Is an ex worth a second chance?

The beginning of exodus of foreign companies from the Russian market in February 2022 triggered the first discussions on Western media regarding the moral acceptability of “forgiving” such companies for their role in helping Russian businesses root in Europe for decades. In particular, the discussion was focused on the partners of Gazprom and Rosatom which assisted in the purchase of gas and nuclear fuel, exchange of assets, and the construction of nuclear waste repositories, oil pipelines and nuclear power plants. Lobbyists, PR and public communications consultants also came under fire. If a company pulled out of the Russian market completely or “suspended” its operations or put them “on hold”, which is typically the case, would it be safe to expect it to resume business as soon as things go back to normal (e.g. the war is over or the sanctions are weakened or lifted altogether)?

This section covers a number of categories of “exes” whose representatives have also been added to our “Atlas of Russian Lobby in Europe”. Those are officials and politicians who assisted in the promotion of Russia's megaprojects such as Nord Stream gas pipelines at the national and regional levels, and paved way for the mutual penetration of businesses of the both countries which, in reality, meant becoming dependent on Russia. We also wanted to shed light on the PR and lobbyist companies which worked on the projects of the Russian government and its largest companies with EU institutions for years promoting the necessary narratives and fostering relations. Moralities aside, those activities were primarily aimed obtaining the leverage to influence further political and economic processes.

“The pipelines of friendship”

To foster bilateral relations and promote its business in Europe, Russia relied on various formats of interregional partnership, set up intergovernmental business and cultural forums, and directly engaged the local elites to take part in its projects. The lobby network built by Gazprom and its subsidiaries around Nord Stream pipeline construction project, the largest of its kind in Europe, is, perhaps, the most vivid example. Russia started building the support networks as early as in the late 2000s when the idea of connecting Yamal and one of Germany's northern ports first came about. The network relied on the heads of states whose waters were crossed by the “stream” lines and the heads of German federal states who were promised economic benefits from the operation of the pipelines, the construction of new gas storage facilities and the upgrades to the existing ones.

The German-Russian Forum, the German Russian Raw Materials Forum, the German-Russian Friendship Group, the Petersburg Dialog project established to promote business networking, Zukunftgaz and WTZ industry associations and Ostinstitut Wismar which promoted Russia’s interests behind the front of economic research were all tasked with strengthening the bilateral relations.

The federal state of Mecklenburg-Western Pomerania became one of Russia’s footholds in Germany: the local authorities held regular Russia Day events and numerous festivals, and entered into contracts on interregional cooperation with Leningrad oblast, Gazprom's home region. The state also acted as co-founder of Hydrogen Hanseatic League which the media believe to be a disguised lobbying tool for the gas industry since the production of the climate-neutral “fuel of the future” would still rely on substantial consumption of fossil fuels — namely, natural gas. The current Minister President Manuela Schwesig got into a scandal with the so-called “Climate Foundation” (Stiftung Klima- und Umweltschutz MV). Whiile the declared aim of the organization was to promote environmental protection, it is now suspected of assisting the companies which took part in the Nord Stream project circumvent sanctions. In particular, the foundation received €20 million from Gazprom which the German press called ‘a direct bribe’ paid to Schwesig.

The exchange programs for the “young leaders” also played their role in strengthening bilateral contacts. The recent investigation by the German Correctiv has exposed a number of German officials who eagerly welcomed Russian forums at their organizations and communities and received sponsorship money from Gazprom and its affiliated companies. The list is quite lengthy: from the former mayor of Hamburg and the current Chancellor of Germany Olaf Scholz to the managers of state companies and German ministries.

The Germans were not alone as Austrian officials were also willing to cooperate with Russia. The Austrian-Russian Friendship Society (Österreichisch-Russische Freundschaftsgesellschaft, ORFG) used to play an active role in facilitating bilateral cooperation with an emphasis on promoting the interests of major Russian players. The society was a hub for the numerous lobbyists of Russians in the country. At present, the Austrian energy group OMV, Gazprom's key partner, sees hardly any possibility o pull out of the joint venture with Gazprom established to develop Yuzhno-Ruskoye field in Western Siberia which has been chronically loss-making. Curiously, ORFG also became the subject of a media investigation of the Wirecard scandal when the company's bankruptcy caused the shareholders to lose at €20 billion at the very least. Jan Marsalek, a Wirecard top manager, was a long-time ORFG member. Following the collapse of Wirecard, he is said to be on the run and allegedly hiding in Russia.

