Former govt spent $6.5m to influence US
August 29, 2015 03:59 pm
The former Sri Lankan government allegedly paid around US$6.5 million to a private equity fund manager over a five-month period in 2014 for consulting services which included influencing the U.S. government, according to documents obtained by Foreign Policy Magazine.
The FP investigation said that Imaad Zuberi, age 45, is a private equity fund manager, venture capitalist, and an elite political fundraiser who has bundled hundreds of thousands of dollars for leading Democrats and that failed to disclose the extent of his ties to the Lankan government.
He was among the top tier of bundlers for Obama’s 2012 reelection campaign, meaning he delivered $500,000 or more in contributions. He’s already among Clinton’s “Hillblazers,” bundling $100,000 for her presidential campaign in its first months.
The photographs, posted to social media sites like Facebook and Google Plus, shows him bumping fists with President Barack Obama at a White House reception, sharing a laugh with Vice President Joe Biden at a formal luncheon, flanked by Republican foreign-policy hawks Sen. John McCain and Rep. Ed Royce in a Capitol Hill office and cheek to cheek with Democratic presidential candidate Hillary Clinton.
Over a five-month period in 2014, the Sri Lankan government paid Zuberi $4.5 million directly — plus another $2 million to a company he co-owns — for consulting services which included influencing the U.S. government, according to documents obtained by Foreign Policy.
Zuberi’s windfall was not disclosed to the Justice Department, as required under federal law, and the lobbying and public relations firms hired through his company to influence the U.S. government on Sri Lanka’s behalf have all received DOJ subpoenas, according to a senior government official.
“Justice is seeking public assets allegedly stolen from Sri Lanka. None of the firms is a target of the investigation, which is focused on members of the family of the country’s former president and has not been previously reported,” the article said.
According to the Foreign Agents Registration Act, or FARA, paid representatives of foreign governments — even if they outsource the actual lobbying to other organizations — must disclose those relationships to Justice “within ten days” of acquiring a foreign client, according to the statute.
WR Group, the company that held the contract with Sri Lanka, never registered with the Justice Department. Zuberi, who billed the government on May 5, 2014, for his services and received his first payment of $3.5 million from Sri Lanka on May 9, 2014, didn’t register as a consultant until Aug. 14 of that year, well beyond the 10-day deadline. Violating the act carries maximum penalties of a $10,000 fine and five years in prison.
“[W]e are not a lobbying firm, law firm, nor PR firm, therefore we do not engage in these activities because these are not our core competencies,” Zuberi wrote in response to detailed questions from FP. “I registered not as a lobbyist but as a consultant because that was the extent of my involvement.”
Zuberi’s Sri Lankan payments and the investigation they’ve spawned could raise troubling questions for Clinton’s candidacy. Not only is he a major fundraiser for her campaign, but he also donated between $250,000 and $500,000 to the Clinton Foundation, which has already come under fire for accepting money from donors — many of them foreign — with interests before the U.S. government while she was secretary of state.
The Clinton campaign declined to comment, and the Clinton Foundation didn’t respond to a request for comment.
Zuberi “typifies how elite influencers operate today,” said Janine Wedel, a George Mason University professor who studies governance and corruption through the lens of social anthropology. “He plays overlapping roles, builds up his public image, and uses it to help others launder theirs.”
In May 2015, Secretary of State John Kerry visited Sri Lanka to pledge U.S. support for the administration of President Maithripala Sirisena, who came to power this past January, unseating former President Mahinda Rajapaksa, whose government is alleged to have stolen as much as $10 billion over the decade he was in power.
In prepared remarks, Kerry promised assistance from U.S. investigators and prosecutors to find money transferred to the United States. According to a government official familiar with the case, the U.S. team sent to Sri Lanka noted the payments to Zuberi and WR Group; the subpoenas to the lobbying firms are part of the effort to trace money misappropriated by the Rajapaksa regime.
Justice Department spokesman Peter Carr declined to comment.
Meanwhile, Sri Lankan authorities are conducting their own crackdown on corruption. The official who directed the U.S. lobbying campaign, Sajin de Vass Gunawardena, was arrested May 11, 2015, on unrelated charges of misusing state assets. Two law enforcement agencies there are examining a network of 28 companies for stealing state assets and money laundering, according to J.C. Weliamuna, a Sri Lankan attorney and anti-corruption activist who has led official investigations into that country’s public corruption.
This story is the result of dozens of interviews with government officials in Sri Lanka and the United States, lobbyists, campaign officials, and an analysis of documents filed with the Justice Department under FARA and from multiple agencies in Sri Lanka. FP also mined social media sites and analyzed campaign finance and lobbying data.
In addition to the photographs Zuberi posts of himself side by side with Washington’s powerful, he frequently uses Facebook to map his far-flung travels.
Zuberi’s Facebook postings also show that he was in Sri Lanka from April 1 to April 7, 2014. He had a meeting at Beira Lake, the swanky business district of the capital Colombo, a meeting at the U.S. Embassy, and then toured the country.
“We focus on emerging markets and frontier markets,” Zuberi wrote to FP. “The country’s GDP was growing at a decent clip and we had some ideas such as resorts, tea plantation, refinery project, real estate development, [and an] IT outsourcing/call center.”
At the time of his visit, the government of then-President Mahinda Rajapaksa was facing a low point in its relations with Washington
A month after his trip to Sri Lanka, Avenue Ventures issued a May 5, 2014, invoice on company letterhead, requesting a $3.5 million payment for a single line item: the “Sri Lanka project May 2014 invoice per contract.” The invoice included a Bank of America account number and specified the recipient of the funds: Imaad Zuberi. Four days later, the Central Bank of Sri Lanka wired the money to Zuberi’s account, according to Foreign Policy.
In response to a question about the $4.5 million in payments to his personal account, Zuberi wrote, “There were many pieces to the [Sri Lanka] project and various entities were involved. How to allocate what to whom may have been complex at the outset but if there were any errors they were corrected.”
Sajin de Vass Gunawardena allegedly gave instructions to make at least one of the payments to Zuberi and directed the work of the U.S. lobbying and PR firms. His office was listed as their client.
“Our work was for the government of Sri Lanka,” Zuberi wrote to FP, “not Mr. Vass Gunawardena as a person.”
As far as the Justice Department knew at the time, though, Zuberi wasn’t working for Sri Lanka either. He didn’t disclose the payments he received from the government. Neither did WR Group, which received the last two transfers of $1 million each from the Central Bank in July and September 2014.