Paul Manafort pays his bills a little differently from most people—with wire transfers from banks in Cyprus and oddly named shell companies designed for maximum privacy. The defense hasn’t necessarily disputed the claim. The feds say it’s evidence Manafort was cheating on his taxes. So what’s the game plan for both sides?
Welcome to Rabbit Hole, reported from the Eastern District of Virginia courthouse, where your correspondent is camped out for the week.
They’ve got receipts: The prosecution’s most serious charges against Paul Manafort are the ones involving money—defrauding banks and hiding income from the IRS. The government alleges that he used a web of offshore shell companies based in Cyprus to take the proceeds he earned from his Ukraine political consulting and hide them from the government. In order to tie Manafort to those companies and prove that they were involved in hiding income, the feds introduced binders full of invoices and quizzed vendors who’d sold him everything from suits to houses about how he paid his bills.
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Idiosyncrasies: One of the key themes that cropped up in prosecutors’ questioning was that Manafort’s preference for paying his bills with international wire transfers from shell companies was bizarre, even in the rarefied world of conspicuous consumption he inhabited. Maximillian Katzman from Alan Couture told the court that Manafort was the only one of his roughly 40 customers who paid his bills that way. Tailors, a car salesman, a Realtor, a landscape architect, and a contractor all said that, while wire transfers are not unheard of, most customers paid by checks, credit cards, or other means.
The strategy behind the questions is clear: “Having foreign-based LLCs pay your bills isn’t just a weird thing that rich people do that you, normal Alexandria juror, haven’t heard about—it’s rare because it’s designed to hide income from the government.” The prosecution team is also trying to emphasize that these were personal expenses unrelated to Manafort’s businesses.
The Rick Gates wild card: The defense didn’t spend too much disputing evidence or engaging in lengthy cross-examination of the witness. That’s likely because much of their strategy rests on the claim that Manafort’s ex-business partner Rick Gates, now a cooperating witness in special counsel Robert Mueller’s Russia investigation, was playing games with Manafort’s finances unbeknownst to him.
Paul Manafort, cosmopolitan: To the extent the defense attempted to offer an explanation for their client’s suspect transfers, it came in the form of questions about Manafort’s globe-trotting as a political consultant. When cross-examining Katzman, defense counsel Jay Nanavati asked whether he knew that Manafort traveled a lot, whether he was aware Manafort’s bills would be late and his responses to emails scattershot because he was roaming about Europe advising politicians. It’s not a far leap to the obvious implication the defense is trying to tee up: Manafort paid his bills with international companies because he spent a lot of time abroad.
Preemptive strike: Prosecutors tried to head off that defense by repeatedly asking Manafort’s various vendors whether they’d done business or interacted with Gates in an attempt to show that it was Manafort, not Gates, who was aware of and arranging the offshore payments. Katzman from Alan Couture said he once bugged Gates to get Manafort to pay his bills after an invoice went unanswered, but the overall impression left from witnesses was that pretty much no one else knew Gates or did business with him.
Due diligence or death by detail? The line between the prosecution’s attempt to document Manafort’s use of offshore shell companies to pay his bills with unreported income and an attempt to make him suspect and unlikable because of his extravagance lies in the eye of the beholder.
In the case of Judge Thomas Ellis, that particular beholder is quite skeptical of the feds’ zeal for thoroughness. Prosecutors Greg Andres and Uzo Asonye repeatedly tried to introduce photo exhibits that depicted Manafort’s many suits (“closets full” of them, in the words of one FBI agent), their labels from bespoke tailors, pictures of the luxury Alexandria, Virginia, home where the the FBI served a warrant only to meet with increasingly irritated responses from Judge Ellis, who questioned their relevance and necessity with barbs like “you’re gilding the lily,” “enough is enough” and “all this document does is show that Mr. Manafort had a lavish lifestyle.”
Oligarchs: Before the jury came in, Judge Ellis went on something of a tear about the prosecution’s intent to use the word “oligarch” to describe Manafort’s Ukrainian clients for his political consulting firm. The term, according to Ellis, “has come to have a pejorative meaning” and would imply that Manafort “associates with despicable people and therefore he’s despicable.” Ellis first introduced a questionable analogy—“Principals in high schools are oligarchs”—before settling on a more relevant example by likening liberal financier George Soros and the conservative Koch Brothers to oligarchs under some definitions. His final word: “Find another term to use.”
The wit of Judge Ellis: If you took Statler and Waldorf, the elderly heckling Muppets from The Muppet Show, and put them on a federal bench, that’s the closest approximation you could get to Judge Ellis. He’s best described as an witty curmudgeon—quick-tempered with little patience and a sharp sense of humor he’s not afraid to aim at himself. When he wasn’t cutting off Asonye and Andres or telling them to hurry up, he was acting as courtroom comic relief. Here are a few of his quips:
- Telling a witness to speak more loudly: “My hearing doesn’t work so well anymore. Nothing works so well anymore.”
- Questioning the necessity of entering an invoice exhibit into evidence: “Is it just to show that Mr. Manafort is awash in money?”
- Characterizing the message conveyed from exasperated facial expressions of unnamed defense and prosecution attorneys: “Why do we have to put up with this idiot judge?”
- Instructing the jury on lunch protocol: “Your pheasant under glass will have been delivered.”
Atmosphere: The first day of the trial saw a carnival-like atmosphere outside the courthouse with #Resistance protesters, drummers, and other assorted eccentrics. Inside the courtroom, the jury—six men and six women—seem to have developed an early esprit de corps. Judge Ellis mentioned that there had already been a request that birthday cake be made available on Friday in apparent group celebration of an unnamed juror’s special day.
The Manaforts: Manafort’s wife, Kathleen, sat in the first row, attended by two friends as well as his former spokesman Jason Maloni. Manafort himself seemed in relatively good spirits under the circumstances and occasionally flashed a smile at the assembled well-wishers in the front row. Most of the day he spent hunched over the defense’s table, chatting and strategizing with his counsel. His two daughters, Andrea and Jessica, were not in attendance.
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