Manafort, Lobbying, and a Tale of Two Countries

By James Liska

May 7, 2018

On July 26th, 2017, federal agents executed a no-knock warrant on lobbyist Paul Manafort’s suburban Washington apartment, seizing financial records and other material. A former campaign manager for Donald Trump, Manafort and colleague Richard Gates are charged with a bevy of federal crimes stemming from political work on behalf of Viktor Yanukovich, the disgraced former leader of Ukraine, and to a pro-Russian political party in Ukraine.

But why is this indictment significant? Not only is it another piece in the ongoing investigation of the Trump campaign by special counsel Robert S. Mueller, but the root cause of the indictment – violations of the United States’ lobbying code – is impactful to the lobbying profession as a whole. To understand this, it’s important to analyze the landscape of the lobbying profession in both Russia and the United States.

The concept of lobbying exists in both Russia and the United States, although they differ in several key ways. In both countries, lobbyists are individuals operating on behalf of another individual, a company, an industry, or a trade association who attempt to influence government action by meeting with policymakers and elected officials. In both countries, lobbyists are almost always ex-government employees with strong connections and an understanding of the decision-making process.

There are some differences, however, which can be attributed to the differences between the political systems of Russia and the United States. In an open, democratic political system like that of the U.S., lobbyists are often perceived as sources of information. This function is especially important to Congressional legislative staff members, who are often not issue-area experts and are expected to monitor multiple issues-areas at once. American lobbyists synthesize viewpoints and “boil down” information to provide the appropriate lawmakers with targeted information to maximize the outcome for the clients. These lobbyists usually work full-time, either in-house or at large firms, and persistently manage a caseload of regulations or issues.

Lobbying in Russia is more informal, and this informality is reflective of the country’s business and political culture. According to Meduza special correspondent Taisiya Bekbulatova, the concept of lobbying in Russia is a blend of communications and regulatory advocacy, with “demand…especially high among foreign companies that need a guide in unfamiliar waters.”

These lobbyists are usually hired only when needed, and not for ongoing work. According to Sergey Zverev, a former Kremlin official who now runs his own government relations firm, “seventy percent of [lobbying] is understanding how this or that decision-making institution functions and knowing its internal rules and understanding how its interdependencies are structured. And these internal mechanisms are changing constantly.”1 Former Culture Ministry official Filip Gurov, who runs his own communications firm, says much of his work concerns knowing “what troubles are afflicting particular officials at any [given] time.” Outside of communications or the regulatory arena, there also exists a culture of “fixers,” or informal lobbyists who peddle influence – or perceived influence. For a price, these fixers can provide extralegal services such as bribing government officials or intimidating political or business rivals either through regulatory means, such as withholding construction permits, or through physical means such as police interrogations.

Another key difference is the legal aspect of the profession. In the United States, the profession is highly regulated: under the Lobbying Disclosure Act (PL 104-65), most political and legislative staff members – even paid interns – across all branches of government are known as “covered officials”, and lobbyists wishing to advocate before these individuals in Congress, federal agencies, or other bodies within the executive branch have numerous regulatory compliance obligations including registration, disclosure of expenditures, and disclosure of issues discussed and clients.

Nondisclosure, misrepresentation, or falsification of data can lead to significant penalties including steep fines or incarceration. The most notorious lobbyist, Jack Abramoff,2 for example, was sentenced to six years in prison and millions of dollars in restitution for his key role in a massive fraud scheme in which he bilked Native American tribes of $66 million, much of which he used to bribe Members of Congress and their staff with gifts, travel, and entertainment. This scandal in turn spawned even tighter restrictions, such as the 2007 Honest Leadership and Open Government Act (PL 110-81). Both President Obama and President Trump have issued bans and restrictions on lobbyists serving in their administrations, with varying degrees of efficacy.

Russia, however, has no legal or regulatory concept of lobbying. According to Bekbulatova, nowhere in Russia’s legal statutes does the concept of regulated professional advocacy appear.

Furthermore, there is also a provision in the United States Code that requires any lobbyist working on behalf of a foreign political or quasi-political entity – whether that be a foreign government, an individual, or organization – to make a public disclosure of said relationship. This provision, a result of the Foreign Agents Registration Act, was passed by Congress in 1938. However, this act is almost never enforced. According to a November 2017 Vox article by Lydia Dennett, FARA is “wildly underenforced.” In another article, POLITICO columnist Ken Silverstein calls the law “a complete joke.” Very few besides Manafort have been charged in connection with this law. Silverstein’s article focuses on the shortcomings of FARA, which, according to him, allows lobbyists and political professionals to effectively work on behalf of foreign agents – potentially including Russian individuals covered by the Magnitsky Act – without any obligation to disclose. This sort of uncontrolled negotiation is much closer to the more informal Russian system of lobbying. Given the beneficiaries of Manafort’s work, his actions are unsurprising, especially as there was no compelling legal reason for him to work “legitimately.” Although FARA enforcement is weak, this does not mean it is a victimless crime – indeed, the actions of Manafort and his associates hurt the lobbying profession in several ways.

Firstly, it sullies a profession already tainted by scandal and public mistrust. Years of excess and numerous scandals have already produced a dismal public perception of the American lobbying profession, and another high-profile scandal – especially one tied to the investigation of a controversial president – would serve only to deepen public mistrust. In fact, professional lobbyist and current head of the National Institute for Lobbying and Ethics Paul A. Miller penned an article in August 2017 titled “Are Shadow Lobbyists Flynn and Manafort Today’s Abramoff?”, invoking the name of the lobbyist who arguably damaged the reputation of the lobbying profession forever.

But perhaps the most impactful consequence of this affair is the damage to the legitimate lobbyists looking to work with, and advocate for, Russian interests in the United States. The link between big-name lobbyists like Manafort, who was involved in work related to Russia and Eurasia, and Robert S. Mueller’s investigation of the President’s electoral campaign serves to encourage a popular perception that business dealings with Russia are suspect by nature.

San Francisco State University professor Andrei P. Tsygankov, who studies political and social dynamics, suggests one definition of Russophobia as “fear of Russia’s political system, incompatible with the interests and values of the West, and the United States in particular.” Given the Russian political system and the informal – and lawless – concept of lobbying, it’s possible that Manafort’s actions may actually encourage Russophobia by equating legitimate advocacy work on behalf of Russian companies and US companies with a culture of influence peddling and extralegal tactics. This fear of working or doing business with Russians, coupled with unlawful conduct from actors in both countries, would serve to further the lack of understanding between Russia and the United States and continue to sour relations between the two countries.

Footnotes

[1] Ibid

[2] Nota bene – Abramoff and a colleague received millions of dollars from a Russian lobbyist in 2005: https://web.archive.org/web/20060705195229/http://www.talkingpointsmemo.com/archives/007739.php



James Liska is a public policy and government affairs professional at The Washington Center for Internships and Academic Seminars. James holds a Bachelor’s Degree in Russian Area Studies from Dickinson College in Carlisle, PA, and a Public Policy Certificate from the National Institute for Lobbying and Ethics in Fairfax, VA.

The Center on Global Interests does not take institutional positions. The views expressed in this article are the author’s own and do not reflect those of the affiliated institutions or individuals.

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