The Strange Case of Super CEO Marsha Lazareva

Even as President Trump denies US military hackers have been carrying out cyberattacks on Russia’s electrical grid, and Moscow accuses Washington of trying to provoke a war with Iran, the American, British, and Russian political establishments all seem to have found a small sliver of common ground in an unexpected place—unfortunately, for very strange, if not suspicious reasons.

For several months now, a bevy of powerful Americans and Britons have joined forces with the Russian government over the fate of one woman: Russian national Marsha Lazareva, chief executive of the Kuwait & Gulf Link Investments (KGL). Lazareva was found guilty of embezzlement in May, 2018 by a Kuwaiti court. Although this was later annulled by Kuwait’s Court of Appeal, her case is ongoing and legal actions surrounding KGL continue to surface.

The private equity and venture capital firm “seeks to make investments in companies that offer air, sea, and land freight forwarding, project logistics, port management, stevedoring, warehousing and distribution and logistics infrastructure,” and holds upwards of $1 billion in sensitive contracts from the U.S. military, despite having been accused by numerous critics, including Sen. Marco Rubio, of maintaining illegal ties to the Iranian government in contravention of U.S. and international sanctions.  In addition to being accused of still doing business with Iran, KGL has been the subject of formal inquiries from US Senator Claire McCaskill because of accusations it helped facilitate and encourage “systematic leaking of sealed and privileged federal court documents and other sensitive material to KGL’s Washington lawyers by the Defense Logistics Agency (DLA), the DoD component that oversees KGL’s US military contracts.”

The nature and scope of KGL’s military contracts

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KGL has been one of the largest logistics supply companies working with the US military in the Middle East for over twenty years, and has also worked with other large bodies such as the United Nations on logistics contracts. More specifics of KGL’s contractual relationship with the US military and Department of Defense reveal deep and significant ties. Reuters reported in 2018 on KGL co-winning a contract, set to run for up to seven years and worth $230, million to provide car rentals to the US military.

Further reporting from 2018 details extensive contracting of KGL by the US Data and Logistics Agency (DLA) to “carry out logistics and distribution operations for US troops throughout the Gulf region.” To cut through the euphemistic language here, the contract, worth about $700 million and projected to hit $1.4 billion by 2022 sees KGL agreeing to import, store and distribute food products from the US and “other local sources” to over 20,000 US troops stationed in Kuwait, Iraq and Jordan. 

Clearly, the connections of KGL to American military presence in the Middle East make the company important to the US Department of Defence and the defence industry. As accusations have rolled in against KGL the military and DOD’s response has been consistent: “Spokespersons at CENTCOM, the Department of Defense, and the US Army’s Contracting Command all declined to comment.” 

A concerted campaign to free Lazareva

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Marsha Lazareva, for her part, was recently let out on bail from Kuwaiti prison after 470 days where she had been serving time for embezzlement, although her case is ongoing. Almost no information is available on how Lazareva was able to pay the near $40 million dollar bond, beyond reporting in Forbes about some assistance to Lazareva from “an unnamed Kuwaiti dignitary.”

Recent revelations indicate the enormous wads of cash KGL has spent on lobbying to get her out; publicly available US lobbying records for the first quarter of 2019 alone show $2.7 million going to the lobbying effort in the US to spring Lazareva from jail. Glowing media attention on Marsha Lazareva’s case decrying the injustices against her has also abounded, especially in the Middle East.

The laundry list of Lazareva’s backers includes a number of well-connected individuals from the Republican establishment in the U.S.: former FBI Director Louis Freeh, President George W. Bush’s brother Neil Bush, former Florida Attorney General Pam Bondi, former Veterans Affairs Secretary Jim Nicholson, Scott Douglas (the former finance director for Senate Majority Leader Mitch McConnell), and former Republican Rep. Ed Royce, to name but a few. In the UK, the effort has roped in Tony Blair’s wife Cherie and Lord Alex Carlisle, as well as Boris Yeltsin’s daughter Tatyana Yumasheva. Needless to say, the Russian government is fully on board, telling Kuwait they want Marsha Lazareva out of prison and cleared of charges. 

The details of American lobbying on Lazareva’s behalf are revealing for their scope and for the breadth of Washington’s who’s-who involved, including prestigious firms Ballard Partners and Crowell & Moring, and upwards of a dozen lobbyists in the U.S. working hard to clear Lazareva’s name and to get people to pay attention to the case on her behalf. 

More about Lazareva’s case

Marsha Lazareva—who was educated at President Trump’s alma mater, the Wharton School of Business—was convicted in May 2018 and sentenced to ten years for financial crimes, including embezzlement of an alleged $500 million, along with fellow KGL executive Saeed Dashti. 

