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 HOW TRUMP'S CAMPAIGN CHIEF GOT A STRONGMAN ELECTED PRESIDENT OF UKRAINE

Person who masterminded ousted Ukriane's President Yanukovych’s unlikely political comeback in 2007 was an American Paul Manafort – previously a consultant for Ronald Reagan, George HW Bush and Bob Dole, and today the campaign chairman for Donald Trump.

The scene was Ostroh, western Ukraine, on the eve of parliamentary elections.

A tall figure bounded on to a stage to cheers from a crowd of elderly flag-waving supporters. They chanted: "Yan-u-kov-ych, Yan-u-kov-ych."

The man addressing them was Viktor Yanukovych, who at this point - autumn 2007 - was Ukraine's pro-Russian prime minister. Three years earlier he had tried to cheat his way to victory in the country's presidential election, triggering the pro-democracy uprising known as the Orange Revolution, which swept Yanukovych's rival Viktor Yushchenko into power.

Now, barely three years later, Yanukovych was back, and his Party of Regions was ahead in the polls.
The person who masterminded Yanukovych's unlikely political comeback was not - as might have been expected - a Russian, like the advisers dispatched by Vladimir Putin to mastermind Yanukovych's disastrous 2004 presidential bid.

It was an American, and his name was Paul Manafort - previously a consultant for Ronald Reagan, George HW Bush and Bob Dole, and today the campaign chairman for Donald Trump.

Manafort's years in Ukraine have come under renewed scrutiny during the current US presidential campaign. On Monday, Hillary Clinton's campaign leapt on a report in the New York Times that handwritten ledgers found in the Ukraine show $12.7m in undisclosed payments to Manafort from the Party of Regions.

"This is a serious matter and there are real concerns about the pro-Kremlin interests engaged with the Trump team," said Clinton's campaign manager, Robby Mook.

Manafort has denied any wrongdoing. A source who worked with him in Ukraine said on Tuesday: "If there was cash I would have known about it and seen it. I was going in and out of the Party of Regions HQ every day."

Even before the latest allegations, Trump's links to Russia have raised eyebrows: Manafort's candidate has expressed admiration for Putin, encouraged Russia to hack Hillary Clinton's emails, and appeared unaware that Russian troops had seized the Ukrainian peninsula of Crimea.

Meanwhile, the Trump campaign was reportedly instrumental in rewriting the new Republican platform to remove calls for the donation of weapons to Ukraine to fight Russian and rebel forces.

It remains unclear how much of this was down to Manafort. What is indisputable is that at the same time as he was advising Yanukovych, Manafort was also building personal business links with some of the most powerful figures in the post-Soviet world.

Before his arrival in Kyiv, Manafort had long specialised in taking on unsavoury clients, such as Ferdinand Marcos, the Filipino dictator, and Mobutu Sese Seko of Zaire, and subtly retooling their public reputations.

He was recruited to work in Ukraine in the summer of 2005 by the oligarch Rinat Akhmetov - the main financial backer of Yanukovych's Party of Regions.

That autumn, Manafort and his team - including longtime aide Rick Gates, another future Trump hire - began work for the Party of Regions. They rented an anonymous office at number 4 Sophia Street in Kyiv, opposite the stop for the 16 and 18 trolley buses. Typically, its white blinds were drawn.
The Americans kept a low profile, but Manafort's efforts didn't go entirely unnoticed. In a 2006 cable to the state department in Washington, US diplomats reported that the Party of Regions had undergone a mysterious transformation. "Long a haven for Donetsk-based mobsters and oligarchs it is in the midst of an 'extreme makeover'," they observed.

The party had enlisted "help and advice from veteran K street political tacticians", the diplomats said, referring to Washington DC's lobbying district. Manafort's firm - Davis, Manafort & Freedman - was busy "nipping and tucking". Its goal was to rid the party of its gangster image and to change it into a "legitimate political force".

I met Manafort in September 2007, on the eve of the Ostroh rally. This was just before the parliamentary elections, and Yanukovych was frantically touring the regions on a campaign helicopter.

Close up, Manafort looked every inch the classic Washington lobbyist. He wore an expensive suit and tie and exuded seriousness. He also bore a faint physical resemblance to his client - even their hairstyles were similar. (Manafort, I was told later, had instructed Yanukovych to blow-dry his hair. Manafort's camp denies this.)

The American had an interesting story to tell - one which may sound familiar to observers of Donald Trump's campaign - of how his candidate had been almost wilfully misunderstood by the west, especially by its media.

The new Yanukovych was nothing like the old one, Manafort suggested. He had absorbed the lessons of his previous defeats, was studying English - and was even playing tennis with the US ambassador.

"People are still looking at the political system in this country through the prism of 2004," Manafort told me. "That's not at all the situation here."

Yanukovych was no puppet of Putin, Manafort said; he wanted a pragmatic foreign policy - good relations with Russia and the EU.

