A Cleveland-born lobbyist who is implicated in the Paul Manafort indictments has had a long-term cozy relationship with Ohio Republicans and even served on John Kasich’s 2016 Presidential Steering Committee. Ed Kutler was a senior lobbyist at powerhouse DC Public Affairs firm, Mercury, until he departed in 2017 to found his own shop. According to their own Foreign Agents Registration Act (FARA) filings and numerous press reports, Mercury is “Company A” in the Manafort indictment. Kutler also has extensive family connections to the somewhat forgotten pornography empire of Cleveland’s own Reuben Sturman and La Cosa Nostra.
It is clear that both Mercury and Company B in the indictment (the Podesta Group) skirted lobbying ethics law during the course of their work for the European Centre for a Modern Ukraine (ECFMU), but it remains uncertain whether they will face any criminal charges related to Mueller’s probe. The crux of the firms’ wrongdoing is somewhat technical but essentially, they performed lobbying work for the pro-Putin government of Ukraine without disclosing the true nature of their relationship to Manafort, his deputy, Rick Gates, and the Ukrainian government to the Department of Justice, as required by law.
In an April 2017 letter to the DOJ, Mercury argued that because their client, the ECFMU, was neither the government of a foreign country nor a foreign political party, they were permitted to register under the far less rigorous Lobbying Disclosure Act. However, Mueller’s indictments have revealed that Mercury reported weekly to Manafort and Gates via email and telephone, received payment directly from Manafort-linked offshore accounts and had knowledge that the ECFMU was a front group for the pro-Putin government of Ukraine, headed by President Viktor Yanukovych. The indictment cites emails in which one Mercury employee calls the ECFMU “a fig leaf,” and tells another Mercury employee, “Gates was lobbying for the Centre ‘in name only. [Y]ou’ve gotta see through the nonsense of that[.]”
During the period they were under contract with ECFMU (read: “Manafort and Gates”) from May 2012 to the Euromaidan Revolution in February 2014, Mercury lobbied for controversial policy outcomes, which ran counter to mainstream U.S. policy stances at the time. However, Kutler has lobbied for Russian interests for far longer than that: from 2007 to 2010, his firm represented the Import-Export Arm of Gazprom, the Russian state-owned gas company. Ukraine and its geographical usefulness as a conduit for Russian energy products lies at the heart of the 2016 Presidential election.
The fate of Ukraine is a through line also, that connects Kutler’s and his company’s lobbying activities over the past ten years. It appears that Kutler’s work has been a critical component of Putin’s political strategy in the United States. When Kutler was lobbying for Gazprom, he and the other lobbyists working for Clark Weinstock (which eventually merged with Mercury), hosted Alexandr Medvedev, a Gazprom executive and rumored former KGB agent.
Medvedev has also been connected to the Russo-Ukrainian energy intermediary – RosUkrEnergo and other energy intermediaries, like Bulgaria’s Overgas. Via these “middleman” gas companies, Putin sells Russian oil or natural gas at prices far below market value, then the “middleman” sells a country, like Ukraine, the energy product at a market price. Putin and his cronies pocket the difference, at the expense of the Russian people, and so it goes in the kleptocratic petrostate.
In 2009, Yulia Tymoshenko, the Prime Minister of Ukraine, renegotiated the terms under which Ukraine bought gas from Russia, purchasing it directly and bypassing RosUkrEnergo entirely. Ukrainian businessman Dmitri Firtash owned a 45% stake in RosUkrEnergo (with Gazprom owning 50% and another businessman owning the remainder). In 2010, Tymoshenko ran for President of Ukraine. That same cycle, Firtash bankrolled the Presidential campaign of Viktor Yanukovych, her main political rival, in a move that was widely seen as political retribution. Paul Manafort was paid millions to serve as Yanukovych’s campaign manager and to help him rehabilitate his image. In Ukraine and around the world, Yanukovych was thought of as a gangsterish crook with problematic Russia alliances, but Manafort had been polishing dictators and strongmen for years.
In 2010, Yanukovych defeated Tymoshenko in a close race and became President of Ukraine. The following year, his government prosecuted and jailed Tymoshenko for abusing her authority as Prime Minister to buy gas directly from Russia, among other charges.
When Mercury and the Podesta Group started lobbying for the ECFMU in 2012, they had two main policy objectives:
- to quiet the bipartisan chorus of American political voices who condemned the jailing of Tymoshenko, calling it a transparent attempt to sideline a legitimate political rival. Many politicians demanded her release, including Ohio Representative Marcy Kaptur (D), who is a co-founder and co-chair of the Ukraine Caucus.
- From Spring 2012 to Spring 2014, Mercury and the Podesta Group lobbied Senators and Representatives to achieve these two policy goals and they seemed to find receptive audiences. And no wonder, Kutler was a generous donor to many politicians. He gave approximately $126,500 in political donations from 2012-2014 according to FEC reports. $24,666 (or 19.5%) of his donations during that time period were given to Republican politicians from Ohio or their affiliated PACs to convince American politicians to accept and legitimize the results of the 2012 Ukrainian Presidential Election, even though Yanukovych’s main competition, Tymoshenko, had been prosecuted and was unable to run against him from jail.
