The threat of serving hard time for failing to disclose foreign lobbying work is rattling Washingtons multi-billion dollar influence industry following Mondays 12-count indictment against Donald Trumps former campaign chairman Paul Manafort and his deputy, Rick Gates.
And although the charges have largely been seen as a blow to the White House, Mondays actions by special prosecutor Robert Mueller also sent shivers down the spines of Washingtons lobbyists, both Democrats and Repulicans.
Its a swampy place, and the swampy stink knows no partisan allegiance, said one senior Democratic congressional aide.
Manafort and Gates, who allegedly failed to disclose the full extent of their work on behalf of the pro-Russian Ukrainian Party of Regions, are now being charged under the Foreign Agents Registration Act, a 1930s era law aimed at curbing the influence of pro-German propaganda ahead of World War II.
In the last half century, the Justice Department has brought only a handful of enforcement actions against lobbyists for violations of FARA. That lack of prosecution resulted in a proliferation of under-the-radar lobbying. Now Washingtons cottage industry of consultants and public affairs specialists can only wonder if that era has come to an end.
The indictment of Manafort is sending shockwaves through K Street and the FARA Unit at the Department of Justice, said Craig Holman, a government affairs lobbyist at Public Citizen, a group that supports government transparency. The Justice Department largely neglected its role in the administration of FARA, which emboldened many lobbyists to ignore the law and opt to register under the weaker disclosure regime of the Lobbying Disclosure Act, if at all.
Mondays indictment cites two lobbying firms hired by Manafort and Gates to lobby on behalf of a Ukrainian party. Though it only refers to the firms as Company A and Company B, news outlets have identified them as Mercury Public Affairs, a Republican heavy firm, and the Podesta Group, a Democratic lobbying powerhouse run by Tony Podesta, the brother of Hillary Clintons campaign chairman, John Podesta.
The indictment says the two firms received more than $2 million through offshore accounts linked to Manafort and Gates for former Ukrainian president Viktor Yanukovych.
"At the direction of Manafort and Gates, Company A and Company B engaged in extensive lobbying," the indictment charges. "They lobbied multiple members of Congress and their staffs about Ukraine sanctions, the validity of Ukraine elections, and the propriety of Yanukovychs imprisoning his presidential rival."
On Monday, Tony Podesta resigned from his firm and relinquished control of the company to CEO Kimberley Fritts, Politico reported.
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One outcome of Muellers charges could be better compliance by Washington lobbying firms on FARA issues, said the Democratic congressional aide. The irony is that Trump may inadvertently help drain the swamp, the aide said. I hope it strikes fear into folks because this has become absurd, and its an equal opportunity problem in terms of political parties.