Paul Manafort was hired by Republican presidential hopeful Donald Trump to bring the wisdom of an old Washington hand to a campaign of political novices and provide expertise on the arcane art of counting convention delegates.
But beneath the image of a campaign wise-man is a more complex picture of a veteran consultant who has pursued parallel careers as a lobbyist, political adviser and global deal-maker. He has parlayed political relationships around the world into an array of intricate financial transactions with billionaire oligarchs and other controversial investors that have at times spurred legal disputes.
In one case, Manafort tried unsuccessfully to build a luxury high-rise in Manhattan with money from a billionaire backer of a Ukrainian president whom he had advised. In another deal, real estate records show that Manafort took out and later repaid a $250,000 (Dh919,500) loan from a Middle Eastern arms dealer at the centre of a French inquiry into whether kickbacks were paid to leading politicians in a 1995 presidential campaign. And in another business venture, a Russian aluminium magnate has accused Manafort in a Cayman Islands court of taking nearly $19 million, intended for investments, then failing to account for the funds, return them or respond to numerous inquiries about exactly how the money was used.
At one point, attorneys for the Russian businessman, Oleg Deripaska, claimed that they could not locate Manafort or his partner, Richard Gates. The tycoon hired a private investigator to track them down, according to a 2014 petition that Deripaska’s attorneys filed in a Cayman Islands court seeking recovery of the money.
“It appears that Paul Manafort and Rick Gates have simply disappeared,” the petition states.
Manafort’s attorney, Richard Hibey, did not respond to repeated Washington Post requests for comment on the current status of the Cayman Islands dispute.
Court records show that, as of August 2015, seven years after Deripaska requested his money back, the Russian businessman was still seeking to recover the funds. A Deripaska representative said last week that the matter still angers Deripaska and that the tycoon’s “accountants and lawyers are looking at this right now.”
Manafort, 67, is in many ways a natural choice to be Trump’s top campaign adviser. His firm was hired by Trump in the mid-1980s to lobby on real estate issues, said Manafort’s former business partner Charlie Black. In addition, Manafort has owned an apartment in Trump Tower since January 2015, property records show. And another former Manafort business partner, Roger Stone, has been an informal adviser to Trump for years.
More than many traditional political consultants, Manafort has demonstrated a willingness to forge unconventional alliances and cut deals in a way that makes him well suited to help Trump secure the nomination in a fractured GOP.
Manafort, whose father owned a real estate company and served three terms as mayor of the family’s home town of New Britain, Connecticut, began his Washington career in 1975 as associate director for personnel in former United States president Gerald Ford’s White House. He gained quick respect in the party in 1976, when he helped Ford secure the nomination during a contested convention. He worked later as a convention adviser to the presidential campaigns of Ronald Reagan and Bob Dole.
Manafort also built a high-powered lobbying practice that did not shy from clients others shunned. They included two corrupt dictators, Mobutu Sese Seko of Zaire and Ferdinand Marcos of the Philippines, both of whom stole billions of dollars from their countries.
Manafort’s international work and globe-trotting ways have prompted some friends to call him “the Count of Monte Cristo”, a reference to the swashbuckling hero of the 19th-century French novel. Several of Manafort’s former campaign colleagues said they admired Manafort’s international work and pointed out that some of Manafort’s clients, such as Marcos and Angolan rebel leader Jonas Savimbi, were backed by the administration of former US president Ronald Reagan.
“Paul had a great career overseas,” said GOP strategist Scott Reed. “He was very successful. He offered a lot of good advice, and he made a lot of money — and there’s nothing wrong with that.” Black, the former Manafort business partner, called Manafort “a brilliant guy” and recalled how he had taken a keen interest in overseas work.
Manafort and Gates, who also works for the Trump campaign, did not respond to requests for comment, and Trump spokeswoman Hope Hicks declined to make either available or to provide a comment on behalf of Trump. Manafort’s attorney also declined to answer detailed questions regarding his client’s career.
The relationship with Deripaska started on a positive note.
The firm of Davis Manafort, which Manafort owned with Gates and longtime Republican strategist Richard Davis, wooed Deripaska in 2006, describing its experience in “international and domestic business, politics, government and public policy development”, according to the Cayman Islands petition filed on behalf of Deripaska.
They told Deripaska their goal was to set up a $200 million fund to make a series of private-equity investments and acquisitions, primarily in Russia and Ukraine, according to the petition. The partnership making the investments was created in the Cayman Islands in 2007 and dubbed Pericles Emerging Market Investors, borrowing the name of the ancient Athenian statesman and general.
Deripaska already knew Davis, who with Manafort had helped arrange meetings for him with Senator John McCain (Republican-Arizona), in January and August 2006 as McCain prepared to run for president. Deripaska was interested in building his contacts in the US, which in July 2006 revoked his visa. The Wall Street Journal reported at the time that his visa was pulled amid concerns that he might be linked to organised crime, something he has vigorously denied. He later received visas to travel to the US.
Deripaska made his investment through a firm called Surf Horizon, a company incorporated in Cyprus in July 2007. He disclosed his ownership of Surf in a Hong Kong stock exchange filing, and a Deripaska representative confirmed his ownership to the Post. The Cayman Islands petition said that Surf and another company controlled by Deripaska also paid $7.5 million in management fees to an entity controlled by Davis, Gates and Manafort.
Deripaska expected the funds would be used to make acquisitions in Russia, Ukraine and other countries in eastern and southern Europe, according to his Cayman Islands petition. The court filing describes a complicated business plan in which Manafort and his partners would establish companies in Cyprus known as “special purpose vehicles” for tax and regulatory purposes.
Instead, the petition argues, the partnership said it made only one purchase — buying a stake in Ukrainian cable television and Internet ventures.
