Scrubbed Images Open
Doors, Assure Investors;
A 'Most Wanted' Client
By Glenn R. Simpson and
Mary Jacoby
Former Federal Bureau of Investigation director
William Sessions
once condemned Russia's rising mafia. "We can beat organized crime," he told a Moscow security conference in 1997.
Today, Mr. Sessions is a lawyer for one of the FBI's "Most Wanted":
Semyon Mogilevich,
a Ukraine-born Russian whom the FBI says is one of Russia's most powerful organized-crime figures.
Mr. Sessions is trying to negotiate a deal with the U.S.
Department of Justice for his client, who is charged with racketeering
and is a key figure in a separate Justice Department probe of energy
deals between Russia and Ukraine.
A number of notable Washington insiders are earning big fees
these days by representing controversial clients from the former Soviet
Union.
From prominent businessmen -- some facing criminal
allegations -- to top politicians, well-known ex-Soviets are lining up
to hire help with criminal cases, lobbying and consulting. These
figures, many of whom made fortunes in the wide-open 1990s amid the
Soviet Union's disintegration, hire Washington insiders to help
rehabilitate their reputations in the West or to persuade investors and
regulators they are committed to good corporate governance.
Sensitive
foreign clients are nothing new for Washington's lobbying industry.
Among others, Jack Abramoff -- convicted of fraud and bribery last year
-- represented clients in Pakistan and Russia, while former Liberian
President Charles Taylor, awaiting trial on war-crimes allegations, once
employed his own Washington lobbyist.
But recent years have seen
a growing number of former Soviet officials and industrialists seeking
assistance in the U.S. capital. Many are playing an increasingly
important role in the global economy, as they wrest ever-greater control
of Eurasia's vast energy reserves and other natural resources. All have
become politically powerful in their home countries as well, making
them -- and by extension their U.S. advisers -- key players in Western
efforts to promote regional stability.
Among recent examples:
Full Disclosure
Below, a selection of documents relating to the Washington dealings of figures from the former Soviet Union.
The FBI has placed Semyon Mogilevich on its "Most Wanted" list; the Justice Department has charged him with conspiracy, fraud and money laundering. Former FBI director William Sessions is representing the Ukrainian-born Russian in hopes of getting a deal with Justice. * * *
Bob Dole was handsomely compensated for getting a U.S. visa
for controversial Russian aluminum magnate Oleg Deripaska. But some
lobbyists don't make clear who their clients are or where they get their
fees. Barbour Griffith & Rogers said it worked for Friends of Ukraine, but tax records show the group was operated out of the lobby firm's own office. * * *
A group called the Republican Party of the Ukraine, headed by Energy Minister Yuri Boyko, also used a Washington lobbyist
but the bills were ultimately paid by a company registered on
the Caribbean island of Nevis. Mr. Boyko is a key player
in controversial energy deals involving another
Ukrainian businessman named Dimytro Firtash, who according to a federal lawsuit also hired Washington firms.
For a $560,000 fee,
Bob Dole,
the former Senate majority leader and 1996 Republican
presidential nominee, helped a Russian billionaire accused by rivals of
bribery obtain a visa to visit the U.S. in 2005, among other things.
Leonid Reiman,
a powerful member of Russia's cabinet and close ally of President
Vladimir Putin, uses a Washington public-relations consultant. Mr.
Reiman is under federal investigation in the U.S. over money laundering
and is locked in a high-stakes battle with Moscow conglomerate Alfa for
control of a Russian telecommunications empire. Alfa has paid Barbour
Griffith & Rogers -- the influential lobbying firm co-founded by
Mississippi Gov. Haley Barbour -- nearly $2 million in lobbying fees.
Paul Manafort,
a former adviser to Mr. Dole's presidential campaign, has advised
a Ukrainian metals billionaire and his close political ally, Ukrainian
Prime Minister Viktor Yanukovich. Mr. Yanukovich, who favors closer ties
with Mr. Putin's administration, is embroiled in a power struggle with
pro-Western Ukrainian President Viktor Yushchenko.
In some cases,
the details of how these ex-Soviet clients made their fortunes are
murky -- and the source, amount and purpose of the fees they pay
Washington consultants can be as well. In 2005, for example, Ukrainian
politician
Yuri Boyko
used a Caribbean shell company to pay a Washington lobbyist for
help arranging meetings with top Republicans.
Mr. Boyko,
currently Ukraine's minister of energy, was the architect of gas deals
between Russia and Ukraine now being investigated by the U.S. Justice
Department for possible ties to the alleged mafia client of Mr.
Sessions. Mr. Boyko said the $98,000 in fees was paid by a small
political party he heads. Annex Holdings, the Caribbean firm that paid
Mr. Boyko's lobbyist, also had a stake in the gas deals, corporate
records show.
At times, even clients' names are camouflaged by lobbyists --
despite federal laws making clear that they aren't allowed to disguise
identities by taking fees from intermediaries. Without such rules, says
prominent Washington ethics lawyer
Jan Baran,
"you would just have a bunch of shell organizations identified as
clients of lobbyists and lobbying firms."
In 2004, for instance,
a United Kingdom shell company called Foruper Ltd., which had no assets
or employees, paid Barbour Griffith $820,000. Foruper was established
by an attorney who structured the natural-gas deals being investigated
by the U.S. Justice Department. Prosecutors are investigating whether
there are ties between the attorney who set up Foruper and Mr.
Mogilevich, Mr. Sessions's client.
In its filings, Barbour Griffith said the fees were for
"promotion of greater cooperation and financial ties between Eastern
Europe and the West."
In 2002 and 2003, a group called "Friends
of Ukraine" paid Barbour Griffith $320,000. Tax records show that
Friends of Ukraine, which no longer exists, was headquartered at Barbour
Griffith's own office in Washington. The group's chairman was firm
partner
Lanny Griffith.
