$4000 bar tabs, meetings, bundling, foreign access, access, White House parties and advisory groups, it is all how the Obama elites roll.

Hat tip to FP and Bill Allison:

Elite Fundraiser for Obama and Clinton Linked to Justice Department Probe
n FP investigation shows that Imaad Zuberi, who has bundled hundreds of thousands of dollars for leading Democrats, failed to disclose the extent of his ties to a foreign government.

FPMagazine:

Imaad Zuberi, age 45, is a private equity fund manager, venture capitalist, and an elite political fundraiser. 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.

Among the perks of delivering that much money to candidates is access to them, and advertising that access caught the eye of those who wanted some of it for themselves.

The Sri Lankan government, long under fire for official corruption and at a low point in its relations with Washington, did just that. Over a five-month period in 2014, it 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.

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.

It’s another indication that when it comes to chasing donations for their political campaigns, the Clintons aren’t too careful about how they get the checks. In addition to the 1996 fundraising scandals of President Bill Clinton’s reelection campaign that included foreign contributions — illegal under U.S. law — Hillary Clinton’s 2008 campaign benefited from two fundraisers who ended up being convicted of violating election law. Both Sant Singh Chatwal, a New York hotelier, and Norman Hsu, whose investment fund turned out to be a Ponzi scheme, used “straw donors,” allowing them to contribute amounts far greater than the maximum contribution for an individual.

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. Additionally, the reporting relied on the assistance of Namini Wijedasa, a journalist from the Sri Lanka Sunday Times, who secured documents from the Central Bank of Sri Lanka.

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Even in the era following the 2010 Citizens United Supreme Court decision that opened the door to million-dollar contributions to super PACs, bundlers like Zuberi remain critical to politicians. Under federal election law, candidates must still raise money for their campaigns from individuals in amounts of no more than $2,700. Bundlers induce members of their social and professional circles to write those $2,700 checks, turning them over to campaigns in “bundles” of anywhere from $10,000 to $100,000 or more. By July 1, 2012, Zuberi had bundled $685,000 for Obama’s reelection campaign, according to an internal Democratic National Committee document. And in the first months of the 2016 presidential contest, Zuberi was among the 125 bundlers who’d already passed the $100,000 mark for Clinton’s campaign in its first three months.

Zuberi was born in Albany, New York; his father was Pakistani, and his mother is Indian. He studied finance and business economics as an undergraduate at the University of Southern California, then took a job with Transamerica in 1996. He stayed with the insurance and investment firm holding company after it was acquired by the Dutch conglomerate Aegon in 1999. Zuberi invested in insurance firms in Asia and the Middle East, and earned an MBA from Stanford University in 2006. He also kept up with the Pakistani community in Los Angeles, his home base, and as early as 2004 was raising money from them for John Kerry’s presidential campaign that year, to which he made his first contribution, a modest $1,000 donation.

“When he likes someone, he likes them,” said Waqar Khan, the founder and chairman of the Pakistan American Chamber of Commerce, who first met Zuberi during his 2004 fundraising forays into the Los Angeles Pakistani community.

Warm and expansive, Zuberi’s conversation ricochets from references to family — he’s married and has a 3-month-old son — to high-level analysis of the finances of companies like Uber, to the names of his powerful friends, including sitting members of Congress and other movers and shakers in the world of politics. But these displays are reserved for those he’s courting. Khan, who wasn’t active in politics in 2004, was a fundraiser for Hillary Clinton in 2008, and Zuberi kept his distance: “He was close to me when he needed my services.”

That’s because in January 2007, Zuberi joined the fledgling Obama presidential campaign, getting in on the ground floor of a phenomenal fundraising operation that was the first to forgo federal matching funds in a general election since Richard Nixon’s 1972 effort.

Though he personally raised less than $50,000 in the 2008 campaign, Zuberi ranked among the top 100 suppliers of political contributions during Obama’s 2012 reelection effort. That group’s members also included studio head Jeffrey Katzenberg, fashion editor Anna Wintour, and Chicago Cubs co-owner Laura Ricketts. Zuberi became a big donor in his own right, contributing $106,000 to candidates and party committees. He tripled that amount for the 2014 congressional midterm elections after the Supreme Court removed the aggregate limit individuals can contribute to federal campaigns, parties, and PACs in a single election.

