Thomas Barrack, a private equity investor who is a close friend of former President Donald Trump, was arrested Tuesday morning in Los Angeles on federal charges related to illegally lobbying Trump on behalf of the United Arab Emirates.
Barrack, who was charged with two other men in a seven-count indictment in Brooklyn, New York, federal court, was chairman of Trump’s 2017 inaugural fund, and had served as an advisor to him when Trump ran for president.
The Santa Monica, California, resident is accused with the other defendants of secretly advancing the interests of the UAE at the direction of senior officials of that country by influencing the foreign policy positions of Trump’s 2016 campaign, and then the foreign policy positions of the U.S. government during Trump’s presidency through April 2018.
The indictment noted that Barrack during that time informally advised American officials on Middle East policy, and also sought appointment to a senior role in the U.S. government, including as special envoy to the Middle East.
Charged with the 74-old Barrack are Matthew Grimes, 27, of Aspen, Colorado, and a 43-year-old UAE national, Rashid Sultan Rashid Al Malik Alshahhi.
Grimes, who had worked at the Barrack-founded private equity firm Colony Capital, was arrested in California on Tuesday.
“On multiple occasions, Barrack referred to Alshahhi as the UAE’s ‘secret weapon’ to advance its foreign policy agenda in the United States,” the Justice Department said in a press release.
Barrack also is charged with obstruction of justice and making multiple false statements during a June 2019 interview with federal law enforcement agents.
“The defendants repeatedly capitalized on Barrack’s friendships and access to a candidate who was eventually elected President, high-ranking campaign and government officials, and the American media to advance the policy goals of a foreign government without disclosing their true allegiances,” said acting Assistant Attorney General Mark Lesko of the Justice Department’s National Security Division.
Thomas Barrack, chairman and chief executive officer of Colony Capital Inc., gestures while speaking during the closing reception at the Milken Institute Japan Symposium in Tokyo, Japan, on Monday, March 25, 2019. The conference brings together business leaders and government officials to discuss geopolitical, economic and social issues facing Japan. Photographer: Kiyoshi Ota/Bloomberg via Getty Images
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“The conduct alleged in the indictment is nothing short of a betrayal of those officials in the United States, including the former President,” Lesko said in a statement.
Prosecutors in a memo seeking Barrack’s detention in Los Angeles pending his bail hearing in Brooklyn at a later date said that Barrack in communications with Alshahhi “framed his efforts to obtain an official position within the Administration as one that would enable him to further advance the interests of the UAE, rather than the interests of the United States.”
“When the defendant sought a position as either U.S. Ambassador to the UAE or Special Envoy to the Middle East, he advised Al Malik that any such appointment ‘would give ABU DHABI more power!’ the memo said referring to the main city in UAE. “Al Malik concurred that, if the defendant successfully obtained an appointment to such an official position, it would make the defendant ‘deliver more’ for the
UAE, making their efforts a ‘[v]ery effective operation.’ The defendant agreed.”
A spokeswoman for Trump did not immediately respond to a request for comment on Barrack’s arrest.
Matthew Herrington, an attorney for Barrack, told CNBC that his client was arrested in Los Angeles “despite the fact that we’ve cooperated with this investigation from the outset.”
Barrack stepped down as CEO of Colony Capital in 2020. He resigned as executive chairman of the firm in April.
Federal prosecutors have been investigating Barrack’s alleged work on behalf of UAE for at least two years.
One of the events that caught their attention was a speech about energy policy that Trump gave as a candidate for president in May 2016.
The indictment charges that Barrack “inserted language praising the UAE” into the speech, and “emailed an advance draft of the speech to Alshahhi for delivery to senior UAE officials.”
For the next two years, prosecutors allege, Barrack “sought and received direction and feedback, including talking points, from senior UAE officials in connection with national press appearances Barrack used to promote the interests of the UAE.”
“During this time, Barrack never registered as a lobbyist for the UAE, as required under the Foreign Agents Registration Act,” the indictment says.
A friend of Trump’s for decades, Barrack emerged as an early backer of Trump’s presidential bid long before many on Wall Street considered the real estate developer a serious contender for the White House.
By the spring of 2016 when Trump began to sweep primaries, Barrack and Trump’s daughter Ivanka Trump convinced him that he needed to hire a real campaign manager.
Barrack pressed Trump to bring on Paul Manafort, a longtime Washington fixture and Republican lobbyist.
Manafort eventually rose to the position of Trump campaign chairman before he was forced to step down in August of 2016 following reports of foreign lobbying he did on behalf of Ukrainian politicians. Both Manafort and Barrack hoped their cooperation in 2016 would accrue to each man’s benefit.
Barrack wanted to be appointed Middle East envoy in a future Trump administration. But after Trump won the White House, Trump’s son-in-law Jared Kushner intervened, and Barrack did not get the job.
Manafort, meanwhile, had hoped that Barrack’s connections in the Middle East would translate into lucrative business for Manafort’s lobbying practice.
But the years-long investigation by Special Counsel Robert Mueller put an end to the hopes of Barrack and Manafort to rise to positions of prominence in the Trump White House.
Questions about Barrack’s foreign lobbying first came to light during Mueller’s investigation, according to prosecutors.
By the end of his probe, Mueller had referred a total of 14 criminal cases to prosecutors, most of which remain sealed to this day.
In 2019, Manafort was found guilty by a jury of eight felonies related to foreign lobbying and tax evasion. He served just under two years in prison and was released in June of last year.
Trump later pardoned Manafort shortly before leaving the White House.