By Andy Sullivan
WASHINGTON, March 6 (Reuters) - The U.S. company that handles public relations for Russia in the United States distanced itself on Thursday from the Ukraine crisis, saying that it advises the Kremlin largely on economic development, not foreign policy.
Ketchum Inc, which has come under increasing scrutiny in recent months as Washington has clashed with Russia over Syria and gay rights, said in a statement: "We are not advising the Russian Federation on foreign policy, including the current situation in Ukraine."
Ketchum, a division of Omnicom Group Inc, has earned more than $55 million over eight years handling publicity and media relations for the government of Russia and Gazprom , the state-owned natural gas giant, federal filings show.
"Our work continues to focus on supporting economic development and investment in the country and facilitating the relationship between representatives of the Russian Federation and the Western media," Ketchum said.
The company was hired to help Russia prepare for a summit of the G8 industrialized countries in St. Petersburg in 2006, and over the years it has encouraged reporters, including those at Reuters, to write about Russian trade summits, technology companies and the 2014 Winter Olympics in Sochi.
Ketchum also manages an English-language Web site and Twitter account called "thinkRussia," which have not mentioned the unrest in Ukraine.
Another Omnicom subsidiary, G Plus, represents Russia in Western Europe.
Russia occupied Ukraine's Crimea region last weekend and has rebuffed Western demands that its forces return to their bases. Diplomatic efforts to resolve the crisis have made little headway so far.
News outlets including CNBC and Business Insider have noted Ketchum's work with Russia recently.
Public-relations executives say there is nothing wrong with representing countries such as Russia that have poor human rights records, but warn Ketchum's reputation may suffer if the situation in Ukraine deteriorates further.
"The moment that a client becomes an enemy of the United States, or an enemy of our citizens, then I think it's probably a whole new calculus," said Michael Carberry, a former public-relations executive who now teaches at American University's Kogod School of Business.
Ketchum's work is not unusual in the United States, where at least 330 companies and individuals have registered with the Justice Department to represent foreign entities.
While they are prohibited from doing business with countries like Iran and Cuba that face U.S. sanctions, lobbying and public-relations firms are free to work with other governments whose interests conflict with those of the United States.
Their work can help improve relations by building ties between the United States and its adversaries through non-official channels, and providing feedback to foreign leaders on how their actions might be perceived abroad, industry executives say.
"We could rapidly accelerate our dialog with Iran if we did things like museum exchanges, cultural exchanges, university exchanges," said Philip Elwood, a vice president at Levick Strategic Communications in Washington.
Ketchum's affiliate in Ukraine, Pleon Talan, distanced itself from its parent firm's work on Wednesday in an apparent response to local criticism. "Pleon Talan does not work and has never been involved in work with the Russian government," the company said on its Facebook page.
Ketchum farmed out some of its Russia work to other U.S. companies last year, records show.
Alston and Bird, a Washington law and lobbying firm, was paid $100,000 over a six month period last year for policy and politics advice and communications firm Maslansky + Partners was paid $139,000 in that same time frame. The polling firm Ipsos, which also works with Reuters on some news stories, was paid $92,000 during that period. All three companies referred questions to Ketchum.
Ketchum helped Putin land a commentary piece in The New York Times last September that urged the United States to rely on international bodies like the United Nations rather than military force to resolve the Syrian conflict.
Ketchum helped Russian President Vladimir Putin win Time magazine's "Person of the Year" award in 2007 and pressed the U.S. State Department to soften its assessment of Russia's human-rights record, according to lobbying records. The company has also contacted reporters who wrote articles chronicling Russia's human-rights abuses.
Russia is rated as "not free" by Freedom House, an international civil-liberties watchdog, and it ranks 149th out of 179 countries on Reporters Without Borders' press freedom index.
Filings with the U.S. Justice Department show that Ketchum has earned more than $26 million for its work with Russia and more than $29 million from Gazprom.