Specifically, “the indictment says Dashti and Lazareva transferred large sums of investors’ money to their own private accounts and to a variety of KGL subsidiaries or related companies between 2007 and 2015. They did this, court documents say, partly using a network of financial institutions including the Hong Kong and Shanghai Banking Corporation (HSBC) and one of its branches in the Cayman Islands. The bank also has branches in the United States, Kuwait, Asia, and other parts of the world. It’s unclear whether any of the allegedly embezzled funds passed at some point through the American financial system, which could trigger a US investigation.”

The pair were first arrested in 2017 after being accused of embezzling from the Kuwait Port Authority. Kuwaiti prosecutors and officials allege the duo vastly under-reported the proceeds of the sale of a KGL-affiliated venture in the Philippines. In the ensuing drama, Marsha Lazareva claims to have faced sexism and anti-Russian racism during Kuwaiti court proceedings. She also claims that her defense counsel did not have proper access to documents explaining details of the accusations against her.

Lazareva’s legal team, for its part, insists she was held illegally in contravention of international law and that her arrest is part of a conspiracy by Kuwaiti government higher-ups to financially destroy her and supplant the power of KGL. They also claim the proceedings that landed her in jail were a thinly-supported show trial based on forged documents. Victoria Toensing of Crowell & Moring, who is part of counsel for Lazareva, wrote an op-ed in September of 2018 for Daily Caller saying that Kuwait was engaging in “ruthless intimidation tactics” based on “bizarre and unfounded” accusations.

Attacking America’s allies

When Neil Bush traveled to Kuwait this May prior to Marsha Lazareva’s release, he gave a cringe-worthy statement to media, expressing his hope that “Kuwait would continue to shine as a member of civilized nations in terms of its human rights record and its judicial process.” Perhaps any day now Bush will say the same about Saudi Arabia or the United Arab Emirates, protesting their prison conditions and human rights violations. But don’t hold your breath.

As Bush himself put it, “the tricky thing, honestly, is not to be seen as intervening in Kuwaiti internal affairs.” Rather than heed his own advice, however, Bush seems to have done just that: interfere directly in Kuwaiti affairs—insulting the government’s integrity and justice system for the sake of personal gain. This is political hypocrisy of the highest order, and typical of how some politicians and power-brokers are willing to put money above national security and vital alliances. 

Lazareva’s individual legal case aside, what’s most interesting is the spectacle of prominent American establishment figures accepting gargantuan lobbying contracts to undermine and attack one of America’s important allies, Kuwait, at a time of high tension in the Persian Gulf. The fact that they are doing so on behalf of KGL—a company which also stands accused of large scale money laundering—makes the situation all the more problematic. 

As Adam Zagorin of the Project on Government Oversight noted, a 2017 criminal indictment of KGL raised a bevy of troubling potentialities, charging years of corruption, money laundering and criminal activity at the firm between 2007 to 2015. Indeed, KGL has faced numerous “accusations of potentially illicit flows of cash from Russia, Iran, and Syria,” which, “raise troubling questions about the American military’s heavy reliance on the firm.” 

Extensive links with Iran – America’s supposed number one enemy

As Senator Rubio noted in 2018, testimony gathered under oath indicates KGL has been contravening the sanctions against Iran, illegally selling lucrative aircraft parts, and engaging in money laundering and fraud. According to the Kuwait Port Authority, KGL illegally trespassed, fell behind on debts and falsified important financial documents. The port authority blacklisted KGL in 2017 and will no longer do business with the company or any of its affiliates. 

As Zagorin details, KGL’s alleged wrongdoing goes back years, to when it reportedly created a “ghost structure” to bypass U.S. sanctions against Iran. Specifically, KGL’s relationship with the Islamic Republic of Iran Shipping Lines (IRISL) and affiliates like Valfajr—which was already sanctioned in 2008 for assisting Iran’s nuclear program and missile development—have been under intense scrutiny. Indeed, KGL has already been investigated for years by the FBI and the Pentagon’s Defense Criminal Investigative Service; it’s unclear whether these probes are still ongoing.

If KGL has been working behind US sanctions to do business with Iran as both indictments and former employees allege, shouldn’t America cut ties immediately? Or could it be that some of the public posturing about Iran is more rhetoric than real alarm?

Strange bedfellows

All the same, it’s surreal, particularly in the face of the current political stand-off with Russia, to watch figures like Neil Bush and Ed Royce stand arm-in-arm with Moscow over the fate of a suspect individual working for a deeply-compromised company with years of still-unresolved legal allegations. Bush insisted an Arabian Business interview that the Trump administration has taken an active interest in the case. “To see these countries working together, you know, kind of gives us a little bit of hope in these crazy times,” he said. 

Despite all their protestations and high-handed denunciations of Russian malfeasance, it turns out that the Washington establishment is perfectly happy to echo Russian Foreign Minister Sergei Lavrov’s demands that Lazareva be cleared —for the right price.

Paul Brian is a freelance journalist. He has reported for the BBC, Reuters, and Foreign Policy, and contributed to The Week, The Federalist, and others. You can follow him on Twitter @paulrbrian or visit his website www.paulrbrian.com.

 

Sourse: theamericanconservative.com

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