NAME THAT PARTY: Hotel Magnate Pleads Guilty to Campaign Finance Fraud

04/18/2014

Former Senator Chris Dodd and Sant Chatwal together at an event. (Photo: Paul J. Richards/AFP/Getty Images

Hotel magnate Sant Singh Chatwal, who has lavished campaign cash on everyone from Hillary Clinton to Mayor Bill de Blasio, pleaded guilty today in Brooklyn federal court to campaign finance fraud and witness tampering, U.S. Attorney Loretta Lynch announced.

Mr. Chatwal, 70, who runs a chain of luxury hotels and other companies, allegedly broke federal law by using straw donors–whom he called “conduits”–to make more than $180,000 in illegal campaign contributions to three candidates in an effort to gain access and influence federal regulations, according to a federal complaint.

Prosecutors alleged that, from 2007 to 2011, Mr. Chatwal “used his employees, business associates, and contractors who performed work on his hotels … to solicit campaign contributions on Chatwal’s 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.”

A source close to the investigation told the Observer the campaigns belonged to Ms. Clinton, former Connecticut Senator Chris Dodd, and then-Florida Congressman Kendrick Meek, who ran an unsuccessful U.S. Senate campaign in 2010. The source originally identified Majority Leader Harry Reid’s campaign, which has received Chatwal contributions, as one of the related cases, but later reached out to say that was incorrect.

Federal finance records show that a Mr. Chatwal contributed to Ms. Clinton’s 2008 presidential campaign. Multiple individuals with the same last name and hotel employer also gave to the Democratic Congressional Campaign Committee and a Democratic National Committee account, the records show.

Mr. Chatwal additionally appears to be a financial supporter of two federal lawmakers in Queens: Congressman Joe Crowley, the head of the DCCC, and Congressman Gary Ackerman, who recently retired. He also gave extensively to Mr. de Blasio’s mayoral campaign.

There is no allegation, however, that the candidates participated in, or were aware of, Mr. Chatwal’s scheme.

“The Election Act’s spending limits are in place to limit financial influence in federal elections and to ensure transparency as to the identity of donors. Chatwal sought to buy access to power through unlimited and illegal campaign contributions, funneling money from the shadows through straw donors.

Chatwal’s scheme sought to subvert the very purpose of the Election Act,” Ms. Lynch said in a statement.

“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,” she added. “Today’s conviction sends a clear message that this office is committed to vigorously investigating and prosecuting individuals who are responsible for committing crimes in connection with federal campaign donations and witness tampering.”

Investigators allegedly caught Mr. Chatwal on tape in October 2010, 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.”

He also allegedly attempted to interfere with a grand jury investigation into his dealings by tampering with a witness, telling someone involved in the scheme that he and his family should not talk to FBI or IRS agents, and should “Never, never,” admit to reimbursements. Later, he allegedly told the person, “cash has no proof.”

In a statement, a spokeswoman for Mr. Chatwal said, “Mr. Chatwal deeply regrets his actions and accepts full responsibility for the consequences. He looks forward to resolving this personal matter.”

Mr. Chatwal faces up to 25 years in prison and has agreed to pay $1 million as part of a plea deal.

His attorney did not immediately respond to a request for comment.

With reporting by Colin Campbell. This post was last updated at 2:30 p.m. with comment from Mr. Chatwal.

View the federal complaint below:

CHATWAL.information.lel Signed Rotated

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