Lobbying for state-controlled firms – or the controlling states?

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April 8, 2016 by AK

John Schindler has denounced the Podesta Group, whose CEO Tony Podesta is an influential Hillary Clinton backer, for contracting to lobby on behalf of Sberbank “on the scope of U.S. sanctions against Russia for its role in the Ukraine conflict and whether relief is possible.”

I agree that the Podesta Group is now acting on behalf of Russia, not merely of a Russian company, and should label itself accordingly. However, Sberbank is not a monster from hell when compared with its Russian peers, and the brothers Podesta are not monsters for serving it when compared against their peers in the lobbying business.

Sberbank is a publicly traded company. Russia owns 51% of its common stock. It is the not merely the country’s largest bank by assets or equity but the one with by far the largest retail network. As such, it cannot avoid acting on the Kremlin’s wishes in certain cases, increasingly common these days. It could be a good idea to change the US law to compel influence peddlers hired by major state-controlled firms such as Sberbank to re-register as lobbyists for the respective governments.

If I understand correctly, some of the Russians’ Panamanian schemes were akin to this joke: A little girl comes to a grocery with a jar and asks the shopkeeper to fill it with honey. Then she declares she has no money to pay for it. The angry shopkeeper pours out the honey and hands the jar back to the girl. “Daddy was right: some has stuck.” Sberbank may have played a helpful grocer.

But there is no need to demonize Sberbank beyond what it deserves by virtue of being controlled by the regime currently controlling the Kremlin. (Leaving aside the question of whether a state-owned bank is an absurdity in itself.) Ask a banking analyst covering Russian stocks and you’ll probably hear that Sberbank has grown more efficient and transparent under German Gref’s guidance, so it is now the most decently managed state-controlled bank in Russia. It’s running a real, old-fashioned savings and loans business while certain Russian banks thrive merely on servicing other state firms.

If Schindler is looking for “top-level money laundering of a brazen kind,” he would be well advised to look at other Russian enterprises and the Americans who work for them. For example, the Republican Trent Lott, a former Senate majority leader, is a lobbyist for another major Russian bank. Incidentally, he supports John Kasich. Technically, his client is not even majority state-owned. I guess that lets Lott off the hook. Yeah right.


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