Law Firms

Skadden to pay over $4.6M, register as Ukraine foreign agent to resolve allegations tied to Manafort case

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Skadden, Arps, Slate, Meagher & Flom has agreed to pay more than $4.6 million to the U.S. Treasury and register retroactively as a foreign agent of the Ukrainian government in a case tied to Paul Manafort, a former campaign manager for President Donald Trump.

The civil settlement resolves allegations that the law firm failed to register under the Foreign Agents Registration Act when it aided a public relations campaign to influence U.S. policy and public opinion toward Ukraine, according to a Department of Justice press release and the settlement agreement. The New York Times, the Wall Street Journal, the National Law Journal and Courthouse News Service have coverage of the Thursday announcement.

When Skadden received inquiries from the unit handling FARA registration, a partner at the firm made false and misleading statements that led the unit to wrongly conclude the law firm did not need to register, according to the DOJ. Skadden did not investigate to confirm the information provided by the lawyer to the government and to other partners.

The government does not say whether Greg Craig was the partner who made the false and misleading statements. Craig was the lead lawyer on a controversial Skadden report assessing the fairness of a trial of a Ukrainian prime minister who was a political opponent of Ukraine’s former pro-Russian president, Viktor Yanukovych. Skadden was hired in 2012 by the Ukraine Ministry of Justice, with the assistance of Manafort, to prepare the report.

The Skadden report concluded the political opponent, Yulia Tymoshenko, was denied counsel at critical stages of her trial but her conviction was supported by evidence. The report was released shortly around the time that Manafort’s daughter began working at Skadden, according to the New York Times.

Craig, a former White House counsel in the Obama administration, left Skadden last April. Manafort pleaded guilty in September to conspiring to act as an unregistered agent for the government of Ukraine and Yanukovych. Manafort also pleaded guilty to a second conspiracy count for trying to influence the testimony of two witnesses.

A former Skadden associate who worked on the Ukraine report, Alex van der Zwaan, pleaded guilty last February to lying to investigators.

The more than $4.6 million to be paid by Skadden is the amount of money the law firm received for the Ukraine work. An engagement letter between the Ukraine Ministry of Justice and Skadden stated that the firm would only be paid $12,000. But Skadden understood its fees would be paid by a Ukrainian business person, according to the DOJ press release. The money the firm eventually received came from a Cypriot bank account controlled by Manafort.

Skadden cooperated extensively in the investigation, according to the settlement agreement.

Skadden provided this statement to the ABA Journal: “The civil settlement brings the firm closure with the U.S. government regarding issues relating to a report we produced for the government of Ukraine in 2012. As part of this resolution, the firm will be registering with the FARA unit of the Department of Justice in connection with the work we conducted and will pay to the U.S. Treasury funds we were paid for that engagement. We have learned much from this incident and are taking steps to prevent anything similar from happening again.”

Related article: “Full disclosures: In the wake of the Mueller investigation, law firms are making sure they comply with the Foreign Agents Registration Act”

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