I'm Kelly Evans host of CNBC's be exchange. Which is now a podcast subscribe today. It's your one stop shop for the day's top business stories. Plus listen in for lots of original reporting in depth conversation and some of the best of CNBC's award winning investigative work. Subscribe to the Exchange for free and you can always catch the exchange live weekdays at one. Pm Eastern only on CNBC. So you then. This is the American greet podcast presented by CNBC. I'm Stacey in this episode of American greed. Paul Metaphor. You've heard about the extravagant clothes gear. Is We submit to you. The Ostrich Code in question we submitted to you without comment. Now meet the lie. I will stipulate person today that you could characterize this is influenced butter for years influence peddler Paul Manafort Bill high-profile connection then makes tens of millions of dollars. Something is access to the players. Charged Manafort was motivated primarily by two things power and money. I struggle to think of a client. Manafort wouldn't have taken on after decades in DC metaphor uses his political savvy and insider connections to earn the biggest payday of his career from pro Russian oligarchs in Ukraine. It was definitely in their interest to make sure they had the right people with the right connections in power but after making millions and illegally hiding as well manafort loses it all so what he did he just lied and has ever to hit himself to a rising star leads to the exposure of a massive bank and tax fraud scheme. It's very sad what's happened to fall the way he's being traded in two thousand sixteen presidential candidate. Donald trump makes waves promising to clean up American politics. We are going to Washington. Dc and we are going to drain the swamp that Spring to hope to cure. His party's nomination. The outsider candidate turns to a big time. Washington insider Paul Manafort. Ken Bogu is a reporter for the New York Times. There's a lot of irony in the trump manafort connection not the least of which is a candidate who's running as a climber. Party's platform on draining. The swamp has just hired to run his campaign. The ultimate swamp creature metaphors path to the trump campaign begins years earlier in an industrial town. Not Far from Hartford Connecticut Paul Manafort. I became enamored with politics at his father's knee. His Dad ran for and won the mayorality of new Britain Connecticut. Their home town. Franklin fourer is a staff writer for the Atlantic is Dad was a was a guy who practice a very hard style politics but new Britain was also a place that was filled with corruption. Palma for his father was accused and even charge with perjury but never convicted and had a road named bathrooms kind of a hero in his hometown. So certainly possible that the sun would conclude that you can walk right up to the end of the line without paying the penalty in the late nineteen sixties metaphor leaves new Britain for Washington. Dc Very attends Georgetown University while many members of his generation celebrate peace and love. He's pictured in the school yearbook flashing V-for-victory Son and apparent celebration. The nineteen sixty eight election. Victory up Richard Nixon after Nixon's resignation in nineteen seventy four manafort than a lawyer serves in the White House under his successor. President Gerald Four Paul Manafort even in those early days showed signs of becoming the master. Strategist that you would eventually fully realize you just this shrewd operator. Who understood how to get the head of somebody to figure out what they wanted and how he can deliver it to them after helping four defeat robber Reagan for the GOP nomination in nineteen seventy six metaphor. Works on Reagan's presidential campaign. Four years later the south will be targeted. We'll get specialized media. We will carry the Reagan record to the south particularly He kind of went where he saw an opening and by the time he was I getting evolved professionally around Reagan. That was the hot thing. In American politics it turns out to be a good bit in this present crisis. Government is not the solution to our problem. Government is the problem out of Ronald Reagan's nineteen eighty camp in Washington suddenly flooded with Republicans. Who'd been out of power for several years and they had this new power in town but nobody had figured out how to really capitalize on power. Manafort will lead the charge on K. Street DC's lobbying center in one thousand nine hundred eighty. He teams up with two other. Reagan Campaign Veterans Charlie Black and Roger Stone who will later worked for the trump campaign together. The three men form political firm with an innovative to part business marble. They were electing people who'd established intimate relationships with and then they would turn around and ask them for favors on behalf of corporate clients and this was an incredible advantage and it made them a fortune. The firm's principles bring in six figure salaries representing big-name domestic clients including a high powered New York real estate developer name Donald Trump manafort ran affirm that blew up based on a reputation for getting things. Done if you're a lobbyist you're going to be effective some of the time you're going to be effective. Maybe not all the time but the important thing is to create