‘Karma works’: Donald Trump ally Tom Barrack fights criminal charges over UAE ties


Soon after Donald Trump barred refugees and many Muslims from entering the US in the opening days of his administration, the financier Tom Barrack appeared on television to try to calm the country’s nerves.

Barrack had been a critical early backer of Trump’s long-shot candidacy, promoting him at the 2016 Republican convention and helping to raise tens of millions of dollars for the campaign. Now, in January 2017, he was trying to explain what had already become a divisive presidency.

“[Trump] was elected because [a] segment of America is fed up with the consistency and transparency of the elitists,” said Barrack, a private-equity investor who had sold the future president a $400m hotel in the 1980s. As for the travel ban, “the only way to end radicalism is to help ‘good’ Islam”, he said.

The interview appeared to please the government of the United Arab Emirates, a wealthy Gulf state whose citizens were exempt from Trump’s sweeping travel restrictions. “Wow that’s exactly what I wanted,” said an Emirati who acted as an intermediary for his country’s top leaders, in a text message to one of Barrack’s top aides, according to US authorities.

Barrack, the 74-year-old Lebanese-American founder of Colony Capital, is now fighting a charge of acting as an illegal agent of the UAE, among other criminal allegations. He and his top aide Matthew Grimes, who was also charged, pleaded not guilty on Monday in a federal court in New York.

Matthew Grimes, centre, arrives at a federal court in New York on Monday © Bloomberg

Afterwards Barrack vowed to prove his innocence, adding: “The Statue of Liberty . . . is made of steel with a patina of copper. We’re in the middle of a very heated moment and I can only tell you that the hardest steel is forged from the hottest fire.”

The case opens a window on to a period of freewheeling American diplomacy that coincided with efforts by the UAE and other Middle Eastern nations to gain influence in the US after years of testy relations with the Obama administration.

It also reveals the extent to which wealthy Trump acolytes may have exerted a hidden influence on US foreign relations — possibly, in Barrack’s case, with the foreknowledge of the UAE’s de facto ruler, Abu Dhabi crown prince Sheikh Mohammed bin Zayed al-Nahyan.

The text message that Grimes received in January 2017, detailed in an indictment unsealed in federal court last week, was one of more than a dozen exchanges in which Barrack is alleged to have co-ordinated media appearances with the UAE and lobbied in Washington on behalf of the country’s officials.

Prosecutors accused Barrack of trying to install candidates favoured by Abu Dhabi in key US diplomatic positions and abuse his access to officials in Washington to win backing for Emirati priorities. The alleged crimes are “nothing short of a betrayal of . . . officials in the United States, including the former president,” said Mark Lesko, a US Department of Justice attorney who leads its national security division.

The following account is drawn from interviews with officials and people in Barrack’s circle, together with a Financial Times review of hundreds of pages of testimony, documents and analysis made public by congressional committees over the past two years. Together, they reveal that the criminal scheme alleged by prosecutors represents just one way in which Barrack’s connections to Trump and Middle Eastern rulers seemed to lend him a role in statecraft and an edge in business.

Barrack was pursuing an audacious plan to buy part of Westinghouse, the American nuclear company, and begin exporting reactors to Saudi Arabia, a UAE ally. He aired the plan with senior figures at three big investment groups: Apollo Global Management, Blackstone and Brookfield Asset Management, according to Congressional investigators. But the proposed transfer of sensitive nuclear technology to a chaotic region so alarmed some in the US national security world that they blew the whistle to Congress.

The day after he defended Trump’s travel ban, with protesters still streaming into US airports to rally against the policy, Barrack emailed Steve Bannon, the policy’s architect, a copy of his nuclear proposal, according to files released by the US House Oversight committee in 2019. “Steve . . . an elegant thought that could be backed immediately by the Kingdom [of Saudi Arabia] and the UAE,” Barrack wrote. “[It] would balance the current noise!”

Returning favours

Barrack’s approach to business calls for doing favours whenever possible and demanding little in return. “Karma really works,” he told an audience some years ago. “It works, eventually.”

The good deed that ultimately gave Barrack inside access to Trump’s Washington was requested in early 2016 by Paul Manafort.

