US judge questions special counsel's powers in Manafort case

ALEXANDRIA, Va., May 4 (Reuters) - A federal judge on Friday sharply criticized Special Counsel Robert Mueller's criminal case in Virginia against President Trump's former campaign manager, Paul Manafort, and said Mueller should not be granted "unfettered power."

At a tense hearing, U.S. District Judge T.S. Ellis III noted the charges of tax and bank fraud against Manafort had nothing to do with Mueller's investigation into whether the Trump campaign colluded with Russia during the 2016 U.S. election or tried to obstruct justice.

"It's unlikely you're going to persuade me the special counsel has unfettered power to do whatever he wants," Ellis, who was appointed by Republican President Ronald Reagan, said at a hearing on Manafort's motion to dismiss the Virginia charges.

Ellis repeatedly questioned the probe's $10 million budget and said the indictment appeared to serve as a way for Mueller to "assert leverage" over Manafort.

"The vernacular is to sing," he said.

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Notable people who have been fired or resigned from Trump's administration
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Notable people who have been fired or resigned from Trump's administration

Attorney General Jeff Sessions

(AP Photo/Pablo Martinez Monsivais)

White House Communications Director Hope Hicks reportedly announced her resignation after testifying about her job and being required to tell "white lies."

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Secretary of State Rex Tillerson was fired by President Trump in March 2018.

(Joshua Roberts/Bloomberg via Getty Images)

White House aide Omarosa Manigault insists she resigned and was not fired from her role in December 2017.

(Drew Angerer/Getty Images)

Environmental Protection Agency (EPA) Administrator Scott Pruitt resigned from his position on July 5, 2018 after a number of ethics scandals.

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Sally Yates was fired from her post as acting attorney general when she refused to enforce President Trump's travel ban. 

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Rob Porter resigned as White House staff secretary in February 2018 amid abuse allegations made by his ex-wives.

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White House Counsel Don McGahn

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H.R. McMaster was replaced by John Bolton as national security advisor in March 2018.

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White House aide Kelly Sadler left her position in June 2018 after reportedly mocking Sen. John McCain.

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Director of the National Economic Council Gary Cohn announced his resignation in March 2018 after becoming a key architect of the 2017 tax overhaul 

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Michael Flynn resigned as national security adviser in February after misleading Vice President Mike Pence about his interactions with Russian officials. 

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President Trump announced David Shulkin was out as secretary of veterans affairs by sending a tweet announcing he had nominated his personal physican, Ronny Jackson, to replace him on March 28, 2018.

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Trump fired FBI Director James Comey in early May.

(REUTERS/Jonathan Ernst)

Former White House Press Secretary Sean Spicer resigned in July.

(June 20, 2017. REUTERS/Jonathan Ernst)

Former White House Chief of Staff Reince Priebus resigned in July.

(REUTERS/Joshua Roberts)

Former advisor to President Donald Trump Steve Bannon resigned in August.

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Anthony Scaramucci, former White House communications director was fired in July after just 10 days on the job. 

(Photo by Jabin Botsford/The Washington Post via Getty Images)

Trump fired Deputy Chief of Staff Katie Walsh amid White House leaks in April.

(REUTERS/Carlos Barria/Files)

Former Secretary of Health and Human Services Tom Price resigned in late September. 

(Photo by Jabin Botsford/The Washington Post via Getty Images)

President Trump fired U.S. Attorney in Manhattan Preet Bharara in March.

(REUTERS/Aaron P. Bernstein)

Mike Dubke resigned as White House communications director in late May.

(Photo by Jabin Botsford/The Washington Post via Getty Images)

Walter Shaub, former Director of the United States Office of Government Ethics in Washington, DC resigned in July.

(Photo Linda Davidson/The Washington Post via Getty Images)

White House deputy assistant Sebastian Gorka resigned in August 2017. 

(REUTERS/Joshua Roberts)

Rick Dearborn, White House Deputy Chief of Staff for Legislative Affairs, left the White House in December 2017.

(REUTERS/Aaron P. Bernstein)

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The sharp tone of the judge's comments could spell trouble for Mueller's case against Manafort and put even greater pressure on Deputy Attorney General Rod Rosenstein to rein in the Russia investigation.

It was the first time Manafort's arguments about the scope of Mueller's powers appeared to gain any traction in a federal court.

Manafort also faces separate charges in Washington D.C., where he is accused of conspiring to launder money and failing to register as a foreign agent when he lobbied for the pro-Russia Ukrainian government.

Manafort attorney Kevin Downing has argued the charges must be dismissed because the FBI investigation dates to 2014, and therefore did not arise from Mueller's probe.

The hearing on Friday was the third time Manafort has tried to get charges against him dismissed. A civil case alleging the Justice Department's order appointing Mueller was overly broad was tossed last month.