the perception of power and Manafort was a master of that. The way he creates. This perception is partially spelled out in a company pitch obtained by NBC News. In one thousand nine hundred ninety eight but document lists the close political ties that key members of the firm had in the Reagan administration and it promised that personal relationships with Department of State officials would be utilized to upgrade a back channel relationship. What they're doing is legal. Some considered questionable some of the old guard in Washington. Dc turned up their noses at what blackstone and Manafort were doing and they saw it as really unseemly they were breaking all sorts of norms. They were creating all sorts of new conventions for Washington. And I think it's even possible to say that through their firm Paul Manafort and his crew did a lot to create the swamp if you will as we know it over the decades that he works in Washington Paul Manafort becomes a behind the scenes master of crafting politicians images. When you set up here with all this gadgetry no because Amb where we'd have curtains on the front of the window but in this world power and money. It's not just American politician and American lobbying clients who turned to him for help. The definitely is this is before Paul Manafort of lobbyists working on behalf of scuzzy foreign governments but nobody had made it a cottage industry in quite the same way that Paul Manafort did he basically went out and found all manner of folks with unsavory reputations. Who are willing to pay huge psalms in order to try to buff their reputations and improve their standing in Washington. The word is not without controversy. The Prime Minister of the Bahamas Lynden thinly and key officials of his government have long been described in reports of American drug agents as receiving huge payoffs from big time Colombian and American drug bosses but in Nineteen eighty-four Washington. Lobbying firm run by these men. All of whom are now key advisers in the Bush campaign went to work for the pindling government at eight hundred thousand dollars a year when these reports I surface manafort's partner. Charlie black denies any wrongdoing. Saying the firm would never work for a foreigner whose interests are at odds with those of the United States. But other bad press will follow in Nineteen Ninety-two Manafort's firm then called black manafort stone and Kelly features heavily in the torturers lobby published by the center Republican Teddy. This report outlines the company's work on behalf of questionable foreign clients said to receive US aid and abuse human rights. That's certainly an argument to be made. That manafort was kind of the angel on the shoulder of some of these arguably very bad people that he was trying to get them to embrace democratic tactics and strategies but also democracy that certainly manafort and his allies saw manafort's detractors say that's a bunch of bull it's possible to know who manafort's firm works for who they lobby and how much they make because of a law called the foreign agents registration there or Farah created in the nineteen thirties. Think this is right in Madison Square Garden. Usa This a strict Cuban leader german-american hiding behind the American flag artist. Berlin the Foreign Agents Registration Act was enacted in nineteen thirty eight in response to congressional concerns about Nazi subversive activities in the United States in particular clandestine propaganda being disseminated throughout the United States. Now a partner at the law firm of Wiggin and Dana. David lawmen once served as chief of the Department of Justice's countered intelligence and Export Control Section. There he was responsible for enforcement of Farah law that requires people like metaphor disclosed their lobbying and public relations work performed in the US on behalf of a foreign power. The whole point of the statute is not to suppress or regularly the content of speech but when that speech is propagated by people United States acting on behalf of a foreign government or foreign political party to require registration with the government in periodic disclosure. So that the American people or US lawmakers can be properly put on notice of. Who's behind that content? So they can way what credit or wait too attached to it in. Farah filings like these from the nineteen eighties. Manafort divulges which foreigners? He's working for what he's doing for them. And the vast sums he's paid Paul Manafort went from being a guy came from relatively little means to a guy running affirm that was suddenly printing money. This was nineteen eighties. The age of four in Gecko and benefit with somebody when suddenly stumbled upon. Well really set out to enjoy it. Manafort and his partners and even some of the associates at the firm were wearing flashy tailored suits driving. Big Shiny cars often foreign. He got one of the biggest homes and his friends said when he had a pool. He didn't like where it was positioned so he had. It moved several feet he would disappear for weeks and come back and expense concord round trip to Paris and a week and a half and the nicest hotel there. He was a guy who was unaccustomed to wealth. And when it came to him he flaunted it working for unsavory. Foreign client is not the only way manafort builds this