Mueller fallout continues as Greg Craig trial opens

U.S. District Court Judge Amy Berman Jackson said all the various emails about spinning the report and boasting about favorable news accounts left her suspecting that some of those involved were claiming credit for things they had little or nothing to do with.

“Part of the problem with all these guys is they’re all PR guys,” the judge said. “They take credit for the good stuff. You know, Manafort always takes credit for the good stuff, he doesn’t take credit for the bad stuff.”

The trial’s focus on the art of spinning journalists may fuel existing suspicion in some quarters that the Washington press corps, policymakers and advocates are too intimate.

Jonathan Hawker, a former FTI consultant who worked on the rollout of the report, told the FBI that Craig suggested that he and Sanger planned to discuss the project over drinks. “Hawker recalled Craig mentioning in a call he and Sanger would have a glass of wine when he went by,” an FBI report says.

The indictment plays up the significance of Craig’s efforts, saying he “hand-delivered an exclusive advance copy of the Report to [Sanger’s] home.”

The full story, as is often the case, seems to be a bit more mundane. A defense filing on Friday says that, when Craig showed up to deliver the report, Sanger wasn’t there, so the veteran D.C. attorney left the document behind Sanger’s storm door.

The two men did speak by phone and trade emails about the report, court papers say, but if Craig’s aim was to put a pro-Ukraine spin on the document, it’s not evident from the Times’ skeptical, 621-word article.

Sanger handed the story off to the paper’s Moscow bureau chief at the time, David Herszenhorn, who got the lead byline. Under the headline “Failings Found in Trial of Ukrainian Ex-Premier,” the article emphasized that Tymoshenko’s rights were violated during the trial but also noted that Craig’s report “seemed to side heavily” with Yanukovych’s government, particularly on the question of his political rival’s guilt.

Herszenhorn, now the chief Brussels correspondent for POLITICO Europe, got the only on-the-record quote from Craig to appear in the article. That comment made a point unhelpful to Yanukovych: that Craig and the Skadden team had not tried to analyze whether Tymoshenko was targeted for political reasons.

Just what else Craig said to Sanger and Herszenhorn nearly seven years ago could be crucial to the case, but the only direct testimony jurors seem likely to hear on that point will be from Craig, who lawyers have indicated they expect will testify in his own defense.

The two reporters referred questions to New York Times attorney David McCraw, who defended the story.

“The Times wrote an appropriately skeptical story [that] raised questions about the political nature of the trial and about the compensation that Mr. Craig’s firm was paid for the report,” McCraw said.

The Times article said Craig wouldn’t comment on the funding of the report. The bulk of the more than $4 million came from a Ukrainian steel oligarch, Victor Pinchuk. Prosecutors say part of why Craig did not register was to avoid revealing the financing for the report. They also suggest he didn’t want to register because it could affect his ability to serve in a high government post in a future administration.

McCraw said he’d gotten no sign from either the prosecution or the defense that the reporters would be called as witnesses.

Journalists generally seek to avoid testifying in court, but in the leak-related case that Craig handled in 2016, the Times reporter submitted an unusual written statement seeking leniency for Cartwright and downplaying the significance of the four-star general’s role in Sanger’s reporting on the U.S.- and Israeli-led effort to infect Iran’s nuclear program with the Stuxnet computer virus. Cartwright pleaded guilty to lying in the case, but while he was awaiting sentencing, President Barack Obama granted him a full pardon.

Sanger also testified at the 2007 trial of Vice President Dick Cheney’s former chief of staff, I. Lewis “Scooter” Libby, as did other prominent journalists, like Tim Russert, Judith Miller and Robert Novak.

The inquiry into Craig’s activities that followed the 2012 Times article apparently went dormant the next year after Justice officials agreed Craig wasn’t required to register. Mueller’s team began looking at the issue again as it investigated Manafort and Gates. Craig was interviewed twice by Mueller’s office before the issue was handed off to prosecutors in New York and then others in Washington, who obtained the indictment of Craig in April.

During the pretrial hearing Friday that ran for four hours without a break, Jackson seemed surprised as prosecutors and defense attorneys ticked off the individuals who were involved with Craig’s Ukraine project and are mentioned in emails and memos, but are not expected to take the witness stand.

They include Manafort, who was convicted at trial of tax and bank fraud and later pleaded guilty to conspiring to act as an unregistered foreign agent for Ukraine and is serving a seven-year prison sentence; Alex Van Der Zwaan, a former Skadden lawyer who worked on the Ukraine project with Craig, got 30 days in prison for lying to Mueller’s team and was deported; Konstantin Kilimnik, Manafort’s right-hand man in Ukraine who the FBI suspects has ties to Russian intelligence, was indicted at Mueller’s request on obstruction of justice charges and is reportedly in Russia; and Tony Podesta, a longtime Washington lobbyist who has not been charged with any crime but whose firm imploded in 2017 amid the Mueller investigation.

“There are going to be a lot of empty chairs in the courtroom,” Craig lawyer William Taylor declared on Friday, previewing a potential defense move to suggest that the prosecution case has too many loose ends.

Rick Gates, who is cooperating with prosecutors as he awaits sentencing on conspiracy and false-statement charges brought by Mueller, is expected to be the marquee prosecution witness. The key defense witness will probably be Craig himself.

Defense attorneys made clear last week that they intend to blast the absent Manafort and the present Gates as admitted and serial liars. However, in response to a query from the judge, both sides said they didn’t plan to broach a topic that caused a ruckus when raised at Manafort’s trial in Virginia last year: claims that Gates used some funds related to the Ukraine work to finance an extramarital affair.

Another twist in the case is that while the indictment alleges that Craig illegally failed to file as a foreign agent, he is not charged with that offense, but solely with perpetrating a scheme designed to cover up his activities. The statute of limitations on his alleged failure to register as an agent for Ukraine ran out last year, despite a half-year extension his lawyers agreed to as they tried to head off the case.

Jackson said on Friday that the question of whether Craig was obligated to register under FARA is “somewhat tangential” to the scheme-to-mislead charge he now faces.

In January, Skadden agreed to pay the U.S. government the $4.6 million the firm earned on the work and to retroactively register as an agent for Ukraine. Prosecutors agreed not to press charges over the episode as part of a deal in which Skadden agreed to cooperate with investigators.

Several Skadden partners are expected to testify at the trial, along with at least one associate at the firm who is now a Senate Judiciary Committee counsel, Alex Haskell.

Craig was facing two similar false-statement counts until last week, when the judge dismissed one because of uncertainty about its applicability to Craig’s case. He faces up to five years and a $250,000 fine if convicted on the remaining charge.

Sentencing guidelines will call for a lesser term, including the potential of no prison time at all, but any felony conviction is likely to cause Craig to lose his law license, which he has held for the past 46 years.

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