Amid the war in Ukraine, PR firms defend Russian-tied clients

Wealthy businessmen rely on the firms to avoid an "oligarch" label.

A large home owned by Ukrainian-born businessman Leonard Blavatnik stands along East 63rd Street in Manhattan. | Spencer Platt/Getty Images

By HAILEY FUCHS-04/26/2022 

Leonard Blavatnik, a Ukrainian-born businessman whose name graces Harvard Medical School and a part of Carnegie Hall, amassed his wealth, in part, from the privatization of oil and aluminum after the fall of the USSR. Over time, he worked alongside a number of oligarchs currently sanctioned by the EU or the U.S. for their ties to the government of Russian President Vladimir Putin.

But as Russia has launched a bloody and internationally condemned invasion of Ukraine, Blavatnik has gone to some lengths to ensure that his name isn’t dragged into the matter, working through a public relations firm to make sure the press corps does not tie him to the Kremlin or describe him as an oligarch.

Blavatnik is one of several wealthy businessmen who have turned to public relations professionals to help navigate press coverage emanating from Russia’s assault on Ukraine. It has created a unique business opportunity for Madison Avenue and beyond. Whereas K Street and some law firms have worked to distance themselves from Russian interests — cutting connections with Kremlin-tied businesses — PR professionals have stepped in to help illuminate the distinctions between those businessmen tied to Putin and those who want nothing to do with him, according to interviews and emails.

In a statement to POLITICO, Hill+Knowlton Strategies, a firm whose clients include Saudi Arabia, confirmed its work for Blavatnik’s company and foundation. The firm maintains both entities are American.

Hill+Knowlton is not alone among firms defending their clients with Russian ties. The firm JConnelly, for example, until recently worked on behalf of ARETI International Group, founded by energy tycoon Igor Makarov. The Canadian government last week sanctioned Makarov among others on a list of “close associates of the Russian regime, including Russian oligarchs and their family members.” The list included Putin’s two adult daughters.

And Lanny Davis, a Democratic operative who served as special counsel to President Bill Clinton, continues to represent Dmytro Firtash, a Ukrainian businessman who made billions as a middleman for the Russia state-controlled gas company Gazprom. (Davis, on behalf of Firtash, denied ties to the Kremlin, denounced Russia’s invasion of Ukraine and maintained that Firtash has not worked with Gazprom for years).

None of the individuals are sanctioned by the U.S. government, though Firtash is fighting extradition to the United States on an indictment in a foreign bribery and racketeering case. Through intermediaries, all are trying to mitigate coverage that places a new spotlight on the business dealings that led them to amass fortunes but put them closer to the Russian government.

Even a member of Congress, Rep. Steve Cohen (D-Tenn.), has called for some kind of penalty for who he calls oligarchs’ “Western enablers.” In a letter to Secretary of State Antony Blinken, Cohen asked the administration to “place travel bans on foreign enablers of Russian oligarchs” as deterrents, although his list focused on U.K. lawyers.

Public relations professionals do not seem to be shying away from the challenge, said Casey Michel, an adjunct fellow at the Hudson Institute’s Kleptocracy Initiative and journalist who has written about Russian-tied billionaires, including one story that led to his own confrontation with at least one of their PR teams.

“At the 10,000 foot level, the broader strategy is that these guys are tasked with white-washing — or spinning or laundering or whatever term you’d like to use — the reputations for these figures,” he said.

Sometimes that means ensuring “investigative journalists or authorities or regulators don’t look too far into the provenance of their funds … [or explain] why they shouldn’t be described as oligarchs in the first place,” he said.

One figure stood out in particular for Michel: Blavatnik, whose team has been “very direct and very aggressive in pushing back on that framing that he is an oligarch,” he said.

