Federal Probe Targeted Former Officials but Not Their Lobbying Firms

A federal investigation into payments connected to an Iranian dissident organization took an unusual path in 2012, focusing on prominent former government officials who received speaking fees while apparently bypassing the Washington lobbying firms that had been hired to advocate for the same cause.

The investigation centered on the Mujahedin-e Khalq (MEK), also known as the People’s Mujahedin of Iran, and efforts by various American advocates to have the group removed from the State Department’s list of designated terrorist organizations. Former officials including Ed Rendell, the Democratic ex-governor of Pennsylvania, and Gen. Hugh Shelton, former chairman of the Joint Chiefs of Staff, reportedly received subpoenas from federal investigators over speaking fees they accepted for delivering pro-MEK speeches.

Lobbying Firms Reported No Contact From Investigators

Multiple lobbying and public relations firms that had been paid to advocate for MEK’s delisting told reporters they had not been subpoenaed or contacted by federal authorities.

DiGenova and Toensing, a firm that received $110,000 from the Iranian-American Community of North Texas for lobbying work, said it had no expectation of being subpoenaed. Founding partner Victoria Toensing argued that her clients were American citizens living in Texas who were not themselves on any terrorist list. She characterized the investigation of former officials as a violation of First Amendment principles, noting that a federal court had ruled in July 2010 that the State Department was required to review its designation of MEK.

Akin Gump Strauss Hauer and Feld, which earned $290,000 in lobbying fees in 2011 from the Iranian-American Community of Northern California, likewise reported receiving no subpoena. The firm’s lobbyists working the MEK delisting effort included former Representatives Vic Fazio and Bill Paxon.

Public relations firm Brown Lloyd James, which had been paid $40,000 under a two-month contract to publicize humanitarian conditions at Camp Ashraf in Iraq where MEK members lived, also confirmed it had not been contacted by authorities.

The MEK’s Complicated History

The MEK’s background made it one of the more contentious foreign policy issues in Washington at the time. According to the State Department, the organization was founded in the 1960s by college-educated Iranian Marxists opposed to the shah. After the Islamic Revolution, the group attempted to overthrow the new regime in 1981 and was linked to attacks in the 1970s that killed American personnel in Iran.

Supporters of the MEK disputed several of these characterizations, denying that the organization was ever Marxist or involved in attacks on Americans. They argued that the group had been placed on the terrorist list in 1997 by the Clinton administration as a diplomatic gesture to improve relations with Tehran, not because of any ongoing threat.

A High-Profile Campaign With Powerful Backers

By 2012, the campaign to delist the MEK had grown into a well-funded operation involving legal challenges, television advertising, lobbying on Capitol Hill, and paid speaking appearances by a roster of prominent former officials from both political parties. The speaking fees paid to these former officials drew particular scrutiny because receiving payments from or providing services to a designated terrorist organization could violate federal law.

The Treasury Department’s Office of Foreign Assets Control issued subpoenas for payment records from several former officials. A Treasury spokesman declined to comment on specific investigations but noted that the MEK remained a designated terrorist group and that sanctions enforcement was taken seriously.

Questions About Selective Enforcement

The investigation’s apparent focus on individual speakers rather than the lobbying infrastructure supporting the delisting campaign raised questions about selective enforcement. Critics of the probe, including Homeira Hesami, president of the Iranian-American Community of North Texas, called it “a smokescreen” designed to distract from the State Department’s failure to comply with the court-ordered review of MEK’s terrorist designation.

The contrast between aggressive scrutiny of former officials and the absence of any apparent investigation into registered lobbying firms suggested that the probe’s scope may have been shaped as much by political considerations as by legal ones. The MEK was ultimately removed from the State Department’s terrorist list in September 2012.