 

Zuberi also had a new job outside of politics. After leaving Aegon, he launched Avenue Ventures, a boutique private equity and venture capital fund that, according to his biography on LinkedIn, manages money for sovereign wealth funds, Fortune 500 firms, and startups. Unlike other major players in the world of private equity, like Bain Capital, Elliott Management, or Goldman Sachs, neither Avenue Ventures nor Zuberi is registered as an investment advisor with the Securities and Exchange Commission. Most of Zuberi’s investing is done abroad, including a $700 million investment in a luxury resort in Bahrain.

With his high-dollar fundraising, he became a frequent visitor to the White House, publicly released visitor logs show. His very first visit was in December 2011, when he had about two minutes to get his picture taken with Obama before joining 586 other guests at a White House holiday party. Since the 2012 election, Zuberi has visited the White House 13 times at both large receptions and meetings in small groups.

When Obama for America, the president’s campaign committee, morphed in 2013 into a nonprofit organization that advocates for the president’s agenda, Zuberi was named to its advisory board. He’s also a donor to the group, called Organizing for Action, and has given it $240,000 since its launch. He serves on the executive committee of the National Coalition of Syrian Revolution and Opposition Forces; in April 2013, Avenue Ventures planned to set up a fund to aid in the reconstruction of Syria once the regime of Bashar al-Assad had fallen.

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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. The venture capitalist and private equity fund manager trots the globe, meeting with the likes of retired Gen. Wesley Clark in Geneva; dining with the House Republican leadership in New York; watching sports with Virginia Gov. Terry McAuliffe in London; and walking the corridors of power in Washington. 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. The United States won a vote in the U.N. Human Rights Council on Feb. 5, 2015, calling for an independent investigation into possible crimes against humanity committed during the government’s bloody suppression of the Tamil Tigers, a violent separatist movement that was finally defeated in 2009. Two of Rajapaksa’s brothers, both government ministers, are among those suspected of ordering the killing of as many as 70,000 unarmed civilians. Additionally, the country was mired in allegations of official corruption, with journalists exposing scandals involving public money siphoned off in offshore accounts or pilfered through inflated contracts and kickbacks in everything from the procurement of MiG fighter jets to the management of the national cricket team. Rajapaksa and his ministers were in need of someone with access to the highest levels of the U.S. government to improve their standing.

Enter Zuberi. 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.

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.”

While Sri Lankan procurement regulations show that consultants must be hired by cabinet members or their designated deputies, Zuberi’s agreement was with the office of the president. The Sri Lankan officials whose names appear on the payment documents are either being questioned, under investigation, or behind bars. Lalith Weeratunga, the secretary to the former president who authorized the payments, was questioned about 600 million Sri Lankan rupees, or roughly $4.5 million, in funds taken from the state telecommunications regulator. Ajith Cabraal, former head of the Central Bank, had to surrender his passport as his actions in a bond deal were probed.

Vass Gunawardena was a member of parliament in the inner circle of the president. He 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. He has been in prison since May and under investigation for money laundering.

“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.

While neither Zuberi nor WR Group registered under FARA, Mark Skarulis, a business associate of Zuberi, did. On May 23, 2014, Skarulis incorporated a firm, Beltway Government Strategies, in California; six days later, he filed a registration with the Justice Department listing Sri Lanka as its client.

Skarulis had accompanied Zuberi on his April trip there, but had little in the way of Washington connections in his own right. Unlike most lobbyists, he had no experience on Capitol Hill or in the executive branch. Nor was he a prodigious donor or fundraiser; he made his first political contributions in January 2014 to Royce.

“Mark’s forte — well, he didn’t have a political background,” Sean Tonner, president of the Denver office of R&R Partners, a large PR firm and one of the registered foreign agents for Sri Lanka, told FP. “That’s why they augmented with firms like ours.”

By the middle of June, Beltway Government Strategies had also hired PR and lobbying firms Burson-Marsteller, Madison Group, and Vigilant Worldwide Communications as subcontractors.

Skarulis declined to comment.

Beltway paid the firms it hired, while the Central Bank paid Zuberi. “As such deliverables have been performed by WR Group to the satisfaction of the Government of Sri Lanka,” one payment authorization dated June 11, 2014, reads, “I hereby authorize the payment of $1,000,000 to Imaad Zuberi.” Though WR Group did not receive its first payment until July 17, Beltway Government Strategies began issuing checks to the firms it hired on July 4. Sri Lanka Central Bank records show no payments to Beltway Government Strategies.

