Jurors at Greg Craig trial see invoice he backdated for Manafort

Jurors at the trial of Greg Craig saw evidence on Wednesday that the former Obama White House counsel complied with a request from ex-Trump campaign chairman Paul Manafort for a backdated and irregular $1.25 million invoice for a politically sensitive project that Craig undertook for the government of Ukraine.

The jury also heard more details about the unusual funding arrangement for the report Craig prepared in 2012 on Ukraine’s prosecution of one of its former prime ministers, Yulia Tymoshenko, on abuse-of-office charges. While the review by Craig’s law firm Skadden Arps was commissioned by Ukraine’s Ministry of Justice, it was secretly funded by a Ukrainian steel magnate, Viktor Pinchuk, who ultimately forked over about $4.1 million for the project.

Prosecutors called Skadden’s chief financial officer, Noah Puntus, to testify that the firm’s billing files did not include a $1.25 million invoice that Craig presented to Ukraine in the summer of 2012.

“There was no bill for the amount of $1.25 million,” Puntus said.

“Was Mr. Craig, as a billing partner, authorized to issue an invoice such as this?” prosecutor Jason McCullough asked.

“This is not our standard practice,” Puntus replied.

Prosecutors also showed jurors an email from Manafort asking Craig to backdate the invoice.

“I need it dated July 28, 2012 which works [with] the timetable the MoJ wants to use for the procedure below,” Manafort wrote to Craig on Aug. 22 of that year.

Prosecutors appear to be suggesting that Craig was willing to go to considerable lengths to help Ukraine’s government to deal with its public relations headaches even as he was supposed to be preparing an independent report on the Tymoshenko prosecution.

Manafort, a top adviser to Ukraine’s then-president, Viktor Yanukovych, sought the invoice as the government’s critics were publicly questioning the source of funding for the Skadden project. Before the invoice prepared in August 2012 and dated the previous month, Ukrainian officials claimed that the prestigious U.S. law firm had been retained for the equivalent of about $12,000.

The backdated invoice and the secret collaboration with Manafort threatens to undercut the picture Craig’s defense has sought to paint him as a lawyer of impeccable character. His attorneys have argued he would never risk his sterling reputation by doing what he is formally charged with in the case: scheming to conceal information from the Justice Department when it launched an initial inquiry into whether he and Skadden should have registered under the Foreign Agents Registration Act.

Craig’s defense acknowledged in its opening statement last week that it had been unwise for him to prepare the document Manafort requested.

“Mr. Craig will be the first to tell you … he could be rightly criticized for signing it,” defense attorney William Taylor said, describing the request for funding as “exaggerated.”

The defense moved quickly Wednesday to dispel any notion that Craig might have been trying to pocket the $1.25 million.

“All the money was accounted for and the balance that was leftover at the end of the day was returned to the Ukraine. Is that right?” Taylor asked.

“That is my understanding from the documents that have been presented to me,” Puntus said.

While the prosecution said there was plenty of money on hand in August 2012 from the roughly $4 million Pinchuk sent to a Skadden escrow account, the defense noted that spending on preparation of the report was nearing $1 million a month at that point and suggested that Craig was simply trying to make sure there wasn’t a shortfall.

Earlier Wednesday, prosecutors showed jurors emails from the spring of 2012 in which Craig was pressing Manafort in blunt terms to get the money for the project.

“Paul I just met with Viktor who has been told by the COS to transfer 1.5m. This is not right and it is a serious problem for me,” Craig wrote in an April 2012 message. “All was clear between us….I really don’t want to deal with this other kind of bullshit. We are going unless your side lives up to its commitments. If it is not 2, we will leave tomorrow. Go home and say that we are lucky to be out of it.”

“You will have 2. Some is coming another way,” Manafort replied cryptically.

After being assured by Manafort that a bank wire had been sent, Craig sounded delighted. “You rock,” he wrote.

The $4 million reached Skadden from a Cyprus-based account for a Manafort-controlled company called Black Sea View Ltd. The firm was discussed at length at Manafort’s trial last year on tax and bank fraud charges brought by special counsel Robert Mueller’s team.

Manafort is now serving a seven-and-a-half-year prison term on those charges and others, including conspiring to evade the Foreign Agents Registration Act in connection with his Ukraine work. Craig’s defense has emphasized that much of what’s now known about Manafort wasn’t public back in 2012.

Manafort is not expected to testify at Craig’s trial, but prosecutors are expected to call Manafort’s close aide Rick Gates to the witness stand on Thursday. Gates, who served for a time as deputy chairman of the Trump campaign, cut an early plea deal with Mueller’s team and testified against Manafort at his trial last summer. Gates is free on bond as he awaits sentencing and continues to cooperate with prosecutors.

Craig’s defense team introduced jurors on Wednesday to one of the key allegations behind the cases against Manafort and Gates: that a Brussels-based organization they worked with, the European Centre for a Modern Ukraine, was actually a front group for Ukraine’s government.

The issue arose in front of the jury after prosecutors called Lucy-Claire Saunders, a former staffer for the public affairs firm Mercury, to testify about the details of a communications plan for the rollout of Craig’s report.

Saunders said embargoed delivery of the report to either Al Hunt of Bloomberg News or David Sanger of The New York Times was a key part of the plan and linked the idea to “possible positive relationships” with those journalists.

Craig eventually delivered the unreleased report to Sanger at his Washington home — a fact that prosecutors say Craig concealed from the Justice Department.

Defense attorney Paula Junghans said the Europe-based organization that Saunders thought she was working for “was supposed to be impartial” but was actually closely tied to Ukraine’s leadership.

“At some point, we started to realize that it was not what it seemed,” said Saunders, who left Mercury in 2015.

“We were told it was a nonprofit or nongovernmental organization,” she said. “Later, we came to believe that potentially it was funded by businessmen in Ukraine with close relationships to the government.”

Asked who told her the group was an NGO, Saunders said that it was Gates.

After Manafort and Gates came under scrutiny from the news media, law enforcement and Congress in connection with their roles on Trump’s campaign, Mercury submitted a belated, retroactive foreign-agent filing in April 2017 for its work for the European Centre for a Modern Ukraine.

In January 2019, Skadden reached a settlement with the Justice Department over its Ukraine-related work. The firm submitted a belated FARA filing and agreed to step up its compliance with the law, while also paying to the U.S. government $4.6 million, the net amount of funds it took in for the Ukraine work.