Secret Ledger in Ukraine Lists Cash for Donald Trump’s Campaign Chief

Reply Mon 15 Aug, 2016 04:16 am
Secret Ledger in Ukraine Lists Cash for Donald Trump’s Campaign Chief



Paul Manafort, Donald J. Trump’s campaign chairman, ran a political consulting operation out of a first-floor office on Sofiivska Street in Kiev, Ukraine. Credit Joseph Sywenkyj for The New York Times

KIEV, Ukraine — On a leafy side street off Independence Square in Kiev is an office used for years by Donald J. Trump’s campaign chairman, Paul Manafort, when he consulted for Ukraine’s ruling political party. His furniture and personal items were still there as recently as May.

And Mr. Manafort’s presence remains elsewhere here in the capital, where government investigators examining secret records have found his name, as well as companies he sought business with, as they try to untangle a corrupt network they say was used to loot Ukrainian assets and influence elections during the administration of Mr. Manafort’s main client, former President Viktor F. Yanukovych.

Handwritten ledgers show $12.7 million in undisclosed cash payments designated for Mr. Manafort from Mr. Yanukovych’s pro-Russian political party from 2007 to 2012, according to Ukraine’s newly formed National Anti-Corruption Bureau. Investigators assert that the disbursements were part of an illegal off-the-books system whose recipients also included election officials.

In addition, criminal prosecutors are investigating a group of offshore shell companies that helped members of Mr. Yanukovych’s inner circle finance their lavish lifestyles, including a palatial presidential residence with a private zoo, golf course and tennis court. Among the hundreds of murky transactions these companies engaged in was an $18 million deal to sell Ukrainian cable television assets to a partnership put together by Mr. Manafort and a Russian oligarch, Oleg Deripaska, a close ally of President Vladimir V. Putin.

Hand-written ledgers show $12.7 million in cash payments designated for Mr. Manafort from the pro-Russian political party of Viktor F. Yanukovych. Mr. Manafort did not receive “any such cash payments,” his lawyer said. Credit Eric Thayer for The New York Times

Mr. Manafort’s involvement with moneyed interests in Russia and Ukraine had previously come to light. But as American relationships there become a rising issue in the presidential campaign — from Mr. Trump’s favorable statements about Mr. Putin and his annexation of Crimea to the suspected Russian hacking of Democrats’ emails — an examination of Mr. Manafort’s activities offers new details of how he mixed politics and business out of public view and benefited from powerful interests now under scrutiny by the new government in Kiev.

Anti-corruption officials there say the payments earmarked for Mr. Manafort, previously unreported, are a focus of their investigation, though they have yet to determine if he actually received the cash. While Mr. Manafort is not a target in the separate inquiry of offshore activities, prosecutors say he must have realized the implications of his financial dealings.

“He understood what was happening in Ukraine,” said Vitaliy Kasko, a former senior official with the general prosecutor’s office in Kiev. “It would have to be clear to any reasonable person that the Yanukovych clan, when it came to power, was engaged in corruption.”

Mr. Kasko added, “It’s impossible to imagine a person would look at this and think, ‘Everything is all right.’”

Mr. Manafort did not respond to interview requests or written questions from The New York Times. But his lawyer, Richard A. Hibey, said Mr. Manafort had not received “any such cash payments” described by the anti-corruption officials.

Mr. Hibey also disputed Mr. Kasko’s suggestion that Mr. Manafort might have countenanced corruption or been involved with people who took part in illegal activities.

“These are suspicions, and probably heavily politically tinged ones,” said Mr. Hibey, a member of the Washington law firm Miller & Chevalier. “It is difficult to respect any kind of allegation of the sort being made here to smear someone when there is no proof and we deny there ever could be such proof.”

Mysterious Payments

The developments in Ukraine underscore the risky nature of the international consulting that has been a staple of Mr. Manafort’s business since the 1980s, when he went to work for the Philippine dictator Ferdinand Marcos. Before joining Mr. Trump’s campaign this spring, Mr. Manafort’s most prominent recent client was Mr. Yanukovych, who — like Mr. Marcos — was deposed in a popular uprising.

Before he fled to Russia two years ago, Mr. Yanukovych and his Party of Regions relied heavily on the advice of Mr. Manafort and his firm, who helped them win several elections. During that period, Mr. Manafort never registered as a foreign agent with the United States Justice Department — as required of those seeking to influence American policy on behalf of foreign clients — although one of his subcontractors did.

