Fusion GPS & Russian ex-pat allegedly failed to register as foreign agents while working to dismantle Magnitsky Act

WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley is asking whether a suspected former Russian intelligence officer-turned U.S. lobbyist and the firm behind the unsubstantiated anti-Trump dossier should have registered as foreign agents for their efforts to bring down a U.S. law on behalf of the Kremlin. According to a – Senate Judiciary Committee Chairman Chuck Grassley is asking whether a suspected former Russian intelligence officer-turned U.S. lobbyist and the firm behind the unsubstantiated anti-Trump dossier should have registered as foreign agents for their efforts to bring down a U.S. law on behalf of the Kremlin. According to a complaint filed with the Justice Department , Fusion GPS, which was also involved in the creation of the unsubstantiated dossier alleging collusion between the Trump campaign and the Russians, was involved in the pro-Russia campaign to kill the Global Magnitsky Act around the same time.

In 2012, President Obama signed into law the Magnitsky Act, named for a lawyer who suspiciously died in Russian custody after accusing Russian government officials and members of organized crime of using corporate identity theft against Hermitage Capital Management to fraudulently obtain and launder $230 million, some of which allegedly ended up in U.S. real estate projects. The Magnitsky Act imposed sanctions against those involved as well as other Russians designated as human rights abusers.

In 2013, the Justice Department opened a case to seize the U.S. assets of Russian-owned Prevezon Holdings, which received millions of dollars from the theft and used it to purchase real estate in New York, according to the department’s complaint. In response, Prevezon Holdings and the Kremlin launched a campaign to undermine the Magnitsky Act and discredit Magnitsky’s claims of corruption, according to a 2016 complaint by Hermitage CEO William Browder. Fusion GPS and Rinat Akhmetshin, among others, were involved in the pro-Russia campaign in 2016, which involved lobbying congressional staffers to attempt to undermine the Justice Department’s account of Magnitsky’s death and the crime he uncovered, repeal the Magnitsky Act itself, and delay efforts to expand it to countries beyond Russia, according to Browder’s complaint. Akhmetshin, a Russian immigrant, has reportedly admitted to being a “soviet counterintelligence officer,” and has a long history of lobbying the U.S. government for pro-Russia matters. Fusion GPS was reportedly tasked with generating negative press coverage of Browder and Hermitage.

Despite the reported evidence of their work on behalf of Russian interests, neither Fusion GPS nor Akhmetshin are registered as foreign agents under the Foreign Agent Registration Act (FARA).

FARA was passed to improve transparency of individuals and organizations that lobby the U.S. government or act as publicity agents on behalf of a foreign principal. Grassley has previously raised concerns about the department’s inconsistent enforcement of FARA. This case is particularly important given that Fusion GPS was apparently simultaneously working on the unsubstantiated dossier alleging collusion between Trump presidential campaign associates and Russia, which the FBI reportedly agreed to continue funding. Because Fusion GPS had not registered under FARA, it is unclear whether the FBI was aware of the company’s pro-Russia activities and its connection with Ahkmetshin when evaluating the credibility of the dossier the company helped create.

In a letter today to the Justice Department, Grassley is asking for an update on Browder’s 2016 FARA complaint, including what steps the department has taken to enforce FARA.

March 31, 2017

VIA ELECTRONIC TRANSMISSION

The Honorable Dana Boente

Acting Deputy Attorney General

U.S. Department of Justice

950 Pennsylvania Avenue, N.W.

Washington, DC 20530

Dear Mr. Boente:

Over the past few years, the Committee has repeatedly contacted the Department of Justice to raise concerns about the Department’s lack of enforcement of the Foreign Agents Registration Act (“FARA”). I write regarding the Department’s response to the alleged failure of pro-Russia lobbyists to register under FARA. In July of 2016, Mr. William Browder filed a formal FARA complaint with the Justice Department regarding Fusion GPS, Rinat Akhmetshin, and their associates. [1] His complaint alleged that lobbyists working for Russian interests in a campaign to oppose the pending Global Magnitsky Act failed to register under FARA and the Lobbying Disclosure Act of 1995. The Committee needs to understand what actions the Justice Department has taken in response to the information in Mr. Browder’s complaint. The issue is of particular concern to the Committee given that when Fusion GPS reportedly was acting as an unregistered agent of Russian interests, it appears to have been simultaneously overseeing the creation of the unsubstantiated dossier of allegations of a conspiracy between the Trump campaign and the Russians.

