Friday, July 19, 2024
 
 

Former US Senators Lobby For Gazprom

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It has never been the case that business and politics are separate, especially when it comes to Russia.

Gazprombank, which is owned in part by Russian gas monopoly Gazprom, has hired former US Senate Majority Leader Trent Lott and former Senator John Breaux to lobby on its behalf in Washington. The news comes via a recent disclosure filed with the US Senate.

Gazprombank is Russia’s third largest bank and the target of Western sanctions. The former lawmakers are attempting to persuade the US government that it should lift the restrictions placed on a subsidiary of Gazprombank. As of the end of 2013, Gazprom owned 35.54% of shares in Gazprombank. Gazprom also funds much of its activities, according to Gazprombank’s financial statements.

In July, several countries blocked the bank from raising long-term capital in Western financial markets in response to Russia’s role in eastern Ukraine.

“Political climate has changed pretty substantially in the course of a year and so the kind of representation that Gazprom is going to get from Breaux and Lott seems to be more critical now than it would have been a year or two ago,” Jeffrey Mankoff, fellow and deputy director of the Russia & Eurasia Program at the Center for Strategic and International Studies (CSIS) in Washington DC, told New Europe by phone on September 4.

If the goal of the sanctions is to extract a price or punish Russia, they seem to be working. “The impact on investment and the currency and everything else has been real and substantial,” Mankoff said. “If the goal is to end the fighting in Ukraine and Russia’s interaction in Ukraine, they haven’t succeeded and I don’t think a lot of us ever had much expectation it was going to succeed,” he said, adding that sanctions is an attractive policy response because they are easier to do than anything in the security field.

Gazprom controls the flow of much of Europe’s natural gas. It has been at the center of growing international discussions about diversifying Europe’s energy supply to lessen reliance on Russian gas in light of Moscow’s suspected backing of rebels in eastern Ukraine and Russia’s illegal annexation of Crimea.

However, the US can choose to punish Gazprom more easily than the Europeans can. But Mankoff said Washington is reluctant to impose sanctions on Gazprom because Russia’s retaliation would likely affect Europe. “The Europeans are quite worried about that, which is why so far you had sanctions on Rosneft, on Novatek, on a lot of the energy industry in Russia but not Gazprom,” Mankoff said.

In August, Novatek, Russia’s second-largest gas producer, retained Washington DC PR firm Qorvis to lobby the US administration and Congress after one of its largest shareholders, Gennady Timchenko, a member of Russian President Vladimir Putin’s inner circle, was targeted by US sanctions.

In order to protect Russia’s Gazprom, Moscow appears to exploit the so-called “revolving door” in Washington “where people move from government to the private sector where they take advantage of the contacts they got in government to basically prostitute themselves to the highest bidder,” Mankoff said. “Now whether Breaux and Lott are doing anything wrong I suppose depends on your view of that system.”

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Previously on Energy Insider:

Putin to Ukraine: I’ll see you in court

Needing Russian Gas, Italy Puts On EU’s Kid Gloves

Russia Says Serbia Linked In To South Stream

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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