Author Archive for Jonathan Lurie

MLB Players Association Accusing Four Teams of Breaking Union Agreements

Players from the Pittsburgh Pirates, Tampa Bay Rays, Oakland A’s, and Miami Marlins (notably currently owned by former Yankee Derek Jeter) have brought a grievance through the MLB Player’s Association–the long standing baseball players union–over teams pocketing shared revenues instead of using them to improve on field performance through payroll, free agency, equipment, and other avenues as required by the MLB’s collective bargaining agreements.

This isn’t quite the same as a lawsuit, the MLB agreements handle most everything through an extremely complicated set of internal rules and regulations. However, in terms of burden of proof and possible consequences for the teams accused, it might as well be a real legal action.

All four of these teams stand to potentially lose funds, have strict sanctions placed on them by the Commissioner, or any number of other punitive actions. Most of all, it presents–if you’ll pardon the pun–an opportunity to look into the inside baseball of the sports law surrounding the Major League Baseball Association.

MLBRevenue Sharing and the Collective Bargaining Agreement

An enormous amount of the inner workings of how baseball players, their clubs, and the league at large interact has long been hammered out through collective bargaining agreements between the clubs, the league, and the MLB Players Association. This agreement is frequently referred to as the “Basic Agreement.”

Not so long ago, the MLB Players Association and the league at large reached a new collective bargaining agreement recently entered for the years 2017-2021. It is a 373 page behemoth which covers everything from clubs giving players loans to rules for international play to–of course–revenue sharing. However, as with most union agreements, nothing in the collective bargaining agreement is simple. Even just the revenue sharing provisions are 18 pages long.

The new revenue sharing provisions require all clubs within the league to contribute its average net local revenue–calculated by looking at the net local revenues of the last three years with extra weight on the most recent year–to a pool to be divided equally among the clubs every year. At least theoretically it is distributed evenly.

Each club has quite different revenues so they all contribute different amounts–the more you contribute the less you’re obviously getting of your equal distribution. Sometimes this means you pay more than you receive. In these cases, you are classified as a “revenue sharing payor.”

Not surprisingly, if you make money out of the deal you are a “revenue sharing payee”. Every year the clubs keep track of their contributions and get a receipt for them, as well as keeping track of whether they are a payor or a payee. The biggest clubs in the league, such as the Yankees, are disqualified completely from receiving revenue sharing distributions. Worth noting given the recent accusations, the Oakland A’s would normally be disqualified but instead receive progressively less as a distribution over the next several years.

We’ve mentioned that the clubs keep track of whether they are payors or payees in a year. This is because the clubs you donate the most qualify for a refund on their contributions. In the first year as a payor, a club receives 100% of this refund amount. However, the amount they receive becomes less for each successive year they make above the average and are a payor.

This goes on for five years until, after five consecutive years as a payor, the club gets no refunds whatsoever. Every year, decreases the refund by a “tier” of one to five. Even if a club is a payee for one year, it doesn’t change its refund tier unless until the club is a payee for two years straight. If that happens, the club goes back to tier one for refund purposes. As the tiers go up and a club forfeits more of their refund, that extra money goes to payee clubs and funds to benefit the players themselves.

There is also something called the Commissioner’s Discretionary Fund which allows the Commissioner to give out $15M every year to clubs as they see fit–so long as no club receives more than $4M. The clubs request these funds through written applications to the Commissioner.

The idea behind this revenue sharing is that it takes two strong teams to have a good game of baseball. With that in mind, the Basic Agreement requires clubs to–as we’ve discussed a bit already–use these funds from revenue sharing and the Commissioner’s Discretionary fund to improve performance on the field through investment in players, team personnel, equipment, etc.

Where clubs don’t do this, as the grievances against these four teams allege, the Major League Constitution (yes, that is a real thing) allows the Commissioner of the MLB to impose penalties on the teams. They can also force a change in the agreement or the way clubs choose to follow the rules to further protect the players.

