Franklin, Andrews, Kramer & Edelstein

[scion]

Mueller might be the one who’s ‘draining the swamp’

By Matt Zapotosky and Tom Hamburger November 24 at 5:13 PM
https://www.washingtonpost.com/world/national-security/mueller-might-be-the-one-whos-draining-the-swamp/2017/11/24/e1f11ae0-c40b-11e7-84bc-5e285c7f4512_story.html?utm_term=.78f8627f07b1

President Trump famously promised that, if elected president, he would “drain the swamp” — upending the culture in Washington that favors the well-connected.

It is special counsel Robert S. Mueller III whose work seems to be sending shock waves through the capital, by exposing the lucrative work lobbyists from both parties engage in on behalf of foreign interests.

The Mueller probe has already claimed its first K Street casualty: Tony Podesta. His lobbying firm, the Podesta Group, a Washington icon of power and political influence, notified its employees recently that the enterprise is shutting its doors.

Since Mueller was appointed, more people and firms have either filed or amended registrations that make public their work on behalf of foreign interests than had done so over the same time period in each of at least the past 20 years. Lobbyists, lawyers and public relations professionals who work for foreign companies and governments say Mueller’s probe has spooked K Street, and firms are likely to be more careful in their compliance with public disclosure standards.

“My colleagues are being contacted by waves of clients concerned about this,” said Joe Sandler, an ethics and lobbying lawyer in Washington who specializes in Foreign Agents Registration Act issues.

The Podesta Group was famous for providing access to Washington power, hosting events for a roster of high-profile domestic and international clients who helped make it one of the city’s most successful lobbying firms. Revenue declined after the 2016 election, but the firm remained a powerhouse.

Tony Podesta, 74, the brother of longtime Democratic adviser and Hillary Clinton campaign chairman John Podesta, resigned on the day Mueller announced charges against former Trump campaign chairman Paul Manafort and his business partner Rick Gates.

[The rise and fall of the Podestas, Washington’s powerful brother act]

The 12-count indictment included charges of failing to accurately report lobbying work for a Ukrainian political party as required under FARA. That section made reference to “Company A and Company B,” later confirmed to be the Podesta Group and Mercury LLC, another lobbying dynamo that includes Vin Weber, a former Republican congressman from Minnesota who worked on the Ukraine account.

Mueller was appointed in May to investigate possible coordination between the Kremlin and the Trump campaign to influence the 2016 election, but his work and similar congressional inquiries have stretched into other areas. The charges against Manafort and Gates were unrelated to their Trump campaign work.

According to the indictment, the men used a Brussels-based nonprofit organization, the European Centre for a Modern Ukraine, to hide that they were running a multimillion-dollar lobbying campaign for a Ukrainian political party friendly to Russia. Mueller’s team alleged that the men hired the Podesta Group and Mercury to lobby for the Ukrainians in the United States.

According to the indictment, Gates told Mercury it would be “representing the Government of Ukraine,” and provided talking points to the Podesta Group falsely describing how Manafort and Gates merely provided an introduction to connect them with the European Centre.

An official from the Podesta Group wrote back that there was “a lot of email traffic that has you much more involved than this suggests,” adding, “we will not disclose.” The indictment alleges that Gates and Manafort had weekly phone calls and exchanged frequent emails with the two firms to provide direction on specific lobbying steps they should take. The men paid the firms, which have not been publicly accused of any crimes, more than $2 million from offshore accounts they controlled. Podesta officials have said they initially thought the work they were doing was solely for the European Centre and learned only later of Gates’s connection to the Ukrainian political party.

Even before Manafort and Gates were charged, the Justice Department had put pressure on them to register as foreign agents for their Ukraine work, and they — along with the Podesta Group and Mercury — did so retroactively before indictments were issued.

Mueller’s team, though, still charged Manafort and Gates with including misleading statements on their FARA form, such as the assertion that their efforts did not include outreach within the United States.

Officials from Mercury and Podesta have said for months that they have been cooperating with investigators and have a long-standing commitment to disclosure via FARA and the traditional domestic lobbying disclosure system. They said they did not initially file under FARA in this case based on the advice of counsel.

“We are continuing to fully cooperate as we have from the start,” said Michael McKeon, a Mercury partner.

On the day of the indictment, Podesta announced his resignation from the firm he had founded, telling employees, “It is impossible to run a public affairs firm while you are under attack by Fox News and the right-wing media.”

A week later, the chief executive of the firm, Kimberley Fritts, told the staff that the firm would be closing and employees might not be paid after Nov. 16. She announced that she was off to start her own firm, Cogent Strategies, which includes many former Podesta Group employees. That firm is soon expected to launch publicly.
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https://www.washingtonpost.com/world/national-security/mueller-might-be-the-one-whos-draining-the-swamp/2017/11/24/e1f11ae0-c40b-11e7-84bc-5e285c7f4512_story.html?utm_term=.78f8627f07b1