The Indictments: A Criminal Proceeding and a Message

Paul Manafort and Richard W. Gates III were both indicted earlier today on charges ranging from conspiracy against the United States to tax fraud and money laundering and more.  According to CNN, the statute of limitations on at least some of the tax fraud claims would have expired tomorrow and consequently at least the tax fraud charges had to be brought today in order to preserve those claims moving forwards.  As a result, there is no reason to believe that the charges made public already constitute all of the charges which will be made against either Manafort or Gates, or that Manafort and Gates are the only individuals who are likely to be charged.  There almost certainly is more coming- both in terms of charges and defendants.

CNN’s reporting about the timing of the indictment is very important here.  It helps explain why certain charges are being brought now rather than later after the investigation has more evidence and is ready to bring all charges against Manafort and Gates (assuming there are more).  If the US amends the indictment, it will protract criminal proceedings against both Manafort and Gates- something no prosecutor relishes.  However, the indictment is not only focused on financial crimes (Counts 1-9) and it’s perhaps the non-financial crimes portions (Counts 10-12) which become the most fascinating of all.

Count 10 charges Manafort and Gates with failure to register as a foreign principal.  Count 11 charges them with providing false and misleading FARA statements (FARA is the form which is filed to register as a foreign agent).  Count 12 charges them with false statements generally (but incorporates by reference their false statements in the FARA forms and in statements made to the DOJ in connection with the FARA forms).  Count 12 stems from violations of 18 U.S.C. 2, 1001 (this is relevant for later).

Counts 10-12 are related to the financial crimes in that the income they earned as a foreign agent became the subject of the tax fraud and money laundering claims.  However, these counts are almost certainly intended as a message to others who have filed incomplete/false paperwork who may also be caught up in the Mueller investigation.  Certainly Michael Flynn, Jared Kushner, and even Attorney General Jeff Sessions have to be reading Counts 10-12 with particular interest.

Recall for a moment that Flynn did ultimately register as a foreign agent, albeit long after registration was required.  If that sounds familiar, it should- Michael Flynn did the same thing related to his work for Turkey.  Mueller is clearly not accepting that a late filing of a FARA form “cures” all prior false statements and omissions, nor does it constitute a timely registration as a foreign agent.  If Mueller is willing to prosecute Flynn for issues related to his FARA form, Flynn almost certainly will be prosecuted for the same misconduct.

Of course, the FARA form is not the only one that carries criminal penalties if not completed appropriately.  Kushner  and Sessions were not required (from what we know) to complete a FARA form but they did complete the SF-86 security clearance form and their disclosures appear to have been woefully incomplete.  Sessions, for example, claimed on his form that he never met with any foreign officials.  His subsequent testimony in Congress makes clear that statement is far from true, even if he wants to pretend that he didn’t think the form wanted him to disclose “any casual conversation” and that he only meant he has had “no improper communications” (not what the form asks).

Kushner’s first SF-86 submission omitted over 100 contacts with foreign agents and had to be amended three different times (claiming that the first form had been accidentally filed due to an error by his assistant).

The fact that Mueller and Gates are being charged with lying on a federal form and failing to file the form timely does not mean that Flynn, Kushner and Sessions will also face charges for their failures on their SF-86.  However, if Mueller finds Flynn, Kushner and/or Sessions lied on their forms, they could face up to 5 years in prison under… 18 U.S.C. 2, 1001- the same section of the code being used to prosecute Manafort and Gates.

Mueller isn’t only interested in prosecuting Manafort and Gates.  He wants to discover if he has real fish to fry in this investigation, and like any good prosecutor he is finding ways to squeeze to find out.  The indictment isn’t just the commencement of criminal proceedings against Manafort and Gates.  It’s a message to others in Trump’s orbit: Mueller sees you, and he is coming.