The Georgian government bowed to pressure from Washington this week and reinstated a contentious deal with a US oil and gas company following a lobbying blitz that has critics crying foul.
The Caucasus country reversed its earlier decision to break its contract with Frontera Resources Group of Texas on Thursday. The state-owned Georgian Oil and Gas Corporation announced the termination in April following a years-long international arbitration dispute.
In a statement this week, Georgia’s Ministry of Economy and Sustainable Development pointed at US pressure to explain the reversal.
“It is unequivocally undesirable for us to give anyone in America’s highly diverse political spectrum a pretext to use this absolutely routine commercial dispute to harm the strategic relations between our countries,” the ministry said.
The termination comes after a series of threats from Texas Republicans, several of whom have taken political contributions from Frontera. Pressure to reverse course grew further after the House Appropriations Committee this month passed a foreign aid bill that conditions assistance to Georgia.
A $700,000 INFLUENCE CAMPAIGN
The congressional pressure follows a $700,000 lobbying campaign by Frontera since 2017, according to a review of lobbying disclosures by Foreign Lobby Report.
That year the firm retained both Cornerstone Government Affairs and Akin Gump to help resolve its dispute with the Georgian government. Akin Gump ended its work for Frontera in July 2019 and only disclosed a total of $40,000 in payments from the firm since it was hired.
Cornerstone however continues to represent the company and has disclosed $660,0000 in fees since 2017. The firm was paid $80,000 per quarter in 2020 as tensions with Georgia heated up, up from $50,000 per quarter previously.
A half-dozen well-connected former congressional staffers are currently lobbying on the contract:
- Tony Essalih, ex-chief of staff for former congressman John Culberson, Republican of Texas;
- Anthony Lazarski, former senior adviser to Senate Armed Services Committee Chairman James Inhofe (R-Okla.);
- Tyler Nelson, former chief of staff to Rep. Pete Olson (R-Texas);
- Christopher Sarley, policy coordinator for House Energy & Commerce Committee and former policy director for Rep. John Shimkus (R-Ill.);
- William Smith, former staff director for the House Appropriations Committee under then-Chairman Hal Rogers (R-Ky.);
- Eric Tober, former aide to ex-Sen. Bennett Johnston, Democrat of Louisiana; and
- Todd Webster, former chief of staff to Sen. Chris Coons (D-Del.).
FRONTERA LOBBYING GETS RESULTS
The increased fees coincide with a step up in congressional activity.
On Jan. 13, House Energy and Commerce Committee member Markwayne Mullin (R-Texas) wrote to Prime Minister Giorgi Gakharia warning him to “halt aggressive actions against US companies” and accusing the country of “harassment” against Frontera. Mullin is the lead sponsor of legislation, first introduced in 2017, that threatens sanctions against Georgia if it is found to be “taking actions to undermine commitments or contractual agreements.”
Rep. Brian Babin (R-Texas) followed up with a similar letter on Jan. 23. And Rep. Pete Olson (R-Texas) assailed the governing party of Bidzina Ivanishvili over its conflict with Frontera in a Jan. 28 floor speech.
Texas Republicans stepped up their attack after Frontera’s contract was terminated in April. In a May 15 letter to Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin, four members of the House and Senate accused Ivanishvili’s Georgian Dream party of trying to “crowd out” US companies in favor of Russian-linked competitors and called for a “broad response” from the US government.
“Recently Frontera has been targeted with stifling regulations and restrictions and now faces possible expropriation from the Georgian government,” the letter states. “These complications and controversies are deeply marked by geopolitical implications. Frontera’s energy discovery work was aimed at making Georgia stable and energy independent.”
The letter was signed by Sens. Ted Cruz and John Cornyn as well as Reps. Mullin and Jodey Arrington. All of them except Cruz received political contributions from Frontera Chairman Steve Nicandros during the 2020 cycle, as did Babin.
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The donations have sparked accusations from Frontera’s critics that the Georgian government is getting strong-armed. They accuse Frontera of breach of contract and failing to pay its employees.
“How embarrassing that a handful of rented U.S. politicians who are nobodies in America have bamboozled the Georgian government,” Sopo Japaridze, the head of Solidarity Network, an independent Georgian trade union, wrote on Facebook in comments first reported by Eurasianet.
GEOPOLITICAL RIVALRIES
But it’s not just lawmakers close to Frontera that are raising concerns about the country’s direction. Members of both parties have warned about democratic backsliding and the outsize influence of Ivanishvili, a Russia-friendly oligarch with who served as prime minister seven years ago.
“How embarrassing that a handful of rented U.S. politicians who are nobodies in America have bamboozled the Georgian government.”
Georgia trade union leader Sopo Japaridze
The foreign aid bill that the House passed this month sets aside $132 million for Georgia, Eurasianet reported at the time. But it withholds 15 % unless the country demonstrates “effective steps” to “strengthen democratic institutions,” “combat corruption within the government” and “ensure the rule of law in the private sector is consistent with internationally recognized standards, including protecting the rights of foreign businesses to operate free from harassment and to fully realize all due commercial and financial benefits resulting from investments made in Georgia.”
Frontera has also benefited from attacks by the Georgian opposition, which is engaged in its own Washington influence battle against Georgian Dream.
Since October 2019, former President Mikheil Saakashvili‘s United National Movement of Georgia has paid Orion Strategies $187,500. The firm has been warning US officials and the media about “anti-democratic developments in Georgia,” according to its lobbying disclosure for the six months through May.
Meanwhile Ivanishvili’s party hired two firms in February: Hogan Lovells and DCI Group AZ. DCI’s task: Promoting Georgian Dream as a “reliable and pragmatic partner for democracy, peace and stability with an unwavering commitment to Western democratic liberal ideals and the special Georgia – U.S. relationship.”