How D.C. Lobbyists Helped Paul Manafort Prop Up a Putin Puppet

For years, the influence-peddlers’ work for a pro-Kremlin party flew under the radar. Then Bob Mueller’s Trump-Russia probe got rolling.

Photo Illustration by The Daily Beast

Taking a Putin ally to meet political heavyweights on Capitol Hill. Using other pals of Vlad to “prove” to the world that a suspect election was totally kosher. Working side-by-side with Paul Manafort, the famously dictator-friendly operative who once sat atop Donald Trump’s political campaign.

Those are just some of the moves that two of Washington’s most powerful lobbying firms made on behalf of a pro-Putin political party. For years, those efforts went largely ignored—just another instance of influence-peddling in a Washington full of it. But now, they’re being dragged into the light by Robert Mueller’s Trump-Russia probe.

These firms, staffed with ultra-connected power brokers, are now facing questions from the special counsel because of work they did on behalf of that Kremlin-philic political party—work they didn’t disclose to the Justice Department for years.

According to NBC and The Washington Post, Mueller has subpoenaed at least two Washington lobbying firms—the Podesta Group and Mercury LLC—regarding work they did with one-time Trump campaign chief Paul Manafort that was paid for by Putin allies.

A review of documents these two firms filed belatedly with the Justice Department paints a picture of questionable practices and controversial allies.

At issue is work that Manafort did for Viktor Yanukovych, a pro-Putin Ukrainian politician who was the country’s president from 2010 to 2014. Yanukovych fled the country to Russia after protesters overthrew his government. Vladimir Putin reportedly helped him escape.

The Podesta Group and Mercury LLC, two powerful Washington lobbying firms, worked alongside Manafort from 2012 to 2014 to try to persuade American officials of two things: that Ukraine’s 2012 election was above-board, and that the country’s leaders wanted it to move further away from Putin and closer to the West.

Russia experts say neither of those assertions is true; they say Yanukovych and his allies only hired those firms to shield themselves from Western criticism. The country’s 2012 elections drew substantial criticism from democracy advocates around the world since his main political rival, Yulia Tymoshenko, was imprisoned at the time. The pro-democracy group Freedom House ripped the Yanukovych government for limiting peaceful protests, restricting media freedoms, and torturing its political opponents.

To try to persuade Americans that Ukraine was moving in the right direction, the two lobbying firms undertook a public relations offensive—pitching journalists, meeting with Congressional staff, and introducing Yanukovych allies to top Washington power brokers.

The client paying the firms for that work was the European Center for Modern Ukraine. ECFMU told both firms it wasn’t backed by any political entities. But new reports indicate it had the support of Yanukovych’s party, the Party of Regions—which means the two lobbying firms should have disclosed their work for the group to the Justice Department.

The Podesta Group didn’t return multiple requests for comment, and Michael McKeon of Mercury LLC didn’t answer questions about who at his firm had been subpoenaed and why.

The Podesta Group is helmed by Tony Podesta, whose brother, John Podesta, was the chairman of Hillary Clinton’s presidential campaign. The Podestas have long been some of the Clintons’ closest allies and confidants. And they’ve used their access to one of Washington’s formerly powerful dynasties to build a lobbying empire. The Podesta Group is famous for connecting foreign government clients with D.C. insiders—including clients with abysmal human rights records. The firm represented Vietnam’s repressive government, as well as that of Azerbaijan and South Sudan.

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To try to sanitize Ukraine’s elections, the firm distributed materials to Hill staff with quotes from election observers praising Ukraine’s process. It was a tall order, given Yanukovych’s penchant for imprisoning his political opponents. But the Podesta Group did its best.

“Initial Reactions from International Observers Positive,” claimed one Podesta Group document.

One person they quoted to make that argument was Sergey Markov, described as “Observer—The Civic Chamber of the Russian Federation.”

“The elections to the Ukrainian parliament were successful, democratic and organized according to standards even better than some of the European Union member states,” he said.

Markov likely relished the chance to bash the EU. He was no ordinary election observer; rather, Markov is well-known as an informal adviser to Vladimir Putin. He also advised Yanukovych on campaign tactics, according to a former State Department official with knowledge of the region’s politics. The official said Markov was likely in Ukraine helping Yanukovych at Putin’s behest.

“That might be something that a good-faith Washington lobbyist might not know,” continued the official, who requested anonymity to speak candidly. “But it’s knowable.”

The Podesta Group’s documents also quoted Thierry Mariani, a former French foreign minister, saying it was the best election he had ever seen.

“This is the first time that I have seen such a transparent competition,” Mariani said. “These elections are a great success for Ukraine and a great success for democracy. Today, Ukraine is a real European democracy.”