He also asked for dismissal of the Washington-based criminal charges on similar legal grounds, but there has not been a ruling.

Ellis did not rule on the motion to dismiss on Friday.

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Michael Dreeben, the deputy solicitor general who is working with Mueller, conceded that Mueller inherited the probe into Manafort after his May 2017 appointment by Rosenstein but said the special counsel's investigative scope covered the activity in the indictment.

"Cover bank fraud in 2005 and 2007? Tell me how!" Ellis asked.

In an August 2, 2017, memo, Rosenstein authorized Mueller to investigate whether Manafort "committed a crime or crimes arising out of payments he received from the Ukrainian government before and during the tenure of President Viktor Yanukovych."

The former Ukrainian leader was removed from power and fled to Russia in February 2014, more than two years before Trump declared his candidacy for president.

REDACTED MEMO

Ellis complained the bulk of that August memo he received was highly redacted. He told Mueller's office to take two weeks to consult with U.S. intelligence agencies to see if they would sign off so that he can personally review a sealed, unredacted version of the memo.

Dreeben told him the redacted portions did not pertain to the Manafort case.

"I'll be the judge," Ellis said.


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Paul Manafort indicted in Russia probe
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Paul Manafort indicted in Russia probe
U.S. President Donald Trump's former campaign manager Paul Manafort arrives for a hearing at U.S. District Court in Washington, U.S., November 2, 2017. REUTERS/Aaron P. Bernstein
Kevin Downing (C), attorney for President Donald Trump's former campaign manager Paul Manafort, arrives for a hearing at U.S. District Court in Washington, U.S., November 6, 2017. REUTERS/Yuri Gripas
Paul Manafort, former campaign manager for U.S. President Donald Trump, departs after a bond hearing at U.S. District Court in Washington, U.S., November 6, 2017. REUTERS/Joshua Roberts
Paul Manafort, former campaign manager for U.S. President Donald Trump, departs after a bond hearing at U.S. District Court in Washington, U.S., November 6, 2017. REUTERS/Joshua Roberts
U.S. President Donald Trump's former campaign manager Paul Manafort departs U.S. District Court after a hearing in the first charges stemming from a special counsel investigation of possible Russian meddling in the 2016 presidential election in Washington, U.S., October 30, 2017. REUTERS/Jim Bourg
Former Trump 2016 campaign chairman Paul Manafort (L) leaves U.S. Federal Court after being arraigned on twelve federal charges in the investigation into alleged Russian meddling in the 2016 U.S. presidential election in Washington, U.S. October 30, 2017. REUTERS/James Lawler Duggan
Former Trump 2016 campaign chairman Paul Manafort (L) leaves U.S. Federal Court after being arraigned on twelve federal charges in the investigation into alleged Russian meddling in the 2016 U.S. presidential election in Washington, U.S. October 30, 2017. REUTERS/James Lawler Duggan
Former Trump campaign manager Paul Manafort, one focus of special counsel Robert Mueller's investigation into alleged Russian meddling in the 2016 U.S. presidential election, hides behind his car visor as he leaves his home in Alexandria, Virginia, U.S. October 30, 2017. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
U.S. President Donald Trump's former campaign manager Paul Manafort departs U.S. District Court after a hearing in the first charges stemming from a special counsel investigation of possible Russian meddling in the 2016 presidential election in Washington, U.S., October 30, 2017. REUTERS/Jim Bourg
U.S. President Donald Trump's former campaign manager Paul Manafort arrives for a hearing at U.S. District Court in Washington, U.S., November 2, 2017. REUTERS/Aaron P. Bernstein
U.S. President Donald Trump's former campaign manager Paul Manafort uses a sun visor to block the view of photographers as departs U.S. District Court after a hearing in the first charges stemming from a special counsel investigation of possible Russian meddling in the 2016 presidential election in Washington, U.S., October 30, 2017. REUTERS/Jim Bourg
WASHINGTON, DC - NOVEMBER 2: Ex Trump campaign official Paul Manafort, center, departs U.S. District Court with his attorney Kevin Downing, left, on November, 02, 2017 in Washington, DC. (Photo by Bill O'Leary/The Washington Post via Getty Images)
Paul Manafort, former campaign manager for Donald Trump, walks out of the U.S. Courthouse after a bond hearing in Washington, D.C., U.S., on Monday, Nov. 6, 2017. Manafort, 68, an international political consultant, was accused along with his right-hand man, Rick Gates, of lying to U.S. authorities about their work in Ukraine, laundering millions of dollars, and hiding offshore accounts. Both pleaded not guilty on Oct. 30. Photographer: Andrew Harrer/Bloomberg via Getty Images
