Tierney_j1gbg4

Tierney Sneed

Tierney Sneed is a reporter for Talking Points Memo. She previously worked for U.S. News and World Report. She grew up in Florida and attended Georgetown University.

Articles by

That fat lady has not yet sung in the Paul Manafort case, despite a verdict delivered Tuesday in Virginia federal court finding the former Trump campaign chairmen guilty of eight counts of bank fraud and tax fraud, and the jury hung on 10 others.

Read More →

By December 2015, Paul Manafort had a plan.

His lucrative income from consulting in Ukraine had dried up, with the exile of his top client. His attempt to pivot by representing a new Ukrainian political party made up of the remnants of the old coalitions had failed to take off, and he was struggling even to pay his taxes.

As a Dec. 22, 2015 email to his accountant and his bookkeeper indicated, he was turning to borrowing from banks — in what special counsel Robert Mueller has alleged were ultimately fraudulent loan applications — to stay afloat. Manafort informed his outside financial help that he was taking out loans on two properties — loans that would eventually be at the heart of the special counsel’s bank fraud case against him.

A loan on his condo in SoHo would allow him to pay off loans against his credit line, including loans to fund a movie his daughter directed. A loan on a townhouse he bought in Brooklyn would let him finish construction on the property, while paying back his mortgage on his Trump Tower apartment.

Three months later, Manafort and Donald Trump would become more than just neighbors.

In March, Manafort would join the GOP candidate’s campaign, quickly rising to become its chairman, while scrambling behind the scenes to secure funds from the banks, using, according to prosecutors, a series of misrepresentations including falsified financial documents and “lies” about the use of the properties.

In his attorneys’ retelling, Manafort had delegated the details to outside professionals he employed, and the alleged falsities were merely clerical errors. If the banks had any concerns about lending to Manafort, or if his accountants questioned his tactics, they certainly didn’t say so to authorities.

“Nobody came forward to say we’re concerned about what we’re seeing here. Not until the special counsel showed up and started asking questions,” Manafort attorney Richard Westling said during last week’s closing arguments.

Regardless, what the two and half week trial has borne out is that while Manafort was leading a presidential campaign, he was also working to secure millions of dollars in desperately needed financing and to maintain the appearance that he was an extraordinarily wealthy individual.

By the summer of 2016, his two objectives — electing Trump and securing loans to ease his financial woes — had become intertwined.

The prosecutors have offered for the jury, currently deliberating, hundreds of pages of exhibits documenting not only the financial crunch Manafort was in when he took the Trump campaign job, but how he continued to leverage his proximity to Trump to woo lenders, even after his departure from the campaign. Regardless of the jury’s verdict on the bank fraud and tax fraud charges, we now have a much clearer picture of the dire straits Trump’s campaign manager found himself in before and during the campaign, and the allegedly illegal steps he took to get himself out of it.

‘How Could I Be Blindsided Like This?’

It’s not entirely clear when Manafort realized the depth of the financial hole he’d dug himself, but his money troubles had manifested by April 2015, while he was preparing his 2014 tax return.

“WTF?” Manafort wrote in an email, after learning from right-hand man Rick Gates that his tax bill would be around a half millions dollars. “How could I be blindsided like this? You told me you were on top of this. We need to discuss options. This is a disaster.”

Gates, originally a co-defendant in Mueller’s case against Manafort, flipped and testified against his old boss at the Virginia trial.

After years of allegedly hiding his income from the IRS through the use foreign accounts, according to prosecutors, Manafort took the alleged tax fraud scheme further, asking his accountants to disguise some of his income as loans so that he wouldn’t have to pay taxes on the money.

His bookkeeper, Heather Washkuhn, testified that around this time he was having trouble paying his bills, including the invoices for her services.

“I had asked multiple times for bills to be paid and there wasn’t enough funds to pay them,” she said, while questioned by prosecutors about repeated emails she sent Manafort seeking authorization for her to pay various obligations.

One such email included an April 2016 plea from the bookkeeper asking for funding to pay health insurance premiums for Manafort’s business.

In another January 2016 email, Gates asked Washkuhn to transfer $76,000 from Manafort’s line of credit to his consulting firm’s account.

“There is zero availability” on the line of credit, she replied. Other documents offered during the trial revealed the that Manafort’s firm, according to the records kept by Washkuhn, had made less than $400,000 in 2015 and had reported a net loss of more than $1 million in 2016.

That lack of income posed a problem for Manafort as he embarked on negotiations for his loans.

