Paul Manafort, Ukraine, and the Art of Lobbying for Kleptocrats
This article is an excerpt from my book, While We Slept: Vladimir Putin, Donald Trump, and the Corruption of American Democracy, available here.
This article shows how Paul Manafort and the high-powered team he assembled lobbied officials from Washington, D.C. to Brussels on behalf of the Ukrainian kleptocrat Viktor Yanukovych. It is the ninth article in a series examining Manafort’s work in Ukraine. While it is not necessary to read the earlier entries, it is recommended. There is a brief summary of the previous articles below.
Part 1 covers Paul Manafort’s early career as a Republican political consultant and lobbyist.
Part 2 explains how Manafort met the organized crime-linked Russian oligarch Oleg Deripaska and how Deripaska introduced Manafort to Ukraine.
Part 3 explains how corruption and organized crime seized control of post-Soviet independent Ukraine, and led to the Orange Revolution.
Part 4 shows how Paul Manafort helped get Viktor Yanukovych, the Kremlin’s preferred Ukrainian candidate, elected as President.
Part 5 describes Paul Manafort’s activities on behalf of Oleg Deripaska outside of Ukraine, and how Deripaska uses his wealth to spread influence abroad.
Part 6 explains Paul Manafort’s money laundering and corrupt business activities with Oleg Deripaska and the Ukrainian oligarch Dmytro Firtash.
Part 7 shows how Paul Manafort and the law firm Skadden Arps laundered Viktor Yanukovych’s reputation.
Part 8 reveals how Manafort assembled a public relations team to smear Viktor Yanukovych’s political opponents.
Summary of Past Articles: Paul Manafort is a Republican political consultant who has provided services to foreign dictators. After working on Bob Dole’s presidential campaign with Republican Rick Davis, they formed the consulting firm Davis Manafort Partners. DMP was hired by the Russian oligarch and Putin ally, Oleg Deripaska, to represent his interests abroad. Manafort was sent to Ukraine to advise the Kremlin’s preferred presidential candidate Viktor Yanukovych after his fraudulent election victory had been overturned by the Orange Revolution. In a stunning turn around, Manafort succeeded in helping get Yanukovych elected as the Ukrainian President. In addition to Ukraine, Manafort represented pro-Kremlin interests in other post-Soviet states on behalf of Deripaska. After Yanukovych was elected, Manafort began lobbying for him in Western capitals, including justifying his selective prosecution of his chief domestic political opponent Yulia Tymoshenko. He also coordinated a malicious public relations campaign to trash her reputation in the West.
You can find my collected writings here.
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PAUL MANAFORT AND THE WASHINGTON, D.C. SWAMP: LOBBYING ON BEHALF OF YANUKOVYCH
Part of Paul Manafort’s lobbying strategy on behalf of Ukraine’s kleptocratic President Viktor Yanukovych included the establishment of false fronts to conceal his lobbying activities. One such organization Manafort had a hand in creating was the “think-tank” the Center for the Study of Former Socialist Republics (CXSSR).
CXSSR, however, was not the only Manafort-linked “think tank” involved in his pro-Yanukovych campaign. Based out of Belgium, European Centre for a Modern Ukraine was described by Manafort at one point as “the Brussels NGO that we have formed” to coordinate lobbying on behalf of Ukraine.
The Centre was founded by Leonid Khozara, a Party of Regions member and Ukraine First-Vice Prime Minister under Yanukovych. However, the Centre was misrepresented as being independent of the Yanukovych government so that lobbyists who worked under its auspices wouldn’t need to register under the Foreign Agent Registration Act.
In a filing with the EU, the Centre listed its overall budget as being €10,000. In fact, the effort was funded by Ukrainian oligarchs on behalf of Yanukovych.
Serhiy Tihipko, former chairman of the National Bank of Ukraine and Party of Regions member, provided an offshore account based in Cyprus and controlled by Manafort with $5.3 million to help fund the effort. Yet even this amount paled in comparison to the $42,042,307 that Serhiy Lyovochkin provided to Manafort from 2010 to 2013.
