The Clinton Foundation refused to return more than $50,000 of contributions from a group described by federal government investigators as a "front" for the "Mullahs who dominate Iran."
The Washington Post reported in 2003 that federal law enforcement officials said that Alavi was "closely tied to the mullahs who dominate Iran" and "funds a variety of anti-American causes."
U.S. Attorney Preet Bharara filed a lawsuit in 2009 to seize a New York City building partially owned by The Alavi Foundation alleging that it had been acting as a "front for the government of Iran" for two decades.
"For two decades, the Alavi Foundation’s affairs have been directed by various Iranian officials, including Iranian ambassadors at the United Nations, in violation of a series of U.S. laws," said Bharara.
Despite the allegations, the Clinton Foundation held its ground, stating in 2009 that it had no plans to return the money it received from The Alavi Foundation.
The 2008 donation to the Clinton Foundation came just two days after Alavi’s partner, the New York-based ASSA Corp., was designated a terrorist entity by the Treasury Department.
In 2013, a federal judge upheld Bharara’s case and ordered the seizure of the 36-story building. Bharara said at the time that the ruling "paves the way for the largest-ever terrorism-related forfeiture, and provides a means of compensating victims of Iranian-sponsored terrorism."
The Clinton’s ties to the case don’t end with donations from Alavi.
One of the tenants of the building, Marc Rich, had previously fled the United States for Switzerland after he was indicted on 65 charges including "fraud and illegal trading with Iran." Rich was trading with Iran even as it held American hostages.
Rich returned to the country after former President Bill Clinton pardoned him on his last day in office in 2001.
The Rich family contributed over a million dollars to Democratic political causes, including $450,000 to the Clinton library.