By Karen Freifeld
(Reuters) - U.S. President Donald Trump's former campaign chairman Paul Manafort is close to reaching a plea deal with Special Counsel Robert Mueller but an agreement has not been concluded, a source familiar with the matter said on Thursday.
"It's close but not there yet," the source said of negotiations in Mueller's investigation of U.S. intelligence agencies' conclusions that Russia interfered in the 2016 U.S. election, which Moscow denies.
Earlier, ABC News, citing three unnamed sources with knowledge of the discussions, said Manafort had tentatively agreed to a plea deal and it was expected to be announced at a court hearing on Friday in Washington.
ABC News said it remained unclear whether Manafort had also agreed to cooperate with prosecutors.
Manafort lawyer Kevin Downing and Mueller spokesman Peter Carr declined to comment on the ABC News report.
If Manafort decides to cooperate with Mueller, it would be a blow to Trump, who last month praised his former aide for not entering into a plea agreement, as the president's former personal lawyer Michael Cohen had.
Writing on Twitter on Aug. 22, Trump said: "Unlike Michael Cohen, he refused to 'break' - make up stories in order to get a 'deal. Such respect for a brave man!"
Jury selection is scheduled to begin on Monday in Manafort's second trial in federal court in Washington on charges including conspiring to launder money, conspiring to defraud the United States, failing to register as a foreign agent and witness tampering.
Manafort, a longtime Republican political consultant who also worked for pro-Russian politicians in Ukraine, was convicted last month at trial in Alexandria, Virginia, on eight counts of bank and tax fraud and failing to disclose foreign bank accounts.
The prosecutions arose from Mueller's investigation into Russia's role in the 2016 U.S. election and whether Trump's campaign colluded with Moscow to help him win. Trump has denied colluding with the Russians.
The jury at the August trial was unable to reach a verdict on 10 other counts, after one lone juror said she had reasonable doubt on whether Manafort was guilty, according to another juror.
None of the charges against Manafort related to collusion with Russia.
GATES GUILTY PLEA
Rick Gates, Manafort's former business partner and the campaign's deputy chairman, pleaded guilty to lesser charges in exchange for his cooperation, later testifying against Manafort in Virginia. Gates may be a prosecution witness in his Washington trial as well.
Rudy Giuliani, the former New York City mayor who is representing Trump in the Russia probe, previously told the Politico news outlet that taking a plea deal to avoid a second trial would not crush Manafort's chances of receiving an eventual presidential pardon. Trump has not said whether or not he would pardon Manafort, but he has not publicly ruled it out.
In the Virginia trial, prosecutors said Manafort hid from U.S. tax authorities $16 million he earned as a political consultant in Ukraine to fund an opulent lifestyle that included purchasing multimillion-dollar properties, an ostrich skin jacket and other valuables.
Later, when former Ukrainian President Viktor Yanukovych was ousted from power and fled to Russia, much of the consulting business dried up. Desperate for cash, prosecutors said he lied to banks in order to secure $20 million in loans.
Manafort worked for five months on Trump's 2016 campaign, including three as chairman. He resigned in August 2016 following a news report linking him to payments from Yanukovych's pro-Russia political party.
Manafort's second trial is expected to delve deeper into Manafort's Russian connections including to Konstantin Kilimnik, a Ukrainian-Russian political consultant who was indicted along with Manafort and who Mueller's team has linked to Russian intelligence.
Prosecutors have said Manafort and Kilimnik conspired to tamper with witnesses, an allegation that later led in June to U.S. District Court Judge for the District of Columbia Amy Berman Jackson revoking Manafort's bail and ordering him jailed.
(Reporting by Karen Freifeld in New York; Additional reporting by Sarah N. Lynch, Nathan Layne and Eric Beech in Washington; Editing by Peter Cooney and Grant McCool)