Other oligarchs who contributed to the lobbying effort included Borys Kolesnikov, Ukraine’s former infrastructure minister, and Andriy Klyuyev, former secretary of the National Security Council. Kolesnikov and Klyuyev paid $8,716,184 and $4,190,111 respectively via Cyprus-based offshore accounts.
Like CXSSR, the Centre engaged in an online propaganda campaign. In some cases online bloggers were paid $500 to write posts praising the Yanukovych government. In some cases the payments were made by libertarian media strategist George Scoville.
On October 26th, 2012, two days before the Ukrainian parliamentary elections, Scoville arranged a conference call on behalf of the Centre for writers to speak with Mikhail Okhendovskyy of Ukraine’s Central Election Commission. Following the call, Scoville distributed talking points to be written and tweeted about including, “Ukraine has demonstrated its commitment to democracy and passed the test put forth by the international community of holding transparent elections” and “The victory for the Party of Regions is a victory for the people, for Ukraine and for democracy.”
Other talking points included: “The current Ukrainian government is also reforming its energy sector to ensure efficient use of its resources and preserve its important role as an energy corridor between the Caspian Basin and Europe — a corridor that is not subject to Russian interference.”
The 2012 Ukrainian parliamentary elections, in which the Party of Regions won the most seats, were marred by fraud, falsification and vote buying alleged by observers both within and without the country.
Nonetheless, posts and articles reflecting Scoville’s talking points were featured on multiple conservative news and opinion outlets, including RedState, Family Security Matters, Right Wing News, Publius Forum and Canada Free Press. Party of Regions friendly exit polls and election observer statements were also distributed by Scoville on behalf of the Centre.
The Centre was also used as a front to hire two powerful Washington lobbying and political consulting firms, the Podesta Group and Mercury Public Affairs.
The Podesta Group was paid $1.13 million by the Centre between June 2012 and April 2014 to lobby Congress, the National Security Council, the State Department and a variety of other federal agencies.
Mercury Public Affairs received $1.07 million to focus its lobbying primarily on Congress.
The Podesta Group was led by Tony Podesta, brother of the powerful Democratic party insider John Podesta.
John worked as a high-level White House aide to both Bill Clinton and Barack Obama and would later serve as campaign chairman of Hillary Clinton’s 2016 presidential bid.
Under Tony’s leadership, the Podesta Group became one of the most successful and highest grossing lobbying firms on K Street, representing banks, defense contractors, big pharma and American-aligned dictators such as Honsi Mubarak of Egypt. Other regimes represented by the Podesta Group included Vietnam, Azerbaijan and South Sudan.
The Centre’s contract with Mercury Public Affairs was signed by lobbyist and former Congressman Vin Weber.
Weber had spent twelve years in Congress as a Republican working alongside Newt Gingrich.
From 2001–2009, Weber served as the president of the National Endowment for Democracy (NED). In 2010, the NED awarded Weber their Democracy Service Medal, describing Weber as “a sophisticated and articulate voice for international democracy assistance in the broader policy and political communities.”
Weber served as a top foreign policy advisor for Mitt Romney during his 2012 presidential campaign. Romney was noted for describing Russia as American’s number one geopolitical foe.
In January of 2012, as he was advising Romney, Weber filed a disclosure form with the Justice Department indicating that he was lobbying for Gazprom. Weber got the Gazprom job through a recommendation from the the global public relations firm Ketchum, which had been personally selected by Putin’s press secretary Dmitri Peskov to lobby for the Russian Federation for $5 million a year.
Just a few months later, while still affiliated with the Romney campaign, Weber signed on to represent the Centre.
While both Podesta and Weber later maintained that they did not know the Centre was a front for the Ukrainian government, Manafort deputy Rick Gates testified that he told both of them this was the case.
Court documents also revealed that numerous employees at both companies “understood that they were receiving direction from [Manafort and Ukrainian President Viktor] Yanukovych, not the Centre.”
Gates sent multiple emails to both Weber and Podesta indicating the involvement of Manafort and Yanukovych.
On August 10th, 2012, he wrote, “Paul met with the big guy yesterday and we have some special requests.”