Mr. Griffith said in an email that the firm as a policy doesn't
discuss client matters but added that Barbour Griffith "has been
scrupulous in our compliance" with laws governing the disclosure of
lobbying clients.
Barbour Griffith is locked in a legal battle
with associates of Mr. Reiman, the Russian minister, whose Washington
adviser is a former Wall Street Journal reporter named Mark D'Anastasio.
Mr. D'Anastasio said he once helped Mr. Reiman as a favor to a friend
but doesn't work for him.
Longstanding federal laws require
Americans to register with the federal government if they do lobbying or
public-relations work for foreign clients. But details in those filings
often offer only a vague sense of the work being done.
Mr. Dole, for instance, disclosed in lobby filings with the U.S. Senate his work for Russian billionaire
Oleg Deripaska.
He described it as involving "U.S. Department of State visa policies and procedures."
Mr.
Deripaska, who has close ties to the Kremlin, emerged from Russia's
"aluminum wars" of the 1990s with a virtual monopoly on the nation's
aluminum production.
Mr. Deripaska has long been dogged by
allegations from business rivals in courts in the U.S. and U.K. that he
used bribery, intimidation and violence to amass his fortune. Those
accusations, which he denies, have never been substantiated and no
criminal charges have been filed. But for years they helped keep the
State Department from granting him a visa.
In 2003, the Russian
industrialist paid $300,000 to Mr. Dole's law firm, Alston & Bird,
according to lobbying reports. After that, Mr. Dole worked to persuade
U.S. officials his client isn't a criminal and that his business
operations are transparent, said people with knowledge of the matter. In
2005, the State Department reversed itself and granted the visa. Mr.
Deripaska then paid Mr. Dole and his firm an additional $260,000,
filings show.
Mr. Deripaska traveled to Washington in 2005 and
also made trips to the U.S. last year, said people with knowledge of the
situation.
Mr. Dole and a State Department spokeswoman declined to comment.
Simon Moyse,
a London-based spokesman for Mr. Deripaska, said the businessman
currently possesses a multiple-entry U.S. visa. He declined to comment
further or provide documentation of Mr. Deripaska's visa status.
The former Dole strategist Mr. Manafort and a former Dole fund raiser,
Bruce Jackson,
have received fees and donations from Ukrainian billionaire
Rinat Akhmetov,
the political patron of Ukrainian Prime Minister Yanukovich.
Messrs.
Manafort and Jackson played prominent roles in the Ukrainian's recent
visit to Washington. The visit included meetings with U.S. officials,
including Vice President Dick Cheney. A company controlled by Mr.
Akhmetov donated $300,000 in 2005 to a human-rights charity run by Mr.
Jackson and his wife, an Internal Revenue Service document reviewed by
The Wall Street Journal shows. Mr. Jackson said he was grateful for the
support.
Mr. Manafort, who isn't registered as a consultant to the Ukrainian leader, didn't respond to requests for comment.
Mr.
Sessions's client, Mr. Mogilevich, is accused in a 45-count
racketeering and money-laundering indictment in Philadelphia of
masterminding an elaborate stock fraud using a web of shell companies in
Europe. The Justice Department also is investigating whether there are
any ties between Mr. Mogilevich and a recent series of billion-dollar
natural-gas deals between Russian gas giant OAO
Gazprom
and Ukraine, people familiar with the matter said. The probe is
being led by the Justice Department's Organized Crime and Racketeering
Section.
According to people familiar with the matter, Mr.
Sessions recently approached former colleagues at Justice with an
unusual offer: Mr. Mogilevich would provide the U.S. with intelligence
on Islamist terrorism if prosecutors opened negotiations to resolve his
legal problems in the U.S. Federal prosecutors rejected that offer,
lawyers and others familiar with the matter said.
Mr. Sessions's firm and a Justice Department spokesman declined to comment.
The
Mogilevich talks were brokered by a prominent Washington security
expert named
Neil C. Livingstone,
who was briefly in the news during the 1980s Iran-Contra scandal
for his work on terrorism issues with White House aide Oliver North.
He declined to discuss the Mogilevich talks, other than to say they involved "very sensitive issues."
Until
recently, Mr. Livingstone was chief executive of GlobalOptions, a
Washington corporate-intelligence firm he founded. Mr. Sessions sits on
the firm's advisory board. Most of its clients, the firm says, "operate
in Russia and the Caribbean."
GlobalOptions has worked with
former Soviet businessmen in the past. In 2004, Mr. Livingstone said,
lobbyists at Barbour Griffith introduced GlobalOptions to a Cyprus-based
firm called Highrock Holdings. Highrock is controlled by
Dimytro Firtash,
a Ukrainian businessman who acknowledges the company's major
shareholders once included Mr. Mogilevich's wife.
In 2003-2005,
Mr. Firtash brokered several billion-dollar deals between Gazprom and
the government of Ukraine. They netted big profits for Highrock -- and
criticism from the U.S. ambassador to the Ukraine at the time for the
deals' lack of transparency.
Mr.
Livingstone said Highrock hired GlobalOptions in 2004 to help it win
federal safety certification for passenger jets it hoped to export to
Central Asia.
However, in a recent lawsuit filed by GlobalOptions
against Highrock claiming unpaid bills, the security firm alleged that
Mr. Firtash hired GlobalOptions for an unspecified "special operation"
on behalf of a Ukrainian government official. The two sides ceased
litigating the suit, which was filed in U.S. District Court for the
District of Columbia, after the bill was paid, but the suit was never
withdrawn.
"We have no knowledge of a company called
GlobalOptions," a spokesman for Mr. Firtash said, adding that he severed
his ties to Mr. Mogilevich several years ago.
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