Investigators focusing on foreign lobbying by firms linked to Manafort: report

Prosecutors with the Justice Department (DOJ) are ramping up their investigation into the foreign lobbying of two firms linked to former Trump campaign chairman Paul ManafortPaul John ManafortPress: Mueller closes in on Trump Mueller polarizes GOP, Dems the more they hear his name, says polling editor Judge sets Tuesday hearing in Manafort case MORE, The Associated Press reported Wednesday

The prosecutors have been interviewing witnesses about the Podesta Group and Mercury Public Affairs over the past several weeks, the AP reported, citing individuals familiar with the investigation.

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The investigation stems from special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE's probe into Russian interference in the 2016 election. Mueller handed it off to prosecutors in Manhattan because the issue fell outside the scope of his own probe, according to the AP.

The Podesta Group and Mercury Public Affairs are believed to be "Company A" and "Company B" as referenced in a grand jury indictment against Manafort and his deputy associate Richard Gates last year. 

The firms have come under scrutiny for their work to benefit a pro-Russia party in Ukraine. They were accused in the grand jury indictment of being paid millions through offshore bank accounts set up by Manafort and Gates.

Manafort faced charges for failing to register as a foreign lobbyist and was convicted of attempting to avoid paying taxes on income he earned for the work.

The firms didn't register the lobbyists doing work for Ukraine as foreign agents under the Foreign Agents Registration Act while doing that lobbying. The firms have since registered lobbyists under the act, according to the AP, and said they relied on outside counsel in making their decisions.

Mercury spokesman Michael McKeon told the AP that the firm has “always welcomed any inquiry since we acted appropriately at every step of the process, including hiring a top lawyer in Washington and following his advice."

"We’ll continue to cooperate as we have previously," he added.

A spokeswoman for Podesta declined comment to the AP.