How 2 Russian billionaires sought to bolster their reputations in the U.S.

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Mar 17, 2022 View in browser   By Caitlin Oprysko With Daniel Lippman   HOW RUSSIAN HEDGE FUND, BANK EXECS BOLSTERED THEIR REPUTATION IN THE U.S.: New court documents are shedding light on how the founders of Russia's Alfa Bank and the Luxembourg-based hedge fund LetterOne , who recently found themselves on the receiving end of European sanctions, sought to improve their images in the U.S. with the help of services from BGR Group. — The details were disclosed in depositions that Petr Aven and Mikhail Fridman sat for in 2020 as part of a defamation lawsuitagainst Bean, also known as Fusion GPS, the research firm that commissioned the so-called Steele dossier, and its founder Glenn Simpson . Transcripts of the deposition were made public earlier this week when Fusion and Simpson filed a motion to dismiss the suit, arguing in part that the "plaintiffs allege that statements about their notorious decades-long relationship with Putin and the Kremlin are defamatory. However, the EU and UK recently sanctioned plaintiffs because of that relationship." — During the depositions, Aven and Fridman detailed their relationship with BGR, which Aven said dates back to the late 1990s. BGR's lobbying contract with Alfa Bank, which disclosures show began in 2002, ended in 2020. The firm is still registered to represent LetterOne, from whose board Fridman and Aven resigned earlier this month after being hit with EU sanctions. They have yet to personally face sanctions in the U.S., but were identified on a 2018 U.S. Treasury list of Russian billionaires close to Putin. — Fridman maintained that the bank and the hedge fund did not hire BGR to combat what they say are incorrect perceptions of their founders as corrupt oligarchs — which Fridman conceded some U.S. officials "definitely" hold. But he did not deny that his individual reputation and that of his businesses were intertwined, and that meetings with U.S. officials that Fridman said BGR helped set up were opportunities to bolster both reputations. — Fridman, who was born in Lviv, Ukraine, and has come out in opposition to Russia's invasion of Ukraine, said in 2020 that he hoped the meetings "help[ed] them to have a more objective view regarding Alfa or LetterOne and me, personally," as it pertained to accusations of corruption and ties to Putin, in addition to providing more insight into "what we are doing in the business." He said he, Aven and fellow plaintiff German Khan tried to visit Washington for those kinds of meetings annually, and over the years had met with American government officials like former Treasury Secretary Hank Paulson, Larry Summers, David Lipton, Groslyn Burton and Victoria Nuland. — Fridman said that "the initial goal of hiring BGR" was to help develop a program called the Alfa Fellowship, which allows American professionals to spend a year living and working in Russia. "But also, of course, one of the reason[s] was just to — to improve our image and profile and to make aware regarding our business philosophy, you know, principles, beliefs, and so on." BGR's Ed Rogers and McLarty Associates' Richard Burt , then with BGR, were several of the firm's principals who Fridman said played a "very active role" in helping stand up the fellowship in the early 2000s. — Fridman also answered in the affirmative when asked whether he "made efforts to improve your image in the Western press to help improve your investment opportunities in the West." — "We tried to do our best to explain our business philosophy and who we are," Fridman said. Speaking about the intersection of his personal and business reputations, Fridman noted that "I'm actually one of the individuals" in both Alfa Group and LetterOne. Thus, he added, though a spokesperson for LetterOne might not explicitly be "protecting my personal image," any "damage for my personal image could definitely impact [the] image of LetterOne." — In an interview with Bloomberg published today, Fridman appeared surprised that his ties to the West weren't enough to spare him from European sanctions. "We sincerely believed we are such good friends of the Western world that we couldn't be punished," he said. — In his deposition, Aven said that BGR's "main function" was to organize meetings and make introductions on behalf of the businesspeople, and also provide general consulting services. He explained that "while we lived in the Soviet Union, we didn't know the first thing about how things worked in the U.S." — Aven's deposition also dug into his relationship with Putin, whom Aven said he met with one-on-one three to four times a year prior to the pandemic. Aven was one of several business leaders summoned by Putin to a meeting immediately following Russia's invasion of Ukraine last month, and his attendance was cited in the EU's sanctions. — According to Aven, Putin had previously offered advice on potential U.S. sanctions, suggesting that Alfa Bank, along with other Russian businesses, could face punishment as retaliation for the Kremlin's meddling in the 2016 election. But Aven stressed that Putin's suggestions were by no means specific to Alfa Bank, adding that Putin generally advised Aven to conduct outreach with the incoming Trump administration to get out in front of potential sanctions. While Aven denied that Putin suggested lobbying against sanctions (BGR did not report any lobbying activity on Alfa Bank's behalf after 2015), Aven said he regularly mentioned the need for "fair" sanctions in meetings with U.S. officials. Good afternoon and welcome to PI. Send tips: coprysko@politico.com. And be sure to follow me on Twitter: @caitlinoprysko.   