wealth in one thousand nine hundred eighty nine tells. Congress is used his inside connections to score tax. Payer we did not think that was improper. What does system did for this former? Reagan campaign director was allow his firm to buy a rundown New Jersey housing development. Refurbish it and his company will receive thirty one million dollars in rent subsidies over the next fifteen years metaphor will never face charges. But in June nineteen eighty-nine he is hauled before a house committee where he makes a stunning associate by. Will stipulate person today that you could characterize this is influenced pedal. He commits this really elementary mistake. He says yes. I am an influence platter. It was actually a very defining moment for Paul Manafort. He was sort of at this point where he was being forced to choose between potentially having some foothold in government and being a full fledged power lobbyists and this talking to some people who worked with him back then was kind of the breaking point and he decided to choose the private sector and the big paydays from the lobbying following. Paul Manafort's admission that he's an influence peddler in the nineteen nineties. His name largely disappears from the headlines. Paul Manafort's legendary firm gets bought by big corporate conglomerate. Any creates a new firm which is a much smaller firm and he has to hustle for new set of clients. He really immersed himself in the foreign lobbies that became his gravy train. At a certain point it appeared as if he was just going to disappear entirely from Washington and really make his home around the world in the employ of some of these fabulously wealthy clients Who would be willing to pay him a lot of money? No longer working with his old partners at Black Manafort stone and Kelly. Manafort looks east. According to the report of Special Counsel Robert Muller in two thousand five manafort begins a multi million dollar working relationship with the Russian billionaire named Pasqua John Herbst to was the. Us Ambassador to Ukraine from two thousand three or two thousand six. He's believed heavily be among the closest oligarchy to Putin. He's known as an aluminum king. His reputation is not a pretty one. All their pocket developed a reputation as someone not to be messed with. According to the monitoring for one of Manafort's employees will tell federal investigators that donor Pasqua pays manafort millions to help install friendly government officials in countries. Where Donna Pasqua does business? The Pro Putin oligarch also invest millions in a private equity fund that manafort launches in two thousand five manafort begins working in Ukraine for recently defeated. Pro Russia. Politician named Victor Yanukovych Metaphor directs. His Ukrainian operation from a small office in Kiev at his side. Is Rick Gates Tom? Winter is an investigative reporter for NBC News. Rick Gates was kind of Paul Manafort's right hand man. Kinda jack-of-all-trades something he'd be somebody that would put together. The financials for Paul Manafort and Rick Gates is company in the morning. And then maybe in the afternoon communicates some of the Finer Points of what Paul Manafort without laying strategy even though Manafort has mastered the art of crafting political limoges back in the United States. Doing so phreatic. Kovic is no easy task. We had the image of. Let's say a Soviet factory boss. He had a not perfect suit. It didn't fit very well. It was usually unbuttoned and when manafort started working with him got a covert term to an American Dandy. Kovic is one time campaign chair. Tatas Chernoff view got her first hand. Look at the work. Manafort did for his former boss. He taught him to behave by American standards. He had to smile and where perfect. Soon with. Each button perfectly fasten. The hair had to be perfect to the whole nine yards. This is what he taught. Yanukovych under manafort's tutelage yet coaches pro-kremlin party make strong gains and in two thousand ten. The American consultant helps his client. Defeat Yulia Timoshenko to become Ukraine's president or his work. Prosecutors say Manafort is paid handsomely by Yanacocha just backers a group of politically minded ultra-wealthy pro Russian older guards politics is part of how they run their business. They fund election campaigns. Doria Kalinic is the executive director of the Anti Corruption Action Center in Kiev and a longtime observer of the way oligarchs operate in Ukraine. They decide who will win at the elections and this influence they can adopt anymore which makes privileges for that company's prosecutors working for Robert Muller. Say That when these oligarchs pay manafort for his services the money doesn't go through normal channels was all under the table and all very roundabout. It was old money according to prosecutors and evidence presented at trial various oligarchs transfer money into manafort secret accounts and offshore banking givens like the Seychelles and Cyprus. They say Manafort was secret away. More than fifty five million dollars in these hidden accounts. Barbara mcquade is the former. Us Attorney for the Eastern District of Michigan so by sheltering his funds offshore. He was able to reduce his tax bill. By about six million dollars. Manafort began living a just a truly extravagant lifestyle really