White House Wants Wall Street to Skip Russian Eco Summit

The White House is lobbying top U.S. corporate leaders to spurn Russian President Vladimir Putin by canceling attendance at an economic conference in St. Petersburg later this month.

Treasury Secretary Jacob J. Lew and President Barack Obama’s senior adviser Valerie Jarrett have been making calls to executives scheduled to participate in the conference, saying their attendance wouldn’t send a good signal, according to a person with knowledge of the matter, who asked for anonymity because the conversations were private.

As the crisis in Ukraine has escalated, U.S. executives have been dropping off the list of attendees for the May 22-24 St. Petersburg International Economic Forum.

Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein probably won’t attend, according to a person briefed on the matter, and Morgan Stanley CEO James Gorman is canceling his plans, another person said. Visa Inc.’s Charlie Scharf and PepsiCo Inc.’s Indra K. Nooyi are no longer participating.

Citigroup CEO Michael Corbat will send lieutenants in his place, the company said last week. Alcoa Inc. Chief Executive Officer Klaus Kleinfeld won’t attend and the company will “participate via its most senior Russian executives,” spokeswoman Monica Orbe said.

‘Inappropriate Message’

“Companies will have to make their own decisions, but we believe that the most senior business executives traveling to Russia to make high-profile appearances with Russian government officials at events such as this would send an inappropriate message,” Caitlin Hayden, spokeswoman for Obama’s National Security Council, said.

White House press secretary Jay Carney confirmed the administration has been in contact with company leaders about the conference, while declining to give specifics.

The forum lists as sponsors some of Russia’s biggest corporate names, including state-controlled energy companies OAO Gazprom and OAO Rosneft and state-owned development bank Vnesheconombank. It’s taking place as the U.S. and European Union accuse Putin’s government of stoking unrest in Ukraine and seek to pressure him to reverse course by squeezing Russia’s economy.

The U.S. government also won’t be represented in St. Petersburg. “No one is going” from the administration, Hayden said in an e-mail. Typically, officials from the Commerce or Treasury Departments and U.S. Trade Representative’s office would attend, she said.

U.S. Sanctions

Since March 6, Obama has imposed sanctions on 45 individuals, many of them close associates of Putin, and 19 entities, including Russian banks. The penalties include freezing assets in the U.S. and travel bans.

Those figures include former Ukrainian officials and Crimean separatists as well, according to the U.S. Treasury Department. The EU also has imposed sanctions on individuals.

The unrest in eastern Ukraine has continued to worsen despite the pressure from raising the stakes in the worst confrontation in two decades between Russia and its former Cold War adversaries.

Both the U.S. and the EU have said they’ll extend sanctions to cover industries of the Russian economy, possibly including banks and energy, if Putin escalates the crisis.

The crisis is having an impact on Russia’s economy. The country is in a recession and its economy may only expand 0.2 percent this year, Antonio Spilimbergo, the International Monetary Fund’s mission chief for Russia, said yesterday. The ruble is down 7.6 percent against the dollar this year, the second-worst among 24 emerging-market currencies tracked by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.