Stealth Players: Who's on Putin's American Payroll?

03/06/2014

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Russian President Vladimir Putin. Alexey Nikolsky | AFP | Getty Images

By Eamon Javers, CNBC.com | Wednesday, 5 Mar 2014

In Washington, Vladimir Putin's Russian government has all the usual tools of statecraft at its disposal—an enormous embassy compound on Wisconsin Avenue, a stately Beaux-Arts ambassador's residence on 16th Street, and even a Ministry of Foreign Affairs Twitter account.

But the Putin government also has less visible tools of influence in Washington: a battery of well-paid American public affairs experts and lobbyists, each helping to push the Russian government's line in the U.S. capital.

Thanks to the Foreign Agents Registration Act, you can get a sense of just how much money the Russian Federation is spending in the United States, and what that government is spending its money on.

According to records maintained by the Justice Department, the Putin government exerts most of its behind-the-scenes influence in the U.S. through the public relations firm Ketchum, which documents show was paid more than $1.5 million in the most recent six-month reporting period for its work on behalf of Russia.

What does Ketchum do for that cash? Mostly distribute press releases, the documents say. But according to a document filed in November, Ketchum is also involved in "preparing, disseminating or causing the dissemination" of the website ModernRussia.com, a URL that redirects to ThinkRussia.com. 

This week, the English-language site features a look back at the Sochi Olympics, a feature on international women's day in Russia, and a piece detailing a crackdown on bitcoin. It does not include any mention of tensions in Ukraine. The website says that it is intended to "offer news and share perspectives on Russia."

Ketchum is also charged with managing the Twitter account. One day after Russian forces apparently seized control of key sites in Crimea, that Twitter account instead focused on the Olympics, which had ended a week earlier. The account included this tweet: "If you could have attended any #Sochi2014 event, which would you choose?"

A Ketchum representative did not respond this week to several phone and email requests for comment.

Ketchum also has a separate contract, paying more than $3 million between June 1 and Nov. 30, to represent the interests of Gazprom Export, the natural gas exporting subsidiary of the Russian energy giant Gazprom, which is itself controlled by the Russian government.

Ketchum's disclosure forms list a variety of activities on behalf of its Russian clients, including distributing press releases from Gazprom and the Russian Kontinental Hockey League, as well as "correspondence with Tribeca Film Festival on future sponsorship options."

Ketchum has also hired high-powered subcontractors to work on the Russian account, including the law firm of Alston & Bird, which is the professional home of former senator and GOP presidential candidate Bob Dole and former Democratic congressman Earl Pomeroy, among others.

Engagement letter

An engagement letter between Alston & Bird and Ketchum to represent Russian interests dated Dec. 24 was signed by Bob Jones, a partner at Alston & Bird, and describes a monthly fee of $15,000 per month for the law firm. Jones is listed on Alston & Bird's website as the leader of the firm's legislative and public policy group, and described as having represented prominent corporate clients in Washington. His Alston & Bird biography does not list any work on behalf of the Russian government.

Jones declined to comment for this article, and an Alston & Bird employee referred CNBC to Ketchum. A Ketchum document shows that Alston & Bird was paid $100,000 on behalf of the Russian Federation over a six-month period in 2013.

So what exactly does Alston & Bird do on behalf of the Russians? It's not entirely clear. A filing with the Justice Department says simply that "Alston & Bird will gather information and provide advice and analysis on various areas of international politics, and U.S. foreign and foreign economic policy, which affect the bilateral U.S.-Russian relationship."

Another law and lobbying firm, Venable, has been hired by Ketchum to work on the Gazprom Export account. Venable is the professional home to former Democratic congressman Bart Stupak, among others. According to a 2010 engagement letter on file with the Department of Justice, Venable expected to be paid $28,000 per month plus any travel expenses incurred by the firm.

"I think Putin is a thug and a dictator and I'm embarrassed that my former firm would be involved in any way with that regime."

An engagement letter between Venable and Ketchum was signed by William Nordwind, who is described on Venable's website as co-chairman of its legislative practice group. His Venable biography lists a range of work on corporate issues and says he specializes in "matters within the jurisdiction of the House Energy and Commerce Committee," but it does not mention any work on behalf of Gazprom.

The law firm writes in a 2010 disclosure filing simply that it will "provide advice, counsel and render federal government relations services, with an emphasis on energy policy." Neither Nordwind nor other Venable officials returned calls for comment. A Ketchum document shows that Venable was paid $168,000 on behalf of Gazprom over a six-month period in 2013.

Other consultants

Ketchum appears to have brought other consultants as well. A document shows the firm paid more than $138,000 to Maslansky Luntz & Partners over a six-month period in 2013. That firm specializes in honing the use of language to help drive specific political outcomes and is now known as Maslansky & Partners, after the departure of firm co-founder Frank Luntz in 2008, according to the firm's website.

"I didn't do anything for or with the Russians at any time," said Luntz. "I think Putin is a thug and a dictator and I'm embarrassed that my former firm would be involved in any way with that regime."

Chris Manley, senior director of language strategy at Maslansky & Partners, confirmed that the firm worked as a subcontractor for Ketchum, and referred CNBC to that firm. Asked if he had any ethical concerns about working on behalf of the Russian government, Manley said "No. Certainly not for the work I've done."

Ketchum's work on behalf of the Russian government has stirred controversy in the past. In 2012, ProPublica reported that Ketchum had been responsible for placing op-eds from Russia-friendly experts on American media websites, including that of CNBC. ProPublica said that Ketchum had received almost $23 million in fees from the Russian government from 2006 until 2012, as well as $17 million on the Gazprom account. A Ketchum spokeswoman was quoted in the piece as saying that when the firm corresponds with experts or the media on behalf of Russia, "consistent with Ketchum's policies and industry standards, we clearly state that we represent the Russian Federation."

In September, the website BuzzFeed reported that Ketchum was responsible for placing an op-ed by Putin in The New York Times. There was no response in the BuzzFeed article from Ketchum.

The op-ed was entitled "A Plea for Caution from Russia," and argued against a possible U.S. military strike in Syria. "It could throw the entire system of international law and order out of balance," the op-ed said. "We must stop using the language of force and return to the path of civilized diplomatic and political settlement." It is not uncommon for public relations firms to pitch op-eds or commentaries to media firms.

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