Russian investment fund hires K Street help

A multibillion-dollar fund in Russia has hired lobbyists to ensure its U.S. investors are protected, according to new documents filed with the Justice Department.

The Russian Direct Investment Fund (RDIF), created in 2011 to funnel “co-investments” into the nation’s economy, inked the contract with Capitol Counsel at a time when major businesses in Russia are being punished for President Vladimir Putin’s actions in Ukraine.

The firm will be working for the fund to “educate and explain to US Department of Treasury and US policy-makers RDIF's role and relationship with United States partners and Investors,” according to forms filed with the Justice Department under the Foreign Agents Registration Act.

The Treasury Department is in charge of enforcing sanctions against foreign individuals and businesses, and has taken the lead this year in implementing several rounds against Russia.

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RDIF has been involved with a number of prominent American billionaires, including Stephen Schwarzman of the Blackstone Group, Leon Black of Apollo Global Management and David Bonderman of TPG Capital. All of them have served on the fund's international advisory board.

According to its website, the $10 billion fund has raised $6 billion in co-investment from international partners and “attracted over $15 billion of foreign capital into the Russian economy through long-term strategic partnerships.”

Partners have included BlackRock, One Equity Partners, Goldman Sachs and Deutsche Bank, according to the Financial Times.

Capitol Counsel will also “provide accurate information to the US Department of Treasury regarding recent transactions made by RDIF,” it says.

Although the fund is not covered under U.S. sanctions, it is the subsidiary of a state-run bank that has been targeted.

A spokesman for the Treasury’s Office of Foreign Assets Control, which implements sanctions defined by the Obama administration, declined to comment about whether RDIF is under scrutiny.

“As a rule we do not comment on possible or pending investigations,” the official said.

The contract with Capitol Counsel is worth a minimum of $90,000, or $45,000 per month. After the first two months, the contract will be negotiated and decisions about whether to continue will be determined.

A Financial Times report describes the sovereign fund as an apolitical body of bankers and investors who have been dragged into a geopolitical conflict.

“In our complex world, people do not like nuances, it’s very dangerous to paint everything in Russia in black,” the RDIF’s CEO, Kirill Dmitriev, told the publication last week. “There are forces in Russia that are good for the world economy. We are one of them.”

“We’re not a humongous player and we have no political agenda. We’re not violating sanctions. Co-investing with us is not prohibited,” he added.