FBI, warned early and often that Manafort file might be fake, used it anyway

Editor’s note: John Solomon’s columns regarding Ukraine became a subject of the House Intelligence Committee’s impeachment inquiry against President Trump. Any updated information can be found at the end of the column.

When the final chapter of the Russia collusion caper is written, it is likely two seminal documents the FBI used to justify investigating Donald Trump’s 2016 campaign will turn out to be bunk.

And the behavior of FBI agents and federal prosecutors who promoted that faulty evidence may disturb us more than we now know.

The first, the Christopher Steele dossier, has received enormous attention. And the more scrutiny it receives, the more its truthfulness wanes. Its credibility has declined so much that many now openly question how the FBI used it to support a surveillance warrant against the Trump campaign in October 2016.

At its best, the Steele dossier is an “unverified and salacious” political research memo funded by Trump’s Democratic rivals. At worst, it may be Russian disinformation worthy of the “garbage” label given it by esteemed reporter Bob Woodward.

The second document, known as the “black cash ledger,” remarkably has escaped the same scrutiny, even though its emergence in Ukraine in the summer of 2016 forced Paul Manafort to resign as Trump’s campaign chairman and eventually face U.S. indictment.

In search warrant affidavits, the FBI portrayed the ledger as one reason it resurrected a criminal case against Manafort that was dropped in 2014 and needed search warrants in 2017 for bank records to prove he worked for the Russian-backed Party of Regions in Ukraine.

There’s just one problem: The FBI’s public reliance on the ledger came months after the feds were warned repeatedly that the document couldn’t be trusted and likely was a fake, according to documents and more than a dozen interviews with knowledgeable sources.

For example, Ukraine’s top anticorruption prosecutor, Nazar Kholodnytsky, told me he warned the U.S. State Department’s law enforcement liaison and multiple FBI agents in late summer 2016 that Ukrainian authorities who recovered the ledger believed it likely was a fraud.

“It was not to be considered a document of Manafort. It was not authenticated. And at that time it should not be used in any way to bring accusations against anybody,” Kholodnytsky said, recalling what he told FBI agents. 

Likewise, Manafort’s Ukrainian business partner Konstantin Kilimnik, a regular informer for the State Department, told the U.S. government almost immediately after The New York Times wrote about the ledger in August 2016 that the document probably was fake.

Manafort “could not have possibly taken large amounts of cash across three borders. It was always a different arrangement — payments were in wire transfers to his companies, which is not a violation,” Kilimnik wrote in an email to a senior U.S. official on Aug. 22, 2016.

He added: “I have some questions about this black cash stuff, because those published records do not make sense. The timeframe doesn’t match anything related to payments made to Manafort. … It does not match my records. All fees Manafort got were wires, not cash.”

Special counsel Robert Mueller’s team and the FBI were given copies of Kilimnik’s warning, according to three sources familiar with the documents.

Submitting knowingly false or suspect evidence — whether historical or to support probable cause — in a federal court proceeding violates FBI rules and can be a crime under certain circumstances. “To establish probable cause, the affiant must demonstrate a basis for knowledge and belief that the facts are true,” the FBI operating manual states.

But with Manafort, the FBI and Mueller’s office did not cite the actual ledger — which would require agents to discuss their assessment of the evidence — and instead cited media reports about it. The feds assisted on one of those stories as sources.

For example, agents mentioned the ledger in an affidavit supporting a July 2017 search warrant for Manafort’s house, citing it as one of the reasons the FBI resurrected the criminal case against Manafort.

“On August 19, 2016, after public reports regarding connections between Manafort, Ukraine and Russia — including an alleged ‘black ledger’ of off-the-book payments from the Party of Regions to Manafort — Manafort left his post as chairman of the Trump Campaign,” the July 25, 2017, FBI agent’s affidavit stated.

Three months later, the FBI went further in arguing probable cause for a search warrant for Manafort’s bank records, citing a specific article about the ledger as evidence Manafort was paid to perform U.S. lobbying work for the Ukrainians.

“The April 12, 2017, Associated Press article reported that DMI [Manafort’s company] records showed at least two payments were made to DMI that correspond to payments in the ‘black ledger,’ ” an FBI agent wrote in a footnote to the affidavit.

There are two glaring problems with that assertion.

First, the agent failed to disclose that both FBI officials and Department of Justice (DOJ) prosecutor Andrew Weissmann, who later became Mueller’s deputy, met with those AP reporters one day before the story was published and assisted their reporting.

An FBI record of the April 11, 2017, meeting declared that the AP reporters “were advised that they appeared to have a good understanding of Manafort’s business dealings” in Ukraine.

So, essentially, the FBI cited a leak that the government had facilitated and then used it to support the black ledger evidence, even though it had been clearly warned about the document.

Secondly, the FBI was told the ledger claimed to show cash payments to Manafort when, in fact, agents had been told since 2014 that Manafort received money only by bank wires, mostly routed through the island of Cyprus, memos show.

During the 2014 investigation, Manafort and his partner Richard Gates voluntarily identified for FBI agents tens of millions of dollars they received from Ukrainian and Russian sources and the shell companies and banks that wired the money. “Gates stated that the amounts they received would match the amounts they invoiced for services. Gates added they were always paid late, and in tranches,” FBI memos I obtained show.

Liberal law professor Alan Dershowitz said FBI affidavits almost never cite news articles as evidence. “They are supposed to cite the primary evidence and not secondary evidence,” he said.

“It sounds to me like a fraud on the court, possibly a willful and deliberate fraud that should have consequences for both the court and the attorneys’ bar,” he added.

Former FBI intelligence chief Kevin Brock was less critical. He said mentioning the ledger in an affidavit for its historical relationship to Manafort’s firing and the start of the investigation might be defensible, but any effort to use the ledger to support probable cause would be “puzzling” since it clearly was not needed to strengthen either affidavit and only risked tainting the warrant. He said it could raise questions about why the special counsel believed it necessary to refer to the ledger in the probable cause narrative.

In the end, the best proof that the FBI knew the black ledger was a sham is that prosecutors never introduced it to jurors in Manafort’s trial.

Rep. Mark Meadows, a senior Republican on the House Government Oversight and Reform Committee, told me Wednesday night he is asking the Justice Department inspector general to investigate the FBI and prosecutors’ handling of the Manafort warrants, including any media leaks and evidence that the government knew the black ledger was potentially unreliable or suspect evidence.

The question of whether the Mueller team should have used the ledger in search warrant affidavits before that is for the courts to decide.

But the public has a substantial interest in questioning whether, more broadly, the FBI should have sustained a Trump-Russia collusion investigation for more than two years based on the suspect Steele dossier and black ledger. 

Understandably, there isn’t much public sympathy for foreign lobbyists such as Manafort. But the FBI and prosecutors should be required to play by the rules and use solid evidence when making its cases.

It does not appear to have been the prevailing practice in the Russia collusion investigation. And that should trouble us all.

John Solomon is an award-winning investigative journalist whose work over the years has exposed U.S. and FBI intelligence failures before the Sept. 11 attacks, federal scientists’ misuse of foster children and veterans in drug experiments, and numerous cases of political corruption. He serves as an investigative columnist and executive vice president for video at The Hill. Follow him on Twitter @jsolomonReports.

Editor’s note: This article was updated with new information.

Editor’s note: At the time of this column, Nazar Kholodnytsky, who is quoted in this column, was under investigation. On Jan. 29, the probe was closed.

This post was updated at 7:25 AM on Feb. 19, 2020.