David Fallarino, a loan officer at Citizens Bank, informed Manafort in February that he “fail[ed] the liquidity test.” A day later, the bank’s underwriter wrote Fallarino skeptical about Manafort’s business tax returns: “The business did not have the liquidity to disperse these $’s.”

According to prosecutors, Manafort and Gates got around these impediments by backdating documents to prove that money shown as a loan on Manafort’s taxes — it was, in fact, never a loan to begin with, his accountant testified — had been forgiven and thus should be counted as income.

But that was only the start of their accounting tricks, according to the government’s case. Manafort described his SoHo condo as a residence — prosecutors put forward evidence that it was listed on AirBnB — because claiming it as a second home would allow Manafort to seek the “maximum benefit” in loan applications, he told Gates in an email.

Gates, allegedly at the instruction of Manafort, misled the bank about the existing mortgages on Manafort’s other properties. Manafort closed on a $3.4 million loan from Citizens Bank, though a second loan he pursued from the bank was denied. He also successfully sought a $1 million construction loan from the Banc of California that spring.

As part of the Citizens Bank negotiations, Gates fretted to Manafort that “we are not going to get even close to the income level of 2014,” as the bank indicated would be necessary in order to be approved for the loan. Gates admitted in testimony he had doctored the financial statement for Manafort’s businesses to show more than $6 million more in income than what the firm had received in 2015. A chain of March 16 emails released during the trial capture Gates frantically seeking a digital version of the statements created by Manafort’s accounting firm that would have allowed him to make the edits.

Manafort attorneys in the trial defended the submission of the inflated financial statements, arguing that the millions were income Manafort had earned and was expecting to receive later that year.

‘I Look To Your Cleverness’

Through this financial scramble, Manafort gave few, if any, public hints of being hard up for cash. On March 22, he renewed his business’ Yankees season tickets for a seven-year term for more than $200,000. When he was hired by then-candidate Trump a week later, Manafort declined to take a salary.

After he joined the campaign, he remained cc-ed on email conversations during which, prosecutors allege, Gates and others continued to make false representations about his financial status.

There are some vague references to the new responsibilities he had taken on by leading the Trump campaign; an April 2016 email from a Citizens Bank employee asking Gates to write a letter for Manafort’s loan application notes that Manafort’s hands are “full.”

Manafort’s attorneys have argued that by depending on Gates to handle his financial affairs, he trusted the wrong person. Gates has admitted to embezzling from Manafort’s business.

Regardless, by July, Manafort had taken matters into his own hands while applying for loans from Federal Savings Bank. Its CEO, Steve Calk, learned that the Trump campaign chairman was seeking to borrow from his bank from one of his employees, who testified that he told Calk about the Manafort referral because he knew Manafort was “involved in politics” and “Steve was interested in politics.”

Calk and Manafort had a series of meetings, many without any other bank employees present; Calk personally approved the terms of loans Manafort proposed.

“He was directly involved,” the employee, Dennis Raico, testified, while claiming he had never seen Calk get involved in the details of any other loans he’d worked on for the bank.

Calk approved a loan application the day after a July 27 meeting with Manafort where he told Manafort he was interested in helping Trump, according to Raico’s testimony.

A week later, Manafort reached out to Calk, “[p]er our conversation,” about serving on Trump’s campaign as an economic advisor, a position Calk accepted enthusiastically.

On Aug. 19, Manafort was ousted from the Trump campaign as his political work in Ukraine and the money he had earned fell increasingly under scrutiny. But Manafort and Calk stayed in contact. At lunch with Calk, according to an Oct. 7 email presented at trial, Manafort apparently misstated the details of one of his existing mortgages by $1 million. He emailed Calk to tell him he would not be able to come up with the cash to cover the $1 million difference, as another bank employee indicated he would need to do.

“I look to your cleverness on how to manage the underwriting,” Manafort said.

The negotiations over that particular loan would fall through, but Calk would push for a revised $9.5 million proposal for Manafort that would close in mid-November.

As part of those negotiations, Manafort would continue to misrepresent his company’s earnings, according to prosecutors. A set of emails from Oct. 21 introduced at trial show Manafort seeking Gates’ help in converting a financial document for his companies’ year-to-date earnings that year into a word file, allegedly to edit it. That “REVISED” financial statement, as one of Manafort’s emails to Gates called it, showed his firm earning more than $3 million in income through Sept. 30, 2016. The financial statement also misspelled the words “September” and “review.”

On Nov. 15, the day before the loan closed and less than a week after the election, Calk sent Manafort a memo pitching himself for a position in Trump’s cabinet, and included a ranking of jobs he would prefer. Army Secretary topped the list. Two weeks later, Manafort emailed Trump son-in-law and top advisor Jared Kushner recommending Calk for Army Secretary.

