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'Wakeup call for Americans': Russia, Ukraine in behind-the-scenes lobbying war over Nord Stream 2

Published on: 02/12/2022


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Russian and Ukrainian interests have spent millions of dollars on lobbyists over the past two years to try to influence U.S. policy on Nord Stream 2 , the completed but not-yet-operational pipeline that runs from Russia to Germany. Lobbyists representing Russian clients reported receiving more than $8.4 million since the start of 2020 to advocate for Nord Stream 2, according to an analysis by OpenSecrets , a nonprofit group that tracks data on campaign finance and lobbying. Start the day smarter. Get all the news you need in your inbox each morning. Lobbyists for the Ukrainian government and other interests in the eastern European country raked in more than $2 million from their clients last year to aggressively oppose Nord Stream 2 and serve as their surrogate on other issues, concluded a separate analysis by the Quincy Institute for Responsible Statecraft , a Washington-based think tank. The large sums of cash flowing to lobbyists alarm advocates of government transparency in part because firms representing Russian clients have disclosed few details about their activities. Lobbyists are required under government disclosure rules to report certain – but not all – activities. The lack of transparency “should be a wakeup call for Americans concerned with the extent to which entities associated with authoritarian regimes like Russia and China are working to influence decision making in Washington,” said Benjamin L. Schmitt, postdoctoral research fellow at Harvard University and senior fellow at the Center for European Policy Analysis. Ben Freeman, a research fellow at the Quincy Institute and an expert on foreign influence campaigns, compared the Russian lobbyists’ opacity to a “black box” that shuts out all light. “We know they’re doing it. We know this is happening,” he said. “We just can’t look inside this black box to know really what they’re doing.” NORD STREAM 2: How a gas pipeline became a bargaining chip in the crisis between Russia and Ukraine Two lobbying firms – Roberti Global and the BGR Group – have received the largest contracts from Russian interests looking to influence Nord Stream 2. Nord Stream 2 AG, the company that will operate the pipeline, has paid more than $5 million to Roberti Global, a lobbying firm run by Democratic donor and lobbyist Vincent Roberti, since the start of 2020, the OpenSecrets analysis shows. Roberti disclosed in public documents that his work for the Russians was related to “the U.S. position toward the Nord Stream 2 pipeline, including potential financial sanctions affecting the project.” During the same period, Nord Stream 2 paid about $1.6 million to BGR Group for lobbying by Walker Roberts, a former Republican staffer for foreign affairs congressional committees. In addition, five foreign companies that are partners on the pipeline — Austria’s OMV AG, the Netherlands’ Shell International, France’s ENGIE, and Germany’s Wintershall and Uniper SE — paid lobbyists at McLarty Inbound more than $1.6 million since the start of 2020, OpenSecrets reported. Ukrainian interests that oppose Nord Stream also have been lobbying aggressively behind the scenes. Of the $2 million that Ukrainian clients paid to lobbyists last year, $1.2 million went to Yorktown Solutions, a firm headed by Daniel Vajdich, who advises the Ukrainian state-run energy company Naftogaz, according to the Quincy Institute’s analysis. Vajdich is a former staffer for the Senate Foreign Relations Committee , where he focused on Europe, Eurasia and related issues. He also served as a national security adviser to three Republican presidential candidates: Sen. Ted Cruz of Texas, former Wisconsin Gov. Scott Walker and Sen. Mitt Romney of Utah. Nearly a million dollars that flowed to Vajdich’s firm came from the Ukraine Federation of Employers of the Oil and Gas Industry, which opposes Nord Stream 2 and whose companies stand to lose hundreds of millions of dollars in revenue if the pipeline becomes operational. PUTIN 'WON'T STOP' WITH UKRAINE: Why Americans should care about Russia's aggression against its neighbor Yorktown Solutions reported more than 12,114 “political activities” on behalf of its Ukrainian clients in 2021, including thousands of emails and hundreds of meetings with members of Congress and their staff, State Department officials, members of the media and think tank scholars with an interest in Russia-Ukraine developments. To put that in perspective, that's more than four times the number of political activities that the entire Saudi lobby reported in 2020, said Freeman, who authored the Quincy Institute’s analysis. Vajdich said in an interview that his work for the Ukrainians is driven by a belief that Nord Stream 2 is an issue with massive security and defense implications for Ukraine and that sanctions are the only way to stop it from moving forward. “I don’t come at this as a mercenary,” he said. “We very much work for the Ukrainians because we believe this is important.” Besides Vajdich’s company, Ukrainian oil and gas companies paid $120,000 last summer to the public relations firm KARV Communications and more than $300,000 to the law firm Arent Fox for advocacy work against Nord Stream 2, the Quincy Institute reported. KARV focused heavily on media outreach related to the pipeline and reported meeting with journalists at multiple news outlets. Arent Fox focused on reaching out to the State Department. While lobbyists have been working behind the scenes to influence U.S. policy on Nord Stream 2, the Biden administration has been publicly using the $11 billion pipeline to discourage Russian President Vladimir Putin from further invading Ukraine. Putin insists that Russia has no plans to invade its neighbor. But Russia has positioned more than 100,000 troops on Ukraine’s border and, just this week, dispatched