(CNN)Federal
prosecutors in New York are weighing criminal charges against former
Obama White House counsel Greg Craig as part of an investigation into
whether he failed to register as a foreign agent in a probe that is
linked to former Trump campaign chairman Paul Manafort, according to
sources familiar with the matter.
In
addition, these sources said, prosecutors in the US Attorney's Office
for the Southern District of New York are considering taking action
against powerhouse law firm Skadden, Arps, Slate, Meagher & Flom
LLP, where Craig was a partner during the activity under examination.
Prosecutors are considering a civil settlement with the firm or a
deferred prosecution agreement with Skadden, these sources said.
An
attorney for Craig, who left the Skadden firm in April and who was
White House counsel under President Barack Obama during the first year
of that administration, said his client "was not required to register
under the Foreign Agent Registration Act." A spokeswoman for Skadden
didn't respond to a request for comment.
A
deferred prosecution agreement is an agreement not to prosecute an
entity as long as the defendant complies with the conditions of the
agreement, and in many cases it dictates that the defendant must commit
no new crimes for its duration. The charges in the agreement are then
dropped at the end of the period.
The
investigation involving Craig and Skadden was referred to federal
prosecutors in New York earlier this year by the office of special
counsel Robert Mueller, CNN reported in August.
Prosecutors
at the US attorney's office have notified the Department of Justice of
the options under consideration, the sources familiar with the matter
said. Prosecutors, however, haven't concluded that they have adequate
evidence to bring the possible charges, these sources said, and as a
result haven't made a determination about whether to proceed.
Any
action against Craig or Skadden would be an extraordinary step, given
Craig's prominence and Skadden's position as one of the largest and most
prestigious law firms in the country.
The
investigation pertains to whether Craig improperly performed lobbying
work on behalf of a group associated with Ukraine without registering
with the Justice Department as a foreign agent. Federal law requires
that an entity representing a foreign political party or government file
public reports detailing the relationship under the Foreign Agents
Registration Act, or FARA.
The
inquiry into Craig and Skadden is closely linked to a case against
Manafort, and details about Skadden's work in the matter were disclosed
in superseding criminal charges filed Friday by Mueller's office against
Manafort. Manafort pleaded guilty Friday to one count of conspiracy
against the US and one count of conspiracy to obstruct justice due to
attempts to tamper with witnesses, and he agreed to cooperate with the
federal government.
According
to the filing, which charged only Manafort, in 2012 Manafort
"solicited" a law firm on behalf of the then-president of Ukraine,
Viktor Yanukovych, and the Ukranian government's Ministry of Justice.
The firm, which was Skadden, according to people familiar with the
matter, was hired to write a report on the trial of Yulia Tymoshenko,
the former prime minister of Ukraine and political rival of Yanukovych.
In
advance of the report's official release, "Manafort arranged to have
the law firm disseminate hard copies of the report to numerous
government officials, including senior United States executive and
legislative branch officials," the filing says. The partner who worked
on the report -- according to court proceedings in another related case,
that of former Skadden lawyer Alex van der Zwaan -- was Craig, CNN has
reported. Van der Zwaan, pleaded guilty in February to lying to the
special counsel's office, admitting that he misled investigators about
his discussions related to Skadden's work for Yanukovych in preparing
the report.
According to the New
York Times, Craig himself was also involved in promoting the report to
members of Congress and the media, a step that may have triggered FARA
requirements.
Though FARA has an
exception for lawyers who are performing legitimate legal work on behalf
of a foreign client, it does require lawyers who attempt to influence
US government policy matters to register. "Lawyers engaged in legal
representation of foreign principals in the courts or similar type
proceedings, so long as the attorney does not try to influence policy at
the behest of his client, are exempt," according to Justice Department
guidelines.
The Manafort charges
filed Friday allege that "Manafort knew that the report also did not
disclose that the law firm, in addition to being retained to write the
report, was retained to represent Ukraine itself, including in
connection with the Tymoshenko case and to provide training to the trial
team prosecuting Tymoshenko."
More
than $4.6 million was paid to Skadden for its work, the charges say,
and Manafort took steps to mask the sum of the fees, because "Manafort
and others knew that the actual cost of the report and the scope of the
law firm's work would undermine the report's being perceived as an
independent assessment and thus being an effective lobbying tool for
Manafort to use to support the incarceration of President Yanukovych's
political opponent."
In addition to
the referral involving Craig, Mueller's team of prosecutors earlier
this year referred inquiries to New York prosecutors involving possible
FARA violations by longtime Democratic lobbyist Tony Podesta, formerly
of the firm the Podesta Group, and former Minnesota Republican Rep. Vin
Weber, a partner at Mercury Public Affairs, CNN has reported, citing
people familiar with the matter.
"For more than a year now, we have fully cooperated with the (special counsel). For example, we waived attorney- client
privilege so the government could see the full exchange we had with our
expert FARA lawyers over the two years of this project to provide full
transparency into the decision-making process," a Mercury spokesman said
in a statement.
"In April 2012, as
the project which we were engaged to work on was just getting started,
we prepared a FARA registration and wrote the check for the registration
fee. However, we were advised by our FARA lawyers to file (a lobbying
disclosure) instead, and we filed (lobbying disclosures) nine times. We
will continue to fully cooperate with the government if requested."
It's
unclear whether federal prosecutors in New York are moving forward on
the pieces of the case involving those two men and their firms. In the
Manafort charges filed Friday, prosecutors allege that employees of the
two firms knew they were working for Ukranian politicians and not an
independent non-profit group. The Podesta firm had previously said it
didn't file under FARA because it had received certification from the
non-profit that it was not an arm of a foreign government or a foreign
political party.
Weber did not respond to a request for comment. A spokeswoman for Podesta declined to comment.
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