How is that working out?
I’m sure I said this before. Fact is, I checked my archives and verified I did say this before. I seldom go to liberal sources for these posts. Liberals are so dull. Conservatives, on the other hand, brighten my day. In the same sense as a stink bomb at a birthday party. Take, for example, the soap opera that has become the life and time of Rick and Paul. That’s Rick Gates and Paul Manafort.
To get readers up to speed, Paul Manafort was the campaign manager for candidate Donald Trump from March 2016 until 19 August 2016.
In August 2016, Manafort’s connections to former Ukrainian President Viktor Yanukovych and his pro-Russian Party of Regions drew national attention in the US, where it was reported that Manafort may have illegally received $12.7 million in off-the-books funds from the Party of Regions.
On August 17, 2016, Donald Trump received his first security briefing. The same day, August 17, Trump shook up his campaign organization in a way that appeared to minimize Manafort’s role. It was reported that members of Trump’s family, particularly Jared Kushner who had originally been a strong backer of Manafort, had become uneasy about his Russian connections and suspected that he had not been forthright about them. Manafort stated in an internal staff memorandum that he would “remain the campaign chairman and chief strategist, providing the big-picture, long-range campaign vision”. However, two days later, Trump announced his acceptance of Manafort’s resignation from the campaign after Stephen Bannon and Kellyanne Conway took on senior leadership roles within that campaign.
Upon Manafort’s resignation as campaign chairman, Newt Gingrich stated that “nobody should underestimate how much Paul Manafort did to really help get this campaign to where it is right now.” Gingrich later added that, for the Trump administration, “It makes perfect sense for them to distance themselves from somebody who apparently didn’t tell them what he was doing.
Mr. Manafort’s fortunes have gone downhill since that time. He now stands indicted for multiple federal felonies and stands to spend his remaining years in the federal slam. I’m not going to recap the complete story, just the high points. In fact, I am going to fall back on having MSNBC commentator Rachel Maddow do the recount for me, in pictures pulled from YouTube, which is currently carrying an episode from 22 February (last week). Start with this:
On 21 February, federal prosecutor Robert Mueller issued an additional 32-count indictment against Manafort.
MSNBC acquired a copy of a letter used by Manafort approximately February and March 2016 to solicit the position of campaign manager for candidate Trump. It’s an interesting proposal that Manafort put forward. He had not been involved in American politics for years, decades according to Rachel Maddow. He had previously been doing work for the Ukrainian government, at the time having difficulties with Russia, its former benevolent protector. However, in 2014 the people of Ukraine tired of elected president Viktor Yanukovych, who, to them, seemed to be too cozy with mother Russia, deposed him, and Yanukovych retreated to the safety of Russia. At this point the lucrative dealings Manafort had been enjoying dried up to the loss of millions of dollars annual income. My take is this hit Manafort hard, as a review of his lavish lifestyle indicates he was living on the margin. He needed cash. Mucho dinero. Pronto. How, then, to explain his offer to work for free on the Trump campaign.
This came at an opportune time for Manafort. The Trump campaign was roiling and in turmoil. Corey Lewandowski was Trumps first campaign manager, but he quickly proved to be problematic:
On March 10, 2016, Michelle Fields, a reporter for Breitbart News, wrote that, after she asked Donald Trump a question when she approached him after a March 8, 2016, press conference in Jupiter, Florida, she was forcefully grabbed by Lewandowski. On March 29, Lewandowski was charged with one count of simple battery by the Jupiter Police Department and surrendered himself to the authorities, after releasing a statement maintaining his innocence.
Two weeks later, Palm Beach County State Attorney Dave Aronberg said that his office would not prosecute Lewandowski; they believed that “there was probable cause to make an arrest” and “the facts support the allegation that Mr. Lewandowski did grab Ms. Fields’ arm against her will,” but “the evidence cannot prove all legally required elements of the crime alleged and is insufficient to support a criminal prosecution.”
