reporter's notebook

Today We Learned That Manafort Has ‘Millions’ Tied Up Because Of A Money Laundering Count

on April 19, 2018 in Washington, DC.
WASHINGTON, DC - APRIL 19: Former Trump campaign chairman Paul Manafort leaves the. Barrett Prettyman Federal Courthouse after a motion hearing on April 19, 2018 in Washington, DC. Manafort has pleaded not guilty to... WASHINGTON, DC - APRIL 19: Former Trump campaign chairman Paul Manafort leaves the. Barrett Prettyman Federal Courthouse after a motion hearing on April 19, 2018 in Washington, DC. Manafort has pleaded not guilty to charges that include conspiracy against the United States, conspiracy to launder money, being an unregistered agent of a foreign principal, making false statements, and failure to file reports of foreign bank and financial accounts. (Photo by Mark Wilson/Getty Images) MORE LESS
April 19, 2018 5:40 pm

At a hearing Thursday morning, Paul Manafort’s attorneys made a dense and heady argument that Special Counsel Robert Mueller’s money laundering count against their client should be thrown out — and, in doing so, gave us a hint of what might be driving this particular request.

One of Manafort’s attorneys, Richard Westling, told U.S. District Judge Amy Berman Jackson that “millions of dollars” Manafort made from lobbying work in Ukraine were under restraint — meaning Manafort currently can’t touch the money — due to what Westling argued was a “thin” legal theory that prosecutors were pushing.

The implication was that, because this money was tied up, Manafort was unable to use it to pay his legal fees.

Manafort’s lawyers’ argument comes two weeks after we learned that in 2017 Mueller had seized funds from at least three Manafort-linked bank accounts. Another filing last week revealed that a bank account owned by Manafort’s daughter and her husband also had been seized.

Westling was arguing in favor of dismissing count two in the Manafort indictment in Washington, D.C. (Mueller has brought a separate case against Manafort in Virginia.) The count alleges that money Manafort made while allegedly violating the Foreign Agents Registration Act (FARA), which requires that lobbying done in the U.S. on behalf of foreign powers be disclosed, was part of a money-laundering conspiracy.

Manafort is also seeking to throw out the related forfeiture allegation, which says that if Manafort is convicted of the money laundering conspiracy, the government can seize all property traceable to the money laundering scheme.

Manafort’s attorneys, in a court filing, asked that the court “release any and all property currently held based upon that allegation.”

They argued that the money Manafort made lobbying for a pro-Russia Ukrainian party shouldn’t be considered tainted because it isn’t the act of lobbying that is allegedly illegal under FARA, just Manafort’s alleged failure to disclose it.

Jackson brought up language in the FARA statute that linked the registration requirement to the act of lobbying, suggesting she was skeptical of Manafort’s attempts to distinguish the two. She later asked why it shouldn’t be up to a jury to decide whether Manafort was trying to keep his undisclosed lobbying work under the radar by funneling the funding for it through an “XYZ corporation” in some foreign country.

That question led to Westling’s comment about “millions” of Manafort’s dollars being restrained. His remark implied that waiting for a jury is detrimental to Manafort’s ability to pay for a robust legal representation now.

Even before Manafort was first hit with Mueller’s indictment in October, there were clues that he was struggling to cover the costs of his legal representation. He parted ways from Wilmer Hale, a major D.C. law firm, in August in part because of the financial strain of their representation, the Daily Beast reported. He then hired Kevin Downing and Thomas Zehnle, who had previously worked at a boutique law firm. (They left the firm Miller & Chevalier soon after taking on Manafort because representing him posed a conflict for the firm.) Westling joined Manafort’s team last month.

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