D.C. Attorney General Lets the Trump Swamp Win Again

·10 min read
Photo Illustration by Thomas Levinson/The Daily Beast/Getty
Photo Illustration by Thomas Levinson/The Daily Beast/Getty

The District of Columbia’s attorney general promised accountability for nonprofits that took advantage of the Trump administration’s era of grift. Yet after D.C.’s top prosecutor let the Trump family off easy last month for misusing donor funds, The Daily Beast has discovered yet another recent example of a gentle settlement for executives—with Trumpworld connections—accused of personally enriching themselves with charitable funds.

Last year, Attorney General Karl Racine sued the corporation that nearly ruined the United States’ presence at the 2020 World Expo in Dubai. The event presented a lucrative opportunity to represent the nation at the modern World’s Fair, and the State Department initially handed it over to Pavilion USA 2020, a nonprofit started by two political players in Washington.

But Racine’s office says it eventually discovered these two men misused their nonprofit to pay themselves handsomely—and dupe well-meaning investors into pouring money into a failed project. His office made a public announcement, excoriating “their mismanagement and greed” and promising to seek the $360,000 “founders improperly paid themselves.”

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Prosecutors went after the nonprofit, as well as Fred Bush, a political operative with a checkered past whose son served in Trump’s State Department. They also targeted Alan M. Dunn, an international trade lawyer who leaned on his credentials as a former assistant secretary at the Commerce Department.

But on April 13, the AG’s office signed off on a deal that let both men off the hook “without any admission of liability or wrongdoing”—while also letting their insurance company cover the $220,000 settlement.

Racine’s office cut a similar deal with the Trumps in April over misspent nonprofit funds at Donald Trump’s 2017 inauguration. In that other case, Racine let them “deny in having engaged in any wrongdoing or unlawful conduct”—and also allowed their insurance company to pay the half owed by Trump’s presidential inaugural committee.

That kind of legal caveat is common in civil settlements, but scorned victims and witnesses say it deprives them of closure and fails to hold grifters responsible.

The similar fate of the world’s fair case infuriated Greg Houston, the nonprofit’s CEO who became a witness in the AG’s case. He told The Daily Beast the settlement let Bush and Dunn walk away clean despite a promise to discourage self-enrichment at a charity’s expense.

“The only thing this case discouraged, as far as I can tell, is people like me from coming forward and helping with their investigations,” Houston said. “I lost my savings, my credibility, and my livelihood over my involvement with Pavilion USA.”

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He especially lamented the way his former business partners were able to have their insurance company cover the tab, telling The Daily Beast how he spent more than $20,000 on legal bills to gather evidence, testify under oath, and help investigators put together their case.

“The D.C. taxpayers spent countless funds on the investigation and case, and it’s the taxpayers and nonparties like me who were the ones who ended up paying the tab for this whole thing,” he said.

Bush and Dunn are barred from serving on the boards of any nonprofit in Washington, D.C. for five years, but the agreement allows them to continue providing contract work for nonprofits and serve on the board of directors at any nonprofit anywhere in the world outside the 68-square-mile capital.

Reached on Wednesday afternoon, Bush declined to comment but acknowledged the Philadelphia Indemnity Insurance Company would cover the bill. Dunn cut a phone call short by saying he was boarding a plane but never answered any questions or called back. Their current attorney did not respond to a request for comment, and a past attorney declined to speak.

The AG’s office ended the case with little fanfare. Racine appears to have made no mention of it since, and the office issued no public statement at the time (unlike the Trump inauguration settlement that followed two weeks later, which came with a press release and a claim that his office had come out on top.)

When asked about the settlement on Thursday, the AG’s office issued a statement to The Daily Beast portraying the conclusion as a victory. It plans to use the recovered funds to redirect them to a legitimate nonprofit serving the community.

“This settlement… is a win for district residents and for accountability. The Office of the Attorney General is focused on ensuring nonprofit funds serve the public good and aren’t used for personal gain,” it said. “And with this resolution, we are holding two founders of Pavilion USA 2020, Inc. accountable for abusing their authority and using nonprofit funds for private enrichment.”

The AG’s office would not explain how Bush and Dunn were being held accountable for misbehavior by allowing them to continue asserting no misbehavior ever occurred.

The Daily Beast first drew attention to the nonprofit’s influence peddling and shady business in 2019, when it exposed how Dunn used his position there to simultaneously promote the interests of a powerful nuclear technology company. The investigative report detailed how mismanagement and in-fighting ripped the team apart, dooming their State Department contract. The AG’s office sued the nonprofit, Bush, and Dunn two years later.

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The World Expo—the direct descendant of the hopeful and dazzlingly retro World’s Fair that once graced Chicago and the borough of Queens in New York City—was an opportunity to display the country’s global role and contribution to the human race. When the 2020 event was pushed back a year due to the COVID pandemic, it bought the country enough time to scrounge together a replacement featuring a replica of a SpaceX Falcon 9 rocket and a Quran that belonged to Thomas Jefferson.

Documents obtained by The Daily Beast this week provided a glimpse into the evidence prosecutors collected during their investigation, including emails that showed severe concern over the way the nonprofit’s chief financial officer resigned in disgust—and the way Bush and Dunn pumped up their salaries.

