The work that drew the Justice Department's attention occurred in 2012, when Craig and his law firm at the time — Skadden, Arps, Slate, Meagher & Flom — were engaged by the government of Ukraine to review the prosecution of Yulia Tymoshenko, a former Ukrainian prime minister, and produce a report on whether the trial met Western standards of justice. Tymoshenko was a political opponent of then-Ukrainian President Viktor Yanukovych, a longtime Manafort patron and a political figure whom Gates said he and Manafort had helped get elected.
The report was billed as independent, but critics have said it whitewashed a politically motivated prosecution, and Gates acknowledged on the witness stand that the document was conceived as a way to counter international criticism that Tymoshenko had been denied a fair trial. Prosecutors have also said the project was part of an effort by Ukraine to improve its international standing.
Gates testified that Manafort arranged for the hiring of Skadden to prepare the report, and said he served as an intermediary for the firm and worked with Craig on a publicity plan for the document. That included giving an embargoed copy to New York Times reporter David Sanger.
Though the article "was not the greatest," it was at least viewed "neutrally" and helped inform other coverage, Gates said. Overall, Gates said he considered the strategy a success given the credibility he believed was associated with the publication and the reporter.
"From our standpoint, the success of it was very great," Gates said.
When a prosecutor asked whether Craig had carried out the role he had committed to with regard to The Times, Gates answered, "Yes, he did."
An email from Manafort to Craig stated: "The pro has emerged again. The initial rollout has been very effective and your backgrounding has been key to it all. At least today, everyone in Kyiv is quite happy."
Craig, who has called the prosecution unprecedented and unjustified, did not register his work with a Justice Department unit tasked with enforcing the Foreign Agents Registration Act. Prosecutors said he resisted registering because it feared it would prevent him or others at the firm from getting federal jobs in the future, and because he believed doing so would have meant disclosing that a third-party had paid more than $4 million for the report.
The FARA law, enacted in 1938 to unmask Nazi propaganda in the United States, requires people to disclose to the Justice Department when they advocate, lobby or perform public relations work in the U.S. on behalf of a foreign government or political entity.
Though prosecutors have not charged Craig with failing to register, they said he gave misleading information when the Justice Department's FARA unit contacted the firm about the work and whether it required registration.
Earlier this year, the law firm itself paid more than $4.6 million and publicly acknowledged it had failed to register with the government for its work for the Ukraine.
Craig was charged in April in a two-count indictment, but the judge overseeing the case dismissed one of the charges before trial.
Craig's lawyers deny that he lied to the government or his law firm. They acknowledged that Craig spoke to reporters about the report but denied it was part of a public relations campaign that would run afoul of the law.
During cross-examination, defense lawyer Paula Junghans sought to distance Craig from Gates and tried to cast doubt on the idea that her client was doing the bidding of the Ukraine government.
She showed excerpts from the report that pointed to serious problems with the Tymoshenko trial, part of the defense team's argument that the document's conclusions were actually harmful — not favorable — to the client's interest.
One excerpt said: "Under Western standards, we find that the decision to detain Tymoshenko for the entire balance of her trial and after the trial had concluded — until sentencing — without adequate justification or review raises concerns about whether she was inappropriately deprived of her liberty prior to her conviction."
In addition, Junghans sought to undermine Gates' credibility by noting the wide-ranging tax and financial fraud conspiracy he admitted to last year, and the fact that prosecutors agreed not to charge him with certain conduct in exchange for his cooperation.
"You've committed quite a few (crimes), haven't you?" Junghans asked.
"Yes," Gates replied.
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