An Autocratic US Ally Is Accused of Smearing an American. His Lawsuit Could Air a Lot of Dirty Laundry.

A pair of unusual lawsuits in D.C.’s federal court threaten to pull back the curtain on the way authoritarian foreign states manipulate western public opinion — and to embarrass both a Persian Gulf U.S. ally and a Washington think tank leader.

The cases were brought by an American businessperson and a Williams College professor, respectively, both of whom claim in legal documents that they were smeared by a Swiss private detective agency hired to run a “dark” public relations campaign for the government of the United Arab Emirates. The firm, they say, deployed operatives and paid fake journalists to place media articles, edit Wikipedia pages, and otherwise portray the two as dangerous Muslim Brotherhood allies.

According to the complaints, the Swiss firm also engaged Lorenzo Vidino, the director of George Washington University’s Program on Extremism, to lend his academic authority to what they say are false depictions.

Both suits are part of the fallout from a blockbuster story that ran last year in The New Yorker. The 10,000-word investigation chronicled a smear campaign against Hazim Nada, the American-born founder of oil-shipping firm Lord Energy, which went bankrupt after Nada’s name was repeatedly linked to terrorism. The smear caused reputation-obsessed banks to cut him off, the suit alleges, eventually leaving his firm isolated from the entire financial system — a baffling experience for a secular U.S. citizen with no particular political interests, someone who had visited his father’s native Egypt only once in his entire life.

Nada later got ahold of a trove of hacked documents from Geneva-based private intelligence outfit Alp Services which showed years of communications between the detective firm and the Emirati government, including detailed plans to destroy his good name and correspondence celebrating the campaign’s success.

That same trove of documents is at the core of the case brought by Farid Hafez, an Austrian scholar who focuses on Islamophobia and currently teaches at Williams College. Hafez saw his academic funding in Austria dry up, and later was arrested in an Austrian raid on supposed Muslim Brotherhood activists. Exonerated, he wound up teaching in the U.S. — and says he only discovered the source of his troubles after the story about Nada went viral last year, which also led to a new slew of reporting about UAE influence by a European investigative consortium.

Nada’s suit, filed in January, promises to be the much higher-profile case. That’s partly due to the identity of his law firm: Clare Locke, the fearsome Beltway-based plaintiff’s firm best known for going after news organizations like The New York Times (on behalf of former Alaska Gov. Sarah Palin) and Rolling Stone (on behalf of a University of Virginia dean defamed in a now-retracted 2014 report on campus rape). Last year, the firm won a share of a record $787 million settlement in Dominion Voting Systems’ defamation suit against Fox News.

But the attention a Nada trial might generate would have even more to do with the lead defendant: The United Arab Emirates, the fantastically wealthy gulf state that is also one of the most effective diplomatic players in Washington.

Ordinarily, sovereign governments are immune from U.S. legal action, meaning the nitty-gritty of overseas regimes’ espionage and influence campaigns don’t typically get exposed in court proceedings. But there’s one exception to that rule: Under the law, Americans can take foreign governments to court over commercial activities. And according to Nada, the alleged campaign against him wasn’t just a case of old-fashioned political repression — it was a commercial strike against someone whose oil-shipping business was competing against a state-owned company.

They wanted him out of business, Nada says, because he was threatening their profits. According to his complaint, competition from Lord Energy cost the national oil company of Abu Dhabi some $830 million in revenue over the years before the campaign started.

“Here's an operator who, for some reason, became the obsession of another operator — to the extent that this other operator spent millions of dollars to put them out of business,” Nada told me, summarizing allegations in the suit. “That's exactly the core of the play.” Notably, the case involves racketeering, antitrust and trademark allegations, not the libel claims for which Clare Locke is most famous. (The list of defendants also includes a slew of Emirati officials and agencies, the Swiss detective firm and its associates, and Vidino, among others.)

A soft-spoken 42-year-old, Nada was making the rounds in Washington last month, connecting with policymakers and media via a Beltway PR firm — an indication that the court of public opinion is going to be an important venue in the case. It’s a smart move: Governments can sometimes be motivated by fear of embarrassment in ways that private detectives or energy titans are not.

As it happens, Nada makes a relatable hero for this kind of messaging. His father had been a Muslim Brotherhood figure, but the American-bred Nada grew up with little interest in religion or activism. Instead, he got an engineering degree from Rutgers and fell into the game of energy trading. He proved good at it, making a ton of money and setting himself up in magnificent Como, Italy.

Then his troubles began. According to the suit, the conspirators “unlawfully obtained his phone records in 2017; used those phone records to map out Hazim’s purported network of associates; and used rumors — including many that had been conclusively debunked — about some of those associates to manufacture a false narrative accusing Hazim of using his companies as fronts to finance the Muslim Brotherhood and al Qaeda, even though there was no evidence.”