WIN A VIP TICKET TO THE GREATEST POLITICAL SHOW ON EARTH! POLITICO and SHOWTIME are teaming up for an evening of cocktails and conversation featuring the POLITICO Playbook team and Mark McKinnon and Jennifer Palmieri from "The Circus" on Showtime in Washington, D.C. Enter for a chance to win a ticket to join fellow Playbookers and newsmakers at this exclusive, VIP event by Friday, March 18th. Winners will be notified on that date (travel and accommodations not provided, this is a widely attended event pursuant to House & Senate ethics rules). ENTER HERE.     BUSINESS GROUPS MOVE TO SAVE TAX BREAKS IN GLOBAL TAX PACT: "Business groups are dialing up the pressure on the Biden administration to ensure that a new global tax deal doesn't undercut their member companies' cherished tax breaks," POLITICO's Aaron Lorenzo reports. — "'We strongly urge the Treasury Department to negotiate modifications to the OECD Model Rules that will preserve the full value of these important, bipartisan and long-standing tax incentives,' a group of trade associations representing major U.S. companies plans to urge Treasury Secretary Janet Yellen, according to a draft letter obtained by POLITICO." — "Businesses fear the fine print, released several months after the deal was initially announced , could jeopardize tax credits meant to promote research and development, low-income housing and investments in economically disadvantaged areas. At the same time, the proposal appears to avoid dinging some similar tax incentives in other countries, due to the way they are administered." — "The problem came to light when the Organization for Economic Cooperation and Development, which facilitated the negotiations, released model rules in late December for implementing the minimum tax the agreement would establish. Embedded in the rules is a provision to ensure all companies pay at least 15 percent in taxes, sometimes referred to as a top-up tax but more formally called the undertaxed payment rule or UTPR. As currently written, other countries could tax U.S. companies if credits reduce their effective tax rates in their home countries to below the global minimum. That would devalue long-standing tax breaks in the U.S., business groups say." HUNTER BIDEN LATEST: The New York Times' Katie Benner, Ken Vogel and Michael Schmidt have an update on federal probes into Hunter Biden , which began as a tax inquiry but has grown to include questions about whether the president's son violated foreign lobbying laws. "But prosecutors face a number of hurdles to bringing criminal charges, the people familiar with the investigation said, including proving that Mr. Biden intentionally violated the Foreign Agents Registration Act," they write. — It is also not clear "whether the criminal probe is focused solely on Hunter Biden, or if he is among a group of individuals and companies being scrutinized. Prosecutors have also asked about potential FARA violations by a Washington consulting firm, Blue Star Strategies, that worked for the Ukrainian energy company in an arrangement that Mr. Biden helped broker, according to documents and the people familiar with the investigation." — The Times reports that "there has been debate within the Justice Department over whether the available evidence proves that Mr. Biden intended to violate FARA, which the government must prove in order to secure a criminal conviction. The prosecutors have discussed approaching potential FARA violations as a civil matter, which would require Mr. Biden to register retroactively as a foreign agent, but would avoid criminal charges, according to the people familiar with the case. Such a resolution could complicate a potential money laundering case, since money laundering is typically charged in connection with another crime." ANNALS OF CRYPTO CASH: "Cryptocurrency leaders are spending money to wield influence in Washington as focus on their industry skyrockets, but they don't seem to be using their own product to do it," Bloomberg's Bill Allison reports. "Industry insiders gave $7.3 million to political campaigns and committees in 2021 through the end of January, but almost all of that money came in old-fashioned dollars." — "The disparity highlights the challenges cryptocurrencies face as they move into more mainstream parts of the economy. Only $580,000 worth of cryptocurrency was