The list of prominent figures who have lobbied to free sometime Bryn Mawr resident Marsha Lazareva, a Russian national and Wharton graduate who was sent to a Kuwaiti prison last year, commands attention:
Former United Kingdom first lady Cherie Blair and former FBI Director Louis Freeh are among the teams of U.S. and British lobbyists paid by her employers to advocate for her release. Former President George W. Bush’s brother Neil is a paid adviser who has penned articles in Lazareva’s defense and written to Kuwaiti officials on her behalf. Russian President Vladimir Putin and his Foreign Ministry have questioned her prosecution and called on Kuwait’s ruling emir to order her release.
Earlier this year, lawyers for Lazareva, 46, got her out after posting $6 million for bail. But she remains in Kuwait awaiting hearings and possible trials for two criminal cases, for services fraud and embezzlement. She says she is innocent.
Mobilized by a paid public relations agency, a group of Philadelphia ministers held a news conference at City Hall to draw attention to her case earlier this month. They say she hopes to beat the charges so the single mother can move in with her aged mother, Lydia, in Bryn Mawr and send her 4-year-old son, Yvan, to a Main Line preschool this fall. But they question whether she will get a fair trial.
So, how exactly did this 2003 Wharton grad get into this jam?
Lazareva, in her first full-time job out of business school, began working for one of the most successful business families in Kuwait -- the Dashtis. They own Kuwait & Gulf Link Transport (KGL) and a group of warehouse, shipping, and investment businesses. KGL has won billion-dollar contracts to supply food and other civilian items to U.S. occupation forces in neighboring Iraq and other countries in Kuwait’s tough neighborhood.
The Dashtis’ advisers blame their troubles on their rivals: the Sultan Al-Essa clan, who run Kuwait’s Agility group of warehouse and shipping contractors, which compete with KGL for U.S Defense and Logistics Agency contracts.
The Dashtis are Shia Muslims, like the leaders of neighboring Iran. The Sultans are mostly Sunni Muslims, like rulers in neighboring Saudi Arabia. Agility CEO Tarek Sultan Al-Essa is another Wharton grad (1990), and formerly chaired the school’s Executive Board for Europe, the Middle East, and Africa. (Still, Kuwait is a small place with many contradictions: Sultan’s wife is from a Shia family, for example. The conflict is about business, not religion, Agility advisers say privately.)
The companies have a combative history.
Once the largest supplier of food to U.S. forces in the Middle East, Agility was suspended from U.S. contracts from 2009 to 2017 after it was accused of fraud. It was finally reinstated after a long legal battle, a $95 million fine, and a promise not to pursue larger claims against the government. Amid that struggle in 2012, KGL sued Agility in Pennsylvania state court for defamation. KGL alleged that Agility tried to level the field by telling U.S. Defense Department officials, in phone calls from an unnamed Agility agent in the Harrisburg area, that KGL was illegally trading with Iran and should be suspended from U.S. contracts.
A Pennsylvania Superior Court judge this month found that Agility was exercising its First Amendment rights, and was not liable for damages. The judge also noted that there was no real harm, given that the U.S. military, after reviewing Agility’s information, has continued to use KGL.
On her website and in her supporters’ articles in U.S. publications, Lazareva is portrayed as a pioneering Western businesswoman in Kuwait, which the U.S. freed from Iraq in a 1991 invasion, reinstating its ruling families to power.
The reality is more pedestrian, but still remarkable, according to the man who brought her to America and gave her a start in business:
In 1993, four years after the Berlin Wall fell, a Penn-educated-engineer-turned-Main Line developer, William Bater, said, he flew to Russia to see whether it was really open for business. Lazareva, then 20 and a recent college graduate, was assigned by his airline, Finnair, as Bater’s interpreter.
The restaurant deal that Bater was doing never happened. But during his 10 visits to review that and other projects, Lazareva and her uncle, their driver, met Bater at the airport, drove him where he needed to go, translated words as well as broader meanings, and educated him in many things Russian.
“Then I brought her over here,” Bater said.
In her bio on her website, Lazareva describes herself in that period as “managing director of Cheshire Group Inc., a boutique U.S. private equity firm specializing in logistics, information technology and real estate.”
“That’s a little much,” Bater said, chuckling. “Cheshire Group is my engineering and construction company. She worked for me from 1997 to 2004,” starting as a secretary. “She’s smart. She wanted to go to Wharton.” Bater says he supported her studies financially.
Besides office support for Bater’s business building Main Line houses worth up to $3 million and dreaming of larger projects, Lazareva joined one of Bater’s daughters in planning a cosmetics-sales start-up. They found an American partner, but it never opened.
“She was a standout student,” recalled Robert Borghese, a Philadelphia lawyer and Wharton lecturer who advised Lazareva in her post-Wharton career.
On finishing Wharton’s executive MBA program in 2003, Lazareva was ready to move on, Bater says. “She took interviews. She wanted to stay in this country, but things were going down in the financial world. Then she told me, ‘I have this offer from this Kuwaiti company. $130,000 a year with a bonus.’ I said, ‘Take it! You could come back.’ She took it, and became very successful.”
