By KENNETH P. VOGEL
06/15/2017 05:08 AM EDT
Paul Manafort is at the center of an FBI investigation into ties between President Donald Trump’s team and the Russians, but that hasn’t stopped him from doing business with international figures and companies, partly by claiming continued access to Trump, according to people familiar with his dealings.
Manafort in recent weeks has either consulted or worked with a Chinese construction billionaire looking to expand his business overseas and a telecommunications firm interested in regulatory approval from governments in Asia and the Middle East, as well as an investment fund claiming links to the Chinese government, according to documents and interviews.
Manafort quietly consulted on a proposal under which the Chinese fund — the China Development Fund — would invest $30 billion or more in the Puerto Rican government’s bond debt and possibly the island’s critical infrastructure, according to documents and interviews with four people familiar with the negotiations, including a Manafort business partner.
One of the people, a lawyer involved in the discussions, said Manafort indicated that he could convince the Trump administration to support any resulting deal, because he’s remained in contact with Trump’s team, and that he played a role in helping to soften Trump’s tough campaign rhetoric on China.
“He’s going around telling people that he’s still talking to the president and — even more than that — that he is helping to shape Trump’s foreign policy,” said the lawyer involved in the discussions.
The White House press office did not respond to requests for comment.
Manafort’s spokesman Jason Maloni would not comment on most of Manafort’s recent business dealings. But he did assert in an email: “Paul is not engaged in government affairs/lobbying or public relations work for corporations, governments, or individuals.”
Manafort has, for years, largely avoided registering with the U.S. government as a lobbyist or a foreign agent, and he has narrowly interpreted legal provisions dictating the circumstances under which individuals are required to disclose lobbying or public relations work. However, he recently announced he would retroactively file reports with the Justice Department detailing work he did for a Russia-aligned Ukrainian political party — perceived by some as a tacit acknowledgment that he failed to abide by the Foreign Agent Registration Act’s disclosure provisions in real time.
In August, scrutiny of his work in Ukraine — which is currently under investigation by the FBI and congressional intelligence committees as part of their Russia probes — led to Manafort’s ouster as Trump’s campaign chairman after he helped guide the rookie politician to the GOP nomination.
The idea that Manafort would market his access to Trump to clients and prospective clients interested in influencing government decision-making — without registering as a lobbyist — deeply bothers Trump’s allies.
Several Trump allies inside and outside the administration said it would make things easier for Trump if Manafort laid low during the Russia investigations.
“Paul certainly has a knack for making big deals, but it would be problematic for the administration to allow China to buy Puerto Rico’s debt and to have Paul involved in the deal,” said one outside Trump adviser, suggesting Chinese involvement in the affairs of a U.S. territory off Florida’s coast could raise security concerns. The adviser added that “it would be problematic to have Paul representing himself as a liaison to the Trump administration on any deal, given the FBI investigation.”
The situation also represents a tricky catch-22 for Manafort.
He is one of the few veteran lobbyists in Washington — or anywhere for that matter — who can legitimately claim a personal relationship with an outsider president who doesn’t have deep connections to the Washington establishment and its lobbying industry.
Half a dozen people who have done business with Manafort said he indicated that he periodically spoke to the president and his team, including to offer political advice, well after he left the campaign, all the way up until the Russia investigation started heating up about two months ago.
Two people close to Trump disputed that, asserting there haven’t been any conversations at all since the inauguration.
Trump’s relationship with Manafort has become a liability for the president, thanks to the investigations into Manafort’s lucrative consulting work for Russia-aligned oligarchs and politicians in Ukraine and Russia.
A federal grand jury impaneled as part of the FBI’s investigation has issued a subpoena for records related to Manafort, according to NBC News. Last month, he voluntarily provided documents to the Senate Intelligence Committee, and offered to be interviewed by the House and Senate intelligence committees.
Manafort’s efforts to defend himself have complicated some of his domestic business dealings, said half a handful of people who have worked with — or competed against — him.
But they said it hasn’t made him toxic in international business and political circles, particularly in the developing world or in countries that lack robust democratic traditions.
Manafort, 68, made his name as a young GOP operative working on Ronald Reagan’s 1980 presidential campaign. Since then, though, he’s carved out a lucrative niche representing businessmen and politicians in parts of the world where real or perceived ties to a U.S. president tend to outweigh negative press in the U.S.
