Gregory Craig. Credit: Diego M. Radzinschi/ALM

After paying $4.6 million in January to resolve allegations connected to its work for Ukraine, the law firm Skadden, Arps, Slate, Meagher & Flom stayed largely silent as one of its former partners, Greg Craig, a former top lawyer in the Obama administration, stared down charges connected to that contract.

As Craig’s trial gets underway in Washington, Skadden is closely watching the action—and testifying. One of the firm’s partners, Michael Loucks, a former U.S. attorney for Massachusetts, was called as the first witness for the government.

Meanwhile, two Gibson, Dunn & Crutcher partners, Kevin Rosen and Stuart Delery, monitored the proceeding for Skadden and were seen speaking with Loucks before he took the stand. Delery, a top Obama-era Justice Department lawyer, had attended hearings leading up to the trial.

For about an hour Thursday, prosecutor Fernando Campoamor-Sanchez questioned Loucks about his role on a project at the core of the government’s case against Craig: A report Skadden prepared in 2012 for Ukraine examining the prosecution of Yulia Tymoshenko, a former prime minister and political rival of the country’s president at the time, Viktor Yanukovych. Craig was the lead attorney on the project.

Craig was charged in April with misleading the Justice Department about his role in the public release of that report to avoid the perceived stigma of registering as a foreign agent. Prosecutors have alleged that Craig avoided the disclosure requirements of the Foreign Agents Registration Act, or FARA, also to conceal the identity of the report’s then-silent financial backer: the Ukrainian steel magnate Victor Pinchuk.

Loucks had worked closely with Craig on the Tymoshenko report and traveled repeatedly to Kiev. Campoamor-Sanchez used his questioning to underscore how the purportedly independent review of Tymoshenko’s prosecution played into Ukraine’s goal of improving its global image in 2012, as the country saw its hopes of joining the European Union hampered by criticism that the case was politically motivated.

Reviewing emails from 2012, Loucks discussed how the firm had suggested a public relations firm, FTI Consulting, to Ukraine and also recalled the extensive media coverage of Tymoshenko’s case.

“We were only there because there was a lot of bad press about it,” Loucks said.

Loucks identified the Skadden team that helped prepare the Tymoshenko report, naming Craig, Cliff Sloan, Matthew Cowie, Alex Haskell and Alexander van der Zwaan as the prosecutor displayed their photographs of them on a monitor in the courtroom. Of that group, Loucks is the only one who remains at Skadden.

Craig retired last year amid the scrutiny of his work on the Ukraine report, and Sloan, a former Skadden partner, left this year for a post at Georgetown Law Center.

Haskell, a former Skadden associate, became a counsel for Democrats on the Senate Judiciary Committee last year, and Cowie, a former counsel at the firm, jumped to Dechert in 2016. Van der Zwaan, who had been an associate, pleaded guilty last year to lying to the special counsel and was sentenced to 30 days in jail. He later lost his law license in the U.K.

Former Skadden associate Alex Van der Zwaan, left, arrives for his sentencing at federal court in Washington on April 3, 2018 with his lawyer William Schwartz of Cooley. Credit: Diego M. Radzinschi/ALM

In his testimony, Loucks said Van der Zwaan was “very fluent in Ukrainian” and helpful in arranging meetings in Kiev for the Skadden team. He recalled agreeing to help prepare the report but said he did not know Craig well at the time.

“The culture at Skadden is you say ‘yes,’” he said.

When asked whether he had inquired about how Skadden was being paid, Loucks said it was not a question he asks of partners who want to bring him onto assignments, “regardless of who it is.” But Loucks said he was dubious of Ukraine’s public claim that it was paying $12,000 for the report—a purported amount that met skepticism in the Ukrainian media. Skadden was, in fact, paid $4 million.

“I didn’t think we were doing it for $12,000, but I don’t remember discussions about the amount,” Loucks said.

Loucks said he did recall discussions about whether Skadden needed to register as a foreign agent in connection with its Ukraine deal. “I accepted what Mr. Craig told me, which was that it was structured in a way that did not require us to register,” Loucks testified.

Later, Loucks said he was not made aware in 2013 of the Justice Department’s inquiry into whether Skadden needed to register under FARA. Loucks will return to court Friday for cross-examination.

William Taylor III, of Zuckerman Spaeder. Photo by Diego M. Radzinschi/ALM

His testimony came soon after opening statements from prosecutor Molly Gaston and Craig’s lead defense lawyer, Zuckerman Spaeder partner William Taylor. The two lawyers delivered dueling narratives of Craig’s involvement in the public relations efforts for the Tymoshenko report.

Gaston told jurors that, when the Justice Department inquired about Craig’s contacts with reporters, he had the choice of telling the truth or concealing the full extent of his efforts.

“We are here today because the defendant chose to lie and conceal,” Gaston said.

“He lied. He told the FARA unit half-truths,” she added, referring to the team tasked with enforcing the disclosure law. “And he concealed the facts of what he had done. That is why we are here today.”

Taylor highlighted Craig’s service in the Clinton and Obama administrations, describing him as an “honorable man” who agreed to examine Tymoshenko’s prosecution on the condition that his report be independent. “He was not signing up to do some kind of whitewash,” Taylor said.

Taylor said Craig was not advancing Ukraine’s public relations efforts but instead counteracting the country’s attempt to spin the Tymoshenko report.

“It’s not an exaggeration to say that, when Mr. Craig saw the talking points, he basically erupted,” Taylor said.

Describing the report’s conclusions as “enormously damaging” to Ukraine, Taylor said Craig was motivated to speak with reporters to protect his reputation and ensure that new organizations covering the report “got it right.”

Skadden’s civil penalty, and its subsequent registration for the Ukraine work, are not expected to be discussed at the trial, which is expected to last two weeks. Skadden’s general counsel, Lawrence Spiegel, and Kenneth Gross, a partner with FARA expertise, are among the other possible witnesses for the prosecution.

U.S. District Judge Amy Berman Jackson of the District of Columbia said she is hopeful each day of the trial will begin at 9:30 a.m. and end between 4:30 and 5 p.m. Breakfast, she said, would be awaiting jurors.

“I would call it, loosely, a continental breakfast,” she said. “There will not be an omelette maker.”

 

Read more:

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Ex-Skadden Associate Gets 30-Day Jail Sentence for Lying to Mueller’s Team

Skadden’s Foreign-Lobbying Settlement Is Off-Limits at Greg Craig’s Trial

Mueller’s Interest in Skadden Presents Unique Crisis Management Challenge

Registering as a ‘Foreign Agent’? Why Law Firms and Lobby Shops Might Demur.