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Investigations of Manafort in New York Are Beyond Trump’s Power to Pardon

Republican nominee Donald Trump and Campaign Manager Paul Manafort do a walk thru at the Republican Convention, July 20, 2016 at the Quicken Loans Arena in Cleveland, Ohio.
Brooks Kraft | Getty Images
Republican nominee Donald Trump and Campaign Manager Paul Manafort do a walk thru at the Republican Convention, July 20, 2016 at the Quicken Loans Arena in Cleveland, Ohio.

In July, President Trump wrote on Twitter that "all agree the U.S. President has the complete power to pardon."

But for Paul J. Manafort, who surrendered to the F.B.I. on Monday after being indicted on federal criminal charges, Mr. Trump's power has a limitation of potential significance: a presidential pardon does not apply to charges from state and local authorities.

Although it is not known whether Mr. Manafort will receive or even request a presidential pardon, he also faces scrutiny from authorities in New York whose prosecutions would not be subject to one.

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Cyrus R. Vance, Jr., the Manhattan district attorney, and Eric T. Schneiderman, the New York state attorney general, have been pursuing their own investigations into Mr. Manafort, a former campaign chairman to Mr. Trump. Although those investigations are unfolding separately from the federal case that the special counsel, Robert S. Mueller III, filed against Mr. Manafort, the New York authorities are examining some of the same activity highlighted in the federal indictment, underscoring the relevance of their exemption from a potential pardon.

The two New York prosecutors, both Democrats, have issued subpoenas and sought financial records about Mr. Manafort's real estate and business activities in New York, according to three people briefed on the investigations who were not authorized to discuss law enforcement matters that were continuing. Possible violations being pursued by Mr. Vance could carry prison sentences of up to four years for Mr. Manafort, who has denied any wrongdoing.

The two New York prosecutors, both Democrats, have issued subpoenas and sought financial records about Mr. Manafort's real estate and business activities in New York, according to three people briefed on the investigations who were not authorized to discuss law enforcement matters that were continuing. Possible violations being pursued by Mr. Vance could carry prison sentences of up to four years for Mr. Manafort, who has denied any wrongdoing.

Neither of the prosecutors has determined whether any state charges are warranted, and if they did, those cases would most likely advance only in the event of a presidential pardon.

Asked about the possibility of a pardon for Mr. Manafort from Mr. Trump, the White House press secretary, Sarah Huckabee Sanders, said: "I haven't had any conversations with him about that. I think we should let the process play through before we start looking at those steps."

The New York investigations focus in part on Mr. Manafort's relationship with the Federal Savings Bank of Chicago, a small lender that provided him some big loans. The bank, which received a subpoena but is not itself under investigation, is led by Stephen M. Calk, a onetime economic adviser to Mr. Trump.

Mr. Vance's office is questioning whether Mr. Manafort misled the bank when applying for the loans, the people briefed on the investigation said, a previously unreported development that hews closely to the federal indictment announced on Monday. In examining the loan documents, Mr. Vance's office is seeking to determine whether Mr. Manafort used the loan money for an unauthorized purpose, which could amount to filing a false business record, a crime in New York State.

The New York prosecutors are also seeking to trace cash that Mr. Manafort moved in and out of American bank accounts, partly to verify whether he paid state taxes on income earned overseas, the people said. Investigators working for the New York prosecutors have obtained documents suggesting that at least some of the money came from a bank in Cyprus, the Mediterranean nation considered a tax haven and a magnet for Russian money.

This is another area of inquiry that overlaps with Mr. Mueller's case, a 12-count indictment that accused Mr. Manafort and a business partner of conspiracy to launder money from accounts in Cyprus and elsewhere.

The overlap will most likely mean that Mr. Mueller's case will take priority over Mr. Vance's and Mr. Schneiderman's.

And while Mr. Vance's office is continuing to investigate Mr. Manafort, Mr. Schneiderman has deferred his inquiry into the former Trump campaign chairman, at least temporarily, so as to not interfere with the federal case, according to one of the people briefed on the matter. Mr. Schneiderman would most likely resume his investigation if Mr. Manafort received a presidential pardon, the person said.

This year, The Wall Street Journal and Reuters reported the existence of Mr. Vance's investigation and his subpoena of the Chicago bank, while The New York Times and others have reported Mr. Manafort's extensive financial ties to Cyprus and Mr. Calk's relationship with the Trump campaign.

The status of Mr. Schneiderman's investigation, and the focus of Mr. Vance's, were not previously known. A spokeswoman for Mr. Vance declined to comment, as did a spokesman for Mr. Schneiderman.

Mr. Schneiderman has clashed with Mr. Trump or his associates on a number of occasions. He sued the Trump administration to preserve an Obama-era program that shields young undocumented immigrants from deportation, and he sued Trump University, contending that it used high-pressure sales tactics and false claims to woo students. Mr. Trump settled the case after winning the election.