Manafort indicted, political fallout expected

- The indictments of former Trump campaign chair Paul Manafort and his associate Rick Gates give the public a first glimpse into what has been largely secretive investigation by special prosecutor Robert Mueller.

"I would be willing to bet that is not all we're going to see. It's the opening message if you will," said UC Hastings Law Professor Rory Little, who has met Mueller many times and says Mueller is extremely skilled at handling complex cases.

Professor Little says the charges of conspiracy and money laundering could be a way of sending a message to others who've been interviewed by investigators, such as former national security advisor Michael Flynn.

"Make them all nervous and make them believe they need to get to the government  before they get charged and somebody else is testifying against them. So this is a real message sending thing and the fact that Flynn wasn't charged to me is quite significant," said Professor Little.

Trump immediately sought to distance himself after Manafort and Rick Gates pleaded not guilty to a 12-count indictment alleging money laundering, conspiracy and other offenses and as another former aide was revealed to be cooperating with authorities after entering a guilty plea for lying to the FBI. White House officials were publicly optimistic about Mueller's investigation wrapping up swiftly, but the probe is far from over and its reach still uncertain.

Trump has become increasingly concerned that the Mueller probe could be moving beyond Russia to an investigation into his personal dealings, two people familiar with the president's thinking said. Trump expressed irritation Monday morning that he was being tarnished by his former aides.

In the hours after the indictment, the president angrily told one confidant that Manafort had been a campaign "part-timer" who had only helped steer the convention and got too much credit for Trump's ability to hold onto the nomination, according to a person familiar with the private discussion. Those describing Trump's thinking or private discussions were not authorized to speak publicly about them and requested anonymity.

Trump dismissed the money-laundering charges against Manafort as typical political corruption that did not reflect on his campaign, one of the persons said. The president also insisted that the charges predated Manafort's time on the campaign and that he should not be held responsible for any prior misdeeds by Manafort. 

Trump took to Twitter to argue that allegations against Manafort were from "years ago" and asserted there was "NO COLLUSION" between his campaign and Russia. But the indictment against Manafort and Gates details allegations stretching from 2006 all the way to 2017.

And Trump's insistence that there was no collusion between his campaign and Russia was complicated by the revelation that campaign adviser George Papadopoulos was answering questions from prosecutors after admitting he lied about his unsuccessful attempts to broker a meeting between Trump and Russian President Vladimir Putin.

Mueller's office revealed in a court filing that Papadopoulos was now assisting the investigation as a "proactive cooperator."

Little says the unsealing of the guilty plea deal with George Papadopoulos could indicate prosecutors are getting more information about his time with the Trump campaign and whether there was any collusion with Russians in the 2016 election.

"That Papadopoulos agreement is something like 25 detailed pages of connection between someone in the Trump campaign, people in Russia and gathering dirt for the election," said Little.

The White House tried to play down the campaign role of Papadopoulos, whom Trump named as a foreign policy adviser in March 2016, saying the aide's attempts to earn assistance from Russian nationals were unauthorized. White House press secretary Sarah Huckabee Sanders dismissed him as an unpaid "volunteer" and said "no activity was ever done in an official capacity on behalf of the campaign in that regard."

Analyst Brian Sobel says even though the indictment shows no evidence of a link to President Trump and his closest associates, there could be political fallout 

"For a president who believes in extreme vetting, a little vetting might have gone a long way here," said Sobel.

Sobel says if there are more indictments, it could stall the Republican agenda 

"That's going to consume a lot of the oxygen in Washington DC and that's a problem because there are a lot of things Congress should be working on and the President should be working with Congress on," said Sobel.

Trump fumed in recent weeks that he believes Mueller was taking an expansive view of his role and looking beyond the narrow definition of alleged collusion between the Trump campaign and Russian officials. The president publicly mused in a July interview that he might look to fire the special counsel if Mueller began looking into his business dealings, a possibility that has weighed on him in recent weeks, according to two people who have spoken to him but were not authorized to discuss private conversations.

Trump tried a familiar ploy on Monday to shift attention to Democrats and his former rival, Hillary Clinton, asking on Twitter why they weren't subjects of Mueller's probe. But Trump's attempts to discredit the investigation by Mueller, a former FBI director, threaten to alienate him from Republican lawmakers, who have supported the inquiry.

