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Paul Manafort: Three lessons for the Ukrainian lobbyists

Author : Kateryna Odarchenko

Ukraine is once again in the epicenter of an international corruption scandal due to the Manafort's case
14:45, 6 August 2018

Read the original text at 112.ua.

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The corruptive disease of the Ukrainian government, this cancerous tumor of the society, has acquired not only the features of a national disaster but also showed its metastases in the United States. However, thanks to the long-standing civilized practice of American lobbyism and the effectiveness of American legislation, the Ukrainian virus could not and will not have a significant impact on the American politics and American society. But it has created another blow to the international image of our country, I mean the case of former political technologist of Viktor Yanukovych, Paul Manafort.

Ukrainian trace of the "Manafort case"

The indictment signed by special prosecutor Robert Mueller regarding lobbyist Paul Manafort and his business partner Rick Gates, the latter are accused of 12 counts for illegal actions. In 2006 – 2015, Manafort and Gates have been unregistered agents of the government of Ukraine and Viktor Yanukovych. According to the prosecution, Manafort earned several tens of millions of dollars in Ukraine and laundered them through offshore corporations and accounts in Cyprus, Seychelles, Saint Vincent, and the Grenadines. They are also accused of being the leaders of a campaign for lobbying American officials in the interests of the government and the president of Ukraine; they did not register with the US Justice Department as foreign agents and did not provide data on the work performed and incomes from it. A separate point of accusation indicates that the materials published by them were not public and the name of the foreign customer was not public too.

Related: Manafort case: Accountant confessed to falsification of financial documents for reducing taxes

As reported by the BBC, in February 2012, Manafort and Gates ordered two Washington campaigns to “process” the members of Congress and their assistants on such topics as sanctions against Ukraine, the fairness of the Ukrainian elections and the suitability of the case against Yulia Tymoshenko, as well as a “positive” report on her imprisonment. They have transferred the executors $ 4 million for this work.

Speaking about the evidence on this case, there are Manafort’s e-mails to the Ukrainian politicians, American lobbyists, and contractors. There is Manafort's letter to Rinat Akhmetov, in which he recommends that the businessman at should get rid of Viktor Yanukovych as the Party of Regions leader. Also, Manafort drew attention to the need to search for a potential candidate for the presidency of Ukraine from among those who have political weight in the south and south-east of the country. In addition, he recommended reforming the Party of Regions. Particularly Paul Manafort noted the political strategy of Tymoshenko: she would use the means of significant disagreements with the head of state to declare the rights to be considered the only guardian of the ideas of Ukrainian revolutions.

Manafort has concluded a $ 40,000 (monthly) contract with Ted Devine with a bonus of the same amount for the 2010 presidential election campaign. In 2012, Manafort has actively interacted with Olena Bondarenko (one of the key figures of the Party of Regions) and Maksym Denk (one of the leaders of the Inter TV channel). The mediator in these contacts was the head of Manafort’s Kyiv office, Kostyantyn Kilimnik.

Related: Manafort used over 30 accounts in three countries to conceal income from Ukraine

Manafort had "close ties" with Igor Shuvalov, who, in fact, was elaborating the entire information policy of Inter through Serhiy Levochkin.

We should mention Manafort’s contacts with Borys Kolesnykov, the then vice-prime minister, who led the infrastructure issues and was personally responsible for hosting the European football championship. Most recently, his name was associated with a large Ukrzaliznytsia corruption scandal. In Manafort’s documents, Kolesnykov’s code name was “BVK.”

Iryna Akimova has been regularly meeting with Manafort and his team (in 2010, the first deputy head of the Ukrainian President Administration), as well as Serhiy Liovochkin, Andriy Honcharuk (who headed the General Directorate for International Relations of the President Administration), Yuriy Levenets (who in the 2010 elections was simultaneously advising two competitors - Viktor Yanukovych and Yulia Tymoshenko), Anna Herman, Andriy Portnov, Andriy Ermolaev, Oleg Rafalsky, Vitaliy Gramotnev, and Stanislav Skubashevsky.

Related: Paul Manafort cooperated with Vitali Klitschko in 2014, - BBC

Paul Manafort was also the advisor of the "Opposition Bloc" representatives. Manafort turned to them with a proposal to inform the Ukrainian authorities, business representatives and diplomats about the position of the "Opposition Bloc" in relation to certain current and strategic issues.

Open source

Manafort faces a prison sentence of 12.5 to 15 years, and his accomplice might get from 10 to 12.5 years.

The scandal with Manafort and Gates is instructive for at least two reasons. First, Ukraine is once again at the center of an international corruption scandal, the consequences of which will not affect the current political situation so much, but rather the image of the country will be more negative. Second, it allows us to turn again to the problems of lobbyism in the modern world and the practice of its legislative regulation. And in this sense, this scandal plays a positive and constructive role for Ukraine.

