Less than one week after news reports indicated he was under a federal criminal investigation, Washington super-lobbyist and Democratic bundler Tony Podesta stepped down from his powerful eponymous firm, a longtime fixture in the K Street community.
In fact, news of Podesta’s resignation came only hours after special counsel Robert Mueller made public his indictment of Paul Manafort and Rick Gates, a document that implicates the Podesta Group in an alleged campaign orchestrated by Manafort to solicit lobbyists for work on behalf of foreign principals in the Ukraine without properly disclosing their efforts to the Justice Department.
If the information in the indictment is true, it looks like the Podesta Group knowingly violated the Foreign Agents Registration Act by lobbying on behalf of the European Centre for a Modern Ukraine without filing the requisite disclosures. The goal, it would seem, was to collect a hefty paycheck by lobbying Washington policymakers to take a softer stance towards the Ukraine’s pro-Russia Party of Regions, all while operating under the radar.
FARA violations are rarely prosecuted, but the indictment of Manafort and Gates includes two counts related to the law — and Podesta could be next.
That, apparently, has Beltway lobbyists spooked.
“The news of Tony Podesta’s resignation from his namesake firm and indictment of Paul Manafort and Rick Gates sent K Street scrambling, as lobbyists rushed to make sure they’re in compliance with the rules,” Politico reported on Wednesday.
The article quoted an anonymous “veteran foreign lobbyist” as saying, “I feel like in the past, people got away with a lot because there was a lot less scrutiny … People were more willing to find creative ways not to file.”
“I think at least in the short term people are going to be very cautious,” the source added.
Creative ways not to file? That sounds a lot like the scheme Manafort, Gates, Podesta, and Mercury Public Affairs are accused of plotting. In fact, the indictment charges Manafort and Gates with arranging for the Podesta Group and Mercury to work on behalf of the ECMU, rather than directly for political leaders in Ukraine, so as to “minimize public disclosure of their lobbying campaign.”
Sen. Chuck Grassley, R-Iowa, has already introduced legislation to strengthen enforcement of FARA. Hopefully, the days of “people [getting] away with a lot” on K Street are over. But draining the Swamp is never easy.
