Jury finds former Obama White House Counsel Gregory Craig not guilty in foreign-influence case

WASHINGTON — Former Obama White House counsel Gregory Craig was acquitted Wednesday of giving false information to federal authorities about his work on behalf of the Ukrainian government amid a new crackdown on illicit foreign influence.

The case against Craig, a high-powered Washington lawyer, was one of a handful of investigations that grew out of special counsel Robert Mueller's investigation into Russian interference in the 2016 election.

Craig was acquitted after more than two weeks of testimony followed by less than five hours of deliberation. Craig faced trial in federal court for falsifying and concealing information about his work for the government of former Ukrainian president Viktor Yanukovych. Americans who work on behalf of foreign governments within the United States are required to register with the Justice Department.

"The jury reached the only verdict it could possibly reach," William Taylor, one of Craig's attorneys, told reporters, questioning why the Justice Department decided to prosecute Craig in the first place. "It's a tragedy. It's a disgrace. We're glad it's over."

Prosecutors said Craig, with the prospect of million-dollar earnings, did work for Yanukovych's government and sought to conceal the extent of his dealings with Ukrainians to protect his reputation. Assistant U.S. Attorney Fernando Campoamor-Sanchez described Craig as a highly experienced attorney and a "man of precision" who very carefully crafted falsehoods to deceive the Justice Department.

Defense attorneys portrayed Craig as a man of integrity, ensnared in a web of dirty tricks spun by individuals who sought to lie on behalf of the Ukrainian government.

"We live in a cynical world," defense attorney William Murphy said, quoting Tom Cruise from the movie, "Jerry Maguire." But in the cynical world that is Washington, Craig stood out as a principled man who tells his friends and colleagues only the "candid truth," Murphy told jurors during closing arguments Tuesday.

The charge against Craig stemmed from work he did in 2012 on behalf of a pro-Russian political faction in Ukraine, part of an illicit lobbying effort by Paul Manafort, President Donald Trump's former campaign chairman who's serving a combined seven-year prison sentence after he was convicted of fraud, conspiracy and other charges in Virginia and Washington.

Craig's law firm, Skadden, Arps, Slate, Meagher & Flom, was hired to write a report about the prosecution of former Ukrainian Prime Minister Yulia Tymoshenko, who was sentenced to seven years in prison for abusing her power. The country's pro-Russia government sought to portray the trial as fair and improve Ukraine's public image amid an international public relations crisis. Craig refused to report the work to the Justice Department, as required by the Foreign Agents Registration Act, or FARA, according to the indictment.

Prosecutors charged that Craig negotiated with the Ukrainian Ministry of Justice for a contract that falsely stated the work would not require reporting to the U.S. government. Registering would have required Craig's firm to disclose that a wealthy Ukrainian paid it more than $4 million for its services, prosecutors said. The funds were routed through a bank account in Cyprus that was controlled by Manafort.

Prosecutors said that Craig was heavily involved in the media strategy ahead of the report's release in late 2012. They said that the Justice Department's FARA unit would have required Craig to register had it known about his role in crafting the press roll out.

At the heart of his trial is his interactions with New York Times reporter David Sanger, to whom he gave an interview and personally delivered an advance copy of the report. Craig also spoke with a reporter from the United Kingdom. After the report was released, Manafort praised Craig for the "effective" roll out and told him that people in Kiev are "very happy" with the report's portrayal in the media, according to the indictment.

"You are the MAN," Manafort told Craig in an email.

More: Former Obama White House counsel Gregory Craig charged with false statements, concealing information

Campoamor-Sanchez said during closing arguments that Craig's crime was not writing the report, or talking to a reporter about it.

"It is not even a crime to get paid $4 million from an account in Cyprus for writing the report," Campoamor-Sanchez told jurors. But, he added, "it is a crime to conceal."

During the trial, which lasted three weeks, including multiple days of selecting jurors, Craig testified that his firm wrote a neutral report about Tymoshenko's prosecution, that he never lied to the Justice Department, that he did not believe his interactions with reporters — which he said were meant to ensure the report's findings were accurately portrayed in the media — required him to register.

Craig also unloaded on Jonathan Hawker, a British public relations expert hired by Ukraine, when asked about press messaging materials that asserted the report did not find evidence Tymoshenko was tried for political purposes. In fact, the report did not make a finding on that issue.

"That's a flat-out lie about our report. We never said that," said Craig, who was visibly flustered.

He added: "After I spent time explaining to him what our findings were and what we were not saying, he comes up with this ... If you're asking me if I suspected Jonathan Hawker would lie about this report, I did."

Murphy, the defense attorney, said Craig did not disclose to the Justice Department that he was part of the media strategy because "in fact, he wasn't." Craig only sought to accurately portray the report's findings in the press, he said.

"He did not want to see his report distorted. He especially did not want to see it distorted in the New York Times, the paper of record," Murphy told jurors. "It was not his purpose to make statements on behalf of Ukraine when he talked to the New York Times."

Craig faced an additional charge in connection to an October 2013 letter he gave the Justice Department's FARA unit. U.S. District Judge Amy Berman Jackson dismissed it days before the trial began, saying the language of the FARA statute was too broad and vague.

Craig was indicted under a little-known law that was passed 80 years ago amid a rise of Nazi propaganda in the United States. But the law, which requires registration as a foreign agent, had been applied very rarely over the past 50 years, with the Justice Department using the statute only seven times in criminal cases, according to a 2016 report by the Office of the Inspector General.

The law was resurrected from obscurity by Mueller, whose team obtained guilty pleas from Manafort, his former associate Rick Gates, and former national security adviser Michael Flynn involving work they did for foreign governments. All were accused of and admitted to making false statements to federal investigators about their dealings with foreign agents.

The Justice Department under Attorney General William Barr has also stepped up efforts to enforce FARA, lifting the curtain on Washington's opaque lobbying industry. Assistant Attorney General for National Security John C. Demers said the Justice Department has refocused on FARA in light of the inspector general's report from 2016, as well as the Russian interference in the presidential election.

"Foreign individuals can speak and they can speak about issues that are important to Americans, but when they speak ... the American public needs to be able to identify the speaker," Demers said during a panel discussion in April by the think-tank American Enterprise Institute. "The problem is when foreign governments or foreign individuals speak through intermediaries, and it's not apparent that the real speaker is not that intermediary who's often an American person, but rather a foreign government."

But the ramped-up enforcement has attracted concerns that it could infringe on First Amendment rights and broadly target foreign media organizations and reporters in the United States.

Robert Kelner, of the international law firm Covington and Burling LLP, said registering as a foreign agent would have a "stigmatizing" effect on international news organizations operating as independent journalists and could cause credentialing problems. Kelner previously represented Flynn, who pleaded guilty to lying to federal investigators, including about work he did on behalf of the Turkish government in 2016.

"It makes it difficult for them to collect information as reporters if they are known to be a foreign agent ... That's highly chilling to the typical journalistic process," Kelner said during the panel discussion. "I actually think the major issue with news organizations is that by labeling them a foreign agent through registration, you really do make it extremely difficult for them to function."

Craig was Obama's White House counsel from 2009 to 2010.

Contributing: Kevin Johnson, Brad Heath, Bart Jansen

This article originally appeared on USA TODAY: Jury acquits Obama White House Counsel Greg Craig