Shaky Gates Admits Stealing to Pay for Love Nest: Trial Update
Paul Manafort’s former right-hand man, Rick Gates, testified Tuesday about how he helped his boss conceal millions of dollars and defraud banks to get loans. Under cross examination he admitted to stealing from his boss to pay for an extra-marital affair. Manafort’s lawyers blame Gates for any crimes that occurred.
Gates Says He Had Secret Relationship (5:22 p.m.)
Gates admitted under cross-examination that he stole from Manafort to cover expenses related to a secret relationship. In response to a question from Manafort’s lawyer Kevin Downing whether he stole from his boss to pay for “the secret life of Rick Gates,” Manafort’s former deputy responded: “There was a time 10 years ago when I had a relationship.” The married father of four said the relationship lasted two months and involved an apartment in London.
Gates denied Downing’s suggestion that he used money stolen from Manafort’s Cypriot accounts to pay for a trip to Las Vegas, audio equipment and groceries from a Whole Foods in Virginia. But Gates conceded that he took business trips to Las Vegas with an accused fraudster, Steven Brown, using money from Manafort’s accounts in the U.S. Downing asked if Gates had submitted personal expenses to the Trump inaugural committee. “I don’t recall,’’ Gates replied. “It’s possible.’’
Gates appeared shaky at times in answering questions, contrasting sharply with his firm and clear answers to questions by prosecutors.
He was questioned repeatedly about his trustworthiness.
“After all the lies you’ve told and fraud you’ve committed, you expect this jury to believe you?” Downing asked.
“I’m here to tell the truth,” Gates said. “I’m taking responsibility for my actions. Mr. Manafort had the same path. I’m here. I’ve accepted the responsibility and I’m trying to change.”
Manafort Lawyer Chips Away at Gates’s Credibility (4:21 p.m.)
Downing, the Manafort attorney, began his cross-examination of Gates by questioning him about unauthorized bonuses he paid himself through his boss’s offshore accounts, part of an effort by the defense to paint Gates as a liar whose credibility is damaged.
Downing, a former tax prosecutor, also cited a false statement Gates made to the special counsel’s office earlier this year before pleading guilty to one count of conspiracy against the U.S. and one count of making a false statement to the government.
These incidents are being used to reinforce the defense’s position that this case is about “taxes and trust,” as Manafort attorney Thomas Zehnle said in his opening statement last week. The defense contends that Gates repeatedly violated Manafort’s trust and can’t be trusted by the jury.
Downing suggested that Gates paid himself as much as $3 million in bonuses and unauthorized expenses from bank accounts allegedly controlled by Manafort in Cyprus, much more than the hundreds of thousands that Gates admitted to in earlier testimony.
“When did you first start giving false and misleading information to the special counsel’s office,” Downing asked.
Gates said that he provided false information because he couldn’t remember specific events. He then pleaded guilty and began cooperating with prosecutors, meeting with them numerous times in preparation for the trial.
Downing questioned several expenses Gates paid with money from the Cypriot accounts, alleging that a “substantial amount” of them represented personal expenses and not charges associated with Gates’s role as an employee of Manafort’s political consulting firm.
Pressed by Downing and Judge Ellis, Gates admitted that many of the expenses weren’t approved by Manafort.
“I submitted expense reports over several years that were not authorized,” Gates said.
Manafort Pressed Gates on Army Pick (3:04 p.m.)
Gates closed his direct testimony with a flourish, answering questions from Andres, the prosecutor, about the Trump campaign, the New York Yankees and Calk, a founder of Federal Savings Bank in Chicago.
Prosecutors asked for the first time about Manafort’s role on the Trump campaign. Gates said Manafort joined as convention manager in March 2016, and he followed his boss. Manafort became campaign chairman in May 2016 and left in August 2016. Gates stayed on and then joined the inauguration committee.
At the time, Manafort had applied for loans from Federal Savings Bank, which lent him $16 million. Calk was nominated to the transition team’s economic advisory council, and then Manafort made a request.
“Rick, we need to discuss Steve Calk for Secretary of Army,” Manafort, after he had left the campaign, wrote to Gates by email on Nov. 24, 2016. “I hear it’s being considered this weekend.”
A month later, Manafort sent an email to Gates with the subject line: “Urgent: Inaugural Invitation Lists.” Among those on the list were Stephen Calk and Stephen Calk Jr.
Andres asked if Manafort was seeking inaugural tickets for Calk. Gates said yes. The prosecutor asked Gates where Manafort was working the time. Gates said he didn’t know.
Gates also testified about problems that Manafort had in 2016 paying for New York Yankees season tickets he held since 2006. The tickets cost between $210,000 and $225,000, Gates said.
“I was still on the campaign at the time,” Gates said. “It was very work intensive. He asked me to sign a letter to attribute the cost to me and not to him.”
Andres finished his examination of Gates, and the judge took a break before Downing, the Manafort attorney, began his cross-examination.
A Loss Becomes a Profit After Edit (2:43 p.m.)
Gates testified that in the fall of 2016 he helped Manafort doctor a statement to show enough assets for Manafort to secure a loan from the Bank of California.
Guided by Andres, the prosecutor, Gates reviewed a series of email exchanges with his boss that showed them discussing how to convert a PDF profit-and-loss statement prepared by their bookkeeping firm to a Word document that could be edited.
On Oct. 10, Manafort emailed Gates asking him, “How do I convert into non PDF Word document?”
Gates, who was in Richmond, Virginia, told Manafort, “I can do it and send it to you.”
Manafort replied a few minutes later, “When are you sending.”