On November 9th, Gates wrote to Podesta, “I would like to do a brief call with this group today to discuss items regarding out plan moving forward.” He continued, “Paul is meeting with the President on Monday to discuss this topic.”
Both Mercury and the Podesta Group began their lobbying efforts in the lead up the 2012 Ukrainian elections, reaching out to election monitors at the International Republican Institute, which was formerly affiliated with the alleged Russian intelligence officer Konstantin Kilmnik, who worked for Manafort in Ukraine.
Lobbyists also contacted Mindaugas Jrkynas, a Lithuanian university professor who was serving as an election monitor.
Manafort personally lobbied Ken Wollack, president of the National Democratic Institute, an NGO which had removed itself from Ukrainian government election-reform group. Wollack had met Tony Podesta in April of 2012 and said of the meeting, “That’s when I found out there was a connection between the Podesta Group and the Ukraine government.”
In the two weeks leading up to the elections the Podesta Group held seven “outreach” meetings with top State Department officials offering a positive spin on the upcoming process. Podesta lobbyists also met with officials at the National Security Council.
In none of their interactions with either State or the NSC did they disclose that they were lobbying on behalf of the Ukrainian government.
Mercury invited Hill Staffers to participate on a call with Mikhail Okhendovskyy of Ukraine’s Central Election Commission, who rubber stamped the validity of the election results in support of Yanukovych.
Following the election, the Podesta Group launched an aggressive campaign on Capitol Hill to legitimize the results despite numerous accusations of improprieties. One Podesta Group document circulated among Hill staff claimed “Initial Reactions from International Observers Positive.”
One of the international observers the document quotes is Sergey Markov, who is affiliated with the Civic Chamber of the Russian Federation (CCRF). “The elections to the Ukrainian parliament were successful, democratic and organized according to standards even better than some of the European Union member states,” Markov gushes.
The document neglected to mention that the CCRF is a domestic Russian organization formed by Putin in 2004. Markov is an informal advisor to both Yanukovych and Putin who publicly denies any Russian involvement in the murder of Alexander Litvinenko.
Markov was also removed and barred from entry to Estonia after local officials accused him of having foreknowledge of the massive Russian cyberattacks that shook the country in 2007.
“This is the first time that I have seen such a transparent competition,” former French foreign minister Thierry Mariani is quoted as saying in other Podesta document distributed across Capitol Hill. “These elections are a great success for Ukraine and a great success for democracy. Today, Ukraine is a real European democracy.”
Thierry is a well known friend of and apologist for the corrupt Aliyev regime in Azerbaijan, engaging in what Le Monde calls “Caviar Diplomacy,” which consists of French officials accepting gifts and goods and promoting the Azerbaijani regime in return.
In 2012, Thierry ran a lobbying group called French Russian Dialogue with Vladimir Yakunin, a former KGB officer and close confidant of Putin’s since his days in St. Petersburg.
The Podesta Group organized a meeting between the founder of the Centre, Leonid Kozhara, and Democratic Senator Chris Murphy, the head of the Senate Foreign Relations Committee.
Mercury coordinated 17 meetings for Party of Regions members on Capitol Hill, including for Sergiy Klyuyev, the brother of one of the oligarchs funding the operation through Manafort.
On March 19th, 2013, Vin Weber arranged for Manafort to meet with Republican Representative Dana Rohrabacher over dinner. Rick Gates later admitted to lying to Federal investigators about the dinner.
Once a Reagan-era cold warrior, in a 180-degree turnaround Rohrabacher had become known in DC as “Putin’s favorite congressman.”
Rohrabacher had for years reliably taken to the floor of the House of Representatives and spouted the Kremlin line on all matters foreign policy. At one point, he bizarrely claimed to have met Putin in the early 1990s at Kelly’s Irish Times bar in DC where they engaged in an arm wrestling match that Putin won.
Despite the absurd nature of congressman’s tale, the FBI was not amused by his relationship with Russia. In 2012, FBI agents and senior members of the House Intelligence Committee summoned Rohrabacher to secure room at the Capitol and informed him that Russia regarded him as an intelligence source and that the Kremlin even had a code name for him. He didn’t seem too concerned.
