SELLING LOUTS

The Kremlin’s Oil Company Has a Man in Trumpland

The longtime political operative and veteran diplomat is the man some of Russia’s biggest interests turn to for help, and Trump goes to for advice.

03.09.17 1:05 AM ET

MOSCOW—Over the past 25 years, local Russian businessmen have learned that they all need one thing to survive: a krysha, or “roof,” or, in the ever-applicable mafia parlance, protection.

Three years ago, on March 6, 2014, the U.S. Treasury Department authorized sanctions against a host of Russian institutions and officials for violating the territorial integrity of Ukraine. The most influential companies—Gazprom, Alfa Bank, Novatek, all of them loyal to or controlled by the Kremlin—rushed to hire well-connected lobbyists in Washington to try to get them off a financially crippling blacklist. That is, to get them the protection they needed.

There was no shortage of money offered, since nobody could predict at the time how bad the tensions of a renascent Cold War would grow. The question was which doors the hired American strategists could unlock for Moscow.

With his decades of experience, Republican party bona fides, and a global team at McLarty Associates, Richard Burt seemed an ideal lobbying partner for Russian big business.

The 70-year-old Burt has been close to several generations of Republicans, including Ronald Reagan, for whom he served as U.S. ambassador to Germany, and, much more recently, to President Donald Trump.

A frequent visitor to Moscow, Burt has spent most of his professional diplomatic and lobbying life dealing in one way or another with the Kremlin.

In one dramatic photograph shown around the world, he escorted the famed Soviet refusenik Natan Sharansky across the Glienicke Bridge in Berlin in 1986 as part of a U.S.-Soviet spy exchange. (The Jewish dissident was the one non-spy; he was, however, the first political prisoner released under Mikhail Gorbachev’s reformist government.)

“He was the star brilliant American diplomat under Reagan, with Richard Perle,” a former CIA operative in Moscow told The Daily Beast. “I think he’s an opportunist, a businessman. I would never think of him having serious views about anything.

“In a way, he’s like [Vitaly] Churkin,” the ex-spy added, referring to the recently deceased Russian ambassador to the U.S. “A charismatic guy who sold out to the system. And they’re both rough contemporaries.”

Last year, two major Russian corporations used Burt’s lobbying services, the Russian gas giant Gazprom, one of five constituent companies party to the Nord Stream II pipeline project, which was designed to deliver an additional 55 billion cubic meters of gas to Germany.

According to the Heinrich Boll Foundation, run by the German Green Party, “using Nord Stream II to expand capacity would further increase dependency on Gazprom, with the Russian state-owned corporation already taking more and more control of the entire gas supply chain in the EU as it is.” Thus, it would undercut a major European Union geopolitical objective—more energy independence—which became especially important following Russia’s invasion of Ukraine.

“According to open sources, Gazprom’s New European Pipeline AG paid Burt’s company $690,000 for their 2016-2017 contract, that just ran out this month,” Sergei Kostiayev, a Russian political scientist researching international lobbyists, told The Daily Beast. Documents recoverable from the website for the Lobbying Disclosures Act Database, administered by the U.S. Senate, bear this out.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

By clicking “Subscribe,” you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

Kostiayev, a docent at the Financial University, which is run by the Russian government, says that working for Gazprom is no different from working directly for the Kremlin. “But just lobbying efforts are as useless as attempts to decorate a corpse. By now the Kremlin realized that that they needed ‘their man’ in Washington, who could provide Trump’s support for Moscow,” the academic added.

To hear Burt tell it, however, neither he nor McLarty Associates are lobbyists at all, as “98 percent of the firm’s clients are U.S. companies seeking help in international markets, the only foreign clients the company represents are through a subsidiary known as McLarty Inbound.” Also, he insists, there is no connection to Russia’s gas behemoth.

“We represented Nord Stream II—not Gazprom itself —when it was a consortium including 5 companies,” Burt wrote The Daily Beast in an emailed statement. “One of them was Gazprom. In October, when the Western companies including Royal Dutch Shell, etc. dropped out having to do with the fact that Poland wouldn’t do business with them, we stopped invoicing the client and let our contract lapse at the end of October 2016. The reason we pulled out was that McLarty Associates have a policy of not representing foreign governments or state-owned enterprises.”

