An exclusive EJB investigation has uncovered that two global law firms headquartered in Cleveland have contracted with oil companies and a bank owned by the Russian government without first registering under the Foreign Agents Registration Act (FARA) with the U.S. Department of Justice (USDOJ).
Nothing about the Cleveland law firms of Jones Day LLP and Squire, Patton & Boggs LLP representing the Russian government is hidden. In fact, each firm boasts of handling multi-billion dollar mergers, sales and cross-border transactions for the Russian government for decades.
A search of the FARA page on the USDOJ website reveals neither firm has registered as an active or terminated agent for the Russian government since 1966.
Failing to register as a foreign agent under FARA carries up to a 5-year prison sentence and $10,000 in fines. Registration with the USDOJ is required 10 days upon receipt of an “engagement” or contract.
One of the criminal elements of a FARA violation is the “foreign agent” receiving “tens of millions of dollars” in undisclosed compensation to represent foreign governments and not reporting it to the USDOJ.
Lawyers for Jones Day led by attorney Stephen J. Brogan and Squire Patton & Boggs that employs Global Managing Partner Frederick R. Nance openly explain on their websites and in news releases how they have served the Russian government as contracted legal counsel since before ex-KGB spy boss Vladimir Putin became his nation’s president in 2000.
Jones Day and Squire, Sanders & Dempsey were founded in the 1890’s and handled Standard Oil’s legal affairs for world’s first billionaire and East Cleveland, Ohio resident John D. Rockefeller. With more than 125 years of representing the world’s largest oil companies, Russian officials sought legal insights from the two Cleveland law firms that built the legal game for the world’s oil industry through their Standard Oil experiences.
Former Squire, Sander & Dempsey chairman Thomas Stanton started doing business with former Soviet bloc nations in the 1990’s as they sought to privatize for profits when the Soviet Union collapsed in 1991. The Russian government through its oil and banking interests were and have been Squire, Sanders & Dempsey clients for decades.
Like President Donald Trump’s “executive orders,” Russian President Boris Yelstin issued a series of “presidential decrees” that sought to restructure Russia’s complex system of more than 300 state and private owned oil companies.
Yelstin and later Putin wanted to stabilize state-owned Rosneft through a series of acquisitions, mergers and IPO’s that brought private investments to its highly-disorganized and unstable “people-owned” oil and gas utility companies. The disorganization was so stark the mayor of Moscow wanted the city and not the national government to deliver oil for fuel and heating to its residents and businesses.
Both Jones Day and Squire Patton & Boggs today have Moscow offices less than a 20 minute walk from the Kremlin. Attorney Sergey Treschev leads Squire Patton & Boggs’ Moscow office.
Jones Day opened a Moscow office in 2004 and assigned Russian-born attorney Vladimir Lechtman to manage it. His biography shows Lechtman earned a juris doctorate from the University of Texas in Austin in 1987.
Lechtman’s biography showcases an attorney with an extremely impressive background of knowledge in the international oil industry from a Russian-government perspective.
He’s led the Cleveland law firm’s Moscow office to handle more than $70 billion in transactions beginning in 2003. He also led Jones Day lawyers in an $18 billion merger of BP and TPK for the Kremlin and Putin. His biography rightfully boasts that it was the largest oil company merger of its time.
Records on file with the UDSOJ do not show Jones Day in 2003 informing the U.S. government that lawyers in its Moscow and Cleveland offices were foreign agents of the Russian government within 10 days of receiving a contract as required by the FARA.
In contrast Squire, Patton & Boggs has been registered under FARA to represent the Palestinian Authority since 2014.
There are 214 terminated and active FARA registrants who have served or serve the Russian government. Jones Day and Squire, Sanders & Dempsey and Squire, Patton & Boggs are not among them.
Jones Day is registered with the Clerk of Congress pursuant to the Lobbying Disclosure Act (LDA) as a lobbyist for the Gazprom Bank of Moscow. Congress, however, specifically required “lobbyists” to register under the FARA if the client is a “government.” Recent LDA filings do not show income being generated by Jones Day since Congress sanctioned Gazprom Bank as an agent of the Russian government after Putin invaded the Ukraine in 2014.
U.S. Senator Charles Grassley leads the Senate Judiciary Committee and shared his thoughts in July about the type of defiance the two global law firms are engaged in with other private Americans and corporations that have failed to register as “foreign agents” with the USDOJ.
“The basic idea is transparency. Foreign propaganda and lobbying should not be underground, but out in the open. In general, FARA doesn’t make these activities illegal. It just says you have to register with the Justice Department,” Grassley wrote. “FARA is a public disclosure law. The government, and the people, need to know if foreign governments, political parties, or other foreign interests are trying to influence U.S. policy or public opinion.”
According to the USDOJ’s FARA investigations manual, enforcement of the federal law would be handled by the U.S. Attorney for the Northern District of Ohio in Cleveland where both law firms operate their global headquarters.
Investigations would be referred to local FBI offices. FBI agents can initiate FARA violation investigations on their own. What’s clear is individuals and firms representing foreign governments and foreign political parties are not exempt from the mandatory requirements of registering as foreign agents within 10 days of entering an agreement.
