The South African company that paid senior White House adviser David Plouffe $100,000 to deliver two speeches is accused of trafficking illegal arms to Iran, bribing Iranian government officials, and engaging in "sham consulting," according to a pending lawsuit against the firm.
Plouffe came under scrutiny Monday for agreeing to speak before a subsidiary of the MTN Group, a telecommunications firm that has close ties to the Iranian government. The speech occurred in December 2010—one month after Plouffe’s appointment was announced and one month before Plouffe officially joined the White House staff.
Plouffe’s association with MTN has raised concerns on Capitol Hill and elsewhere where elected officials and political observers are worried that the White House adviser has acted recklessly in pursuit of personal profits.
As negotiations over a recent round of Iran sanctions took place behind closed doors in Congress, the Obama administration pushed its Democratic allies to oppose a measure that would have made it illegal for telecom companies such as MTN to do business in Iran, according to sources familiar with the negotiations.
That measure, sponsored by Sen. Mark Kirk (R., Ill.), was not included in the most recent round of sanctions.
"It’s still technically legal what MTN is doing and the administration worked against" the Kirk measure, explained one source.
"Companies looking to profit from Iran will find it very difficult to avoid associating with IRGC entities which are helping the regime develop nuclear weapons, are implicated in terrorist activities and the killing of American troops, and which have set up a vast apparatus to repress the Iranian people," said Mark Dubowitz, executive director of the Foundation for the Defense of Democracies.
"Clearly there’s no due diligence going on," said one GOP advisor. "There’s a complete separation of policy and principal and if the price is right that gun is for hire."
Plouffe accepted a $100,000 speaking engagement from MTN Group in December 2010.
At the time, MTN Group appeared to be engaged in discussions with the Obama administration over its business dealings in Iran, raising questions about whether Plouffe’s substantial speaking fee may have influenced his later dealings with the firm on behalf of the White House.
"It appears based on the evidence that MTN should be designated under U.S. sanctions [against Iran] and today they are not," said the GOP source.
The extent to which MTN Group is alleged to have engaged in corrupt and illegal practices came to light in late March, when a competing telecom firm named Turkcell sued MTN for unethically poaching its Iranian business license.
MTN Group is alleged to have engaged in an elaborate conspiracy to woo its Iranian benefactors in a bid to maintain a monopoly on the nation’s telecom market.
The firm allegedly promised the Iranians that it could convince South Africa to vote against sanctions on its disputed nuclear program when the issue went before the International Atomic Energy Association, according to a copy of the complaint.
MTN Group additionally stands accused of trying to facilitate the delivery of a "wish list" of embargoed weapons to Iran and of bribing both Iranian and South African government officials.
Earlier this year, Turkcell acquired the sworn videotaped testimony of Christian Kilowan, a senior MTN employee who ran its Iran operations from 2004 to 2007, the lawsuit states. Kilowan is said to have corroborated and expanded upon all of the allegations leveled against MTN, including never-before-revealed details about the firm’s alleged attempts to bribe Iranian officials.
Kilowan further testified that certain bribes to Iranian Interior Ministry officials were enacted through a "sham consulting contract" with one of the official’s relatives. Regular cash payments were doled out to at least six other government officials, the complaint states.
MTN is said to have paid $400,000 to Javid Gorbanoghli, the Iranian Deputy Foreign Minister via a bogus contract with a Dubai front company. Also, a sum of $15,000 a month was allegedly paid to an Iranian Interior Ministry official named "Mr. Riahi," according to the testimony.
Furthermore, the South African ambassador to Iran, Yusuf Saloojee, is alleged to have been paid nearly $200,000 to assist MTN’s business dealings in Iran, according to the complaint. An additional $2,000 was paid to multiple Iranian government officials for similar services.
Faced with these charges, MTN Group allegedly attempted to cover up its illicit behavior by intimidating Kilowan the day before he was scheduled to deliver his testimony on Turkcell’s behalf.
Plouffe’s relationship with both MTN and Turkcell—which paid him $48,000 in 2009—should have raised red flags for a White House that claims to be the "the most transparent administration ever," insiders said.
"The hypocrisy is more in doing this in full knowledge of multiple press reports expressing concern over what Iran is doing in the telecoms sector to oppress its own people," said the GOP adviser quoted above.
The administration defended Plouffe’s talks by telling the Washington Post that White House lawyers reviewed and cleared the deal before the invitation was accepted.
Plouffe’s association with MTN is not the only cause for concern, observers say.
He also has received speaking fees from the Association for Civil Society Development in Azerbaijan (ACSDA), a front for the Azeri government, as well as from the Norwegian postal service, which has been criticized for being sympathetic to the Tamil Tigers.