Kuwaiti Cash Fuels a Surge of Misleading U.S. Media Coverage

(Bloomberg) -- A business executive accused of financial crimes in Kuwait is getting support from an all-star cast of famous Americans, including a son of the U.S. president who liberated the Gulf nation and several of President Donald Trump’s allies. They’ve helped generate a torrent of sympathetic media coverage from the Middle East to Washington.

The boldface names are part of a $4.9 million campaign that also has been marked by subterfuge and deception, including a fake protest, thousands of dollars in payments to some U.S. opinion writers, misleading news reports and a correspondent who may not exist. A review of government filings and an examination of dozens of articles shows just how easily money can warp U.S. press coverage.

At issue is a convoluted case against Marsha Lazareva, the Russian-born chief executive officer of Kuwaiti private equity firm KGL Investment Co., which is financing the campaign. In and out of jail since 2017 on embezzlement charges, she sought refuge in the Russian Embassy in Kuwait City in November after being convicted of money laundering and sentenced to 15 years of hard labor. She maintains her innocence.

While Lazareva’s advocates frame her case as a human rights struggle, there’s also a financial angle: The outcome could affect billions of dollars flowing to the Gulf nation for U.S. military supply contracts. That may explain why her fate has become one of Washington’s biggest lobbying issues, with about 20 registered advocates roaming the capital.

A federal filing last month shed light on how the campaign is targeting the press, too. KGLI’s New York-based public affairs firm, Marathon Strategies LLC, reported paying $11,500 to three men who wrote 12 pro-Lazareva opinion pieces, including seven by an activist whose work appeared on the conservative website RedState. None of them mentioned the payments. Marathon also disclosed playing an unspecified role in generating 21 other news articles, columns and TV segments.

“Who are these people, and why are they all saying the same thing in an apparently coordinated manner?” said Adam Zagorin, a senior fellow at the Project on Government Oversight in Washington who has followed the case for years. “The filing has told us an answer to the question. I had figured we might never find out.”

Marathon declined to comment beyond its filings to the Justice Department under the Foreign Agents Registration Act. A spokesman for KGLI said Lazareva is the victim of a campaign by “powerful individuals in Kuwait” to discredit and imprison her, and that there is no credible evidence against her. The team supporting her, the spokesman said, has been “working through every possible channel to shine light on this gross violation of international human, legal and women’s rights.”

A Bloomberg News tally of news articles, op-eds and TV segments in the English-language press found more than 80 about Lazareva and KGLI since 2018, the vast majority of which echoed the company’s talking points. Journalists at 11 media outlets, including the New York Observer, Fox Business Network, the Daily Caller and Newsmax TV, whose work Marathon listed in its filing, said no one paid them or their organizations to influence coverage. They said that while publicists and lobbyists pitched them and arranged interviews, the story was attractive on its own because of a compelling narrative and the fame of her supporters.

Military Contracts

KGLI traces its roots to Kuwait & Gulf Link Transport Co., a logistics firm founded by Kuwait’s Dashti family. Kuwait & Gulf has a number of U.S. contracts, including one worth $1.4 billion to provide food and water to U.S. troops in several Middle East nations.

Saeed Dashti, the former chairman of the logistics company who helped set up KGLI and served on its board, was convicted in the same criminal proceeding that ensnared Lazareva. Although KGLI representatives say it’s a legally separate entity, rivals have been using the criminal case to challenge the logistics firm’s qualifications as a U.S. contractor.

KGLI assembled a team of notables to support and represent Lazareva, including Neil Bush, the son of former President George H.W. Bush; Louis Freeh, a former FBI director; Cherie Blair, the wife of former British Prime Minister Tony Blair; Victoria Toensing, a Washington lawyer allied with Trump; and Pam Bondi, a former Florida attorney general close to the president. Bondi reported that she stopped lobbying last fall after being named a special adviser to Trump on impeachment.

KGLI disclosed spending about $2.6 million last year, including $1.3 million through Marathon and an equal amount spread among the Washington lobbyists. A fund managed by KGLI reported spending an additional $2.3 million, mostly to win the release of $496 million that Lazareva was accused of stealing and that had been frozen by a bank.

The total spent on the campaign is probably greater, as the reported amounts don’t cover KGLI operations in Kuwait or Europe, or certain types of U.S. work. In September, Bush told Politico that he isn’t required to disclose his fees because lobbying is only a small part of what he does for KGLI. He didn’t respond to messages seeking comment.

Applying Pressure

The effort is aimed at persuading U.S. officials to pressure their Kuwaiti counterparts on Lazareva’s behalf. As the campaign picked up steam last year, so did coverage in American online publications, much of it closely tracking KGLI’s arguments.

KGLI’s advocates accentuated Lazareva’s American ties -- she lived in a Philadelphia suburb for a few years and has a son who’s an American citizen. They also suggested that she’s the victim of sexism and persecution as an Orthodox Christian in a Muslim country.