Mariani tends to materialize wherever Russia’s actions draw international condemnation. In 2015, he visited occupied Crimea, drawing condemnation from his home country and Ukrainian leaders. According to the BBC, France’s foreign ministry said Mariani’s visit violated international law. It also defied international sanctions. In 2017, Mariani toured the Syrian city of Aleppo and praised Russia’s involvement in the country’s brutal civil war. The visit provided useful fodder for Russia Today, one of the country’s many state-run propagandistic media outlets.

Mariani runs a lobbying group called French-Russian Dialogue, alongside crony Vladimir Yakunin—who the U.S. Treasury sanctioned in 2014 over Putin’s annexation of the Crimea.

Podesta Group literature also quotes Kazbek Taisaev as saying the elections were “organized very well.” The Podesta Group describes Taisaev as an “observer” with the Civic Chamber of the Russian Federation. It didn’t note that Taisaev is a former secretary of the Communist Party of Russia who has said North Korea is a “wonderful country… not at all like what Western propaganda tries to describe in its mass media.” It also didn’t note that the Civic Chamber of the Russian Federation is an entity Putin created in 2004 for domestic policy purposes—and certainly not for monitoring Ukrainian elections.

Despite this, the Podesta Group distributed comments from all these people to Congressional offices as part of their effort to convince Capitol Hill that the country was moving in the right direction.

A longtime Russia watcher based in Washington—who requested anonymity given the political sensitivity of the issue—said the Podesta Group’s promotion of these Putin allies as credible voices on the legitimacy of Ukrainian elections was, at best, “gross incompetence.”

Mercury LLC, meanwhile, maintains that its work for ECFMU was part of an effort “to build support for the Ukraine’s entrance into the EU, which would bring Ukraine closer to the west and further from Putin’s influence,” according to Michael McKeon, a partner at the firm.

“We believe it was a worthwhile goal,” he added in an email to The Daily Beast.

Mercury LLC has a stable of former members of Congress, including former Sen. David Vitter of Louisiana, who lobby their old colleagues for their clients. Its site boasts it can “influence elected officials at all levels of government” and is especially effective in Africa, the Middle East, and “the Islamic world.”

The firm filed disclosures with Congress in 2014 that gave only limited detail on their work for ECFMU. They only disclosed their work to the Justice Department under the requirements of the Foreign Agents Registration Act a few months ago. And those belated disclosures included much more detail on what they did for their client.

Mercury LLC’s filings with the Justice Department show its lobbyists—including Newt Gingrich ally Ed Kutler, who has since departed for his own firm—spent time setting up in-person meetings related to Ukraine issues. One person they introduced to numerous Hill offices and to a senior official at the Export-Import Bank as part of their EU-friendly push was Sergiy Klyuyev.

Klyuyev is not necessarily the kind of person you’d expect to be part of a pro-Western public relations campaign. He and his brother, Andriy, have amassed a fortune worth more than $100 million. When Mercury LLC was introducing him around the Hill, Klyuyev was a member of parliament in Yanukovych’s political party, the pro-Russian Party of Regions. His brother and business partner helped run Yanukovych’s 2010 presidential campaign and was his former chief of staff.

Less than a year after Mercury LLC introduced Klyuyev around the Hill as part of their stated effort to bring Ukraine into the EU, the EU froze his assets. It was in the wake of the collapse of the Yanukovych regime, and Sergiy was one of more than a dozen Yanukovych allies the EU suspected of embezzling state money. Klyuyev reportedly fled to Russia, along with his brother—who’s accused of orchestrating mass killings of Euromaidan protesters—and Yanukovych himself.

For this work, Mercury LLC was paid more than $130,000.

They maintain that they had no idea they were working for a group funded by a political entity, even though Klyuyev himself was a political figure and the brother of one of Yanukovych’s closest allies. McKeon said the ECFMU told them in writing that they weren’t government-affiliated, so they decided they didn’t need to disclose their work to the Justice Department.

The Podesta Group came to the same conclusion—that there was no way ECFMU was associated with or funded by a foreign government, so they didn’t need to disclose.

“It’s not plausible that they didn’t know what the purpose of their contract was,” said the former State Department official familiar with the region.

A longtime Russia watcher who requested anonymity because of political sensitivities shared that view.

“Taking on this project, effectively in support of the Yanukovych government, without doing due diligence about where the money was truly coming from—that amounts to negligence, especially given the state of Ukrainian politics and economy,” he said.

Mueller’s reported subpoenas of these two firms could cast a spotlight on Washington’s shady world of foreign lobbying—and take his probe in a direction that could be discomfiting not just for Republicans, but for Democrats, too.

This piece has been updated with detail about Mercury LLC's lobbying disclosures.