In June, Federal Advocates, a Washington D.C. lobbying firm with close ties to President Donald Trump and his family, hired Hassan Nasser Fawaz, a Lebanese banker, to introduce the firm’s lobbyists to potential clients who had been sanctioned by the United States Treasury Department.
One problem: It isn’t legal for American companies to lobby for sanctioned individuals, which would make Fawaz’ intended work with Federal Associates potentially risky. Representing sanctioned individuals as a lawyer is allowed, but unlicensed lobbying for them—not so much.
“This is a rather clear-cut area of law, and lobbyists would be personally playing with fire if they ignore their legal obligations,” explained Tyler Cullis, an expert on U.S. economic sanctions at the law firm Ferrari & Associates.
Fawaz certainly has experience with sanctioned entities. A Government Accountability Project investigation for The Daily Beast shows that before he became Federal Advocates’ Senior Director of International Affairs Fawaz had stints at sanctioned institutions which, according to the U.S. Treasury Department, were used by Hezbollah and a notorious drug trafficker.
Fawaz says that these institutions—like his potential clients—were unfairly sanctioned.
“I approached the firm so that I can help people to have a fair chance,” Fawaz said in an email responding to our questions. “People that have been unrightfully sanctioned… in case people want to do business with sections of the american [sic] government.“
For now, Federal Advocates’ President Michael Esposito is sticking with Fawaz—even as he downplayed the firm’s connections to him. “As the Firm’s client base expands into new regions (internationally and domestically) we sometimes bring in advisers to provide consultation to the Firm on business and political culture and interests. Mr. Fawaz serves in this capacity and is not a full-time employee of the Firm. As an adviser, Mr. Fawaz is not in contact with or working on behalf of any of the Firm’s current or former clients. We are unaware of any charges against Mr. Fawaz,” Esposito said in a statement. He did not respond to follow-up questions.
“ Michael Esposito is the only D.C. lobbyist who worked for Mr. Trump. No other Washington, D.C. lobbying firm enjoys a previous working relationship with both President Trump and his immediate family. ”
— Briefing materials for Federal Advocates lobbying firm
The firm has high level connections within the Republican Party. Esposito is a member of the Trump Victory Finance Committee and an adviser to President Trump and Ronna Romney McDaniel, the Republican National Committee’s chairwoman.
“Michael Esposito is the only D.C. lobbyist who worked for Mr. Trump,” said a packet of Federal Advocates’ briefing materials, which explained Esposito had helped the president, Eric Trump and Jared Kushner with real estate deals. “No other Washington, D.C. lobbying firm enjoys a previous working relationship with both President Trump and his immediate family.”
Federal Advocates isn’t exactly risk averse—it recently registered as a lobbyist for Huawei, the Chinese telecommunications company accused of helping African governments spy on political opponents and running a secret office in Iran—but working with Fawaz may be too much for the firm’s allies on Capitol Hill.
It’s still unclear how Fawaz’ relationship with one of President Trump‘s favorite lobbying firms was brokered. The key to answering that question may lie with a web of connections around the late Ahmad Chalabi, known as “the man who pushed America to war” in Iraq. But before Fawaz connected with the Chalabi network, he worked for his first sanctioned institution.
After college, his resume shows he became a “Corporate Finance & Investment Associate” at “HIT a Lebanese [financial institution].” HIT is a reference to Halawi Investment Trust S.A.L., a Lebanese money transfer company.
“I was a junior at the firm,” said Fawaz, when asked about his time at Halawi.
The Halawi exchange house was used by sanctioned drug kingpin Ayman Joumaa. Joumaa allegedly laundered money for Hezbollah and also allegedly laundered proceeds of Colombian cocaine sales whose shipment to the United States he coordinated with Mexico’s brutal Zetas cartel.
In 2013, the U.S. Treasury Department called Halawi a financial institution “of prime money laundering concern.”
