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Why Manafort matters
This week, the man who was in charge of Donald Trump’s presidential campaign, Paul Manafort, is on trial in Virginia for bank fraud and filing false tax returns, among other charges. Next month in DC, Manafort will face trial for more charges, including conspiracy against the United States.
The official line from Donald Trump and the White House is that this trial has nothing to do with them or Robert Mueller’s investigation into the potential conspiracy between the Trump campaign and Russia.
Paul Manafort worked for Ronald Reagan, Bob Dole and many other highly prominent and respected political leaders. He worked for me for a very short time. Why didn’t government tell me that he was under investigation. These old charges have nothing to do with Collusion - a Hoax!August 1, 2018
The Manafort trial, which is ongoing, is surfacing information that raises serious questions about the Trump campaign and is clearly related to the broader Russia investigation.
How Manafort went broke
Manafort’s cash cow for more than a decade was Ukranian leader Viktor Yanukovych, who paid him millions for political advice. Rick Gates, Manafort’s deputy who is cooperating with prosecutors, testified that after Yanukovych was ousted in 2014 -- in part because of his efforts to cozy up to Russia -- Manafort’s cash flow “substantially decreased.” Efforts “to create work through a new Ukrainian political party, called the Opposition Bloc” were mostly unsuccessful.
Soon, Gates testified, Manafort -- who had become accustomed to a lavish lifestyle -- was having difficulty paying his bills.
According to Gates, Manafort’s company “did not acquire any new clients in 2015, and to his knowledge was not earning income in 2016.” Vendors to the company were reaching out, “indicating the bills had not been paid.”
Manafort, prosecutors say, was going to extreme measures to acquire cash, including falsifying tax returns and loan documents.
Out of cash, Manafort volunteers to work for free
This seems like an odd time to volunteer to run a presidential campaign, which is more than a full-time job, for no pay. But that’s precisely what Manafort did.
Manafort “wrote Donald Trump a crisp memo listing all the reasons he would be an ideal campaign consigliere—and then implored mutual friends to tout his skills to the ascendant candidate,” the Atlantic reported.
It worked. Manafort joined the Trump campaign on March 28, 2016.
“How do we use to get whole”
When Manafort joined Trump’s campaign, he owed Russian oligarch Oleg Deripaska about $18.9 million. Deripaska had invested the money in a private-equity firm started by Manafort. Around 2008, when Deripaska hit an economic rough patch, he asked Manafort to liquidate his position. Manafort never returned Deripaska’s money and, by 2011, stopped returning Deripaska’s phone calls.
As soon as Manafort joined the Trump campaign, he resumed contact with Deripaska’s team, passing on news clips about his powerful new role through a long-time associate, a Ukranian named Konstantin Kilimnik, who Mueller alleges has ties to Russian intelligence.
"How do we use to get whole," Manafort wrote Kilimnik about his new role, "Has OVD [Deripaska] operation seen?"
In July 2016, Manafort offered through an intermediary to provide “private briefings” to Deripaska about the presidential campaign. Deripaska’s jet landed in New York in August 2016, but a Deripaska spokesperson denies he traveled to the U.S. to receive briefings from the Trump campaign.
An obscure and sudden change to the GOP platform
With Manafort running the campaign, the Republican Party made a sudden and unexpected change to its political platform. Trump campaign operatives intervened to roll back an obscure provision in the draft platform which supported providing weapons to Ukraine to defend itself against Russian aggression.
...Trump staffers wrote an amendment… that stripped out the platform’s call for “providing lethal defensive weapons” [to Ukraine] and replaced it with softer language calling for “appropriate assistance.”
That amendment was voted on and passed. When the Republican Party releases its platform Monday, the official Republican party position on arms for Ukraine will be at odds with almost all the party’s national security leaders.
The role of the GRU
Manafort was forced to resign from his role on the Trump campaign in August, following a blockbuster report in the New York Times about ledgers showing “$12.7 million in undisclosed cash payments designated for Mr. Manafort from Mr. Yanukovych’s pro-Russian political party from 2007 to 2012.”
According to a document filed by Mueller’s team, Gates, Manafort’s deputy who remained on the campaign, had frequent phone calls in September and October 2016 with Kilimnik. Mueller described Kilimnik as “a former Russian Intelligence Officer with the G.R.U.”
