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Lobbying, Political Worlds of Paul Manafort Merge in Indictment

For nearly 40 years, Paul Manafort has been one of Washington’s top lobbyists, paid millions of dollars to represent controversial  figures from around the globe who needed to burnish their standing in the U.S. capital, including the Philippines’ Ferdinand Marcos,  Zaire’s military dictator Mobutu Sese Seko and most recently Ukrainian strongman Viktor Yanukovych.

At the same time, he has been a Republican political operative, advising and serving an array of the party’s presidents since the 1970s. Just last year, he briefly was campaign chairman for the upstart candidacy of real estate mogul Donald Trump on his eventually successful run to the White House.

Now the lobbying and political worlds of the 68-year-old Manafort have achieved a merger of sorts.

A federal grand jury in Washington indicted him in a money-laundering scheme linked to his lobbying for Moscow-supported Yanukovych before the Kyiv leader was ousted in 2014 and fled to Russia in exile. The charges came as part of special counsel Robert Mueller’s investigation into Russian interference in the 2016 U.S. presidential election aimed at undermining U.S. democracy and help Trump win.

By the end of Monday, Manafort was under house arrest, awaiting resolution of charges that could, if convicted, land him in prison for years.

The indictment against Manafort did not describe his tenure as Trump’s campaign chief and was related solely to lucrative lobbying transactions that predated the Trump campaign.

Trump was quick to note, “Sorry, but this is years ago, before Paul Manafort was part of the Trump campaign.”

After Manafort pleaded not guilty to the charges, his lawyer, Kevin Downing, told reporters, “I think you all saw today that President Donald Trump was correct. There is no evidence that Mr. Manafort or the Trump campaign colluded with the Russian government. Mr. Manafort represented pro-European Union campaigns for the Ukrainians and … was seeking to further democracy and to help the Ukraine come closer to the United States and the EU.”

Downing said, “Those activities ended in 2014 over two years before Mr. Manafort served in the Trump campaign.”

But Manafort was at the top of the Trump campaign for three months in 2016 and Mueller’s investigators are in the midst of a months-long investigation of trying to determine who had contacts with Russia in the long run-up to Trump’s upset win in the November election over former U.S. Secretary of State Hillary Clinton. One person they could look to for answers is Paul Manafort.

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US Russia Probe Takes Dramatic Turn with Indictments, Plea Deal

The special counsel investigation into possible collusion between President Donald Trump’s 2016 presidential campaign and Russia took a dramatic turn Monday with criminal indictments of two former Trump campaign officials, Paul Manafort and Rick Gates. Special Counsel Robert Mueller also revealed that a former Trump campaign aide, George Papadopoulos, pleaded guilty to lying to the FBI in connection with the Russia probe. VOA National correspondent Jim Malone has more from Washington.

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Indictment Against Manafort, Gates Details Elaborate Scheme

The indictment against Donald Trump’s former campaign chief, Paul Manafort, and a longtime business associate alleged the two carried out an elaborate scheme that involved the use of a little-known outfit to mask years of lobbying on behalf of Ukraine’s former president, his pro-Russia political party, and the Ukrainian government. 

Manafort and his former business partner, Rick Gates, are charged in a 12-count indictment including conspiracy, money laundering, and making false statements. The two could faces decades in prison if convicted, and both have pleaded not guilty to all charges.

The allegations do not include collusion with Russia during the presidential campaign.

The indictment was approved by a federal grand jury on Friday and unsealed after Manafort and his right-hand man and former Trump campaign adviser, Gates, turned themselves in to the FBI. It represents the first charges brought by Special Counsel Robert Mueller, who is looking into allegations of Russian meddling in the 2016 U.S. presidential election.

Manafort’s consulting work for Ukraine started in 2006 when the Republican political strategist was retained by Ukraine’s pro-Russian Party of Regions to “advance its interests” in Ukraine. In 2010, Viktor Yanukovych, the party’s candidate, was elected president. Four years later, he fled to Russia following popular protests.   

Eight-year lobbying campaign

The indictment alleges that during the eight-year period, Manafort and Gates “engaged in a multimillion-dollar lobbying campaign” in the U.S. on behalf of Yanukovych, the Party of Regions, and the Ukrainian government. The two hid their activities from U.S. authorities and used offshore accounts to launder millions of dollars in Ukrainian payments.  

As part of their effort to mask their lobbying from U.S. authorities, the pair used a little-known outfit called the European Center for Modern Ukraine. The Brussels-based outfit called itself “an advocate for enhancing EU-Ukrainian relations” but in reality served as “a mouthpiece” for Yanukovych and his Party of Regions, according to the indictment. Manafort and Gates used the nonprofit to carry out lobbying and public relations campaigns, according to court records.

