Only a fraction of US$ 6.5mn–nearly Rs 1bn in today’s rates–paid by the previous regime in 2014 to an American fixer named Imaad Zuberi was spent on lobbying the US Government on behalf of the Sri Lankan Government and a massive 87 percent of the fee was spent by the agent on himself and his wife, according to court papers filed this week.
In July 2014, the Sunday Times exclusively exposed that the Government had engaged Mr Zuberi, who purported to be a lobbyist. The payments were so covertly done that neither the Cabinet nor Parliament knew. The payments were made through the Central Bank of Sri Lanka (CBSL) to evade oversight from either.
This week, the United States’ federal prosecutors filed a criminal case charging 49-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 said 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 CBSL 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 Central Bank of Sri Lanka (CBSL) had on their payroll numerous lobbyists and public relations companies.
At that time, documents we traced showed that the US$ 6.5mn Mr Zuberi received via the Central Bank went to a personal account and to the company that he hurriedly set up and called WR Group. We also reported that the Auditor General’s Department queried the CBSL for three consecutive years about the towering sums paid in fees to foreign lobbyists, consultants and public relations agencies.
The CBSL 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. 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 the US foreign policy and create business opportunities for his clients and himself, a statement 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 US officials. As evidence of his access and influence, Mr. 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 his 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 the information.
Mr. Zuberi, on the other hand, became wealthy, primarily as a 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 Zuberi’s own personal benefit,” the information states.