WASHINGTON, NOVEMBER 16: An Indian businessman who is said to have funneled $ 210,000 to Hillary Clinton's New York Senate campaign has come under scrutiny for his suspect financial dealings, including milking American and Indian banks of millions of dollars.Sant Singh Chatwal, a former Indian Air Force pilot who migrated to the United States in the 1980s and started the Bombay Palace chain of restaurants, channeled the soft money contributions through 14 different business despite having declared bankruptcy in several cases, The New York Daily News reported in a series of stories this week.Chatwal also owed the Internal Revenue Service and other state authorities $30 million in taxes, the paper said.Chatwal's political contributions did not go unrecognised. He accompanied the Clintons on their visit to India in March this year and was twice theirguest at White House dinners, including at the official banquet for Prime Minister Vajpayee.Moreover, the Clintons attended a fundraiser at Chatwal's Manhattan residence some weeks back raising some $500,000.Although Chatwal's name does not appear anywhere in Hillary's federal election disclosures, a number of his businesses do, the Daily News said. The paper traced the businesses to Chatwal through state corporation records, news clips and business databases.They show that on September 21, at least 14 of Chatwal's partnerships and corporations made donations ranging from $9,000 to $25,000 each. All of it was so-called soft money, unregulated contributions to a Democratic Party committee set up for the New York Senate race.Besides owning the Bombay Palace chain of restaurants, the Chatwal family also controls the Hampshire Hotel and Resorts chain and is part owner of the News India-Times newspaper and television companies in New York. The family recently acquired the Days Inn and Howard Johnson, two budget hotels near the pricey Times Square in Manhattan. The Hampshire Hotel chain also runs two Best Western hotels, the Hampshire Hotel Suites, and the Quality Hotel, all in Midtown Manhattan.Most of the properties are in the name of Chatwal's son Vikram and his wife Pardaman. Federal Election Commission filings show several modest contributions of $1,000 to $2,000 to Hillary Clinton and her fellow New York Senator Charles Schumer.Yet, Chatwal had defaulted on loans from banks for several years by filing for bankruptcy protection and covering his assets through clever transfers, the reports said. One federal judge noted during a hearing in July 1996 that Chatwal had filed separate bankruptcy cases for all 56 of his restaurants and six of his nine hotels.According to Indian Embassy officials, Chatwal also stiffed Indian banks of several millions of dollars and escaped by declaring bankruptcy. Feelings against him run so high that many high officials of the Embassy avoid eating out or catering from the Bombay Palace restaurants.One official said the Embassy was surprised and disturbed by the Chatwals closeness to Clintons, but he was not aware if the White House had been alerted to the hotelier's background.Shady political contributions are not unusual in the American political system where businesses and individuals often try and curry favours with thepowers that be. The background of the contributors is hard to scrutinise immediately, but it is not unusual for recipients to return the money when they learn of the donors' antecedents.The Clintons, by virtue of being current occupants of the White House, have been particularly vulnerable to suspect contributions, and therefore, attacks from their political opponents.In this case, Rick Lazio, the Republican candidate who lost to Hillary Clinton in the Ne York Senate election, called on the First Lady to turn over to the U.S. Treasury all ``ill-gotten'' soft money she accepted from a deadbeat businessman.``Mr Chatwal owed money to the U.S. taxpayers and instead gave it to Mrs Clinton's campaign,'' Lazio spokesperson Michael Marr was quoted as saying. ``Given Mrs. Clinton's use of the Lincoln Bedroom and Camp David to raise money, perhaps this latest revelation isn't surprising, but it's still wrong.''President Clinton is away in Vietnam and Hillary Clinton has gone to Israel for the funeral of Leah Rabin. There was no word from the Clinton camp about the latest campaign scandal.The Daily News, quoting U.S. court records, reported that in early 1996, Chatwal was arrested in India, held in a jail in Mumbai and charged with bank fraud by the Central Bureau of Investigation. But an attorney who represented the Indian banks said Chatwal basically outmaneuvered the Indian authorities. At one time, he claimed in court to have only $2,600 to his name and no checking account.In 1996, the Federal Deposit Insurance Corp. went to the bankruptcy court and accused Chatwal of obtaining improper loans from the failed First New York Bank for Business, causing it to lose more than $25 million. Chatwal, a bank director, arranged more than $14 million in loans to himself and his businesses, often with no collateral, then failed to repay most of the loans on time, the paper reported the FDIC as saying in court documents. Chatwal's bad loans to himself alone cost the bank more than $12 million, according to the FDIC.The Daily News said FDIC is still trying to recover a fraction of the loans. ``I can't say how much at this point,'' the paper quoted FDIC spokesperson David Barr as saying. ``We're getting close to having a final settlement amount ready. The court is looking at it.''However, the paper said it seemed unlikely the FDIC would be able to recover even one dime.``The FDIC is at the mercy of Manhattan's federal bankruptcy court - where banks, the IRS, the state, the city and dozens upon dozens of creditors have been begging for five years to recoup Chatwal debts estimated at more than $100 million. In 1998 a court-appointed trustee found that legally, Chatwalhad no property available for distribution - even as he entertained dignitaries and politicians at his hotels and Bombay Palace restaurants,'' the paper said.