Speaking about the role of lobbyism in the United States, it is one of the most important components of the entire American political system. Thanks to lobbying, the authorities interact with American society and business. Due to lobbyism and its financial possibilities, there is a developed and highly productive "market of thought" in the US. American "think tanks," interacting with lobbying structures, business, and the state create a huge variety of effective solutions for public policy. They also make America the master of all key scenarios of national and international development.

Related: Putin: Russia has nothing to do with Manafort

The victory over corruption due to civilized lobbying became possible due to clear and effective legislation on lobbying activities. The first federal law on lobbyism was adopted in 1876. It forbade lobbyists to arrange business meetings for their clients with other members of their congressional committee.

In 1935, a law on holding companies was adopted, which obliged to file special applications for anyone who wanted to influence the US legislature, the Federal Energy Company or the Securities and Exchange Commission in the interests of holding companies. In 1938, the law "On the Regulation of Foreign Agents" was adopted, which established the mandatory special registration for lobbyists of foreign interests. The violation of this law is now attributed to Manafort.

In 1946, the main law for American lobbyists was passed, "On the Regulation of Lobbyism." According to the norms of this law, the lobbyist should have a higher legal education and at least 8 years of practical work experience in federal authorities. The law established the mandatory oath for lobbyists. In addition, lobbyists are obliged to disclose information about customers (name, address), the term of the contract, the amount of fees, and specify the documents subjected to lobbyism. The 1946 law also established the mandatory quarterly financial and legal report of lobbyists to the State Department. It is important that this law provided for the creation of special professional lobbying structures. March 19, 1979, was the first meeting of the American League of Lobbyists, which is the main structure of self-regulation of lobbyism in the United States.

Related: Manafort may have been involved in Ukraine’s not signing EU Association Agreement in 2013

The 1989 "Ethical Reform Act" banned former high-ranking officials from trying to influence the government within a year of resigning from office. In January 1996, the Law on Disclosure of Lobbying Activities came into force. It has given an explanation of who can be considered a lobbyist. A lobbyist is a former or current politician who spends more than 20% of his working time promoting the interests of a particular pressure group. Also, this law has defined "lobbyist contact" notion.

If Sytnyk was an American citizen, he would be unequivocally recognized as the violator of this law after his nightly meetings with Poroshenko, since a lobbyist contact recognizes any oral or written appeal of a natural person or organization regarding the submission of resolutions, bills or executive bodies in Congress or executive bodies amendments to already existing acts. The secretary of the Senate and the clerk of the House of Representatives were given the responsibility to create lists of lobbyists accessible to citizens. The law also confirmed mandatory registration for both American and foreign lobbyists.

Related: Manafort has three US passports, - media

In 2007, the law "On Fair Leadership and Open Government" introduced a lifetime ban on lobbying for senators, the Secretary of State, the Minister of Defense, the directors of the CIA, and the NSA.

In 2011, a very interesting position was fixed, prohibiting engaging a civil servant with income of fewer than 130.5 thousand dollars a year in lobbying activities. This norm supposes to stop the use of lobbying activities for material enrichment and reduce the likelihood of "dirty" transactions.

In 2017, Donald Trump had already imposed a lifetime ban on foreign lobbying for the staff of the presidential administration and a 5-year restriction for them in dealing with other forms of lobbying.

One can say with confidence that detailed legislative regulation has allowed American lobbyism to become a civilized alternative to corruption and in fact eliminate it from American life. Currently, Ukraine has not a single legislative act regulating lobbyism. I think that this is one of the reasons for the flourishing of corruption in our country. The need for legislative regulation of lobbyism is the second lesson of Manafort case for Ukraine.

"Woodstock Principles"

Despite the importance of regulating lobbyism, the moral principles of the lobbyists are very important. The main set of these rules for American lobbyists are the "Woodstock Principles" adopted by the American League of Lobbyists. Here they are.

  1. The pursuit of lobbying must take into account the common good, not merely a particular client’s interests narrowly considered.
  2. The lobbyist-client relationship must be based on candor and mutual respect.
  3. A policymaker is entitled to expect candid disclosure from the lobbyist, including accurate and reliable information about the identity of the client and the nature and implications of the issues.
  4. In dealing with other shapers of public opinion, the lobbyist may not conceal or misrepresent the identity of the client or other pertinent facts.
  5. The lobbyist must avoid conflicts of interest.
  6. Certain tactics are inappropriate in pursuing a lobbying engagement.
  7. The lobbyist has an obligation to promote the integrity of the lobbying profession and public understanding of the lobbying process.

It is important that the violation of one of the "Woodstock Principles" put Manafort outside the professional community of American lobbyists, depriving him of moral and legal support to his colleagues. Here is the third Manafort’s lesson for Ukraine: the society would be able to overcome corruption when people even simply suspected of it would lose the support of their colleagues, experience the negative influence of the public opinion. In the meantime, it cannot be said that Ukraine has learned this lesson.

Related: Manafort’s case should be investigated through Ukraine, - Russian Foreign Minister

Of course, due to the limited  nature of this short article, it is impossible to analyze all the lessons, Ukraine can learn from the "Manafort case." I am sure that the situation would become better; we should demonstrate that we have learned at least these three lessons.

This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

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