The FBI has arrested a man accused of acting as an agent of Pakistan's state intelligence service while funneling roughly $2 million in political contributions in the U.S., prompting one recipient to offer to return money received from the suspect.
Syed Ghulam Nabi Fai, 62, executive director of a group called the Kashmiri American Council, was arrested Tuesday. Investigators said he gave money to American political candidates beginning in the mid-1990s — money the FBI says came from Pakistan.
Congressman Dan Burton, who received more than $10,000 from Fai and his council, according to federal records, said he would give the Boy Scouts an amount of money equal to what he was given, if it turns out the money was contributed illegally. Burton is head of the Pakistani caucus within the House.
"I am deeply shocked by Dr. Fai's arrest. I've known Dr. Fai for 20 years and in that time I had no inkling of his involvement with any foreign intelligence operation and had presumed our correspondence was legitimate," the Indiana Republican said in response to a question from NBC News about the contributions. "For as long as I've known him, Dr. Fai has been either a permanent legal resident of the United States or a citizen, and, as such, any political contributions I may have received from Dr. Fai over the years are completely legal."
"My campaign does not accept contributions from anyone not legally authorized to donate to U.S. political campaigns. However, if there is any doubt about the origin of these contributions, I will donate those funds to the Boy Scouts of America," he said.
Fai appeared in federal court in Alexandria, Va. He's charged not with being a spy but with being an unregistered agent or lobbyist of the Pakistani government.
Zaheer Ahmad, 63, was also charged but is believed to be in Pakistan, Reuters reported. He's accused of trying to line up Both are naturalized U.S. citizens.
The FBI said in court documents released Tuesday that his group, the Kashmiri American Council, is effectively run by the Pakistani government.
An FBI investigator says an informant told the FBI that Pakistani's intelligence service, ISI, created the council "to propagandize on behalf of the government of Pakistan with the goal of uniting Kashmir." A call to the Kashmiri American Council's office in Washington went unanswered Tuesday morning.
Court documents reveal that the FBI has been investigating Fai for at least four years and that he has repeatedly denied that he has ever "provided any services to any foreign entity." To the contrary, the FBI says, "The government of Pakistan has long directed and funding his lobbying and public relations efforts in the United States" for at least 20 years, based on intercepted communications between Fai and Pakistani officials.
Agents say the government sent him at least $4 million begining in the mid-1990s through several contacts in the U.S. who are not named in the court documents unsealed Tuesday. Money was used in lobbying efforts but also for political contributions.
The New York Times reported that the court papers say straw donors may have been used to contribute the money.
According to federal campaign records, Fai himself began giving money in 1990, but his largest contributions have come in the past decade.
According to the records, Burton received more than $10,000, including $2,000, the maximum allowable under U.S. law, in each of the 2004, 2008 and 2010 congressional campaigns.
In addition, Fai gave the National Republican Senatorial Committee $3,500 in 2004, $5,000 in 2006 and $1,000 in 2008. Rep. Jim Pitts, R-Pa., also received $2,000 in 2004. The only Democrat to receive a similar amount of money was Rep. Jim Moran, D-Va., who received $2,000 in 1998.
Among other politicians who received smaller contributions were the campaigns of Rep. Dana Rohrbacher, R-Calif., $500; and the presidential campaigns of Al Gore, $250, Dennis Kucinich, $500; and Barack Obama, $250.
Pete Williams is NBC News' chief justice correspondent. Robert Windrem is NBC News' senior investigative producer.
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