Clinton, Inc.: The Audacious Rebuilding of a Political Machine (32 page)

Sometime before the 2012 presidential election, Band approached Clinton with the idea of a multifaceted and comprehensive consulting business that could well make him, and by extension his patron Clinton, a ton of money. Along with Band was the man who would be Teneo’s chairman and CEO, Declan Kelly.

Kelly previously had served as the U.S. economic envoy to Northern Ireland, appointed to that position by Hillary Clinton in 2009. He was born in Tipperary, Ireland, and his brother Alan served in the European Parliament representing his home country. (Alan is now minister of state at the Department of Transport, Tourism and Sport in Ireland, where he’s a member of the Labour party.) A good-looking, dark-haired Irishman, Declan favored pinstriped suits, accented with a white-collared and -cuffed dress shirt.

A former colleague, who compared him to a snake oil salesman, says, “He was amazing to watch. Declan was the best salesperson I ever saw in my life.”

The idea for Teneo was to have Fortune 400 companies pay large monthly stipends in exchange for access to Band, Clinton, and their massive international network. The group would “consult” with the companies, offer strategic advice, and help them overcome issues in various countries across the globe. That was how it was billed.

I asked a former Teneo employee what these companies actually received. “Nothing,” says the employee. “There was this sort of implicit promise of access to Clinton or Clinton knowledge or people who are close to him or whatever. And that they did sell. But there was something really seedy about it.” (Defenders of Teneo would say that the president was already for sale—available to come to events or speak at conferences for the right price—and that the consulting company wasn’t necessary for the former president’s own multimillion-dollar business of selling himself.)

Nonetheless, the Clinton allies used their connections with senior executives at companies like Coca-Cola and Dow Chemical to bring in millions. And there were other companies, too—Bank of America, Harrah’s, Hess, UBS Wealth Management.

Clinton was of course the key to Teneo’s success. “The two needed the president,” a source says. “It was he who they were selling to their corporate clients. Or, more precisely, it was their proximity to power—President Clinton, and his wife, who was then secretary of state—and their own Rolodexes, which were a natural extension of the work they had done over the years for the Clintons.”

Because of his wife’s position, Bill wasn’t going to receive an actual piece of the company. That raised too many perception questions even for him. Instead he had a contract.

The contract was worth $3.5 million, a handsome fee even for the ex-president. “Everything the president did for Teneo he got paid for,” says a former Teneo employee. He would attend events where there were a hundred CEOs or a hundred big investors coming together. And with his speaking fee, Clinton would make hundreds of thousands of dollars just for an hour or two schmoozing with his corporate friends.

“I bet Dow was paying close to a million a month,” says a source, a former Clinton staffer. “And Coke probably, too, because Coke, when they [signed on] they got rid of all their other consultants.” They had contracts with at least four consultant companies and pushed all that business to Teneo.

The Manhattan-based Teneo built an impressive board of advisors, including former chairman of the Securities and Exchange Commission Harvey Pitt, former Reagan campaign manager Ed Rollins, a collection of loaded investment managers like Karim Shariff, and prestigious academics like Georgetown professor Victor Cha.
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There was only one problem that might stop the money from rolling in. At their preliminary meeting with Clinton to get his go-ahead on Teneo, the group was joined by two other guests who had until then stayed largely out of the family business: Chelsea Clinton and her husband, Marc Mezvinsky. They saw the promise of Teneo. They wanted in.

Chelsea, with Marc and her dad by her side, asked Band and Kelly for an equity stake in the company.

Band and Kelly demurred. As much as they might personally like Chelsea, they thought it would be a bad idea. Teneo was going to have offices around the world, in São Paulo, Melbourne, Hong Kong, Beijing, Dubai, Moscow, Brussels, London, and Dublin. It would raise too many questions to give a piece of the company to someone who was actually the daughter of the current secretary of state.

“They weren’t happy about that,” a source close to the situation says, referring to Chelsea and Marc.

Doug Band was clearly on his way out of Clinton Inc., but he already wanted to transition to a different kind of relationship with the former president. The business was an easy out—a way to maintain a relationship with the Clintons and maximize the network he had developed, but without having to travel around with the former president and be his direct aide.

