Obama White House Counsel Greg Craig to testify in own defense as trial winds down

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Greg Craig accused of making false statements

Obama counsel on trial; Craig has pleaded not guilty.

Ex-Obama White House Counsel Greg Craig will testify in his own defense this week as he tries to beat charges that he concealed information from the Justice Department and Special Counsel Robert Mueller's team about work done for the government of Ukraine.

Defendants in white-collar cases are often reluctant to testify and subject themselves to cross-examination. The unusual move revealed on Monday comes as Craig's lawyers insisted -- as former Trump aides, including onetime campaign manager Paul Manafort and former national security adviser Michael Flynn, have in the past -- that prosecutors are acting overzealously.

The government is expected to rest its case in the trial, which began Aug. 15 in a Washington, D.C. federal district court, as soon as Tuesday. Fox News has learned that Craig's defense team is expected to then put four character witnesses on the stand, in addition to Craig.

“Errors are not criminal,” William W. Taylor III, an attorney for Craig, said in his opening statement. But assistant U.S. attorney Molly Gaston countered, “We are here today because the defendant chose to lie.”

In April, Craig became the first prominent Democrat to be indicted in a case arising from Mueller's now-completed probe into Russian election interference. Mueller referred the Craig case to prosecutors in New York last year after uncovering possible wrongdoing while he investigated Manafort's Ukraine lobbying work.

Greg Craig, former White House counsel to former President Barack Obama, walks into a federal courthouse for his trial, Thursday, Aug. 22, 2019, in Washington. (AP Photo/Patrick Semansky)

The grand jury indicted Craig on two counts of making false and misleading statements to investigators -- including Mueller's team and the DOJ National Security Division's FARA Unit -- in connection with his work on behalf of Russia-backed former President of Ukraine Viktor Yanukovych. One of those counts was dismissed before trial.

The work that drew the Justice Department's attention occurred in 2012, when Craig and his law firm at the time — Skadden, Arps, Slate, Meagher & Flom — were engaged by the government of Ukraine to review the prosecution of Yulia Tymoshenko, a former Ukrainian prime minister, and produce a report on whether the trial met Western standards of justice. Tymoshenko was a political opponent of Yanukovych, a longtime Manafort patron and a political figure whom Gates said he and Manafort had helped get elected.

"People in Kiev are very happy. You are 'THE MAN.'"

— Lobbyist email to Greg Craig, cited in indictment

The report was billed as independent, but critics have said it whitewashed a politically motivated prosecution, and Gates acknowledged on the witness stand that the document was conceived as a way to counter international criticism that Tymoshenko had been denied a fair trial. Prosecutors have also said the project was part of an effort by Ukraine to improve its international standing.

Craig did not register his work with a Justice Department unit tasked with enforcing FARA. Prosecutors said he resisted registering because he feared it would prevent him or others at the firm from getting federal jobs in the future, and because he believed doing so would have meant disclosing that a third party had paid more than $4 million for the report.

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Though prosecutors have not charged Craig with failing to register, they said he gave misleading information when the Justice Department's FARA unit contacted the firm about the work and whether it required registration.

In February 2012, prosecutors said, Craig emailed the co-author of the report, writing, "I don't want to register as a foreign agent under FARA. I think we don't have to with this assignment, yes?"

Two months later, Craig emailed, "I don't really care who you ask [about the FARA requirements] but we need an answer from someone who we can rely on with a straight face."

On December 15, 2012, after the report's release, a lobbyist wrote to Craig that media coverage on the report was glowing: "You are back in the headlines internationally. ... People in Kiev are very happy. You are 'THE MAN.'"

Questioned about his work by federal investigators in 2012 and 2013, Craig allegedly lied and said he did not reach out to media contacts and reporters and promote the report's conclusions prior to its publication. Craig's purported falsehoods came in a letter to the DOJ, and in a nearly hourlong interview with DOJ officials.

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But Craig's lawyers have said that his communications with reporters had nothing to do with efforts to promote the report or his clients and the questions investigators asked were not fairly phrased to elicit the precise reasons for the media contacts.

In a videotaped statement uploaded to YouTube in April, Craig asserted that the report was "independent," and denied helping Ukraine spin the information it contained. He also strongly denied the charges against him, saying he was "always honest" about his activities.

Former Trump campaign associate Rick Gates pleaded guilty to charges brought by Special Counsel Robert Mueller and faces up to 71 months in federal prison. (AP)

Rick Gates, a key cooperator in Mueller's Russia investigation and former Trump campaign aide, testified last Thursday against Craig. Gates is trying to secure leniency in exchange for his cooperation with multiple Justice Department probes.

Gates testified that Manafort arranged for the hiring of Skadden to prepare the report, and said he served as an intermediary for the firm and worked with Craig on a publicity plan for the document. That included giving an embargoed copy to New York Times reporter David Sanger.

Though the article "was not the greatest," it was at least viewed "neutrally" and helped inform other coverage, Gates said.

An email from Manafort to Craig stated: "The pro has emerged again. The initial rollout has been very effective and your backgrounding has been key to it all. At least today, everyone in Kyiv is quite happy."

The Craig prosecution comes amid an ongoing Justice Department crackdown on unregistered lobbying in the U.S. on behalf of foreign governments and other entities. The Mueller team relied on FARA to pursue top former Trump aides, including Flynn, even though FARA had rarely been enforced in the past.

The FARA law, enacted in 1938 to unmask Nazi propaganda in the United States, requires people to disclose to the Justice Department when they advocate, lobby or perform public relations work in the U.S. on behalf of a foreign government or political entity.

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Earlier this year, the law firm paid more than $4.6 million and publicly acknowledged it had failed to register with the government for its work for Ukraine.

Craig's lawyers deny that he lied to the government or his law firm. They acknowledged that Craig spoke to reporters about the report but denied it was part of a public relations campaign that would run afoul of the law.

During cross-examination, defense lawyer Paula Junghans sought to distance Craig from Gates and tried to cast doubt on the idea that her client was doing the bidding of the Ukraine government.

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Fox News' Jake Gibson and The Associated Press contributed to this report.