Trump has at times chafed at his legal team's advice to be deferential to Mueller's investigation, toying with the notion of going on the offensive. Former Trump strategist Steve Bannon has encouraged the more aggressive approach, according to a person familiar with his thinking but not authorized to discuss it by name. 

The indictments of Manafort and Gates, his longtime protege, were largely anticipated by White House officials, who viewed the pair warily. And they expressed relief that Mueller's charges against the two didn't specifically pertain to Russia or Trump. Gates had been a key outside adviser, participating in meetings with White House officials as recently as last summer. The White House said Trump last recalled speaking with Manafort by phone in February.

Manafort held a critical role in Trump's campaign, spearheading his efforts to counter a concerted delegate challenge to his nomination in 2016. He had been recommended by Trump's inner circle: first by longtime Trump friend Tom Barrack, who then urged Ivanka Trump to lobby her father on Manafort's behalf. After the ouster of Corey Lewandowski as campaign manager in June 2016, Manafort became the de-facto campaign manager until he himself was pushed out in August 2016 over his lobbying work on behalf of pro-Russian officials in Ukraine. 

Gates remained part of the Trump campaign after Manafort's departure and took on a role planning Trump's inauguration under Barrack, for whom he has continued to work. He briefly was an adviser to the pro-Trump organization America First Policies.

An indictment unsealed Monday detailing conspiracy and money laundering charges against him suggests they certainly caught the eye of special counsel Robert Mueller.  

A luxury clothing store in New York is among 19 vendors Manafort paid some $12 million to between 2008 and 2014 from foreign bank accounts he didn't disclose, using offshore companies registered in countries such as Cyprus and the Grenadines to make the purchases, court papers allege. 

Besides the suits, Manafort used the money to buy antique rugs and art, make payments on three Range Rovers and install an $112,825 audio-visual system in his Hamptons home -- all without paying taxes on that income, the indictment charges. 

The 19 vendors aren't named in the indictment. But government investigators probing Manafort's work in the Ukraine and elsewhere have been curious about his six-figure spending on custom-made blazers and trousers for years, according to people familiar with the case.

For investigators, getting into the precise nature of what Manafort did in Ukraine posed plenty of problems, not least because of its distance from the U.S. and the reliability of sources there. A simpler approach was to demonstrate whether Manafort controlled overseas bank accounts that had never been reported to the IRS, and that he had spent that money in the United States.

At one point federal investigators theorized the purchases might have been on behalf of his clients from the former Soviet Union, whose reputations in the West Manafort was being paid to improve, said one of the people, who wasn't authorized to discuss the investigation and spoke on condition of anonymity.  

After FBI agents raided Manafort's Virginia home in July, investigators reportedly photographed the suits in his closet. Manafort spent nearly $900,000 at a luxury clothing store in New York dubbed "Vendor E" in court papers.

Documents obtained by The Associated Press show Manafort has made past payments to a New York tailor named Eugene Venanzi, whose former store on Manhattan's Fifth Avenue advertised in Trump Magazine and sold to fund managers, financiers and celebrities, court records show.   

In the span of just six days in July 2008, the records show, Manafort spent close to $100,000 on $8,500-a-piece custom cashmere and silk sport coats, bespoke trousers, multiple $7,000 suits and other items. 

Venanzi, who pleaded guilty in 1999 to a bank larceny charge, said in a 2007 deposition in a civil suit brought against the company by a former employee that the company never made any money and sometimes failed to pay payroll taxes. 

His former business partner, Anthony Fortunato, told the AP his business relationship with Venanzi soured and he put a lien on the tailor's Connecticut home to recover money he was owed.

Reached by phone on Monday, Venanzi, 74, said he'd not been contacted by the authorities but declined further comment before hanging up. 

In a deposition, he said he took a trip to Russia "to develop a market with certain clientele of Russian origin" but didn't pursue any deals there because he didn't feel safe there and "didn't want to take the risk." 

The indictment says Manafort also paid $520,440 to "Vendor H," a clothing store in Beverly Hills, California.

That might be a reference to the famed men's clothing store House of Bijan, where Manafort spent generously, according to someone familiar with his lifestyle. An email sent to the store wasn't immediately returned and calls to the store rang unanswered.

Daniel Alonso, the former chief of the criminal division in the U.S. Attorney's Office in Brooklyn, said paying for suits and other items in the U.S. via an offshore account registered in Cyprus was "a very, very odd way" to make such purchases. 

"A hallmark of money laundering is trying to make illegitimate money look legitimate," he said.  
 

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