In 1992, Sam Zakhem, a former U.S. ambassador to Bahrain (1986–1989), was indicted by a federal grand jury in Denver for willfully failing to register under the Foreign Agents Registration Act (FARA) and for several other charges, including violating federal tax laws. He was indicted along with two associates, William R. Kennedy Jr., former publisher of the political Conservative Digest magazine, and Scott Stanley Jr., a former editor of the same publication.
The indictment alleged that the three men received approximately $7.7 million from the government of Kuwait through its embassy in Washington, D.C., to conduct an advertising campaign and lobby Members of Congress in support of American military intervention in the Persian Gulf following Iraq’s 1990 invasion of Kuwait.
The indictment further alleged that Zakhem and his associates operated through two organizations that the Department claimed were used as fronts to conceal their source of income. These organizations, Coalition for America at Risk and later the Freedom Task Force, both organized rallies and advertised widely to gain support for Kuwait. The Department further claimed that of the contract funds, $2 million was used for advertising, and the remaining $5.7 million was allegedly divided among the three men for personal use. The Department also alleged that the men used several bank accounts to conceal that the Kuwaiti government was the source of their funding and avoid paying income taxes. Zakhem was charged with twelve counts and faced a maximum sentence of 40 years.
The indictment ran contrary to the way in which Zakhem portrayed himself to the public, as a strong patriot with a desire to repay his country. Born in Lebanon, he moved to the United States to pursue higher education. He served in the Colorado State Legislature in the 1970s and 80s, gaining a reputation for eccentricity by often sponsoring atypical legislation and engaging in highly visible public antics. In 1992, he decided to run for U.S. Senate; however, the indictment occurred during his campaign, and the negative press surrounding it likely contributed to his defeat. The FARA charges were later dropped in 1994 following the departure of the principal Assistant U.S. Attorney who had been responsible for the case. Zakhem was subsequently acquitted of the remaining federal tax charges in 1995.
Although the prosecution did not result in a conviction, the case remains an interesting snapshot for understanding the historical evolution of FARA enforcement during the pre-Mueller era.
Special thanks to Sonia de Jong for her efforts on this Blog piece.
This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.
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