Craig's attorneys have denied wrongdoing, saying the charges are a "misguided abuse of prosecutorial discretion".
Prosecutors say Craig lied to both his law firm and government investigators about the extent and nature of his contacts with the media in connection to a report he prepared on Ukraine. If charged, he would be the first prominent Democrat charged as a result of Robert Mueller's Russian Federation investigation. Craig faces up to five years in prison for each of the two counts.
"I don't want to register as a foreign agent under FARA". Other Democrats - notably Clinton bundler Tony Podesta - have come under suspicion in the probe, but Craig is the first to be indicted.
His indictment represents a dramatic turn for a member of the country's most elite legal circles. Craig defended President Bill Clinton against impeachment and was the first White House counsel under President Barack Obama. He is also a veteran of the Washington-based law firm Williams and Connolly.
They said he spoke to reporters at The New York Times about the report to "make certain that the Times would accurately summarize the report's criticisms of the Tymoshenko trial and not rely on misinformation from Ukraine and its representatives".
Craig worked in Ukraine with Manafort in 2011 and 2012 on a project to determine whether the prosecution of former Ukrainian prime minister Yulia Tymoshenko met global standards set by the European Court of Human Rights. The agreement included providing advice on improving prosecutions by the ministry, according to court filings. Craig - while on the payroll of the Yanukovych government - found that the Yanukovych government's prosecution of its opponent met global standards, in a report that was widely dismissed as a whitewash. Craig refused to sign on to the effort, which involved background conversations with reporters, because it would contradict his and Skadden's position that it wasn't acting as a lobbyist for Ukraine, prosecutors said.
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The indictment also details how Skadden would be paid for the report and Craig's alleged efforts to obscure details of the project's funding.
The report was used by Yanukovych's government to justify Tymoshenko's pretrial detention to the European Court of Human Rights and influence US lawmakers. In an email titled "FARA", Craig wrote that the firm did not proactively disseminate the report to the media and instead provided it upon request to three media outlets that asked for it. "Proper registration under the statute allows the US government and the American people to evaluate the statements and activities of individuals who are serving as agents of foreign principals".
The language of the settlement appeared to pin almost all of the blame on an unnamed partner who matched Craig's description, saying he repeatedly gave "false and misleading" statements to Justice Department officials. The firm then wrote a letter to the department's FARA unit containing Craig's false and misleading statements, which ultimately allowed for him and the firm to avoid registering, the indictment said.
Manafort had organized a public relations campaign for a non-profit called the European Centre for a Modern Ukraine (ECMU).
The Ukrainian government reported that Skadden was paid $12,000 for the report, but prosecutors have said Manafort used an offshore account to help route more than $4 million to the law firm to pay for the work.
Another Skadden lawyer, Alex van der Zwaan, pleaded guilty a year ago to lying to investigators about the report. He was sentenced to 30-days in prison.
The federal investigation began as an offshoot of the Mueller probe that was later handed off to Manhattan federal prosecutors. Craig's lawyers said they believe the NY prosecutors declined to prosecute the case.