A prominent Democratic lobbyist whose brother happened to chair Hillary Clinton’s 2016 campaign has become the subject of a criminal inquiry as part of Special Counsel Robert Mueller’s Russia investigation, NBC News reported Monday.
Mueller’s reported interest in Tony Podesta, and his Dem-leaning lobbying firm the Podesta Group, stems not from any apparent links to Russia’s 2016 election meddling activities, but rather a failure to disclose 2012-2014 lobbying activity for a Ukrainian non-profit closely aligned with the interests of a pro-Russian Ukrainian political party.
The key figure in all of this is Paul Manafort, President Trump’s campaign chair during the summer of 2016, who was involved in setting up the campaign for the non-profit, the European Centre For a Modern Ukraine. Manafort’s longtime deputy, Rick Gates, directed the Podesta Group’s work — and the work of a GOP-leaning firm, Mercury LLC — for ECFMU, previously reported emails have shown.
Manafort has been the focus of an aggressive probe from the Mueller team that has included an early morning raid at his Virginia home in July. His allies have said that he expects to be indicted in the Mueller probe.
It was reported in August that the six firms in the U.S. and abroad that had been working on the ECFMU campaign had been subpoenaed by Mueller’s probe. NBC News’ report Monday said that, at least in the Podesta Group’s case, Mueller’s interest has evolved from just fact-finding about Manafort’s work and into a criminal probe against the lobbying firm.
A Manafort spokesperson would not comment on the NBC News story when reached by TPM. A spokesperson for Mueller also declined TPM’s request for comment. Spokespeople for the Podesta Group did not respond to TPM’s inquiries.
The Podesta Group said in statement to NBC News that it was “cooperating fully” with Mueller’s investigation and that the firm has conducted “due diligence” to “ensure compliance with disclosure regulations” in all of its client engagements, including this one.
The Podesta Group was founded by Tony and his brother John, though John — who went on to become Clinton’s campaign chair — is no longer affiliated with the firm and is not part of Mueller’s investigation, NBC News reported.
According to Monday’s NBC News report, Mueller’s interest is in whether the firm violated the Foreign Agents Registration Act, a federal law that seeks to bring more transparency to foreign lobbying efforts in the U.S.
After reporting during the 2016 campaign revealed more details of Manafort’s work for the pro-Russia Ukrainian party, Party of Regions, and its leader Viktor Yanukovych, who has since been ousted from Ukraine, the Podesta Group hired an outside law firm to look at the work it did for the Manafort-connected non-profit.
The firm sought to determine if ECFMU was in fact a front for the Party of Regions, and thus required the firm to comply with FARA, which comes in the form of filing publicly-available documents with the Justice Department.
The Podesta Group eventually did file retroactive FARA forms in April, with a supplemental set of documents filed in August. However, its representatives have said they originally believed that ECFMU was not controlled or financed by a foreign government or political party, and that it is why the firm initially filed their work under the much looser Lobbying Disclosure Act. LDA forms are filed with Congress and are far less detailed.
The FARA forms filed by the Podesta Group show an extensive campaign that included meetings, media opportunities and communications with government officials, think tanks and media outlets. Among other things, the firm sent fliers, op-eds and other informational packets to Hill aides and other government officials advocating for Ukraine’s acceptance into the European Union and arguing that the sketchy 2012 election in Ukraine was in fact clean.
Despite ECFMU’s superficial appearance as a Brussels-based think tank, a Daily Beast report from August detailed the various signs that the lobbying campaign appeared to be pushing the interests of the Party of Regions.
“It’s not plausible that they didn’t know what the purpose of their contract was,” a former State Department official familiar with the region told the Daily Beast.
The Podesta Group was paid $1 million for the campaign, according to a CNN report, and Mercury LLC received $720,000.
It is unclear whether Mercury, or any of the other unnamed firms previously subpoenaed by Mueller, are also now the subjects of a criminal investigation. Former Rep. Vin Weber (R-MN), the Mercury partner who signed its belatedly-filed FARA forms for the ECFMU campaign, did not respond to TPM’s inquiries.
Criminal prosecutions can be brought under FARA for a willful failure to register lobbying work for a foreign agent; however, those prosecutions are exceedingly rare. The Justice Department has brought only seven criminal cases between 1966 and 2015, according to a DOJ Inspector General report, and only one resulted in a conviction.