What’s clear in the defiance and lack of enforcement is that federal, state and local elected officials who’ve interacted with lawyers from Jones Day and Squire Patton & Boggs about U.S. policy towards Russia have not known since at least the collapse of the Soviet Union in 1991 that they may have been receiving advice and campaign contributions from unregistered agents of the Russian government.
Cleveland Clinic’s Abu Dhabi website explains in bold detail how the Cleveland hospital corporation entered an agreement with the stateowned Mubadala Development Company in 2006 to further the government of Abu Dhabi’s vision.
Attorney Steve Dettelbach was President Barack Obama’s appointee to the U.S. Attorney’s office for the Northern District of Ohio at the time of the agreement.
It was Dettelbach’s duty to ensure Cleveland Clinic complied with the Foreign Agents Registration Act (FARA) when he stood in the hospital’s auditorium and declared corruption to be over in Cuyahoga County in 2013.
Even in 2010 while he was boasting about the number of corporations with CEO’s who had signed an anti-bribery pledge, the Cleveland Clinic CEO backing him, Delos Cosgrove, was an individual he should have been investigating as a possible foreign agent of the United Arab Emirates for violating FARA as they co-founded the Northeast Ohio Business Ethics Coalition. The irony of their relationship makes the entire event seem like a surreal joke.
The irony grows worse as the thought that the law firm who’s CEO, Stephen J. Brogan, was going to employ Justin Herdman at Jones Day after he helped Dettelbach prosecute fake terrorists instead of real unregistered foreign agents was also supporting the anti-corruption pledge while an unregistered agent of the Russian government.
Now that President Donald Trump appointed Herdman in June to serve as the area’s chief federal prosecutor the former Jones Day “partner” has not taken a cue from Special Counsel Robert Mueller to enforce the law locally against his former employer.
Americans don’t know what Jones Day, Squire, Patton & Boggs or Cleveland Clinic are doing as potential unregistered agents of foreign governments. Federal prosecutors who should be investigating and prosecuting unregistered foreign agents are joining their law firms as “partners” or serving them as “clients” and “employees.”
Federal records show President Donald Trump appointed 14 Jones Day lawyers in January 2017 to serve in his administration while the firm has an office in Moscow 1548 feet from the Kremlin. The 14 lawyers who worked for Putin and the Kremlin’s contract law firm now occupy key policy and law enforcement offices inside the White House; and now one is the federal prosecutor for Northeast Ohio.
Don McGahn, Trump’s national campaign legal advisor and now White House counsel, was a Jones Day partner while the firm continued its Moscow operations during the president’s candidacy.
This past July U.S. Senator Charles Grassley, chairman of the Senate Judiciary Committee, ripped into the U.S. Department of Justice (USDOJ) for not enforcing the “Foreign Agent Registration Act” that Special Counsel Robert Mueller is using to prosecute three of President Donald Trump’s campaign officials.
Just like the corporations and LLP’s led by Cosgrove, Brogan and Frederick R. Nance of Squire, Patton & Boggs did not register with the USDOJ and inform Americans that they served the interests of the governments of the United Arab Emirates and Russia, Paul Manatos, Rick Baker and George Popodapoulos did not register as foreign agents of Russia and the Ukraine.
Grassley in July referred to a report from the USDOJ’s Inspector General which revealed that federal prosecutors didn’t understand FARA or how to enforce it.
When he obtained the federal grand jury’s support to indict Manatos, Baker and Popodapoulos, Mueller issued a statement that Manatos’ FARA violation constituted a “conspiracy against the United States, conspiracy to launder money, unregistered agent of a foreign principal, false and misleading FARA (Foreign Agents Registration Act) statements, false statements, and seven counts of failure to file reports of foreign bank and financial accounts.” Americans are supposed to know how much foreign money is being funneled into the U.S. to influence policy and where it’s going.
The U.S. DOJ’s FARA manual gives federal prosecutors two options for enforcing the law. If DOJ or FBI special agents examine the filings and the records of a “registrant” and come across a deficiency they can resolve the problem administratively. Corporations and firms like Jones Day and Squire Patton & Boggs that fail to file are to be referred to the FBI for a criminal investigation.
According to the U.S. DOJ’s FARA obligations, registration is mandatory.
“An agent must register within ten days of agreeing to become an agent and before performing any activities for the foreign principal. No person shall act as an agent of a foreign principal unless he/she has filed with the Attorney General a true and complete registration statement and supplements. Unless he/she is exempt from registration under the provisions of this Act.”
More specifically, the FARA exemptions on the USDOJ’s website do not appear to apply to the two law firms or Cleveland Clinic.
FARA’s exemptions exclude diplomats and officials of foreign governments if they’re properly recognized as such by the U.S. Department of State. Individuals whose activities are purely commercial or religious, scholastic, academic, scientific or involving fine arts are exempt. Persons soliciting “aid” funds for medical, food and clothing to ease human suffering are exempt. Lawyers representing foreign principals in U.S. courts are exempt as long as the representation doesn’t include them trying to influence policies.
Grassley blasted USDOJ officials for sending notices to FARA violators instead of prosecuting as Congress required.
“The dirty little secret is that lots of people across the political spectrum in Washington have skirted their FARA registration obligations for years with little to no accountability.”