(Bloomberg) -- Special Counsel Robert Mueller and FBI agents seized tens of thousands of items from the home of Paul Manafort last July and have also reviewed testimony that he gave in a civil lawsuit about a protracted business dispute with Russian oligarch Oleg Deripaska.
Mueller, who is investigating Russian interference in the 2016 election, disclosed his review of the Deripaska-related testimony in a court filing Monday that defended an FBI raid on the home of Manafort, President Donald Trump’s former campaign manager. The disclosure shows the depth of Mueller’s interest in the links between Manafort and Deripaska.
Manafort once worked as a political consultant for Deripaska, who was considered close to Russian President Vladimir Putin. Deripaska then invested $18.9 million with Manafort in a cable-television venture in Ukraine, and paid him $7.35 million in management fees. The deal ultimately soured, and Deripaska sued to try to get an accounting of the money.
Deripaska, the billionaire founder and majority shareholder of En+ Group, was among the most prominent tycoons penalized with sanctions this month by the Trump administration. The move followed passage of a law last year to retaliate against Moscow for meddling in the 2016 U.S. presidential election.
Prosecutors have reviewed the 2015 testimony by Manafort and his former right-hand man, Rick Gates, according to a Dec. 1 letter attached to a filing late Monday in federal court in Washington. The letter broadly listed thousands of items handed over by prosecutors to lawyers for Manafort and Gates in the pre-trial exchange of evidence.
The testimony, which is sealed, wasn’t disclosed. It came in a lawsuit filed by two KPMG LLP partners, Kris Beighton and Alex Lawson, appointed to wind up a Cayman Islands partnership formed to invest in the Ukrainian venture. Beighton and Lawson asked a federal judge in Virginia for permission to seek documents and testimony from Manafort, Gates and a third man, Richard Davis. The ultimate resolution of the case is unclear from court filings. Early this year, Deripaska filed a fraud lawsuit against Manafort and Gates.
Manafort is under federal indictment in two districts. In Washington, he is charged with laundering profits from tens of millions of dollars that he made as a political consultant to former Ukrainian President Viktor Yanukovych and other politicians there, as well as of failing to register in the U.S. as a lobbyist. In Alexandria, Virginia, he’s accused of tax and bank fraud. Gates has pleaded guilty and is cooperating with Mueller.
Manafort hasn’t been accused of crimes related to Russia. In a court filing earlier this month, prosecutors said that any investigation of links between Russia and the Trump campaign “would naturally cover ties that a former Trump campaign manager had to Russian-associated political operatives, Russian-backed politicians, and Russian oligarchs.”
Prosecutors said they properly searched Manafort’s home after learning about its contents from an employee, according to the filing.
The Dec. 1 letter showed that prosecutors gave Manafort and Gates search warrant applications, as well as emails, bank accounts, computers and other electronic devices. They handed over to Gates material seized from nine devices at Manafort’s home, as well as a hard drive with 80,000 items. Both Gates and Manafort had also been interviewed by U.S. authorities in 2014, according to prosecutors.
In a separate filing, prosecutors defended a May 2017 search in Alexandria of a rental storage unit containing Manafort’s files, disputing assertions that an FBI agent gained access through an employee who didn’t have the authority to allow such an entry. Manafort asked a judge to throw out all evidence from the search, which underpins charges against him.
In asking to suppress that evidence, Manafort claimed the employee lacked authority to consent to the warrantless search. Prosecutors countered that the agent believed the worker could allow the search because he signed the lease, held a key and had moved files into and out of the space. Agents returned the next day with a warrant and took the files.
The employee “had the right and capability to gain access to the unit at any time” without Manafort’s knowledge or permission, according to the filing. “This is not like a situation in which an employee quits his job, keeps a copy of the key to the job site, and then invites the police to enter,” prosecutors wrote.
The employee, who previously worked for Davis Manafort Partners Inc., a political consulting firm, was working then for another Manafort company, Steam Mountain LLC, the U.S. wrote.
Nothing about the change in the business name would have signaled to the agent that the worker’s “access to and authority over the storage unit had suddenly ceased,” prosecutors wrote. “Indeed, it did not change anything about the employee’s services to Manafort or access to the unit.”
Manafort’s lawyers asked U.S. District Judge Amy Berman Jackson for a hearing to determine whether the consent to search was “freely and voluntarily given’’ by the ex-employee. Prosecutors argued that no hearing is necessary. They said the agent who wrote the search warrant is “currently stationed overseas and arrangements would have to be made for him to return” for a hearing, which would probably occur on May 23.
The cases are U.S. v. Manafort, 18-cr-00083, U.S. District Court, Eastern District of Virginia (Alexandria), and U.S. v. Manafort, 17-cr-00201, U.S. District Court, District of Columbia (Washington).
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