Lobbying group to maintain Russia contract amid tension

A prominent lobby shop says it is planning to keep its lucrative contract representing Russia despite increased friction between Washington and Moscow.

The Washington Group’s decision comes amid uproar on Capitol Hill and in the White House in the aftermath of Russia’s invasion of its neighbor Georgia, which attracted criticism from presidential candidates Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.).

{mosads}It is not unusual for lobby shops to terminate contracts with foreign countries when representing them becomes politically difficult.

For example, Cassidy and Associates dropped its $1.2 million contract with the Pakistani government after former President Pervez Musharraf declared emergency rule last year.

But the Washington Group, a subsidiary of public affairs giant Ketchum Inc., plans to keep its contract in place, said Al Jackson, a partner at Ketchum.

“The Washington Group and Ketchum continue to represent the Russian Federation,” said Jackson, adding, “The Washington Group was hired to focus mainly on issues surrounding Russia’s ascension to the [World Trade Organization (WTO)],” and repealing the so-called Jackson-Vanik amendment for the mutual benefit of American and Russian businesses.

Jackson, however, did not mention the situation with Georgia, even though his company has been active lobbying on behalf of Russia after the invasion of Georgia.

In the wake of the Russia-Georgia conflict, the Bush administration recently postponed a U.S.-Russia civilian nuclear pact.

“Trying to advance the Russian image in Washington is going to be more challenging,” said Steven Pifer, a Russian and Eurasian visiting fellow at the Brookings Institution.

“You cannot underestimate the anti-Russian mood and fervor in Washington,” said Andrew Kuchins, the director and senior fellow of the Russia and Eurasia program at the Center for Strategic and International Studies.

That mood could also translate into an increased fee for representation, according to lobbyists who represent foreign clients. As of press time, the Washington Group had not filed a change in fees with the Department of Justice.

The Russian government signed a $2 million contract with Ketchum in 2006 to help with public relations surrounding the G8 Summit, according to Justice Department records.

The contract has grown since then as the Washington Group was added to the agreement in 2007. Integrated Solutions Group, another Washington Group partner, also joined in representing Russia, signing a contract in February 2008.

Overall, Ketchum and the Washington Group have taken more than $7.5 million in fees since 2006, according to Justice Department records.

In addition, Ketchum has handled public relations in the United States for Gazprom, Russia’s national natural-gas company. That contract has earned it more than $2.6 million in the last year, according to records.

Over the past two years, much of the lobbying for Russia by the Washington Group was in regard to the country’s energy policy as well as its status with the WTO. But late this summer, as tensions between Georgia and Russia exploded into a full-fledged military conflict, lobbyists in Washington also took action.

The day after Georgian troops attacked rebels in the breakaway province of South Ossetia, senior lobbyists such as former Rep. Susan Molinari (R-N.Y.) contacted aides to Sen. Joe Biden (D-Del.), chairman of the Senate Foreign Relations Committee, and Rep. Ileana Ros-Lehtinen (R-Fla.), ranking member on the House Foreign Affairs Committee, Justice records show. The records do not spell out the details of those conversations.

Ketchum also distributed statements from the Russian government to congressional offices saying that the Georgian military action was “a gross violation of international law” and that “the perpetrators will receive the punishment they deserve.”

{mosads}The public relations giant has been active this month in presenting Russia’s side of the story. The firm distributed a timeline that emphasized Russia’s attempts to reach a peace settlement before Georgia’s attack as well as contradictory statements coming from the Georgian government on the conflict.

Since the start of the Georgia crisis, Ketchum has been leading an international consortium of agencies, including the Brussels, Belgium-based PR giant GPlus, to promote Russian interests, according to PR Week.

In the wake of Molinari’s recent departure from the Washington Group, John O’Hanlon, the co-founder of the lobby shop, is currently managing the contract. O’Hanlon is a longtime Democrat and a former finance chairman for the Democratic National Committee’s 2003 presidential gala.
Adam Olsen, who is the head of Integrated Solutions Group, also has strong Democratic credentials. He worked as the deputy national finance director for former House Democratic leader Richard Gephardt (Mo.).

But the Washington Group still has strong ties to McCain — apart from former CEO Molinari, who serves on the Women for McCain Steering Committee. McCain’s former economic adviser, Carlos Bonilla, is a lobbyist at the Washington Group. So is Missy Edwards, a big-time fundraiser for the Republican candidate. Edwards, according to a Department of Justice filing, traveled to Moscow for a U.S.-Russia Business Council meeting in October 2007. Ketchum PR directed that trip.

Yet McCain has been an adamant critic of Russia. The work his advisers did on behalf of that country seemed to have little influence on him during the recent outbreak of hostilities in Georgia.

McCain’s senior foreign policy adviser, Randy Scheunemann, has previously lobbied for Georgia.