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WASHINGTON — A long-running federal investigation into a former White House counsel in the Obama administration is reaching a critical stage, presenting the Justice Department with a decision about whether to charge a prominent Democrat as part of a more aggressive crackdown on illegal foreign lobbying.
The case involving the lawyer, Gregory B. Craig, was transferred in January from federal prosecutors in New York to those in Washington. The previously undisclosed move was driven by Justice Department officials in Washington, and reflects an eagerness within the department to prosecute violations of lobbying laws after the special counsel, Robert S. Mueller III, focused on foreign influence in his investigations.
A decision about whether to prosecute Mr. Craig, who was White House counsel for President Barack Obama during his first year in office, is expected in the coming weeks, people familiar with the case said. The investigation centers on whether Mr. Craig should have disclosed work he did in 2012 — while he was a partner at Skadden, Arps, Slate, Meagher & Flom — on behalf of the Russia-aligned government of Viktor F. Yanukovych, then the president of Ukraine.
The work was steered to Mr. Craig by Paul Manafort, who was then a political consultant collecting millions of dollars from clients in former Soviet states. Mr. Manafort, who went on to become President Trump’s campaign chairman in 2016, was sentenced this month to seven and a half years in prison on charges brought by Mr. Mueller’s team related to obstruction of justice and violations of banking, tax and lobbying laws stemming from his work in Ukraine.
The Manafort case, and others developed by Mr. Mueller, marked the first high-profile criminal charges in years under the Foreign Agents Registration Act, or FARA. The 1938 law requires Americans to disclose detailed information about lobbying and public relations work for foreign governments and politicians.
It had rarely been used in prosecutions, even as prominent Washington lobbyists, consultants, lawyers and former public officials collected ever-larger, often six- and seven-figure paydays from foreign interests looking to burnish their sometimes unsavory reputations in the United States capital.
Mr. Manafort’s case, and the investigations into Mr. Craig and other high-profile consultants who worked with Mr. Manafort, have left Washington’s K Street lobbying corridor scrambling to deal with the heightened scrutiny.
The Justice Department recently signaled that its enforcement efforts were just getting started, indicating that scrutiny of foreign influence in American politics will continue after Mr. Mueller’s investigation, which began with a focus on Russian meddling in the 2016 presidential election and possible coordination with the Trump campaign.
One of the first significant initiatives under the new attorney general, William P. Barr, was the reorganization of the unit that oversees FARA, suggesting that enforcing laws on foreign lobbying will become a priority of his tenure.
The prosecutor brought in to run the unit, Brandon L. Van Grack, worked until recently in the special counsel’s office. The unit falls within the Justice Department’s national security division, which investigated Skadden Arps’s Ukraine work and must approve any charges against Mr. Craig.
Mr. Craig, 74, would be the first Democrat to be charged in a case spinning out of the special counsel’s investigation — a distinction that could be used to rebut accusations leveled by Mr. Trump and his supporters that the investigation is a partisan witch hunt.
An Ivy League-educated lawyer who moved easily between elite law firms and government for more than four decades, Mr. Craig worked on foreign policy and other issues during the administrations of President Bill Clinton and President Obama, and joined Skadden Arps in 2010 to create a division focused on what he called “international troubleshooting.”
His Democratic bona fides and ties to the Obama administration were among the main reasons he was recruited by Mr. Manafort as part of an effort to build support in Washington for Mr. Yanukovych, according to lobbyists who worked on the account. They were told to emphasize to Democratic members of Congress and the media that Mr. Craig was involved in the effort.
For Skadden Arps, the work was lucrative; Mr. Manafort arranged for the firm to be paid more than $5.2 million in 2012 and 2013, primarily from a Ukrainian oligarch. In…