In the aftermath of the release of the Panama Papers, journalists have attempted to establish a relationship between the Kremlin and U.S. presidential candidate Hillary Clinton. But do the allegations hold up?
Democratic presidential candidate Hillary Clinton speaks during a campaign event at City Garage in Baltimore, April 10, 2016. Photo: AP
The Panama Papers scandal has already implicated the Kremlin and some members of President Vladimir Putin’s inner circle of potential fraud, corruption and dubious use of offshore investments. Now comes another stunning allegation: one of the Russian banks mentioned in the Panama Papers may have paid a high-profile Washington, D.C.-based firm linked to U.S. presidential candidate Hillary Clinton to conduct lobbying activities on its behalf.
At the center of the story is John Podesta, the chairman of the 2016 Clinton presidential campaign, who might have allegedly accepted money to lobby the Kremlin’s interests in Washington. According to an article in the New York-based Observer, Podesta was at least indirectly involved in promoting the interests of Russian President Vladimir Putin. Needless to say, given Podesta’s close connections to the top leadership of the U.S. Democratic Party, this story attracted its fair share of attention in the media.
Specifically, the article claims that Podesta Group, a lobbying firm founded by the Podesta brothers (Tony and John Podesta), signed a contract with the American branch of Sberbank, a Russian bank mentioned in the Panama Papers. According to the terms of the purported deal, the Podesta Group intends to defend the interests of its new Russian client to alleviate the burden of sanctions imposed by the U.S. in response to the Kremlin’s policy in Ukraine.
However, that’s just the start of the story. According to the Observer article, Sberbank is really controlled by Russia’s state-run Central Bank. Moreover, the article suggests that Russia’s Foreign Intelligence Service (SVR) extensively use Sberbank’s foreign operations as a way of disguising overseas operations. Thus, through this convoluted reasoning, a private Russian bank may actually be doing the bidding of Kremlin insiders by making payments to a firm controlled by a well-connected Clinton insider.
At first glance, such accusations look like a gift for Clinton’s political opponents, who can use this story to discredit their rival and score political points amidst the 2016 presidential campaign in the U.S.
Two discrepancies in the accusations
But if one digs deeper into the details, there are some glaring discrepancies in the article. One of them is the fact that the Podesta Group signed the lobbyist deal with Sberbank long before the Panama Papers scandal made headlines across the world. Moreover, there is nothing scandalous about the deal itself – Podesta Group made a public disclosure of the arrangement.
Furthermore, it is not a big surprise that Russia has been trying to use American lobbying firms and media to promote its interests in the U.S. There is a good precedent, in fact. PR company Ketchum tried to boost the Kremlin’s publicity and improve Russia’s image in the U.S. between 2006 and 2014 for $60 million. But this initiative failed.
However, the agreement between Sberbank and Podesta Group, if it really exists, indicates that the Kremlin doesn’t give up and seems to be ready to continue its lobbying campaign in a new environment. It also might indicate that the Russian authorities have no illusions about the odds of Republican presidential candidate Donald Trump becoming the next American president.
The Putin team seems to have admitted that Clinton is the frontrunner who has the greatest chance of winning the U.S. presidency. They could assume that the Podesta brothers might take influential positions in the event of her victory. And this means the Kremlin sees them as the most promising lobbyists of Putin’s interests in the U.S.
Another discrepancy in the investigation is the speculative nature of the journalists’ attempts to draw links between the Panama Papers scandal and the Podesta Group. After all, there is no clear correlation between the Podesta Group and the Panama Papers.
The documents just draw attention to Sberbank, Russia’s largest bank, which is allegedly involved in controversial offshore deals. This assumption drives curious journalists to dig deeper into the background of the bank. And speculation came to the fore, when the media revealed it has ties with the Podesta Group.
Can lobbyists impact bilateral relations?
If these assumptions about Sberbank are really true and the Russian authorities are trying to use American lobbyists to achieve their goals, it could undermine the position of Clinton. But, most importantly, they reveal something completely unexpected in the Kremlin’s tactics. Despite its tough anti-American rhetoric, the Kremlin still holds out hope of reaching a compromise with the head of a new American presidential administration.
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However, Russia’s attempts to follow the rules of American lobbying might backfire. Based on its own domestic experience, the Russian leadership seems to believe that everything is possible to sell and buy in the U.S. through lobbyist groups.
Yet, such tactics by no means will improve Moscow-Washington relations, given the ideological differences between the two countries. Paying money to the right lobbyist is not enough to really improve bilateral relations. Such a policy – if Sberbank and the Kremlin really pursue it – is hardly likely to be effective. On the contrary, it might even backfire, damaging the image of Russia.
The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.