Mr. Browder is the CEO of Hermitage Capital Management (“Hermitage”), an investment firm that at one time was the largest foreign portfolio investor in Russia. According to the Justice Department, in 2007, Russian government officials and members of organized crime engaged in corporate identity theft, stealing the corporate identities of three Hermitage companies and using them to fraudulently obtain $230 million. [2] The $230 million was then extensively laundered into accounts outside of Russia. When Hermitage learned of the situation, its attorneys, including Mr. Sergei Magnitsky, investigated. In December of 2007, Hermitage filed criminal complaints with law enforcement agencies in Russia, complaints which identified the Russian government officials who had been involved. In response, the Russian government assigned the case to the very officials involved in the crime, who then arrested Mr. Magnitsky and kept him in pretrial detention for nearly a year, until he died under highly suspicious circumstances after being beaten by guards and denied medical treatment.

In response to this brazen violation of human rights, Congress passed the bipartisan Sergei Magnitsky Rule of Law Accountability Act of 2012 (“Magnitsky Act”), which was signed into law by President Obama. The law authorized sanctions against those who the President determined were responsible for Mr. Magnitsky’s detention and death, those who financially benefitted from it, and those involved in the criminal conspiracy he had uncovered. The law also authorized sanctions against those the President determined were responsible for other extrajudicial killings, torture, or human rights violations committed against individuals seeking to promote human rights or expose illegal activity carried out by Russian government officials. The sanctions involved banning the identified individuals from the U.S. and authorizing the President to use the International Emergency Economic Powers Act to freeze their property, provided that the property is in the United States. President Obama initially identified 18 such individuals, and subsequently added others.

The Russian government responded to the Magnitsky Act by prohibiting all adoptions of Russian children by United States citizens. It similarly put out a list of 18 U.S. government officials banned from Russia.

In 2013, the Department of Justice initiated a civil asset forfeiture case against Prevezon Holdings, a company owned by Russian Denis Katsyv, the son of a former Russian government minister. [3] The Justice Department argued that his company had received millions of the laundered $230 million from the conspiracy Mr. Magnitsky discovered, and had used it to purchase real estate in New York. [4] Additionally, in 2015, Senators Cardin and McCain introduced the Global Magnitsky Act, which would extend the Magnitsky sanctions framework to human rights violators across the globe.

As detailed in press accounts and in Mr. Browder’s FARA complaint, in response to these actions, Prevezon Holdings and the Russian government began a lobbying campaign purportedly designed to try to: repeal the Magnitsky Act; remove the name “Magnitsky” from the Global Magnitsky Act and delay its progress; and cast doubt on the Justice Department’s version of events regarding the corporate identity theft of Hermitage’s companies, the fraudulently obtained $230 million, and the death of Mr. Magnitsky. [5]

Prevezon’s lobbying efforts were reportedly commissioned by Mr. Katsyv, who organized them through a Delaware non-profit he formed and through the law firm then representing Prevezon in the asset forfeiture case, Baker Hostetler. [6] Among others, the efforts involved lobbyist Rinat Akhmetshin and Fusion GPS, a political research firm led by Glenn Simpson. [7] According to press reports, Baker Hostetler partner Mark Cymrot briefed congressional staff on the asset forfeiture case, attempting to discredit the Justice Department’s version of events and instead push the Russian government’s account. [8] Rinat Akhmetshin, along with former Congressman Ron Dellums, reportedly lobbied the House Foreign Affairs Committee, telling staffers “they were lobbying on behalf of a Russian company called Prevezon and ask[ing] [the Committee] to delay the Global Magnitsky Act or at least remove Magnitsky from the name,” as well as telling the staffers “it was a shame that this bill has made it so Russian orphans cannot be adopted by Americans.” [9] Mr. Akhmetshin was also involved in the screening, targeting Congressional staffers and State Department officials, of an anti-Magnitsky propaganda film. [10] For its part, Fusion GPS reportedly “dug up dirt” on Mr. Browder’s property and finances, and attempted to generate negative stories about Mr. Browder and Hermitage in the media, shopping stories to a number of reporters. [11]

According to press reports, the Russian government also directly delivered a letter on the issue to a Congressional delegation visiting the country, which similarly sought to undermine the Justice Department’s account of events by accusing Mr. Browder and Mr. Magnitsky of a variety of crimes. [12] The letter from the Russian government also stated:

