The trouble with Steve Schmidt’s story about John McCain and Russia

Paul Manafort may have be the most well-known and least scrupulous of Putin’s little helpers in the West, but he’s far from alone.

Jun 01, 2022

Steve Schmidt has received a lot of criticism for his lengthy Twitter screeds recently, but one particular claim stuck out to me and warrants further scrutiny. Schmidt says that John McCain’s decision to pick longtime Paul Manafort partner Rick Davis as McCain’s 2008 campaign manager—and look the other way at Davis’s client history—essentially allowed Putin in to the Republican Party and inadvertently paved the way for Trump in 2016.

According to Schmidt—who was later brought into the 2008 campaign to effectively replace Davis—Davis was put in charge of McCain’s presidential campaign despite the well-known fact that Rick Davis’s lobbying work was done at the behest of the pro-Kremlin oligarch Oleg Deripaska who was working with Paul Manafort and Davis in Ukraine to prop up Putin’s preferred politician in that country, Viktor Yanukovych.

To be clear, Schmidt is right about the work Paul Manafort and Rick Davis did in Ukraine. They worked extensively for Viktor Yanukovych and at Oleg Deripaska’s behalf at the same time Davis was managing McCain’s 2008 campaign for President. Yanukovych was aligned with the Kremlin until he was forced to flee Ukraine in 2014 amidst the pro-Western Maidan Revolution. Yanukovych fled to Russia where he continues to live in exile with some of his closest advisors. All of this happened, but Schmidt claims he was appalled by Rick Davis’s and Paul Manafort’s work in 2008 during the McCain campaign and that this work somehow sunk John McCain’s campaign for President. Thus, in this simplistic sequence of events, McCain’s failure to stamp out this Russian effort somehow paved the way for Trump’s 2016 embrace of the Kremlin. It’s a rather convenient rewriting of history from the guy most people blame for McCain’s 2008 loss. Still, blaming Russia for anything these days and especially blaming the GOP and Russia collectively gets you a built-in fanbase of Democrats on Twitter. That’s who Schmidt is appealing to, and rather predictably, it’s working.

There’s an unspoken insinuation to Schmidt’s latest claims about John McCain and, more broadly, the behavior of the Republican Party in relation to the Russian government. It’s the idea of a grander, multi-year conspiracy of infiltration made possible by greed, corruption and all those who looked the other way while Putin’s influence gained an upper hand. However, such a conspiracy, if true, would require more than one man. It would require a series of individuals and firms taking Russian money and advancing policies deemed beneficial to Putin. If even John McCain must be called out for tolerating “his campaign chairman being in business and working for Putin,” then perhaps all those who tolerated that behavior must be called out as well.

In June 2010, the U.S. based global PR and communications firm Edelman (Daniel J. Edelman Inc., officially) announced that Steve Schmidt was joining the company as its new vice chairman, public affairs. The release noted that “Schmidt will serve as a senior strategic counsellor to Edelman on a global basis.” He reported directly to the President and CEO of Edelman U.S., Matthew Harrington, in this role. Schmidt remained with Edelman for eight years until departing in the summer of 2018.

There’s no evidence disproving Schmidt’s statement that he has “never lobbied for anyone. Have never work for a Russian anything.” You can’t find his name on any FARA paperwork for Edelman’s Russia work or any other country for that matter. If he did do any work for a firm on behalf of a foreign government, his name should be on the corresponding FARA paperwork, but as I said, it’s not there. I couldn’t find any mention of him at Edelman’s Moscow office (which was open from 2008-2015), or Edelman’s subsequent Russian affiliate company PRT which they bravely “temporarily paused” in March of this year, three weeks after Russia’s full-scale invasion of Ukraine.

With that out of the way, here’s the rub. FARA paperwork signed by Edelman in 2008 shows that Paul Manafort and Rick Davis hired an outside firm to help in their efforts to smooth over Viktor Yanukovych’s image in Ukraine. The firm they hired was Edelman, the same firm Schmidt joined two years later.

https://efile.fara.gov/docs/3657-Exhibit-AB-20080130-3.pdf

The initial agreement stipulated five months of work billed at a $35,000 a month with the contract set to extend for another twelve months if neither party terminated the contract before the end of the initial agreement on October 31, 2007. The paperwork indicates that Edelman stayed on “of counsel” to Davis Manafort International LLC and Viktor Yanukovych after the 2007 Ukrainian elections. The final termination date given for the contract was September 30, 2009.

