Above, Kenneth McCallion, whose losing Ukraine lawsuits in U.S. courts against Paul Manafort helped Robert Mueller put Trump's ex-campaign manager behind bars.
By Eric Felten, RealClearInvestigations
January 13, 2020
When the FBI began investigating Lev Parnas and Igor Fruman – the indicted pair who worked with Rudy Giuliani on his Ukraine inquiries – one of the first people agents interviewed early last year was Kenneth McCallion. A New York lawyer, former federal prosecutor, Democrat donor, and onetime Democratic congressional candidate, McCallion doesn’t claim to know Parnas or Fruman, or have any firsthand knowledge of their activities on behalf of President Trump’s personal lawyer. But McCallion told RealClearInvestigations he was a go-to source because of his years spent representing Ukrainian politicians in lawsuits and, more important, because the agents had used him as a source in the biggest probe in recent years: the Trump-Russia investigation.
McCallion claims to have informed the feds about shady Ukraine-related dealings by former Trump campaign manager Paul Manafort – dealings McCallion had spent years trying and failing to sue Manafort over. When Robert Mueller was named special counsel, McCallion says, he fed that same information to his team. The special counsel never uncovered a conspiracy with Russia, but his probe did lead to Manafort’s conviction in part on the conduct described by McCallion, including bank fraud and hiding money abroad. In one of the final codas of the Mueller prosecutions, Manafort associate Rick Gates – another McCallion target – was sentenced last month to 45 days in jail and three years of probation.
In the long investigative cloud trailing Donald Trump’s presidency, Kenneth McCallion may be one of the most influential people almost no one has heard of. A key player in Manafort’s downfall, the lawyer has helped make Ukraine central to American politics -- including, now, impeachment. McCallion is also a Rorschach test for these partisan times. The avowedly Trump-hating attorney might be seen as a truth-teller whose help exposing wrongdoing led to criminal convictions; or he might be seen as a lawyer with a failed case and a grudge who used personal relationships with federal prosecutors to bring the crushing force of the federal government down on his enemies. Either way, McCallion is a common thread in both the Mueller probe and the push for impeachment. He also helps explain the curious conundrum of how Ukraine’s bitter and byzantine politics came to be America’s politics.
Setting His Sights on Manafort
Kenneth Foard McCallion has engaged in a broad array of legal work since graduating from Yale University in 1968 and Fordham Law School in 1972. In private practice he has brought environmental class actions and human rights lawsuits, including a successful effort to pry compensation for Holocaust survivors from French banks. He has also been litigating Ukrainian disputes for nearly a decade and has made a habit of bringing his complaints to U.S. federal court.
He has represented prominent Ukrainians and has sued nearly every high official in the government of Ukraine. McCallion set his sights on Paul Manafort in 2011 when Manafort was advising Ukraine’s new president and McCallion was representing the country’s former prime minister, Yulia Tymoshenko, who had been jailed on corruption charges by Ukraine’s newly elected and arguably Russophile government. That year, McCallion sued Manafort and his partners in a New York real estate venture. The basic accusation was that the former prime minister had been prosecuted to keep her from rooting out corrupt Ukrainian business schemes, and that some of the earnings from those schemes were being used in U.S. real estate deals involving Manafort and the Ukrainian billionaire Dmytro Firtash. McCallion accused Manafort and others of money laundering, wire fraud, mail fraud and racketeering.
In a bio on his law firm’s website, McCallion boasts that his “civil RICO case against Paul Manafort and others in the United States District Court for the Southern District of New York … served as part of the basis for the Department of Justice and Special Counsel Mueller’s indictments of Mr. Manafort and Mr. [Rick] Gates for various federal criminal offenses.” He makes the same claim in his latest Trump-flaying book “Treason & Betrayal,” that his Racketeer Influenced and Corrupt Organizations Act lawsuit on behalf of Tymoshenko “became part of the source material for the federal investigation leading to the indictments of Manafort, Gates and [lawyer Alex] van der Zwaan.”
McCallion fails to mention that the assertions and accusations made in his RICO suit were dismissed repeatedly by the federal court. U.S. District Judge Kimba Wood ruled that the litigation had failed to meet the legal standard that when one drew “all inferences in the plaintiff’s favor” there would be at least a single claim that was “plausible on its face.”