Every year, all the teams are required to submit a report before August 15th which covers how they put their revenue sharing funds to use to improve team performance. This report requires some discussion of strategy to improve the team going forward and a summary of expenses. The MLB has the power to audit these reports whenever they like.

How Could This Proceed?

Under the Basic Agreement, some of the teams accused such the Pirates and the Marlins–well on the smaller side of teams and perennial payees in the revenue sharing scheme–could stand to lose a substantial amount if the grievances get purchase and the Commissioner ends up coming down on them. However, as mentioned, they vehemently deny the accusations and–fortunately for the teams but unfortunately for the accusing player–the MLB has released statements saying they do not believe the accusations to be true.

Regardless, the Basic Agreement is very clear on the procedure to revenue sharing grievances. These sorts of grievances will always go to arbitration if a settlement isn’t reached. Even the arbiter himself is set as the MLB always uses the same man–Mark Ivings–as their independent arbitrator.

The arbitrator will consider the expenditures the clubs have made with the revenue sharing funds, along with the way they’ve used the funds in the past, and look to see that they are being used properly. Normally, the MLB Players Association itself has the burden of proving that they’ve been on the up and up in their use of funds. The only exception to this is when a team’s payroll is enough lower than their revenue sharing receipts. As of now, it doesn’t look like any of the four clubs accused fall into this exception.

Given the stance of the MLB on the matter, this is likely going to be an uphill battle for the MLB Player’s Association if the grievance makes its way to arbitration. If they succeed, we may see some major shakeups in some of the smaller clubs–something to keep an eye on if you’re a fan of the Pirates, the Rays, the A’s, or the Marlins.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Never Again: Florida Gun Laws After the Parkland Shooting

Of all the states expected to act, Florida has certainly seen the most scrutiny seeing as the actual shooting took place there. However, despite protests and support from the Florida governor, Florida lawmakers recently rejected a law to ban assault rifles. To be more accurate, Florida passed the law for 15 minutes before calling for a roll call vote in which several representatives got cold feet when they realized they would be recorded as supporting the law. This led to a reversal of position on the banned. However, Florida’s newly passed laws do take several steps in changing how guns can be owned and sold in Florida.

New Florida law has extended the usual waiting periods on handguns to all firearms and required a complete background check before the waiting period can end regardless of how long it takes. There is an exception to this rule for law enforcement officers, members of the military, those with concealed carry permits, and those who have completed a 16-hour hunter safety course.

The new law also raised the minimum ownership age for rifles and shotguns to 21 years old as well as bans use, possession, and sale of bump stocks (an accessory which can turn a gun from semi-automatic to fully automatic).

The law also makes a Public Safety Commission to make recommendations on school safety, creates a safety officer for each district and school, provides funds for mental health treatment, and a few other logistic steps to help with safety.

parklandThe most publicized of these steps has likely been Florida’s new marshal program, which allows teachers to undergo training to carry a gun and apparently respond to active shooter situations. This approach has been a common suggestion recently, but frankly has many issues that make implementation problematic.

There are logistical problems such as the increased insurance costs that will certainly be associated with having armed teachers. What’s more, it is likely a matter of time before a teacher makes a judgment call to shoot a student and the school will be left to decide whether they made the right decision or overreacted.

This is even more problematic in Florida as the stand your ground laws would allow an armed teacher to avoid liability for shooting any student they believe poses a serious threat to cause death or grievous bodily harm–active shooter or no.

Even beyond these complications, the idea of arming teachers and requiring them to fight off an active shooter is questionable at its core. The armed deputy sheriff on duty during Parkland chose not to go in and confront Cruz, is it reasonable to ask that of a teacher we already don’t give enough funding for school supplies?

Not only have some of the laws that were passed by Florida enough to raise an eyebrow or two, the things they chose not to pass also bear mentioning. The Florida Senate rejected dozens of proposed changes including: allowing police to seize weapons from somebody under a domestic violence injunction, gun registry rules, allowing local governments to pass stronger gun laws than the state, background checks for out of state gun purchases, banning large capacity magazines, requiring trigger locks and lockboxes for guns, mental health examinations for a concealed carry permit, assault rifle bans around schools, and many more.

