manafort” in Kiev.
“Paul took Konstantin under his wing, not just as a protégé but as his own surrogate son,” Mr. Caputo said.
Mr. Gates, who joined Mr. Manafort’s Ukraine team the year after Mr. Kilimnik and has since pleaded guilty to charges brought by Mr. Mueller stemming from his work there, later told an associate he knew that Mr. Kilimnik was a former officer with the G.R.U., according to a court filing by Mr. Mueller’s team.
In a February 2017 interview with The New York Times in Kiev, Mr. Kilimnik denied ever serving in a Russian intelligence agency. “What would I do if I were a real Russian spy?” he said. “I would not be here. I would be in Russia.”
But for the politicians and oligarchs who were Mr. Manafort’s clients, Mr. Kilimnik’s suspected intelligence connections suggested a seal of approval from Moscow. That was an important selling point, especially when combined with Mr. Manafort’s connections. The perception in political circles in Kiev was that hiring Mr. Manafort’s team would open doors in Washington and Moscow.
Mr. Akhmetov persuaded Mr. Manafort to try to resuscitate the political career of the former Ukrainian prime minister Viktor F. Yanukovych, a Russia-aligned figure who lost the 2004 presidential election amid allegations of vote-rigging.
In Mr. Yanukovych’s Party of Regions, Mr. Kilimnik was “known as the representative of Russia,” said Taras V. Chernovyl, a former party member.
With help from Mr. Manafort and Mr. Kilimnik, Mr. Yanukovych won the presidency in 2010.
Mr. Manafort, who was not known for spreading the wealth among his subordinates, paid Mr. Kilimnik $530,000 for “professional services and administrative overhead for Kiev operations” from June 2013 to January 2014, according to Justice Department lobbying filings, which show that Mr. Manafort’s company was paid $17 million over a two-year stretch around that time.
.. By then, Mr. Kilimnik was married with two children. His family lived in a modest house not far from Sheremetyevo International Airport in Moscow, where he traveled most weekends. But he lived a parallel life in Kiev, where he embraced trappings of his boss’s jet-setting lifestyle, trading the khakis and sweaters he wore at I.R.I. for tailored suits, a chauffeur-driven German car and evenings at an estate with a pool.
Things started going south for Mr. Yanukovych and, by extension, Mr. Manafort and Mr. Kilimnik, in late 2013, as mass protests erupted over the government’s corruption and pivot toward Russia. Mr. Yanukovych stepped down and fled in February 2014, eventually arriving in Moscow.
Russia began a military incursion into eastern Ukraine in 2014. And Mr. Kilimnik leveraged his access to American diplomats for a new endeavor.
He turned up in Donetsk as the city was slipping into war, presenting himself as having “the State Department’s ear, the American ear in general,” said Aleksei Kovzhun, a member of a group of pro-Ukrainian political advisers working there.
.. Mr. Kilimnik joined their ranks, and in emails reviewed by The Times, he encouraged them to appease the Russian-speaking population, who, he wrote, merely wanted “stable work, good salaries and a turn to the better for their children.”
The American Embassy was overly focused on the Russian military threat, he said. “The whole American Embassy is counting barricades,” he wrote, adding about the United States diplomats he was in contact with, “the idiots.”
In hindsight, Mr. Kovzhun said, “I can see that he could easily be a Russian agent who just came to monitor the situation, and be in the center of pro-Ukrainian power in the region.”
With their primary benefactor in exile, Mr. Manafort and Mr. Kilimnik sought business with Russia-aligned factions that arose from the ashes of Mr. Yanukovych’s party.
A common goal for these factions was to pursue initiatives to settle the Ukraine conflict on terms seen by many in the country as favorable to Russia, and as an opening for an effort to persuade the United States and its allies to lift sanctions on Moscow.
Among the Russia-aligned Ukrainians they advised was Oleksandr V. Klymenko, who was a minister in Mr. Yanukovych’s government. Mr. Manafort and Mr. Kilimnik discussed plans to conduct polling in connection with a possible bid by Mr. Klymenko for president of Ukraine in 2019, even though he was living in exile in Moscow and under European Union sanctions, according to three people briefed on their activities.
