In the years leading up to Russia’s attack on Ukraine, US lobbyists have raked in millions of dollars from Russian banks and financial firms paying to push their interests in Washington.
Now, in the wake of the Russian invasion and new sanctions announced by President Joe Biden, many of those lobbying firms are rushing to cut ties and drop their lucrative contracts.
At least six lobbying firms that previously represented now-sanctioned Russian banks and companies tied to a Russian natural gas pipeline terminated their contracts or representation this week, according to statements and federal lobbying disclosures.
The exodus marks the rupture of a Moscow-to-K-Street conduit that has long employed former federal officials and members of Congress of both parties, experts said.
Some of the banks Biden targeted with sanctions, including VTB, Russia’s second-largest, were put under “full blocking” sanctions, which freeze organizations’ US assets and prohibit them from doing business in the country. That means it would be illegal for lobbyists to work for them unless they receive a license from the Treasury Department, according to legal experts.
Dropping contracts with fully blocked banks “is not a gesture in solidarity with Ukraine, this is a requirement under US law,” said Erich Ferrari, an attorney who specializes in US economic sanctions. Lobbyists could face prosecution for running afoul of sanctions laws, he said.
But even for lobbyists representing firms that aren’t fully blocked, it would be a “real reputational risk for these firms to keep representing these sanctioned entities,” said Freeman, who called ties to Russia a “scarlet letter” in DC.