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With Craig Indictment, Mueller Probe Sends Ripples Through the Swamp

A former Clinton and Obama attorney was charged under Foreign Agents law for work done with convicted Trump campaign chair Paul Manafort on behalf of Ukraine.

Mark Wilson/Getty Images

The indictment of Gregory B. Craig, President Obama’s first White House Counsel, shows that while Robert Mueller’s investigation may be over, its effects continue to ripple outward across the nation’s capital. Paul Manafort’s prosecution was a wake-up call for Washington lobbyists, and Craig’s indictment is sounding the alarm for attorneys in a town full of them.

The case involves violations of the Foreign Agent Registration Act (FARA), the 1938 law designed to prevent covert foreign influence that was more honored in the breach until Mueller came along. Now, Manafort, Trump’s former campaign chairman, is headed off to prison for violating FARA during his lucrative years working for Ukraine’s president. And Craig, one of Washington’s most respected lawyers, is accused of lying to the Justice Department rather than admit that a Ukrainian billionaire paid his firm millions of dollars for work on behalf of the government of Ukraine. The indictment notes that the 74-year-old Craig did not want to register as a foreign agent “at least in part because he believed doing so could prevent him or others at the law firm from taking positions in the federal government in the future.”

The headlines will tell you that it’s the first time a prominent Democrat was charged in the Mueller investigation, a useless bit of score-keeping that implies Manafort worked with Craig out of some misguided act of bipartisanship. The truth is Ukraine attracted all sorts of Washington lawyers and lobbyists of all stripes who smelled money, including Tad Devine, chief strategist for Bernie Sanders’ 2016 presidential campaign, and Mark Penn, Hillary Clinton’s former strategist. Two others are under investigation for their work with Manafort in Ukraine: Tony Podesta, whose brother ran Hillary Clinton’s campaign and Vin Weber, a former Republican congressman from Minnesota. 

Manafort wasn’t so much interested in Craig’s political leanings as he was in Craig’s stellar reputation and his firm’s integrity, both of which were apparently for sale. Before he resigned his partnership at the venerable law firm of Skadden, Arps, Slate, Meagher & Flom last year, Craig’s name appeared on the list of the 100 the most influential lawyers in America at one of the country’s most prestigious firms. A graduate of Harvard and a member of the same Yale Law School class as Bill and Hillary Clinton, Craig’s clients have included former CIA director Richard Helms; Senator Ted Kennedy, in connection with the rape trial of his nephew; and Nobel laureate Alexander Solzhenitsyn. Craig was a protégé of the famed D.C. trial lawyer Edward Bennett Williams, known around Washington as “the man to see.”

For $4 million, Craig was willing to draft an “independent” report that justified the jailing of a former Ukrainian prime minister even though, as the indictment noted, Craig personally believed that the evidence of criminal intent was “virtually non-existent.” Manafort was pleased by the media reaction to the report. “People in Kiev are very happy,” the lobbyist wrote Craig. “You are ‘THE MAN.’”  

In a YouTube video posted late Thursday, Craig revealed that the firm’s work in Ukraine was funded by Viktor Pinchuk, a wealthy Ukrainian steel-pipe maker. According to the indictment, Pinchuk insisted that his role be kept a secret over Craig’s objections. In 2015, Pinchuk paid Donald Trump’s foundation $150,000 for a 20-minute appearance via video at a conference in Kiev, a contribution solicited by Trump’s former lawyer, Michael Cohen.

Craig’s attorneys said he is not guilty of any charge. “The government’s stubborn insistence on prosecuting Mr. Craig is a misguided abuse of prosecutorial discretion,” attorneys William W. Taylor III and William J. Murphy wrote in a statement issued Wednesday before the indictment was handed down. In a later statement, they noted that Craig “had no interest in misleading the FARA Unit because he had not done anything that required his registration.”

The driving force behind Craig’s prosecution is John C. Demers, the head of the Justice Department’s national security division, which oversees FARA. The indictment handed down Thursday by a grand jury in Washington came at the request of the Demers’ division, Craig’s attorneys said. (Federal prosecutors in Manhattan had investigated the case, the attorneys said, and decided not to pursue charges.) Demers said recently that a “big shift” is underway transforming FARA from a bureaucratic annoyance to “increasingly an enforcement priority.” One of Mueller’s former prosecutors, Brandon van Grack, has been brought in to run the Justice’s FARA unit. 

Speaking at an American Bar Association Conference last month, Demers used Craig’s case to deliver a subtle warning to Washington’s cozy law partnership culture.  The reason why Skadden was, as he put it, “on the hook” for its work it performed for Ukraine at Manafort’s behest was because the firm did something for Craig it would never do for one of its Fortune 500 clients. Skadden’s failure was “a lack of due diligence,” Demers said, a basic duty of lawyers that roughly translates to doing your homework.  

Skadden didn’t do its homework when it received a request from the Justice Department for information about its work in Ukraine. As the firm would later admit, it lazily relied on Craig’s “false and misleading” statements that conveniently left out, among other things, the fact that Skadden Arps was paid the $4 million from Viktor Pinchuk via an offshore account in the Russian money-laundering haven of Cyprus. (Didn’t anyone at Skadden notice, or does this sort of thing happen too frequently to raise concern? ) 

Earlier this year, Skadden entered a settlement agreement with the Justice Department that required it to disgorge all funds received in connection for its Ukraine work. Another former Skadden attorney, Alex van der Zwaan, served 30 days in prison after pleading guilty to lying to the FBI about his work on the report for the Ukrainian government. 

Demers, a former vice president and assistant general counsel at Boeing, seemed to take this personally. “It’s really remarkable especially for me coming from a large corporation where every inquiry from the government … is dealt with the utmost seriousness,” he said. “Only when you really felt like you had a command of the facts would you go and make a representation to the Department [of Justice] about what happened.”

That’s not what occurred at Skadden, which Demers traced back to one of the weaknesses inherent in a law firm: “a tendency to not investigate deeply enough in the face of an inquiry of this kind.” That’s a kind way of describing lazy, unprofessional behavior that borders on arrogance. At the end of the day, a law firm is an aristocracy. The lower-level associates slave away, while the partners trust each other as they jet off to Kiev to cut secret deals with mysterious Ukrainians. In his remarks last month in New Orleans, Demers closed with a warning. He was making this observation about law firm partnership culture “not so much really for your clients but for yourselves and your own protection.” 

Washington lawyers, beware.

This article has been updated to clarify that Alex van der Zwaan is a former attorney at Skadden, Arps, Slate, Meagher & Flom.