Another client was a party backed by Serhiy Lyovochkin, a television company owner who served as Mr. Yanukovych’s chief of staff. The party, known as Opposition Bloc, had fallen behind in paying Mr. Manafort’s invoices, according to Mr. Kilimnik and other people familiar with the situation, and the pair hoped to persuade Mr. Lyovochkin to turn the spigot back on.
.. The situation was on Mr. Kilimnik’s agenda when he headed to the United States within a month of Mr. Manafort’s joining the Trump campaign, telling associates in Kiev that he also hoped to meet with Mr. Trump and to potentially work with his campaign in some capacity.
A White House spokesman said Mr. Trump was introduced to thousands of people during the 2016 campaign. While it is possible he met with Mr. Kilimnik, “the president has no recollection of it,” the spokesman said.
Around the time of Mr. Kilimnik’s trip to the United States in spring 2016, Mr. Manafort directed Mr. Gates to transfer some polling data to Mr. Kilimnik, including public polling and some developed by a private polling company working for the campaign, according to a person with knowledge of the arrangement.
Mr. Manafort asked Mr. Gates to tell Mr. Kilimnik to pass the data to Mr. Lyovochkin and Mr. Akhmetov, the person said. Representatives for both Mr. Lyovochkin and Mr. Akhmetov said they neither requested nor received the data, and would have had no use for it.
Mr. Mueller’s team has focused on what appears to have been another discussion about polling data in New York on Aug. 2, 2016. A partly redacted court transcript suggests that Mr. Gates, who entered a plea agreement with the special counsel that requires his cooperation, may have told prosecutors that Mr. Manafort had walked Mr. Kilimnik through detailed polling data at a meeting that day in the cigar lounge of the Grand Havana Room in Manhattan.
.. The meeting also included a conversation about one Ukrainian “peace plan,” according to court filings.
Prosecutors contend that Mr. Manafort lied to them about the meeting and other interactions with Mr. Kilimnik. Those lies, a federal judge ruled, violated Mr. Manafort’s agreement to cooperate with prosecutors in exchange for consideration of a reduced sentence related to his work in Ukraine.
Mr. Manafort’s lies about his interactions with Mr. Kilimnik gave “rise to legitimate questions about where his loyalties lie,” Judge Amy Berman Jackson said.
.. Just before Mr. Manafort was forced to resign from the Trump campaign in mid-August 2016 amid scrutiny of his work in Ukraine, the F.B.I. opened an investigation into the campaign’s possible ties to Russia.
It led to a guilty plea by Mr. Trump’s first national security adviser, Michael T. Flynn, for lying to the F.B.I. about conversations with the Russian ambassador related to the sanctions.
By the inauguration, investigators were focusing on Mr. Kilimnik and his connections to Mr. Manafort.
Yet Mr. Kilimnik again traveled to the United States for Mr. Trump’s inauguration, meeting in the Washington area with Mr. Manafort, according to Mr. Mueller’s team.
.. While the trip was not publicly revealed until nearly two years later, it was on the F.B.I.’s radar. Peter Strzok, the agent who oversaw the bureau’s investigation of Russian interference in the election until he was reassigned and later fired for sending text messages critical of Mr. Trump, expressed frustration when he learned that Mr. Kilimnik had come and gone without being interviewed by agents.
Yet Mr. Kilimnik again traveled to the United States for Mr. Trump’s inauguration, meeting in the Washington area with Mr. Manafort, according to Mr. Mueller’s team.
While the trip was not publicly revealed until nearly two years later, it was on the F.B.I.’s radar. Peter Strzok, the agent who oversaw the bureau’s investigation of Russian interference in the election until he was reassigned and later fired for sending text messages critical of Mr. Trump, expressed frustration when he learned that Mr. Kilimnik had come and gone without being interviewed by agents.
“Everything is completely falling off the rails,” Mr. Strzok wrote in a text to a colleague on Jan. 23, 2017 — three days after the inauguration — referring to the missed opportunity.
The month after the inauguration, Mr. Kilimnik and Mr. Manafort met again and discussed a poll being planned for Mr. Klymenko’s prospective presidential campaign, according to court filings and interviews.
