Mueller is officially coordinating with Schneiderman. That means they’re not only circumventing Presidential pardon powers for actual convictions, but more importantly, circumventing Presidential pardon powers as a way to apply pressure to witnesses (i.e. why would you talk talk if you’ve got a guarantee from the President that he’ll pardon you). Furthermore, this puts Schneiderman in a stronger position to continue the investigation should Mueller get fired. It’s the right move for sure. I hope it pays off.
http://www.politico.com/story/2017/08/30/manafort-mueller-probe-attorney-general-242191
Background: Presidential pardons can only apply to federal crimes. So when a state AG presses charges, only the governor of that state can issue pardons. And state-level crimes, while jurisdictionally limited, can still be very, very serious. Money laundering, fraud, racketeering, etc.