COMMITTEE YEAR AMOUNT BOEHNER FOR SPEAKER 2012 $ 500 BOEHNER FOR SPEAKER 2013 $ 5,000 BOEHNER, JOHN A. VIA FRIENDS OF JOHN BOEHNER 2012 $ 750 BOEHNER, JOHN A. VIA FRIENDS OF JOHN BOEHNER 2013 $ 5,000 CHABOT, STEVE VIA STEVE CHABOT FOR CONGRESS 2014 $ 500 FREEDOM PROJECT; THE 2012 $ 1,250 GIBBS, ROBERT VIA GIBBS FOR CONGRESS 2012 $ 333 GIBBS, ROBERT VIA GIBBS FOR CONGRESS 2013 $ 250 JOHNSON, BILL VIA JOHNSON FOR CONGRESS 2012 $ 250 JOYCE, DAVID P VIA FRIENDS OF DAVE JOYCE 2012 $ 250 JOYCE, DAVID P VIA FRIENDS OF DAVE JOYCE 2013 $ 750 JOYCE, DAVID P VIA FRIENDS OF DAVE JOYCE 2014 $ 500 LATTA, ROBERT EDWARD VIA LATTA FOR CONGRESS 2014 $ 500 MANDEL, JOSH VIA CITIZENS FOR JOSH MANDEL INC 2012 $ 250 PIONEER POLITICAL ACTION COMMITTEE (PAT TIBERI) 2014 $ 500 PORTMAN, ROB THE HONORA VIA PORTMAN FOR SENATE COMM. 2012 $ 500 PORTMAN, ROB THE HONORA VIA PORTMAN FOR SENATE COMM. 2013 $ 1,000 PORTMAN, ROB THE HONORA VIA PORTMAN FOR SENATE COMM. 2014 $ 1,500 RENACCI, JAMES B. VIA RENACCI FOR SENATE 2012 $ 583 TFP-FOJB COMMITTEE 2012 $ 2,000 WENSTRUP, BRAD VIA WENSTRUP FOR CONGRESS 2013 $ 500 OHIO POLITICIANS OR PACS 19.5% $ 24,666 TOTAL DONATED $ 126,517
As a part of his lobbying efforts, Kutler personally showed a contingent of Yanukovych’s cronies around Washington. Mercury’s FARA filings disclose that Kulter accompanied Alfred Gusenbauer, the former Chancellor of Austria, on several meetings in the summer of 2013. Mueller’s indictment of Manafort claimed that he had recruited and paid “a group of former senior European politicians to take positions favorable to Ukraine, including by lobbying in the United States” which Manafort nicknamed “the Hapsburg Group”. Contemporaneous press reports claimed that Kutler also showed Serhiy Klyuyev around town. Klyuyev was an influential member of Ukraine’s parliament who fled Ukraine in 2015 to escape corruption charges. His brother Andriy Klyuyev was implicated in the brutal crackdown on protesters during the Euromaidan and fled to Russia in 2014 around the same time as Yanukovych.
By February 2014, the Euromaidan had effectively ended Mercury’s contract with Ukraine, but Mercury’s working relationship with Manafort was far from over. At the 2016 Republican Convention in Cleveland, Manafort was still serving as Donald Trump’s campaign manager. Trump requested only one amendment to the Republican Party’s platform: instead of calling for the United States to supply “lethal weapons” to the Ukrainian Government, who were fighting Russian-aligned Separatists in the Russophone Eastern part of the country, the platform was softened considerably to read “provide appropriate assistance” instead.
According to press reports, Mike McSherry who is Mercury’s managing director was placed in charge of Trump’s delegate strategy at the Convention, which Kutler also attended. In the summer of 2016, there was a lot of talk about a contested convention and Trump’s team reportedly feared that the Republican Party would nominate someone else for President. But what if preventing a mutiny wasn’t the only delegate strategy McSherry and Mercury were up to? Politico reports that “a low-profile group of delegates, acting in conjunction with Trump campaign officials, spiked a proposal urging a tougher U.S. policy against Russian aggression in Ukraine.” It was Trump-aligned delegates who championed the platform change. The Steele Dossier alleged that this platform change was a quid pro quo, the deliverable the Russians required to release Hillary’s hacked emails, which they did shortly after the change.
Only because of the role that Kutler demonstrably and personally played in the Russian attempt to interfere with our democracy does it become appropriate to disclose his extensive family connections to a man who was once called “the Walt Disney of Porn” – Reuben Sturman – and his business’s connections to LA Cosa Nostra and international money laundering.
To understand the Mueller probe and how an American, Ohio-connected lobbyists got mixed up in it, you first have to understand the broadstokes of Ukrainian election and energy politics. This is a timeline.
Continued in Part 2 of this series.
Danielle Harlow is a Social Scientist in Columbus, Ohio, who won a game of Jeopardy! once. Follow her on twitter at @tiberisdonors.