With President Obama currently in Europe condemning Russia’s “brazen assault on the territorial integrity of Ukraine,” and politicians of both parties denouncing Russian Prime Minister Vladimir Putin for pushing Europe toward war, you might think a major Russian financial institution targeted by U.S. sanctions would have a hard time trying to find someone reputable to lobby on its behalf in Washington.
You would, of course, be wrong.
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Last week former Senate Majority Leader Trent Lott, a Republican from Mississippi, and former Senator John Breaux, a Louisiana Democrat, filed a lobbying disclosure indicating that they are now working for a subsidiary of Moscow-based Gazprombank. In the complicated world of Russian business, this means that they are, indirectly at least, working on behalf of the Russian government.
Gazprombank’s biggest shareholder is Gazprom, the largest natural gas company in the world, which grew out of the former Soviet Gas Industry Ministry. Gazprom is a public company, but the Russian government holds a controlling share of its stock and often uses the business as a political tool, at different times cutting off natural gas supplies to countries that have displeased it, including Georgia, Moldova, Ukraine and Belarus.
Lott and Breaux work for the law firm Squire Patton Boggs, which in 2010 acquired the Breaux-Lott Leadership Group, a lobbying firm the two co-founded in 2008. Both men are listed as “senior counsel” on the firm’s website. The filing submitted to the Secretary of the Senate and the Clerk of the House last week reported that the two will lobby their former colleagues on Gazprombank’s behalf on “banking laws and regulations including applicable sanctions.”
Gazprombank is the third-largest bank in Russia, and is a key player in financing the country’s all-important energy industry. That made it a natural target for U.S. sanctions after Russia invaded Ukraine’s Crimean Peninsula earlier this year and began supporting rebels in the country’s eastern region. The bank is unusual in that its business is not confined to finance. For instance, Gazprombank is also the owner of Gazprom Media, which includes the NTV television station known for largely pro-Putin regime reporting.
The company has been much in the news lately, not just because of its involvement in Putin’s plans for Ukraine, but for a ruling in the Permanent Court of Arbitration in The Hague, which directed the Russian Federation to pay $50 billion to the shareholders of the former Yukos oil company. Gazprom and another energy firm, Rosneft, both benefited when Yukos was dissolved after the politically motivated prosecution of its owner, Putin’s political rival Mikhail Khodorkovsky.
On July 16, the U.S. imposed sanctions on a number of Russian financial institutions, including Gazprombank. “In response to Russia’s continued attempts to destabilize eastern Ukraine and its ongoing occupation of Crimea, the U.S. Department of the Treasury…imposed a broad-based package of sanctions on entities in the financial services, energy, and arms or related materiel sectors of Russia, and on those undermining Ukraine’s sovereignty or misappropriating Ukrainian property,” the Treasury Department said in a press release at the time.
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The strategy of hiring former government officials to exert influence on its behalf is a tried and true one for Gazprom. At one point it hired former German Chancellor Gerhard Schroeder and offered former Italian Prime Minister Romano Prodi a job, which he declined.
To be sure, Lott and Breaux aren’t the only people in Washington working on behalf of the Russian government. The Washington-based PR firm Ketchum has for years represented the Russian government in the U.S. (at times controversially).
Angelo Kakolyris, Squire Patton Boggs’ director of media and communications, said by email Wednesday afternoon that the firm was not commenting on its relationship with Gazprombank.
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