On April 1, Michel received an email from Verity Dephoff, a managing director at Hill+Knowlton, titled “Urgent correction request.” The note complained that Michel failed to ask Blavatnik’s firm, Access Industries, for comment or clarification for his recent story, “How Russia’s Oligarchs Laundered Their Reputations in the West,” in New York Magazine. Dephoff pointed to a quote from Russian opposition leader Alexei Navalny saying Blavatnik was not a “political oligarch.” In his email, Dephoff also denied Blavatnik has ever “been involved in the Russian government or any connected political spheres” and emphasized that Access Industries had provided “hundreds of jobs to Americans.”

Blavatnik has been an American citizen for nearly 40 years. His investments include Warner Music Group, the luxury fashion company Tory Burch and chemical company LyondellBasell. But a number of entities, including universities and politicians, are taking heat for accepting his donations in the aftermath of the Ukraine invasion.

Hill+Knowlton said in a statement that it works with the Blavatnik Family Foundation and Blavatnik’s firm, Access Industries, a “U.S. company headquartered in New York.”

“Virtually all of its portfolio is in U.S.-based investments in real estate, chemicals and natural resources, technology and media,” the statement said about Access. “The foundation is a U.S. charity that assists scientists in early-stage health care research. It also supports the arts, universities and international schools of business and government.”

Hill+Knowlton also forwarded a number of Access statements regarding its founder’s business dealings. In one, Access described the term oligarch as “a seriously laden term that carries a specific authoritative definition, especially in today’s war environment in which Russian elites have been targeted for government scrutiny.” It also noted Blavatnik has not been sanctioned in the United States, United Kingdom or European Union, and that he is not involved in Russian politics or the Russian government.

In a later statement, Hill+Knowlton also maintained it would not represent a sanctioned individual or entity and that it discontinued its operations in Russia as a result of Russia’s invasion of Ukraine.

Other companies are also defending their work. In an April 18 interview, JConnelly CEO Ray Hennessey said the firm had done work on behalf of ARETI Group — Makarov’s current company. Makarov has a history of business dealings with Rosneft or Gazprom, Russian state-controlled companies. But Hennessey added: “If you’re going to even insinuate that in some way we’re working with people with ties to Putin, who is waging a war overseas … [if that’s not] per se defamatory, I don’t know what is.”

Amid communications with POLITICO, the Canadian government sanctioned Makarov, whom the U.S. Treasury Department listed in 2018 as a Russian oligarch.

JConnelly responded to the development with a statement Monday saying it does not represent Makarov, his entities, nor “anyone designated by The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury or any G-7 nation as a ‘sanctioned person.’”

Davis registered his work under the Foreign Agents Registration Act. According to a filing with the Department of Justice, Davis’ firm, Davis Goldberg & Galper, was paid $150,000 to do work for Firtash for the six-month period ending on Oct. 31. During that time, the firm spoke with or emailed journalists across many publications, including The New York Times, NBC News and POLITICO, per the filing. Among the topics were Firtash’s case and “Ukraine sanctions.” Firtash was sanctioned by Ukraine for allegedly supplying materials to Russian military enterprises, which Davis has denied on behalf of Firtash.

On a number of occasions, Davis’ firm attempted to “correct the record” with journalists, according to the filing. In recent weeks through public statements, Davis has sought to position his client as a champion of Ukraine, someone who has asked to return to his homeland “in the defense of his country.”

But Ben Freeman, a research fellow at the Quincy Institute for Responsible Statecraft who studies foreign influence, questioned firms that work for clients with potential ties to Russian leaders. He said he believes there was a reputational risk for firms, even if the client could be, in his words, “loosely characterized as a Russian oligarch.”

Davis noted that Firtash’s time working with Gazprom, the gas company, ended years ago and denied his ties to the Kremlin, emphasizing his client’s efforts to support Ukrainians amid the war. Davis stressed he was a defense attorney for Firtash, hired to correct the record in the media.

“Oligarch … usually has a connotation of corruption and association with Russia after the Soviet Union, where great wealth was corruptly gained,” Davis said. “That has nothing to do with Firtash.”