According to Thursday's indictment, Craig made false statements to the Justice Department's Foreign Agents Registration Act (FARA) unit, regarding lobbying work he did for the Ukrainian government against former PM Yulia Tymoshenko in 2012.
Craig, 74, is the first prominent Democratic figure to be charged as a result of a foreign lobbying investigation spun out of Mueller's investigation. The charges come about three months after Craig's former law firm agreed to pay more than $4.6 million and publicly acknowledge that it failed to register with the government for its work for the Ukraine.
After the firm's work attracted the attention of the Justice Department's FARA unit in 2012 and 2013, the indictment says Craig misled officials about his interactions with reporters and his involvement with a public relations firm in securing news media coverage about his law firm's report.
"This case was thoroughly investigated by the SDNY and that office decided not to pursue charges against Mr. Craig".
He is accused of lying to the Justice Department about his work after he left the White House on a legal review that largely vindicated the prosecution of a political enemy of Viktor Yanukovych, the Russian-aligned president of Ukraine at the time.
Under US law, all lobbyists for foreign governments must register with the department.
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In the statement, his attorneys, William Taylor and William Murphy, said, "Mr. Craig is not guilty of any charge and the government's stubborn insistence on prosecuting Mr. Craig is a misguided abuse of prosecutorial discretion".
According to the indictment, from the start of the work on the report, Craig didn't want to register as an agent for Ukraine "at least in part because he believed doing so could prevent him or others at [Skadden] from taking positions in the federal government in the future". The Justice Department has said it was Paul Manafort, who later became Trump's campaign manager, who arranged to hire Skadden to work for Ukraine. Manafort agreed they failed to disclose their lobbying effort, which included disseminating the Skadden report to USA government officials. That includes a case against Manafort, who was recently sentenced to more than seven years in prison. The firm also acknowledged it had been paid $4.6 million for the report and not just $12,000, as the Ukrainian government had said at the time.
Craig's lawyers denied that he had lied about his activity. Last year, Alex van der Zwaan pleaded guilty to lying to the special counsel's office, admitting that he misled investigators about his discussions related to Skadden's work in preparing the report. Craig's lawyers said they believe the NY prosecutors declined to prosecute the case.
Separately, prosecutors in NY have been investigating whether foreign lobbying rules were violated by two other prominent Washington figures: Tony Podesta, a Democratic lobbyist who once owned one of Washington's leading firms, and Vin Weber, a former Republican congressman who helps lead the Washington office of Mercury.