This week’s indictment of former Donald Trump campaign manager Paul Manafort is certainly serious in that more than $18 million dollars were money laundered, tax laws were circumvented on as much as $75 million in total income and lobbying for the Ukrainian government was deliberately concealed. Manafort and his business associate Rick Gates also lied to investigators to “defraud” the Treasury of taxes due, which resulted in a charge that he had “conspired against the United States.” But it is important to note that the principal charges against Manafort appear to date from before his connection to the Trump campaign and Donald Trump is not mentioned at all in the 31-page indictment.
Also, there is no evidence of collusion with any foreign government to interfere in the 2016 American election, which was what Special Counsel Robert Mueller was originally empowered to focus on. Nor is there any suggestion that Manafort attempted to influence Donald Trump’s views about an appropriate policy in dealing with Russia as well as the unrest in Eastern Europe. So those who were looking for a “smoking gun” against the Trump Administration in the indictment of Manafort will surely be disappointed.
In fact, tax evasion is not that uncommon involving Americans if one is moving in circles that have significant income coming from foreign sources or even domestic income that is “off the books” and somehow not reported to the Internal Revenue Service (IRS). That is why tax havens exist in such large numbers on Pacific and Caribbean islands as well as in places like Panama, the Seychelles and Cyprus. The numerous wealthy individuals who rely on havens to keep assets offshore and away from the tax authorities are rarely investigated or caught and it is unusual to hear of a wealthy American being prosecuted by the IRS. Manafort, for example, would not have been investigated and indicted but for the fact that he was caught up in the so-called Russiagate scandal, which meant that all of his business dealings were examined much more closely than normal.
The issue of acting as an agent of a foreign government is more complicated, but it also comes down to who is involved with what country and when. Technically, anyone who takes money to act on behalf of a foreign government is required to register under the Foreign Agents Registration Act (FARA) of 1938. But there have been numerous instances of congressmen taking money from foreign interests to promote favorable legislation without any consequences. Most recently, former speaker of the House of Representatives Dennis Hastert was accused of taking money from Turkish sources. When he retired from Congress, he became a registered lobbyist for Turkey, but he had clearly crossed the line into Turkey-advocacy while he was still in office.
Countries like Israel and Saudi Arabia have also been active in lobbying without their local agents necessarily being registered. Israel in particular has the most powerful foreign policy lobby in Washington, the American Israel Public Affairs Committee (AIPAC). It promotes Israeli government policies on Capitol Hill and with the White House, but, apart from an attempt made by the John F. Kennedy Justice Department in 1962, it has never been compelled to register precisely because it is so powerful. It has an annual budget of more than $70 million and three hundred employees, so its lobbying on behalf of Israel is constant, done openly and carried out at the highest levels of government.
Manafort, lobbying for what is regarded in Washington as a Russian-surrogate regime in Kiev in an atmosphere that is very hostile to Moscow, would not have the institutional protection that countries like Israel and Saudi Arabia would enjoy. It is certain that the Russian angle will be exploited in the Grand Jury proceedings and it is likely that Manafort will be punished to the full extent of the law for his failure to register as a foreign agent. I imagine that Manafort’s lawyers will point out the hypocrisy and lack of consistency in the enforcement of FARA due to powerful interest groups, but no one will be listening.