And Chelsea wanted in. Going from not caring about the foundation and refusing to take part in foundation-related events before the 2008 presidential campaign, Chelsea had come around to seeing how useful it might be to her. And that no matter how much she might have wanted her own path in life, she’d always and forever be the daughter of Bill and Hillary Clinton.

By 2012, the combination of Band’s business dealings and brash self-promotion was causing trouble for the one man he couldn’t afford to alienate—the former president on whom everything built by the former bagman depended. There were reports that the Obama campaign—from whom the Clintons were looking for an alliance—hated him, that Hillary was worried about perceived conflicts between clients of Band’s consulting company and the State Department, and that Chelsea had concerns about conflicts of interest between Band’s business interests and her father’s foundation. As a friend of Bill Clinton told the
New Republic
, “the last thing anyone wants is noise.”

Indeed, over time, Band began to take some liberties with Clinton’s name. Band controlled Clinton’s most valuable commodity—his schedule—and a former White House colleague called Band “a gatekeeper who charged tolls.”
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With or without Clinton’s knowledge, the price Band charged for access to Clinton was enough to buy himself a $2.1 million condo in 2003, move to a $7.1 million condo in 2008, and add a $1.7 million expansion in 2009.
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Occasionally, Band’s dealings raised eyebrows. When the U.S. Postal Service exercised a purchase option of a Sarasota, Florida, post office building owned in part by Band’s father, Doug Band jacked up the price with an appeal to a Clinton ally on the Postal Service Board of Governors, who later resigned after an inspector general’s report said he failed to uphold his fiduciary duty to the service. Similarly unsubtle was the sales pitch Band arranged in 2012 at a small private gathering of wealthy VIPs in a Manhattan ballroom to hear Clinton, George W. Bush, and Tony Blair discuss terrorism and globalization. The sales pitch was for the corporate consulting company Band founded in 2009 (while also working for Clinton), and according to one guest at the gathering, the pitch was long-winded, “flagrant,” and “inappropriate.”
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The problem was less about what Band was charging as Clinton’s gatekeeper and more about who he was letting in the door. Victor Dahdaleh got in; he was later arrested in Britain and charged with bribing a Bahraini company with $9.5 million. Frank Giustra got in; he received a uranium-mining contract in Kazakhstan after Clinton traveled to the country and praised Kazakhstan’s corrupt and repressive dictator. Most notably, Raffaello Follieri got in; the con man (and then-boyfriend of actress Anne Hathaway) later pleaded guilty to fraud, conspiracy, and money laundering, forfeited $2.44 million, and served four years in federal prison.
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The
New Republic
accused Band of profiting off his relationship with the Clintons and said it concerned Chelsea. But, of course, none of this profiteering had been a problem for Chelsea when it involved other aides. Why didn't it bother her that Huma Abedin would profit off her many associations in ClintonWorld? Why didn't it bother Chelsea when her former minder Philippe Reines went on “contract,” which would allow him not to be full-time and to take on private and corporate clients through the consulting firm he founded, Beacon Global Strategies, whose mission and pitch sounds an awful lot like Teneo’s? At least Reines had waited to leave the State Department. Abedin hadn’t.

Beacon now boasts a roster of top executives with ties to the Clintons—as well as ties to the investigators into Benghazi and those who were supposed to have been on watch. There’s Andrew J. Shapiro, who served as a senior advisor to Hillary and later as an undersecretary in her State Department; there’s Jeremy Bash, Leon Panetta’s former chief of staff; Michael Allen, former staff director to the House Permanent Select Committee on Intelligence, one of the House committees investigating the Benghazi terror attack; and Michael Morell, who was number two at the CIA during the attack. “Business records reviewed by Fox News show that in April 2013, Beacon Global Strategies registered as an LLC,” Fox News’s Catherine Herridge reported.
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In other words: just in the middle of an ongoing investigation into Benghazi, principal actors were colluding to start a firm together—to take on high-paying clients and to turn a nice profit.

