LOS ANGELES (CN) — Former U.S. Transportation Secretary Ray LaHood and a France-based billionaire paid fines to resolve separate probes that appear to be tied to a wider federal investigation into unlawful campaign contributions to U.S. political candidates, federal prosecutors said Wednesday.
Gilbert Chagoury, 75, paid a $1.8 million fine to resolve prosecutors’ allegations that he and his middlemen made approximately $180,000 in contributions to the U.S. election campaigns of four candidates for federal office.
As a foreign national, Chagoury — who lives in Paris — is prohibited by federal law from making financial contributions to any U.S. election.
Prosecutors said Chagoury admitted facilitating the transfer of funds between June 2012 and March 2016 into campaign coffers of yet-unnamed U.S. federal candidates.
As part of his deferred prosecution agreement, Chagoury agreed to cooperate with the U.S. government and also admitted to facilitating campaign contributions made in the name of other individuals --- called conduit contributions.
Chagoury paid the nearly $2 million fine in December 2019.
Two of Chagoury’s associates also paid fines to resolve allegations that they violated U.S. campaign finance laws by assisting Chagoury, prosecutors said Wednesday.
In 2012, France-based physician Joseph Arsan helped steer $100,000 of Chagoury’s money to the election campaign of an unnamed U.S. presidential candidate, described in prosecutors’ papers only as “Candidate A.” Arsan facilitated reimbursements to individuals who made donations to the presidential campaign fund using Chagoury’s money, according to court papers.
In 2014, Arsan also wired $30,000 to an individual as a “wedding gift” when it was in fact a reimbursement for a political campaign contribution.
Arsan’s deferred prosecution agreement also resolves a federal criminal probe into alleged tax violations stemming from his failure to report assets held in foreign bank accounts.
Toufic Joseph Baaklini, 58, of Washington, admitted giving $30,000 of Chagoury’s cash to someone called “Individual H” in court papers who, along with others, made 2016 campaign contributions to a U.S. congressman described by prosecutors only as “Federal Candidate D.”
In a February 2016 meeting in Washington, the unnamed candidate asked Baaklini, “Do you think anything was wrong with the [Individual H-hosted] fundraiser?”
Baaklini said “no” and asked the candidate why he would think so, according to court papers.
The candidate replied, “Because it all came from the same family.”
Arsan, 68, and Baaklini, 58, paid $1.7 million and $90,000, respectively, to resolve and cooperate in the government’s investigation.
Baaklini is listed as the president and chairman of the board of the Middle East Christian aid organization In Defense of Christians, according to the group’s website.
LaHood, a former Republican congressman who served in the first term of the Obama administration, agreed to pay a $40,000 fine to resolve a federal criminal probe into a loan he received from Chagoury.
In 2012, Baaklini handed LaHood a $50,000 personal check with the word “loan” written on it.
LaHood, who prosecutors said was facing financial difficulties in that period, admitted he knew the money came from Chagoury but neglected to disclose the payment on two government ethics forms.
Baaklini’s meeting with LaHood was arranged at the direction of Chagoury by an unnamed priest, called “Individual A” in court papers, whom LaHood met after a 2009 keynote speech at the Annual Maronite Convention in Los Angeles.
Prosecutors said LaHood also lied to FBI agents investigating Chagoury about the receiving the loan and only admitted to it after being shown a photo of the check.
As part of LaHood’s nonprosecution agreement, he repaid the $50,000 to Baaklini and agreed to cooperate with the wider federal investigation.
In a statement, Acting U.S. Attorney Tracy L. Wilkison said the wider probe remains ongoing.
“The aim of the Federal Election Campaign Act is the protection of the U.S. electoral system --- especially when it concerns allegations of foreign money being illicitly inserted into it," Wilkison said. "We will continue to follow the evidence wherever it leads to protect the integrity of our elections.”
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