Manafort out amid scrutiny of covert lobbying campaign

WASHINGTON – The sudden resignation Friday of Donald Trump’s campaign chairman put renewed emphasis on revelations about his past work on behalf of Ukraine’s pro-Russian political leaders, including his firm’s role in directing a covert Washington lobbying operation that would have required him under federal law to disclose his efforts to the Justice Department.

Manafort resigned from the Trump campaign amid scrutiny of his Ukrainian work – but others involved in the once-secret influence campaign remain working for Trump in senior roles, including Manafort’s deputy Rick Gates.

The Associated Press reported Manafort’s connection to the lobbying effort Wednesday. On Thursday, the AP reported that it had obtained emails revealing further details: Gates directed an unregistered influence campaign that included attempts to gain positive news coverage for Ukrainian officials, sway U.S. legislators, gather political intelligence and undercut American public sympathy for the imprisoned rival of Ukraine’s then-president.

Meanwhile, new documents released by Ukrainian anti-corruption investigators appear to link the lobbying work the men directed in the U.S. to handwritten entries in ledgers listing $12.7 million in cash payments alongside Manafort’s name. Some of that money was listed as paid to Manafort through two founding members of the European Centre for a Modern Ukraine, a Brussels-based nonprofit whose lobbying efforts Manafort and Gates oversaw.

Ukraine’s National Anti-Corruption Bureau said it cannot prove Manafort actually received the money.

While working under Manafort, Gates sent emails to Mercury LLC, which along with the Podesta Group Inc. represented the European nonprofit on Ukrainian issues between 2012 and 2014. The messages show Gates oversaw lobbying strategy and execution by Mercury employees.

On Friday, both lobbying firms hired outside legal counsel to investigate.

The Podesta Group’s chief executive, Kimberley Fritts, said the firm had retained Caplin & Drysdale LLP to determine whether it had been misled and threatened possible legal action against the European Centre. Fritts noted that the nonprofit had formally attested to being independent, leading her firm to conclude that it was not working on behalf of a foreign government.

The attorney handling Mercury LLC’ss review – Ken Gross of Skadden, Arps, Slate, Meagher & Flom– was the same one who drafted a legal memo in 2012 that Mercury used to justify not notifying the Justice Department about its work under the U.S. Foreign Agent Registration Act. Gross confirmed to the AP that he had been hired by Mercury.

Under the foreign agents law, people who lobby on behalf of foreign political leaders or political parties must provide detailed reports about their actions to the Justice Department. A violation is a felony and can result in up to five years in prison and a fine of up to $250,000.

None of the firms, nor Manafort or Gates, disclosed their work to the Justice Department counterespionage division responsible for tracking lobbying by foreign governments.

The emails obtained by AP were sent by Gates to Vin Weber, the head of Mercury’s Washington office, and to Michael McSherry, a Mercury lobbyist who Politico reported was tapped earlier this month for a senior position in Trump’s campaign. Buzzfeed reported McSherry’s connection to the lobbying effort Thursday.

Manafort and Gates have said they did not disclose their activities to the Justice Department because they did not oversee lobbying efforts and merely introduced the Washington firms to the European Centre. The center paid Mercury and the Podesta Group at least $2.2 million over roughly two years.

The emails appear to contradict the assertion that the nonprofit’s lobbying campaign operated independently from Manafort’s firm.

“There is no question that Gates and Manafort should have registered along with the lobbying firms,” said Joseph Sandler of Sandler Reiff Lamb Rosenstein & Birkenstock, a Democratic-leaning Washington law firm that advises Republican and Democratic lobbyists.