Not that Wood didn’t give McCallion plenty of chances to make his case. In litigation that lasted until September 2015, the judge afforded the lawyer multiple opportunities to amend his complaint. McCallion did just that – again and again. And yet the court dismissed his accusation that the Manafort crowd had committed wire and mail fraud: “Plaintiffs never explicitly identify any particular act or transaction that constitutes wire or mail fraud.” The judge found the money-laundering accusations came up short too: Nothing in the complaint, she wrote, “specifies when these transactions took place, approximately how many there were, and most crucially, which Defendants were involved.”
As for the other RICO allegations, the court found that McCallion had “failed to allege facts sufficient to establish that the Defendants were involved.” The judge finally dismissed the case “with prejudice,” meaning: Don’t come back to my court.
McCallion tells RealClearInvestigations that he would have found ways to revive his court case, but by the time it was dismissed by Judge Wood, Manafort’s client, Viktor Yanukovych, had been chased out of Ukraine and Tymoshenko had been freed from jail. Given those developments, McCallion says, “Tymoshenko had a diminished interest in pursuing the U.S. complaint.”
But McCallion’s interest in getting Manafort was not diminished.
He may have lost in court, but it wouldn’t be long before he had the opportunity to do something with his voluminous files on Manafort. Judge Wood made her final ruling on the Tymoshenko lawsuit in September 2015 – just three months after Donald Trump had announced his candidacy and nine months before the candidate would make the consequential decision to appoint Manafort his campaign chairman and thus a high-value target.
For McCallion it was a twofer: Not only was he in a position to dent Trump’s bid, here was a chance to finally bring down his old foe Manafort, something he had failed to do in years of civil litigation. McCallion’s outsized influence in the Ukrainization of American politics comes not from winning a big case, but from losing, and losing repeatedly.
McCallion wasn’t the only figure trying to damage Trump via Manafort and the Ukraine. Alexandra Chalupa, a Democratic National Committee contractor, coordinated with Ukrainian officials to, as Politico put it, “sabotage Trump,” mostly by scuffing him up with dirt on Manafort. According to Politico, the Ukrainian efforts involving Chalupa “had an impact in the race, helping to force Manafort’s resignation and advancing the narrative that Trump’s campaign was deeply connected to Ukraine’s foe to the east, Russia.”
McCallion’s efforts are less well known than Chalupa’s, but may have been more consequential.
There’s little doubt Paul Manafort gives political consulting a bad name. But there was always the strange question of what his expensive mortgage applications, real estate transactions, and ostrich coat had to do with the special counsel’s portfolio. Were the prosecutors really interested in those issues, or were they just a way of putting the squeeze on an unwilling witness?
When Mueller was appointed May 17, 2017, his mandate was “to ensure a full and thorough investigation of the Russian government’s efforts to interfere in the 2016 presidential election.” There was nothing said about Manafort’s real estate deals, at least not for several months. In August 2017, Deputy Attorney General Rod Rosenstein issued a follow-up memo clarifying that the special counsel was authorized “to investigate certain matters, including two additional sets of allegations involving Manafort.” Those new allegations – such as “crimes arising from payments he received from the Ukrainian government” – mirrored some of the allegations McCallion had pursued without success in his civil suit against Manafort, Firtash, et al. Rosenstein explicitly empowering Mueller to pursue those allegations suggests that McCallion had a substantial influence on the shape of the special counsel’s investigation.
It’s a suggestion the lawyer makes himself: “A part of the federal investigation of Manafort and Gates,” he writes, was “based on the money-laundering activities of Manafort and Gates that was contained in a civil RICO suit … brought on behalf of Yulia Tymoshenko and others by my law firm.” He claimed that “prosecutors – and later the Special Counsel’s office – followed up on leads provided by the civil RICO case.” Perhaps McCallion is overstating his role in Mueller’s strategy. One attorney who has wrangled with McCallion suspects he is exaggerating his contribution to Mueller’s prosecution of Manafort. Still, McCallion’s influence can be seen in the July 2017 warrant application to search Manafort’s residence. Prosecutors and investigators working for Mueller told the court that Manafort had met with a Ukrainian oligarch “to discuss a New York real estate transaction they would undertake together and to pitch other ideas.” According to the warrant application, Manafort “admitted approaching the oligarch to propose the New York deal.” The deal was made in 2008, “according to business records publicly filed in a New York litigation” – in other words, according to documents from McCallion’s lawsuit.