Calk would never get a job in the Trump administration; it does appear, according to one email shown at trial, that he at least scored tickets to the inauguration. Scrutiny of Manafort and his Ukraine work continued, meanwhile, as questions about the campaign’s Russia ties moved front-and-center in the press.

But Manafort would get one more loan, this one for $6.5 million, approved by Federal Savings Bank in January 2017. Part of the loan was a construction loan on the Brooklyn townhouse that Manafort told his accountants he was seeking more than a year earlier.

Read More →

The Virginia jury deliberating the fate of former Trump campaign chairman Paul Manafort left the courthouse Monday without delivering a verdict.

The jury deliberated until about 6:15 p.m. ET Monday, raising speculation that they were close to a verdict since they typically end the day a bit earlier. However, the jurors will return Tuesday morning at 9:30 a.m. ET for their fourth day of deliberation.

Deliberations in the case began Thursday morning. The jury laid off around 5 p.m. ET on Thursday and Friday. On Thursday, the jurors ended the day with a series of four questions for the judge. On Friday, they broke early because a juror had an event to attend.

After taking the weekend off, the jury resumed deliberations Monday shortly after 9:3o a.m. ET.

Manafort faces multiple counts of bank fraud and tax fraud in the federal criminal case, the first case to go to trial in special counsel Robert Mueller’s Russia probe.

Read More →

North Carolina continues to be a hotbed for battles over the GOP legislature’s anti-voting rights moves. Republican lawmakers there had sought to remove from November’s ballot the party ID of a GOP candidate for the state’s Supreme Court out of fear that the candidate — who switched parties weeks before registering for the race — would draw votes away from the GOP incumbent on the court. That move was quickly challenged by the candidate, Chris Anglin, and a court last Monday blocked the law stripping him of his party affiliation.

The party ID lawsuit is not the only voting rights issue fueling a clash between North Carolina Republicans and the state’s courts. The wording that the legislature chose for two November ballot initiatives — wording that their critics said was intentionally misleading — has also been challenged in court. Both ballot initiatives seek to take power away from the state’s governor, currently a Democrat, and target his ability to name commissioners on state boards and appoint judges. Last week, North Carolina’s Republican Party Chairman ratcheted up the tension over the legal showdown by suggesting that judges should be impeached if they rule against the GOP legislature in the lawsuits.

A former member of President Trump’s now-defunct voter fraud commission suffered a court loss last week, when a federal judge let a lawsuit proceed against him and his group, which seeks more aggressive voter roll purges. The lawsuit alleges that J. Christian Adams and his group Public Interest Legal Foundation engaged in voter intimidation by publishing two reports, known as Alien Invasion and Alien Invasion II, claiming to document thousands of non-citizens on Virginia’s voter rolls. A handful of those named in the reports’ materials — which also included some of their addresses and other private information — sued because they are in fact citizens, and accused Adams and PILF of defamation. A federal judge in Virginia last week denied the defendants’ request to throw out the lawsuit.

That wasn’t the only court victory voting rights advocates secured last week. A federal judge in New Hampshire last week struck down a law passed by the state’s Republicans that permitted election officials to throw out absentee ballots if they believed the signatures on the ballots did not match the signatures on the state’s records. U.S. District Judge Landya McCafferty ruled that the law was a constitutional violation.

The fight is just beginning, however, in Georgia over a county elections board’s proposal to shutter seven out of the county’s nine polling places. The population of the county, Randolph County, is more than 61 percent of black, and the move comes after Democrats nominated a black woman as their gubernatorial candidate. The Lawyers Committee for Civil Rights Under Law sent the elections board a letter Sunday threatening to sue if it moved forward with the polling place closings.

Read More →

At the end of the second week and continuing into the third week of Paul Manafort’s financial crimes trial, the parties spent hours discussing a matter that remains under seal. There’s been quite a bit of speculation about the topic of these private discussions. Unless the parties object, we might find out what those conversations were about. U.S. District Judge T.S. Ellis indicated Monday morning that he would be releasing most of the conversations he had with the attorneys at the Manafort trial that remain under seal at the moment.

Media companies had filed a request to unseal the discussions, usually occurring at Ellis’ bench, that occurred over the course of the trial, where the jury remains in deliberations.

Ellis said Monday that the jurors’ names, which the news outlets also requested, would remain under seal, as would a bench conference that prosecutors had previously asked the judge to keep under seal, because it dealt with the details of special counsel Robert Mueller’s investigation. He asked the two parties to look over transcriptions they’ve received, which include the sealed discussions, and to confer on whether any other parts of those conversations should remain out of the public’s view.