Manafort and Gates then hired two Washington, D.C., firms to lobby members of Congress about Ukrainian sanctions, the “validity” of Ukraine elections, and the “propriety” of Yanukovych’s imprisonment of his political rival, former prime minister Yulia Tymoshenko. 

“Manafort and Gates did so without registering and providing the disclosures required by law,” the indictment alleges.

The two lobbying firms are Podesta Group Inc. and Mercury LLC, the Associated Press reported last year.  The Podesta Group is headed by Tony Podesta, the brother of John Podesta, who was campaign chairman for Hillary Clinton. Politico reported on Monday that Tony Podesta was stepping down from the firm.

To conceal the lobbying effort, Manafort and Gates allegedly arranged for the two lobbying firms to be ostensibly working for the European Center for Modern Ukraine, which in fact was “under the ultimate direction” of Yanukovych, the Ukrainian government and the Party of the Regions, according to the indictment.

Manafort and Gates are also accused of using their offshore accounts to secretly pay $4 million for a report about Tymoshenko’s trial commissioned by the Ukrainian government.

Ties to Trump

Manafort and Gates joined the Trump campaign in March 2006. Gates was later promoted as deputy campaign manager and Manafort served as campaign chairman. He was fired in August after reports of his lobbying for pro-Russia interests in Ukraine.

The Department of Justice began looking into Manafort’s and Gates’ lobbying for Ukraine last year. The indictment says the two partners told investigators in 2016 that they merely “provided an introduction” between the Brussels center and the Washington lobbying firms, and that their efforts “did not include meetings and outreach within the United States.”

In fact, according to the indictment, Manafort and Gates were deeply involved in the scheme. They had weekly phone calls and email communications with officials of the two companies, directed them on “specific lobbying steps,” received regular reports from them, and updated Yanukovych about the lobbying activities. For their efforts between 2012 and 2014, the firms were paid $2 million. 

Charges

The charges against Manafort and Gates include conspiracy to defraud the United States, money laundering, failure to report foreign bank holdings to the U.S. Treasury Department, lobbying for a foreign government without registering with the Justice Department, and making false statements about their lobbying efforts.

Manafort and Gates are accused of serving as unregistered foreign agents of Ukrainian interests in violation of Department of Justice registration requirements.

Between them, Manafort and Gates controlled 17 domestic entities, 12 Cyprus-based entities and 3 other foreign entities, according to the indictment. In all, $75 million passed through the offshore accounts. Manafort is alleged to have laundered more than $18 million. Gates is accused of laundering more than $3 million from offshore accounts.

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Trump Expected to Nominate Powell for Fed Chair

U.S. President is expected to nominate Federal Reserve Governor Jerome Powell as the next chairman of the central bank, senior administration officials said Monday.

Powell is a Republican centrist who appears inclined to continue the Fed’s strategy of gradual interest rate hikes.

But officials say Trump hasn’t made up his mind and could change it.

Powell would represent a middle-ground pick for Trump, who is also considering current Democratic Fed Chair Janet Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

Powell could, however, relax some of the stricter financial rules that were enacted after the 2008 financial crisis. Trump has complained that those rules have been too restrictive.

The decision over the Fed’s next leader is overshadowing this week’s meeting of the Federal Reserve’s policy meeting.

Trump said Friday he has “someone very specific in mind” for the Fed. “It will be a person who, hopefully, will do a fantastic job,” Trump said in a short video message posted on Instagram and Twitter.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish” approach — more inclined to raise rates to fight inflation than to keep rates low to support the job market. Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.

 

Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010 to prevent another crisis.

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Blockchain Technology Could Unblock Southeast Asia

Imagine you could swipe your phone over a piece of fish in the supermarket and instantly see secure records of its entire path through the supply chain, from the technique used by the fisherman who caught it in Indonesia to when it was shipped and how it was processed at a factory in your home country —  all at the tap of a smartphone.

Trial projects such as that one are testing the potential of Blockchain technology to bring transparency to all sorts of notoriously inefficient or shadowy industries in Southeast Asia.

Blockchain, the technology that powers bitcoin, is an essentially unchangeable form of bookkeeping. It creates cryptographically chained signatures between blocks of information that are authenticated by users over a peer-to-peer distributed ledger — a public record that can be applied to any type of bookkeeping, not just cryptocurrencies.

“It removes the requirement for a centralized authority, and in a lot of the products that it’s being launched in, this centralized authority tends to be the government,” said Alisa DiCaprio, head of research at R3 — an enterprise banking software firm that uses distributed ledger technology.