Changing attitudes to the Magnitsky story in Congress, obtaining reliable knowledge about real events and personal motives of those behind the lobbying of this destructive Act, taking into account the pre-election political situation may change the current climate in interstate relations. Such a situation could have a very favorable response from the Russian side on many key controversial issues and disagreements with the United States, including matters concerning the adoption procedures. [13]

It is particularly disturbing that Mr. Akhmetshin and Fusion GPS were working together on this pro-Russia lobbying effort in 2016 in light of Mr. Akhmetshin’s history and reputation. Mr. Akhmetshin is a Russian immigrant to the U.S. who has admitted having been a “Soviet counterintelligence officer.” [14] In fact, it has been reported that he worked for the GRU and allegedly specializes in “active measures campaigns,” i.e., subversive political influence operations often involving disinformation and propaganda. [15] According to press accounts, Mr. Akhmetshin “is known in foreign policy circles as a key pro-Russian operator,” [16] and Radio Free Europe described him as a “Russian ‘gun-for-hire’ [who] lurks in the shadows of Washington’s lobbying world.” [17] He was even accused in a lawsuit of organizing a scheme to hack the computers of one his client’s adversaries. [18]

As you know, Fusion GPS is the company behind the creation of the unsubstantiated dossier alleging a conspiracy between President Trump and Russia. It is highly troubling that Fusion GPS appears to have been working with someone with ties to Russian intelligence –let alone someone alleged to have conducted political disinformation campaigns– as part of a pro-Russia lobbying effort while also simultaneously overseeing the creation of the Trump/Russia dossier. The relationship casts further doubt on an already highly dubious dossier.

The actions of Mr. Akhmetshin, Fusion GPS, and the others described in Mr. Browder’s complaint appear to show that they acted on behalf of a foreign principal. This is exactly the type of activity Congress intended to reach with FARA. When properly enforced, FARA provides important transparency. However, in this case, because none of the parties involved in the anti-Magnitsky lobbying had properly registered under FARA, these suspicious connections were not appropriately documented and brought to public light. In fact, it is unclear whether the FBI was or is aware of Fusion GPS’s pro-Russia lobbying and connection to Mr. Akhmetshin, or that these efforts coincided with the creation of the dossier. Presumably, such awareness would have informed the FBI’s evaluation of the dossier’s credibility. This is why it is important for the Department of Justice to actually enforce FARA’s disclosure requirements.

In order for the Committee to evaluate the situation, please respond to the following by no later than April 14, 2017:

What actions, if any, has the Department of Justice taken to enforce FARA’s requirements regarding the parties identified in Mr. Browder’s July 16, 2016 complaint? None of the parties involved appear to have registered these activities pursuant to FARA. Why has the Justice Department not required them to register under FARA? Has the Justice Department sent letters of inquiry to any of the parties identified in the complaint? If so, please provide copies. If not, why not? Under 28 C.F.R. § 5.2, any present or prospective agent of a foreign entity may request an advisory opinion from the Justice Department regarding the need to register. Have any of the parties identified in the complaint ever requested an advisory opinion in relation to the pro-Russia work described in this letter? If so, please provide a copy of the request and the opinion.

I anticipate that your written response and the responsive documents will be unclassified. Please send all unclassified material directly to the Committee. In keeping with the requirements of Executive Order 13526, if any of the responsive documents do contain classified information, please segregate all unclassified material within the classified documents, provide all unclassified information directly to the Committee, and provide a classified addendum to the Office of Senate Security. The Committee complies with all laws and regulations governing the handling of classified information. The Committee is not bound, absent its prior agreement, by any handling restrictions or instructions on unclassified information unilaterally asserted by the Executive Branch.

Thank you for your prompt attention to this important matter. If you have any questions, please contact Patrick Davis of my Committee staff at (202) 224-5225.

