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Reviews of Michael Flynn's consulting work reveal inconsistencies

Flynn says two $40,000 payments were consulting fees. The Turkish businessman who paid him said they were for lobbying. 

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Carlos Barria/Reuters
National security adviser General Michael Flynn arrives to deliver a statement during the daily briefing at the White House in Washington, February 1, 2017.

Targeted in widening investigations of his foreign entanglements, President Trump鈥檚 former national security adviser, Michael Flynn, is at odds with his former Turkish client over two unusual payments totaling $80,000 that Mr. Flynn鈥檚 firm sent back last year to the client. The disagreement points to inconsistencies in Flynn鈥檚 accounts to the US government about his work for foreign interests.

Flynn鈥檚 company, Flynn Intel Group, told the Justice Department in March that the two $40,000 payments were consulting fees for unspecified work. But Turkish businessman Ekim Alptekin has told The Associated Press that the payments from Flynn鈥檚 firm were refunds for unperformed lobbying.

The difference matters because Flynn鈥檚 foreign business relationships and the veracity of his disclosures are under scrutiny by congressional, military, and intelligence inquiries. Congressional committees and the Pentagon鈥檚 inspector general are separately examining whether Flynn was fully forthcoming about his foreign contacts and earnings from organizations linked to the governments of Russia and Turkey. His firm鈥檚 Turkish work occurred while he was a top Trump campaign adviser.

On Monday, former Deputy Attorney General Sally Yates told senators that Flynn鈥檚 misstatements about his contacts with Russia鈥檚 ambassador to the US raised concerns that he could be targeted for blackmail. Ms. Yates also cited the possibility that Flynn could have broken federal law by operating as a paid foreign agent for the Turkish client without US government permission.

The retired Army lieutenant general and former chief of the Defense Intelligence Agency formally told the Justice Department in March that his now-defunct Flynn Intel Group was paid $530,000 for operating as a foreign agent for Mr. Alptekin鈥檚 firm, Inovo BV, and performing work that could have benefited the Turkish government. That filing 鈥 prompted by Justice Department pressure 鈥 came just weeks after Trump fired Flynn from his national security post. The president has said he made the decision after it became clear Flynn had misled Vice President Mike Pence about conversations with Russia鈥檚 ambassador to the US

The paperwork Flynn filed with the Justice Department raised new questions because it cited two consulting payments back to Alptekin鈥檚 company without specifying what, if any, work was performed.

Alptekin told The Associated Press in an email that the payments were refunds guided by a verbal agreement he worked out last year with Flynn Intel that set out how much Flynn鈥檚 firm was to receive each month for lobbying and other contractual work. When Alptekin didn鈥檛 see any lobbying work, he said, he asked Flynn Intel to refund $80,000 to his firm.

But Flynn鈥檚 filing with the Justice Department did not disclose those discussions or the payment arrangements cited by Alptekin.

The US foreign agent law requires disclosure of all written and verbal contracts and modifications. National security law experts said the failure to disclose such discussions could spur additional scrutiny of Flynn if Justice Department officials were to determine the missing material was legally significant.

The law 鈥渟ays disclosure has to include material fact and makes it a crime to omit such material,鈥 said Stephen I. Vladeck, a professor and national security law expert at the University of Texas School of Law.

Flynn鈥檚 foreign agent filing included only one contract signed by Flynn and Alptekin. The contract did not mention any adjustments made verbally, Alptekin鈥檚 lobbying demands, arranging for allotting payments or any consulting role for Alptekin鈥檚 company, Inovo BV.

In the filing, Flynn鈥檚 firm said the description of each payment back to Inovo as a 鈥渃onsultancy fee鈥 came from the firm鈥檚 accounting records. Similar 鈥渃onsultancy fee鈥 entries described payments to other members of the team hired for the work.

Asked about the discrepancies between Alptekin鈥檚 statements and the filing, Flynn鈥檚 attorney, Robert Kelner, said: 鈥淲e鈥檒l stick with what鈥檚 in the filing.鈥 Mr. Kelner declined to answer additional questions from the AP about the payment arrangement.

In a brief statement Tuesday, Alptekin again said the payments to his firm from Flynn Intel were refunds for unperformed work. Alptekin also suggested that Flynn Intel鈥檚 description of the payments as consulting fees was an accounting error.

In Monday鈥檚 Senate hearing, Yates told Sen. Richard Blumenthal (D) of Connecticut that Flynn could face legal trouble for failing to disclose his foreign work and payments properly. Leaders of a bipartisan House inquiry into Flynn鈥檚 foreign earnings have said they found no evidence that Flynn asked for permission from the Defense Department or the State Department to accept foreign payments, though they said any likely penalty for that violation would be fines, not prosecution. The Defense Department鈥檚 inspector general is investigating.

Rep. Jason Chaffetz (R) of Utah who leads the inquiry as chairman of the House Oversight and Government Reform Committee, told the AP he had not looked into Flynn鈥檚 foreign agent disclosures but he 鈥渨ould urge the Justice Department to pursue that if they feel it鈥檚 necessary.鈥 The panel鈥檚 senior Democrat, Rep. Elijah Cummings of Maryland, added that Flynn鈥檚 鈥渨ork on behalf of Turkey while a top national security adviser for President Trump鈥檚 campaign raises grave questions.鈥

Flynn Intel鈥檚 work last year centered on developing evidence for a criminal case against Fethullah Gulen, a Turkish Muslim cleric living in Pennsylvania. Turkish President Recep Tayyip Erdogan wants Mr. Gulen extradited because he believes Gulen inspired last year鈥檚 attempted coup against him. The Obama administration rebuffed Turkey鈥檚 extradition requests.

It鈥檚 unclear whether the Trump administration will change that stance, though US-Turkish relations have warmed under Trump, who congratulated Mr. Erdogan after a recent referendum expanded his presidential powers. International monitors called the referendum an undemocratic power grab.

Alptekin said he disagrees with Flynn Intel鈥檚 decision to register with the Justice Department as a foreign agent because he says the work wasn鈥檛 orchestrated by the Turkish government and he doesn鈥檛 have any ties to Erdogan鈥檚 administration. But Alptekin serves on an economic committee overseen by Turkey鈥檚 finance ministry. In its Justice Department filing, Flynn Intel also disclosed that Alptekin had consulted with Turkish government officials about the Gulen-related work.

Flynn and Alptekin have yet to provide full and consistent explanations.

Alptekin initially said last fall that his company paid only tens of thousands of dollars, but later acknowledged that the $530,000 in payments listed in Flynn鈥檚 foreign agent filing was correct.

Alptekin also told the AP that his firm and Flynn Intel had agreed verbally in August to divide monthly $200,000 installments for lobbying, public relations, research and other work. That arrangement specified Flynn鈥檚 firm would be paid $40,000 a month for lobbying and $15,000 a month for public relations, Alptekin said.

Alptekin justified the two $40,000 payments 鈥 one in September and the other in October 鈥 as refunds, saying he saw no evidence that Flynn Intel performed any lobbying.

But Flynn鈥檚 firm reported lobbying activity. It registered with Congress as a lobbyist in September, midway through the contract. And Flynn Intel and a contracted public relations firm disclosed in their paperwork with the Justice Department that it had lobbied a House committee and an Arkansas state official.

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