(Bloomberg) -- Gregory Craig, a prominent corporate lawyer and former adviser to Democratic presidents, was indicted by a U.S. grand jury in Washington, accused of making false statements and concealing information about his firm’s work on behalf of Ukraine.
U.S. prosecutors laid out how Craig, a top partner at Skadden Arps Slate Meagher & Flom, took pains to avoid registering his work as foreign lobbying -- in part, they allege, out of a belief that registering under the so-called FARA law would prevent him and others from taking government jobs in the future.
Craig’s efforts included backdating a letter and invoice to obscure that a private Ukrainian had funded the work and allowing the Ukrainian government to lie about how much the work cost, prosecutors said in a 22-page indictment filed Thursday. Craig will be arraigned on Friday.
“I don’t want to register as a foreign agent under FARA. I think we don’t have to with this assignment, yes?” Craig wrote to another partner in the firm on Feb. 13, 2012, according to the indictment.
After the partner suggested that a fellow lawyer at the firm could render an opinion on whether to register, Craig wrote: “I don’t really care who you ask but we need an answer from someone who we can rely on with a straight face.”
In January, the firm paid $4.6 million and agreed to register as a lobbyist for a foreign government, as part of a Justice Department settlement. Skadden admitted it should have registered earlier for the work it did to benefit Ukraine with Paul Manafort, who went on to become Donald Trump’s campaign chairman. At the time, prosecutors said the Skadden partner on the project made false and misleading statements to the Justice Department. The partner was separately identified as Craig, who left the firm in April 2018.
The charges are the first against a high-profile Democrat to emerge from Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 election. Craig defended President Bill Clinton against impeachment and was the first White House counsel under President Barack Obama.
The allegation that Craig misled the Justice Department is in itself unfair and misleading, Craig’s lawyers said. “It ignores uncontroverted evidence to the contrary. Mr. Craig had no interest in misleading the FARA Unit because he had not done anything that required his registration. That is what this trial will be all about," William Taylor and William Murphy said in a statement Thursday afternoon.
“I never discussed the findings of our report with any U.S. officials and certainly did not lobby any US officials on behalf of Ukraine,” Craig said in a separate statement. “I did not help Ukraine promote its spin when it released our report.”
Craig, 74 years old, faces as long as five years in prison for each of the two counts against him. He may be the most well-known white-collar professional to be charged under a lobbying disclosure law that was used heavily by Mueller’s team, but he’s unlikely to be the last.
The charges stem from work that Manafort arranged on behalf of the Ukrainian government in 2012, as part of an elaborate lobbying scheme for which Manafort ultimately pleaded guilty.
According to court filings, Manafort arranged for Skadden to produce a report examining the legitimacy of the prosecution of former Prime Minister Yulia Tymoshenko, who was a rival of Manafort’s client, President Viktor Yanukovych.
In the U.S. and European Union, the widespread view was that Tymoshenko prosecution was politically motivated. Skadden’s review, overseen by Craig, largely defended her conviction.
That position, however, may not have tracked with Craig’s own view. According to the Skadden settlement, Craig wrote a note to himself saying, “The evidence of criminal intent -- i.e., that she actually intended to commit a crime -- is virtually non-existent.”
The indictment also details how Skadden would be paid for the report and Craig’s alleged efforts to obscure details of the project’s funding.
When Craig flew to Kiev in April 2012 to discuss undertaking the project, he met with a wealthy Ukrainian who offered to pay Skadden $4 million for its work, in addition to a $150,000 advance already tendered, the U.S. said.
Skadden, in previous filings, has said it believed its work would be funded largely by Victor Pinchuk, who has denied any involvement.
The Ukrainian government executed a contract with Skadden, which stated that the law firm would be paid approximately $12,000 for its work. After an editorial in a Ukrainian newspaper raised questions about that low figure, Manafort and Craig scrambled to respond, prosecutors say. Craig wanted to disclose the Ukrainian funder’s name, according to the indictment. Manafort shot down the idea.
Eventually, Craig and Manafort agreed to create a backdated invoice from Skadden to the Ukrainian Ministry of Justice for $1.25 million, to make it appear that the work was funded by the government.
Craig’s lawyers castigated the government for bringing the charges and said their client had refused all requests to participate in Ukraine’s media campaign to promote the Tymoshenko report.
In the indictment, prosecutors allege that a public-relations firm developed a strategy to roll out the Tymoshenko report. Craig refused to sign on to the effort, which involved background conversations with reporters, because it would contradict his and Skadden’s position that it wasn’t acting as a lobbyist for Ukraine, prosecutors said.
Even so, the public relations firm eventually reached out to a reporter identified by Craig, offering an early copy of the report as well as an interview with Craig.
In an email to the reporter, a manager at the public relations firm wrote: “I’m working with Greg Craig [of Skadden, Arps] (who I understand you know well) and his client, the Ukrainian Ministry of Justice, on a report Greg has written on the Tymoshenko prosecution. We were wondering whether you’d be interested in receiving the report and a briefing with Greg on an exclusive basis.”
Craig delivered a copy of the Tymoshenko report by hand to the reporter’s home, according to the indictment, and spoke with a Moscow-based reporter for the paper, which has separately been identified as The New York Times.
After the Times published its story on the report, the Ukrainian government released it. Skadden responded to interview requests from two other U.S. publications.
Afterward, Manafort emailed Craig with the message, “Well Done.” He continued: “The pro has emerged again. The initial rollout has been very effective and your backgrounding has been key to it all. At least today, everyone in Kyiv is quite happy.”
Craig responded with praise for a Ukrainian newspaper article. “I am glad it went so well,” he wrote.
Two days later, Manafort emailed Craig again with a tally of news coverage. “You are back in the headlines internationally,” he wrote. “You are ‘THE MAN.’”
Mueller’s investigation turned a spotlight on the Foreign Agent Registration Act, a law that previously had been lightly enforced.
As part of his probe, Mueller brought FARA charges against Manafort for his work on behalf of Yanukovych and his pro-Russia Party of Regions. Mueller also brought FARA charges against former Manafort deputy Rick Gates as he sought to turn investigative targets into cooperators.
The Justice Department has signaled its intention to push ahead with similar cases. Before Mueller wrapped up his investigation, a prosecutor from his team, Brandon Van Grack, shifted to a unit that’s pursuing FARA matters, people familiar with the situation said at the time.
The case is U.S. v. Craig, 19-cr-125, U.S. District Court, District of Columbia (Washington).
Read more: Mueller Gets Plea, No Cooperation, as Skadden Lawyer Admits Lies
(A previous version corrected the day of the statement from Craig’s lawyers.)
(Updates with Craig Statement.)
--With assistance from David Voreacos and Stephanie Baker.
To contact the reporters on this story: Greg Farrell in New York at firstname.lastname@example.org;Andrew Harris in Washington at email@example.com
To contact the editors responsible for this story: Jeffrey D Grocott at firstname.lastname@example.org, David S. Joachim
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.