On March 19, 2016, during a campaign event in Tucson, Arizona, Lewandowski drew criticism for his handling of a protester. Although a video showed Lewandowski grabbing the protester by the collar, the campaign and Lewandowski denied doing so.
But back to the entry of Paul Manafort. In particular, note the underlined in this job pitch. “I am not looking for a paid job.” Where is the money to come from? That, apparently, is the crux of the story to follow.
Here is Manafort in his new job with the Trump campaign (second from the right).
Watch the video. Maddow interprets.
She points out these details from the new indictments.
Between at least 2016 and 2015… Manafort and Gates generated tens of millions of dollars in income as a result of their Ukraine work…
Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income.
This is the point at which Manafort begins, as far as the indictments go, to get cross-ways with United States law. Willfully avoiding to pay taxes owed is a federal offense.
The saga continues:
In the second part of the scheme, between approximately 2015 and at least January 2017, when the Ukraine income dwindled after Yanukovych fled to Russia, Manafort, with the assistance of Gates, extracted money from Manafort’s United States real estate..
At this point, Manafort, with the assistance of Gates, piled on additional criminal offenses.
Manafort, Gates, and others devised and intended to devise, and executed and attempted to execute, a scheme and artifice to defraud, and to obtain money and property, by means of false and fraudulent pretenses, representations, and promises, from banks and other financial institutions.
The government has already been offended by this failure to pay taxes. Now the pair engage in schemes to defraud other parties, in essence to steal from them.
Manafort falsely represented to the bank that he did not derive more than 50% of his income/wealth from a country outside the United States.
I’m guessing this falsification is in violation of the law.
In late 2015 through early 2016, Manafort sought to borrow cash…after promising Lender A that approximately $1,400,000 of the loan would be used solely for construction…
It makes a difference to a lender what you intend to do with the money. If you intend to put it into a business that will return income, enabling you to repay the loan, then the lender will be more favorable. Manafort lied, putting the lender at a risk beyond what was agreed upon in the lending contract.
Federal prosecutors—Mueller’s team—determined from evidence they have that Manafort was defrauding the lender.
Manafort never intended to limit use of the proceeds to construction as required by the loan contracts and never did.
He had no intent to abide by the terms of the contract, and he carried through with his plan to violate the contract.
Prosecutors presented further evidence of criminal activity.
In late 2015 through early 2016, Manafort applied for a mortgage on the Howard Street condominium from Lender B… Manafort falsely represented to the lender and its agents that it was a secondary home used as such by his daughter and son-in-law and was not held as rental property.
Yes, that does make a difference when you are lending money for real estate.
At this point, Manafort sucks his closest kin into his criminal enerprise. He advises his son-in-law to lie for him, placing the son-in-law in jeopardy for criminal prosecution.
…on January 26, 2016, Manafort wrote to his son-in-law to advise him that when the bank appraiser came to assess the condominium, his son-in-law should “[r]emember, he believes that you and [Manafort’s daughter] are living there.
This just plain dumb. When you discuss a scheme to commit a crime, you do not put the discussion in writing. You meet on a rowboat out beyond the three-mile limit and hide under a blanket to discuss the details face to face.
Gates’ complicity in the scheme is detailed.
Gates, on Manafort’s behalf, caused an insurance broker to provide Lender B false information…
After Gates contacted the insurance broker and asked her to provide Lender B with false information, he updated Manafort by email on February 24, 2016. Manafort replied to Gates, on the same day: “good job on the insurance issues.”
Jesus Christ! They discussed it in an email?
The pair further involved (unwitting?) others.
Manafort and Gates caused Manafort’s tax accountant to send t Lender B back-dated documentation that falsely stated that the $1.5 million Peranova Loan had been forgiven in 2015, and falsely inflated income for 2015 to mask Manafort’s 2015 drop in income.
