Now, in the wake of the Russian invasion and new sanctions announced by President Joe Biden, many of those lobbying firms are rushing to cut ties and drop their lucrative contracts.
At least six lobbying firms that previously represented now-sanctioned Russian banks and companies tied to a Russian natural gas pipeline terminated their contracts or representation this week, according to statements and federal lobbying disclosures.
The exodus marks the rupture of a Moscow-to-K-Street conduit that has long employed former federal officials and members of Congress of both parties, experts said.
“For anybody that’s representing a Russian entity in Washington, DC, it’s an uphill climb … that has just gotten a lot steeper,” said Benjamin Freeman, a research fellow at the Quincy Institute for Responsible Statecraft, a foreign policy think tank, who has written a book on foreign influence. “It’s going to be hard to find a sympathetic ear for any of these Russian clients on the Hill right now.”
Some of the banks Biden targeted with sanctions, including VTB, Russia’s second-largest, were put under “full blocking” sanctions, which freeze organizations’ US assets and prohibit them from doing business in the country. That means it would be illegal for lobbyists to work for them unless they receive a license from the Treasury Department, according to legal experts.
Dropping contracts with fully blocked banks “is not a gesture in solidarity with Ukraine, this is a requirement under US law,” said Erich Ferrari, an attorney who specializes in US economic sanctions. Lobbyists could face prosecution for running afoul of sanctions laws, he said.
But even for lobbyists representing firms that aren’t fully blocked, it would be a “real reputational risk for these firms to keep representing these sanctioned entities,” said Freeman, who called ties to Russia a “scarlet letter” in DC.
The Russian banks did not respond to CNN requests for comment about their lobbyists abandoning them, but several issued statements saying they were prepared for the sanctions or calling Biden’s actions politically motivated. “We have worked through several plans to counter the sanctions in ways which minimize the negative consequences for our clients,” a spokesperson for VTB wrote in an email.
VTB has had one of the longest-running lobbying presences in DC among Russian banks. It has paid lobbying and law firm Sidley Austin more than $2 million since 2015, according to disclosures filed under the Foreign Agents Registration Act.
Fried, who is now a fellow at the Atlantic Council, told CNN that the lobbying had no impact on him or his State Department colleagues.
“I said I’ll talk to him but I won’t go to his fancy banquets,” Fried said of the bank’s chairman. “I told him, ‘You’re part of Putin’s system, you benefit from that system, that system is responsible for aggression to Ukraine, and you know perfectly well why we’re hitting you.’ “
After he left the State Department, Fried said, he had personally been approached by lobbyists offering “bucket loads of money” to work for oligarchs trying to avoid sanctions, but he turned down the offers. “What am I going to do, buy another Prius?” he asked.
A Mercury spokesperson said the firm had terminated its contract with the bank Thursday when it was included in Biden’s sanctions.
A Venable spokesperson said the company had terminated its contract with the Sberbank subsidiary on Friday.
Roberti Global’s lobbying work included “potential financial sanctions affecting the project,” the disclosures said. The firm’s chairman, Vin Roberti, is a former Connecticut state representative and a major Democratic fundraiser.
Spokespeople for Roberti Global, BGR and McLarty confirmed the contracts had been terminated but declined or did not respond to interview requests.
“What this shows is regardless of how successful a lobbying campaign may be, a foreign power can completely undo any wins with their foreign policy blunders,” Freeman said. “Putin’s decision to invade Ukraine has completely undone the work of all of these influence campaigns.”