Federal prosecutors have stepped up their investigation of prominent Washington attorney Gregory Craig for work he conducted at his former law firm on behalf of the Ukrainian government in 2012, an effort coordinated by Paul Manafort, according to people familiar with the matter.
Shortly before Manafort pleaded guilty to charges of conspiracy and obstruction this month, attorneys for Craig received requests for information from prosecutors in the Southern District of New York, who are investigating Craig’s activities as an offshoot of the broader probe led by special counsel Robert S. Mueller III, according to one person with knowledge of the exchange.
Craig’s case — and that of two Washington lobbyists who worked with Manafort on Ukrainian matters — were referred last April to New York prosecutors, who appear to be focused on whether the three failed to register as foreign agents while working with Manafort’s Ukrainian clients.
A spokesman for the U.S. attorney’s office of the Southern District of New York declined to comment. No charges have been filed, and representatives for the three men have expressed confidence that their clients did not violate the law.
Still, the investigation of Craig — a White House counsel for President Barack Obama — along with lobbyists Vin Weber and Tony Podesta, has shaken Washington’s lobbying and legal community, which until recently had faced little scrutiny of its representation of foreign clients.
“There is a rising level of concern, particularly from law firms providing services to foreign governments,” said Joshua Ian Rosenstein, an expert on foreign lobbying registration compliance at the Sandler Reiff law firm.
Since Manafort’s plea deal, Rosenstein said the volume of calls he has received on the topic has spiked.
“New and existing clients are asking very specific questions now” about the rules and regulations governing representation of foreign governments, he said.
The 1938 Foreign Agents Registration Act was passed in the run-up to World War II as an effort to require Nazi agents to disclose efforts to influence policy and public opinion in the United States. The once-obscure statute had been enforced haphazardly, but Mueller has seized on the law as part of his broad investigation into Russia’s interference in the 2016 presidential campaign.
The special counsel charged both Manafort and his longtime deputy, Rick Gates, with failing to file as foreign lobbyists as part of a criminal conspiracy to help their Ukrainian client exert influence in Washington. Mueller also examined former national security adviser Michael Flynn’s work for foreign clients before Flynn pleaded guilty last year to lying to the FBI.
Now Craig — along with Weber, a former Republican congressman, and Podesta, an icon in Democratic lobbying circles — is under scrutiny for work done related to what prosecutors contend was a Manafort-directed effort to improve the image of former Ukrainian president Viktor Yanukovych.
According to court filings, companies that match the description of the Podesta Group and Mercury Public Affairs — the company at which Weber is a partner — were paid through a Brussels-based advocacy organization directed by Manafort to promote Yanukovych’s agenda in Washington.
The firms, identified in the filings only as Company A and Company B, received more than $1 million each to work on behalf of Ukraine, prosecutors said. But neither firm initially registered as a foreign agent.
Instead, they disclosed their activities on congressional lobbyist disclosure forms, which require less information than foreign agent registrations.
Representatives for Podesta and Weber have said they have cooperated with prosecutors and believe that their clients acted appropriately at all times.
A partner at Mercury, Michael McKeon, said that his firm waived attorney-client privilege so Mueller’s team could see exchanges the firm had with lobbying law experts to show its willingness to register as a foreign agent, if appropriate.
Craig’s former law firm, Skadden, Arps, Slate, Meagher & Flom, was hired by Yanukovych’s Justice Ministry to review the prosecution of one of Yanukovych’s leading political rivals, Yulia Tymoshenko. The agreement with the ministry also included providing advice on improving prosecutions by the ministry, according to court filings.
Attorneys for Craig — who also did not initially register as a foreign agent for this work — said that in the end,the firm did not provide advice on improving prosecutions.
Skadden did produce a 187-page white paper that offered a mixed review of the trial and imprisonment of Tymoshenko. It states in the executive summary that it was “rendered with total independence,” according to a copy obtained by The Washington Post.
Court documents allege that the report was written by a “United States law firm” paid millions of dollars in financing arranged by Manafort and was used as part of a broad lobbying effort for Ukraine that Manafort and his allies failed to disclose.
“Manafort arranged to have the law firm disseminate hard copies of the report to numerous government officials, including senior U.S. executive and legislative branch officials,” according to court papers filed this month as part of Manafort’s plea.
Skadden was compensated for its work on the report via an offshore Manafort account used to “funnel $4 million to pay the law firm, a fact that Manafort did not disclose to the public,” according to filings.
The Ukrainian government reported that the Skadden paper cost $12,000. But Manafort and his allies allegedly hid the true cost because it would “undermine the report’s being perceived as an independent assessment” and thus useful as a lobbying tool, according to court papers.
Attorneys for Craig say that although he wrote the report, he played no role in the lobbying campaign. They acknowledge that he consulted with Manafort, but say Manafort did not direct Craig’s work.
They said they do not believe Craig needed to register as a foreign lobbyist because he did not lobby government officials or engage in public relations activity.
“Mr. Craig never disseminated Skadden’s report on the Tymoshenko trial to U.S. government officials, and he did not discuss Skadden’s findings with officials in the Executive Branch or the Congress or their staffs,” his attorneys, William Taylor and William Murphy, said in a statement. “Moreover, Mr. Craig’s few media contacts about the report were not part of an effort to promote the report on behalf of a foreign government. As a result, he was not required to register.”
Craig left Skadden in April.
Another former Skadden lawyer, Alex Van der Zwaan, pleaded guilty in February to lying about work he did on behalf of the Ukrainian regime.
Alice Crites and Rosalind S. Helderman contributed to this report.
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