What Have Other States Done in Response to Parkland?

While Florida’s changes have certainly received the most media attention, Parkland has inspired changes in gun law across the nation. Here are just some of the moves made in the last month.

In Michigan, lawmakers have been considering provisions such as arming teachers and confiscating guns from people suffering from mental illness. California has proposed 10 different gun control laws including background checks on parts used to assemble assault rifles, create an Armed Prohibited Persons list for those who may be a danger to themselves or others, a law which takes guns from those hospitalized for suicide attempts twice in one year, and more.

Oregon is one of the few states who have already taken concrete action by barring those convicted of stalking and domestic violence (as well as those under restraining orders) from buying or owning guns or ammunition. Rhode Island’s Governor signed an executive order taking guns from those who pose a danger to themselves or others.

In Vermont, Gov. Phil Scott changed positions on gun laws after initially saying that he felt there was no need for change after Parkland. A recent near miss where a student was caught planning a school shooting has led the Republican governor to start considering new legislation.

Vermont is considering several new measures and their Senate Judiciary Committee has already passed a bill allowing law enforcement to remove guns from people considered at extreme risk of harming themselves or others. Illinois and a few other states are considering similar moves.

Other states, such as Ohio, are still considering how to move forward. Indiana has made moves in the opposite direction since Parkland, removing restrictions on gun ownership in the last few weeks. Kansas is thinking about lowering the age restriction on concealed carry permits from 21 to 18, a measure which would have allowed the Parkland shooter himself to get a concealed carry permit.

South Dakota has decided to go the route of outright allowing guns on school grounds and churches as a so called “self-defense” measure. They are also considering doing away with the concealed carry permit altogether and just allowing any gun owner to carry a gun however they like.

Texas has taken an informational route, ordering that safety information be distributed to all schools as well as planning safety audits for Texas schools requiring clear emergency plans.

What Can We Do?

Parkland has led to a flurry of activity at all level of government when it comes to guns and gun control. The approach has been wildly different from state to state and even at a federal level. The truth is Parkland has shocked the nation, but it is one of many mass shootings just like it across the nation–with almost one mass shooting a day in the U.S. this year. The conversation on how to best deal with this will continue, however there is still a lot of discussion to be had if we want to find a true solution.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Union Weakening Right to Work Law Upheld in Kentucky

Right to work laws are a misleadingly named movement being pushed across the nation. While they may sound like efforts to ensure jobs, they are actually a push to pass laws which undermine the power of unions by allowing employees to opt out of union dues while still requiring unions to provide these opt out employees full rights and protections.

The laws are a product of a federal law from 1947 called the Taft-Hartley Act. The act prohibited employers from running closed shops—agreements where they only hire unionized workers.  However, it allowed union shops—agreements where employees are required to join a particular union within a certain period of time after being hired.  The act also has a section which allows states to ban union shops as well.

The laws based on this section are right to work laws and are, at this point, exclusively state law. While they vary state to state, they all do essentially the same thing—allow an employee to opt out of paying union dues while still benefitting from union representation. Due to the exclusive bargaining agreements unions provided by the National Labor Relations Board (NLRB), The laws do not apply to federal workers, railroad workers, and airline workers.

right to workThere’s obviously two sides to these laws, not everybody can afford union dues and required union fees can seem like a hefty blow to a person’s paycheck. There are certainly times where it can feel like you’re paying a union to do nothing for you. However, unions truly are the backbone to quite a bit of improvement in pay, working conditions, and more. These rules leave unions without funds to protect their members, putting them in a tough position.

A couple of interest groups have been making a particularly hard push for right to work laws, especially in middle America and the south, for the last several years. The laws have seen a hodgepodge of success. However, through repeated attempts to push these rules the state of the law has slowly ratcheted further and further towards right to work despite constitutional challenges to the laws in state and federal courts. As it is, you are already generally allowed to opt out of union political activities and only pay for representation as to your wages and rights in the workplace.