My interpretation: Manafort needed cash. His lucrative business with Ukraine was gone, and he felt no need to retrench, to live at a lower standard, such as I am doing now. Since he was not earning the money he needed, he figured to borrow it. How it would be paid back is beyond my comprehension. In any event, his finances at the time and his future prospects made him a poor risk for a loan. He decided to defraud lenders by falsifying his circumstances.
Here is some detail to explain the “Peranova loan.”
MANAFORT and GATES also disguised, as purported “loans,” more than $10 million transferred from Cypriot entities, including the overseas MANAFORT–GATES entities, to domestic entities owned by MANAFORT. For example, a $1.5 million wire from Peranova to DMI that MANAFORT used to purchase real estate on Howard Street in Manhattan, New York, was recorded as a “loan” from Peranova to DMI, rather than as income. The following loans were shams designed to reduce fraudulently MANAFORT’s reported taxable income
The scheme becomes ever more involved.
In approximately February 2016, Manafort applied for a business loan from Lender C. Manafort made a series of false statements to Lender C.
Yet another series of criminal offenses.
At this point Manafort and Gates began to get their hands dirty, performing the detailed work that would put their fingerprints (figuratively) on the crime.
in approximately March 2016, Manafort and Gates submitted a doctored 2015 DMI P&L that overstated DMI’s 2015 income by more than $4 million.
DMI is Davis Manafort, Inc., and P&L is profit and loss.
At this point professional scruples raised its ugly head. Somebody refused to assist in perpetrating the ruse.
Gates asked DMI’s bookeeper to send him a “Word Document version of the 2015 P&L for [DMI]” because Manafort wanted Gates to add the accrual revenue which we have not received in order to send to [Lender C].”
Counting accrual is legitimate in some cases, but was not one of those cases. I am guessing the accruals were not expected to materialize.
Yeah, the bookkeeper did not want any of this stuff to rub off on him. Smart man (woman).
The bookkeeper refused, since the accounting method DMI used did not permit recording income before it was actually received.
Unable to enlist the assistance of an innocent party, Gates took the crime into his own hands.
Having failed to secure a falsified P&L from the bookkeeper, Gates falsified the P&L.
This means jail time for Gates.
Ensuring his children would do without their father during their formative years, Gates signed his own ticket up the river.
Gates then sent the altered P&L to Lender C, which claimed approximately $4.45 million in net income, whereas the true P&L had less than $400,000 in net income.
To put this into perspective, $400,000 net income is what a contract computer programmer might expect to pull down in two years. Not a healthy cash flow for a multi-million-dollar business concern.
Not to be greedy, Manafort and Gates inflated their cash flow by just the amount needed to get the loan.
In March 2016, Manafort, with the assistance of Gates and others, applied for a $5.5 million loan… The falsified 2016 DMI P&L overstated DMI’s income by more than $2 million, which was the amount that Lender B told Manafort he needed to qualify for the loan.
Apparently Manafort and Gates had somebody working inside with Lender B to help pave the way. How would you like to be that person right now, watching the Manafort/Gates indictments unfold on your TV screen?
When the document ws first submitted to Lender B, a conspirator working at Lender B replied: “Looks Dr’d. Can’t someone just do a clean excel doc and pdf to me??” A subsequent version was submitted to the bank.
Again, incriminated evidence put into an email. Dumb follows dumber.
As evidence of income, Gates dummied up an invoice that anybody would suspect was phony.
Gates, on Manafort’s behalf, provided the bank with a fake invoice for $2.5 million, directed “To Whom it May Concern.”
Who sends a $2.4 million invoice “to whom it may concern?”
Sanity continued to seep in. What responsible financial institution would accept such a sham? Not this one, apparently.
The bank, unwilling to rely on the invoice to support Manafort’s stated 2016 income, requested additional information. The bank was unable to obtain satisfactory support for the stated income, and the loan application was denied.
Smart move. You just saved your bank from a $2.4 million loss. But this leaves Manafort and Gates still in limbo for the cash. They need to scramble and locate another sucker. This is the point at which the scheme gets close to candidate Trump.
