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 Chatwal pleaded guilty in Federal District Court in Brooklyn last Thursday to circumventing federal campaign contribution laws and witness tampering. He admitted that he had funneled more than $180,000 in illegal contributions between 2007 and 2011 to three federal candidates including Hillary Clinton. For her presidential run in 2008, he had raised over $100,000. Evidently, most of funds so collected were tainted and were due to an elaborate straw donor scheme in which he illegally reimbursed donors for their contributions.
The 70-year old hotelier who owns Chatwal and the Dream Hotels and the Bombay Palace restaurant chain moved to the USA via Ethiopia in 1974.He developed a strong political clout because of his friendship with the Clintons that goes back several years. He had donated directed more than $200,000 through his businesses to Hillary’s 2000 Senate campaign, when unregulated “soft-money” donations were still permissible.
He has been involved in several controversies and financial and legal problems in both the United States and India. He filed for bankruptcy twice in 1995 and 1997, facing allegations of bank fraud and owing millions in back taxes. Now a US citizen, he had been charged in 2000 with bank fraud in India, but was eventually dropped from the case.
It is not hard to figure out his motivation for such donations, their illegality notwithstanding. According to information filed by federal prosecutors in 2010, he described the importance of the donations to a government informant in a recorded conversation: “Without that nobody will even talk to you. When they are in need of money,” he said, “the money you give, then they are always for you. That’s the only way to buy them.”
In what may be a par for the course in India with the political big-wigs getting away by breaking several similar laws even during the present ongoing election campaign, straw donations are illegal in the US. To reimburse straw donors for contributions made to a third candidate, he would instruct a contractor involved in the scheme to pad an invoice for work done for one of his businesses by $69,000 to cover some of the contributions, according to prosecutors.
The Chatwal family including his two sons, own 12 hotels in New York and one in Miami and Bangkok. The family also owns one in Kochi in India; at one stage there were reportedly17. During one of his visits to India for a launch, he had made a statement that his group planned to open 100 hotels in India-this was before the global recession hit, however.
By 2012, both the Internal Revenue Service and the Federal Bureau of Investigation were already watching his activities. He was recorded several times telling an associate to lie about the donations, according to court records.
He has been released on $750,000 bail, forfeited his passport and agreed to forfeit $1 million to the government. His sentencing is scheduled for July 31. What a shameful fall from a height for this a flamboyant but controversial family!
In a statement, a spokeswoman has said, ‘Mr. Chatwal deeply regrets his actions and accepts full responsibility for the consequences.’
Subhash Arora |