The poll was not conducted, according to people familiar with the arrangement, and Mr. Klymenko ultimately did not run.
In previously unpublished messages to The Times around the time of that meeting, Mr. Kilimnik suggested that the escalating news coverage was making him a target in both Ukraine and Russia.
“After another surge of attention, I am sure I will finally get on the radar screen of the Russian authorities,” he wrote.
Mr. Manafort’s allies point out that Mr. Mueller’s team has not publicly presented any evidence that Mr. Kilimnik is a Russian agent. They argue that it is unlikely that he is an agent because he was able to travel freely to the United States and deal regularly with its officials. To buttress this case, Mr. Manafort’s lawyers requested and received records from the government showing that Mr. Kilimnik communicated with officials at the American Embassy in Kiev.
“If he was a Russian intelligence asset, then the State Department officials who met with him over the years should be under investigation,” Mr. Caputo said.
many of us who write about Russia professionally, or who are Russian, have struggled to square what we know with the emerging narrative. In this story, Russia waged a sophisticated and audacious operation to subvert American elections and install a President of its choice—it pulled off a coup. Tell that to your average American liberal, and you’ll get a nod of recognition. Tell it to your average Russian liberal (admittedly a much smaller category), and you’ll get uproarious laughter. Russians know that their state lacks the competence to mount a sophisticated sabotage effort, that the Kremlin was even more surprised by Trump’s election than was the candidate himself, and that Russian-American relations are at their most dysfunctional since the height of the Cold War. And yet the indictments keep coming.
.. I mean that I’ve figured out how to think about what we know and not go crazy. The answer lies in the concept of the Mafia state. (And, no, I’m not invoking the Mob because Stone encouraged an associate to behave like a character from “The Godfather Part II,” as detailed in his indictment.)
As journalists who usually cover American politics have connected the dots of the story of Russian interference, those of us who normally write about Russia have cringed. Early on, it was common to point out that Paul Manafort, Trump’s former campaign manager, who is now under arrest, worked for Viktor Yanukovych, who is often characterized as the “pro-Russian President of Ukraine.” In fact, there was no love lost between Putin and Yanukovych. After he was run out of town, during the 2014 Ukrainian revolution, Yanukovych did seek refuge in Russia, but during his tenure as President he was an unreliable partner for Putin at best. Perhaps more to the point, he’s a crook and a brute. He served time for robbery and assault before he became a politician, and he is wanted in Ukraine for treason, mass murder, and embezzlement. A visitor to Ukraine can take a tour of Yanukovych’s palace, famous for its marble, crystal, immense scale, and a life-size solid-gold sculpture of a loaf of bread. Manafort made a career of working for the corrupt and the crooked. That in itself tells us little about Russia or its role in the 2016 campaign.
.. In media coverage, her e-mailing with a lawyer in the Russian prosecutor’s office was portrayed as evidence of a direct line to Putin, suggesting that she met with Trump’s campaign officials as his emissary. To me, it read as a lot of bluster on the part of a minor operator. From all the available evidence, and contrary to her sales pitch, Veselnitskaya did not have any dirt to offer on Hillary Clinton. To the extent that Veselnitskaya had established connections to high-level Russian officials, they were the kind that are necessary for a lawyer to be at all effective in a corrupt system.
.. We cringed at the characterization of the Russian online influence campaign as “sophisticated” and “vast”: Russian reporting on the matter—the best available—convincingly portrayed the troll operation as small-time and ridiculous. It was, it seems, fraudulent in every way imaginable: it perpetrated fraud on American social networks, creating fake accounts and events and spreading falsehoods, but it was also fraudulent in its relationship to whoever was funding it, because surely crudely designed pictures depicting Hillary Clinton as Satan could not deliver anyone’s money’s worth.
What we are observing is not most accurately described as the subversion of American democracy by a hostile power. Instead, it is an attempt at state capture by an international crime syndicate. What unites Yanukovych, Veselnitskaya, Manafort, Stone, WikiLeaks’s Julian Assange, the Russian troll factory, the Trump campaign staffer George Papadopoulos and his partners in crime, the “Professor” (whose academic credentials are in doubt), and the “Female Russian National” (who appears to have fraudulently presented herself as Putin’s niece) is that they are all crooks and frauds. This is not a moral assessment, or an attempt to downplay their importance. It is an attempt to stop talking in terms of states and geopolitics and begin looking at Mafias and profits.
