According to a Washington Post investigation, an increase in US sanctions has resulted in the formation of a new lobbying business in Washington, where former officials are recruited by oligarchs, corrupt governments, and corporate interests to influence economic sanctions. Considerable sums from overseas are coming to former politicians and aides, particularly those with Treasury expertise.

An analysis of Justice Department files indicates that foreign spending on sanctions-related lobbying has increased from around $6 million in 2014 to at least $31 million in 2022, mirroring the growth in US penalties.

Domestic corporations spent more than $353 million lobbying in 2022, up from $97 million in 1998. Sanctions compliance barely existed 20 years ago, and now it generates more than $30 billion annually, growing at a 10% rate yearly. 

Former lobbyists claim their purpose is to aid the wrongfully accused and serve national interests rather than influencing policymakers.

Multi-million dollar contracts to prevent sanctions

The rise in foreign and corporate expenditure on sanctions-related lobbying in Washington has resulted in the formation of a new influence sector, according to The Post.

As per interviews and federal lobbying records, large monies are pouring to long-time power brokers such as former FBI director Louis Freeh and former Attorney General Michael Mukasey, as well as retired congressmen Tom Daschle and Trent Lott. At least 190 former US officials currently work for lobbying companies that specialize in sanctions.

The report details multiple instances where foreign businesses, including a Chinese surveillance firm and a government accused of ethnic cleansing, who gave multimillion-dollar lobbying contracts to prevent or remove sanctions. While it is impossible to clearly link lobbying to individual sanctions decisions, the growing interweaving of power and money has raised fears that "US foreign policy can be shaped by the highest bidder," a notion shared by officials.

Concerns about the rising impact of the sanctions lobbying business have spurred some White House officials to explore imposing harsher "cooling off" periods for former government officials transitioning to private sector employment, particularly those with possible conflicts of interest. The sanctions sector continues to grow, fueled by the growing number of individuals, businesses, and governments facing economic sanctions. 

The Post emphasizes that the US imposed over 3,000 sanctions in each of the previous two years, a major increase from the hundreds imposed in the early 2000's.

Working for the bad guys

While the Treasury Department spokesperson asserts that sanctions decisions are based on "careful analysis," critics like James S. Henry argue that a powerful network of lobbyists undermines the impartial enforcement of these penalties.

“The highest paid, most sophisticated law firms in the world are all working for the bad guys,” Henry noted.

Former FBI director Louis Freeh, who now represents various clients in sanctions matters, exemplifies how lobbyists can impact the implementation of financial penalties intended to uphold U.S. national security and foreign policy objectives.

In 2018, Freeh advocated on behalf of Israeli millionaire Dan Gertler, who had been sanctioned by the United States for fraudulent transactions in the Democratic Republic of the Congo, resulting in major financial losses for the country. Despite this, Freeh's lobbying efforts, together with those of Alan Dershowitz, resulted in the Trump administration lowering some of Gertler's penalties in early 2021, before being reinstated by Joe Biden.

Freeh also represented a Kuwaiti private equity business pursuing sanctions on officials who jailed one of its executives, as well as a Swiss mining company harmed by US sanctions in Guatemala. While certain lobbying efforts must be declared, some are not, raising questions about former officials' impact. In 2021, Freeh attempted to ease sanctions against Venezuelan financier Leonardo González Dellán, who was accused of major corruption, but the sanctions stayed in place.

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When asked if he had represented any foreign firms in sanctions-related situations, Freeh declined to respond, saying he had always declared or registered his work with US agencies "where it was required."

Lawyer Alan Dershowitz, a member of Donald Trump's impeachment defense team,  has represented an Iranian dissident faction and Israel Ziv, an Israeli former general and businessman who was sanctioned by the Treasury and accused of enabling $150 million in armament sales to the South Sudanese government.

The administration eased sanctions against Ziv in February 2020, and Dershowitz reported feeling proud of his work. 

Other officials have also dipped their toe in the field. Michael Mukasey, former attorney general under George W. Bush, represented a Turkish gold trader accused of violating US sanctions on Iran. John Ashcroft's firm specializes in helping clients navigate sanctions. Thomas E. Donilon, former national security adviser under Obama, focuses on sanctions at his law firm, while David S. Cohen, ex-CIA deputy director, advises clients on financial sanctions.