At this point, there are 28 states with some sort of right to work law in place. These states include: Alabama, Arizona, Arkansas, Kansas, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri (passed in 2017 and postponed to this year), Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, Wyoming, and-of course-Kentucky. This last state has seen its right to work law recently challenged in court. However, just around a week ago the court ruled to dismiss these challenges to the law.

What Does the Kentucky Ruling Say?

The Kentucky court case challenging the constitutionality of the law made an argument we’ve discussed before in the context of right to work laws–they challenged the law as an unconstitutional government taking. A little over a year ago, we talked about a similar Wisconsin case bringing this argument.

We also said it was unlikely argument to succeed. Takings deals with the government taking all or part of property from a private party, either through eminent domain (the government simply laying claim to the property) or through regulation removing all use for the property.  Not only does takings generally deal with real property (houses and land and such), making it fairly unsuited to an argument regarding  the potential profits from services provided by a union, the 7th Circuit has explicitly considered and rejected the argument of takings when it comes to the constitutionality of right to work laws.

The 7th Circuit ruling argued that unions are compensated for their representation by their government sanctioned exclusive bargaining position with employers. Since the article on the Wisconsin case, the unions have lost their takings based challenges.

The Kentucky argument, brought by Teamsters’ Local 89, made a similar argument to Wisconsin’s. They followed a common line of argument in these sort of cases that the government is taking their private property without compensation by legally forcing them to provide services to people who are not paying members of the union.

However, Kentucky’s arguments went about the same as the Wisconsin case. The Judge on the case ruled that there wasn’t a present property interest on the part of the unions that was being deprived by the government. Instead, the most the unions could argue was a speculative future loss of income. Thus, he dismissed the case. He further dismissed claims of arbitrary government action and equal protection arguments.

This has been the trend in cases like this, there is certainly a property interest that will be lost and the law requires these unions to eat this loss if they want to keep their doors open. However, the common argument courts have made against this is that the unions have a clear recourse–pack up and go home. The unions are put in their position by their own choice, thus undermining the takings argument in the minds of many judges who have ruled on the matter. We’ve seen similar lines of reasoning in right to work cases such as one out of Indiana back in 2014.

Right to Work Across the Country

Right to work laws are an ongoing issue, they continue to be pushed nationwide. The spread of these laws is still ramping up–we may see challenges reach the Supreme Court before too long. The Supreme Court has already heard at least on case on the issue back in 2016. However, the death of Justice Scalia and the failure of conservatives in Congress to allow the appointment of a replacement left the issue in a 4-4 deadlock–as many cases ended during that period.

However, with Justice Gorsuch in place, the Supreme Court will have to address these laws eventually. As it is, the consensus seems to be growing among courts hearing these challenges that they are constitutional laws–despite how much they weaken the unions which protect employee rights. As it is, the makeup of the Supreme Court makes it likely that they will support this trend among the Circuit and state courts.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Parkland Shooting and Gun Control Leading Up to It

The February 14th school shooting in Parkland, Florida sent shockwaves around the nation as one of the most horrifying of the 52 mass shootings that have occurred in U.S. so far in 2018. The enormous attention the horrifying shooting has brought in the media, there has been an accompanying increased scrutiny on gun control laws and debate over how the tragedy might have been prevented.

The news has covered the actual events of the Parkland shooting in detail; most people already know the specifics of what occurred that day. However, for those who have not, the shooting was committed by a 19-year old Junior Reserve Officers Training Corps student by the name of Nikolas Jacob Cruz. He killed 17 people and wounded at least 15 more.

At the day of the shooting itself, Parkland came to school with an AR-15 semi-automatic rifle. He attempted to create a snipers nest, but after he was unable to shatter a hurricane proof window in a stairwell with 16 shots he changed his plans. His gun ultimately jammed while he still had 150 bullets in his possession, allowing his capture.

parklandHe was arrested alive after his shootings and has charged with 17 counts of premeditated murder. In the wake of the shooting, more information about Cruz has come forward, painting him as an individual with mental disabilities and social media accounts with extremely frequent posts containing anti-black, anti-immigrant, anti-Semitic and anti-Muslim slurs and comments.

