Greg Craig jury hears testimony on DOJ meeting key to his indictment

By Josh Gerstein

Jurors at Greg Craig’s trial heard their first testimony Friday about a critical meeting where prosecutors say the former Obama White House counsel attempted to trick Justice Department officials into concluding that he did not need to register as a foreign agent.

However, the brief appearance by one of Craig’s former law partners, Kenneth Gross, failed to shed much light on the encounter at the heart of the government’s case: an October 9, 2013 exchange between officials from Justice’s Foreign Agent Registration Act office and attorneys from Craig’s law firm at the time, Skadden Arps.

Prosecutors contend Craig asserted at the meeting that his contacts with journalists about a report Skadden prepared on behalf of Ukraine’s government were entirely reactive, meaning that he was solely responding to inquiries and not actively soliciting news coverage about the report. Under FARA, disseminating the report for Ukraine would likely have triggered a requirement to register.

Gross — a prominent election law practitioner in Washington — said he had only a vague recollection of the session, but remembers Craig saying he spoke to reporters to head off inaccurate stories.

“Greg was making the point that the contacts he had with certain press was to correct misinformation that were either printed or about to be printed or he knew was going to be printed and the purpose was to say, that’s not correct — they’re mischaracterizations,” Gross said. “That’s what I remember at that meeting.”

While the meeting is important to the government’s case charging Craig with an attempt to conceal material facts about the Ukraine-focused report, prosecutors are unlikely to be able to prove exactly what the prominent Washington lawyer said at the session.

Gross said he did not take notes and does not believe any of the Skadden lawyers did. The government has also failed to locate any notes taken by the Justice Department officials at the meeting, defense attorneys said.

Craig is accused of dissembling about his actions related to a 186-page report Skadden prepared on Ukraine’s controversial prosecution and conviction of former Prime Minister Yulia Tymoshenko. The $4.6 million review was officially commissioned by Ukraine’s Ministry of Justice, but secretly funded by an extraordinarily wealthy Ukrainian steel tubing magnate, Viktor Pinchuk.

Prosecutors have suggested that Craig lied when he said that in all his dealings with reporters he was pushing back against mischaracterizations of the report. The prosecution has argued that when Craig delivered an embargoed copy of the review to New York Times reporter David Sanger’s home on December 11, 2012, the document had not yet been publicly released, so there could be no misinformation to rebut.

But defense lawyers say Craig had seen draft press releases and had other information convincing him that Ukrainian officials and public relations specialists Paul Manafort hired to spin the report were all but certain to distort the findings.

A one-question cross examination by defense attorney William Taylor elicited more testimony from Gross supporting the notion that Craig told the Justice Department officials that some of his comments were intended to prevent inaccuracies in stories that were not yet published.

“I remember something about the timing, either it had been printed or was going to be printed … that it was in a newspaper story [that had] already been published or was about to be published,” Gross said.

After the October 2013 meeting, the FARA enforcement unit at Justice reversed course and told Skadden it would not be required to register.

“I thought Greg had made a very persuasive case,” Gross said. “My sense was it was very well received by the FARA unit and we had a reasonable chance that they might make a determination in our favor.”

Craig’s prosecution is part of stepped up enforcement of FARA by the Justice Department, which named former Mueller prosecutor Brandon Van Grack in March to oversee that effort. Van Grack was on hand watching from the courtroom gallery during some of Friday’s testimony.

Before Gross took the stand, jurors heard about four and a half hours of testimony from another former Skadden partner called as a prosecution witness, Cliff Sloan.

Both Sloan and Craig were deeply involved in the report and the prosecution seemed to be suggesting to jurors that Sloan wanted to take a more conservative approach on some issues, in urging that the firm not hire a public relations firm to handle publicity about the report.

“We’re in this representation as lawyers, not spin doctors, and I think it’s important to say that,” Sloan wrote in an April 2012 email to Craig.

“Good advice,” Craig replied.

However, Sloan — who went on to serve a stint as the Obama administration’s envoy for Guantanamo closure — showed no reticence when it came to urging Craig to demand a large sum for the firm when he met the businessman Manafort lined up to pay for the report.

“Now, THAT is an important meeting. Don’t be bashful about asking for a lot,” Sloan said in one of several emails he read to the jury.

Over time, the funding of the report became a topic of increased controversy in Ukraine, eventually prompting an article in the Kyiv Post whose headline quickly grabbed the attention of the law firm’s public relations team: “Skadden Stink.”

Sloan said he and Craig both wanted to disclose that Pinchuk was paying for the report, but Pinchuk resisted. One email shown to jurors Friday suggested that Craig would have been pleased if someone leaked the businessman’s name to the press.

“I have already told Manafort he has got to get Pinchuk out whether voluntarily or non-voluntarily,” Craig wrote to Sloan in August 2012.

