In the years leading up to Russia’s attack on Ukraine, US lobbyists raked in millions of dollars from Russian banks and financial firms by paying to advance their interests in Washington.
Now, in the wake of the Russian invasion and new sanctions announced by President Joe Biden, many of these lobbying firms are racing to sever ties and drop their lucrative contracts.
At least six lobbying firms that previously represented now-sanctioned Russian banks and companies tied to a Russian gas pipeline have terminated their contracts or representation this week, according to statements and federal lobbying information.
The exodus marks the severing of a conduit from Moscow to K-Street that has long employed former federal officials and members of Congress from both parties, experts said.
“For anyone representing a Russian entity in Washington, DC, it’s a tough climb … that just got a whole lot steeper,” said Benjamin Freeman, a fellow at the Quincy Institute for Responsible Statecraft, a foreign policy think tank, who wrote a book on foreign influence. “It’s going to be hard to find a sympathetic ear to any of those Russian customers on the Hill right now.”
Some of the banks targeted by sanctions against Biden, including VTB, Russia’s second largest, have been subjected to “total blocking” sanctions, which freeze the organizations’ US assets and ban them from doing business in the country. This means it would be illegal for lobbyists to work for them unless they receive a license from the Treasury Department, legal experts say.
Abandoning contracts with totally blocked banks “is not a gesture of solidarity with Ukraine, it is a requirement of American law,” said Erich Ferrari, a lawyer specializing in American economic sanctions. Lobbyists could be prosecuted for violating sanctions laws, he said.
But even for lobbyists representing companies that aren’t fully blocked, it would be a “real reputational risk for these companies to continue to represent these sanctioned entities”, said Freeman, who called the Russian ties a “letter scarlet” at DC.
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