Gates Describes Manafort Orders While Defense Hammers Aide on 'Secret Life'

This courtroom sketch depicts Rick Gates on the witness stand as he is cross examined by defense lawyer Kevin Downing during the trial of former Donald Trump campaign chairman Paul Manafort on bank fraud and tax evasion at federal court in Alexandria, Va., on Aug. 7, 2018. (Dana Verkouteren via AP)

ALEXANDRIA, Va. — On his second day on the stand in the trial of his former business partner, political consultant and former Trump campaign aide Rick Gates testified that former Trump campaign manager Paul Manafort pressed for a secretary of the Army appointment for one of the lenders who had given him money despite falsified income information on the documents.

Gates also admitted in the Eastern District of Virginia courtroom to an extramarital affair 10 years ago and keeping an apartment in London, saying he falsified hundreds of thousands of dollars in expense reports because “I was living beyond my means.”

After saying Monday that he committed crimes with Manafort, including concealing offshore accounts to avoid reporting them to the U.S. government at tax time and claiming false income to get loans, Manafort defense attorney Kevin Downing asked the witness, “This jury is just supposed to believe you after all the lies that you’ve told and the fraud you’ve committed?”

“Yes, because I’m here to tell the truth and take responsibility for my actions,” Gates replied. “Mr. Manafort had the same path. I’m trying to change.”

Gates struck a deal with special counsel Robert Mueller in February, pleading guilty to one count of conspiracy against the United States and one count of making false statements to the FBI.

Manafort was on Trump’s campaign team from March to August 2016, starting as a delegate-wrangler and serving as campaign chairman in the last three months. Gates came on board the Trump campaign with Manafort and stayed for the duration of the campaign, later serving as deputy chairman for Trump’s inaugural committee and then starting a pro-Trump PAC.

Manafort’s former bookkeeper Heather Washkuhn testified last week that Manafort falsely reported to Federal Savings Bank that his company DMP International pulled in $3 million the first nine months of 2016 when it actually lost more than $1 million from January through November. She also said Manafort told Banc of California that his company made nearly $4.5 million when the actual amount was $400,000.

Dennis Raico and James Brennan, who worked for Federal Savings Bank, are two of the five witnesses who have been granted immunity. Manafort received a loan from the bank despite the false information. Stephen Calk, founder and CEO of the mortgage lender, was a campaign economic adviser to Donald Trump.

Gates, who said Manafort directed him to move money between his Cyprus shell companies, testified today that Manafort ordered that income be altered on those profit and loss statements to lenders. After Manafort left the Trump campaign and Gates remained, he said Manafort continued to contact him about related matters, including seeking favors for Calk including tickets to the inauguration and a plum administration post. On Nov. 24, 2016, Manafort emailed Gates: “We need to discuss Stephen Calk for Sec of Army. I hear the list is being considered this weekend.”

President Trump ended up putting forth three nominations for the Army job, with the first two withdrawing amid controversy and the third, Raytheon executive Mark Esper, being confirmed in November 2017.

Downing focused on the embezzlement and Gates’ affair, referring to it as Gates’ “secret life” and hammering Gates for not using the word embezzlement when at one point Gates called his money swiping “an unauthorized transaction.” While Gates testified that Manafort “always had control” over the overseas accounts, the defense strategy is to try to pin responsibility for the fraudulent and evasive activities on Gates.

Gates testified that after a banking collapse in Cyprus beginning in 2012, Manafort created a company in the UK to help hide money transfers into St. Vincent and the Grenadines. He also opened an HSBC account in New York, Gates said, as Manafort wanted to “see if there was a better way to get money to the U.S.”

When Gates said Manafort was “very good at knowing where the money was and where it was spent,” Judge T.S. Ellis III interjected, “Except the money that you stole from him… he didn’t do it that closely.”

Manafort’s attorney said he expected to grill Gates again on Wednesday morning.

In this trial, Manafort faces 18 charges for financial crimes that carry a maximum penalty of 305 years behind bars. Next month in the D.C. Circuit, he faces charges of operating as an unregistered foreign agent and lying to investigators.