Viktor Yanukovych was elected President of Ukraine after two rounds of elections held in January and February 2010. After Yanukovych’s election victory, members of his political party, the Party of Regions, credited Manafort with his victory. Four months later, Steve Schmidt joined Edelman as Vice Chairman.

If, as he claims, Schmidt was so concerned about Russian influence in American politics at the time, how could he possibly justify joining a company which had so recently represented the interests of the Russian government in Ukraine? How could Schmidt have stayed at that company for another eight years when they twice represented the interests of the Russian government? Perhaps he too found it easier to ignore the problem, or maybe he just didn’t care.

In December 2013, when protests erupted in Ukraine over Viktor Yanukovych’s decision to reject the pro-EU trade policy he had been close to signing and instead sign an agreement beneficial to the Kremlin, John McCain was on the ground in Kyiv to support Ukrainians in their quest for closer relations with the West. While there, McCain said, “These people love the United States of America, they love freedom – and I don't think you could view this as anything other than our traditional support for people who want free and democratic society.” At the same time he said this, Steve Schmidt was still cashing checks for the PR firm that had worked against those exact interests and would do so again.

A few months after Schmidt was announced at the company, Edelman signed FARA paperwork for a Russian government client called the Russian Venture Company (RVC) to assist with The Global Innovation Partnerships Forum which took place in October 2010. Again, Schmidt’s name isn’t on any of the FARA paperwork. However, one detail from Edelman’s FARA paperwork did stick out to me. Edelman’s contract with RVC had the PR firm hosting a media event at the Kremlin which focused on the Russian technology and innovation sector. This was around the time Russia was hyping what was purportedly its answer to Silicon Valley, the Skolkovo Innovation Center. The Russian Venture Company—which moved their offices to Skolkovo in 2016—was supposed to play a key role in a new generation of innovation in Russia which would bring together its greatest minds and assist Russian technology companies in their efforts to match their Western counterparts. As you may already know, this lofty dream never really got off the ground thanks in large part to Putin’s belligerent attitude towards the West. His government’s actions have increasingly led to less cooperation with Russia and more in the way of sanctions for those Russians working to advance the Kremlin’s agenda. Nevertheless, RVC continues to operate today and has invested in a variety of Russian government projects over the years with other Russian government funds—including some under U.S. and EU sanctions such as Vnesheconombank (VEB) and VTB.

In 2014, the FBI warned Western companies against taking on Russian investments and specifically against sharing technology with Skolkovo due to concerns the park was a front for Russian espionage efforts. The warning included concerns that the stolen technology could be used by the Russian military which already had working relationships with Skolkovo at that time. In 2015, it was revealed by the Ukrainian SBU and the FBI that Skolkovo was home to the Russian FSB departments in charge of information warfare operations that were targeting Ukraine and various Western countries. Thus, Skolkovo played a role in the Russian attack on the 2016 election and anyone who encouraged Western investors and IT professionals to come to Skolkovo should by now realize they were taken in by dreams of vast fortunes to be had in an untapped Russian market.

After Russia’s full-scale invasion of Ukraine in 2022, such dreams are well and truly dead. One of the first round of U.S. sanctions against the Russian government after their invasion targeted the Edelman’s old client, the Russian Venture Company (RVC), under Directive 4 of Executive Order 14024 which blocks property associated with "harmful foreign activities of the Government of the Russian Federation". Rather than addressing this, it’s much easier for Schmidt to blame “one firm” belonging to Paul Manafort as the source of Russia’s infiltration of the GOP.

