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US fixer faces jail term upto 13 years; charges include pocketing US$5.6mn from Lanka
View(s):Federal prosecutors filing in the US District Court this week have asked a judge to sentence American fixer and venture capitalist Imaad Zuberi to between 10 and 13 years in prison for an array of crimes, including pocketing US$ 5.6mn that Sri Lanka paid him in 2014 to improve the country’s image after its victory against the LTTE.
The deal Mr. Zuberi struck with the Sri Lankan Government was part of the case against him, US media said. In 2014, he was hired to help lobby US authorities after the war which had damaged Sri Lanka’s image. But Zuberi not only hid this contract from US officials, he kept US$ 5.6mn of the US$ 6.5mn Sri Lanka had paid him, court records state. This amounts to 87 percent of the fee.
The Sunday Times first exclusively exposed in July 2014 that the then Mahinda Rajapaksa Government had engaged Mr Zuberi, who purported to be a lobbyist. The payments were so covertly done that neither the Cabinet nor Parliament knew.
And they were made through the Central Bank of Sri Lanka (CBSL) to evade oversight from either. Current State Minister Nivard Cabraal was the CBSL Governor at the time.
Federal prosecutors have filed a criminal case charging 50-year-old Mr Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level US government officials.
The criminal charges allege that Mr Zuberi engaged in lobbying efforts that earned him millions of dollars, most of which was pilfered from his clients, and Mr Zuberi has agreed to plead guilty to those charges at a later date, pursuant to a plea agreement.
One of those clients was the Sri Lankan Central Bank which signed an agreement with a company set up by Mr Zuberi. The full contract was worth US$ 8.5mn but the Sri Lankan Government stopped after paying US$ 6.5mn. The court papers reveal that US$ 5.6mn of this was directed “to the benefit of defendant Zuberi and his spouse”.
The Sunday Times repeatedly questioned the manner in which billions of rupees were being funnelled into public relations firms and lobby groups, particularly in 2014. At any given time between 2008 and the end of 2014—more than six years—Sri Lanka’s mission in Washington, the Office of the Monitoring Member of Parliament (MMP) for the Ministry of External Affairs or the CBSL had on their payroll numerous lobbyists and public relations companies.
And documents we traced at the time showed that the US$ 6.5mn Mr Zuberi received via the Central Bank went to a personal account and to company that he hurriedly set up and called WR Group. We also reported that the Auditor General’s Department queried CBSL for three consecutive years about the towering sums paid in fees to foreign lobbyists, consultants and public relations agencies.
The Central Bank became the preferred channel for such payments because its accounts do not go before Parliament. The Treasury or any other Ministry would have needed Parliament’s permission to make such large outlays. The Cabinet was circumvented. And, in the case of most payments, the External Affairs Ministry was also bypassed.
Mr Zuberi, who operated a venture capital firm called Avenue Ventures, solicited foreign nationals and representatives of foreign governments with claims he could use his influence in Washington, DC to change United States foreign policy and create business opportunities for his clients and himself, a media release from the US Department of Justice said.
According to court documents, clients gave Mr. Zuberi money for consulting fees, to make investments, or to fund campaign contributions. As part of his efforts to influence public policy, Mr Zuberi hired lobbyists, retained public relations professionals and made campaign contributions – which gave him access to high-level U.S. officials, some of whom took action in support of his clients. As evidence of his access and influence, Zuberi distributed to his clients photographs of himself discussing policy with elected officials.
While some U.S. officials were willing to take action on issues Mr. Zuberi put forward, most of Mr. Zuberi’s business efforts were unsuccessful and his clients suffered significant losses. Many of the lobbyists, public relations consultants, and other subcontractors also suffered losses when Mr. Zuberi refused to pay them, according to court documents.
Mr. Zuberi, on the other hand, became wealthy, primarily as the result of fraudulent representations about his background, influence, and the use of client funds, much of which constituted an “outright conversion of client money for defendant Mr. Zuberi’s own personal benefit,” the information states.
When the case was taken up this week, Federal prosecutors also pushed for a US$ 10mn fine and more than US$ 15mn in unpaid taxes. Mr. Zuberi has pleaded guilty to several charges, including tax evasion, federal lobbying and campaign finance violations. His sentencing is scheduled for November 30.