Gregory Craig Acquitted on Charge of Lying to Justice Department

WASHINGTON — Gregory B. Craig, one of Washington’s most prominent Democratic lawyers, was acquitted on Wednesday of a felony charge that he lied about his work for the Ukrainian government seven years ago.

The jury returned the verdict after just hours of deliberation.

The case revealed how a foreign government was able to harness Washington’s industry of lawyers, lobbyist and public relations experts, an unflattering portrait that included at least four million dollars in secret offshore bank transfers from an oligarch to Mr. Craig’s law firm.

But Mr. Craig’s guilt or innocence turned on a relatively narrow question of whether he deliberately misled Justice Department officials who were investigating whether he should register as a foreign agent because of his interactions with American journalists about his law firm’s work for Ukraine.

The case was viewed as a test of the Justice Department’s new aggressive campaign to enforce a once-obscure foreign lobbying law. Until roughly two years ago, violators of the statute, known as the Foreign Agents Registration Act, or FARA, typically received only an administrative slap on the wrist.

While Mr. Craig, 74, was not accused of violating FARA, he was accused of deceiving the officials who enforce it in an effort to avoid registering as a foreign agent. His was one of a series of foreign lobbying-related prosecutions that sprang from former special counsel Robert S. Mueller III’s two-year investigation of Russian interference in the 2016 presidential race.

Those cases have contributed to a wave of disclosures by lobbyists and lawyers: The number of people who newly registered as foreign agents so far this year is more than twice the number of new registrants in all of 2010.

Jurors were forced to weigh Mr. Craig’s reputation as an illustrious Washington lawyer who had served two Democratic presidents against a series of electronic communications that suggested he had shaded the truth in two letters and a meeting with Justice Department officials six years ago.

Mr. Craig’s defense team insisted that prosecutors had concocted a charge out of a few minor omissions of facts that Mr. Craig was never under any obligation to reveal. “Mr. Craig is not the kind of person who would lie to a U.S. government agency, not after a 50-year career based on character and trust,” one of his lawyers, William Murphy, told the jurors.

Prosecutors said Mr. Craig gave in to hubris and self-interest, hiding the truth of his interactions with a New York Times reporter not only from the Justice Department, but from his own firm’s general counsel. Fernando Campoamor-Sanchez, one of the prosecutors, described Mr. Craig’s final letter to the Justice Department as a “masterpiece” of lies and half-truths.

“If you read the letter, you will find contempt for the FARA unit,” coupled with a sense of “entitlement” and self-importance, he argued. He noted Mr. Craig proposed complaining to the attorney general himself if FARA officials did not accept his viewpoint.