His posts even go so far as to advocate the killing of Mexicans, blacks, and homosexuals. He is also seen with many firearms in his social media accounts–including posts accompanied  by threats to commit a mass shooting just like the one in Parkland.

The events of the shooting have led to nationwide boycotts, companies cutting ties with the NRA, and more. Dick’s Sporting Goods recently announced that they would stop selling assault rifles after they realized they had sold Cruz himself a gun just a few months before the Parkland shooting occurred. They determined it wasn’t the same weapon used, but still decided to take the step.

The Parkland has also given rise to enormous scrutiny to gun control laws; scrutiny which has led both the federal government and the states to take a close look at their current gun laws and decide how they want to move forward. With this in mind, let’s take a look at the moves on gun laws out of White House–before and after the shooting. We’ll also examine the moves Florida, along with other states, have made since the shooting.

White House Action on Gun Control Before and After Parkland

After Parkland, it is safe to say that gun laws have become the most discussed topic out of the White House and Congress for the last few weeks. Similarly, President Trump’s actions on gun law–before and after Parkland–have become a frequent topic of media discussion.

For instance, there has been media critiquing President Trump for signing legislation which repealed Obama era rules which made it harder for a person with mental disabilities–such as the Parkland shooter–to get access to a gun. This is true, if a bit of an incomplete story.

The regulation the media is referring to is a rule, passed in the last several months of Obama’s presidency which would have given the National Instant Criminal Background Check System–the commonly used background check system for gun sales–access to Social Security Administration data.

This includes a substantial amount of information on federal mental health benefits which could have limited sales of firearms to those with mental health issues. In fact it is estimated that it would have blocked the sales of upwards of 75,000 weapons to people with documented mental health issues.

However, while Trump did sign the repeal of the rule, the rule itself never actually managed to take effect. Instead, it was repealed under the Congressional Review Act (CRA). The CRA, not particularly commonly used prior to the Trump administration, allows Congress to repeal regulations from the end of the previous administration by a majority vote during the first 60 days of a new administration. Congress did so and Trump signed the repeal nearly a year to a day before the Parkland shooting on February 28th, 2017.

Regardless of the action taken before Parkland, the White House’s position on gun law since the shooting has been inconsistent. First, President Trump came out in a position in line with his highly pro-gun stance during his campaign–calling for arming teachers in the classroom and making little to no comment on any gun control methods besides expressing the need to make sure those with mental health issues are not allowed to own guns–comments which led the media to discuss the record on that topic mentioned above.

However, more recently, President Trump has come out with comments which appear more supportive of gun control laws. Suggesting strengthened background checks at gun shows and, on the internet, restricting sales to younger people, allowing police to take guns away from those with mental illness without a court order and even a potential assault rifle ban. He’s gone so far as to say, “I like taking the guns early…take the guns first, go through due process second.”

This is quite an extreme turnaround, so it is unclear where the White House will settle on this issue. At the very least, this change has certainly not led to a change in positions in Congress.

Federal Law on Gun Sales to Those with Mental Illness

Without changes in Congress, no matter what the President says, there is unlikely to be much movement at a federal level on this issue. When asked about making moves on gun law, Speaker of the House Paul Ryan was recently quoted saying that federal law already prevented sales to those with mental health issues. This is true to an extent, but mostly a substantial exaggeration of the state of the law.

The law Ryan was referring to was the 1968 Federal Gun Control Act. The law does indeed include provisions regarding mental health issues. However, they are extremely narrow and only prevent possession of a firearm by people who have been adjudicated as a mental defective or have been committed to any mental institution. This is a very small portion of those with mental illnesses, even more so because of how narrow these definitions are under the law.

A person is only adjudicated mentally defective if a court or other authority determines their mental illness renders them a danger to themselves or others, or they lack the capacity to manage their own affairs. It can also include situations where somebody is ruled insane in a criminal court case. Committed to a mental institution includes situations where a court or other authority involuntarily commits a person to a mental institution.

