The Justice Department and the FBI are conducting a wide-ranging investigation into allegations of corrupt dealings by the government of former Ukrainian president Viktor Yanukovych, including the hiring of Washington lobbyists for the regime by former Donald Trump campaign chairman Paul Manafort, a senior law enforcement official confirmed to Yahoo News.
The investigation, which was first reported by CNN, began two years ago after Yanukovych fled Kiev to Moscow and was replaced by the current government of Petro Poroshenko, the official said. But the inquiry has expanded in recent weeks in the wake of the discovery of documents showing $12.7 million in payments to Manafort by Yanukovych’s Party of Regions political party. Investigators are also looking into reports that Manafort recruited two top Washington lobbying firms to advocate on behalf of a Belgian nonprofit that investigators now believe may have served as a front for Yanukovych’s party. Neither of the firms, the Mercury Group and the Podesta Group, registered with the U.S. Justice Department as foreign agents — a requirement if they represented a foreign government or political party.
The disclosure of the Justice Department investigation came on the same day that Manafort stepped down as Trump’s campaign chairman — news that sent new shockwaves through Republican circles. Manafort, who served for years as a campaign consultant to Yanukovych, declined requests for comment. But a close associate of his who asked not to be identified explained his resignation this way: Manafort “is not going to take orders or relinquish power to people like” Kellyanne Conway, the new Trump campaign manager, and Steve Bannon, the newly named CEO of the campaign. The Manafort associate also blamed the rapidly unfolding Ukraine allegations on “oppo research” being spread by Corey Lewandowski, Trump’s former campaign manager and a bitter foe of Manafort
Ken Gross, a lawyer at Skadden Arps, which represents the Mercury Group, one of the lobbying firms recruited by Manafort, told Yahoo News that his firm has been “engaged to look into the matter” of whether Mercury was required to register as a foreign agent with the Justice Department when, at Manafort’s request, it agreed to represent the Brussels-based European Centre for a Modern Ukraine in 2012. Lobbying reports reviewed by Yahoo News show that the firms sought to burnish Yanokovych’s reputation and lobbied against congressional resolutions condemning the regime’s treatment of political opponents and opposing Russian aggression in Ukraine.
Another firm, the Podesta Group, headed by Tony Podesta, brother of Hillary Clinton’s campaign chairman, John Podesta, was also recruited by a Manafort deputy and lobbied for the European Centre. In a lengthy statement Friday, the Podesta Group said it had retained another Washington law firm, Caplin & Drysdale,“to determine if we were misled by the Centre for a Modern Ukraine or any other individuals with regard to the Centre’s potential ties to foreign governments or political parties.”
The statement added: “When the Centre became a client, it certified in writing that ‘none of the activities of the Centre are directly or indirectly supervised, directed, controlled, financed or subsidized in whole or in part by a government of a foreign country or a foreign political party.’ We relied on that certification and advice from counsel in registering and reporting under the Lobbying Disclosure Act rather than the Foreign Agents Registration Act. We will take whatever measures are necessary to address this situation based on Caplin & Drysdale’s review, including possible legal action against the Centre.”
Sevgil Musaieva, editor of Ukrainskaye Pravda, a newspaper that has conducted multiple investigations into corruption under the Yanukovych regime, told Yahoo News that she first met with a team of FBI agents at the U.S. Embassy in Kiev two years ago. At the time, the new government headed by Poroshenko had asked the FBI for assistance in tracking down millions of dollars that it believed had been stolen by Yanukovych and his associates before they fled Kiev. “The FBI came to Kiev and started an investigation,” she said. They asked her detailed questions about what she knew about allegations of corrupt dealings by the Yanukovych regime.
But sources familiar with the probe say it expanded after a Ukrainian anticorruption bureau discovered a “black book” said to show “off-the-books” cash payments from the party to Manafort totaling $12.7 million between 2007 and 2012. Entries show that some of the payments were signed by a former member of the Ukrainian Parliament who was also a board member of the European Centre. Documents also purportedly show payments to the executive director of the center, according to a source familiar with the probe, reinforcing suspicions that the group was fronting for Yanukovych’s political party.