Sincerely,

Charles E. Grassley

Chairman

Committee on the Judiciary

cc:

The Honorable Dianne Feinstein

Ranking Member

Senate Committee on the Judiciary

The Honorable James Comey

Director

Federal Bureau of Investigation

The Honorable Ben Cardin

United States Senate

The Honorable John McCain

United States Senate

House Committee on Foreign Affairs

[1] Complaint Regarding the Violation of US Lobbying Laws by the Human Rights Accountability Global Initiative Foundation and Others, Hermitage Capital Management (July 15, 2016) (“Browder Complaint”) (attached). [2] Second Amended Verified Complaint, U.S. v. Prevezon Holdings Ltd., et al., No. 13-cv-6326, ECF 381 (SDNY) (“DOJ Complaint”) (attached). [3] U.S. v. Prevezon Holdings Ltd., et al., No. 13-cv-6326 (SDNY). [4] DOJ Complaint, supra note 2. [5] Browder Complaint, supra note 1; see Isaac Arnsdorf, FARA Complaint Alleges Pro-Russian Lobbying, Politico (Dec. 8, 2016); Michael Weiss, Putin’s Dirty Game in the U.S. Congress, The Daily Beast (May 18, 2016); Mike Eckel, Russian ‘Gun-For-Hire’ Lurks in Shadows of Washington’s Lobbying World, Radio Free Europe/Radio Liberty (July 17, 2016); Isaac Arnsdorf, From Russia, With Love?, Politico (Aug. 17, 2016); Chuck Ross, Oppo Researcher Behind Trump Dossier Is Linked to Pro-Kremlin Lobbying Effort, The Daily Caller (Jan. 13, 2017); Isaac Arnsdorf and Benjamin Oreskes, Putin’s Favorite Congressman, Politico (Nov. 23, 2016). [6] Browder Complaint, supra note 2; Isaac Arnsdorf, FARA Complaint Alleges Pro-Russian Lobbying, Politico (Dec. 8, 2016). [7] Id.; Chuck Ross, Oppo Researcher Behind Trump Dossier Is Linked to Pro-Kremlin Lobbying Effort, The Daily Caller (Jan. 13, 2017). [8] Isaac Arnsdorf, FARA Complaint Alleges Pro-Russian Lobbying, Politico (Dec. 8, 2016). [9] Michael Weiss, Putin’s Dirty Game in the U.S. Congress, The Daily Beast (May 18, 2016); see Isaac Arnsdorf, From Russia, With Love?, Politico (Aug. 17, 2016). [10] Mike Eckel, Russian ‘Gun-For-Hire’ Lurks in Shadows of Washington’s Lobbying World, Radio Free Europe/ Radio Liberty (July 17, 2016). [11] Isaac Arnsdorf, FARA Complaint Alleges Pro-Russian Lobbying, Politico (Dec. 8, 2016); Chuck Ross, Oppo Researcher Behind Trump Dossier Is Linked to Pro-Kremlin Lobbying Effort, The Daily Caller (Jan. 13, 2017). [12] Michael Weiss, Putin’s Dirty Game in the U.S. Congress, The Daily Beast (May 18, 2016). [13] Id. [14] Isaac Arnsdorf, FARA Complaint Alleges Pro-Russian Lobbying, Politico (Dec. 8, 2016). [15] Id. (“Akhmetshin used to spy for the Soviets and ‘specializes in active measures campaigns’ … Akhmetshin acknowledged having been a Soviet counterintelligence officer”); Chuck Ross, Oppo Researcher Behind Trump Dossier Is Linked to Pro-Kremlin Lobbying Effort, The Daily Caller (Jan. 13, 2017) (Akhmetshin “was affiliated with GRU, Russia’s main intelligence directorate”); Steve LeVine, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea 366 (2007) (describing how a former KGB officer turned businessman turned Kazahk politician “hired a lobbyist, and English-speaking former Soviet Army counter-intelligence officer named Rinat Akhmetshin [and] the skilled Akhmetshin burrowed in with Washington reporters, think tank experts, administration bureaucrats, and key political figures”); Plaintiff’s Complaint, International Mineral Resources B.V. v. Rinat Akhmetshin, et al., No. 161682/2015, 2015 WL 7180277 (N.Y. Sup.) (“Akhmetshin is a former Soviet military counterintelligence officer who moved to Washington, D.C. to become a lobbyist.”). [16] Isaac Arnsdorf, From Russia, With Love?, Politico (Aug. 17, 2016). [17] Mike Eckel, Russian ‘Gun-For-Hire’ Lurks in Shadows of Washington’s Lobbying World, RADIO FREE EUROPE/RADIO LIBERTY (July 17, 2016). [18] Id.; Plaintiff’s Complaint, International Mineral Resources B.V. v. Rinat Akhmetshin, et al., No. 161682/2015, 2015 WL 7180277 (N.Y. Sup. Ct.).

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