Mueller Team Makes Debut in Manafort Trial: Trump Legal Update

(Bloomberg) -- President Donald Trump continued to rage over Robert Mueller even as the special counsel’s team took center stage in a Virginia courtroom, painting Trump’s former campaign manager Paul Manafort as not just a big spender but a tax cheat and liar who deceived banks to get loans to fund a life of luxury.

While the judge sought to rein in prosecutors’ descriptions of Manafort’s spending habits, they still managed to regale the jury with tales of a $15,000 ostrich jacket and $2.2 million spent in home-entertainment systems. Manafort’s bookkeeper and accountant testified, backing up the case that he lied to the Internal Revenue Service and banks, leaving the defense to argue he wouldn’t have kept so much evidence around if he was trying to break the law.

These hazy days of August aren’t for the lazy in Trump’s legal world.

Manafort’s Speedy Justice

The pace of Manafort’s tax- and bank-fraud trial is blistering, with U.S. District Judge T.S. Ellis III forcing prosecutors to race through evidence and cutting them off when they spend too long on a topic. “The more I can do to shorten this thing the better,” Ellis told prosecutors. “Then you get to go home and I get to go home.” The prosecutors obliged, calling at least 12 witnesses in the first week, and still managing to tell the jury about Manafort’s extravagant lifestyle. One of Manafort’s accountants testified that her firm agreed to falsify his tax returns because he couldn’t afford the taxes. Prosecutors also elicited testimony from his bookkeeper and another accountant that supported charges Manafort lied on his taxes and bank-loan applications.

Manafort’s lawyers initially put the blame for any wrongdoing on his right-hand man, Rick Gates. But the bookkeeper and accountant testified Manafort was the one to give orders and controlled the finances. That left Manafort’s lawyers arguing at week’s end that Manafort wouldn’t have left evidence around if he was trying to break the law.

The trial is likely to remain the focus of attention next week, when Gates is expected to testify against his former business partner as the prosecution’s star witness -- putting everything in context for the jury.

To convict Manafort of the tax crimes, jurors will have to conclude that he knew the law and broke it anyway.

Regardless of the verdict in Virginia, Manafort is due for a trial on more charges in September in Washington. There, he’s accused of money laundering, obstruction of justice and acting as an unregistered foreign agent. The D.C. judge revoked his bail and sent him to jail after prosecutors said Manafort tried to tamper with witnesses.

Here are some of recent stories on the Manafort case and a link to the Special Counsel site:

The Breakup

Michael Avenatti, the lawyer who represents Stephanie Clifford, the adult-film star known as Stormy Daniels, flirted briefly with Michael Cohen, attempting to sway Trump’s former fixer and lawyer to join him in a fight against the president. But Thursday on Bloomberg Television, Avenatti said those talks broke off. “It’s become clear to me that Michael Cohen isn’t prepared to do the right thing,” Avenatti said.

Avenatti also scored another win Friday against Cohen in a California court, where a judge agreed to move Daniels’s lawsuit alleging her former lawyer colluded with Cohen, back to state court in Los Angeles. Cohen had gotten the case transferred to federal court in July.

Avenatti represents Daniels in several lawsuits. The most prominent is her suit in Los Angeles seeking to nullify a non-disclosure agreement that she signed just before the 2016 election. Clifford agreed to take $130,000 in exchange for keeping quiet about an alleged tryst she had with Trump 10 years earlier. Cohen had arranged the deal.

A federal judge also rejected Cohen’s request for a gag order on Avenatti. So, the lawyer is free to keep talking and tweeting.

The Wall Street Journal reported Thursday that a top Trump donor agreed to pay Cohen $10 million if he was successful in helping him get a $5 billion loan from the U.S. government for a nuclear-power project. Franklin Haney struck the deal with Cohen in April, just before the FBI in Manhattan raided the lawyer’s office, home and hotel room and seized evidence related to an investigation that prosecutors in New York have undertaken. Cohen never got the money, the Journal said.

Cohen hasn’t been charged with any wrongdoing.

