Former Trump campaign aide Rick Gates took the stand against his old boss Paul Manafort Monday, in a high-stakes moment in special counsel Robert Mueller’s investigation.
Asked under oath if he committed crimes with Manafort, Gates answered “yes,” he did.
Gates was Manafort’s right-hand man for a decade, and was intimately involved in Manafort’s Ukrainian consulting work and his company’s finances. Originally charged with many of the same crimes as Manafort last year, Gates agreed in February to cooperate with Mueller’s team as part of a plea deal. Now, both the prosecution and defense are hoping his testimony will make their case — for different reasons.
On the stand, Gates testified that he and Manafort knowingly committed several crimes. He said that at Manafort’s direction, he didn’t report 15 foreign financial accounts they controlled to the US government, even though they knew that was illegal. He also testified that Manafort directed him to send millions in foreign cash as phony “loans” to his US companies, so he could avoid paying taxes on them.
Perhaps more damagingly for him, Gates admitted that he embezzled hundreds of thousands of dollars from those accounts without Manafort’s knowledge — something that the defense team has signaled they will seize on as they attempt to discredit him. (The trial’s proceedings concluded for the day before the defense got to cross-examine Gates — that will likely happen tomorrow.)
Mueller has accused Manafort of funneling $30 million made from his Ukrainian work into the US, and spending it on real estate, phony loans, and luxury purchases without ever paying income taxes on it or filing legally required disclosures of his foreign holdings. He’s also charged Manafort with defrauding several US banks by misstating his and his company’s finances to get more than $20 million in loans — allegedly because Manafort was scrambling to get cash after his Ukrainian money stopped coming in.
But the defense team has made its strategy clear: They hope to pin as much of the allegations against Manafort as they can on Gates instead. Defense lawyer Thomas Zehnle focused much of his opening statement last week on attacking Gates, claiming Manafort had merely “placed his trust in the wrong person,” accusing Gates of embezzling, and calling Gates the “foundation of the special counsel’s case.”
This is a long-shot strategy, since Mueller’s team has already called 15 other witnesses and has a great deal of documentary evidence to help them make the case that Manafort knew what he was doing — they’re not really just relying on Gates’s word. Still, given the volume of evidence, going after Gates to be the best chance the defense has.
If Gates came off as credible to the jury, then Manafort is probably sunk. But if the defense’s attacks on Gates succeed in planting doubt in jurors about the prosecution as a whole, that could be Manafort’s best chance of avoiding a guilty verdict.
Who is Rick Gates?
Gates was Paul Manafort’s protégé and right-hand man, who was at his side during his decade of lobbying and foreign work for Ukrainian and pro-Russian interests, before going with him to join the Trump campaign in 2016.
Manafort, who is two decades older than Gates, had years of experience working for Republican politicians, controversial dictators, and corporate interests. But in the mid-2000s, his career took a bit of a turn, as he began doing political advising work for Russian and Ukrainian oligarchs, then for Ukraine’s Party of Regions and its leader Viktor Yanukovych.
Gates worked with Manafort for nearly all of this decade-long period. He joined Manafort’s firm in 2006 and began managing much of its Eastern Europe portfolio soon afterward, often working out of Kiev, according to the New York Times. Yanukovych was elected president, and Gates was then heavily involved in lobbying work for the new regime, as well as with the finances of Manafort’s firm. (Yanukovych was eventually deposed in 2014.)
Later, when presidential candidate Donald Trump wanted to professionalize his campaign, he brought Manafort aboard in March 2016 — and with Manafort came Gates. Manafort’s portfolio gradually expanded until he was effectively running the whole campaign, meaning Gates had more of a high-level role as well. Even after Manafort was fired in August 2016, Gates stayed on with the Trump campaign, and later had a high-level role in planning Trump’s inauguration.
But Gates was indicted alongside Manafort for charges related to the old Ukrainian work last October. At first, he pleaded not guilty. But immediately, there was speculation that Gates — who’s much younger than Manafort and has young children — might strike a deal to avoid a lengthy prison sentence and enormous legal fees.
Finally, in February, after Mueller brought a new set of tax and bank fraud charges against the pair, Gates cut a deal — pleading guilty to one count of conspiracy and one count of false statements, with the rest of the charges against him being withdrawn in exchange for his cooperation.
Whether Gates is giving Mueller information about Russian interference remains unknown, but part of the deal includes testifying against his former boss this week.
What Rick Gates said during his testimony
Manafort’s current trial — the first of two he’s scheduled to face — focuses on his money. While his finances are complex, the crux of the charges against him are that, allegedly:
- He moved $30 million into the US without declaring it on his tax returns or paying income taxes on it.
- He hid his foreign accounts from the US government by not filling out legally required “FBAR” disclosures.
- He lied about his own finances and his firm’s finances on several loan applications to US banks.
Gates testified Monday that on all these fronts, Manafort knew exactly what he was doing. He testified that to the extent he helped, he was doing so at Manafort’s instruction. And he testified that both of them knew full well that what they were doing was illegal.
Specifically, Gates claimed, according to the Washington Post’s reporters:
- That, at Manafort’s direction, he wired money from the offshore accounts to Manafort’s US companies as phony “loans,” because Manafort didn’t want to have to pay taxes on the income
- That it was at Manafort’s direction that he didn’t file FBAR forms disclosing their foreign accounts, and that this was to hide those accounts from the US government
- That Manafort told him to make false statements in loan applications
Gates made another big admission — that he did in fact embezzle “hundreds of thousands of dollars” from Manafort’s accounts without Manafort’s knowledge. He made that admission in response to questioning from the prosecution, in an apparent attempt to get it out of the way before the defense can press him on it in cross-examination.
That cross-examination will likely take place tomorrow. Manafort’s team will try to discredit Gates in the eyes of the jury as a thieving, untrustworthy crook whose testimony can’t be believed. Gates, meanwhile, will have to try and make the case that his lies and crimes are in the past — and that they mainly came at Manafort’s behest.