War Of Credibility Over Rick Gates Continues In Paul Manafort Fraud Trial

Elias Hubbard
August 9, 2018

Former Trump campaign chairman Paul Manafort's longtime aide Rick Gates, accused by a Manafort lawyer at Manafort's trial on Tuesday of using business expenses for an affair, admitted to the extramarital relationship. There have been exceptions, like when Gates said that he might have also embezzled from the Trump inauguration committee by inflating his expenses, and when he testified about how Manafort reached out to talk about securing a banker who loaned him money tickets to the inauguration and potentially a position in the administration.

At first, Gates merely noted that in March 2016 Manafort hired him to work for "one of the presidential candidates".

"This jury is just supposed to believe you after all the lies that you've told and the fraud you've committed?" asked Downing.

Gates said he and Manafort turned to a Cypriot lawyer, whom he referred to in court as "Dr K", who set up bank accounts and shell companies on Manafort's behalf and "handled everything".

"No, I did not", Gates responded.

Manafort's political work included advising Viktor Yanukovich on policy after he won the Ukrainian presidency, Gates said.

"Mr. Manafort requested. that we did not disclose foreign bank accounts", Gates testified.

The testimony came as prosecutors wrapped up their questioning of Gates mid-afternoon Tuesday.

Gates has told jurors he and Manafort spent years carrying out a vast tax-evasion and bank fraud conspiracy involving millions of dollars.

Manafort also falsely classified another $1.5 million in income as a loan, Welch testified - while adding that Manafort never indicated he had foreign bank accounts on his tax returns.

But as soon as Downing asked about "the secret life of Rick Gates", the witness volunteered, "There was a period of time, nearly ten years ago, when I had a relationship, yes". Manafort has pleaded not guilty to the charges.

"Do you remember telling the office of the special counsel you actually engaged in four extramarital affairs?"

Gates implicated himself in broad criminal conduct on the stand, an apparent strategic decision by prosecutors to take some of the steam out of defense questioning.

IRS agent Michael Welch told a jury that Manafort's unreported income includes foreign wire transfers to USA vendors like landscapers and clothiers, wire transfers to buy property, and income improperly reclassified as loans.

Cindy Laporta testified Friday in the government's case against the former Trump campaign chairman, saying she went along with the scam because she was anxious Manafort and his right-hand-man Rick Gates would sue. He testified that he and Manafort knew they were committing crimes for years, concealing money in foreign bank accounts and falsifying bank loan documents.

Manafort and Gates were the first two people indicted in Mueller's investigation into potential ties between Russian Federation and the Trump campaign. Gates has already pled guilty to two counts in Mueller's probe and testified against Manafort as part of a plea deal with the special counsel's office. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he has been treated worse than gangster Al Capone.

Mueller, a former Federal Bureau of Investigation director, has indicted more than 30 people - including 26 Russians - in connection with his probe into whether members of Trump's campaign colluded with Russia to help get the real estate tycoon elected.

For this Manafort was paid US$4million a year, in quarterly payments of US$1million, Gates recalled, though at some point the currency switched from USA dollars to Euros.

As well as being a senior aide on Trump's election campaign, Gates served as the deputy chairman of the U.S. president's inaugural committee.

In one email, Manafort wrote "WTF" and "not happy" about tax payments he was going to have to make, Gates said. "How could I be blindsided like this".

"The only answer I was told was to tell the truth", Gates replied. "This is a disaster".

In detailed testimony this week, Gates has walked prosecutors through the step-by-step process on how he and Manafort doctored and backdated documents.

As Manafort came under pressure to pay his bills, he was forced to seek loans, the court heard.

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