While working for ousted Ukrainian President Viktor Yanukovych, Paul Manafort helped transfer more than a million dollars to a high-powered DC lobbying firm led by the brother of Hillary Clinton’s campaign chairman.
The payments began in 2012, according to the Associated Press, while Manafort and his business associate Rick Gates were advising the Ukrainian ruling party. The pair were reportedly involved in the deal, which saw more than $2 million funneled into the coffers of Washington lobbying firms to advance Ukrainian interests in the US.
Lobbyists are required to register as foreign agents with the Department of Justice when they do work on behalf of foreign governments. In this case, however, the payments were routed through a newly-created non-profit that obscured the direct ties to the Yanukovych government.
The AP revealed that the Podesta Group Inc. received $1.13 million between 2012 and 2014 to influence the White House, federal agencies, and Congress on behalf of the European Centre for a Modern Ukraine. The wire service noted that the organization’s board included members of parliament from Yanukovych’s political party.
The lobbyists’ work ceased in 2014 when Yanukovych fled Kiev amid widespread protests.
The Podesta Group is a prominent Democratic lobbying outfit run by Tony Podesta—the brother of Hillary for America campaign chair John Podesta. According to the Washington Post, Tony Podesta has raised more than a quarter-million dollars for Hillary Clinton’s presidential campaign so far. In 2014, he bundled $550,000 to help Democratic Senators win re-election.
A Republican lobbying outfit, Mercury LLC, also received payments from the Ukrainian non-profit totaling more than one million dollars.
“That lobbying included downplaying the necessity of a congressional resolution meant to pressure the Ukrainian leader to release an imprisoned political rival,” the AP reported.
A Reuters report from 2013 had previously disclosed the lobbying relationship between the Podesta Group and the European Centre for a Modern Ukraine, but noted that the source of the centre’s funding was “unclear.” The report also didn’t reveal the role by Manafort’s consulting firm.
Manafort didn’t respond to AP’s request for comment. On Wednesday it was reported that he was demoted from his post as chairman of the Donald Trump campaign for president.
Manafort’s associate, Rick Gates, claimed the arrangement was not made to avoid reporting requirements of the Foreign Agents Registration Act.
A Podesta Group employee, however, told the AP that Gates informed the lobbying firms that the purpose of the non-profit was to obscure the source of the money: the Yanukovych government. Other staffers at the firm reported uneasiness over the deal at the time, with one former employee alleging that they considered the arrangement “obviously illegal.”
The sources spoke to the wire service on a condition of anonymity due to non-disclosure agreements with the firm.
Tony Podesta said he was unaware of any dissent within the firm over the deal. According to the firm’s CEO, Kimberly Fritts, a legal conclusion was made that their work on behalf of the European Centre did not need to be reported to the DOJ. The firm claims to have been assured by the group that the Ukrainian government was not supervising or directing the non-profit’s operations.
“If counsel had determined FARA was the way to go, we would have gladly registered under FARA,” she told the AP.
The Podesta Group has previously registered with the DOJ for work on behalf of foreign governments, including South Sudan, Vietnam, and the Republican of Azerbaijan.
