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Paul Manafort, Ex-Chairman of Trump Campaign, and Associate Plead Not Guilty to Money Laundering

October 31, 2017 by  
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The special counsel, Robert S. Mueller III, was assigned in May to investigate whether anyone close to Mr. Trump participated in a Russian government effort to influence last year’s presidential election. Monday’s indictments indicate that Mr. Mueller has taken an expansive view of his mandate.

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The indictment of Mr. Manafort and Mr. Gates makes no mention of Mr. Trump or election meddling. Instead, it describes in granular detail Mr. Manafort’s lobbying work in Ukraine and what prosecutors said was a scheme to hide that money from tax collectors and the public. The authorities said Mr. Manafort laundered more than $18 million.

“Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the United States without paying taxes on that income,” the indictment reads.

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George Papadopoulos pleaded guilty to lying to the F.B.I. about a contact with a Russian professor with ties to Kremlin officials.

Mr. Gates is accused of transferring more than $3 million from offshore accounts. The two are also charged with making false statements.

“As part of the scheme, Manafort and Gates repeatedly provided false information to financial bookkeepers, tax accountants and legal counsel, among others,” the indictment read.

Mr. Papadopoulos admitted that in a January interview with the F.B.I., he lied about his contacts with a Russian professor, whom he knew to have “substantial connections to Russian government officials,” according to court documents. Mr. Papadopoulos told the authorities that the conversation occurred before he became an adviser to Mr. Trump’s campaign. In fact, he met the professor days after joining the campaign.

The professor took interest in Mr. Papadopoulos “because of his status with the campaign,” the court documents said.

Mr. Manafort and Mr. Gates surrendered to the F.B.I. early on Monday and, through their lawyers, pleaded not guilty to all charges on Monday. The two men, wearing dark blue suits, entered the courtroom with their hands held behind their backs. Money laundering, the most serious of the charges, carries a potential prison sentence of up to 20 years.

Mr. Manafort has expected charges since this summer, when F.B.I. agents raided his home and prosecutors warned him that they planned to indict him. That warning raised speculation that Mr. Manafort might try to cut a deal to avoid prosecution. A senior White House lawyer, Ty Cobb, said last week that the president was confident that Mr. Manafort had no damaging information about him.

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People close to Mr. Manafort, including his former business partner Roger J. Stone Jr., have said he had nothing to offer that would help prosecutors build a case against Mr. Trump.

“He’s not going to lie,” Mr. Stone said in September.

Mr. Gates is a longtime protégé and junior partner of Mr. Manafort. His name appears on documents linked to companies that Mr. Manafort’s firm set up in Cyprus to receive payments from politicians and businesspeople in Eastern Europe, records reviewed by The New York Times show.

Graphic

How Key Trump Associates Have Been Linked to Russia

Several are under scrutiny by the F.B.I. and Congress.


Attempts to reach Mr. Gates on Monday were not successful. A spokesman for Mr. Manafort did not immediately respond to a request for comment.

Mr. Manafort, a veteran Republican strategist, joined the Trump campaign in March 2016 to help keep delegates from breaking with Mr. Trump in favor of establishment Republican candidates. Mr. Trump soon promoted him to chairman and chief strategist, a job that gave him control over day-to-day operations of the campaign.

But Mr. Trump fired Mr. Manafort just months later, after reports that he received more than $12 million in undisclosed payments from Viktor F. Yanukovych, the former Ukrainian president and a pro-Russia politician. Mr. Manafort spent years as a political consultant for Mr. Yanukovych.

American intelligence agencies have concluded that President Vladimir V. Putin of Russia launched a stealth campaign of hacking and propaganda to try to damage Hillary Clinton and help Mr. Trump win the election. The Justice Department appointed Mr. Mueller III as special counsel in May to lead the investigation into the Russian operations and to determine whether anyone around Mr. Trump was involved.

Mr. Trump has denied any such collusion, and no evidence has surfaced publicly to contradict him. At the same time, Mr. Trump and his advisers this year repeatedly denied any contacts with Russians during the campaign, only to have journalists uncover one undisclosed meeting after another.

The New York Times revealed in July that Mr. Manafort and others close to Mr. Trump met with Russians last year, on the promise of receiving damaging political information about Mrs. Clinton.

Matt Apuzzo and Maggie Haberman contributed reporting.


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Puerto Rico governor says contract to Whitefish company should be canceled

October 30, 2017 by  
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The governor of Puerto Rico called for the cancellation of a controversial $300 million contract the island’s utility signed with a small Montana-based company tasked with a central role in repairing the territory’s hurricane-ravaged electric power grid.

Gov. Ricardo Rosselló said that the contract was a distraction after critics in the electric power industry, Congress and the Federal Emergency Management Agency raised questions about whether the company, Whitefish Energy, was well equipped to respond to the hurricane damage.

Thirty-nine days after Hurricane Maria hit the territory, Rossello said that he would request assistance from Florida and New York under mutual aid arrangements that utilities traditionally activate to help other states during an emergency. About 80 percent of the people living on the island still have no electricity.

“As a result of the information that has been revealed and the need to protect the public interest, as governor I am asking the power authority to cancel the Whitefish contract immediately,” Rosselló said in an unusual Sunday morning news conference at La Fortaleza, the governor’s mansion.

In tweets Sunday morning, Rosselló also called for additional measures to scrutinize contracting by the island’s power authority more carefully. Rossello said there should be a “special outside coordinator” to monitor the utility’s purchases so we “can have more clarity in this process.”

The governor’s statements, however, added to the confusion about the oversight of the utility and the commonwealth, both of which are bankrupt. A financial oversight board Congress created for Puerto Rico is planning to ask a federal court this week for clear authority to examine contracts as small as $10 million. The federal judge is overseeing the restructuring of Puerto Rico’s more than $70 billion in debts.

Just last week, the oversight board also said it would use its authority to install its own emergency manager to pay closer attention to the day-to-day operations of the utility. The governor is opposing the appointment and said he would name his own administrator for PREPA’s purchases.

The governor also did not say how the utility would disentangle itself from the contract with Whitefish Energy.

Whitefish Energy, which had just two employees the day Hurricane Maria hit Puerto Rico, now has about 325 people working on restringing transmission lines, clearing debris and erecting fallen poles. It has been working under contract with the Puerto Rico Electric Power Authority.

Whitefish, Mont., is the home of Interior Secretary Ryan Zinke, although the company said he played no role in securing the business. One of Zinke’s sons worked for Whitefish Energy over the summer.

Many people in the utility business had said that the authority, known as PREPA, would have been better off tapping into the well-established networks of utilities that have formed mutual aid groups expressly for the purpose of emergency relief. In addition, many in the industry have suggested that Whitefish Energy’s pay scales — as high as $462 an hour — were much higher than is typical even in an emergency such as the one facing Puerto Rico.

The Whitefish Energy contract also had a clause that said that the pay rates and other terms of the agreement could not be audited or reviewed by FEMA or the General Accounting Office. The contract also said that FEMA had reviewed and approved the agreement and that the agency would reimburse PREPA or Whitefish Energy for emergency expenditures. FEMA on Friday said that it had not approved the Whitefish Energy agreement.

Arelis Hernandez contributed to this article.

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