UPDATED July 20, 2021, 6:08 p.m.: Real estate titan Tom Barrack was arrested on Tuesday morning on federal charges tied to illegally lobbying Donald Trump for the United Arab Emirates, according to the Department of Justice.
A seven-count indictment was unsealed today in federal court in Brooklyn charging Barrack, Matthew Grimes and Rashid Sultan Rashid Al Malik Alshahhi, also known as “Rashid Al Malik” and “Rashid Al‑Malik,” a citizen of the United Arab Emirates, with acting and conspiring to act as agents of that nation between April 2016 and April 2018, according to the Department of Justice.
The indictment said the charges are related to advancing the interests of the UAE at the direction of senior UAE officials by influencing the foreign policy positions of the campaign of a candidate in the 2016 presidential election. The indictment did not name Trump, but did say the candidate was eventually elected president.
The indictment also charges Barrack with obstruction of justice and making false statements during a June 20, 2019, interview with federal law enforcement agents.
Barrack and Grimes were arrested Tuesday morning in California and were scheduled to make their initial appearances this afternoon before United States Magistrate Judge Patricia Donahue at a federal courthouse in Los Angeles. Alshahhi remains at large.
“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,” stated acting Assistant Attorney General Mark Lesko in a statement.
Barrack’s attorney Matt Herrington said in a statement, “Tom Barrack made himself voluntarily available to investigators from the outset. He is not guilty and will be pleading not guilty today.”
Between April 2016 and November 2016, Barrack was an informal adviser to Trump’s campaign and chaired his presidential inaugural committee. He was an informal adviser to senior U.S. officials on foreign policy issues for the Middle East. He also sought appointment to a senior role in the U.S. government.
Grimes was employed at Colony — a real estate investment trust that finished last year with $42 billion in assets under management — and reported directly to Barrack. During the relevant time period, Alshahhi worked as an agent of the UAE and was in frequent contact with Barrack and Grimes, including in-person meetings in the United States and the UAE, according to the U.S. Justice Department.
The agency alleges that Barrack was directly and indirectly in contact with senior leadership of the UAE government and occasionally referred to Alshahhi as the UAE’s “secret weapon.”
In December 2016, Barrack allegedly met with Grimes, Alshahhi and senior UAE government officials, at which he advised them to create a “wish list” of U.S. foreign policy items that the UAE wanted done in the first 100 days, six months, year and four years of the incoming administration.
The defendants also allegedly worked with UAE officials on Barrack’s national television appearances. After one appearance where Barrack praised the United Arab Emirates he allegedly emailed Alshahhi, “I nailed it … for the home team,” federal prosecutors said.
In May 2017, Barrack allegedly agreed to provide Alshahhi with non-public information about the views and reactions of senior United States government officials. This followed a White House meeting between senior United States officials and senior UAE officials.
In September 2017, prosecutors said, Alshahhi told Barrack about UAE’s opposition to a proposed summit at Camp David to address an ongoing dispute between Qatar, the UAE and other Middle Eastern governments, after which Barrack sought to advise Trump against holding the event. The summit never took place.
In the summer of 2019, Barrack voluntarily met with FBI special agents. The Department of Justice alleges he made false statements during that interview including falsely denying that Alshahhi had ever requested that he take any actions on behalf of the UAE.
Barrack founded Colony Capital in Los Angeles in 1991. He handed over the reins to Richard Saltzman in 2014. Saltzman oversaw Colony’s $19.9 billion merger with NorthStar in 2017. Barrack returned as CEO in 2018 after the company recorded a net loss of more than $333 million in 2017.
It came to light in the summer of 2019 that Barrack was under scrutiny for his ties to Saudi Arabia and the United Arab Emirates. Federal prosecutors looked at whether Barrack, whose firm took in at least $1.5 billion from those two countries after Trump won the Republican presidential nomination, sought to sway the Trump campaign and later the administration on foreign-policy decisions.
He stepped down as CEO in 2020 and as executive chairman earlier this year. The real estate investment trust, which in May reported defaulting on $3.2 billion in loans, moved its headquarters from Los Angeles to Boca Raton, Florida, on Jan. 1. Now led by Marc Ganzi, Colony has been shifting its portfolio of 80 percent hotel, office, warehouse and retail to about 70 percent digital-related assets such as data centers, cell towers and fiber-network properties.
Barrack, an Arabic speaker of Lebanese descent, has deep ties to the Middle East and has long been adept at bringing in money for real estate ventures from wealthy investors there. His dealings in the region date back to the 1970s, when he was a lawyer at the firm of President Richard Nixon’s personal attorney.