Just over a year ago, a spokesperson for lobbying powerhouse Mercury LLC was emphatic: His firm never worked for the Ukrainian strongman Viktor Yanukovych, who played a major role in making Paul Manafort notorious.
That was in response to a query after reports that Special Counsel Robert Mueller’s team had subpoenaed Mercury as part of its investigation into Russian meddling in the 2016 campaign.
Mercury LLC partner Mike McKeon replied, saying he would be fielding media queries about federal filings showing the firm had introduced Viktor Klyuyev, a parliamentarian in Yanukovych’s party and the brother of his former chief of staff, to Congressional offices. He added: “But please note that we never worked or did PR for Yanukovich.”
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Court filings released Friday indicate Special Counsel Robert Mueller would not believe that statement. Communications between lobbyists revealed in those filings indicate employees at Mercury LLC understood they were working on behalf of Yanukovych, who had jailed his political opponent and drawn condemnation throughout the Western world. And those lobbyists appear to have known they weren’t complying with federal disclosure law.
The revelation means lobbyists at the firm could face legal jeopardy, according to former federal prosecutors.
And Sol Wisenberg, who was Ken Starr’s deputy during the Monica Lewinsky investigation, told The Daily Beast that Mercury could be in trouble.
“If you know that in fact you’re working for Manafort and President Yanukovych and that that’s the reality and that anything else is a sham, the argument would be, 'Sorry, I don’t care if an attorney told you that.' An attorney can’t tell you to go rob money from a bank. If you get a letter from an attorney saying, ‘I believe it’s OK to rob banks now,’ that would be a joke.”
The story goes back to 2012, when powerhouse Washington lobbying firms Mercury LLC and the Podesta Group signed on to work for a little-known NGO called the European Centre for Modern Ukraine. According to court filings, Manafort set up the Centre as a secret cover for then-Ukrainian president Viktor Yanukovych and his Party of Regions. Because the Centre didn’t appear to be backed by a foreign government, the lobbying firms didn’t reveal their work to the Justice Department as required by the Foreign Agents Registration Act (FARA).
But years later, because of the Mueller investigation, a more complex story emerged: The two firms, according to the Special Counsel, had actually been working at the behest of the Russia-friendly Yanukovych.
The revelation came in the Oct. 30, 2017 indictment of Paul Manafort, which described his work with two companies, “Company A and Company B.” Company A referred to Mercury LLC, per NBC News, and Company B was Podesta Group. The news had a tectonic impact on the Podesta Group; within hours of Manafort’s indictment, its principal, Tony Podesta, stepped down from the firm. And within months, the firm had gone under.
For Mercury LLC, however, it was a different story. The firm’s revenue actually jumped from 2016 to 2017—from $5.4 million to $7.3 million, by Politico’s analysis. And lobbying disclosures show it boasts powerful corporate clients, including T-Mobile and Verizon.
But despite its financial good fortune, Mueller’s latest court filing indicates Mercury LLC lobbyists could face legal jeopardy.
“Various employees of Companies A and B understood that they were receiving direction from MANAFORT and President Yanukovych, not the Centre, which was not even operational when Companies A and B began lobbying for Ukraine,” the filing reads.
“As a Company A employee noted to another company employee: the lobbying for the Centre was ‘in name only. [Y]ou’ve gotta see through the nonsense of that[.]’ ‘It’s like Alice in Wonderland,’” it continues.
This strongly suggests that employees at Mercury LLC knew they were breaking federal lobbying laws by secretly working for a foreign government.
McKeon told The Daily Beast last August that his firm’s attorneys advised them to disclose their lobbying under the bare-bones requirements of the Lobbying Disclosure Act—the comparatively simple disclosures lobbyists fill in when they are working for American corporations or non-governmental foreign entities. The law firm specifically told them they didn’t need to reveal their work under the more demanding requirements of FARA, citing written assurances Mercury received from the Centre claiming it wasn’t backed by a foreign government or political party.
McKeon also said the law firm giving them that advice was Skadden—the same firm that wrote a report for Yanukovych whitewashing his incarceration of his top political opponent.
The fact that Skadden advised Mercury against registering under FARA won’t necessarily shield the lobbying firm from legal troubles, according to former federal prosecutor Elie Honig.
“It doesn’t make it fine if just some lawyer tells you it’s fine,” he said. “If you know that you’re lobbying in the U.S. for a foreign government entity and you know that the company you’re working for is not registered, then absolutely—you’d be liable for a FARA violation.”
Wisenberg concurred.
“I don’t know what the facts are of the case,” Wisenberg said, “but I would say there’s absolutely exposure for that company and for anybody at the company who knew.”
The Daily Beast emailed McKeon about Mueller’s filings. He emailed this:
“For more than a year now, we have fully cooperated with the OSC [Office of the Special Counsel]. For example, we waived attorney-client privilege so the government could see the full exchange we had with our expert FARA lawyers over the two years of this project to provide full transparency into the decision-making process. In April 2012, as the project which we were engaged to work on was just getting started, we prepared a FARA registration and wrote the check for the registration fee. However, we were advised by our FARA lawyers to file an LDA instead, and we filed LDAs nine times. We will continue to fully cooperate with the government if requested.”
The Daily Beast then asked McKeon if he stood by his statement from last August that the firm never worked for Yanukovych. As of press time, he hasn’t replied.