“It was surprising to me that [Halawi was] sanctioned as I was not part of the firm when they got sanctioned,” Fawaz said. “During my time there, my knowledge on the local Lebanese level is that Mr. Halawi is not on good terms with members of Hezbollah.”
After Halawi, Fawaz joined another sanctioned money launderer, al-Bilad Islamic Bank in Iraq, which now goes by Al-Ataa Islamic Bank. British corporate records show Fawaz was a director of al-Bilad Bank’s now dissolved offshoot in London, al-Bilad for Investments & Finance P.S.C Limited.
Al-Bilad Bank is run by Aras Habib, a former Fawaz family friend and sanctioned financier who was the intelligence chief for the Iraqi National Congress. That’s the Iraqi dissident group formerly funded by the American intelligence apparatus and run by Ahmad Chalabi, the Iraqi banker and politician known for feeding media and intelligence agencies fake sources on Saddam Hussein’s alleged weapons of mass destruction in the run up to the Iraq War. Today Habib is secretary general of the Iraqi National Congress and a member of Iraq’s parliament.
Habib is allegedly connected to Iranian intelligence. He fled Baghdad for Tehran for a time after an Iraqi arrest warrant was issued in 2004 over allegations of torture, theft and blackmail. The FBI also opened an investigation into whether Habib was the source of a leak of classified information to Iran that the U.S. had cracked the country’s secret codes. The CIA believed Habib was a paid agent of Iran. Habib did not respond to a request for comment, but has previously denied these allegations.
Fawaz was close to Habib before a falling out. We obtained photos of Habib and Fawaz at Iraqi National Congress events. Habib even attended Fawaz’ wedding, according to photos Fawaz’ father posted on Facebook, one of which referred to Habib as a “dear member of our family.”
But in February 2018, Fawaz left al-Bilad Bank “due to a personal dispute with one of the partners,” he said.
A few months later, in May 2018, Habib and al-Bilad Bank were sanctioned by the U.S. Treasury for “assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of [Iran’s Islamic Revolutionary Guard Corps-Quds Force].”
Habib denied the “false allegations” of money laundering in a statement on his website. Fawaz made similar denials to us. “During my time at the bank I was in a senior position with Mr. [Aras Habib] Kareem and never did I see any money laundry activities,” Fawaz said.
Fawaz added that he and Habib had no connections to Iran or Hezbollah. “Many Iranian banks approached us at the time I was at al-Bilad and Mr. [Aras Habib] Kareem always rejected dealing with them,” Fawaz said.
“ The Government Accountability Project reviewed a ledger of nearly $200 million worth of al-Bilad Bank wire transfers signed by Fawaz. ”
But al-Bilad transferred hundreds of millions of dollars into Lebanon. These money transfers led to allegations of money laundering and the implementation of sanctions. And Fawaz was at the center of these transfers.
The Government Accountability Project reviewed a ledger of nearly $200 million worth of al-Bilad Bank wire transfers, along with other flagged transactions worth tens of millions, from 2016 and 2017, signed by Fawaz, which passed through the Arab African International Bank and Abu Dhabi Islamic Bank branches in Dubai, before the money was deposited with Fransabank, Lebanon’s largest bank.
“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hezballah,” said a Treasury Department press release announcing sanctions on al-Bilad.
“These are the documents that led to Aras Habib being listed on [the Treasury Department’s Office of Foreign Asset Control’s sanctions list],” said a source who provided the wire transfer documentation. “The only entity who could [move that amount of money] without anyone questioning them is Hezbollah.”
Fawaz denied the Fransabank transfers were money laundering for Hezbollah. “Fransabank had an Iraqi branch and al-Bilad had a local Lebanese branch the basic thing that was happening was a swap transaction between U.S. dollars al-Bilad had in its local branch in Lebanon and Fransabank’s Iraqi branch in Baghdad,” Fawaz said. “No third party involved nor did the money get transferred to any other bank or company.”