In one email on Feb. 13, 2019, philanthropist Theresa E. Behrendt told Fred Bush that she would “immediately” resign from the board of directors at the nonprofit.

“World Expo 2020 Dubai is an extremely important undertaking on behalf of the United States and the State Department. I believe it deserves the best of efforts,” she wrote. “The behavior I have witnessed over the past few weeks seems counterproductive to the success of this endeavor.”

When reached on Thursday on her cell phone, Behrendt hung up while being posed with questions. She sent a follow-up call to voicemail.

The event’s ultimate success—and the case’s sudden closure—was a particularly harsh sting for another witness in the case: Asad Gharwal. His nightmare was first profiled in the Star Tribune, and he expressed his renewed anger to The Daily Beast this week.

Gharwal fled Afghanistan in 1979 and became a serial entrepreneur in Minnesota, where he ran a popular restaurant and an aviation food company that catered to presidential candidates, professional sports teams, and one major commercial airliner. When he expressed interest in helping the Trump administration’s military and diplomatic efforts back in his home country in 2018, a friend pointed him to Bush’s son.

Gharwal told The Daily Beast he met at the restaurant Local 16 with Taylor Bush, a Trump appointee at the State Department. Gharwal was then passed along to his father, Fred Bush, who was nearly appointed in 1990 as the ambassador to Luxembourg until he was embroiled in a scandal over his dealings with the Housing and Urban Development Department.

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The elder Bush—who has no relation to the two former Bush presidents—convinced Gharwal to join him in an endeavor to compete for the State Department’s contract for the upcoming world expo. Gharwal spent nearly $200,000 of his own money and convinced a team of local businessmen to invest another $750,000 in the project. Gharwal’s Sky Food Catering would have the exclusive rights to serve American food to curious globetrotters.

“It meaned, to me, big time,” he told The Daily Beast. “I’m an immigrant from Afghanistan, and I’ve been here for 42 years. I worked in the hospitality business my entire life… I was going to represent the United States as an immigrant—internationally. That was my goal, to be somebody who came from a Third World country and was able to do this.”

“And also making a lot of profit,” he added.

Profit he did not make. Gharwal soon discovered that Bush and Dunn were failing miserably at raising the $60 million needed to deliver a spectacular presence at the world’s fair. By the end of 2018, Bush and Dunn had only raised $1.5 million, prosecutors alleged.

Meanwhile, as later detailed in the AG’s lawsuit, Bush used his position as the nonprofit’s chairman of the board to reward himself $200,000 in yearly pay as an “independent contractor.” He even bumped that up by an additional $7,000, according to prosecutors.

“Fred Bush was an ambassador. I believed everything that he said. How can I not believe him? He is the fundraiser for the Republican Party. He was close to the Trump administration,” Gharwal now says.

“My life is basically, ‘I have to start from nothing and work for someone.’ I don’t have anything left after years of doing business for myself,” he told The Daily Beast in a pained voice. “Put it this way: I’m broke, and I don't have anything. When I put my foot on this country, I worked 15 days after my arrival as a dishwasher. I worked my entire life. I never got a penny of help from the government. I never got any financial aids. I'm proud of that. And I paid a lot of taxes. I created a lot of jobs and opportunity. But I never thought that I, in America, would face this kind of corruption.”

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While Dunn was a director on the board as well, the nonprofit contracted his side business, AMDE, as the law firm providing outside “legal counsel.” Prosecutors cited a perfect example of the kinds of financial shenanigans that went on inside the nonprofit:

When Dunn proposed a $10,000 monthly salary for himself—with $5,000 in regular pay and an extra $5,000 “risk premium”—the nonprofit’s CEO balked at the tacked-on bonus. So, prosecutors said, Dunn reworked the numbers so that he would instead be paid $8,000 in regular pay and a lower $2,000 “risk premium”—still managing to add up to the $10,000 he wanted.

Prosecutors would later find that Dunn was charging fees as a lawyer while his District of Columbia bar license was technically suspended. The D.C. Court of Appeals’ Office of Disciplinary Counsel told The Daily Beast that Dunn was administratively suspended and unable to legally practice law for more than five months in 2018 because he failed to pay his professional dues on time.

Dunn, a longtime political player in the nation’s capital, is the identical twin brother of Rep. Neal Dunn (R-FL) and a person whom the congressman once called “a creature of the swamp.”

Dunn has also been accused of swindling investors before—with similar circumstances. In 2006, the former U.S. ambassador to the Bahamas, James Richard Blankenship, sued Dunn on the grounds that the attorney had lied to him about how much money he’d raised for an international business venture and had taken $750,000 of his money. According to Blankenship, he eventually recouped less than half of the cash in a private court through arbitration. The former ambassador sighed when The Daily Beast told him about the World’s Fair debacle—and Dunn’s ability to end the case without admitting any fault.

“It doesn’t surprise me that Alan Dunn is involved in these affairs… he's inclined to mislead people,” he said. “I would not be involved in any type of project with him again. At some point in time, his reputation precedes him.”

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