In a region where the most important records — identity and ownership for instance — are often subjected to little or no external oversight, blockchain offers enormous potential benefits.

Erin Murphy, Founder and Principal of Inle Advisory Group, a Myanmar and emerging business advisory firm, said major Asian business hubs are looking to blockchain to clean up and simplify transactions.

“Ideally, we would want to see adoption of blockchain at an official level all across the region,” she said in an email. “But perhaps not surprisingly, the governments that are leading blockchain adoption are those that are already low-corruption.”

One of those governments, she said, is Singapore, which is working with major banks on a blockchain-based system to streamline and qualitatively improve their customer (KYC) processes.

In other countries, it is being used for completely different purposes. In the Philippines, a remittance market worth billions of dollars per month has been invaded by firms offering cheaper services built on blockchain, which people can access without a bank account..

“Any steps that get taken at first may not be viewed through an anti-corruption lens and may inadvertently tackle that issue; it will likely be viewed through a development lens to kickstart poverty alleviation and bringing sectors up to international standards that attract foreign investment,” Murphy said.

More than money

There are many trials with clear utility in Southeast Asia underway, including systems for land titling under development in Sweden and Japan.

In June, the United Nations unveiled a blockchain-based system built in partnership with Microsoft and Accenture that gives stateless refugees a permanent identity based on biometric data.

It’s also being explored for secure voting systems.

The blockchain-based app developed to track the supply chain of fish from Indonesia — Provenance — is now the basis of many other trials, including a project to create a similar system for the garment industry.

Online you can view the results of a pilot released in May this year that follows a piece of clothing — an Alpaca Mirror Jumper from London-based designer Martine Jarlgaard, from a farm in Dulverton, Britain, through every step of production into London with location, content and timestamps.

It is a long way, though, from realizing that something can be done to actually making it happen, DiCaprio of R3 said.

“The technical capability to do this exists in most developing countries,” she said. “You have engineers who can code on the blockchain. But the understanding of how to actually implement this from a business point of view is very poor.”

DiCaprio estimates it will take about five years before we actually see large-scale functioning applications and believes the most impactful will occur at the macro economic level.

“So for example one area that it’s moving very quickly is trade finance,” she said. “And trade finance, you’re generally talking about fairly large companies, generally in Asia mostly exporting or importing from or to the US or EU,.”

Faster, cheaper and more transparent transactions combined with reductions in the risks of lending and borrowing would flow to down to the village level, she added.

Subversion vs centralization

Blockchain proponents are divided by some sharply divergent values. Some see blockchain — whose slogan is “be your own bank,” as technology that can fundamentally upend a global financial system they believe is intractably corrupt.

“There is a serious opportunity for us here to remove money out of government,” said a Southeast Asia based bitcoin trader who would only give his alias FlippingABitCoin, fearing he could expose himself to physical theft.

Billions of people currently excluded from the formal banking system will be able to access global cryptocurrencies with no middle man using nothing more than a phone, he said.

“It will level out the playing field of power,” he said.

Another group of enthusiasts are encouraging the absorption of this technology by states, as demonstrated by Canada, Singapore, China and Germany, all of which are either exploring or conducting trials of their own central bank digital currencies using blockchain.

“In the long run, we believe if there is any threat at all to governments, it is that other governments will lead the way in adopting blockchain technologies in producing low-corruption, high-transparency, highly-secure digitized economic infrastructures that will attract business, investment and stakeholder confidence,” wrote Michael Hsieh, a non-resident affiliate at the Center for International Security and Cooperation at Stanford University, in an email.

“The societies who lead in the great fintech [financial technology] innovation race of the 21st century will siphon all the capital and productivity from those that lag,” he wrote.

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Washington Waits for Criminal Charges in Probe of Russia Links to US Election

Washington braced Monday for the potential unsealing of the first criminal charges linked to Russian interference in the 2016 U.S. presidential election, as President Donald Trump reiterated his stance that the underlying investigations are a “witch hunt.”

A federal grand jury on Friday approved charges in the probe led by special counsel Robert Mueller, according to several major news outlets that reported the indictment could be made public as soon as Monday.

There was no public indication of who is facing charges or what crimes are being alleged. Legal experts say the first charges could be against a peripheral figure in the case, with prosecutors using a common strategy to first build their case against lower level officials before focusing on more prominent people.

In addition to Mueller’s investigation, there are separate congressional probes into Russian meddling and possible links between Trump’s campaign and Russia.

The U.S. intelligence community concluded in early 2017 that Russian President Vladimir Putin personally directed a campaign to undermine U.S. democracy and help Trump win

Trump has insisted there was no collusion, including in a series of tweets Sunday in which he said Democrats and his election opponent Hillary Clinton are the ones who are guilty.

