Rick Gates back in court to testify against former WH counsel

Gates was star cooperator for Mueller

By Katelyn Polantz, CNN
Mark Wilson/Getty Images

Rick Gates after a court hearing on Feb. 23, 2018.

(CNN) - Top Mueller cooperator and star trial witness Rick Gates had it easier his second time around.

Testifying Thursday at the second criminal trial since reaching his plea deal with federal prosecutors, Gates appeared at ease, even good-humored, as he spoke about former Obama White House counsel Greg Craig and his interactions with Paul Manafort's Ukrainian lobbying operation.

Manafort and Gates, who in the summer of 2016 directed Donald Trump's presidential campaign, were two of the highest-profile defendants in special counsel Robert Mueller's investigation.

At the time that Mueller's office of special counsel ended its work last spring, it had passed several of the federal investigations it started on to other US attorneys. The Craig case, in which the White House lawyer-turned-private attorney is accused of hiding his efforts for Ukraine from the federal government, was among those spinoff matters.

The Craig case is also an attention-getter for a foreign lobbying enforcement unit at the Justice Department that was reinvigorated during Mueller's investigation.

Prosecutors and defense attorneys on Thursday led Gates through a retelling of his plea and cooperation deal with Mueller, his time as Manafort's No. 2 and his various swindles before he came clean.

Though Gates has finished helping prosecutors in the Craig case, he could be called to testify again in November against former Trump adviser Roger Stone. That case appears to have less to do with Manafort's lobbying operation, and could reveal what President Trump knew during his 2016 campaign about WikiLeaks and the damaging hack of the Democrats.

 

The Gates and Manafort schemes

 

The questioning of Gates kicked off just before 10 a.m., Thursday, and his more than four hours in the witness box filled the jury's day. Among the first questions: Did he know a Paul Manafort?

Manafort, the Trump campaign chair in 2016, was not called to testify against Craig. Mueller had secured a plea deal from Manafort about a half year after Gates, yet Manafort's cooperation fell apart when he lied to the grand jury and prosecutors about several topics. Throughout the Craig trial, prosecutors have used other witnesses, like Gates and a technology specialist from Craig's law firm, to show jurors emails sent to or from Manafort, who directed the Ukraine work.

Manafort is currently serving a 7.5-year prison sentence for financial and lobbying-related crimes.

Gates spoke largely about his efforts to develop a public relations plan for a report by Craig's firm on the 2011 trial of a Ukrainian political figure. Gates and Manafort wanted news coverage of that report to land softly for then-Ukrainian President Viktor Yanukovych, and they allegedly coordinated with Craig to spin journalists.

Craig's law firm Skadden, Arps, Slate, Meagher & Flom, in fact, received more than $4 million from a Ukrainian to produce the supposedly independent report.

Gates said Thursday that he had sent one wire transfer to Skadden from Manafort's Black Sea View Limited shell account in Cyprus, after the money came from their client abroad.

A New York Times article about the report in which Craig was quoted "wasn't the greatest but at least was viewed neutrally" and influenced other media coverage of Skadden's report favorably for Manafort's clients, Gates said.

"From our standpoint, the success of it was very great," he added.

Gates, now clean-shaven, naturally frowns when he's being questioned. But his answers Thursday were lengthy, not standoffish, and he often turned to speak directly to the jury. It was a notable difference from his disposition in the pressure-cooker courtroom where Gates had testified a year ago against his longtime boss and took a pummeling during questions from Manafort's defense lawyer. Manafort was convicted at that trial.

Even so, on Thursday, Gates again admitted to several crimes for which he will not be charged, because of his plea deal.

Defense attorney Paula Junghans, arms crossed, asked him, "You lied?" "I did," Gates quickly responded.

He hid his own foreign bank accounts from federal regulators, lied on his tax filings in 2010 through 2013, lied to banks in order to borrow money, lied to Visa to raise his credit limit and stole directly from Manafort, he said Thursday. In all, Gates' stated income on his tax returns omitted more than $1 million. "I didn't pay the full amount of taxes," he said under oath. (He later came clean to the IRS before reaching his plea deal, he said.)

Those were in addition to the financial crimes he helped Manafort commit.

But 2016 was a cleaner year. Gates said the tax return he filed then -- the year he worked for the Trump campaign --was "a good tax return."

He also said that no, he had not submitted expenses to steal from the Trump campaign or from the 2016 inauguration, when Junghans asked whether he had.

That question had been unresolved at the Manafort trial when Gates testified there. During that testimony, Gates admitted to stealing money from Manafort. When he was asked then under oath whether he had submitted personal expenses to the inaugural committee for reimbursement, he said he didn't recall and that it was possible.

Gates pleaded guilty in February 2018 to two criminal charges, for conspiring with Manafort and making a false statement to Mueller's team. His plea was a significant reduction from the dozens of criminal charges he initially faced from Mueller.

 

Gates' last two years

 

Gates laughed quickly when asked about the extent of his cooperation with federal prosecutors. Over the last 18 months, he said, he's met with federal investigators 40 or more times, for this and other matters.

He said he's been "largely unemployed" since he became a cooperator with Mueller in February 2018.

"I agreed to tell the truth, I agreed to provide documents and other materials to the government, and I agreed to help them" at trials, including Manafort's last August.

At one point, the prosecutor asks Gates what would happen if he lied on the stand.

"I think the judge would find it not good, and also the government could tear up my plea agreement," Gates said, sitting feet away from the judge who will sentence him, Amy Berman Jackson.

His sentencing date has not yet been set.

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