A prominent law firm whose work has come under scrutiny in U.S. Special Counsel Robert Mueller’s Russia probe reached a settlement with federal prosecutors on Thursday, acknowledging it should have registered as a foreign agent for a 2012 report aimed at discrediting a former prime minister of Ukraine.
Skadden, Arps, Slate, Meagher & Flom LLP agreed to turn over $4.6 million, the amount it was paid for the report, and retroactively register as a foreign agent as part of the deal with the U.S. Justice Department.
The department said in a news release that a Skadden partner in 2013 had provided false statements to agents overseeing foreign lobbying disclosures, masking “that its report was part of a Ukrainian foreign influence campaign.”
One former Skadden lawyer, Alex van der Zwaan, has already been caught up in scrutiny over the report, serving 30 days in prison last year for lying to FBI agents. He had worked on the report for Paul Manafort and Rick Gates, two senior officials in Donald Trump’s 2016 U.S. presidential election campaign who have also pleaded guilty in connection with Mueller’s Russia probe.
Skadden said in a statement that the settlement brought “closure with the U.S. government” on the matter and vowed to take steps to “prevent anything similar from happening again.”
The deal highlights the outsize role the Foreign Agents Registration Act – a rarely prosecuted law requiring disclosure of advocacy work on behalf of foreign interests – has played in Mueller’s investigation and a series of spin off probes.
Manafort, Gates, former national security adviser Michael Flynn and his ex-business partner Bijan Rafiekian, and political consultant Samuel Patten were all ensnared by inquiries that in part focused on possible violations of that law.
Skadden produced the 187-page report in 2012 at Manafort‘s behest. Ostensibly it was meant to be an objective review of the Ukrainian government’s prosecution of Yulia Tymoshenko, the country’s former prime minister who was convicted in 2011 on corruption charges and sentenced to seven years in prison.
But in reality the report was used by the government of Viktor Yanukovych, who was then one of Manafort‘s main clients, to justify Tymoshenko’s pretrial detention to the European Court of Human Rights, as well as to influence U.S. lawmakers.
While the Ukrainian government disclosed a $12,000 contract with Skadden, the law firm was covertly paid $4.66 million by a Ukrainian businessman through a Cypriot bank account controlled by Manafort. Skadden also advised Ukraine on a second potential prosecution of Tymoshenko, the Justice Department said.
“The arrangements with the Ukrainian business person, the amounts paid, and advice on a second criminal prosecution of Tymoshenko were not disclosed in connection with the issuance of the Report,” the Justice Department said in its release.
One of the leading Skadden partners involved in producing the report was Gregory Craig, who once served as White House counsel for President Barack Obama. Craig left Skadden last year. Former Republican Congressman Vin Weber with the Mercury lobbying firm and prominent Democratic lobbyist Tony Podesta, brother of longtime Clinton and Obama adviser John Podesta, were also engaged at one point or another to represent the same Ukrainian political faction that had hired Manafort.
Last year Mueller referred investigations into the Ukraine-related work of Craig, Weber and Podesta to federal prosecutors in Manhattan, according to multiple media reports. James Margolin, a spokesman for the U.S. Attorney’s office in Manhattan, declined to comment.
While the Justice Department’s release on Thursday did not name the partner who allegedly provided false information to investigators, they were almost certainly referring to Craig, said Renato Mariotti, a former federal prosecutor in Illinois.
As part of the settlement, Skadden agreed to continue to make its employees available for interviews or testimony, including before any federal grand juries or trials.
Mariotti said the settlement appeared to be “setting the stage for Skadden to cooperate against Gregory Craig.”
Craig, Weber and Podesta did not respond to requests for comment.