Russian-backed investment fund tied to influential U.S. corporate consulting firm

Alfa Group Supervisory Board Chairman Mikhail Fridman attends the 2017 Atlases Russian Business Forum at the Crocus City Hall.
Artyom Geodakyan | Tass | Getty Images

An investment fund backed by Russian oligarchs that have been sanctioned by the European Union following the invasion of Ukraine has ties to Teneo, an influential corporate advisory firm based in the United States.

The public relations and strategy giant was hired in 2020 by LetterOne, a private equity firm based out of Luxembourg that counts sanctioned billionaires Mikhail Fridman, who is a native of Ukraine, and Petr Aven among its cofounders. The contract appears to have paid Teneo more than $3.6 million to line up interviews and consult on media strategy in the U.S.

LetterOne was founded by Fridman, Aven, Alexei Kuzmichev, Andrei Kosogov and German Khan — all of whom are some of the wealthiest business leaders based in Russia. All five founders have been on LetterOne’s board, with Fridman as the chairman, according to data from PitchBook reviewed by CNBC. The executives launched the firm in 2013 after establishing Alfa Group, one of the largest conglomerates in Russia.

Fridman and Aven have been accused by the E.U. of having ties to Russian President Vladimir Putin, claims that were denied in an emailed statement to CNBC. The statement did not answer any of CNBC’s questions on LetterOne’s work with Teneo or how the investment fund is planning to move ahead now that two of their founders have been sanctioned. Fridman’s bank, Alfa Bank, has also been sanctioned by the United States. He’s called on the war in Ukraine to end.

After CNBC asked a LetterOne representative on Monday about their business, including their relationship with Teneo, several pages of their website, including the “our people” section, appear to have been wiped as of Tuesday morning. An error message now appears on that section which listed the founders and executives at the firm. The LetterOne board section is still active but it no longer shows Fridman and Aven as members of their board.

Joshua Hardie, a spokesman for LetterOne, said Fridman and Aven resigned from the board on Tuesday. CNBC first contacted the private equity firm on Monday.

Though emails to Teneo were not returned, Kathleen Lacey, a senior managing director at Teneo who was listed in a document as working the LetterOne account, told CNBC in a brief phone call on Monday that they were no longer one of her clients and believed her firm wasn’t representing them anymore.

The Department of Justice’s FARA Unit, which monitors U.S. lobbying and consulting work for foreign representatives, told CNBC on Tuesday that the contract between Teneo and LetterOne “remains active.”

LetterOne has multiple links to Teneo, which was founded by two Democratic consultants that worked for former Presidents Bill Clinton, Barack Obama and former Secretary of State Hillary Clinton. The private equity firm has been involved with almost a dozen deals estimated to be worth over $1 billion, according to PitchBook. Uber saw a $200 million investment from LetterOne in 2016.

Teneo has since grown into a consulting giant, with past clients including Dow Chemical and Coca Cola. Foreign clients have included Neom, a company backed the juggernaut Public Investment Fund with the goal of creating a megacity in Saudi Arabia and a foundation led by an Emirati princess.

Their listed senior advisors is a who’s who of political and business leaders including former Republican House Speaker Paul Ryan, former IBM CEO Ginni Rometty, former Dow Chemical CEO Andrew Liveris and Harvey Pitt, the former chairman of the Securities and Exchange Commission.

Doug Band, who was once one of Bill Clinton’s closest aides, founded Teneo with Declan Kelly and Paul Keary. Kelly worked as the special envoy to Northern Ireland in the Obama administration and helped Hillary Clinton run for president in 2008. Band and Kelly have since left the firm, with the later resigning from being Teneo’s CEO after reports of him drunk and acting inappropriately at an event organized by the Global Citizen nonprofit. Keary became the CEO after Kelly’s resignation.

A contract between Teneo and LetterOne reviewed by CNBC shows that the consulting firm was hired in 2020 for a retainer of $150,000 per month to advise the fund on their media strategy. Teneo, according to the contract, was expected to “provide strategic counsel and stakeholder engagement advice to the company and its board members(including, without limitation, scheduling media interviews, assisting with media briefings, coordinating stakeholder engagements and related activities).”

Under the contract, LetterOne was on track to pay Teneo more than $3.6 million since September 2020. There were at least four Teneo representatives that worked the account, according to other documents filed to the DOJ.

Further documents show that through last year, Teneo took credit for trying to set up interviews for LetterOne leaders with producers and television anchors, including those at CNBC, Bloomberg and Fox Business. A document shows that a Bloomberg representative was contacted almost a dozen times to see whether LetterOne could sponsor one of their Bloomberg Invest events.

There are other ties between Teneo and LetterOne.

LetterOne’s non-executive chairman is Evan Davies, a British businessman who was once the Minister of State for Trade, Investment and Small Business. He’s also a senior advisor at Teneo.

VEON, a telecommunications company operating in Russia and Ukraine is listed on LetterOne’s website as one of their active investments. Ursula Burns was chairman of the VEON board for almost three years before stepping down in 2020. She later became the chairwoman of Teneo.

Meanwhile, VEON announced on Tuesday that Mikhail Fridman resigned from their board.

Sophie Tremblay

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