"As a person, he [Yanukovych] is growing," Manafort assured me. "I think the time out of power helped him."

Manafort introduced professional techniques. He gathered polling data, worked on messaging and distributed talking points. His efforts were at least partially successful: Yanukovych's Party of Regions won the 2007 parliamentary elections, and in 2010 Yanukovych beat his rival Yulia Tymoshenko in a presidential runoff. Within a few months, it had become clear that he was hellbent on reversing the modest democratic gains of the Orange Revolution.

Yanukovych moved quickly to consolidate all instruments of power: the courts, parliament, the prosecutor's office, the media and TV. Tymoshenko was charged with corruption and jailed; Yankovych repeatedly shrugged off western calls for her release.

In late 2013, Yanukovych was due to sign an association agreement with the European Union, but at the last minute he dumped the plan and instead accepted a $15bn Kremlin bailout.

Pro-EU demonstrators flooded the Maidan, Kyiv's main square, and protests turned violent after a brutal crackdown by security forces.

In February 2014, riot police shot dead 100 people in downtown Kyiv. Yanukovych abandoned his palace on the outskirts of town, Mezhyhiria - a Versailles of sorts with a pirate-themed restaurant and private zoo - and escaped to Russia.
Putin exploited this crisis to seize Crimea and launch a covert military invasion of eastern Ukraine. The consequences - 10,000 dead, a civilian jet shot down, a country chopped up - haunt the region to this day. Earlier this month, Russia claimed Ukrainian agents had attacked Crimea, further fueling tensions in the region.

Those who worked with Manafort say that he cannot be blamed for the Ukrainian disaster. Oleg Voloshin, a former aide to Kostyantyn Gryshchenko, Yanukovych's 2010-12 foreign minister who now works as a political consultant, says Manafort urged Yanukovych to press ahead with the EU integration agenda.

Voloshin still has ties with the ex-Party of Regions, which Manafort rebranded in 2014 as the Opposition Bloc. (Manafort's consultancy in Ukraine continued until at least parliamentary elections in 2014.)

He suggests that Yanukovych "listened to what Paul said" between 2007-2010, but then, once he became president, stopped listening - with catastrophic results.

Manafort's advice was always non-ideological, Voloshin recalls. He would calmly explain: "These people won't vote for you, don't bother with them," and then suggest he "promote this message, promote that message". "It was a very American approach. Do this, do that." And, crucially: "He was the person dragging Yanukovych to the west."

According to Voloshin, Manafort was an advocate of US interests and promoted American oil companies such as Chevron - so much so that the joke inside the Party of Regions was that Manafort was actually from the CIA. "You can blame him for whatever. The only thing you can't blame him for is lack of will in lobbying for American interests in Ukraine in the commercial sphere."

Voloshin insists that it was Manafort who persuaded Yanukovych to press ahead with the EU integration agenda, arguing that it would counter Yanukovych's sagging ratings. Manafort also strongly objected to Tymoshenko's imprisonment, telling Yanukovych bluntly: "You are going to have very bad times with the west."

"It's not Paul's fault that Yanukovych didn't listen to him. If it weren't for Paul, Ukraine would have gone under Russia much earlier," Voloshin claims.

During the period that he was advising Yanukovych, Manafort's interests in the post-Soviet world were not restricted to politics.

In 2007, he set up a private equity firm called Pericles Emerging Partners LP.

Based offshore in the Caymans, the firm had three American partners - Manafort, Rick Gates and Rick Davis. Davis had cofounded Davis Manafort, Manfort's lobbying company in Delaware. The new firm's aim was to make investments in the Ukrainian cities of Kyiv, Odesa and Mariupol. It would acquire small companies, consolidate them into larger national enterprises, then sell them on.

One of those tempted by this prospectus was the Russian oligarch Oleg Deripaska, an aluminum baron and close friend of Putin, who stumped up almost $19m. Gates, Manafort's right-hand man, sealed the agreement in trips to Moscow.

What happened next was strange indeed. Only one investment by Pericles was ever made, in a Ukrainian telecoms company called Black Sea Cable. According to court documents, the cash was funnelled into various offshore companies, including one called CardMan ImpEx Corp, registered in the tax haven of the British Virgin Islands. The trail wound through other opaque shell firms, including Cascado AG, set up by the Panamanian law firm Mossack Fonseca.

A search of the Panama Papers leak gives a few details. Cascado has two Latvian directors, Erik Vanagels and Stan Gorin. In reality, they are mere nominees. The pair have been linked on paper to a network of offshore companies and multimillion-dollar scams involving Ukrainian state assets.

When the global financial crisis hit in 2008, Deripaska wanted out - and his cash back. In 2011, the Americans emailed to say that it was proving tricky to sell Deripaska's stake because of "market conditions". Further emails went unanswered.
"It appears that Paul Manafort and Rick Gates have simply disappeared,"Deripaska's frustrated lawyers wrote, in a 2014 petition to have Manafort's firm wound up.