Throughout all of these mini-controversies, Bill Clinton stuck with Band, his traveling partner and all-around accomplice. They traveled around the world many times, visited celebrities and billionaires, hobnobbed with Nicolas Sarkozy in France, and even met with the late Kim Jong Il in North Korea.

Doug Band was the son Bill always wanted, according to numerous accounts. He was the closest thing Bill ever seemed to have to a friend. He knew too much about the president and his scandalous personal life to just kick him to the curb. And he was indispensable until he wasn’t.

And although he had been off the foundation payroll since 2010, a series of articles began to appear in the
New York Times
and elsewhere about financial improprieties at Clinton’s various foundations. All of them were in one way or another overseen by Doug Band. He was mentioned more than thirty times in
Vanity Fair
’s “The Follieri Charade,”
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and the
New Republic
’s Alec MacGillis wrote a hard-hitting and well-reported exposé in September 2013 called “Scandal at Clinton Inc.: How Doug Band Drove a Wedge Through a Political Dynasty.”
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At least one of the most damning articles on Band was written by the
New York Times
’ Amy Chozick, who at the time was one of the only reporters awarded an extensive interview with Chelsea.

Meanwhile, there was renewed focus on the financial questions surrounding Bill Clinton’s various enterprises, particularly how little money the Little Rock–based Clinton Foundation, designed as a charitable nonprofit, actually devoted to charitable causes. In 2011, for example, the William J. Clinton Foundation was listed among the 591 top U.S. foundations in terms of assets ($197,890,114). Its income that year alone was $62,769,161. In terms of grants given out, however, the Clinton Foundation was ranked a paltry 1,673, having given out only $4,728,000 in 2011, or less than 10 percent of the money it had taken in.
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Over its lifetime the foundation has supported some good causes. In 2011, for example, a $2,374,669 grant went to the Alliance for a Healthier Generation to combat childhood obesity; in 2009, $2,223,000 went to the American Heart Association.

Larger sums were sent to organizations and entities that seemed to help the Clintons themselves. A whopping $43,200,000 was given from the foundation to the National Archives and Records Administration to support an“[e]ndowment and partial transfer of building.” NARA, as it’s known, administers the Clinton Presidential Library. Almost $3 million went to the city of Little Rock, Arkansas, to support the Clinton Presidential Center Park there. The Clinton Foundation gave $1,981,227 in 2004 to another Clinton organ, the Clinton Foundation AIDS Initiative. Five grants, given each year from 2004 to 2008, went to the Miller Center in Charlottesville, Virginia, housed at the University of Virginia, with one to support an “[o]ral history project of Clinton presidency.”
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The total amount granted to that organization by the Clinton Foundation was $851,250.
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Executive compensation for the foundation during this time period, given to people like Bruce R. Lindsey, a longtime close friend of President Clinton, amounted to more than $5,393,900, according to tax records. And the salaries and benefits of all staff at the foundation are an eye-popping $220,218,840—well above the total grants for the lifetime of the foundation. Travel expenses paid by the Clinton Foundation far exceed the total of grants outside the top three, and for the years 2003–2011 totaled $55,628,306. Accounting alone has cost the foundation more than $1.5 million. Advertising and promotion are slated at $3.5 million. Even information technology has cost it more than $3 million. Occupancy is $22 million. And fundraising for the foundation has cost more than $25 million.
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Suddenly many of these embarrassments were noted in the press, and usually linked to criticisms of Doug Band’s mismanagement. It wasn’t long before President Clinton decided Band was a liability. Pretty soon Bill was living without the man he said he “wouldn’t be able to get through the day without.” The two men, inseparable for more than a decade, now speak only a handful of times a year, and their conversations are reportedly awkward at best. “It’s like when your wife cheats on you,” said a witness to the relationship, “and after the divorce, you have to see them at the friend’s wedding or at the supermarket. There’s a strangeness to it.”
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(Others have hinted that the two sneak private conversations a little more frequently.)

After twenty years of service to Clinton, Doug Band was unceremoniously dumped from the payroll of the William J. Clinton Foundation, his reputation taking one hit after another. In the spring of 2013, the organization was renamed the Bill, Hillary and Chelsea Clinton Foundation. And it was clear to all who was now firmly in charge.