While he remained unregistered, the lobbyists hired by Beltway and initially funded by money sent to Zuberi set about the work of influencing Washington. They made hundreds of contacts with government officials, think tanks, and journalists, and arranged meetings on Capitol Hill when their client was in town. On July 14, 2014, for example, Vass Gunawardena and his delegation met with Rep. Jason Chaffetz (R-Utah) and Rep. Paul Tonko (D-N.Y.) in the afternoon to discuss the U.S. relationship with Sri Lanka. A staffer in Tonko’s office said that they had a meet and greet with the Sri Lankan delegation and discussed the country’s strategic importance to U.S. policymakers.

That night Vass Gunawardena entertained members of Congress and staffers at Morton’s Steakhouse on Connecticut Avenue, which boasts that its patio “overlooks Washington’s infamous K Street Corridor, while the dining room caters to DC’s powerful elite.” Congressional ethics rules, which severely restrict the amount most outside interests can spend on food and drink for lawmakers and staff, exempt foreign embassies and their representatives — and the Sri Lankan official’s party of 15 made the most of it. They ordered 63 drinks — mixed, on the rocks, or straight up — plus two beers and three bottles of $150 wine, according to expense vouchers for the night obtained by FP. That included 40 Grey Goose vodkas on the rocks totaling some $520, two Grey Goose martinis, two tumblers of Johnnie Walker Black, and three Tanquerays with tonic. The final bill topped $4,000.

On Aug. 14, 2014 — 97 days after the Sri Lanka government paid him the initial installment of $3.5 million — Zuberi finally became a registered foreign agent for the country. Beltway filed on his behalf, listing his job as a consultant. The registration came just in time for him to use his access to arrange meetings between Vass Gunawardena’s delegation and members of Congress, as well as attend some of the lavish dinners the Sri Lankans had arranged.

“I registered for a short time because I was included in some conversations about the lobbying efforts,” Zuberi wrote to FP, “but I was not directly lobbying.”

Participating in a lobbying campaign without registering with the Justice Department carries legal peril. A former Republican member of Congress, Mark Siljander of Michigan, was sentenced to one year and one day in prison in 2012 for failing to register. In another case, Ben Israel, a Chicago man who shared $3.4 million in payments to provide public relations support to Zimbabwe, received a seven-month sentence in 2014.

On Sept. 10, 2014, Zuberi’s WR Group received its last $1 million payment for work done in August. According to a report filed with the Justice Department, Zuberi stopped working as a foreign agent for Vass Gunawardena and Sri Lanka on Sept. 30, 2014 — about six and a half weeks after he registered. Skarulis and Beltway listed that date as their last day as well.

The entire lobbying campaign cost $850,000, a fraction of the $6.5 million Zuberi and his company received. Zuberi would not say how the rest of the money was spent, only that “WR’s work was economic development, business development and attracting U.S. businesses to [Sri Lanka]. Most of the money you refer to was allocated to these efforts.” In any event, the end of the lobbying contract coincided with the termination of WR Group’s contract to provide consulting services to Sri Lanka.

 

“When we realized we weren’t going to make any major impact we wound down and [the government of Sri Lanka] stopped paying for the project,” Zuberi wrote to FP, adding that Sri Lanka “did not keep their payment commitment. There are still outstanding invoices to be paid.”

Among those outstanding invoices is one from a Beltway subcontractor. Madison Group disclosed on its last filing with the Justice Department that “Beltway Government Strategies is 6 months of arrears in payments and is in breach of contract.”

Unfortunately for Beltway, Zuberi, and the other lobbyists, unpaid invoices aren’t the biggest problem they face. In July, the lobbyists involved in Zuberi’s Sri Lanka project were subpoenaed by the Justice Department. In addition to requesting each firm’s financial records, the subpoena asks for information on relatives of Rajapaksa, the former president, as well as the government of Sri Lanka and its embassy in Washington.

Asked about the subpoenas, Zuberi wrote, “It is our policy not to discuss any legal matters which might or might not be,” adding that he had no business with the Rajapaksas while in Sri Lanka.

“Perhaps we were lucky that we didn’t encounter corruption,” Zuberi wrote, “but we only explored opportunities and didn’t really make any investment.”

The Sri Lanka experience hasn’t deterred Zuberi from seeking new business abroad. He continues to post on Facebook pictures of himself side by side with the powerful, most recently with Hillary Clinton. He documents his far-flung meetings as well — Geneva in May, Istanbul in July. Zuberi has had contacts in Turkey for some time; he accompanied members of Musiad, a Turkish business association close to President Recep Tayyip Erdogan, to a meeting with the director of the White House Business Council in 2014.

That meeting was more of a meet and greet than a substantial discussion, plus an opportunity to get their pictures taken.

“We are always looking [for] good investment opportunities,” he said.