What they request to remain under seal “should be very, very small proportion of the whole” of the transcript currently under seal, Ellis said.

Later on Monday morning, the parties returned to the courtroom, presumably with follow up questions about the unsealing of the bench discussion. Much of that conversation took place at the bench and was inaudible to reporters in the courtroom. However, the judge signaled that it would be among the conversations eventually unsealed and that he planned to unseal the bench discussions at the end of the trial.

Many of the bench conferences  have already been publicly available in transcripts ordered by the media. However, beginning during the second week of trial, the parties spent hours discussing one matter. They had also, apparently, filed sealed court documents on this matter before these discussions. What it is remains unknown to the public.

Ellis’ remarks Monday came after the judge convened the jury, took the roll and let them leave to continue their deliberations, which entered day three on Monday.

Manafort’s legal team, his wife and most of the prosecutors were present Monday morning in the court room. Ellis did, however, note the absence of Greg Andres, a member of Mueller’s team, and asked if he was OK, as one of his own law clerks was ill.

“He’s fine, your honor,” prosecutor Uzo Asonye said.

Caitlin MacNeal contributed reporting.

Read More →

Dozens of reporters’ hearts skipped a beat during an otherwise low-key proceeding Thursday morning when Judge T.S. Ellis, who is overseeing Paul Manafort’s financial crimes trial, indicated that a “Mr. Trump” was in the courtroom.

“Mr. Trump, you’re here for what?” Ellis asked.

He had just wrapped up a brief proceeding with the members of the Manafort jury as they kick off their deliberations. Everyone turned around dramatically to find who Ellis was talking to. Then laughter began.

“Mr. Trump,” it turns out, is Jim Trump, a prosecutor in the Eastern District of Virginia who had a case in front of Ellis this morning.

To give you a sense of what the next hours and/or days will look like for us: The jury has gone into deliberations, which means either Caitlin or myself will be in the courthouse at all times to be ready for a verdict. Whichever one of us is not in the courtroom will be hanging out in the hotel across the street, keeping an eye on the defense team, which is usually milling about the lobby, for any sign of movement towards the courthouse.

Another fun twist is that the New York Jets football team is staying at the same hotel. I wonder what they’ll think of the mad rush into the courthouse that will likely ensue when a verdict comes in, and how it will compare to their pile-ups on the field.

Read More →

Two weeks after Federal Savings Bank extended a $9.5 million loan to Paul Manafort, the former Trump campaign chairman emailed Jared Kushner recommending that the bank’s CEO serve as Army secretary in the Trump administration.

The November 30, 2016 message was one of several emails related to the loan released by special counsel Robert Mueller on Monday night, as part of his trial against the former campaign chairman, who prosecutors allege defrauded Federal Savings Bank and other banks. Those emails, and other evidence prosecutors have introduced, suggest that Federal Saving Bank CEO Steve Calk had expressed a desire to serve in the Trump administration as he was deeply involved in negotiating Manafort’s loans.

Calk emailed Manafort on November 15, 2016 — the day before the $9.5 million loan closed — a memo “prepared” at Manafort’s “request” pitching his qualifications to serve as Trump’s Army Secretary.

“My goal is to ensure you or my designated prosper has all the information they need to have me successfully chosen by the President-Elect,” Calk said.

The email also included a ranking of the other “Perspective Rolls” in the administration.

Prosecutors accuse Manafort and Calk of engaging in a quid pro quo with the loan and the promise of a Cabinet post. Calk was also named to a Trump campaign advisory committee days after he approved an initial loan proposal for Manafort over the summer, according to a bank employee’s testimony.

Other evidence introduced by the prosecutors indicate that Manafort gave false information to the banks in the process of applying for the loans, which totaled $16 million. In one email, Manafort cops to misstating an existing mortgage one of his homes by $1 million — a mistake he blamed on a “blackout” in a October 7 email to Calk.

“I look to your cleverness on how to manage the underwriting. I recognize it was my mistake at our lunch, but the situation is as described,” Manafort wrote. Calk replied with some ideas for adjusting the terms of the loan.

The next day Manafort emailed Calk seeking to set up a time to get in touch.

“I also want to again thank you for fixing my issue. It means a lot to me. You are becoming a very good friend and I look forward to building our relationship into both a deeper business and personal one,” Manafort said.

Later that month, Manafort would walk away from the terms of that loan proposal, but would negotiate another version of the loan ultimately extending him the $9.5 million in November. In January 2017, he closed a second loan, for $6.5 million, from the bank.

