Russian clients ditched by lobbyists

Exodus suggests representing country's interests turning toxic

WASHINGTON >> A half-dozen U.S. lobbying firms severed ties with Russian-linked businesses over the past week, a dramatic pullback for an industry that often has few qualms about representing controversial interests.

The rush offers a measure of the potency of the Biden administration's new sanctions, which were levied after Russian President Vladimir Putin ordered the invasion of Ukraine last week. They make it difficult, if not outright illegal, for U.S. companies to do business with Russia-based ones.

Firms including McLarty Associates, BGR Group and Venable LLP abruptly canceled arrangements that have collectively yielded millions of dollars in lobbying fees in recent years, records show. Among their former clients are investors and operators for the now-canceled Nord Stream 2 gas pipeline, which was supposed to deliver Russian gas to Germany, as well as Russian state-controlled banks and others.

Thus far, it's reversed the normal order of business when war breaks out, which often spurs foreign governments to enlist Washington-based firms to lobby the U.S. government, a review of lobbying records shows.

“These lobbying firms and lobbyists were pulling in huge amounts of money,” said Craig Holman, a registered lobbyist for the good government group Public Citizen, who closely tracks the industry. “I really have a hard time believing that they suddenly became altruistic once Russia invaded Ukraine.”

Holman said a more likely scenario was that the firms were “lobbying on behalf of the sectors, industries and projects” that were covered by the sanctions, and thus required to cease their work.

It's difficult to assess just how many Russian companies or Russian-linked companies are still being represented by U.S. lobbyists. But the recent exodus suggests that the Ukraine invasion may have made representing the country's interests too toxic even for an industry that has

in the past welcomed payment from defense companies, despots and rebel groups.

In 2019, for example, a Libyan general seeking to consolidate his power in the North African country spent $2 million hiring a Texas-based firm to forge closer relations with the U.S.

Many of the Russian linked companies that were dropped were involved in the Nord Stream 2 project, a completed undersea pipeline that would bypass Ukraine to send Russian gas supplies to Europe via Germany. The opening of the pipeline, which would have given Russia tremendous leverage by making it an even larger energy supplier to Europe, was suspended by Germany after last week's invasion, leading the U.S. to issue sanctions against the company operating it.

McLarty quickly dropped five European energy companies that were investors in the project, which have paid the firm at least $3.4 million in fees since 2017, records show.

For months, Republicans in the Senate have railed against the pipeline and sought sanctions on businesses involved in the project. But the effort, including legislation sponsored by Sen. Ted Cruz, R-Tex., went nowhere because it was opposed by President Joe Biden as well as Senate Democrats, who hold the majority.

Lobbying records indicate McLarty lobbied Congress and the executive branch to “protect and further the company's interest in the debate over natural gas as an element of European energy security.”

“We felt the honorable thing to do in the aftermath of the Russian invasion was to support U.S. policy and withdraw from the pipeline project,” Richard Burt, who leads a wing of McLarty focused on foreign interests, wrote in an email. Burt had donated $14,000 to Biden's 2020 election efforts, record show.

The firms BGR Group and Roberti Global also dropped the pipeline project's construction and operating company, Nord Stream 2 AG. The company is controlled by a subsidiary of the Russian stateowned company Gazprom, whose fuel sales support the Russian government budget.

A representative of Roberti Global, which has collected at least $9.8 million in lobbying fees from Nord Stream 2 AG, did not respond to a request for comment.