“I remember them telling me, ‘You have been targeted to be recruited as an agent,” Rohrabacher recalled. “How stupid is that?”
“The three reminisced and talked mostly about politics” a Rohrabacher spokesman would later say of the meeting between the congressman, Weber and Manafort. “The subject of Ukraine came up in passing. It is no secret that Manafort represented Viktor Yanukovych’s interests, but as chairman of the relevant European subcommittee, the congressman has listened to all points of view on Ukraine.”
Three days after the meeting Manafort’s firm DMP International made a $1,000 donation to Rohrabacher’s campaign.
LOBBYING IN EUROPE: THE HAPSBURG GROUP
The final piece in Manafort’s elaborate global influence campaign on behalf of Yanukovych was the establishment of the “Hapsburg Group,” described by Manafort in a June 2012 email to Rick Gates, Konstantin Kilimnik and Alan Friedman as “a small group of high-level European highly influential champions and politically credible friends who can act informally and without any visible relationship with the Government of Ukraine.”
The initial concept had been developed by a former jounalist who had helped Manafort’s previous PR efforts on behalf of Yanukovych, Alan Friedman. Friedman proposed in a memo sent to Manafort that the group be led by former Austrian Chancellor Alfred Gusenbauer.
Other individuals Friedman suggested for the group included: Romano Prodi, former prime minister of Italy; Adolfo Urso, a former Italian trade minister; Jean-Paul Moerman, a Belgian judge; Bodo Hombach, a former German minister; Javier Solana, a former Spanish NATO secretary-general; Alain Minc, an advisor to French President Nicolas Sarkozy, Alain Juppé, a former French prime minister; and Aleksandr Kwaśniewski, a former president of Poland.
Friedman suggested that Gusenbauer be paid €25,000-€30,000 a month for the work. Gusenbauer would then be used to both help recruit and serve as a conduit to pay the other high level members of the group, “so as to be quite indirect.”
Friedman, who claimed to have already spoken to the former Austrian Chancellor about the idea, emphasized that “Alfred Gusenbauer is willing to be discreet.” Friedman also let Manafort know that Gusenbauer “embraced the idea of what he called ‘underground commenting.’”
At the time, Gusenbauer was the chairman of a Vienna-based Sustainable Ukraine Foundation. It was subsequently discovered that the Foundation was owned by Olexiy Azarov, the son of the Party of Regions Prime Minister Mykola Azarov.
Gusenbauer agreed to help form and organize the Hapsburg Group for €300,000 per year. According to court documents, he successfully recruited Romano Prodi and Aleksandr Kwaśniewski into the lobbying effort.
In 2013, Gusenbauer visited Washington, DC and held multiple meetings on Capitol Hill accompanied by Mercury Public Affairs lobbyists Ed Kutler and Mike McSherry. Over the course of his trip to Washington, Gusenbauer met with Baxter Hunt, the Director for Ukraine, Moldova and Belarus Affairs at the State Department, as well as with congressmen Bob Aderholt (R-AL), Bill Keating (D-MA), Tom Marino (R-PA) and Ed Royce (R-CA).
In March of 2013, Romano Prodi visited Washington, DC. While Prodi was paid via Gusenbauer and later denied any knowledge of Manafort’s involvement in the Hapsburg group, it was Alan Friedman who helped arrange his trip.
Friedman, who was a well-known author and journalist in Italy, had been a longtime acquaintance of Prodi.
In DC Prodi met with Ed Royce, House Majority leader Eric Cantor (R-VA) and and staffers from the Senate Foreign Relations Office.
Prodi later described the compensation he received from Gusenbaur as the product of “normal private relations I had with him,” continuing on to say, “but not any money from external sources.”
In a June 2012 memo, Manafort wrote regarding former Polish president Kwaśniewski, “Although his appointment as European Parliament official to monitor the Tymo[shenko] trial would prevent Aleksandr Kwaśniewski from any formal activity, Chancellor Gusenbauer will meet him June 29th and will discuss with him the idea of Kwaśniewski joining a more formal Advisory Panel in 2013. He is confident that this is very likely and believes that some informal and covert interaction is possible in 2012.”