The expanding sanctions regime creates lucrative opportunities for former officials, including Tom Daschle, whose firm received $200,000 from Venezuela’s opposition leaders to prevent the sale of state-owned oil assets. Some lobbying efforts aim to impose sanctions on competitors, as seen when ex-senator Norm Coleman lobbied for tighter sanctions against Belarus on behalf of Intrepid Potash.

Following a prolonged lobbying campaign by Belarusian leader Lukashenko, the US sanctioned Belarusian potash firms in 2021, causing global potash prices to spike. Intrepid Potash paid $1.5 million to lobbyists, including Coleman.

Sanctions being thrown like 'peanuts to birds'

Coleman also represented ZTE, a Chinese firm that admitted to violating sanctions, earning over $6 million from them. Other US companies have sought sanctions against competitors as well. For instance, Alcoa pushed the White House to sanction Russian aluminum companies after the war in Ukraine, spending over $1 million on lobbying. According to The Post's analysis of Justice Department records, in the past six years, US firms have spent more than $1 billion on contracts targeting Chinese competitors under the guise of sanctions, often combined with other lobbying goals.

Hikvision has significantly increased its payments to former senator David Vitter's lobbying firm, totaling $3.5 million since 2022, despite the firm's sanctions by the US government. Meanwhile, Gazprombank hired the lobbying firms of former senators Trent Lott and John Breaux for $1.5 million to address regulations and sanctions following the Treasury's sanctions in 2014.

In 2019, Zimbabwe hired former Trump fundraiser Brian Ballard for $450,000 a year to seek relief from economic sanctions, which it ultimately did not receive during Trump's presidency. Although the Biden administration ended the Zimbabwe sanctions program, it imposed new penalties on various leaders from the country. The growing trend of poor nations hiring Washington lobbyists for sanctions relief diverts critical resources from essential public services like schools and hospitals,

According to W. Gyude Moore from the Center for Global Development, when poor nations hire Washington lobbyists "that’s money that’s not available for schools, for hospitals,” comparing the sanctions implementation to throwing "peanuts to birds."

Azerbaijan also lobbying

Additionally, nations at war, such as Azerbaijan, also increase lobbying expenditures, exemplified by a $666,664 retainer paid to lobbyist Ezra Friedlander just before launching a military attack in August 2023.

In the wake of international backlash, lobbyist Ezra Friedlander worked to prevent sanctions against Azerbaijan, emailing lawmakers and facilitating meetings between the Azerbaijani ambassador and congressional officials. Friedlander defended Azerbaijan's actions regarding Nagorno-Karabakh, asserting the country was justified in defending its territory. In 2023, Azerbaijan paid Friedlander about $1.7 million, with no sanctions imposed against it.

Similarly, Cambodia contracted former Washington State Senator Doug Ericksen and ex-representative Jay Rodne for $500,000 a year in 2019 to fend off sanctions against it. Despite the White House's assessment that Cambodia's elections were "neither free nor fair," Ericksen publicly praised their transparency. The regime utilized Ericksen's title to project legitimacy, suggesting they had backing from a US senator.

The United Arab Emirates (UAE) has effectively navigated the sanctions system, leveraging its vast oil and gas reserves to attract arms dealers, mobsters, and corrupt officials, according to the Washington Post. The country has been “a transshipment point for illegal narcotics and a pass-through for drug proceeds” laundered through banks and real estate, according to the State Department.

Recently, the UAE emerged as the largest importer of illegal African gold, particularly from war-torn Sudan, raising concerns about its role in fueling the Sudanese civil war through arms sales. Despite these issues, the UAE government remains unsanctioned, a situation highlighted by Georgetown University professor Jodi Vittori, who says in other circumstances "much of the regime would be sanctioned."

In part, experts and former officials said, that is because the country is a key U.S. ally, hosting an air base in the region. The UAE also has spent $193 million on Washington lobbyists between 2016 and 2023, a Post analysis found.

Cameron Hudson, senior fellow in the Africa Program at the Center for Strategic and International Studies says Emirate money is "Washing over Washington," calling it an insurance policy and noting that lobbyists are "really good at preventing things from happening.”

The Camstoll Group, featuring former Treasury sanctions officials, has earned over $75 million from a UAE-linked company since 2012, advising on illicit financial activity. 

Additionally, the UAE has paid $38.2 million to the law firm Akin Gump, which includes former House Ethics Committee chair Lamar Smith among its representatives for sanctions work.