In June 2016, Manatos emailed Fried — the State Department veteran and sanctions policy coordinator — about meeting with Kostin that month.
“Good to be interacting with you again, after so many years, in your new capacity,” Manatos wrote, before requesting a meeting “to introduce to you the President and Chairman of VTB Bank, Andrey Kostin.”
Manatos continued: “He is happy to answer any questions you might have about VTB, including the state’s role in its operations, the efficacy of the sanctions on VTB, and VTB’s record in Ukraine. Simply, he would like to begin a constructive dialogue so that when sanctions are eventually lifted, VTB can become a trusted institution in the United States. I think you will find him interesting and engaging. His insights and perspectives might be unexpected.”
Fried immediately forwarded the request to colleagues at the State Department who worked on Russia. After some back and forth, he offered the meeting, writing colleagues, “Manatos may regret having set up by the time I’m through with VTB.”
Fried has since left the State Department, and is now a distinguished fellow with the Atlantic Council, a think tank that specializes in international affairs.
“I was sort of the bad guy and they were interested in sizing up the adversary, I suppose,” Fried said of the meeting during a recent interview with the Center for Public Integrity.
Fried said he told Kostin and the lobbyists accompanying him — Manatos and Sidley Austin’s Borden — that the sanctions would stay in place until the Ukraine situation was resolved in accordance with what is known as the Minsk accords, a negotiated roadmap for resolving the conflict.
“We can’t move the goalposts,” Fried said.
“I was perfectly civil with Kostin, but I was going to tell him what I think he was and why. He has a perfect right to know. He may be reporting back to the Kremlin. I assume he was, but good for them to hear directly from the United States,” he added.
Kostin and Paul Swigart, the head of VTB’s U.S. operations, also met with staff members of the House Foreign Affairs Committee.
A Democratic congressional aide to the House Foreign Affairs Committee, who wasn’t authorized to speak on the record about the meeting, said, “It’s safe to say that was not a meeting that ended on a friendly note.”
Nonetheless, Kostin and his lobbyists also scored meetings with Rep. Eliot Engel of New York, a Democrat who is the ranking member of the committee, and Rep. Jeb Hensarling of Texas, the Republican chairman of the House Financial Services Committee.
According to the aide, Engel was unimpressed. Engel subsequently sponsored legislation calling for stiffer sanctions on Russia. Hensarling’s office did not respond to requests for comment.
Manatos & Manatos filed disclosures with the Department of Justice covering June 2016 to November 2016 and replied “no” to a question asking whether the firm had engaged in political activity. The firm did disclose it had “helped arrange for meetings with select U.S. policymakers.” It didn’t identify them.
But in June 2017, six months after the initial disclosure was filed, Manatos & Manatos moved to correct the record. The firm filed a new report disclosing all the contacts and meetings constituting political activity, providing copies of emails and thank you notes from Kostin.
Sidley Austin, for its part, amended its report in August 2017 to disclose its “political activity” in June 2016.
“The following should be added,” the firm wrote, adding that Borden had actually met with “staff members from the Senate Foreign Relations Committee, the House Foreign Affairs Committee, State Department Coordinator for Sanctions Policy Dan Fried, Rep. Eliot Engel and Rep. Jeb Hensarling to discuss the impact of U.S. sanctions on Russia institutions.”
Sidley Austin’s Mullins confirmed the amended report was prompted by a call from the Center for Public Integrity last summer.
Mullins said the retroactive filing was one of “two minor oversights” in the firm’s FARA filings. The other: the firm said it would also amend its disclosures, in response to questions from the Center for Public Integrity, to reflect a $2,700 campaign contribution Madison made in 2016 to Clinton. Lobbyists are required to publicly disclose campaign contributions on FARA filings.