It's unclear if Deripaska ever got his money. Either way, the episode illustrates Manafort's personal links to figures close to Putin.

Later, Manafort introduced Deripaska to Senator John McCain, when the oligarch was having problems travelling to the US. (In 2006, the US had revoked Deripaska's visa, citing alleged "criminal associations". Deripaska denies the allegation, and his visa was subsequently reinstated.)

This wasn't the only embarrassing legal scrape arising from Manafort's capitalist adventures. In November 2011, Tymoshenko unsuccessfully sued him and several of her political opponents in the district court in New York. Her lengthy writ alleged that Manafort "played a key role in [a] conspiracy and racketeering enterprise" to launder cash for Yanukovych's oligarch friends and invest it in New York real estate.

In particular, she pointed the finger at Dmitry Firtash, a Ukrainian businessman whose generous contributions helped Yanukovych. Firtash is a shareholder and public face for RosUkrEnergo, an intermediary company co-owned by Gazprom, which imports gas from Russia and resells it to Ukraine. Tymoshenko tried unsuccessfully to get rid of it.

The RusUkrEnergo scheme was a mechanism for corruption, she alleged in legal filings. Its real owner, she claimed, was Semyon Mogilevich, a Ukrainian-Russian mobster, and one of the FBI's top fugitives. Firtash denies this.

According to her writ, Firtash and his companies and associates were able to skim billions of dollars from gas transactions. The cash was laundered "through a labyrinth of shell companies". It was then returned to Ukraine, with the money used to bribe Ukrainian officials.

"Defendant Paul J Manafort is a well-known Washington D.C. lobbyist and political consultant. He is the senior partner in the firm Davis, Manafort and Freedman. Manafort also worked in Ukraine on various political campaigns, including the successful 2010 presidential campaign of Victor Yanukovych, who is the president of Ukraine at present. Manafort played a key role in the defendants' conspiracy and racketeering enterprise," the writ said.

Firtash, who declined to be interviewed for this article, denies the claims. In 2014, a federal judge threw out Tymoshenko's lawsuit, saying that she had failed to show that Firtash and other defendants had laundered money in the U.S to help pay off Yanukovych's supporters in Ukraine. The judge also said the allegations were outside US jurisdiction.

That same year Firtash was arrested on a US warrant in Vienna, accused of bribing Indian officials over a titanium deal. But an Austrian judge denied a US extradition request and agreed with Firtash that it was politically motivated. The US is appealing, and Firtash remains in Austria.
Firtash did invest money in Manafort's real estate projects, however. The two met in 2008. Manafort's plan was to buy the site of the demolished Drake Hotel in Manhattan and to redevelop it at a cost of almost $900m. Firtash transferred at least $25m to the project. Tymoshenko alleged that the plan was never serious, with the cash merely transferred for the purposes of money laundering.

"Group DF and Firtash never had any intention to purchase the Drake property, but instead used the real estate project as a vehicle for investing $25 million in New York bank accounts," her writ stated.

Manafort did not respond to a request by the Guardian for comment on Deripaska's loan or the Drake Hotel allegations.

In the run-up to November's vote, Trump's own real estate transactions have been extensively investigated, but it remains unclear if any Russian cash has actually been leveraged in these deals.

In a statement on Monday, Manafort denied that he had received any irregular payments in Ukraine. "The simplest answer is the truth: I am a campaign professional. It is well known that I do work in the United States and have done work on overseas campaigns as well. I have never received a single 'off-the-books cash payment' as falsely 'reported' by The New York Times, nor have I ever done work for the governments of Ukraine or Russia."

But Manafort's critics in Kyiv are scathing. "He's an evil genius," Alex Kovzhun, who spent a decade working for Tymoshenko, beginning in 2001, said. "He doesn't work statesmen. He works dictators and all-round bastards. He sells the unsellable product. If you have a dead horse and you need to sell it, you call him.
"He works bad guys. They pay more, of course."

Manafort's specialism, according to Kovzhun, is running expensive campaigns and targeting the "great unwashed".

"It's the same element who voted for Putin, supported Brexit, back Erdoğan and who will vote for Trump. Manafort works the lowest common denominator. I find him repulsive and his message ugly. He leaves destruction in his wake."

Kovzhun said he recognised the same "moves" in Manafort's campaigns for Yanukovych and Trump. He gets his clients to do "corny stuff", Kovzhun added, with "bland political slogans" and "uncreative Soviet-style imagery". "With Yanukovych it was: 'I'll hear everyone.' With Trump, it's: 'Make America great again.'"

In contrast, Voloshin portrays the decade Manafort spent in Ukraine as a success. "In 2004, Yanukovych was seen as a Russian puppet. He was dead. Paul resurrected him."

Can Manafort work his magic one more time? "The tougher the client you have, the the greater success you get. It isn't about the money. It's about ambition. If he can make Yanukovych president, I'm sure he can do it with Trump."

Luke Harding, The Guardian
 
 
 
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