“The Dems are using this terrible (and bad for our country) Witch Hunt for evil politics, but the R’s [Republicans] are now fighting back like never before,” Trump wrote. “There is so much GUILT by Democrats/Clinton, and now the facts are pouring out. DO SOMETHING!”

He further blamed the Russia investigations for taking attention away from Republican efforts on tax reform.

“Is this coincidental? NOT!” Trump said.

Ty Cobb, a member of Trump’s legal team, said in a statement that Trump’s comments were not related to the developments in Mueller’s investigation.

“Contrary to what many have suggested, the President’s comments today are unrelated to the activities of the Special Counsel, with whom he continues to cooperate,” Cobb said.

Mueller is believed to be examining activities of two key Trump campaign officials, former national security adviser Michael Flynn, who was fired by Trump less than a month after he took office for lying to Vice President Mike Pence and other officials about his contacts with Russia’s ambassador to Washington, and Paul Manafort, who for a short time last year was Trump’s campaign manager and also had wide lobbying interests in Ukraine and links to Russia.

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Brazilian Crime Apps Help Citizens Stay Out of the Cross Fire

More than 50,000 people were killed in Brazil in 2015, which puts it on the list of the most murder-prone countries in the world. To protect themselves, Brazilians are crowd sourcing their safety, using cell phones to alert each other when violence breaks out. VOA’s Kevin Enochs.

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Rural US Areas Look at Innovative Ways to Connect to the Internet

More than 19 million Americans are still without home internet access…that according to the Federal Communication Commission. In Garrett County, Maryland, local leaders came up with an innovative plan to provide access to their community…VOA’s Lesya Bakalets reports on a creative approach to getting hard to reach customers on line.

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Trump Tax Overhaul Under Intensifying Fire as Congress Readies Bill

President Donald Trump’s plan for overhauling the U.S. tax system faced growing opposition from interest groups on Sunday, as Republicans prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes.

Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change for home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments.

Trump and Republicans have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6 trillion in tax cuts for businesses and individuals faces challenges even from rank-and-file House Republicans.

House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump’s desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year.

The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a $5,500 tax credit but says it was rebuffed by House Republican leaders.

“We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” NAHB chief executive Jerry Howard told Reuters.

Republicans warned that the Trump tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks.

“When groups start rallying against things and they succeed, everything starts unraveling,” Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation.

Anxiety in high-tax states

One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes (SALT), which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough House Republicans to stymie legislation.

The top House Republican on tax policy gave ground over the weekend, saying he would allow a deduction for some local taxes to remain.

“We are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” House Ways and Means Committee Chairman Kevin Brady said in a statement.

But the gesture appeared to do little to turn the tide of opposition to SALT’s elimination.

“I’m not going to sign onto anything until the full package is fully analyzed by economists,” Representative Peter King of New York told the Fox News program Sunday Morning Futures. “The fact that we’re getting it at the eleventh hour raises real issues with me,” he added.

A lobby coalition representing state and local governments, realtors and public unions rejected Brady’s statement outright, saying the move would “unfairly penalize taxpayers in states that rely significantly on income taxes.”

House Republicans have also faced opposition from Trump and others after proposing to sharply curtail tax-free contributions to 401(k) programs and move retirement savings to a style of account that allows tax-free withdrawals, rather than the tax-exempt contributions that are popular with 401(k) investors.

House Republicans now say they could permit higher 401(k) contribution limits but continue to talk about tax-free withdrawals. “We will expand the amount that you can invest. But we’ll also give you an option to actually not be taxed later in life,” House Republican leader Kevin McCarthy told Fox News.

The current cap on annual 401(k) tax-free contributions is $18,000.

Corker said congressional tax committees seem to be falling short of their goal to eliminate $4 trillion in tax breaks to prevent the Trump plan from adding to the federal deficit.

“They’re having great difficulty just getting to $3.6 trillion,” said the Tennessee Republican, who has vowed to vote against tax reform if it increases a federal debt load that stands at more than $20 trillion.

Ohio’s Republican governor, John Kasich, told Fox News Sunday that spending on entitlement programs such as Medicare, Medicaid and Social Security should also be reviewed as part of the effort to pay for tax cuts.

“It may be separate from the tax bill, but it needs to happen,” Kasich said.

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Washington Abuzz Over Reported Charges in Russia Probe

Washington is abuzz over news reports a grand jury has approved the first charges stemming from the special counsel’s probe of Russian meddling in last year’s U.S. election. VOA’s Michael Bowman reports, the exact charges and who stands accused of wrongdoing could be revealed at any moment.

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