Italian officials were also instrumental in promoting Russian business and fostering relations with the Russian government. According to the leaked correspondence of a group of Russian lobbyists in Europe managed by Sargis Mirzakhanyan, which was analyzed by a number of investigative editorial groups, a delegation of Italian politicians and businessmen headed by regional legislator Stefano Valdegamberi made a visit to Crimea which was paid with Russian money. Russia's lobbyists wined and dined the Italian delegation in exchange for no small favor — their votes in support of partial or even complete lifting of sanctions. The efforts of Mirzakhanyan’s group resulted in the adoption of a resolution by the Italian regional councils of Veneto, Lombardy and Liguria calling to lift the sanctions which had been imposed on Russia for the annexation of Crimea. Similarly to the German federal state of Mecklenburg-Western Pomerania, the Veneto region represented by Valdegamberi became Russia's prime foothold in Italy.

The leaked correspondence also revealed that the lobbyist had been aiming to set up a new representation office of Russia in Venice with “a Crimea bureau as a sign of valued regional friendship and cooperation”. The issues discussed during the Crimean visit, among other things, included the possibility of joint projects between Italian and Crimean wine makers with the Italians facilitating the exports of Crimean wine to Europe. In particular, the Italians were so willing to assist in avoiding sanctions that they discussed buying a share in Massandra winery.

It also became known that while preparing for one of the Yalta forums, Valdegamberi sent an email to Mirzakhanyan with a proposal “to implement gambling in Crimea according to the Italian model in collaboration with a leading Italian provider” which was addressed to the governor of Crimea.

A few years ago, Swedish media published a detail analysis of the conflict of interest of the former Foreign Minister of Sweden Carl Bildt who was instrumental in fast-tracking the permits for the construction of the “streams” in Sweden's territorial waters due to the fact of his shareholding in a company related to Gazprom. Finland's former Prime Minister Paavo Lipponen advized Gazprom on the environmental matters related to Nord Stream until 2020.

Much like Gazprom, Rosatom was also active promoting its interests. At various times, the state nuclear energy operator had fuel and parts supply, reactor construction, and radioactive waster repository service contracts in Finland, Hungary, France, Slovakia, and the Czech Republic. Respectively, there were lobbyists of the Russian atom in all of those countries in addition to partner organizations. Both Gazprom and Rosatom lobbied for changes to the EU renewable energy legislation which would officially recognize nuclear energy and natural gas as “clean” energy in addition to the “real green” energy sources. Such move would slow down the transition to “green” energy due to an increased supply of that energy to the EU and contribute to its political and economic dependence on Russia.

PR for the devil

Most of the PR and consulting firms which provided services for Russian clients in the EU either withdrew from the Russian market or closed down their Russian branches or transferred ownership to their assets in Russia to their employees to operate under a different local brand. However, we feel that it is our duty to document those who assisted in building the foundation of the Russian influence in Europe for years which followed the annexation of Crimea until Russia’s full-scale invasion into Ukraine — and in what way.

The information on the links to Russia is stored in numerous reports of monitoring and trade organizations as well as on Lobbyfacts database which has been accumulating the data on all the lobbyists registered with the EU structures and their clients since the early 2010s. We have managed to identify about two dozen PR and GR firms which provided whitewash services for their Russian clients. Some of them have closed down while others have renamed their businesses. However, we would like to keep those records on our dataset in order to make the information on the dubious activities of the subjects searchable for future background checks.

Creating specialized websites, running shadow campaigns, organizing large conferences, whitewashing the images of select officials and helping them circumvent sanctions, lobbying interests with EU officials, ordering manipulative analytics to substantiate the benefits of Gazprom projects for the environment are just a few examples of the services provided to Russian clients by the EU’s PR industry.

