Former Republican Sen. David Vitter is lobbying on behalf of companies linked to a Russian oligarch with ties to President Vladimir Putin, aligning himself with Trump administration efforts to ease sanctions on his clients, according to documents filed with the Justice Department.
Vitter, who has registered as a foreign agent, lobbied with several countries’ ambassadors and the Treasury Department to ease punishing sanctions imposed on major aluminum firms tied to oligarch Oleg Deripaska. After the Treasury Department agreed last month and eased the sanctions, Vitter was spotted in the Senate ahead of critical votes taking aim at the Trump administration move.
Deripaska restructured his ownership in the firms to win over the Trump administration, which argues the oligarch’s influence in his firms will be sufficiently limited in the new arrangement. But the restructuring deal has prompted sharp scrutiny on Capitol Hill since shares now will be distributed to Deripaska’s family, a foundation he started and a Kremlin-linked bank sanctioned by the US government, according to documents provided to Congress.
The concerns culminated in a dramatic Senate vote Tuesday when 11 Republicans broke ranks and joined Democrats to advance a measure seeking to reimpose the sanctions. But on Wednesday, the administration was able to lean on its GOP allies to filibuster the measure from going forward, blocking the plan by 57-42, needing 60 votes to advance.
Republican critics, however, were unnerved by the Trump administration’s move.
“I have grave concerns about Mr. Deripaska,” said John Kennedy, the Louisiana Republican who occupies Vitter’s former Senate seat and who broke with the Trump administration. “I understand he says he’s given up his majority of the stock … but you don’t have to own the majority of the stock to have influence over the people of the company.”
Democrats said that Deripaska — a close ally of Putin’s and Konstantin Kilimnik’s, a man who the FBI says has ties to Russian intelligence and is facing charges in special counsel Robert Mueller’s investigation — should not be trusted.
“I’m concerned about the timing of this plan to provide sanctions relief that benefits a key confidant of President Putin,” said Senate Minority Leader Chuck Schumer, a New York Democrat.
The House will take up its own resolution to disapprove of the sanctions relief on Thursday, in what will amount to a symbolic rebuke of the Trump administration.
Republicans who opposed Schumer’s effort to block the sanctions relief are quick to criticize Deripaska — who was sanctioned for his role in Russia’s 2016 election interference — but argue that his firms followed the sanctions law to remove him as majority stakeholder.
“Now, I’m no fan of Oleg Deripaska — he’s a scoundrel — but we either pass a law and abide by the law we pass or not,” said Sen. James Lankford, an Oklahoma Republican. “They went through all the process to make sure that Deripaska was not a majority owner.”
Vitter part of months-long lobbying
Vitter’s role has been part of a months-long lobbying effort to remove the sanctions on three entities: Rusal, the world’s second-largest aluminum producer, Rusal’s holding company EN+ Group, and EN+ Group-owned JSC EuroSibEnergo.
Vitter’s firm, Mercury LLC, has been hired by a British national, Lord Barker of Battle, who is chairman of EN+. Barker, a member of the House of Lords, is under investigation in the UK for “an alleged breach of the code in relation to personal honor, parliamentary services and paid advocacy,” according to the British Parliament. He brokered the agreement with the Treasury Department to reduce Deripaska’s ownership stake in the companies in order to lift the sanctions on the firms.
Vitter, a conservative Republican who left the Senate in 2017, referred an inquiry to a Barker spokesperson, who defended the deal.
“Deripaska would lose billions under the Treasury plan,” the spokesperson said. “The plan is corporate regime change, ending Deripaska’s control of the companies and giving it to a new super-majority of the board approved by Treasury.”
Critics believe the deal will only benefit Deripaska and his family — and say the Treasury Department should not have accepted a deal brokered by an individual under investigation by the British Parliament.
“I think there’s virtue in the Congress expressing the skepticism of this deal,” said Rep. Jim Himes, a Connecticut Democrat. “There’s a real chance that Treasury plunges ahead here for no obvious reason. The aluminum markets are stable. The price of aluminum is lower than when Rusal was listed. And then either the investigation of Lord Barker or the Mueller investigation has some pretty ugly information that would cause them to wonder why they moved so quickly.”
The Barker spokesperson said the complaint against Barker was “politically motivated and has no substance and was “made by a single opposition member.”
“Lord Barker has never lobbied the UK government or sought their assistance, as the foreign secretary recently confirmed in writing,” the spokesperson said. “We expect this malicious complaint to be thrown out by the commissioner very shortly.”
On Tuesday, Treasury Secretary Steven Mnuchin made the rounds on Capitol Hill defending the deal, urging Senate Republicans to stand behind the easing of sanctions that, he said, would benefit the US economy by reducing the cost of manufacturing.
“This shouldn’t be a political issue,” Mnuchin told reporters. “This is an issue of great importance,” he added, noting that the decision, which doesn’t apply to Deripaska personally, was reached following “a long negotiation.”
Lawmakers fear Treasury cut a bad deal
Deripaska is still personally subject to US sanctions, but Democrats and some Republicans say they believe the Treasury Department cut a bad deal that doesn’t sufficiently prevent the Russian oligarch from maintaining influence over the company even though his personal ownership stake in Rusal was reduced.
Under the arrangement, Deripaska’s ownership in EN+ Group drops from roughly 70% to roughly 45%, and he can vote only 35% of his shares, according to documents explaining the terms of the deal. But his shares are spread out to various entities, including to a foundation he started two decades ago, his ex-wife and father-in-law as well as the sanctioned Russian bank, VTB. The terms of agreement say the voting rights of these shares will be given to third parties with no ties to Deripaska. Barker was in charge of selecting the independent trustees, with sign-off required from the Treasury Department’s sanctions office.
The trustees include three Americans, one selected by a consulting firm Barker tapped to search for candidates and the other two picked in coordination with Barker’s outside lawyers, according to a source familiar with the matter.
Treasury notified Congress in mid-December of its intent to lift sanctions on the firms following “significant restructuring and corporate governance changes,” including reducing Deripaska’s direct and indirect stakes in the companies. Deripaska also was removed from the boards of EN+ Group and Rusal.
Vitter’s lobbying is part of a lengthy campaign to lift the sanctions that were part of more than 200 imposed on Russian targets in April, including Deripaska and his businesses, over the Kremlin’s interference in the 2016 US elections.
Former lawmakers like Vitter are often key lobbyists for high-powered firms like Mercury. As a senator who served from 2005 until he resigned in 2017, Vitter has personal relationships with some of his former colleagues.
He registered with the Justice Department in May under the Foreign Agents Registration Act for his work on behalf of Barker to lift the sanctions.
The companies spent nearly eight months negotiating with Treasury to lift the sanctions. At the same time, Vitter and Mercury engaged with foreign allies to help lobby Treasury, according to foreign lobbying documents filed with the Treasury Department.
The lobbying campaign included draft letters that Mercury provided to the ambassadors of Jamaica, Italy, France and the Netherlands to send to Treasury officials, the documents show.
The letters focused on Rusal’s influence on the economies and jobs in their countries, as well as its ownership stake of a Jamaican aluminum company. “Many jobs are at stake in the West Indies Alumina Company,” the Jamaican draft letter states. “Continued sanctions will hurt those jobs and workers and negatively impact consumers around the world.”
The Mercury documents included a breakdown of Barker’s plan as well as a subhead about “support from your government.”
“To protect French economic interests and support the Barker Plan, we request Ambassador Araud take the following steps,” the document states, proposing the French ambassador send the statement to Treasury officials as well as craft a statement for public use.