Manafort’s defenders reject any suggestion that he encourages the idea that he is an envoy to Trump. In fact, they assert that he actively attempts to disabuse people of that perception, though they concede that people still see him that way.
“Look, Paul has a relationship with Trump. He’s always going to be a friend of Trump’s. A lot of people know that,” said Hector Hoyos, a tech entrepreneur who is a close friend and periodic business partner of Manafort’s. “I’ve been with him in many places. Whenever anybody anywhere in the world starts playing that [Trump connection], the first one to state clearly and openly and publicly that he’s not there representing Trump — or the administration — is Paul. But he can’t be responsible for what other people may infer.”
Hoyos has brought on Manafort to consult on a number of projects involving foreign companies and governments, including the proposed $30 billion deal between Puerto Rico and the China Development Fund, which presented itself to people involved in the talks as a subsidiary of the state-owned China Development Bank, according to people familiar with the talks.
Hoyos said he and Manafort also are working with Shanghai billionaire Yan Jieheto help his company, Pacific Construction Group, win contracts to build infrastructure around the world.
Manafort met with Yan in April in Pacific Construction Group’s Shanghai offices.
And before the meeting, Yan told The Financial Times, which first revealed the meeting, that Manafort was going to help him get in on Trump’s promised — but yet to be detailed — $1 billion infrastructure spending plan. The paper quoted Yan calling Manafort “Trump’s special envoy,” and boasting “I will not seek out Trump. He will seek me out. In the entire world, I am definitely the most ideal privately owned unit to invest in construction. In the whole world, there’s not another company equal to Pacific Construction.”
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Manafort’s spokesman Maloni suggested Yan may have gotten ahead of himself, explaining, “Paul has not agreed to help any entity pursue future government infrastructure contracts in the United States.” He said in an email that the discussion with Yan “took place at an impromptu meeting added to Paul’s schedule at the Group's request because the Group is potentially interested in the U.S. infrastructure development market.”
Hoyos, however, challenged the assertion that Pacific Construction Group is looking to break into the U.S. market. “The bulk of infrastructure development right now is going on in Africa, not in the U.S. God knows what the U.S. is going to do, because Trump hasn’t moved on anything related to infrastructure,” Hoyos said.
Yan already has conquered the Chinese market, Hoyos said, “but when it comes to competing against other global construction companies in the Middle East or in Latin America or Africa, it’s a different ballgame. And that’s what he is looking to Paul to do — to help him understand the ropes about how he can take his business and make it become a global business outside China. We believe that Pacific Construction could become one of the world’s largest construction companies.”
Pacific Construction did not respond to a request for comment.
But POLITICO obtained a previously unpublished company statement to The Financial Times “and related media outlets” characterizing Yan’s meeting with Manafort as “a private business engagement” and decreeing that it “shall not be reported in the press without permission from the Pacific Construction Group.”
Hoyos said he introduced Manafort to Yan, and that Manafort “doesn’t do business with strangers. Paul will not do business unless he knows who he is getting in bed with. He is very careful about that.”
Additionally, Hoyos’ Florida-based telecommunications company, Hoyos VSN, in March retained Manafort as an adviser to assist in winning regulatory approval for mobile phone and satellite technology in countries including the United Arab Emirates, Japan and South Korea.
“He was brought in to help us access some of the phone companies overseas with which he had relationships, especially in places like Asia,” said Hoyos. “If anything came of any introduction that he made, then he would have gotten compensation, just like any of my other consultants.”
Manafort was added to Hoyos VSN’s Florida corporate filings in late March as a director, but he was removed in an amended report filed just three weeks later.
“He’s got too much going on, as you know,” said Hoyos, who is in his late 50s and who for decades has turned to Manafort, the godfather of Hoyos’ daughter, to assist his companies.
In the 1990s, one of Hoyos’ companies retained Manafort’s pioneering lobbying firm — Black, Manafort, Stone and Kelly — to obtain licenses to export supercomputers. “We got the export licenses, and he helped us enlist the Bush administration and then later on the Clinton administration to support us in combating the dumping that the Japanese were doing of supercomputers into the markets,” Hoyos said.
