Trump campaign chairman helped pro-Russians in Ukraine move money to U.S. firms: AP

[August 18, 2016]  WASHINGTON (Reuters) - U.S. Republican presidential candidate Donald Trump's campaign chairman, Paul Manafort, helped a Ukrainian political party with close ties to Russia secretly move at least $2.2 million to two major Washington lobbying firms, the Associated Press reported on Wednesday.

The AP, citing sources with direct knowledge of the effort, said the transfers were set up in ways to obscure the Ukrainian party's attempts to sway U.S. policies, using a nonprofit organization to distance funds from Ukrainian politicians.

U.S. law requires American lobbyists to register and report in detail any ties to foreign political parties or leaders to the U.S. Justice Department.

The heads of both firms - Podesta Group Inc and Mercury LLC - told the AP they had concluded their work did not merit disclosure to the department, according to the report.

Representatives for Trump and Mercury did not immediately respond to a request for comment.

Podesta Group Chief Executive Officer Kimberley Fritts said its lawyers worked with those at Mercury to determine that registering under the Foreign Agent Registration Act was unnecessary. It also obtained a statement from the nonprofit in question saying it was not directly or indirectly involved with a foreign entity, she said in an emailed statement.

The Podesta Group was founded in 1987 by Tony Podesta and his brother John, who now is campaign chairman for Democratic presidential candidate Hillary Clinton. John Podesta has not been with the firm for several years, but his brother is its chairman.

The AP report comes less than three months before the Nov. 8 election and as polls show Trump slipping behind Clinton.

Trump's campaign on Wednesday announced a staff shake-up replacing Manafort as campaign manager after just two months. He will remain chairman and chief strategist.

The New York Times this week reported Manafort's name was found on secret ledgers showing cash payments designated to him of more than $12 million from a Ukrainian party with Russian ties. Manafort has denied any impropriety.

Ukrainian officials confirmed Manafort's name appeared on a ledger and that more than $12 million had been allocated as an expenditure but said the presence of his name did not mean he received the funds.

Donald Trump's campaign chair and convention manager Paul Manafort at the Republican Convention in Cleveland. REUTERS/Carlo Allegri

Clinton's campaign has said Manafort's associations are a troubling sign of ties between Trump's campaign team and pro-Kremlin elements in Ukraine.

According to the AP, in 2012 Manafort and associate Rick Gates worked on behalf of Ukraine's then-president, Viktor Yanukovych, and helped steer the efforts of European Centre for a Modern Ukraine, an advocacy group that once included members of Yanukovych's party.

The group paid at least $2.2 million to the Washington firms to push positions favorable to the party from 2012 until 2014, when Yanukovych was ousted and fled to Russia, the AP said, citing sources. That work included efforts to counter a potential congressional resolution pressuring Yanukovych to release a political rival from prison, the AP reported.

Gates, who also works for the Trump campaign, told the AP his actions were lawful. He said he and Manafort had introduced the advocacy group to the firms and sometimes consulted with the firms on Ukrainian politics, the report said.

Podesta's Fritts said her firm was unaware that Gates was a consultant to the Ukrainian party when he introduced the advocacy group: "Our assumption was that he was working for the Centre, as we were hired to do."

(Writing by Susan Heavey; Editing by Bill Trott and Jonathan Oatis)

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