The Hungarian sociologist Bálint Magyar, who created the concept of the “post-Communist mafia state,” has just finished editing a new collection of articles called “Stubborn Structures: Reconceptualizing Post-Communist Regimes” (to be published by C.E.U. Press early this year). In one of his own pieces in the collection, using Russia as an example, Magyar describes the Mafia state as one run by a “patron” and his “court”—put another way, the boss and his clan—who appropriate public resources and the institutions of the state for their private use and profit. When I talked to Magyar on the phone on Monday, he told me that Trump is “like a Mafia boss without a Mafia. Trump cannot transform the United States into a Mafia state, of course, but he still acts like a Mafia boss.” Putin, on the other hand, “is a Mafia boss with a real Mafia, which has turned the whole state into a criminal state.” Still, he said, “the behavior at the top is the same.”
The Mafia state is efficient in its own way. It does not take over all state institutions, but absorbs only the ones necessary for extracting profit. Some structures therefore continue to work as though they were part of a normal state. This may explain why we saw the official Russian foreign-policy establishment preparing, in the lead-up to the 2016 election, for a working relationship with the presumed Hillary Clinton Administration.
When we think about a normal state, Magyar told me, “the assumption is that the state acts in the public interest, and if that doesn’t happen, that’s a deviation.” That is true of how we think about democracies but also, to a large extent, of how we think about dictatorships as well: the dictator positions himself as the arbiter and sole representative of the national interest. A Mafia state, on the other hand, acts only in the personal profit-seeking interests of the clan. “That’s not a deviation,” Magyar said. “It’s a substantive, structural characteristic of the state. The state itself, at the top, works as a criminal organization.”
When members of the American media cover the story of Russian meddling, they implicitly portray Russia as a normal state, and the influence operation as an undertaking of the state aimed at furthering Russia’s national interests. This strikes Russians as absurd. By the measure of national interest, the Trump Presidency has been disappointing for Russia. Most of what Trump has given the Russian state has come through inaction:
- he has barely reacted to continued Russian aggression in Ukraine;
- he has failed to support nato; and
- he has said that the U.S. will withdraw from Syria, although it looks like the withdrawal is unlikely to be fast or total.
At the same time, diplomatic relations between Russia and the U.S. have deteriorated to the point of near-total dysfunction, and, despite considerable foot-dragging by the White House, the U.S. has continued to impose new sanctions on Russia.
By the metrics of a Mafia state, though, the Trump Presidency has yielded great results for Russia. A Mafia boss craves respect, loyalty, and perceived power. Trump’s deference to Putin and the widespread public perception of Putin’s influence over Trump have lifted Putin’s stature beyond what I suspect could have been his wildest dreams. As happens in a Mafia state, most of the benefit accrues to the patron personally. But some of the profit goes to the clan. Over the weekend, we learned that the Treasury Department has lifted sanctions on companies that belong to Oleg Deripaska, a member of Putin’s “court” who once lent millions of dollars to Manafort. If a ragtag team employed by or otherwise connected to the Russian Mafia state tried to aid a similar collection of crooks and frauds to elect Trump—as it increasingly looks like they did—then the Deripaska news helps explain their motivations. The story is not that Putin is masterminding a vast and brilliant attack on Western democracy. The story, it appears, is that the Russian Mafia state is cultivating profit-yielding relationships with the aspiring Mafia boss of the U.S. and his band of crooks, subverting democratic institutions in the process.
At first glance, the Georgian war ten years ago this month and the global financial crisis that erupted the following month seem unrelated. But this is to neglect the deeper currents driving the confrontation in the Caucasus.
The absorption of post-communist Europe into the West was not simply a matter of velvet revolutions. What Bush’s defense secretary, Donald Rumsfeld, called “new Europe” – the post-communist NATO allies and European Union members – depended on hundreds of billions of dollars in investment. The loans came from the same European banks that helped fuel the US real-estate boom and inflate the even bigger housing bubbles in the United Kingdom, Ireland, and Spain. The most extreme real-estate inflation in the world between 2005 and 2007 was on NATO’s Eastern frontier in the Baltics.