It is unclear if Mr. Manafort’s activities necessitated registering. If they were limited to advising the Party of Regions in Ukraine, he probably would not have had to. But he also worked to burnish his client’s image in the West and helped Mr. Yanukovych’s administration draft a report defending its prosecution of his chief rival, Yulia V. Tymoshenko, in 2012.

Whatever the case, absent a registration — which requires disclosure of how much the registrant is being paid and by whom — Mr. Manafort’s compensation has remained a mystery. However, a cache of documents discovered after the fall of Mr. Yanukovych’s government may provide some answers.

The papers, known in Ukraine as the “black ledger,” are a chicken-scratch of Cyrillic covering about 400 pages taken from books once kept in a third-floor room in the former Party of Regions headquarters on Lipskaya Street in Kiev. The room held two safes stuffed with $100 bills, said Taras V. Chornovil, a former party leader who was also a recipient of the money at times. He said in an interview that he had once received $10,000 in a “wad of cash” for a trip to Europe.

“This was our cash,” he said, adding that he had left the party in part over concerns about off-the-books activity. “They had it on the table, stacks of money, and they had lists of who to pay.”

The National Anti-Corruption Bureau, which obtained the ledger, said in a statement that Mr. Manafort’s name appeared 22 times in the documents over five years, with payments totaling $12.7 million. The purpose of the payments is not clear. Nor is the outcome, since the handwritten entries cannot be cross-referenced against banking records, and the signatures for receipt have not yet been verified.

“Paul Manafort is among those names on the list of so-called ‘black accounts of the Party of Regions,’ which the detectives of the National Anti-Corruption Bureau of Ukraine are investigating,” the statement said. “We emphasize that the presence of P. Manafort’s name in the list does not mean that he actually got the money, because the signatures that appear in the column of recipients could belong to other people.”

Anti-corruption groups in Ukraine said the black ledger detailing payments was probably seized when protesters ransacked the Party of Regions headquarters in February 2014. Credit Oleg Petrasyuk/European Pressphoto Agency

The accounting records surfaced this year, when Serhiy A. Leshchenko, a member of Parliament who said he had received a partial copy from a source he did not identify, published line items covering six months of outlays in 2012 totaling $66 million. In an interview, Mr. Leshchenko said another source had provided the entire multiyear ledger to Viktor M. Trepak, a former deputy director of the domestic intelligence agency of Ukraine, the S.B.U., who passed it to the National Anti-Corruption Bureau.

The bureau, whose government funding is mandated under American and European Union aid programs and which has an evidence-sharing agreement with the F.B.I., has investigatory powers but cannot indict suspects. Only if it passes its findings to prosecutors — which has not happened with Mr. Manafort — does a subject of its inquiry become part of a criminal case.

Individual disbursements reflected in the ledgers ranged from a few hundred dollars to millions of dollars. Of the records released from 2012, one shows a payment of $67,000 for a watch and another of $8.4 million to the owner of an advertising agency for campaign work for the party before elections that year.

“It’s a very vivid example of how political parties are financed in Ukraine,” said Daria N. Kaleniuk, the executive director of the Anti-Corruption Action Center in Kiev. “It represents the very dirty cash economy in Ukraine.”
Offshore Companies

While working in Ukraine, Mr. Manafort had also positioned himself to profit from business deals that benefited from connections he had gained through his political consulting. One of them, according to court filings, involved a network of offshore companies that government investigators and independent journalists in Ukraine have said was used to launder public money and assets purportedly stolen by cronies of the government.

The network comprised shell companies whose ultimate owners were shielded by the secrecy laws of the offshore jurisdictions where they were registered, including the British Virgin Islands, Belize and the Seychelles.

In a recent interview, Serhiy V. Gorbatyuk, Ukraine’s special prosecutor for high-level corruption cases, pointed to an open file on his desk containing paperwork for one of the shell companies, Milltown Corporate Services Ltd., which played a central role in the state’s purchase of two oil derricks for $785 million, or about double what they were said to be worth.

“This,” he said, “was an offshore used often by Mr. Yanukovych’s entourage.”