donated to political committees in the current election cycle, according to a Bloomberg analysis of Federal Election Commission records, with a handful of super PAC donations making up most of the total. Not all of those contributions were from crypto industry donors." — "One reason crypto isn't being widely used to donate to campaigns is the way the FEC regulates it. While crypto donations have been allowed since 2014, the reporting is complex and campaigns and committees have to convert the assets to dollars before spending the money, incurring a processing fee." What's more, "FEC rules also require far more record keeping and disclosure for contributions in cryptocurrencies. And the online platforms serving Democrats and Republicans, ActBlue and WinRed, don't even accept them." Jobs Report — SKDKnickerbocker has announced a slate of promotions: Cameron French will be D.C. public affairs chief of staff, and will continue to serve as a senior vice president in public affairs. The firm also promoted Michael Czin , who just returned from a stint in the White House counsel's office, and Kendra Barkoff Lamy to managing directors in the D.C. office. Liz Kenigsberg has been promoted to executive vice president in the D.C. office. — SK Group has promoted Allen Jamerson, an Eric Cantor and House Judiciary Committee alum, to director of federal government affairs, and Keida Ackerman, a Commerce alum, to director of state and local government affairs. — Kelsey Glover has been promoted to be director at APCO Worldwide , where she will focus on global resource management and expanding the global media relations connectivity of the firm, as well as support corporate and philanthropic clients in the gender equity and tech spaces. She most recently was senior associate director at the firm. — Annie Palisi is the new head of federal affairs at GoPuff. She previously was co-chair of the appropriations, defense, and homeland security practice at Invariant. — Jamie Smith is launching Smith and Partners, a strategic management and comms consulting firm named after her late father's small business. She will remain affiliated with WestExec Advisors. — Miguel Román is now senior director and chief scientist for climate and environment at Leidos. He previously was a leading researcher in satellite remote sensing at NASA. — Denise Fleming is now senior director of legislative affairs at WorkMoney. She previously was legislative director for Rep. Cindy Axne (D-Iowa). — Hailey Ray is now U.S. PAC and advocacy manager at GSK Consumer Healthcare. She previously was director of political affairs at the Auto Care Association . — Bill Dumais is now a legislative outreach manager at the American Legislative Exchange Council. He previously was senior manager of government relations at the Council for Responsible Nutrition. — Molly Meegan is now chief legal officer and general counsel at the American College of Obstetricians and Gynecologists. She previously was deputy general counsel at Human Rights Campaign. New Joint Fundraisers None. New PACs COW PAC (Hybrid PAC) WASHINGTON DESERVES BETTER PAC (Super PAC) New Lobbying Registrations Actum I, LLC: American Ethiopian Public Affairs Committee Actum I, LLC: Hill International, Inc. Akin Gump Strauss Hauer & Feld: Reliable Robotics Arrington Brown LLC: Potomac International Partners, Inc. On Behalf Of Virginia Union University Blue Ridge Law & Policy, P.C.: Akoya LLC Carmen Group Incorporated: Wework Forbes-Tate: Calumet Specialty Products Partners, L.P. Hobart Hallaway & Quayle Ventures, LLC: Inkit Inc. Innovative Advocacy: Tst, Inc. Invariant LLC: Payward Inc D/B/A Kraken Krl International LLC: Mpharma Data Inc Mark A. Mccormick: Polaris Inc. Mcdermott+Consulting LLC: Advanced Care At Home (Ach) Coalition Michael Best Strategies LLC: Savingusa Milos Ivkovic: Antoaneta Vassileva Pardes Biosciences, Inc.: Pardes Biosciences, Inc. Ricchetti Incorporated: Pardes Biosciences, Inc. Squire Patton Boggs: Nasscom (National Association Of Software And Service Companies) Stumptown Strategies: Opportunity Financial, LLC The Lucas Firm, LLC (F/K/A Travis Lucas): Freeman Health System Versant Strategies LLC (Formerly Known As Wolff Strategies, LLC.): Ryeco, Inc. New Lobbying Terminations Association Of Equipment Manufacturers: Association Of Equipment Manufacturers Cga Strategies LLC: Resource Management Service LLC Etherton And Associates, Inc.: Corvias Military Living (Formally Known As Corvias Campus Living) Mr. Daniel Weiss: The Cormac Group Obo The Bell Legal Group Oregon Farm Bureau Federation: Oregon Farm Bureau Federation Roy Lewis Eiguren, Pllc Formerly Known As Eiguren Ellis Public Policy: Amalgamated Sugar Corporation Roy Lewis Eiguren, Pllc Formerly Known As Eiguren Ellis Public Policy: Fluor Corporation Strategic Marketing Innovations: Evraz North America Strategies 360: Rosenthal And Associates (On Behalf Of Delaware North Companies, Inc.)   DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE.       Follow us

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