Flaunting his wealth helped to bring down Paul Manafort

Living too large is often what brings criminals down.

Topping the news right now is the indictment of two Trump campaign officials as part of the government’s investigation into Russia’s meddling in the 2016 election.

The indictment alleges that former Trump campaign manager Paul Manafort and his associate Rick Gates earned millions working as agents of the Ukraine government. They are accused of hiding much of this money, which they allegedly used to pay for their luxurious lifestyles.

The indictment says, “In order to hide Ukraine payments from United States authorities, from approximately 2006 through at least 2016, Manafort and Gates laundered the money through scores of United States and foreign corporations, partnerships, and bank accounts.”

In such cases, it always comes down to “follow the money.”

Manafort is accused of laundering more than $18 million. Gates allegedly transferred more than $3 million from offshore accounts.

I’m programmed to look for financial lessons in most things. So I was particularly interested in the details coming out about what Manafort and Gates did with their supposed ill-gotten gains. Here’s what the indictment says:

• “Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income. Manafort, without reporting the income to his tax preparer or the United States, spent millions of dollars on luxury goods and services for himself and his extended family through payments wired from offshore nominee accounts to United States vendors.”

• Manafort allegedly withdrew money from offshore accounts to purchase multimillion-dollar properties. Some of his spending also allegedly included the purchase of four Range Rovers that cost a total of $210,705, and a Mercedes-Benz for $62,750; landscaping at a Hamptons property; and improvements to a house in Palm Beach, Florida. Manafort allegedly also spent $934,350 on antique rugs at a store in Alexandria, Virginia; close to $850,000 on clothing at one men’s store in New York between 2008 and 2014; and another half-million dollars at a clothing store in Beverly Hills.

• Gates allegedly used money from offshore accounts to “pay for his personal expenses, including his mortgage, children’s tuition, and interior decorating of his Virginia residence.”

At this point in the investigation, what’s the money lesson for those of us watching all of this unfold? How can we relate this to our everyday lives?

How about this: Why do so many people have a need to show their wealth?

One Princeton University economic researcher examined the need for people to flaunt their financial status. In a 2004 paper, Ori Heffetz wrote, “In the signaling game we call life, when deciding upon a course of action, we consider not only the direct effects of our choice on our welfare, but also the indirect (or social) effects resulting from society observing our choice.”

I’ve often heard people say that they look forward to the day they can buy a certain luxury-brand car. But practically speaking, the goal of a vehicle is to get you from point A to point B. So why does it matter so much about the make of the car if everything else is equal in terms of reliability and safety?

It matters to many because it signals they’ve arrived at some destination point of social standing. It’s a sign of success. People like to tell themselves that their BMW, Mercedes or Range Rover is far superior to other vehicles. But on Consumer Reports’ 2017 list of the 10 most reliable cars, half are priced under $30,000.

Often the motivation behind a purchase is the desire to draw attention to the appearance of affluence. If a Timex watch tells the same time as a Rolex, why then are we impressed with the higher-priced timepiece?

In his 1899 book “The Theory of the Leisure Class,” American economist Thorstein Veblen coined the term “conspicuous consumption” to describe wealthy people who broadcast their bountiful life and attempt to boost their reputation by purchasing expensive things.

“Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure,” Veblen wrote.

But conspicuous consumption is now not limited to the rich. People who can least afford to show their wealth are doing so nonetheless. And they are doing so at the expense of a secure retirement or having savings for a financial emergency.

In Proverbs, there’s a scripture that can keep your conspicuous consumption in check. It says, “One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”

I wonder, if they are convicted, if Manafort and Gates will regret living so large despite the cost.

© 2017, Washington Post Writers Group

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

The livery on a Boeing plane. (Christopher Pike / Bloomberg)
Former Lockheed Martin CFO joins Boeing as top financial officer

Boeing’s Chief Financial Officer is being replaced by a former CFO at… Continue reading

Izaac Escalante-Alvarez unpacks a new milling machine at the new Boeing machinists union’s apprentice training center on Friday, June 6, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Boeing Machinists union training center opens in Everett

The new center aims to give workers an inside track at Boeing jobs.

Some SnoCo stores see shortages after cyberattack on grocery supplier

Some stores, such as Whole Foods and US Foods CHEF’STORE, informed customers that some items may be temporarily unavailable.

People take photos and videos as the first Frontier Arlines flight arrives at Paine Field Airport under a water cannon salute on Monday, June 2, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Water cannons salute Frontier on its first day at Paine Field

Frontier Airlines joins Alaska Airlines in offering service Snohomish County passengers.

Amit B. Singh, president of Edmonds Community College. 201008
Edmonds College and schools continue diversity programs

Educational diversity programs are alive and well in Snohomish County.

A standard jet fuel, left, burns with extensive smoke output while a 50 percent SAF drop-in jet fuel, right, puts off less smoke during a demonstration of the difference in fuel emissions on Tuesday, March 28, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
Sustainable aviation fuel center gets funding boost

A planned research and development center focused on sustainable aviation… Continue reading

Helion's 6th fusion prototype, Trenta, on display on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Helion celebrates smoother path to fusion energy site approval

Helion CEO applauds legislation signed by Gov. Bob Ferguson expected to streamline site selection process.

Water drips from an Alaska Airlines Boeing 737 after it received a water salute while becoming the first scheduled 737 arrival Thursday, Feb. 17, 2022, at Paine Field Airport in Everett, Washington. (Ryan Berry / The Herald)
Boeing and Airbus forecast strong demand for their jets

Boeing and Airbus project more than 40,000 new jets are needed.

Hundreds wait in line to order after the grand opening of Dick’s Drive-In’s new location in Everett on Thursday, June 12, 2025 in Everett, Washington. (Olivia Vanni / The Herald)
Dick’s Drive-In throws a party for opening day in Everett

More than 150 people showed up to celebrate the grand opening for the newest Dick’s in Snohomish County.

Patrick Russell, left, Jill Russell and their son Jackson Russell of Lake Stevens enjoy Dick’s burgers on their way home from Seattle on Friday, Sept. 22, 2023 in Edmonds, Washington. The family said the announcement of the Dick’s location in Everett “is amazing” and they will be stopping by whenever it opens in 2025. (Olivia Vanni / The Herald)
Dick’s Drive-In announces details for Thursday’s grand opening in Everett

Dick’s will celebrate its second Snohomish County location with four days of festivities.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.