An American political consultant who had worked in eastern Europe, Manafort wanted Barrack to help install him as Trump’s campaign manager. Another Trump associate, Republican operative Roger Stone, urged Barrack to grant the favour. “You are the only one who can do this,” Stone wrote in an email to Barrack. “Donald sees you as a peer — the rest of us are just vassals.”

For weeks, Barrack pressed Manafort’s case with Trump, his daughter Ivanka and her husband Jared Kushner. Manafort was finally appointed that March. “[W]e are going to have so much fun,” Manafort later wrote to Barrack, “and change the world in the process.”

Manafort resigned after less than six months, but that was enough time for Barrack to reap his karmic reward. Having demonstrated his ability to sway Trump, it appears Barrack was cultivated by an influential Arab state that was looking to restore its clout in Washington.

In April 2016, prosecutors said, Barrack received an email from Rashid Al-Malik, an Emirati living on a student visa in Los Angeles who has also been charged with acting as an unregistered foreign agent. Malik wanted Barrack to meet the first of five Emirati officials who allegedly helped steer the illegal lobbying.

Tom Barrack, left, greets Donald Trump at his inauguration ceremony in Washington on January 20, 2016 © Getty Images

Those officials are not named in the indictment, and none is accused of any wrongdoing. Barrack praised two of them by name during a specific television interview in September 2016 that was cited by prosecutors. The disclosure strongly indicates that prosecutors are referring to Sheikh Mohammed and his brother, national security chief Sheikh Tahnoon bin Zayed al-Nahyan.

Barrack seemed determined to prove his worth. As Trump prepared to give a speech on energy policy, Barrack emailed Malik asking for “a few pro Middle East aspects” that he later passed along to Manafort, according to files released by Congress. After several iterations, Manafort emailed back “the most likely final version”, adding: “It has the language you want.”

UAE officials argue that its outreach was nothing unusual. “[Trump’s] was an unconventional campaign with no person running the foreign policy portfolio,” said a person briefed on the issue by the Gulf state. “Obviously, the UAE had relations with Barrack and every government in the world was trying to figure out who Trump was and how to connect with him.”

The day after Trump won, Malik allegedly arranged for Barrack to speak with a senior Abu Dhabi official by phone. Prosecutors say that soon afterwards, Barrack travelled to the UAE to meet another official who they did not name in the indictment. But the filing, together with Barrack’s television appearance, make clear that it was Sheikh Mohammed, sometimes known as MBZ, the man who is credited with making the UAE one of the most influential states in the Middle East.

Writing in Arabic to Emirati officials a few days later, Malik discussed plans to influence the incoming US administration, according to the indictment. He sounded confident. Barrack, Malik wrote, would “be with the Arabs”.

‘Give Abu Dhabi more power!’

Requests from Abu Dhabi began arriving three days after Trump’s inauguration.

The first took aim at the Muslim Brotherhood, an Islamist organisation with myriad affiliates including groups that participate in elections in the Middle East. On January 23, 2017, prosecutors said, Malik told Grimes about a “great opportunity” for the US to list the Brotherhood as a terrorist organisation.

The move would have cut off funding to an Islamist movement viewed by Sheikh Mohammed as a threat to the stability of the region. “This will be a huge win. If we can list them,” Malik allegedly wrote, referring to a proposal to designate the Brotherhood as a terrorist organisation. “And they deserve to be.” (Although the Trump administration reportedly considered the move, it did not label the Brotherhood a terrorist organisation.)

Abu Dhabi also sought help prosecuting its dispute with Qatar. After the UAE and its allies imposed a regional embargo on their gas-rich neighbour in June 2017, some US officials hoped that a summit with Middle Eastern leaders at Camp David, outside Washington, could resolve a conflict that pitted US partners in the Gulf against each other.

But Abu Dhabi wanted to nix any such summit to keep up the pressure on Doha. Barrack allegedly tried to help. He “wanted to tell . . . the [president] don’t do it”, Malik reported back to Emirati officials, in an exchange recorded in court documents, “but can’t specify the Camp David”.

