Hassan Nemazee Arrested on Fraud Charge; New York Donors Stunned

The New York donor community has been dealt its second shock of the year.

Hassan Nemazee, a former finance chair for the presidential campaigns of John Kerry and Hillary Clinton and a finance chair for the Democratic Senatorial Campaign Committee, was charged by the U.S. Attorney’s office in New York with attempting to defraud Citigroup out of $74 million. He now faces up to 30 years in prison, according to Reuters.  

He was arrested at Newark Liberty International Airport this morning on the way to Rome, where he has a home and, according to several sources, was angling for a posting as the United States ambassador. Nemazee, who is 59, nearly became the U.S. ambassador to Argentina under Bill Clinton, for whom he also bundled, but did not make it through the vetting process.

The arrest comes several months after Steven Rattner, a friend of Nemazee and also a major bundler to Hillary Clinton and the Democratic Party, became the target of scrutiny when his name surfaced in relation to an apparent kickback scheme involving access to New York’s pension fund.

But while the Rattner business caused a stir among other top-tier donors—Rattner was not charged with any crime–Nemazee’s arrest is a seismic event.

“I just don’t know what to say–I find it almost incomprehensible,” said Alan Patricof, a finance co-chair on the Clinton 2008 campaign and a friend of Nemazee.  “I don’t know what’s happening in this world.”

Patricof said that Nemazee was a major force in Democratic politics, and had been in their home in Rome. He said he admired Nemazee as a person, a Democrat and a fund-raiser.  

“He was one of those guys who delivered,” Patricof said. “He was always very refined and polite. I feel terrible”

Another influential New York fund-raiser said, “Everyone is like ‘Oh my god, oh my god.’”

The arrest was announced by Preet Bharara,  the U.S. Attorney for the Southern District of New York. Bharara recently left his job as senior legal aide to Chuck Schumer, who was close to Nemazee and was a recipient of his donations.

Nemazee is also a major contributor to Senator Kirsten Gillibrand, and her supporters have cited him as the most influential bundler in her corner in her attempts to freeze out competition in a Democratic primary.

Prosecutors allege that Nemazee, the chairman and chief executive of Nemazee Capital, used fraudulent and forged documents suggesting he had hundreds of millions of dollars in capital to obtain up to $74 million in loans from Citigroup’s banking unit.

Nemazee did not return calls made to his cell phone or office.

According to Reuters, Nemazee’s attorney is Marc Mukasey, the son of Michael Mukasey and a partner at the firm Bracewell and Giuliani. He leads the white collar crime division there.