McCallion also takes credit for giving material to the media. “[S]ome reporters covering Trump and Manafort have relied, at least in part, on information and documents that I have provided to them,” he writes in “The Essential Guide to Donald Trump (and Why I’m Sailing to Nova Scotia If He Wins),” published shortly before the 2016 election. In April 2016 – around the end of the time Glenn Simpson’s Fusion GPS was providing anti-Trump research to the Washington Free Beacon – the Beacon published a story about Manafort based in part on information from McCallion’s civil RICO lawsuit. That raises the question of whether the Beacon received that information from McCallion by way of Fusion GPS. The Beacon would not discuss its sources. But asked by RCI about the Free Beacon article, McCallion is unambiguous: “I absolutely did not EVER provide any material to Simpson or anyone else at Fusion GPS.”
McCallion also claims credit for one of the stranger side-prosecutions brought by the Mueller team: the charges against Alex van der Zwaan, a young Dutch attorney with the law firm Skadden Arps.
When Tymoshenko was jailed, prominent U.S. law firms prepared competing reports for and against her. Hired by Tymoshenko’s supporters, Covington & Burling found that, "[a]t present, the allegations against the former prime minister appear to be political in nature because there does not appear to be facts to substantiate the charges." On the opposite side, hired by Yanukovych allies, Skadden Arps found in its report that Tymoshenko hadn’t “provided specific evidence of political motivation that would be sufficient to overturn her conviction under American standards.”
McCallion says van der Zwaan was complicit in a Skadden scheme to hide what it was really being paid in an effort to evade Ukrainian regulations. “Skadden Arps,” he alleged, “had been paid multiples of what was shown.” Once again McCallion fed the Mueller team with prosecutorial suggestions: “We turned over our information to the FBI and federal prosecutors.” Then, McCallion “waited to see what the federal investigation would turn up.” Van der Zwaan was prosecuted, not for any illegal billings but for lying to the FBI about the timing of conversations he had with Manafort associates. He was sentenced to 30 days in prison and fined $20,000. Skadden Arps eventually paid a $4.6 million fine for not registering the work with the Justice Department’s Foreign Agents Registration Act office.
Asked repeatedly by RealClearInvestigations about McCallion’s role in shaping the Mueller prosecutions, Department of Justice spokespersons, including Kerri Kupec, did not respond. RCI reached out to many of the attorneys who had been on the Mueller team with little in the way of response – other than Andrew Goldstein, who said, “Can’t comment.” But McCallion told RCI his connections in Ukraine allow him to be a valuable intermediary between federal investigators and Ukrainians the bureau might not otherwise interview: “The contacts we developed have continued to bear fruit,” he says.
McCallion clearly expects kudos for importing Ukrainian disputes into the American arena. Even though his litigation against Manafort repeatedly failed, McCallion used U.S. courts to make accusations that would later have success with the special counsel and the FBI. As McCallion told RCI, “We hope to be of help.” In this reading, the lawyer is the hero of the story, the bulldog who saw to it that the people he had in his sights were eventually convicted of crimes, correcting the technicalities and timidity of the courts.
In another reading, McCallion’s tenacity is less attractive. Having failed time and again to win in court against Manafort and his cronies, the lawyer took a weak case to the feds, who were casting about for something prosecutable. In order to collect the trophies they needed to justify their efforts, Mueller’s team put their considerable muscle behind allegations a federal court had already dismissed with prejudice. In this reading, Kenneth McCallion used his contacts with federal prosecutors and investigators to settle the score with litigants who had bested him.
Now the intersection of corrupt Ukrainian politics and cutthroat American politics is the stuff of impeachment. The question remains whether, by relying for Ukrainian intel on someone who is both a devoted enemy of the president and a partisan participant in Ukraine’s combative politics, the FBI has chosen the most reliable of sources. In the wake of an inspector general’s report that faults the bureau for overly cozy relationships with agenda-driven informants, that’s a highly relevant question.