The role of the offshore companies in business dealings involving Mr. Manafort came to light because of court filings in the Cayman Islands and in a federal court in Virginia related to an investment fund, Pericles Emerging Markets. Mr. Manafort and several partners started the fund in 2007, and its major backer was Mr. Deripaska, the Russian mogul, to whom the State Department has refused to issue a visa, apparently because of allegations linking him to Russian organized crime, a charge he has denied.

Mr. Deripaska agreed to commit as much as $100 million to Pericles so it could buy assets in Ukraine and Eastern Europe, including a regional cable television and communications company called Black Sea Cable. But corporate records and court filings show that it was hardly a straightforward transaction.

The Black Sea Cable assets were controlled by a rotating cast of offshore companies that led back to the Yanukovych network, including, at various times, Milltown Corporate Services and two other companies well known to law enforcement officials, Monohold A.G. and Intrahold A.G. Those two companies won inflated contracts with a state-run agricultural company, and also acquired a business center in Kiev with a helicopter pad on the roof that would ease Mr. Yanukovych’s commute from his country estate to the presidential offices.

A Disputed Investment

Mr. Deripaska would later say he invested $18.9 million in Pericles in 2008 to complete the acquisition of Black Sea Cable. But the planned purchase — including the question of who ended up with the Black Sea assets — has since become the subject of a dispute between Mr. Deripaska and Mr. Manafort.

In 2014, Mr. Deripaska filed a legal action in a Cayman Islands court seeking to recover his investment in Pericles, which is now defunct. He also said he had paid about $7.3 million in management fees to the fund over two years. Mr. Deripaska did not respond to requests for comment.

Mr. Manafort’s lawyer, Mr. Hibey, disputed the account of the Black Sea Cable deal contained in Mr. Deripaska’s Cayman filings, and said the Russian oligarch had overseen details of the final transaction involving the acquisition. He denied that Mr. Manafort had received management fees from Pericles during its operation, but said that one of Mr. Manafort’s partners, Rick Gates, who is also working on the Trump campaign, had received a “nominal” sum.

Court papers indicate that Pericles’ only deal involved Black Sea Cable.

Mr. Manafort continued working in Ukraine after the demise of Mr. Yanukovych’s government, helping allies of the ousted president and others form a political bloc that opposed the new pro-Western administration. Some of his aides were in Ukraine as recently as this year, and Ukrainian company records give no indication that Mr. Manafort has formally dissolved the local branch of his company, Davis Manafort International, directed by a longtime assistant, Konstantin V. Kilimnik.

At Mr. Manafort’s old office on Sofiivska Street, new tenants said they had discovered several curiosities apparently left behind, including a knee X-ray signed by Mr. Yanukovych, possibly referring to tennis matches played between Mr. Manafort and Mr. Yanukovych, who had spoken publicly of a knee ailment affecting his game.

There was another item with Mr. Yanukovych’s autograph: a piece of white paper bearing a rough sketch of Independence Square, the site of the 2014 uprising that drove him from power.

Andrew E. Kramer reported from Kiev, and Mike McIntire and Barry Meier from New York. Steven Lee Myers contributed reporting from Washington.
Reply Mon 15 Aug, 2016 06:55 am
I just saw this myself on my morning feed, it is really troublesome. This whole Russian involvement angle might explain Trump's motivation in running for president and Trump's talk of getting rid of NATO might just be the tip of the iceberg.
bobsal u1553115
Reply Mon 15 Aug, 2016 09:23 am
There hasn't been anything like this since the Park fund raising scams for Ronnie Reagan.
Reply Mon 15 Aug, 2016 09:36 am
@bobsal u1553115,
I feel kind of ignorant, but I don't know anything about the Park fund raising scams for Ronald Reagan. I tried to look it up, but anyway...

I am wondering if those connected to Putin/Russia are using Trump or if there is some kind of deal going on to open business between Russia and the US with all the principle players?
bobsal u1553115
Reply Mon 15 Aug, 2016 09:46 am
Try this one:


