Is the Kuwait Government Corrupt?

By Victoria Toensing
September 6, 2018
DailyCaller.com

While the Amir of Kuwait met in Washington this week to promote investment in Kuwait, a top female executive sits behind bars in his country. She is charged with crimes she did not commit and waits for any indication she will ever be released.

In a mostly quiet crackdown on foreign investments in the Gulf Kingdom, American businesspeople are finding their money frozen by Kuwaiti authorities without warning or recourse.

The world should watch if Kuwaiti continues to use false documents, sham trials and the incarceration of an innocent woman to enrich himself at the expense of foreigners. If so, Americans should then steer their money clear of Kuwait.

Marsha Lazareva, 45, is a well-known fixture in the Kuwait business community, having lived and worked there the past 14 years. With her long blond hair and evident tenacity, she stands out in a male-dominated industry based in a male-dominated culture.

A graduate of the prestigious Wharton School of Business and a Russian citizen, she is CEO of a Kuwaiti company called KGL Investment, through which she managed the Port Fund, a KGLI‑managed private equity fund focused on port and related logistics opportunities in emerging markets.

During its 10-year investment period, the Port Fund was an unheralded success. With an initial investment of $188 million, including $125 million from the Kuwaiti government, the fund nearly doubled its initial investment.

In November of 2017, as Marsha was in the process of distributing nearly $500 million back to creditors, advisors and investors, the latter of which includes three American stakeholders, the money was suddenly frozen. She found herself in the crosshairs of a coterie of Kuwaiti officials intent on sabotaging her business and her reputation.

The smear campaign against Marsha and KGLI was launched by a disgruntled former employee and business competitor. It began with multiple, unfounded criminal complaints, followed by numerous interrogations and a series of travel bans. Through the interrogation period, she was not afforded a competent interpreter and was threatened with life imprisonment if she did not sign a confession in Arabic.

Following these ruthless intimidation tactics, Kuwaiti officials charged her with wasting public funds invested in The Port Fund. The government’s groundless case relied largely on testimony from a single discredited witness from the Kuwait State Audit Bureau who presented forged financial documents.
The CEO who previously enjoyed an impeccable business reputation was hauled in front of a kangaroo court and given a trial devoid of due process under any standard of justice.

After paying over $30 million as part of a bail deal (which effectively covered all the alleged financial damages under the charges), she was briefly released only to be quickly and wrongly convicted and sentenced to 10 years imprisonment. During the rushed proceedings, she was prohibited from presenting witnesses or evidence in her defense and prevented from attending some of the hearings.

She now shares a small cell with six other women in the notoriously overcrowded Sulaibiya Prison. A single mother, Marsha has not been able to see her four-year-old son, who is a U.S. citizen. Her physical and mental health has declined significantly.

The bizarre and unfounded actions against Marsha are a violation of her international standards for a fair trial and human rights and lie in stark contrast to the Amir’s well-known reputation as a global humanitarian leader.

Because of this prolonged smear campaign, Americans who helped manage the Port Fund, as well as those who invested in it, are unable to recoup their investment, which sits frozen in a bank account in Dubai thanks to the business competitor’s relationships with powerful entities in the Kuwait government who have illegally blocked the money’s release.

Kuwait has spent many years building a reputation as a nexus of international business, in no small part through its partnership with the United States. However, this shocking campaign against a well-regarded female CEO raises serious concerns about whether the Kuwaiti government has turned away from fair business dealings altogether.

This may signal the beginning of an era when neither American money, nor American investors themselves, are at all safe in the Gulf country.

Victoria Toensing is a founding partner in the Washington law firm diGenova & Toensing, LLP.