Kwaśniewski was at the time an EU Parliament envoy to Ukraine and meant to be negotiating the release of Yulia Tymoshenko, Yanukovych’s top domestic political opponent who had a thrown into prison following his election victory.
Further down the same memo under “Next Steps,” Manafort indicated that Gusenbauer would speak to “President K” at a Euro football game in Warsaw, where they would “agree on their plan of action.”
Though he admitted to having met Paul Manafort “several times” in the course of his EU duties in Ukraine, Kwaśniewski later denied having anything to do with the Hapsburg Group.
He did say that he participated in debates and conferences in Ukraine between 2012 and 2013 that he participated in “sometimes with Prodi, sometimes with Gusenbauer” for which he was paid. “Of course, we took fees. Maybe Manafort paid for them through his companies? But these were public, open debates.”
In fact, the €2 million that eventually was paid to the Hapsburg Group via four offshore bank accounts came from Serhiy Lyovochkin.
In addition to the Hapsburg Group, Lyovockin was also the source of cash used to pay Mevlut Cavusoglu, the current Turkish foreign minister and former president of the Parliamentary Assembly of the Council of Europe (PACE).
Cavusoglu, who was publicly a proponent of the EU Association Agreement with Ukraine while simultaneously attempting to tamp down criticism of the Tymoshenko arrest, was clandestinely being paid by Lyovochkin via Manafort while working on the PACE mission to observe the 2012 Ukrainian parliamentary elections.
Leaked emails received by the Organized Crime and Corruption Reporting Project reveal that Gusenbauer, Prodi, Kwaśniewski and Cavusoglu were all on Lyovochkin’s payroll. By mid-2013, Lyovockin was late with his payments much to Alfred Gusenbauer’s displeasure.
“On the question of the outstanding payments I want to support you in pushing for a resolution soon, because the members of the Hapsburg Group are neither accustomed to nor willing to accept unjustified delays,” Gusenbaur cagily wrote in an July 2013 email to Alan Friedman.
“H Group is pissed,” Friedman warned Manafort after forwarding Gusenbauer’s email. “In order to preserve Sasha [Kwaśniewski] and H group cooperation, we need to get three transfers done today or Monday.”
The Hapsburg Group was owed €700,000 in advanced payments for the upcoming latter half of the year and Gusenbauer was demanding to be paid for the conferences he had already organized. Cavsoglu was owed €230,000. Manafort forwarded the email to Konstantin Kilimnik, the alleged Russian intelligence officer who worked as his right hand man in Ukraine.
“Paul urgently requests SV [Serhiy Volodymrovich Lyovockin] be told the Hapsburg comrades are getting out of control because of non-payment of their services and asks to clarify what he should do,” Kilimnik wrote to Lyovockin’s personal assistant, who went on to forward the entire chain to Lyovochkin’s personal address.
The money appears to have gone through as Hapsburg activities continued unabated.
Gusenbauer currently serves on the supervisory board of the Dialogue of Civilization Institute, which was co-founded by Vladimir Yakunin, a close confidant of Vladimir Putin.
According to unsubstantiated testimony by FSB whistleblower Alexander Litvinenko before his death, Romano Prodi was linked with the KGB. The accusation was made during a controversial Italian parliamentary inquiry known as the Mitrokhin Commission, which was promptly sued by Prodi and shut down.
In 2014, Aleksandr Kwaśniewski joined the board of the Ukrainian energy company Burisma Holdings. At his urging, he was joined on the board by Hunter Biden, the son of American Vice President Joseph R. Biden, Jr. Kwaśniewski recalled telling Hunter, “I am sure this company is very important for the independence of Ukraine.”
Despite the remarkable team Manafort assembled to lobby on behalf of Viktor Yanukovych, historical events intervened to disrupt his best laid plans. Following the Maidan Revolution, Manafort’s chief sponsor Viktor Yanukovych fled the country.