AP Sources: Manafort tied to undisclosed foreign lobbying
Aug. 17, 2016
WASHINGTON (AP) — Donald Trump's campaign chairman helped a pro-Russian governing party in Ukraine secretly route at least $2.2 million in payments to two prominent Washington lobbying firms in 2012, in a way that effectively obscured the foreign political party's efforts to influence U.S. policy.
The revelation, provided to The Associated Press by people directly knowledgeable about the effort, comes at a time when Trump has faced criticism for his friendly overtures to Russian President Vladimir Putin. It also casts new light on the business practices of campaign chairman Paul Manafort.
Under federal law, U.S. lobbyists must declare publicly if they represent foreign leaders or their political parties and provide detailed reports about their actions to the Justice Department. A violation is a felony and can result in up to five years in prison and a fine of up to $250,000.
Trump shook up his campaign organization Wednesday, putting two new longtime Republican conservative strategists as chief executive officer and campaign manager. It was unclear what impact the shakeup would have on Manafort, but he retains his title as campaign chairman.
Manafort and business associate Rick Gates, another top strategist in Trump's campaign, were working in 2012 on behalf of the political party of Ukraine's then-president, Viktor Yanukovych.
People with direct knowledge of Gates' work said that, during the period when Gates and Manafort were consultants to the Ukraine president's political party, Gates was also helping steer the advocacy work done by a pro-Yanukovych nonprofit that hired a pair of Washington lobbying firms, Podesta Group Inc. and Mercury LLC.
The nonprofit, the European Centre for a Modern Ukraine, subsequently paid at least $2.2 million to the lobbying firms to advocate positions generally in line with those of Yanukovych's government.
That lobbying included downplaying the necessity of a congressional resolution meant to pressure the Ukrainian leader to release an imprisoned political rival.
The lobbying firms continued the work until shortly after Yanukovych fled the country in February 2014, during a popular revolt prompted in part by his government's crackdown on protesters and close ties to Russia.
Among those who described Manafort's and Gates's relationship with the nonprofit are current and former employees of the lobbying firms. Some spoke on condition of anonymity because they were not authorized to reveal details about the work and because they remain subject to non-disclosure agreements.
Gates told the AP that he and Manafort introduced the lobbying firms to the European Centre and occasionally consulted with the firms on Ukrainian politics. He called the actions lawful, and said there was no attempt to circumvent the reporting requirements of the U.S. Foreign Agents Registration Act.
The heads of both lobbying firms told AP they concluded there was no obligation to disclose their activities to the Justice Department. Manafort did not directly respond to AP's requests to discuss the work, but he was copied on the AP's questions and Gates said he spoke to Manafort before providing answers to them.
Political consultants are generally leery of registering under the foreign agents law, because their reputations can suffer once they are on record as accepting money to advocate the interests of foreign governments — especially if those interests conflict with America's.
The intent of using the two lobbying firms was unclear, but ironically, one of firms Manafort and Gates worked with has strong Democratic and Clinton ties.
The founder and chairman of the Podesta Group, Tony Podesta, is the brother of longtime Democratic strategist John Podesta, who now is campaign chairman for Democratic nominee Hillary Clinton. The head of Mercury, Vin Weber, is an influential Republican, former congressman and former special policy adviser to Mitt Romney. Weber announced earlier this month that he will not support Trump.
One former Podesta employee, speaking on condition of anonymity because of a non-disclosure agreement, said Gates described the nonprofit's role in an April, 2012 meeting as supplying a source of money that could not be traced to the Ukrainian politicians who were paying him and Manafort.
In separate interviews, three current and former Podesta employees said disagreements broke out within the firm over the arrangement, which at least one former employee considered obviously illegal. Podesta, who said the project was vetted by his firm's counsel, said he was unaware of any such disagreements.
A legal opinion drafted for the project for Mercury in May 2012, and obtained by AP, concluded that the European Centre qualified as a "foreign principal" under the Foreign Agents Registration Act but said disclosure to the Justice Department was not required. That determination was based on the nonprofit's assurances that none of its activities was directly or indirectly supervised, directed, controlled, financed or subsidized by Ukraine's government or any of the country's political parties.
Associated Press writers Ted Bridis and Maria Danilova contributed to this story.