This is a quite narrow definition, it’s certainly too narrow to have applied to the Parkland shooter. Cruz himself was not even diagnosed with mental illness, although it’s being argued in his court case. Even had he been diagnosed, it is extremely unlikely that diagnosis would have led to a situation that would have qualified under federal law. The truth is that the federal law covers only a very limited number of situations. This means that it’s down to the states to pass laws if they want laws to help avoid situations such as Parkland.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Charges Brought by Mueller Investigation against Defendants at Home and Abroad

The ongoing investigation into Russian involvement and potential corruption in the 2016 election has been a constant source of news and debate ever since Robert Mueller was appointed to run it. There’s been dramatics, threats from President Trump to fire Mueller, guilty pleas from several associated with the Trump administration such as Michael Flynn and George Papadoupolis, and charges brought against people associated with the Trump campaign such as his former campaign manager Paul Manafort and Manafort’s attorney Rick Gates.

The last week has seen a flurry of activity in the Mueller investigation. First, a little over a week ago, we saw a grand jury indictment (a formal accusation of criminal activity) brought against several Russian nationals and a few businesses. These charges related to the operation of a widespread misinformation campaign to undermine the 2016 presidential campaign.

More recently, just in the last few days, we’ve seen further charges brought by the special investigation. Separate charges were leveled against Paul Manafort and Rick Gates having to do with working for Ukrainian government interests and the efforts they allegedly took to conceal the millions of dollars the Ukrainian government and Ukrainian politicians gave them.

On top of these allegations we’ve learned of a guilty plea from Rick Gates which involves an agreement under which, although the exact details of the deal are not available, it appears which he will cooperate with the Mueller investigation in exchange for at least partial clemency.

MuellerAs of now, all these cases are in very early stages. However, they likely represent the most substantial moves by the Mueller investigation so far. Let’s look at the charges brought over the last week or so as well as what this may mean going forward.

Charges Against Russian Individuals and Corporations

On February 16th of this year, the special counsel brought the first of these two new indictments. Those named in the indictment include the Internet Research Agency LLC, Concord Catering, Concord Management and Consulting, and several Russian nationals who allegedly posed as U.S. citizens as part of a misinformation campaign with a general goal of spreading mistrust for the political system of the U.S. and toward specific political candidates. Also, the indictment also includes Yevgeniy Prighozin–an individual quite close to Vladamir Putin–as the partial financier behind the activities.

The charges brought here include conspiracy to defraud the United States including destruction of evidence and stolen identity elements, as well as conspiracy to commit wire and bank fraud, and aggravated identity theft. The charges related to defrauding the United States are over impairing, obstructing, and defeating the lawful functions of the government through fraud and deceit to interfere with the U.S. political and electoral processes, including the presidential election of 2016.Conspiracy to defraud the U.S. is certainly an uncommon charge to see. However, to break down how it works into its constituent parts, it is essentially an effort by two or more people working together with the goal of damaging the lawful function of any department of the U.S. government. This can be done by cheating them out of money or property or interfering with the functions of government by deceit or trickery.

It doesn’t require the government to suffer any real loss, just the effort itself is enough to commit the crime.The other charges–wire fraud, bank fraud, and aggravated identity theft–are much more common and simple. They work much the way they sound–respectively they are fraud using telecommunications technology, defrauding a bank, and knowingly transferring, possessing, or owning the identification of another without lawful authority. The allegations say there was an enormous amount of subterfuge through social media platforms including Twitter, Facebook (through fabricated news stories, purchased advertisements, and even simple emails accounts. This activity targeted nearly all candidates except Trump and Bernie Sanders.

However, it largely focused on supporting Trump and attacking Hillary Clinton. This all came together into what the allegations describe as information warfare against the United States. The core of the charges of conspiracy to defraud the United States are these attempts is an alleged stated goal on the part of those indicted to spread distrust towards some of the candidates of the 2016 election and the U.S. political system.