Out of the campaign but still pulling strings
Still strapped for cash, Manafort also used Gates to call in favors for his lenders. Gates detailed these efforts during his testimony on Tuesday:
Prosecutor Greg Andres showed Gates emails from Manafort, which showed that Gates’s former boss requested that Gates use his position in the Trump campaign to offer a series of favors to Stephen Calk, the founder and CEO of Federal Savings Bank, one of the banks that extended Manafort a loan in 2016.
First, Calk’s name was added to a list of national economic advisers to the campaign. Then, in November 2016, Manafort wrote Gates, “We need to discuss Steve Calk for Sec of the Army. I hear the list is being considered this weekend,” indicating that he wanted Gates’ help getting Calk considered by the presidential transition for the cabinet-level job.
In December, Manafort sent an “urgent” email to Gates asking that Calk, who had loaned Manafort $16 million, and his son be invited to the inauguration.
Even after he was indicted, Manafort continued his communications with Kilimnik. According to Mueller, Manafort and Kilimnik repeatedly contacted two witnesses in the case to influence their testimony about the nature of their work for Manafort.
Mueller cited Manafort and Kilimnik’s communications as justification to revoke Manafort’s bail. Manafort has been incarcerated ever since.
The known and the unknown
There is still a lot unknown about Manafort’s conduct as campaign manager of the Trump campaign. But we know he was desperate for cash and attempted to leverage his position to settle a debt with a Russian oligarch and call in favors for his bankers. As campaign manager, he was in regular contact with a man that Mueller claims is connected to Russian intelligence.
Trump’s claims that the Manafort trial involves “old charges,” is entirely separate from Manafort’s role as campaign manager, and is irrelevant to the broader Russia investigation, are false.
If you like this newsletter, you’ll probably also like “Piping Hot Truth” by Amanda Terkel, a good friend and a great political reporter. She shares stories she's written, and other interesting stuff on the Internet. Publishes irregularly. You can sign up here.
CEOs get over Charlottesville, cozy up with Trump
What a difference a year makes.
Last August, many CEOs publicly broke with Trump after he described participants in a white nationalist march in Charlottesville as “very fine people,” resigning their positions from business advisory boards. On Tuesday night, several of these same executives dined with Trump at his golf club in New Jersey, according to a report by Politico.
Among the executives attending were PepsiCo CEO Indra Nooyi, who reportedly helped lead the effort to disband the White House Strategic and Policy Forum after Trump’s remarks.
Joining her was Johnson & Johnson CEO Alex Gorsky. Here’s what Gorsky said following Trump’s remarks last year:
The President’s most recent statements equating those who are motivated by race-based hate with those who stand up against hatred is unacceptable and has changed our decision to participate in the White House Manufacturing Advisory Council.
Also breaking bread with Trump was EY CEO Mark Weinberger, Boeing CEO Dennis Muilenburg, and International Paper CEO Mark Sutton. They all were members of White House advisory groups before Trump disbanded them amid rumors the CEOs would resign en masse.
Trump wins and loses
All eyes were on Ohio’s 12th district last night where Republican Troy Balderson faced off against Democrat Danny O’Connor in a special Congressional election. The election was only to determine who holds the seat for the rest of 2018. The candidates will face off again in November.
Interest in the race was mostly about what it might foretell more broadly about the outcome of the midterm elections in November.
The district is traditionally a Republican stronghold. Trump won the district by 11 points. Balderson, who was endorsed by Trump, leads by less than one percent with all precincts reporting. With provisional ballots still outstanding, the race was officially too close to call.
The Drudge Report portrayed this as a triumphant result for Trump.
Trump pronounced himself a kingmaker.
When I decided to go to Ohio for Troy Balderson, he was down in early voting 64 to 36. That was not good. After my speech on Saturday night, there was a big turn for the better. Now Troy wins a great victory during a very tough time of the year for voting. He will win BIG in Nov.August 8, 2018
Not only did Trump win #OH12 by +11% in 2016, but Republicans have lost a House race there only once (in 1980) since 1938.
A loss tonight would be devastating for the @GOP – it should not be this close.https://t.co/7fKrKOJaAF
Major caveat: November is still three months away. In politics, things can change very quickly. Three months is an eternity.
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