Enter Lender D. The Trump tie-in is beginning to take shape.
Between approximately July 2016 and January 2017, Manafort, with the assistance of Gates, sought and secured approximately $16,000,000 in two loans from Lender D.
It turns out it’s going to matter who is Lender D.
Manafort provided the bank with doctored P&Ls… Gates converted that .pdf into a “Word” document so that it could be edited, which Gates sent back to Manafort. Manafort altered that “Word” document by adding more than $3.5 million in income.
Lender D still had to worry about this questionable loan.
Lender D questioned Manafort about a $300,000 delinquency on his American Express card… Manafort supplied Lender D a letter from Gates that falsely stated that Gates had borrowed Manafort’s credit card to make the purchases…
What a different world these people live in. I get nervous when my balance broaches $5000. (Swallow hard.)
The delinquency significantly affected Manafort’s credit rating score.
If I were short $300,000 on my MasterCard, the bank would have armed guards standing around my house until I whittled the leverage down to a manageable size.
So, who is this mysterious Lender D, and why are they willing to shell out $16 million to a couple of Beltway deadbeats?
Filings show Manafort was in financial trouble just as he offered to work for Trump for free.
It turns out that Lender D is (possibly) The Federal Savings Bank in Chicago. It’s supposed to lend to military veterans. Manafort never served in the military. Why was he getting a loan from The Federal Savings Bank? Good question.
Maddow raises the question whether Manafort promised a White House job in return for being granted the loan.
…three loans were questioned by other officials at the bank…
Certain people at the bank (any bank) are required to approve a loan of this size. Apparently some pressure was applied.
…at least one of the bank employees who felt pressured into approving the deals is cooperating with investigators.
It’s one way to wipe you slate clean. When the feds come around, show you are willing to cooperate.
The bank’s CEO is a Mr. Steve Calk, and he is figured to have expected something personal in return for granting the loan, approximately 25% of the bank’s authorized lending. From The Wall Street Journal:
Mr. Calk was seeking to become Mr. Trump’s Army secretary.
Who would have thought the job paid that much?
Again, apparently from The WSJ:
chief executive Steve Calk … was placing calls to the Pentagon and specifically to Army headquarters, asking for briefings to obtain information and prepare himself for a possible job … Mr. Calk’s overtures raised questions among military leaders as to how to respond
The previous Manafort/Gates indictments of October 2017 alleged the pair laundered $18 million. The new indictments bump that figure up. It’s now $30 million. That’s more than some people make in a whole year.
The story continues.
…in light of additional conduct
additional evidence related to this and the other bank frauds and conspiracies
Revelations concerning Manafort’s finances put a shadow on his current bail status. To obtain bail, Manafort had to put up tangible assets, and it now appears those assets are encumbered, making them unworthy as bail collateral. There is the possibility he will spend the remainder of the time leading up to his trial behind bars. Once inside, he may stay for the remainder of his life.
Maddow speculates how the additional $12 million came to be added to the indictments. Possibly, now that Gates has pleaded guilty and is cooperating with prosecutors, he could be disclosing additional malfeasance.
This item was published on YouTube the day before a slew of additional indictments was issued. One of several things will happen next:
- Manafort will hoe the line and play canasta with other inmates until he dies.
- Manafort, currently insisting on his innocence and refusing to take a plea deal, will soon cave and will give up valuable information.
- Manafort will have no additional information to give up and will play canasta for the rest of his life.
What prosecutors may be counting on (I hope) is that Manafort was close enough to the Trump campaign to have dirt on illegal dealings with a foreign government (Russia, China, Guatemala, who knows?). What many of us watching this play out daily on the tube hope with great fondness is that President Trump’s daily ranting of “No collusion, no collusion!” indicates delusion and desperation. Good people across this nation would love to chomp popcorn while watching The Donald do the perp walk.
Is this a great country or what?