Though Mr. Podesta’s firm had disclosed the client under less-detailed congressional lobbying rules and retroactively registered with the Justice Department, that did not stop the special counsel’s office from subpoenaing the records and employees of his firm and others that worked with Mr. Manafort and Mr. Gates.
Mr. Podesta questioned the motives and methods behind the special counsel’s investigation. He referred to one of the investigation’s lead prosecutors, Andrew Weismann, as “Inspector Javert,” the police character in Les Misérables who became obsessed with ensuring the capture and punishment of a parolee who had been convicted of stealing bread to feed his family.
“I didn’t even steal a loaf of bread,” Mr. Podesta said, asserting that he was targeted at least partly because the special counsel “thought it was a good idea to have a Democrat, clearly.”
Mr. Podesta said his firm’s finances were stretched thin, partly because it paid as much as $5 million in legal fees for employees who were subpoenaed by prosecutors, and partly because the investigation spooked clients, who left the firm.
Mr. Manafort and Mr. Gates were charged with unregistered foreign lobbying, tax fraud and other crimes in October 2017. The indictment identified the Podesta Group and a firm with which it worked on the Ukraine effort, Mercury Public Affairs, though not by name, as having worked as part of a “scheme” with Mr. Manafort and Mr. Gates to gain support for Mr. Yanukovych, while evading foreign lobbying disclosure requirements.
Within a day, the Podesta Group’s bank, citing the special counsel’s investigation and the draining of the firm’s accounts to pay the staff’s legal fees, canceled its credit line, rendering the firm illiquid, Mr. Podesta said.
He told his employees in a staff meeting that he was stepping back from the firm, citing attacks from Mr. Trump and his allies in the conservative media as making it “impossible to run a public affairs shop,” according to people in attendance.