Read the emails below:

Read More →

Irony is certainly not dead in the state of Kansas, where the GOP gubernatorial primary is wrought with accusations that one of the candidates — Kansas Secretary of State Kris Kobach, perhaps the most notorious purveyor of voter fraud alarmism — is mismanaging the vote count of his own race.

Kobach announced Thursday that he was recusing himself from overseeing the vote tallying in his race against the current governor Gov. Jeff Colyer. The race is too close to call and may go to recount. After the correction of a Kobach-office clerical error revealed that Kobach’s lead had shrunk below 100 votes, Colyer had written Kobach a letter requesting his recusal and accusing Kobach of “making public statements on national television which are inconsistent with Kansas law and may serve to suppress the vote in the ongoing Kansas primary election process.”

In a brilliant move of trolling, the Colyer campaign also set up a “voting integrity” telephone hotline.

Even after Kobach’s recusal, concerns were raised about the fact that the deputy who is now overseeing the count, Assistant Secretary of State Eric Rucker, donated to Kobach’s campaign.

Massachusetts Republican Gov. Charlie Baker signed a bill last week making the state the 14th in the country to adopt automatic voter registration. The opt-out system will go into effect in 2020, according to elections officials in the state.

There’s a new twist in the fight between North Carolina’s Democratic Gov. Roy Cooper and the state’s GOP legislature that’s seeking to take over much of his authority. In the lawsuit Cooper brought against North Carolina’s election board to stop two ballot initiatives that would curb his ability to appoint judges, as well as name commissions on various state boards, attorneys of the elections board are siding with Cooper in the case. At a hearing on Tuesday, a document written by the elections board attorneys said that the legislature had “adopted false and misleading ballot language” in the initiatives, mimicking the governor’s position in the case

Iowa’s state Supreme Court on Friday mostly upheld a lower court’s decision to block new absentee ballot voter restrictions from going to effect. Friday’s decision halted the requirement that absentee voters provide an ID verification number on their ballot, as well as a provision letting election officials throw out absentee ballots if they believed the ballots’ signatures didn’t match the signatures the state has on file for the voters. The decision did allow for the absentee voting period to be shortened from 40 days to 29.

In Indiana, the state’s attorney general is fighting the implementation of a settlement that a bipartisan county election board reached to expand early voting in Marion County, the most populous county in Indiana, after a federal judge ordered the county to open more early voting polling places. Attorney General Curtis Hill said Tuesday in a court filing seeking to block the agreement that the settlement was “contrary to public interest.”

Read More →

Just because a bank CEO was aware that Paul Manafort was committing bank fraud doesn’t make Manafort’s conduct any less fraudulent, special counsel Robert Mueller’s prosecutors argued in a court filing Monday morning.

The filing appeared to be prompted by a bench discussion the attorneys had with the defense and Judge T.S. Ellis on Friday, pertaining to Steve Calk, the CEO of The Federal Savings Bank (TFSB) who served as a Trump campaign advisor.

Federal Savings Bank was one of a number of lenders that prosecutors say were misled by false representations made by Manafort in applying for millions of dollars in loans in late 2015 and 2016. Manafort was approved for a Federal Savings Bank loan the day after Calk expressed to the Trump campaign chair interest in working for Trump, a bank employee testified last week. The prosecution presented other evidence that Calk was promised campaign and administration positions while negotiating Manafort’s loans.

During Friday’s bench conversation about whether statements by Calk could be admitted, Ellis “expressed concern about the notion that TFSB could be defrauded when Calk, who ultimately approved these loans for TFSB, was going to approve the loans for personal reasons,” according to Monday’s filing.

“The Court questioned whether Manafort’s fraudulent representations could be material if the bank’s chairman and CEO, and a significant shareholder of the bank’s holding company, intended to grant Manafort the loans regardless,” the filing said. “Picking up on the Court’s comments, the defense suggested that Manafort could not have defrauded the bank if Calk knew Manafort’s representations were false. …The Court agreed that it did not ‘see the materiality.'”

In the filing, prosecutors went on to argue that the fact that “Calk apparently intended to approve the loans for personal reasons has no bearing on the materiality of Manafort’s misrepresentations.”

The prosecutors are asking that Ellis “recognize the lack of merit in any defense argument that Stephen Calk’s complicity in or awareness of Manafort’s fraud on TFSB renders immaterial as a matter of law Manafort’s false and fraudulent representations to TFSB for purposes of obtaining loans.”

Read the full filing below:

Read More →

LiveWire