Many news accounts framed the case as a question of human rights and described Bush and other paid Lazareva supporters as “human rights activists.” Some articles wrongly described Lazareva as an American from Pennsylvania and KGLI as a U.S. firm.

One public relations agent drummed up coverage by organizing a press conference with Philadelphia church leaders in August, sending out media invitations about a “Philly mom” being wrongly detained overseas. The local ABC station aired some of his speech, identifying him only as a nameless Lazareva “friend.” The publicist, William F.B. O’Reilly, told the Justice Department in an October filing that he had an $8,500-a-month contract to aid Lazareva. He acknowledged in an interview that he has never met her.

The religion angle resonated in Trump’s Washington. Martha Boneta, a KGLI lobbyist active in pro-Trump political circles, helped pitch the story to religious and right-leaning outlets. “Christian Businesswoman Imprisoned in Kuwait,” read the “Fox & Friends” chyron when Bondi, identifying herself as a lawyer for Lazareva, discussed the case on air.

RedState Blogger

Few on the right promoted the Lazareva story as persistently as Seton Motley, a prolific blogger on RedState and a veteran small-government activist who also does political consulting work. He’s written about her and the Kuwait case seven times since June 2018.

Motley confirmed in an interview that he got $4,000 from Marathon in 2019. He said it was for “center-right outreach and research,” not for his writing, which he called separate and unrelated. Marathon’s filing describes Motley’s services as “communications consulting.”

“I wasn’t paid to write about it,” Motley said. “It’s a lie.” After Al-Monitor, a news site focused on the Middle East, first wrote about the payment, Motley spoke with his editor at RedState, who Motley says was satisfied with the explanation. Motley declined to identify the editor. RedState hasn’t added any disclaimers concerning the articles. Jennifer Van Laar, a deputy managing editor at RedState, declined to comment.

It wasn’t the first time Motley’s RedState work delved into issues aligned with Marathon campaigns. In recent years, he wrote two pieces calling on the Trump administration to come to the aid of a silver mine shuttered by a Guatemalan court. The mine’s owner was a Marathon client. More recently, he crusaded against Amazon.com Inc.’s bid for a Pentagon contract. His arguments lined up with talking points from the Marathon-run Free and Fair Markets Initiative, funded by Amazon rivals, including Oracle Corp. Motley said he wasn’t paid for those articles or any others.

More support for Lazareva came from Giorgio Cafiero and Theodore Karasik of Gulf State Analytics, a consulting firm with expertise on the Middle East that was paid $7,500 by Marathon for communications consulting. Their bylines appeared on five articles in international publications, all echoing KGLI’s position. None of the articles disclosed the payments. Gulf State Analytics registered with the Justice Department on Dec. 20 as a foreign agent representing KGLI and acknowledged that it had been hired by Marathon to produce some of the articles. Karasik referred all questions to Cafiero, who declined to comment.

Henry Windsor

Then there’s Henry Windsor, the byline on four pro-Lazareva pieces that appeared in online publications. The articles describe him as a freelance journalist based in Kuwait City. KGLI’s spokesman said Windsor is a pseudonym to protect the writer from retaliation by Kuwaiti authorities. He declined to provide any other information about Windsor’s identity.

At least three of the articles were submitted on Windsor’s behalf by a public relations agent in London named Eva Charalambous, who provided the sites with his supposed email address. A Bloomberg News message to that address wasn’t returned. Charalambous didn’t respond to calls and emails.

The campaign to enlist American support appears to have gotten some traction. Five members of Congress wrote letters asking the Treasury Department to consider sanctions against Kuwait over Lazareva’s treatment. One of Lazareva’s lawyers said Secretary of State Michael Pompeo even raised the issue with the Emir of Kuwait during a visit in March. A State Department spokesman declined to comment.

Lazareva was imprisoned in 2017 and convicted of embezzlement the following year. Then, in May, her conviction was overturned and she was later freed on bail. After a second conviction in November, her supporters held a rally outside the Kuwaiti Embassy in Washington, winning more sympathetic coverage in the Daily Caller. The crowd was assembled by a staffing company in Beverly Hills, California, called Crowds on Demand, according to a person with knowledge of the matter.

For all the talk of human rights, Lazareva’s defenders have occasionally acknowledged the case’s financial dimension. In April, Bondi told a Newsmax reporter that Lazareva’s predicament was driven by rivals who covet U.S. contracts. “It’s billions and billions of dollars,” she said. “And if they eliminate Marsha, they are basically the only game in town.”

--With assistance from Fiona MacDonald, Cam Simpson and Nick Wadhams.

To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net;Benjamin Elgin in San Francisco at belgin@bloomberg.net;Joe Light in Washington at jlight8@bloomberg.net

To contact the editors responsible for this story: Robert Friedman at rfriedman5@bloomberg.net, John Voskuhl

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