Jurors also saw a message supporting what prosecutors contend was Craig’s primary motive to lie to Justice officials: he was reluctant to register as a foreign agent because it might limit his ability to serve in a high government post in the future.

“I don’t want to register as a foreign agent under FARA. I don’t think there’s a need to with this assignment, yes?” Craig wrote in February 2012.

Messages shown to Sloan and jurors Friday also indicated that he was aware, at least to some degree, that Craig was interacting with the Times’s Sanger about the report.

Craig told Sloan that Sanger was pressing for a quote about a fine distinction in the report: that Skadden’s team didn’t attempt to address whether Tymoshenko’s prosecution was politically motivated, but did conclude she didn’t present the kind of evidence that would get a case tossed out for selective prosecution in the U.S.

“I would stay away from that one. It’s in the report – he can quote from there,” Sloan responded.

Despite Sloan’s advice, Craig wound up giving Sanger a quote on that point — the only quote from Craig that appeared in the Times story.

One email message shown to the jury suggested that after the Justice Department wrote to Skadden seeking more information about its role, Craig and Sloan had some disagreement about the scope of the firm’s response, with Craig favoring a more limited disclosure of other work Skadden was planning or hoping to do for Ukraine’s government.

“I don’t see any request for them to be informed of new or additional agreements,” Craig wrote to Sloan in April 2013. He then seemed to suggest that if Sloan insisted on disclosing that other work, Craig was prepared to take the issue to Skadden’s general counsel to resolve the issue. “Do you agree? If not, we will go to Larry Spiegel,” Craig added.

Prosecutor Molly Gaston led Sloan through a slew of draft memos and emails about proposed responses to Justice Department queries on the Ukraine project. Some of the questions seemed intended to show that Sloan was deferring to Craig in preparing the responses, in particular a passage where Skadden ultimately said it provided the report to a few media outlets between “December 12-13, 2012.”

In fact, Craig delivered the report to Sanger on December 11. The difference appears minor, but since the first stories about the report appeared on December 12, using an earlier date would have made clear that some of Skadden’s contacts preceded public release of the report.

One email from Sloan to Craig specifically urged Craig to double check the dates. “I assume you’re sure about the dates that you provide,” Sloan wrote.

However, defense attorney William Murphy later noted that the Times story explicitly said that Craig granted the Times an interview on December 12 in advance of the report’s release. That would suggest the FARA unit should’ve known Craig spoke to the Times before the report was made public, regardless of any dates in the letter.

“The article seems to indicate that Mr. Craig spoke to the Times before the report was released,” Murphy said.

“Yes, it does seem to show that,” Sloan responded.

Murphy also managed to get Sloan to undercut prosecutors’ suggestions that any interaction with Ukraine’s public relations team may have been improper if Skadden did not intend to register under FARA. Sloan said he thought it would be appropriate to brief the public relations specialists about the contents of the report and that wouldn’t require registering.

By the end of the day Friday, it was unclear whether Sloan’s testimony — and the raft of accompanying exhibits — had actually advanced the prosecution’s case. While some of the evidence seemed unhelpful to Craig, the process of drafting Skadden’s responses involved so many iterations, drafts and individuals that jurors could have trouble being certain that any particular passage in Skadden’s letters to the Justice Department originated with Craig.

“Most of the scribbling on this document is in your handwriting?” Murphy asked, showing jurors a draft covered in scrawled notations, some in red and some in black.

“Yes,” Sloan replied.

A secretary combined the input from both lawyers, Murphy said. “One of them has his embellishments? And one of them has your tweaks?” the defense lawyer asked. “Some of the changes are in blue, some of the strikeouts are in red and some of the questions are in purple, right?”

Sloan insisted he had no inkling as he was discussing responses to the letters of any effort by Craig or anyone else at Skadden to mislead. Sloan is not charged in the case, but Murphy gingerly suggested at one point that perhaps he could have been, noting that another Skadden lawyer proposed that either Sloan or Craig sign the first response to the Justice Department.

“It’s [Craig’s] name that’s been plugged in there,” Murphy said.

“It’s his name on the draft, yes,” Sloan replied.

While the jury will decide if Craig misled the Justice Department, one email made public Friday shows that Craig himself was misled during one of the key events in question — an early conversation with Sanger.

The December 2012 exchange took place soon after Hillary Clinton announced plans to step down as secretary of state. In an email to Sloan shown to jurors Friday, Craig recounts Sanger’s prediction for who would take over at the State Department.

“He thinks it will be Susan and that Dennis will be Deputy,” Craig told his colleague. Sloan said he took the message to mean that Susan Rice would be nominated as secretary of state with Denis McDonough serving as deputy secretary.

Neither was nominated to those jobs. A few days later, it emerged that Obama tapped Sen. John Kerry (D-Mass.) for the Secretary of State post. The deputy secretary at the time, Bill Burns, served nearly two more years before retiring from the foreign service in 2014. Rice went on to become national security adviser, while McDonough was named as White House chief of staff.