G Plus (which later merged with Portland) used to be the most popular European PR contractor among clients from Russia. The firm represented the interests of the Russian government (which was represented by Ketchum in the United States) and Gazprom Export in the European Commission and the European Parliament and outsourced services from Dimap (Berlin), Reti (Rome), and Portland (London).

Here is a typicalbrief for the GPlus experts as detailed in one of the reports at the beginning of the Russia-Ukraine war:

“First on the list of PR challenges is the ongoing crisis in the Ukraine, which has caused Russia to be suspended from the G8. As the crisis reached its peak in April 2014, GPlus circulated a letter from Putin to the European press and heads of countries (mostly from the EU) dependent on Russian gas via Ukraine, threatening to cut off gas supplies via the country unless it started repaying a huge debt. GPlus explained that Putin’s “point is that Russia has been paying a huge price to stabilize Ukraine’s economy and the EU also has to play a part.”

Similar services were provided by the Swedish PR firm Kreab. “During the Crimean War, the agency's Moscow office published a monthly sanctions bulletin on how world sanctions were affecting Russian companies and the Russian state…. Among other things, it is written that “... the majority of Russian citizens say in a survey that they are not significantly affected by the sanctions", that Russian leaders condemn the EU’s punitive sanctions and that the sanctions and isolation mean that Russia is now strengthening its ties with China and Iran, “...countries that share Russia's criticism of American foreign policy” — this is how the firm's activities were described by the Swedish media group ETC.

Russian companies hired numerous lobbyists to promote their interests including, among others, Brunswick, Fleishman-Hillard, FTI Consulting Belgium, FIPRA International Limited, Kellen Europe, Curtis (Curtis, Mallet-Prevost, Colt & Mosle LLP), EPPA SA, Edelman Public Relations Worldwide, Nove, Acceleration Management Solutions S.A.M., Hudson Sandler, Sass Consulting AG, Hallvarsson & Halvarsson, and Rud Pedersen. The list of clients includes such whales as Lukoil, RUSAL, Nord Stream 2, Gazprom, Russian Railways, Aeroflot, Rosatom, Alfa-Bank and others.

For a long time, McKinsey used to be a major player in the consulting market for the Russian state-owned business. According to Business Insider, n 2010, the company touted Russian gas as “indispensable for German industry” and received about €50 million for completing almost 150 projects. The idea to put Gerhardt Schroeder on the supervisory bodies of Russian state corporations was also the brainchild of McKinsey consultants. The company is mentioned in the Correctiv investigation on the organization of German-Russian Young Leaders conferences lavishly sponsored by the Russian business to grease the cogs of EU lobbying. The current partner Nico Raabe is listed as a supervisory board member of the German-Russian Form, the co-founder of the German-Russian Young Leaders Association. The former chairman of McKinsey Deutschland Frank Mattern also played a prominent part in organizing the conferences. Furtermore, McKinsey also used to consult the Russian military-industrial behemoth Rostec while continuing to perform under its contracts with the US government which put the firm in the crosshairs of American media last year.

Lobbyist narratives are also promoted through European scientific institutions to further the interests of large Russian businesses. The German newspaper Die Zeit investigated the activities of the Institute of Energy Economics at the University of Cologne (ewi Energy Research & Scenarios GmbH), whose experts had done lobbyist research on the importance of Nord Stream 2 for the economy and environment of Germany and Europe. In particular, the researchers claimed that €25 billion savings are to be expected in the near future thanks to the construction and commissioning of the pipelines and low gas prices. The figure was immediately picked up by local officials who brandished it while arguing about the advantages of the project. The research paper has been removed from the institute website.

This overview covers only select aspects of the EU lobbying network of Russian business. The tabular part of the project is just the first step towards unraveling the network of companies and organizations which declared or have been declaring their interests in this area. Dozens if not hundreds of people, companies, public organizations and associations have likely managed to stay under the radar for the lack of mentions in open sources. Still, we hope that this material, which follows up on our earlier project “The Germs of Russian World”, offers a holistic view of the intensity and scale of the Russia's penetration into Europe's economy and politics.