After three years with the Dashtis’ investment group, Lazareva started a private-equity fund in 2007 for the Dashtis. Dubbed the Port Fund, it arranged to invest more than $300 million for the Kuwaiti social security agency and other mostly Gulf-based investors in port projects around the world.
As head of the Dashtis’ new fund, Lazareva had money to invest. She visited Bater, with a small delegation that wanted to look into building a port facility in Philadelphia. “We found some ground, but they decided the politics were too much," Bater said. "So she called, and said, ‘How about building some houses?’”
Lazareva financed two $2.5 million-plus homes, including one on Great Springs Road near Harriton High School. They were finished in 2008, just as the mortgage crisis wrecked the market. Lazareva let her mother move into one of the houses, and was finally able to sell the other in 2011, Bater said.
Bater didn’t see her much after that. Then he heard her fund, after many prospects, had struck it big with a Philippines deal.
After false starts in other countries, the Port Fund in 2008 leased part of the former Clark U.S. Air Base in the Philippines. The fund invested up to $100 million and borrowed an additional $150 million to acquire the property and build a network of roads and warehouses. In 2017 the fund sold the operation to a Chinese-Filipino investment group, Udena Development Corp., for a price that Port Fund reported at $600 million.
It was a shock to hear, after that triumph, that “suddenly she was in jail,” Bater said -- and with all these famous people trying to get her out.
“She was a very smart and a very trusting person,” he added. " I don’t know what the hell happened. Somebody went wrong."
The profitable sale of the Philippines property aroused envy -- and suspicion, by KGL’s enemies. A Filipino securities filing by an affiliate of the buyer valued its purchase at $1 billion. Did Lazareva’s fund really collect only $600 million? Could it have diverted an additional sum?
Prosecutors in Kuwait collected allegations from several sources. They acquired what they saw as a smoking-gun audit report. They talked to Lazareva’s former assistant, Mona Abdul Wahab, who had been accused of taking money and documents from Lazareva and sent to prison. Abdul Wahab, who continues to maintain her innocence, has filed her own complaint against Lazareva, alleging that her boss took Port Fund money for her own purposes.
Kuwaiti prosecutors in late 2017 charged Lazareva and Saeed Dashti with taking $166 million from the Port Fund, and, in a second case, of charging Kuwait’s own port authority for about $30 million in services they didn’t provide.
Defense lawyers argued that the Port Fund’s money wasn’t really missing -- it had been tied up awhile in transit -- and that the services charges were based on forged documents. But in May 2018, Dashti and Lazareva were convicted in the services case. They were imprisoned.
A Kuwait court nullified that verdict in May 2019, noting the defendants hadn’t been allowed to put on a full defense. Another Kuwaiti court found that case documents were indeed forged, and prosecutors charged the auditor who prepared them with forgery. He has appealed his conviction.
But prosecutors still intend to retry Dashti and Lazareva in that case. Lazareva, out on bail, remains in Kuwait pending further hearings. Last week, Saeed Dashti remained imprisoned in a bail dispute.
KGL officials and their American advisers wondered whether Agility was connected to the accusations, and set about reviewing which of the prosecutors or judges might have ties to Agility.
Dashti-paid lobbyists, who spent more than $2.5 million in Washington in the first half of 2019 on various matters, also appealed to members of Congress. Reps. Madeleine Dean (D., Pa.) -- whose district includes Bryn Mawr -- Paul Gosar (R., Ariz.), and Steve Chabot (R., Ohio) and Sen. Roger Wicker (R., Miss.) have written to U.S. officials asking for an investigation of Lazareva’s case.
Lazareva had been unusually successful as a woman in a “tough environment,” said lawyer Borghese, who at Lazareva’s invitation served on the Port Fund’s Board of Advisers and counseled her on the Clark project, the purchase and sale of another Philippines property, Negros Navigation, and personal investments.
“As far as I’m aware, she’s living a Kafkaesque existence,” he added. “She was convicted without a real trial. I’m heartbroken.”
In an Aug. 6 letter to Sheikh Sabah Al Khalid Al-Sabah, a member of the Kuwaiti ruling family who serves as deputy prime minister, hired guns Bush and Freeh note that Mohammed Bin Naji, head of the Kuwait appeals court, is a “family relative of Mr. Dashti’s chief business rival” (his wife is a Sultan). They add that he faces “a clear conflict of interest.” And they warn that the Kuwaiti legal system will be evaluated -- and U.S. sanctions could be imposed on Kuwait -- based on the fairness of the proceedings against Dashti and Lazareva.
So far the Kuwaiti prosecutors haven’t relented. Lazareva is due in court, on Sept. 9 in the fund case, and Sept. 15 in the advisory-services case. She could be released to start a new life on the Main Line, her lawyers say -- or convicted and face the prospect of more time in a Kuwaiti lockup. Or the cases could grind on.