Here are some of the most recent stories on Cohen and Avenatti:

Butina’s Testimony

A U.S. Senate intelligence panel says it plans to send transcripts of closed-door testimony of Maria Butina, a 29-year-old Russian woman accused of using a network of influential Americans to try and sway political activities in the U.S., to the Justice Department and her lawyer.

The red-headed, gun-brandishing operative was charged with failing to disclose her advocacy for Russia. U.S. prosecutors allege she worked closely with an official close to President Vladimir Putin, and together they built ties with the National Rifle Association.

Butina tended to brag about being a spy while drunk, CNN reported, citing people familiar with the case. Her lawyer insists she did nothing wrong. And Moscow claims she’s being mistreated in jail, with prison officials interrupting her sleep and not feeding her properly, according to the Associated Press.

Prosecutors have said they’re conducting a fraud investigation of an American who lived with Butina and provided her with access to influential U.S. conservatives.

The next hearing in her case is scheduled for Sept. 10.

Here’s a recent story on the Butina case:

Russian Hacks, Mueller’s Shadow

After indicting 12 members of the GRU, Russia’s military intelligence agency, on July 13, Mueller’s investigation of Russia’s interference in the U.S. elections has gone back under the radar.

But CNN reported Friday that Kristin Davis, known as the “Manhattan Madam,” met with Mueller’s team on Aug. 1. The cable news channel said it was told of the meeting by four people familiar with the situation, who asked not to be named. Investigators appear to be interested in her ties to longtime Trump adviser Roger Stone, CNN said.

Trump has railed against the Mueller probe -- referencing the investigation multiple times on Twitter just on Aug. 1. A call for Attorney General Jeff Sessions to shut down the probe seemed to give Mueller more ammunition in his investigation of potential obstruction of justice by the president.

White House Press Secretary Sarah Sanders said Aug. 1 the presidential tweet wasn’t an order to Sessions but just Trump’s opinion, as protected by the First Amendment. “The president is not obstructing,” Sanders said. “He’s fighting back.”

Trump’s lawyers and Mueller seem to be close to the end of negotiations over whether the president will sit down for an interview with the Special Counsel’s investigators. Mueller’s team agreed to pare down a proposed list of questions, according to the Washington Post. Trump’s lawyer Rudy Giuliani said that was a step forward.

“I would describe it as a tiny bit of movement, not anything dramatic, but at least it is worth responding to,” Giuliani said of the offer in an interview with Bloomberg News. “At least it wasn’t like it’s all over with.”

Earlier, Giuliani said on CNN and Fox that Trump didn’t commit a crime even if his campaign colluded with Russians.

The special counsel’s team has now indicted more than 30 people and three Russian companies, and secured five guilty pleas -- with several of Trump’s former associates also agreeing to cooperate.

Here are some of recent stories on Mueller’s investigation:

Trump Ire Over Mueller Dates to Blindside After Oval Office Meet
Trump and Muller Teams Nearing Terms for Interview (Audio)
Collusion Isn’t a Crime; Aiding and Abetting Is: Noah Feldman

Emolument Probe

The president’s Trump International Hotel in Manhattan had a 13 percent surge in revenue from room rentals during the first three months of 2018, thanks to housing some of the associates of the Crown Prince of Saudi Arabia, the Washington Post reported, citing a May 15 letter from general manager Prince A. Sanders that the newspaper obtained.

After the Post published the story, New York Attorney General Barbara Underwood said she was already conducting a separate investigation to see whether Trump had violated the emoluments clause of the Constitution by taking payments from foreign governments
at his New York businesses.

Earlier, U.S. District Judge Peter Messitte denied the president’s dismissal request and allowed an emolument lawsuit by the attorneys general of Maryland and the District of Columbia to move forward. It may open the door to an examination of just how much money Trump has made from his Washington businesses while in office and the sources of that income.

A lawsuit has also been brought by about 200 Democrats in Congress and another by some state attorneys general. A third case, by an ethics watchdog group and restaurant competitors of the Trump Organization, is on appeal after a Manhattan federal judge tossed it out. The cases could force Trump to divest his holdings or put them in a blind trust. At a minimum, the plaintiffs will seek Trump’s tax returns.

