The prosecution’s star witness, Rick Gates, detailed a yearslong fraud by Paul Manafort. Defense lawyers assailed Mr. Gates’s credibility, pointing to thefts, lies and an extramarital affair.
ALEXANDRIA, Va. — The trial of Paul Manafort on bank and tax fraud charges descended on Tuesday into a series of brutal assaults on the character of two of President Trump’s top campaign aides, as prosecutors cast Mr. Manafort as the architect of a sprawling multiyear swindle and defense lawyers portrayed Rick Gates, the prosecution’s star witness, as a serial thief, adulterer and liar.
The testimony managed to further blacken the reputations of both Mr. Manafort, Mr. Trump’s campaign chairman for three months in mid-2016, and Mr. Gates, who was deputy campaign chairman and later executive director of Mr. Trump’s inaugural committee.
Mr. Manafort personally directed the creation of false financial statements to obtain bank loans and deliberately hid income in foreign bank accounts to evade federal taxes, Mr. Gates testified. When one estimate of his tax bill came out too high, Mr. Manafort fired off a furious email to Mr. Gates.
“How could I be blindsided like this. You told me you were on top of this. We need to discuss options. This is a disaster,” he wrote in one of dozens of documents that prosecutors have submitted as evidence.
But Mr. Gates’s recounting of Mr. Manafort’s various schemes was almost undone by his description of his own misdoings, including a secret paramour he met for trysts in London. He admitted that he had engaged in so many acts of fraud that he faced up to 100 years in prison if convicted. He acknowledged that he had embezzled hundreds of thousands of dollars from Mr. Manafort, who employed him for roughly two decades, by faking expense reports. It was also “possible,” he admitted, that he had stolen funds from Mr. Trump’s inaugural committee.
“Have they confronted you with so many lies that you can’t remember all of them?” Kevin Downing, one of the defense lawyers, demanded when Mr. Gates danced around a question, citing a fuzzy memory. “You seem to have perfect recollection” about Mr. Manafort’s alleged crimes, Mr. Downing said sarcastically. But asked about his own misdeeds, “you seem to be having such a hard time,” Mr. Downing said to Mr. Gates.
Over all, the testimony filled in a picture of two men with few scruples and a powerful thirst for money, hiding payments from Ukrainian clients in foreign bank accounts and deceiving accountants, banks and tax authorities, both individually and together. The pair made millions working for pro-Russian political forces in Ukraine. But once their principal patron, Viktor F. Yanukovych, was ousted as Ukraine’s president and fled to Russia in 2014, Mr. Manafort, at least, was suddenly without his lucrative line of work.
Mr. Gates testified that Mr. Manafort’s political consultancy, DMP International, did not have a single client in late 2015 and early 2016. By the time the two men joined the Trump campaign that March, he said, vendors were dunning Mr. Manafort about unpaid bills. They added up to more than $1 million, an accountant testified. Yet Mr. Manafort worked for the Trump presidential campaign for no pay, apparently hoping the connection alone would help him land new business.
He was booted off the campaign in August 2016 amid allegations about his work in Ukraine. But he still leaned on Mr. Gates to use his influence to help him win favor with the chairman of a bank that eventually granted him $16 million in loans, partly based on falsified financial documents.
Mr. Manafort pushed for the banker, Stephen Calk of Federal Savings Bank in Chicago, to be appointed to Mr. Trump’s economic advisory council and to be invited to Mr. Trump’s inauguration, Mr. Gates testified.
In one email to Mr. Gates during the presidential transition, Mr. Manafort wrote, “We need to discuss Steve Calk for secretary of the army.”
[This article will be updated.]
