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Ukraine war puts spotlight on Russia's paid boosters in Washington

Before broad sanctions took effect, former members of Congress cashed in doing Moscow’s bidding on Capitol Hill.

Reporting | Washington Politics

As Russian forces were massing along Ukraine’s border in mid-January, the U.S. Congress was identifying sanctions targets to punish Russian aggression. When Sovcombank found itself in Congress’s crosshairs, Russia’s ninth-largest bank did what many Russian interests have done when facing congressional pressure — it hired former members of Congress. 

Sovcombank’s $90,000-a-month contract with Mercury Public Affairs included the services of former Senator David Vitter (R-La.) and former Representative Toby Moffett (D-Conn.) who quickly went to work lobbying their former colleagues on Sovcombank’s behalf. In one letter to congressional offices, for example, Vitter wrote that Sovcombank would be an “extremely counterproductive sanctions target” because of its “deep ties to US and western institutions.” 

This strategy for an imperiled Russian interest to buy the services of former members of Congress is nothing new. Prior to the invasion of Ukraine, Russian companies had amassed an assortment of former members pushing their agenda in Washington. In fact, at least eight former members represented Russian and Belarussian interests in the past seven years. Their firms took in more than $6 million in revenue representing Russian oligarchs, banks tied to the Kremlin, and the company behind the Nord Stream 2 pipeline, according to an analysis of lobbying records. 

This collection of former members included Representative John Sweeney (R-N.Y.) whose firms SMW Partners and Sweeney & Associates were paid at least $110,000 in 2018 for lobbying on behalf of Nord Stream 2 AG, the company behind the Russia-Germany Nord Stream 2 pipeline. In 2019, Sweeney began lobbying for the newly-sanctioned VEB Bank, the governing body of which is chaired by Russian Prime Minister Mikhail Mishustin, earning nearly $600,000 before the contract was terminated in May 2020. 

In 2015, Former Rep. Rick Boucher (D-Va.) signed a contract worth $40,000 a month to represent JSC VTB Bank, the second largest Russian banking group of which 92 percent is owned by the Russian government. Boucher even came face to face with Putin himself at an annual investment forum hosted by VTB in 2016 where the Russian president was the keynote speaker. Boucher used the occasion to ask Putin how to improve bilateral U.S.-Russia relations. 

The late former Rep. Ron Dellums (D-Calif.), perhaps best known for championing the end of apartheid in South Africa, represented the Human Rights Accountability Global Initiative Foundation, a now-defunct Delaware-based organization that was believed to be working to repeal the Magnitsky Act, a sanctions law that targeted Russian officials involved in the detention and death of whistle-blower Sergei Magnitsky. The organization, financed by Russian businessman Denis Katsyv, screened a film aimed at discrediting Magnitsky at the Newseum in Washington in 2016. 

Several former members of Congress also worked for Belarus, a key Russian ally that has also been placed under severe sanctions by the United States and its allies in the wake of Russia’s invasion of Ukraine. Albert Wynn (D-Md.), Peter Hoekstra (R-Mich.), and Charles Bass (R-N.H.) all represented Belaruskali, a state-owned potash company. While in Congress, Wynn had taken a much tougher stance on Belarus; for example, by co-sponsoring legislation that labeled the President Alexandr Lukashenko      as “illegitimate.”

The value of these former members to their foreign clients cannot be overstated. “They have both connections and expertise,” James Strickland, a political science professor at Arizona State University who has studied this revolving-door phenomenon explained via e-mail. “Former members and staffers understand parliamentary procedures, rules, and how committees operate; and they may also have ‘insider knowledge’ related to the political ambitions or concerns of particular members,” Strickland explained.

In many cases, these former members also worked alongside former senior Treasury and State Department officials to lift sanctions on Russian and Belarussian interests. This included a former Senior Sanctions Policy Advisor at the Treasury Department, the former executive director of the U.S. Advisory Commission on Public Diplomacy at the State Department, and even the Senate-confirmed former General Counsel of the Treasury who registered to represent VTB Bank alongside Boucher. 

Treasury officials are especially sought after by lobbying firms “because they have particular expertise on the issue of sanctions,” said sanctions expert Erich Ferrari. “The Treasury is the department that houses many of the agencies that are involved in the U.S. economic sanctions programs.”

It can be quite lucrative for former government sanctions officials to work on behalf of sanctions targets. As former Amb. Daniel Fried, who coordinated sanctions policy at the State Department after the 2014 Russian invasion of Ukraine, recently told CNN that he was offered "bucket loads of money" to work for oligarchs trying to dodge sanctions after his retirement in 2017.

As influential as this cabal of former members of Congress and sanctions officials might have been, it all came crashing down when Russia invaded Ukraine. The United States and other Western powers placed a series of sanctions and restrictions on key sectors of the Russian economy, including banks, exports, assets of oligarchs, central-bank reserves, and even partially severed access to the SWIFT financial messaging network. Collectively, these sanctions led to the severing of ties between all the lobbying firms mentioned here and their Russian clients.

The firms appear to be dumping their clients not just out of a concern for reputational liabilities, but also to ensure they do not run afoul of with the new sanctions. The divorce between K street and Russian interests may or may not be “a gesture in solidarity with Ukraine,” but, in some cases, “it’s a requirement under U.S. law, Ferrari told CNN.

While the Russian invasion of Ukraine has highlighted former members of Congress who have worked for oligarchs, kleptocrats, and their enablers, this has been a problem others in Congress have sought to remedy for years.

Former Representative Frank Wolf (R-Va.), for example, introduced legislation in 2012 that would have blocked former officials from lobbying for repressive foreign governments. "If you are given the opportunity and the honor to serve in Congress, it is a great honor, you then should not trade on that and represent the government that is cracking down” on its own people, Wolf said of his proposal. Wolf even called out former Rep. Boucher by name, who at the time was working for Huawei, the Chinese telecommunications giant.

Wolf’s bill and others that would have blocked former members of Congress from becoming lobbyists, failed to pass, and many former members have since gone on to work on behalf of authoritarian regimes, not just those in Russia and Belarus. Former Rep. Buck McKeon (R-Calif.), who chaired the House Armed Services Committee from 2011 to 2015, has been lobbying for arms sales to Saudi Arabia; Ileana Ros-Lehtinen (R-Fla.), who chaired the House Foreign Affairs Committee from 2011 to 2013, is paid to vilify critics of the United Arab Emirates; and Ed Royce (R-Calif.), Ros-Lehtinen’s successor as Foreign Affairs Committee chair until his retirement in 2019, has lobbied heavily to ensure Washington keeps sending military equipment to the repressive Egyptian government, to name just a few. 

The Russian invasion of Ukraine has put the pipeline of former elected officials lobbying for repressive foreign governments back in the spotlight and once again raised the question: should former elected officials and high-ranking government officials be allowed to cash in on their public service to work for authoritarian regimes and those who profit from them?

Image: Aa Amie via shutterstock.com
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