Operatives allegedly paid a Swiss journalist to write up the accusations, pushed the allegations to reputable U.S. outlets and eventually led to the compliance firm World-Check placing him in the “terrorism” risk category, causing him to be cut off from the financial system. Unable to get credit in an industry that depends on it, Lord Energy went bust. “The enterprise’s lies were outlandish but devastating,” the suit claims.

The experience cost Nada his business and his marriage. And he had no idea where the smear came from — until, the suit explains, a hacking group reached out to offer him files purporting to document Alp Services’ interactions with the Emiratis. The trove included schedules of meetings in Abu Dhabi, contracts with writers-for-hire, and maps of Nada’s supposed social contacts. He wanted to get even. “When you go through the data and you see a stranger who's never dealt with you saying things like, ‘the target remains paralyzing him,’ or ‘the target remains finishing him,’ …What would you do?”

Neither the Emirati embassy nor Alp responded to requests for comment.

In all, Nada wants $2.7 billion — a number that includes punitive damages, but is largely based on the destruction of Lord Energy. It’s a figure that dwarfs the $10 million demanded by Hafez, whose suit mainly focuses on Vidino and Vidino’s employer, George Washington University, as well as the Swiss firm and one Emirates-based entity but not the nation itself. That number also reflects the smaller stakes of a case where the plaintiff isn’t involved in a lucrative global business. He’s a professor who’s been outspoken against Islamophobia and has in the past sued European media outlets he claimed had labeled him a Muslim Brotherhood supporter.

All the same, Hafez’s bill of allegations — based on the same trove of documents linking Emirati money to the Swiss intelligence firm, and onward to various contractors — offers an ugly depiction of U.S. scholarship allegedly weaponized by an overseas actor.

Alp records cited in the complaint allege that the Washington-based extremism researcher was treated to a $1,000 dinner at Geneva’s Beau Rivage. According to the reports cited in the suit, he was allegedly paid more than €13,000 for his consulting work, which included finding “interesting leads/rumors” about the Muslim Brotherhood, along with a “list of alleged members of the first tier organizations in European countries.” The Austrian government cited a report by Vidino as a basis for the raids where Hafez was arrested along with scores of others.

In Hafez’s telling, the push against him was purely political, targeting someone who had spoken out against the overthrow of the Muslim Brotherhood in Egypt, and whose writings against Islamophobia in Europe have been conflated with support for Islamism.

It might be a tougher sell in court. Vidino’s report, which predates the hotel dinner, only mentions Hafez once, and doesn’t actually label him as a devotee of the movement. But by focusing on Vidino’s work for a secretive firm engaged by an authoritarian government, the suit effectively accuses the scholar of being in the shadow world of disinformation. Like Nada’s suit, it cites racketeering rather than libel.

“Basically, Vidino was a hired gun for all these governments, for all these institutions,” said Hafez’s New York-based lawyer, David Schwartz.

That’s more or less what Nada says about him, too. According to his suit, the scholar proved “a credible and highly-credentialed intermediary who was willing to say whatever they wanted in exchange for money.”

Vidino declined comment, but in The New Yorker last year he acknowledged working for Alp and said he didn’t know who their ultimate client was. George Washington University did not respond to requests for comment.

If either case makes it to trial, defense lawyers will likely cast doubt on the evidence, itself the product of a hack. And it’s by no means clear that Nada’s case will proceed. The Foreign Sovereign Immunities Act, putting most governments out of the reach of American lawsuits, has proved pretty resilient over the years. The claim that this case is purely commercial is by no means guaranteed to work.

Still, a trial would be quite a spectacle for Washington — dissecting an alleged intelligence operation aimed at smearing an individual and shaping opinion in America and a number of other states. Beyond demonstrating what a deep-pocketed actor can do, it highlights the vulnerability of institutions a lot of Beltway types like to think are above the fray, from media to academia to supposedly dispassionate ratings agencies that rate commercial risk.

“I think that this is daylighting a lot of things that I'm sure powerful interests would prefer to keep opaque — in terms of both the specifics of the campaign against Lord Energy and also the tactics, the tradecraft that was used in order to carry this campaign out,” Nada’s attorney, Thomas Clare, told me.

Which raises a question: Just why haven’t they made it go away?

Nada lost much of his fortune when Lord Energy failed, but he still has enough to bankroll what will surely be very expensive litigation involving attorneys on three continents. Though he’s casting his quest to expose the smear campaign as a matter of duty and honor, surely a country as wealthy as the Emirates could find a way to quietly settle and avoid even the small risk of more dirty laundry being aired. That’s a pretty standard move for a lot of powerful entities, even when they reject an accusation.

So far, though, that hasn’t happened — and Nada’s team is all-in on setting a precedent in order to punish disinformation merchants.

“That's certainly going to be our pitch to the D.C. jury: That their verdict should send that signal that they should change the way that they do business, and that they cannot act with impunity and without accountability,” Clare said.