He took money from donors promising face time with Ronnie.
bobsal u1553115
Reply Mon 15 Aug, 2016 09:48 am
Why Putin is playing in this election is a "... riddle, wrapped in a mystery, inside an enigma", like someone else once said of the USSR.
Reply Mon 15 Aug, 2016 09:55 am
@bobsal u1553115,
Thank you, gosh, I don't think such open corruption would be tolerated in today's instant information age.
Reply Mon 15 Aug, 2016 10:58 am
@bobsal u1553115,
There's no mystery here. In WWII, Russia pushed the Nazis back to Berlin, conquering Eastern Europe on the way. When the war ended, Russia kept Eastern Germany and the rest of Eastern Europe as vassal states whose governments were answerable to Moscow. They used Russia's Communist system, which is to say they were poor economies run by totalitarians. The only thing preventing Russia from visiting this horror onto Western Europe was NATO, which was essentially the Western Allies of WWII restructured. Not too long later, West Germany itself became an equal part of NATO as well. With the US as well as the rebuilt militaries of Western Europe, Russia was unable to do to Western Europe what it did to Eastern Europe. There things stood for nearly half a century until Russia collapsed economically in 1991 and the vassal states were able to establish themselves as truly independent nations. Shortly thereafter, most of those nations joined NATO to prevent Russia from coming back and taking over again.

Needless to say, this irks Russia who plans to do just that to Eastern Europe, make their countries subservient to them. That's not going to happen with NATO in there, obviously, so it looks like Putin did what he is so good at-behind the scenes politicking-and thus the Trump candidacy is born. I'm not saying that Trump started his candidacy at Putin's suggestion, but it is now clear that at this point his candidacy would be the greatest piece of Russian espionage ever-an American president in Putin's pocket, one who is on record to deliver what Putin so fervently desires-the dismantling of NATO and a clear path for Russian domination back into Eastern Europe. Check out this video, especially from the 45 second mark: the video is only 1 minute 17 seconds long anyway). Trump just lays out his plan to abandon NATO:

Reply Mon 15 Aug, 2016 12:51 pm
He makes it sound like we have no stake in keeping NATO active or even any interest in the rest of our allies, like it makes little difference if those countries go under the thumb of Russia and we would profit much more if we joined up with Russia and just throw western Europe under the bus so to speak. Does he not see Putin/Russia would like nothing better than to conquer the US without the having to lift a finger to do so?
Reply Mon 15 Aug, 2016 12:59 pm
Trump's whole schtick is portraying himself as the tough guy who isn't afraid to run over people to get things done. So he puts this capitulation to Russia in terms of our standing up to our allies who are not doing their share of the NATO agreement to divert attention to the fact that he's handing Putin victory in the Cold War on a silver platter. The Cold War that America won over the course of many decades becomes, in one fell swoop, Putin's victory. Trump figures that as long as he phrases it right, he can get away with it.

Now we find out his campaign manager is in with Putin's people, if not Putin himself. Holy cow.
0 Replies
Reply Mon 15 Aug, 2016 02:28 pm
Its OK as long as its a conservative crook. But let it be something about Bill or Hillary and you dont have to prove anything, just publishing it on any conservative blog being proof enough.
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bobsal u1553115
Reply Tue 16 Aug, 2016 05:35 am
That article was early in the scandal, it got worse as they started pulling worms from the can.
0 Replies
bobsal u1553115
Reply Tue 16 Aug, 2016 05:39 am
Russia thought they were cutting away nations that would fail without the continued bleeding of USSR economy. Now those countries are doing well on their own, Putin would like to have them back.
Reply Tue 16 Aug, 2016 07:01 am
@bobsal u1553115,
You are so right. Take a look at the Gross Domestic Product per capita at Poland from when it broke free in 1991 to now-it increased from $5,000 per person to over $14,000 per person-nearly triple:

Now take a look at the Czech Republic in 1991 and now, they've increased, from $12,000 per person to over $20,000 per person.

Incidentally, the life expectancy of these Eastern European countries has gone up dramatically as well. People seem to have something to live for now, so they live longer.

Dramatic increases in GDP per capita once these and the other Eastern European countries could get away from the grip of the Russian bear. And Trump doesn't care a bit if the US withdraws from NATO and Russia comes in and forces them back.
bobsal u1553115
Reply Tue 16 Aug, 2016 07:09 am
Basically Putin wants to follow the lead of Mitt Romney and Bain Capital - take back in, strip them of their wealth and spin them back out.
0 Replies
Reply Tue 16 Aug, 2016 10:00 am
Here is a pretty interesting piece from PBS on an interview talking about Manafort's ties in Ukraine.

JOHN YANG: The papers were discovered by Ukraine’s newly formed National Anti-Corruption Bureau.

In some 400 pages of handwritten notes, Paul Manafort’s name appears 22 times over the course of five years, totaling $12.7 million.

