A32 US NEWS India Abroad May 2, 2014
New York hotelier and Democratic fundrais- er Sant Chatwal pleaded guilty to conspir- ing to violate the Federal Election
At a hearing before United States District Judge
Leo Glasser, Chatwal pleaded guilty to conspiring
to making $188,000 of illegal campaign contributions to three US candidates — whose names were
not revealed — through straw donors who were
later reimbursed, and to witness tampering.
A straw donor is one who illegally pays another
person’s money to make campaign contributions
in his or her own name.
As part of a plea agreement, Chatwal, 70, agreed
not to appeal any prison sentence shorter than 5
years. He faces a maximum of 25 years in prison.
He was released on a $750,000 bail and also
agreed to forfeit $1 million to the government.
Media reports identified the candidates as former Secretary of State Hillary Clinton, Senator
Christopher J Dodd of Connecticut and United
States Representative Kendrick B Meek of Florida.
But the prosecution said that, ‘there is no allega-
tion that the candidates participated in, or were
aware of Chatwal’s scheme.’
‘Chatwal sought to buy access to power through
unlimited and illegal campaign contributions, fun-
neling money from the shadows through straw
donors. Chatwal’s scheme sought to subvert the
very purpose of the Election Act,’ said Loretta E
Lynch, US Attorney for the Eastern District of
New York. ‘Chatwal then rolled the dice to stymie
the government’s investigation, thinking he could
corruptly convince witnesses to his federal election
crimes to stay silent. That gamble did not pay off.’
Chatwal, chairman of the $1.5 billion luxury
Hampshire Hotels & Resorts, which owns and
operates hotels around the world, including the
Time and Dream hotels, filed for bankruptcy pro-
tection in 1995 and in 1997 and was sued by the
Federal Deposit Insurance Corporation for his role
in a failed New York bank.
He was charged in 2000 with bank fraud in
India, but was eventually dropped from the case.
According to court papers, from 2007 to 2011,
Chatwal used his employees, business associates,
and contractors who performed work on his hotels
to solicit campaign contributions on his behalf in
support of various candidates for federal office and
PACs, collect these contributions, and pay reimbursements for these contributions, in violation of
the Election Act.
Court papers say that Chatwal Associates
induced straw donors to make these campaign
contributions, promising them that they would be reimbursed.
The evidence against the hotel magnate includes an
October 2010 recorded conversation between him and a
business associate who became an informant. In the conversation, Chatwal reportedly underscored his view as to
the importance of political campaign contributions, stating
that without campaign contributions, ‘nobody will even
talk to you. . . . That’s the only way to buy them, get into the
system. . . . What, what else is there? That’s the only thing.’
Prosecutors said Chatwal also sought to obstruct the
grand jury investigation into his Election Act scheme by
tampering with a witness — a person whose business performed construction work for him, and who had recruited
straw donors at Chatwal’s direction.
A recorded conversation in June 2012 revealed that
Chatwal told the witness that if Federal Bureau of
Investigation and Internal Revenue Service agents
approached him or his family, they should not speak to
them and refer them to a lawyer.
During this conversation, the witness said that he would
not tell agents that Chatwal gave him money to reimburse
A few days later, in July 2012 another recorded conversation revealed that Chatwal directed the same individual to
lie to agents about the Election Act scheme.
He said he would pay for his legal fee in connection with
the investigation, and offered to conceal the money within a
payment for work his company had performed for Chatwal.
During the conversation, they discussed that investigators
were seeking copies of campaign checks in the individual’s
possession, and they then discussed that it was helpful
that some of the straw donors had been reimbursed with
The Election Act limits the amount and source of money
that can be contributed to a federal candidate or to an individual candidate’s political campaign committee and multi-candidate political campaign committees.
In 2008, the Election Act limited primary and
general election campaign contributions in a calendar year to $2,300 per campaign, for a total of
$4,600, from any one individual to any one candidate.
In 2010, the Election Act limited primary and
general election campaign contributions in a calendar year to $2,400 per campaign, for a total of
$4,800, from any one individual to any one candidate.
The Election Act also prohibits making a campaign contribution in the name of another person,
including giving funds to a “straw donor,” or a conduit, for the purpose of having the straw donor
pass the funds to a federal candidate as the straw
donor’s own contribution.
‘Attempting to buy elections through illegal
campaign contributions is unacceptable. It is also
illegal. Americans rightfully expect that elections
will be free and fair. The FBI will continue inves-
tigating every case of abuse, wherever we find it,’
George Venizelos, assistant director-in-charge,
FBI, New York Field Office, stated,
‘Mr Chatwal deeply regrets his actions and
accepts full responsibility for the consequences.
He looks forward to resolving this personal mat-
ter,’ said Lesley Bogdanow, a spokeswoman for
“The case will not affect the business. This is his
personal matter,” Bogdanow told India Abroad.
After he pleaded guilty, many politicians decided to return or donate the money he had given for
‘We are returning contributions raised by Mr
Chatwal and his family,’ said Jonathan Rosen, who
worked for New York Mayor Bill de Blasio’s campaign.
Chatwal and other family members donated
nearly $20,000 to de Blasio’s 2013 campaign. He
was also listed as an intermediary for other donations totaling about $10,000.
Virginia Governor Terry McAuliffe and Senator
Mark Warner are also donating to charity funds
tied to Chatwal. An adviser to McAuliffe’s political
action committee said the governor would donate
$4,300 to a nonprofit that provides free health
care to the poor.
A spokesman for Warner said the $1,000
Chatwal gave to Warner’s campaign in 2012 will
be donated to charity.
In 2010, Chatwal was conferred the Padma
Bhushan, India’s third-highest civilian honor.
When the award was announced, it created a
controversy in India. Opposition parties led by the
Bharatiya Janata Party had expressed disapproval
over the government’s decision, stating that
Chatwal’s controversial financial dealings made him
unsuitable for the honor.
The BJP leadership had drawn attention to an earlier
Central Bureau of Investigation probe of the hotelier in an
alleged fraud involving $9 million. Chatwal had allegedly
defaulted on paying back money he owed to the State Bank
However, the Indian prime minister’s office then clarified
that it was awarded after due process.
The government described him as a tireless advocate of
India’s interests in the US and also noted that there was no
case pending against him in India. But the Congress party
distanced itself from the decision.
‘The Padma awards are decided by the home ministry
after a due process. They might have their reasons for it.
Only the ministry can explain it.... We are not talking of any
specific case. But these awards should be given to people
who enhance its prestige and not to those who have a taint,’
Congress party spokesman Shakeel Ahmed said then.
Sant Chatwal pleads guilty to campaign fraud
When Bill Clinton, then governor of Arkansas, approached Chatwal for campaign help, the
hotelier organized a reception and then raised about $25,000, a huge amount for the
fledgling campaign. The friendship with the Clintons began thus. For Hillary’s presidential
run in 2008, Chatwal raised at least $100,000.