And in the early 2000s, Manafort helped broker a deal in which a Portuguese company called Sociedade Lusa de Negócios (SLN) paid $31 million for a 25 percent stake in a Hoyos-owned company called Biometrics Imagineering, according to Hoyos and Portuguese media reports.
That transaction, on which Hoyos said Manafort was paid a commission, came under investigation in Portugal for alleged fraud and money laundering by SLN and the bank that backed it. Portuguese federal prosecutors in April announcedthat they were dropping the case without bringing charges, though they cited concerns over the “extremely complex financial engineering” at play in the deal “coupled with management decisions and practices that raised serious suspicion” over its framework.
Neither Hoyos nor Manafort was a subject of the investigation.
And while Manafort was accused by some Ukrainian officials of accepting millions of dollars in off-books cash payments from a Russia-aligned political party, Hoyos said his friend does everything by the book.
“In every single business dealing that I have had with him and that I have seen him engage with anybody, he has always demanded that the overseas Foreign Corrupt Practices Act wording be instated in every single contract as a clause, with the whole wording of the act,” Hoyos said.
Nonetheless, Manafort’s involvement in the prospective investment by China Development Fund in Puerto Rico raised red flags for some Puerto Rican officials, according to two lawyers familiar with the discussions.
The discussions got as far as a May 12 meeting in Manhattan that lasted four hours and was attended by Manafort, Hoyos, lawyers and other representatives from the Puerto Rican government, as well as an official with the China Development Fund named Benjamin Ng, according to four people familiar with the meeting.
Some of the people said that Ng indicated that the China Development Fund was interested in investing between $30 billion and $45 billion in Puerto Rico’s debt and infrastructure,
including possibly its publicly owned electric utility.
Ng said that the China Development Fund had made extensive investments in Iraq and other foreign countries, but he stressed that the fund was acutely sensitive to possible political opposition to the Puerto Rico deal. The U.S. government has to approve foreign investment in U.S. companies and infrastructure that carry national security implications, and Trump administration officials have expressed particular concern about Chinese investment in the U.S.
Manafort had previously suggested he’d be able to win approval for any resulting deal between the China Development Fund and Puerto Rico, said one of the lawyers familiar with the discussions, who did not participate in the May 12 meeting.
Hoyos dismissed that characterization, and cast Manafort as a peripheral player in the talks.
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“Those relationships were all my relationships on both sides — China and Puerto Rico. I’m the one that ran the deal,” said Hoyos, who is Puerto Rican. “I asked Paul to consult with me because he knows a lot about the whole government business,” Hoyos explained, though he said that Manafort drifted in and out of the May 12 meeting.
The talks about a prospective deal appear to have died amid suspicion on both sides, according to several people familiar with them.
They say that Manafort and Hoyos concluded that the Puerto Rican government was not serious because it did not send top officials to the May 12 meeting.
Meanwhile, the Puerto Ricans were leery of the China Development Fund and of Manafort’s involvement, which surprised them, according to the two lawyers familiar with the talks. “Manafort was a deal breaker,” said one of the lawyers. “He’s under FBI investigation, and the Puerto Ricans don’t want to get tainted by Manafort’s problems.”
Representatives from Puerto Rico’s governor’s office and the Puerto Rico Fiscal Agency and Financial Advisory Authority — the independent government agency established this year by the Puerto Rican government to help the island dig itself out from debt and bankruptcy — did not respond to requests for comment.
Neither did Ng, the China Development Bank or the Chinese Embassy in Washington.
Hoyos argued that scrutiny of Manafort’s ongoing work was part of a bigger effort — including the ongoing Russia investigations — to bring down Manafort.
Dismissing any suggestion that Manafort may have acted on behalf of Russia during the 2016 campaign, Hoyos asserted that Manafort “has been completely antagonistic to the Russians.” He added “Is he friends with Russian oligarchs? Yeah, the same way he’s friends with Argentinian and Mexican oligarchs. There are oligarchs around the world, but the fact that he’s friends with Russian oligarchs doesn’t mean that he supports or even likes [Russian President Vladimir] Putin.”
Hoyos said Manafort is “under siege,” adding “people saying this and that, everybody opining whatever they want to opine without any facts. It’s Washington. He understands it, because that’s been his arena his whole life. He knows that. That’s the game and that’s the career he chose.”