.. But it was not only the Soviet Union’s former satellites that benefited from the debt-fueled global boom. The authority and power of Putin’s regime, too, was (largely) a function of globalization – specifically, the huge surge in oil prices. In 2008, it seemed that Russia’s state-controlled energy giant Gazprom, benefiting from unprecedented growth in emerging-markets demand, led by China, might soon become the world’s largest corporation.
.. The EU insists on the innocence of its model of integration. The goal is peace, stability, and the rule of law, not geopolitical advantage, its senior representatives guilelessly maintain. Whether or not they truly believe it, the EU’s new post-communist members saw it differently. For them, NATO and EU membership were part of an anti-Russian package, just as they had been for West European countries in the 1950s.
.. Although Ukraine, too, applied for NATO membership in 2008, it did not provoke Russian intervention. But the war in Georgia split the Ukrainian political class three ways, between those who favored alignment with the West, those who favored Russia, and those who preferred a policy of balance. These tensions were further exacerbated by the impact of the financial crisis.
No part of the world economy was hit harder by that crisis than the former Soviet sphere. When global lending imploded, the most fragile borrowers were cut off first. Followed closely by a collapse in commodity prices, it dealt a devastating shock to the “transition economies.”
.. As one of the world’s largest oil and gas exporters, Russia was one of the worst affected. But after the humiliation of the financial crises of the late 1990s, Putin had seen to it that Russia was armed with substantial dollar reserves – the third largest after China and Japan. Reserves of $600 billion enabled Russia to ride out the storm of 2008 without external help.
The same was not true of its former satellites. Their currencies plunged. Interest rates soared. Inflows of foreign capital stopped. Some found themselves turning to the International Monetary Fund (IMF) for help.
In fact, the impact of the 2008 crisis split Central and Eastern Europe. The political leadership of the Baltic states toughed it out, accepting savage austerity to continue on their path toward euro membership. In Hungary, the governing parties were discredited, opening the door to Prime Minister Viktor Orbán’s illiberal regime.
.. But no country in the region was strategically more important, more fragile politically, or worse hit economically than Ukraine. In a matter of weeks, Ukraine was dealt a devastating one-two punch by the war in Georgia and the financial crisis. This opened the door to the successful presidential candidacy of pro-Russian Viktor Yanukovych in 2010
and set in train desperate financial negotiations with the IMF, the EU, and Russia, culminating in the crisis of 2013. Given current talk of trade wars, it bears recalling that it was an argument over Ukraine’s association agreement with the EU that led to Yanukovych’s overthrow and an undeclared war with Russia.
.. The events of August and September 2008 taught two painful and deeply disconcerting lessons. First, capitalism is prone to disasters. Second, global growth did not necessarily strengthen the unipolar order. Truly comprehensive global growth breeds multipolarity, which, in the absence of an overarching diplomatic and geopolitical settlement, is a recipe for conflict.
Today all eyes are on Asia, the rise of China, and its growing influence across Eurasia, Africa, and Latin America. But Putin’s Russia continues to be a spoiler. So we should not forget the Georgian crisis of August 2008, when it first became obvious how dangerous the new global economic dispensation might become.
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.
This week, the Trump administration further eased its pressure on Rusal, Russia’s largest aluminum company, less than four months after sanctions on it and its notorious leader were imposed. Even as the White House seems willing to inflict pain on American farmers and consumers with its trade wars, Russian aluminum workers are apparently worthy of special protection.
.. Rusal is controlled by Oleg Deripaska, a member of Mr. Putin’s inner circle. As the Treasury Department acknowledges, he has been investigated for
- money laundering and accused of
- threatening the lives of business rivals,
- illegally wiretapping a government official and
- taking part in extortion and racketeering.