Those accused worked largely at the behest of a couple of companies, primarily one known as the Internet Research Agency. Besides the false social media pages and personas, the efforts included fake emails, fake personalities, travel from Russia to the U.S. to gather intelligence for their operations, and more. The evidence even includes memos from the Internet Research Agency telling those accused to use social media sites to “use any opportunity to criticize Hillary and the rest (except Sanders and Trump — we support them).”

These Russian allegations have very little in the way of connection to the actual Trump campaign. The closest the existing evidence comes to this is a couple of requests for aid by Russian nationals in putting mocked up demonstrations which were sent to Trump campaign officials in Florida. However, there’s no indication as to whether these officials even responded.

Charges Against Paul Manafort and Rick Gates

While these initial charges have very little link to the Trump campaign, the more recent charges hit much closer to home. Although it is important to note that the allegations as of now do not include much of anything that could be called a smoking gun linking the actions of Manafort and Gates to President Trump himself.

However, in addition to the previous charges of conspiracy against the U.S., money laundering, and more  brought against Trump’s former campaign manager Manafort and his lawyer Rick Gates last November, we’ve now seen 32 additional counts leveled against the pair in a February 22nd filing. These new charges are primarily allegations of bank and tax fraud associated with efforts to hide funds obtained from Ukraine.

Just before these charges came out, Gates apparently pled guilty to conspiracy to defraud the United States and lying to the FBI and the special counsel. This plea deal has apparently been in the works since January, so it’s unclear whether the plea is because of the new charges or just comes from ongoing negotiations. Either way, it is very likely it will result in Rick Gates testifying as a witness to the deeds of Paul Manafort.

According to the allegations, and those of the previous charges brought against the pair, the two made tens of millions of dollars through work with Ukraine. Funds they allegedly worked to hide from the U.S. by funneling the earnings into front bank accounts abroad. They also allegedly repeatedly lied to banks about their financial situation and source of income to create greater liquidity for funds from Ukraine they otherwise tied up primarily in real estate.

The recent indictments against Manafort and Gates go into quite a bit of detail as to how they allegedly lied to banks to launder money received from Ukraine as well as alleging that they repeatedly outright lied on their taxes about the existence of the funds.

Much of the charges revolve around the provisions of the Bank Secrecy Act. This is a statute which, among other things, requires United States citizens to report to the Treasury any financial interest in, or signatory authority over, any bank account or other financial account held in foreign countries, for every calendar year in which the combined totals of all these foreign accounts exceeds $10,000 at any point during the year. Manafort and Gates apparently had enormous amounts offshore from their dealings with Ukraine which they never reported.

Other allegations in the new indictments include charges that Manafort recruited and paid for former European politicians–recruiting them to lobby for Ukraine within the United States with payments in the realm of 2 million Euros.

These charges are related to the original allegations against Manafort and Gates of acting as undeclared Ukrainian lobbyists as well as a larger money laundering conspiracy. However, it seems they are more likely part of a strategy to turn up the heat on the pair.

What Does All This Mean?

Gates is the third person with connections to the Trump administration to plead guilty to some sort of collaboration with Russia and its allies–following similar pleas by Michael Flynn and George Papadoupolis. What happens with Manafort moving forward, especially now that his lawyer and business partner Rick Gates has agreed to testify, will be interesting to see. Manafort himself was fired as campaign manager by Trump, but kept on as an advisor throughout Trump’s campaign–instead traveling with Trump and working as a liaison between the campaign and the Republican National Committee.

Either way, at this point it’s very early in the proceedings on all fronts–both against the newly indicted Russian nationals and Manafort. While the proceedings have not been the exoneration that President Trump has claimed them to be on social media, there is at least no immediate smoking gun linking the President’s campaign or the President himself to these events at this point.

There is certainly substantial evidence of Russian interference in the campaign, often on President Trump’s behalf or attacking Hillary Clinton. This is along with evidence of larger efforts to undermine the U.S. political system. Where all this evidence will lead remains to be seen. However, it will certainly be interesting to see what happens as the case against Manafort moves forwards.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure.