Clinton Cash (2 page)

What’s more, many of these exchanges have taken place at a time when these outside interests had matters of importance sitting on Hillary’s desk, whether in the Senate office building or on the third floor of the State Department. The issues seemingly connected to these large transfers are arresting in their sweep and seriousness: the Russian government’s acquisition of American uranium assets; access to vital US nuclear technology; matters related to Middle East policy; the approval of controversial energy projects; the overseas allocation of billions in taxpayer funds; and US human rights policy, to name a few.

Of even greater concern is that the foreign players giving money to the Clintons include foreign governments (and controversial politicians) in countries like Russia, India, and the United Arab Emirates, where there are major foreign policy issues at stake. In other cases, foreign businessmen appear to have benefited shortly before or after private meetings with foreign officials involving one or both Clintons. There is nothing clearly illegal about these payments. But their source, size, and timing raise serious questions deserving of deeper investigation. While some particular facts or instances have been
reported on sporadically elsewhere, the convoluted methods, shady characters, and cumulative pattern of behavior will be described in this book for the first time.

Also described for the first time is the role of the Clinton Foundation at the center of an elaborate system for generating large donations and fees.

I
n June 1999, as his second term was winding down, Bill sat down with his chief fundraiser and forty business leaders at La Grenouille in midtown Manhattan to outline his future vision for a nonprofit organization.
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The Clinton Foundation would become the centerpiece of his post-presidential work. And both the Clintons were engaged. Hillary played “an important role in shaping both the foundation’s organization and the scope of its work,” in the words of the
New York Times
. As the foundation’s first chief of staff, Karen Tramontano, put it, “She and I would speak frequently. She had a lot of ideas. All the papers that went to him went to her.” She even attended foundation planning sessions while she served in the US Senate.
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The foundation’s mission appeared as much as anything to protect President Clinton’s legacy as well as to bolster his philanthropic work around the world. Its method of operation would be to raise money from donations and regrant the funds or use them to finance its own philanthropic programs, including initiatives involving health care, the environment, and development in the third world.

Yet even before Clinton left office, the foundation found itself mired in controversy. The timing of certain contributions raised questions as to whether they were tied to official favors. On October 6, 1999, Anheuser-Busch Companies gave the first of five payments totaling $1 million for the William J. Clinton
Presidential Library and Museum (or Clinton Library for short), which was funded in part by donations given through the Clinton Foundation. As the
New York Times
reported, less than a month earlier “the Clinton administration’s Federal Trade Commission dropped a bid to regulate beer, wine, and liquor advertising” allegedly aimed at underage drinkers.
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In May 1999 a bankruptcy attorney from Chicago named William A. Brandt Jr. also pledged $1 million. At the time the Clinton Justice Department was investigating Brandt’s testimony to Congress to determine whether he had lied under oath concerning a Clinton fundraiser and the lobbying of federal officials. Three months later, in August, the Department of Justice dropped the investigation and determined that “prosecution is not warranted.”
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In 1999 Dr. Richard Machado Gonzalez and his lawyer, Miguel Lausell, were lobbying President Clinton to boost Puerto Rican hospital Medicare reimbursements. This would benefit, among others, Machado, who owned one of the eligible hospitals. Eight months prior to Clinton proposing increased Medicare payments, Lausell gave the Clinton Library a $1 million gift. Machado gave the foundation $100,000 six months after that.

The controversies reached a fever pitch during Clinton’s final days in office, when he pardoned billionaire fugitive Marc Rich, an oil trader and financier who had been indicted on numerous charges by US prosecutors and had fled the country. Rich’s business ties included a “who’s who” of unsavory despots, including Fidel Castro, Muammar Qaddafi, and the Ayatollah Khomeini. (Rich had traded oil with the ayatollah in violation of US law while Iran held American hostages.) He owed $48 million in back taxes that he unlawfully tried to avoid and faced the possibility of 325 years in prison. As a result, he was on the FBI’s Most Wanted List. On his last day in office, President Clinton infamously pardoned Rich, sending shockwaves through Washington. The pardon came after his ex-wife, Denise Rich, donated $100,000 to Hillary’s 2000 Senate campaign, $450,000 to the Clinton Library, and $1 million to the Democratic Party.

Condemnation of the whole affair was immediate and nearly universal. Maureen Dowd labeled the Clintons as “grifters” and the
New York Times
bemoaned President Clinton’s “outrageous abuse of the pardoning power.”
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Former president Jimmy Carter called it “disgraceful.”
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Even longtime Clinton supporters, like James Carville and Terry McAuliffe, were critical.
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The
Washington Post
wondered if the “defining characteristic” of Bill and Hillary Clinton was that “they have no capacity for embarrassment.”

This last comment expresses a view of the Clintons frequently voiced by journalists and establishment figures over the years. Indeed, speculating on their motives has become something of a Washington parlor game. In this view, either the Clintons are utterly shameless, cynically assuming they will survive whatever scandal comes their way, or they are so convinced of their own virtue and benevolence that they are able to excuse whatever they have to do in the pursuit of their noble ends, no matter how low or unethical. We may never know the answer to this fascinating riddle.

Either way, the Clintons were just getting started. Once liberated from the White House, Bill hit the lecture circuit, collecting $105.5 million from 2001 through 2012 and raising hundreds of millions of dollars for the Clinton Foundation. Significantly, his biggest payments came not from sources in the United States but from foreign investors, businesses, and governments eager to please the former president—and probably hungry for access to the corridors of American power. Meanwhile, Hillary was quickly rising in the ranks of the US Senate, gaining influence
and power, especially on matters concerning national security and foreign policy. When she ran for the Democratic presidential nomination in 2008, her power prospects rocketed. While Barack Obama’s unexpected victory in the Democratic primaries apparently derailed this inexorable ascent, she still ended up in an even more powerful position than before.

When President-elect Obama first floated Hillary Clinton’s name for secretary of state in late 2008, serious questions arose about the sources of funds donated to various Clinton interests. Many were troubled by the fact that so much of the Clintons’ newfound wealth was tied to foreign contributors. During her tenure as a senator, two-thirds of Bill’s enormous speaking fees had come from foreign sources. (As we will see, after she became secretary of state, Bill’s speaking fees and income from foreign speechmaking ballooned.) There was also the fact that tens of millions of dollars had flowed to the Clinton Foundation from the foreign governments of Saudi Arabia, Kuwait, and the United Arab Emirates, as well as from dozens of foreign financiers.

Would Hillary feel indebted to these foreign donors? Would these relationships influence her decisions on matters affecting US interests?

Some foreign newspapers raised concerns about her “impartiality” because of the money funneled to her foundation from certain countries.
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Some foreign observers viewed these donations not as acts of disinterested charity but as efforts to buy goodwill and influence from the incoming secretary of state. Donations from Indian billionaires and industrialists, wrote the
Indian Express
, were about “jockeying for access and influence. What else explains why [donors are] so keen to donate to the Clinton Foundation, when discharging its own commitments in India has been, at best, very reluctant?”
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The late Christopher Hitchens, writing in 2009, wondered the same: why didn’t these third world oligarchs
“just donate the money directly [to charities in their own country] rather than distributing it through the offices of an outfit run by a seasoned ex-presidential influence-peddler”?
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The Clintons dismissed such concerns. During Hillary’s confirmation hearings before the Senate Foreign Relations Committee, members from both parties openly worried about global influence peddling. Then senator Richard Lugar said it was a serious problem. Lugar is no bomb thrower but as
Time
magazine put it, “a paragon of bipartisan collegiality.”
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He also happened to be a friend of the Clintons.

Lugar’s words were direct:

The core of the problem is that foreign governments and entities may perceive the Clinton Foundation as a means to gain favor with the Secretary of State. Although neither Senator Clinton, nor President Clinton has a personal financial stake in the Foundation, obviously its work benefits their legacy and their public service priorities.
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Lugar went on:

But the Clinton Foundation exists as a temptation for any foreign entity or government that believes it could curry favor through a donation. It also sets up potential perception problems with any action taken by the Secretary of State in relation to foreign givers or their countries.
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Hillary’s job was all-encompassing and touched on many vital issues with life-and-death outcomes. As Lugar warned,

The nature of the Secretary of State post makes recusal from specific policy decisions almost impossible, since even localized U.S. foreign policy activities can ripple across countries and continents. Every new foreign donation that is accepted by the Foundation comes with the risk it will be connected in the global media to a proximate State Department policy or decision.
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Lugar’s colleagues across the aisle shared his concerns. Senator John Kerry, chairman of the Senate Foreign Relations Committee, echoed the general view. “I think it’s fair to say that Senator Lugar is not speaking from a partisan’s perspective, but I think he is really expressing a view of the Committee as a whole.”

Politicians weren’t the only ones nervous about the Clintons’ flow of foreign funds. Mainstream media outlets like
Time
warned of “the danger that [foreign funds] might taint Hillary Clinton’s role as Secretary of State.”
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Hillary herself rejected the notion that a foreign government giving millions of dollars to her husband while she served as maestra of American foreign policy might present a problem. “Ultimately, there is no conflict between the foreign policy of the United States and the efforts of the Clinton Foundation seeking to reduce human suffering and increase opportunity for people in need,” she told the senators.
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But the Clintons’ attempts to downplay or dismiss the issue failed to quell concerns.

Incoming president Obama and his transition team were nervous about the influence of foreign funds as well. Before announcing Hillary as his choice for secretary of state, Obama directed his aides to conduct detailed and extensive negotiations with the Clinton camp over the issue. Doug Band, a Clinton confidant and top aide at the foundation, negotiated at length with Cheryl Mills, a former Clinton White House attorney who represented the Obama team. (Mills simultaneously served on the Clinton Foundation board, and would shortly
be appointed Hillary’s chief of staff at the State Department. Like other key Clinton retainers, she will appear several times in these pages.)

The two sides finally hammered out a memorandum of understanding (MOU). Bruce Lindsey, a longtime Clinton friend who ran the foundation, inked the deal between the Clinton Foundation and the incoming administration so Hillary’s nomination could go forward. Valerie Jarrett, Obama’s hard-nosed confidante, signed for the incoming president.

The MOU required the Clinton Foundation to submit to several conditions designed to address widespread concerns about possible foreign influence coming through donations and speaking fees. For one thing, the Clintons agreed to submit all future paid speeches to the State Department ethics office for review. They also committed to publicly disclose on an annual basis the names of any major donors to the Clinton Foundation and its initiatives. Finally, the Clintons said they would seek preapproval from the Obama administration on direct contributions to the Clinton Foundation from foreign governments or government-owned businesses.

Both Bill and Hillary were unequivocal in stating that they would be transparent about the flow of foreign money. In her written answers to the Senate Foreign Relations Committee, Hillary promised that “the Foundation will publish annually the names of all contributors for that year.”
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Bill went on CNN and said, “If she is going to be secretary of state, and I operate globally and I have people who contribute to these efforts globally, I think that it’s important to make it totally transparent.” Obama administration National Security Council spokesman Tommy Vietor agreed: “Going forward, all donors will be disclosed on an annual basis, and new donations from foreign governments will be scrutinized by government ethics officers.”
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