On August 15, the New York Times published a lengthy, detailed article on Trump Campaign Chairman Paul Manafort’s potential involvement in corrupt dealings in Ukraine. Two of the journalists published an overview of Manafort’s Ukraine activities last month. Unlike their campaign trail colleagues, the authors are excellent journalists who have been covering Russia/FSU or involved in investigative reporting for some time. Unfortunately, the Manafort article – or at least the implications it contains – is not their best work.
One commendable feature of the article is the volume of facts it conveys to the reader. The authors did not get overly hung up on Eastern Bloc vignettes describing what Ukraine looks like or rumors about Yanukovych’s weakness for luxury goods. Instead, the authors do their best to describe and weave a common thread through the following main assertions:
- Secret Ledger: the lead item of the story is that Manafort’s name – or the name of his form Davis Manafort – is listed 22 times over a five-year period in a so-called ‘black ledger’ detailing cash disbursements from the Party of Regions to various individuals and entities. According to these entries, Manafort or his firm was paid approximately $12.7 million. The source of this allegation were investigators from the National Anti-Corruption Bureau (NABU, by its Ukrainian acronym), which was formed in October 2015.
- Offshore Shell Companies: the second main issue described in the article relates to the use of offshore shell companies to facilitate the sale of Black Sea Cable (BSC), a Ukrainian telecom company. The short story is that Manafort’s firm set up an investment fund – Pericles Emerging Market Partners – that was intended to purchase BSC assets. One of the Pericles ‘partners’ was Russian oligarch Oleg Deripaska. The NYT article cites two sources concerning suspect shell companies: a Ukrainian anticorruption prosecutor – who “pointed to an open file on his desk” – and Cayman Islands litigation records.
The otherwise interesting article falls short when it comes to the evidence supporting the two principal claims.
Regarding the secret ledger, the authors are careful not to state that they viewed the ledger entries – or even one example – showing Manafort’s name. They published an example of the ledger released by NABU, but noted in the caption that it does not contain Manafort’s name. But the source of the sample page – NABU – is the same source for the statements that Manafort’s name appears in other pages. Why wouldn’t they just release the page showing Manafort’s name? And wouldn’t this be a red flag to an investigative journalist?
Strangely, while the authors rely entirely on the statements of NABU investigators to support the claim that Manafort’s name appears in the black ledger, they fail to discuss the absence of such evidence from an extract of the ledger that is freely available online. Specifically, there are 22 pages of ledger – which the article does refer to – that were provided to Viktor Trepak, a former deputy director of the SBU and later released on Ukrainskaya Pravda. The 22 pages released by UP appear to cover the period from June-December 2012. The journalists helpfully transcribed the handwritten list into a searchable list as well. Manafort’s name never appears.
The absence of Manafort’s name on the list released by UP is interesting, as the NABU investigators told the NYT journalists that the payments to Manafort show up in the handwritten ledger “from 2007 to 2012.” Moreover, one of the tasks that Manafort assisted on – the drafting of a report concerning the prosecution of former PM Yulia Tymoshenko – was delivered in December 2012. Thus, you would expect to see payments to Manafort in the second half of 2012.
None of this means that Manafort’s name does not show up in the pages that have not been released to the public. But the article is weakened by its reliance on NABU investigators’ statements versus primary source documents, and the failure of the authors to address (i) why they were not shown the ledger entries with Manafort’s name and (ii) the absence of Manafort’s name on an extract of the ledger publicly available.
The gaps in the offshore companies issue are more nuanced, but perhaps more glaring. The Ukrainian prosecutor who referred to the ‘open file’ on his desk during his meeting with the reporters mentioned a specific shell company – Milltown Corporate Services. Indeed, this is an infamous company that is widely known to anticorruption lawyers active in the former Soviet Union. The company has indeed been implicated in numerous cases of corruption, fraud, and other illegal activities. The best example was in a 2010 report prepared by investigators working on behalf of the Yushchenko administration, which identified corruption in public procurement under the previous (i.e., Party of Regions) government.
Milltown operates in an ecosystem of offshore shell companies that I collectively refer to as the corporate machinery of evil in the world. Without these companies and the secrecy jurisdictions that support them, the volume of corruption, illegal arms sales, and other nefarious conduct in the world would be minimized. Milltown’s specific role in this ecosystem of evil is more administrative – it sets up companies that administrate ‘off the shelf’ shell companies used for a few corrupt transactions, and then are discarded. The best analogy is to an illegal firearm sale for use in a murder: Milltown is the seller, the single-use shell company is the firearm, and the corrupt official is the murderer. So while Milltown is a bad guy, it’s not the bad guy.
The NYT authors failed either to understand or to educate their readers of this distinction in roles. Indeed, the reference to Milltown by the Ukrainian prosecutor breezily transitions into a discussion of the BSC transaction involving Manafort and Deripaska. The authors note that the BSC assets were controlled by offshore shells that “led back to the Yanukovych network, including, at various times, Milltown.” Let me be clear: Milltown is not part of any Yanukovych network. It is an offshore services provider that Yanukovych and his cronies have used in the past.
More importantly, Milltown has nothing to do with the BSC transaction the article proceeds to describe. Milltown was dissolved in July 2005, according to its registry page in Ireland. But according to the litigation records cited by the article, Pericles was not formed until March 2007 and thus has nothing to do with Milltown. But the guilt-by-association sticks with the reader, based on Milltown’s past control of BSC assets. Again, an analogy: the logic is similar to alleging that you are guilty for buying a used computer that, under its previous ownership, was used to engage in criminal activity. More importantly, the BSC deal fell through – the article hints at this but never plainly states it – and Deripaska is now suing Manafort’s company. So are Manafort and Deripaska friends or enemies…I’m confused. I would also object to the article’s characterization of Deripaska as a Putin “ally,” but that is too meaty a subject to address here.
To me it seems that the authors – or perhaps more likely their editors – were seduced by the prospect of being the first ones to publish an investigative story that conveniently segued into the Trump-Putin narrative that arose shortly after the RNC convention. Indeed, the article was probably one of the most-reported-on political stories of the day.
It would be interesting to know whether the reporters sought out the story, or if it came to them. Frankly, I would not be surprised if the NABU investigators sold the story. There are certainly Ukrainian motivations at play: to hurt a candidate perceived as less supportive of Ukraine; to gain clout – and perhaps more funding and legal authority – as a young agency.
Unfortunately, the reporting on this story will inhibit a real understanding of what type of political animal Manafort really is: a bottom-feeder who will sell his services to anyone who pays on time. To be sure, Manafort’s willingness to board the S.S. Trump on its all-but-certain disastrous voyage reveals what a rank opportunist he is. Moreover, the primacy of financial gain over democratic values is not a story about Manafort, but rather of the political consulting industry in general.
But instead of an exploration of this industry – which, let’s face it, subverted the 1996 Russian presidential election – we get Putin-Trump conspiracies packaged as investigative journalism. As Trump would say at the end of a Tweet, “SAD!”