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Manafort Trial: Rick Gates Turns on His Old Boss, and Mueller Gains Momentum

Day 5 of the first major case in the Russia investigation did not bode well for Team Trump

Paul Manafort (L) and Rick Gates (R)

ALEXANDRIA, VIRGINIA — The old man scowled across the courtroom. “Let’s get to the heart of the matter.”

“We’ve been at the heart of —” the younger man, a lawyer, interjected.

“Just listen to me!” the old man said. The lawyer stared at the floor. The room went silent.

The fifth day of the Paul Manafort trial was thick with drama from the outset, and by late afternoon, it had become the most eventful session so far. It was the day that Rick Gates — Manafort’s former colleague, protégé, alleged co-conspirator and star witness — finally took the stand. It was the day that the growing tensions between Mueller’s team and Judge T.S. Ellis III finally boiled over.

The exchange above — “Just listen to me!” — occurred not between a witness and a defense attorney but between Judge Ellis and Greg Andres, a prosecutor working for Mueller. Ellis has chided the prosecution since the start of the trial to move faster, show fewer exhibits and “get this thing done.” The jury had observed plenty of these moments, but not with the animosity seen on Monday. At the end of the day, after the jury had been excused, Ellis and Andres clashed again over the judge’s rulings on what Andres could and couldn’t say during his questioning. Ellis tore into him, this time for not making eye contact. “Look at me,” he demanded. When Andres did not, Ellis said he interpreted that gesture to mean “That’s B.S.”

A similar scenario with far fewer words played out between Gates and Manafort. Gates took the stand in a dark suit and gold tie, speaking in a quick, clear, almost boyish tone as he responded to each of Andres’ questions. He never looked over at his former boss seated behind the defense’s table. Manafort, for his part, set his gaze on Gates and kept it there.

Gates began his testimony by describing how he’d first met Manafort while working as an intern at Manafort’s consulting firm in the mid-’90s. He returned a decade later to work alongside Manafort as the firm’s practice focused on more international business. They took on clients in Ukraine and Cyprus and successfully got Viktor Yanukovych, a previously failed candidate, elected president of Ukraine in 2010. Massive protests in 2014 forced Yanukovych out of office, and Gates and Manafort’s firm took a major hit.

Prosecutors allege that Manafort and Gates resorted to illegal financial activities to sustain Manafort’s extravagant lifestyle and later to prop up the firm. Mueller’s 32-count indictment claims Gates and Manafort hid more than $30 million in income from the U.S. government. They allegedly disguised some of that money as “loans.” They made payments from overseas companies controlled by Manafort direct to U.S. vendors without telling the IRS. And they concealed the existence of overseas bank accounts from the federal government.

Andres wasted little time Monday getting to the heart of the case.

“Were you involved in any criminal activity with Mr. Manafort?” he asked Gates.

“Yes.”

“Did you commit any crimes with Mr. Manafort?”

“Yes.”

Gates testified to everything Mueller’s lawyers have alleged: the hidden overseas accounts, the alleged disguising of income as loans, the false tax returns. On the stand, Gates pinned the blame on his former boss — he executed the wire transfers and left the foreign bank accounts off the tax returns, he said, at “Mr. Manafort’s direction.”

Gates also testified that he stole from Manafort. This wasn’t petty cash; Gates said he embezzled “several hundred thousand” dollars with money drawn from the Cyprus accounts using phony expense reports submitted to the firm. He testified that he made the federal government aware of his theft in one of his 20 meetings with the government. This was always going to be the weak spot in the prosecution’s case — their star witness had committed his own crimes right alongside Manafort — and it felt all the more glaring on Monday.

Even as he related his crimes, though, Gates was unshaken. He sounded practiced. He answered the prosecution’s questions as quickly as they could be asked. He moved between the details of the alleged fraud he committed at Manafort’s request, to his work in Ukrainian and Cypriot politics, to the complicated financial shell game he and Manafort had created with corporations and banks accounts in Cyprus, the Grenadines and the United Kingdom. He rattled off the smallest details of how he and Manafort and their colleagues referred to their clients: Yanukovych was “VFY,” in company lingo, or “BG” for Big Guy. Another was simply “Dr. K.”

Gates even reserved some praise for his former boss. It was Manafort, he said, who had brought Yanukovych “back from the dead.” He described Manafort as “probably one of the most politically brilliant strategists I’ve ever worked with.”

Manafort sat motionless in his chair a few feet away, his eyes fixed on his former protégé. How would one of D.C.’s most venerable operators work his way out of this one?

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