When Controversy Follows Cash

From left, Sant Chatwal, Bill Clinton, Renu Mehta and Michael Douglas at an event in London in 2006. Chatwal, a longtime friend of Bill and Hillary Clinton, raised money for their campaigns and causes even as he faced legal and financial difficulties. Mehta, a philanthropist, founded Fortune Forum. (By Dave M. Benett -- Getty Images)
By John Solomon and Matthew Mosk
Washington Post Staff Writers
Monday, September 3, 2007

Sant S. Chatwal, an Indian American businessman, has helped raise hundreds of thousands of dollars for Sen. Hillary Rodham Clinton's campaigns, even as he battled governments on two continents to escape bankruptcy and millions of dollars in tax liens.

The founder of the Bombay Palace restaurant chain, Chatwal is one of a growing number of fundraisers in the 2008 presidential campaign whose backgrounds have prompted questions about how much screening the candidates devote to their "bundlers" while they press to raise record amounts.

Chatwal's case reached from his native India to New York City. The IRS pursued him for approximately $4 million in unpaid business taxes, while New York state placed a lien seeking more than $5 million in taxes. He forfeited a building to New York City on which he was delinquent on property taxes and was sued by federal regulators seeking to recoup millions of dollars in loans from a failed bank where he served as a director.

Across the ocean, three Indian banks forced him into U.S. bankruptcy, and he was charged with bank fraud. He was out on bond when he showed up in India in 2001 during a visit by his longtime friend Bill Clinton.

Yet none of the legal and financial woes -- occasionally touched on in American or Indian newspapers or highlighted by political opponents -- raised red flags inside Hillary Clinton's fundraising operation. Chatwal recently said he plans to help raise $5 million from Indian Americans for Clinton's presidential bid.

Asked whether anything in Chatwal's background caused concerns about his activities on behalf of the campaign, Clinton spokesman Phil Singer answered, "No." He declined last week to be more specific, saying only that major fundraisers are routinely vetted "through publicly available records."

Rajen Anand, a longtime friend of Chatwal and another Clinton fundraiser, said the campaign encourages strict vetting for fundraisers. "They advise me to be very careful not to associate the campaign with people where there is something wrong," he said.

Anand said, however, that Chatwal may have slid through any vetting, no matter how vigorous, because of his longtime friendship with the Clintons. The Clintons maintained a close association with Chatwal; both attended one of his sons' weddings in 2002, and the former president attended another son's wedding in 2006.

While Chatwal raised money for Hillary Clinton's Senate and presidential campaigns and Bill Clinton's charitable efforts, he settled the regulatory and tax cases one by one, mostly by working out plans to pay portions of the debts. He resolved the last of them this spring.

"The man came to this country, accumulated an empire, lost it during the time of real estate [softness], and has struggled and worked to try to pay off his debts," said A. Mitchell Greene, Chatwal's lawyer for 25 years. "It has been a long battle, but he has cleared up all of his obligations, and in the process he is trying to accumulate his wealth again."

Ordinarily, campaigns have their legal, finance or research staffs run the names of major fundraisers -- also called "bundlers" because they deliver checks to candidates in bunches -- through public records such as newspaper clips, court filings and government databases to identify problems. Some controversies still slip through.

Former senator John Edwards (D-N.C.) faced such questions last week when federal prosecutors in Michigan indicted Geoffrey Fieger, the lawyer famous for defending assisted-suicide advocate Jack Kevorkian, accusing him of channeling $127,000 in illegal contributions into Edwards's 2004 presidential campaign. Edwards's aides said, and prosecutors confirmed, that the activity was concealed from Edwards and that the candidate cooperated once he learned of problems.

CONTINUED     1        >

© 2007 The Washington Post Company