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WASHINGTON -- Tony Podesta, a Democratic power lobbyist, announced to colleagues Monday that he is stepping down amid a series of indictments that cast a shadow on work his firm had done with Paul Manafort.

The Podesta Group is not named in the newly released indictments, but the company is one of two indirectly referred to in the charges. Podesta and another lobbying firm, Mercury Public Affairs, were working with Manafort and his partner Rick Gates from 2012-14 in lobbying to improve the image of a Ukrainian regime that was friendly with Russia. In the indictment, the firms are referred to as "Company A and Company B," according to people familiar with the companies' involvement.

Podesta announced his resignation at a staff meeting at the Podesta Group's Washington headquarters.

"It is impossible to run a public affairs firm while you are under attack by Fox News and the right-wing media," he told his former employees, according to a person familiar with his remarks.

[DOCUMENT: Read the indictment charging Manafort and Gates]

Podesta is the brother of John Podesta, a longtime Democratic adviser who led the presidential campaign of Hillary Clinton. The resignation of one of Washington's most prominent Democratic lobbyists shows how the investigation of special counsel Robert Mueller is reverberating throughout both parties.

It's unclear how much the Podesta Group or its principal founder knew about the funding for the client they represented.

The Podesta Group and Mercury claimed in lobbying disclosure reports that they represented a Brussels-based nonprofit, the European Center for a Modern Ukraine, that sought to help Ukraine improve its image around the world. However, the indictment alleges that the lobbying work was being directed by Manafort and Gates on behalf of the government of Ukraine. Gates and Manafort for many years represented the Party of Regions, a Russia-friendly political organization in Ukraine that was led by Viktor Yanukovych, former president of the Ukraine who fled to Moscow in 2014.

"In 2012, Manafort and Gates solicited two Washington DC firms (Company A and Company B) to lobby in the U.S. on behalf of Yanukovych and the Party of Regions, and the Government of Ukraine," the indictment said.

The Podesta Group fully disclosed its representation of the European Centre for a Modern Ukraine and complied with federal disclosure laws "by filing under the lobbying disclosure act over five years ago," said Molly Levinson, a spokesman for the firm, in a statement.

"The Podesta Group has fully cooperated with the Special Counsel's office and taken every possible step to provide documentation that confirms compliance with the law," Levinson said, adding that the company's work was in support of Ukraine's admission to the European Union.

A Mercury partner, Michael McKeon, issued a statement Monday afternoon acknowledging the firm's representation of the European Center for a Modern Ukraine and saying its goal was to align Ukraine with western democracies.

"Mercury takes its obligations to follow all laws, rules and regulations very seriously. Mercury has and will continue to fully cooperate with the Office of the Special Counsel," he wrote.

While claiming that the European Center for a Modern Ukraine was the client, that organization was actually "under the ultimate direction of the Government of Ukraine, Yanukovych and the Party of Regions ...," the indictment said. "Company A and Company B were paid for their services not by their nominal client ... but solely through off-shore accounts associated with the Manafort-Gates entities."

The Podesta Group and Mercury came into focus for prosecutors as they delved deeply into Manafort's finances earlier this year.

A Section on 10/31/2017

Print Headline: Democratic lobbyist tied to Manafort steps down

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  • RBear
    October 31, 2017 at 6:57 a.m.

    Another casualty of the indictments. Podesta's problem is that he may not have known where the work was funded. I'm familiar with this kind of action. Doing work for a PR firm in San Antonio, I was asked to target some particular issues against San Antonio City Hall. The work didn't seem very ethical, so I did some digging and found the funding source. It was a hit job by the local police union against the city who was renegotiating their contract. I parted ways with the firm.
    Manafort and Gates were apparently pulling the strings without telling the Podesta Group who was funding the activities. But of course, those details mean nothing when you're a news organization trying to protect the president and other right wingers.