.. There are also allegations, made public by the Treasury Department’s Office of Foreign Assets Control, that Mr. Deripaska
- bribed a government official,
- ordered the murder of a businessman and
- had links to a Russian organized crime group. During the 2016 presidential campaign,
- Paul Manafort, then Mr. Trump’s campaign manager, tried to offer Mr. Deripaska private briefings about the campaign.
.. Treasury Secretary Steven Mnuchin has said he is considering lifting the sanctions altogether because they are punishing the “hardworking people of Rusal.” But Mr. Mnuchin has it backward. If he was truly concerned about Rusal’s 61,000 employees, he would not relent until the company fully washed its hands of Mr. Deripaska and the corrupt regime the aluminum giant serves.
.. Behind Mr. Deripaska’s estimated fortune of as much as $5.3 billion, there stands a great crime. During the “aluminum wars” of the 1990s, when that economic sector was consolidating in the chaotic privatization that followed the collapse of the Soviet Union, the young metals trader was suspected of ties to gangsters as he seized control of huge Siberian smelters. According to testimony by a gang member in Stuttgart, Germany, part of Mr. Deripaska’s value to the group were his links to Russia’s security services. While his rivals were killed off or fled Russia, Mr. Deripaska somehow emerged as the director general of Rusal, a company that reported revenues last year of nearly $10 billion. But suspicions that the oligarch has had links to organized crime have denied him a visa to enter the United States.
.. they must do its bidding, which in Mr. Deripaska’s case meant spending more than $1 billion, through his holding company, on new infrastructure for the 2014 Winter Olympics in Sochi, Russia
Mr. Deripaska has embraced his role, stating that he does not separate himself from the Russian state.
.. Manafort tried to pitch him a plan for an influence campaign to “greatly benefit the Putin government.”
.. “Rusal’s own website says that it supplied military material to the Russian military that was potentially used in Syria.”
.. Mr. Deripaska’s holding company, hired a $108,500-a-month lobbyist to continue to negotiate with the Treasury Department. The firm he chose, Mercury Public Affairs, is the firm Mr. Manafort paid $1.1 million to lobby members of Congress on behalf of Ukraine and its then-president, Viktor Yanukovych
.. Led by David Vitter, a former Republican senator from Louisiana, Mercury has sought to enlist support from ambassadors of France, Germany and Australia, among others.
.. emanding more time to reduce the oligarch’s ownership stake in En+ from 70 percent to below 50 percent. In a July 24 filing with the Justice Department, Mercury outlined a host of calamities that might be unleashed if sanctions aren’t eased
- The global aluminum market might suffer significant disruptions with “severe collateral damage to United States interests, allies”;
- En+ might have to entertain a potential acquisition by “Chinese and/or other potentially hostile interests”; or
- Mr. Deripaska might just hang on to his majority stake.
.. The specter of a fellow traveler with gangsters dictating terms to the United States government is yet another sign of the Trump administration’s inexplicable capitulation to Russia.
.. July 16 summit in Helsinki, at which President Trump and President Putin met privately for more than two hours.
We don’t know what they discussed, but given the stakes on both sides, there’s a good chance that the discussion touched on the subject of the sanctions the United States has imposed on Russia’s biggest aluminum company.
prosecutors charged that his personal fortune was propped up by years of lies to tax authorities and banks.
.. “A man in this courtroom believed the law did not apply to him,” Assistant U.S. Attorney Uzo Asonye told the jury. “Not tax law, not banking law.”
.. The defense, in rebuttal, said that Manafort was a victim of the deceptions of his former partner, now a government witness, and that any failure to pay taxes was inadvertent.
.. Manafort faces 18 charges of financial fraud, as prosecutors say he failed to pay taxes on some of the millions of dollars he made working as a strategist for a political party in Ukraine, and then lied to banks to get loans when those payments stopped.
.. Manafort collected more than $60 million between 2010 and 2014 from his Ukraine work, where President Viktor Yanukovych, an ally of the Kremlin
.. When Yanukovych had to flee Ukraine for Russia in 2014, Manafort’s “cash spigot” was shut off, the prosecutor said, and the political strategist set out to generate money by lying to banks on loan applications.
.. Asonye’s efforts to paint Manafort as a free-spending tax cheat were interrupted more than once by U.S. District Judge T.S. Ellis III, who noted “it isn’t a crime to be profligate in your spending.”
