Opinion 420 to Padma

Prior to this Chatwal’s financial dealings had come under scrutiny in the US. The IRS pursued him for approximately $4 million in unpaid business taxes. While New York state placed a lien seeking more than $5 million in taxes. He forfeited a building to New York City on which he was delinquent on property taxes and was sued by federal regulators seeking to recoup millions of dollars in loans from a failed bank where he served as a director.

In 1997,the Federal Deposit Insurance Corporation sued Chatwal over his role as a director and a guarantor of unpaid loans at the failed First New York Bank for Business. The government alleged that his loans had “resulted in losses to the bank in excess of $12 million”,and it questioned his claims that he could not repay the debts. The regulators were sceptical of the fact that Chatwal continued to rent a spacious penthouse apartment in New York in the midst of his financial turmoil. “The debtor has managed to continue living in luxurious style in the same penthouse apartment he resided in at a time he claimed a net worth of tens of millions of dollars without adequate explanation of how his family’s limited income is able to support such a lifestyle,” the government said in a filing.

Former US President Bill Clinton played a major role in helping whitewash the former air force officer’s chequered past. Clinton gave Chatwal social standing by declaring him one of his close friends and giving him access to the White House. The US President insisted that he be included in his group of leading American businessmen who accompanied Clinton on his official visit to India in 2000,even though there were CBI cases against Chatwal at that time and he was a wanted man in India. Later Clinton brought the hotelier to India on a second trip in connection with earthquake relief work. Clinton eventually appointed Chatwal a trustee of the William J Clinton foundation.

Clinton had every reason to be grateful to Chatwal. The hotelier raised huge funds for Bill and Hillary in their election campaigns both through personal donations and by persuading other US businessman of Indian origin to contribute. In September 2000,Chatwal hosted a half-million dollar fundraiser at that Upper East Side penthouse for Hillary Clinton’s Senate campaign. In 2008,he promised to raise $5 million for Hillary Clinton’s 2008 presidential bid,creating a group called Indian Americans for Hillary 2008. Donors who gathered at least $25,000 were promised a “private VIP meeting” with the candidate,fundraising letters show. After Hillary bowed out of the presidential race Chatwal moved over to the Obama camp and raised funds.

Thanks to the Clintons’ patronage many doors were opened to Chatwal and in no time the family was rubbing shoulders with the rich and the famous,particularly in the world of glamour. Chatwal’s hotel empire flourished. From the single Bombay Palace hotel in Manhattan,Chatwal built up a chain of hotels across the US and other parts of the globe. A respected business magazine like Forbes put the younger Chatwal on its cover in an adulatory piece which did not ask any probing questions — “Whatever the dollar figures the Chatwals have social currency” was how the magazine put it.

Proof of Chatwal’s social currency was the impressive turnout for his son Vikram’s lavish wedding extravaganza in Delhi in 2006. Laxmi Mittla,Aditya Birla,S P Hinduja,Naomi Campbell,Prince Michael of Greece,the Clintons and many others from the international jetset turned up for the extravagant festivities which were much written about. A special supplement of the New York Times described it as one of the most famous weddings of contemporary times. The fairy tale marriage fell apart soon afterwards. The social commentator Suhel Seth recently noted that “the poor boy who got married has just finished a rehab program at Byculla in Bombay”.

For Chatwal the icing on the cake was the presence of Prime Minister Manmohan Singh and his wife at the Sikh wedding ceremony. (Incidentally,Chatwal was one of the guests at the White House dinner hosted by President Obama for Singh earlier this year). The fact that our circumspect PM,found a man once blacklisted by our embassies,socially acceptable surely sent a powerful signal to the law enforcement agencies that Chatwal was not a person you wanted to mess with. Particularly as they already had the example of the US authorities,which influenced by Chatwal’s enormous political clout quietly settled the regulatory and tax cases one by one,mostly by working out plans to pay portions of the debts. The FDIC abruptly settled the case,agreeing on December 18,2000,to let Chatwal pay $1,25,000 for the loans that it had said caused at least $12 million in losses.

Just how exactly the CBI and the law enforcement authorities came around to giving Chatwal a clean chit and a certificate that “there is nothing adverse on the record” is shrouded in secrecy and reeks of major manipulation. Initially,five cases were registered against Chatwal. Three of these cases were unilaterally closed by the CBI,while chargesheets were filed before the court of a special CBI judge in Mumbai in two others. In these two cases, the CBI did not go into appeal despite the recommendation on file of a senior investigator. In fact,in one case the CBI helpfully dragged its feet over filing a chargesheet for more than five years. A Right to Information petition questioning the CBI’s role in the whole murky business is certainly called for.