living it up paying for his family to live similarly extravagant lifestyles and so he was really spending like a drunken sailor in two thousand six. A company linked to manafort purchases an apartment in trump tower for three point. Seven million dollars six years later using his untaxed money from Ukraine. He buys this Brooklyn Brownstone three million dollars and this two thousand square foot coup bid to Beth loft in Soho for another two point eight million and he spends more antique rugs than most people spend on their entire home. He bought a million dollars with the rugs wasn't reselling them on the open market and it seems like he just really liked drugs. Then there are the close in just a few years metaphor drops one point three million dollars at a New York Taylor and a Beverly Hills clothier known as one of the most expensive stores in the country. I think when you see one point three million dollars in clothing I think that's shocks a lot of people. That's not the normal budget for most of society among his purchases is a now infamous. Fifteen thousand dollar ostrich-skin bomber jacket. I think the ostrich jacket was a metaphor for Paul Manafort's greed. It wasn't enough for him. To Be Successful. He could have been extremely successful. If you just played by the rules but that wasn't enough wanted to live a very decadent lifestyle. Paul manafort scheme to avoid paying six million dollars in taxes. He's just one of the many secrets. He's keeping after the election. Victory on October from Ukraine in two thousand ten is rival. Yulia Timoshenko is jail Jalen. Timoshenko was a nasty bit of of this and it was clearly politically-motivated 'cause Timoshenko was far and away. The greatest political rival to Gyanco as his reputation took a big hit Ukraine's to wanted to join the European Union and wanted to show that it was still a democratic country. So manafort said about trying to explain away this arrest to to say you know what this woman actually deserve to be imprisoned and he did so by setting up a whole lobbying campaign to try to change minds and Capitol Hill but they did it without making that transparent despite the requirements of the foreign agents. Registration Act Manafort will later admitted in his criminal proceedings that he runs the operation without registering and take steps to keep it as secret as possible. Money keep flowing but in the last months of two thousand thirteen. The effort comes to an abrupt halt. It has all the signs of a revolution. And it's taking place in Kiev's Independence Square. Hundreds thousands even about a million people want to protest the streets demanding dignity human rights justice and say no to the president himself was a symbol of corruption in February two thousand fourteen. The protests in Kiev turned deadly and Yanukovych leased to Russian once gone his lavish estate is open to the public offering a glimpse into the life of excess from which he and Manafort have now been removed. When Paul Manafort went to work in Ukraine he was making so much money for Kovic that that the entire rest of his lobbying practice fall away and when that relationship disappeared what his client was sent into exile. He had nothing to make matters worse. Metaphors also being sued by his old client. Russian oligarch OLEG PASTA OVER A multimillion dollar investment deal gone back eventually deposited the Manafort essentially took investment. Despite his mounting problems manafort fails to adjust. He and his family kept spending hand over fist as if nothing had changed so an Arctic. Keep up this facade. He ended up joining to an increasingly risky and sort of convoluted series of financial and accounting and tax schemes. In December. Two Thousand Fifteen manafort begins applying for loans. Even though he's hardly the perfect candidate if banks look for metaphors actual financial situation. They would look at somebody who's had very little income coming in They would look at somebody who would be real risk for repaying loans. So what do you just lied? He was committing bank fraud by submitting false documents to obtain loans from banks and lenders. He would lie about his income. He would lie about his debts. In one instance evidence shows he takes a profit and loss statement showing his company's lost six hundred thirty eight thousand dollars. He hasn't changed into a document that can be edited and simply changes the numbers from a six hundred thirty eight thousand dollar loss in the initial document that was sent from the Accountant. After it was turned into a word document. That Paul Manafort could edit. It shows a three million dollar game for Paul Manafort's purposes. He's telling the Bank here. Hey I've got money coming in and yes I can pay back. According to lawyers working for special counsel Robert Muller Manafort will use lies like this to secure twenty five million dollars in loans in the early months of two thousand sixteen. Paul Manafort is being pursued by Russian oligarch Oleg Pasqua while also running a multi million dollar bank fraud scheme. He's sitting in puts of desperation. His marriage is in a bad place. His finances are in a bad place. He's looking for some way to reinvent himself some lifeline and he sees trump come onto the scene. Ladies and gentlemen I am officially running for President of the United