.. The prosecutor said the charges boil down to “one simple issue: Paul Manafort lied.”
.. Manafort’s defense lawyer Thomas Zehnle said the case was about “taxes and trust,” and that the real liar was not Manafort, but his former right-hand man, Rick Gates.
.. “Mr. Manafort placed his trust in the wrong person,” Zehnle said, arguing that his client built “one of the most successful political consulting and government relations shops in Washington,” while also working on “the global stage.”
.. Zehnle said 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. That comment was met with audible sneers from a few members of the gallery. Protests in Ukraine were first triggered in late 2013 by Yanukovych’s decision to not sign an E.U. association agreement, an embrace of the West that Russia opposed.
.. Zehnle said Manafort also never intentionally deceived the IRS about his income and that his client made mistakes, not realizing 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. The lawyer also said that earlier in the investigation, Manafort willingly sat down with FBI agents investigating the misuse of funds in Ukraine
.. Manafort’s defense strategy appears aimed at the credibility of Gates, the star witness against him, by accusing Manafort’s onetime protege and partner of embezzling millions of dollars.
“Rick Gates had his hand in the cookie jar, and he couldn’t take the risk that his boss might find out,” Zehnle said. He said Gates prevented other people involved in Manafort’s finances — accountants and bookkeepers — from sharing information about the accounts with each other.
.. Manafort had hired great people, he said, and had “substantial resources. . . . I was really impressed by him.”
Devine said Yanukovych won the presidency in 2010 because of the “excellent campaign that Paul ran.” Devine said he produced TV commercials and wrote speeches for Yanukovych, earning $500,000 and a bonus of $100,000 when Manafort’s client won.
.. While working on the campaign, Devine met other Manafort associates who have since come under investigation, including Gates and Konstantin Kilimnik, a Russian citizen. At the time, Devine said, Kilimnik worked as a translator. Prosecutors have said Kilimnik has ties to Russian intelligence, and they accused him and Manafort of trying to tamper with witnesses earlier this year.
Devine said Manafort was clearly the boss in his relationship with Gates, though they were partners.
“Paul was in charge,” Devine said. “Rick worked for Paul.”
Did Mercury Public Affairs participate in a scheme to obscure its Ukrainian lobbying?
.. Vin Weber, a former Republican congressman from Minnesota turned DC power-lobbyist, was a foreign policy adviser to presidential candidate Mitt Romney and in line for a top administration job, should Romney win the White House.
.. The work was lucrative—it ultimately netted Mercury more than $1.1 million—but problematic. It might have required Weber to register as a foreign agent for a regime known for its close ties to Russia, which Romney famously denounced as America’s top geopolitical threat. That, in turn, might have complicated Weber’s chances of landing a job in a Romney White House.
.. Prosecutors charge that Manafort and Gates arranged for a Brussels-based think tank, the European Centre for a Modern Ukraine, to be “the nominal client” of Mercury and the Podesta Group
.. the former congressman pushed for Mercury and Podesta to avoid registering with the Justice Department under the Foreign Agents Registration Act, or FARA, as agents for Ukraine.
.. The “Centre is funded by a group of Ukrainian business people,” not Yanukovych’s Party of Regions, a spokeswoman for the firm inaccurately told the Daily Beast at the time.
.. The Podesta Group eventually agreed to skip registering under FARA after insisting that the firms also obtain a written certification from the European Centre that it was not funded or controlled by a foreign government or a political party
.. It has kept up its foreign lobbying business, in recent months signing on as one of a number of DC firms lobbying for Qatar.
.. Last month, Mercury registered to represent the Turkey-US Business Council, a group formerly headed by a shadowy businessman, Ekim Alptekin, who in 2016 arranged for Michael Flynn to secretly work for Turkey
.. Gates and Manafort held weekly calls with Mercury and the Podesta Group “to provide them directions as to specific lobbying steps that should be taken,” and “both congratulated and reprimanded” the firms “on their lobbying work,”
.. allege that both Mercury and Podesta “were paid for their services not by their nominal client, the Centre, but solely through offshore accounts” controlled by Manafort.