MANHATTAN (CN) - Under fire for its work with Paul Manafort on behalf of the Ukrainian government, the law firm Skadden Arps agreed to register a foreign agent Thursday and pay the Justice Department more than $4.6 million.
The settlement amounts to a fraction of the more than $2.6 billion reported in revenue last year by Skadden, which Forbes dubbed “Wall Street’s most powerful law firm.”
As laid out in a 44-page filing signed by national-security officials, Manafort helped the Ukrainian Ministry of Justice hire Skadden in 2012 as part of an influence operation driven by backlash over the Ukraine’s jailing of former Prime Minister Yulia Tymoshenko.
Skadden’s report denied that politics had motivated the former Orange Revolution leader’s 2011 prosecution and incarceration, and the Justice Department also found that “Skadden ... agreed to advise Ukraine in connection with a second, potential future prosecution of Tymoshenko.”
Assistant Attorney General John Demers slammed the white-shoe firm for failing to disclose its Ukrainian ties under the Foreign Agents Registration Act.
“Skadden’s failure to do so, and reliance on only the representations of the lead partner on the matter, hid from the public that its report was part of a Ukrainian foreign influence campaign,” Demers said in a statement. “FARA protects the integrity of the American political system by enabling Americans to consider the identity of the speaker as they evaluate the substance of the speech.”
Thursday’s settlement shows that Skadden waived privilege to assist prosecutors in the investigation.
“The attorney general finds that the law firm has cooperated extensively with the attorney general in its investigation, including with the Special Counsel’s Office and the National Security Division of DOJ in relation to these matters; and in so doing, the law firm has undertaken affirmative steps to enhance its internal procedures and processes,” the agreement states.
An appendix to the deal implicates multiple targets of the ongoing Russia investigation spearheaded by Special Counsel Robert Mueller. In addition to Manafort and his associate Rick Gates, the settlement refers to former Skadden attorney Alex van der Zwaan, who pleaded guilty last year to lying to investigators in the probe.
“Several law firm partners and associates worked on the report, which was led by a Washington, D.C., based partner,” the appendix states.
Dubbed “Partner-1,” a footnote reveals that this attorney left the firm on April 13, 2018, the same month that President Barack Obama’s former White House counsel Greg Craig resigned under a shroud of the Mueller investigation.
Bloomberg reported that Craig oversaw Skadden’s 2012 review on the legitimacy of the Ukrainian government’s prosecution of Tymoshenko.
When asked whether the Ukrainian engagement should be brought to the "resident FARA guru," Partner-1 responded: “I don't really care who you ask but we need an answer from someone who we can rely on with a straight face,” according to the document.
Prosecutors record Manafort as being dissatisfied with an early draft of a report that a public relations firm prepared, writing on Sept. 2, 2012 that “the media will see this report as a vindication of [Tymoshenko’s] position and the international community will come down hard on Ukraine.”
Prosecutors said that the revised media strategy involved a plan to “leak” a report hammering the message that the Ukrainian government “found no evidence of political motivation” to a journalist at a major U.S. media outlet.
The New York Times received an early scoop on the report officially released on Dec. 13, 2012, revealed a day earlier in the paper under the headline “Failings Found in Trial of Ukrainian Ex-Premier.”
Prosecutors quote several passages from that article, including an on-the-record interview with Craig.
“We leave to others the question of whether this prosecution was politically motivated,” Craig said in a portion of the article quoted in today’s agreement. “Our assignment was to look at the evidence in the record and determine whether the trial was fair.”
The Times noted that the Skadden-drafted report “seemed to side heavily with the government of President Viktor F. Yanukovich,” whose pro-Kremlin Party of Regions Manafort served before managing the Trump campaign.
Skadden released a statement describing the deal as "closure" with the U.S. government regarding issues related to the 2012 report.
"As part of this resolution, the firm will be registering with the FARA Unit of the Department of Justice in connection with the work we conducted and will pay to the U.S. Treasury funds we were paid for that engagement," the firm said in a statement. "We have learned much from this incident and are taking steps to prevent anything similar from happening again."
In August, Manafort was convicted on eight counts of bank and tax fraud in the U.S. District Court for the Eastern District of Virginia.
Though Manafort later pleaded guilty in a separate case in Washington related to his foreign lobbying work for Yanukovich’s party, Mueller accused the former lobbyist of misleading the Special Counsel’s Office in violation of the deal. The nature of Manafort’s alleged lies remains heavily redacted.
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