States and we are going to make our country great again for Manafort. Trump was nothing less than a political and a financial lifeline. Manafort uses his connections to score a job. This is the job application letter for lack of a better word that Paul Manafort submitted to Donald Trump through a mutual friend. He talks about himself as sort of an insider who knows how to navigate these vary Byzantine party processes but also casts himself as quote. Not a part of the political establishment. Though he's resorting to fraud to stay afloat. Manafort is an asking for much one of the key selling points. That manafort makes the case for in this in this application is that you will work for free. Says I'm not looking for a pay job that he didn't need the money. The pitch works and by March manafort is trump's convention manager by late. May He's taken over since joining me now from Southampton New York is the chairman of the trump campaign. The head coach. Will Paul Manafort Mr Manafort? Welcome back to the show. Survey Manafort may be working for free. But that doesn't mean he won't take advantage of his lucrative new gig almost as soon as he joins the campaign he starts to reach out to these old clients and to find a way to leverage his connections to to improve its balance sheet metaphor and his former Russian client owed next to pass gun had a falling out over a multi million dollar investment. Deal gone bad. According to the Motorsport Manafort asks how he might use his new job to get hold with this Putin allied dark and offers to provide him with special briefings from inside the campaign all indications were when Paul Manafort said Oleg Dera Pasta this Russian oligarch cannot provide you these insights into the US political system to the US election to the donald trump campaign potentially To get whole with you. He was referring to a debt that he owed elect aeropostale coming out of a failed business. Agreement according to the Modern Report manafort employee Rick Gates tells federal investigators. His boss has him share in Turner Campaign polling data with another employee in Ukraine. So he could in turn send it to their former clients in the country gateway also. Tell the feds. He understands their pasta to be one intended recipient later when Russian efforts to push the election in favor of chromebook revealed this alleged move raises many questions. A lot of close followers of the Russia controversy saw in Manafort's willingness to share polling with some of these guards perhaps an effort to try to aid the Russian social media. Disinformation campaign that we now know was deployed to help Donald Trump in the twenty sixteen election. I think however there's an equally strong and perhaps even more convincing argument that what Manafort was trying to do was to make money. And that's why you sharing the polling information. He would want to show these former clients that he had he still had some serious clout. According to the report. Metaphor did not acknowledge ordered engaged to share the polling data though he did not respond to American Greece's request for comment Derna Poss- Carr's spokeswoman has said he never received any polling data or private briefings. Hillary Clinton is the epitome of the establish. She's been in power for twenty five years. Despite his pronouncements Manafort's days leading from outside or quest are numbered in August two thousand sixteen manafort resigns from team trump in what the campaign calls a the following year? Trump is in the White House and former FBI. Cheap Robert Muller begins his inquiry into Russian election interference. Soon manafort finds himself directly in the crosshairs. Paul Manafort caught the eye of Robert Muller because of his connections with Russia connections with Oligarchs all of his offshore business dealings and then once they began looking found all of this financial misconduct as will be revealed in future court proceedings the financial misconduct investigators find include the hiding of Manafort Ukraine in cuff. His multi-million dollar bank fraud scheme and his secret. Lobbying efforts in Washington on behalf of his Ukrainian flights in October two thousand seventeen he and his deputy Rick Gates go down. Har Breaking news tonight. The first thing to the mother investigation former trump campaign chairman Paul manafort and his one time top eight facing federal charges at first Manafort and Gates are indicted for hiding income from their work in Ukraine and hiding their secret. Lobbying efforts soon problems will grow in the supercharged political landscape of two thousand seventeen. Not Everyone Sees Paul manafort indictment as justice at work people trying to paint this as some sort of a political indictment or some sort of a political attack going after the president's former campaign manager. I think that when you have a twenty five million dollar bank fraud and fifty five million dollars. Offshore Bank accounts any prosecutor in America would bring that case regardless of his connection to president trump. Barbara mcquade is illegal analyst for NBC. News but I do think. In addition there was hope that they could use those charges as leverage to Provide cooperation from Paul Manafort. And it wasn't that they wanted him to Do In president trump. They wanted to learn the truth. I D- MANAFORT doesn't