The questioning of Paul Manafort鈥檚 protege was confrontational and personal: Manafort鈥檚 lawyer hammered Rick Gates about his own crimes, an extramarital affair and a guilty plea with prosecutors that may spare him severe punishment.
Gates, who faced a bruising cross-examination, returns to the witness stand Wednesday for additional questioning from a Manafort lawyer who accused the government鈥檚 star witness of being immersed in 鈥渟o many lies鈥� that he can鈥檛 even remember them all and who demanded to know how a jury could possibly trust him.
Lawyers for Manafort, the former Trump campaign chairman, are determined to impugn the credibility of Gates. Defence attorney Kevin Downing began his cross-examination of Gates, Manafort鈥檚 longtime deputy and fellow Trump campaign aide, by confronting him on his own lies to special counsel Robert Mueller鈥檚 investigators, getting him to admit to an affair and pressing him about hundreds of thousands of dollars he admitted to embezzling from his former boss.
The aggressive questioning was aimed at shifting blame from Manafort onto Gates, who pleaded guilty in Mueller鈥檚 investigation and agreed to co-operate with investigators by testifying in the financial fraud trial.
鈥淎fter all the lies you鈥檝e told and the fraud you鈥檝e committed, you expect this jury to believe you?鈥� Downing asked incredulously.
Gates said he did, but the defence lawyer wasn鈥檛 satisfied. He scoffed at the idea that Gates had repented for his actions, noting that prosecutors have said they won鈥檛 oppose his bid for probation and getting him to acknowledge he had not repaid the money he had taken from Manafort.
After Gates described his theft as 鈥渦nauthorized transactions鈥� instead of embezzlement, Downing prodded him to use the latter term 鈥� and Gates ultimately relented, saying, 鈥淚t was embezzlement from Mr. Manafort.鈥�
Prosecutors had braced for the tough questioning by getting Gates to come clean about his own crimes. He told jurors how he disguised millions of dollars in foreign income as loans in order to lower Manafort鈥檚 tax bill. Gates recounted how he and Manafort used more than a dozen offshore shell companies and bank accounts in Cyprus to funnel the money, all while concealing the accounts and the income from the IRS.
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But the grilling got more intense, and personal, Tuesday afternoon when Downing pressed Gates about a 鈥渟ecret life鈥� he said was funded by embezzlement, including an extramarital affair that Gates himself acknowledged. Gates also said he may have submitted personal expenses for reimbursement by Trump鈥檚 inaugural committee, which he helped operate.
After Gates struggled to recall precisely what he had told Mueller鈥檚 team, Downing asked if he had been confronted with 鈥渟o many lies鈥� that he can鈥檛 keep his story straight.
Gates implicated himself in broad criminal conduct on the stand, an apparent strategic decision by prosecutors to take some of the steam out of defence questioning. He told jurors he embezzled from Manafort by filing false expense reports. He also said he committed credit card and mortgage fraud, falsified a letter for a colleague involved in an investment deal and made false statements in a deposition at Manafort鈥檚 direction.
Prosecutors summoned Gates to give jurors the first-hand account of a co-conspirator they say helped Manafort carry out an elaborate offshore tax-evasion and bank fraud scheme. Gates testified that he and Manafort knew they were committing crimes for years, saying they had stashed money in foreign bank accounts and falsified bank loan documents.
鈥淚n Cyprus, they were documented as loans. In reality, it was basically money moving between accounts,鈥� Gates said.
Manafort and Gates were the first two people indicted in Mueller鈥檚 investigation into potential ties between Russia and the Trump campaign. Gates pleaded guilty months later and agreed to co-operate in Mueller鈥檚 investigation of Manafort, the only American charged by the special counsel to opt for trial instead of a guilty plea.
The case has little to do with either man鈥檚 work for the Trump campaign and there鈥檚 been no discussion during the trial about whether the Trump election effort co-ordinated with Russia 鈥� the central question Mueller鈥檚 team has tried to answer. But Trump has shown interest in the proceedings, tweeting support for Manafort.
On Tuesday, Gates did connect one part of the bank fraud charges against Manafort to his role in the Trump campaign.
He said Manafort asked for tickets to Trump鈥檚 inauguration so he could give them to a banker involved in approving a loan at the centre of his financial fraud trial. Gates also said Manafort floated banker Stephen Calk鈥檚 name for consideration as Secretary of the Army, a post he ultimately did not get. The email exchange occurred after Manafort left the Trump campaign but while Gates was active on the Trump inauguration committee.
Gates described to jurors how he repeatedly submitted fake financial documents at Manafort鈥檚 behest as his former boss became concerned he was paying too much in taxes and, later, that his funds were drying up.
鈥淲TF,鈥� Manafort wrote to Gates in one email shown to the jury. 鈥淗ow could I be blindsided like this. You told me you were on top of this. We need to discuss options. This is a disaster.鈥�
In other testimony, Gates recounted how he converted a PDF of a profit-and-loss statement to a Microsoft Word document so he could doctor it to inflate the business鈥� income. Gates also fabricated a forgiveness letter for what he said was already a fake loan between Manafort鈥檚 consulting company and a Cypriot entity he controlled.
During the testimony, Manafort did not stare Gates down as he did Monday. When the trial broke for lunch, Manafort looked back at his wife, sitting in the front row, smiled and winked at her, followed by a quick shake of his head, seeming to indicate he was unfazed by the morning鈥檚 testimony.
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Associated Press writer Stephen Braun contributed to this report.
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Eric Tucker, Matthew Barakat And Chad Day, The Associated Press
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