K Street’s gravy train runs dry as Georgian leaders move past election

One of the largest foreign lobbying forces ever seen in Washington has been disassembled.

K Street firms and public relations shops were paid roughly $4.8 million last year to wage a proxy war between Georgian President Mikheil Saakashvili and billionaire Bidzina Ivanishvili, now prime minister. Lobbyists for the two men traded accusations of electoral malfeasance as they tried to draw attention to Georgia’s October 2012 parliamentary elections back here in the Untied States.

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Now that Ivanishvili’s party has won majority control of the parliament, the gravy train has nearly run dry. 

At least nine different lobby shops and public relations firms have parted ways with Georgian government agencies and political parties since the elections, according to Justice Department records and interviews with The Hill.

After the elections, Georgia’s parliament reduced the budget for the country’s National Security Council and other government agencies controlled by Saakashvili. Those cuts left little funds for influence efforts in Washington on his behalf, according to some lobbyists who were let go.

Randy Scheunemann, a foreign policy adviser to Sen. John McCain’s (R-Ariz.) 2008 presidential campaign and president of Orion Strategies, said his firm’s contract with Saakashvili’s government expired in December. He had harsh words for Ivanishvili, alleging he was “vindictive” after his election victory and “slashed” several presidential offices.

A Georgian government official said it was “an abnormality” that the security council was paying for lobbying.

“The Georgian people believe that their money could have been better spent, and now demand transparency and a minimum in public relations spending,” the official said.

Other firms also attributed the end of their contracts to the change of power in Georgia.

“When our contract expired in December, it was not renewed. We believe it very likely that the change in the control of the government caused this,” said Charlie Black, chairman of Prime Policy Group.

Georgia has tried to shore up its image since the elections. Government officials from the tiny European nation have been traveling to Washington this month to meet with lawmakers and reporters.

“We are under this narrative that has been created by Saakashvili for all these years,” said Tinatin Khidasheli, a member of the Georgian Parliament. “All the views should be heard, and everybody should be able to give their arguments.”

At least one major firm is still drawing business from the country.

Patton Boggs has signed a new $540,000 six-month contract with the Georgian government. The K Street powerhouse had represented Ivanishvili, now Georgia’s prime minister, during the campaign.

Saakashvili has also renewed contracts with Washington representatives.

Consultant Gregory Maniatis has been signed to a new $200,000, 10-month contract to represent Saakashvili’s administration, according to Justice records. Another firm, Fianna Strategies, will be his subcontractor on the account.

Saakashvili is term-limited, and is expected to leave office after presidential elections this coming October.

While some firms have signed new contracts with Georgia, far more have been left out in the cold.

“Funding for efforts in Washington cannot continue at the levels [Ivanishvili] was able to personally commit during the campaign to better inform Washington who he and his coalition, the Georgian Dream, were,” said Paul Joyal, a managing director for National Strategies. “All funding today must come from the government budget. It is because of this that the decision was made to limit the number of companies in Washington to one firm.”
National Strategies was part of a massive effort to help shape Washington opinion around the Georgian elections. The campaign included managing Ivanishvili’s Twitter account, creating a website, sponsoring a documentary, drafting op-eds and checking in on which congressional aides might serve as election observers.

Ivanishvili paid National Strategies more than $1.9 million for the work, according to Senate lobbying records.

Employees at other firms that were contracted by National Strategies on behalf of Ivanishvili — including Downey McGrath Group and Parry, Romani, DeConcini & Symms — also said that their contracts have ended.

Podesta Group and Gephardt Group Government Affairs, which were representing Saakashvili’s government last year, are also no longer working for Georgia.

The fight over Georgian elections was at times a surreal spectacle as lobbyists sought to win the messaging war for a presidential election more than 5,000 miles away.

Some lobbyists even visited Georgia’s capital as part of the campaign, according to Justice records.

“Friends, greetings from Tbilisi!” wrote Matthew Oresman, an associate at Patton Boggs, in a Sept. 21, 2012, email update saying Ivanishvili has “been urging people not to protest and go to the street, but to save their anger for the ballot box.”

In a Prime Policy Group memo filed with the Justice Department, the firm said one poll was “part of an ongoing and concerted effort by the opposition to undermine the perception of as well as the legitimacy of October’s parliamentary elections. Expect more activity like this from the opposition in the weeks ahead.”

The $4.8 million haul from the Georgian elections is substantial even for K Street standards, and is on par with annual lobbying fees taken in by the influence industry’s more prominent boutique shops.

The Hill calculated the sum from the latest Justice and Senate lobbying records. The total number could grow further as more firms file new records with Justice’s Foreign Agents Registration Unit.

Despite the lobbying campaign slowing down, Washington is still watching Georgia. Five senators — Sens. Jim Risch (R-Idaho), Lindsey Graham (R-S.C.), Jeanne Shaheen (D-N.H.), McCain and former Sen. Joe Lieberman (I-Conn.) — signed a December letter to Ivanishvili that warned him against using the courts to “settle political scores.”

Ivanishvili’s supporters are working to counter that narrative before the prime minister’s first U.S. visit, perhaps as early as June. David Usupashvili, Georgia’s parliamentary speaker, arrives March 11. Khidasheli came to Washington last week.

David Bakradze, the Georgian parliament’s minority leader in opposition to Ivanishvili, is also scheduled to visit Washington.

Khidasheli told The Hill she met last week with Senate Foreign Relations Committee members Ron Johnson (R-Wis.) and Risch, as well as the chief of staff to committee Chairman Robert Menendez (D-N.J.), Danny O’Brien, and other key aides. She also sat down with officials from the State Department, the vice president’s office and President Obama’s National Security Council.

She said the new government hopes to pursue closer ties to NATO and the European Union as well as a free-trade deal with the United States. She also countered criticism that Ivanishvili is seeking to punish his political foes, noting allegations of corruption and abuse by top government officials go back years but had been gathering dust under Saakashvili.

That has been a theme for Saakashvili’s backers on K Street. Scheunemann with Orion Strategies emailed several of the senators’ aides who signed onto the December letter criticizing the Georgian prime minister, according to Justice records.

“We discussed the political retribution and vengeance practiced by Ivanishvili’s government with all our contacts,” Scheunemann said.