flip. But a few months. After the initial indictment someone very close to him does manafort's former top aide. Rick Gates pleaded guilty to conspiracy and lying to investigators. Gates is now cooperating. With the special counsel is really shocking when Brigades flipped on Manafort and decided to testify against them. This guy who had worked for and around Manafort for decades he knew that he had worked closely with Rick Gates. That Ricky's knew about all of the schemes. He was his close business partner and knew that his cooperation would likely be devastating. This is not the only trouble metaphor faces in June two thousand eighteen. Prosecutors hit him with additional charges they allege he's been coaching witnesses to say his secretive lobbying for Ukraine took place outside the US and was therefore totally legal. That looked right there that this is somebody who is hiding legitimate in serious criminal behavior. That was something that I think turned the tide. As far as what people looked at when it came to Paul Manafort's entitled Manafort's bail is revoked and the man who has lived in fine homes across the country is sent to Laka. Manafort case is spit into with one scheduled at the courthouse in Alexandria. Virginia and another in Washington DC on July thirty first. Two thousand eighteen jury in Virginia begins to hear the first of these cases. Though Paul Manafort was the trump campaign chairman for three months. This trial is not about that. Prosecutors argued that manafort lie to hide his money when he was making in Ukraine and to get more from banks back home when that were again do in making that case their star witness is metaphor longtime associate Rick Gates. Rick Gates is not a perfect witness but very few cooperating witnesses are but what Rick Gates could provide is essentially a talking. Roadmap could tell the jury exactly how it was the. Paul Manafort did his business in for all of regains his own faults. There were documents to back it up. It made him a very credible witness on August. Twenty first the jury find metaphor guilty on five counts of finding a false tax return one count of failing to disclose a foreign bank account and two counts of bank fraud while acquitting him on ten additional charges when the trial ends. President trump denies a connection to the case doesn't involve me but I still feel very sad thing. That happens is nothing to do with Russian collusion not long. After his guilty verdict in Virginia manafort agrees to plead guilty to conspiracy counts and his pending case in DC. I think at that point. He knew that the only way that he could reduce his potential prison exposure was to enter a guilty plea and to cooperate with the special counsel and so he agreed to do that. I don't know if he ever intended to fully cooperate throughout his case. President trump praises manafort for not flipping and dangles the possibility of salvation. Tonight the president is saying that a pardon from Paul Manafort is former campaign. Chair is not off the table. Two and a half months after agreeing to help prosecutors the government says in a court filing and a judge later agree that manafort has broken his deal. He broke it because he'd lied to investigators about certain questions that they had and certain questions that no matter how he answered he wouldn't have been prosecuted for and the question. I think that will always hover over. This story is why. Why was he lying? Why did he decide not to fully play ball with Robert Muller? He must've believed that the truth would be damaging to people. He was trying to protect. I don't know if that was president trump or others or if it got to the very heart of cooperation about Russia but it may be that those lies or whatever it was he continued to protect was the reason that Robert was never able to establish a conspiracy between Russia and trump campaign in March. Two Thousand Nineteen Judges Manafort cases in Virginia and DC hand-down separate sentences totalling seven and a half years in prison. Metaphor did not respond to requests for coming. His is a fall from grace for the king-maker who wants behind the most powerful men in the world. Many who studied manafort's long career as an influence peddler remain baffled by the words of the Virginia judge in his federal case who said except for his recent crime manafort had lived in otherwise blameless life. There was so much evidence revealing Manafort be a shady operator that to hear the judge sort of almost applaud him. For a blameless life to that point was sort of going to a lot of people that phrase in an otherwise blameless life really does stick into the crawl because everything that manafort had done from the moment that you opened up his lobbying shop in Washington had been done to personally enrich himself at the expense of American democracy. Thanks for listening to the American read podcast presented by CNBC. I'm Stacey Koon I'm Kelly Evans hosts of CNBC's be exchange which is now a podcast subscribe. Today it's your one stop shop for the day's top business stories plus listening for lots of original reporting in-depth conversation and some of the best CNBC's award winning investigative work. Subscribe to the Exchange for free. And you can always catch the exchange live weekdays at one. Pm Eastern only on CNBC. So you then.