“The sanctions are illegitimate because the documentation available at the bank and all the transfers involved the origin and destination to be Fransabank,” Fawaz said.
Fransabank also denied playing an active role in money laundering connected to Habib, but its account doesn’t absolve al-Bilad Bank. “We came forward to the U.S. Treasury regarding the topic you are mentioning and held several meetings with them and namely with [Treasury Department Assistant Secretary for Terrorist Financing] Marshall Billingslea personally,” said Dania Kassar, Fransabank’s Head of Corporate Communications, in response to questions about al-Bilad Bank’s wire transfers. “Our banking system does not allow us to share any information or details with the press... However, and as a matter of public knowledge, our bank has initiated a legal suit against al-Bilad Bank.”
“ Federal Advocates has its own connection to Chalabi’s world through one of the firm’s vice presidents, retired Congressman Chris Carney. ”
“ Bottom line, [in our lawsuit] we are claiming from al-Bilad Bank amounts unpaid to Fransabank,” added Kassar. “ The U.S. Treasury has been informed about our intention to act legally against al-Bilad Bank, and later on about the lawsuit itself.”
Fawaz blamed al-Bilad Bank’s issues on corruption within the Iraqi Central Bank, which he said was feeding the U.S. Treasury false information. He alleged he had been offered money to burn Habib in front of the U.S. Treasury. Fawaz said he was asked if he would defend Habib in front of a U.S. Treasury Department panel. “I said I would,” Fawaz said.
Federal Advocates said they didn’t hire Fawaz to represent Habib or his other former employers. “ Outside of Mr. Fawaz, no one at the Firm has a personal or professional relationship with Halawi Investment Trust, Mr. Aras, al-Bilad Islamic Bank, or Mr. Joumaa. None of them are clients of the Firm,” said Esposito. “Federal Advocates has no relationship with Mr. Aras, Mr. Joumaa, Halawi Investment Trust or al-Bilad Islamic Bank.”
But Federal Advocates has its own connection to Chalabi’s world through one of the firm’s vice presidents, retired Congressman Chris Carney. Carney is a blue dog Democrat and a former interrogator at Guantanamo Bay prison in Cuba. He also served as a former senior intelligence and terrorism adviser in the Bush Administration Pentagon under prominent neoconservative Douglas Feith, then undersecretary for defense policy.
Carney worked for Feith at the Pentagon’s controversial Office of Special Plans, a tiny group charged with, among other things, locating unfiltered intelligence that countered the CIA’s view that Saddam Hussein was unconnected with al Qaeda and the attack on 9/11. Feith’s office provided that intelligence directly to the Bush White House in order to help make the case for war with Iraq.
While working for Feith in the Office of Special Plans, “Carney and [Defense Intelligence Agency analyst Christina] Shelton put together a briefing, based largely on data that the majority of the intelligence community considered dubious or trivial, asserting a significant link between Saddam and bin Laden,” Spencer Ackerman reported in 2006 for the New Republic.
A draft copy of Carney and Shelton’s briefing slides for White House officials, published by the Federation of American Scientists, shows they used false information spread by Chalabi and Habib. “Fedayeen Saddam training facility at Salman Pak used to train non-Iraqi terrorists,” one slide said, based on information from supposed Iraqi Army defectors supplied by Chalabi and Habib, according to journalist Aram Roston’s book, The Man Who Pushed America to War: The Extraordinary Life, Adventures, and Obsessions of Ahmad Chalabi.
There is no credible evidence the Salman Pak facility was used to train al Qaeda terrorists as the briefing hoped to establish. Other parts of the briefing included information that came from Chalabi, including the false allegation that 9/11 hijacker Mohammed Atta had secretly met with Iraqi intelligence agents in Prague in the run-up to the attacks.
We still don’t know who Fawaz is introducing to Federal Advocates, but if the firm represents any of his friends, it is playing with fire.