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Washington Post | 17Aug2018 | Diana Pilipenkpo, [2] 18Sep2018
Manafort helped to destroy Ukraine

Yes, Paul Manafort is on trial for crimes in the U.S.
But his work in Ukraine helped to destroy a country.

During Paul Manafort’s trial for tax evasion and bank fraud, the public has heard over-the-top tales of illicit trysts in London, ostrich leather jackets and overpriced antique rugs. Bankers, IRS agents and accountants have testified at length about how Manafort defrauded financial institutions and the U.S. government. Yet little attention has been paid to the constituency that perhaps suffered most from Manafort’s deeds: the people of Ukraine.

I grew up in Ukraine, and reading the court documents detailing Manafort’s work for the country’s former president, Viktor Yanukovych, left me disgusted and depressed. The people who suffered from Yanukovych’s corrupt regime are my relatives, my friends and my former neighbors. They are not abstractions or numbers on a ledger, and under Yanukovych their lives took a back seat to state-sponsored greed.

Many in Ukraine credit Manafort with the 2010 resurrection of Yanukovych, who lost a bid for president in 2004 after serious electoral fraud on his behalf was exposed, triggering massive protests.

“Manafort worked for a long time so that Yanukovych could come to power and use that power for his own corrupt schemes, not reform,” said Serhiy Leshchenko, a member of Ukraine’s parliament and the investigative journalist who published evidence of the $12 million in payments from Yanukovych’s Party of Regions to Manafort. As another Ukrainian reporter put it, what’s been happening in the federal courthouse in Alexandria, Virginia, is actually “the first serious trial to address political corruption in Ukraine under Yanukovych.”

Yanukovych defanged law enforcement and the courts, stifled the free press, undermined integration with the European Union, welcomed Kremlin influence and, along with his cronies, allegedly stole up to $100 billion from the country -- equivalent to nearly 90 percent of Ukraine’s economic output last year. In March 2014, the U.S. Department of Treasury sanctioned Yanukovych as someone who contributed to destabilizing Ukraine, alongside his Russian allies. In this respect, Manafort also bears part of the blame for Russia’s illegal takeover of Crimea and Moscow’s bloody war in the east, which has claimed at least 10,000 lives and continues today.

Many have noted that Manafort’s two most recent high-profile clients, Yanukovych in 2010 and Donald Trump in 2016, both advanced the interests of the Kremlin. And Manafort’s trial has also shown that his work to elect Yanukovych -- which earned him more than $60 million -- was rooted in corruption. Many of Manafort’s campaign memos, such as those addressed to steel magnate Rinat Akhmetov, suggest that oligarchs’ financial interests took precedence over the interests of the Ukrainian people.

The corrupt oligarchic system that Yanukovych thrived in largely remains intact today. Unfortunately, Ukraine’s law enforcement and judiciary have not recovered enough from the hollowing out they suffered under Yanukovych -- too much corruption and crime still goes unpunished and continues to sabotage reform.

Transparency International, an anti-corruption advocacy group, gives Ukraine one of its lowest rankings in Europe. Given the correlation between corruption and poverty, it is not surprising that Ukraine is also one of the continent’s poorest countries.

After the Soviet Union collapsed, the populations of Ukraine and Poland were similar in number, education levels and wealth. Yet by 2013, the year before Yanukovych was run out of power, Ukraine’s per capita gross domestic product was less than one-third of Poland’s. Poland was able to modernize and introduce market reforms after the fall of communism, while in Ukraine, according to the Financial Times, “deep structural reforms were repeatedly delayed,” and the “oligarchs who made millions from skewed privatizations were able to gain political sway and subvert the system.” It is these oligarchs, eager to maintain the status quo, who funded Manafort’s work on behalf of Yanukovych and his party.

Manafort’s defenders have described him as a brilliant political mind. But what those court documents showed me was something far more malignant: rank cynicism and a will to use people’s fears and struggles as weapons against them. Just as in the campaign he ran for Trump, Manafort counseled Yanukovych to not only inflame economic insecurities, but also to create fissures within Ukrainian society to be exploited for political advantage. Grievances of Yanukovych’s native Donbas region in the east, with industry in decline, were amplified. In a country where, historically, Russian and Ukrainian languages have coexisted, the citizens were pitted against each other across linguistic lines.

To be sure, corruption and abuses of power were present in Ukraine before Yanukovych assumed office. But his administration took it to a level that had not existed before. The year after Yanukovych was elected, the managing partner of a prominent law firm in Kiev told me that, under the previous government, those involved in court cases could win by paying the biggest bribe. Under Yanukovych, though, judges ruled only in favor of the interests of the regime. The power of the state was unrestrained.

Manafort is fortunate to be guaranteed a fair trial and an impartial jury in the United States. The people of Ukraine who lived under the regime of the man he helped elect in 2010 enjoyed no such privileges. It is a bitter lesson that we would do well to learn from.

