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Rick Gates, under cross examination at the tax evasion and bank fraud trial of his former boss Paul Manafort, admitted that he had "another relationship" involving first-class flights and luxury hotels, but denied these were funded with money embezzled from Manafort.

In reality, it was basically money moving between accounts, " Gates said during his second day of testimony in the financial fraud trial of his former boss. Gates also provided the first witness testimony that overlaps with Trump's presidential campaign.

Gates also said Mr Manafort had directed him to report money wired from his foreign bank accounts as loans to reduce Mr Manafort's taxable income. But Trump has shown interest in the proceedings, tweeting support for Manafort and suggesting he has been treated worse than gangster Al Capone.

"WTF? How could I be blindsided by this".

The defense is largely staking Manafort's innocence on discrediting Gates. He said so to the jury, adding to the prosecutors' pile of evidence.

"Objection", prosecutor Greg Andres yelled.

Gates said he did, but the defense lawyer wasn't satisfied.

Gates answered: "I don't recall". The pair avoided all eye contact.

Gates' earlier testimony on Tuesday, meanwhile, centered on how Ukrainian businessmen paid Manafort for his consultancy work.

"I was, in essence, living beyond my means", he said.

"I'm here to tell the truth and take responsibility for my actions", Gates said in response to a question from Downing about his trustworthiness. "Mr Manafort had the same path". Downing pressed him on the specifics of their business relationship: which payments to Gates were authorised and which were not. They said they had never seen them before.

Until the trial for Paul Manafort started, Andrew Weissmann had been one of the most prominent members of the prosecution team.

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Gates first responded, "I made many mistakes over several years".

Gates testified Tuesday that this was standard practice.

The case is being prosecuted by the special counsel investigating Russian interference in the 2016 USA presidential election.

Even before Veterans Affairs Secretary Robert Wilkie was sworn in July 30, he discovered what his predecessor, David Shulkin, had known: The real power at the VA resides at Mar-a-Lago, President Trump's private club in Florida, wielded by a triumvirate of Mar-a-Lago members led by Ike Perlmutter, the nearly comically reclusive CEO of Marvel Entertainment, Isaac Arnsdorf reports at ProPublica.

Gates, who is cooperating with U.S. Special Counsel Robert Mueller's investigation into Russian meddling in the 2016 U.S. election, testified on Monday that he helped Manafort doctor financial statements, hide foreign income and evade hundreds of thousands of dollars in U.S. income taxes.

The email exchange about Calk occurred after Manafort left the Trump campaign but while Gates was active on the Trump inauguration committee.

While Gates and others have pleaded guilty, Manafort has refused to strike a deal and legal experts say he may be holding out hopes of a pardon from Trump. The funds were logged as loans in order to meet later audits in Cyprus that required documentation of transfers between bank accounts.

Employees from Federal Savings Bank are expected to testify later this week.

How much more might we hear about Trump? The special counsel's office has pushed back against the leak allegation, and while an Federal Bureau of Investigation agent testified he was present at a meeting with AP reporters about Manafort, the agent said the AP was offered little more than a "no comment" and an acknowledgement that their reporters were generally on track.

Downing followed up: "Do you remember telling the office of the special counsel you actually engaged in four extramarital affairs?" A prosecutor objected, and Ellis spoke to both sets of attorneys under seal before the court took a mid-afternoon break.

Again the reply came: "Yes".