Greg Craig, ex-Obama White House counsel, indicted for alleged false statements

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Greg Craig, former White House counsel for then-President Barack Obama, was indicted Thursday on two counts of making false and misleading statements to investigators -- including Special Counsel Robert Mueller's team -- in connection with his work on behalf of Russia-backed former President of Ukraine Viktor Yanukovych.

Craig is the first prominent Democrat to be indicted in a case arising from Mueller's now-completed probe into Russian election interference. Mueller referred the Craig case to prosecutors in New York last year after uncovering possible wrongdoing while he investigated former Trump campaign chairman Paul Manafort's Ukraine lobbying work.

The Washington-based lawyer was indicted by a grand jury in the U.S. District Court for the District of Columbia for allegedly falsifying and concealing “material facts” and making false statements both to Mueller and to the DOJ National Security Division's Foreign Agents Registration Act (FARA) Unit.

The FARA Unit is responsible for enforcing foreign lobbying laws that require the disclosure of certain overseas activity, including public relations work for foreign entities. At issue were Craig’s 2012 lobbying and media contacts on behalf of Yanukovych, while Craig was a partner at the law firm Skadden, Arps, Slate, Meagher & Flom.

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Specifically, Craig and the law firm were commissioned by Yanukovych and Ukraine's government to write a report to assess whether the government's prosecution of dissident Yulia Tymoshenko -- a criminal case that was criticized widely as an abuse of power -- was a "fair trial."

Critics charged that the apparent aim of the Skadden report was to provide cover for what critics called an obviously politically motivated prosecution, and Manafort and others used the published document to advance Yanukovych's standing in the international community. But, if Skadden and Craig registered as foreign agents of Ukraine under FARA, the report's appearance of impartiality likely would have been compromised.

In a videotaped statement uploaded to YouTube on Thursday, Craig asserted that the report was "independent," and denied helping Ukraine spin the information it contained. He also strongly denied the charges against him, saying he was "always honest" about his activities.

Craig, speaking directly to the camera, also slammed the prosecution as "unprecedented and unjustified."

In the indictment, prosecutors cited several emails between Craig and the report's co-author, including one April 2012 email in which Craig wrote that a follow-up Skadden report on Yanukovych's then-upcoming second trial would "help make it go better and look better vis a vis the West."

Although Ukraine officials said they paid only $12,000 for the report, prosecutors charged that Manafort illegally used an offshore account to ensure Skadden received approximately $4 million for its services.

"People in Kiev are very happy. You are 'THE MAN.'"

— Lobbyist email to Greg Craig, cited in indictment

In February 2012, prosecutors said, Craig emailed the co-author of the report, saying, "I don't want to register as a foreign agent under FARA. I think we don't have to with this assignment, yes?"

In April that year, Craig emailed, "I don't really care who you ask [about the FARA requirements] but we need an answer from someone who we can rely on with a straight face."

On December 15, 2012, after the report's release, a lobbyist wrote to Craig that media coverage on the report was glowing: "You are back in the headlines internationally. ... People in Kiev are very happy. You are 'THE MAN.'"

Yanukovych was overthrown in the 2014 Ukrainian revolution and has lived in exile in Russia since. Tymoshenko, who was also one of the leaders of the Orange Revolution, was convicted on charges including embezzlement in 2011 but was released in 2014 upon Yanukovych's ouster.

In 2013, the DOJ sent Skadden a letter informing Craig that the firm and Craig's work with Ukraine meant they had to register as foreign agents under FARA. Craig resisted those requests, providing false information to Skadden's general counsel, the indictment said.

Based on Craig's false assurances -- including his claims that his statements to the media on the Ukraine matter were merely to correct misinformation -- thte FARA Unit changed its determination and said Craig did not need to register, prosecutors said in the indictment.

On October 19, 2017, according to the indictment, Craig repeated the lies to Mueller's team -- allegedly providing misleading statements on his contacts with journalists concerning the report.

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"The purpose of the scheme was for Craig to avoid registration as an agent of Ukraine," the indictment read. "Registration would require disclosure of the fact that Private Ukrainian had paid Craig and the Law Firm more than $4 million ... [and] undermine the Report and Craig's perceived independence; and impair the ability of Craig and others at the Law FIrm to later return to government positions."

It was not clear why Mueller -- who prosecuted other Trump officials, including Manafort, Michael Flynn, and George Papadopoulos for making false statements -- did not handle the Craig case himself, and opted instead to farm it out to prosecutors in New York.

Alex van der Zwaan, another former Skadden lawyer, pleaded guilty last year to lying to investigators about the report.

Craig faces up to 10 years in prison in all -- up to five years and a possible $250,000 fine for allegedly willfully falsifying and concealing material facts from the FARA Unit and another five years and $10,000 fine for making false and misleading statements to the FARA Unit.

FARA violations had been prosecuted rarely until Mueller took aim at Manafort for his own lobbying work in Ukraine. Manafort, who counted Yanukovych as one of his most lucrative clients, has been convicted on numerous bank and tax fraud charges and separately was accused of FARA violations as well.

Manafort was sentenced earlier this year to approximately seven years in prison. No Americans were indicted for colluding with Russia or obstruction of justice following the completion of Mueller's nearly two-year-long investigation, despite multiple attempts by Russians to involve the Trump campaign in a conspiracy to hack Democrats' emails.

Craig left Skadden last year after his work with Manafort became public. Skadden agreed this past January to cooperate with the DOJ's registration requirements and paid $4.6 million in a settlement to avoid criminal prosecution.

"We have learned much from this incident and are taking steps to prevent anything similar from happening again,” the firm said in a statement at the time.

Craig's attorneys on Wednesday night told The Associated Press in a statement that the "government's stubborn insistence on prosecuting Mr. Craig is a misguided abuse of prosecutorial discretion."

On Thursday, the attorneys, William Taylor and William Murphy, told reporters: "This indictment accuses Mr. Craig of misleading the FARA Unit of the Department of Justice in order to avoid registration. It is itself unfair and misleading. It ignores uncontroverted evidence to the contrary. Mr. Craig had no interest in misleading the FARA Unit because he had not done anything that required his registration. That is what this trial will be all about."

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The indictment was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Jessie K. Liu for the District of Columbia, and Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office.

Separately, another Mueller-referred investigation into Clinton-linked Washington insider Tony Podesta related to his overseas lobbying work also reportedly is heating up.

Fox News' Mike Emanuel and The Associated Press contributed to this report.