The New York Times’ Moscow correspondent, Andrew Kramer, is one of the reporters who wrote the story, and he joins us now from Moscow.

Andrew, thanks for being with us.

Andrew, first of all, tell us exactly what it was that they found. What were these ledgers? Where was the money coming from? What were the payments for?

ANDREW KRAMER, The New York Times: Those are all very good questions.

Thank you.

The ledger is called in Ukraine the black ledger, and it’s a collection of papers, perhaps 400 pages, as you mentioned, with handwritten notes describing payments from the Party of Regions, which is a pro-Russian political party that Paul Manafort worked for before becoming manager of the Republican campaign this year in the United States.

The outlays described in this ledger included legitimate campaign expenses, such as advertising, travel for candidates, and also illegal activities under any definition, such as payments to the electoral commission of Ukraine, members of the electoral commission receiving money from this same fund.

According to the ledger, there is also mention of Paul Manafort. So, at the same time, you have a payment for a campaign consultant, there are outlays to potentially illegal activities like bribing.

Where the money came from, also a very good question. I spoke with a senior member of the Party of Regions who described using the system before he left the party. And he said that the money was, in part, undocumented campaign contributions to the Party of Regions and also money extorted from business owners in Ukraine by the party.

JOHN YANG: Why is this significant? Why is the fact that Manafort’s name is on this ledger at this sum of $12.7 million, why is this significant?

ANDREW KRAMER: Well, I think it’s significant because the Trump campaign has made Russia an issue this year.

Mr. Trump has spoken favorably of President Vladimir Putin. There was a hack of the Democratic National Committee e-mail system, which has been blamed by the U.S. security services on Russia.

And many members of his campaign staff have experience in this part of the world, most notably Mr. Manafort. This is why we spent time to look into Mr. Manafort’s business dealings and political activities in Ukraine over the past decade.

JOHN YANG: And remind us of Viktor Yanukovych, the former president of Ukraine, who was one of Manafort’s clients, as well as the party. Remind us of who he is, what he did and his relationship with Vladimir Putin.


Mr. Yanukovych was prime minister and then president of Ukraine with a generally pro-Russian line to his politics, although he did also negotiate with the European Union to join a trade agreement, eventually, instead of choosing that agreement, choosing the alternative trade agreement with Russia, which was the cause of a large popular uprising in Ukraine in 2014 that led to his ouster.

Mr. Yanukovych fled to Russia, where he’s still living.

JOHN YANG: And we should point out that Mr. Manafort said — quote — “The suggestion that I accepted cash payments is unfounded, silly and nonsensical.”

He also included in his statement that all of his political payments are all-inclusive. They go for paying for staff, for polling, for research and advertising.

How does that jibe — what he said in his statement, how does that jibe with what the anti-corruption unit found?

ANDREW KRAMER: The anti-corruption found his name mentioned in this ledger, according to a statement from the Anti-Corruption Bureau.

They could not prove that he actually received the money, because they don’t know the signatures beside these line items in the ledger. It’s conceivable that somebody else may have taken this money, for example, and deposited it into a company that sent the money to Mr. Manafort.

This is clearly an under-the-table payment in any case. And from what I understand of his statement, he doesn’t dispute the sum involved or that he was paid for his work in Ukraine, but, rather, the nature of the payment, that it was an under-the-table payment.

JOHN YANG: And your story also talked about some of the other business dealings that Paul Manafort had in Ukraine and their connections with people connected to Yanukovych.

ANDREW KRAMER: That’s right.

Sometimes, it’s said you can do good while doing well. And while he was doing what was said to be a good deed of promoting democracy in Ukraine, he was also doing well.

The — there — several opportunities open for lucrative side deals during his period in Ukraine. We examined one of them in particular involving the purchase of a cable television station in Southern Ukraine, in Odessa, that was orchestrated through a series of offshore shell companies.

These same companies were used by members of the inner circle of the Yanukovych government to launder money obtained through corrupt means from Ukraine. The indication is that Mr. Manafort was doing business with or intended to do business with this venal and corrupt group of people who led that country for about a decade.

Reply Tue 16 Aug, 2016 11:16 am
Great catch, revellette. As someone stated before, we are about to uncover a real set of secret dealings between the Republican Party, Trump, and Putin & Gang. I'm all for it-full steam ahead.
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