One of these foreign clients is a Russian-owned investment vehicle Letter One. Letter One or L1, a Luxembourg-registered and London-based company, was founded by Mikhail Fridman, the owner of Russia’s largest private bank, Alfa, which was alleged to have had digital communication with servers in Trump Tower during last year’s presidential election. Burt, an adviser to the board of L1, told The Daily Beast that the U.K.-domiciled Fridman, along with Pyotr Aven, the head of Alfa Bank, are “longtime business associates.”

Just before McLarty apparently stopped invoicing the New European Pipeline AG, Burt had what he describes as a “very peripheral” role in crafting parts of then-presidential candidate Donald Trump’s first major foreign policy speech, delivered at Washington, D.C.’s Center for the National Interest in April 2016. At that event, the now heavily scrutinized Russian ambassador to the U.S., Sergei Kislyak, was seated in the front row. “I believe an easing of tensions and improved relations with Russia—from a position of strength—is possible,” Trump said on that occasion. “Common sense says this cycle of hostility must end. Some say the Russians won’t be reasonable. I intend to find out.”

Burt told The Daily Beast that he never met Trump or interacted with anyone from the campaign for the purpose of offering his input on the speech. Rather, a third party intermediary transmitted his counsel. And as to the bits of the address pertaining to Russia, “The only… thing I remember was something along the lines of needing to deal with Russia from a position of strength.”

In an interview last June, Burt told Reuters: “I am happy to talk to people looking for advice on foreign policy issues.”

According to Politico, which Burt said mischaracterized his role in the composition of Trump’s speech, he attended two separate dinners hosted by then-senator Jeff Sessions, who served as the chairman of Trump’s national security committee during the campaign. Now the president’s embattled attorney general, Sessions last week was forced to recuse himself from any forthcoming investigation into Trump’s ties to Moscow owing to his allegedly misleading testimony during his confirmation hearing, at which he said he hadn’t talked to any Russian officials about the campaign. As The Washington Post disclosed, Sessions met and spoke to Kislyak twice during his work on the campaign. Burt, Politico noted, was “invited to discuss issues of national security and foreign policy, and wrote white papers for Sessions on the same subjects.”

Burt has also continued to spend time in Russia. “Last year Burt visited Moscow twice to participate in round table discussions about nuclear weapons,” Konstantin Remchukov, editor in chief of the independent Russian newspaper Nezavismaya Gazeta, told The Daily Beast. “Burt’s main message was that both Russia and the United States need an injection of pragmatism, that sanctions against Russia were harmful for both Russia and the West. His words sounded marvelous to many ears in Moscow.”

Burt’s long diplomatic service combine with a personal style that everyone interviewed for this article could not help but find impressive. He is seen as a savvy and affable elder statesmen among his peers. One U.S. think tank specialist on Russia who has interacted with him abroad told The Daily Beast, “He’s tall, well-dressed, and a sharp political player.”

Which is to say, markedly at odds with the sort of American interlocutors the Kremlin used to prefer dealing with.

Once the biggest foreign investor in Russia, Bill Browder, the CEO of the now London-based Hermitage Capital, admitted in an interview with The Daily Beast that Burt’s services for a Gazprom-affiliated company marked a significant difference from Moscow’s jejune style in the beginning of the Putin era.

“In the early years, the Kremlin’s lobbying and legal work was as unsophisticated as their representatives in gold chains, shiny suits and pointy shoes, but they have learned how to dress and how to hire the best lobbyists,” Browder said, who often refers to the Kremlin, as “gangsters who killed my lawyer.”

“Although their transactions are just as criminal and difficult to mask, they are much better at fighting legal battles with big hired guns in the West.”

Browder added that he was not surprised that Burt shared his time between writing speech memos for Trump and promoting a pipeline deal that would boost Gazprom’s energy hold on Europe. “There must be lots of companies in Washington who would love to sign a million-dollar contract with Gazprom.”

Russian media, too, seem keen on continuing to see Burt as a channel between East and West. In recent weeks, his name has been floated frequently in various news reports, along with John Huntsman and others, as a possible U.S. ambassador to Moscow.

When asked by The Daily Beast if that’s a position he’d accept should it be offered to him, Burt responded: “In Washington, you never answer a question like that.”

Anna Nemtsova reported this story from Moscow, Michael Weiss reported from New York City