Diana Pilipenko is the associate director for anti-corruption and illicit finance at the Center for American Progress.

Washington Post | 18Sep2018 | Diana Pilipenkpo

What everyone’s forgetting about Paul Manafort

President Trump’s defenders responded to the news of Paul Manafort’s plea deal on Friday with the usual refrain: His case has nothing to do with the Trump campaign or allegations that it colluded with Russia in 2016.

They’re wrong. Why? Because they’re overlooking the blackmail factor.

Special counsel Robert S. Mueller III’s investigation has painstakingly documented evidence of Manafort’s role in a 10-year scheme involving money laundering, tax evasion and illicit lobbying -- crimes that could lead to decades in a prison cell. Given Manafort’s extensive ties to Russian and Ukrainian oligarchs, Russian President Vladimir Putin would almost certainly have had detailed knowledge of Manafort’s transgressions. And that means that, when Manafort was promoted to chairman of Trump’s campaign in May 2016, the Kremlin probably had vast amounts of material it could use to blackmail him. When it was revealed in August 2016 that Manafort had received at least $12.7 million in secret payments from the pro-Kremlin party of Viktor Yanukovych, Ukraine’s ousted president, that alone was enough to end his nascent return to U.S. politics.

[... video ...]  The rise of kleptocracy and the threat it poses to democracy are missing from the conversation about Paul Manafort, says Democracy Post editor Christian Caryl.

The use of blackmail, or kompromat, in the former Soviet Union is as common as beet dishes. Indeed, Putin has cultivated his system of power around selective use of compromising information, especially evidence of financial malfeasance. And its use is reserved not only for his opponents. As the Russian journalist Yulia Latynina once wrote, “To keep kompromat on enemies is a pleasure. To keep kompromat on friends is a must.” The regime’s use of the tactic is so widespread that one scholar of modern-day Russia has described the country as a “blackmail state.”

The gathering of kompromat is an organic process. Rarely is there a long-term strategy behind it; it often functions as a kind of insurance in business or political dealings. Accordingly, to say that the Russian government would have access to kompromat on Manafort is not necessarily to argue that its procurement was part of a sustained, centrally orchestrated campaign. Instead, it could have been casually generated through Manafort’s dealings with Kremlin-connected oligarchs and politicians, as well as Konstantin Kilimnik, his right-hand man, who Mueller has alleged had active “ties to Russian intelligence” through 2016.

Kilimnik was integral to Manafort’s decade-long scheme to defraud the United States. He was a close confidant, business associate, interpreter and someone Manafort often described as his “Russian brain.” In Kiev, Kilimnik was known as “Manafort’s Manafort,” and he probably helped the American lobbyist to use stolen or false Ukrainian identities to set up offshore shell companies that were used to launder some $30 million. Kilimnik ran Manafort’s office in Ukraine, where investigators found forged invoices, including one that billed a Manafort front company $750,000 for hundreds of nonexistent computers. The intimate relationship between Manafort and Kilimnik is perhaps best captured by Kilimnik’s frustrated attempts to contact witnesses in Europe to ensure they would not disclose Manafort’s secret lobbying in the United States, which violated the Foreign Agents Registration Act.

Kilimnik was also Manafort’s main conduit to Oleg Deripaska, a sanctioned Russian oligarch within Putin’s inner circle. Kilimnik facilitated Manafort’s failed investments of Deripaska’s money and communicated with Deripaska on Manafort’s behalf when the latter wanted to use his new role as Trump’s campaign chairman to “get whole.” When Manafort agreed to work for Trump for no salary, he reportedly owed Deripaska almost $30 million, including for a $10-million unpaid loan. (It is worth noting that the Justice Department attempted to persuade the oligarch to “give up Manafort” -- apparently without success.)

If Kilimnik and Deripaska knew of Manafort’s crimes and crippling financial distress, so did the Kremlin. We can safely assume that Manafort was a compromised man when, on June 9, 2016, he met with a Russian government attorney to, in an ironic twist, receive illicit “dirt” on Hillary Clinton.

But Manafort was not the only person on the Trump campaign vulnerable to potential kompromat possessed by the Kremlin. Like his campaign chairman, Trump has been plagued by self-engineered financial distress. He has grown reliant on money from the former Soviet Union, including Russia. He worked closely with politically connected oligarchs and corrupt business partners. His financial empire is shrouded in the secrecy of hundreds of shell companies. And questions about his tax and bank documents abound. The parallels between Trump and Manafort are many, but they do not end there.

Manafort’s cooperation with Mueller could soon reveal how the Kremlin employed kompromat to attack U.S. democracy, because if Putin had compromising information on the campaign chairman of a major party candidate in a U.S. general election, he would probably put it to use. The same applies to the candidate himself.

Diana Pilipenko is associate director for anti-corruption and illicit finance at the Center for American Progress.