war ships toward the Black Sea, raising concerns that plans for a large-scale assault are falling into place. The White House warned Friday that Russia could invade Ukraine before the end of the Beijing Winter Olympics next week and urged Americans still in Ukraine to leave in the next 24 to 48 hours. Though construction on Nord Stream 2 is finished, the pipeline is still awaiting final regulatory approval in Germany. President Joe Biden vows the pipeline will not become operational if Russia invades Ukraine. “If Russia invades – that means tanks or troops crossing the border of Ukraine again – then there will be no longer a Nord Stream 2,” Biden said Monday at a joint press conference with German Chancellor Olaf Scholz. UKRAINE TENSIONS: Biden, Democrats call for sanctions on Putin, other top Russian officials if Kremlin invades Ukraine Stopping the pipeline would require the cooperation of Germany. At Monday’s news conference, Scholz would not commit to pulling the plug on the project but stressed that the U.S. and Germany stand “absolutely united” to stop a Russian invasion. “We will act together,” he said. “We will not be taking different steps. And they will be very, very hard to Russia.” Nord Stream 2 is a priority for Putin, which the U.S. and its NATO allies believe gives them leverage in their diplomatic negotiations with Russia. The pipeline is owned by the Russian state-controlled company Gazprom and snakes westward from Russia to northeastern Germany for more than 700 miles under the Baltic Sea. Once it becomes operational, Russia can send natural gas to its customers in central and eastern Europe without using land routes that run through the Baltic states and Ukraine. UKRAINE-RUSSIA CRISIS: Biden holds virtual meeting with NATO allies, other leaders as diplomatic talks stall Right now, Russia pays Ukraine around $2 billion a year in transit fees to send the gas through its lines – money that Moscow would no longer have to shell out if Nord Stream 2 goes online. But analysts fear that Putin’s interests in Nord Stream 2 are motivated by political ambition even more than his desire sell gas to Europe. By controlling the flow of gas, Putin has the ability to exert political influence over European countries. Put simply: To get Europe to cede to his political demands, he could threaten to turn off the spigot. Ukrainians fear their security also could be undermined by Nord Stream 2. Putin considers Ukraine a part of Russia and, in 2014, invaded and annexed Crimea. As long as Putin needs Ukraine’s transit system to deliver gas to Europe, he is less likely to act aggressively toward Ukraine. Nord Stream 2 would remove that incentive to keep his aggressive behavior toward in check. The day before the Senate defeated a bill in January to slap sanctions on the company behind Nord Stream 2 , Vajdich’s firm sent a four-page fact sheet to the offices of all Senate Democrats and several Republicans. Vajdich’s document was a rebuttal of the talking points that the Biden administration had distributed in opposition to the sanctions bill sponsored by Cruz. Vajdich laid out nine reasons why the Senate should impose sanctions on Nord Stream 2, arguing among other things that sanctions could deter further Russian aggression against Ukraine. “We hope you'll seriously consider Ukraine's perspective on the upcoming Nord Stream 2 sanctions vote,” Vajdich wrote, quoting Deputy Secretary of State Wendy Sherman’s line that there should be “no decisions about Ukraine without Ukraine.” The document was one of many that Vajdich’s company disclosed to the Justice Department under the Foreign Agents Registration Act. Congress passed the law in 1938 to identify Nazi propaganda and other foreign efforts to influence U.S. policy. Under FARA, lobbyists must disclose every meeting with U.S. officials, along with the materials they distribute. BETTER TRAINED, BETTER EQUIPPED: What you should know about Russia and Ukraine's militaries In a separate filing, Vajdich’s firm disclosed that it arranged a meeting with Cruz and two of his staffers last July 20 to discuss Nord Stream 2. Vajdich said he was not at the meeting and referred questions about it to Cruz’s office, which did not respond to a request for comment. Lobbyists representing Nord Stream 2 have disclosed few details about their work. The pipeline's proponents have registered their work under a separate law, the Lobbying Disclosure Act, keeping details of which government officials the lobbyists met with hidden from the public. The 1995 law allows lobbyists for foreign companies or individuals to report less information as long as they are working to further “bona fide trade or commerce” and are not acting on behalf of a foreign government or foreign political party. BIDEN'S OPTIONS IN UKRAINE: They depend on Putin's next move. Russia claims that Nord Stream 2 is a commercial project, but analysts take issue with that description because the pipeline is owned by Gazprom, which is owned by the Russian government. The lobbyists’ decision to register under the Lobbying Disclosure Act instead of FARA means the public knows little about what they are doing for Russian interests at a pivotal moment in U.S.-Russia relations, the Quincy Institute’s Freeman said. “We don’t really know what they’re up to, who they’re contacting, how much they’re contacting them,” he said. Steven Goldberg, a spokesman for Roberti Global, declined to provide details about the group’s work on Nord Stream 2 but defended the decision to register under the Lobbying Disclosure Act. The company sought outside legal advice to evaluate the reporting requirements and is confident that it is in compliance with those rules, he said. Roberts of the BGR Group did not respond to a request for comment. Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS. This article originally appeared on USA TODAY: 'Wakeup call for Americans': Russia, Ukraine in behind-the-scenes lobbying war over Nord Stream 2

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