Defense blames Rick Gates, as prosecutor details Manafort's $15,000 ostrich jacket

Key Points
  • Opening arguments begin in the trial of former Trump campaign chief Paul Manafort, the longtime Republican lobbyist.
  • Manafort is charged with bank fraud and tax crimes in a case lodged by special counsel Robert Mueller, who is also investigating possible collusion with Russians by members of the presidential campaign of Donald Trump.
  • A jury of six women and six men will hear evidence from Mueller's team about tens of millions of dollars that Manafort allegedly made, and stashed in offshore accounts, while working for a pro-Russia political party in Ukraine.
President Trump's former campaign manager Paul Manafort departs U.S. District Court after a motions hearing in Alexandria, Virginia, May 4, 2018.
Jonathan Ernst | Reuters

The trial of Paul Manafort, President Donald Trump's former campaign boss, began Tuesday, with the defense attempting to shift the blame to Rick Gates — one of the longtime Republican strategist's former top associates and a key witness for the prosecution.

Yet the prosecution asserted during opening arguments that Manafort "believed the law did not apply to him — not tax law, not banking law" — as he blew massive amounts of cash on real estate and pricey clothes that included a $15,000 jacket "made from an ostrich."

"He got whatever he wanted," assistant U.S. Attorney Uzo Asonye said in U.S. District Court in Alexandria, Virginia.

The prosecutor described how Manafort had allegedly earned a whopping $60 million by working for pro-Russia politicians in Ukraine and then stashed that cash in shell companies and offshore bank accounts.

Asonye said Manafort lived an "extravagant lifestyle," funded by the "secret income" he was generating.

When that cash flow dried up as Manafort's consulting clients lost power in Ukraine, he began duping banks about the state of his financial position in an effort to win approval for loans, the prosecutor argued.

"He created cash out of thin air," Asonye said.

He said Manafort opened more than 30 bank accounts in three countries to hide his cash. Manafort, he added, failed to report $15 million in income to the IRS from 2010 to 2014.

The defense states its case

After Asonye spoke, Manafort's lawyer, Thomas Zehnle, had Manafort stand and face jurors in the midst of an opening statement that sought to shift blame for misconduct onto the shoulders of Manafort's longtime business associate Gates.

"Here's here because of one man: Rick Gates," Zehnle said.

Gates has pleaded guilty in the case, and he is expected to testify for prosecutors.

Manafort "was placing his trust in the wrong person," Zehnle said, referring to Gates, whom he accused of "embezzling millions" from Manafort's firm and failing to report it on his own tax returns.

"Money's coming in fast. It's a lot, and Paul Manafort trusted that Rick Gates was keeping track of it. ...That's what Rick Gates was being paid to do."

Manafort trusted others to make sure "that these things were done right," the defense lawyer said. "The foundation of the special counsel's case against Manafort rests squarely on the shoulders of this star witness."

The lawyer also said that Manafort agreed to receive payments from Ukraine's Party of Regions into offshore bank accounts because the leaders of that party insisted on that system and created the accounts because they did not want it known which candidates they were backing.

Manafort "did not willfully or intentionally deceive" the IRS or other financial institutions, Zehnle said.

He accused prosecutors of jumping the gun by prosecuting Manafort instead of conducting an audit of his financial records.

"U.S. citizens aren't prosecuted for mistakes on their tax returns," Zehnle said. "They're audited."

The lawyer called Manafort a "talented political consultant and a good man" who was the first person in his family to attend college and who during his professional career had "rendered invaluable services to the U.S. system of government."

Judge urges lawyers to stick to the evidence

As with the prosecution's opening statement, Judge T.S. Ellis III interrupted Zehnle's argument, telling him to stick to subjects that would be covered by evidence expected to be introduced at trial.

After the statements, prosecutors called their first witness: Tad Devine, a Democratic political consultant who worked with Manafort in Ukraine to get Viktor Yanukovych elected president in 2010. Devine was chief strategist for Sen. Bernie Sanders' campaign for the Democratic nomination for president in 2016.

Prosecutors presented Devine, 63, with a raft of exhibits detailing his interactions over multiple years with Manafort and his consulting company, Davis Manafort International.

Devine said he had a "friendly relationship" with Manafort and told defense lawyer Richard Westling during cross-examination, "I think Paul worked harder than anybody."

Earlier Tuesday, 12 jurors and four alternates were picked for the case, the first brought by special counsel Robert Mueller to go to trial.

Manafort, 69, faces another separate trial in federal court in Washington, D.C., in September. That case is also related to his consulting work in Ukraine.

He had his $10 million release bond revoked last month after prosecutors said he had tried to tamper with potential witnesses against him. Earlier Tuesday, a federal appeals court rejected his effort to be released from jail.

Dan Mangan reported from Englewood Cliffs, N.J., and Kevin Breuninger reported from Alexandria, Va.