Barrack made his own request, too. “It would be helpful to have MBZ mention [to Kushner] how much he would like my help,” Barrack wrote to Malik in early 2017, according to documents released by Congress. By April 2017, the conversation had shifted to Barrack’s potential appointment as US ambassador to the UAE. “Would give Abu Dhabi more power!,” Barrack told Malik, according to prosecutors.

Abu Dhabi maintains that it sought to communicate with Trump’s White House through diplomatic channels as it would with any administration. “We have always engaged with both parties — those both in and out of the White House and on both sides of the aisle in Congress,” Yousef Al Otaiba, the UAE’s ambassador to the US, said in a statement to the Financial Times. “US and other diplomats do the same in their posts around the world — engaging directly with government officials and with opposition leaders as well.”

Middle Eastern Marshall Plan

Months before Barrack’s request for help from Sheikh Mohammed, Michael Flynn, Trump’s national security adviser, forwarded the White House a draft document that would have given the Colony chief another grandiose role overseeing a “Marshall Plan for the Middle East”. Styled after US reconstruction efforts in postwar Europe, the plan would have entailed selling nuclear reactors to Saudi Arabia — potentially handing Barrack a financial windfall.

Nobody is accused of wrongdoing in connection with the plan to export nuclear technology to the Middle East, which does not figure in the government’s criminal case against Barrack. Still, the proposal rang alarm bells in the intelligence community. Some in the nuclear industry believed it would only be viable if the Trump administration agreed to waive export restrictions that are intended to prevent civil nuclear technology from being adapted to build weapons.

Barrack discussed the proposal with the leaders of at least three big investment firms. US investors would have provided 51 per cent of the capital to buy Westinghouse out of bankruptcy, according to a proposal written by Colony Capital. “The PIF will most likely be [the Saudi] funding source of . . . possible Westinghouse [joint venture],” Michael Hewitt, the chief executive of a nuclear industry consortium called IP3, wrote to Barrack in March 2017, in what Congressional investigators believe was a reference to the Saudi Arabia’s Public Investment Fund, which is chaired by crown prince Mohammed bin Salman.

“I’ve spent a lot of personal time on this,” Barrack wrote to Blackstone chief executive Stephen Schwarzman that September, according to files released by the House oversight committee. “Many thanks for allowing us to participate with you in the Westinghouse bid,” he wrote to Apollo Global Management co-founder Josh Harris the following month. (The House report did not say what became of Barrack’s approach, and Apollo and Blackstone have said they never partnered with Barrack on a bid for Westinghouse.)

Westinghouse was acquired by Toronto-based Brookfield in January 2018, and the House report shows that Barrack immediately began courting the reactor-maker’s new owners. “We would love to have you involved,” Bruce Flatt, Brookfield chief executive, told Barrack soon afterwards. An internal Colony presentation stated that Barrack’s firm had been “invited to make a $50m co-investment alongside Brookfield in their $4.2bn acquisition of Westinghouse”.

Brookfield told the FT that no co-investment ever materialised. It added that “no political influence was solicited or involved” in its talks with Colony, and that Westinghouse regularly explores civilian nuclear projects “in various jurisdictions and always does so in accordance with all US laws”.

Back channels

The Barrack case has implications for other senior figures in finance, business and real estate whom Trump leaned on to perform roles typically entrusted to career diplomats and political appointees. Elliott Broidy, a 63-year-old financier who last year pleaded guilty to lobbying on behalf of Beijing for the extradition of a Chinese dissident, received a pardon from Trump. But few others can expect clemency if convicted while Joe Biden is president.

“Particularly in the higher levels of the Trump administration, there was a preference for back channels rather than transparent and official channels,” said Michael Atkinson, a partner at Crowell & Moring who for two years from 2016 was a senior official in the US Department of Justice’s national security division. “Those back channels became a new norm, as we saw with Russia, Ukraine and China as well. It would not surprise me if there are other individuals who are similarly situated [to Barrack] with regard to this type of conduct.”

Additional reporting by Amanda Chu in New York


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Autore dell'articolo: Redazione EconomiaFinanza.net

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