As I said, Steve Schmidt wasn’t on any of Edelman’s FARA paperwork, but I did find this bit interesting. One of the keynote speakers for the 2010 event at the Kremlin was then-Governor of California Arnold Schwarzenegger, and the FARA paperwork signed by Edelman notes the RVC coordinated with Schwarzenegger’s office to facilitate his visit to the country. Now, why is this significant? Because the campaign manager for Arnold’s 2006 re-election campaign was none other than Steve Schmidt. So, a few months after Schmidt’s arrival at Edelman, the company signs FARA paperwork for its work on behalf of the Russian government, holds an event at the Kremlin and convinces Arnold to speak at this event which encouraged Western investment in Russia’s tech sector. If Schmidt played any role in setting this in motion, one might argue he did considerably more than simply looking the other way.

There’s one final set of FARA documents signed by Edelman for their work on behalf of the Russian government. It involves the former Russian oil giant Yukos which was owned by Mikhail Khodorkovsky until he was arrested and convicted on trumped up charges, spending ten years in a Russian prison before finally being released in December 2013. Putin’s consolidation of power in Russia was initially made possible by the government’s seizure of Yukos and the redistribution of its assets into Russian state-owned oil giant Rosneft. Putin used Khodorovsky as an example to other Russian oligarchs who refused to get in line with the Kremlin’s agenda. Essentially: do as your told if you don’t want to end up like him. Clearly, the message was received by the intended parties.

Since Khodorkovsky was released from prison, he has taken his case against the Russian government to EU courts for what he describes as an illegal seizure of Yukos. The case has taken on many forms with rulings in each group’s favor before changes on appeal, and after nearly two decades, the case remains in litigation despite a previous ruling stating that the Russian government owes $50 million to the former owners of Yukos. Despite their inconclusive nature, these losing court cases brought on by Khodorkovsky have been a source of embarrassment for Putin, and Russian government’s attorneys at the International Centre for Legal Protection (ICLP). When the ICLP needed help smoothing over the government’s image in relation to the court case, they hired Edelman in June 2016 to provide “communications services and media relations concerning ongoing US litigation regarding Annulled Awards in Hulley Enterprises Limited, Veteran Petroleum Limited and Yukos Universal Limited v. Russian Federation". Steve Schmidt remained at Edelman for two more years.

Despite Schmidt’s claim that Russia’s penetration of the Republican Party occurred through “one shady firm,” nearly forty U.S. firms have signed FARA paperwork with the Russian government since 2010. Paul Manafort may have be the most well-known and least scrupulous of Putin’s little helpers in the West, but he’s far from alone. The degree of complicity may vary on a case by case basis, but the people who pretended we could get along with Russia, that a “reset” with the Kremlin was possible and that we could “cooperate in certain areas” were either naïve or paid experts in public relations. To be clear though, John McCain was never one of those people.

In his criticisms of John McCain, Steve Schmidt shows us how much like Donald Trump he really is. Replace “Paul Manafort” with Trump’s preferred “Deep State,” and it’s essentially the same mostly straw-filled boogeyman who takes all the blame for every ill, for every perceived slight or would-be personal failure. Steve Schmidt didn’t cost John McCain the 2008 election. Paul Manafort sabotaged him. Donald Trump didn’t lose the 2020 election. The Deep State stole it from him. From there it’s all about repetition, repetition, repetition.

Why do this? Because it works.

John McCain did look the other way and shouldn’t have when it came to Rick Davis. If he were alive today, I’d like to think he would tell you he never should’ve spent one second on a boat with Oleg Deripaska. I’d like to think McCain knew that and thought it was a mistake from the moment it happened. I’d like to think that, but I can’t know it because John McCain is dead, and he can’t say so himself. That’s why this rewrite of history works for Schmidt. The only person who could’ve put him in his place and turned this narrative on its head no longer can.

What I will say is there’s no evidence John McCain ever lifted a finger for Oleg Deripaska or anyone else in the Kremlin. Whatever reason you want to give for McCain’s 2008 presidential loss, he spent the rest of his life fighting the Kremlin’s aggression harder than anyone in Congress and most of DC combined. I don’t think John McCain was perfect, but I do think he was worried about Russian aggression in the Baltic countries, Georgia and Ukraine years before the rest of us even knew what was happening there. He warned us years before doing so was popular or came with a built-in fan club. The Kremlin hated him for it. That’s not alternate history. It’s the truth.