One of Washington's most powerful lobbying shops now appears to be an unexpected casualty of the special counsel investigation.
The Podesta Group, a longtime K Street fixture run for decades by Tony Podesta, will reportedly shut down by year's end as the firm's involvement in a lobbying campaign on behalf of pro-Russia forces in the Ukrainian government has fallen under scrutiny from both the press and Robert Mueller.
Since August of 2016, when the Associated Press reported the Podesta Group and Mercury Public Affairs worked with indicted Trump campaign operatives Paul Manafort and Rick Gates to represent the European Centre for a Modern Ukraine in recent years, the firm carefully sought to clean up the mess, filing retroactive disclosures with the Justice Department to comply with relevant laws. But last month it was announced that Mueller has expanded his probe of Russian collusion in the 2016 election to include Podesta and his firm's work with Manafort, and Gates and his indictment made veiled reference to the Podesta Group and Mercury.
The Podesta Group had previously reported its work to Congress under the Lobbying Disclosure Act, but filed Foreign Agents Registration Act documents with the Justice Department only after media reports shone a light on the ECMU's connections with the Ukrainian government. FARA disclosures acknowledge and make public the fact that lobbying work principally benefited a foreign government, since the law is intended to create transparency about which foreign governments are seeking to manipulate public opinion and policy — and who's representing them. Though they can result in prison time, FARA violations are rarely prosecuted, which is why Mueller's interest in Podesta and his firm reportedly has K Street rattled.
When it comes to the Podesta Group, much evidence presented both through media sources and the indictment of Manafort and Gates -- which incidentally was made public shortly before Tony Podesta announced he was stepping down -- appears to suggest the firm was aware the ECMU was controlled by government actors in Ukraine. If that is the case, its decision to file with Congress rather than the DOJ, which requires more transparency, would look a lot like a deliberate attempt to conceal the firm's activities.
On top of all this, the firm's belated disclosures show it lobbied the State Department under the tenure of Hillary Clinton, for whom Tony Podesta later bundled hundreds of thousands of dollars throughout the 2016 election cycle.
To say the least, it doesn't look good for Podesta. For its part, the firm maintains the ECMU misrepresented itself in soliciting their services. Some of the group's lobbyists are planning to join former CEO Kimberly Fritts at a new firm, according to reports.
Between the fallout from the Ukraine work and its lack of connections in the Trump administration, the once-towering firm has been losing clients in recent months.
Though Podesta's art collection is reportedly coming off the walls of his eponymous firm, one source told CNN on Saturday they "think he believes he hasn't done anything wrong." But the real power to make that judgment now lies with Robert Mueller.