WASHINGTON, DC - NOVEMBER 02: Former Donald Trump campaign manager, Paul Manafort arrives at the E. Barrett Prettyman United States Courthouse on Thursday November 02, 2017 in Washington, DC. Manafort faces several charges. (Photo by Matt McClain/The Washington Post via Getty Images)
WASHINGTON, DC - NOVEMBER 06: Former Trump campaign manager Paul Manafort and his wife Kathleen arrive at the Prettyman Federal Courthouse for a bail hearing November 6, 2017 in Washington, DC. Manafort and his former business partner Richard Gates both pleaded not guilty Monday to a 12-charge indictment that included money laundering and conspiracy. (Photo by Mark Wilson/Getty Images)
WASHINGTON, DC - NOVEMBER 06: Kevin Downing, attorney of former Trump campaign chairman Paul Manafort, arrives at a U.S. District Court House November 6, 2017 in Washington, DC. Manafort and his associate Rick Gates are scheduled to be back in court for a bond hearing this morning after they pleaded not guilty on October 30 to charges in a 12-count indictment, ranging from money laundering to acting as unregistered agents of Ukraine's former pro-Russian government. (Photo by Alex Wong/Getty Images)
Paul Manafort, former campaign manager for Donald Trump, right, arrives to the U.S. Courthouse for a bond hearing in Washington, D.C., U.S., on Monday, Nov. 6, 2017. Manafort, 68, an international political consultant, was accused along with his right-hand man, Rick Gates, of lying to U.S. authorities about their work in Ukraine, laundering millions of dollars, and hiding offshore accounts. Both pleaded not guilty on Oct. 30. Photographer: Andrew Harrer/Bloomberg via Getty Images
UNITED STATES - NOVEMBER 6: Former Trump campaign chairman Paul Manafort leaves the E. Barrett Prettyman U.S. Courthouse after a court hearing on the terms of his bail and house arrest on Monday, Nov. 6, 2017. (Photo By Bill Clark/CQ Roll Call)
WASHINGTON, DC - NOVEMBER 02: Richard Gates arrives at the Prettyman Federal Court Building for a hearing November 2, 2017 in Washington, DC. Gates and former business partner and former Trump campaign chairman Paul Manafort both pleaded not guilty Monday to a 12-charge indictment that included money laundering and conspiracy. (Photo by Chip Somodevilla/Getty Images)
WASHINGTON, DC - OCTOBER 30: Kevin Downing, who is an attorney for Paul Manafort exits the William B. Bryant Annex United States Courthouse after Manfort was indicted on several charges on Monday October 30, 2017 in Washington, DC. (Photo by Matt McClain/The Washington Post via Getty Images)
WASHINGTON, DC - OCTOBER 30: Former Trump campaign chairman Paul Manafort gets into his car after leaving federal court, October 30, 2017 in Washington, DC. Paul Manafort and Rick Gates, have been indicted by a federal grand jury in the investigation into Russian meddling in the U.S. election. (Photo by Drew Angerer/Getty Images)
Paul Manafort, former campaign manager for US President Donald Trump, leaves the E. Barrett Prettyman United States Court House after being charged October 30, 2017 in Washington, DC. President Donald Trump's former campaign chairman Paul Manafort pleaded not guilty Monday to charges of conspiracy and money laundering after the Justice Department unveiled the first indictments in the probe into Russian election interference. Manafort, 68, and business partner Rick Gates, 45, both entered not guilty pleas in a Washington court after being read charges that they hid millions of dollars they earned working for former Ukrainian politician Viktor Yanukovych and his pro-Moscow political party. / AFP PHOTO / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Paul Manafort, former campaign manager for Donald Trump, right, exits the U.S. Courthouse in Washington, D.C., U.S., on Monday, Oct. 30, 2017. The federal investigation into whether President Trump's campaign colluded with Russia took a major turn Monday as authorities charged three people a former campaign chief, his business associate and an ex-policy adviser -- with crimes including money laundering, lying to the FBI and conspiracy. Photographer: Zach Gibson/Bloomberg via Getty Images
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Ellis asked why a run-of-the-mill bank fraud case with no "reference to any Russian individual or Russian bank" could not be handed over to the U.S. Attorney's Office in the Eastern District of Virginia.

As an example, he pointed to the FBI probe into Trump's personal lawyer Michael Cohen and said the special counsel had turned that matter over to prosecutors in Manhattan.

Dreeben declined to discuss the Cohen case. Rosenstein's initial May 2017 order laying out the scope of the probe, he told the judge, did not reveal all the details because they involve sensitive national security and counterintelligence matters that could not be divulged publicly but were conveyed to Mueller.

Ellis said Dreeben's answer essentially meant the Justice Department was "not really telling the truth" about the probe. (Reporting by Sarah N. Lynch and Susan Heavey editing by Jonathan Oatis and Cynthia Osterman)

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