Manafort Defense Closes Gates Cross With ‘Truth’

ALEXANDRIA, Va. (CN) – Recalling his chat with Paul Manafort after they both were called in by the FBI, Rick Gates testified Wednesday that the former Trump campaign chair claimed to have told the investigator the truth.

In this courtroom drawing, Rick Gates answers questions posed by prosecutor Greg Andres, as the trial of former Trump campaign chairman Paul Manafort continues at federal court in Alexandria, Va., on Aug. 7, 2018. (Dana Verkouteren via AP)

Gates delivered the testimony this morning in a brief 15-minute cross-examination by the defense as Day 7 of Manafort’s trial on bank and tax fraud gets underway. Already Gates has given more than five hours of testimony over the course of direct examination by the federal government, but the defense aims to show that Gates embezzled from his employer and that his testimony should not be trusted.

The bulk of questions posted to Gates this morning by defense lawyer Kevin Downing focused on the interview Gates gave to the FBI in 2014 about lobbying work performed for former Ukrainian President Viktor Yanukovych by Davis Manafort Partners International.

Gates said that, at Manafort’s direction, he told the FBI in that interview about various offshore accounts Manafort controlled.

“He indicated that we should be open and provide the information about the questions that had been asked of us,” Gates said.

The exchange had little of the bite that erupted just before the close of proceedings Tuesday when Downing asked why the jury should trust Gates now given his track record.

“I’m here to tell the truth,” Gates said. “Mr. Manafort had the same path. I’m here.”

Prosecutors have alleged Manafort used these accounts to shield money from U.S. taxes. In addition to Gates, they have solicited testimony to that effect from Manafort’s former accountants and tax preparers, and documented the international intrigue with financial records and other evidence related to Manafort’s foreign bank accounts in Cyprus and St. Vincent and the Grenadines.

Downing finished his cross-examination of Gates this morning by asking whether the witness would be surprised to learn Manafort’s net worth was roughly $20 million in 2015 and 2016, when the revenue stream from Manafort’s work in Ukraine had dried up. Gates said he only had “some idea” about Manafort’s income, but that he understood Manafort’s net worth to be considerable based on the value of the properties he owned.

On redirect, Gates told prosecutor Greg Andres that after the FBI interview Manafort wanted him to meet with their Ukrainian contacts. The purpose of this meeting, Gates said, was to get more information about whether Manafort’s offshore entities were “clean” or in other words untraceable.

Gates testified that he was not under the impression he was under investigation during the FBI interview and that he was never asked to produce his tax returns.

Andres also spent more than 15 minutes asking Gates to clarify parts of his testimony from Tuesday regarding his guilty plea earlier this year to federal charges in Washington, D.C. Tuesday’s cross-examination appeared to throw Gates into momentary confusion about the counts to which he pleaded, but Andres recounted the charges again, methodically.

“Is there any doubt in your mind that you at one time provided false statements [to the special counsel?]” Andres said after Gates read parts of his plea agreement to the court, verbatim.

“No,” Gates said.

Downing also prodded Gates on Tuesday with allegations that he embezzled from Manafort.

Andres worked to scrub out this stain. “Were you ever charged with embezzling in Washington, D.C. or in the Eastern District of Virginia?” the prosecutor asked.

“No,” Gates said.

“Did Mr. Manafort ever confront you [about the embezzling]?” Andres said.

Again Gates responded, “No.”

Finally on redirect, Andres beat back Downing’s suggestion during cross-examination that Gates had withheld information about foreign bank registration and kept Manafort in the dark over what his own accountants suggested.

“If you give false information to a tax preparer,” Andres asked, “can you expect sound advice?”

Gates said no.

After Gates forcefully confirmed to Andres he understood that if he lied during his testimony the government would “rip up” his plea agreement, Downing used his brief re-cross-examination to dig into the witness’s “secret life,” a euphemism the Manafort attorney has used to refer to Gates’ extramarital affair.

Gates admitted Tuesday to having one affair, testifying that it lasted only a few months.

But Downing pressed Gates on whether he actually told the Office of Special Counsel during interviews that he had four affairs. Gates never was able to answer, however, as Andres immediately objected to the question.

Andres said the question was irrelevant, but Downing disagreed because of the focus Andres has placed on the consequences Gates would face if he lied during his testimony.

The attorneys went into a lengthy sidebar with U.S. District Judge T.S. Ellis III, and Downing did not return to the question afterwards.

Gates has now finished his roughly six hours on the stand.

Special Prosecutor Robert Mueller had initially indicted Gates with Manafort, but Gates has been cooperating with the government after pleading guilty in February this year to providing false statements. Downing’s combative style seemed to rattle Gates, as the witness admitted to past lies and said there were “instances where [he] struggled in interviews” with the special counsel.

Gates faced several embarrassing revelations on cross-examination meant to stain his character, including details of extramarital affairs, references to his “secret life,” and embezzlement allegations.

To follow Gates, the prosecution has called Morgan Magionos, a forensic accountant from the FBI. Before she could take the stand, however, Judge Ellis, Manafort’s attorneys and prosecutors argued about the scope of evidence that should be allowed into the trial through her testimony.

Ellis, who has been focused on shortening the length of the already week-long trial, urged Andres to condense the testimony about Manafort’s payments from foreign accounts as much as possible. Specifically at issue is the prosecution’s plan to use charts to illustrate how Manafort allegedly paid for goods and services in the U.S. using money from his foreign accounts.

Richard Westling, who represents Manafort, said some of the charts are appropriate, but indicated he plans to object to others that he said retrace ground already covered by earlier witnesses.

Andres assured Ellis he is planning to move thorough the evidence in an “expeditious” fashion, but said the government needs to show the jury there is no doubt about the path the money took from Manafort’s offshore accounts into the United States.

Ellis did not definitively resolve the issue of the charts before the jury returned from a break Wednesday afternoon, but nevertheless urged Andres to move the trial along as much as possible.

“Judges should be patient. They made a mistake when they confirmed me,” Ellis said.

Prosecutors still have a handful of witnesses to call before they rest their case. Several tax preparers granted use immunity by the special counsel could be on deck to appear.

This story is developing…

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