By Kevin Bogardus - 03/16/14 12:00 PM EDT
Lobbyists in Washington who work for Russian President Vladimir Putin are sticking with him despite the conflict in Ukraine.
“Our work continues to focus on supporting economic development and investment in the country and facilitating the relationship between representatives of the Russian Federation and the Western media. We are not advising the Russian Federation on foreign policy, including the current situation in Ukraine,” said a Ketchum spokeswoman.
Ketchum has worked for the Russian government since 2006, when it helped the country prepare for the Group of Eight Summit in St. Petersburg. The firm held with research and media rollout for Putin's 2007 "Person of the Year" award by Time Magazine and contacted The New York Times last year about an op-ed written by the Russian president, according to Justice Department records.
Putin’s government has also paid out handsomely to Alston & Bird, a law and lobby firm under subcontract with Ketchum to represent Russia. That firm has earned almost $1.4 million since coming on board with Ketchum in 2009, according to Justice records.
An Alston & Bird official directed questions about representing Russia to Ketchum.
Work for foreign governments is among the most lucrative niches on K Street, but it often comes with controversy.
James Thurber, an American University political science professor who has studied the influence industry extensively, said lobby firms weigh two factors when taking on and then standing by a foreign client: income and image.
“My inclination is they would never say it's about the bottom line but it's about the bottom line. It's about profit,” Thurber said.
“They have determined that the income from a controversial client is more important than the poor optics of representing said client. … People have said that dictators deserve representation but I have a different view on that. People have to make a decision about what is morally and ethically correct.”
Ketchum also represents Gazprom, the Russian state-owned oil and gas company, according to Justice records. Venable, another law and lobby firm, is under subcontract with Ketchum to represent the energy company.
The scrutiny facing Ketchum is familiar to veterans on K Street who have had to weigh the risks of taking on controversial foreign clients.
“There are some governments we have decided not to pitch,” said one K Street executive. “There is a reputational risk. If their actions are so bad, they reflect badly on our company, and we don't want to do anything that would hurt our long-term or short-term image.”
One marker firms use to vet foreign clients is to gauge their relations with the United States.
“If the State Department deals with the nation in a straight-up way and doesn't consider them rogue, then we would consider having them as a client,” said the executive.
When a client attracts too much attention, firms will often part ways to end negative press.
Former Rep. Toby Moffett (D-Conn.), chairman of the Moffett Group, said he wrestled with whether to continue lobbying for Egypt after the Arab Spring.
Moffett told The Hill that as protests took hold in Cairo, he remembers joining in on a three-hour teleconference with his partners in the PLM Group — which also included Podesta Group and the Livingston Group — and other representatives for Egypt while on vacation in Miami Beach, Fla.
“We were debating whether to quit. That was about 10 days prior that the roof blew off in Tahrir Square and [Egyptian President Hosni] Mubarak left,” Moffett said about the February 2011 call. “We finally concluded that we would stay because the military wouldn't fire on its own people. That there was a chance of success with this experiment.”
Nevertheless, the pressure grew too much and a year later, the lobbyists parted ways with the Egyptian government.
Egyptian authorities were not letting Sam LaHood — director of the International Republican Institute in Egypt and son of then-Transportation Secretary Ray LaHood — and other Americans leave the country, alleging they were working to sow unrest.
The Americans were eventually allowed to exit Egypt, but not before Moffett received an angry phone call from the elder LaHood, a former Republican congressman from Illinois.
“Ray and I have known each other for a long time. … Ray was screaming at me over the phone ‘How can you represent these generals? My son Sam is being held by the authorities there!’” Moffett said. “I then got my partners on the phone and said that was it, we got to go.”
Jill Zuckman, a spokeswoman for LaHood, confirmed that the former Transportation Secretary called Moffett.
In January 2012, the PLM Group ended its relationship with Egypt.
That move left a huge chunk of change up for grabs. Consequently, the Glover Park Group signed a mammoth $250,000 per month contract with Egypt in October last year.
It’s a common turn of events on K Street: one firm voids a contract with a foreign client in a cloud of controversy, leaving money on the table that is then swept up by a competitor.
Last summer, Ecuador found itself deep in controversy as a possible safe haven for NSA leaker Edward Snowden. Outraged by threats from U.S. lawmakers, the country would soon renounce trade benefits with the U.S.
Washington lobby firm Patton Boggs ended its contract with Ecuador soon after. About a month later, rival Van Scoyoc Associates signed a six-month, $300,000 contract with the nation.
Other firms have cut ties with a foreign nation shortly after signing a contract.
In October 2007, Cassidy & Associates signed a yearlong, $1.2 million agreement with the Pakistani embassy. Yet a month later, then-Pakistani President Pervez Musharraf declared emergency rule to crack down on protesters, leading the firm to withdraw from the agreement. Cassidy would later sign another yearlong contract in 2009 with the country, which has since ended, according to Justice records.
Some lobbyists have stayed with Pakistan through thick and thin. In May 2011, Mark Siegel of Locke Lord Strategies said he “would never walk away from” Pakistan and helped deal with the Washington fallout from terrorist mastermind Osama bin Laden being found and killed in the country.
Nevertheless, a change in Pakistan’s government after elections last year meant Siegel was out of the job.
Losing foreign clients can hit lobbyists in the wallet. Moffett said his firm took a financial hit from dropping Egypt.
“It was a big hit on my bottom line, I can tell you that,” Moffett said. “We came in as a group and went out as a group but there never a single sentence uttered about the money. But did I feel the hit? Yeah.”
Moffett has also represented foreign clients from Kenya, Morocco, Somalia and Malawi but said he doesn’t have methodology in place to weigh whether a controversial client is worth his shop’s trouble.
“I don't have a specific formula of how it works, whether you stay or go. You have to assess,” he said.