New York Governor Andrew Cuomo’s administration is investigating whether Trump’s charitable foundation violated state tax laws, said a person familiar with the probe. That could complicate a separate civil lawsuit against the foundation if it results in a criminal referral to the New York attorney general’s office.

The state sued to dissolve Trump’s charitable foundation, claiming it persistently broke state and federal laws through improper political activity and self-dealing.

Here’s a recent story on the foundation lawsuit:

Flynn’s Sentence

Trump’s former national security adviser, Michael Flynn, who was fired for having lied to the FBI and the vice president about his contacts with Russians, is a key cooperating witness in Mueller’s probe. He’s waiting to be sentenced for having lied to the FBI about contacts he had with Russians. A judge asked to be updated on the status of his case by Aug. 24.

Former Trump campaign advisers Gates and George Papadopoulos also pleaded guilty to lying to the FBI.

Here are some of recent stories on Flynn:

Russian Trolls

Concord Management, a company led by Russian businessman Yevgeny Prigozhin, asked a Washington judge at an Aug. 3 hearing to throw out charges accusing it of backing a wide-ranging attempt to influence the U.S. election. U.S. District Judge Dabney Friedrich in Washington didn’t immediately rule on the request.

The company is among two other businesses and 13 people charged in February for engaging in a years-long, multimillion-dollar conspiracy to undermine Hillary Clinton as the Democratic presidential candidate. Pretrial motions in the case are due by Aug. 31.

Previously, the Democratic National Committee sued Russia, the campaign, WikiLeaks and Trump’s associates claiming widespread election interference. After numerous failed attempts, Jared Kushner’s lawyer agreed to accept service of the DNC lawsuit. The case in Manhattan could force campaign staffers to answer questions under oath. A hearing is scheduled for Sept. 13.

Here’s a story on Kushner response:

The Case Files

  • The Manafort cases are U.S. v. Manafort, 17-cr-201, U.S. District Court, District of Columbia (Washington), and 18-cr-83, U.S. District Court, Eastern District of Virginia (Alexandria).
  • The Butina case is U.S. v. Butina, 18-cr-00218, U.S. District Court, District of Columbia (Washington).
  • The Cohen case is In the Matter of Search Warrants Executed on April 9, 2018, 18-mj-3161, Southern District of New York (Manhattan).
  • The Russian GRU hackers case is U.S. v. Netyksho, 18-cr-215, U.S. District Court, District of Columbia (Washington).
  • The hacking indictment is U.S. v. Concord Management, 18-cr-00032, U.S. District Court, District of Columbia (Washington). The DNC case is Democratic National Committee v. the Russian Federation, 18-cv-3501, U.S. District Court, Southern District of New York (Manhattan).
  • The Clifford cases are Clifford v. Trump, 18-cv-2217, U.S. District Court, Central District of California (Los Angeles); Clifford v. Trump, 18-cv-3842, U.S. District Court, Southern District of New York (Manhattan); and Clifford v. Davidson, 18-cv-5052, U.S. District Court, Central District of California (Los Angeles).
  • The Playmate case is Bechard v. Broidy, BC712913, California Superior Court, Los Angeles County (Los Angeles).
  • The Denson case: Denson v. Trump, 18-cv-2690, U.S. District Court, Southern District of New York (Manhattan).
  • The Flynn case is U.S. v. Flynn, 17-cr-232, U.S. District Court, District of Columbia (Washington).
  • The Apprentice case is Zervos v. Trump, 150522/2017, New York Supreme Court, New York County.
  • The emoluments cases are Blumenthal v. Trump, 17-cv-1154, U.S. District Court, District of Columbia (Washington); District of Columbia v. Trump, 17-cv-1596, U.S. District Court, District of Maryland (Greenbelt); Citizens for Responsibility and Ethics in Washington v. Trump, 17-cv-00458, Second U.S. Circuit Court of Appeals (Manhattan).
  • The Trump Foundation case is People of the State of New York v. Trump, 451130/2018, New York Supreme Court, New York County.
  • The driver’s case is Cintron v. Trump Organization LLC, 653424/2018, Supreme Court, State of New York (Manhattan).

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