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In opening remarks, Paul Manafort’s lawyers blame associates

A courtroom sketch depicted Paul Manafort (second from right) and his lawyers on Tuesday during the opening day of Manafort’s fraud trial.
A courtroom sketch depicted Paul Manafort (second from right) and his lawyers on Tuesday during the opening day of Manafort’s fraud trial.(Dana Verkouteren via AP)

ALEXANDRIA, Va. — Paul Manafort’s trial on financial fraud charges opened Tuesday with an effort by his defense team to deflect blame to the government’s star witness in the case, Rick Gates, Manafort’s longtime political consulting partner.

The defense strategy pits the credibility of Manafort, a former campaign chairman for President Trump, against that of Gates, who has pleaded guilty to charges in the same case and is cooperating in the inquiry led by the special counsel, Robert Mueller.

And it sets up a dramatic courtroom showdown between Gates, who is scheduled to take the stand for the prosecution, and Manafort, who worked closely with him in aiding pro-Russia politicians in Ukraine for a decade and also in 2016 on Trump’s campaign.

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The trial, over charges that Manafort hid tens of millions of dollars he received for his work in Ukraine and then engaged in bank fraud when those funds dried up, got underway at a rapid clip.

A jury of six men and six women was seated hours after the proceedings began in US District Court here.

The prosecutors and the defense team made their opening statements laying out the contours of the case they intend to make to the jury.

In his opening statement, Thomas Zehnle, one of Manafort’s five defense lawyers, said Gates embezzled millions from Manafort and then, fearing prison time for his own misdeeds, turned on him under pressure from Mueller.

“Rick Gates is their foundation,” Zehnle said.

Even though Gates has pleaded guilty to lying to federal authorities and conspiracy to engage in financial fraud, Zehnle said, “the government is going to ask you to trust him.”

The trial is the first stemming from charges brought by Mueller in his investigation of Russia’s interference in the 2016 presidential election.

Although the charges against Manafort involve neither Trump nor allegations of collusion with Russia, the trial is the first courtroom test of Mueller’s work and the likelihood of it being focused on two former senior Trump advisers savaging each other’s honesty in coming weeks will only draw more attention to it.

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Gates is one of about 35 prosecution witnesses scheduled to testify about what the government calls a shrewdly crafted multiyear scheme by Manafort to evade taxes on $15 million in income he earned while working to promote the political fortunes of Viktor F. Yanukovych, a former leader of Ukraine.

Uzo Asonye, an assistant US attorney on the prosecution’s team, told the jury that Yanukovych was Manafort’s “golden goose” and that Ukrainian oligarchs who ran entire industries in Ukraine paid Manafort $60 million over a decade to bolster Yanukovych’s fortunes.

Manafort hid most of his income, and roped bookkeepers, tax accountants, and bank officials into his scheme “in order to get and keep money,” Asonye said. “He even lied about where he was living.”

Although it was only the first day of what is expected to be a three-week trial, it seemed clear that the central argument would be whether Manafort directed the various fraudulent financial schemes, or was duped or directed by others, including Gates.

Zehnle said Manafort was too busy as a highly paid political consultant working overseas to keep track of his finances, and relied on a staff of professionals, including Gates.

“Mr. Gates was the point man,” he said.

If Manafort’s payments for his Ukraine work were made in an unorthodox fashion through accounts in Cyprus, he said, it was because his financial patrons insisted that is how he should be paid, not because Manafort was trying to hide his income.

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“That is the way the client wanted it to be done,” he told the jurors. “His Ukrainian patrons set up the accounts, not Paul Manafort.” But the prosecutors said Manafort deliberately hid the money he made so he could indulge his taste for luxury, paying millions in cash for homes in the United States, driving a Mercedes-Benz convertible and splurging on purchases like a $21,000 watch and a $15,000 jacket made of ostrich feathers.

“He got whatever he wanted,” Asonye said. “His homes, his renovations, his jewelry, his clothing.”

When his Ukrainian patrons quit paying, he said, Manafort filed false documents with banks to keep up his cash flow. “All of this was willful,” he said.

Manafort, in a black suit with a silver tie, took an active part in his defense. He consulted with his lawyers during the selection of the jurors, putting on his glasses to pore over his notes.

His defense team was clearly wary of how the jurors would respond to tales of their client’s extravagant spending, and argued that he had earned his wealth through his talents as a political consultant.

“Paul Manafort travels in circles that most people would never know,” his lawyer, Zehnle, said. “He lived a lifestyle that most people can only dream of.”

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Thomas A. Devine, a Democratic political consultant who was hired by Manafort to develop media strategy for Yanukovych, was the only witness to testify.

Called by the prosecution, he said that Manafort ran an “incredible” operation to resurrect Yanukovych’s political career.

Written off as a political loser in 2005, Yanukovych was elected president of Ukraine in 2010, then ousted in 2014 amid a political uprising.

Manafort’s lawyers tried to scrutinize Devine’s politics — possibly seeking to show that he was biased against Republicans like Manafort. Prosecutors objected, arguing that the judge had ordered that political references be left out of the trial.

Manafort, 69, is the only American charged by Mueller’s team so far to force the prosecutors to present their evidence at trial.

The other four Americans who have been indicted all pleaded guilty, including Michael T. Flynn, a campaign adviser who became Trump’s national security adviser, and George Papadopoulos, an unpaid campaign adviser who was targeted by emissaries who have been linked to Russian intelligence.

Trump has repeatedly suggested that he was surprised at how harshly Manafort had been treated. In an interview with Fox News two weeks ago, he said the indictments against his former aides, including Manafort, were a “very sad thing for our country.”

He described Manafort, who helped the campaign marshal delegates for two months before moving up to campaign chairman in the spring of 2016, as “a nice man,” adding: “You look at what’s going on with him, it’s like Al Capone.”

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