Deripaska, squeezed by the 2008 credit crunch, asked for the partnership to be liquidated and his money returned, according to Deripaska’s petition. But the filing said it was not clear who was controlling the Ukrainian cable TV and internet assets and what happened to the money Deripaska initially provided.
In 2014, Deripaska was still looking to get his money, prompting his attorneys to file the Cayman Islands petition.
By that time, Manafort’s apparent absence from Washington had become something of a joke among his friends. A Politico story in March 2014 noted that some were wondering where Manafort, a “mystery man”, was hiding.
In August 2015, Deripaska’s attorneys, using a legal provision allowing US discovery for legal proceedings in foreign courts, asked a federal district court in Virginia to order documents and depositions from Manafort, Gates and Davis.
In the filing, Deripaska’s team argued that Gates had in 2008 promised an audit of the fund but that none had been produced. In addition, beyond initial assurances that the transactions had been successful, Davis, Gates and Manafort had “provided no additional updates,” the petition said.
A week after the petition was filed in Virginia, Judge Gerald Bruce Lee issued an order allowing Deripaska’s team to move ahead. Arlington, Virginia-based private investigator Deborah C. Martin filed documents with the court showing that subpoenas were delivered to Gates at his Richmond home and to the wife of Davis at their home. Martin made no mention in her court filings of Manafort. She declined to comment to the Post.
Davis did not respond to The Post’s requests for comment. He told Yahoo News, which first reported on the dispute in a story published late Tuesday, that he had nothing to do with Deripaska’s investment and that he has not spoken with Manafort in more than five years.
The current status of the dispute is not clear from court records, and attorneys for Manafort and Deripaska declined to elaborate.
In another case, Manafort’s business was more personal. Real estate records show that in 2004, Manafort secured a $250,000 loan from Middle Eastern arms dealer Abdul Rahman Al Assir, using his Fairfax County, Virginia home as collateral. The records show that Manafort paid off the debt in July 2015. Al Assir and Manafort became friendly in the 1990s, when Manafort’s firm represented a Texas-based petroleum engineering firm that Al Assir owned, recalled Black, Manafort’s former lobbying partner.
Attempts to reach Al Assir were not successful.
Manafort and Al Assir have come under scrutiny in France amid a long-running, complex and colourful scandal known as “Karachi-gate”. According to French news accounts, investigators are probing whether funds from the 1994 sale of French-made attack submarines to Pakistan were diverted to the 1995 presidential campaign of Edouard Balladur, who was prime minister at the time. French media, citing witness testimony, reported that Manafort at the time was providing consulting and polling services to Balladur.
One question under review, according to Agence France-Presse, is whether Manafort was paid by Al Assir using the money from the submarine sale. Balladur has denied wrongdoing and has said he does not recall Manafort working for him.
In 2013, Manafort provided a deposition in the case, according to a report in the French newspaper Libration. Hibey, Manafort’s attorney, said Manafort “was interviewed, was thanked for his cooperation, and nothing further regarding Mr. Manafort has transpired”.
Another case, in which Manafort tried to develop a 65-storey Manhattan luxury apartment building in 2008, illustrates how he has tapped into his global political relationships to pursue financial deals. In a bid to build the $850 million project on the site of the historic Drake Hotel, Manafort relied in part on funds from Dmitry Firtash, a Ukrainian energy tycoon with a history of legal troubles around the world.
Manafort’s role in the deal was detailed in documents submitted as part of a 2011 New York lawsuit in which a former Ukrainian prime minister accused Firtash of working with Manafort and others to invest ill-gotten profits from energy transactions in Ukraine. Attorneys for Manafort and Firtash’s energy company argued for the lawsuit’s swift dismissal. Hibey, who represented Manafort and other American defendants, argued in a filing that the lawsuit was based on “speculative assertions unsupported by any genuine factual allegations”.
The lawsuit was dismissed for lack of evidence. But the case left a trail of correspondence between Firtash company executives and Manafort and Gates that provide a glimpse into the world of Manafort and his partners.
Manafort and Firtash met in the early 2000s, the lawsuit contends, at a time when Manafort was doing political consulting for Viktor Yanukovych, who would later become Ukraine’s president. Firtash had been a supporter. Some in the West felt Yanukovych could be an ally, but ultimately he pursued ties to Russia and fled Ukraine amid violent clashes.
Manafort met with Firtash in May, June and August of 2008 to seal the Manhattan real estate deal, according to a memo by Gates. Firtash had agreed to put $112 million into buying the Drake Hotel, tearing it down and building a new luxury skyscraper, to be called the Bulgari Tower.
Manafort emailed his partners in August 2008 describing an idea for two separate real estate funds, one to focus on distressed real estate in the US and the other to seize opportunities in Eastern Europe and the Caucasus.
In the end, the apartment project fell through as the economy plunged into recession.
Prior to joining Trump’s campaign, Manafort had operated largely out of the limelight. But he once explained his approach to business during public testimony to Congress. Lawmakers in 1989 were probing a deal of Manafort’s that involved federal low-cost-housing subsidies.
Manafort’s firm had lobbied to obtain about $43 million in Department of Housing and Urban Development subsidies for a New Jersey housing project — while holding an option to purchase a stake in the project. The firm invested before the subsidies were announced. Manafort said that after talking to a senior HUD official, he had “a high degree of expectation” the subsidies would be approved.
“The technical term for what we do and what law firms, associations and professional groups do is ‘lobbying’,” Manafort said. “For purposes of today, I will admit that, in a narrow sense, some people might term it ‘influence peddling’.”
— Washington Post
Steven Mufson covers the White House. Since joining the Washington Post, he has covered economics, China, foreign policy and energy. Tom Hamburger covers the intersection of money and politics for the Washington Post.
This article was published in the Washington Post on April 27, 2016.
